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September 11, 2001 : Attack on America
House Report 107-320 : Customs Border Security Act of 2001; December 5, 2001



                                  99 006                                 

                            107 th Congress                             

                                 Report                                 

                                       F                                    

                                        E                                    

                        HOUSE OF REPRESENTATIVES                        

                               1st Session                              

                                107 320                                 

                                                                        



                         CUSTOMS BORDER SECURITY ACT OF 2001                   



                                                                         

   December 5, 2001.--Committed to the Committee of the Whole House on   
 the State of the Union and ordered to be printed                        
                                                                         

  Mr. Thomas, from the Committee on Ways and Means, submitted the        
 following                                                               
 R E P O R T                                                             

                              together with                              

                             DISSENTING VIEWS                            

                         [To accompany H.R. 3129]                        

       [Including cost estimate of the Congressional Budget Office]      


     The Committee on Ways and Means, to whom was referred the bill (H.R. 
  3129) to authorize appropriations for fiscal years 2002 and 2003 for the
  United States Customs Service for antiterrorism, drug interdiction, and 
  other operations, for the Office of the United States Trade             
  Representative, for the United States International Trade Commission,   
  and for other purposes, having considered the same, report favorably    
  thereon with an amendment and recommend that the bill as amended do     
  pass.                                                                   

                               CONTENTS                                 
  I.     Introduction                                                     13

     A. Purpose and Summary                                                  

        13                                                                      

     B. Background                                                           

        14                                                                      

     C. Legislative History                                                  

        15                                                                      

        II.                                                                     

          Explanation of the Bill                                                 

        17                                                                      

        III.                                                                    

          Votes of the Committee                                                  

        39                                                                      

        IV.                                                                     

          Budget Effects                                                          

        41                                                                      

     A. Committee Estimate of Budgetary Effects                              

        41                                                                      

     B. Statement Regarding New Budget Authority and Tax Expenditures        

        41                                                                      

     C. Cost Estimate Prepared by the Congressional Budget Office            

        41                                                                      

        V.                                                                      

          Other Matters to be Discussed Under the Rules of the House              

        45                                                                      

     A. Committee Oversight Findings and Recommendations                     

        45                                                                      

          B. Summary of Findings and Recommendations of the Committee on     
     Government Reform and Oversight                                         
        45                                                                      

     C. Constitutional Authority Statement                                   

        45                                                                      

        VI.                                                                     

          Changes in Existing Law Made by the Bill, as Reported                   

        45                                                                      

        VII.                                                                    

          Dissenting Views                                                        

        56                                                                      



   The amendment is as follows:                                           

   Strike all after the enacting clause and insert the following:         


          SECTION 1. SHORT TITLE.                                                 

   This Act may be cited as the ``Customs Border Security Act of 2001''.  

          SEC. 2. TABLE OF CONTENTS.                                              

   The table of contents for this Act is as follows:                      



      Sec. 1. Short title.                                                    

      Sec. 2. Table of contents.                                              

                           TITLE I--UNITED STATES CUSTOMS SERVICE                 

            SUBTITLE A--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL   
                                   OPERATIONS                                     
            Sec. 101. Authorization of appropriations for noncommercial       
      operations, commercial operations, and air and marine interdiction.     
            Sec. 102. Antiterrorist and illicit narcotics detection equipment 
      for the United States-Mexico border, United States-Canada border, and   
      Florida and the Gulf Coast seaports.                                    
      Sec. 103. Compliance with performance plan requirements.                

               SUBTITLE B--CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE    

            Sec. 111. Authorization of appropriations for program to prevent  
      child pornography/child sexual exploitation.                            
                              SUBTITLE C--PERSONNEL PROVISIONS                    

          CHAPTER  1--OVERTIME AND PREMIUM PAY OF OFFICERS OF THE CUSTOMS SERVICE 

      Sec. 121. Correction relating to fiscal year cap.                       

      Sec. 122. Correction relating to overtime pay.                          

      Sec. 123. Correction relating to premium pay.                           

      Sec. 124. Use of savings from payment of premium pay.                   

      Sec. 125. Effective date.                                               

                            CHAPTER  2--MISCELLANEOUS PROVISIONS                  

            Sec. 131. Additional Customs Service officers for United States   
      Canada border.                                                          
            Sec. 132. Study and report relating to personnel practices of the 
      Customs Service.                                                        
            Sec. 133. Study and report relating to accounting and auditing    
      procedures of the Customs Service.                                      
            Sec. 134. Establishment and implementation of cost accounting     
      system; reports.                                                        
            Sec. 135. Study and report relating to timeliness of prospective  
      rulings.                                                                
      Sec. 136. Study and report relating to Customs user fees.               

                            SUBTITLE D--ANTITERRORISM PROVISIONS                  

      Sec. 141. Immunity for United States officials that act in good faith.  

            Sec. 142. Emergency adjustments to offices, ports of entry, or    
      staffing of the Customs Service.                                        
            Sec. 143. Mandatory advanced electronic information for cargo and 
      passengers.                                                             
            Sec. 144. Border search authority for certain contraband in       
      outbound mail.                                                          
            Sec. 145. Authorization of appropriations for reestablishment of  
      Customs operations in New York City.                                    
                        SUBTITLE E--TEXTILE TRANSSHIPMENT PROVISIONS              

            Sec. 151. GAO audit of textile transshipment monitoring by Customs
      Service.                                                                
            Sec. 152. Authorization of appropriations for textile             
      transshipment enforcement operations.                                   
      Sec. 153. Implementation of the African Growth and Opportunity Act.     

                 TITLE II--OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE       

      Sec. 201. Authorization of appropriations.                              

                  TITLE III--UNITED STATES INTERNATIONAL TRADE COMMISSION         

      Sec. 301. Authorization of appropriations.                              

                              TITLE IV--OTHER TRADE PROVISIONS                    

            Sec. 401. Increase in aggregate value of articles exempt from duty
      acquired abroad by United States residents.                             
      Sec. 402. Regulatory audit procedures.                                  


           TITLE I--UNITED STATES CUSTOMS SERVICE                                  

                      Subtitle A--Drug Enforcement and Other Noncommercial and     
           Commercial Operations                                                   
                    SEC. 101. 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) $886,513,000 for fiscal year 2002.''; and                        

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

    ``(B) $909,471,000 for fiscal year 2003.''.                            

   (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) $1,603,482,000 for fiscal year 2002.''; and                      

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

    ``(ii) $1,645,009,000 for fiscal year 2003.''.                         

       (2) Automated commercial environment computer system.--Of the amount
   made available for each of fiscal years 2002 and 2003 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 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 Agreements    
   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) $181,860,000 for fiscal year 2002.''; and                        

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

    ``(B) $186,570,000 for fiscal year 2003.''.                            

     (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. 102. 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 101(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 States-Mexico      
   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 x-rays from   
   the present energy level of 450,000 electron volts to 1,000,000 electron
   volts (1 MeV).                                                          
    (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 States-Canada      
   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.             
       (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 101(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 101(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. 103. 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 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 sections 111 and 112 of this Act.                       
           Subtitle B--Child Cyber-Smuggling Center of the Customs Service         

                    SEC. 111. 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.
           Subtitle C--Personnel Provisions                                        

           CHAPTER 1--OVERTIME AND PREMIUM PAY OF OFFICERS OF THE CUSTOMS SERVICE 

          SEC. 121. CORRECTION RELATING TO FISCAL YEAR CAP.                       

     Section 5(c)(1) of the Act of February 13, 1911 (19 U.S.C. 267(c)(1))
  is amended to read as follows:                                          
       ``(1) Fiscal year cap.--The aggregate of overtime pay under         
   subsection (a) (including commuting compensation under subsection       
   (a)(2)(B)) that a customs officer may be paid in any fiscal year may not
   exceed $30,000, except that--                                           
       ``(A) the Commissioner of Customs or his or her designee may waive  
   this limitation in individual cases in order to prevent excessive costs 
   or to meet emergency requirements of the Customs Service; and           
       ``(B) upon certification by the Commissioner of Customs to the      
   Chairmen of the Committee on Ways and Means of the House of             
   Representatives and the Committee on Finance of the Senate that the     
   Customs Service has in operation a system that provides accurate and    
   reliable data on a daily basis on overtime and premium pay that is being
   paid to customs officers, the Commissioner is authorized to pay any     
   customs officer for one work assignment that would result in the        
   overtime pay of that officer exceeding the $30,000 limitation imposed by
   this paragraph, in addition to any overtime pay that may be received    
   pursuant to a waiver under subparagraph (A).''.                         
          SEC. 122. CORRECTION RELATING TO OVERTIME PAY.                          

     Section 5(a)(1) of the Act of February 13, 1911 (19 U.S.C.           
  267(a)(1)), is amended by inserting after the first sentence the        
  following new sentences: ``Overtime pay provided under this subsection  
  shall not be paid to any customs officer unless such officer actually   
  performed work during the time corresponding to such overtime pay. The  
  preceding sentence shall not apply with respect to the payment of an    
  award or settlement to a customs officer who was unable to perform      
  overtime work as a result of a personnel action in violation of section 
  5596 of title 5, United States Code, section 6(d) of the Fair Labor     
  Standards Act of 1938, or title VII of the Civil Rights Act of 1964.''. 
          SEC. 123. CORRECTION RELATING TO PREMIUM PAY.                           

     (a) In General.--Section 5(b)(4) of the Act of February 13, 1911 (19 
  U.S.C. 267(b)(4)), is amended by adding at the end the following new    
  sentences: ``Premium pay provided under this subsection shall not be    
  paid to any customs officer unless such officer actually performed work 
  during the time corresponding to such premium pay. The preceding        
  sentence shall not apply with respect to the payment of an award or     
  settlement to a customs officer who was unable to perform work during   
  the time described in the preceding sentence as a result of a personnel 
  action in violation of section 5596 of title 5, United States Code,     
  section 6(d) of the Fair Labor Standards Act of 1938, or title VII of   
  the Civil Rights Act of 1964.''.                                        
     (b) Corrections Relating to Night Work Differential Pay.--Section    
  5(b)(1) of such Act (19 U.S.C. 267(b)(1)) is amended to read as follows:
    ``(1)  Night work differential.--                                      

       ``(A) 5 p.m. to midnight.--(i) If any hours of regularly scheduled  
   work of a customs officer occur during the hours of 5 p.m. and 12 a.m., 
   the officer is entitled to pay for such hours of work (except for work  
   to which paragraph (2) or (3) applies) at the officer's hourly rate of  
   basic pay plus premium pay amounting to not less than 18 percent of that
   basic rate.                                                             
       ``(ii) If the regularly scheduled work of a customs officer is 4    
   p.m. to 12:00 a.m., the officer is entitled to pay for work during such 
   period (except for work to which paragraph (2) or (3) applies) at the   
   officer's hourly rate of basic pay plus premium pay amounting to not    
   less than 18 percent of that basic rate.                                
       ``(B) Midnight to 6 a.m.--(i) If any hours of regularly scheduled   
   work of a customs officer occur during the hours of 12 a.m. and 6 a.m., 
   the officer is entitled to pay for such hours of work (except for work  
   to which paragraph (2) or (3) applies) at the officer's hourly rate of  
   basic pay plus premium pay amounting to 25 percent of that basic rate.  
       ``(ii) If the regularly scheduled work of a customs officer is 12   
   a.m. to 8:00 a.m., the officer is entitled to pay for work during such  
   period (except for work to which paragraph (2) or (3) applies) at the   
   officer's hourly rate of basic pay plus premium pay amounting to 25     
   percent of that basic rate.''.                                          
          SEC. 124. USE OF SAVINGS FROM PAYMENT OF PREMIUM PAY.                   

   Section 5 of the Act of February 13, 1911 (19 U.S.C. 267), is amended--

    (1) by redesignating subsection (e) as subsection (f); and             

    (2) by inserting after subsection (d) the following:                   

   ``(e)  Use of Savings From Payment of Premium Pay.--                   

       ``(1) Use of amounts.--For fiscal year 2002, the Secretary of the   
   Treasury--                                                              
       ``(A) shall determine under paragraph (2) the amount of savings from
   the payment of premium pay to customs officers; and                     
       ``(B) shall use an amount from the Customs User Fee Account equal to
   such amount determined under paragraph (2) for additional premium pay   
   described in clauses (i) and (ii) of subsection (b)(1)(A).              
       ``(2) Determination of savings amount.--The Secretary shall         
   calculate an amount equal to the difference between--                   
       ``(A) the estimated cost for premium pay that would have been       
   incurred during fiscal year 2002 if this section, as in effect on the   
   day before the date of the enactment of section 123 of the Customs      
   Border Security Act of 2001, had governed such costs; and               
       ``(B) the actual cost for premium pay that is incurred during fiscal
   year 2002 under this section, as amended by section 123 of the Customs  
   Border Security Act of 2001.''.                                         
          SEC. 125. EFFECTIVE DATE.                                               

     This chapter, and the amendments made by this chapter, shall apply   
  with respect to pay periods beginning on or after 15 days after the date
  of the enactment of this Act.                                           
                             CHAPTER 2--MISCELLANEOUS PROVISIONS                  

                    SEC. 131. 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   
  101 of this Act, $25,000,000 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. 132. 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. 133. 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--                        

       (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. 134. 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. 135. 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.             
          SEC. 136. 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.                  

           Subtitle D--Antiterrorism Provisions                                    

          SEC. 141. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN GOOD FAITH.  

     (a) Immunity.--Section 3061 of the Revised Statutes of the United    
  States (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. 142. 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--    

       (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. 143. 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) In addition to any other requirement under this section, for   
  each 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 cargo  
  manifest information in advance of such entry or clearance 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.''.                                      
       (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)''.                                               
     (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 MANIFEST 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 manifest 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),   
  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, as   
   applicable;                                                             
    ``(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) 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. 144. 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 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.).                           
       ``(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. 145. 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.                                               

           Subtitle E--Textile Transshipment Provisions                            

                    SEC. 151. 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 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. 152. 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 AE1 
   office in Central America to address trade enforcement issues for that  
   region.                                                                 
       (B) 2 permanent positions to be assigned to the Customs attache AE1 
   office in South Africa to address trade enforcement issues pursuant to  
   the African Growth and Opportunity Act (title I of Public Law 106 200). 
       (C) 4 permanent positions to be assigned to the Customs attache AE1 
   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 AE1 
   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 AE1 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 AE1 
   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. 153. 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 101(b)(1) of this 
  Act, $1,317,000 shall be available until expended for the Customs       
  Service to provide technical assistance to help sub-Saharan 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 sub-Saharan 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.                    
       (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.                                          
           TITLE II--OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE              

          SEC. 201. 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.''; and                         

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

    ``(ii) $31,000,000 for fiscal year 2003.''; 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.                                        
           TITLE III--UNITED STATES INTERNATIONAL TRADE COMMISSION                 

          SEC. 301. 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:                                  

    ``(i) $51,400,000 for fiscal year 2002.''; and                         

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

    ``(ii) $53,400,000 for fiscal year 2003.''.                            

     (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.''.             
           TITLE IV--OTHER TRADE PROVISIONS                                        

                    SEC. 401. 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. 402. 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.''.                   

