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entitled 'Trade Adjustment Assistance; Changes to Funding Allocation 
and Eligibility Requirements could Enhance States' Ability to Provide 
Benefits and Services' which was released on May 31, 2007. 

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Report to the Congressional Requestors: 

United States Government Accountability Office: 

GAO: 

May 2007: 

Trade Adjustment Assistance: 

Changes to Funding Allocation and Eligibility Requirements Could 
Enhance States' Ability to Provide Benefits and Services trade 
Adjustment Assistance: 

GAO-07-702: 

GAO Highlights: 

Highlights of GAO-07-702, a report to congressional requestors 

Why GAO Did This Study: 

The Trade Adjustment Assistance (TAA) program, administered by the 
Department of Labor (Labor), is the nation’s primary program providing 
income support, job training, and other benefits for manufacturing 
workers who lose their jobs as a result of international trade. In 
preparation for TAA reauthorization in 2007, GAO was asked to assess 
several aspects of the TAA program. Specifically, we examine (1) recent 
trends in Labor’s certification of petitions and workers’ participation 
in training; (2) the challenges, if any, that states face in managing 
TAA training funds; and (3) the extent to which workers use the TAA 
wage insurance and health coverage benefits and the factors, if any, 
that limit participation. 

What GAO Found: 

During the past 3 fiscal years, the number of petitions certified has 
declined from about 1,700 in fiscal year 2004 to about 1,400 in 2006, 
covering an estimated 400,000 workers. The proportion of petitions 
certified has remained at about two-thirds. About 40 percent of the 
petitions were denied because workers were not involved in producing an 
article. While many certified workers receive training, nearly three-
quarters of the states reported that enrolling workers by the training 
deadline was a challenge. Labor’s process for allocating training funds 
presents significant challenges to states. Training funds allocated to 
states at the beginning of the fiscal year do not accurately reflect 
states’ spending the year before or the demand for training services, 
in part because Labor’s policy guarantees that each state will receive 
at least 85 percent of what it received the previous year. For example, 
13 states spent virtually none of their fiscal year 2006 training funds 
(see fig.) Not only did these 13 states receive about $41 million in 
fiscal year 2007, 5 of them even received larger allocations than the 
previous year. States also cited as a challenge the lack of flexibility 
to use training funds to provide trade-affected workers with case 
management services. Few TAA participants take advantage of the wage 
insurance and health coverage benefits, and several factors limit 
participation. While the number of new workers receiving the wage 
insurance benefit has increased since 2004, it remains relatively low. 
The major factor preventing more workers from participating is the 
requirement that workers find a job within 26 weeks. The number of 
workers receiving the health benefit is also relatively low, with about 
6,900 workers enrolling for the first time in the advance health 
coverage benefit in 2006. 

Figure: States with High and Low Use of Fiscal Year 2006 Training 
Funds: 

[See PDF for Image] 

Source: Department of Labor, (Map) Map Resources. 

[End of figure] 

What GAO Recommends: 

Congress may wish to consider allowing a portion of TAA training funds 
to be used for case management, simplifying the training enrollment 
deadline, and changing eligibility requirements for wage insurance. GAO 
recommends that Labor develop procedures to better allocate training 
funds. Labor generally agreed with our findings and recommendations and 
noted that it would re-examine how it allocates training funds. Labor 
contends that the Workforce Investment Act, rather than TAA, should 
finance case management. Labor did not comment on the other Matters for 
Congressional Consideration. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-702]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Sigurd Nilsen at (202) 
512-7215 or nilsens@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Certifications and Training Enrollments Have Declined over Past 3 
Fiscal Years as Petition Filings Declined: 

Labor's Allocation Process and Limited Flexibility Make It Difficult 
for States to Manage Training Funds: 

Few TAA Participants Take Advantage of Wage Insurance and Health 
Coverage Benefits: 

Conclusions: 

Matters for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Administrative Costs Related to the Health Coverage 
Benefit: 

Appendix III: Top Industries Certified during Fiscal Years 2004 to 
2006: 

Appendix IV: Final Decisions Rendered by the U. S. Court of 
International Trade on Appealed Cases, Fiscal Years 2005 and 2006: 

2005 CIT Decisions: 

2006 CIT Decisions: 

Appendix V: Occupations for Which TAA Participants Most Frequently 
Received Training in Fiscal Year 2006 by State: 

Appendix VI: Estimated Number of Workers Certified by State during 
Fiscal Years 2004 to 2006: 

Appendix VII: Percentage of Fiscal Year 2006 Training Funds Expended 
and Obligated by State: 

Appendix VIII: Listing of Initial Allocations of Training Funds by 
State for Fiscal Years 2004 to 2007: 

Appendix IX: Wage Insurance Enrollments by State since 2003: 

Appendix X: Cumulative TAA Participation by State in Advance Health 
Coverage Tax Credit, through September 30, 2006: 

Appendix XI: Comments from the Department of Labor: 

Appendix XII: GAO Contacts and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: TAA Petition Filings and Investigation Decisions, Fiscal Years 
2004 to 2006: 

Table 2: Training Enrollments by Type of Training by Fiscal Year: 

Table 3: States Spending Hardly Any of Their Fiscal Year 2006 Training 
Funds Received Comparable Amounts in Fiscal Year 2007: 

Table 4: Comparison of Average Monthly Premiums: 

Table 5: Locations Selected for Site Visits: 

Table 6: HCTC Administrative Costs for Fiscal Years 2003 to 2006 and 
Payments for Tax Years 2003 to 2006: 

Table 7: Final Decisions Rendered by CIT for Fiscal Years 2005 and 
2006: 

Table 8: Percentage of Fiscal Year 2006 Training Funds Spent or 
Obligated, by State: 

Figures: 

Figure 1: Categories under Which TAA Petitions Were Certified, Fiscal 
Years 2004-2006: 

Figure 2: Reasons Petitions Filed in Fiscal Year 2006 Were Denied: 

Figure 3: Appeals of Petitions Filed during Fiscal Years 2004 to 2006: 

Figure 4: Number of TAA Participants Covered under Certifications and 
Enrolled in Training by Fiscal Year: 

Figure 5: States' Training Cost Limits: 

Figure 6: Fluctuation in Estimated Number of Trade-Affected Workers 
Laid Off from Fiscal Years 2004 to 2006 in Kansas and Missouri: 

Figure 7: States with High and Low Use of Fiscal Year 2006 Training 
Funds: 

Figure 8: Estimated Number of Trade-Affected Workers Declined More 
Sharply between Fiscal Years 2004 and 2006 in States That Used 
Virtually No Fiscal Year 2006 Training Funds: 

Figure 9: Wage Insurance Enrollments, Calendar Years 2004 to 2006: 

Figure 10: Advance Health Coverage Benefit Enrollments, Fiscal Years 
2004 to 2006: 

Figure 11: Advance Health Coverage Enrollment by Type, September 2006: 

Abbreviations: 

ATAA: Alternative Trade Adjustment Assistance: 
ATAAAR: Alternative Trade Adjustment Assistance Activity Report: 
CIT: Court of International Trade: 
COBRA: Consolidated Omnibus Budget Reconciliation Act: 
ESL: English as a second language: 
HCTC: Health Coverage Tax Credit: 
HVAC: heating, ventilation, and air conditioning: 
IRS: Internal Revenue Service: 
SIC: Standard Industrial Classification: 
TAA: Trade Adjustment Assistance: 
UI: unemployment insurance: 
WIA: Workforce Investment Act: 

United States Government Accountability Office: 
Washington, DC 20548: 

May 31, 2007: 

The Honorable Charles B. Rangel: 
Chairman: 
Committee on Ways and Means: 
House of Representatives: 

The Honorable Adam Smith: 
House of Representatives: 

International trade has benefited Americans in a number of ways, 
largely by making a broader range of goods and services available. 
However, international trade has also contributed to layoffs in a range 
of industries, including the manufacture of textiles, paper products, 
and electronic equipment. Manufacturing workers face an uncertain 
future as manufacturing employment has declined--more than 3 million 
manufacturing jobs have been lost in this country since 2000 due to 
international trade as well as other factors. Furthermore, finding a 
new job may be harder for manufacturing workers who lose their job as a 
result of international trade because they tend to be older and have 
fewer transferable skills than other laid-off workers. 

The Trade Adjustment Assistance (TAA) program, administered by the 
Department of Labor (Labor), is the nation's primary program providing 
income support, job training, and other benefits for manufacturing 
workers who lose their jobs as a result of international trade. In 
fiscal year 2006, Congress appropriated about $655 million for income 
support payments and another $220 million for training for trade- 
affected workers. Each year Labor initially allocates 75 percent of the 
training funds, or $165 million, to states according to a formula and 
holds the remaining 25 percent in reserve to distribute to states 
throughout the year as the need arises due to unexpected layoffs. 
States have 3 years to spend these funds--fiscal year 2006 funds must 
be used by the end of fiscal year 2008. In addition, to minimize year- 
to-year fluctuations in state funding, Labor uses a "hold harmless" 
policy that ensures that each state's initial allocation is at least 85 
percent of the initial allocation received in the previous year. To 
cover administrative costs, Labor allocates to each state an additional 
15 percent of its training allocation. 

The process of enrolling workers in TAA begins when a petition for TAA 
certification is filed with Labor on behalf of a group of laid-off 
workers. Labor then reviews the petition and determines whether the 
petition meets the requirements for TAA certification, including 
determining whether the layoff occurred because of an increase in 
imports or a shift in production to another country. Under TAA, workers 
can receive up to 130 weeks of training and up to 104 weeks of income 
support benefits beyond the regular 26 weeks of unemployment insurance 
benefits available in most states. Following the passage of the TAA 
Reform Act in 2002, workers can also receive two additional benefits-- 
a health coverage benefit to help workers pay for health coverage and a 
wage insurance benefit, a demonstration project for older workers who 
quickly become reemployed. 

Our prior work on TAA[Footnote 1] has shown that most trade-affected 
workers are receiving TAA services sooner than in prior years as a 
result of the TAA Reform Act of 2002, but some workers may not be 
enrolling in the most appropriate training, in part, because of shorter 
deadlines that leave less time to assess workers' training needs. In 
addition, on the basis of an in-depth review of five layoffs, we found 
that many workers were unaware of the wage insurance or health coverage 
benefits.[Footnote 2] In preparation for TAA reauthorization in 2007, 
you asked us to provide an updated assessment of the issues encountered 
by those providing TAA benefits and services to trade-affected workers. 
Specifically, we examined (1) recent trends in Labor's certification of 
petitions and workers' participation in training; (2) the challenges, 
if any, that states face in managing TAA training funds; and (3) the 
extent to which workers use the TAA wage insurance and health coverage 
benefits and the factors, if any, that limit participation. 

We based our work, in part, on a survey of the 46 states that received 
an initial allocation of TAA training funds in federal fiscal year 2006 
(October 1, 2005, to September 30, 2006).[Footnote 3] We received 
responses from all 46 states. We conducted a supplemental survey of the 
46 states to collect additional financial information on fiscal year 
2006 training expenditures and obligations and received 46 responses. 
In addition, we interviewed Labor and Internal Revenue Service (IRS) 
officials and visited state and local officials in four states-- 
California, Massachusetts, Michigan, and North Carolina. We used 
several criteria in selecting states to visit, including the number of 
TAA certifications during fiscal years 2005 and 2006, the estimated 
number of workers affected by layoffs during this period, the amount of 
TAA funds allocated during these 2 years, the industries that were 
affected, and geographic dispersion. Within each state we also visited 
one to three local areas that had a diverse set of industries and 
experienced either a large number of TAA certifications or dealt with 
one or more very large layoffs. In addition, we analyzed Labor's TAA 
petitions database, Labor's quarterly activity reports, and IRS's data 
on the health coverage benefit. We performed our work between August 
2006 and May 2007 in accordance with generally accepted government 
auditing standards. (See app. I for more details on our objectives, 
scope, and methodology.) 

Results in Brief: 

During the past 3 fiscal years, there has been a decline in the number 
of petitions filed and certified, and with it, a decline in the number 
of workers participating in training. The number of petitions certified 
declined 17 percent, from about 1,700 in fiscal year 2004, to 1,400 in 
fiscal year 2006, but the proportion of petitions Labor has certified 
remained relatively stable. During the past 3 fiscal years, Labor 
certified about two-thirds of petitions investigated and covering about 
400,000 workers. Labor most commonly denied petitions because workers 
were not involved in the production of articles, a basic requirement of 
the TAA program. Of the 800 petitions denied in fiscal year 2006, 
nearly half were denied for this reason. Most of the denied petitions 
in this group were for two service industries recently affected by 
offshoring to other countries--business services, particularly computer-
related services and airport-related services, such as aircraft 
maintenance. Of the approximately 2,600 petitions initially denied from 
fiscal years 2004 to 2006, 16 percent were appealed, and the decisions 
were reversed in about one-third of these cases. Nationally, the 
decline in the number of workers entering training from fiscal years 
2004 to 2006 parallels a decline in the estimated number of trade-
affected workers--declining sharply between fiscal years 2004 to 2005 
but leveling off in fiscal year 2006. However, slightly more states 
responding to our survey reported an increase in training enrollment 
during the past 3 years than reported a decrease. Occupational training 
remains the most popular type of training, constituting about three-
quarters of the training enrollments. States reported in our survey 
that TAA participants most frequently trained to become nurses, medical 
assistants, and truck drivers. Efforts to enroll workers in training, 
however, are sometimes hampered by the training enrollment deadline--
that is, the requirement that workers be enrolled in training within 8 
weeks of certification or 16 weeks of layoff to qualify for extended 
income support. Nearly three-quarters of the states responding to our 
survey reported that enrolling workers in training by this deadline was 
a challenge. 

States face challenges managing their training funds because of Labor's 
policies for allocating training funds and the lack of flexibility to 
use these funds to provide case management services to trade-affected 
workers. Labor's process for allocating training funds presents two 
significant challenges to states. First, the amount states receive at 
the beginning of the fiscal year does not adequately reflect states' 
spending the year before or the current demand for training services in 
the state, largely because Labor's hold harmless policy guarantees that 
each state will receive at least 85 percent of what it received the 
previous year. For example, 13 states received an initial allocation in 
fiscal year 2006 of approximately $45 million and although they spent 
or obligated less than 1 percent of these funds, received about $41 
million at the beginning of fiscal year 2007. Moreover 5 of the 13 
states received larger amounts in fiscal year 2007 than they received 
in fiscal year 2006. Second, Labor distributes a significant amount of 
funds to most states on the last day of the fiscal year, even to states 
that have spent less than 1 percent of the current fiscal year training 
allocation. For example Labor distributed about $20 million to 48 
states on the last day of the fiscal year, and $5 million of these 
funds went to the 13 states that had used less than 1 percent of their 
initial allocation. Another challenge cited by states was the lack of 
flexibility to use training funds to provide trade-affected workers 
with case management services, such as counseling to help them decide 
whether they need training and which training would be most 
appropriate. States receive no TAA program funds for case management 
and are prohibited by law from using training funds for this service, 
so they must either use their limited administrative funds or seek 
resources from other programs, such as those funded by the Workforce 
Investment Act (WIA). 

Few TAA participants take advantage of the wage insurance and health 
coverage benefits, and several factors, such as a short deadline for 
getting a job and the cost of buying health coverage, may limit 
participation. Although the number of new workers receiving the wage 
insurance benefit has increased from 1,400 in 2004, to about 3,200 in 
2006, the number remains small--two-thirds of the states estimate that 
5 percent or less of their TAA participants received wage insurance in 
fiscal year 2006. In 2006, wage insurance benefits totaling $16.7 
million were paid to workers--an amount far less than the $85 million 
that the Congressional Budget Office estimated the benefit would cost 
each year. Several states reported that the requirement that workers 
must find a job within 26 weeks to receive the wage insurance benefit 
was the major factor preventing more workers from taking advantage of 
the benefit. Moreover, several states said another factor limiting 
participation in wage insurance is the requirement that for a group of 
workers to be certified as eligible, the petitioning workers must have 
been laid off from a firm where the affected workers lacked easily 
transferable skills and a significant portion of those workers were 
aged 50 or over. Participation in the health coverage benefit is also 
low. Approximately 6,900 workers enrolled for the first time in the 
advanced health care benefit in fiscal year 2006. About half of the 
participants receiving this benefit reside in four states--North 
Carolina, Pennsylvania, Tennessee, and Virginia. Several states told us 
the high out-of-pocket costs of the health coverage benefit may 
discourage workers from using the benefit. For example, in one state we 
visited, the worker's share of the premium for a family policy under 
the health coverage benefit was approximately $270 per month--or about 
25 percent of the monthly unemployment insurance benefit. In addition 
workers may have to pay the full premium for up to 3 months before the 
health coverage benefit is authorized, and these costs are not 
reimbursed by the health coverage benefit. While cost is among the most 
significant factors limiting participation in the health coverage 
benefit, some states also reported that it can be complicated and 
difficult to understand for both workers and local case managers. 

To allow states greater flexibility in how they may use their TAA funds 
to provide services to workers, Congress may wish to consider allowing 
a portion of TAA training funds to be used for case management 
services. In addition, in order to make it easier for workers to comply 
with the training enrollment deadline, Congress may wish to consider 
simplifying the deadline by specifying a single time period that 
commences when workers are laid off or petitions are certified, 
whichever is later. Furthermore, to enable more workers to take 
advantage of the wage insurance benefit, Congress may wish to consider 
increasing the length of time workers have to become reemployed and 
eliminating the requirement that to be certified as eligible for wage 
insurance, the petitioning workers must have been laid off from a firm 
where the affected workers lacked easily transferable skills and a 
significant portion of those workers were aged 50 or over. Moreover, we 
are recommending that the Secretary of Labor develop procedures to 
better allocate training funds and ensure that any reserve funds are 
given to only those states that have spent or obligated a substantial 
portion of the current fiscal year allocation. In its comments, Labor 
generally agreed with our findings and recommendations and noted that 
it would examine the process for allocating training funds to states. 
Labor, however, contends that the Workforce Investment Act, rather than 
TAA, should finance case management. We agree with Labor that co- 
enrollment with WIA should be encouraged, but as our report points out, 
WIA funds are not always available to provide this service, especially 
during large layoffs. We believe that states would benefit from having 
the option to use a portion of their training funds to defray the costs 
of providing case management services to trade-affected workers. Labor 
did not comment on the other Matters for Congressional Consideration. 

Background: 

Under TAA, workers enrolled in the program have access to a variety of 
benefits and services, including the following: 

Training. Participants may receive up to 130 weeks of training, 
including 104 weeks of vocational training and 26 weeks of remedial 
training, such as English as a second language or adult basic 
education. 

Extended income support. Participants may receive a total of 104 weeks 
of extended income support beyond the 26 weeks of unemployment 
insurance (UI) benefits available in most states. This includes 78 
weeks of extended income support while workers are completing 
vocational training and another 26 weeks if workers are completing 
remedial training. To qualify for extended income support, participants 
must be enrolled in training by the later of two dates: either 16 weeks 
after being laid off or 8 weeks after Labor certified their petition. 
However, before this deadline is reached, the worker need not be 
enrolled in training or have a waiver in order to be eligible to 
receive income support. The maximum level of extended income support in 
a state is set at the state's maximum UI benefit level. 

Job search and relocation benefits. Payments are available to help 
participants search for a job in a different geographical area and to 
relocate to a different area to take a job. Participants may receive up 
to a maximum of $1,250 to conduct a job search. The maximum relocation 
benefit includes 90 percent of the participant's relocation expenses 
plus a lump sum payment of up to $1,250. 

