[Congressional Record Volume 148, Number 104 (Friday, July 26, 2002)]
[House]
[Pages H5888-H5961]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONFERENCE REPORT ON H.R. 3009, TRADE ACT OF 2002
Mr. THOMAS (during consideration of H.Res 507) submitted the
following conference report and statement on the bill (H.R. 3009) to
extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes:
Conference Report (H. Rept. 107-624)
The Committee of conference on the disagreeing votes of the two
Houses on the amendment of the Senate to the bill (H.R. 3009), to
extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes, having met, after full
and free conference, have agreed to recommend and do recommend to their
respective Houses as follows:
That the House recede from its disagreement to the amendment of the
Senate and agree to the same with an amendment as follows:
In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trade Act of 2002''.
SEC. 2. ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF
CONTENTS.
(a) Divisions.--This Act is organized into 5 divisions as
follows:
(1) Division a.--Trade Adjustment Assistance.
(2) Division b.--Bipartisan Trade Promotion Authority.
(3) Division c.--Andean Trade Preference Act.
(4) Division d.--Extension of Certain Preferential Trade
Treatment and Other Provisions.
(5) Division e.--Miscellaneous Provisions.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title.
Sec. 2. Organization of Act into divisions; table of contents.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
Sec. 101. Short title.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance For Workers
Sec. 111. Reauthorization of trade adjustment assistance program.
Sec. 112. Filing of petitions and provision of rapid response
assistance; expedited review of petitions by secretary of
labor.
Sec. 113. Group eligibility requirements.
Sec. 114. Qualifying requirements for trade readjustment allowances.
Sec. 115. Waivers of training requirements.
Sec. 116. Amendments to limitations on trade readjustment allowances.
Sec. 117. Annual total amount of payments for training.
Sec. 118. Provision of employer-based training.
Sec. 119. Coordination with title I of the Workforce Investment Act of
1998.
Sec. 120. Expenditure period.
Sec. 121. Job search allowances.
Sec. 122. Relocation allowances.
Sec. 123. Repeal of NAFTA transitional adjustment assistance program.
[[Page H5889]]
Sec. 124. Demonstration project for alternative trade adjustment
assistance for older workers.
Sec. 125. Declaration of policy; sense of Congress.
Subtitle B--Trade Adjustment Assistance For Firms
Sec. 131. Reauthorization of program.
Subtitle C--Trade Adjustment Assistance For Farmers
Sec. 141. Trade adjustment assistance for farmers.
Sec. 142. Conforming amendments.
Sec. 143. Study on TAA for fishermen.
Subtitle D--Effective Date
Sec. 151. Effective date.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
Sec. 201. Credit for health insurance costs of individuals receiving a
trade readjustment allowance or a benefit from the
Pension Benefit Guaranty Corporation.
Sec. 202. Advance payment of credit for health insurance costs of
eligible individuals.
Sec. 203. Health insurance assistance for eligible individuals.
TITLE III--CUSTOMS REAUTHORIZATION
Sec. 301. Short title.
Subtitle A--United States Customs Service
Chapter 1--Drug Enforcement and Other Noncommercial and Commercial
Operations
Sec. 311. Authorization of appropriations for noncommercial operations,
commercial operations, and air and marine interdiction.
Sec. 312. Antiterrorist and illicit narcotics detection equipment for
the United States-Mexico border, United States-Canada
border, and Florida and the Gulf Coast seaports.
Sec. 313. Compliance with performance plan requirements.
Chapter 2--Child Cyber-smuggling Center of the Customs Service
Sec. 321. Authorization of appropriations for program to prevent child
pornography/child sexual exploitation.
Chapter 3--Miscellaneous Provisions
Sec. 331. Additional Customs Service officers for United States-Canada
Border.
Sec. 332. Study and report relating to personnel practices of the
Customs Service.
Sec. 333. Study and report relating to accounting and auditing
procedures of the Customs Service.
Sec. 334. Establishment and implementation of cost accounting system;
reports.
Sec. 335. Study and report relating to timeliness of prospective
rulings.
Sec. 336. Study and report relating to customs user fees.
Sec. 337. Fees for customs inspections at express courier facilities.
Sec. 338. National Customs Automation Program.
Sec. 339. Authorization of appropriations for customs staffing.
Chapter 4--Antiterrorism Provisions
Sec. 341. Immunity for United States officials that act in good faith.
Sec. 342. Emergency adjustments to offices, ports of entry, or staffing
of the customs service.
Sec. 343. Mandatory advanced electronic information for cargo and other
improved Customs reporting procedures.
Sec. 343A. Secure systems of transportation.
Sec. 344. Border search authority for certain contraband in outbound
mail.
Sec. 345. Authorization of appropriations for reestablishment of
customs operations in New York City.
Chapter 5--Textile Transshipment Provisions
Sec. 351. GAO audit of textile transshipment monitoring by Customs
Service.
Sec. 352. Authorization of appropriations for textile transshipment
enforcement operations.
Sec. 353. Implementation of the African Growth and Opportunity Act.
Subtitle B--Office of the United States Trade Representative
Sec. 361. Authorization of appropriations.
Subtitle C--United States International Trade Commission
Sec. 371. Authorization of appropriations.
Subtitle D--Other trade provisions
Sec. 381. Increase in aggregate value of articles exempt from duty
acquired abroad by United States residents.
Sec. 382. Regulatory audit procedures.
Sec. 383. Payment of duties and fees.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
Sec. 2101. Short title and findings.
Sec. 2102. Trade negotiating objectives.
Sec. 2103. Trade agreements authority.
Sec. 2104. Consultations and assessment.
Sec. 2105. Implementation of trade agreements.
Sec. 2106. Treatment of certain trade agreements for which negotiations
have already begun.
Sec. 2107. Congressional Oversight Group.
Sec. 2108. Additional implementation and enforcement requirements.
Sec. 2109. Committee staff.
Sec. 2110. Conforming amendments.
Sec. 2111. Report on impact of trade promotion authority.
Sec. 2112. Interests of small business.
Sec. 2113. Definitions.
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
Sec. 3101. Short title.
Sec. 3102. Findings.
Sec. 3103. Articles eligible for preferential treatment.
Sec. 3104. Termination.
Sec. 3105. Report on Free Trade Agreement with Israel.
Sec. 3106. Modification of duty treatment for tuna.
Sec. 3107. Trade benefits under the caribbean basin economic recovery
act.
Sec. 3108. Trade benefits under the African Growth and Opportunity Act.
DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
Sec. 4101. Extension of generalized system of preferences.
Sec. 4102. Amendments to generalized system of preferences.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
Sec. 5101. Wool provisions.
Sec. 5102. Duty suspension on wool.
Subtitle B--Other Provisions
Sec. 5201. Fund for WTO dispute settlements.
Sec. 5202. Certain steam or other vapor generating boilers used in
nuclear facilities.
Sec. 5203. Sugar tariff-rate quota circumvention.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
SEC. 101. SHORT TITLE.
This division may be cited as the ``Trade Adjustment
Assistance Reform Act of 2002''.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance For Workers
SEC. 111. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE
PROGRAM.
(a) Assistance for Workers.--Section 245 of the Trade Act
of 1974 (19 U.S.C. 2317) is amended by striking ``October 1,
1998, and ending September 30, 2001,'' each place it appears
and inserting ``October 1, 2001, and ending September 30,
2007,''.
(b) Assistance for Firms.--Section 256(b) of the Trade Act
of 1974 (19 U.S.C. 2346(b)) is amended by striking ``October
1, 1998, and ending September 30, 2001'' and inserting
``October 1, 2001, and ending September 30, 2007,''.
(c) Termination.--Section 285 of the Trade Act of 1974 is
amended to read as follows:
``SEC. 285. TERMINATION.
``(a) Assistance for Workers.--
``(1) In general.--Except as provided in paragraph (2),
trade adjustment assistance, vouchers, allowances, and other
payments or benefits may not be provided under chapter 2
after September 30, 2007.
``(2) Exception.--Notwithstanding paragraph (1), a worker
shall continue to receive trade adjustment assistance
benefits and other benefits under chapter 2 for any week for
which the worker meets the eligibility requirements of that
chapter, if on or before September 30, 2007, the worker is--
``(A) certified as eligible for trade adjustment assistance
benefits under chapter 2 of this title; and
``(B) otherwise eligible to receive trade adjustment
assistance benefits under chapter 2.
``(b) Other Assistance.--
``(1) Assistance for firms.--Technical assistance may not
be provided under chapter 3 after September 30, 2007.
``(2) Assistance for farmers.--
``(A) In general.--Except as provided in subparagraph (B),
adjustment assistance, vouchers, allowances, and other
payments or benefits may not be provided under chapter 6
after September 30, 2007.
``(B) Exception.--Notwithstanding subparagraph (A), an
agricultural commodity producer (as defined in section
291(2)) shall continue to receive adjustment assistance
benefits and other benefits under chapter 6, for any week for
which the agricultural commodity producer meets the
eligibility requirements of chapter 6, if on or before
September 30, 2007, the agricultural commodity producer is--
``(i) certified as eligible for adjustment assistance
benefits under chapter 6; and
``(ii) is otherwise eligible to receive adjustment
assistance benefits under such chapter 6.''.
SEC. 112. FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE
ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY
SECRETARY OF LABOR.
(a) Filing of Petitions and Provision of Rapid Response
Assistance.--Section 221(a) of the Trade Act of 1974 (19
U.S.C. 2271(a)) is amended to read as follows:
``(a)(1) A petition for certification of eligibility to
apply for adjustment assistance for a group of workers under
this chapter may be filed simultaneously with the Secretary
and with the Governor of the State in which such workers'
firm or subdivision is located by any of the following:
``(A) The group of workers (including workers in an
agricultural firm or subdivision of any agricultural firm).
``(B) The certified or recognized union or other duly
authorized representative of such workers.
``(C) Employers of such workers, one-stop operators or one-
stop partners (as defined in section 101 of the Workforce
Investment Act of 1998 (29 U.S.C. 2801)), including State
employment security agencies, or the State dislocated worker
[[Page H5890]]
unit established under title I of such Act, on behalf of such
workers.
``(2) Upon receipt of a petition filed under paragraph (1),
the Governor shall--
``(A) ensure that rapid response assistance, and
appropriate core and intensive services (as described in
section 134 of the Workforce Investment Act of 1998 (29
U.S.C. 2864)) authorized under other Federal laws are made
available to the workers covered by the petition to the
extent authorized under such laws; and
``(B) assist the Secretary in the review of the petition by
verifying such information and providing such other
assistance as the Secretary may request.
``(3) Upon receipt of the petition, the Secretary shall
promptly publish notice in the Federal Register that the
Secretary has received the petition and initiated an
investigation.''.
(b) Expedited Review of Petitions by Secretary of Labor.--
Section 223(a) of such Act (19 U.S.C. 2273(a)) is amended in
the first sentence by striking ``60 days'' and inserting ``40
days''.
SEC. 113. GROUP ELIGIBILITY REQUIREMENTS.
(a) Trade Adjustment Assistance Program.--
(1) In general.--Section 222 of the Trade Act of 1974 (19
U.S.C. 2272) is amended--
(A) by amending subsection (a) to read as follows:
``(a) In General.--A group of workers (including workers in
any agricultural firm or subdivision of an agricultural firm)
shall be certified by the Secretary as eligible to apply for
adjustment assistance under this chapter pursuant to a
petition filed under section 221 if the Secretary determines
that--
``(1) a significant number or proportion of the workers in
such workers' firm, or an appropriate subdivision of the
firm, have become totally or partially separated, or are
threatened to become totally or partially separated; and
``(2)(A)(i) the sales or production, or both, of such firm
or subdivision have decreased absolutely;
``(ii) imports of articles like or directly competitive
with articles produced by such firm or subdivision have
increased; and
``(iii) the increase in imports described in clause (ii)
contributed importantly to such workers' separation or threat
of separation and to the decline in the sales or production
of such firm or subdivision; or
``(B)(i) there has been a shift in production by such
workers' firm or subdivision to a foreign country of articles
like or directly competitive with articles which are produced
by such firm or subdivision; and
``(ii)(I) the country to which the workers' firm has
shifted production of the articles is a party to a free trade
agreement with the United States;
``(II) the country to which the workers' firm has shifted
production of the articles is a beneficiary country under the
Andean Trade Preference Act, African Growth and Opportunity
Act, or the Caribbean Basin Economic Recovery Act; or
``(III) there has been or is likely to be an increase in
imports of articles that are like or directly competitive
with articles which are or were produced by such firm or
subdivision.'';
(B) by redesignating subsection (b) as subsection (c); and
(C) by inserting after subsection (a) the following:
``(b) Adversely affected secondary workers.--A group of
workers (including workers in any agricultural firm or
subdivision of an agricultural firm) shall be certified by
the Secretary as eligible to apply for trade adjustment
assistance benefits under this chapter if the Secretary
determines that--
``(1) a significant number or proportion of the workers in
the workers' firm or an appropriate subdivision of the firm
have become totally or partially separated, or are threatened
to become totally or partially separated;
``(2) the workers' firm (or subdivision) is a supplier or
downstream producer to a firm (or subdivision) that employed
a group of workers who received a certification of
eligibility under subsection (a), and such supply or
production is related to the article that was the basis for
such certification (as defined in subsection (c) (3) and
(4)); and
``(3) either--
``(A) the workers' firm is a supplier and the component
parts it supplied to the firm (or subdivision) described in
paragraph (2) accounted for at least 20 percent of the
production or sales of the workers' firm; or
``(B) a loss of business by the workers' firm with the firm
(or subdivision) described in paragraph (2) contributed
importantly to the workers' separation or threat of
separation determined under paragraph (1).''.
(b) Definitions.--Section 222(c) of such Act, as
redesignated by paragraph (1)(A), is amended--
(1) in the matter preceding paragraph (1), by striking
``subsection (a)(3)'' and inserting ``this section''; and
(2) by adding at the end the following:
``(3) Downstream producer.--The term `downstream producer'
means a firm that performs additional, value-added production
processes for a firm or subdivision, including a firm that
performs final assembly or finishing, directly for another
firm (or subdivision), for articles that were the basis for a
certification of eligibility under subsection (a) of a group
of workers employed by such other firm, if the certification
of eligibility under subsection (a) is based on an increase
in imports from, or a shift in production to, Canada or
Mexico.
``(4) Supplier.--The term `supplier' means a firm that
produces and supplies directly to another firm (or
subdivision) component parts for articles that were the basis
for a certification of eligibility under subsection (a) of a
group of workers employed by such other firm.''.
SEC. 114. QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT
ALLOWANCES.
(a) Clarification of Certain Reductions.--Section
231(a)(3)(B) of the Trade Act of 1974 (19 U.S.C.
2291(a)(3)(B)) is amended by inserting after ``any
unemployment insurance'' the following: ``, except additional
compensation that is funded by a State and is not reimbursed
from any Federal funds,''.
(b) Enrollment in Training Requirement.--Section
231(a)(5)(A) of such Act (19 U.S.C. 2291(a)(5)(A)) is
amended--
(1) by inserting ``(i)'' after ``(A)'';
(2) by adding ``and'' after the comma at the end; and
(3) by adding at the end the following:
``(ii) the enrollment required under clause (i) occurs no
later than the latest of--
``(I) the last day of the 16th week after the worker's most
recent total separation from adversely affected employment
which meets the requirements of paragraphs (1) and (2),
``(II) the last day of the 8th week after the week in which
the Secretary issues a certification covering the worker,
``(III) 45 days after the later of the dates specified in
subclause (I) or (II), if the Secretary determines there are
extenuating circumstances that justify an extension in the
enrollment period, or
``(IV) the last day of a period determined by the Secretary
to be approved for enrollment after the termination of a
waiver issued pursuant to subsection (c),''.
SEC. 115. WAIVERS OF TRAINING REQUIREMENTS.
(a) In General.--Section 231(c) of the Trade Act of 1974
(19 U.S.C. 2291(c)) is amended to read as follows:
``(c) Waivers of Training Requirements.--
``(1) Issuance of waivers.--The Secretary may issue a
written statement to an adversely affected worker waiving the
requirement to be enrolled in training described in
subsection (a)(5)(A) if the Secretary determines that it is
not feasible or appropriate for the worker, because of 1 or
more of the following reasons:
``(A) Recall.--The worker has been notified that the worker
will be recalled by the firm from which the separation
occurred.
``(B) Marketable skills.--The worker possesses marketable
skills for suitable employment (as determined pursuant to an
assessment of the worker, which may include the profiling
system under section 303(j) of the Social Security Act (42
U.S.C. 503(j)), carried out in accordance with guidelines
issued by the Secretary) and there is a reasonable
expectation of employment at equivalent wages in the
foreseeable future.
``(C) Retirement.--The worker is within 2 years of meeting
all requirements for entitlement to either--
``(i) old-age insurance benefits under title II of the
Social Security Act (42 U.S.C. 401 et seq.) (except for
application therefor); or
``(ii) a private pension sponsored by an employer or labor
organization.
``(D) Health.--The worker is unable to participate in
training due to the health of the worker, except that a
waiver under this subparagraph shall not be construed to
exempt a worker from requirements relating to the
availability for work, active search for work, or refusal to
accept work under Federal or State unemployment compensation
laws.
``(E) Enrollment unavailable.--The first available
enrollment date for the approved training of the worker is
within 60 days after the date of the determination made under
this paragraph, or, if later, there are extenuating
circumstances for the delay in enrollment, as determined
pursuant to guidelines issued by the Secretary.
``(F) Training not available.--Training approved by the
Secretary is not reasonably available to the worker from
either governmental agencies or private sources (which may
include area vocational education schools, as defined in
section 3 of the Carl D. Perkins Vocational and Technical
Education Act of 1998 (20 U.S.C. 2302), and employers), no
training that is suitable for the worker is available at a
reasonable cost, or no training funds are available.
``(2) Duration of waivers.--
``(A) In general.--A waiver issued under paragraph (1)
shall be effective for not more than 6 months after the date
on which the waiver is issued, unless the Secretary
determines otherwise.
``(B) Revocation.--The Secretary shall revoke a waiver
issued under paragraph (1) if the Secretary determines that
the basis of a waiver is no longer applicable to the worker
and shall notify the worker in writing of the revocation.
``(3) Agreements under section 239.--
``(A) Issuance by cooperating states.--Pursuant to an
agreement under section 239, the Secretary may authorize a
cooperating State to issue waivers as described in paragraph
(1).
``(B) Submission of statements.--An agreement under section
239 shall include a requirement that the cooperating State
submit to the Secretary the written statements provided under
paragraph (1) and a statement of the reasons for the
waiver.''.
(b) Conforming Amendment.--Section 231(a)(5)(C) of such Act
(19 U.S.C. 2291(a)(5)(C)) is amended by striking
``certified''.
SEC. 116. AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT
ALLOWANCES.
(a) Increase in Maximum Number of Weeks.--Section 233(a) of
the Trade Act of 1974 (19 U.S.C. 2293(a)) is amended--
(1) in paragraph (2), by inserting after ``104-week
period'' the following: ``(or, in the case of an adversely
affected worker who requires a program of remedial education
(as described in section 236(a)(5)(D)) in order to complete
training approved for the worker under section 236, the 130-
week period)''; and
[[Page H5891]]
(2) in paragraph (3), by striking ``26'' each place it
appears and inserting ``52''.
(b) Special Rule Relating to Break in Training.--Section
233(f) of the Trade Act of 1974 (19 U.S.C. 2293(f)) is
amended in the matter preceding paragraph (1) by striking
``14 days'' and inserting ``30 days''.
(c) Additional Weeks for Individuals in Need of Remedial
Education.--Section 233 of the Trade Act of 1974 (19 U.S.C.
2293) is amended by adding at the end the following:
``(g) Notwithstanding any other provision of this section,
in order to assist an adversely affected worker to complete
training approved for the worker under section 236 which
includes a program of remedial education (as described in
section 236(a)(5)(D)), and in accordance with regulations
prescribed by the Secretary, payments may be made as trade
readjustment allowances for up to 26 additional weeks in the
26-week period that follows the last week of entitlement to
trade readjustment allowances otherwise payable under this
chapter.''.
SEC. 117. ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING.
Section 236(a)(2)(A) of the Trade Act of 1974 (19 U.S.C.
2296(a)(2)(A)) is amended by striking ``$80,000,000'' and all
that follows through ``$70,000,000'' and inserting
``$220,000,000''.
SEC. 118. PROVISION OF EMPLOYER-BASED TRAINING.
(a) In General.--Section 236(a)(5)(A) of the Trade Act of
1974 (19 U.S.C. 2296(a)(5)(A)) is amended to read as follows:
``(A) employer-based training, including--
``(i) on-the-job training, and
``(ii) customized training,''.
(b) Reimbursement.--Section 236(c)(8) of such Act (19
U.S.C. 2296(c)(8)) is amended to read as follows:
``(8) the employer is provided reimbursement of not more
than 50 percent of the wage rate of the participant, for the
cost of providing the training and additional supervision
related to the training,''.
(c) Definition.--Section 236 of such Act (19 U.S.C. 2296)
is amended by adding at the end the following new subsection:
``(f) For purposes of this section, the term `customized
training' means training that is--
``(1) designed to meet the special requirements of an
employer or group of employers;
``(2) conducted with a commitment by the employer or group
of employers to employ an individual upon successful
completion of the training; and
``(3) for which the employer pays for a significant portion
(but in no case less than 50 percent) of the cost of such
training, as determined by the Secretary.''.
SEC. 119. COORDINATION WITH TITLE I OF THE WORKFORCE
INVESTMENT ACT OF 1998.
Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is
amended by inserting before the period at the end of the
first sentence the following: ``, including the services
provided through one-stop delivery systems described in
section 134(c) of the Workforce Investment Act of 1998 (29
U.S.C. 2864(c))''.
SEC. 120. EXPENDITURE PERIOD.
Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as
amended by section 111(a) of this Act, is further amended by
amending subsection (b) to read as follows:
``(b) Period of Expenditure.--Funds obligated for any
fiscal year to carry out activities under sections 235
through 238 may be expended by each State receiving such
funds during that fiscal year and the succeeding two fiscal
years.''.
SEC. 121. JOB SEARCH ALLOWANCES.
Section 237 of the Trade Act of 1974 (19 U.S.C. 2297) is
amended to read as follows:
``SEC. 237. JOB SEARCH ALLOWANCES.
``(a) Job Search Allowance Authorized.--
``(1) In general.--An adversely affected worker covered by
a certification issued under subchapter A of this chapter may
file an application with the Secretary for payment of a job
search allowance.
``(2) Approval of applications.--The Secretary may grant an
allowance pursuant to an application filed under paragraph
(1) when all of the following apply:
``(A) Assist adversely affected worker.--The allowance is
paid to assist an adversely affected worker who has been
totally separated in securing a job within the United States.
``(B) Local employment not available.--The Secretary
determines that the worker cannot reasonably be expected to
secure suitable employment in the commuting area in which the
worker resides.
``(C) Application.--The worker has filed an application for
the allowance with the Secretary before--
``(i) the later of--
``(I) the 365th day after the date of the certification
under which the worker is certified as eligible; or
``(II) the 365th day after the date of the worker's last
total separation; or
``(ii) the date that is the 182d day after the date on
which the worker concluded training, unless the worker
received a waiver under section 231(c).
``(b) Amount of Allowance.--
``(1) In general.--An allowance granted under subsection
(a) shall provide reimbursement to the worker of 90 percent
of the cost of necessary job search expenses as prescribed by
the Secretary in regulations.
``(2) Maximum allowance.--Reimbursement under this
subsection may not exceed $1,250 for any worker.
``(3) Allowance for subsistence and transportation.--
Reimbursement under this subsection may not be made for
subsistence and transportation expenses at levels exceeding
those allowable under section 236(b) (1) and (2).
``(c) Exception.--Notwithstanding subsection (b), the
Secretary shall reimburse any adversely affected worker for
necessary expenses incurred by the worker in participating in
a job search program approved by the Secretary.''.
SEC. 122. RELOCATION ALLOWANCES.
Section 238 of the Trade Act of 1974 (19 U.S.C. 2298) is
amended to read as follows:
``SEC. 238. RELOCATION ALLOWANCES.
``(a) Relocation Allowance Authorized.--
``(1) In general.--Any adversely affected worker covered by
a certification issued under subchapter A of this chapter may
file an application for a relocation allowance with the
Secretary, and the Secretary may grant the relocation
allowance, subject to the terms and conditions of this
section.
``(2) Conditions for granting allowance.--A relocation
allowance may be granted if all of the following terms and
conditions are met:
``(A) Assist an adversely affected worker.--The relocation
allowance will assist an adversely affected worker in
relocating within the United States.
``(B) Local employment not available.--The Secretary
determines that the worker cannot reasonably be expected to
secure suitable employment in the commuting area in which the
worker resides.
``(C) Total separation.--The worker is totally separated
from employment at the time relocation commences.
``(D) Suitable employment obtained.--The worker--
``(i) has obtained suitable employment affording a
reasonable expectation of long-term duration in the area in
which the worker wishes to relocate; or
``(ii) has obtained a bona fide offer of such employment.
``(E) Application.--The worker filed an application with
the Secretary before--
``(i) the later of--
``(I) the 425th day after the date of the certification
under subchapter A of this chapter; or
``(II) the 425th day after the date of the worker's last
total separation; or
``(ii) the date that is the 182d day after the date on
which the worker concluded training, unless the worker
received a waiver under section 231(c).
``(b) Amount of Allowance.--The relocation allowance
granted to a worker under subsection (a) includes--
``(1) 90 percent of the reasonable and necessary expenses
(including, but not limited to, subsistence and
transportation expenses at levels not exceeding those
allowable under section 236(b) (1) and (2) specified in
regulations prescribed by the Secretary, incurred in
transporting the worker, the worker's family, and household
effects; and
``(2) a lump sum equivalent to 3 times the worker's average
weekly wage, up to a maximum payment of $1,250.
``(c) Limitations.--A relocation allowance may not be
granted to a worker unless--
``(1) the relocation occurs within 182 days after the
filing of the application for relocation assistance; or
``(2) the relocation occurs within 182 days after the
conclusion of training, if the worker entered a training
program approved by the Secretary under section 236(b) (1)
and (2).''.
SEC. 123. REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE
PROGRAM.
(a) In General.--Subchapter D of chapter 2 of title II of
such Act (19 U.S.C. 2331) is repealed.
(b) Conforming Amendments.--
(1) Section 225(b) (1) and (2) of the Trade Act of 1974 (19
U.S.C. 2275(b) (1) and (2)) is amended by striking ``or
subchapter D'' each place it appears.
(2) Section 249A of such Act (19 U.S.C. 2322) is repealed.
(3) The table of contents of such Act is amended--
(A) by striking the item relating to section 249A; and
(B) by striking the items relating to subchapter D of
chapter 2 of title II.
(4) Section 284(a) of such Act is amended by striking ``or
section 250(c)''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to petitions filed under chapter 2 of
title II of the Trade Act of 1974, on or after the date that
is 90 days after the date of enactment of this Act.
(2) Workers certified as eligible before effective date.--
Notwithstanding subsection (a), a worker receiving benefits
under chapter 2 of title II of the Trade Act of 1974 shall
continue to receive (or be eligible to receive) benefits and
services under chapter 2 of title II of the Trade Act of
1974, as in effect on the day before the amendments made by
this section take effect under subsection (a), for any week
for which the worker meets the eligibility requirements of
such chapter 2 as in effect on such date.
SEC. 124. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE
ADJUSTMENT ASSISTANCE FOR OLDER WORKERS.
(a) Demonstration Program.--Chapter 2 of title II of the
Trade Act of 1974 (19 U.S.C. 2271 et seq.) is amended by
striking section 246 and inserting the following new section:
``SEC. 246. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE
ADJUSTMENT ASSISTANCE FOR OLDER WORKERS.
``(a) In General.--
``(1) Establishment.--Not later than 1 year after the date
of enactment of the Trade Adjustment Assistance Reform Act of
2002, the Secretary shall establish an alternative trade
adjustment assistance program for older workers that provides
the benefits described in paragraph (2).
``(2) Benefits.
``(A) Payments.--A State shall use the funds provided to
the State under section 241 to pay, for a period not to
exceed 2 years, to a worker
[[Page H5892]]
described in paragraph (3)(B), 50 percent of the difference
between--
``(i) the wages received by the worker from reemployment;
and
``(ii) the wages received by the worker at the time of
separation.
``(B) Health insurance.--A worker described in paragraph
(3)(B) participating in the program established under
paragraph (1) is eligible to receive, for a period not to
exceed 2 years, a credit for health insurance costs under
section 35 of the Internal Revenue Code of 1986, as added by
section 201 of the Trade Act of 2002.
``(3) Eligibility.--
``(A) Firm eligibility.--
``(i) In general.--The Secretary shall provide the
opportunity for a group of workers on whose behalf a petition
is filed under section 221 to request that the group of
workers be certified for the alternative trade adjustment
assistance program under this section at the time the
petition is filed.
``(ii) Criteria.--In determining whether to certify a group
of workers as eligible for the alternative trade adjustment
assistance program, the Secretary shall consider the
following criteria:
``(I) Whether a significant number of workers in the
workers' firm are 50 years of age or older.
``(II) Whether the workers in the workers' firm possess
skills that are not easily transferable.
``(III) The competitive conditions within the workers'
industry.
``(iii) Deadline.--The Secretary shall determine whether
the workers in the group are eligible for the alternative
trade adjustment assistance program by the date specified in
section 223(a).
``(B) Individual Eligibility.--A worker in the group that
the Secretary has certified as eligible for the alternative
trade adjustment assistance program may elect to receive
benefits under the alternative trade adjustment assistance
program if the worker--
``(i) is covered by a certification under subchapter A of
this chapter;
``(ii) obtains reemployment not more than 26 weeks after
the date of separation from the adversely affected
employment;
``(iii) is at least 50 years of age; and
``(iv) earns not more than $50,000 a year in wages from
reemployment;
``(v) is employed on a full-time basis as defined by State
law in the State in which the worker is employed; and
``(vi) does not return to the employment from which the
worker was separated.
``(4) Total amount of payments.--The payments described in
paragraph (2)(A) made to a worker may not exceed $10,000 per
worker during the 2-year eligibility period.
``(5) Limitation on other benefits.--Except as provided in
section 238(a)(2)(B), if a worker is receiving payments
pursuant to the program established under paragraph (1), the
worker shall not be eligible to receive any other benefits
under this title.
``(b) Termination.--
``(1) In general.--Except as provided in paragraph (2), no
payments may be made by a State under the program established
under subsection (a)(1) after the date that is 5 years after
the date on which such program is implemented by the State.
``(2) Exception.--Notwithstanding paragraph (1), a worker
receiving payments under the program established under
subsection (a)(1) on the termination date described in
paragraph (1) shall continue to receive such payments
provided that the worker meets the criteria described in
subsection (a)(3)(B).''.
(b) Table of Contents.--The Trade Act of 1974 (U.S.C. et
seq.) is amended in the table of contents by inserting after
the item relating to section 245 the following new item:
``Sec. 246. Demonstration project for alternative trade adjustment
assistance for older workers.''.
SEC. 125. DECLARATION OF POLICY; SENSE OF CONGRESS.
(a) Declaration of Policy.--Congress reiterates that, under
the trade adjustment assistance program under chapter 2 of
title II of the Trade Act of 1974, workers are eligible for
transportation, childcare, and healthcare assistance, as well
as other related assistance under programs administered by
the Department of Labor.
(b) Sense of Congress.--It is the sense of Congress that
the Secretary of Labor, working independently and in
conjunction with the States, should, in accordance with
section 225 of the Trade Act of 1974, provide more specific
information about benefit allowances, training, and other
employment services, and the petition and application
procedures (including appropriate filing dates) for such
allowances, training, and services, under the trade
adjustment assistance program under chapter 2 of title II of
the Trade Act of 1974 to workers who are applying for, or are
certified to receive, assistance under that program,
including information on all other Federal assistance
available to such workers.
Subtitle B--Trade Adjustment Assistance For Firms
SEC. 131. REAUTHORIZATION OF PROGRAM.
Section 256(b) of chapter 3 of title II of the Trade Act of
1974 (19 U.S.C. 2346(b)) is amended to read as follows:
``(b) There are authorized to be appropriated to the
Secretary $16,000,000 for each of fiscal years 2003 through
2007, to carry out the Secretary's functions under this
chapter in connection with furnishing adjustment assistance
to firms. Amounts appropriated under this subsection shall
remain available until expended.''.
Subtitle C--Trade Adjustment Assistance For Farmers
SEC. 141. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.
(a) In General.--Title II of the Trade Act of 1974 (19
U.S.C. 2251 et seq.) is amended by adding at the end the
following new chapter:
``CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS
``SEC. 291. DEFINITIONS.
``In this chapter:
``(1) Agricultural commodity.--The term `agricultural
commodity' means any agricultural commodity (including
livestock) in its raw or natural state.
``(2) Agricultural commodity producer.--The term
`agricultural commodity producer' has the same meaning as the
term `person' as prescribed by regulations promulgated under
section 1001(5) of the Food Security Act of 1985 (7 U.S.C.
1308(5)).
``(3) Contributed importantly.--
``(A) In general.--The term `contributed importantly' means
a cause which is important but not necessarily more important
than any other cause.
``(B) Determination of contributed importantly.--The
determination of whether imports of articles like or directly
competitive with an agricultural commodity with respect to
which a petition under this chapter was filed contributed
importantly to a decline in the price of the agricultural
commodity shall be made by the Secretary.
``(4) Duly authorized representative.--The term `duly
authorized representative' means an association of
agricultural commodity producers.
``(5) National average price.--The term `national average
price' means the national average price paid to an
agricultural commodity producer for an agricultural commodity
in a marketing year as determined by the Secretary.
``(6) Secretary.--The term `Secretary' means the Secretary
of Agriculture.
``SEC. 292. PETITIONS; GROUP ELIGIBILITY.
``(a) In General.--A petition for a certification of
eligibility to apply for adjustment assistance under this
chapter may be filed with the Secretary by a group of
agricultural commodity producers or by their duly authorized
representative. Upon receipt of the petition, the Secretary
shall promptly publish notice in the Federal Register that
the Secretary has received the petition and initiated an
investigation.
``(b) Hearings.--If the petitioner, or any other person
found by the Secretary to have a substantial interest in the
proceedings, submits not later than 10 days after the date of
the Secretary's publication under subsection (a) a request
for a hearing, the Secretary shall provide for a public
hearing and afford such interested person an opportunity to
be present, to produce evidence, and to be heard.
``(c) Group Eligibility Requirements.--The Secretary shall
certify a group of agricultural commodity producers as
eligible to apply for adjustment assistance under this
chapter if the Secretary determines--
``(1) that the national average price for the agricultural
commodity, or a class of goods within the agricultural
commodity, produced by the group for the most recent
marketing year for which the national average price is
available is less than 80 percent of the average of the
national average price for such agricultural commodity, or
such class of goods, for the 5 marketing years preceding the
most recent marketing year; and
``(2) that increases in imports of articles like or
directly competitive with the agricultural commodity, or
class of goods within the agricultural commodity, produced by
the group contributed importantly to the decline in price
described in paragraph (1).
``(d) Special Rule for Qualified Subsequent Years.--A group
of agricultural commodity producers certified as eligible
under section 293 shall be eligible to apply for assistance
under this chapter in any qualified year after the year the
group is first certified, if the Secretary determines that--
``(1) the national average price for the agricultural
commodity, or class of goods within the agricultural
commodity, produced by the group for the most recent
marketing year for which the national average price is
available is equal to or less than the price determined under
subsection (c)(1); and
``(2) the requirements of subsection (c)(2) are met.
``(e) Determination of Qualified Year and Commodity.--In
this chapter:
``(1) Qualified year.--The term `qualified year', with
respect to a group of agricultural commodity producers
certified as eligible under section 293, means each
consecutive year after the year in which the group is
certified and in which the Secretary makes the determination
under subsection (c) or (d), as the case may be.
``(2) Classes of goods within a commodity.--In any case in
which there are separate classes of goods within an
agricultural commodity, the Secretary shall treat each class
as a separate commodity in determining group eligibility, the
national average price, and level of imports under this
section and section 296.
``SEC. 293. DETERMINATIONS BY SECRETARY OF AGRICULTURE.
``(a) In General.--As soon as practicable after the date on
which a petition is filed under section 292, but in any event
not later than 40 days after that date, the Secretary shall
determine whether the petitioning group meets the
requirements of section 292 (c) or (d), as the case may be,
and shall, if the group meets the requirements, issue a
certification of eligibility to apply for assistance under
this chapter covering agricultural commodity producers in any
group that meets the requirements. Each certification shall
specify the date on which eligibility under this chapter
begins.
``(b) Notice.--Upon making a determination on a petition,
the Secretary shall promptly publish a summary of the
determination in the Federal Register, together with the
Secretary's reasons for making the determination.
[[Page H5893]]
``(c) Termination of Certification.--Whenever the Secretary
determines, with respect to any certification of eligibility
under this chapter, that the decline in price for the
agricultural commodity covered by the certification is no
longer attributable to the conditions described in section
292, the Secretary shall terminate such certification and
promptly cause notice of such termination to be published in
the Federal Register, together with the Secretary's reasons
for making such determination.
``SEC. 294. STUDY BY SECRETARY OF AGRICULTURE WHEN
INTERNATIONAL TRADE COMMISSION BEGINS
INVESTIGATION.
``(a) In General.--Whenever the International Trade
Commission (in this chapter referred to as the `Commission')
begins an investigation under section 202 with respect to an
agricultural commodity, the Commission shall immediately
notify the Secretary of the investigation. Upon receipt of
the notification, the Secretary shall immediately conduct a
study of--
``(1) the number of agricultural commodity producers
producing a like or directly competitive agricultural
commodity who have been or are likely to be certified as
eligible for adjustment assistance under this chapter, and
``(2) the extent to which the adjustment of such producers
to the import competition may be facilitated through the use
of existing programs.
``(b) Report.--Not later than 15 days after the day on
which the Commission makes its report under section 202(f),
the Secretary shall submit a report to the President setting
forth the findings of the study described in subsection (a).
Upon making the report to the President, the Secretary shall
also promptly make the report public (with the exception of
information which the Secretary determines to be
confidential) and shall have a summary of the report
published in the Federal Register.
``SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY
PRODUCERS.
``(a) In General.--The Secretary shall provide full
information to agricultural commodity producers about the
benefit allowances, training, and other employment services
available under this title and about the petition and
application procedures, and the appropriate filing dates, for
such allowances, training, and services. The Secretary shall
provide whatever assistance is necessary to enable groups to
prepare petitions or applications for program benefits under
this title.
``(b) Notice of Benefits.--
``(1) In general.--The Secretary shall mail written notice
of the benefits available under this chapter to each
agricultural commodity producer that the Secretary has reason
to believe is covered by a certification made under this
chapter.
``(2) Other notice.--The Secretary shall publish notice of
the benefits available under this chapter to agricultural
commodity producers that are covered by each certification
made under this chapter in newspapers of general circulation
in the areas in which such producers reside.
``(3) Other federal assistance.--The Secretary shall also
provide information concerning procedures for applying for
and receiving all other Federal assistance and services
available to workers facing economic distress.
``SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICULTURAL
COMMODITY PRODUCERS.
``(a) In General.--
``(1) Requirements.--Payment of a trade adjustment
allowance shall be made to an adversely affected agricultural
commodity producer covered by a certification under this
chapter who files an application for such allowance within 90
days after the date on which the Secretary makes a
determination and issues a certification of eligibility under
section 293, if the following conditions are met:
``(A) The producer submits to the Secretary sufficient
information to establish the amount of agricultural commodity
covered by the application filed under subsection (a) that
was produced by the producer in the most recent year.
``(B) The producer certifies that the producer has not
received cash benefits under any provision of this title
other than this chapter.
``(C) The producer's net farm income (as determined by the
Secretary) for the most recent year is less than the
producer's net farm income for the latest year in which no
adjustment assistance was received by the producer under this
chapter.
``(D) The producer certifies that the producer has met with
an Extension Service employee or agent to obtain, at no cost
to the producer, information and technical assistance that
will assist the producer in adjusting to import competition
with respect to the adversely affected agricultural
commodity, including--
``(i) information regarding the feasibility and
desirability of substituting 1 or more alternative
commodities for the adversely affected agricultural
commodity; and
``(ii) technical assistance that will improve the
competitiveness of the production and marketing of the
adversely affected agricultural commodity by the producer,
including yield and marketing improvements.
``(2) Limitations.--
``(A) Adjusted gross income.--
``(i) In general.--Notwithstanding any other provision of
this chapter, an agricultural commodity producer shall not be
eligible for assistance under this chapter in any year in
which the average adjusted gross income of the producer
exceeds the level set forth in section 1001D of the Food
Security Act of 1985.
``(ii) Certification.--To comply with the limitation under
subparagraph (A), an individual or entity shall provide to
the Secretary--
``(I) a certification by a certified public accountant or
another third party that is acceptable to the Secretary that
the average adjusted gross income of the producer does not
exceed the level set forth in section 1001D of the Food
Security Act of 1985; or
``(II) information and documentation regarding the adjusted
gross income of the producer through other procedures
established by the Secretary.
``(B) Counter-cyclical payments.--The total amount of
payments made to an agricultural producer under this chapter
during any crop year may not exceed the limitation on
counter-cyclical payments set forth in section 1001(c) of the
Food Security Act of 1985.
``(C) Definitions.--In this subsection:
``(i) Adjusted gross income.--The term `adjusted gross
income' means adjusted gross income of an agricultural
commodity producer--
``(I) as defined in section 62 of the Internal Revenue Code
of 1986 and implemented in accordance with procedures
established by the Secretary; and
``(II) that is earned directly or indirectly from all
agricultural and nonagricultural sources of an individual or
entity for a fiscal or corresponding crop year.
``(ii) Average adjusted gross income.--
``(I) In general.--The term `average adjusted gross income'
means the average adjusted gross income of a producer for
each of the 3 preceding taxable years.
``(II) Effective adjusted gross income.--In the case of a
producer that does not have an adjusted gross income for each
of the 3 preceding taxable years, the Secretary shall
establish rules that provide the producer with an effective
adjusted gross income for the applicable year.
``(b) Amount of Cash Benefits.--
``(1) In general.--Subject to the provisions of section
298, an adversely affected agricultural commodity producer
described in subsection (a) shall be entitled to adjustment
assistance under this chapter in an amount equal to the
product of--
``(A) one-half of the difference between--
``(i) an amount equal to 80 percent of the average of the
national average price of the agricultural commodity covered
by the application described in subsection (a) for the 5
marketing years preceding the most recent marketing year, and
``(ii) the national average price of the agricultural
commodity for the most recent marketing year, and
``(B) the amount of the agricultural commodity produced by
the agricultural commodity producer in the most recent
marketing year.
``(2) Special rule for subsequent qualified years.--The
amount of cash benefits for a qualified year shall be
determined in the same manner as cash benefits are determined
under paragraph (1) except that the average national price of
the agricultural commodity shall be determined under
paragraph (1)(A)(i) by using the 5-marketing-year period used
to determine the amount of cash benefits for the first
certification.
``(c) Maximum Amount of Cash Assistance.--The maximum
amount of cash benefits an agricultural commodity producer
may receive in any 12-month period shall not exceed $10,000.
``(d) Limitations on Other Assistance.--An agricultural
commodity producer entitled to receive a cash benefit under
this chapter--
``(1) shall not be eligible for any other cash benefit
under this title, and
``(2) shall be entitled to employment services and training
benefits under part II of subchapter B of chapter 2.
``SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.
``(a) In General.--
``(1) Repayment.--If the Secretary, or a court of competent
jurisdiction, determines that any person has received any
payment under this chapter to which the person was not
entitled, such person shall be liable to repay such amount to
the Secretary, except that the Secretary may waive such
repayment if the Secretary determines, in accordance with
guidelines prescribed by the Secretary, that--
``(A) the payment was made without fault on the part of
such person; and
``(B) requiring such repayment would be contrary to equity
and good conscience.
``(2) Recovery of overpayment.--Unless an overpayment is
otherwise recovered, or waived under paragraph (1), the
Secretary shall recover the overpayment by deductions from
any sums payable to such person under this chapter.
``(b) False Statement.--A person shall, in addition to any
other penalty provided by law, be ineligible for any further
payments under this chapter--
``(1) if the Secretary, or a court of competent
jurisdiction, determines that the person--
``(A) knowingly has made, or caused another to make, a
false statement or representation of a material fact; or
``(B) knowingly has failed, or caused another to fail, to
disclose a material fact; and
``(2) as a result of such false statement or
representation, or of such nondisclosure, such person has
received any payment under this chapter to which the person
was not entitled.
``(c) Notice and Determination.--Except for overpayments
determined by a court of competent jurisdiction, no repayment
may be required, and no deduction may be made, under this
section until a determination under subsection (a)(1) by the
Secretary has been made, notice of the determination and an
opportunity for a fair hearing thereon has been given to the
person concerned, and the determination has become final.
``(d) Payment to Treasury.--Any amount recovered under this
section shall be returned to the Treasury of the United
States.
``(e) Penalties.--Whoever makes a false statement of a
material fact knowing it to be false, or knowingly fails to
disclose a material fact, for the purpose of obtaining or
increasing for himself or for any other person any payment
authorized to be furnished under this chapter shall be fined
not more than $10,000 or imprisoned for not more than 1 year,
or both.
[[Page H5894]]
``SEC. 298. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--There are authorized to be appropriated
and there are appropriated to the Department of Agriculture
not to exceed $90,000,000 for each of the fiscal years 2003
through 2007 to carry out the purposes of this chapter.
``(b) Proportionate Reduction.--If in any year the amount
appropriated under this chapter is insufficient to meet the
requirements for adjustment assistance payable under this
chapter, the amount of assistance payable under this chapter
shall be reduced proportionately.''.
(b) Effective Date.--The amendments made by this title
shall take effect on the date that is 180 days after the date
of enactment of this Act.
SEC. 142. CONFORMING AMENDMENTS.
(a) Judicial review.--
(1) Section 284(a) of the Trade Act of 1974 (19 U.S.C.
2395(a)) is amended--
(A) by inserting ``an agricultural commodity producer (as
defined in section 291(2)) aggrieved by a determination of
the Secretary of Agriculture under section 293, '' after
``section 251 of this title,''; and
(B) in the second sentence of subsection (a) and in
subsections (b) and (c), by striking ``or the Secretary of
Commerce'' each place it appears and inserting ``, the
Secretary of Commerce, or the Secretary of Agriculture''.
(b) Chapters 6.--The table of contents for title II of the
Trade Act of 1974, as amended by subparagraph (A), is amended
by inserting after the items relating to chapter 5 the
following:
``Chapter 6--Adjustment Assistance for Farmers
``Sec. 291. Definitions.
``Sec. 292. Petitions; group eligibility.
``Sec. 293. Determinations by Secretary of Agriculture.
``Sec. 294. Study by Secretary of Agriculture when International Trade
Commission begins investigation.
``Sec. 295. Benefit information to agricultural commodity producers.
``Sec. 296. Qualifying requirements for agricultural commodity
producers.
``Sec. 297. Fraud and recovery of overpayments.
``Sec. 298. Authorization of appropriations.''.
SEC. 143. STUDY ON TAA FOR FISHERMEN.
Not later than 1 year after the date of enactment of this
Act, the Secretary of Commerce shall conduct a study and
report to Congress regarding whether a trade adjustment
assistance program is appropriate and feasible for fishermen.
For purposes of the preceding sentence, the term
``fishermen'' means any person who is engaged in commercial
fishing or is a United States fish processor.
Subtitle D--Effective Date
SEC. 151. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in sections
123(c) and 141(b), and subsections (b), (c), and (d) of this
section, the amendments made by this division shall apply to
petitions for certification filed under chapter 2 or 3 of
title II of the Trade Act of 1974 on or after the date that
is 90 days after the date of enactment of this Act.
(b) Workers Certified as Eligible Before Effective Date.--
Notwithstanding subsection (a), a worker shall continue to
receive (or be eligible to receive) trade adjustment
assistance and other benefits under chapter 2 of title II of
the Trade Act of 1974, as in effect on September 30, 2001,
for any week for which the worker meets the eligibility
requirements of such chapter 2 as in effect on such date, if
on or before such date, the worker--
(1) was certified as eligible for trade adjustment
assistance benefits under such chapter as in effect on such
date; and
(2) would otherwise be eligible to receive trade adjustment
assistance benefits under such chapter as in effect on such
date.
(c) Workers Who Became Eligible During Qualified Period.--
(1) In general.--Notwithstanding subsection (a) or any
other provision of law, including section 285 of the Trade
Act of 1974, any worker who would have been eligible to
receive trade adjustment assistance or other benefits under
chapter 2 of title II of the Trade Act of 1974 during the
qualified period if such chapter 2 had been in effect during
such period, shall be eligible to receive trade adjustment
assistance and other benefits under chapter 2 of title II of
the Trade Act of 1974, as in effect on September 30, 2001,
for any week during the qualified period for which the worker
meets the eligibility requirements of such chapter 2 as in
effect on September 30, 2001.
(2) Qualified period.--For purposes of this subsection, the
term ``qualified period'' means the period beginning on
January 11, 2002, and ending on the date that is 90 days
after the date of enactment of this Act.
(d) Adjustment Assistance for Firms.--
(1) In general.--Notwithstanding subsection (a) or any
other provision of law, including section 285 of the Trade
Act of 1974, and except as provided in paragraph (2), any
firm that would have been eligible to receive adjustment
assistance under chapter 3 of title II of the Trade Act if
1974 during the qualified period if such chapter 3 had been
in effect during such period, shall be eligible to receive
adjustment assistance under chapter 3 of title II of the
Trade Act of 1974, as in effect on September 30, 2001, for
any week during the qualified period for which the firm meets
the eligibility requirements of such chapter 3 as in effect
on September 30, 2001.
(2) Qualified period.--For purposes of this subsection, the
term ``qualified period'' means the period beginning on
October 1, 2001, and ending on the date that is 90 days after
the date of enactment of this Act.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A
BENEFIT FROM THE PENSION BENEFIT GUARANTY
CORPORATION.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 35 as
section 36 and inserting after section 34 the following new
section:
``SEC. 35. HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.
``(a) In General.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by
subtitle A an amount equal to 65 percent of the amount paid
by the taxpayer for coverage of the taxpayer and qualifying
family members under qualified health insurance for eligible
coverage months beginning in the taxable year.
``(b) Eligible Coverage Month.--For purposes of this
section--
``(1) In general.--The term `eligible coverage month' means
any month if--
``(A) as of the first day of such month, the taxpayer--
``(i) is an eligible individual,
``(ii) is covered by qualified health insurance, the
premium for which is paid by the taxpayer,
``(iii) does not have other specified coverage, and
``(iv) is not imprisoned under Federal, State, or local
authority, and
``(B) such month begins more than 90 days after the date of
the enactment of the Trade Act of 2002.
``(2) Joint returns.--In the case of a joint return, the
requirements of paragraph (1)(A) shall be treated as met with
respect to any month if at least 1 spouse satisfies such
requirements.
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual' means--
``(A) an eligible TAA recipient,
``(B) an eligible alternative TAA recipient, and
``(C) an eligible PBGC pension recipient.
``(2) Eligible taa recipient.--The term `eligible TAA
recipient' means, with respect to any month, any individual
who is receiving for any day of such month a trade
readjustment allowance under chapter 2 of title II of the
Trade Act of 1974 or who would be eligible to receive such
allowance if section 231 of such Act were applied without
regard to subsection (a)(3)(B) of such section. An individual
shall continue to be treated as an eligible TAA recipient
during the first month that such individual would otherwise
cease to be an eligible TAA recipient by reason of the
preceding sentence.
``(3) Eligible alternative taa recipient.--The term
`eligible alternative TAA recipient' means, with respect to
any month, any individual who--
``(A) is a worker described in section 246(a)(3)(B) of the
Trade Act of 1974 who is participating in the program
established under section 246(a)(1) of such Act, and
``(B) is receiving a benefit for such month under section
246(a)(2) of such Act.
An individual shall continue to be treated as an eligible
alternative TAA recipient during the first month that such
individual would otherwise cease to be an eligible
alternative TAA recipient by reason of the preceding
sentence.
``(4) Eligible pbgc pension recipient.--The term `eligible
PBGC pension recipient' means, with respect to any month, any
individual who--
``(A) has attained age 55 as of the first day of such
month, and
``(B) is receiving a benefit for such month any portion of
which is paid by the Pension Benefit Guaranty Corporation
under title IV of the Employee Retirement Income Security Act
of 1974.
``(d) Qualifying Family Member.--For purposes of this
section--
``(1) In general.--The term `qualifying family member'
means--
``(A) the taxpayer's spouse, and
``(B) any dependent of the taxpayer with respect to whom
the taxpayer is entitled to a deduction under section 151(c).
Such term does not include any individual who has other
specified coverage.
``(2) Special dependency test in case of divorced parents,
etc.--If paragraph (2) or (4) of section 152(e) applies to
any child with respect to any calendar year, in the case of
any taxable year beginning in such calendar year, such child
shall be treated as described in paragraph (1)(B) with
respect to the custodial parent (within the meaning of
section 152(e)(1)) and not with respect to the noncustodial
parent.
``(e) Qualified Health Insurance.--For purposes of this
section--
``(1) In general.--The term `qualified health insurance'
means any of the following:
``(A) Coverage under a COBRA continuation provision (as
defined in section 9832(d)(1)).
``(B) State-based continuation coverage provided by the
State under a State law that requires such coverage.
``(C) Coverage offered through a qualified State high risk
pool (as defined in section 2744(c)(2) of the Public Health
Service Act).
``(D) Coverage under a health insurance program offered for
State employees.
``(E) Coverage under a State-based health insurance program
that is comparable to the health insurance program offered
for State employees.
``(F) Coverage through an arrangement entered into by a
State and--
``(i) a group health plan (including such a plan which is a
multiemployer plan as defined in section 3(37) of the
Employee Retirement Income Security Act of 1974),
``(ii) an issuer of health insurance coverage,
``(iii) an administrator, or
[[Page H5895]]
``(iv) an employer.
``(G) Coverage offered through a State arrangement with a
private sector health care coverage purchasing pool.
``(H) Coverage under a State-operated health plan that does
not receive any Federal financial participation.
``(I) Coverage under a group health plan that is available
through the employment of the eligible individual's spouse.
``(J) In the case of any eligible individual and such
individual's qualifying family members, coverage under
individual health insurance if the eligible individual was
covered under individual health insurance during the entire
30-day period that ends on the date that such individual
became separated from the employment which qualified such
individual for--
``(i) in the case of an eligible TAA recipient, the
allowance described in subsection (c)(2),
``(ii) in the case of an eligible alternative TAA
recipient, the benefit described in subsection (c)(3)(B), or
``(iii) in the case of any eligible PBGC pension recipient,
the benefit described in subsection (c)(4)(B).
For purposes of this subparagraph, the term `individual
health insurance' means any insurance which constitutes
medical care offered to individuals other than in connection
with a group health plan and does not include Federal- or
State-based health insurance coverage.
``(2) Requirements for state-based coverage.--
``(A) In general.--The term `qualified health insurance'
does not include any coverage described in subparagraphs (B)
through (H) of paragraph (1) unless the State involved has
elected to have such coverage treated as qualified health
insurance under this section and such coverage meets the
following requirements:
``(i) Guaranteed issue.--Each qualifying individual is
guaranteed enrollment if the individual pays the premium for
enrollment or provides a qualified health insurance costs
credit eligibility certificate described in section 7527 and
pays the remainder of such premium.
``(ii) No imposition of preexisting condition exclusion.--
No pre-existing condition limitations are imposed with
respect to any qualifying individual.
``(iii) Nondiscriminatory premium.--The total premium (as
determined without regard to any subsidies) with respect to a
qualifying individual may not be greater than the total
premium (as so determined) for a similarly situated
individual who is not a qualifying individual.
``(iv) Same benefits.--Benefits under the coverage are the
same as (or substantially similar to) the benefits provided
to similarly situated individuals who are not qualifying
individuals.
``(B) Qualifying individual.--For purposes of this
paragraph, the term `qualifying individual' means--
``(i) an eligible individual for whom, as of the date on
which the individual seeks to enroll in the coverage
described in subparagraphs (B) through (H) of paragraph (1),
the aggregate of the periods of creditable coverage (as
defined in section 9801(c)) is 3 months or longer and who,
with respect to any month, meets the requirements of clauses
(iii) and (iv) of subsection (b)(1)(A); and
``(ii) the qualifying family members of such eligible
individual.
``(3) Exception.--The term `qualified health insurance'
shall not include--
``(A) a flexible spending or similar arrangement, and
``(B) any insurance if substantially all of its coverage is
of excepted benefits described in section 9832(c).
``(f) Other Specified Coverage.--For purposes of this
section, an individual has other specified coverage for any
month if, as of the first day of such month--
``(1) Subsidized coverage.--
``(A) In general.--Such individual is covered under any
insurance which constitutes medical care (except insurance
substantially all of the coverage of which is of excepted
benefits described in section 9832(c)) under any health plan
maintained by any employer (or former employer) of the
taxpayer or the taxpayer's spouse and at least 50 percent of
the cost of such coverage (determined under section 4980B) is
paid or incurred by the employer.
``(B) Eligible alternative taa recipients.--In the case of
an eligible alternative TAA recipient, such individual is
either--
``(i) eligible for coverage under any qualified health
insurance (other than insurance described in subparagraph
(A), (B), or (F) of subsection (e)(1)) under which at least
50 percent of the cost of coverage (determined under section
4980B(f)(4)) is paid or incurred by an employer (or former
employer) of the taxpayer or the taxpayer's spouse, or
``(ii) covered under any such qualified health insurance
under which any portion of the cost of coverage (as so
determined) is paid or incurred by an employer (or former
employer) of the taxpayer or the taxpayer's spouse.
``(C) Treatment of cafeteria plans.--For purposes of
subparagraphs (A) and (B), the cost of coverage shall be
treated as paid or incurred by an employer to the extent the
coverage is in lieu of a right to receive cash or other
qualified benefits under a cafeteria plan (as defined in
section 125(d)).
``(2) Coverage under medicare, medicaid, or schip.--Such
individual--
``(A) is entitled to benefits under part A of title XVIII
of the Social Security Act or is enrolled under part B of
such title, or
``(B) is enrolled in the program under title XIX or XXI of
such Act (other than under section 1928 of such Act).
``(3) Certain other coverage.--Such individual--
``(A) is enrolled in a health benefits plan under chapter
89 of title 5, United States Code, or
``(B) is entitled to receive benefits under chapter 55 of
title 10, United States Code.
``(g) Special Rules.--
``(1) Coordination with advance payments of credit.--With
respect to any taxable year, the amount which would (but for
this subsection) be allowed as a credit to the taxpayer under
subsection (a) shall be reduced (but not below zero) by the
aggregate amount paid on behalf of such taxpayer under
section 7527 for months beginning in such taxable year.
``(2) Coordination with other deductions.--Amounts taken
into account under subsection (a) shall not be taken into
account in determining any deduction allowed under section
162(l) or 213.
``(3) MSA distributions.--Amounts distributed from an
Archer MSA (as defined in section 220(d)) shall not be taken
into account under subsection (a).
``(4) Denial of credit to dependents.--No credit shall be
allowed under this section to any individual with respect to
whom a deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(5) Both spouses eligible individuals.--The spouse of the
taxpayer shall not be treated as a qualifying family member
for purposes of subsection (a), if--
``(A) the taxpayer is married at the close of the taxable
year,
``(B) the taxpayer and the taxpayer's spouse are both
eligible individuals during the taxable year, and
``(C) the taxpayer files a separate return for the taxable
year.
``(6) Marital status; certain married individuals living
apart.--Rules similar to the rules of paragraphs (3) and (4)
of section 21(e) shall apply for purposes of this section.
``(7) Insurance which covers other individuals.--For
purposes of this section, rules similar to the rules of
section 213(d)(6) shall apply with respect to any contract
for qualified health insurance under which amounts are
payable for coverage of an individual other than the taxpayer
and qualifying family members.
``(8) Treatment of payments.--For purposes of this
section--
``(A) Payments by secretary.--Payments made by the
Secretary on behalf of any individual under section 7527
(relating to advance payment of credit for health insurance
costs of eligible individuals) shall be treated as having
been made by the taxpayer on the first day of the month for
which such payment was made.
``(B) Payments by taxpayer.--Payments made by the taxpayer
for eligible coverage months shall be treated as having been
made by the taxpayer on the first day of the month for which
such payment was made.
``(9) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section, section 6050T, and
section 7527.''.
(b) Promotion of State High Risk Pools.--Title XXVII of the
Public Health Service Act is amended by inserting after
section 2744 the following new section:
``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
``(a) Seed Grants to States.--The Secretary shall provide
from the funds appropriated under subsection (c)(1) a grant
of up to $1,000,000 to each State that has not created a
qualified high risk pool as of the date of the enactment of
this section for the State's costs of creation and initial
operation of such a pool.
``(b) Matching Funds for Operation of Pools.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool that--
``(A) restricts premiums charged under the pool to no more
than 150 percent of the premium for applicable standard risk
rates;
``(B) offers a choice of two or more coverage options
through the pool; and
``(C) has in effect a mechanism reasonably designed to
ensure continued funding of losses incurred by the State
after the end of fiscal year 2004 in connection with
operation of the pool;
the Secretary shall provide, from the funds appropriated
under subsection (c)(2) and allotted to the State under
paragraph (2), a grant of up to 50 percent of the losses
incurred by the State in connection with the operation of the
pool.
``(2) Allotment.--The amounts appropriated under subsection
(c)(2) for a fiscal year shall be made available to the
States in accordance with a formula that is based upon the
number of uninsured individuals in the States.
``(c) Funding.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are
authorized and appropriated--
``(1) $20,000,000 for fiscal year 2003 to carry out
subsection (a); and
``(2) $40,000,000 for each of fiscal years 2003 and 2004 to
carry out subsection (b).
Funds appropriated under this subsection for a fiscal year
shall remain available for obligation through the end of the
following fiscal year. Nothing in this section shall be
construed as providing a State with an entitlement to a grant
under this section.
``(d) Qualified High Risk Pool and State Defined.--For
purposes of this section, the term `qualified high risk pool'
has the meaning given such term in section 2744(c)(2) and the
term `State' means any of the 50 States and the District of
Columbia.''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 35 of such Code''.
(2) The table of sections for subpart C of part IV of
chapter 1 of the Internal Revenue Code of
[[Page H5896]]
1986 is amended by striking the last item and inserting the
following new items:
``Sec. 35. Health insurance costs of eligible individuals.
``Sec. 36. Overpayments of tax.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2001.
(2) State high risk pools.--The amendment made by
subsection (b) shall take effect on the date of the enactment
of this Act.
SEC. 202. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE
COSTS OF ELIGIBLE INDIVIDUALS.
(a) In General.--Chapter 77 of the Internal Revenue Code of
1986 (relating to miscellaneous provisions) is amended by
adding at the end the following new section:
``SEC. 7527. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE
COSTS OF ELIGIBLE INDIVIDUALS.
``(a) General Rule.--Not later than August 1, 2003, the
Secretary shall establish a program for making payments on
behalf of certified individuals to providers of qualified
health insurance (as defined in section 35(e)) for such
individuals.
``(b) Limitation on Advance Payments During any Taxable
Year.--The Secretary may make payments under subsection (a)
only to the extent that the total amount of such payments
made on behalf of any individual during the taxable year does
not exceed 65 percent of the amount paid by the taxpayer for
coverage of the taxpayer and qualifying family members under
qualified health insurance for eligible coverage months
beginning in the taxable year.
``(c) Certified Individual.--For purposes of this section,
the term `certified individual' means any individual for whom
a qualified health insurance costs credit eligibility
certificate is in effect.
``(d) Qualified Health Insurance Costs Credit Eligibility
Certificate.--For purposes of this section, the term
`qualified health insurance costs credit eligibility
certificate' means any written statement that an individual
is an eligible individual (as defined in section 35(c)) if
such statement provides such information as the Secretary may
require for purposes of this section and--
``(1) in the case of an eligible TAA recipient (as defined
in section 35(c)(2)) or an eligible alternative TAA recipient
(as defined in section 35(c)(3)), is certified by the
Secretary of Labor (or by any other person or entity
designated by the Secretary), or
``(2) in the case of an eligible PBGC pension recipient (as
defined in section 35(c)(4)), is certified by the Pension
Benefit Guaranty Corporation (or by any other person or
entity designated by the Secretary).''.
(b) Disclosure of Return Information for Purposes of
Carrying out a Program for Advance Payment of Credit for
Health Insurance Costs of Eligible Individuals.--
(1) In general.--Subsection (l) of section 6103 of such
Code (relating to disclosure of returns and return
information for purposes other than tax administration) is
amended by adding at the end the following new paragraph:
``(18) Disclosure of return information for purposes of
carrying out a program for advance payment of credit for
health insurance costs of eligible individuals.--The
Secretary may disclose to providers of health insurance for
any certified individual (as defined in section 7527(c))
return information with respect to such certified individual
only to the extent necessary to carry out the program
established by section 7527 (relating to advance payment of
credit for health insurance costs of eligible
individuals).''.
(2) Procedures and recordkeeping related to disclosures.--
Subsection (p) of such section is amended--
(A) in paragraph (3)(A) by striking ``or (17)'' and
inserting ``(17), or (18)'', and
(B) in paragraph (4) by inserting ``or (17)'' after ``any
other person described in subsection (l)(16)'' each place it
appears.
(3) Unauthorized inspection of returns or return
information.--Section 7213A(a)(1)(B) of such Code is amended
by striking ``section 6103(n)'' and inserting ``subsection
(l)(18) or (n) of section 6103''.
(c) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 (relating to
information concerning transactions with other persons) is
amended by inserting after section 6050S the following new
section:
``SEC. 6050T. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE
COSTS OF ELIGIBLE INDIVIDUALS.
``(a) Requirement of Reporting.--Every person who is
entitled to receive payments for any month of any calendar
year under section 7527 (relating to advance payment of
credit for health insurance costs of eligible individuals)
with respect to any certified individual (as defined in
section 7527(c)) shall, at such time as the Secretary may
prescribe, make the return described in subsection (b) with
respect to each such individual.
``(b) Form and Manner of Returns.--A return is described in
this subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of each individual
referred to in subsection (a),
``(B) the number of months for which amounts were entitled
to be received with respect to such individual under section
7527 (relating to advance payment of credit for health
insurance costs of eligible individuals),
``(C) the amount entitled to be received for each such
month, and
``(D) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Individuals With
Respect to Whom Information Is Required.--Every person
required to make a return under subsection (a) shall furnish
to each individual whose name is required to be set forth in
such return a written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact
for such person, and
``(2) the information required to be shown on the return
with respect to such individual.
The written statement required under the preceding sentence
shall be furnished on or before January 31 of the year
following the calendar year for which the return under
subsection (a) is required to be made.''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such Code
(relating to definitions) is amended by redesignating clauses
(xi) through (xvii) as clauses (xii) through (xviii),
respectively, and by inserting after clause (x) the following
new clause:
``(xi) section 6050T (relating to returns relating to
credit for health insurance costs of eligible
individuals),''.
(B) Paragraph (2) of section 6724(d) of such Code is
amended by striking ``or'' at the end of subparagraph (Z), by
striking the period at the end of subparagraph (AA) and
inserting ``, or'', and by adding after subparagraph (AA) the
following new subparagraph:
``(BB) section 6050T (relating to returns relating to
credit for health insurance costs of eligible
individuals).''.
(d) Clerical Amendments.--
(1) Advance payment.--The table of sections for chapter 77
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Sec. 7527. Advance payment of credit for health insurance costs of
eligible individuals.''.
(2) Information reporting.--The table of sections for
subpart B of part III of subchapter A of chapter 61 of such
Code is amended by inserting after the item relating to
section 6050S the following new item:
``Sec. 6050T. Returns relating to credit for health insurance costs of
eligible individuals.''.
(e) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 203. HEALTH INSURANCE ASSISTANCE FOR ELIGIBLE
INDIVIDUALS.
(a) Eligibility for Grants.--Section 173(a) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(a)) is
amended--
(1) in paragraph (2), by striking ``and'' at the end;
(2) in paragraph (3), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(4) from funds appropriated under section 174(c)--
``(A) to a State or entity (as defined in section
173(c)(1)(B)) to carry out subsection (f), including
providing assistance to eligible individuals; and
``(B) to a State or entity (as so defined) to carry out
subsection (g), including providing assistance to eligible
individuals.''.
(b) Use of Funds for Health Insurance Coverage.--Section
173 of the Workforce Investment Act of 1998 (29 U.S.C. 2918)
is amended by adding at the end the following:
``(f) Health Insurance Coverage Assistance for Eligible
Individuals.--
``(1) In general.--Funds made available to a State or
entity under paragraph (4)(A) of subsection (a) may be used
by the State or entity for the following:
``(A) Health insurance coverage.--To assist an eligible
individual and such individual's qualifying family members in
enrolling in qualified health insurance.
``(B) Administrative and start-up expenses.--To pay the
administrative expenses related to the enrollment of eligible
individuals and such individuals' qualifying family members
in qualified health insurance, including--
``(i) eligibility verification activities;
``(ii) the notification of eligible individuals of
available qualified health insurance options;
``(iii) processing qualified health insurance costs credit
eligibility certificates provided for under section 7527 of
the Internal Revenue Code of 1986;
``(iv) providing assistance to eligible individuals in
enrolling in qualified health insurance;
``(v) the development or installation of necessary data
management systems; and
``(vi) any other expenses determined appropriate by the
Secretary, including start-up costs and on going
administrative expenses to carry out clauses (iv) through
(ix) of paragraph (2)(A).
