Operating Instructions for Implementing the Amendments to the Trade Adjustment Assistance for Workers Program in Title V of the North American Free Trade Agreement (NAFTA) Implementation Act

DEPARTMENT OF LABOR

Employment and Training Administration

Operating Instructions for Implementing the Amendments to the

Trade Adjustment Assistance for Workers Program in Title V of the North

American Free Trade Agreement (NAFTA) Implementation Act

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of General Administration Letter No. 7-94.

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SUMMARY: This notice and publication of General Administration Letter

(GAL) No. 7-94 inform the States and cooperating State agencies of the

amendments to the Trade Act of 1974 in Title V of the North American

Free Trade Agreement (NAFTA) Implementation Act (Pub. L. 103-182).

These amendments affect the program of trade adjustment assistance for

workers and the administration of the program by the States pursuant to

State agreements with the Secretary of Labor. The amendments must be

implemented as of the respective dates set out in Title V and contained

in the GAL published with this notice

The Title V amendments supersede the statute in effect prior to

these amendments and affect the regulations at 20 CFR part 617 and 29

CFR part 90 currently in effect, to the extent that such prior law and

regulations are inconsistent with the amendments. Pending the issuance

of final regulations implementing the provisions of the Title V

amendments, the GAL published with this notice expresses the Department

of Labor's position on procedures for implementation of the amendments

and their respective meanings, and constitutes operating instructions

to the States.

The Title V amendments also require States to make available

certain assistance and services authorized under Title III of the Job

Training Partnership Act to workers whom the Governor preliminarily

finds to be adversely affected by NAFTA. The GAL informs the States of

this requirement, and of the potential for secondary workers in firms

supplying component parts to primary producers affected by NAFTA to

receive assistance under the Title III program. Additional information

concerning the use of Title III funds to assist these workers and other

individuals adversely affected by NAFTA will be forthcoming.

FOR FURTHER INFORMATION CONTACT:

For TAA Program information, contact: Marvin M. Fooks, Director, Office

of Trade Adjustment Assistance; Telephone: (202) 219-5555. For JTPA

Title III information, contact: Doug Holl, Office of Worker Retraining

and Adjustment Programs; Telephone (202) 219-5306. These are not toll

free numbers.

SUPPLEMENTARY INFORMATION: On December 8, 1993, the President signed

the North American Free Trade Agreement Implementation Act. The GAL

relates primarily to those provisions of Title V of the Act affecting

the TAA Program. Most of the provisions of Title V are in the form of

amendments to Chapter 2 of Title II of the Trade Act of 1974. Some of

the provisions of Title V are not in the form of amendments to the

Trade Act, however, they nonetheless must be given effect in

implementing the NAFTA-TAA program.

While the NAFTA-TAA program is generally similar to the existing

TAA program, it does differ in several ways:

--Governors have a specific role in the new adjustment assistance

program targeted to workers who may be displaced because of trade with

Canada or Mexico. State agencies also have new program

responsibilities.

--Group eligibility requirements have been changed to address imports

of articles from Mexico and Canada only and to authorize the

certification for NAFTA-TAA of worker groups when the workers' firm

shifts production to Mexico or Canada.

--Workers are required to be enrolled in training to qualify for trade

readjustment allowance (TRA) payments. Also, individual workers must be

enrolled in training within specified time periods to qualify for TRA

after a worker group is certified for NAFTA-TAA.

--Adjustment assistance to workers adversely affected by NAFTA is

also available under Title III of the JTPA. States are responsible for

assuring that certain assistance and services are made available to

workers whom the Governor preliminarily finds to be adversely affected

by NAFTA.

--Dislocated workers who are indirectly affected by NAFTA, e.g.,

workers in firms which supply components to a firm whose final product

is adversely affected by imports from Mexico or Canada, may seek under

Title III assistance similar to that available through the NAFTA-TAA

program.

It is the Department's intention to publish for comment proposed

regulations regarding implementation of the provisions of Title V

relating to transitional adjustment assistance.

Because the provisions were effective on January 1, 1994, it is

essential to inform the States and the cooperating State agencies of

the terms of the provisions and of the Department's instructions

concerning the proper implementation of these provisions.

For the reasons set out above, GAL No. 7-94 is published below.

Signed at Washington, DC, on January 19, 1994.

Doug Ross,

Assistant Secretary of Labor for Employment and Training.

Directive: General Administration Letter No. 7-94

To: All State Employment Security Agencies

From: Barbara Ann Farmer, Administrator, for Regional Management;

Wilbert F. Solomon, Deputy Administrator for Regional Management

Subject: Operating Instructions for Implementing the Amendments to

the Trade Adjustment Assistance for Workers Program in Title V of

the North American Free Trade Agreement (NAFTA) Implementation Act

Rescissions: None

Expiration Date: January 31, 1995

1. Purpose. To assist the States with implementing the Transitional

Adjustment Assistance Program in Title V of the NAFTA Implementation

Act. These operating instructions shall remain in effect until

superseded or supplemented by further operating instructions or until

amended regulations are published.

To alert the States to the opportunity for the provision of

adjustment assistance under Title III of the Job Training Partnership

Act (JTPA) to workers in secondary firms who are adversely affected by

NAFTA.