Wage insurance benefit. The wage insurance benefit, known as the 
Alternative Trade Adjustment Assistance (ATAA) program, was created by 
the TAA Reform Act of 2002 as a demonstration project designed for 
older workers. To be certified as eligible for the wage insurance 
benefit, workers must have been laid off from a firm that had a 
significant portion of workers age 50 or over who lacked transferable 
skills.[Footnote 4] To receive the benefit, workers must be 50 years of 
age or older and find reemployment within 26 weeks of being laid off 
that pays less than $50,000 and less than they previously earned. 
Workers who meet these criteria are eligible to receive 50 percent of 
the difference between their new and old wages up to a maximum of 
$10,000 over 2 years. In order to receive the benefit, workers forgo 
TAA-funded training. For the fiscal year 2008 budget request, Labor 
estimated wage insurance benefits at $23 million. 

Health coverage benefit. The health coverage benefit, known as the 
Health Coverage Tax Credit (HCTC) and also created by the TAA Reform 
Act, helps workers pay for health care insurance through a tax 
credit.[Footnote 5] Workers can choose to receive the benefit in two 
ways--as an advance option that covers 65 percent of their monthly 
premiums, allowing them to lower the amount they have to pay out of 
pocket for health coverage, or as an end-of-year tax credit that is 
claimed on their income taxes. To be eligible for the health coverage 
benefit, workers must either be (1) receiving extended income support 
payments, or eligible for extended income support but still receiving 
UI payments, or (2) receiving the wage insurance benefit. IRS 
administers the health coverage tax credit program (see app. II for 
details on the administrative costs of the program). Three federal 
departments--Treasury, Labor, and Health and Human Services--share 
responsibility for implementing the health coverage benefit for TAA- 
eligible workers. There are three health plan options that are 
automatically eligible: 

* COBRA continuation plans. Under the Consolidated Omnibus Budget 
Reconciliation Act (COBRA) of 1985, certain employers with 20 or more 
employees are required to make available 18 to 36 months of continued 
health care coverage for former employees and their dependents who lose 
health coverage due to certain circumstances, such as when a worker is 
laid off. Generally, health care insurers may charge individuals 
purchasing COBRA continuation coverage no more than 102 percent of the 
total premium. 

* Spousal coverage. Health care insurance obtained through the employer 
of a worker's spouse is also eligible, provided that the employer 
contributed less than 50 percent toward the cost of coverage. 

* Individual market plans. Workers may use the health coverage benefit 
to cover a portion of the monthly cost of individually purchased health 
coverage if the worker purchased the coverage at least 30 days prior to 
being laid off. 

In addition to the three options that are automatically qualified for 
the health coverage benefit, the TAA Reform Act allows states to 
designate other coverage alternatives--called state-qualified options. 
For example, states may make arrangements with individual health 
insurers, among others, to provide coverage to TAA participants under 
the health coverage benefit. These state-qualified plans must, among 
other requirements, provide coverage for preexisting conditions. 

TAA Petition Process: 

The process for enrolling trade-affected workers in the TAA program 
begins when a petition for TAA assistance is filed with Labor on behalf 
of a group of workers. Petitions may be filed by the employer 
experiencing the layoff, a group of at least three affected workers, a 
union, or the state or local workforce agency. Labor is required to 
either certify or deny the petition within 40 days after receiving it. 

Labor investigates whether a petition meets the requirements for TAA 
certification by taking steps such as contacting company officials, 
surveying a company's customers, and examining aggregate industry data. 
When Labor has certified a petition, it notifies the relevant state, 
which has responsibility for contacting the workers covered by the 
petition, informing them of the benefits available to them, and telling 
them when and where to apply for benefits. 

The TAA statute lays out certain basic requirements that all certified 
petitions must meet, including that a significant proportion of workers 
employed by a company be laid off or threatened with layoff and that 
affected workers must have been employed by a company that produces 
articles.[Footnote 6] In addition to meeting these basic requirements, 
a petition must demonstrate that the layoff is related to international 
trade in one of several ways, including the following: 

* Increased imports--imports of articles that are similar to or 
directly compete with articles produced by the firm have increased, the 
sales or production of the firm has decreased, and the increase in 
imports has contributed importantly to the decline in sales or 
production and the layoff or threatened layoff of workers. 

* Shift of production--the firm has shifted production of articles to 
another country and either: 

- the country is party to a free trade agreement with the United States 
or: 

- the country is a beneficiary under the Andean Trade Preference Act, 
the African Growth and Opportunity Act, or the Caribbean Basin Economic 
Recovery Act or: 

- there has been or is likely to be an increase in imports of articles 
that are similar to or directly compete with articles produced by the 
firm. 

* Affected secondarily by trade--workers must meet one of two criteria: 

- Upstream secondary workers--affected firm produces and supplies 
component parts to another firm that has experienced TAA-certified 
layoffs; parts supplied to the certified firm constituted at least 20 
percent of the affected firm's production, or a loss of business with 
the certified firm contributed importantly to the layoffs at the 
affected firm. 

- Downstream secondary workers--affected firm performs final assembly 
or finishing work for another firm that has experienced TAA-certified 
layoffs as a result of an increase in imports from or a shift in 
production to Canada or Mexico, and a loss of business with the 
certified firm contributed importantly to the layoffs at the affected 
firm. 

If Labor denies a petition for TAA assistance, the workers who would 
have been certified under the petition have two options for challenging 
this denial. They may request an administrative reconsideration of the 
decision by Labor. To take this step, workers must provide reasons why 
the denial is erroneous based on either a mistake or misinterpretation 
of the facts or the law itself, and must mail their request to Labor 
within 30 days of the announcement of the denial. Workers may also 
appeal to the United States Court of International Trade for judicial 
review of Labor's denial within 60 days of either the initial denial or 
a denial following administrative reconsideration by Labor. 

State and local workforce agencies also play key roles in the petition 
certification process and help workers take advantage of the services 
and benefits available in TAA. The agencies assist workers and 
employers in filing petitions and will also file petitions on behalf of 
workers. After a petition is certified, the agencies contact employers 
to obtain a list of workers affected by the layoff and send each worker 
a letter notifying him or her of potential eligibility. The agencies 
may also hold orientation sessions to provide workers with detailed 
information on the TAA program and services and benefits available 
through the one-stop system. In addition, case managers provide 
vocational assessments and counseling to help workers enroll in the 
program and decide which services or benefits are most appropriate. 
Local case managers also refer workers to other programs, such as the 
Workforce Investment Act, for additional services. 

TAA Training Funds: 

Approximately $220 million is available annually for training.[Footnote 
7] Each year Labor allocates 75 percent of the training funds to states 
according to a formula that takes into consideration several factors, 
including the average amount of training funds allocated to states, 
reported accrued training expenditures, and the average number of 
training participants over the previous 2˝ years. In addition, to 
minimize year-to-year fluctuations in state funding, Labor uses a hold 
harmless policy that ensures that each state's initial allocation is at 
least 85 percent of the initial allocation received in the previous 
year. In fiscal year 2006, Labor initially allocated $165 million of 
training funds to 46 states. To cover administrative costs, Labor 
allocates to each state an additional 15 percent of its training 
allocation. 

Labor holds the remaining 25 percent in reserve to distribute to states 
throughout the year according to need as they experience unexpected 
large layoffs. States may request these additional funds if they have 
expended at least 50 percent of all available training funds received 
during the fiscal year or otherwise have demonstrated need. States have 
3 years to spend these funds. Thus fiscal year 2006 funds must be used 
by the end of fiscal year 2008. In fiscal year 2006, Labor also 
distributed a special administrative award of $250,000 to each state to 
upgrade its management information systems. 

Certifications and Training Enrollments Have Declined over Past 3 
Fiscal Years as Petition Filings Declined: 

During the past 3 fiscal years, the number of petitions certified and 
the number of workers enrolled in training has declined, along with the 
number of petitions filed. The proportion of petitions certified has 
remained relatively stable, as Labor certified about two-thirds of 
petitions investigated in each of these years. Petitions were most 
commonly denied because workers were not involved in the production of 
articles, a basic requirement of the TAA program. During this time, the 
number of workers estimated to be covered under certifications has 
declined, along with the number of workers enrolling in training. 
Occupational training continues to be the largest training category, 
and states reported in our survey that workers most often trained to 
become nurses, medical assistants, and truck drivers. Efforts to enroll 
workers in training are sometimes hampered by the "8-16" training 
enrollment deadline--that is, the requirement that workers be enrolled 
in training within 8 weeks of certification or 16 weeks of layoff to 
qualify for extended income support. 

Labor Certified Two-Thirds of Petitions Investigated, although Number 
of Certifications Declined as Petitions Filed Declined: 

Over the past 3 fiscal years, the number of petitions certified has 
declined 17 percent, from nearly 1,700 in fiscal year 2004 to 1,400 in 
fiscal year 2006 (see app. III for a list of the top industries 
certified during the past 3 fiscal years). The number of petitions 
filed during this time period declined at a similar rate. Labor 
certified two-thirds of petitions that it investigated over the past 3 
fiscal years, certifying nearly 4,700 petitions (see table 1). These 
petitions covered an estimated 400,000 workers. 

Table 1: TAA Petition Filings and Investigation Decisions, Fiscal Years 
2004 to 2006: 

Fiscal year: 2004; 
Number of petitions filed: 2,992; 
Number investigated[A]: 2,559; 
Number certified: 1,689; 
Number denied: 870; 
Percentage certified: 66. 

Fiscal year: 2005; 
Number of petitions filed: 2,638; 
Number investigated[A]: 2,358; 
Number certified: 1,589; 
Number denied: 769; 
Percentage certified: 67. 

Fiscal year: 2006; 
Number of petitions filed: 2,456; 
Number investigated[A]: 2,232; 
Number certified: 1,407; 
Number denied: 825; 
Percentage certified: 63. 

Fiscal year: Total past 3 years; 
Number of petitions filed: 8,086; 
Number investigated[A]: 7,149; 
Number certified: 4,685[B]; 
Number denied: 2,464[C]; 
Percentage certified: 66. 

Source: GAO analysis of Department of Labor petitions data. 

[A] About 900 petitions were terminated prior to an investigation by 
the Department of Labor during fiscal years 2004 to 2006, accounting 
for 12 percent of petitions filed. Petitions may be terminated for 
several reasons, including that a petition was recently denied for the 
layoff or a company official was not available to provide necessary 
information. 

[B] The numbers on petitions certified include 12 petitions that were 
partially certified. 

[C] Labor initially denied 2,599 petitions, but 135 were reversed upon 
appeal. 

[End of table] 

Of the approximately 4,700 petitions certified over the past 3 fiscal 
years, most qualified for the TAA program because increased imports 
contributed to the layoff of workers. An additional 38 percent of 
certified petitions were because workers lost jobs due to a shift in 
production to another country (see fig. 1). 

Figure 1: Categories under Which TAA Petitions Were Certified, Fiscal 
Years 2004-2006: 

[See PDF for image] 

Source: GAO analysis of Department of Labor data on petitions files 
during fiscal years 2004 to 2006. 

Note: This figure does not include 12 petitions that were partially 
certified. 

[End of figure] 

Although petitions for secondarily affected workers constitute only 7 
percent of certified petitions, the number of workers covered under 
this eligibility requirement has increased somewhat, from about 7,900 
workers in fiscal year 2004 to 8,800 workers in fiscal year 
2006.[Footnote 8] Nearly all of the 328 petitions certified for 
secondarily affected workers during the past 3 fiscal years were for 
workers at firms that supplied component parts to another firm that 
experienced a TAA-certified layoff, or upstream firms. Only 4 percent 
of the certified petitions for secondarily affected workers were for 
workers at firms that performed final assembly or finishing work for 
another firm that experienced a TAA-certified layoff, or downstream 
firms. To be certified for TAA under the secondarily affected criteria, 
a downstream firm must be affected by trade with Canada or Mexico, 
while an upstream firm has no such limitation. 

Labor has generally processed petitions in a timely manner over the 
past 3 fiscal years. Labor's average processing time has remained 
relatively steady, taking on average 32 days to conduct an 
investigation and determine whether to certify or deny the petition. 
Labor met the requirement to process petitions within 40 days for 77 
percent of petitions it investigated during fiscal years 2004 to 2006. 
Labor most often took only an extra day to process the remaining 
petitions. Labor officials said that the reason they are not always 
able to meet the 40-day time frame is because they sometimes do not 
receive necessary information in a timely manner from company 
officials. 

Petitions Were Most Often Denied because Workers Were Not Involved in 
Producing an Article: 

During the past 3 fiscal years, about 2,500 petitions have been denied, 
and in fiscal year 2006, the most common reason for petitions being 
denied was because workers were not involved in producing an article, a 
basic requirement of the TAA program.[Footnote 9] Of the over 800 
petitions filed in fiscal year 2006 that were denied, 359 (44 percent) 
were denied for this reason (see fig. 2). 

Figure 2: Reasons Petitions Filed in Fiscal Year 2006 Were Denied: 

[See PDF for image] 

Source: GAO analysis of Department of Labor data on petitions filed 
during fiscal year 2006. 

Note: Other reasons that petitions were denied were that the company 
did not experience a decline in sales or production, the predominant 
cause of the layoff was unrelated to imports or a shift in production 
abroad, or there was no secondary impact. This figure does not include 
two petitions that were missing information on reasons they were 
denied. 

[End of figure] 

Of those petitions denied because workers did not produce articles, 
most came from two industries: business services, such as computer 
programming, and airport-related services, such as aircraft 
maintenance. Although data are not available on the extent to which 
offshoring has occurred in these industries, there are anecdotal 
accounts that offshoring has caused some job losses in these 
industries. 

During the past 3 fiscal years, workers appealed decisions in 16 
percent of the approximately 2,600 petitions that Labor initially 
denied. Labor's decisions were reversed in one-third of the appeals 
(see fig. 3). Labor officials told us that appeals are often reversed 
because Labor receives new information, as part of the appeals process, 
that justifies certifying the petition. 

Figure 3: Appeals of Petitions Filed during Fiscal Years 2004 to 2006: 

[See PDF for image] 

Source: GAO analysis of Department of Labor petitions data and U.S. 
Court of International Trade cases. 

Note: Some appeals were still being processed at the time this report 
was issued. 

[End of figure] 

Although few denied petitions are appealed to the U.S. Court of 
International Trade (CIT), many of the recent appeals concern the issue 
of whether workers were involved in the production of articles. In 
fiscal years 2005 and 2006, Labor's original denial was reversed in 13 
cases appealed to the Court, and most of these cases addressed the 
issue of whether workers produced articles (see app. IV for further 
details on these cases). Some of these cases concerned workers who 
produced software, which Labor had regarded as a service when the 
software was not contained in a physical medium, such as a disc or CD- 
ROM. In 2006, Labor revised its policy, stating that software could be 
considered an intangible article because it would have been considered 
an article if it had been produced in a form such as a disc or CD- 
ROM.[Footnote 10] Following this decision, Labor officials reported 
that they were certifying a greater proportion of petitions concerning 
software. 

Number of Participants in Training Has Declined as Number of Workers 
Estimated to Be Certified for TAA Declined: 

Nationally, the decline in the number of workers entering training from 
2004 to 2006 parallels the decline in the number of workers estimated 
to be covered under certifications during this period (see fig. 4). 
Sixteen states responding to our survey indicated that the percentage 
of TAA participants enrolling in training has decreased during the past 
3 fiscal years. States in our survey reported that their participation 
declines were due to fewer layoffs, fewer numbers of eligible 
participants, and the need for workers to go back to work, rather than 
enter training. On the other hand, 20 states in our survey reported an 
increase in participation. These states said the increases were due to 
several large plant closures, larger percentages of workers needing 
remedial training, and more employers requiring their workers have 
higher skill levels. 

Figure 4: Number of TAA Participants Covered under Certifications and 
Enrolled in Training by Fiscal Year: 

[See PDF for image] 

Source: GAO analysis of Department of Labor petitions data quarterly 
activity reports. 

[End of figure] 

Occupational training remains the largest training category for TAA 
participants, with about three-fourths of TAA training participants 
opting for occupational training. In our survey, states ranked nursing-
-including registered nurses, licensed practical nurses, and certified 
vocational nurses--medical assisting, and truck driving as the 
occupations in which TAA participants were most frequently trained (see 
app. V for a listing of the most frequently trained occupations by 
state). Although occupational training remains the largest training 
category, its relative percentage has decreased, while the percentage 
of training enrollments for remedial education has increased (see table 
2).[Footnote 11]  

Table 2: Training Enrollments by Type of Training by Fiscal Year: 

Type of training: Occupational; 
2004: Number: 42,793; 
2004: Percent: 84;  
2005: Number: 29,909; 
2005: Percent: 79; 
2006: Number: 27,101; 
2006: Percent: 75. 

Type of training: Remedial; 
2004: Number: 7,768; 
2004: Percent: 15; 
2005: Number: 7,509; 
2005: Percent: 20; 
2006: Number: 8,239; 
2006: Percent: 23. 

Type of training: On-the-job; 
2004: Number: 368; 
2004: Percent: 1; 
2005: Number: 356; 
2005: Percent: 1; 
2006: Number: 590; 
2006: Percent: 2. 

Total; 
2004: Number: 50,929; 
2004: Percent: 100; 
2005: Number: 37,774; 
2005: Percent: 100; 
2006: Number: 35,930; 
2006: Percent: 100. 

Source: Department of Labor data. 

Note: On-the-job training (OJT) is training provided by an employer in 
the public or private sector to a TAA participant that has been hired 
by the employer. Under the OJT contract, the employer is reimbursed for 
no more than 50 percent of the participant's wage for a specified 
duration. 

[End of table] 

During our site visits, some local officials reported that the need for 
remedial training had increased, in part because more non-English- 
speaking workers were being laid off. For example, officials from local 
areas in two states we visited said that most workers who opted for 
training enrolled in English as a second language (ESL) courses. In 
response to this need, training providers in one of the local areas 
designed a specific training program for dislocated garment workers 
that enabled workers to take both ESL and occupational skills training 
simultaneously. 

Twenty-six states in our survey reported having a maximum amount they 
will pay for a worker to attend training, typically from $10,000 to 
$20,000 (see fig. 5). Many of these states did, however, note that 
their training maximums were flexible and could be waived if justified. 
In addition, 13 states in our survey reported that their training cost 
limits had increased during the past 3 years, mainly due to rises in 
tuition and related expenses, as well as requests for more expensive 
training. 

Figure 5: States' Training Cost Limits: 

[See PDF for image] 

Source: GAO analysis of survey responses. 

[End of figure] 

Efforts to enroll workers in training are sometimes hampered by the "8- 
16" training enrollment deadline--that is, the requirement that workers 
be enrolled in training within 8 weeks of certification or 16 weeks of 
layoff to qualify for extended income support. Nearly three-quarters of 
the states responding to our survey reported that enrolling workers in 
training by the 8-16 deadline was a challenge. For example, one state 
noted that trying to enroll participants in training by the 8-16 
deadline is particularly challenging when dealing with large layoffs 
because it is difficult to handle all the logistics, such as notifying 
workers and setting up appointments, for a large number of workers 
within the deadline. Moreover, officials in the four states we visited 
also indicated that the deadline is very confusing to workers. They 
told us that workers become confused about which point in time the 8 
weeks or 16 weeks apply to and, as a result, are not sure when the 
clock starts and stops. We previously reported that about three-fourths 
of states responded that workers at least occasionally miss the 
deadline and consequently lose their eligibility for extended income 
support.[Footnote 12] In that report, we recommended that Labor track 
the ability of workers to meet the 8-16 deadline. As of April 2007, 
Labor had not yet begun gathering information on the impact of the 
deadline. 

