Trade Adjustment Assistance for Workers, Workforce Investment Act; Amendment of Regulations

DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Parts 617, 618, 665, 671

RIN 1205-AB32

Trade Adjustment Assistance for Workers, Workforce Investment Act; Amendment of Regulations

AGENCY:

Employment and Training Administration, Labor.

ACTION:

Notice of Proposed Rule Making (NPRM).

SUMMARY:

On August 6, 2002, President Bush signed into law the Trade Adjustment Assistance Reform Act of 2002 (the Reform Act), which amended the Trade Act of 1974, as amended (Act or Trade Act). The Reform Act reauthorized the Trade Adjustment Assistance (TAA) program through fiscal year 2007 and made significant amendments to the TAA program, which generally took effect on November 4, 2002. The Employment and Training Administration (ETA) of the United States Department of Labor (Department or DOL) is publishing this proposed rule to implement the amended TAA program.

DATES:

The Department invites written comments on this proposal. Comments must be submitted by October 24, 2006.

ADDRESSES:

You may submit written comments, identified by the proposed rule's Regulatory Identification Number (RIN) 1205-AB32, on the proposed rules by any of the following methods:

•

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

•

E-mail: regulations.TAA@dol.gov.

Include RIN 1205-AB32 in the subject line of the message. Your comment must be in the body of the e-mail message; do not send attached files.

•

Fax:

(202) 693-3584 (this is not a toll-free number). Only comments of ten or fewer pages (including a Fax cover sheet and attachments, if any) will be accepted by Fax.

•

Mail:

Submit comments (preferably with three copies) to Erica Cantor, Director, Division of Trade Adjustment Assistance, ETA, U.S. Department of Labor, Room C-5311, 200 Constitution Avenue, NW., Washington, DC 20210. Because of security-related concerns, there may be a significant delay in the receipt of submissions by United States Mail. You must take this into consideration when preparing to meet the deadline for submitting comments.

Instructions:

All submissions received must include the agency name and the RIN for this rulemaking: RIN 1205-AB32. If commenters transmit comments by Fax or through the Internet and also submit a hard copy by mail, please indicate that it is a duplicate copy of the Fax or Internet transmission.

All comments will be available for public inspection and copying during normal business hours at the Division of Trade Adjustment Assistance, ETA, U.S. Department of Labor, 200 Constitution Avenue, NW., Room C-5311, Washington, DC 20210. Copies of the proposed rule are available in alternative formats of large print and electronic file on computer disk, which may be obtained at the above-stated address. The proposed rule is available on the Internet at the Web address

http://www.doleta.gov.

FOR FURTHER INFORMATION CONTACT:

Erica Cantor, Director, Division of Trade Adjustment Assistance, ETA, U.S. Department of Labor, 200 Constitution Avenue, NW., Room C-5311, Washington, DC 20210. Telephone: (202) 693-3560 (voice) (this is not a toll-free number); 1-800-326-2577 (TDD); facsimile: (202) 693-3584; e-mail:

regulations.TAA@dol.gov.

SUPPLEMENTARY INFORMATION:

The Reform Act expanded the scope of the TAA program and increased benefit amounts available under that program, repealed the North American Free Trade Agreement Transitional Adjustment Assistance (NAFTA-TAA) program, provided a health coverage tax credit (HCTC) administered by the Internal Revenue Service (IRS) to subsidize private health insurance costs for qualified workers, and enacted a pilot program for Alternative Trade Adjustment Assistance for older workers (ATAA). These amendments were designed to augment and improve the delivery of benefits and services to certain workers adversely affected by foreign trade.

To incorporate into regulations the substantial changes to the TAA program, including the introduction of ATAA, the Department proposes creating a new 20 CFR Part 618. The proposed Part 618 consists of nine subparts: subpart A—General; subpart B—Petitions and Determinations of Eligibility to Apply for Trade Adjustment Assistance [Reserved]; subpart C—Delivery of Services through the One-Stop Delivery System; subpart D—Job Search Allowances; subpart E-Relocation Allowances; subpart F—Training Services; subpart G—Trade Readjustment Allowances (TRA); subpart H—Administration by Applicable State Agencies; and subpart I—Alternative Trade Adjustment Assistance for Older Workers [Reserved]. Because of the complexity of the subject matter and the States' need for definitive instructions on providing TAA benefits, the rulemaking for Part 618 is divided into three parts. This Notice of Proposed Rulemaking covers the general provisions (subpart A) and TAA benefits portions (subpart C through subpart H) of the regulations. Separate notices of proposed rulemaking (RIN 1205-AB40 covering subpart I and RIN 1205-AB44 covering Subpart B) will be published at a later date.

Consistent with the Reform Act, the Department proposes that the TAA regulations codified at 20 CFR Part 617 be amended to apply only to adversely affected workers whose certifications of eligibility to apply for TAA are based on petitions filed before the effective date of the amendments, whether the certifications were issued before or after that date. However, eligible workers covered by Part 617 will be able to use the HCTC, and the Department proposes to amend Part 617 to require the States to advise adversely affected workers covered by that Part of the qualifying requirements for the HCTC and related health insurance assistance. The Department also proposes revising the regulations governing Statewide Workforce Investment Activities, and National Emergency Grants, 20 CFR Parts 665 and 671, respectively. These revisions will incorporate into the Workforce Investment Act of 1998 (WIA) regulations the new statutory requirement that States provide rapid response assistance to workers as soon as they have filed petitions, or petitions have been filed on their behalf, for certification of eligibility to apply for TAA. A new section will be added to Part 671 to incorporate the new statutory authority for the use of funds made available under WIA to make grants to provide health insurance coverage assistance to certain adversely affected workers under the Trade Act and others.

This preamble is divided into five sections. Section I provides general background information on the TAA program. Section II describes the changes that the Reform Act made to the TAA program. Section III discusses the Department's guiding principles for implementing reform of the TAA program through the proposed rule. Section IV discusses the proposed rule. Section V discusses administrative requirements for this proposed rulemaking, as mandated by statute and executive order.

I. Background

The Reform Act amended chapter 2 of title II of the Trade Act of 1974 (Pub. L. 93-618), as amended. The TAA program, established by the Act in 1974 to provide improved assistance for workers injured or threatened with injury from increased imports, was changed extensively by amendments in 1981 (title XXV of Pub. L. 97-35), 1984 (sections 2671 and 2672 of Pub. L. 98-369), 1986 (Part 1 of subtitle A of title XIII of Pub. L. 99-272), 1988 (Part 3 of subtitle D of title I of Pub. L. 100-418), and 1993 (section 506 of Pub. L. 103-182).

Before the TAA program's most recent amendment in August 2002, the Department conducted a fact-finding investigation in response to its receipt of a petition for TAA from a group of workers (or their representative). If the investigation resulted in the finding that a group of workers of a firm (or subdivision) had been adversely affected by import competition, then an ETA certifying officer issued a certification stating that workers in the identified worker group were eligible to apply for TAA benefits with the Cooperating State Agency (CSA).

Then, as now, State agencies administered the TAA program as agents of the federal government through agreements signed by the Secretary and Governors of the States. State agencies notified certified workers of potential TAA benefits and services, made eligibility determinations for individuals, and delivered benefits and services. Individual workers who were members of the certified worker group applied for benefits and services at a local office of the State's One-Stop delivery system.

Individual workers who met the qualifying criteria could receive up to 104 weeks of job training, generally up to 52 weeks of income support in the form of Trade Readjustment Allowances (TRA), job search allowances, and relocation allowances. In addition, all workers covered by a certification were eligible for basic reemployment services, including assistance in writing resumes, job referrals, and participation in job clubs.

On December 8, 1993, the President signed into law the NAFTA Implementation Act of 1993, which created the NAFTA-TAA program (section 250 of subchapter D of chapter 2 of title II of the 1974 Act). Certifications of worker groups under the NAFTA-TAA program were made only if imports from Canada and/or Mexico caused the import impact, or if the workers' firm shifted production of an article to either Canada or Mexico. Workers (or their representatives) filed petitions with the Governor of the State in which they were employed, not directly with the Department. The State performed a preliminary investigation upon receipt of a NAFTA-TAA petition. If the workers appeared to be impacted by imports from Canada or Mexico or a shift of production to Canada or Mexico and the firm's (or subdivision's) sales or production decreased absolutely, then the State undertook rapid response activities under WIA. The State transmitted all information gathered in its preliminary investigation to DOL, which issued the final determination on whether to certify the group of workers as eligible to apply for NAFTA-TAA benefits. In order to qualify for TRA, a worker certified under the NAFTA-TAA program had to be enrolled in approved training within specific time limits; no waivers from this requirement were allowed. However, the TAA program allowed waivers of “basic” TRA (

i.e.

, the first 26 weeks of TRA) if training was “not feasible or appropriate” for the worker.

As part of its passage of the NAFTA Implementation Act, Congress approved the Administration's Statement of Administrative Action (SAA). NAFTA, H.R. Doc. No. 103-159, vol. 1, at 10 (1993). The SAA committed the Department to provide assistance under the Job Training Partnership Act (and, after the repeal of that act, under WIA) to “secondary” workers who lost their jobs as a result of the loss of business with a primary firm that was directly affected by imports, but who were not directly impacted by trade with Canada or Mexico.

See id.

at 450 (1993). Workers would receive assistance if their firm supplied components to, or performed finishing operations for, a firm that was directly impacted by trade with Canada or Mexico. These “secondary workers” either filed a petition for certification under both the TAA program and the NAFTA-TAA program or filed a petition just under the NAFTA-TAA program. The Department initiated an investigation into their eligibility under the SAA if their certification was denied following the investigation of a NAFTA-TAA petition. The Department determined whether the worker group was impacted indirectly or “secondarily” by imports from Canada and/or Mexico or a shift of production to Canada or Mexico. If the Department made an affirmative determination, then workers in the group were eligible to apply for benefits and services delivered through the dislocated worker program, even though they did not qualify for assistance under the NAFTA-TAA program.

II. How the Reform Act Changed the TAA Program

The TAA program has been a required partner in the workforce investment system since the enactment of WIA in 1998. The Reform Act expressly directed the Secretary and the States to coordinate the TAA program with the workforce investment system created under WIA to help adversely affected workers return to the workforce as quickly as possible.

The Reform Act expanded the coverage of the TAA program and increased the benefits provided to adversely affected workers, in part by consolidating the TAA program and the NAFTA-TAA program. As a result, there is a uniform set of requirements that replaces the often different and confusing sets of rules and procedures that applied to the two programs when they were separate. Before the enactment of the Reform Act, only workers whose firms (or subdivisions) were directly affected by increased imports could be certified as eligible to apply for TAA. Eligibility requirements for the NAFTA-TAA program were more inclusive. Workers whose firms (or subdivision) were directly affected by either increased imports from or a shift in production to Mexico or Canada of an article that is like or directly competitive with the article their firm (or subdivision) produced could be certified as eligible to apply for NAFTA-TAA benefits. The Reform Act expanded eligibility even further by retaining the TAA program's eligibility for workers who were directly affected by increased imports from any country and adding provisions to include workers who lose their jobs when their firms (or subdivisions) shifted production to: a country that is a party to a free trade agreement with the United States (such as, but not limited to, NAFTA); a country that is a beneficiary under certain specified legislation enacted by Congress involving trade relations; or to any other foreign country when there has been or there is likely to be an increase in imports of articles that are like or directly competitive with the articles produced by their firm (or subdivision).

In addition, the Reform Act expanded TAA program eligibility to include two categories of secondary workers in the stream of commerce: those who perform work upstream in the production of a trade-impacted article and those who perform work downstream in that production. The first category covers workers who perform activities for a

firm (or subdivision of a firm) that supplies component parts for the article produced by a “primary firm” (

i.e.

, a firm that employed a certified group of workers). The Act requires that, if a significant number or proportion of such secondary workers have been separated (or threatened with separation), then they will be certified as eligible to apply for TAA if either the component parts sold to the primary firm constituted at least 20 percent of the sales of the supplier, or the loss of business with the primary firm contributed importantly to the loss of jobs at the supplying firm.

The second category of secondary workers includes workers employed by “downstream producers,” defined as firms (or subdivisions) providing additional, value-added production processes, such as finishers or final assemblers of articles produced by a primary firm. These workers will be certified as eligible to apply for TAA when: workers of the primary firm were TAA-certified due to increased imports from or shifts in production to Mexico or Canada of the articles that were the basis for the TAA certification; a significant number or proportion of the workers in the secondary workers' firm (or applicable subdivision) were separated or threatened with separation; and the secondary workers' firm's (or subdivision's) loss of business from the primary firm (or appropriate subdivision) contributed importantly to their separation (or threatened separation). Both the upstream “supplier” and the “downstream producer” categories of secondary workers, although not covered by the NAFTA-TAA program, may have been eligible under the SAA to receive adjustment assistance initially through the Job Training Partnership Act and later through WIA.

The Reform Act made a number of changes in administrative requirements under the TAA program. One-Stop operators, One-Stop partners, including certain State agencies as well as employers of workers, are specifically added to the categories of entities who may file a petition, though previously these entities could have filed petitions only if they were duly authorized representatives of a group of workers. To inform workers more quickly of the availability of assistance and to facilitate reemployment, rapid response assistance under WIA is now triggered by the concurrent submission of a petition to the Governor and the Secretary. The Department must now make a determination on whether a petition for certification meets the approval criteria within 40 days instead of 60 days from the date of filing of the petition.

To promote adjustment and accelerate reemployment, the Reform Act provides that eligibility for TRA, which is additional income support after unemployment insurance (UI) is exhausted, will be contingent on a worker's enrollment in training not later than 16 weeks after separation from employment or 8 weeks after the petition for eligibility has been approved, whichever date is later. In extenuating circumstances, these deadlines for enrollment in training may be extended up to 45 days; and a waiver of the enrollment in training requirement to receive basic TRA may be issued only under limited and specified conditions. The Reform Act also increased the length of time that TRA is available to an adversely affected worker who is in training by increasing the availability of “additional” TRA from 26 to 52 weeks and by further adding up to 26 additional weeks of TRA if a worker is enrolled in a course of remedial education. The primary purpose of this extended income support is to minimize workers' financial hardship until they complete training. By requiring that workers expeditiously enroll in training as a condition of receiving TRA, the Reform Act amendments provide that workers will be more likely to complete the training within the duration of that income support.

The Reform Act also established ATAA, a pilot program designed to encourage the rapid reemployment of workers aged 50 or older. Petitioners seeking ATAA certification for a group of workers on whose behalf TAA certification is sought should make their request on the TAA petition form they submit to the Department. In determining whether to certify a group of workers as eligible to apply for ATAA, the following criteria must be considered: (1) Whether a significant number of workers in the workers' firm are 50 years of age or older; (2) whether the workers in the workers' firm possess skills that are not easily transferable; and (3) the competitive conditions within the workers' industry.

A qualified worker in a group certified as eligible to apply for ATAA may choose to receive payments of 50 percent of the difference between their pre-layoff wages and their reemployment wages in lieu of all other benefits available under the TAA program except the HCTC. A worker may receive payments for up to a two-year period, but the maximum amount paid may not exceed $10,000. In order to qualify, a worker must be at least 50 years of age, become reemployed within 26 weeks of separation, and be reemployed at annual wages of less than $50,000 in a full-time job that is not the job from which he or she was laid off. The termination date for ATAA is August 6, 2008, five years after the date of its implementation. However, participants may continue to receive the balance of the payments for which they were eligible after the termination date.