2. References. The NAFTA Implementation Act (Pub. L. 103-182) is

referred to as ``the Act.'' The program of trade adjustment assistance

for workers established by Chapter 2 of Title II of the Trade Act of

1974 is referred to as the ``TAA Program''. The Trade Act of 1974 may

be referred to as simply the ``Trade Act.'' The NAFTA Implementation

Act Title V--NAFTA Transitional Adjustment Assistance and Other

Provisions, affecting the TAA program is referred to as Title V or

NAFTA-TAA.

3. Background. The Trade Act of 1974 made major changes to the

trade adjustment assistance program for workers displaced because of

increased imports of articles like or directly competitive with

articles produced by the workers' firm. On receiving a petition for

trade adjustment assistance from a group of workers or its authorized

representative, the Department of Labor conducts a fact-finding

investigation in response to the petition. If the findings substantiate

that the workers of a firm or subdivision of have been adversely

affected by import competition, a certification is issued by the

Secretary of Labor to the worker group stating that the workers are

eligible to apply at a local office of the State employment security

agency for TAA benefits. Benefits include up to 104 weeks of training

in new occupational skills, and job search assistance and relocation

allowances when jobs are not available within the commuting area from

the worker's residence. Workers participating in training (unless the

training requirement is waived) may also receive up to 52 weeks of

trade readjustment allowance (TRA) payments which are generally

equivalent to the worker's unemployment insurance payment.

Regulations implementing the adjustment assistance program for

workers in chapter 2, title II, of the Trade Act are published at 20

CFR part 617.

On December 8, 1993, the President signed into law the ``North

American Free Trade Agreement Implementation Act.'' These implementing

instructions relate only to those provisions of Title V affecting the

TAA Program. Most of the provisions of Title V are in the form of

amendments to Chapter 2 of Title II of the Trade Act of 1974, and while

some of the provisions of Title V are not in the form of amendments to

the Trade Act, they nonetheless must be given effect in implementing

the NAFTA-TAA program.

While the NAFTA-TAA is generally similar to the existing TAA

Program, it does differ in several ways. Governors have a specific role

in the new adjustment assistance program targeted to workers who may be

displaced because of trade with Canada or Mexico. State agencies also

have new program responsibilities. The NAFTA-TAA program requires

workers to be enrolled in training to qualify for trade readjustment

allowance (TRA) payments and does not allow the waiver of the training

requirement when training is not ``feasible or appropriate'', which is

now available to eligible workers in the regular TAA program. To

provide for these differences, Section 502 of the Act adds a new

Subchapter D--NAFTA Transitional Adjustment Assistance Program, to

Chapter 2 of Title II of the Trade Act. Subchapter D adds one section--

Section 250, Establishment of a Transitional Program--to Chapter 2,

Title II of the Trade Act, creating the new NAFTA-TAA program.

Adjustment assistance to workers adversely affected by NAFTA is

also available under Title III of the JTPA. States are responsible for

providing assistance and services to workers whom the Governor

preliminarily finds to be adversely affected by NAFTA. In addition,

dislocated workers who are indirectly affected by NAFTA, e.g., workers

in firms which supply components to a firm whose final product is

adversely affected, may seek assistance similar to that available

through the NAFTA-TAA program. Effective delivery of these Title III

funded services will require governors to ensure close planning and

coordination between the TAA and Title III program operators.

4. Operating Instructions. The operating instructions in this

document are issued to the States and the cooperating State agencies as

guidance provided by the Department of Labor in its role as the

principal in the TAA Program. As agents of the United States, the

States and cooperating State agencies may not vary from the operating

instructions in this document without prior approval from the

Department of Labor (DOL).

Pending the issuance of regulations implementing the provisions of

Title V, the operating instructions in this document shall constitute

the controlling guidance for the States and the cooperating State

agencies in implementing and administering the new NAFTA-TAA program,

pursuant to the agreements between the States and the Secretary of

Labor under Section 239 of the Trade Act.

Instructions for implementing the JTPA Title III component,

including procedures for accessing the national reserve funds to

provide assistance to workers of secondary firms who are adversely

affected by NAFTA, will be issued shortly.

NAFTA-TAA amendments are set out in this document according to the

section number of the Trade Act affected by each of the amendments. An

explanation of each amendment is furnished with an explanation of the

regulations principally affected, and with additional instructions on

the administration of each amendment.

A. Establishment of Transitional Program

Section 502 of the Act establishes a new Subchapter D in Chapter 2

of Title II of the Trade Act as follows:

A.1. Group Eligibility Requirements.

AMENDED LAW. Subsection (a) of section 250 is titled Group

Eligibility Requirements. Paragraph (1) of subsection (a) sets out the

criteria for certifying a worker group for NAFTA-TAA as follows:

A group of workers (including workers in any agricultural firm or

subdivision of an agricultural firm) shall be certified as eligible to

apply for adjustment assistance under subsection (b) if the Secretary

determines that a significant number or proportion of the workers in

such workers' firm or an appropriate subdivision of the firm have

become totally or partially separated, or are threatened to become

totally or partially separated, and either--

(A) that--

(i) the sales or production, or both, of such firm or subdivision

have decreased absolutely,

(ii) imports from Mexico or Canada of articles like or directly

competitive with articles produced by such firm or subdivision have

increased, and

(iii) the increase in imports under clause (ii) contributed

importantly to such workers' separation or threat of separation and to

the decline in sales or production of such firm or subdivision; or

(B) that there has been a shift in production by such workers' firm

or subdivision to Mexico or Canada of articles like or directly

competitive with articles which are produced by the firm or

subdivision.