Labor's Allocation Process and Limited Flexibility Make It Difficult 
for States to Manage Training Funds: 

States face challenges managing their training funds because of Labor's 
policies for allocating training funds and the lack of flexibility to 
use these funds to provide case management services to trade-affected 
workers. Labor's process for allocating training funds presents two 
significant challenges to states. First, the amount states receive at 
the beginning of the fiscal year does not adequately reflect states' 
spending the year before or the current demand for training services in 
the state, largely because Labor guarantees that each state will 
receive at least 85 percent of what it received the previous year. As a 
result, some states receive more training funds than they can use, 
while others do not receive enough. For example, in fiscal year 2006, 9 
states used virtually all their funds, while 13 states used hardly any. 
On average, about 62 percent of the training funds states received in 
fiscal year 2006 were spent or obligated. Second, Labor distributes a 
significant amount of funds to most states on the last day of the 
fiscal year, even to states that have spent less than 1 percent of the 
current fiscal year's training allocation. States also report being 
challenged by the lack of flexibility to use training funds to provide 
trade-affected workers with case management services, such as 
counseling to help them decide whether they need training and what type 
of training would be most appropriate. States receive no TAA program 
funds for case management, and the law does not allow them to use 
training funds for this service, so they must either use their limited 
administrative funds or seek resources from other programs, such as 
those funded by the Workforce Investment Act. 

Labor's Policies for Allocating Training Funds Present Challenges to 
States in Managing Their Funds: 

Labor's process for allocating training funds does not adequately 
recognize the episodic nature of layoffs or the extent to which states 
have used their previous year's allocations. Labor allocates 75 percent 
of TAA training funds based upon a formula that takes into account 
expenditures and participation over the previous 2 ˝ years. However, 
the year-to-year fluctuation in layoffs within a state may result in 
states receiving more or less funds than they may actually need. For 
example, the estimated number of trade-affected workers being laid off 
declined dramatically in Kansas from fiscal year 2004 to 2005 and 
increased somewhat in 2006. Overall the estimated number of trade- 
affected workers in Kansas laid off in fiscal year 2006 represented 
about an 80 percent decrease from the estimated number in 2004. On the 
other hand, Missouri experienced an 80 percent increase in the number 
of trade-affected workers being laid off between fiscal years 2004 and 
2006 (see fig. 6.) (See app. VI for the number of estimated workers 
certified by state during the past 3 fiscal years.) Kansas used hardly 
any of its fiscal year 2006 training fund allocation, while Missouri 
used virtually all of its. However, both states received about 15 
percent less in fiscal year 2007 than they received in 2006. 

Figure 6: Fluctuation in Estimated Number of Trade-Affected Workers 
Laid Off from Fiscal Years 2004 to 2006 in Kansas and Missouri: 

[See PDF for image] 

Source: GAO analysis of Department of Labor petitions data. 

[End of figure] 

While the 46 states responding to our survey reported using (spending 
or obligating), on average, about 62 percent of their fiscal year 2006 
training funds during the fiscal year, the percentage of funds states 
expended and obligated varied widely. Thirteen of the states reported 
using less than 1 percent of their fiscal year 2006 funds for training, 
while 9 states reported using more than 95 percent of their fiscal year 
2006 training funds (see fig. 7). The amount individual states reported 
using ranged from 0 percent in several states to about 230 percent in 1 
state. (See. app. VII for a listing of the percentage of fiscal year 
2006 funds spent or obligated by state). 

Figure 7: States with High and Low Use of Fiscal Year 2006 Training 
Funds: 

[See PDF for image] 

Source: Department of Labor, (Map) Map Resources. 

[End of figure] 

The estimated number of workers covered by certifications decreased by 
more than 40 percent between fiscal years 2004 and 2006 in the 13 
states that used hardly any of their fiscal year 2006 training funds. 
On the other hand, the estimated number of workers only declined 
slightly during this period for the states using virtually all their 
fiscal year 2006 training funds (see fig. 8). Most of the states that 
used little of their fiscal year 2006 funds said that they were still 
using training funds from the previous fiscal year. Some of these 
states noted that they had experienced fewer TAA petitions and had 
fewer workers being laid off due to international trade. 

Figure 8: Estimated Number of Trade-Affected Workers Declined More 
Sharply between Fiscal Years 2004 and 2006 in States That Used 
Virtually No Fiscal Year 2006 Training Funds: 

[See PDF for image] 

Source: GAO analysis of survey responses and Department of Labor 
petitions data. 

[End of figure] 

A particular problem with Labor's allocation process is the hold 
harmless policy, which guarantees that each state receives no less than 
85 percent of what it received in the previous year. While this policy 
is intended to minimize significant fluctuations in state funding from 
prior years, it awards states comparable training funds without 
recognition of the previous year's expenditures or obligations. For 
example, the 13 states that used less than 1 percent of the fiscal year 
2006 funds received nearly $41 million in fiscal year 2007--an amount 
slightly less than they received in fiscal year 2006. Moreover, 5 of 
the 13 states received a larger allocation in fiscal year 2007 than 
they received in 2006 (see table 3). Labor officials acknowledged that 
the formula for allocating initial training funds had been in place for 
a few years and that it may be time to evaluate whether the formula--- 
including the factors used, the 75 percent initial distribution 
percentage, and the hold harmless policy--ensures that training funds 
are being appropriately distributed to the states. (See app. VIII for a 
listing by state of Labor's initial allocation of training funds for 
fiscal years 2004 to 2007.) 

Table 3: States Spending Hardly Any of Their Fiscal Year 2006 Training 
Funds Received Comparable Amounts in Fiscal Year 2007: 

State: Arizona; 
2006 initial allocation: $2,440,988; 
2007 initial allocation: $2,074,840. 

State: Florida; 
2006 initial allocation: 3,350,544; 
2007 initial allocation: 2,847,962. 

State: Idaho; 
2006 initial allocation: 2,390,380; 
2007 initial allocation: 2,031,823. 

State: Kansas; 
2006 initial allocation: 2,775,736; 
2007 initial allocation: 2,359,376. 

State: Kentucky; 
2006 initial allocation: 3,705,162; 
2007 initial allocation: 3,830,061. 

State: Minnesota; 
2006 initial allocation: 4,005,739; 
2007 initial allocation: 3,404,879. 

State: Montana; 
2006 initial allocation: 1,109,440; 
2007 initial allocation: 943,024. 

State: New Mexico; 
2006 initial allocation: 377,871; 
2007 initial allocation: 396,303. 

State: New York; 
2006 initial allocation: 2,642,798; 
2007 initial allocation: 2,850,870. 

State: Oklahoma; 
2006 initial allocation: 1,523,960; 
2007 initial allocation: 1,577,252. 

State: South Carolina; 
2006 initial allocation: 4,366,585; 
2007 initial allocation: 4,499,254. 

State: Utah; 
2006 initial allocation: 1,814,367; 
2007 initial allocation: 1,542,212. 

State: Washington; 
2006 initial allocation: 14,357,300; 
2007 initial allocation: 12,203,705. 

Total; 
2006 initial allocation: $44,860,870; 
2007 initial allocation: $40,561,561. 

Source: Department of Labor. 

[End of table] 

Labor Distributes Additional Training Funds at the End of the Fiscal 
Year, Even to States Not Using Initial Allocation: 

Labor distributes a significant amount of funds to most states on the 
last day of the fiscal year, regardless of whether states need these 
additional funds. Labor holds 25 percent of TAA training funds in 
reserve to distribute on an as-needed basis to accommodate large or 
unexpected layoffs. States may request these additional funds if they 
have expended at least 50 percent of all available training funds 
received during the fiscal year or otherwise have demonstrated need. 
During fiscal year 2006, Labor distributed about $22 million to 13 
states that requested additional funds to deal with unexpected demands. 
This left about $20 million to be distributed at the end of the year. 
Any funds Labor does not distribute by the end of the year expire and 
are not available for any other use. Labor distributed end-of-year 
funds to 48 states, including about $5 million to states that had spent 
or obligated less than 1 percent of their initial fiscal year 2006 
allocation.[Footnote 13] 

Labor does not require states to have expended 50 percent of available 
training funds in order to receive training funds during the end-of- 
year distribution. Labor distributes these funds to each state based 
upon a calculation that takes into account the amount of training funds 
each state received from its initial allocation plus any additional 
amount it received during the year.[Footnote 14] According to Labor 
officials, all states will receive an end-of-year allocation unless a 
state specifically informs Labor it does not want any additional funds 
or if it had not received any funds at all during the year. Five 
states--Michigan, North Carolina, Pennsylvania, Texas, and Washington-
-received over $1 million on the last day of the fiscal year. We 
visited Michigan and North Carolina, and officials in both states said 
that receiving funds on the last day of the fiscal year made it 
difficult to budget for training, especially when they did not know how 
much they would receive. 

Waiting until the last day of the fiscal year to distribute training 
funds to states does not reflect good planning or management of program 
funds. Labor officials agreed that the distribution of reserve training 
funds could be improved so that more funds are disbursed throughout the 
year rather than on the last day. Officials also acknowledged that 
states that have not spent or obligated any of their initial allocation 
probably should not receive additional training funds at the end of the 
year. 

Limited Flexibility in Use of Training Funds Hinders Case Management 
Services: 

States also cited the lack of flexibility to use training funds to 
provide trade-affected workers with case management services as a 
challenge. Difficulty funding case management services for trade- 
affected workers was a concern among officials in the states we 
visited. For example, state officials in one state said providing 
proper assessment, career counseling, and other case management 
services was a real challenge and noted that additional funds from 
other sources are limited. States do not receive TAA program funds for 
case management and, by law, cannot use training funds for this 
service. As a result, states must either use their limited TAA 
administrative funds or use funds from other programs to pay for case 
management, but there are limitations with these funding sources. 

According to Labor officials, states are encouraged to co-enroll 
participants in WIA, and in Labor's view states have sufficient WIA 
funds to pay for case management for TAA participants. About three- 
fourths of the states reported in our survey that they were able to 
utilize WIA funds to help pay for case management services. Yet nearly 
half of the states also reported that coordination with WIA was a 
challenge. For example, WIA funding may not always be available for TAA 
workers, especially during a large layoff. Furthermore, local officials 
in a state we visited said that while 85 percent of TAA participants do 
co-enroll in WIA, a large layoff can strain funding and makes it 
difficult for WIA to completely fund case management for trade-affected 
workers. 

States also reported limitations to using administrative funds to 
provide case management. More than half of the states responding to our 
survey reported the shortage of administrative funds as a challenge. 
One state noted that its administrative funds are usually exhausted by 
the end of the first quarter due to the amount of case management that 
is required for the program. A local official in one state we visited 
said that it uses Wagner-Peyser funds to pay for case management 
because not enough TAA administrative funds are received and TAA 
training funds cannot be used. As a result, only one case manager could 
be funded, and this one person had to cover three counties and serve 
approximately 1,000 workers. Moreover, officials in some of the states 
we visited cautioned that administrative funds should not be used for 
case management because case management is a program activity--any 
increase in the administrative limit to pay for this service could lead 
to the misconception that the program has too much overhead. These 
state officials noted that having the flexibility to use TAA training 
funds for case management would alleviate this concern. 

Few TAA Participants Take Advantage of Wage Insurance and Health 
Coverage Benefits: 

Few TAA participants take advantage of the wage insurance and health 
coverage benefits, and several factors, such as a short deadline for 
getting a job and the cost of buying health coverage, may limit 
participation. Although the number of workers entering the wage 
insurance program has increased from 2004 to 2006, most states in our 
survey estimated that 5 percent or less of their TAA participants 
received the benefit in fiscal year 2006. In 2006, wage insurance 
benefits totaling $16.7 million were paid to workers--an amount far 
less than the $85 million that the Congressional Budget Office 
estimated the benefit would cost each year. In our site visits, states 
reported that the requirement that workers must find a job within 26 
weeks to receive the wage insurance benefit was the major factor 
preventing more workers from taking advantage of the benefit. An 
additional factor that may limit participation in wage insurance by 
some older workers is the requirement that for a group of workers to be 
certified as eligible, the petitioning workers must have been laid off 
from a firm where the affected workers lacked easily transferable 
skills and a significant portion of those workers were aged 50 or over. 
The number of workers receiving the advance health coverage benefit has 
increased somewhat since 2004, but is still relatively low. State 
officials told us the high out-of-pocket costs of the health coverage 
benefit may discourage workers from using the benefit. While cost is 
one of the most significant factors limiting participation in the 
health coverage benefit, some states also reported that the health 
coverage tax credit program can be complicated and difficult to 
understand for both workers and local case managers. 

Deadline to Find Employment and Other Requirements Limit Participation 
in the Wage Insurance Benefit: 

Few TAA participants take advantage of the wage insurance benefit. 
According to Labor officials, in calendar year 2006, 6,316 workers 
received the wage insurance benefit. Labor officials also stated that 
the universe of workers eligible for wage insurance cannot be estimated 
because data are not available on the number of workers certified for 
TAA who are 50 years old or older and meet the other eligibility 
requirements. However, two-thirds of the states we surveyed reported 
that 5 percent or less of TAA participants received wage insurance in 
fiscal year 2006.[Footnote 15] We previously reported in a case study 
that less than 20 percent of the workers potentially eligible for the 
wage insurance benefit received it.[Footnote 16] 

Although participation is low, participation has increased since the 
benefit was implemented in August 2003. The number of workers enrolling 
in the program increased from about 1,400 in 2004 to about 3,200 in 
2006 (see fig. 9). The total payments workers received also increased 
from about $4.3 million in 2004 to about $16.7 million in 2006. Despite 
these increases, the total yearly benefits remain far lower than the 
2002 Congressional Budget Office estimate of $85 million per year. (See 
app. IX for further details on wage insurance enrollments by state 
since 2003.) 

Figure 9: Wage Insurance Enrollments, Calendar Years 2004 to 2006: 

[See PDF for image] 

Source: Department of Labor data. 

[End of figure] 

Although officials in the states we visited believe the wage insurance 
benefit is beneficial to older workers close to retirement, two key 
factors limit participation. Officials in states we visited said that 
one of the greatest obstacles to participation was the requirement for 
workers to find a new job within 26 weeks after being laid off. For 
example, according to officials in one state, 80 percent of 
participants who were seeking wage insurance but were unable to obtain 
it failed because they could not find a job within the 26-week period. 
The challenges of finding a job within this time frame may be 
compounded by the fact that workers may actually have less than 26 
weeks to secure a job if they are laid off prior to becoming certified 
for TAA. For example, a local case worker in one state we visited said 
that the 26 weeks had passed completely before a worker was certified 
for the benefit. In addition, in order for a worker to receive the wage 
insurance benefit, the workers must forgo training and extended 
unemployment insurance benefits. 

Another factor that may limit participation by some older workers is 
the requirement that a worker's firm must be certified for the wage 
insurance benefit before any of its workers are eligible. Under the TAA 
Reform Act, for a group of workers to be certified, the petitioning 
workers must have been laid off from a firm where the affected workers 
lacked easily transferable skills and a significant portion of those 
workers were aged 50 or over. Labor interprets a "significant portion" 
as the lesser of 5 percent of the affected workforce or 50 workers at a 
firm with 50 or more workers, or at least 3 workers in a firm with 
fewer than 50 affected workers. Labor investigates each petition to see 
if the firm meets the requirements, and in fiscal year 2006, nearly 90 
percent of TAA-certified petitions were also certified for the wage 
insurance benefit. Labor officials said that eliminating this step of 
the TAA certification process--that is, allowing any TAA-certified 
workers who meet the individual eligibility criteria for the wage 
insurance benefit to participate--would decrease the agency's 
investigation workload somewhat and may increase participation in the 
wage insurance benefit. 

Participation in the Health Coverage Benefit Remains Low: 

Participation levels remain low for the health coverage benefit. 
Although the number of TAA participants enrolling for the first time in 
the advance health coverage benefit--whereby participants receive a 
monthly tax credit that covers 65 percent of their premiums--has 
increased since 2004, only about 6,900 received the advance health 
benefit in fiscal year 2006. TAA participants may also elect to receive 
an end-of-year tax credit, but the number of TAA participants selecting 
this option is also low and has been decreasing over time. Once the 
advance payment systems were established, workers have been choosing 
the advance benefit more often than the end-of-year credit to avoid 
paying the full cost of the health coverage out of pocket each month. 
We estimate that for tax year 2005, approximately 5,700 TAA 
participants received end-of-year tax credits. However, some workers 
receive both the advance and end-of-year tax credit--participants may 
claim the end-of-year tax credit to recover some of the out-of-pocket 
expenses they incurred while waiting for their first advance payment. 
IRS reported that of those TAA participants receiving an end-of-year 
credit in tax year 2005, a total of 3,300 participants received both 
the advance and end-of-year credits. 

New enrollments in the advance credit option have increased over the 
past 2 fiscal years from about 5,600 to about 6,900 enrollments (see 
fig. 10). As of September 2006, approximately 7 percent of the workers 
that were eligible for the extended income support, a basic requirement 
for the health coverage benefit, were receiving the advance credit. 
However, some of the workers that were eligible for extended income 
support may not meet other eligibility requirements for the health 
coverage benefit, such as having a qualified health plan. Since 
inception of the advance benefit, about 22,000 TAA participants have 
received the credit. (See app. X for advance health coverage enrollment 
by state since the benefit became available.) 

Figure 10: Advance Health Coverage Benefit Enrollments, Fiscal Years 
2004 to 2006: 

[See PDF for image] 

Source: GAO analysis of IRS data. 

Notes: IRS data on new advance credit enrollments are unavailable prior 
to January 2004. 

[End of figure] 

About half of all individuals enrolled in the advance health coverage 
tax credit since inception resided in four states--North Carolina, 
Pennsylvania, Tennessee, and Virginia. North Carolina alone had nearly 
a quarter of the TAA participants enrolled for the advance credit 
nationwide. State officials attributed this to two factors. First, 
North Carolina was among the first states in the nation to implement 
the advance health coverage tax credit and has the highest potentially 
eligible population. Second, the state contracts with a not-for-profit 
call center that informs workers about all the TAA benefits available, 
including the health coverage benefit. The call center walks TAA 
participants through the complex health coverage tax credit enrollment 
process. 

Workers may choose among several options of health coverage, including 
COBRA and state-qualified plans. In September 2006, over 75 percent of 
TAA participants who received advance health benefits selected COBRA 
health coverage. Although COBRA is expensive, according to state 
officials, this is the most attractive option because it allows workers 
to maintain the health coverage they had prior to being laid off and 
avoid searching for new coverage that meets the specific eligibility 
criteria for the health coverage benefit (see fig. 11). However, if a 
firm discontinues its employee health coverage, workers potentially 
eligible for the health coverage benefit would not likely have access 
to COBRA. 

Figure 11: Advance Health Coverage Enrollment by Type, September 2006: 

[See PDF for image] 

Source: GAO analysis of IRS data. 

[End of figure] 

Although most states offered a state-qualified health plan, less than 
25 percent of advance health benefit participants selected state- 
qualified health coverage. Only a small percentage of advance benefit 
participants purchased individual plan coverage, which requires workers 
to be enrolled in an individual plan 30 days prior to separation. IRS 
reported that it is difficult for workers to anticipate the need to 
purchase this coverage in time to meet the 30-day requirement. 

Cost Is a Key Factor Limiting Participation in the Health Coverage 
Benefit: 

The high cost of the health coverage benefit to participants is the 
greatest barrier to higher participation. State officials said that 
many laid-off workers cannot afford to pay 35 percent of their health 
care premiums while their primary income is unemployment insurance 
benefits. IRS officials reported that the workers' 35 percent share as 
among the primary barriers to participation in the benefit. For 
example, in the four states we visited, the average monthly premium for 
COBRA policies covering two or more individuals was about $800. The 
workers' out-of-pocket cost for COBRA coverage in these states would be 
nearly one-fourth of their monthly UI payment (see table 4). 

Table 4: Comparison of Average Monthly Premiums: 

State: California; 
Average monthly UI payment: $1,176; 
Average monthly COBRA premium for two or more: $777; 
Workers' 35 percent share of monthly premium: $272; 
Percentage of monthly UI payment: 23. 