The Reform Act amended the Internal Revenue Code (IRC) to authorize the HCTC for certain eligible individuals in the new and old TAA programs and in the NAFTA-TAA program. The Reform Act added a new section 35 to the IRC, establishing the HCTC which is a tax credit covering 65 percent of the cost paid by the individual for coverage of the individual and the individual's qualified family members under qualified health insurance. Potentially eligible individuals fall into three groups: (1) “eligible TAA recipients,” meaning individuals who are receiving TRA or who would be eligible to receive TRA if they had exhausted their UI; (2) “eligible alternative TAA recipients,” meaning individuals who are receiving a benefit under the ATAA program; and (3) “eligible PBGC pension recipients,” meaning individuals who are at least age 55 and receiving pension benefits paid, at least in part, by the Pension Benefit Guaranty Corporation (PBGC). The credit has been available on an advance basis since August 1, 2003. With respect to advance payments of the credit, the Reform Act requires the Secretary of Labor to certify an individual as an eligible TAA recipient, eligible ATAA recipient, or eligible PBGC pension recipient to enable potentially eligible recipients to seek the credit from the IRS. The IRS then determines whether the other HCTC eligibility criteria have been met. The Department is coordinating administration of this responsibility and other aspects of the HCTC with the Department of the Treasury, the Department of Health and Human Services, the PBGC, and the CSAs administering the TAA program.

The Reform Act also added two new aspects to the National Emergency Grant (NEG) program administered by the DOL under WIA to assist the States in providing health insurance coverage assistance to eligible individuals. One type of NEG is available primarily to provide health insurance coverage assistance to eligible individuals and to pay the administrative and startup costs of enrolling such individuals, which includes the processing of the eligibility certificates necessary for the tax credit. The other type of NEG is available

primarily to provide interim health insurance coverage assistance and supportive services (such as transportation, child and dependent care, and income assistance) to individuals eligible for the tax credit, including eligible TAA recipients under the old TAA and NAFTA-TAA programs.

The Reform Act also amended the Employee Retirement Income Security Act, the Public Health Service Act, and the IRC to allow a temporary 60-day extension of the period during which individuals who are “TAA-eligible recipients” may elect Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage under the layoff employer's health insurance plan. The temporary extension provided under the Reform Act begins on the day the individual first meets the TAA eligibility requirements. The TAA-eligible worker must elect to receive the temporary extension within six months after the date of the TAA-related loss of coverage, which the statute defines as the loss of health benefits coverage associated with the separation of the TAA-eligible individual from employment. If a worker elects to receive the extension, then either the tax credit or the NEG would be available to assist the worker to make the payments for the continuation coverage.

Aspects of the tax credit that are administered by the Internal Revenue Service and the Department of the Treasury are not addressed in the proposed regulations. However, the Department proposes amendments to WIA regulations at 20 CFR Part 671 to reflect the new tax credit-related changes to the NEG programs. Funds made available to States under WIA section 174 will be used to provide health insurance coverage assistance to eligible TAA recipients, eligible ATAA recipients and eligible PBGC pension recipients under WIA section 173(f) and (g).

The Reform Act also created a separate TAA for Farmers program. Eligibility determinations for that program are the responsibility of the Secretary of Agriculture. Agricultural commodity producers entitled to cash benefits under that program are entitled to the same basic reemployment services and training as other workers covered by the TAA program, but they may not receive TRA, job search or relocation allowances, or the HCTC. The Department of Labor provides funding for the employment services and the Secretary of Agriculture oversees the payment of cash assistance (up to $10,000 per year) provided to eligible agricultural commodity producers under the Department of Agriculture's certification. The Secretary of Agriculture issued regulations implementing the Department of Agriculture's function in the TAA for Farmers program on August 20, 2003 (68 FR 50048) and November 1, 2004 (69 FR 63317-01).

III. Guiding Principles for the TAA Program Under Proposed 20 CFR Part 618

The Secretary seeks to ensure that States use effective strategies to assist adversely affected workers in rapidly obtaining sustainable employment through the operation of the TAA program and the demonstration ATAA program for older workers. State agencies must increase their focus on early intervention, upfront assessment and reemployment services for adversely affected workers. The initiation of rapid response activities upon the filing of a petition for certification of eligibility to apply for TAA allows State agencies the opportunity to provide workers with early assessment and identification of their marketable skills. A CSA's first priority should be to provide job search assistance and other reemployment services to improve the likelihood of these workers obtaining sustainable employment quickly. Where training is appropriate, it should be designed to return the worker to employment as quickly as is consistent with the worker's training goals.

Career centers in the One-Stop delivery system will become the main point of participant intake and delivery of benefits and services by the States. This approach encourages coordination among workforce investment and other One-Stop partner programs including the TAA program, which will better serve workers and promote efficiencies in the workforce investment system.

Fiscal integrity and performance accountability will be monitored to ensure that the money allocated for TAA and ATAA is used to assist workers and thereby strengthen the economy. Improved participant outcome measures for the program will assist the Department and the States in reaching these goals.

IV. Summary and Discussion of Regulatory Provisions

The rules proposed in this NPRM, covering TAA program benefits and administration, are based largely on the current regulations codified at 20 CFR Part 617 (Trade Adjustment Assistance for Workers under the Trade Act of 1974). The proposed Part 618 regulations also incorporate amendments to the TAA program effectuated by the Reform Act, and simplify the language adopted from the current regulations in compliance with the Presidential directive that Federal agencies write new regulations in plain language (63 FR 31885, June 10, 1998). In accordance with the Reform Act, the claims of workers covered by petitions filed before November 4, 2002 continue to be governed by the rules of the TAA and NAFTA-TAA programs prior to that date. These rules will continue to be codified at 20 CFR Part 617. In addition, the NAFTA-TAA operating instructions previously issued by DOL, General Administrative Letter No. 7-94 (59 FR 3871, January 27, 1994) and changes 1, 2, and 3 (69 FR 60898, October 13, 2004; 69 FR 67963-03, November 22, 2004) will continue to apply to eligible participants of the TAA and NAFTA-TAA programs until superseded by these regulations.

The proposed amendments to 20 CFR Part 617 and to the WIA regulations, codified at 20 CFR Parts 665 and 671, respectively, reflect both the Reform Act requirements for coordination between the workforce investment system and the TAA program and changes to the NEG program relating to the HCTC.

Part 617—Trade Adjustment Assistance Under the Trade Act of 1974 for Workers Certified Under Petitions Filed Before November 4, 2002

The proposed revisions to Part 617 include changing the title to clearly identify that this Part applies only to workers certified as eligible to apply for trade adjustment assistance under petitions filed before the Reform Act changed the TAA program. Proposed § 617.1 amends this section to provide further clarification that the provisions for TAA assistance under this Part 617 will continue to apply after the effective date of Part 618 only to adjustment assistance, TRA, and other allowances available to adversely affected workers covered by certifications issued under petitions filed with the Secretary before November 4, 2002, the effective date of the Reform Act amendments to the TAA programs. Proposed § 617.10 adds a new paragraph (e) to that section to require CSAs to advise adversely affected workers subject to the requirements of the TAA program in effect before November 4, 2002 of the qualifying requirements for the health coverage tax credit (HCTC) and related health insurance assistance established by the Reform Act.

Part 618—Trade Adjustment Assistance Under the Trade Act of 1974 for Workers Certified Under Petitions Filed After November 3, 2002.

Subpart A—General

Subpart A describes the TAA program and the contents of all the subparts. In addition, it defines all relevant terms used in other subparts. (Several definitions related to subpart B (Petitions and Determinations of Eligibility to Apply for Trade Adjustment Assistance) are held in reserve for publication with subpart B.) Several definitions have been modified and simplified to clarify their meanings, or eliminated in response to statutory changes in the TAA program. In addition, definitions of new terms have been added to describe the amended TAA programs, including the new ATAA program. Use of these definitions in the NPRM is intended to facilitate the integration of the TAA programs into the One-Stop system under the WIA and to describe and implement new concepts introduced into the TAA programs by the Reform Act, such as the HCTC. Major changes include:

• The goal of the program has been defined as providing workers, so as quickly as possible, with assistance to return them to work that will use the highest skill levels and pay the highest wages given the workers' preexisting skill levels and education and the condition of the labor market.

• The definition of adversely affected worker has been clarified to include the owner of a small business adversely affected by foreign trade.

• A new definition of customized training has been added.

• Definitions necessary for HCTC processing have been added.

Proposed § 618.100 describes the purpose of the program, which the Department, based on past experience, has modified to reflect achievable outcomes for a worker. Under the current statement of purpose at 20 CFR 617.2, the stated goal of the TAA program is to return workers to suitable employment as quickly as possible. In this context, “suitable employment” means that after the worker received services under the TAA program, the worker would be re-employed at 80 percent of his or her former salary. While that goal has not changed, the Department has revised the wording of the goal to make it clear that finding “suitable employment” is a goal, not a requirement of the Act.

Although the “suitable employment” standard is a worthy goal, and one that the Department intends to continue to pursue, it is merely a goal and not a program requirement. Unfortunately, there are situations in which workers may be unable to obtain “suitable employment” either in the local labor market or as a result of training. This may occur because the workers are experienced workers for whom few jobs at their former wages are available, because of a depressed local labor market in which there are few available jobs, or because the workers have substantial barriers to reemployment. These factors significantly constrain the training opportunities that are available for these workers, and therefore, their employment prospects as well. Yet providing training, especially in a stagnant labor market, may significantly increase a worker's chances for obtaining a decent job with career advancement prospects or of succeeding in the labor market.

The Department's goal is to provide the best possible outcome for each worker participating in the program. Therefore, the Department is committed to providing training that will allow a worker to compete for the highest paying employment achievable given the worker's pre-existing skills, abilities, and education, and the current job market. The proposed purpose section accurately reflects the Department's goal.

Proposed § 618.105 sets forth the effective dates for various aspects of the TAA program, the ATAA program, and HCTC, as provided by the Reform Act. Until these regulations at Part 618 take effect, Training and Employment Guidance Letter (TEGL) No. 11-02 and its changes will continue to govern determinations on certifications and benefits for workers covered under petitions filed after November 3, 2002. Similarly, TEGL No. 2-03, and its changes, continue to govern determinations on ATAA certifications and benefits made before the effective date of this Part 618. Part 617 will continue to apply to the operational and benefit provisions of the TAA program for petitions filed before November 4, 2002 and certifications granted under those petitions. General Administrative Letter (GAL) No. 7-94 (59 FR 3871, January 27, 1994) and its changes (69 FR 60898-60903, October 13, 2004) continue to apply to NAFTA-TAA petitions filed before November 4, 2002, even when determinations on those petitions are issued after that date.

The terms defined in proposed § 618.110 apply to both the petition process and the benefit provisions of the TAA program. They derive from six basic sources: the Act prior to the Reform Act amendments, the Reform Act, 20 CFR Part 617, 29 CFR Part 90, the WIA and its implementing regulations at 29 CFR Part 652,

et seq.

Several definitions used in 20 CFR Part 617 and 29 CFR Part 90 have been modified and simplified to clarify their meanings, amended to reflect current TAA statutory language or eliminated in response to TAA statutory changes.

The particular definitions are explained as they appear in this section, in

alphabetical order

, as follows.

Act

—The citation for the Trade Act in the proposed definition is updated from the citations in 29 CFR Part 90 and 20 CFR 617.3(a) to include all amendments to the Act through the date of publication of this notice.

Additional compensation

—This proposed term was included in the description of unemployment compensation in 20 CFR 617.3(oo). The proposed definition of this term is the same as § 617.3(oo)(2).

Adversely affected employment

—This proposed definition is based on the statutory definition, which was codified in 20 CFR 617.3(a), and, although the definition has been revised for clarity, no substantive change from that definition is intended.

Adversely affected worker

—This proposed definition modifies the definition in 20 CFR 617.3(c) to clarify the Department's interpretation of this statutory term. Under this proposed definition, an employer may be considered an adversely affected worker when the employer is also an employee of a business that closes or experiences a reduction in operation. In this circumstance, if the employer becomes totally or partially separated from his or her employment, the employer is an “adversely affected worker.” The proposed definition also changes the definition in 20 CFR 617.3(c) to include the applicable periods during which the worker's separation must occur in order for that worker to be eligible to apply for TAA, or TAA and ATAA: the period from the impact date to two years after the date on which the certification is signed or earlier if the certification is terminated before it expires after two years.

Agent State

—This proposed definition is substantively unchanged from the definition and description of agent State codified in 20 CFR 617.3(aa)(2) and 617.16(e).

Alternative Trade Adjustment Assistance, Alternative TAA

or

ATAA

—This proposed term refers to the assistance provided under the demonstration program introduced by the Reform Act to provide an alternate path for adversely affected workers over the age of 50 years to elect to receive benefits under the Act, as discussed in

subpart I (reserved for publication at a later date).

Applicable State law

—This proposed definition is substantially the same as in 20 CFR 617.16. The wording has been changed slightly to make the definition more easily understood, and the separate paragraph addressing adversely affected workers entitled to UI under the Railroad Unemployment Insurance Act (RRUI) has been dropped because it is duplicative of paragraph (a)(2) of this definition in 20 CFR 617.16, which also applies to adversely affected workers entitled to UI under the RRUI.

Average weekly hours

—This proposed definition is the same as in 20 CFR 617.3(e).

Average weekly wage

—This proposed definition is substantively the same as in 20 CFR 617.3(f). However, it replaces the phrase “the individual's appropriate week” with the phrase “the week in which the individual's first separation occurred.” This change eliminates the definition of “appropriate week,” which was referenced only one time in the definition of “average weekly wage” at 20 CFR 617.3(f). Therefore, the Department proposes to remove the term “appropriate week,” as defined at 20 CFR 617.3(d), from this proposed Part 618. This definition otherwise did not change substantively.

Benefit period

—This proposed definition is the same as in 20 CFR 617.3(h).

Bona fide application for training

—This proposed definition is the same as the definition in 20 CFR 617.3(i), except that it no longer includes the direction to the CSA that the form must be signed and dated upon receipt and the form used is not required to contain the local office number of the CSA. Instead, proposed § 618.605(b)(2) directs a representative of the CSA to sign and date the application upon receipt. Access to CSAs and their contact information via telephone directories and information assistance and the Internet obviates the need for a bona fide application for training to contain the local office telephone number, which may soon be outdated.

Certification

—This proposed definition modifies the definition in § 617.3(j)(1) to include a reference to ATAA. The procedures for obtaining a certification will be described in the proposed subpart B [reserved].

Certification period

—This proposed definition is the same as in 20 CFR 617.3(j)(2).

Certifying officer

—This proposed definition is updated from the definition in 20 CFR Part 617 by changing “Office” to “Division” and “Part 90” to “Part 618.”

Co-enrollment

—This proposed term refers to an individual who is participating in a TAA program and is also enrolled in another program administered through a State's WIA One-Stop delivery system.

