[Federal Register Volume 59, Number 18 (Thursday, January 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1599]
[[Page Unknown]]
[Federal Register: January 27, 1994]
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DEPARTMENT OF LABOR
Employment and Training Administration
Operating Instructions for Implementing the Amendments to the
Trade Adjustment Assistance for Workers Program in Title V of the North
American Free Trade Agreement (NAFTA) Implementation Act
AGENCY: Employment and Training Administration, Labor.
ACTION: Notice of General Administration Letter No. 7-94.
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SUMMARY: This notice and publication of General Administration Letter
(GAL) No. 7-94 inform the States and cooperating State agencies of the
amendments to the Trade Act of 1974 in Title V of the North American
Free Trade Agreement (NAFTA) Implementation Act (Pub. L. 103-182).
These amendments affect the program of trade adjustment assistance for
workers and the administration of the program by the States pursuant to
State agreements with the Secretary of Labor. The amendments must be
implemented as of the respective dates set out in Title V and contained
in the GAL published with this notice
The Title V amendments supersede the statute in effect prior to
these amendments and affect the regulations at 20 CFR part 617 and 29
CFR part 90 currently in effect, to the extent that such prior law and
regulations are inconsistent with the amendments. Pending the issuance
of final regulations implementing the provisions of the Title V
amendments, the GAL published with this notice expresses the Department
of Labor's position on procedures for implementation of the amendments
and their respective meanings, and constitutes operating instructions
to the States.
The Title V amendments also require States to make available
certain assistance and services authorized under Title III of the Job
Training Partnership Act to workers whom the Governor preliminarily
finds to be adversely affected by NAFTA. The GAL informs the States of
this requirement, and of the potential for secondary workers in firms
supplying component parts to primary producers affected by NAFTA to
receive assistance under the Title III program. Additional information
concerning the use of Title III funds to assist these workers and other
individuals adversely affected by NAFTA will be forthcoming.
FOR FURTHER INFORMATION CONTACT:
For TAA Program information, contact: Marvin M. Fooks, Director, Office
of Trade Adjustment Assistance; Telephone: (202) 219-5555. For JTPA
Title III information, contact: Doug Holl, Office of Worker Retraining
and Adjustment Programs; Telephone (202) 219-5306. These are not toll
free numbers.
SUPPLEMENTARY INFORMATION: On December 8, 1993, the President signed
the North American Free Trade Agreement Implementation Act. The GAL
relates primarily to those provisions of Title V of the Act affecting
the TAA Program. Most of the provisions of Title V are in the form of
amendments to Chapter 2 of Title II of the Trade Act of 1974. Some of
the provisions of Title V are not in the form of amendments to the
Trade Act, however, they nonetheless must be given effect in
implementing the NAFTA-TAA program.
While the NAFTA-TAA program is generally similar to the existing
TAA program, it does differ in several ways:
--Governors have a specific role in the new adjustment assistance
program targeted to workers who may be displaced because of trade with
Canada or Mexico. State agencies also have new program
responsibilities.
--Group eligibility requirements have been changed to address imports
of articles from Mexico and Canada only and to authorize the
certification for NAFTA-TAA of worker groups when the workers' firm
shifts production to Mexico or Canada.
--Workers are required to be enrolled in training to qualify for trade
readjustment allowance (TRA) payments. Also, individual workers must be
enrolled in training within specified time periods to qualify for TRA
after a worker group is certified for NAFTA-TAA.
--Adjustment assistance to workers adversely affected by NAFTA is
also available under Title III of the JTPA. States are responsible for
assuring that certain assistance and services are made available to
workers whom the Governor preliminarily finds to be adversely affected
by NAFTA.
--Dislocated workers who are indirectly affected by NAFTA, e.g.,
workers in firms which supply components to a firm whose final product
is adversely affected by imports from Mexico or Canada, may seek under
Title III assistance similar to that available through the NAFTA-TAA
program.
It is the Department's intention to publish for comment proposed
regulations regarding implementation of the provisions of Title V
relating to transitional adjustment assistance.
Because the provisions were effective on January 1, 1994, it is
essential to inform the States and the cooperating State agencies of
the terms of the provisions and of the Department's instructions
concerning the proper implementation of these provisions.
For the reasons set out above, GAL No. 7-94 is published below.
Signed at Washington, DC, on January 19, 1994.
Doug Ross,
Assistant Secretary of Labor for Employment and Training.
Directive: General Administration Letter No. 7-94
To: All State Employment Security Agencies
From: Barbara Ann Farmer, Administrator, for Regional Management;
Wilbert F. Solomon, Deputy Administrator for Regional Management
Subject: Operating Instructions for Implementing the Amendments to
the Trade Adjustment Assistance for Workers Program in Title V of
the North American Free Trade Agreement (NAFTA) Implementation Act
Rescissions: None
Expiration Date: January 31, 1995
1. Purpose. To assist the States with implementing the Transitional
Adjustment Assistance Program in Title V of the NAFTA Implementation
Act. These operating instructions shall remain in effect until
superseded or supplemented by further operating instructions or until
amended regulations are published.
To alert the States to the opportunity for the provision of
adjustment assistance under Title III of the Job Training Partnership
Act (JTPA) to workers in secondary firms who are adversely affected by
NAFTA.
