[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]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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