[Congressional Record Volume 156, Number 118 (Thursday, August 5, 2010)]
[Senate]
[Pages S6902-S6904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REED (for himself, Mrs. Shaheen, and Mr. Whitehouse):
  S. 3753. A bill to provide for the treatment and temporary financing 
of short-time compensation programs, to the Committee on Finance.
  Mr. REED. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3753

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Preventing 
     Unemployment Act of 2010''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Treatment of short-time compensation programs.
Sec. 3. Temporary financing of certain short-time compensation 
              payments.
Sec. 4. Temporary Federal short-time compensation.
Sec. 5. Grants for implementation of State short-time compensation 
              programs.
Sec. 6. Assistance and guidance in implementing programs.
Sec. 7. Reports.

     SEC. 2. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS.

       (a) Definition.--
       (1) In general.--Section 3306 of the Internal Revenue Code 
     of 1986 (26 U.S.C. 3306) is amended by adding at the end the 
     following new subsection:
       ``(v) Short-time Compensation Program.--For purposes of 
     this chapter, the term `short-time compensation program' 
     means a program under which--
       ``(1) the participation of an employer is voluntary;
       ``(2) an employer reduces the number of hours worked by 
     employees in lieu of temporary layoffs;
       ``(3) such employees whose workweeks have been reduced by 
     at least 10 percent, and by not more than the percentage, if 
     any, that is determined by the State to be appropriate, are 
     eligible for unemployment compensation;
       ``(4) the amount of unemployment compensation payable to 
     any such employee is a pro rata portion of the unemployment 
     compensation which would be payable to the employee if such 
     employee were totally unemployed;
       ``(5) such employees are not expected to meet the 
     availability for work or work search test requirements while 
     collecting short-time compensation benefits, but are required 
     to be available for their normal workweek;
       ``(6) eligible employees may participate, as appropriate, 
     in an employer-sponsored training program to enhance job 
     skills if such program has been approved by the State agency;
       ``(7) the State agency shall require an employer to certify 
     that the employer will continue to provide health benefits 
     and retirement benefits under a defined benefit plan (as 
     defined in section 414(j)) and contributions under a defined 
     contribution plan (as defined in section 414(i)) to any 
     employee whose workweek is reduced under the program under 
     the same terms and conditions as though the workweek of such 
     employee had not been reduced;
       ``(8) the State agency shall require an employer (or an 
     employer's association which is party to a collective 
     bargaining agreement) to submit a written plan describing the 
     manner in which the requirements of this subsection will be 
     implemented and containing such other information as the 
     Secretary of Labor determines is appropriate;
       ``(9) in the case of employees represented by a union, the 
     appropriate official of the union has agreed to the terms of 
     the employer's written plan and implementation is consistent 
     with employer obligations under the National Labor Relations 
     Act; and
       ``(10) only such other provisions are included in the State 
     law as the Secretary of Labor determines appropriate for 
     purposes of a short-term compensation program.''.
       (2) Effective date.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendment made by paragraph (1) shall take effect on the 
     date of the enactment of this Act.
       (B) Delay permitted.--In the case of a State that is 
     administering a short-time compensation program as of the 
     date of the

[[Page S6903]]

     enactment of this Act and the State law cannot be 
     administered consistent with the amendment made by paragraph 
     (1), such amendment shall take effect on the earlier of--
       (i) the date the State changes its State law in order to be 
     consistent with such amendment; or
       (ii) the date that is 2 years after the date of the 
     enactment of this Act.
       (b) Conforming Amendments.--
       (1) Internal revenue code of 1986.--
       (A) Subparagraph (E) of section 3304(a)(4) of the Internal 
     Revenue Code of 1986 is amended to read as follows:
       ``(E) amounts may be withdrawn for the payment of short-
     time compensation under a short-time compensation program (as 
     defined under section 3306(v));''.
       (B) Subsection (f) of section 3306 of the Internal Revenue 
     Code of 1986 is amended--
       (i) by striking paragraph (5) (relating to short-term 
     compensation) and inserting the following new paragraph:
       ``(5) amounts may be withdrawn for the payment of short-
     time compensation under a short-time compensation program (as 
     defined in subsection (v)); and'', and
       (ii) by redesignating paragraph (5) (relating to self-
     employment assistance program) as paragraph (6).
       (2) Social security act.--Section 303(a)(5) of the Social 
     Security Act is amended by striking ``the payment of short-
     time compensation under a plan approved by the Secretary of 
     Labor'' and inserting ``the payment of short-time 
     compensation under a short-time compensation program (as 
     defined in section 3306(v) of the Internal Revenue Code of 
     1986)''.
       (3) Unemployment compensation amendments of 1992.--
     Subsections (b) through (d) of section 401 of the 
     Unemployment Compensation Amendments of 1992 (26 U.S.C. 3304 
     note) are repealed.

     SEC. 3. TEMPORARY FINANCING OF CERTAIN SHORT-TIME 
                   COMPENSATION PAYMENTS.