``(2) Qualified health insurance.--For purposes of this
subsection and subsection (g)--
``(A) In general.--The term `qualified health insurance'
means any of the following:
``(i) Coverage under a COBRA continuation provision (as
defined in section 733(d)(1) of the Employee Retirement
Income Security Act of 1974).
``(ii) State-based continuation coverage provided by the
State under a State law that requires such coverage.
``(iii) Coverage offered through a qualified State high
risk pool (as defined in section 2744(c)(2) of the Public
Health Service Act).
``(iv) Coverage under a health insurance program offered
for State employees.
[[Page H5897]]
``(v) Coverage under a State-based health insurance program
that is comparable to the health insurance program offered
for State employees.
``(vi) Coverage through an arrangement entered into by a
State and--
``(I) a group health plan (including such a plan which is a
multiemployer plan as defined in section 3(37) of the
Employee Retirement Income Security Act of 1974),
``(II) an issuer of health insurance coverage,
``(III) an administrator, or
``(IV) an employer.
``(vii) Coverage offered through a State arrangement with a
private sector health care coverage purchasing pool.
``(viii) Coverage under a State-operated health plan that
does not receive any Federal financial participation.
``(ix) Coverage under a group health plan that is available
through the employment of the eligible individual's spouse.
``(x) In the case of any eligible individual and such
individual's qualifying family members, coverage under
individual health insurance if the eligible individual was
covered under individual health insurance during the entire
30-day period that ends on the date that such individual
became separated from the employment which qualified such
individual for--
``(I) in the case of an eligible TAA recipient, the
allowance described in section 35(c)(2) of the Internal
Revenue Code of 1986,
``(II) in the case of an eligible alternative TAA
recipient, the benefit described in section 35(c)(3)(B) of
such Code, or
``(III) in the case of any eligible PBGC pension recipient,
the benefit described in section 35(c)(4)(B) of such Code.
For purposes of this clause, the term `individual health
insurance' means any insurance which constitutes medical care
offered to individuals other than in connection with a group
health plan and does not include Federal- or State-based
health insurance coverage.
``(B) Requirements for state-based coverage.--
``(i) In general.--The term `qualified health insurance'
does not include any coverage described in clauses (ii)
through (viii) of subparagraph (A) unless the State involved
has elected to have such coverage treated as qualified health
insurance under this paragraph and such coverage meets the
following requirements:
``(I) Guaranteed issue.--Each qualifying individual is
guaranteed enrollment if the individual pays the premium for
enrollment or provides a qualified health insurance costs
credit eligibility certificate described in section 7527 of
the Internal Revenue Code of 1986 and pays the remainder of
such premium.
``(II) No imposition of preexisting condition exclusion.--
No pre-existing condition limitations are imposed with
respect to any qualifying individual.
``(III) Nondiscriminatory premium.--The total premium (as
determined without regard to any subsidies) with respect to a
qualifying individual may not be greater than the total
premium (as so determined) for a similarly situated
individual who is not a qualifying individual.
``(IV) Same benefits.--Benefits under the coverage are the
same as (or substantially similar to) the benefits provided
to similarly situated individuals who are not qualifying
individuals.
``(ii) Qualifying individual.--For purposes of this
subparagraph, the term `qualifying individual' means--
``(I) an eligible individual for whom, as of the date on
which the individual seeks to enroll in clauses (ii) through
(viii) of subparagraph (A), the aggregate of the periods of
creditable coverage (as defined in section 9801(c) of the
Internal Revenue Code of 1986) is 3 months or longer and who,
with respect to any month, meets the requirements of clauses
(iii) and (iv) of section 35(b)(1)(A) of such Code; and
``(II) the qualifying family members of such eligible
individual.
``(C) Exception.--The term `qualified health insurance'
shall not include--
``(i) a flexible spending or similar arrangement, and
``(ii) any insurance if substantially all of its coverage
is of excepted benefits described in section 733(c) of the
Employee Retirement Income Security Act of 1974.
``(3) Availability of funds.--
``(A) Expedited procedures.--With respect to applications
submitted by States or entities for grants under this
subsection, the Secretary shall--
``(i) not later than 15 days after the date on which the
Secretary receives a completed application from a State or
entity, notify the State or entity of the determination of
the Secretary with respect to the approval or disapproval of
such application;
``(ii) in the case of an application of a State or other
entity that is disapproved by the Secretary, provide
technical assistance, at the request of the State or entity,
in a timely manner to enable the State or entity to submit an
approved application; and
``(iii) develop procedures to expedite the provision of
funds to States and entities with approved applications.
``(B) Availability and distribution of funds.--The
Secretary shall ensure that funds made available under
section 174(c)(1)(A) to carry out subsection (a)(4)(A) are
available to States and entities throughout the period
described in section 174(c)(2)(A).
``(4) Eligible individual defined.--For purposes of this
subsection and subsection (g), the term `eligible individual'
means--
``(A) an eligible TAA recipient (as defined in section
35(c)(2) of the Internal Revenue Code of 1986),
``(B) an eligible alternative TAA recipient (as defined in
section 35(c)(3) of the Internal Revenue Code of 1986), and
``(C) an eligible PBGC pension recipient (as defined in
section 35(c)(4) of the Internal Revenue Code of 1986),
who, as of the first day of the month, does not have other
specified coverage and is not imprisoned under Federal,
State, or local authority.
``(5) Qualifying family member defined.--For purposes of
this subsection and subsection (g)--
``(A) In general.--The term `qualifying family member'
means--
``(i) the eligible individual's spouse, and
``(ii) any dependent of the eligible individual with
respect to whom the individual is entitled to a deduction
under section 151(c) of the Internal Revenue Code of 1986.
Such term does not include any individual who has other
specified coverage.
``(B) Special dependency test in case of divorced parents,
etc.--If paragraph (2) or (4) of section 152(e) of such Code
applies to any child with respect to any calendar year, in
the case of any taxable year beginning in such calendar year,
such child shall be treated as described in subparagraph
(A)(ii) with respect to the custodial parent (within the
meaning of section 152(e)(1) of such Code) and not with
respect to the noncustodial parent.
``(6) State.--For purposes of this subsection and
subsection (g), the term `State' includes an entity as
defined in subsection (c)(1)(B).
``(7) Other specified coverage.--For purposes of this
subsection, an individual has other specified coverage for
any month if, as of the first day of such month--
``(A) Subsidized coverage.--
``(i) In general.--Such individual is covered under any
insurance which constitutes medical care (except insurance
substantially all of the coverage of which is of excepted
benefits described in section 9832(c) of the Internal Revenue
Code of 1986) under any health plan maintained by any
employer (or former employer) of the taxpayer or the
taxpayer's spouse and at least 50 percent of the cost of such
coverage (determined under section 4980B of such Code) is
paid or incurred by the employer.
``(ii) Eligible alternative taa recipients.--In the case of
an eligible alternative TAA recipient (as defined in section
35(c)(3) of the Internal Revenue Code of 1986), such
individual is either--
``(I) eligible for coverage under any qualified health
insurance (other than insurance described in clause (i),
(ii), or (vi) of paragraph (2)(A)) under which at least 50
percent of the cost of coverage (determined under section
4980B(f)(4) of such Code) is paid or incurred by an employer
(or former employer) of the taxpayer or the taxpayer's
spouse, or
``(II) covered under any such qualified health insurance
under which any portion of the cost of coverage (as so
determined) is paid or incurred by an employer (or former
employer) of the taxpayer or the taxpayer's spouse.
``(iii) Treatment of cafeteria plans.--For purposes of
clauses (i) and (ii), the cost of coverage shall be treated
as paid or incurred by an employer to the extent the coverage
is in lieu of a right to receive cash or other qualified
benefits under a cafeteria plan (as defined in section 125(d)
of the Internal Revenue Code of 1986).
``(B) Coverage under medicare, medicaid, or schip.--Such
individual--
``(i) is entitled to benefits under part A of title XVIII
of the Social Security Act or is enrolled under part B of
such title, or
``(ii) is enrolled in the program under title XIX or XXI of
such Act (other than under section 1928 of such Act).
``(C) Certain other coverage.--Such individual--
``(i) is enrolled in a health benefits plan under chapter
89 of title 5, United States Code, or
``(ii) is entitled to receive benefits under chapter 55 of
title 10, United States Code.
``(g) Interim Health Insurance Coverage and Other
Assistance.--
``(1) In general.--Funds made available to a State or
entity under paragraph (4)(B) of subsection (a) may be used
by the State or entity to provide assistance and support
services to eligible individuals, including health care
coverage to the extent provided under subsection (f)(1)(A),
transportation, child care, dependent care, and income
assistance.
``(2) Income support.--With respect to any income
assistance provided to an eligible individual with such
funds, such assistance shall supplement and not supplant
other income support or assistance provided under chapter 2
of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.)
(as in effect on the day before the effective date of the
Trade Act of 2002) or the unemployment compensation laws of
the State where the eligible individual resides.
``(3) Health insurance coverage.--With respect to any
assistance provided to an eligible individual with such funds
in enrolling in qualified health insurance, the following
rules shall apply:
``(A) The State or entity may provide assistance in
obtaining such coverage to the eligible individual and to
such individual's qualifying family members.
``(B) Such assistance shall supplement and may not supplant
any other State or local funds used to provide health care
coverage and may not be included in determining the amount of
non-Federal contributions required under any program.
``(4) Availability of funds.--
``(A) Expedited procedures.--With respect to applications
submitted by States or entities for grants under this
subsection, the Secretary shall--
``(i) not later than 15 days after the date on which the
Secretary receives a completed application from a State or
entity, notify the State or entity of the determination of
the Secretary with
[[Page H5898]]
respect to the approval or disapproval of such application;
``(ii) in the case of an application of a State or entity
that is disapproved by the Secretary, provide technical
assistance, at the request of the State or entity, in a
timely manner to enable the State or entity to submit an
approved application; and
``(iii) develop procedures to expedite the provision of
funds to States and entities with approved applications.
``(B) Availability and distribution of funds.--The
Secretary shall ensure that funds made available under
section 174(c)(1)(B) to carry out subsection (a)(4)(B) are
available to States and entities throughout the period
described in section 174(c)(2)(B).
``(5) Inclusion of certain individuals as eligible
individuals.--For purposes of this subsection, the term
`eligible individual' includes an individual who is a member
of a group of workers certified after April 1, 2002, under
chapter 2 of title II of the Trade Act of 1974 (as in effect
on the day before the effective date of the Trade Act of
2002) and is participating in the trade readjustment
allowance program under such chapter (as so in effect) or who
would be determined to be participating in such program under
such chapter (as so in effect) if such chapter were applied
without regard to section 231(a)(3)(B) of the Trade Act of
1974 (as so in effect).''.
(c) Authorization of Appropriations.--Section 174 of the
Workforce Investment Act of 1998 (29 U.S.C. 2919) is amended
by adding at the end the following:
``(c) Assistance for Eligible Workers.--
``(1) Authorization and appropriation for fiscal year
2002.--There are authorized to be appropriated and
appropriated--
``(A) to carry out subsection (a)(4)(A) of section 173,
$10,000,000 for fiscal year 2002; and
``(B) to carry out subsection (a)(4)(B) of section 173,
$50,000,000 for fiscal year 2002.
``(2) Authorization of appropriations for subsequent fiscal
years.--There are authorized to be appropriated--
``(A) to carry out subsection (a)(4)(A) of section 173,
$60,000,000 for each of fiscal years 2003 through 2007; and
``(B) to carry out subsection (a)(4)(B) of section 173--
``(i) $100,000,000 for fiscal year 2003; and
``(ii) $50,000,000 for fiscal year 2004.
``(3) Availability of funds.--Funds appropriated pursuant
to--
``(A) paragraphs (1)(A) and (2)(A) for each fiscal year
shall, notwithstanding section 189(g), remain available for
obligation during the pendency of any outstanding claim under
the Trade Act of 1974, as amended by the Trade Act of 2002;
and
``(B) paragraph (1)(B) and (2)(B), for each fiscal year
shall, notwithstanding section 189(g), remain available
during the period that begins on the date of enactment of the
Trade Act of 2002 and ends on September 30, 2004.''.
(d) Conforming Amendment.--Section 132(a)(2)(A) of the
Workforce Investment Act of 1998 (29 U.S.C. 2862(a)(2)(A)) is
amended by inserting ``, other than under subsection (a)(4),
(f), and (g)'' after ``grants''.
(e) Temporary Extension of COBRA Election Period for
Certain Individuals.--
(1) ERISA amendments.--Section 605 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1165) is
amended--
(A) by inserting ``(a) In General.--'' before ``For
purposes of this part''; and
(B) by adding at the end the following:
``(b) Temporary Extension of COBRA Election Period for
Certain Individuals.--
``(1) In general.--In the case of a nonelecting TAA-
eligible individual and notwithstanding subsection (a), such
individual may elect continuation coverage under this part
during the 60-day period that begins on the first day of the
month in which the individual becomes a TAA-eligible
individual, but only if such election is made not later than
6 months after the date of the TAA-related loss of coverage.
``(2) Commencement of coverage; no reach-back.--Any
continuation coverage elected by a TAA-eligible individual
under paragraph (1) shall commence at the beginning of the
60-day election period described in such paragraph and shall
not include any period prior to such 60-day election period.
``(3) Preexisting conditions.--With respect to an
individual who elects continuation coverage pursuant to
paragraph (1), the period--
``(A) beginning on the date of the TAA-related loss of
coverage, and
``(B) ending on the first day of the 60-day election period
described in paragraph (1),
shall be disregarded for purposes of determining the 63-day
periods referred to in section 701(c)(2), section 2701(c)(2)
of the Public Health Service Act, and section 9801(c)(2) of
the Internal Revenue Code of 1986.
``(4) Definitions.--For purposes of this subsection:
``(A) Nonelecting taa-eligible individual.--The term
`nonelecting TAA-eligible individual' means a TAA-eligible
individual who--
``(i) has a TAA-related loss of coverage; and
``(ii) did not elect continuation coverage under this part
during the TAA-related election period.
``(B) TAA-eligible individual.--The term `TAA-eligible
individual' means--
``(i) an eligible TAA recipient (as defined in paragraph
(2) of section 35(c) of the Internal Revenue Code of 1986),
and
``(ii) an eligible alternative TAA recipient (as defined in
paragraph (3) of such section).
``(C) TAA-related election period.--The term `TAA-related
election period' means, with respect to a TAA-related loss of
coverage, the 60-day election period under this part which is
a direct consequence of such loss.
``(D) TAA-related loss of coverage.--The term `TAA-related
loss of coverage' means, with respect to an individual whose
separation from employment gives rise to being an TAA-
eligible individual, the loss of health benefits coverage
associated with such separation.''.
(2) PHSA amendments.--Section 2205 of the Public Health
Service Act (42 U.S.C. 300bb-5) is amended--
(A) by inserting ``(a) In General.--'' before ``For
purposes of this title''; and
(B) by adding at the end the following:
``(b) Temporary Extension of COBRA Election Period for
Certain Individuals.--
``(1) In general.--In the case of a nonelecting TAA-
eligible individual and notwithstanding subsection (a), such
individual may elect continuation coverage under this title
during the 60-day period that begins on the first day of the
month in which the individual becomes a TAA-eligible
individual, but only if such election is made not later than
6 months after the date of the TAA-related loss of coverage.
``(2) Commencement of coverage; no reach-back.--Any
continuation coverage elected by a TAA-eligible individual
under paragraph (1) shall commence at the beginning of the
60-day election period described in such paragraph and shall
not include any period prior to such 60-day election period.
``(3) Preexisting conditions.--With respect to an
individual who elects continuation coverage pursuant to
paragraph (1), the period--
``(A) beginning on the date of the TAA-related loss of
coverage, and
``(B) ending on the first day of the 60-day election period
described in paragraph (1),
shall be disregarded for purposes of determining the 63-day
periods referred to in section 2701(c)(2), section 701(c)(2)
of the Employee Retirement Income Security Act of 1974, and
section 9801(c)(2) of the Internal Revenue Code of 1986.
``(4) Definitions.--For purposes of this subsection:
``(A) Nonelecting taa-eligible individual.--The term
`nonelecting TAA-eligible individual' means a TAA-eligible
individual who--
``(i) has a TAA-related loss of coverage; and
``(ii) did not elect continuation coverage under this part
during the TAA-related election period.
``(B) TAA-eligible individual.--The term `TAA-eligible
individual' means--
``(i) an eligible TAA recipient (as defined in paragraph
(2) of section 35(c) of the Internal Revenue Code of 1986),
and
``(ii) an eligible alternative TAA recipient (as defined in
paragraph (3) of such section).
``(C) TAA-related election period.--The term `TAA-related
election period' means, with respect to a TAA-related loss of
coverage, the 60-day election period under this part which is
a direct consequence of such loss.
``(D) TAA-related loss of coverage.--The term `TAA-related
loss of coverage' means, with respect to an individual whose
separation from employment gives rise to being an TAA-
eligible individual, the loss of health benefits coverage
associated with such separation.''.
(3) IRC amendments.--Paragraph (5) of section 4980B(f) of
the Internal Revenue Code of 1986 (relating to election) is
amended by adding at the end the following:
``(C) Temporary extension of cobra election period for
certain individuals.--
``(i) In general.--In the case of a nonelecting TAA-
eligible individual and notwithstanding subparagraph (A),
such individual may elect continuation coverage under this
subsection during the 60-day period that begins on the first
day of the month in which the individual becomes a TAA-
eligible individual, but only if such election is made not
later than 6 months after the date of the TAA-related loss of
coverage.
``(ii) Commencement of coverage; no reach-back.--Any
continuation coverage elected by a TAA-eligible individual
under clause (i) shall commence at the beginning of the 60-
day election period described in such paragraph and shall not
include any period prior to such 60-day election period.
``(iii) Preexisting conditions.--With respect to an
individual who elects continuation coverage pursuant to
clause (i), the period--
``(I) beginning on the date of the TAA-related loss of
coverage, and
``(II) ending on the first day of the 60-day election
period described in clause (i),
shall be disregarded for purposes of determining the 63-day
periods referred to in section 9801(c)(2), section 701(c)(2)
of the Employee Retirement Income Security Act of 1974, and
section 2701(c)(2) of the Public Health Service Act.
``(iv) Definitions.--For purposes of this subsection:
``(I) Nonelecting taa-eligible individual.--The term
`nonelecting TAA-eligible individual' means a TAA-eligible
individual who has a TAA-related loss of coverage and did not
elect continuation coverage under this subsection during the
TAA-related election period.
``(II) TAA-eligible individual.--The term `TAA-eligible
individual' means an eligible TAA recipient (as defined in
paragraph (2) of section 35(c)) and an eligible alternative
TAA recipient (as defined in paragraph (3) of such section).
``(III) TAA-related election period.--The term `TAA-related
election period' means, with respect to a TAA-related loss of
coverage, the 60-day election period under this subsection
which is a direct consequence of such loss.
``(IV) TAA-related loss of coverage.--The term `TAA-related
loss of coverage' means, with respect to an individual whose
separation from employment gives rise to being an TAA-
eligible individual, the loss of health benefits coverage
associated with such separation.''.
(f) Rule of Construction.--Nothing in this title (or the
amendments made by this title), other than provisions
relating to COBRA continuation coverage and reporting
requirements,
[[Page H5899]]
shall be construed as creating any new mandate on any party
regarding health insurance coverage.
TITLE III--CUSTOMS REAUTHORIZATION
SEC. 301. SHORT TITLE.
This Act may be cited as the ``Customs Border Security Act
of 2002''.
Subtitle A--United States Customs Service
CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL
OPERATIONS
SEC. 311. AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL
OPERATIONS, COMMERCIAL OPERATIONS, AND AIR AND
MARINE INTERDICTION.
(a) Noncommercial Operations.--Section 301(b)(1) of the
Customs Procedural Reform and Simplification Act of 1978 (19
U.S.C. 2075(b)(1)) is amended--
(1) by striking subparagraph (A), and inserting the
following:
``(A) $1,365,456,000 for fiscal year 2003.''; and
(2) by striking subparagraph (B), and inserting the
following:
``(B) $1,399,592,400 for fiscal year 2004.''.
(b) Commercial Operations.--
(1) In general.--Section 301(b)(2)(A) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(2)(A)) is amended--
(A) by striking clause (i), and inserting the following:
``(i) $1,642,602,000 for fiscal year 2003.''; and
(B) by striking clause (ii), and inserting the following:
``(ii) $1,683,667,050 for fiscal year 2004.''.
(2) Automated commercial environment computer system.--Of
the amount made available for each of fiscal years 2003 and
2004 under section 301(b)(2)(A) of the Customs Procedural
Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(2)(A)), as amended by paragraph (1), $308,000,000
shall be available until expended for each such fiscal year
for the development, establishment, and implementation of the
Automated Commercial Environment computer system.
(3) Reports.--Not later than 90 days after the date of the
enactment of this Act, and not later than the end of each
subsequent 90-day period, the Commissioner of Customs shall
prepare and submit to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate a report demonstrating that the development and
establishment of the Automated Commercial Environment
computer system is being carried out in a cost-effective
manner and meets the modernization requirements of title VI
of the North American Free Trade Agreement Implementation
Act.
(c) Air and Marine Interdiction.--Section 301(b)(3) of the
Customs Procedural Reform and Simplification Act of 1978 (19
U.S.C. 2075(b)(3)) is amended--
(1) by striking subparagraph (A), and inserting the
following:
``(A) $170,829,000 for fiscal year 2003.''; and
(2) by striking subparagraph (B), and inserting the
following:
``(B) $175,099,725 for fiscal year 2004.''.
(d) Submission of Out-Year Budget Projections.--Section
301(a) of the Customs Procedural Reform and Simplification
Act of 1978 (19 U.S.C. 2075(a)) is amended by adding at the
end the following:
``(3) By not later than the date on which the President
submits to Congress the budget of the United States
Government for a fiscal year, the Commissioner of Customs
shall submit to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the Senate
the projected amount of funds for the succeeding fiscal year
that will be necessary for the operations of the Customs
Service as provided for in subsection (b).''.
SEC. 312. ANTITERRORIST AND ILLICIT NARCOTICS DETECTION
EQUIPMENT FOR THE UNITED STATES-MEXICO BORDER,
UNITED STATES-CANADA BORDER, AND FLORIDA AND
THE GULF COAST SEAPORTS.
(a) Fiscal Year 2003.--Of the amounts made available for
fiscal year 2003 under section 301(b)(1)(A) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(A)), as amended by section 311(a) of this Act,
$90,244,000 shall be available until expended for acquisition
and other expenses associated with implementation and
deployment of antiterrorist and illicit narcotics detection
equipment along the United States-Mexico border, the United
States-Canada border, and Florida and the Gulf Coast
seaports, as follows:
(1) United states-mexico border.--For the United States-
Mexico border, the following:
(A) $6,000,000 for 8 Vehicle and Container Inspection
Systems (VACIS).
(B) $11,200,000 for 5 mobile truck x-rays with transmission
and backscatter imaging.
(C) $13,000,000 for the upgrade of 8 fixed-site truck x-
rays from the present energy level of 450,000 electron volts
to 1,000,000 electron volts (1-MeV).
(D) $7,200,000 for 8 1-MeV pallet x-rays.
(E) $1,000,000 for 200 portable contraband detectors
(busters) to be distributed among ports where the current
allocations are inadequate.
(F) $600,000 for 50 contraband detection kits to be
distributed among all southwest border ports based on traffic
volume.
(G) $500,000 for 25 ultrasonic container inspection units
to be distributed among all ports receiving liquid-filled
cargo and to ports with a hazardous material inspection
facility.
(H) $2,450,000 for 7 automated targeting systems.
(I) $360,000 for 30 rapid tire deflator systems to be
distributed to those ports where port runners are a threat.
(J) $480,000 for 20 portable Treasury Enforcement
Communications Systems (TECS) terminals to be moved among
ports as needed.
(K) $1,000,000 for 20 remote watch surveillance camera
systems at ports where there are suspicious activities at
loading docks, vehicle queues, secondary inspection lanes, or
areas where visual surveillance or observation is obscured.
(L) $1,254,000 for 57 weigh-in-motion sensors to be
distributed among the ports with the greatest volume of
outbound traffic.
(M) $180,000 for 36 AM traffic information radio stations,
with 1 station to be located at each border crossing.
(N) $1,040,000 for 260 inbound vehicle counters to be
installed at every inbound vehicle lane.
(O) $950,000 for 38 spotter camera systems to counter the
surveillance of customs inspection activities by persons
outside the boundaries of ports where such surveillance
activities are occurring.
(P) $390,000 for 60 inbound commercial truck transponders
to be distributed to all ports of entry.
(Q) $1,600,000 for 40 narcotics vapor and particle
detectors to be distributed to each border crossing.
(R) $400,000 for license plate reader automatic targeting
software to be installed at each port to target inbound
vehicles.
(2) United states-canada border.--For the United States-
Canada border, the following:
(A) $3,000,000 for 4 Vehicle and Container Inspection
Systems (VACIS).
(B) $8,800,000 for 4 mobile truck x-rays with transmission
and backscatter imaging.
(C) $3,600,000 for 4 1-MeV pallet x-rays.
(D) $250,000 for 50 portable contraband detectors (busters)
to be distributed among ports where the current allocations
are inadequate.
(E) $300,000 for 25 contraband detection kits to be
distributed among ports based on traffic volume.
(F) $240,000 for 10 portable Treasury Enforcement
Communications Systems (TECS) terminals to be moved among
ports as needed.
(G) $400,000 for 10 narcotics vapor and particle detectors
to be distributed to each border crossing based on traffic
volume.
(3) Florida and gulf coast seaports.--For Florida and the
Gulf Coast seaports, the following:
(A) $4,500,000 for 6 Vehicle and Container Inspection
Systems (VACIS).
(B) $11,800,000 for 5 mobile truck x-rays with transmission
and backscatter imaging.
(C) $7,200,000 for 8 1-MeV pallet x-rays.
(D) $250,000 for 50 portable contraband detectors (busters)
to be distributed among ports where the current allocations
are inadequate.
(E) $300,000 for 25 contraband detection kits to be
distributed among ports based on traffic volume.
(b) Fiscal Year 2004.--Of the amounts made available for
fiscal year 2004 under section 301(b)(1)(B) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(B)), as amended by section 311(a) of this Act,
$9,000,000 shall be available until expended for the
maintenance and support of the equipment and training of
personnel to maintain and support the equipment described in
subsection (a).
(c) Acquisition of Technologically Superior Equipment;
Transfer of Funds.--
(1) In general.--The Commissioner of Customs may use
amounts made available for fiscal year 2003 under section
301(b)(1)(A) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(A)), as
amended by section 311(a) of this Act, for the acquisition of
equipment other than the equipment described in subsection
(a) if such other equipment--
(A)(i) is technologically superior to the equipment
described in subsection (a); and
(ii) will achieve at least the same results at a cost that
is the same or less than the equipment described in
subsection (a); or
(B) can be obtained at a lower cost than the equipment
described in subsection (a).
(2) Transfer of funds.--Notwithstanding any other provision
of this section, the Commissioner of Customs may reallocate
an amount not to exceed 10 percent of--
(A) the amount specified in any of subparagraphs (A)
through (R) of subsection (a)(1) for equipment specified in
any other of such subparagraphs (A) through (R);
(B) the amount specified in any of subparagraphs (A)
through (G) of subsection (a)(2) for equipment specified in
any other of such subparagraphs (A) through (G); and
(C) the amount specified in any of subparagraphs (A)
through (E) of subsection (a)(3) for equipment specified in
any other of such subparagraphs (A) through (E).
SEC. 313. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.
As part of the annual performance plan for each of the
fiscal years 2003 and 2004 covering each program activity set
forth in the budget of the United States Customs Service, as
required under section 1115 of title 31, United States Code,
the Commissioner of Customs shall establish performance goals
and performance indicators, and shall comply with all other
requirements contained in paragraphs (1) through (6) of
subsection (a) of such section with respect to each of the
activities to be carried out pursuant to section 312.
CHAPTER 2--CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE
SEC. 321. AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO
PREVENT CHILD PORNOGRAPHY/CHILD SEXUAL
EXPLOITATION.
(a) Authorization of Appropriations.--There is authorized
to be appropriated to the Customs Service $10,000,000 for
fiscal year 2003 to carry out the program to prevent child
pornography/child sexual exploitation established
[[Page H5900]]
by the Child Cyber-Smuggling Center of the Customs Service.
(b) Use of Amounts for Child Pornography Cyber Tipline.--Of
the amount appropriated under subsection (a), the Customs
Service shall provide 3.75 percent of such amount to the
National Center for Missing and Exploited Children for the
operation of the child pornography cyber tipline of the
Center and for increased public awareness of the tipline.
CHAPTER 3--MISCELLANEOUS PROVISIONS
SEC. 331. ADDITIONAL CUSTOMS SERVICE OFFICERS FOR UNITED
STATES-CANADA BORDER.
Of the amount made available for fiscal year 2003 under
paragraphs (1) and (2)(A) of section 301(b) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)), as amended by section 311 of this Act, $28,300,000
shall be available until expended for the Customs Service to
hire approximately 285 additional Customs Service officers to
address the needs of the offices and ports along the United
States-Canada border.
SEC. 332. STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF
THE CUSTOMS SERVICE.
(a) Study.--The Commissioner of Customs shall conduct a
study of current personnel practices of the Customs Service,
including an overview of performance standards and the effect
and impact of the collective bargaining process on drug
interdiction efforts of the Customs Service and a comparison
of duty rotation policies of the Customs Service and other
Federal agencies that employ similarly situated personnel.
(b) Report.--Not later than 120 days after the date of the
enactment of this Act, the Commissioner of Customs shall
submit to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report containing the results of the study conducted under
subsection (a).
SEC. 333. STUDY AND REPORT RELATING TO ACCOUNTING AND
AUDITING PROCEDURES OF THE CUSTOMS SERVICE.
(a) Study.--(1) The Commissioner of Customs shall conduct a
study of actions by the Customs Service to ensure that
appropriate training is being provided to Customs Service
personnel who are responsible for financial auditing of
importers.
(2) In conducting the study, the Commissioner--
(A) shall specifically identify those actions taken to
comply with provisions of law that protect the privacy and
trade secrets of importers, such as section 552(b) of title
5, United States Code, and section 1905 of title 18, United
States Code; and
(B) shall provide for public notice and comment relating to
verification of the actions described in subparagraph (A).
(b) Report.--Not later than 6 months after the date of the
enactment of this Act, the Commissioner of Customs shall
submit to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report containing the results of the study conducted under
subsection (a).
SEC. 334. ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING
SYSTEM; REPORTS.
(a) Establishment and Implementation.--
(1) In general.--Not later than September 30, 2003, the
Commissioner of Customs shall, in accordance with the audit
of the Customs Service's fiscal years 2000 and 1999 financial
statements (as contained in the report of the Office of the
Inspector General of the Department of the Treasury issued on
February 23, 2001), establish and implement a cost accounting
system for expenses incurred in both commercial and
noncommercial operations of the Customs Service.
(2) Additional requirement.--The cost accounting system
described in paragraph (1) shall provide for an
identification of expenses based on the type of operation,
the port at which the operation took place, the amount of
time spent on the operation by personnel of the Customs
Service, and an identification of expenses based on any other
appropriate classification necessary to provide for an
accurate and complete accounting of the expenses.
(b) Reports.--Beginning on the date of the enactment of
this Act and ending on the date on which the cost accounting
system described in subsection (a) is fully implemented, the
Commissioner of Customs shall prepare and submit to Congress
on a quarterly basis a report on the progress of implementing
the cost accounting system pursuant to subsection (a).
SEC. 335. STUDY AND REPORT RELATING TO TIMELINESS OF
PROSPECTIVE RULINGS.
(a) Study.--The Comptroller General shall conduct a study
on the extent to which the Office of Regulations and Rulings
of the Customs Service has made improvements to decrease the
amount of time to issue prospective rulings from the date on
which a request for the ruling is received by the Customs
Service.
(b) Report.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report containing the results of the study conducted under
subsection (a).
(c) Definition.--In this section, the term ``prospective
ruling'' means a ruling that is requested by an importer on
goods that are proposed to be imported into the United States
and that relates to the proper classification, valuation, or
marking of such goods.
SEC. 336. STUDY AND REPORT RELATING TO CUSTOMS USER FEES.
(a) Study.--The Comptroller General shall conduct a study
on the extent to which the amount of each customs user fee
imposed under section 13031(a) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)) is
commensurate with the level of services provided by the
Customs Service relating to the fee so imposed.
(b) Report.--Not later than 120 days after the date of the
enactment of this Act, the Comptroller General shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report in classified form containing--
(1) the results of the study conducted under subsection
(a); and
(2) recommendations for the appropriate amount of the
customs user fees if such results indicate that the fees are
not commensurate with the level of services provided by the
Customs Service.
SEC. 337. FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER
FACILITIES.
(a) In General.--Section 13031(b)(9) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.
58c(b)(9)) is amended as follows:
(1) In subparagraph (A)--
(A) in the matter preceding clause (i), by striking ``the
processing of merchandise that is informally entered or
released'' and inserting ``the processing of letters,
documents, records, shipments, merchandise, or any other item
that is valued at an amount that is less than $2,000 (or such
higher amount as the Secretary of the Treasury may set by
regulation pursuant to section 498 of the Tariff Act of
1930), except such items entered for transportation and
exportation or immediate exportation''; and
(B) by striking clause (ii), and inserting the following:
``(ii) Subject to the provisions of subparagraph (B), in
the case of an express consignment carrier facility or
centralized hub facility, $.66 per individual airway bill or
bill of lading.''.
(2) By redesignating subparagraph (B) as subparagraph (C)
and inserting after subparagraph (A) the following:
``(B)(i) Beginning in fiscal year 2004, the Secretary of
the Treasury may adjust (not more than once per fiscal year)
the amount described in subparagraph (A)(ii) to an amount
that is not less than $.35 and not more than $1.00 per
individual airway bill or bill of lading. The Secretary shall
provide notice in the Federal Register of a proposed
adjustment under the preceding sentence and the reasons
therefor and shall allow for public comment on the proposed
adjustment.
``(ii) Notwithstanding section 451 of the Tariff Act of
1930, the payment required by subparagraph (A)(ii) shall be
the only payment required for reimbursement of the Customs
Service in connection with the processing of an individual
airway bill or bill of lading in accordance with such
subparagraph and for providing services at express
consignment carrier facilities or centralized hub facilities,
except that the Customs Service may require such facilities
to cover expenses of the Customs Service for adequate office
space, equipment, furnishings, supplies, and security.
``(iii)(I) The payment required by subparagraph (A)(ii) and
clause (ii) of this subparagraph shall be paid on a quarterly
basis by the carrier using the facility to the Customs
Service in accordance with regulations prescribed by the
Secretary of the Treasury.
``(II) 50 percent of the amount of payments received under
subparagraph (A)(ii) and clause (ii) of this subparagraph
shall, in accordance with section 524 of the Tariff Act of
1930, be deposited in the Customs User Fee Account and shall
be used to directly reimburse each appropriation for the
amount paid out of that appropriation for the costs incurred
in providing services to express consignment carrier
facilities or centralized hub facilities. Amounts deposited
in accordance with the preceding sentence shall be available
until expended for the provision of customs services to
express consignment carrier facilities or centralized hub
facilities.
``(III) Notwithstanding section 524 of the Tariff Act of
1930, the remaining 50 percent of the amount of payments
received under subparagraph (A)(ii) and clause (ii) of this
subparagraph shall be paid to the Secretary of the Treasury,
which is in lieu of the payment of fees under subsection
(a)(10) of this section.''.
(b) Effective Date.--The amendments made by subsection (a)
take effect on October 1, 2002.
SEC. 338. NATIONAL CUSTOMS AUTOMATION PROGRAM.
Section 411(b) of the Tariff Act of 1930 (19 U.S.C.
1411(b)) is amended by striking the second sentence and
inserting the following: ``The Secretary may, by regulation,
require the electronic submission of information described in
subsection (a) or any other information required to be
submitted to the Customs Service separately pursuant to this
subpart.''.
SEC. 339. AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS
STAFFING.
There are authorized to be appropriated to the Department
of Treasury such sums as may be necessary to provide an
increase in the annual rate of basic pay--
(1) for all journeyman Customs inspectors and Canine
Enforcement Officers who have completed at least one year's
service and are receiving an annual rate of basic pay for
positions at GS-9 of the General Schedule under section 5332
of title 5, United States Code, from the annual rate of basic
pay payable for positions at GS-9 of the General Schedule
under such section 5332, to an annual rate of basic pay
payable for positions at GS-11 of the General Schedule under
such section 5332; and
(2) for the support staff associated with the personnel
described in subparagraph (A), at the appropriate GS level of
the General Schedule under such section 5332.
[[Page H5901]]
CHAPTER 4--ANTITERRORISM PROVISIONS
SEC. 341. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN
GOOD FAITH.
(a) Immunity.--Section 3061 of the Revised Statutes (19
U.S.C. 482) is amended--
(1) by striking ``Any of the officers'' and inserting ``(a)
Any of the officers''; and
(2) by adding at the end the following:
``(b) Any officer or employee of the United States
conducting a search of a person pursuant to subsection (a)
shall not be held liable for any civil damages as a result of
such search if the officer or employee performed the search
in good faith and used reasonable means while effectuating
such search.''.
(b) Requirement To Post Policy and Procedures for Searches
of Passengers.--Not later than 30 days after the date of the
enactment of this Act, the Commissioner of Customs shall
ensure that at each Customs border facility appropriate
notice is posted that provides a summary of the policy and
procedures of the Customs Service for searching passengers,
including a statement of the policy relating to the
prohibition on the conduct of profiling of passengers based
on gender, race, color, religion, or ethnic background.
SEC. 342. EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY,
OR STAFFING OF THE CUSTOMS SERVICE.
Section 318 of the Tariff Act of 1930 (19 U.S.C. 1318) is
amended--
(1) by striking ``Whenever the President'' and inserting
``(a) Whenever the President''; and
(2) by adding at the end the following:
``(b)(1) Notwithstanding any other provision of law, the
Secretary of the Treasury, when necessary to respond to a
national emergency declared under the National Emergencies
Act (50 U.S.C. 1601 et seq.) or to a specific threat to human
life or national interests, is authorized to take the
following actions on a temporary basis:
``(A) Eliminate, consolidate, or relocate any office or
port of entry of the Customs Service.
``(B) Modify hours of service, alter services rendered at
any location, or reduce the number of employees at any
location.
``(C) Take any other action that may be necessary to
respond directly to the national emergency or specific
threat.
``(2) Notwithstanding any other provision of law, the
Commissioner of Customs, when necessary to respond to a
specific threat to human life or national interests, is
authorized to close temporarily any Customs office or port of
entry or take any other lesser action that may be necessary
to respond to the specific threat.
``(3) The Secretary of the Treasury or the Commissioner of
Customs, as the case may be, shall notify the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate not later than 72 hours
after taking any action under paragraph (1) or (2).''.
SEC. 343. MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO
AND OTHER IMPROVED CUSTOMS REPORTING
PROCEDURES.
(a) Cargo Information.--
(1) In general.--Subject to paragraphs (2) and (3), not
later than 1 year after the date of enactment of this Act,
the Secretary shall promulgate regulations providing for the
transmission to the Customs Service, through an electronic
data interchange system, of information pertaining to cargo
destined for importation into the United States or
exportation from the United States, prior to such importation
or exportation.
(2) Information required.--The information required by the
regulations promulgated pursuant to paragraph (1) under the
parameters set forth in paragraph (3) shall be such
information as the Secretary determines to be reasonably
necessary to ensure aviation, maritime, and surface
transportation safety and security pursuant to those laws
enforced and administered by the Customs Service.
(3) Parameters.--In developing regulations pursuant to
paragraph (1), the Secretary shall adhere to the following
parameters:
(A) The Secretary shall solicit comments from and consult
with a broad range of parties likely to be affected by the
regulations, including importers, exporters, carriers,
customs brokers, and freight forwarders, among other
interested parties.
(B) In general, the requirement to provide particular
information shall be imposed on the party most likely to have
direct knowledge of that information. Where requiring
information from the party with direct knowledge of that
information is not practicable, the regulations shall take
into account how, under ordinary commercial practices,
information is acquired by the party on which the requirement
is imposed, and whether and how such party is able to verify
the information. Where information is not reasonably
verifiable by the party on which a requirement is imposed,
the regulations shall permit that party to transmit
information on the basis of what it reasonably believes to be
true.
(C) The Secretary shall take into account the existence of
competitive relationships among the parties on which
requirements to provide particular information are imposed.
(D) Where the regulations impose requirements on carriers
of cargo, they shall take into account differences among
different modes of transportation, including differences in
commercial practices, operational characteristics, and
technological capacity to collect and transmit information
electronically.
(E) The regulations shall take into account the extent to
which the technology necessary for parties to transmit and
the Customs Service to receive and analyze data in a timely
fashion is available. To the extent that the Secretary
determines that the necessary technology will not be widely
available to particular modes of transportation or other
affected parties until after promulgation of the regulations,
the regulations shall provide interim requirements
appropriate for the technology that is available at the time
of promulgation.
(F) The information collected pursuant to the regulations
shall be used exclusively for ensuring aviation, maritime,
and surface transportation safety and security, and shall not
be used for determining entry or for any other commercial
enforcement purposes.
(G) The regulations shall protect the privacy of business
proprietary and any other confidential information provided
to the Customs Service. However, this parameter does not
repeal, amend, or otherwise modify other provisions of law
relating to the public disclosure of information transmitted
to the Customs Service.
(H) In determining the timing for transmittal of any
information, the Secretary shall balance likely impact on
flow of commerce with impact on aviation, maritime, and
surface transportation safety and security. With respect to
requirements that may be imposed on carriers of cargo, the
timing for transmittal of information shall take into account
differences among different modes of transportation, as
described in subparagraph (D).
(I) Where practicable, the regulations shall avoid imposing
requirements that are redundant with one another or that are
redundant with requirements in other provisions of law.
(J) The Secretary shall determine whether it is appropriate
to provide transition periods between promulgation of the
regulations and the effective date of the regulations and
shall prescribe such transition periods in the regulations,
as appropriate. The Secretary may determine that different
transition periods are appropriate for different classes of
affected parties.
(K) With respect to requirements imposed on carriers, the
Secretary, in consultation with the Postmaster General, shall
determine whether it is appropriate to impose the same or
similar requirements on shipments by the United States Postal
Service. If the Secretary determines that such requirements
are appropriate, then they shall be set forth in the
regulations.
(L) Not later than 15 days prior to promulgation of the
regulations, the Secretary shall transmit to the Committees
on Finance and Commerce, Science, and Transportation of the
Senate and the Committees on Ways and Means and
Transportation and Infrastructure of the House of
Representatives a report setting forth--
(i) the proposed regulations;
(ii) an explanation of how particular requirements in the
proposed regulations meet the needs of aviation, maritime,
and surface transportation safety and security;
(iii) an explanation of how the Secretary expects the
proposed regulations to affect the commercial practices of
affected parties; and
(iv) an explanation of how the proposed regulations address
particular comments received from interested parties.
(b) Documentation of Waterborne Cargo.--Part II of title IV
of the Tariff Act of 1930 is amended by inserting after
section 431 the following new section:
``SEC. 431A. DOCUMENTATION OF WATERBORNE CARGO.
``(a) Applicability.--This section shall apply to all cargo
to be exported that is moved by a vessel carrier from a port
in the United States.
``(b) Documentation Required.--(1) No shipper of cargo
subject to this section (including an ocean transportation
intermediary that is a non-vessel-operating common carrier
(as defined in section 3(17)(B) of the Shipping Act of 1984
(46 U.S.C. App. 1702(17)(B)) may tender or cause to be
tendered to a vessel carrier cargo subject to this section
for loading on a vessel in a United States port, unless such
cargo is properly documented pursuant to this subsection.
``(2) For the purposes of this subsection, cargo shall be
considered properly documented if the shipper submits to the
vessel carrier or its agent a complete set of shipping
documents no later than 24 hours after the cargo is delivered
to the marine terminal operator, but under no circumstances
later than 24 hours prior to departure of the vessel.
``(3) A complete set of shipping documents shall include--
``(A) for shipments for which a shipper's export
declaration is required, a copy of the export declaration or,
if the shipper files such declarations electronically in the
Automated Export System, the complete bill of lading, and the
master or equivalent shipping instructions, including the
Internal Transaction Number (ITN); or
``(B) for shipments for which a shipper's export
declaration is not required, a shipper's export declaration
exemption statement and such other documents or information
as the Secretary may by regulation prescribe.
``(4) The Secretary shall by regulation prescribe the time,
manner, and form by which shippers shall transmit documents
or information required under this subsection to the Customs
Service.
``(c) Loading Undocumented Cargo Prohibited.--
``(1) No marine terminal operator (as defined in section
3(14) of the Shipping Act of 1984 (46 U.S.C. App. 1702(14)))
may load, or cause to be loaded, any cargo subject to this
section on a vessel unless instructed by the vessel carrier
operating the vessel that such cargo has been properly
documented in accordance with this section.
``(2) When cargo is booked by 1 vessel carrier to be
transported on the vessel of another vessel carrier, the
booking carrier shall notify the operator of the vessel that
the cargo has been properly documented in accordance with
this section. The operator of the vessel may rely on such
notification in releasing the cargo for loading aboard the
vessel.
``(d) Reporting of Undocumented Cargo.--A vessel carrier
shall notify the Customs Service of any cargo tendered to
such carrier that is not properly documented pursuant to this
section
[[Page H5902]]
and that has remained in the marine terminal for more than 48
hours after being delivered to the marine terminal, and the
location of the cargo in the marine terminal. For vessel
carriers that are members of vessel sharing agreements (or
any other arrangement whereby a carrier moves cargo on
another carrier's vessel), the vessel carrier accepting
the booking shall be responsible for reporting
undocumented cargo, without regard to whether it operates
the vessel on which the transportation is to be made.
``(e) Assessment of Penalties.--Whoever is found to have
violated subsection (b) of this section shall be liable to
the United States for civil penalties in a monetary amount up
to the value of the cargo, or the actual cost of the
transportation, whichever is greater.
``(f) Seizure of Undocumented Cargo.--
``(1) Any cargo that is not properly documented pursuant to
this section and has remained in the marine terminal for more
than 48 hours after being delivered to the marine terminal
operator shall be subject to search, seizure, and forfeiture.
``(2) The shipper of any such cargo is liable to the marine
terminal operator and to the ocean carrier for demurrage and
other applicable charges for any undocumented cargo which has
been notified to or searched or seized by the Customs Service
for the entire period the cargo remains under the order and
direction of the Customs Service. Unless the cargo is seized
by the Customs Service and forfeited, the marine terminal
operator and the ocean carrier shall have a lien on the cargo
for the amount of the demurrage and other charges.
``(g) Effect on Other Provisions.--Nothing in this section
shall be construed, interpreted, or applied to relieve or
excuse any party from compliance with any obligation or
requirement arising under any other law, regulation, or order
with regard to the documentation or carriage of cargo.''.
(c) Secretary.--For purposes of this section, the term
``Secretary'' means the Secretary of the Treasury. If, at the
time the regulations required by subsection (a)(1) are
promulgated, the Customs Service is no longer located in the
Department of the Treasury, then the Secretary of the
Treasury shall exercise the authority under subsection (a)
jointly with the Secretary of the Department in which the
Customs Service is located.
SEC. 343A. SECURE SYSTEMS OF TRANSPORTATION.
(a) Joint Task Force.--The Secretary of the Treasury shall
establish a joint task force to evaluate, prototype, and
certify secure systems of transportation. The joint task
force shall be comprised of officials from the Department of
Transportation and the Customs Service, and any other
officials that the Secretary deems appropriate. The task
force shall establish a program to evaluate and certify
secure systems of international intermodal transport no later
than 1 year after the date of enactment of this Act. The task
force shall solicit and consider input from a broad range of
interested parties.
(b) Program Requirements.--At a minimum the program
referred to in subsection (a) shall require certified systems
of international intermodal transport to be significantly
more secure than existing transportation programs, and the
program shall--
(1) establish standards and a process for screening and
evaluating cargo prior to import into or export from the
United States;
(2) establish standards and a process for a system of
securing cargo and monitoring it while in transit;
(3) establish standards and a process for allowing the
United States Government to ensure and validate compliance
with the program elements; and
(4) include any other elements that the task force deems
necessary to ensure the security and integrity of the
international intermodal transport movements.
(c) Recognition of Certified Systems.--
(1) Secretary of the Treasury.--The Secretary of the
Treasury shall recognize certified systems of intermodal
transport in the requirements of a national security plan for
United States seaports, and in the provisions requiring
planning to reopen United States ports for commerce.
(2) Commissioner of Customs.--The Commissioner of Customs
shall recognize certified systems of intermodal transport in
the evaluation of cargo risk for purposes of United States
imports and exports.
(d) Report.--Within 1 year after the program described in
subsection (a) is implemented, the Secretary of the Treasury
shall transmit a report to the Committees on Commerce,
Science, and Transportation and Finance of the Senate and the
Committees on Transportation and Infrastructure and Ways and
Means of the House of Representatives that--
(1) evaluates the program and its requirements;
(2) states the Secretary's views as to whether any
procedure, system, or technology evaluated as part of the
program offers a higher level of security than under existing
procedures;
(3) states the Secretary's views as to the integrity of the
procedures, technology, or systems evaluated as part of the
program; and
(4) makes a recommendation with respect to whether the
program, or any procedure, system, or technology should be
incorporated in a nationwide system for certified systems of
intermodal transport.
SEC. 344. BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN
OUTBOUND MAIL.
(a) In General.--The Tariff Act of 1930 is amended by
inserting after section 582 the following:
``SEC. 583. EXAMINATION OF OUTBOUND MAIL.
``(a) Examination.--
``(1) In general.--For purposes of ensuring compliance with
the Customs laws of the United States and other laws enforced
by the Customs Service, including the provisions of law
described in paragraph (2), a Customs officer may, subject to
the provisions of this section, stop and search at the
border, without a search warrant, mail of domestic origin
transmitted for export by the United States Postal Service
and foreign mail transiting the United States that is being
imported or exported by the United States Postal Service.
``(2) Provisions of law described.--The provisions of law
described in this paragraph are the following:
``(A) Section 5316 of title 31, United States Code
(relating to reports on exporting and importing monetary
instruments).
``(B) Sections 1461, 1463, 1465, and 1466, and chapter 110
of title 18, United States Code (relating to obscenity and
child pornography).
``(C) Section 1003 of the Controlled Substances Import and
Export Act (relating to exportation of controlled substances)
(21 U.S.C. 953).
``(D) The Export Administration Act of 1979 (50 U.S.C. App.
2401 et seq.).
``(E) Section 38 of the Arms Export Control Act (22 U.S.C.
2778).
``(F) The International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.).
``(b) Search of Mail Not Sealed Against Inspection and
Other Mail.--Mail not sealed against inspection under the
postal laws and regulations of the United States, mail which
bears a Customs declaration, and mail with respect to which
the sender or addressee has consented in writing to search,
may be searched by a Customs officer.
``(c) Search of Mail Sealed Against Inspection Weighing in
Excess of 16 Ounces.--
``(1) In general.--Mail weighing in excess of 16 ounces
sealed against inspection under the postal laws and
regulations of the United States may be searched by a Customs
officer, subject to paragraph (2), if there is reasonable
cause to suspect that such mail contains one or more of the
following:
``(A) Monetary instruments, as defined in section 1956 of
title 18, United States Code.
``(B) A weapon of mass destruction, as defined in section
2332a(b) of title 18, United States Code.
``(C) A drug or other substance listed in schedule I, II,
III, or IV in section 202 of the Controlled Substances Act
(21 U.S.C. 812).
``(D) National defense and related information transmitted
in violation of any of sections 793 through 798 of title 18,
United States Code.
``(E) Merchandise mailed in violation of section 1715 or
1716 of title 18, United States Code.
``(F) Merchandise mailed in violation of any provision of
chapter 71 (relating to obscenity) or chapter 110 (relating
to sexual exploitation and other abuse of children) of title
18, United States Code.
``(G) Merchandise mailed in violation of the Export
Administration Act of 1979 (50 U.S.C. App. 2401 et seq.).
``(H) Merchandise mailed in violation of section 38 of the
Arms Export Control Act (22 U.S.C. 2778).
``(I) Merchandise mailed in violation of the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).
``(J) Merchandise mailed in violation of the Trading with
the Enemy Act (50 U.S.C. App. 1 et seq.).
``(K) Merchandise subject to any other law enforced by the
Customs Service.
``(2) Limitation.--No person acting under the authority of
paragraph (1) shall read, or authorize any other person to
read, any correspondence contained in mail sealed against
inspection unless prior to so reading--
``(A) a search warrant has been issued pursuant to rule 41
of the Federal Rules of Criminal Procedure; or
``(B) the sender or addressee has given written
authorization for such reading.
``(d) Search of Mail Sealed Against Inspection Weighing 16
Ounces or Less.--Notwithstanding any other provision of this
section, subsection (a)(1) shall not apply to mail weighing
16 ounces or less sealed against inspection under the postal
laws and regulations of the United States.''.
(b) Certification by Secretary.--Not later than 3 months
after the date of enactment of this section, the Secretary of
State shall determine whether the application of section 583
of the Tariff Act of 1930 to foreign mail transiting the
United States that is imported or exported by the United
States Postal Service is being handled in a manner consistent
with international law and any international obligation of
the United States. Section 583 of such Act shall not apply to
such foreign mail unless the Secretary certifies to Congress
that the application of such section 583 is consistent with
international law and any international obligation of the
United States.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), this
section and the amendments made by this section shall take
effect on the date of enactment of this Act.
(2) Certification with respect to foreign mail.--The
provisions of section 583 of the Tariff Act of 1930 relating
to foreign mail transiting the United States that is imported
or exported by the United States Postal Service shall not
take effect until the Secretary of State certifies to
Congress, pursuant to subsection (b), that the application of
such section 583 is consistent with international law and any
international obligation of the United States.
SEC. 345. AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT
OF CUSTOMS OPERATIONS IN NEW YORK CITY.
(a) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated for
the reestablishment of operations
[[Page H5903]]
of the Customs Service in New York, New York, such sums as
may be necessary for fiscal year 2003.
(2) Operations described.--The operations referred to in
paragraph (1) include, but are not limited to, the following:
(A) Operations relating to the Port Director of New York
City, the New York Customs Management Center (including the
Director of Field Operations), and the Special Agent-In-
Charge for New York.
(B) Commercial operations, including textile enforcement
operations and salaries and expenses of--
(i) trade specialists who determine the origin and value of
merchandise;
(ii) analysts who monitor the entry data into the United
States of textiles and textile products; and
(iii) Customs officials who work with foreign governments
to examine textile makers and verify entry information.
(b) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under subsection (a) are
authorized to remain available until expended.
CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS
SEC. 351. GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY
CUSTOMS SERVICE.
(a) GAO Audit.--The Comptroller General of the United
States shall conduct an audit of the system established and
carried out by the Customs Service to monitor transshipment.
(b) Report.--Not later than 9 months after the date of
enactment of this Act, the Comptroller General shall submit
to the Committee on Ways and Means of the House of
Representatives and Committee on Finance of the Senate a
report that contains the results of the study conducted under
subsection (a), including recommendations for improvements to
the transshipment monitoring system if applicable.
(c) Transshipment Described.--Transshipment within the
meaning of this section has occurred when preferential
treatment under any provision of law has been claimed for a
textile or apparel article on the basis of material false
information concerning the country of origin, manufacture,
processing, or assembly of the article or any of its
components. For purposes of the preceding sentence, false
information is material if disclosure of the true information
would mean or would have meant that the article is or was
ineligible for preferential treatment under the provision of
law in question.
SEC. 352. AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE
TRANSSHIPMENT ENFORCEMENT OPERATIONS.
(a) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated for
transshipment (as described in section 351(c)) enforcement
operations, outreach, and education of the Customs Service
$9,500,000 for fiscal year 2003.
(2) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under paragraph (1) are
authorized to remain available until expended.
(b) Use of Funds.--Of the amount appropriated pursuant to
the authorization of appropriations under subsection (a), the
following amounts are authorized to be made available for the
following purposes:
(1) Import specialists.--$1,463,000 for 21 Customs import
specialists to be assigned to selected ports for
documentation review to support detentions and exclusions and
1 additional Customs import specialist assigned to the
Customs headquarters textile program to administer the
program and provide oversight.
(2) Inspectors.--$652,080 for 10 Customs inspectors to be
assigned to selected ports to examine targeted high-risk
shipments.
(3) Investigators.--(A) $1,165,380 for 10 investigators to
be assigned to selected ports to investigate instances of
smuggling, quota and trade agreement circumvention, and use
of counterfeit visas to enter inadmissible goods.
(B) $149,603 for 1 investigator to be assigned to the
Customs headquarters textile program to coordinate and ensure
implementation of textile production verification team
results from an investigation perspective.
(4) International trade specialists.--$226,500 for 3
international trade specialists to be assigned to Customs
headquarters to be dedicated to illegal textile transshipment
policy issues, outreach, education, and other free trade
agreement enforcement issues.
(5) Permanent import specialists for hong kong.--$500,000
for 2 permanent import specialist positions and $500,000 for
2 investigators to be assigned to Hong Kong to work with Hong
Kong and other government authorities in Southeast Asia to
assist such authorities in pursuing proactive enforcement of
bilateral trade agreements.
(6) Various permanent trade positions.--$3,500,000 for the
following:
(A) 2 permanent positions to be assigned to the Customs
attache office in Central America to address trade
enforcement issues for that region.
(B) 2 permanent positions to be assigned to the Customs
attache office in South Africa to address trade enforcement
issues pursuant to the African Growth and Opportunity Act
(title I of Public Law 106-200).
(C) 4 permanent positions to be assigned to the Customs
attache office in Mexico to address the threat of illegal
textile transshipment through Mexico and other related issues
under the North American Free Trade Agreement Act.
(D) 2 permanent positions to be assigned to the Customs
attache office in Seoul, South Korea, to address the trade
issues in the geographic region.
(E) 2 permanent positions to be assigned to the proposed
Customs attache office in New Delhi, India, to address the
threat of illegal textile transshipment and other trade
enforcement issues.
(F) 2 permanent positions to be assigned to the Customs
attache office in Rome, Italy, to address trade enforcement
issues in the geographic region, including issues under free
trade agreements with Jordan and Israel.
(7) Attorneys.--$179,886 for 2 attorneys for the Office of
the Chief Counsel of the Customs Service to pursue cases
regarding illegal textile transshipment.
(8) Auditors.--$510,000 for 6 Customs auditors to perform
internal control reviews and document and record reviews of
suspect importers.
(9) Additional travel funds.--$250,000 for deployment of
additional textile production verification teams to sub-
Saharan Africa.
(10) Training.--(A) $75,000 for training of Customs
personnel.
(B) $200,000 for training for foreign counterparts in risk
management analytical techniques and for teaching factory
inspection techniques, model law development, and enforcement
techniques.
(11) Outreach.--$60,000 for outreach efforts to United
States importers.
SEC. 353. IMPLEMENTATION OF THE AFRICAN GROWTH AND
OPPORTUNITY ACT.
Of the amount made available for fiscal year 2003 under
section 301(b)(2)(A) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 2075(b)(2)(A)), as
amended by section 311(b)(1) of this Act, $1,317,000 shall be
available until expended for the Customs Service to provide
technical assistance to help sub-Saharan African countries
develop and implement effective visa and anti-transshipment
systems as required by the African Growth and Opportunity Act
(title I of Public Law 106-200), as follows:
(1) Travel funds.--$600,000 for import specialists, special
agents, and other qualified Customs personnel to travel to
sub-Saharan African countries to provide technical assistance
in developing and implementing effective visa and anti-
transshipment systems.
(2) Import specialists.--$266,000 for 4 import specialists
to be assigned to Customs headquarters to be dedicated to
providing technical assistance to sub-Saharan African
countries for developing and implementing effective visa and
anti-transshipment systems.
(3) Data reconciliation analysts.--$151,000 for 2 data
reconciliation analysts to review apparel shipments.
(4) Special agents.--$300,000 for 2 special agents to be
assigned to Customs headquarters to be available to provide
technical assistance to sub-Saharan African countries in the
performance of investigations and other enforcement
initiatives.
Subtitle B--Office of the United States Trade Representative
SEC. 361. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Section 141(g)(1) of the Trade Act of 1974
(19 U.S.C. 2171(g)(1)) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by striking ``not
to exceed'';
(B) by striking clause (i), and inserting the following:
``(i) $32,300,000 for fiscal year 2003.''; and
(C) by striking clause (ii), and inserting the following:
``(ii) $33,108,000 for fiscal year 2004.''; and
(2) in subparagraph (B)--
(A) in clause (i), by adding ``and'' at the end;
(B) by striking clause (ii); and
(C) by redesignating clause (iii) as clause (ii).
(b) Submission of Out-Year Budget Projections.--Section
141(g) of the Trade Act of 1974 (19 U.S.C. 2171(g)) is
amended by adding at the end the following:
``(3) By not later than the date on which the President
submits to Congress the budget of the United States
Government for a fiscal year, the United States Trade
Representative shall submit to the Committee on Ways and
Means of the House of Representatives and the Committee on
Finance of the Senate the projected amount of funds for the
succeeding fiscal year that will be necessary for the Office
to carry out its functions.''.
(c) Additional Staff for Office of Assistant U.S. Trade
Representative for Congressional Affairs.--
(1) In general.--There is authorized to be appropriated
such sums as may be necessary for fiscal year 2003 for the
salaries and expenses of two additional legislative
specialist employee positions within the Office of the
Assistant United States Trade Representative for
Congressional Affairs.
(2) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under paragraph (1) are
authorized to remain available until expended.
Subtitle C--United States International Trade Commission
SEC. 371. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Section 330(e)(2)(A) of the Tariff Act of
1930 (19 U.S.C. 1330(e)(2)(A)) is amended--
(1) by striking clause (i), and inserting the following:
``(i) $54,000,000 for fiscal year 2003.''; and
(2) by striking clause (ii), and inserting the following:
``(ii) $57,240,000 for fiscal year 2004.''.
(b) Submission of Out-Year Budget Projections.--Section
330(e) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is
amended by adding at the end the following:
``(4) By not later than the date on which the President
submits to Congress the budget of the United States
Government for a fiscal year, the Commission shall submit to
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate
the projected amount of funds for the succeeding fiscal year
that will be necessary for the Commission to carry out its
functions.''.
[[Page H5904]]
Subtitle D--Other trade provisions
SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM
DUTY ACQUIRED ABROAD BY UNITED STATES
RESIDENTS.
(a) In General.--Subheading 9804.00.65 of the Harmonized
Tariff Schedule of the United States is amended in the
article description column by striking ``$400'' and inserting
``$800''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect 90 days after the date of the enactment of
this Act.
SEC. 382. REGULATORY AUDIT PROCEDURES.
Section 509(b) of the Tariff Act of 1930 (19 U.S.C.
1509(b)) is amended by adding at the end the following:
``(6)(A) If during the course of any audit concluded under
this subsection, the Customs Service identifies overpayments
of duties or fees or over-declarations of quantities or
values that are within the time period and scope of the audit
that the Customs Service has defined, then in calculating the
loss of revenue or monetary penalties under section 592, the
Customs Service shall treat the overpayments or over-
declarations on finally liquidated entries as an offset to
any underpayments or underdeclarations also identified on
finally liquidated entries, if such overpayments or over-
declarations were not made by the person being audited for
the purpose of violating any provision of law.
``(B) Nothing in this paragraph shall be construed to
authorize a refund not otherwise authorized under section
520.''.
SEC. 383. PAYMENT OF DUTIES AND FEES.
Section 505(a) of the Tariff Act of 1930 (19 U.S.C.
1505(a)) is amended to read as follows:
``(a) Deposit of Estimated Duties and Fees.--Unless the
entry is subject to a periodic payment or the merchandise is
entered for warehouse or transportation, or under bond, the
importer of record shall deposit with the Customs Service at
the time of entry, or at such later time as the Secretary may
prescribe by regulation (but not later than 10 working days
after entry or release) the amount of duties and fees
estimated to be payable on such merchandise. As soon as a
periodic payment module of the Automated Commercial
Environment is developed, but no later than October 1, 2004,
a participating importer of record, or the importer's filer,
may deposit estimated duties and fees for entries of
merchandise no later than the 15th day of the month following
the month in which the merchandise is entered or released,
whichever comes first.''.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
SEC. 2101. SHORT TITLE AND FINDINGS.
(a) Short Title.--This title may be cited as the
``Bipartisan Trade Promotion Authority Act of 2002''.
(b) Findings.--The Congress makes the following findings:
(1) The expansion of international trade is vital to the
national security of the United States. Trade is critical to
the economic growth and strength of the United States and to
its leadership in the world. Stable trading relationships
promote security and prosperity. Trade agreements today serve
the same purposes that security pacts played during the Cold
War, binding nations together through a series of mutual
rights and obligations. Leadership by the United States in
international trade fosters open markets, democracy, and
peace throughout the world.
(2) The national security of the United States depends on
its economic security, which in turn is founded upon a
vibrant and growing industrial base. Trade expansion has been
the engine of economic growth. Trade agreements maximize
opportunities for the critical sectors and building blocks of
the economy of the United States, such as information
technology, telecommunications and other leading
technologies, basic industries, capital equipment, medical
equipment, services, agriculture, environmental technology,
and intellectual property. Trade will create new
opportunities for the United States and preserve the
unparalleled strength of the United States in economic,
political, and military affairs. The United States, secured
by expanding trade and economic opportunities, will meet the
challenges of the twenty-first century.
(3) Support for continued trade expansion requires that
dispute settlement procedures under international trade
agreements not add to or diminish the rights and obligations
provided in such agreements. Therefore--
(A) the recent pattern of decisions by dispute settlement
panels of the WTO and the Appellate Body to impose
obligations and restrictions on the use of antidumping,
countervailing, and safeguard measures by WTO members under
the Antidumping Agreement, the Agreement on Subsidies and
Countervailing Measures, and the Agreement on Safeguards has
raised concerns; and
(B) the Congress is concerned that dispute settlement
panels of the WTO and the Appellate Body appropriately apply
the standard of review contained in Article 17.6 of the
Antidumping Agreement, to provide deference to a permissible
interpretation by a WTO member of provisions of that
Agreement, and to the evaluation by a WTO member of the facts
where that evaluation is unbiased and objective and the
establishment of the facts is proper.
SEC. 2102. TRADE NEGOTIATING OBJECTIVES.
(a) Overall Trade Negotiating Objectives.--The overall
trade negotiating objectives of the United States for
agreements subject to the provisions of section 2103 are--
(1) to obtain more open, equitable, and reciprocal market
access;
(2) to obtain the reduction or elimination of barriers and
distortions that are directly related to trade and that
decrease market opportunities for United States exports or
otherwise distort United States trade;
(3) to further strengthen the system of international
trading disciplines and procedures, including dispute
settlement;
(4) to foster economic growth, raise living standards, and
promote full employment in the United States and to enhance
the global economy;
(5) to ensure that trade and environmental policies are
mutually supportive and to seek to protect and preserve the
environment and enhance the international means of doing so,
while optimizing the use of the world's resources;
(6) to promote respect for worker rights and the rights of
children consistent with core labor standards of the ILO (as
defined in section 2113(6)) and an understanding of the
relationship between trade and worker rights;
(7) to seek provisions in trade agreements under which
parties to those agreements strive to ensure that they do not
weaken or reduce the protections afforded in domestic
environmental and labor laws as an encouragement for trade;
(8) to ensure that trade agreements afford small businesses
equal access to international markets, equitable trade
benefits, and expanded export market opportunities, and
provide for the reduction or elimination of trade barriers
that disproportionately impact small businesses; and
(9) to promote universal ratification and full compliance
with ILO Convention No. 182 Concerning the Prohibition and
Immediate Action for the Elimination of the Worst Forms of
Child Labor.
(b) Principal Trade Negotiating Objectives.--
(1) Trade barriers and distortions.--The principal
negotiating objectives of the United States regarding trade
barriers and other trade distortions are--
(A) to expand competitive market opportunities for United
States exports and to obtain fairer and more open conditions
of trade by reducing or eliminating tariff and nontariff
barriers and policies and practices of foreign governments
directly related to trade that decrease market opportunities
for United States exports or otherwise distort United States
trade; and
(B) to obtain reciprocal tariff and nontariff barrier
elimination agreements, with particular attention to those
tariff categories covered in section 111(b) of the Uruguay
Round Agreements Act (19 U.S.C. 3521(b)).
(2) Trade in services.--The principal negotiating objective
of the United States regarding trade in services is to reduce
or eliminate barriers to international trade in services,
including regulatory and other barriers that deny national
treatment and market access or unreasonably restrict the
establishment or operations of service suppliers.
(3) Foreign investment.--Recognizing that United States law
on the whole provides a high level of protection for
investment, consistent with or greater than the level
required by international law, the principal negotiating
objectives of the United States regarding foreign investment
are to reduce or eliminate artificial or trade-distorting
barriers to foreign investment, while ensuring that foreign
investors in the United States are not accorded greater
substantive rights with respect to investment protections
than United States investors in the United States, and to
secure for investors important rights comparable to those
that would be available under United States legal principles
and practice, by--
(A) reducing or eliminating exceptions to the principle of
national treatment;
(B) freeing the transfer of funds relating to investments;
(C) reducing or eliminating performance requirements,
forced technology transfers, and other unreasonable barriers
to the establishment and operation of investments;
(D) seeking to establish standards for expropriation and
compensation for expropriation, consistent with United States
legal principles and practice;
(E) seeking to establish standards for fair and equitable
treatment consistent with United States legal principles and
practice, including the principle of due process;
(F) providing meaningful procedures for resolving
investment disputes;
(G) seeking to improve mechanisms used to resolve disputes
between an investor and a government through--
(i) mechanisms to eliminate frivolous claims and to deter
the filing of frivolous claims;
(ii) procedures to ensure the efficient selection of
arbitrators and the expeditious disposition of claims;
(iii) procedures to enhance opportunities for public input
into the formulation of government positions; and
(iv) providing for an appellate body or similar mechanism
to provide coherence to the interpretations of investment
provisions in trade agreements; and
(H) ensuring the fullest measure of transparency in the
dispute settlement mechanism, to the extent consistent with
the need to protect information that is classified or
business confidential, by--
(i) ensuring that all requests for dispute settlement are
promptly made public;
(ii) ensuring that--
(I) all proceedings, submissions, findings, and decisions
are promptly made public; and
(II) all hearings are open to the public; and
(iii) establishing a mechanism for acceptance of amicus
curiae submissions from businesses, unions, and
nongovernmental organizations.
