[Federal Register Volume 63, Number 147 (Friday, July 31, 1998)]
[Rules and Regulations]
[Pages 40822-40823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20456]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 24

[T.D. 98-64]
RIN 1515-AC31


Exporters not Liable for Harbor Maintenance Fee

AGENCY: Customs Service, Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations to remove the 
requirement that an exporter of cargo is liable for the payment of the 
Harbor Maintenance Fee when cargo is loaded for export at a port 
subject to the Harbor Maintenance Fee. This change is required pursuant 
to a Supreme Court decision finding that the Harbor Maintenance Fee for 
exporters was in violation of the Export Clause of the Constitution of 
the United States.

EFFECTIVE DATE: The amendment to 19 CFR 24.24 is effective July 31, 
1998. Collection of the Harbor Maintenance Fee on exports was 
discontinued effective April 25, 1998.

FOR FURTHER INFORMATION CONTACT: Patricia Barbare, Operations 
Management Specialist, Budget Division, U.S. Customs Service, (202) 
927-0310.

SUPPLEMENTARY INFORMATION:

Background

    The Harbor Maintenance Fee was created by the Water Resources 
Development Act of 1986 (Pub. L. 99-662) (26 U.S.C. 4461 et seq.) (the 
Act), and is implemented by Sec. 24.24 of the Customs Regulations (19 
CFR 24.24). The fee, pursuant to the Act and as implemented by the 
regulations, became effective on April 1, 1987, and has been assessed 
on port use associated with imports, exports, and movements of cargo 
and passengers between domestic ports. The fee is paid to the U.S. 
Customs Service. The fee has been imposed at the time of loading for 
exports and unloading for other shipments. Exporters, importers and 
domestic shippers have been obligated, pursuant to the statute and 
regulations, to pay 0.125 percent of the value of the commercial cargo 
shipped through identified ports. The fee, once collected by Customs, 
is deposited in the Harbor Maintenance Trust Fund, from which Congress 
may appropriate amounts to pay for harbor maintenance and development 
projects and related expenses.

[[Page 40823]]

    On March 31, 1998, the Supreme Court in United States v. United 
States Shoe Corp., 118 S. Ct. 1290, No. 97-372 (March 31, 1998), 
declared that the Harbor Maintenance Fee is unconstitutional as applied 
to exports. The Court found that the Harbor Maintenance Fee was a tax 
imposed on an ad valorem basis and as such, the fee was not a fair 
approximation of the services, facilities or benefits furnished to the 
exporter. Therefore, the Court ruled the Harbor Maintenance Fee does 
not qualify as a permissible user fee for exporters and is in violation 
of the Export Clause of the Constitution. By a notice published in the 
Federal Register (63 FR 24209) on May 1, 1998, Customs announced that 
as of April 25, 1998, it will no longer be collecting the Harbor 
Maintenance Fee for cargo loaded on board a vessel for export.
    This document amends Sec. 24.24 of the Customs Regulations (19 CFR 
24.24) to make the regulation consistent with the Supreme Court 
decision; the document amends the regulation by removing the 
requirement that an exporter of cargo is liable for the payment of the 
Harbor Maintenance Fee when cargo is loaded for export at a port 
subject to the Harbor Maintenance Fee.

Inapplicability of Notice and Delayed Effective Date

    Because the amendment to the Customs Regulations contained in this 
document removing exporters from having to pay the Harbor Maintenance 
Fee is being made in response to a Supreme Court decision, pursuant to 
section 553(a)(1) of the Administrative Procedure Act (5 U.S.C. 
553(a)(1)), no notice of proposed rulemaking or public procedure is 
necessary. For the same reason, a delayed effective date is not 
required pursuant to 5 U.S.C. 553(d)(3).

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply. Accordingly, this final rule is not subject to the 
regulatory analysis or other requirements of 5 U.S.C. 603 and 604.

Executive Order 12866

    This amendment does not meet the criteria of a ``significant 
regulatory action'' as described in E.O. 12866.

Drafting Information

    The principal author of this document was Keith B. Rudich, Esq., 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service. However, personnel from other offices participated in its 
development.

List of Subjects in 19 CFR Part 24

    Accounting, Canada, Claims, Customs duties and inspections, Fees, 
Financial and accounting procedures, Foreign trade statistics, Harbors, 
Imports, Reporting and recordkeeping requirements, Taxes, Trade 
Agreements, U.S.-Canada Free-Trade Agreement, User fees, Wages.

Amendment to the Regulations

    Accordingly, Sec. 24.24 of the Customs Regulations (19 CFR 24.24) 
is amended as follows:

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURES

    1. The general authority for part 24, Customs Regulations (19 CFR 
Part 24) and the specific relevant authority citation for Sec. 24.24 
Customs Regulations (19 CFR 24.24), continue to read as follows:

    Authority: 5 U.S.C. 301, 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 20, Harmonized Tariff Schedule of the United States (HTSUS)), 
1450, 1624; 31 U.S.C. 9701.
* * * * *
    Section 24.24 also issued under 19 U.S.C. 4461, 4462;
* * * * *


Sec. 24.24  [Amended]

    2. Section 24.24 is amended by removing paragraph (d)(3)(ii) and 
redesignating paragraph (d)(3)(iii) as (d)(3)(ii); by removing 
paragraph (e)(2) and redesignating paragraphs (e)(3), (4) and (5) as 
paragraphs (e)(2), (3), and (4) respectively; by removing the word 
``exporter,'' in paragraph (g); by removing the word ``exporter,'' in 
paragraph (h)(1); and by removing the words '', exporting'' and ``the 
SED,'' in paragraph (i).
William F. Riley,
Acting Commissioner of Customs.

    Approved: July 8, 1998.

John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-20456 Filed 7-30-98; 8:45 am]
BILLING CODE 4820-02-P