[Congressional Record Volume 140, Number 146 (Saturday, October 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       PHOSPHOLIPIDS LEGISLATION

                                 ______


                           HON. TIM VALENTINE

                           of north carolina

                    in the house of representatives

                        Friday, October 7, 1994

  Mr. VALENTINE. Mr. Speaker, at the beginning of the 103d Congress 
Congressman Lancaster and I introduced H.R. 879. One part of this bill 
has been accomplished in the GATT agreement. Today, we are 
reintroducing the other part of H.R. 879, which could not be addressed 
in the GATT negotiations. This legislation would correct an unintended 
reclassification which occurred when the harmonized tariff 
classification system [HTS] was implemented several years ago.
  Kabi Pharmacia, a U.S. company located in Clayton, NC, imports 
pharmaceutical-grade, FDA-approved egg yolk phospholipid from its 
parent in Sweden. Kabi uses this unique phospholipid to manufacture its 
main product, Intralipid, a unique intravenous feeding 
solution. The duty Kabi paid on the phospholipid from the late 1970's 
until 1991 was 1.5 percent, but, unintentionally, the HTS more than 
tripled the rate.
  The purpose of our legislation is to restore the duty rate on the 
phospholipid to 1.5 percent and to correct the inequity of the 
unintended duty increase by refunding the increase to the Clayton 
company, from its imposition in 1991 until the duty for pharmaceutical 
components and products will become zero under the GATT agreement.
  Mr. Speaker, the inclusion of the phospholipid--and Kabi's 
pharmaceutical-grade, FDA-approved soybean oil--with other 
pharmaceutical components and products for which duty is eliminated in 
the GATT accord accomplished one part of H.R. 879. Otherwise, the key 
components of Intralipid would have remained dutiable while 
the end product, Intralipid, would have become duty-free. 
This situation could have made manufacture of Intralipid in 
Clayton uneconomical. I want to commend our Ways and Means Committee, 
the Office of the U.S. Trade Representative and the Departments of 
Commerce and Agriculture for their work on this important matter.
  Mr. Speaker, the other part of H.R. 879 being reintroduced today is 
also very important as a matter of equity. No one has ever disputed 
that the duty increase for Kabi's unique phospholipid under the HTS was 
unintended. The revenue estimate for correcting this unintended 
reclassification is about $500,000. I am hopeful that a vehicle can be 
found to give just redress of this case to my constituents.

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