[House Report 107-320]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    107-320

======================================================================



 
                  CUSTOMS BORDER SECURITY ACT OF 2001

                                _______
                                

December 5, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3129]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Ways and Means, to whom was referred the 
bill (H.R. 3129) to authorize appropriations for fiscal years 
2002 and 2003 for the United States Customs Service for 
antiterrorism, drug interdiction, and other operations, for the 
Office of the United States Trade Representative, for the 
United States International Trade Commission, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
  I. Introduction....................................................13
          A. Purpose and Summary.................................    13
          B. Background..........................................    14
          C. Legislative History.................................    15
 II. Explanation of the Bill.........................................17
III. Votes of the Committee..........................................39
 IV. Budget Effects..................................................41
          A. Committee Estimate of Budgetary Effects.............    41
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures.......................................    41
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................    41
  V. Other Matters to be Discussed Under the Rules of the House......45
          A. Committee Oversight Findings and Recommendations....    45
          B. Summary of Findings and Recommendations of the 
              Committee on Government Reform and Oversight.......    45
          C. Constitutional Authority Statement..................    45
 VI. Changes in Existing Law Made by the Bill, as Reported...........45
VII. Dissenting Views................................................56

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Customs Border Security Act of 2001''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

                 TITLE I--UNITED STATES CUSTOMS SERVICE

  Subtitle A--Drug Enforcement and Other Noncommercial and Commercial 
                               Operations

Sec. 101. Authorization of appropriations for noncommercial operations, 
commercial operations, and air and marine interdiction.
Sec. 102. Antiterrorist and illicit narcotics detection equipment for 
the United States-Mexico border, United States-Canada border, and 
Florida and the Gulf Coast seaports.
Sec. 103. Compliance with performance plan requirements.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service

Sec. 111. Authorization of appropriations for program to prevent child 
pornography/child sexual exploitation.

                    Subtitle C--Personnel Provisions

 Chapter 1--Overtime And Premium Pay of Officers of the Customs Service

Sec. 121. Correction relating to fiscal year cap.
Sec. 122. Correction relating to overtime pay.
Sec. 123. Correction relating to premium pay.
Sec. 124. Use of savings from payment of premium pay.
Sec. 125. Effective date.

                  Chapter 2--Miscellaneous Provisions

Sec. 131. Additional Customs Service officers for United States-Canada 
border.
Sec. 132. Study and report relating to personnel practices of the 
Customs Service.
Sec. 133. Study and report relating to accounting and auditing 
procedures of the Customs Service.
Sec. 134. Establishment and implementation of cost accounting system; 
reports.
Sec. 135. Study and report relating to timeliness of prospective 
rulings.
Sec. 136. Study and report relating to Customs user fees.

                  Subtitle D--Antiterrorism Provisions

Sec. 141. Immunity for United States officials that act in good faith.
Sec. 142. Emergency adjustments to offices, ports of entry, or staffing 
of the Customs Service.
Sec. 143. Mandatory advanced electronic information for cargo and 
passengers.
Sec. 144. Border search authority for certain contraband in outbound 
mail.
Sec. 145. Authorization of appropriations for reestablishment of 
Customs operations in New York City.

              Subtitle E--Textile Transshipment Provisions

Sec. 151. GAO audit of textile transshipment monitoring by Customs 
Service.
Sec. 152. Authorization of appropriations for textile transshipment 
enforcement operations.
Sec. 153. Implementation of the African Growth and Opportunity Act.

       TITLE II--OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Sec. 201. Authorization of appropriations.

        TITLE III--UNITED STATES INTERNATIONAL TRADE COMMISSION

Sec. 301. Authorization of appropriations.

                    TITLE IV--OTHER TRADE PROVISIONS

Sec. 401. Increase in aggregate value of articles exempt from duty 
acquired abroad by United States residents.
Sec. 402. Regulatory audit procedures.

                 TITLE I--UNITED STATES CUSTOMS SERVICE

  Subtitle A--Drug Enforcement and Other Noncommercial and Commercial 
                               Operations

SEC. 101. 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) in subparagraph (A) to read as follows:
                  ``(A) $886,513,000 for fiscal year 2002.''; and
          (2) in subparagraph (B) to read as follows:
                  ``(B) $909,471,000 for fiscal year 2003.''.
  (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) in clause (i) to read as follows:
                  ``(i) $1,603,482,000 for fiscal year 2002.''; and
                  (B) in clause (ii) to read as follows:
                  ``(ii) $1,645,009,000 for fiscal year 2003.''.
          (2) Automated commercial environment computer system.--Of the 
        amount made available for each of fiscal years 2002 and 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 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 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 Agreements 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) in subparagraph (A) to read as follows:
                  ``(A) $181,860,000 for fiscal year 2002.''; and
          (2) in subparagraph (B) to read as follows:
                  ``(B) $186,570,000 for fiscal year 2003.''.
  (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. 102. 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 2002.--Of the amounts made available for fiscal year 
2002 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 101(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 2003.--Of the amounts made available for fiscal year 
2003 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 101(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 2002 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 101(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. 103. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.

  As part of the annual performance plan for each of the fiscal years 
2002 and 2003 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, performance indicators, and 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 sections 111 and 112 of this Act.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service

SEC. 111. 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 2002 to 
carry out the program to prevent child pornography/child sexual 
exploitation established 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.

                    Subtitle C--Personnel Provisions

 CHAPTER 1--OVERTIME AND PREMIUM PAY OF OFFICERS OF THE CUSTOMS SERVICE

SEC. 121. CORRECTION RELATING TO FISCAL YEAR CAP.

  Section 5(c)(1) of the Act of February 13, 1911 (19 U.S.C. 267(c)(1)) 
is amended to read as follows:
          ``(1) Fiscal year cap.--The aggregate of overtime pay under 
        subsection (a) (including commuting compensation under 
        subsection (a)(2)(B)) that a customs officer may be paid in any 
        fiscal year may not exceed $30,000, except that--
                  ``(A) the Commissioner of Customs or his or her 
                designee may waive this limitation in individual cases 
                in order to prevent excessive costs or to meet 
                emergency requirements of the Customs Service; and
                  ``(B) upon certification by the Commissioner of 
                Customs to the Chairmen of the Committee on Ways and 
                Means of the House of Representatives and the Committee 
                on Finance of the Senate that the Customs Service has 
                in operation a system that provides accurate and 
                reliable data on a daily basis on overtime and premium 
                pay that is being paid to customs officers, the 
                Commissioner is authorized to pay any customs officer 
                for one work assignment that would result in the 
                overtime pay of that officer exceeding the $30,000 
                limitation imposed by this paragraph, in addition to 
                any overtime pay that may be received pursuant to a 
                waiver under subparagraph (A).''.

SEC. 122. CORRECTION RELATING TO OVERTIME PAY.

  Section 5(a)(1) of the Act of February 13, 1911 (19 U.S.C. 
267(a)(1)), is amended by inserting after the first sentence the 
following new sentences: ``Overtime pay provided under this subsection 
shall not be paid to any customs officer unless such officer actually 
performed work during the time corresponding to such overtime pay. The 
preceding sentence shall not apply with respect to the payment of an 
award or settlement to a customs officer who was unable to perform 
overtime work as a result of a personnel action in violation of section 
5596 of title 5, United States Code, section 6(d) of the Fair Labor 
Standards Act of 1938, or title VII of the Civil Rights Act of 1964.''.

SEC. 123. CORRECTION RELATING TO PREMIUM PAY.

  (a) In General.--Section 5(b)(4) of the Act of February 13, 1911 (19 
U.S.C. 267(b)(4)), is amended by adding at the end the following new 
sentences: ``Premium pay provided under this subsection shall not be 
paid to any customs officer unless such officer actually performed work 
during the time corresponding to such premium pay. The preceding 
sentence shall not apply with respect to the payment of an award or 
settlement to a customs officer who was unable to perform work during 
the time described in the preceding sentence as a result of a personnel 
action in violation of section 5596 of title 5, United States Code, 
section 6(d) of the Fair Labor Standards Act of 1938, or title VII of 
the Civil Rights Act of 1964.''.
  (b) Corrections Relating to Night Work Differential Pay.--Section 
5(b)(1) of such Act (19 U.S.C. 267(b)(1)) is amended to read as 
follows:
          ``(1) Night work differential.--
                  ``(A) 5 p.m. to midnight.--(i) If any hours of 
                regularly scheduled work of a customs officer occur 
                during the hours of 5 p.m. and 12 a.m., the officer is 
                entitled to pay for such hours of work (except for work 
                to which paragraph (2) or (3) applies) at the officer's 
                hourly rate of basic pay plus premium pay amounting to 
                not less than 18 percent of that basic rate.
                  ``(ii) If the regularly scheduled work of a customs 
                officer is 4 p.m. to 12:00 a.m., the officer is 
                entitled to pay for work during such period (except for 
                work to which paragraph (2) or (3) applies) at the 
                officer's hourly rate of basic pay plus premium pay 
                amounting to not less than 18 percent of that basic 
                rate.
                  ``(B) Midnight to 6 a.m.--(i) If any hours of 
                regularly scheduled work of a customs officer occur 
                during the hours of 12 a.m. and 6 a.m., the officer is 
                entitled to pay for such hours of work (except for work 
                to which paragraph (2) or (3) applies) at the officer's 
                hourly rate of basic pay plus premium pay amounting to 
                25 percent of that basic rate.
                  ``(ii) If the regularly scheduled work of a customs 
                officer is 12 a.m. to 8:00 a.m., the officer is 
                entitled to pay for work during such period (except for 
                work to which paragraph (2) or (3) applies) at the 
                officer's hourly rate of basic pay plus premium pay 
                amounting to 25 percent of that basic rate.''.

SEC. 124. USE OF SAVINGS FROM PAYMENT OF PREMIUM PAY.

  Section 5 of the Act of February 13, 1911 (19 U.S.C. 267), is 
amended--
          (1) by redesignating subsection (e) as subsection (f); and
          (2) by inserting after subsection (d) the following:
  ``(e) Use of Savings From Payment of Premium Pay.--
          ``(1) Use of amounts.--For fiscal year 2002, the Secretary of 
        the Treasury--
                  ``(A) shall determine under paragraph (2) the amount 
                of savings from the payment of premium pay to customs 
                officers; and
                  ``(B) shall use an amount from the Customs User Fee 
                Account equal to such amount determined under paragraph 
                (2) for additional premium pay described in clauses (i) 
                and (ii) of subsection (b)(1)(A).
          ``(2) Determination of savings amount.--The Secretary shall 
        calculate an amount equal to the difference between--
                  ``(A) the estimated cost for premium pay that would 
                have been incurred during fiscal year 2002 if this 
                section, as in effect on the day before the date of the 
                enactment of section 123 of the Customs Border Security 
                Act of 2001, had governed such costs; and
                  ``(B) the actual cost for premium pay that is 
                incurred during fiscal year 2002 under this section, as 
                amended by section 123 of the Customs Border Security 
                Act of 2001.''.

SEC. 125. EFFECTIVE DATE.

  This chapter, and the amendments made by this chapter, shall apply 
with respect to pay periods beginning on or after 15 days after the 
date of the enactment of this Act.

                  CHAPTER 2--MISCELLANEOUS PROVISIONS

SEC. 131. ADDITIONAL CUSTOMS SERVICE OFFICERS FOR UNITED STATES-CANADA 
                    BORDER.

  Of the amount made available for fiscal year 2002 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 
101 of this Act, $25,000,000 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. 132. 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 druginterdiction 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. 133. 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. 134. 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. 135. 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. 136. 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.

                  Subtitle D--Antiterrorism Provisions

SEC. 141. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN GOOD FAITH.

  (a) Immunity.--Section 3061 of the Revised Statutes of the United 
States (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.''.
  (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 the Customs Service 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. 142. 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 directly 
        respond 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. 143. MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO AND 
                    PASSENGERS.

  (a) Cargo Information.--
          (1) In general.--Section 431(b) of the Tariff Act of 1930 (19 
        U.S.C. 1431(b)) is amended--
                  (A) in the first sentence, by striking ``Any 
                manifest'' and inserting ``(1) Any manifest''; and
                  (B) by adding at the end the following:
  ``(2) In addition to any other requirement under this section, for 
each land, air, or vessel carrier required to make entry or obtain 
clearance under the customs laws of the United States, the pilot, the 
master, operator, or owner of such carrier (or the authorized agent of 
such operator or owner) shall provide by electronic transmission cargo 
manifest information in advance of such entry or clearance in such 
manner, time, and form as prescribed under regulations by the 
Secretary. TheSecretary may exclude any class of land, air, or vessel 
carrier for which the Secretary concludes the requirements of this 
subparagraph are not necessary.''.
          (2) Conforming amendments.--Subparagraphs (A) and (C) of 
        section 431(d)(1) of such Act are each amended by inserting 
        before the semicolon ``or subsection (b)(2)''.
  (b) Passenger Information.--Part II of title IV of the Tariff Act of 
1930 (19 U.S.C. 1431 et seq.) is amended by inserting after section 431 
the following:

``SEC. 432. PASSENGER AND CREW MANIFEST INFORMATION REQUIRED FOR LAND, 
                    AIR, OR VESSEL CARRIERS.

  ``(a) In General.--For every person arriving or departing on a land, 
air, or vessel carrier required to make entry or obtain clearance under 
the customs laws of the United States, the pilot, the master, operator, 
or owner of such carrier (or the authorized agent of such operator or 
owner) shall provide by electronic transmission manifest information 
described in subsection (b) in advance of such entry or clearance in 
such manner, time, and form as prescribed under regulations by the 
Secretary.
  ``(b) Information Described.--The information described in this 
subsection shall include for each person described in subsection (a), 
the person's--
          ``(1) full name;
          ``(2) date of birth and citizenship;
          ``(3) gender;
          ``(4) passport number and country of issuance;
          ``(5) United States visa number or resident alien card 
        number, as applicable;
          ``(6) passenger name record; and
          ``(7) such additional information that the Secretary, by 
        regulation, determines is reasonably necessary to ensure 
        aviation and maritime safety pursuant to the laws enforced or 
        administered by the Customs Service.''.
  (c) Definition.--Section 401 of the Tariff Act of 1930 (19 U.S.C. 
1401) is amended by adding at the end the following:
  ``(t) The term `land, air, or vessel carrier' means a land, air, or 
vessel carrier, as the case may be, that transports goods or passengers 
for payment or other consideration, including money or services 
rendered.''.
  (d) Effective Date.--The amendments made by this section shall take 
effect beginning 45 days after the date of the enactment of this Act.

