[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]
SECTION 6 - TRADE ADJUSTMENT ASSISTANCE
CONTENTS
Overview
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
Health Coverage Tax Credit
Alternative Trade Adjustment Assistance for Older Workers
NAFTA Worker Security Act
Funding of TAA and NAFTA Programs
Trade Adjustment Assistance Program for Firms
Benefits
Funding
Trade Adjustment Assistance Program for Farmers
Legislative History
OVERVIEW
Federal assistance is offered to workers, firms, and farmers that are
affected adversely by foreign trade. This assistance is provided
through four programs which are discussed below. Two of these
programs aid displaced workers and are administered by the U.S.
Department of Labor. The older of the two, Trade Adjustment Assistance
for Workers (TAA), originated in 1962 and was revamped by the Trade
Act of 1974 and again by the Trade Act of 2002. The North American
Free Trade Agreement (NAFTA) Implementation Act in 1993 authorized a
somewhat different version of this program to aid workers who lost
their jobs because of trade with Canada or Mexico or plant relocation
to either of those countries, but this program was closed to new
participants when TAA was reformed in 2002. The third program, Trade
Adjustment Assistance for Firms, is administered by the U.S. Department
of Commerce and offers technical assistance to firms designed to
improve their capability to compete with imported goods. Trade
Adjustment Assistance for Farmers is a new program aimed at
addressing low farm prices caused at least partly by imports.
TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR WORKERS
Trade Adjustment Assistance for Workers under sections 221-49 of the
Trade Act of 1974, as amended, consists of these benefits for
certified and otherwise qualified workers: trade readjustment
allowances (TRA), employment services, training and additional TRA
while in training, job search and relocation allowances, and
assistance in paying health insurance premiums. (In general, benefits
identified in this chapter as newly introduced by the Trade Act of
2002 are available only to workers in groups that submitted their
petitions for certification on or after November 4, 2002, but the
health insurance assistance was available to those eligible for TAA
in December 2002.) 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 TAA: (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 when
a group of three or more workers, their union or authorized
representative, their employer, or a one-stop operator or partner files
a petition with the ETA and the Governor of the State for certification
of group eligibility. To certify a petitioning group of workers
as eligible to apply for adjustment assistance under prior law, the
Secretary previously had to determine that three conditions were met:
1. A significant number or proportion of the workers in the firm or
subdivision of the firm has been or is 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 Trade Act of 2002 expanded the potential eligibility coverage to
include workers in any firm or subdivision of a firm that shifts
production to certain other countries. This provision was previously
extended by the NAFTA-Transitional Adjustment Assistance (NAFTA-TAA)
program only to firms that moved to Canada or Mexico. The new law
includes countries that have signed a free trade agreement with the
United States and beneficiary countries receiving preferential
treatment. It also extends eligibility to workers in these firms if
there has been or is likely to be an increase in imports of articles
like or directly competitive with those they produced.
TABLE 6-1--NUMBER OF PETITIONS INSTITUTED AND CERTIFIED AND ESTIMATED
NUMBER OF WORKERS PETITIONING AND CERTIFIED FOR TAA, 1975-2002
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The newly expanded program also extends eligibility to adversely
affected secondary workers in firms that are either upstream suppliers
or downstream producers. The articles produced by upstream workers must
be component parts of the articles that were the basis for the primary
firm's certification of eligibility for TAA. Downstream workers must
directly perform additional, value-added production processes,
including final assembly or finishing, on the products of the primary
firm. An additional eligibility requirement for downstream producers is
that the primary firm's certification must be based on increased imports
from or a shift in production to Canada or Mexico.
Upon receipt of a petition, the State must ensure that rapid
response assistance and appropriate core and intensive employment
services are made available to the workers to the extent authorized
under the Workforce Investment Act of 1998. The State also is required
to assist the ETA in the review of the petition. The Secretary is
required to make the eligibility determination within 40 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.
