On March 30, 2012, Congress once again began the process of
working on passing a miscellaneous tariff bill (MTB). The process
commenced with the announcement by the Chairman of the Senate
Finance Committee and the Chairman of the House Ways and Means
Committee for Members of Congress to introduce tariff modification
legislation to be considered by April 30, 2012. However, due to the
overwhelming requests by Members, the deadline was pushed to May
16, 2012. The public comment period began on May
24th and was open until June 22, 2012.
The last few MTB cycles have been complicated by the politics
surrounding the definition of an earmark. In the spring of 2010,
Congress declared a ban on all earmarks, and included within the
definition of an earmark the term "limited tariff
benefit." Due to this language within the Earmark Disclosure
Rules, many members of Congress have declined to introduce tariff
modification legislation because of the concern that it may be
perceived as an earmark. This has complicated the process for many
companies seeking to receive a temporary suspension or duty
reduction, which is critical for many manufacturers to remain
On June 13, 2012, there was a bipartisan effort to reform the
MTB process with the introduction of the S. 3292, Temporary Duty
Suspension Process Act of 2012 by Senators Rob Portman (R-Ohio) and
Claire McCaskill (D-Mo.). The legislation would allow companies to
request duty suspensions or reductions directly through the
International Trade Commission (ITC), rather than requiring a
Member of Congress to first introduce legislation requesting the
reduction or suspension.
Currently, the MTB process requires that a Member of Congress
introduce legislation for each article for which a proponent is
requesting a tariff modification, that is then vetted by the
Congressional Budget Office (CBO), ITC, and a number of Executive
Branch agencies, such as the Department of Commerce and U.S.
Customs and Border Protection (CBP).
For a tariff modification bill to be eligible for inclusion in
the MTB, its proponents must be able to prove that the bill (1) is
non-controversial, and (2) is revenue-neutral, defined as costing
under $500,000 per year.
Potential Reform to the MTB Process. The
Temporary Duty Suspension Process Act of 2012 (S. 3292) (the
Act) would move the first steps of the MTB process out of
Congress and instead place the responsibilities for submission and
review of petitions for tariff suspensions or reductions with the
ITC. These petitions could be submitted by any member of the
public, or by a member of Congress, directly to the ITC. Under the
Act, petitions would be treated with equal weight, regardless
of their origination.
After a review process that includes a period of public comment
and consultation with relevant agencies, the ITC would propose a
draft bill containing the recommended duty suspensions or
reductions for the consideration of the Senate Finance Committee
and the House Ways and Means Committee. Accompanying the draft bill
would be a report to the Committee outlining compliance with the
statutory restraints on granting these suspensions and reductions,
as well as any objections from the public or other
agencies with which the ITC consulted.
New Process, Old Limits. As proposed, the
ITC review process would be constrained by limits such as
the MTB process has had in the past. Namely, any suspension or
reduction in tariffs must not decrease U.S. revenue by more than
$500,000 in 2013, or the equivalent of $500,000 multiplied by the
change in the Consumer Price Index (CPI) for the previous year as
compared to the CPI in 2012.
The suspension or reduction also must not pertain to any article
that is produced in the United States or any article that is
expected to be produced in the United States within a 12-month
period of the introduction of the draft bill.
Finally, any proposed suspension or reduction must be able to be
administered by CBP, and to this end, the ITC must consult the head
of that agency before proposing a draft bill.
Is Your Business Impacted? Much of the
substantive underpinnings of what articles are eligible for a
tariff suspension or reduction remain the same. The process by
which such duties are passed into law will change slightly if this
bill is passed. Under this new process, an interested firm can
petition the ITC directly for a tariff suspension or reduction,
removing the need to ask a member of Congress to introduce a bill.
In the end, Congress will still make the final decision on whether
the suspensions or reductions pass into law, but if passed, this
legislation will speed up the first steps of the process by
creating a less politically charged process for the initial review
and recommendation of petitions, perhaps streamlining the
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