[Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means (Green Book)]
[Program Descriptions]
[Section 6. Trade Adjustment Assistance]
[From the U.S. Government Printing Office, www.gpo.gov]


 
[1998 Green Book] SECTION 6. TRADE ADJUSTMENT ASSISTANCE

                                CONTENTS

Trade Adjustment Assistance Program for Workers
  Certification Requirements
  Qualifying Requirements for Trade Readjustment Allowances
  Cash Benefit Levels and Duration
  Training and Other Employment Services, Job Search, and 
            Relocation Allowances
NAFTA Worker Security Act
Funding of TAA and NAFTA Programs
Trade Adjustment Assistance Program for Firms
  Benefits
  Funding
Legislative History

            TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR WORKERS

    Trade Adjustment Assistance for Workers (TAA) under 
sections 221-50 of the Trade Act of 1974, as amended, consists 
of trade readjustment allowances (TRA), employment services, 
training and additional TRA allowances while in training, and 
job search and relocation allowances for certified and 
otherwise qualified workers. The program is administered by the 
Employment and Training Administration (ETA) of the Department 
of Labor through State agencies under cooperative agreements 
between each State and the Secretary of Labor. ETA processes 
petitions and issues certifications or denials of petitions by 
groups of workers for eligibility to apply for TAA. The State 
agencies act as Federal agents in providing program 
information, processing applications, determining individual 
worker eligibility for benefits, issuing payments, and 
providing reemployment services and training opportunities.

                       Certification Requirements

    A two-step process is involved in the determination of 
whether an individual worker will receive trade adjustment 
assistance: (1) certification by the Secretary of Labor of a 
petitioning group of workers in a particular firm as eligible 
to apply; and (2) approval by the State agency administering 
the program of the application for benefits of an individual 
worker covered by a certification.
    The process begins by a group of three or more workers, 
their union, or authorized representative filing a petition 
with the ETA for certification of group eligibility. To certify 
a petitioning group of workers as eligible to apply for 
adjustment assistance, the Secretary must determine that three 
conditions are met:
 1. A significant number or proportion of the workers in the 
        firm or subdivision of the firm have been or are 
        threatened to be totally or partially laid off;
 2. Sales and/or production of the firm or subdivision have 
        decreased absolutely; and
 3. Increased imports of articles like or directly competitive 
        with articles produced by the firm or subdivision of 
        the firm have ``contributed importantly'' to both the 
        layoffs and the decline in sales or production.
    The Omnibus Trade and Competitiveness Act of 1988 (OTCA) 
amendments expanded the potential eligibility coverage to 
include workers in any firm or subdivision of a firm that 
engages in exploration or drilling for oil or natural gas.
    The Secretary is required to make the eligibility 
determination within 60 days after a petition is filed. A 
certification of eligibility to apply for TAA covers workers 
who meet the requirements and whose last total or partial 
separation from the firm or subdivision before applying for 
benefits occurred within 1 year prior to the filing of the 
petition. Table 6-1 provides an overview of the number of 
petitions instituted and certified since 1975.
    State agencies must give written notice by mail to each 
worker to apply for TAA where it is believed the worker is 
covered by a certification of eligibility and also must publish 
notice of each certification in newspapers of general 
circulation in areas where certified workers reside. State 
agencies must also advise each adversely affected worker, at 
the time that worker applies for unemployment insurance, of TAA 
Program benefits as well as the procedures, deadlines, and 
qualifying requirements for applying. State agencies must 
advise each such worker to apply for training before or at the 
same time the worker applies for TRA benefits, and promptly 
interview each certified worker and review suitable training 
opportunities available. Table 6-2 summarizes the number of 
workers certified by major industries since 1975.