       (a) Payments to States.--
       (1) In general.--Subject to paragraph (3), there shall be 
     paid to a State an amount equal to 100 percent of the amount 
     of short-time compensation paid under a short-time 
     compensation program (as defined in section 3306(v) of the 
     Internal Revenue Code of 1986, as added by section 2(a)) 
     under the provisions of the State law. Notwithstanding 
     section 2(a)(2), a State administering a short-term 
     compensation program as of the date of the enactment of this 
     Act shall not be eligible to receive payments under this 
     section until the program administered by such State meets 
     the requirements of section 3306(v) of the Internal Revenue 
     Code of 1986 (as so added). Payments shall also be made for 
     additional State administrative expenses incurred (as 
     determined by the Secretary).
       (2) Terms of payments.--Payments made to a State under 
     paragraph (1) shall be payable by way of reimbursement in 
     such amounts as the Secretary estimates the State will be 
     entitled to receive under this section for each calendar 
     month, reduced or increased, as the case may be, by any 
     amount by which the Secretary finds that the Secretary's 
     estimates for any prior calendar month were greater or less 
     than the amounts which should have been paid to the State. 
     Such estimates may be made on the basis of such statistical, 
     sampling, or other method as may be agreed upon by the 
     Secretary and the State agency of the State involved.
       (3) Limitations on payments.--
       (A) General payment limitations.--No payments shall be made 
     to a State under this section for benefits paid to an 
     individual by the State in excess of 26 weeks of benefits.
       (B) Employer limitations.--No payments shall be made to a 
     State under this section for benefits paid to an individual 
     by the State under a short-time compensation program if such 
     individual is employed by an employer--
       (i) whose workforce during the 3 months preceding the date 
     of the submission of the employer's short-time compensation 
     plan has been reduced by temporary layoffs of more than 20 
     percent; or
       (ii) on a seasonal, temporary, or intermittent basis.
       (b) Applicability.--Payments to a State under subsection 
     (a) shall be available for weeks of unemployment--
       (1) beginning on or after the date of the enactment of this 
     Act; and
       (2) ending on or before the date that is 3 years after the 
     date of the enactment of this Act.
       (c) Funding and Certifications.--
       (1) Funding.--There are appropriated, out of moneys in the 
     Treasury not otherwise appropriated, such sums as may be 
     necessary for purposes of carrying out this section.
       (2) Certifications.--The Secretary shall from time to time 
     certify to the Secretary of the Treasury for payment to each 
     State the sums payable to such State under this section.
       (d) Definitions.--In this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor.
       (2) State; state agency; state law.--The terms ``State'', 
     ``State agency'', and ``State law'' have the meanings given 
     those terms in section 205 of the Federal-State Extended 
     Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

     SEC. 4. TEMPORARY FEDERAL SHORT-TIME COMPENSATION.

       (a) Federal-State Agreements.--
       (1) In general.--Any State which desires to do so may enter 
     into, and participate in, an agreement under this section 
     with the Secretary provided that such State's law does not 
     provide for the payment of short-time compensation under--
       (A) a short-time compensation program (as defined in 
     section 3306(v) of the Internal Revenue Code of 1986, as 
     added by section 2(a)); or
       (B) subsections (b) through (d) of section 401 of the 
     Unemployment Compensation Amendments Act of 1992, as in 
     effect on the day before the date of the enactment of this 
     Act.
       (2) Ability to terminate.--Any State which is a party to an 
     agreement under this section may, upon providing 30 days' 
     written notice to the Secretary, terminate such agreement.
       (b) Provisions of Federal-State Agreement.--
       (1) In general.--Any agreement under this section shall 
     provide that the State agency of the State will make payments 
     of short-time compensation under a plan approved by the 
     State. Such plan shall provide that payments are made in 
     accordance with the requirements under section 3306(v) of the 
     Internal Revenue Code of 1986, as added by section 2(a).
       (2) Limitations on plans.--
       (A) General payment limitations.--A short-time compensation 
     plan approved by a State shall not permit the payment of 
     short-time compensation in excess of 26 weeks.
       (B) Employer limitations.--A short-time compensation plan 
     approved by a State shall not provide payments to an 
     individual if such individual is employed by an employer--
       (i) whose workforce during the 3 months preceding the date 
     of the submission of the employer's short-time compensation 
     plan has been reduced by temporary layoffs of more than 20 
     percent; or
       (ii) on a seasonal, temporary, or intermittent basis.
       (3) Employer payment of costs.--Any short-time compensation 
     plan entered into by an employer must provide that the 
     employer will pay the State an amount equal to one-half of 
     the amount of short-time compensation paid under such plan. 
     Such amount shall be deposited in the State's unemployment 
     fund and shall not be used for purposes of calculating an 
     employer's contribution rate under section 3303(a)(1) of the 
     Internal Revenue Code of 1986.
       (c) Payments to States.--
       (1) In general.--There shall be paid to each State with an 
     agreement under this section an amount equal to--
       (A) one-half of the amount of short-time compensation paid 
     to individuals by the State pursuant to such agreement; and
       (B) any additional administrative expenses incurred by the 
     State by reason of such agreement (as determined by the 
     Secretary).
       (2) Terms of payments.--Payments made to a State under 
     paragraph (1) shall be payable by way of reimbursement in 
     such amounts as the Secretary estimates the State will be 
     entitled to receive under this section for each calendar 
     month, reduced or increased, as the case may be, by any 
     amount by which the Secretary finds that the Secretary's 
     estimates for any prior calendar month were greater or less 
     than the amounts which should have been paid to the State. 
     Such estimates may be made on the basis of such statistical, 
     sampling, or other method as may be agreed upon by the 
     Secretary and the State agency of the State involved.
       (3) Funding.--There are appropriated, out of moneys in the 
     Treasury not otherwise appropriated, such sums as may be 
     necessary for purposes of carrying out this section.
       (4) Certifications.--The Secretary shall from time to time 
     certify to the Secretary of the Treasury for payment to each 
     State the sums payable to such State under this section.
       (d) Applicability.--An agreement entered into under this 
     section shall apply to weeks of unemployment--
       (1) beginning on or after the date on which such agreement 
     is entered into; and
       (2) ending on or before the date that is 2 years after the 
     date of the enactment of this Act.
       (e) Transition Rule.--If a State has entered into an 
     agreement under this section and subsequently enacts a State 
     law providing for the payment of short-time compensation 
     under a short-time compensation program (as defined in 
     section 3306(v) of the Internal Revenue Code of 1986, as 
     added by section 2(a)), the State shall not be eligible for 
     payments under this section for weeks of unemployment 
     beginning after the effective date of such State law.
       (f) Definitions.--In this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor.
       (2) State; state agency; state law.--The terms ``State'', 
     ``State agency'', and ``State law'' have the meanings given 
     those terms in section 205 of the Federal-State Extended 
     Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

