[House Report 118-890]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-890
======================================================================
GENERALIZED SYSTEM OF PREFERENCES REFORM ACT
_______
December 17, 2024.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Smith of Missouri, from the Committee on Ways and Means, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 7986]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 7986) to modify and reauthorize the Generalized
System of Preferences, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND........................................... 8
A. Purpose and Summary................................. 8
B. Background and Need for Legislation................. 10
C. Legislative History................................. 10
Background......................................... 10
Committee Hearings................................. 10
Committee Action................................... 10
D. Designated Hearing.................................. 10
II. EXPLANATION OF THE BILL......................................... 10
A. Reasons for Change.................................. 10
B. Explanation of Provisions........................... 11
C. Effective Date...................................... 12
III. VOTES OF THE COMMITTEE.......................................... 12
IV. BUDGET EFFECTS OF THE BILL...................................... 15
A. Committee Estimate of Budgetary Effects............. 15
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 15
C. Cost Estimated Prepared by the Congressional Budget
Office............................................. 15
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE...... 21
A. Committee Oversight Findings and Recommendations.... 21
B. Statement of General Performance Goals and
Objectives......................................... 21
C. Information Relating to Unfunded Mandates........... 21
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 21
E. Duplication of Federal Programs..................... 22
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED........... 22
VII. DISSENTING VIEWS................................................ 54
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 ``Generalized System of Preferences
Reform Act''.
SEC. 2. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.
(a) In General.--Section 505 of the Trade Act of 1974 (19 U.S.C.
2465) is amended by striking ``December 31, 2020'' and inserting
``December 31, 2030''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to articles entered on or after the 30th day after the
date of the enactment of this Act.
(2) Retroactive application for certain liquidations and
reliquidations.--
(A) In general.--Notwithstanding section 514 of the
Tariff Act of 1930 (19 U.S.C. 1514) or any other
provision of law and subject to subparagraph (B), any
entry of a covered article to which duty-free treatment
or other preferential treatment under title V of the
Trade Act of 1974 (19 U.S.C. 2461 et seq.) would have
applied if the entry had been made on December 31,
2020, that was made--
(i) after December 31, 2020, and
(ii) before the effective date specified in
paragraph (1),
shall be liquidated or reliquidated as though such
entry occurred on the effective date specified in
paragraph (1).
(B) Requests.--A liquidation or reliquidation may be
made under subparagraph (A) with respect to an entry
only if a request therefor is filed with U.S. Customs
and Border Protection not later than 180 days after the
date of the enactment of this Act that contains
sufficient information to enable U.S. Customs and
Border Protection--
(i) to locate the entry; or
(ii) to reconstruct the entry if it cannot be
located.
(C) Payment of amounts owed.--Any amounts owed by the
United States pursuant to the liquidation or
reliquidation of an entry of a covered article under
subparagraph (A) shall be paid, without interest of any
kind, not later than 90 days after the date of the
liquidation or reliquidation (as the case may be).
(3) Definitions.--In this subsection:
(A) Covered article.--The term ``covered article''
means an article from a country that is a beneficiary
developing country under title V of the Trade Act of
1974 (19 U.S.C. 2461 et seq.) as of the effective date
specified in paragraph (1).
(B) Enter; entry.--The terms ``enter'' and ``entry''
include a withdrawal from warehouse for consumption.
SEC. 3. MODIFICATIONS TO DESIGNATIONS OF BENEFICIARY COUNTRIES.
(a) Modifications to Designation Eligibility.--Section 502 of the
Trade Act of 1974 (19 U.S.C. 2462) is amended as follows:
(1) In subsection (b)(1), by adding at the end the following
new subparagraph:
``(J) China.''.
(2) In subsection (b)(2)--
(A) by inserting after subparagraph (H) the
following:
``(I) Such country has failed, in a manner affecting
trade or investment--
``(i) to effectively enforce its
environmental laws or regulations through a
sustained or recurring course of action or
inaction; or
``(ii) to adopt and maintain measures
implementing its obligations under common
multilateral environmental agreements.
``(J) Such country engages in gross violations of
internationally recognized human rights in that country
(including any designated zone in that country).''; and
(B) in the text following subparagraph (J) (as
inserted by subparagraph (A)), by striking ``and (H)
(to the extent described in section 507(6)(D))'' and
inserting ``(H) (to the extent described in section
507(6)(D)), (I), and (J)''.
(3) In subsection (c)--
(A) in paragraph (6)(B), by striking ``; and'' and
inserting a semicolon;
(B) in paragraph (7)--
(i) by striking ``whether'' and all that
follows through ``afford'' and inserting ``the
extent to which such country is affording'';
and
(ii) by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(8) the extent to which such country allows, after the date
of the enactment of this paragraph, construction of military
bases by a covered nation (as such term is defined in section
4872 of title 10, United States Code);
``(9) the extent to which such country--
``(A) provides open and equitable market access for
United States agriculture, including through the
adoption of science-based standards;
``(B) refrains from imposing unjustified trade
restrictions that affect new agricultural technologies,
including biotechnology;
``(C) refrains from providing domestic agricultural
subsidies that decrease market opportunities for United
States exports; and
``(D) refrains from imposing prohibitions on the
generic use of common food and beverage terms;
``(10) the extent to which such country is deepening its
economic, diplomatic, and military relations with covered
nations (as such term is defined in section 4872 of title 10,
United States Code);
``(11) the extent to which such country has established, or
is making continual progress toward establishing--
``(A) the rule of law, political pluralism, and the
right to due process, a fair trial, and equal
protection under the law;
``(B) economic policies to reduce poverty, increase
the availability of health care and educational
opportunities, expand physical infrastructure, promote
the development of private enterprise, and encourage
the formation of capital markets through micro-credit
or other programs; and
``(C) a system to combat corruption and bribery, such
as signing and implementing the Convention on Combating
Bribery of Foreign Public Officials in International
Business Transactions, done at Paris December 17, 1997,
and entered into force February 15, 1999 (TIAS 99-215);
``(12) the extent to which such country provides equitable
and non-discriminatory tax treatment for United States
entities;
``(13) the extent to which such country is effectively
enforcing its environmental laws and regulations and adopting
and maintaining measures implementing its obligations under
common multilateral environmental agreements;
``(14) the extent to which such country is achieving the
goals described in section 3(b) of the Women's Entrepreneurship
and Economic Empowerment Act of 2018 (22 U.S.C. 2151-2(b));
``(15) whether such country engages in activities that
undermine United States national security or foreign policy
interests; and
``(16) the extent to which such country--
``(A) has imposed unreasonable digital trade
barriers, such as unnecessary or discriminatory data
localization or data transfer restrictions,
discriminatory treatment of digital products, or forced
disclosure of proprietary source code; and
``(B) has taken steps in the digital environment to
support consumer protections, the privacy of personal
information, and open digital ecosystems.''.
(b) Conforming Amendments.--Section 507 of the Trade Act of 1974 (19
U.S.C. 2467) is amended--
(1) in paragraph (4)--
(A) in subparagraph (D), by striking ``; and'' and
inserting a semicolon;
(B) in subparagraph (E), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(F) the elimination of all forms of discrimination
with respect to occupation and employment.''; and
(2) by adding at the end the following:
``(7) Common multilateral environmental agreement.--
``(A) In general.--The term `common multilateral
environmental agreement', for purposes of determining
the eligibility of a country for designation as a
beneficiary developing country under this title, means
any agreement specified in subparagraph (B) to which
both the United States and that country are full
parties, including any current or future mutually
agreed upon protocols, amendments, annexes, or
adjustments to such an agreement.
``(B) Agreements specified.--The agreements specified
in this subparagraph are the following:
``(i) The Convention on International Trade
in Endangered Species of Wild Fauna and Flora,
done at Washington March 3, 1973 (27 UST 1087;
TIAS 8249).
``(ii) The Montreal Protocol on Substances
that Deplete the Ozone Layer, done at Montreal
September 16, 1987.
``(iii) The Protocol of 1978 Relating to the
International Convention for the Prevention of
Pollution from Ships, 1973, done at London
February 17, 1978.
``(iv) The Convention on Wetlands of
International Importance, Especially as
Waterfowl Habitat, done at Ramsar February 2,
1971 (TIAS 11084).
``(v) The Convention on the Conservation of
Antarctic Marine Living Resources, done at
Canberra May 20, 1980 (33 UST 3476).
``(vi) The International Convention for the
Regulation of Whaling, done at Washington
December 2, 1946 (62 Stat. 1716).
``(vii) The Convention for the Establishment
of an Inter-American Tropical Tuna Commission,
done at Washington May 31, 1949 (1 UST 230).''.
SEC. 4. MODIFICATION OF PROVISIONS RELATING TO WITHDRAWAL, SUSPENSION,
OR LIMITATION OF COUNTRY DESIGNATION.
Section 502(d)(1) of the Trade Act of 1974 (19 U.S.C. (2462(d)(1)) is
amended--
(1) by striking ``the President shall consider the factors''
and inserting ``the President--
``(A) shall consider--
``(i) the factors'';
(2) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following:
``(ii) the likely impacts of any such action
on working toward, or continuing to meet, the
criteria and factors described in subsections
(b) and (c) of this section; and
``(iii) the likely impacts of any such action
on workers and populations in the country that
such criteria and factors are intended to help;
``(B) take all available steps to facilitate
continued duty-free treatment under this title for
products with respect to which the imposition of duties
is likely--
``(i) to have an adverse effect on meeting
the criteria and factors described in
subsections (b) and (c) of this section; or
``(ii) result in severe economic harm to the
populations that such criteria and factors are
intended to help; and''.
SEC. 5. PROCEDURAL ENFORCEMENT REFORMS.
Section 502 of the Trade Act of 1974 (19 U.S.C. 2462), as amended by
sections 3 and 4, is further amended as follows:
(1) In subsection (d)(1), by adding at the end the following:
``(C) hold a public hearing or provide for a period
of not less than 30 days for submission of comments by
the public.''.
(2) In subsection (f)(2)--
(A) in the paragraph heading, by inserting ``or
suspension'' after ``termination''.;
(B) by inserting ``or suspend'' after ``terminate''
each place it appears; and
(C) by inserting ``or suspension'' after
``termination''.
(3) By adding at the end the following:
``(g) Publication of Determinations Relating to Petitions for
Review.--The United States Trade Representative shall publish in the
Federal Register a notice of, and the rationale for, any determination
of the Trade Representative with respect to a petition for review of
the eligibility of a country for designation as a beneficiary
developing country, including a determination--
``(1) to accept or deny such a petition;
``(2) to continue to review the eligibility of the country;
or
``(3) to withdraw, suspend, or limit the application of duty-
free treatment under this title with respect to the country.''.
SEC. 6. ASSESSMENT AND REPORT ON COMPLIANCE WITH ELIGIBILITY
REQUIREMENTS.
Section 502 of the Trade Act of 1974, as amended by sections 3
through 5, is further amended by adding at the end the following:
``(h) Assessment and Report on Compliance With Eligibility
Requirements.--
``(1) In general.--The President shall--
``(A) on an annual basis--
``(i) conduct assessments of the compliance
of an appropriate number of countries
designated as beneficiary developing countries
for purposes of this title in meeting or
continuing to meet the eligibility requirements
under this title; and
``(ii) make determinations with respect to
whether to initiate full reviews of the
practices of those countries to assess the
continued eligibility of those countries for
designation as beneficiary developing countries
under this title; and
``(B) submit to Congress a report consisting of the
results of such assessments and determinations.
``(2) Frequency.--The President shall conduct an assessment
described in clause (i) of paragraph (1)(A) and make a
determination described in clause (ii) of that paragraph with
respect to each country designated as a beneficiary developing
country for purposes of this title not less frequently than
once every 3 years.''.
SEC. 7. MODIFICATIONS TO RULES OF ORIGIN.
(a) In General.--Section 503(a)(2) of the Trade Act of 1974 (19
U.S.C. 2463(a)(2)) is amended--
(1) in subparagraph (A), in the matter following clause
(ii)(II), by striking ``35 percent'' and inserting ``the
percentage described in subparagraph (B)'';
(2) by redesignating subparagraph (B) as subparagraph (C);
(3) by inserting after subparagraph (A) the following:
``(B) Percentage described.--The percentage described
in this subparagraph is--
``(i) in the case of articles entered before
January 1, 2027, 35 percent;
``(ii) in the case of articles entered on or
after January 1, 2027, and before January 1,
2029, 40 percent;
``(iii) in the case of articles entered on or
after January 1, 2029, and before January 1,
2031, 45 percent; and
``(iv) in the case of articles entered on or
after January 1, 2031, 50 percent.''; and
(4) by adding at the end the following:
``(D) Pass-through and cost or value of materials
produced in the customs territory of the united
states.--
``(i) In general.--The duty-free treatment
provided under this title shall apply to any
article that meets the requirements of this
paragraph.
``(ii) Exception with respect to materials
produced in the customs territory of the united
states.--To the extent that the cost or value
of materials produced in the customs territory
of the United States is included with respect
to an article, an amount not to exceed 15
percent of the appraised value of the article
at the time it is entered that is attributed to
such United States cost or value may be applied
toward determining the applicable percentage
described in subparagraph (B).
``(iii) No pass-through to other programs.--
Notwithstanding clause (i), duty-free treatment
under any other program providing such
treatment for an article, conditional on the
eligibility of an article to be treated as
originating for purposes of this paragraph, may
only be extended to an article that is
otherwise eligible for duty-free treatment
under this title in a calendar year--
``(I) if the article would remain
eligible for such treatment even if
subparagraph (A) were applied by
substituting `35 percent' for `the
percentage described in subparagraph
(B)' with respect to that calendar
year; and
``(II) if no amount attributable to
United States cost or value, as
authorized by clause (ii) of this
subparagraph, would be required to be
applied in order to achieve such
eligibility.''.
(b) Report.--
(1) In general.--Not later than January 1, 2026, the United
States Trade Representative shall submit to Congress a report
on the impact of the Generalized System of Preferences rule of
origin requirements under section 503(a)(2)(A)(ii)(I) of the
Trade Act of 1974 (19 U.S.C. 2463(a)(2)(A)(ii)(I)) in fostering
regional economic integration through program cumulation among
regional associations.
(2) Matters to be included.--The report required under this
subsection shall include recommendations regarding--
(A) new regional associations eligible for treatment
as one country under the provisions of section 507(2)
of the Trade Act of 1974 (19 U.S.C. 2467(2)); and
(B) updates to the rule of origin methodology under
section 503 of such Act that would better maximize
content from beneficiary developing countries and the
United States.
SEC. 8. MODIFICATIONS TO COMPETITIVE NEED LIMITATION.
(a) In General.--Section 503 of the Trade Act of 1974 (19 U.S.C.
2463) is amended--
(1) in subsection (c)(2)--
(A) in subparagraph (A)(ii)--
(i) in subclause (I), by striking ``for 1996,
$75,000,000'' and inserting ``for calendar year
2023, $500,000,000''; and
(ii) in subclause (II), by striking
``$5,000,000'' and inserting ``2.5 percent of
such applicable amount'';
(B) in subparagraph (C), by striking ``may, subject''
and inserting ``should, subject''; and
(C) in subparagraph (F)(ii)--
(i) in subclause (I), by striking ``for
calendar year 1996, $13,000,000'' and inserting
``for calendar year 2023, $50,000,000''; and
(ii) in subclause (II), by striking
``$500,000'' and inserting ``2.5 percent of
such applicable amount'';
(2) in subsection (d)(4)(B), by adding at the end the
following:
``(iii) Clause (ii)(II) shall not apply with respect
to any article if a like or directly competitive
article was not produced in the United States in any of
the preceding 3 calendar years.''.