SEC. 144. BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND 
                    MAIL.

  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 (21 U.S.C. 953; relating to 
                exportation of controlled substances).
                  ``(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.--(1) Mail sealed 
against inspection under the postal laws and regulations of the United 
States may be searched by a Customs officer, subject to paragraph (2), 
upon 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) No person acting under 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, 
        Federal Rules of Criminal Procedure; or
          ``(B) the sender or addressee has given written authorization 
        for such reading.''.

SEC. 145. 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 of the Customs Service in New 
        York, New York, such sums as may be necessary for fiscal year 
        2002.
          (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.

              Subtitle E--Textile Transshipment Provisions

SEC. 151. 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 textile 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. 152. AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT 
                    ENFORCEMENT OPERATIONS.

  (a) Authorization of Appropriations.--
          (1) In general.--There is authorized to be appropriated for 
        textile transshipment enforcement operations of the Customs 
        Service $9,500,000 for fiscal year 2002.
          (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 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 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 pursue 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. 153. IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT.

  Of the amount made available for fiscal year 2002 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 101(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 Africa 
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 Africa 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.

       TITLE II--OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

SEC. 201. 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) in clause (i) to read as follows:
          ``(i) $30,000,000 for fiscal year 2002.''; and
                  (C) in clause (ii) to read as follows:
          ``(ii) $31,000,000 for fiscal year 2003.''; 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 2002 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.

        TITLE III--UNITED STATES INTERNATIONAL TRADE COMMISSION

SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

  (a) In General.--Section 330(e)(2)(A) of the Tariff Act of 1930 (19 
U.S.C. 1330(e)(2)) is amended--
          (1) in clause (i) to read as follows:
          ``(i) $51,400,000 for fiscal year 2002.''; and
          (2) in clause (ii) to read as follows:
          ``(ii) $53,400,000 for fiscal year 2003.''.
  (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.''.

                    TITLE IV--OTHER TRADE PROVISIONS

SEC. 401. 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. 402. 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.''.

                            I. INTRODUCTION


                         A. Purpose and Summary

    H.R. 3129, as amended, would authorize appropriations for 
fiscal year FY 2002 and FY 2003 for the U.S. Customs Service, 
including specific authorization for anti-terrorism, drug 
interdiction and the prevention of child pornography. The bill 
would also provide more funding to textile transshipment 
efforts and assistance to African countries for implementation 
of the African Growth and Opportunities Act. The bill would 
further dedicate resources to reestablish the New York Customs 
offices formerly at the World Trade Center, which were 
destroyed in the terrorist attack of September 11th, and it 
would provide more resources to the Northern Border. H.R. 3129 
would also authorize full funding for the Customs Automated 
Commercial Environment. H.R. 3129 would also authorize 
appropriations for the Office of the United States Trade 
Representative (USTR) and the International Trade Commission 
(ITC).
    H.R. 3129, as amended, would make corrections to the 
overtime and premium pay for Customs inspectors and increase 
the premium pay for inspectors working night-time hours. It 
would also relax the manner in which the fiscal-year $30,000 
cap for overtime pay is calculated by removing premium pay from 
the cap. The bill would alter the hours in which night-time 
premium pay would be available while using the savings to 
increase night-time premium pay for inspectors actually working 
at night.
    H.R. 3129, as amended, would also give the U.S. Customs 
Service authority to fight against terrorism and drug smugglers 
through several new tools. Customs inspectors would be immune 
from civil suits as a result of personal searches at the border 
if they act in good faith. Customs Service would have the 
authority to search outbound mail so long as privacy and Fourth 
Amendment protections are observed. The Treasury Department 
would also be required to build a system through the regulatory 
process to handle the collection of advanced information for 
inbound cargo, as well as inbound and outbound passengers, from 
carriers for the purpose of targeting both terrorist activity 
and smuggling.
    H.R. 3129, as amended, would also authorize several studies 
and reports on Customs' operations including a report on the 
personnel practices of the Customs Service, on the accounting 
and auditing procedures of Customs, on the monitoring and 
enforcement of textile transshipment, on Customs' anticipated 
improvements to stop delays in issuing prospective rulings, and 
on determining the proper level of fees charged by Customs on 
importers. The first two reports would be issued by Customs, 
and the last three would be issued by the General Accounting 
Office. The bill would also change Customs' audit process by 
requiring that overpayments found during an audit be used as 
offsets for any underpayments also found, permit emergency 
adjustments to Customs offices and staff during emergencies, 
and permanently raise the duty exemption on U.S. residents 
returning from abroad from the current $400 to $800.

                             B. Background


                   1. Authorization of Appropriations

    The Committee on Ways and Means has adopted a two-year 
authorization process to provide Customs, USTR, and the ITC 
with guidance as they plan their budgets, as well as guidance 
from the Committee for the appropriations process. In preparing 
H.R. 3129, the Committee considered the President's budget for 
FY 2002. Although each agency submitted its FY 2002 budget 
request, the Committee has relied upon anticipated cost 
inflation from the Congressional Budget Office as a guide for 
FY 2003. The statutory basis for the authorizations of 
appropriations is as follows: for Customs, section 301(b) of 
the Customs Procedural Reform and Simplification Act of 1978 
(19 U.S.C. 2075(b)); for USTR, section 141(g)(1) of the Trade 
Act of 1974 (19 U.S.C. 2171(g)(1)); and for the ITC, section 
330(e)(2)(A) of the Tariff Act of 1930 (19 U.S.C. 
1330(e)(2)(A)).

                   2. customs cyber-smuggling center

    Customs enforces laws against international trafficking of 
child pornography the laws at its Cyber-smuggling Center. This 
legislation is needed for additional funding for Customs to 
expand its efforts in preventing on-line child pornography.

                         3. Customs Automation

    Customs' current automation system, the Automated 
Commercial System (ACS), is an aging 17-year-old system which 
has experienced several ``brownouts.'' In addition, under the 
Customs Modernization Act (Mod Act) that was part of the North 
American Free Trade Agreements Act (title VI), Customs is 
required to provide increased electronic processing for 
entries, informed compliance, and record keeping, but ACS does 
not have the capacity to meet these modernization requirements. 
Customs plans to replace ACS with the Automated Commercial 
Environment (ACE).

                      4. Customs Personnel Issues

    The Act of February 13, 1911, as amended, known as the 
``1911 Act,'' created the original overtime pay system for 
Customs inspectors. The Act authorized Customs to compensate 
officers at a rate of two days of basic hourly pay for Sundays, 
and a rate of two days of basic hourly pay plus the basic 
hourly rate for holidays. Minimum compensation for nighttime 
pay--5 p.m to 8 a.m.--was 4 to 12 hours of pay. Section 13811 
of the Consolidated Omnibus Budget Reconciliation Act (COBRA) 
of 1993, known as the Customs Officer Pay Reform Amendments 
(COPRA), amended the 1911 Act with regard to the overtime and 
premium pay system for Customs inspectors and canine 
enforcement officers, effective January 1, 1994. Only 
inspectors and canine officers are covered by the reforms, and 
only when performing inspections. Clerical and support staff 
are no longer eligible for double time and are covered--as are 
most other Federal employees--under the Federal Employees Pay 
Act (FEPA), at 1\1/2\ regular pay. The COBRA of 1993 also 
amended overtime compensation paid to Customs officers as part 
of the basic pay for the Civil Service Retirement System. 
Compensation may not exceed 50 percent of the statutory maximum 
in overtime pay for Customs officers (i.e., $15,000, that is, 
50 percent of $30,000). Due to a number of arbitration rulings, 
Customs has been required to pay both overtime and premium pay 
to Customs officers for work not performed. Further, the 
changes Congress made to the night pay system for Customs in 
1993 have resulted in an unforeseencircumstance where Customs 
officers can receive night pay for working at 12:00 noon in certain 
instances. The Treasury Inspector General has called for a legislative 
change to correct the night pay system.
    Customs was subject to a partnership agreements with its 
union that prevent it from permanently reassigning Customs 
officers without the affected employees' consent. Customs' 
ability to temporarily reassign officers without officers' 
consent was also limited under the partnership agreement with 
the union. Concerns were raised that the requirement that 
Customs officers and inspectors agree to such rotations may 
affect Customs drug interdiction efforts and the integrity of 
the border workforce. In addition, there have been a number of 
incidents in which implementation of certain inspection 
procedures were delayed because of union objections to the 
procedures. While these particular incidents have been 
resolved, there have been questions raised as to whether drug 
interdiction efforts were compromised.

                         C. Legislative History

    The Subcommittee on Trade of the Committee on Ways and 
Means held a public hearing on July 17, 2001, on Customs, USTR, 
and the ITC budget authorizations for FY 2002 and 2003 as well 
as other Customs issues, including compensation for Customs 
officers, funding for Customs Automated Commercial Environment 
(ACE) and the International Trade Data System (ITDS), and 
labor/management issues. Acting Customs Commissioner Winwood, 
Mr. Dennis Schindel of the Treasury Inspector General's office, 
Ms. Laurie Ekstrand of the U.S. General Accounting Office 
(GAO), and representatives of the various sectors of the trade 
industry testified. Acting Commissioner Winwood stressed the 
need for ACE and detailed steps Customs has taken to improve 
ACE project management.
    Ms. Ekstrand acknowledged that Customs has begun to 
implement the recommendations made in the GAO report. 
Representatives of the trade industry were unified in their 
opinion that ACE is desperately needed and that Customs could 
effectively manage a project the size of ACE. On Customs labor 
issues, testimony was received from Mr. Dennis S. Schindel, 
Deputy Inspector General for Audit, Office of the Inspector 
General, and from Ms. Colleen Kelley, President of the National 
Treasury Employees Union (NTEU). In his testimony, Mr. Schindel 
stated that although the Customs Officers Pay Reform Act 
(COPRA) was intended to reduce Customs overtime costs for 
inspectional services, COPRA instead has resulted in an 
increase in Customs premium pay costs. Ms. Ekstrand also 
commented on a recent GAO study indicating that Customs took 
far took far too long in issuing prospective rulings.\1\
---------------------------------------------------------------------------
    \1\ Prospective rulings are issued by Customs at the request of 
importers seeking guidance on various matters such as the 
classification or the valuation of certain goods.
---------------------------------------------------------------------------
    On October 16, 2001, Mr. Crane introduced H.R. 3129, and 
the Committee held a markup of the bill on October 31, 2001. 
Four amendments were offered at the markup: Mr. Stark on behalf 
of Mr. Rangel offered an amendment to strike sections 123 and 
124 of H.R. 3129, the effect of which would maintain the 
current night differential pay rate schedule for Customs 
officers. Mr. Stark's amendment was defeated by a recorded vote 
of 13 ayes to 20 nays. Mr. Becerra offered and withdrew a non-
germane amendment to give Customs inspectors law enforcement 
status. Mr. McDermott offered an amendment to strike section 
141, the effect of which would be to deny the provision's civil 
lawsuit immunity to Customs inspectors. Mr. McDermott's 
amendment was defeated by voice vote. Chairman Thomas offered 
an amendment in the nature of a substitute that passed the 
Committee by 20 ayes to 14 nays. The Committee then ordered the 
bill favorably reported, as amended, by voice vote. The 
Committee then moved that the Chairman have the authority to 
offer such motions as may be necessary to go to conference, and 
the motion passed by roll call vote 2 present, 19 ayes, and 1 
nay. Eight Members passed on this vote.

                      II. EXPLANATION OF THE BILL


                 Title I--United States Customs Service


  Subtitle A--Drug Enforcement and Other Noncommercial and Commercial 
                               Operations


