99–008

107TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 2d Session 107–518

RELATING TO CONSIDERATION OF THE SENATE AMENDMENT TO THE 

BILL (H.R. 3009) TO EXTEND THE ANDEAN TRADE PREFERENCE ACT, TO 

GRANT ADDITIONAL TRADE BENEFITS UNDER THAT ACT, AND FOR 

OTHER PURPOSES

JUNE 19, 2002.—Referred to the House Calendar and ordered to be printed 

Mr. REYNOLDS, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 450] 

The Committee on Rules, having had under consideration House 

Resolution 450, by a non-record vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides that H.R. 3009 and the Senate amendment thereto, shall be taken from the Speaker’s table and agreed 

to with the amendment printed in this report. 

The rule provides that the House shall be considered to have insisted on its amendment to the Senate amendment. 

Finally, the rule provides that the House shall be considered to 

have requested a conference with the Senate thereon.

SUMMARY OF AMENDMENT

• Includes the Bipartisan Trade Promotion Authority Act of 2001 

(H.R. 3005), as passed by the House on Dec. 6, 2001. • Incorporates into the Trade Promotion Authority bill the language from the English Resolution (H. Con. Res. 262) expressing 

Congressional concerns regarding WTO dispute settlement panels 

and the WTO Appellate Body, and the standard of review contained in Article 17.6 of the Antidumping Agreement, as passed by 

the House Nov. 7, 2001 by a vote of 410–4. • Includes the Andean Trade Preference and Drug Eradication 

Act (H.R. 3009), as passed by the House on Nov. 16, 2001 by voice 

vote. 

• Requires that for apparel made with U.S. fabric to qualify for 

benefits under the Caribbean Basin Initiative and the Andean 

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Trade Preference Act, all dyeing and finishing of that fabric must 

take place in the United States, as passed by the House as part 

of the supplemental appropriations legislation (sec. 1405 of H.R. 

4775) on May 24, 2002. • Includes the Customs Border Security Act (H.R. 3129), as 

passed by the House on May 22, 2002 by a vote of 327–101. • Extends the Generalized System of Preferences (H.R. 3010) as 

reported by the Committee on Ways & Means on Oct. 16, 2001. • Expands coverage and benefits under Trade Adjustment Assistance by: • Expanding coverage to secondary workers by covering certain suppliers; 

• Adding a 60% health insurance tax credit to TAA recipients, 

and extending same health insurance tax credit on a permanent basis to Pension Benefits Guarantee Corporation beneficiaries, including firms from airline and steel industries; 

• Extending direct assistance benefits for 26 additional weeks 

in order to help workers complete their training requirements, 

and speeding up the petition process from the current 60 days 

to a new 40 days providing assistance to workers faster; and 

• Increasing funding for worker training from $80 to $110 million for the increased number of workers eligible under TAA. • Authorizes the payment of judgments to avoid sanctions from 

certain WTO dispute settlement cases. • Requires that Customs collect duties from importers on a 

monthly basis and prohibition on deferral of duties beyond the 

specified duty collection period. 

TEXT OF AMENDMENT

In lieu of the matter proposed to be inserted by the Senate 

amendment, insert the following:

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Trade Act of 2002’’. 

SEC. 2. ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF CONTENTS. 

(a) DIVISIONS.—This Act is organized into 4 divisions as follows: 

(1) DIVISION A.—Trade Adjustment Assistance. 

(2) DIVISION B.—Bipartisan Trade Promotion Authority. 

(3) DIVISION C.—Andean Trade Preference Act. 

(4) DIVISION D.—Extension of Certain Preferential Trade 

Treatment and Other Provisions. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as 

follows:

Sec. 1. Short title. 

Sec. 2. Organization of act into divisions; table of contents. 

DIVISION A—TRADE ADJUSTMENT ASSISTANCE 

Sec. 101. Short title. 

TITLE I—TRADE ADJUSTMENT ASSISTANCE PROGRAM 

Sec. 111. Reauthorization of trade adjustment assistance program. 

Sec. 112. Filing of petitions and provision of rapid response assistance; expedited 

review of petitions by Secretary of Labor. 

Sec. 113. Group eligibility requirements. 

Sec. 114. Qualifying requirements for trade readjustment allowances. 

Sec. 115. Waivers of training requirements. 

Sec. 116. Amendments to limitations on trade readjustment allowances. 

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Sec. 117. Annual total amount of payments for training. 

Sec. 118. Authority of States with respect to costs of approved training and supplemental assistance. 

Sec. 119. Provision of employer-based training. 

Sec. 120. Coordination with title I of the Workforce Investment Act of 1998. 

Sec. 121. Expenditure period. 

Sec. 122. Declaration of policy; sense of Congress. 

TITLE II—CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE 

INDIVIDUALS 

Sec. 201. Credit for health insurance costs of individuals receiving a trade readjustment allowance or a benefit from the Pension Benefit Guaranty 

Corporation. 

Sec. 202. Advance payment of credit for health insurance costs of eligible individuals. 

TITLE III—CUSTOMS REAUTHORIZATION 

Sec. 301. Short title. 

Subtitle A—United States Customs Service 

CHAPTER 1—DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL

OPERATIONS

Sec. 311. Authorization of appropriations for noncommercial operations, commercial 

operations, and air and marine interdiction. 

Sec. 312. Antiterrorist and illicit narcotics detection equipment for the United 

States-Mexico border, United States-Canada border, and Florida and 

the Gulf Coast seaports. 

Sec. 313. Compliance with performance plan requirements. 

CHAPTER 2—CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE

Sec. 321. Authorization of appropriations for program to prevent child pornography/

child sexual exploitation. 

CHAPTER 3—MISCELLANEOUS PROVISIONS

Sec. 331. Additional Customs Service officers for United States-Canada border. 

Sec. 332. Study and report relating to personnel practices of the Customs Service. 

Sec. 333. Study and report relating to accounting and auditing procedures of the 

Customs Service. 

Sec. 334. Establishment and implementation of cost accounting system; reports. 

Sec. 335. Study and report relating to timeliness of prospective rulings. 

Sec. 336. Study and report relating to customs user fees. 

Sec. 337. Fees for customs inspections at express courier facilities. 

Sec. 338. National customs automation program. 

CHAPTER 4—ANTITERRORISM PROVISIONS

Sec. 341. Immunity for United States officials that act in good faith. 

Sec. 342. Emergency adjustments to offices, ports of entry, or staffing of the customs service. 

Sec. 343. Mandatory advanced electronic information for cargo and passengers. 

Sec. 344. Border search authority for certain contraband in outbound mail. 

Sec. 345. Authorization of appropriations for reestablishment of customs operations 

in New York City. 

CHAPTER 5—TEXTILE TRANSSHIPMENT PROVISIONS

Sec. 351. Gao audit of textile transshipment monitoring by customs service. 

Sec. 352. Authorization of appropriations for textile transshipment enforcement operations. 

Sec. 353. Implementation of the african growth and opportunity act. 

Subtitle B—Office of the United States Trade Representative 

Sec. 361. Authorization of appropriations. 

Subtitle C—United States International Trade Commission 

Sec. 371. Authorization of appropriations. 

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Subtitle D—Other trade provisions 

Sec. 381. Increase in aggregate value of articles exempt from duty acquired abroad 

by United States residents. 

Sec. 382. Regulatory audit procedures. 

DIVISION B—BIPARTISAN TRADE PROMOTION AUTHORITY 

TITLE XXI—TRADE PROMOTION AUTHORITY 

Sec. 2101. Short title and findings. 

Sec. 2102. Trade negotiating objectives. 

Sec. 2103. Trade agreements authority. 

Sec. 2104. Consultations and assessment. 

Sec. 2105. Implementation of trade agreements. 

Sec. 2106. Treatment of certain trade agreements for which negotiations have already begun. 

Sec. 2107. Congressional oversight group. 

Sec. 2108. Additional implementation and enforcement requirements. 

Sec. 2109. Committee staff. 

Sec. 2110. Conforming amendments. 

Sec. 2111. Definitions. 

DIVISION C—ANDEAN TRADE PREFERENCE ACT 

TITLE XXXI—ANDEAN TRADE PREFERENCE 

Sec. 3101. Short title. 

Sec. 3102. Findings. 

Sec. 3103. Articles eligible for preferential treatment. 

Sec. 3104. Termination of preferential treatment. 

Sec. 3105. Trade benefits under the Caribbean Basin Economic Recovery act. 

Sec. 3106. Trade benefits under the African Growth and Opportunity Act. 

DIVISION D—EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT 

AND OTHER PROVISIONS 

Sec. 4101. Extension of generalized system of preferences. 

Sec. 4102. Fund for WTO dispute settlements. 

Sec. 4103. Payment of duties and fees.

DIVISION A—TRADE ADJUSTMENT 

ASSISTANCE 

SEC. 101. SHORT TITLE. 

This division may be cited as the ‘‘Trade Adjustment Assistance 

Reform Act of 2002’’. 

TITLE I—TRADE ADJUSTMENT 

ASSISTANCE PROGRAM 

SEC. 111. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE 

PROGRAM. 

(a) ASSISTANCE FOR WORKERS.—Section 245 of the Trade Act of 

1974 (19 U.S.C. 2317) is amended by striking ‘‘October 1, 1998, and 

ending September 30, 2001,’’ each place it appears and inserting 

‘‘October 1, 2001, and ending September 30, 2004,’’. 

(b) ASSISTANCE FOR FIRMS.—Section 256(b) of the Trade Act of 

1974 (19 U.S.C. 2346(b)) is amended by striking ‘‘October 1, 1998, 

and ending September 30, 2001’’ and inserting ‘‘October 1, 2001, 

and ending September 30, 2004,’’. 

(c) TERMINATION.—Section 285(c) of the Trade Act of 1974 (19 

U.S.C. 2271 note) is amended in paragraphs (1) and (2)(A) by striking ‘‘September 30, 2001’’ and inserting ‘‘September 30, 2004’’. 

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(d) TRAINING LIMITATION UNDER NAFTA PROGRAM.—Section 

250(d)(2) of the Trade Act of 1974 (19 U.S.C. 2331(d)(2)) is amended by striking ‘‘October 1, 1998, and ending September 30, 2001’’

and inserting ‘‘October 1, 2001, and ending September 30, 2004’’. 

SEC. 112. FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE 

ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR. 

(a) FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE ASSISTANCE.—Section 221(a) of the Trade Act of 1974 (19 U.S.C. 

2271(a)) is amended to read as follows: 

‘‘(a)(1) A petition for certification of eligibility to apply for adjustment assistance for a group of workers under this chapter may be 

filed with the Governor of the State in which such workers’ firm 

or subdivision is located by any of the following: 

‘‘(A) The group of workers (including workers in an agricultural firm or subdivision of any agricultural firm). 

‘‘(B) The certified or recognized union or other duly authorized representative of such workers. 

‘‘(C) Employers of such workers, one-stop operators or onestop partners (as defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801)), including State employment security agencies, or the State dislocated worker unit 

established under title I of such Act, on behalf of such workers. 

‘‘(2) Upon receipt of a petition filed under paragraph (1), the Governor shall—

‘‘(A) immediately transmit the petition to the Secretary of 

Labor (hereinafter in this chapter referred to as the ‘Secretary’); 

‘‘(B) ensure that rapid response assistance, and appropriate 

core and intensive services (as described section 134 of the 

Workforce Investment Act of 1998 (29 U.S.C. 2864)) authorized 

under other Federal laws are made available to the workers 

covered by the petition to the extent authorized under such 

laws; and 

‘‘(C) assist the Secretary in the review of the petition by 

verifying such information and providing such other assistance 

as the Secretary may request. 

‘‘(3) Upon receipt of the petition, the Secretary shall promptly 

publish notice in the Federal Register that the Secretary has received the petition and initiated an investigation.’’. 

(b) EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR.—

Section 223(a) of such Act (19 U.S.C. 2273(a)) is amended in the 

first sentence by striking ‘‘60 days’’ and inserting ‘‘40 days’’. 

SEC. 113. GROUP ELIGIBILITY REQUIREMENTS. 

(a) TRADE ADJUSTMENT ASSISTANCE PROGRAM.—

(1) IN GENERAL.—Section 222 of the Trade Act of 1974 (19 

U.S.C. 2272) is amended—

(A) by redesignating subsection (b) as subsection (c); and 

(B) by inserting after subsection (a) the following: 

‘‘(b)(1) A group of workers (including workers in any agricultural 

firm or subdivision of an agricultural firm) shall be certified by the 

Secretary as eligible to apply for adjustment assistance benefits 

under this subchapter if, subject to paragraph (2), the Secretary determines that—

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‘‘(A) a significant number or proportion of the workers in the 

workers’ firm or an appropriate subdivision of the firm have 

become totally or partially separated, or are threatened to become totally or partially separated; ‘‘(B) the workers’ firm (or subdivision) is a supplier to a firm 

(or subdivision) that employed workers covered by a certification of eligibility under subsection (a), the component parts 

provided to the firm by the supplier is a direct component of 

the article that is the basis for the certification of eligibility 

under subsection (a), and either the component parts have a 

dedicated usage for the firm and the supplier does not have another reasonably available purchaser, or the component parts 

add at least 25 percent of the value to the article involved; and ‘‘(C) a loss of business with the firm (or subdivision) covered 

by the certification of eligibility under subsection (a) contributed importantly to the workers’ separation or threat of separation determined under subparagraph (A). ‘‘(2) A group of workers shall be eligible for certification by the 

Secretary under paragraph (1) if the petition for certification is 

filed with the Secretary not later than 6 months after the date on 

which the Secretary certifies the group of workers in the firm (or 

subdivision of the firm) under subsection (a) with respect to which 

the firm involved is a supplier.’’. (2) DEFINITIONS.—Section 222(c) of such Act, as redesignated 

by paragraph (1)(A), is amended— (A) in the matter preceding paragraph (1), by striking ‘‘subsection (a)(3)’’ and inserting ‘‘this section’’; and 

(B) by adding at the end the following: ‘‘(3) The term ‘supplier’ means a firm that produces component parts for articles produced by a firm (or subdivision) that 

employed a group of workers covered by a certification of eligibility under subsection (a) and with respect to which the production of such component parts constitutes not less than 50 

percent of the total operations or production of the firm.’’. 

(b) NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM.— (1) IN GENERAL.—Section 250(a) of the Trade Act of 1974 (19 

U.S.C. 2331(a)) is amended— (A) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and 

(B) by inserting after paragraph (1) the following: ‘‘(2) CRITERIA FOR ADVERSELY AFFECTED SECONDARY WORKERS.—(A) A group of workers (including workers in any agricultural firm or subdivision of an agricultural firm) shall be 

certified by the Secretary as eligible to apply for adjustment 

assistance benefits under this subchapter if, subject to subparagraph (B), the Secretary determines that—

‘‘(i) a significant number or proportion of the workers in 

the workers’ firm or an appropriate subdivision of the firm 

have become totally or partially separated, or are threatened to become totally or partially separated; ‘‘(ii) the workers’ firm (or subdivision) is a supplier to a 

firm (or subdivision) that employed workers covered by a 

certification of eligibility under paragraph (1), the component parts provided to the firm by the supplier is a direct 

component of the article that is the basis for the certifiVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
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cation of eligibility under subsection (a), and either the 

component parts have a dedicated usage for the firm and 

the supplier does not have another reasonably available 

purchaser, or the component parts add at least 25 percent 

of the value to the article involved; and ‘‘(iii) a loss of business with the firm (or subdivision) covered by the certification of eligibility under paragraph (1) 

contributed importantly to the workers’ separation or 

threat of separation determined under clause (i). ‘‘(B) A group of workers shall be eligible for certification by 

the Secretary under subparagraph (A) if the petition for certification is filed with the Secretary not later than 6 months after 

the date on which the Secretary certifies the group of workers 

in the firm (or subdivision of the firm) under paragraph (1) 

with respect to which the firm involved is a supplier.’’. (2) DEFINITIONS.—Section 250(a)(3) of such Act, as redesignated by paragraph (1)(A), is amended to read as follows: ‘‘(3) DEFINITIONS.—In this section: ‘‘(A) The term ‘contributed importantly’ means a cause 

which is important but not necessarily more important 

than any other cause. 

‘‘(B) The term ‘supplier’ means a firm that produces component parts for articles produced by a firm (or subdivision) covered by a certification of eligibility under paragraph (1) and with respect to which the production of such 

component parts constitutes not less than 50 percent of the 

total operations or production of the firm.’’. 

(3) REGULATIONS.—Section 250(a)(4) of such Act, as redesignated by paragraph (1)(A), is amended by striking ‘‘paragraph 

(1)’’ and inserting ‘‘paragraphs (1) and (2)’’. 

SEC. 114. QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT 

ALLOWANCES. 

(a) CLARIFICATION OF CERTAIN REDUCTIONS.—(1) Section 

231(a)(3)(B) of the Trade Act of 1974 (19 U.S.C. 2291(a)(3)(B)) is 

amended by inserting after ‘‘any unemployment insurance’’ the following: ‘‘, except additional compensation that is funded by a State 

and is not reimbursed from any Federal funds,’’. 

(2) Section 233(a)(1) of the Trade Act of 1974 (19 U.S.C. 

2293(a)(1)) is amended by inserting after ‘‘any unemployment insurance’’ the following: ‘‘, except additional compensation that is 

funded by a State and is not reimbursed from any Federal funds,’’. 

(b) ENROLLMENT IN TRAINING REQUIREMENT.—Section 

231(a)(5)(A) of such Act (19 U.S.C. 2291(a)(5)(A)) is amended—

(1) by inserting ‘‘(i)’’ after ‘‘(A)’’; 

(2) by adding ‘‘and’’ after the comma at the end; and 

(3) by adding at the end the following: 

‘‘(ii) the enrollment required under clause (i) occurs no 

later than the latest of—

‘‘(I) the last day of the 13th week after the worker’s 

most recent total separation from adversely affected 

employment which meets the requirements of paragraphs (1) and (2); 

‘‘(II) the last day of the 8th week after the week in 

which the Secretary issues a certification covering the 

worker; 

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‘‘(III) 45 days after the later of the dates specified in 

subclause (I) or (II), if the Secretary determines there 

are extenuating circumstances that justify an extension in the enrollment period; or 

‘‘(IV) the last day of a period determined by the Secretary to be approved for enrollment after the termination of a waiver issued pursuant to subsection (c).’’.–

SEC. 115. WAIVERS OF TRAINING REQUIREMENTS. 

(a) IN GENERAL.—Section 231(c) of the Trade Act of 1974 (19 

U.S.C. 2291(c)) is amended to read as follows: 

‘‘(c)(1) The Secretary may issue a written statement to a worker 

waiving the enrollment in the training requirement described in 

subsection (a)(5)(A) if the Secretary determines that such training 

requirement is not feasible or appropriate for the worker, as indicated by 1 or more of the following: 

‘‘(A) The worker has been provided a written notice that the 

worker will be recalled by the firm from which the qualifying 

separation occurred and that such recall will occur within 6 

months of the qualifying separation. 

‘‘(B) The worker is within 2 years of meeting all requirements for entitlement to old-age insurance benefits under title 

II of the Social Security Act (42 U.S.C. 401 et seq.) (except for 

application therefore) as of the date of the most recent separation of the worker that meets the requirements of subsection 

(a)(1) and (2). 

‘‘(C) The worker is unable to participate in training due to 

the health of the worker, except that a waiver under this subparagraph shall not be construed to exempt a worker from requirements relating to the availability for work, active search 

for work, or refusal to accept work under Federal or State unemployment compensation laws. 

‘‘(D) The first available enrollment date for the approved 

training of the worker is within 45 days after the date of the 

determination made under this paragraph, or, if later, there 

are extenuating circumstances for the delay in enrollment, as 

determined pursuant to guidelines issued by the Secretary. 

‘‘(E) There are insufficient funds available for training under 

this chapter, and funds are not available for the approved 

training under other Federal law. 

‘‘(2) The Secretary shall specify the duration of the waiver under 

paragraph (1)–and shall periodically review the waiver to determine whether the basis for issuing the waiver remains applicable. 

If at any time the Secretary determines such basis is no longer applicable to the worker, the Secretary shall revoke the waiver. 

‘‘(3) Pursuant to the agreement under section 239, the Secretary 

may authorize a cooperating State or State agency to carry out activities described in paragraph (1) (except for the determination 

under subparagraph (E) of paragraph (1)). Such agreement shall 

include a requirement that the State or State agency maintain and 

make available to the Secretary the written statements provided 

pursuant to paragraph (1) and a statement of the reasons for the 

waiver. 

‘‘(4) The Secretary shall collect and maintain information identifying the number of workers who received waivers and the average 

9

duration of such waivers issued under this subsection during the 

preceding year.’’. 

(b) CONFORMING AMENDMENT.—Section 231(a)(5)(C) of such Act 

(19 U.S.C. 2291(a)(5)(C)) is amended by striking ‘‘certified’’.

SEC. 116. AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT 

ALLOWANCES. 

(a) INCREASE IN MAXIMUM NUMBER OF WEEKS.—Section 233(a) of 

the Trade Act of 1974 (19 U.S.C. 2293(a)) is amended—

(1) in paragraph (2), by inserting after ‘‘104-week period’’ the 

following: ‘‘(or, in the case of an adversely affected worker who 

requires a program of remedial education (as described in section 236(a)(5)(D)) in order to complete training approved for 

the worker under section 236, the 130-week period)’’; and 

(2) in paragraph (3), by striking ‘‘26’’ each place it appears 

and inserting ‘‘52’’. 

(b) SPECIAL RULE RELATING TO BREAK IN TRAINING.—Section 

233(f) of the Trade Act of 1974 (19 U.S.C. 2293(f)) is amended in 

the matter preceding paragraph (1) by striking ‘‘14 days’’ and inserting ‘‘30 days’’. 

(c) ADDITIONAL WEEKS FOR INDIVIDUALS IN NEED OF REMEDIAL

EDUCATION.—Section 233 of the Trade Act of 1974 (19 U.S.C. 2293) 

is amended by adding at the end the following: 

‘‘(g) Notwithstanding any other provision of this section, in order 

to assist an adversely affected worker to complete training approved for the worker under section 236 which includes a program 

of remedial education (as described in section 236(a)(5)(D)), and in 

accordance with regulations prescribed by the Secretary, payments 

may be made as trade readjustment allowances for up to 26 additional weeks in the 26-week period that follows the last week of entitlement to trade readjustment allowances otherwise payable 

under this chapter.’’. 

SEC. 117. ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING. 

Section 236(a)(2)(A) of the Trade Act of 1974 (19 U.S.C. 

2296(a)(2)(A)) is amended by striking ‘‘$80,000,000’’ and all that 

follows through ‘‘$70,000,000’’ and inserting ‘‘$110,000,000’’. 

SEC. 118. AUTHORITY OF STATES WITH RESPECT TO COSTS OF APPROVED TRAINING AND SUPPLEMENTAL ASSISTANCE. 

