[Congressional Record Volume 142, Number 70 (Friday, May 17, 1996)]
[Senate]
[Pages S5267-S5269]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. MURKOWSKI:
S. 1771. A bill to amend the Consolidated Omnibus Reconciliation Act
of 1985 to clarify that the fee for providing customs services in
connection with passengers arriving on commercial vessels making a
single voyage may be collected only one time for each passenger, and
for other purposes; to the Committee on Finance.
customs service passenger fee
Mr. MURKOWSKI. Mr. President, when Congress passed the North American
Free-Trade Agreement [NAFTA] it imposed a $6.50 fee for the arrival of
each passenger aboard a commercial vessel or aircraft coming in from
outside the customs territory of the United States. NAFTA also imposed
a $6.50 fee on passengers arriving in the United States from The
Caribbean, Mexico, and Canada.
[[Page S5268]]
The language of the NAFTA implementing language relating to this fee
was drafted inappropriately with the result that the Customs Service
claims authority to collect the fee each time a cruise ship enters a
port during the course of a single journey. I believe this
interpretation was never intended by the drafters of NAFTA and the
legislation I am introducing today would correct this error.
The Customs Service interpretation is particularly harmful to one of
Alaska's most important industries--tourism. Many visitors to my State
often book cruises that visit some of the most scenic places in the
world. For example, during the course of an Alaska voyage, a vessel may
call in Ketchikan, Juneau, Valdez, Seward, and Sitka, and may sail
outside the customs territory of the United States between each of
these Alaska ports. Even though this a single continuous journey, under
the Customs Service interpretation, the fee would have to be collected
three, four, or even five times. This was not Congress' intent.
My legislation makes clear that the passenger fee can only be imposed
a single time when a cruise ship is traveling in and out of U.S. waters
on its way along a journey as I described earlier. So long as the ship
does not make a stop at a foreign port, there is no reason to burden
passengers with this fee.
I ask unanimous consent that the text of my bill be included in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1771
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. FEES FOR CERTAIN CUSTOMS SERVICES.
(A) In General.--Section 13031(a)(5) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.
58c(a)(5)) is amended--
(1) in subparagraph (A), by inserting ``a place'' after
``aircraft from''; and
(2) in subparagraph (B), by striking ``subsection
(b)(1)(A)'' and inserting ``subsection (b)(1)(A)(i)''.
(b) Limitation on Fees.--Section 13031(b)(1) of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (19
U.S.C. 58c(b)(1)) is amended to read as follows:
``(b) Limitations on Fees.--(1)(A) No fee may be charged
under subsection (a) of this section for customs services
provided in connection with--
``(i) the arrival of any passenger whose journey--
``(I) originated in--
``(aa) Canada,
``(bb) Mexico,
``(cc) a territory or possession of the United States, or
``(dd) any adjacent island (within the meaning of section
101(b)(5) of the Immigration and Nationality Act (8 U.S.C.
1101(b)(5))), or
``(II) originated in the United States and was limited to--
``(aa) Canada,
``(bb) Mexico,
``(cc) territories and possessions of the United States,
and
``(dd) such adjacent islands;
``(ii) the arrival of any railroad car the journey of which
originates and terminates in the same country, but only if no
passengers board or disembark from the train and no cargo is
loaded or unloaded from such car while the car is within any
country other than the country in which such car originates
and terminates;
``(iii) the arrival of any ferry; or
``(iv) the arrival of any passenger on board a commercial
vessel traveling only between ports which are within the
customs territory of the United States.
``(B) The exemption provided for in subparagraph (A) shall
not apply in the case of the arrival of any passenger on
board a commercial vessel whose journey originates and
terminates at the same place in the United States if there
are no intervening stops.
``(C) The exemption provided for in subparagraph (A)(i)
shall not apply to fiscal years 1994, 1995, 1996, and
1997.''.
(c) Fee Assessed Only Once.--Section 13031(b)(40 of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (19
U.S.C. 58c(b)(4)) is amended--
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(2) by striking ``No fee'' and inserting ``(A) No fee'';
and
(3) by adding at the end the following new subparagraph:
``(B) In the case of a commercial vessel making a single
voyage involving 2 or more United States ports with respect
to which the passengers would otherwise be charged a fee
pursuant to subsection (a)(5), such fee shall be charged only
1 time for each passenger.''.
(d) Effective Date.--The amendments made by this section
shall take effect as if included in the amendments made by
section 521 of the North American Free Trade Agreement
Implementation Act.
______
By Mr. McCAIN:
S. 1774. A bill to enhance the enforceability of airport revenue
diversion provisions under chapter 471 of title 49, United States Code,
and for other purposes; to the Committee on Commerce, Science, and
Transportation.
the airport revenue protection act of 1996
Mr. McCAIN. Mr. President, I rise today to introduce legislation that
I believe will end, once and for all, the illegal diversion of airport
revenues. The Airport Revenue Protection Act of 1996 is intended to
make it absolutely clear to everyone, which includes airports, local
governments, airport sponsors, the Department of Transportation, the
Federal Aviation Administration, air carriers, and the traveling
public, that Federal laws prohibiting revenue diversion from our
Nation's airports will be strengthened and enforced. Airport sponsors,
however, will continue to have access to judicial review of Department
of Transportation decisions on revenue diversion.
