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Operating instructions for the Trade Act of 2002 amendments
Summary ETA instructed state workforce agencies how to implement the Trade Act of 2002 changes to worker Trade Adjustment Assistance, including eligibility, training, income support and the transition away from NAFTA-TAA. It told states to apply the principal amendments to petitions filed on or after November 4, 2002, while preserving the older rules for earlier petitions. ETA still lists the advisory Active, though the instructions describe a historical statutory transition.
Document
Federal guidance
Agency
U.S. Department of Labor, Employment and Training Administration (ETA)
Document number
TEGL No. 11-02
Date issued
October 10, 2002
Status
Active
ETA lists this advisory Active as of October 25, 2026. Its operating instructions address the 2002 amendments and expressly apply to petitions filed on or after November 4, 2002; later law and guidance may affect present-day cases.
Status last verified October 25, 2026
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Official PDF letter (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL11-02.pdf):
Employment and Training Administration Advisory System
U.S. Department of Labor
Washington, D.C. 20210
CLASSIFICATION: TAA
CORRESPONDENCE SYMBOL: ONR
DATE: October 10, 2002
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 11-02
TO : ALL STATE WORKFORCE LIAISONS
ALL STATE WORKFORCE AGENCIES
ALL ONE-STOP CENTER SYSTEM LEADS
/s/
FROM : EMILY STOVER DeROCCO
Assistant Secretary
SUBJECT : Operating Instructions for Implementing the Amendments to
the Trade Act of 1974 Enacted by the Trade Act of 2002
1. Purpose. To assist the State Workforce Agencies (SWA) in implementing the
provisions of the Trade Act of 2002 that amend the current Trade Adjustment
Assistance program and repeal the North American Free Trade – Transitional
Adjustment Assistance program.
2. References. The Trade Act of 1974, as amended (P.L. 93-618, as amended); the
Trade Act of 2002 (P.L. 107-210); 20 CFR 617; 29 CFR 90; General Administration
Letter 7-94 with Changes 1, 2, and 3. The amendments to the TAA program may
also be referred to as the Trade Adjustment Assistance Reform Act of 2002.
Forthcoming directives: Unemployment Insurance Program Letter (UIPL) No. 02-03; ETA guidance – Use of National Emergency Grant Funds Under the Workforce
Investment Act, as Amended, to Support Healthcare Assistance for Trade-Impacted
Workers; Department of the Treasury instructions and guidance on implementing the
Health Insurance Tax Credit provisions of the Trade Act of 2002.
RESCISSIONS EXPIRATION DATE
Continuing
To provide guidance on the implementation of various aspects of the Trade Act of
2002, ETA plans to issue the following additional instructions:
Provision Instructions Expected Effective
Issue Date Date of
Provision
Health Insurance Assistance TEGL: Use of NEGs to Develop 10/10/02 8/6/02
NEGs for System-Building Systems for Health Insurance
Coverage Assistance for Trade-
Impacted Workers
End-of-Year Tax Credit UIPL No. 02-03: Health 10/10/02 12/1/02
Insurance Tax Credit for Eligible
Trade Adjustment
Assistance/Trade Readjustment
Allowances (TAA/TRA)
Recipients
New Petition Procedures TEGL Spring
2003
Advance Tax Credit Companion Advisory to IRS Late Spring 8/1/03
Instructions 2003
Alternative TAA for Older TEGL Spring 8/6/03
Workers Program 2003
3. Guiding Principle for TAA Implementation. The reauthorization and reform of
the TAA program and repeal of the NAFTA-TAA program provide an opportunity to
ensure that effective strategies are employed to assist affected workers in obtaining
reemployment. It is essential that DOL and the states work together to move trade-
affected workers into new jobs as quickly and effectively as possible so that they
continue to be productive members of our workforce and so that our businesses
remain competitive. To this end, the intervention strategies used for program
benefits and services will be aimed toward rapid, suitable and long-term employment
for adversely affected workers. States must:
A. Increase the focus on early intervention, upfront assessment, and
reemployment services for adversely affected workers. It should not be
assumed that the best reemployment strategy for all workers is the long-term
training and extended income support that has traditionally been the focus of
the program. The new requirements in the 2002 Amendments requiring the
provision of rapid response and core and intensive services available under
WIA and other Federal programs to workers filing a TAA petition afford an
important opportunity to stress early intervention and more rapid
reemployment. Providing an early assessment and identification of the
worker's marketable skills, and the provision of job search assistance and
other reemployment services will assist many workers in obtaining suitable
reemployment quickly.
B. Use One-Stop Career Centers as the main point of participant intake and
delivery of benefits and services. This will encourage coordination among
programs in order to better serve workers and promote efficiencies in the
workforce system.
C. Maintain fiscal integrity and promote performance accountability. ETA will
ensure that money allocated for TAA is used for the purposes Congress
intended – to improve the economy, and assist workers and businesses – and
that it is spent with the interests of taxpayers in mind. This will occur, in
part, through strengthened participant outcome measures for the program.
4. Background. The Trade Adjustment Assistance (TAA) program for workers was
first established at the U.S. Department of Labor (DOL) by the Trade Act of 1974
(1974 Act). Currently, when DOL receives a petition for TAA from a group of
workers or its authorized representative, DOL conducts a fact-finding investigation
to determine whether increased imports have contributed importantly to the workers’
displacement. If the findings of the investigation show that the workers have been
adversely affected by import competition, the Secretary of Labor issues a
certification of eligibility to apply for adjustment assistance. Once a certification is
issued, it is transmitted to the State. The SWAs act as agents of the Secretary to
notify certified workers of potential Trade Act benefits and services, make eligibility
determinations for individuals, and deliver benefits and services. Individual workers
who are members of the certified worker group apply for benefits and services at a
One-Stop Career Center or other local office of the SWA. Individual workers who
meet the qualifying criteria may receive up to 104 weeks of job retraining, up to 52
weeks (generally) 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 are eligible for basic reemployment services such as job
referrals, job clubs, resume-writing assistance, and so forth. Most of the steps in this
current process have been affected by the provisions of the Trade Act of 2002 (2002
Act).
The 1974 Act has been amended several times since its initial passage. In December
1993, the North American Free Trade Implementation Act created the North
American Free Trade Agreement - Transitional Adjustment Assistance (NAFTA-
TAA) program by adding Subchapter D to Chapter 2 of title II of the 1974 Act.
Subchapter D contains one section, Section 250, which established the NAFTA-TAA
program and specified some differences between it and the regular TAA program.
Certifications of worker groups under NAFTA-TAA were made only if imports from
Canada and/or Mexico caused the import impact, or if the workers’ firm shifted
production to either Canada or Mexico. Workers filed their petitions with the
Governor of the State in which they were employed, not directly with DOL, and the
State performed a preliminary investigation. If the workers appeared to be impacted
by imports from Canada or Mexico or a shift of production to Canada or Mexico, the
State provided Rapid Response assistance under the Workforce Investment Act of
1998 (WIA). The State then transmitted all information gathered in the preliminary
investigation to DOL, which issued the final determination on eligibility to apply. In
order to qualify for TRA, workers had to be enrolled in training within specific time
limits. Workers certified under NAFTA-TAA had to be enrolled in approved
training in order to qualify for TRA; no waivers from this requirement were allowed.
Regular TAA allowed waivers if training was “not feasible or appropriate” for the
worker.
Along with the creation of the NAFTA-TAA program, the Clinton Administration
issued a Statement of Administrative Action (SAA) that committed to providing
assistance to workers who were not directly impacted by trade with Canada or
Mexico, but were indirectly impacted because their firm supplied components to, or
performed finishing operations for, a firm which was directly impacted. These
secondarily-impacted workers petitioned for certification in the same way as for the
NAFTA-TAA program, or DOL initiated a secondary investigation if the result of a
primary NAFTA-TAA investigation was a denial of eligibility to apply. In either
case, if the worker group was found to be secondarily impacted by imports from
Canada and/or Mexico or a shift of production to Canada or Mexico, the members of
the group qualified for benefits and services delivered through the dislocated worker
program under WIA.
On August 6, 2002, President George W. Bush signed into law H.R. 3009, the Trade
Act of 2002 (2002 Act), P.L. 107-210. The 2002 Act makes several amendments to
the 1974 Act. The amendments that are covered in these operating instructions apply
to petitions for adjustment assistance that are filed on or after November 4, 2002.
Petitions filed on or before November 3, 2002, are covered by the provisions of the
1974 Act that were in effect on September 30, 2001.
The 2002 Act repeals subchapter D of chapter 2 of title II of the 1974 Act (the
NAFTA-TAA program). However, workers covered under certifications issued
pursuant to NAFTA-TAA petitions filed on or before November 3, 2002, will
continue to be covered under the provisions of the NAFTA-TAA program that were
in effect on September 30, 2001. The 2002 Act generally did not amend the job
retraining provisions of the 1974 Act, except that customized training may now be
approved for import-impacted workers. The statutory cap on funds that may be
allocated to the States for training is raised from $110 million to $220 million per
year. The maximum amount of TRA is increased by 26 weeks of additional TRA for
all workers in training. Up to 26 more weeks of additional TRA may be approved if
the worker must undergo remedial training as part of his/her retraining program. In
order to qualify for TRA, a worker must be enrolled in training within 16 weeks of
his/her most recent total qualifying separation, or within 8 weeks of the issuance of
the certification, whichever is later. However, States may grant an extension of these
requirements for up to 45 days if there are extenuating circumstances. Waivers from
the training requirement are available under six specific conditions. A worker may
continue to receive TRA during a break in training that lasts up to 30 days (raised
from 14 days).
To petition for eligibility to apply for TAA, workers or their authorized
representatives must now file the petition simultaneously with the Secretary of Labor
and the Governor of the State where the workers were employed. The Governor no
longer has responsibility for conducting a preliminary investigation. However, the
Governor must provide Rapid Response services and appropriate core and intensive
to all petitioning workers. DOL has 40 days to conduct an eligibility investigation
and issue a determination. The 2002 Act also makes the secondary-worker coverage,
as provided under the Statement of Administrative Action, statutory. Workers who
are found to be secondarily-impacted, as defined in the Act, are eligible to apply for
the same benefits and services as workers certified as primarily impacted; the
benefits and services for both primarily and secondarily-affected workers are paid
from TAA funds.
The 2002 Act creates a program of health insurance tax credits (HITC) for certain
trade-impacted workers and others. Covered individuals include workers who are
eligible for TRA (including those workers who would be eligible except that they
have not exhausted all entitlement to unemployment insurance), workers
participating in the alternative TAA program (next paragraph), and individuals over
55 years old who are receiving monthly benefits paid by the Pension Benefit
Guaranty Corporation (PBGC). Covered individuals may be eligible to receive a tax
credit equal to 65% of the amount they paid for qualifying coverage under qualified
health insurance. The tax credit may be claimed at the end of the year, or, beginning
in August 2003, a qualified individual may receive the credit in the form of monthly
advance payments to the health insurance provider.
The 2002 Act creates the Alternative TAA (ATAA) for Older Workers program.
Under the ATAA, workers at least 50 years who obtain different, full-time
employment within 26 weeks of separation from adversely-affected employment at
wages less than the wages earned in the adversely-affected employment may receive
50 percent of the wage differential, up to a maximum of $10,000, during their two-
year eligibility period. To be eligible for the ATAA program, workers may not earn
more than $50,000 per year in the new employment. Also, the firm where the
workers worked must meet certain eligibility criteria. Workers who take advantage
of the ATAA cannot receive three of the regular TAA benefits and services (training,
TRA, and job search allowances); they are, however, eligible to apply for relocation
allowances and the health insurance tax credit.
The 2002 Act also creates a separate TAA program for farmers. Eligibility
determinations for that program are the responsibility of the Secretary of Agriculture.
Farmers certified under that program are entitled to the same DOL-funded basic
reemployment services, training, job search, and relocation services as regular TAA
workers, but they may not receive TRA. The Secretary of Agriculture is authorized
to make cash assistance payments (up to $10,000 per year) to eligible farmers.
5. Operating Instructions. The operating instructions in this document are issued to
the States and the cooperating SWAs as guidance provided by the Department of
Labor (DOL) in its role as the principal in the TAA program. As agents of the
Secretary of Labor, the States and cooperating State agencies may not vary from the
operating instructions in this document without prior approval from DOL.
Pending the issuance of regulations implementing the provisions of the 2002 Act, the
operating instructions in this document constitute the controlling guidance for the
States and the cooperating State agencies in implementing and administering the
1974 Act, as amended, pursuant to the agreements between the States and the
Secretary of Labor under Section 239 of the 1974 Act, as amended.
Changes to the TAA program are set out in this document according to the principal
parts of the TAA program and generally in the order in which they appear in the
2002 Act. The changes to each part, and those aspects of each part that remain
unchanged, are explained in turn, along with the regulations principally affected and
the changes in program administration that may be required. Sections of the 1974
Act which are entirely unchanged by the 2002 Act are discussed after the sections
that are changed.
In general, the amendments to the 1974 Act made by the 2002 Act take effect on
November 4, 2002, 90 days after the President signed the 2002 Act into law. All of
the changes to the petitioning process apply to petitions filed on or after November 4,
2002. Changes to the eligibility requirements and levels of Trade Act benefits and
services apply to workers covered by certifications issued pursuant to petitions filed
on or after November 4, 2002. For convenience and emphasis, the effective date is
repeated in several sections of these instructions. Exceptions to this effective date
apply to certain aspects of the health insurance tax credit and to the ATAA program.
Instructions for those are not included in this document, but will be issued in separate
directives in the near future.
There are provisions of the 2002 Act that are not covered by these operating
instructions. The Health Insurance Tax Credit (HITC) provisions involve several
Departments, including the Departments of Labor, Health and Human Services, and
the Treasury (including the Internal Revenue Service). Guidance and instructions for
the HITC are forthcoming. Similarly, the ATAA will not be implemented until the
summer of 2003. Complete guidance and operating instructions for the ATAA are
forthcoming. The HITC and the ATAA are discussed briefly in this document, and
only for informational purposes.
For purposes of these operating instructions, the following definitions will apply:
1. 2002 Act means the Trade Act of 2002, P.L. 107-210.
2. 1974 Act means the Trade Act of 1974, as amended (but not including the
amendments in the 2002 Act), P.L. 93-618, as amended.
3. DOL means the U.S. Department of Labor.
4. Secretary means the Secretary of Labor.
5. TAA means the Trade Adjustment Assistance program.
6. NAFTA-TAA means the North American Free Trade Agreement-
Transitional Adjustment Assistance program.
7. TRA means Trade Readjustment Allowances
8. ATAA means Alternative Trade Adjustment Assistance program.
9. HITC means Health Insurance Tax Credit.
10. WIA means the Workforce Investment Act of 1998.
A. REAUTHORIZATION, TERMINATION, AND EXPENDITURE PERIOD
Statutory Change: Section 111 of the 2002 Act amends Sections 245 and 285 of
the 1974 Act as follows:
“SEC. 285. TERMINATION.
(a) Assistance for Workers. – Section 245 of the Trade Act of 1974 (19 U.S.C.
2317) is amended by striking ‘October 1, 1998, and ending September 30, 2001,’
each place it appears and inserting ‘October 1, 2001, and ending September 30,
2007,’.”
“(c) Termination. – Section 285 of the Trade Act of 1974 is amended to read as
follows:
(a) Assistance for Workers. –
(1) In General. – Except as provided in paragraph (2), trade adjustment
assistance, vouchers, allowances, and other payments or benefits may not
be provided under chapter 2 after September 30, 2007.
(2) Exception. – Notwithstanding paragraph (1), a worker shall continue to
receive trade adjustment assistance benefits and other benefits under
chapter 2 for any week for which the worker meets the eligibility
requirements of that chapter, if on or before September 30, 2007, the
worker is –
(A) certified as eligible for trade adjustment assistance benefits under
chapter 2 of this title; and
(B) otherwise eligible to receive trade adjustment benefits under
chapter 2.”
Administration: The trade adjustment assistance program for workers is
reauthorized through September 30, 2007, the end of fiscal year 2007. The
amendment also authorizes the payment past that date of program benefits to
workers who are covered by a certification issued on or before that date and are
otherwise eligible to receive the benefits.
Statutory Change: Section 120 of the 2002 Act amends Section 245 of the 1974
Act as follows:
“Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as amended by section
111(a) of this Act, is further amended by amending subsection (b) to read as follows:
(b) Period of Expenditure. – Funds obligated for any fiscal year to carry out
activities under sections 235 through 238 may be expended by each State receiving
such funds during that fiscal year and the succeeding two fiscal years.”
Administration: This amendment codifies the existing way of handling funds
allocated to States for job training (including transportation and subsistence
allowances), job search allowances, and relocation allowances. States may accrue
expenditures during the fiscal year in which they receive funding, and during the
succeeding two fiscal years. States must liquidate all accrued expenditures charged
to a particular fiscal year within 90 days after the close of the second succeeding
fiscal year (29 CFR 97.23(b)).
B. PETITION FILING AND PROVISION OF RAPID RESPONSE ASSISTANCE
B.1 Petition Filing
Statutory Change: Section 112(a) of the 2002 Act amends Section 221(a) of the
1974 Act to read as follows:
“(a)(1) A petition for certification of eligibility to apply for adjustment assistance for
a group of workers under this chapter may be filed simultaneously with the Secretary
and the Governor of the State in which such workers’ firm or subdivision is located
by any of the following:
(A) The group of workers (including workers in an agricultural firm or
subdivision of an agricultural firm).
(B) The certified or recognized union or other duly authorized representative of
such workers.
