[Federal Register Volume 67, Number 220 (Thursday, November 14, 2002)]
[Notices]
[Pages 69029-69041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-28932]


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DEPARTMENT OF LABOR

Employment and Training Administration


Trade Adjustment Assistance Program: Training and Employment 
Guidance Letter Interpreting Federal Law

    The Employment and Training Administration interprets federal law 
requirements pertaining to Trade Adjustment Assistance (TAA). These 
interpretations are issued in Training and Employment Guidance Letters 
(TEGLs) to the State Workforce Agencies. The TEGL described below is 
published in the Federal Register in order to inform the public.

TEGL 11-02

    TEGL 11-02 advises states of the federal law requirements 
applicable to implementing reforms of the Trade Adjustment Assistance 
(TAA) program enacted by the TAA-Reform Act of 2002.
    The operating instructions in TEGL 11-02 are issued to the States 
and the cooperating state workforce agencies (SWAs) as guidance 
provided by the Department of Labor (DOL) in its role as the principal 
in the TAA program. As agents of the Secretary of Labor, the

[[Page 69030]]

States and cooperating SWAs may not vary from the operating 
instructions in TEGL 11-02 without prior approval from DOL.
    Pending the issuance of regulations implementing the provisions of 
the TAA Reform Act of 2002, the operating instructions in TEGL 11-02 
constitute the controlling guidance for the States and the cooperating 
SWAs implementing and administering the Trade Act of 1974, as amended, 
pursuant to the agreements between the States and the Secretary of 
Labor under section 239 of the Trade Act of 1974, as amended.
    Changes to the TAA program are set out in TEGL 11-02 according to 
the principal parts of the TAA program and generally in the order in 
which they appear in the TAA Reform Act of 2002. The changes to each 
part, and those aspects of each part that remain unchanged, are 
explained in turn, along with the regulations principally affected and 
the changes in program administration that may be required. Sections of 
the Trade Act of 1974 that are entirely unchanged by the TAA Reform Act 
of 2002 are discussed after the sections that are changed.

    Dated: November 7, 2002.
Emily Stover DeRocco,
Assistant Secretary of Labor.

Training and Employment Guidance Letter No. 11-02

To: All State workforce liaisons, All State workforce agencies, All 
one-stop center system leads.
From: Emily Stover DeRocco, assistant Secretary.
Subject: Operating Instructions for Implementing the Amendments to the 
Trade Act of 1974 Enacted by the Trade Act of 2002.
    1. Purpose. To assist the State Workforce Agencies (SWA) in 
implementing the provisions of the Trade Act of 2002 that amend the 
current Trade Adjustment Assistance program and repeal the North 
American Free Trade-Transitional Adjustment Assistance program.
    2. References. The Trade Act of 1974, as amended (Pub. L. 93-618, 
as amended); the Trade Act of 2002 (Pub. L. 107-210); 20 CFR part 617; 
29 CFR part 90; General Administration Letter 7-94 with changes 1, 2, 
and 3. The amendments to the TAA program may also be referred to as the 
Trade Adjustment Assistance Reform Act of 2002. Forthcoming directives: 
Unemployment Insurance Program Letter (UIPL) No. 02-03; ETA guidance--
Use of National Emergency Grant Funds Under the Workforce Investment 
Act, as Amended, to Support Healthcare Assistance for Trade Impacted 
Workers; Department of the Treasury instructions and guidance on 
implementing the Health Insurance Tax Credit provisions of the Trade 
Act of 2002.
    To provide guidance on the implementation of various aspects of the 
Trade Act of 2002, ETA plans to issue the following additional 
instructions:

----------------------------------------------------------------------------------------------------------------
                                                                                                      Effective
               Provision                         Instructions               Expected issue date        date of
                                                                                                      provision
----------------------------------------------------------------------------------------------------------------
Health Insurance Assistance NEGs for    TEGL: Use of NEGs to Develop    10/10/02...................       8/6/02
 System-Building.                        Systems for Health Insurance
                                         Coverage Assistance for Trade-
                                         Impacted Workers.
End-of-Year Tax Credit................  UIPL No. 02-03: Health          10/10/02...................      12/1/02
                                         Insurance Tax Credit for
                                         Eligible Trade Adjustment
                                         Assistance/Trade Readjustment
                                         Allowances (TAA/TRA)
                                         Recipients.
New Petition Procedures...............  TEGL..........................  Spring 2003................  ...........
Advance Tax Credit....................  Companion Advisory to IRS       Late Spring 2003...........       8/1/03
                                         Instructions.
Alternative TAA for Older Workers       TEGL..........................  Spring 2003................       8/6/03
 Program.
----------------------------------------------------------------------------------------------------------------

    3. Guiding Principle for TAA Implementation. The reauthorization 
and reform of the TAA program and repeal of the NAFTA-TAA program 
provide an opportunity to ensure that effective strategies are employed 
to assist affected workers in obtaining reemployment. It is essential 
that DOL and the states work together to move trade-affected workers 
into new jobs as quickly and effectively as possible so that they 
continue to be productive members of our workforce and so that our 
businesses remain competitive. To this end, the intervention strategies 
used for program benefits and services will be aimed toward rapid, 
suitable and long-term employment for adversely affected workers. 
States must:
    A. Increase the focus on early intervention, upfront assessment, 
and reemployment services for adversely affected workers. It should not 
be assumed that the best reemployment strategy for all workers is the 
long-term training and extended income support that has traditionally 
been the focus of the program. The new requirements in the 2002 
Amendments requiring the provision of rapid response and core and 
intensive services available under WIA and other Federal programs to 
workers filing a TAA petition afford an important opportunity to stress 
early intervention and more rapid reemployment. providing an early 
assessment and identification of the worker's marketable skills, and 
the provision of job search assistance and other reemployment services 
will assist many workers in obtaining suitable reemployment quickly.
    B. Use One-Stop Career Centers as the main point of participant 
intake and delivery of benefits and services. This will encourage 
coordination among programs in order to better serve workers and 
promote efficiencies in the workforce system.
    C. Maintain fiscal integrity and promote performance 
accountability. ETA will ensure that money allocated for TAA is sued 
for the purposes Congress intended--to improve the economy, and assist 
workers and businesses--and that it is spent with the interests of 
taxpayers in mind. This will occur, in part, through strengthened 
participant outcome measures for the program.
    4. Background. the Trade Adjustment Assistance (TAA) program for 
workers was first established at the U.S. Department of Labor (DOL) by 
the Trade Act of 1974 (1974 Act). Currently, when DOL receives a 
petition for TAA from a group of workers or its authorized 
representative, DOL conducts a fact-finding investigation to determine 
whether increased imports have contributed importantly to the workers' 
dispacement. IF the findings of the investigation show that the workers 
have been adversely affected by import competition, the Secretary of 
Labor issues a certification of eligibility to apply for adjustment 
assistance. Once a certification is issued, it is transmitted

[[Page 69031]]

