I 

108TH CONGRESS 

2D SESSION H. R. 3881

To amend the Trade Act of 1974 to extend the trade adjustment assistance 

program to the service sector, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 3, 2004

Mr. SMITH of Washington (for himself, Mr. HOLDEN, Mr. INSLEE, Mr. RANGEL, Mr. LEVIN, Mr. MATSUI, Mr. STARK, Mr. CARDIN, Mr. 

MCDERMOTT, Mr. MCNULTY, Mr. BECERRA, Mrs. JONES of Ohio, Mr. 

SPRATT, Mr. GEORGE MILLER of California, Mr. DICKS, Mr. BAIRD, Mr. 

LARSEN of Washington, and Ms. SLAUGHTER) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL

To amend the Trade Act of 1974 to extend the trade adjustment assistance program to the service sector, and for 

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Trade Adjustment As5 sistance Equity For Service Workers Act of 2004’’. 
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1 SEC. 2. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE 

2 TO SERVICES SECTOR. 

3 (a) ADJUSTMENT ASSISTANCE FOR WORKERS.—Sec4 tion 221(a)(1)(A) of the Trade Act of 1974 (19 U.S.C. 

5 2271(a)(1)(A)) is amended by striking ‘‘firm)’’ and insert6 ing ‘‘firm, and workers in a service sector firm or subdivi7 sion of a service sector firm or public agency)’’. 

8 (b) GROUP ELIGIBILITY REQUIREMENTS.—Section 

9 222 of the Trade Act of 1974 (19 U.S.C. 2272) is amend10 ed—

11 (1) in subsection (a)—

12 (A) in the matter preceding paragraph (1), 

13 by striking ‘‘agricultural firm)’’ and inserting 

14 ‘‘agricultural firm, and workers in a service sec15 tor firm or subdivision of a service sector firm 

16 or public agency)’’; 

17 (B) in paragraph (1), by inserting ‘‘or 

18 public agency’’ after ‘‘of the firm’’; and 

19 (C) in paragraph (2)—

20 (i) in subparagraph (A)(ii), by strik21 ing ‘‘like or directly competitive with arti22 cles produced’’ and inserting ‘‘or services 

23 like or directly competitive with articles 

24 produced or services provided’’; 

25 (ii) by striking subparagraph (B) and 

26 inserting the following: 
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1 ‘‘(B)(i) there has been a shift, by such 

2 workers’ firm, subdivision, or public agency to 

3 a foreign country, of production of articles, or 

4 in provision of services, like or directly competi5 tive with articles which are produced, or serv6 ices which are provided, by such firm, subdivi7 sion, or public agency; or 

8 ‘‘(ii) such workers’ firm, subdivision, or 

9 public agency has obtained or is likely to obtain 

10 services described in clause (i) from a foreign 

11 country.’’; 

12 (2) in subsection (b)—

13 (A) in the matter preceding paragraph (1), 

14 by striking ‘‘agricultural firm)’’ and inserting 

15 ‘‘agricultural firm, and workers in a service sec16 tor firm or subdivision of a service sector firm 

17 or public agency)’’; 

18 (B) in paragraph (2), by inserting ‘‘or 

19 service’’ after ‘‘related to the article’’; and 

20 (C) in paragraph (3)(A), by inserting ‘‘or 

21 services’’ after ‘‘component parts’’; 

22 (3) in subsection (c)—

23 (A) in paragraph (3)—

24 (i) by inserting ‘‘or services’’ after 

25 ‘‘value-added production processes’’; 
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1 (ii) by striking ‘‘or finishing’’ and in2 serting ‘‘, finishing, or testing’’; 

3 (iii) by inserting ‘‘or services’’ after 

4 ‘‘for articles’’; 

5 (iv) by inserting ‘‘(or subdivision)’’ 

6 after ‘‘such other firm’’; and 

7 (v) by striking ‘‘, if the certification’’ 