ADMINISTRATION. As mentioned above, paragraph (a)(1) sets out the

group eligibility criteria for certifying worker groups for

transitional adjustment assistance. Two sets of criteria are included

in subparagraphs (A) and (B). The criteria in subparagraph (A) are

similar to the eligibility criteria in the regular TAA program (section

222 of the Trade Act), except that the criteria for NAFTA-TAA petitions

provide that increased imports must come from Mexico or Canada.

Alternatively, and without reference to whether there have been

increased imports from Mexico or Canada under subparagraph (A), the

criterion under subparagraph (B) confers eligibility if the firm or

subdivision of the firm has shifted production to Mexico or Canada of

articles like or directly competitive with those produced by the firm

or subdivision.

Application of Criteria:

For purposes of section 250, the following terms are applied:

Appropriate subdivision means an establishment in a multi-

establishment firm which produces the domestic articles in question or

a distinct part or section of an establishment (whether or not the firm

has more than one establishment) where the articles are produced. The

term ``appropriate subdivision'' includes auxiliary facilities operated

in conjunction with (whether or not physically separate from)

production facilities. (OTAA has interpreted the term ``establishment''

to include a place of business together with its employees,

merchandise, equipment, etc.)

Firm means an individual proprietorship, partnership, joint

venture, association, corporation (including a development

corporation), business trust, cooperative, trustee in bankruptcy, and

receiver under decree of any court. A firm, together with any

predecessor or successor-in-interest, or together with any affiliated

firm controlled or substantially beneficially owned by substantially

the same persons, may be considered a single firm.

Significant number or proportion of workers means that:

a. In most cases the total or partial separations, or both, in a

firm or appropriate subdivision thereof, are the equivalent to a total

unemployment of five (5) percent of the workers or 50 workers,

whichever is less; or

b. At least three workers in a firm (or appropriate subdivision

thereof) with a work force of fewer than 50 workers would ordinarily

have to be affected.

Total or partial separation. All analyses of separations must treat

total and partial separations equally.

a. Partial separation means, with respect to an individual who has

not been totally separated, that the worker's:

(1) Hours of work have been reduced to 80 percent or less of the

worker's average weekly hours at the firm or appropriate subdivision

thereof, and

(2) Wages have been reduced to 80 percent or less of the worker's

average weekly wage at the firm or appropriate subdivision thereof.

b. Total separation means the layoff or severance of an individual

from a firm or an appropriate subdivision thereof.

Criteria in Subparagraph (A): The following guidance and

definitions shall apply:

a. Sales and production data must be obtained from the subject firm

for the current 12-month period and the previous 12-month period in

order to determine whether an absolute decrease in sales or production

has occurred.

b. Increased imports. The Department's Office of Trade Adjustment

Assistance (OTAA) will provide information based on available data

regarding imports from Mexico or Canada of articles like or directly

competitive with those produced by the firm or subdivision of the firm.

c. Like or directly competitive means that ``like'' articles are

those which are substantially identical in inherent or intrinsic

characteristics (i.e., materials from which the articles are made,

appearance, quality, texture, etc.); and ``directly competitive''

articles are those which, although not substantially identical in their

inherent or intrinsic characteristics, are substantially equivalent for

commercial purposes (i.e., adapted to the same uses and essentially

interchangeable therefor).

An imported article is ``directly competitive'' with a domestic

article at an earlier or later stage of processing, and a domestic

article is ``directly competitive with'' an imported article at an

earlier or later stage of processing, if the importation of the article

has an economic effect on producers of the domestic article comparable

to the effect of importation of articles in the same stage of

processing as the domestic article.

Criterion in Subparagraph (B): The criterion under subparagraph (B)

breaks down into the following elements:

a. Determination of article. The article must be like or directly

competitive with the article that has been produced in the U.S. by the

subject firm or subdivision of the firm.

Workers of firms that provide a service rather than produce an

article are excluded from coverage.

Workers of firms that are suppliers of ``components'' related to

the defined ``like or competitive article'' may be covered only if

those articles produced by such firms independently meet the

eligibility criteria for certification or the shift in production

criterion.

b. Action. The article must have been formerly produced by a U.S.

located firm or subdivision of the firm and is now produced in Mexico

or Canada. Since the law does not address ownership of the producing

firm, the shift in production can be either by the firm or subdivision

moving the plant to Mexico or Canada, or the U.S. firm contracting with

a different firm located in Mexico or Canada.

c. Definition. A ``shift of production'' is defined to mean a

tangible action or commitment to contract or license production of an

article within a definite period of time by the workers' firm with a

firm in Mexico or Canada, including the actual production of an article

that was formerly produced by a U.S. located firm or subdivision, by a

producing plant located in Mexico or Canada.

A.2. Definition of Contributed Importantly.

