Text: S.3658 — 109th Congress (2005-2006)All Information (Except Text)

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Introduced in Senate (07/13/2006)


109th CONGRESS
2d Session
S. 3658


To reauthorize customs and trade functions and programs in order to facilitate legitimate international trade with the United States, and for other purposes.


IN THE SENATE OF THE UNITED STATES

July 13, 2006

Mr. Grassley (for himself and Mr. Baucus) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To reauthorize customs and trade functions and programs in order to facilitate legitimate international trade with the United States, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title; table of contents.

(a) Short title.—This Act may be cited as the “Customs and Trade Facilitation Reauthorization Act of 2006”.

(b) Table of contents.—The table of contents for this Act is as follows:


Sec. 1. Short title; table of contents.

Sec. 101. Establishment of Bureau; Commissioner.

Sec. 102. Officer and employees.

Sec. 103. Separate budget for Bureaus.

Sec. 104. Revolving fund.

Sec. 105. Authorization of appropriations.

Sec. 106. Advances in foreign countries.

Sec. 107. Advances for enforcement of customs provisions.

Sec. 108. Certification of reason for advance.

Sec. 109. Payments in foreign countries; claims for reimbursement.

Sec. 110. Undercover investigative operations.

Sec. 111. Customs administration.

Sec. 112. Annual national trade and customs law violation estimates and enforcement strategy.

Sec. 113. Conforming amendment.

Sec. 121. Establishment of Bureau.

Sec. 201. Definitions.

Sec. 211. Bilateral customs partnerships.

Sec. 212. Multilateral customs negotiations.

Sec. 221. International trade data system.

Sec. 222. Authorization of appropriations.

Sec. 231. Establishment of a voluntary customs industry partnership program.

Sec. 232. Trade resumption plan.

Sec. 233. Automated Targeting System.

Sec. 234. Drawback for exported merchandise.

Sec. 235. Final authority over matters relating to customs brokers.

Sec. 236. Advisory Committee.

Sec. 237. Study and report.

Sec. 241. Staffing for commercial operations and revenue functions of the Bureau of Customs and Border Protection.

Sec. 301. Authorization of appropriations for United States International Trade Commission.

Sec. 302. Authorization of appropriations for the Office of the United States Trade Representative.

Sec. 401. Methamphetamine and methamphetamine precursor chemicals.

Sec. 402. United States port and terminal operator competitiveness.

Sec. 403. Charter flights.

Sec. 404. Technical amendments to customs modernization.

Sec. 405. Articles repaired or altered.

SEC. 101. Establishment of Bureau; Commissioner.

The first section of the Act of March 3, 1927 (44 Stat. 1381, chapter 348; 19 U.S.C. 2071), is amended to read as follows:

“SECTION 1. Establishment of Bureau; Commissioner.

“(a) Establishment of Bureau.—There shall be in the Department of Homeland Security a bureau to be known as the Bureau of Customs and Border Protection, and a Commissioner of Customs. The Commissioner of Customs, who shall be appointed by the President by and with the advice and consent of the Senate, shall—

“(1) be at the head of the Bureau of Customs and Border Protection;

“(2) carry out the duties and powers prescribed by the Secretary of Homeland Security and by law; and

“(3) report directly to the Deputy Secretary of Homeland Security.

“(b) Compensation.—The Commissioner of Customs, Department of Homeland Security, shall be compensated at the rate of pay for level III of the Executive Schedule in section 5314 of title 5, United States Code.”.

SEC. 102. Officer and employees.

Section 2 of the Act of March 3, 1927 (44 Stat. 1381, chapter 348; 19 U.S.C. 2072), is amended to read as follows:

“SEC. 2. Officers and employees of Bureau.

“(a) Deputy commissioner and other officers.—The Secretary of Homeland Security is authorized to appoint, in the Bureau established by section 1, one deputy commissioner, and such other officers as are necessary to manage the individual offices within the Bureau. Appointments under this subsection shall be subject to the provisions of the civil service laws, and the salaries shall be fixed in accordance with chapter 51 and subchapter III of chapter 53 of title 5, United States Code.

“(b) Absence or disability of Commissioner.—The Secretary of Homeland Security is authorized to designate an officer of the Bureau of Customs and Border Protection as Commissioner of Customs, during the absence or disability of the Commissioner of Customs, or in the event that there is no Commissioner of Customs.

“(c) Duties of personnel.—The personnel of the Bureau of Customs and Border Protection shall perform any customs revenue function delegated by the Secretary of the Treasury to the Secretary of Homeland Security pursuant to section 412 of the Homeland Security Act of 2002 (6 U.S.C. 212), other than the conduct of a commercial investigation in connection with such delegated function, and such other duties as the Secretary of Homeland Security may prescribe or are prescribed by law.”.

SEC. 103. Separate budget for Bureaus.

(a) In general.—The President shall include in each budget transmitted to Congress under section 1105 of title 31, United States Code, a separate budget request for the Bureau of Customs and Border Protection and a separate budget request for the Bureau of Immigration and Customs Enforcement.

(b) Repeal.—Section 414 of the Homeland Security Act of 2002 (6 U.S.C. 214) is hereby repealed.

SEC. 104. Revolving fund.

The matter under the heading “revolving fund, bureau of customs” in the Treasury and Post Office Departments Appropriations Act, 1950 (63 Stat. 360; 19 U.S.C. 2074) (as amended by Treasury Department Order No. 165–23, effective August 1, 1973), is amended by striking “United States Customs Service” and inserting “Bureau of Customs and Border Protection”.

SEC. 105. Authorization of appropriations.

(a) In general.—Section 301 of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075) is amended to read as follows:

“SEC. 301. Appropriations authorization.

“(a) In general.—For the fiscal year beginning October 1, 2006, and each fiscal year thereafter, there are authorized to be appropriated to the Department of Homeland Security for the Bureau of Customs and Border Protection only such sums as may hereafter be authorized by law.

“(b) Merchandise processing fee.—The monies authorized to be appropriated pursuant to subsection (a) for any fiscal year, except for such sums as may be necessary for the salaries and expenses of the Bureau of Customs and Border Protection that are incurred in connection with the processing of merchandise that is exempt from the fees imposed pursuant to section 13031(a) (9) and (10) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a) (9) and (10)) shall be appropriated from the Customs User Fee Account.

“(c) Mandatory 10-day deferment.—No part of the funds appropriated under subsection (a) for any fiscal year may be used to provide less time for the collection of estimated duties than the 10-day deferment procedure in effect on January 1, 1981.

“(d) Overtime pay limitations; waiver.—No part of the funds appropriated pursuant to subsection (a) for any fiscal year may be used for administrative expenses to pay any employee of the Bureau of Customs and Border Protection overtime pay in an amount exceeding $35,000 unless the Secretary of Homeland Security, or the designee of the Secretary, determines on an individual basis that payment of overtime pay to such employee in an amount exceeding $35,000 is necessary for national security purposes, to prevent excessive costs, or to meet emergency requirements of the Bureau.

“(e) Pay comparability authorization.—For the fiscal year beginning October 1, 2006, and for each fiscal year thereafter, there are authorized to be appropriated to the Department of Homeland Security for salaries of the Bureau of Customs and Border Protection such additional sums as may be provided by law to reflect pay rate changes made in accordance with the Federal Pay Comparability Act of 1970 (84 Stat. 1946, Public Law 91–656).

“(f) Use of savings resulting from administrative consolidations.—If savings in salaries and expenses result from the consolidation of administrative functions within the Bureau of Customs and Border Protection, the Commissioner of Customs shall apply the savings, to the extent the savings are not needed to meet emergency requirements of the Bureau, to strengthening the commercial operations of the Bureau by increasing the number of inspectors, import specialists, auditors, and other line operational positions.

“(g) Allocation of resources; report to congressional committees.—The Commissioner of Customs shall notify the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives at least 180 days prior to taking any action that would—

“(1) result in any significant reduction in force of employees of the Bureau of Customs and Border Protection other than by means of attrition;

“(2) result in any significant reduction in hours of operation or services rendered at any office of the Bureau of Customs and Border Protection or any port of entry;

“(3) eliminate or relocate any office of the Bureau of Customs and Border Protection;

“(4) eliminate any port of entry; or

“(5) significantly reduce the number of employees assigned to any office or any function of the Bureau of Customs and Border Protection.”.

(b) Conforming amendments.—

(1) IN GENERAL.—Section 5(c) of the Act of February 13, 1911 (19 U.S.C. 267(c)), is amended to read as follows:

“(c) Limitations.—

“(1) FISCAL YEAR CAP.—The aggregate of overtime pay under subsection (a) of this section (including commuting compensation under subsection (a)(2)(B) of this section) and premium pay under subsection (b) of this section that an employee of the Bureau of Customs and Border Protection may be paid in any fiscal year may not exceed $35,000 unless the Secretary of Homeland Security, or the designee of the Secretary, determines on an individual basis that payment of overtime pay to such employee in an amount exceeding $35,000 is necessary for national security purposes, to prevent excessive costs, or to meet emergency requirements of the Bureau.

“(2) EXCLUSIVITY OF PAY UNDER THIS SECTION.—An employee of the Bureau of Customs and Border Protection who receives overtime pay under subsection (a) of this section or premium pay under subsection (b) of this section for time worked may not receive pay or other compensation for that work under any other provision of law.”.

(2) BASIC PAY.—Section 8331(3)(G) of title 5, United States Code, is amended—

(A) by striking “a customs officer” and inserting “employee of the Bureau of Customs and Border Protection”; and

(B) by striking “customs officers” and inserting “such employees”.

SEC. 106. Advances in foreign countries.

The first section of the Act of May 6, 1930 (53 Stat. 660, chapter 115; 19 U.S.C. 2076), is amended by striking “United States Customs Service” and inserting “Bureau of Customs and Border Protection or the Bureau of Immigration and Customs Enforcement”.

SEC. 107. Advances for enforcement of customs provisions.

Section 2 of the Act of August 7, 1939 (53 Stat. 1263, chapter 566; 19 U.S.C. 2077), is amended to read as follows:

“SEC. 2. Advances for enforcement of customs provisions.

“The Commissioner of Customs and the Director of Immigration and Customs Enforcement, with the approval of the Secretary of Homeland Security and the Secretary of the Treasury, are each authorized to direct the advance of funds by the Fiscal Service in the Department of the Treasury, in connection with the enforcement of the customs laws.”.

SEC. 108. Certification of reason for advance.

Section 3 of the Act of August 7, 1939 (53 Stat. 1263, chapter 566; 19 U.S.C. 2078), is amended by striking “Commissioner of Customs” and inserting “Commissioner of Customs or the Director of Immigration and Customs Enforcement”.

SEC. 109. Payments in foreign countries; claims for reimbursement.

Section 4 of the Act of August 7, 1939 (53 Stat. 1263, chapter 566; 19 U.S.C. 2079), is amended to read as follows:

“SEC. 4. Payments in foreign countries; claims for reimbursement.

“The provisions of this Act shall not affect payments made for the Bureau of Customs and Border Protection or the Bureau of Immigration and Customs Enforcement in foreign countries, nor the right of any officer or employee of such bureaus to claim reimbursement for personal funds expended in connection with the enforcement of the customs laws.”.

SEC. 110. Undercover investigative operations.

Section 3131 of the Customs Enforcement Act of 1986 (19 U.S.C. 2081) is amended to read as follows:

“SEC. 3131. Undercover investigative operations of the Bureau of Immigration and Customs Enforcement.

