[Federal Register Volume 69, Number 16 (Monday, January 26, 2004)]
[Notices]
[Pages 3604-3605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1522]


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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-52,818]


Hewlett-Packard Company, Open VMS Data Protector Team, Colorado 
Springs, Colorado; Notice of Negative Determination Regarding 
Application for Reconsideration

    By application of November 23, 2003, a petitioner requested 
administrative reconsideration of the Department's negative 
determination regarding eligibility for workers and former workers of 
the subject firm to apply for Trade Adjustment Assistance (TAA). The 
denial notice applicable to workers of Hewlett-Packard Company, Open 
VMS Data Protector Team, Colorado Springs, Colorado was signed on 
October 31, 2003, and published in the Federal Register on November 28, 
2003 (68 FR 66878).
    Pursuant to 29 CFR 90.18(c) reconsideration may be granted under 
the following circumstances:
    (1) If it appears on the basis of facts not previously considered 
that the determination complained of was erroneous;
    (2) If it appears that the determination complained of was based on 
a mistake in the determination of facts not previously considered; or
    (3) If in the opinion of the Certifying Officer, a 
misinterpretation of facts or of the law justified reconsideration of 
the decision.
    The TAA petition was filed on behalf of workers at Hewlett-Packard 
Company, Open VMS Data Protector Team, Colorado Springs, Colorado 
engaged in software engineering, such as programming, planning, testing 
and maintenance. The petition was denied because the petitioning 
workers did not produce an article within the meaning of section 222 of 
the Act.
    The petitioner asserts that the negative decision for the 
petitioning worker group came as a result of an incorrect 
interpretation of production as stipulated in the Trade Act. The 
petitioner also asserts that workers were in fact producing an article, 
``HP Openview Storage Data Protector 5.1'' and that this software 
engineered by workers should be considered a product for the reasons 
that it is a standalone application; is shipped on a CDrom, which 
contains the executable software; includes manuals; and has roadmaps.
    Software and information systems are not listed on the Harmonized 
Tariff Schedule of the United States (HTSUS), published by the United 
States International Trade Commission (USITC), Office of Tariff Affairs 
and Trade Agreements, which describes all ``articles'' imported to or 
exported from the United States. This codification represents an 
international standard maintained by most industrialized countries as 
established by the International Convention on the Harmonized Commodity 
Description and Coding (also known as the HS Convention).
    The Trade Adjustment Assistance (TAA) program was established to 
help workers who produce articles and who lose their jobs as a result 
of increases in imports of articles like or directly competitive with 
those produced at the workers' firm.
    Throughout the Trade Act an article is often referenced as 
something that can be subject to a duty. To be subject to a duty on a 
tariff schedule, an article will have a value that makes it marketable, 
fungible and interchangeable for commercial purposes. But, although a

[[Page 3605]]

wide variety of tangible products are described as articles and 
characterized as dutiable in the HTSUS, software and associated 
information technology services are not listed in the HTSUS. Such 
products are not the type of employment work products that Customs 
officials inspect and that the TAA program was generally designed to 
address.
    A National Import Specialist was contacted at the U.S. Customs 
Service to address whether software could be described as an import 
commodity. The Import Specialist confirmed that electronically 
transferred material is not a tangible commodity for U.S. Customs 
purposes. In cases where software is encoded on a medium (such as a CD 
Rom or floppy diskette), the software is given no import value, but 
rather evaluated exclusively on the value of the carrier medium. This 
standard is based on Treasury Decision 85-124 as issued on July 8, 
1985, by the U.S. Customs Service. In conclusion, this decision states 
that ``in determining the customs value of imported carrier media 
bearing data or instructions, only the cost or value of the carrier 
medium itself shall be taken into account. The customs value shall not, 
therefore, include the cost or value of the data or instructions, 
provided that this is distinguished from the cost or the value of the 
carrier medium.''
    Finally, the North American Industry Classification System (NAICS), 
designates all manner of custom software applications and software 
systems, including analysis, development, programming, and integration 
as ``Services'' (see NAICS 541511 and 541512.)
    Only in very limited instances are service workers certified for 
TAA, namely the worker separations must be caused by a reduced demand 
for their services from a parent or controlling firm or subdivision 
whose workers produce an article and who are currently under 
certification for TAA.

Conclusion

    After review of the application and investigative findings, I 
conclude that there has been no error or misinterpretation of the law 
or of the facts which would justify reconsideration of the Department 
of Labor's prior decision. Accordingly, the application is denied.

    Signed in Washington, DC, this 15th day of January, 2004.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 04-1522 Filed 1-23-04; 8:45 am]
BILLING CODE 4510-30-P