Sec. 101. 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.
            Explanation of the provision
    This provision authorizes $1,006,501,000 for FY 2002 and 
$1,032,567,000 for FY 2003 for noncommercial operations of the 
Customs Service. It also authorizes $1,378,725,000 for FY 2002 
and $1,414,432,000 for FY 2003 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 $183,853,000 for FY 2002 and $188,615,000 
for FY 2003 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 
FinanceCommittees.
            Reason for change
    The Committee notes that this non-commercial versus 
commercial split supplied by Customs does not provide 
meaningful information. The information is not the result of 
the collection of cost data on a continual basis. Rather 
Customs apportions its budget through this artificial division 
based upon an ad hoc survey performed years ago and that is no 
longer available. The survey estimated that a certain 
percentage of Customs' activities were commercial-related, and 
the rest non-commercial, and based upon that conclusion, 
Customs merely takes its overall budget and multiplies it by 
that static percentage to arrive at its estimation from year to 
year. Obviously, this methodology is woefully inadequate since 
actual costs for various functions change from year to year. 
The methodology, if it was ever accurate, is now at best a rule 
of thumb. For this reason, the Committee has addressed this 
problem in Sections 134 and 136 of the bill.
    Regarding noncommercial spending, the Committee is 
committed to giving Customs the resources needed to increase 
the overall level of Customs officers and Special Agents 
dedicated to countering terrorism, narcotics, and money 
laundering activities. Accordingly, the authorization for non-
commercial operations for both fiscal years 2002 and 2003 is 
substantially larger than the President's request, providing 
Customs with the resources to stop terrorists and drugs from 
entering this country while at the same time expediting the 
entry of legitimate persons and cargo. The Committee notes that 
during this time of emergency, a reevaluation of Customs needs 
by the Administration, along with the needs of all anti-
terrorist agencies, has only just begun. The Committee looks 
forward to the Administration's stock-taking and commits to 
review any updated requests from the Administration.
    Regarding commercial spending, the Committee recognizes 
Customs' efforts to modernize its operations to meet both its 
enforcement and trade facilitation missions. Customs plans to 
spend over $1 billion over the next few years to modernize its 
automation systems. The current Customs import processing 
system, the Automated Commercial System (ACS), is 17 years old. 
Over time, ACS became unable to handle the increased computing 
requirements brought on by trade growth and started to 
experience service failures called brownouts. These brownouts 
caused import delays and increased manual processing. Recent 
ACS funding has enabled Customs to fix critical links and grow 
the system to keep up with the workload, thereby eliminating 
brownouts for now. With continued funding, Customs expects ACS 
to remain functional until the maximum capabilities of the 
system and application software are reached. However, of 
continued concern is the explosive growth in trade volume and 
its impact on ACS. In the last decade, trade has grown 132 
percent, and by 2004, Customs will be processing more than 30 
million commercial entries a year. This is up from 12.3 million 
in 1994--more than double the level of ten years earlier.
    Many observers, including Customs, have said that ACS is 
headed for a major system crash which will certainly have an 
adverse impact on trade. They also believe that any serious 
failure of ACS could have widespread economic effect on U.S. 
businesses all along the supply chain including manufacturers, 
suppliers, brokers, and retailers. Between August 1998, and 
March 2001, ACS experienced a number of significant slow downs 
in processing ``brownouts,'' which in turn adversely affected 
the ability of the trade community to process entries quickly 
and efficiently. Although Customs continues to make costly 
investments to ACS to alleviate this problem on a short-term 
basis, Customs and the trade community expect a recurrence of 
these problems, including possible shutdowns of ACS.
    Customs plans to replace ACS with the Automated Commercial 
Environment (ACE) and has spent approximately $65 million on 
ACE development to date. Some of the main differences between 
ACS and ACE are that ACE reportedly will use a single 
integrated system, modern standards, processes, techniques and 
language, and will be compatible with commercial software. By 
contrast, ACS does not have an integrated system, uses outdated 
techniques and languages, and cannot use commercially 
compatible software. The Committee agrees with Customs and the 
trade community that ACE is needed to cope with the increased 
growth of trade, and equally importantly, to meet the 
legislative requirements for Customs automation modernization 
mandated under the Customs Modernization Act. Therefore, in its 
authorization for commercial operations for both FY 2002 and FY 
2003, the Committee has included funding to provide the Customs 
Service with the crucial resources it needs to continue 
developing ACE. However, the Committee underscores the need to 
ensure that Customs manage and develop ACE cost effectively, 
while meeting the legislative automation modernization mandate 
of the Mod Act.
    The Miscellaneous Trade and Technical Corrections Act of 
1999, P.L. 106-36, Section 2405 mandated that ``not later than 
January 1, 2000, the Secretary shall provide for the inclusion 
of commercial importation data from foreign-trade zones under 
the National Customs Automation Program.'' The deadline has now 
passed and the Committee is concerned that the Customs Service 
has made no progress on this FTZ automation plan. In light of 
the current development of the Automated Commercial Environment 
(ACE) by the Customs Service, the Committee directs the Customs 
Service to incorporate the Foreign-Trade Zone automation 
process in the first phase of ACE.

Sec. 102. 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.
            Explanation of the provision
    This provision would require that $90,244,000 of the FY 
2002 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 ofthe FY 2003 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.
            Reason for change
    The Committee recognizes the needs of the Customs Service 
to effectively interdict terrorists and drugs entering the 
United States. The Committee is concerned that Customs 
currently lacks sufficient equipment along the Canada, Mexico, 
and Gulf borders to effectively carry out this mission while at 
the same time ensuring that trade flows in a timely manner. The 
list of equipment is based on the needs Customs has articulated 
to the Committee both before and after the September 11th 
terrorist attacks. The Committee expects that Customs will 
continue to allocate resources to additional ports as it deems 
appropriate.

Sec. 103. Compliance with performance plan requirements

            Present law
    No applicable section.
            Explanation of the provision
    This provision would require Customs to measure 
specifically the effectiveness of the resources dedicated in 
sections 102 and 103 as part of its annual performance plan.
            Reason for change
    The Committee believes Customs must be accountable to the 
taxpayer in assessing and measuring the effectiveness of its 
limited resources. This provision ensures that Customs 
evaluates how it used these additional resources to achieve the 
goals of Congress.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service


Sec. 111. 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.
            Explanation of provision
    Section 111 of H.R. 3129, as amended, 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.
            Reason for change
    With about 12 million children using the Internet 
unsupervised by their parents, the Internet has provided 
fertile ground for sexual predators to lure children into 
exploitive and abusive relationships and to trade in child 
pornography. This legislation would provide Customs with 
resources for the tools, technology, and manpower it needs in 
its efforts to prevent child pornography and sexual 
exploitation. The Committee expects that these efforts will 
include out-reach programs to educate parents, children, and 
teachers. The Committee applauds Customs for establishing the 
Cyber-smuggling Center and fully supports Customs in its 
efforts to protect children from on-line predators.

                    Subtitle C--Personnel Provisions


 Chapter 1--Overtime And Premium Pay of Officers of the Customs Service

Sec. 121. Correction relating to fiscal year cap

            Present law
    Section 5(c)(1) of the Act of February 13, 1911 (19 U.S.C. 
267(c)(1)) states that the aggregate amount of a Customs 
officer's overtime pay, including commuting compensation and 
premium pay, is $30,000.\2\ A Customs officer who receives 
overtime or premium pay (holidays and night work) for time 
worked is prohibited from receiving compensation for that work 
under any other provision of law. The Commissioner may grant 
waivers to prevent excessive costs or to meet emergency 
requirements of the Customs Service. Section 5(a)(1) of the Act 
of February 13, 1911 (19 U.S.C. 267(a)(1)) outlines the general 
overtime pay system for Customs officers. Basic overtime 
compensation for work not regularly scheduled is provided as 
follows: (a) Work in excess of 8 hours per day or 40 hours per 
week at twice the basic hourly rate of basic pay; (b) 
``Callback'' pay at twice the basic hourly rate. An officer 
will receive at least two hours of callback pay for any call 
back of two hours of work or less, if the work begins at least 
one hour after the end of any previously scheduled work and 
ends at least one hour before the beginning of regularly 
scheduled work; and (c) Compensation for the commute, in 
addition to callback time, at three times the basic hourly 
rate; compensation for the commute is not payable if the work 
does not begin within 16 hours of the Customs officer's last 
regularly scheduled work assignment, or if the work begins 
within two hours of the officer's next regularly scheduled work 
assignment.
---------------------------------------------------------------------------
    \2\ The fiscal year cap has been increased annually since October 
1, 1997, from $25,000 to $30,000 (most recently by the FY 01 Treasury 
Appropriations Act) over the objections of the Committee on Ways and 
Means because it did not address overtime and premium pay reforms.
---------------------------------------------------------------------------
            Explanation of provision
    Section 121 of H.R. 3129, as amended, would amend section 
5(c)(1) of the Act of February 13, 1911 (19 U.S.C. 267(c)(1)) 
to remove premium pay from the calculation of the $30,000 
fiscal-year cap, thus increasing the amount of overtime pay a 
Customs officer may receive, with no annual limit on the amount 
of premium pay. The provision would also allow the Commissioner 
the authority to waive the $30,000 fiscal-year cap to prevent 
excessive costs or to meet emergencies, and to pay a Customs 
officer for one work assignment that would result in the 
overtime pay of that officer exceeding the $30,000 fiscal-year 
cap. This authority would be granted only upon certification to 
the Chairmen of the House Committee on Ways and Means, and the 
Senate Committee on Finance that Customs has in operation a 
system that provides accurate and reliable data on a daily 
basis on overtime and premium pay being paid to Customs 
officers.
            Reason for change
    Administration of the fiscal-year cap has posed a 
considerable challenge for Customs. Eliminating premium pay 
from the calculation of the fiscal-year cap will facilitate 
Customs administration, as fewer Customs officers will approach 
the level of the cap by working overtime alone. Moreover, 
allowing each officer an unrestricted amount of premium pay and 
applying the cap only to overtime pay will increase the 
earnings of Customs inspectors. If an officer reaches the 
fiscal-year cap, the provision would allow the Commissioner to 
pay that officer for one additional work assignment that would 
result in the overtime pay of the officer exceeding the cap. 
Thereafter, no additional overtime would be assigned to that 
officer, except to meet emergency requirements of the Customs 
Service. Under the National Inspectional Assignment Policy 
(NIAP) and contracts negotiated with the National Treasury 
Employees Union (NTEU), Customs has agreed to assign overtime 
to Customs officers based on daily tracking of each officer's 
overtime- and premium-pay earnings. Section 121 also requires 
that authority to exceed the cap by one assignment will be 
granted to the Commissioner only upon certification to the 
Chairmen of the House Committee on Ways and Means and the 
Senate Committee on Finance that Customs has in operation a 
system that provides accurate and reliable data on a daily 
basis on overtime and premium pay that is being paid to each 
Customs officer.
    Customs' officials estimate that based upon pre-emergency 
staffing requirements, there have been several hundred 
inspectors who reached the cap and who would thus benefit from 
an increase in the cap. Based upon post-emergency staffing 
requirements from the heightened alert, that estimate is now 
conservatively over 1,000 inspectors who would benefit from 
raising the cap. Taking premium pay out of the cap would allow 
some inspectors to earn as much as $5,000 more than currently 
allowed.

Sec. 122. Correction relating to overtime pay

            Present law
    On October 30, 1997, an arbitration ruling required the 
Customs Service to pay overtime to a Customs officer for work 
not performed if that officer was not permitted to work that 
time due to an administrative error. An earlier arbitration 
ruling required Customs to pay overtime to a Customs officer 
for work not performed if Customs had prevented that officer 
from working right up to the fiscal year salary cap, a practice 
Customs has in place to prevent an Anti-Deficiency Act 
violation.
            Explanation of provision
    Section 122 of H.R. 1833, as amended, would prevent Customs 
from paying overtime pay to Customs officers for work not 
actually performed. However, this provision would not apply to 
payment of an award or settlement under section 5596 of title 
5, United States Code, section 6(d) of the Fair Labor Standards 
Act, or title VII of the Civil Rights Act of 1964.
            Reason for change
    The Committee is concerned that three arbitral decisions 
require Customs to pay overtime for work not performed. 
Specifically, as a result of a decision by a labor arbitrator 
in August 1982, Customs is required to pay overtime plus 
interest for hours not actually worked to officers denied 
overtime assignments because they have reached the level set by 
the port directors. The amount paid by Customs pursuant to the 
arbitral decision equals the difference between the fiscal-year 
cap and the level which the officer had reached at the time the 
port director stopped assigning additional overtime to that 
officer. As a result of a decision by a labor arbitrator in 
November 1993, Customs is required to pay for overtime not 
actually worked to officers whose overtime is inappropriately 
assigned to part-time employees. In yet another decision by a 
labor arbitrator in October 1997, Customs is now required to 
pay overtime to Customs officers for work not performed when 
the officer was not assigned an overtime assignment due to an 
inadvertent administrative error.
    The current practice of paying overtime for work not 
performed replaces the practice of providing the next 
comparable overtime assignment to the officer who was 
inadvertently skipped over. In addition, in testimony before 
the Subcommittee on Trade in May 1998, the General Accounting 
Office (GAO) stated: ``Although we believed that inspectors 
should be paid extra for working overtime, we recommend that 
(1) the 1911 Act be amended so that inspector overtime would be 
more directly linked to actual hours worked, and (2) Customs 
management focus on achieving a more efficient use of 
overtime.'' U.S. Customs Service: Oversight Issues, GAO/T GGD 
97 107 (May 15, 1997). The provision would clarify 
Congressional intent with regard toovertime for Customs 
officers by preventing Customs from paying overtime to officers for 
hours not actually worked. Customs would achieve savings by prohibiting 
these payments which it has been required to make since the 1982 
arbitral decision.
    It is the view of the Committee that Customs would achieve 
considerable savings in prohibiting these payments, and these 
resources would be better utilized by Customs in other areas. 
More importantly, the change in law will correct an inequitable 
and unintended consequence of the present law as interpreted by 
arbitration panels. The Committee does not expect that this 
requirement will have a significant impact on Customs' 
management of overtime or on Customs officers' ability to earn 
overtime pay.
    Customs has taken steps to alleviate this problem by 
recently implementing the Customs Overtime and Scheduling 
System (COSS), which currently tracks and monitors all 
scheduling, assignment of regular hours, overtime, and premium 
hours for Customs officers. Under this tracking system, Customs 
will be better able to monitor overtime and premium hours to 
prevent situations that gave rise to officers receiving 
overtime and premium pay for no work. However, the Committee 
believes that this legislation is necessary to clarify that the 
appropriate policy is to provide an additional assignment 
instead of overtime. Finally, this reform is not intended to 
prevent awards or settlements under the provisions of laws 
cited in this section.