2. References. The NAFTA Implementation Act (Pub. L. 103-182) is
referred to as ``the Act.'' The program of trade adjustment assistance
for workers established by Chapter 2 of Title II of the Trade Act of
1974 is referred to as the ``TAA Program''. The Trade Act of 1974 may
be referred to as simply the ``Trade Act.'' The NAFTA Implementation
Act Title V--NAFTA Transitional Adjustment Assistance and Other
Provisions, affecting the TAA program is referred to as Title V or
NAFTA-TAA.
3. Background. The Trade Act of 1974 made major changes to the
trade adjustment assistance program for workers displaced because of
increased imports of articles like or directly competitive with
articles produced by the workers' firm. On receiving a petition for
trade adjustment assistance from a group of workers or its authorized
representative, the Department of Labor conducts a fact-finding
investigation in response to the petition. If the findings substantiate
that the workers of a firm or subdivision of have been adversely
affected by import competition, a certification is issued by the
Secretary of Labor to the worker group stating that the workers are
eligible to apply at a local office of the State employment security
agency for TAA benefits. Benefits include up to 104 weeks of training
in new occupational skills, and job search assistance and relocation
allowances when jobs are not available within the commuting area from
the worker's residence. Workers participating in training (unless the
training requirement is waived) may also receive up to 52 weeks of
trade readjustment allowance (TRA) payments which are generally
equivalent to the worker's unemployment insurance payment.
Regulations implementing the adjustment assistance program for
workers in chapter 2, title II, of the Trade Act are published at 20
CFR part 617.
On December 8, 1993, the President signed into law the ``North
American Free Trade Agreement Implementation Act.'' These implementing
instructions relate only to those provisions of Title V affecting the
TAA Program. Most of the provisions of Title V are in the form of
amendments to Chapter 2 of Title II of the Trade Act of 1974, and while
some of the provisions of Title V are not in the form of amendments to
the Trade Act, they nonetheless must be given effect in implementing
the NAFTA-TAA program.
While the NAFTA-TAA is generally similar to the existing TAA
Program, it does differ in several ways. Governors have a specific role
in the new adjustment assistance program targeted to workers who may be
displaced because of trade with Canada or Mexico. State agencies also
have new program responsibilities. The NAFTA-TAA program requires
workers to be enrolled in training to qualify for trade readjustment
allowance (TRA) payments and does not allow the waiver of the training
requirement when training is not ``feasible or appropriate'', which is
now available to eligible workers in the regular TAA program. To
provide for these differences, Section 502 of the Act adds a new
Subchapter D--NAFTA Transitional Adjustment Assistance Program, to
Chapter 2 of Title II of the Trade Act. Subchapter D adds one section--
Section 250, Establishment of a Transitional Program--to Chapter 2,
Title II of the Trade Act, creating the new NAFTA-TAA program.
Adjustment assistance to workers adversely affected by NAFTA is
also available under Title III of the JTPA. States are responsible for
providing assistance and services to workers whom the Governor
preliminarily finds to be adversely affected by NAFTA. In addition,
dislocated workers who are indirectly affected by NAFTA, e.g., workers
in firms which supply components to a firm whose final product is
adversely affected, may seek assistance similar to that available
through the NAFTA-TAA program. Effective delivery of these Title III
funded services will require governors to ensure close planning and
coordination between the TAA and Title III program operators.
4. Operating Instructions. The operating instructions in this
document are issued to the States and the cooperating State agencies as
guidance provided by the Department of Labor in its role as the
principal in the TAA Program. As agents of the United States, the
States and cooperating State agencies may not vary from the operating
instructions in this document without prior approval from the
Department of Labor (DOL).
Pending the issuance of regulations implementing the provisions of
Title V, the operating instructions in this document shall constitute
the controlling guidance for the States and the cooperating State
agencies in implementing and administering the new NAFTA-TAA program,
pursuant to the agreements between the States and the Secretary of
Labor under Section 239 of the Trade Act.
Instructions for implementing the JTPA Title III component,
including procedures for accessing the national reserve funds to
provide assistance to workers of secondary firms who are adversely
affected by NAFTA, will be issued shortly.
NAFTA-TAA amendments are set out in this document according to the
section number of the Trade Act affected by each of the amendments. An
explanation of each amendment is furnished with an explanation of the
regulations principally affected, and with additional instructions on
the administration of each amendment.
A. Establishment of Transitional Program
Section 502 of the Act establishes a new Subchapter D in Chapter 2
of Title II of the Trade Act as follows:
A.1. Group Eligibility Requirements.
AMENDED LAW. Subsection (a) of section 250 is titled Group
Eligibility Requirements. Paragraph (1) of subsection (a) sets out the
criteria for certifying a worker group for NAFTA-TAA as follows:
A group of workers (including workers in any agricultural firm or
subdivision of an agricultural firm) shall be certified as eligible to
apply for adjustment assistance under subsection (b) if the Secretary
determines that a significant number or proportion of the workers in
such workers' firm or an appropriate subdivision of the firm have
become totally or partially separated, or are threatened to become
totally or partially separated, and either--
(A) that--
(i) the sales or production, or both, of such firm or subdivision
have decreased absolutely,
(ii) imports from Mexico or Canada of articles like or directly
competitive with articles produced by such firm or subdivision have
increased, and
(iii) the increase in imports under clause (ii) contributed
importantly to such workers' separation or threat of separation and to
the decline in sales or production of such firm or subdivision; or
(B) that there has been a shift in production by such workers' firm
or subdivision to Mexico or Canada of articles like or directly
competitive with articles which are produced by the firm or
subdivision.