(b) Applicability.--
(1) In general.--The amendments made by subsection (a) shall
take effect on the date of the enactment of this Act.
(2) Restoration of duty-free treatment.--
(A) List required.--Not later than 120 days after the
date of the enactment of this Act, the President
shall--
(i) list each article with respect to which
duty-free treatment was eliminated (as of the
date of the enactment of this Act) pursuant to
subsection (c) of section 503 of the Trade Act
of 1974 that is eligible for such treatment
pursuant to such section 503 as amended by
subsection (a) of this section; and
(ii) determine, with respect to each such
article, whether the article is a potentially
sensitive product that warrants review pursuant
to subsection (c)(1) of such section 503 for
the continued withholding of duty-free
treatment.
(B) Prompt restoration.--Except for articles for
which the President makes an affirmative determination
pursuant to subparagraph (A)(ii), the President shall
restore duty-free treatment to each article included in
the list described in subparagraph (A)(i) on such 120th
day after date of enactment.
(3) Expedited review of certain articles for exclusion from
duty-free treatment.--The President shall review, pursuant to
section 503(c)(1) of the Trade Act of 1974 (19 U.S.C.
2463(c)(1)), whether duty-free treatment should continue to be
withheld from each article for which the President makes an
affirmative determination pursuant to paragraph (2)(A)(ii). Not
later than 1 year after the date of the enactment of this Act,
the President shall restore duty-free treatment to each article
for which such review determines that such treatment should not
be withheld.
(4) Reports.--Not later than 1 year after the date of the
enactment of this Act, the President shall submit to the
Committee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate a report containing--
(A) the results of the reviews conducted pursuant to
paragraph (3); and
(B) justifications for the reasons for which duty-
free treatment was withheld or restored with respect to
articles described in such paragraph.
SEC. 9. EXPEDITED PRODUCT COVERAGE PETITION PROCESS.
(a) In General.--Not later than 90 days after the date of the
enactment of this Act, the United States International Trade Commission
shall publish in the Federal Register and on a publicly available
internet website of the Commission a notice requesting interested
parties to submit to the Commission, during the 60-day period beginning
on the date of such publication, a petition--
(1) to add one or more headings or subheadings of the
Harmonized Tariff Schedule of the United States to, or remove
one or more such headings or subheadings from, the list of
articles that may not be designated as an eligible article for
duty-free treatment pursuant to section 503(b) of the Trade Act
of 1974 (19 U.S.C. 2463(b)); or
(2) to provide duty-free treatment to one or more headings or
subheadings of the Harmonized Tariff Schedule under the
Generalized System of Preferences that are--
(A) not restricted under such section 503(b) from
designation as an eligible article; and
(B) not otherwise designated an eligible article by
the President pursuant to section 501 or section 503(a)
of such Act (19 U.S.C. 2461; 2463(a)).
(b) Contents of Petition.--A petition submitted pursuant to
subsection (a) shall be eligible for consideration under the process
provided by this section only if such petition includes--
(1) the name and address of the petitioner;
(2) the 8-digit subheading level or levels under the
Harmonized Tariff Schedule with respect to which the petition
is submitted; and
(3) for a petition submitted pursuant to subsection (a), a
certification that the petitioner is an interested party and a
brief description of the manner and extent to which the
petitioner is a likely beneficiary with respect to the addition
or removal of the heading or subheading level concerned.
(c) Publication of Petitions.--As soon as practicable after the 60-
day period described in subsection (a), and not later than 30 days
after the end of such period, the Commission shall publish on a
publicly available internet website of the Commission the contents of
each petition received.
(d) Opportunity for Public Comment.--During the 45-day period
beginning on the date of the publication of petitions pursuant to
subsection (c), the Commission shall publish in the Federal Register
and on a publicly available internet website of the Commission a notice
requesting members of the public to submit comments to the Commission
with respect to the changes sought by the petitions.
(e) Report.--Not later than 1 year after the date of the enactment of
this Act, the Commission shall submit to the appropriate congressional
committees a report on each eligible petition submitted pursuant to the
process provided by this section that includes, with respect to the
article or articles concerned in each such petition--
(1) data from the 5 most recent calendar years for which
complete information is available on--
(A) sources of imports;
(B) values of imports;
(C) market share of imports (to the extent
practical); and
(D) domestic production (to the extent practical);
(2) any information on whether the product is used as an
input in United States manufacturing; and
(3) a summary of information provided in the form of comments
rebutting or objecting to the petition.
(f) Authorities.--
(1) Procedures.--The Commission shall prescribe and publish
in the Federal Register and on a publicly available internet
website of the Commission all procedures to be complied with by
members of the public submitting petitions.
(2) Judicial review precluded.--The exercise of functions
under this section shall not be subject to judicial review.
(g) Interested Party Defined.--In this section, the term ``interested
party'' has the definition given such term in section 771 of the Tariff
Act of 1930 (19 U.S.C. 1677), except that an interested party under
this section may not include--
(1) any person described in paragraph (9)(A) of such section,
other than a person that is an importer or a business
association of importers; or
(2) any person described in paragraph (9)(B) or (9)(G) of
such section.
SEC. 10. EXTENSION OF CUSTOMS USER FEES.
(a) In General.--Section 13031(j)(3) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended--
(1) in subparagraph (A), by striking ``September 30, 2031''
and inserting ``September 30, 2033''; and
(2) in subparagraph (B)(i), by striking ``September 30,
2031'' and inserting ``September 30, 2033''.
(b) Rate for Merchandise Processing Fees.--Section 503 of the United
States-Korea Free Trade Agreement Implementation Act (Public Law 112-
41; 19 U.S.C. 3805 note) is amended by striking ``September 30, 2031''
and inserting ``September 30, 2033''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
H.R. 7986, the Generalized System of Preferences Reform
Act, as ordered reported by the Committee on Ways and Means on
April 17, 2024, would extend the Generalized System of
Preferences (GSP) through December 31, 2030, and provide
retroactive benefits from December 31, 2020, for products that
would be eligible as of the effective date. The program expired
on December 31, 2020. The legislation reforms the GSP program
as outlined below.
ELIGIBILITY CRITERIA
H.R. 7986 contains several provisions amending the GSP
country eligibility criteria. The legislation modifies the list
of countries ineligible for designation to include the People's
Republic of China (PRC). While China has never benefited from
the GSP program, its inclusion in the list of ineligible
countries reflects the view that the PRC should not be
considered a developing country. Additionally, the legislation
modifies the factors affecting country designation in the GSP
program by adding multiple new eligibility criteria. The
Committee encourages the Office of the United States Trade
Representative (USTR) to aggressively enforce these new
criteria.
The legislation includes a new agriculture-specific market
access criterion that would seek to ensure beneficiary
countries provide open and equitable access for United States
agriculture, including by adopting science-based standards.
This criterion would also seek to prevent countries from
imposing new restrictions on agricultural biotechnology,
providing domestic support for agricultural producers that
decreases U.S. export opportunities, and imposing prohibitions
on the generic use of common food and beverage terms, focusing
on dairy and meat products.
H.R. 7986 also includes new eligibility criteria that seek
to ensure fair digital and tax treatment of U.S. companies and
workers. This is especially important as many countries
continue to pursue tax and digital policies that discriminate
against U.S. companies and harm innovation. Examples include
discriminatory digital services taxes that predominantly target
U.S. companies, unjustified forced data localization measures,
and restrictions on cross-border data flows.
H.R. 7986 includes two new eligibility criteria related to
beneficiary developing countries deepening relations with
countries of concern of the United States. As of the date of
Committee action on H.R. 7986, this includes North Korea, the
PRC, the Russian Federation, and the Islamic Republic of Iran.
The first new eligibility criterion requires USTR to consider
whether a beneficiary developing country allows the
construction of a military base by a covered nation. The second
requires USTR to consider whether a beneficiary developing
country is deepening its economic, diplomatic, and military
relations with a covered nation. These new eligibility criteria
are intended to be forward-looking and apply after the
effective date.
Additionally, the legislation updates to the existing GSP
labor eligibility criterion and contains a new environment
eligibility criterion. The new environment criterion is
tailored to apply to measures affecting trade and investment.
This legislation would also add existing eligibility criteria
from the African Growth and Opportunity Act (AGOA) program
regarding human rights, good governance, anticorruption, and
U.S. national security and foreign policy interests to the GSP
program.
RULE OF ORIGIN (ROO)
In addition to modifications to the factors affecting
country designation, H.R. 7986 makes several changes to the
criteria affecting product eligibility. The legislation
gradually increases the GSP program ROO from 35 to 50 percent
while allowing up to 15 percent U.S. content to count as
qualifying. The AGOA program contains similar provisions.
Changes to the GSP ROO are intended only to impact imports into
the United States through the GSP program, not imports through
other preference programs such as AGOA. These changes are
designed to ensure both developing beneficiary counties and the
United States benefit from the program, not third countries.
COMPETITIVE NEEDS LIMITATION (CNL)
Sec. 8 updates GSP's CNLs provisions, increasing the dollar
threshold from $215 million to $500 million and indexing to it
to an inflation benchmark of 2.5 percent to improve the
program's usefulness to incentivize supply chain shifts out of
China. Additionally, the legislation updates the GSP ``not
produced in the United States'' exception so that products not
produced domestically are not subject to the 75 percent GSP CNL
waiver limitation.
ADMINISTRATIVE AND PROCEDURAL REFORMS
The legislation also includes procedural reforms to USTR's
administration of the GSP program. Sec. 4 requires the
President to consider the developmental goals of the GSP
program when making determinations regarding country
eligibility. Sec. 5 requires USTR to either conduct a public
hearing or provide a 30-day comment period before terminating
or suspending GSP eligibility. Neither of these reforms limit
the ability of USTR to remove countries not meeting GSP
eligibility criteria from the program. Sec. 6 codifies the
existing USTR triennial review process for GSP eligibility.
UNITED STATES INTERNATIONAL TRADE COMMISSION (USITC) ANALYSIS ON THE
GSP PRODUCT LIST
Sec. 9 requires the USITC to conduct an analysis of the
list of products eligible for the GSP program. This process is
designed to be as transparent as possible providing
stakeholders the opportunity to petition the USITC to analyze
particular products for potential addition or removal from GSP
eligibility and submit rebuttal comments. Under this process,
the USITC will produce a report to Congress that includes trade
data and analysis about the economic impact of adding or
removing products from GSP. This report will not require any
action by Congress, but it will provide relevant data and
analysis to both Congress and stakeholders.
B. Background and Need for Legislation
GSP is the largest and oldest U.S. trade preference
program. Title V of the Trade Act of 1974, as amended, grants
authority to the President to provide duty-free treatment on
imports of eligible articles from designated beneficiary
developing countries (BDCs), subject to certain conditions and
limitations.
GSP seeks to promote both the competitiveness of U.S.
companies and economic development throughout the world by
eliminating duties on a set list of products--not generally
produced in the U.S. in commercially meaningful quantities--
when imported from one of 119 designated beneficiary countries.
It also serves as an enforcement tool allowing USTR to suspend
some or all a beneficiary country's GSP benefits if it fails to
comply with the eligibility criteria Congress has enacted. The
program expired on December 31, 2020.
C. Legislative History
BACKGROUND
H.R. 7986 was introduced on April 15, 2024, and was
referred to the Committee on Ways and Means.
COMMITTEE HEARINGS
On September 20, 2023, the Committee held a hearing
entitled ``Reforming the Generalized System of Preferences to
Safeguard U.S. Supply Chains and Combat China.''
COMMITTEE ACTION
The Committee on Ways and Means marked up H.R. 7986, the
``Generalized System of Preferences Reform Act'' on April 17,
2024, and favorably reported the bill, as amended, to the House
of Representatives (with quorum being present).
D. Designated Hearing
Pursuant to clause 3(c)(6) of Rule XIII, the following
hearing was used to develop and consider H.R. 7986:
On September 20, 2023, the Committee held a hearing
entitled ``Reforming the Generalized System of
Preferences to Safeguard U.S. Supply Chains and Combat
China.''
II. EXPLANATION OF THE BILL
A. Reasons for Change
The GSP program expired on December 31, 2020. The program
has not been substantially reformed in over a decade and is
need of several updates. Reforms to eligibility criteria will
ensure that BDCs must met a high standard to participate in the
GSP program. Further, changes to the GSP ROO and CNL provisions
will ensure that the program can be an effective tool to
encourage development and shift supply chains out of
adversarial nations. This legislation also includes procedural
reforms to ensure USTR is effectively administering the
program.
B. Explanation of Provisions
Section 1. Short title
The short title of this Act is the ``Generalized System of
Preferences Reform Act.''
Section 2. Extension of Generalized System of Preferences
This section renews the Generalized System of Preferences
(GSP) until December 31, 2030. Additionally, this section
provides for retroactive duty relief for customs entries after
GSP expired on December 31, 2020.
Section 3. Modifications to designations of beneficiary countries
This section modifies the designation of beneficiary
countries by amending the list of countries eligible for
designation and the GSP program eligibility criteria. Section
3(1) adds China to the list of countries ineligible for
designation. Section 3(2) ensures countries that engage in
gross violations of human rights cannot receive GSP
preferences.
Section 3(3) updates the factors affecting GSP country
designation including by adding criteria related to
agricultural market access, United States foreign policy and
national security interests, good governance and anti-
corruption policies, and fair tax and digital treatment for
U.S. companies.
Section 4. Modification of provisions relating to withdrawal,
suspension, or limitation of country designation
This section modifies the GSP country review process to
ensure decisions regarding eligibility are made in accordance
with the development goals of the GSP program.
Section 5. Procedural enforcement reforms
This section contains procedurals reforms requiring USTR to
hold public hearings or solicit public comment related to GSP
country eligibility decisions. The section also requires USTR
to publish in the Federal Register rationale regarding
decisions related to petitions for country eligibility reviews.
Section 6. Assessment and report on compliance with eligibility
requirements
This section codifies the current USTR practice of
conducting a triennial eligibility review process for GSP
countries.
Section 7. Modifications to Rules of Origin
This section modifies the GSP ROO requirements, increasing
the ROO to 50 percent by January 1, 2031. The section also
allows U.S. inputs to count toward the GSP ROO requirement. The
modifications in this section only apply to imports of GSP
products, not other imports that may cross-reference the GSP
ROO.
Section 8. Modifications to Competitive Need Limitations
This section modifies the GSP CNL provisions by increasing
the dollar CNL threshold to $500 million and adjusting it to an
inflation benchmark of 2.5 percent. Additionally, this section
increases GSP's CNL de minimis waiver provision to $50 million
and adjusts it to an inflation benchmark of 2.5 percent. This
section also clarifies rules regarding GSP products that are
not made in the United States, allowing these products to
remain GSP eligible.
This section requires USTR to analyze products previously
removed from GSP due to CNLs to determine whether to reinstate
GSP eligibility.
Section 9. Expedited product coverage petition process
This section requires the USITC to solicit public comment
and conduct analysis regarding the list of products eligible
for duty-free access under the GSP program. This section does
not grant any new authority to make changes to products
eligible for duty-free treatment under GSP.
Section 10. Extension of customs user fees
This section amends the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) to extend the
application of certain customs user fees from September 30,
2031 to September 30, 2033.
C. Effective Date
Section 2 of the legislation applies to eligible imports 30
days after enactment. Other provisions are effective upon
enactment.