     SEC. 5. GRANTS FOR IMPLEMENTATION OF STATE SHORT-TIME 
                   COMPENSATION PROGRAMS.

       (a) Grants.--
       (1) In general.--The Secretary shall award start-up grants 
     to State agencies--
       (A) in States that enact short-time compensation programs 
     (as defined in section 3306(v) of the Internal Revenue Code 
     of 1986, as added by section 2(a)) on or after May 1,

[[Page S6904]]

     2010, for the purpose of creating such programs; and
       (B) that apply for such grants not later than September 30, 
     2012.
       (2) Amount.--The amount of a grant awarded under paragraph 
     (1) shall be an amount determined by the Secretary based on 
     the costs of implementing a short-time compensation program.
       (3) Only 1 grant per state.--A State agency is only 
     eligible to receive 1 grant under this section.
       (b) Funding.--There are appropriated, out of moneys in the 
     Treasury not otherwise appropriated, such sums as may be 
     necessary for purposes of carrying out this section.
       (c) Reporting.--The Secretary may establish reporting 
     requirements for State agencies receiving a grant under this 
     section in order to provide oversight of grant funds used by 
     States for the creation of the short-time compensation 
     programs.
       (d) Definitions.--In this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor.
       (2) State; state agency.--The terms ``State'' and ``State 
     agency'' have the meanings given those terms in section 205 
     of the Federal-State Extended Unemployment Compensation Act 
     of 1970 (26 U.S.C. 3304 note).

     SEC. 6. ASSISTANCE AND GUIDANCE IN IMPLEMENTING PROGRAMS.

       In order to assist States in establishing, qualifying, and 
     implementing short-time compensation programs (as defined in 
     section 3306(v) of the Internal Revenue Code of 1986, as 
     added by section 2(a)), the Secretary of Labor shall--
       (1) develop model legislative language which may be used by 
     States in developing and enacting such programs and 
     periodically review and revise such model legislative 
     language;
       (2) provide technical assistance and guidance in 
     developing, enacting, and implementing such programs;
       (3) establish reporting requirements for States, including 
     reporting on--
       (A) the number of averted layoffs;
       (B) the number of participating companies and workers; and
       (C) such other items as the Secretary of Labor determines 
     are appropriate.

     SEC. 7. REPORTS.

       (a) Initial Report.--Not later than 4 years after the date 
     of the enactment of this Act, the Secretary of Labor shall 
     submit to Congress and to the President a report or reports 
     on the implementation of the provisions of this Act, 
     including an analysis of the significant impediments to State 
     enactment and implementation of short-time compensation 
     programs (as defined in section 3306(v) of the Internal 
     Revenue Code of 1986, as added by section 2(a)).
       (b) Subsequent Reports.--After the submission of the report 
     under subsection (a), the Secretary of Labor may submit such 
     additional reports on the implementation of short-time 
     compensation programs as the Secretary deems appropriate.
       (c) Funding.--There are appropriated, out of any moneys in 
     the Treasury not otherwise appropriated, to the Secretary of 
     Labor, $1,500,000 to carry out this section, to remain 
     available without fiscal year limitation.
                                 ______