Commuting area

—This proposed definition is the same as in 20 CFR 617.3(k).

Confidential business information

—This proposed definition replaces the definition at 29 CFR 90.33(a), and provides a more precise statutory basis, under the Trade Secrets Act, 18 U.S.C. 1905, for withholding from disclosure commercial and financial data received by the Department during its investigation of petitions for certification of worker eligibility to apply for TAA, or TAA and ATAA. Section 90.33(a) identifies the Freedom of Information Act, 5 U.S.C. 552 (FOIA), and the Department's regulations implementing FOIA, 29 CFR Part 70, as the bases for designating confidential commercial information as “privileged or confidential.” FOIA exemption (b)(4) exempts from mandatory disclosure under FOIA certain commercial or financial information that is the subject of a FOIA request. The Trade Secrets Act affirmatively prohibits the disclosure of confidential business or commercial information, in the absence of legal authority. The term “confidential business information” is used in connection with disclosure of information by the Department and by the States, as in proposed § 618.865(b).

Cooperating State agency or CSA

—This proposed term is added to accurately identify the agency or agencies at the State level that carry out provisions of the Act because of the new emphasis on coordination between the TAA programs and the One-Stop delivery system. While the proposed definition includes the “State agency,” as that term was defined in 20 CFR 617.3(ii), it also includes the State Workforce Agency and other State or local agencies that cooperate in the administration of the TAA programs under an agreement between the Governor and the Secretary.

Customized training

—This proposed term is newly defined to identify a type of training previously not referenced in the Act. While the Reform Act generally did not amend the job retraining provisions of the Act, it changed the reference to “on-the-job training” to “employer-based training, including (i) on-the-job training and (ii) customized training.” The proposed definition of customized training refers to § 618.635(b) which describes customized training similarly to the definition for such training under WIA.

Date of certification

—This proposed term means the same as the term “date of issuance” in 29 CFR 90.2, but has been expanded and renamed to avoid any suggestion that the date on which the certification is signed may be different from the date on which the certification is issued. The phrase “for a group of adversely affected workers at a firm or subdivision” is added to the proposed definition to indicate that the certification will identify the group of workers to whom it applies.

Date of filing

—This proposed definition is modified from the definition in 29 CFR 90.2. The current office handling petitions under the TAA programs, DTAA, is substituted. The definition also makes clear that a petition is only considered filed on the date on which DTAA receives a complete petition.

Date of separation

—This proposed definition is intended to have the same meaning as 20 CFR 617.3(l), but is rephrased slightly for clarity and is stated in the disjunctive to make it clear that the three situations listed are alternatives.

Department of Labor

or

Department

or

DOL

—This proposed term identifies the Department of Labor. The abbreviations are added to simplify references to the agency.

Director

—This proposed definition differs from the definition in 29 CFR 90.2 by using the term Division rather than Office to reflect the current ETA organizational structure, and by including any person who is designated to act in the place of the Director.

Division of Trade Adjustment Assistance

or

DTAA

—This proposed definition refers to the name of the organization within the Employment Training Administration of the Department with responsibility for administering the TAA programs. CSAs work under the direction of DTAA to provide services and benefits under the TAA programs.

Eligible ATAA recipient, Eligible PBGC pension recipient and Eligible TAA recipient

—These proposed definitions incorporate the definitions the categories of persons who may be eligible to qualify for the health coverage tax credit under section 35 of the Internal Revenue Code and health insurance coverage assistance under section 173(g) of the WIA, 29 U.S.C. 2918, as amended by the Reform Act. These categories are defined in sections 35(c)(3), 35(c)(4) and 35(c)(2) of the Internal Revenue Code, 26 U.S.C. 35(c)(3), (c)(4) and (c)(2). The CSA must send a list of eligible ATAA and TAA recipients to the Internal Revenue Service (IRS). However, only the IRS

can make a determination that an individual who is on that list is eligible to receive the HCTC.

Employer

—This proposed definition is the same as in 20 CFR 617.3(n).

Employment

—This proposed definition is the same as in 20 CFR 617.3(o).

Extended compensation

or

Extended Benefits

or

EB

—This proposed term was included in the description of unemployment compensation in 20 CFR 617.3(oo). The proposed definition of this term has been revised to simplify and update § 617.3(oo)(3).

Family

—This proposed definition is the same as the definition of this term in 20 CFR 617.3(q), which is based on the Internal Revenue Code definition, except for updating the date of the Internal Revenue Code from “1954” to “1986.”

Federal student financial assistance

—This proposed term is added to describe the various types of student financial assistance authorized by title IV of the Higher Education Act of 1965, as amended (20 U.S.C. 1070

et seq.

) and Bureau of Indian Affairs student assistance programs which may be available to adversely affected workers.

Federal supplemental compensation

—This proposed term was included in the description of unemployment compensation in 20 CFR 617.3(oo). The proposed definition of this term has been revised to simplify and update the language used in § 617.3(oo)(4).

Firm

—This proposed definition is substantially the same as in 29 CFR 90.2. The definition is intended to be broad enough to encompass all kinds of organizations and to include closely related or affiliated organizations. The definition is, however, limited by basic rules of corporate and organizational law to entities that share the indicia of common ownership or control.

First benefit period

—This proposed definition is substantively the same as in 20 CFR 617.3(r). To achieve consistency in proposed Part 618, the term “worker” is used instead of “individual,” which is used in this definition in Part 617.

First qualifying separation

—This proposed definition is substantially changed from 20 CFR 617.3(t)(3), which defines this term one way for purposes of determining the weekly and maximum amounts of basic TRA, and another way for all the other purposes of Part 617. For simplification, the proposed definition of this term applies solely for the purpose of determining the weekly and maximum amounts of basic TRA and is substantively the same as at 20 CFR 617.3(t)(3)(ii). The other purpose for which this term is used in 20 CFR 617.3(t)(3)(i) is now covered in the proposed definition of “qualifying separation” at proposed § 618.110.

First separation

—This proposed definition is the same as in 20 CFR 617.3(t)(1), except that the cross reference has been deleted as unnecessary.

Health Coverage Tax Credit

or

HCTC

—This proposed term is added to describe the tax benefit under section 35 of the Internal Revenue Code of 1986 (26 U.S.C. 35) that the Reform Act makes available to qualified TAA and ATAA recipients.

Impact date

—This proposed definition slightly revises the definition of this term at 20 CFR 617.3(v) for simplicity. The impact date is stated in the certification for eligibility of covered workers to apply for TAA. As required by section 223(b)(1) of the Act, the impact date may not be more than one year before the date of the petition on which such certification was granted.

Individual employment plan (IEP)

—This is a new definition. Generally, an IEP is prepared after conducting a comprehensive assessment of the worker's employment goals and strategies to achieve those goals. An IEP means an ongoing strategy jointly developed by the participant and the case manager that identifies the participant's employment goals, the appropriate achievement objectives, and the appropriate combination of services for the participant to achieve the employment goals.

Job finding club

—This proposed definition is the same as the definition of this term in 20 CFR 617.3(y).

Job search program

or

JSP

—This proposed definition is the same as the definition of this term in 20 CFR 617.3(w).

Job search workshop

—The proposed wording of this term varies slightly from 20 CFR 617.3(x) to provide a clearer description, but the meaning is intended to be the same.

Lack of work

—This term is used in the definitions of “adversely affected worker” in section 247(2) of the Act, as well as in the definitions of “adversely affected worker” and “layoff” in these proposed regulations. Thus, the term is defined here to clarify its meaning. The definition includes situations where the employer is downsizing the workforce by attrition or offering severance benefits to encourage workers to leave the workforce voluntarily, and where a worker's hours of employment have been reduced because sufficient work to maintain that worker's customary hours of work is not available. A worker who is separated from employment under these circumstances may be covered as an “adversely affected worker” and be eligible to receive TAA, or TAA and ATAA. It should be noted that some workers will meet this definition of a “lack of work” separation, but will be disqualified for UI under State voluntary quit provisions. The UI disqualification will make these workers ineligible for TRA, although they may qualify for other forms of TAA.

Layoff

—This proposed definition follows the definition in 20 CFR 617.3(z) and contains two minor changes to the definition of this same term in 29 CFR 90.2. The phrase “suspension or separation from employment” used in § 617.3(z) is adopted instead of the phrase “suspension from pay status” used in the definition of this term in § 90.2 because the Department intends for “layoff” to include persons separated from employment who receive severance pay and therefore may be considered to be in a pay status. This definition may be an issue for some States, and some workers will be able to get TAA services other than TRA, for which they may be disqualified based upon the receipt of severance pay. The Department proposes using the phrase “expected to be for a definite or indefinite period of not less than seven (7) consecutive days” from 20 CFR 617.3(z) rather than the phrase “expected to last for no less than seven (7) consecutive calendar days,” which is used in the definition of this term in 29 CFR 90.2. Use of the Part 617 language will remove any ambiguity about whether a suspension or separation from employment may be for a definite or indefinite period and still be a “layoff” for TAA purposes. Additionally, use of the Part 617 language will notify CSAs that they must continue to measure the duration of a suspension or separation from employment as they have been under Part 617.

Liable State

—This proposed definition follows 20 CFR 617.3(aa) but is revised for simplicity. The term “Agent State” is now separately defined at proposed § 618.110.

One-Stop delivery system

—This proposed term refers to the system of entities within a State operating under WIA and its implementing regulations to provide employment and training activities, including coordination of services to eligible dislocated workers as defined under section 101(9) of WIA. WIA section 121(b)(1)(B)(viii) requires the TAA program to be a partner in the One-Stop delivery system.

On-the-job training (OJT)

—This proposed definition, unlike the

definition in 20 CFR 617.3(bb), defines this term by reference to the on-the-job training provision at proposed § 618.635(a)(1) (enrollment in on-the-job and customized training).

Partial separation

—This proposed definition combines the slightly different definitions of this term in 20 CFR 617.3(cc) and 29 CFR 90.2. The definition of this term in § 90.2 applies to separations “at the firm or appropriate subdivision thereof,” referring to workers who have not yet been certified as eligible to apply for TAA. After they have been determined to be eligible to apply for TAA, the workers' “partial separation” is referred to in § 617.3(cc) as being “in adversely affected employment,” the term that the Trade Act uses in section 247(6) of the Act to describe the two measures of “partial separation.” The proposed combined definition retains the statutory criteria of “partial separation” to refer to both workers on whose behalf a petition has been filed and workers who are covered by a certification. The proposed definition also clarifies the meaning of the term by specifying that, in order for the worker to be counted as partially separated from adversely affected employment, the reduction of hours must have occurred during a week ending on or after the impact date specified in a certification.

Program of remedial education

—This new proposed term is used to refer, as the Reform Act does, to education designed to upgrade the basic knowledge of adversely affected workers through such courses as adult basic education, basic math and literacy, English-as-a-second-language, and high school equivalency.

Qualifying separation

—This term, as defined at 20 CFR 617.3(t)(2), is used to determine whether an individual qualifies as an adversely affected worker and for basic TRA. Under the proposed definition of this term, it applies for both those purposes as well as for determining the 16-week period for enrollment in approved training and the basic TRA eligibility period.

For the purpose of determining the basic TRA eligibility period under proposed § 618.745(a), an adversely affected worker's eligibility for basic TRA ends at “the close of the 104-week [or, under the Reform Act amendments, if necessary to complete an approved training program that includes remedial education, the 130-week] period beginning with the first week following the week in which the adversely affected worker's most recent qualifying separation (defined in proposed § 618.110) occurred.” Thus, every time an adversely affected worker has a “qualifying separation,” he or she begins a new basic TRA eligibility period, as provided in section 233(a)(2) of the Act.

This “movable basic TRA eligibility period” is the same under proposed Part 618 as it is under Part 617 because the Reform Act did not amend it. However, the Part 618 regulations achieve the same result in a simpler fashion. Section 617.15(a) of 20 CFR provided a 104-week “eligibility period.” This term is defined at 20 CFR 617.3(m)(1)(ii) in reference to the “first total qualifying separation,” which is a “first qualifying separation” under 20 CFR 617.3(t)(3)(i)(B). However, the definition of “eligibility period” in Part 617 provides that if an individual has a “subsequent total qualifying separation within the certification period of the same certification,” that individual would have a new 104-week eligibility period. Thus, the Part 617 regulations provide for a movable basic TRA eligibility period, through several steps by running the eligibility period from the “first total qualifying separation,” and then restarting it where the adversely affected worker had a “subsequent total qualifying separation.” The Part 618 regulations achieve the same result, but more simply, by running the eligibility period from the most recent “qualifying separation” (defined as, among other things, a total separation).

The definition of “qualifying separation” is used also for the purpose of determining the 16-week period for enrollment in approved training as a condition of TRA, a deadline added by the Reform Act. Proposed § 618.720(b)(2) establishes this deadline as the “last day of the 16th week after the adversely affected worker's most recent qualifying separation as defined in § 618.110,” thus establishing a “movable” 16-week period for enrollment in approved training, as provided in section 231(a)(5)(A)(ii)(I) of the Act.

As noted in the preamble explanation of the definition of “first qualifying separation” at proposed § 618.110, that definition applies only for the purposes of determining the weekly and maximum amount of basic TRA. The proposed definition of “qualifying separation” also modifies the 20 CFR 617.3(t)(2) definition by eliminating outdated provisions.

Regional Administrator

—This proposed definition is substantively unchanged from 20 CFR 617.3(dd).

Regular compensation

—This proposed term was included in the description of unemployment compensation in 20 CFR 617.3(oo). The proposed definition of this term is the same as § 617.3(oo)(1).

Secretary

—This proposed term, used to refer to the Secretary of Labor, United States Department of Labor, is the same as in 20 CFR 617.3(ff).

State

—This proposed definition is the same as the definition of this term in 20 CFR 617.3(hh).

State agency

—This proposed definition revises the definition of this term used in Part 617 by incorporating the statutory definition of “the agency of the State which administers the State law.” The proposed definition of “CSA” in proposed § 618.110 is the same as the 20 CFR 617.3(ii) definition of “State agency,” except that current terminology is used instead of “State Employment Security Agency.”

State law

—This proposed definition is the same as in 20 CFR 617.3(jj), except that the reference to the Internal Revenue Code has been updated.

Suitable employment

—The proposed definition of “suitable employment” comes from section 236(e) of the Act, defining it as “work of a substantially equal or higher skill level than the worker's past adversely affected employment, and wages for such work at not less than 80 percent of the worker's average weekly wage.” That section expressly states that its definition of this term applies for purposes of section 236. Section 236 uses the term “suitable employment” only in section (a)(1)(A) (the first criterion for the approval of training), providing for approval where “there is no suitable employment * * * available for an adversely affected worker.”

The term “suitable employment” also is used in section 231(c)(1)(B) of the Act to permit waiver of the training requirement for receiving TRA where an adversely affected worker has marketable skills for “suitable employment” and there is a reasonable expectation of employment at equivalent wages in the foreseeable future. Section 231 of the Act neither incorporates the definition of “suitable employment” in section 236(e) of the Act nor provides a different definition of the same term. The Department has determined that it is appropriate to apply the section 236(e) definition of the term in implementing section 231 of the Act because these provisions are interrelated. Where “suitable employment” is available for an adversely affected worker, approval of training will be denied under section 236(a)(1)(A) of the Act. However, the worker may need income support while looking for that “suitable employment,” which may depend upon a waiver of the training requirement. Using the same

definition of “suitable employment” for purposes of section 231(c)(1)(B) of the Act allows CSAs to decide whether to deny training and to grant waivers on the same basis.