III. VOTES OF THE COMMITTEE
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R.7986, the ``Generalized System of
Preferences Reform Act'' on April 17, 2024.
The vote on Mr. Smith's (NE) motion to table Mr. Kildee's
appeal of the ruling of the chair was agreed to by a roll call
vote of 24 yeas to 17 nays (with a quorum being present). The
vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)................ X ......... ......... Mr. Neal........ ........ X .........
Mr. Buchanan.................. X ......... ......... Mr. Doggett..... ........ X .........
Mr. Smith (NE)................ X ......... ......... Mr. Thompson.... ........ X .........
Mr. Kelly..................... X ......... ......... Mr. Larson...... ........ X .........
Mr. Schweikert................ X ......... ......... Mr. Blumenauer.. ........ X .........
Mr. LaHood.................... X ......... ......... Mr. Pascrell.... ........ X .........
Dr. Wenstrup.................. X ......... ......... Mr. Davis....... ........ X .........
Mr. Arrington................. X ......... ......... Ms. Sanchez..... ........ X .........
Dr. Ferguson.................. ........ ......... ......... Ms. Sewell...... ........ X .........
Mr. Estes..................... X ......... ......... Ms. DelBene..... ........ X .........
Mr. Smucker................... X ......... ......... Ms. Chu......... ........ X .........
Mr. Hern...................... X ......... ......... Ms. Moore....... ........ X .........
Ms. Miller.................... X ......... ......... Mr. Kildee...... ........ X .........
Dr. Murphy.................... X ......... ......... Mr. Beyer....... ........ X .........
Mr. Kustoff................... X ......... ......... Mr. Evans....... ........ X .........
Mr. Fitzpatrick............... X ......... ......... Mr. Schneider... ........ ......... .........
Mr. Steube.................... X ......... ......... Mr. Panetta..... ........ X .........
Ms. Tenney.................... X ......... ......... Mr. Gomez....... ........ X .........
Mrs. Fischbach................ X ......... .........
Mr. Moore..................... X ......... .........
Mrs. Steel.................... X ......... .........
Ms. Van Duyne................. X ......... .........
Mr. Feenstra.................. X ......... .........
Ms. Malliotakis............... X ......... .........
Mr. Carey..................... X ......... .........
----------------------------------------------------------------------------------------------------------------
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 7986, the ``Generalized System
Preferences Reform Act,'' on April 17, 2024.
The vote on the amendment offered by Mr. Doggett to the
amendment in the nature of a substitute to H.R. 7986, which
would make changes to the environment eligibility criteria in
H.R. 7986 was not agreed to by a roll call vote of 17 yeas to
25 nays (with a quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)................ ........ X ......... Mr. Neal........ X ......... .........
Mr. Buchanan.................. ........ X ......... Mr. Doggett..... X ......... .........
Mr. Smith (NE)................ ........ X ......... Mr. Thompson.... X ......... .........
Mr. Kelly..................... ........ X ......... Mr. Larson...... X ......... .........
Mr. Schweikert................ ........ X ......... Mr. Blumenauer.. ........ ......... .........
Mr. LaHood.................... ........ X ......... Mr. Pascrell.... X ......... .........
Dr. Wenstrup.................. ........ X ......... Mr. Davis....... X ......... .........
Mr. Arrington................. ........ X ......... Ms. Sanchez..... X ......... .........
Dr. Ferguson.................. ........ X ......... Ms. Sewell...... X ......... .........
Mr. Estes..................... ........ X ......... Ms. DelBene..... X ......... .........
Mr. Smucker................... ........ X ......... Ms. Chu......... X ......... .........
Mr. Hern...................... ........ X ......... Ms. Moore....... X ......... .........
Ms. Miller.................... ........ X ......... Mr. Kildee...... X ......... .........
Dr. Murphy.................... ........ X ......... Mr. Beyer....... X ......... .........
Mr. Kustoff................... ........ X ......... Mr. Evans....... X ......... .........
Mr. Fitzpatrick............... ........ X ......... Mr. Schneider... X ......... .........
Mr. Steube.................... ........ X ......... Mr. Panetta..... X ......... .........
Ms. Tenney.................... ........ X ......... Mr. Gomez....... X ......... .........
Mrs. Fischbach................ ........ X .........
Mr. Moore..................... ........ X .........
Mrs. Steel.................... ........ X .........
Ms. Van Duyne................. ........ X .........
Mr. Feenstra.................. ........ X .........
Ms. Malliotakis............... ........ X .........
Mr. Carey..................... ........ X .........
----------------------------------------------------------------------------------------------------------------
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 7986, the ``Generalized System
Preferences Reform Act,'' on April 17, 2024.
The vote on the amendment offered by Ms. Sanchez to the
amendment in the nature of a substitute to H.R. 7986, which
would update mandatory labor criteria and update the definition
of worker rights was not agreed to by a roll call vote of 17
yeas to 25 nays (with a quorum being present). The vote was as
follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)................ ........ X ......... Mr. Neal........ X ......... .........
Mr. Buchanan.................. ........ X ......... Mr. Doggett..... X ......... .........
Mr. Smith (NE)................ ........ X ......... Mr. Thompson.... X ......... .........
Mr. Kelly..................... ........ X ......... Mr. Larson...... X ......... .........
Mr. Schweikert................ ........ X ......... Mr. Blumenauer.. ........ ......... .........
Mr. LaHood.................... ........ X ......... Mr. Pascrell.... X ......... .........
Dr. Wenstrup.................. ........ X ......... Mr. Davis....... X ......... .........
Mr. Arrington................. ........ X ......... Ms. Sanchez..... X ......... .........
Dr. Ferguson.................. ........ X ......... Ms. Sewell...... X ......... .........
Mr. Estes..................... ........ X ......... Ms. DelBene..... X ......... .........
Mr. Smucker................... ........ X ......... Ms. Chu......... X ......... .........
Mr. Hern...................... ........ X ......... Ms. Moore....... X ......... .........
Ms. Miller.................... ........ X ......... Mr. Kildee...... X ......... .........
Dr. Murphy.................... ........ X ......... Mr. Beyer....... X ......... .........
Mr. Kustoff................... ........ X ......... Mr. Evans....... X ......... .........
Mr. Fitzpatrick............... ........ X ......... Mr. Schneider... X ......... .........
Mr. Steube.................... ........ X ......... Mr. Panetta..... X ......... .........
Ms. Tenney.................... ........ X ......... Mr. Gomez....... X ......... .........
Mrs. Fischbach................ ........ X .........
Mr. Moore..................... ........ X .........
Mrs. Steel.................... ........ X .........
Ms. Van Duyne................. ........ X .........
Mr. Feenstra.................. ........ X .........
Ms. Malliotakis............... ........ X .........
Mr. Carey..................... ........ X .........
----------------------------------------------------------------------------------------------------------------
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 7986, the ``Generalized System
Preferences Reform Act,'' on April 17, 2024.
The Amendment in the Nature of a Substitute to H.R. 7986
was agreed to by a roll call vote of 25 yeas to 17 nays (with a
quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)................ X ......... ......... Mr. Neal........ ........ X .........
Mr. Buchanan.................. X ......... ......... Mr. Doggett..... ........ X .........
Mr. Smith (NE)................ X ......... ......... Mr. Thompson.... ........ X .........
Mr. Kelly..................... X ......... ......... Mr. Larson...... ........ X .........
Mr. Schweikert................ X ......... ......... Mr. Blumenauer.. ........ ......... .........
Mr. LaHood.................... X ......... ......... Mr. Pascrell.... ........ X .........
Dr. Wenstrup.................. X ......... ......... Mr. Davis....... ........ X .........
Mr. Arrington................. X ......... ......... Ms. Sanchez..... ........ X .........
Dr. Ferguson.................. X ......... ......... Ms. Sewell...... ........ X .........
Mr. Estes..................... X ......... ......... Ms. DelBene..... ........ X .........
Mr. Smucker................... X ......... ......... Ms. Chu......... ........ X .........
Mr. Hern...................... X ......... ......... Ms. Moore....... ........ X .........
Ms. Miller.................... X ......... ......... Mr. Kildee...... ........ X .........
Dr. Murphy.................... X ......... ......... Mr. Beyer....... ........ X .........
Mr. Kustoff................... X ......... ......... Mr. Evans....... ........ X .........
Mr. Fitzpatrick............... X ......... ......... Mr. Schneider... ........ X .........
Mr. Steube.................... X ......... ......... Mr. Panetta..... ........ X .........
Ms. Tenney.................... X ......... ......... Mr. Gomez....... ........ X .........
Mrs. Fischbach................ X ......... .........
Mr. Moore..................... X ......... .........
Mrs. Steel.................... X ......... .........
Ms. Van Duyne................. X ......... .........
Mr. Feenstra.................. X ......... .........
Ms. Malliotakis............... X ......... .........
Mr. Carey..................... X ......... .........
----------------------------------------------------------------------------------------------------------------
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 7986, the ``Generalized System
Preferences Reform Act,'' on April 17, 2024.
H.R. 7986 was ordered favorably reported to the House of
Representatives as amended by a roll call vote of 25 yeas to 17
nays (with a quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)................ X ......... ......... Mr. Neal........ ........ X .........
Mr. Buchanan.................. X ......... ......... Mr. Doggett..... ........ X .........
Mr. Smith (NE)................ X ......... ......... Mr. Thompson.... ........ X .........
Mr. Kelly..................... X ......... ......... Mr. Larson...... ........ X .........
Mr. Schweikert................ X ......... ......... Mr. Blumenauer.. ........ ......... .........
Mr. LaHood.................... X ......... ......... Mr. Davis....... ........ X .........
Dr. Wenstrup.................. X ......... ......... Ms. Sanchez..... ........ X .........
Mr. Arrington................. X ......... ......... Ms. Sewell...... ........ X .........
Dr. Ferguson.................. X ......... ......... Ms. DelBene..... ........ X .........
Mr. Estes..................... X ......... ......... Ms. Chu......... ........ X .........
Mr. Smucker................... X ......... ......... Ms. Moore....... ........ X .........
Mr. Hern...................... X ......... ......... Mr. Kildee...... ........ X .........
Ms. Miller.................... X ......... ......... Mr. Beyer....... ........ X .........
Dr. Murphy.................... X ......... ......... Mr. Evans....... ........ X .........
Mr. Kustoff................... X ......... ......... Mr. Schneider... ........ X .........
Mr. Fitzpatrick............... X ......... ......... Mr. Panetta..... ........ X .........
Mr. Steube.................... X ......... ......... Mr. Gomez....... ........ X .........
Ms. Tenney.................... X ......... .........
Mrs. Fischbach................ X ......... .........
Mr. Moore..................... X ......... .........
Mrs. Steel.................... X ......... .........
Ms. Van Duyne................. X ......... .........
Mr. Feenstra.................. X ......... .........
Ms. Malliotakis............... X ......... .........
Mr. Carey..................... X ......... .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 7986, as
reported. The estimate prepared by the Congressional Budget
Office (CBO) is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involved no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
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 CBO, the following statement by CBO is
provided.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The bill would:
Retroactively extend reduced duties on goods
imported under the government's program of Generalized
System of Preferences (GSP) through December 31, 2030
Modify GSP eligibility requirements
Extend current customs user fees through
September 30, 2033
Impose a private-sector mandate on U.S.
importers by requiring them to remit customs user fees
through 2033, rather than 2031
Estimated budgetary effects would mainly stem from:
Retroactively extending GSP duties and
modifying certain requirements
Extending customs user fees
Bill summary: H.R. 7986 would reauthorize and extend,
through December 31, 2030, the program of reduced or free
duties specified under the Generalized System of Preferences
(GSP) for certain goods imported from about 120 eligible
countries. Those preferences expired on December 31, 2020. The
bill also would reinstate the preferential rates retroactively
from the bill's effective date and would allow importers to
receive refunds for the higher duties they paid after the
preferences expired.
H.R. 7986 also would periodically increase rule-of-origin
requirements, so that to retain GSP eligibility a larger
portion of any product would need to be produced within the
eligible country. The bill also would increase the maximum
value of a single product that could be imported under GSP duty
rates from a single country, and would change the
administrative review process for extending or revoking GSP
eligibility for certain products and countries.
Finally, H.R. 7986 would extend the authorization for
customs user fees through September 30, 2033; those fees are
set to expire on September 30, 2031.
Estimated Federal cost: The estimated budgetary effect of
H.R. 7986 is shown in Table 1. The costs of the legislation
fall within budget functions 150 (international affairs) and
750 (administration of justice).
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted around the end of fiscal year 2024.
Estimated outlays are based on historical spending patterns for
similar projects and programs.
Direct spending and revenues: H.R. 7986 would reauthorize
and extend the reduced or free duties specified under the GSP
through December 31, 2030. The bill would also amend several
program requirements and would reinstate preferential rates
retroactively, allowing importers to receive refunds for the
higher duties they paid after the program expired on December
31, 2030. Using data from the U.S. International Trade
Commission, CBO estimates that reauthorizing the GSP, with the
bill's updates to the program's requirements, would reduce
revenues by $8.3 billion over the 2024-2034 period. Of that
amount, CBO estimates that issuing refunds for the higher
duties paid after the preferences expired would total $2.4
billion.
H.R. 7986 would extend the authorization for collections of
customs user fees for two years through September 30, 2033.
Those fees, which are set to expire at the end of fiscal year
2031, are collected by Customs and Border Protection to cover
some of the costs of inspecting people and cargo entering the
country. The fees are classified in the budget as mandatory
offsetting collections, that is, as reductions in direct
spending. CBO estimates that extending the fees would reduce
direct spending by $10.8 billion over the 2024-2034 period.
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 7986
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------------------------------
2024- 2024-
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2029 2034
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DECREASES IN DIRECT SPENDING
Estimated Budget Authority........................................ 0 0 0 0 0 0 0 0 -5,280 -5,533 -25 0 -10,838
Estimated Outlays................................................. 0 0 0 0 0 0 0 0 -5,280 -5,533 -25 0 -10,838
DECREASES IN REVENUES
Estimated Revenues................................................ 0 -2,942 -964 -990 -1,023 -1,052 -1,085 -280 0 0 0 -6,971 -8,336
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Effect on the Deficit............................................. 0 2,942 964 990 1,023 1,052 1,085 280 -5,280 -5,533 -25 6,971 -2,502
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization........................................... 0 1 0 0 0 0 0 0 0 0 0 1 1
Estimated Outlays................................................. 0 1 0 0 0 0 0 0 0 0 0 1 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Spending subject to appropriation: H.R. 7986 would change
the administrative review process for extending or revoking GSP
eligibility for certain products and countries. Using
information from the U.S. International Trade Commission, CBO
estimates that updating the eligibility review process would
cost $1 million over the 2024-2029 period to administer,
process, and report on new claims. Any related spending would
be subject to the availability of appropriated funds.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in Table 2.
TABLE 2.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 7986, THE GENERALIZED SYSTEM OF PREFERENCES REFORM ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE WAYS AND MEANS ON
APRIL 17, 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
------------------------------------------------------------------------------------------------------------------------------
2024- 2024-
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2029 2034
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pay-As-You-Go Effect............................................. 0 2,942 964 990 1,023 1,052 1,085 280 -5,280 -5,533 -25 6,971 -2,502
Memorandum:
Changes in Outlays........................................... 0 0 0 0 0 0 0 0 -5,280 -5,533 -25 0 -10,838
Changes in Revenues.......................................... 0 -2,942 -964 -990 -1,023 -1,052 -1,085 -280 0 0 0 -6,971 -8,336
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term net direct spending and deficits: CBO
estimates that enacting H.R. 7986 would not increase net direct
spending or deficits in any of the four consecutive 10-year
periods beginning in 2035.