                                       I. INTRODUCTION                            

                                   A. PURPOSE AND SUMMARY                         

      H.R. 3129, as amended, would authorize appropriations for fiscal year
   FY 2002 and FY 2003 for the U.S. Customs Service, including specific    
   authorization for anti-terrorism, drug interdiction and the prevention  
   of child pornography. The bill would also provide more funding to       
   textile transshipment efforts and assistance to African countries for   
   implementation of the African Growth and Opportunities Act. The bill    
   would further dedicate resources to reestablish the New York Customs    
   offices formerly at the World Trade Center, which were destroyed in the 
   terrorist attack of September 11th, and it would provide more resources 
   to the Northern Border. H.R. 3129 would also authorize full funding for 
   the Customs Automated Commercial Environment. H.R. 3129 would also      
   authorize appropriations for the Office of the United States Trade      
   Representative (USTR) and the International Trade Commission (ITC).     
      H.R. 3129, as amended, would make corrections to the overtime and    
   premium pay for Customs inspectors and increase the premium pay for     
   inspectors working night-time hours. It would also relax the manner in  
   which the fiscal-year $30,000 cap for overtime pay is calculated by     
   removing premium pay from the cap. The bill would alter the hours in    
   which night-time premium pay would be available while using the savings 
   to increase night-time premium pay for inspectors actually working at   
   night.                                                                  
      H.R. 3129, as amended, would also give the U.S. Customs Service      
   authority to fight against terrorism and drug smugglers through several 
   new tools. Customs inspectors would be immune from civil suits as a     
   result of personal searches at the border if they act in good faith.    
   Customs Service would have the authority to search outbound mail so long
   as privacy and Fourth Amendment protections are observed. The Treasury  
   Department would also be required to build a system through the         
   regulatory process to handle the collection of advanced information for 
   inbound cargo, as well as inbound and outbound passengers, from carriers
   for the purpose of targeting both terrorist activity and smuggling.     
      H.R. 3129, as amended, would also authorize several studies and      
   reports on Customs' operations including a report on the personnel      
   practices of the Customs Service, on the accounting and auditing        
   procedures of Customs, on the monitoring and enforcement of textile     
   transshipment, on Customs' anticipated improvements to stop delays in   
   issuing prospective rulings, and on determining the proper level of fees
   charged by Customs on importers. The first two reports would be issued  
   by Customs, and the last three would be issued by the General Accounting
   Office. The bill would also change Customs' audit process by requiring  
   that overpayments found during an audit be used as offsets for any      
   underpayments also found, permit emergency adjustments to Customs       
   offices and staff during emergencies, and permanently raise the duty    
   exemption on U.S. residents returning from abroad from the current $400 
   to $800.                                                                
                                       B. BACKGROUND                              

                    1. Authorization of Appropriations                   

      The Committee on Ways and Means has adopted a two-year authorization 
   process to provide Customs, USTR, and the ITC with guidance as they plan
   their budgets, as well as guidance from the Committee for the           
   appropriations process. In preparing H.R. 3129, the Committee considered
   the President's budget for FY 2002. Although each agency submitted its  
   FY 2002 budget request, the Committee has relied upon anticipated cost  
   inflation from the Congressional Budget Office as a guide for FY 2003.  
   The statutory basis for the authorizations of appropriations is as      
   follows: for Customs, section 301(b) of the Customs Procedural Reform   
   and Simplification Act of 1978 (19 U.S.C. 2075(b)); for USTR, section   
   141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)); and for the  
   ITC, section 330(e)(2)(A) of the Tariff Act of 1930 (19 U.S.C.          
   1330(e)(2)(A)).                                                         
                    2. customs cyber-smuggling center                    

      Customs enforces laws against international trafficking of child     
   pornography the laws at its Cyber-smuggling Center. This legislation is 
   needed for additional funding for Customs to expand its efforts in      
   preventing on-line child pornography.                                   
                          3. Customs Automation                          

      Customs' current automation system, the Automated Commercial System  
   (ACS), is an aging 17-year-old system which has experienced several     
   ``brownouts.'' In addition, under the Customs Modernization Act (Mod    
   Act) that was part of the North American Free Trade Agreements Act      
   (title VI), Customs is required to provide increased electronic         
   processing for entries, informed compliance, and record keeping, but ACS
   does not have the capacity to meet these modernization requirements.    
   Customs plans to replace ACS with the Automated Commercial Environment  
   (ACE).                                                                  
                       4. Customs Personnel Issues                       

      The Act of February 13, 1911, as amended, known as the ``1911 Act,'' 
   created the original overtime pay system for Customs inspectors. The Act
   authorized Customs to compensate officers at a rate of two days of basic
   hourly pay for Sundays, and a rate of two days of basic hourly pay plus 
   the basic hourly rate for holidays. Minimum compensation for nighttime  
   pay--5 p.m to 8 a.m.--was 4 to 12 hours of pay. Section 13811 of the    
   Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1993, known as
   the Customs Officer Pay Reform Amendments (COPRA), amended the 1911 Act 
   with regard to the overtime and premium pay system for Customs          
   inspectors and canine enforcement officers, effective January 1, 1994.  
   Only inspectors and canine officers are covered by the reforms, and only
   when performing inspections. Clerical and support staff are no longer   
   eligible for double time and are covered--as are most other Federal     
   employees--under the Federal Employees Pay Act (FEPA), at 1\1/2\ regular
   pay. The COBRA of 1993 also amended overtime compensation paid to       
   Customs officers as part of the basic pay for the Civil Service         
   Retirement System. Compensation may not exceed 50 percent of the        
   statutory maximum in overtime pay for Customs officers (i.e., $15,000,  
   that is, 50 percent of $30,000). Due to a number of arbitration rulings,
   Customs has been required to pay both overtime and premium pay to       
   Customs officers for work not performed. Further, the changes Congress  
   made to the night pay system for Customs in 1993 have resulted in an    
   unforeseen                                                              

                    circumstance where Customs officers can receive night pay for 
          working at 12:00 noon in certain instances. The Treasury Inspector      
          General has called for a legislative change to correct the night pay    
          system.                                                                 
      Customs was subject to a partnership agreements with its union that  
   prevent it from permanently reassigning Customs officers without the    
   affected employees' consent. Customs' ability to temporarily reassign   
   officers without officers' consent was also limited under the           
   partnership agreement with the union. Concerns were raised that the     
   requirement that Customs officers and inspectors agree to such rotations
   may affect Customs drug interdiction efforts and the integrity of the   
   border workforce. In addition, there have been a number of incidents in 
   which implementation of certain inspection procedures were delayed      
   because of union objections to the procedures. While these particular   
   incidents have been resolved, there have been questions raised as to    
   whether drug interdiction efforts were compromised.                     
                                   C. LEGISLATIVE HISTORY                         

      The Subcommittee on Trade of the Committee on Ways and Means held a  
   public hearing on July 17, 2001, on Customs, USTR, and the ITC budget   
   authorizations for FY 2002 and 2003 as well as other Customs issues,    
   including compensation for Customs officers, funding for Customs        
   Automated Commercial Environment (ACE) and the International Trade Data 
   System (ITDS), and labor/management issues. Acting Customs Commissioner 
   Winwood, Mr. Dennis Schindel of the Treasury Inspector General's office,
   Ms. Laurie Ekstrand of the U.S. General Accounting Office (GAO), and    
   representatives of the various sectors of the trade industry testified. 
   Acting Commissioner Winwood stressed the need for ACE and detailed steps
   Customs has taken to improve ACE project management.                    
      Ms. Ekstrand acknowledged that Customs has begun to implement the    
   recommendations made in the GAO report. Representatives of the trade    
   industry were unified in their opinion that ACE is desperately needed   
   and that Customs could effectively manage a project the size of ACE. On 
   Customs labor issues, testimony was received from Mr. Dennis S.         
   Schindel, Deputy Inspector General for Audit, Office of the Inspector   
   General, and from Ms. Colleen Kelley, President of the National Treasury
   Employees Union (NTEU). In his testimony, Mr. Schindel stated that      
   although the Customs Officers Pay Reform Act (COPRA) was intended to    
   reduce Customs overtime costs for inspectional services, COPRA instead  
   has resulted in an increase in Customs premium pay costs. Ms. Ekstrand  
   also commented on a recent GAO study indicating that Customs took far   
   took far too long in issuing prospective rulings.\1\                    
                                                                           

   \1\Prospective rulings are issued by Customs at the request of importers
   seeking guidance on various matters such as the classification or the   
   valuation of certain goods.                                             
      On October 16, 2001, Mr. Crane introduced H.R. 3129, and the         
   Committee held a markup of the bill on October 31, 2001. Four amendments
   were offered at the markup: Mr. Stark on behalf of Mr. Rangel offered an
   amendment to strike sections 123 and 124 of H.R. 3129, the effect of    
   which would maintain the current night differential pay rate schedule   
   for Customs officers. Mr. Stark's amendment was defeated by a recorded  
   vote of 13 ayes to 20 nays. Mr. Becerra offered and withdrew a          
   non-germane amendment to give Customs inspectors law enforcement status.
   Mr. McDermott offered an amendment to strike section 141, the effect of 
   which would be to deny the provision's civil lawsuit immunity to Customs
   inspectors. Mr. McDermott's amendment was defeated by voice vote.       
   Chairman Thomas offered an amendment in the nature of a substitute that 
   passed the Committee by 20 ayes to 14 nays. The Committee then ordered  
   the bill favorably reported, as amended, by voice vote. The Committee   
   then moved that the Chairman have the authority to offer such motions as
   may be necessary to go to conference, and the motion passed by roll call
   vote 2 present, 19 ayes, and 1 nay. Eight Members passed on this vote.  
                                 II. EXPLANATION OF THE BILL                      

                           TITLE I--UNITED STATES CUSTOMS SERVICE                 

            SUBTITLE A--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL   
                                   OPERATIONS                                     
                      Sec. 101. Authorization of appropriations for noncommercial  
           operations, commercial operations, and air and marine interdiction      
            Present law                                                             

      The statutory basis for authorization of appropriations for Customs  
   is section 301(b)(1) of the Customs Procedural and Simplification Act of
   1978 (19 U.S.C. 2075(b)). That law, as amended by section 8102 of the   
   Omnibus Budget Reconciliation Act of 1986 [P.L. 99 509], first outlined 
   separate amounts for non-commercial and commercial operations for the   
   salaries and expenses portion of the Customs authorization. Under 19    
   U.S.C. 2075, Congress has adopted a two-year authorization process to   
   provide Customs with guidance as it plans its budget, as well as        
   guidance from the Committee for the appropriation process.              
      The most recent authorization of appropriations for Customs (under   
   section 101 of the Customs and Trade Act of 1990 [P.L. 101 382])        
   provided $118,238,000 for salaries and expenses and $143,047,000 for air
   and marine interdiction program for FY 1991, and $1,247,884,000 for     
   salaries and expenses and $150,199,000 for air and marine interdiction  
   program in FY 1992.                                                     
            Explanation of the provision                                            

      This provision authorizes $1,006,501,000 for FY 2002 and             
   $1,032,567,000 for FY 2003 for noncommercial operations of the Customs  
   Service. It also authorizes $1,378,725,000 for FY 2002 and              
   $1,414,432,000 for FY 2003 for commercial operations of the Customs     
   Service. Of the amounts authorized for commercial operations,           
   $308,000,000 is authorized for the automated commercial environment     
   computer system for each fiscal year. The provisions require that the   
   Customs Service provide the Committee on Ways and Means and the         
   Committee on Finance of the Senate with a report demonstrating that the 
   computer system is being built in a cost-effective manner. In addition, 
   the provisions authorizes $183,853,000 for FY 2002 and $188,615,000 for 
   FY 2003 for air and marine interdiction operations of the Customs       
   Service. The provision requires submission of out-of-year budget        
   projections to the Ways and Means and Finance                           

          Committees.                                                             

            Reason for change                                                       

      The Committee notes that this non-commercial versus commercial split 
   supplied by Customs does not provide meaningful information. The        
   information is not the result of the collection of cost data on a       
   continual basis. Rather Customs apportions its budget through this      
   artificial division based upon an ad hoc survey performed years ago and 
   that is no longer available. The survey estimated that a certain        
   percentage of Customs' activities were commercial-related, and the rest 
   non-commercial, and based upon that conclusion, Customs merely takes its
   overall budget and multiplies it by that static percentage to arrive at 
   its estimation from year to year. Obviously, this methodology is        
   woefully inadequate since actual costs for various functions change from
   year to year. The methodology, if it was ever accurate, is now at best a
   rule of thumb. For this reason, the Committee has addressed this problem
   in Sections 134 and 136 of the bill.                                    
      Regarding noncommercial spending, the Committee is committed to      
   giving Customs the resources needed to increase the overall level of    
   Customs officers and Special Agents dedicated to countering terrorism,  
   narcotics, and money laundering activities. Accordingly, the            
   authorization for non-commercial operations for both fiscal years 2002  
   and 2003 is substantially larger than the President's request, providing
   Customs with the resources to stop terrorists and drugs from entering   
   this country while at the same time expediting the entry of legitimate  
   persons and cargo. The Committee notes that during this time of         
   emergency, a reevaluation of Customs needs by the Administration, along 
   with the needs of all anti-terrorist agencies, has only just begun. The 
   Committee looks forward to the Administration's stock-taking and commits
   to review any updated requests from the Administration.                 
      Regarding commercial spending, the Committee recognizes Customs'     
   efforts to modernize its operations to meet both its enforcement and    
   trade facilitation missions. Customs plans to spend over $1 billion over
   the next few years to modernize its automation systems. The current     
   Customs import processing system, the Automated Commercial System (ACS),
   is 17 years old. Over time, ACS became unable to handle the increased   
   computing requirements brought on by trade growth and started to        
   experience service failures called brownouts. These brownouts caused    
   import delays and increased manual processing. Recent ACS funding has   
   enabled Customs to fix critical links and grow the system to keep up    
   with the workload, thereby eliminating brownouts for now. With continued
   funding, Customs expects ACS to remain functional until the maximum     
   capabilities of the system and application software are reached.        
   However, of continued concern is the explosive growth in trade volume   
   and its impact on ACS. In the last decade, trade has grown 132 percent, 
   and by 2004, Customs will be processing more than 30 million commercial 
   entries a year. This is up from 12.3 million in 1994--more than double  
   the level of ten years earlier.                                         
      Many observers, including Customs, have said that ACS is headed for a
   major system crash which will certainly have an adverse impact on trade.
   They also believe that any serious failure of ACS could have widespread 
   economic effect on U.S. businesses all along the supply chain including 
   manufacturers, suppliers, brokers, and retailers. Between August 1998,  
   and March 2001, ACS experienced a number of significant slow downs in   
   processing ``brownouts,'' which in turn adversely affected the ability  
   of the trade community to process entries quickly and efficiently.      
   Although Customs continues to make costly investments to ACS to         
   alleviate this problem on a short-term basis, Customs and the trade     
   community expect a recurrence of these problems, including possible     
   shutdowns of ACS.                                                       
      Customs plans to replace ACS with the Automated Commercial           
   Environment (ACE) and has spent approximately $65 million on ACE        
   development to date. Some of the main differences between ACS and ACE   
   are that ACE reportedly will use a single integrated system, modern     
   standards, processes, techniques and language, and will be compatible   
   with commercial software. By contrast, ACS does not have an integrated  
   system, uses outdated techniques and languages, and cannot use          
   commercially compatible software. The Committee agrees with Customs and 
   the trade community that ACE is needed to cope with the increased growth
   of trade, and equally importantly, to meet the legislative requirements 
   for Customs automation modernization mandated under the Customs         
   Modernization Act. Therefore, in its authorization for commercial       
   operations for both FY 2002 and FY 2003, the Committee has included     
   funding to provide the Customs Service with the crucial resources it    
   needs to continue developing ACE. However, the Committee underscores the
   need to ensure that Customs manage and develop ACE cost effectively,    
   while meeting the legislative automation modernization mandate of the   
   Mod Act.                                                                
      The Miscellaneous Trade and Technical Corrections Act of 1999, P.L.  
   106 36, Section 2405 mandated that ``not later than January 1, 2000, the
   Secretary shall provide for the inclusion of commercial importation data
   from foreign-trade zones under the National Customs Automation          
   Program.'' The deadline has now passed and the Committee is concerned   
   that the Customs Service has made no progress on this FTZ automation    
   plan. In light of the current development of the Automated Commercial   
   Environment (ACE) by the Customs Service, the Committee directs the     
   Customs Service to incorporate the Foreign-Trade Zone automation process
   in the first phase of ACE.                                              
                      Sec. 102. Antiterrorist and illicit narcotics detection      
           equipment for the United States-Mexico border, United States-Canada     
           border, and Florida and the Gulf Coast seaports                         
            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would require that $90,244,000 of the FY 2002         
   appropriations be available until expended for acquisition and other    
   expenses associated with implementation and deployment of terrorist and 
   narcotics detection equipment along the United States-Mexico border, the
   United States-Canada border, and Florida and the Gulf seaports. The     
   equipment would include vehicle and inspection systems. The provision   
   would require that $9,000,000 of                                        