ADMINISTRATION. As mentioned above, paragraph (a)(1) sets out the
group eligibility criteria for certifying worker groups for
transitional adjustment assistance. Two sets of criteria are included
in subparagraphs (A) and (B). The criteria in subparagraph (A) are
similar to the eligibility criteria in the regular TAA program (section
222 of the Trade Act), except that the criteria for NAFTA-TAA petitions
provide that increased imports must come from Mexico or Canada.
Alternatively, and without reference to whether there have been
increased imports from Mexico or Canada under subparagraph (A), the
criterion under subparagraph (B) confers eligibility if the firm or
subdivision of the firm has shifted production to Mexico or Canada of
articles like or directly competitive with those produced by the firm
or subdivision.
Application of Criteria:
For purposes of section 250, the following terms are applied:
Appropriate subdivision means an establishment in a multi-
establishment firm which produces the domestic articles in question or
a distinct part or section of an establishment (whether or not the firm
has more than one establishment) where the articles are produced. The
term ``appropriate subdivision'' includes auxiliary facilities operated
in conjunction with (whether or not physically separate from)
production facilities. (OTAA has interpreted the term ``establishment''
to include a place of business together with its employees,
merchandise, equipment, etc.)
Firm means an individual proprietorship, partnership, joint
venture, association, corporation (including a development
corporation), business trust, cooperative, trustee in bankruptcy, and
receiver under decree of any court. A firm, together with any
predecessor or successor-in-interest, or together with any affiliated
firm controlled or substantially beneficially owned by substantially
the same persons, may be considered a single firm.
Significant number or proportion of workers means that:
a. In most cases the total or partial separations, or both, in a
firm or appropriate subdivision thereof, are the equivalent to a total
unemployment of five (5) percent of the workers or 50 workers,
whichever is less; or
b. At least three workers in a firm (or appropriate subdivision
thereof) with a work force of fewer than 50 workers would ordinarily
have to be affected.
Total or partial separation. All analyses of separations must treat
total and partial separations equally.
a. Partial separation means, with respect to an individual who has
not been totally separated, that the worker's:
(1) Hours of work have been reduced to 80 percent or less of the
worker's average weekly hours at the firm or appropriate subdivision
thereof, and
(2) Wages have been reduced to 80 percent or less of the worker's
average weekly wage at the firm or appropriate subdivision thereof.
b. Total separation means the layoff or severance of an individual
from a firm or an appropriate subdivision thereof.
Criteria in Subparagraph (A): The following guidance and
definitions shall apply:
a. Sales and production data must be obtained from the subject firm
for the current 12-month period and the previous 12-month period in
order to determine whether an absolute decrease in sales or production
has occurred.
b. Increased imports. The Department's Office of Trade Adjustment
Assistance (OTAA) will provide information based on available data
regarding imports from Mexico or Canada of articles like or directly
competitive with those produced by the firm or subdivision of the firm.
c. Like or directly competitive means that ``like'' articles are
those which are substantially identical in inherent or intrinsic
characteristics (i.e., materials from which the articles are made,
appearance, quality, texture, etc.); and ``directly competitive''
articles are those which, although not substantially identical in their
inherent or intrinsic characteristics, are substantially equivalent for
commercial purposes (i.e., adapted to the same uses and essentially
interchangeable therefor).
An imported article is ``directly competitive'' with a domestic
article at an earlier or later stage of processing, and a domestic
article is ``directly competitive with'' an imported article at an
earlier or later stage of processing, if the importation of the article
has an economic effect on producers of the domestic article comparable
to the effect of importation of articles in the same stage of
processing as the domestic article.
Criterion in Subparagraph (B): The criterion under subparagraph (B)
breaks down into the following elements:
a. Determination of article. The article must be like or directly
competitive with the article that has been produced in the U.S. by the
subject firm or subdivision of the firm.
Workers of firms that provide a service rather than produce an
article are excluded from coverage.
Workers of firms that are suppliers of ``components'' related to
the defined ``like or competitive article'' may be covered only if
those articles produced by such firms independently meet the
eligibility criteria for certification or the shift in production
criterion.
b. Action. The article must have been formerly produced by a U.S.
located firm or subdivision of the firm and is now produced in Mexico
or Canada. Since the law does not address ownership of the producing
firm, the shift in production can be either by the firm or subdivision
moving the plant to Mexico or Canada, or the U.S. firm contracting with
a different firm located in Mexico or Canada.
c. Definition. A ``shift of production'' is defined to mean a
tangible action or commitment to contract or license production of an
article within a definite period of time by the workers' firm with a
firm in Mexico or Canada, including the actual production of an article
that was formerly produced by a U.S. located firm or subdivision, by a
producing plant located in Mexico or Canada.
A.2. Definition of Contributed Importantly.