Sec. 123. Correction relating to premium pay

            Present law
    Section 123(a). An arbitration ruling requires Customs to 
pay officers for regularly scheduled premium pay hours even if 
the officer subsequently takes sick or annual leave and does 
not actually work those hours. The Omnibus Consolidated and 
Emergency Supplemental Appropriations for FY 1999 (P.L. 105-
277), permanently restricts Customs from paying premium pay on 
Sundays to an employee if the employee has not actually 
performed work on a Sunday.
    Sec. 123(b). Section 5(b)(1) of the Act of February 13, 
1911 (19 U.S.C. 267(b)(1)) provides that if an officer works: 
(1) the majority of his or her hours between 3 p.m. and 
midnight, compensation equals the basic hourly rate plus 15 
percent of the basic hourly rate for the entire eight-hour 
shift; (2) the majority of his or her hours between 11 p.m. and 
8 a.m., compensation equals the basic hourly rate plus 20 
percent for the entire eight hour shift; and (3) if the 
officer's regularly scheduled work assignment falls between 
7:30 p.m. and 3:30 a.m., compensation equals the basic hourly 
rate plus 15 percent for the period from 7:30 p.m. to 11:30 
p.m., and the basic hourly rate plus 20 percent for the period 
from 11:30 p.m. to 3:30 a.m.
    For example, if a Customs officer is scheduled to work a 
shift that starts at 12:00 noon and ends at 8 p.m., five of the 
eight hours of that shift, or the majority of hours, occur 
during the 3 p.m. to 11 p.m. night premium pay hours. Thus, the 
Customs officer is paid night pay (an additional 15 percent) 
for all eight hours of the shift that starts at noon.
            Explanation of the provision
    Sec. 123(a). This provision would prohibit Customs from 
paying premium holiday pay to an employee if the employee has 
not actually performed work during the time corresponding to 
such premium pay by amending section 5(b)(4) of the Act of 
February 13, 1911 (19 U.S.C. 267(b)(4)). However, this 
provision would not apply to payment of an award or settlement 
under section 5596 of title 5, United States Code, section 6(d) 
of the Fair Labor Standards Act, or title VII of the Civil 
rights Act of 1964. As with the restriction on payment of 
overtime pay outlined in section 122, this provision would 
clarify Congressional intent with regard to premium pay for 
Customs officers by preventing Customs from paying premium pay 
to officers for hours not actually worked.
    Sec. 123(b). This provision would amend section 5(b)(1) of 
the Act of February 13, 1911 (19 U.S.C. 267(b)(1)) to provide 
that a Customs officer is paid premium night shift (``shift 
differential'') pay only for shift differential hours worked. 
This provision also changes the actual hours eligible for night 
time pay to between 5 p.m. and 6 a.m., except that for a 
regularly scheduled shift between 4 p.m. and midnight or 
midnight and 8 a.m., the entire shift would be eligible for 
night pay shift differential.
    Under this legislation, if any hour of an officer's 
regularly scheduled work hours occur between 5 p.m. and 
midnight, compensation would equal the basic hourly rate plus 
at least 18 percent for those hours only. If any work hours 
occur between midnight and 6 a.m., compensation would equal the 
basic hourly rate plus 25 percent for those hours only. The 
bill also would allow for a Customs officer regularly scheduled 
to work the shift from 4 p.m. and midnight to be paid at a 
premium rate of at least 18 percent over his or her base salary 
for the entire shift. The bill also would allow for a Customs 
officer regularly scheduled to work the shift from midnight to 
8 a.m. to be paid at a premium rate of 25 percent over his or 
her base salary for the entire shift. For example, a Customs 
officer working from noon to 8 p.m. would earn night 
differential pay only between the hours of 5 p.m. and 8 p.m, 
but would receive at least an 18 percent differential instead 
of the current 15 percent.
            Reason for change
    Section 123(a). The Committee is greatly concerned that an 
arbitral decision requires Customs to pay premium pay for hours 
not actually worked. Specifically, due to the decision by a 
labor arbitrator in September 1996, Customs is required to pay 
premium pay to officers for regularly-scheduled premium pay 
hours even if the officer subsequently fails to work those 
hours due to annual leave, sick leave, or National Guard duty 
leave. Similar to the reform on payment of overtime pay 
outlined in section 122, this provision would clarify 
Congressional intent with regard to premium pay for Customs 
officers by preventing Customs from paying premium pay to 
officers for hours not actually worked. Finally, this reform is 
not intended to prevent awards or settlements under the 
provisions of laws cited in this section.
    Section 123(b). The Customs Officer Pay Reform Amendments, 
which was part of the Omnibus Budget Reconciliation Act of 1993 
(P.L. 103-66), greatly increased the number of available hours 
in which a Customs Officer can earn premium pay for night work. 
COPRA also increased the 10 percent night differential 
compensation to 15 percent and 20 percent, dependingon the time 
of day that the assignment is worked. Among Federal employees, only 
Customs officers are compensated at a premium pay rate of 15 percent or 
20 percent of basic hourly pay for night work. In fact, COPRA allows 
Customs to pay night differential premium payments for 23 hours of the 
day (12 p.m. to 11 a.m.), rather than 12 hours of the day (6 p.m. to 6 
a.m.) as was previously the case under FEPA. Premium pay for night work 
by most other Federal employees is provided at a rate of 10 percent for 
the hours from 6 p.m. to 6 a.m. and is available only for those hours 
worked during that period, not the entire shift.
    At the Subcommittee's legislative hearing on April 13, 
1999, Mr. Schindel testified that ``premium pay expenses for 
Customs, specifically the work differential, substantially 
increased under COPRA.'' In fact night shift differential 
increased from $51,000 in FY 1993 to $11.9 million in FY 1998. 
Mr. Schindel reached the same conclusion at the Subcommittee's 
legislative hearing on July 17, 2001. A major reason for this 
dramatic increase in premium pay for shift differential is that 
COPRA increased the number of available hours where a Customs 
officer could earn night differential. The Congressional intent 
of the COPRA was to ensure that Customs officers' schedules met 
customer demand. A Treasury Inspector General report concluded 
that Customs schedules do correspond to its workload and to its 
customers' needs. Customs Officer Pay Reform Amendments 
(COPRA), OIG 96 094 (September 13, 1996). However, the report 
concluded that COPRA had caused a significant increase in night 
differential spending, amounting to at least $6 million per 
year.
    The report recommended: The Assistant Secretary 
(Enforcement) should direct Customs to seek legislation that 
would lessen the number of hours available for Customs officers 
to earn night differential and reduce the night work 
differentials to a 10 percent premium on base pay. The change 
to the COPRA should create a night differential payment package 
that would more accurately reimburse Customs officers for hours 
actually worked at night, as was done previously under FEPA. 
The provision would clarify Congressional intent that night 
premiums be awarded only for night work, correcting the anomaly 
that an officer can receive a night premium for working at 
noon, namely the limitation that night-time pay be for actual 
night-time hours worked.
    Rather than adopt the report's recommendations in toto, the 
Committee has chosen to address the inherent inequity of the 
current system which provides night-time premium pay to 
employees working during daytime hours. The bill would 
redistribute the savings generated by scaling back the hours 
that are eligible for night-time premium pay so as to make the 
legislation revenue neutral and overall inspector pay neutral. 
According to calculations from Customs, the savings from 
Section 123 will be sufficient to increase the night-time 
premium differential from 15% to at least 18% (for hours worked 
before midnight) and from 20% to 25% (for hours worked after 
midnight).
    Customs officials testified at the markup on October 31, 
2001, that there would be no impact on operations as a result 
of these changes and that all shifts would still be staffed. 
Also, given the current method of assigning shifts by having 
inspectors bid on them, inspectors will have the opportunity to 
seek different shifts depending upon their personal 
preferences. Thus, an inspector who has been receiving night-
time premium pay for working a noon to 8:00 p.m. shift could 
seek a later shift in order to continue to receive night time 
premium pay. At the same time, inspectors working the most 
popular night shift (4:00 p.m. to midnight), which accounts for 
48 percent of night shifts, would receive a raise from a 
current 15% premium for each hour to at least 18%. Committee 
Members believe this is a more equitable method for paying 
night-time premium pay than the existing system.

Sec. 124. Use of savings from payment of premium pay

            Present law
    No applicable section.
            Explanation of the provision
    This provision would require the Secretary of the Treasury 
to calculate any savings created as a result of sections 122 
and 123. Customs would be required to use the savings to 
provide additional overtime for enforcement purposes. The 
change in Section 123 to increase the premium pay for customs 
officers for hours actually worked is intended to offset the 
decrease in hours that the premium pay is available.
            Reason for change
    The Committee wants to ensure that savings from sections 
122 and 123 from this bill are used for paying higher premium 
pay to inspectors who actually work night-time shifts.

Sec. 125. Effective date

            Present law
    No applicable section.
            Explanation of the provision
    The provision states that the section will be effective 15 
days after enactment.
            Reason for change
    The Committee anticipates that the provision will take 
effect in the payment cycle after enactment.

                  Chapter 2--Miscellaneous Provisions

Sec. 131. Additional Customs Service officers for U.S.-Canada border

            Present law
    No applicable section.
            Explanation of the provision
    This provision earmarks $25 million and 285 new staff hires 
for Customs to use at the U.S.-Canada border.
            Reason for change
    Additional earmark: Since the terrorist attack on the U.S. 
on September 11th, Customs has continued to work under the 
highest level of alert. Customs has apprehended terrorists in 
the past as they attempted to go through the Northern Border 
with weaponry. Early reports are that some of the September 
11th terrorists also came through the Northern Border. 
Moreover, many U.S. industries rely upon immediate delivery of 
products from Canada in order to operate. Given also that 
Canada remains the largest trading partner for the United 
States, it is clear that new resources are needed to facilitate 
trade while protecting the border. The Committee notes that the 
Administration provided the Customs Service with no new hiring 
authority for staff from funds made available in the emergency 
supplemental appropriations bill in 2001. Nevertheless, Customs 
staff is continuing to work at the highest alert status during 
the current emergency, and Customs staff must work markedly 
increased overtime hours. New staff is needed particularly at 
the Northern Border to insure that border security is 
maintained while facilitating trade.
    ``Reverse Customs'' procedures: The Committee wishes to 
address the inspection and control requirements of the border 
crossings along the Northern Border. The Committee encourages 
the Administration, and the Customs Service in particular, to 
explore an agreement with Canadian officials to increase 
cooperation at border crossings and to station customs 
officials from each government on the opposite side of the 
border for the purpose of inspecting and clearing vehicles 
before they cross the border--the so-called ``reverse customs'' 
process.
    The Committee notes that Michigan/Canada border crossings 
at the Ambassador Bridge and the Detroit Windsor Tunnel would 
be a good location for a pilot project once an agreement 
between the United States and Canada is reached. According to 
data derived from the Bridge and Tunnel Operators Association, 
Michigan led the nation in U.S.-Canada border crossings with 
over 2.1 million trucks and 11.1 million cars crossing the 
border, with Ambassador Bridge and the Detroit-Windsor Tunnel 
showing the highest car, truck, and other vehicular traffic 
volumes through August 2001. It is estimated that over $1 
billion in trade crosses the Canada-U.S. border every day, with 
nearly half crossing either the Ambassador or Blue Water 
Bridges in Michigan.
    Such a pilot project could address increased security and 
safety concerns in the aftermath of the terrorist attacks in 
the United States on September 11, 2001, and ensure that 
potentially dangerous vehicles would be stopped prior to 
embarking upon the Ambassador Bridge and Detroit Windsor Tunnel 
structures. The Committee expects that U.S. Customs, in 
consulting and coordinating with Canadian Customs, would give 
great weight and sensitivity to sovereignty issues, laws, and 
customs, while at the same time achieving a workable and 
effective mechanism allowing Customs personnel to carry out 
their duties.
    In addition, the Committee recommends continuation of the 
use of automated, computerized inspection and commercial 
transaction systems by Customs at border crossings and 
particularly at the Michigan ports of entry, including but not 
limited to ACE, NCAP, NEXUS, and Port Pass. The Committee 
believes that these systems can and should be fully utilized 
even during this period of heightened security on all U.S. 
bridges, tunnels, and other border crossings in the aftermath 
of the September 11th terrorist attack on the United States. 
However, in order to ensure that the need for enhanced security 
at the ports of entry is maintained, the Committee has 
authorized additional funding for new technologies and systems 
to improve the ability of U.S. Customs to interdict dangerous 
vehicles and terrorist threats to our bridges, ports, and 
personnel at ports of entry.
    The Commissioner of Customs should report to the Committee 
regarding its implementation of the technology and pilot 
program initiatives set forth in this report, with particular 
emphasis on its efforts to coordinate the pilot program with 
Canadian Customs.

Sec. 132. Study and report relating to personnel practices of the 
        Customs Service

            Present law
    No applicable section.
            Explanation of provision
    Section 132 of H.R. 3129, as amended, 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.
            Reason for change
    Under the collective bargaining agreement between Customs 
and the National Treasury Employees' Union (NTEU), Customs 
cannot rotate a Customs officer permanently or for temporary 
duty unless the officer agrees to the change. In addition, the 
agreement specifies that the union may bring to grievance any 
issue relating to the impact and management of any management 
changes, including a management change relating to drug 
enforcement, and any issues not included in the collective 
bargaining agreement.
    The Committee has been concerned that the union is able to 
effectively thwart Customs drug interdiction efforts through 
bargaining or the unwillingness to bargain. There have been a 
number of examples in which the NTEU was able to delay 
negotiations on work conditions, to the detriment of the 
ability to interdict contraband, including narcotics. These 
examples included: (1) negotiations between the National 
Treasury Employees Union (NTEU) and Customs since early 1995 in 
El Paso, Texas, over work conditions at the three bridges 
between Mexico and El Paso relating to the use of a very 
successful drug interdiction approach called pre-primary roving 
for Canine Enforcement Officers and Inspectors; (2) 
implementing certain shift work in Miami;and (3) the percent of 
officers regularly scheduled to work weekend shifts at the John F. 
Kennedy airport (JFK).
    Shortly after the Subcommittee and Committee discussed 
these issues at the 1998 mark-ups, Customs and the Union 
settled their differences on the weekend shifts issues at JFK 
and El Paso. In addition, the Impasse Panel issued a decision 
on the shift issue in Miami. As a result of these developments, 
the Committee believes that many of the issues that have 
adversely impacted Customs drug interdiction efforts have been 
favorably resolved. However, the Committee believes that a 
study of the effect and impact of the collective bargaining 
process on Customs drug interdiction efforts is necessary to 
keep a watchful eye on this issue. In addition, the Committee 
is concerned that Customs' lack of authority in the past to 
rotate and temporarily assign officers may have adversely 
impacted its drug interdiction efforts. Therefore, the 
Committee is requiring that Customs conduct a comparison study 
of rotation policies with similarly situated federal personnel 
which would enable both the Committee and Customs to assess 
Customs rotation practices.

Sec. 133. Study and report relating to accounting and auditing 
        procedures of the Customs Service

            Present law
    No applicable section.
            Explanation of the provision
    This provision 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.
            Reason for change
    The Committee has received many complaints from U.S. 
importers about the specialized skill and knowledge base of 
auditors from the Customs Service. As with all government 
enforcement, the skill of enforcement officials is important in 
order to ensure that violations of law are not overlooked but 
also to ensure that legitimate acts are not mistakenly labeled 
illegal. Especially troubling are complaints that proprietary 
business information is not being given the proper level of 
confidentiality from disclosure. The Committee does not have 
sufficient data to confirm or deny these complaints 
definitively and has rather chosen to direct Customs to study 
and report on the procedures in place to ensure that auditors 
are properly trained.

