Memorandum

U n it e d St a t e s G o v e r n m e n t FORM 0-11M

Ra il r o a d Re t ir e m e n t Bo a r d

March 17,2010

L-2010-01

TO : Ronald Russo

Director of Policy and Systems

FROM : Steven A. Barth 

General Couns

SUBJECT : Effect of Federal Trade Act Programs on Unemployment

Benefits under the Railroad Unemployment 

Insurance Act (RUIA)

This is in reply to an inquiry dated February 18,2010 where you asked this 

office to analyze the im pact that certain unemployment and 

reemployment programs under the "Federal Trade Act" would have on 

benefits received by railroad employees under the RUIA. Specifically this 

office was asked to analyze the Trade Adjustment Allowance (TAA) and 

the Trade Readjustment Allowance (TRA) benefits under the Federal Trade 

Act (Trade Act).

You reported to this office that the Railroad Retirement Board’s Network 

11 Manager based in Billings, Montana received an inquiry from 

Montana's State Unemployment TRA Manager. The State TRA Manager 

inquired whether employees of the Montana Rail Link Railroad (MRL) who 

were laid off could receive unemployment benefits under the Trade Act 

programs indicated previously (TAA and TRA) and w hat im pact receipt of 

these unemployment benefits would have on an individual's 

unemployment benefits under the RUIA. The state of M ontana’s TRA 

manager appears to be the official responsible for making determinations 

under the Trade Act if the workers im pacted by MRL’s lay-offs fall under 

the scope of the Trade Act programs. The programs are designed to 

provide retraining to employees who have been laid off specifically 

because it was officially determined their employer suffers from a lack of
work arising out of manufacturing plant closures in targeted instances.

The “ Federal Trade Act" discussed in the request refers to the Trade Act of 

1974 (P.L. 93-618, as amended). Originally, the Trade Act was 

promulgated to assist U.S. laborers to transition into more competitive jobs 

in the event that foreign competition resulted in the closure of factories or 

businesses in certain sectors of the U.S. economy. The original Trade Act 

extended funds for the assistance and retraining of workers until 1994. The 

Trade Act was reauthorized in 2002 by the Trade Act of 2002. Most 

recently. The Trade and Globalization Adjustment Assistance Act of 2009 

(TGAAA) which is Division B, Title I, Subtitle I of the American Recovery and 

Reinvestment Act of 2009 (P.L. 111-5) created a further reauthorization of 

funds for the retraining and unemployment benefits of workers harmed by 

the recent downturn in the U.S. economy.

Under the Trade Act and its subsequent reauthorizations, Trade 

Adjustment Allowance (TAA) and the Trade Readjustment Allowance 

(TRA) will provide unemployment style benefits to workers who continue to 

be enrolled in approved retraining programs. These benefits can last up 

to 52 weeks or, in certain training programs, an additional 78 weeks 

beyond the 52 week initial training period. MRL is independently (i.e. 

outside the scope of the Railroad Retirement Board) seeking approval for 

their employees to be qualified to receive these benefits under the Trade 

Act. The State of Montana's TRA program manager believes that MRL's 

employees have a good chance of being approved for the benefits.

The first question presented in your request asked what benefits MRL 

employees can receive without affecting their eligibility to receive 

unreduced unemployment benefits under the RUIA. The RUIA in section 4 

(a-1 )(ii) provides that, "There shall not be considered as a day of 

unemployment... with respect to any employee... any day in any period 

with respect to which the Board finds that he is receiving or will have 

received... unemployment, maternity, or sickness benefits under an 

unemployment, maternity, or sickness compensation law other than this 

Act, or any other social insurance payments under any law." The Board 

has established a precedent of interpreting this disqualifying condition 

strictly. In legal opinion L-86-38, a military retirement pension was deem ed 

to be a social insurance payment that disqualified receipt of 

unemployment benefits under the RUIA. Additionally, L-85-138 deemed 

that receipt of social security benefits was a disqualifying condition for the 

receipt of RUIA benefits.

In general, the Board considers unemployment, maternity, or sickness 

compensation benefits to be payments made under any law other than
the RUIA to be an unemployment insurance payment m ade to an 

employee with respect to an allotted time period. In other words, a 

worker may not receive these other payments for a period of time that he 

is out of work and also receives RUIA insurance payments for the same 

period of unemployment. Social insurance payments would be treated 

similarly. An employee cannot receive unreduced unemployment 

insurance payments for a period of unemployment if he is receiving 

payments under certain social insurance programs.1 In contrast to the 

previous category are payments not made or related to specific periods 

of time. These type of payments include subsistence allowances paid to 

military dependents, SSI payments, disability payments m ade by the VA, 

and payments under Medicare. Historically, tuition reimbursement 

payments would also not be tied to a specific period of unemployment.