TABLE 6-2--ESTIMATED NUMBER OF WORKERS CERTIFIED BY MAJOR INDUSTRIES,
FY 1975-2002
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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 also must advise each
adversely affected worker, at the time that the worker applies for
unemployment compensation (UC), of TAA 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 that the worker applies for TRA benefits
and promptly interview each certified worker and review suitable
training opportunities that are 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 TRA 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
workers' compensation and weeks of active duty in a military reserve
status also may count toward the 26-week minimum.
3. The worker was entitled to UC, has exhausted all rights to any UC
entitlement, including any extended benefits or Federal supplemental
compensation (if in existence), and does not have an unexpired waiting
period for any UC.
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 UC 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.
5. In order to receive basic TAA payments, 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 unless the Secretary has determined
and submitted a written statement to the individual worker certifying
that approval of training is not "feasible or appropriate" for one of
the six reasons specified in the 2002 Act: likelihood of recall,
possession of marketable skills, proximity to retirement age, poor
health, unavailability of timely enrollment, or unavailability of
suitable training. 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 Omnibus Trade and
Competitiveness Act (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. Waivers from
the training requirement were granted completely at the discretion of
the Secretary of Labor until the Trade Act of 2002 specified criteria
for the waivers and set the duration at 6 months unless the Secretary
determines otherwise.
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, or (b) the first
week after the employee is totally separated from work. 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 UC payable to that worker preceding that worker's first exhaustion
of UC following the worker's first total qualifying separation under
the certification, reduced by any Federal training allowance and
disqualifying income deductible under UC 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 UC benefits to
which the worker was entitled in the benefit period in which the first
qualifying separation occurred. For example, a worker receiving 39
weeks of UC regular and extended benefits could receive a maximum 13
weeks of basic TRA benefits. UC 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. The 2002 Act extends
this additional period another 26 weeks for those in training and a
further 26 weeks for those in need of remedial education (making the
new maximum 130 weeks). 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 (52-week or 78-week under
the new program) period that follows either the last week of
entitlement to basic TRA or the last week before training begins, if
training begins after 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 (30 days under the new TAA) and 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 designated 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. Annual outlays,
number of recipients, and average weekly benefits for TRAs are
presented in Table 6-3.
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 UC 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 workers are 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 OTCA amendments in 1988
added remedial education as a separate and distinct approvable
training program, and the Trade Act of 2002 went further in
authorizing an additional 26 weeks of training and TRA support for
such education. As of the 1988 amendments, approved training is an
entitlement in any case in which the six criteria for approval are
reasonably met, up to an $80 million statutory ceiling on annual
fiscal year training costs (including job search and relocation
allowances and subsistence payments) payable from TAA funds. The
2002 Act raised this ceiling to $220 million. Up to this limit,
workers are entitled to have the costs of approved training paid on
their behalf. If the Secretary foresees that the $220 million ceiling
will 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.
TABLE 6-3--TOTAL OUTLAYS FOR TRADE READJUSTMENT ALLOWANCES, NUMBER OF
RECIPIENTS, AND AVERAGE WEEKLY PAYMENTS AND DURATION, FY 1975-2002
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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 still may 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 expenses or 50 percent of the prevailing Federal
per diem rate for subsistence and 100 percent of the 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 ($1,250 under the new TAA). 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
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 for the
relocation allowance. 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 ($1,250 under the new TAA). Table 6-4 provides a summary of
training, job search, and relocation allowances since 1975.
HEALTH COVERAGE TAX CREDIT
The Trade Act of 2002 created a Federal tax credit which subsidizes
private health insurance coverage for displaced workers certified to
receive TAA benefits. The tax credit covers 65 percent of the premiums
paid by the worker for qualified health insurance. This credit is
referred to as the Health Coverage Tax Credit (HCTC), and the Internal
Revenue Service is responsible for its administration. The HCTC is
advanceable, meaning that workers can receive the credit when
purchasing insurance rather than receiving it after filing their tax
returns. The HCTC is also refundable; eligible workers can receive the
credit even if they have zero tax liability for the year. To be
eligible for the HCTC, a worker must be (1) a recipient of a TRA;
(2) an individual certified for TAA benefits who is not yet eligible
to receive a TRA because she or he has not exhausted all rights to
UC; or (3) a participant receiving benefits under the new Alternative
Trade Adjustment Assistance program described in the next section.