AMENDED LAW. Subparagraph (a)(2) of section 250 states that the
term ``contributed importantly'' means a cause which is important but
not necessarily more important than any other cause.
ADMINISTRATION. The term ``contributed importantly'' is the same as
used in section 222(b) of the Trade Act for administering the regular
TAA program. The ``contributed importantly'' provision is used by the
Department of Labor in its review of petitions for eligibility for the
regular TAA Program and will also be used for the NAFTA-TAA program.
Pursuant to section 250(b)(2)(B)(i), Governors, when making a
preliminary finding as to whether a petition meets the eligibility
requirements for NAFTA-TAA, discussed above, will not apply the
``contributed importantly'' test when reviewing NAFTA-TAA petitions.
When the Governor or the designated State official substantiates
that the criteria in clauses (i) and (ii) of sections 250(a)(1)(A) have
been met, the petition package including a statement of affirmative
preliminary finding is forwarded to the OTAA for review. To confirm the
State's affirmative preliminary finding, the OTAA will apply the
criteria in section 250(a)(1)(A), including the ``contributed
importantly'' test in clause (iii).
A.3. Regulations.
AMENDED LAW. Paragraph (a)(3) of section 250 provides that the
Secretary shall issue regulations relating to the application of the
criteria described above in making the preliminary finding and
determinations.
ADMINISTRATION. Because of the time constraints for implementing
the NAFTA-TAA program on January 1, 1994, regulations will not be in
place until after this date. Accordingly, to begin operation of the
program, operating instructions will be issued and published in the
Federal Register. States should proceed to implement the NAFTA-TAA
program based on these operating instructions.
A.4. Filing of petitions.
AMENDED LAW. Paragraph (b)(1) of section 250 provides that a
petition for certification of eligibility to apply for NAFTA-TAA may be
filed by a group of workers (including workers in any agricultural firm
or subdivision of an agricultural firm) or by their certified or
recognized union or other duly authorized representative with the
Governor of the State in which such workers' firm or subdivision
thereof is located.
ADMINISTRATION. This section provides that a petition for
certification of eligibility may be filed by a group of workers
(including workers in any agricultural firm or subdivision of an
agricultural firm) or by their certified or recognized union or other
duly authorized representative. It should be noted that a community-
based organization may serve as a duly authorized representative of the
workers.
Group means three or more workers in a firm or an appropriate
subdivision thereof.
A new petition form has been designed for use by worker groups to
file petitions for NAFTA-TAA. The NAFTA-TAA petition form will include
a space in the filing instructions on the reverse side to permit the
State to add the address of where the petitions are to be filed. A
supply of the NAFTA-TAA petition forms will be furnished to each State.
States should reproduce the NAFTA-TAA petition form to meet its needs.
Copies of the NAFTA-TAA petition form with the address for filing
the petition are to be made available by the States, at a minimum, in
every local employment service and unemployment insurance office. Staff
in local offices must be familiar with the NAFTA-TAA program, as well
as the regular TAA program, and the procedures being put in place to
assure that workers applying for employment services and unemployment
insurance benefits are advised properly regarding both TAA programs and
on filing the proper petition form to the correct location.
NAFTA-TAA petition forms will be submitted to the State official or
organization designated by the Governor to review such petitions.
Worker petitions for the regular TAA program will continue to be
submitted directly to the Department of Labor's Office of Trade
Adjustment Assistance, at the address on the reverse side of the form.
A.5. Findings and Assistance.
AMENDED LAW. Paragraph (b)(2) of section 250 specifies that upon
the receipt of a NAFTA-TAA petition, the Governor will take the
following actions:
A. Notify the Secretary of Labor that the Governor has received the
petition.
B. Within 10 days after receiving the petition--
(i) make a preliminary finding as to whether the petition meets the
criteria described in subsection (a)(1) (and for purposes of this
clause the criteria described in subparagraph (A)(iii) shall be
disregarded), and
(ii) transmit the petition, together with a statement of finding
under clause (i) and the reasons therefor, to the Secretary for action
under subsection (c); and
C. If the preliminary finding under subparagraph (B)(i) is
affirmative, ensure that rapid response and basic readjustment services
authorized under other Federal law are made available to the workers.
ADMINISTRATION. This section establishes a role, as well as precise
time frames, for Governors in processing NAFTA-TAA petitions. Because
of these time frames, rigid processing procedures have been designed
for coordinating the Governors' activities with the OTAA.
Time Frames.
Day 1:
a. The Governor receives a petition for NAFTA-TAA.
The State records the receipt date on the face of the petition,
reviews the petition for completeness and clarity, and telephones the
company official listed as the contact person on the petition.
b. Telephone contact with the company official is to cover the
following:
(1) Determine if the official listed on the petition is the
appropriate contact. If not, show the name, telephone number and FAX
number (if available) of the appropriate contact person on the face of
the petition.
(2) Confirm the product description reported on the petition.
Accuracy is critical to DOL in determining whether imports of like or
directly competitive products have increased.
(3) Ask the company official about total and partial worker
separations at the firm during the past 12 months. If there were
separations, ascertain if it was because of increased company imports
from Mexico or Canada, an actual or threatened shift of production to
either country, or lost sales to customers to purchase from firms
importing from Mexico or Canada.
