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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

NAFTA Worker Security Act

Funding of TAA and NAFTA Programs

Trade Adjustment Assistance Program for Firms

Benefits

Funding

Legislative History

OVERVIEW

Federal assistance is offered to both workers and firms that are

affected adversely by foreign trade. This assistance is provided

through three 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. More recently, the North American Free

Trade Agreement (NAFTA) Implementation Act in 1993 authorized

a somewhat different version of this program to aid workers who

lose their jobs because of trade with Canada or Mexico or plant relocation to either of those countries. 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 PROGRAM FOR

WORKERS

Trade Adjustment Assistance for Workers under sections 221–50

of the Trade Act of 1974, as amended, consists of trade readjustment allowances (TRA), employment services, training and additional TRA allowances while in training, and job search and relocation allowances for certified and otherwise qualified workers. 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

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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 files a petition with the ETA

for certification of group eligibility. To certify a petitioning group

of workers 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

or subdivision of the firm have been or are 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 Omnibus Trade and Competitiveness Act (OTCA) of 1988

amendments expanded the potential eligibility coverage to include

workers in any firm or subdivision of a firm that engages in exploration or drilling for oil or natural gas.

The Secretary is required to make the eligibility determination

within 60 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.

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 must also advise each adversely affected worker, at the time that the worker applies for unemployment insurance (UI), 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.

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TABLE 6–1.—NUMBER OF PETITIONS INSTITUTED AND CERTIFIED AND ESTIMATED

NUMBER OF WORKERS PETITIONING AND CERTIFIED FOR TAA, 1975–99

Calendar year

Cases instituted Cases certified

Petitions Estimated

workers Petitions Percent 1 Estimatedworkers

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 ............................... 1,728 181,306 1,000 58 108,981

1999 (through October) .. 1,999 158,270 1,378 69 129,054

1 Percent of petitions certified.

Source: Department of Labor, Employment and Training Administration.

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.

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TABLE 6–2.—ESTIMATED NUMBER OF WORKERS CERTIFIED BY MAJOR INDUSTRIES,

FISCAL YEARS 1975–99

Industry

Workers

(in thousands)

Total estimated number of workers certified ................................................. 2,795

Certifications by major industries:

Motor vehicles ........................................................................................ 815

Apparel ................................................................................................... 513

Steel ........................................................................................................ 193

Footwear ................................................................................................. 137

Electronics (including computers) ......................................................... 255

Oil and gas ............................................................................................ 186

Fabricated metal products ..................................................................... 75

Textiles .................................................................................................... 77

Other ....................................................................................................... 544

Source: Department of Labor.

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 may also count toward the 26-week minimum.

3. The worker was entitled to UI, has exhausted all rights to any

UI entitlement, including any extended benefits or Federal

supplemental compensation (if in existence), and does not have

an unexpected waiting period for any UI.

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 UI 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 trainVerDate 20-JUL-2000 13:14 Sep 29, 2000 Jkt 061710 PO 00000 Frm 00340 Fmt 6601 Sfmt 6601 J:\SKAYNE\GB96\61710.006 WAYS3 PsN: WAYS3
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ing is not ‘‘feasible or appropriate’’ (e.g., training is not available that meets the criteria for approval, funding is not available to pay the full training costs, or there is a reasonable

prospect that the worker will be reemployed by the firm from

which he was separated). 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 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.

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 (i.e., weeks following

the statutory deadline for certification), or (b) the first week after

the worker’s first total qualifying separation.

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 UI payable to that worker preceding

that worker’s first exhaustion of UI following the worker’s first

total qualifying separation under the certification, reduced by any

Federal training allowance and disqualifying income deductible

under UI 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

UI 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 UI regular and extended benefits

could receive a maximum 13 weeks of basic TRA benefits. UI 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. To receive the

additional benefits, the worker must apply for the training program

within 210 days after certification or first qualifying separation,

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whichever date is later. Additional benefits may be paid only during the 26-week 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 either: the break does not exceed 14 days; or 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.

TABLE 6–3.—TOTAL OUTLAYS FOR TRADE READJUSTMENT ALLOWANCES, NUMBER OF

RECIPIENTS, AND AVERAGE WEEKLY PAYMENTS AND DURATION, FISCAL YEARS 1975–99

Fiscal year Total outlays

(millions)

Total number

of recipients

(thousands)

Average weekly

payment per

recipient

1975 (4th quarter) ..................................... $71 47 $58

1976 1 ......................................................... 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

1992 2 ......................................................... 43 9 163

1993 ........................................................... 51 10 157

1994 ........................................................... 120 31 181

1995 ........................................................... 145 28 193

1996 ........................................................... 160 31 200

1997 ........................................................... 188 32 193

1998 ........................................................... 180 24 230

1999 (preliminary) ..................................... 226 37 269

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.

Note.—The above figures relate only to trade readjustment allowances; administrative expenses and

outlays for employment services, training, and job search and relocation allowances are not included.