                    the FY 2003 appropriations be used for maintenance of         
          equipment described above. This section would also provide the          
          Commissioner of Customs with flexibility in using these funds and would 
          allow for the acquisition of new updated technology not anticipated when
          this bill was drafted. Nothing in the language of the bill is intended  
          to prevent the Commissioner of Customs from dedicating resources to     
          specific ports not identified in the bill.                              
      The equipment would include vehicle and container inspection systems,
   mobile truck x-rays, upgrades to fixed-site truck x-rays, pallet x-rays,
   busters, contraband detection kits, ultrasonic container inspection     
   units, automated targeting systems, rapid tire deflator systems,        
   portable Treasury Enforcement Communications Systems terminals, remote  
   surveillance camera systems, weigh-in-motion sensors, vehicle counters, 
   spotter camera systems, inbound commercial truck transponders, narcotics
   vapor and particle detectors, and license plate reader automatic        
   targeting software.                                                     
            Reason for change                                                       

      The Committee recognizes the needs of the Customs Service to         
   effectively interdict terrorists and drugs entering the United States.  
   The Committee is concerned that Customs currently lacks sufficient      
   equipment along the Canada, Mexico, and Gulf borders to effectively     
   carry out this mission while at the same time ensuring that trade flows 
   in a timely manner. The list of equipment is based on the needs Customs 
   has articulated to the Committee both before and after the September    
   11th terrorist attacks. The Committee expects that Customs will continue
   to allocate resources to additional ports as it deems appropriate.      
           Sec. 103. Compliance with performance plan requirements                 

            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would require Customs to measure specifically the     
   effectiveness of the resources dedicated in sections 102 and 103 as part
   of its annual performance plan.                                         
            Reason for change                                                       

      The Committee believes Customs must be accountable to the taxpayer in
   assessing and measuring the effectiveness of its limited resources. This
   provision ensures that Customs evaluates how it used these additional   
   resources to achieve the goals of Congress.                             
               SUBTITLE B--CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE    

                      Sec. 111. Authorization of appropriations for program to     
           prevent child pornography/child sexual exploitation                     
            Present law                                                             

      Customs enforcement responsibilities include enforcement of U.S. laws
   to prevent border trafficking relating to child pornography,            
   intellectual property rights violations, money laundering, and illegal  
   arms. Funding for these activities has been included in the Customs     
   general account.                                                        
            Explanation of provision                                                

      Section 111 of H.R. 3129, as amended, would authorize $10 million for
   Customs to carry out its program to combat on-line child sex predators. 
   Of that amount, $375,000 would be dedicated to the National Center for  
   Missing Children for the operation of its child pornography cyber       
   tipline.                                                                
            Reason for change                                                       

      With about 12 million children using the Internet unsupervised by    
   their parents, the Internet has provided fertile ground for sexual      
   predators to lure children into exploitive and abusive relationships and
   to trade in child pornography. This legislation would provide Customs   
   with resources for the tools, technology, and manpower it needs in its  
   efforts to prevent child pornography and sexual exploitation. The       
   Committee expects that these efforts will include out-reach programs to 
   educate parents, children, and teachers. The Committee applauds Customs 
   for establishing the Cyber-smuggling Center and fully supports Customs  
   in its efforts to protect children from on-line predators.              
                              SUBTITLE C--PERSONNEL PROVISIONS                    

  Chapter 1--Overtime And Premium Pay of Officers of the Customs Service 

           Sec. 121. Correction relating to fiscal year cap                        

            Present law                                                             

      Section 5(c)(1) of the Act of February 13, 1911 (19 U.S.C. 267(c)(1))
   states that the aggregate amount of a Customs officer's overtime pay,   
   including commuting compensation and premium pay, is $30,000.\2\        
    A Customs officer who receives overtime or premium pay (holidays and   
   night work) for time worked is prohibited from receiving compensation   
   for that work under any other provision of law. The Commissioner may    
   grant waivers to prevent excessive costs or to meet emergency           
   requirements of the Customs Service. Section 5(a)(1) of the Act of      
   February 13, 1911 (19 U.S.C. 267(a)(1)) outlines the general overtime   
   pay system for Customs officers. Basic overtime compensation for work   
   not regularly scheduled is provided as follows: (a) Work in excess of 8 
   hours per day or 40 hours per week at twice the basic hourly rate of    
   basic pay; (b) ``Callback'' pay at twice the basic hourly rate. An      
   officer will receive at least two hours of callback pay for any call    
   back of two hours of work or less, if the work begins at least one hour 
   after the end of any previously scheduled work and ends at least one    
   hour before the beginning of regularly scheduled work; and (c)          
   Compensation for the commute, in addition to callback time, at three    
   times the basic hourly rate; compensation for the commute is not payable
   if the work does not begin within 16 hours of the Customs officer's last
   regularly scheduled work assignment, or if the work begins within two   
   hours of the officer's next regularly scheduled work assignment.        
   \2\The fiscal year cap has been increased annually since October 1,     
   1997, from $25,000 to $30,000 (most recently by the FY 01 Treasury      
   Appropriations Act) over the objections of the Committee on Ways and    
   Means because it did not address overtime and premium pay reforms.      

            Explanation of provision                                                

      Section 121 of H.R. 3129, as amended, would amend section 5(c)(1) of 
   the Act of February 13, 1911 (19 U.S.C. 267(c)(1)) to remove premium pay
   from the calculation of the $30,000 fiscal-year cap, thus increasing the
   amount of overtime pay a Customs officer may receive, with no annual    
   limit on the amount of premium pay. The provision would also allow the  
   Commissioner the authority to waive the $30,000 fiscal-year cap to      
   prevent excessive costs or to meet emergencies, and to pay a Customs    
   officer for one work assignment that would result in the overtime pay of
   that officer exceeding the $30,000 fiscal-year cap. This authority would
   be granted only upon certification to the Chairmen of the House         
   Committee on Ways and Means, and the Senate Committee on Finance that   
   Customs has in operation a system that provides accurate and reliable   
   data on a daily basis on overtime and premium pay being paid to Customs 
   officers.                                                               
            Reason for change                                                       

      Administration of the fiscal-year cap has posed a considerable       
   challenge for Customs. Eliminating premium pay from the calculation of  
   the fiscal-year cap will facilitate Customs administration, as fewer    
   Customs officers will approach the level of the cap by working overtime 
   alone. Moreover, allowing each officer an unrestricted amount of premium
   pay and applying the cap only to overtime pay will increase the earnings
   of Customs inspectors. If an officer reaches the fiscal-year cap, the   
   provision would allow the Commissioner to pay that officer for one      
   additional work assignment that would result in the overtime pay of the 
   officer exceeding the cap. Thereafter, no additional overtime would be  
   assigned to that officer, except to meet emergency requirements of the  
   Customs Service. Under the National Inspectional Assignment Policy      
   (NIAP) and contracts negotiated with the National Treasury Employees    
   Union (NTEU), Customs has agreed to assign overtime to Customs officers 
   based on daily tracking of each officer's overtime- and premium-pay     
   earnings. Section 121 also requires that authority to exceed the cap by 
   one assignment will be granted to the Commissioner only upon            
   certification to the Chairmen of the House Committee on Ways and Means  
   and the Senate Committee on Finance that Customs has in operation a     
   system that provides accurate and reliable data on a daily basis on     
   overtime and premium pay that is being paid to each Customs officer.    
      Customs' officials estimate that based upon pre-emergency staffing   
   requirements, there have been several hundred inspectors who reached the
   cap and who would thus benefit from an increase in the cap. Based upon  
   post-emergency staffing requirements from the heightened alert, that    
   estimate is now conservatively over 1,000 inspectors who would benefit  
   from raising the cap. Taking premium pay out of the cap would allow some
   inspectors to earn as much as $5,000 more than currently allowed.       
           Sec. 122. Correction relating to overtime pay                           

            Present law                                                             

      On October 30, 1997, an arbitration ruling required the Customs      
   Service to pay overtime to a Customs officer for work not performed if  
   that officer was not permitted to work that time due to an              
   administrative error. An earlier arbitration ruling required Customs to 
   pay overtime to a Customs officer for work not performed if Customs had 
   prevented that officer from working right up to the fiscal year salary  
   cap, a practice Customs has in place to prevent an Anti-Deficiency Act  
   violation.                                                              
            Explanation of provision                                                

      Section 122 of H.R. 1833, as amended, would prevent Customs from     
   paying overtime pay to Customs officers for work not actually performed.
   However, this provision would not apply to payment of an award or       
   settlement under section 5596 of title 5, United States Code, section   
   6(d) of the Fair Labor Standards Act, or title VII of the Civil Rights  
   Act of 1964.                                                            
            Reason for change                                                       

      The Committee is concerned that three arbitral decisions require     
   Customs to pay overtime for work not performed. Specifically, as a      
   result of a decision by a labor arbitrator in August 1982, Customs is   
   required to pay overtime plus interest for hours not actually worked to 
   officers denied overtime assignments because they have reached the level
   set by the port directors. The amount paid by Customs pursuant to the   
   arbitral decision equals the difference between the fiscal-year cap and 
   the level which the officer had reached at the time the port director   
   stopped assigning additional overtime to that officer. As a result of a 
   decision by a labor arbitrator in November 1993, Customs is required to 
   pay for overtime not actually worked to officers whose overtime is      
   inappropriately assigned to part-time employees. In yet another decision
   by a labor arbitrator in October 1997, Customs is now required to pay   
   overtime to Customs officers for work not performed when the officer was
   not assigned an overtime assignment due to an inadvertent administrative
   error.                                                                  
      The current practice of paying overtime for work not performed       
   replaces the practice of providing the next comparable overtime         
   assignment to the officer who was inadvertently skipped over. In        
   addition, in testimony before the Subcommittee on Trade in May 1998, the
   General Accounting Office (GAO) stated: ``Although we believed that     
   inspectors should be paid extra for working overtime, we recommend that 
   (1) the 1911 Act be amended so that inspector overtime would be more    
   directly linked to actual hours worked, and (2) Customs management focus
   on achieving a more efficient use of overtime.'' U.S. Customs Service:  
   Oversight Issues, GAO/T GGD 97 107 (May 15, 1997). The provision would  
   clarify Congressional intent with regard to                             

                    overtime for Customs officers by preventing Customs from      
          paying overtime to officers for hours not actually worked. Customs would
          achieve savings by prohibiting these payments which it has been required
          to make since the 1982 arbitral decision.                               
      It is the view of the Committee that Customs would achieve           
   considerable savings in prohibiting these payments, and these resources 
   would be better utilized by Customs in other areas. More importantly,   
   the change in law will correct an inequitable and unintended consequence
   of the present law as interpreted by arbitration panels. The Committee  
   does not expect that this requirement will have a significant impact on 
   Customs' management of overtime or on Customs officers' ability to earn 
   overtime pay.                                                           
      Customs has taken steps to alleviate this problem by recently        
   implementing the Customs Overtime and Scheduling System (COSS), which   
   currently tracks and monitors all scheduling, assignment of regular     
   hours, overtime, and premium hours for Customs officers. Under this     
   tracking system, Customs will be better able to monitor overtime and    
   premium hours to prevent situations that gave rise to officers receiving
   overtime and premium pay for no work. However, the Committee believes   
   that this legislation is necessary to clarify that the appropriate      
   policy is to provide an additional assignment instead of overtime.      
   Finally, this reform is not intended to prevent awards or settlements   
   under the provisions of laws cited in this section.                     
           Sec. 123. Correction relating to premium pay                            

            Present law                                                             

      Section 123(a). An arbitration ruling requires Customs to pay        
   officers for regularly scheduled premium pay hours even if the officer  
   subsequently takes sick or annual leave and does not actually work those
   hours. The Omnibus Consolidated and Emergency Supplemental              
   Appropriations for FY 1999 (P.L. 105 277), permanently restricts Customs
   from paying premium pay on Sundays to an employee if the employee has   
   not actually performed work on a Sunday.                                
      Sec. 123(b). Section 5(b)(1) of the Act of February 13, 1911 (19     
   U.S.C. 267(b)(1)) provides that if an officer works: (1) the majority of
   his or her hours between 3 p.m. and midnight, compensation equals the   
   basic hourly rate plus 15 percent of the basic hourly rate for the      
   entire eight-hour shift; (2) the majority of his or her hours between 11
   p.m. and 8 a.m., compensation equals the basic hourly rate plus 20      
   percent for the entire eight hour shift; and (3) if the officer's       
   regularly scheduled work assignment falls between 7:30 p.m. and 3:30    
   a.m., compensation equals the basic hourly rate plus 15 percent for the 
   period from 7:30 p.m. to 11:30 p.m., and the basic hourly rate plus 20  
   percent for the period from 11:30 p.m. to 3:30 a.m.                     
      For example, if a Customs officer is scheduled to work a shift that  
   starts at 12:00 noon and ends at 8 p.m., five of the eight hours of that
   shift, or the majority of hours, occur during the 3 p.m. to 11 p.m.     
   night premium pay hours. Thus, the Customs officer is paid night pay (an
   additional 15 percent) for all eight hours of the shift that starts at  
   noon.                                                                   
            Explanation of the provision                                            