to the State. The SWAs act as agents of the Secretary to notify 
certified workers of potential Trade Act benefits and services, make 
eligibility determinations for individuals, and deliver benefits and 
services. Individual workers who are members of the certified worker 
group apply for benefits and services at a One-Stop Career Center or 
other local office of the SWA. Individual workers who meet the 
qualifying criteria may receive up to 104 weeks of job retraining, up 
to 52 weeks (generally) of income support in the form of Trade 
Readjustment Allowances (TRA), job search allowances, and relocation 
allowances. In addition, all workers covered by a certification are 
eligible for basic reemployment services such as job referrals, job 
clubs, resume-writing assistance, and so forth. Most of the steps in 
this current process have been affected by the provisions of the Trade 
Act of 2002 (2002 Act).
    The 1974 Act has been amended several times since its initial 
passage. In December 1993, the North American Free Trade Implementation 
Act created the North American Free Trade Agreement--Transitional 
Adjustment Assistance (NAFTA-TAA) program by adding subchapter D to 
chapter 2 of title II of the 1974 Act. Subchapter D contains one 
section, section 250, which established the NAFTA-TAA program and 
specified some differences between it and the regular TAA program. 
Certifications of worker groups under NAFTA-TAA were made only if 
imports from Canada and/or Mexico caused the import impact, or if the 
workers' firm shifted production to either Canada or Mexico. Workers 
filed their petitions with the Governor of the State in which they were 
employed, not directly with DOL, and the State performed a preliminary 
investigation. If the workers appeared to be impacted by imports from 
Canada or Mexico or a shift of production to Canada or Mexico, the 
state provided rapid response assistance under the Workforce Investment 
Act of 1998 (WIA). The State then transmitted all information gathered 
in the preliminary investigation to DOL, which issued the final 
determination on eligibility to apply. In order to qualify for TRA, 
workers had to be enrolled in training within specific time limits. 
Workers certified under NAFTA-TAA had to be enrolled in approved 
training in order to qualify for TRA; no waivers from this requirement 
were allowed. Regular TAA allowed waivers if training was ``not 
feasible or appropriate'' for the worker.
    Along with the creation of the NAFTA-TAA program, the Clinton 
Administration issued a Statement of Administrative Action (SAA) that 
committed to providing assistance to workers who were not directly 
impacted by trade with Canada or Mexico, but were indirectly impacted 
because their firm supplied components to, or performed finishing 
operations for, a firm which was directly impacted. These secondarily-
impacted workers petitioned for certification in the same way as for 
the NAFTA-TAA program, or DOL initiated a secondary investigation if 
the result of a primary NAFTA-TAA investigation was a denial of 
eligibility to apply. In either case, if the worker group was found to 
be secondarily impacted by imports from Canada and/or Mexico or a shift 
of production to Canada or Mexico, the members of the group qualified 
for benefits and services delivered through the dislocated worker 
program under WIA.
    On August 6, 2002, President George W. Bush signed into law H.R. 
3009, the Trade Act of 2002 (2002 Act), Pub. L. 107-210. The 2002 Act 
makes several amendments to the 1974 Act. The amendments that are 
covered in these operating instructions apply to petitions for 
adjustment assistance that are filed on or after November 4, 2002. 
Petitions filed on or before November 3, 2002, are covered by the 
provisions of the 1974 Act that were in effect on September 30, 2001.
    The 2002 Act repeals subchapter D of chapter 2 of title II of the 
1974 Act (the NAFTA-TAA program). However, workers covered under 
certifications issued pursuant to NAFTA-TAA petitions filed on or 
before November 3, 2002, will continue to be covered under the 
provisions of the NAFTA-TAA program that were in effect on September 
30, 2001. The 2002 Act generally did not amend the job retraining 
provisions of the 1974 Act, except that customized training may now be 
approved for import-impacted workers. The statutory cap on funds that 
may be allocated to the States for training is raised from $110 million 
to $220 million per year. The maximum amount of TRA is increased by 26 
weeks of additional TRA for all workers in training. Up to 26 more 
weeks of additional TRA may be approved if the worker must undergo 
remedial training as part of his/her retraining program. In order to 
qualify for TRA, a worker must be enrolled in training within 16 weeks 
of his/her most recent total qualifying separation, or within 8 weeks 
of the issuance of the certification, whichever is later. However, 
States may grant an extension of these requirements for up to 45 days 
if there are extenuating circumstances. Waivers from the training 
requirement are available under six specific conditions. A worker may 
continue to receive TRA during a break in training that lasts up to 30 
days (raised from 14 days).
    To petition for eligibility to apply for TAA, workers or their 
authorized representatives must now file the petition simultaneously 
with the Secretary of Labor and the Governor of the State where the 
workers were employed. The Governor no longer has responsibility for 
conducting a preliminary investigation. However, the Governor must 
provide rapid response services and appropriate core and intensive to 
all petitioning workers. DOL has 40 days to conduct an eligibility 
investigation and issue a determination. The 2002 Act also makes the 
secondary-worker coverage, as provided under the Statement of 
Administrative Action, statutory. Workers who are found to be 
secondarily-impacted, as defined in the Act, are eligible to apply for 
the same benefits and services as workers certified as primarily 
impacted; the benefits and services for both primarily and secondarily-
affected workers are paid from TAA funds.
    The 2002 Act creates a program of health insurance tax credits 
(HITC) for certain trade-impacted workers and others. Covered 
individuals include workers who are eligible for TRA (including those 
workers who would be eligible except that they have not exhausted all 
entitlement to unemployment insurance), workers participating in the 
alternative TAA program (next paragraph), and individuals over 55 years 
old who are receiving monthly benefits paid by the Pension Benefit 
Guaranty Corporation (PBGC). Covered individuals may be eligible to 
receive a tax credit equal to 65% of the amount they paid for 
qualifying coverage under qualified health insurance. The tax credit 
may be claimed at the end of the year, or, beginning in August 2003, a 
qualified individual may receive the credit in the form of monthly 
advance payments to the health insurance provider.
    The 2002 Act creates the Alternative TAA (ATAA) for Older Workers 
program. Under the ATAA, workers at least 50 years who obtain 
different, full-time employment within 26 weeks of separation from 
adversely-affected employment at wages less than the wages earned in 
the adversely-affected employment may receive 50 percent of the wage 
differential, up to a maximum of $10,000, during their two-year 
eligibility period. To be eligible for the ATAA program, workers may 
not earn more than $50,000 per year in the new employment. Also, the 
firm where the

[[Page 69032]]

workers worked must meet certain eligibility criteria. Workers who take 
advantage of the ATAA cannot receive three of the regular TAA benefits 
and services (training, TRA, and job search allowances); they are, 
however, eligible to apply for relocation allowances and the health 
insurance tax credit.
    The 2002 Act also creates a separate TAA program for farmers. 
Eligibility determinations for that program are the responsibility of 
the Secretary of Agriculture. Farmers certified under that program are 
entitled to the same DOL-funded basic reemployment services, training, 
job search, and relocation services as regular TAA workers, but they 
may not receive TRA. The Secretary of Agriculture is authorized to make 
cash assistance payments (up to $10,000 per year) to eligible farmers.
    5. Operating Instructions. The operating instructions in this 
document are issued to the States and the cooperating SWAs as guidance 
provided by the Department of Labor (DOL) in its role as the principal 
in the TAA program. As agents of the Secretary of Labor, the States and 
cooperating State agencies may not vary from the operating instructions 
in this document without prior approval from DOL.
    Pending the issuance of regulations implementing the provisions of 
the 2002 Act, the operating instructions in this document constitute 
the controlling guidance for the States and the cooperating State 
agencies in implementing and administering the 1974 Act, as amended, 
pursuant to the agreements between the States and the Secretary of 
Labor under section 239 of the 1974 Act, as amended.
    Changes to the TAA program are set out in this document according 
to the principal parts of the TAA program and generally in the order in 
which they appear in the 2002 Act. The changes to each part, and those 
aspects of each part that remain unchanged, are explained in turn, 
along with the regulations principally affected and the changes in 
program administration that may be required. Sections of the 1974 Act 
which are entirely unchanged by the 2002 Act are discussed after the 
sections that are changed.
    In general, the amendments to the 1974 Act made by the 2002 Act 
take effect on November 4, 2002, 90 days after the President signed the 
2002 Act into law.
    All of the changes to the petitioning process apply to petitions 
filed on or after November 4, 2002. Changes to the eligibility 
requirements and levels of Trade Act benefits and services apply to 
workers covered by certifications issued pursuant to petitions filed on 
or after November 4, 2002. For convenience and emphasis, the effective 
date is repeated in several sections of these instructions. Exceptions 
to this effective date apply to certain aspects of the health insurance 
tax credit and to the ATAA program. Instructions for those are not 
included in this document, but will be issued in separate directives in 
the near future.
    There are provisions of the 2002 Act that are not covered by these 
operating instructions. The Health Insurance Tax Credit (HITC) 
provisions involve several Departments, including the Departments of 
Labor, Health and Human Services, and the Treasury (including the 
Internal Revenue Service). Guidance and instructions for the HITC are 
forthcoming. Similarly, the ATAA will not be implemented until the 
summer of 2003. Complete guidance and operating instructions for the 
ATAA are forthcoming. The HITC and the ATAA are discussed briefly in 
this document, and only for informational purposes.
    For purposes of these operating instructions, the following 
definitions will apply:
    1. 2002 Act means the Trade Act of 2002, Pub. L. 107-210.
    2. 1974 Act means the Trade Act of 1974, as amended (but not 
including the amendments in the 2002 Act), Pub. L. 93-618, as amended.
    3. DOL means the U.S. Department of Labor.
    4. Secretary means the Secretary of Labor.
    5. TAA means the Trade Adjustment Assistance program.
    6. NAFTA-TAA means the North American Free Trade Agreement-
Transitional Adjustment Assistance program.
    7. TRA means Trade Readjustment Allowances.
    8. ATAA means Alternative Trade Adjustment Assistance program.
    9. HITC means Health Insurance Tax Credit.
    10. WIA means the Workforce Investment Act of 1998.

A. Reauthorization, Termination, and Expenditure Record

    Statutory Change: Section 111 of the 2002 Act amends sections 245 
and 285 of the 1974 Act as follows:

Sec. 285. Termination

    (a) Assistance for Workers.--Section 245 of the Trade Act of 
1974 (19 U.S.C. 2317) is amended by striking `October 1, 1998, and 
ending September 30, 2001, each place it appears and inserting 
October 1, 2001, and ending September 30, 2007,'.
    (c) Termination.--Section 285 of the Trade Act of 1974 is 
amended to read as follows:
    (a) Assistance for Workers.--
    (1) In General.--Except as provided in paragraph (2), trade 
adjustment assistance, vouchers, allowances, and other payments or 
benefits may not be provided under chapter 2 after September 30, 
2007.
    (2) Exception.--Notwithstanding paragraph (1), a worker shall 
continue to receive trade adjustment assistance benefits and other 
benefits under chapter 2 for any week for which the worker meets the 
eligibility requirements of that chapter, if on or before September 
30, 2007, the worker is--
    (A) Certified as eligible for trade adjustment assistance 
benefits under chapter 2 of this title; and
    (B) Otherwise eligible to receive trade adjustment benefits 
under chapter 2.