State: Massachusetts; 
Average monthly UI payment: 1,465; 
Average monthly COBRA premium for two or more: 895; 
Workers' 35 percent share of monthly premium: 313; 
Percentage of monthly UI payment: 21. 

State: Michigan; 
Average monthly UI payment: 1,161; 
Average monthly COBRA premium for two or more: 737; 
Workers' 35 percent share of monthly premium: 258; 
Percentage of monthly UI payment: 22. 

State: North Carolina; 
Average monthly UI payment: 1,074; 
Average monthly COBRA premium for two or more: 770; 
Workers' 35 percent share of monthly premium: 270; 
Percentage of monthly UI payment: 25. 

Average; 
Average monthly UI payment: $1,219; 
Average monthly COBRA premium for two or more: $795; 
Workers' 35 percent share of monthly premium: $278; 
Percentage of monthly UI payment: 23. 

Source: GAO analysis of UI data from states and average COBRA premiums 
from IRS. 

[End of table] 

State-qualified plans are similarly expensive and are often more 
expensive than COBRA coverage. Currently, 43 states have such plans, 
which, among other requirements, must provide for preexisting 
conditions. For example, in one state we visited, the premium for the 
state-qualified plan for a family was about $940 per month, while the 
average COBRA premium was about $740 per month. The worker's share of 
the state-qualified premium was about $330---or about 30 percent of the 
UI benefit--compared to about $260 for COBRA coverage. 

In addition, there is currently a period of up to about 3 months where 
workers must cover the full cost of their health premiums before 
beginning to receive the advance credit, and this may be a further 
barrier to their participation. In 2004, we reported that it typically 
took from 4 to 6 months for workers to become eligible for and receive 
the first advance payment[Footnote 17]. The gap in time is created by 
three different periods in the health coverage benefit eligibility and 
enrollment process. The first gap occurs between the date a worker is 
laid off and when the worker is TAA-certified and therefore eligible 
for the health coverage benefit. The average time Labor takes to 
process a TAA petition is 32 days. According to IRS, a gap of 
approximately 55 days also exists from the time IRS mails a health 
coverage benefit program kit to a worker and the time a worker's 
registration for the benefit is received by the agency. A worker is not 
eligible for an end-of-year tax credit during these two time periods. 
The third gap occurs from the time a worker applies for the advance 
health credit until the time enrollment is completed. According to IRS, 
this takes about 6 days. Participants may claim an end-of-year credit 
or receive benefits from the state for this time period.[Footnote 18] 
Although the overall gap has been reduced, local case managers in our 
site visits said that many workers cannot afford to hold on to their 
health coverage long enough to take advantage of the benefit. In these 
cases, workers may no longer be eligible for the health coverage 
benefit because workers must maintain "continuous" coverage and have a 
health plan in place to receive the tax cred[Footnote 19]it. IRS 
officials reported that inability to pay the out-of-pocket costs 
between layoff and application for the advance credit is one of the 
reasons workers lose eligibility and may be denied the benefit. Workers 
may also obtain the end-of-year credit, but to do so, they pay the full 
cost of health coverage throughout the year and then apply for the 
credit when they file their annual tax return with IRS. 

While cost is one of the most significant factors limiting 
participation in the health coverage benefit, some states also reported 
that the health coverage tax credit program can be complicated and 
difficult to understand for both workers and local case managers. In 
our survey, nearly two-thirds of the states reported that limited IRS 
guidance on the benefit was still a challenge. Furthermore, during our 
site visits, some state and local officials said that they are not 
experts on the health coverage benefit and do not know enough details 
of the benefit to get information out to workers and to assist them 
with the enrollment process. In some local areas, case workers we 
interviewed said that they provide minimal information about the 
benefit and primarily refer workers to pamphlets or the IRS call center 
for details. In addition to providing pamphlets on the health coverage 
benefit to state workforce agencies, IRS also provides states with 
information about the health coverage benefit for state rapid response 
teams and employers, as well as a registration to-do list for workers. 
We previously reported on the complexity of the health coverage 
benefit, noting that the process for workers to become eligible and 
enroll for the benefit was fragmented and difficult to 
navigate.[Footnote 20] In that report, we recommended to several 
agencies, including Labor and IRS, that a centralized resource be made 
available at the time individuals must make decisions about purchasing 
qualifying health coverage and meeting other eligibility requirements. 
In February 2007, IRS began distributing to all workers covered by a 
petition a more simplified program kit for the health coverage benefit. 
This kit contains a self-administered questionnaire that helps workers 
determine whether they may be eligible for the benefit, based on their 
responses to the questions, and what steps they must take to enroll. It 
also provides a list of frequently asked questions, a glossary of terms 
related to the benefit, and contact information for several agencies 
involved in implementing the benefit. 

Conclusions: 

TAA provides a range of benefits and services to manufacturing workers 
who lose their jobs due to international trade. Some workers may need 
federally funded assistance to help them transition to new jobs; others 
may not want or need it. Use of certain benefits--the wage insurance 
and health coverage benefits--has remained relatively low since they 
became available following passage of the 2002 TAA Reform Act. Benefits 
paid under the wage insurance demonstration continue to fall far short 
of predictions. Our findings suggest that despite the potential benefit 
that the wage insurance may bring in helping older workers quickly re- 
enter the labor market, several eligibility criteria limit its use. For 
older workers who lack transferable skills--the target population for 
this benefit--the 26 weeks that they are allowed to find a new job may 
not be long enough. In addition, the requirement that a significant 
portion of a firm's affected workers must be age 50 or over in order 
for a group of workers to be certified means that an individual worker 
who is over 50 may not be eligible to apply for wage insurance benefits 
while peers in other firms where more workers were over 50 would have 
access to such benefits. Continuing the current eligibility 
requirements for the wage insurance demonstration program may mean that 
participation will remain low and workers who could benefit from this 
assistance will not be able to take advantage of it. Our findings also 
show that participation in the health coverage benefit remains low, 
largely because of the high cost of monthly premiums. While 
participation is low, some states appear more successful than others in 
enrolling more workers. This may be due, in part, to their increased 
efforts to make workers aware of the benefit and help them understand 
how to access it. 

Workers often need help making decisions about training--what type of 
training to take or whether to enroll in training at all. State 
officials tell us that workers can be confused about when they must 
enroll in training to qualify for extended income support and health 
coverage benefits because of the complex training enrollment deadline 
that requires them to be enrolled within 8 weeks of certification or 16 
weeks of layoff. Furthermore, workers may not be getting the assistance 
they need to make training decisions because states lack the needed 
funding--or funding flexibility--to provide it. Currently, states must 
use their limited TAA administrative funds to provide this case 
management, or seek assistance from other programs, such as WIA or 
Wagner-Peyser. When other programs are tapped to provide these 
services, trade-affected workers must compete with all other eligible 
participants to gain access to the services they need. Moreover, this 
competition is heightened during economic downturns or large layoffs-- 
precisely when TAA participants are most likely to need services. 

Nationwide, the number of workers who are enrolling in training has 
declined, as has the number of petitions and workers certified. But 
this is not a uniform picture across the country, as layoffs follow an 
uneven trajectory. However, Labor's approach to distributing training 
funds fails to take into account the episodic nature of layoffs, using 
historic data to allocate training funds each year and guaranteeing 
that no state will receive less than 85 percent of what it received the 
year before. Given the uneven nature of layoffs, this approach raises 
concerns about whether the states most in need of funds are receiving 
them. Our findings suggest that Labor's allocation of training funds 
leaves some states with more money than they need, and others with too 
little. In fact, states that appear not to be in need of additional 
funding at all because they did not spend any of their fiscal year 2006 
funds received nearly as much or more in their fiscal year 2007 
allocation. Moreover, Labor distributed millions of dollars of reserved 
training funds at the end of fiscal year 2006 to nearly all states, 
including those that had not spent any of their 2006 training funds 
during the year. 

Matters for Congressional Consideration: 

We suggest that Congress consider taking the following actions: 

* To allow states greater flexibility in how they may use their TAA 
funds to provide services to workers, Congress may wish to consider 
allowing a portion of TAA training funds to be used for case management 
services. 

* In addition, in order to make it easier for workers to comply with 
the training enrollment deadline, Congress may wish to consider 
simplifying the deadline by specifying a single time period that 
commences when workers are laid off or petitions are certified, 
whichever is later. 

* Furthermore, if Congress decides to extend the wage insurance benefit 
demonstration program, Congress may wish to consider easing some of the 
constraints on accessing this benefit to enable more workers to take 
advantage of it, including: 

- increasing the length of time workers are allowed to become 
reemployed, 

- eliminating the requirement that a firm's affected workers must lack 
transferable skills in order for a group of workers to be certified as 
eligible for wage insurance, and: 

- eliminating the requirement that a significant number of a firm's 
workers be age 50 or over in order for a group of workers to be 
certified as eligible for wage insurance. 

Recommendations for Executive Action: 

In order to better ensure that TAA training funds are allocated to 
states that have demonstrated a need for training funds and have used a 
significant portion of the funds they have already been allocated, we 
recommend that the Secretary of Labor take the following actions: 

* change the process for initially distributing training funds, 
including the initial allocation percentage and the hold harmless 
policy, and: 

* develop procedures to better allocate the reserve funds throughout 
the fiscal year to enable states to carefully manage their training 
resources, ensuring that these reserve funds are distributed only to 
those who have spent or obligated a significant portion of the current 
fiscal year allocation. 

Agency Comments: 

We provided a draft of this report to Labor and IRS for review and 
comment. IRS only provided technical comments that we incorporated in 
the report where appropriate. Labor generally agreed with our findings 
and recommendations and noted that it was pleased that we addressed 
some of the issues surrounding the TAA allocation formula. Labor noted 
that while it believes the adoption of a formula-based methodology for 
distributing TAA training funds has been a success, it agrees that the 
formula, and, in particular, the hold harmless provision, should be 
reviewed to ensure that funds are allocated efficiently to meet 
training needs. In addition, Labor agreed to examine the process for 
distributing reserve funds throughout the year instead of waiting for 
states to request these funds. Labor, however, noted that it did not 
think that the 15 percent allocation for TAA administration should be 
increased to finance case management for trade-affected workers, saying 
that these services should be funded through co-enrollment in WIA. Our 
report does not recommend this, but suggests that Congress consider 
allowing states the flexibility to use some portion of TAA training 
funds to provide this service. We agree with Labor that co-enrollment 
with WIA should be encouraged, but as our report points out, WIA funds 
are not always available to provide this service, especially during 
large layoffs. We continue to believe that when WIA funds are not 
available to fund case management, states would benefit from having the 
option to use a portion of their training funds to defray the costs of 
providing case management services to trade-affected workers. Labor did 
not comment on the other Matters for Congressional Consideration. 
Labor's entire comments are reproduced in appendix XI. 

We will send copies of this report to the Secretary of Labor, the 
Commissioner of Internal Revenue, relevant congressional committees, 
and other interested parties and will make copies available to others 
upon request. In addition, the report will be available at no charge on 
GAO's Web site at http://www.gao.gov. 

A list of related GAO products is included at the end of this report. 
If you or your staff have any questions about this report, please 
contact me at (202) 512-7215 or at nilsens@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Other contacts and staff 
acknowledgments are listed in appendix XII. 

Signed by: 

Sigurd R. Nilsen: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to determine (1) trends in Labor's certification of 
petitions and workers' participation in training during the past 3 
fiscal years; (2) what challenges, if any, states face in managing 
Trade Adjustment Assistance (TAA) training funds; and (3) the extent to 
which workers use the TAA wage insurance and health coverage benefits 
and the factors, if any, that limit participation. To address these 
questions, we conducted a Web-based survey of all 46 states that 
received an initial allocation of TAA training funds in federal fiscal 
year 2006 (October 1, 2005, to September 30, 2006). We also conducted a 
supplementary survey to collect additional financial information on 
fiscal year 2006 training expenditures and obligations. In addition, we 
interviewed Labor and IRS officials and visited state and local 
officials in four states--California, Massachusetts, Michigan, and 
North Carolina. We also reviewed data from the Department of Labor and 
the Internal Revenue Service (IRS). We performed our work between 
August 2006 and May 2007 in accordance with generally accepted 
government auditing standards. 

Web-Based Survey: 

To gather information on the states' program and benefit participation 
and perceived challenges, we conducted a Web-based survey of states 
that received an initial TAA funding allocation for fiscal year 2006. 
The Web-based survey was conducted using a self-administered electronic 
questionnaire posted on the Web. We received completed surveys from all 
46 states. The practical difficulties of conducting any survey may 
introduce errors, commonly referred to as nonsampling errors. For 
example, difficulties in how a particular question is interpreted, in 
the sources of information that are available to respondents, or in how 
the data are entered into a database or were analyzed can introduce 
unwanted variability into a survey design. We took steps in the 
development of the questionnaires, the data collection, and the data 
analysis to minimize these nonsampling errors. For example, social 
science survey specialists designed the initial questionnaire in 
collaboration with GAO staff with subject matter expertise. The draft 
questionnaire was pretested with 3 states to ensure that the questions 
were relevant, clearly stated, and easy to comprehend. When the data 
were analyzed, an independent analyst checked all answers using a 
statistical program. Since the survey was a Web-based survey, 
respondents entered their answers directly into the electronic 
questionnaire. This eliminated the need to have the data keyed into a 
database, thus removing an additional source of error. 

Supplementary Survey: 

To gather information on states' fiscal year 2006 expenditures and 
obligations, we conducted a follow-up e-mail survey of the 46 states 
that received an initial TAA funding allocation. Prior to administering 
the survey, we pretested the content and format of the questionnaires 
with 3 states to determine whether (1) the surveys questions were 
clear, (2) the terms used were precise, and (3) respondents were able 
to provide the information we were seeking. We made changes to the 
content and format of the final questionnaire based on pretest results. 
The survey was sent out via e-mail to the TAA coordinators of the 46 
states that received an initial fiscal year 2006 allocation. We 
received completed surveys from all 46 states. 

Site Visits: 

We selected 4 states for site visits, using several criteria to select 
the states and local areas. First we considered such factors as: 

* the number of TAA certifications in the state in fiscal years 2005 
and 2006, 

* the estimated number of workers affected by TAA-certified layoffs, 

* the initial allocations of TAA training funds, 

* the industries in which TAA petitions were certified, and: 

* geographic dispersion. 

California, Michigan, and North Carolina were all among the top 10 
states in the first four factors, and Massachusetts was ranked within 
the top 15 states. In addition, we selected states that had a variety 
of affected industries. 

Within each of the 4 states, we then judgmentally selected one or two 
local areas for additional site visits. We considered factors such as: 

* the number of TAA certifications in the local area in fiscal years 
2005 and 2006, 

* the size of the layoffs that were TAA certified, 

* the industries in which TAA petitions were certified, and: 

* geographic proximity. 

We selected local areas that either had a large number of TAA 
certifications or dealt with one or more large layoffs (an estimate of 
300 or more people affected). We also chose local areas to provide a 
diverse set of industries. Finally, we considered geographic proximity 
of the local areas to the state capital and to each other, in order to 
minimize travel costs and time. 

Table 5: Locations Selected for Site Visits: 

Location: North Carolina; 
Fiscal years 2005-2006 certifications: 359; 
Large layoff: [Empty]; 
Affected industry: [Empty]. 

Location: Wilson; 
Fiscal years 2005-2006 certifications: 4; 
Large layoff: Yes; 
Affected industry: Tobacco processing, men's clothing. 

Location: California; 
Fiscal years 2005-2006 certifications: 229; 
Large layoff: [Empty]; 
Affected industry: [Empty]. 

Location: San Francisco; 
Fiscal years 2005-2006 certifications: 24; 
Large layoff: No; 
Affected industry: Apparel, textile mills. 

Location: San Jose/Campbell; 
Fiscal years 2005-2006 certifications: 4; 
Large layoff: Yes; 
Affected industry: Industrial machinery and computer equipment. 

Location: Santa Rosa; 
Fiscal years 2005-2006 certifications: 5; 
Large layoff: Yes; 
Affected industry: Measuring, analyzing, and controlling instruments. 

Location: Michigan; 
Fiscal years 2005-2006 certifications: 148; 
Large layoff: [Empty]; 
Affected industry: [Empty]. 

Location: Lansing; 
Fiscal years 2005-2006 certifications: 7; 
Large layoff: Yes; 
Affected industry: Sheet metal. 

Location: Sterling Heights; 
Fiscal years 2005-2006 certifications: 9; 
Large layoff: No; 
Affected industry: Fabricated metal, machine tools, motor vehicle 
parts, special dyes. 

Location: Massachusetts; 
Fiscal years 2005-2006 certifications: 84; 
Large layoff: [Empty]; 
Affected industry: [Empty]. 

Location: Fall River; 
Fiscal years 2005-2006 certifications: 18; 
Large layoff: Yes; 
Affected industry: Textile. 

Location: Springfield; 
Fiscal years 2005-2006 certifications: 2; 
Large layoff: Yes; 
Affected industry: Tools. 

Source: GAO and Department of Labor petitions data. 

[End of table] 

During our site visits to the states and local areas, we interviewed 
TAA officials about state policies and procedures for administering the 
program. We also interviewed Workforce Investment Act (WIA) officials 
and local one-stop operators to understand how services are provided to 
TAA participants, including the extent to which job search assistance, 
case management, and training are coordinated between the programs. 

Analysis of Labor's Petition Data: 

We analyzed Labor's data on petitions filed from fiscal years 2004 to 
2006. We assessed the reliability of key data by interviewing Labor 
officials knowledgeable about the data, observing a demonstration of 
the database, reviewing prior GAO assessments of the data, and 
conducting edit checks. For a small number of petitions, we identified 
logical inconsistencies or missing values in the data. We brought these 
issues to the attention of Labor officials and worked with them to 
correct the issues before conducting our analysis. In analyzing the 
number of petitions denied for TAA that were appealed to Labor, we did 
not include in our analysis petitions that were appealed only for a 
denial of Alternative Trade Adjustment Assistance (ATAA) wage insurance 
benefits. These petitions had been certified for TAA after Labor's 
initial investigation but denied for wage insurance benefits. In 
analyzing data on petitions that were appealed to the Court of 
International Trade, we compared Labor's data to Court documents. We 
determined that Labor's data on appeals to the Court were not complete. 
As a result, we supplemented Labor's data with a review of Court 
documents. At the time of our review, some petitions filed during 
fiscal years 2004 to 2006 may still have been undergoing an appeals 
process. Our analysis of petition decisions and appeals reflect the 
outcomes of petitions at the time of our review. Complete data on 
reasons petitions were denied were only available for fiscal year 2006 
because Labor only began to collect the data in 2005. As a result, we 
reported information on reasons petitions were denied for only fiscal 
year 2006. 

With regard to information on the number of workers estimated to be 
certified, the figures are based upon estimates of the number of 
workers affected by a layoff at the time that petitions are filed with 
the Department of Labor. At the time petitions are submitted, companies 
may not know exactly how many workers will be affected. We use these 
estimates because the Department of Labor does not collect information 
on the number of workers ultimately certified. We use these data to 
identify trends in the number of workers certified for TAA. They should 
not be relied upon to support precise numbers on workers certified for 
TAA. 

Despite these limitations, we determined that Labor's petitions data 
were sufficiently reliable for the purposes of this report, which was 
to provide information on trends in Labor's certification of petitions. 

Analysis of Labor's Quarterly Activity Reports: 

To determine the extent to which participants were enrolling in 
training, we reviewed Labor's quarterly reports on participants and 
services. We assessed the reliability of the data by reviewed prior GAO 
assessments of the data, interviewing Labor officials, and conducting 
manual tests of data for outliers or obvious errors. In our discussions 
with Labor officials, we determined that the data had some limitations, 
specifically due to Labor's lack of formal processes to ensure that the 
data were entered accurately. Despite these limitations, we determined 
that the data were sufficiently reliable for the purposes of this 
report, which was to provide information on aggregate trends. 

