[Federal Register Volume 66, Number 60 (Wednesday, March 28, 2001)]
[Rules and Regulations]
[Pages 16854-16858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7603]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR PART 24

[T.D. 01-25]
RIN 1515-AC82


Amended Procedure for Refunds of Harbor Maintenance Fees Paid on 
Exports of Merchandise

AGENCY: Customs Service, Department of the Treasury.

ACTION: Interim regulation.

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SUMMARY: This document amends the Customs Regulations to provide a new 
procedure for requesting refunds of export harbor maintenance fees 
collected by Customs since 1987. The United States Supreme Court held 
these fees to be unconstitutional in 1998. Customs has received 
numerous requests for refunds from exporters who paid these export 
fees. The new procedure will simplify the refund process by relieving 
exporters from documentary requirements in most cases. This amendment 
is being made on an interim basis in order to expedite the process for 
exporters entitled to refunds of fees held unconstitutional and no 
longer required under the Customs Regulations.

DATES: The interim regulation is effective on March 28, 2001. Written 
comments must be received on or before April 27, 2001.

ADDRESSES: Written comments may be submitted to and inspected at the 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service, 1300 Pennsylvania Ave., NW., 3rd Floor, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT: Deborah Thompson, Accounts Receivable 
Branch, Accounting Services Division, (317) 298-1200 (ext. 4003).

SUPPLEMENTARY INFORMATION:

Background

    The Harbor Maintenance Fee (HMF) was created by the Water Resources 
Development Act of 1986 (Pub. L. 99-622; codified at 26 U.S.C. 4461 et 
seq.) (the Act) and is implemented by Sec. 24.24 of the Customs 
Regulations (19 CFR 24.24). Imposition of the HMF is intended to 
require those who benefit from the maintenance of U.S. ports and 
harbors to share in the cost of that maintenance. Pursuant to the Act 
and as implemented by the regulations, the HMF became effective on 
April 1, 1987.
    The HMF has been assessed on port use associated with imports, 
exports, foreign trade zone admissions, passengers, and movements of 
cargo between domestic ports. Currently, the fee is assessed based on 
0.125 percent of the value of commercial cargo loaded or unloaded at 
certain identified ports or, in the case of passengers, on the value of 
the actual charge paid for the transportation. In 1998, the U.S. 
Supreme Court held the fee unconstitutional as applied to exports 
(United States Shoe Corporation v. United States, 118 S. Ct. 1290, No. 
97-372 (March 31, 1998)). Subsequently, by a notice published in the 
Federal Register (63 FR 24209) on May 1, 1998, Customs announced that, 
as of April 25, 1998, the HMF for cargo loaded on board a vessel for 
export will no longer be collected. On July 31, 1998, Customs published 
in the Federal Register (63 FR 40822) an amendment to Sec. 24.24 of the 
Customs Regulations, removing the requirement that exporters loading 
cargo at ports subject to the HMF are liable for payment of the fee. 
Thus, currently, application of the HMF continues but only for imports, 
domestic shipments, foreign trade zone admissions, and passengers.
    On August 28, 1998, the U.S. Court of International Trade (CIT) 
ordered an immediate refund of undisputed export fee payments to 
exporters who had filed complaints with the court seeking recovery of 
these payments (United States Shoe Corp. v. United States, No. 94-11-
00668, slip op. 98-126 (C.I.T. Aug. 28, 1998)). The order applied to 
payments received by Customs within two years of an exporter's filing 
of a complaint with the court. The order required these exporters to 
file a claim with Customs (attaching a copy of the filed complaint) and 
required that Customs would: (1) Conduct an initial search of its 
database for all export fee payments subject to refund (made during the 
prescribed two-year period) that were received from the exporter; (2) 
notify the exporter of that amount; and (3) unless disputed by the 
exporter, submit a stipulated judgment to the court for the court to 
enter judgment and order Customs to issue refunds to the exporter in 
the determined amount. Again, this court-ordered procedure applied only 
to exporters who filed a complaint with the court. Accordingly, Customs 
issued refunds only to exporters who received judgments from the court. 
All refund claims made under the court-ordered procedure have been 
processed.
    Subsequently, on February 28, 2000, the U.S. Court of Appeals for 
the Federal Circuit, noting that the Customs Regulations do not impose 
a time limit on requests for refunds of the HMF (see current 19 CFR 
24.24(e)(4)), held that

[[Page 16855]]

there is no limitation on the period within which a refund request may 
be filed pursuant to Customs Regulations (Swisher International, Inc. 
v. United States, 205 F. 3d 1358 (No. 99-1277 C.A.F.C. February 28, 
2000), cert. denied). This ruling allowed exporters who received 
refunds under the procedure imposed by the court to file administrative 
requests (processed according to the Customs Regulations without filing 
a complaint in the court) for additional export fee refunds going back 
to July of 1987. Those exporters who never filed a complaint under the 
court procedure were also free to file administratively for export fee 
refunds.