    Administration: The trade adjustment assistance program for workers 
is reauthorized through September 30, 2007, the end of fiscal year 
2007. The amendment also authorizes the payment past that date of 
program benefits to workers who are covered by a certification issued 
on or before that date and are otherwise eligible to receive the 
benefits.
    Statutory Change: Section 120 of the 2002 Act amends section 245 of 
the 1974 Act as follows:

    Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as 
amended by section 111(a) of this Act, is further amended by 
amending subsection (b) to read as follows:
    (b) Period of Expenditure.--Funds obligated for any fiscal year 
to carry out activities under sections 235 through 238 may be 
expended by each State receiving such funds during that fiscal year 
and the succeeding two fiscal years.

    Administration: This amendment codifies the existing way of 
handling funds allocated to States for job training (including 
transportation and subsistence allowances), job search allowances, and 
relocation allowances.
    States may accrue expenditures during the fiscal year in which they 
receive funding, and during the succeeding two fiscal years. States 
must liquidate all accrued expenditures charged to a particular fiscal 
year within 90 days after the close of the second succeeding fiscal 
year (29 CFR 97.23(b)).

B. Petition Filing and Provision of Rapid Response Assistance

B.1. Petition Filing

    Statutory Change: Section 112(a) of the 2002 Act amends section 
221(a) of the 1974 Act to read as follows:

    (a)(1) A petition for certification of eligibility to apply for 
adjustment assistance for a group of workers under this chapter may 
be filed simultaneously with the Secretary and the Governor of the 
State in which such workers' firm or subdivision is located by any 
of the following:
    (A) The group of workers (including workers in an agricultural 
firm or subdivision of an agricultural firm).

[[Page 69033]]

    (B) The certified or recognized union or other dully authorized 
representative of such workers.
    (C) Employers of such workers, one-stop operators are one-stop 
partners (as defined in section 101 of the Workforce Investment Act 
of 198 (29 U.S.C. 2801)), including State employment security 
agencies, or the State dislocated worker unit established under 
title I of such Act, on behalf of such workers.
    (2) Upon receipt of a petition filed under paragraph (1), the 
Governor shall--
    (A) Ensure that rapid response assistance, and appropriate core 
and intensive services (as described in section 134 of the Workforce 
Investment Act of 1998 (29 U.S.C. 2864)) authorized under other 
Federal laws are made available to the workers covered by the 
petition to the extent authorized under such laws; and
    (B) Assist the Secretary in the review of the petition by 
verifying such information and providing such other assistance as 
the Secretary may request.

    Administration: Beginning on November 4, 202, petitions for 
certification of eligibility to apply for adjustment assistance must be 
filed simultaneously with the Secretary of Labor and the Governor of 
the State where the petitioning workers worked. Although the language 
of the statute says ``may'' be filed simultaneously, the legal 
interpretation is that anyone who has standing to file a petition and 
who wishers to do so must file simultaneously with the Secretary and 
the Governor in order that they are both able to carry out their 
statutory responsibilities. If the statute had said ``shall'' file 
simultaneously, that would be a legal requirement that all persons in 
the United States who fit into one or more of the three listed 
categories must file petitions for adjustment assistance.
    Throughout those operating instructions, the terms ``filed'' and 
``received'' have the same meaning with respect to the petitioning 
process. Regulations published at 29 CFR 90.2 state that ``Date of 
filing means the date on which petitions and other documents are 
received by the Office of Trade Adjustments Assistance. Employment and 
Training Administration, U.S. Department of Labor * * *''.
    Petitions may be filed by any of the following:
    1. Three or more individual members of the affected worker group;
    2. An official of the certified or recognized union that represents 
the workers;
    3. An official of the company where the workers worked;
    4. One-Stop operators are partners as defined in section 101 of the 
WIA, including SWAs or the State dislocated worker unit.
    The States is also required to assist the Secretary in the review 
of the petition by verifying such information and providing other 
assistance as the Secretary may request. However, States no longer 
perform preliminary investigations as they did under the NAFTA-TAA 
program.
    States must be prepared to assist petitioners in completing and 
filing petitions. Petitions forms must be readily available at all One-
Stop Career Centers and other local offices of the SWA. Upon receiving 
a petition, the State must immediately transmit the petition by 
facsimile or other electronic means to DOL. If a petition is received 
both in the State and transmitted to DOL on the same day, the petition 
will be considered to have been filed simultaneously with the Secretary 
and the Governor. However, in practice, strictly simultaneous filing 
may not be practical. If a petition is not received on the same day by 
both the Secretary and the Governor, it will be considered to be filed 
on the later of the two different dates of receipt. A new petition form 
will be supplied to the States by DOL; the new petition form will also 
be available for download from the TAA Web site (http://www.doleta.gov/tradeact). Petitions filed on or after November 4, 2002, must use the 
new form.

B.2. Rapid Response

    Upon receipt of a petition on or after November 4, 2002, the State 
must ensure that rapid response assistance and appropriate core and 
intensive services, as described in section 134 of the WIA, are made 
available to the workers covered by the petition to the extent 
authorized under the WIA and other Federal laws. This requirement 
applies to every petition received. If a petition is generated during 
the course of rapid response assistance to a worker group, this 
requirement will be satisfied for that petition. The State shall use 
the date that the petition is received by the State as the criterion 
for providing rapid response assistance.

C. Group Eligibility Requirements

    Section 113 of the 2002 Act amends section 222 of the 1974 Act by 
broadening the criteria for certification and adding eligibility for 
certain secondarily-affected workers. In order to properly assist 
workers or their representatives to file petitions for adjustment 
assistance, or to properly file themselves on behalf of workers, States 
must know the new criteria for certification of petitions for both 
primarily-affected workers and secondarily-affected workers. 
Responsibility for investigating petitions and applying the criteria 
for certification will rest with DOL.
    It is important to note from the outset that the inclusion of 
secondarily-affected workers does not create a separate group of 
certified workers who are eligible for benefits and services that are 
different from those available to other certified workers. All workers 
covered by certifications issued pursuant to petitions filed on or 
after November 4, 2002, whether they are `primarily affected' or 
`secondarily affected', are eligible to apply for the same set of 
benefits and services.

C.1. Certification Criteria

    Statutory Change: Section 113 of the 2002 Act amends section 222(a) 
of the 1974 Act to read as follows:

    (a) In General.--A group of workers (including workers in any 
agricultural firm of subdivision of an agricultural firm) shall be 
certified by the Secretary as eligible to apply for adjustment 
assistance under this chapter pursuant to a petition filed under 
section 221 if the Secretary determines that--
    (1) 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
    (2)(A)(i) The sales or production, or both, of such firm or 
subdivision have decreased absolutely;
    (ii) Important of articles like or directly competitive with 
articles produced by such firm or subdivision have increased; and
    (iii) The increase in imports described in 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)(i) There has been a shift of production by such workers' 
firm or subdivision to a foreign country of articles like or 
directly competitive with articles which are produced by such firm 
or subdivision; and
    (ii)(I) The country to which the workers' firm has shifted 
production of the articles is a party to a free trade agreement with 
the United States;
    (II) The country to which the workers' firm has shifted 
production of the articles is a beneficiary country under the Andean 
Trade Preferences Act, African Growth and Opportunity Act, or the 
Caribbean Basin Economic Recovery Act; or
    (III) There has been or is likely to be an increase in imports 
of articles that are like or directly competitive with articles 
which are or were produced by such firm or subdivision.

    Administration: The criteria for certification of eligibility to 
apply for adjustment assistance now cover adverse effects either from 
increased imports or from a shift of production to certain countries. 
In order for a certification to be issued, the petition must satisfy 
these two criteria:

[[Page 69034]]

    1. A significant number or proportion of the workers in the 
workers' firm, or an appropriate subdivision of such firm, must have 
become totally or partially separated or be threatened with total or 
partial separation.
    2. The second criterion is satisfied if either A or B below are 
satisfied:
    A.(i) Sales or production, or both, at the petitioning workers' 
firm or subdivision must have decreased absolutely, and
    (ii) Imports of articles like or directly competitive with articles 
produced by the petitioning workers' firm or subdivision have 
increased, and
    (iii) The increase in imports described in (ii) contributed 
importantly to the petitioning workers' separation or threat of 
separation and to the decline in sales or production at the firm or 
subdivision.
    B. (i) There has been a shift of production by the petitioning 
workers' firm or subdivision to a foreign country of articles like or 
directly competitive with the articles which are produced by the firm 
or subdivision, and
    (ii) one of the following conditions applies:
    a. The country to which the workers' firm has shifted production of 
the articles is a party to a free trade agreement with the United 
States; or
    b. The country to which the workers' firm has shifted production of 
the articles is a beneficiary country under the Andean Trade Preference 
Act, the African Growth and Opportunity Act, or the Caribbean Basin 
Economic Recovery Act, or
    c. There has been or is likely to be an increase in imports of the 
articles that are like or directly competitive with articles which are 
or were produced by the firm or subdivision.
    The new certification criteria are basically a combination of the 
criteria for the old TAA program and those for the NAFTA-TAA program. 
the first set of criteria for certification are the same as those that 
have applied to the TAA program since its inception. The second set of 
criteria takes the shift of production criterion from the NAFTA-TAA 
program and modifies it to cover shifts to many, but not all, 
countries. The applicable countries are those included in three 
specific trade-promotion Acts and any others that are parties to free-
trade agreements with the United States. The group of countries that 
are applicable for these purposes may change from time to time; a 
current list of such countries will be available on the TAA Web site. 
For shifts of production to countries that do not fall into either of 
those groups, there is a third criterion that covers actual or 
prospective increases of imports of like or directly competitive 
products. The latter criterion does not require that the actual or 
prospective increases in imports come from the country to which the 
shift of production occurred.