8 and all that follows through ‘‘Mexico’’; and 

9 (B) in paragraph (4)—

10 (i) by striking ‘‘for articles’’ and in11 serting ‘‘, or services, for articles or serv12 ices’’; and 

13 (ii) by inserting ‘‘(or subdivision)’’ 

14 after ‘‘such other firm’’; and 

15 (4) by adding at the end the following new sub16 section: 

17 ‘‘(d) BASIS FOR SECRETARY’S DETERMINATIONS.—

18 ‘‘(1) INCREASED IMPORTS.—For purposes of 

19 subsection (a)(2)(A)(ii), the Secretary may deter20 mine that increased imports of like or directly com21 petitive articles or services exist if the workers’ firm 

22 or subdivision, or customers of the workers’ firm or 

23 subdivision accounting for not less than 20 percent 

24 of the sales of the workers’ firm or subdivision, cer-
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1 tify to the Secretary that they are obtaining such ar2 ticles or services from a foreign country. 

3 ‘‘(2) OBTAINING SERVICES ABROAD.—For pur4 poses of subsection (a)(2)(B)(ii), the Secretary may 

5 determine that the workers’ firm, subdivision, or 

6 public agency has obtained or is likely to obtain like 

7 or directly competitive services from a foreign coun8 try based on a certification thereof from the work9 ers’ firm, subdivision, or public agency. 

10 ‘‘(3) AUTHORITY OF THE SECRETARY.—The 

11 Secretary may obtain the certifications under para12 graphs (1) and (2) through questionnaires or such 

13 other manner as the Secretary determines is appro14 priate.’’. 

15 (c) TRAINING.—Section 236(a)(2)(A) of the Trade 

16 Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is amended by 

17 striking ‘‘$220,000,000’’ and inserting ‘‘$440,000,000’’. 

18 (d) DEFINITIONS.—Section 247 of the Trade Act of 

19 1974 (19 U.S.C. 2319) is amended—

20 (1) in paragraph (1)—

21 (A) by inserting ‘‘or public agency’’ after 

22 ‘‘of a firm’’; and 

23 (B) by inserting ‘‘or public agency’’ after 

24 ‘‘or subdivision’’; 
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1 (2) in paragraph (2)(B), by inserting ‘‘or public 

2 agency’’ after ‘‘the firm’’; 

3 (3) by redesignating paragraphs (8) through 

4 (17) as paragraphs (9) through (18), respectively; 

5 (4) by inserting after paragraph (6) the fol6 lowing: 

7 ‘‘(7) The term ‘public agency’ means a depart8 ment or agency of a State or local government or of 

9 the Federal Government. 

10 ‘‘(8) The term ‘service sector firm’ means an 

11 entity engaged in the business of providing serv12 ices.’’. 

13 (e) TECHNICAL AMENDMENT.—Section 245(a) of the 

14 Trade Act of 1974 (19 U.S.C. 2317(a)) is amended by 

15 striking ‘‘, other than subchapter D’’. 

16 SEC. 3. TRAINING. 

17 (a) BASIS FOR WAIVER.—Section 231(c)(1) of the 

18 Trade Act of 1974 (19 U.S.C. 2291(c)(1)) is amended by 

19 adding at the end the following: 

20 ‘‘(G) ADVANCED DEGREE OR CERTIFI21 CATION.—The worker possesses a postgraduate 

22 degree from an institution of higher education 

23 (as defined in section 101(a) of the Higher 

24 Education Act of 1965) or equivalent foreign 

25 institution), or has received an equivalent post-
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1 graduate certification in a specialized field, and 

2 there is a reasonable expectation of employment 

3 at equivalent wages in the foreseeable future.’’. 

4 (b) TRAINING PROGRAMS.—Section 236(a)(5) of the 

5 Trade Act of 1974 (19 U.S.C. 2296(a)(5)) is amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (E)(ii); 

8 (2) by striking the period at the end of sub9 paragraph (F) and inserting ‘‘, and’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(G) continuation of enrollment at an institu12 tion of higher education (as defined in section 

13 101(a) of the Higher Education Act of 1965) for the 

14 purpose of obtaining a degree, for a period of no 

15 longer than 104 weeks, if prior to total or partial 

16 separation from adversely affected employment, the 

17 worker was enrolled in such program, and there is 

18 a reasonable expectation of employment at equiva19 lent wages upon completion of the program.’’. 