Analysis of Labor's Wage Insurance Data: 

To obtain information on the number of participants taking advantage of 
the wage insurance benefit, we analyzed Labor's data on the benefit 
from 2003 to 2006. We assessed the reliability of the data by 
interviewing Labor officials, reviewing Labor documentation, and 
conducting manual tests of data for outliers or obvious errors. Labor 
officials informed us that the data from 2003 to 2005 were collected 
through informal surveys implemented by Labor's regional offices, while 
the 2006 data were collected from states through a formal reporting 
system. We reviewed Labor's survey questions used to collect the data 
from 2003 to 2005 and determined that the questions were asked 
similarly across the time period and included data elements found in 
the Alternative Trade Adjustment Assistance Activity Report (ATAAAR), 
the formal reporting tool established in 2006. We also reviewed Labor's 
instructions to states on implementing the ATAAAR and found no errors 
in our manual data testing. We determined that the data elements 
pertinent to this report were sufficiently reliable for our purposes of 
reporting general national trends in participation from 2003 to 2006. 
However, the data from 2003 to 2005 should not be used to report 
precise numbers of wage insurance participants in that time period. 

Analysis of Health Coverage Tax Credit Data: 

We also analyzed IRS's data on health coverage tax credit participants 
and expenditures. In our 2004 Health Coverage Tax Credit (HCTC) report, 
we studied the health coverage benefit for TAA participants and Pension 
Benefit Guarantee Corporation (PBGC) beneficiaries. In this report, we 
examined TAA participation in the health coverage benefit only. We 
assessed the reliability of the data by reviewing prior GAO assessments 
of the data, interviewing IRS officials, and conducting manual tests of 
the data for outliers or obvious errors. We reviewed several data 
reliability documents for the 2004 report and found that there were no 
significant data reliability problems with IRS's data for the prior 
report. We interviewed IRS officials to obtain updated data reliability 
information for the health coverage benefit data and found that there 
have been no major changes in HCTC data collection or storage methods 
since the 2004 report that would affect the reliability of the data. In 
addition we found no outliers or obvious errors in our manual testing 
of the data, and we deemed the data to be sufficiently reliable for our 
reporting purposes. 

Analysis of Final Decisions Rendered by U.S. Court of International 
Trade, Fiscal Years 2005 and 2006: 

In order to report on the decisions rendered by the Court of 
International Trade on appeals from Department of Labor determinations, 
we accessed, with permission, the Court of International Trade Live 
Database. We searched that database for cases in the category of 
"Denial of Certification for Trade Adjustment Assistance" using the 
parameters of closed cases by fiscal year. We did not analyze cases 
related to Trade Adjustment Assistance for Farmers and our summary of 
cases does not include appeals dismissed by the Court on procedural 
grounds. 

[End of section] 

Appendix II: Administrative Costs Related to the Health Coverage 
Benefit: 

Two types of program costs are associated with the Health Coverage Tax 
Credit program--IRS administrative costs and Treasury outlays for the 
65 percent share of taxpayers' premiums for qualified health plans. 
Administrative costs for the health coverage benefit are half of 
earlier levels. They have decreased from about $40 million in fiscal 
year 2003 to about $20 million in fiscal year 2006, with contractor 
costs declining as the HCTC Program Office moved from program setup to 
maintenance of program operations. IRS costs have remained relatively 
stable at approximately $3 million per fiscal year. Overall Treasury 
payments for the health coverage benefit have increased from $46 
million in fiscal year 2003 to $92 million in fiscal year 2005. During 
this time period, advance credit payments have increased, and end-of- 
year credit payments have decreased. 

Table 6: HCTC Administrative Costs for Fiscal Years 2003 to 2006 and 
Payments for Tax Years 2003 to 2006: 

Administrative costs. 

Contractor costs; 
Fiscal year 2003: $36,223,608; 
Fiscal year 2004: $38,575,881; 
Fiscal year 2005: $22,496,239; 
Fiscal year 2006: $16,851,467. 

IRS costs; 
Fiscal year 2003: 3,366,585; 
Fiscal year 2004: 3,064,497; 
Fiscal year 2005: 3,352,000; 
Fiscal year 2006: 3,156,433. 

Total; 
Fiscal year 2003: $39,590,193; 
Fiscal year 2004: $41,640,378; 
Fiscal year 2005: $25,848,239; 
Fiscal year 2006: $20,007,900. 

Health Coverage Tax Credit payments[A]. 

Advance credit; 
Fiscal year 2003: $10,000,000; 
Fiscal year 2004: $55,000,000; 
Fiscal year 2005: $71 ,000,000; 
Fiscal year 2006: $80,000,000. 

End-of-year credit; 
Fiscal year 2003: 36,000,000; 
Fiscal year 2004: 25,000,000; 
Fiscal year 2005: 21,000,000; 
Fiscal year 2006: Data not yet available. 

Total; 
Fiscal year 2003: $46,000,000; 
Fiscal year 2004: $80,000,000; 
Fiscal year 2005: $92,000,000; 
Fiscal year 2006: Data not yet available. 

Source: IRS data. 

[A] IRS could not provide more precise numbers for the HCTC benefit 
payments. Data include both TAA participants and those from the Pension 
Benefit Guaranty Corporation because IRS cannot readily disaggregate 
them. 

[End of table] 

[End of section] 

Appendix III: Top Industries Certified during Fiscal Years 2004 to 
2006: 

Rank: 1; 
2004: Apparel and other finished products made from fabrics and similar 
materials; 
2005: Textile mill products; 
2006: Textile mill products. 

Rank: 2; 
2004: Textile mill products; 
2005: Electronic and other electrical equipment and components, except 
computer; 
2006: Apparel and other finished products made from fabrics and similar 
materials. 

Rank: 3; 
2004: Electronic and other electrical equipment and components, except 
computer; 
2005: Apparel and other finished products made from fabrics and similar 
materials; 
2006: Electronic and other electrical equipment and components, except 
computer. 

Rank: 4; 
2004: Industrial and commercial machinery and computer equipment; 
2005: Industrial and commercial machinery and computer equipment; 
2006: Industrial and commercial machinery and computer equipment. 

Rank: 5; 
2004: Fabricated metal products, except machinery and transportation 
equipment; 
2005: Measuring, analyzing, and controlling instruments; photographic, 
medical, and optical goods; watches and clocks; 
2006: Transportation equipment. 

Rank: 6; 
2004: Lumber and wood products, except furniture; 
2005: Fabricated metal products, except machinery and transportation 
equipment; 
2006: Fabricated metal products, except machinery and transportation 
equipment. 

Rank: 7; 
2004: Transportation equipment; 
2005: Transportation equipment; 
2006: Measuring and analyzing, and controlling instruments; 
photographic, medical, and optical goods; watches and clocks. 

Rank: 8; 
2004: Primary metal industries; 
2005: Furniture and fixtures; 
2006: Furniture and fixtures. 

Rank: 9; 
2004: Chemicals and allied products; 
2005: Rubber and miscellaneous plastics products; 
2006: Rubber and miscellaneous plastics products. 

Rank: 10; 
2004: Rubber and miscellaneous plastics products; 
2005: Chemicals and allied products; 
2006: Primary metal industries. 

Source: GAO analysis of Department of Labor petitions data. 

Note: This table presents the top industries in which petitions were 
certified at the two-digit level Standard Industrial Classification 
(SIC) System code. 

[End of table] 

[End of section] 

Appendix IV: Final Decisions Rendered by the U. S. Court of 
International Trade on Appealed Cases, Fiscal Years 2005 and 2006: 

If Labor denies a petition, workers have 60 days after notice of that 
determination to appeal to the Court of International Trade 
(CIT).[Footnote 21] The Court will affirm a decision supported by 
substantial evidence or, if necessary, remand the case to Labor for 
further investigation. Frequently, Labor asks the Court to remand the 
case so it can reconsider its decision--a voluntary remand. After a 
remand, Labor either confirms or reverses its original decision and 
resubmits the case to the Court. The Court, in turn, will either affirm 
Labor's decision or reverse it. The Court also may dismiss worker 
appeals for a variety of procedural reasons, such as lack of 
jurisdiction or a worker's failure to continue pursuing the appeal. 
These possible actions are listed below with the number of cases that 
fall into each category. The cases listed are final decisions of the 
Court that were issued in fiscal years 2005 and 2006. In many of these 
cases there were multiple remands. We described only the result after 
the final remand. 

Table 8: Final Decisions Rendered by CIT for Fiscal Years 2005 and 
2006: 

Decision category: Reversed Labor's decision after remand; 
2005: 0; 
2006: 0. 

Decision category: Affirmed Labor's original decision without remand; 
2005: 0; 
2006: 0. 

Decision category: Affirmed Labor's reversal of original decision after 
remand; 
2005: 5[A]; 
2006: 8. 

Decision category: Affirmed Labor's negative decision after remand; 
2005: 1; 
2006: 2. 

Decision category: Dismissed; 
2005: 7; 
2006: 8. 

Source: GAO analysis of CIT cases. 

[A] Two cases were consolidated and addressed under one decision. 

[End of table] 

Each of the CIT case decisions is summarized below. 

2005 CIT Decisions: 

Affirming Labor's decision to reverse its original negative decision: 

Former Employees of Ericsson, Inc. v. U.S. Sec'y of Labor (No. 02-00809 
and 03-00389): 

Labor determined that workers did not produce an article. 

On voluntary remand, Labor determined that workers, who developed 
software, also supported production at affiliated software productions 
facility and as such, they did engage in activity related to production 
of an article. 

Former Employees of Getronics Wang Co., LLC v. U.S. Sec'y of Labor (No. 
03-00529): 

Labor determined that workers did not produce an article and workers 
were not service providers in direct support of a Trade Adjustment 
Assistance-certified firm. 

On voluntary remand, Labor determined that the service workers were 
eligible to apply for TAA benefits based on its finding that the 
workers were colocated with a trade-certified firm, and that there was 
a contract between worker's firm and trade-certified firm. 

Former Employees of Cady Industries, Inc. v. U.S. Sec'y of Labor (No. 
04-00244): 

Labor determined that imports did not contribute importantly to worker 
separations and no shift of production to foreign source occurred. 

On voluntary remand, Labor determined that increased imports like or 
directly competitive contributed importantly to declines in sales or 
production and to total or partial separation of workers at the firm. 

Former Employees of Mohican Mills, Inc. v. U.S. Sec'y of Labor (No. 04- 
00255): 

Labor determined that imports did not contribute importantly to 
separation at subject firm and subject firm did not shift production 
abroad during relevant time period. 

On remand, Labor concluded that increased imports of articles like or 
directly competitive with those produced by the subject firm 
contributed importantly to worker separations and the sales or 
production declines at the subject firm. 

Former Employees of Hollister, Inc v. U.S. Sec'y of Labor (No. 04- 
00262): 

Labor denied a request for Alternative Trade Adjustment Assistance to 
be included in a TAA petition because the application was not filed 
with the TAA petition. 

On voluntary remand, Labor reversed its decision based on a new 
guidance letter that provided that worker groups that whose petitions 
were still in process at the time of the implementation of the ATAA 
program on August 6, 2003, and certified worker groups who filed 
petitions that did not include an option to apply for ATAA may request 
group ATAA certification after the filing of a TAA petition. 

Affirming Labor's negative decision after remand: 

Former Employees of Sun Apparel of Texas v. U.S. Sec'y of Labor (No. 03-
00625): 

In its original determination and on remand, Labor determined that 
worker layoffs were not attributable to shifts in production or 
increased imports. 

2006 CIT Decisions: 

Affirming Labor's decision to reverse its original decision: 

Former Employees of Electronic Data Systems Corp. v. U.S. Sec'y of 
Labor (No. 03-00373): 

Labor determined that workers producing computer programs, job control 
language, database support, and documents were performing information 
technology services and did not produce or support the production of an 
article. 

On remand, Labor revised its policy to acknowledge that "there are 
tangible and intangible articles and….that the production of intangible 
articles can be distinguished from the provision of services. Software 
and similar intangible goods that would have been considered articles 
for the purposes of the Trade Act if embodied in a physical medium will 
now be considered to be articles regardless of their method of 
transfer." 

Former Employees of IBM Corp. Global Services v. U.S. Sec'y of Labor 
(No. 03-00656): 

Labor determined that workers who were software developers who wrote 
and tested computer software did not produce an article. 

On voluntary remand, Labor determined that in light of policy change in 
Electronic Data Systems case, workers did produce an article. Labor 
stated that "[t}he Department stresses that it will continue to 
implement the longstanding precedent that firms must produce an article 
to be certified under the Trade Act. This determination is not altered 
by the fact that the provision of a service may result in the 
incidental creation of an article. Because the revised policy may have 
implications beyond this case of which the Department is not fully 
cognizant, it will be further developed in rulemaking." 

Former Employees of Computer Sciences Corp. v. U.S. Sec'y of Labor (No. 
04-00149): 

Labor determined that workers providing business and information 
consulting, specialized application software, and technology 
outsourcing support to customers in the financial services industry did 
not produce an article and that there was no shift in production or 
import competition. 

On remand, in accordance with its new policy, Labor determined that the 
firm produced an intangible article (financial software) that "would 
have been considered an article if embodied in a physical medium, that 
employment at the subject facility declined during the relevant period, 
that CSC increased imports of software like or directly competitive 
with that produced at the subject facility." 

Former Employees of BMC Software, Inc. v. U.S. Sec'y of Labor (No. 04- 
00229): 

Labor determined that the workers, who were described by their employer 
as software designers, did not produce an article. 

On voluntary remand, Labor found that the workers were TAA eligible 
since the firm mass-replicated software and packaged "off the shelf" 
applications mass-replicated on various media. 

Former Employees of Gale Group v. U.S. Sec'y of Labor (No. 04-00374): 

Labor determined that workers who performed electronic indexing 
services did not produce an article. 

On voluntary remand, Labor found that the workers produced an 
intangible product and certified them as eligible to apply for TAA 
benefits. 

Former Employees of Dana Undies v. U.S. Sec'y of Labor (No. 04-00615): 

Labor determined that workers were not eligible for certification 
because they were separated more than 1 year prior to the date of the 
filing of the petition. 

On voluntary remand, Labor found that through a series of 
miscommunications the workers were led to believe they would not be 
eligible for TAA benefits, and therefore it was appropriate to 
investigate whether the workers were in fact eligible to apply for TAA 
and ATAA benefits. Labor found that workers were in fact eligible to 
apply for both benefits. 

Former Employees of CTS Comm. Components v. U.S. Sec'y of Labor (No. 05-
00372): 

Labor determined that workers were not eligible for benefits since 
there was no increase in imports or shift of production. 

On voluntary remand, Labor found that increased imports of like or 
directly competitive products contributed importantly to the total or 
partial separation of a significant number of workers. 

Former Employees of Lands' End Business Outfitters v. U.S. Sec'y of 
Labor (No. 09-00517): 

Labor determined that workers who produced digitized embroidery designs 
did not produce an article. 

On voluntary remand, Labor, in accordance with its new policy, found 
that the workers produced an intangible article and were therefore 
eligible to apply for TAA benefits. 

Decisions affirming Labor's negative decision after remand: 

Former Employees of Murray Engineering v. U.S. Sec'y of Labor (No. 03- 
00219): 

Labor determined that no article was produced. On remand, Labor 
determined that workers were not eligible for TAA benefits because, to 
the extent there were imports of articles in the designs' chain of 
production, such articles were not "directly competitive" with the 
designs themselves. The CIT affirmed this decision on June 28, 2005, 
and on November 9, 2005, also found that the workers were ineligible 
for benefits because they were separated more than 1 year before the 
date of the first petition. 

Former Employees of Gateway Country Stores v. U.S. Sec'y of Labor (No. 
04-00588): 

Labor determined that workers did not produce an article. 

On voluntary remand, Labor additionally determined that workers were 
not eligible because they had not lost their jobs due to the company 
shifting its production overseas. The CIT affirmed Labor's 
determination on remand on the second basis for denial. 

[End of section] 

Appendix V: Occupations for Which TAA Participants Most Frequently 
Received Training in Fiscal Year 2006 by State: 

State: Alabama; 
Most frequently trained occupation: Clerical; 
Second most frequently trained occupation: Computer operator; 
Third most frequently trained occupation: Medical assistant. 

State: Alaska; 
Most frequently trained occupation: Truck driver; 
Second most frequently trained occupation: Marine trades; 
Third most frequently trained occupation: Nursing. 

State: Arizona; 
Most frequently trained occupation: Heating, ventilation, and air 
conditioning (HVAC); 
Second most frequently trained occupation: Medical assistant; 
Third most frequently trained occupation: Teacher's aide. 

State: Arkansas; 
Most frequently trained occupation: Clerical; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: Truck driver. 

State: California; 
Most frequently trained occupation: Clerical; 
Second most frequently trained occupation: Medical assistant; 
Third most frequently trained occupation: Auto mechanic. 

State: Colorado; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Bookkeeping/accounting; 
Third most frequently trained occupation: Truck driver. 

State: Connecticut; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: Truck driver. 

State: Florida; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: Computer systems 
administrator. 

State: Georgia; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: Clerical. 

State: Idaho; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: Truck driver. 

State: Illinois; 
Most frequently trained occupation: HVAC; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: Clerical. 

State: Indiana; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: N/A. 

State: Iowa; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: HVAC. 

State: Kansas; 
Most frequently trained occupation: HVAC; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: Computer repair. 

State: Kentucky; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: Truck driver. 

State: Louisiana; 
Most frequently trained occupation: Truck driver; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: HVAC. 

State: Maine; 
Most frequently trained occupation: Clerical; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: Nursing. 

State: Maryland; 
Most frequently trained occupation: Truck driver; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: HVAC. 

State: Massachusetts; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: HVAC; 
Third most frequently trained occupation: Truck driver. 

State: Michigan; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Medical assistant; 
Third most frequently trained occupation: HVAC. 

State: Minnesota; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Medical assistant; 
Third most frequently trained occupation: Clerical. 

State: Mississippi; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: Truck driver. 

State: Missouri; 
Most frequently trained occupation: Clerical; 
Second most frequently trained occupation: HVAC; 
Third most frequently trained occupation: Medical assistant. 

State: Montana; 
Most frequently trained occupation: N/A; 
Second most frequently trained occupation: N/A; 
Third most frequently trained occupation: N/A. 

State: Nebraska; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: HVAC; 
Third most frequently trained occupation: Clerical. 

State: Nevada; 
Most frequently trained occupation: Medical billing/ coding; 
Second most frequently trained occupation: N/A; 
Third most frequently trained occupation: N/A. 

State: New Hampshire; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: Nursing. 

State: New Jersey; 
Most frequently trained occupation: Truck driver; 
Second most frequently trained occupation: Medical assistant; 
Third most frequently trained occupation: HVAC. 

State: New Mexico; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Bookkeeping/ accounting; 
Third most frequently trained occupation: Computer operator. 

State: New York; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: Machinist. 

State: North Carolina; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Medical secretary; 
Third most frequently trained occupation: Teacher's aide. 

State: Ohio; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Computer operator; 
Third most frequently trained occupation: Medical assistant. 

State: Oklahoma; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: HVAC; 
Third most frequently trained occupation: Aircraft mechanic. 

State: Oregon; 
Most frequently trained occupation: Truck driver; 
Second most frequently trained occupation: Clerical; 
Third most frequently trained occupation: Heavy equipment operator. 

State: Pennsylvania; 
Most frequently trained occupation: Electrician; 
Second most frequently trained occupation: Bookkeeping/accounting; 
Third most frequently trained occupation: Clerical. 

