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.