(C) Employers of such workers, one-stop operators or one-stop partners (as
defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C.
2801)), including State employment security agencies, or the State dislocated
worker unit established under title I of such Act, on behalf of such workers.
(2) Upon receipt of a petition filed under paragraph (1), the Governor shall –
(A) ensure that rapid response assistance, and appropriate core and intensive
services (as described in section 134 of the Workforce Investment Act of
1998 (29 U.S.C. 2864)) authorized under other Federal laws are made
available to the workers covered by the petition to the extent authorized
under such laws; and
(B) assist the Secretary in the review of the petition by verifying such
information and providing such other assistance as the Secretary may
request.”
Administration: Beginning on November 4, 2002, petitions for certification of
eligibility to apply for adjustment assistance must be filed simultaneously with the
Secretary of Labor and the Governor of the State where the petitioning workers
worked. Although the language of the statute says “may” be filed simultaneously,
the legal interpretation is that anyone who has standing to file a petition and who
wishes to do so must file simultaneously with the Secretary and the Governor in
order that they are both able to carry out their statutory responsibilities. If the statute
had said “shall” file simultaneously, that would be a legal requirement that all
persons in the United States who fit into one or more of the three listed categories
must file petitions for adjustment assistance.
Throughout these operating instructions, the terms “filed” and “received” have the
same meaning with respect to the petitioning process. Regulations published at 29
CFR 90.2 state that “Date of filing means the date on which petitions and other
documents are received by the Office of Trade Adjustment Assistance, Employment
and Training Administration, U.S. Department of Labor… ”.
Petitions may be filed by any of the following:
1. Three or more individual members of the affected worker group;
2. An official of the certified or recognized union that represents the workers;
3. An official of the company where the workers worked;
4. One-Stop operators or partners as defined in Section 101 of the WIA,
including SWAs or the State dislocated worker unit.
The State is also required to assist the Secretary in the review of the petition by
verifying such information and providing other assistance as the Secretary may
request. However, States no longer perform preliminary investigations as they did
under the NAFTA-TAA program.
States must be prepared to assist petitioners in completing and filing petitions.
Petition forms must be readily available in all One-Stop Career Centers and other
local offices of the SWA. Upon receiving a petition, the State must immediately
transmit the petition by facsimile or other electronic means to DOL. If a petition is
received both in the State and transmitted to DOL on the same day, the petition will
be considered to have been filed simultaneously with the Secretary and the
Governor. However, in practice, strictly simultaneous filing may not be practical. If
a petition is not received on the same day by both the Secretary and the Governor, it
will be considered to be filed on the later of the two different dates of receipt. A new
petition form will be supplied to the States by DOL; the new petition form will also
be available for download from the TAA Web site (http://www.doleta.gov/tradeact).
Petitions filed on or after November 4, 2002, must use the new form.
B.2. Rapid Response
Upon receipt of a petition on or after November 4, 2002, the State must ensure that
rapid response assistance and appropriate core and intensive services, as described in
Section 134 of the WIA, are made available to the workers covered by the petition to
the extent authorized under the WIA and other Federal laws. This requirement
applies to every petition received. If a petition is generated during the course of
rapid response assistance to a worker group, this requirement will be satisfied for
that petition. The State shall use the date that the petition is received by the State as
the criterion for providing rapid response assistance.
C. GROUP ELIGIBILITY REQUIREMENTS
Section 113 of the 2002 Act amends Section 222 of the 1974 Act by broadening the
criteria for certification and adding eligibility for certain secondarily-affected
workers. In order to properly assist workers or their representatives to file petitions
for adjustment assistance, or to properly file themselves on behalf of workers, States
must know the new criteria for certification of petitions for both primarily-affected
workers and secondarily-affected workers. Responsibility for investigating petitions
and applying the criteria for certification will rest with DOL.
It is important to note from the outset that the inclusion of secondarily-affected
workers does not create a separate group of certified workers who are eligible for
benefits and services that are different from those available to other certified
workers. All workers covered by certifications issued pursuant to petitions filed on
or after November 4, 2002, whether they are ‘primarily affected’or ‘secondarily
affected’, are eligible to apply for the same set of benefits and services.
C.1. Certification Criteria
Statutory Change: Section 113 of the 2002 Act amends Section 222(a) of the 1974
Act to read as follows:
“(a) In General. – A group of workers (including workers in any agricultural firm of
subdivision of an agricultural firm) shall be certified by the Secretary as eligible to
apply for adjustment assistance under this chapter pursuant to a petition filed under
section 221 if the Secretary determines that –
(1) 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
(2) (A) (i) the sales or production, or both, of such firm or subdivision have
decreased absolutely;
(ii) import of articles like or directly competitive with articles produced
by such firm or subdivision have increased; and
(iii) the increase in imports described in 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) (i) there has been a shift of production by such workers’ firm or
subdivision to a foreign country of articles like or directly competitive
with articles which are produced by such firm or subdivision; and
(ii) (I) the country to which the workers’firm has shifted production
of the articles is a party to a free trade agreement with the
United States;
(II) the country to which the workers’firm has shifted production
of the articles is a beneficiary country under the Andean Trade
Preferences Act, African Growth and Opportunity Act, or the
Caribbean Basin Economic Recovery Act; or
(III) there has been or is likely to be an increase in imports of
articles that are like or directly competitive with articles which
are or were produced by such firm or subdivision.”
Administration: The criteria for certification of eligibility to apply for adjustment
assistance now cover adverse effects either from increased imports or from a shift of
production to certain countries. In order for a certification to be issued, the petition
must satisfy these two criteria:
1. A significant number or proportion of the workers in the workers’ firm, or an
appropriate subdivision of such firm, must have become totally or partially
separated or be threatened with total or partial separation.
2. The second criterion is satisfied if either A or B below are satisfied:
A. (i) sales or production, or both, at the petitioning workers’firm or
subdivision must have decreased absolutely, and
(ii) imports of articles like or directly competitive with articles produced
by the petitioning workers’firm or subdivision have increased, and
(iii) the increase in imports described in (ii) contributed importantly to the
petitioning workers’separation or threat of separation and to the decline
in sales or production at the firm or subdivision.
B. (i) there has been a shift of production by the petitioning workers’firm
or subdivision to a foreign country of articles like or directly competitive
with the articles which are produced by the firm or subdivision, and
(ii) one of the following conditions applies:
a. the country to which the workers’firm has shifted production
of the articles is a party to a free trade agreement with the
United States; or
b. the country to which the workers’firm has shifted production
of the articles is a beneficiary country under the Andean Trade
Preference Act, the African Growth and Opportunity Act, or
the Caribbean Basin Economic Recovery Act, or
c. there has been or is likely to be an increase in imports of the
articles that are like or directly competitive with articles which
are or were produced by the firm or subdivision.
The new certification criteria are basically a combination of the criteria for the old
TAA program and those for the NAFTA-TAA program. The first set of criteria for
certification are the same as those that have applied to the TAA program since its
inception. The second set of criteria takes the shift of production criterion from the
NAFTA-TAA program and modifies it to cover shifts to many, but not all, countries.
The applicable countries are those included in three specific trade-promotion Acts
and any others that are parties to free-trade agreements with the United States. The
group of countries that are applicable for these purposes may change from time to
time; a current list of such countries will be available on the TAA Web site. For
shifts of production to countries that do not fall into either of those groups, there is a
third criterion that covers actual or prospective increases of imports of like or
directly competitive products. The latter criterion does not require that the actual or
prospective increases in imports come from the country to which the shift of
production occurred.
C.2. Secondarily-Affected Worker Eligibility
Statutory Change: Section 113(b) of the 2002 Act continues the amendments to
Section 222 of the 1974 Act by redesignating Section 222(b) of the 1974 Act as
Section 222(c) and inserting the following:
“(b) Adversely Affected Secondary Workers. – A group of workers (including
workers in any agricultural firm or subdivision of an agricultural firm) shall be
certified by the Secretary as eligible to apply for adjustment assistance benefits under
this chapter if the Secretary determines that –
(1) a significant number or proportion of the workers in the workers’firm or
an appropriate subdivision of the firm have become totally or partially
separated, or are threatened to become totally or partially separated;
(2) the workers’firm (or subdivision) is a supplier or downstream producer
to a firm (or subdivision) that employed a group of workers who received
a certification of eligibility under subsection (a), and such supply or
production is related to the article that was the basis for such certification
(as defined in subsection (c)(3) and (4)); and
(3) either –
(A) the workers’firm is a supplier and the component parts it supplied
to the firm (or subdivision) described in paragraph (2) accounted
for at least 20 percent of the production or sales of the workers’
firm; or
(B) a loss of business by the workers’firm with the firm (or
subdivision) described in paragraph (2) contributed importantly to
the workers’separation or threat of separation determined under
paragraph (1).”
Section 113(b) of the 2002 Act amends Section 222(c) (as redesignated) of the 1974
Act by adding the following:
“(3) Downstream Producer. – The term ‘downstream producer’means a firm that
performs additional, value-added production processes for a firm or subdivision,
including a firm that performs final assembly or finishing, directly for another firm
(or subdivision), for articles that were the basis for a certification of eligibility under
subsection (a) of a group of workers employed by such other firm, if the certification
of eligibility under subsection (a) is based on an increase in imports from, or a shift
of production to, Canada or Mexico.
(4) Supplier. – The term ‘supplier’ means a firm that produces and supplies directly
to another firm (or subdivision) component parts for articles that were the basis for a
certification of eligibility under subsection (a) of a group of workers employed by
such other firm.”
Administration: There are basically two groups of workers that can be certified as
eligible to apply for adjustment assistance because the workers are secondarily
affected - workers who supply components (upstream) to a firm whose workers are
certified (primary) or workers who perform additional, value-added production and
finishing operations (downstream) for a firm whose workers are certified (primary).
Upstream workers must directly supply the primary firm. The articles produced by
upstream workers must be directly incorporated into the articles that were the basis
for the certification of the primary firm’s workers. Supplier chains are often
categorized according to “tiers.” Firms in the first tier supply components directly to
the producer of the final product. Firms in the second tier supply components to
firms in the first tier, and so forth. The secondary-worker coverage applies only to
workers employed by firms in the first tier. The components supplied to the primary
firm by the upstream workers must either account for at least 20 percent of the
production or sales of the upstream firm, or the loss of business with the primary
firm by the upstream firm must have contributed importantly to the upstream
workers’separations or threat of separations. For upstream workers to be certified as
secondarily affected, the import impact on the primary firm can come from increased
imports from any country or a shift of production to any country that qualifies under
the shift-of-production criteria.
Downstream workers must directly perform additional, value-added production
processes, including final assembly or finishing, on the products of the primary firm.
Downstream workers can only be certified as secondarily affected if the workers of
the primary firm are certified based on increased imports from Canada or Mexico or
a shift of production to Canada or Mexico. Also, the downstream workers’firm must
have suffered a loss of business with the primary firm that contributed importantly to
the workers’separations or threat of separations.
C.3. Secondary Worker Coverage Under the SAA
The secondary-worker coverage that was established by the Statement of
Administrative Action (SAA) that accompanied the NAFTA implementing
legislation applied only to workers who were adversely affected by imports from, or
a shift of production to, Canada or Mexico. Workers determined to be secondarily
impacted under the SAA received benefits and services through the dislocated
worker program under WIA. Under the 2002 Act, the TAA program will be
responsible for benefits and services provided to workers who are certified as
secondarily affected pursuant to petitions received on or after November 4, 2002.
The benefits and services available to such workers, and the eligibility criteria
applicable to them, are exactly the same as for workers who are certified as primarily
impacted.
D. TRADE READJUSTMENT ALLOWANCES
D.1. Exhaustion of Unemployment Insurance
Statutory Change: Section 114(a) of the 2002 Act amends Section 231(a)(3)(B) of
the 1974 Act by inserting at the end of the subsection “except additional
compensation that is funded by a State and is not reimbursed from any Federal
funds.”
Administration: As amended, Section 231(a)(3)(B) requires that a worker must
exhaust all entitlement to unemployment insurance in order to be eligible for TRA.
Entitlement to unemployment insurance includes regular UC and Extended Benefits
(EB) and Temporary Extended Unemployment Compensation (TEUC). However,
the new amendment means that an eligible worker may receive TRA before (or,
depending on State law, along with) receiving additional compensation that is
entirely State-funded.
Under Section 233(a)(1) of the 1974 Act, which has not been amended, a
determination of the amount of basic TRA to which an eligible worker is entitled is
made by computing 52 times the most recent TRA weekly benefit amount (WBA),
then deducting from that amount the sum of the unemployment insurance to which
the worker was entitled in the worker’s first benefit period. However, the statutory
change to Section 231(a)(3)(B) is interpreted to mean that additional compensation
that is entirely State-funded shall not be deducted from the product of 52 times the
worker’s WBA in computing a worker’s basic TRA maximum benefit amount.
D.2. Enrollment in Training Requirement
Statutory Change: Section 114(b) of the 2002 Act amends Section 231(a)(5)(A) of
the 1974 Act to read:
“(5) Such worker
(A)(i) is enrolled in a training program approved by the Secretary under Section
236(a) of this title, and
(ii) the enrollment required under clause (i) occurs no later than the latest of –
(I) the last day of the 16th week after the worker’s most recent total
separation from adversely affected employment which meets the
requirements of paragraphs (1) and (2),
(II) the last day of the 8th week after the week in which the Secretary
issues a certification covering the worker,
(III) 45 days after the later of the dates specified in subclause (I) or (II), if
the Secretary determines that there are extenuating circumstances that
justify an extension in the enrollment period, or
(IV) the last day of a period determined by the Secretary to be approved
for enrollment after the termination of a waiver issued pursuant to
subsection (c).”
Administration: “Enrolled in training” means that the worker’s application for
training has been approved by the SWA and that the training institution has furnished
written notice to the SWA that the worker has been accepted into the approved
program which is to begin within 30 days of such approval (20 CFR
617.11(a)(2)(vii)(D)). States are encouraged to select training providers that have
met the qualifications necessary to be included in the Eligible Training Provider List
(ETPL) as defined in the WIA.
“Extenuating circumstances” are situations that could arise when training programs
are abruptly cancelled or where the first available enrollment date is past the end of
the 60-day period, as well as in cases where a worker suffers injury or illness that
adversely affects the worker’s ability to enroll in training. These new enrollment
deadlines are nearly the same as those that have existed for the NAFTA-TAA
program since 1994. These deadlines may be waived for specified reasons, which
are discussed next. However, the intent of the time limitations is that adversely-
affected workers who are in need of training be enrolled in training quickly in order
to expedite their adjustment and reemployment.
For purposes of subsection IV, “the last day of a period determined by the Secretary”
is the first Monday of the week following the week in which the waiver is
terminated, whether by revocation or expiration, until such time as this issue is
addressed in regulations.
D.3. Training Waivers
Statutory Change: Section 115 of the 2002 Act amends Section 231(c) of the 1974
Act to read as follows:
“(c) Waivers of Training Requirements. –
(1) Issuance of waivers – The Secretary may issue a written statement to an
adversely affected worker waiving the requirement to be enrolled in training
described in subsection (a)(5)(A) if the Secretary determines that it is not
feasible or appropriate for the workers, because of 1 or more of the following
reasons:
(A) Recall. – The worker has been notified that the worker will be recalled by
the firm from which the separation occurred.
(B) Marketable Skills. – The worker possesses marketable skills for suitable
employment (as determined pursuant to an assessment of the worker,
which may include the profiling system under section 303(j) of the Social
Security Act (42 U.S.C. 503(j)), carried out in accordance with guidelines
issued by the Secretary) and there is a reasonable expectation of
employment at equivalent wages in the foreseeable future.
(C) Retirement. – The worker is within 2 years of meeting all requirements
for entitlement to either –
(i) old-age insurance benefits under title II of the Social Security Act
(42 U.S.C. 401 et. seq.) (except for application therefor); or
(ii) a private pension sponsored by an employer or labor organization.
(D) Health. – The worker is unable to participate in training due to the health
of the worker, except that a waiver under this subparagraph shall not be
construed to exempt a worker from requirements relating to the
availability for work, active search for work, or refusal to accept work
under Federal or State unemployment compensation laws.
(E) Enrollment Unavailable. – The first available enrollment date for the
approved training of the worker is within 60 days after the date of the
determination made under this paragraph, or, if later, there are
extenuating circumstances for the delay in enrollment, as determined
pursuant to guidelines issued by the Secretary.
(F) Training Not Available. – Training approved by the Secretary is not
reasonably available to the worker from either governmental agencies or
private sources (which may include area vocational education schools, as
defined in section 3 of the Carl D. Perkins Vocational and Technical
Education Act of 1998 (20 U.S.C. 2302), and employers), no training that
is suitable for the worker is available at reasonable cost, or no training
funds are available.
(2) Duration of Waivers. –
(A) In General. – A waiver issued under paragraph (1) shall be effective for
not more than 6 months after the date on which the waiver is issued,
unless the Secretary determines otherwise.
(B) Revocation. – The Secretary shall revoke a waiver issued under
paragraph (1) if the Secretary determines that the basis of a waiver is no
longer applicable to the worker and shall notify the worker in writing of
the revocation.
(3) Agreements Under Section 239. –
(A) Issuance by Cooperating States. – Pursuant to an agreement under
section 239, the Secretary may authorize a cooperating State to issue
waivers as described in paragraph (1).
(B) Submission of Statements. – An agreement under section 239 shall
include a requirement that the cooperating State submit to the Secretary
the written statements provided under paragraph (1) and a statement of
the reasons for the waiver.”