      Sec. 123(a). This provision would prohibit Customs from paying       
   premium holiday pay to an employee if the employee has not actually     
   performed work during the time corresponding to such premium pay by     
   amending section 5(b)(4) of the Act of February 13, 1911 (19 U.S.C.     
   267(b)(4)). However, this provision would not apply to payment of an    
   award or settlement under section 5596 of title 5, United States Code,  
   section 6(d) of the Fair Labor Standards Act, or title VII of the Civil 
   rights Act of 1964. As with the restriction on payment of overtime pay  
   outlined in section 122, this provision would clarify Congressional     
   intent with regard to premium pay for Customs officers by preventing    
   Customs from paying premium pay to officers for hours not actually      
   worked.                                                                 
      Sec. 123(b). This provision would amend section 5(b)(1) of the Act of
   February 13, 1911 (19 U.S.C. 267(b)(1)) to provide that a Customs       
   officer is paid premium night shift (``shift differential'') pay only   
   for shift differential hours worked. This provision also changes the    
   actual hours eligible for night time pay to between 5 p.m. and 6 a.m.,  
   except that for a regularly scheduled shift between 4 p.m. and midnight 
   or midnight and 8 a.m., the entire shift would be eligible for night pay
   shift differential.                                                     
      Under this legislation, if any hour of an officer's regularly        
   scheduled work hours occur between 5 p.m. and midnight, compensation    
   would equal the basic hourly rate plus at least 18 percent for those    
   hours only. If any work hours occur between midnight and 6 a.m.,        
   compensation would equal the basic hourly rate plus 25 percent for those
   hours only. The bill also would allow for a Customs officer regularly   
   scheduled to work the shift from 4 p.m. and midnight to be paid at a    
   premium rate of at least 18 percent over his or her base salary for the 
   entire shift. The bill also would allow for a Customs officer regularly 
   scheduled to work the shift from midnight to 8 a.m. to be paid at a     
   premium rate of 25 percent over his or her base salary for the entire   
   shift. For example, a Customs officer working from noon to 8 p.m. would 
   earn night differential pay only between the hours of 5 p.m. and 8 p.m, 
   but would receive at least an 18 percent differential instead of the    
   current 15 percent.                                                     
            Reason for change                                                       

      Section 123(a). The Committee is greatly concerned that an arbitral  
   decision requires Customs to pay premium pay for hours not actually     
   worked. Specifically, due to the decision by a labor arbitrator in      
   September 1996, Customs is required to pay premium pay to officers for  
   regularly-scheduled premium pay hours even if the officer subsequently  
   fails to work those hours due to annual leave, sick leave, or National  
   Guard duty leave. Similar to the reform on payment of overtime pay      
   outlined in section 122, this provision would clarify Congressional     
   intent with regard to premium pay for Customs officers by preventing    
   Customs from paying premium pay to officers for hours not actually      
   worked. Finally, this reform is not intended to prevent awards or       
   settlements under the provisions of laws cited in this section.         
      Section 123(b). The Customs Officer Pay Reform Amendments, which was 
   part of the Omnibus Budget Reconciliation Act of 1993 (P.L. 103 66),    
   greatly increased the number of available hours in which a Customs      
   Officer can earn premium pay for night work. COPRA also increased the 10
   percent night differential compensation to 15 percent and 20 percent,   
   depending                                                               

                    on the time of day that the assignment is worked. Among       
          Federal employees, only Customs officers are compensated at a premium   
          pay rate of 15 percent or 20 percent of basic hourly pay for night work.
          In fact, COPRA allows Customs to pay night differential premium payments
          for 23 hours of the day (12 p.m. to 11 a.m.), rather than 12 hours of   
          the day (6 p.m. to 6 a.m.) as was previously the case under FEPA.       
          Premium pay for night work by most other Federal employees is provided  
          at a rate of 10 percent for the hours from 6 p.m. to 6 a.m. and is      
          available only for those hours worked during that period, not the entire
          shift.                                                                  
      At the Subcommittee's legislative hearing on April 13, 1999, Mr.     
   Schindel testified that ``premium pay expenses for Customs, specifically
   the work differential, substantially increased under COPRA.'' In fact   
   night shift differential increased from $51,000 in FY 1993 to $11.9     
   million in FY 1998. Mr. Schindel reached the same conclusion at the     
   Subcommittee's legislative hearing on July 17, 2001. A major reason for 
   this dramatic increase in premium pay for shift differential is that    
   COPRA increased the number of available hours where a Customs officer   
   could earn night differential. The Congressional intent of the COPRA was
   to ensure that Customs officers' schedules met customer demand. A       
   Treasury Inspector General report concluded that Customs schedules do   
   correspond to its workload and to its customers' needs. Customs Officer 
   Pay Reform Amendments (COPRA), OIG 96 094 (September 13, 1996). However,
   the report concluded that COPRA had caused a significant increase in    
   night differential spending, amounting to at least $6 million per year. 
      The report recommended: The Assistant Secretary (Enforcement) should 
   direct Customs to seek legislation that would lessen the number of hours
   available for Customs officers to earn night differential and reduce the
   night work differentials to a 10 percent premium on base pay. The change
   to the COPRA should create a night differential payment package that    
   would more accurately reimburse Customs officers for hours actually     
   worked at night, as was done previously under FEPA. The provision would 
   clarify Congressional intent that night premiums be awarded only for    
   night work, correcting the anomaly that an officer can receive a night  
   premium for working at noon, namely the limitation that night-time pay  
   be for actual night-time hours worked.                                  
      Rather than adopt the report's recommendations in toto, the Committee
   has chosen to address the inherent inequity of the current system which 
   provides night-time premium pay to employees working during daytime     
   hours. The bill would redistribute the savings generated by scaling back
   the hours that are eligible for night-time premium pay so as to make the
   legislation revenue neutral and overall inspector pay neutral. According
   to calculations from Customs, the savings from Section 123 will be      
   sufficient to increase the night-time premium differential from 15% to  
   at least 18% (for hours worked before midnight) and from 20% to 25% (for
   hours worked after midnight).                                           
      Customs officials testified at the markup on October 31, 2001, that  
   there would be no impact on operations as a result of these changes and 
   that all shifts would still be staffed. Also, given the current method  
   of assigning shifts by having inspectors bid on them, inspectors will   
   have the opportunity to seek different shifts depending upon their      
   personal preferences. Thus, an inspector who has been receiving         
   night-time premium pay for working a noon to 8:00 p.m. shift could seek 
   a later shift in order to continue to receive night time premium pay. At
   the same time, inspectors working the most popular night shift (4:00    
   p.m. to midnight), which accounts for 48 percent of night shifts, would 
   receive a raise from a current 15% premium for each hour to at least    
   18%. Committee Members believe this is a more equitable method for      
   paying night-time premium pay than the existing system.                 
           Sec. 124. Use of savings from payment of premium pay                    

            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would require the Secretary of the Treasury to        
   calculate any savings created as a result of sections 122 and 123.      
   Customs would be required to use the savings to provide additional      
   overtime for enforcement purposes. The change in Section 123 to increase
   the premium pay for customs officers for hours actually worked is       
   intended to offset the decrease in hours that the premium pay is        
   available.                                                              
            Reason for change                                                       

      The Committee wants to ensure that savings from sections 122 and 123 
   from this bill are used for paying higher premium pay to inspectors who 
   actually work night-time shifts.                                        
           Sec. 125. Effective date                                                

            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      The provision states that the section will be effective 15 days after
   enactment.                                                              
            Reason for change                                                       

      The Committee anticipates that the provision will take effect in the 
   payment cycle after enactment.                                          
                   Chapter 2--Miscellaneous Provisions                   

           Sec. 131. Additional Customs Service officers for U.S.-Canada border    

            Present law                                                             


   No applicable section.                                                  

            Explanation of the provision                                            

      This provision earmarks $25 million and 285 new staff hires for      
   Customs to use at the U.S.-Canada border.                               
            Reason for change                                                       

       Additional earmark: Since the terrorist attack on the U.S. on       
   September 11th, Customs has continued to work under the highest level of
   alert. Customs has apprehended terrorists in the past as they attempted 
   to go through the Northern Border with weaponry. Early reports are that 
   some of the September 11th terrorists also came through the Northern    
   Border. Moreover, many U.S. industries rely upon immediate delivery of  
   products from Canada in order to operate. Given also that Canada remains
   the largest trading partner for the United States, it is clear that new 
   resources are needed to facilitate trade while protecting the border.   
   The Committee notes that the Administration provided the Customs Service
   with no new hiring authority for staff from funds made available in the 
   emergency supplemental appropriations bill in 2001. Nevertheless,       
   Customs staff is continuing to work at the highest alert status during  
   the current emergency, and Customs staff must work markedly increased   
   overtime hours. New staff is needed particularly at the Northern Border 
   to insure that border security is maintained while facilitating trade.  
      `` Reverse Customs'' procedures: The Committee wishes to address the 
   inspection and control requirements of the border crossings along the   
   Northern Border. The Committee encourages the Administration, and the   
   Customs Service in particular, to explore an agreement with Canadian    
   officials to increase cooperation at border crossings and to station    
   customs officials from each government on the opposite side of the      
   border for the purpose of inspecting and clearing vehicles before they  
   cross the border--the so-called ``reverse customs'' process.            
      The Committee notes that Michigan/Canada border crossings at the     
   Ambassador Bridge and the Detroit Windsor Tunnel would be a good        
   location for a pilot project once an agreement between the United States
   and Canada is reached. According to data derived from the Bridge and    
   Tunnel Operators Association, Michigan led the nation in U.S.-Canada    
   border crossings with over 2.1 million trucks and 11.1 million cars     
   crossing the border, with Ambassador Bridge and the Detroit-Windsor     
   Tunnel showing the highest car, truck, and other vehicular traffic      
   volumes through August 2001. It is estimated that over $1 billion in    
   trade crosses the Canada-U.S. border every day, with nearly half        
   crossing either the Ambassador or Blue Water Bridges in Michigan.       
      Such a pilot project could address increased security and safety     
   concerns in the aftermath of the terrorist attacks in the United States 
   on September 11, 2001, and ensure that potentially dangerous vehicles   
   would be stopped prior to embarking upon the Ambassador Bridge and      
   Detroit Windsor Tunnel structures. The Committee expects that U.S.      
   Customs, in consulting and coordinating with Canadian Customs, would    
   give great weight and sensitivity to sovereignty issues, laws, and      
   customs, while at the same time achieving a workable and effective      
   mechanism allowing Customs personnel to carry out their duties.         
      In addition, the Committee recommends continuation of the use of     
   automated, computerized inspection and commercial transaction systems by
   Customs at border crossings and particularly at the Michigan ports of   
   entry, including but not limited to ACE, NCAP, NEXUS, and Port Pass. The
   Committee believes that these systems can and should be fully utilized  
   even during this period of heightened security on all U.S. bridges,     
   tunnels, and other border crossings in the aftermath of the September   
   11th terrorist attack on the United States. However, in order to ensure 
   that the need for enhanced security at the ports of entry is maintained,
   the Committee has authorized additional funding for new technologies and
   systems to improve the ability of U.S. Customs to interdict dangerous   
   vehicles and terrorist threats to our bridges, ports, and personnel at  
   ports of entry.                                                         
      The Commissioner of Customs should report to the Committee regarding 
   its implementation of the technology and pilot program initiatives set  
   forth in this report, with particular emphasis on its efforts to        
   coordinate the pilot program with Canadian Customs.                     
                      Sec. 132. Study and report relating to personnel practices of
           the Customs Service                                                     
            Present law                                                             

   No applicable section.                                                  

            Explanation of provision                                                

      Section 132 of H.R. 3129, as amended, requires Customs to conduct a  
   study of current personnel practices including: performance standards;  
   the effect and impact of the collective bargaining process on Customs   
   drug interdiction efforts; and a comparison of duty rotations policies  
   of Customs and other federal agencies employing similarly situated      
   personnel.                                                              
            Reason for change                                                       

      Under the collective bargaining agreement between Customs and the    
   National Treasury Employees' Union (NTEU), Customs cannot rotate a      
   Customs officer permanently or for temporary duty unless the officer    
   agrees to the change. In addition, the agreement specifies that the     
   union may bring to grievance any issue relating to the impact and       
   management of any management changes, including a management change     
   relating to drug enforcement, and any issues not included in the        
   collective bargaining agreement.                                        
      The Committee has been concerned that the union is able to           
   effectively thwart Customs drug interdiction efforts through bargaining 
   or the unwillingness to bargain. There have been a number of examples in
   which the NTEU was able to delay negotiations on work conditions, to the
   detriment of the ability to interdict contraband, including narcotics.  
   These examples included: (1) negotiations between the National Treasury 
   Employees Union (NTEU) and Customs since early 1995 in El Paso, Texas,  
   over work conditions at the three bridges between Mexico and El Paso    
   relating to the use of a very successful drug interdiction approach     
   called pre-primary roving for Canine Enforcement Officers and           
   Inspectors; (2) implementing certain shift work in Miami;               

                    and (3) the percent of officers regularly scheduled to work   
          weekend shifts at the John F. Kennedy airport (JFK).                    
      Shortly after the Subcommittee and Committee discussed these issues  
   at the 1998 mark-ups, Customs and the Union settled their differences on
   the weekend shifts issues at JFK and El Paso. In addition, the Impasse  
   Panel issued a decision on the shift issue in Miami. As a result of     
   these developments, the Committee believes that many of the issues that 
   have adversely impacted Customs drug interdiction efforts have been     
   favorably resolved. However, the Committee believes that a study of the 
   effect and impact of the collective bargaining process on Customs drug  
   interdiction efforts is necessary to keep a watchful eye on this issue. 
   In addition, the Committee is concerned that Customs' lack of authority 
   in the past to rotate and temporarily assign officers may have adversely
   impacted its drug interdiction efforts. Therefore, the Committee is     
   requiring that Customs conduct a comparison study of rotation policies  
   with similarly situated federal personnel which would enable both the   
   Committee and Customs to assess Customs rotation practices.             
                      Sec. 133. Study and report relating to accounting and        
           auditing procedures of the Customs Service                              
            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would require Customs to conduct a study to ensure    
   that appropriate training is being provided to personnel who are        
   responsible for financial auditing of importers. Customs would          
   specifically report on how its audit personnel protect the privacy and  
   trade secrets of importers.                                             
            Reason for change                                                       

      The Committee has received many complaints from U.S. importers about 
   the specialized skill and knowledge base of auditors from the Customs   
   Service. As with all government enforcement, the skill of enforcement   
   officials is important in order to ensure that violations of law are not
   overlooked but also to ensure that legitimate acts are not mistakenly   
   labeled illegal. Especially troubling are complaints that proprietary   
   business information is not being given the proper level of             
   confidentiality from disclosure. The Committee does not have sufficient 
   data to confirm or deny these complaints definitively and has rather    
   chosen to direct Customs to study and report on the procedures in place 
   to ensure that auditors are properly trained.                           
                      Sec. 134. Establishment and implementation of cost accounting
           system; reports                                                         
            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      Section 134 would mandate the imposition of a cost accounting system 
   in order for Customs to effectively explain its expenditures. Such a    
   system would provide compliance with the core financial system          
   requirements of the Joint Financial Management Improvement Program      
   (JFMIP), which is a joint and cooperative undertaking of the U.S.       
   Department of the Treasury, the General Accounting Office, the Office of
   Management and Budget, and the Office of Personnel Management working in
   cooperation with each other and other agencies to improve financial     
   management practices in government. That Program has statutory          
   authorization in the Budget and Accounting Procedures Act of 1950 (31   
   U.S.C. 65).                                                             
            Reason for change                                                       

      The Customs Service is currently unable to answer fundamental        
   questions about how it spends money. This fact was mentioned above in   
   the discussion of present law for Section 101. For example, Customs     
   states that it spends a certain amount of money on commercial           
   operations. The figure is not based upon the continual adding of various
   commercial costs from all operations within Customs, such as the number 
   of people who actually processed entries of merchandise at specific     
   ports during a set period. Instead, the figure is based upon Customs    
   officials' belief that a set percentage of its work is always related to
   commercial activities. That static percentage is based upon a no longer 
   available, ad hoc survey conducted by Customs several years ago. A      
   modern cost accounting system would allow Customs to accurately identify
   the amount of money spent at specific locations, for specific functions 
   such as textile transshipment monitoring, searching for contraband, or  
   processing entries of merchandise.                                      
           Sec. 135. Study and report relating to timeliness of prospective rulings