(4) Alert company official that data request forms will be sent by
FAX (if available) or by mail, and obtain the official's cooperation to
supply the requested information within 5 days of petition receipt. If
the company official fails to cooperate, inform the company of subpoena
authority to obtain the requested data.
If the company continues to refuse to supply the data, the State
must notify the company in writing of its subpoena authority and
determine if the data is to be furnished. Subpoena procedures should be
instituted when there is non-compliance with the request. TAA program
regulations at 20 CFR 617.53 provide that States may issue subpoenas
for attendance of witnesses and production of records on the same terms
and conditions as under State law. If a State court declines to enforce
a subpoena, the State agency may petition for an order requiring
compliance with such subpoena to the United States District Court
within the jurisdiction of which the relevant proceeding under 20 CFR
part 617 is conducted.
Obviously, encouraging company cooperation is the best solution to
obtaining requested information. Use of subpoena procedures often
result in lengthy legal negotiations and even court proceedings. Notify
OTAA when subpoena procedures are being considered.
(5) Use the dedicated line (telephone number 202-501-6489) to FAX
to OTAA the face page of the petition form as well as any corrections
or additions obtained during telephone contacts with the company
official. This action will serve as notification to the Secretary that
the Governor has received a petition and that the investigation has
been initiated.
(6) FAX (if available) or mail the data request forms, which
include a request for a listing of company customers, to the company
official, specifying a due date for the information to be returned via
FAX or mail. If appropriate, inform the State employment security
agency that an investigation is underway.
(7) OTAA will check its records for duplicate petitions and assign
a NAFTA-TAA number to the case. OTAA will enter the case number in the
OTAA Management Information System and institute the investigation of
the petition. A notice of the investigation will be forwarded for
publication in the Federal Register and the regional offices and State
agencies notified according to established procedures in the regular
TAA Program.
(8) OTAA will begin the analysis of aggregate U.S. imports for the
article(s) listed in the petition that are like or directly competitive
with the article(s) produced at the subject firm.
Day 3
OTAA will complete the aggregate import analysis and FAX a
determination to the State as to whether relevant imports from Mexico
or Canada have increased. This determination will be made part of the
case file as it will be used by the State in making its preliminary
finding.
Day 5
If the data package has not been received from the company
official, the State will contact the company official to urge
completion and transmittal by mail or FAX (if available) of the data.
Day 10
a. State will make a preliminary finding regarding whether the
petition meets the criteria in section 250(a)(1), except clause
(A)(iii), and will prepare a brief statement on the basis for the
finding.
b. State will FAX the petition face sheet, the data packet
(including the customer list), and the preliminary finding and reasons
for the finding, to OTAA.
c. State will notify the petitioners of the Governor's preliminary
finding on the NAFTA-TAA petition and that the petition package is
being submitted to the Secretary of Labor for review and final
determination.
d. When an affirmative determination is made, the State will take
the necessary action to ensure that the JTPA Title III (Economic
Dislocated Worker Adjustment Assistance) rapid response and basic
readjustment services are made available to the impacted workers.
A.6. Review of Petition by Secretary: Certifications.
AMENDED LAW. Subparagraph (c)(1) of section 250 provides that the
Secretary of Labor, within 30 days after receiving from the Governor a
petition for NAFTA-TAA, shall determine whether the petition meets the
group eligibility requirement for certification. Upon a determination
that the petition meets such criteria, the Secretary shall issue to
workers covered by the petition a certification of eligibility to apply
for assistance under NAFTA-TAA.
ADMINISTRATION. The OTAA will review the State's preliminary
finding on all NAFTA-TAA petitions. If an affirmative preliminary
finding from the State, based on a shift in production to, or imports
from, Mexico or Canada, is confirmed through an independent review by
the OTAA, the Secretary will issue a certification of eligibility to
apply for assistance. This determination will be published in the
Federal Register.
If the affirmative preliminary finding from the State is not based
on a shift in production to Mexico or Canada by the subject firm or on
company imports from Mexico or Canada, OTAA will initiate a customer
survey to determine whether the increase in aggregate imports
contributed importantly to the workers' separations and to the decline
in sales or production at the subject firm.
The OTAA will complete the customer survey, and the Secretary will
issue a final determination within 30 days of the receipt of the
State's preliminary finding.
The Secretary's determination to grant or deny certification will
be sent by FAX to the State and appropriate regional office. This
determination will also be published in the Federal Register.
A.7. Denial of Certification.
AMENDED LAW. Paragraph (c)(2) of section 250 provides that upon
denial of certification with respect to a petition under paragraph (1),
the Secretary shall review the petition in accordance with the
requirements of the regular TAA program under subchapter A of chapter 2
of title II the Trade Act to determine if the workers may be certified
under such subchapter.
ADMINISTRATION. When a determination is made by the Secretary of
Labor that the petition does not meet the eligibility requirements for
NAFTA-TAA, the petition will immediately be reviewed by the OTAA under
subchapter A of the Trade Act.
The 60-day time period under section 223 of Chapter 2 of Title II
of the Trade Act for completing the review of a petition under
subchapter A will begin on the date the denial of the NAFTA-TAA
petition is issued.