(4) Intellectual property.--The principal negotiating
objectives of the United States regarding trade-related
intellectual property are--
(A) to further promote adequate and effective protection of
intellectual property rights, including through--
[[Page H5905]]
(i)(I) ensuring accelerated and full implementation of the
Agreement on Trade-Related Aspects of Intellectual Property
Rights referred to in section 101(d)(15) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(15)), particularly with
respect to meeting enforcement obligations under that
agreement; and
(II) ensuring that the provisions of any multilateral or
bilateral trade agreement governing intellectual property
rights that is entered into by the United States reflect a
standard of protection similar to that found in United States
law;
(ii) providing strong protection for new and emerging
technologies and new methods of transmitting and distributing
products embodying intellectual property;
(iii) preventing or eliminating discrimination with respect
to matters affecting the availability, acquisition, scope,
maintenance, use, and enforcement of intellectual property
rights;
(iv) ensuring that standards of protection and enforcement
keep pace with technological developments, and in particular
ensuring that rightholders have the legal and technological
means to control the use of their works through the Internet
and other global communication media, and to prevent the
unauthorized use of their works; and
(v) providing strong enforcement of intellectual property
rights, including through accessible, expeditious, and
effective civil, administrative, and criminal enforcement
mechanisms;
(B) to secure fair, equitable, and nondiscriminatory market
access opportunities for United States persons that rely upon
intellectual property protection; and
(C) to respect the Declaration on the TRIPS Agreement and
Public Health, adopted by the World Trade Organization at the
Fourth Ministerial Conference at Doha, Qatar on November 14,
2001.
(5) Transparency.--The principal negotiating objective of
the United States with respect to transparency is to obtain
wider and broader application of the principle of
transparency through--
(A) increased and more timely public access to information
regarding trade issues and the activities of international
trade institutions;
(B) increased openness at the WTO and other international
trade fora by increasing public access to appropriate
meetings, proceedings, and submissions, including with regard
to dispute settlement and investment; and
(C) increased and more timely public access to all
notifications and supporting documentation submitted by
parties to the WTO.
(6) Anti-corruption.--The principal negotiating objectives
of the United States with respect to the use of money or
other things of value to influence acts, decisions, or
omissions of foreign governments or officials or to secure
any improper advantage in a manner affecting trade are--
(A) to obtain high standards and appropriate domestic
enforcement mechanisms applicable to persons from all
countries participating in the applicable trade agreement
that prohibit such attempts to influence acts, decisions, or
omissions of foreign governments; and
(B) to ensure that such standards do not place United
States persons at a competitive disadvantage in international
trade.
(7) Improvement of the wto and multilateral trade
agreements.--The principal negotiating objectives of the
United States regarding the improvement of the World Trade
Organization, the Uruguay Round Agreements, and other
multilateral and bilateral trade agreements are--
(A) to achieve full implementation and extend the coverage
of the World Trade Organization and such agreements to
products, sectors, and conditions of trade not adequately
covered; and
(B) to expand country participation in and enhancement of
the Information Technology Agreement and other trade
agreements.
(8) Regulatory practices.--The principal negotiating
objectives of the United States regarding the use of
government regulation or other practices by foreign
governments to provide a competitive advantage to their
domestic producers, service providers, or investors and
thereby reduce market access for United States goods,
services, and investments are--
(A) to achieve increased transparency and opportunity for
the participation of affected parties in the development of
regulations;
(B) to require that proposed regulations be based on sound
science, cost-benefit analysis, risk assessment, or other
objective evidence;
(C) to establish consultative mechanisms among parties to
trade agreements to promote increased transparency in
developing guidelines, rules, regulations, and laws for
government procurement and other regulatory regimes; and
(D) to achieve the elimination of government measures such
as price controls and reference pricing which deny full
market access for United States products.
(9) Electronic commerce.--The principal negotiating
objectives of the United States with respect to electronic
commerce are--
(A) to ensure that current obligations, rules, disciplines,
and commitments under the World Trade Organization apply to
electronic commerce;
(B) to ensure that--
(i) electronically delivered goods and services receive no
less favorable treatment under trade rules and commitments
than like products delivered in physical form; and
(ii) the classification of such goods and services ensures
the most liberal trade treatment possible;
(C) to ensure that governments refrain from implementing
trade-related measures that impede electronic commerce;
(D) where legitimate policy objectives require domestic
regulations that affect electronic commerce, to obtain
commitments that any such regulations are the least
restrictive on trade, nondiscriminatory, and transparent, and
promote an open market environment; and
(E) to extend the moratorium of the World Trade
Organization on duties on electronic transmissions.
(10) Reciprocal trade in agriculture.--(A) The principal
negotiating objective of the United States with respect to
agriculture is to obtain competitive opportunities for United
States exports of agricultural commodities in foreign markets
substantially equivalent to the competitive opportunities
afforded foreign exports in United States markets and to
achieve fairer and more open conditions of trade in bulk,
specialty crop, and value-added commodities by--
(i) reducing or eliminating, by a date certain, tariffs or
other charges that decrease market opportunities for United
States exports--
(I) giving priority to those products that are subject to
significantly higher tariffs or subsidy regimes of major
producing countries; and
(II) providing reasonable adjustment periods for United
States import-sensitive products, in close consultation with
the Congress on such products before initiating tariff
reduction negotiations;
(ii) reducing tariffs to levels that are the same as or
lower than those in the United States;
(iii) reducing or eliminating subsidies that decrease
market opportunities for United States exports or unfairly
distort agriculture markets to the detriment of the United
States;
(iv) allowing the preservation of programs that support
family farms and rural communities but do not distort trade;
(v) developing disciplines for domestic support programs,
so that production that is in excess of domestic food
security needs is sold at world prices;
(vi) eliminating government policies that create price-
depressing surpluses;
(vii) eliminating state trading enterprises whenever
possible;
(viii) developing, strengthening, and clarifying rules and
effective dispute settlement mechanisms to eliminate
practices that unfairly decrease United States market access
opportunities or distort agricultural markets to the
detriment of the United States, particularly with respect to
import-sensitive products, including--
(I) unfair or trade-distorting activities of state trading
enterprises and other administrative mechanisms, with
emphasis on requiring price transparency in the operation of
state trading enterprises and such other mechanisms in order
to end cross subsidization, price discrimination, and price
undercutting;
(II) unjustified trade restrictions or commercial
requirements, such as labeling, that affect new technologies,
including biotechnology;
(III) unjustified sanitary or phytosanitary restrictions,
including those not based on scientific principles in
contravention of the Uruguay Round Agreements;
(IV) other unjustified technical barriers to trade; and
(V) restrictive rules in the administration of tariff rate
quotas;
(ix) eliminating practices that adversely affect trade in
perishable or cyclical products, while improving import
relief mechanisms to recognize the unique characteristics of
perishable and cyclical agriculture;
(x) ensuring that import relief mechanisms for perishable
and cyclical agriculture are as accessible and timely to
growers in the United States as those mechanisms that are
used by other countries;
(xi) taking into account whether a party to the
negotiations has failed to adhere to the provisions of
already existing trade agreements with the United States or
has circumvented obligations under those agreements;
(xii) taking into account whether a product is subject to
market distortions by reason of a failure of a major
producing country to adhere to the provisions of already
existing trade agreements with the United States or by the
circumvention by that country of its obligations under those
agreements;
(xiii) otherwise ensuring that countries that accede to the
World Trade Organization have made meaningful market
liberalization commitments in agriculture;
(xiv) taking into account the impact that agreements
covering agriculture to which the United States is a party,
including the North American Free Trade Agreement, have on
the United States agricultural industry;
(xv) maintaining bona fide food assistance programs and
preserving United States market development and export credit
programs; and
(xvi) striving to complete a general multilateral round in
the World Trade Organization by January 1, 2005, and seeking
the broadest market access possible in multilateral,
regional, and bilateral negotiations, recognizing the effect
that simultaneous sets of negotiations may have on United
States import-sensitive commodities (including those subject
to tariff-rate quotas).
(B)(i) Before commencing negotiations with respect to
agriculture, the United States Trade Representative, in
consultation with the Congress, shall seek to develop a
position on the treatment of seasonal and perishable
agricultural products to be employed in the negotiations in
order to develop an international consensus on the treatment
of seasonal or perishable agricultural products in
investigations relating to dumping and safeguards and in any
other relevant area.
(ii) During any negotiations on agricultural subsidies, the
United States Trade Representative shall seek to establish
the common base year for calculating the Aggregated
Measurement of Support (as defined in the Agreement on
Agriculture) as the end of each country's Uruguay Round
implementation period, as reported in each country's Uruguay
Round market access schedule.
[[Page H5906]]
(iii) The negotiating objective provided in subparagraph
(A) applies with respect to agricultural matters to be
addressed in any trade agreement entered into under section
2103(a) or (b), including any trade agreement entered into
under section 2103(a) or (b) that provides for accession to a
trade agreement to which the United States is already a
party, such as the North American Free Trade Agreement and
the United States-Canada Free Trade Agreement.
(11) Labor and the environment.--The principal negotiating
objectives of the United States with respect to labor and the
environment are--
(A) to ensure that a party to a trade agreement with the
United States does not fail to effectively enforce its
environmental or labor laws, through a sustained or recurring
course of action or inaction, in a manner affecting trade
between the United States and that party after entry into
force of a trade agreement between those countries;
(B) to recognize that parties to a trade agreement retain
the right to exercise discretion with respect to
investigatory, prosecutorial, regulatory, and compliance
matters and to make decisions regarding the allocation of
resources to enforcement with respect to other labor or
environmental matters determined to have higher priorities,
and to recognize that a country is effectively enforcing its
laws if a course of action or inaction reflects a reasonable
exercise of such discretion, or results from a bona fide
decision regarding the allocation of resources, and no
retaliation may be authorized based on the exercise of these
rights or the right to establish domestic labor standards and
levels of environmental protection;
(C) to strengthen the capacity of United States trading
partners to promote respect for core labor standards (as
defined in section 2113(6));
(D) to strengthen the capacity of United States trading
partners to protect the environment through the promotion of
sustainable development;
(E) to reduce or eliminate government practices or policies
that unduly threaten sustainable development;
(F) to seek market access, through the elimination of
tariffs and nontariff barriers, for United States
environmental technologies, goods, and services; and
(G) to ensure that labor, environmental, health, or safety
policies and practices of the parties to trade agreements
with the United States do not arbitrarily or unjustifiably
discriminate against United States exports or serve as
disguised barriers to trade.
(12) Dispute settlement and enforcement.--The principal
negotiating objectives of the United States with respect to
dispute settlement and enforcement of trade agreements are--
(A) to seek provisions in trade agreements providing for
resolution of disputes between governments under those trade
agreements in an effective, timely, transparent, equitable,
and reasoned manner, requiring determinations based on facts
and the principles of the agreements, with the goal of
increasing compliance with the agreements;
(B) to seek to strengthen the capacity of the Trade Policy
Review Mechanism of the World Trade Organization to review
compliance with commitments;
(C) to seek adherence by panels convened under the Dispute
Settlement Understanding and by the Appellate Body to the
standard of review applicable under the Uruguay Round
Agreement involved in the dispute, including greater
deference, where appropriate, to the fact-finding and
technical expertise of national investigating authorities;
(D) to seek provisions encouraging the early identification
and settlement of disputes through consultation;
(E) to seek provisions to encourage the provision of trade-
expanding compensation if a party to a dispute under the
agreement does not come into compliance with its obligations
under the agreement;
(F) to seek provisions to impose a penalty upon a party to
a dispute under the agreement that--
(i) encourages compliance with the obligations of the
agreement;
(ii) is appropriate to the parties, nature, subject matter,
and scope of the violation; and
(iii) has the aim of not adversely affecting parties or
interests not party to the dispute while maintaining the
effectiveness of the enforcement mechanism; and
(G) to seek provisions that treat United States principal
negotiating objectives equally with respect to--
(i) the ability to resort to dispute settlement under the
applicable agreement;
(ii) the availability of equivalent dispute settlement
procedures; and
(iii) the availability of equivalent remedies.
(13) WTO extended negotiations.--The principal negotiating
objectives of the United States regarding trade in civil
aircraft are those set forth in section 135(c) of the Uruguay
Round Agreements Act (19 U.S.C. 3355(c)) and regarding rules
of origin are the conclusion of an agreement described in
section 132 of that Act (19 U.S.C. 3552).
(14) Trade remedy laws.--The principal negotiating
objectives of the United States with respect to trade remedy
laws are--
(A) to preserve the ability of the United States to enforce
rigorously its trade laws, including the antidumping,
countervailing duty, and safeguard laws, and avoid agreements
that lessen the effectiveness of domestic and international
disciplines on unfair trade, especially dumping and
subsidies, or that lessen the effectiveness of domestic and
international safeguard provisions, in order to ensure that
United States workers, agricultural producers, and firms can
compete fully on fair terms and enjoy the benefits of
reciprocal trade concessions; and
(B) to address and remedy market distortions that lead to
dumping and subsidization, including overcapacity,
cartelization, and market-access barriers.
(15) Border taxes.--The principal negotiating objective of
the United States regarding border taxes is to obtain a
revision of the WTO rules with respect to the treatment of
border adjustments for internal taxes to redress the
disadvantage to countries relying primarily on direct taxes
for revenue rather than indirect taxes.
(16) Textile Negotiations.--The principal negotiating
objectives of the United States with respect to trade in
textiles and apparel articles are to obtain competitive
opportunities for United States exports of textiles and
apparel in foreign markets substantially equivalent to the
competitive opportunities afforded foreign exports in United
States markets and to achieve fairer and more open conditions
of trade in textiles and apparel.
(17) Worst Forms of Child Labor.--The principal negotiating
objective of the United States with respect to the trade-
related aspects of the worst forms of child labor are to seek
commitments by parties to trade agreements to vigorously
enforce their own laws prohibiting the worst forms of child
labor.
(c) Promotion of Certain Priorities.--In order to address
and maintain United States competitiveness in the global
economy, the President shall--
(1) seek greater cooperation between the WTO and the ILO;
(2) seek to establish consultative mechanisms among parties
to trade agreements to strengthen the capacity of United
States trading partners to promote respect for core labor
standards (as defined in section 2113(6)) and to promote
compliance with ILO Convention No. 182 Concerning the
Prohibition and Immediate Action for the Elimination of the
Worst Forms of Child Labor, and report to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate on the content and
operation of such mechanisms;
(3) seek to establish consultative mechanisms among parties
to trade agreements to strengthen the capacity of United
States trading partners to develop and implement standards
for the protection of the environment and human health based
on sound science, and report to the Committee on Ways and
Means of the House of Representatives and the Committee on
Finance of the Senate on the content and operation of such
mechanisms;
(4) conduct environmental reviews of future trade and
investment agreements, consistent with Executive Order 13141
of November 16, 1999, and its relevant guidelines, and report
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate on
such reviews;
(5) review the impact of future trade agreements on United
States employment, including labor markets, modeled after
Executive Order 13141 to the extent appropriate in
establishing procedures and criteria, report to the Committee
on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate on such review, and make
that report available to the public;
(6) take into account other legitimate United States
domestic objectives including, but not limited to, the
protection of legitimate health or safety, essential
security, and consumer interests and the law and regulations
related thereto;
(7) direct the Secretary of Labor to consult with any
country seeking a trade agreement with the United States
concerning that country's labor laws and provide technical
assistance to that country if needed;
(8) in connection with any trade negotiations entered into
under this Act, submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a meaningful labor rights report of the country,
or countries, with respect to which the President is
negotiating, on a time frame determined in accordance with
section 2107(b)(2)(E);
(9) with respect to any trade agreement which the President
seeks to implement under trade authorities procedures, submit
to the Congress a report describing the extent to which the
country or countries that are parties to the agreement have
in effect laws governing exploitative child labor;
(10) continue to promote consideration of multilateral
environmental agreements and consult with parties to such
agreements regarding the consistency of any such agreement
that includes trade measures with existing environmental
exceptions under Article XX of the GATT 1994;
(11) report to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the
Senate, not later than 12 months after the imposition of a
penalty or remedy by the United States permitted by a trade
agreement to which this title applies, on the effectiveness
of the penalty or remedy applied under United States law in
enforcing United States rights under the trade agreement; and
(12) seek to establish consultative mechanisms among
parties to trade agreements to examine the trade consequences
of significant and unanticipated currency movements and to
scrutinize whether a foreign government engaged in a pattern
of manipulating its currency to promote a competitive
advantage in international trade.
The report under paragraph (11) shall address whether the
penalty or remedy was effective in changing the behavior of
the targeted party and whether the penalty or remedy had any
adverse impact on parties or interests not party to the
dispute.
(d) Consultations.--
(1) Consultations with congressional advisers.--In the
course of negotiations conducted under this title, the United
States Trade Representative shall consult closely and on a
timely
[[Page H5907]]
basis with, and keep fully apprised of the negotiations, the
Congressional Oversight Group convened under section 2107 and
all committees of the House of Representatives and the Senate
with jurisdiction over laws that would be affected by a trade
agreement resulting from the negotiations.
(2) Consultation before agreement initialed.--In the course
of negotiations conducted under this title, the United States
Trade Representative shall--
(A) consult closely and on a timely basis (including
immediately before initialing an agreement) with, and keep
fully apprised of the negotiations, the congressional
advisers for trade policy and negotiations appointed under
section 161 of the Trade Act of 1974 (19 U.S.C. 2211), the
Committee on Ways and Means of the House of Representatives,
the Committee on Finance of the Senate, and the Congressional
Oversight Group convened under section 2107; and
(B) with regard to any negotiations and agreement relating
to agricultural trade, also consult closely and on a timely
basis (including immediately before initialing an agreement)
with, and keep fully apprised of the negotiations, the
Committee on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and Forestry of the
Senate.
(e) Adherence to Obligations Under Uruguay Round
Agreements.--In determining whether to enter into
negotiations with a particular country, the President shall
take into account the extent to which that country has
implemented, or has accelerated the implementation of, its
obligations under the Uruguay Round Agreements.
SEC. 2103. TRADE AGREEMENTS AUTHORITY.
(a) Agreements Regarding Tariff Barriers.--
(1) In general.--Whenever the President determines that one
or more existing duties or other import restrictions of any
foreign country or the United States are unduly burdening and
restricting the foreign trade of the United States and that
the purposes, policies, priorities, and objectives of this
title will be promoted thereby, the President--
(A) may enter into trade agreements with foreign countries
before--
(i) June 1, 2005; or
(ii) June 1, 2007, if trade authorities procedures are
extended under subsection (c); and
(B) may, subject to paragraphs (2) and (3), proclaim--
(i) such modification or continuance of any existing duty,
(ii) such continuance of existing duty-free or excise
treatment, or
(iii) such additional duties,
as the President determines to be required or appropriate to
carry out any such trade agreement.
The President shall notify the Congress of the President's
intention to enter into an agreement under this subsection.
(2) Limitations.--No proclamation may be made under
paragraph (1) that--
(A) reduces any rate of duty (other than a rate of duty
that does not exceed 5 percent ad valorem on the date of the
enactment of this Act) to a rate of duty which is less than
50 percent of the rate of such duty that applies on such date
of enactment;
(B) reduces the rate of duty below that applicable under
the Uruguay Round Agreements, on any import sensitive
agricultural product; or
(C) increases any rate of duty above the rate that applied
on the date of the enactment of this Act.
(3) Aggregate reduction; exemption from staging.--
(A) Aggregate reduction.--Except as provided in
subparagraph (B), the aggregate reduction in the rate of duty
on any article which is in effect on any day pursuant to a
trade agreement entered into under paragraph (1) shall not
exceed the aggregate reduction which would have been in
effect on such day if--
(i) a reduction of 3 percent ad valorem or a reduction of
one-tenth of the total reduction, whichever is greater, had
taken effect on the effective date of the first reduction
proclaimed under paragraph (1) to carry out such agreement
with respect to such article; and
(ii) a reduction equal to the amount applicable under
clause (i) had taken effect at 1-year intervals after the
effective date of such first reduction.
(B) Exemption from staging.--No staging is required under
subparagraph (A) with respect to a duty reduction that is
proclaimed under paragraph (1) for an article of a kind that
is not produced in the United States. The United States
International Trade Commission shall advise the President of
the identity of articles that may be exempted from staging
under this subparagraph.
(4) Rounding.--If the President determines that such action
will simplify the computation of reductions under paragraph
(3), the President may round an annual reduction by an amount
equal to the lesser of--
(A) the difference between the reduction without regard to
this paragraph and the next lower whole number; or
(B) one-half of 1 percent ad valorem.
(5) Other limitations.--A rate of duty reduction that may
not be proclaimed by reason of paragraph (2) may take effect
only if a provision authorizing such reduction is included
within an implementing bill provided for under section 2105
and that bill is enacted into law.
(6) Other tariff modifications.--Notwithstanding paragraphs
(1)(B), (2)(A), (2)(C), and (3) through (5), and subject to
the consultation and layover requirements of section 115 of
the Uruguay Round Agreements Act, the President may proclaim
the modification of any duty or staged rate reduction of any
duty set forth in Schedule XX, as defined in section 2(5) of
that Act, if the United States agrees to such modification or
staged rate reduction in a negotiation for the reciprocal
elimination or harmonization of duties under the auspices of
the World Trade Organization.
(7) Authority under uruguay round agreements act not
affected.--Nothing in this subsection shall limit the
authority provided to the President under section 111(b) of
the Uruguay Round Agreements Act (19 U.S.C. 3521(b)).
(b) Agreements Regarding Tariff and Nontariff Barriers.--
(1) In general.--(A) Whenever the President determines
that--
(i) one or more existing duties or any other import
restriction of any foreign country or the United States or
any other barrier to, or other distortion of, international
trade unduly burdens or restricts the foreign trade of the
United States or adversely affects the United States economy,
or
(ii) the imposition of any such barrier or distortion is
likely to result in such a burden, restriction, or effect,
and that the purposes, policies, priorities, and objectives
of this title will be promoted thereby, the President may
enter into a trade agreement described in subparagraph (B)
during the period described in subparagraph (C).
(B) The President may enter into a trade agreement under
subparagraph (A) with foreign countries providing for--
(i) the reduction or elimination of a duty, restriction,
barrier, or other distortion described in subparagraph (A);
or
(ii) the prohibition of, or limitation on the imposition
of, such barrier or other distortion.
(C) The President may enter into a trade agreement under
this paragraph before--
(i) June 1, 2005; or
(ii) June 1, 2007, if trade authorities procedures are
extended under subsection (c).
(2) Conditions.--A trade agreement may be entered into
under this subsection only if such agreement makes progress
in meeting the applicable objectives described in section
2102(a) and (b) and the President satisfies the conditions
set forth in section 2104.
(3) Bills qualifying for trade authorities procedures.--(A)
The provisions of section 151 of the Trade Act of 1974 (in
this title referred to as ``trade authorities procedures'')
apply to a bill of either House of Congress which contains
provisions described in subparagraph (B) to the same extent
as such section 151 applies to implementing bills under that
section. A bill to which this paragraph applies shall
hereafter in this title be referred to as an ``implementing
bill''.
(B) The provisions referred to in subparagraph (A) are--
(i) a provision approving a trade agreement entered into
under this subsection and approving the statement of
administrative action, if any, proposed to implement such
trade agreement; and
(ii) if changes in existing laws or new statutory authority
are required to implement such trade agreement or agreements,
provisions, necessary or appropriate to implement such trade
agreement or agreements, either repealing or amending
existing laws or providing new statutory authority.
(c) Extension Disapproval Process for Congressional Trade
Authorities Procedures.--
(1) In general.--Except as provided in section 2105(b)--
(A) the trade authorities procedures apply to implementing
bills submitted with respect to trade agreements entered into
under subsection (b) before July 1, 2005; and
(B) the trade authorities procedures shall be extended to
implementing bills submitted with respect to trade agreements
entered into under subsection (b) after June 30, 2005, and
before July 1, 2007, if (and only if)--
(i) the President requests such extension under paragraph
(2); and
(ii) neither House of the Congress adopts an extension
disapproval resolution under paragraph (5) before June 1,
2005.
(2) Report to congress by the president.--If the President
is of the opinion that the trade authorities procedures
should be extended to implementing bills described in
paragraph (1)(B), the President shall submit to the Congress,
not later than March 1, 2005, a written report that contains
a request for such extension, together with--
(A) a description of all trade agreements that have been
negotiated under subsection (b) and the anticipated schedule
for submitting such agreements to the Congress for approval;
(B) a description of the progress that has been made in
negotiations to achieve the purposes, policies, priorities,
and objectives of this title, and a statement that such
progress justifies the continuation of negotiations; and
(C) a statement of the reasons why the extension is needed
to complete the negotiations.
(3) Other reports to congress.--
(A) Report by the advisory committee.--The President shall
promptly inform the Advisory Committee for Trade Policy and
Negotiations established under section 135 of the Trade Act
of 1974 (19 U.S.C. 2155) of the President's decision to
submit a report to the Congress under paragraph (2). The
Advisory Committee shall submit to the Congress as soon as
practicable, but not later than May 1, 2005, a written report
that contains--
(i) its views regarding the progress that has been made in
negotiations to achieve the purposes, policies, priorities,
and objectives of this title; and
(ii) a statement of its views, and the reasons therefor,
regarding whether the extension requested under paragraph (2)
should be approved or disapproved.
(B) Report by itc.--The President shall promptly inform the
International Trade Commission of the President's decision to
submit a
[[Page H5908]]
report to the Congress under paragraph (2). The International
Trade Commission shall submit to the Congress as soon as
practicable, but not later than May 1, 2005, a written report
that contains a review and analysis of the economic impact on
the United States of all trade agreements implemented between
the date of enactment of this Act and the date on which the
President decides to seek an extension requested under
paragraph (2).
(4) Status of reports.--The reports submitted to the
Congress under paragraphs (2) and (3), or any portion of such
reports, may be classified to the extent the President
determines appropriate.
(5) Extension disapproval resolutions.--(A) For purposes of
paragraph (1), the term ``extension disapproval resolution''
means a resolution of either House of the Congress, the sole
matter after the resolving clause of which is as follows:
``That the ____ disapproves the request of the President for
the extension, under section 2103(c)(1)(B)(i) of the
Bipartisan Trade Promotion Authority Act of 2002, of the
trade authorities procedures under that Act to any
implementing bill submitted with respect to any trade
agreement entered into under section 2103(b) of that Act
after June 30, 2005.'', with the blank space being filled
with the name of the resolving House of the Congress.
(B) Extension disapproval resolutions--
(i) may be introduced in either House of the Congress by
any member of such House; and
(ii) shall be referred, in the House of Representatives, to
the Committee on Ways and Means and, in addition, to the
Committee on Rules.
(C) The provisions of section 152(d) and (e) of the Trade
Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the
floor consideration of certain resolutions in the House and
Senate) apply to extension disapproval resolutions.
(D) It is not in order for--
(i) the Senate to consider any extension disapproval
resolution not reported by the Committee on Finance;
(ii) the House of Representatives to consider any extension
disapproval resolution not reported by the Committee on Ways
and Means and, in addition, by the Committee on Rules; or
(iii) either House of the Congress to consider an extension
disapproval resolution after June 30, 2005.
(d) Commencement of Negotiations.--In order to contribute
to the continued economic expansion of the United States, the
President shall commence negotiations covering tariff and
nontariff barriers affecting any industry, product, or
service sector, and expand existing sectoral agreements to
countries that are not parties to those agreements, in cases
where the President determines that such negotiations are
feasible and timely and would benefit the United States. Such
sectors include agriculture, commercial services,
intellectual property rights, industrial and capital goods,
government procurement, information technology products,
environmental technology and services, medical equipment and
services, civil aircraft, and infrastructure products. In so
doing, the President shall take into account all of the
principal negotiating objectives set forth in section
2102(b).
SEC. 2104. CONSULTATIONS AND ASSESSMENT.
(a) Notice and Consultation Before Negotiation.--The
President, with respect to any agreement that is subject to
the provisions of section 2103(b), shall--
(1) provide, at least 90 calendar days before initiating
negotiations, written notice to the Congress of the
President's intention to enter into the negotiations and
set forth therein the date the President intends to
initiate such negotiations, the specific United States
objectives for the negotiations, and whether the President
intends to seek an agreement, or changes to an existing
agreement;
(2) before and after submission of the notice, consult
regarding the negotiations with the Committee on Finance of
the Senate and the Committee on Ways and Means of the House
of Representatives, such other committees of the House and
Senate as the President deems appropriate, and the
Congressional Oversight group convened under section 2107;
and
(3) upon the request of a majority of the members of the
Congressional Oversight Group under section 2107(c), meet
with the Congressional Oversight Group before initiating the
negotiations or at any other time concerning the
negotiations.
(b) Negotiations Regarding Agriculture.--
(1) In general.--Before initiating or continuing
negotiations the subject matter of which is directly related
to the subject matter under section 2102(b)(10)(A)(i) with
any country, the President shall assess whether United States
tariffs on agricultural products that were bound under the
Uruguay Round Agreements are lower than the tariffs bound by
that country. In addition, the President shall consider
whether the tariff levels bound and applied throughout the
world with respect to imports from the United States are
higher than United States tariffs and whether the negotiation
provides an opportunity to address any such disparity. The
President shall consult with the Committee on Ways and Means
and the Committee on Agriculture of the House of
Representatives and the Committee on Finance and the
Committee on Agriculture, Nutrition, and Forestry of the
Senate concerning the results of the assessment, whether it
is appropriate for the United States to agree to further
tariff reductions based on the conclusions reached in the
assessment, and how all applicable negotiating objectives
will be met.
(2) Special consultations on import sensitive products.--
(A) Before initiating negotiations with regard to
agriculture, and, with respect to the Free Trade Area for the
Americas and negotiations with regard to agriculture under
the auspices of the World Trade Organization, as soon as
practicable after the enactment of this Act, the United
States Trade Representative shall--
(i) identify those agricultural products subject to tariff-
rate quotas on the date of enactment of this Act, and
agricultural products subject to tariff reductions by the
United States as a result of the Uruguay Round Agreements,
for which the rate of duty was reduced on January 1, 1995, to
a rate which was not less than 97.5 percent of the rate of
duty that applied to such article on December 31, 1994;
(ii) consult with the Committee on Ways and Means and the
Committee on Agriculture of the House of Representatives and
the Committee on Finance and the Committee on Agriculture,
Nutrition, and Forestry of the Senate concerning--
(I) whether any further tariff reductions on the products
identified under clause (i) should be appropriate, taking
into account the impact of any such tariff reduction on the
United States industry producing the product concerned;
(II) whether the products so identified face unjustified
sanitary or phytosanitary restrictions, including those not
based on scientific principles in contravention of the
Uruguay Round Agreements; and
(III) whether the countries participating in the
negotiations maintain export subsidies or other programs,
policies, or practices that distort world trade in such
products and the impact of such programs, policies, and
practices on United States producers of the products;
(iii) request that the International Trade Commission
prepare an assessment of the probable economic effects of any
such tariff reduction on the United States industry producing
the product concerned and on the United States economy as a
whole; and
(iv) upon complying with clauses (i), (ii), and (iii),
notify the Committee on Ways and Means and the Committee on
Agriculture of the House of Representatives and the Committee
on Finance and the Committee on Agriculture, Nutrition, and
Forestry of the Senate of those products identified under
clause (i) for which the Trade Representative intends to seek
tariff liberalization in the negotiations and the reasons for
seeking such tariff liberalization.
(B) If, after negotiations described in subparagraph (A)
are commenced--
(i) the United States Trade Representative identifies any
additional agricultural product described in subparagraph
(A)(i) for tariff reductions which were not the subject of a
notification under subparagraph (A)(iv), or
(ii) any additional agricultural product described in
subparagraph (A)(i) is the subject of a request for tariff
reductions by a party to the negotiations,
the Trade Representative shall, as soon as practicable,
notify the committees referred to in subparagraph (A)(iv) of
those products and the reasons for seeking such tariff
reductions.
(3) Negotiations regarding the fishing industry.--Before
initiating, or continuing, negotiations which directly relate
to fish or shellfish trade with any country, the President
shall consult with the Committee on Ways and Means and the
Committee on Resources of the House of Representatives, and
the Committee on Finance and the Committee on Commerce,
Science, and Transportation of the Senate, and shall keep the
Committees apprised of negotiations on an ongoing and timely
basis.
(c) Negotiations Regarding Textiles.--Before initiating or
continuing negotiations the subject matter of which is
directly related to textiles and apparel products with any
country, the President shall assess whether United States
tariffs on textile and apparel products that were bound under
the Uruguay Round Agreements are lower than the tariffs bound
by that country and whether the negotiation provides an
opportunity to address any such disparity. The President
shall consult with the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate concerning the results of the assessment, whether it
is appropriate for the United States to agree to further
tariff reductions based on the conclusions reached in the
assessment, and how all applicable negotiating objectives
will be met.
(d) Consultation With Congress Before Agreements Entered
Into.--
(1) Consultation.--Before entering into any trade agreement
under section 2103(b), the President shall consult with--
(A) the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate;
(B) each other committee of the House and the Senate, and
each joint committee of the Congress, which has jurisdiction
over legislation involving subject matters which would be
affected by the trade agreement; and
(C) the Congressional Oversight Group convened under
section 2107.
(2) Scope.--The consultation described in paragraph (1)
shall include consultation with respect to--
(A) the nature of the agreement;
(B) how and to what extent the agreement will achieve the
applicable purposes, policies, priorities, and objectives of
this title; and
(C) the implementation of the agreement under section 2105,
including the general effect of the agreement on existing
laws.
(3) Report regarding united states trade remedy laws.--
(A) Changes in certain trade laws.--The President, at least
180 calendar days before the day on which the President
enters into a trade agreement under section 2103(b), shall
report to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate--
(i) the range of proposals advanced in the negotiations
with respect to that agreement, that may be in the final
agreement, and that could require amendments to title VII of
the Tariff Act
[[Page H5909]]
of 1930 or to chapter 1 of title II of the Trade Act of 1974;
and
(ii) how these proposals relate to the objectives described
in section 2102(b)(14).
(B) Certain agreements.--With respect to a trade agreement
entered into with Chile or Singapore, the report referred to
in subparagraph (A) shall be submitted by the President at
least 90 calendar days before the day on which the President
enters into that agreement.
(C) Resolutions.--(i) At any time after the transmission of
the report under subparagraph (A), if a resolution is
introduced with respect to that report in either House of
Congress, the procedures set forth in clauses (iii) through
(vi) shall apply to that resolution if--
(I) no other resolution with respect to that report has
previously been reported in that House of Congress by the
Committee on Ways and Means or the Committee on Finance, as
the case may be, pursuant to those procedures; and
(II) no procedural disapproval resolution under section
2105(b) introduced with respect to a trade agreement entered
into pursuant to the negotiations to which the report under
subparagraph (A) relates has previously been reported in that
House of Congress by the Committee on Ways and Means or the
Committee on Finance, as the case may be.
(ii) For purposes of this subparagraph, the term
``resolution'' means only a resolution of either House of
Congress, the matter after the resolving clause of which is
as follows: ``That the ____ finds that the proposed changes
to United States trade remedy laws contained in the report of
the President transmitted to the Congress on ____ under
section 2104(d)(3) of the Bipartisan Trade Promotion
Authority Act of 2002 with respect to ____, are inconsistent
with the negotiating objectives described in section
2102(b)(14) of that Act.'', with the first blank space being
filled with the name of the resolving House of Congress, the
second blank space being filled with the appropriate date of
the report, and the third blank space being filled with the
name of the country or countries involved.
(iii) Resolutions in the House of Representatives--
(I) may be introduced by any Member of the House;
(II) shall be referred to the Committee on Ways and Means
and, in addition, to the Committee on Rules; and
(III) may not be amended by either Committee.
(iv) Resolutions in the Senate--
(I) may be introduced by any Member of the Senate;
(II) shall be referred to the Committee on Finance; and
(III) may not be amended.
(iv) It is not in order for the House of Representatives to
consider any resolution that is not reported by the Committee
on Ways and Means and, in addition, by the Committee on
Rules.
(v) It is not in order for the Senate to consider any
resolution that is not reported by the Committee on Finance.
(vi) The provisions of section 152(d) and (e) of the Trade
Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to floor
consideration of certain resolutions in the House and Senate)
shall apply to resolutions.
(e) Advisory Committee Reports.--The report required under
section 135(e)(1) of the Trade Act of 1974 regarding any
trade agreement entered into under section 2103(a) or (b) of
this Act shall be provided to the President, the Congress,
and the United States Trade Representative not later than 30
days after the date on which the President notifies the
Congress under section 2103(a)(1) or 2105(a)(1)(A) of the
President's intention to enter into the agreement.
(f) ITC Assessment.--
(1) In general.--The President, at least 90 calendar days
before the day on which the President enters into a trade
agreement under section 2103(b), shall provide the
International Trade Commission (referred to in this
subsection as ``the Commission'') with the details of the
agreement as it exists at that time and request the
Commission to prepare and submit an assessment of the
agreement as described in paragraph (2). Between the time the
President makes the request under this paragraph and the time
the Commission submits the assessment, the President shall
keep the Commission current with respect to the details of
the agreement.
(2) ITC assessment.--Not later than 90 calendar days after
the President enters into the agreement, the Commission shall
submit to the President and the Congress a report assessing
the likely impact of the agreement on the United States
economy as a whole and on specific industry sectors,
including the impact the agreement will have on the gross
domestic product, exports and imports, aggregate employment
and employment opportunities, the production, employment, and
competitive position of industries likely to be significantly
affected by the agreement, and the interests of United States
consumers.
(3) Review of empirical literature.--In preparing the
assessment, the Commission shall review available economic
assessments regarding the agreement, including literature
regarding any substantially equivalent proposed agreement,
and shall provide in its assessment a description of the
analyses used and conclusions drawn in such literature, and a
discussion of areas of consensus and divergence between the
various analyses and conclusions, including those of the
Commission regarding the agreement.
SEC. 2105. IMPLEMENTATION OF TRADE AGREEMENTS.
(a) In General.--
(1) Notification and submission.--Any agreement entered
into under section 2103(b) shall enter into force with
respect to the United States if (and only if)--
(A) the President, at least 90 calendar days before the day
on which the President enters into the trade agreement,
notifies the House of Representatives and the Senate of the
President's intention to enter into the agreement, and
promptly thereafter publishes notice of such intention in the
Federal Register;
(B) within 60 days after entering into the agreement, the
President submits to the Congress a description of those
changes to existing laws that the President considers would
be required in order to bring the United States into
compliance with the agreement;
(C) after entering into the agreement, the President
submits to the Congress, on a day on which both Houses of
Congress are in session, a copy of the final legal text of
the agreement, together with--
(i) a draft of an implementing bill described in section
2103(b)(3);
(ii) a statement of any administrative action proposed to
implement the trade agreement; and
(iii) the supporting information described in paragraph
(2); and
(D) the implementing bill is enacted into law.
(2) Supporting information.--The supporting information
required under paragraph (1)(C)(iii) consists of--
(A) an explanation as to how the implementing bill and
proposed administrative action will change or affect existing
law; and
(B) a statement--
(i) asserting that the agreement makes progress in
achieving the applicable purposes, policies, priorities, and
objectives of this title; and
(ii) setting forth the reasons of the President regarding--
(I) how and to what extent the agreement makes progress in
achieving the applicable purposes, policies, and objectives
referred to in clause (i);
(II) whether and how the agreement changes provisions of an
agreement previously negotiated;
(III) how the agreement serves the interests of United
States commerce;
(IV) how the implementing bill meets the standards set
forth in section 2103(b)(3); and
(V) how and to what extent the agreement makes progress in
achieving the applicable purposes, policies, and objectives
referred to in section 2102(c) regarding the promotion of
certain priorities.
(3) Reciprocal benefits.--In order to ensure that a foreign
country that is not a party to a trade agreement entered into
under section 2103(b) does not receive benefits under the
agreement unless the country is also subject to the
obligations under the agreement, the implementing bill
submitted with respect to the agreement shall provide that
the benefits and obligations under the agreement apply only
to the parties to the agreement, if such application is
consistent with the terms of the agreement. The implementing
bill may also provide that the benefits and obligations under
the agreement do not apply uniformly to all parties to the
agreement, if such application is consistent with the
terms of the agreement.
(4) Disclosure of commitments.--Any agreement or other
understanding with a foreign government or governments
(whether oral or in writing) that--
(A) relates to a trade agreement with respect to which the
Congress enacts an implementing bill under trade authorities
procedures, and
(B) is not disclosed to the Congress before an implementing
bill with respect to that agreement is introduced in either
House of Congress,
shall not be considered to be part of the agreement approved
by the Congress and shall have no force and effect under
United States law or in any dispute settlement body.
(b) Limitations on Trade Authorities Procedures.--
(1) For lack of notice or consultations.--
(A) In general.--The trade authorities procedures shall not
apply to any implementing bill submitted with respect to a
trade agreement or trade agreements entered into under
section 2103(b) if during the 60-day period beginning on the
date that one House of Congress agrees to a procedural
disapproval resolution for lack of notice or consultations
with respect to such trade agreement or agreements, the other
House separately agrees to a procedural disapproval
resolution with respect to such trade agreement or
agreements.
(B) Procedural disapproval resolution.--(i) For purposes of
this paragraph, the term ``procedural disapproval
resolution'' means a resolution of either House of Congress,
the sole matter after the resolving clause of which is as
follows: ``That the President has failed or refused to notify
or consult in accordance with the Bipartisan Trade Promotion
Authority Act of 2002 on negotiations with respect to
____________ and, therefore, the trade authorities procedures
under that Act shall not apply to any implementing bill
submitted with respect to such trade agreement or
agreements.'', with the blank space being filled with a
description of the trade agreement or agreements with respect
to which the President is considered to have failed or
refused to notify or consult.
(ii) For purposes of clause (i), the President has ``failed
or refused to notify or consult in accordance with the
Bipartisan Trade Promotion Authority Act of 2002'' on
negotiations with respect to a trade agreement or trade
agreements if--
(I) the President has failed or refused to consult (as the
case may be) in accordance with section 2104 or 2105 with
respect to the negotiations, agreement, or agreements;
(II) guidelines under section 2107(b) have not been
developed or met with respect to the negotiations, agreement,
or agreements;
(III) the President has not met with the Congressional
Oversight Group pursuant to a request made under section
2107(c) with respect to the negotiations, agreement, or
agreements; or
[[Page H5910]]
(IV) the agreement or agreements fail to make progress in
achieving the purposes, policies, priorities, and objectives
of this title.
(2) Procedures for considering resolutions.--(A) Procedural
disapproval resolutions--
(i) in the House of Representatives--
(I) may be introduced by any Member of the House;
(II) shall be referred to the Committee on Ways and Means
and, in addition, to the Committee on Rules; and
(III) may not be amended by either Committee; and
(ii) in the Senate--
(I) may be introduced by any Member of the Senate;
(II) shall be referred to the Committee on Finance; and
(III) may not be amended.
(B) The provisions of section 152(d) and (e) of the Trade
Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the
floor consideration of certain resolutions in the House and
Senate) apply to a procedural disapproval resolution
introduced with respect to a trade agreement if no other
procedural disapproval resolution with respect to that trade
agreement has previously been reported in that House of
Congress by the Committee on Ways and Means or the Committee
on Finance, as the case may be, and if no resolution
described in section 2104(d)(3)(C)(ii) with respect to that
trade agreement has been reported in that House of Congress
by the Committee on Ways and Means or the Committee on
Finance, as the case may be, pursuant to the procedures set
forth in clauses (iii) through (vi) of such section
2104(d)(3)(C).
(C) It is not in order for the House of Representatives to
consider any procedural disapproval resolution not reported
by the Committee on Ways and Means and, in addition, by the
Committee on Rules.
(D) It is not in order for the Senate to consider any
procedural disapproval resolution not reported by the
Committee on Finance.
(3) For failure to meet other requirements.--Not later than
December 31, 2002, the Secretary of Commerce, in consultation
with the Secretary of State, the Secretary of the Treasury,
the Attorney General, and the United States Trade
Representative, shall transmit to the Congress a report
setting forth the strategy of the executive branch to address
concerns of the Congress regarding whether dispute settlement
panels and the Appellate Body of the WTO have added to
obligations, or diminished rights, of the United States, as
described in section 2101(b)(3). Trade authorities procedures
shall not apply to any implementing bill with respect to
an agreement negotiated under the auspices of the WTO
unless the Secretary of Commerce has issued such report in
a timely manner.
(c) Rules of House of Representatives and Senate.--
Subsection (b) of this section, section 2103(c), aand section
2104(d)(3)(C) are enacted by the Congress--
(1) as an exercise of the rulemaking power of the House of
Representatives and the Senate, respectively, and as such are
deemed a part of the rules of each House, respectively, and
such procedures supersede other rules only to the extent that
they are inconsistent with such other rules; and
(2) with the full recognition of the constitutional right
of either House to change the rules (so far as relating to
the procedures of that House) at any time, in the same
manner, and to the same extent as any other rule of that
House.
SEC. 2106. TREATMENT OF CERTAIN TRADE AGREEMENTS FOR WHICH
NEGOTIATIONS HAVE ALREADY BEGUN.
(a) Certain Agreements.--Notwithstanding the prenegotiation
notification and consultation requirement described in
section 2104(a), if an agreement to which section 2103(b)
applies--
(1) is entered into under the auspices of the World Trade
Organization,
(2) is entered into with Chile,
(3) is entered into with Singapore, or
(4) establishes a Free Trade Area for the Americas,
and results from negotiations that were commenced before the
date of the enactment of this Act, subsection (b) shall
apply.
(b) Treatment of Agreements.--In the case of any agreement
to which subsection (a) applies--
(1) the applicability of the trade authorities procedures
to implementing bills shall be determined without regard to
the requirements of section 2104(a) (relating only to 90 days
notice prior to initiating negotiations), and any procedural
disapproval resolution under section 2105(b)(1)(B) shall not
be in order on the basis of a failure or refusal to comply
with the provisions of section 2104(a); and
(2) the President shall, as soon as feasible after the
enactment of this Act--
(A) notify the Congress of the negotiations described in
subsection (a), the specific United States objectives in the
negotiations, and whether the President is seeking a new
agreement or changes to an existing agreement; and
(B) before and after submission of the notice, consult
regarding the negotiations with the committees referred to in
section 2104(a)(2) and the Congressional Oversight Group
convened under section 2107.
SEC. 2107. CONGRESSIONAL OVERSIGHT GROUP.
(a) Members and Functions.--
(1) In general.--By not later than 60 days after the date
of the enactment of this Act, and not later than 30 days
after the convening of each Congress, the chairman of the
Committee on Ways and Means of the House of Representatives
and the chairman of the Committee on Finance of the Senate
shall convene the Congressional Oversight Group.
(2) Membership from the house.--In each Congress, the
Congressional Oversight Group shall be comprised of the
following Members of the House of Representatives:
(A) The chairman and ranking member of the Committee on
Ways and Means, and 3 additional members of such Committee
(not more than 2 of whom are members of the same political
party).
(B) The chairman and ranking member, or their designees, of
the committees of the House of Representatives which would
have, under the Rules of the House of Representatives,
jurisdiction over provisions of law affected by a trade
agreement negotiations for which are conducted at any time
during that Congress and to which this title would apply.
(3) Membership from the senate.--In each Congress, the
Congressional Oversight Group shall also be comprised of the
following members of the Senate:
(A) The chairman and ranking member of the Committee on
Finance and 3 additional members of such Committee (not more
than 2 of whom are members of the same political party).
(B) The chairman and ranking member, or their designees, of
the committees of the Senate which would have, under the
Rules of the Senate, jurisdiction over provisions of law
affected by a trade agreement negotiations for which are
conducted at any time during that Congress and to which this
title would apply.
(4) Accreditation.--Each member of the Congressional
Oversight Group described in paragraph (2)(A) and (3)(A)
shall be accredited by the United States Trade Representative
on behalf of the President as an official adviser to the
United States delegation in negotiations for any trade
agreement to which this title applies. Each member of the
Congressional Oversight Group described in paragraph (2)(B)
and (3)(B) shall be accredited by the United States Trade
Representative on behalf of the President as an official
adviser to the United States delegation in the negotiations
by reason of which the member is in the Congressional
Oversight Group. The Congressional Oversight Group shall
consult with and provide advice to the Trade Representative
regarding the formulation of specific objectives, negotiating
strategies and positions, the development of the applicable
trade agreement, and compliance and enforcement of the
negotiated commitments under the trade agreement.
(5) Chair.--The Congressional Oversight Group shall be
chaired by the Chairman of the Committee on Ways and Means of
the House of Representatives and the Chairman of the
Committee on Finance of the Senate.
(b) Guidelines.--
(1) Purpose and revision.--The United States Trade
Representative, in consultation with the chairmen and ranking
minority members of the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate--
(A) shall, within 120 days after the date of the enactment
of this Act, develop written guidelines to facilitate the
useful and timely exchange of information between the Trade
Representative and the Congressional Oversight Group convened
under this section; and
(B) may make such revisions to the guidelines as may be
necessary from time to time.
(2) Content.--The guidelines developed under paragraph (1)
shall provide for, among other things--
(A) regular, detailed briefings of the Congressional
Oversight Group regarding negotiating objectives, including
the promotion of certain priorities referred to in section
2102(c), and positions and the status of the applicable
negotiations, beginning as soon as practicable after the
Congressional Oversight Group is convened, with more frequent
briefings as trade negotiations enter the final stage;
(B) access by members of the Congressional Oversight Group,
and staff with proper security clearances, to pertinent
documents relating to the negotiations, including classified
materials;
(C) the closest practicable coordination between the Trade
Representative and the Congressional Oversight Group at all
critical periods during the negotiations, including at
negotiation sites;
(D) after the applicable trade agreement is concluded,
consultation regarding ongoing compliance and enforcement of
negotiated commitments under the trade agreement; and
(E) the time frame for submitting the report required under
section 2102(c)(8).
(c) Request for Meeting.--Upon the request of a majority of
the Congressional Oversight Group, the President shall meet
with the Congressional Oversight Group before initiating
negotiations with respect to a trade agreement, or at any
other time concerning the negotiations.
SEC. 2108. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT
REQUIREMENTS.
(a) In General.--At the time the President submits to the
Congress the final text of an agreement pursuant to section
2105(a)(1)(C), the President shall also submit a plan for
implementing and enforcing the agreement. The implementation
and enforcement plan shall include the following:
(1) Border personnel requirements.--A description of
additional personnel required at border entry points,
including a list of additional customs and agricultural
inspectors.
(2) Agency staffing requirements.--A description of
additional personnel required by Federal agencies responsible
for monitoring and implementing the trade agreement,
including personnel required by the Office of the United
States Trade Representative, the Department of Commerce, the
Department of Agriculture (including additional personnel
required to implement sanitary and phytosanitary measures in
order to obtain market access for United States exports), the
Department of the Treasury, and such other agencies as may be
necessary.
(3) Customs infrastructure requirements.--A description of
the additional equipment and facilities needed by the United
States Customs Service.
[[Page H5911]]
(4) Impact on state and local governments.--A description
of the impact the trade agreement will have on State and
local governments as a result of increases in trade.
(5) Cost analysis.--An analysis of the costs associated
with each of the items listed in paragraphs (1) through (4).
(b) Budget Submission.--The President shall include a
request for the resources necessary to support the plan
described in subsection (a) in the first budget that the
President submits to the Congress after the submission of the
plan.
SEC. 2109. COMMITTEE STAFF.
The grant of trade promotion authority under this title is
likely to increase the activities of the primary committees
of jurisdiction in the area of international trade. In
addition, the creation of the Congressional Oversight Group
under section 2107 will increase the participation of a
broader number of Members of Congress in the formulation of
United States trade policy and oversight of the international
trade agenda for the United States. The primary committees of
jurisdiction should have adequate staff to accommodate these
increases in activities.
SEC. 2110. CONFORMING AMENDMENTS.
(a) In General.--Title I of the Trade Act of 1974 (19
U.S.C. 2111 et seq.) is amended as follows:
(1) Implementing bill.--
(A) Section 151(b)(1) (19 U.S.C. 2191(b)(1)) is amended by
striking ``section 1103(a)(1) of the Omnibus Trade and
Competitiveness Act of 1988, or section 282 of the Uruguay
Round Agreements Act'' and inserting ``section 282 of the
Uruguay Round Agreements Act, or section 2105(a)(1) of the
Bipartisan Trade Promotion Authority Act of 2002''.
(B) Section 151(c)(1) (19 U.S.C. 2191(c)(1)) is amended by
striking ``or section 282 of the Uruguay Round Agreements
Act'' and inserting ``, section 282 of the Uruguay Round
Agreements Act, or section 2105(a)(1) of the Bipartisan Trade
Promotion Authority Act of 2002''.
(2) Advice from international trade commission.--Section
131 (19 U.S.C. 2151) is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking ``section 123 of this Act
or section 1102 (a) or (c) of the Omnibus Trade and
Competitiveness Act of 1988,'' and inserting ``section 123 of
this Act or section 2103(a) or (b) of the Bipartisan Trade
Promotion Authority Act of 2002,''; and
(ii) in paragraph (2), by striking ``section 1102 (b) or
(c) of the Omnibus Trade and Competitiveness Act of 1988''
and inserting ``section 2103(b) of the Bipartisan Trade
Promotion Authority Act of 2002'';
(B) in subsection (b), by striking ``section
1102(a)(3)(A)'' and inserting ``section 2103(a)(3)(A) of the
Bipartisan Trade Promotion Authority Act of 2002''; and
(C) in subsection (c), by striking ``section 1102 of the
Omnibus Trade and Competitiveness Act of 1988,'' and
inserting ``section 2103 of the Bipartisan Trade Promotion
Authority Act of 2002,''.
(3) Hearings and advice.--Sections 132, 133(a), and 134(a)
(19 U.S.C. 2152, 2153(a), and 2154(a)) are each amended by
striking ``section 1102 of the Omnibus Trade and
Competitiveness Act of 1988,'' each place it appears and
inserting ``section 2103 of the Bipartisan Trade Promotion
Authority Act of 2002,''.
(4) Prerequisites for offers.--Section 134(b) (19 U.S.C.
2154(b)) is amended by striking ``section 1102 of the Omnibus
Trade and Competitiveness Act of 1988'' and inserting
``section 2103 of the Bipartisan Trade Promotion Authority
Act of 2002''.
(5) Advice from private and public sectors.--Section 135
(19 U.S.C. 2155) is amended--
(A) in subsection (a)(1)(A), by striking ``section 1102 of
the Omnibus Trade and Competitiveness Act of 1988'' and
inserting ``section 2103 of the Bipartisan Trade Promotion
Authority Act of 2002'';
(B) in subsection (e)(1)--
(i) by striking ``section 1102 of the Omnibus Trade and
Competitiveness Act of 1988'' each place it appears and
inserting ``section 2103 of the Bipartisan Trade Promotion
Authority Act of 2002''; and
(ii) by striking ``section 1103(a)(1)(A) of such Act of
1988'' and inserting ``section 2105(a)(1)(A) of the
Bipartisan Trade Promotion Authority Act of 2002''; and
(C) in subsection (e)(2), by striking ``section 1101 of the
Omnibus Trade and Competitiveness Act of 1988'' and inserting
``section 2102 of the Bipartisan Trade Promotion Authority
Act of 2002''.
(6) Transmission of agreements to congress.--Section 162(a)
(19 U.S.C. 2212(a)) is amended by striking ``or under section
1102 of the Omnibus Trade and Competitiveness Act of 1988''
and inserting ``or under section 2103 of the Bipartisan Trade
Promotion Authority Act of 2002''.
(b) Application of Certain Provisions.--For purposes of
applying sections 125, 126, and 127 of the Trade Act of 1974
(19 U.S.C. 2135, 2136(a), and 2137)--
(1) any trade agreement entered into under section 2103
shall be treated as an agreement entered into under section
101 or 102, as appropriate, of the Trade Act of 1974 (19
U.S.C. 2111 or 2112); and
(2) any proclamation or Executive order issued pursuant to
a trade agreement entered into under section 2103 shall be
treated as a proclamation or Executive order issued pursuant
to a trade agreement entered into under section 102 of the
Trade Act of 1974.
SEC. 2111. REPORT ON IMPACT OF TRADE PROMOTION AUTHORITY.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the International Trade Commission
shall report to the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of
Representatives regarding the economic impact on the United
States of the trade agreements described in subsection (b).
(b) Agreements.--The trade agreements described in this
subsection are the following:
(1) The United States-Israel Free Trade Agreement.
(2) The United States-Canada Free Trade Agreement.
(3) The North American Free Trade Agreement.
(4) The Uruguay Round Agreements.
(5) The Tokyo Round of Multilateral Trade Negotiations.
SEC. 2112. INTERESTS OF SMALL BUSINESS.
The Assistant United States Trade Representative for
Industry and Telecommunications shall be responsible for
ensuring that the interests of small business are considered
in all trade negotiations in accordance with the objective
described in section 2102(a)(8). It is the sense of the
Congress that the small business functions should be
reflected in the title of the Assistant United States Trade
Representative assigned the responsibility for small
business.
SEC. 2113. DEFINITIONS.
In this title:
(1) Agreement on agriculture.--The term ``Agreement on
Agriculture'' means the agreement referred to in section
101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(2)).
(2) Agreement on safeguards.--The term ``Agreement on
Safeguards means the agreement referred to in section
101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(12)).
(3) Agreement on subsidies and countervailing measures.--
The term ``Agreement on Subsidies and Countervailing
Measures'' means the agreement referred to in section
101(d)(13) of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(13)).
(4) Antidumping agreement.--The term ``Antidumping
Agreement`` means the Agreement on Implementation of Article
VI of the General Agreement on Tariffs and Trade 1994
referred to in section 101(d)(7) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(7)).
(5) Appellate body.--The term ``Appellate Body'' means the
Appellate Body established under Article 17.1 of the Dispute
Settlement Understanding.
(6) Core labor standards.--The term ``core labor
standards'' means--
(A) the right of association;
(B) the right to organize and bargain collectively;
(C) a prohibition on the use of any form of forced or
compulsory labor;
(D) a minimum age for the employment of children; and
(E) acceptable conditions of work with respect to minimum
wages, hours of work, and occupational safety and health.
(7) Dispute settlement understanding.--The term ``Dispute
Settlement Understanding'' means the Understanding on Rules
and Procedures Governing the Settlement of Disputes referred
to in section 101(d)(16) of the Uruguay Round Agreements Act.
(8) GATT 1994.--The term ``GATT 1994'' has the meaning
given that term in section 2 of the Uruguay Round Agreements
Act (19 U.S.C. 3501).
(9) ILO.--The term ``ILO'' means the International Labor
Organization.
(10) Import sensitive agricultural product.--The term
``import sensitive agricultural product'' means an
agricultural product--
(A) with respect to which, as a result of the Uruguay Round
Agreements the rate of duty was the subject of tariff
reductions by the United States and, pursuant to such
Agreements, was reduced on January 1, 1995, to a rate that
was not less than 97.5 percent of the rate of duty that
applied to such article on December 31, 1994; or
(B) which was subject to a tariff-rate quota on the date of
the enactment of this Act.
(11) United states person.--The term ``United States
person'' means--
(A) a United States citizen;
(B) a partnership, corporation, or other legal entity
organized under the laws of the United States; and
(C) a partnership, corporation, or other legal entity that
is organized under the laws of a foreign country and is
controlled by entities described in subparagraph (B) or
United States citizens, or both.
(12) Uruguay round agreements.--The term ``Uruguay Round
Agreements'' has the meaning given that term in section 2(7)
of the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).
(13) World trade organization; wto.--The terms ``World
Trade Organization'' and ``WTO'' mean the organization
established pursuant to the WTO Agreement.
(14) WTO agreement.--The term ``WTO Agreement'' means the
Agreement Establishing the World Trade Organization entered
into on April 15, 1994.
(15) WTO member.--The term ``WTO member'' has the meaning
given that term in section 2(10) of the Uruguay Round
Agreements Act (19 U.S.C. 3501(10)).
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
SEC. 3101. SHORT TITLE.
This title may be cited as the ``Andean Trade Promotion and
Drug Eradication Act''.
SEC. 3102. FINDINGS.
Congress makes the following findings:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact on United States trade
with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has
doubled, with the United States serving as the leading source
of imports and leading export market
[[Page H5912]]
for each of the Andean beneficiary countries. This has
resulted in increased jobs and expanded export opportunities
in both the United States and the Andean region.
(2) The Andean Trade Preference Act has been a key element
in the United States counternarcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provides sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable
to the consequences of the drug war and fierce global
competition for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient.
Enhancement of legitimate trade with the United States
provides an alternative means for reviving and stabilizing
the economies in the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of
prosperity, stability, and democracy in the beneficiary
countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private
enterprise and foreign investors in the economic prospects of
the region, ensuring that legitimate private enterprise can
be the engine of economic development and political stability
in the region.
(7) Each of the Andean beneficiary countries is committed
to conclude negotiation of a Free Trade Area of the Americas
by the year 2005, as a means of enhancing the economic
security of the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiary countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the
region, and the world.
SEC. 3103. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.
(a) Eligibility of Certain Articles.--Section 204 of the
Andean Trade Preference Act (19 U.S.C. 3203) is amended--
(1) by striking subsection (c) and redesignating
subsections (d) through (g) as subsections (c) through (f),
respectively; and
(2) by amending subsection (b) to read as follows:
``(b) Exceptions and Special Rules.--
``(1) Certain articles that are not import-sensitive.--The
President may proclaim duty-free treatment under this title
for any article described in subparagraph (A), (B), (C), or
(D) that is the growth, product, or manufacture of an ATPDEA
beneficiary country, that is imported directly into the
customs territory of the United States from an ATPDEA
beneficiary country, and that meets the requirements of this
section, if the President determines that such article is not
import-sensitive in the context of imports from ATPDEA
beneficiary countries:
``(A) Footwear not designated at the time of the effective
date of this title as eligible for purposes of the
generalized system of preferences under title V of the Trade
Act of 1974.
``(B) Petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS.
``(C) Watches and watch parts (including cases, bracelets
and straps), of whatever type including, but not limited to,
mechanical, quartz digital or quartz analog, if such watches
or watch parts contain any material which is the product of
any country with respect to which HTS column 2 rates of duty
apply.
``(D) Handbags, luggage, flat goods, work gloves, and
leather wearing apparel that were not designated on August 5,
1983, as eligible articles for purposes of the generalized
system of preferences under title V of the Trade Act of 1974.
``(2) Exclusions.--Subject to paragraph (3), duty-free
treatment under this title may not be extended to--
``(A) textiles and apparel articles which were not eligible
articles for purposes of this title on January 1, 1994, as
this title was in effect on that date;
``(B) rum and tafia classified in subheading 2208.40 of the
HTS;
``(C) sugars, syrups, and sugar-containing products subject
to over-quota duty rates under applicable tariff-rate quotas;
or
``(D) tuna prepared or preserved in any manner in airtight
containers, except as provided in paragraph (4).
``(3) Apparel articles and certain textile articles.--
``(A) In general.--Apparel articles that are imported
directly into the customs territory of the United States from
an ATPDEA beneficiary country shall enter the United States
free of duty and free of any quantitative restrictions,
limitations, or consultation levels, but only if such
articles are described in subparagraph (B).
``(B) Covered articles.--The apparel articles referred to
in subparagraph (A) are the following:
``(i) Apparel articles assembled from products of the
united states or atpdea beneficiary countries or products not
available in commercial quantities.--Apparel articles sewn or
otherwise assembled in 1 or more ATPDEA beneficiary
countries, or the United States, or both, exclusively from
any one or any combination of the following:
``(I) Fabrics or fabric components wholly formed, or
components knit-to-shape, in the United States, from yarns
wholly formed in the United States or 1 or more ATPDEA
beneficiary countries (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS and are formed in the United States). Apparel
articles shall qualify under this subclause only if all
dyeing, printing, and finishing of the fabrics from which the
articles are assembled, if the fabrics are knit fabrics, is
carried out in the United States. Apparel articles shall
qualify under this subclause only if all dyeing, printing,
and finishing of the fabrics from which the articles are
assembled, if the fabrics are woven fabrics, is carried out
in the United States.
``(II) Fabrics or fabric components formed or components
knit-to-shape, in 1 or more ATPDEA beneficiary countries,
from yarns wholly formed in 1 or more ATPDEA beneficiary
countries, if such fabrics (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS and are formed in 1 or more ATPDEA
beneficiary countries) or components are in chief value of
llama, alpaca, or vicuna.
``(III) Fabrics or yarns, to the extent that apparel
articles of such fabrics or yarns would be eligible for
preferential treatment, without regard to the source of the
fabrics or yarns, under Annex 401 of the NAFTA.
``(ii) Additional fabrics.--At the request of any
interested party, the President is authorized to proclaim
additional fabrics and yarns as eligible for preferential
treatment under clause (i)(III) if--
``(I) the President determines that such fabrics or yarns
cannot be supplied by the domestic industry in commercial
quantities in a timely manner;
``(II) the President has obtained advice regarding the
proposed action from the appropriate advisory committee
established under section 135 of the Trade Act of 1974 (19
U.S.C. 2155) and the United States International Trade
Commission;
``(III) within 60 days after the request, the President has
submitted a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate that sets forth the action proposed to be proclaimed
and the reasons for such action, and the advice obtained
under subclause (II);
``(IV) a period of 60 calendar days, beginning with the
first day on which the President has met the requirements of
subclause (III), has expired; and
``(V) the President has consulted with such committees
regarding the proposed action during the period referred to
in subclause (III).
``(iii) Apparel articles assembled in 1 or more atpdea
beneficiary countries from regional fabrics or regional
components.--(I) Subject to the limitation set forth in
subclause (II), apparel articles sewn or otherwise assembled
in 1 or more ATPDEA beneficiary countries from fabrics or
from fabric components formed or from components knit-to-
shape, in 1 or more ATPDEA beneficiary countries, from yarns
wholly formed in the United States or 1 or more ATPDEA
beneficiary countries (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS and are formed in 1 or more ATPDEA
beneficiary countries), whether or not the apparel articles
are also made from any of the fabrics, fabric components
formed, or components knit-to-shape described in clause (i)
(unless the apparel articles are made exclusively from any of
the fabrics, fabric components formed, or components knit-to-
shape described in clause (i)).
``(II) The preferential treatment referred to in subclause
(I) shall be extended in the 1-year period beginning October
1, 2002, and in each of the 4 succeeding 1-year periods, to
imports of apparel articles in an amount not to exceed the
applicable percentage of the aggregate square meter
equivalents of all apparel articles imported into the United
States in the preceding 12-month period for which data are
available.
``(III) For purposes of subclause (II), the term
`applicable percentage' means 2 percent for the 1-year period
beginning October 1, 2002, increased in each of the 4
succeeding 1-year periods by equal increments, so that for
the period beginning October 1, 2006, the applicable
percentage does not exceed 5 percent.
``(iv) Handloomed, handmade, and folklore articles.--A
handloomed, handmade, or folklore article of an ATPDEA
beneficiary country identified under subparagraph (C) that is
certified as such by the competent authority of such
beneficiary country.
``(v) Certain other apparel articles.--
``(I) General rule.--Any apparel article classifiable under
subheading 6212.10 of the HTS, except for articles entered
under clause (i), (ii), (iii), or (iv), if the article is
both cut and sewn or otherwise assembled in the United
States, or one or more ATPDEA beneficiary countries, or both.
``(II) Limitation.--During the 1-year period beginning on
October 1, 2003, and during each of the 3 succeeding 1-year
periods, apparel articles described in subclause (I) of a
producer or an entity controlling production shall be
eligible for preferential treatment under this paragraph only
if the aggregate cost of fabrics (exclusive of all findings
and trimmings) formed in the United States that are used in
the production of all such articles of that producer or
entity that are entered and eligible under this clause during
the preceding 1-year period is at least 75 percent of the
aggregate declared customs value of the fabric (exclusive of
all findings and trimmings) contained in all such articles of
that producer or entity that are entered and eligible under
this clause during the preceding 1-year period.
``(III) Development of procedure to ensure compliance.--The
United States Customs Service shall develop and implement
methods and procedures to ensure ongoing compliance with the
requirement set forth in subclause (II). If the Customs
Service finds that a producer or
[[Page H5913]]
an entity controlling production has not satisfied such
requirement in a 1-year period, then apparel articles
described in subclause (I) of that producer or entity shall
be ineligible for preferential treatment under this paragraph
during any succeeding 1-year period until the aggregate cost
of fabrics (exclusive of all findings and trimmings) formed
in the United States that are used in the production of such
articles of that producer or entity entered during the
preceding 1-year period is at least 85 percent of the
aggregate declared customs value of the fabric (exclusive of
all findings and trimmings) contained in all such articles
of that producer or entity that are entered and eligible
under this clause during the preceding 1-year period.