(a) COSTS OF APPROVED TRAINING.—Section 236(a) of the Trade 

Act of 1974 (19 U.S.C. 2296(a)) is amended by adding at the end 

the following new paragraph: 

‘‘(10) For purposes of carrying out paragraph (1)(F), the Secretary 

shall authorize any cooperating State or State agency to establish, 

pursuant to guidelines issued by the Secretary, a uniform limit on 

the cost of training to be paid from funds provided under this chapter that may be approved by such State for an adversely affected 

worker under this section.’’. 

(b) SUPPLEMENTAL ASSISTANCE.—Section 236(b) of such Act (19 

U.S.C. 2296(b)) is amended by inserting the following sentence 

after the first sentence: ‘‘The Secretary shall authorize any cooperating State or State agency to take into account the cost of the 

training approved for an adversely affected worker under subsection (a) in determining the appropriate amount of supplemental 

assistance to be provided to such worker under this subsection.’’. 

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SEC. 119. PROVISION OF EMPLOYER-BASED TRAINING. 

(a) IN GENERAL.—Section 236(a)(5)(A) of the Trade Act of 1974 

(19 U.S.C. 2296(a)(5)(A)) is amended to read as follows: ‘‘(A) employer-based training, including— ‘‘(i) on-the-job training, and 

‘‘(ii) customized training,’’. (b) REIMBURSEMENT.—Section 236(c)(8) of such Act (19 U.S.C. 

2296(c)(8)) is amended to read as follows: ‘‘(8) the employer is provided reimbursement of not more 

than 50 percent of the wage rate of the participant, for the cost 

of providing the training and additional supervision related to 

the training,’’. 

(c) DEFINITION.—Section 236 of such Act (19 U.S.C. 2296) is 

amended by adding the following new subsection: 

‘‘(f) For purposes of this section, the term ‘customized training’

means training that is—

‘‘(1) designed to meet the special requirements of an employer or group of employers; 

‘‘(2) conducted with a commitment by the employer or group 

of employers to employ an individual upon successful completion of the training; and 

‘‘(3) for which the employer pays for a significant portion (but 

in no case less than 50 percent) of the cost of such training, 

as determined by the Secretary.’’. 

SEC. 120. COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF 1998. 

(a) COORDINATION WITH ONE-STOP DELIVERY SYSTEMS IN THE

PROVISION OF EMPLOYMENT SERVICES.—Section 235 of the Trade 

Act of 1974 (19 U.S.C. 2295) is amended by inserting before the period at the end of the first sentence the following: ‘‘, including the 

services provided through one-stop delivery systems described in 

section 134(c) of the Workforce Investment Act of 1998 (29 U.S.C. 

2864(c))’’. (b) COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT

ACT OF 1998.—

(1) IN GENERAL.—Section 239(e) of such Act (19 U.S.C. 

2311(e)) is amended to read as follows: 

‘‘(e) Any agreement entered into under this section shall provide 

for the coordination of the administration of the provisions for employment services, training, and supplemental assistance under 

sections 235 and 236 of this chapter with provisions relating to dislocated worker employment and training activities (including supportive services) under chapter 5 of subtitle B of title I of the Workforce Investment Act of 1998 (29 U.S.C. 2861 et seq.) upon such 

terms and conditions, as established by the Secretary after consultation with the States, that are consistent with this section. 

Such terms and conditions shall, at a minimum, include requirements that—

‘‘(1) adversely affected workers applying for assistance under 

this chapter be co-enrolled in the dislocated worker program 

authorized under chapter 5 of subtitle B of title I of the Workforce Investment Act of 1998; 

‘‘(2) training under section 236 shall be provided in accordance with the provisions relating to consumer choice requirements and the use of individual training accounts under subVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
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paragraphs (F) and (G) of section 134(d)(4) of the Workforce Investment Act of 1998 (29 U.S.C. 2864(d)(4)(F) and (G)), including—

‘‘(A) the requirement that only providers eligible under 

section 122 of the Workforce Investment Act of 1998 (29 

U.S.C. 2842) shall be eligible to provide training; and 

‘‘(B) that the exceptions to the use of individual training 

accounts described in section 134(d)(4)(G)(ii) of such Act 

(29 U.S.C. 2864(d)(4)(G)(ii)) shall be applicable; and 

‘‘(3) common reporting systems and elements, including common elements relating to participant and performance data, 

shall be used by the program authorized under this chapter 

and the dislocated worker program authorized under chapter 5 

of subtitle B of title I of such Act.’’. 

(2) ADDITIONAL REQUIREMENT.—Section 239(g) of such Act 

(19 U.S.C. 2311(g)) is amended—

(A) by inserting ‘‘(1)’’ after ‘‘(g)’’; and 

(B) by adding at the end the following new paragraph: 

‘‘(2) The agreement under this section shall also provide that the 

cooperating State agency shall be a one-stop partner as described 

in subparagraphs (A) and (B)(viii) of section 121(b)(1) of the Workforce Investment Act of 1998 (29 U.S.C. 2841(b)(1)(A) and (B)(viii)) 

in the one-stop delivery system established under section 134(c) of 

such Act (29 U.S.C. 2864(c)) for the appropriate local workforce investment areas, and shall carry out the responsibilities relating to 

such partners.’’. 

(3) CONFORMING AMENDMENTS.—Section 236(a)(1) of such Act 

(19 U.S.C. 2296(a)(1)) is amended—

(A) in the matter preceding subparagraph (A), by inserting ‘‘, pursuant to an interview, evaluation, assessment, or 

case management of the worker,’’ after ‘‘Secretary determines’’; and 

(B) in the second sentence of such paragraph, by striking 

‘‘, directly or through a voucher system’’ and inserting 

‘‘through individual training accounts pursuant to the 

agreement under section 239(e)(2)’’. 

SEC. 121. EXPENDITURE PERIOD. 

Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as amended by section 111(a) of this Act, is further amended—

(1) by striking ‘‘There are authorized’’ and inserting ‘‘(a) IN

GENERAL.—There are authorized’’; and 

(2) by adding at the end the following subsection:. ‘‘(b) PERIOD OF EXPENDITURE.—Funds obligated for any fiscal 

year to carry out activities under sections 235 through 238 may be 

expended by each State receiving such funds during that fiscal year 

and the succeeding two fiscal years.’’.

SEC. 122. DECLARATION OF POLICY; SENSE OF CONGRESS. 

(a) DECLARATION OF POLICY.—Congress reiterates that, under the 

trade adjustment assistance program under chapter 2 of title II of 

the Trade Act of 1974, workers are eligible for transportation, 

childcare, and healthcare assistance, as well as other related assistance under programs administered by the Department of Labor. 

(b) SENSE OF CONGRESS.—It is the sense of Congress that the 

Secretary of Labor, working independently and in conjunction with 

12

the States, should, in accordance with section 225 of the Trade Act 

of 1974, provide more specific information about benefit allowances, 

training, and other employment services, and the petition and application procedures (including appropriate filing dates) for such allowances, training, and services, under the trade adjustment assistance program under chapter 2 of title II of the Trade Act of 1974 

to workers who are applying for, or are certified to receive, assistance under that program, including information on all other Federal assistance available to such workers.

TITLE II—CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS 

SEC. 201. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS 

RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A 

BENEFIT FROM THE PENSION BENEFIT GUARANTY CORPORATION. 

(a) IN GENERAL.—Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable 

credits) is amended by redesignating section 35 as section 36 and 

inserting after section 34 the following new section: 

‘‘SEC. 35. HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.

‘‘(a) IN GENERAL.—In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount 

equal to 60 percent of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under qualified health insurance for eligible coverage months beginning in the 

taxable year. ‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.— For purposes of this section— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), if the 

modified adjusted gross income of the taxpayer for the taxable 

year exceeds $20,000, the amount which would (but for this 

subsection and subsection (h)(1)) be allowed as a credit under 

subsection (a) shall be reduced (but not below zero) by the 

amount which bears the same ratio to the amount which would 

be so allowed as such excess bears to $20,000. 

‘‘(2) FAMILY COVERAGE.—

‘‘(A) SEPARATE APPLICATION OF LIMITATION.—Paragraph 

(1) shall be applied separately with respect to—

‘‘(i) amounts paid for eligible coverage months as of 

the first day of which one or more qualifying family 

members are covered by the qualified health insurance 

covering the taxpayer, and 

‘‘(ii) amounts paid for other eligible coverage 

months. 

‘‘(B) LIMITATION AMOUNT.—With respect to amounts described in subparagraph (A)(i), paragraph (1) shall be applied by substituting ‘$40,000’ for ‘$20,000’ each place it 

appears. 

‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—The term ‘modified 

adjusted gross income’ means adjusted gross income determined without regard to sections 911, 931, and 933. 

13

‘‘(c) ELIGIBLE COVERAGE MONTH.—For purposes of this section— ‘‘(1) IN GENERAL.—The term ‘eligible coverage month’ means 

any month if— ‘‘(A) as of the first day of such month, the taxpayer— ‘‘(i) is an eligible individual, 

‘‘(ii) is covered by qualified health insurance, the 

premium for which is paid by the taxpayer, and ‘‘(iii) does not have other specified coverage, ‘‘(B) such month begins more than 90 days after the date 

of the enactment of the Trade Act of 2002, and ‘‘(C) in the case of any eligible TAA recipient, such 

month is designated under paragraph (2). ‘‘(2) DESIGNATION OF ELIGIBLE COVERAGE MONTHS.—Any eligible TAA recipient may designate, with respect to any period 

of 36 months, not more than 12 months of such period as eligible coverage months. ‘‘(3) JOINT RETURNS.—In the case of a joint return, the requirements of paragraph (1)(A) shall be treated as met with respect to any month if at least 1 spouse satisfies such requirements. ‘‘(d) ELIGIBLE INDIVIDUAL.—For purposes of this section— ‘‘(1) IN GENERAL.—The term ‘eligible individual’ means— ‘‘(A) an eligible TAA recipient, or 

‘‘(B) an eligible PBGC pension recipient. ‘‘(2) ELIGIBLE TAA RECIPIENT.—The term ‘eligible TAA recipient’ means, with respect to any month, any individual— ‘‘(A) who is receiving for any day of such month a trade 

readjustment allowance under part I of subchapter B, or 

subchapter D, of chapter 2 of title II of the Trade Act of 

1974 (19 U.S.C. 2291 et seq. or 2331 et seq.) or who would 

be eligible to receive such allowance if section 231 of such 

Act (19 U.S.C. 2291) were applied without regard to subsection (a)(3)(B) of such section, and ‘‘(B) who, with respect to such allowance, is covered 

under a certification issued—

‘‘(i) under subchapter A or D of chapter 2 of title II 

of the Trade Act of 1974 (19 U.S.C. 2271 et seq. or 

2331 et seq.), and 

‘‘(ii) after the date which is 90 days after the date 

of the enactment of the Trade Act of 2002. 

An individual shall continue to be treated as an eligible TAA 

recipient during the first month that such individual would 

otherwise cease to be an eligible TAA recipient. 

‘‘(3) ELIGIBLE PBGC PENSION RECIPIENT.—The term ‘eligible 

PBGC pension recipient’ means, with respect to any month, 

any individual who—

‘‘(A) has attained age 55 as of the first day of such 

month, and 

‘‘(B) is receiving a benefit for such month any portion of 

which is paid by the Pension Benefit Guaranty Corporation under title IV of the Employee Retirement Income Security Act of 1974. ‘‘(e) QUALIFYING FAMILY MEMBER.—For purposes of this section—

‘‘(1) IN GENERAL.—The term ‘qualifying family member’

means—

14

‘‘(A) the taxpayer’s spouse, and ‘‘(B) any dependent of the taxpayer with respect to whom 

the taxpayer is entitled to a deduction under section 

151(c). 

Such term does not include any individual who has other specified coverage. ‘‘(2) SPECIAL DEPENDENCY TEST IN CASE OF DIVORCED PAR- ENTS, ETC.—If paragraph (2) or (4) of section 152(e) applies to 

any child with respect to any calendar year, in the case of any 

taxable year beginning in such calendar year, such child shall 

be treated as described in paragraph (1)(B) with respect to the 

custodial parent (within the meaning of section 152(e)(1)) and 

not with respect to the noncustodial parent. ‘‘(f) QUALIFIED HEALTH INSURANCE.—For purposes of this section, 

the term ‘qualified health insurance’ means insurance which constitutes medical care; except that such term shall not include any 

insurance if substantially all of its coverage is of excepted benefits 

described in section 9832(c). ‘‘(g) OTHER SPECIFIED COVERAGE.— ‘‘(1) IN GENERAL.—For purposes of this section, an individual 

has other specified coverage for any month if, as of the first 

day of such month— ‘‘(A) SUBSIDIZED COVERAGE.—Such individual is covered 

under any qualified health insurance under any health 

plan maintained by any employer (or former employer) of 

the taxpayer or the taxpayer’s spouse and at least 50 percent of the cost of such coverage (determined under section 

4980B) is paid or incurred by the employer. ‘‘(B) COVERAGE UNDER MEDICARE, MEDICAID, OR SCHIP.— Such individual— ‘‘(i) is entitled to benefits under part A of title XVIII 

of the Social Security Act or is enrolled under part B 

of such title, or ‘‘(ii) is enrolled in the program under title XIX or 

XXI of such Act. 

‘‘(C) CERTAIN OTHER COVERAGE.—Such individual— ‘‘(i) is enrolled in a health benefits plan under chapter 89 of title 5, United States Code, or ‘‘(ii) is entitled to receive benefits under chapter 55 

of title 10, United States Code. ‘‘(2) SPECIAL RULES RELATED TO SUBSIDIZED COVERAGE.—

‘‘(A) EMPLOYER CONTRIBUTIONS TO CAFETERIA PLANS, 

FLEXIBLE SPENDING ARRANGEMENTS, AND MEDICAL SAVINGS

ACCOUNTS.—Employer contributions to a cafeteria plan (as 

defined in section 125(d)), a flexible spending or similar arrangement, or a medical savings account which are excluded from gross income under section 106 shall be treated for purposes of paragraph (1)(A) as paid by the employer. ‘‘(B) AGGREGATION OF PLANS OF EMPLOYER.—A health 

plan which is not otherwise described in paragraph (1)(A) 

shall be treated as described in such paragraph if such 

plan would be so described if all health plans of persons 

treated as a single employer under subsection (b), (c), (m), 

or (o) of section 414 were treated as one health plan. 

15

‘‘(3) IMMUNIZATIONS NOT TREATED AS MEDICAID COVERAGE.—

For purposes of paragraph (1)(B), an individual shall not be 

treated as enrolled in the program under title XIX of the Social 

Security Act solely on the basis of receiving a benefit under 

section 1928 of such Act. 

‘‘(h) SPECIAL RULES.—

‘‘(1) COORDINATION WITH ADVANCE PAYMENTS OF CREDIT.—

With respect to any taxable year, the amount which would (but 

for this subsection) be allowed as a credit to the taxpayer 

under subsection (a) shall be reduced (but not below zero) by 

the aggregate amount paid on behalf of such taxpayer under 

section 7527 for months beginning in such taxable year. 

‘‘(2) COORDINATION WITH OTHER DEDUCTIONS.—Amounts 

taken into account under subsection (a) shall not be taken into 

account in determining any deduction allowed under section 

162(l) or 213. 

‘‘(3) MSA DISTRIBUTIONS.—Amounts distributed from an Archer MSA (as defined in section 220(d)) shall not be taken into 

account under subsection (a). 

‘‘(4) DENIAL OF CREDIT TO DEPENDENTS.—No credit shall be 

allowed under this section to any individual with respect to 

whom a deduction under section 151 is allowable to another 

taxpayer for a taxable year beginning in the calendar year in 

which such individual’s taxable year begins. 

‘‘(5) MARRIED COUPLES MUST FILE JOINT RETURN.—If the taxpayer is married at the close of the taxable year, the credit 

shall be allowed under subsection (a) only if the taxpayer and 

his spouse file a joint return for the taxable year. 

‘‘(6) MARITAL STATUS; CERTAIN MARRIED INDIVIDUALS LIVING

APART.—Rules similar to the rules of paragraphs (3) and (4) of 

section 21(e) shall apply for purposes of this section. 

‘‘(7) INSURANCE WHICH COVERS OTHER INDIVIDUALS.—For purposes of this section, rules similar to the rules of section 

213(d)(6) shall apply with respect to any contract for qualified 

health insurance under which amounts are payable for coverage of an individual other than the taxpayer and qualifying 

family members. 

‘‘(8) TREATMENT OF PAYMENTS.—For purposes of this section—

‘‘(A) PAYMENTS BY SECRETARY.—Payments made by the 

Secretary on behalf of any individual under section 7527 

(relating to advance payment of credit for health insurance 

costs of eligible TAA recipients) shall be treated as having 

been made by the taxpayer on the first day of the month 

for which such payment was made. 

‘‘(B) PAYMENTS BY TAXPAYER.—Payments made by the 

taxpayer for eligible coverage months shall be treated as 

having been made by the taxpayer on the first day of the 

month for which such payment was made. 

‘‘(9) REGULATIONS.—The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate 

to carry out this section, section 6050T, and section 7527.’’.

(b) INCREASED ACCESS TO HEALTH INSURANCE FOR INDIVIDUALS

ELIGIBLE FOR TAX CREDIT THROUGH USE OF GUARANTEED ISSUE, 

16

QUALIFIED HIGH RISK POOLS, AND OTHER APPROPRIATE STATE

MECHANISMS.— (1) IN GENERAL.—Notwithstanding any other provision of 

law, in applying section 2741 of the Public Health Service Act 

(42 U.S.C. 300gg–41)) and any alternative State mechanism 

under section 2744 of such Act (42 U.S.C.300gg–44)), in determining who is an eligible individual (as defined in section 

2741(b) of such Act) in the case of an individual who may be 

covered by insurance for which credit is allowable under section 35 of the Internal Revenue Code of 1986 for an eligible 

coverage month, if the individual seeks to obtain health insurance coverage under such section during an eligible coverage 

month under such section— (A) paragraph (1) of such section 2741(b) shall be applied 

as if any reference to 18 months is deemed a reference to 

12 months, and 

(B) paragraphs (4) and (5) of such section 2741(b) shall 

not apply. 

(2) PROMOTION OF STATE HIGH RISK POOLS.—Title XXVII of 

the Public Health Service Act is amended by inserting after 

section 2744 the following new section: 

‘‘SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS. 

‘‘(a) SEED GRANTS TO STATES.—The Secretary shall provide from 

the funds appropriated under subsection (c)(1) a grant of up to 

$1,000,000 to each State that has not created a qualified high risk 

pool as of the date of the enactment of this section for the State’s 

costs of creation and initial operation of such a pool. ‘‘(b) MATCHING FUNDS FOR OPERATION OF POOLS.— ‘‘(1) IN GENERAL.—In the case of a State that has established 

a qualified high risk pool that— ‘‘(A) restricts premiums charged under the pool to no 

more than 150 percent of the premium for applicable 

standard risk rates; ‘‘(B) that offers a choice of two or more coverage options 

through the pool; and ‘‘(C) has in effect a mechanism reasonably designed to 

ensure continued funding of losses incurred by the State 

after the end of fiscal year 2004 in connection with operation of the pool; 

the Secretary shall provide, from the funds appropriated under 

subsection (c)(2) and allotted to the State under paragraph (2), 

a grant of up to 50 percent of the losses incurred by the State 

in connection with the operation of the pool. 

‘‘(2) ALLOTMENT.—The amounts appropriated under subsection (c)(2) for a fiscal year shall be made available to the 

States in accordance with a formula that is based upon the 

number of uninsured individuals in the States. 

‘‘(3) CONSTRUCTION.—Nothing in this subsection shall be construed as preventing a State from supplementing the funds 

made available under this subsection for the support and operation of qualified high risk pools. 

‘‘(c) FUNDING.—Out of any money in the Treasury of the United 

States not otherwise appropriated, there are appropriated—

‘‘(1) $20,000,000 for fiscal year 2003 to carry out subsection 

(a); and 

17

‘‘(2) $40,000,000 for each of fiscal years 2003 and 2004. 

Funds appropriated under this subsection for a fiscal year shall remain available for obligation through the end of the following fiscal 

year. Nothing in this section shall be construed as providing a 

State with an entitlement to a grant under this section. 

‘‘(d) QUALIFIED HIGH RISK POOL AND STATE DEFINED.—For purposes of this section, the term ‘qualified high risk pool’ has the 

meaning given such term in section 2744(c)(2) and the term ‘State’

means any of the 50 States and the District of Columbia.’’. 

(3) CONSTRUCTION.—Nothing in this subsection shall be construed as affecting the ability of a State to use mechanisms, 

described in sections 2741(c) and 2744 of the Public Health 

Service Act, as an alternative to applying the guaranteed availability provisions of section 2741(a) of such Act.

(c) CONFORMING AMENDMENTS.—

(1) Paragraph (2) of section 1324(b) of title 31, United States 

Code, is amended by inserting before the period ‘‘, or from section 35 of such Code’’. 

(2) The table of sections for subpart C of part IV of chapter 

1 of the Internal Revenue Code of 1986 is amended by striking 

the last item and inserting the following new items:

‘‘Sec. 35. Health insurance costs of eligible individuals. 

‘‘Sec. 36. Overpayments of tax.’’.

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2001. 

SEC. 202. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE 

COSTS OF ELIGIBLE INDIVIDUALS. 

(a) IN GENERAL.—Chapter 77 of the Internal Revenue Code of 

1986 (relating to miscellaneous provisions) is amended by adding 

at the end the following new section: 

‘‘SEC. 7527. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE 

COSTS OF ELIGIBLE INDIVIDUALS. 

‘‘(a) GENERAL RULE.—Not later than July 1, 2003, the Secretary 

shall establish a program for making payments on behalf of certified individuals to providers of qualified health insurance (as defined in section 35(f)) for such individuals. 

‘‘(b) LIMITATION ON ADVANCE PAYMENTS DURING ANY TAXABLE

YEAR.—

‘‘(1) IN GENERAL.—The Secretary may make payments under 

subsection (a) only to the extent that the total amount of such 

payments made on behalf of any individual during the taxable 

year does not exceed such individual’s advance payment limitation amount for such year. 

‘‘(2) ADVANCE PAYMENT LIMITATION AMOUNT.—

‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), with respect to any certified individual, the advance 

payment limitation amount for any taxable year shall be 

an amount equal to the amount that such individual would 

be allowed as a credit under section 35 for such taxable 

year if such individual’s modified adjusted gross income 

(as defined in section 35(b)(3)) for such taxable year were 

an amount equal to the amount of such individual’s modified adjusted gross income shown on the return for the 

prior taxable year. 

18

‘‘(B) SUBSTITUTE AMOUNT.—For purposes of this section, 

the Secretary may substitute an amount for an individual’s advance payment limitation amount for any taxable 

year if the Secretary determines that such substitute 

amount more accurately reflects such individual’s modified 

adjusted gross income for such taxable year. 