       Qualifying Requirements for Trade Readjustment Allowances

    In order to receive entitlement to payment of a trade 
readjustment allowance for any week of unemployment, an 
individual must be an adversely affected worker covered by a 
certification, file an application with the State agency, and 
meet the following qualifying requirements:
 1. The worker's first qualifying separation from adversely 
        affected employment occurred within the period of the 
        certification applicable to that worker, i.e., on or 
        after the ``impact date'' in the certification (the 
        date on which total or partial layoffs in the firm or 
        subdivision thereof began or threatened to begin, but 
        never more than 1 year prior to the date of the 
        petition), within 2 years after the date the Secretary 
        of Labor issued the certification covering the worker, 
        and before the termination date (if any) of the 
        certification.
 2. The worker was employed for at least 26 weeks during the 
        52-week period preceding the week of the first 
        qualifying separation at wages of $30 or more per week 
        in adversely affected employment with a single firm or 
        subdivision of a firm. A week of unemployment includes 
        the week in which layoff occurs and up to 7 weeks of 
        employer-authorized vacation, sickness, injury, 
        maternity, or military leave, or service as a full-time 
        union representative. Weeks of disability covered by 
        workmen's compensation and weeks of active duty in a 
        military reserve status may also count toward the 26-
        week minimum.

    TABLE 6-1.--NUMBER OF PETITIONS INSTITUTED AND CERTIFIED AND ESTIMATED NUMBER OF WORKERS PETITIONING AND    
                                           CERTIFIED FOR TAA, 1975-97                                           
----------------------------------------------------------------------------------------------------------------
                                                        Cases instituted               Cases certified          
                                                    ------------------------------------------------------------
                   Calendar year                                 Estimated                            Estimated 
                                                     Petitions    workers    Petitions  Percent \1\    workers  
----------------------------------------------------------------------------------------------------------------
1975...............................................        559      216,173       261          47        114,875
1976...............................................      1,057      226,778       457          43        148,030
1977...............................................      1,319      229,874       437          33        145,285
1978...............................................      1,874      176,877       933          50        168,226
1979...............................................      2,306      346,709     1,006          44        234,220
1980...............................................      5,571    1,051,364     1,059          19        598,739
1981...............................................      1,159      133,924       377          33         32,674
1982...............................................      1,063      176,306       280          26         22,988
1983...............................................        976      166,604       517          53         60,986
1984...............................................        511       44,247       356          70         17,011
1985...............................................      1,439      131,102       510          35         34,538
1986...............................................      1,887      168,625       920          49         80,610
1987...............................................      1,650      194,654       824          50         93,572
1988...............................................      2,761      230,541     1,195          43        106,363
1989...............................................      1,856      151,744     1,430          77         85,500
1990...............................................      1,621      160,793       706          44         75,638
1991...............................................      1,781      152,855       790          44         63,953
1992...............................................      1,999      128,858     1,321          66         60,190
1993...............................................      1,374      168,441       740          54         78,496
1994...............................................      1,629      137,242     1,047          64         81,974
1995...............................................      1,506      136,029     1,122          74         89,398
1996...............................................      1,655      175,962     1,113          68        111,833
1997...............................................      1,280      145,856       814          63        108,926
----------------------------------------------------------------------------------------------------------------
\1\ Estimated percent of petitioning workers certified under completed cases; figures are not precise but       
  indicate the trend.                                                                                           
                                                                                                                
Source: Department of Labor.                                                                                    

 3. The worker was entitled to unemployment insurance (UI), has 
        exhausted all rights to any UI entitlement, including 
        any extended benefits or Federal supplemental 
        compensation (if in existence), and does not have an 
        unexpected waiting period for any UI.
 4. The worker must not be disqualified with respect to the 
        particular week of unemployment for extended benefits 
        by reason of the work acceptance and job search 
        requirements under section 202(a)(3) of the Federal-
        State Extended Unemployment Compensation Act of 1970. 
        All TRA claimants in all States are subject to the 
        provisions of the extended benefits ``suitable work'' 
        test under that act (i.e., must accept any offer of 
        suitable work, actively engage in seeking work, and 
        register for work) after the end of their regular UI 
        benefit period as a precondition for receiving any 
        weeks of TRA payments. The extended benefits work test 
        does not apply to workers enrolled or participating in 
        a TAA-approved training program; the test does apply to 
        workers for whom TAA-approved training is certified as 
        not feasible or appropriate.