State: Rhode Island; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: Computer operator. 

State: South Carolina; 
Most frequently trained occupation: Truck driver; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: Computer operator. 

State: South Dakota; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Business administration; 
Third most frequently trained occupation: Medical assistant. 

State: Tennessee; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Truck driver; 
Third most frequently trained occupation: HVAC. 

State: Texas; 
Most frequently trained occupation: Medical assistant; 
Second most frequently trained occupation: Nursing; 
Third most frequently trained occupation: Truck driver. 

State: Utah; 
Most frequently trained occupation: N/A; 
Second most frequently trained occupation: N/A; 
Third most frequently trained occupation: N/A. 

State: Vermont; 
Most frequently trained occupation: N/A; 
Second most frequently trained occupation: N/A; 
Third most frequently trained occupation: N/A. 

State: Virginia; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Medical assistant; 
Third most frequently trained occupation: Truck driver. 

State: Washington; 
Most frequently trained occupation: Nursing; 
Second most frequently trained occupation: Bookkeeping/accounting; 
Third most frequently trained occupation: Medical assistant. 

State: West Virginia; 
Most frequently trained occupation: HVAC; 
Second most frequently trained occupation: Computer operator; 
Third most frequently trained occupation: Carpenter. 

State: Wisconsin; 
Most frequently trained occupation: N/A; 
Second most frequently trained occupation: N/A; 
Third most frequently trained occupation: N/A. 

Source: GAO analysis of survey responses. 

Note: N/A means the state did not provide a response to this question. 

[End of table] 

[End of section] 

Appendix VI Estimated Number of Workers Certified by State during 
Fiscal Years 2004 to 2006: 

State: Alaska; 
2004: 533; 
2005: 218; 
2006: 266; 
Percentage change, 2004 to 2005: -59; 
Percentage change, 2005 to 2006: 22. 

State: Alabama; 
2004: 3,213; 
2005: 2,000; 
2006: 5,284; 
Percentage change, 2004 to 2005: -38; 
Percentage change, 2005 to 2006: 164. 

State: Arizona; 
2004: 1,944; 
2005: 651; 
2006: 943; 
Percentage change, 2004 to 2005: -67; 
Percentage change, 2005 to 2006: 45. 

State: Arkansas; 
2004: 1,438; 
2005: 1,614; 
2006: 2,712; 
Percentage change, 2004 to 2005: 12; 
Percentage change, 2005 to 2006: 68. 

State: California; 
2004: 7,988; 
2005: 10,580; 
2006: 12,099; 
Percentage change, 2004 to 2005: 32; 
Percentage change, 2005 to 2006: 14. 

State: Colorado; 
2004: 682; 
2005: 1,676; 
2006: 1,159; 
Percentage change, 2004 to 2005: 146; 
Percentage change, 2005 to 2006: -31. 

State: Connecticut; 
2004: 2,190; 
2005: 498; 
2006: 1,160; 
Percentage change, 2004 to 2005: -77; 
Percentage change, 2005 to 2006: 133. 

State: Delaware; 
2004: 402; 
2005: 232; 
2006: 149; 
Percentage change, 2004 to 2005: -42; 
Percentage change, 2005 to 2006: -36. 

State: District of Columbia; 
2004: 4; 
2005: 0; 
2006: 0; 
Percentage change, 2004 to 2005: -100; 
Percentage change, 2005 to 2006: 0. 

State: Florida; 
2004: 1,310; 
2005: 1,488; 
2006: 887; 
Percentage change, 2004 to 2005: 14; 
Percentage change, 2005 to 2006: -40. 

State: Georgia; 
2004: 5,539; 
2005: 4,562; 
2006: 6,846; 
Percentage change, 2004 to 2005: -18; 
Percentage change, 2005 to 2006: 50. 

State: Hawaii; 
2004: 1; 
2005: 149; 
2006: 0; 
Percentage change, 2004 to 2005: 14,800; 
Percentage change, 2005 to 2006: -100. 

State: Iowa; 
2004: 932; 
2005: 1,044; 
2006: 1,566; 
Percentage change, 2004 to 2005: 12; 
Percentage change, 2005 to 2006: 49. 

State: Idaho; 
2004: 309; 
2005: 212; 
2006: 378; 
Percentage change, 2004 to 2005: -31; 
Percentage change, 2005 to 2006: 78. 

State: Illinois; 
2004: 6,625; 
2005: 7,105; 
2006: 3,592; 
Percentage change, 2004 to 2005: 7; 
Percentage change, 2005 to 2006: -49. 

State: Indiana; 
2004: 4,442; 
2005: 5,577; 
2006: 3,255; 
Percentage change, 2004 to 2005: 26; 
Percentage change, 2005 to 2006: -42. 

State: Kansas; 
2004: 4,117; 
2005: 75; 
2006: 721; 
Percentage change, 2004 to 2005: -98; 
Percentage change, 2005 to 2006: 861. 

State: Kentucky; 
2004: 1,887; 
2005: 2,707; 
2006: 3,405; 
Percentage change, 2004 to 2005: 43; 
Percentage change, 2005 to 2006: 26. 

State: Louisiana; 
2004: 560; 
2005: 379; 
2006: 41; 
Percentage change, 2004 to 2005: -32; 
Percentage change, 2005 to 2006: -89. 

State: Maine; 
2004: 1,125; 
2005: 492; 
2006: 703; 
Percentage change, 2004 to 2005: -56; 
Percentage change, 2005 to 2006: 43. 

State: Maryland; 
2004: 644; 
2005: 835; 
2006: 1,298; 
Percentage change, 2004 to 2005: 30; 
Percentage change, 2005 to 2006: 55. 

State: Massachusetts; 
2004: 3,945; 
2005: 2,326; 
2006: 2,326; 
Percentage change, 2004 to 2005: -41; 
Percentage change, 2005 to 2006: 0. 

State: Michigan; 
2004: 7,059; 
2005: 5,014; 
2006: 8,562; 
Percentage change, 2004 to 2005: -29; 
Percentage change, 2005 to 2006: 71. 

State: Minnesota; 
2004: 1,554; 
2005: 2,118; 
2006: 634; 
Percentage change, 2004 to 2005: 36; 
Percentage change, 2005 to 2006: -70. 

State: Mississippi; 
2004: 2,308; 
2005: 968; 
2006: 1,937; 
Percentage change, 2004 to 2005: -58; 
Percentage change, 2005 to 2006: 100. 

State: Missouri; 
2004: 1,275; 
2005: 3,230; 
2006: 2,301; 
Percentage change, 2004 to 2005: 153; 
Percentage change, 2005 to 2006: -29. 

State: Montana; 
2004: 246; 
2005: 282; 
2006: 0; 
Percentage change, 2004 to 2005: 15; 
Percentage change, 2005 to 2006: -100. 

State: Nebraska; 
2004: 895; 
2005: 280; 
2006: 153; 
Percentage change, 2004 to 2005: -69; 
Percentage change, 2005 to 2006: -45. 

State: Nevada; 
2004: 165; 
2005: 314; 
2006: 145; 
Percentage change, 2004 to 2005: 90; 
Percentage change, 2005 to 2006: -54. 

State: New Hampshire; 
2004: 612; 
2005: 941; 
2006: 1,308; 
Percentage change, 2004 to 2005: 54; 
Percentage change, 2005 to 2006: 39. 

State: New Jersey; 
2004: 3,155; 
2005: 2,130; 
2006: 1,406; 
Percentage change, 2004 to 2005: -32; 
Percentage change, 2005 to 2006: -34. 

State: New Mexico; 
2004: 276; 
2005: 73; 
2006: 49; 
Percentage change, 2004 to 2005: -74; 
Percentage change, 2005 to 2006: -33. 

State: New York; 
2004: 4,804; 
2005: 4,584; 
2006: 3,844; 
Percentage change, 2004 to 2005: -5; 
Percentage change, 2005 to 2006: -16. 

State: North Carolina; 
2004: 16,783; 
2005: 12,279; 
2006: 11,143; 
Percentage change, 2004 to 2005: -27; 
Percentage change, 2005 to 2006: 
-9. 

State: North Dakota; 
2004: 103; 
2005: 0; 
2006: 0; 
Percentage change, 2004 to 2005: -100; 
Percentage change, 2005 to 2006: 0. 

State: Ohio; 
2004: 7,574; 
2005: 3,851; 
2006: 6,766; 
Percentage change, 2004 to 2005: -49; 
Percentage change, 2005 to 2006: 76. 

State: Oklahoma; 
2004: 2,662; 
2005: 642; 
2006: 2,886; 
Percentage change, 2004 to 2005: -76; 
Percentage change, 2005 to 2006: 350. 

State: Oregon; 
2004: 4,692; 
2005: 1,389; 
2006: 1,177; 
Percentage change, 2004 to 2005: -70; 
Percentage change, 2005 to 2006: -15. 

State: Pennsylvania; 
2004: 7,798; 
2005: 8,342; 
2006: 5,422; 
Percentage change, 2004 to 2005: 7; 
Percentage change, 2005 to 2006: -35. 

State: Puerto Rico; 
2004: 1,520; 
2005: 234; 
2006: 0; 
Percentage change, 2004 to 2005: -85; 
Percentage change, 2005 to 2006: -100. 

State: Rhode Island; 
2004: 273; 
2005: 850; 
2006: 1,128; 
Percentage change, 2004 to 2005: 211; 
Percentage change, 2005 to 2006: 33. 

State: South Carolina; 
2004: 6,248; 
2005: 6,534; 
2006: 4,986; 
Percentage change, 2004 to 2005: 5; 
Percentage change, 2005 to 2006: - 24. 

State: South Dakota; 
2004: 1,436; 
2005: 103; 
2006: 276; 
Percentage change, 2004 to 2005: -93; 
Percentage change, 2005 to 2006: 168. 

State: Tennessee; 
2004: 4,614; 
2005: 5,660; 
2006: 5,333; 
Percentage change, 2004 to 2005: 23; 
Percentage change, 2005 to 2006: -6. 

State: Texas; 
2004: 5,813; 
2005: 6,205; 
2006: 2,461; 
Percentage change, 2004 to 2005: 7; 
Percentage change, 2005 to 2006: -60. 

State: Utah; 
2004: 486; 
2005: 393; 
2006: 145; 
Percentage change, 2004 to 2005: -19; 
Percentage change, 2005 to 2006: -63. 

State: Vermont; 
2004: 718; 
2005: 392; 
2006: 508; 
Percentage change, 2004 to 2005: -45; 
Percentage change, 2005 to 2006: 30. 

State: Virginia; 
2004: 4,427; 
2005: 2,176; 
2006: 3,917; 
Percentage change, 2004 to 2005: -51; 
Percentage change, 2005 to 2006: 80. 

State: Washington; 
2004: 7,568; 
2005: 1,227; 
2006: 727; 
Percentage change, 2004 to 2005: -84; 
Percentage change, 2005 to 2006: -41. 

State: West Virginia; 
2004: 629; 
2005: 750; 
2006: 1,349; 
Percentage change, 2004 to 2005: 19; 
Percentage change, 2005 to 2006: 80. 

State: Wisconsin; 
2004: 4,434; 
2005: 2,864; 
2006: 2,840; 
Percentage change, 2004 to 2005: -35; 
Percentage change, 2005 to 2006: -1. 

State: Wyoming; 
2004: 26; 
2005: 0; 
2006: 0; 
Percentage change, 2004 to 2005: -100; 
Percentage change, 2005 to 2006: 0. 

Source: Department of Labor data. 

Note: The data used for this table are estimates of workers certified 
as eligible for TAA, based on estimates of the number of affected 
workers submitted by companies at the time TAA petitions are filed with 
the Department of Labor. At the time petitions are submitted, companies 
may not know exactly how many workers will be affected. We use these 
estimates because the Department of Labor does not collect data on the 
number of workers ultimately certified. 

[End of table] 

[End of section] 

Appendix VII: Percentage of Fiscal Year 2006 Training Funds Expended 
and Obligated by State: 

We surveyed the 46 states that initially received training funds in 
fiscal year 2006 to determine of the total training funds they received 
in fiscal year 2006, how much was actually used, that is, spent or 
obligated, during the year. We received responses from all 46 states. 

Table 8: Percentage of Fiscal Year 2006 Training Funds Spent or 
Obligated, by State: 

State: Alabama; 
Initial training funds allocated: $2,642,640; 
Reserve training funds requested: 0; 
End-of-year distribution: $279,117; 
Total training funds available: $2,921,757; 
Total training funds used: $1,012,383; 
Percentage used: 34.6. 

State: Alaska; 
Initial training funds allocated: 429,982; 
Reserve training funds requested: 0; 
End-of-year distribution: 45,415; 
Total training funds available: 475,397; 
Total training funds used: 255,996; 
Percentage used: 53.8. 

State: Arizona; 
Initial training funds allocated: 2,440,988; 
Reserve training funds requested: 0; 
End-of-year distribution: 257,818; 
Total training funds available: 2,698,806; 
Total training funds used: 0; 
Percentage used: 0. 

State: Arkansas; 
Initial training funds allocated: 1,750,711; 
Reserve training funds requested: 0; 
End-of-year distribution: 184,911; 
Total training funds available: 1,935,622; 
Total training funds used: 220,683; 
Percentage used: 11.4. 

State: California; 
Initial training funds allocated: 6,642,537; 
Reserve training funds requested: 0; 
End-of-year distribution: 701,588; 
Total training funds available: 7,344,125; 
Total training funds used: 6,462,920; 
Percentage used: 88.0. 

State: Colorado; 
Initial training funds allocated: 1,426,889; 
Reserve training funds requested: 0; 
End-of-year distribution: 150,709; 
Total training funds available: 1,577,598; 
Total training funds used: 1,031,127; 
Percentage used: 65.4. 

State: Connecticut; 
Initial training funds allocated: 1,500,746; 
Reserve training funds requested: 0; 
End-of-year distribution: 158,510; 
Total training funds available: 1,659,256; 
Total training funds used: 1,651,057; 
Percentage used: 99.5. 

State: Florida; 
Initial training funds allocated: 3,350,544; 
Reserve training funds requested: 0; 
End-of-year distribution: 353,886; 
Total training funds available: 3,704,430; 
Total training funds used: 0; 
Percentage used: 0. 

State: Georgia; 
Initial training funds allocated: 1,559,104; 
Reserve training funds requested: 0; 
End-of-year distribution: 164,673; 
Total training funds available: 1,723,777; 
Total training funds used: 2,160,593; 
Percentage used: 125.3. 

State: Idaho; 
Initial training funds allocated: 2,390,380; 
Reserve training funds requested: 0; 
End-of-year distribution: 252,473; 
Total training funds available: 2,642,853; 
Total training funds used: 0; 
Percentage used: 0. 

State: Illinois; 
Initial training funds allocated: 4,696,350; 
Reserve training funds requested: $3,000,000; 
End-of-year distribution: 812,893; 
Total training funds available: 8,509,243; 
Total training funds used: 5,622,237; 
Percentage used: 66.1. 

State: Indiana; 
Initial training funds allocated: 4,780,198; 
Reserve training funds requested: 1,094,016; 
End-of-year distribution: 620,438; 
Total training funds available: 6,494,652; 
Total training funds used: 6,717,473; 
Percentage used: 103.4. 

State: Iowa; 
Initial training funds allocated: 2,835,940; 
Reserve training funds requested: 1,654,272; 
End-of-year distribution: 505,651; 
Total training funds available: 4,995,863; 
Total training funds used: 11,470,624; 
Percentage used: 229.6. 

State: Kansas; 
Initial training funds allocated: 2,775,736; 
Reserve training funds requested: 0; 
End-of-year distribution: 293,175; 
Total training funds available: 3,068,911; 
Total training funds used: 19,854; 
Percentage used: 0.6. 

State: Kentucky; 
Initial training funds allocated: 3,705,162; 
Reserve training funds requested: 1,343,232; 
End-of-year distribution: 533,214; 
Total training funds available: 5,581,608; 
Total training funds used: 0; 
Percentage used: 0. 

State: Louisiana; 
Initial training funds allocated: 612,573; 
Reserve training funds requested: 0; 
End-of-year distribution: 64,700; 
Total training funds available: 677,273; 
Total training funds used: 688,205; 
Percentage used: 101.6. 

State: Maine; 
Initial training funds allocated: 4,021,621; 
Reserve training funds requested: 0; 
End-of-year distribution: 424,766; 
Total training funds available: 4,446,387; 
Total training funds used: 4,021,621; 
Percentage used: 90.4. 

State: Maryland; 
Initial training funds allocated: 525,184; 
Reserve training funds requested: 0; 
End-of-year distribution: 55,470; 
Total training funds available: 580,654; 
Total training funds used: 163,098; 
Percentage used: 28.1. 

State: Massachusetts; 
Initial training funds allocated: 5,600,876; 
Reserve training funds requested: 0; 
End-of-year distribution: 591,568; 
Total training funds available: 6,192,444; 
Total training funds used: 3,582,391; 
Percentage used: 57.9. 

State: Michigan; 
Initial training funds allocated: 5,774,380; 
Reserve training funds requested: 5,477,336; 
End-of-year distribution: 1,183,131; 
Total training funds available: 12,434,847; 
Total training funds used: 12,690,790; 
Percentage used: 102.1. 

State: Minnesota; 
Initial training funds allocated: 4,005,739; 
Reserve training funds requested: 0; 
End-of-year distribution: 423,088; 
Total training funds available: 4,428,827; 
Total training funds used: 0; 
Percentage used: 0. 

State: Mississippi; 
Initial training funds allocated: 2,076,016; 
Reserve training funds requested: 0; 
End-of-year distribution: 219,270; 
Total training funds available: 2,295,286; 
Total training funds used: 1,089,514; 
Percentage used: 47.5. 

State: Missouri; 
Initial training funds allocated: 4,244,810; 
Reserve training funds requested: 0; 
End-of-year distribution: 448,339; 
Total training funds available: 4,693,149; 
Total training funds used: 4,577,433; 
Percentage used: 97.5. 

State: Montana; 
Initial training funds allocated: 1,109,440; 
Reserve training funds requested: 0; 
End-of-year distribution: 117,180; 
Total training funds available: 1,226,620; 
Total training funds used: 0; 
Percentage used: 0. 

State: Nebraska; 
Initial training funds allocated: 480,298; 
Reserve training funds requested: 0; 
End-of-year distribution: 50,729; 
Total training funds available: 531,027; 
Total training funds used: 323,606; 
Percentage used: 60.9. 

State: Nevada; 
Initial training funds allocated: 253,525; 
Reserve training funds requested: 0; 
End-of-year distribution: 26,777; 
Total training funds available: 280,302; 
Total training funds used: 21,983; 
Percentage used: 7.8. 

State: New Hampshire; 
Initial training funds allocated: 510,256; 
Reserve training funds requested: 0; 
End-of-year distribution: 53,893; 
Total training funds available: 564,149; 
Total training funds used: 478,217; 
Percentage used: 84.8. 

State: New Jersey; 
Initial training funds allocated: 1,698,502; 
Reserve training funds requested: 0; 
End-of-year distribution: 179,397; 
Total training funds available: 1,877,899; 
Total training funds used: 1,328,090; 
Percentage used: 70.7. 

State: New Mexico; 
Initial training funds allocated: 377,871; 
Reserve training funds requested: 124,740; 
End-of-year distribution: 53,086; 
Total training funds available: 555,697; 
Total training funds used: 666; 
Percentage used: 0.1. 

State: New York; 
Initial training funds allocated: 2,642,798; 
Reserve training funds requested: 0; 
End-of-year distribution: 279,134; 
Total training funds available: 2,921,932; 
Total training funds used: 0; 
Percentage used: 0. 