C.2. Secondarily-Affected Worker Eligibility

    Statutory Change: Section 113(b) of the 2002 Act continues the 
amendments to section 222 of the 1974 Act by redesignating section 
222(b) of the 1974 Act as section 222(c) and inserting the following:

    (b) Adversely Affected Secondary Workers.--A group of workers 
(including workers in any agricultural firm or subdivision of an 
agricultural firm) shall be certified by the Secretary as eligible 
to apply for adjustment assistance benefits under this chapter if 
the Secretary determines that--
    (1) A significant number or proportion of the workers in the 
workers' firm or an appropriate subdivision of the firm have become 
totally or partially separated, or are threatened to become totally 
or partially separated;
    (2) The workers' firm (or subdivision) is a supplier or 
downstream producer to a firm (or subdivision) that employed a group 
of workers who received a certification of eligibility under 
subsection (a), and such supply or production is related to the 
article that was the basis for such certification (as defined in 
subsection (c)(3) and (4)); and
    (3) Either--
    (A) the workers' firm is a supplier and the component parts it 
supplied to the firm (or subdivision) described in paragraph (2) 
accounted for at least 20 percent of the production or sales of the 
workers' firm; or
    (B) A loss of business by the workers' firm with the firm (or 
subdivision) described in paragraph (2) contributed importantly to 
the workers' separation or threat of separation determined under 
paragraph (a).

    Section 113(b) of the 2002 Act amends section 222(c) (as 
redesignated) of the 1974 Act by adding the following:

    (3) Downstream Producer.--The term `downstream producer' means a 
firm that performs additional, value-added production processes for 
a firm or subdivision, including a firm that performs final assembly 
or finishing, directly for another firm (or subdivision), for 
articles that were the basis for a certification of eligibility 
under subsection (a) of a group of workers employed by such other 
firm, if the certification of eligibility under subsection (a) is 
based on an increase in imports from, or a shift of production to, 
Canada or Mexico.
    (4) Supplier.--The term `supplier' means a firm that produces 
and supplies directly to another firm (or subdivision) component 
part for articles that were the basis for a certification of 
eligibility under subsection (a) of a group of workers employed by 
such other firm.

    Administration: there are basically two groups of workers that can 
be certified as eligible to apply for adjustment assistance because the 
workers are secondarily affected--workers who supply components 
(upstream) to a firm whose workers are certified (primary) or workers 
who perform additional, value-added production and finishing operations 
(downstream) for a firm whose workers are certified (primary).
    Upstream workers must directly supply the primary firms. the 
articles produced by upstream workers must be directly incorporated 
into the articles that were the basis for the certification of the 
primary firm's workers. Supplier chains are often categorized according 
to ``tiers.'' Firms in the first tier supply components directly to the 
producer of the final product. Firms in the second tier supply 
components to firms in the first tier, and so forth. The secondary-
worker coverage applies only to workers employed by firms in the first 
tier. The components supplied to the primary firm by the upstream 
workers must either account for at least 20 percent to the production 
or sales of the upstream firm, or the loss of business with the primary 
firm by the upstream firm must have contributed importantly to the 
upstream workers' separations or threat of separations. For upstream 
workers to be certified as secondarily affected, the import impact on 
the primary firm can come from increased imports from any country or a 
shift of production to any country that qualifies under the shift-of-
production criteria.
    Downstream workers must directly perform additional, value-added 
production processes, including final assemble or finishing, on the 
products of the primary firm. Downstream workers can only be certified 
as secondarily affected if the workers of the primary firm are 
certified based on increased imports from Canada or Mexico or a shift 
of production to Canada or Mexico. Also, the downstream workers' firm 
must have suffered a loss of business with the primary firm that 
contributed importantly to the workers' separations or threat of 
separations.

C.3. Secondary Worker Coverage Under the SAA

    The secondary-worker coverage that was established by the Statement 
of Administrative Action (SAA) that accompanied the NAFTA implementing 
legislation applied only to workers who were adversely affected by 
imports from, or a shift of production to, Canada or Mexico. Workers 
determined to be secondarily impacted under the SAA received benefits 
and services through the dislocated worker program under WIA. Under the 
2002 Act, the TAA

[[Page 69035]]

program will be responsible for benefits and services provided to 
workers who are certified as secondarily affected pursuant to petitions 
received on or after November 4, 2002. The benefits and services 
available to such workers, and the eligibility critiera applicable to 
them, are exactly the same as for workers who are certified as 
primarily impacted.

D. Trade Readjustment Allowances

D.1. Exhaustion of Unemployment Insurance

    Statutory Change: Section 114(a) of the 2002 Act amends section 
231(a)(3)(B) of the 1974 Act by inserting at the end of the subsection 
``except additional compensation that is funded by a State and is not 
reimbursed from any Federal funds.''
    Administration: As amended, section 231(a)(3)(B) requires that a 
worker must exhaust all entitlement to unemployment insurance in order 
to be eligible for TRA. Entitlement to unemployment insurance includes 
regular UC and Extended Benefits (EB) and Temporary Extended 
Unemployment Compensation (TEUC). However, the new amendment means that 
an eligible worker may receive TRA before (or, depending on State law, 
along with) receiving additional compensation that is entirely State-
funded.
    Under section 233(a)(1) of the 1974 Act, which has not been 
amended, a determination of the amount of basic TRA to which an 
eligible worker is entitled is made by computing 52 times the most 
recent TRA weekly benefit amount (WRA), then deducting from that amount 
the sum of the unemployment insurance to which the worker was entitled 
in the worker's first benefit period. However, the statutory change to 
section 231(a)(3)(B) is interpreted to mean that additional 
compensation that is entirely State-funded shall not be deducted from 
the product of 52 times the worker's WBA in computing a worker's basic 
TRA maximum benefit amount.

D.2. Enrollment in Training Requirement

    Statutory Change: Section 114(b) of the 2002 Act amends section 
231(a)(5)(A) of the 1974 Act to read;

    (5) Such worker
    (A)(i) Is enrolled in a training program approved by the 
Secretary under section 236(a) of this title, and
    (ii) The enrollment required under clause 9i) occurs no later 
than the latest of--
    (I) The last day of the 16th week after the worker's most recent 
total separation form adversely affected employment which meets the 
requirements of paragraphs (1) and (2),
    (II) The last day of the 8th week after the week in which the 
Secretary issues a certification covering the worker,
    (III) 45 days after the later of the dates specified in 
subclause (I) or (II), if the Secretary determines that there are 
extenuating circumstances that justify an extension in the 
enrollment period, or
    (IV) The last day of a period determined by the Secretary to be 
approved for enrollment after the termination of a waiver issued 
pursuant to subsection (c).

    Administration: ``Enrolled in training'' means that the worker's 
application for training has been approved by the SWA and that the 
training institution has furnished written notice to the SWA that the 
worker has been accepted into the approved program which is to begin 
within 30 days of such approval (20 CFR 617.11(a)(2)(vii)(D)). States 
are encourage to select training providers that have met the 
qualifications necessary to be included in the Eligible Training 
Provider List (ETPL) as defined in the WIA.
    ``Extenuating circumstances'' are situations that could arise when 
training programs are abruptly cancelled or where the first available 
enrollment date is past the end of the 60-day period, as well as in 
cases where a worker suffers injury or illness that adversely affects 
the worker's ability to enroll in training. These new enrollment 
deadlines are nearly the same as those that have existed for the NAFTA-
TAA program since 1994. These deadlines may be waived for specified 
reasons, which are discussed next. However, the intent of time 
limitations is that adversely-affected workers who are in need of 
training be enrolled in training quickly in order to expedite their 
adjustment and reemployment.
    For purposes of subsection IV, ``the last day of a period 
determined by the Secretary'' is the first Monday of the week following 
the week in which the waiver is terminated, whether by revocation or 
expiration, until such time as this issue is addressed in regulations.