Current Administrative Procedure for Refund of Export Harbor 
Maintenance Fees

    The administrative procedure for requesting refunds of export fee 
(and other HMF) payments is provided for under Sec. 24.24(e)(4) of the 
Customs Regulations (19 CFR 24.24(e)(4)). Under the regulation, 
exporters are required to file with Customs a request for a refund on a 
Harbor Maintenance Fee Amended Quarterly Summary Report (Customs Form 
(CF) 350), accompanied by copies of any relevant Harbor Maintenance Fee 
Quarterly Summary Reports (CF 349) representing proof of payment of the 
export fee. Prior to May of 1991, when the Customs Regulations were 
amended to require submission of the CF 349 with payment of the fee, 
the regulations required submission of an Export Vessel Movement 
Summary Sheet (EVM Summary Sheet) or, where Automated Summary Monthly 
Shipper's Export Declarations were filed, a letter (SED letter) 
containing the exporter's identity, its employer identification number 
(EIN), the applicable Census Bureau reporting symbol, and the quarter 
for which the payment was being made. Many exporters, not having copies 
of these payment forms, have filed requests for documentation under the 
Freedom of Information Act (FOIA). Most of these FOIA requests have not 
yet been processed by Customs, as the volume of requests has had the 
effect of straining resources.

Amended Administrative Procedure for Refund of Export Harbor 
Maintenance Fees

    To proceed with the issuance of export fee refunds, and to simplify 
the process and improve its effectiveness, this document amends the 
Customs Regulations to provide a new procedure for exporters requesting 
a refund of export fees.
    The procedure set forth in the amended regulation is designed to 
allow a refund request without submission of documentary proof of 
payment in most cases. Because Customs possesses copies of original 
payment forms (CF 349s, EVM Summary Sheets, or SED letters) from July 
1, 1990, through the date collection of the export fee ceased in 1998, 
submission of supporting documentation will not be required to obtain 
refunds of export fee payments made on or after July 1, 1990. However, 
Customs does not possess these documents for export fee payments made 
prior to that date. Accordingly, for refund requests relating to export 
fee payments made prior to July 1, 1990, the exporter must submit proof 
of payment with the letter of request, that is, relevant copies of EVM 
Summary Sheets or SED letters provided for under the then current 
regulations.
    In making this amendment to the regulations, Customs recommends 
that exporters who have filed FOIA requests for copies of payment forms 
withdraw those requests. In most cases, payment forms sought through a 
FOIA request seeking documents pertaining to payments made on or after 
July 1, 1990, are not necessary to obtain a refund. In addition, 
because Customs does not possess payment forms relating to export fees 
paid prior to July 1, 1990, a FOIA request relative to payments made 
during this period would be fruitless. If the FOIA requests are 
withdrawn, Customs will be able to more effectively expend its time and 
resources on the refunding of export fees owed rather than on the 
processing of numerous FOIA requests. For the same reasons, Customs 
recommends that exporters seeking a refund of export harbor maintenance 
fees who have not filed FOIA requests refrain from doing so.
    On December 15, 2000, Customs published a Notice of Proposed 
Rulemaking (NPRM) in the Federal Register (65 FR 78430) that proposed, 
in the future, in the interest of administrative efficiency, that 
persons requesting refunds of harbor maintenance fees paid on a 
quarterly schedule have one year from the date of payment to file for 
refunds. This would apply to quarterly payments relating to domestic 
shipments, imported merchandise admitted into a foreign trade zone, 
passengers, and, though no longer collected, quarterly payments made on 
export fees. The one-year time limitation was proposed to commence on 
the date the quarterly fee was paid to Customs, except for fees paid on 
the unloading of imported merchandise admitted into a foreign trade 
zone and subsequently withdrawn from the zone for any purpose specified 
in 19 U.S.C. 1309. For these latter fees, the one-year time limitation 
was proposed to commence on the date merchandise was withdrawn from the 
foreign trade zone. If this amendment proposing a time limitation on 
filing refund requests is adopted as a final rule, refund requests for 
export fee payments (and for any other quarterly harbor maintenance fee 
payment older than one year) will be required to be received on or 
before the effective date of that final rule document, which will be 30 
days from the date of its publication in the Federal Register.
    Already-filed export fee refund requests. An exporter who has 
already filed a request for a refund of export fees need not file 
again. Customs will treat the already filed request as one made under 
the amended procedure set forth in this document. Customs will process 
these requests in the order received, so that these filers will not be 
disadvantaged.
    Requesting and processing refunds under the amended regulation. The 
procedure for exporters requesting and Customs processing export fee 
refunds as set forth in the amended regulation includes the following 
steps and features:
    1. The exporter requests a refund by filing a letter with Customs 
requesting a refund of export fee payments collected from that exporter 
(or collected from a freight forwarder or other agent who paid the fee 
on the exporter's behalf) by Customs. For payments made prior to July 
1, 1990, the letter must identify specific payments claimed and be 
accompanied by supporting documentation for each payment (a copy of the 
then required EVM Summary Sheet or its alternative document, an SED 
letter). For payments made on or after July 1, 1990, the letter must 
specify the quarters for which a refund is sought and include the 
following information: the exporter's name, address, and EIN; if 
payments of the fee were made by a freight forwarder or other agent on 
the exporter's behalf, the name and EIN of the freight forwarder or 
other agent; and the name, telephone number, and facsimile number of a 
contact person to answer questions. Supporting documentation need not 
be submitted for payments made during this period.
    2. If the NPRM of December 15, 2000, is adopted as a final rule, 
the request for export fee refunds must be received by Customs by the 
effective date of that final rule document, 30 days after the date of 
its publication in the Federal Register. Requests for refunds filed 
after that date relative to quarterly harbor maintenance fee payments 
that are more