Sec. 134. Establishment and implementation of cost accounting system; 
        reports

            Present law
    No applicable section.
            Explanation of the provision
    Section 134 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).
            Reason for change
    The Customs Service is currently unable to answer 
fundamental questions about how it spends money. This fact was 
mentioned above in the discussion of present law for Section 
101. For example, Customs states that it spends a certain 
amount of money on commercial operations. The figure is not 
based upon the continual adding of various commercial costs 
from all operations within Customs, such as the number of 
people who actually processed entries of merchandise at 
specific ports during a set period. Instead, the figure is 
based upon Customs officials' belief that a set percentage of 
its work is always related to commercial activities. That 
static percentage is based upon a no longer available, ad hoc 
survey conducted by Customs several years ago. A modern cost 
accounting system would allow Customs to accurately identify 
the amount of money spent at specific locations, for specific 
functions such as textile transshipment monitoring, searching 
for contraband, or processing entries of merchandise.

Sec. 135. Study and report relating to timeliness of prospective 
        rulings

            Present law
    No applicable section.
            Explanation of the provision
    This provision would require the Comptroller General to 
prepare a report to determine whether Customs has improved its 
timeliness in providing prospective rulings.
            Reason for change
    In light of oversight reports from the General Accounting 
Office and complaints from the business community, the General 
Accounting Office is directed to monitor and provide an update 
to its recent report in one year on the progress of Customs in 
substantially decreasing the time it takes to issue prospective 
rulings. The Committee had originally proposed a strict 
deadline of 90-days for Customs to issue prospective rulings. 
Because of the emergency currently facingCustoms, the draw upon 
its resources, and assurance from officials from the new Administration 
to act on GAO's comments, a mandatory deadline was dropped but will be 
revisited depending upon the results of GAO's review.

Sec. 136. Study and report relating to Customs user fees

            Present law
    No applicable section.
            Explanation of the provision
    This provision 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.
            Reason for change
    The Committee has already noted in the discussion at 
sections 101 and 134 the problem of a lack of reliable cost 
data from Customs. One consequence of having inadequate data is 
that importer user fees may not reflect the level of services 
provided for by the fee. Moreover, Customs officials admit that 
there is no cost accounting system in place for them to 
accurately track costs of providing services. For this reason, 
this section should be read in conjunction with Section 134 
requiring Customs to implement a cost accounting system.
    If the government buys a good or service at a price that 
purports to be based upon the cost of that good or service, 
then the government would expect a seller to provide adequate 
documentation to support that cost basis. The government 
therefore should provide similar justification of its costs 
especially when it requires importers to pay fees ostensibly to 
cover services rendered. The inability of government to justify 
the costs of its services to importers, while simultaneously 
urging increases in fees, has reasonably led to concerns among 
importers that the fee levels are no longer appropriate, may be 
inflated, and could be raised without adequate justification. 
So long as reliable data is not available, it will be 
difficult, if not impossible, to justify the current level of 
fees, much less extensions or changes.

                Subtitle D--Tools for Fighting Terrorism


Sec. 141. 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.
            Explanation of the provision
    This section 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. The ``good faith'' standard has been 
used in other contexts similar to this, as in 19 U.S.C. 
Sec. 507, for searches conducted by other individuals at the 
direction of Customs officers. Under this amendment, if Customs 
certifies in a lawsuit that the officer followed policy in 
conducting the allegedly improper search, the court would then 
make a finding of good faith immunity and would dismiss the 
suit against the officer.
            Reason for change
    Customs officers have the important responsibility to 
search persons arriving in the United States to prevent the 
introduction of contraband, including dangerous items. Often, a 
personal search is the only way to determine if a person is 
concealing contraband on or within their body. There has been a 
large increase in the number of private lawsuits against 
Customs officers by persons that have undergone personal 
searches. Despite the large increase in suits against Customs 
officers, almost every one of them are ultimately resolved in 
favor of the officers (i.e., there is a finding of qualified 
immunity).
    Customs officers have been subject to an increasing number 
of lawsuits by those searched at the border. In all but fewer 
than five of these dozens of cases in the last several years, 
the courts have found in the favor of the Customs officers. 
Nonetheless, each case tends to hinge on a lengthy, fact-
specific trial, potentially distracting the officers from their 
duties and creating a chilling effect among other officers. 
Though Customs officers are winning these cases, they must 
undergo discovery, depositions, and trial, even when those 
searches have uncovered drugs and other smuggled items on or 
inside the plaintiff. These officers may face financial burdens 
as well, as personal property such as cars and real estate may 
be covered by liens while the litigation is pending. Customs' 
experience is that it takes years to get decisions on qualified 
immunity for its officers, even in cases where the officer 
followed personal search policy and did nothing wrong.
    As Customs searches greater numbers of passengers to detect 
terrorists, there is a potential for Customs officers to become 
subject to an increasing number of lawsuits alleging ethnic or 
religious profiling. While officers are not permitted to 
discriminate on the basis of unconstitutional criteria, this 
amendment provides an avenue for frivolous and questionable 
suits to be resolved at an early stage. Accordingly, the 
amendment would have the effect of streamlining the existing 
process for judicial determinations on whether Customs officers 
are entitled to immunity from lawsuits.
    The amendment introduces a single standard--good faith--for 
courts to rely on to speedily dispose of unmeritorious lawsuits 
at an early stage. The Committee believes that the best (though 
not exclusive) measure of whether a Customs officer conducts a 
personal search in good faith is whether the officer follows 
established Customs policy. It is important to note thateven 
with this amendment, truly aggrieved plaintiffs would continue to have 
appropriate remedies to obtain redress for any improper searches as 
they could obtain money damages under the Federal Tort Claims Act 
(FTCA) against the government for tortious searches; obtain injunctive 
relief for unconstitutional policies; or if the officer acted in bad 
faith and in violation of clearly established constitutional or 
statutory rights, recover against the officer personally (because the 
officer would not be immune from personal liability).

Sec. 142. 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.
            Explanation of the provision
    This provision 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.
            Reason for change
    This provision would loosen restrictions on Customs' 
ability to alter the location, hours of operation and staffing 
at ports in response to terrorist threats. Such restrictions 
unduly limit Customs' ability to move personnel to locations 
where they can most effectively be used to reduce or respond to 
terrorist threats. They also force Customs to maintain offices 
and personnel in locations that have very little international 
traffic and where they cannot be used effectively to address 
threats of terrorism. The terrorist attack on the United States 
on September 11th resulted in the need for changes in border 
staffing and security. The Administration requested these 
changes to law in order to give officials flexibility in 
providing for border security during the current and future 
emergencies.

Sec. 143. Mandatory advanced electronic information for cargo and 
        passengers

            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.
            Explanation of the provision
    This provision 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.
            Reason for change
    Advanced electronic manifests will significantly enhance 
Customs' ability to identify high-risk passengers and cargo and 
will ensure that suspected terrorists or those on law 
enforcement or terrorist watch lists are identified before 
entering or leaving the United States. The passenger 
identification requirement will provide Customs with, among 
other things, the name and passport number of every passenger 
in advance of a carrier's attempt to enter or leave the United 
States. Similarly, the cargo manifest requirement provides 
Customs with a wide range of important information about all 
cargo, including those involved in its shipment. This proposal 
builds upon a successful voluntary program that Customs has 
already with the airlines. While all commercial carriers must 
provide this information to Customs at some point, this 
proposal would require it prior to entry or departure and 
electronically for passenger carriers. The amendment makes a 
similar requirement for cargo entering the country.
    The Committee received many questions from carriers as to 
its concerns that Customs does not currently have the 
infrastructure or procedures to implement in all cases advanced 
electronic manifesting. The Committee is aware of the current 
state of the system and expects the Secretary of the Treasury 
to construct both infrastructure and procedures to implement 
these requirements by means of regulations. The current Customs 
computer system would be unable to handle the increased 
electronic information contemplated by these new provisions. In 
this regard, the full funding of the ACE computer system is all 
the more important to allow Treasury and Customs to proceed 
quickly.
    The Committee intends the Treasury Department to promulgate 
regulations implementing the advance reporting requirements of 
this section after consulting with various component members of 
the transportation industry. This should occur in conjunction 
with the design and development of the ACE computer system, 
which is intended to accommodate the new advanced reporting 
information. Further, the Committee expects the Treasury 
Department to engage in a regulation making process that will 
take into account, and accommodate to the extent reasonable, 
standard commercial practices. Such regulations should 
appropriately reflect the distinct differences among trucking, 
rail, vessel, air and other transportation entities while 
advancing the government's need to obtain the manifest 
information in a timely manner.

Sec. 144. Border search authority for certain contraband in outbound 
        mail

            Present law
    Although Customs currently searches all inbound mail, and 
although it searches outboundmail sent via private carriers, 
outbound mail carried by the Postal Service is not subject to search.
            Explanation of the provision
    This proposal 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. Because Customs does not inspect outbound mail 
carried by the Postal Service, millions of packages mailed out 
of the United States, some weighing many pounds and capable of 
containing dangerous items such as high explosives, illegally 
obtained cash, or biological agents, are free from any Customs 
inspection.
    This new section would provide Customs with the same 
authority that it has to search incoming mail. Specifically, 
the bill would authorize searches of outbound non-letter class 
packages. Letter-class outbound mail could be searched upon 
reasonable suspicion that it contained firearms, monetary 
instruments (checks or cash), or several other categories of 
dangerous materials and other merchandise subject to the laws 
enforced by Customs. However, reading of mail would not be 
authorized absent Customs officers obtaining a search warrant 
or consent.
            Reason for change
    Often the smuggling of weapons, drugs, or other contraband 
is only half of an illegal operation. The other half consists 
of the outbound smuggling of unreported money that helps 
finance the illegal activity. The current government 
investigation into the activities of the terrorists responsible 
for the attack of September 11th is heavily reliant upon the 
tracing of money that helped finance the attack. Long before 
September 11th, government investigators have known that drug 
money frequently leaves the country and helps foreign drug 
sellers continue their operations. Tracing the money helps 
bring illegal operators to justice. It is therefore critical 
that Customs have the authority to search outbound mail.
    The Committee notes that Customs currently searches 
outbound envelopes and cargo shipped via private express 
companies, but there have been doubts by some that Customs has 
the authority to search outbound mail sent via the U.S. Postal 
Service. It is the intention of the Committee to make an 
unambiguous declaration and clarification of the present law to 
the effect that the U.S. Customs Service has and must have 
access to search all outbound mail. Due regard for privacy 
rights of individuals is addressed through the requirement of 
probable cause and a search warrant or consent in the event 
that letter class mail needs to be read.

Sec. 145. Authorization of appropriations for reestablishment of 
        Customs operations in New York City

            Present law
    No applicable section.
            Explanation of the provision
    On September 11, 2001, destruction of the World Trade 
Center complex destroyed substantial operations of the U.S. 
Customs Service. This provision authorizes funds to reestablish 
those operations.
            Reason for change
    Textile transshipment operations are specifically mentioned 
as needing reestablishment given the importance of that work to 
the import sensitive textile and apparel manufacturers in the 
United States.

              Subtitle E--Textile Transshipment Provisions


Sec. 151. GAO Audit of textile transshipment monitoring by Customs 
        Service

            Present law
    No applicable section.
            Explanation of the provision
    This provision 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.
            Reason for change
    The Committee continues to hear complaints about textile 
goods entering the country that have been transshipped, meaning 
that an importer has entered the goods with an incorrect 
declaration for the purpose of obtaining entry or a lower duty. 
The Committee is aware that Customs has ongoing operations to 
monitor and enforce textile transshipment, and many allegations 
may already be under investigation. A report from the 
Comptroller will assist the Committee in evaluating Customs' 
enforcement.

Sec. 152. Authorization of appropriations for textile transshipment 
        enforcement operations

            Present law
    No applicable section.
            Explanation of the provision
    This provision 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' base authorization and the authorization 
to reestablish the destroyed textile monitoring and enforcement 
operations at the World Trade Center.
            Reason for change
    The Committee wishes to increase the level of funding for 
monitoring and enforcement of textile transshipment to ensure 
every effort is made to control imports according to present 
law.

Sec. 153. Implementation of the African Growth and Opportunity Act

            Present law
    No applicable section.
            Explanation of the provision
    The provision 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).
            Reason for change
    Congress intended for sub-Saharan countries to receive 
benefits in the African Growth and Opportunity Act which passed 
in the 106th Congress. Due to the lack of experience and 
infrastructure in many African countries, however, these 
countries are experiencing difficulty in taking advantage of 
the Act and its benefits. The Committee, therefore, wishes 
Customs to provide technical assistance to these countries.

       Title II--Office of the United States Trade Representative


Sec. 201. 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.
            Explanation of the provision
    This provision authorizes $30,000,000 for FY 2002 and 
$31,000,000 for FY 2003. 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.
            Reason for change
    The Committee recognizes that USTR needs increased budget 
authorization to meet its expenses and hire new employees. The 
legislation authorizes the full amount of the President's 
budget request for USTR. The Committee wants to be sure USTR 
has enough resources so that the World Trade Organization (WTO) 
negotiations will successfully open trade in favor of the 
interests of the United States.

        Title III--United States International Trade Commission


Sec. 301. 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.
            Explanation of the provision
    This provision authorizes $51,400,000 for FY 2002 and 
$53,400,000 for FY 2003. The provision requires submission of 
out-of-year budget projections to the Ways and Means and 
Finance Committees.
            Reason for change
    The Committee recognizes that the ITC needs increased 
budget authorization to meet the increased workload. The 
legislation authorizes the full amount of the President's 
budget request for the ITC.

                    Title IV--Other Trade Provisions


Sec. 401. 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.
            Explanation of the provision
    The provision would increase the current $400 duty 
exemption to $800.
            Reason for change
    The current duty exemption of $400 has been in place since 
1983 and after inflation no longer reflects the same level of 
buying power. An increase is therefore in order.