Mandates: H.R. 7986 would impose a private-sector mandate
as defined in the Unfunded Mandates Reform Act (UMRA) on
importers by extending customs user fees on imported and
exported goods by two years, to 2033. The cost of the mandates
would be the amounts paid by U.S. importers. CBO estimates the
additional fees would cost importers more than $5 billion
annually for two years. As a result, CBO estimates that the
cost of the mandate would exceed the threshold established in
UMRA for private-sector mandates ($200 million in 2024,
adjusted annually for inflation).
This bill would impose no intergovernmental mandates as
defined in UMRA.
Estimate prepared by: Federal costs: Jeremy Crimm;
Revenues: Emma Uebelhor; Mandates: Grace Watson.
Estimate reviewed by: Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Joshua Shakin,
Chief, Revenue Projections Unit; Kathleen FitzGerald, Chief,
Public and Private Mandates Unit; H. Samuel Papenfuss, Deputy
Director of Budget Analysis; John McClelland, Director of Tax
Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
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, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill does not authority funding, so no statement of general
performance goals and objectives is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
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.
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 italics, and existing law in which no
change is proposed is shown in roman):
TRADE ACT OF 1974
* * * * * * *
TITLE V--GENERALIZED SYSTEM OF PREFERENCES
* * * * * * *
SEC. 502. DESIGNATION OF BENEFICIARY DEVELOPING COUNTRIES.
(a) Authority To Designate Countries.--
(1) Beneficiary developing countries.--The President
is authorized to designate countries as beneficiary
developing countries for purposes of this title.
(2) Least-developed beneficiary developing
countries.--The President is authorized to designate
any beneficiary developing country as a least-developed
beneficiary developing country for purposes of this
title, based on the considerations in section 501 and
subsection (c) of this section.
(b) Countries Ineligible for Designation.--
(1) Specific countries.--The following countries may
not be designated as beneficiary developing countries
for purposes of this title:
(A) Australia.
(B) Canada.
(C) European Union member states.
(D) Iceland.
(E) Japan.
(F) Monaco.
(G) New Zealand.
(H) Norway.
(I) Switzerland.
(J) China.
(2) Other bases for ineligibility.--The President
shall not designate any country a beneficiary
developing country under this title if any of the
following applies:
(A) Such country is a Communist country,
unless--
(i) the products of such country
receive nondiscriminatory treatment,
(ii) such country is a WTO Member (as
such term is defined in section 2(10)
of the Uruguay Round Agreements Act)
(19 U.S.C. 3501(10)) and a member of
the International Monetary Fund, and
(iii) such country is not dominated
or controlled by international
communism.
(B) Such country is a party to an arrangement
of countries and participates in any action
pursuant to such arrangement, the effect of
which is--
(i) to withhold supplies of vital
commodity resources from international
trade or to raise the price of such
commodities to an unreasonable level,
and
(ii) to cause serious disruption of
the world economy.
(C) Such country affords preferential
treatment to the products of a developed
country, other than the United States, which
has, or is likely to have, a significant
adverse effect on United States commerce.
(D)(i) Such country--
(I) has nationalized, expropriated,
or otherwise seized ownership or
control of property, including
patents, trademarks, or copyrights,
owned by a United States citizen or by
a corporation, partnership, or
association which is 50 percent or more
beneficially owned by United States
citizens,
(II) has taken steps to repudiate or
nullify an existing contract or
agreement with a United States citizen
or a corporation, partnership, or
association which is 50 percent or more
beneficially owned by United States
citizens, the effect of which is to
nationalize, expropriate, or otherwise
seize ownership or control of property,
including patents, trademarks, or
copyrights, so owned, or
(III) has imposed or enforced taxes
or other
exactions, restrictive maintenance or
operational conditions, or other
measures with respect to property,
including patents, trademarks, or
copyrights, so owned, the effect of
which is to nationalize, expropriate,
or otherwise seize ownership or control
of such property,
unless clause (ii) applies.
(ii) This clause applies if the President
determines that--
(I) prompt, adequate, and effective
compensation has been or is being made
to the citizen, corporation,
partnership, or association referred to
in clause (i),
(II) good faith negotiations to
provide prompt, adequate, and effective
compensation under the applicable
provisions of international law are in
progress, or the country described in
clause (i) is otherwise taking steps to
discharge its obligations under
international law with respect to such
citizen, corporation, partnership, or
association, or
(III) a dispute involving such
citizen, corporation, partnership, or
association over compensation for such
a seizure has been submitted to
arbitration under the provisions of the
Convention for the Settlement of
Investment Disputes, or in another
mutually agreed upon forum,
and the President promptly furnishes a copy of
such determination to the Senate and House of
Representatives.
(E) Such country fails to act in good faith
in recognizing as binding or in enforcing
arbitral awards in favor of United States
citizens or a corporation, partnership, or
association which is 50 percent or more
beneficially owned by United States citizens,
which have been made by arbitrators appointed
for each case or by permanent arbitral bodies
to which the parties involved have submitted
their dispute.
(F) Such country aids or abets, by granting
sanctuary from prosecution to, any individual
or group which has committed an act of
international terrorism or the Secretary of
State makes a determination with respect to
such country under section 6(j)(1)(A) of the
Export Administration Act of 1979 or such
country has not taken steps to support the
efforts of the United States to combat
terrorism.
(G) Such country has not taken or is not
taking steps to afford internationally
recognized worker rights to workers in the
country (including any designated zone in that
country).
(H) Such country has not implemented its
commitments to eliminate the worst forms of
child labor.
(I) Such country has failed, in a manner
affecting trade or investment--
(i) to effectively enforce its
environmental laws or regulations
through a sustained or recurring course
of action or inaction; or
(ii) to adopt and maintain measures
implementing its obligations under
common multilateral environmental
agreements.
(J) Such country engages in gross violations
of internationally recognized human rights in
that country (including any designated zone in
that country).
Subparagraphs (D), (E), (F), (G), [and (H) (to the
extent described in section 507(6)(D))] (H) (to the
extent described in section 507(6)(D)), (I), and (J)
shall not prevent the designation of any country as a
beneficiary developing country under this title if the
President determines that such designation will be in
the national economic interest of the United States and
reports such determination to the Congress with the
reasons therefor.
(c) Factors Affecting Country Designation.--In determining
whether to designate any country as a beneficiary developing
country under this title, the President shall take into
account--
(1) an expression by such country of its desire to be
so designated;
(2) the level of economic development of such
country, including its per capita gross national
product, the living standards of its inhabitants, and
any other economic factors which the President deems
appropriate;
(3) whether or not other major developed countries
are extending generalized preferential tariff treatment
to such country;
(4) the extent to which such country has assured the
United States that it will provide equitable and
reasonable access to the markets and basic commodity
resources of such country and the extent to which such
country has assured the United States that it will
refrain from engaging in unreasonable export practices;
(5) the extent to which such country is providing
adequate and effective protection of intellectual
property rights;
(6) the extent to which such country has taken
action to--
(A) reduce trade distorting investment
practices and policies (including export
performance requirements); and
(B) reduce or eliminate barriers to trade in
services[; and];
(7) [whether or not such country has taken or is
taking steps to afford] the extent to which such
country is affording to workers in that country
(including any designated zone in that country)
internationally recognized worker rights[.];
(8) the extent to which such country allows, after
the date of the enactment of this paragraph,
construction of military bases by a covered nation (as
such term is defined in section 4872 of title 10,
United States Code);
(9) the extent to which such country--
(A) provides open and equitable market access
for United States agriculture, including
through the adoption of science-based
standards;
(B) refrains from imposing unjustified trade
restrictions that affect new agricultural
technologies, including biotechnology;
(C) refrains from providing domestic
agricultural subsidies that decrease market
opportunities for United States exports; and
(D) refrains from imposing prohibitions on
the generic use of common food and beverage
terms;
(10) the extent to which such country is deepening
its economic, diplomatic, and military relations with
covered nations (as such term is defined in section
4872 of title 10, United States Code);
(11) the extent to which such country has
established, or is making continual progress toward
establishing--
(A) the rule of law, political pluralism, and
the right to due process, a fair trial, and
equal protection under the law;
(B) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development of
private enterprise, and encourage the formation
of capital markets through micro-credit or
other programs; and
(C) a system to combat corruption and
bribery, such as signing and implementing the
Convention on Combating Bribery of Foreign
Public Officials in International Business
Transactions, done at Paris December 17, 1997,
and entered into force February 15, 1999 (TIAS
99-215);
(12) the extent to which such country provides
equitable and non-discriminatory tax treatment for
United States entities;
(13) the extent to which such country is effectively
enforcing its environmental laws and regulations and
adopting and maintaining measures implementing its
obligations under common multilateral environmental
agreements;
(14) the extent to which such country is achieving
the goals described in section 3(b) of the Women's
Entrepreneurship and Economic Empowerment Act of 2018
(22 U.S.C. 2151-2(b));
(15) whether such country engages in activities that
undermine United States national security or foreign
policy interests; and
(16) the extent to which such country--
(A) has imposed unreasonable digital trade
barriers, such as unnecessary or discriminatory
data localization or data transfer
restrictions, discriminatory treatment of
digital products, or forced disclosure of
proprietary source code; and
(B) has taken steps in the digital
environment to support consumer protections,
the privacy of personal information, and open
digital ecosystems.
(d) Withdrawal, Suspension, or Limitation of Country
Designation.--
(1) In general.--The President may withdraw, suspend,
or limit the application of the duty-free treatment
accorded under this title with respect to any country.
In taking any action under this subsection, [the
President shall consider the factors] the President--
(A) shall consider--
(i) the factors set forth in section
501 and subsection (c) of this
section[.];
(ii) the likely impacts of any such
action on working toward, or continuing
to meet, the criteria and factors
described in subsections (b) and (c) of
this section; and
(iii) the likely impacts of any such
action on workers and populations in
the country that such criteria and
factors are intended to help;
(B) take all available steps to facilitate
continued duty-free treatment under this title
for products with respect to which the
imposition of duties is likely--
(i) to have an adverse effect on
meeting the criteria and factors
described in subsections (b) and (c) of
this section; or
(ii) result in severe economic harm
to the populations that such criteria
and factors are intended to help; and
(C) hold a public hearing or provide for a
period of not less than 30 days for submission
of comments by the public.
(2) Changed circumstances.--The President shall,
after complying with the requirements of subsection
(f)(2), withdraw or suspend the designation of any
country as a beneficiary developing country if, after
such designation, the President determines that as the
result of changed circumstances such country would be
barred from designation as a beneficiary developing
country under subsection (b)(2). Such country shall
cease to be a beneficiary developing country on the day
on which the President issues an Executive order or
Presidential proclamation revoking the designation of
such country under this title.
(3) Advice to congress.--The President shall, as
necessary, advise the Congress on the application of
section 501 and subsection (c) of this section, and the
actions the President has taken to withdraw, to
suspend, or to limit the application of duty-free
treatment with respect to any country which has failed
to adequately take the actions described in subsection
(c).
(e) Mandatory Graduation of Beneficiary Developing
Countries.--If the President determines that a beneficiary
developing country has become a ``high income'' country, as
defined by the official statistics of the International Bank
for Reconstruction and Development, then the President shall
terminate the designation of such country as a beneficiary
developing country for purposes of this title, effective on
January 1 of the second year following the year in which such
determination is made.
(f) Congressional Notification.--
(1) Notification of designation.--
(A) In general.--Before the President
designates any country as a beneficiary
developing country under this title, the
President shall notify the Congress of the
President's intention to make such designation,
together with the considerations entering into
such decision.
(B) Designation as least-developed
beneficiary developing country.--At least 60
days before the President designates any
country as a least-developed beneficiary
developing country, the President shall notify
the Congress of the President's intention to
make such designation.
(2) Notification of termination or suspension.--If
the President has designated any country as a
beneficiary developing country under this title, the
President shall not terminate or suspend such
designation unless, at least 60 days before such
termination or suspension, the President has notified
the Congress and has notified such country of the
President's intention to terminate or suspend such
designation, together with the considerations entering
into such decision.
(g) Publication of Determinations Relating to Petitions for
Review.--The United States Trade Representative shall publish
in the Federal Register a notice of, and the rationale for, any
determination of the Trade Representative with respect to a
petition for review of the eligibility of a country for
designation as a beneficiary developing country, including a
determination--
(1) to accept or deny such a petition;
(2) to continue to review the eligibility of the
country; or
(3) to withdraw, suspend, or limit the application of
duty-free treatment under this title with respect to
the country.
(h) Assessment and Report on Compliance With Eligibility
Requirements.--
(1) In general.--The President shall--
(A) on an annual basis--
(i) conduct assessments of the
compliance of an appropriate number of
countries designated as beneficiary
developing countries for purposes of
this title in meeting or continuing to
meet the eligibility requirements under
this title; and
(ii) make determinations with respect
to whether to initiate full reviews of
the practices of those countries to
assess the continued eligibility of
those countries for designation as
beneficiary developing countries under
this title; and
(B) submit to Congress a report consisting of
the results of such assessments and
determinations.
(2) Frequency.--The President shall conduct an
assessment described in clause (i) of paragraph (1)(A)
and make a determination described in clause (ii) of
that paragraph with respect to each country designated
as a beneficiary developing country for purposes of
this title not less frequently than once every 3 years.
SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.
(a) Eligible Articles.--
(1) Designation.--
(A) In general.--Except as provided in
subsection (b), the President is authorized to
designate articles as eligible articles from
all beneficiary developing countries for
purposes of this title by Executive order or
Presidential proclamation after receiving the
advice of the International Trade Commission in
accordance with subsection (e).
(B) Least-developed beneficiary developing
countries.--Except for articles described in
subparagraphs (A), (B), and (E) of subsection
(b)(1) and articles described in paragraphs (2)
and (3) of subsection (b), the President may,
in carrying out section 502(d)(1) and
subsection (c)(1) of this section, designate
articles as eligible articles only for
countries designated as least-developed
beneficiary developing countries under section
502(a)(2) if, after receiving the advice of the
International Trade Commission in accordance
with subsection (e) of this section, the
President determines that such articles are not
import-sensitive in the context of imports from
least-developed beneficiary developing
countries.
(C) Three-year rule.--If, after receiving the
advice of the International Trade Commission
under subsection (e), an article has been
formally considered for designation as an
eligible article under this title and denied
such designation, such article may not be
reconsidered for such designation for a period
of 3 years after such denial.
(2) Rule of origin.--
(A) General rule.--The duty-free treatment
provided under this title shall apply to any
eligible article which is the growth, product,
or manufacture of a beneficiary developing
country if--
(i) that article is imported directly
from a beneficiary developing country
into the customs territory of the
United States; and
(ii) the sum of--
(I) the cost or value of the
materials produced in the
beneficiary developing country
or any two or more such
countries that are members of
the same association of
countries and are treated as
one country under section
507(2), plus
(II) the direct costs of
processing operations performed
in such beneficiary developing
country or such member
countries,
is not less than [35 percent] the
percentage described in subparagraph
(B) of the appraised value of such
article at the time it is entered.