 TABLE 6-2.--ESTIMATED NUMBER OF WORKERS CERTIFIED BY MAJOR INDUSTRIES, 
                                 1975-97                                
------------------------------------------------------------------------
                                                                Workers 
                          Industry                                (in   
                                                              thousands)
------------------------------------------------------------------------
Total estimated number of workers certified.................       2,562
  Certifications by major industries:                                   
    Motor vehicles..........................................         808
    Apparel.................................................         444
    Steel...................................................         186
    Footwear................................................         133
    Electronics (including computers).......................         221
    Oil and gas.............................................         162
    Fabricated metal products...............................          65
    Textiles................................................          59
    Other...................................................         484
------------------------------------------------------------------------
Source: Department of Labor.                                            

 5. The worker must be enrolled in, or have completed following 
        separation from adversely affected employment within 
        the certification period, a training program approved 
        by the Secretary of Labor in order to receive basic TAA 
        payments, unless the Secretary has determined and 
        submitted a written statement to the individual worker 
        certifying that approval of training is not ``feasible 
        or appropriate'' (e.g., training is not available that 
        meets the criteria for approval, funding is not 
        available to pay the full training costs, or there is a 
        reasonable prospect that the worker will be reemployed 
        by the firm from which he was separated). No cash 
        benefits may be paid to a worker who, without 
        justifiable cause, has failed to begin participation or 
        has ceased participation in an approved training 
        program until the worker begins or resumes 
        participation, or to a worker whose waiver of 
        participation in training is revoked in writing by the 
        Secretary.
    This training requirement to encourage and enable workers 
to obtain early reemployment became effective under the OTCA 
amendments as of November 21, 1988; this 1988 amendment 
replaced a 1986 amendment that instituted a job search 
requirement as a condition for receiving cash benefits.

                    Cash Benefit Levels and Duration

    A worker is entitled to TRA payments for weeks of 
unemployment beginning the later of (a) the first week 
beginning more than 60 days after the filing date of the 
petition that resulted in the certification under which the 
worker is covered (i.e., weeks following the statutory deadline 
for certification), or (b) the first week after the worker's 
first total qualifying separation.
    The TRA cash benefit amount payable to a worker for a week 
of total unemployment is equal to, and a continuation of, the 
most recent weekly benefit amount of unemployment insurance 
payable to that worker preceding that worker's first exhaustion 
of UI following the worker's first total qualifying separation 
under the certification, reduced by any Federal training 
allowance and disqualifying income deductible under UI law.
    The maximum amount of basic TRA benefits payable to a 
worker for the period covered by any certification is 52 times 
the TRA payable for a week of total unemployment minus the 
total amount of UI benefits to which the worker was entitled in 
the benefit period in which the first qualifying separation 
occurred (e.g., a worker receiving 39 weeks of UI regular and 
extended benefits could receive a maximum 13 weeks of basic TRA 
benefits). UI and TRA payments combined are limited to a 
maximum 52 weeks in all cases involving extended compensation 
benefits. Thus, a worker who received 52 or more weeks of 
unemployment benefits would not be entitled to basic TRA. TRA 
benefits are not payable to workers participating in on-the-job 
training.
    The eligibility period for collecting basic TRA is the 104-
week period that immediately follows the week in which a total 
qualifying separation occurs. If the worker has a subsequent 
total qualifying separation under the same certification, the 
eligibility period for basic TRA moves from the prior 
eligibility period to 104 weeks after the week in which the 
subsequent total qualifying separation occurs.
    A worker may receive up to 26 additional weeks of TRA 
benefits after collecting basic benefits (up to a total maximum 
of 78 weeks) if that worker is participating in approved 
training. To receive the additional benefits, the worker must 
apply for the training program within 210 days after 
certification or first qualifying separation, whichever date is 
later. Additional benefits may be paid only during the 26-week 
period that either follows the last week of entitlement to 
basic TRA or that begins with the first week of training if the 
training begins after the exhaustion of basic TRA.
    A worker participating in approved training continues to 
receive basic and additional TRA payments during breaks in such 
training if the break does not exceed 14 days or if the worker 
was participating in the training before the beginning of the 
break, resumes participation in the training after the break 
ends, and the break is provided for in the training schedule. 
Weeks when TRA is not payable because of this break provision 
count against the eligibility periods for both basic and 
additional TRA. Total annual outlays, the number of recipients, 
and average weekly benefits since 1975 for trade readjustment 
allowances are summarized in table 6-3.