``(vi) Special rules.--
``(I) Exception for findings and trimmings.--An article
otherwise eligible for preferential treatment under this
paragraph shall not be ineligible for such treatment because
the article contains findings or trimmings of foreign origin,
if such findings and trimmings do not exceed 25 percent of
the cost of the components of the assembled product. Examples
of findings and trimmings are sewing thread, hooks and eyes,
snaps, buttons, `bow buds', decorative lace, trim, elastic
strips, zippers, including zipper tapes and labels, and other
similar products.
``(II) Certain interlining.--(aa) An article otherwise
eligible for preferential treatment under this paragraph
shall not be ineligible for such treatment because the
article contains certain interlinings of foreign origin, if
the value of such interlinings (and any findings and
trimmings) does not exceed 25 percent of the cost of the
components of the assembled article.
``(bb) Interlinings eligible for the treatment described in
division (aa) include only a chest type plate, `hymo' piece,
or `sleeve header', of woven or weft-inserted warp knit
construction and of coarse animal hair or man-made filaments.
``(cc) The treatment described in this subclause shall
terminate if the President makes a determination that United
States manufacturers are producing such interlinings in the
United States in commercial quantities.
``(III) De minimis rule.--An article that would otherwise
be ineligible for preferential treatment under this
subparagraph because the article contains yarns not wholly
formed in the United States or in one or more ATPDEA
beneficiary countries shall not be ineligible for such
treatment if the total weight of all such yarns is not more
than 7 percent of the total weight of the good.
``(IV) Special origin rule.--An article otherwise eligible
for preferential treatment under clause (i) or (iii) shall
not be ineligible for such treatment because the article
contains nylon filament yarn (other than elastomeric yarn)
that is classifiable under subheading 5402.10.30, 5402.10.60,
5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10,
5402.41.90, 5402.51.00, or 5402.61.00 of the HTS from a
country that is a party to an agreement with the United
States establishing a free trade area, which entered into
force before January 1, 1995.
``(vii) Textile luggage.--Textile luggage--
``(I) assembled in an ATPDEA beneficiary country from
fabric wholly formed and cut in the United States, from yarns
wholly formed in the United States, that is entered under
subheading 9802.00.80 of the HTS; or
``(II) assembled from fabric cut in an ATPDEA beneficiary
country from fabric wholly formed in the United States from
yarns wholly formed in the United States.
``(C) Handloomed, handmade, and folklore articles.--For
purposes of subparagraph (B)(iv), the President shall consult
with representatives of the ATPDEA beneficiary countries
concerned for the purpose of identifying particular textile
and apparel goods that are mutually agreed upon as being
handloomed, handmade, or folklore goods of a kind described
in section 2.3(a), (b), or (c) of the Annex or Appendix
3.1.B.11 of the Annex.
``(D) Penalties for transshipment.--
``(i) Penalties for exporters.--If the President
determines, based on sufficient evidence, that an exporter
has engaged in transshipment with respect to apparel articles
from an ATPDEA beneficiary country, then the President shall
deny all benefits under this title to such exporter, and any
successor of such exporter, for a period of 2 years.
``(ii) Penalties for countries.--Whenever the President
finds, based on sufficient evidence, that transshipment has
occurred, the President shall request that the ATPDEA
beneficiary country or countries through whose territory the
transshipment has occurred take all necessary and appropriate
actions to prevent such transshipment. If the President
determines that a country is not taking such actions, the
President shall reduce the quantities of apparel articles
that may be imported into the United States from such country
by the quantity of the transshipped articles multiplied by 3,
to the extent consistent with the obligations of the United
States under the WTO.
``(iii) Transshipment described.--Transshipment within the
meaning of this subparagraph has occurred when preferential
treatment under subparagraph (A) has been claimed for an
apparel article on the basis of material false information
concerning the country of origin, manufacture, processing,
or assembly of the article or any of its components. For
purposes of this clause, false information is material if
disclosure of the true information would mean or would
have meant that the article is or was ineligible for
preferential treatment under subparagraph (A).
``(E) Bilateral emergency actions.--
``(i) In general.--The President may take bilateral
emergency tariff actions of a kind described in section 4 of
the Annex with respect to any apparel article imported from
an ATPDEA beneficiary country if the application of tariff
treatment under subparagraph (A) to such article results in
conditions that would be cause for the taking of such actions
under such section 4 with respect to a like article described
in the same 8-digit subheading of the HTS that is imported
from Mexico.
``(ii) Rules relating to bilateral emergency action.--For
purposes of applying bilateral emergency action under this
subparagraph--
``(I) the requirements of paragraph (5) of section 4 of the
Annex (relating to providing compensation) shall not apply;
``(II) the term `transition period' in section 4 of the
Annex shall mean the period ending December 31, 2006; and
``(III) the requirements to consult specified in section 4
of the Annex shall be treated as satisfied if the President
requests consultations with the ATPDEA beneficiary country in
question and the country does not agree to consult within the
time period specified under section 4 of the Annex.
``(4) Tuna.--
``(A) General rule.--Tuna that is harvested by United
States vessels or ATPDEA beneficiary country vessels, that is
prepared or preserved in any manner, in an ATPDEA beneficiary
country, in foil or other flexible airtight containers
weighing with their contents not more than 6.8 kilograms
each, and that is imported directly into the customs
territory of the United States from an ATPDEA beneficiary
country, shall enter the United States free of duty and free
of any quantitative restrictions.
``(B) Definitions.--In this paragraph--
``(i) United states vessel.--A `United States vessel' is a
vessel having a certificate of documentation with a fishery
endorsement under chapter 121 of title 46, United States
Code.
``(ii) ATPDEA vessel.--An `ATPDEA vessel' is a vessel--
``(I) which is registered or recorded in an ATPDEA
beneficiary country;
``(II) which sails under the flag of an ATPDEA beneficiary
country;
``(III) which is at least 75 percent owned by nationals of
an ATPDEA beneficiary country or by a company having its
principal place of business in an ATPDEA beneficiary country,
of which the manager or managers, chairman of the board of
directors or of the supervisory board, and the majority of
the members of such boards are nationals of an ATPDEA
beneficiary country and of which, in the case of a company,
at least 50 percent of the capital is owned by an ATPDEA
beneficiary country or by public bodies or nationals of an
ATPDEA beneficiary country;
``(IV) of which the master and officers are nationals of an
ATPDEA beneficiary country; and
``(V) of which at least 75 percent of the crew are
nationals of an ATPDEA beneficiary country.
``(5) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer that claims preferential
treatment under paragraph (1), (3), or (4) shall comply with
customs procedures similar in all material respects to the
requirements of Article 502(1) of the NAFTA as implemented
pursuant to United States law, in accordance with regulations
promulgated by the Secretary of the Treasury.
``(ii) Determination.--
``(I) In general.--In order to qualify for the preferential
treatment under paragraph (1), (3), or (4) and for a
Certificate of Origin to be valid with respect to any article
for which such treatment is claimed, there shall be in effect
a determination by the President that each country described
in subclause (II)--
``(aa) has implemented and follows, or
``(bb) is making substantial progress toward implementing
and following,
procedures and requirements similar in all material respects
to the relevant procedures and requirements under chapter 5
of the NAFTA.
``(II) Country described.--A country is described in this
subclause if it is an ATPDEA beneficiary country--
``(aa) from which the article is exported; or
``(bb) in which materials used in the production of the
article originate or in which the article or such materials
undergo production that contributes to a claim that the
article is eligible for preferential treatment under
paragraph (1), (3), or (4).
``(B) Certificate of origin.--The Certificate of Origin
that otherwise would be required pursuant to the provisions
of subparagraph (A) shall not be required in the case of an
article imported under paragraph (1), (3), or (4) if such
Certificate of Origin would not be required under Article 503
of the NAFTA (as implemented pursuant to United States law),
if the article were imported from Mexico.
``(C) Report on cooperation of atpdea countries concerning
circumvention.--The United States Commissioner of Customs
shall conduct a study analyzing the extent to which each
ATPDEA beneficiary country--
``(i) has cooperated fully with the United States,
consistent with its domestic laws and procedures, in
instances of circumvention or alleged circumvention of
existing quotas on imports of textile and apparel goods, to
establish necessary relevant facts in the places of import,
export, and, where applicable, transshipment, including
investigation of circumvention practices, exchanges of
documents, correspondence, reports, and other relevant
information, to the extent such information is available;
``(ii) has taken appropriate measures, consistent with its
domestic laws and procedures, against exporters and importers
involved in instances of false declaration concerning
quantities, description, classification, or origin of textile
and apparel goods; and
``(iii) has penalized the individuals and entities involved
in any such circumvention, consistent with its domestic laws
and procedures, and has worked closely to seek the
cooperation of any third country to prevent such
circumvention from taking place in that third country.
[[Page H5914]]
The Commissioner of Customs shall submit to the Congress, not
later than October 1, 2003, a report on the study conducted
under this subparagraph.
``(6) Definitions.--In this subsection--
``(A) Annex.--The term `the Annex' means Annex 300-B of the
NAFTA.
``(B) ATPDEA beneficiary country.--The term `ATPDEA
beneficiary country' means any `beneficiary country', as
defined in section 203(a)(1) of this title, which the
President designates as an ATPDEA beneficiary country, taking
into account the criteria contained in subsections (c) and
(d) of section 203 and other appropriate criteria, including
the following:
``(i) Whether the beneficiary country has demonstrated a
commitment to--
``(I) undertake its obligations under the WTO, including
those agreements listed in section 101(d) of the Uruguay
Round Agreements Act, on or ahead of schedule; and
``(II) participate in negotiations toward the completion of
the FTAA or another free trade agreement.
``(ii) The extent to which the country provides protection
of intellectual property rights consistent with or greater
than the protection afforded under the Agreement on Trade-
Related Aspects of Intellectual Property Rights described in
section 101(d)(15) of the Uruguay Round Agreements Act.
``(iii) The extent to which the country provides
internationally recognized worker rights, including--
``(I) the right of association;
``(II) the right to organize and bargain collectively;
``(III) a prohibition on the use of any form of forced or
compulsory labor;
``(IV) a minimum age for the employment of children; and
``(V) acceptable conditions of work with respect to minimum
wages, hours of work, and occupational safety and health.
``(iv) Whether the country has implemented its commitments
to eliminate the worst forms of child labor, as defined in
section 507(6) of the Trade Act of 1974.
``(v) The extent to which the country has met the
counternarcotics certification criteria set forth in section
490 of the Foreign Assistance Act of 1961 (22 U.S.C. 2291j)
for eligibility for United States assistance.
``(vi) The extent to which the country has taken steps to
become a party to and implements the Inter-American
Convention Against Corruption.
``(vii) The extent to which the country--
``(I) applies transparent, nondiscriminatory, and
competitive procedures in government procurement equivalent
to those contained in the Agreement on Government Procurement
described in section 101(d)(17) of the Uruguay Round
Agreements Act; and
``(II) contributes to efforts in international fora to
develop and implement international rules in transparency in
government procurement.
``(viii) The extent to which the country has taken steps to
support the efforts of the United States to combat terrorism.
``(C) NAFTA.--The term `NAFTA' means the North American
Free Trade Agreement entered into between the United States,
Mexico, and Canada on December 17, 1992.
``(D) WTO.--The term `WTO' has the meaning given that term
in section 2 of the Uruguay Round Agreements Act (19 U.S.C.
3501).
``(E) ATPDEA.--The term `ATPDEA' means the Andean Trade
Promotion and Drug Eradication Act.
``(F) FTAA.--The term `FTAA' means the Free Trade Area for
the Americas.''.
(b) Determination Regarding Retention of Designation.--
Section 203(e)(1) of the Andean Trade Preference Act (19
U.S.C. 3202(e)(1)) is amended--
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(2) by inserting ``(A)'' after ``(1)''; and
(3) by adding at the end the following:
``(B) The President may, after the requirements of
paragraph (2) have been met--
``(i) withdraw or suspend the designation of any country as
an ATPDEA beneficiary country, or
``(ii) withdraw, suspend, or limit the application of
preferential treatment under section 204(b)(1), (3), or (4)
to any article of any country,
if, after such designation, the President determines that, as
a result of changed circumstances, the performance of such
country is not satisfactory under the criteria set forth in
section 204(b)(6)(B).''.
(c) Conforming Amendments.--(1) Section 202 of the Andean
Trade Preference Act (19 U.S.C. 3201) is amended by inserting
``(or other preferential treatment)'' after ``treatment''.
(2) Section 204(a) of the Andean Trade Preference Act (19
U.S.C. 3203(a)) is amended--
(A) in paragraph (1)--
(i) by inserting ``(or otherwise provided for)'' after
``eligibility''; and
(ii) by inserting ``(or preferential treatment)'' after
``duty-free treatment''; and
(B) in paragraph (2), by striking ``subsection (a)'' and
inserting ``paragraph (1)''.
(d) Petitions for Review.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the President shall promulgate
regulations regarding the review of eligibility of articles
and countries under the Andean Trade Preference Act,
consistent with section 203(e) of such Act, as amended by
this title.
(2) Content of regulations.--The regulations shall be
similar to the regulations regarding eligibility under the
generalized system of preferences under title V of the Trade
Act of 1974 with respect to the timetable for reviews and
content, and shall include procedures for requesting
withdrawal, suspension, or limitations of preferential duty
treatment under the Andean Trade Preference Act, conducting
reviews of such requests, and implementing the results of the
reviews.
(e) Reporting Requirements.--Section 203(f) of the Andean
Trade Preference Act (19 U.S.C. 3202(f)) is amended to read
as follows:
``(f) Reporting Requirements.--
``(1) In general.--Not later than April 30, 2003, and every
2 years thereafter during the period this title is in effect,
the United States Trade Representative shall submit to the
Congress a report regarding the operation of this title,
including--
``(A) with respect to subsections (c) and (d), the results
of a general review of beneficiary countries based on the
considerations described in such subsections; and
``(B) the performance of each beneficiary country or ATPEA
beneficiary country, as the case may be, under the criteria
set forth in section 204(b)(6)(B).
``(2) Public comment.--Before submitting the report
described in paragraph (1), the United States Trade
Representative shall publish a notice in the Federal Register
requesting public comments on whether beneficiary countries
are meeting the criteria listed in section 204(b)(6)(B).''.
SEC. 3104. TERMINATION.
(a) In General.--Section 208 of the Andean Trade Preference
Act (19 U.S.C. 3206) is amended to read as follows:
``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.
``No duty-free treatment or other preferential treatment
extended to beneficiary countries under this title shall
remain in effect after December 31, 2006.''.
(b) Retroactive Application for Certain Liquidations and
Reliquidations.--
(1) In general.--Notwithstanding section 514 of the Tariff
Act of 1930 or any other provision of law, and subject to
paragraph (3), the entry--
(A) of any article to which duty-free treatment (or
preferential treatment) under the Andean Trade Preference Act
(19 U.S.C. 3201 et seq.) would have applied if the entry had
been made on December 4, 2001, and
(B) that was made after December 4, 2001, and before the
date of the enactment of this Act,
shall be liquidated or reliquidated as if such duty-free
treatment (or preferential treatment) applied, and the
Secretary of the Treasury shall refund any duty paid with
respect to such entry.
(2) Entry.--As used in this subsection, the term ``entry''
includes a withdrawal from warehouse for consumption.
(3) Requests.--Liquidation or reliquidation may be made
under paragraph (1) with respect to an entry only if a
request therefor is filed with the Customs Service, within
180 days after the date of the enactment of this Act, that
contains sufficient information to enable the Customs
Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot be located.
SEC. 3105. REPORT ON FREE TRADE AGREEMENT WITH ISRAEL.
(a) Report to Congress.--The United States Trade
Representative shall review the implementation of the United
States-Israel Free Trade Agreement and shall submit to the
Speaker of the House of Representatives, the President of the
Senate, the Committee on Ways and Means of the House of
Representatives, and the Committee on Finance of the Senate a
report on the results of such review.
(b) Contents of Report.--The report under subsection (a)
shall include the following:
(1) A review of the terms of the United States-Israel Free
Trade Agreement, particularly the terms with respect to
market access commitments.
(2) A review of subsequent agreements which may have been
reached between the parties to the Agreement and of
unilateral concessions of additional benefits received by
each party from the other.
(3) A review of any current negotiations between the
parties to the Agreement with respect to implementation of
the Agreement and other pertinent matters.
(4) An assessment of the degree of fulfillment of
obligations under the Agreement by the United States and
Israel.
(5) An assessment of improvements in structuring future
trade agreements that should be considered based on the
experience of the United States under the Agreement.
(c) Timing of Report.--The United States Trade
Representative shall submit the report under subsection (a)
not later than 6 months after the date of the enactment of
this Act.
(d) Definition.--In this section, the terms ``United
States-Israel Free Trade Agreement'' and ``Agreement'' means
the Agreement on the Establishment of a Free Trade Area
between the Government of the United States of America and
the Government of Israel entered into on April 22, 1985.
SEC. 3106. MODIFICATION OF DUTY TREATMENT FOR TUNA.
Subheading 1604.14.20 of the Harmonized Tariff Schedule of
the United States is amended--
(1) in the article description, by striking ``20 percent of
the United States pack of canned tuna'' and inserting ``4.8
percent of apparent United States consumption of tuna in
airtight containers''; and
(2) by redesignating such subheading as subheading
1604.14.22.
SEC. 3107. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC
RECOVERY ACT.
(a) In General.--Section 213(b)(2)(A) of the Carribean
Basin Economic Recovery Act (19 U.S.C. 2703(b)(2)(A)) is
amended as follows:
(1) Clause (i) is amended--
[[Page H5915]]
(A) by striking the matter preceding subclause (I) and
inserting the following:
``(i) Apparel articles assembled in one or more cbtpa
beneficiary countries.--Apparel articles sewn or otherwise
assembled in one or more CBTPA beneficiary countries from
fabrics wholly formed and cut, or from components knit-to-
shape, in the United States from yarns wholly formed in the
United States, (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or 5603 of
the HTS and are wholly formed and cut in the United States)
that are--''; and
(B) by adding at the end the following:
``Apparel articles entered on or after September 1, 2002,
shall qualify under the preceding sentence only if all
dyeing, printing, and finishing of the fabrics from which the
articles are assembled, if the fabrics are knit fabrics, is
carried out in the United States. Apparel articles entered on
or after September 1, 2002, shall qualify under the first
sentence of this clause only if all dyeing, printing, and
finishing of the fabrics from which the articles are
assembled, if the fabrics are woven fabrics, is carried out
in the United States.''.
(2) Clause (ii) is amended to read as follows:
``(ii) Other apparel articles assembled in one or more
cbtpa beneficiary countries.--Apparel articles sewn or
otherwise assembled in one or more CBTPA beneficiary
countries with thread formed in the United States from
fabrics wholly formed in the United States and cut in one or
more CBTPA beneficiary countries from yarns wholly formed in
the United States, or from components knit-to-shape in the
United States from yarns wholly formed in the United States,
or both (including fabrics not formed from yarns, if such
fabrics are classifiable under heading 5602 or 5603 of the
HTS and are wholly formed in the United States). Apparel
articles entered on or after September 1, 2002, shall qualify
under the preceding sentence only if all dyeing, printing,
and finishing of the fabrics from which the articles are
assembled, if the fabrics are knit fabrics, is carried out in
the United States. Apparel articles entered on or after
September 1, 2002, shall qualify under the first sentence of
this clause only if all dyeing, printing, and finishing of
the fabrics from which the articles are assembled, if the
fabrics are woven fabrics, is carried out in the United
States.''.
(3) Clause (iii)(II) is amended to read as follows:
``(II) The amount referred to in subclause (I) is as
follows:
``(aa) 500,000,000 square meter equivalents during the 1-
year period beginning on October 1, 2002.
``(bb) 850,000,000 square meter equivalents during the 1-
year period beginning on October 1, 2003.
``(cc) 970,000,000 square meter equivalents in each
succeeding 1-year period through September 30, 2008.''.
(4) Clause (iii)(IV) is amended to read as follows:
``(IV) The amount referred to in subclause (III) is as
follows:
``(aa) 4,872,000 dozen during the 1-year period beginning
on October 1, 2001.
``(bb) 9,000,000 dozen during the 1-year period beginning
on October 1, 2002.
``(cc) 10,000,000 dozen during the 1-year period beginning
on October 1, 2003.
``(dd) 12,000,000 dozen in each succeeding 1-year period
through September 30, 2008.''.
(5) Clause (iv) is amended to read as follows:
``(iv) Certain other apparel articles.--
``(I) General rule.--Subject to subclause (II), any apparel
article classifiable under subheading 6212.10 of the HTS,
except for articles entered under clause (i), (ii), (iii),
(v), or (vi), if the article is both cut and sewn or
otherwise assembled in the United States, or one or more
CBTPA beneficiary countries, or both.
``(II) Limitation.--During the 1-year period beginning on
October 1, 2001, and during each of the 6 succeeding 1-year
periods, apparel articles described in subclause (I) of a
producer or an entity controlling production shall be
eligible for preferential treatment under subparagraph (B)
only if the aggregate cost of fabrics (exclusive of all
findings and trimmings) formed in the United States that are
used in the production of all such articles of that producer
or entity that are entered and eligible under this clause
during the preceding 1-year period is at least 75 percent of
the aggregate declared customs value of the fabric (exclusive
of all findings and trimmings) contained in all such articles
of that producer or entity that are entered and eligible
under this clause during the preceding 1-year period.
``(III) Development of procedure to ensure compliance.--The
United States Customs Service shall develop and implement
methods and procedures to ensure ongoing compliance with the
requirement set forth in subclause (II). If the Customs
Service finds that a producer or an entity controlling
production has not satisfied such requirement in a 1-year
period, then apparel articles described in subclause (I) of
that producer or entity shall be ineligible for preferential
treatment under subparagraph (B) during any succeeding 1-year
period until the aggregate cost of fabrics (exclusive of all
findings and trimmings) formed in the United States that are
used in the production of such articles of that producer or
entity entered during the preceding 1-year period is at least
85 percent of the aggregate declared customs value of the
fabric (exclusive of all findings and trimmings) contained in
all such articles of that producer or entity that are entered
and eligible under this clause during the preceding 1-year
period.''.
(6) Clause (vii) is amended by adding at the end the
following new subclause:
``(V) Thread.--An article otherwise eligible for
preferential treatment under this paragraph shall not be
ineligible for such treatment because the thread used to
assemble the article is dyed, printed, or finished in one or
more CBTPA beneficiary countries.''.
(7) Section 213(b)(2)(A) of such Act is further amended by
adding at the end the following new clause:
``(ix) Apparel articles assembled in one or more cbtpa
beneficiary countries from united states and cbtpa
beneficiary country components.--Apparel articles sewn or
otherwise assembled in one or more CBTPA beneficiary
countries with thread formed in the United States from
components cut in the United States and in one or more CBTPA
beneficiary countries from fabric wholly formed in the United
States from yarns wholly formed in the United States, or from
components knit-to-shape in the United States and one or more
CBTPA beneficiary countries from yarns wholly formed in the
United States, or both (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS). Apparel articles shall qualify under this
clause only if they meet the requirements of clause (i) or
(ii) (as the case may be) with respect to dyeing, printing,
and finishing of knit and woven fabrics from which the
articles are assembled.''.
(b) Effective Date of Certain Provisions.--The amendment
made by subsection (a)(3) shall take effect on October 1,
2002.
SEC. 3108. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND
OPPORTUNITY ACT.
(a) In General.--Section 112(b) of the African Growth and
Opportunity Act (19 U.S.C. 3721(b)) is amended as follows:
(1) Paragraph (1) is amended by amending the matter
preceding subparagraph (A) to read as follows:
``(1) Apparel articles assembled in one or more beneficiary
sub-saharan african countries.--Apparel articles sewn or
otherwise assembled in one or more beneficiary sub-Saharan
African countries from fabrics wholly formed and cut, or from
components knit-to-shape, in the United States from yarns
wholly formed in the United States, (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the Harmonized Tariff Schedule of the
United States and are wholly formed and cut in the United
States) that
are--''.
(2) Paragraph (2) is amended to read as follows:
``(2) Other apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel articles
sewn or otherwise assembled in one or more beneficiary sub-
Saharan African countries with thread formed in the United
States from fabrics wholly formed in the United States and
cut in one or more beneficiary sub-Saharan African countries
from yarns wholly formed in the United States, or from
components knit-to-shape in the United States from yarns
wholly formed in the United States, or both (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the Harmonized
Tariff Schedule of the United States and are wholly formed in
the United States).''.
(3) Paragraph (3) is amended--
(A) by amending the matter preceding subparagraph (A) to
read as follows:
``(3) Apparel articles from regional fabric or yarns.--
Apparel articles wholly assembled in one or more beneficiary
sub-Saharan African countries from fabric wholly formed in
one or more beneficiary sub-Saharan African countries from
yarns originating either in the United States or one or more
beneficiary sub-Saharan African countries (including fabrics
not formed from yarns, if such fabrics are classified under
heading 5602 or 5603 of the Harmonized Tariff Schedule of the
United States and are wholly formed in one or more
beneficiary sub-Saharan African countries), or from
components knit-to-shape in one or more beneficiary sub-
Saharan African countries from yarns originating either in
the United States or one or more beneficiary sub-Saharan
African countries, or apparel articles wholly formed on
seamless knitting machines in a beneficiary sub-Saharan
African country from yarns originating either in the United
States or one or more beneficiary sub-Saharan African
countries, subject to the following:''; and
(B) by amending subparagraph (B) to read as follows:
``(B) Special rule for lesser developed countries.--
``(i) In general.--Subject to subparagraph (A),
preferential treatment under this paragraph shall be extended
through September 30, 2004, for apparel articles wholly
assembled, or knit-to-shape and wholly assembled, or both, in
one or more lesser developed beneficiary sub-Saharan African
countries regardless of the country of origin of the fabric
or the yarn used to make such articles.
``(ii) Lesser developed beneficiary sub-saharan african
country.--For purposes of clause (i), the term `lesser
developed beneficiary sub-Saharan African country' means--
``(I) a beneficiary sub-Saharan African country that had a
per capita gross national product of less than $1,500 in
1998, as measured by the International Bank for
Reconstruction and Development;
``(II) Botswana; and
``(III) Namibia.''.
(4) Paragraph (4)(B) is amended by striking ``18.5'' and
inserting ``21.5''.
(5) Section 112(b) of such Act is further amended by adding
at the end the following new paragraph:
``(7) Apparel articles assembled in one or more beneficiary
sub-saharan african countries from united states and
beneficiary sub-saharan african country components.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries with thread formed
in the United States from components cut in the United States
and one or more beneficiary sub-Saharan African countries
from fabric wholly formed in the
[[Page H5916]]
United States from yarns wholly formed in the United States,
or from components knit-to-shape in the United States and one
or more beneficiary sub-Saharan African countries from yarns
wholly formed in the United States, or both (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the Harmonized
Tariff Schedule of the United States).''.
(b) Increase in Limitation on Certain Benefits.--The
applicable percentage under clause (ii) of section
112(b)(3)(A) of the African Growth and Opportunity Act (19
U.S.C. 3721(b)(3)(A)) shall be increased--
(1) by 2.17 percent for the 1-year period beginning on
October 1, 2002, and
(2) by equal increments in each succeeding 1-year period
provided for in such clause, so that for the 1-year period
beginning October 1, 2007, the applicable percentage is
increased by 3.5 percent,
except that such increase shall not apply with respect to
articles eligible under subparagraph (B) of section 112(b)(3)
of that Act.
DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
SEC. 4101. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.
(a) Extension of Duty-Free Treatment Under System.--Section
505 of the Trade Act of 1974 (19 U.S.C. 2465(a)) is amended
by striking ``September 30, 2001'' and inserting ``December
31, 2006''.
(b) Retroactive Application for Certain Liquidations and
Reliquidations.--
(1) In general.--Notwithstanding section 514 of the Tariff
Act of 1930 or any other provision of law, and subject to
paragraph (2), the entry--
(A) of any article to which duty-free treatment under title
V of the Trade Act of 1974 would have applied if the entry
had been made on September 30, 2001,
(B) that was made after September 30, 2001, and before the
date of the enactment of this Act, and
(C) to which duty-free treatment under title V of that Act
did not apply,
shall be liquidated or reliquidated as free of duty, and the
Secretary of the Treasury shall refund any duty paid with
respect to such entry.
(2) Requests.--Liquidation or reliquidation may be made
under paragraph (1) with respect to an entry only if a
request therefor is filed with the Customs Service, within
180 days after the date of the enactment of this Act, that
contains sufficient information to enable the Customs
Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot be located.
(3) Definition.--As used in this subsection, the term
``entry'' includes a withdrawal from warehouse for
consumption.
SEC. 4102. AMENDMENTS TO GENERALIZED SYSTEM OF PREFERENCES.
(a) Eligibility for Generalized System of Preferences.--
Section 502(b)(2)(F) of the Trade Act of 1974 (19 U.S.C.
2462(b)(2)(F)) is amended by striking the period at the end
and inserting ``or such country has not taken steps to
support the efforts of the United States to combat
terrorism.''.
(b) Definition of Internationally Recognized Worker
Rights.--Section 507(4) of the Trade Act of 1974 (19 U.S.C.
2467(4)) is amended by amending subparagraph (D) to read as
follows:
``(D) a minimum age for the employment of children, and a
prohibition on the worst forms of child labor, as defined in
paragraph (6); and''.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
SEC. 5101. WOOL PROVISIONS.
(a) Short Title.--This section may be cited as the ``Wool
Manufacturer Payment Clarification and Technical Corrections
Act''.
(b) Clarification of Temporary Duty Suspension.--Heading
9902.51.13 of the Harmonized Tariff Schedule of the United
States is amended by inserting ``average'' before
``diameters''.
(c) Payments to Manufacturers of Certain Wool Products.--
(1) Payments.--Section 505 of the Trade and Development Act
of 2000 (Public Law 106-200; 114 Stat. 303) is amended as
follows:
(A) Subsection (a) is amended--
(i) by striking ``In each of the calendar years'' and
inserting ``For each of the calendar years''; and
(ii) by striking ``for a refund of duties'' and all that
follows through the end of the subsection and inserting ``for
a payment equal to an amount determined pursuant to
subsection (d)(1).''.
(B) Subsection (b) is amended to read as follows:
``(b) Wool Yarn.--
``(1) Importing manufacturers.--For each of the calendar
years 2000, 2001, and 2002, a manufacturer of worsted wool
fabrics who imports wool yarn of the kind described in
heading 5107.10 or 9902.51.13 of the Harmonized Tariff
Schedule of the United States shall be eligible for a payment
equal to an amount determined pursuant to subsection (d)(2).
``(2) Nonimporting manufacturers.--For each of the calendar
years 2001 and 2002, any other manufacturer of worsted wool
fabrics of imported wool yarn of the kind described in
heading 5107.10 or 9902.51.13 of the Harmonized Tariff
Schedule of the United States shall be eligible for a payment
equal to an amount determined pursuant to subsection
(d)(2).''.
(C) Subsection (c) is amended to read as follows:
``(c) Wool Fiber and Wool Top.--
``(1) Importing manufacturers.--For each of the calendar
years 2000, 2001, and 2002, a manufacturer of wool yarn or
wool fabric who imports wool fiber or wool top of the kind
described in heading 5101.11, 5101.19, 5101.21, 5101.29,
5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or
9902.51.14 of the Harmonized Tariff Schedule of the United
States shall be eligible for a payment equal to an amount
determined pursuant to subsection (d)(3).
``(2) Nonimporting manufacturers.--For each of the calendar
years 2001 and 2002, any other manufacturer of wool yarn or
wool fabric of imported wool fiber or wool top of the kind
described in heading 5101.11, 5101.19, 5101.21, 5101.29,
5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or
9902.51.14 of the Harmonized Tariff Schedule of the United
States shall be eligible for a payment equal to an amount
determined pursuant to subsection (d)(3).''.
(D) Section 505 is further amended by striking subsection
(d) and inserting the following new subsections:
``(d) Amount of Annual Payments to Manufacturers.--
``(1) Manufacturers of men's suits, etc. of imported
worsted wool fabrics.--
``(A) Eligible to receive more than $5,000.--Each annual
payment to manufacturers described in subsection (a) who,
according to the records of the Customs Service as of
September 11, 2001, are eligible to receive more than $5,000
for each of the calendar years 2000, 2001, and 2002, shall be
in an amount equal to one-third of the amount determined by
multiplying $30,124,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the duties paid on eligible wool products imported in
calendar year 1999 by the manufacturer making the claim, and
``(ii) the denominator of which is the total amount
attributable to the duties paid on eligible wool products
imported in calendar year 1999 by all the manufacturers
described in subsection (a) who, according to the records of
the Customs Service as of September 11, 2001, are eligible to
receive more than $5,000 for each such calendar year under
this section as it was in effect on that date.
``(B) Eligible wool products.--For purposes of subparagraph
(A), the term `eligible wool products' refers to imported
worsted wool fabrics described in subsection (a).
``(C) Others.--All manufacturers described in subsection
(a), other than the manufacturers to which subparagraph (A)
applies, shall each receive an annual payment in an amount
equal to one-third of the amount determined by dividing
$1,665,000 by the number of all such other manufacturers.
``(2) Manufacturers of worsted wool fabrics of imported
wool yarn.--
``(A) Importing manufacturers.--Each annual payment to an
importing manufacturer described in subsection (b)(1) shall
be in an amount equal to one-third of the amount determined
by multiplying $2,202,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the duties paid on eligible wool products imported in
calendar year 1999 by the importing manufacturer making the
claim, and
``(ii) the denominator of which is the total amount
attributable to the duties paid on eligible wool products
imported in calendar year 1999 by all the importing
manufacturers described in subsection (b)(1).
``(B) Eligible wool products.--For purposes of subparagraph
(A), the term `eligible wool products' refers to imported
wool yarn described in subsection (b)(1).
``(C) Nonimporting manufacturers.--Each annual payment to a
nonimporting manufacturer described in subsection (b)(2)
shall be in an amount equal to one-half of the amount
determined by multiplying $141,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the purchases of imported eligible wool products in calendar
year 1999 by the nonimporting manufacturer making the claim,
and
``(ii) the denominator of which is the total amount
attributable to the purchases of imported eligible wool
products in calendar year 1999 by all the nonimporting
manufacturers described in subsection (b)(2).
``(3) Manufacturers of wool yarn or wool fabric of imported
wool fiber or wool top.--
``(A) Importing manufacturers.--Each annual payment to an
importing manufacturer described in subsection (c)(1) shall
be in an amount equal to one-third of the amount determined
by multiplying $1,522,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the duties paid on eligible wool products imported in
calendar year 1999 by the importing manufacturer making the
claim, and
``(ii) the denominator of which is the total amount
attributable to the duties paid on eligible wool products
imported in calendar year 1999 by all the importing
manufacturers described in subsection (c)(1).
``(B) Eligible wool products.--For purposes of subparagraph
(A), the term `eligible wool products' refers to imported
wool fiber or wool top described in subsection (c)(1).
``(C) Nonimporting manufacturers.--Each annual payment to a
nonimporting manufacturer described in subsection (c)(2)
shall be in an amount equal to one-half of the amount
determined by multiplying $597,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the purchases of imported eligible wool products in calendar
year 1999 by the nonimporting manufacturer making the claim,
and
``(ii) the denominator of which is the amount attributable
to the purchases of imported eligible
[[Page H5917]]
wool products in calendar year 1999 by all the nonimporting
manufacturers described in subsection (c)(2).
``(4) Letters of intent.--Except for the nonimporting
manufacturers described in subsections (b)(2) and (c)(2) who
may make claims under this section by virtue of the enactment
of the Wool Manufacturer Payment Clarification and Technical
Corrections Act, only manufacturers who, according to
the records of the Customs Service, filed with the Customs
Service before September 11, 2001, letters of intent to
establish eligibility to be claimants are eligible to make
a claim for a payment under this section.
``(5) Amount attributable to purchases by nonimporting
manufacturers.--
``(A) Amount attributable.--For purposes of paragraphs
(2)(C) and (3)(C), the amount attributable to the purchases
of imported eligible wool products in calendar year 1999 by a
nonimporting manufacturer shall be the amount the
nonimporting manufacturer paid for eligible wool products in
calendar year 1999, as evidenced by invoices. The
nonimporting manufacturer shall make such calculation and
submit the resulting amount to the Customs Service, within 45
days after the date of enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act, in a
signed affidavit that attests that the information contained
therein is true and accurate to the best of the affiant's
belief and knowledge. The nonimporting manufacturer shall
retain the records upon which the calculation is based for a
period of five years beginning on the date the affidavit is
submitted to the Customs Service.
``(B) Eligible wool product.--For purposes of subparagraph
(A)--
``(i) the eligible wool product for nonimporting
manufacturers of worsted wool fabrics is wool yarn of the
kind described in heading 5107.10 or 9902.51.13 of the
Harmonized Tariff Schedule of the United States purchased in
calendar year 1999; and
``(ii) the eligible wool products for nonimporting
manufacturers of wool yarn or wool fabric are wool fiber or
wool top of the kind described in heading 5101.11, 5101.19,
5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00,
5105.21, 5105.29, or 9902.51.14 of such Schedule purchased in
calendar year 1999.
``(6) Amount attributable to duties paid.--For purposes of
paragraphs (1), (2)(A), and (3)(A), the amount attributable
to the duties paid by a manufacturer shall be the amount
shown on the records of the Customs Service as of September
11, 2001, under this section as then in effect.
``(7) Schedule of payments; reallocations.--
``(A) Schedule.--Of the payments described in paragraphs
(1), (2)(A), and (3)(A), the Customs Service shall make the
first and second installments on or before the date that is
45 days after the date of enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act, and the
third installment on or before April 15, 2003. Of the
payments described in paragraphs (2)(C) and (3)(C), the
Customs Service shall make the first installment on or before
the date that is 120 days after the date of enactment of the
Wool Manufacturer Payment Clarification and Technical
Corrections Act, and the second installment on or before
April 15, 2003.
``(B) Reallocations.--In the event that a manufacturer that
would have received payment under subparagraph (A) or (C) of
paragraph (1), (2), or (3) ceases to be qualified for such
payment as such a manufacturer, the amounts otherwise payable
to the remaining manufacturers under such subparagraph shall
be increased on a pro rata basis by the amount of the payment
such manufacturer would have received.
``(8) Reference.--For purposes of paragraphs (1)(A) and
(6), the `records of the Customs Service as of September 11,
2001' are the records of the Wool Duty Unit of the Customs
Service on September 11, 2001, as adjusted by the Customs
Service to the extent necessary to carry out this section.
The amounts so adjusted are not subject to administrative or
judicial review.
``(e) Affidavits by Manufacturers.--
``(1) Affidavit required.--A manufacturer may not receive a
payment under this section for calendar year 2000, 2001, or
2002, as the case may be, unless that manufacturer has
submitted to the Customs Service for that calendar year a
signed affidavit that attests that, during that calendar
year, the affiant was a manufacturer in the United States
described in subsection (a), (b), or (c).
``(2) Timing.--An affidavit under paragraph (1) shall be
valid--
``(A) in the case of a manufacturer described in paragraph
(1), (2)(A), or (3)(A) of subsection (d) filing a claim for a
payment for calendar year 2000 or 2001, or both, only if the
affidavit is postmarked no later than 15 days after the date
of enactment of the Wool Manufacturer Payment Clarification
and Technical Corrections Act; and
``(B) in the case of a claim for a payment for calendar
year 2002, only if the affidavit is postmarked no later than
March 1, 2003.
``(f) Offsets.--Notwithstanding any other provision of this
section, any amount otherwise payable under subsection (d) to
a manufacturer in calendar year 2001 and, where applicable,
in calendar years 2002 and 2003, shall be reduced by the
amount of any payment received by that manufacturer under
this section before the enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act.
``(g) Definition.--For purposes of this section, the
manufacturer is the party that owns--
``(1) imported worsted wool fabric, of the kind described
in heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff
Schedule of the United States, at the time the fabric is cut
and sewn in the United States into men's or boys' suits,
suit-type jackets, or trousers;
``(2) imported wool yarn, of the kind described in heading
5107.01 or 9902.51.13 of such Schedule, at the time the yarn
is processed in the United States into worsted wool
fabric; or
``(3) imported wool fiber or wool top, of the kind
described in heading 5101.11, 5101.19, 5101.21, 5101.29,
5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or
9902.51.14 of such Schedule, at the time the wool fiber or
wool top is processed in the United States into wool yarn.''.
(2) Funding.--There is authorized to be appropriated and is
hereby appropriated, out of amounts in the General Fund of
the Treasury not otherwise appropriated, $36,251,000 to carry
out the amendments made by paragraph (1).
SEC. 5102. DUTY SUSPENSION ON WOOL.
(a) Extension of Temporary Duty Reductions.--
(1) Heading 9902.51.11.-- Heading 9902.51.11 of the
Harmonized Tariff Schedule of the United States is amended by
striking ``2003'' and inserting ``2005''.
(2) Heading 9902.51.12.-- Heading 9902.51.12 of the
Harmonized Tariff Schedule of the United States is amended--
(A) by striking ``2003'' and inserting ``2005''; and
(B) by striking ``6%'' and inserting ``Free''.
(3) Heading 9902.51.13.--Heading 9902.51.13 of the
Harmonized Tariff Schedule of the United States is amended by
striking ``2003'' and inserting ``2005''.
(4) Heading 9902.51.14.--Heading 9902.51.14 of the
Harmonized Tariff Schedule of the United States is amended by
striking ``2003'' and inserting ``2005''.
(b) Limitation on Quantity of Imports.--
(1) Note 15.--U.S. Note 15 to subchapter II of chapter 99
of the Harmonized Tariff Schedule of the United States is
amended--
(A) by striking ``from January 1 to December 31 of each
year, inclusive''; and
(B) by striking ``, or such other'' and inserting the
following: ``in calendar year 2001, 3,500,000 square meter
equivalents in calendar year 2002, and 4,500,000 square meter
equivalents in calendar year 2003 and each calendar year
thereafter, or such greater''.
(2) Note 16.--U.S. Note 16 to subchapter II of chapter 99
of the Harmonized Tariff Schedule of the United States is
amended--
(A) by striking ``from January 1 to December 31 of each
year, inclusive''; and
(B) by striking ``, or such other'' and inserting the
following: ``in calendar year 2001, 2,500,000 square meter
equivalents in calendar year 2002, and 3,500,000 square meter
equivalents in calendar year 2003 and each calendar year
thereafter, or such greater''.
(c) Extension of Duty Refunds and Wool Research Trust
Fund.--
(1) In general.--The United States Customs Service shall
pay each manufacturer that receives a payment under section
505 of the Trade and Development Act of 2000 (Public Law 106-
200) for calendar year 2002, and that provides an affidavit
that it remains a manufacturer in the United States as of
January 1 of the year of the payment, 2 additional payments,
each payment equal to the payment received for calendar year
2002 as follows:
(A) The first payment to be made after January 1, 2004, but
on or before April 15, 2004.
(B) The second payment to be made after January 1, 2005,
but on or before April 15, 2005.
(2) Conforming amendment.--Section 506(f) of the Trade and
Development Act of 2000 (Public Law 106-200) is amended by
striking ``2004'' and inserting ``2006''.
(3) Authorization.--There is authorized to be appropriated
and is hereby appropriated out of amounts in the general fund
of the Treasury not otherwise appropriated such sums as are
necessary to carry out the provisions of this subsection.
(d) Effective Date.--The amendment made by subsection
(a)(2)(B) applies to goods entered, or withdrawn from
warehouse for consumption, on or after January 1, 2002.
Subtitle B--Other Provisions
SEC. 5201. FUND FOR WTO DISPUTE SETTLEMENTS.
(a) Establishment of Fund.--There is established in the
Treasury a fund for the payment of settlements under this
section.
(b) Authority of USTR to Pay Settlements.--Amounts in the
fund established under subsection (a) shall be available, as
provided in appropriations Acts, only for the payment by the
United States Trade Representative of the amount of the total
or partial settlement of any dispute pursuant to proceedings
under the auspices of the World Trade Organization, if--
(1) in the case of a total or partial settlement in an
amount of not more than $10,000,000, the Trade Representative
certifies to the Secretary of the Treasury that the
settlement is in the best interests of the United States; and
(2) in the case of a total or partial settlement in an
amount of more than $10,000,000, the Trade Representative
certifies to the Congress that the settlement is in the best
interests of the United States.
(c) Appropriations.--There are authorized to be
appropriated to the fund established under subsection (a)--
(1) $50,000,000; and
(2) amounts equivalent to amounts recovered by the United
States pursuant to the settlement of disputes pursuant to
proceedings under the auspices of the World Trade
Organization.
Amounts appropriated to the fund are authorized to remain
available until expended.
(d) Management of fund.--Sections 9601 and 9602(b) of the
Internal Revenue Code of 1986 shall apply to the fund
established under subsection (a) to the same extent as such
provisions apply to trust funds established under subchapter
A of chapter 98 of such Code.
[[Page H5918]]
SEC. 5202. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS
USED IN NUCLEAR FACILITIES.
(a) In General.--Subheading 9902.84.02 of the Harmonized
Tariff Schedule of the United States is amended--
(1) by striking ``4.9%'' and inserting ``Free''; and
(2) by striking ``12/31/2003'' and inserting ``12/31/
2006''.
(b) Effective Date.--
(1) In general.--The amendments made by subsection (a)
shall apply to goods entered, or withdrawn from warehouse for
consumption, on or after January 1, 2002.
(2) Retroactive application.--Notwithstanding section 514
of the Tariff Act of 1930 or any other provision of law, and
subject to paragraph (4), the entry of any article--
(A) that was made on or after January 1, 2002, and
(B) to which duty-free treatment would have applied if the
amendment made by this section had been in effect on the date
of such entry,
shall be liquidated or reliquidated as if such duty-free
treatment applied, and the Secretary of the Treasury shall
refund any duty paid with respect to such entry.
(3) Entry.--As used in this subsection, the term ``entry''
includes a withdrawal from warehouse for consumption.
(4) Requests.--Liquidation or reliquidation may be made
under paragraph (2) with respect to an entry only if a
request therefor is filed with the Customs Service, within
180 days after the date of the enactment of this Act, that
contains sufficient information to enable the Customs
Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot be located.
SEC. 5203. SUGAR TARIFF-RATE QUOTA CIRCUMVENTION.
(a) In General.--Chapter 17 of the Harmonized Tariff
Schedule of the United States is amended in the superior text
to subheading 1702.90.05 by striking ``Containing'' and all
that follows through ``solids:'' and inserting the following:
``Containing soluble non-sugar solids (excluding any foreign
substances, including but not limited to molasses, that may
have been added to or developed in the product) equal to 6
percent or less by weight of the total soluble solids:''.
(b) Monitoring for Circumvention.--The Secretary of
Agriculture and the Commissioner of Customs shall
continuously monitor imports of sugar and sugar-containing
products provided for in chapters 17, 18, 19, and 21 of the
Harmonized Tariff Schedule of the United States, other than
molasses imported for use in animal feed or the production of
rum and articles prepared for marketing to the ultimate
consumer in the form and package in which imported, for
indications that an article is being used to circumvent a
tariff-rate quota provided for in those chapters. The
Secretary and Commissioner shall specifically examine imports
of articles provided for in subheading 1703.10.30 of the
Harmonized Tariff Schedule of the United States.
(c) Reports and Recommendations.--The Secretary and the
Commissioner shall report their findings to Congress and the
President not later than 180 days after the date of enactment
of this Act and every 6 months thereafter. The reports shall
include data and a description of developments and trends in
the composition of trade of articles provided for in the
chapters of the Harmonized Tariff Schedule of the United
States identified in subsection (b) and any indications of
circumvention that may exist. The reports shall also include
recommendations for ending such circumvention, including
recommendations for legislation.
And the Senate agree to the same.
From the Committee on Ways and Means, for consideration of
the House amendment and the Senate amendment, and
modifications committed to conference:
William Thomas,
Phillip M. Crane,
From the Committee on Education and the Workforce, for
consideration of the Senate amendment, and modifications
committed to conference:
John Boehner,
Sam Johnson,
From the Committee on Energy and Commerce, for consideration
of sec. 603 of the Senate amendment, and modifications
committed to conference:
Billy Tauzin,
Michael Bilirakis,
From the Committee on Government Reform, for consideration of
sec. 344 of the House amendment, and sec. 1143 of the Senate
amendment, and modifications committed to conference:
Dan Burton,
Bob Barr,
From the Committee on the Judiciary, for consideration of
secs. 111, 601, and 701 of the Senate amendment, and
modifications committed to conference:
F. James Sensenbrenner,
Howard Coble,
From the Committee on the Rules, for consideration of secs.
2103, 2105, and 2106 of the House amendment and secs. 2103,
2105, and 2106 of the Senate amendment, and modifications
committed to conference:
David Dreier,
John Linder,
Managers on the Part of the House.
Max Baucus,
John Breaux,
Chuck Grassley,
Orrin Hatch,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at the
conference on the disagreeing votes of the two Houses on the
amendment of the Senate to the bill (H.R. 3009), to extend
the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes, submit the
following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference
report:
The Senate amendment struck all of the House bill after the
enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment of
the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The differences between
the House bill, the Senate amendment, and the substitute
agreed to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clerical
changes.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
sec. 101--short title
Present law
No provision.
House amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Senate amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance for Workers
sec. 111--reauthorization of the trade adjustment assistance program
Present law
Current section 245 authorizes to be appropriated to the
Department of Labor such sums as may be necessary to carry
out the purposes of the TAA and NAFTA-TAA for workers
programs for the period October 1, 1998 through September 30,
2001. Current section 285 provides for termination of all
Trade Adjustment Assistance programs on September 30, 2001,
but provides that workers, and firms eligible to receive
benefits on or before that date shall continue to be eligible
to receive such benefits as though the programs were in
effect.
House amendment
Senate amendment
Section III of the Senate bill creates a new section 248 of
the Trade Act of 1974 which authorizes to be appropriated to
the Department of Labor such sums as may be necessary to
carry out the purposes of the Trade Adjustment Assistance for
workers program for the period October 1, 2001, through
September 30, 2007. Section 701 of the Senate bill amends
current section 285 to provide for termination of all Trade
Adjustment Assistance programs on September 30, 2007, but
provides that workers, and firms, communities, farmers, and
fishermen eligible to receive benefits on or before that date
shall continue to be eligible to receive such benefits as
though the programs were in effect.
Conference agreement
Conferees agree to extend the authorization of the Trade
Adjustment Assistance programs through September 30, 2007,
and to consolidate the NAFTA-TAA program with the regular TAA
program.
sec. 112--filing of petitions and provision of rapid response
assistance; expedited review of petitions by secretary of labor
Present law
Current sections 221 and 250 set forth requirements
concerning who may file a petition for certification of
eligibility to apply for TAA and NAFTA-TAA assistance,
respectively. Under both programs, petitions may be filed by
a group of workers or by their certified or recognized union
or other duly authorized representative. TAA petitions are
filed with the Secretary of Labor. NAFTA-TAA petitions are
filed with the Governor of the relevant State and forwarded
by him to the Secretary of Labor. Under section 223, the
Secretary of Labor must rule on eligibility within 60 days
after a TAA petition is filed. Under section 250, the
Governor must make a preliminary eligibility determination
within 10 days after a NAFTA-TAA petition is filed, and the
Secretary of Labor must make a final eligibility
determination within the next 30 days. Section 221 also sets
forth notice and hearing obligations of the Secretary of
Labor upon receipt of a TAA petition. Section 250 provides
that, in the event of preliminary certification of
eligibility to apply for NAFTA-TAA benefits, the Governor
immediately provide the affected workers with certain rapid
response services.
House amendment
The House Amendment provided for a shortened period for the
Secretary of Labor to consider petitions from 60 days to 40
days
[[Page H5919]]
and for other rapid response assistance to workers.
Senate amendment
Section 111 of the Senate bill creates a new section 231 of
the Trade Act of 1974, which consolidates the TAA and NAFTA-
TAA programs by establishing a single program with a single
set of group eligibility criteria and a single set of
procedures and standards for filing and reviewing petitions,
certifying eligibility, and terminating certifications of
eligibility.
Section 231 expands the list of entities that may file a
petition for group certification of eligibility to include
employers, one-stop operators or one-stop partners, State
employment agencies, and any entity to which notice of a
plant closing or mass layoff must be given under section 3 of
the Worker Adjustment and Retaining Notification Act. Section
231 also provides that the President, or the Committee on
Finance of the Senate or the Committee on Ways and Means of
the House of Representatives (by resolution), may direct the
Secretary of Labor to initiate a certification process under
this chapter to determine the eligibility for Trade
Adjustment Assistance of a group of workers.
Section 231 creates a single process for filing and
reviewing petitions for Trade Adjustment Assistance for
workers, under which all petitions are filed with both the
Secretary of Labor and the Governor of the State. Upon filing
of the petition, the Governor is required to fulfill the
requirements of any agreement entered into with the
Department of Labor under section 222, to provide certain
rapid response services, and to notify workers on whose
behalf a petition has been filed of their potential
eligibility for certain existing federal health care, child
care, transportation, and other assistance programs. Upon
filing the petition, the Secretary of Labor must make his
certification determination within 40 days and provide the
notice required.
Conference agreement
The Senate recedes to the House with a change providing for
simultaneous filing of petitions with the Secretary of Labor
and State Governor.
sec. 113--group eligibility requirements
Present law
Current law sections 222 and 250 of Title II of the Trade
Act of 1974 set forth group eligibility criteria. Under TAA,
the Secretary must certify a group of workers as eligible to
apply for Trade Adjustment Assistance if he determines (1)
that a significant number or proportion of the workers in
such workers' firm have become or are threatened to become
totally or partially separated; (2) sales or production of
such firm have decreased absolutely; and (3) imports of
articles like or directly competitive with articles produced
by such workers' firm contributed importantly to the total or
partial separation or threat thereof, and to the decline in
sales or production. Under NAFTA-TAA, group eligibility may
be based on the same criteria set forth in section 222, but
section 250 also provides for NAFTA-TAA eligibility where
there has been a shift in production by the workers' firm to
Mexico or Canada of articles like or directly competitive
with articles which are produced by the firm. Section 222
also includes special eligibility provisions with respect to
oil and natural gas producers.
House amendment
The House Amendment at Section 113 expanded the Trade
Adjustment Assistance programs to secondary workers that are
suppliers to firms that were certified and which satisfied
certain conditions.
Senate amendment
Section 111 of the Senate Amendment creates a new section
231 under which the eligibility criteria are revised. First,
workers are eligible for TAA if the value or volume of
imports of articles like or directly competitive with
articles produced by that firm have increased and the
increase in the value or volume of imports contributed
importantly to the workers' separation or threat of
separation. Second, eligibility is extended to workers who
are separated due to shifts in production to any country,
rather than only when the shift in production is to Mexico or
Canada. Third, eligibility is extended to adversely affected
secondary workers. Eligible secondary workers include workers
in supplier firms and, with respect to trade with NAFTA
countries, downstream firms. Fourth, a new special
eligibility provision is added with respect to taconite
pellets.
Conference agreement
The Conferees agree to extend coverage of Trade Adjustment
Assistance to new categories of workers: 1) secondary workers
that supply directly to another firm component parts for
articles that were the basis for a certification of
eligibility, 2) downstream workers that were affected by
trade with Mexico or Canada, and 3) certain workers that have
been laid off because their firm has shifted its production
to another country that has a free trade agreement with the
United States, that has a unilaterally preferential trading
arrangement with the United States, or when there has been or
is likely to be an increase in imports of the relevant
articles.
sec. 114--qualifying requirements for trade readjustment allowances
Present law
Current section 231 establishes qualifying requirements
that must be met in order for an individual worker within a
certified group to receive Trade Adjustment Assistance. In
order to receive trade readjustment allowances, a certified
worker must have been separated on or after the eligibility
date established in the certification but within 2 years of
the date of the certification determination; been employed
for at least 26 of the 52 weeks preceding the separation at
wages of $30 or more a week; be eligible for and have
exhausted unemployment insurance benefits; not be
disqualified for extended compensation payable under the
Federal-State Extended Unemployment Compensation Act of 1970
by reason of the work acceptance and job search requirements
in section 202(a)(3) of that Act; and be enrolled in a
training program approved by the Secretary of Labor or have
received a training waiver.
House amendment
The House Amendment at Section 114 provided for
requirements and deadlines for workers to enroll in training.
Senate amendment
Section 111 of the Senate Amendment adds a new section 235
which maintains the individual eligibility requirements in
current law, with the exception of revisions to provisions
governing bases for granting training waivers.
Conference agreement
The Senate recedes to the House, with a change to adopt a
training enrollment deadline of 16 weeks after separation.
sec. 115--waivers of training requirements
Present law
Section 231 sets forth permissible bases for granting a
training waiver. Pursuant to section 250(d), training waivers
are not available in the NAFTA-TAA program.
House amendment
The House Amendment provides that all workers who are
eligible to apply for Trade Adjustment Assistance may be
considered for training waivers and codifies several bases on
which the Secretary may grant a waiver.
Senate Amendment
Section 111 of the Senate Amendment adds a new section 235
which provides that all workers who are eligible to apply for
Trade Adjustment Assistance may be considered for training
waivers and codifies several bases on which the Secretary may
grant a waiver.
Conference agreement
The House receded to the Senate with a change to delete the
Senate provision giving the Secretary discretion to grant
waivers for ``other'' reasons.
sec. 116--amendments to limitations on trade readjustment allowances
Present law
Current section 233 provides that each certified worker may
receive trade readjustment allowances for a maximum of 52
weeks. Current law also provides that, in most circumstances,
a worker is treated as participating in training during any
week which is part of a break in training that does not
exceed 14 days.
House amendment
Section 116 of the House Amendment would add 26 weeks of
trade adjustment allowances for those workers who were in
training and required the extension of benefits for the
purpose of completing training.
Senate amendment
Section 111 of the Senate Amendment adds a new section 23 7
which increases the maximum time period during which a worker
may receive trade adjustment allowances to 78 weeks, extends
the permissible duration of a break in training to 30 days,
and provides for an additional 26 weeks of income support for
workers requiring remedial education. Section 237 also
clarifies that the requirement that a worker exhaust
unemployment insurance benefits prior to receiving trade
adjustment allowances does not apply to any extension of
unemployment insurance by a State using its own funds that
extends beyond either the 26 week period mandated by Federal
law or any additional period provided for under the Federal-
State Extended Unemployment Compensation Act of 1970 (26
U.S.C. 3304 note).
Conference agreement
The Senate recedes to the House.
sec. 117--annual total amount of payments for training
Present law
Current section 236 establishes the terms and conditions
under which training is available to eligible workers;
permits the Secretary of Labor to approve certain
specified types of training programs and to pay the costs
of approved training and certain supplemental costs,
including subsistence and transportation costs, for
eligible workers; and caps total annual funding for
training under the TAA for workers program at $80 million.
Section 250 separately caps training expenditures under
the NAFTA-TAA program at $30 million annually.
House amendment
The House provided $30 million additional funds for the
Trade Adjustment Assistance program. Combined with NAFTA
Trade Adjustment Assistance, the total training funds
available were $140 million.
Senate amendment
Section 111 of the Senate Amendment adds a new section 240
which sets the total funds available for training
expenditures under the unified TAA for workers program to
$300 million annually.
[[Page H5920]]
Conference agreement
Conferees agreed to a combined training cap of $220 million
for Trade Adjustment Assistance training.
SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING
Present law
No applicable section.
House amendment
The House Amendment included provisions related to employer
based training including on-the-job training and customized
training with partial reimbursements provided to the
employer.
Senate amendment
Section 111 of the Senate Amendment adds a new section 240
which revises the list of training programs which the
Secretary may approve to include customized training. It also
adds a new section 237, which clarifies that the prohibition
on payment of trade adjustment allowances to a worker
receiving on-the-job training does not apply to a worker
enrolled in a non-paid customized training program.
Conference agreement
The Senate recedes to the House.
SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF
1998
Present law
No provision.
House amendment
The House Amendment provided multiple provisions related to
coordinating efforts under the Trade Adjustment Assistance
programs to provide information and benefits to workers under
the Workforce Investment Act.
Senate amendment
No provision.
Conference agreement
Conferees agreed to drop House language with the exception
of a provision related to coordinating the delivery of Trade
Adjustment Assistance benefits and information at one-stop
delivery systems under the Workforce Investment Act.
SEC. 120--EXPENDITURE PERIOD
Present law
No provision.
House amendment
The House amendment provided that certain funds obligated
for any fiscal year to carry out activities may be expended
by each State in the succeeding two fiscal years.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 121--JOB SEARCH ALLOWANCES
Present law
Under current section 237, when the Secretary of Labor
determines that local employment is not available, an
adversely affected worker certified eligible for TAA benefits
may receive reimbursement of 90 percent of the cost of
necessary job search expenses up to $800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 241
which raises the maximum reimbursement for job search
expenses to $1,250 per worker.
Conference agreement
The House recedes to the Senate.
SEC. 122--RELOCATION ALLOWANCES
Present law
Under current section 238, when the Secretary of Labor
determines that local employment is not available, an
adversely affected worker certified eligible for TAA benefits
may receive a relocation allowance consisting of (1) 90
percent of the reasonable and necessary expenses incurred in
transporting a worker and his family, if any, and household
effects, and (2) a lump sum equivalent to three times the
worker's average weekly wage, up to a maximum payment of
$800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 242
which raises the maximum lump sum portion of the relocation
allowance to $1,250.
Conference agreement
The House recedes to the Senate.
SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current law authorizes a Trade Adjustment Assistance
Program for workers affected by NAFTA trade.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 231
which combines the TAA and NAFTA-TAA programs, establishing a
single program with a single set of group eligibility
criteria and a single set of procedures and standards for
filing and reviewing petitions, certifying eligibility, and
terminating certification of eligibility.
Conference agreement
The House recedes to the Senate to the extent of repealing
the NAFTA Trade Adjustment Assistance program and creating a
single, unified TAA program for workers.
SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 243
which directs the Secretary of Labor, within one year of
enactment, to establish a two-year wage insurance pilot
program under which a State uses the funds provided to the
State for Trade Adjustment allowances to pay to an adversely
affected worker certified under section 231, for a period not
to exceed two years, a wage subsidy of up to 50 percent of
the difference between the wages received by the adversely
affected worker from reemployment and the wages received by
the adversely affected worker at the time of separation. An
adversely affected worker may be eligible to receive a wage
subsidy if the worker obtains reemployment not more than 26
weeks after the date of separation from the adversely
affected employment, is at least 50 years of age, earns not
more than $50,000 a year in wages from reemployment, is
employed at least 30 hours a week in the reemployment, and
does not return to the employment from which the worker was
separated. The wage subsidy available to workers in the wage
insurance program is 50 percent of the difference between the
amount of the wages received by the worker from reemployment
and the amount of the wages received by the worker at the
time of separation, if the wages the worker receives from
reemployment are less than $40,000 a year. The wage subsidy
is 25 percent if the wages received by the worker from
reemployment are greater than $40,000 a year but not more
than $50,000 a year. Total payments made to an adversely
affected worker under the wage insurance program may not
exceed $5,000 in each year of the 2-year period. A worker
participating in the wage insurance program is not eligible
to receive any other Trade Adjustment Assistance benefits,
unless the Secretary of Labor determines that the worker has
shown circumstances that warrant eligibility for training
benefits under section 240.
Conference agreement
The Conferees agree to create a new alternative Trade
Adjustment Assistance program for older workers.
SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS
Present law
No provision.
House amendment
The House passed amendment included a declaration of policy
and Sense of the Congress related to the responsibility of
the Secretary of Labor to provide information to workers
related to benefits available to them under the TAA and other
federal programs.
Senate amendment
Although certain supportive services are available to
dislocated workers under WIA, current law makes no express
linkage between these services and Trade Adjustment
Assistance and TAA certified workers may not be able to
access them. Section 111 of the Senate Amendment adds a new
section 243 which provides that States may apply for and the
Secretary of Labor may make available to adversely affected
workers certified under the Trade Adjustment Assistance
program supportive services available under WIA, including
transportation, child care, and dependent care, that are
necessary to enable a worker to participate in or complete
training. Section 243 requires the Comptroller General to
conduct a study of all assistance provided by the Federal
Government for workers facing job loss and economic distress;
to submit a report to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives on the study within one year of enactment of
this Act; and to distribute the report to all WIA one-stop
partners. Section 243 further provides that each State may
conduct a study of its assistance programs for workers facing
job loss and economic distress. Each State is eligible for a
grant from the Secretary of Labor, not to exceed $50,000, to
enable it to conduct the study. In the event that a grant is
awarded, the State must, within one year of receiving the
grant, provide its report to the Committee on Finance and the
Committee on Ways and Means and distribute its report to one-
stop partners in the State.
Conference agreement
The Senate recedes to the House.
Subtitle B--Trade Adjustment Assistance for Firms
SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM
Present law
The Trade Adjustment Assistance for Firms program provides
technical assistance to qualifying firms. Current Title II,
Chapter 3, section 251 of the Trade Act of 1974 provides that
a firm is eligible to receive Trade Adjustment Assistance
under this program if (1) a significant number or proportion
of its workers have become or are threatened to become
totally or partially separated; (2) sales or production, or
both, have decreased absolutely; and (3) increases of imports
of articles like or directly competitive with articles which
are produced by such firms contributed importantly to the
total or partial separations or threat thereof.
[[Page H5921]]
The authorization for the Trade Adjustment Assistance for
Firms program expired on September 30, 2001. The TAA for
Firms program is currently subject to annual appropriations
and is funded as part of the budget of the Economic
Development Administration in the Department of Commerce.
House amendment
The House passed amendment included a 2 year
reauthorization for Trade Adjustment Assistance for Firms.
Senate amendment
Section 201 of the Senate Amendment reauthorizes the Trade
Adjustment Assistance for Firms program for fiscal years 2002
through 2007; expands the definition of qualifying firms to
cover shifts in production; and authorizes appropriations to
the Department of Commerce in the amount of $16 million
annually for fiscal years 2002 through 2007 to carry out the
purposes of the Trade Adjustment Assistance for Firms
program.
Conference agreement
The House recedes to the Senate on the issue of providing a
$16 million authorization for Trade Adjustment Assistance for
Firms and reauthorizing the program through September 30,
2007.
Subtitle C--Trade Adjustment Assistance for Farmers and Ranchers
SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 401 of the Senate Amendment adds new sections 292-
298 of the Trade Act of 1974 which create a Trade Adjustment
Assistance program for farmers and ranchers in the Department
of Agriculture. Under this section, a group of agricultural
commodity producers may petition the Secretary of Agriculture
for Trade Adjustment Assistance. The Secretary must certify
the group as eligible for Trade Adjustment Assistance for
farmers if it is determined that the national average price
in the most recent marketing year for the commodity produced
by the group is less than 80 percent of the national average
price in the preceding 5 marketing years and that increases
in imports of that commodity contributed importantly to the
decline in price.
Conference agreement
The House recedes to the Senate with changes. The Conferees
agree to include limitations on eligibility based upon
adjusted gross income and counter-cyclical payment
limitations set forth in the Food Security Act of 1985.
SEC. 142--CONFORMING AMENDMENTS
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment makes conforming amendments to the
Trade Act of 1974 concerning the TAA for Farmers program.
Conference agreement
Conferees agree to make conforming amendments to the Trade
Act of 1974.
SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 502 of the Senate Amendment adds new sections 299-
299(G) which create a Trade Adjustment Assistance program for
fishermen in the Department of Commerce. Under this program,
a group of fishermen may petition the Secretary of Commerce
for Trade Adjustment Assistance. The Secretary must certify
the group as eligible for Trade Adjustment Assistance for
fishermen if it is determined that the national average price
in the most recent marketing year for the fish produced by
the group is less than 80 percent of the national average
price in the proceeding five marketing years and that
increases in imports of that fish contributed importantly to
the decline in price.
Conference agreement
Conferees agree to drop Senate Amendment and authorize a
study by the Department of Labor to investigate applying TAA
to fisherman.
Subtitle D--Effective Date
SEC. 151--EFFECTIVE DATE
Present law
No applicable provision.
House amendment
No provision.
Senate amendment
Section 801 of the Senate Amendment provides that except as
otherwise specified, the amendments to the TAA program shall
be effective 90 days after enactment of the Trace Act of
2002. The Senate Amendment includes transitional provisions
governing the period between expiration of the prior
authorizations of TAA for workers and firms and the effective
date of the amendments/
Conference agreement
The House recedes to the Senate.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201(a) AND 202. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION
BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH
INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
Present Law
Under present law, the tax treatment of health insurance
expenses depends on the individual's circumstances. In
general, employer contributions to an accident or health plan
are excludable from an employee's gross income (sec. 106).
Self-employed individuals are entitled to deduct a portion
of the amount paid for health insurance expenses for the
individual and his or her spouse and dependents. The
percentage of deductible expenses is 70 percent in 2002 and
100 percent in 2003 and thereafter.
Individuals other than self-employed individuals who
purchase their own health insurance and itemize deductions
may deduct their expenses to the extent that their total
medical expenses exceed 7.5 percent of adjusted gross income.
Present law does not provide a tax credit for the purchase
of health insurance.
The health care continuation rules (commonly referred to as
``COBRA'' rules, after the Consolidated Omnibus Budget
Reconciliation Act of 1985 in which they were enacted)
require that employer-sponsored group health plans of
employers with 20 or more employees must offer certain
covered employees and their dependents (``qualified
beneficiaries'') the option of purchasing continued health
coverage in the event of loss of coverage resulting from
certain qualifying events. These qualifying events include:
termination or reduction in hours of employment, death,
divorce or legal separation, enrollment in Medicare, the
bankruptcy of the employer, or the end of a child's
dependency under a parent's health plan. In general, the
maximum period of COBRA coverage is 18 months. An employer is
permitted to charge qualified beneficiaries 102 percent of
the applicable premium for COBRA coverage.