(B) Percentage described.--The percentage
described in this subparagraph is--
(i) in the case of articles entered
before January 1, 2027, 35 percent;
(ii) in the case of articles entered
on or after January 1, 2027, and before
January 1, 2029, 40 percent;
(iii) in the case of articles entered
on or after January 1, 2029, and before
January 1, 2031, 45 percent; and
(iv) in the case of articles entered
on or after January 1, 2031, 50
percent.
[(B)] (C) Exclusions.--An article shall not
be treated as the growth, product, or
manufacture of a beneficiary developing country
by virtue of having merely undergone--
(i) simple combining or packaging
operations, or
(ii) mere dilution with water or mere
dilution with another substance that
does not materially alter the
characteristics of the article.
(D) Pass-through and cost or value of
materials produced in the customs territory of
the united states.--
(i) In general.--The duty-free
treatment provided under this title
shall apply to any article that meets
the requirements of this paragraph.
(ii) Exception with respect to
materials produced in the customs
territory of the united states.--To the
extent that the cost or value of
materials produced in the customs
territory of the United States is
included with respect to an article, an
amount not to exceed 15 percent of the
appraised value of the article at the
time it is entered that is attributed
to such United States cost or value may
be applied toward determining the
applicable percentage described in
subparagraph (B).
(iii) No pass-through to other
programs.--Notwithstanding clause (i),
duty-free treatment under any other
program providing such treatment for an
article, conditional on the eligibility
of an article to be treated as
originating for purposes of this
paragraph, may only be extended to an
article that is otherwise eligible for
duty-free treatment under this title in
a calendar year--
(I) if the article would
remain eligible for such
treatment even if subparagraph
(A) were applied by
substituting ``35 percent'' for
``the percentage described in
subparagraph (B)'' with respect
to that calendar year; and
(II) if no amount
attributable to United States
cost or value, as authorized by
clause (ii) of this
subparagraph, would be required
to be applied in order to
achieve such eligibility.
(3) Regulations.--The Secretary of the Treasury,
after consulting with the United States Trade
Representative, shall prescribe such regulations as may
be necessary to carry out paragraph (2), including, but
not limited to, regulations providing that, in order to
be eligible for duty-free treatment under this title,
an article--
(A) must be wholly the growth, product, or
manufacture of a beneficiary developing
country, or
(B) must be a new or different article of
commerce which has been grown, produced, or
manufactured in the beneficiary developing
country.
(b) Articles That May Not Be Designated As Eligible
Articles.--
(1) Import sensitive articles.--The President may not
designate any article as an eligible article under
subsection (a) if such article is within one of the
following categories of import-sensitive articles:
(A) Except as provided in paragraphs (4) and
(5), textile and apparel articles which were
not eligible articles for purposes of this
title on January 1, 1994, as this title was in
effect on such date.
(B) Watches, except those watches entered
after June 30, 1989, that the President
specifically determines, after public notice
and comment, will not cause material injury to
watch or watch band, strap, or bracelet
manufacturing and assembly operations in the
United States or the United States insular
possessions.
(C) Import-sensitive electronic articles.
(D) Import-sensitive steel articles.
(E) Except as provided in paragraph (5),
footwear, handbags, luggage, flat goods, work
gloves, and leather wearing apparel which were
not eligible articles for purposes of this
title on January 1, 1995, as this title was in
effect on such date.
(F) Import-sensitive semimanufactured and
manufactured glass products.
(G) Any other articles which the President
determines to be import-sensitive in the
context of the Generalized System of
Preferences.
(2) Articles against which other actions taken.--An
article shall not be an eligible article for purposes
of this title for any period during which such article
is the subject of any action proclaimed pursuant to
section 203 of this Act (19 U.S.C. 2253) or section 232
or 351 of the Trade Expansion Act of 1962 (19 U.S.C.
1862, 1981).
(3) Agricultural products.--No quantity of an
agricultural product subject to a tariff-rate quota
that exceeds the in-quota quantity shall be eligible
for duty-free treatment under this title.
(4) Certain hand-knotted or hand-woven carpets.--
Notwithstanding paragraph (1)(A), the President may
designate as an eligible article or articles under
subsection (a) carpets or rugs which are hand-loomed,
hand-woven, hand-hooked, hand-tufted, or hand-knotted,
and classifiable under subheading 5701.10.16,
5701.10.40, 5701.90.10, 5701.90.20, 5702.10.90,
5702.42.20, 5702.49.10, 5702.51.20, 5702.91.30,
5702.92.00, 5702.99.10, 5703.10.00, 5703.20.10, or
5703.30.00 of the Harmonized Tariff Schedule of the
United States.
(5) Certain cotton articles.--Notwithstanding
paragraph (3), the President may designate as an
eligible article or articles under subsection (a)(1)(B)
only for countries designated as least-developed
beneficiary developing countries under section
502(a)(2) cotton articles classifiable under subheading
5201.00.18, 5201.00.28, 5201.00.38, 5202.99.30, or
5203.00.30 of the Harmonized Tariff Schedule of the
United States.
(5) Certain luggage and travel articles.--
Notwithstanding subparagraph (A) or (E) of paragraph
(1), the President may designate the following as
eligible articles under subsection (a):
(A) Articles classifiable under subheading
4202.11.00, 4202.12.40, 4202.21.60, 4202.21.90,
4202.22.15, 4202.22.45, 4202.31.60, 4202.32.40,
4202.32.80, 4202.92.15, 4202.92.20, 4202.92.45,
or 4202.99.90 of the Harmonized Tariff Schedule
of the United States.
(B) Articles classifiable under statistical
reporting number 4202.12.2020, 4202.12.2050,
4202.12.8030, 4202.12.8070, 4202.22.8050,
4202.32.9550, 4202.32.9560, 4202.91.0030,
4202.91.0090, 4202.92.3020, 4202.92.3031,
4202.92.3091, 4202.92.9026, or 4202.92.9060 of
the Harmonized Tariff Schedule of the United
States, as such statistical reporting numbers
are in effect on the date of the enactment of
the Trade Preferences Extension Act of 2015.
(c) Withdrawal, Suspension, or Limitation of Duty-Free
Treatment; Competitive Need Limitation.--
(1) In general.--The President may withdraw, suspend,
or limit the application of the duty-free treatment
accorded under this title with respect to any article,
except that no rate of duty may be established with
respect to any article pursuant to this subsection
other than the rate which would apply but for this
title. In taking any action under this subsection, the
President shall consider the factors set forth in
sections 501 and 502(c).
(2) Competitive need limitation.--
(A) Basis for withdrawal of duty-free
treatment.--
(i) In general.--Except as provided
in clause (ii) and subject to
subsection (d), whenever the President
determines that a beneficiary
developing country has exported
(directly or indirectly) to the United
States during any calendar year
beginning after December 31, 1995--
(I) a quantity of an eligible
article having an appraised
value in excess of the
applicable amount for the
calendar year, or
(II) a quantity of an
eligible article equal to or
exceeding 50 percent of the
appraised value of the total
imports of that article into
the United States during any
calendar year,
the President shall, not later than
November 1 of the next calendar year,
terminate the duty-free treatment for
that article from that beneficiary
developing country.
(ii) Annual adjustment of applicable
amount.--For purposes of applying
clause (i), the applicable amount is--
(I) [for 1996, $75,000,000]
for calendar year 2023,
$500,000,000, and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus [$5,000,000] 2.5 percent
of such applicable amount.
(B) Country defined.--For purposes of this
paragraph, the term ``country'' does not
include an association of countries which is
treated as one country under section 507(2),
but does include a country which is a member of
any such association.
(C) Redesignations.--A country which is no
longer treated as a beneficiary developing
country with respect to an eligible article by
reason of subparagraph (A) [may, subject]
should, subject to the considerations set forth
in sections 501 and 502, be redesignated a
beneficiary developing country with respect to
such article if imports of such article from
such country did not exceed the limitations in
subparagraph (A) during the preceding calendar
year.
(D) Least-developed beneficiary developing
countries and beneficiary sub-saharan african
countries.--Subparagraph (A) shall not apply to
any least-developed beneficiary developing
country or any beneficiary sub-Saharan African
country.
(E) Articles not produced in the united
states excluded.--Subparagraph (A)(i)(II) shall
not apply with respect to any eligible article
if a like or directly competitive article was
not produced in the United States in any of the
preceding 3 calendar years.
(F) De minimis waivers.--
(i) In general.--The President may
disregard subparagraph (A)(i)(II) with
respect to any eligible article from
any beneficiary developing country if
the aggregate appraised value of the
imports of such article into the United
States during the preceding calendar
year does not exceed the applicable
amount for such preceding calendar
year.
(ii) Applicable amount.--For purposes
of applying clause (i), the applicable
amount is--
(I) [for calendar year 1996,
$13,000,000] for calendar year
2023, $50,000,000, and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus [$500,000] 2.5 percent of
such applicable amount.
(d) Waiver of Competitive Need Limitation.--
(1) In general.--The President may waive the
application of subsection (c)(2) with respect to any
eligible article of any beneficiary developing country
if, before November 1 of the calendar year beginning
after the calendar year for which a determination
described in subsection (c)(2)(A) was made with respect
to such eligible article, the President--
(A) receives the advice of the International
Trade Commission under section 332 of the
Tariff Act of 1930 on whether any industry in
the United States is likely to be adversely
affected by such waiver,
(B) determines, based on the considerations
described in sections 501 and 502(c) and the
advice described in subparagraph (A), that such
waiver is in the national economic interest of
the United States, and
(C) publishes the determination described in
subparagraph (B) in the Federal Register.
(2) Considerations by the president.--In making any
determination under paragraph (1), the President shall
give great weight to--
(A) the extent to which the beneficiary
developing country has assured the United
States that such country will provide equitable
and reasonable access to the markets and basic
commodity resources of such country, and
(B) the extent to which such country provides
adequate and effective protection of
intellectual property rights.
(3) Other bases for waiver.--The President may waive
the application of subsection (c)(2) if, before
November 1 of the calendar year beginning after the
calendar year for which a determination described in
subsection (c)(2) was made with respect to a
beneficiary developing country, the President
determines that--
(A) there has been a historical preferential
trade relationship between the United States
and such country,
(B) there is a treaty or trade agreement in
force covering economic relations between such
country and the United States, and
(C) such country does not discriminate
against, or impose unjustifiable or
unreasonable barriers to, United States
commerce,
and the President publishes that determination in the
Federal Register.
(4) Limitations on waivers.--
(A) In general.--The President may not
exercise the waiver authority under this
subsection with respect to a quantity of an
eligible article entered during any calendar
year beginning after 1995, the aggregate
appraised value of which equals or exceeds 30
percent of the aggregate appraised value of all
articles that entered duty-free under this
title during the preceding calendar year.
(B) Other waiver limits.--(i) The President
may not exercise the waiver authority provided
under this subsection with respect to a
quantity of an eligible article entered during
any calendar year beginning after 1995, the
aggregate appraised value of which exceeds 15
percent of the aggregate appraised value of all
articles that have entered duty-free under this
title during the preceding calendar year from
those beneficiary developing countries which
for the preceding calendar year--
(I) had a per capita gross national
product (calculated on the basis of the
best available information, including
that of the International Bank for
Reconstruction and Development) of
$5,000 or more; or
(II) had exported (either directly or
indirectly) to the United States a
quantity of articles that was duty-free
under this title that had an aggregate
appraised value of more than 10 percent
of the aggregate appraised value of all
articles that entered duty-free under
this title during that year.
(ii) Not later than November 1 of each year,
the President should revoke any waiver that has
then been in effect with respect to an article
for 5 years or more if the beneficiary
developing country has exported to the United
States (directly or indirectly) during the
preceding calendar year a quantity of the
article--
(I) having an appraised value in
excess of 1.5 times the applicable
amount set forth in subsection
(c)(2)(A)(ii) for that calendar year;
or
(II) exceeding 75 percent of the
appraised value of the total imports of
that article into the United States
during that calendar year.
(iii) Clause (ii)(II) shall not apply with
respect to any article if a like or directly
competitive article was not produced in the
United States in any of the preceding 3
calendar years.
(C) Calculation of limitations.--There shall
be counted against the limitations imposed
under subparagraphs (A) and (B) for any
calendar year only that value of any eligible
article of any country that--
(i) entered duty-free under this
title during such calendar year; and
(ii) is in excess of the value of
that article that would have been so
entered during such calendar year if
the limitations under subsection
(c)(2)(A) applied.
(5) Effective period of waiver.--Any waiver granted
under this subsection shall remain in effect until the
President determines that such waiver is no longer
warranted due to changed circumstances.
(e) International Trade Commission Advice.--Before
designating articles as eligible articles under subsection
(a)(1), the President shall publish and furnish the
International Trade Commission with lists of articles which may
be considered
for designation as eligible articles for purposes of this
title. The provisions of sections 131, 132, 133, and 134 shall
be complied with as though action under section 501 and this
section were action under section 123 to carry out a trade
agreement entered into under section 123.
(f) Special Rule Concerning Puerto Rico.--No action under
this title may affect any tariff duty imposed by the
Legislature of Puerto Rico pursuant to section 319 of the
Tariff Act of 1930 on coffee imported into Puerto Rico.
* * * * * * *
SEC. 505. DATE OF TERMINATION.
No duty-free treatment provided under this title shall remain
in effect after [December 31, 2020] December 31, 2030.
* * * * * * *
SEC. 507. DEFINITIONS.
For purposes of this title:
(1) Beneficiary developing country.--The term
``beneficiary developing country'' means any country
with respect to which there is in effect an Executive
order or Presidential proclamation by the President
designating such country as a beneficiary developing
country for purposes of this title.
(2) Country.--The term ``country'' means any foreign
country or territory, including any overseas dependent
territory or possession of a foreign country, or the
Trust Territory of the Pacific Islands. In the case of
an association of countries which is a free trade area
or customs union, or which is contributing to
comprehensive regional economic integration among its
members through appropriate means, including, but not
limited to, the reduction of duties, the President may
by Executive order or Presidential proclamation provide
that all members of such association other than members
which are barred from designation under section 502(b)
shall be treated as one country for purposes of this
title.
(3) Entered.--The term ``entered'' means entered, or
withdrawn from warehouse for consumption, in the
customs territory of the United States.
(4) Internationally recognized worker rights.--The
term ``internationally recognized worker rights''
includes--
(A) the right of association;
(B) the right to organize and bargain
collectively;
(C) a prohibition on the use of any form of
forced or compulsory labor;
(D) a minimum age for the employment of
children, and a prohibition on the worst forms
of child labor, as defined in paragraph (6)[;
and];
(E) acceptable conditions of work with
respect to
minimum wages, hours of work, and occupational
safety and health[.]; and
(F) the elimination of all forms of
discrimination with respect to occupation and
employment.
(5) Least-developed beneficiary developing country.--
The term ``least-developed beneficiary developing
country'' means a beneficiary developing country that
is designated as a least-developed beneficiary
developing country under section 502(a)(2).
(6) Worst forms of child labor.--The term ``worst
forms of child labor'' means--
(A) all forms of slavery or practices similar
to slavery, such as the sale or trafficking of
children, debt bondage and serfdom, or forced
or compulsory labor, including forced or
compulsory recruitment of children for use in
armed conflict;
(B) the use, procuring, or offering of a
child for prostitution, for the production of
pornography or for pornographic purposes;
(C) the use, procuring, or offering of a
child for illicit activities in particular for
the production and trafficking of drugs; and
(D) work which, by its nature or the
circumstances in which it is carried out, is
likely to harm the health, safety, or morals of
children.
The work referred to in subparagraph (D) shall be
determined by the laws, regulations, or competent
authority of the beneficiary developing country
involved.