Sections 237(a)(2)(B) and 238(a)(2)(B) of the Act require, as conditions for receipt of job search and relocation allowances, that “the worker cannot reasonably be expected to secure suitable employment in the commuting area in which the worker resides.” In implementing these provisions, the Department proposes in subparts D and E to use the same definition of the term “suitable employment.” This is a departure from the current regulations at 20 CFR 617.32(a)(4) (on job search allowances) and 617.42(a)(6) (on relocation allowances) which interpret “suitable employment” to mean “suitable work” as defined in 20 CFR 617.3(kk)(1) and (2), whichever is applicable to the individual. “Suitable employment” is generally work at higher skill levels and wage rates than is “suitable work.” By changing the interpretation of “suitable employment” to have the same meaning for purposes of eligibility for relocation and job search allowances that it has in proposed subpart F of Part 618 on training, the Department intends to encourage workers to use these benefits in a manner consistent with the purpose of the program to encourage workers to seek new jobs with compensation levels near the levels of those jobs from which they were separated. This proposed regulatory change may increase the number of workers who qualify for job search allowances in areas where “suitable employment” opportunities are limited. On the other hand, using “suitable employment” in the eligibility criteria for relocation allowances could restrict the jobs for which relocation allowances may be paid.

The Department invites comment on whether it should instead define “suitable employment” for purposes of job search and relocation allowance eligibility as a job at lower wages than “suitable employment” as defined in section 236(e) of the Act for job training approval. A lower standard for “suitable employment” would have the beneficial effect of increasing the number of jobs for which a worker might obtain a job search or relocation allowance. On the other hand, approval for either of these allowances requires that there be no reasonable expectation of securing “suitable employment” in the commuting area. Therefore, a lower standard would make it more likely that a disqualifying “suitable employment” would be available locally. The Department also invites comment on what level would be appropriate, and why.

The proposed definition of “suitable employment” differs slightly from the definition in 20 CFR 617.22(a)(1)(i) by expressly requiring the CSA to take into consideration the value of fringe benefits, including health insurance, in determining whether the level of wages for work is at least 80 percent of the adversely affected worker's average weekly wage in the adverse employment from which the worker was separated. The broad definition of the term “wages” in 20 CFR 617.3(pp) and proposed paragraph 618.110, which includes “all compensation for employment for an employer, including commissions, bonuses, and the cash value of all compensation in a medium other than cash,” is the basis for emphasizing to the CSAs that they must consider fringe benefits as part of the total wage package factor in making determinations as to whether “suitable employment” is available to an adversely affected worker. Comments on this change in definition are specifically requested.

Suitable work

—The definition proposed for Part 618 is the same as the definition of this term in 20 CFR 617.3(kk)(1) and (2), that is, either as suitable work as defined in the applicable State law for claimants for regular compensation, or suitable work as defined in applicable State law provisions consistent with section 202(a)(3) of the Federal-State Extended Unemployment Compensation Act (EUCA) of 1970. State unemployment insurance laws define “suitable work” in terms of a worker's job prospects. The better the job prospects, the higher the level of work considered suitable. Further, where a worker's job prospects are not good, the EUCA considers any work within the worker's capabilities to be suitable. Lastly, the proposed definition, as well as the Part 617 definition, excludes self-employment or employment as an independent contractor. Thus, if self-employment or employment as an independent contractor is the only available employment in the worker's commuting area, the worker may be eligible for a job search or relocation allowance as he or she will not be disqualified for this reason.

Supportive services

—This proposed new term is used to refer to such services as transportation, childcare, dependent care, and housing that are needed to enable an individual to participate in activities authorized under the Act.

Total separation

—This proposed definition combines the definitions currently codified in 20 CFR 617.3(ll) and 29 CFR 90.2. The definition of “total separation” in 29 CFR Part 90 refers to an individual's layoff or severance “from a firm or an appropriate subdivision thereof;” the 20 CFR Part 617 definition refers to an individual's layoff or severance from “employment with a firm in which, or in a subdivision of which, adversely affected employment exists,” and therefore refers to a determination that the individual is covered by a certification of eligibility to apply for TAA. The proposed definition recognizes that a “total separation” is the same whether or not the worker group involved is covered by a certification.

Trade adjustment assistance

or

TAA

—The proposed definition of TAA has been revised to refer to the services and allowances to help adversely affected workers become reemployed. They include TRA, training and other reemployment services, job search allowances and relocation allowances, and HCTC.

Trade adjustment assistance for Farmers program

or

TAA for Farmers program

—This term is added to refer to the program of adjustment assistance added to the Act by subtitle C of the Reform Act to provide benefits and services to agricultural commodity producers through a certification process administered by the United States Department of Agriculture under regulations codified at Part 1580 of title 7 of the Code of Federal Regulations. Employment services and training under the TAA program are available to agricultural commodity producers determined by the Department of Agriculture to be eligible to receive a cash benefit under that program.

Trade readjustment allowance

or

TRA

—This proposed definition is substantively unchanged from 20 CFR 617.3(nn).

Unemployment insurance

or

UI

—This proposed definition has been revised to simplify, update and clarify the language in 20 CFR 617.3(oo). The four types of UI defined in 20 CFR 617.3(oo) (regular compensation, additional compensation, extended compensation or extended benefits or EB, and Federal supplemental compensation) are separately defined in this section.

Wages

—This proposed definition is the same as the definition of this term in 20 CFR 617.3(pp).

Wagner-Peyser Act

—This new proposed term refers to the Wagner-Peyser Act, as amended (29 U.S.C. 49

et seq.

).

Week

—This proposed definition is the same as the definition of this term in 20 CFR 617.3(qq).

Week of unemployment

—The proposed definition follows the definition of this term in the Act, and differs from the definition but not the meaning of this term in 20 CFR 617.3(rr) by using the phrase “Federal unemployment insurance law” instead of “Federal unemployment compensation law” to accord with the proposed definition of UI in paragraph (b)(80) of § 618.110.

Workforce Investment Act

or

WIA

—This proposed term refers to the Workforce Investment Act of 1998, under which the Department provides States and local Workforce Investment Areas with funds for employment and training activities for adults and dislocated workers and for youth activities.

Subpart C—Delivery of Services Through the One-Stop Delivery System

Proposed subpart C is an entirely new subpart that sets forth requirements for CSAs to assist individuals who are covered by a petition but not yet certified, as well as adversely affected workers. This subpart provides a road map for CSAs of their responsibility for providing reemployment services, whether they are provided through the TAA program, through the WIA One-Stop delivery system, or through any other federal law. It covers rapid response assistance and access to WIA core and intensive services, as well as supportive and other services. It emphasizes the integration of the TAA program into the WIA One-Stop delivery system. Subpart C is added in response to amendments made by the Reform Act, so it does not have an exact counterpart in Part 617 of the DOL regulations. Major points include:

• CSAs must ensure that their TAA program administration complies with the One-Stop partnership requirements.

• Individuals covered by a petition must be offered rapid response assistance and WIA core and intensive services.

• A needs assessment is required for each TAA applicant and a comprehensive assessment for any recipient entering training.

• CSAs must make every reasonable effort to secure for adversely affected workers counseling, testing, and placement services as well as supportive and other services provided for under any other Federal law.

• Co-enrollment is encouraged as a strategy for delivering services.

• CSAs are required to prepare an individual employment plan (IEP).

• Worker benefit eligibility is protected by requiring CSAs to take timely action on training waivers when appropriate.

• CSAs are required to provide employment services to individuals entitled to cash benefits under the TAA for Farmers program administered by the U.S. Department of Agriculture.

Proposed § 618.300 discusses the scope of this new subpart, which focuses on the requirement that TAA program benefits and services be integrated to the extent possible with the reemployment services provided through the WIA-funded One-Stop delivery system. Consistent with the Reform Act, Subpart C is intended to provide individuals with a seamless delivery of services necessary for each to return to employment as quickly as possible by requiring and promoting the integration activities and services described below.

The Act requires cooperating State agencies to provide reemployment services to two classes of participants: (1) Individuals covered by a petition for TAA filed by, or on behalf of, a group of workers and, (2) adversely affected workers who are covered by a petition that has already been certified. Under section 221(a)(2)(A) of the Act, the Governor must offer individuals covered by a petition rapid response assistance and WIA core and intensive services. Adversely affected workers must be offered core and intensive services, including counseling, testing and placement services and supportive and other services provided for under any other Federal law, including the Wagner-Peyser Act and the WIA. This requirement is based on new language in section 235, 239(a), (e) and (g) of the Act and the Congressional Declaration of Policy in section 125(a) of the Reform Act. These services must be coordinated with workforce activities and services under Title I of WIA. Section 239(e) and (g) provides the Secretary with the authority to establish the responsibilities and requirements for such coordination.

Proposed § 618.305 requires CSAs to ensure that the TAA program, as a required partner in the One-Stop delivery system, complies with One-Stop partnership requirements such as sharing staff, materials, and/or financial resources. The partnership activities help ensure the seamless delivery of necessary services, including a comprehensive array of appropriate services not funded under the Trade Act, to both individuals covered by petitions and adversely affected workers.

Proposed § 618.310 explains the CSAs' responsibilities for delivering employment services not funded by the Act. Proposed paragraph (a) addresses such employment services that CSAs must make available to workers covered by a petition. It implements section 221(a)(2)(A) of the Act, which requires that, upon the filing of a petition for TAA, the Governor ensure that covered workers have available to them WIA rapid response activities (as described in 20 CFR 665.300 and 665.310) and WIA core and applicable intensive services not funded under the Act. The timely provision of core and intensive services is an important step toward improving both the efficiency and the effectiveness of TAA. Further, immediately beginning the process of employment needs assessment improves participation rates and allows workers covered by a petition, whether or not the petition is certified, more time to consider all of the options available to them. Early intervention services that will benefit covered workers and adversely affected workers may include orientation; initial assessment of skill levels, aptitudes, and abilities; provision of labor market information; job search assistance; financial management workshops; and other services.

Proposed § 618.310(b) lists services that CSAs must make every reasonable effort to provide to workers after TAA certification, as required under section 235 of the Act. Because the TAA program does not fund a comprehensive program of reemployment services, it must be supplemented by services provided through the One-Stop delivery system: (1) Wagner-Peyser Act labor exchange system services described at 20 CFR 651.3 to facilitate the matching of workers seeking jobs and employers seeking to fill jobs; and (2) WIA core and intensive services such as assessment, vocational testing, employment counseling, case management, placement and follow-up services, and development of individual employment plans (IEPs), as well as supportive services such as transportation and child care assistance.

Proposed § 618.310(c) implements section 235 of the Act by requiring CSAs to make every reasonable effort to ensure the provision of services for adversely affected workers under other Federal laws. This provision comports with Congress' statutory design not to duplicate efforts by requiring the Secretary and CSAs to seek other available funding streams for the provision of reemployment services to adversely affected workers.

Proposed § 618.310(d) permits adversely affected workers to receive

employment services from another program if they meet the eligibility requirements of that program, even if that program is funded under the Wagner-Peyser Act or WIA, or the program is not exclusively federally-funded, in accordance with the descriptions of One-Stop partners in 20 CFR 662.200 and 20 CFR 662.210. CSAs should explore the wide variety of services available through such One-Stop partners as economic development agencies, and community-based and faith-based organizations in developing a comprehensive service strategy for workers.

Proposed § 618.310(e) reminds CSAs of the availability of two funding sources for reemployment services for adversely affected workers: WIA Dislocated Worker funds for an adversely affected worker who meets the dislocated worker definition at WIA section 101(9); and WIA-funded Adult programs for adversely affected workers who remain partially employed and therefore do not meet the WIA definition of a dislocated worker. When providing services to partially employed workers, the CSAs should assess the likelihood of restoring full employment and any other of the workers' circumstances to develop appropriate IEPs.

Proposed § 618.315 describes reemployment services which may be paid for with Trade Act funds. Proposed paragraph (a) implements section 239(f) of the Act by requiring CSAs to provide information to individuals about TAA, as detailed in proposed § 618.820. Proposed paragraph (b) follows 20 CFR 617.20(b) in describing the responsibilities that a CSA has for the delivery of reemployment services. However, since proposed paragraph (b) only lists those responsibilities funded under the Act, paragraphs (b)(2), (b)(5), and (b)(13) of 20 CFR 617.20 are inapplicable because TAA funds are not used to provide those services. Paragraph (a) of 20 CFR 617.20 also is inapplicable under the seamless system envisioned under the Act. The paragraph is also updated to eliminate a reference to now-inapplicable Title III of the Job Training Partnership Act by substituting a reference to the Wagner-Peyser Act and the WIA at proposed § 618.315(b)(12).

Proposed § 618.320 implements the new requirement, at section 221(a)(2)(A) of the Act, that the Governor, upon receipt of a petition for TAA certification, must ensure the availability of WIA rapid response assistance (described as “rapid response activities” in 20 CFR 665.300 and 20 CFR 665.310) and appropriate core and intensive services to workers covered by the petition. Under 20 CFR 665.300(a), which the Department also proposes to amend to address the broadened State responsibility to covered workers, regular rapid response activities follow either a permanent closure or mass layoff, or a natural or other disaster resulting in a mass job dislocation.

Proposed § 618.320(a) provides some flexibility for the Governor in providing rapid response activities to workers covered by a TAA petition where rapid response activities were already provided to those workers. In such cases, the Governor must review the rapid response activities already provided and determine whether it is necessary to provide additional information or assistance once the TAA petition is filed. The Governor may establish protocols and procedures for CSA and rapid response staff to ensure they use the most effective methods to notify workers about any additional benefits available to them under the TAA program. This advance collaboration becomes useful when the State learns of the filing of a petition at some time after the layoff has occurred.

Proposed § 618.320(b) encourages Governors to ensure access to appropriate core and intensive services (as described in WIA section 134(d)(2) and (3)) for workers covered by a TAA petition by using rapid response activity funding. During rapid response activities, the State rapid response staff, in coordination with the local One-Stop delivery system, assesses the needs of the individuals in the petition group, as well as the local and State resources available to support the workers. Use of rapid response activity funding to help individuals access core and intensive services can encourage a more rapid return to employment. In addition, where there are insufficient partner and other resources to provide the necessary complementary services to these individuals, the rapid response activity staff may participate in analyzing the information gathered through the needs assessment to help develop an application and secure WIA national emergency grant (NEG) funding to bring additional reemployment services into the area to support a more rapid return to employment.