State: North Carolina; 
Initial training funds allocated: 9,918,421; 
Reserve training funds requested: 4,599,165; 
End-of-year distribution: 1,533,355; 
Total training funds available: 16,050,941; 
Total training funds used: 16,300,163; 
Percentage used: 101.6. 

State: Ohio; 
Initial training funds allocated: 4,579,676; 
Reserve training funds requested: 0; 
End-of-year distribution: 483,708; 
Total training funds available: 5,063,384; 
Total training funds used: 5,589,645; 
Percentage used: 110.4. 

State: Oklahoma; 
Initial training funds allocated: 1,523,960; 
Reserve training funds requested: 0; 
End-of-year distribution: 160,961; 
Total training funds available: 1,684,921; 
Total training funds used: 0; 
Percentage used: 0. 

State: Oregon; 
Initial training funds allocated: 5,242,514; 
Reserve training funds requested: 0; 
End-of-year distribution: 553,717; 
Total training funds available: 5,796,231; 
Total training funds used: 4,425,853; 
Percentage used: 76.4. 

State: Pennsylvania; 
Initial training funds allocated: 14,907,751; 
Reserve training funds requested: 0; 
End-of-year distribution: 1,574,565; 
Total training funds available: 16,482,316; 
Total training funds used: 14,309,068; 
Percentage used: 86.8. 

State: Rhode Island; 
Initial training funds allocated: 734,856; 
Reserve training funds requested: 886,380; 
End-of-year distribution: 171,236; 
Total training funds available: 1,792,472; 
Total training funds used: 1,609,649; 
Percentage used: 89.8. 

State: South Carolina; 
Initial training funds allocated: 4,366,585; 
Reserve training funds requested: 0; 
End-of-year distribution: 461,201; 
Total training funds available: 4,827,786; 
Total training funds used: 0; 
Percentage used: 0. 

State: South Dakota; 
Initial training funds allocated: 371,610; 
Reserve training funds requested: 376,512; 
End-of-year distribution: 79,017; 
Total training funds available: 827,139; 
Total training funds used: 697,419; 
Percentage used: 84.3. 

State: Tennessee; 
Initial training funds allocated: 2,681,734; 
Reserve training funds requested: 0; 
End-of-year distribution: 283,246; 
Total training funds available: 2,964,980; 
Total training funds used: 2,663,620; 
Percentage used: 89.8. 

State: Texas; 
Initial training funds allocated: 11,149,519; 
Reserve training funds requested: 0; 
End-of-year distribution: 1,177,618; 
Total training funds available: 12,327,137; 
Total training funds used: 2,541,173; 
Percentage used: 20.6. 

State: Utah; 
Initial training funds allocated: 1,814,367; 
Reserve training funds requested: 0; 
End-of-year distribution: 191,634; 
Total training funds available: 2,006,001; 
Total training funds used: 0; 
Percentage used: 0. 

State: Vermont; 
Initial training funds allocated: 296,965; 
Reserve training funds requested: 500,000; 
End-of-year distribution: 84,176; 
Total training funds available: 881,141; 
Total training funds used: 372,614; 
Percentage used: 42.3. 

State: Virginia; 
Initial training funds allocated: 5,712,451; 
Reserve training funds requested: 0; 
End-of-year distribution: 603,352; 
Total training funds available: 6,315,803; 
Total training funds used: 2,533,930; 
Percentage used: 40.1. 

State: Washington; 
Initial training funds allocated: 14,357,300; 
Reserve training funds requested: 0; 
End-of-year distribution: 1,516,426; 
Total training funds available: 15,873,726; 
Total training funds used: 0; 
Percentage used: 0. 

State: West Virginia; 
Initial training funds allocated: 1,038,332; 
Reserve training funds requested: 3,236,579; 
End-of-year distribution: 451,518; 
Total training funds available: 4,726,429; 
Total training funds used: 3,144,751; 
Percentage used: 66.5. 

State: Wisconsin; 
Initial training funds allocated: 9,442,163; 
Reserve training funds requested: 0; 
End-of-year distribution: 997,286; 
Total training funds available: 10,439,449; 
Total training funds used: 9,346,418; 
Percentage used: 89.5. 

Total: 46 states; 
Initial training funds allocated: $165,000,000; 
Reserve training funds requested: $22,292,232; 
End-of- year distribution: $19,808,015; 
Total training funds available: $207,100,247[A]; 
Total training funds used: $129,124,863; 
Percentage used: 62.3. 

Source: Department of Labor and GAO analysis of survey responses. 

[A] In fiscal year 2006, Labor distributed all $220,000,000 in training 
funds. The $207,100,247 identified in table 8 represents the amount of 
training funds provided to the 46 states that received initial training 
allocations in fiscal year 2006. During that year, Labor also 
distributed reserve training funds to Delaware, Puerto Rico, and 
Wyoming. In addition, in fiscal year 2006, Labor provided a special 
award of $250,000 to each state and Puerto Rico--a total of 
$12,750,000--to upgrade management information systems. 

[End of table] 

[End of section] 

Appendix VIII: Listing of Initial Allocations of Training Funds by 
State for Fiscal Years 2004 to 2007: 

State: Alabama; 
Initial allocation of training funds for fiscal years: 2004: 
$2,045,935; 
Initial allocation of training funds for fiscal years: 2005: 
$2,468,374; 
Initial allocation of training funds for fiscal years: 2006: 
$2,642,640; 
Initial allocation of training funds for fiscal years: 2007: 
$2,709,283. 

State: Alaska; 
Initial allocation of training funds for fiscal years: 2004: 468,904; 
Initial allocation of training funds for fiscal years: 2005: 398,625; 
Initial allocation of training funds for fiscal years: 2006: 429,982; 
Initial allocation of training funds for fiscal years: 2007: 441,342. 

State: Arizona; 
Initial allocation of training funds for fiscal years: 2004: 2,774,159; 
Initial allocation of training funds for fiscal years: 2005: 2,358,372; 
Initial allocation of training funds for fiscal years: 2006: 2,440,988; 
Initial allocation of training funds for fiscal years: 2007: 2,074,840. 

State: Arkansas; 
Initial allocation of training funds for fiscal years: 2004: 1,935,785; 
Initial allocation of training funds for fiscal years: 2005: 2,059,660; 
Initial allocation of training funds for fiscal years: 2006: 1,750,711; 
Initial allocation of training funds for fiscal years: 2007: 1,867,055. 

State: California; 
Initial allocation of training funds for fiscal years: 2004: 5,936,450; 
Initial allocation of training funds for fiscal years: 2005: 6,180,645; 
Initial allocation of training funds for fiscal years: 2006: 6,642,537; 
Initial allocation of training funds for fiscal years: 2007: 7,376,829. 

State: Colorado; 
Initial allocation of training funds for fiscal years: 2004: 1,616,942; 
Initial allocation of training funds for fiscal years: 2005: 1,678,693; 
Initial allocation of training funds for fiscal years: 2006: 1,426,889; 
Initial allocation of training funds for fiscal years: 2007: 1,212,856. 

State: Connecticut; 
Initial allocation of training funds for fiscal years: 2004: 2,076,861; 
Initial allocation of training funds for fiscal years: 2005: 1,765,584; 
Initial allocation of training funds for fiscal years: 2006: 1,500,746; 
Initial allocation of training funds for fiscal years: 2007: 1,566,539. 

State: Delaware; 
Initial allocation of training funds for fiscal years: 2004: 0; 
Initial allocation of training funds for fiscal years: 2005: 0; 
Initial allocation of training funds for fiscal years: 2006: 0; 
Initial allocation of training funds for fiscal years: 2007: 0. 

State: Florida; 
Initial allocation of training funds for fiscal years: 2004: 3,767,640; 
Initial allocation of training funds for fiscal years: 2005: 3,941,816; 
Initial allocation of training funds for fiscal years: 2006: 3,350,544; 
Initial allocation of training funds for fiscal years: 2007: 2,847,962. 

State: Georgia; 
Initial allocation of training funds for fiscal years: 2004: 0; 
Initial allocation of training funds for fiscal years: 2005: 854,284; 
Initial allocation of training funds for fiscal years: 2006: 1,559,104; 
Initial allocation of training funds for fiscal years: 2007: 2,100,287. 

State: Hawaii; 
Initial allocation of training funds for fiscal years: 2004: 0; 
Initial allocation of training funds for fiscal years: 2005: 0; 
Initial allocation of training funds for fiscal years: 2006: 0; 
Initial allocation of training funds for fiscal years: 2007: 0. 

State: Idaho; 
Initial allocation of training funds for fiscal years: 2004: 2,743,956; 
Initial allocation of training funds for fiscal years: 2005: 2,332,696; 
Initial allocation of training funds for fiscal years: 2006: 2,390,380; 
Initial allocation of training funds for fiscal years: 2007: 2,031,823. 

State: Illinois; 
Initial allocation of training funds for fiscal years: 2004: 5,051,333; 
Initial allocation of training funds for fiscal years: 2005: 4,294,247; 
Initial allocation of training funds for fiscal years: 2006: 4,696,350; 
Initial allocation of training funds for fiscal years: 2007: 5,339,750. 

State: Indiana; 
Initial allocation of training funds for fiscal years: 2004: 4,205,667; 
Initial allocation of training funds for fiscal years: 2005: 4,432,026; 
Initial allocation of training funds for fiscal years: 2006: 4,780,198; 
Initial allocation of training funds for fiscal years: 2007: 5,341,113. 

State: Iowa; 
Initial allocation of training funds for fiscal years: 2004: 3,924,616; 
Initial allocation of training funds for fiscal years: 2005: 3,336,400; 
Initial allocation of training funds for fiscal years: 2006: 2,835,940; 
Initial allocation of training funds for fiscal years: 2007: 2,410,549. 

State: Kansas; 
Initial allocation of training funds for fiscal years: 2004: 3,841,300; 
Initial allocation of training funds for fiscal years: 2005: 3,265,572; 
Initial allocation of training funds for fiscal years: 2006: 2,775,736; 
Initial allocation of training funds for fiscal years: 2007: 2,359,376. 

State: Kentucky; 
Initial allocation of training funds for fiscal years: 2004: 2,091,823; 
Initial allocation of training funds for fiscal years: 2005: 2,998,984; 
Initial allocation of training funds for fiscal years: 2006: 3,705,162; 
Initial allocation of training funds for fiscal years: 2007: 3,830,061. 

State: Louisiana; 
Initial allocation of training funds for fiscal years: 2004: 532,421; 
Initial allocation of training funds for fiscal years: 2005: 594,658; 
Initial allocation of training funds for fiscal years: 2006: 612,573; 
Initial allocation of training funds for fiscal years: 2007: 520,687. 

State: Maine; 
Initial allocation of training funds for fiscal years: 2004: 3,136,687; 
Initial allocation of training funds for fiscal years: 2005: 3,674,863; 
Initial allocation of training funds for fiscal years: 2006: 4,021,621; 
Initial allocation of training funds for fiscal years: 2007: 4,258,591. 

State: Maryland; 
Initial allocation of training funds for fiscal years: 2004: 450,590; 
Initial allocation of training funds for fiscal years: 2005: 482,983; 
Initial allocation of training funds for fiscal years: 2006: 525,184; 
Initial allocation of training funds for fiscal years: 2007: 630,432. 

State: Massachusetts; 
Initial allocation of training funds for fiscal years: 2004: 5,185,023; 
Initial allocation of training funds for fiscal years: 2005: 5,473,152; 
Initial allocation of training funds for fiscal years: 2006: 5,600,876; 
Initial allocation of training funds for fiscal years: 2007: 4,760,745. 

State: Michigan; 
Initial allocation of training funds for fiscal years: 2004: 5,260,956; 
Initial allocation of training funds for fiscal years: 2005: 5,559,171; 
Initial allocation of training funds for fiscal years: 2006: 5,774,380; 
Initial allocation of training funds for fiscal years: 2007: 6,144,974. 

State: Minnesota; 
Initial allocation of training funds for fiscal years: 2004: 4,498,321; 
Initial allocation of training funds for fiscal years: 2005: 3,824,119; 
Initial allocation of training funds for fiscal years: 2006: 4,005,739; 
Initial allocation of training funds for fiscal years: 2007: 3,404,879. 

State: Mississippi; 
Initial allocation of training funds for fiscal years: 2004: 1,680,425; 
Initial allocation of training funds for fiscal years: 2005: 1,909,216; 
Initial allocation of training funds for fiscal years: 2006: 2,076,016; 
Initial allocation of training funds for fiscal years: 2007: 1,764,613. 

State: Missouri; 
Initial allocation of training funds for fiscal years: 2004: 4,799,580; 
Initial allocation of training funds for fiscal years: 2005: 4,993,894; 
Initial allocation of training funds for fiscal years: 2006: 4,244,810; 
Initial allocation of training funds for fiscal years: 2007: 3,608,088. 

State: Montana; 
Initial allocation of training funds for fiscal years: 2004: 972,880; 
Initial allocation of training funds for fiscal years: 2005: 1,054,844; 
Initial allocation of training funds for fiscal years: 2006: 1,109,440; 
Initial allocation of training funds for fiscal years: 2007: 943,024. 

State: Nebraska; 
Initial allocation of training funds for fiscal years: 2004: 383,862; 
Initial allocation of training funds for fiscal years: 2005: 469,538; 
Initial allocation of training funds for fiscal years: 2006: 480,298; 
Initial allocation of training funds for fiscal years: 2007: 494,212. 

State: Nevada; 
Initial allocation of training funds for fiscal years: 2004: 288,723; 
Initial allocation of training funds for fiscal years: 2005: 298,265; 
Initial allocation of training funds for fiscal years: 2006: 253,525; 
Initial allocation of training funds for fiscal years: 2007: 215,496. 

State: New Hampshire; 
Initial allocation of training funds for fiscal years: 2004: 576,278; 
Initial allocation of training funds for fiscal years: 2005: 600,301; 
Initial allocation of training funds for fiscal years: 2006: 510,256; 
Initial allocation of training funds for fiscal years: 2007: 433,717. 

State: New Jersey; 
Initial allocation of training funds for fiscal years: 2004: 1,214,878; 
Initial allocation of training funds for fiscal years: 2005: 1,545,011; 
Initial allocation of training funds for fiscal years: 2006: 1,698,502; 
Initial allocation of training funds for fiscal years: 2007: 1,904,545. 

State: New Mexico; 
Initial allocation of training funds for fiscal years: 2004: 522,930; 
Initial allocation of training funds for fiscal years: 2005: 444,554; 
Initial allocation of training funds for fiscal years: 2006: 377,871; 
Initial allocation of training funds for fiscal years: 2007: 396,303. 

State: New York; 
Initial allocation of training funds for fiscal years: 2004: 2,396,232; 
Initial allocation of training funds for fiscal years: 2005: 2,496,152; 
Initial allocation of training funds for fiscal years: 2006: 2,642,798; 
Initial allocation of training funds for fiscal years: 2007: 2,850,870. 

State: North Carolina; 
Initial allocation of training funds for fiscal years: 2004: 6,301,065; 
Initial allocation of training funds for fiscal years: 2005: 8,174,834; 
Initial allocation of training funds for fiscal years: 2006: 9,918,421; 
Initial allocation of training funds for fiscal years: 2007: 
12,237,219. 

State: North Dakota; 
Initial allocation of training funds for fiscal years: 2004: 0; 
Initial allocation of training funds for fiscal years: 2005: 0; 
Initial allocation of training funds for fiscal years: 2006: 0; 
Initial allocation of training funds for fiscal years: 2007: 0. 

State: Ohio; 
Initial allocation of training funds for fiscal years: 2004: 4,971,827; 
Initial allocation of training funds for fiscal years: 2005: 4,226,657; 
Initial allocation of training funds for fiscal years: 2006: 4,579,676; 
Initial allocation of training funds for fiscal years: 2007: 5,012,856. 

State: Oklahoma; 
Initial allocation of training funds for fiscal years: 2004: 1,694,508; 
Initial allocation of training funds for fiscal years: 2005: 1,440,538; 
Initial allocation of training funds for fiscal years: 2006: 1,523,960; 
Initial allocation of training funds for fiscal years: 2007: 1,577,252. 

State: Oregon; 
Initial allocation of training funds for fiscal years: 2004: 4,560,530; 
Initial allocation of training funds for fiscal years: 2005: 5,116,592; 
Initial allocation of training funds for fiscal years: 2006: 5,242,514; 
Initial allocation of training funds for fiscal years: 2007: 5,424,650. 

State: Pennsylvania; 
Initial allocation of training funds for fiscal years: 2004: 
20,630,621; 
Initial allocation of training funds for fiscal years: 2005: 
17,538,533; 
Initial allocation of training funds for fiscal years: 2006: 
14,907,751; 
Initial allocation of training funds for fiscal years: 2007: 
15,352,937. 

State: Rhode Island; 
Initial allocation of training funds for fiscal years: 2004: 664,718; 
Initial allocation of training funds for fiscal years: 2005: 690,084; 
Initial allocation of training funds for fiscal years: 2006: 734,856; 
Initial allocation of training funds for fiscal years: 2007: 812,935. 

State: South Carolina; 
Initial allocation of training funds for fiscal years: 2004: 7,972,769; 
Initial allocation of training funds for fiscal years: 2005: 5,137,159; 
Initial allocation of training funds for fiscal years: 2006: 4,366,585; 
Initial allocation of training funds for fiscal years: 2007: 4,499,254. 

State: South Dakota; 
Initial allocation of training funds for fiscal years: 2004: 401,294; 
Initial allocation of training funds for fiscal years: 2005: 341,148; 
Initial allocation of training funds for fiscal years: 2006: 371,610; 
Initial allocation of training funds for fiscal years: 2007: 424,546. 

State: Tennessee; 
Initial allocation of training funds for fiscal years: 2004: 2,043,052; 
Initial allocation of training funds for fiscal years: 2005: 2,464,473; 
Initial allocation of training funds for fiscal years: 2006: 2,681,734; 
Initial allocation of training funds for fiscal years: 2007: 2,813,324. 

State: Texas; 
Initial allocation of training funds for fiscal years: 2004: 9,748,941; 
Initial allocation of training funds for fiscal years: 2005: 
10,638,355; 
Initial allocation of training funds for fiscal years: 2006: 
11,149,519; 
Initial allocation of training funds for fiscal years: 2007: 
11,460,562. 

State: Utah; 
Initial allocation of training funds for fiscal years: 2004: 1,988,268; 
Initial allocation of training funds for fiscal years: 2005: 2,134,549; 
Initial allocation of training funds for fiscal years: 2006: 1,814,367; 
Initial allocation of training funds for fiscal years: 2007: 1,542,212. 

State: Vermont; 
Initial allocation of training funds for fiscal years: 2004: 244,190; 
Initial allocation of training funds for fiscal years: 2005: 287,696; 
Initial allocation of training funds for fiscal years: 2006: 296,965; 
Initial allocation of training funds for fiscal years: 2007: 252,420. 

State: Virginia; 
Initial allocation of training funds for fiscal years: 2004: 4,655,428; 
Initial allocation of training funds for fiscal years: 2005: 5,222,843; 
Initial allocation of training funds for fiscal years: 2006: 5,712,451; 
Initial allocation of training funds for fiscal years: 2007: 6,093,702. 

State: Washington; 
Initial allocation of training funds for fiscal years: 2004: 
13,402,389; 
Initial allocation of training funds for fiscal years: 2005: 
13,920,774; 
Initial allocation of training funds for fiscal years: 2006: 
14,357,300; 
Initial allocation of training funds for fiscal years: 2007: 
12,203,705. 

State: West Virginia; 
Initial allocation of training funds for fiscal years: 2004: 576,219; 
Initial allocation of training funds for fiscal years: 2005: 770,639; 
Initial allocation of training funds for fiscal years: 2006: 1,038,332; 
Initial allocation of training funds for fiscal years: 2007: 1,425,746. 

