05-22323. ACCPAC International, Inc., Customer Support, Santa Rosa, CA; Notice of Negative Determination on Reconsideration

By letter of August 19, 2005, a petitioner requested administrative reconsideration of the Department of Labor's Notice of Negative Determination Regarding Eligibility to Apply for Worker Adjustment Assistance, applicable to workers of ACCPAC International, Inc., Customer Support, Santa Rosa, California. The denial notice was signed on June 24, 2005, and published in the Federal Register on July 20, 2005 (70 FR 41793).

The investigation revealed that the petitioning workers of this firm or subdivision do 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 the workers of the subject firm supported the production of the software during the pre-production phases. The petitioner further conveys that the software was recorded on CD media or floppy diskettes for further distribution to customers.

A company official was contacted for clarification in regard to the nature of the work performed at the subject facility. The official stated the workers of the subject firm provided development, marketing, sales, professional services, administrative, training and technical support of the ACCPAC software. The technical support representatives of the subject firm provided post-sale technical assistance, troubleshooting and training via telephone to ACCPAC customers and business partners. In addition, the workers of the subject firm provided some support to software development prior to its release on gold CDs. However, the physical gold CDs are not sold to customers, but rather represent a master copy of the software, which in its turn is sent for mass-production to an independent non-affiliated party vendor for further duplication on CD-ROMs, floppy diskettes or paper. The official supported the information previously provided by the subject firm that software created at the subject facility is not mass-produced on any media device by the subject firm for further duplication and distribution to customers and that there are no products manufactured within 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.

Technical writing, design, programming, testing and technical assistance of the software is 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, technical documentation and codes, 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. Furthermore, workers of the subject firm did not support production of an article at any affiliated facility.

The petitioner further alleges that because workers lost their jobs due to a transfer of job functions to Canada, petitioning workers should be considered import impacted.

The company official stated that the positions of six technical support representatives were moved to a Canadian office as a result of the closure of the subject firm.

Technical support of informational documentation that is electronically transmitted is not considered production within the context of TAA eligibility requirements. Further, as software and technical documentation do not become products until they are recorded on media device, there was no shift in production of an “article” abroad within the meaning of the Trade Act of 1974.

Service workers can be certified only if worker separations are caused by a reduced demand for their services from a parent or controlling firm or subdivision whose workers produce an article domestically who meet the eligibility requirements, or if the group of workers are leased workers who perform their duties on-site at a facility that meet the eligibility requirements.

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 ACCPAC International, Inc., Customer Support, Santa Rosa, California.

Signed at Washington, DC this 21st day of October, 2005.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.