Source: Department of Labor.

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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 UI 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 1988

amendments added remedial education as a separate and distinct

approvable training program.

The OTCA amendments converted training from an entitlement

to the extent appropriated funds were available to an entitlement

without regard to the availability of funds to pay the training costs.

As of the 1988 amendments, approved training is an entitlement

in any case where 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. Up to this limit, workers

are entitled to have the costs of approved training paid on their behalf. If the Secretary foresees that the $80 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.

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 may

still be approved if the fiscal year TAA funding entitlement limit

is reached, provided the training costs are paid from outside

sources.

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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 per diem expenses or 50 percent of the prevailing Federal

per diem rate for subsistence and 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. 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

of completion of training. 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. Table 6–4 provides a summary of training, job

search, and relocation allowances since 1975.

NAFTA WORKER SECURITY ACT

Subchapter D of chapter 2 (section 250) of title II of the Trade

Act of 1974 establishes a North American Free Trade Agreement

(NAFTA) Transitional Adjustment Assistance Program for Workers

who may be adversely impacted by the NAFTA. Import-impacted

workers may also petition for assistance under TAA but cannot obtain benefits under both programs. Assistance under subchapter D

was to terminate after the earlier of September 30, 1998, or the

date on which legislation establishing a program providing all dislocated workers with comprehensive assistance substantially similar to the assistance provided under subchapter D became effective.

However, the program has been extended through September 30,

2001.

A group of workers (including workers in any agricultural firm)

shall be certified as eligible to apply for adjustment assistance

under subchapter D if the Secretary determines that a significant

number or proportion of the workers in the firm or subdivision of

the firm have become or are threatened to become totally or partially separated, and either:

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TABLE 6–4.—TRAINING, JOB SEARCH, AND RELOCATION ALLOWANCES: TOTAL NUMBER

OF WORKERS AND OUTLAYS, FISCAL YEARS 1975–99

Fiscal year

Total number Total outlays

including administration

(millions)

Entered

training Job search Relocation

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 .................................. 1 9,475 931 629 6.0

1981 .................................. 1 20,366 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 .................................. 21,267 226 315 96.7

1999 (preliminary) ............ 23,553 207 429 94.3

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.

1. Sales and/or production of the firm or subdivision have decreased absolutely, imports from Mexico or Canada of articles

like or directly competitive with articles produced by such firm

or subdivision have increased, and the increase in imports contributed importantly to the workers’ separation or threat of

separation and to the decline in the sales or production of the

firm or subdivision; or

2. There has been a shift in production by the workers’ firm or

subdivision to Mexico or Canada of articles like or directly

competitive with articles produced by the firm or subdivision.

A group of workers or their union or other duly authorized representative may file a petition for certification of eligibility to apply

for adjustment assistance under subchapter D with the Governor

of the State in which the worker’s firm or subdivision is located.

Upon receipt of the petition, the Governor must notify the Secretary of Labor. Within 10 days, the Governor must make a preliminary finding as to whether the petition meets the certification

criteria and transmit the petition, together with a statement of the

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finding and reasons therefore, to the Secretary for action. If the

preliminary finding is affirmative, the Governor will ensure that

rapid response and basic readjustment services authorized under

other Federal law are made available to the workers.

Within 30 days after receiving the petition, the Secretary must

determine whether the petition meets the certification criteria.

Upon an affirmative determination, the Secretary will issue to

workers covered by the petition a certification of eligibility to apply

for comprehensive assistance. Upon denial of certification, the Secretary will review the petition to determine if the workers meet the

requirements of the Trade Adjustment Assistance (TAA) Program

for certification.

Certified workers under the NAFTA Program receive employment services, training, trade readjustment allowances (TRAs), and

job search and relocation allowances in the same manner and to

the same extent as workers covered under a TAA certification, with

the following exceptions: (1) the total amount of payments for

training costs for any fiscal year do not exceed $30 million; (2) with

respect to TRA benefits, the authority of the Secretary of Labor to

waive the training requirement does not apply with respect to payments under subchapter D; and (3) to receive TRA benefits, the

worker must be enrolled in a training program approved by the

Secretary by the later of the last day of the 16th week following

the worker’s most recent qualifying separation or the last day of

the 6th week after the week in which the Secretary issues a certification covering the worker. In extenuating circumstances, the Secretary may extend the time for enrollment by not more than 30

days.

For fiscal year 2000, $66 million has been appropriated for

NAFTA TAA, compared to $349 million for TAA.

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 UI 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

under section 239 of the Trade Act of 1974 provides 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.

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 condiVerDate 20-JUL-2000 13:14 Sep 29, 2000 Jkt 061710 PO 00000 Frm 00346 Fmt 6601 Sfmt 6601 J:\SKAYNE\GB96\61710.006 WAYS3 PsN: WAYS3
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tions, 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 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

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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 industrywide 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. For fiscal year

1999, a total of $11 million was appropriated for the program.

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

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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.