FOR IMMEDIATE RELEASE, Contact: (202) 225-1721
April 21, 1998
No. TR-24
Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on a variety of issues relating to the U.S. Customs Service, including drug interdiction and passenger and merchandise processing issues. The hearing will take place on Thursday, April 30, 1998, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 11:00 a.m.
Oral testimony will be from both invited and public witnesses. Invited witnesses will include Sam Banks, Acting Commissioner of the U.S. Customs Service. Also, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee or for inclusion in the printed record of the hearing.
BACKGROUND:
Customs Drug Interdiction and Enforcement Efforts -- Operation Hard Line and Brass Ring: Operation Hard Line, initiated in February 1995, is the response of the Customs Service to problems of violence and drug smuggling along the Southern border of the United States. Hard Line emphasizes enhanced primary inspections, increased secondary inspections, more intensive cargo searches, installation of concrete barriers to manage traffic flow, and an increase in investigative support. Hard Line was designed to promote "strategic problem solving" by relying on experts at each port to develop and test creative new ways to prevent drug smuggling.
According to the U.S. Customs Service, their seizure amounts for cocaine have decreased by 12 percent overall during the past year. Operation Brass Ring is intended to reverse this trend. Established on February 1, 1998, Brass Ring is a multi-functional operation, designed to be an aggressive and unpredictable operation with the goal of dramatically and immediately increasing the amount of narcotics seized by the U.S. Customs Service. In addition, the Subcommittee is interested in receiving other legislative or administrative proposals from the Customs Service for improving their interdiction and enforcement efforts.
Fiscal Year 1999 Budget Request: The President's request for the U.S. Customs Service included $1,283 million for Commercial Operations and $733 million for drug and other enforcement activities. In addition, the Customs Air and Marine Interdiction Program requested $102 million in budget obligations.
Merchandise Processing Fees: Customs assesses a user fee known as the Merchandise Processing Fee (MPF) in the amount of 0.21 percent ad valorem for the processing of merchandise that is formally entered or released. The fee, set at a minimum of $21 and a maximum of $485 per entry, is intended to 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 the fee is collected. The President has proposed in the fiscal year 1999 budget to increase the fee to an ad valorem rate of 0.25 percent (not to exceed $575) for necessary expenses incurred by Customs for modernization of the automated commercial operations.
Redesigning and Modernizing the Merchandise Processing System: The Customs Modernization Act (Mod Act) was enacted as part of the North American Free Trade Agreement implementing legislation in December 1993. Through passage of this Act, the Congress provided the Customs Service with the necessary legal authorities to redesign its merchandise processing systems for the twenty first century. Specifically, the Act required Customs to develop a fully-automated commercial environment to replace the current Automated Commercial System. Customs now states that the development and implementation of this new system, the Automated Commercial Environment, and the infrastructure needed to run this system will cost approximately $797 million over the next seven years.
Another major feature of Customs' efforts to implement the Mod Act has been the recent redesign of the process of inspecting and controlling outbound cargo. Customs currently inspects less than one percent of all U.S. exports. The agency has recently sought to increase its effectiveness in interdicting illegal shipments of outbound currency, munitions, dual-use goods, chemical and hazardous materials, and stolen vehicles. The cornerstone of Customs' effort to redesign the outbound cargo process has been the development of an Automated Export System (AES).
Customs COBRA User Fees: The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (P.L. 99-272) established a schedule of seven passenger-related and conveyance user fees. The Tax Reform Act of 1986 (P.L. 99-514) added to this schedule, fees for processing barges and bulk carriers from Canada and Mexico. Under COBRA, user fee revenues pay for all Customs inspection overtime and all pre-clearance costs for which reimbursement was not required and excess pre-clearance costs. The Customs and Trade Act of 1990 (P.L. 101-382) amended COBRA: (1) to allow Customs to use any surplus revenues, after overtime and pre-clearance were funded, to hire inspectors, purchase equipment, and fund items related to inspection; (2) to distribute revenues in proportion to the amount contributed by each user fee category; and (3) to require that surplus-funded Customs inspectional positions facilitate passenger and conveyance processing and be used to enhance inspection services already provided.