Sec. 402. 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.
            Explanation of the provision
    This provision 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.
            Reason for change
    A government audit should be an even-handed and neutral 
evaluation of a person's compliance with the law. The 
government should treat overpayments/overdeclarations and 
underpayments/ underdeclarations equally, and if both are found 
during an audit, they should be used to offset each other. The 
Committee redrafted this provision on the basis of concerns 
from Customs. It is the Committee's intention that this 
provision shall not affect in any way Customs' current 
authority to define an audit's scope, time period, and 
methodology.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill, H.R. 3129.

                       motion to report the bill

    The bill, H.R. 3129, as amended, was ordered favorably 
reported by voice vote (with a quorum being present).

                          votes on amendments

    The Chairman's amendment in the nature of a substitute was 
agreed to by a rollcall vote of 20 yeas to 14 nays. The vote 
was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative              Yea      Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.......................        X   .......  ........  Mr. Rangel.........  .......  ........  ........
Mr. Crane........................        X   .......  ........  Mr. Stark..........  .......        X   ........
Mr. Shaw.........................        X   .......  ........  Mr. Matsui.........  .......        X   ........
Mrs. Johnson.....................        X   .......  ........  Mr. Coyne..........  .......  ........  ........
Mr. Houghton.....................  ........  .......  ........  Mr. Levin..........  .......        X   ........
Mr. Herger.......................        X   .......  ........  Mr. Cardin.........  .......        X   ........
Mr. McCrery......................  ........  .......  ........  Mr. McDermott......  .......        X   ........
Mr. Camp.........................        X   .......  ........  Mr. Kleczka........  .......        X   ........
Mr. Ramstad......................        X   .......  ........  Mr. Lewis (GA).....  .......        X   ........
Mr. Nussle.......................        X   .......  ........  Mr. Neal...........  .......        X   ........
Mr. Johnson......................        X   .......  ........  Mr. McNulty........  .......  ........  ........
Ms. Dunn.........................  ........  .......  ........  Mr. Jefferson......  .......        X   ........
Mr. Collins......................        X   .......  ........  Mr. Tanner.........  .......        X   ........
Mr. Portman......................        X   .......  ........  Mr. Becerra........  .......        X   ........
Mr. English......................        X   .......  ........  Mrs. Thurman.......  .......        X   ........
Mr. Watkins......................        X   .......  ........  Mr. Doggett........  .......        X   ........
Mr. Hayworth.....................        X   .......  ........  Mr. Pomeroy........  .......        X   ........
Mr. Weller.......................        X   .......  ........
Mr. Hulshof......................        X   .......  ........
Mr. McInnis......................  ........  .......  ........
Mr. Lewis (KY)...................        X   .......  ........
Mr. Foley........................        X   .......  ........
Mr. Brady........................        X   .......  ........
Mr. Ryan.........................        X   .......  ........
----------------------------------------------------------------------------------------------------------------

    A rollcall vote was conducted on the following amendment to 
the Chairman's amendment in the nature of a substitute:
    An amendment by Mr. Stark on behalf of himself and Mr. 
Rangel, which would strike sections 122 and 123, correcting 
overtime and premium pay, was defeated by a rollcall vote of 13 
yeas to 20 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea       Nay     Present     Representative       Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.......................  .......        X   ........  Mr. Rangel.........  ........  .......  ........
Mr. Crane........................  .......        X   ........  Mr. Stark..........        X   .......  ........
Mr. Shaw.........................  .......        X   ........  Mr. Matsui.........        X   .......  ........
Mrs. Johnson.....................  .......        X   ........  Mr. Coyne..........  ........  .......  ........
Mr. Houghton.....................  .......  ........  ........  Mr. Levin..........        X   .......  ........
Mr. Herger.......................  .......        X   ........  Mr. Cardin.........        X   .......  ........
Mr. McCrery......................  .......  ........  ........  Mr. McDermott......        X   .......  ........
Mr. Camp.........................  .......        X   ........  Mr. Kleczka........  ........  .......  ........
Mr. Ramstad......................  .......        X   ........  Mr. Lewis (GA).....        X   .......  ........
Mr. Nussle.......................  .......        X   ........  Mr. Neal...........        X   .......  ........
Mr. Johnson......................  .......        X   ........  Mr. McNulty........  ........  .......  ........
Ms. Dunn.........................  .......  ........  ........  Mr. Jefferson......        X   .......  ........
Mr. Collins......................  .......        X   ........  Mr. Tanner.........        X   .......  ........
Mr. Portman......................  .......        X   ........  Mr. Becerra........        X   .......  ........
Mr. English......................  .......        X   ........  Mrs. Thurman.......        X   .......  ........
Mr. Watkins......................  .......        X   ........  Mr. Doggett........        X   .......  ........
Mr. Hayworth.....................  .......        X   ........  Mr. Pomeroy........        X   .......  ........
Mr. Weller.......................  .......        X   ........  ...................
Mr. Hulshof......................  .......        X   ........
Mr. McInnis......................  .......  ........  ........
Mr. Lewis (KY)...................  .......        X   ........
Mr. Foley........................  .......        X   ........
Mr. Brady........................  .......        X   ........
Mr. Ryan.........................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

                           PROCEDURAL MOTIONS

    A rollcall vote was conducted on a motion by Mr. Crane 
pursuant to clause 1 of rule 22 of the Rules of the House that 
the Committee authorize the Chairman to offer such motions as 
may be necessary in the House to go to conference with the 
Senate on the bill H.R. 3129 or a similar Senate bill. The 
motion was agreed to by a vote of 19 yeas to 1 nay, and 2 
voting present. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative              Yea      Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas......................        X   .......  ........  Mr. Rangel.........  .......  ........  .........
Mr. Crane.......................        X   .......  ........  Mr. Stark..........  .......  ........  .........
Mr. Shaw........................        X   .......  ........  Mr. Matsui.........  .......  ........  .........
Mrs. Johnson....................        X   .......  ........  Mr. Coyne..........  .......  ........  .........
Mr. Houghton....................  ........  .......  ........  Mr. Levin..........  .......  ........  .........
Mr. Herger......................        X   .......  ........  Mr. Cardin.........  .......  ........         X
Mr. McCrery.....................  ........  .......  ........  Mr. McDermott......  .......  ........  .........
Mr. Camp........................        X   .......  ........  Mr. Kleczka........  .......        X   .........
Mr. Ramstad.....................        X   .......  ........  Mr. Lewis (GA).....  .......  ........  .........
Mr. Nussle......................        X   .......  ........  Mr. Neal...........  .......  ........  .........
Mr. Johnson.....................        X   .......  ........  Mr. McNulty........  .......  ........  .........
Ms. Dunn........................  ........  .......  ........  Mr. Jefferson......  .......  ........  .........
Mr. Collins.....................        X   .......  ........  Mr. Tanner.........  .......  ........  .........
Mr. Portman.....................        X   .......  ........  Mr. Becerra........  .......  ........         X
Mr. English.....................        X   .......  ........  Mrs. Thurman.......  .......  ........  .........
Mr. Watkins.....................        X   .......  ........  Mr. Doggett........  .......  ........  .........
Mr. Hayworth....................        X   .......  ........  Mr. Pomeroy........  .......  ........  .........
Mr. Weller......................        X   .......  ........
Mr. Hulshof.....................        X   .......  ........
Mr. McInnis.....................  ........  .......  ........
Mr. Lewis (KY)..................        X
Mr. Foley.......................  ........
Mr. Brady.......................        X
Mr. Ryan........................        X
----------------------------------------------------------------------------------------------------------------

                           IV. BUDGET EFFECTS


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of H.R. 3129, as 
reported: The Committee agrees with the estimate prepared by 
CBO which is included below.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that 
enactment of H.R. 3129 would diminish duty revenues by $6 
million per year as a result of the increase in the duty 
exemption for travelers from abroad from $400 to $800.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office, the following 
report prepared by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 20, 2001.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3129, the Customs 
Border Security Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                           Steven Lieberman
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 3129--Customs Border Security Act of 2001

    Summary: H.R. 3129 would authorize appropriations for 2002 
and 2003 for the U.S. Customs Service, the Office of the U.S. 
Trade Representative, and the International Trade Commission. 
The authorizations for the Customs Service would include funds 
for salaries and expenses, its Automated Commercial Environment 
(ACE) computer system, air and marine interdiction, 
reestablishment of Customs operations in New York City, and a 
program to prevent child pornography. This legislation would 
increase the personal duty exemption for travelers entering the 
United States. The bill also would make several changes to the 
current laws relating to overtime and premium pay for Customs 
officers. Finally, H.R. 3129 would direct the General 
Accounting Office (GAO) to prepare three reports on various 
Customs issues.
    Because an appropriation for fiscal year 2002 for the 
Customs Service has already been enacted, H.R. 3129 would have 
a relatively small effect on spending in that year. CBO 
estimates that implementing H.R. 3129 would cost about $2.9 
billion over the 2002-2006 period, assuming appropriation of 
the authorized and estimated amounts. (About $2.8 billion of 
this total would be spending for the Customs Service.) We 
estimate that enacting H.R. 3129 also would decrease revenues 
by about $4 million annually because of the increased personal 
duty exemption. Finally, the bill could have a negligible net 
impact on direct spending for overtime and premium pay for 
Customs officers. Because the bill would affect revenues and 
direct spending, pay-as-you-go procedures would apply.
    H.R. 3129 would impose private-sector mandates, as defined 
by the Unfunded Mandates Reform Act (UMRA), on certain land, 
air, and vessel carriers. CBO estimates that the total direct 
cost of those mandates would fall below the annual threshold 
established by UMRA for private-sector mandates ($113 million 
in 2001, adjusted annually for inflation). The bill contains no 
intergovernmental mandates as defined in UMRA and would impose 
no costs on state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3129 is shown the following table. The 
costs of this legislation fall within budget functions 150 
(international affairs), 750 (administration of justice), and 
800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2002     2003     2004     2005     2006
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending under current law:
    Budget authority...............................................    2,767        0        0        0        0
    Estimated outlays..............................................    2,649      515      160        0        0
Proposed changes:
    Estimated authorization level..................................      107    2,825        0        0        0
    Estimated outlays..............................................       56    2,332      401      143        0
Spending under H.R. 3129:
    Estimated authorization level..................................    2,874    2,825        0        0        0
    Estimated outlays..............................................    2,705    2,847      561      143        0

                                               CHANGES IN REVENUES

Increased personal duty exemption: Estimated revenues..............       -4       -4       -4       -4       -4
----------------------------------------------------------------------------------------------------------------
Notes: 1. The 2002 level is the amount appropriated for that year for the Customs Service, the Office of the
  United States Trade Representative, and the International Trade Commission. 2. For fiscal year 2002, most of
  the increased funding provided by H.R. 3129 would be for reestablishment of customs operations in New York
  City. 3. H.R. 3129 could also affect direct spending, but CBO estimates that any such effects would be less
  than $500,000 annually.

            Basis of estimate
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing the bill would cost about $2.9 
billion over the 2002-2006 period. (About $2.8 billion of this 
total would be for spending by the Customs Service.) We 
estimate that enacting H.R. 3129 also would decrease revenues 
by about $4 million annually because of the increased personal 
duty exemption for travelers entering the United States. 
Enacting the bill could affect direct spending, but we estimate 
that any effects would be less than $500,000 annually.
            Spending subject to appropriation
    For this estimate, CBO assumes that the amounts authorized 
by the bill will be appropriated near the start of each fiscal 
year and that outlays generally will follow historical spending 
rates for the authorized activities or for similar programs.
    Based on information from the Customs Service, CBO 
estimates that it would cost roughly $100 million over the 
2002-2004 period to reestablish its operations in New York 
City. The agency's main facility in lower Manhattan, which 
housed 800 employees and contained several laboratories, was 
destroyed by the terrorist attacks on September 11, 2001. Funds 
would be used mostly to equip new office space for Customs 
employees and to replace the materials testing and crime 
investigation laboratories that were destroyed. Based on 
information from GAO, we estimate that the three reports 
required by the bill would cost about $1 million in 2002.
            Revenues
    H.R. 3129 would increase the personal-duty exemption for 
persons entering the United States from $400 to $800. This 
provision would increase the amount of goods that travelers 
from abroad could bring in free of duty. Based on information 
from the Customs Service, CBO estimates that this provision 
would decrease revenues by about $4 million each year.
            Direct spending
    The provisions of H.R. 3129 that modify overtime and 
premium pay for Customs officers could affect direct spending 
since such costs are paid from funds not subject to annual 
appropriation. Some of the bill's provisions could increase 
these personnel costs, while other provisions would probably 
yield savings. CBO estimates that the net effect of H.R. 3129 
on direct spending for overtime and premium pay would be less 
than $500,000 a year.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The 
changes in outlays and revenues that would be subject to pay-
as-you-go procedures are shown in the following table. For the 
purposes of pay-as-you-go procedures, only the effects in the 
budget year and the succeeding four years are counted.

----------------------------------------------------------------------------------------------------------------
                                                           By fiscal year in millions of dollars--
                                           ---------------------------------------------------------------------
                                             2002   2003   2004   2005   2006   2007   2008   2009   2010   2011
----------------------------------------------------------------------------------------------------------------
Changes in outlays........................      0      0      0      0      0      0      0      0      0      0
Changes in receipts.......................     -4     -4     -4     -4     -4     -4     -4     -4     -4     -4
----------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
H.R. 3129 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments.
    Estimated impact on the private sector: H.R. 3129 would 
impose private-sector mandates, as defined by UMRA, on certain 
land, air, and vessel carriers seeking approval from the U.S. 
Customs Service for entry into the United States or for 
clearance to proceed from a port or place in the United States. 
The bill would require each land, air, or vessel carrier to 
provide by electronic transmission cargo manifest information 
in advance of such entry or clearance. The bill also would 
require such carriers with passengers arriving or departing the 
United States to provide by electronic transmission certain 
passenger and crew member manifest information in advance of 
such entry or clearance. According to the U.S. Customs Service, 
all U.S. air carriers and many cargo vessels currently provide 
such information on a voluntary basis. Based on information 
from representatives of the transportation industry, CBO 
estimates that the total direct cost to comply with mandates in 
the bill would fall below the annual threshold established by 
UMRA for private-sector mandates ($113 million in 2001, 
adjusted annually for inflation).
    Estimate prepared by: Federal spending: Mark Grabowicz; 
Federal revenues: Erin Whitaker; impact on State, local, and 
tribal governments: Victoria Heid Hall; impact on the private 
sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis; G. Thomas Woodward, Assistant 
Director for Tax Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based on public hearing testimony and 
information from the Administration, concluded that it is 
appropriate and timely to consider the resolution as reported.