AMENDED LAW. Subparagraph (a)(2) of section 250 states that the

term ``contributed importantly'' means a cause which is important but

not necessarily more important than any other cause.

ADMINISTRATION. The term ``contributed importantly'' is the same as

used in section 222(b) of the Trade Act for administering the regular

TAA program. The ``contributed importantly'' provision is used by the

Department of Labor in its review of petitions for eligibility for the

regular TAA Program and will also be used for the NAFTA-TAA program.

Pursuant to section 250(b)(2)(B)(i), Governors, when making a

preliminary finding as to whether a petition meets the eligibility

requirements for NAFTA-TAA, discussed above, will not apply the

``contributed importantly'' test when reviewing NAFTA-TAA petitions.

When the Governor or the designated State official substantiates

that the criteria in clauses (i) and (ii) of sections 250(a)(1)(A) have

been met, the petition package including a statement of affirmative

preliminary finding is forwarded to the OTAA for review. To confirm the

State's affirmative preliminary finding, the OTAA will apply the

criteria in section 250(a)(1)(A), including the ``contributed

importantly'' test in clause (iii).

A.3. Regulations.

AMENDED LAW. Paragraph (a)(3) of section 250 provides that the

Secretary shall issue regulations relating to the application of the

criteria described above in making the preliminary finding and

determinations.

ADMINISTRATION. Because of the time constraints for implementing

the NAFTA-TAA program on January 1, 1994, regulations will not be in

place until after this date. Accordingly, to begin operation of the

program, operating instructions will be issued and published in the

Federal Register. States should proceed to implement the NAFTA-TAA

program based on these operating instructions.

A.4. Filing of petitions.

AMENDED LAW. Paragraph (b)(1) of section 250 provides that a

petition for certification of eligibility to apply for NAFTA-TAA may be

filed by a group of workers (including workers in any agricultural firm

or subdivision of an agricultural firm) or by their certified or

recognized union or other duly authorized representative with the

Governor of the State in which such workers' firm or subdivision

thereof is located.

ADMINISTRATION. This section provides that a petition for

certification of eligibility may be filed by a group of workers

(including workers in any agricultural firm or subdivision of an

agricultural firm) or by their certified or recognized union or other

duly authorized representative. It should be noted that a community-

based organization may serve as a duly authorized representative of the

workers.

Group means three or more workers in a firm or an appropriate

subdivision thereof.

A new petition form has been designed for use by worker groups to

file petitions for NAFTA-TAA. The NAFTA-TAA petition form will include

a space in the filing instructions on the reverse side to permit the

State to add the address of where the petitions are to be filed. A

supply of the NAFTA-TAA petition forms will be furnished to each State.

States should reproduce the NAFTA-TAA petition form to meet its needs.

Copies of the NAFTA-TAA petition form with the address for filing

the petition are to be made available by the States, at a minimum, in

every local employment service and unemployment insurance office. Staff

in local offices must be familiar with the NAFTA-TAA program, as well

as the regular TAA program, and the procedures being put in place to

assure that workers applying for employment services and unemployment

insurance benefits are advised properly regarding both TAA programs and

on filing the proper petition form to the correct location.

NAFTA-TAA petition forms will be submitted to the State official or

organization designated by the Governor to review such petitions.

Worker petitions for the regular TAA program will continue to be

submitted directly to the Department of Labor's Office of Trade

Adjustment Assistance, at the address on the reverse side of the form.

A.5. Findings and Assistance.

AMENDED LAW. Paragraph (b)(2) of section 250 specifies that upon

the receipt of a NAFTA-TAA petition, the Governor will take the

following actions:

A. Notify the Secretary of Labor that the Governor has received the

petition.

B. Within 10 days after receiving the petition--

(i) make a preliminary finding as to whether the petition meets the

criteria described in subsection (a)(1) (and for purposes of this

clause the criteria described in subparagraph (A)(iii) shall be

disregarded), and

(ii) transmit the petition, together with a statement of finding

under clause (i) and the reasons therefor, to the Secretary for action

under subsection (c); and

C. If the preliminary finding under subparagraph (B)(i) is

affirmative, ensure that rapid response and basic readjustment services

authorized under other Federal law are made available to the workers.

ADMINISTRATION. This section establishes a role, as well as precise

time frames, for Governors in processing NAFTA-TAA petitions. Because

of these time frames, rigid processing procedures have been designed

for coordinating the Governors' activities with the OTAA.

Time Frames.

Day 1:

a. The Governor receives a petition for NAFTA-TAA.

The State records the receipt date on the face of the petition,

reviews the petition for completeness and clarity, and telephones the

company official listed as the contact person on the petition.

b. Telephone contact with the company official is to cover the

following:

(1) Determine if the official listed on the petition is the

appropriate contact. If not, show the name, telephone number and FAX

number (if available) of the appropriate contact person on the face of

the petition.

(2) Confirm the product description reported on the petition.

Accuracy is critical to DOL in determining whether imports of like or

directly competitive products have increased.

(3) Ask the company official about total and partial worker

separations at the firm during the past 12 months. If there were

separations, ascertain if it was because of increased company imports

from Mexico or Canada, an actual or threatened shift of production to

either country, or lost sales to customers to purchase from firms

importing from Mexico or Canada.