20 SEC. 4. TRADE ADJUSTMENT ASSISTANCE FOR FIRMS AND 

21 INDUSTRIES. 

22 (a) FIRMS.—

23 (1) ASSISTANCE.—Section 251 of the Trade 

24 Act of 1974 (19 U.S.C. 2341) is amended—
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1 (A) in subsection (a), by inserting ‘‘or 

2 service sector firm’’ after ‘‘(including any agri3 cultural firm’’; 

4 (B) in subsection (c)(1)—

5 (i) in the matter preceding subpara6 graph (A), by inserting ‘‘or service sector 

7 firm’’ after ‘‘any agricultural firm’’; 

8 (ii) in subparagraph (B)(ii), by insert9 ing ‘‘or service’’ after ‘‘of an article’’; and 

10 (iii) in subparagraph (C), by striking 

11 ‘‘articles like or directly competitive with 

12 articles which are produced’’ and inserting 

13 ‘‘articles or services like or directly com14 petitive with articles or services which are 

15 produced or provided’’; and 

16 (C) by adding at the end the following: 

17 ‘‘(e) BASIS FOR SECRETARY DETERMINATION.—

18 ‘‘(1) INCREASED IMPORTS.—For purposes of 

19 subsection (c)(1)(C), the Secretary may determine 

20 that increases of imports of like or directly competi21 tive articles or services exist if customers accounting 

22 for not less than 20 percent of the sales of the work23 ers’ firm certify to the Secretary that they are ob24 taining such articles or services from a foreign coun25 try. 
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1 ‘‘(2) AUTHORITY OF THE SECRETARY.—The 

2 Secretary may obtain the certifications under para3 graph (1) through questionnaires or such other man4 ner as the Secretary determines is appropriate. The 

5 subpoena power described in section 249 shall be ex6 tended to the Secretary for purposes of carrying out 

7 this subsection.’’. 

8 (2) AUTHORIZATION OF APPROPRIATIONS.—

9 Section 256(b) of the Trade Act of 1974 (19 U.S.C. 

10 2346(b)) is amended—

11 (A) by striking ‘‘$16,000,000’’ and insert12 ing ‘‘$32,000,000’’; and 

13 (B) by adding at the end the following: ‘‘If 

14 the amount appropriated pursuant to this sub15 section in any fiscal year is less than the 

16 amount authorized to be appropriated by this 

17 subsection, the Secretary shall consult with the 

18 Committee on Ways and Means and the Com19 mittee on Appropriations of the House of Rep20 resentatives, the Committee on Finance and the 

21 Committee on Appropriations of the Senate, 

22 and any other committee of appropriate juris23 diction in Congress on allocating the amount so 

24 appropriated.’’. 
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1 (3) DEFINITION.—Section 261 of the Trade 

2 Act of 1974 (19 U.S.C. 2351) is amended—

3 (A) by striking ‘‘For purposes of’’ and in4 serting ‘‘(a) FIRM.—For purposes of’’; and 

5 (B) by adding at the end the following: 

6 ‘‘(b) SERVICE SECTOR FIRM.—For purposes of this 

7 chapter, the term ‘service sector firm’ means a firm en8 gaged in the business of providing services.’’. 

9 (b) INDUSTRIES.—Section 265(a) of the Trade Act 

10 of 1974 (19 U.S.C. 2355(a)) is amended by inserting ‘‘or 

11 service’’ after ‘‘new product’’. 

12 (c) CLERICAL AMENDMENT.—(1) Section 249 of the 

13 Trade Act of 1974 (19 U.S.C. 2321) is amended—

14 (A) by amending the section heading to read as 

15 follows: 

16 ‘‘SEC. 249. SUBPOENA AUTHORITY.’’;

17 and 

18 (B) by striking ‘‘subpena’’ each place it appears 

19 and inserting ‘‘subpoena’’. 