Section 115 of the 2002 Act also amends Section 231(a)(5)(C) of the 1974 Act by
striking the word “certified”.
Administration: There are now six specific criteria for issuing a waiver of the
training requirement. Criterion (A) requires that a worker has received specific
notice of recall to the worker’s adversely-affected employment. States shall require
that this notice of recall be in writing from the firm. Criterion (B) should be used as
a means of encouraging more rapid reemployment and the use of up-front job search.
As part of the marketable skills test, workers in a petitioning worker group may
receive core and intensive services using rapid response funding before their petition
is certified to encourage more rapid reemployment. Criterion (E) requires that the
worker’s training begin within 60 days after the approval of the waiver, unless there
are extenuating circumstances. Such circumstances could arise when training
programs are abruptly cancelled or where the first available enrollment date is past
the end of the 60-day period, as well as in cases where a worker suffers injury or
illness that adversely affects the worker’s ability to enroll in training. The statutory
language in Criteria (C), (D), and (F) needs no further explanation.
Also, as before, a waiver only applies to eligibility for basic TRA, not additional
TRA. In order to receive additional TRA, a worker must be participating in
approved training in each week for which the additional TRA is paid.
In accordance with Section 231(c)(3)(A) of the 1974 Act, as amended by the 2002
Act, States may issue waivers from the training requirement, when necessary and
proper, in accordance with the statutory language and these instructions for eligible
workers who are covered by certifications issued pursuant to petitions received on or
after November 4, 2002. Also, in accordance with Section 231(c)(3)(B) of the 1974
Act, as amended by the 2002 Act, States must submit to the Secretary reports on all
waivers issued. The required reports are discussed in more detail in these
instructions in Section K, Program Reporting.
D.4. Limitations on TRA
Statutory Change: Section 116(a) of the 2002 Act amends Section 233(a) of the
1974 Act so that paragraph (2) reads as follows:
“(2) A trade readjustment allowance shall not be paid for any week occurring after
the close of the 104-week period (or, in the case of an adversely affected worker who
requires a program of remedial education (as described in section 236(a)(5)(D)) in
order to complete training approved for the worker under section 235, the 130-week
period) that begins with the first week following the week in which the adversely
affected worker was most recently totally separated from adversely affected
employment –
(A) within the period which is described in section 231(a)(1) of this title, and
(B) with respect to which the worker meets the requirements of section
231(a)(2) of this title.”
Administration: This section of the 1974 Act creates a 104-week period beginning
with a worker’s most recent total qualifying separation during which the worker may
receive any basic TRA to which the worker is entitled. States must continue to apply
this rule, except that, in cases where a worker requires remedial education as part of
the worker’s reemployment plan, such a worker has a 130-week period in which to
receive any basic TRA to which the worker is entitled.
Statutory Change: Section 116(a) of the 2002 Act also amends Section 233(a) of
the 1974 Act so that paragraph (3) reads as follows:
“(3) Notwithstanding paragraph (1), in order to assist the adversely affected worker
to complete training approved for him under section 236 of this title, and in
accordance with regulations prescribed by the Secretary, payments may be made as
trade readjustment allowances for up to 52 additional weeks in the 52-week period
that –
(A) follows the last week of entitlement to trade readjustment allowances
otherwise payable under this part; or
(B) begins with the first week of such training, if such training begins
after the last week described in subparagraph (A). Payments for such
additional weeks may be made only for weeks in such 52-week period
during which the individual is participating in such training.”
Administration: This amendment increases the maximum number of weeks of
additional TRA for all eligible workers from 26 to 52. In all other respects, the
regulations and operating instructions related to additional TRA are unchanged,
except for the case where a worker who undergoes remedial training may qualify for
up to 26 more weeks of additional TRA (see below). States must continue to apply
the regulatory definition of additional TRA (20 CFR 617.3(m)(2)), and the
regulations on weeks of additional TRA (20 CFR 617.15(b)), which continue to be in
effect until they are superseded by new regulations, except that all occurrences of
“26 weeks” in the regulations are interpreted as referring to “52 weeks” for workers
covered by certifications that are issued pursuant to petitions received on or after
November 4, 2002.
Statutory Change: Section 116(b) of the 2002 Act amends Section 233(f) of the
1974 Act to read:
“(f) Workers treated as participating in training.
For purposes of this part, a worker shall be treated as participating in training during
any week which is part of a break in training that does not exceed 30 days if –
(1) the worker was participating in a training program approved under
section 236 of this title before the beginning of such break in training,
and
(2) the break is provided under such program.”
Administration: A State must continue to pay TRA to a worker who is receiving
TRA while participating in approved training during scheduled or other normal
breaks in the training that last for up to 30 days. The regulations which govern
breaks in training, 20 CFR 617.15(d), continue in effect, except that the number “14”
in that section is interpreted as “30” and the number “15” found in section
617.15(d)(3) is interpreted as “31” until they are superseded by new regulations. In
addition, the reference to “14-day break in training” in 20 CFR 617.22(f)(3)(ii) is
interpreted as “30-day break in training”.
Statutory Change: Section 116(c) of the 2002 Act amends Section 233 of the 1974
Act by adding the following subsection at the end:
“(g) Notwithstanding any other provision of this section, in order to assist an
adversely affected worker to complete training approved for the worker under
section 236 which includes a program of remedial education (as described in section
236(a)(5)(D)), and in accordance with regulations prescribed by the Secretary,
payments may be made as trade readjustment allowances for up to 26 additional
weeks in the 26-week period that follows the last week of entitlement to trade
readjustment allowances otherwise payable under this chapter.”
Administration: Remedial education is defined as training in the elementary skills
that every worker must have in order to achieve basic reemployability. Remedial
training should be considered pre-vocational; that is, it leads to occupational, on-the-
job, or customized training that will equip the participant with specific job skills.
Wherever practical, remedial training should be conducted concurrently with the
early parts of occupational training. Examples of remedial education are basic
writing and mathematical skills training, English as a Second Language (ESL), and
courses leading to a G.E.D.
For a worker who must undergo remedial education as part of the worker’s retraining
plan, the maximum number of weeks of additional TRA is 78, or 26 more than the
maximum for workers who do not participate in remedial education. States must
also apply the definition of additional TRA (20 CFR 617.3(m)(2)) as well as the
regulations on weeks of additional TRA (20 CFR 617.15(b)), which continue to be in
effect until they are superseded by new regulations, except that all occurrences of
“26 weeks” in the regulations shall be interpreted as referring to “78 weeks” for
workers who undergo remedial education and are covered by certifications that are
issued pursuant to petitions received on or after November 4, 2002. In addition,
States must pay the weeks of the TRA for trainees in remedial education on the basis
of one week of this additional TRA for one week of remedial education, up to the 26-
week maximum. For example, if a worker undergoes 15 weeks of remedial
education, then participates in occupational training, the State may not pay more than
15 weeks of this additional TRA for trainees in remedial education. If a worker
undergoes more than 26 weeks of remedial education, the worker may not receive
more than the maximum of 26 weeks of this additional TRA. However many weeks
a worker is eligible for, those weeks must be a fixed, continuous time period of that
many weeks. The weeks of additional TRA for remedial education must follow the
last week of entitlement to any other TRA otherwise payable.
D.5. TRA-Related Provisions That Are Unchanged
Most of the statutory provisions related to trade readjustment allowances remain the
same as they were before the 2002 Act. Except for the specific provision discussed
above, the TRA provisions found in Sections 231 through 234 of the 1974 Act (19
U.S.C 2291 through 19 U.S.C. 2294) must be administered according to regulations
published at 20 CFR 617.10 through 617.19 until those regulations are superseded by
regulations implemented as a result of the enactment of the 2002 Act. In summary,
the unchanged TRA-related provisions are:
1. Qualifying requirements for TRA that are unchanged are:
A. The worker’s separation must have occurred between the impact date
and the expiration date that are specified in the certification under
which the worker is covered.
B. The worker must have had, during the 52-week period ending with
the week in which the worker’s qualifying separation occurred, 26
weeks of employment at wages of $30 or more per week in adversely
affected employment with a single firm or subdivision of a firm. The
statutory provisions regarding the definition of weeks of employment
continue to apply.
C. The worker must be entitled to, or would be entitled to if the worker
applied for, unemployment insurance for a week within the benefit
period in which the worker’s qualifying separation took place or
which began, or would have begun, by reason of filing of a claim for
unemployment insurance by such worker after such qualifying
separation.
D. The worker would not be disqualified for extended compensation
under the Federal-State Extended Unemployment Compensation Act
of 1970 by reason of the work acceptance and job search requirements
in section 202(a)(3) of such Act for weeks in which the worker is not
in approved training.
E. The worker is enrolled in an approved training program, or has
completed the approved training program, or has a waiver from these
requirements.
2. The prohibition against paying TRA to any worker who has failed to begin
participation in training, or has ceased to participate in training, without
justifiable cause, is unchanged.
3. The statutory provisions related to weekly amounts of TRA are unchanged.
4. The requirement that, in order to be eligible for additional TRA, a worker
make a bona fide application for training within 210 days of the later of the
worker’s most recent qualifying separation or the first certification of
eligibility to apply for adjustment assistance that covers the worker remains
unchanged. Under the NAFTA-TAA program, this requirement was
irrelevant because no waivers of the training requirement were permitted
under that program. Therefore, a worker not only had to file a bona fide
training plan, the worker was required to be enrolled in training within the
6/16-week time limits in order to receive any TRA. However, the possibility
that a worker could receive a waiver of up to six-months’duration of the
8/16-week time limits implies that it is possible for a worker to file a bona
fide training plan, and enroll in training, more than 210 days after the later of
the dates mentioned above and before the worker’s basic TRA entitlement is
exhausted. Hence, this provision of the law is still applicable.
5. The statutory provisions in Section 233(c) related to adjustments of amounts
payable are unchanged.
6. The provisions in Section 234 on application of State laws are unchanged.
E. JOB RETRAINING
E.1. Cap on Training Funds
Statutory Change: Section 117 of the 2002 Act amends Section 236(a)(2)(A) of the
1974 Act by increasing the cap on training funds that can be allocated to the States to
$220 million per year.
Administration: These funds must cover training, including necessary
transportation and subsistence allowances, for all eligible workers, including those
covered by certifications issued under the NAFTA-TAA program. States apply for
training funds in the same way as before, by submitting Form ETA 9023 through the
appropriate Regional office.
E.2. Employer-Based Training
Statutory Change: Section 118(a) of the 2002 Act amends Section 236(a)(5)(A) of
the 1974 act by changing “on-the-job training” to “employer-based training,
including (i) on-the-job training and (ii) customized training.” In addition, Section
118(b) of the 2002 Act amends Section 236(c)(8) of the 1974 Act to read “the
employer is 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.” (Note: the previous language of Section 236(c)(8), which is
replaced, was “the employer certifies to the Secretary that the employer will continue
to employ such worker for at least 26 weeks after completion of such training if the
worker desires to continue such employment and the employer does not have due
cause to terminate such employment.”)
Finally, Section 118(c) of the 2002 Act adds a subsection to the end of Section 236
of the 1974 act as follows:
“(c) For purposes of this section, the term ‘customized training’ means training that
is –
(1) designed to meet the special requirements of an employer or group of
employers;
(2) conducted with a commitment by the employer or group of employers to
employ an individual upon successful completion of the training; and
(3) for which the employer pays for a significant portion (but in no case less
than 50 percent) of the cost of such training, as determined by the
Secretary.”
Administration: The previous requirement for on-the-job training, that the
employer promise to continue to employ a worker in on-the-job training for at least
26 weeks after the completion of the training (provided that the worker wants to
continue employment and the employer does not have due cause to terminate the
employment) is not applicable to workers covered by certifications issued pursuant
to petitions filed on or after November 4, 2002. The definitions of on-the-job and
customized training, and the approval criteria for such training, are now very similar
to the equivalent definitions and approval criteria for such training under the
dislocated worker program of WIA. On-the-job training is job training that occurs at
a firm where the trainee is employed by the firm. Customized training is training
designed to the specific requirements of a firm or group of firms, but conducted by a
separate training vendor. In customized training, the trainee is not employed by the
firm or group of firms for which the training is designed.
Current TAA regulations published at 20 CFR 617.23(c)(1) require that States give
priority, insofar as possible, to on-the-job training when designing a reemployment
program for an eligible worker. States shall also give priority, insofar as possible, to
customized training for eligible workers. These forms of training ensure that
workers obtain job skills which are necessary to obtain employment in a particular
occupation.
E.3. Length of Training
The limit of 104 weeks on the length of a TAA-approved training program is not
statutory. That limit is in the regulations (20 CFR 617.22(f)(2)). The new limits on
weeks of TRA that are contained in the 2002 Act are interpreted to mean that
Congress intended to match the maximum number of weeks of training with the
maximum number of weeks of income support (UI plus TRA). The 2002 Act
allows up to 26 weeks of TRA for workers who must complete some remedial
education before beginning their retraining programs. Therefore, the intent of the
statute is interpreted as allowing a maximum of 130 weeks of training in cases where
workers require remedial education before they can enroll in occupational training.
The number of weeks of training that are between 104 and 130 cannot be more than
the number of weeks of the remedial training. For example, if a worker’s remedial
training lasts for only 10 weeks, then the maximum number of weeks of training for
that worker would be 114 weeks. Even if the remedial training is more than 26
weeks, the maximum number of weeks for the total retraining plan cannot exceed
130.
E.4. Statutory Training-Related Provisions That Are Unchanged
Most of the statutory provisions related to job retraining remain the same as they
were prior to the 2002 Act. Except for the two specific provisions discussed above,
the job training provisions found in Section 236 of the 1974 Act (19 U.S.C 2296)
shall be administered according to regulations published at 20 CFR 617.22 through
617.25 until those regulations are superseded by regulations implementing the 2002
Act. In summary, the unchanged training-related provisions are:
1. The six criteria for approving training which are found in Section 236(a)(1)
of the 1974 Act (19 U.S.C. 2296(a)(1));
2. The prohibitions against non-duplication of payments which are found in
Sections 236(a)(4), 236(a)(6), and 236(a)(7) of the 1974 Act (19 U.S.C.
2296(a)(4), 2296(a)(6), and 2296(a)(7));
3. The types of training that may be approved for eligible workers which are
found in Section 236(a)(5) of the 1974 Act (19 U.S.C. 2296(a)(5));
4. Supplementary assistance to defray the costs of transportation and
subsistence expenses when training is provided in facilities which are not
within the commuting distance of the worker’s regular place of residence
provided in Section 236(b) of the 1974 Act (19 U.S.C. 2296(b));
5. Criteria for approving on-the-job and customized training (except for
criterion 8 discussed above) which are found in Section 236(c) of the 1974
Act (19 U.S.C. 2296(c));
6. The prohibition against finding a worker ineligible for unemployment
insurance because of participation in approved training found in Section
236(d) of the 1974 Act (19 U.S.C. 2296(d); and
7. The definition of the term “suitable employment,” used for the purposes of
Section 236 only, found in Section 236(e) of the 1974 Act (19 U.S.C 2296(e).
F. JOB SEARCH ALLOWANCES
Statutory Change: Section 121 of the 2002 Act amends Section 237 of the 1974
Act to read as follows:
“Sec. 237. Job Search Allowances
(a) Job Search Allowance Authorized. –
(1) In General. – An adversely affected worker covered by a certification
issued under subchapter A of this chapter may file an application with the
Secretary for payment of a job search allowance.
(2) Approval of Applications. – The Secretary may grant an allowance
pursuant to an application filed under paragraph (1) when all of the
following apply:
(A) Assist Adversely Affected Worker. – The allowance is paid to
assist an adversely affected worker who has been totally separated
in securing a job within the United States.
(B) Local Employment Not Available. – The Secretary determines
that the worker cannot reasonably be expected to secure suitable
employment in the commuting area in which the worker resides.
(C) Application. – The worker has filed an application for the
allowance with the Secretary before –
(i) the later of –
(I) the 365th day after the date of the certification
under which the worker is certified eligible; or
(II) the 365th day after the date of the worker’s last
total separation; or
(ii) the date that is the 182nd day after the date on which
the worker concluded training, unless the worker
received a waiver under section 231(c).
(b) Amount of Allowance. –
(1) In General. – An allowance granted under subsection (a) shall provide
reimbursement to the worker of 90 percent of the cost of necessary job
search expenses as prescribed by the Secretary in regulations.
(2) Maximum Allowance. – Reimbursement under this subsection may not
exceed $1,250 for any worker.
(3) Allowance for Subsistence and Transportation. – Reimbursement under
this subsection may not be made for subsistence and transportation
expenses at levels exceeding those allowable under section 236(b)(1) and
(2).
(c) Exception. – Notwithstanding subsection (b), the Secretary shall reimburse any
adversely affected worker for necessary expenses incurred by the worker in
participating in a job search program approved by the Secretary.”
Administration: The new job search section is simply a rewriting of the previous
job search section. The qualifying conditions are the same as before and the
application deadlines are the same as before, except that the new limit for
reimbursement per worker per certification is $1,250. Therefore, States must
continue to administer job search allowances in accordance with regulations
published at 20 CFR 617.30 through 617.35, except that the “$800” in section
617.34(b) is interpreted to be “$1,250,” until those regulations are superseded by
new regulations.
G. RELOCATION ALLOWANCES
Statutory Change: Section 122 of the 2002 Act amends Section 238 of the 1974
Act to read as follows:
“Sec. 238. Relocation Allowances
(a) Relocation Allowance Authorized. –
(1) In General. – Any adversely affected worker covered by a
certification issued under subchapter A of this chapter may file an
application for a relocation allowance with the Secretary, and the
Secretary may grant the relocation allowance, subject to the terms and
conditions of this section.