[[Page 16856]]

than a year old will be rejected as untimely.
    3. Upon receipt of a timely filed letter of request for a refund, 
Customs, for payments made prior to July 1, 1990, will evaluate the 
documentation submitted and issue a refund if warranted. If the request 
lacks documentation or the documentation is insufficient, the request 
will be rejected, in which case the exporter will be given an 
additional 120 days to submit documentation/additional documentation 
for Customs consideration and final decision. (For purposes of filing a 
protest under 19 U.S.C. 1514 (within 90 days of a covered Customs 
decision), Customs initial decision will be final for exporters not 
filing documentation during the 120-day period.)
    4. For payments made on or after July 1, 1990, Customs will perform 
a search of its records to locate export fee payment information 
relative to the exporter filing the refund request (and any freight 
forwarder or other agent named by the exporter as having made payments 
on the exporter's behalf) and the quarters identified in the letter of 
request. Customs will then issue a report to the exporter or its agent 
containing the results of the search. The report is entitled the 
``Harbor Maintenance Tax Payment Report and Certification'' (the 
Report/Certification).
    5. If the exporter agrees with the payment information in the 
Report/Certification, the exporter must sign the Report/Certification 
and return it to Customs with a letter providing an address for receipt 
of the refund. The Report/Certification must be signed by an officer of 
the company duly authorized to bind the company, or an agent (such as a 
broker or freight forwarder) authorized to sign a document of this kind 
under a properly executed power of attorney or a letter signed by the 
exporter. Upon receipt of the signed Report/Certification, Customs will 
issue the refund. If the exporter disagrees with any payment listed on 
the Report/Certification, or with the omission from the list of a 
payment it believes was made, the exporter must submit supplementary 
documentation (a copy of a relevant CF 349, EVM Summary Sheet, or SED 
letter) as proof of payment. Customs will conduct a second review and 
notify the exporter (or its agent) of the results. Depending on the 
results of the review, Customs will either confirm the disputed payment 
and issue a revised Report/Certification or notify the exporter that 
the disputed payment cannot be confirmed. In the latter instance, the 
Report/Certification will not be revised. To obtain the refund, the 
exporter must sign and return the (initial or revised) Report/
Certification to Customs for its issuance of the refund.
    6. The exporter's signature on the Report/Certification (or revised 
Report/Certification) signifies the exporter's concurrence with Customs 
determination of the full amount owed and constitutes the exporter's 
agreement that payment by Customs of the determined amount is in full 
accord and satisfaction of export fee claims against the Government. By 
its certification, the exporter will also release, waive, and abandon 
all claims against the Government, its officers, agents, and assigns 
for costs, attorney fees, expenses, compensatory damages, and exemplary 
damages arising out of all HMF export payments other than any payments 
Customs has already processed under the court-ordered procedure (for 
which release, etc., were already agreed to).
    7. Upon receipt of a signed Report/Certification, the Government 
releases, waives, and abandons all claims other than fraud that it may 
have against the exporter or its officers, agents, or employees arising 
out of all HMF export payments other than those already processed under 
the court-ordered procedure (for which release, etc., were already 
agreed to).
    8. As litigation concerning payment of interest on refunds 
continues, the exporter's claim to interest is not released, waived, or 
abandoned. However, as of the date of publication of this document, 
interest is not applicable to these refunds.
    Customs emphasizes that the procedure for refunds set forth in 
Sec. 24.24(e)(4)(ii) of the amended regulation applies only to payments 
of export fees that were held unconstitutional by the U.S. Supreme 
Court. The procedure for refund requests for any other harbor 
maintenance fees remains unchanged and is provided for in 
Sec. 24.24(e)(4)(i) of the amended regulation.