“(a) Certification required for exemption of undercover operations from certain laws.—With respect to any undercover investigative operation of the Bureau of Immigration and Customs Enforcement (in this section referred to as the ‘Bureau’) that is necessary for the detection and prosecution of offenses against the United States that are within the jurisdiction of the Secretary of Homeland Security—

“(1) sums authorized to be appropriated may be used—

“(A) to purchase property, buildings, and other facilities, and to lease space, within the United States, the District of Columbia, and the territories and possessions of the United States without regard to—

“(i) sections 1341 and 3324 of title 31, United States Code;

“(ii) sections 3732(a) and 3741 of the Revised Statutes of the United States (41 U.S.C. 11(a) and 22);

“(iii) section 305 of the Act of June 30, 1949 (63 Stat. 396; 41 U.S.C. 255);

“(iv) section 8141 of title 40, United States Code; and

“(v) section 304(a) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 254(a)); and

“(B) to establish or to acquire proprietary corporations or business entities as part of the undercover operation, and to operate such corporations or business entities on a commercial basis, without regard to sections 9102 and 9103 of title 31, United States Code;

“(2) sums authorized to be appropriated for the Bureau and the proceeds from the undercover operation, may be deposited in banks or other financial institutions without regard to the provisions of section 648 of title 18 and section 3302 of title 31, United States Code; and

“(3) the proceeds from the undercover operation may be used to offset necessary and reasonable expenses incurred in such operation without regard to the provision of section 3302 of title 31, United States Code;

only upon the written certification of the Director of the Bureau (or, if designated by the Director, such other officer within the Bureau) that any action authorized by paragraph (1), (2), or (3) of this subsection is necessary for the conduct of such undercover operation.

“(b) Liquidation of corporations and business entities.—If a corporation or business entity established or acquired as part of an undercover operation under subsection (a)(1)(B) of this section with a net value over $50,000 is to be liquidated, sold, or otherwise disposed of, the Bureau, as much in advance as the Director (or, if designated by the Director, such other officer within the Bureau) determines is practicable, shall report the circumstances to the Secretary of Homeland Security and the Secretary of the Treasury. The proceeds of the liquidation, sale, or other disposition, after obligations are met, shall be deposited in the Treasury of the United States as miscellaneous receipts.

“(c) Deposit of proceeds.—As soon as the proceeds from an undercover investigative operation with respect to which an action is authorized and carried out under paragraphs (2) and (3) of subsection (a) of this section are no longer necessary for the conduct of such operation, such proceeds or the balance of such proceeds remaining at the time shall be deposited into the Treasury of the United States as miscellaneous receipts.

“(d) Audits.—

“(1) IN GENERAL.—The Bureau shall—

“(A) conduct a detailed financial audit of each undercover investigative operation that is closed in each fiscal year, and—

“(B) submit the results of the audit in writing to the Secretary of Homeland Security and the Secretary of the Treasury; and

“(C) not later than 180 days after such undercover operation is closed, submit a report to the Congress concerning such audit.

“(2) REPORT.—The Bureau shall also submit a report annually to the Congress specifying as to its undercover investigative operations—

“(A) the number, by program, of undercover investigative operations pending at the end of the 1-year period for which such report is submitted;

“(B) the number, by program, of undercover investigative operations commenced in the 1-year period preceding the period for which such report is submitted; and

“(C) the number, by program, of undercover investigative operations closed in the 1-year period preceding the period for which such report is submitted and, with respect to each such closed undercover operation, the results obtained and any civil claims made with respect thereto.

“(e) Definitions.—For purposes of subsection (d), the following applies:

“(1) CLOSED.—The term ‘closed’ refers to the earliest point in time at which—

“(A) all criminal proceedings (other than appeals) are concluded; or

“(B) covert activities are concluded, whichever occurs later.

“(2) EMPLOYEES.—The term ‘employees’ means employees of the Bureau, as defined in section 2105 of title 5, United States Code.

“(3) UNDERCOVER INVESTIGATIVE OPERATION; UNDERCOVER OPERATION.—

“(A) IN GENERAL.—The terms ‘undercover investigative operation’ and ‘undercover operation’ mean any undercover investigative operation of the Bureau—

“(i) in which—

“(I) the gross receipts (excluding interest earned) exceed $50,000; or

“(II) expenditures (other than expenditures for salaries of employees) exceed $150,000; and

“(ii) which is exempt from section 3302 or 9102 of title 31, United States Code.

“(B) EXCEPTION.—Clauses (i) and (ii) of subparagraph (A) shall not apply with respect to the report required under paragraph (2) of subsection (d) of this section.”.

SEC. 111. Customs administration.

Section 113 of the Customs and Trade Act of 1990 (19 U.S.C. 2082) is amended to read as follows:

“SEC. 113. Customs Administration.

“(a) In general.—The Commissioner of Customs and the Director of Immigration and Customs Enforcement each shall—

“(1) develop and implement accounting systems that accurately determine and report the allocations made of the personnel and other resources of the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement among the various operational functions of each bureau, such as merchandise processing and trade and customs law enforcement; and

“(2) develop and implement periodic labor distribution surveys of major workforce activities within the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement to determine the costs of the various operational functions of each Bureau and the extent to which any such costs are being borne by the other bureau.

“(b) Survey reports.—The Commissioner of Customs and the Director of Immigration and Customs Enforcement each shall, not later than June 30, 2007, submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report on the results of the first surveys implemented under paragraph (2) of subsection (a).”.

SEC. 112. Annual national trade and customs law violation estimates and enforcement strategy.

Section 123 of the Customs and Trade Act of 1990 (19 U.S.C. 2083) is amended to read as follows:

“SEC. 123. Annual national trade and customs law violation estimates and enforcement strategy.

“(a) Violation estimates.—Not later than 30 days after the beginning of each fiscal year after fiscal year 2006, the Commissioner of Customs and the Director of Immigration and Customs Enforcement shall jointly submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives (in this section referred to as the ‘Committees’) a report that contains estimates of—

“(1) the aggregate number and extent of nonvoluntarily disclosed violations of the trade and customs laws listed under subsection (b) that are likely to occur during the fiscal year; and

“(2) the relative incidence of the violations estimated under paragraph (1) among the various ports of entry and customs regions within the customs territory of the United States.

“(b) Applicable statutory provisions.—The Commissioner of Customs and the Director of Immigration and Customs Enforcement, after consultation with the Committees—

“(1) shall, before the end of fiscal year 2007, prepare a list of those provisions of the trade and customs laws of the United States for which the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement have enforcement responsibilities and to which the reports required under subsection (a) of this section will apply; and

“(2) may from time to time amend the list developed under paragraph (1).

“(c) Enforcement strategy.—Within 90 days after submitting a report under subsection (a) of this section for any fiscal year, the Commissioner of Customs and the Director of Immigration and Customs Enforcement shall jointly—

“(1) develop a national uniform enforcement strategy for dealing, during that year, with the violations estimated in the report; and

“(2) submit to the Committees a report setting forth the details of the strategy.

“(d) Compliance program.—The Commissioner of Customs and the Director of Immigration and Customs Enforcement shall jointly—

“(1) devise and implement a methodology for estimating the level of compliance with the laws administered by the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement; and

“(2) include as an additional part of the report required to be submitted under subsection (a) of this section for each of fiscal years 2007, 2008, and 2009, an evaluation of the extent to which such compliance was obtained during the 12-month period preceding the 60th day before each such fiscal year.

“(e) Confidentiality.—The contents of any report submitted to the Committees under subsection (a) or (c)(2) of this section are confidential and disclosure of all or part of the contents is restricted to—

“(1) officers and employees of the United States designated by the Commissioner of Customs and the Director of Immigration and Customs Enforcement;

“(2) the chairman and ranking member of each of the Committees; and

“(3) those members of each of the Committees and staff persons of each of the Committees who are authorized by the chairman thereof to have access to the contents.”.

SEC. 113. Conforming amendment.

Not later than 180 days after the date of the enactment of this Act, the Secretary of Homeland Security, in consultation with the Secretary of the Treasury, shall submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives of proposed conforming amendments to the statutes set forth in section 412(a)(2) of the Homeland Security Act of 2002 (6 U.S.C. 212(a)(2)) and any other statute applicable to the Customs Service or the Commissioner of Customs on the day before the date of the enactment of such Act in order to determine the appropriate allocation of legal authority set forth in those statutes. The appropriate allocation includes allocation between the Department of the Treasury and the Department of Homeland Security, and between the Bureau of Immigration and Customs Enforcement, the Bureau of Customs and Border Protection, and other offices within the Department of Homeland Security.

SEC. 121. Establishment of Bureau.

(a) In general.—Section 442 of the Homeland Security Act of 2002 (6 U.S.C. 252(a)) is amended to read as follows:

“SEC. 442. Establishment of Bureau; Director.

“(a) Establishment of bureau.—There shall be in the Department of Homeland Security a bureau to be known as the Bureau of Immigration and Customs Enforcement, and a Director of Immigration and Customs Enforcement. The Director of Immigration and Customs Enforcement, shall be appointed by the President by and with the advice and consent of the Senate and shall—

“(1) head the Bureau of Immigration and Customs Enforcement;

“(2) carry out the duties and powers prescribed by the Secretary of Homeland Security and by law;

“(3) report directly to the Deputy Secretary of Homeland Security;

“(4) have a minimum of 5 years professional experience in law enforcement, and a minimum of 5 years of management experience; and

“(5) advise the Secretary with respect to any policy or operation of the Bureau of Immigration and Customs Enforcement that may affect the Bureau of Citizenship and Immigration Services established under subtitle E, including potentially conflicting policies or operations.

“(b) Deputy director and other officers.—The Secretary of Homeland Security is authorized to appoint, in the Bureau established by subsection (a), 1 Deputy Director, and such other officers as are necessary to manage the individual offices within the Bureau. Appointments under this subsection shall be subject to the provisions of the civil service laws, and the salaries shall be fixed in accordance with chapter 51 and subchapter III of chapter 53 of title 5, United States Code.

“(c) Absence or disability of Director.—The Secretary of Homeland Security is authorized to designate an officer of the Bureau of Immigration and Customs Enforcement as Director of Immigration and Customs Enforcement, during the absence or disability of the Director of Immigration and Customs Enforcement, or in the event that there is no Director of Immigration and Customs Enforcement.

“(d) Duties of personnel.—The personnel of the Bureau of Immigration and Customs Enforcement shall conduct and prosecute commercial investigations in connection with any customs revenue function delegated by the Secretary of the Treasury to the Secretary of Homeland Security pursuant to section 412, and perform such other duties as the Secretary of Homeland Security may prescribe or are prescribed by law.

“(e) Authorization of appropriations.—

“(1) IN GENERAL.—For the fiscal year beginning October 1, 2006, and each fiscal year thereafter, there are authorized to be appropriated to the Department of Homeland Security for the Bureau of Immigration and Customs Enforcement only such sums as may hereafter be authorized by law.

“(2) ENFORCEMENT OF TRADE AND CUSTOMS LAWS.—In addition to any other sums hereafter authorized to be appropriated, there are authorized to be appropriated to the Department of Homeland Security for the Bureau of Immigration and Customs Enforcement to conduct and prosecute commercial investigations in connection with any customs revenue function delegated by the Secretary of the Treasury to the Secretary of Homeland Security pursuant to section 412, the following sums, to remain available until expended—

“(A) $76,850,000 for fiscal year 2007;

“(B) $83,500,000 for fiscal year 2008; and

“(C) $90,750,000 for fiscal year 2009.

“(3) PAY COMPARABILITY AUTHORIZATION.—For the fiscal year beginning October 1, 2006, and for each fiscal year thereafter, there are authorized to be appropriated to the Department of Homeland Security for salaries of the Bureau of Immigration and Customs Enforcement such additional sums as may be provided by law to reflect pay rate changes made in accordance with the Federal Pay Comparability Act of 1970 (Public Law 91–656; 84 Stat. 1946).

“(f) Program To collect information relating to foreign students.—The Director of Immigration and Customs Enforcement shall be responsible for administering the program to collect information relating to nonimmigrant foreign students and other exchange program participants described in section 641 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1372), including the Student and Exchange Visitor Information System established under that section, and shall use such information to carry out the enforcement functions of the Bureau of Immigration and Customs Enforcement.