A.8. Comprehensive Assistance.
AMENDED LAW. Subsection (d) of section 250 provides that workers
covered by a certification for NAFTA-TAA shall be provided, in the same
manner and to the same extent as workers covered under a certification
for regular TAA, the following:
1. Employment services described in section 235 of the Trade Act.
2. Training described in section 236 of the Trade Act, except that
notwithstanding the provisions of section 236(a)(2)(A), the total
amount of payments for any fiscal year shall not exceed $30 million.
3. Trade readjustment allowances (TRA) described in sections 211
through 234 of the Trade Act, except that--
A. The provisions of sections 231(a)(5)(C) and 231(c) of the Trade
Act, authorizing the payment of TRA upon a finding that it is not
feasible or appropriate to approve a training program for a worker,
shall not be applicable to payment of such allowance under subchapter
D; and
B. Notwithstanding the provision of section 233(b) of the Trade
Act, in order for a worker to qualify for TRA under the NAFTA-TAA
program, the worker shall be enrolled in a training program approved by
the Secretary under section 236(a) by the later of--
(i) the last day of the 16th week of such worker's initial
unemployment compensation period, or
(ii) the last day of the 6th week after the week in which the
Secretary of Labor issues a certification covering such worker.
In cases of extenuating circumstances related to enrollment in a
training program, the Secretary may extend the time for enrollment for
a period not to exceed 30 days.
4. Job search allowances described in section 237.
5. Relocation allowances described in section 238.
ADMINISTRATION. The administration of the benefit provisions of the
NAFTA-TAA program is similar to the regular TAA program except that the
NAFTA-TAA program requires workers to be enrolled in training to
qualify for TRA payments. The NAFTA-TAA program prohibits the waiver of
the training requirement when training is not ``feasible or
appropriate,'' which is available to eligible workers in the regular
TAA program. Also, the NAFTA-TAA program requires workers to be
enrolled in training by prescribed time periods to qualify for TRA.
a. Employment Services. Employment services described in section
235 of the Trade Act are to be provided to NAFTA-TAA certified workers
as provided to workers certified for regular TAA. Employment services
are to be provided to NAFTA-TAA certified workers to the same extent
that such services are provided to any workers seeking employment
services under other Federal laws; i.e., Wagner-Peyser Act and Title
III of JTPA. (See 20 CFR 617.20 and 617.21)
b. Training. Training is to be provided to NAFTA-TAA certified
workers according to section 236 of the Trade Act.
Workers certified under NAFTA-TAA will have to satisfy the same
criteria in 20 CFR 617.22(a) as apply to workers certified under the
regular TAA program.
The Act provides that payments for NAFTA-TAA training for any
fiscal year shall not exceed $30 million. With regard to this funding
limitation, the Department will track nationally the amount of program
funds allocated to the States and the amount of funds committed by the
States in order to satisfy this statutory provision. States will be
informed when the amount approaches $30 million nationally. Should the
demand for funds exceed the limitation, instructions will be furnished
on how to handle demands for training that exceed the statutory
limitation.
c. Trade Readjustment Allowances. To qualify for TRA payments, an
eligible worker must be enrolled in a training program approved by the
later of--
(i) the last day of the 16th week of such worker's initial
unemployment compensation period, or
(ii) the last day of the 6th week after the week in which the
Secretary of Labor issues a certification covering such worker.
Application of time periods. The 16-week time requirement for
enrolling in training in order to qualify for TRA will be applied
literally. In order to be eligible to receive TRA under a NAFTA-TAA
certification, the worker must be enrolled in an approved training
program by the end of the 16th week of that worker's initial
unemployment compensation benefit period.
This fixed 16-week period begins with the effective date of the
claim and ends with the last day of the 16th week thereafter. Included
in this 16-week fixed period are weeks of waiting period credit, weeks
of disqualification, weeks of employment, and weeks of unemployment.
Initial unemployment compensation benefit period means the same as
the term ``first benefit period'' defined at 20 CFR 617.3(r). ``First
benefit period'' means the benefit period established after the
individual's first qualifying separation or in which such separation
occurs.
Enrolled in Training. For purposes of this provision, a worker
shall be considered to be enrolled in training when the worker's
application for training is approved by the State agency and the
training institution has furnished written notice to the State agency
that the worker has been accepted in the approved training program
beginning within 30 calendar days.
Extenuating Circumstances. The Act provides that the Secretary, for
justifiable cause, may extend the time for enrollment for a period not
to exceed 30 days. It is anticipated that there will be situations
beyond the worker's control where the worker is unable to enroll in
training by the later of the last day of the 16th week of the worker's
initial benefit period or the 6th week after the week that a
certification was issued. Such situations could involve training
programs that are abruptly canceled or circumstances where the first
available enrollment date is past the deadline, as well as injury or
illness which may adversely affect the ability of workers to enroll in
training. The authority to grant 30-day extensions to workers is
delegated to States or State agencies as one of their responsibilities
under section 239 of the Trade Act.
The application of this 30-day grace period will be used only in
rare circumstances. Workers who fail to enroll in training by the end
of this 30-day period are still eligible to participate in approved
training and have the training costs paid with NAFTA-TAA program funds
but will not qualify for TRA. This provision places added
responsibilities on both the worker and the State agency to satisfy the
time limits for enrolling in training in order to qualify for TRA.