20 (2) The item relating to section 249 in the table of 

21 contents of the Trade Act of 1974 is amended to read 

22 as follows:

‘‘249. Subpoena authority.’’.

23 SEC. 5. MONITORING AND REPORTING. 

24 Section 282 of the Trade Act of 1974 (19 U.S.C. 

25 2393) is amended—
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1 (1) in this first sentence—

2 (A) by striking ‘‘The Secretary’’ and in3 serting ‘‘(a) MONITORING PROGRAMS.—The 

4 Secretary’’; 

5 (B) by inserting ‘‘and services’’ after ‘‘im6 ports of articles’’; 

7 (C) by inserting ‘‘and domestic provision of 

8 services’’ after ‘‘domestic production’’; 

9 (D) by inserting ‘‘or providing services’’ 

10 after ‘‘producing articles’’; and 

11 (E) by inserting ‘‘, or provision of serv12 ices,’’ after ‘‘changes in production’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(b) COLLECTION OF DATA AND REPORTS.—

15 ‘‘(1) SECRETARY OF LABOR.—(A) Not later 

16 than 3 months after the date of the enactment of 

17 the Trade Adjustment Assistance Equity Service 

18 Workers Act of 2004, the Secretary of Labor shall 

19 implement a system to collect data on all adversely 

20 affected workers who receive adjustment assistance 

21 under this chapter, including the number of workers 

22 by State, industry, the cause of dislocation of each 

23 worker, the adjustment assistance received by each 

24 worker, and outcomes relating to employment, reten25 tion, and earnings. 
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1 ‘‘(B) Not later than 16 months after such date 

2 of enactment, the Secretary of Labor shall report to 

3 the Committee on Ways and Means of the House of 

4 Representatives, the Committee on Finance of the 

5 Senate, and any other committee of appropriate ju6 risdiction, on whether changes to eligibility require7 ments, benefits, or training funding should be made 

8 based on the data collected under subparagraph (A). 

9 ‘‘(2) SECRETARY OF COMMERCE.—Not later 

10 than 6 months after such date of enactment, the 

11 Secretary of Commerce shall, in consultation with 

12 the Secretary of Labor, conduct a study and report 

13 to the Congress on ways to improve the timeliness 

14 and coverage of data on trade in services, including 

15 methods to identify increased imports due to the re16 location of United States firms to foreign countries, 

17 and increased imports due to United States firms 

18 obtaining services from firms in foreign countries.’’. 

19 SEC. 6. MODIFICATIONS RELATING TO CREDIT FOR 

20 HEALTH INSURANCE COSTS OF CERTAIN TAA 

21 AND PBGC PENSION RECIPIENTS. 

22 (a) PRESUMPTIVE STATUS AS A TAA RECIPIENT.—

23 (1) IN GENERAL.—Subsection (c) of section 35 

24 of the Internal Revenue Code of 1986 is amended by 

25 adding at the end the following new paragraph: 
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1 ‘‘(5) PRESUMPTIVE STATUS AS A TAA RECIPI2 ENT.—

3 ‘‘(A) IN GENERAL.—The term ‘eligible in4 dividual’ shall include any individual who is cov5 ered by a petition filed with the Secretary of 

6 Labor under section 221 of the Trade Act of 

7 1974. This paragraph shall apply to any indi8 vidual only with respect to months which—

9 ‘‘(i) end after the date that such peti10 tion is so filed, and 

11 ‘‘(ii) begin before the Secretary of 

12 Labor makes a final determination with re13 spect to such petition. 

14 ‘‘(B) EXCEPTION.—If the Secretary, after 

15 consultation with the Secretary of Labor, deter16 mines that, at the time of the filing of such pe17 tition, there was not reasonable cause to believe 

18 that the petition would result in a certification 

19 by the Secretary of Labor, with respect to indi20 viduals covered by such petition—

21 ‘‘(i) subparagraph (A) shall not apply 

22 to such individuals, and 

23 ‘‘(ii) in the case of any such individual 

24 on whose behalf a payment is made under 

25 section 7527 with respect to a month de-
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1 scribed in paragraph (1), the tax imposed 

2 under this subtitle for the taxable year of 

3 such individual which includes the date of 

4 such determination shall be increased by 

5 the amount of such payments.’’. 