(2) Conditions for Granting Allowance. – A relocation allowance may be
granted if all of the following terms and conditions are met:
(A) Assist An Adversely Affected Worker. – The relocation
allowance will assist an adversely affected worker in
relocating within the United States.
(B) Local Employment Not Available. – The Secretary determines
that the worker cannot reasonably be expected to secure
suitable employment in the commuting area in which the
worker resides.
(C) Total Separation. – The worker is totally separated from
employment at the time the relocation commences.
(D) Suitable Employment Obtained. – The worker
(i) has obtained suitable employment affording a
reasonable expectation of long-term duration in the
area in which the worker wished to relocate; or
(ii) has obtained a bona fide offer of such employment.
(E) Application. – The worker filed an application with the
Secretary before –
(i) the later of –
(I) the 425th day after the date of the certification
under subchapter A of this chapter; or
(II) the 425th day after the date of the worker’s last
total separation; or;
(ii) the date that is the 182nd day after the date on which
the worker concluded training, unless the worker
received a waiver under section 231(c).
(b) Amount of Allowance. – The relocation allowance granted to a worker under
subsection (a) includes –
(1) 90 percent of the reasonable and necessary expenses (including, but
not limited to, subsistence and transportation expenses at levels not
exceeding those allowable under section 236(b)(1) and (2) specified
in regulations prescribed by the Secretary, incurred in transporting the
worker, the worker’s family, and household effects; and
(2) a lump sum equivalent to 3 times the worker’s average weekly wage,
up to a maximum payment of $1,250.
(c) Limitations. – A relocation allowance may not be granted to a worker unless –
(1) the relocation occurs within 182 days after the filing of the application
for relocation assistance; or
(2) the relocation occurs within 182 days after the conclusion of training,
if the worker entered a training program approved by the Secretary
under section 236(b)(1) and (2).”
Administration: Like the amendment to the job search section, the amendment to
the relocation section is simply a rewording of the previous language, except that the
one-time payment limit is raised to $1,250. States shall continue to administer
relocation allowances in accordance with regulations published at 20 CFR 617.40
through 617.48, except that “$800” found in section 617.45(a)(3) shall be interpreted
as “$1,250,” until those regulations are superseded by new regulations.
H. REPEAL OF THE NAFTA-TAA PROGRAM
Section 123 of the 2002 Act repeals Subchapter D of Chapter 2 of Title II of the
1974 Act, as amended. Section 123 also establishes transition procedures that will
be in effect for petitions filed before the effective date of the 2002 Act and for
workers currently receiving benefits and services under the NAFTA-TAA program.
H.1. Repeal of the NAFTA-TAA program
Statutory Change: Section 123(a) repeals the NAFTA-TAA program as follows:
“(a) In General. – Subchapter D of chapter 2 of title II of such Act (19 U.S.C. 2331)
is repealed.”
Section 123(b) of the 2002 Act makes conforming amendments to other parts of the
1974 Act as follows:
“(b) Conforming Amendments. –
(1) Section 225(b) (1) and (2) of the Trade Act of 1974 (19 U.S.C.
2275(b) (1) and (2)) is amended by striking ‘or subchapter D’each
place it appears.
(2) Section 249A of such Act (19 U.S.C. 2322) is repealed.
(3) The table of contents of such Act is amended –
(A) by striking the item relating to section 249A; and
(B) by striking the items relating to subchapter D of chapter 2 of
title II.
(4) Section 284(a) of such Act is amended by striking ‘or section
250(c)’.”
H.2. Transition Procedures
Section 123(c) of the 2002 Act establishes an effective date and transition procedures
as follows:
“(c) Effective Date. –
(1) In General. – The amendments made by this section shall apply with
respect to petitions filed under chapter 2 of title II of the Trade Act of
1974, on or after the date that is 90 days after the date of enactment of
this Act.
(2) Workers Certified As Eligible Before Effective Date. –
Notwithstanding subsection (a), a worker receiving benefits under
chapter 2 of title II of the Trade Act of 1974 shall continue to receive
(or be eligible to receive) benefits and services under chapter 2 of title
II of the Trade Act of 1974, as in effect on the day before the
amendments made by this section take effect under subsection (a), for
any week for which the worker meets the eligibility requirements of
such chapter 2 as in effect on such date.”
Administration: Sections 123(c)(1) and 123(c)(2) of the 2002 Act set out the
transition procedures for the NAFTA-TAA program. The operating instructions for
the NAFTA-TAA program that are contained in General Administration Letter 7-94,
along with Changes 1, 2, and 3 thereto, continue in effect for petitions received by
the State before the effective date of the 2002 Act, which is November 4, 2002. The
Governor’s agent that now receives NAFTA-TAA petitions must continue to receive
NAFTA-TAA petitions, and perform preliminary investigations thereon, until the
preliminary investigations are completed on all NAFTA-TAA petitions received on
or before November 3, 2002. The State must immediately transmit all such petitions,
and all information and documentation gathered during the preliminary investigation,
to DOL. Any NAFTA-TAA petition received on or after November 4, 2002, is
invalid and must be returned to the petitioners with an explanation of the provisions
of the 2002 Act that make the petition invalid. The State must also include a blank
petition for the new TAA program in case the petitioners want to file such a petition.
This instruction also applies to NAFTA-TAA petitions dated prior to November 4,
2002, but received on or after that date; such petitions are not valid.
Eligible workers who are covered by NAFTA-TAA certifications resulting from
petitions received on or before November 3, 2002, regardless of the date that such
certifications are issued by DOL, must receive benefits and services under the
provisions of the NAFTA-TAA program as in effect on November 3, 2002. Workers
being served under NAFTA-TAA certifications are not eligible for waivers under the
new waiver provisions established by the 2002 Act for the regular TAA program. In
order to be eligible for TRA, such workers are also required to be enrolled in
approved training by the end of the 16th week after the worker’s most recent
qualifying separation, or the end of the 6th week after the issuance of the
certification, whichever is later. The new enrollment deadlines in the 2002 Act do
not apply to such workers.
In fiscal years 2003 and 2004, there will continue to be a NAFTA-TAA funding
stream separate from the TAA funding stream. States must continue to request funds
from DOL for NAFTA-TAA benefits and services separately from their requests for
funds for TAA benefits and services.
I. COORDINATION WITH WIA
Statutory Change: Section 119 of the 2002 Act amends Section 235 of the 1974
Act as follows:
“Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is amended by inserting
before the period at the end of the first sentence the following: ‘, including the
services provided through one-stop delivery systems described in section 134(c) of
the Workforce Investment Act of 1998 (29 U.S.C. 2864(c))’.”
Statutory Change: Section 125 of the 2002 Act establishes a Declaration of Policy
by the Congress as follows:
“(a) Declaration of Policy. – Congress reiterates that, under the trade adjustment
assistance program under chapter 2 of title II of the Trade Act of 1974, workers are
eligible for transportation, childcare, and healthcare assistance, as well as other
related assistance under programs administered by the Department of Labor.”
Administration: States shall make every reasonable effort to secure for adversely-
affected workers covered by certifications 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.
In the One-Stop environment established by WIA, the concept of co-enrollment of
trade-certified workers can be further enhanced and expanded to include multiple
enrollments with a broader range of service delivery partners and programs.
Multiple enrollment resources may include Wagner-Peyser activities, faith-based and
community-based programs, vocational rehabilitation services, and veterans’
programs.
The timely provision of core and intensive services to trade-impacted workers is an
important step toward improving both the efficiency and the effectiveness of the
Trade Act programs. Immediately beginning the process of needs assessment
improves participation rates and allows individuals more time to consider all of the
options available to them. Early intervention services that will be beneficial to trade-
impacted workers may include orientation; initial assessment of skill levels,
aptitudes, and abilities; provision of labor market information; job search assistance;
and financial management workshops.
Properly implemented, co-enrollment or multiple-enrollment of trade-impacted
workers in the programs offered in the One-Stop environment, as well as early
provision of rapid response services, will enhance the workers’ adjustment process
and promote the most rapid possible return to employment for all workers. Co-
enrollment or multiple-enrollment also allows trade-impacted workers to receive
supportive services that may assist in a quicker transition to work.
J. UNAMENDED PROVISIONS OF THE 1974 ACT
Many of the provisions of the 1974 Act remain unchanged; for completeness, these
are listed below, along with the citation from the United States Code. Although not
all of the provisions listed below are administered by the States, States shall
administer applicable provisions according to the law and to regulations published at
20 CFR 617.
1. Section 221(b) (19 U.S.C. 2271(b)) which provides for public hearings on
petitions.
2. Section 222(b)(2) (19 U.S.C. 2272(b)(2)) which provides special
definitions for “firm” and “directly competitive” in relation to oil and gas
exploration and production.
3. Section 223 (19 U.S.C. 2273) is unchanged except for changing “60
days” to “40 days”. This section contains definitions of impact date and
expiration date of a certification, along with requirements to publish
notices in the Federal Register.
4. Section 224 (19 U.S.C. 2274) relating to studies by the Secretary
whenever the U.S. International Trade Commission conducts an
investigation with respect to an industry.
5. Section 225 (19 U.S.C. 2275) containing the requirements for notification
to workers who are covered by certifications of benefits and services that
they may be eligible to receive.
6. Section 232 (19 U.S.C. 2292) covering the determination of weekly
amounts of TRA.
7. Section 234 (19 U.S.C. 2294) relating to the applicability of State
unemployment insurance laws.
8. Section 239 (19 U.S.C. 2311) relating to agreements with States.
9. Section 240 (19 U.S.C. 2312) relating to program administration absent
an agreement with a State.
10. Section 241 (19 U.S.C. 2313) relating to payments to States.
11. Section 242 (19 U.S.C. 2314) relating to liabilities of certifying and
disbursing officers.
12. Section 243 (19 U.S.C. 2315) relating to fraud and recovery of
overpayments.
13. Section 244 (19 U.S.C. 2316) relating to penalties for false statements
and failure to disclose material facts.
14. Section 247 (19 U.S.C. 2319) – definitions.
15. Section 248 (19 U.S.C. 2320) relating to the Secretary’s authority to
prescribe regulations.
16. Section 249 (19 U.S.C. 2321) relating to the Secretary’s subpoena power.
K. PROGRAM REPORTING
Trade Act Participant Report (TAPR): The TAPR is unchanged. States must
continue to report TAPR data according to instructions set forth in General
Administration Letter 11-00.
Form ETA 563: Form ETA 563 is being revised; the new form will be available
early in calendar year 2003. For the quarters ending September 30, 2002, and
December 31, 2002, States must continue reporting data on Form ETA 563
according to the instructions contained in ETA Handbook 315. New instructions
will accompany the revised form.
The 2002 Act requires that the States report to the Secretary on each waiver and the
reasons for issuing each waiver. Therefore, States should expect a new reporting
form along with the revised Form ETA 563. This reporting form will be very much
like Form ETA 9027, which was discontinued in 1997. This new form will also be
available early in calendar year 2003, accompanied by full instructions.
L. ALTERNATIVE TRADE ADJUSTMENT ASSISTANCE FOR OLDER
WORKERS
Section 124 of the 2002 Act strikes Section 246 of the 1974 Act and replaces it with
a demonstration project for alternative trade adjustment assistance for older workers.
The statute allows the Secretary up to one year from the date of enactment (August
6, 2002) to establish the ATAA program. Therefore, these operating instructions do
not include instructions for administering the ATAA program. However, for
completeness and to give States some advance notice of future developments, the
general outlines of the ATAA program are described below.
Petitioning workers must be given the opportunity to request that they be considered
for certification under the ATAA program. In determining whether to certify a
group of workers as eligible for ATAA, the following criteria are to be used:
1. Whether a significant number of the workers at 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.
3. The competitive conditions within the workers’industry.
An individual worker who is covered by a certification for ATAA must also satisfy
all of the following individual qualifying criteria:
1. The worker is covered under a regular TAA certification.
2. The worker has obtained reemployment not more than 26 weeks after the
date of the worker’s separation from adversely-affected employment.
3. The worker is at least 50 years of age.
4. The worker earns not more than $50,000 per year in wages from
reemployment.
5. The worker is employed on a full-time basis as defined by State law of
the State in which the worker is reemployed.
6. The worker does not return to the employment from which the worker
was separated.
Eligible workers who choose the benefits of ATAA may not receive three of the
regular TAA benefits and services - training, TRA, and job search allowances. They
may, however, receive relocation allowances if suitable employment is not
reasonably available in the commuting area. Eligible workers who choose ATAA
receive the following benefits:
1. 50 percent of the difference between the wages the worker receives from
reemployment and the wages received by the worker at separation from
adversely-affected employment. This payment is subject to the following
limitations:
A. The payments may not be made for longer than two years.
B. The total of all payments may not exceed $10,000 during the two-
year eligibility period.
2. The health insurance tax credit, only for the period in which the worker is
participating in ATAA (not to exceed two years).
Further guidance and instructions for the ATAA program will be transmitted to the
States in the near future.
M. HEALTH INSURANCE TAX CREDIT
Sections 201 and 202 of the 2002 Act establish a program of tax credits for health
insurance costs. This program will be implemented through the cooperative efforts
of the Department of Labor, the Department of Health and Human Services, and the
Department of the Treasury (including the Internal Revenue Service). Guidance and
operating instructions for the HITC program will be issued separately.
6. Action Required. States are required to implement the amendments to the 1974
Act made by the 2002 Act and set forth in these operating instructions as of the
effective date, November 4, 2002. States shall inform all appropriate staff of the
contents of these instructions.
7. Inquiries. States should direct all inquiries to the appropriate ETA Regional
office.
8. Attachment. Subtitle A of Title I, and Title II, of the Trade Act of 2002.
Attachment: Subtitle A of Title I, and Title II, of the Trade Act of 2002 (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL11-02_Attach.pdf):
H.R.3009
One Hundred Seventh Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the twenty-third day of January, two thousand and two
An Act
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Trade Act of 2002'.
SEC. 2. ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF CONTENTS.
(a) DIVISIONS- This Act is organized into 5 divisions as follows:
(1) DIVISION A - Trade Adjustment Assistance.
(2) DIVISION B - Bipartisan Trade Promotion Authority.
(3) DIVISION C - Andean Trade Preference Act.
(4) DIVISION D - Extension of Certain Preferential Trade Treatment
and Other Provisions.
(5) DIVISION E - Miscellaneous Provisions.
(b) TABLE OF CONTENTS - The table of contents for this Act is as
follows:
Sec. 1. Short title.
Sec. 2. Organization of Act into divisions; table of contents.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
Sec. 101. Short title.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance For Workers
Sec. 111. Reauthorization of trade adjustment assistance program.
Sec. 112. Filing of petitions and provision of rapid response
assistance; expedited review of petitions by secretary of labor.
Sec. 113. Group eligibility requirements.
Sec. 114. Qualifying requirements for trade readjustment
allowances.
Sec. 115. Waivers of training requirements.
Sec. 116. Amendments to limitations on trade readjustment
allowances.
Sec. 117. Annual total amount of payments for training.
Sec. 118. Provision of employer -based training.
Sec. 119. Coordination with title I of the Workforce Investment
Act of 1998.
Sec. 120. Expenditure period.
Sec. 121. Job search allowances.
Sec. 122. Relocation allowances.
Sec. 123. Repeal of NAFTA transitional adjustment assistance
program.
Sec. 124. Demonstration project for alternative trade adjustment
assistance for older workers.
Sec. 125. Declaration of policy; sense of Congress.
Subtitle D--Effective Date
Sec. 151. Effective date.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
Sec. 201. Credit for health insurance costs of individuals
receiving a trade readjustment allowance or a benefit from the
Pension Benefit Guaranty Corporation.
Sec. 202. Advance payment of credit for health insurance costs of
eligible individuals.
Sec. 203. Health insurance assistance for eligible individuals.
DIVISION A --TRADE ADJUSTMENT ASSISTANCE
SEC. 101. SHORT TITLE.
This division may be cited as the `Trade Adjustment Assistance Reform
Act of 2002'.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A --Trade Adjustment Assistance For Workers
SEC. 111. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM.
(a) ASSISTANCE FOR WORKERS - Section 245 of the Trade Act of 1974 (19
U.S.C. 2317) is amended by striking `October 1, 1998, and ending
September 30, 2001,' each place it appears and inserting `October 1,
2001, and ending September 30, 2007,'.
(b) ASSISTANCE FOR FIRMS - Section 256(b) of the Trade Act of 1 974 (19
U.S.C. 2346(b)) is amended by striking `October 1, 1998, and ending
September 30, 2001' and inserting `October 1, 2001, and ending
September 30, 2007,'.
(c) TERMINATION- Section 285 of the Trade Act of 1974 is amended to
read as follows:
`SEC. 285. TERMINATION.
`(a) ASSISTANCE FOR WORKERS -
`(1) IN GENERAL - Except as provided in paragraph (2), trade
adjustment assistance, vouchers, allowances, and other payments
or benefits may not be pr ovided under chapter 2 after September
30, 2007.
`(2) EXCEPTION - Notwithstanding paragraph (1), a workershall
continue to receive trade adjustment assistance benefits and
other benefits under chapter 2 for any week for which the worker
meets the eligibility requirements of that chapter, if on or
before September 30, 2007, the worker is --
`(A) certified as eligible for trade adjustment assistance
benefits under chapt er 2 of this title; and
`(B) otherwise eligible to receive trade adjustment
assistance benefits under chapter 2.