Workers certified for NAFTA-TAA must be informed promptly of the time
provisions by the State agency when a NAFTA-TAA certification is
issued.
In order to satisfy these provisions, information bulletins or
brochures furnished to claimants by the State unemployment insurance
agency and to applicants for employment services should include
information on the time provisions for NAFTA-TAA certified workers to
qualify for TRA. Other means of informing workers of the time limits
are through newspaper notices and letters sent to individual workers
when a certification is issued, as required in section 225 of the Trade
Act and regulations at 20 CFR 617.4.
Although the use of brochures, newspaper notices and individual
letters are important resources for informing workers of the time
provision for enrolling in training, they do not relieve States of
their responsibility for helping workers enroll in a training program
in a timely manner.
State agencies shall follow existing funding a precertification
procedures for NAFTA-TAA program petitions now used for regular TAA
Program petitions. Initiation of fact-finding investigations in
response to NAFTA-TAA petitions will be announced through publication
of the information in the Federal Register, in the same manner as
regular TAA petitions.
Under precertification responsibilities, State agencies must obtain
information from the subject firm about layoffs beginning on and after
December 8, 1993, including the names and social security numbers of
the affected workers. The State agency staff shall also follow the
procedures used for the regular TAA Program to check UI files, flag
appropriate claims, and maintain coordination between the UI and ES
offices to ensure that workers are enrolled in approved training within
the statutory time frames so they are not denied TRA eligibility.
d. Prohibition of Training Waivers. Provisions of sections
231(a)(5)(C) and 231(c) of the Trade Act, authorizing the payment of
TRA upon a finding that it is ``not feasible or appropriate'' to
approve a training program for a worker, are not applicable to payment
of TRA under the NAFTA-TAA program.
Thus, in order for a worker to qualify for TRA under the NAFTA-TAA
program, the worker must be enrolled in training approved under section
236(a) of the Trade Act.
e. Job search allowances. Workers certified for NAFTA-TAA are
eligible for job search allowances to the same extent and under the
same conditions as workers certified for the regular TAA program under
section 237 of the Trade Act.
f. Relocation allowances. Workers certified for NAFTA-TAA are
eligible for relocation allowances to the same extent and under the
same conditions as workers certified for the regular TAA program under
section 238 of the Trade Act.
A.9. Administration of NAFTA-TAA.
AMENDED LAW. Subsection (e) of section 250 states that the
provisions of subchapter C of Chapter 2, Title II, of the Trade Act
shall apply to the administration of the NAFTA-TAA program in the same
manner and to the same extent as such provisions apply to the
administration of the regular TAA program under subchapters A and B of
the Trade Act, except that the agreement between the Secretary and the
States described in section 239 of the Trade Act shall specify the
procedures that will be used to carry out the certification process
under subsection (c) of section 250 and the procedures for providing
relevant data by the Secretary to assist the States in making
preliminary findings under subsection (b) of section 250.
ADMINISTRATION. The procedures for NAFTA-TAA certification process
under subchapter D of Chapter 2, Title II, of the Trade Act are:
a. The certification procedures set forth in Sections A.5 and A.6
of this document provide operating instructions on the methods for
making preliminary determinations under section 250(b) of the Trade Act
and the Secretary's review of petitions under subsection (c).
b. Upon request from the Governor, the Secretary will make a
determination of what relevant import data is needed to satisfy the
criteria for making a preliminary finding under subsection (b) and
provide such data to the State.
c. Pursuant to section 250(c), the Secretary will conduct a full
investigation to determine if the petition for NAFTA-TAA certification
meets the criteria specified in subsection (a).
B. CONFORMING AMENDMENTS
Section 503 of the new law provides conforming amendments to the
Trade Act as follows:
B.1. References.
AMENDED LAW. Subsection (a) of section 503 of the new law amends
sections 221(a), 222(a), and 223(a) by striking out ``assistance under
this chapter'' and inserting ``assistance under this subchapter''.
ADMINISTRATION. These are technical changes which do not have a
material effect on the administration and operation of the TAA and
NAFTA-TAA programs.
B.2. Benefit Information.
AMENDED LAW. Subsection (b) of section 225 is amended by inserting
``or subchapter D'' after ``subchapter A'' each place it appears.
Administration. This change is needed because of the addition of
subchapter D in Chapter 2, Title II, of the Trade Act. The impact of
this amendment is to require that the same types of benefit information
be furnished by State agencies to workers applying for unemployment
insurance and to workers certified for NAFTA-TAA as are required by the
regular TAA program.
B.3. Nonduplication of Assistance.
AMENDED LAW. Subsection (c) of section 503 amends subchapter C of
Chapter 2, Title II, of the Trade Act by adding a new section 249A at
the end on nonduplication of assistance. This new section provides that
no worker may receive assistance relating to a separation pursuant to
certifications under both subchapters A and D.
ADMINISTRATION. This new section is intended to eliminate
duplication of assistance and benefits to a worker in situations where
a worker group is certified concurrently for both regular TAA and
NAFTA-TAA. These situations should be uncommon. However, should this
occur, the worker will be provided benefits under one or the other
certification. The worker is to make the decision regarding which
certification will apply. Once a decision is made by the worker, it
cannot be changed. Also, State agency staff must explain the
differences between programs so workers can make an informed choice.