“(g) Chief of Policy and Strategy.—

“(1) IN GENERAL.—There shall be a position of Chief of Policy and Strategy for the Bureau of Immigration and Customs Enforcement.

“(2) FUNCTIONS.—In consultation with personnel in local offices of the Bureau of Immigration and Customs Enforcement, the Chief of Policy and Strategy shall be responsible for—

“(A) making policy recommendations and performing policy research and analysis on immigration enforcement issues; and

“(B) coordinating immigration policy issues with the Chief of Policy and Strategy for the Bureau of Citizenship and Immigration Services (established under subtitle E), as appropriate.

“(h) Legal advisor.—There shall be a principal legal advisor to the Director of Immigration and Customs Enforcement. The legal advisor shall provide specialized legal advice to the Director and shall represent the Bureau of Immigration and Customs Enforcement in all exclusion, deportation, and removal proceedings before the Executive Office for Immigration Review.”.

(b) Compensation.—

(1) IN GENERAL.—Section 5314 of title 5, United States Code, is amended by adding at the end the following:

“Director of Immigration and Customs Enforcement, Department of Homeland Security.”.

(2) CONTINUATION IN OFFICE.—The individual serving as Assistant Secretary, Immigration and Customs Enforcement, in the Department of Homeland Security on the day before the date of the enactment of this Act may serve as Director of Immigration and Customs Enforcement until the earlier of—

(A) the date on which such individual is no longer eligible to serve as Assistant Secretary, Immigration and Customs Enforcement; or

(B) the date on which a person nominated to be the Director of Immigration and Customs Enforcement by the President is confirmed by the Senate.

(c) Conforming amendments.—

(1) SUBTITLE D.—The heading for subtitle D of title IV of the Homeland Security Act of 2002 is amended by striking the matter preceding section 441 and inserting the following:

“subtitle DEnforcement functions”.

(2) TABLE OF CONTENTS.—The table of contents for the Homeland Security Act of 2002 is amended—

(A) by striking the item relating to section 442 and inserting the following:


“Sec. 442. Establishment of Bureau; Director.”; and

(B) by striking the item relating to subtitle D of title IV and inserting the following:

“Subtitle D—Enforcement functions”.

(3) DIRECTOR OF THE BUREAU OF CITIZENSHIP AND IMMIGRATION SERVICES.—Section 451(a)(2)(C) of the Homeland Security Act of 2002 (6 U.S.C. 271(a)(2)(C)) is amended by striking “Assistant Secretary of the Bureau of Border Security” and inserting “Director of Immigration and Customs Enforcement”.

SEC. 201. Definitions.

In this title:

(1) ACE.—The term “ACE” means the Automated Commercial Environment that is an automated trade processing system designed to collect, process, and analyze commercial import and export data to facilitate international trade and travel.

(2) BUREAU.—The term “Bureau” means the Bureau of Customs and Border Protection.

(3) CIPP.—The term “CIPP” means the Customs Industry Partnership Program established under section 499(d) of the Tariff Act of 1930, as added by section 231 or any similar program such as the Customs-Trade Partnership Against Terrorism Program (C–TPAT).

(4) COAC.—The term “COAC” means the Advisory Committee, established pursuant to section 9503(c) of the Omnibus Budget Reconciliation Act of 1987, as amended by section 235, or any successor Committee (19 U.S.C. 2071 note).

(5) COMMISSIONER.—The term “Commissioner” means the Commissioner of Customs.

(6) IMPORTER SELF-ASSESSMENT PROGRAM.—The term “importer self-assessment program” means the program of the Bureau of Customs and Border Protection in effect on the date of the enactment of this Act that provides benefits to those persons who have made a commitment of resources and assumed responsibility for—

(A) monitoring their own compliance and business practices with respect to establishing, documenting, and implementing adequate internal controls;

(B) performing periodic testing of transactions based on risk;

(C) sharing test results with the Bureau;

(D) making appropriate adjustments to internal controls; and

(E) maintaining an audit trail of financial records and Customs declarations, or, an alternate system that ensures accurate values are reported to the Bureau.

(7) INTERNATIONAL SUPPLY CHAIN.—The term “international supply chain” means the end-to-end process for shipping goods to or from the United States from the point of origin (including manufacturer, supplier, or vendor) through the point of distribution.

(8) REVALIDATION; REVERIFICATION.—The terms “revalidation” and “reverification” mean the process by which the Bureau of Customs and Border Protection reviews the qualifications of a participant to continue to participate as a tier 2 or a tier 3 participant in the CIPP, either on a periodic or risk management basis, to determine if the participant continues to adhere to established business and cargo security practices.

(9) TIER 1 PARTICIPANT.—The term “tier 1 participant” means a participant in the CIPP that has been certified pursuant to section 499(d) of the Tariff Act of 1930, as added by section 231.

(10) TIER 2 PARTICIPANT.—The term “tier 2 participant” means a participant in the CIPP that has been validated pursuant to section 499(d) of the Tariff Act of 1930, as added by section 231.

(11) TIER 3 PARTICIPANT.—The term “tier 3 participant” means a participant in the CIPP that has been validated and with respect to which a verification has been completed pursuant to section 499(d) of the Tariff Act of 1930, as added by section 231.

(12) VALIDATION AND VERIFICATION.—The terms “validation” and “verification” mean the processes by which the Bureau of Customs and Border Protection determines an applicant's qualifications to participate in the CIPP by reviewing the applicant's trade compliance history and conducting an on-site review of documentation and practices of the applicant relating to the importation of cargo, in order to determine if the applicant's cargo security and business practices are reliable, accurate, and effective.

(13) WCO.—The term “WCO” means the World Customs Organization.

(14) WTO.—The term “WTO” means the World Trade Organization established pursuant to the WTO Agreement.

(15) WTO AGREEMENT.—The term “WTO Agreement” means the Agreement Establishing the World Trade Organization entered into on April 15, 1994.

SEC. 211. Bilateral customs partnerships.

(a) In general.—Section 629(a) of the Tariff Act of 1930 (19 U.S.C. 1629(a)) is amended—

(1) by striking “Secretary” and inserting “Secretary of Homeland Security”; and

(2) by striking “examining persons and merchandise” and inserting “screening and examining persons, merchandise, and cargo”.

(b) Definitions.—Section 629 of the Tariff Act of 1930 (19 U.S.C. 1629) is amended by adding at the end the following:

“(h) Definitions.—In this section:

“(1) APPROPRIATE FEDERAL OFFICIALS.—The term ‘appropriate Federal officials’ includes the Secretaries of the Treasury, State, Energy, Transportation, and Homeland Security, the United States Trade Representative, the Commissioner of Customs, and the Commandant of the Coast Guard.

“(2) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term ‘appropriate congressional committees’’ means the Committees on Finance, Commerce, Science, and Transportation, and Homeland Security and Governmental Affairs of the Senate and the Committees on Ways and Means, Transportation and Infrastructure, and Homeland Security of the House of Representatives.

“(3) COAC.—The term ‘COAC’ means the Advisory Committee established by section 9503 of the Omnibus Budget Reconciliation Act of 1987 (19 U.S.C. 2071 note).

“(4) DESIGNATED PORT.—The term ‘designated port’ means a port in a foreign country with which the United States has a bilateral customs partnership agreement described in subsection (i).

“(5) EXAMINATION.—The term ‘examination’ means either a physical inspection or the imaging and radiation screening of a conveyance using nonintrusive inspection (NII) technology, for the presence of contraband.

“(6) INSPECTION.—The term ‘inspection’ means the comprehensive process used by personnel of the Bureau of Customs and Border Protection to assess goods entering the United States for duty purposes, to detect the presence of restricted or prohibited items, and to ensure compliance with all applicable laws. This process may include screening, conducting an examination, or conducting a search.

“(7) SCANNING.—The term ‘scanning’ means an examination by nonintrusive means, including nuclear or radiological detection technologies, x-ray or density technologies, and optical character recognition technologies, for the presence of misdeclared, restricted, or prohibited items.

“(8) SCREENING.—The term ‘screening’ means a visual or automated review of information about goods, including elements of the manifest or entry documentation accompanying a shipment being imported into the United States, to determine or assess the level of threat posed by such cargo.

“(9) WCO.—The term ‘WCO’ means the World Customs Organization.

“(10) WTO.—The term ‘WTO’ means the World Trade Organization established pursuant to the WTO Agreement.

“(11) WTO AGREEMENT.—The term ‘WTO Agreement’ means the Agreement Establishing the World Trade Organization entered into on April 15, 1994.

“(i) Bilateral customs partnership agreements.—In order to enhance the Container Security Initiative (CSI) of the Bureau of Customs and Border Protection by facilitating the safe, efficient flow of commerce, the Secretary of Homeland Security may, in consultation with the appropriate Federal officials, enter into bilateral customs partnership agreements with foreign countries for the purpose of examining and screening cargo at designated ports before the cargo is shipped to the United States. The agreement shall identify each designated port in the foreign country and shall provide for—

“(1) the establishment of mutually agreed upon technical capability, criteria, and standard operating procedures for the use of nonintrusive inspection and nuclear and radiological detection systems;

“(2) the use of nonintrusive inspection and nuclear and radiological detection systems meeting the technical capability, criteria, and standard operating procedures established under paragraph (1); and

“(3) continued bilateral review of, and updating as appropriate, the technologies, processes, and techniques used to screen, scan, and inspect cargo at designated ports.

“(j) Assessment of designated ports.—Before the Secretary of Homeland Security enters into any agreement with a foreign government under subsection (i), the Secretary shall conduct an assessment of the ports in that country, in consultation with the appropriate Federal officials. The assessment shall include with respect to each port—

“(1) the level of risk for—

“(A) the potential compromise of containers by terrorists or terrorist weapons;

“(B) smuggling of narcotics; and

“(C) violations of United States trade laws, including intellectual property rights and textile transshipment;

“(2) the volume of regular container traffic that goes through the port that is bound for the United States;

“(3) the commitment of the country to cooperate with the Bureau of Customs and Border Protection in sharing critical data and risk management information and to maintain programs to ensure employee integrity;

“(4) coordination with and an assessment by the Coast Guard; and

“(5) any limitation associated with the infrastructure of the port.

“(k) Foreign assistance.—The Secretary of Homeland Security, in consultation with the appropriate Federal officials, is authorized to provide appropriate assistance to designated ports, including—

“(1) training and other assistance that could facilitate the deployment of effective cargo screening and examination measures and equipment at designated ports and at foreign ports that are not designated; and

“(2) the loan or other arrangement for use of nonintrusive inspection or nuclear and radiological detection systems for cargo containers at designated ports under such terms and conditions as may be appropriate, and training foreign personnel in the operation of such systems.

“(l) Staffing.—The Secretary of Homeland Security shall develop a human capital management plan to determine adequate staffing levels in foreign ports including, as appropriate, the remote location of personnel at the National Targeting Center in Reston, Virginia.

“(m) Annual discussions.—The Secretary of Homeland Security, in coordination with the appropriate Federal officials, shall hold annual discussions with foreign governments with which the United States has a bilateral customs partnership agreement regarding best practices, technical assistance, training needs, and technological developments that will assist in ensuring the efficient and secure movement of international cargo.

“(n) Report.—Not later than September 30, 2007, and annually thereafter, the Secretary of Homeland Security shall, in consultation with the appropriate Federal officials and the COAC, report to the appropriate congressional committees on the effectiveness of, and need for improvements to, foreign customs partnership agreements. The report shall include—

“(1) recommendations for improvements to, and effectiveness of, screening, scanning, and inspection protocols and technologies at designated ports, and the effect on the flow of commerce at those ports;

“(2) recommendations for continuing or suspending a bilateral customs partnership agreement with each country and a detailed evaluation of any security incident and how it was handled, as well as the aggregate number and extent of trade compliance lapses and how those lapses were handled;

“(3) a description of the technical assistance delivered or needed at each designated port;

“(4) a description of the human capital management plan at each designated port; and

“(5) a description of any request made by the United States to a foreign country to conduct a physical and nonintrusive inspection and whether that request was granted or denied by the country.