‘‘(c) CERTIFIED INDIVIDUAL.—For purposes of this section, the 

term ‘certified individual’ means any individual for whom a qualified health insurance costs credit eligibility certificate is in effect. 

‘‘(d) QUALIFIED HEALTH INSURANCE COSTS CREDIT ELIGIBILITY

CERTIFICATE.—For purposes of this section, a qualified health insurance costs credit eligibility certificate is a statement certified by 

the Secretary of Labor or the Pension Benefit Guaranty Corporation (or by any other person or entity designated by the Secretary) 

which—

‘‘(1) certifies that the individual was an eligible individual 

(within the meaning of section 35(d)) as of the first day of any 

month, and 

‘‘(2) provides such other information as the Secretary may require for purposes of this section.’’. 

(b) DISCLOSURE OF RETURN INFORMATION FOR PURPOSES OF CARRYING OUT A PROGRAM FOR ADVANCE PAYMENT OF CREDIT FOR

HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.—

(1) IN GENERAL.—Subsection (l) of section 6103 of such Code 

(relating to disclosure of returns and return information for 

purposes other than tax administration) is amended by adding 

at the end the following new paragraph: 

‘‘(18) DISCLOSURE OF RETURN INFORMATION FOR PURPOSES OF

CARRYING OUT A PROGRAM FOR ADVANCE PAYMENT OF CREDIT

FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.—The 

Secretary may disclose to providers of health insurance for any 

certified individual (as defined in section 7527(c)) return information with respect to such certified individual only to the extent necessary to carry out the program established by section 

7527 (relating to advance payment of health insurance cost 

credit).’’. 

(2) PROCEDURES AND RECORDKEEPING RELATED TO DISCLOSURES.—Subsection (p) of such section is amended—

(A) in paragraph (3)(A) by striking ‘‘or (17)’’ and inserting ‘‘(17), or (18)’’, and 

(B) in paragraph (4) by inserting ‘‘or (17)’’ after ‘‘any 

other person described in subsection (l)(16)’’ each place it 

appears. 

(3) UNAUTHORIZED INSPECTION OF RETURNS OR RETURN INFORMATION.—Section 7213A(a)(1)(B) of such Code is amended 

by striking ‘‘section 6103(n)’’ and inserting ‘‘subsection (l)(18) 

or (n) of section 6103’’. 

(c) INFORMATION REPORTING.—

(1) IN GENERAL.—Subpart B of part III of subchapter A of 

chapter 61 of the Internal Revenue Code of 1986 (relating to 

information concerning transactions with other persons) is 

amended by inserting after section 6050S the following new 

section: 

19

‘‘SEC. 6050T. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS. 

‘‘(a) REQUIREMENT OF REPORTING.—Every person who is entitled 

to receive payments for any month of any calendar year under section 7527 (relating to advance payment of credit for health insurance costs of eligible individuals) with respect to any certified individual (as defined in section 7527(c)) shall, at such time as the Secretary may prescribe, make the return described in subsection (b) 

with respect to each such individual. 

‘‘(b) FORM AND MANNER OF RETURNS.—A return is described in 

this subsection if such return—

‘‘(1) is in such form as the Secretary may prescribe, and 

‘‘(2) contains—

‘‘(A) the name, address, and TIN of each individual referred to in subsection (a), 

‘‘(B) the number of months for which amounts were entitled to be received with respect to such individual under 

section 7527 (relating to advance payment of credit for 

health insurance costs of eligible individuals), 

‘‘(C) the amount entitled to be received for each such 

month, and 

‘‘(D) such other information as the Secretary may prescribe. 

‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVIDUALS WITH RESPECT TO WHOM INFORMATION IS REQUIRED.—Every person required to make a return under subsection (a) shall furnish to each 

individual whose name is required to be set forth in such return 

a written statement showing—

‘‘(1) the name and address of the person required to make 

such return and the phone number of the information contact 

for such person, and 

‘‘(2) the information required to be shown on the return with 

respect to such individual. 

The written statement required under the preceding sentence shall 

be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) is required to 

be made.’’. 

(2) ASSESSABLE PENALTIES.—

(A) Subparagraph (B) of section 6724(d)(1) of such Code 

(relating to definitions) is amended by redesignating 

clauses (xi) through (xvii) as clauses (xii) through (xviii), 

respectively, and by inserting after clause (x) the following 

new clause: 

‘‘(xi) section 6050T (relating to returns relating to 

credit for health insurance costs of eligible individuals),’’. 

(B) Paragraph (2) of section 6724(d) of such Code is 

amended by striking ‘‘or’’ at the end of subparagraph (Z), 

by striking the period at the end of subparagraph (AA) and 

inserting ‘‘, or’’, and by adding after subparagraph (AA) the 

following new subparagraph: 

‘‘(BB) section 6050T (relating to returns relating to credit for health insurance costs of eligible individuals).’’. 

(d) CLERICAL AMENDMENTS.—

20

(1) ADVANCE PAYMENT.—The table of sections for chapter 77 

of such Code is amended by adding at the end the following 

new item:

‘‘Sec. 7527. Advance payment of credit for health insurance costs of 

eligible individuals.’’.

(2) INFORMATION REPORTING.—The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code 

is amended by inserting after the item relating to section 

6050S the following new item:

‘‘Sec. 6050T. Returns relating to credit for health insurance costs of 

eligible individuals.’’.

(e) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on the date of the enactment of this Act. 

TITLE III—CUSTOMS 

REAUTHORIZATION 

SEC. 301. SHORT TITLE. 

This Act may be cited as the ‘‘Customs Border Security Act of 

2002’’. 

Subtitle A—United States Customs Service 

CHAPTER 1—DRUG ENFORCEMENT AND OTHER 

NONCOMMERCIAL AND COMMERCIAL OPERATIONS 

SEC. 311. AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS, COMMERCIAL OPERATIONS, AND AIR 

AND MARINE INTERDICTION. 

(a) NONCOMMERCIAL OPERATIONS.—Section 301(b)(1) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 

2075(b)(1)) is amended— (1) in subparagraph (A) to read as follows: 

‘‘(A) $899,121,000 for fiscal year 2002.’’; 

(2) in subparagraph (B) to read as follows: 

‘‘(B) $1,365,456,000 for fiscal year 2003.’’; and 

(3) by adding at the end the following: 

‘‘(C) $1,399,592,400 for fiscal year 2004.’’. 

(b) COMMERCIAL OPERATIONS.—

(1) IN GENERAL.—Section 301(b)(2)(A) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 

2075(b)(2)(A)) is amended—

(A) in clause (i) to read as follows: 

‘‘(i) $1,606,068,000 for fiscal year 2002.’’; 

(B) in clause (ii) to read as follows: 

‘‘(ii) $1,642,602,000 for fiscal year 2003.’’; and 

(C) by adding at the end the following: 

‘‘(iii) $1,683,667,050 for fiscal year 2004.’’. (2) AUTOMATED COMMERCIAL ENVIRONMENT COMPUTER SYS- TEM.—Of the amount made available for each of fiscal years 

2002 through 2004 under section 301(b)(2)(A) of the Customs 

Procedural Reform and Simplification Act of 1978 (19 U.S.C. 

2075(b)(2)(A)), as amended by paragraph (1), $308,000,000 

shall be available until expended for each such fiscal year for 

21

the development, establishment, and implementation of the 

Automated Commercial Environment computer system. 

(3) REPORTS.—Not later than 90 days after the date of the 

enactment of this Act, and not later than each subsequent 90-

day period, the Commissioner of Customs shall prepare and 

submit to the Committee on Ways and Means of the House of 

Representatives and the Committee on Finance of the Senate 

a report demonstrating that the development and establishment of the Automated Commercial Environment computer 

system is being carried out in a cost-effective manner and 

meets the modernization requirements of title VI of the North 

American Free Trade Agreement Implementation Act. 

(c) AIR AND MARINE INTERDICTION.—Section 301(b)(3) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 

2075(b)(3)) is amended—

(1) in subparagraph (A) to read as follows: 

‘‘(A) $177,860,000 for fiscal year 2002.’’; 

(2) in subparagraph (B) to read as follows: 

‘‘(B) $170,829,000 for fiscal year 2003.’’; and 

(3) by adding at the end the following: 

‘‘(C) $175,099,725 for fiscal year 2004.’’. 

(d) SUBMISSION OF OUT-YEAR BUDGET PROJECTIONS.—Section 

301(a) of the Customs Procedural Reform and Simplification Act of 

1978 (19 U.S.C. 2075(a)) is amended by adding at the end the following: 

‘‘(3) By not later than the date on which the President submits 

to Congress the budget of the United States Government for a fiscal year, the Commissioner of Customs shall submit to the Committee on Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate the projected amount of 

funds for the succeeding fiscal year that will be necessary for the 

operations of the Customs Service as provided for in subsection 

(b).’’. 

SEC. 312. ANTITERRORIST AND ILLICIT NARCOTICS DETECTION 

EQUIPMENT FOR THE UNITED STATES-MEXICO BORDER, 

UNITED STATES-CANADA BORDER, AND FLORIDA AND 

THE GULF COAST SEAPORTS. 

(a) FISCAL YEAR 2002.—Of the amounts made available for fiscal 

year 2002 under section 301(b)(1)(A) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(A)), as 

amended by section 311(a) of this Act, $90,244,000 shall be available until expended for acquisition and other expenses associated 

with implementation and deployment of antiterrorist and illicit 

narcotics detection equipment along the United States-Mexico border, the United States-Canada border, and Florida and the Gulf 

Coast seaports, as follows: 

(1) UNITED STATES-MEXICO BORDER.—For the United StatesMexico border, the following: 

(A) $6,000,000 for 8 Vehicle and Container Inspection 

Systems (VACIS). 

(B) $11,200,000 for 5 mobile truck x-rays with transmission and backscatter imaging. 

(C) $13,000,000 for the upgrade of 8 fixed-site truck xrays from the present energy level of 450,000 electron volts 

to 1,000,000 electron volts (1–MeV). 

22

(D) $7,200,000 for 8 1–MeV pallet x-rays. (E) $1,000,000 for 200 portable contraband detectors 

(busters) to be distributed among ports where the current 

allocations are inadequate. (F) $600,000 for 50 contraband detection kits to be distributed among all southwest border ports based on traffic 

volume. 

(G) $500,000 for 25 ultrasonic container inspection units 

to be distributed among all ports receiving liquid-filled 

cargo and to ports with a hazardous material inspection facility. (H) $2,450,000 for 7 automated targeting systems. 

(I) $360,000 for 30 rapid tire deflator systems to be distributed to those ports where port runners are a threat. (J) $480,000 for 20 portable Treasury Enforcement Communications Systems (TECS) terminals to be moved 

among ports as needed. (K) $1,000,000 for 20 remote watch surveillance camera 

systems at ports where there are suspicious activities at 

loading docks, vehicle queues, secondary inspection lanes, 

or areas where visual surveillance or observation is obscured. 

(L) $1,254,000 for 57 weigh-in-motion sensors to be distributed among the ports with the greatest volume of outbound traffic. 

(M) $180,000 for 36 AM traffic information radio stations, with 1 station to be located at each border crossing. (N) $1,040,000 for 260 inbound vehicle counters to be installed at every inbound vehicle lane. (O) $950,000 for 38 spotter camera systems to counter 

the surveillance of customs inspection activities by persons 

outside the boundaries of ports where such surveillance activities are occurring. (P) $390,000 for 60 inbound commercial truck transponders to be distributed to all ports of entry. 

(Q) $1,600,000 for 40 narcotics vapor and particle detectors to be distributed to each border crossing. 

(R) $400,000 for license plate reader automatic targeting 

software to be installed at each port to target inbound vehicles. 

(2) UNITED STATES-CANADA BORDER.—For the United StatesCanada border, the following: 

(A) $3,000,000 for 4 Vehicle and Container Inspection 

Systems (VACIS). 

(B) $8,800,000 for 4 mobile truck x-rays with transmission and backscatter imaging. 

(C) $3,600,000 for 4 1–MeV pallet x-rays. 

(D) $250,000 for 50 portable contraband detectors (busters) to be distributed among ports where the current allocations are inadequate. (E) $300,000 for 25 contraband detection kits to be distributed among ports based on traffic volume. (F) $240,000 for 10 portable Treasury Enforcement Communications Systems (TECS) terminals to be moved 

among ports as needed. 

23

(G) $400,000 for 10 narcotics vapor and particle detectors to be distributed to each border crossing based on traffic volume. 

(3) FLORIDA AND GULF COAST SEAPORTS.—For Florida and the 

Gulf Coast seaports, the following: (A) $4,500,000 for 6 Vehicle and Container Inspection 

Systems (VACIS). (B) $11,800,000 for 5 mobile truck x-rays with transmission and backscatter imaging. (C) $7,200,000 for 8 1–MeV pallet x-rays. (D) $250,000 for 50 portable contraband detectors (busters) to be distributed among ports where the current allocations are inadequate. (E) $300,000 for 25 contraband detection kits to be distributed among ports based on traffic volume. 

(b) FISCAL YEAR 2003.—Of the amounts made available for fiscal 

year 2003 under section 301(b)(1)(B) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(B)), as 

amended by section 311(a) of this Act, $9,000,000 shall be available 

until expended for the maintenance and support of the equipment 

and training of personnel to maintain and support the equipment 

described in subsection (a). 

(c) ACQUISITION OF TECHNOLOGICALLY SUPERIOR EQUIPMENT; 

TRANSFER OF FUNDS.— (1) IN GENERAL.—The Commissioner of Customs may use 

amounts made available for fiscal year 2002 under section 

301(b)(1)(A) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(A)), as amended by section 311(a) of this Act, for the acquisition of equipment other 

than the equipment described in subsection (a) if such other 

equipment— (A)(i) is technologically superior to the equipment described in subsection (a); and 

(ii) will achieve at least the same results at a cost that 

is the same or less than the equipment described in subsection (a); or 

(B) can be obtained at a lower cost than the equipment 

described in subsection (a). 

(2) TRANSFER OF FUNDS.—Notwithstanding any other provision of this section, the Commissioner of Customs may reallocate an amount not to exceed 10 percent of—

(A) the amount specified in any of subparagraphs (A) 

through (R) of subsection (a)(1) for equipment specified in 

any other of such subparagraphs (A) through (R); 

(B) the amount specified in any of subparagraphs (A) 

through (G) of subsection (a)(2) for equipment specified in 

any other of such subparagraphs (A) through (G); and 

(C) the amount specified in any of subparagraphs (A) 

through (E) of subsection (a)(3) for equipment specified in 

any other of such subparagraphs (A) through (E). 

SEC. 313. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS. 

As part of the annual performance plan for each of the fiscal 

years 2002 and 2003 covering each program activity set forth in the 

budget of the United States Customs Service, as required under 

section 1115 of title 31, United States Code, the Commissioner of 

24

Customs shall establish performance goals, performance indicators, 

and comply with all other requirements contained in paragraphs 

(1) through (6) of subsection (a) of such section with respect to each 

of the activities to be carried out pursuant to section 312. 

CHAPTER 2—CHILD CYBER-SMUGGLING CENTER OF 

THE CUSTOMS SERVICE 

SEC. 321. AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO 

PREVENT CHILD PORNOGRAPHY/CHILD SEXUAL EXPLOITATION. 

(a) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated to the Customs Service $10,000,000 for fiscal year 

2002 to carry out the program to prevent child pornography/child 

sexual exploitation established by the Child Cyber-Smuggling Center of the Customs Service. 

(b) USE OF AMOUNTS FOR CHILD PORNOGRAPHY CYBER TIPLINE.—

Of the amount appropriated under subsection (a), the Customs 

Service shall provide 3.75 percent of such amount to the National 

Center for Missing and Exploited Children for the operation of the 

child pornography cyber tipline of the Center and for increased 

public awareness of the tipline. 

CHAPTER 3—MISCELLANEOUS PROVISIONS 

SEC. 331. ADDITIONAL CUSTOMS SERVICE OFFICERS FOR UNITED 

STATES-CANADA BORDER. 

Of the amount made available for fiscal year 2002 under paragraphs (1) and (2)(A) of section 301(b) of the Customs Procedural 

Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)), as 

amended by section 311 of this Act, $28,300,000 shall be available 

until expended for the Customs Service to hire approximately 285 

additional Customs Service officers to address the needs of the offices and ports along the United States-Canada border. 

SEC. 332. STUDY AND REPORT RELATING TO PERSONNEL PRACTICES 

OF THE CUSTOMS SERVICE. 

(a) STUDY.—The Commissioner of Customs shall conduct a study 

of current personnel practices of the Customs Service, including an 

overview of performance standards and the effect and impact of the 

collective bargaining process on drug interdiction efforts of the Customs Service and a comparison of duty rotation policies of the Customs Service and other Federal agencies that employ similarly-situated personnel. 

(b) REPORT.—Not later than 120 days after the date of the enactment of this Act, the Commissioner of Customs shall submit to the 

Committee on Ways and Means of the House of Representatives 

and the Committee on Finance of the Senate a report containing 

the results of the study conducted under subsection (a). 

SEC. 333. STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING PROCEDURES OF THE CUSTOMS SERVICE. 

(a) STUDY.—(1) The Commissioner of Customs shall conduct a 

study of actions by the Customs Service to ensure that appropriate 

training is being provided to Customs Service personnel who are 

responsible for financial auditing of importers. 

(2) In conducting the study, the Commissioner—

25

(A) shall specifically identify those actions taken to comply 

with provisions of law that protect the privacy and trade secrets of importers, such as section 552(b) of title 5, United 

States Code, and section 1905 of title 18, United States Code; 

and 

(B) shall provide for public notice and comment relating to 

verification of the actions described in subparagraph (A). 

(b) REPORT.—Not later than 6 months after the date of the enactment of this Act, the Commissioner of Customs shall submit to the 

Committee on Ways and Means of the House of Representatives 

and the Committee on Finance of the Senate a report containing 

the results of the study conducted under subsection (a). 

SEC. 334. ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM; REPORTS. 

(a) ESTABLISHMENT AND IMPLEMENTATION.—

(1) IN GENERAL.—Not later than September 30, 2003, the 

Commissioner of Customs shall, in accordance with the audit 

of the Customs Service’s fiscal years 2000 and 1999 financial 

statements (as contained in the report of the Office of the Inspector General of the Department of the Treasury issued on 

February 23, 2001), establish and implement a cost accounting 

system for expenses incurred in both commercial and noncommercial operations of the Customs Service. 

(2) ADDITIONAL REQUIREMENT.—The cost accounting system 

described in paragraph (1) shall provide for an identification of 

expenses based on the type of operation, the port at which the 

operation took place, the amount of time spent on the operation by personnel of the Customs Service, and an identification of expenses based on any other appropriate classification 

necessary to provide for an accurate and complete accounting 

of the expenses. 

(b) REPORTS.—Beginning on the date of the enactment of this Act 

and ending on the date on which the cost accounting system described in subsection (a) is fully implemented, the Commissioner of 

Customs shall prepare and submit to Congress on a quarterly basis 

a report on the progress of implementing the cost accounting system pursuant to subsection (a). 

SEC. 335. STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTIVE RULINGS. 

(a) STUDY.—The Comptroller General shall conduct a study on 

the extent to which the Office of Regulations and Rulings of the 

Customs Service has made improvements to decrease the amount 

of time to issue prospective rulings from the date on which a request for the ruling is received by the Customs Service. 

(b) REPORT.—Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to the Committee on Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate a report containing the results of the study conducted under subsection (a). 

(c) DEFINITION.—In this section, the term ‘‘prospective ruling’’

means a ruling that is requested by an importer on goods that are 

proposed to be imported into the United States and that relates to 

the proper classification, valuation, or marking of such goods. 

26

SEC. 336. STUDY AND REPORT RELATING TO CUSTOMS USER FEES. 

(a) STUDY.—The Comptroller General shall conduct a study on 

the extent to which the amount of each customs user fee imposed 

under section 13031(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)) is commensurate with the 

level of services provided by the Customs Service relating to the fee 

so imposed. 

(b) REPORT.—Not later than 120 days after the date of the enactment of this Act, the Comptroller General shall submit to the Committee on Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate a report in classified form 

containing—

(1) the results of the study conducted under subsection (a); 

and 

(2) recommendations for the appropriate amount of the customs user fees if such results indicate that the fees are not 

commensurate with the level of services provided by the Customs Service.

SEC. 337. FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES. 

(a) IN GENERAL.—Section 13031(b)(9) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)) is 

amended as follows: 

(1) In subparagraph (A)—

(A) in the matter preceding clause (i), by striking ‘‘the 

processing of merchandise that is informally entered or released’’ and inserting ‘‘the processing of letters, documents, 

records, shipments, merchandise, or any other item that is 

valued at an amount under $2,000 (or such higher amount 

as the Secretary may set by regulation pursuant to section 

498 of the Tariff Act of 1930), whether or not such items 

are informally entered or released (except items entered or 

released for immediate exportation),’’; and 

(B) in clause (ii) to read as follows: 

‘‘(ii) In the case of an express consignment carrier facility or centralized hub facility, $.66 per individual airway 

bill or bill of lading.’’. 

(2) By redesignating subparagraph (B) as subparagraph (C) 

and inserting after subparagraph (A) the following: 

‘‘(B)(i) For fiscal year 2004 and subsequent fiscal years, the 

Secretary of the Treasury may adjust (not more than once per 

fiscal year) the amount described in subparagraph (A)(ii) to not 

less than $.35 but not more than $1.00 per individual airway 

bill or bill of lading. The Secretary shall provide notice in the 

Federal Register of a proposed adjustment under the preceding 

sentence and the reasons therefor and shall allow for public 

comment on the proposed adjustment. 

‘‘(ii) The payment required by subparagraph (A)(ii) shall be 

the only payment required for reimbursement of the Customs 

Service in connection with the processing of an individual airway bill or bill of lading in accordance with such subparagraph, except that the Customs Service may charge a fee to 

cover expenses of the Customs Service for adequate office 

space, equipment, furnishings, supplies, and security. 

27

‘‘(iii)(I) The payment required by subparagraph (A)(ii) and 

clause (ii) shall be paid on a quarterly basis 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) shall, in accordance with 

section 524 of the Tariff Act of 1930, be deposited as a refund 

to the 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) shall be paid to the 

Secretary of the Treasury, which is in lieu of the payment of 

fees under subsection (a)(10) of this section.’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

take effect on October 1, 2002. 

SEC. 338. NATIONAL CUSTOMS AUTOMATION PROGRAM. 

Section 411(b) of the Tariff Act of 1930 (19 U.S.C. 1411(b)) is 

amended by striking the second sentence and inserting the following: ‘‘The Secretary may, by regulation, require the electronic 

submission of information described in subsection (a) or any other 

information required to be submitted to the Customs Service separately pursuant to this subpart.’’. 