Under present law, individuals without access to COBRA are
able to purchase individual policies on a guaranteed issue
basis without exclusion of coverage for pre-existing
conditions if they had 18 months of creditable coverage
under an employer sponsored group health plan,
governmental plan, or a church plan. Those with access to
COBRA are required to exhaust their 18 months of COBRA
prior to obtaining a policy on a guaranteed issue basis
without exclusion of coverage for pre-existing conditions.
House amendment
The House bill provides a refundable tax credit for up to
60 percent of the expenses of an eligible individual for
qualified health insurance coverage of the eligible
individual and his or her spouse or dependents. Eligible
individuals are certain TAA eligible workers and PBGC pension
beneficiaries. In the case of TAA eligible workers, no more
than 12 months of coverage would be eligible for the credit.
The amount of the credit would be phased out for taxpayers
with modified adjusted gross income between $20,000 and
$40,000 for single taxpayers ($40,000 and $80,000 for married
taxpayers filing a joint return). The credit would be
available on an advance basis pursuant to a program to be
established by the Secretary of the Treasury. Insurance that
qualifies for the credit includes certain COBRA coverage and
certain individual market options.
Senate amendment
The Senate amendment provides a refundable credit for 70
percent of qualified health insurance expenses. The credit is
available with respect to certain TAA eligible workers. The
credit is payable on an advance basis pursuant to a program
to be established by the Secretary of the Treasury. Insurance
that qualifies for the credit includes certain COBRA
coverage, certain State-based options, and individual health
insurance if certain requirements are satisfied.
Conference agreement
Refundable health insurance credit: in general
In the case of taxpayers who are eligible individuals, the
conference agreement provides a refundable tax credit for 65
percent of the taxpayer's expenses for qualified health
insurance of the taxpayer and qualifying family members for
each eligible coverage month beginning in the taxable year.
The credit is available only with respect to amounts paid by
the taxpayer.
Qualifying family members are the taxpayer's spouse and any
dependent of the taxpayer with respect to whom the taxpayer
is entitled to claim a dependency exemption.\1\ Any
individual who has other specified coverage is not a
qualifying family member.
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\1\ Present law allows the custodial parent to release the
right to claim the dependency exemption for a child to the
noncustodial parent. In addition, if certain requirements are
met, the parents may decide by ageement that the noncustodial
parent is entitled to the dependency exemption with respect
to a child. In such cases, the provision would treat the
child as the dependent of the custodial parent for purposes
of the credit.
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Persons eligible for the credit
Eligibility for the credit is determined on a monthly
basis. In general, an eligible coverage month is any month
if, as of the first
[[Page H5922]]
day of the month, the taxpayer (1) is an eligible individual,
(2) is covered by qualified health insurance, (3) does not
have other specified coverage, and (4) is not imprisoned
under Federal, State, or local authority. In the case of a
joint return, the eligibility requirements are met if at
least one spouse satisfies the requirements. An eligible
month must begin more than 90 days after the date of
enactment.
An eligible individual is (1) an eligible TAA recipient,
(2) an eligible alternative TAA recipient, and (3) an
eligible PBGC pension recipient.
An individual is an eligible TAA recipient during any month
if the individual (1) is receiving for any day of such month
a trade adjustment allowance \2\ or who would be eligible to
receive such an allowance but for the requirement that the
individual exhaust unemployment benefits before being
eligible to receive an allowance and (2) with respect to such
allowance, is covered under a certification issued under
subchapter A or D of chapter 2 of title II of the Trade Act
of 1974. An individual is treated as an eligible TAA
recipient during the first month that such individual would
otherwise cease to be an eligible TAA recipient.
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\2\ Part I of subchapter B, or subchapter D, of chapter 2 of
title II of the Trade Act of 1974.
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An individual is an eligible alternative TAA recipient
during any month if the individual (1) is a worker described
in section 246(a)(3)(B) of the Trade Act of 1974 who is
participating in the program established under section
246(a)(1) of such Act, and (2) is receiving a benefit for
such month under section 246(a)(2) of such Act. An individual
is treated as an eligible alternative TAA recipient during
the first month that such individual would otherwise cease to
be an eligible TAA recipient.
An individual is a PBGC pension recipient for any month if
he or she (1) is age 55 or over as of the first day of the
month, and (2) is receiving a benefit any portion of which is
paid by the Pension Benefit Guaranty Corporation (PBGC).
An otherwise eligible taxpayer is not eligible for the
credit for a month if, as of the first day of the month the
individual has other specified coverage. Specified coverage
would be (1) coverage under any insurance which constitutes
medical care (expect for insurance substantially all of the
coverage of which is for excepted benefits) \3\ if at least
50 percent of the cost of the coverage is paid by an employer
\4\ (or former employer) of the individual or his or her
spouse or (2) coverage under certain governmental health
programs.\5\ A rule aggregating plans of the same employer
applies in determining whether the employer pays at least 50
percent of the cost of coverage. A person is not an eligible
individual if he or she may be claimed as a dependent on
another person's tax return. A special rule applies with
respect to alternative TAA recipients.
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\3\ Excepted benefits are: (1) coverage only for accident or
disability income or any combination thereof, (2) coverage
issued as a supplement to liability insurance; (3) liability
insurance, including general liability insurance and
automobile liability insurance; (4) worker's compensation or
similar insurance; (5) automobile medical payment insurance;
(6) credit-only insurance; (7) coverage for on-site medical
clinics; (8) other insurance coverage similar to the
coverages in (1)-(7) specified in regulations under which
benefits for medical care are secondary or incidental to
other insurance benefits; (9) limited scope dental or vision
benefits; (10) benefits for long-term care, nursing home
care, home health care, community-based care, or any
combination thereof. and (11) other benefits similar to those
in (9) and (10) as specified in regulations. (12) coverage
only for a specified disease or illness; (13) hospital
indemnity or other fixed indemnity insurance; and (14)
Medicare supplemental insurance.
\4\ An amount would be considered paid by the employer if it
is excludable from income. Thus. for example, amounts paid
for health coverage on a salary reduction basis under an
employer plan are considered paid by the employer.
\5\ Specifically, an individual would not be eligible for the
credit if, as of the first day of the month, the individual
is (1) entitled to benefits under Medicare Part A, enrolled
in Medicare Part B, or enrolled in Medicaid or SCHIP, (2)
enrolled in a health benefits plan under the Federal
Employees Health Benefit Plan, or (3) entitled to receive
benefits under chapter 55 of title 10 of the United States
Code (relating to military personnel). An individual is not
considered to be enrolled in Medicaid solely by reason of
receiving immunizations.
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Qualified health insurance
Qualified health insurance eligible for the credit is: (1)
COBRA continuation coverage; (2) State based continuation
coverage provided by the State under a State law that
requires such coverage; (3) coverage offered through a
qualified State high risk pool; (4) coverage under a health
insurance program offered to State employees or a comparable
program; (5) coverage through an arrangement entered into by
the State and a group health plan, an issuer of health
insurance coverage, an administrator, or an employer; (6)
coverage offered through a State arrangement with a private
sector health care coverage purchasing pool; (7) coverage
under a State-operated health plan that does not receive any
Federal financial participation; (8) coverage under a group
health plan that is available through the employment of the
eligible individual's spouse; and (9) coverage under
individual health insurance if the eligible individual was
covered under individual health insurance during the entire
30-day period that ends on the date the individual became
separated from the employment which qualified the individual
for the TAA allowance, the benefit for an eligible
alternative TAA recipient, or a pension benefit from the
PBGC, whichever applies.\6\
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\6\ For this purpose, ``individual health insurance'' means
any insurance which constitutes medical care offered to
individuals other than in connection with a group health
plan. Such term does not include Federal- or State-based
health insurance coverage.
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Qualified health insurance does not include any State-based
coverage (i.e., coverage described in (2)-(8) in the
preceding paragraph), unless the State has elected to have
such coverage treated as qualified health insurance and such
coverage meets certain requirements. Such State coverage must
provide that each qualifying individual is guaranteed
enrollment if the individual pays the premium for enrollment
or provides a qualified health insurance costs eligibility
certificate and pays the remainder of the premium. In
addition, the State-based coverage cannot impose any pre-
existing condition limitation with respect to qualifying
individuals. State-based coverage cannot require a qualifying
individual to pay a premium or contribution that is greater
than the premium or contribution for a similarly situated
individual who is not a qualified individual. Finally,
benefits under the State-based coverage must the same as (or
substantially similar to) benefits provided to similarly
situated individuals who are not a qualified individuals. A
qualifying *individual is an eligible 'individual who seeks
to enroll in the State-based coverage and who has aggregate
periods of creditable coverage \7\ of three months or longer,
does not have other specified coverage, and who is not
imprisoned. A qualifying individual also includes qualified
family members of such an eligible individual.
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\7\ Creditable coverage is determined under the Health Care
Portability and Accountability Act (Code sec. 9801 (c)).
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Qualified health insurance does not include coverage under
a flexible spending or similar arrangement or any insurance
if substantially all of the coverage is of excepted benefits.
Other rules
Amounts taken into account in determining the credit could
not be taken into account in determining the amount allowable
under the itemized deduction for medical expenses or the
deduction for health insurance expenses of self-employed
individuals. Amounts distributed from a medical savings
account would not be eligible for the credit. The amount of
the credit is reduced by any credit received on an advance
basis. Married taxpayers filing separate returns are eligible
for the credit; however, if both spouses are eligible
individuals and the spouses file a separate return, then the
spouse of the taxpayer is not a qualifying family member.
The Secretary of the Treasury is authorized to prescribe
such regulations and other guidance as may be necessary or
appropriate to carry out the provision.
Advance payment of refundable health insurance credit;
reporting requirements
The conference agreement provides for payment of the credit
on an advance basis (i.e., prior to the filing of the
taxpayer's return) pursuant to a program to be established by
the Secretary of the Treasury no later than August 1, 2003.
Such program is to provide for making payments on behalf of
certified individuals to providers of qualified health
insurance. In order to receive the credit on an advance
basis, a qualified health insurance costs credit eligibility
certificate would have to be in effect for the taxpayer. A
qualified health insurance costs credit eligibility
certificate is a written statement that an individual is an
eligible individual for purposes of the credit, provides such
information as the Secretary of the Treasury may require, and
is provided by the Secretary of Labor or the PBGC (as
appropriate) or such other person or entity designated by the
Secretary.
The conference report permits the disclosure of return
information of certified individuals to providers of health
insurance information to the extent necessary to carry out
the advance payment mechanism.
The conference report provides that any person who receives
payments during a calendar year for qualified health
insurance and claims a reimbursement for an advance credit
amount is to file an information return with respect to each
individual from whom such payments were received or for whom
such a reimbursement is claimed. The return is to be in such
form as the Secretary may prescribe and is to contain the
name, address, and taxpayer identification number of the
individual and any other individual on the same health
insurance policy, the aggregate of the advance credit amounts
provided, the number of months for which advance credit
amounts are provided, and such other information as the
Secretary may prescribe. The conference report requires that
similar information be provided to the individual no later
than January 31 of the year following the year for which the
information return is made.
Effective Date
The provision is generally effective with respect to
taxable years beginning after December 31, 2001. The
provision relating to the advance payment mechanism to be
developed by the Secretary would be effective on the date of
enactment.
TITLE III--CUSTOMS REAUTHORIZATION
Subtitle A--United States Customs Service
CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL
OPERATIONS
SEC. 301--SHORT TITLE
Present law
No applicable section
[[Page H5923]]
House amendment
H.R. 3009 as amended and passed by the House provides that
the Act may be cited as, the ``Customs Border Security Act of
2002.''
Senate amendment
The Senate amendment is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment
SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS,
COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION
Present law
The statutory basis for authorization of appropriations for
Customs is section 301 (b)(1) of the Customs Procedural and
Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as
amended by section 8102 of the Omnibus Budget Reconciliation
Act of 1986 [P.L. 99-509], first outlined separate amounts
for non-commercial and commercial operations for the salaries
and expenses portion of the Customs authorization. Under 19
U.S.C. 2075, Congress has adopted a two-year authorization
process to provide Customs with guidance as it plans its
budget, as well as guidance from the Committee for the
appropriation process.
The most recent authorization of appropriations for Customs
(under section 101 of the Customs and Trade Act of 1990 [P.L.
101 382]) provided $118,238,000 for salaries and expenses and
$143,047,000 for air and marine interdiction program for FY
1991, and $1,247,884,000 for salaries and expenses and
$150,199,000 for air and marine interdiction program in FY
1992.
House amendment
This provision authorizes $1,365,456,000 for FY 2003 and
$1,399,592,400 for FY 2004 for noncommercial operations of
the Customs Service. It also authorizes $1,642,602,000 for FY
2003 and $1,683,667,050 for FY 2004 for commercial operations
of the Customs Service. Of the amounts authorized for
commercial operations, $308,000,000 is authorized for the
automated commercial environment computer system for each
fiscal year. The provisions require that the Customs Service
provide the Committee on Ways and Means and the Committee on
Finance of the Senate with a report demonstrating that the
computer system is being built in a cost-effective manner. In
addition, the provisions authorizes $170,829,000 for FY 2003
and $175,099,725 for FY 2004 for air and marine interdiction
operations of the Customs Service. The provision requires
submission of out-of-year budget projections to the Ways and
Means and Finance Committees.
Senate amendment
This provision authorizes $886,513,000 for FY 2003 and
$909,471,000 for FY 2004 for noncommercial operations of the
Customs Service. It also authorizes $1,603,482,000 for FY
2003 and $1,645,009,000 for FY 2004 for commercial operations
of the Customs Service. Of the amounts authorized for
commercial operations, $308,000,000 is authorized for the
automated commercial environment computer system for each
fiscal year. The provisions require that the Customs Service
provide the Committee on Ways and Means and the Committee on
Finance of the Senate with a report demonstrating that the
computer system is being built in a cost-effective manner. In
addition, the provisions authorizes $181,860,000 for FY 2003
and $186,570,000 for FY 2004 for air and marine interdiction
operations of the Customs Service. The provision requires
submission of out-of-year budget projections to the Ways and
Means and Finance Committees.
Conference agreement
The Senate recedes to House.
SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR
THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND
FLORIDA AND THE GULF COAST SEAPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
that $90,244,000 of the FY 2003 appropriations be available
until expended for acquisition and other expenses associated
with implementation and deployment of terrorist and narcotics
detection equipment along the United States-Mexico border,
the United States-Canada border, and Florida and the Gulf
seaports. The equipment would include vehicle and inspection
systems. The provision would require that $9,000,000 of the
FY 2004 appropriations be used for maintenance of equipment
described above. This section would also provide the
Commissioner of Customs with flexibility in using these funds
and would allow for the acquisition of new updated technology
not anticipated when this bill was drafted. Nothing in the
language of the bill is intended to prevent the Commissioner
of Customs from dedicating resources to specific ports not
identified in the bill.
The equipment would include vehicle and container
inspection systems, mobile truck x-rays, upgrades to fixed-
site truck x-rays, pallet x-rays, busters, contraband
detection kits, ultrasonic container inspection units,
automated targeting systems, rapid tire deflator systems,
portable Treasury Enforcement Communications Systems
terminals, remote surveillance camera systems, weigh-in-
motion sensors, vehicle counters, spotter camera systems,
inbound commercial truck transponders, narcotics vapor and
particle detectors, and license plate reader automatic
targeting software.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
Customs to measure specifically the effectiveness of the
resources dedicated in sections 312 as part of its annual
performance plan.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference Agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Child Cyber-Smuggling Center of the Customs Service
SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD
PORNOGRAPHY/CHILD SEXUAL EXPLOITATION
Present law
Customs enforcement responsibilities include enforcement of
U.S. laws to prevent border trafficking relating to child
pornography, intellectual property rights violations, money
laundering, and illegal arms. Funding for these activities
has been included in the Customs general account.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $10 million for Customs to carry out its program to
combat on-line child sex predators. Of that amount, $375,000
would be dedicated to the National Center for Missing
Children for the operation of its child pornography cyber
tipline.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 2--MISCELLANEOUS PROVISIONS
SEC. 331--AIDDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House earmarks $25
million and 285 new staff hires for Customs to use at the
U.S.-Canada border.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE
CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House requires
Customs to conduct a study of current personnel practices
including: performance standards; the effect and impact of
the collective bargaining process on Customs drug
interdiction efforts; and a comparison of duty rotations
policies of Customs and other federal agencies employing
similarly situated personnel.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING
PROCEDURES OF THE CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
Customs to conduct a study to ensure that appropriate
training is being provided to personnel who are responsible
for financial auditing of importers. Customs would
specifically report on how its audit personnel protect the
privacy and trade secrets of importers.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 334--establishment and implementation of cost accounting system;
reports
Present law,
No applicable section.
[[Page H5924]]
House amendment
H.R. 3009 as amended and passed by the House would mandate
the imposition of a cost accounting system in order for
Customs to effectively explain its expenditures. Such a
system would provide compliance with the core financial
system requirements of the Joint Financial Management
Improvement Program (JFMIP), which is a joint and cooperative
undertaking of the U.S. Department of the Treasury, the
General Accounting Office, the Office of Management and
Budget, and the Office of Personnel Management working in
cooperation with each other and other agencies to improve
financial management practices in government. That Program
has statutory authorization in the Budget and Accounting
Procedures Act of 1950 (31 U.S.C. 65).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 335--study and report relating to timeliness of prospective
rulings
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
the Comptroller General to prepare an report to determine
whether Customs has improved its timeliness in providing
prospective rulings.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 336--study and report relating to customs user fees
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
the Comptroller General to prepare a confidential report to
determine whether current user fees are appropriately set at
a level commensurate with the service provided for the fee.
The Comptroller General is authorized to recommend the
appropriate level for customs user fees.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 337--fees for customs inspections at express courier facilities
Present law
Current law provides for direct reimbursement by courier
facilities of expenses incurred by Customs conducting
inspections at those facilities.
House amendment
H.R. 3009 as amended and passed by the House would
establish a per item fee of sixty-six cents to cover Customs
expenses. This amount could be lowered to more than thirty-
five cents or raised to no more than $1.00 by the Secretary
of the Treasury after a rulemaking process to reevaluate the
expenses incurred by Customs in providing inspectional
services.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 338--national customs automation program
Present law,
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would empower
the Secretary to require the electronic submission of any
information required to be submitted to the Customs Service.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 339--authorization of appropriations for customs staffing
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment authorizes the appropriation to the
Department of Treasury such sums as may be necessary to
increase the annual pay of journeyman Customs inspectors and
Canine Enforcement Officers who have completed at least one
year of service and are being paid at a GS-9 level, from GS-9
to GS-11. The Senate provision also authorizes an increase in
pay of support staff.
Conference agreement
The House recedes to the Senate.
CHAPTER 4--ANTITERRORISM PROVISIONS
SEC. 341--Immunity for customs officers that act in good faith
Present law
Currently, Customs officers are entitled to qualified
immunity in civil suits brought by persons, who were searched
upon arrival in the United States. Qualified immunity
protects officers from liability if they can establish that
their actions did not violate any clearly established
constitutional or statutory rights.
House amendment
H.R. 3009 as amended and passed by the House would protect
Customs officers by providing them immunity from lawsuits
stemming from personal searches of people entering the
country so long as the officers conduct the searches in good
faith.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House, but conferees qualify the
provision by adding that the means used to effectuate such
searches must be reasonable. To be covered by this immunity
provision, inspectors must follow Customs Service inspection
rules including the rule against profiling against race,
religions, or ethnic background.
SEC. 342--emergency adjustments to offices, ports of entry, or staffing
of the customs service
Present law
Present law places numerous restrictions on and, in some
instances, precludes the Secretary of the Treasury or Customs
from making any adjustments to ports and staff. 19 U.S.C.
1318 requires a Presidential proclamation of an emergency and
authorization to the Secretary of the Treasury only to extend
the time for performance of legally required acts during an
emergency. No other emergency powers statute for Customs
exists.
House amendment
H.R. 3009 as amended and passed by the House would permit
the Secretary of the Treasury, if the President declares a
national emergency or if necessary to address specific
threats to human life or national interests, to eliminate,
consolidate, or relocate Customs ports and offices and to
alter staffing levels, services rendered and hours of
operations at those locations. In addition, the amendment
would permit the Commissioner of Customs, when necessary to
address threats to human life or national interests, to close
temporarily any Customs office or port or take any other
lesser action necessary to respond to the specific threat.
The Secretary or the Commissioner would be required to notify
Congress of any action taken under this proposal within 72
hours.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 343 & 343A--mandatory advanced electronic information for cargo
and passengers; secure systems of transportation.
Present law
Currently, commercial carriers bringing passengers or cargo
into or out of the country have no obligation to provide
Customs with such information in advance.
House amendment
H.R. 3009 as amended and passed by the House would require
every air, land, or water-based commercial carrier to file an
electronic manifest describing all passengers with Customs
before entering or leaving the country. There is a similar
requirement for cargo entering the country. Specific
information required in the advanced manifest system would be
developed by Treasury in regulations.
Senate amendment
The Senate Amendment is similar to the House Amendment.
However, with respect to cargo, the Senate Amendment applies
to out-bound as well as in-bound shipments.
Conference agreement
The conferees agree to direct the Secretary of the Treasury
to promulgate regulations pertaining to the electronic
transmission to the Customs Service of information relevant
to aviation, maritime, and surface transportation safety and
security prior to a cargo carrier's arrival in or departure
from the United States. The agreement sets forth parameters
for the Secretary to follow in developing these regulations.
For example, the parameters require that the regulations be
flexible with respect to the commercial and operational
aspects of different modes of transportation. They also
require that, in general, the Customs Service seek
information from parties most likely to have direct knowledge
of the information at issue. The conferees also agree to
amendment of the Tariff Act of 1930 to establish requirements
concerning proper documentation of ocean-bound cargo prior to
a vessel's departure. Finally, the conferees agree to direct
the Secretary of the Treasury to establish a task force to
evaluate, prototype and certify secure systems of
transportation.
SEC. 344--border search authority for certain contraband in outbound
mail.
Present law
Although Customs currently searches all inbound mail, and
although it searches outbound mail sent via private carriers,
outbound mail carried by the Postal Service is not subject to
search.
[[Page H5925]]
House amendment
H.R. 3009 as amended and passed by the House would enable
Customs officers to search outbound U.S. mail for unreported
monetary instruments, weapons of mass destruction, firearms,
and other contraband used by terrorists. However, reading of
mail would not be authorized absent Customs officers
obtaining a search warrant or consent.
Senate amendment
The Senate Amendment is the same as the House Amendment
with respect to mail weighing in excess of 16 ounces.
However, under the Senate Amendment, the Customs Service
would be required to obtain a warrant in order to search mail
weighing 16 ounces or less. The Senate Amendment also
requires the Secretary of State to determine whether it is
consistent with international law and U.S. treaty obligations
for the Customs Service to search mail transiting the United
States between two foreign countries. The Customs Service
would be authorized to search such mail only after the
Secretary of State determined that such measures are
consistent with international law and U.S. treaty
obligations.
Conference agreement
The House recedes to the Senate.
sec. 345--Authorization of appropriations for reestablishment of
Customs operations in New York City
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House authorizes
funds to reestablish those operations.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS
sec. 351--gao audit of textile transshipment monitoring by customs
service
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would direct
the Comptroller General to conduct an audit of the systems at
the Customs Service to monitor and enforce textile
transshipment. The Comptroller General would report on
recommendations for improvements.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
sec. 352--authorization of appropriations for textile transshipment
enforcement operations
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $9,500,000 for FY 2002 to the Customs Service for
the purpose of enhancing its textile transshipment
enforcement operations. This amount would be in addition to
Customs Service's base authorization and the authorization to
reestablish the destroyed textile monitoring and enforcement
operations at the World Trade Center.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The Senate recedes to the House, but the text is clarified
to provide that personnel will also conduct education and
outreach in addition to enforcement.
sec. 353--implementation of the african growth and opportunity act
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would earmark
approximately $1.3 million within Customs' budget for
selected activities related to providing technical assistance
to help sub-Saharan African countries develop and implement
effective visa and anti-transshipment systems as required by
the African Growth and Opportunity Act (title I of Public Law
106-200).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Office of the United States Trade Representative
sec. 361--authorization of appropriations
Present law
The statutory authority for budget authorization for the
Office of the United States Trade Representative is section
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)).
The most recent authorization of appropriations for USTR was
under section 101 of the Customs and Trade Act of 1990 [P.L.
101-382]. Under 19 U.S.C. 2171, Congress has adopted a two-
year authorization process to provide USTR with guidance as
it plans its budget as well as guidance from the Committee
for the appropriation process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$32,300,000 for FY 2003 and $31,108,000 for FY 2004. The
provision requires submission of out-of-year budget
projections to the Ways and Means and Finance Committees. In
light of the substantial increase in trade negotiation work
to be conducted by USTR and the associated need for
consultations with Congress, this provision would authorize
the addition of two individuals to assist the office of
Congressional Affairs.
Senate amendment
The Senate amendment authorizes $30,000,000 for FY 2003 and
$31,000,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle C--United States International Trade Commission
sec. 371--authorization of appropriations
Present law
The statutory authority for budget authorization for the
International Trade Commission is section 330(e)(2)(A) of the
Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent
authorization of appropriations for the ITC was under section
101 of the Customs and Trade Act of 1990 [P.L. 101-382].
Under 19 U.S.C. 1330, Congress has adopted a two-year
authorization process to provide the ITC with guidance as it
plans its budget as well as guidance from the Committees for
the appropriation process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$54,000,000 for FY 2003 and $57,240,000 for FY 2004. The
provision requires submission of out-of-year budget
projections to the Ways and Means and Finance Committees.
Senate amendment
The Senate amendment authorizes $51,400,000 for FY 2003 and
$53,400,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle D--Other Trade Provisions
sec. 381. increase in aggregate value of articles exempt from duty
acquired abroad by united states residents
Present law
The Harmonized Tariff Schedule at subheading 9804.00.65
currently provides a $400 duty exemption for travelers
returning from abroad.
House amendment
H.R. 3009 as amended and passed by the House would
increased the current $400 duty exemption to $800.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
sec. 382--regulatory audit procedures
Present law
Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509)
provides the authority for Customs to audit persons making
entry of merchandise into the U.S. In the course of such
audit, Customs auditors may identify discrepancies, including
underpayments of duties. However, if there also are
overpayments, there is no requirement that such overpayments
be offset against the underpayments if the underlying entry
has been liquidated.
House amendment
H.R. 3009 as amended and passed by the House would require
that when conducting an audit, Customs must recognize and
offset overpayments and overdeclarations of duties,
quantities and values against underpayments and
underdeclarations. As an example, if during an audit Customs
finds that an importer has underpaid duties associated with
one entry of merchandise by $100 but has also overpaid duties
from another entry of merchandise by $25, then any assessment
by Customs must be the difference of $75.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
sec. 383--payment of duties and fees
Present law
Current law at 19 U.S.C. 1505 provides for the collection
of duties by the Secretary through regulatory process.
House amendment
H.R. 3009 as amended and passed by the House would require
duties to be paid within 10 working days without extension.
The bill also provides for the Customs Service to create a
monthly billing system upon the building of the Automated
Commercial Environment.
Senate amendment
No provision.
[[Page H5926]]
Conference agreement
Senate recedes to the House.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
sec. 2101--short title and findings
Present law
No provision.
House amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2001.'' Section 2101 of the House
amendment to H.R. 3009 states that Congress finds the
expansion of international trade is vital to U.S. national
security and economic growth, as well as U.S. leadership.
Section 2101 also states that the recent pattern of decisions
by dispute settlement panels and the Appellate Body of the
World Trade Organization to impose obligations and
restrictions on the use of antidumping and countervailing
measures by WTO members has raised concerns, and Congress is
concerned that such bodies appropriately apply the standard
of review contained in Article 17.6 of the Antidumping
Agreement, to provide deference to a permissible
interpretation by a WTO member and to the evaluation by a
member of the facts where that evaluation is unbiased and
objective and the establishment of the facts is proper.
Senate amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2002.'' Section 2101 of the Senate
amendment to H.R. 3009 states that Congress finds the
expansion of international trade is vital to U.S. national
security and economic growth, as well as U.S. leadership.
Section 2101 also states that support for continued trade
expansion requires that dispute settlement procedures under
international trade agreements not add to or diminish the
rights and obligations provided in such agreements. It goes
on to note a troubling pattern of cases before WTO dispute
settlement panels and the WTO Appellate Body that do
precisely that.
Conference agreement
The Senate recedes to the House with modifications. With
respect to the findings, the Conferees believe that, as
stated in section 2101(b) of the Conference agreement,
support for continued trade expansion requires that dispute
settlement procedures under international trade agreements
not add to or diminish the rights and obligations provided in
such agreements. Therefore, the recent pattern of decisions
by dispute settlement panels and the WTO Appellate Body to
impose obligations and restrictions on the use of
antidumping, countervailing and safeguard measures by WTO
members has raised concerns, and Congress is concerned that
such bodies appropriately apply the standard of review
contained in Article 17.6 of the Antidumping Agreement, to
provide deference to a permissible interpretation by a WTO
member and to the evaluation by a member of the facts where
that evaluation is unbiased and objective and the
establishment of the facts is proper.
sec. 2102--trade negotiating objectives
Present/expired law
Section 1101(a) of the Omnibus Trade and Competitiveness
Act of 1988 (the 1988 Act) set forth overall negotiating
objectives for concluding trade agreements. These objectives
were to obtain more open, equitable, and reciprocal market
access, the reduction or elimination of barriers and other
trade-distorting policies and practices, and a more effective
system of international trading disciplines and procedures.
Section 1102(b) set forth the following principal trade
negotiating objectives: dispute settlement, transparency,
developing countries, current account surpluses, trade and
monetary coordination, agriculture, unfair trade practices,
trade in services, intellectual property, foreign direct
investment, safeguards, specific barriers, worker rights,
access to high technology, and border taxes.
House amendment
Section 2102 of the House amendment to H.R. 3009 would
establish the following overall negotiating objectives:
obtaining more open, equitable, and reciprocal market access;
obtaining the reduction or elimination of barriers and other
trade-distorting policies and practices; further
strengthening the system of international trading disciplines
and procedures, including dispute settlement; fostering
economic growth and full employment in the U.S. and the
global economy; ensuring that trade and environmental
policies are mutually supportive and seeking to protect and
preserve the environment and enhance the international means
of doing so, while optimizing the use of the world's
resources; promoting respect for worker rights and the rights
of children consistent with International Labor Organization
core labor standards, as defined in the bill; and seeking
provisions in trade agreements under which parties strive to
ensure that they do not weaken or reduce the protections
afforded in domestic environmental and labor laws as an
encouragement to trade.
In addition, section 2102 would establish the principal
trade negotiating objectives for concluding trade agreements,
as follows:
Trade barriers and distortions: expanding competitive
market opportunities for U.S. exports and obtaining fairer
and more open conditions of trade by reducing or eliminating
tariff and nontariff barriers and policies and practices of
foreign governments directly related to trade that decrease
market opportunities for U.S. exports and distort U.S. trade;
and obtaining reciprocal tariff and nontariff barrier
elimination agreements, with particular attention to products
covered in section 111(b) of the Uruguay Round Agreements
Act.
Services: to reduce or eliminate barriers to international
trade in services, including regulatory and other barriers,
that deny national treatment or unreasonably restrict the
establishment or operations of services suppliers.
Foreign investment: to reduce or eliminate artificial or
trade-distorting barriers to trade-related foreign investment
and, recognizing that U.S. law on the whole provides a high
level of protection for investment, consistent with or
greater than the level required by international law, to
secure for investors important rights comparable to those
that would be available under U.S. legal principles and
practice, by:
reducing or eliminating exceptions to the principle of
national treatment;
freeing the transfer of funds relating to investments;
reducing or eliminating performance requirements, forced
technology transfers, and other unreasonable barriers to the
establishment and operation of investments;
seeking to establish standards for expropriation and
compensation for expropriation, consistent with United States
legal principles and practice;
providing meaningful procedures for resolving investment
disputes including between an investor and a government;
seeking to improve mechanisms used to resolve disputes
between an investor and a government through mechanisms to
eliminate frivolous claims and procedures to ensure the
efficient selection of arbitrators and the expeditious
disposition of claims;
providing an appellate or similar review mechanism to
correct manifestly erroneous interpretations of law; and
ensuring the fullest measure of transparency in investment
disputes by ensuring that all requests for dispute settlement
and all proceedings, submissions, findings, and decisions are
promptly made public;
all hearings are open to the public; and
establishing a mechanism for acceptance of amicus curiae
submissions.
Intellectual property: including: promoting adequate and
effective protection of intellectual property rights through
ensuring accelerated and full implementation of the Agreement
on Trade-Related Aspects of Intellectual Property Rights,
including strong enforcement;
providing stronger protection for new and emerging
technologies and new methods of transmitting and distributing
products embodying intellectual property; and
ensuring that standards of protection and enforcement keep
pace with technological developments, and in particular
ensuring that Tight holders have the legal and technological
means to control the use of their works through the internet
and other global communication media.
Transparency: to increase public access to information
regarding trade issues as well as the activities of
international trade institutions; to increase openness in
international trade fora, including the WTO, by increasing
public access to appropriate meetings, proceedings, and
submissions, including with regard to dispute settlement and
investment; and to increase timely public access to
notifications made by WTO member states and the supporting
documents.
Anti-corruption: to obtain high standards and appropriate
enforcement mechanisms applicable to persons from all
countries participating in a trade agreement that prohibit
attempts to influence acts, decisions, or omissions of
foreign government; and to ensure that such standards do not
place U.S. persons at a competitive disadvantage in
international trade.
Improvement of the WTO and multilateral trade agreements:
to achieve full implementation and extend the coverage of the
WTO and such agreements to products, sectors, and conditions
of trade not adequately covered; and to expand country
participation in and enhancement of the Information
Technology Agreement (ITA) and other trade agreements.
Regulatory practices: to achieve increased transparency and
opportunity for the participation of affected parties in the
development of regulations; to require that proposed
regulations be based on sound science, cost-benefit analysis,
risk assessment, or other objective evidence; to establish
consultative mechanisms among parties to trade agreements to
promote increased transparency in developing guidelines,
rules, regulations, and laws for government procurement and
other regulatory regimes; and to achieve the elimination of
government measures such as price controls and reference
pricing which deny full market access for United States
products.
Electronic commerce: to ensure that current obligations,
rules, disciplines, and commitments under the WTO apply to
electronic commerce; to ensure that electronically delivered
goods and services receive no less favorable treatment under
trade rules and commitments than like products delivered in
physical form; and the classification of such goods and
services ensures the most liberal trade treatment possible;
to ensure that governments refrain from implementing trade-
related measures that impede electronic
[[Page H5927]]
commerce; where legitimate policy objectives require domestic
regulations that affect electronic commerce, to obtain
commitments that any such regulations are the least
restrictive on trade, nondiscriminatory, and transparent, and
promote an open market environment; and to extend the
moratorium of the WTO on duties on electronic transmissions.
Agriculture: to ensure that the U.S. trade negotiators duly
recognize the importance of agricultural issues; to obtain
competitive market opportunities for U.S. exports in foreign
markets substantially equivalent to the competitive
opportunities afforded foreign exports in U.S. markets and to
achieve fairer and more open conditions of trade; to reduce
or eliminate trade distorting subsidies; to impose
disciplines on the operations of state-trading enterprises or
similar administrative mechanisms; to eliminate unjustified
restrictions on products derived from biotechnology; to
eliminate sanitary or phytosanitary restrictions that
contravene the Uruguay Round Agreement as they are not based
on scientific principles and to improve import relief
mechanisms to accommodate the unique aspects of perishable
and cyclical agriculture.
Labor and the environment: to ensure that a party does not
fail to effectively enforce its environmental or labor laws,
through a sustained or recurring course of action or
inaction, in a manner affecting trade between the United
States and that party; to recognize that a party to a trade
agreement is effectively enforcing its laws if a course of
inaction or inaction reflects a reasonable exercise of
discretion or results from a bona fide decision regarding
allocation of resources and no retaliation may be authorized
based on the exercise of these rights or the right to
establish domestic labor standards and levels of
environmental protection; to strengthen the capacity of U.S.
trading partners to promote respect for core labor standards
and to protect the environment through the promotion of
sustainable development; to reduce or eliminate government
practices or policies that unduly threaten sustainable
development; to seek market access for U.S. environmental
technologies, goods, and services; and to ensure that labor,
environmental, health, or safety policies and practices of
parties to trade agreements do not arbitrarily or
unjustifiably discriminate against U.S. exports or serve as
disguised barriers to trade.
Dispute settlement and enforcement: to seek provisions in
trade agreements providing for resolution of disputes between
governments in an effective, timely, transparent, equitable,
and reasoned manner requiring determinations based on facts
and the principles of the agreement, with the goal of
increasing compliance; seek to strengthen the capacity of the
WTO Trade Policy Review Mechanism to review compliance; seek
provisions encouraging the early identification and
settlement of disputes through consultations; seek provisions
encouraging trade-expanding compensation; seek provisions to
impose a penalty that encourages compliance, is appropriate
to the parties, nature, subject matter, and scope of the
violation, and has the aim of not adversely affecting parties
or interests not party to the dispute while maintaining the
effectiveness of the enforcement mechanism; and seek
provisions that treat U.S. principal negotiating objectives
equally with respect to ability to resort to dispute
settlement and availability of equivalent procedures and
remedies.
Extended WTO negotiations: concerning extended WTO
negotiations on financial services, civil aircraft, and rules
of origin.
Senate amendment
The Senate Amendment is substantially similar to the House
Amendment, with the exception of several key provisions:
Small Business: The Senate Amendment contains an overall
negotiating objective ``to ensure that trade agreements
afford small businesses equal access to international
markets, equitable trade benefits, expanded export market
opportunities, and provide for the reduction or elimination
of trade barriers that disproportionately impact small
businesses.''
Trade in Motor Vehicles and Parts: The Senate Amendment
contains a principal negotiating objective on expanding
competitive opportunities for exports of U.S. motor vehicles
and parts.
Foreign Investment: The Senate Amendment states as an
objective of the United States in the context of investor-
state dispute settlement ``ensuring that foreign investors in
the United States are not accorded greater rights than United
States investors in the United States.'' The Senate
Amendment's objective with respect to investor-state dispute
settlement also differs from the House Amendment in the
following respects:
It sets as an objective ``seeking to establish standards
for fair and equitable treatment consistent with United
States legal principles and practice, including the principle
of due process.''
It sets deterrence of the filing of frivolous claims as an
objective, in addition to the prompt elimination of frivolous
claims.
The Senate Amendment seeks to establish ``procedures to
enhance opportunities for public input into the formulation
of government positions.''
The Senate Amendment seeks to establish a single appellate
body to review decisions by arbitration panels in investor-
state dispute settlement cases. Also, unlike the House
Amendment, the Senate Amendment does not prescribe a standard
of review for an eventual appellate body.
Intellectual Property: The Senate Amendment contains an
objective to respect the Declaration on the TRIPS Agreement
and Public Health, adopted by the World Trade Organization at
the Fourth Ministerial Conference at Doha, Qatar on November
14, 2001 ``
Trade in Agriculture: The Senate Amendment's negotiating
objective on export subsidies differs from the House
Amendment, stating that an objective of the United States is
``seeking to eliminate all export subsidies on agricultural
commodities while maintaining bona fide food aid and
preserving U.S. agriculture development and export credit
programs that allow the U.S. to compete with other foreign
export promotion efforts.'' The Senate Amendment also
provides that it is a negotiating objective of the United
States to ``strive to complete a general multilateral round
in the WTO by January 1, 2005, and seek the broadest market
access possible in multilateral, regional, and bilateral
negotiations, recognizing the effect that simultaneous sets
of negotiations may have on US import-sensitive commodities
(including those subject to tariff-rate quotas).''
Human Rights and Democracy : The Senate Amendment contains
a negotiating objective ``to obtain provisions in trade
agreements that require parties to those agreements to strive
to protect internationally recognized civil, political, and
human rights.''
Dispute Settlement: The Senate Amendment contains a
negotiating objective absent in the House Amendment ``to seek
improved adherence by panels convened under the WTO
Understanding on Rules and Procedures Governing the
Settlement of Disputes and by the WTO Appellate Body to the
standard of review applicable under the WTO Agreement
involved in the dispute, including greater deference, where
appropriate, to the fact finding and technical expertise of
national investigating authorities.''
Border Taxes: The Senate Amendment contains an objective
absent from the House Amendment on border taxes. The
objective seeks ``to obtain a revision of the WTO rules with
respect to the treatment of border adjustments for internal
taxes to redress the disadvantage to countries relying
primarily on direct taxes for revenue rather than indirect
taxes.'' The objective is addressed to a decision by the WTO
Dispute Settlement Body holding the foreign sales corporation
provisions of the Internal Revenue Code to be inconsistent
with WTO rules.
Textiles: The Senate Amendment contains an extensive
objective on opening foreign markets to U.S. textile exports.
There is no similar provision in the House Amendment.
Worst Forms of Child Labor: The Senate Amendment contains a
negotiating objective to prevent distortions in the conduct
of international trade caused by the use of the worst forms
of child labor and to redress unfair and illegitimate
competition based upon the use of the worst forms of child
labor.
Conference agreement
The Senate recedes to the House with several modifications.
With respect to the overall negotiating objectives, the
Conferees agree to the overall negotiating objective
regarding small business in section 2101-(a)(8) of the Senate
amendment. Second, the Conferees agree to an overall
negotiating objective to promote universal compliance with
ILO Declaration 182 concerning the worst forms of child
labor.
With respect to the principal negotiating objectives, the
Conferees agree to expand the negotiating objective on
intellectual property to respect the Declaration on the TRIPS
Agreement and Public Health, adopted by the WTO at Doha
(section 2102(b)(4)(c) of the Senate amendment).
With respect to the principal negotiating objectives
regarding foreign investment, the Conferees believe that it
is a priority for negotiators to seek agreements protecting
the rights of U.S. investors abroad and ensuring the
existence of a neutral investor-state dispute settlement
mechanism. At the same time, these protections must be
balanced so that they do not come at the expense of making
Federal, State and local laws and regulations more vulnerable
to successful challenges by foreign investors than by
similarly situated U.S. investors.
No Greater Rights: The House recedes to the Senate with a
technical modification to clarify that foreign investors in
the United States are not accorded greater substantive rights
with respect to investment protections than United States
investors in the United States. That is, the reciprocal
obligations regarding investment protections that the United
States undertakes in pursuing its goals should not result in
foreign investors being entitled to compensation for
government actions where a similarly situated U.S. investor
would not be entitled to any form of relief, while ensuring
that U.S. investors abroad can challenge host government
measures which violate the terms of the investment agreement.
Thus, this language expresses Congress' direction that the
substantive investment protections (e.g., expropriation, fair
and equitable treatment, and full protection and security)
should be consistent with United States legal principles and
practice and not provide greater rights to foreign investors
in the United States.
[[Page H5928]]
This language applies to substantive protections only and
is not applicable to procedural issues, such as access to
investor-state dispute settlement. The Conferees recognize
that the procedures for resolving disputes between a foreign
investor and a government may differ from the procedures for
resolving disputes between a domestic investor and a
government and may be available at different times during the
dispute. Thus, the ``no greater rights'' direction does not,
for instance, apply to such issues as the dismissal of
frivolous claims, the exhaustion of remedies, access to
appellate procedures, or other similar issues.
The Conferees also agree that negotiators should seek to
provide for an appellate body or similar mechanism to provide
coherence to the interpretations of investment provisions in
trade agreements.
With respect to the principal negotiating objective on
agriculture, the Conferees agree to section
2102(b)(10)(A)(iii) and (xv) of the House amendment, in lieu
of section 2102(b)(10)(A)(iii) of the Senate amendment. The
Conferees also accept section 2102(b)(10)(A)(xvi) of the
Senate amendment on the timing and sequence of WTO
agriculture negotiations relative to other negotiations.
The Conferees agree to section 2102(b)(13)(C) of the Senate
amendment, relating to dispute settlement in dumping,
subsidy, and safeguard cases, as modified, to seek adherence
by WTO panels to the applicable standard of review.
The Conferees recognize the importance of preserving the
ability of the United States to enforce rigorously its trade
remedy laws, including the antidumping, countervailing duty
and safeguard laws. Because this issue is significant to many
Members of Congress in both the House and Senate, the
Conferees have made this priority a principal negotiating
objective. Negotiators must also avoid agreements that lessen
the effectiveness of domestic and international disciplines
on unfair trade, as well as domestic and international
safeguard provisions. In addition, section 2102(b)(14)(B)
directs the President to address and remedy market
distortions that lead to dumping and subsidization, including
overcapacity, cartelization, and market-access barriers.
The Conferees agree to section 2012(b)(14) of the Senate
amendment stating that the United States should seek a
revision of WTO rules on the treatment of border adjustments
for internal taxes to redress the disadvantage to countries
relying primarily on direct taxes for revenue rather than
indirect taxes. The Conferees agree that such a revision of
WTO rules is one among other options for the United States,
including domestic legislation, to redress such a
disadvantage.
The Conferees agree to include as a principal negotiating
objective to obtain competitive market opportunities for U.S.
exports of textiles substantially equivalent to those for
foreign textiles in the United States.
The Conferees agree to a principal negotiating objective
concerning the worst forms of child labor, to seek
commitments by trade agreement parties to vigorously enforce
their own laws prohibiting the worst forms of child labor.
sec. 2102(c)--promotion of certain priorities
Present/expired law
No provision.
House amendment
Section 2102(c) of the House amendment to H.R. 3009 sets
forth certain priorities for the President to address. These
provisions include seeking greater cooperation between WTO
and the ILO; seeking to establish consultative mechanisms
among parties to trade agreements to strengthen the capacity
of U.S. trading partners to promote respect for core labor
standards, seeking to seek to establish consultative
mechanisms among parties to trade agreements to strengthen
the capacity of U.S. trading partners to develop and
implement standards for environment and human health based
on sound science; conducting environmental reviews of
future trade and investment agreements, consistent with
Executive Order 13141 and its relevant guidelines;
reviewing the impact of future trade agreements on U.S.
employment, modeled after Executive Order 13141; taking
into account, in negotiating trade agreements, protection
of legitimate health or safety, essential security, and
consumer interests; requiring the Secretary of Labor to
consult with foreign parties to trade negotiations as to
their labor laws and providing technical assistance where
needed; reporting to Congress on the extent to which
parties to an agreement have in effect laws governing
exploitative child labor; preserving the ability of the
United States to enforce rigorously its trade laws,
including antidumping and countervailing duty laws, and
avoiding agreements which lessen their effectiveness;
ensuring that U.S. exports are not subject to the abusive
use of trade laws, including antidumping and
countervailing duty laws, by other countries; continuing
to promote consideration of Multilateral Environmental
Agreements (MEAs) and consulting with parties to such
agreements regarding the consistency of any MEA that
includes trade measures with existing environmental
exceptions under Article XX of the GATT.
In addition, USTR, twelve months after the imposition of a
penalty or remedy by the United States permitted by an
agreement to which this Act applies, is to report to the
Committee on the effectiveness of remedies applied under U.S.
law to enforce U.S. rights under trade agreements. USTR shall
address whether the remedy was effective in changing the
behavior of the targeted party and whether the remedy had any
adverse impact on parties or interests not party to the
dispute.
Finally, section 2102(c) would direct the President to seek
to establish consultative mechanisms among parties to trade
agreements to examine the trade consequences of significant
and unanticipated currency movements and to scrutinize
whether a foreign government engaged in a pattern of
manipulating its currency to promote a competitive advantage
in international trade.
Senate amendment
With several notable exceptions, the priorities set forth
in section 2102(c) of the Senate Amendment are identical to
the priorities set forth in the House Amendment. The
exceptions are:
With respect to the study that the President must perform
on the impact of future trade agreements on employment, the
Senate Amendment requires the President to examine particular
criteria, as follows: the impact on job security, the level
of compensation of new jobs and existing jobs, the
displacement of employment, and the regional distribution of
employment, utilizing experience from previous trade
agreements and alternative models of employment analysis. The
Senate Amendment also requires that the report be made
available to the public.
The Senate Amendment requires that, in connection with new
trade agreement negotiations, the President shall ``submit to
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
meaningful labor rights report of the country, or countries,
with respect to which the President is negotiating.''
The Senate Amendment adds to the House Amendment priority
on preserving the ability of the United States to enforce
vigorously its trade laws, by including U.S. ``safeguards''
law in the list of laws at issue. This is the U.S. law
authorizing the President to provide relief to parties
seriously injured or threatened with serious injury due to
surges of imports. The priority in the Senate Amendment also
directs the President to remedy certain market distorting
measures that underlie unfair trade practices.
Cconference agreement
The Senate recedes to the House amendment with several
modifications. With respect to the worst forms of child
labor, the Conferees agree to expand section 2102(c)(2) of
the House amendment to include the worst forms of child labor
within requirement to seek to establish consultative
mechanisms to strengthen the capacity of U.S. trading
partners to promote respect for core labor standards.
The Conferees agree to modify section 2105(c)(5) of the
House amendment to require the President to report on impact
of future trade agreements on US employment, including on
labor markets, modeled after E.O. 13141 to the extent
appropriate in establishing procedures and criteria, and to
make the report public.
With respect to the labor rights report in section
2102(c)(8) of both bills, the Conferees agree to the Senate
provision. Furthermore, the Conferees agree to section
2107(b)(2)(E) of the Senate amendment to require that
guidelines for the Congressional Oversight Group include the
time frame for submitting this report.
sec. 2102(d)--consultations, adherence to obligations under uruguay
round agreements
Present/expired law
No provision.
House amendment
Section 2102(d) of the House amendment to H.R. 3009
requires that USTR consult closely and on a timely basis with
the Congressional Oversight Group appointed under section
2107. In addition, USTR would be required to consult
closely (including immediately before the initialing of an
agreement) with the congressional advisers on trade policy
and negotiations appointed under section 161 of the Trade
Act of 1974, as well as the House Committee on Ways and
Means, the Senate Committee on Finance, and the
Congressional Oversight Group. With regard to negotiations
concerning agriculture trade, USTR would also be required
to consult with the House and Senate Committees on
Agriculture.
In determining whether to enter into negotiations with a
particular country, section 2102(e) would require the
President to take into account whether that country has
implemented its obligations under the Uruguay Round
Agreements.
Senate amendment
Section 2102(d) of the Senate amendment is identical to the
House provision in the House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2103--TRADE AGREEMENTS AUTHORITY
Present/expired law
Tariff proclamation authority. Section 1102(a) of the 1988
Act provided authority to the President to proclaim
modifications in duties without the need for Congressional
approval, subject to certain limitations. Specifically, for
rates that exceed 5 percent ad
[[Page H5929]]
valorem, the President could not reduce any rate of duty to a
rate less than 50 percent of the rate of duty applying on the
date of enactment. Rates at or below 5 percent could be
reduced to zero. Any duty reduction that exceeded 50 percent
of an existing duty higher than 5 percent or any tariff
increase had to be approved by Congress.
Staging authority required that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that
staging was not required if the International Trade
Commission determined there was no U.S. production of that
article.
Negotiation of bilateral agreements. Section 1102(c) of the
1988 Act set forth three requirements for the negotiation of
a bilateral agreement:
The foreign country must request the negotiation of the
bilateral agreement;
The agreement must make progress in meeting applicable U.S.
trade negotiating objectives; and
The President must provide written notice of the
negotiations to the Committee on Ways and Means and the
Committee on Finance of the Senate and consult with these
committees.
The negotiations could proceed unless either Committee
disapproved the negotiations within 60 days prior to the 90
calendar days advance notice required of entry into an
agreement (described below).
Negotiation of multilateral non-tariff agreements. With
respect to multilateral agreements, section 1102(b) of the
1988 Act provided that whenever the President determines that
any barrier to, or other distortion of, international trade
unduly burdens or restricts the foreign trade of the United
States or adversely affects the U.S. economy, or the
imposition of any such barrier or distortion is likely to
result in such a burden, restriction, or effect, he may enter
into a trade agreement with the foreign countries involved.
The agreement must provide for the reduction or elimination
of such barrier or other distortion or prohibit or limit the
imposition of such a barrier or distortion.
Provisions qualifying for fast track procedures. Section
1103(b)(1)(A) of the 1988 Act provided that fast track apply
to implementing bills submitted with respect to any trade
agreements entered into under the statute. Section 151(b)(1)
of the Trade Act of 1974 further defined ``implementing
bill'' as a bill containing provisions ``necessary or
appropriate'' to implement the trade agreement, as well as
provisions approving the agreement and the statement of
administrative action.
Time period. The authority applied with respect to
agreements entered into before June 1, 1991, and until June
1, 1993 unless Congress passed an extension disapproval
resolution. The authority was then extended to April 15,
1994, to cover the Uruguay Round of multilateral negotiations
under the General Agreement on Tariffs and Trade.
House amendment
Section 2103 of the House amendment provides:
Proclamation authority. Section 2103(a) would provide the
President the authority to proclaim, without Congressional
approval, certain duty modifications in a manner very similar
to the expired provision. Specifically, for rates that exceed
5 percent ad valorem, the President would not be authorized
to reduce any rate of duty to a rate less than 50 percent of
the rate of duty applying on the date of enactment. Rates
at or below 5 percent ad valorem could be reduced to zero.
Any duty reduction that exceeded 50 percent of an existing
duty higher than 5 percent or any tariff increase would
have to be approved by Congress.
In addition, section 2103(a) would not allow the use of
tariff proclamation authority on import sensitive
agriculture.
Staging authority would require that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that
staging would not be required if the International Trade
Commission determined there is no U.S. production of that
article.
These limitations would not apply to reciprocal agreements
to eliminate or harmonize duties negotiated under the
auspices of the World Trade Organization, such as so-called
``zero-for-zero'' negotiations.
Agreements on tariff and non-tariff barriers. Section
2103(b)(1) would authorize the President to enter into a
trade agreement with a foreign country whenever he determined
that any duty or other import restriction or any other
barrier to or distortion of international trade unduly
burdens or restricts the foreign trade of the United States
or adversely affects the U.S. economy, or the imposition of
any such barrier or distortion is likely to result in such a
burden, restriction, or effect. The agreement must provide
for the reduction or elimination of such barrier or other
distortion or prohibit or limit the imposition of such a
barrier or distortion. No distinction would be made between
bilateral and multilateral agreements.
Conditions. Section 2103(b)(2) would provide that the
special implementing bills procedures may be used only if the
agreement makes progress in meeting the applicable objectives
set forth in section 2102(a) and (b) and the President
satisfies the consultation requirements set forth in section
2104.
Bills qualifying for trade authorities procedures. Section
2103(b)(3)(A) would provide that bills implementing trade
agreements may qualify for trade promotion authority TPA
procedures only if those bills consist solely of the
following provisions:
Provisions approving the trade agreement and statement of
administrative action; and
Provisions necessary or appropriate to implement the trade
agreement.
Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C) would
extend trade promotion authority to agreements entered into
before June 1, 2005. An extension until June 1, 2007, would
be permitted unless Congress passed a disapproval resolution,
as described under section 2103(c).
Senate amendment
In most respects, section 2103 of the Senate Amendment is
identical to section 2103 of the House Amendment. However,
there are several key differences, as follows:
The Senate Amendment limits the President's proclamation
authority with respect to ``import sensitive agricultural
products,'' a term defined in section 2113(5) of the Senate
Amendment. This limitation differs from the limitation in the
House Amendment, inasmuch as it includes certain products
subject to tariff rate quotas.
The Senate Amendment contains a provision making a trade
agreement implementing bill ineligible for ``fast track''
procedures if the bill modifies, amends, or requires
modification or amendment to certain trade remedy laws. A
bill that does modify, amend or require modification or
amendment to those laws is subject to a point of order in the
Senate, which may be waived by a majority vote.
The Senate Amendment requires the U.S. International Trade
Commission to submit a report to Congress on negotiations
during the initial period for which the President is granted
trade promotion authority. This report would be made in
connection with a request by the President to have such
authority extended.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to the new definition of
import sensitive agriculture in section 2103(a)(2)(B),
2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to
encompass products subject to tariff rate quotas, as well as
products subject to the lowest tariff reduction in the
Uruguay Round.
The Conferees agree to section 2103(c)(3)(B) of the Senate
amendment, which requires the ITC to submit a report to
Congress by May 1, 2005 (if the President seeks extension of
TPA until June 2, 2007) analyzing the economic impact on the
United States of all trade agreements implemented between
enactment and the extension request.
SEC. 2104--CONSULTATIONS AND ASSESSMENT
Present/expired law
Section 102 of the Trade Act of 1974 and sections 1102(d)
and 1103 of the 1988 Act set forth the fast track
requirements. These provisions required the President, before
entering into any trade agreement, to consult with Congress
as to the nature of the agreement, how and to what extent the
agreement will achieve applicable purposes, policies, and
objectives, and all matters relating to agreement
implementation. In addition, before entering into an
agreement, the President was required to give Congress at
least 90 calendar days advance notice of his intent. The
purpose of this period was to provide the Congressional
Committees of jurisdiction an opportunity to review the
proposed agreement before it was signed.
Section 135(e) of the Trade Act of 1974 required that the
Advisory Committee for Trade Policy and Negotiations meet at
the conclusion of negotiations for each trade agreement and
provide a report as to whether and to what extent the
agreement promotes the economic interests of the United
States and achieves the applicable overall and principal
negotiating objectives of section 1101 of the 1988 Act. The
report was due not later than the date on which the President
notified Congress of his intent to enter into an agreement.
With regard to the Uruguay Round, the report was due 30 days
after the date of notification.
House amendment
Section 2104 of the House amendment to H.R. 3009 would
establish a number Of requirements that the President consult
with Congress. Specifically, section 2104(a)(1) would require
the President to provide written notice and consult with the
relevant committees at least 90 calendar days prior to
entering into negotiations. Section 2104(a)(c) also provides
that President shall meet with the Congressional Oversight
Group established under section 2107 upon a request of a
majority of its members. Trade promotion authority would not
apply to an implementing bill if both Houses separately agree
to a procedural disapproval resolution within any 60-day
period stating that the Administration has failed to notify
or consult with Congress.
Section 2104(b)(1) would establish a special consultation
requirement for agriculture. Specifically, before initiating
negotiations concerning tariff reductions in agriculture, the
President is to assess whether U.S. tariffs on agriculture
products that were bound under the Uruguay Round Agreements
are lower than the tariffs bound by that country. In his
assessment, the President would also be required to consider
whether the tariff levels bound and applied throughout the
world with respect to imports from the United States are
higher than U.S. tariffs and whether the negotiation provides
an opportunity to address any such disparity. The
[[Page H5930]]
President would be required to consult with the Committees on
Ways and Means and Agriculture of the House and the
Committees on Finance and Agriculture, Nutrition and Forestry
of the Senate concerning the results of this assessment and
whether it is appropriate for the United States to agree to
further tariff reductions under such circumstances and how
all applicable negotiating objectives would be met.
Section 2104(b)(2) provides special consultations on import
sensitive agriculture products. Specifically, before
initiating negotiations on agriculture and as soon as
practicable with respect to the Free Trade Area of the
Americas and WTO negotiations, USTR is to identify import
sensitive agriculture products and consult with the
Committees on Ways & Means and Agriculture of the House and
the Committees on Finance and Agriculture, Nutrition, and
Forestry in the Senate concerning whether any further tariff
reduction should be appropriate, and whether the identified
products face unjustified sanitary or phytosanitary barriers.
USTR is also to request that the International Trade
Commission prepare an assessment of the probable economic
effects of any such tariff reduction on the U.S. industry
producing the product and on the U.S. economy as a whole.
USTR is to then notify the Committees of those products for
which it intends to seek tariff liberalization as well as the
reasons. If USTR commences negotiations and then identifies
additional import sensitive agriculture products, or a party
to the negotiations requests tariff reductions on such a
product, then USTR shall notify the Committees as soon as
practicable of those products and the reasons for seeking
tariff reductions.
Section 2104(c) would establish a special consultation
requirement for textiles. Specifically, before initiating
negotiations concerning tariff reductions in textiles and
apparel, the President is to assess whether U.S. tariffs on
textile and apparel products that were bound under the
Uruguay Round Agreements are lower than the tariffs bound by
that country. In his assessment, the President would also be
required to consider whether the tariff levels bound and
applied throughout the world with respect to imports from the
United States are higher than U.S. tariffs and whether the
negotiation provides an opportunity to address any such
disparity. The President would be required to consult with
the Committee on Ways and Means of the House and the
Committee on Finance of the Senate concerning the results of
this assessment and whether it is appropriate for the United
States to agree to further tariff reductions under such
circumstances and how all applicable negotiating objectives
would be met.
In addition, section 2104(d) would require the President,
before entering into any trade agreement, to consult with the
relevant Committees concerning the nature of the agreement,
how and to what extent the agreement will achieve the
applicable purposes, policies, and objectives set forth in
the House amendment to H.R. 3009 and all matters relating to
implementation under section 2105, including the general
effect of the agreement on U.S. laws.
Section 2104(e) would require that the report of the
Advisory Committee for Trade Policy and Negotiations under
section 135(e)(1) of the Trade Act of 1974 be provided not
later than 30 days after the date on which the President
notifies Congress of his intent to enter into the agreement
under section 2105(a)(1)(A).
Finally, section 2104(f) would require the President, at
least 90 days before entering into a trade agreement, to ask
the International Trade Commission to assess the agreement,
including the likely impact of the agreement on the U.S.
economy as a whole, specific industry sectors, and U.S.
consumers. That report would be due 90 days from the date
after the President enters into the agreement.
Senate amendment
The Senate Amendment is substantially similar to the House
bill, with the following exceptions:
Consultations on export subsidies and distorting policies.
Section 2104(b)(2)(A)(ii)(III) requires consultations on
whether nations producing identified products maintain export
subsidies or distorting policies that distort trade and
impact of policies on U.S. producers.
Consultations relating to fishing trade. Section 2104(b)(3)
requires that for negotiations relating to fishing trade, the
Administration will keep fully apprised and on timely basis
consult with the House Resources Committee and the Senate
Commerce Committee.
Special reporting requirements on U.S. trade remedy laws.
Section 2104(d) provides that the President, at least 90
calendar days before the President enters into a trade
agreement, shall notify the House Ways and Means Committee
and the Senate Finance Committee in writing any amendments to
U.S. antidumping and countervailing duty laws (title VII of
the Tariff Act of 1930) or U.S. safeguard provisions (chapter
1 of title II of the Trade Act of 1974) that the President
proposes to include in the implementing legislation. On the
date that the President transmits the notification, the
President must also transmit to the Committees a report
explaining his reasons for believing that amendments to these
trade remedy laws are necessary to implement the trade
agreement and his reasons for believing that such amendments
are consistent with the negotiating objective on this issue.
Not later than 60 calendar days after the date on which the
President transmits notification to the relevant committees,
the Chairman and ranking members of the House Ways and Means
Committee and the Senate Finance Committees shall issue
reports stating whether the proposed amendments described in
the President's notification are consistent with the
negotiating objectives on trade laws.
Conference agreement
The Senate recedes to the House with several modifications.
The Conferees agree to section 2104(b)(2)(A)(11)(III) of the
Senate amendment, which requires consultations on whether
other nations producing identified products maintain export
subsidies or distorting policies that distort trade and
impact of policies on U.S. producers. In addition, the
Conferees agree to section 2104(b)(3) of the Senate
amendment, which requires that for negotiations relating to
fishing trade, the Administration will keep fully apprised
and on timely basis consult with the House Resources
Committee and the Senate Commerce Committee.
Finally, the Conferees agree to include the notification
and report on changes to trade remedy laws in sections
2104(d)(3)(A) and (B) in the Senate amendment with
modifications. Given the priority that Conferees attach to
keeping U.S. trade remedy laws strong and ensuring that they
remain fully enforceable, the Conference agreement puts in
place a process requiring special scrutiny of any impact that
trade agreements may have on these laws. The process requires
the President, at least 180 calendar days before the day on
which he enters into a trade agreement, to report to the
Committees on Ways and Means and the Committee on Finance the
range of proposals advanced in trade negotiations and may be
in the final agreement that could require amendments to title
VII of the Tariff Act of 1930 or to chapter 1 of title II of
the Trade Act of 1974; and how these proposals relate to the
objectives described in section 2102(b)(14).
The Conference agreement also provides a mechanism for any
Member in the House or Senate to introduce at any time after
the President's report is issued a nonbinding resolution
which states ``that the ________ finds that the proposed
changes to U.S. trade remedy laws contained in the report of
the President transmitted to the Congress on ________ under
section 2104(d)(3) of the Bipartisan Trade Promotion
Authority Act of 2002 with respect to ________, are
inconsistent with the negotiating objectives described in
section 2102(b)(14) of that Act.'', with the first blank
space being filled in with either the ``House of
Representatives'' or the ``Senate'', as the case may be, the
second blank space filled in with the appropriate date of the
report, and the third blank space being filled in with the
name of the country or countries involved.
The resolution is referred to the Ways and Means and Rules
Committees in the House and the Finance Committee in the
Senate, and is privileged on the floor if it is reported by
the Committees. The Conference agreement allows only one
resolution (either a nonbinding resolution or a disapproval
resolution) per agreement to be eligible for the trade
promotion authority procedures contained in sections 152 (d)
and (e) of the Trade Act of 1974. The one resolution quota is
satisfied for the House only after the Ways and Means
Committee reports a resolution, and for the Senate only after
the Finance Committee reports a resolution.
The Conference agreement states that, with respect to
agreements entered into with Chile and Singapore, the report
referenced in section 2104(d)(3)(A) shall be submitted by the
President at least 90 calendar days before the day on which
the President enters into a trade agreement with either
country.
SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS
Present/expired law
Before entering into the draft agreement, the President was
required to give Congress 90 days advance notice (120 days
for the Uruguay Round) to provide an opportunity for revision
before signature. After entering into the agreement, the
President was required to submit formally the draft
agreement, implementing legislation, and a statement of
administrative action. Once the bill was formally introduced,
there was no opportunity to amend any portion of the bill--
whether on the floor or in committee. Consequently, before
the formal introduction took place, the committees of
jurisdiction would hold hearings, ``unofficial'' or
``informal'' mark-up sessions and a ``mock conference'' with
the Senate committees of jurisdiction in order to develop a
draft implementing bill together with the Administration and
to make their concerns known to the Administration before it
introduced the legislation formally.
After formal introduction of the implementing bill, the
House committees of jurisdiction had 45 legislative days to
report the bill, and the House was required to vote on the
bill within 15 legislative days after the measure was
reported or discharged from the committees. Fifteen
additional days were provided for Senate committee
consideration (assuming the implementing bill was a revenue
bill), and the Senate floor action was required within 15
additional days. Accordingly, the maximum period for
Congressional consideration of an implementing bill from the
date of introduction was 90 legislative days. Amendments to
the legislation were not permitted once the bill was
introduced; the committee and floor actions consisted of ``up
or down'' votes on the bill as introduced.
[[Page H5931]]
Finally, section 1103(d) of the 1988 Act specified that the
fast track rules were enacted as an exercise of the
rulemaking power of the House and the Senate, with the
recognition of the right of either House to change the rules
at any time.
House amendment
Under Section 2105 of the House amendment to H.R. 3009, the
President would be required, at least 90 days before entering
into an agreement, to notify Congress of his intent to enter
into the agreement. Section 2105(a) also would establish a
new requirement that the President, within 60 days of signing
an agreement, submit to Congress a preliminary list of
existing laws that he considers would be required to bring
the United States into compliance with agreement.
Section 2105(b) would provide that trade promotion
authority would not apply if both Houses separately agree to
a procedural disapproval resolution within any 60-day period
stating that the Administration failed to notify or consult
with Congress, which is defined as failing or refusing to
consult in accordance with section 2104 or 2105, failing to
develop or meet guidelines under section 2107(b), failure to
meet with the Congressional Oversight Group, or the agreement
fails to make progress in achieving the purposes. policies,
priorities, and objectives of the Act. In a change from the
expired law, such a resolution may be introduced by any
Member of the House or Senate. Only one such privileged
resolution would be permitted to be considered per trade
agreement per Congress.
Most of the remaining provisions are identical to the
expired law. Specifically, section 2105(a) would require the
President, after entering into agreement, to submit formally
the draft agreement, the implementing legislation, and a
statement of administrative action to Congress, and there
would be no time limit to do so, but with the new requirement
that the submission be made on a date on which both Houses
are in session. The procedures of section 151 of the Trade
Act of 1974 would then apply. Specifically, on the same day
as the President formally submits the legislation, the bill
would be introduced (by request) by the Majority Leaders of
the House and the Senate. After formal introduction of the
legislation, the House Committees of jurisdiction would have
45 legislative days to report the bill. The House would be
required to vote on the bill within 15 legislative days after
the measure was reported or discharged from the Committees.
Fifteen additional days would be provided for Senate
Committee consideration (assuming the implementing bill was a
revenue bill), and Senate floor action would be required
within 15 additional days. Accordingly, the maximum period
for Congressional consideration of the implementing bill from
the date of introduction would be 90 legislative days.
As with the expired provisions, once the bill has been
formally introduced, no amendments would be permitted either
in Committee or floor action, and a straight ``up or down''
vote would be required. Of course, before formal
introduction, the bill could be developed by the Committees
of jurisdiction together with the Administration during the
informal Committee mark-up process.
Finally, as with the expired provision, section 2105(c)
specifies that sections 2105(b) and 3(c) are enacted as an
exercise of the rulemaking power of the House and the Senate,
with the recognition of the right of either House to change
the rules at any time.
Senate amendment
The Senate Amendment is substantially similar to the House
Bill, with the following exception:
Reporting requirements. Section 2105(a)(1)(A)(ii) requires
the President to transmit to the House Ways and Means
Committee and the Senate Finance Committee the notification
and report described in section 2104(d)(3)(A) regarding
changes to U.S. trade remedy laws.