“(o) Lesser risk ports.—The Commissioner of Customs may treat a designated port as a port that presents a lesser risk than a port that is not a designated port, for purposes of clearing cargo into the United States.”.

SEC. 212. Multilateral customs negotiations.

Section 629 of the Tariff Act of 1930 (19 U.S.C. 1629), as amended by section 211, is amended by adding at the end the following:

“(p) Harmonization of customs procedures and commitments.—

“(1) IN GENERAL.—The Commissioner of Customs, the United States Trade Representative, and other appropriate Federal officials, shall work through appropriate international organizations including the World Customs Organization, the World Trade Organization, the International Maritime Organization, and the Asia Pacific Economic Council, to harmonize, to the extent practicable, customs procedures, standards, requirements, and commitments in order to facilitate the efficient flow of international trade.

“(2) UNITED STATES TRADE REPRESENTATIVE.—

“(A) IN GENERAL.—The United States Trade Representative shall seek commitments in negotiations in the WTO regarding the articles of GATT 1994 that are described in subparagraph (B) that result in—

“(i) to the extent practicable, harmonization of import and export data collected by WTO members for customs purposes;

“(ii) transparency, efficiency, and procedural fairness of WTO members;

“(iii) to the extent practicable, transparent standards for the release of cargo by WTO members;

“(iv) to the extent practicable, development and harmonization of standards, technologies, and protocols for physical or nonintrusive examinations that will facilitate the efficient flow of international trade; and

“(v) the protection of confidential commercial data.

“(B) ARTICLES DESCRIBED.—The articles of the GATT 1994 described in this subparagraph are the following:

“(i) Article V (relating to transit).

“(ii) Article VIII (relating to fees and formalities associated with importation and exportation).

“(iii) Article X (relating to publication and administration of trade regulations).

“(C) GATT 1994.—The term ‘GATT 1994’ means the General Agreement on Tariff and Trade annexed to the WTO Agreement.

“(3) CUSTOMS.—The Commissioner of Customs, in consultation with the United States Trade Representative, shall work with the WCO to facilitate the efficient international flow of trade, taking into account existing international agreements and the negotiating objectives of the WTO. The Commissioner shall work to—

“(A) harmonize, to the extent practicable, import data collected by WCO members for customs purposes;

“(B) automate and harmonize, to the extent practicable, the collection and storage of commercial data by WCO members;

“(C) develop, to the extent practicable, transparent standards for the release of cargo by WCO members;

“(D) develop and harmonize, to the extent practicable, standards, technologies, and protocols for physical or nonintrusive examinations that will facilitate the efficient flow of international trade; and

“(E) ensure the protection of confidential commercial data.”.

SEC. 221. International trade data system.

(a) In general.—Section 411 of the Tariff Act of 1930 (19 U.S.C. 1411) is amended by adding at the end the following new subsections:

“(d) International trade data system.—

“(1) ESTABLISHMENT.—

“(A) IN GENERAL.—The Secretary of the Treasury (in this section, referred to as the ‘Secretary’) shall oversee the establishment of an electronic trade data interchange system to be known as the ‘International Trade Data System’ (ITDS). The ITDS shall be implemented not later than the date that the Automated Commercial Environment (commonly referred to as ‘ACE’) (as defined in section 201 of the Customs and Trade Facilitation Reauthorization Act of 2006) is implemented.

“(B) PURPOSE.—The purpose of the ITDS is to eliminate redundant information requirements, to efficiently regulate the flow of commerce, and to effectively enforce laws and regulations relating to international trade, by establishing a single portal system, operated by the Bureau of Customs and Border Protection, for the collection and distribution of standard electronic import and export data required by all United States Government agencies.

“(C) PARTICIPATION.—

“(i) IN GENERAL.—All Federal agencies that require documentation for clearing or licensing the importation and exportation of cargo shall participate in the ITDS.

“(ii) WAIVER.—The Director of the Office of Management and Budget may waive, in whole or in part, the requirement for participation for any Federal agency based on national security.

“(D) CONSULTATION.—The Secretary shall consult with and assist agencies in the transition from paper to electronic format for the submission, issuance, and storage of documents relating to data required to enter cargo into the United States.

“(2) DATA ELEMENTS.—

“(A) IN GENERAL.—The Steering Committee established under paragraph (3) shall, in consultation with the agencies participating in the ITDS, define the standard set of data elements to be collected, stored, and shared in the ITDS. The Steering Committee shall periodically review the data elements in order to update the data elements, as necessary.

“(B) HARMONIZATION.—The Steering Committee shall ensure that the ITDS data requirements are compatible with the commitments or obligations established by the World Customs Organization (WCO) and the World Trade Organization (WTO) for the entry of cargo.

“(C) COORDINATION.—The Secretary of the Treasury shall be responsible for coordinating operation of the ITDS among the participating agencies and the office within the Bureau of Customs and Border Protection that is responsible for maintaining the ITDS.

“(3) STEERING COMMITTEE.—There is established an interagency steering committee. The members of the committee shall include the Secretary of the Treasury (who shall serve as the chairperson of the committee), the Director of the Office of Management and Budget, and the head of each agency participating in the ITDS. The committee shall assist the Secretary of the Treasury in overseeing the implementation of, and participation in, the ITDS.

“(4) REPORT.—The Steering Committee shall submit a report annually to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. Each report shall include information on—

“(A) the status of the ITDS implementation;

“(B) the extent of participation in the ITDS by Federal agencies;

“(C) the remaining barriers to any agency’s participation;

“(D) the extent to which the ITDS is consistent with applicable standards established by the World Customs Organization and the World Trade Organization;

“(E) recommendations for technological and other improvements to the ITDS; and

“(F) the status of the Bureau's development, implementation, and management of the Automated Commercial Environment.

“(e) Treasury oversight.—The Secretary of the Treasury shall ensure that no fewer than 5 full-time equivalents in the Office of Tax, Trade, and Tariff Policy are available—

“(1) to carry out oversight of the customs revenue functions delegated to the Secretary of Homeland Security pursuant to section 412 of the Homeland Security Act of 2002 (6 U.S.C. 212); and

“(2) to carry out oversight of the International Trade Data System established under this section.

“(f) Authorization of appropriations.—There are authorized to be appropriated for each of the fiscal years 2007, 2008, and 2009, $750,000 for salaries and expenses required to carry out subsection (e).”.

SEC. 222. Authorization of appropriations.

Section 13031(f)(5) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(f)(5)) is amended—

(1) by striking “2003” each place it appears and inserting “2007”;

(2) by striking “2004” each place it appears and inserting “2008”;

(3) by striking “2005” each place it appears and inserting “2009”; and

(4) by striking “2006” each place it appears and inserting “2010”.

SEC. 231. Establishment of a voluntary customs industry partnership program.

(a) In general.—Section 499 of the Tariff Act of 1930 (19 U.S.C. 1499) is amended by adding at the end the following new subsection:

“(d) Customs Industry Partnership Program.—

“(1) ESTABLISHMENT.—The Commissioner of Customs (in this section referred to as the ‘Commissioner’) is authorized to establish a voluntary government-private sector Customs Industry Partnership Program to facilitate the movement of cargo through the international supply chain and to provide benefits to eligible participants meeting or exceeding the program requirements. The program shall be known as the ‘CIPP’.

“(2) ELIGIBLE PARTICIPANTS.—The Commissioner shall establish procedures for all persons involved in the movement of cargo in the international supply chain to apply for participation in the CIPP, including intermodal transportation system providers, contract logistics providers, air, land, and sea carriers, customs brokers, importers, forwarders, and other entities involved in the movement of cargo in the international supply chain.

“(3) MINIMUM REQUIREMENTS.—The Commissioner shall establish minimum requirements for participation in the CIPP. The requirements for participation in the Program include the following:

“(A) The applicant's history of moving cargo through the international supply chain.

“(B) Consideration of the applicant’s compliance with basic requirements of customs laws and regulations, including the proper maintenance of importer identification numbers on file for covered business entities, the maintenance of customs bonds in sufficient amount, and the absence of outstanding requests from the Bureau for information, notices of action, liquidated damages, and civil penalties unanswered by the company.

“(C) The applicant's compliance with all minimum physical security requirements established by the Commissioner.

“(4) 3 TIERS OF CUSTOMS INDUSTRY PARTNERSHIP PROGRAM.—The CIPP shall include 3 levels of voluntary participation.

“(A) TIER 1 PARTICIPANTS.—

“(i) REQUIREMENTS.—A ‘tier 1 participant’ means a CIPP participant that has certified to the Bureau of Customs and Border Protection that it meets the minimum requirements of the CIPP established by the Commissioner and that certification has been accepted by the Bureau of Customs and Border Protection after a review of the applicant’s trade compliance history and the attestations made in the application and the completion of a verification under paragraph (5).

“(ii) BENEFITS.—The Commissioner shall provide limited benefits to tier 1 participants for the purpose of facilitating the flow of cargo in the international supply chain.

“(iii) CERTIFICATION.—To the extent practicable, the Bureau of Customs and Border Protection shall conduct the certification for tier 1 participation within 90 days of receipt of the application for participation in the CIPP.

“(B) TIER 2 PARTICIPANTS.—

“(i) REQUIREMENTS.—A ‘tier 2 participant’ means a CIPP participant that has been granted tier 2 status for the CIPP by the Bureau of Customs and Border Protection, after the Bureau has completed an on-site validation of the participant’s trade compliance, cargo security practices, and supply chain and completed a verification under paragraph (5).

“(ii) BENEFITS.—The Commissioner shall grant benefits in addition to the benefits granted under subparagraph (B)(i) to tier 2 participants for the purpose of facilitating the flow of cargo in the international supply chain.

“(iii) VALIDATION.—To the extent practicable, the Bureau of Customs and Border Protection shall conduct and complete a validation for tier 2 participation within 1 year of granting the certification described in subparagraph (A).

“(C) TIER 3 PARTICIPANTS.—

“(i) REQUIREMENTS.—A ‘tier 3 participant’ means a tier 2 participant who, upon application for ‘tier 3’ benefits and completion of a verification under paragraph (5), is found by the Bureau of Customs and Border Protection to meet the following requirements:

“(I) A demonstrated history of trade compliance, including the consistent payment of duties in an accurate and timely manner.

“(II) The consistent provision of additional advance data elements as required by the Commissioner of Customs.

“(III) The consistent use of supply chain security best practices identified by the Bureau of Customs and Border Protection.

“(IV) Participation in the Bureau of Customs and Border Protection's Importer Self-Assessment Program (described in section 201 of the Customs and Trade Reauthorization Act of 2006).

“(ii) BENEFITS.—The Commissioner shall grant benefits in addition to the benefits granted under subparagraphs (A) and (B) to participants in the program who meet the requirements of clause (i) for the purpose of facilitating the flow of cargo in the international supply chain. The benefits shall include—

“(I) providing feedback to tier 3 participants on cargo examination results to the extent that such feedback does not compromise security;

“(II) notifying tier 3 participants of specific alerts and post-incident trade resumption procedures as appropriate;

“(III) providing incident management training for tier 3 participants, including training with respect to protection, prevention, response, and recovery;

“(IV) permitting tier 3 participants to be represented in joint incident management exercises with trade agencies and other agencies; and

“(V) permitting cargo clearance priority for participants in the post-incident resumption of trade to the extent the Commissioner deems practicable.