D.3. Training Waivers

    Statutory Change: Section 115 of the 2002 Act amends section 231(c) 
of the 1974 Act to read as follows:

    (c) Waivers of Training Requirements.--
    (1) Issuance of waivers.--The Secretary may issue a written 
statement to an adversely affected worker waiving the requirement to 
be enrolled in training described in subsection (a)(5)(A) if the 
Secretary determines that it is not feasible or appropriate for the 
workers, because of 1 or more of the following reasons:
    (A) Recall.--The workers has been notified that the workers will 
be recalled by the firm from which the separation occurred.
    (B) Marketable Skills.--The workers possesses marketable skills 
for suitable employment (as determined pursuant to an assessment of 
the worker, which may include the profiling system under section 
303(j) of the Social Security Act (42 U.S.C. 503(j)), carried out in 
accordance with guidelines issued by the Secretary) and there is a 
reasonable expectation of employment at equivalent wages in the 
foreseeable future.
    (C) Retirement.--The worker is within 2 years of meeting all 
requirements for entitlement to either--
    (i) Old-age insurance benefits under title II of the Social 
Security Act (42 U.S.C. 401 et seq.) (except for application 
therefor); or
    (ii) A private pension sponsored by an employer or labor 
organization.
    (D) Health.--The worker is unable to participate in training due 
to the health of the worker, except that a waiver under this 
subparagraph shall not be construed to exempt a worker from 
requirements relating to the availability for work, active search 
for work, or refusal to accept work under Federal or State 
unemployment compensation laws.
    (E) Enrollment Unavailable.--The first available enrollment date 
for the approved training of the worker is within 60 days after the 
date of the determination made under this paragraph, or, if later, 
there are extenuating circumstances for the delay in enrollment, as 
determined pursuant to guidelines issued by the Secretary.
    (F) Training Not Available.--Training approved by the Secretary 
is not reasonably available to the worker from either governmental 
agencies or private sources (which may include area vocational 
education schools, as defined in section 3 of the Carl D. Perkins 
Vocational and Technical Education Act of 1988 (20 U.S.C. 2302), and 
employers), no training that is suitable for the worker is available 
at reasonable cost, or no training funds are available .
    (2) Duration of Waivers.--
    (A) In General.--A waiver issued under paragraph (1) shall be 
effective for not more than 6 months after the date on which the 
waiver is issued, unless the Secretary determines otherwise.
    (B) Revocation.--The Secretary shall revoke a waiver issued 
under paragraph (1) if the Secretary determines that the basis of a 
waiver is no longer applicable to the worker and shall notify the 
worker in writing of the revocation.
    (3) Agreements Under Section 239.--
    (A) Issuance by Cooperating States.--Pursuant to an agreement 
under section 239, the Secretary may authorize a cooperating State 
to issue waivers as described in paragraph (1).
    (B) Submission of Statements.--An agreement under section 239 
shall include a requirement that the cooperating State submit to the 
Secretary the written statements provided under paragraph (1) and a 
statement of the reasons for the waiver.

    Section 115 of the 2002 Act also amends section 231(a)(5)(C) of the 
1974 Act by striking the word ``certified''.

[[Page 69036]]

    Administration: There are now six specific criteria for issuing a 
waiver of the training requirement. Criterion (A) requires that a 
worker has received specific notice of recall to the worker's 
adversely-affected employment. States shall require that this notice of 
recall be in writing from the firm. Criterion (B) should be used as a 
means of encouraging more rapid reemployment and the use of up-front 
job search. As part of the marketable skills test, workers in a 
petitioning worker group may receive core and intensive services using 
rapid response funding before their petition is certified to encourage 
more rapid reemployment. Criterion (E) requires that the worker's 
training begin within 60 days after the approval of the waiver, unless 
there are extenuating circumstances. Such circumstances could arise 
when training programs are abruptly cancelled or where the first 
available enrollment date is past the end of the 60-day period, as well 
as in cases where a worker suffers injury or illness that adversely 
affects the worker's ability to enroll in training. The statutory 
language in criteria (C), (D), and (F) needs no further explanation.
    Also, as before, a waiver only applies to eligibility for basic 
TRA, not additional TRA. In order to receive additional TRA, a worker 
must be participating in approved training in each week for which the 
additional TRA is paid.
    In accordance with section 231(c)(3)(A) of the 1974 Act, as amended 
by the 2002 Act, States may issue waivers from the training 
requirement, when necessary and proper, in accordance with the 
statutory language and these instructions for eligible workers who are 
covered by certifications issued pursuant to petitions received on or 
after November 4, 2002. Also, in accordance with section 231(c)(3)(B) 
of the 1974 Act, as amended by the 2002 Act, States must submit to the 
Secretary reports on all waivers issued. The required reports are 
discussed in more detail in these instructions in section K, Program 
Reporting.

D.4. Limitations on TRA

    Statutory Change: Section 116(a) of the 2002 Act amends section 
233(a) of the 1974 Act so that paragraph (2) reads as follows:

    (2) A trade readjustment allowance shall not be paid for any 
week occurring after the close of the 104-week period (or, in the 
case of an adversely affected worker who requires a program of 
remedial education (as described in section 236(a)(5)(D)) in order 
to complete training approved for the worker under section 235, the 
130-week period) that begins with the first week following the week 
in which the adversely affected worker was most recently totally 
separated from adversely affected employment--
    (A) Within the period which is described in section 231(a)(1) of 
this title, and
    (B) With respect to which the worker meets the requirements of 
section 231(a)(2) of this title.

    Administration: This section of the 1974 Act creates as 104-week 
period beginning with a worker's most recent total qualifying 
separation during which the worker may receive any basic TRA to which 
the worker is entitled. States must continue to apply this rule, except 
that, in cases where a worker requires remedial education as part of 
the worker's reemployment plan, such a worker has a 130-period in which 
to receive any basic TRA to which the worker is entitled.
    Statutory Change: Section 116(a) of the 2002 Act also amends 
section 233(a) of the 1974 Act so that paragraph (3) reads as follows:

    (3) Notwithstanding paragraph (1), in order to assist the 
adversely affected worker to complete training approved for him 
under section 236 of this title, and in accordance with regulations 
prescribed by the Secretary, payments may be made as trade 
readjustment allowances for up to 52 additional weeks in the 52-week 
period that--
    (A) Follows the last week of entitlement to trade readjustment 
allowances otherwise payable under this part; or
    (B) Begins with the first week of such training, if such 
training begins after the last week described in subparagraph (A). 
Payments for such additional weeks may be made only for weeks in 
such 52-week period during which the individual is participating in 
such training.

    Administration: This amendment increases the maximum number of 
weeks of additional TRA for all eligible workers from 26 to 52. In all 
other respects, the regulations and operating instructions related to 
additional TRA are unchanged, except for the case where a worker who 
undergoes remedial training may qualify for up to 36 more weeks of 
additional TRA (see below).
    States must continue to apply the regulatory definition of 
additional TRA (20 CFR 617.3(m)(2)), and the regulations on weeks of 
additional TRA (20 CFR 617.15(b)), which continue to be in effect until 
they are superseded by new regulations, except that all occurrences of 
``26 weeks'' in the regulations are interpreted as referring to ``52 
weeks'' for workers covered by certifications that are issued pursuant 
to petitions received on or after November 4, 2002.
    Statutory Change: Section 116(b) of the 2002 Act amends section 
233(f) of the 1974 Act to read:

    (f) Workers treated as participating in training. For purposes 
of this part, a worker shall be treated as participating in training 
during any week which is part of a break in training that does not 
exceed 30 days if--
    (1) The worker was participating in a training program approved 
under section 236 of this title before the beginning of such break 
in training, and
    (2) The break is provided under such program.

    Administration: A State must continue to pay TRA to a worker who is 
receiving TRA while participating in approved training during scheduled 
or other normal breaks in the training that last for up to 30 days. The 
regulations which govern breaks in training, 20 CFR 617.15(d), continue 
in effect, except that the number ``14'' in that section is interpreted 
as ``30'' and the number ``15'' found in section 617.15(d)(3) is 
interpreted as ``31'' until they are superseded by new regulations. In 
addition, the reference to ``14-day break in training'' in 20 CFR 
617.22(f)(3)(ii) is interpreted as ``30-day break in training''.
    Statutory Change: Section 116(c) of the 2002 Act amends section 233 
of the 1974 Act by adding the following subsection at the end:

    (g) Notwithstanding any other provision of this section, in 
order to assist an adversely affected worker to complete training 
approved for the worker under section 236 which includes a program 
of remedial education (as described in section 236(a)(5)(D)), and in 
accordance with regulations prescribed by the Secretary, payments 
may be made as trade readjustment allowances for up to 26 additional 
weeks in the 26-week period that follows the last week of 
entitlement to trade readjustment allowances otherwise payable under 
this chapter.