            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would require the Comptroller General to prepare a    
   report to determine whether Customs has improved its timeliness in      
   providing prospective rulings.                                          
            Reason for change                                                       

      In light of oversight reports from the General Accounting Office and 
   complaints from the business community, the General Accounting Office is
   directed to monitor and provide an update to its recent report in one   
   year on the progress of Customs in substantially decreasing the time it 
   takes to issue prospective rulings. The Committee had originally        
   proposed a strict deadline of 90-days for Customs to issue prospective  
   rulings. Because of the emergency currently facing                      

                    Customs, the draw upon its resources, and assurance from      
          officials from the new Administration to act on GAO's comments, a       
          mandatory deadline was dropped but will be revisited depending upon the 
          results of GAO's review.                                                
           Sec. 136. Study and report relating to Customs user fees                

            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would require the Comptroller General to prepare a    
   confidential report to determine whether current user fees are          
   appropriately set at a level commensurate with the service provided for 
   the fee. The Comptroller General is authorized to recommend the         
   appropriate level for customs user fees.                                
            Reason for change                                                       

      The Committee has already noted in the discussion at sections 101 and
   134 the problem of a lack of reliable cost data from Customs. One       
   consequence of having inadequate data is that importer user fees may not
   reflect the level of services provided for by the fee. Moreover, Customs
   officials admit that there is no cost accounting system in place for    
   them to accurately track costs of providing services. For this reason,  
   this section should be read in conjunction with Section 134 requiring   
   Customs to implement a cost accounting system.                          
      If the government buys a good or service at a price that purports to 
   be based upon the cost of that good or service, then the government     
   would expect a seller to provide adequate documentation to support that 
   cost basis. The government therefore should provide similar             
   justification of its costs especially when it requires importers to pay 
   fees ostensibly to cover services rendered. The inability of government 
   to justify the costs of its services to importers, while simultaneously 
   urging increases in fees, has reasonably led to concerns among importers
   that the fee levels are no longer appropriate, may be inflated, and     
   could be raised without adequate justification. So long as reliable data
   is not available, it will be difficult, if not impossible, to justify   
   the current level of fees, much less extensions or changes.             
                          SUBTITLE D--TOOLS FOR FIGHTING TERRORISM                

           Sec. 141. Immunity for Customs officers that act in good faith          

            Present law                                                             

      Currently, Customs officers are entitled to qualified immunity in    
   civil suits brought by persons, who were searched upon arrival in the   
   United States. Qualified immunity protects officers from liability if   
   they can establish that their actions did not violate any clearly       
   established constitutional or statutory rights.                         
            Explanation of the provision                                            

      This section would protect Customs officers by providing them        
   immunity from lawsuits stemming from personal searches of people        
   entering the country so long as the officers conduct the searches in    
   good faith. The ``good faith'' standard has been used in other contexts 
   similar to this, as in 19 U.S.C. 507, for searches conducted by other   
   individuals at the direction of Customs officers. Under this amendment, 
   if Customs certifies in a lawsuit that the officer followed policy in   
   conducting the allegedly improper search, the court would then make a   
   finding of good faith immunity and would dismiss the suit against the   
   officer.                                                                
            Reason for change                                                       

      Customs officers have the important responsibility to search persons 
   arriving in the United States to prevent the introduction of contraband,
   including dangerous items. Often, a personal search is the only way to  
   determine if a person is concealing contraband on or within their body. 
   There has been a large increase in the number of private lawsuits       
   against Customs officers by persons that have undergone personal        
   searches. Despite the large increase in suits against Customs officers, 
   almost every one of them are ultimately resolved in favor of the        
   officers (i.e., there is a finding of qualified immunity).              
      Customs officers have been subject to an increasing number of        
   lawsuits by those searched at the border. In all but fewer than five of 
   these dozens of cases in the last several years, the courts have found  
   in the favor of the Customs officers. Nonetheless, each case tends to   
   hinge on a lengthy, fact-specific trial, potentially distracting the    
   officers from their duties and creating a chilling effect among other   
   officers. Though Customs officers are winning these cases, they must    
   undergo discovery, depositions, and trial, even when those searches have
   uncovered drugs and other smuggled items on or inside the plaintiff.    
   These officers may face financial burdens as well, as personal property 
   such as cars and real estate may be covered by liens while the          
   litigation is pending. Customs' experience is that it takes years to get
   decisions on qualified immunity for its officers, even in cases where   
   the officer followed personal search policy and did nothing wrong.      
      As Customs searches greater numbers of passengers to detect          
   terrorists, there is a potential for Customs officers to become subject 
   to an increasing number of lawsuits alleging ethnic or religious        
   profiling. While officers are not permitted to discriminate on the basis
   of unconstitutional criteria, this amendment provides an avenue for     
   frivolous and questionable suits to be resolved at an early stage.      
   Accordingly, the amendment would have the effect of streamlining the    
   existing process for judicial determinations on whether Customs officers
   are entitled to immunity from lawsuits.                                 
      The amendment introduces a single standard--good faith--for courts to
   rely on to speedily dispose of unmeritorious lawsuits at an early stage.
   The Committee believes that the best (though not exclusive) measure of  
   whether a Customs officer conducts a personal search in good faith is   
   whether the officer follows established Customs policy. It is important 
   to note that                                                            

                    even with this amendment, truly aggrieved plaintiffs would    
          continue to have appropriate remedies to obtain redress for any improper
          searches as they could obtain money damages under the Federal Tort      
          Claims Act (FTCA) against the government for tortious searches; obtain  
          injunctive relief for unconstitutional policies; or if the officer acted
          in bad faith and in violation of clearly established constitutional or  
          statutory rights, recover against the officer personally (because the   
          officer would not be immune from personal liability).                   
                      Sec. 142. Emergency adjustments to offices, ports of entry,  
           or staffing of the Customs Service                                      
            Present law                                                             

      Present law places numerous restrictions on and, in some instances,  
   precludes the Secretary of the Treasury or Customs from making any      
   adjustments to ports and staff. 19 U.S.C. 1318 requires a Presidential  
   proclamation of an emergency and authorization to the Secretary of the  
   Treasury only to extend the time for performance of legally required    
   acts during an emergency. No other emergency powers statute for Customs 
   exists.                                                                 
            Explanation of the provision                                            

      This provision would permit the Secretary of the Treasury, if the    
   President declares a national emergency or if necessary to address      
   specific threats to human life or national interests, to eliminate,     
   consolidate, or relocate Customs ports and offices and to alter staffing
   levels, services rendered and hours of operations at those locations. In
   addition, the amendment would permit the Commissioner of Customs, when  
   necessary to address threats to human life or national interests, to    
   close temporarily any Customs office or port or take any other lesser   
   action necessary to respond to the specific threat. The Secretary or the
   Commissioner would be required to notify Congress of any action taken   
   under this proposal within 72 hours.                                    
            Reason for change                                                       

      This provision would loosen restrictions on Customs' ability to alter
   the location, hours of operation and staffing at ports in response to   
   terrorist threats. Such restrictions unduly limit Customs' ability to   
   move personnel to locations where they can most effectively be used to  
   reduce or respond to terrorist threats. They also force Customs to      
   maintain offices and personnel in locations that have very little       
   international traffic and where they cannot be used effectively to      
   address threats of terrorism. The terrorist attack on the United States 
   on September 11th resulted in the need for changes in border staffing   
   and security. The Administration requested these changes to law in order
   to give officials flexibility in providing for border security during   
   the current and future emergencies.                                     
                      Sec. 143. Mandatory advanced electronic information for cargo
           and passengers                                                          
            Present law                                                             

      Currently, commercial carriers bringing passengers or cargo into or  
   out of the country have no obligation to provide Customs with such      
   information in advance.                                                 
            Explanation of the provision                                            

      This provision would require every air, land, or water-based         
   commercial carrier to file an electronic manifest describing all        
   passengers with Customs before entering or leaving the country. There is
   a similar requirement for cargo entering the country. Specific          
   information required in the advanced manifest system would be developed 
   by Treasury in regulations.                                             
            Reason for change                                                       

      Advanced electronic manifests will significantly enhance Customs'    
   ability to identify high-risk passengers and cargo and will ensure that 
   suspected terrorists or those on law enforcement or terrorist watch     
   lists are identified before entering or leaving the United States. The  
   passenger identification requirement will provide Customs with, among   
   other things, the name and passport number of every passenger in advance
   of a carrier's attempt to enter or leave the United States. Similarly,  
   the cargo manifest requirement provides Customs with a wide range of    
   important information about all cargo, including those involved in its  
   shipment. This proposal builds upon a successful voluntary program that 
   Customs has already with the airlines. While all commercial carriers    
   must provide this information to Customs at some point, this proposal   
   would require it prior to entry or departure and electronically for     
   passenger carriers. The amendment makes a similar requirement for cargo 
   entering the country.                                                   
      The Committee received many questions from carriers as to its        
   concerns that Customs does not currently have the infrastructure or     
   procedures to implement in all cases advanced electronic manifesting.   
   The Committee is aware of the current state of the system and expects   
   the Secretary of the Treasury to construct both infrastructure and      
   procedures to implement these requirements by means of regulations. The 
   current Customs computer system would be unable to handle the increased 
   electronic information contemplated by these new provisions. In this    
   regard, the full funding of the ACE computer system is all the more     
   important to allow Treasury and Customs to proceed quickly.             
      The Committee intends the Treasury Department to promulgate          
   regulations implementing the advance reporting requirements of this     
   section after consulting with various component members of the          
   transportation industry. This should occur in conjunction with the      
   design and development of the ACE computer system, which is intended to 
   accommodate the new advanced reporting information. Further, the        
   Committee expects the Treasury Department to engage in a regulation     
   making process that will take into account, and accommodate to the      
   extent reasonable, standard commercial practices. Such regulations      
   should appropriately reflect the distinct differences among trucking,   
   rail, vessel, air and other transportation entities while advancing the 
   government's need to obtain the manifest information in a timely manner.
                      Sec. 144. Border search authority for certain contraband in  
           outbound mail                                                           
            Present law                                                             

      Although Customs currently searches all inbound mail, and although it
   searches outbound                                                       

                    mail sent via private carriers, outbound mail carried by the  
          Postal Service is not subject to search.                                
            Explanation of the provision                                            

      This proposal would enable Customs officers to search outbound U.S.  
   mail for unreported monetary instruments, weapons of mass destruction,  
   firearms, and other contraband used by terrorists. Because Customs does 
   not inspect outbound mail carried by the Postal Service, millions of    
   packages mailed out of the United States, some weighing many pounds and 
   capable of containing dangerous items such as high explosives, illegally
   obtained cash, or biological agents, are free from any Customs          
   inspection.                                                             
      This new section would provide Customs with the same authority that  
   it has to search incoming mail. Specifically, the bill would authorize  
   searches of outbound non-letter class packages. Letter-class outbound   
   mail could be searched upon reasonable suspicion that it contained      
   firearms, monetary instruments (checks or cash), or several other       
   categories of dangerous materials and other merchandise subject to the  
   laws enforced by Customs. However, reading of mail would not be         
   authorized absent Customs officers obtaining a search warrant or        
   consent.                                                                
            Reason for change                                                       

      Often the smuggling of weapons, drugs, or other contraband is only   
   half of an illegal operation. The other half consists of the outbound   
   smuggling of unreported money that helps finance the illegal activity.  
   The current government investigation into the activities of the         
   terrorists responsible for the attack of September 11th is heavily      
   reliant upon the tracing of money that helped finance the attack. Long  
   before September 11th, government investigators have known that drug    
   money frequently leaves the country and helps foreign drug sellers      
   continue their operations. Tracing the money helps bring illegal        
   operators to justice. It is therefore critical that Customs have the    
   authority to search outbound mail.                                      
      The Committee notes that Customs currently searches outbound         
   envelopes and cargo shipped via private express companies, but there    
   have been doubts by some that Customs has the authority to search       
   outbound mail sent via the U.S. Postal Service. It is the intention of  
   the Committee to make an unambiguous declaration and clarification of   
   the present law to the effect that the U.S. Customs Service has and must
   have access to search all outbound mail. Due regard for privacy rights  
   of individuals is addressed through the requirement of probable cause   
   and a search warrant or consent in the event that letter class mail     
   needs to be read.                                                       
                      Sec. 145. Authorization of appropriations for reestablishment
           of Customs operations in New York City                                  
            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      On September 11, 2001, destruction of the World Trade Center complex 
   destroyed substantial operations of the U.S. Customs Service. This      
   provision authorizes funds to reestablish those operations.             
            Reason for change                                                       

      Textile transshipment operations are specifically mentioned as       
   needing reestablishment given the importance of that work to the import 
   sensitive textile and apparel manufacturers in the United States.       
                        SUBTITLE E--TEXTILE TRANSSHIPMENT PROVISIONS              

                      Sec. 151. GAO Audit of textile transshipment monitoring by   
           Customs Service                                                         
            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would direct the Comptroller General to conduct an    
   audit of the systems at the Customs Service to monitor and enforce      
   textile transshipment. The Comptroller General would report on          
   recommendations for improvements.                                       
            Reason for change                                                       

      The Committee continues to hear complaints about textile goods       
   entering the country that have been transshipped, meaning that an       
   importer has entered the goods with an incorrect declaration for the    
   purpose of obtaining entry or a lower duty. The Committee is aware that 
   Customs has ongoing operations to monitor and enforce textile           
   transshipment, and many allegations may already be under investigation. 
   A report from the Comptroller will assist the Committee in evaluating   
   Customs' enforcement.                                                   
                      Sec. 152. Authorization of appropriations for textile        
           transshipment enforcement operations                                    
            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      This provision would authorize $9,500,000 for FY 2002 to the Customs 
   Service for the purpose of enhancing its textile transshipment          
   enforcement operations. This amount would be in addition to Customs'    
   base authorization and the authorization to reestablish the destroyed   
   textile monitoring and enforcement operations at the World Trade Center.

