Submissions.

Reconsideration and appeals.

500.63 Public access to information.

Subpart G-Investigation and Audit; Penalties

500.70 Investigation and audit.

500.71

500.72

Penalties.

Effect on lenders.

AUTHORITY: The provisions of this Part 500 issued under sec. 401, 76 Stat. 902, 19 U.S.C. 1802; E.O. 11075, 28 F.R. 473; and E.O. 11106, 28 F.R. 3911.

SOURCE: The provisions of this Part 500 appear at 37 F.R. 11530, June 8, 1972, unless otherwise noted.

Subpart A-General

§ 500.10 Scope and purpose.

This part, which replaces in its entirety Part 610 of Chapter VI, Title 15, Code of Federal Regulations, sets forth regulations implementing responsibilities of the Secretary of Commerce under chapters 1 and 2 of title III, Trade Expansion Act of 1962, and section 7 of Executive Order 11075, as amended by Executive Order 11106, with respect to adjustment assistance for firms. § 500.11 Definitions.

(a) "Act" means the Trade Expansion Act of 1962, 76 Stat. 872, 19 U.S.C. 1801 et seq.

(b) "Secretary" means the Secretary of Commerce or his delegate.

137 F.R. 11530, June 8, 1972.

(c) "Department" means the Department of Commerce.

(d) "OTAA" means the Office of Trade Adjustment Assistance, Department of Commerce.

(e) "Director" means the Director of ОТАА.

(f) "Agency" includes any agency, department, board, wholly or partly owned corporation, instrumentality, commission or establishment of the United States.

(g) "Firm" includes an individual proprietorship, partnership, joint venture, association, corporation (including a development corporation), business trust, cooperative, trustees in bankruptcy, and receivers under decree of any court. Where determined necessary by the Secretary to prevent unjustifiable benefits, a firm, together with any predecessor, successor or affiliated firm controlled or substantially beneficially owned by substantially the same person or persons may be considered a single firm.

(h) "Person" means an individual, firm, trust or estate.

(i) "Adjustment proposal" means a proposal for economic adjustment of a firm filed under Subpart C of this part. Subpart B-Eligibility of Firms To Apply for Adjustment Assistance § 500.20 General.

No firm may apply for adjustment assistance unless first certified by the Director as eligible to apply pursuant to the requirements of section 302(b) (1) or 302(c) of the Act and of this subpart. § 500.21 Statutory criteria.

A firm may seek certification of eligibility to apply for adjustment assistance only if:

(a) (1) The Tariff Commission has made an affirmative finding pursuant to section 301(b) (1) of the Act that, as a result in major part of concessions granted under trade agreements, an article is being imported into the United States in such increased quantities as to cause or threaten to cause serious injury to the domestic industry producing an article that is like or directly competitive with the imported article, (2) the President has provided, pursuant to section 302 (a) of the Act, that firms in such industry may request the Secretary for such certification of eligibility, and

(3) the applicant firm is a part of such industry;

(b) The Tariff Commission has made an affirmative finding pursuant to section 301 (c) (1) of the Act that, as a result in major part of concessions granted under trade agreements, an article like or directly competitive with an article produced by the firm is being imported into the United States in such increased quantities as to cause, or threaten to cause, serious injury to such firm; or

(c) (1) One half of the Tariff Commissioners voting in a case under section 301(b) (1) or 301(c) (1) of the Act have made an affirmative finding and (2) the President has decided to accept the finding of those Commissioners voting in the affirmative as the finding of the Commission: Provided, That in a case arising under section 301(b) (1) of the Act the President shall also have provided, pursuant to section 302 (a) of the Act, that firms in the industry may request the Secretary for certification of eligibility, and the applicant firm is a part of such industry.

§ 500.22

Certification of eligibility to apply under section 302(b)(1) of the Act.

(a) Following an affirmative finding with respect to an industry by the Tariff Commission pursuant to section 301(b) (1) of the Act (or by the President in cases involving an affirmative finding by one half of the Commissioners voting) and provision by the President pursuant to section 302(a) of the Act that firms in such industry may request the Secretary for certification of eligibility to apply for adjustment assistance, any firm in such industry may apply for such assistance by completing and filing an application as specified in paragraph (b) of this section. Such application must be filed within 1 year of the date of the President's action under section 302(a) of the Act, or such other period of time as he President may specify at the time of such action: Provided, That the Director may grant an extension of time for filing such application upon a showing to his satisfaction that timely submission of the application could not reasonably have been made: And provided further, That any request for extension of time hereunder must be made prior to expiration of the time within which such application would otherwise be required to be filed. (b) An application for certification of eligibility to apply for adjustment assist

ance under this section must be made in accordance with the provisions of the Act, this part and instructions on the appropriate OTAA form (see § 500.60), and must be accurate and complete. In making such applications, a firm should accurately set forth all facts and conditions that are material to its claim for such assistance, including the extent to which the affirmative finding of the Tariff Commission (with respect to the industry of which the firm is a part) applies to the firm and the extent of the firm's injury (or threatened injury) resulting from increased imports of the product that was the subject of the Tariff Commission's investigation. If insufficient or inconsistent information is submitted in support of such application, the firm will be required to provide additional information or otherwise correct its submission. However, every effort will be made by OTAA to proceed with processing of the application to the extent feasible in the interim.

(c) The Secretary will certify a firm that has made a timely application under this section as eligible to apply for adjustment assistance upon a finding that:

(1) The article like or directly competitive with the imported article that was the subject of the Tariff Commission's investigation is or was a significant part of the applicant firm's line of production; and

(2) The serious injury or threat thereof found by the Tariff Commission to exist with respect to the industry in question is likewise applicable to the applicant firm.