Disclosure Requirements. Section 2105(a)(4) of the Senate
bill specifies that any trade agreement or understanding with
a foreign government (oral or written) not disclosed to
Congress will not be considered part of trade agreement
approved by Congress and shall have no effect under U.S. law
or in any dispute settlement body.
Senate Procedures. Section 2105(b)(1)(C)(i)(II) provides
that any Member of the Senate may introduce a procedural
disapproval resolution, and that that resolution will be
referred to the Senate Finance Committee. Section
2105(b)(1)(C)(iv) provides that the Senate may not consider a
disapproval resolution that has not been reported by the
Senate Finance Committee.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to section 2105(a)(4) of
the Senate amendment, which specifies that any trade
agreement or understanding with a foreign government (oral or
written) not disclosed to Congress will not be considered
part of trade agreement approved by Congress and shall have
no effect under U.S. law or in any dispute settlement body,
the Conferees also agree to sections 2105(b)(1)(C)(i)(II) and
(b)(1)(C)(iv) of the Senate amendment, which applies the
same procedures for consideration of bills in the Senate
as for the House.
Finally, the Conferees agree to section 2105(b)(2) of the
Senate amendment with modifications, which requires the
Secretary of Commerce, in consultation with the Secretaries
of State and Treasury, the Attorney General, and the United
States Trade Representative, to transmit to Congress a report
setting forth the strategy of the executive branch to address
concerns of Congress regarding whether dispute settlement
panels and the Appellate Body of the WTO have added to
obligations or diminished rights of the United States, as
described in section 2101(b)(3). Trade authorities procedures
shall not apply to any implementing bill with respect to an
agreement negotiated under the auspices of the WTO unless the
Secretary of Commerce has issued such report prior to
December 31, 2002.
SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS
Present/expired law
No provision.
House amendment
Section 2106 of the House amendment to H.R. 3009 exempts
agreements resulting from ongoing negotiations with Chile or
Singapore, an agreement establishing a Free Trade Area of the
Americas, and agreements concluded under the auspices of the
WTO from prenegotiation consultation requirements of section
2104(a) only. However, upon enactment of H.R. 3009, the
Administration is required to consult as to those elements
set forth in section 2104(a) as soon as feasible.
Senate amendment
Section 2106 of the Senate amendment is substantially
similar to the House bill.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP
Present/expired law
No provision.
House amendment
Section 2107 of the House amendment to H.R. 3009 would
require the Chairman of the Committee on Ways and Means and
the Chairman of the Committee on Finance to chair and
convene, sixty days after the effective date of this Act, the
Congressional Oversight Group. The Group would be comprised
of the following Members of the House: the Chairman and
Ranking Member of the Committee on Ways and Means and three
additional members of the Committee (not more than two of
whom are from the same party), and the Chairman and Ranking
Member of the Committees which would have, under the Rules of
the House, jurisdiction over provisions of law affected by a
trade negotiation. The Group would be comprised of the
following Members of the Senate: the Chairman and Ranking
Member of the Committee on Finance and three additional
members of the Committee (not more than two of whom are from
the same party), and the Chairman and Ranking Member of the
Committees which would have, under the Rules of the Senate,
jurisdiction over provisions of law affected by a trade
negotiation.
Members are to be accredited as official advisors to the
U.S. delegation in the negotiations. USTR is to develop
guidelines to facilitate the useful and timely exchange of
information between USTR and the Group, including regular
briefings, access to pertinent documents, and the closest
possible coordination at all critical periods during the
negotiations, including at negotiation sites.
Finally, section 2107(c) provides that upon the request of
a majority of the Congressional Oversight Group, the
President shall meet with the Group before initiating
negotiations or at any other time concerning the
negotiations.
Senate amendment
Section 2107 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS
Present/expired law
No provision.
House amendment
Section 2108 of the House amendment to H.R. 3009 would
require the President to submit to the Congress a plan for
implementing and enforcing any trade agreement resulting from
this Act. The report is to be submitted simultaneously with
the text of the agreement and is to include a review of the
Executive Branch personnel needed to enforce the agreement as
well as an assessment of any U.S. Customs Service
infrastructure improvements required. The range of personnel
to be addressed in the report is very comprehensive,
including U.S. Customs and Department of Agriculture border
inspectors, and monitoring and implementing personnel at
USTR, the Departments of Agriculture, Commerce, and the
Treasury, and any other agencies as may be required.
Senate amendment
Section 2108 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2109--COMMITTEE STAFF
Present/expired law
No provision.
House amendment
Section 2109 of the House amendment to H.R. 3009 states
that the grant of trade promotion authority is likely to
increase the
[[Page H5932]]
activities of the primary committees of jurisdiction and the
creation of the Congressional Oversight Group under section
2107 will increase the participation of a broader Members of
Congress in the formulation of U.S. trade policy and
oversight of the U.S. trade agenda. The provision specifies
that the primary committees of jurisdiction should have
adequate staff to accommodate these increases in activities.
Senate amendment
Section 2109 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
Section 2111 requires the International Trade Commission,
within one year following enactment of this Act, to issue a
report regarding the economic impact of the following trade
agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the
U.S.-Canada Free Trade Agreement; (3) the North American Free
Trade Agreement (NAFTA); (4) The Uruguay Round Agreements,
which established the World Trade Organization; and (5) The
Tokyo Round of Multilateral Trade Negotiations.
Conference agreement
The House recedes to the Senate amendment.
SEC. 2112--SMALL BUSINESS
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
WTO small business advocate. Section 2112(a) provides that
the U.S. Trade Representative shall pursue identification of
a small business advocate at the World Trade Organization
Secretariat to examine the impact of WTO agreements on the
interests of small businesses, address the concerns of small
businesses, and recommend ways to address those interests in
trade negotiations involving the WTO.
Assistant USTR responsible for small businesses. Section
2112(b) provides that the Assistant United States Trade
Representative for Industry and Telecommunications shall be
responsible for ensuring that the interests of small
businesses are considered in trade negotiations.
Conference agreement
The Senate recedes to the House amendment with a
modification. The Conferees agree to section 2112(b) of the
Senate amendment, which provides that the Assistant USTR for
Industry and Telecommunications will be responsible for
ensuring that the interests of small business are considered
in trade negotiations.
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
SEC. 3101--SHORT TITLE
Present law
No provision.
House amendment
Section 3101 of H.R. 3009, as amended, provides that the
Act may be cited as the ``Andean Trade Promotion and Drug
Eradication Act.''
Senate amendment
Section 3101 provides that the Act may be cited as the
``Andean Trade Preference Expansion Act.''
Conference agreement
The Senate recedes.
SEC. 3102--FINDINGS
Present law
No provision.
House amendment
Section 1302 contains findings of Congress that:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact on United States trade
with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has
doubled, with the United States serving as the leading source
of imports and leading export market for each of the Andean
beneficiary countries. This has resulted in increased jobs
and expanded export opportunities in both the United States
and the Andean region.
(2) The Andean Trade Preference Act has been a key element
in the United States counter narcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provide sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable
to the consequences of the drug war and fierce global
competition for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient.
Enhancement of legitimate trade with the United States
provides an alternative means for reviving and stabilizing
the economies in the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of
prosperity, stability, and democracy in the beneficiary
countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private
enterprise and foreign investors in the economic prospects of
the region, ensuring that legitimate private enterprise can
be the engine of economic development and political stability
in the region.
(7) Each of the Andean beneficiary countries is committed
to conclude negotiation of a Free Trade Area of the Americas
by the year 2005 as a means of enhancing the economic
security of the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiaries countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the
region, and the world.
Senate amendment
Section 3101 is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 3103--ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT
Articles (Except Apparel) Eligible for Preferential Treatment
Present law
The Andean Trade Preference Act (ATPA), enacted on December
4, 1991 as title II of Public Law 102-182, authorizes
preferential trade benefits for the Andean nations of
Bolivia, Colombia, Ecuador, and Peru, similar to those
benefits granted to beneficiaries under the Caribbean Basin
Initiative program. The ATPA authorizes the President to
proclaim duty-free treatment for all eligible articles
from Bolivia, Colombia, Ecuador, Peru. This authority
applies only to normal column 1 rates of duty in the
Harmonized Tariff Schedule of the United States (HTS); any
additional duties imposed under U.S. unfair trade practice
laws, such as the antidumping or countervailing duty laws,
are not affected by this authority.
The ATPA contains a list of products that are ineligible
for duty-free treatment. More specifically, ATPA duty-free
treatment does not apply to textile and apparel articles that
are subject to textile agreements; petroleum and petroleum
products; footwear not eligible for duty-free treatment under
the Generalized System of Preferences; certain watches and
watch parts; certain leather products; and sugar, syrups and
molasses subject to over-quota rates of duty.
House amendment
Section 3103 (a) amends the Andean Trade Preference Act to
authorize the President to proclaim duty-free treatment for
any of the following articles which were previously excluded
from duty-free treatment under the ATPA, if the President
determines that the article is not import-sensitive in the
context of imports from beneficiary countries:
(1) Footwear not designated at the time of the effective
date of this Act as eligible for the purposes of the
Generalized System of Preferences under title V of the Trade
Act of 1974;
(2) Petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
(3) Watches and watch parts (including cases, bracelets and
straps), of whatever type including. but not limited to,
mechanical, quartz digital or quartz analog, if such watches
or watch parts contain any material which is the product of
any country with respect to which HTS column 2 rates of duty
apply;
(4) Handbags, luggage, flat goods, work gloves, and leather
wearing apparel that--(i) are the product of any beneficiary
country; and (ii) were not designated on August 5, 1983, as
eligible articles for purposes of the Generalized System of
Preferences under title V of the Trade Act of 1974.
Under H.R. 3009, textiles subject to textile agreements;
sugar, syrups and molasses subject to over-quota tariffs; and
rum and tafia classified in subheading 2208.40.00 of the HTS
would continue to be ineligible for duty-free treatment, as
would apparel products other than those specifically
described below. Imports of tuna, prepared or preserved in
any manner, in airtight containers would receive immediate
duty-free treatment.
Senate amendment
Section 3102 of the bill replaces the list of excluded
products under section 204(b) of the current ATPA with a new
provision that extends duty preferences to most of those
products. The new preferences take the form of exceptions to
the general rule that the excluded products are not eligible
for duty-free treatment.
The enhanced preferences are made available to ``ATPEA
beneficiary countries.''
[[Page H5933]]
Paragraph (5) of section 204(b) of the ATPA as amended by the
present bill defines ATPEA beneficiary countries as those
countries previously designated by the President as
``beneficiary countries'' (i.e., Bolivia, Colombia, Ecuador,
and Peru) which subsequently are designated by the President
as ``ATPEA beneficiary countries,'' based on the President's
consideration of additional eligibility criteria.
In the event that the President did not designate a current
``beneficiary country'' as an ``ATPEA beneficiary country,''
that country would remain eligible for ATPA benefits under
the law as expired on December 4, 2001, but would not be
eligible for the enhanced benefits provided under the present
bill.
Footwear not eligible for duty-free treatment under GSP
receives the same tariff treatment as like products from
Mexico, except that duties on articles in particular tariff
subheadings are to be reduced by 1/15 per year.
The Senate Amendment provides special treatment for rum and
tafia, allowing them to receive the same tariff treatment as
like products from Mexico. The bill also allows certain
handbags, luggage, flat goods, work gloves, and leather
wearing apparel to receive the same tariff treatment as like
products from Mexico.
Under the bill, the President is authorized to proclaim
duty-free treatment for tuna that is harvested by United
States or ATPEA vessels, subject to a quantitative yearly cap
of 20 percent of the domestic United States tuna pack in the
preceding year.
Conference agreement
Senate recedes on the authority of President to proclaim
duty-free treatment for particular articles which were
previously excluded from duty-free treatment under the ATPA,
if the President determines that the article is not import-
sensitive in the context of imports from beneficiary
countries.
Textiles subject to textile agreements; sugar, syrups and
molasses subject to over-quota tariffs; and rum and tafia
classified in subheading 2208.40.00 of the HTS would continue
to be ineligible for duty-free treatment, as would apparel
products other than those specifically described below.
House recedes on the treatment of tuna with an amendment
to: 1) retain U.S. or Andean flagged vessel rule of origin
requirement in Senate amendment; 2) authorize the
President to grant duty-free treatment for Andean exports
of tuna packed in flexible (e.g., foil), airtight
containers weighing with their contents not more than 6.8
kg each; and 3) update calculation of current MFN tariff-
rate quota to be an amount based on 4.8 percent of
apparent domestic consumption of tuna in airtight
containers rather than domestic production.
Eligible Apparel Articles
Present law
Under the ATPA, apparel articles are on the list of
products excluded from eligibility for duty-free treatment.
House amendment
Under Section 3103, the President may proclaim duty-free
and quota-free treatment for apparel articles sewn or
otherwise assembled in one or more beneficiary countries
exclusively from any one or any combination of the following:
(1) Fabrics or fabric components formed, or components
knit-to-shape, in the United States (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in the United
States).
(2) Fabrics or fabric components formed, or components
knit-to-shape, in one or more beneficiary countries, from
yarns formed in one or more beneficiary countries, if such
fabrics (including fabrics not formed from yarns, if such
fabrics are classifiable under heading 5602 or 5603 of the
HTS and are formed in one or more beneficiary countries) are
in chief weight of llama, or alpaca.
(3) Fabrics or yarn not produced in the United States or in
the region, to the extent that apparel articles of such
fabrics or yarn would be eligible for preferential treatment,
without regard to the source of the fabrics or yarn, under
Annex 401 of the NAFTA (short supply provisions). Any
interested party may request the President to consider such
treatment for additional fabrics and yarns on the basis that
they cannot be supplied by the domestic industry in
commercial quantities in a timely manner, and the President
must make a determination within 60 calendar days of
receiving the request from the interested party.
(4) Apparel articles sewn or otherwise assembled in one or
more beneficiary countries from fabrics or fabric components
formed or components knit-to-shape, in one or more
beneficiary countries, from yarns formed in the United States
or in one or more beneficiary countries (including fabrics
not formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in one or more
beneficiary countries), whether or not the apparel articles
are also made from any of the fabrics, fabric components
formed, or components knit-to-shape in the United States
described in paragraph 1. Imports of apparel made from
regional fabric and regional yarn would be capped at 3% of
U.S. imports growing to 6% of U.S. imports in 2006, measured
in square meter equivalents.
Senate amendment
Paragraph (2) of section 204(b) of the ATPA as amended by
section 3102 of the present bill extends duty-free treatment
to certain textile and apparel articles from ATPEA
beneficiary countries. The provision divides articles
eligible for this treatment into several different categories
and limits duty-free treatment to a period defined as the
transition period.'' The transition period is defined in
paragraph (5) of section 204(b) of the ATPA as amended to be
the period from enactment of the present bill through the
earlier of February 28, 2006 or establishment of a FTAA.
In general, the different categories of textile and apparel
articles eligible for duty free treatment are defined
according to the origin of the yarn and fabric from which the
articles are made. Under the first category, apparel sewn or
otherwise assembled in one or more ATPEA beneficiary
countries is eligible for duty-free treatment if it is made
exclusively from one or a combination of several sub-
categories of components, as follows:
(1) United States fabric, fabric components, or knit-to-
shape components, made from yarns wholly formed in the United
States;
(2) A combination of both United States and ATPEA
beneficiary country components knit-to-shape from yarns
wholly formed in the United States;
(3) ATPEA beneficiary country fabric, fabric components, or
knit-to-shape components, made from yarns wholly formed in
one or more ATPEA beneficiary countries, if the constituent
fibers are primarily llama or alpaca hair; and
(4) Fabrics or yarns, regardless of origin, if such fabrics
or yarns have been deemed, under the North American Free
Trade Agreement, not to be widely available in commercial
quantities in the United States. A separate provision of
section 204(b) of the ATPA as amended by the present bill
sets forth a process for interested parties to petition the
President for inclusion of additional yarns and fabrics in
the ``short supply'' list. This process includes obtaining
advice from the United States International Trade Commission
and industry advisory groups, and consultation with the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives.
A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except
socks) in one or more ATPEA beneficiary countries from yarns
wholly formed in the United States. To qualify under this
category, the entire article must be knit-to-shape--as
opposed to being assembled from components that are
themselves knit-to-shape.
A third category of apparel articles eligible for duty-free
treatment is apparel articles wholly assembled in one or more
ATPEA beneficiary countries from fabric or fabric components
knit, or components knit-to-shape in one or more ATPEA
beneficiary countries from yarns wholly formed in the United
States. The quantity of apparel eligible for this benefit is
subject to an annual cap. The cap is set at 70 million square
meter equivalents for the one-year period beginning March 1,
2002. The cap will increase by 16 percent, compounded
annually, in each succeeding one-year period, through
February 28, 2006.
Thus, the cap applied to this category in each year
following enactment will be as follows:
70 million square meter equivalents (SME) in the year
beginning March 1, 2002;
81.2 million SME in the year beginning March 1, 2003;
94.19 million SME in the year beginning March 1, 2004; and
109.26 million SME in the year beginning March 1, 2005.
A separate provision makes clear that goods otherwise
qualifying under the latter category will not be disqualified
if they happen to contain United States fabric made from
United States yarn.
A fourth category of apparel eligible for duty-free
treatment under the Senate bill is brassieres that are cut or
sewn, or otherwise assembled, in one or more ATPEA
beneficiary countries, or in such countries and the United
States. This separate category requires that, in the
aggregate, brassieres manufactured by a given producer
claiming duty-free treatment for such products contain
certain quantities of United States fabric.
A fifth category of textile and apparel eligible for duty-
free treatment is handloomed, handmade, and folklore
articles.
A final category of textile and apparel goods eligible for
duty-free treatment is textile luggage assembled in an ATPEA
beneficiary country from fabric and yarns formed in the
United States.
In addition to the foregoing categories, the bill sets
forth special rules for determining whether particular
textile and apparel articles qualify for duty-free treatment.
Conference agreement
In general the conferees agreed to follow the House
amendment on apparel provisions with the exception that the
House receded to the Senate on the treatment of textile
luggage. With respect to category 2 in the House bill
relating to fabrics or fabric components formed, or
components knit-to-shape, in one or more beneficiary
countries, from yarns formed in one or more beneficiary
countries, if such fabrics are in chief weight of llama, or
alpaca, conferees agreed to include vicuna and calculate
product eligibility based on chief value instead of chief
weight. Also, conferees agreed to cap imports of apparel
[[Page H5934]]
made from regional fabric and regional yarn (category 4 in
the House bill) at 2% of U.S. imports growing to 5% of U.S.
imports in 2006, measured in square meter equivalents.
It is the intention of the conferees that in cases where
fabrics or yarns determined by the President to be in short
supply impart the essential character to an article, the
remaining textile components may be constructed of fabrics or
yarns regardless of origin, as in Annex 401 of the NAFTA. In
cases where the fabrics or yarns determined by the President
to be in short supply do not impart the essential character
of the article, the article shall not be ineligible for
preferential treatment under this Act because the article
contains the short supply fabric or yarn.
Special Origin Rule for Nylon Filament Yarn
House amendment
No provision.
Senate amendment
Articles otherwise eligible for duty-free treatment and
quota free treatment under the bill are not ineligible
because they contain certain nylon filament yarn (other than
elastomeric yarn) from a country that had an FTA with the
U.S. in force prior to January 1, 1995.
Conference agreement
House recedes.
Dyeing, Finishing and Printing Requirement
House amendment
New requirement that apparel made of U.S. knit or woven
fabric assembled in CBTPA country qualifies for benefits only
if the U.S. knit or woven fabric is dyed and finished in the
United States. Apparel made of U.S. knit or woven fabric
assembled in an Andean beneficiary country qualifies for
benefits only if the U.S. knit or woven fabric is dyed and
finished in the United States.
Senate Provision
No provision.
Conference agreement
Senate recedes.
Penalties for Transshipment
Present Law
The Tariff Act of 1930, as amended, provides for civil
monetary penalties for unlawful transshipment. These include
penalties under 19 U.S.C. 1592 for up to a maximum of the
domestic value of the imported merchandise or eight times the
loss of revenue, as well as denial of entry, redelivery or
liquidated damages for failure to redeliver the merchandise
determined to be inaccurately represented. In addition, an
importer may be liable for criminal penalties, including
imprisonment for up to five years, under section 1001 of
title 18 of the United States Code for making false
statements on import documentation.
Under the North American Free Trade Agreement (NAFTA),
Parties to the Agreement must observe Customs procedures and
documentation requirements, which are established in Chapter
5 of NAFTA. Requirements regarding Certificates of Origin for
imports receiving preferential tariffs are detailed in
Article 502.1 of NAFTA.
House amendment
Section 3103 requires that importers comply with
requirements similar in all material respects to the
requirements regarding Certificates of Origin contained in
Article 502.1 of the North American Free Trade Agreement
(NAFTA) for a similar importation from Mexico.
In addition, if an exporter is determined under the laws of
the United States to have engaged in illegal transshipment of
apparel products from an Andean country, then the President
shall deny all benefits under the bill to such exporter, and
to any successors of such exporter, for a period of two
years.
In cases where the President has requested a beneficiary
country to take action to prevent transshipment and the
country has failed to do so, the President shall reduce the
quantities of textile and apparel articles that may be
imported into the United States from that country by three
times the quantity of articles transshipped, to the extent
that such action is consistent with World Trade Organization
(WTO) rules.
Senate amendment
In amending section 204(b) of the ATPA, section 3102 of the
present bill provides special penalties for transshipment of
textile and apparel articles from an ATPEA beneficiary
country. Transshipment is defined as claiming duty-free
treatment for textile and apparel imports on the basis of
materially false information. An exporter found to have
engaged in such transshipment (or a successor of such
exporter) shall be denied all benefits under the ATPA for a
period of two years.
The bill further provides penalties for an ATPEA
beneficiary country that fails to cooperate with the United
States in efforts to prevent transshipment. Where textile and
apparel articles from such country are subject to quotas on
importation into the United States consistent with WTO rules,
the President must reduce the quantity of such articles that
may be imported into the United States by three times the
quantity of transshipped articles, to the extent consistent
with WTO rules.
Conference agreement
Conference agreement follows House and Senate bill.
Import Relief Actions
Present law
The import relief procedures and authorities under sections
201-204 of the Trade Act of 1974 apply to imports from ATPA
beneficiary countries, as they do to imports from other
countries. If ATPA imports cause serious injury, or threat of
such injury, to the domestic industry producing a like or
directly competitive article, section 204(d) of the ATPA
authorizes the President to suspend ATPA duty-free treatment
and proclaim a rate of duty or other relief measures.
Under NAFTA, the United States may invoke a special
safeguard provision at any time during the tariff phase-out
period if a NAFTA-origin textile or apparel good is being
imported in such increased quantities and under such
conditions as to cause ``serious damage, or actual threat
thereof,'' to a domestic industry producing a like or
directly competitive good. The President is authorized to
either suspend further duty reductions or increase the rate
of duty to the NTR rate for up to three years.
House amendment
Under Section 3103 normal safeguard authorities under ATPA
would apply to imports of all products except textiles and
apparel. A NAFTA equivalent safeguard authorities would apply
to imports of apparel products from ATPA countries, except
that, United States, if it applied a safeguard action, would
not be obligated to provide equivalent trade liberalizing
compensation to the exporting country.
Senate amendment
The bill establishes similar textile and apparel safeguard
provisions based on the NAFTA textile and apparel safeguard
provision.
Conference agreement
Conference Agreement follows House and Senate bill.
Designation Criteria
Present law
In determining whether to designate any country as an ATPA
beneficiary country, the President must take into account
seven mandatory and 12 discretionary criteria, which are
listed in section 203 of the ATPA.
Under Section 203 of the ATPA, the President shall not
designate any country a ATPA beneficiary country if:
(1) the country is a Communist country;
(2) the country has nationalized, expropriated, imposed
taxes or other exactions or otherwise seized ownership or
control of U.S. property (including intellectual property),
unless he determines that prompt, adequate, and effective
compensation has been or is being made, or good faith
negotiations to provide such compensation are in progress, or
the country is otherwise taking steps to discharge its
international obligations, or a dispute over compensation has
been submitted to arbitration;
(3) the country fails to act in good faith in recognizing
as binding or in enforcing arbitral awards in favor of U.S.
citizens;
(4) the country affords ``reverse'' preferences to
developed countries and whether such treatment has or is
likely to have a significant adverse effect on U.S. commerce;
(5) a government-owned entity in the country engages in the
broadcast of copyrighted material belonging to U.S. copyright
owners without their express consent or the country fails to
work toward the provision of adequate and effective
intellectual property rights;
(6) the country is not a signatory to an agreement
regarding the extradition of U.S. citizens,
(7) if the country has not or is not taking steps to afford
internationally recognized worker rights to workers in the
country;
In determining whether to designate a country as eligible
for ATPA benefits, the President shall take into account
(discretionary criteria):
(1) an expression by the country of its desire to be
designated;
(2) the economic conditions in the country, its living
standards, and any other appropriate economic factors;
(3) the extent to which the country has assured the United
States it will provide equitable and reasonable access to its
markets and basic commodity resources;
(4) the degree to which the country follows accepted rules
of international trade under the World Trade Organization;
(5) the degree to which the country uses export subsidies
or imposes export performance or local content requirements
which distort international trade;
(6) the degree to which the trade policies of the country
are contributing to the revitalization of the region;
(7) the degree to which the country is undertaking self-
help measures to protect its own economic development;
(8) whether or not the country has taken or is taking steps
to afford to workers in that country (including any
designated zone in that country) internationally recognized
workers rights;
(9) the extent to which the country provides under its law
adequate and effective means for foreign nationals to secure,
exercise, and enforce exclusive intellectual property rights;
(10) the extent to which the country prohibits its
nationals from engaging in the broadcast of copyrighted
material belonging to U.S. copyright owners without their
express consent;
(11) whether such country has met the narcotics cooperation
certification criteria of the Foreign Assistance Act of 1961
for eligibility for U.S. assistance; and
[[Page H5935]]
(12) the extent to which the country is prepared to
cooperate with the United States in the administration of the
Act.
Under the ATPA the President is prohibited from designating
a country a beneficiary country if any of criteria (1)-(7)
apply to that country, subject to waiver if the President
determines that country designation will be in the U.S.
national economic or security interest. The waiver does not
apply to criteria (4) and (6). Under the ATPA criteria on (7)
is included as both mandatory and discretionary.
The President may withdraw or suspend beneficiary country
status or duty-free treatment on any article if he determines
the country should be barred from designation as a result
of changed circumstances. The President must submit a
triennial report to the Congress on the operation of the
program. The report shall include any evidence that the
crop eradication and crop substitution efforts of the
beneficiary country are directly related to the effects of
the legislation
House amendment
The House amendment provides that the President, in
designating a country as eligible for the enhanced ATPDEA
benefits, shall take into account the existing eligibility
criteria established under ATPA described above, as well as
other appropriate criteria, including: whether a country has
demonstrated a commitment to undertake its WTO obligations
and participate in negotiations toward the completion of the
FTAA or comparable trade agreement; the extent to which the
country provides intellectual property protection consistent
with or greater than that afforded under the Agreement on
Trade-Related Aspects of Intellectual Property Rights; the
extent to which the country provides internationally
recognized worker fights; whether the country has implemented
its commitments to eliminate the worst forms of child labor;
the extent to which a country has taken steps to become a
party to and implement the Inter-American Convention Against
Corruption; and the extent to which the country applies
transparent, nondiscriminatory and competitive procedures in
government procurement equivalent to those included in the
WTO Agreement on Government Procurement and otherwise
contributes to efforts in international fora to develop and
implement international rules in transparency in government
procurement.
Senate amendment
Section 3102(5) contains identical provisions.
Conference agreement
Conference Agreement follows the House and Senate
amendments. In evaluating a potential beneficiary's
compliance with its WTO obligations, the conferees expect the
President to take into account the extent to which the
country follows the rules on customs valuation set forth in
the WTO Customs Valuation Agreement. With respect to
intellectual property protection, it is the Conferees intent
that the President will also take into account the extent to
which potential beneficiary countries are providing or taking
steps to provide protection of intellectual property rights
comparable to the protections provided to the United States
in bilateral intellectual property agreements.
Since April 1995, Colombia has applied a variable import
duty system, known as the ``price band'' system, on fourteen
basic agriculture products such as wheat, corn, and soybean
oil. An additional 147 commodities, considered substitutes or
related products, are subject to the price band system which
establishes ceiling, floor, and reference prices on imports.
The Conferees's view is that the price band system is non-
transparent and easily manipulated as a protectionist device.
In early 2000, the United States reached agreement with
Colombia in the WTO that Colombia would delink wet pet food,
the only finished product in this system, from the price band
system. In implementing the eligibility criteria relating to
market access and implementation of WTO commitments, it is
the Conferees intent that USTR insist that Colombia implement
its WTO commitment to remove pet food from the price band
tariff system and to apply the 20% common external tariff to
imported pet food.
With respect to whether beneficiary countries are following
established WTO rules, the Conferees believe it is important
for Andean goveniments to provide transparent and non-
discriminatory regulatory procedures. Unfortunately, the
Conferees know of instances where regulatory policies in
Andean countries are opaque, unpredictable, and arbritarily
applied. As such, it is the Conferees's view that Andean
countries that seek trade benefits should adopt, implement,
and apply transparent and non-discriminatory regulatory
procedures. The development of such procedures would help
create regulatory stability in the Andean region and thus
provide mere certainty to U.S. companies that would like to
invest in these countries.
Determination Regarding Retention of Designation
Present law
Under Section 203(e) of the ATPA, the President may
withdraw or suspend a country's beneficiary country
designation, or withdraw, suspend, or limit the application
of duty-free treatment to particular articles of a
beneficiary country, due to changed circumstances.
House amendnient
Section 3102(b) amends section 203(e) of the ATPA to
provide that President may withdraw or suspend ATPA
designation, or withdraw, suspend or limit benefits if a
country's performance under eligibility criteria are no
longer satisfactory.
Senate amendment
Identical.
Conference agreement
Conference agreement follows the House amendment and Senate
amendment.
Reporting Requirements
Present law
Provides for: 1) an annual report by the International
Trade Commission on the economic impact of the bill and; 2)
an annual report by the Secretary of Labor on the impact of
the bill with respect to U.S. labor. Also under present law,
USTR is required to report triannually on operation of the
program.
House amendment
Retains current law on reports.
Senate amendment
Senate bill requires same ITC and Labor reports as well as
an annual report by the Customs Service on compliance and
anti-circumvention on the part of beneficiary countries in
the area of textile and apparel trade. It also requires USTR
to report biannually on operation of the program.
Conference agreement
House recedes.
Petitions for Review
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 3102(e) of the bill directs the President to
promulgate regulations regarding the review of eligibility of
articles and countries under the ATPA. Such regulations are
to be similar to regulations governing the Generalized System
of Preferences petition process.
Conference agreement
House recedes.
section 3104--termination of duty-free treatment
Present law
Duty-free treatment under the ATPA expires on December 4,
2001.
House amendment
Duty-free treatment terminates under the Act on December
31, 2006.
Senate amendment
Section 3103 of the bill amends section 208(b) of the ATPA
to provide for a termination date of February 28, 2006. Basic
ATPA benefits apply retroactively to December 4, 2001.
Conference agreement
House recedes on retroactivity for basic ATPA benefits;
Senate recedes on termination.
section 3106--trade benefits under the caribbean basin trade
partnership act (cbtpa) and the africa growth and opportunity act
(agoa)
Knit-to-shape Apparel
Present law
Draft regulations issued by Customs to implement P.L. 106-
200 stipulate that knit to-shape garments, because
technically they do not go through the fabric stage, are not
eligible for trade benefits under the act.
House amendment
Sec. 3106 and 3107 of the House bill amends AGOA and CBTPA
to clarify that preferential treatment is provided to knit-
to-shape apparel articles assembled in beneficiary countries.
Senate amendment
No provision.
Conference agreement
Senate recedes.
Present law
Draft regulations issued by Customs to implement P.L. 106-
200 deny preferential access to garments that are cut both in
the United States and beneficiary countries, on the rationale
that the legislation does not specifically list this
variation in processing (the so called ``hybrid cutting
problem'').
House amendment
Sec. 3107 of H.R. 3009 adds new rules in CBTPA and AGOA to
provide preferential treatment for apparel articles that are
cut both in the United States and beneficiary countries.
Senate amendment
No provision.
Conference agreement
Senate recedes
CBI Knit Cap
Present law
P.L. 106-200 extended duty-free benefits to knit apparel
made in CBI countries from regional fabric made with U.S.
yarn and to knit-to-shape apparel (except socks), up to a cap
of 250,000,000 square meter equivalents (SMEs), with a growth
rate of 16% per year for first 3 years.
House amendment
Sec. 3106 of H.R. 2009 would raise this cap to the
following amounts: 250,000,000 SMEs
[[Page H5936]]
for the 1-year period beginning October 1, 2001; 500,000,000
SMEs for the 1-year period beginning on October 1, 2002;
850,000,000 SMEs for the 1-year period beginning on October
1, 2003; 970,000,000 SMEs in each succeeding 1-year period
through September 30, 2009.
Senate amendment
No provision.
Conference agreement
Senate recedes.
CBI T-shirt cap
Present law
P.L. 106-200 extends benefits for an additional category of
CBI regional knit apparel products (T-shirts) up to a cap of
4.2 million dozen, growing 16% per year for the first 3
years.
House amendment
Section 3106 of H.R. 3006 would raise this cap to the
following amounts: 4,200,000 dozen during the 1-year period
beginning October 1, 2001; 9,000,000 dozen for the 1-year
period beginning on October 1, 2002; 10,000,000 dozen for the
1-year period beginning on October 1, 2003; 12,000,000 dozen
in each succeeding 1-year period through September 30, 2009.
Senate amendment
No provision.
Conference agreement
Senate recedes.
Present law
Section 112(b)(3) of the AGOA provides preferential
treatment for apparel made in beneficiary sub-Saharan African
countries from ``regional'' fabric (i.e., fabric formed in
one or more beneficiary countries) from yarn originating
either in the United States or one or more such countries.
Section 112(b)(3)(B) establishes a special rule for lesser
developed beneficiary sub-Saharan African countries, which
provides preferential treatment, through September 30, 2004,
for apparel wholly assembled in one or more such countries
regardless of the origin of the fabric used to make the
articles. Section 112(b)(3)(A) establishes a quantitative
limit or ``cap'' on the amount of apparel that may be
imported under section 112(b)(3) or section 112(b)(3)(B).
This ``cap'' is 1.5 percent of the aggregate square meter
equivalents of all apparel articles imported into the United
States for the year that began October 1, 2000, and increases
in equal increments to 3.5 percent for the year beginning
October 1, 2007.
House amendment
Section 3107 would clarify that apparel wholly assembled in
one or more beneficiary sub-Saharan African countries from
components knit-to-shape in one or more such countries from
U.S. or regional yarn is eligible for preferential treatment
under section 112(b)(3) of AGOA. Similarly, Section 5 would
clarify that apparel knit-to-shape and wholly assembled in
one or more lesser developed beneficiary sub-Saharan African
countries is eligible for preferential treatment, regardless
of the origin of the yarn used to make such articles. The
House amendment also would increase the ``cap'' by changing
the applicable percentages from 1.5 percent to 3 percent in
the year that began October 1, 2000, and from 3.5 percent to
7 percent in the year beginning October 1, 2007.
Senate amendment
No provision.
Conference agreement
Conference agreement follows House Amendment accept the
increase in the cap is limited to apparel products made with
regional or U.S. fabric and yarn. No increases in amounts of
apparel made of third-country fabric over current law.
Present law
AGOA was supposed to provide duty-free, quota-free
treatment to sweaters knit in African beneficiary countries
from fine merino wool yarn, regardless of where the yarn was
formed. AGOA was supposed to provide duty-free, quota-free
treatment to sweaters knit in African beneficiary countries
from fine merino wool yarn, regardless of where the yarn was
formed. However, due to a drafting problem, the wrong
diameter was included, making it impossible to use the
provision.
House amendment
Section 3107 corrects the yarn diameter in the AGOA
legislation so that sweaters knit to shape from merino wool
of a specific diameter are eligible.
Senate amendment
No provision.
Conferce agreement
Senate recedes.
Africa: Namibia and Botswana
Present law
The GDBs of Botswana and Namibia exceed the LLDC limit of
$1500 and therefore these countries are not eligible to use
third country fabric for the transition period under the AGOA
regional fabric country cap.
House amendment
Section 5 allows Namibia and Botswana to use third country
fabric for the transition period under the AGOA regional
fabric country cap.
Senate amendment
No provision.
Conference agreement
Senate recedes.
Title XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
SEC. 4101-- EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
Expired law
Section 505 of the Trade Act of 1974, as amended, provides
that no duty-free treatment under Title V (the Generalized
System of Preferences) shall remain in effect after September
30, 2001.
House bill
The House amendment to H.R. 3009 would amend section 505 of
the Trade Act of 1974 to authorize an extension through
December 31, 2002. It would also provide retroactive relief
in that, notwithstanding section 514 of the Tariff Act of
1930 or any other provision of law, the entry of any article
to which duty-free treatment under Title V of the Trade Act
of 1974 would have applied if the entry had been made on
September 30. 2001, and was made after September 30, 2001,
and before the enactment of this Act, shall be liquidated or
reliquidated as free of duty and the Secretary of Treasury
shall refund any duty paid, upon proper request filed with
the appropriate Customs officer, within 180 days after the
date of enactment.
Senate amendment
The Senate amendment authorizes an extension of GSP through
December 31, 2006. The extension is retroactive to September
30, 2001, permitting importers to liquidate or reliquidate
entries made since that date and to seek a return of duties
paid on goods that would have entered the United States free
of duty, but for expiration of GSP.
The Senate amendment also amends the definition of
``internationally recognized worker rights'' set forth in the
GSP statute (section 507(4) of the Trade Act of 1974).
Specifically, it adds to that definition ``a prohibition on
discrimination with respect to employment and occupation''
and a ``prohibition of the worst forms of child labor.''
These two prohibitions come from the International Labor
Organization's 1998 Declaration on Fundamental Principles and
Rights at Work, which defines certain worker rights as
``fundamental.''
The GSP statute identifies certain criteria that the
President must take into account in determining whether to
designate a country as eligible for GSP benefits. Conversely,
a country's lapse in compliance with one or more of these
criteria may be grounds for withdrawal, suspension, or
limitation of benefits. Whether a country is taking steps to
afford its workers internationally recognized worker rights
is one of those criteria. The Senate Amendment seeks to make
the concept of ``internationally recognized worker rights''
as defined for GSP consistent with the concept as defined by
the ILO.
Finally, the Senate Amendment establishes a new eligibility
criterion for GSP: ``A country is ineligible for GSP if it
has not taken steps to support the efforts of the United
States to combat terrorism.''
Conference agreement
The Conference agreement authorizes an extension of GSP
through December 31, 2006. Conferees approved the Senate
provision to include a prohibition on the worst forms of
child labor in the definition of internationally recognized
worker rights in Section 507(a) of the Trade Act of 1974.
Conferees declined to include the Senate provision on
discrimination with respect to employment in the definition
of ``international recognized worker rights under Sec. 507
(a) of the Trade Act of 1974. Agreement follows the House and
the Senate bill with respect to providing retroactive relief.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
sec. 5101--wool manufacturer payment clarification and technical
corrections act
Present law
Title V of the Trade and Development Act of 2000 (Pub. L.
No. 106-200) included certain tariff relief for the domestic
tailored clothing and textile industries. The relief was
largely aimed at reducing the harmful affects of a ``tariff
inversion''--i.e., a tariff structure that levies higher
duties on the raw material (such as wool fabric) than on the
finished goods (such as mens' suits). A component of the
relief to the U.S. tailored clothing and textile industry was
a refund of duties paid in calendar year 1999, spread out
over calendar years 2000, 2001 and 2002. Pub. L. No. 106-
2000, Sec. 505.
House amendment
No provision.
Senate amendment
The Senate bill amends section 505 of the Trade and
Development Act of 2000 to simplify the process for refunding
to eligible parties duties paid in 1999. Specifically, it
creates three special refund pools for each of the affected
wool articles (fabric, yarn, and fiber and top). Refunds for
importing manufacturers will be distributed in three
installments--the first and second on or before the date that
is 45 days after the date of enactment of the Wool
Manufacturer Payment and Clarification and Technical
Corrections Act, and the third on or before April 15, 2003.
Refunds for nonimporting manufacturers will be distributed in
two installments--the first on or before the date that is 120
days after the date of enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act, and the
second on or before April 15, 2003.
[[Page H5937]]
The provision also streamlines the paperwork process, in
light of the destruction of previously filed claims and
supporting information in the September 11, 2001 attacks on
the World Trade Center in New York, New York. Finally, the
provision identifies all persons eligible for the refunds.
Conference agreement
The House recedes to the Senate.
sec. 5102--duty suspension on wool
Present law
Sections 501(a) and (b) of the Trade and Development Act of
2000 provide temporary duty reductions for certain worsted
wool fabrics through 2003.
Section 501(d) limits the aggregate quantity of worsted
wool fabrics entered under heading 9902.51.11 from January 1
to December 31 of each year, inclusive, to 2,500,000 square
meter equivalents, or such other quantity proclaimed by the
President pursuant to section 504(b)(3) of the Trade and
Development Act. Further, the section limits the aggregate
quantity of worsted wool fabrics entered under heading
9902.51.12 from January 1 to December 31 of each year,
inclusive, to 1,500,000 square meter equivalents, or such
other quantity proclaimed by the President pursuant to
section 504(b)(3) of the Trade and Development Act.
House amendment
No provision.
Senate bill
The Senate bill extends the temporary duty reductions on
fabrics of worsted wool from 2003 to 2005. The provision
increases the limitation on the quantity of imports of
worsted wool fabrics entered under heading 9902.51.11 to
3,500,000 square meter equivalents in calendar year 2002, and
4,500,000 square meter equivalents in calendar year 2003.
Imports of worsted wool fabrics entered under heading
9902.51.12 are increased to 2,500,000 square meter
equivalents in calendar year 2002, and 3,500,000 square meter
equivalents in calendar year 2003.
The bill extends the payments made to manufacturers under
section 505 of the Trade and Development Act of 2000 and
requires an affidavit that the manufacturer will remain a
manufacturer in the United States as of January 1 of the year
of payment. The two additional payments will occur as
follows: the first to be made after January 1, 2004, but on
or before April 15, 2004, and the second after January 1,
2005, but on or before April 15, 2005.
Finally, the bill extends the ``Wool Research Trust Fund''
for two years through 2006.
Conference agreement
The House recedes to the Senate.
Subtitle B--Other Provisions
sec. 5201--fund for wto dispute settlement
Present law
No applicable section.
House amendment
The provision authorizes a settlement fund within the
United States Trade Representative's Office in the amount of
$50 million for the use in settling disputes that occur
related to the World Trade Organization. The Trade
Representative must certify to the Secretary of the Treasury
that the settlement is in the best interest of the United
States in cases of not more than $10 million. For cases above
$10 million, the Trade Representative must make the same
certification to the United States Congress.
Senate bill
No provision.
Conference agreement
The Senate recedes to the House.
sec. 5202--certain steam or other vapor generating boilers used in
nuclear facilities
Present law
Under present law, certain steam or other vapor generating
boilers used in nuclear facilities imported into the United
States prior to December 31, 2003 are charged a duty rate of
4.9 percent ad valorem. This rate took effect pursuant to
section 1268 of Public Law Number 106-476 (``Tariff
Suspension and Trade Act of 2000''). Previously, the rate had
been 5.2 percent ad valorem.
House amendment
No provision.
Senate amendment
Section 203 of the Senate amendment chances the duty rate
on certain steam or other vapor generating boilers used in
nuclear facilities to zero for such goods entered, or
withdrawn from warehouse for consumption, on or after January
1, 2002, and on or before December 31, 2006. The provision
was intended to lower the cost of inputs into the operation
of nuclear facilities and thereby lower the cost of energy to
consumers.
Committee agreement
The House recedes to the Senate.
sec. 5203--sugar tariff rate quota circumvention
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate bill establishes a sugar anti-circumvention
program which requires the Secretary of Agriculture to
identify imports of articles that are circumventing tariff
rate quotas on sugars, syrups, or sugar-containing products
imposed under chapters 17, 18, 19, and 21 of the Harmonized
Tariff Schedule. The Secretary shall then report to the
President articles found to be circumventing such tariff-rate
quotas. Upon receiving the Secretary's report, the President
shall, by proclamation, include any identified article in the
appropriate tariff-rate quota provision of the Harmonized
Tariff Schedule.
Conference agreement
Conferees agreed to a provision directing the Secretary of
Agriculture and the Commissioner of Customs shall monitor for
sugar circumvention and shall report and make recommendations
to Congress and the President.
This provision amends the Harmonized Tariff Schedule of the
United States (``HTSUS'') to make clear in the statute an
important element of the ruling of the Court of Appeals for
the Federal Circuit in Heartland By-Products, Inc. v. United
States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses
is one of the foreign substances that must be excluded when
calculating the percentage of soluble non-sugar solids under
subheading 1702.90.40.
The provision requires the Secretary of Agriculture and the
Commissioner of Customs to establish a monitoring program to
identify existing or likely circumvention of the tariff-rate
quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The
Secretary and the Commissioner shall report the results of
their monitoring to Congress and the President every six
months, together with data and a description of developments
and trends in the composition of trade provided for in such
chapters. This report will be made public. The report will
discuss any indications that imports of articles not subject
to the tariff-rate quotas are being used for commercial
extraction of sugar in the United States. Imports of so-
called ``high-test molasses'' currently classified under
subheading 1703.10.30 will be examined particularly closely
for such indications.
Finally, the Secretary and the Commissioner will include in
the report their recommendations for ending circumvention,
including their recommendations for legislation. The Managers
emphasize that rapid action to stop circumvention is the best
way to prevent a problem from developing and that quick
administrative or legislative action is preferable to
protracted procedures and litigation, as occurred in the
Heartland case.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
sec. 101--short title
Present law
No provision.
House amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Senate amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance for Workers
SEC. 111--REAUTHORIZATION OF THE TRADE ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current section 245 authorizes to be appropriated to the
Department of Labor such sums as may be necessary to carry
out the purposes of the TAA and NAFTA-TAA for workers
programs for the period October 1, 1998 through September 30,
2001. Current section 285 provides for termination of all
Trade Adjustment Assistance programs on September 30, 2001,
but provides that workers, and firms eligible to receive
benefits on or before that date shall continue to be eligible
to receive such benefits as though the programs were in
effect.
House amendment
The House Amendment reauthorized the Trade Adjustment
Assistance programs through September 30, 2004.
Senate amendment
Section 111 of the Senate bill creates a new section 248 of
the Trade Act of 1974 which authorizes to be appropriated to
the Department of Labor such sums as may be necessary to
carry out the purposes of the Trade Adjustment Assistance for
workers program for the period October 1, 2001, through
September 30, 2007. Section 701 of the Senate bill amends
current section 285 to provide for termination of all Trade
Adjustment Assistance programs on September 30, 2007, but
provides that workers, and firms, communities, farmers, and
fishermen eligible to receive benefits on or before that date
shall continue to be eligible to receive such benefits as
though the programs were in effect.
Conference agreement
Conferees agree to extend the authorization of the Trade
Adjustment Assistance programs through September 30, 2007,
and to consolidate the NAFTA-TAA program with the regular TAA
program.
[[Page H5938]]
sec. 112--filing of petitions and provision of rapid response
assistance; expedited review of petitions by secretary of labor
Present law
Current sections 221 and 250 set forth requirements
concerning who may file a petition for certification of
eligibility to apply for TAA and NAFTA-TAA assistance,
respectively. Under both programs, petitions may be filed by
a group of workers or by their certified or recognized union
or other duly authorized representative. TAA petitions are
filed with the Secretary of Labor. NAFTA-TAA petitions are
filed with the Governor of the relevant State and forwarded
by him to the Secretary of Labor. Under section 223, the
Secretary of Labor must rule on eligibility within 60 days
after a TAA petition is filed. Under section 250, the
Governor must make a preliminary eligibility determination
within 10 days after a NAFTA-TAA petition is filed, and the
Secretary of Labor must make a final eligibility
determination within the next 30 days. Section 221 also sets
forth notice and hearing obligations of the Secretary of
Labor upon receipt of a TAA petition. Section 250 provides
that, in the event of preliminary certification of
eligibility to apply for NAFTA-TAA benefits, the Governor
immediately provide the affected workers with certain rapid
response services.
House amendment
The House Amendment provided for a shortened period for the
Secretary of Labor to consider petitions from 60 days to 40
days and for other rapid response assistance to workers.
Senate amendment
Section 111 of the Senate bill creates a new section 231 of
the Trade Act of 1974, which consolidates the TAA and NAFTA-
TAA programs by establishing a single program with a single
set of group eligibility criteria and a single set of
procedures and standards for filing and reviewing petitions,
certifying eligibility, and terminating certifications of
eligibility.
Section 231 expands the list of entities that may file a
petition for group certification of eligibility to include
employers, one-stop operators or one-stop partners, State
employment agencies, and any entity to which notice of a
plant closing or mass layoff must be given under section 3 of
the Worker Adjustment and Retraining Notification Act.
Section 231 also provides that the President, or the
Committee on Finance of the Senate or the Committee on Ways
and Means of the House of Representatives (by resolution),
may direct the Secretary of Labor to initiate a certification
process under this chapter to determine the eligibility for
Trade Adjustment Assistance of a group of workers.
Section 231 creates a single process for filing and
reviewing petitions for Trade Adjustment Assistance for
workers, under which all petitions are filed with both the
Secretary of Labor and the Governor of the State. Upon filing
of the petition, the Governor is required to fulfill the
requirements of any agreement entered into with the
Department of Labor under section 222, to provide certain
rapid response services, and to notify workers on whose
behalf a petition has been filed of their potential
eligibility for certain existing federal health care, child
care, transportation, and other assistance programs. Upon
filing the petition, the Secretary of Labor must make his
certification determination within 40 days and provide the
notice required.
Conference agreement
The Senate recedes to the House with a change providing for
simultaneous filing of petitions with the Secretary of Labor
and State Governor.
sec. 113--group eligibility requirements
Present law
Current law sections 222 and 250 of Title 11 of the Trade
Act of 1974 set forth group eligibility criteria. Under TAA,
the Secretary must certify a group of workers as eligible to
apply for Trade Adjustment Assistance if he determines (1)
that a significant number or proportion of the workers in
such workers' firm have become or are threatened to become
totally or partially separated; (2) sales or production of
such firm have decreased absolutely; and (3) imports of
articles like or directly competitive with articles produced
by such workers' firm contributed importantly to the total or
partial separation or threat thereof, and to the decline in
sales or production. Under NAFTA-TAA, group eligibility may
be based on the same criteria set forth in section 222, but
section 250 also provides for NAFTA-TAA eligibility where
there has been a shift in production by the workers' firm to
Mexico or Canada of articles like or directly competitive
with articles which are produced by the firm. Section 222
also includes special eligibility provisions with respect to
oil and natural gas producers.
House amendment
The House Amendment at Section 113 expanded the Trade
Adjustment Assistance programs to secondary workers that are
suppliers to firms that were certified and which satisfied
certain conditions.
Senate amendment
Section 111 of the Senate Amendment creates a new section
231 under which the eligibility criteria are revised. First,
workers are eligible for TAA if the value or volume of
imports of articles like or directly competitive with
articles produced by that firm have increased and the
increase in the value or volume of imports contributed
importantly to the workers' separation or threat of
separation. Second, eligibility is extended to workers who
are separated due to shifts in production to any country,
rather than only when the shift in production is to Mexico or
Canada. Third, eligibility is extended to adversely affected
secondary workers. Eligible secondary workers include workers
in supplier firms and, with respect to trade with NAFTA
countries, downstream firms. Fourth, a new special
eligibility provision is added with respect to taconite
pellets.
Conference agreement
The Conferees agree to extend coverage of Trade Adjustment
Assistance to new categories of workers: 1) secondary workers
that supply directly to another firm component parts for
articles that were the basis for a certification of
eligibility, 2) downstream workers that were affected by
trade with Mexico or Canada, and 3) certain workers that have
been laid off because their firm has shifted its production
to another country that has a free trade agreement with the
United States, that has a unilaterally preferential trading
arrangement with the United States, or when there has been or
is likely to be an increase in imports of the relevant
articles.
sec. 114--qualifying requirements for trade readjustment allowances
Present law
Current section 231 establishes qualifying requirements
that must be met in order for an individual worker within a
certified group to receive Trade Adjustment Assistance. In
order to receive trade readjustment allowances, a
certified worker must have been separated on or after the
eligibility date established in the certification but
within 2 years of the date of the certification
determination; been employed for at least 26 of the 52
weeks preceding the separation at wages of $30 or more a
week; be eligible for and have exhausted unemployment
insurance benefits; not be disqualified for extended
compensation payable under the Federal-State Extended
Unemployment Compensation Act of 1970 by reason of the
work acceptance and job search requirements in section
202(a)(3) of that Act; and be enrolled in a training
program approved by the Secretary of Labor or have
received a training waiver.
House amendment
The House Amendment at Section 114 provided for
requirements and deadlines for workers to enroll in training.
Senate amendment
Section 111 of the Senate Amendment adds a new section 235
which maintains the individual eligibility requirements in
current law, with the exception of revisions to provisions
governing bases for granting training waivers.
Conference agreement
The Senate recedes to the House, with a change to adopt a
training enrollment deadline of 16 weeks after separation.
SEC. 115--WAIVERS OF TRAINING REQUIREMENTS
Present law
Section 231 sets forth permissible bases for granting a
training waiver. Pursuant to section 250(d), training waivers
are not available in the NAFTA-TAA program.
House amendment
The House Amendment provides that all workers who are
eligible to apply for Trade Adjustment Assistance may be
considered for training waivers and codifies several bases on
which the Secretary may grant a waiver.
Senate amendment
Section 111 of the Senate Amendment adds a new section 235
which provides that all workers who are eligible to apply for
Trade Adjustment Assistance may be considered for training
waivers and codifies several bases on which the Secretary may
grant a waiver.
Conference agreement
The House receded to the Senate with a change to delete the
Senate provision giving the Secretary discretion to grant
waivers for ``other'' reasons.
SEC. 116--AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES
Present law
Current section 233 provides that each certified worker may
receive trade readjustment allowances for a maximum of 52
weeks. Current law also provides that, in most circumstances,
a worker is treated as participating in training during any
week which is part of a break in training that does not
exceed 14 days.
House amendment
Section 116 of the House Amendment would add 26 weeks of
trade adjustment allowances for those workers who were in
training and required the extension of benefits for the
purpose of completing training.
Senate amendment
Section 111 of the Senate Amendment adds a new section 237
which increases the maximum time period during which a worker
may receive trade adjustment allowances to 78 weeks, extends
the permissible duration of a break in training to 30 days,
and provides for an additional 26 weeks of income support for
workers requiring remedial education. Section 237 also
clarifies that the requirement that a worker exhaust
unemployment insurance benefits prior to receiving trade
adjustment allowances does not apply to any
[[Page H5939]]
extension of unemployment insurance by a State using its own
funds that extends beyond either the 26 week period mandated
by Federal law or any additional period provided for under
the Federal-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note).
Conference agreement
The Senate recedes to the House.
sec. 117--annual total amount of payments for training
Present law
Current section 236 establishes the terms and conditions
under which training is available to eligible workers;
permits the Secretary of Labor to approve certain
specified types of training programs and to pay the costs
of approved training and certain supplemental costs,
including subsistence and transportation costs, for
eligible workers; and caps total annual funding for
training under the TAA for workers program at $80 million.
Section 250 separately caps training expenditures under
the NAFTA-TAA program at $30 million annually.
House amendment
The House provided $30 million additional funds for the
Trade Adjustment Assistance program. Combined with NAFTA
Trade Adjustment Assistance, the total training funds
available were $140 million.
Senate amendment
Section 111 of the Senate Amendment adds a new section 240
which sets the total funds available for training
expenditures under the unified TAA for workers program to
$300 million annually.
Conference agreement
Conferees agreed to a combined training cap of $220 million
for Trade Adjustment Assistance training.
SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING
Present law
No applicable section.
House amendment
The House Amendment included provisions related to employer
based training including on-the-job training and customized
training with partial reimbursements provided to the
employer.
Senate amendment
Section 111 of the Senate Amendment adds a new section 240
which revises the list of training programs which the
Secretary may approve to include customized training. It also
adds a new section 237, which clarifies that the prohibition
on payment of trade adjustment allowances to a worker
receiving on-the-job training does not apply to a worker
receiving on-the-job training does not apply to worker
enrolled in a non-paid customized training program.
Conference agreement
The Senate recedes to the House.
SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF
1998
Present law
No provision.
House amendment
The House Amendment provided multiple provisions related to
coordinating efforts under the Trade Adjustment Assistance
programs to provide information and benefits to workers under
the Workforce Investment Act.
Senate amendment
No provision.
Conference agreement
Conferees agreed to drop House language with the exception
of a provision related to coordinating the delivery of Trade
Adjustment Assistance benefits and information at one-stop
delivery systems under the Workforce Investment Act.
SEC. 120--EXPENDITURE PERIOD
Present law
No provision.
House amendment
The House amendment provided that certain funds obligated
for any fiscal year to carry out activities may be expended
by each State in the succeeding two fiscal years.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 121--JOB SEARCH ALLOWANCES
Present law
Under current section 237, when the Secretary of Labor
determines that local employment is not available, an
adversely affected worker certified eligible for TAA benefits
may receive reimbursement of 90 percent of the cost of
necessary job search expenses up to $800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 241
which raises the maximum reimbursement for job search
expenses to $1250 per worker.
Conference agreement
The House recedes to the Senate.
SEC. 122--RELOCATION ALLOWANCES
Present law
Under current section 238, when the Secretary of Labor
determines that local employment is not available, an
adversely affected worker certified eligible for TAA benefits
may receive a relocation allowance consisting of (1) 90
percent of the reasonable and necessary expenses incurred in
transporting a worker and his family, if any, and household
effects, and (2) a lump sum equivalent to three times the
worker's average weekly wage, up to a maximum payment of
$800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 242
which raises the maximum lump sum portion of the relocation
allowance to $1,250.
Conference agreement
The House recedes to the Senate.
SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current law authorizes a Trade Adjustment Assistance
Program for workers affected by NAFTA trade.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 231
which combines the TAA and NAFTA-TAA programs, establishing a
single program with a single set of group eligibility
criteria and a single set of procedures and standards for
filing and reviewing petitions, certifying eligibility, and
terminating certification of eligibility.
Conference agreement
The House recedes to the Senate to the extent of repealing
the NAFTA Trade Adjustment Assistance program and creating a
single, unified TAA program for workers.
SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section 243
which directs the Secretary of Labor, within one year of
enactment, to establish a two-year wage insurance pilot
program under which a State uses the funds provided to the
State for Trade Adjustment allowances to pay to an adversely
affected worker certified under section 231, for a period not
to exceed two years, a wage subsidy of up to 50 percent of
the difference between the wages received by the adversely
affected worker from reemployment and the wages received by
the adversely affected worker at the time of separation. An
adversely affected worker may be eligible to receive a wage
subsidy if the worker obtains reemployment not more than 26
weeks after the date of separation from the adversely
affected employment, is at least 50 years of age, earns not
more than $50,000 a year in wages from reemployment, is
employed at least 30 hours a week in the reemployment, and
does not return to the employment from which the worker was
separated. The wage subsidy available to workers in the wage
insurance program is 50 percent of the difference between the
amount of the wages received by the worker from reemployment
and the amount of the wages received by the worker at the
time of separation, if the wages the worker receives from
reemployment are less than $40,000 a year. The wage subsidy
is 25 percent if the wages received by the worker from
reemployment are greater than $40,000 a year but not more
than $50,000 a year. Total payments made to an adversely
affected worker under the wage insurance program may not
exceed $5,000 in each year of the 2-year period. A worker
participating in the wage insurance program is not eligible
to receive any other Trade Adjustment Assistance benefits,
unless the Secretary of Labor determines that the worker has
shown circumstances that warrant eligibility for training
benefits under section 240.
Conference agreement
The Conferees agree to create a new alternative Trade
Adjustment Assistance program for older workers.
SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS
Present law
No provision.
House amendment
The House passed amendment included a declaration of policy
and Sense of the Congress related to the responsibility of
the Secretary of Labor to provide information to workers
related to benefits available to them under the TAA and other
federal programs.
Senate amendment
Although certain supportive services are available to
dislocated workers under WIA, current law makes no express
linkage between these services and Trade
Adjustment Assistance and TAA certified workers may not be
able to access them. Section 111 of the Senate Amendment
adds a new section 243 which provides that States may
apply for and the Secretary of Labor may make available to
adversely affected workers certified under the Trade
Adjustment Assistance program supportive services
available under WIA, including transportation, child care,
and dependent care, that are necessary to enable a worker
to participate in or complete
[[Page H5940]]
training. Section 243 requires the Comptroller General to
conduct a study of all assistance provided by the Federal
Government for workers facing job loss and economic
distress; to submit a report to the Committee on Finance
of the Senate and the Committee on Ways and Means of the
House of Representatives on the study within one year of
enactment of this Act; and to distribute the report to all
WIA one-stop partners. Section 243 further provides that
each State may conduct a study of its assistance programs
for workers facing job loss and economic distress. Each
State is eligible for a grant from the Secretary of Labor,
not to exceed $50,000, to enable it to conduct the study.
In the event that a grant is awarded, the State must,
within one year of receiving the grant, provide its report
to the Committee on Finance and the Committee on Ways and
Means and distribute its report to one-stop partners in
the State.
Conference agreement
The Senate recedes to the House.
SUBTITLE B--Trade Adjustment Assistance for Firms
SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM
Present law
The Trade Adjustment Assistance for Firms program provides
technical assistance to qualifying firms. Current Title 11,
Chapter 3, section 251 of the Trade Act of 1974 provides that
a firm is eligible to receive Trade Adjustment Assistance
under this program if (1) a significant number or proportion
of its workers have become or are threatened to become
totally or partially separated; (2) sales or production, or
both, have decreased absolutely; and (3) increases of imports
of articles like or directly competitive with articles which
are produced by such firms contributed importantly to the
total or partial separations or threat thereof.
The authorization for the Trade Adjustment Assistance for
Finns program expired on September 30, 2001. The TAA for
Firms program is currently subject to annual appropnations
and is funded as part of the budget of the Economic
Development Administration in the Department of Commerce.
House amendment
The House passed amendment included a 2 year
reauthorization for Trade Adjustment Assistance for Firms.
Senate amendment
Section 201 of the Senate Amendment reauthorizes the Trade
Adjustment Assistance for Firms program for fiscal years 2002
through 2007; expands the definition of qualifying firms to
cover shifts in production; and authorizes appropriations to
the Department of Commerce in the amount of $16 million
annually for fiscal years 2002 through 2007 to carry out the
purposes of the Trade Adjustment Assistance for Firms
program.
Conference agreement
The House recedes to the Senate on the issue of providing a
$16 million authorization for Trade Adjustment Assistance for
Firms and reauthorizing the program through September 30,
2007.
SUBTITLE C--Trade Adjustment Assistance for Farmers and Ranchers
SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 401 of the Senate Amendment adds new sections 292-
298 of the Trade Act of 1974 which create a Trade Adjustment
Assistance program for farmers and ranchers in the Department
of Agriculture. Under this section, a group of agricultural
commodity producers may petition the Secretary of Agriculture
for Trade Adjustment Assistance. The Secretary must certify
the group as eligible for Trade Adjustment Assistance for
farmers if it is determined that the national average price
in the most recent marketing year for the commodity produced
by the group is less than 80 percent of the national average
price in the preceding 5 marketing years and that increases
in imports of that commodity contributed importantly to the
decline in price.
Conference agreement
The House recedes to the Senate with changes. The Conferees
agree to include limitations on eligibility based upon
adjusted gross income and counter-cyclical payment
limitations set forth in the Food Security Act of 1985.
SEC. 142--CONFORMING AMENDMENTS
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment makes conforming amendments to the
Trade Act of 1974 concerning the TAA for Farmers program.
Conference agreement
Conferees agree to make conforming amendments to the Trade
Act of 1974.
SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 502 of the Senate Amendment adds new sections 299-
299(G) which create a Trade Adjustment Assistance program for
fishermen in the Department of Commerce. Under this program,
a group of fishermen may petition the Secretary of Commerce
for Trade Adjustment Assistance. The Secretary must certify
the group as eligible for Trade Adjustment Assistance for
fisherman if it is determined that the national average price
in the most recent marketing year for the fish produced by
the group is less than 80 percent of the national average
price in the proceeding five marketing years and that
increases in imports of that fish contributed importantly to
the decline in price.
Conference agreement
Conferees agree to drop Senate Amendment and authorize a
study by the Department of Labor to investigate applying TAA
to fisherman.
Subtitle D--Effective Date
SEC. 151--EFFECTIVE DATE
Present law
No applicable provision.
House amendment
No provision.
Senate amendment
Section 801 of the Senate Amendment provides that except as
otherwise specified, the amendments to the TAA program shall
be effective 90 days after enactment of the Trace Act of
2002. The Senate Amendment includes transitional provisions
governing the period between expiration of the prior
authorizations of TAA for workers and firms and the effective
date of the amendments.
Conference agreement
The House recedes to the Senate.
TITLE II: CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201 (a) AND 202.--CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENETFIT FROM THE PENSION
BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH
INSRUANCE COSTS OF ELIGIBLE INDIVIUDALS
Present Law
Under present law, the tax treatment of health insurance
expenses depends on the individual's circumstances. In
general, employer contributions to an accident or health plan
are excludable from an employee's gross income (sec. 106).
Self-employed individuals are entitled to deduct a portion
of the amount paid for health insurance expenses for the
individual and his or her spouse and dependents. The
percentage of deductible expenses is 70 percent in 2002 and
100 percent in 2003 and thereafter.
Individuals other than self-employed individuals who
purchase their own health insurance and itemize deductions
may deduct their expenses to the extent that their total
medical expenses exceed 7.5 percent of adjusted gross income.
Present law does not provide a tax credit for the purchase
of health insurance.
The health care continuation rules (commonly referred to as
``COBRA'' rules, after the Consolidated Omnibus Budget
Reconciliation Act of 1985 in which they were enacted)
require that employer-sponsored group health plans of
employers with 20 or more employees must offer certain
covered employees and their dependents (``qualified
beneficiaries'') the option of purchasing continued health
coverage in the event of loss of covera-e resulting ftom
certain qualifying events. These qualifying events include:
termination or reduction in hours of employment, death,
divorce or legal separation, enrollment in Medicare, the
bankruptcy of the employer, or the end of a child's
dependency under a parent's health plan. In general, the
maximum period of COBRA coverage is 18 months. An employer is
permitted to charge qualified beneficiaries 102 percent of
the applicable premium for COBRA coverage.
Under present law, individuals without access to COBRA are
able to purchase indl-%idual policies on a guaranteed issue
basis without exclusion of coverage for pre-existing
conditions if they had 18 months of creditable coverage under
an employer sponsored group health plan, governmental plan,
or a church plan. Those with access to COBRA are required to
exhaust their 18 months of COBRA prior to obtaining a policy
on a guaranteed issue basis without exclusion of coverage for
pre-existing conditions.
House amendment
The House bill provides a refundable tax credit for up to
60 percent of the expenses of an eligible individual for
qualified health insurance coverage of the eligible
individual and his or her spouse or dependents. Eligible
individuals are certain TAA eligible workers and PBGC pension
beneficiaries. In the case of TAA eligible workers, no more
than 12 months of coverage would be eligible for the credit.
The amount of the credit would be phased out for taxpayers
with modified adjusted gross income between $20,000 and
$40,000 for single taxpayers ($40,000 and $80,000 for married
taxpayers filing a joint return). The credit would be
available on an advance basis pursuant to a program to be
established by the Secretary of the Treasury. Insurance that
qualifies for the credit includes certain COBRA coverage and
certain individual market options.
[[Page H5941]]
Senate amendment
The Senate amendment provides a refundable credit for 70
percent of qualified health insurance expenses. The credit is
available with respect to certain TAA eligible workers. The
credit is payable on an advance basis pursuant to a program
to be established by the Secretary of the Treasury. Insurance
that qualifies for the credit includes certain COBRA
coverage, certain State-based options, and individual health
insurance if certain requirements are satisfied.
Conference Agreement
Refundable health insurance credit: in general
In the case of taxpayers who are eligible individuals, the
conference agreement provides a refundable tax credit for 65
percent of the taxpayer's expenses for qualified health
insurance of the taxpayer and qualifying family members for
each eligible coverage month beginning in the taxable year.
The credit is available only with respect to amounts paid by
the taxpayer.
Qualifying family members are the taxpayer's spouse and any
dependent of the taxpayer with respect to whom the taxpayer
is entitled to claim a dependency exemption.\1\ Any
individual who has other specified coverage is not a
qualifying family member.
---------------------------------------------------------------------------
\1\ Present law allows the custodial parent to release the
night to claim the dependency exemption for a child to the
noncustodial parent. In addition, if certain requirements are
met, the parents may, decide by agreement that the
noncustodial parent is entitled to the dependency exemption
with respect to a child. In such cases, the provision would
treat the child as the dependent of the custodial parent for
purposes of the credit.
---------------------------------------------------------------------------
Persons eligible for the credit
Eligibility for the credit is determined on a monthly
basis. In general, an eligible coverage month is any month
if, as of the first day of the month, the taxpayer (1) is an
eligible individual, (2) is covered by qualified health
insurance, (3) does not have other specified coverage, and
(4) is not imprisoned under Federal, State, or local
authority. In the case of a joint return, the eligibility
requirements are met if at least one spouse satisfies the
requirements. An eligible month must begin more than 90 days
after the date of enactment.