            Reason for change                                                       

      The Committee wishes to increase the level of funding for monitoring 
   and enforcement of textile transshipment to ensure every effort is made 
   to control imports according to present law.                            
           Sec. 153. Implementation of the African Growth and Opportunity Act      

            Present law                                                             

   No applicable section.                                                  

            Explanation of the provision                                            

      The provision would earmark approximately $1.3 million within        
   Customs' budget for selected activities related to providing technical  
   assistance to help sub-Saharan African 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).             
            Reason for change                                                       

      Congress intended for sub-Saharan countries to receive benefits in   
   the African Growth and Opportunity Act which passed in the 106th        
   Congress. Due to the lack of experience and infrastructure in many      
   African countries, however, these countries are experiencing difficulty 
   in taking advantage of the Act and its benefits. The Committee,         
   therefore, wishes Customs to provide technical assistance to these      
   countries.                                                              
                 TITLE II--OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE       

           Sec. 201. Authorization of appropriations                               

            Present law                                                             

      The statutory authority for budget authorization for the Office of   
   the United States Trade Representative is section 141(g)(1) of the Trade
   Act of 1974 (19 U.S.C. 2171(g)(1)). The most recent authorization of    
   appropriations for USTR was under section 101 of the Customs and Trade  
   Act of 1990 [P.L. 101 382]. Under 19 U.S.C. 2171, Congress has adopted a
   two-year authorization process to provide USTR with guidance as it plans
   its budget as well as guidance from the Committee for the appropriation 
   process.                                                                
            Explanation of the provision                                            

      This provision authorizes $30,000,000 for FY 2002 and $31,000,000 for
   FY 2003. The provision requires submission of out-of-year budget        
   projections to the Ways and Means and Finance Committees. In light of   
   the substantial increase in trade negotiation work to be conducted by   
   USTR and the associated need for consultations with Congress, this      
   provision would authorize the addition of two individuals to assist the 
   office of Congressional Affairs.                                        
            Reason for change                                                       

      The Committee recognizes that USTR needs increased budget            
   authorization to meet its expenses and hire new employees. The          
   legislation authorizes the full amount of the President's budget request
   for USTR. The Committee wants to be sure USTR has enough resources so   
   that the World Trade Organization (WTO) negotiations will successfully  
   open trade in favor of the interests of the United States.              
                  TITLE III--UNITED STATES INTERNATIONAL TRADE COMMISSION         

           Sec. 301. Authorization of appropriations                               

            Present law                                                             

      The statutory authority for budget authorization for the             
   International Trade Commission is section 330(e)(2)(A) of the Tariff Act
   of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent authorization of     
   appropriations for the ITC was under section 101 of the Customs and     
   Trade Act of 1990 [P.L. 101 382]. Under 19 U.S.C. 1330, Congress has    
   adopted a two-year authorization process to provide the ITC with        
   guidance as it plans its budget as well as guidance from the Committees 
   for the appropriation process.                                          
            Explanation of the provision                                            

      This provision authorizes $51,400,000 for FY 2002 and $53,400,000 for
   FY 2003. The provision requires submission of out-of-year budget        
   projections to the Ways and Means and Finance Committees.               
            Reason for change                                                       

      The Committee recognizes that the ITC needs increased budget         
   authorization to meet the increased workload. The legislation authorizes
   the full amount of the President's budget request for the ITC.          
                              TITLE IV--OTHER TRADE PROVISIONS                    

                      Sec. 401. Increase in aggregate value of articles exempt from
           duty acquired abroad by United States residents                         
            Present law                                                             

      The Harmonized Tariff Schedule at subheading 9804.00.65 currently    
   provides a $400 duty exemption for travelers returning from abroad.     
            Explanation of the provision                                            

   The provision would increase the current $400 duty exemption to $800.   


            Reason for change                                                       

      The current duty exemption of $400 has been in place since 1983 and  
   after inflation no longer reflects the same level of buying power. An   
   increase is therefore in order.                                         
           Sec. 402. Regulatory audit procedures                                   

            Present law                                                             

      Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509) provides the  
   authority for Customs to audit persons making entry of merchandise into 
   the U.S. In the course of such audit, Customs auditors may identify     
   discrepancies, including underpayments of duties. However, if there also
   are overpayments, there is no requirement that such overpayments be     
   offset against the underpayments if the underlying entry has been       
   liquidated.                                                             
            Explanation of the provision                                            

      This provision would require that when conducting an audit, Customs  
   must recognize and offset overpayments and overdeclarations of duties,  
   quantities and values against underpayments and underdeclarations. As an
   example, if during an audit Customs finds that an importer has underpaid
   duties associated with one entry of merchandise by $100 but has also    
   overpaid duties from another entry of merchandise by $25, then any      
   assessment by Customs must be the difference of $75.                    
            Reason for change                                                       

      A government audit should be an even-handed and neutral evaluation of
   a person's compliance with the law. The government should treat         
   overpayments/overdeclarations and underpayments/ underdeclarations      
   equally, and if both are found during an audit, they should be used to  
   offset each other. The Committee redrafted this provision on the basis  
   of concerns from Customs. It is the Committee's intention that this     
   provision shall not affect in any way Customs' current authority to     
   define an audit's scope, time period, and methodology.                  
                                 III. VOTES OF THE COMMITTEE                      

      In compliance with clause 3(b) of rule XIII of the Rules of the House
   of Representatives, the following statements are made concerning the    
   votes of the Committee on Ways and Means in its consideration of the    
   bill, H.R. 3129.                                                        
                        MOTION TO REPORT THE BILL                        

      The bill, H.R. 3129, as amended, was ordered favorably reported by   
   voice vote (with a quorum being present).                               
                           VOTES ON AMENDMENTS                           

      The Chairman's amendment in the nature of a substitute was agreed to 
   by a rollcall vote of 20 yeas to 14 nays. The vote was as follows:      


                                                                                    

Representative      Yea        Nay     Present  Representative          Yea  Nay          Present  

Mr. Thomas          X                           Mr. Rangel                                         
Mr. Crane           X                           Mr. Stark                    X                     
Mr. Shaw            X                           Mr. Matsui                   X                     
Mrs. Johnson        X                           Mr. Coyne                                          
Mr. Houghton                                    Mr. Levin                    X                     
Mr. Herger          X                           Mr. Cardin                   X                     
Mr. McCrery                                     Mr. McDermott                X                     
Mr. Camp            X                           Mr. Kleczka                  X                     
Mr. Ramstad         X                           Mr. Lewis (GA)               X                     
Mr. Nussle          X                           Mr. Neal                     X                     
Mr. Johnson         X                           Mr. McNulty                                        
Ms. Dunn                                        Mr. Jefferson                X                     
Mr. Collins         X                           Mr. Tanner                   X                     
Mr. Portman         X                           Mr. Becerra                  X                     
Mr. English         X                           Mrs. Thurman                 X                     
Mr. Watkins         X                           Mr. Doggett                  X                     
Mr. Hayworth        X                           Mr. Pomeroy                  X                     
Mr. Weller          X                                                                              
Mr. Hulshof         X                                                                              
Mr. McInnis                                                                                        
Mr. Lewis (KY)      X                                                                              
Mr. Foley           X                                                                              
Mr. Brady           X                                                                              
Mr. Ryan            X                           

      A rollcall vote was conducted on the following amendment to the      
   Chairman's amendment in the nature of a substitute:                     

      An amendment by Mr. Stark on behalf of himself and Mr. Rangel, which 
   would strike sections 122 and 123, correcting overtime and premium pay, 
   was defeated by a rollcall vote of 13 yeas to 20 nays. The vote was as  
   follows:                                                                

                                                                                        

Representative          Yea  Nay          Present  Representative      Yea            Nay     Present  

Mr. Thomas                   X                     Mr. Rangel                                          
Mr. Crane                    X                     Mr. Stark           X                               
Mr. Shaw                     X                     Mr. Matsui          X                               
Mrs. Johnson                 X                     Mr. Coyne                                           
Mr. Houghton                                       Mr. Levin           X                               
Mr. Herger                   X                     Mr. Cardin          X                               
Mr. McCrery                                        Mr. McDermott       X                               
Mr. Camp                     X                     Mr. Kleczka                                         
Mr. Ramstad                  X                     Mr. Lewis (GA)      X                               
Mr. Nussle                   X                     Mr. Neal            X                               
Mr. Johnson                  X                     Mr. McNulty                                         
Ms. Dunn                                           Mr. Jefferson       X                               
Mr. Collins                  X                     Mr. Tanner          X                               
Mr. Portman                  X                     Mr. Becerra         X                               
Mr. English                  X                     Mrs. Thurman        X                               
Mr. Watkins                  X                     Mr. Doggett         X                               
Mr. Hayworth                 X                     Mr. Pomeroy         X                               
Mr. Weller                   X                                                                         
Mr. Hulshof                  X                                                                         
Mr. McInnis                                                                                            
Mr. Lewis (KY)               X                                                                         
Mr. Foley                    X                                                                         
Mr. Brady                    X                                                                         
Mr. Ryan                     X                     

                            PROCEDURAL MOTIONS                           

      A rollcall vote was conducted on a motion by Mr. Crane pursuant to   
   clause 1 of rule 22 of the Rules of the House that the Committee        
   authorize the Chairman to offer such motions as may be necessary in the 
   House to go to conference with the Senate on the bill H.R. 3129 or a    
   similar Senate bill. The motion was agreed to by a vote of 19 yeas to 1 
   nay, and 2 voting present. The vote was as follows:                     

                                                                                         

Representative      Yea           Nay      Present  Representative           Yea  Nay       Present     

Mr. Thomas          X                               Mr. Rangel                                          
Mr. Crane           X                               Mr. Stark                                           
Mr. Shaw            X                               Mr. Matsui                                          
Mrs. Johnson        X                               Mr. Coyne                                           
Mr. Houghton                                        Mr. Levin                                           
Mr. Herger          X                               Mr. Cardin                              X           
Mr. McCrery                                         Mr. McDermott                                       
Mr. Camp            X                               Mr. Kleczka                   X                     
Mr. Ramstad         X                               Mr. Lewis (GA)                                      
Mr. Nussle          X                               Mr. Neal                                            
Mr. Johnson         X                               Mr. McNulty                                         
Ms. Dunn                                            Mr. Jefferson                                       
Mr. Collins         X                               Mr. Tanner                                          
Mr. Portman         X                               Mr. Becerra                             X           
Mr. English         X                               Mrs. Thurman                                        
Mr. Watkins         X                               Mr. Doggett                                         
Mr. Hayworth        X                               Mr. Pomeroy                                         
Mr. Weller          X                                                                                   
Mr. Hulshof         X                                                                                   
Mr. McInnis                                                                                             
Mr. Lewis (KY)      X                                                                                   
Mr. Foley                                                                                               
Mr. Brady           X                                                                                   
Mr. Ryan            X        

                                     IV. BUDGET EFFECTS                           

                         A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS               

      In compliance with clause 3(d)(2) of rule XIII of the Rules of the   
   House of Representatives, the following statement is made concerning the
   effects on the budget of H.R. 3129, as reported: The Committee agrees   
   with the estimate prepared by CBO which is included below.              
              B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES    

      In compliance with clause 3(c)(2) of rule XIII of the Rules of the   
   House of Representatives, the Committee states that enactment of H.R.   
   3129 would diminish duty revenues by $6 million per year as a result of 
   the increase in the duty exemption for travelers from abroad from $400  
   to $800.                                                                
                C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE      

      In compliance with clause 3(c)(3) of rule XIII of the Rules of the   
   House of Representatives, requiring a cost estimate prepared by the     
   Congressional Budget Office, the following report prepared by CBO is    
   provided.                                                               


       U.S. Congress,                                                          

       Congressional Budget Office,                                            

       Washington, DC, November 20, 2001.                                      



          Hon.  William ``Bill'' M. Thomas,                Chairman, Committee on Ways and Means,

       House of Representatives, Washington, DC.                               

       Dear Mr. Chairman: The Congressional Budget Office has prepared the 
   enclosed cost estimate for H.R. 3129, the Customs Border Security Act of
   2001.                                                                   
      If you wish further details on this estimate, we will be pleased to  
   provide them. The CBO staff contact is Mark Grabowicz.                  
   Sincerely,                                                              

         Steven Lieberman                                                       

         (For Dan L. Crippen, Director).                                        

   Enclosure.                                                              

           H.R. 3129--Customs Border Security Act of 2001                          

      Summary: H.R. 3129 would authorize appropriations for 2002 and 2003  
   for the U.S. Customs Service, the Office of the U.S. Trade              
   Representative, and the International Trade Commission. The             
   authorizations for the Customs Service would include funds for salaries 
   and expenses, its Automated Commercial Environment (ACE) computer       
   system, air and marine interdiction, reestablishment of Customs         
   operations in New York City, and a program to prevent child pornography.
   This legislation would increase the personal duty exemption for         
   travelers entering the United States. The bill also would make several  
   changes to the current laws relating to overtime and premium pay for    
   Customs officers. Finally, H.R. 3129 would direct the General Accounting
   Office (GAO) to prepare three reports on various Customs issues.        
      Because an appropriation for fiscal year 2002 for the Customs Service
   has already been enacted, H.R. 3129 would have a relatively small effect
   on spending in that year. CBO estimates that implementing H.R. 3129     
   would cost about $2.9 billion over the 2002 2006 period, assuming       
   appropriation of the authorized and estimated amounts. (About $2.8      
   billion of this total would be spending for the Customs Service.) We    
   estimate that enacting H.R. 3129 also would decrease revenues by about  
   $4 million annually because of the increased personal duty exemption.   
   Finally, the bill could have a negligible net impact on direct spending 
   for overtime and premium pay for Customs officers. Because the bill     
   would affect revenues and direct spending, pay-as-you-go procedures     
   would apply.                                                            
      H.R. 3129 would impose private-sector mandates, as defined by the    
   Unfunded Mandates Reform Act (UMRA), on certain land, air, and vessel   
   carriers. CBO estimates that the total direct cost of those mandates    
   would fall below the annual threshold established by UMRA for           
   private-sector mandates ($113 million in 2001, adjusted annually for    
   inflation). The bill contains no intergovernmental mandates as defined  
   in UMRA and would impose no costs on state, local, or tribal            
   governments.                                                            

      Estimated cost to the Federal Government: The estimated budgetary    
   impact of H.R. 3129 is shown the following table. The costs of this     
   legislation fall within budget functions 150 (international affairs),   
   750 (administration of justice), and 800 (general government).          

                                                                                                

                                                            By fiscal year, in millions of dollars--     

                                                             2002      2003      2004      2005      2006  

    SPENDING SUBJECT TO APPROPRIATION                                                                          
Spending under current law:                                 2,767         0         0         0         0  
Proposed changes:                                             107     2,825         0         0         0  
Spending under H.R. 3129:                                   2,874     2,825         0         0         0  
    CHANGES IN REVENUES                                                                                        
Increased personal duty exemption: Estimated revenues          -4        -4        -4        -4        -4  

Notes: 1. The 2002 level is the amount appropriated for that year for the Customs Service, the Office of the United States Trade Representative, and the International Trade Commission. 2. For fiscal year 2002, most of the increased funding provided by H.R. 3129 would be for reestablishment of customs operations in New York City. 3. H.R. 3129 could also affect direct spending, but CBO estimates that any such effects would be less than $500,000 annually.  