 TABLE 6-3.--TOTAL OUTLAYS FOR TRADE READJUSTMENT ALLOWANCES, NUMBER OF 
RECIPIENTS, AND AVERAGE WEEKLY PAYMENTS AND DURATION, FISCAL YEARS 1975-
                                   97                                   
------------------------------------------------------------------------
                                                   Total       Average  
                                      Total      number of      weekly  
           Fiscal year               outlays     recipients  payment per
                                    (millions)  (thousands)   recipient 
------------------------------------------------------------------------
1975 (4th quarter)...............          $71           47          $58
1976 \1\.........................           79           62           47
1977.............................          148          111           57
1978.............................          257          155           68
1979.............................          256          132           70
1980.............................        1,622          532          126
1981.............................        1,440          281          140
1982.............................          103           30          119
1983.............................           37           30          120
1984.............................           35           16          139
1985.............................           40           20          133
1986.............................          118           40          144
1987.............................          208           55          155
1988.............................          186           47          165
1989.............................          125           24          175
1990.............................           93           19          164
1991.............................          116           25          169
1992 \2\.........................           43            9          163
1993.............................           51           10          157
1994.............................          120           31          181
1995.............................          143           24          193
1996.............................          166           31          197
1997 (preliminary)...............          183           31         192 
------------------------------------------------------------------------
\1\ Fiscal year 1976 is the first full year of experience under the     
  program as amended by the Trade Act of 1974.                          
\2\ The 1992 figures for TRA recipients and outlays are abnormally low  
  because of Extended Unemployment Compensation (EUC) payments that were
  made to eligible workers in lieu of TRA payments. Average duration    
  figures for 1992 are not available.                                   
                                                                        
Note.--The above figures relate only to trade readjustment allowances;  
  administrative expenses and outlays for employment services, training,
  and job search and relocation allowances are not included.            
                                                                        
Source: Department of Labor.                                            

  Training and Other Employment Services, Job Search, and Relocation 
                               Allowances

    Training and other employment services and job search and 
relocation allowances are available through State agencies to 
certified workers whether or not they have exhausted UI 
benefits and become eligible for TRA payments.
    Employment services consist of counseling, vocational 
testing, job search and placement, and other supportive 
services, provided for under any other Federal law.
    Training, preferably on the job, must be approved for a 
worker if the following six conditions are met:
 1. There is no suitable employment available;
 2. The worker would benefit from appropriate training;
 3. There is a reasonable expectation of employment following 
        training completion;
 4. Approved training is reasonably available from government 
        agencies or private sources;
 5. The worker is qualified to undertake and complete such 
        training; and
 6. Such training is suitable for the worker and available at 
        reasonable cost.
    If training is approved, the worker is entitled to payment 
of the costs by the Secretary directly or through a voucher 
system unless they have been paid or are reimbursable under 
another Federal law. On-the-job training costs are payable only 
if such training is not at the expense of currently employed 
workers. The 1988 amendments added remedial education as a 
separate and distinct approvable training program.
    The OTCA amendments converted training from an entitlement 
to the extent appropriated funds were available, to an 
entitlement without regard to the availability of funds to pay 
the training costs. As of the 1988 amendments, approved 
training is an entitlement in any case where the six criteria 
for approval are reasonably met, up to a $80 million statutory 
ceiling on annual fiscal year training costs (including job 
search and relocation allowances and subsistence payments) 
payable from TAA funds. Up to this limit workers are entitled 
to have the costs of approved training paid on their behalf. If 
the Secretary foresees that the $80 million ceiling would be 
exceeded in any fiscal year, the Secretary will decide how 
remaining TAA funds are apportioned among the States for the 
balance of that year.
    Costs of approved TAA training may be paid solely from TAA 
funds, solely from other Federal or State programs or private 
funds, or from a mix of TAA and public or private funds, unless 
the worker in the case of a nongovernmental program would be 
required to reimburse any portion of the costs from TAA funds. 
Duplicate payment of training costs is prohibited, and workers 
are not entitled to payment of training costs from TAA funds to 
the extent these costs are paid from or shared by other 
sources. Training may still be approved if the fiscal year TAA 
funding entitlement limit is reached provided the training 
costs are paid from outside sources.
    Supplemental assistance is available to defray reasonable 
transportation and subsistence expenses when training is not 
within the worker's commuting distance. This assistance is 
equal to the lesser of actual per diem expenses or 50 percent 
of the prevailing Federal per diem rate for subsistence and 
prevailing mileage rates under Federal regulations for travel 
expenses.
    Job search allowances are available to certified workers 
who cannot obtain suitable employment within their commuting 
area, who are totally laid off, and who apply within 1 year 
after certification or last total layoff, whichever is later, 
or within 6 months after concluding training. The allowance for 
reimbursement is equal to 90 percent of necessary job search 
expenses, based on the same increased supplemental assistance 
rates described above, up to a maximum amount of $800. The 
Secretary of Labor is required to reimburse workers for 
necessary expenses incurred to participate in an approved job 
search program.
    Relocation allowances are available to certified workers 
totally laid off at time of relocation who have been able to 
obtain an offer of or actual suitable employment only outside 
their commuting area, who apply within 14 months after 
certification or last total layoff, whichever is later, or 
within 6 months after concluding training, and whose relocation 
takes place within 6 months after application of completion of 
training. The allowance is equal to 90 percent of reasonable 
and necessary expenses for transporting the worker, family, and 
household effects, based on the same increased supplemental 
assistance rates described above, plus a lump sum payment of 
three times the worker's average weekly wage up to a maximum 
amount of $800. Table 6-4 provides a summary of training, job 
search, and relocation allowances since 1975.