The North American Free Trade Agreement Implementation Act (P.L. 103-182) increased the air- and sea-passenger processing fee from $5 to $6.50 for fiscal years 1994 through 1997 and removed the prior air- and sea-passenger processing user fee exemption for passengers arriving from Canada, Mexico, and the Caribbean. The fee was reverted to $5 and the exemption expired on September 30, 1997. With this increased funding provision, Customs filled an additional 77 positions to perform preclearance inspections and to inspect cruise vessels from these countries. Customs notified the Committee in October 1997 that it would have to phase out these positions and discontinue preclearance inspection services in the absence of new legislative funding authority. Public Law 105-150, enacted on December 16, 1997, authorized the use of customs user fees to maintain up to 50 inspectors through September 30, 1998, in Florida to process passengers aboard commercial vessels. On April 1, 1998, Chairman Crane introduced H.R. 3644, a bill to authorize the use of customs user fees to maintain up to 50 positions plus equipment to provide preclearance services at 11 locations in foreign countries.
Compensation System for Customs Officers: COBRA fees fund overtime and premium pay for Customs officers. The original overtime pay system for Customs inspectors was created by the Act of February 13, 1911, known as the "1911 Act." Section 13811 of the Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66), known as the Customs Officer Pay Reform amendments, amended the 1911 Act in an attempt to eliminate abuses and mismanagement of the prior system. The reforms were intended to limit overtime and premium pay for Customs inspectors and canine officers to hours of work actually performed. In order to "make inspectors whole", the law also allowed overtime compensation to be counted as part of the basic pay for the Civil Service Retirement System up to 50 percent at the $30,000 statutory overtime cap, or $15,000.
Due to recent arbitration decisions, Customs must now pay overtime plus interest to Customs officers: (1) for hours not actually worked by officers who were denied overtime assignments because they have reached a dollar limit set by port directors; and, (2) who were inadvertently passed over for a specific overtime assignment. Due to another arbitration decision, Customs is required to pay overtime for hours not actually worked to officers whose overtime is inappropriately assigned to part time employees.
On July 25, 1997, Chairman Crane introduced H.R. 2262, a bill which addresses a number of reforms to the overtime and premium pay compensation system for Customs officers.
FOCUS OF THE HEARING:
The hearing will focus on: the effectiveness of interdiction efforts and their impact on trade; Customs automation and modernization efforts and the mechanisms needed to fund these efforts; and the use of Customs user fees and the compensation system for Customs officers.
DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:
Requests to be heard at the hearing must be made by telephone to Traci Altman or Bradley Schreiber at (202) 225-1721 no later than the close of business, Monday, April 27, 1998. The telephone request should be followed by a formal written request to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. The staff of the Subcommittee on Trade will notify by telephone those scheduled to appear as soon as possible after the filing deadline. Any questions concerning a scheduled appearance should be directed to the Trade Subcommittee staff at (202) 225-6649.
In view of the limited time available to hear witnesses, the Subcommittee may not be able to accommodate all requests to be heard. Those persons and organizations not scheduled for an oral appearance are encouraged to submit written statements for the record of the hearing. All persons requesting to be heard, whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline.
Witnesses scheduled to present oral testimony are required to summarize briefly their written statements in no more than five minutes. THE FIVE-MINUTE RULE WILL BE STRICTLY ENFORCED. The full written statement of each witness will be included in the printed record, in accordance with House Rules.
In order to assure the most productive use of the limited amount of time available to question witnesses, all witnesses scheduled to appear before the Subcommittee are required to submit 200 copies of their prepared statement and an IBM compatible 3.5-inch diskette in ASCII DOS Text or WordPerfect 5.1 format, for review by Members prior to the hearing. Testimony should arrive at the Subcommittee on Trade office, room 1104 Longworth House Office Building, no later than close of business on April 28, 1998. Failure to do so may result in the witness being denied the opportunity to testify in person.
WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:
Any person or organization wishing to submit a written statement for the printed record of the hearing should submit at least six (6) single-space legal-size copies of their statement, along with an IBM compatible 3.5-inch diskette in ASCII DOS Text or WordPerfect 5.1 format only, with their name, address, and hearing date noted on a label, by the close of business, Thursday, May 14, 1998, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Trade office, room 1104 Longworth House Office Building, at least one hour before the hearing begins.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All statements and any accompanying exhibits for printing must be typed in single space on legal-size paper and may not exceed a total of 10 pages including attachments. At the same time written statements are submitted to the Committee, witnesses are now requested to submit their statements on an IBM compatible 3.5-inch diskette in ASCII DOS Text or WordPerfect 5.1 format. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the name, full address, a telephone number where the witness or the designated representative may be reached and a topical outline or summary of the comments and recommendations in the full statement. This supplemental sheet will not be included in the printed record.
The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press and the public during the course of a public hearing may be submitted in other forms.
The
Committee seeks to make its facilities accessible to persons with
disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.