Comments

    Before adopting the interim regulation as a final rule, 
consideration will be given to any written comments timely submitted to 
Customs including comments on the clarity of the interim regulation and 
how it may be made easier to understand. Comments submitted will be 
available for public inspection in accordance with the Freedom of 
Information Act (5 U.S.C. 552), Sec. 1.4 of the Treasury Department 
Regulations (31 CFR 1.4), and Sec. 103.11(b) of the Customs Regulations 
(19 CFR 103.11(b)) on regular business days between the hours of 9 a.m. 
and 4:30 p.m. at the Regulations Branch, Office of Regulations and 
Rulings, U.S. Customs Service, 1300 Pennsylvania Avenue, NW., 3rd 
Floor, Washington, DC.

Inapplicability of Notice and Delayed Effective Date Provisions

    Pursuant to the provisions of 5 U.S.C. 553(b)(B), Customs has 
determined that notice and public procedures for this regulation are 
unnecessary. The regulatory change in this document relieves certain 
exporters filing for refunds of export harbor maintenance fees from the 
restriction of having to file documentation representing proof of 
payment before receiving a refund. For the same reason, pursuant to 5 
U.S.C. 553(d)(1) and (3), Customs is dispensing with a delayed 
effective date. However, before adopting final regulations, 
consideration will be given to all written comments timely submitted.

Executive Order 12866

    This document does not meet the criteria for a ''significant 
regulatory action'' as specified in E.O. 12866.

Paperwork Reduction Act

    The collection of information contained in the interim regulation 
has previously been reviewed and approved by the Office of Management 
and Budget (OMB) under OMB control number 1515-0158. Additional 
information requested in the interim regulation relates to usual and 
customary business information/records. This rule does not propose any 
substantive changes to the existing approved information collection.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required for this 
interim regulation, the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.) do not apply.

Drafting Information

    The principal author of this document was Bill Conrad, Office of 
Regulations and Rulings, U.S. Customs Service. However, personnel from 
other offices contributed in its development.

List of Subjects in 19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Fees, Financial 
and accounting procedures, Imports, Taxes, User fees.

Amendments to the Regulations

    For the reasons stated in the preamble, part 24 of the Customs

[[Page 16857]]

Regulations (19 CFR parts 24) is amended as follows:

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

    1. The authority citation for part 24 continues to read in part as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 22, Harmonized Tariff Schedule of the United States), 1505, 
1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 9701.
* * * * *

    2. Section 24.24 is amended by revising paragraph (e)(4) to read as 
follows:


Sec. 24.24  Harbor maintenance fee.

