[Federal Register: August 20, 2004 (Volume 69, Number 161)]
[Notices]
[Page 51713]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20au04-141]
[[Page 51713]]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-54,708]
Novellus System, Inc., San Jose, CA; Notice of Negative
Determination on Reconsideration
On July 19, 2004, the Department issued an Affirmative
Determination Regarding Application for Reconsideration for the workers
and former workers of the subject firm. The notice was published in the
Federal Register on August 4, 2004 (69 FR 47183).
The petition for the workers of Novellus System, Inc., San Jose,
California engaged in writing and testing software was denied because
the petitioning workers did not produce an article within the meaning
of section 222 of the Act.
The petitioner contends that the Department erred in its
interpretation of work performed at the subject facility as a service
and further conveys that software should be considered a product and
workers performing software quality assurance should be considered
workers engaged in production.
A company official was contacted for clarification in regard to the
nature of the work performed at the subject facility. The official
stated that petitioning group of workers at the subject firm is engaged
in designing and testing of the operational software. The official
further clarified that the software is not recorded on any media device
for further duplication and distribution to customers, but is rather
used in semiconductor equipment manufactured by the subject firm.
The sophistication of the work involved is not an issue in
ascertaining whether the petitioning workers are eligible for trade
adjustment assistance, but rather only whether they produced an article
within the meaning of section 222 of the Trade Act of 1974.
Writing, editing and testing software are not considered production
of an article within the meaning of section 222 of the Trade Act.
Petitioning workers do not produce an ``article'' within the meaning of
the Trade Act of 1974. Information electronic databases, software and
codes, which are not printed or recorded on media devices (such as CD-
ROMs) for further mass production and distribution, are not tangible
commodities, and they are not listed on the Harmonized Tariff Schedule
of the United States (HTS), as classified by the United States
International Trade Commission (USITC), Office of Tariff Affairs and
Trade Agreements, which describes articles imported to the United
States.
To be listed in the HTS, an article would be subject to a duty on
the tariff schedule and have a value that makes it marketable, fungible
and interchangeable for commercial purposes. Although a wide variety of
tangible products are described as articles and characterized as
dutiable in the HTS, informational products that could historically be
sent in letter form and that can currently be electronically
transmitted are not listed in the HTS. Such products are not the type
of products that customs officials inspect and that the TAA program was
generally designed to address.
The investigation on reconsideration supported the findings of the
primary investigation that the petitioning group of workers does not
produce an article. However, it was revealed that production of the
semiconductor equipment occurs at the subject facility and that the
software designed and tested by the workers is further integrated into
this equipment. Thus, it was determined that the petitioning group of
service workers support production of the semiconductor equipment at
the subject facility.
The Department conducted an additional investigation to determine
whether workers can be considered eligible for TAA as workers in
support of production of the semiconductor equipment. The investigation
in connection with the semiconductor equipment revealed that criteria
(I.B) and (II.B) were not met. According to the information provided by
the company official, sales and production of the semiconductor
equipment increased at the subject firm during the relevant time
period. Moreover, the subject firm did not shift production abroad, nor
did it increase company imports, during the relevant period.
The petitioner further alleges that because workers lost their jobs
due to a transfer of job functions, such as software quality assurance
engineering to India, petitioning workers should be considered import
impacted.
The company official stated that some software is electronically
sent for testing in India, after which all the documents and codes are
returned to Novellus System, Inc. in San Jose, California facility via
electronic copies using e-mail.
Informational material that is electronically transmitted is not
considered production within the context of TAA eligibility
requirements, so there are no imports of products in this instance.
Further, as the edited material does not become a product until it is
recorded on media device, there was no shift in production of an
``article'' within the meaning of the Trade Act of 1974.
Conclusion
After reconsideration, I affirm the original notice of negative
determination of eligibility to apply for worker adjustment assistance
for workers and former workers of Novellus System, Inc., San Jose,
California.
Signed in Washington, DC, this 10th day of August, 2004.
Linda G. Poole,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 04-19098 Filed 8-19-04; 8:45 am]
BILLING CODE 4510-30-P