(4) Alert company official that data request forms will be sent by

FAX (if available) or by mail, and obtain the official's cooperation to

supply the requested information within 5 days of petition receipt. If

the company official fails to cooperate, inform the company of subpoena

authority to obtain the requested data.

If the company continues to refuse to supply the data, the State

must notify the company in writing of its subpoena authority and

determine if the data is to be furnished. Subpoena procedures should be

instituted when there is non-compliance with the request. TAA program

regulations at 20 CFR 617.53 provide that States may issue subpoenas

for attendance of witnesses and production of records on the same terms

and conditions as under State law. If a State court declines to enforce

a subpoena, the State agency may petition for an order requiring

compliance with such subpoena to the United States District Court

within the jurisdiction of which the relevant proceeding under 20 CFR

part 617 is conducted.

Obviously, encouraging company cooperation is the best solution to

obtaining requested information. Use of subpoena procedures often

result in lengthy legal negotiations and even court proceedings. Notify

OTAA when subpoena procedures are being considered.

(5) Use the dedicated line (telephone number 202-501-6489) to FAX

to OTAA the face page of the petition form as well as any corrections

or additions obtained during telephone contacts with the company

official. This action will serve as notification to the Secretary that

the Governor has received a petition and that the investigation has

been initiated.

(6) FAX (if available) or mail the data request forms, which

include a request for a listing of company customers, to the company

official, specifying a due date for the information to be returned via

FAX or mail. If appropriate, inform the State employment security

agency that an investigation is underway.

(7) OTAA will check its records for duplicate petitions and assign

a NAFTA-TAA number to the case. OTAA will enter the case number in the

OTAA Management Information System and institute the investigation of

the petition. A notice of the investigation will be forwarded for

publication in the Federal Register and the regional offices and State

agencies notified according to established procedures in the regular

TAA Program.

(8) OTAA will begin the analysis of aggregate U.S. imports for the

article(s) listed in the petition that are like or directly competitive

with the article(s) produced at the subject firm.

Day 3

OTAA will complete the aggregate import analysis and FAX a

determination to the State as to whether relevant imports from Mexico

or Canada have increased. This determination will be made part of the

case file as it will be used by the State in making its preliminary

finding.

Day 5

If the data package has not been received from the company

official, the State will contact the company official to urge

completion and transmittal by mail or FAX (if available) of the data.

Day 10

a. State will make a preliminary finding regarding whether the

petition meets the criteria in section 250(a)(1), except clause

(A)(iii), and will prepare a brief statement on the basis for the

finding.

b. State will FAX the petition face sheet, the data packet

(including the customer list), and the preliminary finding and reasons

for the finding, to OTAA.

c. State will notify the petitioners of the Governor's preliminary

finding on the NAFTA-TAA petition and that the petition package is

being submitted to the Secretary of Labor for review and final

determination.

d. When an affirmative determination is made, the State will take

the necessary action to ensure that the JTPA Title III (Economic

Dislocated Worker Adjustment Assistance) rapid response and basic

readjustment services are made available to the impacted workers.

A.6. Review of Petition by Secretary: Certifications.

AMENDED LAW. Subparagraph (c)(1) of section 250 provides that the

Secretary of Labor, within 30 days after receiving from the Governor a

petition for NAFTA-TAA, shall determine whether the petition meets the

group eligibility requirement for certification. Upon a determination

that the petition meets such criteria, the Secretary shall issue to

workers covered by the petition a certification of eligibility to apply

for assistance under NAFTA-TAA.

ADMINISTRATION. The OTAA will review the State's preliminary

finding on all NAFTA-TAA petitions. If an affirmative preliminary

finding from the State, based on a shift in production to, or imports

from, Mexico or Canada, is confirmed through an independent review by

the OTAA, the Secretary will issue a certification of eligibility to

apply for assistance. This determination will be published in the

Federal Register.

If the affirmative preliminary finding from the State is not based

on a shift in production to Mexico or Canada by the subject firm or on

company imports from Mexico or Canada, OTAA will initiate a customer

survey to determine whether the increase in aggregate imports

contributed importantly to the workers' separations and to the decline

in sales or production at the subject firm.

The OTAA will complete the customer survey, and the Secretary will

issue a final determination within 30 days of the receipt of the

State's preliminary finding.

The Secretary's determination to grant or deny certification will

be sent by FAX to the State and appropriate regional office. This

determination will also be published in the Federal Register.

A.7. Denial of Certification.

AMENDED LAW. Paragraph (c)(2) of section 250 provides that upon

denial of certification with respect to a petition under paragraph (1),

the Secretary shall review the petition in accordance with the

requirements of the regular TAA program under subchapter A of chapter 2

of title II the Trade Act to determine if the workers may be certified

under such subchapter.

ADMINISTRATION. When a determination is made by the Secretary of

Labor that the petition does not meet the eligibility requirements for

NAFTA-TAA, the petition will immediately be reviewed by the OTAA under

subchapter A of the Trade Act.

The 60-day time period under section 223 of Chapter 2 of Title II

of the Trade Act for completing the review of a petition under

subchapter A will begin on the date the denial of the NAFTA-TAA

petition is issued.

