SECTION 1. AMENDMENTS TO UNITED STATES INSULAR POSSESSION PROGRAM.

    (a) Production Certificates.--The additional U.S. Note 5(h) to 
chapter 91 of the Harmonized Tariff Schedule of the United States is 
amended--
            (1) by amending subparagraphs (i) and (ii) to read as 
        follows:
``(i) In the case of each calendar quarter beginning after January 1, 
        2002, and before January 1, 2016, the Secretaries jointly, 
        shall:
        ``(A) verify for the preceding calendar quarter both the wages 
                paid by each producer to permanent residents of the 
                insular possessions (including the value of any fringe 
                benefits) and the total quantity and value of watches 
                produced in the insular possessions and imported into 
                the customs territory of the United States; and
        ``(B) issue to each producer (not later than 30 days after the 
                end of the calendar quarter) a certificate for the 
                applicable amount.
``(ii) For purposes of subparagraph (i), except as provided in 
        subparagraphs (iii) and (iv), the term `applicable amount' 
        means an amount equal to the sum of:
        ``(A) 90 percent of the producer's creditable wages (including 
                the value of any fringe benefits) on watch assembly 
                during the preceding calendar quarter (but only the 
                first 300,000 units per calendar year); plus
        ``(B) the applicable graduated declining percentage (determined 
                each year by the Secretaries) of the producer's 
                creditable wages (including the value of any fringe 
                benefits) on the assembly during the preceding calendar 
                quarter for units in excess of 300,000 that calendar 
                year, but not in excess of 750,000 that calendar year; 
                plus
        ``(C) the difference between the duties that would have been 
                due on the producer's watches (excluding digital 
                watches) imported into the customs territory of the 
                United States during the preceding quarter if they had 
                been imported from a country eligible for normal trade 
                relations subject to duty at the rates set forth in 
                column 1 under this chapter that were in effect on 
                January 1, 2001, and the duties that would have been 
                due on those watches if they had been imported from the 
                same country under the tariffs in effect for the 
                preceding calendar quarter.''; and
            (2) by amending subparagraph (v) to read as follows:
``(v)(A) Any certificate issued under subparagraph (i) shall entitle 
        the certificate holder to secure the refund of duties equal to 
        the face value of the certificate on watches, watch movements 
        and, with the exception of discrete cases, parts therefor 
        imported into the customs territory of the United States by the 
        certificate holder. Such refunds shall be made under 
        regulations issued by the Treasury Department. Not more than 5 
        percent of such refunds may be retained as a reimbursement to 
        the Customs Service for the administrative costs of making the 
        refunds. If the Secretary of the Treasury determines that there 
        is an insufficient level of duties from watch and watch-related 
        tariffs, the Secretary may authorize refunds of duties 
        collected on jewelry under chapter 71 or any other duties that 
        the Secretary determines are appropriate.
``(B) At the election of the certificate holder and upon making the 
        certification described in this clause, the Secretary of the 
        Treasury shall pay to the holder the face value of the 
        certificate, less the value of (1) any duty refund claimed by 
        the holder under the certificate, plus (2) a discount of not 
        more than 2 percent of the face value of the certificate, as 
        determined by the Secretary of the Treasury. A certificate 
        holder shall not be eligible for direct payment under this 
        clause unless the certificate holder certifies to the 
        Secretaries that the funds received will be reinvested or 
        utilized to support and continue employment in the Virgin 
        Islands.
``(C) The Secretary of the Treasury is authorized to make the payments 
        provided for in clause (B) from duties collected on watches, 
        watch movements and, with the exception of discrete cases, 
        parts therefor. If such duties are insufficient, the Secretary 
        of the Treasury is authorized to make those payments from 
        duties collected on jewelry under chapter 71 or any other 
        duties that the Secretary determines are appropriate.''.
    (b) Jewelry.--Additional U.S. Note to chapter 71 of the Harmonized 
Tariff Schedule of the United States is amended--
            (1) by redesignating paragraphs (b), (c), (d), and (e) as 
        paragraphs (c), (d), (e), and (f), respectively;
            (2) by inserting after paragraph (a) the following new 
        paragraph:
``(b) The 750,000 unit limitation in additional U.S. Note 5(h)(ii)(B) 
        to chapter 91 shall not apply to articles of jewelry subject to 
        this note.''; and
            (3) by striking paragraph (f), as so redesignated, and 
        inserting the following:
``(f) Notwithstanding any other provision of law, prior to February 9, 
        2004, any article of jewelry provided for in heading 7113 that 
        is assembled in the Virgin Islands, Guam, or American Samoa 
        shall be treated as a product of the Virgin Islands, Guam, or 
        American Samoa for purposes of this note and General Note 
        3(a)(iv) of this Schedule.''.

SEC. 2. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on April 1, 2002, 
with respect to goods imported into the customs territory of the United 
States on or after January 1, 2002.
Output: Amends the Harmonized Tariff Schedule of the United States to revise clock and watch provisions to require the Secretary of Commerce and the Secretary of the Interior, jointly, for each calendar quarter beginning after January 1, 2002, and before January 1, 2016, to: (1) verify for the preceding calendar quarter both the wages paid by each producer to permanent residents of the insular possessions (including the value of any fringe benefits) and the total quantity and value of watches produced there and imported into the U.S. customs territory; and (2) issue to each producer a certificate for the applicable amount.Directs the Secretary of the Treasury, at the election of the certificate holder, to pay to the holder the face value of the certificate, less the value of any duty refund claimed by the holder under the certificate, plus a discount of not more than two percent of the face value of the certificate as determined by the Secretary of the Treasury.