CHAPTER 4—ANTITERRORISM PROVISIONS 

SEC. 341. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN 

GOOD FAITH. 

(a) IMMUNITY.—Section 3061 of the Revised Statutes (19 U.S.C. 

482) is amended—

(1) by striking ‘‘Any of the officers’’ and inserting ‘‘(a) Any of 

the officers’’; and 

(2) by adding at the end the following: 

‘‘(b) Any officer or employee of the United States conducting a 

search of a person pursuant to subsection (a) shall not be held liable for any civil damages as a result of such search if the officer 

or employee performed the search in good faith.’’. 

(b) REQUIREMENT TO POST POLICY AND PROCEDURES FOR

SEARCHES OF PASSENGERS.—Not later than 30 days after the date 

of the enactment of this Act, the Commissioner of the Customs 

Service shall ensure that at each Customs border facility appropriate notice is posted that provides a summary of the policy and 

procedures of the Customs Service for searching passengers, including a statement of the policy relating to the prohibition on the conduct of profiling of passengers based on gender, race, color, religion, 

or ethnic background. 

SEC. 342. EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, 

OR STAFFING OF THE CUSTOMS SERVICE. 

Section 318 of the Tariff Act of 1930 (19 U.S.C. 1318) is amended—

28

(1) by striking ‘‘Whenever the President’’ and inserting ‘‘(a) 

Whenever the President’’; and 

(2) by adding at the end the following: 

‘‘(b)(1) Notwithstanding any other provision of law, the Secretary 

of the Treasury, when necessary to respond to a national emergency declared under the National Emergencies Act (50 U.S.C. 

1601 et seq.) or to a specific threat to human life or national interests, is authorized to take the following actions on a temporary 

basis: 

‘‘(A) Eliminate, consolidate, or relocate any office or port of 

entry of the Customs Service. 

‘‘(B) Modify hours of service, alter services rendered at any 

location, or reduce the number of employees at any location. 

‘‘(C) Take any other action that may be necessary to directly 

respond to the national emergency or specific threat. 

‘‘(2) Notwithstanding any other provision of law, the Commissioner of Customs, when necessary to respond to a specific threat 

to human life or national interests, is authorized to close temporarily any Customs office or port of entry or take any other lesser 

action that may be necessary to respond to the specific threat. 

‘‘(3) The Secretary of the Treasury or the Commissioner of Customs, as the case may be, shall notify the Committee on Ways and 

Means of the House of Representatives and the Committee on Finance of the Senate not later than 72 hours after taking any action 

under paragraph (1) or (2).’’. 

SEC. 343. MANDATORY ADVANCED ELECTRONIC INFORMATION FOR 

CARGO AND PASSENGERS. 

(a) CARGO INFORMATION.—

(1) IN GENERAL.—Section 431(b) of the Tariff Act of 1930 (19 

U.S.C. 1431(b)) is amended—

(A) in the first sentence, by striking ‘‘Any manifest’’ and 

inserting ‘‘(1) Any manifest’’; and 

(B) by adding at the end the following: 

‘‘(2)(A) In addition to any other requirement under this section, 

for each land, air, or vessel carrier required to make entry under 

the customs laws of the United States, the pilot, the master, operator, or owner of such carrier (or the authorized agent of such operator or owner) shall provide by electronic transmission cargo manifest information in advance of such entry in such manner, time, 

and form as prescribed under regulations by the Secretary. The 

Secretary may exclude any class of land, air, or vessel carrier for 

which the Secretary concludes the requirements of this subparagraph are not necessary. 

‘‘(B) The Secretary shall cooperate with other appropriate Federal departments and agencies for the purpose of providing to such 

departments and agencies as soon as practicable cargo manifest information obtained pursuant to subparagraph (A). In carrying out 

the preceding sentence, the Secretary, to the maximum extent 

practicable, shall protect the privacy and property rights with respect to the cargo involved.’’. 

(2) CONFORMING AMENDMENTS.—Subparagraphs (A) and (C) 

of section 431(d)(1) of such Act are each amended by inserting 

before the semicolon ‘‘or subsection (b)(2)’’. 

29

(b) PASSENGER INFORMATION.—Part II of title IV of the Tariff Act 

of 1930 (19 U.S.C. 1431 et seq.) is amended by inserting after section 431 the following:

‘‘SEC. 432. PASSENGER AND CREW INFORMATION REQUIRED FOR 

LAND, AIR, OR VESSEL CARRIERS. 

‘‘(a) IN GENERAL.—For every person arriving or departing on a 

land, air, or vessel carrier required to make entry or obtain clearance under the customs laws of the United States, the pilot, the 

master, operator, or owner of such carrier (or the authorized agent 

of such operator or owner) shall provide by electronic transmission 

information described in subsection (b) in advance of such entry or 

clearance in such manner, time, and form as prescribed under regulations by the Secretary. 

‘‘(b) INFORMATION DESCRIBED.—The information described in this 

subsection shall include for each person described in subsection (a), 

if applicable, the person’s—

‘‘(1) full name; 

‘‘(2) date of birth and citizenship; 

‘‘(3) gender; 

‘‘(4) passport number and country of issuance; 

‘‘(5) United States visa number or resident alien card number; 

‘‘(6) passenger name record; and 

‘‘(7) such additional information that the Secretary, by regulation, determines is reasonably necessary to ensure aviation 

and maritime safety pursuant to the laws enforced or administered by the Customs Service. 

‘‘(c) SHARING OF INFORMATION.—The Secretary shall cooperate 

with other appropriate Federal departments and agencies for the 

purpose of providing to such departments and agencies as soon as 

practicable electronic transmission information obtained pursuant 

to subsection (a). In carrying out the preceding sentence, the Secretary, to the maximum extent practicable, shall protect the privacy rights of the person with respect to which the information relates.’’. 

(c) DEFINITION.—Section 401 of the Tariff Act of 1930 (19 U.S.C. 

1401) is amended by adding at the end the following: 

‘‘(t) The term ‘land, air, or vessel carrier’ means a land, air, or 

vessel carrier, as the case may be, that transports goods or passengers for payment or other consideration, including money or 

services rendered.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall take effect beginning 45 days after the date of the enactment 

of this Act. 

SEC. 344. BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND 

IN OUTBOUND MAIL. 

The Tariff Act of 1930 is amended by inserting after section 582 

the following: 

‘‘SEC. 583. EXAMINATION OF OUTBOUND MAIL. 

‘‘(a) EXAMINATION.—

‘‘(1) IN GENERAL.—For purposes of ensuring compliance with 

the Customs laws of the United States and other laws enforced 

by the Customs Service, including the provisions of law described in paragraph (2), a Customs officer may, subject to the 

30

provisions of this section, stop and search at the border, without a search warrant, mail of domestic origin transmitted for 

export by the United States Postal Service and foreign mail 

transiting the United States that is being imported or exported 

by the United States Postal Service. ‘‘(2) PROVISIONS OF LAW DESCRIBED.—The provisions of law 

described in this paragraph are the following: ‘‘(A) Section 5316 of title 31, United States Code (relating to reports on exporting and importing monetary instruments). ‘‘(B) Sections 1461, 1463, 1465, and 1466 and chapter 

110 of title 18, United States Code (relating to obscenity 

and child pornography). ‘‘(C) Section 1003 of the Controlled Substances Import 

and Export Act (21 U.S.C. 953; relating to exportation of 

controlled substances). ‘‘(D) The Export Administration Act of 1979 (50 U.S.C. 

app. 2401 et seq.). ‘‘(E) Section 38 of the Arms Export Control Act (22 

U.S.C. 2778). ‘‘(F) The International Emergency Economic Powers Act 

(50 U.S.C. 1701 et seq.). ‘‘(b) SEARCH OF MAIL NOT SEALED AGAINST INSPECTION AND

OTHER MAIL.—Mail not sealed against inspection under the postal 

laws and regulations of the United States, mail which bears a customs declaration, and mail with respect to which the sender or addressee has consented in writing to search, may be searched by a 

Customs officer. ‘‘(c) SEARCH OF MAIL SEALED AGAINST INSPECTION.—(1) Mail 

sealed against inspection under the postal laws and regulations of 

the United States may be searched by a Customs officer, subject to 

paragraph (2), upon reasonable cause to suspect that such mail 

contains one or more of the following: ‘‘(A) Monetary instruments, as defined in section 1956 of title 

18, United States Code. 

‘‘(B) A weapon of mass destruction, as defined in section 

2332a(b) of title 18, United States Code. 

‘‘(C) A drug or other substance listed in schedule I, II, III, 

or IV in section 202 of the Controlled Substances Act (21 

U.S.C. 812). 

‘‘(D) National defense and related information transmitted in 

violation of any of sections 793 through 798 of title 18, United 

States Code. 

‘‘(E) Merchandise mailed in violation of section 1715 or 1716 

of title 18, United States Code. 

‘‘(F) Merchandise mailed in violation of any provision of 

chapter 71 (relating to obscenity) or chapter 110 (relating to 

sexual exploitation and other abuse of children) of title 18, 

United States Code. 

‘‘(G) Merchandise mailed in violation of the Export Administration Act of 1979 (50 U.S.C. app. 2401 et seq.). 

‘‘(H) Merchandise mailed in violation of section 38 of the 

Arms Export Control Act (22 U.S.C. 2778). 

‘‘(I) Merchandise mailed in violation of the International 

Emergency Economic Powers Act (50 U.S.C. 1701 et seq.). 

31

‘‘(J) Merchandise mailed in violation of the Trading with the 

Enemy Act (50 U.S.C. app. 1 et seq.). ‘‘(K) Merchandise subject to any other law enforced by the 

Customs Service. ‘‘(2) No person acting under authority of paragraph (1) shall read, 

or authorize any other person to read, any correspondence contained in mail sealed against inspection unless prior to so reading— ‘‘(A) a search warrant has been issued pursuant to Rule 41, 

Federal Rules of Criminal Procedure; or ‘‘(B) the sender or addressee has given written authorization 

for such reading.’’. 

SEC. 345. AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF CUSTOMS OPERATIONS IN NEW YORK CITY. 

(a) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—There is authorized to be appropriated for 

the reestablishment of operations of the Customs Service in 

New York, New York, such sums as may be necessary for fiscal 

year 2002. 

(2) OPERATIONS DESCRIBED.—The operations referred to in 

paragraph (1) include, but are not limited to, the following: 

(A) Operations relating to the Port Director of New York 

City, the New York Customs Management Center (including the Director of Field Operations), and the Special 

Agent-In-Charge for New York. 

(B) Commercial operations, including textile enforcement 

operations and salaries and expenses of— (i) trade specialists who determine the origin and 

value of merchandise; 

(ii) analysts who monitor the entry data into the 

United States of textiles and textile products; and 

(iii) Customs officials who work with foreign governments to examine textile makers and verify entry information. 

(b) AVAILABILITY.—Amounts appropriated pursuant to the authorization of appropriations under subsection (a) are authorized to 

remain available until expended.

CHAPTER 5—TEXTILE TRANSSHIPMENT PROVISIONS 

SEC. 351. GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY 

CUSTOMS SERVICE. 

(a) GAO AUDIT.—The Comptroller General of the United States 

shall conduct an audit of the system established and carried out by 

the Customs Service to monitor textile transshipment. 

(b) REPORT.—Not later than 9 months after the date of enactment of this Act, the Comptroller General shall submit to the Committee on Ways and Means of the House of Representatives and 

Committee on Finance of the Senate a report that contains the results of the study conducted under subsection (a), including recommendations for improvements to the transshipment monitoring 

system if applicable. 

(c) TRANSSHIPMENT DESCRIBED.—Transshipment within the 

meaning of this section has occurred when preferential treatment 

under any provision of law has been claimed for a textile or apparel 

article on the basis of material false information concerning the 

32

country of origin, manufacture, processing, or assembly of the article or any of its components. For purposes of the preceding sentence, false information is material if disclosure of the true information would mean or would have meant that the article is or was 

ineligible for preferential treatment under the provision of law in 

question.

SEC. 352. AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT ENFORCEMENT OPERATIONS. 

(a) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—There is authorized to be appropriated for 

textile transshipment enforcement operations of the Customs 

Service $9,500,000 for fiscal year 2002. 

(2) AVAILABILITY.—Amounts appropriated pursuant to the 

authorization of appropriations under paragraph (1) are authorized to remain available until expended. 

(b) USE OF FUNDS.—Of the amount appropriated pursuant to the 

authorization of appropriations under subsection (a), the following 

amounts are authorized to be made available for the following purposes: 

(1) IMPORT SPECIALISTS.—$1,463,000 for 21 Customs import 

specialists to be assigned to selected ports for documentation 

review to support detentions and exclusions and 1 additional 

Customs import specialist assigned to the Customs headquarters textile program to administer the program and provide oversight. 

(2) INSPECTORS.—$652,080 for 10 Customs inspectors to be 

assigned to selected ports to examine targeted high-risk shipments. 

(3) INVESTIGATORS.—(A) $1,165,380 for 10 investigators to be 

assigned to selected ports to investigate instances of smuggling, quota and trade agreement circumvention, and use of 

counterfeit visas to enter inadmissible goods. 

(B) $149,603 for 1 investigator to be assigned to Customs 

headquarters textile program to coordinate and ensure implementation of textile production verification team results from 

an investigation perspective. 

(4) INTERNATIONAL TRADE SPECIALISTS.—$226,500 for 3 international trade specialists to be assigned to Customs headquarters to be dedicated to illegal textile transshipment policy 

issues and other free trade agreement enforcement issues. 

(5) PERMANENT IMPORT SPECIALISTS FOR HONG KONG.—

$500,000 for 2 permanent import specialist positions and 

$500,000 for 2 investigators to be assigned to Hong Kong to 

work with Hong Kong and other government authorities in 

Southeast Asia to assist such authorities pursue proactive enforcement of bilateral trade agreements. 

(6) VARIOUS PERMANENT TRADE POSITIONS.—$3,500,000 for 

the following: 

(A) 2 permanent positions to be assigned to the Customs 

attache ́ office in Central America to address trade enforcement issues for that region. 

(B) 2 permanent positions to be assigned to the Customs 

attache ́ office in South Africa to address trade enforcement 

issues pursuant to the African Growth and Opportunity 

Act (title I of Public Law 106–200). 

33

(C) 4 permanent positions to be assigned to the Customs 

attache ́ office in Mexico to address the threat of illegal textile transshipment through Mexico and other related 

issues under the North American Free Trade Agreement 

Act. 

(D) 2 permanent positions to be assigned to the Customs 

attache ́ office in Seoul, South Korea, to address the trade 

issues in the geographic region. 

(E) 2 permanent positions to be assigned to the proposed 

Customs attache ́ office in New Delhi, India, to address the 

threat of illegal textile transshipment and other trade enforcement issues. 

(F) 2 permanent positions to be assigned to the Customs 

attache ́ office in Rome, Italy, to address trade enforcement 

issues in the geographic region, including issues under free 

trade agreements with Jordan and Israel. 

(7) ATTORNEYS.—$179,886 for 2 attorneys for the Office of 

the Chief Counsel of the Customs Service to pursue cases regarding illegal textile transshipment. 

(8) AUDITORS.—$510,000 for 6 Customs auditors to perform 

internal control reviews and document and record reviews of 

suspect importers. 

(9) ADDITIONAL TRAVEL FUNDS.—$250,000 for deployment of 

additional textile production verification teams to sub-Saharan 

Africa. 

(10) TRAINING.—(A) $75,000 for training of Customs personnel. 

(B) $200,000 for training for foreign counterparts in risk 

management analytical techniques and for teaching factory inspection techniques, model law Development, and enforcement 

techniques. 

(11) OUTREACH.—$60,000 for outreach efforts to United 

States importers. 

SEC. 353. IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT. 

Of the amount made available for fiscal year 2002 under section 

301(b)(2)(A) of the Customs Procedural Reform and Simplification 

Act of 1978 (19 U.S.C. 2075(b)(2)(A)), as amended by section 

311(b)(1) of this Act, $1,317,000 shall be available until expended 

for the Customs Service to provide technical assistance to help subSaharan Africa countries develop and implement effective visa and 

anti-transshipment systems as required by the African Growth and 

Opportunity Act (title I of Public Law 106–200), as follows: 

(1) TRAVEL FUNDS.—$600,000 for import specialists, special 

agents, and other qualified Customs personnel to travel to subSaharan Africa countries to provide technical assistance in developing and implementing effective visa and anti-transshipment systems. 

(2) IMPORT SPECIALISTS.—$266,000 for 4 import specialists to 

be assigned to Customs headquarters to be dedicated to providing technical assistance to sub-Saharan African countries 

for developing and implementing effective visa and anti-transshipment systems. 

(3) DATA RECONCILIATION ANALYSTS.—$151,000 for 2 data 

reconciliation analysts to review apparel shipments. 

34

(4) SPECIAL AGENTS.—$300,000 for 2 special agents to be assigned to Customs headquarters to be available to provide 

technical assistance to sub-Saharan African countries in the 

performance of investigations and other enforcement initiatives. 

Subtitle B—Office of the United States 

Trade Representative 

SEC. 361. AUTHORIZATION OF APPROPRIATIONS. 

(a) IN GENERAL.—Section 141(g)(1) of the Trade Act of 1974 (19 

U.S.C. 2171(g)(1)) is amended— (1) in subparagraph (A)— (A) in the matter preceding clause (i), by striking ‘‘not to 

exceed’’; 

(B) in clause (i) to read as follows: ‘‘(i) $30,000,000 for fiscal year 2002.’’; 

(C) in clause (ii) to read as follows: ‘‘(ii) $32,300,000 for fiscal year 2003.’’; and 

(D) by adding at the end the following: ‘‘(iii) $33,108,000 for fiscal year 2004.’’; and 

(2) in subparagraph (B)— (A) in clause (i), by adding ‘‘and’’ at the end; 

(B) by striking clause (ii); and 

(C) by redesignating clause (iii) as clause (ii). 

(b) SUBMISSION OF OUT-YEAR BUDGET PROJECTIONS.—Section 

141(g) of the Trade Act of 1974 (19 U.S.C. 2171(g)) is amended by 

adding at the end the following: 

‘‘(3) By not later than the date on which the President submits 

to Congress the budget of the United States Government for a fiscal year, the United States Trade Representative shall submit to 

the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate the projected 

amount of funds for the succeeding fiscal year that will be necessary for the Office to carry out its functions.’’. 

(c) ADDITIONAL STAFF FOR OFFICE OF ASSISTANT U.S. TRADE REPRESENTATIVE FOR CONGRESSIONAL AFFAIRS.—

(1) IN GENERAL.—There is authorized to be appropriated 

such sums as may be necessary for fiscal year 2002 for the salaries and expenses of two additional legislative specialist employee positions within the Office of the Assistant United 

States Trade Representative for Congressional Affairs. 

(2) AVAILABILITY.—Amounts appropriated pursuant to the 

authorization of appropriations under paragraph (1) are authorized to remain available until expended. 

Subtitle C—United States International 

Trade Commission 

SEC. 371. AUTHORIZATION OF APPROPRIATIONS. 

(a) IN GENERAL.—Section 330(e)(2)(A) of the Tariff Act of 1930 

(19 U.S.C. 1330(e)(2)) is amended—

(1) in clause (i) to read as follows: 

35

‘‘(i) $51,440,000 for fiscal year 2002.’’; 

(2) in clause (ii) to read as follows: 

‘‘(ii) $54,000,000 for fiscal year 2003.’’; and 

(3) by adding at the end the following: 

‘‘(iii) $57,240,000 for fiscal year 2004.’’. 

(b) SUBMISSION OF OUT-YEAR BUDGET PROJECTIONS.—Section 

330(e) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is amended 

by adding at the end the following: 

‘‘(4) By not later than the date on which the President submits 

to Congress the budget of the United States Government for a fiscal year, the Commission shall submit to the Committee on Ways 

and Means of the House of Representatives and the Committee on 

Finance of the Senate the projected amount of funds for the succeeding fiscal year that will be necessary for the Commission to 

carry out its functions.’’. 

Subtitle D—Other trade provisions 

SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT 

FROM DUTY ACQUIRED ABROAD BY UNITED STATES RESIDENTS. 

(a) IN GENERAL.—Subheading 9804.00.65 of the Harmonized Tariff Schedule of the United States is amended in the article description column by striking ‘‘$400’’ and inserting ‘‘$800’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall take effect 90 days after the date of the enactment of this Act. 

SEC. 382. REGULATORY AUDIT PROCEDURES. 

Section 509(b) of the Tariff Act of 1930 (19 U.S.C. 1509(b)) is 

amended by adding at the end the following: 

‘‘(6)(A) If during the course of any audit concluded under this 

subsection, the Customs Service identifies overpayments of duties or fees or over-declarations of quantities or values that are 

within the time period and scope of the audit that the Customs 

Service has defined, then in calculating the loss of revenue or 

monetary penalties under section 592, the Customs Service 

shall treat the overpayments or over-declarations on finally liquidated entries as an offset to any underpayments or underdeclarations also identified on finally liquidated entries if such 

overpayments or over-declarations were not made by the person being audited for the purpose of violating any provision of 

law. 

‘‘(B) Nothing in this paragraph shall be construed to authorize a refund not otherwise authorized under section 520.’’.

36

DIVISION B—BIPARTISAN TRADE 

PROMOTION AUTHORITY 

TITLE XXI—TRADE PROMOTION 

AUTHORITY 

SEC. 2101. SHORT TITLE AND FINDINGS. 

(a) SHORT TITLE.—This title may be cited as the ‘‘Bipartisan 

Trade Promotion Authority Act of 2002’’. 

(b) FINDINGS.—The Congress makes the following findings: 

(1) The expansion of international trade is vital to the national security of the United States. Trade is critical to the economic growth and strength of the United States and to its 

leadership in the world. Stable trading relationships promote 

security and prosperity. Trade agreements today serve the 

same purposes that security pacts played during the Cold War, 

binding nations together through a series of mutual rights and 

obligations. Leadership by the United States in international 

trade fosters open markets, democracy, and peace throughout 

the world. 

(2) The national security of the United States depends on its 

economic security, which in turn is founded upon a vibrant and 

growing industrial base. Trade expansion has been the engine 

of economic growth. Trade agreements maximize opportunities 

for the critical sectors and building blocks of the economy of 

the United States, such as information technology, telecommunications and other leading technologies, basic industries, capital equipment, medical equipment, services, agriculture, environmental technology, and intellectual property. 

Trade will create new opportunities for the United States and 

preserve the unparalleled strength of the United States in economic, political, and military affairs. The United States, secured by expanding trade and economic opportunities, will 

meet the challenges of the twenty-first century. 

(3) At the same time, the recent pattern of decisions by dispute settlement panels and the Appellate Body of the World 

Trade Organization to impose obligations and restrictions on 

the use of antidumping and countervailing measures by WTO 

members under the Antidumping Agreement and the Agreement on Subsidies and Countervailing Measures has raised 

concerns, and Congress is concerned that dispute settlement 

panels and the Appellate Body of the WTO appropriately apply 

the standard of review contained in Article 17.6 of the Antidumping Agreement, to provide deference to a permissible interpretation by a WTO member of provisions of the Antidumping Agreement, and to the evaluation by a WTO member 

of the facts where that evaluation is unbiased and objective 

and the establishment of the facts is proper. 