    Administration: Remedial education is defined as training in the 
elementary skills that every worker must have in order to achieve basic 
reemployability. Remedial training should be considered pre-vocational; 
that is, it leads to occupational, on-the-job, or customized training 
that will equip the participant with specific job skills. Wherever 
practical, remedial training should be conducted concurrently with the 
early parts of occupational training. Examples of remedial education 
are basic writing and mathematical skills training, English as a Second 
Language (ESL) and courses leading to a G.E.D.
    For a worker who must undergo remedial education as part of the 
worker's retraining plan, the maximum number of weeks of additional TRA 
is 78, or 26 more than the maximum for workers who do not participate 
in remedial education. States must also apply the definition of 
additional TRA

[[Page 69037]]

(20 CFR 617.3(m)(2)) as well as the regulations on weeks of additional 
TRA (20 CFR 617.15(b)), which continue to be in effect until they are 
superseded by new regulations, except that all occurrences of ``26 
weeks'' in the regulations shall be interpreted as referring to ``78 
weeks'' for workers who undergo remedial education and are covered by 
certifications that are issued pursuant to petitions received on or 
after November 4, 2002. In addition, Stat4es must pay the weeks of the 
TRA for trainees in remedial education on the basis of one week of this 
additional TRA for one week of remedial education, up to the 26-week 
maximum. For example, of a worker undergoes 15 weeks of remedial 
education, then participates in occupational training, the State may 
not pay more than 15 weeks of this additional TRA for trainees in 
remedial education. If a worker undergoes more than 26 weeks of 
remedial education, the worker may not receive more than the maximum of 
26 weeks of this additional TRA. However many weeks a worker is 
eligible for, those weeks must be a fixed, continuous time period of 
that many weeks. The weeks of additional TRA for remedial education 
must follow the last week of entitlement to any other TRA otherwise 
payable.

D.5. TRA-Related Provisions That Are Unchanged

    Most of the statutory provisions related to trade readjustment 
allowances remain the same as they were before the 2002 Act. Except for 
the specific provision discussed above, the TRA provisions found in 
sections 231 through 234 of the 1974 Act (19 U.S.C. 2291 through 19 
U.S.C. 2294) must be administered according to regulations published at 
20 CFR 617.10 through 617.19 until those regulations are superseded by 
regulations implemented as a result of the enactment of the 2002 Act. 
In summary, the unchanged TRA-related provisions are:
    1. Qualifying requirements for TRA that are unchanged are:
    A. The worker's separation must have occurred between the impact 
date and the expiration date that are specified in the certification 
under which the worker is covered.
    B. The worker must have had, during the 52-week period ending with 
the week in which the worker's qualifying separation occurred, 26 weeks 
of employment at wages of $30 or more per week in adversely affected 
employment with a single firm or subdivision of a firm. The statutory 
provisions regarding the definition of weeks of employment continue to 
apply.
    C. The worker must be entitled to, or would be entitled to if the 
worker applied for, unemployment insurance for a week within the 
benefit period in which the worker's qualifying separation took place 
or which began, or would have begun, by reason of filing of a claim for 
unemployment insurance by such worker after such qualifying separation.
    D. The worker would not be disqualified for extended compensation 
under the Federal-State Extended Unemployment Compensation Act of 1970 
by reason of the work acceptance and job search requirements in section 
202(a)(3) of such Act for weeks in which the worker is not in approved 
training.
    E. The worker is enrolled in an approved training program, or has 
completed the approved training program, or has a waiver from these 
requirements.
    2. The prohibition against paying TRA to any worker who has failed 
to begin participation in training, or has ceased to participate in 
training, without justifiable cause, is unchanged.
    3. The statutory provisions related to weekly amounts of TRA are 
unchanged.
    4. The requirement that, in order to be eligible for additional 
TRA, a worker make a bona fide application for training within 210 days 
of the later of the worker's most recent qualifying separation or the 
first certification of eligibility to apply for adjustment assistance 
that covers the worker remains unchanged. Under the NAFTA-TAA program, 
this requirement was irrelevant because no waivers of the training 
requirement were permitted under that program. Therefore, a worker not 
only had to file a bona fide training plan, the worker was required to 
be enrolled in training within the \6/16\-week time limits in order to 
receive any TRA. However, the possibility that a worker could receive a 
waiver of up to six-months' duration of the \8/16\-week time limits 
implies that it is possible for a worker to file a bona fide training 
plan, and enroll in training, more than 210 days after the later of the 
dates mentioned above and before the worker's basic TRA entitlement is 
exhausted. Hence, this provision of the law is still applicable.
    5. The statutory provisions in section 233(c) related to adjustment 
of amounts payable are unchanged.
    6. The provisions in Section 234 on application of State laws are 
unchanged.

E. Job Retraining

E.1. Cap on Training Funds

    Statutory Change: Section 117 of the 2002 Act amends section 
236(a)(2)(A) of the 1974 Act by increasing the cap on training funds 
that can be allocated to the States to $220 million per year.
    Administration: These funds must cover training, including 
necessary transportation and subsistence allowances, for all eligible 
workers, including those covered by certifications issued under the 
NAFTA-TAA program. States apply for training funds in the same way as 
before, by submitting form ETA 9023 through the appropriate Regional 
office.

E.2. Employer-Based Training

    Statutory Change: Section 118(a) of the 2002 Act amends section 
236(a)(5)(A) of the 1974 act by changing ``on-the-job training'' to 
``employer-based training, including (i) on-the-job training and (ii) 
customized training.'' In addition, section 118(b) of the 2002 Act 
amends section 236(c)(8) of the 1974 Act to read ``the employer is 
provided reimbursement of not more than 50 percent of the wage rate of 
the participant, for the cost of providing the training and additional 
supervision related to the training.'' (Note: the previous language of 
section 236(c)(8), which is replaced, was ``the employer certifies to 
the Secretary that the employer will continue to employ such worker for 
at least 26 weeks after completion of such training if the worker 
desires to continue such employment and the employer does not have due 
cause to terminate such employment.'')
    Finally, section 118(c) of the 2002 Act adds a subsection to the 
end of section 236 of the 1974 act as follows:

    (c) For purposes of this section, the term ``customized 
training'' means training that is--
    (1) Designed to meet the special requirements of an employer or 
group of employers;
    (2) Conducted with a commitment by the employer or group of 
employers to employ an individual upon successful completion of the 
training; and
    (3) For which the employer pays for a significant portion (but 
in no case less than 50 percent) of the cost of such training, as 
determined by the Secretary.

    Administration: The previous requirement for on-the-job training, 
that the employer promise to continue to employ a worker in on-the-job 
training for at least 26 weeks after the completion of the training 
(provided that the worker wants to continue employment and the employer 
does not have due cause to terminate the employment) is not applicable 
to workers covered by certifications issued pursuant to petitions filed 
on or after November 4, 2002. The definitions of

[[Page 69038]]

on-the-job and customized training, and the approval criteria for such 
training, are now very similar to the equivalent definitions and 
approval criteria for such training under the dislocated worker program 
of WIA. On-the-job training is job training that occurs at a firm where 
the trainee is employed by the firm. Customized training is training 
designed to the specific requirements of a firm or group of firms, but 
conducted by a separate training vendor. In customized training, the 
trainee is not employed by the firm or group of firms for which the 
training is designed.
    Current TAA regulations published at 20 CFR 617.23(c)(1) require 
that States give priority, insofar as possible, to on-the-job training 
when designing a reemployment program for an eligible worker. States 
shall also give priority, insofar as possible, to customized training 
for eligible workers. These forms of training ensure that workers 
obtain job skills which are necessary to obtain employment in a 
particular occupation.

E.3. Length of Training

    The limit of 104 weeks on the length of a TAA-approved training 
program is not statutory. That limit is in the regulations (20 CFR 
617.22(f)(2)). The new limits on weeks of TRA that are contained in the 
2002 Act are interpreted to mean that Congress intended to match the 
maximum number of weeks of training with the maximum number of weeks of 
income support (UI plus TRA). The 2002 Act allows up to 26 weeks of TRA 
for workers who must complete some remedial education before beginning 
their retraining programs. Therefore, the intent of the statute is 
interpreted as allowing a maximum of 130 weeks of training in cases 
where workers require remedial education before they can enroll in 
occupational training. The number of weeks of training that are between 
104 and 130 cannot be more than the number of weeks of the remedial 
training. For example, if a worker's remedial training lasts for only 
10 weeks, then the maximum number of weeks of training for that worker 
would be 114 weeks. Even if the remedial training is more than 26 
weeks, the maximum number of weeks for the total retraining plan cannot 
exceed 130.

E.4. Statutory Training-Related Provisions That Are Unchanged

    Most of the statutory provisions related to job retraining remain 
the same as they were prior to the 2002 Act. Except for the two 
specific provisions discussed above, the job training provisions found 
in section 236 of the 1974 Act (19 U.S.C. 2296) shall be administered 
according to regulations published at 20 CFR 617.22 through 617.25 
until those regulations are superseded by regulations implementing the 
2002 Act. In summary, the unchanged training-related provisions are:
    1. The six criteria for approving training which are found in 
section 236(a)(1) of the 1974 Act (19 U.S.C. 2296(a)(1));
    2. The prohibitions against non-duplication of payments which are 
found in sections 236(a)(4), 236(a)(6), and 236(a)(7) of the 1974 Act 
(19 U.S.C. 2296(a)(4), 2296(a)(6), and 2296(a)(7));
    3. The types of training that may be approved for eligible workers 
which are found in section 236(a)(5) of the 1974 Act (19 U.S.C. 
2296(a)(5));
    4. Supplementary assistance to defray the costs of transportation 
and subsistence expenses when training is provided in facilities which 
are not within the commuting distance of the worker's regular place of 
residence provided in section 236(b) of the 1974 Act (19 U.S.C. 
2296(b));
    5. Criteria for approving on-the-job and customized training 
(except for criterion 8 discussed above) which are found in section 
236(c) of the 1974 Act (19 U.S.C. 2296(c));
    6. The prohibition against finding a worker ineligible for 
unemployment insurance because of participation in approved training 
found in section 236(d) of the 1974 Act (19 U.S.C. 2296(d); and
    7. The definition of the term ``suitable employment,'' used for the 
purposes of Section 236 only, found in section 236(e) of the 1974 Act 
(19 U.S.C. 2296(e).