B.4. Judicial Review.
AMENDED LAW. Subsection (d) of section 503 amends section 284 of
the Trade Act by inserting ``or section 250(c) after ``section 223.''
ADMINISTRATION. Section 284 (19 U.S.C. 2395(a)) of the Trade Act
addresses judicial review.
Subsection (d) has the effect of providing workers aggrieved by a
decision of the Secretary of Labor on a petition, the same rights for
judicial review as provided to workers pursuant to section 284 of the
Trade Act. Regulations addressing judicial review are also set out at
29 CFR 90.19.
C. TERMINATION OF TRANSITION PROGRAM
C.1. Termination of Transition Program.
AMENDED LAW. Section 505 of the Act amends subsection (c) of
section 285 of the Trade Act by--
(1) striking ``No'' and inserting ``(1) except as provided in
paragraph (2), no''; and
(2) adding at the end the following new paragraph:
(2)(A) Except as provided in subparagraph (B), no assistance,
voucher, allowance, or other payments may be provided under subchapter
D of chapter 2 after the day that is the earlier of--
(i) September 30, 1998, or
(ii) the date on which legislation, establishing a program
providing dislocated workers with comprehensive assistance
substantially similar to the assistance provided by such subchapter D,
becomes effective.
(B) Notwithstanding subparagraph (A), if, on or before the day
described in subparagraph (A), a worker--
(i) is certified as eligible to apply for assistance, under
subchapter D of chapter 2; and
(ii) is otherwise eligible to receive assistance in accordance with
section 250.
such worker shall continue to be eligible to receive such assistance
for any week for which the worker meets the eligibility requirements of
such section.
ADMINISTRATION. Although the amended section is not part of Chapter
2 of Title II of the Trade Act, it does have a significant impact on
the payment of benefits to NAFTA-TAA certified workers after the
September 30, 1998 expiration date of the TAA program or an earlier
expiration date prescribed in any new law. While it is important to be
aware of this provision, the Department of Labor will provide precise
closeout information to States in advance of the statutory expiration
date, or if the expiration date is impacted by a law change.
D. EFFECTIVE DATES
D.1. General.
AMENDED LAW. Subsection (a) of section 506 of the Act provides that
sections 501, 502, 503, 504, and 505 shall take effect on the date the
Agreement enters into force with respect to the United States.
ADMINISTRATION. It is expected that NAFTA will enter into force on
January 1, 1994.
D.2. Covered Workers; In General.
AMENDED LAW. Subsection (b)(1), of section 506 of the Act states
that, except as provided in paragraph (2) of section 506, no worker
shall be certified as eligible to receive assistance under subchapter D
of chapter 2 of title II of the Trade Act (as added by this subtitle)
whose last total or partial separation from a firm (or appropriate
subdivision of a firm) occurred before such date of entry into force.
ADMINISTRATION. With the exception of the reachback provision,
which is discussed in the next section, no worker is to be certified as
eligible to receive assistance under NAFTA-TAA whose last separation
under a certification occurred before the NAFTA date of entry into
force.
D.3. Covered Workers; Reachback.
AMENDED LAW. Subsection (b)(2), of section 506 of the new law
provides that notwithstanding paragraph (1), any worker--
(A) whose last total or partial separation from a firm (or
appropriate subdivision of a firm) occurs--
(i) after the date of the enactment of this Act, and
(ii) before such date of entry into force, and
(B) who would otherwise be eligible to receive assistance under
subchapter D of chapter 2 of title II of the Trade Act of 1974, shall
be eligible to receive such assistance in the same manner as if such
separation occurred on or after such date of entry into force.
ADMINISTRATION. In determining the eligibility of workers for
benefits under NAFTA-TAA, consideration must be given to the date a
worker is separated from employment. A worker whose last total or
partial separation from a firm occurred after the enactment of Pub. L.
103-182 on December 8, 1993, but before the date of entry into force of
NAFTA (which is anticipated to be on January 1, 1994), may be eligible
for certification under the ``reachback'' provision in section
506(b)(2) of the Act.
Workers whose total or partial separation occurred at an earlier
time must petition under the regular TAA program to be eligible for TAA
services and benefits. The regular TAA program allows workers laid off
up to one year prior to the date of the petition on which a
certification of eligibility is issued to qualify for services and
benefits.
It is important for State agency staff members to be familiar with
the reachback provisions of both the NAFTA-TAA and regular TAA programs
so that they can properly advise workers regarding which program may be
applicable to their situation.
5. Action Required. States are required to implement the provisions
of the NAFTA Amendments as set forth in this document as of the date of
NAFTA entry into force which is expected to be on January 1, 1994.
States are advised to inform all appropriate staff of the contents of
this document.
6. Inquiries. States are to direct all inquiries to the appropriate
ETA Regional Office.
7. Attachment. Title V--NAFTA Transitional Adjustment Assistance
and Other Provisions.
[FR Doc. 94-1599 Filed 1-26-94; 8:45 am]
BILLING CODE 4510-30-M