6-1 

 

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 
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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. 
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TABLE 6-1--NUMBER OF PETITIONS INSTITUTED AND CERTIFIED 

AND ESTIMATED NUMBER OF WORKERS PETITIONING 

AND CERTIFIED FOR TAA, 1975-2002 

Cases Instituted Cases Certified 

Calendar Year Petitions Estimated Workers Petitions Percent1

 Estimated Workers 

1975 559 216,173 141 25 59,330 

1976 1,053 226,523 454 43 147,943 

1977 1,317 229,842 437 33 145,285 

1978 1,876 177,072 933 50 168,226 

1979 2,307 346,714 1,006 44 238,220 

1980 5,570 1,051,350 1,060 19 598,970 

1981 1,159 133,924 377 33 35,545 

1982 1,064 176,320 280 26 22,988 

1983 976 166,604 517 53 60,986 

1984 511 44,247 356 70 17,011 

1985 1,439 131,102 510 35 34,538 

1986 1,887 168,625 920 49 80,610 

1987 1,650 194,654 824 50 93,572 

1988 2,761 230,541 1,195 43 106,363 

1989 1,856 151,744 1,430 77 85,500 

1990 1,621 160,793 706 44 75,638 

1991 1,784 152,942 793 44 64,040 

1992 2,002 128,867 1,321 66 60,190 

1993 1,375 168,442 740 54 78,496 

1994 1,629 137,242 1,047 64 81,974 

1995 1,506 136,029 1,122 75 89,398 

1996 1,658 175,965 1,116 67 111,836 

1997 1,335 151,000 842 63 109,904 

1998 1,730 181,310 1,000 58 108,981 

1999 2,321 220,483 1,587 69 156,998 

2000 1,440 151,693 821 57 97,939 

2001 2,406 304,596 1,164 48 144,293 

2002 2,565 265,416 1,674 65 245,003 

1

 Cases certified as a percent of petitions instituted. 

Note - The number of estimated workers certified in 2002 looks very high. This occurred 

because seven Boeing petitions, covering about 30,000 workers, were instituted in 2001 and 

certified in 2002. This illustrates the problem with computing a percentage of petitions certified. 

 The petitions instituted are not the same set of petitions as those certified. 

Source: Department of Labor, Employment and Training Administration. 

 

 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 
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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 

Industry Workers 

 (In Thousands) 

Total for all industries 3,316 

 Motor Vehicles (SIC 37xx) 938 

 Apparel (SIC 23xx) 617 

 Steel (SIC 331x) 221 

 Footwear (SICs 302x, 313x, 314x) 146 

 Electrical and Electronic Equip. (Incl. computers) (SICs 357x, 345 

 Oil and Gas (SIC 13xx) 189 

 Fabricated metal products (SIC 34xx) 94 

 Textiles (SIC 22xx) 118 

All others 648 

Source: Department of Labor. 

 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: 
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 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 
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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 
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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 
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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 

Fiscal Year Total Outlays 

(Millions) 

Total Recipients 

(Thousands) 

Average Weekly Payment 

Per Recipient 

1975 (4th Quarter) $71 47 $58 

19761 79 62 47 

1977 148 111 57 

1978 257 155 68 

1979 256 132 70 

1980 1,622 532 126 

1981 1,440 281 140 

1982 103 30 119 

1983 37 30 120 

1984 35 16 139 

1985 40 20 133 

1986 118 40 144 

1987 208 55 155 

1988 186 47 165 

1989 125 24 175 

1990 93 19 164 

1991 116 25 169 

19922

 43 9 163 

1993 51 10 157 

1994 120 31 181 

1995 145 28 193 

1996 160 31 200 

1997 188 32 193 

1998 151 24 191 

1999 199 36 202 

2000 239 33 218 

2001 226 33 222 

20023

 199 37 234 1

 Fiscal year 1976 is the first full year of experience under the program as amended by the Trade 

Act of 1974. 

2

 The 1992 figures for TRA recipients and outlays are abnormally low because of emergency 

unemployment compensation (EUC) payments that were made to eligible workers in lieu of TRA 

payments. 

3 Preliminary. 

Note: Center column is number of NEW recipients, not total number of recipients. There is no single 

number for total number of recipients, since that changes from week to week. 

Source: Department of Labor. 

 

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 
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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 
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(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 

Total Number 

Fiscal Year 

Entered Training Job Search Relocation 

Total Outlays Including 

Administration (Millions) 

1975 (4th Quarter) 463 158 44 ----- 

1976 823 23 26 $2.7 

1977 4,213 277 191 4.0 

1978 8,337 1,072 631 12.8 

1979 4,456 1,181 855 13.5 

1980 9,4751

 931 629 6.0 

1981 20,3661

 1,491 2,011 2.4 

1982 5,844 697 662 19.4 

1983 11,299 696 3,269 36.0 

1984 6,821 799 2,220 17.0 

1985 7,424 916 1,692 30.2 

1986 12,229 1,276 2,292 28.6 

1987 22,888 1,709 1,537 49.9 

1988 9,538 1,156 1,347 54.4 

1989 17,042 863 989 62.6 

1990 18,057 565 1,245 57.6 

1991 20,093 525 759 64.9 

1992 18,582 594 751 70.2 

1993 19,467 802 2,063 80.0 

1994 26,484 671 2,306 98.9 

1995 26,514 869 1,572 97.8 

1996 30,280 737 858 96.6 

1997 22,840 481 706 85.1 

1998 21,333 243 330 96.7 

1999 28,113 255 398 94.3 

2000 22,657 351 641 92.7 

2001 24,106 242 369 94.3 

2002 37,163 271 388 94.5 

1

 Of total workers entering training, 5,640 (59 percent) in 1980 and 18,940 (94 percent) in 1981 selffinanced their training costs. 

Source: Department of Labor. 

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 
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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. 
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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 
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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 layoffs 

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 
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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 Aarticles like or directly competitive with@ the 

commodity in question Acontributed 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 
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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,