 TABLE 6-4.--TRAINING, JOB SEARCH, AND RELOCATION ALLOWANCES: TOTAL NUMBER OF WORKERS AND OUTLAYS, FISCAL YEARS 
                                                     1975-97                                                    
----------------------------------------------------------------------------------------------------------------
                                                                           Total number                         
                                                             ---------------------------------------    Total   
                         Fiscal year                            Entered                                outlays  
                                                                training    Job search   Relocation   (millions)
----------------------------------------------------------------------------------------------------------------
1975 (4th quarter)..........................................          463          158           44  ...........
1976........................................................          823           23           26         $2.7
1977........................................................        4,213          277          191          4.0
1978........................................................        8,337        1,072          631         12.8
1979........................................................        4,456        1,181          855         13.5
1980........................................................    \1\ 9,475          931          629          6.0
1981........................................................   \1\ 20,366        1,491        2,011          2.4
1982........................................................        5,844          697          662         19.4
1983........................................................       11,299          696        3,269         36.0
1984........................................................        6,821          799        2,220         17.0
1985........................................................        7,424          916        1,692         30.2
1986........................................................       12,229        1,276        2,292         28.6
1987........................................................       22,888        1,709        1,537         49.9
1988........................................................        9,538        1,156        1,347         54.4
1989........................................................       17,042          863          989         62.6
1990........................................................       18,057          565        1,245         57.6
1991........................................................       20,093          525          759         64.9
1992........................................................       18,582          594          751         70.2
1993 \2\....................................................       19,467          802        2,063         80.0
1994........................................................       26,484          671        2,306         98.9
1995........................................................       26,447          861        1,565         97.8
1996........................................................       34,619          719          841         96.6
1997 (preliminary)..........................................       23,598          364          612         85.1
----------------------------------------------------------------------------------------------------------------
\1\ Of total workers entering training, 5,640 (59 percent) in 1980 and 18,940 (94 percent) in 1981 self-financed
  their training costs.                                                                                         
\2\ Fiscal year 1993 data are revised.                                                                          
                                                                                                                
Source: Department of Labor.                                                                                    