        B. Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee advises that the 
Administration has in place program goals and objectives, which 
have been reviewed by the Committee. H.R. 3129 addresses 
several items by way of studies and reports for the purpose of 
evaluating whether Customs is meetings its goals and 
objectives.

                 C. Constitutional Authority Statement

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article 1 of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States.'')

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

SECTION 301 OF THE CUSTOMS PROCEDURAL REFORM AND SIMPLIFICATION ACT OF 
                                  1978

  Sec. 301. (a)(1) * * *

           *       *       *       *       *       *       *

  (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).
  (b) Authorization of Appropriations.--
          (1) For noncommercial operations.--There are 
        authorized to be appropriated for the salaries and 
        expenses of the Customs Service that are incurred in 
        noncommercial operations not to exceed the following:
                  [(A) $516,217,000 for fiscal year 1991.
                  [(B) $542,091,000 for fiscal year 1992.]
                  (A) $886,513,000 for fiscal year 2002.
                  (B) $909,471,000 for fiscal year 2003.
          (2) For commercial operations.--(A) There are 
        authorized to be appropriated for the salaries and 
        expenses of the Customs Service that are incurred in 
        commercial operations not less than the following:
                  [(i) $672,021,000 for fiscal year 1991.
                  [(ii) $705,793,000 for fiscal year 1992.]
                  (i) $1,603,482,000 for fiscal year 2002.
                  (ii) $1,645,009,000 for fiscal year 2003.

           *       *       *       *       *       *       *

          (3) For air interdiction.--There are authorized to be 
        appropriated for the operation (including salaries and 
        expenses) and maintenance of the air interdiction 
        program of the Customs Service not to exceed the 
        following:
                  [(A) $143,047,000 for fiscal year 1991.
                  [(B) $150,199,000 for fiscal year 1992.]
                  (A) $181,860,000 for fiscal year 2002.
                  (B) $186,570,000 for fiscal year 2003.
                              ----------                              


               SECTION 5 OF THE ACT OF FEBRUARY 13, 1911

  AN ACT To diminish the expense of proceedings on appeal and writ of 
                         error or of certiorari

SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

  (a) Overtime Pay.--
          (1) In general.--Subject to paragraph (2) and 
        subsection (c), a customs officer who is officially 
        assigned to perform work in excess of 40 hours in the 
        administrative workweek of the officer or in excess of 
        8 hours in a day shall be compensated for that work at 
        an hourly rate of pay that is equal to 2 times the 
        hourly rate of the basic pay of the officer. Overtime 
        pay provided under this subsection shall not be paid to 
        any customs officer unless such officer actually 
        performed work during the time corresponding to such 
        overtime pay. The preceding sentence shall not apply 
        with respect to the payment of an award or settlement 
        to a customs officer who was unable to perform overtime 
        work as a result of a personnel action in violation of 
        section 5596 of title 5, United States Code, section 
        6(d) of the Fair Labor Standards Act of 1938, or title 
        VII of the Civil Rights Act of 1964. For purposes of 
        this paragraph, the hourly rate of basic pay for a 
        customs officer does not include any premium pay 
        provided for under subsection (b).

           *       *       *       *       *       *       *

  (b) Premium Pay for Customs Officers.--
          [(1) Night work differential.--
                  [(A) 3 p.m. to midnight shiftwork.--If the 
                majority of the hours of regularly scheduled 
                work of a customs officer occurs during the 
                period beginning at 3 p.m. and ending at 12 
                a.m., the officer is entitled to pay for work 
                during such period (except for work to which 
                paragraph (2) or (3) applies) at the officer's 
                hourly rate of basic pay plus premium pay 
                amounting to 15 percent of that basic rate.
                  [(B) 11 p.m. to 8 a.m. shiftwork.--If the 
                majority of the hours of regularly scheduled 
                work of a customs officer occurs during the 
                period beginning at 11 p.m. and ending at 8 
                a.m., the officer is entitled to pay for work 
                during such period (except for work to which 
                paragraph (2) or (3) applies) at the officer's 
                hourly rate of basic pay plus premium pay 
                amounting to 20 percent of that basic rate.
                  [(C) 7:30 p.m. to 3:30 a.m. shiftwork.--If 
                the regularly scheduled work assignment of a 
                customs officer is 7:30 p.m. to 3:30 a.m., the 
                officer is entitled to pay for work during such 
                period (except for work to which paragraph (2) 
                or (3) applies) at the officer's hourly rate of 
                basic pay plus premium pay amounting to 15 
                percent of that basic rate for the period from 
                7:30 p.m. to 11:30 p.m. and at the officer's 
                hourly rate of basic pay plus premium pay 
                amounting to 20 percent of that basic rate for 
                the period from 11:30 p.m. to 3:30 a.m.]
          (1) Night work differential.--
                  (A) 5 p.m. to midnight.--(i) If any hours of 
                regularly scheduled work of a customs officer 
                occur during the hoursof 5 p.m. and 12 a.m., 
the officer is entitled to pay for such hours of work (except for work 
to which paragraph (2) or (3) applies) at the officer's hourly rate of 
basic pay plus premium pay amounting to not less than 18 percent of 
that basic rate.
                  (ii) If the regularly scheduled work of a 
                customs officer is 4 p.m. to 12:00 a.m., the 
                officer is entitled to pay for work during such 
                period (except for work to which paragraph (2) 
                or (3) applies) at the officer's hourly rate of 
                basic pay plus premium pay amounting to not 
                less than 18 percent of that basic rate.
                  (B) Midnight to 6 a.m.--(i) If any hours of 
                regularly scheduled work of a customs officer 
                occur during the hours of 12 a.m. and 6 a.m., 
                the officer is entitled to pay for such hours 
                of work (except for work to which paragraph (2) 
                or (3) applies) at the officer's hourly rate of 
                basic pay plus premium pay amounting to 25 
                percent of that basic rate.
                  (ii) If the regularly scheduled work of a 
                customs officer is 12 a.m. to 8:00 a.m., the 
                officer is entitled to pay for work during such 
                period (except for work to which paragraph (2) 
                or (3) applies) at the officer's hourly rate of 
                basic pay plus premium pay amounting to 25 
                percent of that basic rate.

           *       *       *       *       *       *       *

          (4) Treatment of premium pay.--Premium pay provided 
        for under this subsection may not be treated as being 
        overtime pay or compensation for any purpose. Premium 
        pay provided under this subsection shall not be paid to 
        any customs officer unless such officer actually 
        performed work during the time corresponding to such 
        premium pay. The preceding sentence shall not apply 
        with respect to the payment of an award or settlement 
        to a customs officer who was unable to perform work 
        during the time described in the preceding sentence as 
        a result of a personnel action in violation of section 
        5596 of title 5, United States Code, section 6(d) of 
        the Fair Labor Standards Act of 1938, or title VII of 
        the Civil Rights Act of 1964.
  (c) Limitations.--
          [(1) Fiscal year cap.--The aggregate of overtime pay 
        under subsection (a) (including commuting compensation 
        under subsection (a)(2)(B)) and premium pay under 
        subsection (b) that a customs officer may be paid in 
        any fiscal year may not exceed $25,000; except that the 
        Commissioner of Customs or his designee may waive this 
        limitation in individual cases in order to prevent 
        excessive costs or to meet emergency requirements of 
        the Customs Service.]
          (1) Fiscal year cap.--The aggregate of overtime pay 
        under subsection (a) (including commuting compensation 
        under subsection (a)(2)(B)) that a customs officer may 
        be paid in any fiscal year may not exceed $30,000, 
        except that--
                  (A) the Commissioner of Customs or his or her 
                designee may waive this limitation in 
                individual cases in order to prevent excessive 
                costs or to meet emergency requirements of the 
                Customs Service; and
                  (B) upon certification by the Commissioner of 
                Customs to the Chairmen of the Committee on 
                Ways and Means of the House of Representatives 
                and the Committee on Finance of the Senate that 
                the Customs Service has in operation a system 
                that provides accurate and reliable data on a 
                daily basis on overtime and premium pay that is 
                being paid to customs officers, the 
                Commissioner is authorized to pay any customs 
                officer for one work assignment that would 
                result in the overtime pay of that officer 
                exceeding the $30,000 limitation imposed by 
                this paragraph, in addition to any overtime pay 
                that may be received pursuant to a waiver under 
                subparagraph (A).

           *       *       *       *       *       *       *

  (e) Use of Savings From Payment of Premium Pay.--
          (1) Use of amounts.--For fiscal year 2002, the 
        Secretary of the Treasury--
                  (A) shall determine under paragraph (2) the 
                amount of savings from the payment of premium 
                pay to customs officers; and
                  (B) shall use an amount from the Customs User 
                Fee Account equal to such amount determined 
                under paragraph (2) for additional premium pay 
                described in clauses (i) and (ii) of subsection 
                (b)(1)(A).
          (2) Determination of savings amount.--The Secretary 
        shall calculate an amount equal to the difference 
        between--
                  (A) the estimated cost for premium pay that 
                would have been incurred during fiscal year 
                2002 if this section, as in effect on the day 
                before the date of the enactment of section 123 
                of the Customs Border Security Act of 2001, had 
                governed such costs; and
                  (B) the actual cost for premium pay that is 
                incurred during fiscal year 2002 under this 
                section, as amended by section 123 of the 
                Customs Border Security Act of 2001.
  [(e)] (f) Definitions.--As used in this section:
          (1) * * *

           *       *       *       *       *       *       *

                              ----------                              


       SECTION 3061 OF THE REVISED STATUTES OF THE UNITED STATES

  Sec. 3061. (a) Any of the officers or persons authorized to 
board or search vessels may stop, search, and examine, as well 
without as within their respective districts, any vehicle, 
beast, or person, on which or whom he or they shall suspect 
there is merchandise which is subject to duty, or shall have 
been introduced into the United States in any manner contrary 
to law, whether by the person in possession or charge, or by, 
in, or upon such vehicle or beast, or otherwise, and to search 
any trunk or envelope, wherever found, in which he may have a 
reasonable cause to suspect there is merchandise which was 
imported contrary to law; and if any such officer or other 
person so authorized shall find any merchandise on or about any 
such vehicle, beast, or person, or in anysuch trunk or 
envelope, which he shall have reasonable cause to believe is subject to 
duty, or to have been unlawfully introduced into the United States, 
whether by the person in possession or charge, or by, in, or upon such 
vehicle, beast, or otherwise, he shall seize and secure the same for 
trial.
  (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.
                              ----------                              


TARIFF ACT OF 1930

           *       *       *       *       *       *       *



TITLE III--SPECIAL PROVISIONS

           *       *       *       *       *       *       *


Part II--United States Tariff Commission

           *       *       *       *       *       *       *



SEC. 318. EMERGENCIES.

  (a) Whenever the President shall by proclamation declare an 
emergency to exist by reason of a state of war, or otherwise, 
he may authorize the Secretary of the Treasury to extend during 
the continuance of such emergency the time herein prescribed 
for the performance of any act, and may authorize the Secretary 
of the Treasury to permit, under such regulations as the 
Secretary of the Treasury may prescribe, the importation free 
of duty of food, clothing, and medical, surgical, and other 
supplies for use in emergency relief work. The Secretary of the 
Treasury shall report to the Congress any action taken under 
the provisions of this section.
  (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 
        directly respond 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. 330. ORGANIZATION OF THE COMMISSION.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Authorization of Appropriations.--(1) * * *
  (2)(A) There are authorized to be appropriated to the 
Commission for necessary expenses (including the rental of 
conference rooms in the District of Columbia and elsewhere) not 
to exceed the following:
          [(i) $41,170,000 for fiscal year 1991.
          [(ii) $44,052,000 for fiscal year 1992.]
          (i) $51,400,000 for fiscal year 2002.
          (ii) $53,400,000 for fiscal year 2003.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *


                  TITLE IV--ADMINISTRATIVE PROVISIONS

      PART I--DEFINITIONS AND NATIONAL CUSTOMS AUTOMATION PROGRAM

Subpart A--Definitions

           *       *       *       *       *       *       *


SEC. 401. MISCELLANEOUS.

  When used in this title or in Part I of Title III--
  (a) * * *

           *       *       *       *       *       *       *

  (t) The term ``land, air, or vessel carrier'' means a land, 
air, or vessel carrier, as the case may be, that transports 
goods or passengers for payment or other consideration, 
including money or services rendered.

           *       *       *       *       *       *       *


      Part II--Report, Entry, and Unlading of Vessels and Vehicles

SEC. 431. MANIFEST--REQUIREMENT, FORM, AND CONTENTS.

  (a) * * *
  (b) Production of Manifest.--(1) Any manifest required by the 
Customs Service shall be signed, produced, delivered or 
electronically transmitted by the master or person in charge of 
thevessel, aircraft, or vehicle, or by any other authorized 
agent of the owner or operator of the vessel, aircraft, or vehicle in 
accordance with the requirements prescribed under subsection (d). A 
manifest may be supplemented by bill of lading data supplied by the 
issuer of such bill. If any irregularity of omission or commission 
occurs in any way in respect to any manifest or bill of lading data, 
the owner or operator of the vessel, aircraft or vehicle, or any party 
responsible for such irregularity, shall be liable for any fine or 
penalty prescribed by law with respect to such irregularity. The 
Customs Service may take appropriate action against any of the parties.
  (2) In addition to any other requirement under this section, 
for each land, air, or vessel carrier required to make entry or 
obtain clearance under the customs laws of the United States, 
the pilot, the master, operator, or owner of such carrier (or 
the authorized agent of such operator or owner) shall provide 
by electronic transmission cargo manifest information in 
advance of such entry or clearance in such manner, time, and 
form as prescribed under regulations by the Secretary. The 
Secretary may exclude any class of land, air, or vessel carrier 
for which the Secretary concludes the requirements of this 
subparagraph are not necessary.