F. Job Search Allowances

    Statutory Change: Section 121 of the 2002 Act amends section 237 of 
the 1974 Act to read as follows:

    Sec. 237. Job Search Allowances
    (a) Job Search Allowance Authorized--
    (1) In General.--An adversely affected worker covered by a 
certification issued under subchapter A of this chapter may file an 
application with the Secretary for payment of a job search 
allowance.
    (1) Approval of Applications.--The Secretary may grant an 
allowance pursuant to an application filed under paragraph (1) when 
all of the following apply:
    (A) Assist Adversely Affected Worker.--The allowance is paid to 
assist an adversely affected worker who has been totally separated 
in securing a job within the United States.
    (B) Local Employment Not Available.--The Secretary determines 
that the worker cannot reasonably be expected to secure suitable 
employment in the commuting area in which the worker resides.
    (C) Application.--The worker has filed an application for the 
allowance with the Secretary before--
    (i) The later of--
    (I) The 365th day after the date of the certification under 
which the worker is certified eligible; or
    (II) The 365th day after the date of the worker's last total 
separation; or
    (ii) The date that is the 182nd day after the date on which the 
worker concluded training, unless the worker received a waiver under 
section 231(c).
    (b) Amount of Allowance.--
    (1) In General.--An allowance granted under subsection (a) shall 
provide reimbursement to the worker of 90 percent of the cost of 
necessary job search expenses as prescribed by the Secretary in 
regulations.
    (2) Maximum Allowance.--Reimbursement under this subsection may 
not exceed $1,250 for any worker.
    (3) Allowance for Subsistence and Transportation.--Reimbursement 
under this subsection may not be made for subsistence and 
transportation expenses at levels exceeding those allowable under 
section 236(b)(1) and (2).
    (c) Exception.--Notwithstanding subsection (b), the Secretary 
shall reimburse any adversely affected worker for necessary expenses 
incurred by the worker in participating in a job search program 
approved by the Secretary.

    Adminstration: The new job search section is simply a rewriting of 
the previous job search section. The qualifying conditions are the same 
as before and the application deadlines are the same as before, except 
that the new limit for reimbursement per worker per certification is 
$1,250. Therefore, States must continue to administer job search 
allowances in accordance with regulations published at 20 CFR 617.30 
through 617.35, except that the ``$800'' in section 617.34(b) is 
interpreted to be ``$1,250.'' until those regulations are superseded by 
new regulations.

G. Relocation Allowances

    Statutory Change: Section 122 of the 2002 Act amends section 238 of 
the 1974 Act to read as follows:

    Sec. 238. Relocation Allowances
    (a) Relocation Allowance Authorized--
    (1) In General.--Any adversely affected worker covered by a 
certification issued under subchapter A of this chapter may file an 
application for a relocation allowance with the Secretary, and the 
Secretary may grant the relocation allowance, subject to the terms 
and conditions of this section.
    (2) Conditions for Granting Allowance.--A relocation allowance 
may be granted if all of the following terms and conditions are met:
    (A) Assist An Adversely Affected Worker.--The relocation 
allowance will assist an adversely affected worker in relocating 
within the United States.
    (B) Local Employment Not Available.--The Secretary determines 
that the worker cannot reasonably be expected to secure suitable

[[Page 69039]]

employment in the commuting area in which the worker resides.
    (c) Total Separation.--The worker is totally separated from 
employment at the time the relocation commences.
    (D) Suitable Employment Obtained.--The worker
    (i) Has obtained suitable employment affording a reasonable 
expectation of long-term duration in the area in which the worker 
wished to relocate; or
    (ii) Has obtained a bona fide offer of such employment.
    (E) Application.--The worker filed an application with the 
Secretary before--
    (i) The later of--
    (I) The 425th day after the date of the certification under 
subchapter A of this chapter; or
    (II) The 425th day after the date of the worker's last total 
separation; or
    (ii) The date that is the 182nd day after the date on which the 
worker concluded training, unless the worker received a waiver under 
section 231(c).
    (b) Amount of Allowance.--The relocation allowance granted to a 
worker under subsection (a) includes--
    (1) 90 percent of the reasonable and necessary expenses 
(including, but not limited to, subsistence and transportation 
expenses at levels not exceeding those allowable under section 
235(b)(1) and (2) specified in regulations prescribed by the 
Secretary, incurred in transporting the worker, the worker's family, 
and household effects; and
    (2) A lump sum equivalent to 3 times the worker's average weekly 
wage, up to a maximum payment of $1,250.
    (c) Limitations.--A relocation allowance may not be granted to a 
worker unless--
    (1) The relocation occurs within 182 days after the filing of 
the application for relocation assistance; or
    (2) The relocation occurs within 182 days after the conclusion 
of training, if the worker entered a training program approved by 
the Secretary under section 236(b)(1) and (2).''

    Administration: Like the amendment to the job search section, the 
amendment to the relocation section is simply a rewording of the 
previous language, except that the one-time payment limit is raised to 
$1,250. States shall continue to administer relocation allowances in 
accordance with regulations published at 20 CFR 617.40 through 617.48, 
except that ``$800'' found in section 617.45(a)(3) shall be interpreted 
as ``$1,250,'' until those regulations are superseded by new 
regulations.

H. Repeal of the NAFTA-TAA Program

    Section 123 of the 2002 Act repeals subchapter D of chapter 2 of 
title II of the 1974 Act, as amended. Section 123 also establishes 
transition procedures that will be in effect for petitions filed before 
the effective date of the 2002 Act and workers currently receiving 
benefits and services under the NAFTA-TAA program.

H.1. Repeal of the NAFTA-TAA program

    Statutory Change: Section 123(a) repeals the NAFTA-TAA program as 
follows:

    (a) In General.--Subchapter D of chapter 2 of title II of such 
Act (19 U.S.C. 2331) is repealed.

    Section 123(b) of the 2002 Act makes conforming amendments to other 
parts of the 1974 Act as follows:

    (b) Conforming Amendments.--
    (1) Section 225(b)(1) and (2) of the Trade Act of 1974 (19 
U.S.C. 2275(B)(1) and (2)) is amended by striking ``or subchapter 
D'' each place it appears.
    (2) Section 249A of such Act (19 U.S.C. 2322) is repealed.
    (3) The table of contents of such Act is amended--
    (A) By striking the item relating to section 249A; and
    (B) By striking the items relating to subchapter D of chapter 2 
of title II.
    (4) Section 284(a) of such Act is amended by striking ``or 
section 250(c)''

H.2. Transition Procedures

    Section 123(c) of the 2002 Act establishes an effective date and 
transition procedures as follows:

    (c) Effective Date.--
    (1) In General.--The amendments made by this section shall apply 
with respect to petitions filed under chapter 2 of title II of the 
Trade Act of 1974, on or after the date that is 90 days after the 
date of enactment of this Act.
    (2) Workers Certified As Eligible Before Effective Date.--
Notwithstanding subsection (a), a worker receiving benefits under 
chapter 2 of title II of the Trade Act of 1974 shall continue to 
receive (or be eligible to receive) benefits and services under 
chapter 2 of title II of the Trade Act of 1974, as in effect on the 
day before the amendments made by this section take effect under 
subsection (a), for any week for which the worker meets the 
eligibility requirements of such chapter 2 as in effect on such 
date.

    Administration: Sections 123(c)(1) and 123(c)(2) of the 2002 Act 
set out the transition procedures for the NAFTA-TAA program. The 
operating instructions for the NAFTA-TAA program that are contained in 
General Administration Letter 7-94, along with changes 1, 2, and 3 
thereto, continue in effect for petitions received by the State before 
the effective date of the 2002 Act, which is November 4, 2002. The 
Governor's agent that now receives NAFTA-TAA petitions must continue to 
receive NAFTA-TAA petitions, and perform preliminary investigations 
thereon, until the preliminary investigations are completed on all 
NAFTA-TAA petitions received on or before November 3, 2002. The State 
must immediately transmit all such petitions, and all information and 
documentation gathered during the preliminary investigation, to DOL. 
Any NAFTA-TAA petition received on or after November 4, 2002, is 
invalid and must be returned to the petitioners with an explanation of 
the provisions of the 2002 Act that make the petition invalid. The 
State must also include a blank petition for the new TAA program in 
case the petitioners want to file such a petition. This instruction 
also applies to NAFTA-TAA petitions dated prior to November 4, 2002, 
but received on or after that date; such petitions are not valid.
    Eligible workers who are covered by NAFTA-TAA certifications 
resulting from petitions received on or before November 3, 2002, 
regardless of the date that such certifications are issued by DOL, must 
receive benefits and services under the provisions of the NAFTA-TAA 
program as in effect on November 3, 2002. Workers being served under 
NAFTA-TAA certifications are not eligible for waivers under the new 
waiver provisions established by the 2002 Act for the regular TAA 
program. In order to be eligible for TRA, such workers are also 
required to be enrolled in approved training by the end of the 16th 
week after the worker's most recent qualifying separation, or the end 
of the 6th week after the issuance of the certification, whichever is 
later. The new enrollment deadlines in the 2002 Act do not apply to 
such workers.
    In fiscal years 2003 and 2004, there will continue to be a NAFTA-
TAA funding stream separate from the TAA funding stream. States must 
continue to request funds from DOL for NAFTA-TAA benefits and services 
separately from their requests for funds for TAA benefits and services.