SEC. 2102. TRADE NEGOTIATING OBJECTIVES. 

(a) OVERALL TRADE NEGOTIATING OBJECTIVES.—The overall trade 

negotiating objectives of the United States for agreements subject 

to the provisions of section 2103 are—

37

(1) to obtain more open, equitable, and reciprocal market access; 

(2) to obtain the reduction or elimination of barriers and distortions that are directly related to trade and that decrease 

market opportunities for United States exports or otherwise 

distort United States trade; 

(3) to further strengthen the system of international trading 

disciplines and procedures, including dispute settlement; 

(4) to foster economic growth, raise living standards, and 

promote full employment in the United States and to enhance 

the global economy; 

(5) to ensure that trade and environmental policies are mutually supportive and to seek to protect and preserve the environment and enhance the international means of doing so, 

while optimizing the use of the world’s resources; 

(6) to promote respect for worker rights and the rights of 

children consistent with core labor standards of the International Labor Organization (as defined in section 2111(2)) and 

an understanding of the relationship between trade and worker rights; and

(7) to seek provisions in trade agreements under which parties to those agreements strive to ensure that they do not 

weaken or reduce the protections afforded in domestic environmental and labor laws as an encouragement for trade. 

(b) PRINCIPAL TRADE NEGOTIATING OBJECTIVES.—

(1) TRADE BARRIERS AND DISTORTIONS.—The principal negotiating objectives of the United States regarding trade barriers 

and other trade distortions are—

(A) to expand competitive market opportunities for 

United States exports and to obtain fairer and more open 

conditions of trade by reducing or eliminating tariff and 

nontariff barriers and policies and practices of foreign governments directly related to trade that decrease market 

opportunities for United States exports or otherwise distort United States trade; and 

(B) to obtain reciprocal tariff and nontariff barrier elimination agreements, with particular attention to those tariff 

categories covered in section 111(b) of the Uruguay Round 

Agreements Act (19 U.S.C. 3521(b)). 

(2) TRADE IN SERVICES.—The principal negotiating objective 

of the United States regarding trade in services is to reduce or 

eliminate barriers to international trade in services, including 

regulatory and other barriers that deny national treatment 

and market access or unreasonably restrict the establishment 

or operations of service suppliers. 

(3) FOREIGN INVESTMENT.—The principal negotiating objective of the United States regarding foreign investment is to reduce or eliminate artificial or trade-distorting barriers to traderelated foreign investment and, recognizing that United States 

law on the whole provides a high level of protection for investment, consistent with or greater than the level required by 

international law, to secure for investors important rights comparable to those that would be available under United States 

legal principles and practice, by—

38

(A) reducing or eliminating exceptions to the principle of 

national treatment; 

(B) freeing the transfer of funds relating to investments; 

(C) reducing or eliminating performance requirements, 

forced technology transfers, and other unreasonable barriers to the establishment and operation of investments; 

(D) seeking to establish standards for expropriation and 

compensation for expropriation, consistent with United 

States legal principles and practice;

(E) providing meaningful procedures for resolving investment disputes; 

(F) seeking to improve mechanisms used to resolve disputes between an investor and a government through—

(i) mechanisms to eliminate frivolous claims; and 

(ii) procedures to ensure the efficient selection of arbitrators and the expeditious disposition of claims;

(G) providing an appellate or similar review mechanism 

to correct manifestly erroneous interpretations of law; and 

(H) ensuring the fullest measure of transparency in the 

dispute settlement mechanism, to the extent consistent 

with the need to protect information that is classified or 

business confidential, by—

(i) ensuring that all requests for dispute settlement 

are promptly made public; 

(ii) ensuring that—

(I) all proceedings, submissions, findings, and 

decisions are promptly made public; and 

(II) all hearings are open to the public; and 

(iii) establishing a mechanism for acceptance of amicus curiae submissions from businesses, unions, and 

nongovernmental organizations.

(4) INTELLECTUAL PROPERTY.—The principal negotiating objectives of the United States regarding trade-related intellectual property are—

(A) to further promote adequate and effective protection 

of intellectual property rights, including through—

(i)(I) ensuring accelerated and full implementation 

of the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section 101(d)(15) 

of the Uruguay Round Agreements Act (19 U.S.C. 

3511(d)(15)), particularly with respect to meeting enforcement obligations under that agreement; and 

(II) ensuring that the provisions of any multilateral 

or bilateral trade agreement governing intellectual 

property rights that is entered into by the United 

States reflect a standard of protection similar to that 

found in United States law; 

(ii) providing strong protection for new and emerging technologies and new methods of transmitting and 

distributing products embodying intellectual property; 

(iii) preventing or eliminating discrimination with 

respect to matters affecting the availability, acquisition, scope, maintenance, use, and enforcement of intellectual property rights; 

39

(iv) ensuring that standards of protection and enforcement keep pace with technological developments, 

and in particular ensuring that rightholders have the 

legal and technological means to control the use of 

their works through the Internet and other global 

communication media, and to prevent the unauthorized use of their works; and 

(v) providing strong enforcement of intellectual property rights, including through accessible, expeditious, 

and effective civil, administrative, and criminal enforcement mechanisms; and 

(B) to secure fair, equitable, and nondiscriminatory market access opportunities for United States persons that 

rely upon intellectual property protection. 

(5) TRANSPARENCY.—The principal negotiating objective of 

the United States with respect to transparency is to obtain 

wider and broader application of the principle of transparency 

through—

(A) increased and more timely public access to information regarding trade issues and the activities of international trade institutions; 

(B) increased openness at the WTO and other international trade fora by increasing public access to appropriate meetings, proceedings, and submissions, including 

with regard to dispute settlement and investment; and 

(C) increased and more timely public access to all notifications and supporting documentation submitted by parties to the WTO. 

(6) ANTI-CORRUPTION.—The principal negotiating objectives 

of the United States with respect to the use of money or other 

things of value to influence acts, decisions, or omissions of foreign governments or officials or to secure any improper advantage in a manner affecting trade are— (A) to obtain high standards and appropriate domestic 

enforcement mechanisms applicable to persons from all 

countries participating in the applicable trade agreement 

that prohibit such attempts to influence acts, decisions, or 

omissions of foreign governments; and 

(B) to ensure that such standards do not place United 

States persons at a competitive disadvantage in international trade. 

(7) IMPROVEMENT OF THE WTO AND MULTILATERAL TRADE

AGREEMENTS.—The principal negotiating objectives of the 

United States regarding the improvement of the World Trade 

Organization, the Uruguay Round Agreements, and other multilateral and bilateral trade agreements are—

(A) to achieve full implementation and extend the coverage of the World Trade Organization and such agreements to products, sectors, and conditions of trade not adequately covered; and 

(B) to expand country participation in and enhancement 

of the Information Technology Agreement and other trade 

agreements. 

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40

ulation or other practices by foreign governments to provide a 

competitive advantage to their domestic producers, service providers, or investors and thereby reduce market access for 

United States goods, services, and investments are—

(A) to achieve increased transparency and opportunity 

for the participation of affected parties in the development 

of regulations; 

(B) to require that proposed regulations be based on 

sound science, cost-benefit analysis, risk assessment, or 

other objective evidence; 

(C) to establish consultative mechanisms among parties 

to trade agreements to promote increased transparency in 

developing guidelines, rules, regulations, and laws for government procurement and other regulatory regimes; and 

(D) to achieve the elimination of government measures 

such as price controls and reference pricing which deny 

full market access for United States products. 

(9) ELECTRONIC COMMERCE.—The principal negotiating objectives of the United States with respect to electronic commerce 

are—

(A) to ensure that current obligations, rules, disciplines, 

and commitments under the World Trade Organization 

apply to electronic commerce; 

(B) to ensure that—

(i) electronically delivered goods and services receive 

no less favorable treatment under trade rules and 

commitments than like products delivered in physical 

form; and 

(ii) the classification of such goods and services ensures the most liberal trade treatment possible;

(C) to ensure that governments refrain from implementing trade-related measures that impede electronic 

commerce; 

(D) where legitimate policy objectives require domestic 

regulations that affect electronic commerce, to obtain commitments that any such regulations are the least restrictive on trade, nondiscriminatory, and transparent, and 

promote an open market environment; and 

(E) to extend the moratorium of the World Trade Organization on duties on electronic transmissions. 

(10) RECIPROCAL TRADE IN AGRICULTURE.—(A) The principal 

negotiating objective of the United States with respect to agriculture is to obtain competitive opportunities for United States 

exports of agricultural commodities in foreign markets substantially equivalent to the competitive opportunities afforded 

foreign exports in United States markets and to achieve fairer 

and more open conditions of trade in bulk, specialty crop, and 

value-added commodities by—

(i) reducing or eliminating, by a date certain, tariffs or 

other charges that decrease market opportunities for 

United States exports—

(I) giving priority to those products that are subject 

to significantly higher tariffs or subsidy regimes of 

major producing countries; and 

41

(II) providing reasonable adjustment periods for 

United States import-sensitive products, in close consultation with the Congress on such products before 

initiating tariff reduction negotiations; 

(ii) reducing tariffs to levels that are the same as or 

lower than those in the United States; 

(iii) reducing or eliminating subsidies that decrease market opportunities for United States exports or unfairly distort agriculture markets to the detriment of the United 

States; 

(iv) allowing the preservation of programs that support 

family farms and rural communities but do not distort 

trade; 

(v) developing disciplines for domestic support programs, 

so that production that is in excess of domestic food security needs is sold at world prices; 

(vi) eliminating Government policies that create pricedepressing surpluses; 

(vii) eliminating state trading enterprises whenever possible; 

(viii) developing, strengthening, and clarifying rules and 

effective dispute settlement mechanisms to eliminate practices that unfairly decrease United States market access 

opportunities or distort agricultural markets to the detriment of the United States, particularly with respect to 

import-sensitive products, including—

(I) unfair or trade-distorting activities of state trading enterprises and other administrative mechanisms, 

with emphasis on requiring price transparency in the 

operation of state trading enterprises and such other 

mechanisms in order to end cross subsidization, price 

discrimination, and price undercutting; 

(II) unjustified trade restrictions or commercial requirements, such as labeling, that affect new technologies, including biotechnology; 

(III) unjustified sanitary or phytosanitary restrictions, including those not based on scientific principles 

in contravention of the Uruguay Round Agreements;

(IV) other unjustified technical barriers to trade; 

and 

(V) restrictive rules in the administration of tariff 

rate quotas; 

(ix) eliminating practices that adversely affect trade in 

perishable or cyclical products, while improving import relief mechanisms to recognize the unique characteristics of 

perishable and cyclical agriculture; 

(x) ensuring that the use of import relief mechanisms for 

perishable and cyclical agriculture are as accessible and 

timely to growers in the United States as those mechanisms that are used by other countries; 

(xi) taking into account whether a party to the negotiations has failed to adhere to the provisions of already existing trade agreements with the United States or has circumvented obligations under those agreements; 

42

(xii) taking into account whether a product is subject to 

market distortions by reason of a failure of a major producing country to adhere to the provisions of already existing trade agreements with the United States or by the circumvention by that country of its obligations under those 

agreements; 

(xiii) otherwise ensuring that countries that accede to 

the World Trade Organization have made meaningful market liberalization commitments in agriculture; 

(xiv) taking into account the impact that agreements 

covering agriculture to which the United States is a party, 

including the North American Free Trade Agreement, 

have on the United States agricultural industry; and 

(xv) maintaining bona fide food assistance programs and 

preserving United States market development and export 

credit programs. 

(B)(i) Before commencing negotiations with respect to agriculture, the United States Trade Representative, in consultation with the Congress, shall seek to develop a position on the 

treatment of seasonal and perishable agricultural products to 

be employed in the negotiations in order to develop an international consensus on the treatment of seasonal or perishable 

agricultural products in investigations relating to dumping and 

safeguards and in any other relevant area. 

(ii) During any negotiations on agricultural subsidies, the 

United States Trade Representative shall seek to establish the 

common base year for calculating the Aggregated Measurement of Support (as defined in the Agreement on Agriculture) 

as the end of each country’s Uruguay Round implementation 

period, as reported in each country’s Uruguay Round market 

access schedule. 

(iii) The negotiating objective provided in subparagraph (A) 

applies with respect to agricultural matters to be addressed in 

any trade agreement entered into under section 2103(a) or (b), 

including any trade agreement entered into under section 

2103(a) or (b) that provides for accession to a trade agreement 

to which the United States is already a party, such as the 

North American Free Trade Agreement and the United StatesCanada Free Trade Agreement. 

(11) LABOR AND THE ENVIRONMENT.—The principal negotiating objectives of the United States with respect to labor and 

the environment are—

(A) to ensure that a party to a trade agreement with the 

United States does not fail to effectively enforce its environmental or labor laws, through a sustained or recurring 

course of action or inaction, in a manner affecting trade 

between the United States and that party after entry into 

force of a trade agreement between those countries; 

(B) to recognize that parties to a trade agreement retain 

the right to exercise discretion with respect to investigatory, prosecutorial, regulatory, and compliance matters 

and to make decisions regarding the allocation of resources 

to enforcement with respect to other labor or environmental matters determined to have higher priorities, and 

to recognize that a country is effectively enforcing its laws 

43

if a course of action or inaction reflects a reasonable exercise of such discretion, or results from a bona fide decision 

regarding the allocation of resources and no retaliation 

may be authorized based on the exercise of these rights or 

the right to establish domestic labor standards and levels 

of environmental protection; 

(C) to strengthen the capacity of United States trading 

partners to promote respect for core labor standards (as 

defined in section 2111(2)); 

(D) to strengthen the capacity of United States trading 

partners to protect the environment through the promotion 

of sustainable development; 

(E) to reduce or eliminate government practices or policies that unduly threaten sustainable development; 

(F) to seek market access, through the elimination of 

tariffs and nontariff barriers, for United States environmental technologies, goods, and services; and 

(G) to ensure that labor, environmental, health, or safety 

policies and practices of the parties to trade agreements 

with the United States do not arbitrarily or unjustifiably 

discriminate against United States exports or serve as disguised barriers to trade. 

(12) DISPUTE SETTLEMENT AND ENFORCEMENT.—The principal negotiating objectives of the United States with respect to 

dispute settlement and enforcement of trade agreements are— (A) to seek provisions in trade agreements providing for 

resolution of disputes between governments under those 

trade agreements in an effective, timely, transparent, equitable, and reasoned manner, requiring determinations 

based on facts and the principles of the agreements, with 

the goal of increasing compliance with the agreements;

(B) to seek to strengthen the capacity of the Trade Policy 

Review Mechanism of the World Trade Organization to review compliance with commitments; 

(C) to seek provisions encouraging the early identification and settlement of disputes through consultation; 

(D) to seek provisions to encourage the provision of 

trade-expanding compensation if a party to a dispute 

under the agreement does not come into compliance with 

its obligations under the agreement; 

(E) to seek provisions to impose a penalty upon a party 

to a dispute under the agreement that—

(i) encourages compliance with the obligations of the 

agreement; 

(ii) is appropriate to the parties, nature, subject 

matter, and scope of the violation; and 

(iii) has the aim of not adversely affecting parties or 

interests not party to the dispute while maintaining 

the effectiveness of the enforcement mechanism; and 

(F) to seek provisions that treat United States principal 

negotiating objectives equally with respect to—

(i) the ability to resort to dispute settlement under 

the applicable agreement; 

(ii) the availability of equivalent dispute settlement 

procedures; and 

44

(iii) the availability of equivalent remedies. 

(13) WTO EXTENDED NEGOTIATIONS.—The principal negotiating objectives of the United States regarding trade in civil 

aircraft are those set forth in section 135(c) of the Uruguay 

Round Agreements Act (19 U.S.C. 3355(c)) and regarding rules 

of origin are the conclusion of an agreement described in section 132 of that Act (19 U.S.C. 3552). 

(c) PROMOTION OF CERTAIN PRIORITIES.—In order to address and 

maintain United States competitiveness in the global economy, the 

President shall— (1) seek greater cooperation between the WTO and the ILO; 

(2) seek to establish consultative mechanisms among parties 

to trade agreements to strengthen the capacity of United 

States trading partners to promote respect for core labor standards (as defined in section 2111(2)), and report to the Committee on Ways and Means of the House of Representatives 

and the Committee on Finance of the Senate on the content 

and operation of such mechanisms; 

(3) seek to establish consultative mechanisms among parties 

to trade agreements to strengthen the capacity of United 

States trading partners to develop and implement standards 

for the protection of the environment and human health based 

on sound science, and report to the Committee on Ways and 

Means of the House of Representatives and the Committee on 

Finance of the Senate on the content and operation of such 

mechanisms; 

(4) conduct environmental reviews of future trade and investment agreements, consistent with Executive Order 13141 

of November 16, 1999, and its relevant guidelines, and report 

to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate on 

such reviews; 

(5) review the impact of future trade agreements on United 

States employment, modeled after Executive Order 13141, and 

report to the Committee on Ways and Means of the House of 

Representatives and the Committee on Finance of the Senate 

on such review; 

(6) take into account other legitimate United States domestic 

objectives including, but not limited to, the protection of legitimate health or safety, essential security, and consumer interests and the law and regulations related thereto; 

(7) have the Secretary of Labor consult with any country 

seeking a trade agreement with the United States concerning 

that country’s labor laws and provide technical assistance to 

that country if needed; 

(8) with respect to any trade agreement which the President 

seeks to implement under trade authorities procedures, submit 

to the Congress a report describing the extent to which the 

country or countries that are parties to the agreement have in 

effect laws governing exploitative child labor; 

(9)(A) preserve the ability of the United States to enforce rigorously its trade laws, including the antidumping and countervailing duty laws, and avoid agreements which lessen the effectiveness of domestic and international disciplines on unfair 

trade, especially dumping and subsidies, in order to ensure 

45

that United States workers, agricultural producers, and firms 

can compete fully on fair terms and enjoy the benefits of reciprocal trade concessions; and 

(B) ensure that United States exports are not subject to the 

abusive use of trade laws, including antidumping and countervailing duty laws, by other countries. 

(10) continue to promote consideration of multilateral environmental agreements and consult with parties to such agreements regarding the consistency of any such agreement that 

includes trade measures with existing environmental exceptions under Article XX of the GATT 1994; 

(11) report to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the 

Senate, not later than 12 months after the imposition of a penalty or remedy by the United States permitted by a trade 

agreement to which this title applies, on the effectiveness of 

the penalty or remedy applied under United States law in enforcing United States rights under the trade agreement; and 

(12) seek to establish consultative mechanisms among parties to trade agreements to examine the trade consequences of 

significant and unanticipated currency movements and to scrutinize whether a foreign government engaged in a pattern of 

manipulating its currency to promote a competitive advantage 

in international trade. 

The report under paragraph (11) shall address whether the penalty 

or remedy was effective in changing the behavior of the targeted 

party and whether the penalty or remedy had any adverse impact 

on parties or interests not party to the dispute. 

(d) CONSULTATIONS.—

(1) CONSULTATIONS WITH CONGRESSIONAL ADVISERS.—In the 

course of negotiations conducted under this title, the United 

States Trade Representative shall consult closely and on a 

timely basis with, and keep fully apprised of the negotiations, 

the Congressional Oversight Group convened under section 

2107 and all committees of the House of Representatives and 

the Senate with jurisdiction over laws that would be affected 

by a trade agreement resulting from the negotiations. 

(2) CONSULTATION BEFORE AGREEMENT INITIALED.—In the 

course of negotiations conducted under this title, the United 

States Trade Representative shall—

(A) consult closely and on a timely basis (including immediately before initialing an agreement) with, and keep 

fully apprised of the negotiations, the congressional advisers for trade policy and negotiations appointed under section 161 of the Trade Act of 1974 (19 U.S.C. 2211), the 

Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, and the 

Congressional Oversight Group convened under section 

2107; and 

(B) with regard to any negotiations and agreement relating to agricultural trade, also consult closely and on a 

timely basis (including immediately before initialing an 

agreement) with, and keep fully apprised of the negotiations, the Committee on Agriculture of the House of RepVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00045 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
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resentatives and the Committee on Agriculture, Nutrition, 

and Forestry of the Senate. 

(e) ADHERENCE TO OBLIGATIONS UNDER URUGUAY ROUND AGREEMENTS.—In determining whether to enter into negotiations with a 

particular country, the President shall take into account the extent 

to which that country has implemented, or has accelerated the implementation of, its obligations under the Uruguay Round Agreements.

SEC. 2103. TRADE AGREEMENTS AUTHORITY. 

(a) AGREEMENTS REGARDING TARIFF BARRIERS.—

(1) IN GENERAL.—Whenever the President determines that 

one or more existing duties or other import restrictions of any 

foreign country or the United States are unduly burdening and 

restricting the foreign trade of the United States and that the 

purposes, policies, priorities, and objectives of this title will be 

promoted thereby, the President—

(A) may enter into trade agreements with foreign countries before—

(i) June 1, 2005; or 

(ii) June 1, 2007, if trade authorities procedures are 

extended under subsection (c); and 

(B) may, subject to paragraphs (2) and (3), proclaim—

(i) such modification or continuance of any existing 

duty, 

(ii) such continuance of existing duty-free or excise 

treatment, or 

(iii) such additional duties, 

as the President determines to be required or appropriate 

to carry out any such trade agreement. 

The President shall notify the Congress of the President’s intention to enter into an agreement under this subsection. 

(2) LIMITATIONS.—No proclamation may be made under paragraph (1) that—

(A) reduces any rate of duty (other than a rate of duty 

that does not exceed 5 percent ad valorem on the date of 

the enactment of this Act) to a rate of duty which is less 

than 50 percent of the rate of such duty that applies on 

such date of enactment; 

(B) notwithstanding paragraph (6), reduces the rate of 

duty below that applicable under the Uruguay Round 

Agreements, on any agricultural product which was the 

subject of tariff reductions by the United States as a result 

of the Uruguay Round Agreements, for which the rate of 

duty, pursuant to such Agreements, was reduced on January 1, 1995, to a rate which was not less than 97.5 percent 

of the rate of duty that applied to such article on December 31, 1994; or 

(C) increases any rate of duty above the rate that applied on the date of the enactment of this Act. 

(3) AGGREGATE REDUCTION; EXEMPTION FROM STAGING.—

(A) AGGREGATE REDUCTION.—Except as provided in subparagraph (B), the aggregate reduction in the rate of duty 

on any article which is in effect on any day pursuant to a 

trade agreement entered into under paragraph (1) shall 

47

not exceed the aggregate reduction which would have been 

in effect on such day if—

(i) a reduction of 3 percent ad valorem or a reduction of one-tenth of the total reduction, whichever is 

greater, had taken effect on the effective date of the 

first reduction proclaimed under paragraph (1) to 

carry out such agreement with respect to such article; 

and 

(ii) a reduction equal to the amount applicable 

under clause (i) had taken effect at 1-year intervals 

after the effective date of such first reduction.