A.8. Comprehensive Assistance.

AMENDED LAW. Subsection (d) of section 250 provides that workers

covered by a certification for NAFTA-TAA shall be provided, in the same

manner and to the same extent as workers covered under a certification

for regular TAA, the following:

1. Employment services described in section 235 of the Trade Act.

2. Training described in section 236 of the Trade Act, except that

notwithstanding the provisions of section 236(a)(2)(A), the total

amount of payments for any fiscal year shall not exceed $30 million.

3. Trade readjustment allowances (TRA) described in sections 211

through 234 of the Trade Act, except that--

A. The provisions of sections 231(a)(5)(C) and 231(c) of the Trade

Act, authorizing the payment of TRA upon a finding that it is not

feasible or appropriate to approve a training program for a worker,

shall not be applicable to payment of such allowance under subchapter

D; and

B. Notwithstanding the provision of section 233(b) of the Trade

Act, in order for a worker to qualify for TRA under the NAFTA-TAA

program, the worker shall be enrolled in a training program approved by

the Secretary under section 236(a) by the later of--

(i) the last day of the 16th week of such worker's initial

unemployment compensation period, or

(ii) the last day of the 6th week after the week in which the

Secretary of Labor issues a certification covering such worker.

In cases of extenuating circumstances related to enrollment in a

training program, the Secretary may extend the time for enrollment for

a period not to exceed 30 days.

4. Job search allowances described in section 237.

5. Relocation allowances described in section 238.

ADMINISTRATION. The administration of the benefit provisions of the

NAFTA-TAA program is similar to the regular TAA program except that the

NAFTA-TAA program requires workers to be enrolled in training to

qualify for TRA payments. The NAFTA-TAA program prohibits the waiver of

the training requirement when training is not ``feasible or

appropriate,'' which is available to eligible workers in the regular

TAA program. Also, the NAFTA-TAA program requires workers to be

enrolled in training by prescribed time periods to qualify for TRA.

a. Employment Services. Employment services described in section

235 of the Trade Act are to be provided to NAFTA-TAA certified workers

as provided to workers certified for regular TAA. Employment services

are to be provided to NAFTA-TAA certified workers to the same extent

that such services are provided to any workers seeking employment

services under other Federal laws; i.e., Wagner-Peyser Act and Title

III of JTPA. (See 20 CFR 617.20 and 617.21)

b. Training. Training is to be provided to NAFTA-TAA certified

workers according to section 236 of the Trade Act.

Workers certified under NAFTA-TAA will have to satisfy the same

criteria in 20 CFR 617.22(a) as apply to workers certified under the

regular TAA program.

The Act provides that payments for NAFTA-TAA training for any

fiscal year shall not exceed $30 million. With regard to this funding

limitation, the Department will track nationally the amount of program

funds allocated to the States and the amount of funds committed by the

States in order to satisfy this statutory provision. States will be

informed when the amount approaches $30 million nationally. Should the

demand for funds exceed the limitation, instructions will be furnished

on how to handle demands for training that exceed the statutory

limitation.

c. Trade Readjustment Allowances. To qualify for TRA payments, an

eligible worker must be enrolled in a training program approved by the

later of--

(i) the last day of the 16th week of such worker's initial

unemployment compensation period, or

(ii) the last day of the 6th week after the week in which the

Secretary of Labor issues a certification covering such worker.

Application of time periods. The 16-week time requirement for

enrolling in training in order to qualify for TRA will be applied

literally. In order to be eligible to receive TRA under a NAFTA-TAA

certification, the worker must be enrolled in an approved training

program by the end of the 16th week of that worker's initial

unemployment compensation benefit period.

This fixed 16-week period begins with the effective date of the

claim and ends with the last day of the 16th week thereafter. Included

in this 16-week fixed period are weeks of waiting period credit, weeks

of disqualification, weeks of employment, and weeks of unemployment.

Initial unemployment compensation benefit period means the same as

the term ``first benefit period'' defined at 20 CFR 617.3(r). ``First

benefit period'' means the benefit period established after the

individual's first qualifying separation or in which such separation

occurs.

Enrolled in Training. For purposes of this provision, a worker

shall be considered to be enrolled in training when the worker's

application for training is approved by the State agency and the

training institution has furnished written notice to the State agency

that the worker has been accepted in the approved training program

beginning within 30 calendar days.

Extenuating Circumstances. The Act provides that the Secretary, for

justifiable cause, may extend the time for enrollment for a period not

to exceed 30 days. It is anticipated that there will be situations

beyond the worker's control where the worker is unable to enroll in

training by the later of the last day of the 16th week of the worker's

initial benefit period or the 6th week after the week that a

certification was issued. Such situations could involve training

programs that are abruptly canceled or circumstances where the first

available enrollment date is past the deadline, as well as injury or

illness which may adversely affect the ability of workers to enroll in

training. The authority to grant 30-day extensions to workers is

delegated to States or State agencies as one of their responsibilities

under section 239 of the Trade Act.

The application of this 30-day grace period will be used only in

rare circumstances. Workers who fail to enroll in training by the end

of this 30-day period are still eligible to participate in approved

training and have the training costs paid with NAFTA-TAA program funds

but will not qualify for TRA. This provision places added

responsibilities on both the worker and the State agency to satisfy the

time limits for enrolling in training in order to qualify for TRA.

