[Congressional Record Volume 146, Number 145 (Monday, November 13, 2000)]
[Extensions of Remarks]
[Page E2086]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SECTION 1422 OF H.R. 4868

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                            HON. BILL ARCHER

                                of texas

                    in the house of representatives

                       Monday, November 13, 2000

  Mr. ARCHER. Mr. Speaker, H.R. 4868, as amended by H. Res. 644 which 
passed the House and Senate, contains a provision in section 1422 of 
the bill relating to petroleum and petroleum derivatives. These remarks 
explain the need for that provision.
  In 1990 Congress simplified duty drawback for the petroleum industry 
by creating a separate section, 1313(p), under the drawback laws. For 
purposes of duty drawback, a finished petroleum derivative or a 
qualified article is commercially interchangeable under Subsection 
1313(p) of the Tariff Act of 1930 based on Harmonized Tariff Schedule 
(HTS) headings or subheadings listed within that subsection. As a 
result, petroleum derivatives are considered to be of the same kind and 
quality and commercially interchangeable by virtue of matching the HTS 
classification codes for imports and exports.
  In some instances, one or more petroleum derivatives, or products, 
are listed under a single HTS classification, making those derivatives 
commercially interchangeable under 1313(p). This long-standing practice 
is threatened by future modifications of the HTS that would split 
several products out from under a single HTS classification by creating 
new and separate HTS classifications, or categories, for those 
products. Such a ``split'' would inadvertently disallow drawback under 
Subsection 1313(p) for certain qualified articles that are now 
considered commercially interchangeable.
  Section 1422 of H.R. 4868 addresses the ``split'' issue by ensuring 
that certain qualified articles remain commercially interchangeable as 
modifications to the HTS are made in which petroleum derivatives are 
split from single into separate HTS classifications or subheadings. 
Specifically, Section 1422 provides that any products that are 
currently commercially interchangeable will remain so based on those 
products' HTS subheading or classification as in effect on January 1, 
2000. Thus, the language of Section 1422 would ensure that products or 
articles that are currently commercially interchangeable shall continue 
to be commercially interchangeable, irrespective of whether the HTS is 
modified and those same articles are split and listed under separate 
HTS subheadings. This section does not affect any future tariff 
simplification that would combine certain articles or products under a 
single eight-digit HTS subheading and thus make those products 
commercially interchangeable under 1313(p).

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