* * * * *
    (e) Collections-- * * *
    (4) Refund and supplemental payment.--(i) For fees paid on other 
than export movements. If a refund is requested or a supplemental 
payment is made relative to quarterly fee payments previously made 
regarding the loading or unloading of domestic cargo, the unloading of 
cargo destined for admission into a foreign trade zone, or the boarding 
or disembarking of passengers, the refund request or supplemental 
payment must be accompanied by a Harbor Maintenance Fee Amended 
Quarterly Summary Report, Customs Form 350, along with a copy of the 
Harbor Maintenance Fee Quarterly Summary Report, Customs Form 349, for 
the quarter(s) covering the refund requested or the supplemental 
payment being made. A supplemental payment should be mailed to: U.S. 
Customs Service, PO Box 70915, Chicago, Illinois 60673-0915. A refund 
request should be mailed to: U.S. Customs Service, HMT Refunds, 6026 
Lakeside Blvd., Indianapolis, IN, 26278. A request for a refund must 
specify the grounds for the refund. Refunds of fees regarding the 
unloading of imported cargo (except that admitted into a foreign trade 
zone) must be sought in accordance with the procedure for seeking a 
refund of ordinary duties.
    (ii) For fees paid on export movements. Customs will process refund 
requests relative to fee payments previously made regarding the loading 
of cargo for export as follows:
    (A) For export fee payments made prior to July 1, 1990, the 
exporter (the name that appears on the SED or equivalent documentation 
authorized under 15 CFR 30.39(b)) or its agent must submit a letter of 
request for a refund to the U.S. Customs Service, HMT Refunds, 6026 
Lakeside Blvd., Indianapolis, IN, 26278, specifying the grounds for the 
refund and identifying the specific payments made. The letter must be 
accompanied by proof of payment then required under the regulations 
relative to each payment claimed, a copy of the Export Vessel Movement 
Summary Sheet or, where an Automated Summary Monthly Shipper's Export 
Declaration was filed, a letter containing the exporter's 
identification, its employer identification number (EIN), the Census 
Bureau reporting symbol, and the quarter for which the payment was 
made. Upon receiving a letter of request for a refund, Customs will 
evaluate the supporting documentation submitted and issue the refund to 
the exporter or its agent if warranted. Interest is not applicable to 
these refunds. If the request lacks documentation or the documentation 
submitted is insufficient, the exporter's refund request will be 
denied, in which case the exporter will have an additional 120 days to 
submit documentation or additional documentation. If the documentation 
submitted is insufficient, Customs will deny the request.
    (B) For export fee payments made on or after July 1, 1990, the 
exporter or its agent must submit a letter of request for a refund (to 
the address set forth in paragraph (e)(4)(ii)(A) of this section) 
specifying the grounds for the refund, identifying the quarters for 
which a refund is sought, and containing the following additional 
information: the exporter's name, address, and employer identification 
number (EIN); the name and EIN of any freight forwarder or other agent 
that made export fee payments on the exporter's behalf; and a name, 
telephone number, and facsimile number of a contact person. If a refund 
request is filed by a freight forwarder or other agent on the 
exporter's behalf, the request must include a properly executed power 
of attorney and/or a letter signed by the exporter authorizing the 
representation. Refund requests for payments made on or after July 1, 
1990, need not be accompanied by supporting documentation. Upon receipt 
of the letter of request, Customs will search its records for export 
fee payments made by or on behalf of the requesting exporter during the 
quarters identified in the letter of request. Customs will then mail to 
the exporter or its agent a ``Harbor Maintenance Fee Payment Report and 
Certification'' (Report/Certification) containing the results of the 
search and a statement of the amount of refunds owed to the exporter, 
if any. If the exporter agrees with the information in the Report/
Certification, the exporter must sign the Report/Certification and 
submit it to Customs with a letter containing an address for mailing 
the refund. The Report/Certification must be signed by an officer of 
the company duly authorized to bind the company, or an agent (such as a 
broker or freight forwarder) authorized to sign the document under a 
properly executed power of attorney or a letter signed by an authorized 
officer of the company. Upon receipt of the signed Report/
Certification, Customs will issue the refund. If the exporter disagrees 
with the information in the Report/Certification, the exporter must 
submit a letter explaining its claim along with proof of payment, 
either a copy of a Harbor Maintenance Fee Quarterly Summary Report, 
Customs Form 349, for the quarter(s) covering the refund requested or, 
if applicable, a copy of an Export Vessel Movement Summary Sheet or, 
where an Automated Summary Monthly Shipper's Export Declaration was 
filed, a letter containing the exporter's identification, its employer 
identification number (EIN), the Census Bureau reporting symbol, and 
the quarter for which the payment was made. Upon receiving the letter 
and documentation, Customs will conduct a second review and will either 
confirm the exporter's claim and mail a revised Report/Certification to 
the exporter or its agent, or notify the exporter or its agent that 
confirmation cannot be made. In the latter instance, the Report/
Certification will not be revised. Upon receipt of a properly signed 
Report/Certification (initial or revised), Customs will issue the 
refund. Interest is not applicable to these refunds. The signed Report/
Certification received by Customs constitutes the exporter's agreement 
that Customs payment of the refund amount determined to be owed in the 
Report/Certification is in full accord and satisfaction of all export 
fee refund claims. The signed Report/Certification also represents the 
exporter's release, waiver, and abandonment of all claims against the 
Government, its officers, agents, and assigns for costs, attorney fees, 
expenses, compensatory damages, and exemplary damages. Upon receipt of 
the signed Report/Certification, Customs releases, waives, and abandons 
all claims other than fraud against the exporter, its officers, agents, 
or employees arising out of all export fee payments.
* * * * *


[[Page 16858]]


    Dated: March 6, 2001.
Charles W. Winwood,
Acting Commissioner of Customs.

Timothy E. Skud,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 01-7603 Filed 3-27-01; 8:45 am]
BILLING CODE 4820-02-P