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[Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means (Green Book)]
[Program Descriptions]
[Section 6. Trade Adjustment Assistance]
[From the U.S. Government Printing Office, www.gpo.gov]

 
SECTION 6 - TRADE ADJUSTMENT ASSISTANCE

CONTENTS

Overview
Trade Adjustment Assistance Program for Workers
 Certification Requirements
 Qualifying Requirements for Trade Readjustment Allowances
 Cash Benefit Levels and Duration
 Training and Other Employment Services, Job Search, and 
 Relocation Allowances
  Health Coverage Tax Credit
Alternative Trade Adjustment Assistance for Older Workers
NAFTA Worker Security Act
Funding of TAA and NAFTA Programs
Trade Adjustment Assistance Program for Firms
 Benefits
 Funding
Trade Adjustment Assistance Program for Farmers
Legislative History

OVERVIEW

Federal assistance is offered to workers, firms, and farmers that are 
affected adversely by foreign trade. This assistance is provided 
through four programs which are discussed below.   Two of these 
programs aid displaced workers and are administered by the U.S. 
Department of Labor. The older of the two, Trade Adjustment Assistance 
for Workers (TAA), originated in 1962 and was revamped by the Trade 
Act of 1974 and again by the Trade Act of 2002.  The North American 
Free Trade Agreement (NAFTA) Implementation Act in 1993 authorized a 
somewhat different version of this program to aid workers who lost 
their jobs because of trade with Canada or Mexico or plant relocation 
to either of those countries, but this program was closed to new 
participants when TAA was reformed in 2002. The third program, Trade 
Adjustment Assistance for Firms, is administered by the U.S. Department 
of Commerce and offers technical assistance to firms designed to 
improve their capability to compete with imported goods. Trade 
Adjustment Assistance for Farmers is a new program aimed at 
addressing low farm prices caused at least partly by imports.

TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR WORKERS

Trade Adjustment Assistance for Workers under sections 221-49 of the 
Trade Act of 1974, as amended, consists of these benefits for 
certified and otherwise qualified workers: trade readjustment 
allowances (TRA), employment services, training and additional TRA 
while in training, job search and relocation allowances, and 
assistance in paying health insurance premiums. (In general, benefits 
identified in this chapter as newly introduced by the Trade Act of 
2002 are available only to workers in groups that submitted their 
petitions for certification on or after November 4, 2002, but the 
health insurance assistance was available to those eligible for TAA 
in December 2002.) The program is administered by the Employment and 
Training Administration (ETA) of the Department of Labor through 
State agencies under cooperative agreements between each State and the 
Secretary of Labor. ETA processes petitions and issues certifications 
or denials of petitions by groups of workers for eligibility to apply 
for TAA. The State agencies act as Federal agents in providing program 
information, processing applications, determining individual worker 
eligibility for benefits, issuing payments, and providing reemployment 
services and training opportunities.

CERTIFICATION REQUIREMENTS

 	A two-step process is involved in the determination of whether 
an individual worker will receive TAA: (1) certification by the 
Secretary of Labor of a petitioning group of workers in a particular 
firm as eligible to apply; and (2) approval by the State agency 
administering the program of the application for benefits of an 
individual worker covered by a certification.  The process begins when 
a group of three or more workers, their union or authorized 
representative, their employer, or a one-stop operator or partner files 
a petition with the ETA and the Governor of the State for certification 
of group eligibility. To certify a petitioning group of workers 
as eligible to apply for adjustment assistance under prior law, the 
Secretary previously had to determine that three conditions were met:
1. A significant number or proportion of the workers in the firm or 
subdivision of the firm has been or is threatened to be totally or 
partially laid off;
2. Sales and/or production of the firm or subdivision have decreased 
absolutely; and
3. Increased imports of articles like or directly competitive with 
articles produced by the firm or subdivision of the firm have 
"contributed importantly" to both the layoffs and the decline in 
sales or production.
The Trade Act of 2002 expanded the potential eligibility coverage to 
include workers in any firm or subdivision of a firm that shifts 
production to certain other countries. This provision was previously 
extended by the NAFTA-Transitional Adjustment Assistance (NAFTA-TAA)
program only to firms that moved to Canada or Mexico. The new law 
includes countries that have signed a free trade agreement with the 
United States and beneficiary countries receiving preferential 
treatment. It also extends eligibility to workers in these firms if 
there has been or is likely to be an increase in imports of articles 
like or directly competitive with those they produced.