Proposed § 618.325 discusses strategies to ensure the availability of a comprehensive array of services for adversely affected workers. Proposed paragraph (a) requires the CSA to collaborate with local workforce investment boards and other One-Stop partners, in accordance with the Reform Act, which requires the Secretary to use services provided under any other Federal law, “including the services provided through [O]ne-[S]top delivery systems described in section 134(c)” of the WIA. This regulation also encourages collaboration with other available programs, such as local faith- and community-based programs that may not be One-Stop partners, to increase the availability of services to adversely affected workers. This integration of service strategies arises from the requirement in section 235 of the Act that every reasonable effort be made to secure employment services, such as counseling, testing, placement services, and supportive and other services for adversely affected workers. Proposed § 618.325(b) introduces the topic of co-enrollment of workers in both TAA and WIA-funded programs. The Department believes that co-enrollment is the best means to accomplish integration of services, although the Department leaves the programmatic mechanism to accomplish this requirement to State and local program design. CSAs may enhance and expand co-enrollment to include multiple enrollments with a broader range of service delivery partners and programs. Multiple enrollment resources may include Wagner-Peyser activities, vocational rehabilitation services, and veterans' programs such as those provided by the Department's Veterans Employment and Training Service. Properly implemented, co-enrollment or multiple-enrollment of trade-impacted workers in the programs offered through the One-Stop delivery system, as well as early provision of rapid response services, will further the adjustment process and promote the most rapid possible return to employment for all workers. Co-enrollment or multiple-enrollment also allows covered individuals and adversely affected workers to receive supportive services that may assist them in a quicker transition to work.

Proposed § 618.330 requires CSAs to design an assessment process that affords workers enough time and information to consider, request, and enroll in training or obtain a waiver of the training requirement for TRA before expiration of the 8-week and 16-week deadlines for enrollment in training provided under section 231(a)(5)(A) of the Act.

Proposed § 618.335 discusses the requirements for an initial assessment of adversely affected workers; the first step in the process to determine whether the worker will need employment services and training and may meet the requirements for HCTC and ATAA. It should be noted that benefit information provided by the CSA to all adversely

affected workers as discussed in proposed § 618.820(f), should be no later than at the time of the initial assessment of the adversely affected worker. However, the CSA may provide this information earlier, to a worker covered by a petition upon its receipt by the Department and the Governor.

Proposed § 618.335(a) lists factors that must be considered to find the best approaches to reemployment that are tailored to a worker's particular circumstances. A review of the local labor market conditions will help the CSA determine if any jobs are available in the local area for which the worker could apply. A review of the workers' skills from previous jobs will help the CSA determine whether the worker will be able to use those skills in new available jobs, or whether the worker's skills are too specialized to be able to be transferred to other available jobs. A review of any significant barriers to employment that may prevent the worker from obtaining employment will help the CSA identify available training, such as remedial training to get a high school equivalency degree or to provide English language training, to address barriers to employment.

Proposed § 618.335(b) allows CSAs to use WIA initial assessments and assessments performed under other WIA partner programs, such as those performed under the UI profiling system to identify UI claimants who are likely to exhaust their UI benefits, as tools for providing an initial assessment, as long as these other assessments meet the specific requirements of paragraph (a) of this section. The use of partner programs' assessments can increase efficiency, ensure that workers quickly receive appropriate reemployment services, and quickly identify those workers requiring a more comprehensive assessment of their skills. The Department recognizes that the lack of uniform requirements for assessments means that some assessments may not meet all of the TAA requirements for an initial assessment. In this case the CSA may be required to supplement those assessments to acquire sufficient information.

Proposed § 618.335(c) explains the CSA's options for service strategies based on the information it gathers from the initial assessment. If a CSA determines there is suitable employment for the worker, and the worker agrees with this determination, then it will provide WIA core and intensive services. However, if the worker disagrees with the determination, then the CSA must provide the worker with a comprehensive assessment under proposed § 618.345 to be certain that the initial assessment is correct. If the CSA determines that no suitable employment is available for the worker, the CSA must perform a comprehensive assessment to develop a comprehensive service strategy for the worker and provide reemployment services funded under the Act, as described in proposed § 618.315. The CSA may also provide reemployment services not funded under the Act, as described in proposed § 618.310.

Proposed § 618.340 discusses the CSAs obligations to adversely affected workers not enrolled in training. Proposed paragraph (a) focuses on workers who are determined through an initial assessment to possess marketable skills for suitable employment and are reasonably expected to find employment at equivalent wages in the foreseeable future. This section recognizes that the “suitable employment” determination in the initial assessment took into account prevailing local labor market conditions, as required under proposed § 618.335(a)(1). Also, the CSA must provide for the worker to obtain referrals to suitable work, as defined in proposed § 618.110, whichever is applicable to the worker depending on whether the worker is collecting regular UC or extended benefits (EB)/TRA. Actual referrals to suitable work are necessary to enable the worker to meet the EB work test, which is a condition of TRA eligibility under section 231(a)(4) of the Act. The EB regulations appear at 20 CFR Part 615.

Proposed § 618.340(b) requires the CSA to develop a strategy to review the assessments of workers who may not be successful in a job search for suitable employment, bearing in mind the deadlines for other TAA benefits and services, such as TRA and training, when a worker has not received a training waiver. The review may result in the CSA developing a strategy to provide the worker with additional services to facilitate the search for suitable employment without TRA-approved training. For those workers who received a training waiver for marketable skills, as provided under proposed § 618.725(b)(2), the review should be part of the periodic review of waivers issued under proposed § 618.725(b) to determine whether the conditions for which the CSA issued the waivers continue to exist, which is required under paragraph (e) of that section. The review also may result in the CSA revoking a training waiver and, or initiating a comprehensive assessment in preparation for enrollment in training.

Workshops provided through WIA or Wagner-Peyser Act programs can assist those workers with marketable skills to obtain the necessary job search skills. The TAA program also provides important cash assistance to help with this job search process, such as reimbursement for Job Search Program (JSP) expenses, and job search allowances for out of area job searches (described in subpart D, infra) and relocation allowances (described in subpart E, infra). Nonetheless, in scheduling services to be provided after their review of a worker's assessment and progress in finding employment, CSAs must allow enough time to complete a comprehensive assessment, as well as any career counseling necessary for the worker to make an informed training decision and maintain eligibility for TRA.

Proposed § 618.345 discusses the comprehensive assessment that the CSA must arrange for each worker seeking TAA approval of a training program. The comprehensive assessment must update determinations in the initial assessment regarding the worker's skills, aptitudes, and abilities (including reading and math levels), and consider the worker's interests as they relate to employment opportunities that are in demand either in the worker's commuting area, as defined in proposed § 618.110, or, where there is no reasonable expectation of employment in the commuting area, outside the commuting area if the worker is interested in relocating. The purpose of requiring the comprehensive assessment is to assure that cooperating State agencies gather relevant information that will help the worker in selecting appropriate training, thus increasing the worker's chances of successfully completing training and finding sustainable employment afterwards.

Proposed § 618.350 requires the CSA to prepare an IEP, as defined in proposed § 618.110, for any worker who receives a comprehensive assessment. The IEP must document the results of the comprehensive assessment and document a service strategy to provide the worker with needed services for reemployment, and it must also provide specific documentation on four specific items. Those four items are: (1) Whether the six criteria for training approval in § 618.610(a) through (f) or for issuing a training waiver in proposed § 618.725 have been met; (2) the type of training proposed, if any; (3) any additional services the worker needs to obtain employment, including intensive services, supportive services, and post-

training and follow-up services, as required in proposed § 618.360(b); and (4) any financial prearrangements for the payment of approved training costs (as described in proposed § 618.625(c)), as well as any amendments to the training program and any subsistence or transportation payments, with the basis for its calculation.

Proposed § 618.355 describes the knowledge and abilities that the staff performing the initial assessment should possess because the initial assessment is critical to proper functioning of the TAA program. These skills include: (1) An understanding of the local labor market; (2) knowledge of local employer skill demands and hiring prerequisites, such as educational requirements and professional certifications, and the sets of skills workers from various occupations are likely to possess; (3) the ability to identify transferable skills that a worker may possess that would be of interest to other local employers outside of the individual's present occupational area; (4) the ability to quickly evaluate a worker's knowledge of and ability to implement job search strategies with little or no assistance; and (5) the ability to identify a worker's apparent employment barriers that will require additional training and counseling. Because of the importance that the Department places on the assessment process and its central role in providing effective and efficient services to adversely affected workers, the Department believes that having qualified and knowledgeable staff to perform the assessment function is critical to the proper functioning of the TAA program.

Proposed 618.360 requires CSAs to continue to provide all workers enrolled in approved training programs access to the reemployment services available under proposed § 618.310 and proposed § 618.315 to assist workers as they make the transition from trainee to employee. The CSAs also must provide follow-up services, including placement and other appropriate supportive services, to adversely affected workers upon their completion of training. Such follow-up services protect the large financial investment the program made in training the worker by helping workers in need of such services make the transition back into the workforce.

Proposed § 618.365, which implements section 296(d) of the Act (19 U.S.C. 2401e(d)), requires the CSA to provide employment services to agricultural commodity producers who are entitled to cash benefits under the TAA for Farmers program administered by the U.S. Department of Agriculture. These individuals may receive training (including subsistence and transportation allowances), but they are not entitled to any other benefits under the TAA program.

Subpart D—Job Search Allowances

Subparts D and E address job search and relocation allowance provisions. Proposed subpart D keeps the 20 CFR Part 617 requirements intact concerning allowances for job searches outside the commuting area. For purposes of clarity, these subparts also contain various editorial and procedural changes, but most changes do not affect the substantive requirements in the current program regulations. Proposed subpart E covers relocation allowances available to individuals who obtain suitable employment outside their commuting area. Major changes in subparts D and E include:

• Changes the eligibility requirement for both job search and relocation allowances that there be no “suitable work” (a state UI definition) available in the local area to the requirement that there be no “suitable employment” (a national TAA definition) available in the local area. Since “suitable employment” is generally work at higher skill levels and wage rates than is “suitable work,”—meaning that a job is less likely to meet the higher “suitable employment” standard and that such jobs will therefore less likely be available—the proposed change would make it easier to qualify for a job search allowance but possibly make it harder to qualify for a relocation allowance.

• Increases the limit for job search allowance reimbursement per individual per certification from $800 to $1,250, as well as the lump-sum payment for relocation from $800 to $1,250.

The first section of subpart D, proposed § 618.400, revises 20 CFR 617.30 to reflect the goal of providing a job search allowance to help the worker secure “suitable employment,” as defined in section 236 of the Act, instead of merely assisting the worker in finding a job that is “suitable work.” As discussed earlier in this preamble, the Department believes that this change will meet the intent of the Act by encouraging workers to find better paying jobs.

Proposed § 618.405 describes the application process but differs from the existing regulations at 20 CFR 617.31 on when to file an application. Under the current regulations, an individual who is covered under a petition and who is totally or partially separated may apply for a job search allowance before a certification is issued. Proposed § 618.405 changes these procedures to require that applications for job search allowance be accepted only after a certification has been issued. Thus, all references in proposed subpart D are to “adversely affected workers” and not to “individuals” as in 20 CFR part 617, subpart D. This change is consistent with paragraph 237(a)(1) of the Act, which provides that “an adversely affected worker covered by a certification” may file an application for a job search allowance. The Department proposes to eliminate pre-certification applications for job search allowances to avoid unrealistic expectations for reimbursement. Further, because the Department has made great strides in reducing the time in which determinations are made on petitions, the Department believes there is less need to permit pre-certification applications. The Department has reduced the average processing time for petitions from 103 days in 2002 to less than 28 days presently. Thus, for most workers, requiring certification prior to filing a job search application will result in only a short delay in filing and no delay in payment because only adversely affected workers may receive a job search allowance. This approach is similar to that of many assistance programs that generally do not reimburse individuals for activities conducted with their own resources prior to the individual becoming eligible for assistance.

Proposed § 618.405(c) also incorporates the one change that the Reform Act made to the time limits within which a worker must request a job search allowance. Prior to its amendment, section 237(b)(3) of the Act required that a worker apply for a job search allowance within 182 days after concluding training approved under the Act, and 20 CFR 617.31(c)(2) contains this time limit. However, the Reform Act amended this time limit by adding the condition: “unless the worker received a training waiver under section 231(c).” The Department interprets this statutory amendment to mean that a worker who received a training waiver before entering an approved training program is not entitled to the 182-day period after the conclusion of approved training to apply for a job search allowance. Rather, the worker must file a job search allowance application within the same 365-day deadline applicable to other workers under section 237(a)(2)(C) of the Act.

Proposed § 618.410 sets forth the eligibility requirements for job search allowances. The significant difference between this provision and 20 CFR

617.32 is that 20 CFR 617.32(a)(4) requires a CSA to determine that “suitable work” is not available in the commuting area and that the worker has a reasonable expectation of obtaining suitable work of a long-term duration outside the commuting area. Proposed § 618.410(a)(4) substitutes “suitable employment” (as defined in § 618.110) for “suitable work.” “Suitable employment” is generally work at higher skill levels and wage rates than is “suitable work.” The Department believes this change will increase the availability of job search allowances to adversely affected workers so that these workers will have the financial ability to conduct job searches outside their commuting area. The requirement in 20 CFR 617.32(a)(3) is not included because proposed § 618.315(b) already requires CSAs to provide reemployment services and the Act does not contain this particular registration requirement for job search allowance eligibility.

Proposed § 618.410(a)(4) implements the new requirement that the worker has not previously received a relocation allowance under subpart E under the same certification to clarify that job search allowances are inappropriate following receipt of a relocation allowance since a worker has already obtained work to qualify for such relocation allowance.

Proposed § 618.410(a)(5) allows an individual 30 calendar days within which to complete a job search, while 20 CFR 617.32(a)(5) provides “a reasonable period not exceeding 30 days after the day on which the job search began” within which to conduct a job search outside the commuting area. This change is made to simplify and clarify the rules for completing job searches. Proposed § 618.410(a)(5) also adds language that the job search must begin after the date of certification, which corresponds to the change in proposed § 618.405(b) regarding the application for job search allowances after issuance of a certification.

Proposed § 618.410(b) describes when a job search is complete and comports with 20 CFR 617.32(b). A job search is not complete until the worker has obtained a job or has contacted each employer the worker planned to contact or to whom the worker was referred by the CSA or other One-Stop partner.

Proposed § 618.415 describes the CSA's responsibilities and introduces the terms “liable State” and “agent State” for delineating the responsibilities between CSAs with respect to job search allowances when a job search occurs in a different State. Because funding is limited, paragraph (a) requires that before approving a job search payment, a CSA must determine that job search funds are available for the fiscal year in which the job search activity takes place. The only proposed change under paragraph (b) is that it includes the employer contact verification requirement found at 20 CFR 617.32(c), and thereby requires a CSA to verify the worker's contracts with employers identified in both the worker's own job search plan and through referrals.

Proposed § 618.420 follows the current regulations at 20 CFR 617.34, but increases the maximum amount available for allowances from $800 to $1,250 based upon the 2002 Amendments. Proposed § 618.420(b) limits reimbursement to the statutory dollar limit instead of a particular dollar amount so that, if Congress later increases the dollar amount, these regulations will not have to be amended.

Proposed § 618.425, like 20 CFR 617.35, requires a worker to provide supporting documentation in order for payment to be made upon completion of a job search and require the CSA to reimburse the worker promptly. Paragraph (a) of this proposed section changes the language in 20 CFR 617.35(a) by eliminating temporal references because, under the changes in proposed § 618.405(b), the CSA will accept applications for job search allowances only after a certification is issued. Further, paragraph (a) clarifies that job search allowance determinations are subject to the requirements of § 618.825 (determinations and notice) and § 618.830 (appeals and hearings) and requires CSAs to include copies of job search allowance applications and determinations in the worker's case file.