(7) Common multilateral environmental agreement.--
(A) In general.--The term ``common
multilateral environmental agreement'', for
purposes of determining the eligibility of a
country for designation as a beneficiary
developing country under this title, means any
agreement specified in subparagraph (B) to
which both the United States and that country
are full parties, including any current or
future mutually agreed upon protocols,
amendments, annexes, or adjustments to such an
agreement.
(B) Agreements specified.--The agreements
specified in this subparagraph are the
following:
(i) The Convention on International
Trade in Endangered Species of Wild
Fauna and Flora, done at Washington
March 3, 1973 (27 UST 1087; TIAS 8249).
(ii) The Montreal Protocol on
Substances that Deplete the Ozone
Layer, done at Montreal September 16,
1987.
(iii) The Protocol of 1978 Relating
to the International Convention for the
Prevention of Pollution from Ships,
1973, done at London February 17, 1978.
(iv) The Convention on Wetlands of
International Importance, Especially as
Waterfowl Habitat, done at Ramsar
February 2, 1971 (TIAS 11084).
(v) The Convention on the
Conservation of Antarctic Marine Living
Resources, done at Canberra May 20,
1980 (33 UST 3476).
(vi) The International Convention for
the Regulation of Whaling, done at
Washington December 2, 1946 (62 Stat.
1716).
(vii) The Convention for the
Establishment of an Inter-American
Tropical Tuna Commission, done at
Washington May 31, 1949 (1 UST 230).
* * * * * * *
----------
SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF
1985
SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.
(a) Schedule of Fees.--In addition to any other fee
authorized by law, the Secretary of the Treasury shall charge
and collect the following fees (subject to adjustment under
subsection (l)) for the provision of customs services in
connection with the following:
(1) For the arrival of a commercial vessel of 100 net
tons or more, $397.
(2) For the arrival of a commercial truck, $5.
(3) For the arrival of each railroad car carrying
passengers or commercial freight, $7.50.
(4) For all arrivals made during a calendar year by a
private vessel or private aircraft, $25.
(5)(A) Subject to subparagraph (B), for the arrival
of each passenger aboard a commercial vessel or
commercial aircraft from a place outside the United
States (other than a place referred to in subsection
(b)(1)(A)(i) of this section), $5.
(B) For the arrival of each passenger aboard a
commercial vessel from a place referred to in
subsection (b)(1)(A)(i) of this section, $1.75.
(6) For each item of dutiable mail for which a
document is prepared by a customs officer (other than
an item subject to a fee under subsection (b)(9)(D)),
$5.
(7) For each customs broker permit held by an
individual, partnership, association, or corporate
customs broker, $125 per year.
(8) For the arrival of a barge or other bulk carrier
from Canada or Mexico, $100.
(9)(A) For the processing of merchandise that is
formally entered or released during any fiscal year, a
fee in an amount equal to 0.21 percent ad valorem,
unless adjusted under subparagraph (B).
(B)(i) The Secretary of the Treasury may adjust the
ad valorem rate specified in subparagraph (A) to an ad
valorem rate (but not to a rate of more than 0.21
percent nor less than 0.15 percent) and the amounts
specified in subsection (b)(8)(A)(i) (but not to more
than $485 nor less than $21) to rates and amounts which
would, if charged, offset the salaries and expenses
that will likely be incurred by the Customs Service in
the processing of such entries and releases during the
fiscal year in which such costs are incurred.
(ii) In determining the amount of any adjustment
under clause (i), the Secretary of the Treasury shall
take into account whether there is a surplus or deficit
in the fund established under subsection (f) with
respect to the provision of customs services for the
processing of formal entries and releases of
merchandise.
(iii) An adjustment may not be made under clause (i)
with respect to the fee charged during any fiscal year
unless the Secretary of the Treasury--
(I) not later than 45 days after the date of
the enactment of the Act providing full-year
appropriations for the Customs Service for that
fiscal year, publishes in the Federal Register
a notice of intent to adjust the fee under this
paragraph and the amount of such adjustment;
(II) provides a period of not less than 30
days following publication of the notice
described in subclause (I) for public comment
and consultation with the Committee on Finance
of the Senate and the Committee on Ways and
Means of the House of Representatives regarding
the proposed adjustment and the methodology
used to determine such adjustment;
(III) upon the expiration of the period
provided under subclause (II), notifies such
committees in writing regarding the final
determination to adjust the fee, the amount of
such adjustment, and the methodology used to
determine such adjustment; and
(IV) upon the expiration of the 15-day period
following the written notification described in
subclause (III), submits for publication in the
Federal Register notice of the final
determination regarding the adjustment of the
fee.
(iv) The 15-day period referred to in clause
(iii)(IV) shall be computed by excluding--
(I) the days on which either House is not in
session because of an adjournment of more than
3 days to a day certain or an adjournment of
the Congress sine die; and
(II) any Saturday and Sunday, not excluded
under subclause (I), when either House is not
in session.
(v) An adjustment made under this subparagraph shall
become effective with respect to formal entries and
releases made on or after the 15th calendar day after
the date of publication of the notice described in
clause (iii)(IV) and shall remain in effect until
adjusted under this subparagraph.
(C) Any fee charged under this paragraph, whether or
not adjusted under subparagraph (B), is subject to the
limitations in subsection (b)(8)(A).
(10) For the processing of merchandise that is
informally entered or released, other than at--
(A) a centralized hub facility,
(B) an express consignment carrier facility,
or
(C) a small airport or other facility to
which section 236 of the Trade and Tariff Act
of 1984 applies, if more than 25,000 informal
entries were cleared through such airport or
facility during the fiscal year preceding such
entry or release (other than Inbound EMS items
described in subsection (b)(9)(D)),
a fee of--
(i) $2 if the entry or release is automated
and not prepared by customs personnel;
(ii) $6 if the entry or release is manual and
not prepared by customs personnel; or
(iii) $9 if the entry or release, whether
automated or manual, is prepared by customs
personnel.
For provisions relating to the informal entry or
release of merchandise at facilities referred to in
subparagraphs (A), (B), and (C), or of Inbound EMS
items described in subsection (b)(9)(D), see subsection
(b)(9).
(b) Limitations on Fees.--(1)(A) Except as provided in
subsection (a)(5)(B) of this section, no fee may be charged
under subsection (a) of this section for customs services
provided in connection with--
(i) the arrival of any passenger whose journey--
(I) originated in a territory or possession
of the United States; or
(II) originated in the United States and was
limited to territories and possessions of the
United States;
(ii) the arrival of any railroad car the journey of
which originates and terminates in the same country,
but only if no passengers board or disembark from the
train and no cargo is loaded or unloaded from such car
while the car is within any country other than the
country in which such car originates and terminates;
(iii) the arrival of a ferry, except for a ferry
whose operations begin on or after August 1, 1999, and
that operates south of 27 degrees latitude and east of
89 degrees longitude; or
(iv) the arrival of any passenger on board a
commercial vessel traveling only between ports which
are within the customs territory of the United States.
(B) The exemption provided for in subparagraph (A) shall not
apply in the case of the arrival of any passenger on board a
commercial vessel whose journey originates and terminates at
the same place in the United States if there are no intervening
stops.
(C) The exemption provided for in subparagraph (A)(i) shall
not apply to fiscal years 1994, 1995, 1996, and 1997.
(2) No fee may be charged under subsection (a)(2) for the
arrival of a commercial truck during any calendar year after a
total of $100 in fees (subject to adjustment under subsection
(l)) has been paid to the Secretary of the Treasury for the
provision of customs services for all arrivals of such
commercial truck during such calendar year.
(3) No fee may be charged under subsection (a)(3) for the
arrival of a railroad car whether passenger or freight during
any calendar year after a total of $100 in fees (subject to
adjustment under subsection (l)) has been paid to the Secretary
of the Treasury for the provision of customs services for all
arrivals of such passenger or freight rail car during such
calendar year.
(4)(A) No fee may be charged under subsection (a)(5) with
respect to the arrival of any passenger--
(i) who is in transit to a destination outside the
customs territory of the United States, and
(ii) for whom customs inspectional services are not
provided.
(B) In the case of a commercial vessel making a single voyage
involving 2 or more United States ports with respect to which
the passengers would otherwise be charged a fee pursuant to
subsection (a)(5), such fee shall be charged only 1 time for
each passenger.
(5) No fee may be charged under subsection (a)(1) for the
arrival of--
(A) a vessel during a calendar year after a total of
$5,955 in fees (subject to adjustment under subsection
(l)) charged under paragraph (1) or (8) of subsection
(a) has been paid to the Secretary of the Treasury for
the provision of customs services for all arrivals of
such vessel during such calendar year,
(B) any vessel which, at the time of the arrival, is
being used solely as a tugboat, or
(C) any barge or other bulk carrier from Canada or
Mexico.
(6) No fee may be charged under subsection (a)(8) for the
arrival of a barge or other bulk carrier during a calendar year
after a total of $1,500 in fees (subject to adjustment under
subsection (l)) charged under paragraph (1) or (8) of
subsection (a) has been paid to the Secretary of the Treasury
for the provision of customs services for all arrivals of such
barge or other bulk carrier during such calendar year.
(7) No fee may be charged under paragraph (2), (3), or (4) of
subsection (a) for the arrival of any--
(A) commercial truck,
(B) railroad car, or
(C) private vessel,
that is being transported, at the time of the arrival, by any
vessel that is not a ferry.
(8)(A)(i) Subject to clause (ii), the fee charged under
subsection (a)(9) for the formal entry or release of
merchandise may not exceed $485 or be less than $25, unless
adjusted pursuant to subsection (a)(9)(B) or (l).
(ii) A surcharge of $3 (subject to adjustment under
subsection (l)) shall be added to the fee determined after
application of clause (i) for any manual entry or release of
merchandise.
(B) No fee may be charged under subsection (a) (9) or (10)
for the processing of any article that is--
(i) provided for under any item in chapter 98 of the
Harmonized Tariff Schedule of the United States, except
subheading 9802.00.60 or 9802.00.80,
(ii) a product of an insular possession of the United
States, or
(iii) a product of any country listed in subdivision
(c)(ii)(B) or (c)(v) of general note 3 to such
Schedule.
(C) For purposes of applying subsection (a) (9) or (10)--
(i) expenses incurred by the Secretary of the
Treasury in the processing of merchandise do not
include costs incurred in--
(I) air passenger processing,
(II) export control, or
(III) international affairs, and
(ii) any reference to a manual formal or informal
entry or release includes any entry or release filed by
a broker or importer that requires the inputting of
cargo selectivity data into the Automated Commercial
System by customs personnel, except when--
(I) the broker or importer is certified as an
ABI cargo release filer under the Automated
Commercial System at any port within the United
States, or
(II) the entry or release is filed at ports
prior to the full implementation of the cargo
selectivity data system by the Customs Service
at such ports.
(D) The fee charged under subsection (a)(9) or (10) with
respect to the processing of merchandise shall--
(i) be paid by the importer of record of the
merchandise;
(ii) except as otherwise provided in this paragraph,
be based on the value of the merchandise as determined
under section 402 of the Tariff Act of 1930;
(iii) in the case of merchandise classified under
subheading 9802.00.60 of the Harmonized Tariff Schedule
of the United States, be applied to the value of the
foreign repairs or alterations to the merchandise;
(iv) in the case of merchandise classified under
heading 9802.00.80 of such Schedule, be applied to the
full value of the merchandise, less the cost or value
of the component United States products;
(v) in the case of agricultural products of the
United States that are processed and packed in a
foreign trade zone, be applied only to the value of
material used to make the container for such
merchandise, if such merchandise is subject to entry
and the container is of a kind normally used for
packing such merchandise; and
(vi) in the case of merchandise entered from a
foreign trade zone (other than merchandise to which
clause (v) applies), be applied only to the value of
the privileged or nonprivileged foreign status
merchandise under section 3 of the Act of June 18, 1934
(commonly known as the Foreign Trade Zones Act, 19
U.S.C. 81c).
With respect to merchandise that is classified under subheading
9802.00.60 or heading 9802.00.80 of such Schedule and is duty-
free, the Secretary may collect the fee charged on the
processing of the merchandise under subsection (a) (9) or (10)
on the basis of aggregate data derived from financial and
manufacturing reports used by the importer in the normal course
of business, rather than on the basis of entry-by-entry
accounting.
(E) For purposes of subsection (a) (9) and (10), merchandise
is entered or released, as the case may be, if the merchandise
is--
(i) permitted or released under section 448(b) of the
Tariff Act of 1930,
(ii) entered or released from customs custody under
section 484(a)(1)(A) of the Tariff Act of 1930, or
(iii) withdrawn from warehouse for consumption.
(9)(A) With respect to the processing of letters, documents,
records, shipments, merchandise, or any other item that is
valued at an amount that is $2,000 or less (or such higher
amount as the Secretary of the Treasury may set by regulation
pursuant to section 498 of the Tariff Act of 1930 and subject
to adjustment under subsection (l)), except such items entered
for transportation and exportation or immediate exportation at
a centralized hub facility, an express consignment carrier
facility, or a small airport or other facility, the following
reimbursements and payments are required:
(i) In the case of a small airport or other
facility--
(I) the reimbursement which such facility is
required to make during the fiscal year under
section 9701 of title 31, United States Code or
section 236 of the Trade and Tariff Act of
1984; and
(II) an annual payment by the facility to the
Secretary of the Treasury, which is in lieu of
the payment of fees under subsection (a)(10)
for such fiscal year, in an amount equal to the
reimbursement under subclause (I).
(ii) Notwithstanding subsection (e)(6) and subject to
the provisions of subparagraph (B), in the case of an
express consignment carrier facility or centralized hub
facility--
(I) $.66 per individual airway bill or bill
of lading (subject to adjustment under
subsection (l)); and
(II) if the merchandise is formally entered,
the fee provided for in subsection (a)(9), if
applicable.
(B)(i) Beginning in fiscal year 2004, the Secretary of the
Treasury may adjust (not more than once per fiscal year) the
amount described in subparagraph (A)(ii) to an amount that is
not less than $.35 and not more than $1.00 per individual
airway bill or bill of lading (subject to adjustment under
subsection (l)). The Secretary shall provide notice in the
Federal Register of a proposed adjustment under the preceding
sentence and the reasons therefor and shall allow for public
comment on the proposed adjustment.
(ii) Notwithstanding section 451 of the
Tariff Act of 1930, the payment required by
subparagraph (A)(ii) (I) or (II) shall be the
only payment required for reimbursement of the
Customs Service in connection with the
processing of an individual airway bill or bill
of lading in accordance with such subparagraph
and for providing services at express
consignment carrier facilities or centralized
hub facilities, except that the Customs Service
may require such facilities to cover expenses
of the Customs Service for adequate office
space, equipment, furnishings, supplies, and
security.
(iii)(I) The payment required by subparagraph
(A)(ii) and clause (ii) of this subparagraph
shall be paid on a quarterly basis by the
carrier using the facility to the Customs
Service in accordance with regulations
prescribed by the Secretary of the Treasury.
(II) 50 percent of the amount of payments
received under subparagraph (A)(ii) and clause
(ii) of this subparagraph shall, in accordance
with section 524 of the Tariff Act of 1930, be
deposited in the Customs User Fee Account and
shall be used to directly reimburse each
appropriation for the amount paid out of that
appropriation for the costs incurred in
providing services to express consignment
carrier facilities or centralized hub
facilities. Amounts deposited in accordance
with the preceding sentence shall be available
until expended for the provision of customs
services to express consignment carrier
facilities or centralized hub facilities.