TABLE 6-4--TRAINING, JOB SEARCH, AND RELOCATION ALLOWANCES: TOTAL
NUMBER OF WORKERS AND OUTLAYS, FY 1975-2002
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The HCTC can be used for limited types of health insurance. It can be
applied towards premiums paid to continue employer-sponsored health
insurance under the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA). The HCTC also can be used to purchase an individual
health insurance policy (if the worker was covered by an individual
policy at least 30 days before becoming unemployed) or to purchase a
group policy offered through a spouse's employer. An eligible worker
can use the credit to purchase various types of State-based insurance
coverage, such as coverage through a State-sponsored high-risk pool,
coverage through a health insurance program offered to State employees,
and coverage through an arrangement between private entities and the
State. State-based coverage must be guaranteed issue (i.e., a plan
must be offered to all who apply), cannot limit coverage due to
pre-existing conditions, cannot charge higher premiums than those
charged to individuals who do not receive the HCTC, and must offer
the same benefits as those provided to individuals who do not receive
the HCTC.
ALTERNATIVE TRADE ADJUSTMENT ASSISTANCE FOR OLDER
WORKERS
The 2002 Act also established a 5-year demonstration project for
alternative trade adjustment assistance (ATAA) for older workers.
This program is effective for petitions filed on or after August 6,
2003. Petitioners who request that workers be certified for the ATAA
program must request both certifications (TAA and ATAA) at the same
time. ATAA is designed to allow TAA-eligible workers for whom
retraining may not be appropriate and who find reemployment at a
lower wage to receive a wage subsidy to help bridge the salary gap
between their old and new employment.
In order to establish that petitioning workers are eligible to apply
for the ATAA program, the Secretary of Labor first must determine
that all of the criteria listed above for a regular TAA certification
are met. The following three additional criteria must be met for ATAA
certification:
1. A significant number of adversely affected workers in the
petitioning workers' firm are 50 years of age or older;
2. The adversely affected workers in the petitioning workers' firm
possess job skills that are not easily transferable to other
employment; and
3. The competitive conditions within the affected workers' industry
are adverse.
Once an individual worker's company has been certified for ATAA as
well as TAA, there is another set of eligibility requirements to be met
before the benefits will be paid to the worker. The individual must be
at least 50 years of age and obtain full-time employment making less
than $50,000 a year within 26 weeks of the date of separation from the
adversely affected employment. The worker may not return to that
affected employment.
An eligible worker is entitled to receive half the difference between
the wages received from reemployment and the wages received at the
time of the qualifying separation for a period up to 2 years, but the
payments may not exceed $10,000 over the 2-year eligibility period. The
participant may receive the relocation allowance and the tax credit for
health insurance premiums, but all rights to retraining, allowances,
and TRA are forfeited with receipt of the initial ATAA payment. A
worker who wants to receive the HCTC and intends to choose the ATAA
must apply for a waiver from the required training in order to maintain
eligibility for TAA and the HCTC.
NAFTA WORKER SECURITY ACT
The NAFTA Worker Security Act, passed as part of the North American
Free Trade Agreement Implementation Act in 1993, established a NAFTA
Transitional Adjustment Assistance program for workers adversely
impacted by the NAFTA. Import-impacted workers also were able to
petition for assistance under TAA but could not obtain benefits
under both programs. The NAFTA-TAA program was repealed by the TAA
Reform Act of 2002. Petitions for NAFTA-TAA were accepted until
November 3, 2002. Workers certified under any petitions received before
November 4, 2002, even if the certifications were made after that
date, are eligible for services under the NAFTA-TAA program. Funds will
be available to cover NAFTA-TAA-certified workers until their
eligibility period runs out.