Given the history and purpose of the Trade Act and the purpose behind 

the programs funded by the various reauthorizations of the Trade Act, the 

conclusion that must be reached is that the total "benefits" received 

under these programs would be a hybrid of benefits under the RUIA's 

consideration. Benefits tied to a specific period of time that an individual 

is unemployed would be considered other unemployment benefits 

received “under an unemployment law other than the RUIA" and would 

create reductions to RUIA unemployment insurance payments. 

Additionally, the payments could be considered to fall under the 

category of "any other social insurance payments under any law." Either 

consideration results in the same conclusion that an individual cannot 

receive Trade Act unemployment payments tied to a specific period of 

unemployment and receive unreduced RUIA unemployment payments. 

However, payments under a Trade Act program that are not tied to a 

specific period of unemployment but are designed as "Retraining Tuition 

Reimbursement," "Retraining Stipends," or "Dependent Subsistence 

Allowances11" would not trigger reductions to RUIA unemployment 

insurance payments.

The Board routinely must com pare State unemployment records with its 

own RUIA unemployment benefit records to ensure that railroad 

employees are not receiving unemployment benefits under two different 

systems for the same period of unemployment. The same is true for two 

similar Federal programs. The purpose of the Trade A ct and the RUIA is 

essentially the same - each law administers funds authorized for the 

assistance of an unemployed worker. A railroad employee has not 

historically been allowed to receive more than one unemployment 

benefit or social insurance payment that is tied to the same period of 

unemployment. The Trade Act does not constitute or create any 

exception to the RUIA's well established policy. A laid-off employee of
MRL will have his RUIA unemployment benefit reduced by any amount of 

Trade Act unemployment payments tied to the same period of 

unemployment. Additional retraining stipends that a worker may receive 

under the TRA or TAA programs that are not tied to the period of 

unemployment, but are designed as dependant allowances or tuition 

reimbursements would not create reductions to RUIA unemployment 

insurance payments.

You next inquired whether TAA/TRA benefits would be considered 

remuneration. It is my opinion that a remuneration determination is not 

necessary, since it is clear that as an unemployment benefit or a social 

insurance payment, TRA or TAA benefits tied to a specific period of 

unemployment will cause a reduction in RUIA unemployment benefits 

received by the laid-off employees of MRL in this circumstance. Since the 

controlling factor is whether or not the payment is tied to a period of 

unemployment, a remuneration determination would not need to be 

performed for dependant allowances or tuition reimbursement programs.

Next, you asked if the Montana State TRA Manager would be responsible 

for handling MRL claims for TAA benefits under the Trade Act. It is my 

opinion that the Railroad Retirement Board would not be involved in 

handling any of these claims. The Railroad Retirement Board's 

responsibility would be to closely monitor the roster of laid-off MRL 

employees to ensure that these individuals are only receiving 

unemployment benefits for a specific period of unemployment under one 

social insurance program, or have the proper deduction m ade to their 

RUIA benefits as necessary, depending on their TAA/TRA status. It would 

be up to the Department of Labor (DOL) and the DOL's state partners to 

determine who would handle claims under programs they administer.

Finally, you asked a multi-part question that seeks to determine whether a 

Montana State office, the DOL, or the local TRA Manager would 

coordinate job assistance for the laid-off MRL workers, assuming that there 

was no conflict with Trade Act benefits and RUIA benefits. This opinion 

concluded that overlapping benefits tied to the same period of 

unemployment would not be permissible under the RUIA. Further, the 

Railroad Retirement Board would not be involved in any coordination of 

Montana's state-provided job assistance programs juxtaposed with a 

Federal Program managed by the DOL.

While the Railroad Retirement Board would not be involved in 

coordinating programs between the State of Montana and the 

Department of Labor, the Railroad Retirement Board would be able to 

enter into an agreement or Memorandum of Understanding with another
agency to coordinate sickness or unemployment services. Section 12(f) of 

the RUIA does allow the Railroad Retirement Board to, “cooperate with or 

enter into agreement with the appropriate agencies charged with the 

administration of State, Territorial, Federal, or foreign unemploymentcompensation of sickness laws or employment offices...." (see section 

12(f) of the Railroad Unemployment Insurance Act). This section of the 

RUIA gives the Board the authority to enter into binding agreements with 

other state and Federal agencies to allow for the coordinated receipt of 

sickness or unemployment benefits and services through a single agency 

to individuals who qualify for multiple benefit systems from their 

employment. These agreements can be negotiated by the Railroad 

Retirement Board in instances where the Board finds that such an 

agreement is fair and reasonable as to all affected interests. The Office of 

General Counsel would assist Policy and Systems in the event it is deemed 

appropriate for the Railroad Retirement Board to enter into such an 

agreement to coordinate the receipt of RUIA payments in conjunction 

with Trade Act training benefits under the DOL programs discussed above.

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1 For a full list of Social Insurance Payments which will trigger reductions to RUIA

unemployment insurance payments, see AIM article 17, Section 1702, Appendix C.

1 Quoted phrases are examples of tuition and retraining reimbursement-style programs

that are not tied to specific periods of unemployment in other Federally funded

programs and are not necessarily TAA or TRA programs.