Workers certified for NAFTA-TAA must be informed promptly of the time

provisions by the State agency when a NAFTA-TAA certification is

issued.

In order to satisfy these provisions, information bulletins or

brochures furnished to claimants by the State unemployment insurance

agency and to applicants for employment services should include

information on the time provisions for NAFTA-TAA certified workers to

qualify for TRA. Other means of informing workers of the time limits

are through newspaper notices and letters sent to individual workers

when a certification is issued, as required in section 225 of the Trade

Act and regulations at 20 CFR 617.4.

Although the use of brochures, newspaper notices and individual

letters are important resources for informing workers of the time

provision for enrolling in training, they do not relieve States of

their responsibility for helping workers enroll in a training program

in a timely manner.

State agencies shall follow existing funding a precertification

procedures for NAFTA-TAA program petitions now used for regular TAA

Program petitions. Initiation of fact-finding investigations in

response to NAFTA-TAA petitions will be announced through publication

of the information in the Federal Register, in the same manner as

regular TAA petitions.

Under precertification responsibilities, State agencies must obtain

information from the subject firm about layoffs beginning on and after

December 8, 1993, including the names and social security numbers of

the affected workers. The State agency staff shall also follow the

procedures used for the regular TAA Program to check UI files, flag

appropriate claims, and maintain coordination between the UI and ES

offices to ensure that workers are enrolled in approved training within

the statutory time frames so they are not denied TRA eligibility.

d. Prohibition of Training Waivers. Provisions of sections

231(a)(5)(C) and 231(c) of the Trade Act, authorizing the payment of

TRA upon a finding that it is ``not feasible or appropriate'' to

approve a training program for a worker, are not applicable to payment

of TRA under the NAFTA-TAA program.

Thus, in order for a worker to qualify for TRA under the NAFTA-TAA

program, the worker must be enrolled in training approved under section

236(a) of the Trade Act.

e. Job search allowances. Workers certified for NAFTA-TAA are

eligible for job search allowances to the same extent and under the

same conditions as workers certified for the regular TAA program under

section 237 of the Trade Act.

f. Relocation allowances. Workers certified for NAFTA-TAA are

eligible for relocation allowances to the same extent and under the

same conditions as workers certified for the regular TAA program under

section 238 of the Trade Act.

A.9. Administration of NAFTA-TAA.

AMENDED LAW. Subsection (e) of section 250 states that the

provisions of subchapter C of Chapter 2, Title II, of the Trade Act

shall apply to the administration of the NAFTA-TAA program in the same

manner and to the same extent as such provisions apply to the

administration of the regular TAA program under subchapters A and B of

the Trade Act, except that the agreement between the Secretary and the

States described in section 239 of the Trade Act shall specify the

procedures that will be used to carry out the certification process

under subsection (c) of section 250 and the procedures for providing

relevant data by the Secretary to assist the States in making

preliminary findings under subsection (b) of section 250.

ADMINISTRATION. The procedures for NAFTA-TAA certification process

under subchapter D of Chapter 2, Title II, of the Trade Act are:

a. The certification procedures set forth in Sections A.5 and A.6

of this document provide operating instructions on the methods for

making preliminary determinations under section 250(b) of the Trade Act

and the Secretary's review of petitions under subsection (c).

b. Upon request from the Governor, the Secretary will make a

determination of what relevant import data is needed to satisfy the

criteria for making a preliminary finding under subsection (b) and

provide such data to the State.

c. Pursuant to section 250(c), the Secretary will conduct a full

investigation to determine if the petition for NAFTA-TAA certification

meets the criteria specified in subsection (a).

B. CONFORMING AMENDMENTS

Section 503 of the new law provides conforming amendments to the

Trade Act as follows:

B.1. References.

AMENDED LAW. Subsection (a) of section 503 of the new law amends

sections 221(a), 222(a), and 223(a) by striking out ``assistance under

this chapter'' and inserting ``assistance under this subchapter''.

ADMINISTRATION. These are technical changes which do not have a

material effect on the administration and operation of the TAA and

NAFTA-TAA programs.

B.2. Benefit Information.

AMENDED LAW. Subsection (b) of section 225 is amended by inserting

``or subchapter D'' after ``subchapter A'' each place it appears.

Administration. This change is needed because of the addition of

subchapter D in Chapter 2, Title II, of the Trade Act. The impact of

this amendment is to require that the same types of benefit information

be furnished by State agencies to workers applying for unemployment

insurance and to workers certified for NAFTA-TAA as are required by the

regular TAA program.

B.3. Nonduplication of Assistance.

AMENDED LAW. Subsection (c) of section 503 amends subchapter C of

Chapter 2, Title II, of the Trade Act by adding a new section 249A at

the end on nonduplication of assistance. This new section provides that

no worker may receive assistance relating to a separation pursuant to

certifications under both subchapters A and D.

ADMINISTRATION. This new section is intended to eliminate

duplication of assistance and benefits to a worker in situations where

a worker group is certified concurrently for both regular TAA and

NAFTA-TAA. These situations should be uncommon. However, should this

occur, the worker will be provided benefits under one or the other

certification. The worker is to make the decision regarding which

certification will apply. Once a decision is made by the worker, it

cannot be changed. Also, State agency staff must explain the

differences between programs so workers can make an informed choice.