(B) EXEMPTION FROM STAGING.—No staging is required 

under subparagraph (A) with respect to a duty reduction 

that is proclaimed under paragraph (1) for an article of a 

kind that is not produced in the United States. The United 

States International Trade Commission shall advise the 

President of the identity of articles that may be exempted 

from staging under this subparagraph. 

(4) ROUNDING.—If the President determines that such action 

will simplify the computation of reductions under paragraph 

(3), the President may round an annual reduction by an 

amount equal to the lesser of—

(A) the difference between the reduction without regard 

to this paragraph and the next lower whole number; or 

(B) one-half of 1 percent ad valorem. 

(5) OTHER LIMITATIONS.—A rate of duty reduction that may 

not be proclaimed by reason of paragraph (2) may take effect 

only if a provision authorizing such reduction is included within an implementing bill provided for under section 5 and that 

bill is enacted into law. 

(6) OTHER TARIFF MODIFICATIONS.—Notwithstanding paragraphs (1)(B), (2)(A), (2)(C), and (3) through (5), and subject to 

the consultation and layover requirements of section 115 of the 

Uruguay Round Agreements Act, the President may proclaim 

the modification of any duty or staged rate reduction of any 

duty set forth in Schedule XX, as defined in section 2(5) of that 

Act, if the United States agrees to such modification or staged 

rate reduction in a negotiation for the reciprocal elimination or 

harmonization of duties under the auspices of the World Trade 

Organization. 

(7) AUTHORITY UNDER URUGUAY ROUND AGREEMENTS ACT NOT

AFFECTED.—Nothing in this subsection shall limit the authority 

provided to the President under section 111(b) of the Uruguay 

Round Agreements Act (19 U.S.C. 3521(b)). 

(b) AGREEMENTS REGARDING TARIFF AND NONTARIFF BARRIERS.—

(1) IN GENERAL.—(A) Whenever the President determines 

that—

(i) one or more existing duties or any other import restriction of any foreign country or the United States or any 

other barrier to, or other distortion of, international trade 

unduly burdens or restricts the foreign trade of the United 

States or adversely affects the United States economy; or 

(ii) the imposition of any such barrier or distortion is 

likely to result in such a burden, restriction, or effect; 

48

and that the purposes, policies, priorities, and objectives of this 

title will be promoted thereby, the President may enter into a 

trade agreement described in subparagraph (B) during the period described in subparagraph (C). 

(B) The President may enter into a trade agreement under 

subparagraph (A) with foreign countries providing for— (i) the reduction or elimination of a duty, restriction, 

barrier, or other distortion described in subparagraph (A), 

or 

(ii) the prohibition of, or limitation on the imposition of, 

such barrier or other distortion. 

(C) The President may enter into a trade agreement under 

this paragraph before— (i) June 1, 2005; or 

(ii) June 1, 2007, if trade authorities procedures are extended under subsection (c). 

(2) CONDITIONS.—A trade agreement may be entered into 

under this subsection only if such agreement makes progress 

in meeting the applicable objectives described in section 

2102(a) and (b) and the President satisfies the conditions set 

forth in section 2104. 

(3) BILLS QUALIFYING FOR TRADE AUTHORITIES PROCE- DURES.—(A) The provisions of section 151 of the Trade Act of 

1974 (in this title referred to as ‘‘trade authorities procedures’’) 

apply to a bill of either House of Congress which contains provisions described in subparagraph (B) to the same extent as 

such section 151 applies to implementing bills under that section. A bill to which this paragraph applies shall hereafter in 

this title be referred to as an ‘‘implementing bill’’. (B) The provisions referred to in subparagraph (A) are— (i) a provision approving a trade agreement entered into 

under this subsection and approving the statement of administrative action, if any, proposed to implement such 

trade agreement; and 

(ii) if changes in existing laws or new statutory authority are required to implement such trade agreement or 

agreements, provisions, necessary or appropriate to implement such trade agreement or agreements, either repealing or amending existing laws or providing new statutory 

authority. 

(c) EXTENSION DISAPPROVAL PROCESS FOR CONGRESSIONAL TRADE

AUTHORITIES PROCEDURES.—

(1) IN GENERAL.—Except as provided in section 2105(b)—

(A) the trade authorities procedures apply to implementing bills submitted with respect to trade agreements 

entered into under subsection (b) before July 1, 2005; and 

(B) the trade authorities procedures shall be extended to 

implementing bills submitted with respect to trade agreements entered into under subsection (b) after June 30, 

2005, and before July 1, 2007, if (and only if)— (i) the President requests such extension under 

paragraph (2); and 

(ii) neither House of the Congress adopts an extension disapproval resolution under paragraph (5) before 

June 1, 2005. 

49

(2) REPORT TO CONGRESS BY THE PRESIDENT.—If the President is of the opinion that the trade authorities procedures 

should be extended to implementing bills described in paragraph (1)(B), the President shall submit to the Congress, not 

later than March 1, 2005, a written report that contains a request for such extension, together with—

(A) a description of all trade agreements that have been 

negotiated under subsection (b) and the anticipated schedule for submitting such agreements to the Congress for approval; 

(B) a description of the progress that has been made in 

negotiations to achieve the purposes, policies, priorities, 

and objectives of this title, and a statement that such 

progress justifies the continuation of negotiations; and 

(C) a statement of the reasons why the extension is 

needed to complete the negotiations. 

(3) REPORT TO CONGRESS BY THE ADVISORY COMMITTEE.—The 

President shall promptly inform the Advisory Committee for 

Trade Policy and Negotiations established under section 135 of 

the Trade Act of 1974 (19 U.S.C. 2155) of the President’s decision to submit a report to the Congress under paragraph (2). 

The Advisory Committee shall submit to the Congress as soon 

as practicable, but not later than May 1, 2005, a written report 

that contains—

(A) its views regarding the progress that has been made 

in negotiations to achieve the purposes, policies, priorities, 

and objectives of this title; and 

(B) a statement of its views, and the reasons therefor, 

regarding whether the extension requested under paragraph (2) should be approved or disapproved. 

(4) STATUS OF REPORTS.—The reports submitted to the Congress under paragraphs (2) and (3), or any portion of such reports, may be classified to the extent the President determines 

appropriate. 

(5) EXTENSION DISAPPROVAL RESOLUTIONS.—(A) For purposes 

of paragraph (1), the term ‘‘extension disapproval resolution’’

means a resolution of either House of the Congress, the sole 

matter after the resolving clause of which is as follows: ‘‘That 

the ll disapproves the request of the President for the extension, under section 2103(c)(1)(B)(i) of the Bipartisan Trade Promotion Authority Act of 2002, of the trade authorities procedures under that Act to any implementing bill submitted with 

respect to any trade agreement entered into under section 

2103(b) of that Act after June 30, 2005.’’, with the blank space 

being filled with the name of the resolving House of the Congress. 

(B) Extension disapproval resolutions—

(i) may be introduced in either House of the Congress by 

any member of such House; and 

(ii) shall be referred, in the House of Representatives, to 

the Committee on Ways and Means and, in addition, to the 

Committee on Rules. 

(C) The provisions of section 152(d) and (e) of the Trade Act 

of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the floor considVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00049 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
50

eration of certain resolutions in the House and Senate) apply 

to extension disapproval resolutions. 

(D) It is not in order for— (i) the Senate to consider any extension disapproval resolution not reported by the Committee on Finance; 

(ii) the House of Representatives to consider any extension disapproval resolution not reported by the Committee 

on Ways and Means and, in addition, by the Committee on 

Rules; or 

(iii) either House of the Congress to consider an extension disapproval resolution after June 30, 2005. 

(d) COMMENCEMENT OF NEGOTIATIONS.—In order to contribute to 

the continued economic expansion of the United States, the President shall commence negotiations covering tariff and nontariff barriers affecting any industry, product, or service sector, and expand 

existing sectoral agreements to countries that are not parties to 

those agreements, in cases where the President determines that 

such negotiations are feasible and timely and would benefit the 

United States. Such sectors include agriculture, commercial services, intellectual property rights, industrial and capital goods, government procurement, information technology products, environmental technology and services, medical equipment and services, 

civil aircraft, and infrastructure products. In so doing, the President shall take into account all of the principal negotiating objectives set forth in section 2102(b). 

SEC. 2104. CONSULTATIONS AND ASSESSMENT. 

(a) NOTICE AND CONSULTATION BEFORE NEGOTIATION.—The 

President, with respect to any agreement that is subject to the provisions of section 2103(b), shall— (1) provide, at least 90 calendar days before initiating negotiations, written notice to the Congress of the President’s intention to enter into the negotiations and set forth therein the 

date the President intends to initiate such negotiations, the 

specific United States objectives for the negotiations, and 

whether the President intends to seek an agreement, or 

changes to an existing agreement; 

(2) before and after submission of the notice, consult regarding the negotiations with the Committee on Finance of the 

Senate and the Committee on Ways and Means of the House 

of Representatives, such other committees of the House and 

Senate as the President deems appropriate, and the Congressional Oversight group convened under section 2107; and 

(3) upon the request of a majority of the members of the 

Congressional Oversight Group under section 2107(c), meet 

with the Congressional Oversight Group before initiating the 

negotiations or at any other time concerning the negotiations. 

(b) NEGOTIATIONS REGARDING AGRICULTURE.—

(1) IN GENERAL.—Before initiating or continuing negotiations 

the subject matter of which is directly related to the subject 

matter under section 2102(b)(10)(A)(i) with any country, the 

President shall assess whether United States tariffs on agricultural products that were bound under the Uruguay Round 

Agreements are lower than the tariffs bound by that country. 

In addition, the President shall consider whether the tariff levels bound and applied throughout the world with respect to imVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00050 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
51

ports from the United States are higher than United States 

tariffs and whether the negotiation provides an opportunity to 

address any such disparity. The President shall consult with 

the Committee on Ways and Means and the Committee on Agriculture of the House of Representatives and the Committee 

on Finance and the Committee on Agriculture, Nutrition, and 

Forestry of the Senate concerning the results of the assessment, whether it is appropriate for the United States to agree 

to further tariff reductions based on the conclusions reached in 

the assessment, and how all applicable negotiating objectives 

will be met. 

(2) SPECIAL CONSULTATIONS ON IMPORT SENSITIVE PROD- UCTS.—(A) Before initiating negotiations with regard to agriculture, and, with respect to the Free Trade Area for the Americas and negotiations with regard to agriculture under the auspices of the World Trade Organization, as soon as practicable 

after the enactment of this Act, the United States Trade Representative shall— (i) identify those agricultural products subject to tariff 

reductions by the United States as a result of the Uruguay 

Round Agreements, for which the rate of duty was reduced 

on January 1, 1995, to a rate which was not less than 97.5 

percent of the rate of duty that applied to such article on 

December 31, 1994; 

(ii) consult with the Committee on Ways and Means and 

the Committee on Agriculture of the House of Representatives and the Committee on Finance and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate concerning—

(I) whether any further tariff reductions on the 

products identified under clause (i) should be appropriate, taking into account the impact of any such tariff reduction on the United States industry producing 

the product concerned; and 

(II) whether the products so identified face unjustified sanitary or phytosanitary restrictions, including 

those not based on scientific principles in contravention of the Uruguay Round Agreements; 

(iii) request that the International Trade Commission 

prepare an assessment of the probable economic effects of 

any such tariff reduction on the United States industry 

producing the product concerned and on the United States 

economy as a whole; and 

(iv) upon complying with clauses (i), (ii), and (iii), notify 

the Committee on Ways and Means and the Committee on 

Agriculture of the House of Representatives and the Committee on Finance and the Committee on Agriculture, Nutrition, and Forestry of the Senate of those products identified under clause (i) for which the Trade Representative 

intends to seek tariff liberalization in the negotiations and 

the reasons for seeking such tariff liberalization. 

(B) If, after negotiations described in subparagraph (A) are 

commenced—

(i) the United States Trade Representative identifies any 

additional agricultural product described in subparagraph 

52

(A)(i) for tariff reductions which were not the subject of a 

notification under subparagraph (A)(iv), or 

(ii) any additional agricultural product described in subparagraph (A)(i) is the subject of a request for tariff reductions by a party to the negotiations, 

the Trade Representative shall, as soon as practicable, notify 

the committees referred to in subparagraph (A)(iv) of those 

products and the reasons for seeking such tariff reductions.

(c) NEGOTIATIONS REGARDING TEXTILES.—Before initiating or 

continuing negotiations the subject matter of which is directly related to textiles and apparel products with any country, the President shall assess whether United States tariffs on textile and apparel products that were bound under the Uruguay Round Agreements are lower than the tariffs bound by that country and whether the negotiation provides an opportunity to address any such disparity. The President shall consult with the Committee on Ways 

and Means of the House of Representatives and the Committee on 

Finance of the Senate concerning the results of the assessment, 

whether it is appropriate for the United States to agree to further 

tariff reductions based on the conclusions reached in the assessment, and how all applicable negotiating objectives will be met. 

(d) CONSULTATION WITH CONGRESS BEFORE AGREEMENTS EN- TERED INTO.— (1) CONSULTATION.—Before entering into any trade agreement under section 2103(b), the President shall consult with— (A) the Committee on Ways and Means of the House of 

Representatives and the Committee on Finance of the Senate; 

(B) each other committee of the House and the Senate, 

and each joint committee of the Congress, which has jurisdiction over legislation involving subject matters which 

would be affected by the trade agreement; and 

(C) the Congressional Oversight Group convened under 

section 2107. 

(2) SCOPE.—The consultation described in paragraph (1) 

shall include consultation with respect to— (A) the nature of the agreement; 

(B) how and to what extent the agreement will achieve 

the applicable purposes, policies, priorities, and objectives 

of this title; and

(C) the implementation of the agreement under section 

2105, including the general effect of the agreement on existing laws. 

(e) ADVISORY COMMITTEE REPORTS.—The report required under 

section 135(e)(1) of the Trade Act of 1974 regarding any trade 

agreement entered into under section 2103(a) or (b) of this Act 

shall be provided to the President, the Congress, and the United 

States Trade Representative not later than 30 days after the date 

on which the President notifies the Congress under section 

2103(a)(1) or 2105(a)(1)(A) of the President’s intention to enter into 

the agreement. 

(f) ITC ASSESSMENT.— (1) IN GENERAL.—The President, at least 90 calendar days 

before the day on which the President enters into a trade 

agreement under section 2103(b), shall provide the InterVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00052 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
53

national Trade Commission (referred to in this subsection as 

‘‘the Commission’’) with the details of the agreement as it exists at that time and request the Commission to prepare and 

submit an assessment of the agreement as described in paragraph (2). Between the time the President makes the request 

under this paragraph and the time the Commission submits 

the assessment, the President shall keep the Commission current with respect to the details of the agreement. 

(2) ITC ASSESSMENT.—Not later than 90 calendar days after 

the President enters into the agreement, the Commission shall 

submit to the President and the Congress a report assessing 

the likely impact of the agreement on the United States economy as a whole and on specific industry sectors, including the 

impact the agreement will have on the gross domestic product, 

exports and imports, aggregate employment and employment 

opportunities, the production, employment, and competitive position of industries likely to be significantly affected by the 

agreement, and the interests of United States consumers. 

(3) REVIEW OF EMPIRICAL LITERATURE.—In preparing the assessment, the Commission shall review available economic assessments regarding the agreement, including literature regarding any substantially equivalent proposed agreement, and 

shall provide in its assessment a description of the analyses 

used and conclusions drawn in such literature, and a discussion of areas of consensus and divergence between the various 

analyses and conclusions, including those of the Commission 

regarding the agreement. 

SEC. 2105. IMPLEMENTATION OF TRADE AGREEMENTS. 

(a) IN GENERAL.—

(1) NOTIFICATION AND SUBMISSION.—Any agreement entered 

into under section 2103(b) shall enter into force with respect 

to the United States if (and only if)—

(A) the President, at least 90 calendar days before the 

day on which the President enters into the trade agreement, notifies the House of Representatives and the Senate of the President’s intention to enter into the agreement, and promptly thereafter publishes notice of such intention in the Federal Register; 

(B) within 60 days after entering into the agreement, the 

President submits to the Congress a description of those 

changes to existing laws that the President considers 

would be required in order to bring the United States into 

compliance with the agreement; 

(C) after entering into the agreement, the President submits to the Congress, on a day on which both Houses of 

Congress are in session, a copy of the final legal text of the 

agreement, together with—

(i) a draft of an implementing bill described in section 2103(b)(3); 

(ii) a statement of any administrative action proposed to implement the trade agreement; and 

(iii) the supporting information described in paragraph (2); and 

(D) the implementing bill is enacted into law. 

54

(2) SUPPORTING INFORMATION.—The supporting information 

required under paragraph (1)(C)(iii) consists of— (A) an explanation as to how the implementing bill and 

proposed administrative action will change or affect existing law; and 

(B) a statement— (i) asserting that the agreement makes progress in 

achieving the applicable purposes, policies, priorities, 

and objectives of this title; and 

(ii) setting forth the reasons of the President regarding— (I) how and to what extent the agreement 

makes progress in achieving the applicable purposes, policies, and objectives referred to in clause 

(i); 

(II) whether and how the agreement changes 

provisions of an agreement previously negotiated; 

(III) how the agreement serves the interests of 

United States commerce; 

(IV) how the implementing bill meets the standards set forth in section 2103(b)(3); and 

(V) how and to what extent the agreement 

makes progress in achieving the applicable purposes, policies, and objectives referred to in section 2102(c) regarding the promotion of certain 

priorities. 

(3) RECIPROCAL BENEFITS.—In order to ensure that a foreign 

country that is not a party to a trade agreement entered into 

under section 2103(b) does not receive benefits under the 

agreement unless the country is also subject to the obligations 

under the agreement, the implementing bill submitted with respect to the agreement shall provide that the benefits and obligations under the agreement apply only to the parties to the 

agreement, if such application is consistent with the terms of 

the agreement. The implementing bill may also provide that 

the benefits and obligations under the agreement do not apply 

uniformly to all parties to the agreement, if such application 

is consistent with the terms of the agreement.

(b) LIMITATIONS ON TRADE AUTHORITIES PROCEDURES.— (1) FOR LACK OF NOTICE OR CONSULTATIONS.—

(A) IN GENERAL.—The trade authorities procedures shall 

not apply to any implementing bill submitted with respect 

to a trade agreement or trade agreements entered into 

under section 2103(b) if during the 60-day period beginning on the date that one House of Congress agrees to a 

procedural disapproval resolution for lack of notice or consultations with respect to such trade agreement or agreements, the other House separately agrees to a procedural 

disapproval resolution with respect to such trade agreement or agreements. 

(B) PROCEDURAL DISAPPROVAL RESOLUTION.—(i) For purposes of this paragraph, the term ‘‘procedural disapproval 

resolution’’ means a resolution of either House of Congress, 

the sole matter after the resolving clause of which is as follows: ‘‘That the President has failed or refused to notify or 

55

consult in accordance with the Bipartisan Trade Promotion 

Authority Act of 2002 on negotiations with respect to 

llllll and, therefore, the trade authorities procedures under that Act shall not apply to any implementing 

bill submitted with respect to such trade agreement or 

agreements.’’, with the blank space being filled with a description of the trade agreement or agreements with respect to which the President is considered to have failed 

or refused to notify or consult. 

(ii) For purposes of clause (i), the President has ‘‘failed 

or refused to notify or consult in accordance with the Bipartisan Trade Promotion Authority Act of 2002’’ on negotiations with respect to a trade agreement or trade agreements if—

(I) the President has failed or refused to consult (as 

the case may be) in accordance with section 2104 or 

2105 with respect to the negotiations, agreement, or 

agreements; 

(II) guidelines under section 2107(b) have not been 

developed or met with respect to the negotiations, 

agreement, or agreements; 

(III) the President has not met with the Congressional Oversight Group pursuant to a request made 

under section 2107(c) with respect to the negotiations, 

agreement, or agreements; or 

(IV) the agreement or agreements fail to make 

progress in achieving the purposes, policies, priorities, 

and objectives of this title. 

(2) PROCEDURES FOR CONSIDERING RESOLUTIONS.—(A) Procedural disapproval resolutions— (i) in the House of Representatives— (I) may be introduced by any Member of the House; 

(II) shall be referred to the Committee on Ways and 

Means and, in addition, to the Committee on Rules; 

and 

(III) may not be amended by either Committee; and 

(ii) in the Senate may be introduced by any Member of 

the Senate. 

(B) The provisions of section 152(d) and (e) of the Trade Act 

of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the floor consideration of certain resolutions in the House and Senate) apply 

to a procedural disapproval resolution introduced with respect 

to a trade agreement if no other procedural disapproval resolution with respect to that trade agreement has previously been 

considered under such provisions of section 152 of the Trade 

Act of 1974 in that House of Congress during that Congress.

(C) It is not in order for the House of Representatives to consider any procedural disapproval resolution not reported by the 

Committee on Ways and Means and, in addition, by the Committee on Rules.

(c) RULES OF HOUSE OF REPRESENTATIVES AND SENATE.—Subsection (b) of this section and section 2103(c) are enacted by the 

Congress—

(1) as an exercise of the rulemaking power of the House of 

Representatives and the Senate, respectively, and as such are 

56

deemed a part of the rules of each House, respectively, and 

such procedures supersede other rules only to the extent that 

they are inconsistent with such other rules; and 

(2) with the full recognition of the constitutional right of either House to change the rules (so far as relating to the procedures of that House) at any time, in the same manner, and to 

the same extent as any other rule of that House. 

SEC. 2106. TREATMENT OF CERTAIN TRADE AGREEMENTS FOR WHICH 

NEGOTIATIONS HAVE ALREADY BEGUN. 

(a) CERTAIN AGREEMENTS.—Notwithstanding section 2103(b)(2), 

if an agreement to which section 2103(b) applies—

(1) is entered into under the auspices of the World Trade Organization, 

(2) is entered into with Chile, 

(3) is entered into with Singapore, or 

(4) establishes a Free Trade Area for the Americas, 

and results from negotiations that were commenced before the date 

of the enactment of this Act, subsection (b) shall apply. 

(b) TREATMENT OF AGREEMENTS.—In the case of any agreement 

to which subsection (a) applies—

(1) the applicability of the trade authorities procedures to 

implementing bills shall be determined without regard to the 

requirements of section 2104(a) (relating only to 90 days notice 

prior to initiating negotiations), and any procedural disapproval resolution under section 2105(b)(1)(B) shall not be in 

order on the basis of a failure or refusal to comply with the 

provisions of section 2104(a); and 

(2) the President shall, as soon as feasible after the enactment of this Act—

(A) notify the Congress of the negotiations described in 

subsection (a), the specific United States objectives in the 

negotiations, and whether the President is seeking a new 

agreement or changes to an existing agreement; and 

(B) before and after submission of the notice, consult regarding the negotiations with the committees referred to 

in section 2104(a)(2) and the Congressional Oversight 

Group. 