An eligible individual is (1) an eligible TAA recipient,
(2) an eligible alternative TAA recipient, and (3) an
eligible PBGC pension recipient.
An individual is an eligible TAA recipient during any month
if the individual (1) is receiving for any day of such month
a trade adjustment allowance \2\ or who would be eligible to
receive such an allowance but for the requirement that the
individual exhaust unemployment benefits before being
eligible to receive an allowance and (2) with respect to such
allowance, is covered under a certification issued under
subchapter A or D of chapter 2 of title 11 of the Trade Act
of 1974. An individual is treated as an eligible TAA
recipient during the first month that such individual would
otherwise cease to be an eligible TAA recipient.
---------------------------------------------------------------------------
\2\ Part I of subchapter B, or subchapter D. of chapter 2 of
title 11 of the Trade Act of 1974.
---------------------------------------------------------------------------
An individual is an eligible alternative TAA recipient
during any month if the individual (1) is a worker described
in section 246(a)(3)(B) of the Trade Act of 1974 who is
participating in the program established under section
246(a)(1) of such Act, and (2) is receiving a benefit for
such month under section 246(a)(2) of such Act. An individual
is treated as an eligible alternative TAA recipient during
the first month that such individual would otherwise cease to
be an eligible TAA recipient.
An individual is a PBGC pension recipient for any month if
he or she (1) is age 55 or over as of the first day of the
month, and (2) is receiving a benefit any portion of which is
paid by the Pension Benefit Guaranty Corporation (``PBGC).
An otherwise eligible taxpayer is not eligible for the
credit for a month if, as of the first day of the month the
individual has other specified coverage. Specified coverage
would be (1) coverage under any insurance which constitutes
medical care (expect for insurance substantially all of the
coverage of which is for excepted benefits) \3\ if at least
50 percent of the cost of the coverage is paid by an employee
\4\ (or former employer) of the individual or his or her
spouse or (2) coverage under certain governmental health
programs. \5\ A rule aggregating plans of the same employer
applies in determining whether the employer pays at least 50
percent of the cost of coverage. A person is not an eligible
individual if he or she may be claimed as a dependent on
another person's tax return. A special rule applies with
respect to alternative TAA recipients.
---------------------------------------------------------------------------
\3\ Excepted benefits are: (1) coverage only for accident or
disability income or any combination thereof, (2) coverage
issued as a supplement to liability insurance; (3) liability
insurance. including general liability insurance and
automobile liability insurance; (4) worker's compensation or
similar insurance; (5) automobile medical payment insurance;
(6) credit-only insurance; (7) coverage for on-site medical
clinics; (8) other insurance coverage similar to the
coverages in (1)-(7) specified in regulations under which
benefits for medical care are secondary or incidental to
other insurance benefits; (9) limited scope dental or vision
benefits; (10) benefits for long-term care, nursing home
care, home health care, community-based care, or any
combination thereof, and (11) other benefits similar to those
in (9) and (10) as specified in regulations; (12) coverage
only for a specified disease or illness; (13) hospital
indemnity or other fixed indemnity insurance; and (14)
Medicare supplemental insurance.
\4\ An amount would be considered paid by the employer if it
is excludable from income. Thus. for example, amounts paid
for health coverage on a salary reduction basis under an
employer plan are considered paid by the employer.
\5\ Specifically, an individual would not be eligible for the
credit if, as of the first day of the month, the individual
is (1) entitled to benefits under Medicare Part A, enrolled
in Medicare Part B, or enrolled in Medicaid or SCHIP, (2)
enrolled in a health benefits plan under the Federal
Employees Health Benefit Plan, or (3) entitled to receive
benefits under chapter 55 of title 10 of the United States
Code (relating to military personnel). An individual is not
considered to be enrolled in Medicaid solely by reason of
receiving immunizations.
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Qualified health insurance
Qualified health insurance eligible for the credit is: (1)
COBRA continuation coverage (2) State based continuation
coverage provided by the State under a State law that
requires such coverage; (3) coverage offered through a
qualified State high risk pool; (4) coverage under a health
insurance program offered to State employees or a
comparable program; (5) coverage through an arrangement
entered into by the State and a group health plan, an
issuer of health insurance coverage, an administrator, or
an employer; (6) coverage offered through a State
arrangement with a private sector health care coverage
purchasing pool; (7) coverage under a State-operated
health plan that does not receive any Federal financial
participation; (8) coverage under a group health plan that
is available through the employment of the eligible
individual's spouse; and (9) coverage under individual
health insurance if the eligible individual was covered
under individual health insurance during the entire 30-day
period that ends on the date the individual became
separated from the employment which qualified the
individual for the TAA allowance, the benefit for an
eligible alternative TAA recipient, or a pension benefit
from the PBGC, whichever applies.\6\
---------------------------------------------------------------------------
\6\ For this purpose, ``individual health insurance'' means
any insurance which constitutes medical care offered to
individuals other than in connection with a group health
plan. Such term does not include Federal- or State-based
health insurance coverage.
---------------------------------------------------------------------------
Qualified health insurance does not include any State-based
coverage (i.e., coverage described in (2)-(8) in the
preceding paragraph), unless the State has elected to have
such coverage treated as qualified health insurance and such
coverage meets certain requirements. Such State coverage must
provide that each qualifying individual is guaranteed
enrollment if the individual pays the premium for enrollment
or provides a qualified health insurance costs eligibility
certificate and pays the remainder of the premium. In
addition, the State-based coverage cannot impose any pre-
existing condition limitation with respect to qualifying
individuals. State-based coverage cannot require a qualifying
individual to pay a premium or contribution that is greater
than the premium or contribution for a similarly situated
individual who is not a qualified individual. Finally,
benefits under the State-based coverage must the same as (or
substantially similar to) benefits provided to similarly
situated individuals who are not qualifying individuals. A
qualifvlng individual is an eligible individual who seeks to
enroll in the State-based coverage and who has aggregate
periods of creditable coverage \7\ of three months or longer,
does not have other specified coverage, and who is not
imprisoned. A ``qualifying, individual'' also includes
qualified family members of such an eligible individual.
---------------------------------------------------------------------------
\7\ Creditable coverage is determined under the Health Care
Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
Qualified health insurance does not include coverage under
a flexible spending or similar arrangement or any insurance
if substantially all of the coverage is of excepted benefits.
Other rules
Amounts taken into account in determining the credit could
not be taken into account in determining the amount allowable
under the itemized deduction for medical expenses or the
deduction for health insurance expenses of self-employed
individuals. Amounts distributed from a medical savings
account would not be eligible for the credit. The amount of
the credit is reduced by any credit received on an advance
basis. Married taxpayers filing separate returns are eligible
for the credit; however, if both spouses are eligible
individuals and the spouses file a separate return, then the
spouse of the taxpayer is not a qualifying family member.
The Secretary of the Treasury is authorized to prescribe
such regulations and other guidance as may be necessary or
appropriate to carry out the provision.
Advance payment of refundable health insurance credit;
reporting requirements
The conference agreement provides for payment of the credit
on an advance basis (i.e., prior to the filing of the
taxpayer's return) pursuant to a program to be established by
the Secretary of the Treasury no later than August 1, 2003.
Such program is to provide for making payments on behalf of
certified individuals to providers of qualified health
insurance. In order to receive the credit on an advance
basis, a qualified health insurance costs credit eligibility
certificate would have to be in effect for the taxpayer. A
qualified health insurance costs credit eligibility
certificate is a written statement that an individual is an
eligible individual for purposes of the credit, provides such
information as the Secretary of the Treasury
[[Page H5942]]
may require, and is provided by the Secretary of Labor or the
PBGC (as appropriate) or such other person or entity
designated by the Secretary.
The conference report permits the disclosure of return
information of certified individuals to providers of health
insurance information to the extent necessary to carry out
the advance payment mechanism.
The conference report provides that any person who receives
payments during a calendar year for qualified health
insurance and claims a reimbursement for an advance credit
amount is to file an information return with respect to each
individual from whom such payments were received or for whom
such a reimbursement is claimed. The return is to be in such
form as the Secretary may prescribe and is to contain the
name, address, and taxpayer identification number of the
individual and any other individual on the same health
insurance policy, the aggregate of the advance credit amounts
provided, the number of months for which advance credit
amounts are provided, and such other information as the
Secretary may prescribe. The conference report requires that
similar information be provided to the individual no later
than January 31 of the year following the year for which the
information return is made.
Effective Date
The provision is generally effective with respect to
taxable years beginning after December 31, 2001. The
provision relating to the advance payment mechanism to be
developed by the Secretary would be effective on the date of
enactment.
TITLE III.--CUSTOMS REAUTHORIZATION
Subtitle A--United States Customs Service
CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL
OPERATIONS
SEC. 301--SHORT TITLE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House provides that
the Act may be cited as the ``Customs Border Security Act of
2002.''
Senate amendment
The Senate amendment is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment
SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS,
COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION
Present law
The statutory basis for authorization of appropriations for
Customs is section 301 (b)(1) of the Customs Procedural and
Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as
amended by section 8102 of the Omnibus Budget Reconciliation
Act of 1986 [P.L. 99-509], first outlined separate amounts
for non-commercial and commercial operations for the salaries
and expenses portion of the Customs authorization. Under 19
U.S.C. 2075, Congress has adopted a two-year authorization
process to provide Customs with guidance as it plans its
budget, as well as guidance from the Committee for the
appropriation process.
The most recent authorization of appropriations for Customs
(under section 101 of the Customs and Trade Act of 1990 [P.L.
101 382]) provided $118,238,000 for salaries and expenses and
$143,047,000 for air and marine interdiction program for FY
1991, and $1,247,884,000 for salaries and expenses and
$150,199,000 for air and marine interdiction program in FY
1992.
House amendment
This provision authorizes $1,365,456,000 for FY 2003 and
$1,399,592,400 for FY 2004 for noncommercial operations of
the Customs Service. It also authorizes $1,642,602,000 for FY
2003 and $1,683,667,050 for FY 2004 for commercial operations
of the Customs Service. Of the amounts authorized for
commercial operations, $308,000,000 is authorized for the
automated commercial environment computer system for each
fiscal year. The provisions require that the Customs Service
provide the Committee on Ways and Means and the Committee on
Finance of the Senate with a report demonstrating that the
computer system is being built in a cost-effective manner. In
addition, the provisions authorizes $170,829,000 for FY 2003
and $175,099,725 for FY 2004 for air and marine interdiction
operations of the Customs Service. The provision requires
submission of out-of-year budget projections to the Ways and
Means and Finance Committees.
Senate amendment
This provision authorizes $886,513,000 for FY 2003 and
$909,471,000 for FY 2004 for noncommercial operations of the
Customs Service. It also authorizes $1,603,482,000 for FY
2003 and $1,645,009,000 for FY 2004 for commercial operations
of the Customs Service. Of the amounts authorized for
commercial operations, $308,000,000 is authorized for the
automated commercial environment computer system for each
fiscal year. The provisions require that the Customs Service
provide the Committee on Ways and Means and the Committee on
Finance of the Senate with a report demonstrating that the
computer system is being built in a cost-effective manner. In
addition, the provisions authorizes $181,860,000 for FY 2003
and $186,570,000 for FY 2004 for air and marine interdiction
operations of the Customs Service. The provision requires
submission of out-of-year budget projections to the Ways and
Means and Finance Committees.
Conference agreement
The Senate recedes to House.
SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR
THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND
FLORIDA AND THE GULF COAST SEAPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
that $90,244,000 of the FY 2003 appropriations be available
until expended for acquisition and other expenses
associated with implementation and deployment of terrorist
and narcotics detection equipment along the United States-
Mexico border, the United States-Canada border, and
Florida and the Gulf seaports. The equipment would include
vehicle and inspection systems. The provision would
require that $9,000,000 of the FY 2004 appropriations be
used for maintenance of equipment described above. This
section would also provide the Commissioner of Customs
with flexibility in using these funds and would allow for
the acquisition of new updated technology not anticipated
when this bill was drafted. Nothing in the language of the
bill is intended to prevent the Commissioner of Customs
from dedicating resources to specific ports not identified
in the bill.
The equipment would include vehicle and container
inspection systems, mobile truck x-rays, upgrades to fixed-
site truck x-rays, pallet x-rays, busters, contraband
detection kits, ultrasonic container inspection units,
automated targeting systems, rapid tire deflator systems,
portable Treasury Enforcement Communications Systems
terminals, remote surveillance camera systems, weigh-in-
motion sensors, vehicle counters, spotter camera systems,
inbound commercial truck transponders, narcotics vapor and
particle detectors, and license plate reader automatic
targeting software.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
Customs to measure specifically the effectiveness of the
resources dedicated in sections 312 as part of its annual
performance plan.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Child Cyber-Smuggling Center of the Customs Service
SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD
PORNOGRAPHY/CHILD SEXUAL EXPLOITATION
Present law
Customs enforcement responsibilities include enforcement of
U.S. laws to prevent border trafficking relating to child
pornography, intellectual property rights violations, money
laundering, and illegal arms. Funding for these activities
has been included in the Customs general account.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $10 million for Customs to carry out its program to
combat on-line child sex predators. Of that amount, $375,000
would be dedicated to the National Center for Missing
Children for the operation of its child pornography cyber
tipline.
Senate amendment
The Senate amendment is the same as the House anendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 2--MISCELLANEOUS PROVISIONS
SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER
Present law
No applicable section.
House Amendment
H.R. 3009 as amended and passed by the House earmarks $25
million and 285 new staff hires for Customs to use at the
U.S.-Canada border.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
[[Page H5943]]
SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE
CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House requires
Customs to conduct a study of current personnel practices
including: performance standards; the effect and impact of
the collective bargaining process on Customs drug
interdiction efforts; and a comparison of duty rotations
policies of Customs and other federal agencies employing
similarly situated personnel.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING
PROCEDURES OF THE CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
Customs to conduct a study to ensure that appropriate
training is being provided to personnel who are responsible
for financial auditing of importers. Customs would
specifically report on how its audit personnel protect the
privacy and trade secrets of importers.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 334--ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM;
REPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would mandate
the imposition of a cost accounting system in order for
Customs to effectively explain its expenditures. Such a
system would provide compliance with the core financial
system requirements of the Joint Financial Management
Improvement Program (JFMIP), which is a joint and cooperative
undertaking of the U.S. Department of the Treasury, the
General Accounting Office, the Office of Management and
Budget, and the Office of Personnel Management working in
cooperation with each other and other agencies to improve
financial management practices in government. That Program
has statutory authorization in the Budget and Accounting
Procedures Act of 1950 (31 U.S.C. 65).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 335--STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTFVE
RULINGS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
the Comptroller General to prepare a report to determine
whether Customs has improved its timeliness in providing
prospective rulings.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 336--STUDY AND REPORT RELATING TO CUSTOMS USER FEES
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would require
the Comptroller General to prepare a confidential report to
determine whether current user fees are appropriately set at
a level commensurate with the service provided for the fee.
The Comptroller General is authorized to recommend the
appropriate level for customs user fees.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 337--FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES
Present law
Current law provides for direct reimbursement by courier
facilities of expenses incurred by Customs conducting
inspections at those facilities.
House amendment
H.R. 3009 as amended and passed by the House would
establish a per item fee of sixty-six cents to cover Customs
expenses. This amount could be lowered to more than thirty-
five cents or raised to no more than $1.00 by the Secretary
of the Treasury after a rulemaking process to reevaluate the
expenses incurred by Customs in providing inspectional
services.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 338--NATIONAL CUSTOMS AUTOMATION PROGRAM
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would empower
the Secretary to require the electronic submission of any
information required to be submitted to the Customs Service.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 339--AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment authorizes the appropriation to the
Department of Treasury such sums as may be necessary to
increase the annual pay of journeyman Customs inspectors and
Canine Enforcement Officers who have completed at least one
year of service and are being paid at a GS-9 level, from GS-9
to GS-11. The Senate provision also authorizes an increase in
pay of support staff.
Conference agreement
The House recedes to the Senate.
CHAPTER 4--ANTITERRORISM PROVISIONS
SEC. 341--IMMUNITY FOR CUSTOMS OFFICERS THAT ACT IN GOOD FAITH
Present law
Currently, Customs officers are entitled to qualified
immunity in civil suits brought by persons, who were searched
upon arrival in the United States. Qualified immunity
protects officers from liability if they can establish that
their actions did not violate any clearly established
constitutional or statutory rights.
House amendment
H.R. 3009 as amended and passed by the House would protect
Customs officers by providing them immunity from lawsuits
stemming from personal searches of people entering the
country so long as the officers conduct the searches in good
faith.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House, but conferees qualify the
provision by adding that the means used to effectuate such
searches must be reasonable. To be covered by this immunity
provision, inspectors must follow Customs Service inspection
rules including the rule against profiling against race,
religions, or ethnic background.
SEC. 342--EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING
OF THE CUSTOMS SERVICE
Present law
Present law places numerous restrictions on and, in some
instances, precludes the Secretary of the Treasury or Customs
from making any adjustments to ports and staff. 19 U.S.C.
1318 requires a Presidential proclamation of an emergency and
authorization to the Secretary of the Treasury only to extend
the time for performance of legally required acts during an
emergency. No other emergency powers statute for Customs
exists.
House amendment
H.R. 3009 as amended and passed by the House would permit
the Secretary of the Treasury, if the President declares a
national emergency or if necessary to address specific
threats to human life or national interests, to eliminate,
consolidate, or relocate Customs ports and offices and to
alter staffing levels, services rendered and hours of
operations at those locations. In addition, the amendment
would permit the Commissioner of Customs, when necessary to
address threats to human life or national interests, to close
temporarily any Customs office or port or take any other
lesser action necessary to respond to the specific threat.
The Secretary or the Commissioner would be required to notify
Congress of any action taken under this proposal within 72
hours.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
[[Page H5944]]
SECS. 343 & 343A--MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO
AND PASSENGERS; SECURE SYSTEMS OF TRANSPORTATION
Present law
Currently, commercial carriers bringing passengers or cargo
into or out of the country have no obligation to provide
Customs with such information in advance.
House amendment
H.R. 3009 as amended and passed by the House would require
every air, land, or water-based commercial carrier to file an
electronic manifest describing all passengers with Customs
before entering or leaving the country. There is a similar
requirement for cargo entering the country. Specific
information required in the advanced manifest system would be
developed by Treasury in regulations.
Senate amendment
The Senate Amendment is similar to the House Amendment.
However, with respect to cargo, the Senate Amendment applies
to out-bound as well as in-bound shipments.
Conference agreement
The conferees agree to direct the Secretary of the Treasury
to promulgate regulations pertaining to the electronic
transmission to the Customs Service of information relevant
to aviation, maritime, and surface transportation safety and
security prior to a cargo carrier's arrival in or departure
from the United States. The agreement sets forth parameters
for the Secretary to follow in developing these regulations.
For example, the parameters require that the regulations be
flexible with respect to the commercial and operational
aspects of different modes of transportation. They also
require that, in general, the Customs Service seek
information from parties most likely to have direct knowledge
of the information at issue. The conferees also agree to
amendment of the Tariff Act of 1930 to establish requirements
concerning proper documentation of ocean-bound cargo prior to
a vessel's departure. Finally, the conferees agree to direct
the Secretary of the Treasury to establish a task force to
evaluate, prototype and certify secure systems of
transportation.
SEC. 344--BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND
MAIL
Present law
Although Customs currently searches all inbound mail, and
although it searches outbound mail sent via private carriers,
outbound mail carried by the Postal Service is not subject to
search.
House amendment
H.R. 3009 as amended and passed by the House would enable
Customs officers to search outbound U.S. mail for unreported
monetary instruments, weapons of mass destruction, firearms,
and other contraband used by terrorists. However, reading of
mail would not be authorized absent Customs officers
obtaining a search warrant or consent.
Senate amendment
The Senate Amendment is the same as the House Amendment
with respect to mail weighing in excess of 16 ounces.
However, under the Senate Amendment, the Customs Service
would be required to obtain a warrant in order to search mail
weighing 16 ounces or less. The Senate Amendment also
requires the Secretary of State to determine whether it is
consistent with international law and U.S. treaty obligations
for the Customs Service to search mail transiting the United
States between two foreign countries. The Customs Service
would be authorized to search such mail only after the
Secretary of State determined that such measures are
consistent with international law and U.S. treaty
obligations.
Conference agreement
The House recedes to the Senate.
SEC. 345--Authorization of appropriations for reestablishment of
Customs operations in New York City
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House authorizes
funds to reestablish those operations.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS
SEC. 351--GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS
SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would direct
the Comptroller General to conduct an audit of the systems at
the Customs Service to monitor and enforce textile
transshipment. The Comptroller General would report on
recommendations for improvements.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 352--AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT
ENFORCEMENT OPERATIONS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $9,500,000 for FY 2002 to the Customs Service for
the purpose of enhancing its textile transshipment
enforcement operations. This amount would be in addition to
Customs Service's base authorization and the authorization to
reestablish the destroyed textile monitoring and enforcement
operations at the World Trade Center.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The Senate recedes to the House, but the text is clarified
to provide that personnel will also conduct education and
outreach in addition to enforcement.
SEC. 353--IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would earmark
approximately $1.3 million within Customs' budget for
selected activities related to providing technical assistance
to help sub-Saharan African countries develop and implement
effective visa and anti-transshipment systems as required by
the African Growth and Opportunity Act (title I of Public Law
106-200).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Office of the United States Trade Representative
SEC. 361--AUTHORIZATION OF APPROPRIATIONS
Present law
The statutory authority for budget authorization for the
Office of the United States Trade Representative is section
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171 (a)(1)).
The most recent authorization of appropriations for USTR was
under section 101 of the Customs and Trade Act of 1990 [P.L.
101-382]. Under 19 U.S.C. 2171, Congress has adopted a two-
year authorization process to provide USTR with guidance as
it plans its budget as well as guidance from the Committee
for the appropriation process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$32,300,000 for FY 2003 and $31,108,000 for FY 2004. The
provision requires submission of out-of-year budget
projections to the Ways and Means and Finance Committees. In
light of the substantial increase in trade negotiation work
to be conducted by USTR and the associated need for
consultations with Congress, this provision would authorize
the addition of two individuals to assist the office of
Congressional Affairs.
Senate amendment
The Senate amendment authorizes $30,000,000 for FY 2003 and
$31,000,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle C--United States International Trade Commission
SEC. 371.--Authorization of appropriations
Present law
The statutory authority for budget authorization for the
International Trade Commission is section 330(e)(2)(A) of the
Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent
authorization of appropriations for the ITC was under section
101 of the Customs and Trade Act of 1990 [P.L. 101-382].
Under 19 U.S.C. 1330, Congress has adopted a two-year
authorization process to provide the ITC with guidance as it
plans its budget as well as guidance from the Committees for
the appropriation process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$54,000,000 for FY 2003 and $57,240,000 for FY 2004. The
provision requires submission of out-of-year budget
projections to the Ways and Means and Finance Committees.
Senate amendment
The Senate amendment authorizes $51,400,000 for FY 2003 and
$53,400,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle D--Other Trade Provisions
SEC. 381.--Increase in aggregate value of articles exempt from duty
acquired abroad by United States residents
Present law,
The Harmonized Tariff Schedule at subheading 9804.00.65
currently provides a $400 duty exemption for travelers
returning from abroad.
House amendment
H.R. 3009 as amended and passed by the House would
increased the current $400 duty exemption to $800.
[[Page H5945]]
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 382.--Regulatory audit procedures
Present law
Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509)
provides the authority for Customs to audit persons making
entry of merchandise into the U.S. In the course of such
audit, Customs auditors may identify discrepancies, including
underpayments of duties. However, if there also are
overpayments, there is no requirement that such overpayments
be offset against the underpayments if the underlying entry
has been liquidated.
House amendment
H.R. 3009 as amended and passed by the House would require
that when conducting an audit, Customs must recognize and
offset overpayments and overdeclarations of duties,
quantities and values against underpayments and
underdeclarations. As an example, if during an audit Customs
finds that an importer has underpaid duties associated with
one entry of merchandise by $100 but has also overpaid duties
from another entry of merchandise by $25, then any assessment
by Customs must be the difference of $75.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 383.--Payment of Duties and Fees
Present law
Current law at 19 U.S.C. 1505 provides for the collection
of duties by the Secretary through regulatory process.
House amendment
H.R. 3009 as amended and passed by the House would require
duties to be paid within 10 working days without extension.
The bill also provides for the Customs Service to create a
monthly billing system upon the building of the Automated
Commercial Environment.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
SEC. 2101.--SHORT TITLE AND FINDINGS
Present law
No provision.
House amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2001.'' Section 2101 of the House
amendment to H.R. 3009 states that Congress finds the
expansion of international trade is vital to U.S. national
security and economic growth, as well as U.S. leadership.
Section 2101 also states that the recent pattern of decisions
by dispute settlement panels and the Appellate Body of the
World Trade Organization to impose obligations and
restrictions on the use of antidumping and countervailing
measures by WTO members has raised concerns, and Congress is
concerned that such bodies appropriately apply the standard
of review contained in Article 17.6 of the Antidumping
Agreement, to provide deference to a permissible
interpretation by a WTO member and to the evaluation by a
member of the facts where that evaluation is unbiased and
objective and the establishment of the facts is proper.
Senate amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2002.'' Section 2101 of the Senate
amendment to H.R. 3009 states that Congress finds the
expansion of international trade is vital to U.S. national
security and economic growth, as well as U.S. leadership.
Section 2101 also states that support for continued trade
expansion requires that dispute settlement procedures under
international trade agreements not add to or diminish the
rights and obligations provided in such agreements. It goes
on to note a troubling pattern of cases before WTO dispute
settlement panels and the WTO Appellate Body that do
precisely that.
Conference agreement
The Senate recedes to the House with modifications. With
respect to the findings, the Conferees believe that, as
stated in section 2101(b) of the Conference agreement,
support for continued trade expansion requires that dispute
settlement procedures under international trade agreements
not add to or diminish the rights and obligations provided in
such agreements. Therefore, the recent pattern of decisions
by dispute settlement panels and the WTO Appellate Body to
impose obligations and restrictions on the use of
antidumping, countervailing and safeguard measures by WTO
members has raised concerns, and Congress is concerned that
such bodies appropriately apply the standard of review
contained in Article 17.6 of the Antidumping Agreement, to
provide deference to a permissible interpretation by a WTO
member and to the evaluation by a member of the facts where
that evaluation is unbiased and objective and the
establishment of the facts is proper.
SEC. 2102--TRADE NEGOTIATING OBJECTIVES
Present/expired law
Section 1101(a) of the Omnibus Trade and Competitiveness
Act of 1988 (the 1988 Act) set forth overall negotiating
objectives for concluding trade agreements. These objectives
were to obtain more open, equitable, and reciprocal market
access, the reduction or elimination of barriers and other
trade-distorting policies and practices, and a more effective
system of international trading disciplines and procedures.
Section 1102(b) set forth the following principal trade
negotiating objectives: dispute settlement, transparency,
developing countries, current account surpluses, trade and
monetary coordination, agriculture, unfair trade practices,
trade in services, intellectual property, foreign direct
investment, safeguards, specific barriers, worker rights,
access to high technology, and border taxes.
House amendment
Section 2102 of the House amendment to H.R. 3009 would
establish the following overall negotiating objectives:
obtaining more open, equitable, and reciprocal market access;
obtaining the reduction or elimination of barriers and other
trade-distorting policies and practices; further
strengthening the system of international trading disciplines
and procedures, including dispute settlement; fostering
economic growth and full employment in the U.S. and the
global economy; ensuring that trade and environmental
policies are mutually supportive and seeking to protect and
preserve the environment and enhance the international means
of doing so, while optimizing the use of the world's
resources; promoting respect for worker rights and the rights
of children consistent with International Labor Organization
core labor standards, as defined in the bill; and seeking
provisions in trade agreements under which parties strive to
ensure that they do not weaken or reduce the protections
afforded in domestic environmental and labor laws as an
encouragement to trade.
In addition, section 2102 would establish the principal
trade negotiating objectives for concluding trade agreements,
as follows:
Trade barriers and distortions: expanding competitive
market opportunities for U.S. exports and obtaining fairer
and more open conditions of trade by reducing or eliminating
tariff and nontariff barriers and policies and practices of
foreign governments directly related to trade that decrease
market opportunities for U.S. exports and distort U.S.
trade; and obtaining reciprocal tariff and nontariff
barrier elimination agreements, with particular attention
to products covered in section 111(b) of the Uruguay Round
Agreements Act.
Services: to reduce or eliminate barriers to international
trade in services, including regulatory and other barriers,
that deny national treatment or unreasonably restrict the
establishment or operations of services suppliers.
Foreign investment: to reduce or eliminate artificial or
trade-distorting barriers to trade-related foreign investment
and, recognizing that U.S. law on the whole provides a high
level of protection for investment, consistent with or
greater than the level required by international law, to
secure for investors important rights comparable to those
that would be available under U.S. legal principles and
practice, by:
reducing or eliminating exceptions to the principle of
national treatment; freeing the transfer of funds relating to
investments; reducing or eliminating performance
requirements, forced technology transfers, and other
unreasonable barriers to the establishment and operation of
investments;
seeking to establish standards for expropriation and
compensation for expropriation, consistent with United States
legal principles and practice;
providing meaningful procedures for resolving investment
disputes including between an investor and a government;
seeking to improve mechanisms used to resolve disputes
between an investor and a government through mechanisms to
eliminate frivolous claims and procedures to ensure the
efficient selection of arbitrators and the expeditious
disposition of claims;
providing an appellate or similar review mechanism to
correct manifestly erroneous interpretations of law; and
ensuring the fullest measure of transparency in investment
disputes by ensuring that all requests for dispute settlement
and all proceedings, submissions, findings, and decisions are
promptly made public; all hearings are open to the public;
and establishing a mechanism for acceptance of amicus curiae
submissions.
Intellectual property: including: promoting adequate and
effective protection of intellectual property rights through
ensuring accelerated and full implementation of the Agreement
on Trade-Related Aspects of Intellectual Property Rights,
including strong enforcement; providing strong protection for
new and emerging technologies and new methods of transmitting
and distributing products embodying intellectual property;
and ensuring that standards of protection and enforcement
keep pace with technological developments, and in particular
ensuring that right holders have the legal and technological
means to control the use of their works through the internet
and other global communication media.
[[Page H5946]]
Transparency: to increase public access to information
regarding trade issues as well as the activities of
international trade institutions; to increase openness in
international trade fora, including the WTO, by increasing
public access to appropriate meetings, proceedings, and
submissions, including with regard to dispute settlement and
investment; and to increase timely public access to
notifications made by WT0 member states and the supporting
documents.
Anti-corruption: to obtain high standards and appropriate
enforcement mechanisms applicable to persons from all
countries participating in a trade agreement that prohibit
attempts to influence acts, decisions, or omissions of
foreign government; and to ensure that such standards do not
place U.S. persons at a competitive disadvantage in
international trade.
Improvement of the WTO and multilateral trade agreements:
to achieve full implementation and extend the coverage of the
WTO and such agreements to products, sectors, and conditions
of trade not adequately covered; and to expand country
participation in and enhancement of the Information
Technology Agreement (ITA) and other trade agreements.
Regulatory practices: to achieve increased transparency and
opportunity for the participation of affected parties in the
development of regulations; to require that proposed
regulations be based on sound science, cost-benefit analysis,
risk assessment, or other objective evidence; to establish
consultative mechanisms among parties to trade agreements to
promote increased transparency in developing guidelines,
rules, regulations, and laws for government procurement and
other regulatory regimes; and to achieve the elimination of
government measures such as price controls and reference
pricing which deny full market access for United States
products.
Electronic commerce: to ensure that current obligations,
rules, disciplines, and commitments under the WTO apply to
electronic commerce; to ensure that electronically delivered
goods and services receive no less favorable treatment under
trade rules and commitments than like products delivered in
physical form; and the classification of such goods and
services ensures the most liberal trade treatment possible;
to ensure that governments refrain from implementing trade-
related measures that impede electronic commerce; where
legitimate policy objectives require domestic regulations
that affect electronic commerce, to obtain commitments that
any such regulations are the least restrictive on trade,
nondiscriminatory, and transparent, and promote an open
market environment, and to extend the moratorium of the
WTO on duties on electronic transmissions.
Agriculture: to ensure that the U.S. trade negotiators duly
recognize the importance of agricultural issues; to obtain
competitive market opportunities for U.S. exports in foreign
markets substantially equivalent to the competitive
opportunities afforded foreign exports in U.S. markets and to
achieve fairer and more open conditions of trade; to reduce
or eliminate trade distorting subsidies; to impose
disciplines on the operations of state-trading enterprises or
similar administrative mechanisms; to eliminate unjustified
restrictions on products derived from biotechnology; to
eliminate sanitary or phytosanitary restrictions that
contravene the Uruguay Round Agreement as they are not based
on scientific principles and to improve import relief
mechanisms to accommodate the unique aspects of perishable
and cyclical agriculture.
Labor and the environment: to ensure that a party does not
fail to effectively enforce its environmental or labor laws,
through a sustained or recurring course of action or
Inaction, in a manner affecting trade between the United
States and that party; to recognize that a party to a trade
agreement is effectively enforcing its laws if a course of
inaction or inaction reflects a reasonable exercise of
discretion or results from a bona fide decision regarding
allocation of resources and no retaliation may be authorized
based on the exercise of these rights or the right to
establish domestic labor standards and levels of
environmental protection; to strengthen the capacity of U.S.
trading partners to promote respect for core labor standards
and to protect the environment through the promotion of
sustainable development; to reduce or eliminate government
practices or policies that unduly threaten sustainable
development; to seek market access for U.S. environmental
technologies, goods, and services; and to ensure that labor,
environmental, health, or safety policies and practices of
parties to trade agreements do not arbitrarily or
unjustifiably discriminate against U.S. exports or serve as
disguised barriers to trade.
Dispute settlement and enforcement: to seek provisions in
trade agreements providing for resolution of disputes between
governments in an effective, timely, transparent, equitable,
and reasoned manner requiring determinations based on facts
and the principles of the agreement, with the goal of
increasing compliance; seek to strengthen the capacity of the
WTO Trade Policy Review Mechanism to review compliance; seek
provisions encouraging the early identification and
settlement of disputes through consultations; seek provisions
encouraging trade-expanding compensation; seek provisions to
impose a penalty that encourages compliance, is appropriate
to the parties, nature, subject matter, and scope of the
violation, and has the aim of not adversely affecting parties
or interests not party to the dispute while maintaining the
effectiveness of the enforcement mechanism; and seek
provisions that treat U.S. principal negotiating objectives
equally with respect to ability to resort to dispute
settlement and availability of equivalent procedures and
remedies.
Extended WTO negotiations: concerning extended WTO
negotiations on financial services, civil aircraft, and rules
of origin.
Senate amendment
The Senate Amendment is substantially similar to the House
Amendment, with the exception of several key provisions:
Small Business: The Senate Amendment contains an overall
negotiating objective ``to ensure that trade agreements
afford small businesses equal access to international
markets, equitable trade benefits, expanded export market
opportunities, and provide for the reduction or elimination
of trade barriers that disproportionately impact small
businesses.''
Trade in Motor Vehicles and Parts: The Senate Amendment
contains a principal negotiating objective on expanding
competitive opportunities for exports of U.S. motor vehicles
and parts.
Foreign Investment: The Senate Amendment states as an
objective of the United States in the context of investor-
state dispute settlement ``ensuring that foreign investors in
the United States are not accorded greater rights than United
States investors in the United States.'' The Senate
Amendment's objective with respect to investor-state dispute
settlement also differs from the House Amendment in the
following respects:
It sets as an objective'' seeking to establish standards
for fair and equitable treatment consistent with United
States legal principles and practice, including the principle
of due process.''
It sets deterrence of the filing of frivolous claims as an
objective, ``in addition to the prompt elimination of
frivolous claims.
The Senate Amendment seeks to establish ``procedures to
enhance opportunities for public input into the formulation
of government positions.''
The Senate Amendment seeks to establish a single appellate
body to review decisions by arbitration panels 'in investor-
state dispute settlement cases. Also, unlike the House
Amendment, the Senate Amendment does not prescribe a standard
of review for an eventual appellate body.
Intellectual Property: The Senate Amendment contains an
objective to respect the Declaration on the TRIPS Agreement
and Public Health, adopted by the World Trade Organization at
the Fourth Ministerial Conference at Doha, Qatar on November
14, 2001.''
Trade in Agriculture: The Senate Amendment's negotiating
objective on export subsidies differs from the House
Amendment, stating that an objective of the United States is
``seeking to eliminate all export subsidies on agricultural
commodities while maintaining bona fide food aid and
preserving U.S. agriculture development and export credit
programs that allow the U.S. to compete with other foreign
export promotion efforts.'' The Senate Amendment also
provides that it is a negotiating objective of the United
States to ``strive to complete a general multilateral round
in the WTO by January 1, 2005, and seek the broadest market
access possible in multilateral, regional, and bilateral
negotiations, recognizing the effect that simultaneous sets
of negotiations may have on US import-sensitive commodities
(including those subject to tariff-rate quotas).''
Human Rights and Democracy: The Senate Amendment contains a
negotiating objective ``to obtain provisions in trade
agreements that require parties to those agreements to strive
to protect internationally recognized civil, political, and
human rights.''
Dispute Settlement: The Senate Amendment contains a
negotiating objective absent in the House Amendment ``to seek
improved adherence by panels convened under the WTO
Understanding on Rules and Procedures Governing the
Settlement of Disputes and by the WTO Appellate Body to the
standard of review applicable under the WTO Agreement
involved in the dispute, including greater deference, where
appropriate, to the fact finding and technical expertise of
national investigating authorities.''
Border Taxes: The Senate Amendment contains an objective
absent from the House Amendment on border taxes. The
objective seeks ``to obtain a revision of the WTO rules with
respect to the treatment of border adjustments for internal
taxes to redress the disadvantage to countries relying
primarily on direct taxes for revenue rather than indirect
taxes.'' The objective is addressed to a decision by the WTO
Dispute Settlement Body holding the foreign sales corporation
provisions of the Internal Revenue Code to be inconsistent
with WTO rules.
Textiles: The Senate Amendment contains an extensive
objective on opening foreign markets to U.S. textile exports.
There is no similar provision in the House Amendment.
Worst Forms of Child Labor: The Senate Amendment contains a
negotiating objective to prevent distortions in the conduct
of international trade caused by the use of the worst forms
of child labor and to redress unfair and illegitimate
competition based upon the use of the worst forms of child
labor.
[[Page H5947]]
Conference agreement
The Senate recedes to the House with several modifications.
With respect to the overall negotiating objectives, the
Conferees agree to the overall negotiating objective
regarding small business in section 2102(a)(8) of the Senate
amendment. Second, the Conferees agree to an overall
negotiating objective to promote universal compliance with
ILO Declaration 182 concerning the worst forms of child
labor.
With respect to the principal negotiating objectives, the
Conferees agree to expand the negotiating objective on
intellectual property to respect the Declaration on the TRIPS
Agreement and Public Health, adopted by the WTO at Doha
(section 2102(b)(4)(c) of the Senate amendment).
With respect to the principal negotiating objectives
regarding foreign investment, the Conferees believe that it
is a priority for negotiators to seek agreements protecting
the rights of U.S. investors abroad and ensuring the
existence of a neutral investor-state dispute settlement
mechanism. At the same time, these protections must be
balanced so that they do not come at the expense of making
Federal, State and local laws and regulations more vulnerable
to successful challenges by foreign investors than by
similarly situated U.S. investors.
No Greater Rights: The House recedes to the Senate with a
technical modification to clarify that foreign investors in
the United States are not accorded greater substantive rights
with respect to investment protections than United States
investors in the United States. That is, the reciprocal
obligations regarding investment protections that the United
States undertakes in pursuing its goals should not result in
foreign investors being entitled to compensation for
government actions where a similarly situated U.S. investor
would not be entitled to any form of relief, while ensuring
that U.S. investors abroad can challenge host government
measures which violate the terms of the investment agreement.
Thus, this language expresses Congress' direction that the
substantive investment protections (e.g., expropriation, fair
and equitable treatment, and full protection and security)
should be consistent with United States legal principles and
practice and not provide greater rights to foreign investors
in the United States.
This language applies to substantive protections only and
is not applicable to procedural issues, such as access to
investor-state dispute settlement. The Conferees recognize
that the procedures for resolving disputes between a foreign
investor and a government may differ from the procedures for
resolving disputes between a domestic investor and a
government and may be available at different times during the
dispute. Thus, the ``no greater rights'' direction does not,
for instance, apply to such issues as the dismissal of
frivolous claims, the exhaustion of remedies, access to
appellate procedures, or other similar issues.
The Conferees also agree that negotiators should seek to
provide for an appellate body, or similar mechanism to
provide coherence to the interpretations of investment
provisions in trade agreements.
With respect to the principal negotiating objective on
agriculture, the Conferees agree to section
2102(b)(10)(A)(iii) and (xv) of the House amendment, in lieu
of section 2102(b)(10)(A)(iii) of the Senate amendment. The
Conferees also accept section 2102(b)(10)(A)(xvi) of the
Senate amendment on the timing and sequence of WTO
agriculture negotiations relative to other negotiations.
The Conferees agree to section 2102(b)(13)(C) of the Senate
amendment, relating to dispute settlement in dumping,
subsidy, and safeguard cases, as modified, to seek adherence
by WTO panels to the applicable standard of review.
The Conferees recognize the importance of preserving the
ability of the United States to enforce rigorously its trade
remedy laws, including the antidumping, countervailing duty
and safeguard laws. Because this issue is significant to many
Members of Congress in both the House and Senate, the
Conferees have made this priority a principal negotiating
objective. Negotiators must also avoid agreements that lessen
the effectiveness of domestic and international disciplines
on unfair trade, as well as domestic and international
safeguard provisions. In addition, section 2102(b)(14)(B)
directs the President to address and remedy market
distortions that lead to dumping and subsidization, including
overcapacity, cartelization, and market-access barriers.
The Conferees agree to section 2012(b)(14) of the Senate
amendment stating that the United States should seek a
revision of WTO rules on the treatment of border adjustments
for internal taxes to redress the disadvantage to countries
relying primarily on direct taxes for revenue rather than
indirect taxes. The Conferees agree that such a revision of
WTO rules is one among other options for the United States,
including domestic legislation, to redress such a
disadvantage.
The Conferees agree to include as a principal negotiating
objective to obtain competitive market opportunities for U.S.
exports of textiles substantially equivalent to those for
foreign textiles in the United States.
The Conferees agree to a principal negotiating objective
concerning the worst forms of child labor, to seek
commitments by trade agreement parties to vigorously enforce
their own laws prohibiting the worst forms of child labor.
SEC. 2102(c)--PROMOTION OF CERTAIN PRIORITIES
Present/expired law
No provision.
House amendment
Section 2102(c) of the House amendment to H.R. 3009 sets
forth certain priorities for the President to address. These
provisions include seeking greater cooperation between WTO
and the ILO; seeking to establish consultative mechanisms
among parties to trade agreements to strengthen the capacity
of U.S. trading partners to promote respect for core labor
standards; seeking to seek to establish consultative
mechanisms among parties to trade agreements to strengthen
the capacity of U.S. trading partners to develop and
implement standards for environment and human health based on
sound science; conducting environmental reviews of future
trade and investment agreements, consistent with Executive
Order 13141 and its relevant guidelines; reviewing the impact
of future trade agreements on U.S. employment, modeled after
Executive Order 13141; taking into account, in negotiating
trade agreements, protection of legitimate health or safety,
essential security, and consumer interests; requiring the
Secretary of Labor to consult with foreign parties to trade
negotiations as to their labor laws and providing technical
assistance where needed; reporting to Congress on the extent
to which parties to an agreement have in effect laws
governing exploitative child labor; preserving the ability of
the United States to enforce rigorously its trade laws,
including antidumping and countervailing duty laws, and
avoiding agreements which lessen their effectiveness;
ensuring that U.S. exports are not subject to the abusive use
of trade laws, including antidumping and countervailing duty
laws, by other counties; continuing to promote consideration
of Multilateral Environmental Agreements (MEAS) and
consulting with parties to such agreements regarding the
consistency of any MEA that includes trade measures with
existing environmental exceptions under Article XX of the
GATT.
In addition, USTR, twelve months after the imposition of a
penalty or remedy by the United States permitted by an
agreement to which this Act applies, is to report to the
Committee on the effectiveness of remedies applied under U.S.
law to enforce U.S. rights under trade agreements. USTR shall
address whether the remedy was effective in changing the
behavior of the targeted party and whether the remedy had any
adverse impact on parties or interests not party to the
dispute.
Finally, section 2102(c) would direct the President to seek
to establish consultative mechanisms among parties to trade
agreements to examine the trade consequences of significant
and unanticipated currency movements and to scutinize whether
a foreign government engaged in a pattern of manipulating its
currency to promote a competitive advantage in international
trade.
Senate amendment
With several notable exceptions, the priorities set forth
in section 2102(c) of the Senate Amendment are identical to
the priorities set forth in the House Amendment. The
exceptions are:
With respect to the study that the President must perform
on the impact of future trade agreements on employment, the
Senate Amendment requires the President to examine particular
criteria, as follows: the impact on job security, the level
of compensation of new jobs and existing jobs, the
displacement of employment, and the regional distribution of
employment, utilizing experience from previous trade
agreements and alternative models of employment analysis. The
Senate Amendment also requires that the report be made
available to the public.
The Senate Amendment requires that, in connection with new
trade agreement negotiations, the President shall ``submit to
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
meaningful labor rights report of the country, or countries,
with respect to which the President is negotiating.''
The Senate Amendment adds to the House Amendment priority
on preserving the ability of the United States to enforce
vigorously its trade laws, by including U.S. ``safeguards''
law in the list of laws at issue. This is the U.S. law
authorizing the President to provide relief to parties
seriously injured or threatened with serious injury due to
surges of imports. The priority in the Senate Amendment also
directs the President to remedy certain market distorting
measures that underlie unfair trade practices.
Conference agreement
The Senate recedes to the House amendment with several
modifications. With respect to the worst forms of child
labor, the Conferees agree to expand section 2102(c)(2) of
the House amendment to include the worst forms of child labor
within requirement to seek to establish consultative
mechanisms to strengthen the capacity of U.S. trading
partners to promote respect for core labor standards.
The Conferees agree to modify section 2105(c)(5) of the
House amendment to require the President to report on impact
of future trade agreements on US employment, including on
labor markets, modeled after E.O. 13141 to the extent
appropriate in establishing procedures and criteria, and to
make the report public.
[[Page H5948]]
With respect to the labor rights report in section
2102(c)(8) of both bills, the Conferees agree to the Senate
provision. Furthermore, the Conferees agree to section
2107(b)(2)(E) of the Senate amendment to require that
guidelines for the Congressional Oversight Group include the
time frame for submitting this report.
SEC. 2102(d)--CONSULTATIONS, ADHERENCE TO OBLIGATIONS UNDER URUGUAY
ROUND AGREEMENTS
Present/expired law
No provision.
Housc amendment
Section 2102(d) of the House amendment to H.R. 3009
requires that USTR consult closely, and on a timely basis
with the Congressional Oversight Group appointed under
section 2107. In addition, USTR would be required to consult
closely (including immediately before the initialing of an
agreement) with the congressional advisers on trade policy
and negotiations appointed under section 161 of the Trade Act
of 1974, as well as the House Committee on Ways and Means,
the Senate Committee on Finance, and the Congressional
Oversight Group. With regard to negotiations concerning
agriculture trade, USTR would also be required to consult
with the House and Senate Committees on Agriculture.
In determining whether to enter into negotiations with a
particular country, section 2102(e) would require the
President to take into account whether that country has
implemented its obligations under the Uruguay Round
Agreements.
Senate amendment
Section 2102(d) of the Senate amendment is identical to the
House provision in the House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2103--TRADE AGREEMENTS AUTHORITY
Present/expired law
Tariff proclamation authority. Section 1102(a) of the 1988
Act provided authority to the President to proclaim
modifications in duties without the need for Congressional
approval, subject to certain limitations. Specifically, for
rates that exceed 5 percent ad valorem, the President could
not reduce any rate of duty to a rate less than 50 percent of
the rate of duty applying on the date of enactment. Rates at
or below 5 percent could be reduced to zero. Any duty
reduction that exceeded 50 percent of an existing duty higher
than 5 percent or any tariff increase had to be approved by
Congress.
Staging, authority required that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that
staging was not required if the International Trade
Commission determined there was no U.S. production of that
article.
Negotiation of bilateral agreements. Section 1102(c) of the
1988 Act set forth three requirements for the negotiation of
a bilateral agreement:
The foreign country must request the negotiation of the
bilateral agreement;
The agreement must make progress in meeting applicable U.S.
trade negotiating objectives; and
The President must provide written notice of the
negotiations to the Committee on Ways and Means and the
Committee on Finance of the Senate and consult with these
committees.
The negotiations could proceed unless either Committee
disapproved the negotiations within 60 days prior to the 90
calendar days advance notice required of entry into an
agreement (described below).
Negotiation of multilateral non-tariff agreements. With
respect to multilateral agreements, section 1102(b) of the
1988 Act provided that whenever the President determines that
any barrier to, or other distortion of, international trade
unduly burdens or restricts the foreign trade of the United
States or adversely affects the U.S. economy, or the
imposition of any such barrier or distortion is likely to
result in such a burden, restriction, or effect, he may enter
into a trade agreement with the foreign countries involved.
The agreement must provide for the reduction or elimination
of such barrier or other distortion or prohibit or limit the
imposition of such a barrier or distortion.
Provisions qualifying for fast track procedures. Section
1103(b)(1)(A) of the 1988 Act provided that fast track apply
to implementing bills submitted with respect to any trade
agreements entered into under the statute. Section 151(b)(1)
of the Trade Act of 1974 further defined ``implementing
bill'' as a bill containing provisions ``necessary or
appropriate'' to implement the trade agreement, as well as
provisions approving the agreement and the statement of
administrative action.
Time period. The authority applied with respect to
agreements entered into before June 1, 1991, and until June
1, 1993 unless Congress passed an extension disapproval
resolution. The authority was then extended to April 15,
1994, to cover the Uruguay Round of multilateral negotiations
under the General Agreement on Tariffs and Trade.
House amendment
Section 2103 of the House amendment provides:
Proclamation authority. Section 2103(a) would provide the
President the authority to proclaim, without Congressional
approval, certain duty modifications in a manner very similar
to the expired provision. Specifically, for rates that exceed
5 percent ad valorem, the President would not be authorized
to reduce any rate of duty to a rate less than 50 percent of
the rate of duty applying on the date of enactment. Rates at
or below 5 percent ad valorem could be reduced to zero. Any
duty reduction that exceeded 50 percent of an existing duty
higher than 5 percent or any tariff increase would have to be
approved by Congress.
In addition, section 2103(a) would not allow the use of
tariff proclamation authority on import sensitive
agriculture.
Staging authority would require that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that
staging would not be required if the International Trade
Commission determined there is no U.S. production of that
article.
These limitations would not apply to reciprocal agreements
to eliminate or harmonize duties negotiated under the
auspices of the World Trade Organization, such as so-called
``zero-for-zero'' negotiations.
Agreements on tariff and non-tariff barriers. Section
2103(b)(1) would authorize the President to enter into a
trade agreement with a foreign country whenever he determined
that any duty or other import restriction or any other
barrier to or distortion of international trade unduly
burdens or restricts the foreign trade of the United States
or adversely affects the U.S. economy, or the imposition of
any such barrier or distortion is likely to result in such a
burden, restriction, or effect. The agreement must provide
for the reduction or elimination of such barrier or other
distortion or prohibit or limit the imposition of such a
barrier or distortion. No distinction would be made between
bilateral and multilateral agreements.
Conditions. Section 2103(b)(2) would provide that the
special implementing bills procedures may be used only if the
agreement makes progress in meeting the applicable objectives
set forth in section 2102(a) and (b) and the President
satisfies the consultation requirements set forth in section
2104.
Bills qualifying for trade authorities procedures. Section
2103(b)(3)(A) would provide that bills implementing trade
agreements may qualify for trade promotion authority TPA
procedures only if those bills consist solely of the
following provisions:
Provisions approving the trade agreement and statement of
administrative action; and
Provisions necessary or appropriate to implement the trade
agreement.
Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C) would
extend trade promotion authority to agreements entered into
before June 1, 2005. An extension until June 1, 2007, would
be permitted unless Congress passed a disapproval resolution,
as described under section 2103(c).
Senate amendment
In most respects, section 2103 of the Senate Amendment is
identical to section 2103 of the House Amendment. However,
there are several key differences, as follows:
The Senate Amendment limits the President's proclamation
authority with respect to ``import sensitive agricultural
products,'' a term defined in section 2113(5) of the Senate
Amendment. This limitation differs from the limitation in the
House Amendment, inasmuch as it includes certain products
subject to tariff rate quotas.
The Senate Amendment contains a provision making a trade
agreement implementing bill ineligible for ``fast track''
procedures if the bill modifies, amends, or requires
modification or amendment to certain trade remedy laws. A
bill that does modify, amend or require modification or
amendment to those laws is subject to a point of order in the
Senate, which may be waived by a majority vote.
The Senate Amendment requires the U.S. International Trade
Commission to submit a report to Congress on negotiations
during the initial period for which the President is granted
trade promotion authority. This report would be made in
connection with a request by the President to have such
authority extended.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to the new definition of
import sensitive agriculture in section 2103(a)(2)(B),
2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to
encompass products subject to tariff rate quotas, as well as
products subject to the lowest tariff reduction in the
Uruguay Round.
The Conferees agree to section 2103(c)(3)(B) of the Senate
amendment, which requires the ITC to submit a report to
Congress by May 1, 2005 (if the President seeks extension of
TPA until June 2, 2007) analyzing the economic impact on the
United States of all trade agreements implemented between
enactment and the extension request.
SEC. 2104--CONSULTATIONS AND ASSESSMENT
Present/expired law
Section 102 of the Trade Act of 1974 and sections 1102(d)
and 1103 of the 1988 Act set forth the fast track
requirements. These provisions required the President, before
entering into any trade agreement, to consult with Congress
as to the nature of the agreement, how and to what extent the
agreement will achieve applicable purposes, policies, and
objectives, and all matters relating to agreement
implementation. In addition, before entering into an
agreement, the President was required to give Congress at
least
[[Page H5949]]
90 calendar days advance notice of his intent. The purpose of
this period was to provide the Congressional Committees of
jurisdiction an opportunity to review the proposed agreement
before it was signed.
Section 135(e) of the Trade Act of 1974 required that the
Advisory Committee for Trade Policy and Negotiations meet at
the conclusion of negotiations for each trade agreement and
provide a report as to whether and to what extent the
agreement promotes the economic interests of the United
States and achieves the applicable overall and principal
negotiating objectives of section 1101 of the 1988 Act. The
report was due not later than the date on which the President
notified Congress of his intent to enter into an agreement.
With regard to the Uruguay Round, the report was due 30 days
after the date of notification.
House amendment
Section 2104 of the House amendment to H.R. 3009 would
establish a number of requirements that the President consult
with Congress. Specifically, section 2104(a)(1) would require
the President to provide written notice and consult with the
relevant committees at least 90 calendar days prior to
entering into negotiations. Section 2104(a)(c) also provides
that President shall meet with the Congressional Oversight
Group established under section 2107 upon a request of a
majority of its members. Trade promotion authority would not
apply to an implementing bill if both Houses separately agree
to a procedural disapproval resolution within any 60-day
period stating that the Administration has failed to notify
or consult with Congress.
Section 2104(b)(1) would establish a special consultation
requirement for agriculture. Specifically, before initiating
negotiations concerning tariff reductions in agriculture, the
President is to assess whether U.S. tariffs on agriculture
products that were bound under the Uruguay Round Agreements
are lower than the tariffs bound by that country. In his
assessment, the President would also be required to consider
whether the tariff levels bound and applied throughout the
world with respect to imports from the United States are
higher than U.S. tariffs and whether the negotiation provides
an opportunity to address any such disparity. The President
would be required to consult with the Committees on Ways and
Means and Agriculture of the House and the Committees on
Finance and Agriculture, Nutrition and Forestry of the Senate
concerning the results of this assessment and whether it is
appropriate for the United States to agree to further tariff
reductions under such circumstances and how all applicable
negotiating objectives would be met.
Section 2104(b)(2) provides special consultations on import
sensitive agriculture products. Specifically, before
initiating negotiations on agriculture and as soon as
practicable with respect to the Free Trade Area of the
Americas and WTO negotiations, USTR is to identify import
sensitive agriculture products and consult with the
Committees on Ways and Means and Agriculture of the House and
the Committees on Finance and Agriculture, Nutrition, and
Forestry in the Senate concerning whether any further
tariff reduction should be appropriate, and whether the
identified products face unjustified sanitary or
phytosanitary barriers. USTR is also to request that the
International Trade Commission prepare an assessment of
the probable economic effects of any such tariff reduction
on the U.S. industry producing the product and on the U.S.
economy as a whole. USTR is to then notify the Committees
of those products for which it intends to seek tariff
liberalization as well as the reasons. If USTR commences
negotiations and then identifies additional import
sensitive agriculture products, or a party to the
negotiations requests tariff reductions on such a product,
then USTR shall notify the Committees as soon as
practicable of those products and the reasons for seeking
tariff reductions.
Section 2104(c) would establish a special consultation
requirement for textiles. Specifically, before initiating
negotiations concerning tariff reductions in textiles and
apparel, the President is to assess whether U.S. tariffs on
textile and apparel products that were bound under the
Uruguay Round Agreements are lower than the tariffs bound by
that country. In his assessment, the President would also be
required to consider whether the tariff levels bound and
applied throughout the world with respect to imports from the
United States are higher than U.S. tariffs and whether the
negotiation provides an opportunity to address any such
disparity. The President would be required to consult with
the Committee on Ways and Means of the House and the
Committee on Finance of the Senate concerning the results of
this assessment and whether it is appropriate for the United
States to agree to further tariff reductions under such
circumstances and how all applicable negotiating objectives
would be met.
In addition, section 2104(d) would require the President,
before entering into any trade agreement, to consult with the
relevant Committees concerning the nature of the agreement,
how and to what extent the agreement will achieve the
applicable purposes, policies, and objectives set forth in
the House amendment to H.R. 3009 and all matters relating, to
implementation under section 2105, including the general
effect of the agreement on U.S. laws.
Section 2104(e) would require that the report of the
Advisory Committee for Trade Policy and Negotiations under
section 135(e)(1) of the Trade Act of 1974 be provided not
later than 30 days after the date on which the President
notifies Congress of his intent to enter into the agreement
under section 2105(a)(1)(A).
Finally, section 2104(f) would require the President, at
least 90 days before entering into a trade agreement, to ask
the International Trade Commission to assess the agreement,
including the likely impact of the agreement on the U.S.
economy as a whole, specific industry sectors, and U.S.
consumers. That report would be due 90 days from the date
after the President enters into the agreement.
Senate amendment
The Senate Amendment is substantially similar to the House
bill, with the following exceptions:
Consultations on export subsidies and distorting policies.
Section 2104(b)(2)(A)(ii)(III) requires consultations on
whether nations producing identified products maintain export
subsidies or distorting policies that distort trade and
impact of policies on U.S. producers.
Consultations relating to fishing trade. Section 2104(b)(3)
requires that for negotiations relating to fishing trade, the
Administration will keep fully apprised and on timely basis
consult with the House Resources Committee and the Senate
Commerce Committee.
Special reporting requirements on U.S. trade remedy laws.
Section 2104(d) provides that the President, at least 90
calendar days before the President enters into a trade
agreement, shall notify the House Ways and Means Committee
and the Senate Finance Committee in writing any amendments to
U.S. antidumping and countervailing duty laws (title VII of
the Tariff Act of 1930) or U.S. safeguard provisions (chapter
1 of title II of the Trade Act of 1974) that the President
proposes to include in the implementing legislation. On the
date that the President transmits the notification, the
President must also transmit to the Committees a report
explaining his reasons for believing that amendments to these
trade remedy laws are necessary to implement the trade
agreement and his reasons for believing that such amendments
are consistent with the negotiating objective on this issue.
Not later than 60 calendar days after the date on which the
President transmits notification to the relevant committees,
the Chairman and ranking members of the House Ways and Means
Committee and the Senate Finance Committees shall issue
reports stating whether the proposed amendments described in
the President's notification are consistent with the
negotiating objectives on trade laws.
Conference agreement
The Senate recedes to the House with several modifications.
The Conferees agree to section 2104(b)(2)(A)(ii)(III) of the
Senate amendment, which requires consultations on whether
other nations producing identified products maintain export
subsidies or distorting policies that distort trade and
impact of policies on U.S. producers. In addition, the
Conferees agree to section 2104(b)(3) of the Senate
amendment, which requires that for negotiations relating to
fishing trade, the Administration will keep fully apprised
and on timely basis consult with the House Resources
Committee and the Senate Commerce Committee.
Finally, the Conferees agree to include the notification
and report on changes to trade remedy laws in sections
2104(d)(3)(A) and (B) in the Senate amendment with
modifications. Given the priority that Conferees attach to
keeping U.S. trade remedy laws strong and ensuring that they
remain fully enforceable, the Conference agreement puts in
place a process requiring special scrutiny of any impact that
trade agreements may have on these laws. The process requires
the President, at least 180 calendar days before the day on
which he enters into a trade agreement, to report to the
Committees on Ways and Means and the Committee on Finance
the range of proposals advanced in trade negotiations and
may be in the final agreement that could require
amendments to title VII of the Tariff Act of 1930 or to
chapter 1 of title II of the Trade Act of 1974; and how
these proposals relate to the objectives described in
section 2102(b)(14).
The Conference agreement also provides a mechanism for any
Member in the House or Senate to introduce at any time after
the President's report is issued a nonbinding resolution
which states ``that the ______ finds that the proposed
changes to U.S. trade remedy laws contained in the report of
the President transmitted to the Congress on ______ under
section 2104(d)(3) of the Bipartisan Trade Promotion
Authority Act of 2002 with respect to ______, are
inconsistent with the negotiating objectives described in
section 2102(b)(14) of that Act.'', with the first blank
space being filled in with either the ``House of
Representatives'' or the ``Senate'', as the case may be, the
second blank space filled in with the appropriate date of the
report, and the third blank space being filled in with the
name of the country or countries involved.
The resolution is referred to the Ways and Means and Rules
Committees in the House and the Finance Committee in the
Senate, and is privileged on the floor if it is reported by
the Committees. The Conference agreement allows only one
resolution (either a nonbinding resolution or a disapproval
resolution) per agreement to be eligible for the
[[Page H5950]]
trade promotion authority procedures contained in sections
152 (d) and (e) of the Trade Act of 1974. The one resolution
quota is satisfied for the House only after the Ways and
Means Committee reports a resolution, and for the Senate only
after the Finance Committee reports a resolution.
The Conference agreement states that, with respect to
agreements entered into with Chile and Singapore, the report
referenced in section 2104(d)(3)(A) shall be submitted by the
President at least 90 calendar days before the day on which
the President enters into a trade agreement with either
country.
SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS
Present/expired law
Before entering into the draft agreement, the President was
required to give Congress 90 days advance notice (120 days
for the Uruguay Round) to provide an opportunity for revision
before signature. After entering into the agreement, the
President was required to submit formally the draft
agreement, implementing legislation, and a statement of
administrative action. Once the bill was formally introduced,
there was no opportunity to amend any portion of the bill--
whether on the floor or in committee. Consequently, before
the formal introduction took place, the committees of
jurisdiction would hold hearings, ``unofficial'' or
``informal'' mark-up sessions and a ``mock conference'' with
the Senate committees of jurisdiction in order to develop a
draft implementing bill together with the Administration and
to make their concerns known to the Administration before it
introduced the legislation formally.
After formal introduction of the implementing bill, the
House committees of jurisdiction had 45 legislative days to
report the bill, and the House was required to vote on the
bill within 15 legislative days after the measure was
reported or discharged from the committees. Fifteen
additional days were provided for Senate committee
consideration (assuming the implementing bill was a revenue
bill), and the Senate floor action was required within 15
additional days. Accordingly, the maximum period for
Congressional consideration of an implementing bill from the
date of introduction was 90 legislative days. Amendments to
the legislation were not permitted once the bill was
introduced; the committee and floor actions consisted of ``up
or down'' votes on the bill as introduced.
Finally, section 1103(d) of the 1988 Act specified that the
fast track rules were enacted as an exercise of the
rulemaking power of the House and the Senate, with the
recognition of the right of either House to change the rules
at any time.
House amendment
Under Section 2105 of the House amendment to H.R. 3009, the
President would be required, at least 90 days before entering
into an agreement, to notify Congress of his intent to enter
into the agreement. Section 2105(a) also would establish a
new requirement that the President, within 60 days of signing
an agreement, submit to Congress a preliminary list of
existing laws that he considers would be required to bring
the United States into compliance with agreement.
Section 2105(b) would provide that trade promotion
authority would not apply if both Houses separately agree to
a procedural disapproval resolution within any 60-day period
stating that the Administration failed to notify or consult
with Congress, which is defined as failing or refusing to
consult in accordance with section 2104 or 2105, failing to
develop or meet guidelines under section 2107(b), failure to
meet with the Congressional Oversight Group, or the agreement
fails to make progress in achieving the purposes. policies,
priorities, and objectives of the Act. In a change from the
expired law, such a resolution may be introduced by any
Member of the House or Senate. Only one such privileged
resolution would be permitted to be considered per trade
agreement per Congress.
Most of the remaining provisions are identical to the
expired law. Specifically, section 2105(a) would require the
President, after entering into agreement, to submit formally
the draft agreement, the implementing legislation, and a
statement of administrative action to Congress, and there
would be no time limit to do so, but with the new requirement
that the submission be made on a date on which both Houses
are in session, The procedures of section 151 of the Trade
Act of 1974 would then apply. Specifically, on the same day
as the President formally submits the legislation, the bill
would be introduced (by request) by the Majority Leaders of
the House and the Senate. After formal introduction of the
legislation, the House Committees of jurisdiction would have
45 legislative days to report the bill. The House would be
required to vote on the bill within 15 legislative days after
the measure was reported or discharged from the
Committees. Fifteen additional days would be provided for
Senate Committee consideration (assuming the implementing
bill was a revenue bill), and Senate floor action would be
required within 15 additional days. Accordingly, the
maximum period for Congressional consideration of the
implementing bill from the date of introduction would be
90 legislative days.
As with the expired provisions, once the bill has been
formally introduced, no amendments would be permitted either
in Committee or floor action, and a straight ``up or down''
vote would be required. Of course, before formal
introduction, the bill could be developed by the Committees
of jurisdiction together with the Administration during the
informal Committee mark-up process.
Finally, as with the expired provision, section 2105(c)
specifies that sections 2105(b) and 3(c) are enacted as an
exercise of the rulemaking power of the House and the Senate,
with the recognition of the right of either House to change
the rules at any time.
Senate amendment
The Senate Amendment is substantially similar to the House
Bill, with the following exception:
Reporting requirements. Section 2105(a)(1)(A)(ii) requires
the President to transmit to the House Ways and Means
Committee and the Senate Finance Committee the notification
and report described in section 2104(d)(3)(A) regarding
changes to U.S. trade remedy laws.
Disclosure Requirements. Section 2105(a)(4) of the Senate
bill specifies that any trade agreement or understanding with
a foreign government (oral or written) not disclosed to
Congress will not be considered part of trade agreement
approved by Congress and shall have no effect under U.S. law
or in any dispute settlement body.
Senate Procedures. Section 2105(b)(1)(C)(i)(11) provides
that any Member of the Senate may introduce a procedural
disapproval resolution, and that that resolution will be
referred to the Senate Finance Committee. Section
2105(b)(1)(C)(iv) provides that the Senate may not consider a
disapproval resolution that has not been reported by the
Senate Finance Committee.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to section 2105(a)(4) of
the Senate amendment, which specifies that any trade
agreement or understanding with a foreign government (oral or
written) not disclosed to Congress will not be considered
part of trade agreement approved by Con--2ress and shall have
no effect under U.S. law or in any dispute settlement body.
The Conferees also agree to sections 2105(b)(1)(C)(i)(11) and
(b)(1)(C)(Iv) of the Senate amendment, which applies the same
procedures for consideration of bills in the Senate as for
the House.
Finally, the Conferees agree to section 2105(b)(2) of the
Senate amendment with modifications, which requires the
Secretary of Commerce, in consultation with the Secretaries
of State and Treasury, the Attorney General, and the United
States Trade Representative, to transmit to Congress a report
setting forth the strategy of the executive branch to address
concerns of Congress regarding whether dispute settlement
panels and the Appellate Body of the WTO have added to
obligations or diminished rights of the United States, as
described in section 2101 (b)(3). Trade authorities
procedures shall not apply to any implementing bill with
respect to an agreement negotiated under the auspices of the
WTO unless the Secretary of Commerce has issued such report
prior to December 31, 2002.
SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS
Present/expired law
No provision.
House amendment
Section 2106 of the House amendment to H.R. 3009 exempts
agreements resulting from ongoing negotiations with Chile or
Singapore, an agreement establishing a Free Trade Area of the
Americas, and agreements concluded under the auspices of the
WTO from prenegotiation consultation requirements of section
2104(a) only. However, upon enactment of H.R. 3009, the
Administration is required to consult as to those elements
set forth in section 2104(a) as soon as feasible.
Senate Amendment
Section 2106 of the Senate amendment is substantially
similar to the House bill.
Conference Agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP
Present/expired law
No provision.