“(5) VERIFICATION OF PARTICIPANT STATUS.—The Commissioner of Customs shall develop procedures to verify the information provided by persons who apply for participation in the CIPP, including—

“(A) in the case of a tier 1 participant, an extensive documentation review;

“(B) in the case of a tier 2 participant, an extensive documentation review and site validation; and

“(C) in the case of a tier 3 participant, an extensive documentation review, site validation, and a review by the Bureau of Customs and Border Protection auditors of the internal controls of participants with respect to commercial transactions to ensure the accuracy of the data that is submitted to the Bureau.

“(6) CONSEQUENCES FOR LACK OF COMPLIANCE.—

“(A) IN GENERAL.—If a participant’s business system and documentation or supply chain security practices fail to meet any of the requirements established by the Commissioner of Customs under this subsection, the Commissioner may deny the applicant all or part of the benefits of the CIPP until the applicant meets those requirements.

“(B) FALSE OR MISLEADING INFORMATION.—If a participant intentionally provides false or misleading information to the Commissioner or a third party during the certification, validation, verification, revalidation, or reverification process, the Commissioner shall suspend or expel the participant from the CIPP for an appropriate period of time. The Commissioner may publish a list of persons who have been suspended and make such a list available to other participants.

“(7) CIPP ELEMENTS.—The Commissioner shall establish sufficient internal quality controls and record management to support the Bureau of Customs and Border Protection’s management systems of the CIPP. In managing the Program the Commissioner shall ensure that the Program includes the following:

“(A) STRATEGIC PLAN.—A 5-year Strategic Plan to identify outcome-based goals and performance measures of the Program.

“(B) ANNUAL PLAN.—An annual plan for each fiscal year designed to match available resources to the projected workload.

“(C) STANDARDIZED WORK PROGRAM.—A standardized work program to be used by personnel of the Bureau of Customs and Border Protection to carry out the verifications under paragraph (5), with respect to intermodal transportation system providers, contract logistics providers, air, land and sea carriers, customs brokers, importers, forwarders, and other persons involved in the movement of cargo through the international supply chain. The Bureau of Customs and Border Protection shall keep records and monitor staff hours associated with the completion of each verification.

“(D) DOCUMENTATION OF REVIEWS.—The Commissioner shall maintain a record management system to document determinations on the review of each participant, including certifications, validations, verifications, revalidations, and reverifications.

“(E) REVALIDATION AND REVERIFICATION OF PARTICIPANTS.—The Commissioner shall develop and implement—

“(i) a revalidation process for tier 2 participants;

“(ii) a means to include risk-based and random sampling for identifying participants for periodic revalidation and reverification;

“(iii) a reverification process for tier 3 participants;

“(iv) an annual plan for revalidation and reverification that includes—

“(I) performance measures;

“(II) an assessment of the personnel needed to perform the revalidation or reverification; and

“(III) the number of companies that will be revalidated or reverified during the year.

“(F) RIGHT OF APPEAL.—An applicant for, or participant in, the CIPP shall have the right to appeal any decision by the Commissioner denying or suspending benefits under the Program. An appeal shall be filed with the Commissioner not later than 90 days after the date of the suspension or denial that is being appealed. The Commissioner shall make a final decision with respect to the appeal within 180 days after the date the appeal is filed.

“(8) RESOURCE MANAGEMENT STAFFING PLAN.—The Commissioner shall—

“(A) develop a staffing plan to recruit, train, and retain staff (including a formalized training program) to meet the objectives identified in the strategic plan of the CIPP;

“(B) conduct a study of the Program’s training needs and develop a comprehensive training program to support the certification, validation, verification, revalidation, and reverification processes of the Program; and

“(C) provide cross-training in post-incident trade resumption for personnel engaged in the Program.

“(9) THIRD-PARTY VALIDATION.—The Commissioner shall consult with the Customs Commercial Operations Advisory Committee (COAC), and conduct a feasibility study regarding the use of third parties to conduct validations, verifications, revalidations, and reverifications for participation in the CIPP.

“(10) GAO REPORT.—Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall conduct a study of the CIPP. The study shall include a review of the internal controls, documentation, validation, verification, revalidation, and reverification processes of the Program. The Comptroller General shall submit a report of the results of the study to the Committee on Finance of the Senate and the Committee on Ways and Means of the House or Representatives.

“(11) CONFIDENTIAL INFORMATION SAFEGUARDS.—In consultation with COAC, the Commissioner shall develop and implement procedures to ensure the protection of confidential data collected, stored, or shared with government agencies or as part of the application, validation, verification, revalidation, or reverification processes. The procedures shall include—

“(A) measures for protecting data shared with any government agency;

“(B) measures for providing a secure system for document storage accessible only to the appropriate personnel;

“(C) measures for storing all electronic files in a manner that prevents theft, copying, or deletion; and

“(D) measures for labeling all records to clearly mark what is considered confidential or a trade secret.

“(12) DEFINITIONS.—In this subsection:

“(A) CONTRACT LOGISTICS PROVIDER.—The term ‘contract logistics provider’ means an entity that provides supply chain management services to third parties. Such services include the design of a third party’s domestic or international supply chain (including integrated information, consolidation, and deconsolidation), as well as the actual receipt, exportation, transportation, brokerage, warehousing, or distribution of a third party’s goods.

“(B) COAC.—The term ‘COAC’ means the Advisory Committee, established pursuant to section 9503(c) of the Omnibus Budget Reconciliation Act of 1987, or any successor Committee (19 U.S.C. 2071 note).

“(C) IMPORTER SELF-ASSESSMENT PROGRAM.—The term ‘importer self-assessment program’ means the program of the Bureau of Customs and Border Protection in effect on the date of the enactment of this Act that provides benefits to those persons who have made a commitment of resources and assumed responsibility for—

“(i) monitoring their own compliance and business practices with respect to establishing, documenting, and implementing adequate internal controls;

“(ii) performing periodic testing of transactions based on risk;

“(iii) sharing test results with the Bureau;

“(iv) making appropriate adjustments to internal controls; and

“(v) maintaining an audit trail of financial records and Customs declarations, or, an alternate system that ensures accurate values are reported to the Bureau.

“(D) INTERNATIONAL SUPPLY CHAIN.—The term ‘international supply chain’ means the end-to-end process for shipping goods to or from the United States from the point of origin (including manufacturer, supplier, or vendor) through the point of distribution.

“(E) REVALIDATION; REVERIFICATION.—The terms ‘revalidation’ and ‘reverification’ mean the process by which the Bureau of Customs and Border Protection reviews the qualifications of a participant to continue to participate as a tier 2 or tier 3 participant in the CIPP, either on a periodic or risk management basis, to determine if the participant continues to adhere to established business and cargo security practices.

“(F) VALIDATION AND VERIFICATION.—The terms ‘validation’ and ‘verification’ mean the processes by which the Bureau of Customs and Border Protection determines an applicant's qualifications to participate in the CIPP by reviewing the applicant's trade compliance history and conducting an on-site review of documentation and practices of the applicant relating to the importation of cargo, in order to determine if the applicant's cargo security and business practices are reliable, accurate, and effective.”.

(b) Additional personnel.—In each of the fiscal years 2007 through 2009, the Secretary shall increase by not less than 50 (over the previous fiscal year) the number of positions for validation, verification, revalidation, and reverification activities of the CIPP, and shall provide appropriate training and support for the positions.

(c) Authorization of appropriations.—In addition to any monies hereafter appropriated to the Bureau of Customs and Border Protection of the Department of Homeland Security, there are authorized to be appropriated for the purpose of meeting the staffing requirement provided for in subsection (b), to remain available until expended, the following:

(1) $8,500,000 in fiscal year 2007.

(2) $17,600,000 in fiscal year 2008.

(3) $27,300,000 in fiscal year 2009.

(4) $28,300,000 in fiscal year 2010.

(5) $29,200,000 in fiscal year 2011.

(d) Report.—

(1) IN GENERAL.—Not later than November 30, 2007, and annually thereafter, the Commissioner shall report to the appropriate committees on the progress of CIPP validations, verifications, revalidations, and reverifications established under section 499(d) of the Tariff Act of 1930.

(2) APPROPRIATE COMMITTEES.—The term “appropriate committees” means the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.

SEC. 232. Trade resumption plan.

Title III of the Tariff Act of 1930 is amended by inserting after section 318 the following new section:

“SEC. 318A. Trade resumption plan.

“(a) Definitions.—In this section:

“(1) INSPECTION.—The term ‘inspection’ means the comprehensive process used by the personnel of the Bureau of Customs and Border Protection to assess goods entering the United States for duty purposes, to detect the presence of restricted or prohibited items, or to ensure compliance with applicable laws. The process may include screening, conducting an examination, or conducting a search.

“(2) TARGETING.—The term ‘targeting’ means the process used by the personnel of the Bureau of Customs and Border Protection to determine the risk of security or trade violations associated with cargo bound for the United States.

“(3) TRANSPORTATION DISRUPTION.—The term ‘transportation disruption’ means any significant delay, interruption, or stoppage in the flow of international trade caused by a natural disaster, labor dispute, heightened threat level, an act of terrorism, or any transportation security incident defined in section 1572.3 of title 49, Code of Federal Regulations.

“(b) Trade resumption plan.—Not later than 1 year after the date of enactment of this Act, the Commissioner of Customs shall develop a Trade Resumption Plan to provide for the resumption of trade in the event of a transportation disruption. The Plan shall include—

“(1) a program to redeploy resources and personnel, as necessary, to reestablish the flow of international trade in the event of a transportation disruption;

“(2) a training program to periodically instruct personnel of the Bureau of Customs and Border Protection in trade resumption functions in the event of a transportation disruption;

“(3) a plan to revise cargo targeting and inspection protocols to meet the security and trade facilitation needs of the United States following a transportation disruption, including, to the extent practicable, giving priority to—

“(A) cargo originating from a designated port described in section 629(j);

“(B) cargo that has been handled, stored, shipped, and imported by, or otherwise processed by, a tier 3 participant in the Customs Industry Partnership Program established under section 499(d) (CIPP);

“(C) cargo that has undergone nuclear or radiological detection scan, x-ray or density scan, and optical character recognition scan, at the last port of departure prior to arrival in the United States;

“(D) cargo transported in containers with tamper-proof seals;

“(E) perishable cargo; and

“(F) any other cargo the Commissioner considers appropriate;

“(4) a plan to communicate any revised procedures or instructions to the private sector, and in particular to tier 3 participants in the CIPP established pursuant to section 499(d), following a transportation disruption; and

“(5) a plan to coordinate trade facilitation efforts among affected ports of entry following a transportation disruption.

“(c) Consultations.—

“(1) IN GENERAL.—The Commissioner of Customs shall consult with appropriate government agencies, port authorities, terminal operators, and the Customs Commercial Operations Advisory Committee (COAC) in the development of the Trade Resumption Plan.

“(2) PUBLIC COMMENT.—The Commissioner of Customs shall afford port authorities, terminal operators, and the COAC 60 days in which to comment on a draft Trade Resumption Plan before finalizing such plan.

“(d) Exercises.—The Commissioner of Customs shall coordinate annual exercises with appropriate Federal, State, and local agencies, port authorities, terminal operators, and tier 3 participants in the CIPP to practice and prepare for implementation of the Trade Resumption Plan. Such exercises shall be coordinated with the Coast Guard's port incident management plan exercises.

“(e) Report and consultation.—Not later than 180 days after the date that the annual exercises described in subsection (d) are completed, the Commissioner of Customs shall submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives on the status of the Trade Resumption Plan required by subsection (b) and the result of exercises required by subsection (d), and shall consult with the committees regarding any proposals to revise the Plan.”.

SEC. 233. Automated Targeting System.

Title III of the Tariff Act of 1930 is amended by inserting after section 318A, as added by section 232 of this Act, the following new section:

“SEC. 318B. Automated Targeting System.