SEC. 112. FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE ASSISTANCE;
EXPEDITED REVIEW OF PETITIONS BY SE CRETARY OF LABOR.
(a) FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE ASSISTANCE -
Section 221(a) of the Trade Act of 1974 (19 U.S.C. 2271(a)) is amended
to read as follows:
`(a)(1) A petition for certification of eligibility to ap ply for
adjustment assistance for a group of workers under this chapter may be
filed simultaneously with the Secretary and with the Governor of the
State in which such workers' firm or subdivision is located by any of
the following:
`(A) The group of workers (including workers in an agricultural
firm or subdivision of any agricultural firm).
`(B) The certified or recognized union or other duly authorized
representative of such workers.
`(C) Employers of such workers, one -stop operators or one -stop
partners (as defined in section 101 of the Workforce Investment
Act of 1998 (29 U.S.C. 2801)), including State employment
security agencies, or the State dislocat ed worker unit
established under title I of such Act, on behalf of such workers.
`(2) Upon receipt of a petition filed under paragraph (1), the
Governor shall--
`(A) ensure that rapid response assistance, and appropriate cor e
and intensive services (as described in section 134 of the
Workforce Investment Act of 1998 (29 U.S.C. 2864)) authorized
under other Federal laws are made available to the workers
covered by the petition to the ext ent authorized under such laws;
and
`(B) assist the Secretary in the review of the petition by
verifying such information and providing such other assistance as
the Secretary may request.
`(3) Upon receipt of the petition, the Secretary shall promptly
publish notice in the Federal Register that the Secretary has received
the petition and initiated an investigation.'.
(b) EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR - Section
223(a) of such Act (19 U.S.C. 2273(a)) is amended in the first
sentence by striking `60 days' and inserting `40 days'.
SEC. 113. GROUP ELIGIBILITY REQUIREMENTS.
(a) TRADE ADJUSTMENT ASSISTANCE PROGRAM -
(1) IN GENERAL - Section 222 of the Trade Act of 1974 (19 U.S.C.
2272) is amended --
(A) by amending subsection (a) to read as follows:
`(a) IN GENERAL- A group of workers (including workers in any
agricultural firm or subdivision of an agricultural firm) shall be
certified by the Secretary as eligible to apply for adjustment
assistance under this chapter pursuant to a petition filed under
section 221 if the Secretary determines that --
`(1) a significant number or proportion of the work ers 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
`(2)(A)(i) the sales or production, o r both, of such firm or
subdivision have decreased absolutely;
`(ii) imports of articles like or directly competitive with
articles produced by such firm or subdivision have increased; and
`(iii) the increase in im ports described in clause (ii)
contributed importantly to such workers' separation or threat of
separation and to the decline in the sales or production of such
firm or subdivision; or
`(B)(i) there has been a shift in production by such workers'
firm or subdivision to a foreign country of articles like or
directly competitive with articles which are produced by such
firm or subdivision; and
`(ii)(I) the country to which the w orkers' firm has shifted
production of the articles is a party to a free trade agreement
with the United States;
`(II) the country to which the workers' firm has shifted
production of the articles is a beneficiary c ountry under the
Andean Trade Preference Act, African Growth and Opportunity Act,
or the Caribbean Basin Economic Recovery Act; or
`(III) there has been or is likely to be an increase in imports
of articles that are like or directly competitive with articles
which are or were produced by such firm or subdivision.';
(B) by redesignating subsection (b) as subsection (c); and
(C) by inserting after subsection (a) the following:
`(b) ADVERSELY AFFECTED SECONDARY WORKERS - A group of workers
(including workers in any agricultural firm or subdivision of an
agricultural firm) shall be certified by the Secretary as eligible to
apply for trade adjustment assistance benefits under this chapter if
the Secretary determines that --
`(1) a significant number or proportion of the workers in the
workers' firm or an appropriate subdivision of the firm have
become totally or partially separa ted, or are threatened to
become totally or partially separated;
`(2) the workers' firm (or subdivision) is a supplier or
downstream producer to a firm (or subdivision) that employed a
group of workers who received a certification of eligibility
under subsection (a), and such supply or production is related to
the article that was the basis for such certification (as defined
in subsection (c) (3) and (4)); and
`(3) either --
`(A) the workers' firm is a supplier and the component parts
it supplied to the firm (or subdivision) described in
paragraph (2) accounted for at least 20 percent of the
production or sales of the workers' firm; or
`(B) a loss of business by the workers' firm with the firm
(or subdivision) described in paragraph (2) contributed
importantly to the workers' separation or threat of
separation determined under paragraph (1).'.
(b) DEFINITIONS- Section 222(c) of such Act, as redesignated by
paragraph (1)(A), is amended --
(1) in the matter preceding paragraph (1), by striking
`subsection (a)(3)' and inserting `this section'; and
(2) by adding at the end the following:
`(3) DOWNSTREAM PRODUCER - The term `downstream producer' means a
firm that performs additional, value -added production processes
for a firm or subdivision, inc luding a firm that performs final
assembly or finishing, directly for another firm (or
subdivision), for articles that were the basis for a
certification of eligibility under subsection (a) of a group of
workers empl oyed by such other firm, if the certification of
eligibility under subsection (a) is based on an increase in
imports from, or a shift in production to, Canada or Mexico.
`(4) SUPPLIER - The term `supplier' means a firm that pr oduces and
supplies directly to another firm (or subdivision) component
parts for articles that were the basis for a certification of
eligibility under subsection (a) of a group of workers employed
by such other firm .'.
SEC. 114. QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES.
(a) CLARIFICATION OF CERTAIN REDUCTIONS - Section 231(a)(3)(B) of the
Trade Act of 1974 (19 U.S.C. 2291(a)(3)(B)) is amended by inserting
after `any unemployment insur ance' the following: `, except additional
compensation that is funded by a State and is not reimbursed from any
Federal funds,'.
(b) ENROLLMENT IN TRAINING REQUIREMENT - Section 231(a)(5)(A) of such
Act (19 U.S.C. 2291(a)(5)(A)) is amen ded--
(1) by inserting `(i)' after `(A)';
(2) by adding `and' after the comma at the end; and
(3) by adding at the end the following:
`(ii) the enrollment required under clause (i) occurs no
later than the latest of --
`(I) the last day of the 16th week after the worker's
most recent total separation from adversely affected
employment which meets the requirements of paragraphs
(1) and (2),
`(II) the last day of the 8th week after the week in
which the Secretary issues a certification covering the
worker,
`(III) 45 days after the later o f the dates specified
in subclause (I) or (II), if the Secretary determines
there are extenuating circumstances that justify an
extension in the enrollment period, or
`(IV) th e last day of a period determined by the
Secretary to be approved for enrollment after the
termination of a waiver issued pursuant to subsection
(c),'.
SEC. 115. WAIVERS OF TRAINING REQUIREMENTS.
(a) IN GENERAL- Section 231(c) of the Trade Act of 1974 (19 U.S.C.
2291(c)) is amended to read as follows:
`(c) WAIVERS OF TRAINING REQUIREMENTS -
`(1) ISSUANCE OF WAIVERS - The Secretary may issue a written
statement t o an adversely affected worker waiving the requirement
to be enrolled in training described in subsection (a)(5)(A) if
the Secretary determines that it is not feasible or appropriate
for the worker, because of 1 or more of the following reasons:
`(A) RECALL - The worker has been notified that the worker
will be recalled by the firm from which the separation
occurred.
`(B) MARKETABLE SKILLS - The worker possesses market able
skills for suitable employment (as determined pursuant to an
assessment of the worker, which may include the profiling
system under section 303(j) of the Social Security Act (42
U.S.C. 503(j) ), carried out in accordance with guidelines
issued by the Secretary) and there is a reasonable
expectation of employment at equivalent wages in the
foreseeable future.
`(C) RETIREMENT - The worker is within 2 years of meeting all
requirements for entitlement to either --
`(i) old -age insurance benefits under title II of the
Social Security Act (42 U.S.C. 401 et seq.) (except for
application therefor); or
`(ii) a private pension sponsored by an employer or
labor organization.
`(D) HEALTH - The worker is unable to participate in training
due to the health o f the worker, except that a waiver under
this subparagraph shall not be construed to exempt a worker
from requirements relating to the availability for work,
active search for work, or refusal to accept work und er
Federal or State unemployment compensation laws.
`(E) ENROLLMENT UNAVAILABLE - The first available enrollment
date for the approved training of the worker is within 60
days after the date of th e determination made under this
paragraph, or, if later, there are extenuating circumstances
for the delay in enrollment, as determined pursuant to
guidelines issued by the Secretary.
`(F) TRAINI NG NOT AVAILABLE- Training approved by the
Secretary is not reasonably available to the worker from
either governmental agencies or private sources (which may
include area vocational education schools, as define d in
section 3 of the Carl D. Perkins Vocational and Technical
Education Act of 1998 (20 U.S.C. 2302), and employers), no
training that is suitable for the worker is available at a
reasonable cost , or no training funds are available.
`(2) DURATION OF WAIVERS -
`(A) IN GENERAL - A waiver issued under paragraph (1) shall
be effective for not more than 6 months after the date on
which the waiver i s issued, unless the Secretary determines
otherwise.
`(B) REVOCATION - The Secretary shall revoke a waiver issued
under paragraph (1) if the Secretary determines that the
basis of a waiver is no l onger applicable to the worker and
shall notify the worker in writing of the revocation.
`(3) AGREEMENTS UNDER SECTION 239 -
`(A) ISSUANCE BY COOPERATING STATES - Pursuant to an
agreement under section 239, the Secretary may authorize a
cooperating State to issue waivers as described in paragraph
(1).
`(B) SUBMISSION OF STATEMENTS - An agreement under section
239 shall include a requirement tha t the cooperating State
submit to the Secretary the written statements provided
under paragraph (1) and a statement of the reasons for the
waiver.'.
(b) CONFORMING AMENDMENT - Section 231(a)(5)(C) of such A ct (19 U.S.C.
2291(a)(5)(C)) is amended by striking `certified'.
SEC. 116. AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES.
(a) INCREASE IN MAXIMUM NUMBER OF WEEKS - Section 233(a) of the Trade
Act of 1974 (19 U.S.C. 2293(a)) is amended--
(1) in paragraph (2), by inserting after `104 -week period' the
following: `(or, in the case of an adversely affected worker who
requires a program of remedial education (as described in section
236(a)(5)(D )) in order to complete training approved for the
worker under section 236, the 130 -week period)'; and
(2) in paragraph (3), by striking `26' each place it appears and
inserting `52'.
(b) SPECIAL RULE RELATING TO BREAK IN TRAINING- Section 233(f) of the
Trade Act of 1974 (19 U.S.C. 2293(f)) is amended in the matter
preceding paragraph (1) by striking `14 days' and inserting `30 days'.
(c) ADDITIONAL WEEKS FOR INDIVIDUALS IN NEED OF REMEDIAL EDUCATION -
Section 233 of the Trade Act of 1974 (19 U.S.C. 2293) is amended by
adding at the end the following:
`(g) Notwithstanding any other provision of this section, in order to
assist an adversely affected worker to complete training approved f or
the worker under section 236 which includes a program of remedial
education (as described in section 236(a)(5)(D)), and in accordance
with regulations prescribed by the Secretary, payments may be made as
trade readjustment allowances for up to 26 additional weeks in the
26-week period that follows the last week of entitlement to trade
readjustment allowances otherwise payable under this chapter.'.
SEC. 117. ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING.
Section 236(a)(2)(A) of the Trade Act of 1974 (19 U.S.C.
2296(a)(2)(A)) is amended by striking `$80,000,000' and all that
follows through `$70,000,000' and inserting `$220,000,000'.
SEC. 118. PROVISION OF EMPLOYER -BASED TRAINING.
(a) IN GENERAL- Section 236(a)(5)(A) of the Trade Act of 1974 (19
U.S.C. 2296(a)(5)(A)) is amended to read as follows:
`(A) employer -based training, including --
`(i) on -the-job training, and
`(ii) customized training,'.
(b) REIMBURSEMENT- Section 236(c)(8) of such Act (19 U.S.C.
2296(c)(8)) is amended to read as follows:
`(8) the employer is 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,'.
(c) DEFINITION- Section 236 of such Act (19 U.S.C. 2296) is amended by
adding at the end the following new subsection:
`(f) For purposes of this secti on, the term `customized training'
means training that is --
`(1) designed to meet the special requirements of an employer or
group of employers;
`(2) conducted with a commitment by the employer or group of
employers to employ an individual upon successful completion of
the training; and
`(3) for which the employer pays for a significant portion (but
in no case less than 50 percent) of the cost of such training, as
determined by the Secretary.'.
SEC. 119. COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF
1998.
Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is amended by
inserting before the period at the end of the first sentence the
following: `, including the services provided through one -stop
delivery systems described in section 134(c) of the Workforce
Investment Act of 1998 (29 U.S.C. 2864(c))'.
SEC. 120. EXPENDITURE PERIOD.
Section 245 of the Trade Act of 1974 (19 U. S.C. 2317), as amended by
section 111(a) of this Act, is further amended by amending subsection
(b) to read as follows:
`(b) PERIOD OF EXPENDITURE - Funds obligated for any fiscal year to
carry out activities under sections 235 through 238 may be expended by
each State receiving such funds during that fiscal year and the
succeeding two fiscal years.'.
SEC. 121. JOB SEARCH ALLOWANCES.
Section 237 of the Trade Act of 1974 (19 U.S.C. 2297) is amended to
read as follows:
`SEC. 237. JOB SEARCH ALLOWANCES.
`(a) JOB SEARCH ALLOWANCE AUTHORIZED -
`(1) IN GENERAL - An adversely affected worker covered by a
certification issued under subchapter A of this chapter may file
an application with the Secretary for payment of a job search
allowance.
`(2) APPROVAL OF APPLICATIONS - The Secretary may grant an
allowance pursuant to an application filed under paragraph (1)
when all of the following apply:
`(A) ASSIST ADVERSELY AFFECTED WORKER - The allowance is paid
to assist an adversely affected worker who has been totally
separated in securing a job within the United States.
`(B) LOCAL EMPLOYMENT NOT A VAILABLE- The Secretary
determines that the worker cannot reasonably be expected to
secure suitable employment in the commuting area in which
the worker resides.
`(C) APPLICATION - The worker has filed an application for
the allowance with the Secretary before --
`(i) the later of --
`(I) the 365th day after the date of the
certification under which the worker is c ertified
as eligible; or
`(II) the 365th day after the date of the worker's
last total separation; or
`(ii) the date that is the 182d day after the date on
which the worker concluded training, unless the worker
received a waiver under section 231(c).
`(b) AMOUNT OF ALLOWANCE -
`(1) IN GENERAL - An allowance granted under subsection (a) shall
provide reimbursement to the worker of 90 percent of the cost of
necessary job search expenses as prescribed by the Secretary in
regulations.
`(2) MAXIMUM ALLOWANCE - Reimbursement under this subsection may
not exceed $1,2 50 for any worker.
`(3) ALLOWANCE FOR SUBSISTENCE AND TRANSPORTATION - Reimbursement
under this subsection may not be made for subsistence and
transportation expenses at levels exceeding those allowable under
section 236(b) (1) and (2).
`(c) EXCEPTION- Notwithstanding subsection (b), the Secretary shall
reimburse any adversely affected worker for necessary expenses
incurred by the worker in participating in a job search program
approved by the Sec retary.'.
SEC. 122. RELOCATION ALLOWANCES.
Section 238 of the Trade Act of 1974 (19 U.S.C. 2298) is amended to
read as follows:
`SEC. 238. RELOCATION ALLOWANCES.
`(a) RELOCATION ALLOWANCE AUTHORIZED -
`(1) IN GENERAL - Any adversely affected worker covered by a
certification issued under subchapter A of this chapter may file
an application for a relocation allowance with the Secretary, and
the Secretary may grant the relocation allowance, subject to the
terms and conditions of this section.
`(2) CONDITIONS FOR GRANTING ALLOWANCE - A relocation allowance
may be granted if all of the following terms and conditions are
met:
`(A) ASSIST AN ADVERSELY AFFECTED WORKER- The relocation
allowance will assist an adversely affected worker in
relocating within the United States.
`(B) LOCAL EMPLOYMENT NOT AVAILABLE - The Secretary
determines that the w orker cannot reasonably be expected to
secure suitable employment in the commuting area in which
the worker resides.
`(C) TOTAL SEPARATION - The worker is totally separated from
employment at the time relocation commences.
`(D) SUITABLE EMPLOYMENT OBTAINED - The worker--
`(i) has obtained suitable employment affording a
reasonable expectation of long -term duration in the
ar ea in which the worker wishes to relocate; or
`(ii) has obtained a bona fide offer of such
employment.
`(E) APPLICATION - The worker filed an application with the
Secretary before --
`(i) the later of --
`(I) the 425th day after the date of the
certification under subchapter A of this chapter;
or
`(II) the 425th day af ter the date of the worker's
last total separation; or
`(ii) the date that is the 182d day after the date on
which the worker concluded training, unless the worker
receiv ed a waiver under section 231(c).
`(b) AMOUNT OF ALLOWANCE - The relocation allowance granted to a worker
under subsection (a) includes --
`(1) 90 percent of the reasonable and necessary expenses
(including, but not limited to , subsistence and transportation
expenses at levels not exceeding those allowable under section
236(b) (1) and (2) specified in regulations prescribed by the
Secretary, incurred in transporting the worker, the worker's
family, and household effects; and
`(2) a lump sum equivalent to 3 times the worker's average weekly
wage, up to a maximum payment of $1,250.