Proposed § 618.425(c), like 20 CFR 617.35(c), permits the CSA to advance up to 60 percent of the expected cost to be paid to the worker.

Proposed § 618.430 implements the Reform Act amendment to section 237(c) of the Act to allow an adversely affected worker participating in a job search program [JSP] approved by the Secretary reimbursement for necessary expenses, including transportation and subsistence allowances, related to their participation in an approved JSP within or outside their commuting area, subject to available funding.

Subpart E—Relocation Allowances

This proposed subpart covers relocation allowances available to workers who obtain suitable employment outside their commuting area. For purposes of clarity, this proposed subpart makes editorial and minor procedural changes, most of which do not affect substantive requirements. The proposed changes are discussed below.

Proposed § 618.500 revises 20 CFR 617.40 to reflect the goal of providing a relocation allowance to help the worker relocate to secure “suitable employment,” as defined in section 236 of the Act, instead of merely assisting the worker in relocating to begin “suitable work” outside the worker's former commuting area (but inside the United States). As discussed earlier in this preamble, the Department believes that this change will meet the intent of the Act by encouraging workers to find better paying jobs.

Proposed § 618.505 retains the general discussion of relocation allowances found in 20 CFR 617.40, but eliminates the reference to the “head of the family.” Instead, it authorizes payment to the adversely affected worker in the family who first applies for the relocation allowance, if otherwise eligible. The Department believes this minor change makes the test easier to administer by eliminating the need under the current regulations for the family to produce financial records indicating which family member maintains a home for the family by providing more than half the cost of maintenance.

Proposed § 618.510 describes the application process for a relocation allowance but differs from 20 CFR 617.41 on when to file an application. While proposed paragraph (a) is essentially unchanged from 20 CFR 617.41(a), proposed paragraph (b) allows a worker to apply for a relocation allowance only after a certification covering that worker is issued. Thus, all references in proposed subpart E are to “adversely affected workers” and not to “individuals” as in 20 CFR Part 617, subpart E. This is consistent with section 238(a)(1) of the Act, which provides for “[a]n adversely affected worker covered by a certification * * * [to] file an application for a relocation allowance. * * *” A worker who is not covered by a certified petition may relocate using personal funds to take advantage of an opportunity outside the commuting area, but the worker will not be reimbursed for the costs of that relocation. As previously noted in the preamble discussion of proposed § 618.405 (on job search allowances), the Department is concerned that permitting pre-certification applications will raise false expectations. Also, because of the substantial reduction in the average processing time for petitions noted in that discussion, there will only

be a short delay in workers being able to file applications.

Proposed § 618.510 also contains the basic requirement that the relocation may only be approved after a worker files an application and before the relocation is undertaken. The time limits for filing an application in proposed § 618.510(c) are the same as in 20 CFR 617.41(c), except that the Reform Act eliminated the second time limit for filing an application for a relocation allowance (as it did for filing an application for a job search allowance) for those workers who receive a training waiver. Prior to its amendment, section 238(a)(2) of the Act required that the individual must apply for the relocation allowance within 182 days after concluding training, which is reflected in 20 CFR 617.41(c)(2). The Reform Act amended this requirement by adding the condition “unless the worker received a waiver [of the participation in training requirement] under section 231(c).” The Department interprets this statutory amendment to mean that a worker who received a training waiver before entering an approved training program is not entitled to the 182-day period after the completion of approved training to apply for a relocation allowance. Thus, whenever the CSA grants a training waiver to a worker under proposed § 618.725, the worker must file for a relocation allowance within the 425-day time limit after the date of certification or the worker's last total separation under § 618.510(c)(1). Eliminating the 182-day period whenever the CSA grants a training waiver is consistent with the plain language of section 238(a) (2)(E)(ii) of the Act.

Proposed § 618.515 on eligibility for a relocation allowance retains essentially the same requirements as 20 CFR 617.42 (Eligibility) and 20 CFR 617.43 (Time of relocation) but combines these sections, edits them for clarity and makes three significant changes. The requirement in 20 CFR 617.42(a)(5) is removed because proposed § 618.310 of subpart C now requires CSAs to provide reemployment services and the Act does not contain this particular for relocation allowance eligibility.

There is an important difference between proposed § 618.515(a)(5) and 20 CFR 617.42(a)(6) in the definition of eligibility. The proposed provision substitutes “suitable employment” (as defined at proposed § 618.110) for “suitable work.” Therefore, before granting a relocation allowance, the CSA must determine that a worker has no reasonable expectation of securing “suitable employment” in the commuting area. This is consistent with the treatment of job search allowances and is a higher standard than the “suitable work” standard that is used in Part 617. Using “suitable employment” in the eligibility criteria for relocation allowances restricts the jobs for which a relocation allowance may be paid. Nevertheless, the change furthers the purpose of the TAA program, and the use of relocation allowances in particular, by improving the financial ability of workers to obtain new jobs with compensation and skill levels at or near those of the jobs from which they were separated.

Two other significant differences between § 618.515 and current regulations involve the timing of relocations. First, proposed § 618.515(a)(6) integrates 20 CFR 617.42(a)(7) and 20 CFR 617.43 and simply states the two statutory 182-day time limits for beginning a relocation (instead of stating that a worker must begin a relocation “within a reasonable period”). Paragraph (a)(6) continues to refer to a “reasonable period” for the time period for completing the relocation, while retaining the required factors found at 20 CFR 617.43(a) that a CSA must consider in determining whether a worker has completed the relocation within a reasonable time.

The second significant difference involves the statutory 182-day time limit in which the relocation must occur. The Reform Act amended section 238(c)(2) of the Act, which requires the worker's relocation to occur within 182 days after the conclusion of an approved training program, by adding at the end of the sentence the condition “if the worker entered a training program approved by the Secretary under section 2296 [section 236 of the Act] (b)(1) and (2) [providing subsistence and transportation payments for workers in training outside the commuting area].” The Department interprets section 238(c)(2) of the Act to mean that only a worker approved by the CSA, under proposed § 618.640(c) and (d), to receive subsistence and transportation payments for training at facilities outside the worker's commuting area, may use the 182-day time limit after the conclusion of training within which to relocate. Workers not approved by the CSA to receive such subsistence and transportation payments, that is, workers who take their training within their commuting area, are ineligible for the additional 182-day time limit after the conclusion of training. Instead, their relocation must occur within the 182-day time limit after filing the application for a relocation allowance under § 618.515(a)(6)(i)(A).

Proposed § 618.525 simplifies, edits and updates the requirements for determining the amount of relocation allowances under 20 CFR 617.45, 617.46 and 617.47. In general, a relocation allowance includes 90 percent of the travel and subsistence costs of the worker and their family to reach their new home, 90 percent of the cost of moving household effects, and a lump sum payment equal to three times the worker's average wage, not to exceed $1,250. This lump sum payment was raised from $800 by the Reform Act. Proposed § 618.525(a)(4), however, does not refer to a lump sum dollar amount. Instead, it simply provides the citation to section 237(b)(2) of the Act so that, if Congress later increases the amount, these regulations will not have to be amended.

Proposed § 618.525 requires CSAs to follow the Federal Travel Regulations (FTR). Proposed § 618.525(a)(2) sets reimbursement amounts for the family's meals and lodging at 90 percent of the lower of their actual meals and lodging costs or one-half the applicable prevailing per diem rates in the FTR. The current per diem rates can be found on the Internet at the following Web site:

http://www.gsa.gov.

Proposed paragraph (a)(1) refers to 41 CFR Parts 301-311 (travel) and proposed paragraph (a)(3) refers to 41 CFR Part 302 (movement of household goods). Proposed § 618.525(a)(3)(ii) increases the allowable amount of insurance coverage of such household goods and effects to $40,000 from the current $10,000 found in 20 CFR 617.47(a)(1). The Department notes that moving a house trailer or mobile home, as permitted under proposed § 618.525(a)(3)(i), has special requirements under the FTR, at 41 CFR 302-10, of which the worker should be made aware prior to planning such a move. The specific sections of the FTR may be accessed on the Internet at the following Web site:

http://www.access.gpo.gov/nara/cfr/waisidx_02/41cfrv4_02.html#301-1.

Proposed § 618.530 on the time and method of payment of a relocation allowance serves the same purpose as 20 CFR 617.48, although the proposed rule is edited for clarity and simplified. No relocation allowances may be paid until the worker is covered under a certification, makes a timely application, and is otherwise eligible, and the CSA must promptly make and record determinations, as well as make prompt payment of, relocation allowances. Any advance payments of relocation costs will be made at the time of the relocation or as close to the time of the scheduled relocation as possible,

but no more than 10 days before scheduled departure. Upon completing the relocation as described in paragraph (f) of proposed § 618.530, the worker and the cooperating State agency will reconcile the advances and costs and the worker will either receive the balance of the allowance or repay any advance amount that might be due.

Subpart F—Training Services

Proposed subpart F governs TAA training. TAA approval of a training program entitles a worker to payment of the costs of the training, subject to a number of limitations included in this subpart. Section 236(a)(6) of the Act does, however, permit other funding sources to pay all or part of the costs of a TAA-approved training program. Participation in a TAA-approved training program is an eligibility requirement for TRA, as explained in subpart G. Major changes include:

• CSAs would be required to ensure that every worker has a comprehensive assessment leading to the development of an IEP to facilitate appropriate training for the worker.

• Clarifying language is added to the six criteria provided in the law that will enable CSAs to better determine what constitutes approvable training.

• Up to 26 additional weeks of training is provided for individuals who need remedial education as part of their training program, for a total of up to 130 weeks of training.

• Excludes the purchase of computers as part of the cost of a training program.

• Allows adversely affected workers who are military reservists ordered to perform active duty that interrupts their training program to resume, repeat, or begin a new training program upon discharge.

• Provides workers training flexibility by allowing CSAs to permit individuals to amend their training programs.

• Allows the approval of part-time training when combined with employment, which gives workers the option to continue working while participating in training.

• Requires the use of eligible training providers approved under WIA to facilitate quality training and co-enrollment for trade affected workers.

• Expands worker training options by permitting distance learning for all or part of a worker's program where the final degree or certificate is equivalent to what would have been received if the training had been conducted on campus.

• Allows the Department to use a formula to allocate TAA training funds to enable states to maximize timely training opportunities for workers.

• Permits the worker to continue training at his or her own expense when the appropriation for training funds has been exhausted. This enables a worker to continue to receive TRA and HCTC.

• Introduces customized training as an allowable activity under the TAA program to meet the needs of an employer or group of employers.

• Makes it easier for the worker to attend employer-paid training by allowing the state to assume any unfunded portion of partially employer funded programs and by allowing the state to assume any liability if the worker is unable to successfully complete the training.

• Makes transportation costs for travel to and from training payable for miles outside the worker's commuting area.

• Facilitates the largest number of workers served by allowing a CSA to determine a maximum reasonable cost for training for the state or each local area.

• Provides training services to individuals entitled to cash benefits under the TAA for Farmers program administered by the U.S. Department of Agriculture.

Proposed § 618.600 explains that the purpose of an approved training program is to assist an adversely affected worker to obtain skills leading to a new job as quickly and effectively as possible.

Proposed § 618.605 discusses general procedures for adversely affected workers to apply for training, as well as other procedures CSAs must follow in making determinations on applications for training. Proposed paragraph (a) requires CSAs to ensure that every worker has a comprehensive assessment leading to the development of an IEP, as described in proposed §§ 618.345 and 618.350, before approving an application for training. The use of a comprehensive assessment in the development of a worker's IEP is essential to ensure the proper coordination and use of reemployment services to develop a successful training program.

Proposed § 618.605(b)(1) follows 20 CFR 617.22(d) on the use of forms when applying for training, but simplifies the current regulatory language to describe more accurately the process by which the worker chooses a training program and applies to the CSA for approval based on statutory criteria. While a worker may seek assistance from a CSA in selecting a training program, ultimately it is the worker and not the CSA who decides whether to apply to a particular training program. Proposed paragraph (c) differs from 20 CFR 617.22(e) by adding that the CSA, in making determinations on training and TAA-funded subsistence and transportation payments under proposed § 618.640, must keep copies of all applications and determinations in the adversely affected worker's case file. The Department proposes adding this language to ensure that a worker's case file is complete and that it contains relevant information about a worker's request for training.

Proposed § 618.605(d) slightly changes 20 CFR 617.23(a) by clarifying that CSAs are not required to create new training programs or develop new curricula where none currently exist. Nonetheless, the Department strongly encourages CSAs to use all necessary means to find appropriate training where a significant void in training opportunities exists. CSAs, in collaboration with the local One-Stop delivery system and other partners, should explore how to make new training opportunities available either by approving out of area training or by encouraging training providers to provide needed training in the local area, as well as exploring ways in which on-the-job training (OJT), customized training, and other training programs can be adapted to accommodate workers in areas that lack training opportunities.

Proposed § 618.610, which corresponds to 20 CFR 617.22(a)(1) through (a)(6), implements all six statutory criteria for training approval. The introductory language adds a new requirement that a CSA must refer to a worker's comprehensive assessment and IEP before approving training because they will be important tools for measuring the proposed training against the approval criteria.

Criterion 1, implemented by proposed § 618.610(a), requires that there be no suitable employment available for the adversely affected worker. Section 236(e) of the Act provides the definition of “suitable employment, which appears at proposed § 618.110. Proposed paragraph (a) generally follows 20 CFR 617.22(a)(1)(i), but includes the condition that a CSA must deny training approval if the worker is notified of a specific recall to the firm in the same or essentially the same job that is expected to be permanent. When recalls are scheduled in the foreseeable future, workers clearly do not require training because suitable employment is available to the worker. In that case, it is appropriate for the CSA to grant a waiver of the training requirement under the recall provision at proposed § 618.725(b)(1) to allow the worker to qualify for TRA while awaiting the recall. Proposed paragraph (a) also

explores more fully the concept of “no reasonable prospect of such suitable employment in the foreseeable future” by requiring the CSA to look at both the worker's skills and the local or appropriate out of area labor market indicators as well as the likelihood of recall.

Criterion 2 (the worker would benefit from the appropriate training), implemented by proposed § 618.610(b), contains similar requirements to the current regulation at 20 CFR 617.22(a)(2)(i). However, instead of referring to “job readiness,” criterion 2 emphasizes that the training is expected to improve the worker's chances of obtaining and retaining “sustainable employment at higher wages for the worker than in the absence of training.” This change emphasizes the Department's belief that approved training should provide the worker with the skills necessary to remain employed throughout a career.