TABLE 6-1--NUMBER OF PETITIONS INSTITUTED AND CERTIFIED AND ESTIMATED 
NUMBER OF WORKERS PETITIONING AND CERTIFIED FOR TAA, 1975-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

 	
	The newly expanded program also extends eligibility to adversely 
affected secondary workers in firms that are either upstream suppliers 
or downstream producers. The articles produced by upstream workers must 
be component parts of the articles that were the basis for the primary 
firm's certification of eligibility for TAA. Downstream workers must 
directly perform additional, value-added production processes, 
including final assembly or finishing, on the products of the primary 
firm. An additional eligibility requirement for downstream producers is 
that the primary firm's certification must be based on increased imports 
from or a shift in production to Canada or Mexico.

	Upon receipt of a petition, the State must ensure that rapid 
response assistance and appropriate core and intensive employment 
services are made available to the workers to the extent authorized 
under the Workforce Investment Act of 1998. The State also is required 
to assist the ETA in the review of the petition. The Secretary is 
required to make the eligibility determination within 40 days after a 
petition is filed. A certification of eligibility to apply for TAA 
covers workers who meet the requirements and whose last total or 
partial separation from the firm or subdivision before applying for 
benefits occurred within 1 year prior to the filing of the petition. 
Table 6-1 provides an overview of the number of petitions instituted
and certified since 1975.

TABLE 6-2--ESTIMATED NUMBER OF WORKERS CERTIFIED BY MAJOR INDUSTRIES, 
FY 1975-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

	State agencies must give written notice by mail to each worker 
to apply for TAA where it is believed the worker is covered by a 
certification of eligibility and also must publish notice of each 
certification in newspapers of general circulation in areas where 
certified workers reside. State agencies also must advise each 
adversely affected worker, at the time that the worker applies for 
unemployment compensation (UC), of TAA benefits as well as the 
procedures, deadlines, and qualifying requirements for applying. 
State agencies must advise each such worker to apply for training 
before or at the same time that the worker applies for TRA benefits 
and promptly interview each certified worker and review suitable 
training opportunities that are available. Table 6-2 summarizes 
the number of workers certified by major industries since 1975.
    
QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES

In order to receive entitlement to payment of a TRA for any week of 
unemployment, an individual must be an adversely affected worker 
covered by a certification, file an application with the State agency, 
and meet the following qualifying requirements:
 	1. The worker's first qualifying separation from adversely 
 affected employment occurred within the period of the certification 
 applicable to that worker, i.e., on or after the "impact date" in the 
 certification (the date on which total or partial layoffs in the firm 
 or subdivision thereof began or threatened to begin, but never more 
 than 1 year prior to the date of the petition), within 2 years after 
 the date the Secretary of Labor issued the certification covering the 
 worker, and before the termination date (if any) of the certification.
2.  The worker was employed for at least 26 weeks during the 52-week 
period preceding the week of the first qualifying separation at wages
of $30 or more per week in adversely affected employment with a single 
firm or subdivision of a firm. A week of unemployment includes the 
week in which layoff occurs and up to 7 weeks of employer-authorized 
vacation, sickness, injury, maternity, or military leave, or service as
a full-time union representative. Weeks of disability covered by 
workers' compensation and weeks of active duty in a military reserve 
status also may count toward the 26-week minimum.
 3. The worker was entitled to UC, has exhausted all rights to any UC 
entitlement, including any extended benefits or Federal supplemental 
compensation (if in existence), and does not have an unexpired waiting 
period for any UC.
4.   The worker must not be disqualified with respect to the particular 
week of unemployment for extended benefits by reason of the work 
acceptance and job search requirements under section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970.  All 
TRA claimants in all States are subject to the provisions of the 
extended benefits "suitable work" test under that Act (i.e., must 
accept any offer of suitable work, actively engage in seeking work, 
and register for work) after the end of their regular UC benefit period 
as a precondition for receiving any weeks of TRA payments. The extended 
benefits work test does not apply to workers enrolled or participating 
in a TAA-approved training program; the test does apply to workers for 
whom TAA-approved training is certified as not feasible or appropriate.
5.   In order to receive basic TAA payments, the worker must be 
enrolled in, or have completed following separation from adversely 
affected employment within the certification period, a training program 
approved by the Secretary of Labor unless the Secretary has determined 
and submitted a written statement to the individual worker certifying 
that approval of training is not "feasible or appropriate" for one of 
the six reasons specified in the 2002 Act: likelihood of recall, 
possession of marketable skills, proximity to retirement age, poor 
health, unavailability of timely enrollment, or unavailability of 
suitable training.  No cash benefits may be paid to a worker who, 
without justifiable cause, has failed to begin participation or has 
ceased participation in an approved training program until the worker 
begins or resumes participation, or to a worker whose waiver of 
participation in training is revoked in writing by the Secretary.
This training requirement to encourage and enable workers to obtain 
early reemployment became effective under the Omnibus Trade and 
Competitiveness Act (OTCA) amendments as of November 21, 1988. This 
1988 amendment replaced a 1986 amendment that instituted a job search 
requirement as a condition for receiving cash benefits. Waivers from 
the training requirement were granted completely at the discretion of 
the Secretary of Labor until the Trade Act of 2002 specified criteria 
for the waivers and set the duration at 6 months unless the Secretary 
determines otherwise.