`(c) LIMITATIONS - A relocation allowance may not be granted to a
worker unless--
`(1) the relocation occurs within 182 days after the filing of
the application for relocation assistance; or
`(2) the relocation occurs within 182 days after the conclusion
of training, if the worker entered a tr aining program approved by
the Secretary under section 236(b) (1) and (2).'.
SEC. 123. REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM.
(a) IN GENERAL- Subchapter D of chapter 2 of title II of such Act (19
U.S.C. 2331) is r epealed.
(b) CONFORMING AMENDMENTS -
(1) Section 225(b) (1) and (2) of the Trade Act of 1974 (19
U.S.C. 2275(b) (1) and (2)) is amended by striking `or subchapter
D' each place it appears.
(2) Section 249A of such Act (19 U.S.C. 2322) is repealed.
(3) The table of contents of such Act is amended --
(A) by striking the item relating to section 249A; and
(B) by striking the items relating to subchapter D of
chapter 2 of title II.
(4) Section 284(a) of such Act is amended by striking `or section
250(c)'.
(c) EFFECTIVE DATE -
(1) IN GENERAL - The amendments made by this section shall apply
with respect to petitions filed under chapter 2 of title II of
the Trade Act of 1974, on or after the date that is 90 days after
the date of enactment of this Act.
(2) WORKERS CERTIFIED AS ELIGIBLE BEFORE EFFECTIVE DATE -
Notwithstanding sub section (a), a worker receiving benefits under
chapter 2 of title II of the Trade Act of 1974 shall continue to
receive (or be eligible to receive) benefits and services under
chapter 2 of title II of the Trade Act of 1974, as in effect on
the day before the amendments made by this section take effect
under subsection (a), for any week for which the worker meets the
eligibility requirements of such chapter 2 as in effect on such
date.
SEC. 124. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT ASSISTANCE
FOR OLDER WORKERS.
(a) DEMONSTRATION PROGRAM - Chapter 2 of title II of the Trade Act of
1974 (19 U.S.C. 2271 et seq.) is amended by striking section 246 and
inserting the following new section:
`SEC. 246. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS.
`(a) IN GENERAL-
`(1) ESTABLISHMENT - Not later than 1 year after the date of
enactment of the Trade Adju stment Assistance Reform Act of 2002,
the Secretary shall establish an alternative trade adjustment
assistance program for older workers that provides the benefits
described in paragraph (2).
`(2) BENEFITS.
`(A) PAYMENTS - A State shall use the funds provided to the
State under section 241 to pay, for a period not to exceed 2
years, to a worker described in paragraph (3)(B), 50 percent
of the difference betw een--
`(i) the wages received by the worker from
reemployment; and
`(ii) the wages received by the worker at the time of
separation.
`(B) HEALTH INSURANCE - A worker described in paragraph
(3)(B) participating in the program established under
paragraph (1) is eligible to receive, for a period not to
exceed 2 years, a credit for health insurance costs under
section 35 of the Internal Revenue Code of 1986, as added by
section 201 of the Trade Act of 2002.
`(3) ELIGIBILITY -
`(A) FIRM ELIGIBILITY -
`(i) IN GENERAL - The Secretary shall provide the
opportunity for a group of workers on whose behalf a
petition is filed under section 221 to request that the
group of workers be certified for the alternative trade
adjustment assistance program under this section at the
time the petition is filed.
`(ii) CRITERIA - In determining whether to certify a
group of workers as eligible for the alternative trade
adjustment assistance program, the Secretary shall
consider the following criteria:
`(I) Whether a significant number of workers in
the workers' firm are 50 years of age or older.
`(II) Whether the workers in the workers' firm
possess skills that are not easily transferable.
`(III) The competitive conditions within the
workers' indu stry.
`(iii) DEADLINE - The Secretary shall determine whether
the workers in the group are eligible for the
alternative trade adjustment assistance program by the
date specifie d in section 223(a).
`(B) INDIVIDUAL ELIGIBILITY - A worker in the group that the
Secretary has certified as eligible for the alternative
trade adjustment assistance program may elect to receive
benefits under the alternative trade adjustment assistance
program if the worker --
`(i) is covered by a certification under subchapter A
of this chapter;
`(ii) obtains reemployment not more than 26 weeks after
the date of separation from the adversely affected
employment;
`(iii) is at least 50 years of age; and
`(iv) earns not more than $50,000 a year in wages from
reemployment;
`(v) is employed on a full -time basis as defined by
State law in the State in which the worker is employed;
and
`(vi) does not return to the employment from which the
worker was separated.
`(4) TOTAL AMOUNT OF PAYMENTS - The payments described in
paragraph (2)(A) made to a worker may not exceed $10,000 per
worker during the 2 -year eligibility period.
`(5) LIMITATION ON OTHER BENEFITS - Except as provided in section
238(a)(2)(B), if a worker is receiving payments pursuant to the
program established under paragraph (1), the workershall not be
eligible to receive any other benefits under this title.
`(b) TERMINATION -
`(1) IN GENERAL - Except as provided in paragraph (2), no payments
may be made by a State under the program established under
subsection (a)(1) a fter the date that is 5 years after the date
on which such program is implemented by the State.
`(2) EXCEPTION - Notwithstanding paragraph (1), a worker receiving
payments under the program established under subsection (a)(1) on
the termination date described in paragraph (1) shall continue to
receive such payments provided that the worker meets the criteria
described in subsection (a)(3)(B).'.
(b) TABLE OF CONTENTS - The Trade Act of 1974 (U. S.C. et seq.) is
amended in the table of contents by inserting after the item relating
to section 245 the following new item:
`Sec. 246. Demonstration project for alternative trade adjustment
assistance for older workers.'.
SEC. 125. DECLARATION OF POLICY; SENSE OF CONGRESS.
(a) DECLARATION OF POLICY - Congress reiterates that, under the trade
adjustment assistance program under chapter 2 of title II of the Trade
Act of 1974, workers are eligible for transporta tion, childcare, and
healthcare assistance, as well as other related assistance under
programs administered by the Department of Labor.
(b) SENSE OF CONGRESS - It is the sense of Congress that the Secretary
of Labor, working independent ly and in conjunction with the States,
should, in accordance with section 225 of the Trade Act of 1974,
provide more specific information about benefit allowances, training,
and other employment services, and the petition and application
procedures (including appropriate filing dates) for such allowances,
training, and services, under the trade adjustment assistance program
under chapter 2 of title II of the Trade Act of 1974 to workers who
are applying for, or are certifi ed to receive, assistance under that
program, including information on all other Federal assistance
available to such workers.
Subtitle D --Effective Date
SEC. 151. EFFECTIVE DATE.
(a) IN GENERAL- Except as otherwise provided in sections 123(c) and
141(b), and subsections (b), (c), and (d) of this section, the
amendments made by this division shall apply to petitions for
certification filed under chapter 2 or 3 of title II of the Trade Act
of 1974 on or after the date that is 90 days after the date of
enactment of this Act.
(b) WORKERS CERTIFIED AS ELIGIBLE BEFORE EFFECTIVE DATE -
Notwithstanding subsection (a), a workershall continue to receive (or
be eligible to receive) t rade adjustment assistance and other benefits
under chapter 2 of title II of the Trade Act of 1974, as in effect on
September 30, 2001, for any week for which the worker meets the
eligibility requirements of such chapter 2 as in effect on su ch date,
if on or before such date, the worker --
(1) was certified as eligible for trade adjustment assistance
benefits under such chapter as in effect on such date; and
(2) would otherwise be eligible to receive trade adjustment
assistance benefits under such chapter as in effect on such date.
(c) WORKERS WHO BECAME ELIGIBLE DURING QUALIFIED PERIOD -
(1) IN GENERAL - Notwithstanding subsection (a) or any other
provision of law, includi ng section 285 of the Trade Act of 1974,
any worker who would have been eligible to receive trade
adjustment assistance or other benefits under chapter 2 of title
II of the Trade Act of 1974 during the qualified period if such
chapter 2 had been in effect during such period, shall be
eligible to receive trade adjustment assistance and other
benefits under chapter 2 of title II of the Trade Act of 1974, as
in effect on September 30, 2001, for any week during the
qualified period for which the worker meets the eligibility
requirements of such chapter 2 as in effect on September 30,
2001.
(2) QUALIFIED PERIOD - For purposes of this subsection, the term
`qualified period' means the period beginning on January 11,
2002, and ending on the date that is 90 days after the date of
enactment of this Act.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS RECEIVING A
TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION BENEFIT GUARANTY
CORPORATION.
(a) IN GENERAL- Subpart C of part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 (relating to refundable credits) is
amended by redesignating section 35 as section 36 and inserting after
section 34 the following new section:
`SEC. 35. HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.
`(a) IN GENERAL- In the case of an individual, there shall be allowed
as a credit against the tax imposed by subtitle A an amount equal to
65 percent of the amount paid by the taxpayer for coverage of the
taxpayer and qualifying family members under qualified heal th
insurance for eligible coverage months beginning in the taxable year.
`(b) ELIGIBLE COVERAGE MONTH - For purposes of this section --
`(1) IN GENERAL - The term `eligible coverage month' means any
month if--
`(A) as of the first day of such month, the taxpayer --
`(i) is an eligible individual,
`(ii) is covered by qualified health insurance, the
premium for which is paid by the taxpayer,
`(iii) does not have other specified coverage, and
`(iv) is not imprisoned under Federal, State, or local
authority, and
`(B) such month begins more than 90 days after the date of
the enactment of the Trade Act of 2002.
`(2) JOINT RETURNS - In the case of a joint return, the
requirements of paragraph (1)(A) shall be treated as met with
respect to any month if at least 1 spouse satisfies such
requirements.
`(c) ELIGIBLE INDIVIDUAL - For purposes of this section --
`(1) IN GENERAL - The term `eligible individual' means --
`(A) an eligible TAA recipient,
`(B) an eligible alternative TAA recipient, a nd
`(C) an eligible PBGC pension recipient.
`(2) ELIGIBLE TAA RECIPIENT - The term `eligible TAA recipient'
means, with respect to any month, any individual who is receiving
for any day of such month a trade re adjustment allowance under
chapter 2 of title II of the Trade Act of 1974 or who would be
eligible to receive such allowance if section 231 of such Act
were applied without regard to subsection (a)(3)(B) of such
section. An individual shall continue to be treated as an
eligible TAA recipient during the first month that such
individual would otherwise cease to be an eligible TAA recipient
by reason of the preceding sentence.
`(3) ELIGIBLE ALTERNATIVE TAA RECIPIENT - The term `eligible
alternative TAA recipient' means, with respect to any month, any
individual who --
`(A) is a worker described in section 246(a)(3)(B) of the
Trade Ac t of 1974 who is participating in the program
established under section 246(a)(1) of such Act, and
`(B) is receiving a benefit for such month under section
246(a)(2) of such Act.
An individual shall continue to be treated as an eligible
alternative TAA recipient during the first month that such
individual would otherwise cease to be an eligible alternative
TAA recipient by reason of the preceding sentence.
`(4) ELIGIBLE PBGC PENSION RECIPIENT - The term `eligible PBGC
pension recipient' means, with respect to any month, any
individual who --
`(A) has attained age 55 as of the first day of such month,
and
`(B) is receiving a benefit for such month any portion of
which is paid by the Pension Benefit Guaranty Corporation
under title IV of the Employee Retirement Income Security
Act of 1974.
`(d) QUALIFYING FAMILY MEMBER- For purposes of this section --
`(1) IN GENERAL - The term `qualifying family member' means --
`(A) the taxpayer's spouse, and
`(B) any dependent of the taxpayer with respect to whom the
taxpayer is entitled to a deduction under section 151(c).
Such term does not include any individual who has other specified
coverage.
`(2) SPECIAL DEPENDENCY TEST IN CASE OF DIVORCED PARENTS, ETC - If
paragraph (2) or (4) of section 152(e) applies to any child with
respect to any calendar year, in the case of any taxable year
beginning in such calendar year, such child shall be treated as
described in paragraph (1)(B) with respect to the custodial
parent (within the meaning of section 152(e)(1)) and not with
respect to the noncustodial parent.
`(e) QUALIFIED HEALTH INSURANCE - For purposes of this section --
`(1) IN GENERAL - The term `qualified hea lth insurance' means any
of the following:
`(A) Coverage under a COBRA continuation provision (as
defined in section 9832(d)(1)).
`(B) State -based continuation coverage provided by the State
under a State law that requires such coverage.
`(C) Coverage offered through a qualified State high risk
pool (as defined in section 2744(c)(2) of the Public Health
Service Act).
`(D) Cov erage under a health insurance program offered for
State employees.
`(E) Coverage under a State -based health insurance program
that is comparable to the health insurance program offered
for State employees.
`(F) Coverage through an arrangement entered into by a State
and--
`(i) a group health plan (including such a plan which
is a multi -employer plan as defined in section 3(37 ) of
the Employee Retirement Income Security Act of 1974),
`(ii) an issuer of health insurance coverage,
`(iii) an administrator, or
`(iv) an employer.
`(G) Coverage offered through a State arrangement with a
private sector health care coverage purchasing pool.
`(H) Coverage under a State -operated health plan that does
not receive any Federal financial participatio n.
`(I) Coverage under a group health plan that is available
through the employment of the eligible individual's spouse.
`(J) In the case of any eligible individual and such
individual's qualify ing family members, coverage under
individual health insurance if the eligible individual was
covered under individual health insurance during the entire
30-day period that ends on the date that such individual
became separated from the employment which qualified such
individual for --
`(i) in the case of an eligible TAA recipient, the
allowance described in subsection (c)(2),
`(ii) in the case of an eligible alternative TAA
recipient, the benefit described in subsection
(c)(3)(B), or
`(iii) in the case of any eligible PBGC pension
recipient, th e benefit described in subsection
(c)(4)(B).
For purposes of this subparagraph, the term `individual
health insurance' means any insurance which constitutes
medical care offered to individua ls other than in connection
with a group health plan and does not include Federal - or
State-based health insurance coverage.
`(2) REQUIREMENTS FOR STATE -BASED COVERAGE-
`(A) IN GENERAL - The term `qualified health insurance' does
not include any coverage described in subparagraphs (B)
through (H) of paragraph (1) unless the State involved has
elected to have such coverage treated as qualified health
insurance under this section and such coverage meets the
following requirements:
`(i) GUARANTEED ISSUE - Each qualifying individual is
guaranteed enrollment if the individual pays the
premium for enrollment or provides a qualified health
insurance costs credit eligibility certificate
described in section 7527 and pays the remainder of
such premium.
`(ii) NO IMPOSITION OF PREEXISTING CONDITION EXCLUSION -
No pre -existing condition limitations are imposed with
respect to any qualifying individual.
`(iii) NONDISCRIMINATORY PREMIUM - The total premium (as
determined without regard to any subsidies) with
respect to a qualifying individual may not be greater
than the total premium (as so determined) for a
similarly sit uated individual who is not a qualifying
individual.
`(iv) SAME BENEFITS - Benefits under the coverage are
the same as (or substantially similar to) the benefits
provided to si milarly situated individuals who are not
qualifying individuals.
`(B) QUALIFYING INDIVIDUAL - For purposes of this paragraph,
the term `qualifying individual' means --
`(i) an eligible i ndividual for whom, as of the date on
which the individual seeks to enroll in the coverage
described in subparagraphs (B) through (H) of paragraph
(1), the aggregate of the periods of creditable
coverage (as defined in section 9801(c)) is 3 months or
longer and who, with respect to any month, meets the
requirements of clauses (iii) and (iv) of subsection
(b)(1)(A); and
`(ii) the qualifying family members of such eligible
individual.
`(3) EXCEPTION - The term `qualified health insurance' shall not
include--
`(A) a flexible spending or similar arr angement, and
`(B) any insurance if substantially all of its coverage is
of excepted benefits described in section 9832(c).
`(f) OTHER SPECIFIED COVERAGE - For purposes of this section, an
individual has other speci fied coverage for any month if, as of the
first day of such month --
`(1) SUBSIDIZED COVERAGE -
`(A) IN GENERAL - Such individual is covered under any
insurance which constitutes medical care (except insurance
substantially all of the coverage of which is of excepted
benefits described in section 9832(c)) under any health plan
maintained by any employer (or former employer) of the
taxpayer or the taxpayer 's spouse and at least 50 percent of
the cost of such coverage (determined under section 4980B)
is paid or incurred by the employer.
`(B) ELIGIBLE ALTERNATIVE TAA RECIPIENTS - In the case of an
eligible alternative TAA recipient, such individual is
either --
`(i) eligible for coverage under any qualified health
insurance (other than insurance described in
subparagraph (A), ( B), or (F) of subsection (e)(1))
under which at least 50 percent of the cost of coverage
(determined under section 4980B(f)(4)) is paid or
incurred by an employer (or former employer) of the
taxpayer or the taxpayer's spouse, or
`(ii) covered under any such qualified health insurance
under which any portion of the cost of coverage (as so
determined) is paid or incurred by an employer (or
former employer) of the taxpayer or the taxpayer's
spouse.
`(C) TREATMENT OF CAFETERIA PLANS - For purposes of
subparagraphs (A) and (B), the cost of coverage shall b e
treated as paid or incurred by an employer to the extent the
coverage is in lieu of a right to receive cash or other
qualified benefits under a cafeteria plan (as defined in
section 125(d)).