                       NAFTA WORKER SECURITY ACT

    Subchapter D of chapter 2 (section 250) of title II of the 
Trade Act of 1974 establishes a North American Free Trade 
Agreement (NAFTA) Transitional Adjustment Assistance Program 
for Workers who may be adversely impacted by the NAFTA. Import-
impacted workers may also petition for assistance under TAA, 
but cannot obtain benefits under both programs. Assistance 
under subchapter D shall terminate after the earlier of 
September 30, 1998, or the date on which legislation 
establishing a program providing all dislocated workers with 
comprehensive assistance substantially similar to the 
assistance provided under subchapter D becomes effective.
    A group of workers (including workers in any agricultural 
firm) shall be certified as eligible to apply for adjustment 
assistance under subchapter D if the Secretary determines that 
a significant number or proportion of the workers in the firm 
or subdivision of the firm have become or are threatened to 
become totally or partially separated, and either:
 1. Sales and/or production of the firm or subdivision have 
        decreased absolutely, imports from Mexico or Canada of 
        articles like or directly competitive with articles 
        produced by such firm or subdivision have increased, 
        and the increase in imports contributed importantly to 
        the workers' separation or threat of separation and to 
        the decline in the sales or production of the firm or 
        subdivision; or
 2. There has been a shift in production by the workers' firm 
        or subdivision to Mexico or Canada of articles like or 
        directly competitive with articles produced by the firm 
        or subdivision.
    A group of workers or their union or other duly authorized 
representative may file a petition for certification of 
eligibility to apply for adjustment assistance under subchapter 
D with the Governor of the State in which the worker's firm or 
subdivision is located. Upon receipt of the petition, the 
Governor must notify the Secretary of Labor. Within 10 days, 
the Governor must make a preliminary finding as to whether the 
petition meets the certification criteria and transmit the 
petition, together with a statement of the finding and reasons 
therefore, to the Secretary for action. If the preliminary 
finding is affirmative, the Governor will ensure that rapid 
response and basic readjustment services authorized under other 
Federal law are made available to the workers.
    Within 30 days after receiving the petition, the Secretary 
must determine whether the petition meets the certification 
criteria. Upon an affirmative determination, the Secretary will 
issue to workers covered by the petition a certification of 
eligibility to apply for comprehensive assistance. Upon denial 
of certification, the Secretary will review the petition to 
determine if the workers meet the requirements of the TAA 
Program for certification.
    Certified workers under the NAFTA Program receive 
employment services, training, trade readjustment allowances, 
and job search and relocation allowances in the same manner and 
to the same extent as workers covered under a TAA 
certification, with the following exceptions: (1) the total 
amount of payments for training costs for any fiscal year do 
not exceed $30 million; (2) with respect to TRA benefits, the 
authority of the Secretary of Labor to waive the training 
requirement does not apply with respect to payments under 
subchapter D; and (3) to receive TRA benefits, the worker must 
be enrolled in a training program approved by the Secretary by 
the later of the last day of the 16th week following the 
worker's most recent qualifying separation or the last day of 
the 6th week after the week in which the Secretary issues a 
certification covering the worker. In extenuating 
circumstances, the Secretary may extend the time for enrollment 
by not more than 30 days.
    The NAFTA Program took effect on January 1, 1994. No worker 
can be certified as eligible to receive assistance under 
subchapter D whose last total or partial separation occurred 
before January 1, 1994, except workers whose last layoff 
occurred after December 8, 1993 (the date of enactment of the 
NAFTA Implementation Act), and before January 1, 1994, who 
would otherwise be eligible to receive assistance under 
subchapter D.
    For fiscal year 1996, $66.5 million has been appropriated 
for NAFTA trade adjustment assistance.

                   FUNDING OF TAA AND NAFTA PROGRAMS

    Federal funds, as an annual appropriated entitlement from 
general revenues under the Federal Unemployment Benefits and 
Allowances Account (FUBA), cover the worker's total entitlement 
represented by the continuation of UI benefit levels in the 
form of TRA payments. Federal funds also cover payments for 
training, job search, and relocation allowances, as well as 
State-related administrative expenses. Funds made available 
under grants to States defray expenses of any employment 
services and other administrative expenses. For fiscal year 
1996, $279.6 million was appropriated for TAA Program benefit 
allowances and $66.5 million was appropriated for the NAFTA 
Program and related administrative expenses.
    States are reimbursed from general revenues for benefit 
payments and other costs incurred under the program. A penalty 
under section 239 of the Trade Act of 1974 provides for 
reduction by 15 percent of the credits for State unemployment 
taxes which employers are allowed against their liability for 
Federal unemployment tax if a State has not entered into or has 
not fulfilled its commitments under a cooperative agreement.

             TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR FIRMS

    Sections 251-64 of the Trade Act of 1974, as amended, 
contain the procedures, eligibility requirements, benefit terms 
and conditions, and administrative provisions of the Trade 
Adjustment Assistance Program for Firms adversely impacted by 
increased import competition. The program is administered by 
the Economic Development Administration within the Department 
of Commerce. Amendments in 1986 under Public Law 99-272 
eliminated financial assistance (direct loan or loan guarantee) 
benefits, increased government participation in technical 
assistance, and expanded the criteria for firm certification.
    Program benefits consist exclusively of technical 
assistance for petitioning firms which qualify under a two-step 
procedure: (1) certification by the Secretary of Commerce that 
the petitioning firm is eligible to apply, and (2) approval by 
the Secretary of Commerce of the application by a certified 
firm for benefits, including the firm's proposal for economic 
adjustment.
    To certify a firm as eligible to apply for adjustment 
assistance, the Secretary must determine that three conditions 
are met:
 1. A significant number or proportion of the workers in the 
        firm have been or are threatened to be totally or 
        partially laid off;
 2. Sales and/or production of the firm have decreased 
        absolutely, or sales and/or production that accounted 
        for at least 25 percent of total production or sales of 
        the firm during the 12 months preceding the most recent 
        12-month period for which data are available have 
        decreased absolutely; and
 3. Increased imports of articles like or directly competitive 
        with articles produced by the firm have ``contributed 
        importantly'' to both the layoffs and the decline in 
        sales and/or production.
    The 1988 amendments expanded potential eligibility coverage 
of the program to include firms that engage in exploration or 
drilling for oil or natural gas. Unlike the TAA Worker Program, 
this extension applies only prospectively after August 23, 
1988.
    A certified firm may file an application with the Secretary 
of Commerce for trade adjustment assistance benefits at any 
time within 2 years after the date of the certification of 
eligibility. The application must include a proposal by the 
firm for its economic adjustment. The Secretary may furnish 
technical assistance to the firm in preparing its petition for 
certification or in developing a viable economic adjustment 
proposal.
    The Secretary approves the firm's application for 
assistance only if he determines that its adjustment proposal: 
(a) is reasonably calculated to make a material contribution to 
the economic adjustment of the firm; (b) gives adequate 
consideration to the interests of the workers in the firm; and 
(c) demonstrates that the firm will make all reasonable efforts 
to use its own resources for economic development.

                                Benefits

    Technical assistance may be given to implement the firm's 
economic adjustment proposal in addition to, or in lieu of, 
precertification assistance or assistance in developing the 
proposal. It may be furnished through existing government 
agencies or through private individuals, firms, and 
institutions (including private consulting services), or by 
grants to intermediary organizations, including regional Trade 
Adjustment Assistance Centers. As amended by Public Law 99-272 
in 1986, the Federal Government may bear the full cost of 
technical assistance to a firm in preparing its petition for 
certification. However, the Federal share cannot exceed 75 
percent of the cost of assistance furnished through private 
individuals, firms, or institutions for developing or 
implementing an economic adjustment proposal. Grants may be 
made to intermediate organizations to defray up to 100 percent 
of their administrative expenses in providing technical 
assistance.
    The Secretary of Commerce also may provide technical 
assistance of up to $10 million annually per industry to 
establish industrywide programs for new product or process 
development, export development, or other uses consistent with 
adjustment assistance objectives. The assistance may be 
furnished through existing agencies, private individuals, 
firms, universities, and institutions, and by grants, 
contracts, or cooperative agreements to associations, unions, 
or other nonprofit organizations of industries in which a 
substantial number of firms or workers have been certified.

                                Funding

    Funds to cover all costs of the program are subject to 
annual appropriations to the EDA of the Department of Commerce 
from general revenues. For fiscal year 1996, a total of $8.5 
million was appropriated for the program.