“(a) Component.—The Automated Targeting System used by the Bureau of Customs and Border Protection to identify cargo for increased inspection prior to the clearance of such cargo into the United States shall include a component to permit—

“(1) the electronic comparison of similar manifest and available entry data for cargo entered into or bound for the United States, in order to efficiently identify cargo for increased inspection or expeditious release following a transportation disruption; and

“(2) the electronic isolation of select data elements relating to cargo entered into or bound for the United States, in order to efficiently identify cargo for increased inspection or expeditious release following a transportation disruption.

“(b) Trade resumption plan.—The plan required by subsection (b)(3) of section 318A shall incorporate use of the component of the Automated Targeting System required by subsection (a) in order to minimize the disruption to the efficient flow of international trade following a transportation disruption.”.

SEC. 234. Drawback for exported merchandise.

(a) In general.—Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) is amended to read as follows:

“SEC. 313. Drawback for exported merchandise.

“(a) Definitions.—In this section:

“(1) BILL OF MATERIALS.—The term ‘bill of materials’ means records kept in the ordinary course of business that identify each component incorporated into an article.

“(2) DESTROYED.—The term ‘destroyed’ means a process by which merchandise or an article loses all commercial value. Merchandise or an article may be destroyed even if valuable material is recovered from the merchandise or article.

“(3) DIRECTLY.—The term ‘directly’ means a transfer of merchandise or an article from 1 person to another person without any intermediate transfer.

“(4) FORMULA.—The term ‘formula’ means records kept in the ordinary course of business that identify the quantity of each element, material, chemical, mixture, or other substance incorporated into a manufactured article.

“(5) FUNGIBLE.—The term ‘fungible’ means goods that are commercially identical to 1 another in all instances.

“(6) GOOD SUBJECT TO CHILE DRAWBACK.—The term ‘good subject to Chile drawback’ has the meaning given that term in section 203(a) of the United States-Chile Free Trade Agreement Implementation Act (19 U.S.C. 3805 note).

“(7) GOOD SUBJECT TO NAFTA DRAWBACK.—The term ‘good subject to NAFTA drawback’ has the meaning given that term in section 203(a) of the North American Free Trade Agreement Implementation Act (19 U.S.C. 3333(a)).

“(8) HTS.—The term ‘HTS’ means the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).

“(9) INCORPORATED INTO.—The term ‘incorporated into’ means any operation by which merchandise or an article becomes classifiable in a different 8-digit HTS subheading number.

“(10) INDIRECTLY.—The term ‘indirectly’ means a transfer of merchandise or an article from 1 person to another person with 1 or more intermediate transfers.

“(11) LINE ITEM.—

“(A) IMPORT ENTRY.—The term ‘line item’ means, for an import entry filed pursuant to section 484, the identification of a commodity from 1 country by net quantity, entered value, HTS subheading number, and applicable duties, fees, and taxes.

“(B) DESIGNATED EXPORT.—Line item means, for a designated export, the identification of a commodity by HTS subheading number, Schedule B number, declared value, and quantity.

“(12) NAFTA COUNTRY.—The term ‘NAFTA country’ has the meaning given that term in section 2 of the North American Free Trade Agreement Implementation Act (19 U.S.C. 3301).

“(13) SCHEDULE B.—The term ‘Schedule B’ means the Department of Commerce Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States.

“(14) SUBSTITUTE MERCHANDISE; SUBSTITUTE ARTICLE.—The terms ‘substitute merchandise’ and ‘substitute article’ mean—

“(A) a good that is classifiable within the same 8-digit HTS subheading number as another good (the Schedule B number may be used to demonstrate this fact);

“(B) a good demonstrated to have been classifiable within the same 8-digit HTS subheading number as another good at some point during the 5-year period beginning on the date of importation of the designated imported merchandise (the Schedule B number may be used to demonstrate this fact); or

“(C) for goods classifiable under headings 2710 or 3901 through 3914, HTS, a good demonstrated to have been classifiable under the same 8-digit HTS subheading number as another good according to the HTS in effect on January 1, 2000 (the Schedule B number may be used to demonstrate this fact).

“(b) In general.—

“(1) DRAWBACK.—If merchandise is imported into the United States and that merchandise, or substitute merchandise, is then exported, or is incorporated into an article that is exported, or a substitute article that is exported, duties, fees, and taxes paid upon entry or importation of the merchandise shall be refunded as drawback pursuant to this section.

“(2) ELIGIBILITY FOR DRAWBACK FOR MERCHANDISE INCORPORATED INTO MULTIPLE ARTICLES.—Merchandise described in paragraph (1) that is incorporated into an article that is exported shall be eligible for drawback under this section regardless of the number of times that the merchandise is incorporated into an article or an article is incorporated into another article.

“(c) Eligibility to claim drawback.—

“(1) PERSON MAKING CLAIM.—A person may claim drawback under this section if the person—

“(A)(i) imports the merchandise on which the claim is based; or

“(ii) obtains the importer’s permission to claim the drawback and meets the requirements of paragraph (2); and

“(B) exports the merchandise or article on which the claim is based or obtains the exporter’s permission to claim drawback.

“(2) SPECIAL RULES FOR NONIMPORTERS.—

“(A) IN GENERAL.—An exporter who claims drawback pursuant to paragraph (1)(A)(ii), shall have received the imported merchandise, substitute merchandise, imported or substitute merchandise incorporated into an article, or substitute article, directly or indirectly from the importer.

“(B) RULES FOR TRANSFER.—The transfer of a claim for drawback under this section shall be a private transaction between parties that may not be required to be governed by this section or by regulations promulgated under the authority of this section, and the Secretary may not require such parties to verify any transfer of drawback rights, merchandise, or article under this subsection.

“(3) CLAIM FOR DRAWBACK ON MERCHANDISE INCORPORATED.—If drawback is claimed for merchandise incorporated into an article, the person making the claim shall submit a bill of materials or formula identifying the merchandise and article by the 8-digit HTS subheading number and the quantity of the merchandise. Merchandise shall be deemed incorporated into an article if the bill of materials or formula for that article includes such merchandise.

“(4) ELECTRONIC FILING.—A claim for drawback under this section shall be made through an electronic data interchange system authorized by the Secretary. Such system may include an Internet-based system.

“(5) TIME LIMIT FOR CLAIM.—Drawback may be paid under this section for merchandise only if the claim for drawback is filed within 5 years after the date the merchandise was imported. If the merchandise has multiple dates of importation, the earliest date of importation shall be used for purposes of this paragraph.

“(d) Amount of drawback.—

“(1) IN GENERAL.—Except as provided in paragraph (2) and except for drawback claims filed pursuant to subsection (g)(2), the amount of a drawback made pursuant to this section shall be the number of units claimed times the lesser of—

“(A) the average of the duties, taxes, and fees paid per unit of the designated import line item; or

“(B) the average declared value per unit of the designated export line item times the duties, taxes, and fees that applied to the designated import line item, less 1 percent.

“(2) EXCEPTION.—Where drawback is claimed based upon imported merchandise or substitute merchandise being incorporated into an article, the drawback amount shall be the number of units of merchandise claimed times the average duties, taxes, and fees per unit of the designated import line item, less 1 percent.

“(3) LIMITATION.—The amount of duties, taxes, and fees to be refunded pursuant to this subsection for merchandise shall not include any duties, taxes, and fees previously refunded to any person for such merchandise.

“(e) Refunds, waivers, or reductions under certain free trade agreements.—

“(1) IN GENERAL.—If an article that is exported to a NAFTA country is a good subject to NAFTA drawback, no customs duties on the good may be refunded, waived, or reduced in an amount that exceeds the lesser of—

“(A) the total amount of customs duties paid or owed on the good on importation into the United States; or

“(B) the total amount of customs duties paid on the good on importation into the NAFTA country.

“(2) SPECIAL RULE FOR CANADA.—If Canada ceases to be a NAFTA country and the suspension of the operation of the United States-Canada Free-Trade Agreement thereafter terminates, then for purposes of subsection (b), the shipment to Canada during the period such Agreement is in operation of an article made from or substituted for, as appropriate, a drawback eligible good under section 204(a) of the United States-Canada Free-Trade Implementation Act of 1988 (19 U.S.C. 1212 note) does not constitute an exportation.

“(3) SPECIAL RULE FOR CHILE.—

“(A) IN GENERAL.—For purposes of subsections (a) and (h), if an article that is exported to Chile is a good subject to United States-Chile Free Trade Agreement drawback, no customs duties on the good may be refunded, waived, or reduced, except as provided in subparagraph (B).

“(B) AMOUNT OF CUSTOMS DUTIES.—The customs duties referred to in subparagraph (A) may be refunded, waived, or reduced by—

“(i) 100 percent during the 8-year period beginning on January 1, 2004;

“(ii) 75 percent during the 1-year period beginning on January 1, 2012;

“(iii) 50 percent during the 1-year period beginning on January 1, 2013; and

“(iv) 25 percent during the 1-year period beginning on January 1, 2014.

“(4) FUNGIBLE MERCHANDISE EXPORTED TO NAFTA COUNTRY.—

“(A) IN GENERAL.—The exportation to a NAFTA country of merchandise that is fungible with and substituted for imported merchandise, other than merchandise described in paragraphs (1) through (8) of section 203(a) of the North American Free Trade Agreement Implementation Act (19 U.S.C. 3333(a)), shall not constitute an exportation for purposes of subsection (b).

“(B) FUNGIBLE MERCHANDISE EXPORTED TO CHILE.—Beginning on January 1, 2015, the exportation to Chile of merchandise that is fungible with, and substituted for imported merchandise, other than merchandise described in paragraphs (1) through (5) of section 203(a) of the United States-Chile Free Trade Agreement Implementation Act (19 U.S.C. 3805 note), shall not constitute an exportation for purposes of subsection (b). The preceding sentence shall not be construed to permit the substitution of unused drawback under subsection (b) of this section with respect to merchandise described in paragraph (2) of section 203(a) of the United States-Chile Free Trade Agreement Implementation Act.

“(f) Proof of exportation.—A person claiming drawback under this section shall submit proof of the exportation of the merchandise or an article that the merchandise was incorporated into by submitting at least 1 of the following:

“(1) The appropriate record from the United States Government automated export system, unless such system was unable to report the exportation.

“(2) If the drawback claims filed pursuant to subsection (e), the Canadian or Mexican entry records.

“(3) For a deemed exportation, any record that establishes the fact of deemed exportation that includes a description of the article or merchandise by the 8-digit HTS subheading number (or equivalent Schedule B number) under which the article or merchandise would be classifiable, quantity, and declared value.

“(g) Special eligibility rules.—

“(1) VESSELS BUILT FOR RESIDENTS OF A FOREIGN COUNTRY.—Drawback under this section may be claimed for materials imported and used in the construction and equipment of vessels built for foreign account and ownership, or for the government of any foreign country, notwithstanding that such vessels may not within the strict meaning of the term be exported.

“(2) DESTROYED MERCHANDISE.—

“(A) ELIGIBILITY FOR DRAWBACK.—Drawback under this section may be claimed for merchandise or an article incorporating the merchandise that is not exported because it was destroyed if the person seeking the drawback uses direct identification or another approved accounting method to identify the merchandise that is destroyed or the merchandise incorporated into the article that is destroyed.

“(B) AMOUNT OF DRAWBACK.—Subject to subparagraph (C), the amount of drawback paid for a claim filed pursuant to subparagraph (A) shall be—

“(i) the average entered value per unit of merchandise, multiplied by

“(ii) the duty, tax, and fee applicable to the designated line item of the merchandise, multiplied by

“(iii) the number of units claimed, minus 1 percent.

“(C) OFFSETTING AMOUNTS.—The amount of duties, taxes, and fees to be refunded pursuant to this paragraph shall not include any duties, taxes, and fees previously refunded to an importer of record or the person claiming drawback. The value of the imported merchandise on which drawback is claimed shall be reduced by the value of any recovered materials (including the value of any tax benefit or royalty payment).