(III) Notwithstanding section 524 of the
Tariff Act of 1930, the remaining 50 percent of
the amount of payments received under
subparagraph (A)(ii) and clause (ii) of this
subparagraph shall be paid to the Secretary of
the Treasury, which is in lieu of the payment
of fees under subsection (a)(10) of this
section.
(C) For purposes of this paragraph:
(i) The terms ``centralized hub facility'' and
``express consignment carrier facility'' have the
respective meanings that are applied to such terms in
part 128 of chapter I of title 19, Code of Federal
Regulations. Nothing in this paragraph shall be
construed as prohibiting the Secretary of the Treasury
from processing merchandise that is informally entered
or released at any centralized hub facility or express
consignment carrier facility during the normal
operating hours of the Customs Service, subject to
reimbursement and payment under subparagraph (A).
(ii) The term ``small airport or other facility''
means any airport or facility to which section 236 of
the Trade and Tariff Act of 1984 applies, if more than
25,000 informal entries were cleared through such
airport or facility during the preceding fiscal year.
(D)(i) With respect to the processing of items that
are sent to the United States through the international
postal network by ``Inbound Express Mail service'' or
``Inbound EMS'' (as that service is described in the
mail classification schedule referred to in section
3631 of title 39, United States Code), the following
payments are required:
(I) $1 per Inbound EMS item.
(II) If an Inbound EMS item is formally
entered, the fee provided for under subsection
(a)(9), if applicable.
(ii) Notwithstanding section 451 of the Tariff Act of
1930 (19 U.S.C. 1451), the payments required by clause
(i), as allocated pursuant to clause (iii)(I), shall be
the only payments required for reimbursement of U.S.
Customs and Border Protection for customs services
provided in connection with the processing of an
Inbound EMS item.
(iii)(I) The payments required by clause (i)(I) shall
be allocated as follows:
(aa) 50 percent of the amount of the payments
shall be paid on a quarterly basis by the
United States Postal Service to the
Commissioner of U.S. Customs and Border
Protection in accordance with regulations
prescribed by the Secretary of the Treasury to
reimburse U.S. Customs and Border Protection
for customs services provided in connection
with the processing of Inbound EMS items.
(bb) 50 percent of the amount of the payments
shall be retained by the Postal Service to
reimburse the Postal Service for services
provided in connection with the customs
processing of Inbound EMS items.
(II) Payments received by U.S. Customs and Border
Protection under subclause (I)(aa) shall, in accordance
with section 524 of the Tariff Act of 1930 (19 U.S.C.
1524), be deposited in the Customs User Fee Account and
used to directly reimburse each appropriation for the
amount paid out of that appropriation for the costs
incurred in providing services to international mail
facilities. Amounts deposited in accordance with the
preceding sentence shall be available until expended
for the provision of such services.
(III) Payments retained by the Postal Service under
subclause (I)(bb) shall be used to directly reimburse
the Postal Service for the costs incurred in providing
services in connection with the customs processing of
Inbound EMS items.
(iv) Beginning in fiscal year 2021, the Secretary, in
consultation with the Postmaster General, may adjust,
not more frequently than once each fiscal year, the
amount described in clause (i)(I) to an amount
commensurate with the costs of services provided in
connection with the customs processing of Inbound EMS
items, consistent with the obligations of the United
States under international agreements.
(10)(A) The fee charged under subsection (a) (9) or (10) with
respect to goods of Canadian origin (as determined under
section 202 of the United States-Canada Free-Trade Agreement
Implementation Act of 1988) when the United States-Canada Free-
Trade Agreement is in force shall be in accordance with article
403 of that Agreement.
(B) No fee may be charged under paragraph (9) or (10) of
subsection (a) with respect to goods that qualify as
originating goods under section 202 of the United States-
Mexico-Canada Agreement Implementation Act or qualify for duty-
free treatment under Annex 6-A of the USMCA (as defined in
section 3 of that Act). Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(11) No fee may be charged under subsection (a) (9) or (10)
with respect to products of Israel if an exemption with respect
to the fee is implemented under section 112 of the Customs and
Trade Act of 1990.
(12) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Chile Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(13) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Singapore Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(14) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Australia Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(15) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the Dominican Republic-Central America-United
States Free Trade Agreement Implementation Act. Any service for
which an exemption from such fee is provided by reason of this
paragraph may not be funded with money contained in the Customs
User Fee Account.
(16) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Bahrain Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(17) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Oman Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(18) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Peru Trade Promotion Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(19) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Korea Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(20) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Colombia Trade Promotion
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this paragraph
may not be funded with money contained in the Customs User Fee
Account.
(21) No fee may be charged under subsection (a)(9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Panama Trade Promotion
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this paragraph
may not be funded with money contained in the Customs User Fee
Account.
(c) Definitions.--For purposes of this section--
(1) The term ``ferry'' means any vessel which is
being used--
(A) to provide transportation only between
places that are no more than 300 miles apart,
and
(B) to transport only--
(i) passengers, or
(ii) vehicles, or railroad cars,
which are being used, or have been
used, in transporting passengers or
goods.
(2) The term ``arrival'' means arrival at a port of
entry in the customs territory of the United States.
(3) The term ``customs territory of the United
States'' has the meaning given to such term by general
note 2 of the Harmonized Tariff Schedule of the United
States.
(4) The term ``customs broker permit'' means a permit
issued under section 641(c) of the Tariff Act of 1930
(19 U.S.C. 1641(c)).
(5) The term ``barge or other bulk carrier'' means
any vessel which--
(A) is not self-propelled, or
(B) transports fungible goods that are not
packaged in any form.
(d) Collection.--(1) Each person that issues a document or
ticket to an individual for transportation by a commercial
vessel or commercial aircraft into the customs territory of the
United States shall--
(A) collect from that individual the fee charged
under subsection (a)(5) at the time the document or
ticket is issued; and
(B) separately identify on that document or ticket
the fee charged under subsection (a)(5) as a Federal
inspection fee.
(2) If--
(A) a document or ticket for transportation of a
passenger into the customs territory of the United
States is issued in a foreign country; and
(B) the fee charged under subsection (a)(5) is not
collected at the time such document or ticket is
issued;
the person providing transportation to such passenger shall
collect such fee at the time such passenger departs from the
customs territory of the United States and shall provide such
passenger a receipt for the payment of such fee.
(3) The person who collects fees under paragraph (1) or (2)
shall remit those fees to the Secretary of the Treasury at any
time before the date that is 31 days after the close of the
calendar quarter in which the fees are collected.
(4)(A) Notice of the date on which payment of the fee imposed
by subsection (a)(7) is due shall be published by the Secretary
of the Treasury in the Federal Register by no later than the
date that is 60 days before such due date.
(B) A customs broker permit may be revoked or suspended for
nonpayment of the fee imposed by subsection (a)(7) only if
notice of the date on which payment of such fee is due was
published in the Federal Register at least 60 days before such
due date.
(C) The customs broker's license issued under section 641(b)
of the Tariff Act of 1930 (19 U.S.C. 1641(b)) may not be
revoked or suspended merely by reason of nonpayment of the fee
imposed under subsection (a)(7).
(e) Provision of Customs Services.--
(1)(A) Notwithstanding section 451 of the Tariff Act of 1930
(19 U.S.C. 1451) or any other provision of law (other than
subparagraph (B) and paragraph (2)), the customs services
required to be provided to passengers upon arrival in the
United States shall be adequately provided in connection with
scheduled airline flights at customs serviced airports when
needed and at no cost (other than the fees imposed under
subsection (a)) to airlines and airline passengers.
(B)(i) An appropriate officer of U.S. Customs and Border
Protection may assign a sufficient number of employees of U.S.
Customs and Border Protection (if available) to perform
services described in clause (ii) for a charter air carrier (as
defined in section 40102 of title 49, United States Code) for a
charter flight arriving after normal operating hours at an
airport that is an established port of entry serviced by U.S.
Customs and Border Protection, notwithstanding that overtime
funds for those services are not available, if the charter air
carrier--
(I) not later than 4 hours before the flight arrives,
specifically requests that such services be provided;
and
(II) pays any overtime fees incurred in connection
with such services.
(ii) Services described in this clause are customs services
for passengers and their baggage or any other similar service
that could lawfully be performed during regular hours of
operation.
(2)(A) This subsection shall not apply with respect to any
airport to which section 236 of the Trade and Tariff Act of
1984 (19 U.S.C. 58b) applies.
(B) Subparagraph (C) of paragraph (6) shall not apply with
respect to any foreign trade zone or subzone that is located
at, or in the vicinity of, an airport to which section 236 of
the Trade and Tariff Act of 1984 applies.
(3) Notwithstanding section 451 of the Tariff Act of 1930 (19
U.S.C. 1451) or any other provision of law--
(A) the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled
airline flights when needed at places located outside
the customs territory of the United States at which a
customs officer is stationed for the purpose of
providing such customs services, and
(B) other than the fees imposed under subsection (a),
the airlines and airline passengers shall not be
required to reimburse the Secretary of the Treasury for
the costs of providing overtime customs inspectional
services at such places.
(4) Notwithstanding any other provision of law, all customs
services (including, but not limited to, normal and overtime
clearance and preclearance services) shall be adequately
provided, when requested, for--
(A) the clearance of any commercial vessel, vehicle,
or aircraft or its passengers, crew, stores, material,
or cargo arriving, departing, or transiting the United
States;
(B) the preclearance at any customs facility outside
the United States of any commercial vessel, vehicle or
aircraft or its passengers, crew, stores, material, or
cargo; and
(C) the inspection or release of commercial cargo or
other commercial shipments being entered into, or
withdrawn from, the customs territory of the United
States.
(5) For purposes of this subsection, customs services shall
be treated as being ``adequately provided'' if such of those
services that are necessary to meet the needs of parties
subject to customs inspection are provided in a timely manner
taking into account factors such as--
(A) the unavoidability of weather, mechanical, and
other delays;
(B) the necessity for prompt and efficient passenger
and baggage clearance;
(C) the perishability of cargo;
(D) the desirability or unavoidability of late night
and early morning arrivals from various time zones;
(E) the availability (in accordance with regulations
prescribed under subsection (g)(2)) of customs
personnel and resources; and
(F) the need for specific enforcement checks.
(6) Notwithstanding any other provision of law except
paragraph (2), during any period when fees are authorized under
subsection (a), no charges, other than such fees, may be
collected--
(A) for any--
(i) cargo inspection, clearance, or other
customs activity, expense, or service performed
(regardless whether performed outside of normal
business hours on an overtime basis), or
(ii) customs personnel provided,
in connection with the arrival or departure of any
commercial vessel, vehicle, or aircraft, or its
passengers, crew, stores, material, or cargo, in the
United States;
(B) for any preclearance or other customs activity,
expense, or service performed, and any customs
personnel provided, outside the United States in
connection with the departure of any commercial vessel,
vehicle, or aircraft, or its passengers, crew, stores,
material, or cargo, for the United States; or
(C) in connection with--
(i) the activation or operation (including
Customs Service supervision) of any foreign
trade zone or subzone established under the Act
of June 18, 1934 (commonly known as the Foreign
Trade Zones Act, 19 U.S.C. 81a et seq.), or
(ii) the designation or operation (including
Customs Service supervision) of any bonded
warehouse under section 555 of the Tariff Act
of 1930 (19 U.S.C. 1555).
(f) Disposition of Fees.--(1) There is established in the
general fund of the Treasury a separate account which shall be
known as the ``Customs User Fee Account''. Notwithstanding
section 524 of the Tariff Act of 1930 (19 U.S.C. 1524), there
shall be deposited as offsetting receipts into the Customs User
Fee Account all fees collected under subsection (a) except--
(A) the portion of such fees that is required under
paragraph (3) for the direct reimbursement of
appropriations, and
(B) amounts deposited into the Customs Commercial and
Homeland Security Automation Account under paragraph
(4).
(2) Except as otherwise provided in this subsection, all
funds in the Customs User Fee Account shall be available, to
the extent provided for in appropriations Acts, to pay the
costs (other than costs for which direct reimbursement under
paragraph (3) is required) incurred by the United States
Customs Service in conducting customs revenue functions as
defined in section 415 of the Homeland Security Act of 2002
(other than functions performed by the Office of International
Affairs referred to in section 415(8) of that Act), and for
automation (including the Automation Commercial Environment
computer system), and for no other purpose. To the extent that
funds in the Customs User Fee Account are insufficient to pay
the costs of such customs revenue functions, customs duties in
an amount equal to the amount of such insufficiency shall be
available, to the extent provided for in appropriations Acts,
to pay the costs of such customs revenue functions in the
amount of such insufficiency, and shall be available for no
other purpose. The provisions of the first and second sentences
of this paragraph specifying the purposes for which amounts in
the Customs User Fee Account may be made available shall not be
superseded except by a provision of law which specifically
modifies or supersedes such provisions. So long as there is a
surplus of funds in the Customs User Fee Account, the Secretary
of the Treasury may not reduce personnel staffing levels for
providing commercial clearance and preclearance services.
(3)(A) The Secretary of the Treasury, in accordance with
section 524 of the Tariff Act of 1930 and subject to
subparagraph (B), shall directly reimburse, from the fees
collected under subsection (a) (other than the fees under
subsection (a) (9) and (10) and the excess fees determined by
the Secretary under paragraph (4)), each appropriation for the
amount paid out of that appropriation for the costs incurred by
the Secretary--
(i) in--
(I) paying overtime compensation under
section 5(a) of the Act of February 13, 1911,
(II) paying premium pay under section 5(b) of
the Act of February 13, 1911, but the amount
for which reimbursement may be made under this
subclause may not, for any fiscal year, exceed
the difference between the total cost of all
the premium pay for such year calculated under
section 5(b) and the cost of the night and
holiday premium pay that the Customs Service
would have incurred for the same inspectional
work on the day before the effective date of
section 13813 of the Omnibus Budget
Reconciliation Act of 1993,
(III) paying agency contributions to the
Civil Service Retirement and Disability Fund to
match deductions from the overtime compensation
paid under subclause (I),
(IV) providing all preclearance services for
which the recipients of such services are not
required to reimburse the Secretary of the
Treasury, and
(V) paying foreign language proficiency
awards under section 13812(b) of the Omnibus
Budget Reconciliation Act of 1993,
(ii) to the extent funds remain available after
making reimbursements under clause (i), in providing
salaries for full-time and part-time inspectional
personnel and equipment that enhance customs services
for those persons or entities that are required to pay
fees under paragraphs (1) through (8) of subsection (a)
(distributed on a basis proportionate to the fees
collected under paragraphs (1) through (8) of
subsection (a), and
(iii) to the extent funds remain available after
making reimbursements under clause (ii), in providing
salaries for up to 50 full-time equivalent inspectional
positions to provide preclearance services.
The transfer of funds required under subparagraph (C)(iii) has
priority over reimbursements under this subparagraph to carry
out subclauses (II), (III), (IV), and (V) of clause (i). Funds
described in clause (ii) shall only be available to reimburse
costs in excess of the highest amount appropriated for such
costs during the period beginning with fiscal year 1990 and
ending with the current fiscal year.
(B) Reimbursement of appropriations under this paragraph--
(i) shall be subject to apportionment or similar
administrative practices;
(ii) shall be made at least quarterly; and
(iii) to the extent necessary, may be made on the
basis of estimates made by the Secretary of the
Treasury and adjustments shall be made in subsequent
reimbursements to the extent that the estimates were in
excess of, or less than, the amounts required to be
reimbursed.