                          LEGISLATIVE HISTORY

    The Trade Adjustment Assistance (TAA) Programs were first 
established under the Trade Expansion Act of 1962 for the 
purpose of assisting in the special adjustment problems of 
workers and firms dislocated as a result of a Federal policy of 
reducing barriers to foreign trade. As a result of limited 
eligibility and usage of the programs, criteria and benefits 
were liberalized under title II of the Trade Act of 1974, 
Public Law 93-618. The Omnibus Budget Reconciliation Act of 
1981 (OBRA), Public Law 97-35, reformed the Program for 
Workers. The amendments, particularly in program eligibility 
and benefits, were intended to reduce program cost 
significantly and to shift its focus from income compensation 
for temporary layoffs to return to work through training and 
other adjustment measures for the long-term or permanently 
unemployed. The OBRA also made relatively minor modifications 
in the Firm Program. Most amendments became effective on 
October 1, 1981. Both programs were extended at that time for 1 
year, to terminate on September 30, 1983.
    Public Law 98-120, approved on October 12, 1983, extended 
the Worker and Firm TAA Programs for 2 years, until September 
30, 1985. Sections 2671-2673 of the Deficit Reduction Act of 
1984, Public Law 98-369, included three provisions which 
amended the Program for Workers to increase the availability of 
worker training allowances and the level of job search and 
relocation benefits, and amended the Program for Firms to 
increase the availability of industrywide technical assistance.
    The termination date of the Worker and Firm TAA Programs 
was further extended under temporary legislation in the first 
session of the 99th Congress (Public Laws 99-107, 99-155, 99-
181, and 99-189) until December 19, 1985. The Consolidated 
Omnibus Budget Reconciliation Act of 1985 (COBRA), Public Law 
99-272, approved April 7, 1986, reauthorized the TAA Programs 
for Workers and Firms for 6 years retroactively from December 
19, 1985, until September 30, 1991, with amendments.
    Sections 1421-1430 of Public Law 100-418, the Omnibus Trade 
and Competitiveness Act of 1988 (OTCA), enacted on August 23, 
1988, made significant amendments in the Worker TAA Program, 
particularly concerning the eligibility criteria for cash 
benefits, funding, and administration. A training requirement 
as a condition for income support to encourage and enable 
workers to obtain early reemployment became effective as of 
November 21, 1988. This replaced a 1986 amendment that 
instituted a job search requirement as a condition for 
receiving cash benefits. The amendments also expanded TAA 
eligibility coverage of workers and firms, contingent upon the 
imposition of an import fee to fund program costs (statutory 
preconditions for imposition of an import fee were never met). 
Public Law 100-418 extended TAA Program authorization for an 
additional 2 years until September 30, 1993.
    Section 136 of the Customs and Trade Act of 1990, Public 
Law 101-382, approved on August 20, 1990, extended the 
completion and reporting period for the supplemental wage 
allowance demonstration projects for workers required by the 
1988 amendments. No other amendments affecting the TAA Programs 
were enacted in the 101st Congress. Section 106 of Public Law 
102-318, to extend the Emergency Unemployment Compensation 
Program, provided for weeks of active military duty in a 
reserve status (including service during Operation Desert 
Storm) to qualify toward the minimum number of weeks of prior 
employment required for TAA eligibility. No other changes were 
made to the program during the 102d Congress.
    Section 13803 of the Omnibus Budget Reconciliation Act 
(OBRA 1993) of 1993, Public Law 103-66, approved August 10, 
1993, reauthorized the TAA Programs for Workers and Firms for 
an additional 5 years through fiscal year 1998, with assistance 
to terminate on September 30, 1998. Section 13803 of the OBRA 
1993 also reduced the level of the ``cap'' on training 
entitlement funding from $80 million to $70 million for fiscal 
year 1997 only.
    Sections 501-6 of the North American Free Trade Agreement 
(NAFTA) Implementation Act, Public Law 103-182, approved 
December 8, 1993, set forth the ``NAFTA Worker Security Act,'' 
establishing the NAFTA Transitional Adjustment Assistance 
Program for Workers as a new subchapter D (section 250) under 
chapter 2 of title II of the Trade Act of 1974. That special 
program went into effect on January 1, 1994, and will terminate 
on the earlier of September 30, 1998, or the date a comparable 
comprehensive dislocated worker program becomes effective.