“(3) AGRICULTURAL PRODUCTS.—No drawback under this section may be claimed for an agricultural product subject to over-quota rate of duty established under a tariff-rate quota, except under a direct identification basis and when such product has not been used in the United States.

“(4) MERCHANDISE NOT REGULARLY ENTERED.—Imported merchandise that has not been regularly entered or withdrawn for consumption shall not satisfy the exportation requirement of this section.

“(5) FLAVORING EXTRACTS; MEDICINAL OR TOILET PREPARATIONS; BOTTLED DISTILLED SPIRITS AND WINES.—

“(A) IN GENERAL.—Upon the exportation of flavoring extracts, medicinal, or toilet preparations (including perfumery) manufactured or produced in the United States in part from domestic alcohol on which an internal revenue tax has been paid, there shall be allowed a drawback equal in amount to the tax found to have been paid on the alcohol so used.

“(B) BOTTLED DISTILLED SPIRITS AND WINES.—Upon the exportation of bottled distilled spirits and wines manufactured or produced in the United States on which an internal revenue tax has been paid or determined, there shall be allowed, under regulations to be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary, a drawback equal in amount to the tax found to have been paid or determined on such bottled distilled spirits and wines. In the case of distilled spirits, the preceding sentence shall not apply unless the claim for drawback is filed by the bottler or packager of the spirits and unless such spirits have been stamped or restamped, and marked, especially for export, under regulations prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury.

“(h) Prohibition on other claims for drawback.—Merchandise that is exported or destroyed to satisfy any claim for drawback shall not be the basis of any other claim for drawback, except that appropriate credit and deductions for claims covering components or ingredients of such merchandise shall be made in computing drawback payments.

“(i) Liability for claim.—Importers, up to the amount of duties, taxes, and fees on the designated import permitted by the importer for drawback by the claimant, and drawback claimants, for the full amount of the claim, are jointly and severally liable to the United States for drawback claims. In implementing this section, the Secretary shall provide by regulation that the United States attempt to recover from the drawback claimant before attempting to recover from the importer.

“(j) Payment from receipts of Puerto Rico.—A drawback under this section for merchandise shall be paid from the customs receipts of Puerto Rico if the duties for such merchandise were originally paid into the Treasury of Puerto Rico.”.

(b) Report.—Not later than 1 year after the date the drawback processing module is operational and the ACE (as defined in section 201) becomes the exclusive system of record nationally for drawback entries, the Commissioner of the Bureau of Customs and Border Protection shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report that evaluates the utilization of direct identification in drawback claims, including measurement of the number of non-NAFTA, nondestruction claims filed using direct identification, and the impact on personnel allocation within the Bureau.

(c) Technical and conforming amendments.—

(1) REFUNDS.—Section 505(b) of the Tariff Act of 1930 (19 U.S.C. 1505(b)), is amended by adding at the end the following: “Refunds of excess moneys deposited, as determined on a liquidation or reliquidation, shall be reduced by any amount paid, on an accelerated basis or otherwise, to a drawback claimant pursuant to section 313.”.

(2) REVIEW OF PROTESTS.—The second sentence of section 515(a) of the Tariff Act of 1930 (19 U.S.C. 1515(a)) is amended by striking the period at the end and inserting “in accordance with section 505.”.

(d) Effective date.—The amendments made by this section shall take effect on the date that the Commissioner of the Bureau of Customs and Border Protection publishes a finding that the Automated Commercial Environment is the exclusive system of record in the United States for entry summaries and shall apply to drawback claims designating import entry summaries or reconfigured entries that are filed on or after that date.

SEC. 235. Final authority over matters relating to customs brokers.

(a) In general.—Section 641(a) of the Tariff Act of 1930 (19 U.S.C. 1641(a)) is amended by striking paragraph (3) and inserting the following:

“(3) The term ‘Commissioner’ means the Commissioner of Customs.”.

(b) Conforming amendments.—Section 641 of the Tariff Act of 1930 (19 U.S.C. 1641) is amended by striking “Secretary” each place it appears and inserting “Commissioner”.

SEC. 236. Advisory Committee.

Section 9503(c) of the Omnibus Budget Reconciliation Act of 1987 (19 U.S.C. 2071 note) is amended—

(1) in paragraph (1), by striking “Advisory Committee on Commercial Operations of the United States Customs Service” and inserting “Customs Commercial Operations Advisory Committee”;

(2) by striking “commercial operations of the United States Customs Service” each place it appears and inserting “customs commercial operations”;

(3) by inserting “, in consultation with the Secretary of Homeland Security,” after “Secretary of the Treasury” each place it appears; and

(4) by amending paragraph (4) to read as follows:

“(4) The Deputy Secretary of the Treasury and the Deputy Secretary of Homeland Security, or their designees, shall jointly preside over meetings of the Advisory Committee.”.

SEC. 237. Study and report.

(a) Feasibility study.—Not later than 1 year after the date of the enactment of this Act, the Commissioner of Customs shall conduct a study and report to the appropriate committees (as defined in section 231(d)(2)) regarding the feasibility of developing and employing nonintrusive scanning systems in foreign ports to examine and analyze containerized cargo destined for the United States. The report shall include an assessment of any such systems currently used for—

(1) detecting and analyzing nuclear or radiological materials;

(2) producing density scans or x-ray scans of containerized cargo; and

(3) recording unique identification information for specific containerized cargo.

(b) Elements of the report.—The report required by subsection (a) shall take into account—

(1) the infrastructure requirements and limitations of a port;

(2) the size of a port;

(3) the maintenance or improvement of the current average processing speed of containerized cargo through a port;

(4) the scalability of a nonintrusive scanning system to meet both current and future forecasted trade flows;

(5) the ability of a nonintrusive scanning system to automatically detect and analyze anomalies between information collected for specific containerized cargo and established baselines for such or similar cargo;

(6) the ability of a nonintrusive scanning system to automatically maintain and catalog appropriate data for reference and analysis in the event of a transportation disruption;

(7) the potential costs of installing and maintaining a nonintrusive scanning system in a port;

(8) the ability of administering personnel to efficiently manage and utilize the data produced by a nonintrusive scanning system;

(9) the ability to safeguard commercial data generated by or submitted to a nonintrusive scanning system; and

(10) the reliability of currently available technology.

SEC. 241. Staffing for commercial operations and revenue functions of the Bureau of Customs and Border Protection.

(a) Findings.—Congress finds the following:

(1) The Homeland Security Act of 2002 prohibited the Secretary of Homeland Security from reducing the staffing levels attributable to the customs revenue functions described in section 412(b)(2).

(2) Since the creation of the Department of Homeland Security in 2003, staffing levels for various personnel in the Bureau of Customs and Border Protection dedicated to customs revenue, trade facilitation, and trade enforcement functions have declined by as much as 16 percent.

(3) Since 2004, the number of full-time equivalents performing commercial investigations within the Bureau of Immigration and Customs Enforcement declined by as much as 15 percent.

(4) In 2006, customs revenue collections are expected to reach $31,500,000,000, a 25 percent increase over revenue collected when the Department of Homeland Security was created in 2003.

(5) More than 11,000,000 commercial cargo containers entered the United States in 2005. The number of containers entering the United States is expected to increase by 10 percent in 2006, and by 2010, containerized traffic flows into the United States are expected to double.

(6) International trade accounted for 110 of United States economic growth 50 years ago, and today accounts for 14 of that growth.

(7) An 11-day labor dispute at the Port of Long Beach, California, cost the United States economy at least $1,000,000,000 per day, highlighting the need for trade resumption preparedness among United States Government agencies, ports, and port users.

(8) Dedicating sufficient resources to customs revenue and commercial trade facilitation and enforcement functions is critical to the economic security and well-being of the United States.

(b) Authorization for commercial operations and revenue functions.—The Act of February 13, 1911 (36 Stat. 901, chapter 46; 19 U.S.C. 267) is amended by inserting after section 5 the following new section:

“SEC. 5A. Authorization for commercial operations and revenue functions.

“(a) In general.—In addition to any monies hereafter appropriated to the Bureau of Customs and Border Protection of the Department of Homeland Security, there are authorized to be appropriated for the purpose of increasing the number of personnel in the Bureau available to perform commercial operations and customs revenue functions, described in section 412(b)(2) of the Homeland Security Act of 2002 (6 U.S.C. 212(b)(2)), to remain available until expended, the following:

“(1) $105,000,000 in fiscal year 2007.

“(2) $162,500,000 in fiscal year 2008.

“(3) $168,000,000 in fiscal year 2009.

“(4) $174,000,000 in fiscal year 2010.

“(5) $180,000,000 in fiscal year 2011.

“(b) Additional personnel.—The additional personnel authorized under subsection (a) shall include:

“(1) An increase of 4 percent in the number of Customs and Border Protection Officers over the number of officers employed on the day before the date of the enactment of this Act to assist in the commercial operations of the Bureau, including inspection and cargo clearance at ports of entry, of which the Commissioner of Customs shall assign—

“(A) at least 1 additional officer at each port of entry in the United States; and

“(B) the balance of the additional officers authorized by this subsection among ports of entry in the United States based upon the volume of trade and the incidence of nonvoluntarily disclosed trade and customs law violations observed among such ports of entry.

“(2) An increase of 15 percent over the number of nonsupervisory import specialists employed at the end of fiscal year 2002 for the purpose of performing trade facilitation and enforcement functions.

“(3) An increase of 15 percent over the number of auditors employed at the end of fiscal year 2002 for the purpose of validating, verifying, revalidating, and reverifying CIPP participants pursuant to section 499(d) of the Tariff Act of 1930.

“(c) Resource Allocation Model.—Not later than 1 year after the date of the enactment of this Act, and every 2 years thereafter, the Commissioner of Customs shall prepare and submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a Resource Allocation Model to determine the optimal staffing levels required to carry out the commercial operations of the Bureau of Customs and Border Protection, including inspection and cargo clearance and the revenue functions described in section 412(b)(2) of the Homeland Security Act of 2002 (6 U.S.C. 212(b)(2)). The model shall comply with the requirements of section 412(b)(1) of such Act and shall take into account previous staffing models and historic and projected trade volumes and trends. The Resource Allocation Model shall apply both risk-based and random sampling approaches for determining adequate staffing needs for priority trade functions, including—

“(1) performing revenue functions;

“(2) enforcing antidumping and countervailing laws;

“(3) protecting intellectual property rights;

“(4) enforcing provisions of law relating to textiles;

“(5) conducting agricultural inspections; and

“(6) enforcing penalties.

“(d) Intellectual property rights enforcement division.—

“(1) ESTABLISHMENT.—There shall be established within the Bureau of Customs and Border Protection Office of Regulations and Rulings an Intellectual Property Rights Enforcement Division (in this section referred to as the ‘Division’). The Division shall be headed by a Director.

“(2) PURPOSE.—Oversight of all activities related to intellectual property rights within the Bureau of Customs and Border Protection shall be centralized in the Division.

“(3) DUTIES OF THE DIRECTOR.—The Director shall—

“(A) increase enforcement cooperation between customs agencies of foreign governments and the United States;

“(B) assist in intellectual property rights enforcement capacity building in countries identified as either a ‘Priority Foreign Country’, or on the ‘Priority Watch List’ or the ‘Watch List’ pursuant to section 182 of the Trade Act of 1974 (19 U.S.C. 2242);

“(C) consult with the private sector in training officers of the Bureau of Customs and Border Protection in the detection and identification of counterfeit products;

“(D) assist in the development and coordination of intellectual property rights training at the United States ports; and

“(E) coordinate with other agencies, departments, and personnel of the United States Government with respect to the enforcement of intellectual property rights.

“(4) STAFFING.—

“(A) CUSTOMS AND BORDER PROTECTION.—The Commissioner shall increase the staff and resources of the Bureau of Customs and Border Protection that are assigned to enforce intellectual property rights—

“(i) by hiring 10 additional attorneys and assigning at least 10 attorneys to the Division; and

“(ii) by hiring 5 additional auditors and assigning at least 5 auditors to the Division.