`(2) COVERAGE UNDER MEDICARE, MEDICAID, OR SCHIP - Such
individual--
`(A) is entitled to benefits under part A of title XVIII of
the Social Security Act or is enrolled under part B of such
title, or
`(B) is enrolled in the program under title XIX or XXI of
such Act (other than under section 1928 of such Act).
`(3) CERTAIN OTHER COVERAGE - Such individual--
`(A) is enrolled in a health bene fits plan under chapter 89
of title 5, United States Code, or
`(B) is entitled to receive benefits under chapter 55 of
title 10, United States Code.
`(g) SPECIAL RULES -
`(1) COORDINATION WITH A DVANCE PAYMENTS OF CREDIT - With respect
to any taxable year, the amount which would (but for this
subsection) be allowed as a credit to the taxpayer under
subsection (a) shall be reduced (but not below zero) by the
aggregate amount paid on behalf of such taxpayer under section
7527 for months beginning in such taxable year.
`(2) COORDINATION WITH OTHER DEDUCTIONS - Amounts taken into
account under subsection (a) shall not be taken into ac count in
determining any deduction allowed under section 162(l) or 213.
`(3) MSA DISTRIBUTIONS - Amounts distributed from an Archer MSA
(as defined in section 220(d)) shall not be taken into account
under subsection (a).
`(4) DENIAL OF CREDIT TO DEPENDENTS - No credit shall be allowed
under this section to any individual with respect to whom a
deduction under section 151 is allowable to another taxpayer for
a taxable year beginn ing in the calendar year in which such
individual's taxable year begins.
`(5) BOTH SPOUSES ELIGIBLE INDIVIDUALS - The spouse of the
taxpayer shall not be treated as a qualifying family member for
purposes of subsecti on (a), if--
`(A) the taxpayer is married at the close of the taxable
year,
`(B) the taxpayer and the taxpayer's spouse are both
eligible individuals during the taxable year, and
`(C) the taxpayer files a separate return for the taxable
year.
`(6) MARITAL STATUS; CERTAIN MARRIED INDIVIDUALS LIVING APART -
Rules similar to the rules of paragraphs (3) and (4) of section
21(e) shall apply for purposes of this section.
`(7) INSURANCE WHICH COVERS OTHER INDIVIDUALS - For purposes of
this section, rules similar to the rules of section 213(d)(6)
shall apply with respect to any contract for qualified health
insurance under which amounts are payable for coverage of an
individual other than the taxpayer and qualifying family members.
`(8) TREATMENT OF PAYMENTS - For purposes of this section --
`(A) PAYMENTS BY SECRETARY - Payments made by the Secretary
on behalf of any individual under section 7527 (relating to
advance payment of credit for health insurance costs of
eligible individuals) shall be treated as having been made
by the taxpayer on the first day of the month for which such
payment was made.
`(B) PAYMENTS BY TAXPAYER - Payments made by the taxpayer for
eligible coverage months shall be treated as having been
made by the taxpayer on the first day of the month for which
such payment was made.
`(9) REGULATIONS - The Secretary may prescribe such regulations
and other guidance as may be necessary or appropriate to carry
out this section, section 6050T, and section 7527.'.
(b) PROMOTION OF STATE HIGH RISK POOLS - Title XXVII of the Public
Health Service Act is amended by inserting after section 2744 the
following new section:
`SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
`(a) SEED GRANTS TO STATES - The Secretary shall provide from the funds
appropriated under subsection (c)(1) a grant of up to $1,000,000 to
each State that has not created a qualified high risk pool as of the
date of the enactment of this section for the State's costs of
creation and initial operation of such a pool.
`(b) MATCHING FUNDS FOR OPERATION OF POOLS -
`(1) IN GENERAL - In the case of a State that has established a
qualified high risk pool that --
`(A) restricts premiums charged under the pool to no more
than 150 percent of the premium for applicable standard risk
rates;
`(B) offers a choice of two or more cove rage options through
the pool; and
`(C) has in effect a mechanism reasonably designed to ensure
continued funding of losses incurred by the State after the
end of fiscal year 2004 in connection w ith operation of the
pool;
the Secretary shall provide, from the funds appropriated under
subsection (c)(2) and allotted to the State under paragraph (2),
a grant of up to 50 percent of the losses incurred by t he State
in connection with the operation of the pool.
`(2) ALLOTMENT - The amounts appropriated under subsection (c)(2)
for a fiscal year shall be made available to the States in
accordance with a formula that is ba sed upon the number of
uninsured individuals in the States.
`(c) FUNDING- Out of any money in the Treasury of the United States
not otherwise appropriated, there are authorized and appropriated --
`(1) $20,000,000 for fiscal year 2003 to carry out subsection
(a); and
`(2) $40,000,000 for each of fiscal years 2003 and 2004 to carry
out subsection (b).
Funds appropriated under this subsection for a fiscal year shall
remain available for obligation through the end of the following
fiscal year. Nothing in this section shall be construed as providing a
State with an entitlement to a grant under this section.
`(d) QUALIFIED HIGH RISK POOL AND STATE DEFINED - For purposes of this
section, the term `qualified high risk pool' has the meaning given
such term in section 2744(c)(2) and the term `State' means any of the
50 States and the District of Columbia.'.
(c) CONFORMING AMENDMENTS -
(1) Paragraph (2 ) of section 1324(b) of title 31, United States
Code, is amended by inserting before the period `, or from
section 35 of such Code'.
(2) The table of sections for subpart C of part IV of chapter 1
of the Internal Re venue Code of 1986 is amended by striking the
last item and inserting the following new items:
`Sec. 35. Health insurance costs of eligible individuals.
`Sec. 36. Overpayments of tax.'.
(d) EFFECTIVE DATE -
(1) IN GENERAL - Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2001.
(2) STATE HIGH RISK POOLS - The amendment made by subsection (b)
shall take effect o n the date of the enactment of this Act.
SEC. 202. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE
INDIVIDUALS.
(a) IN GENERAL- Chapter 77 of the Internal Revenue Code of 1986
(relating to miscellaneous provisions) is amended b y adding at the end
the following new section:
`SEC. 7527. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS.
`(a) GENERAL RULE - Not later than August 1, 2003, the Secretary shall
establish a program for making payments on behalf of certified
individuals to providers of qualified health insurance (as defined in
section 35(e)) for such individuals.
`(b) LIMITATION ON ADVANCE PAYMENTS DURING ANY TAXABLE YEAR - The
Secretary may make payments unde r subsection (a) only to the extent
that the total amount of such payments made on behalf of any
individual during the taxable year does not exceed 65 percent of the
amount paid by the taxpayer for coverage of the taxpayer and
qualifying family members under qualified health insurance for
eligible coverage months beginning in the taxable year.
`(c) CERTIFIED INDIVIDUAL - For purposes of this section, the term
`certified individual' means any individual for whom a qualified
health insurance costs credit eligibility certificate is in effect.
`(d) QUALIFIED HEALTH INSURANCE COSTS CREDIT ELIGIBILITY CERTIFICATE -
For purposes of this section, the term `qualified health insurance
costs credit eligibility cert ificate' means any written statement that
an individual is an eligible individual (as defined in section 35(c))
if such statement provides such information as the Secretary may
require for purposes of this section and --
`(1) in the case of an eligible TAA recipient (as defined in
section 35(c)(2)) or an eligible alternative TAA recipient (as
defined in section 35(c)(3)), is certified by the Secretary of
Labor (or by any other person or entity designate d by the
Secretary), or
`(2) in the case of an eligible PBGC pension recipient (as
defined in section 35(c)(4)), is certified by the Pension Benefit
Guaranty Corporation (or by any other person or entity designated
by the Secretary).'.
(b) DISCLOSURE OF RETURN INFORMATION FOR PURPOSES OF CARRYING OUT A
PROGRAM FOR ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS -
(1) IN GENERAL - Subsection (l) of sectio n 6103 of such Code
(relating to disclosure of returns and return information for
purposes other than tax administration) is amended by adding at
the end the following new paragraph:
`(18) DISCLOSURE OF RETURN INFOR MATION FOR PURPOSES OF CARRYING
OUT A PROGRAM FOR ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE
COSTS OF ELIGIBLE INDIVIDUALS - The Secretary may disclose to
providers of health insurance for any certified individual (as
defined in section 7527(c)) return information with respect to
such certified individual only to the extent necessary to carry
out the program established by section 7527 (relating to advance
payment of credit for health insurance costs of eligible
individuals).'.
(2) PROCEDURES AND RECORDKEEPING RELATED TO DISCLOSURES -
Subsection (p) of such section is amended --
(A) in paragraph (3)(A) by striking `or (17)' and inserting
`(17), or (18)', and
(B) in paragraph (4) by inserting `or (17)' after `any other
person described in subsection (l)(16)' each place it
appears.
(3) UNAUTHORIZED INSPECTION OF RETURNS OR R ETURN INFORMATION-
Section 7213A(a)(1)(B) of such Code is amended by striking
`section 6103(n)' and inserting `subsection (l)(18) or (n) of
section 6103'.
(c) INFORMATION REPORTING -
(1) IN GENERAL - Subpart B of part III of subchapter A of chapter
61 of the Internal Revenue Code of 1986 (relating to information
concerning transactions with other persons) is amended by
inserting after section 6050S the following new section:
`SEC. 6050T. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS.
`(a) REQUIREMENT OF REPORTING - Every person who is entitled to receive
payments for any month of any calendar year under section 7527
(relating to advance payment of credit for health insurance costs of
eligible individuals) with respect to any certified individual (as
defined in section 7527(c)) shall, at such time as the Secretary may
prescribe, make the return described in subsection (b) wi th respect to
each such individual.
`(b) FORM AND MANNER OF RETURNS - A return is described in this
subsection if such return --
`(1) is in such form as the Secretary may prescribe, and
`(2) contains --
`(A) the name, address, and TIN of each individual referred
to in subsection (a),
`(B) the number of months for which amounts were entitled to
be received with respect to such individual under section
7527 (relating to advance payment of credit for health
insurance costs of eligible individuals),
`(C) the amount entitled to be received for each such month,
and
`(D) such other information as the Secretary may prescribe.
`(c) STATEMENTS TO BE FURNISHED TO INDIVIDUALS WITH RESPECT TO WHOM
INFORMATION IS REQUIRED - Every person required to make a return under
subsection (a) shall furnish to each individual whose name is required
to be set forth in such return a written statement showing --
`(1) the name and address of the person required to make such
return and the phone number of the information contact for such
person, and
`(2) the information required to be shown on the return with
respect to such individual.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) is required to be
made.'.
(2) ASSESSABLE PENALTIES -
(A) Subparagraph (B) of section 6724(d)(1) of such Code
(relating to definitions) is amended by redesignating
clauses (xi) through (xvii) as clauses (xii) through
(xviii), respectively, and by inserting after clause (x) the
following new clause:
`(xi) section 6050T (relating to returns relating to
credit for health insurance costs of eligible
individuals),'.
(B) Paragraph (2) of section 6724(d) of such Code is amended
by striking `or' at the end of subparagraph (Z), by striking
the period at the end of subparagraph (AA) and inserting `,
or', and by adding after subparagraph (AA) the following new
subparagraph:
`(BB) section 6050T (relating to returns relating to credit
for health insurance costs of eligible individuals).'.
(d) CLERICAL AMENDMENTS -
(1) ADVANCE PAYMENT - The table of sections for chapter 77 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new item:
`Sec. 7527. Advance payment of credit for health insurance costs of
eligible individuals.'.
(2) INFORMATION REPORTING - The table of sections for subpart B of
part III of subchapter A of chapter 61 of such Code is amended by
inserting after the item relating to section 6050S the following
new item:
`Sec. 6050T. Returns relating to credit for health insurance costs of
eligible individuals.'.
(e) EFFECTIVE DATE - The amendments made by this section s hall take
effect on the date of the enactment of this Act.
SEC. 203. HEALTH INSURANCE ASSISTANCE FOR ELIGIBLE INDIVIDUALS.
(a) ELIGIBILITY FOR GRANTS - Section 173(a) of the Workforce Investment
Act of 1998 (29 U.S.C. 2918(a)) is amended --
(1) in paragraph (2), by striking `and' at the end;
(2) in paragraph (3), by striking the period and inserting `;
and'; and
(3) by adding at the end the following:
`(4) from funds appropriated under sec tion 174(c)--
`(A) to a State or entity (as defined in section
173(c)(1)(B)) to carry out subsection (f), including
providing assistance to eligible individuals; and
`(B) to a State or entity (a s so defined) to carry out
subsection (g), including providing assistance to eligible
individuals.'.
(b) USE OF FUNDS FOR HEALTH INSURANCE COVERAGE - Section 173 of the
Workforce Investment Act of 1998 (29 U.S.C. 291 8) is amended by adding
at the end the following:
`(f) HEALTH INSURANCE COVERAGE ASSISTANCE FOR ELIGIBLE INDIVIDUALS -
`(1) IN GENERAL - Funds made available to a State or entity under
paragraph (4)(A) of subsection (a) may be used by the State or
entity for the following:
`(A) HEALTH INSURANCE COVERAGE - To assist an eligible
individual and such individual's qualifying family members
in enrolling in qualified health insura nce.
`(B) ADMINISTRATIVE AND START -UP EXPENSES- To pay the
administrative expenses related to the enrollment of
eligible individuals and such individuals' qualifying family
members in qualified h ealth insurance, including --
`(i) eligibility verification activities;
`(ii) the notification of eligible individuals of
available qualified health insurance options;
`(iii) processing qualified health insurance costs
credit eligibility certificates provided for under
section 7527 of the Internal Revenue Code of 1986;
`(iv) providing assistance to eligible individua ls in
enrolling in qualified health insurance;
`(v) the development or installation of necessary data
management systems; and
`(vi) any other expenses determined appropriate by the
Secretary, including start -up costs and on going
administrative expenses to carry out clauses (iv)
through (ix) of paragraph (2)(A).
`(2) QUALIFIED HEALTH INSURANCE - For purposes of this subsection
and subsection (g) --
`(A) IN GENERAL - The term `qualified health insurance' means
any of the following:
`(i) Coverage under a COBRA continuation provision (as
defined in section 733(d)(1) of the Employee Retirement
Income Security Act of 1974).
`(ii) State -based continuation coverage provided by the
State under a State law that requires such cover age.
`(iii) Coverage offered through a qualified State high
risk pool (as defined in section 2744(c)(2) of the
Public Health Service Act).
`(iv) Coverage under a health insur ance program offered
for State employees.
`(v) Coverage under a State -based health insurance
program that is comparable to the health insurance
program offered for State emplo yees.
`(vi) Coverage through an arrangement entered into by a
State and --
`(I) a group health plan (including such a plan
which is a multi -employer plan as defined in
section 3(37) of the Employee Retirement Income
Security Act of 1974),
`(II) an issuer of health insurance coverage,
`(III) an administrator, or
`(IV) an employer.
`(vii) Coverage offered through a State arrangement
with a private sector health care coverage purchasing
pool.
`(viii) Coverage under a State-operated health plan
that does not receive any Federal financial
participation.
`(ix) Coverage under a group health plan that is
available through the employment of th e eligible
individual's spouse.
`(x) In the case of any eligible individual and such
individual's qualifying family members, coverage under
individual health insurance if the eligible individual
was covered under individual health insurance during
the entire 30 -day period that ends on the date that
such individual became separated from the employment
which qualified such individual for --
`(I) in the case of an eligible TAA recipient, the
allowance described in section 35(c)(2) of the
Internal Revenue Code of 1986,
`(II) in the case of an eligible alternative TAA
recipient, the benefit described in section
35(c)(3)(B) of such Code, or
`(III) in the case of any eligible PBGC pen sion
recipient, the benefit described in section
35(c)(4)(B) of such Code.
For purposes of this clause, the term `individual
health insurance' means any insurance wh ich constitutes
medical care offered to individuals other than in
connection with a group health plan and does not
include Federal - or State-based health insurance
coverage.
`(B) REQUIREMENTS FOR STATE -BASED COVERAGE-
`(i) IN GENERAL - The term `qualified health insurance'
does not include any coverage described in clauses (ii)
through (viii) of subparag raph (A) unless the State
involved has elected to have such coverage treated as
qualified health insurance under this paragraph and
such coverage meets the following requirements:
`(I) GUARANTEED ISSUE - Each qualifying individual
is guaranteed enrollment if the individual pays
the premium for enrollment or provides a qualified
health insurance costs credit eligibility
certificate described in section 7527 of the
Internal Revenue Code of 1986 and pays the
remainder of such premium.
`(II) NO IMPOSITION OF PREEXISTING CONDITION
EXCLUSION - No pre-existing condition limitations
are imposed with respect to any qualifying
individual.
`(III) NONDISCRIMINATORY P REMIUM- The total
premium (as determined without regard to any
subsidies) with respect to a qualifying individual
may not be greater than the total premium (as so
determined) for a similarly situated individual
who is not a qualifying individual.
`(IV) SAME BENEFITS - Benefits under the coverage
are the same as (or substantially simila r to) the
benefits provided to similarly situated
individuals who are not qualifying individuals.
`(ii) QUALIFYING INDIVIDUAL - For purposes of this
subparagraph, the term `qualifying individual' means --
`(I) an eligible individual for whom, as of the
date on which the individual seeks to enroll in
clauses (ii) through (viii) of subparagraph (A ),
the aggregate of the periods of creditable
coverage (as defined in section 9801(c) of the
Internal Revenue Code of 1986) is 3 months or
longer and who, w ith respect to any month, meets
the requirements of clauses (iii) and (iv) of
section 35(b)(1)(A) of such Code; and
`(II) the qualifying family members of such
eligible individual.