For many years, our Nation's airports have prospered and grown
substantially under an innovative funding mechanism by which airport
users, including airlines, their customers, and others who do business
on airports, finance nearly all airport needs. This funding comes
primarily from landing fees, rental charges, concession revenues, and
passenger facility charges. Virtually no public funds are used to
operate this country's airports. Moreover, local tax revenues do not
support our national system of airports.
To the extent that Federal money is used for airports, it comes from
grants paid out of the user-funded aviation trust fund. Because it is
tremendously important the Federal grant money to airports is used only
for airport purposes, Congress has had a longstanding policy that
diversion of airport revenues for any nonairport purposes is illegal.
In fact, several times, Congress has acted to strengthen Federal laws
prohibiting revenue diversion.
Recently, however, Congress was informed that there is a disturbing
trend of unlawful airport revenue diversion by local governments. The
last round of audits, conducted by the inspector general's office of
the Department of Transportation, found that more than $170 million was
diverted by at least 23 of our Nation's airports from 1992 through
1995. These audits show that far too many local governments are
attempting to solve their fiscal problems by taking money away from
their airports, and using it for nonairport purposes. It also appears
that when cities or counties control airports, politics, on all levels,
is more likely to play a major role in encouraging revenue diversion.
The blatant disregard by airport sponsors of the intent of Federal
laws prohibiting revenue diversion, particularly by cities such as Los
Angeles, is reprehensible and must be addressed. Congress can no longer
stand by and watch as air travelers' hard-earned money is used
wrongfully to pay a city's nonairport bills.
This legislation specifically acts on many of the recommendations of
the Department of Transportation's inspector general to address the
problem of revenue diversion. First, the bill would expand the
prohibition on the use of airport revenues to cover revenues from
airports that are the subject of any form of Federal assistance or that
operate under a federally issued airport operating certificate. In
addition, annual airport audits must certify to DOT and FAA that any
airport funds transferred to airport sponsors are carried out in
accordance with Federal laws and regulations on revenue diversion. The
DOT inspector general would then certify that the audit complies with
Federal law.
If, as a result of such an audit, it is determined that illegal
revenue diversion has occurred, DOT, acting through FAA, must access a
penalty against the offending airport sponsor for the amount of the
illegal diversion plus interest, or withhold the illegally diverted
amount from Federal funds that the sponsor expected to receive from the
Federal Government. If an airport sponsor does not pay the assessed
penalty, and withholding does not cover the amount owed, DOT, acting
through the FAA, must file a civil suit to recover the illegally
diverted funds and any accumulated interest. Private citizens also are
given the ability to file such suits.
[[Page S5269]]
The legislation also sets up a process to ensure that any recovered
airport revenue is returned to the airport from which funds were
illegally diverted. In addition, the legislation protects
whistleblowers and establishes a means for them to receive payment when
it is determined that an airport sponsor has illegally diverted airport
revenue. Finally, to ensure that all airports are treated equally, this
bill would eliminate 10 years from the date of enactment, the
grandfather provisions that currently permit revenue diversion at some
airports.
Mr. President, this bill is intended to send the strong message that
no one can get away with ignoring Federal laws prohibiting airport
revenue diversion. It is not directed at activity relating to any
specific airport, but instead attempts to create a clear and fair means
of ensuring that airport money is spent on airport purposes only. I am
confident that this legislation will reverse the alarming trend of
illegal airport revenue diversion.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Airport Revenue Protection Act of 1996--Summary of Legislation
PURPOSES
This legislation is intended to reverse the alarming trend
of illegal diversion of airport revenues, and ensure that
airport revenues are used only for airport capital and
operating costs. Congress has long believed that airport
users should not be burdened with any type of hidden taxation
for local services. This bill would leave no doubt that
airport sponsors, such as city and county governments, cannot
put their local budgetary burdens on airport users.
In specific, the legislation bolsters efforts to stop
revenue diversion by expanding the prohibition on revenue
diversion to cover more instances of diversion. It also would
establish clear penalties and stronger mechanisms to enforce
federal laws prohibiting revenue diversion. In addition, the
bill imposes additional reporting requirements so that
illegal revenue diversion can be easily identified and
verified. Finally, it would provide important protections for
whistleblowers.
SPECIFIC PROVISIONS
Restriction on use of airport revenues (Sec. 4)
This bill would expand the prohibition on use of airport
revenues beyond project grant recipients to cover local taxes
on aviation fuel and revenues at airports that receive any
form of federal assistance or operate under a federal-issued
airport operating certificate. Certain airports would be
permitted to divert revenue, however, under ``grandfather''
provisions in the bill similar to provisions in existing law.
The bill does not affect airports that have been
grandfathered in existing law. Under current law, recipients
of federal airport grants must provide assurances that
airport revenues will not be diverted for non-airport
purposes.