State: Wisconsin; 
Initial allocation of training funds for fiscal years: 2004: 
10,763,024; 
Initial allocation of training funds for fiscal years: 2005: 
11,108,427; 
Initial allocation of training funds for fiscal years: 2006: 9,442,163; 
Initial allocation of training funds for fiscal years: 2007: 8,025,839. 

State: Wyoming; 
Initial allocation of training funds for fiscal years: 2004: 0; 
Initial allocation of training funds for fiscal years: 2005: 0; 
Initial allocation of training funds for fiscal years: 2006: 0; 
Initial allocation of training funds for fiscal years: 2007: 0. 

State: Total: 50 states; 
Initial allocation of training funds for fiscal years: 2004: 
$165,000,000; 
Initial allocation of training funds for fiscal years: 2005: 
$165,000,000; 
Initial allocation of training funds for fiscal years: 2006: 
$165,000,000; 
Initial allocation of training funds for fiscal years: 2007: 
$165,000,000. 

Source: Department of Labor. 

[End of table] 

[End of section] 

Appendix IX: Wage Insurance Enrollments by State since 2003: 

State: Alabama; 
2003-2004: 36; 
2005: 37; 
2006: 120. 

State: Alaska; 
2003-2004: 2; 
2005: 0; 
2006: 0. 

State: Arizona; 
2003-2004: 9; 
2005: 35; 
2006: 7. 

State: Arkansas; 
2003-2004: 10; 
2005: 47; 
2006: 16. 

State: California; 
2003-2004: 0; 
2005: 4; 
2006: 24. 

State: Colorado; 
2003-2004: 5; 
2005: 10; 
2006: 37. 

State: Connecticut; 
2003-2004: 23; 
2005: 18; 
2006: 19. 

State: Delaware; 
2003-2004: 4; 
2005: N/A; 
2006: 2. 

State: District of Columbia; 
2003-2004: 0; 
2005: 0; 
2006: 0. 

State: Florida; 
2003-2004: 2; 
2005: 6; 
2006: 12. 

State: Georgia; 
2003-2004: 44; 
2005: 97; 
2006: 171. 

State: Hawaii; 
2003-2004: 0; 
2005: 0; 
2006: 0. 

State: Idaho; 
2003-2004: 11; 
2005: 17; 
2006: 24. 

State: Illinois; 
2003-2004: 19; 
2005: 92; 
2006: 64. 

State: Indiana; 
2003-2004: 155; 
2005: 140; 
2006: 101. 

State: Iowa; 
2003-2004: 10; 
2005: 6; 
2006: 46. 

State: Kansas; 
2003-2004: 0; 
2005: 10; 
2006: 13. 

State: Kentucky; 
2003-2004: 0; 
2005: 61; 
2006: 74. 

State: Louisiana; 
2003-2004: 6; 
2005: 3; 
2006: 0. 

State: Maine; 
2003-2004: 29; 
2005: 37; 
2006: 107. 

State: Maryland; 
2003-2004: 0; 
2005: N/A; 
2006: 36. 

State: Massachusetts; 
2003-2004: 2; 
2005: 38; 
2006: 25. 

State: Michigan; 
2003-2004: 0; 
2005: 100; 
2006: 180. 

State: Minnesota; 
2003-2004: 11; 
2005: 15; 
2006: 36. 

State: Mississippi; 
2003-2004: 78; 
2005: 54; 
2006: 25. 

State: Missouri; 
2003-2004: 20; 
2005: 32; 
2006: 76. 

State: Montana; 
2003-2004: 0; 
2005: 0; 
2006: 2. 

State: Nebraska; 
2003-2004: 0; 
2005: 2; 
2006: 11. 

State: Nevada; 
2003-2004: 0; 
2005: 1; 
2006: 2. 

State: New Hampshire; 
2003-2004: 2; 
2005: 11; 
2006: 85. 

State: New Jersey; 
2003-2004: 5; 
2005: 11; 
2006: 33. 

State: New Mexico; 
2003-2004: 0; 
2005: 0; 
2006: 0. 

State: New York; 
2003-2004: 33; 
2005: 205; 
2006: 163. 

State: North Carolina; 
2003-2004: 175; 
2005: 270; 
2006: 365. 

State: North Dakota; 
2003-2004: 0; 
2005: 0; 
2006: 10. 

State: Ohio; 
2003-2004: 67; 
2005: 134; 
2006: 193. 

State: Oklahoma; 
2003-2004: 40; 
2005: 43; 
2006: 21. 

State: Oregon; 
2003-2004: 25; 
2005: 50; 
2006: 14. 

State: Pennsylvania; 
2003-2004: 125; 
2005: 221; 
2006: 153. 

State: Puerto Rico; 
2003-2004: 0; 
2005: 0; 
2006: 0. 

State: Rhode Island; 
2003-2004: 9; 
2005: 9; 
2006: 20. 

State: South Carolina; 
2003-2004: 47; 
2005: 146; 
2006: 178. 

State: South Dakota; 
2003-2004: 88; 
2005: N/A; 
2006: 21. 

State: Tennessee; 
2003-2004: 86; 
2005: 125; 
2006: 184. 

State: Texas; 
2003-2004: 35; 
2005: 36; 
2006: 105. 

State: Utah; 
2003-2004: 0; 
2005: 7; 
2006: 18. 

State: Vermont; 
2003-2004: 6; 
2005: 8; 
2006: 10. 

State: Virginia; 
2003-2004: 110; 
2005: 85; 
2006: 188. 

State: Washington; 
2003-2004: 17; 
2005: 15; 
2006: 15. 

State: West Virginia; 
2003-2004: 10; 
2005: 32; 
2006: 42. 

State: Wisconsin; 
2003-2004: 47; 
2005: 79; 
2006: 123. 

State: Wyoming; 
2003-2004: 0; 
2005: 0; 
2006: 0. 

State: National totals; 
2003-2004: 1,403; 
2005: 2,349; 
2006: 3,171. 

Source: Department of Labor. 

Note: Enrollment data for 2003-2004 are for August 6, 2003, to December 
31, 2004. Enrollment data for 2005 are for January 1 to December 31, 
2005. Enrollment data for 2006 are for January 1 to December 31, 2006. 

N/A indicates data not available. 

[End of table] 

[End of section] 

Appendix X: Cumulative TAA Participation by State in Advance Health 
Coverage Tax Credit, through September 30, 2006: 

State: Alaska; 
TAA participants: *; 
State: Montana; 
TAA participants: 52. 

State: Alabama; 
TAA participants: 492; 
State: North Carolina; 
TAA participants: 5,113. 

State: Arkansas; 
TAA participants: 165; 
State: North Dakota; 
TAA participants: *. 

State: Arizona; 
TAA participants: 85; 
State: Nebraska; 
TAA participants: 33. 

State: California; 
TAA participants: 383; 
State: New Hampshire; 
TAA participants: 98. 

State: Colorado; 
TAA participants: 172; 
State: New Jersey; 
TAA participants: 293. 

State: Connecticut; 
TAA participants: 249; 
State: New Mexico; 
TAA participants: *. 

State: District of Columbia; 
TAA participants: *; 
State: Nevada; 
TAA participants: *. 

State: Delaware; 
TAA participants: 11; 
State: New York; 
TAA participants: 608. 

State: Florida; 
TAA participants: 121; 
State: Ohio; 
TAA participants: 782. 

State: Georgia; 
TAA participants: 353; 
State: Oklahoma; 
TAA participants: 120. 

State: Hawaii; 
TAA participants: *; 
State: Oregon; 
TAA participants: 279. 

State: Iowa; 
TAA participants: 179; 
State: Pennsylvania; 
TAA participants: 1,714. 

State: Idaho; 
TAA participants: 119; 
State: Rhode Island; 
TAA participants: 197. 

State: Illinois; 
TAA participants: 624; 
State: South Carolina; 
TAA participants: 694. 

State: Indiana; 
TAA participants: 567; 
State: South Dakota; 
TAA participants: 10. 

State: Kansas; 
TAA participants: 133; 
State: Tennessee; 
TAA participants: 1,512. 

State: Kentucky; 
TAA participants: 758; 
State: Texas; 
TAA participants: 289. 

State: Louisiana; 
TAA participants: *; 
State: Utah; 
TAA participants: 55. 

State: Massachusetts; 
TAA participants: 104; 
State: Virginia; 
TAA participants: 1,915. 

State: Maryland; 
TAA participants: 101; 
State: Vermont; 
TAA participants: 16. 

State: Maine; 
TAA participants: 368; 
State: Washington; 
TAA participants: 559. 

State: Missouri; 
TAA participants: 932; 
State: Wisconsin; 
TAA participants: 709. 

State: Minnesota; 
TAA participants: 223; 
State: West Virginia; 
TAA participants: 239. 

State: Missouri; 
TAA participants: 245; 
State: Wyoming; 
TAA participants: *. 

State: Mississippi; 
TAA participants: 168. 

State: Total; 
TAA participants: 21,880. 

Source: IRS data. 

Note: Cumulative participation is the total number of participants who 
have completed an advance health coverage benefit registration at some 
time in the program. These numbers do not include qualified family 
members. *denotes a value from a sample of less than 10. These data 
cannot be released due to IRS disclosure and privacy guidelines. 

[End of table] 

[End of section] 

Appendix XI: Comments from the Department of Labor: 

U.S. Department of Labor: 
Assistant Secretary for Employment and Training: 
Washington, D.C. 20210: 

May 1 8 2007: 

Mr. Sigurd R. Nilsen: 
Director: 
Education, Workforce and Income Security Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Nilsen: 

This is the Department of Labor's response to the Government 
Accountability Office (GAO) Draft Report No. 07-701 entitled, "Trade 
Adjustment Assistance - Changes to Funding Allocation and Eligibility 
Requirements Could Enhance States' Ability to Provide Benefits and 
Services." We appreciate the opportunity to comment on the draft. 

We note that the report contains a number of recommendations for 
statutory changes to the Trade Adjustment Assistance (TAA) program. The 
Department has not included comments with respect to those 
recommendations. We expect to address proposed statutory changes in the 
context of legislation that is considered by the Congress to 
reauthorize the TAA program later this year. 

With respect to administrative issues raised in the report, we have the 
following comments. 

The information you provide indicates that of the 2,599 petitions that 
were initially denied in fiscal years 2004-2006, only 16 of the denials 
were ultimately reversed by the Court of International Trade. We are 
especially pleased that this is included in your report because it 
appears that our efforts to reform the investigation process to meet 
statutory timelines have not had a negative impact on the quality of 
the decisions we are making. 

We are also pleased to see that this review has addressed some of the 
issues surrounding the TAA allocation formula adopted by the Department 
in fiscal year 2004 to more equitably fund state TAA needs. We would 
note prior to our establishment of an allocation formula, there was 
significant uncertainty regarding the availability of training funds 
throughout the entire fiscal year. 

We believe the adoption of a formula-based methodology for distributing 
TAA training funds has been a success. We know that since adopting this 
formula approach, no state has ended the year without access to TAA 
training funds when they have been able to show that they have expended 
at least 50 percent of their current year allocation or have otherwise 
demonstrated need. Our policy of maintaining a 25 percent reserve has 
made it possible to meet state needs for additional training funds 
throughout the entire fiscal year. 

At the present time, we are reviewing the formula to ensure that 
current year funds are allocated efficiently to meet current year TAA 
training needs. The Department has become concerned that some states 
carry a significant level of funds into the new fiscal year, while 
other states have expended nearly all funds allocated. The "hold 
harmless" formula provision, which guarantees a state 85 percent of the 
prior year's funds, may be causing this imbalance, and this report 
seems to confirm the need to review that provision. In implementing the 
formula, the Department believed that the hold harmless provision was 
important to ensure funding stability while states were becoming 
accustomed to the new methodology. Now that states have experience with 
the formula and the reserve process, the Department believes it is 
appropriate to consider changes to this provision. 

We are also examining your suggestion that reserve funds be allocated 
on a quarterly basis instead of being held for distribution upon 
request. We do not agree with the suggestion that the current 15 
percent allocation for administration be increased to finance the costs 
of case management for trade affected workers. We believe that these 
workers should receive case management, assessment, and placement 
services through co-enrollment in Workforce Investment Act (WIA) core 
and intensive services as dislocated workers. Funding such services 
under the TAA program would be duplicative of services already 
available under WIA. In support of this, we note that funds clearly 
exist under WIA for this task, as evidenced by the $555 million in 
unexpended WIA Dislocated Worker funds states carried in to program 
year 2006. 

If you would like additional information, please do not hesitate to 
call me at (202) 693-2700. You may also contact Erica Cantor, 
Administrator, Office of National Response, at 202-693-3500. 

Sincerely, 

Signed by: 

Emily Stover DeRocco: 

[End of section] 

Appendix XII: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

Sigurd R. Nilsen, Director (202)-512-7215, nilsens@gao.gov: 

Acknowledgments: 

Dianne Blank, Assistant Director: 

Wayne Sylvia, Analyst-in-Charge: 

Yunsian Tai, Guisseli Reyes-Turnell, and Suneeti Shah made significant 
contributions to this report in all aspects of our work. In addition, 
Stuart Kaufman assisted in the design of the national survey; Joanna 
Chan analyzed survey responses; David Dornisch assisted in assessing 
data reliability; Jessica Botsford provided legal support; Karen Burke 
provided graphic design assistance; Rachael Valliere provided writing 
assistance; and Sara Schibanoff verified our findings. 

[End of section] 

Related GAO Products: 

Trade Adjustment Assistance: New Program for Farmers Provides Some 
Assistance, but Has Had Limited Participation and Low Program 
Expenditures. GAO-07-201. Washington, D.C.: December 18, 2006. 

National Emergency Grants: Labor Has Improved Its Grant Award 
Timeliness and Data Collection, but Further Steps Can Improve Process. 
GAO-06-870. Washington, D.C.: September 5, 2006. 

Trade Adjustment Assistance: Labor Should Take Action to Ensure 
Performance Data Are Complete, Accurate, and Accessible. GAO-06-496. 
Washington, D.C.: April, 25, 2006. 

Trade Adjustment Assistance: Most Workers in Five Layoffs Received 
Services, but Better Outreach Needed on New Benefits. GAO-06-43. 
Washington, D.C.: January 31, 2006. 

Workforce Investment Act: Labor and States Have Taken Actions to 
Improve Data Quality, but Additional Steps Are Needed. GAO-06-82. 
Washington, D.C.: November 14, 2005. 

Workforce Investment Act: Substantial Funds Are Used for Training, but 
Little Is Known Nationally about Training Outcomes. GAO-05-650. 
Washington, D.C.: June 29, 2005. 

Unemployment Insurance: Better Data Needed to Assess Reemployment 
Services to Claimants. GAO-05-413. Washington, D.C.: June 24, 2005. 

Workforce Investment Act: Labor Should Consider Alternative Approaches 
to Implement New Performance and Reporting Requirements. GAO-05-539. 
Washington, D.C.: May 27, 2005. 

Health Coverage Tax Credit: Simplified and More Timely Enrollment 
Process Could Increase Participation. GAO-04-1029. (Washington, D.C.: 
September 30, 2004). 

Trade Adjustment Assistance: Reforms Have Accelerated Training 
Enrollment, but Implementation Challenges Remain. GAO-04-1012. 
Washington, D.C.: September 22, 2004. 

Workforce Investment Act: States and Local Areas Have Developed 
Strategies to Assess Performance, but Labor Could Do More to Help. GAO- 
04-657. Washington, D.C.: June 1, 2004. 

National Emergency Grants: Labor Is Instituting Changes to Improve 
Award Process, but Further Actions Are Required to Expedite Grant 
Awards and Improve Data. GAO-04-496. Washington, D.C.: April 16, 2004. 

Workforce Investment Act: Better Guidance and Revised Funding Formula 
Would Enhance Dislocated Worker Program. GAO-02-274. Washington, D.C.: 
February 11, 2002. 

FOOTNOTES 

[1] GAO, Trade Adjustment Assistance: Reforms Have Accelerated Training 
Enrollment, but Implementation Challenges Remain, GAO-04-1012 
(Washington, D.C.: Sept. 22, 2004), and GAO, Trade Adjustment 
Assistance: Most Workers in Five Layoffs Received Services, but Better 
Outreach Needed on New Benefits, GAO-06-43 (Washington, D.C.: Jan. 31, 
2006). 

[2] The five locations were Wilmington, Massachusetts; Hazelwood, 
Missouri; Oxford, Mississippi; Lewistown, Pennsylvania; and Longview, 
Washington. 

[3] The four states that did not receive an initial allocation of TAA 
training funds in fiscal year 2006 were Delaware, Hawaii, North Dakota, 
and Wyoming. 

[4] Labor defines "significant portion" as the lesser of 5 percent of 
the affected workforce or 50 workers at a firm with 50 or more workers, 
or at least 3 workers in a firm with less than 50 affected workers. 

[5] The Trade Adjustment Assistance Reform Act of 2002 created a health 
coverage tax credit for certain workers who are eligible to receive 
income support benefits under the TAA program because their jobs were 
lost due to foreign competition and for certain retirees whose pensions 
from a former employer were terminated and are now paid by the Pension 
Benefit Guaranty Corporation (PBGC). 

[6] The statute provides that Labor determine that a significant number 
or portion of workers have become totally or partially separated, or 
are threatened to become totally or partially separated. 19 U.S.C. § 
2272(a)(1). 

[7] TAA training is a capped entitlement and appears in the mandatory 
portion of the annual federal budget. 

[8] The data used to estimate the number of workers certified as 
eligible for TAA is based on estimates of the number of affected 
workers submitted by companies at the time TAA petitions are filed with 
the Department of Labor. At the time petitions are submitted, companies 
may not know exactly how many workers will be affected. 

[9] Fiscal year 2006 was the first year that complete data were 
available on the reasons petitions were denied. 

[10] 71 Fed. Reg. 18355 (April 11, 2006) 

[11] The percentages are based on enrollments in each training category 
and not individuals. Some individuals could have enrolled in more than 
one activity. 

[12] GAO-04-1012. 

[13] Hawaii and North Dakota did not receive end-of-the year funding 
because these states received no training funds at all during the year. 

[14] For example, if Labor had distributed a total of $200 million in 
training funds during the year and a state had received a total of $10 
million (received $7 million from its initial training allocation and 
had requested an additional $3 million during the year), then that 
state would receive 5 percent of any reserve funds distributed at the 
end of the year. 

[15] This percentage is based on the total number of TAA participants 
because the number of workers potentially eligible for the wage 
insurance benefit is not readily available. 

[16] GAO, Trade Adjustment Assistance: Most Workers in Five Layoffs 
Received Services, but Better Outreach Needed on New Benefits, GAO-06-
43 (Washington, D.C.: Jan. 31, 2006). 

[17] GAO, Health Coverage Tax Credit: Simplified and More Timely 
Enrollment Process Could Increase Participation, GAO-04-1029 
(Washington, D.C.: Sept. 30, 2004). 

[18] States can apply to Labor for national emergency grants to cover 
the 65 percent share of premiums during the typically 1-to 3-month gap 
between applicants' enrollment and IRS's payment of the first month's 
advance health benefit. As of September 2006, 18 states have received 
these grants. 

[19] An exception to this requirement occurs for COBRA coverage. Under 
the TAA Reform Act, workers may choose COBRA coverage at the time they 
first lose their employer-provided coverage, or they may elect to 
purchase coverage within a 60-day period that begins the first day of 
the month in which they become eligible to receive TAA benefits. 

[20] GAO, Health Coverage Tax Credit: Simplified and More Timely 
Enrollment Process Could Increase Participation. GAO-04-1029. 
(Washington, D.C.: Sept. 30, 2004). 

[21] 19 U.S.C. § 2395. 

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