(d) In making the finding called for in paragraph (c) of this section the Secretary will, among other pertinent considerations, give due regard to the following factors which applicants should document in detail

(1) Economic factors. In determining whether increased imports of the article in question have caused serious injury or threat thereof to such firm, economic factors that are considered relevant include: (i) Idling of the firm's productive facilities capable of producing the like or directly competitive article, (ii) inability of the firm to operate at a level of reasonable profit, (iii) unemployment or underemployment in the firm, and (iv) competitive position of such firm in relation to other firms in the industry.

(2) Injury or threat thereof. For the purpose of this section, (i) "serious injury" to a firm means a major adverse

impact on its economic condition from which it cannot reasonably be expected to recover without adjustment assistance provided under this part, and (ii) “threat of serious injury" means that an economic trend has been established that can reasonably be expected to continue and to result in serious injury to the firm in the foreseeable future. A long-range possibility of serious injury is not sufficient to demonstrate a threat thereof.

(3) Causation. Increased imports of the article in question shall be considered to have caused serious injury, or threat thereof, to the applicant firm if the Secretary finds that such imports have been the major factor in causing such injury or threat thereof.

(e) While OTAA will provide all practicable counsel and assistance in the preparation of applications under this section for certification of eligibility to apply for adjustment assistance, the burden is on each firm to establish its own case.

§ 500.23

Certification of eligibility to apply under section 302 (c) of the Act.

Following an affirmative finding with respect to a firm by the Tariff Commission pursuant to section 301(c) (1) of the Act (or by the President in cases involving an affirmative finding by one half of the Commissioners voting), such firm may apply for certification of eligibility to apply for adjustment assistance by filing with the Director a sworn statement, subscribed by the owners, partners or officers of such firm that no material facts were omitted from, and there has occurred no significant change in economic circumstances affecting the firm since presentation of the firm's case to the Tariff Commission. Following receipt of such statement, the Secretary ordinarily will certify promptly that such firm is eligible to apply for adjustment assistance.

§ 500.24 Material change in conditions; denial or revocation of eligibility

certification.

(a) A firm that has applied for certification of eligibility to apply for adjustment assistance under § 500.22 or § 500.23 must promptly inform the Director in writing of any material change in economic conditions affecting such firm, including any change in the principal ownership of such firm and any change that has occurred in the facts contained

in or underlying the representations set forth in the petition that was filed with the Tariff Commission under section 301 (b) (1) or (c) (1) of the Act or in its application to the Secretary under § 500.22 or § 500.23 for certification of eligibility (and any amendments thereto).

(b) At any time, prior to certification of an adjustment proposal, the Secretary may deny or revoke certification of a firm as eligible to apply for adjustment assistance under § 500.22 or § 500.23 upon a finding that: (1) As a result of a material change in economic conditions affecting such firm following the date of the Tariff Commission's finding, adjustment assistance under this part is not required by such firm to achieve economic recovery from the serious injury or threat thereof found by the Tariff Commission to exist with respect to the firm or the industry of which it is a part; (2) such firm has willfully or negligently failed promptly to inform the Director in writing of a material change in economic conditions affecting such firm, as required under paragraph (a) of this section or (3) such firm or its agent has made false or misleading representations or statements or has falsified or concealed any material fact in connection with the application for such certification.

Subpart C-Adjustment Proposal § 500.30 Application for adjustment

assistance.

Application for adjustment assistance by any firm certified under § 500.22 or § 500.23 as eligible to apply for such assistance must be made within 2 years after the date of such certification, by completing and filing with the Secretary the appropriate ОТАА form (see § 500.60). An application for tax assistance under this section will also satisfy the requirements of § 500.43 (a): Provided, That for purposes of determining the taxable years for which net operating losses may be carried back pursuant to certification by the Secretary of the firm's eligibility for tax assistance under § 500.43(c), the filing date of such application for purposes of section 317(a) of the Act and § 500.43 (a) shall be the date of the Secretary's certification of the firm's adjustment proposal pursuant to § 500.32.

§ 500.31 Adjustment proposal.

(a) Filing. Within a reasonable time after filing an application for adjustment assistance under § 500.30, a firm shall file with OTAA an adjustment proposal, including a detailed description of the firm's plan for economic adjustment, the type and extent of adjustment assistance requested to carry out such plan and all available information bearing on what impact, if any, implementation of such plan would have on the quality of the human environment.'

(b) Preliminary proposal. A firm that has applied for adjustment assistance under § 500.30 is encouraged to consult informally with OTAA regarding the preparation and scope of its adjustment proposal. The firm may submit a preliminary proposal to OTAA in order to determine whether the adjustment assistance being sought may be provided under the Act and whether the firm's plan for its economic recovery is likely to satisfy criteria for certification of a proposal.

(c) Technical assistance. During informal consultation with OTAA or after submitting a preliminary proposal, a firm may request, and the Secretary may at his discretion authorize, technical assistance in the preparation of a sound adjustment proposal. To the maximum extent practicable, technical assistance under this section shall be provided through existing agencies, and otherwise through private individuals or institutions. A firm receiving technical assistance under this section may be required by the Secretary to bear a portion of the cost thereof as determined to be appropriate.

(d) Environmental impact. Upon submission of a preliminary adjustment proposal (or, if none is submitted, upon filing an adjustment proposal) pursuant to this section, and at all stages of proposal development thereafter, OTAA will undertake to determine what impact, if any, the firm's plan for economic recovery may have on the quality of the human environment. Should the Director consider that an adjustment proposal could, if implemented as initially submitted,

1 See, National Environmental Policy Act of 1969, 42 U.S.C. section 4321 et seq.; Council on Environmental Quality Guidelines, 36 F.R. 7724, Apr. 23, 1971.