CASH BENEFIT LEVELS AND DURATION

A worker is entitled to TRA payments for weeks of unemployment 
beginning the later of (a) the first week beginning more than 60 days 
after the filing date of the petition that resulted in the 
certification under which the worker is covered, or (b) the first 
week after the employee is totally separated from work. The TRA cash 
benefit amount payable to a worker for a week of total unemployment is 
equal to, and a continuation of, the most recent weekly benefit amount 
of UC payable to that worker preceding that worker's first exhaustion 
of UC following the worker's first total qualifying separation under 
the certification, reduced by any Federal training allowance and 
disqualifying income deductible under UC law.
The maximum amount of basic TRA benefits payable to a worker for the 
period covered by any certification is 52 times the TRA payable for a
week of total unemployment minus the total amount of UC benefits to 
which the worker was entitled in the benefit period in which the first 
qualifying separation occurred. For example, a worker receiving 39 
weeks of UC regular and extended benefits could receive a maximum 13 
weeks of basic TRA benefits. UC and TRA payments combined are limited 
to a maximum 52 weeks in all cases involving extended compensation 
benefits. Thus, a worker who received 52 or more weeks of unemployment
benefits would not be entitled to basic TRA. TRA benefits are not 
payable to workers participating in on-the-job training.
The eligibility period for collecting basic TRA is the 104-week period 
that immediately follows the week in which a total qualifying 
separation occurs. If the worker has a subsequent total qualifying 
separation under the same certification, the eligibility period for 
basic TRA moves from the prior eligibility period to 104 weeks after 
the week in which the subsequent total qualifying separation occurs.
A worker may receive up to 26 additional weeks of TRA benefits after 
collecting basic benefits (up to a total maximum of 78 weeks) if that 
worker is participating in approved training. The 2002 Act extends 
this additional period another 26 weeks for those in training and a 
further 26 weeks for those in need of remedial education (making the 
new maximum 130 weeks). To receive the additional benefits, the worker 
must apply for the training program within 210 days after certification 
or first qualifying separation, whichever date is later. Additional 
benefits may be paid only during the 26-week (52-week or 78-week under 
the new program) period that follows either the last week of 
entitlement to basic TRA or the last week before training begins, if 
training begins after exhaustion of basic TRA.
A worker participating in approved training continues to receive basic 
and additional TRA payments during breaks in such training if the
break does not exceed 14 days (30 days under the new TAA) and the 
worker was participating in the training before the beginning of 
the break, resumes participation in the training after the break ends, 
and the break is designated in the training schedule. Weeks when TRA 
is not payable because of this break provision count against the 
eligibility periods for both basic and additional TRA. Annual outlays, 
number of recipients, and average weekly benefits for TRAs are 
presented in Table 6-3.