SEC. 2107. CONGRESSIONAL OVERSIGHT GROUP. 

(a) MEMBERS AND FUNCTIONS.—

(1) IN GENERAL.—By not later than 60 days after the date of 

the enactment of this Act, and not later than 30 days after the 

convening of each Congress, the chairman of the Committee on 

Ways and Means of the House of Representatives and the 

chairman of the Committee on Finance of the Senate shall convene the Congressional Oversight Group. 

(2) MEMBERSHIP FROM THE HOUSE.—In each Congress, the 

Congressional Oversight Group shall be comprised of the following Members of the House of Representatives: 

(A) The chairman and ranking member of the Committee on Ways and Means, and 3 additional members of 

such Committee (not more than 2 of whom are members 

of the same political party).

(B) The chairman and ranking member, or their designees, of the committees of the House of Representatives 

57

which would have, under the Rules of the House of Representatives, jurisdiction over provisions of law affected by 

a trade agreement negotiations for which are conducted at 

any time during that Congress and to which this title 

would apply. 

(3) MEMBERSHIP FROM THE SENATE.—In each Congress, the 

Congressional Oversight Group shall also be comprised of the 

following members of the Senate: 

(A) The chairman and ranking Member of the Committee on Finance and 3 additional members of such Committee (not more than 2 of whom are members of the same 

political party). 

(B) The chairman and ranking member, or their designees, of the committees of the Senate which would have, 

under the Rules of the Senate, jurisdiction over provisions 

of law affected by a trade agreement negotiations for 

which are conducted at any time during that Congress and 

to which this title would apply. 

(4) ACCREDITATION.—Each member of the Congressional 

Oversight Group described in paragraph (2)(A) and (3)(A) shall 

be accredited by the United States Trade Representative on behalf of the President as official advisers to the United States 

delegation in negotiations for any trade agreement to which 

this title applies. Each member of the Congressional Oversight 

Group described in paragraph (2)(B) and (3)(B) shall be accredited by the United States Trade Representative on behalf of 

the President as official advisers to the United States delegation in the negotiations by reason of which the member is in 

the Congressional Oversight Group. The Congressional Oversight Group shall consult with and provide advice to the Trade 

Representative regarding the formulation of specific objectives, 

negotiating strategies and positions, the development of the applicable trade agreement, and compliance and enforcement of 

the negotiated commitments under the trade agreement. 

(5) CHAIR.—The Congressional Oversight Group shall be 

chaired by the Chairman of the Committee on Ways and 

Means of the House of Representatives and the Chairman of 

the Committee on Finance of the Senate. 

(b) GUIDELINES.— (1) PURPOSE AND REVISION.—The United States Trade Representative, in consultation with the chairmen and ranking minority members of the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the 

Senate—

(A) shall, within 120 days after the date of the enactment of this Act, develop written guidelines to facilitate 

the useful and timely exchange of information between the 

Trade Representative and the Congressional Oversight 

Group established under this section; and 

(B) may make such revisions to the guidelines as may be 

necessary from time to time. 

(2) CONTENT.—The guidelines developed under paragraph (1) 

shall provide for, among other things— (A) regular, detailed briefings of the Congressional Oversight Group regarding negotiating objectives, including the 

58

promotion of certain priorities referred to in section 

2102(c), and positions and the status of the applicable negotiations, beginning as soon as practicable after the Congressional Oversight Group is convened, with more frequent briefings as trade negotiations enter the final stage; 

(B) access by members of the Congressional Oversight 

Group, and staff with proper security clearances, to pertinent documents relating to the negotiations, including 

classified materials; 

(C) the closest practicable coordination between the 

Trade Representative and the Congressional Oversight 

Group at all critical periods during the negotiations, including at negotiation sites; and 

(D) after the applicable trade agreement is concluded, 

consultation regarding ongoing compliance and enforcement of negotiated commitments under the trade agreement. 

(c) REQUEST FOR MEETING.—Upon the request of a majority of 

the Congressional Oversight Group, the President shall meet with 

the Congressional Oversight Group before initiating negotiations 

with respect to a trade agreement, or at any other time concerning 

the negotiations. 

SEC. 2108. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS. 

(a) IN GENERAL.—At the time the President submits to the Congress the final text of an agreement pursuant to section 

2105(a)(1)(C), the President shall also submit a plan for implementing and enforcing the agreement. The implementation and enforcement plan shall include the following: 

(1) BORDER PERSONNEL REQUIREMENTS.—A description of additional personnel required at border entry points, including a 

list of additional customs and agricultural inspectors. 

(2) AGENCY STAFFING REQUIREMENTS.—A description of additional personnel required by Federal agencies responsible for 

monitoring and implementing the trade agreement, including 

personnel required by the Office of the United States Trade 

Representative, the Department of Commerce, the Department 

of Agriculture (including additional personnel required to implement sanitary and phytosanitary measures in order to obtain market access for United States exports), the Department 

of the Treasury, and such other agencies as may be necessary. 

(3) CUSTOMS INFRASTRUCTURE REQUIREMENTS.—A description 

of the additional equipment and facilities needed by the United 

States Customs Service. 

(4) IMPACT ON STATE AND LOCAL GOVERNMENTS.—A description of the impact the trade agreement will have on State and 

local governments as a result of increases in trade. 

(5) COST ANALYSIS.—An analysis of the costs associated with 

each of the items listed in paragraphs (1) through (4). 

(b) BUDGET SUBMISSION.—The President shall include a request 

for the resources necessary to support the plan described in subsection (a) in the first budget that the President submits to the 

Congress after the submission of the plan. 

59

SEC. 2109. COMMITTEE STAFF. 

The grant of trade promotion authority under this title is likely 

to increase the activities of the primary committees of jurisdiction 

in the area of international trade. In addition, the creation of the 

Congressional Oversight Group under section 2107 will increase 

the participation of a broader number of Members of Congress in 

the formulation of United States trade policy and oversight of the 

international trade agenda for the United States. The primary committees of jurisdiction should have adequate staff to accommodate 

these increases in activities.

SEC. 2110. CONFORMING AMENDMENTS. 

(a) IN GENERAL.—Title I of the Trade Act of 1974 (19 U.S.C. 2111 

et seq.) is amended as follows: 

(1) IMPLEMENTING BILL.— (A) Section 151(b)(1) (19 U.S.C. 2191(b)(1)) is amended 

by striking ‘‘section 1103(a)(1) of the Omnibus Trade and 

Competitiveness Act of 1988, or section 282 of the Uruguay 

Round Agreements Act’’ and inserting ‘‘section 282 of the 

Uruguay Round Agreements Act, or section 2105(a)(1) of 

the Bipartisan Trade Promotion Authority Act of 2002’’. (B) Section 151(c)(1) (19 U.S.C. 2191(c)(1)) is amended 

by striking ‘‘or section 282 of the Uruguay Round Agreements Act’’ and inserting ‘‘, section 282 of the Uruguay 

Round Agreements Act, or section 2105(a)(1) of the Bipartisan Trade Promotion Authority Act of 2002’’. (2) ADVICE FROM INTERNATIONAL TRADE COMMISSION.—Section 131 (19 U.S.C. 2151) is amended— (A) in subsection (a)— (i) in paragraph (1), by striking ‘‘section 123 of this 

Act or section 1102 (a) or (c) of the Omnibus Trade 

and Competitiveness Act of 1988,’’ and inserting ‘‘section 123 of this Act or section 2103(a) or (b) of the Bipartisan Trade Promotion Authority Act of 2002,’’; and 

(ii) in paragraph (2), by striking ‘‘section 1102 (b) or 

(c) of the Omnibus Trade and Competitiveness Act of 

1988’’ and inserting ‘‘section 2103(b) of the Bipartisan 

Trade Promotion Authority Act of 2002’’; 

(B) in subsection (b), by striking ‘‘section 1102(a)(3)(A)’’

and inserting ‘‘section 2103(a)(3)(A) of the Bipartisan 

Trade Promotion Authority Act of 2002’’; and 

(C) in subsection (c), by striking ‘‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988,’’ and inserting ‘‘section 2103 of the Bipartisan Trade Promotion Authority Act of 2002,’’. 

(3) HEARINGS AND ADVICE.—Sections 132, 133(a), and 134(a) 

(19 U.S.C. 2152, 2153(a), and 2154(a)) are each amended by 

striking ‘‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988,’’ each place it appears and inserting ‘‘section 

2103 of the Bipartisan Trade Promotion Authority Act of 

2002,’’. 

(4) PREREQUISITES FOR OFFERS.—Section 134(b) (19 U.S.C. 

2154(b)) is amended by striking ‘‘section 1102 of the Omnibus 

Trade and Competitiveness Act of 1988’’ and inserting ‘‘section 

2103 of the Bipartisan Trade Promotion Authority Act of 

2002’’. 

60

(5) ADVICE FROM PRIVATE AND PUBLIC SECTORS.—Section 135 

(19 U.S.C. 2155) is amended—

(A) in subsection (a)(1)(A), by striking ‘‘section 1102 of 

the Omnibus Trade and Competitiveness Act of 1988’’ and 

inserting ‘‘section 2103 of the Bipartisan Trade Promotion 

Authority Act of 2002’’; 

(B) in subsection (e)(1)—

(i) by striking ‘‘section 1102 of the Omnibus Trade 

and Competitiveness Act of 1988’’ each place it appears and inserting ‘‘section 2103 of the Bipartisan 

Trade Promotion Authority Act of 2002’’; and 

(ii) by striking ‘‘section 1103(a)(1)(A) of such Act of 

1988’’ and inserting ‘‘section 2105(a)(1)(A) of the Bipartisan Trade Promotion Authority Act of 2002’’; and 

(C) in subsection (e)(2), by striking ‘‘section 1101 of the 

Omnibus Trade and Competitiveness Act of 1988’’ and inserting ‘‘section 2102 of the Bipartisan Trade Promotion 

Authority Act of 2002’’. 

(6) TRANSMISSION OF AGREEMENTS TO CONGRESS.—Section 

162(a) (19 U.S.C. 2212(a)) is amended by striking ‘‘or under 

section 1102 of the Omnibus Trade and Competitiveness Act of 

1988’’ and inserting ‘‘or under section 2103 of the Bipartisan 

Trade Promotion Authority Act of 2002’’. 

(b) APPLICATION OF CERTAIN PROVISIONS.—For purposes of applying sections 125, 126, and 127 of the Trade Act of 1974 (19 U.S.C. 

2135, 2136(a), and 2137)—

(1) any trade agreement entered into under section 2103 

shall be treated as an agreement entered into under section 

101 or 102, as appropriate, of the Trade Act of 1974 (19 U.S.C. 

2111 or 2112); and 

(2) any proclamation or Executive order issued pursuant to 

a trade agreement entered into under section 2103 shall be 

treated as a proclamation or Executive order issued pursuant 

to a trade agreement entered into under section 102 of the 

Trade Act of 1974. 

SEC. 2111. DEFINITIONS. 

In this title: 

(1) AGREEMENT ON AGRICULTURE.—The term ‘‘Agreement on 

Agriculture’’ means the agreement referred to in section 

101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C. 

3511(d)(2)). 

(2) CORE LABOR STANDARDS.—The term ‘‘core labor standards’’ means—

(A) the right of association; 

(B) the right to organize and bargain collectively; 

(C) a prohibition on the use of any form of forced or compulsory labor; 

(D) a minimum age for the employment of children; and 

(E) acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and 

health. 

(3) GATT 1994.—The term ‘‘GATT 1994’’ has the meaning 

given that term in section 2 of the Uruguay Round Agreements 

Act (19 U.S.C. 3501). 

61

(4) ILO.—The term ‘‘ILO’’ means the International Labor Organization. 

(5) UNITED STATES PERSON.—The term ‘‘United States person’’ means— (A) a United States citizen; 

(B) a partnership, corporation, or other legal entity organized under the laws of the United States; and 

(C) a partnership, corporation, or other legal entity that 

is organized under the laws of a foreign country and is 

controlled by entities described in subparagraph (B) or 

United States citizens, or both. 

(6) URUGUAY ROUND AGREEMENTS.—The term ‘‘Uruguay 

Round Agreements’’ has the meaning given that term in section 2(7) of the Uruguay Round Agreements Act (19 U.S.C. 

3501(7)). 

(7) WORLD TRADE ORGANIZATION; WTO.—The terms ‘‘World 

Trade Organization’’ and ‘‘WTO’’ mean the organization established pursuant to the WTO Agreement. 

(8) WTO AGREEMENT.—The term ‘‘WTO Agreement’’ means 

the Agreement Establishing the World Trade Organization entered into on April 15, 1994. 

(9) WTO MEMBER.—The term ‘‘WTO member’’ has the meaning given that term in section 2(10) of the Uruguay Round 

Agreements Act (19 U.S.C. 3501(10)). 

(10) OTHER DEFINITIONS.— (A) AGREEMENT ON SUBSIDIES AND COUNTERVAILING

MEASURES.—The term ‘‘Agreement on Subsidies and Countervailing Measures’’ means the agreement referred to in 

section 101(d)(12) of the Uruguay Round Agreements Act 

(19 U.S.C. 3511(d)(12)). 

(B) ANTIDUMPING AGREEMENT.—The term ‘‘Antidumping 

Agreement‘‘ means the Agreement on Implementation of 

Article VI of the General Agreement on Tariffs and Trade 

1994 referred to in section 101(d)(7) of the Uruguay Round 

Agreements Act (19 U.S.C. 3511(d)(7)). 

DIVISION C—ANDEAN TRADE 

PREFERENCE ACT 

TITLE XXXI—ANDEAN TRADE 

PREFERENCE 

SEC. 3101. SHORT TITLE. 

This title may be cited as the ‘‘Andean Trade Promotion and 

Drug Eradication Act’’. 

SEC. 3102. FINDINGS. 

Congress makes the following findings: 

(1) Since the Andean Trade Preference Act was enacted in 

1991, it has had a positive impact on United States trade with 

Bolivia, Colombia, Ecuador, and Peru. Two-way trade has doubled, with the United States serving as the leading source of 

imports and leading export market for each of the Andean beneficiary countries. This has resulted in increased jobs and exVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00061 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
62

panded export opportunities in both the United States and the 

Andean region. 

(2) The Andean Trade Preference Act has been a key element 

in the United States counternarcotics strategy in the Andean 

region, promoting export diversification and broad-based economic development that provides sustainable economic alternatives to drug-crop production, strengthening the legitimate 

economies of Andean countries and creating viable alternatives 

to illicit trade in coca. 

(3) Notwithstanding the success of the Andean Trade Preference Act, the Andean region remains threatened by political 

and economic instability and fragility, vulnerable to the consequences of the drug war and fierce global competition for its 

legitimate trade. 

(4) The continuing instability in the Andean region poses a 

threat to the security interests of the United States and the 

world. This problem has been partially addressed through foreign aid, such as Plan Colombia, enacted by Congress in 2000. 

However, foreign aid alone is not sufficient. Enhancement of legitimate trade with the United States provides an alternative 

means for reviving and stabilizing the economies in the Andean region. 

(5) The Andean Trade Preference Act constitutes a tangible 

commitment by the United States to the promotion of prosperity, stability, and democracy in the beneficiary countries. 

(6) Renewal and enhancement of the Andean Trade Preference Act will bolster the confidence of domestic private enterprise and foreign investors in the economic prospects of the region, ensuring that legitimate private enterprise can be the engine of economic development and political stability in the region. 

(7) Each of the Andean beneficiary countries is committed to 

conclude negotiation of a Free Trade Area of the Americas by 

the year 2005, as a means of enhancing the economic security 

of the region. 

(8) Temporarily enhancing trade benefits for Andean beneficiary countries will promote the growth of free enterprise and 

economic opportunity in these countries and serve the security 

interests of the United States, the region, and the world. 

SEC. 3103. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT. 

(a) ELIGIBILITY OF CERTAIN ARTICLES.—Section 204 of the Andean Trade Preference Act (19 U.S.C. 3203) is amended—

(1) by striking subsection (c) and redesignating subsections 

(d) through (g) as subsections (c) through (f), respectively; and 

(2) by amending subsection (b) to read as follows: 

‘‘(b) EXCEPTIONS AND SPECIAL RULES.—

‘‘(1) CERTAIN ARTICLES THAT ARE NOT IMPORT-SENSITIVE.—

The President may proclaim duty-free treatment under this 

title for any article described in subparagraph (A), (B), (C), or 

(D) that is the growth, product, or manufacture of an ATPDEA 

beneficiary country and that meets the requirements of this 

section, if the President determines that such article is not import-sensitive in the context of imports from ATPDEA beneficiary countries: 

63

‘‘(A) Footwear not designated at the time of the effective 

date of this Act as eligible for the purpose of the generalized system of preferences under title V of the Trade Act 

of 1974. ‘‘(B) Petroleum, or any product derived from petroleum, 

provided for in headings 2709 and 2710 of the HTS. ‘‘(C) Watches and watch parts (including cases, bracelets 

and straps), of whatever type including, but not limited to, 

mechanical, quartz digital or quartz analog, if such watches or watch parts contain any material which is the product of any country with respect to which HTS column 2 

rates of duty apply. ‘‘(D) Handbags, luggage, flat goods, work gloves, and 

leather wearing apparel that were not designated on August 5, 1983, as eligible articles for purposes of the generalized system of preferences under title V of the Trade Act 

of 1974. ‘‘(2) EXCLUSIONS.—Subject to paragraph (3), duty-free treatment under this title may not be extended to— ‘‘(A) textiles and apparel articles which were not eligible 

articles for purposes of this title on January 1, 1994, as 

this title was in effect on that date; ‘‘(B) rum and tafia classified in subheading 2208.40 of 

the HTS; or ‘‘(C) sugars, syrups, and sugar-containing products subject to over-quota duty rates under applicable tariff-rate 

quotas. ‘‘(3) APPAREL ARTICLES.— ‘‘(A) IN GENERAL.—Apparel articles that are imported directly into the customs territory of the United States from 

an ATPDEA beneficiary country shall enter the United 

States free of duty and free of any quantitative restrictions, limitations, or consultation levels, but only if such 

articles are described in subparagraph (B). 

‘‘(B) COVERED ARTICLES.—The apparel articles referred 

to in subparagraph (A) are the following: ‘‘(i) APPAREL ARTICLES ASSEMBLED FROM PRODUCTS

OF THE UNITED STATES AND ATPDEA BENEFICIARY

COUNTRIES OR PRODUCTS NOT AVAILABLE IN COMMER- CIAL QUANTITIES.—Apparel articles sewn or otherwise 

assembled in 1 or more ATPDEA beneficiary countries, or the United States, or both, exclusively from 

any one or any combination of the following: 

‘‘(I) Fabrics or fabric components formed, or 

components knit-to-shape, in the United States, 

from yarns formed in the United States or 1 or 

more ATPDEA beneficiary countries (including 

fabrics not formed from yarns, if such fabrics are 

classifiable under heading 5602 or 5603 of the 

HTS and are formed in the United States). Apparel articles shall qualify under this subclause 

only if all dyeing, printing, and finishing of the 

fabrics from which the articles are assembled, if 

the fabrics are knit fabrics, is carried out in the 

United States. Apparel articles shall qualify under 

64

this subclause only if all dyeing, printing, and finishing of the fabrics from which the articles are 

assembled, if the fabrics are woven fabrics, is carried out in the United States. ‘‘(II) Fabrics or fabric components formed or 

components knit-to-shape, in 1 or more ATPDEA 

beneficiary countries, from yarns formed in 1 or 

more ATPDEA beneficiary countries, if such fabrics (including fabrics not formed from yarns, if 

such fabrics are classifiable under heading 5602 or 

5603 of the HTS and are formed in 1 or more 

ATPDEA beneficiary countries) or components are 

in chief weight of llama or alpaca. ‘‘(III) Fabrics or yarn that is not formed in the 

United States or in one or more ATPDEA beneficiary countries, to the extent that apparel articles of such fabrics or yarn would be eligible for 

preferential treatment, without regard to the 

source of the fabrics or yarn, under Annex 401 of 

the NAFTA. ‘‘(ii) ADDITIONAL FABRICS.—At the request of any interested party, the President is authorized to proclaim 

additional fabrics and yarns as eligible for preferential 

treatment under clause (i)(III) if— ‘‘(I) the President determines that such fabrics 

or yarns cannot be supplied by the domestic industry in commercial quantities in a timely manner; ‘‘(II) the President has obtained advice regarding the proposed action from the appropriate advisory committee established under section 135 of 

the Trade Act of 1974 (19 U.S.C. 2155) and the 

United States International Trade Commission; ‘‘(III) within 60 days after the request, the 

President has submitted a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the 

Senate that sets forth the action proposed to be 

proclaimed and the reasons for such action, and 

the advice obtained under subclause (II); 

‘‘(IV) a period of 60 calendar days, beginning 

with the first day on which the President has met 

the requirements of subclause (III), has expired; 

and 

‘‘(V) the President has consulted with such committees regarding the proposed action during the 

period referred to in subclause (III). 

‘‘(iii) APPAREL ARTICLES ASSEMBLED IN 1 OR MORE

ATPDEA BENEFICIARY COUNTRIES FROM REGIONAL FAB- RICS OR REGIONAL COMPONENTS.—(I) Subject to the 

limitation set forth in subclause (II), apparel articles 

sewn or otherwise assembled in 1 or more ATPDEA 

beneficiary countries from fabrics or from fabric components formed or from components knit-to-shape, in 

1 or more ATPDEA beneficiary countries, from yarns 

65

formed in the United States or 1 or more ATPDEA 

beneficiary countries (including fabrics not formed 

from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are formed in 1 or 

more ATPDEA beneficiary countries), whether or not 

the apparel articles are also made from any of the fabrics, fabric components formed, or components knit-toshape described in clause (i). 

‘‘(II) The preferential treatment referred to in subclause (I) shall be extended in the 1-year period beginning December 1, 2001, and in each of the 5 succeeding 1-year periods, to imports of apparel articles 

in an amount not to exceed the applicable percentage 

of the aggregate square meter equivalents of all apparel articles imported into the United States in the 

preceding 12-month period for which data are available. 

‘‘(III) For purposes of subclause (II), the term ‘applicable percentage’ means 3 percent for the 1-year period beginning December 1, 2001, increased in each of 

the 5 succeeding 1-year periods by equal increments, 

so that for the period beginning December 1, 2005, the 

applicable percentage does not exceed 6 percent. 

‘‘(iv) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES.—A handloomed, handmade, or folklore article of 

an ATPDEA beneficiary country identified under subparagraph (C) that is certified as such by the competent authority of such beneficiary country. 