House amendment
Section 2107 of the House amendment to H.R. 3009 would
require the Chairman of the Committee on Ways and Means and
the Chairman of the Committee on Finance to chair and
convene, sixty days after the effective date of this Act, the
Congressional Oversight Group. The Group would be comprised
of the following Members of the House: the Chairman and
Ranking Member of the Committee on Ways and Means and three
additional members of the Committee (not more than two of
whom are from the same party), and the Chairman and Ranking
Member of the Committees which would have, under the Rules of
the House, jurisdiction over provisions of law affected by a
trade negotiation. The Group would be comprised of the
following Members of the Senate: the Chairman and Ranking
Member of the Committee on Finance and three additional
members of the Committee (not more than two of whom are from
the same party), and the Chairman and Ranking Member of the
Committees which would have, under the Rules of the Senate,
jurisdiction over provisions of law affected by a trade
negotiation.
Members are to be accredited as official advisors to the
U.S. delegation in the negotiations. USTR is to develop
guidelines to facilitate the useful and timely exchange of
information between USTR and the Group, including regular
briefings, access to pertinent
[[Page H5951]]
documents, and the closest possible coordination at all
critical periods during the negotiations, including at
negotiation sites.
Finally, section 2107(c) provides that upon the request of
a majority of the Congressional Oversight Group, the
President shall meet with the Group before initiating
negotiations or any other time concerning the negotiations.
Senate amendment
Section 2107 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS
Present/expired law
No provision.
House amendment
Section 2108 of the House amendment to H.R. 3009 would
require the President to submit to the Congress a plan for
implementing and enforcing any trade agreement resulting from
this Act. The report is to be submitted simultaneously with
the text of the agreement and is to include a review of the
Executive Branch personnel needed to enforce the agreement as
well as an assessment of any U.S. Customs Service
infrastructure improvements required. The range of personnel
to be addressed in the report is very comprehensive,
including U.S. Customs and Department of Agriculture border
inspectors, and monitoring and implementing personnel at
USTF, the Departments of Agriculture, Commerce, and the
Treasury, and any other agencies as may be required.
Senate amendment
Section 2108 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2109--COMMITTEE STAFF
Present/expired law
No provision.
House amendment
Section 2109 of the House amendment to H.R. 3009 states
that the grant of trade promotion authority is likely to
increase the activities of the primary committees of
jurisdiction and the creation of the Congressional Oversight
Group under section 2107 will increase the participation of a
broader Members of Congress in the formulation of U.S. trade
policy and oversight of the U.S. trade agenda. The provision
specifies that the primary committees of jurisdiction should
have adequate staff to accommodate these increases in
activities.
Senate amendment
Section 2109 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY
Present/expired law
No provision.
House Amendment
No provision.
Senate Amendment
Section 2111 requires the International Trade Commission,
within one year following enactment of this Act, to issue a
report regarding the economic impact of the following trade
agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the
U.S.-Canada Free Trade Agreement; (3) the North American Free
Trade Agreement (NAFTA); (4) The Uruguay Round Agreements,
which established the World Trade Organization; and (5) The
Tokyo Round of Multilateral Trade Negotiations.
Conference agreement
The House recedes to the Senate amendment.
SEC. 2112--SMALL BUSINESS
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
WTO small business advocate. Section 2112(a) provides that
the U.S. Trade Representative shall pursue identification of
a small business advocate at the World Trade Organization
Secretariat to examine the impact of WTO agreements on the
interests of small businesses, address the concerns of small
businesses, and recommend ways to address those interests in
trade negotiations involving the WTO.
Assistant USTR responsible for small businesses. Section
2112(b) provides that the Assistant United States Trade
Representative for Industry and Telecommunications shall be
responsible for ensuring that the interests of small
businesses are considered in trade negotiations.
Conference agreement
The Senate recedes to the House amendment with a
modification. The Conferees agree to section 2112(b) of the
Senate amendment, which provides that the Assistant USTR for
Industry and Telecommunications will be responsible for
ensuring that the interests of small business are considered
in trade negotiations.
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
SEC. 3101--SHORT TITLE
Present law
No provision.
House amendment
Section 3101 of H.R. 3009, as amended, provides that the
Act may be cited as the ``Andean Trade Promotion and Drug
Eradication Act.''
Senate amendment
Section 3101 provides that the Act may be cited as the
``Andean Trade Preference Expansion Act.''
Conference agreement
The Senate recedes.
SEC. 3102--FINDINGS
Present law
No provision.
House amendment
Section 1302 contains findings of Congress that:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact on United States trade
with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has
doubled, with the United States serving as the leading source
of imports and leading export market for each of the Andean
beneficiary countries. This has resulted in increased jobs
and expanded export opportunities in both the United States
and the Andean region.
(2) The Andean Trade Preference Act has been a key element
in the United States counter narcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provide sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable
to the consequences of the drug war and fierce global
competition for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient.
Enhancement of legitimate trade with the United States
provides an alternative means for reviving and stabilizing
the economies in the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of
prosperity, stability, and democracy in the beneficiary
countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private
enterprise and foreign investors in the economic prospects of
the region, ensuring that legitimate private enterprise can
be the engine of economic development and political stability
in the region.
(7) Each of the Andean beneficiary countries is committed
to conclude negotiation of a Free Trade Area of the Americas
by the year 2005 as a means of enhancing the economic
security of the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiaries countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the
region, and the world.
Senate amendment
Section 3101 is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 3103--ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT
Articles (Except Apparel) Eligible for Preferential Treatment
Present law
The Andean Trade Preference Act (ATPA), enacted on December
4, 1991 as title II of Public Law 102-182, authorizes
preferential trade benefits for the Andean nations of
Bolivia, Colombia, Ecuador, and Peru, similar to those
benefits granted to beneficiaries under the Caribbean Basin
Initiative program. The ATPA authorizes the President to
proclaim duty-free treatment for all eligible articles from
Bolivia, Colombia, Ecuador, Peru. This authority applies only
to normal column I rates of duty in the Harmonized Tariff
Schedule of the United States (HTS); any additional duties
imposed under U.S. unfair trade practice laws, such as the
antidumping or countervailing duty laws, are not affected by
this authority.
The ATPA contains a list of products that are ineligible
for duty-free treatment. More specifically, ATPA duty-free
treatment does not apply to textile and apparel articles that
are subject to textile agreements; petroleum and petroleum
products; footwear not eligible for duty-free treatment under
the Generalized System of Preferences; certain watches and
watch parts; certain leather products;
[[Page H5952]]
and sugar, syrups and molasses subject to over-quota rates of
duty.
House amendment
Section 3103 (a) amends the Andean Trade Preference Act to
authorize the President to proclaim duty-free treatment for
any of the following articles which were previously excluded
from duty-free treatment under the ATPA, if the President
determines that the article is not import-sensitive in the
context of imports from beneficiary countries:
(1) Footwear not designated at the time of the effective
date of this Act as eligible for the purposes of the
Generalized System of Preferences under title V of the Trade
Act of 1974;
(2) Petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
(3) Watches and watch parts (including cases, bracelets and
straps), of whatever type including, but not limited to,
mechanical, quartz digital or quartz analog, if such watches
or watch parts contain any material which is the product of
any country with respect to which HTS column 2 rates of duty
apply;
(4) Handbags, luggage, flat goods, work gloves, and leather
wearing apparel that--(i) are the product of any beneficiary
country; and (ii) were not designated on August 5, 1983, as
eligible articles for purposes of the Generalized System of
Preferences under title V of the Trade Act of 1974.
Under H.R. 3009, textiles subject to textile agreements;
sugar, syrups and molasses subject to over-quota tariffs; and
rum and tafia classified in subheading 2208.40.00 of the HTS
would continue to be ineligible for duty-free treatment, as
would apparel products other than those specifically
described below. Imports of tuna, prepared or preserved in
any manner, in airtight containers would receive immediate
duty-free treatment.
Senate amendment
Section 3102 of the bill replaces the list of excluded
products under section 204(b) of the current ATPA with a new
provision that extends duty preferences to most of those
products. The new preferences take the form of exceptions to
the general rule that the excluded products are not eligible
for duty-free treatment.
The enhanced preferences are made available to ``ATPEA
beneficiary countries.'' Paragraph (5) of section 204(b) of
the ATPA as amended by the present bill defines ATPEA
beneficiary countries as those countries previously
designated by the President as ``beneficiary countries''
(i.e., Bolivia, Colombia, Ecuador, and Peru) which
subsequently are designated by the President as ``ATPEA
beneficiary countries,'' based on the President's
consideration of additional eligibility criteria.
In the event that the President did not designate a current
``beneficiary country'' as an ``ATPEA beneficiary country,''
that country would remain eligible for ATPA benefits under
the law as expired on December 4, 2001, but would not be
eligible for the enhanced benefits provided under the present
bill.
Footwear not eligible for duty-free treatment under GSP
receives the same tariff treatment as like products from
Mexico, except that duties on articles in particular tariff
subheadings are to be reduced by 1/15 per year.
The Senate Amendment provides special treatment for rum and
tafia, allowing them to receive the same tariff treatment as
like products from Mexico. The bill also allows certain
handbags, luggage, flat goods, work gloves, and leather
wearing apparel to receive the same tariff treatment as like
products from Mexico.
Under the bill, the President is authorized to proclaim
duty-free treatment for tuna that is harvested by United
States or ATPEA vessels, subject to a quantitative yearly cap
of 20 percent of the domestic United States tuna pack in the
preceding year.
Conference agreement
Senate recedes on the authority of President to proclaim
duty-free treatment for particular articles which were
previously excluded from duty-free treatment under the ATPA,
if the President determines that the article is not import-
sensitive in the context of imports from beneficiary
countries.
Textiles subject to textile agreements; sugar, syrups and
molasses subject to over-quota tariffs; and rum and tafia
classified in subheading 2208.40.00 of the HTS would continue
to be ineligible for duty-free treatment, as would apparel
products other than those specifically described below.
House recedes on the treatment of tuna with an amendment
to: 1) retain U.S. or Andean flagged vessel rule of origin
requirement in Senate amendment; 2) authorize the President
to grant duty-free treatment for Andean exports of tuna
packed in flexible (e.g., foil), airtight containers weighing
with their contents not more than 6.8 kg each; and 3) update
calculation of current MFN tariff-rate quota to be an amount
based on 4.8 percent of apparent domestic consumption of tuna
in airtight containers rather than domestic production.
Eligible Apparel Articles
Present law
Under the ATPA, apparel articles are on the list of
products excluded from eligibility for duty-free treatment.
House amendment
Under Section 3103, the President may proclaim duty-free
and quota-free treatment for apparel articles sewn or
otherwise assembled in one or more beneficiary countries
exclusively from any one or any combination of the following:
(1) Fabrics or fabric components formed, or components
knit-to-shape, in the United States (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in the United
States).
(2) Fabrics or fabric components formed, or components
knit-to-shape, in one or more beneficiary countries, from
yarns formed in one or more beneficiary countries, if such
fabrics (including fabrics not formed from yarns, if such
fabrics are classifiable under heading 5602 or 5603 of the
HTS and are formed in one or more beneficiary countries) are
in chief weight of llama, or alpaca.
(3) Fabrics or yarn not produced in the United States or in
the region, to the extent that apparel articles of such
fabrics or yarn would be eligible for preferential treatment,
without regard to the source of the fabrics or yarn, under
Annex 401 of the NAFTA (short supply provisions). Any
interested party may request the President to consider such
treatment for additional fabrics and yarns on the basis that
they cannot be supplied by the domestic industry in
commercial quantities in a timely manner, and the President
must make a determination within 60 calendar days of
receiving the request from the interested party.
(4) Apparel articles sewn or otherwise assembled in one or
more beneficiary countries from fabrics or fabric components
formed or components knit-to-shape, in one or more
beneficiary countries, from yarns formed in the United States
or in one or more beneficiary countries (including fabrics
not formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in one or more
beneficiary countries), whether or not the apparel articles
are also made from any of the fabrics, fabric components
formed, or components knit-to-shape in the United States
described in paragraph 1. Imports of apparel made from
regional fabric and regional yarn would be capped at 3% of
U.S. imports growing to 6% of U.S. imports in 2006,
measured in square meter equivalents.
Senate amendment
Paragraph (2) of section 204(b) of the ATPA as amended by
section 3102 of the present bill extends duty-free treatment
to certain textile and apparel articles from ATPEA
beneficiary countries. The provision divides articles
eligible for this treatment into several different categories
and limits duty-free treatment to a period defined as the
``transition period.'' The transition period is defined in
paragraph (5) of section 204(b) of the ATPA as amended to be
the period from enactment of the present bill through the
earlier of February 28, 2006 or establishment of a FTAA.
In general, the different categories of textile and apparel
articles eligible for duty-free treatment are defined
according to the origin of the yarn and fabric from which the
articles are made. Under the first category, apparel sewn or
otherwise assembled in one or more ATPEA beneficiary
countries is eligible for duty-free treatment if it is made
exclusively from one or a combination of several sub-
categories of components, as follows:
(1) United States fabric, fabric components, or knit-to-
shape components, made from yarns wholly formed in the United
States;
(2) A combination of both United States and ATPEA
beneficiary country components knit-to-shape from yarns
wholly formed in the United States;
(3) ATPEA beneficiary country fabric, fabric components, or
knit-to-shape components, made from yarns wholly formed in
one or more ATPEA beneficiary countries, if the constituent
fibers are primarily llama or alpaca hair; and
(4) Fabrics or yarns, regardless of origin, if such fabrics
or yarns have been deemed, under the North American Free
Trade Agreement, not to be widely available in commercial
quantities in the United States. A separate provision of
section 204(b) of the ATPA as amended by the present bill
sets forth a process for interested parties to petition the
President for inclusion of additional yarns and fabrics in
the ``short supply'' list. This process includes obtaining
advice from the United States International Trade Commission
and industry advisory groups, and consultation with the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives.
A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except
socks) in one or more ATPEA beneficiary countries from yarns
wholly formed in the United States. To qualify under this
category, the entire article must be knit-to-shape--as
opposed to being assembled from components that are
themselves knit-to-shape.
A third category of apparel articles eligible for duty-free
treatment is apparel articles wholly assembled in one or more
ATPEA beneficiary countries from fabric or fabric components
knit, or components knit-to-shape in one or more ATPEA
beneficiary countries from yarns wholly formed in the United
States. The quantity of apparel eligible for this benefit is
subject to an annual cap. The cap is set at 70 million square
meter equivalents for the one-year period beginning March 1,
2002. The cap will increase by 16 percent, compounded
annually, in each succeeding one-year period, through
February 28, 2006.
[[Page H5953]]
Thus, the cap applied to this category in each year
following enactment will be as follows:
70 million square meter equivalents (SME) in the year
beginning March 1, 2002;
81.2 million SME in the year beginning March 1, 2003;
94.19 million SME in the year beginning March 1, 2004; and
109.26 million SME in the year beginning March 1, 2005.
A separate provision makes clear that goods otherwise
qualifying under the latter category will not be disqualified
if they happen to contain United States fabric made from
United States yarn.
A fourth category of apparel eligible for duty-free
treatment under the Senate bill is brassieres that are cut or
sewn, or otherwise assembled, in one or more ATPEA
beneficiary countries, or in such countries and the United
States. This separate category requires that, in the
aggregate, brassieres manufactured by a given producer
claiming duty-free treatment for such products contain
certain quantities of United States fabric.
A fifth category of textile and apparel eligible for duty-
free treatment is handloomed, handmade, and folklore
articles.
A final category of textile and apparel goods eligible for
duty-free treatment is textile luggage assembled in an ATPEA
beneficiary country from fabric and yarns formed in the
United States.
In addition to the foregoing categories, the bill sets
forth special rules for determining whether particular
textile and apparel articles qualify for duty-free treatment.
Conference agreement
In general the conferees agreed to follow the House
amendment on apparel provisions with the exception that the
House receded to the Senate on the treatment of textile
luggage. With respect to category 2 in the House bill
relating to fabrics or fabric components formed, or
components knit-to-shape, in one or more beneficiary
countries, from yarns formed in one or more beneficiary
countries, if such fabrics are in chief weight of llama,
or alpaca, conferees agreed to include vicuna and
calculate product eligibility based on chief value instead
of chief weight. Also, conferees agreed to cap imports of
apparel made from regional fabric and regional yarn
(category 4 in the House bill) at 2% of U.S. imports
growing to 5% of U.S. imports in 2006, measured in square
meter equivalents.
It is the intention of the conferees that in cases where
fabrics or yarns determined by the President to be in short
supply impart the essential character to an article, the
remaining textile components may be constructed of fabrics or
yarns regardless of origin, as in Annex 401 of the NAFTA. In
cases where the fabrics or yarns determined by the President
to be in short supply do not impart the essential character
of the article, the article shall not be ineligible for
preferential treatment under this Act because the article
contains the short supply fabric or yarn.
Special Origin Rule for Nylon Filament Yarn
House amendment
No provision.
Senate amendment
Articles otherwise eligible for duty-free treatment and
quota free treatment under the bill are not ineligible
because they contain certain nylon filament yarn (other than
elastomeric yarn) from a country that had an FTA with the
U.S. in force prior to January 1, 1995.
Conference agreement
House recedes.
Dyeing, Finishing and Printing Requirement
House amendment
New requirement that apparel made of U.S. knit or woven
fabric assembled in CBTPA country qualifies for benefits only
if the U.S. knit or woven fabric is dyed and finished in the
United States. Apparel made of U.S. knit or woven fabric
assembled in an Andean beneficiary country qualifies for
benefits only if the U.S. knit or woven fabric is dyed and
finished in the United States.
Senate provision
No provision.
Conference agreement
Senate recedes.
Penalties for Transshipment
Present law
The Tariff Act of 1930, as amended, provides for civil
monetary penalties for unlawful transshipment. These include
penalties under 19 U.S.C. 1592 for up to a maximum of the
domestic value of the imported merchandise or eight times the
loss of revenue, as well as denial of entry, redelivery or
liquidated damages for failure to redeliver the merchandise
determined to be inaccurately represented. In addition, an
importer may be liable for criminal penalties, including
imprisonment for up to five years, under section 1001 of
title 18 of the United States Code for making false
statements on import documentation.
Under the North American Free Trade Agreement (NAFTA),
Parties to the Agreement must observe Customs procedures and
documentation requirements, which are established in Chapter
5 of NAFTA. Requirements regarding Certificates of Origin for
imports receiving preferential tariffs are detailed in
Article 502.1 of NAFTA.
House amendment
Section 3103 requires that importers comply with
requirements similar in all material respects to the
requirements regarding Certificates of Origin contained in
Article 502.1 of the North American Free Trade Agreement
(NAFTA) for a similar importation from Mexico.
In addition, if an exporter is determined under the laws of
the United States to have engaged in illegal transshipment of
apparel products from an Andean country, then the President
shall deny all benefits under the bill to such exporter, and
to any successors of such exporter, for a period of two
years.
In cases where the President has requested a beneficiary
country to take action to prevent transshipment and the
country has failed to do so, the President shall reduce the
quantities of textile and apparel articles that may be
imported into the United States from that country by three
times the quantity of articles transshipped, to the extent
that such action is consistent with World Trade Organization
(WTO) rules.
Senate amendment
In amending, section 204(b) of the ATPA, section 3102 of
the present bill provides special penalties for transshipment
of textile and apparel articles from an ATPEA beneficiary
country. Transshipment is defined as claiming duty-free
treatment for textile and apparel imports on the basis of
materially false information. An exporter found to have
engaged in such transshipment (or a successor of such
exporter) shall be denied all benefits under the ATPA for
a period of two years.
The bill further provides penalties for an ATPEA
beneficiary country that fails to cooperate with the United
States in efforts to prevent transshipment. Where textile and
apparel articles from such country are subject to quotas on
importation into the United States consistent with WTO rules,
the President must reduce the quantity of such articles that
may be imported into the United States by three times the
quantity of transshipped articles, to the extent consistent
with WTO rules.
Conference agreement
Conference agreement follows House and Senate bill.
Import Relief Actions
Present law
The import relief procedures and authorities under sections
201-204 of the Trade Act of 1974 apply to imports from ATPA
beneficiary countries, as they do to imports from other
countries. If ATPA imports cause serious injury, or threat of
such injury, to the domestic industry producing a like or
directly competitive article, section 204(d) of the ATPA
authorizes the President to suspend ATPA duty-free treatment
and proclaim a rate of duty or other relief measures.
Under NAFTA, the United States may invoke a special
safeguard provision at any time during the tariff phase-out
period if a NAFTA-origin textile or apparel good is being
imported in such increased quantities and under such
conditions as to cause ``serious damage, or actual threat
thereof,'' to a domestic industry producing a like or
directly competitive good. The President is authorized to
either suspend further duty reductions or increase the rate
of duty to the NTR rate for up to three years.
House amendment
Under Section 3103 normal safeguard authorities under ATPA
would apply to imports of all products except textiles and
apparel. A NAFTA equivalent safeguard authorities would apply
to imports of apparel products from ATPA countries, except
that, United States, if it applied a safeguard action, would
not be obligated to provide equivalent trade liberalizing
compensation to the exporting country.
Senate amendment
The bill establishes similar textile and apparel safeguard
provisions based on the NAFTA textile and apparel safeguard
provision.
Conference agreement
Conference Agreement follows House and Senate bill.
Designation Criteria
Present law
In determining whether to designate any country as an ATPA
beneficiary country, the President must take into account
seven mandatory and 12 discretionary criteria, which are
listed in section 203 of the ATPA.
Under Section 203 of the ATPA, the President shall not
designate any country a ATPA beneficiary country if:
(1) The country is a Communist country;
(2) The country has nationalized, expropriated, imposed
taxes or other exactions or otherwise seized ownership or
control of U.S. property (including intellectual property),
unless he determines that prompt, adequate, and effective
compensation has been or is being made, or good faith
negotiations to provide such compensation are in progress, or
the country is otherwise taking steps to discharge its
international obligations, or a dispute over compensation has
been submitted to arbitration;
(3) The country fails to act in good faith in recognizing
as binding or in enforcing arbitral awards in favor of U.S.
citizens;
(4) The country affords ``reverse'' preferences to
developed countries and whether such treatment has or is
likely to have a significant adverse effect on U.S. commerce;
(5) A government-owned entity in the country engages in the
broadcast of copyrighted material belonging to U.S. copyright
[[Page H5954]]
owners without their express consent or the country fails to
work toward the provision of adequate and effective
intellectual property rights;
(6) The country is not a signatory to an agreement
regarding the extradition of U.S. citizens;
(7) If the country has not or is not taking steps to afford
internationally recognized worker rights to workers in the
country;
In determining whether to designate a country as eligible
for ATPA benefits, the President shall take into account
(discretionary criteria):
(1) An expression by the country of its desire to be
designated;
(2) The economic conditions in the country, its living
standards, and any other appropriate economic factors;
(3) The extent to which the country has assured the United
States it will provide equitable and reasonable access to its
markets and basic commodity resources;
(4) The degree to which the country follows accepted rules
of international trade under the World Trade Organization;
(5) The degree to which the country uses export subsidies
or imposes export performance or local content requirements
which distort international trade;
(6) The degree to which the trade policies of the country
are contributing to the revitalization of the region;
(7) The degree to which the country is undertaking self-
help measures to protect its own economic development;
(8) Whether or not the country has taken or is taking steps
to afford to workers in that country (including any
designated zone in that country) internationally recognized
workers rights;
(9) The extent to which the country provides under its law
adequate and effective means for foreign nationals to secure,
exercise, and enforce exclusive intellectual property rights;
(10) The extent to which the country prohibits its
nationals from engaging in the broadcast of copyrighted
material belonging to U.S. copyright owners without their
express consent;
(11) Whether such country has met the narcotics cooperation
certification criteria of the Foreign Assistance Act of 1961
for eligibility for U.S. assistance; and
(12) The extent to which the country is prepared to
cooperate with the United States in the administration of the
Act.
Under the ATPA the President is prohibited from designating
a country a beneficiary country if any of criteria (1)-(7)
apply to that country, subject to waiver if the President
determines that country designation will be in the U.S.
national economic or security interest. The waiver does not
apply to criteria (4) and (6). Under the ATPA criteria on (7)
is included as both mandatory and discretionary.
The President may withdraw or suspend beneficiary country
status or duty-free treatment on any article if he determines
the country should be barred from designation as a result of
changed circumstances. The President must submit a triennial
report to the Congress on the operation of the program. The
report shall include any evidence that the crop eradication
and crop substitution efforts of the beneficiary country are
directly related to the effects of the legislation.
House amendment
The House amendment provides that the President, in
designating a country as eligible for the enhanced ATPDEA
benefits, shall take into account the existing eligibility
criteria established under ATPA described above, as well as
other appropriate criteria, including: whether a country has
demonstrated a commitment to undertake its WTO obligations
and participate in negotiations toward the completion of the
FTAA or comparable trade agreement; the extent to which the
country provides intellectual property protection consistent
with or greater than that afforded under the Agreement on
Trade-Related Aspects of Intellectual Property Rights; the
extent to which the country provides internationally
recognized worker rights; whether the country has implemented
its commitments to eliminate the worst forms of child labor;
the extent to which a country has taken steps to become a
party to and implement the Inter-American Convention Against
Corruption; and the extent to which the country applies
transparent, nondiscriminatory and competitive procedures in
government procurement equivalent to those included in the
WTO Agreement on Government Procurement and otherwise
contributes to efforts in international fora to develop and
implement international rules in transparency in government
procurement.
Senate amendment
Section 3102(5) contains identical provisions.
Conference agreement
Conference Agreement follows the House and Senate
amendments. In evaluating a potential beneficiary's
compliance with its Yv7O obligations, the conferees expect
the President to take into account the extent to which the
country follows the rules on customs valuation set forth in
the WTO Customs Valuation Agreement. With respect to
intellectual property protection, it is the Conferees intent
that the President will also take into account the extent to
which potential beneficiary countries are providing or taking
steps to pro,ride protection of intellectual property rights
comparable to the protections provided to the United States
in bilateral intellectual property agreements.
Since April 1995, Colombia has applied a variable import
duty system, known as the ``price band'' system, on fourteen
basic agriculture products such as wheat, corn, and soybean
oil. An additional 147 commodities, considered substitutes or
related products, are subject to the price band system which
establishes ceiling, floor, and reference prices on imports.
The Conferees's view is that the price band system is non-
transparent and easily manipulated as a protectionist
device. In early 2000, the United States reached agreement
with Colombia in the WTO that Colombia would delink wet
pet food, the only finished product in this system, from
the price band system. In implementing the eligibility
criteria relating to market access and implementation of
WTO commitments, it is the Conferees intent that USTR
insist that Colombia implement its WTO commitment to
remove pet food from the price band tariff system and to
apply the 20% common external tariff to imported pet food.
With respect to whether beneficiary countries are following
established WTO rules, the Conferees believe it is important
for Andean governments to provide transparent and non-
discriminatory regulatory procedures. Unfortunately, the
Conferees know of instances where regulatory policies in
Andean countries are opaque, unpredictable, and arbritarily
applied. As such, it is the Conferees's view that Andean
countries that seek trade benefits should adopt, implement,
and apply transparent and non-discriminatory regulatory
procedures. The development of such procedures would help
create regulatory stability in the Andean region and thus
provide mere certainty to U.S. companies that would like to
invest in these countries.
Determination regarding retention of designation
Present law
Under Section 203(e) of the ATPA, the President may
withdraw or suspend a country's beneficiary country
designation, or withdraw, suspend, or limit the application
of duty-free treatment to particular articles of a
beneficiary country, due to changed circumstances.
House amendment
Section 3102(b) amends section 203(e) of the ATPA to
provide that President may withdraw or suspend ATPA
designation, or withdraw, suspend or limit benefits is a
country's performance under eligibility criteria are no
longer satisfactory.
Senate amendment
Identical.
Conference agreement
Conference agreement follows the House amendment and Senate
amendment.
Reporting Requirements
Present law
Provides for: (1) an annual report by the International
Trade Commission on the economic impact of the bill and; (2)
an annual report by the Secretary of Labor on the impact of
the bill with respect to U.S. labor. Also under present law,
USTR is required to report triannually on operation of the
program.
House amendment
Retains current law on reports.
Senate amendment
Senate bill requires same ITC and Labor reports as well as
an annual report by the Customs Service on compliance and
anti-circumvention on the part of beneficiary countries in
the area of textile and apparel trade. It also requires USTR
to report biannually on operation of the program.
Conference agreement
House recedes.
Petitions for Review
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 3102(e) of the bill directs the President to
promulgate regulations regarding the review of eligibility of
articles and countries under the ATPA. Such regulations are
to be similar to regulations governing the Generalized System
of Preferences petition process.
Conference agreement
House recedes.
SEC. 3104--TERMINATION OF DUTY-FREE TREATMENT
Present law
Duty-free treatment under the ATPA expires on December 4,
2001.
House amendment
Duty-free treatment terminates under the Act on December
31, 2006.
Senate amendment
Section 3103 of the bill amends section 208(b) of the ATPA
to provide for a termination date of February 28, 2006. Basic
ATPA benefits apply retroactively to December 4, 2001.
Conference agreement
House recedes on retroactivity for basic ATPA benefits;
Senate recedes on termination.
[[Page H5955]]
SEC. 3106--TRADE BENEFITS UNDER THE CARIBBEAN BASIN TRADE PARTNERSHIP
ACT (CBTPA) AND THE AFRICA GROWTH AND OPPORTUNITY ACT (AGOA)
Knit-to-shape Apparel
Present law
Draft regulations issued by Customs to implement P.L. 106-
200 stipulate that knit to-shape garments, because
technically they do not go through the fabric stage, are not
eligible for trade benefits under the act.
House amendment
Sec. 3106 and 3107 of the House bill amends AGOA and CBTPA
to clarify that preferential treatment is provided to knit-
to-shape apparel articles assembled in beneficiary countries.
Senate amendment
No provision.
Conference agreement
Senate recedes.
Present law
Draft regulations issued by Customs to implement P.L. 106-
200 deny preferential access to garments that are cut both in
the United States and beneficiary countries, on the rationale
that the legislation does not specifically list this
variation in processing (the so-called ``hybrid cutting
problem'').
House amendment
Sec. 3107 of H.R. 3009 adds new rules in CBTPA and AGOA to
provide preferential treatment for apparel articles that are
cut both in the United States and beneficiary countries.
Senate amendment
No provision.
Conference agreement
Senate recedes
CBI Knit Cap
Present law
P.L. 106-200 extended duty-free benefits to knit apparel
made in CBI] countries from regional fabric made with U.S.
yarn and to knit-to-shape apparel (except socks), up to a cap
of 250,000,000 square meter equivalents (SMEs), with a growth
rate of 16% per year for first 3 years.
House amendment
Sec. 3106 of H.R. 2009 would raise this cap to the
following amounts: 250.000,000 SMEs for the 1-year period
beginning October 1, 2001; 500,000,000 SMEs for the 1-year
period beginning on October 1, 2002; 850,000,000 SMEs for the
1-year period beginning, on October 1, 2003; 970,000,000 SMEs
in each succeeding 1-year period through September 30, 2009.
Senate amendment
No provision.
Conference agreement
Senate recedes.
CBI T-shirt cap
Present law
P.L. 106-200 extends benefits for an additional category of
CBI regional knit apparel products (T-shirts) up to a cap of
4.2 million dozen, growing 16% per year for the first 3
years.
House amendment
Section 3106 of H.R 3006 would raise this cap to the
following amounts: 4,200,000 dozen during the 1-year period
beginning October 1, 2001; 9,000,000 dozen for the 1-year
period beginning on October 1, 2002; 10,000,00 dozen for the
1-year period beginning on October 1, 2003; 12,000,000 dozen
in each succeeding 1-year period through September 30, 2009.
Senate amendment
No provision.
Conference agreement
Senate recedes
Present law
Section 112(b)(3) of the AGOA provides preferential
treatment for apparel made in beneficiary sub-Saharan African
countries from ``regional'' fabric (i.e., fabric formed in
one or more beneficiary countries) from yarn originating
either in the United States or one or more such countries.
Section 112(b)(3)(B) establishes a special rule for lesser
developed beneficiary sub-Saharan African countries, which
provides preferential treatment, through September 30, 2004,
for apparel wholly assembled in one or more such countries
regardless of the origin of the fabric used to make the
articles. Section 112(b)(3)(A) establishes a quantitative
limit or ``cap'' on the amount of apparel that may be
imported under section 112(b)(3) or section 112(b)(3)(B).
This ``cap'' is 1.5 percent of the aggregate square meter
equivalents of all apparel articles imported into the United
States for the year that began October 1, 2000, and increases
in equal increments to 3.5 percent for the year beginning
October 1, 2007.
House amendment
Section 3107 would clarify that apparel wholly assembled in
one or more beneficiary, sub-Saharan African countries from
components knit-to-shape in one or more such countries from
U.S. or regional yarn is eligible for preferential treatment
under section 112(b)(3) of AGOA. Similarly, Section 5 would
clarify that apparel knit-to-shape and wholly assembled in
one or more lesser developed beneficiary sub-Saharan African
countries is eligible for preferential treatment, regardless
of the origin of the yarn used to make such articles. The
House amendment also would increase the ``cap'' by changing
the applicable percentages from 1.5 percent to 3 percent in
the year that began October 1, 2000, and from 3.5 percent to
7 percent in the year beginning October 1, 2007.
Senate amendment
No provision.
Conference agreement
Conference agreement follows House Amendment accept the
increase in the cap is limited to apparel products made with
regional or U.S. fabric and yarn. No increases in amounts of
apparel made of third-country fabric over current law.
Present Law
AGOA was supposed to provide duty-free, quota-free
treatment to sweaters knit in African beneficiary countries
from fine merino wool yarn, regardless of where the yarn was
formed. AGOA was supposed to provide duty-free, quota-free
treatment to sweaters knit in African beneficiary countries
from fine merino wool yarn, regardless of where the yarn was
formed. However, due to a drafting problem, the wrong
diameter was included, making it impossible to use the
provision.
House amendment
Section 3107 corrects the yarn diameter in the AGOA
legislation so that sweaters knit to shape from merino wool
of a specific diameter are eligible.
Senate amendment
No provision.
Conference agreement
Senate recedes.
Africa: Namibia and Botswana
Present law
The GDBs of Botswana and Namibia exceed the LLDC limit of
$1500 and therefore these countries are not eligible to use
third country fabric for the transition period under the AGOA
regional fabric country cap.
House amendment
Section 5 allows Namibia and Botswana to use third country
fabric for the transition period under the AGOA regional
fabric country cap.
Senate amendment
No provision.
Conference agreement
Senate recedes.
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
sec. 4101--extension of generalized system of preferences
Expired law
Section 505 of the Trade Act of 1974, as amended, provides
that no duty-free treatment under Title V (the Generalized
System of Preferences) shall remain in effect after September
30, 2001.
House bill
The House amendment to H.R. 3009 would amend section 505 of
the Trade Act of 1974 to authorize an extension through
December 31, 2002. It would also provide retroactive relief
in that, notwithstanding section 514 of the Tariff Act of
1930 or any other provision of law, the entry of any article
to which duty-free treatment under Title V of the Trade Act
of 1974 would have applied if the entry had been made on
September 30, 2001, and was made after September 30, 2001,
and before the enactment of this Act, shall be liquidated or
reliquidated as free of duty and the Secretary of Treasury
shall refund any duty paid, upon proper request filed with
the appropriate Customs officer, within 180 days after the
date of enactment.
Senate amendment
The Senate amendment authorizes an extension of GSP through
December 31, 2006. The extension is retroactive to September
30, 2001, permitting importers to liquidate or reliquidate
entries made since that date and to seek a return of duties
paid on goods that would have entered the United States free
of duty, but for expiration of GSP.
The Senate Amendment also amends the definition of
``internationally recognized worker rights'' set forth in the
GSP statute (section 507(4) of the Trade Act of 1974).
Specifically, it adds to that definition ``a prohibition on
discrimination with respect to employment and occupation''
and a ``prohibition of the worst forms of child labor.''
These two prohibitions come from the International Labor
Organization's 1998 Declaration on Fundamental Principles and
Rights at Work, which defines certain worker rights as
``fundamental.''
The GSP statute identifies certain criteria that the
President must take into account in determining whether to
designate a country as eligible for GSP benefits. Conversely,
a country's lapse in compliance with one or more of these
criteria may be grounds for withdrawal, suspension, or
limitation of benefits. Whether a country is taking steps to
afford its workers internationally recognized worker rights
is one of those criteria. The Senate Amendment seeks to make
the concept of ``internationally recognized worker rights''
as defined for GSP consistent with the concept as defined by
the ILO.
Finally, the Senate Amendment establishes a new eligibility
criterion for GSP: ``A country is ineligible for GSP if it
has not taken steps to support the efforts of the United
States to combat terrorism.''
Conference agreement
The Conference agreement authorizes an extension of GSP
through December 3 1, 2006. Conferees approved the Senate
provision to include a prohibition on the worst forms of
child labor in the definition of internationally recognized
worker rights in Section
[[Page H5956]]
507(a) of the Trade Act of 1974. Conferees declined to
include the Senate provision on discrimination with respect
to employment in the definition of ``international recognized
worker rights under Sec. 507 (a) of the Trade Act of 1974.
Agreement follows the House and the Senate bill with respect
to providing retroactive relief.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
sec. 5101--wool manufacturer payment clarification and technical
corrections act
Present law
Title V of the Trade and Development Act of 2000 (Pub. L.
No. 106-200) included certain tariff relief for the domestic
tailored clothing and textile industries. The relief was
largely aimed at reducing the harmful affects of a ``tariff
inversion''--i.e., a tariff structure that levies higher
duties on the raw material (such as wool fabric) than on the
finished goods (such as mens' suits). A component of the
relief to the U.S. tailored clothing and textile industry was
a refund of duties paid in calendar year 1999, spread out
over calendar years 2000, 2001 and 2002. Pub. L. No. 106-
2000, Sec. 505.
House amendment
No provision.
Senate amendment
The Senate bill amends section 505 of the Trade and
Development Act of 2000 to simplify the process for refunding
to eligible parties duties paid in 1999. Specifically, it
creates three special refund pools for each of the affected
wool articles (fabric, yarn, and fiber and top). Refunds for
importing manufacturers will be distributed in three
installments--the first and second on or before the date that
is 45 days after the date of enactment of the Wool
Manufacturer Payment and Clarification and Technical
Corrections Act, and the third on or before April 15, 2003.
Refunds for nonimporting manufacturers will be distributed in
two installments--the first on or before the date that is 120
days after the date of enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act, and the
second on or before April 15, 2003.
The provision also streamlines the paperwork process, in
light of the destruction of previously filed claims and
supporting information in the September 11, 2001 attacks on
the World Trade Center in New York, New York. Finally, the
provision identifies all persons eligible for the refunds.
Conference agreement
The House recedes to the Senate.
sec. 5102--duty suspension on wool
Present law
Sections 501(a) and (b) of the Trade and Development Act of
2000 provide temporary duty reductions for certain worsted
wool fabrics through 2003.
Section 501(d) limits the aggregate quantity of worsted
wool fabrics entered under heading 9902.51.11 from January 1
to December 31 of each year, inclusive, to 2,500,000 square
meter equivalents, or such other quantity proclaimed by the
President pursuant to section 504(b)(3) of the Trade and
Development Act. Further, the section limits the aggregate
quantity of worsted wool fabrics entered under heading
9902.51.12 from January 1 to December 31 of each year,
inclusive, to 1,500,000 square meter equivalents, or such
other quantity proclaimed by the President pursuant to
section 504(b)(3) of the Trade and Development Act.
House amendment
No provision.
Senate bill
The Senate bill extends the temporary duty reductions on
fabrics of worsted wool from 2003 to 2005. The provision
increases the limitation on the quantity of imports of
worsted wool fabrics entered under heading 9902.51.11 to
3,500,000 square meter equivalents in calendar year 2002, and
4,500,000 square meter equivalents in calendar year 2003.
Imports of worsted wool fabrics entered under heading
9902.51.12 are increased to 2,500,000 square meter
equivalents in calendar year 2002, and 3,500,000 square meter
equivalents in calendar year 2003.
The bill extends the payments made to manufacturers under
section 505 of the Trade and Development Act of 2000 and
requires an affidavit that the manufacturer will remain a
manufacturer in the United States as of January 1 of the year
of payment. The two additional payments will occur as
follows: the first to be made after January 1, 2004, but on
or before April 15, 2004, and the second after January 1,
2005, but on or before April 15, 2005.
Finally, the bill extends the ``Wool Research Trust Fund''
for two years through 2006.
Conference agreement
The House recedes to the Senate.
Subtitle B--Other Provisions
SEC. 5201--FUND FOR WTO DISPUTE SETTLEMENT
Present law
No applicable section.
House amendment
The provision authorizes a settlement fund within the
United States Trade Representative's Office in the amount of
$50 million for the use in settling disputes that occur
related to the World Trade Organization. The Trade
Representative must certify to the Secretary of the Treasury
that the settlement is in the best interest of the United
States in cases of not more than $10 million. For cases above
$10 million, the Trade Representative must make the same
certification to the United States Congress.
Senate bill
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 5202--CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN
NUCLEAR FACILITIES
Present law
Under present law, certain steam or other vapor generating
boilers used in nuclear facilities imported into the United
States prior to December 31, 2003 are charged a duty rate of
4.9 percent ad valorem. This rate took effect pursuant to
section 1268 of Public Law Number 106-476 (``Tariff
Suspension and Trade Act of 2000''). Previously, the rate had
been 5.2 percent ad valorem.
House amendment
No provision.
Senate amendment
Section 203 of the Senate amendment changes the duty rate
on certain steam or other vapor generating boilers used in
nuclear facilities to zero for such goods entered, or
withdrawn from warehouse for consumption, on or after January
1, 2002, and on or before December 31, 2006. The provision
was intended to lower the cost of inputs into the operation
of nuclear facilities and thereby lower the cost of energy to
consumers.
Committee agreement
The House recedes to the Senate.
SEC. 5203--SUGAR TARIFF RATE QUOTA CIRCUMVENTION
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate bill establishes a sugar anti-circumvention
program which requires the Secretary of Agriculture to
identify imports of articles that are circumventing tariff-
rate quotas on sugars, syrups, or sugar-containing products
imposed under chapters 17, 18, 19, and 21 of the Harmonized
Tariff Schedule. The Secretary shall then report to the
President articles found to be circumventing such tariff-rate
quotas. Upon receiving the Secretary's report, the President
shall, by proclamation, include any identified article in the
appropriate tariff-rate quota provision of the Harmonized
Tariff Schedule.
Conference agreement
Conferees agreed to a provision directing the Secretary of
Agriculture and the Commissioner of Customs shall monitor for
sugar circumvention and shall report and make recommendations
to Congress and the President.
This provision amends the Harmonized Tariff Schedule of the
United States (''HTSUS'') to make clear in the statute an
important element of the ruling of the Court of Appeals for
the Federal Circuit in Heartland By-Products, Inc. v. United
States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses
is one of the foreign substances that must be excluded when
calculating the percentage of soluble non-sugar solids under
subheading 1702.90.40.
The provision requires the Secretary of Agriculture and the
Commissioner of Customs to establish a monitoring program to
identify existing or likely circumvention of the tariff-rate
quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The
Secretary and the Commissioner shall report the results of
their monitoring to Congress and the President every six
months, together with data and a description of developments
and trends in the composition of trade provided for in such
chapters. This report will be made public. The report will
discuss any indications that imports of articles not subject
to the tariff-rate quotas are being used for commercial
extraction of sugar in the United States. Imports of so-
called ``high-test molasses'' currently classified under
subheading 1703.10.30 will be examined particularly closely
for such indications.
Finally, the Secretary and the Commissioner will include in
the report their recommendations for ending circumvention,
including their recommendations for legislation. The Managers
emphasize that rapid action to stop circumvention is the best
way to prevent a problem from developing and that quick
administrative or legislative action is preferable to
protracted procedures and litigation, as occurred in the
Heartland case.
From the Committee on Ways and Means, for consideration of
the House amendment and the Senate amendment, and
modifications committed to conference:
William Thomas,
Phillip M. Crane,
From the Committee on Education and the Workforce, for
consideration of sec. 603 of the Senate amendment, and
modifications committed to conference:
John Boehner,
Sam Johnson,
From the Committee on Energy and Commerce, for consideration
of sec. 603 of the Senate amendment, and modifications
committed to conference:
[[Page H5957]]
Billy Tauzin,
Michael Bilirakis,
From the Committee on Government Reform, for consideration of
sec. 344 of the House amendment, and sec. 1143 of the Senate
amendment, and modifications committed to conference:
Dan Burton,
Bob Barr,
From the Committee on the Judiciary, for consideration of
secs. 111, 601, and 701 of the Senate amendment, and
modifications committed to conference:
F. James Sensenbrenner,
Howard Coble,
From the Committee on Rules, for consideration of secs. 2103,
2105, and 2106 of the House amendment and secs. 2103, 2105,
and 2106 of the Senate amendment, and modifications committed
to conference:
David Dreier,
John Linder,
Manager on the Part of the House.
Max Baucus,
John Breaux,
Chuck Grassley,
Orrin Hatch,
Managers on the Part of the Senate.
H. Res. 507
Resolved, That the requirement of clause 6(a) of rule XIII
for a two-thirds vote to consider a report from the Committee
on Rules on the same day it is presented to the House is
waived with respect to any resolution reported on the
legislative day of Friday, July 26, 2002, providing for
consideration or disposition of any of the following
measures:
(1) A conference report to accompany the bill (H.R. 3009)
to extend the Andean Trade Preference Act, to grant
additional trade benefits under the Act, and for other
purposes.
(2) A conference report to accompany the bill (H.R. 3295)
to establish a program to provide funds to States to replace
punch card voting systems, to establish the Election
Assistance Commission to assist in the administration of
Federal elections and to otherwise provide assistance with
the administration of certain Federal election laws and
programs, to establish minimum election administration
standards for States and units of local government with
responsibility for the administration of Federal elections,
and for other purposes.
(3) A conference report to accompany the bill (H.R. 333) to
amend title 11, United States Code, and for other purposes.
The SPEAKER pro tempore. The gentleman from New York (Mr. Reynolds)
is recognized for 1 hour.
Mr. REYNOLDS. Mr. Speaker, for purposes of debate only, I yield the
customary 30 minutes to my colleague, the gentleman from Texas (Mr.
Frost), the ranking member of the Committee on Rules, pending which I
yield myself such time as I may consume. During consideration of this
resolution, all time yielded is for purposes of debate only.
(Mr. REYNOLDS asked and was given permission to revise and extend his
remarks.)
Mr. REYNOLDS. Mr. Speaker, House Resolution 507 waives clause 6(a) of
rule XIII requiring a two-thirds vote to consider a rule on the same
day it is reported from the Committee on Rules.
The rule applies the waiver to a special rule reported on the
legislative day of Friday, July 26, 2002, providing for consideration
or disposition of the conference report to accompany the following
bill: H.R. 3009, the Trade Act of 2002.
The rule will allow this body to consider the conference agreement on
the important topic of trade promotion authority. The rule moves the
process forward so this body can work its will on a long overdue piece
of legislation.
Mr. Speaker, there are only a few months remaining in the 107th
Congress. In the past 2 years, we have had many accomplishments, but
success in the area of expanding trade and opening markets is yet to be
realized. But the power to change that is within our reach. I ask my
colleagues to join me in taking the first step in the final leg of our
efforts to bring to fruition this critical piece of legislation.
I strongly urge my colleagues to support this rule so that we will be
able to bring up this important issue.
Mr. Speaker, I reserve the balance of my time.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
(Mr. FROST asked and was given permission to revise and extend his
remarks.)
Mr. FROST. Mr. Speaker, Democrats strongly support free and fair
trade that grows the economy and benefits American workers. At the same
time, we insist on fulfilling our responsibility to ensure a level
playing field for American businesses, farmers, and workers; and we
insist on ensuring that Americans who lose their jobs because of trade
are given the assistance and opportunity they need to adapt to the new
economy.
Unfortunately, this trade promotion authority conference agreement
fails to accomplish these goals, and therefore, risks future trade
agreements negotiated under it. That much we know about the conference
report, Mr. Speaker.
But since the conference report has not been filed, and since the
Committee on Rules has not reported out the rule for consideration of
the conference report, we have no way of knowing what is in this
conference report that we are now clearing the parliamentary way for.
That is a major problem for this House of Representatives because
Republican leaders now want to pass this martial law, thereby waiving
the House rule that gives every Member 1 day to review legislation
before it comes to the floor. If that occurs, then the overwhelming
majority of the Members of this House will have absolutely no way of
knowing what is in this conference report.
Now, we would like to be able to trust what the Republican leadership
says is in the bill, but they have been caught red-handed on too many
occasions when they tried to sneak controversial provisions into big
pieces of legislation like this.
As I understand it, they have even put such controversial provisions
in this agreement that committee chairmen are objecting to it in the
strongest possible terms, this after the Republican leadership snuck
into the homeland security bill provisions that were objectionable to
many Members of this body, but who did not know they were there until
the bill was on the floor.
So the Republican leadership has lost the credibility to come to the
House floor and say, trust us. For that reason, I urge my colleagues to
defeat this martial law rule. That is the only way Members will be able
to figure out what is really in this conference report.
Mr. Speaker, I reserve the balance of my time.
Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, first of all, both Republicans and Democrats have told
me that the Committee on Ways and Means conference report has been on
its Web site since this afternoon.
Two, as is always customary in the Committee on Rules, there will be
notice to, first, the Committee on Rules itself, which will have an
ample time to see the legislation, and then we will hold a hearing and
move forward on the decision of granting a rule on the legislation.
To my knowledge, in the time I have been here, that provides not only
the Web site access to the entire membership, but also close scrutiny
by both the Committee on Rules staff and the entire majority and
minority staffs that choose to look at it and have comments, both in
the Committee on Rules and then, finally, as we had that debate on the
floor.
Certainly there is no secret that we have been in a long journey
looking to have an opportunity to have trade legislation passed here in
the House. We now have a conference report that has brought a consensus
not only of a Republican majority here in the House, but Republican and
Democrats who supports free trade in this body and in the other body.
So we will have plenty of opportunity for our colleagues, both the
majority and the minority, to review the legislation. Some have already
done so as they have gone to the Committee on Ways and Means Web site.
Others will have the opportunity through the process this evening.
Mr. Speaker, I reserve the balance of my time.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would make a couple of observations. First of all, the
gentleman has just stated that, well, the conference report is on the
Web site. I would ask, is that the conference report that is going to
be signed by the conferees? And if so, why has it not been signed
earlier in the evening?
Apparently someone on the gentleman's side had some reservations
about what was posted on the Web site and was not sure that that was
going to be the final product.
Mr. DREIER. Mr. Speaker, will the gentleman yield?
[[Page H5958]]
Mr. FROST. I yield to the gentleman from California.
Mr. DREIER. I thank my friend for yielding to me, Mr. Speaker.
Let me say that, in fact, all of the conferees have signed that
report, and the gentleman is correct that it has yet to be filed; but
at 4 o'clock this afternoon a hard copy was delivered to the minority
members of the Committee on Rules; and as has been said by the
gentleman from New York (Mr. Reynolds), it has been made available on
the Web site.
That is the report that will in fact be filed. This is the report
that was agreed to by both the Members of the House and Senate in the
conference.
Mr. FROST. Mr. Speaker, reclaiming my time, I would point out that
the gentleman from Florida is a member of the conference committee and
has not signed the conference report.
Mr. HASTINGS of Florida. Mr. Speaker, will the gentleman yield?
Mr. FROST. I yield to the gentleman from Florida.
Mr. HASTINGS of Florida. Mr. Speaker, I would say to the chairman
that my office was called earlier and I said that I would be happy to
consider signing it, and they told me they would get back to me. In
fact, I still have not signed it. My staff said if we saw it, we would
sign it. So, Mr. Speaker, I have not signed the conference report, and
I am a member of the conference committee on trade promotion authority.
Mr. DREIER. If the gentleman would further yield, when I said
everyone has signed, I know that my friend was raising the concern
about majority Members signing the issue. That was what I meant, all of
the majority Members of the House who were conferees have in fact
signed.
Mr. FROST. Reclaiming my time, everyone on that side of the aisle.
When the gentleman says everyone, he means everyone on that side of the
aisle.
Mr. DREIER. If the gentleman will yield, what I will say is that when
the gentleman said there was a particular concern about a signature and
was looking to this side of the aisle, I inferred from the way he said
it that he was concerned about a signature from this side of the aisle.
The fact of the matter is the majority Members have signed the
conference report. Does that answer the question that the gentleman
posed? I thank my friend for yielding to me.
Mr. FROST. Mr. Speaker, reclaiming my time, it is curious that this
document has been somewhere in cyberspace since 4 o'clock and yet has
not been made available to the House, apparently because someone was
thinking about making a change in that document. Otherwise, it would
have been made available to the House.
I would point out that one of the earlier speakers said, well, the
Committee on Rules members will have plenty of time to review this
document. Actually, we will have 15 minutes. We have been given 15
minutes from the time we get the document until the Committee on Rules
will be meeting.
Mr. Speaker, I reserve the balance of my time.
Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I think it is important that we review again that we are
not going to do anything other than the possibility of having a late
decision of debate, but on this day, since 4 p.m., the minority staff
of the Committee on Rules has been given a hard copy of the conference
report. We also know that it has been on the Web site. We also know
that some Members have started this and reviewed it early, and very
thoroughly; other Members may not have had an opportunity to open their
Web site to garner the information.
We are moving here methodically. The methodical aspect is first of
all having the debate on the same-day rule, which the Committee on
Rules granted this morning. We now bring that to the body as a whole
for their consideration. We will then schedule a Committee on Rules
meeting, of which there will be a hearing to consider a conference
report that has been made available since this afternoon to the entire
body and has a majority of signatures, as the chairman of the Committee
on Rules has indicated, from what he is aware of, and that the minority
of the Committee on Rules has had documentation, hard copy, written,
before them since 4 p.m. today.
So as we move forward, my hope is that the Congress, this body, can
make a decision of whether we will continue on a same-day rule to take
up the trade promotion authority and have the opportunity to move
forward with consideration of what has been a long journey, a process
that has had the House deliberate, the other body deliberate, a
conference report negotiated off and on throughout weeks, and now an
opportunity for the House to consider an up-or-down on that conference
report that has been put together not by just the majority of the House
or the other body, but by a consensus of those who support free trade.
The votes, as they have been in the past in this instance, have been
of those who support free trade, both Republican and Democrat, and
those who are opposed to free trade.
Mr. Speaker, I yield such time as he may consume to the gentleman
from California (Chairman Dreier), from the Committee on Rules.
Mr. DREIER. Mr. Speaker, I thank my friend for yielding time to me.
I would like to take a few minutes to describe how we got to where we
are.
{time} 2330
We passed the North American Free Trade Agreement 9 years ago and so
we are rapidly approaching the tenth anniversary of the passage of the
North American Free Trade Agreement. And, clearly, the implementation
of NAFTA has been one of the greatest things that has happened in the
relationship for this hemisphere. We have been able to take tremendous
strides in enhancing the economic relationship among Canada, the United
States, and Mexico with the North American Free Trade Agreement. We
have seen free trade between the United States and Mexico more than
double in the period of time that we have put NAFTA into place. And I
think one of the most important products has been the successful
implementation of full democratization in Mexico. We all know that they
had 71 years of one-party rule and bringing about the economic
liberalization that came under the leadership of President Miguel de la
Madrid and Carlos Salinas went a long way towards encouraging
democratization. We saw political liberalization follow economic
liberalization. And we know that while there are still very serious
problems, we have migration problems, we have water problems, other
issues that exist between the United States and Mexico, clearly the
election of President Fox is something that was heralded in that
country and here in the United States and throughout the hemisphere
and, for that matter, throughout the world.
The reason I point to that is it is very clear that expanding trade
is one of the most important vehicles toward expanding democratization.
And that is really what this is all about.
We are here right now having spent nearly a decade because we saw the
authority, what was known as Fast Track, what we now describe as Trade
Promotion Authority, expire shortly after implementation of the North
American Free Trade Agreement. And during that period of time, I am
very proud of the fact that through the Clinton presidency, I worked
closely with President Clinton, with his U.S. Trade Representative
Mickey Cantor and then Charlene Barshefski to try to grant President
Clinton the authority to proceed with NAFTA-like agreements so that we
could establish what our goal is here, and that is a free trade area of
the Americas. And we know that there are very serious problems that
exist in South America, in Venezuela, in Argentina and other countries.
And virtually everyone agrees that if we were to have the chance to
expand this NAFTA concept to a free trade area of the Americas, we
would be able to more effectively address the political problems and
economic problems that exist in those countries and, similarly, in
other parts of the world, we have those challenges and, of course, the
national security question for us.
We have just successfully passed a bill establishing a Department of
Homeland Security, and that is very important in dealing with our
security here. But we know that economic liberalization and
democratization are very important to encourage in other parts of the
world where, in fact, terrorist threats have begun.
And so I think that the vote that we are going to cast granting this
same-
[[Page H5959]]
day rule will allow us to bring up and consider the bill that grants
President Bush trade promotion authority.
Now, Mr. Speaker, I underscored the fact I, as a Republican, I am a
very proud Republican and no one has ever questioned my Republican
credentials. Some did when I worked so hard to try to grant President
Clinton trade promotion authority, but I believed was the right thing
to do. And that is why I like to think that Democrats who join and
understand of the very important benefits to economic liberalization
and the expansion of freedom and democracy will join with us in
bringing us support in a bipartisan way, which trade has traditionally
been. But we are right now at 11:34 in the evening still working at
this, trying to address some concerns that are out there because we, as
conferees, went through a laborious process trying to address concerns
and, of course, we have a Democratic United States Senate and we had to
work closely with the senators to come to an agreement. And I believe
that the agreement that has been struck is deserving of wide bipartisan
support, and so we have taken this step to establish same-day
consideration.
We are on what we certainly hope is the last day of this type in the
Congress before we go into our summer break, and I hope that Members
will join in providing support for this same-day consideration of the
rule and support for this very important trade promotion authority bill
that we hope to be considering in the not too distant future.
Mr. FROST. Mr. Speaker, I yield 9 minutes to the gentleman from North
Carolina (Mr. Watt).
Mr. WATT of North Carolina. Mr. Speaker, I thank the gentleman for
yielding me time, albeit reluctantly. I am sure everybody wants to go
home. And this is probably not the greatest time to rise to speak on
the floor of the House because everybody does want to go home.
I should say at the outset that I have not been a supporter of fast
track legislation, either giving that authority to a Democratic
president or giving it to a Republican president, so for me this is not
a partisan issue. But I presume that that part of this will be debated
during the debate on the bill itself. I am not here to address the
merit or lack of merits of fast track authority.
What I am here to address is the martial law rule that we are being
called upon to vote upon this evening, because I object vigorously to
martial law. And quite often when we are in the last days of a session
and the majority is trying to get martial law, I go out of my way to
come to the floor to speak on this concept of martial law.
Mr. Speaker, I practiced law for 22 years and there was nothing that
I hated more in the practice of law than to start the trial of a case
on a Monday or a Tuesday and have that case wind through the course of
the week and get to Friday midday or Friday midafternoon and have that
case still going on. Because what I realized was that whether it was
somebody's property that was involved or whether it was somebody's
liberty that was involved, everybody was tired, and the court and the
judge and the lawyers wanted to start taking short-cuts. And when the
case went to the jury, the jury was going to want to go home. And
despite the importance of the matter before that court, you simply
could not get justice late on a Friday afternoon.
So here we are at 11:30 on a Friday night, and my colleagues come out
on the floor and say we want to declare martial law which is to say we
want you to give us the authority to consider a bill tonight that
nobody has had a chance to read.
Now they say they have posted it on a web site sometime this
afternoon, but I am sure people who have been following this debate and
session on C-SPAN have realized that this Congress has been in session
right here on the floor of the House all afternoon debating a very,
very important bill. And I would grant you, I would bet you that there
is not a person in this body that has looked at this bill that we are
getting ready to consider under martial law, same-day consideration.
The whole rationale of the rule that says you will not consider a bill
the same day that it is filed is to allow democracy to work, to allow
the deliberative process to work, to allow the very thing that I
objected to when I was practicing law, a compromise of justice, a
compromise of democracy, to keep that from taking place.
That is why we have the rules of the House. And despite that fact,
here we are, my colleagues. They took an hour and a half recess before
they even brought this to the floor because they did not know what was
in the bill themselves.
I know I am getting on everybody's nerves, but this is about
democracy and this is about the ability to read and understand what we
are being called upon to vote. Just like when I was practicing law for
22 years, it was about somebody's property or somebody's liberty, this
is about our democracy. That is what this is about. So heaven forbid
that they give me 2 more minutes to tell you what this is about.
This is about the quality of our democracy, and whether my colleagues
can go home tomorrow or today, actually, we are going home tomorrow
regardless of what happens here; maybe it is just later tomorrow, and
so it would not make a whole heck of a lot of difference.
Mr. DREIER. Mr. Speaker, will the gentleman yield?
Mr. WATT of North Carolina. I yield to the gentleman from California.
Mr. DREIER. Mr. Speaker, I thank my friend for yielding, and I
appreciate many of the points he has raised. I have prided myself to
being strongly committed in minority rights, having served 14 years on
the minority.
Mr. WATT of North Carolina. This is not about minority rights. This
is about democracy and the rights of every Member of this House.
Mr. DREIER. Absolutely. Do not get me wrong. I am also concerned
about majority rights, too, especially when I am a member of the
majority, too. But I am also sensitive to the minority rights. But,
again, at 4:00 this afternoon the gentleman's office received by e-mail
a copy of this conference report which we are prepared to file now. The
gentleman from California (Mr. Thomas) is here, who is chairman of the
conference, and he is prepared to file this report, and I hope that we
will be able to move ahead with its consideration. It has been 10
hours.
Mr. WATT of North Carolina. Reclaiming my time, I presume what that
means is that what the gentleman is saying is what we are about to vote
on. I appreciate him clarifying it. I had thought the gentleman just
said that this thing was just put up on a web site at 3:00 this
afternoon. Now I am being told that he is getting ready to file it so
we can read about it while we are debating it on the floor of the
House.
This is about the quality of our democracy and whether we have the
time to read a bill that we were getting right now. There is important
stuff we are doing here. Certainly no less, no less important than the
things that were being deliberated in the courtroom. And all I am
asking is for my colleagues to realize that and to take the time and to
give us the time to read what it is we are being asked to vote on.
And with that, I do not know how I can be more basic than that, but I
am sure it will not make any difference to my colleagues.
Mr. REYNOLDS. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Thomas), the chairman of the Committee on Ways and
Means.
Mr. THOMAS. Mr. Speaker, I am pleased to announce that this is an
additional step in a commitment this Congress made some time ago to try
to move to a paperless Congress. More than 8 hours ago Members received
in each of their offices an electronic copy of the document that was
just delivered. If Members were concerned about the content of this
particular report, they could have been reading it for 8 hours.
{time} 2345
And in fact that is one of the things that this Congress can do in
the 21st century, and that is instead of dealing with massive amounts
of paper, 6 pounds delivered to each office, which is not read anyway,
we have provided an electronic forum in which it is easily disseminated
among staff and Members and that it is a far better way to deal with
these issues. In addition to that, it allows Members for more than 8
hours to consult the bill in which we are now bringing up the rule to
allow us to consider. That is the way this
[[Page H5960]]
Congress should be operating in the 21st century.
If someone believes they should be lugging around 6 pounds of paper
when it has been in their office for 8 hours, I would urge Members to
acquaint themselves with the computer operators and with the staff if
the folks are not computer literate, because for more than 8 hours this
identical bill has been in their offices.
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Matsui), a member of the Committee on Ways and Means.
Mr. MATSUI. Mr. Speaker, I thank the gentleman from Texas (Mr. Frost)
for yielding me this time.
I would like to clarify some misunderstanding because I heard at the
time as I was sitting in my office that the documents were delivered at
three o'clock or it was posted on the Web site at four o'clock and that
would have undoubtedly then would have given about 7 hours and 45
minutes for us to review the documents in the middle of the Homeland
Security Department legislation as it was moving through there.
The reality of it is, and I think the gentleman from California (Mr.
Thomas) would have to verify this or at least his staff would have to
verify this, or perhaps the gentleman from New York would, we were not
notified that the documents, all 360 pages, would be posted on the Web
site until 6:53 or almost seven o'clock in the evening. And as all of
my colleagues know, we were in the final stages of debate on the
Homeland Security Department at that time; so we have actually only had
a little over 4 hours and 45 minutes to review this document, and I
have to tell my colleagues that one of the things that troubles me
about this is that this is a significant major piece of legislation,
and I think that Members on both sides of the aisle, particularly
Members on my Republican side of the aisle, because we are going to be
discussing textile rules, we are going to be discussing issues like
trade adjustment assistance, which could cost considerable sums of
money.
We are going to be discussing health care issues that were going to
go to displaced workers, and it would seem like both parties would want
an opportunity to review and vet this legislation before we adopt it,
presumably this evening at 2 or 3 in the morning. And I will tell my
colleagues why this is important is because the other body this week
will be taking this legislation up and they will have a chance to
review it, and all the flaws of this bill will come out, and some of my
colleagues might be embarrassed if they, in fact, vote for this
legislation, sight unseen, and it will be sight unseen.
For example, let me just throw out the trade adjustment assistance
that many people made a big thing about. The fact of the matter is that
if a company closes and leaves the United States and goes, let us say,
to China, which many companies are doing at this time, those employees
that are displaced from that factory will not be eligible for trade
adjustment assistance or the health care benefits. Most of my
colleagues on my side of the aisle who have been told this are
absolutely astonished because they were told when a plant closes, the
employees are going to be able to receive assistance, and that is just
not necessarily true in most cases.
And the gentleman from California (Mr. Thomas), if all of us recall,
just two weeks ago, introduced legislation to provide $90 billion at a
time when we are all facing a great deal of trouble on Wall Street, $90
billion worth of tax cuts to U.S. companies that would go offshore, and
so essentially this bill would encourage companies to go to China
offshore, and the tax bill that the gentleman from California (Mr.
Thomas) has offered would do the same thing.
I find it kind of incomprehensible that Members who may not quite
understand the implication of this, it could hurt their hometown
companies, would end up voting for this and then next week maybe find
out that this bill does not say what many of the Members suggested it
might say. So I think this martial law proposal at this time in this
evening for this kind of bill is pretty outrageous, and it should not
be really offered tonight.
Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
I am proud to be a member of the Committee on Rules. We are usually
the last here. This week we have been the last here and the first here.
We can continue and use the entire full hour on this same-day
resolution and have all our colleagues debate the same day. And then we
will have a consensus on whether the House approves of the same-day
rule or they do not, and then we will move into the opportunity to have
the Committee on Rules meet because they were noticed last evening.
At eight this morning, we put out this same-day rule which led the
indication that we would be considering the trade bill which many in
the House knew was being negotiated actively by the entire Conference
Committee. So we will continue and do the full hour here. We will then
have a Committee on Rules meeting and we will do a full hour on the
rule and then we will take it to debate, if that is what the body
chooses to do.
I am prepared to yield back the balance of my time if the ranking
member yields his time back and we can move forward, or we will
continue to take the hour. So I will ask the ranking member if he has
further speakers or whether he wants to yield his time, in which I will
follow.
Mr. FROST. Mr. Speaker, is the gentleman prepared to yield back his
time so that the House may proceed to a roll call vote on this
particular matter?
Mr. REYNOLDS. Yes.
Mr. FROST. Mr. Speaker, I yield back the balance of my time.
Mr. REYNOLDS. Mr. Speaker, I yield back the balance of my time, and I
move the previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore (Mr. Simpson). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. REYNOLDS. Mr. Speaker, I object to the vote on the ground that a
quorum is not present, and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 217,
nays 207, not voting 9, as follows:
[Roll No. 368]
YEAS--217
Aderholt
Akin
Armey
Bachus
Baker
Ballenger
Barr
Bartlett
Barton
Bass
Bereuter
Biggert
Bilirakis
Boehlert
Boehner
Bonilla
Bono
Boozman
Brady (TX)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Carson (OK)
Castle
Chabot
Chambliss
Coble
Collins
Cooksey
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal
DeLay
DeMint
Diaz-Balart
Dicks
Dooley
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Grucci
Gutknecht
Hall (TX)
Hansen
Hart
Hastings (WA)
Hayes
Hayworth
Herger
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Keller
Kelly
Kennedy (MN)
Kerns
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
Matheson
McCrery
McHugh
McInnis
McKeon
Mica
Miller, Dan
Miller, Gary
Miller, Jeff
Moran (KS)
Morella
Myrick
Nethercutt
Ney
Northup
Osborne
Ose
Otter
Oxley
Paul
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Reynolds
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schaffer
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skeen
Smith (NJ)
Smith (TX)
Souder
Stearns
Stenholm
Sullivan
Sununu
Sweeney
Tancredo
Tanner
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
[[Page H5961]]
Tiahrt
Tiberi
Toomey
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wolf
Young (AK)
Young (FL)
NAYS--207
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson (IN)
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dingell
Doggett
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank
Frost
Gephardt
Gonzalez
Goode
Gordon
Graham
Green (TX)
Gutierrez
Hall (OH)
Harman
Hastings (FL)
Hefley
Hill
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
Kleczka
Kucinich
LaFalce
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Luther
Lynch
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McKinney
McNulty
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal
Norwood
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Ross
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Schiff
Scott
Serrano
Sherman
Shows
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watson (CA)
Watt (NC)
Waxman
Weiner
Wexler
Wilson (SC)
Woolsey
Wu
Wynn
NOT VOTING--9
Blunt
Combest
Lipinski
Meehan
Nussle
Riley
Roukema
Smith (MI)
Stump
{time} 0014
Messrs. JOHN, WEINER, HILL, and SMITH of Washington changed their
vote from ``yea'' to ``nay.''
Mr. YOUNG of Alaska changed his vote from ``nay'' to ``yea.''
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________