TRAINING AND OTHER EMPLOYMENT SERVICES, JOB SEARCH, AND RELOCATION 
ALLOWANCES
                               
Training and other employment services and job search and relocation 
allowances are available through State agencies to certified workers 
whether or not they have exhausted UC benefits and become eligible 
for TRA payments.    
Employment services consist of counseling, vocational testing, job 
search and placement, and other supportive services, provided for 
under any other Federal law.
Training, preferably on the job, must be approved for a worker if 
the following six conditions are met:
 1. There is no suitable employment available;
 2. The worker would benefit from appropriate training;
 3. There is a reasonable expectation of employment following training 
completion;
 4. Approved training is reasonably available from government agencies 
 or private sources;
 5. The worker is qualified to undertake and complete such training; 
 and
 6. Such training is suitable for the worker and available at 
 reasonable cost.
If training is approved, the workers are entitled to payment of the 
costs by the Secretary directly or through a voucher system unless they 
have been paid or are reimbursable under another Federal law. 
On-the-job training costs are payable only if such training is not at 
the expense of currently employed workers. The OTCA amendments in 1988 
added remedial education as a separate and distinct approvable 
training program, and the Trade Act of 2002 went further in 
authorizing an additional 26 weeks of training and TRA support for 
such education. As of the 1988 amendments, approved training is an 
entitlement in any case in which the six criteria for approval are 
reasonably met, up to an $80 million statutory ceiling on annual 
fiscal year training costs (including job search and relocation 
allowances and subsistence payments) payable from TAA funds. The 
2002 Act raised this ceiling to $220 million. Up to this limit, 
workers are entitled to have the costs of approved training paid on 
their behalf. If the Secretary foresees that the $220 million ceiling 
will be exceeded in any fiscal year, the Secretary will decide how 
remaining TAA funds are apportioned among the States for the balance 
of that year.

TABLE 6-3--TOTAL OUTLAYS FOR TRADE READJUSTMENT ALLOWANCES, NUMBER OF 
RECIPIENTS, AND AVERAGE WEEKLY PAYMENTS AND DURATION, FY 1975-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Costs of approved TAA training may be paid solely from TAA funds, 
solely from other Federal or State programs or private funds, or from 
a mix of TAA and public or private funds, unless the worker in the case 
of a nongovernmental program would be required to reimburse any portion 
of the costs from TAA funds. Duplicate payment of training costs is 
prohibited, and workers are not entitled to payment of training costs 
from TAA funds to the extent these costs are paid from or shared by 
other sources. Training still may be approved if the fiscal year TAA 
funding entitlement limit is reached, provided the training costs are 
paid from outside sources.
Supplemental assistance is available to defray reasonable 
transportation and subsistence expenses when training is not within 
the worker's commuting distance. This assistance is equal to the 
lesser of actual expenses or 50 percent of the prevailing Federal 
per diem rate for subsistence and 100 percent of the prevailing 
mileage rates under 
Federal regulations for travel expenses. Job search allowances are 
available to certified workers who cannot obtain suitable employment 
within their commuting area, who are totally laid off, and who apply 
within 1 year after certification or last total layoff, whichever is 
later, or within 6 months after concluding training. The allowance for 
reimbursement is equal to 90 percent of necessary job search expenses, 
based on the same increased supplemental assistance rates described 
above, up to a maximum amount of $800 ($1,250 under the new TAA). The
Secretary of Labor is required to reimburse workers for necessary 
expenses incurred to participate in an approved job search program.
Relocation allowances are available to certified workers totally laid 
off at time of relocation who have been able to obtain an offer of 
suitable employment only outside their commuting area, who apply 
within 14 months after certification or last total layoff, whichever 
is later, or within 6 months after concluding training, and whose 
relocation takes place within 6 months after application for the 
relocation allowance.  The allowance is equal to 90 percent of 
reasonable and necessary expenses for transporting the worker, family, 
and household effects, based on the same increased supplemental 
assistance rates described above, plus a lump sum payment of three 
times the worker's average weekly wage, up to a maximum amount of 
$800 ($1,250 under the new TAA). Table 6-4 provides a summary of 
training, job search, and relocation allowances since 1975.