I. Coordination With WIA

    Statutory Change: Section 119 of the 2002 Act amends section 235 of 
the 1974 Act as follows:

    Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is amended 
by inserting before the period at the end of the first sentence the 
following: ``, including the services provided through one-stop 
delivery systems described in section 134(c) of the Workforce 
Investment Act of 1998 (29 U.S.C. 2864(c))''.

    Statutory Change: Section 125 of the 2002 Act establishes a 
Declaration of Policy by the Congress as follows:

    (a) Declaration of Policy.--Congress reiterates that, under the 
trade adjustment assistance program under chapter 2 of title II of 
the Trade Act of 1974, workers are eligible for transportation, 
childcare, and healthcare assistance, as well as other related 
assistance under programs administered by the Department of Labor.


[[Page 69040]]


    Administration: States shall make every reasonable effort to secure 
for adversely-affected workers covered by certifications counseling, 
testing, and placement services, and supportive and other services, 
provided for under any other Federal law, including the Wagner-Peyser 
Act and the WIA.
    In the One-Stop environment established by WIA, the concept of co-
enrollment of trade-certified workers can be further enhanced and 
expanded to include multiple enrollments with a broader range of 
service delivery partners and programs. Multiple enrollment resources 
may include Wagner-Peyser activities, faith-based and community-based 
programs, vocational rehabilitation services, and veterans' programs.
    The timely provision of core and intensive services to trade-
impacted workers is an important step toward improving both the 
efficiency and the effectiveness of the Trade Act programs. Immediately 
beginning the process of needs assessment improves participation rates 
and allows individuals more time to consider all of the options 
available to them. Early intervention services that will be beneficial 
to trade-impacted workers may include orientation; initial assessment 
of skill levels, aptitudes, and abilities; provision of labor market 
information; job search assistance; and financial management workshops.
    Properly implemented, co-enrollment or multiple-enrollment of 
trade-impacted workers in the programs offered in the One-Stop 
environment, as well as early provision of rapid response services, 
will enhance the workers' adjustment process and promote the most rapid 
possible return to employment for all workers. Co-enrollment or 
multiple-enrollment also allows trade-impacted workers to receive 
supportive services that may assist in a quicker transition to work.

J. Unamended Provisions of the 1974 Act

    Many of the provisions of the 1974 Act remain unchanged; for 
completeness, these are listed below, along with the citation from the 
United States Code. Although not all of the provisions listed below are 
administered by the States, States shall administer applicable 
provisions according to the law and to regulations published at 20 CFR 
617.

    1. Section 221(b) (19 U.S.C. 2271(b)) which provides for public 
hearings on petitions.
    2. Section 222(b)(2) (19 U.S.C. 2272(b)(2)) which provides 
special definitions for ``firm'' and ``directly competitive'' in 
relation to oil and gas exploration and production.
    3. Section 223 (19 U.S.C. 2273) is unchanged except for changing 
``60 days'' to ``40 days''. This section contains definitions of 
impact date and expiration date of a certification, along with 
requirements to publish notices in the Federal Register.
    4. Section 224 (19 U.S.C. 2274) relating to studies by the 
Secretary whenever the U.S. International Trade Commission conducts 
an investigation with respect to an industry.
    5. Section 225 (19 U.S.C. 2275) containing the requirements for 
notification to workers who are covered by certifications of 
benefits and services that they may be eligible to receive.
    6. Section 232 (19 U.S.C. 2292) covering the determination of 
weekly amounts of TRA.
    7. Section 234 (19 U.S.C. 2294) relating to the applicability of 
State unemployment insurance laws.
    8. Section 239 (19 U.S.C. 2311) relating to agreements with 
States.
    9. Section 240 (19 U.S.C. 2312) relating to program 
administration absent an agreement with a State.
    10. Section 241 (19 U.S.C. 2313) relating to payments to States.
    11. Section 242 (19 U.S.C. 2314) relating to liabilities of 
certifying and disbursing officers.
    12. Section 243 (19 U.S.C. 2315) relating to fraud and recovery 
of overpayments.
    13. Section 244 (19 U.S.C. 2316) relating to penalties for false 
statements and failure to disclose material facts.
    14. Section 247 (19 U.S.C. 2319)--definitions.
    15. Section 28 (19 U.S.C. 2320) relating to the Secretary's 
authority to prescribe regulations.
    16. Section 249 (19 U.S.C. 2321) relating to the Secretary's 
subpoena power.

K. Program Reporting

    Trade Act Participant Report (TAPR): The TAPR is unchanged. 
States must continue to report TAPR data according to instructions 
set forth in General Administration Letter 11-00.
    Form ETA 563: Form ETA 563 is being revised; the new form will 
be available early in calendar year 2003. For the quarters ending 
September 30, 2002, and December 31, 2002, States must continue 
reporting data on form ETA 563 according to the instructions 
contained in ETA Handbook 315. New instructions will accompany the 
revised form.
    The 2002 Act requires that the States report to the Secretary on 
each waiver and the reasons for issuing each waiver. Therefore, 
States should expect a new reporting form along with the revised 
form ETA 563. This reporting form will be very much like form ETA 
9027, which was discontinued in 1997. This new form will also be 
available early in calendar year 2003, accompanied by full 
instructions.

L. Alternative Trade ADjustment Assistance for Older Workers

    Section 124 of the 2002 Act strikes section 246 of the 1974 Act 
and replaces it with a demonstration project for alternative trade 
adjustment assistance for older workers. The statute allows the 
Secretary up to one year from the date of enactment (August 6, 2002) 
to establish the ATAA program. Therefore, these operating 
instructions do not include instructions for administering the ATAA 
program. However, for completeness and to give States some advance 
notice of future developments, the general outlines of the ATAA 
program are described below.
    Petitioning workers must be given the opportunity to request 
that they be considered for certification under the ATAA program. In 
determining whether to certify a group of workers as eligible for 
ATAA, the following criteria are to be used:
    1. Whether a significant number of the workers at the workers' 
firm are 50 years of age or older.
    2. Whether the workers in the workers' firm possess skills that 
are not easily transferable.
    3. The competitive conditions within the workers' industry.
    An individual worker who is covered by a certification for ATAA 
must also satisfy all of the following individual qualifying 
criteria:
    1. The worker is covered under a regular TAA certification.
    2. The worker has obtained reemployment not more than 26 weeks 
after the date of the worker's separation from adversely-affected 
employment.
    3. The worker is at least 50 years of age.
    4. The worker earns not more that $50,000 per year in wages from 
reemployment.
    5. The worker is employed on a full-time basis as defined by 
State law of the State in which the worker is reemployed.
    6. The worker does not return to the employment from which the 
worker was separated.
    Eligible workers who choose the benefits of ATAA may not receive 
three of the regular TAA benefits and services--training, TRA, and 
job search allowances. They may, however, receive relocation 
allowances if suitable employment is not reasonably available in the 
commuting area. Eligible workers who choose ATAA receive the 
following benefits:
    1. 50 percent of the difference between the wages the worker 
receives from reemployment and the wages received by the worker at 
separation from adversely-affected employment. This payment is 
subject to the following limitaitons:
    A. The payments may not be made for longer than two years.
    B. The total of all payments may not exceed $10,000 during the 
two-year eligibility period.
    2. The health insurance tax credit, only for the period in which 
the worker is participating in ATAA (not to exceed two years). 
Further guidance and instructions for the ATAA program will be 
transmitted to the States in the near future.

M. Health Insurance Tax Credit

    Sections 201 and 202 of the 2002 Act establish a program of tax 
credits for health insurance costs. This program will be implemented 
through the cooperative efforts of the Department of Labor, the 
Department of Health and Human Services, and the Department of the 
Treasury (including the

[[Page 69041]]

Internal Revenue Service). Guidance and operating instructions for 
the HITC program will be issued separately.
    6. Action Required. States are required to implement the 
amendments to the 1974 Act made by the 2002 Act and set forth in 
these operating instructions as of the effective date, November 4, 
2002. States shall inform all appropriate staff of the contents of 
these instructions.
    7. Inquiries. States should direct all inquiries to the 
appropriate ETA Regional office.
    8. Attachment. Subtitle A of Title I, and Title II, of the Trade 
Act of 2002.\1\
---------------------------------------------------------------------------

    \1\ This attachment is available at the following Web site: 
www.doleta.gov/tradeact/2002act_index.asp.

[FR Doc. 02-28932 Filed 11-13-02; 8:45 am]
BILLING CODE 4510-30-M