FUNDING OF TAA AND NAFTA PROGRAMS
Federal funds, as an annual appropriated entitlement from general
revenues under the Federal Unemployment Benefits and Allowances
Account, cover the worker's total entitlement represented by the
continuation of UC 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.
States are reimbursed from general revenues for benefit payments and
other costs incurred under the program. A penalty first introduced by
section 239 of the Trade Act of 1974 provided 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. The Tax Equity & Fiscal Responsibility Act of
1982 reduced this penalty to 7.5 percent.
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 TAA 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 lay offs 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
applied only prospectively after August 23, 1988.
A certified firm may file an application with the Secretary of Commerce
for TAA 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 it
is determined that the firm's 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 TAA 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 industry-wide
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 Economic Development Administration of the
Department of Commerce from general revenues. The Trade Act of 2002
authorized $16 million per year through 2007 for this program.
TRADE ADJUSTMENT ASSISTANCE PROGRAM FOR FARMERS
A new TAA for Farmers program was established by the Trade Act of 2002.
Although proposed rules have been issued by the U.S. Department of
Agriculture (USDA), they had not yet been finalized at the time of
publication of this chapter. Under this program, a group of
agricultural producers can petition the Secretary of Agriculture to be
certified as eligible for TAA. The Secretary will then have 40 days
to determine whether the national average price for the affected
commodity or class of goods from that commodity (for the most recent
marketing year) was less than 80 percent of the average price for the
5 marketing years preceding the most recent year, and imports of
''articles like or directly competitive with'' the commodity in
question ''contributed importantly'' to the price decline. If a
determination were so made, each member of the eligible group would
have 90 days to apply to the Secretary for a cash payment equal to:
one-half of the difference between the most recent year's national
average price and 80 percent of the preceding 5 marketing years,
times his or her production for the year. An individual commodity
producer's benefits under the program will be limited to $10,000 in
any 12-month period, and all claims are to be decreased
proportionately, if necessary, to ensure that the total national
cost of the program does not exceed the annual funding level,
which the legislation sets at $90 million (for each fiscal year,
2003 through 2007).
An applicant's net farm income (as determined by the USDA) for the most
recent year must be less than his or her net farm income for the latest
year in which no adjustment assistance was received. Those with average
adjusted gross income above $2.5 million per year are ineligible if less
than 75 percent of that income is from farming, ranching, or forestry.
The applicant also must certify that he or she has met with an
Extension Service agent to obtain information and technical
assistance on how to adjust to import competition, including improving
competitiveness in producing and marketing the import-affected
commodity, and possibly shifting to an alternative commodity. Payment
recipients cannot receive cash benefits under any other TAA program.
However, they are permitted (but not required, as are other workers)
to use other job training and related employment services offered
through the TAA programs.
LEGISLATIVE HISTORY
The 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 (OBRA) of 1981, 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, 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 (OTCA) of 1988, 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. 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.
Section 13803 of OBRA 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 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, with a termination date
of the earlier of September 30, 1998, or the date that a comparable
comprehensive dislocated worker program became effective.
Following the expiration of the TAA Programs' authorizations on
September 30, 1998, they were extended through June 30, 1999, by
section 1012 of the Omnibus Consolidated and Emergency Supplemental
Appropriations Act for fiscal year 1999 (Public Law 105-277), enacted
October 21, 1998. After this 9-month extension expired, the programs
were continued through September 30, 2001, by section 702 of the
Consolidated Appropriations Act for fiscal year 2000 (Public Law
106-113), enacted November 29, 1999. At the beginning of fiscal year
2002, eight continuing resolutions kept the programs authorized through
January 10, 2002. Debate on TAA reform continued after this expiration
until the passage of the Trade Act of 2002 (Public Law 107-210), which
became law on August 6, 2002, and authorizes the TAA programs through
fiscal year 2007.