HEALTH COVERAGE TAX CREDIT

The Trade Act of 2002 created a Federal tax credit which subsidizes 
private health insurance coverage for displaced workers certified to 
receive TAA benefits. The tax credit covers 65 percent of the premiums 
paid by the worker for qualified health insurance.  This credit is 
referred to as the Health Coverage Tax Credit (HCTC), and the Internal 
Revenue Service is responsible for its administration. The HCTC is 
advanceable, meaning that workers can receive the credit when 
purchasing insurance rather than receiving it after filing their tax 
returns. The HCTC is also refundable; eligible workers can receive the 
credit even if they have zero tax liability for the year.  To be 
eligible for the HCTC, a worker must be (1) a recipient of a TRA; 
(2) an individual certified for TAA benefits who is not yet eligible 
to receive a TRA because she or he has not exhausted all rights to 
UC; or (3) a participant receiving benefits under the new Alternative 
Trade Adjustment Assistance program described in the next section.

TABLE 6-4--TRAINING, JOB SEARCH, AND RELOCATION ALLOWANCES: TOTAL 
NUMBER OF WORKERS AND OUTLAYS,  FY 1975-2002

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

The HCTC can be used for limited types of health insurance. It can be 
applied towards premiums paid to continue employer-sponsored health 
insurance under the Consolidated Omnibus Budget Reconciliation Act of 
1985 (COBRA). The HCTC also can be used to purchase an individual 
health insurance policy (if the worker was covered by an individual 
policy at least 30 days before becoming unemployed) or to purchase a 
group policy offered through a spouse's employer. An eligible worker 
can use the credit to purchase various types of State-based insurance 
coverage, such as coverage through a State-sponsored high-risk pool, 
coverage through a health insurance program offered to State employees, 
and coverage through an arrangement between private entities and the 
State. State-based coverage must be guaranteed issue (i.e., a plan 
must be offered to all who apply), cannot limit coverage due to 
pre-existing conditions, cannot charge higher premiums than those 
charged to individuals who do not receive the HCTC, and must offer 
the same benefits as those provided to individuals who do not receive 
the HCTC.

ALTERNATIVE TRADE ADJUSTMENT ASSISTANCE FOR OLDER 
WORKERS

The 2002 Act also established a 5-year demonstration project for 
alternative trade adjustment assistance (ATAA) for older workers. 
This program is effective for petitions filed on or after August 6, 
2003. Petitioners who request that workers be certified for the ATAA 
program must request both certifications (TAA and ATAA) at the same 
time. ATAA is designed to allow TAA-eligible workers for whom 
retraining may not be appropriate and who find reemployment at a 
lower wage to receive a wage subsidy to help bridge the salary gap 
between their old and new employment. 
In order to establish that petitioning workers are eligible to apply 
for the ATAA program, the Secretary of Labor first must determine 
that all of the criteria listed above for a regular TAA certification 
are met. The following three additional criteria must be met for ATAA 
certification:
1. A significant number of adversely affected workers in the 
petitioning workers' firm are 50 years of age or older;
2. The adversely affected workers in the petitioning workers' firm 
possess job skills that are not easily transferable to other 
employment; and
3. The competitive conditions within the affected workers' industry 
are adverse.

Once an individual worker's company has been certified for ATAA as 
well as TAA, there is another set of eligibility requirements to be met 
before the benefits will be paid to the worker. The individual must be 
at least 50 years of age and obtain full-time employment making less 
than $50,000 a year within 26 weeks of the date of separation from the 
adversely affected employment. The worker may not return to that 
affected employment.
An eligible worker is entitled to receive half the difference between 
the wages received from reemployment and the wages received at the 
time of the qualifying separation for a period up to 2 years, but the 
payments may not exceed $10,000 over the 2-year eligibility period. The 
participant may receive the relocation allowance and the tax credit for 
health insurance premiums, but all rights to retraining, allowances, 
and TRA are forfeited with receipt of the initial ATAA payment. A 
worker who wants to receive the HCTC and intends to choose the ATAA 
must apply for a waiver from the required training in order to maintain 
eligibility for TAA and the HCTC.