Proposed § 618.610(b)(2) follows the current regulations at 20 CFR 617.22(a)(2)(i) in requiring that a worker be capable of undertaking, making satisfactory progress in, and completing the training. However, the Department proposes eliminating the phrase “mental and physical capabilities” that is currently contained in 20 CFR 617.22(a)(2)(i) and substituting the phrase “knowledge, skills, and abilities” as the test for determining whether a worker can undertake, make satisfactory progress in, and complete the training in order to eliminate any suggestion that a CSA or subrecipient may lawfully take the disability or disabilities of a qualified worker into consideration when determining eligibility for training. Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and its implementing regulations at 29 CFR Part 32 and, if applicable, WIA section 188 (29 U.S.C. 2938) and its implementing regulations at 29 CFR Part 37, prohibit such consideration. Both 20 CFR Part 32 and 29 CFR Part 37 define the circumstances under which a particular individual with a disability may be considered “qualified” for a program or activity. See the definition of “qualified handicapped individual” in 29 CFR 32.3 and 29 CFR 37.4. For the same reasons, the same change was made in § 618.610(e) and “knowledge, skills and abilities” replaces the word “capabilities” in § 618.610(f). For further information about these requirements, contact the Department's Civil Rights Center (CRC) as directed in the regulatory text of proposed § 618.875(i)(3).

Proposed § 618.610(b)(3) contains a new requirement that a CSA must not approve applications for training programs that would result in seasonal employment of such short duration and minimum compensation that a worker cannot achieve self-sufficiency, as defined by the Local Workforce Investment Board under 20 CFR 663.230. The Department believes that training that would result in this type of seasonal employment does not benefit the worker and would be an inappropriate use of limited training funds.

Criterion 3 (there is a reasonable expectation of employment following the completion of such training) is implemented by proposed § 618.610(c)(3) and corresponds to 20 CFR 617.22(a)(3). It provides that the CSA must assess, based on labor market information about present and future employment conditions and trends, whether the skills and education acquired while in training is likely to allow the worker to find a job allowing the worker to achieve self-sufficiency, as defined by the State or Local Workforce Investment Board under 20 CFR 663.230.

Criterion 3 would not require that TAA-approved training must lead to a job or that the CSA must create training that leads to jobs for adversely affected workers. The Department recognizes that there are situations in which tight local labor markets or significant barriers to employment may make it difficult or impossible to identify immediate job opportunities for workers. The same workers may, however, benefit from training by improving their abilities to compete in the labor market by gaining skills needed to compete for jobs. The Department proposes to interpret criterion 3 flexibly enough to allow CSAs to approve training that they determine will lead to the acquisition of skills that will significantly improve a worker's prospects of obtaining a job in the local labor market, even if job opportunities after completion of the training cannot be identified.

Accordingly, proposed paragraph (c)(1) expands upon the statutory language discussed in 20 CFR 617.22(a)(3) by expressly providing that a reasonable expectation of employment does not require that employment opportunities for a worker be available, or offered, immediately upon the completion of training. However, it may not be realistic to approve training in an occupation in which there has been a trend of fewer and fewer job openings over some period of time, or where the industry in which the retraining is proposed has been laying-off workers with skills similar to those for which training is requested. This criterion requires TAA and One-Stop delivery system staff to continually update their knowledge of the local labor market and its trends.

Proposed paragraphs (c)(2) through (c)(5) do not have counterparts in current regulations. Paragraph (c)(2) allows CSAs to use the demand occupation list maintained by the Local Workforce Investment Board, as required in the WIA regulations at 20 CFR 661.350 in determining whether there is a reasonable expectation of employment following training. Use of this common information source reinforces the relationship of the partner programs in the One-Stop delivery system and encourages the Local Workforce Investment Board to think broadly about the types of workers who that system serves. WIA permits each Local Workforce Investment Board to define “demand occupation” based on its unique labor market conditions, trends, and employer-identified skill needs. As the staff of a required partner in the One-Stop delivery system, TAA program staff should participate in discussions about how demand occupations are determined and the content of the list. Proposed § 618.610(c)(3) places a new obligation on the CSA to document that there is a reasonable expectation of employment in the planned area of relocation when a worker desires to relocate.

Proposed § 618.610(c)(4) recognizes that a “demand for one” can exist in the local labor market, as long as that demand can be documented by the CSA with evidence that an employer intends to hire the worker upon successful completion of the training. This provision permits the CSA to determine that a reasonable expectation of employment exists in an occupation that may be a valid career choice, but for which there are very limited numbers of jobs in rural areas or in larger workforce areas where only a few skilled specialists are needed to meet the local demand (e.g., taxidermist or underwater boat repairer). Proposed paragraph (c)(5) recognizes that self-employment is a viable option under existing market conditions, even where there is no expectation that employers have positions available in a given occupation upon completion of training.

Criterion 4 (training is reasonably available) is implemented by proposed § 618.610(d) and corresponds to 20 CFR 617.22(a)(4) but has been simplified. This criterion requires that training be reasonably available to the worker from either governmental agencies or private sources and refers to the list of possible sources of approved training contained

in proposed § 618.620, noting that the list is not exhaustive. It eliminates the requirement in current 20 CFR 617.22(a)(4)(ii) that first consideration be given to training within the worker's normal commuting area and that training outside the commuting area should only be approved if such training is not available within the commuting area or would cost less. A similar requirement now appears in proposed § 618.610(f)(2)(ii) as part of the sixth criterion for training approval.

Criterion 5 (the worker is qualified to undertake and complete such training), implemented by proposed § 618.610(e), follows the requirements in 20 CFR 617.22(a)(5), but has been reorganized and some minor provisions added. Proposed paragraph (e)(1) adds a new requirement directing the CSA to consult the worker's IEP or comprehensive assessment. Proposed paragraph (e)(2) generally follows 20 CFR 617.22(a)(5)(ii), and stresses that the duration of the approved training must be commensurate with the worker's financial resources.

Criterion 6 (the training is suitable for the worker and available at a reasonable cost) is implemented by proposed § 618.610(f) and generally follows the current regulations at 20 CFR 617.22(a)(6). Proposed paragraph (f)(1) identifies the worker's comprehensive assessment and IEP as sources of information on the worker's knowledge, skills, and abilities, background and experience. The first sentence of 20 CFR 617.22(a)(6)(i) is not included because it is unnecessary.

Proposed § 618.610(f)(2) discusses reasonable cost, which has been and continues to be a critical determinant in approving training programs to ensure that training funds are expended wisely, are available for the maximum number of adversely affected workers, and can also adequately support workers to ensure that they will complete their selected training. Proposed paragraph (f)(2)(i) includes a new cost prohibition against using TAA funds to purchase personal computer equipment for adversely affected workers to own in order for them to engage in a training program that requires such equipment as a prerequisite. However, this provision allows CSAs to purchase personal computer equipment which it can then lend to those workers who are required to have such equipment for their particular training programs. Certain One-Stop systems using funds under WIA have successfully instituted similar loan arrangements for use of computer equipment. Therefore, if a training program requires the use of computer equipment, a CSA may not approve the training if it determines that the worker lacks access to the necessary computer equipment. This prohibition will help to ensure that purchases of personal computer equipment for workers to own will not deplete the TAA funds available for training and other benefits.

Since the amount of training funds is capped, the statute requires that training be approved only if it is “available at a reasonable cost,” and, once approved, a worker is entitled to payment of all the costs of the approved training, the Department believes it is important to assure that the costs of training are kept in check as long as the training is adequate to meet the worker's needs. Proposed § 618.610(f)(2)(ii) through (iv), as well as the proposed cost cap in § 618.650, seek to accomplish this cost containment in several ways. These paragraphs restate many of the requirements of § 617.22(a)(6)(ii) and (iii). These proposed paragraphs have not retained the requirement, in § 617.22(a)(6)(ii), that, in determining the reasonableness of the cost of training, the cost be compared with the costs of training workers in similar occupations. The Department believes that CSAs should have more flexibility in determining the reasonable cost of training, within the parameters set forth below.

Proposed § 618.610(f)(2)(ii) provides that the CSA must first consider the lowest cost training available in the worker's commuting area, if that training is of sufficient quality, content, and expected outcome to meet the worker's occupational goal as reflected in the worker's IEP, as developed under proposed § 618.340. A CSA may approve higher cost training if it is of higher quality, content, or expected outcomes or is expected to achieve comparable results in a significantly shorter duration. The Department intends that higher cost training not be approved unless there is a clear (“demonstrable”) difference in the quality and results of the training or unless the same results can be achieved in a significantly shorter time, which is consistent with the Act's intent to get workers back into employment as rapidly as possible. The words “demonstrably” and “significant” have been included in the regulatory language to make clear that there must be a real and substantial benefit from a more expensive training program in order for it to be approvable when a good and less expensive training program is available.

Proposed § 618.610(f)(2)(iii) consolidates 20 CFR 617.22(b) into this criterion 6. It provides that training in a selected occupational area may not be approved if (1) it requires an extraordinarily high skill level, and (2) the total costs of the training are substantially higher than the costs of other types of training that are suitable for the worker. The intent of the second clause is to require CSAs to choose the least expensive method of training that provides similar results for the worker. So, for example, if an on-the-job training opportunity would cost $2,000 and a classroom training course that would teach the same skills would cost $6,000, a CSA must approve the OJT opportunity.

Proposed § 618.610(f)(2)(iv) follows 20 CFR 617.22(a)(6)(iii)(C) in prohibiting approval where transportation or subsistence payments for training outside the worker's commuting area add substantially to the total cost of training, if other appropriate training in the commuting area is available at a lower cost. Proposed paragraph (f)(2)(v) introduces a new restriction. A CSA may deny approval of training when its costs exceed the limit on the amount of training per worker set by a CSA, unless that agency makes an exception based upon individual and exceptional circumstances, as provided in proposed § 618.650(a). The preamble discussion of § 618.650 explains this training cap.

Proposed § 618.615 discusses the various limitations on a CSA's approval of a training program. In particular, proposed paragraph (a)(2) contains a new requirement that CSAs consider factors such as a worker's full- or part-time non-suitable employment, as described in proposed § 618.630, childcare considerations, and the worker's course selection.

Proposed § 618.615(a)(3) corresponds to 20 CFR 617.22(f)(2), which limits the maximum duration of any approvable training program to match the duration of training to the statutory limits on income support since, for most workers, the availability of income support is critical to the ability to engage in training. The Department interprets the Reform Act's addition of 26 weeks of TRA for adversely affected workers who require remedial education, as discussed in proposed § 618.755, to mean that Congress intended to match the maximum number of weeks of training with the maximum number of available weeks of income support (UI plus TRA). Therefore, paragraph (a)(3)(i) changes the current 104-week regulatory limit on weeks of training to include up to an additional 26 weeks of training for workers whose approved training includes remedial education, for a total

number of weeks of training not to exceed 130 weeks.

This proposed paragraph also clarifies the existing regulation by specifically stating the current program requirement of counting consecutive calendar weeks when measuring the duration of training. This ensures that the number of weeks of an approved training program does not significantly exceed the number of weeks of UI plus TRA.

Proposed § 618.615(a)(3)(iii) does not have a counterpart in Part 617 because it concerns program changes adopted in the Reform Act. It requires the CSA to consult the worker's comprehensive assessment or IEP when determining the length of remedial education the worker needs, and permits a CSA to approve a training program consisting entirely of remedial education when such a program is appropriate for the worker. The Department proposes these measures to ensure that the duration of any remedial education component of a training program meets the worker's specific needs. The Department expects CSAs to approve remedial education programs when it is justified to help workers who need assistance with the basic skills of reading, writing, mathematics and/or language to obtain employment. When determining the type and length of remedial education appropriate for the worker, CSAs should assess the worker's basic skills to determine whether there are deficits in any area that necessitate remedial education. Remedial education may occur before, or while participating in, the requested training program.

Proposed § 618.615(a)(4) creates an exception to the duration of training requirements to meet the training needs of adversely affected workers who are members of a reserve component of the U.S. Armed Forces ordered to perform active duty service. Such workers should not be penalized for serving their country. The exception tolls the duration of training requirement so that those workers who return after involuntarily being called up to active duty service can re-enroll in a training program upon their return or even begin a new training program. The terms, notification procedures, and documentation requirements in proposed paragraphs (a)(4)(i) through (a)(4)(v) coincide with those in the Uniform Services Employment and Reemployment Rights Act (USERRA) (38 U.S.C. 4301-4333), which protects reemployment rights of workers called to military service. These procedural requirements differ from those in USERRA, 38 U.S.C. 4312, when necessary to conform to the situation of an adversely affected worker enrolled or participating in a TAA-approved program.

The Department invites comments on whether to allow other exceptions to the duration of approvable training programs and, if so, what exceptions might be appropriate. As is discussed above, a purpose of the proposed limits is to ensure that income support is available throughout the training period. However, the Department recognizes that not all workers need income support to complete training, and that some workers might have a need for a longer training program or to temporarily suspend training. Allowing exceptions could provide such workers more options. On the other hand, further exceptions could undermine the purpose of TAA to return a worker to worker as fast as possible.

Proposed § 618.615(b) greatly expands upon the current regulatory requirement for amending an approved training program. The second sentence of 20 CFR 617.22(f)(3)(ii) merely permitted an amendment “to add a course designed to satisfy unforeseen needs of the individual.” Proposed paragraph (b) recognizes that more substantial amendments may be necessary and sets forth the circumstances, and conditions, under which amendments, including the substitution of an entirely new program, may be made. Proposed paragraph (c) retains the single training program rule of 20 CFR 617.22(f)(2), but permits exceptions for amendments, as well as when an adversely affected worker is called for active duty as provided in paragraph (a)(4). Paragraph (c) thereby seeks to ensure careful expenditure of limited training funds in a manner that will meet the training needs of the greatest number of adversely affected workers.

Proposed § 618.615(d) corresponds to 20 CFR 617.22(f)(4) on full-time training, but differs significantly by permitting CSAs to approve part-time training. This section recognizes that a mix of training and employment suited to the worker's situation may achieve the sustained employment goal, and do so as quickly as possible. This will permit workers financially or otherwise unable to participate in full-time training to enroll in TAA program training opportunities to upgrade their skills. In particular, proposed paragraph (d)(2)(i) requires that the combination of part-time training and part-time employment must represent the equivalent of full-time employment as defined by the State UI law. However, the overall limitation on the duration of training under proposed § 618.615(b) remains the same.

Proposed § 618.615(d)(ii) provides that if the hours of work are reduced so that the combination of part-time employment and part-time training no longer represent the equivalent of full-time employment, the worker may complete that session or semester. However, the training approval must be rescinded beginning with the next session or semester, unless the combination of part-time employment and part-time training is changed to represent the equivalent of full-time employment by that time. Proposed paragraph (d)(2)(ii) recognizes that employers may reduce workers' hours of employment or terminate employment during an approved training program and protects a worker by allowing the worker to continue in training for a period of time or to find other non-suitable employment or to increase his/her training schedule to continue in the approved training program on a part-time basis.

Proposed paragraph (d)(2)(iii) also protects workers by requiring CSAs to ensure that workers understand the effects of part-time employment on receipt of UI and other TAA benefits, including the HCTC, to prevent their unknowingly losing benefits due to this choice. Even with these limitations on part-time training, this change provides a worker the option, if approved by the cooperating State agency, to choose a mix of training and employment that best suits the worker's situation. While the Department seeks to provide workers with greater flexibility in choosing training options, the primary goal of approved training remains returning the worker to employment as quickly as possible. CSAs should keep this goal in mind when determining whether to approve part-time training.