6 (2) CONFORMING AMENDMENT.—Paragraph (1) 

7 of section 7527(d) of such Code is amended by strik8 ing ‘‘or an eligible alternative TAA recipient (as de9 fined in section 35(c)(3))’’ and inserting ‘‘, an eligi10 ble alternative TAA recipient (as defined in section 

11 35(c)(3)), or an individual who is an eligible indi12 vidual by reason of section 35(c)(5)’’. 

13 (b) 100 PERCENT CREDIT FOR FIRST MONTH OF

14 HEALTH INSURANCE COSTS.—Subsection (a) of section 

15 35 of such Code is amended by inserting ‘‘(100 percent 

16 in the case of the taxpayer’s first eligible coverage 

17 month)’’ after ‘‘65 percent’’. 

18 (c) ADDITIONAL REQUIREMENTS FOR INDIVIDUAL

19 HEALTH INSURANCE COSTS.—

20 (1) IN GENERAL.—Subparagraph (A) of section 

21 35(e)(2) of such Code is amended by striking ‘‘sub22 paragraphs (B) through (H) of paragraph (1)’’ and 

23 inserting ‘‘paragraph (1) (other than subparagraphs 

24 (A) and (I) thereof)’’. 
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1 (2) RATING SYSTEM REQUIREMENT.—Subpara2 graph (J) of section 35(e)(1) of such Code is amend3 ed by adding at the end the following: ‘‘Such term 

4 does not include any insurance unless the premiums 

5 for such insurance are restricted based on a commu6 nity rating system or rate-band system.’’. 

7 (d) PERIOD OF CREDITABLE COVERAGE MEASURED

8 FROM DATE OF SEPARATION FROM EMPLOYMENT.—

9 (1) IN GENERAL.—Clause (i) of section 

10 35(e)(2)(B) of such Code is amended by striking 

11 ‘‘the date on which the individual seeks to enroll in 

12 the coverage described in subparagraphs (B) 

13 through (H) of paragraph (1)’’ and inserting ‘‘the 

14 end of the 30-day period described in paragraph 

15 (1)(J)’’. 

16 (2) SPECIAL RULE FOR ELIGIBLE PBGC PEN17 SION RECIPIENTS.—

18 (A) IN GENERAL.—Subsection (e) of sec19 tion 35 of such Code is amended by adding at 

20 the end the following new paragraph: 

21 ‘‘(4) SPECIAL RULE FOR ELIGIBLE PBGC PEN22 SION RECIPIENTS.—In the case of an eligible PBGC 

23 pension recipient (and any qualifying family member 

24 of such recipient), the term ‘qualified health insur25 ance’ shall not include any coverage described in 
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1 paragraph (1) (other than subparagraphs (A) and 

2 (I) thereof) unless such recipient enrolls in such cov3 erage during the 90-day period beginning on the 

4 later of—

5 ‘‘(A) the last day of the first month with 

6 respect to which such recipient becomes an eli7 gible PBGC pension recipient, or 

8 ‘‘(B) the date of the enactment of the 

9 Trade Adjustment Assistance Equity for Serv10 ice Workers Act of 2004.’’. 

11 (B) OUTREACH.—The Secretary of the 

12 Treasury shall carry out a program to notify in13 dividuals prior to their becoming eligible PBGC 

14 pension recipients (as defined in section 35 of 

15 the Internal Revenue Code of 1986) of the re16 quirement of subsection (e)(4) of such section. 