NAFTA WORKER SECURITY ACT

The NAFTA Worker Security Act, passed as part of the North American 
Free Trade Agreement Implementation Act in 1993, established a NAFTA 
Transitional Adjustment Assistance program for workers adversely 
impacted by the NAFTA. Import-impacted workers also were able to 
petition for assistance under TAA but could not obtain benefits 
under both programs. The NAFTA-TAA program was repealed by the TAA 
Reform Act of 2002. Petitions for NAFTA-TAA were accepted until 
November 3, 2002. Workers certified under any petitions received before
November 4, 2002, even if the certifications were made after that 
date, are eligible for services under the NAFTA-TAA program. Funds will 
be available to cover NAFTA-TAA-certified workers until their 
eligibility period runs out.

FUNDING OF TAA AND NAFTA PROGRAMS

Federal funds, as an annual appropriated entitlement from general 
revenues under the Federal Unemployment Benefits and Allowances 
Account, cover the worker's total entitlement represented by the 
continuation of UC benefit levels in the form of TRA payments. Federal 
funds also cover payments for training, job search, and relocation 
allowances, as well as State-related administrative expenses. Funds 
made available under grants to States defray expenses of any employment 
services and other administrative expenses.
States are reimbursed from general revenues for benefit payments and 
other costs incurred under the program. A penalty first introduced by 
section 239 of the Trade Act of 1974 provided for reduction by 
15 percent of the credits for State unemployment taxes which employers 
are allowed against their liability for Federal unemployment tax if a 
State has not entered into or has not fulfilled its commitments under 
a cooperative agreement. The Tax Equity & Fiscal Responsibility Act of 
1982 reduced this penalty to 7.5 percent.

TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR FIRMS

Sections 251-64 of the Trade Act of 1974, as amended, contain the 
procedures, eligibility requirements, benefit terms and conditions, and 
administrative provisions of the TAA Program for Firms adversely 
impacted by increased import competition. The program is administered 
by the Economic Development Administration within the Department of 
Commerce. Amendments in 1986 under Public Law 99-272 eliminated 
financial assistance (direct loan or loan guarantee) benefits, 
increased government participation in technical assistance, and 
expanded the criteria for firm certification.
Program benefits consist exclusively of technical assistance for 
petitioning firms which qualify under a two-step procedure: (1)
certification by the  Secretary  of Commerce that the petitioning 
firm is eligible to apply; and (2) approval by the Secretary of 
Commerce of the application by a certified firm for benefits, including 
the firm's proposal for economic adjustment. To certify a firm as 
eligible to apply for adjustment assistance, the Secretary 
must determine that three conditions are met:
 1.  A significant number or proportion of the workers in the firm 
 have been or are threatened to be totally or partially laid off;
 2.  Sales and/or production of the firm have decreased absolutely,
 or sales and/or production that accounted for at least 25 percent of 
 total production or sales of the firm during the 12 months preceding 
 the most recent 12-month period for which data are available have 
 decreased absolutely; and
 3.  Increased imports of articles like or directly competitive with 
 articles produced by the firm have "contributed importantly" to both 
 the lay offs and the decline in sales and/or production.

The 1988 amendments expanded potential eligibility coverage of the 
program to include firms that engage in exploration or drilling for
oil or natural gas. Unlike the TAA Worker Program, this extension 
applied only prospectively after August 23, 1988.
A certified firm may file an application with the Secretary of Commerce 
for TAA benefits at any time within 2 years after the date of the 
certification of eligibility. The application must include a proposal 
by the firm for its economic adjustment. The Secretary may furnish 
technical assistance to the firm in preparing its petition for 
certification or in developing a viable economic adjustment proposal.
The Secretary approves the firm's application for assistance only if it 
is determined that the firm's adjustment proposal: (a) is reasonably 
calculated to make a material contribution to the economic adjustment 
of the firm; (b) gives adequate consideration to the interests of the 
workers in the firm; and (c) demonstrates that the firm will make all 
reasonable efforts to use its own resources for economic development.