‘‘(v) SPECIAL RULES.—

‘‘(I) EXCEPTION FOR FINDINGS AND TRIMMINGS.—

An article otherwise eligible for preferential treatment under this paragraph shall not be ineligible 

for such treatment because the article contains 

findings or trimmings of foreign origin, if such 

findings and trimmings do not exceed 25 percent 

of the cost of the components of the assembled 

product. Examples of findings and trimmings are 

sewing thread, hooks and eyes, snaps, buttons, 

‘bow buds’, decorative lace, trim, elastic strips, 

zippers, including zipper tapes and labels, and 

other similar products. 

‘‘(II) CERTAIN INTERLINING.—(aa) An article otherwise eligible for preferential treatment under 

this paragraph shall not be ineligible for such 

treatment because the article contains certain 

interlinings of foreign origin, if the value of such 

interlinings (and any findings and trimmings) 

does not exceed 25 percent of the cost of the components of the assembled article. 

‘‘(bb) Interlinings eligible for the treatment described in division (aa) include only a chest type 

plate, ‘hymo’ piece, or ‘sleeve header’, of woven or 

weft-inserted warp knit construction and of coarse 

animal hair or man-made filaments. 

66

‘‘(cc) The treatment described in this subclause 

shall terminate if the President makes a determination that United States manufacturers are 

producing such interlinings in the United States 

in commercial quantities. ‘‘(III) DE MINIMIS RULE.—An article that would 

otherwise be ineligible for preferential treatment 

under this subparagraph because the article contains fibers or yarns not wholly formed in the 

United States or in one or more ATPDEA beneficiary countries shall not be ineligible for such 

treatment if the total weight of all such fibers or 

yarns is not more than 7 percent of the total 

weight of the good. ‘‘(C) HANDLOOMED, HANDMADE, AND FOLKLORE ARTI- CLES.—For purposes of subparagraph (B)(iv), the President 

shall consult with representatives of the ATPDEA beneficiary countries concerned for the purpose of identifying 

particular textile and apparel goods that are mutually 

agreed upon as being handloomed, handmade, or folklore 

goods of a kind described in section 2.3(a), (b), or (c) of the 

Annex or Appendix 3.1.B.11 of the Annex. ‘‘(D) PENALTIES FOR TRANSSHIPMENT.— ‘‘(i) PENALTIES FOR EXPORTERS.—If the President determines, based on sufficient evidence, that an exporter has engaged in transshipment with respect to 

apparel articles from an ATPDEA beneficiary country, 

then the President shall deny all benefits under this 

title to such exporter, and any successor of such exporter, for a period of 2 years. ‘‘(ii) PENALTIES FOR COUNTRIES.—Whenever the 

President finds, based on sufficient evidence, that 

transshipment has occurred, the President shall request that the ATPDEA beneficiary country or countries through whose territory the transshipment has 

occurred take all necessary and appropriate actions to 

prevent such transshipment. If the President determines that a country is not taking such actions, the 

President shall reduce the quantities of apparel articles that may be imported into the United States from 

such country by the quantity of the transshipped articles multiplied by 3, to the extent consistent with the 

obligations of the United States under the WTO. 

‘‘(iii) TRANSSHIPMENT DESCRIBED.—Transshipment 

within the meaning of this subparagraph has occurred 

when preferential treatment under subparagraph (A) 

has been claimed for an apparel article on the basis of 

material false information concerning the country of 

origin, manufacture, processing, or assembly of the article or any of its components. For purposes of this 

clause, false information is material if disclosure of the 

true information would mean or would have meant 

that the article is or was ineligible for preferential 

treatment under subparagraph (A). ‘‘(E) BILATERAL EMERGENCY ACTIONS.—

67

‘‘(i) IN GENERAL.—The President may take bilateral 

emergency tariff actions of a kind described in section 

4 of the Annex with respect to any apparel article imported from an ATPDEA beneficiary country if the application of tariff treatment under subparagraph (A) to 

such article results in conditions that would be cause 

for the taking of such actions under such section 4 

with respect to a like article described in the same 8-

digit subheading of the HTS that is imported from 

Mexico. ‘‘(ii) RULES RELATING TO BILATERAL EMERGENCY AC- TION.—For purposes of applying bilateral emergency 

action under this subparagraph— ‘‘(I) the requirements of paragraph (5) of section 

4 of the Annex (relating to providing compensation) shall not apply; ‘‘(II) the term ‘transition period’ in section 4 of 

the Annex shall mean the period ending December 

31, 2006; and ‘‘(III) the requirements to consult specified in 

section 4 of the Annex shall be treated as satisfied 

if the President requests consultations with the 

ATPDEA beneficiary country in question and the 

country does not agree to consult within the time 

period specified under section 4. ‘‘(4) CUSTOMS PROCEDURES.— ‘‘(A) IN GENERAL.— ‘‘(i) REGULATIONS.—Any importer that claims preferential treatment under paragraph (1) or (3) shall 

comply with customs procedures similar in all material respects to the requirements of Article 502(1) of 

the NAFTA as implemented pursuant to United States 

law, in accordance with regulations promulgated by 

the Secretary of the Treasury. 

‘‘(ii) DETERMINATION.— ‘‘(I) IN GENERAL.—In order to qualify for the 

preferential treatment under paragraph (1) or (3) 

and for a Certificate of Origin to be valid with respect to any article for which such treatment is 

claimed, there shall be in effect a determination 

by the President that each country described in 

subclause (II)— ‘‘(aa) has implemented and follows; or 

‘‘(bb) is making substantial progress toward 

implementing and following, 

procedures and requirements similar in all material respects to the relevant procedures and requirements under chapter 5 of the NAFTA. ‘‘(II) COUNTRY DESCRIBED.—A country is described in this subclause if it is an ATPDEA beneficiary country— ‘‘(aa) from which the article is exported; or 

‘‘(bb) in which materials used in the production of the article originate or in which the article or such materials undergo production 

68

that contributes to a claim that the article is 

eligible for preferential treatment under paragraph (1) or (3). ‘‘(B) CERTIFICATE OF ORIGIN.—The Certificate of Origin 

that otherwise would be required pursuant to the provisions of subparagraph (A) shall not be required in the case 

of an article imported under paragraph (1) or (3) if such 

Certificate of Origin would not be required under Article 

503 of the NAFTA (as implemented pursuant to United 

States law), if the article were imported from Mexico. ‘‘(5) DEFINITIONS.—In this subsection— ‘‘(A) ANNEX.—The term ‘the Annex’ means Annex 300-B 

of the NAFTA. ‘‘(B) ATPDEA BENEFICIARY COUNTRY.—The term ‘ATPDEA beneficiary country’ means any ‘beneficiary 

country’, as defined in section 203(a)(1) of this title, which 

the President designates as an ATPDEA beneficiary country, taking into account the criteria contained in subsections (c) and (d) of section 203 and other appropriate 

criteria, including the following: ‘‘(i) Whether the beneficiary country has demonstrated a commitment to— ‘‘(I) undertake its obligations under the WTO, 

including those agreements listed in section 101(d) 

of the Uruguay Round Agreements Act, on or 

ahead of schedule; and ‘‘(II) participate in negotiations toward the completion of the FTAA or another free trade agreement. ‘‘(ii) The extent to which the country provides protection of intellectual property rights consistent with 

or greater than the protection afforded under the 

Agreement on Trade-Related Aspects of Intellectual 

Property Rights described in section 101(d)(15) of the 

Uruguay Round Agreements Act. 

‘‘(iii) The extent to which the country provides internationally recognized worker rights, including—

‘‘(I) the right of association; 

‘‘(II) the right to organize and bargain collectively; 

‘‘(III) a prohibition on the use of any form of 

forced or compulsory labor; 

‘‘(IV) a minimum age for the employment of 

children; and 

‘‘(V) acceptable conditions of work with respect 

to minimum wages, hours of work, and occupational safety and health; 

‘‘(iv) Whether the country has implemented its commitments to eliminate the worst forms of child labor, 

as defined in section 507(6) of the Trade Act of 1974. 

‘‘(v) The extent to which the country has met the 

counternarcotics certification criteria set forth in section 490 of the Foreign Assistance Act of 1961 (22 

U.S.C. 2291j) for eligibility for United States assistance. 

69

‘‘(vi) The extent to which the country has taken 

steps to become a party to and implements the InterAmerican Convention Against Corruption. 

‘‘(vii) The extent to which the country—

‘‘(I) applies transparent, nondiscriminatory, and 

competitive procedures in government procurement equivalent to those contained in the Agreement on Government Procurement described in 

section 101(d)(17) of the Uruguay Round Agreements Act; and 

‘‘(II) contributes to efforts in international fora 

to develop and implement international rules in 

transparency in government procurement. 

‘‘(C) NAFTA.—The term ‘NAFTA’ means the North 

American Free Trade Agreement entered into between the 

United States, Mexico, and Canada on December 17, 1992. 

‘‘(D) WTO.—The term ‘WTO’ has the meaning given that 

term in section 2 of the Uruguay Round Agreements Act 

(19 U.S.C. 3501). 

‘‘(E) ATPDEA.—The term ‘ATPDEA’ means the Andean 

Trade Promotion and Drug Eradication Act.’’. (b) DETERMINATION REGARDING RETENTION OF DESIGNATION.—

Section 203(e)(1) of the Andean Trade Preference Act (19 U.S.C. 

3202(e)(1)) is amended—

(1) by redesignating subparagraphs (A) and (B) as clauses (i) 

and (ii), respectively; 

(2) by inserting ‘‘(A)’’ after ‘‘(1)’’; and 

(3) by adding at the end the following: 

‘‘(B) The President may, after the requirements of paragraph (2) 

have been met—

‘‘(i) withdraw or suspend the designation of any country as 

an ATPDEA beneficiary country, or ‘‘(ii) withdraw, suspend, or limit the application of preferential treatment under section 204(b)(1) or (3) to any article 

of any country, 

if, after such designation, the President determines that, as a result of changed circumstances, the performance of such country is 

not satisfactory under the criteria set forth in section 204(b)(5)(B).’’. 

(c) CONFORMING AMENDMENTS.—(1) Section 202 of the Andean 

Trade Preference Act (19 U.S.C. 3201) is amended by inserting ‘‘(or 

other preferential treatment)’’ after ‘‘treatment’’. 

(2) Section 204(a) of the Andean Trade Preference Act (19 U.S.C. 

3203(a)) is amended—

(A) in paragraph (1), by inserting ‘‘(or otherwise provided 

for)’’ after ‘‘eligibility’’; and 

(B) in paragraph (2), by striking ‘‘subsection (a)’’ and inserting ‘‘paragraph (1)’’. 

SEC. 3104. TERMINATION OF PREFERENTIAL TREATMENT. 

Section 208 of the Andean Trade Preference Act (19 U.S.C. 3206) 

is amended to read as follows: 

‘‘SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT. 

‘‘No duty-free treatment or other preferential treatment extended 

to beneficiary countries under this title shall remain in effect after 

December 31, 2006.’’. 

70

SEC. 3105. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT. 

Section 213(b)(2)(A) of the Carribean Basin Economic Recovery 

Act (19 U.S.C. 2703(b)(2)(A)) is amended as follows: 

(1) Clause (i) is amended—

(A) by striking the matter preceding subclause (I) and 

inserting the following: 

‘‘(i) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE

CBTPA BENEFICIARY COUNTRIES.—Apparel articles sewn 

or otherwise assembled in one or more CBTPA beneficiary countries from fabrics wholly formed and cut, 

or from components knit-to-shape, in the United 

States from yarns wholly formed in the United States, 

(including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the 

HTS and are wholly formed and cut in the United 

States) that are—’’; and 

(B) by adding at the end the following: 

‘‘Apparel articles shall qualify under the preceding 

sentence only if all dyeing, printing, and finishing of 

the fabrics from which the articles are assembled, if 

the fabrics are knit fabrics, is carried out in the 

United States. Apparel articles shall qualify under the 

first sentence of this clause only if all dyeing, printing, 

and finishing of the fabrics from which the articles are 

assembled, if the fabrics are woven fabrics, is carried 

out in the United States.’’. 

(2) Clause (ii) is amended to read as follows: 

‘‘(ii) OTHER APPAREL ARTICLES ASSEMBLED IN ONE OR

MORE CBTPA BENEFICIARY COUNTRIES.—Apparel articles sewn or otherwise assembled in one or more 

CBTPA beneficiary countries with thread formed in 

the United States from fabrics wholly formed in the 

United States and cut in one or more CBTPA beneficiary countries from yarns wholly formed in the 

United States, or from components knit-to-shape in 

the United States from yarns wholly formed in the 

United States, or both (including fabrics not formed 

from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are wholly formed in 

the United States). Apparel articles shall qualify 

under the preceding sentence only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are knit fabrics, is 

carried out in the United States. Apparel articles shall 

qualify under the first sentence of this clause only if 

all dyeing, printing, and finishing of the fabrics from 

which the articles are assembled, if the fabrics are 

woven fabrics, is carried out in the United States.’’. 

(3) Clause (iii)(II) is amended to read as follows: 

‘‘(II) The amount referred to in subclause (I) is as 

follows: 

‘‘(aa) 290,000,000 square meter equivalents during the 1-year period beginning on October 1, 

2001. 

71

‘‘(bb) 500,000,000 square meter equivalents during the 1-year period beginning on October 1, 

2002. ‘‘(cc) 850,000,000 square meter equivalents during the 1-year period beginning on October 1, 

2003. ‘‘(dd) 970,000,000 square meter equivalents in 

each succeeding 1-year period through September 

30, 2008.’’. (4) Clause (iii)(IV) is amended to read as follows: ‘‘(IV) The amount referred to in subclause (III) is as 

follows: ‘‘(aa) 4,872,000 dozen during the 1-year period 

beginning on October 1, 2001. ‘‘(bb) 9,000,000 dozen during the 1-year period 

beginning on October 1, 2002. ‘‘(cc) 10,000,000 dozen during the 1-year period 

beginning on October 1, 2003. ‘‘(dd) 12,000,000 dozen in each succeeding 1-

year period through September 30, 2008.’’. (5) Section 213(b)(2)(A) of such Act is further amended by 

adding at the end the following new clause: 

‘‘(ix) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE

CBTPA BENEFICIARY COUNTRIES FROM UNITED STATES

AND CBTPA BENEFICIARY COUNTRY COMPONENTS.—Apparel articles sewn or otherwise assembled in one or 

more CBTPA beneficiary countries with thread formed 

in the United States from components cut in the 

United States and in one or more CBTPA beneficiary 

countries from fabric wholly formed in the United 

States from yarns wholly formed in the United States, 

or from components knit-to-shape in the United States 

and one or more CBTPA beneficiary countries from 

yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics 

are classifiable under heading 5602 or 5603 of the 

HTS).’’. 

SEC. 3106. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT. 

Section 112(b) of the African Growth and Opportunity Act (19 

U.S.C. 3721(b)) is amended as follows: 

(1) Paragraph (1) is amended by amending the matter preceding subparagraph (A) to read as follows: 

‘‘(1) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Apparel articles 

sewn or otherwise assembled in one or more beneficiary subSaharan African countries from fabrics wholly formed and cut, 

or from components knit-to-shape, in the United States from 

yarns wholly formed in the United States, (including fabrics 

not formed from yarns, if such fabrics are classifiable under 

heading 5602 or 5603 of the HTS and are wholly formed and 

cut in the United States) that are—’’. 

(2) Paragraph (2) is amended to read as follows: 

‘‘(2) OTHER APPAREL ARTICLES ASSEMBLED IN ONE OR MORE

BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Apparel artiVerDate jun 06 2002 02:56 Jun 20, 2002 Jkt 099008 PO 00000 Frm 00071 Fmt 6659 Sfmt 6602 E:\HR\OC\HR518.XXX pfrm15 PsN: HR518
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cles sewn or otherwise assembled in one or more beneficiary 

sub-Saharan African countries with thread formed in the 

United States from fabrics wholly formed in the United States 

and cut in one or more beneficiary sub-Saharan African countries from yarns wholly formed in the United States, or from 

components knit-to-shape in the United States from yarns 

wholly formed in the United States, or both (including fabrics 

not formed from yarns, if such fabrics are classifiable under 

heading 5602 or 5603 of the HTS and are wholly formed in the 

United States).’’. (3) Paragraph (3) is amended— (A) by amending the matter preceding subparagraph (A) 

to read as follows: ‘‘(3) APPAREL ARTICLES FROM REGIONAL FABRIC OR YARNS.— Apparel articles wholly assembled in one or more beneficiary 

sub-Saharan African countries from fabric wholly formed in 

one or more beneficiary sub-Saharan African countries from 

yarns originating either in the United States or one or more 

beneficiary sub-Saharan African countries (including fabrics 

not formed from yarns, if such fabrics are classified under 

heading 5602 or 5603 of the HTS and are wholly formed in one 

or more beneficiary sub-Saharan African countries), or from 

components knit-to-shape in one or more beneficiary sub-Saharan African countries from yarns originating either in the 

United States or one or more beneficiary sub-Saharan African 

countries, or apparel articles wholly formed on seamless knitting machines in a beneficiary sub-Saharan African country 

from yarns originating either in the United States or one or 

more beneficiary sub-Saharan African countries, subject to the 

following:’’; 

(B) in subparagraph (A)(ii)— (i) by striking ‘‘1.5’’ and inserting ‘‘3’’; and 

(ii) by striking ‘‘3.5’’ and inserting ‘‘7’’; and 

(C) by amending subparagraph (B) to read as follows: 

‘‘(B) SPECIAL RULES FOR LESSER DEVELOPED COUN- TRIES.—

‘‘(i) IN GENERAL.—Subject to subparagraph (A), preferential treatment under this paragraph shall be extended through September 30, 2004, for apparel articles wholly assembled, or knit-to-shape and wholly assembled, or both, in one or more lesser developed beneficiary sub-Saharan African countries regardless of 

the country of origin of the fabric or the yarn used to 

make such articles. ‘‘(ii) LESSER DEVELOPED BENEFICIARY SUB-SAHARAN

AFRICAN COUNTRY.—For purposes of clause (i), the 

term ‘lesser developed beneficiary sub-Saharan African 

country’ means—

‘‘(I) a beneficiary sub-Saharan African country 

that had a per capita gross national product of 

less than $1,500 in 1998, as measured by the 

International Bank for Reconstruction and Development; ‘‘(II) Botswana; and 

‘‘(III) Namibia.’’. 

73

(4) Paragraph (4)(B) is amended by striking ‘‘18.5’’ and inserting ‘‘21.5’’. 

(5) Section 112(b) of such Act is further amended by adding 

at the end the following new paragraph: 

‘‘(7) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES FROM UNITED STATES

AND BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY COMPONENTS.—Apparel articles sewn or otherwise assembled in one 

or more beneficiary sub-Saharan African countries with thread 

formed in the United States from components cut in the 

United States and one or more beneficiary sub-Saharan African countries from fabric wholly formed in the United States 

from yarns wholly formed in the United States, or from components knit-to-shape in the United States and one or more beneficiary sub-Saharan African countries from yarns wholly 

formed in the United States, or both (including fabrics not 

formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS).’’. 

DIVISION D—EXTENSION OF CERTAIN 

PREFERENTIAL TRADE TREATMENT 

AND OTHER PROVISIONS 

SEC. 4101. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES. 

(a) EXTENSION OF DUTY-FREE TREATMENT UNDER SYSTEM.—Section 505 of the Trade Act of 1974 (19 U.S.C. 2465(a)) is amended 

by striking ‘‘September 30, 2001’’ and inserting ‘‘December 31, 

2002’’. 

(b) RETROACTIVE APPLICATION FOR CERTAIN LIQUIDATIONS AND

RELIQUIDATIONS.—

(1) IN GENERAL.—Notwithstanding section 514 of the Tariff 

Act of 1930 or any other provision of law, and subject to paragraph (2), the entry—

(A) of any article to which duty-free treatment under 

title V of the Trade Act of 1974 would have applied if the 

entry had been made on September 30, 2001, 

(B) that was made after September 30, 2001, and before 

the date of the enactment of this Act, and 

(C) to which duty-free treatment under title V of that 

Act did not apply, 

shall be liquidated or reliquidated as free of duty, and the Secretary of the Treasury shall refund any duty paid with respect 

to such entry. As used in this subsection, the term ‘‘entry’’ includes a withdrawal from warehouse for consumption. 

(2) REQUESTS.—Liquidation or reliquidation may be made 

under paragraph (1) with respect to an entry only if a request 

therefor is filed with the Customs Service, within 180 days 

after the date of the enactment of this Act, that contains sufficient information to enable the Customs Service—

(A) to locate the entry; or 

(B) to reconstruct the entry if it cannot be located.

74

SEC. 4102. FUND FOR WTO DISPUTE SETTLEMENTS. 

(a) ESTABLISHMENT OF FUND.—There is established in the Treasury a fund for the payment of settlements under this section. 

(b) AUTHORITY OF USTR TO PAY SETTLEMENTS.—Amounts in the 

fund established under subsection (a) shall be available, as provided in appropriations Acts, only for the payment by the United 

States Trade Representative of the amount of the total or partial 

settlement of any dispute pursuant to proceedings under the auspices of the World Trade Organization, if—

(1) in the case of a total or partial settlement in an amount 

of not more than $10,000,000, the Trade Representative certifies to the Secretary of the Treasury that the settlement is 

in the best interests of the United States; and 

(2) in the case of a total or partial settlement in an amount 

of more than $10,000,000, the Trade Representative certifies to 

the Congress that the settlement is in the best interests of the 

United States. 

(c) APPROPRIATIONS.—There are authorized to be appropriated to 

the fund established under subsection (a)—

(1) $50,000,000; and 

(2) amounts equivalent to amounts recovered by the United 

States pursuant to the settlement of disputes pursuant to proceedings under the auspices of the World Trade Organization. 

Amounts appropriated to the fund are authorized to remain available until expended. 

(c) MANAGEMENT OF FUND.—Sections 9601 and 9602(b) of the Internal Revenue Code of 1986 shall apply to the fund established 

under subsection (a) to the same extent as such provisions apply 

to trust funds established under subchapter A of chapter 98 of such 

Code. 

SEC. 4103. PAYMENT OF DUTIES AND FEES. 

Section 505(a) of the Tariff Act of 1930 (19 U.S.C. 1505(a)) is 

amended—

(1) in the first sentence—

(A) by striking ‘‘Unless the merchandise’’ and inserting 

‘‘Unless the entry of merchandise is covered by an import 

activity summary statement, or the merchandise’’; and 

(B) by inserting after ‘‘by regulation’’ the following: ‘‘(but 

not to exceed 10 working days after entry or release, 

whichever occurs first)’’; and 

(2) by striking the second and third sentences and inserting 

the following: ‘‘If an import activity summary statement is 

filed, the importer or record shall deposit estimated duties and 

fees for entries of merchandise covered by the import activity 

summary statement no later than the 15th day of the month 

following the month in which the merchandise is entered or released, whichever occurs first.’’.

Æ