Proposed § 618.620 provides for the selection of training programs. Proposed paragraph (a) represents a change from the language at 20 CFR 617.23(d), which outlined the selection criteria for training programs and also evaluated a training provider's success by placement rates.

Proposed § 618.620(a) establishes the criteria for selecting training providers but also describes the procedures for approving affected worker requests for training by a training provider that is not on a State approved list. Under proposed § 618.620(a)(1), training other than OJT, customized training, or training for a limited demand occupation must be provided to an adversely affected worker through a program approved under the WIA eligible training provider provisions. Further, proposed § 618.620(a)(2) eliminates the reference to a training

provider's placement rates and requires the CSA to follow procedures under WIA when an affected worker requests training from a provider that has not been approved. Proposed § 618.620(a)(3) makes an exception from the requirement that a training provider must be on the State-approved list for training in limited demand occupations if the training meets the requirements described in § 618.610(c)(4).

The Department believes that the TAA requirements for approving a training provider for an adversely affected worker should follow the requirements of WIA. By following the WIA approval procedures, CSAs would be required to ensure the credibility and accountability of service providers and for providing quality performance information to participants. Following the WIA procedures would fulfill the requirement of section 239(e) of the Act, which requires the Department to coordinate services provided under TAA with those offered under WIA. It would also abandon the outdated “silo” approach to workforce development and make the various programs work together more closely, as the Reform Act amendments contemplate. This approach also is consistent with section 236(a)(1)(B) of the Act, which allows training to be approved if the CSA determines that the worker can benefit from the training. Requiring CSAs to use training providers approved under WIA provides an assurance that workers will receive the skills needed to reach their employment goals because the providers have demonstrated that they operate effective training programs.

To take account of possible amendments to the process of approving training providers in the WIA reauthorization, the Department refers to “eligible training providers” under WIA rather than specifically referring to the Eligible Training Provider list. This revision would allow the TAA training requirements to change as the WIA training provider requirements evolve through future legislation.

Proposed § 618.620(a) does not include the language in 20 CFR 617.23(d)(2) that describes the procedures for determining the types of training that may be provided, including the requirement to consult with local employers, appropriate labor organizations, and others. The Department believes this language is unnecessary because CSAs may only approve training by providers that have been approved under WIA requirements. Those requirements provide an opportunity for business and labor to comment on the selection procedures. Therefore, the Department believes that this process is sufficient to accomplish the same result without the additional language in 20 CFR 617.23(d)(2).

Proposed § 618.620(b) covers methods of training and generally follows 20 CFR 617.23(b), (c)(1) and (c)(2). Proposed paragraph (b)(2) provides for preference to be given to on-the-job training under proposed § 618.635 when firm-specific training is not practical. In determining whether to approve OJT, the CSA must consider the six criteria in § 618.610, as well as the availability of OJT and the worker's need for remedial education, and must inform the worker of the effect of such training on eligibility for HCTC. Because of these latter two new factors, added by the Reform Act, the Department has revised the language about the preference for OJT to make it clear that these new factors must be taken into account in determining what training method best fits an adversely affected worker's needs.

Proposed § 618.620(b)(4) is derived from 20 CFR 617.23(c)(2), but adds some new features. It describes institutional training methods and gives priority to training in public area vocational and technical education schools and community colleges (when it is determined that these schools are at least as effective and efficient as other institutional alternatives). The Department has added the reference to community colleges in recognition of their importance to the nation's overall training efforts. Proposed paragraph (b)(4) also expands the kinds of approvable institutional training specifically to include the increasingly popular option of distance learning, where a participant completes all or part of an educational or training program in a location remote from the institution hosting the program.

Proposed § 618.620(c), which provides a non-exclusive list of other specific types of approvable training programs, generally follows 20 CFR 617.24(d), (e) and (f). However, this provision adds vocational and technical education to the list of approvable types of training because they are included in the Carl D. Perkins Vocational and Applied Technology Education Act, which supercedes the Vocational Education Act of 1963, to which section 236(a)(1)(D) of the Act refers.

Proposed § 618.625 explicates a series of restrictions on payments for training programs. It follows 20 CFR 617.25(b), but has been rewritten, simplified and condensed to eliminate certain redundancies. The introductory paragraph contains new language that specifically allows the Department to use a formula to distribute the statutorily-capped training funds to CSAs, as permitted under section 236(a)(2)(B) of the Act. Distribution of TAA funds by formula adds predictability and regularity to the funding process, and allows CSAs to better plan for and manage the use of available training funds.

Of particular note, proposed § 618.625 (c) permits the CSA to share training costs with authorities administering other Federal, State, and private funding sources. It is based on section 236(a)(5)(E) and 236(a)(6) of the Act, allowing for the sharing of program costs, and follows 20 CFR 617.25(b)(2) and (b)(3). The CSA should take into consideration all appropriate and available funds to pay for a TAA training program, thereby reducing the amount of TAA training funds used to cover the costs. Within the One-Stop delivery system, it may be possible to leverage training resources, including resources for basic and remedial education, and specialized training for workers with disabilities, with other One-Stop delivery system partner programs.

Proposed § 618.625(c)(1) follows 20 CFR 617.25(b)(3)(ii)(A). It authorizes the CSA to share future costs of training where prior costs were paid from another Federal, State or private source, as permitted by section 236(a)(5)(E) and 236(a)(6) of the Act. However, it prohibits reimbursement from TAA funds of any training costs which were incurred and for which payment became due before the approval of the training program. For example, if a laid-off worker is enrolled in WIA-funded training (using a prearrangement discussed in proposed paragraph (c)(2)) in order to ensure that there is no delay in the worker's access to needed training because the semester will begin before the certification decision on the TAA petition, then TAA funds may not be used to pay for any costs of the training program incurred before certification.

Proposed § 618.625(c)(2)(i) corresponds to 20 CFR 617.25(b)(2)(ii) and (b)(3)(ii)(A), describing prearrangements and what is required in prearrangement agreements. These agreements may be entered into on a case-by-case basis to address specific training situations of workers or they may be part of an overall statewide strategy to effectively use and maximize available resources from TAA, workforce development and other programs. Prearrangements help prevent duplication of the payment of training costs, which is prohibited by section 236(a)(4)(B)(i) of the Act. They also help ensure that training costs that are

reimbursable under any other Federal law are not paid from TAA funds, which would violate section 236(a)(4)(B)(ii) of the Act. Proposed paragraph (c)(2)(i) also contains a new requirement that the CSA must enter into an agreement with another funding source to specify how the worker's training program will be funded if funds become available from another source to pay for training after TAA funds are committed. The Department has added this provision for clarity because it specifically covers a situation not previously addressed in the regulations.

Proposed § 618.625(c)(2)(ii) follows 20 CFR 617.25(b)(3)(ii)(B) and is derived from section 236(a)(6)(B) of the Act. This provision will help avoid duplicate payments of training costs by requiring the worker to enter into a written agreement with the CSA providing that TAA funds will not be applied toward, or used to pay, any portion of the costs of the training that the worker has reason to believe will be paid by any other source.

Proposed § 618.625(c)(3)(i) follows 20 CFR 617.25(b)(4)(ii)(C). As required by section 236(a)(4)(C) of the Act, the CSA must not consider payments to the worker under other Federal laws which do not directly cover the costs of training in determining the amount of training costs payable from TAA funds. Thus, Federal student financial assistance paid directly to a worker is not deducted from the worker's TAA benefits. This is also consistent with 20 U.S.C. 1087uu, which prohibits Federal student financial assistance from being considered in determining eligibility for, or the benefit amount, under any other Federally-funded benefit or assistance program. To effectuate this prohibition, proposed paragraph (c)(3)(i) eliminates the requirement of 20 CFR 617.25(b)(4)(ii)(C)(1) that payments of Federal student financial assistance to the worker be deducted from TRA.

Proposed § 618.625(c)(3)(ii) follows 20 CFR 617.25(b)(4)(ii)(C)(2) in requiring that when other Federal funding sources directly pay the training provider for training costs, the payments must be accounted for as a direct payment of training costs under that other Federal law. Thus, the CSA must deduct the amount of those other payments from the amount of TAA funds payable to the training provider in order to prevent duplication in the payment of training costs. Generally, the CSA will use a prearrangement agreement to assure proper accounting for these payments.

Proposed § 618.625(d)(2)(i), modified from 20 CFR 617.25(b)(5)(ii), prohibits the approval of a training program if the worker is required to pay training costs from TAA funds or any funds belonging to the worker from any source, subject to the limited exception provided in proposed paragraph (d)(2)(ii). This prohibition follows section 236(a)(1) of the Act, which provides that the worker is entitled to have the costs of approved training paid by the Secretary, subject to the annual training cap limitation under section 236(a)(2)(A). Proposed paragraph (d)(2)(ii) creates a new and limited exception that permits a worker to contribute personal funds for the payment of training costs when the Director determines that all available funds have been allocated, and only when the CSA determines that no other funding from other sources is available to pay for such worker's training program. Where the worker chooses to pay those unfunded costs, the CSA is not liable to pay those costs. Where the worker chooses not to pay the unfunded costs, the CSA must waive the training requirement in order to preserve any remaining basic TRA eligibility under proposed § 618.725(b)(6) on the basis that training is not available. Of course, waiving the training requirement will not benefit those workers who have begun receiving additional TRA before ceasing training due to lack of training funds. The Department expects CSAs to make every reasonable effort to find other funding, including WIA dislocated worker and NEG funds, to provide training when TAA funds are capped. This option should rarely be used and only as a last resort.

Proposed § 618.625(d)(2)(iii) is also new and addresses the situation where an employer or other entity agrees to fund training costs under conditions that may make the worker liable for all or a portion of those costs if certain conditions are not met. For example, an employer may offer separated employees paid training, but require the worker to reimburse the employer if the worker does not maintain a certain minimum grade point average (GPA). If the training is otherwise approvable under the Act, this proposed provision would allow the CSA to contract with an employer or other entity to assume any unfunded costs on the worker's behalf. Thus, in the above example, if the employer required the worker to maintain a 2.5 GPA or lose the paid training benefit, the worker could enroll in and receive employer-funded training, and, if the worker later achieves only a 2.4 GPA, the agreement would allow the CSA to assume the cost of training and not force the adversely affected worker to reimburse the employer. This provides the CSA with greater flexibility to leverage the use of nongovernmental funds made available by employers and others to adversely affected workers.

Proposed § 618.630, which follows 20 CFR 617.22(g), derives from section 236(d) of the Act. This provision addresses those workers who cannot find suitable employment, as defined in proposed § 618.110, but who obtain non-suitable employment. These workers, while employed, continue to be eligible for TAA training opportunities as long as their proposed training meets the approval criteria in proposed § 618.610. They may continue their employment while waiting for their selected training course to begin. Upon approval and enrollment in training, they may choose to terminate their employment, reduce the hours worked, or continue in either full- or part-time employment while taking training (as discussed in proposed § 618.615(c)). The workers may not be determined ineligible or disqualified for UI or TAA program benefits, including TRA, because they left work that is not suitable employment. Of course, choosing to continue in such employment, either part- or full-time, may have negative effects on UI and TAA benefits, including the possible loss of the HCTC. Proposed paragraph (a) requires CSAs to provide written notice to warn an adversely affected worker who continues in non-suitable employment on a part-time or full-time basis while undertaking approved training that, due to disqualifying income, the worker may not receive any UI or TRA, which might then forfeit the worker's eligibility for the HCTC. Employed TAA participants continue to be eligible for job search and relocation allowances before or upon completion of their TAA training, as discussed in proposed § 618.630(b).

Proposed § 618.635 modifies 20 CFR 617.25(a) to provide a new description of OJT that follows the statutory definition at section 247(16) of the Act. This section sets forth detailed requirements for OJT and customized training. OJT must be provided under a contract between the CSA and an employer, which may be in either the public or private sector. Related education necessary for acquisition of skills needed for the position should be provided to the extent possible, either as part of the OJT contract or separately as approved TAA training. Classroom training sponsored by the employer (known as vestibule training) may be part of OJT and may occur either before the actual “hands-on” training or may be provided for part of the day with the balance of the training day in a productive setting. The IEP and the OJT

contract should specify the duration of the OJT, which must be appropriate to the occupation for which the adversely affected worker is being trained. The duration of the OJT does not need to be the same for the same occupation for all workers as long as it allows the worker to become proficient in the occupation.

Proposed § 618.635(a)(5) contains the conditions required by section 236(c) of the Act for approval of the costs of OJT. Proposed paragraphs (a)(5)(i) through (a)(5)(viii) are essentially unchanged from 20 CFR 617.25(a)(1) through (a)(7) and (a)(9), except for minor language changes. Paragraphs (a)(8) and (a)(10) of 20 CFR 617.25(a) have been dropped because of the repeal of the previous language of section 236(c)(8) of the Act, which required the employer to certify to the Secretary that the employer will continue to employ such worker for at least 26 weeks after completion of training if the worker desires to continue employment and the employer does not have due cause to terminate the employment. In the Reform Act, Congress replaced the former section 236(c)(8) requirement with a requirement that the employer be provided reimbursement of not more than 50 percent of the wage rate of the participant for the cost of providing the training and additional supervision related to the training. This requirement is now included in proposed § 618.635(a)(4).

Proposed § 618.635(a)(6) follows the statutory provision requiring payments for OJT to be made to employers in equal monthly installments. Proposed paragraph (a)(6) changes 20 CFR 617.25(a) to eliminate confusion over this requirement and to clarify that it does not require equal dollar amounts be paid on a monthly basis. Instead, proposed paragraph (a)(6) permits CSAs to pay either in equal monthly dollar amounts or to compute the monthly payments based on the same rate of reimbursement for each hour worked, up to a maximum of 40 hours each week. Under this latter method of computation, the dollar amounts of the payments may fluctuate because, though paid at the same rate, the payments are based on different numbers of hours.

Proposed § 618.635(a)(7) is a reminder that proposed § 618.765(c) provides that workers engaged in OJT are not eligible for TRA because workers must be eligible for TRA to be considered eligible for the HCTC.

Proposed § 618.635(b) explains customized training, which is a new term under section 236(f) of the Act and is part of employer-based training under section 236(a)(5)(A) of the Act. Proposed paragraphs (b)(1) through (b)(3) set forth the specific requirements for customized training. For example, proposed paragraph (b)(3) requires the CSA to consider similar policies established under WIA by the State and Local Workforce Investment Boards in determining the portion, which must be at least 50 percent, of the cost of customized training paid by the employer.

Proposed § 618.640 discusses the requirements for TAA-funded subsistence and transportation payments and combines 20 CFR 617.27 and 617.28. Proposed paragraph (b) incorporates the determination and notice requirements of proposed § 618.825 and the hearings and appeals requirements of proposed § 618.835 for any determination by a CSA on an application for supplemental assistance.

Proposed § 618.640(c) and (d) correspond to, condense, and rewrite for clarity 20 CFR 617.27 and 20 CFR 617.28, respectively. Proposed paragraph (d)(3) sets forth the calculation of the transportation allowance, and provides that these payments are solely for those miles beyond the commuting area. This is a significant change from 20 CFR 617.28(b), which provides an allowance for the entire round trip distance where training is conducted out

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