BENEFITS

 Technical assistance may be given to implement the firm's economic 
adjustment proposal in addition to, or in lieu of, precertification 
assistance or assistance in developing the proposal. It may be 
furnished through existing government agencies or through private 
individuals, firms, and institutions (including private consulting 
services), or by grants to intermediary organizations, including 
regional TAA centers. As amended by Public Law 99-272 in 1986, the 
Federal Government may bear the full cost of technical assistance to 
a firm in preparing its petition for certification. However, the 
Federal share cannot exceed 75 percent of the cost of assistance 
furnished through private individuals, firms, or institutions for 
developing or implementing an economic adjustment proposal. Grants 
may be made to intermediate organizations to defray up to 100 percent 
of their administrative expenses in providing technical assistance. 
The Secretary of Commerce also may provide technical assistance of 
up to $10 million annually per industry to establish industry-wide 
programs for new product or process development, export development, 
or other uses consistent with adjustment assistance objectives. The 
assistance may be furnished through existing agencies, private 
individuals, firms, universities, and institutions, and by grants, 
contracts, or cooperative agreements to associations, unions,
or other nonprofit organizations of industries in which a substantial 
number of firms or workers have been certified.

FUNDING

Funds to cover all costs of the program are subject to annual 
appropriations to the Economic Development Administration of the 
Department of Commerce from general revenues. The Trade Act of 2002 
authorized $16 million per year through 2007 for this program.

TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR FARMERS

A new TAA for Farmers program was established by the Trade Act of 2002. 
Although proposed rules have been issued by the U.S. Department of 
Agriculture (USDA), they had not yet been finalized at the time of 
publication of this chapter. Under this program, a group of 
agricultural producers can petition the Secretary of Agriculture to be 
certified as eligible for TAA. The Secretary will then have 40 days 
to determine whether the national average price for the affected 
commodity or class of goods from that commodity (for the most recent 
marketing year) was less than 80 percent of the average price for the 
5 marketing years preceding the most recent year, and imports of 
''articles like or directly competitive with'' the commodity in 
question ''contributed importantly'' to the price decline. If a 
determination were so made, each member of the eligible group would 
have 90 days to apply to the Secretary for a cash payment equal to: 
one-half of the difference between the most recent year's national 
average price and 80 percent of the preceding 5 marketing years, 
times his or her production for the year. An individual commodity 
producer's benefits under the program will be limited to $10,000 in 
any 12-month period, and all claims are to be decreased 
proportionately, if necessary, to ensure that the total national 
cost of the program does not exceed the annual funding level, 
which the legislation sets at $90 million (for each fiscal year, 
2003 through 2007).
An applicant's net farm income (as determined by the USDA) for the most 
recent year must be less than his or her net farm income for the latest 
year in which no adjustment assistance was received. Those with average 
adjusted gross income above $2.5 million per year are ineligible if less 
than 75 percent of that income is from farming, ranching, or forestry. 
The applicant also must certify that he or she has met with an 
Extension Service agent to obtain information and technical 
assistance on how to adjust to import competition, including improving 
competitiveness in producing and marketing the import-affected 
commodity, and possibly shifting to an alternative commodity. Payment 
recipients cannot receive cash benefits under any other TAA program. 
However, they are permitted (but not required, as are other workers) 
to use other job training and related employment services offered 
through the TAA programs. 