`(C) EXCEPTION - The term `qualified health insurance' shall
not include --
`(i) a flexible spending or similar arrangement, and
`(ii) any insurance if substan tially all of its
coverage is of excepted benefits described in section
733(c) of the Employee Retirement Income Security Act
of 1974.
`(3) AVAILABILITY OF FUNDS -
`(A) E XPEDITED PROCEDURES- With respect to applications
submitted by States or entities for grants under this
subsection, the Secretary shall --
`(i) not later than 15 days after the date on which the
Secretary receives a completed application from a State
or entity, notify the State or entity of the
determination of the Secretary with respect to the
approval or disapproval of such app lication;
`(ii) in the case of an application of a State or other
entity that is disapproved by the Secretary, provide
technical assistance, at the request of the State or
ent ity, in a timely manner to enable the State or
entity to submit an approved application; and
`(iii) develop procedures to expedite the provision of
funds to States and entities with approved
applications.
`(B) AVAILABILITY AND DISTRIBUTION OF FUNDS - The Secretary
shall ensure that funds made available under section
174(c)(1)(A) to carry out subsection (a)(4)(A) are available
to States and entities throughout the period described in
section 174(c)(2)(A).
`(4) ELIGIBLE INDIVIDUAL DEFINED - For purposes of this subsection
and subsection (g), the term `eligible individual' means --
`(A) an eligible TAA recipient (as defined in section
35(c)(2) of the Internal Revenue Code of 1986),
`(B) an eligible alternative TAA recipient (as defined in
section 35(c)(3) of the Internal Revenue Code of 1986), and
`(C) an eligible PBGC pension recipient (as defined in
section 35(c)(4) of the Internal Revenue Code of 1986),
who, as of the first day of the month, does not have other
specified cover age and is not imprisoned under Federal, State, or
local authority.
`(5) QUALIFYING FAMILY MEMBER DEFINED - For purposes of this
subsection and subsection (g) --
`(A) IN GENERAL - The term `qualifying family memb er' means--
`(i) the eligible individual's spouse, and
`(ii) any dependent of the eligible individual with
respect to whom the individual is entitled to a
deduction under sec tion 151(c) of the Internal Revenue
Code of 1986.
Such term does not include any individual who has other
specified coverage.
`(B) SPECIAL DEPENDENCY TEST IN CASE OF DIVORCED PARENTS,
ETC- If paragraph (2) or (4) of section 152(e) of such Code
applies to any child with respect to any calendar year, in
the case of any taxable year beginning in such calendar
year, such child shall be treated as described in
subparagraph (A)(ii) with respect to the custodial parent
(within the meaning of section 152(e)(1) of such Code) and
not with respect to the noncustodial parent.
`(6) STATE- For purposes of this subsection and subsection (g),
the term `State' includes an entity as defined in subsection
(c)(1)(B).
`(7) OTHER SPECIFIED COVERAGE - For purposes of this subsection,
an individual has other speci fied coverage for any month if, as
of the first day of such month --
`(A) SUBSIDIZED COVERAGE -
`(i) IN GENERAL - Such individual is covered under any
insurance which constitutes medical care (except
insurance substantially all of the coverage of which is
of excepted benefits described in section 9832(c) of
the Internal Revenue Code of 1986) under any health
plan ma intained by any employer (or former employer) of
the taxpayer or the taxpayer's spouse and at least 50
percent of the cost of such coverage (determined under
section 4980B of such Code) is paid or incurred by the
employer.
`(ii) ELIGIBLE ALTERNATIVE TAA RECIPIENTS - In the case
of an eligible alternative TAA recipient (as defined in
section 35(c)(3) of the Internal Reve nue Code of 1986),
such individual is either --
`(I) eligible for coverage under any qualified
health insurance (other than insurance described
in clause (i), (i i), or (vi) of paragraph (2)(A))
under which at least 50 percent of the cost of
coverage (determined under section 4980B(f)(4) of
such Code) is paid or incurred by an employer (or
former employer) of the taxpayer or the taxpayer's
spouse, or
`(II) covered under any such qualified health
insurance under which any portion of the cost of
coverage (as so determined) is paid or incurred by
an employer (or former employer) of the taxpayer
or the taxpayer's spouse.
`(iii) TREATMENT OF CAFETERIA PLA NS- For purposes of
clauses (i) and (ii), the cost of coverage shall be
treated as paid or incurred by an employer to the
extent the coverage is in lieu of a right to receive
c ash or other qualified benefits under a cafeteria plan
(as defined in section 125(d) of the Internal Revenue
Code of 1986).
`(B) COVERAGE UNDER MEDICARE, MEDICAID, OR SCHIP - Such
indivi dual--
`(i) is entitled to benefits under part A of title
XVIII of the Social Security Act or is enrolled under
part B of such title, or
`(ii) is enrolled in the program unde r title XIX or XXI
of such Act (other than under section 1928 of such
Act).
`(C) CERTAIN OTHER COVERAGE - Such individual--
`(i) is enrolled in a health benefits plan under
chapter 89 of title 5, United States Code, or
`(ii) is entitled to receive benefits under chapter 55
of title 10, United States Code.
`(g) INTERIM HEALTH INSURANCE COVERAGE AND OTHER ASSISTANCE -
`(1) IN GENERAL - Funds made available to a State or entity under
paragraph (4)(B) of subsection (a) may be used by the State or
entity to provide assistance and support services to eligible
individuals, including hea lth care coverage to the extent
provided under subsection (f)(1)(A), transportation, child care,
dependent care, and income assistance.
`(2) INCOME SUPPORT - With respect to any income assistance
provided to an eligi ble individual with such funds, such
assistance shall supplement and not supplant other income support
or assistance provided under chapter 2 of title II of the Trade
Act of 1974 (19 U.S.C. 2271 et seq.) (as in effect on the d ay
before the effective date of the Trade Act of 2002) or the
unemployment compensation laws of the State where the eligible
individual resides.
`(3) HEALTH INSURANCE COVERAGE - With respect to any assistance
provided to an eligible individual with such funds in enrolling
in qualified health insurance, the following rules shall apply:
`(A) The State or entity may provide assistance in obtaining
such coverage to the el igible individual and to such
individual's qualifying family members.
`(B) Such assistance shall supplement and may not supplant
any other State or local funds used to provide health care
coverag e and may not be included in determining the amount
of non -Federal contributions required under any program.
`(4) AVAILABILITY OF FUNDS -
`(A) EXPEDITED PROCEDURES - With respect to applications
submit ted by States or entities for grants under this
subsection, the Secretary shall --
`(i) not later than 15 days after the date on which the
Secretary receives a completed application from a State
or entity, notify the State or entity of the
determination of the Secretary with respect to the
approval or disapproval of such application;
`(ii) in the case of an application of a State or
entity that is disapproved by the Secretary, provide
technical assistance, at the request of the State or
entity, in a timely manner to enable the State or
entity to submit an approved application; and
`(iii) develop procedures to expedite the provision of
funds to States and entities with approved
applications.
`(B) AVAILABILITY AND DISTRIBUT ION OF FUNDS- The Secretary
shall ensure that funds made available under section
174(c)(1)(B) to carry out subsection (a)(4)(B) are available
to States and entities throughout the period described in
section 174(c)(2)(B).
`(5) INCLUSION OF CERTAIN INDIVIDUALS AS ELIGIBLE INDIVIDUALS -
For purposes of this subsection, the term `eligible individual'
includes an individual who is a member of a group of workers
certified after April 1, 2002, under chapter 2 of title II of the
Trade Act of 1974 (as in effect on the day before the effective
date of the Trade Act of 2002) and is participating in the trade
adjustment allowance program und er such chapter (as so in effect)
or who would be determined to be participating in such program
under such chapter (as so in effect) if such chapter were applied
without regard to section 231(a)(3)(B) of the Trade Act of 1974
(as so in effect).'.
(c) AUTHORIZATION OF APPROPRIATIONS - Section 174 of the Workforce
Investment Act of 1998 (29 U.S.C. 2919) is amended by adding at the
end the following:
`(c) ASSISTANCE FOR ELIGIBLE WORKERS -
`(1) AUTHORIZATION AND APPROPRIATION FOR FISCAL YEAR 2002 - There
are authorized to be appropriated and appropriated --
`(A) to carry out subsection (a)(4)(A) of section 173,
$10,000,000 for fiscal year 2002; and
`(B) to carry out subsection (a)(4)(B) of section 173,
$50,000,000 for fiscal year 2002.
`(2) AUTHORIZATION OF APPROPRIATIONS FOR SUBSEQUENT FISCAL YEARS -
There are authorized to be appropriated --
`(A) to carry out subsection (a)(4)(A) of section 173,
$60,000,000 for each of fiscal years 2003 through 2007; and
`(B) to carry out subsection (a)(4)(B) of section 173 --
`(i) $100,000,000 for fiscal year 2003; and
`(ii) $50,000,000 for fiscal year 2004.
`(3) AVAILABILITY OF FUNDS - Funds appropriated pursuant to --
`(A) paragraphs (1)(A) and (2)(A) for each fiscal year
shall, notwithstandin g section 189(g), remain available for
obligation during the pendency of any outstanding claim
under the Trade Act of 1974, as amended by the Trade Act of
2002; and
`(B) paragraph (1)(B) and (2)( B), for each fiscal year
shall, notwithstanding section 189(g), remain available
during the period that begins on the date of enactment of
the Trade Act of 2002 and ends on September 30, 2004.'.
(d) CONFORMING AMENDMENT- Section 132(a)(2)(A) of the Workforce
Investment Act of 1998 (29 U.S.C. 2862(a)(2)(A)) is amended by
inserting `, other than under subsection (a)(4), (f), and (g)' after
`grants'.
(e) TEMPORARY EXTENSION OF COBRA ELECTI ON PERIOD FOR CERTAIN
INDIVIDUALS-
(1) ERISA AMENDMENTS - Section 605 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1165) is amended --
(A) by inserting `(a) IN GENERAL - ' before `For purposes of
this part'; and
(B) by adding at the end the following:
`(b) TEMPORARY EXTENSION OF COBRA ELECTION PERIOD FOR CERTAIN
INDIVIDUALS-
`(1) IN GENERAL - In the case of a nonelecting TAA-eligible
individual and notwithstanding subsection (a), such individual
may elect continuation coverage under this part during the 60-day
period that begins on the first day of the month in which the
individual becomes a TAA-eligible individual, but only if such
election is made not later than 6 months after the date of the
TAA-related loss of coverage.
`(2) COMMENCEMENT OF COVERAGE; NO REACH -BACK- Any continuation
coverage elected by a TAA-eligible individual under paragraph (1)
shall commence at the beginning of the 60-day election period
described in such paragraph and shall not include any period
prior to such 60-day election period.
`(3) PREEXISTING CONDI TIONS- With respect to an individual who
elects continuation coverage pursuant to paragraph (1), the
period--
`(A) beginning on the date of the TAA-related loss of
coverage, and
`(B) ending on the first day of the 60-day election period
described in paragraph (1),
shall be disregarded for purposes of determining the 63-day
periods referred to in section 701(c)(2), section 2701(c)(2) of
the Public Health Service Act, and section 9801(c)(2) of the
Internal Revenue Code of 1986.
`(4) DEFINITIONS - For purposes of this subsection:
`(A) NONELECTING TAA-ELIGIBLE INDIVIDUAL- The term
`nonelecting TAA-eligible individual' means a TAA-eligible
individual who --
`(i) has a TAA-related loss of coverage; and
`(ii) did not elect continuation coverage under this
part during the TAA-related election period.
`(B) TAA-ELIGIBLE INDIVIDUAL- The term `TAA-eligible
individual' means --
`(i) an eligible TAA recipient (as defined in paragraph
(2) of section 35(c) of the Interna l Revenue Code of
1986), and
`(ii) an eligible alternative TAA recipient (as defined
in paragraph (3) of such section).
`(C) TAA-RELATED ELECTION PERIOD - The term `TAA-related
election period' means, with respect to a TAA-related loss
of coverage, the 60-day election period under this part
which is a direct consequence of such loss.
`(D) TAA-RELATED LOSS OF COVERAGE - The term `TAA-related
loss of coverage' means, with respect to an individual whose
separation from employment gives rise to being an
TAA-eligible individual, the loss of health benefits
coverage assoc iated with such separation.'.
(2) PHSA AMENDMENTS - Section 2205 of the Public Health Service
Act (42 U.S.C. 300bb -5) is amended--
(A) by inserting `(a) IN GENERAL - ' before `For purposes of
this title'; a nd
(B) by adding at the end the following:
`(b) TEMPORARY EXTENSION OF COBRA ELECTION PERIOD FOR CERTAIN
INDIVIDUALS-
`(1) IN GENERAL - In the case of a nonelecting TAA-eligible
individual and notwithstanding subsection (a), such individual
may elect continuation coverage under this title during the
60-day period that begins on the first day of the month in which
the individual becomes a TAA-eligible individual, but only if
such election is made not later than 6 months after the date of
the TAA-related loss of coverage.
`(2) COMMENCEMENT OF COVERAGE; NO REACH -BACK- Any continuation
coverage elected by a TAA-eligible individual under paragraph (1)
shall commence at the beginning of the 60-day election period
described in such paragraph and shall not include any period
prior to such 60-day election period.
`(3) PREEXISTING CONDITIONS - With respect to an i ndividual who
elects continuation coverage pursuant to paragraph (1), the
period--
`(A) beginning on the date of the TAA-related loss of
coverage, and
`(B) ending on the first day of the 60-day election period
described in paragraph (1),
shall be disregarded for purposes of determining the 63-day
periods referred to in section 2701(c)(2), section 701(c)(2) of
the Employee Retirement Income Securi ty Act of 1974, and section
9801(c)(2) of the Internal Revenue Code of 1986.
`(4) DEFINITIONS - For purposes of this subsection:
`(A) NONELECTING TAA-ELIGIBLE INDIVIDUAL- The term
`nonelecting TAA-eligible individual' means a TAA-eligible
individual who --
`(i) has a TAA-related loss of coverage; and
`(ii) did not elect continuation coverage under this
part during the TAA-related election period.
`(B) TAA-ELIGIBLE INDIVIDUAL- The term `TAA-eligible
individual' means --
`(i) an eligible TAA recipient (as defined in paragraph
(2) of section 35(c) of the Internal Rev enue Code of
1986), and
`(ii) an eligible alternative TAA recipient (as defined
in paragraph (3) of such section).
`(C) TAA-RELATED ELECTION PERIOD - The term `TAA-related
election period' means, with respect to a TAA-related loss
of coverage, the 60-day election period under this part
which is a direct consequence of such loss.
`(D) TAA-RELATED LOSS OF COVERAGE - The term `TAA-related
loss of coverage' means, with respect to an individual whose
separation from employment gives rise to being an
TAA-eligible individual, the loss of health benefits
coverage associated with such separation.'.
(3) IRC AMENDMENTS - Paragraph (5) of section 4980B(f) of the
Internal Revenue Code of 1986 (relating to election) is amended
by adding at the end the following:
`(C) TEMPORARY EXTENSIO N OF COBRA ELECTION PERIOD FOR
CERTAIN INDIVIDUALS -
`(i) IN GENERAL - In the case of a nonelecting
TAA-eligible individual and notwithstanding
subparagraph (A), such individual may elect
continuation coverage under this subsection during the
60-day period that begins on the first day of the month
in which the individual becomes a TAA-eligible
individual, but only if such election is made not later
than 6 months after the date of the TAA-related loss of
coverage.
`(ii) COMMENCEMENT OF COVERAGE; NO REACH -BACK- Any
continuation c overage elected by a TAA-eligible
individual under clause (i) shall commence at the
beginning of the 60-day election period described in
such paragraph and shall not include any period prior
to such 60-day election period.
`(iii) PREEXISTING CONDITIONS - With respect to an
individual who elects continuation coverage pursuant to
clause (i), the period --
`(I) beginning on the date of the TAA-related loss
of coverage, and
`(II) ending on the first day of the 60-day
election period described in clause (i),
shall be disregarded for purposes of determining the
63-day periods referred to in section 9801(c)(2),
section 701(c)(2) of the Employee Retirement Income
Security Act of 1974, and section 2701 (c)(2) of the
Public Health Service Act.
`(iv) DEFINITIONS - For purposes of this subsection:
`(I) NONELECTING TAA-ELIGIBLE INDIVIDUAL- The term
`nonelecting TAA-eligible individual' means a
TAA-eligible individual who has a TAA-related loss
of coverage and did not elect continuation
coverage under this subsection during the
TAA-related election period.
`(II) TAA-ELIGIBLE INDIVIDUAL- The term
`TAA-eligible individual' means an eligible TAA
recipient (as defined in paragraph (2) of section
35(c)) and an eligible alternative TAA recipient
(as defined in paragraph (3) of such section).
`(III) TAA-RELATED ELECTION PERIOD - The term
`TAA-related election period' means, with respect
to a TAA-related loss of coverage, the 60-day
election period under this subsection which is a
direct consequence of such loss.
`(IV) TAA-RELATED LOSS OF COVERAGE - The term
`TAA-related loss of coverage' means, with respect
to an individual whose separation from employment
gives rise to being an TAA-eligible individual,
the loss of health benefits coverage associated
with such separation.'.
(f) RULE OF CONSTRUCTION - Nothing in this title (or the amendments
made by this title), other than provisions relating to COBRA
continuation coverage and reporting requirements, shall be construed
as creating any new mandate on any party regarding health insurance
coverage.
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