(C)(i) For fiscal year 1991 and subsequent fiscal years, the
amount required to reimburse costs described in subparagraph
(A)(i) shall be projected from actual requirements, and only
the excess of collections over such projected costs for such
fiscal year shall be used as provided in subparagraph (A)(ii).
(ii) The excess of collections over inspectional overtime and
preclearance costs (under subparagraph (A)(i)) reimbursed for
fiscal years 1989 and 1990 shall be available in fiscal year
1991 and subsequent fiscal years for the purposes described in
subparagraph (A)(ii), except that $30,000,000 of such excess
shall remain without fiscal year limitation in a contingency
fund and, in any fiscal year in which receipts are insufficient
to cover the costs described in subparagraph (A) (i) and (ii),
shall be used for--
(I) the costs of providing the services described in
subparagraph (A)(i), and
(II) after the costs described in subclause (I) are
paid, the costs of providing the personnel and
equipment described in subparagraph (A)(ii) at the
preceding fiscal year level.
(iii) For each fiscal year, the Secretary of the Treasury
shall calculate the difference between--
(I) the estimated cost for overtime compensation that
would have been incurred during that fiscal year for
inspectional services if section 5 of the Act of
February 13, 1911 (19 U.S.C. 261 and 267), as in effect
before the enactment of section 13811 of the Omnibus
Budget Reconciliation Act of 1993, had governed such
costs, and
(II) the actual cost for overtime compensation,
premium pay, and agency retirement contributions that
is incurred during that fiscal year in regard to
inspectional services under section 5 of the Act of
February 13, 1911, as amended by section 13811 of the
Omnibus Budget Reconciliation Act of 1993, and under
section 8331(3) of title 5, United States Code, as
amended by section 13812(a)(1) of such Act of 1993,
plus the actual cost that is incurred during that
fiscal year for foreign language proficiency awards
under section 13812(b) of such Act of 1993,
and shall transfer from the Customs User Fee Account to the
General Fund of the Treasury an amount equal to the difference
calculated under this clause, or $18,000,000, whichever amount
is less. Transfers shall be made under this clause at least
quarterly and on the basis of estimates to the same extent as
are reimbursements under subparagraph (B)(iii).
(D) Nothing in this paragraph shall be construed to preclude
the use of appropriated funds, from sources other than the fees
collected under subsection (a), to pay the costs set forth in
clauses (i), (ii), and (iii) of subparagraph (A).
(4)(A) There is created within the general fund of the
Treasury a separate account that shall be known as the
``Customs Commercial and Homeland Security Automation
Account''. In each of fiscal years 2003, 2004, and 2005 there
shall be deposited into the Account from fees collected under
subsection (a)(9)(A), $350,000,000.
(B) There is authorized to be appropriated from the Account
in fiscal years 2016 through 2018not less than $153,736,000to
complete the development and implementation, establishment, and
implementation of the Automated Commercial Environment computer
system for the processing of merchandise that is entered or
released and for other purposes related to the functions of the
Department of Homeland Security. Amounts appropriated pursuant
to this subparagraph are authorized to remain available until
expended.
(C) In adjusting the fee imposed by subsection (a)(9)(A) for
fiscal year 2006, the Secretary of the Treasury shall reduce
the amount estimated to be collected in fiscal year 2006 by the
amount by which total fees deposited to the Account during
fiscal years 2003, 2004, and 2005 exceed total appropriations
from that Account.
(5) Of the amounts collected in fiscal year 1999 under
paragraphs (9) and (10) of subsection (a), $50,000,000 shall be
available to the Customs Service, subject to appropriations
Acts, for automated commercial systems. Amounts made available
under this paragraph shall remain available until expended.
(g) Regulations and Enforcement.--(1) The Secretary of the
Treasury may prescribe such rules and regulations as may be
necessary to carry out the provisions of this section.
Regulations issued by the Secretary of the Treasury under this
subsection with respect to the collection of the fees charged
under subsection (a)(5) and the remittance of such fees to the
Treasury of the United States shall be consistent with the
regulations issued by the Secretary of the Treasury for the
collection and remittance of the taxes imposed by subchapter C
of chapter 33 of the Internal Revenue Code of 1954, but only to
the extent the regulations issued with respect to such taxes do
not conflict with the provisions of this section.
(2) Except to the extent otherwise provided in regulations,
all administrative and enforcement provisions of customs laws
and regulations, other than those laws and regulations relating
to drawback, shall apply with respect to any fee prescribed
under subsection (a) of this section, and with respect to
persons liable therefor, as if such fee is a customs duty. For
purposes of the preceding sentence, any penalty expressed in
terms of a relationship to the amount of the duty shall be
treated as not less than the amount which bears a similar
relationship to the amount of the fee assessed. For purposes of
determining the jurisdiction of any court of the United States
or any agency of the United States, any fee prescribed under
subsection (a) of this section shall be treated as if such fee
is a customs duty.
(h) Conforming Amendments.--(1) Subsection (i) of section 305
of the Rail Passenger Service Act (45 U.S.C. 545(i)) is amended
by striking out the last sentence thereof.
(2) Subsection (e) of section 53 of the Airport and Airway
Development Act of 1970 (49 U.S.C. 1741(e)) is repealed.
(i) Effect on Other Authority.--Except with respect to
customs services for which fees are imposed under subsection
(a), nothing in this section shall be construed as affecting
the authority of the Secretary of the Treasury to charge fees
under section 214(b) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 58a).
(j) Effective Dates.--(1) Except as otherwise provided in
this subsection, the provisions of this section, and the
amendments and repeals made by this section, shall apply with
respect to customs services rendered after the date that is 90
days after the date of enactment of this Act.
(2) Fees may be charged under subsection (a)(5) only with
respect to customs services rendered in regard to arriving
passengers using transportation for which documents or tickets
were issued after the date that is 90 days after such date of
enactment.
(3)(A) Fees may not be charged under paragraphs (9) and (10)
of subsection (a) after [September 30, 2031] September 30,
2033.
(B)(i) Subject to clause (ii), Fees may not be charged under
paragraphs (1) through (8) of subsection (a) after [September
30, 2031] September 30, 2033.
(ii) In fiscal year 2006 and in each succeeding fiscal year
for which fees under paragraphs (1) through (8) of subsection
(a) are authorized--
(I) the Secretary of the Treasury shall charge fees
under each such paragraph in amounts that are
reasonably related to the costs of providing customs
services in connection with the activity or item for
which the fee is charged under such paragraph, except
that in no case may the fee charged under any such
paragraph exceed by more than 10 percent the amount
otherwise prescribed by such paragraph;
(II) the amount of fees collected under such
paragraphs may not exceed, in the aggregate, the
amounts paid in that fiscal year for the costs
described in subsection (f)(3)(A) incurred in providing
customs services in connection with the activity or
item for which the fees are charged under such
paragraphs;
(III) a fee may not be collected under any such
paragraph except to the extent such fee will be
expended to pay the costs described in subsection
(f)(3)(A) incurred in providing customs services in
connection with the activity or item for which the fee
is charged under such paragraph; and
(IV) any fee collected under any such paragraph shall
be available for expenditure only to pay the costs
described in subsection (f)(3)(A) incurred in providing
customs services in connection with the activity or
item for which the fee is charged under such paragraph.
(k) Advisory Committee.--The Commissioner of Customs shall
establish an advisory committee whose membership shall consist
of representatives from the airline, cruise ship, and other
transportation industries who may be subject to fees under
subsection (a). The advisory committee shall not be subject to
termination under section 1013 of title 5, United States Code.
The advisory committee shall meet on a periodic basis and shall
advise the Commissioner on issues related to the performance of
the inspectional services of the United States Customs Service.
Such advice shall include, but not be limited to, such issues
as the time periods during which such services should be
performed, the proper number and deployment of inspection
officers, the level of fees, and the appropriateness of any
proposed fee. The Commissioner shall give consideration to the
views of the advisory committee in the exercise of his or her
duties.
(l) Adjustment of Fees for Inflation.--
(1) In general.--The Secretary of the Treasury shall
adjust the fees established under subsection (a), and
the limitations on such fees under paragraphs (2), (3),
(5), (6), (8), and (9) of subsection (b), on April 1,
2016, and at the beginning of each fiscal year
thereafter, to reflect the percentage (if any) of the
increase in the average of the Consumer Price Index for
the preceding 12-month period compared to the Consumer
Price Index for fiscal year 2014.
(2) Special rules for calculation of adjustment.--In
adjusting under paragraph (1) the amount of the fees
established under subsection (a), and the limitations
on such fees under paragraphs (2), (3), (5), (6), (8),
and (9) of subsection (b), the Secretary--
(A) shall round the amount of any increase in
the Consumer Price Index to the nearest dollar;
and
(B) may ignore any such increase of less than
1 percent.
(3) Consumer price index defined.--For purposes of
this subsection, the term ``Consumer Price Index''
means the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the
Department of Labor.
----------
UNITED STATES-KOREA FREE TRADE AGREEMENT IMPLEMENTATION ACT
* * * * * * *
TITLE V--OFFSETS
* * * * * * *
SEC. 503. RATE FOR MERCHANDISE PROCESSING FEES.
For the period beginning on December 1, 2015, and ending on
[September 30, 2031] September 30, 2033, section 13031(a)(9) of
the Consolidated Omnibus Budget Reconciliation Act of 1985 (19
U.S.C. 58c(a)(9)) shall be applied and administered--
(1) in subparagraph (A), by substituting ``0.3464''
for ``0.21''; and
(2) in subparagraph (B)(i), by substituting
``0.3464'' for ``0.21''.
* * * * * * *
VII. DISSENTING VIEWS
Committee Democrats support reauthorizing the Generalized
System of Preferences (GSP) program. GSP, however, is not the
only trade program that has expired: Trade Adjustment
Assistance (TAA), a program that provides assistance to workers
who are adversely affected by foreign trade, expired on July 1,
2022. Committee Democrats take the view that a reauthorization
of GSP, a non-reciprocal program that provides tariff cuts to
thousands of products from foreign countries, must be paired
with a reauthorization of TAA. The House passed H.R. 4521, the
America COMPETES Act on February 4, 2022, which included a
reauthorization of both GSP and TAA.
During the markup, Committee Republicans made numerous
assertions about alleged good faith attempts at striking a
bipartisan deal with Committee Democrats. However, Republicans
refused to add TAA. TAA is a vital program for workers hurt by
trade, providing resources and training opportunities.
Currently, over 102,000 workers who may be eligible for TAA are
waiting for Congress to reauthorize the program. Accordingly,
Rep. Kildee (D-MI) offered an amendment that would have
reauthorized TAA, modernized its programs, expanded
eligibility, and provided significant new funding streams into
the TAA programs. Committee Democrats present at the markup
unanimously supported the amendment.
Committee Democrats also support updating the GSP program's
antiquated labor criteria. Updating both the mandatory and
discretionary labor criteria would help address some of the
worst labor violations in supply chains that benefit from GSP,
and it would disincentivize some of the most exploitative labor
practices such as violence against workers--including gender-
based violence. Strengthened labor criteria would also promote
more equitable and inclusive economic development in GSP
countries and complement domestic efforts to ensure trade
benefits all communities, particularly the most marginalized
groups and workers.
The AINS to H.R. 7986 fails to appropriately strengthen
GSP's labor criteria. It did not update GSP's mandatory labor
criterion, a fatal flaw that impedes our ability to uplift
workers in GSP countries. Accordingly, Rep. Sanchez (D-CA)
offered an amendment that would have updated the mandatory
labor criterion by requiring that GSP countries ``effectively
afford'' workers' rights to workers in those countries.
Further, the AINS to H.R. 7986 failed to address violence
against workers. Rep. Sanchez's amendment would have updated
the definition of worker rights by including the elimination of
violence or threats of violence against workers, including
gender-based violence. Committee Democrats present at the
markup unanimously supported the amendment.
The AINS to H.R. 7986 also failed to adequately address the
environment. President Biden and Committee Democrats have led
the way on protecting the environment, raising standards, and
tackling the climate crisis. Updating the GSP program to
include meaningful and enforceable environmental criteria could
not be more urgent.
The mandatory environmental criterion in the AINS to H.R.
7986 included a massive enforcement loophole. As Mr. Doggett
(D-TX) noted during the markup, there should be no requirement
that violations of GSP's environmental eligibility criteria be
``sustained or recurring'' and shown to have occurred in a
manner ``affecting trade'' in order to be actionable. Mr.
Doggett pointed out that other GSP eligibility criteria do not
include similar loopholes. In response to Committee
Republicans, Rep. Doggett observed that the text of the
mandatory environmental criterion in the AINS to H.R. 7986 is
not the same as the text in Article 24.4 (Enforcement of
Environmental Laws) in the United States--Mexico--Canada
Agreement. Accordingly, Mr. Doggett offered an amendment that
would have added a strong and enforceable mandatory eligibility
criterion.
Further, the AINS to H.R. 7986 failed to include a
reference to environmental obligations related to public
health. Environmental pollutants can cause health problems like
respiratory diseases, heart disease, and some types of cancer.
Mr. Doggett's amendment would have required GSP countries to
fulfil their international environmental obligations related to
public health. Finally, the environmental obligations in the
AINS to H.R. 7986 only apply to a small number of international
agreements. Mr. Doggett's amendment would have fixed this by
requiring GSP countries to enforce all of their international
environmental obligations. Committee Democrats present at the
markup unanimously supported the amendment.
Committee Democrats present at the markup unanimously
opposed favorably reporting H.R. 7986, as amended, to the House
of Representatives.
Sincerely,
Richard E. Neal,
Ranking Member.
DISSENTING VIEWS
Like many on this Committee, I am encouraged that we are
advancing a bill to reauthorize the Generalized System of
Preferences and provide full retroactivity for beneficiary
countries.
However, I am deeply disappointed that we are using today's
markup to address only one of a suite of long-expired trade
programs.
I've put forward legislation to renew the Miscellaneous
Tariff Bill and exclude finished products, most of which come
from China. Like my de minimis proposal, that is a proposal
that is in fact tough on China.
And critically, as Mr. Neal points out, we aren't doing
anything about reauthorizing the Trade Adjustment Assistance
program that provides a vital lifeline to thousands of families
impacted by international trade and has created some of the
problems in terms of the backlash against trade.
Many of my Republican colleagues balk at the cost
associated with reauthorizing Trade Adjustment Assistance,
which goes to people in need, but are more than willing to
provide roughly $1 billion/year tariff break via GSP.
There is no reason we can't provide duty relief and address
workers' needs by reauthorizing Trade Adjustment Assistance.
We've done it before, we should do it again.
While I appreciate the spirit of the amendment in the
nature of a substitute in adding language related to labor and
the environment, there is still no mention of eliminating
gender-based violence in the workplace which we've documented
is a serious problem or recognizing the public health impacts
of environmental protection.
I am also concerned that we haven't studied the impacts of
the legislation.
Increasing the GSP Rule of Origin without addressing the
underlying calculation may not do anything to impact China's
access to the program at all and creating new requirements for
the President to terminate GSP beneficiary status may handicap
a President into never being able to remove a country even if
they are not meeting eligibility criteria.
For a bill that was changing up until less than 24 hours
before this markup, there are simply too many unknowns to feel
comfortable supporting this bill.
But I know this: putting forward a GSP renewal bill without
TAA is a nonstarter.
I still hope we can work together to refine your approach
to GSP and ensure we are supporting workers in the process.
Earl Blumenauer,
Member of Congress.
[all]