            Basis of estimate                                                       

      Assuming appropriation of the necessary amounts, CBO estimates that  
   implementing the bill would cost about $2.9 billion over the 2002 2006  
   period. (About $2.8 billion of this total would be for spending by the  
   Customs Service.) We estimate that enacting H.R. 3129 also would        
   decrease revenues by about $4 million annually because of the increased 
   personal duty exemption for travelers entering the United States.       
   Enacting the bill could affect direct spending, but we estimate that any
   effects would be less than $500,000 annually.                           
             Spending subject to appropriation                                      

      For this estimate, CBO assumes that the amounts authorized by the    
   bill will be appropriated near the start of each fiscal year and that   
   outlays generally will follow historical spending rates for the         
   authorized activities or for similar programs.                          
      Based on information from the Customs Service, CBO estimates that it 
   would cost roughly $100 million over the 2002 2004 period to reestablish
   its operations in New York City. The agency's main facility in lower    
   Manhattan, which housed 800 employees and contained several             
   laboratories, was destroyed by the terrorist attacks on September 11,   
   2001. Funds would be used mostly to equip new office space for Customs  
   employees and to replace the materials testing and crime investigation  
   laboratories that were destroyed. Based on information from GAO, we     
   estimate that the three reports required by the bill would cost about $1
   million in 2002.                                                        
             Revenues                                                               

      H.R. 3129 would increase the personal-duty exemption for persons     
   entering the United States from $400 to $800. This provision would      
   increase the amount of goods that travelers from abroad could bring in  
   free of duty. Based on information from the Customs Service, CBO        
   estimates that this provision would decrease revenues by about $4       
   million each year.                                                      
             Direct spending                                                        

      The provisions of H.R. 3129 that modify overtime and premium pay for 
   Customs officers could affect direct spending since such costs are paid 
   from funds not subject to annual appropriation. Some of the bill's      
   provisions could increase these personnel costs, while other provisions 
   would probably yield savings. CBO estimates that the net effect of H.R. 
   3129 on direct spending for overtime and premium pay would be less than 
   $500,000 a year.                                                        
      Pay-as-you-go considerations: The Balanced Budget and Emergency      
   Deficit Control Act sets up pay-as-you-go procedures for legislation    
   affecting direct spending or receipts. The changes in outlays and       
   revenues that would be subject to pay-as-you-go procedures are shown in 
   the following table. For the purposes of pay-as-you-go procedures, only 
   the effects in the budget year and the succeeding four years are        
   counted.                                                                


                                                                                                     

                                                 By fiscal year in millions of dollars--                           

                            2002      2003      2004      2005      2006      2007      2008      2009      2010    2011  

Changes in outlays             0         0         0         0         0         0         0         0         0       0  
Changes in receipts           -4        -4        -4        -4        -4        -4        -4        -4        -4      -4  

      Estimated impact on State, local, and tribal governments: H.R. 3129  
   contains no intergovernmental mandates as defined in UMRA and would     
   impose no costs on state, local, or tribal governments.                 
      Estimated impact on the private sector: H.R. 3129 would impose       
   private-sector mandates, as defined by UMRA, on certain land, air, and  
   vessel carriers seeking approval from the U.S. Customs Service for entry
   into the United States or for clearance to proceed from a port or place 
   in the United States. The bill would require each land, air, or vessel  
   carrier to provide by electronic transmission cargo manifest information
   in advance of such entry or clearance. The bill also would require such 
   carriers with passengers arriving or departing the United States to     
   provide by electronic transmission certain passenger and crew member    
   manifest information in advance of such entry or clearance. According to
   the U.S. Customs Service, all U.S. air carriers and many cargo vessels  
   currently provide such information on a voluntary basis. Based on       
   information from representatives of the transportation industry, CBO    
   estimates that the total direct cost to comply with mandates in the bill
   would fall below the annual threshold established by UMRA for           
   private-sector mandates ($113 million in 2001, adjusted annually for    
   inflation).                                                             
      Estimate prepared by: Federal spending: Mark Grabowicz; Federal      
   revenues: Erin Whitaker; impact on State, local, and tribal governments:
   Victoria Heid Hall; impact on the private sector: Paige Piper/Bach.     
      Estimate approved by: Peter H. Fontaine, Deputy Assistant Director   
   for Budget Analysis; G. Thomas Woodward, Assistant Director for Tax     
   Analysis.                                                               
                V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE     

                    A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS           

      With respect to clause 3(c)(1) of rule XIII of the Rules of the House
   of Representatives (relating to oversight findings), the Committee,     
   based on public hearing testimony and information from the              
   Administration, concluded that it is appropriate and timely to consider 
   the resolution as reported.                                             
                  B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES        

      Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House of 
   Representatives, the Committee advises that the Administration has in   
   place program goals and objectives, which have been reviewed by the     
   Committee. H.R. 3129 addresses several items by way of studies and      
   reports for the purpose of evaluating whether Customs is meetings its   
   goals and objectives.                                                   
                           C. CONSTITUTIONAL AUTHORITY STATEMENT                  

      With respect to clause 3(d)(1) of rule XIII of the Rules of the House
   of Representatives, relating to Constitutional Authority, the Committee 
   states that the Committee's action in reporting the bill is derived from
   Article 1 of the Constitution, Section 8 (``The Congress shall have     
   power to lay and collect taxes, duties, imposts and excises, to pay the 
   debts and to provide for * * * the general Welfare of the United        
   States.'')                                                              

                  VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED       

     In compliance with clause 3(e) of rule XIII of the Rules of the House
  of Representatives, changes in existing law made by the bill, as        
  reported, are shown as follows (existing law proposed to be omitted is  
  enclosed in black brackets, new matter is printed in italic, existing   
  law in which no change is proposed is shown in roman):                  
           SECTION 301 OF THE CUSTOMS PROCEDURAL REFORM AND SIMPLIFICATION ACT OF 
                                      1978                                        
    Sec. 301. (a)(1) * * *                                                

         * * * * * * *                                                           

     (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).                                         
   (b)  Authorization of Appropriations.--                                

       (1) For noncommercial operations.--There are authorized to be       
   appropriated for the salaries and expenses of the Customs Service that  
   are incurred in noncommercial operations not to exceed the following:   
    (A) $516,217,000 for fiscal year 1991.                                 

    (B) $542,091,000 for fiscal year 1992.                                 


    (A) $886,513,000 for fiscal year 2002.                                 

    (B) $909,471,000 for fiscal year 2003.                                 


       (2) For commercial operations.--(A) There are authorized to be      
   appropriated for the salaries and expenses of the Customs Service that  
   are incurred in commercial operations not less than the following:      
    (i) $672,021,000 for fiscal year 1991.                                 

    (ii) $705,793,000 for fiscal year 1992.                                


    (i) $1,603,482,000 for fiscal year 2002.                               

    (ii) $1,645,009,000 for fiscal year 2003.                              


         * * * * * * *                                                           

       (3) For air interdiction.--There are authorized to be appropriated  
   for the operation (including salaries and expenses) and maintenance of  
   the air interdiction program of the Customs Service not to exceed the   
   following:                                                              
    (A) $143,047,000 for fiscal year 1991.                                 

    (B) $150,199,000 for fiscal year 1992.                                 


    (A) $181,860,000 for fiscal year 2002.                                 

    (B) $186,570,000 for fiscal year 2003.                                 


                                                                                 

                          SECTION 5 OF THE ACT OF FEBRUARY 13, 1911               

                         AN ACT To diminish the expense of proceedings on appeal and
            writ of error or of certiorari                                          
          SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.                  

   (a)  Overtime Pay.--                                                   

       (1) In general.--Subject to paragraph (2) and subsection (c), a     
   customs officer who is officially assigned to perform work in excess of 
   40 hours in the administrative workweek of the officer or in excess of 8
   hours in a day shall be compensated for that work at an hourly rate of  
   pay that is equal to 2 times the hourly rate of the basic pay of the    
   officer. Overtime pay provided under this subsection shall not be paid  
   to any customs officer unless such officer actually performed work      
   during the time corresponding to such overtime pay. The preceding       
   sentence shall not apply with respect to the payment of an award or     
   settlement to a customs officer who was unable to perform overtime work 
   as a result of a personnel action in violation of section 5596 of title 
   5, United States Code, section 6(d) of the Fair Labor Standards Act of  
   1938, or title VII of the Civil Rights Act of 1964. For purposes of this
   paragraph, the hourly rate of basic pay for a customs officer does not  
   include any premium pay provided for under subsection (b).              
         * * * * * * *                                                           

   (b)  Premium Pay for Customs Officers.--                               

    (1)  Night work differential.--                                        

       (A) 3 p.m. to midnight shiftwork.--If the majority of the hours of  
   regularly scheduled work of a customs officer occurs during the period  
   beginning at 3 p.m. and ending at 12 a.m., the officer is entitled to   
   pay for work during such period (except for work to which paragraph (2) 
   or (3) applies) at the officer's hourly rate of basic pay plus premium  
   pay amounting to 15 percent of that basic rate.                         
       (B) 11 p.m. to 8 a.m. shiftwork.--If the majority of the hours of   
   regularly scheduled work of a customs officer occurs during the period  
   beginning at 11 p.m. and ending at 8 a.m., the officer is entitled to   
   pay for work during such period (except for work to which paragraph (2) 
   or (3) applies) at the officer's hourly rate of basic pay plus premium  
   pay amounting to 20 percent of that basic rate.                         
       (C) 7:30 p.m. to 3:30 a.m. shiftwork.--If the regularly scheduled   
   work assignment of a customs officer is 7:30 p.m. to 3:30 a.m., the     
   officer is entitled to pay for work during such period (except for work 
   to which paragraph (2) or (3) applies) at the officer's hourly rate of  
   basic pay plus premium pay amounting to 15 percent of that basic rate   
   for the period from 7:30 p.m. to 11:30 p.m. and at the officer's hourly 
   rate of basic pay plus premium pay amounting to 20 percent of that basic
   rate for the period from 11:30 p.m. to 3:30 a.m.                        

    (1)  Night work differential.--                                        

       (A) 5 p.m. to midnight.--(i) If any hours of regularly scheduled    
   work of a customs officer occur during the hours                        

                    of 5 p.m. and 12 a.m., the officer is entitled to pay for such
          hours of work (except for work to which paragraph (2) or (3) applies) at
          the officer's hourly rate of basic pay plus premium pay amounting to not
          less than 18 percent of that basic rate.                                
       (ii) If the regularly scheduled work of a customs officer is 4 p.m. 
   to 12:00 a.m., the officer is entitled to pay for work during such      
   period (except for work to which paragraph (2) or (3) applies) at the   
   officer's hourly rate of basic pay plus premium pay amounting to not    
   less than 18 percent of that basic rate.                                
       (B) Midnight to 6 a.m.--(i) If any hours of regularly scheduled work
   of a customs officer occur during the hours of 12 a.m. and 6 a.m., the  
   officer is entitled to pay for such hours of work (except for work to   
   which paragraph (2) or (3) applies) at the officer's hourly rate of     
   basic pay plus premium pay amounting to 25 percent of that basic rate.  
       (ii) If the regularly scheduled work of a customs officer is 12 a.m.
   to 8:00 a.m., the officer is entitled to pay for work during such period
   (except for work to which paragraph (2) or (3) applies) at the officer's
   hourly rate of basic pay plus premium pay amounting to 25 percent of    
   that basic rate.                                                        

         * * * * * * *                                                           

       (4) Treatment of premium pay.--Premium pay provided for under this  
   subsection may not be treated as being overtime pay or compensation for 
   any purpose. Premium pay provided under this subsection shall not be    
   paid to any customs officer unless such officer actually performed work 
   during the time corresponding to such premium pay. The preceding        
   sentence shall not apply with respect to the payment of an award or     
   settlement to a customs officer who was unable to perform work during   
   the time described in the preceding sentence as a result of a personnel 
   action in violation of section 5596 of title 5, United States Code,     
   section 6(d) of the Fair Labor Standards Act of 1938, or title VII of   
   the Civil Rights Act of 1964.                                           
   (c)  Limitations.--                                                    

       (1) Fiscal year cap.--The aggregate of overtime pay under subsection
   (a) (including commuting compensation under subsection (a)(2)(B)) and   
   premium pay under subsection (b) that a customs officer may be paid in  
   any fiscal year may not exceed $25,000; except that the Commissioner of 
   Customs or his designee may waive this limitation in individual cases in
   order to prevent excessive costs or to meet emergency requirements of   
   the Customs Service.                                                    

       (1) Fiscal year cap.--The aggregate of overtime pay under subsection
   (a) (including commuting compensation under subsection (a)(2)(B)) that a
   customs officer may be paid in any fiscal year may not exceed $30,000,  
   except that--                                                           
       (A) the Commissioner of Customs or his or her designee may waive    
   this limitation in individual cases in order to prevent excessive costs 
   or to meet emergency requirements of the Customs Service; and           
       (B) upon certification by the Commissioner of Customs to the        
   Chairmen of the Committee on Ways and Means of the House of             
   Representatives and the Committee on Finance of the Senate that the     
   Customs Service has in operation a system that provides accurate and    
   reliable data on a daily basis on overtime and premium pay that is being
   paid to customs officers, the Commissioner is authorized to pay any     
   customs officer for one work assignment that would result in the        
   overtime pay of that officer exceeding the $30,000 limitation imposed by
   this paragraph, in addition to any overtime pay that may be received    
   pursuant to a waiver under subparagraph (A).                            
         * * * * * * *                                                           

   (e)  Use of Savings From Payment of Premium Pay.--                     

       (1) Use of amounts.--For fiscal year 2002, the Secretary of the     
   Treasury--                                                              
       (A) shall determine under paragraph (2) the amount of savings from  
   the payment of premium pay to customs officers; and                     
       (B) shall use an amount from the Customs User Fee Account equal to  
   such amount determined under paragraph (2) for additional premium pay   
   described in clauses (i) and (ii) of subsection (b)(1)(A).              
       (2) Determination of savings amount.--The Secretary shall calculate 
   an amount equal to the difference between--                             
       (A) the estimated cost for premium pay that would have been incurred
   during fiscal year 2002 if this section, as in effect on the day before 
   the date of the enactment of section 123 of the Customs Border Security 
   Act of 2001, had governed such costs; and                               
       (B) the actual cost for premium pay that is incurred during fiscal  
   year 2002 under this section, as amended by section 123 of the Customs  
   Border Security Act of 2001.                                            

   (e)  (f)   Definitions.--As used in this section:                      

    (1) * * *                                                              

         * * * * * * *                                                           

                                                                                 

                  SECTION 3061 OF THE REVISED STATUTES OF THE UNITED STATES       

     Sec. 3061. (a) Any of the officers or persons authorized to board or 
  search vessels may stop, search, and examine, as well without as within 
  their respective districts, any vehicle, beast, or person, on which or  
  whom he or they shall suspect there is merchandise which is subject to  
  duty, or shall have been introduced into the United States in any manner
  contrary to law, whether by the person in possession or charge, or by,  
  in, or upon such vehicle or beast, or otherwise, and to search any trunk
  or envelope, wherever found, in which he may have a reasonable cause to 
  suspect there is merchandise which was imported contrary to law; and if 
  any such officer or other person so authorized shall find any           
  merchandise on or about any such vehicle, beast, or person, or in any   

                    such trunk or envelope, which he shall have reasonable cause  
          to believe is subject to duty, or to have been unlawfully introduced    
          into the United States, whether by the person in possession or charge,  
          or by, in, or upon such vehicle, beast, or otherwise, he shall seize and
          secure the same for trial.                                              
     (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.                                     
                                                                                 

                                     TARIFF ACT OF 1930                           

         * * * * * * *                                                           

          TITLE III--SPECIAL PROVISIONS                                           

         * * * * * * *                                                           

                          PART II--UNITED STATES TARIFF COMMISSION                

         * * * * * * *                                                           

          SEC. 318. EMERGENCIES.                                                  

     (a) Whenever the President shall by proclamation declare an emergency
  to exist by reason of a state of war, or otherwise, he may authorize the
  Secretary of the Treasury to extend during the continuance of such      
  emergency the time herein prescribed for the performance of any act, and
  may authorize the Secretary of the Treasury to permit, under such       
  regulations as the Secretary of the Treasury may prescribe, the         
  importation free of duty of food, clothing, and medical, surgical, and  
  other supplies for use in emergency relief work. The Secretary of the   
  Treasury shall report to the Congress any action taken under the        
  provisions of this section.                                             

     (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. 330. ORGANIZATION OF THE COMMISSION.                               