Audits of airport funding activities (Sec. 5)
In the bill, this review would provide assurances that any
funds transferred to airport sponsors (such as local
governments) were not illegally diverted. The DOT Inspector
General would certify that the review meets the requirements
of this section. Current law requires recipients of airport
project grants to conduct annual audits. This bill would
require DOT, acting through the FAA, to promulgate
regulations requiring grant recipients, as part of these
annual audits, to provide a review and opinion concerning
airport funding activities.
Recovery of Illegally Diverted Funds (Secs. 5, 8)
Administrative action: Within 180 days after an audit or
any other report identifying an illegal diversion of airport
revenues is issued, DOT/FAA, would: (1) make a final
determination whether the illegal diversion occurred; (2)
provide written notice to the airport and sponsor of that
termination and the sponsor's obligation to reimburse the
airport; (3) assess an administrative penalty against the
airport sponsor in an amount equal to the amount illegally
diverted plus interest, or withhold this same amount from
federal funds intended for that airport sponsor.
Civil action: -If, within 180 days from the date when the
airport and sponsor are notified of DOT/FAA's determination
of illegal revenue diversion, the sponsor does not pay the
administrative penalty and interest, DOT/FAA must initiate a
civil action to recover the illegally diverted funds. A
private citizen also may bring a civil action (i.e., a qui
tam action) for such violations of revenue diversion laws.
Statue of Limitations: The bill establishes a 6-year
statute of limitations for any action to recover illegally
diverted airport funds. In specific, this provision requires
an airport or any other person to bring an action to recover
illegally diverted funds within 6 years from the date that
the diversion took place. Thus, the bill precludes any effort
by an airport sponsor to recover illegally diverted airport
funds more than 6 years after it occurs.
Reimbursement of Diverted Funds to Airport: The bill sets
up a process to ensure that any recovered airport funds are
returned to the airport from which the funds were illegally
diverted. The illegally diverted funds would first have to be
reimbursed to DOT/FAA by the sponsor. The funds would be
placed in the Airport and Airway Trust Fund. DOT/FAA must
then, as soon as practicable, reimburse the airport from
which the revenue was illegally diverted, in an amount equal
to that collected from the sponsor, including interest paid.
Valid Payment by Airport to Airport Sponsor (Sec. 5)
If DOT/FAA determines, during an audit or other review,
that an airport owes funds to an airport sponsor, interest
should be assessed on that amount from the date of DOT/FAA's
determination. Any request by an airport sponsor for
reimbursement of funds from an airport must be made within 6
years from the date the expense is incurred. An airport
sponsor (such as a local government), therefore, could not
seek to recover funds from an airport for an expense (such as
police and fire services) dating back more than 6 years.
Revision of DOT/FAA Revenue Diversion Polices and Procedures (Sec. 5)
Within 90 days after enactment, DOT/FAA must revise its
policies and procedures ensuring enforcement against illegal
diversion of airport revenue, to take into account changes
from this legislation.
Elimination of ``Grandfather'' Provisions (Sec. 6)
This bill would prohibit diversion from an airport covered
by the grandfather provision when either: (1) the debt
obligations are retired or refinanced, or (2) 10 years after
enactment of this legislation, whichever is earlier. To
ensure that all airports are covered by the same prohibitions
on revenue diversion, this legislation would eliminate
``grandfather'' provisions in existing law that permit some
airport sponsors to divert revenue. Currently, an airport
sponsor can legally divert revenue if such diversion was
specifically permitted before September 2, 1982, in a law
controlling financing by the airport owner or operator, or a
covenant or assurance in a debt obligation issued by that
date.
Elimination of Provisions Relating to Hawaii (Sec. 6)
Specifically, this legislation would prohibit diversion
from an airport in Hawaii covered by current exemptions when
either: (1) the debt obligations are retired or financed, or
(2) 10 years after enactment of this measure, whichever is
earlier. Current law provides several exemptions permitting
legal use in Hawaii of airport revenues for certain non-
airport purposes. Similar to the elimination of
``grandfather'' provisions, this bill also would eliminate
provisions in current law that accord special treatment to
airport sponsors in Hawaii.
Whistleblower Protection (Sec. 7)
Petition Process: Within 180 days after enactment of this
legislation, DOT/FAA must establish a process enabling
private citizens (or other parties, but not DOT/FAA
employees) to petition DOT/FAA for review of possible illegal
revenue diversion from an airport. DOT/FAA must evaluate any
petition asserting diversion of $10,000 or more, within 30
days after such petition is made. If a petition asserts
illegal diversion of less than $10,000, then DOT/FAA have
discretion whether to evaluate such a petition. DOT/FAA
reviews a petition, and finds that illegal diversion has
occurred, DOT/FAA must take action to recover the funds and
provide reimbursement to the airport.
Confidentiality of Petitioner's Identity: The petitioner's
identity would remain confidential, unless the petitioner
provided consent to disclose it.
Payment to Petitioner: When DOT/FAA recovers illegally
diverted funds, DOT/FAA must take action to make a payment to
the petitioner, in accordance with procedures established by
DOT/FAA. DOT/FAA may require the sponsor to make a payment
for petitioner and transfer that payment from the Airport and
Airway Trust Fund.
____________________