17 (e) CONTINUED QUALIFICATION OF FAMILY MEM18 BERS AFTER ELIGIBLE INDIVIDUAL BECOMES MEDICARE

19 ELIGIBLE.—Subsection (g) of section 35 is amended by 

20 redesignating paragraph (9) as paragraph (10) and insert21 ing after paragraph (8) the following new paragraph: 

22 ‘‘(9) CONTINUED QUALIFICATION OF FAMILY

23 MEMBERS AFTER ELIGIBLE INDIVIDUAL BECOMES

24 MEDICARE ELIGIBLE.—In the case of a month which 

25 would be an eligible coverage month with respect to 
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1 an eligible individual but for subsection (f)(2)(A), 

2 such month shall be treated as an eligible coverage 

3 month with respect to any qualifying family member 

4 of such eligible individual (but not with respect to 

5 such eligible individual).’’. 

6 (f) OFFERING OF FEDERAL FALLBACK COVERAGE IN

7 STATES NOT OFFERING STATE QUALIFIED HEALTH IN8 SURANCE.—

9 (1) PROVISION OF FALLBACK COVERAGE.—

10 (A) IN GENERAL.—The Director of the Of11 fice of Personnel Management jointly with the 

12 Secretary of the Treasury shall establish a pro13 gram under which individuals described in sub14 paragraph (B) are offered enrollment under 

15 health benefit plans that are made available 

16 under FEHBP. 

17 (B) INDIVIDUALS DESCRIBED.—For pur18 poses of subparagraph (A), individuals de19 scribed in this subparagraph are eligible indi20 viduals (as defined in subsection (c)(1) of sec21 tion 35 of the Internal Revenue Code of 1986) 

22 who reside in a State in which any qualified 

23 health insurance described in subparagraphs 

24 (B) through (I) of subsection (e)(1) of such sec25 tion is not offered. 
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1 (2) TERMS AND CONDITIONS.—The terms and 

2 conditions of health benefits plans under paragraph 

3 (1) shall be the same as the terms and coverage of4 fered under FEHBP, except that the premium 

5 charged for such health benefit plans offered under 

6 such paragraph shall be equal to the full premium 

7 (including both employer and beneficiary share) 

8 charged for such coverage for full-time employees 

9 under FEHBP. 

10 (3) STUDY.—The Director of the Office of Per11 sonnel Management jointly with the Secretary of the 

12 Treasury shall conduct a study of the impact of the 

13 offering of health benefit plans under this subsection 

14 on the terms and conditions, including premiums, 

15 for health benefit plans offered under FEHBP and 

16 shall submit to Congress, not later than 2 years 

17 after the date of the enactment of this Act, a report 

18 on such study. Such report may contain such rec19 ommendations regarding the establishment of sepa20 rate risk pools for individuals covered under 

21 FEHBP and eligible individuals covered this sub22 section as may be appropriate to protect the inter23 ests of individuals covered under FEHBP. 

24 (4) FEHBP DEFINED.—For purposes of this 

25 subsection, the term ‘‘FEHBP’’ means the Federal 
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1 Employees Health Benefits Program offered under 

2 chapter 89 of title 5, United States Code. 

3 (5) CONFORMING AMENDMENT.—Paragraph (1) 

4 of section 35(e) of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following: 

6 ‘‘(K) Coverage under a health benefits plan 

7 offered under section 6(e) of the Trade Adjust8 ment Assistance Equity for Service Workers 

9 Act of 2004.’’. 

10 (g) REPORT TO CONGRESS.—Not later than 18 

11 months after the date of the enactment of this Act, the 

12 Secretary of the Treasury shall transmit to the Congress 

13 a report which includes the recommendations of the Sec14 retary regarding increasing the number eligible individuals 

15 who are covered by qualified health insurance, including 

16 increasing such number by increasing the credit subsidy 

17 under section 35 of the Internal Revenue Code of 1986 

18 to make the premiums for such insurance more affordable. 

19 Terms used in this subsection which are defined in such 

20 section shall have the meaning given such terms by such 

21 section. 

22 (h) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to months beginning after the date 
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1 of the enactment of this Act in taxable years ending after 

2 such date.

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