   (a) * * *                                                              

         * * * * * * *                                                           

   (e)  Authorization of Appropriations.--(1) * * *                       

     (2)(A) There are authorized to be appropriated to the Commission for 
  necessary expenses (including the rental of conference rooms in the     
  District of Columbia and elsewhere) not to exceed the following:        
    (i) $41,170,000 for fiscal year 1991.                                  

    (ii) $44,052,000 for fiscal year 1992.                                 


    (i) $51,400,000 for fiscal year 2002.                                  

    (ii) $53,400,000 for fiscal year 2003.                                 

         * * * * * * *                                                           

     (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.                

         * * * * * * *                                                           

          TITLE IV--ADMINISTRATIVE PROVISIONS                                     

                 PART I--DEFINITIONS AND NATIONAL CUSTOMS AUTOMATION PROGRAM      

                                   SUBPART A--DEFINITIONS                         

         * * * * * * *                                                           

          SEC. 401. MISCELLANEOUS.                                                

   When used in this title or in Part I of Title III--                    

   (a) * * *                                                              

         * * * * * * *                                                           

     (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.                                                               
         * * * * * * *                                                           

                PART II--REPORT, ENTRY, AND UNLADING OF VESSELS AND VEHICLES      

          SEC. 431. MANIFEST--REQUIREMENT, FORM, AND CONTENTS.                    

   (a) * * *                                                              

     (b) Production of Manifest.-- (1) Any manifest required by the       
  Customs Service shall be signed, produced, delivered or electronically  
  transmitted by the master or person in charge of the                    

                    vessel, aircraft, or vehicle, or by any other authorized agent
          of the owner or operator of the vessel, aircraft, or vehicle in         
          accordance with the requirements prescribed under subsection (d). A     
          manifest may be supplemented by bill of lading data supplied by the     
          issuer of such bill. If any irregularity of omission or commission      
          occurs in any way in respect to any manifest or bill of lading data, the
          owner or operator of the vessel, aircraft or vehicle, or any party      
          responsible for such irregularity, shall be liable for any fine or      
          penalty prescribed by law with respect to such irregularity. The Customs
          Service may take appropriate action against any of the parties.         
     (2) In addition to any other requirement under this section, for each
  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 cargo       
  manifest information in advance of such entry or clearance 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.                                                          
         * * * * * * *                                                           

   (d)  Regulations.--                                                    

    (1)  In general.--The Secretary shall by regulation--                  

       (A) specify the form for, and the information and data that must be 
   contained in, the manifest required by subsection (a) or subsection     
   (b)(2) ;                                                                
         * * * * * * *                                                           

       (C) prescribe the manner of production for, and the delivery or     
   electronic transmittal of the manifest required by subsection (a) or    
   subsection (b)(2) ; and                                                 
         * * * * * * *                                                           


                    SEC. 432. PASSENGER AND CREW MANIFEST 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 manifest 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),   
  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, as     
   applicable;                                                             
    (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.                                                                

         * * * * * * *                                                           

          SEC. 509. EXAMINATION OF BOOKS AND WITNESSES.                           

   (a) * * *                                                              

   (b)  Regulatory Audit Procedures.--                                    

    (1) * * *                                                              

         * * * * * * *                                                           


       (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.                      
         * * * * * * *                                                           

          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 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.).                           
       (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.                                                                

         * * * * * * *                                                           

                                                                                 

                            SECTION 141 OF THE TRADE ACT OF 1974                  

          SEC. 141. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE.             

   (a) * * *                                                              

         * * * * * * *                                                           

     (g)(1)(A) There are authorized to be appropriated to the Office for  
  the purposes of carrying out its functions not to exceed the following: 
    (i) $23,250,000 for fiscal year 1991.                                  

    (ii) $21,077,000 for fiscal year 1992.                                 


    (i) $30,000,000 for fiscal year 2002.                                  

    (ii) $31,000,000 for fiscal year 2003.                                 


     (B) Of the amounts authorized to be appropriated under subparagraph  
  (A) for any fiscal year--                                               
       (i) not to exceed $98,000 may be used for entertainment and         
   representation expenses of the Office; and                              
       (ii) not to exceed $2,050,000 may be used to pay the United States  
   share of the expenses of binational panels and extraordinary challenge  
   committees convened pursuant to chapter 19 of the United States-Canada  
   Free-Trade Agreement; and                                               
       (iii) (ii) not to exceed $1,000,000 shall remain available until    
   expended.                                                               
         * * * * * * *                                                           

     (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.                                                              
                                                                                 

                       HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES            

         * * * * * * *                                                           

                        CHAPTER 98--SPECIAL CLASSIFICATION PROVISIONS             

         * * * * * * *                                                           

                SUBCHAPTER IV--PERSONAL EXEMPTIONS EXTENDED TO RESIDENTS AND      
                                  NONRESIDENTS                                    
         * * * * * * *                                                           


                                                                                                                                                                                                                                                                                                                                                            

Heading/Subheading                                                                                                                                                    Article Description                                                                                                                                                 Rates of Duty     

                                                                                                                                                                                                                                                                                                                                                 1             2       

                                                                                                                                                                                                                                                                                                                                    General     Special      

9804.00.65         lArticles, accompanying a person, not over $400  $800  in aggregate fair retail value in the country of acquisition, including (but only in the case of an individual who has attained the age of 21) not more than 1 liter of alcoholic beverages and including not more than 200 cigarettes and 100 cigars                 Free         Free                 
    * * * * * * *      


                                    VII. DISSENTING VIEWS                         

   We reluctantly express our opposition to H.R. 3129.                     

      In the aftermath of September 11th, we had hoped that Democrats and  
   Republicans could work together to produce a Customs authorization bill 
   that provides Customs with the tools necessary to protect our borders,  
   and that shows support for the men and women performing that function.  
   Regrettably, Republicans on the Committee did not share this view. With 
   respect to providing Customs with the appropriate tools, this bill is   
   based on the Customs' budget request and House Appropriations bill, both
   of which pre-date September 11th. Moreover, the Majority includes in    
   this bill the same authorization priorities included in the bill they   
   drafted three years ago. Authorizations for equipment were not updated  
   to reflect needs that have clearly presented themselves in recent weeks.
   In fact, rather than bolstering Customs' efforts to combat terrorism,   
   one element of the bill will undermine it by penalizing one-third of the
   Customs inspector workforce.                                            
      Section 123 of this bill amends existing law governing the payment of
   night shift differential pay for Customs inspectors. According to       
   Customs officials' testimony before the Committee, over 2,000           
   hardworking men and women will lose money under the Majority's proposal.
   The Majority does not offer any legitimate justification for making the 
   proposed changes. They do not contend that Customs inspectors are       
   overpaid. They do not contend that there is abuse in the existing       
   system. The Majority, in fact, offers no explanation for the change     
   other than they disagree with what hours qualify for premium pay. In a  
   vacuum, that rationale might be sufficient. But in the real world, where
   a change such as the one the Majority is proposing will result in real  
   people losing real money, that rationale is insufficient, particularly  
   when the people affected are the very ones that serve as our front line 
   of defense against terrorism.                                           
      The existing provision governing night shift differential pay takes a
   balanced approach toward compensating Customs officers for working odd  
   hour shifts. The current law governing night shift differential pay was 
   passed by Congress in 1993, as part of a comprehensive package of       
   Customs compensation reforms, the Customs Officers' Pay Reform          
   Amendments (``COPRA''), (P.L. 103 66, 107 Stat. 670). The purpose of the
   reforms was to rationalize the method of paying Customs officers for    
   overtime, while also ensuring that Customs officers received pay        
   commensurate with the important work they perform. To achieve this      
   balance, Congress, on a bipartisan basis, altered Customs officers'     
   entire compensation structure, including the amendment to the hours     
   eligible for and the wage rate applied to night shift differential pay. 
   By considering and amending compensation on an aggregate basis, Congress
   ensured that the correction of certain payment abuses did not result in 
   Customs officers receiving an unwarranted cut in pay.                   
   On night shift differential pay, the 1993 reforms provided that         

       --if a majority of hours worked by a Customs officer in a shift fell
   between 3 p.m. and midnight, all hours in the shift were paid at the    
   hourly rate + 15%;                                                      
       --if a majority of hours worked by a Customs officer in a shift fell
   between 11 p.m. and 8 a.m., all hours in the shift were paid at the     
   hourly rate + 20%;                                                      
       --however, if a majority of the hours worked by a Customs officer in
   a shift did not fall within the 3 p.m. to 8 a.m. period, the employee   
   was paid at the hourly rate only.                                       
      The purpose of this premium is to compensate Customs officers for    
   working shifts that begin or end outside a normal work day (i.e., 3 p.m.
   to 11 p.m., midnight to 8 a.m.). As stated in the 1993 Committee report,
   the Committee found that these odd hour shifts, which were assigned by  
   management (and not the employee), had ``an adverse impact on the       
   quality of life of Customs officials who are required to work regularly 
   scheduled shifts at night or on Sundays and holidays.'' H. Rep. No. 103 
   11, at 573, 574 (May 25, 1993). Recognizing this problem, the Committee 
   amended the hours eligible for and the wage rate applied to the night   
   shift differential specifically to provide for ``shift differential     
   compensation at levels substantially greater than applied generally to  
   other Federal employees for such regularly scheduled work.'' H. Rep. No.
   103 11, at 573, 574 (May 25, 1993).                                     
      Section 123 of the bill alters the balanced approach crafted in 1993 
   in two ways. First, the provision restricts the hours that qualify for  
   the night shift differential to hours between 5 p.m. and 6 a.m. Second, 
   the provision compensates Customs officers at the differential rate only
   for those hours that occur between 5 p.m. and 6 a.m. (with two limited  
   exceptions), and not the entire shift. These changes will mean that a   
   Grade 9 Customs officer who works a shift starting at 3 a.m. and ending 
   at 11 a.m. will receive the shift differential for only 3 hours of that 
   shift, resulting in a loss to that Customs officer of $75 per week.     
      The shifts most adversely affected under the Majority's proposal     
   include four heavily worked shifts at major airports. At New York's JFK 
   airport, for example, there are 200 inspectors who work the 1 p.m. 9    
   p.m. shift. Sixty-six of those inspectors are grade 9 (earning a base   
   pay of $37,000 $49,000), and would lose $2,220 per year under the       
   Majority's proposal.                                                    
      To offset some of the loss in pay likely to occur, section 121 of the
   bill adjusts the overtime cap that, under current law, restricts the    
   amount of overtime pay a Customs officer may earn in one year. In       
   effect, this adjustment would allow Customs officers to work more       
   overtime to compensate for lost wages, or put another way, Customs      
   officers will have to work more to get the same pay. Such a result is   
   unfair. It is not even clear that it will be possible for the officers  
   whose pay is reduced to work the additional hours to make up for the    
   loss in pay. Moreover, only a small percentage of officers currently    
   reach the overtime cap, and therefore would even benefit from the new   
   provision.                                                              
      We are not opposed to considering amendments to Customs officers pay,
   if a credible study evaluates and recommends that legislative changes be
   made. We have indicated that we would support a study, as the Majority  
   has decided to do on two other Customs employee issues. However, we are 
   opposed to cutting someone's wages because a few Members of this        
   Committee                                                               

                    are fixated on nomenclature (``night pay'') rather than the   
          practical realities of the total Customs pay package. The men and women 
          of the U.S. Customs Service perform vital functions with respect to both
          law enforcement--serving as a primary defense against terrorism--and    
          preserving the integrity of U.S. trade with foreign nations. Their      
          current compensation structure was designed to take account of the      
          unusual stresses of their job--both the on-the-job safety risks and the 
          irregular hours. Those aspects of a Customs officer's job have only     
          become more acute since September 11. Now is not the time to            
          unilaterally cut these officers' pay, which is precisely what the       
          Customs Service stated that H.R. 3129 will do to one third of these     
          inspectors.                                                             
      In addition, we have serious concerns about two other provisions in  
   the bill. Section 141 would provide any officer conducting a personal   
   search at a border immunity from civil damages if the officer performed 
   the search in ``good faith.'' Section 144 would allow the U.S. Customs  
   Service to open outbound international mail without a warrant.          
                             Personal Search                             

      Section 141 is characterized as a ``procedural'' device to allow     
   civil cases against individual customs agents to be dismissed in the    
   early stages of litigation concerning their official duties. However, a 
   plain reading of Section 141 evidences an intent to carve out a broader 
   standard of immunity than that existing under current law. The existing 
   doctrine of qualified immunity shields public officials performing      
   discretionary functions from civil damages if their conduct does not    
   violate clearly established statutory or constitutional rights of which 
   a reasonable person should have known. The Supreme Court has repeatedly 
   held that the objective reasonableness of an officer's behavior, not a  
   subjective ``good faith'' standard, is the proper test for liability.   
   This provision could weaken protections against racial profiling and    
   other illegal and unconstitutional searches by the Customs Service.     
   Despite the Administration's stated intent, section 141 appears to be a 
   substantive, and not a procedural change.                               
      Civil lawsuits against government officials and agencies are an      
   important deterrent to racial profiling and unconstitutional and        
   unlawful searches. Without the possibility of a lawsuit, individuals who
   have been treated in an unconstitutional manner by a government agency  
   would have no redress, and the government agents would have less        
   incentive to comply with the Constitution. Providing Customs officers   
   with expanded immunity is not likely to have any impact on decreasing   
   terrorism, but it will increase the likelihood that innocent passengers 
   will have their constitutional rights violated.                         
                              Outbound Mail                              

      Under current law, the Customs Service is empowered to search,       
   without a warrant, inbound mail handled by the United States Postal     
   Service and packages and letters handled by private carriers such as    
   Federal Express and the United Parcel Service. This ``border exception''
   to the Fourth Amendment derives from the traditional authority of the   
   sovereign to protect its borders against inbound contraband and to      
   collect duties on inbound freight.                                      
      Section 144 would allow Customs officials to open ``sealed'' mail    
   with ``reasonable cause,'' a lower standard than probable cause, and    
   would eliminate the need for judicial review. Moreover, section 144     
   would allow Customs officials to open ``unsealed'' mail, and any mail   
   bearing a Customs declaration for no cause whatsoever. People in the    
   United States have an expectation of privacy in the mail they send to   
   friends, family, or business associates abroad. The Customs Service's   
   interest in confiscating illegal weapons' shipments, drugs or other     
   contraband is adequately protected by its ability to secure a search    
   warrant when it has probable cause. Short of an emergency, postal       
   officials can always hold a package while they wait for a court to issue
   a warrant.                                                              
      We are not opposed per se to the policy underlying these amendments. 
   For example, on the good faith immunity provision we did seek language  
   prior to the mark-up that might clarify what was meant by ``good        
   faith.'' The change we sought would have made the provision procedural, 
   rather than substantive. Our suggestion was not incorporated into the   
   bill, however. We hope that the courts will incorporate the definition  
   of ``good faith'' included in the Committee report, as the              
   Administration has assured the Committee. Notwithstanding, we remain    
   concerned, and absent clarification and more information as to why these
   provisions are necessary, we believe the current language is unnecessary
   and potentially damaging to constitutional rights.                      

     Charles B. Rangel.                                                     

     Xavier Becerra.                                                        

     Jerry Kleczka.                                                         

     Pete Stark.                                                            

     Lloyd Doggett.                                                         

     Richard E. Neal.                                                       

     Sander Levin.                                                          

     Jim McDermott.                                                         

     Robert T. Matsui.                                                      

     William J. Coyne.                                                      

     John Lewis.                                                            

     Earl Pomeroy.                                                          


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