           *       *       *       *       *       *       *

  (d) Regulations.--
          (1) In general.--The Secretary shall by regulation--
                  (A) specify the form for, and the information 
                and data that must be contained in, the 
                manifest required by subsection (a) or 
                subsection (b)(2);

           *       *       *       *       *       *       *

                  (C) prescribe the manner of production for, 
                and the delivery or electronic transmittal of 
                the manifest required by subsection (a) or 
                subsection (b)(2); and

           *       *       *       *       *       *       *


SEC. 432. PASSENGER AND CREW MANIFEST INFORMATION REQUIRED FOR LAND, 
                    AIR, OR VESSEL CARRIERS.

  (a) In General.--For every person arriving or departing on a 
land, air, or vessel carrier required to make entry or obtain 
clearance under the customs laws of the United States, the 
pilot, the master, operator, or owner of such carrier (or the 
authorized agent of such operator or owner) shall provide by 
electronic transmission manifest information described in 
subsection (b) in advance of such entry or clearance in such 
manner, time, and form as prescribed under regulations by the 
Secretary.
  (b) Information Described.--The information described in this 
subsection shall include for each person described in 
subsection (a), the person's--
          (1) full name;
          (2) date of birth and citizenship;
          (3) gender;
          (4) passport number and country of issuance;
          (5) United States visa number or resident alien card 
        number, as applicable;
          (6) passenger name record; and
          (7) such additional information that the Secretary, 
        by regulation, determines is reasonably necessary to 
        ensure aviation and maritime safety pursuant to the 
        laws enforced or administered by the Customs Service.

           *       *       *       *       *       *       *


SEC. 509. EXAMINATION OF BOOKS AND WITNESSES.

  (a) * * *
  (b) Regulatory Audit Procedures.--
          (1) * * *

           *       *       *       *       *       *       *

          (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. 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 (21 U.S.C. 953; relating 
                to exportation of controlled substances).
                  (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.--(1) Mail 
sealed against inspection under the postal laws and regulations 
of the United States may be searched by a Customs officer, 
subject to paragraph (2), upon 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) No person acting under 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, Federal Rules of Criminal Procedure; or
          (B) the sender or addressee has given written 
        authorization for such reading.

           *       *       *       *       *       *       *

                              ----------                              


                  SECTION 141 OF THE TRADE ACT OF 1974

SEC. 141. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE.

  (a) * * *

           *       *       *       *       *       *       *

  (g)(1)(A) There are authorized to be appropriated to the 
Office for the purposes of carrying out its functions [not to 
exceed] the following:
          [(i) $23,250,000 for fiscal year 1991.
          [(ii) $21,077,000 for fiscal year 1992.]
          (i) $30,000,000 for fiscal year 2002.
          (ii) $31,000,000 for fiscal year 2003.
  (B) Of the amounts authorized to be appropriated under 
subparagraph (A) for any fiscal year--
          (i) not to exceed $98,000 may be used for 
        entertainment and representation expenses of the 
        Office; and
          [(ii) not to exceed $2,050,000 may be used to pay the 
        United States share of the expenses of binational 
        panels and extraordinary challenge committees convened 
        pursuant to chapter 19 of the United States-Canada 
        Free-Trade Agreement; and]
          [(iii)] (ii) not to exceed $1,000,000 shall remain 
        available until expended.

           *       *       *       *       *       *       *

  (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.
                              ----------                              


HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES

           *       *       *       *       *       *       *


CHAPTER 98--SPECIAL CLASSIFICATION PROVISIONS

           *       *       *       *       *       *       *


     Subchapter IV--Personal Exemptions Extended to Residents and 
Nonresidents

           *       *       *       *       *       *       *


----------------------------------------------------------------------------------------------------------------
                                                                      Rates of Duty
                                        ------------------------------------------------------------------------
     Heading/       Article Description                  1
    Subheading                          ----------------------------------         2
                                            General          Special
----------------------------------------------------------------------------------------------------------------
9804.00.65         Articles,               ...........  Free.............  Free............
                    accompanying a
                    person, not over
                    [$400] $800 in
                    aggregate fair
                    retail value in the
                    country of
                    acquisition,
                    including (but only
                    in the case of an
                    individual who has
                    attained the age of
                    21) not more than 1
                    liter of alcoholic
                    beverages and
                    including not more
                    than 200 cigarettes
                    and 100 cigars.....
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


                         VII. DISSENTING VIEWS

    We reluctantly express our opposition to H.R. 3129.
    In the aftermath of September 11th, we had hoped that 
Democrats and Republicans could work together to produce a 
Customs authorization bill that provides Customs with the tools 
necessary to protect our borders, and that shows support for 
the men and women performing that function. Regrettably, 
Republicans on the Committee did not share this view. With 
respect to providing Customs with the appropriate tools, this 
bill is based on the Customs' budget request and House 
Appropriations bill, both of which pre-date September 11th. 
Moreover, the Majority includes in this bill the same 
authorization priorities included in the bill they drafted 
three years ago. Authorizations for equipment were not updated 
to reflect needs that have clearly presented themselves in 
recent weeks. In fact, rather than bolstering Customs' efforts 
to combat terrorism, one element of the bill will undermine it 
by penalizing one-third of the Customs inspector workforce.
    Section 123 of this bill amends existing law governing the 
payment of night shift differential pay for Customs inspectors. 
According to Customs officials' testimony before the Committee, 
over 2,000 hardworking men and women will lose money under the 
Majority's proposal. The Majority does not offer any legitimate 
justification for making the proposed changes. They do not 
contend that Customs inspectors are overpaid. They do not 
contend that there is abuse in the existing system. The 
Majority, in fact, offers no explanation for the change other 
than they disagree with what hours qualify for premium pay. In 
a vacuum, that rationale might be sufficient. But in the real 
world, where a change such as the one the Majority is proposing 
will result in real people losing real money, that rationale is 
insufficient, particularly when the people affected are the 
very ones that serve as our front line of defense against 
terrorism.
    The existing provision governing night shift differential 
pay takes a balanced approach toward compensating Customs 
officers for working odd hour shifts. The current law governing 
night shift differential pay was passed by Congress in 1993, as 
part of a comprehensive package of Customs compensation 
reforms, the Customs Officers' Pay Reform Amendments 
(``COPRA''), (P.L. 103-66, 107 Stat. 670). The purpose of the 
reforms was to rationalize the method of paying Customs 
officers for overtime, while also ensuring that Customs 
officers received pay commensurate with the important work they 
perform. To achieve this balance, Congress, on a bipartisan 
basis, altered Customs officers' entire compensation structure, 
including the amendment to the hours eligible for and the wage 
rate applied to night shift differential pay. By considering 
and amending compensation on an aggregate basis, Congress 
ensured that the correction of certain payment abuses did not 
result in Customs officers receiving an unwarranted cut in pay.
    On night shift differential pay, the 1993 reforms provided 
that
          --if a majority of hours worked by a Customs officer 
        in a shift fell between 3 p.m. and midnight, all hours 
        in the shift were paid at the hourly rate + 15%;
          --if a majority of hours worked by a Customs officer 
        in a shift fell between 11 p.m. and 8 a.m., all hours 
        in the shift were paid at the hourly rate + 20%;
          --however, if a majority of the hours worked by a 
        Customs officer in a shift did not fall within the 3 
        p.m. to 8 a.m. period, the employee was paid at the 
        hourly rate only.
    The purpose of this premium is to compensate Customs 
officers for working shifts that begin or end outside a normal 
work day (i.e., 3 p.m. to 11 p.m., midnight to 8 a.m.). As 
stated in the 1993 Committee report, the Committee found that 
these odd hour shifts, which were assigned by management (and 
not the employee), had ``an adverse impact on the quality of 
life of Customs officials who are required to work regularly 
scheduled shifts at night or on Sundays and holidays.'' H. Rep. 
No. 103-11, at 573, 574 (May 25, 1993). Recognizing this 
problem, the Committee amended the hours eligible for and the 
wage rate applied to the night shift differential specifically 
to provide for ``shift differential compensation at levels 
substantially greater than applied generally to other Federal 
employees for such regularly scheduled work.'' H. Rep. No. 103-
11, at 573, 574 (May 25, 1993).
    Section 123 of the bill alters the balanced approach 
crafted in 1993 in two ways. First, the provision restricts the 
hours that qualify for the night shift differential to hours 
between 5 p.m. and 6 a.m. Second, the provision compensates 
Customs officers at the differential rate only for those hours 
that occur between 5 p.m. and 6 a.m. (with two limited 
exceptions), and not the entire shift. These changes will mean 
that a Grade 9 Customs officer who works a shift starting at 3 
a.m. and ending at 11 a.m. will receive the shift differential 
for only 3 hours of that shift, resulting in a loss to that 
Customs officer of $75 per week.
    The shifts most adversely affected under the Majority's 
proposal include four heavily worked shifts at major airports. 
At New York's JFK airport, for example, there are 200 
inspectors who work the 1 p.m.-9 p.m. shift. Sixty-six of those 
inspectors are grade 9 (earning a base pay of $37,000-$49,000), 
and would lose $2,220 per year under the Majority's proposal.
    To offset some of the loss in pay likely to occur, section 
121 of the bill adjusts the overtime cap that, under current 
law, restricts the amount of overtime pay a Customs officer may 
earn in one year. In effect, this adjustment would allow 
Customs officers to work more overtime to compensate for lost 
wages, or put another way, Customs officers will have to work 
more to get the same pay. Such a result is unfair. It is not 
even clear that it will be possible for the officers whose pay 
is reduced to work the additional hours to make up for the loss 
in pay. Moreover, only a small percentage of officers currently 
reach the overtime cap, and therefore would even benefit from 
the new provision.
    We are not opposed to considering amendments to Customs 
officers pay, if a credible study evaluates and recommends that 
legislative changes be made. We have indicated that we would 
support a study, as the Majority has decided to do on two other 
Customs employee issues. However, we are opposed to cutting 
someone's wages because a few Members of this Committeeare 
fixated on nomenclature (``night pay'') rather than the practical 
realities of the total Customs pay package. The men and women of the 
U.S. Customs Service perform vital functions with respect to both law 
enforcement--serving as a primary defense against terrorism--and 
preserving the integrity of U.S. trade with foreign nations. Their 
current compensation structure was designed to take account of the 
unusual stresses of their job--both the on-the-job safety risks and the 
irregular hours. Those aspects of a Customs officer's job have only 
become more acute since September 11. Now is not the time to 
unilaterally cut these officers' pay, which is precisely what the 
Customs Service stated that H.R. 3129 will do to one third of these 
inspectors.
    In addition, we have serious concerns about two other 
provisions in the bill. Section 141 would provide any officer 
conducting a personal search at a border immunity from civil 
damages if the officer performed the search in ``good faith.'' 
Section 144 would allow the U.S. Customs Service to open 
outbound international mail without a warrant.

                            Personal Search

    Section 141 is characterized as a ``procedural'' device to 
allow civil cases against individual customs agents to be 
dismissed in the early stages of litigation concerning their 
official duties. However, a plain reading of Section 141 
evidences an intent to carve out a broader standard of immunity 
than that existing under current law. The existing doctrine of 
qualified immunity shields public officials performing 
discretionary functions from civil damages if their conduct 
does not violate clearly established statutory or 
constitutional rights of which a reasonable person should have 
known. The Supreme Court has repeatedly held that the objective 
reasonableness of an officer's behavior, not a subjective 
``good faith'' standard, is the proper test for liability. This 
provision could weaken protections against racial profiling and 
other illegal and unconstitutional searches by the Customs 
Service. Despite the Administration's stated intent, section 
141 appears to be a substantive, and not a procedural change.
    Civil lawsuits against government officials and agencies 
are an important deterrent to racial profiling and 
unconstitutional and unlawful searches. Without the possibility 
of a lawsuit, individuals who have been treated in an 
unconstitutional manner by a government agency would have no 
redress, and the government agents would have less incentive to 
comply with the Constitution. Providing Customs officers with 
expanded immunity is not likely to have any impact on 
decreasing terrorism, but it will increase the likelihood that 
innocent passengers will have their constitutional rights 
violated.

                             Outbound Mail

    Under current law, the Customs Service is empowered to 
search, without a warrant, inbound mail handled by the United 
States Postal Service and packages and letters handled by 
private carriers such as Federal Express and the United Parcel 
Service. This ``border exception'' to the Fourth Amendment 
derives from the traditional authority of the sovereign to 
protect its borders against inbound contraband and to collect 
duties on inbound freight.
    Section 144 would allow Customs officials to open 
``sealed'' mail with ``reasonable cause,'' a lower standard 
than probable cause, and would eliminate the need for judicial 
review. Moreover, section 144 would allow Customs officials to 
open ``unsealed'' mail, and any mail bearing a Customs 
declaration for no cause whatsoever. People in the United 
States have an expectation of privacy in the mail they send to 
friends, family, or business associates abroad. The Customs 
Service's interest in confiscating illegal weapons' shipments, 
drugs or other contraband is adequately protected by its 
ability to secure a search warrant when it has probable cause. 
Short of an emergency, postal officials can always hold a 
package while they wait for a court to issue a warrant.
    We are not opposed per se to the policy underlying these 
amendments. For example, on the good faith immunity provision 
we did seek language prior to the mark-up that might clarify 
what was meant by ``good faith.'' The change we sought would 
have made the provision procedural, rather than substantive. 
Our suggestion was not incorporated into the bill, however. We 
hope that the courts will incorporate the definition of ``good 
faith'' included in the Committee report, as the Administration 
has assured the Committee. Notwithstanding, we remain 
concerned, and absent clarification and more information as to 
why these provisions are necessary, we believe the current 
language is unnecessary and potentially damaging to 
constitutional rights.

                                   Charles B. Rangel.
                                   Xavier Becerra.
                                   Jerry Kleczka.
                                   Pete Stark.
                                   Lloyd Doggett.
                                   Richard E. Neal.
                                   Sander Levin.
                                   Jim McDermott.
                                   Robert T. Matsui.
                                   William J. Coyne.
                                   John Lewis.
                                   Earl Pomeroy.

                                