B.4. Judicial Review.

AMENDED LAW. Subsection (d) of section 503 amends section 284 of

the Trade Act by inserting ``or section 250(c) after ``section 223.''

ADMINISTRATION. Section 284 (19 U.S.C. 2395(a)) of the Trade Act

addresses judicial review.

Subsection (d) has the effect of providing workers aggrieved by a

decision of the Secretary of Labor on a petition, the same rights for

judicial review as provided to workers pursuant to section 284 of the

Trade Act. Regulations addressing judicial review are also set out at

29 CFR 90.19.

C. TERMINATION OF TRANSITION PROGRAM

C.1. Termination of Transition Program.

AMENDED LAW. Section 505 of the Act amends subsection (c) of

section 285 of the Trade Act by--

(1) striking ``No'' and inserting ``(1) except as provided in

paragraph (2), no''; and

(2) adding at the end the following new paragraph:

(2)(A) Except as provided in subparagraph (B), no assistance,

voucher, allowance, or other payments may be provided under subchapter

D of chapter 2 after the day that is the earlier of--

(i) September 30, 1998, or

(ii) the date on which legislation, establishing a program

providing dislocated workers with comprehensive assistance

substantially similar to the assistance provided by such subchapter D,

becomes effective.

(B) Notwithstanding subparagraph (A), if, on or before the day

described in subparagraph (A), a worker--

(i) is certified as eligible to apply for assistance, under

subchapter D of chapter 2; and

(ii) is otherwise eligible to receive assistance in accordance with

section 250.

such worker shall continue to be eligible to receive such assistance

for any week for which the worker meets the eligibility requirements of

such section.

ADMINISTRATION. Although the amended section is not part of Chapter

2 of Title II of the Trade Act, it does have a significant impact on

the payment of benefits to NAFTA-TAA certified workers after the

September 30, 1998 expiration date of the TAA program or an earlier

expiration date prescribed in any new law. While it is important to be

aware of this provision, the Department of Labor will provide precise

closeout information to States in advance of the statutory expiration

date, or if the expiration date is impacted by a law change.

D. EFFECTIVE DATES

D.1. General.

AMENDED LAW. Subsection (a) of section 506 of the Act provides that

sections 501, 502, 503, 504, and 505 shall take effect on the date the

Agreement enters into force with respect to the United States.

ADMINISTRATION. It is expected that NAFTA will enter into force on

January 1, 1994.

D.2. Covered Workers; In General.

AMENDED LAW. Subsection (b)(1), of section 506 of the Act states

that, except as provided in paragraph (2) of section 506, no worker

shall be certified as eligible to receive assistance under subchapter D

of chapter 2 of title II of the Trade Act (as added by this subtitle)

whose last total or partial separation from a firm (or appropriate

subdivision of a firm) occurred before such date of entry into force.

ADMINISTRATION. With the exception of the reachback provision,

which is discussed in the next section, no worker is to be certified as

eligible to receive assistance under NAFTA-TAA whose last separation

under a certification occurred before the NAFTA date of entry into

force.

D.3. Covered Workers; Reachback.

AMENDED LAW. Subsection (b)(2), of section 506 of the new law

provides that notwithstanding paragraph (1), any worker--

(A) whose last total or partial separation from a firm (or

appropriate subdivision of a firm) occurs--

(i) after the date of the enactment of this Act, and

(ii) before such date of entry into force, and

(B) who would otherwise be eligible to receive assistance under

subchapter D of chapter 2 of title II of the Trade Act of 1974, shall

be eligible to receive such assistance in the same manner as if such

separation occurred on or after such date of entry into force.

ADMINISTRATION. In determining the eligibility of workers for

benefits under NAFTA-TAA, consideration must be given to the date a

worker is separated from employment. A worker whose last total or

partial separation from a firm occurred after the enactment of Pub. L.

103-182 on December 8, 1993, but before the date of entry into force of

NAFTA (which is anticipated to be on January 1, 1994), may be eligible

for certification under the ``reachback'' provision in section

506(b)(2) of the Act.

Workers whose total or partial separation occurred at an earlier

time must petition under the regular TAA program to be eligible for TAA

services and benefits. The regular TAA program allows workers laid off

up to one year prior to the date of the petition on which a

certification of eligibility is issued to qualify for services and

benefits.

It is important for State agency staff members to be familiar with

the reachback provisions of both the NAFTA-TAA and regular TAA programs

so that they can properly advise workers regarding which program may be

applicable to their situation.

5. Action Required. States are required to implement the provisions

of the NAFTA Amendments as set forth in this document as of the date of

NAFTA entry into force which is expected to be on January 1, 1994.

States are advised to inform all appropriate staff of the contents of

this document.

6. Inquiries. States are to direct all inquiries to the appropriate

ETA Regional Office.

7. Attachment. Title V--NAFTA Transitional Adjustment Assistance

and Other Provisions.

[FR Doc. 94-1599 Filed 1-26-94; 8:45 am]

BILLING CODE 4510-30-M