LEGISLATIVE HISTORY

The TAA Programs were first established under the Trade Expansion Act 
of 1962 for the purpose of assisting in the special adjustment problems 
of workers and firms dislocated as a result of a Federal policy of 
reducing barriers to foreign trade. As a result of limited eligibility 
and usage of the programs, criteria and benefits were liberalized under 
title II of the Trade Act of 1974, Public Law 93-618. The Omnibus 
Budget Reconciliation Act (OBRA) of 1981, Public Law 97-35, reformed 
the program for workers. The amendments, particularly in program 
eligibility and benefits, were intended to reduce program cost 
significantly and to shift its focus from income compensation for 
temporary layoffs to return to work through training and other 
adjustment measures for the long-term or permanently unemployed. The 
OBRA also made relatively minor modifications in the Firm Program. 
Most amendments became effective on October 1, 1981. Both programs were 
extended at that time for 1 year, to terminate on September 30, 1983.
Public Law 98-120, approved on October 12, 1983, extended the Worker 
and Firm TAA Programs for 2 years, until September 30, 1985. Sections 
2671-2673 of the Deficit Reduction Act of 1984, Public Law 98-369, 
included three provisions which amended the Program for Workers to 
increase the availability of worker training allowances and the level 
of job search and relocation benefits, and amended the Program for 
Firms to increase the availability of industrywide technical 
assistance. The termination date of the Worker and Firm TAA Programs 
was further extended under temporary legislation in the first session 
of the 99th Congress (Public Laws 99-107, 99-155, 99-181, and 99-189) 
until December 19, 1985. The Consolidated Omnibus Budget 
Reconciliation Act of 1985, Public Law 99-272, approved April 7, 1986, 
reauthorized the TAA Programs for Workers and Firms for 6 years 
retroactively from December 19, 1985, until September 30, 1991, 
with amendments. Sections 1421-1430 of Public Law 100-418, the Omnibus 
Trade and Competitiveness Act (OTCA) of 1988, enacted on August 23, 
1988, made significant amendments in the Worker TAA Program, 
particularly concerning the eligibility criteria for cash benefits, 
funding, and administration. A training requirement as a condition 
for income support to encourage and enable workers to obtain early 
reemployment became effective as of November 21, 1988. This replaced 
a 1986 amendment that instituted a job search requirement as a 
condition for receiving cash benefits. The amendments also expanded 
TAA eligibility coverage of workers and firms, contingent upon the 
imposition of an import fee to fund program costs. (Statutory 
preconditions for imposition of an import fee were never met.) 
Public Law 100-418 extended TAA Program authorization for an 
additional 2 years until September 30, 1993. Section 136 of the 
Customs and Trade Act of 1990, Public Law 101-382, approved on 
August 20, 1990, extended the completion and reporting period for 
the supplemental wage allowance demonstration projects for 
workers required by the 1988 amendments. Section 106 of Public Law
102-318, to extend the Emergency Unemployment Compensation Program, 
provided for weeks of active military duty in a reserve status 
(including service during Operation Desert Storm) to qualify 
toward the minimum number of weeks of prior employment required 
for TAA eligibility.
Section 13803 of OBRA 1993, Public Law 103-66, approved August 10, 
1993, reauthorized the TAA Programs for Workers and Firms for an 
additional 5 years through fiscal year 1998, with assistance to 
terminate on September 30, 1998. Section 13803 of OBRA 1993 also 
reduced the level of the "cap" on training entitlement funding from 
$80 million to $70 million for fiscal year 1997 only. Sections 501-6 
of the North American Free Trade Agreement (NAFTA) Implementation Act,
Public Law 103-182, approved December 8, 1993, set forth the "NAFTA 
Worker Security Act," establishing the NAFTA Transitional Adjustment 
Assistance Program for Workers as a new subchapter D (section 250) 
under chapter 2 of title II of the Trade Act of 1974. That special 
program went into effect on January 1, 1994, with a termination date 
of the earlier of September 30, 1998, or the date that a comparable 
comprehensive dislocated worker program became effective.
Following the expiration of the TAA Programs' authorizations on 
September 30, 1998, they were extended through June 30, 1999, by 
section 1012 of the Omnibus Consolidated and Emergency Supplemental 
Appropriations Act for fiscal year 1999 (Public Law 105-277), enacted 
October 21, 1998. After this 9-month extension expired, the programs 
were continued through September 30, 2001, by section 702 of the 
Consolidated Appropriations Act for fiscal year 2000  (Public Law 
106-113), enacted November 29, 1999. At the beginning of fiscal year 
2002, eight continuing resolutions kept the programs authorized through  
January 10, 2002. Debate on TAA reform continued after this expiration 
until the passage of the Trade Act of 2002 (Public Law 107-210), which 
became law on  August 6, 2002, and authorizes the TAA programs through 
fiscal year 2007.

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