“(B) BUREAU OF IMMIGRATION AND CUSTOMS ENFORCEMENT.—The Director of Immigration and Customs Enforcement shall assign a senior investigative liaison to be stationed within the Division with responsibility for coordinating the intellectual property rights enforcement efforts of the Bureau of Immigration and Customs Enforcement with the enforcement efforts of the Division.

“(5) AUTHORIZATION OF APPROPRIATIONS.—In addition to any sums hereafter authorized to be appropriated, there are authorized to be appropriated to the Department of Homeland Security for the operations of the Division within the Bureau of Customs and Border Protection the following sums, to remain available until expended:

“(A) $3,000,000 for fiscal year 2007.

“(B) $3,400,000 for fiscal year 2008.

“(C) $3,800,000 for fiscal year 2009.

“(D) $4,200,000 for fiscal year 2010.

“(E) $4,600,000 for fiscal year 2011.

“(e) Enforcement other than intellectual property rights enforcement.—The Director of Immigration and Customs Enforcement shall assign a senior investigative liaison to be stationed within the Office of Field Operations of the Bureau of Customs and Border Protection with responsibility for coordinating the enforcement efforts of the Bureau of Immigration and Customs Enforcement, other than enforcement efforts relating to the protection of intellectual property rights, with the enforcement efforts of the Bureau of Customs and Border Protection.

“(f) Regulations to implement trade agreements.—The Commissioner of Customs shall designate no less than 5 attorneys within the Bureau of Customs and Border Protection with primary responsibility for the prompt development and promulgation of regulations necessary to implement any trade agreement entered into by the United States.”.

(c) Report by the Comptroller General.—Not later than 1 year after the date of the enactment of this Act, the Comptroller General of the United States shall assess and report to Congress regarding—

(1) the allocation of personnel and resources of the Bureau of Customs and Border Protection to commercial operations, including inspection and cargo clearance at ports of entry and revenue functions described in section 412(b)(2) of the Homeland Security Act of 2002;

(2) the effectiveness of the Bureau of Customs and Border Protection's enforcement of the priority trade functions described in section 5A of the Act of February 13, 1911, as added by section 241 of this Act;

(3) any recommendations for the further dedication of resources needed to facilitate trade, ensure compliance with United States trade laws, and protect customs revenue; and

(4) in consultation with the COAC, the extent to which the merchandise processing fee and other user fees are sufficient to pay for the related services provided by personnel of the Bureau of Customs and Border Protection and recommendations for adjusting such fees.

(d) Hours of operation.—

(1) STUDY.—The Commissioner of Customs shall study the feasibility of extending the hours of operation at ports of entry into the United States, taking into account differentiating factors such as geographic location, actual and projected trade volume, infrastructure, and staffing level, and report the results of the study to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives no later than September 30, 2007.

(2) PILOT PROGRAM.—During fiscal year 2007, the Commissioner of Customs shall extend the hours of commercial operation at the Santa Teresa Port-of-Entry to a minimum of 16 hours per day. The Commissioner shall report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives no later than September 30, 2007, on the impact of such extended hours of operation on the port facility, staff, and trade volume handled by the port, and shall determine whether to extend such hours of operation beyond fiscal year 2007.

SEC. 301. Authorization of appropriations for United States International Trade Commission.

(a) Fiscal year 2007.—There are authorized to be appropriated for the salaries and expenses of the United States International Trade Commission not to exceed $64,200,000 for fiscal year 2007.

(b) Fiscal years 2008 and 2009.—Section 330(e)(2)(A) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)) is amended by striking clauses (i) and (ii) and inserting the following:

“(i) $67,100,000 for fiscal year 2008.

“(ii) $69,600,000 for fiscal year 2009.”.

SEC. 302. Authorization of appropriations for the Office of the United States Trade Representative.

(a) Fiscal year 2007.—There are authorized to be appropriated for the salaries and expenses of the Office of the United States Trade Representative not to exceed $47,800,000 for fiscal year 2007.

(b) Fiscal years 2008 and 2009.—Section 141(g)(1)(A) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)(A)) is amended by striking clauses (i) and (ii) and inserting the following:

“(i) $49,700,000 for fiscal year 2008.

“(ii) $51,600,000 for fiscal year 2009.”.

SEC. 401. Methamphetamine and methamphetamine precursor chemicals.

(a) Definition.—In this section, the term “methamphetamine precursor chemicals” means the chemicals ephedrine, pseudoephedrine, or phenylpropanolamine, including each of the salts, optical isomers, and salts of optical isomers of such chemicals.

(b) Compliance with performance plan requirements.—For each of the fiscal years of 2007 through 2011, as part of the annual performance plan required in the budget submission of the Bureau of Customs and Border Protection under section 1115 of title 31, United States Code, the Commissioner of Customs shall establish performance indicators relating to the seizure of methamphetamine and methamphetamine precursor chemicals in order to evaluate the performance goals of the Bureau with respect to the interdiction of illegal drugs entering the United States.

(c) Study and report relating to methamphetamine and methamphetamine precursor chemicals.—

(1) ANALYSIS.—The Commissioner of Customs shall, on an annual basis, analyze the movement of methamphetamine and methamphetamine precursor chemicals into the United States. In conducting the analysis, the Commissioner shall—

(A) consider the entry of methamphetamine and methamphetamine precursor chemicals through ports of entry, between ports of entry, through the mails, and through international courier services;

(B) examine the export procedures of each foreign country where the shipments of methamphetamine and methamphetamine precursor chemicals originate and determine if changes in the country's customs provisions would alleviate the export of methamphetamine and methamphetamine precursor chemicals; and

(C) identify emerging trends in smuggling techniques and strategies.

(2) REPORT.—Not later than September 30, 2007, and annually thereafter, the Commissioner shall submit a report to the Committee on Finance and the Committee on Foreign Relations of the Senate, and the Committee on Ways and Means and the Committee on International Relations of the House of Representatives, that includes—

(A) the analysis described in paragraph (1); and

(B) the Bureau's utilization of the analysis to target shipments presenting a high risk for smuggling or circumvention of the Combat Methamphetamine Epidemic Act of 2005 (Public Law 109–177).

(3) AVAILABILITY OF ANALYSIS.—The Commissioner shall ensure that the analysis described in paragraph (1) is made available in a timely manner to the Secretary of State to facilitate the Secretary in fulfilling the Secretary's reporting requirements in section 722 of the Combat Methamphetamine Epidemic Act of 2005 (22 U.S.C. 2291h).

SEC. 402. United States port and terminal operator competitiveness.

(a) Review and report on port competitiveness.—The Commissioner of Customs, in consultation with the Secretary of the Treasury and the United States Trade Representative, shall review and compare the fees, charges, and standards imposed on United States ports, port terminal operators, and persons who use United States ports with the fees, charges, and standards imposed on ports and port terminal operators in Canada or Mexico and persons who use those ports.

(b) Content of review.—The review described in subsection (a) shall include an assessment of the impact of the fees, charges, and standards on the competitiveness of United States ports and an analysis of whether the fees, charges, and standards result in the diversion of cargo from United States ports to ports in Canada or Mexico.

(c) Report.—Not later than 1 year after the date of the enactment of this Act, the Commissioner shall submit a report on the results of the review conducted under subsection (a) along with recommendations for addressing any negative impact the fees, charges, and standards have on the competitiveness of United States ports and port terminal operators. The report shall be submitted to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.

SEC. 403. Charter flights.

Section 13031(e)(1) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(e)(1)) is amended—

(1) by striking “(1) Notwithstanding section 451 of the Tariff Act of 1930 (19 U.S.C. 1451) or any other provision of law (other than paragraph (2))” and inserting the following:

“(1) IN GENERAL.—

“(A) SCHEDULED FLIGHTS.—Notwithstanding section 451 of the Tariff Act of 1930 (19 U.S.C. 1451) or any other provision of law (other than subparagraph (B) and paragraph (2))”; and

(2) by adding at the end the following:

    “(B) CHARTER FLIGHTS.—If a charter air carrier (as defined in section 40102(13) of title 49, United States Code) specifically requests that customs border protection services for passengers and their baggage be provided for a charter flight arriving after normal operating hours at an airport that is an established port of entry serviced by the Bureau of Customs and Border Protection and overtime funds for those services are not available, the appropriate customs border protection officer may assign a sufficient number of employees from the Bureau of Customs and Border Protection (if available) to perform any service that could lawfully be performed during regular hours of operation, and any overtime fees incurred in connection with such service shall be paid by the charter air carrier.”.

SEC. 404. Technical amendments to customs modernization.

(a) Entry of merchandise.—Section 484(a) of the Tariff Act of 1930 (19 U.S.C. 1484(a)) is amended—

(1) in paragraph (1), by amending subparagraph (A) to read as follows:

“(A) make entry therefor by filing with the Bureau of Customs and Border Protection such documentation or, pursuant to an authorized electronic data interchange system, such information as is necessary to enable the Bureau of Customs and Border Protection to determine whether the merchandise may be released from custody of the Bureau of Customs and Border Protection;”; and

(2) in paragraph (2)(A), in the second sentence, by inserting after “covering” the following: “merchandise released under a special delivery permit pursuant to section 448(b) and”.

(b) Refunds and errors.—Section 520(a) of the Tariff Act of 1930 (19 U.S.C. 1520(a)) is amended—

(1) in paragraph (1), by striking the semicolon at the end and inserting a period;

(2) in paragraph (2), by striking “; and” at the end and inserting a period; and

(3) in paragraph (4)—

(A) by inserting “an importer of record declares or” before “it is ascertained”; and

(B) by striking “by reason of clerical error”.

(c) Entry from warehouse.—Section 557(a) of the Tariff Act of 1930 (19 U.S.C. 1557(a)) is amended—

(1) in paragraph (1)—

(A) in the second sentence, by inserting after “the date of importation” the following: “, or such longer period of time as the Bureau of Customs and Border Protection may at its discretion permit upon proper request being filed and good cause shown”; and

(B) in subparagraph (A), by inserting after “the date of importation” the following: “or such longer period of time as the Bureau of Customs and Border Protection may at its discretion permit upon proper request being filed and good cause shown”; and

(2) in paragraph (2), by inserting after “the date of importation” the following: “, or such longer period of time as the Bureau of Customs and Border Protection may at its discretion permit upon proper request being filed and good cause shown,”.

(d) Abandoned goods.—Section 559 of the Tariff Act of 1930 (19 U.S.C. 1559) is amended by inserting after “the date of importation” each place it appears the following: “, or such longer period of time as the Bureau of Customs and Border Protection may at its discretion permit upon proper request being filed and good cause shown”.

(e) Manipulation in warehouse.—Section 562 of the Tariff Act of 1930 (19 U.S.C. 1562) is amended—

(1) by amending the first sentence to read as follows: “Merchandise shall only be withdrawn from a bonded warehouse in such quantity and in such condition as the Secretary of the Treasury shall by regulation prescribe.”; and

(2) in the second sentence, by striking “All merchandise so withdrawn” and all that follows through “except that upon permission therefor” and inserting “Upon permission”.

SEC. 405. Articles repaired or altered.

(a) In general.—U.S. Note 3 to subchapter II of chapter 98 of the Harmonized Tariff Schedule of the United States is amended by adding at the end the following:

“(f) For purposes of subheading 9802.00.40 or 9802.00.50, an article exported and subsequently imported into the United States shall be considered to retain its identity notwithstanding that it may contain one or more essential components recovered from other such or similar articles exported from the United States.”.

(b) Effective date.—The amendment made by this section applies to articles classifiable under subheading 9802.00.40 or 9802.00.50 of the Harmonized Tariff Schedule of the United States that are entered, or withdrawn from warehouse for consumption, on or after the date that is 60 days after the date of the enactment of this Act.