TREATMENT OF SHORT-TIME UNEMPLOYMENT COMPENSATION PROGRAMS.

SEC. 401. TREATMENT OF SHORT-TIME UNEMPLOYMENT COMPENSATION PROGRAMS. (a) Authorization of Programs.— (1) Paragraph (4) of section 3304(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (C), by inserting “and” at the end of subparagraph (D) and by adding at the end thereof the following new subparagraph: “(E) amounts may be withdrawn for the payment of short-time compensation under a plan approved by the Secretary of Labor;” (2) Subsection (f) of section 3306 of such Code is amended by striking “and” at the end of paragraph (2) by striking the period at the end of paragraph (3) and inserting and”, and by adding at the end thereof the following new paragraph: “(4) amounts may be withdrawn for the payment of shorttime compensation under a plan approved by the Secretary of Labor.” (3) Section 303(a)(5) of the Social Security Act is amended by inserting before “; and” the following “:Provided further, That amounts may be withdrawn for the payment of short-time compensation under a plan approved by the Secretary of Labor”. 106 STAT. 299 (b) Assistance in Implementing Programs.—In order to assist States in establishing and implementing short-time compensation programs— (1) the Secretary of Labor (hereinafter in this section referred to as the “Secretary”) shall develop model legislative language which may be used by States in developing and enacting short-time compensation programs and shall propose such revisions of such legislative language as may be appropriate, and (2) the Secretary shall provide technical assistance and guidance in developing, enacting, and implementing such programs. The initial model legislative language referred to in paragraph (1) shall be developed not later than January 1, 1993. (c) Reports.— (1) Initial report.—Not later than January 1, 1995, the Secretary shall submit to the Congress a report on the implementation of this section. Such report shall include an evaluation of short-time compensation programs and shall contain such recommendations as the Secretary may deem advisable. (2) Subsequent reports.—After the submission of the report under paragraph (1), the Secretary shall submit such additional reports on the implementation of short-time compensation programs as the Secretary deems appropriate. (d) Definitions.—For purposes of this section— (1) Short-time compensation program.— The term “short-time compensation program” means a program under which— (A) individuals whose workweeks have been reduced by at least 10 percent are eligible for unemployment compensation; (B) the amount of unemployment compensation payable to any such individual is a pro rata portion of the unemployment compensation which would be payable to the individual if the individual were totally unemployed; (C) eligible employees are not required 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; (D) eligible employees may participate in an employer-sponsored training program to enhance job skills if such program has been approved by the State agency; and (E) there is a reduction in the number of hours worked by employees in lieu of imposing temporary layoffs. (2) State.—The term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands.