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1976/10/15 HR2177 Duty Exemption for Certain Aircraft Components
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1976/10/15 HR2177 Duty Exemption for Certain Aircraft Components
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The original documents are located in Box 64, folder "10/15/76 HR2177 Duty Exemption
for Certain Aircraft Components" of the White House Records Office: Legislation Case
Files at the Gerald R. Ford Presidential Library
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
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domain. The copyrights to materials written by other individuals or organizations are presumed to
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copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Digitized from Box 64 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
APPROVED
8/0/15/76
THE WHITE HOUSE
ACTION
WASHINGTON
Last Day: October 18
October 13, 1976
Posted
MEMORANDUM FOR THE PRESIDENT
10/15/76
FROM:
JIM CANNON
archives
SUBJECT:
H.R. 2177 - Duty Exemption for Certain
10/15/76
Aircraft Components
Attached for your consideration is H.R. 2177, sponsored by
Representative Conable.
The enrolled bill exempts from duty certain aircraft
components and materials installed in aircraft previously
exported from the United States and reimported before 1970.
A detailed explanation of the provisions of the enrolled
bill is provided in OMB's enrolled bill report at Tab A.
OMB, Max Friedersdorf, Counsel's Office (Kilberg) and I
recommend approval of the enrolled bill.
RECOMMENDATION
That you sign H.R. 2177 at Tab B.
S
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
STATE
WASHINGTON. D.C. 20503
OCT 11 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 2177 - Duty exemption for
certain aircraft components
Sponsor - Rep. Conable (R) New York
Last Day for Action
October 18, 1976 - Monday
Purpose
Exempts from duty certain aircraft components and
materials installed in an aircraft previously exported
from the United States and reimported before 1970.
Agency Recommendations
Office of Management and Budget
Approval
Department of the Treasury
No objection
Department of Commerce
No objection
Office of the Special Represen-
tative for Trade Negotiations
No objection (Informally)
Department of State
No objection
Department of Labor
No objection (Informally)
Department of Justice
Defers to Treasury
Discussion
This enrolled bill would exempt from the duties assessed
on aircraft reimported into the United States the value
of any components or materials of United States origin
which were installed in the aircraft when it was
previously in the United States. This exemption would
apply only if the aircraft's value had not been enhanced
while it was abroad, if it had been reimported before
1970, and if the customs documents on the reimported
aircraft have not been finally reviewed and closed at
the time the Act would become effective. Finally,
2
in order to be eligible for the duty exemption which
H.R. 2177 would provide, a request would have to be
filed with the customs officer concerned within 30
days of enactment.
Because of the conditions and restrictions incorporated
into H.R. 2177, it has the effect of private relief
legislation. It apparently applies to a unique case
of a certain British-made aircraft which was ferried
into the United States with temporary controls and
instrumentation. These temporary controls were replaced
by an American-made avionics system and the aircraft was
sold to a foreign corporation and exported. Subsequently
the aircraft was purchased by an American firm and
reimported in 1969. The effect of the bill would be
to relieve this American firm, Page Airways, Inc., of
liability for the duty assessed on these American made
controls--an amount of $27,943.52.
The Executive Branch expressed no objection to the
legislation in reporting to Congress, on the grounds
that it appears equitable to exempt products of the
United States from duty when such products are fabricated
components of an article previously exported and then
reentered, and when the components of United States origin
would not have been advanced in value or improved in
condition while abroad. Moreover, exemption from duty
in this case would be consistent with the duty-free
treatment now provided for products of the United States
when returned after having been exported and without
having been advanced in value. Finally, the concerned
agencies take the same position in their attached enrolled
bill letters.
Paul H. Chein O'Neill
Acting Director
Enclosures
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
18
Date: October 11
Time: 1006pm
FOR ACTION: Bill Seidman oh
CC (for information):
Paul Leach
Jack Marsh
Max Friedersdorf
for
Ed Schmults
Bobbie Kilberg
en
Steve McConahey defer
FROM THE STAFF SECRETARY
DUE: Date:
October 12
Time: 1100am
SUBJECT:
H.R.2177-Duty exemption for certain aircraft components
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: October 11
Time: 1000pm
FOR ACTION:
Bill Seidman
cc (for information):
Paul Leach
Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
FROM THE STAFF SECRETARY
DUE: Date:
October 13
Time: 1100am
SUBJECT:
H.R.2177-Duty exemption for certain aircraft components
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
object
no
puz
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
For the Fresident
telephone the Staff Secretary immediately.
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
'e: October 11
Time: 1000pm
ACTION:
Bill Seidman
cc (for information):
Paul Leach
Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
FROM THE STAFF SECRETARY
DUE: Date:
October 13
Time: 1100am
SUBJECT:
H.R.2177-Duty exemption for certain aircraft components
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
-
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
OK PC1
10/12/76
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
For the Fresident
telephone the Staff Secretary immediately.
A 'ION MEMORANDUM
WASHINGTON
LOG NO.:
D
October 11
Time: 1000pm
FOR ACTION:
Bill Seidman
cc (for information):
Paul Leach
Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
FROM THE STAFF SECRETARY
DUE: Date:
October 13
Time: 1100am
SUBJECT:
H.R.2177-Duty exemption for certain aircraft components
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
-
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Recommed approval mef
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
Junes M. Cannon
For the President
telephone the Staff Secretary immediately.
ACTI J MEMORANDUM
WASHINGTON
LOG NO.:
Date )ctober 11
Time: 1000pm
FOR
'ION:
Bill Seidman
cc (for information):
Paul Leach
Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
FROM THE STAFF SECRETARY
DUE: Date:
October 13
Time: 1100am
SUBJECT:
H.R.2177-Duty exemption for certain aircraft components
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
appoir Kelbey 10/12/76
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
Junes V. Cannon
For the Fresident
telephone the Staff Secretary immediately.
OF
DEPARTMENT THE 1789 THE TREASURY
THE DEPUTY SECRETARY OF THE TREASURY
WASHINGTON, D.C. 20220
OCT 7 1976
Director, Office of Management and Budget
Executive Office of the President
Washington, D. C. 20503
Attention: Assistant Director for Legislative
Reference
Sir:
Reference is made to your request for the views of this Department
on the enrolled enactment of H.R. 2177, "To exempt from duty certain
aircraft components and materials installed in aircraft previously exported
from the United States where the aircraft is returned without having been
advanced in value or improved in condition while abroad."
The enrolled enactment exempts from the operation of the Tariff
Schedules of the United States certain components of a British-made
aircraft imported into the United States on January 20, 1969. It would
specifically exempt from duty the value of American-made instrumentation
and interior furnishings installed into the aircraft in the United States
prior to its exportation to Canada. The enrolled enactment is specifically
limited to aircraft entered for consumption before 1970 pursuant to an entry
which is unliquidated as of the date of enactment.
The enrolled enactment is identical to H.R. 5026, a bill which was
introduced in the 93d Congress. In our report to the House Committee
on Ways and Means on H.R. 5026, we opposed passage of the bill since it
would benefit only a single importer. Consequently, it would grant that
importer more favorable treatment than that accorded other importers.
However, since both Houses of Congress have determined that the fact
situation presented provides a basis for legislative relief, the Depart-
ment would have no objection to a recommendation that the enrolled enactment
be approved by the President.
Sincerely yours,
George H. Dixon
DEPARTMENT OF COMMERCE
GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
OCT 7 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Attention: Assistant Director for Legislative Reference
Dear Mr. Lynn:
This is in reply to your request for the views of this Department
concerning H.R. 2177, an enrolled enactment
"To exempt from duty certain aircraft components and
materials installed in aircraft previously exported
from the United States where the aircraft is returned
without having been advanced in value or improved in
condition while abroad."
H.R. 2177 would provide duty exemption for components and materials
of U.S. origin installed in aircraft in the United States when such air-
craft are exported from the United States and reimported without having
been advanced in value or improved in condition while abroad. H.R. 2177
would apply only if the aircraft were entered for consumption before
1970 pursuant to an entry which is unliquidated as of the date of
enactment of this legislation.
H.R. 2177 applies to a unique case in which a used aircraft with
U.S. components was purchased abroad and imported into the United
States. H.R. 2177 would exempt from duty the U.S. components which
had been installed in the plane following a previous importation.
The Department of Commerce would have no objection to approval by
the President of H.R. 2177.
Enactment of this legislation would not involve any expenditure
of funds by this Department.
Sincerely,
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
DEPARTMENT OF STATE
X
Washington, D.C. 20520
OCT 8 1976
Dear Mr. Lynn:
The Secretary has asked me to reply to your
communication (Office of Management and Budget
Memorandum, dated October 5, signed by Mr. Frey)
requesting our views on H.R. 2177, an enrolled
bill dealing with the dutiable status of United
States components and materials in certain
aircraft of foreign manufacture.
The Department of State has no objection
to the enactment of the proposed legislation
from the standpoint of the foreign relations
of the United States. We note that certain
previously exported aircraft of foreign manu-
facture (containing domestically produced
components and materials incorporated in the
aircraft in the United States prior to exporta-
tion) when returned to the United States are
subject to duty at full value. Full value
includes the value of United States components
and materials. The proposed legislation provides
that the aircraft covered by the bill would be
subject to duty only on the basis of the full
value of the plane less the cost of United States
components and materials at the time of instal-
lation in the United States, including the cost
of installation.
Sincerely yours,
Kenpen Kempton B. Tenkins
Acting Assistant Secretary
for Congressional Relations
ASSISTANT ATTORNEY GENERAL
LEGISL ATIVE AFFAIRS
Department of Justice
Washington, D.C. 20530
October 8, 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Dear Mr. Lynn:
In compliance with your request, I have examined a
facsimile of the enrolled bill H.R. 2177, "To exempt from
duty certain aircraft components and materials installed
in aircraft previously exported from the United States
where the aircraft is returned without having been
advanced in value or improved in condition while abroad."
H.R. 2177 provides that certain aircraft previously
exported and composed at the time of such exportation,
in part, of components and materials which are products
of the United States, and which were installed while the
aircraft was within the United States, will be dutiable
at the regular rate of duty appropriate to such aircraft
provided for in item 694.40 of the Tariff Schedule and
assessed on the full value of such aircraft less the cost
of United States components and materials at the time of
installation including the case of such installation.
The provisions of H.R. 2177 will only apply this
tariff treatment to such aircraft previously exported and
returned to the United States without having been advanced
in value or improved in condition while abroad and which
was entered for consumption before 1970 pursuant to an
entry which is unliquidated as of the date of enactment
of H.R. 2177.
The Department of Justice defers to the Department of
the Treasury as to whether this bill should receive
Executive approval.
MICHAEL M. UHIMANN
Assistant Attorney General
U.S. DEPARTMENT OF LABOR
OFFICE OF THE SECRETARY
WASHINGTON
OCT 8
1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Executive Office of the President
Washington, D. C. 20503
Dear Mr. Lynn:
This is in response to your request for the views
of the Department of Labor on the enrolled enactment of
H.R. 2177, "To exempt from duty certain aircraft
components and materials installed in aircraft previously
exported from the United States where the aircraft is
returned without having been advanced in value or
improved in condition while abroad." The Department
of Labor would have no objection to the President's
approval of this measure.
Sincerely,
Calendar No. 1279
94TH CONGRESS
SENATE
REPORT
2d Session
No. 94-1349
AIRCRAFT COMPONENTS
SEPTEMBER 29, 1976.-Ordered to be printed
Mr. LONG, from the Committee on Finance,
submitted the following
REPORT
[To accompany H.R. 2177]
The Committee on Finance, to which was referred the bill (H.R.
2177) to exempt from duty certain aircraft components and materials
installed in aircraft previously exported from the United States where
the aircraft is returned without having been advanced in value or im-
proved in condition while abroad, having considered the same, reports
favorably thereon with an amendment, and an amendment to the title
and recommends that the bill as amended do pass.
DESCRIPTION OF PROVISIONS
Section 1 of H.R. 2177 would provide that certain aircraft previously
exported and composed at the time of such exportation in part of
components and materials which are products of the United States and
which were installed while the aircraft was within the United States,
will be dutiable at the regular rate of duty appropriate to such aircraft
provided for in item 694.40 of the Tariff Schedules and assessed on the
full value of such aircraft less the cost of U.S. components and ma-
terials at the time of installation including the cost of such installation.
The provisions of H.R. 2177 would apply the tariff treatment to such
aircraft previously exported and returned to the United States without
having been advanced in value or improved in condition while abroad
and which was entered for consumption before 1970 pursuant to an
entry which is unliquidated as of the date of enactment of H.R. 2177.
As reported, the provisions of H.R. 2177 would require that an ap-
propriate request for liquidation of any entry under the bill must be
filed on or before the 30th day after date of enactment.
(1)
3
2
Section 2 of H.R. 2177, as amended, contains a second Committee
sequently, the aircraft was purchased by an American firm and
amendment relating to the present system of classification under the
reimported.
Tariff Schedules of the United States (TSUS) of certain imports of
It is claimed that such reimportation involving an article pre-
fabrics and apparel composed of blends of cotton and man-made fiber.
viously exported from the United States and not advanced in value
Under present law, imports of fabrics and apparel composed of blends
abroad should have been permitted duty-free entry under item 800.00
of cotton and man-made fibers are classified according to the chief
of the tariff schedules. Such duty-free entry was denied by the Bu-
reau of Customs. The Bureau also ruled that the instrumentation of
value of their components. The Committee amendment would amend
the General Headnote of the TSUS to provide that such imports would
American manufacture could not be separately identified and granted
duty-free treatment under item 800.00.
be classified according to the chief weight of their components.
Public hearings were held by the Committee on Finance on
Section 3 of H.R. 2177, as reported, contains a Committee amend-
ment relating to the categories of countries currently excluded from
August 24, 1976, on tax and tariff bills. During these hearings, no
treatment as beneficiary developing countries under the Generalized
objections to the aircraft components provisions of this bill from the
System of Preferences under the Trade Act of 1974 (Public Law 93-
Administration or any other source.
Section 2. Under the headnotes to Part 3 of Schedule 3 of the Tariff
618). The Committee amendment would provide that countries which
Schedules of the United States, the import duty on fabrics which are
are members of the Organization of Petroleum Exporting Countries
a blend of cotton and man-made fibers is determined on the basis of the
(or any other producing-country arrangement) and which did not
component of the blend which is of chief value. Thus, with a blended
participate in the oil embargo or withhold supplies of vital commodity
fabric containing 50% cotton and 50% man-made fiber, the fabric or
resources from international trade may be designated beneficiary
developing countries eligible for preferential tariff treatment. The
garment will be entered with a duty reflecting the component with a
greater value. In such a blend, if the cotton is more valuable, the
amendment would also provide that any country which, in the future,
blended fabric or garment would be entered at the applicable rate of
participates in an embargo would be automatically removed from
eligibility for preferential treatment in the U.S. market.
duty on cotton. In general, the duties on man-made fabrics and gar-
ments are roughly double the duties on similar cotton fabrics and
GENERAL STATEMENT
garments.
Because the price of cotton has risen dramatically in the last year
Section 1.-Headnote 1 of part 1 (articles exported and returned
and the price of man-made fibers has remained relatively steady, the
of schedule 8 of the Tariff Schedules of the United States provides
value of cotton by weight now exceeds the value of man made fibers by
that "in the absence of a specific provision to the contrary, the
weight. As a result of the reversal in value ratios of cotton to man-
tariff status of an article is not affected by the fact it was previously
made fibers, textile articles imported into the United States have
imported into the customs territory of the United States and cleared
are now dutiable at the lower rates applicable to cotton.
through customs whether or not a duty was paid upon such previous
The amendment is intended to restore the duty treatment in effect
importation". Subpart A of part 1 of schedule 8 subsequently sets forth
prior to the price rise in cotton.
a number of specific provisions (item numbers 800.00 through 802.40)
The Committee also believes that the chief value method of clas-
under which articles previously exported may be imported free of duty
sifying blends has many difficulties. Sharp fluctuations in the prices of
if not advanced in value or improved in condition while abroad. For
materials may have the effect unilateral changes in the rates of duty
example, item 800.00 provides that "products of the United States
charged. Chief value depends, for example, on the place and time of
when returned after having been exported, without having been
purchase, as well as prices and grades of fibers. The amendment re-
advanced in value or improved in condition by an process of manu-
moves much of the classification difficulty by providing for a chief
facture or other means while abroad" may enter free of duty.
weight, rather than a chief value, tariff assessment.
H.R. 2177 as reported would provide for an exemption from duty
Enactment of the amendment does not change the rates of tariff
for certain aircraft components and materials installed in aircraft pre-
imposed by the Tariff Schedules of the United States, but reclassifies
viously exported from the United States where the aircraft is returned
the products subject to those duties. The Committee notes that at the
without having been advanced in value or improved in condition while
time when the current duty rates were established by the Congress,
abroad.
the value of polyester staple in foreign countries exceeded cotton's
Although of possible broader implications as originally introduced
value many times over. Consequently, polyester/cotton textiles would
in the House, the bill involves the entry of a foreign aircraft which
have been chief value of polyester if only a fraction of the blend were
was imported into the United States and the appropriate duties were
polyester. The Committee believes this amendment will restore the
paid. This original duty paid entry of the aircraft involved ferrying it
rates of duty to levels which existed prior to the unanticipated price
to the United States with temporary instrumentation and controls.
advance of cotton.
These temporary controls were removed and replaced by avionics sys-
Enactment of the proposed legislation would change tariff classi-
tems and other equipment and furnishings of American manufacture.
fication at the present time for relatively few products since most
The aircraft was then sold to a foreign corporation and exported. Sub-
imported polyester/cotton blends are a 65/35 percentage by weight
ratio polyester/cotton and these products would continue to be sub-
ject to the rate of duty applicable to man-made fiber textiles. However,
4
5
it is anticipated that in the future as much as 30 percent of imported
e. Countries which do not eliminate reverse preferences by
apparel will be polyester/cotton blends in chief value of cotton be-
January 1, 1976, or do not take steps to assure that such prefer-
cause of increasing cotton/prices and relatively stable polyester prices.
ences do not have a significant adverse effect on U.S. commerce
If this amendment is not passed, the duties on polyester/cotton
by January 1, 1976.
blended apparel would, in effect, be cut in half. As a consequence, a
f. Countries which do not recognize arbitral awards to U.S.
large portion of the U.S. apparel industry, already seriously affected
citizens issued by arbitral bodies to which the parties have sub-
by imports could be wiped out.
mitted their dispute.
Section 3. Section 3 is a Committee amendment amending section
In the case of items d., e. and f., the President may make an excep-
(b) of the Trade Act of 1974. Title V of that Act authorizes
tion for particular countries when he deems it to be in the national
the President to extend duty-free treatment to certain eligible products
economic interest and reports such determination to Congress.
imported into the United States from beneficiary developing countries
The Committee amendment would delete from Section 502(b) (2)
for a 10-year period. The essential features of the program are as
of the Trade Act of 1974 all references to price increases or serious
follows:
disruption of the world economy. The effect of the committee amend-
-The President is authhorized to extend duty free treatment to
ment is to draw a distinction between OPEC countries or countries
specified products imported from developing countries;
belonging to similar arrangements which withhold supplies of vital
-The President designates beneficiary developing countries; 26
commodity resources from international trade and certain other coun-
countries are expressly excluded;
tries which do not participate in such actions. Countries which with-
-Eligible articles must be imported directly from the developing
held supplies during the oil embargo in 1973 would still not be eligible
country; the value added in that country must be at least a mini-
for tariff preferences, whereas countries which did not participate in
mum percentage (35%) of the value of the article, except in those
the embargo would become eligible to be designated by the President
cases where the country is a member of a free trade association
as of September 1, 1976.
in which case the local content from two or more associated
Countries which are members of OPEC but which apparently did
countries must be 50%
not embargo the United States during the oil embargo include Iran,
-Articles subject to import relief or national security relief actions
Indonesia, Ecuador, Venezuela, and Nigeria.
are excluded;
The amendment also would require that a country which is a mem-
-Articles imported from any one country are excluded if the im-
ber of a cartel and in the future withholds supplies of vital materials
ports of the article from that country exceed $25 million or 50%
from the world economy be removed from the list of beneficiary devel-
of total U.S. imports of that article, with certain limited excep-
oping countries.
tions;
The Administration strongly supports the changes in the General-
-The system will be reviewed in a report to Congress after five
ized System of Preferences embodied in section 3 of the bill.
years and will expire after ten years.
Present law excludes countries within the following categories from
COSTS OF CARRYING OUT THE BILL AND EFFECT ON THE REVENUES
eligibility to receive generalized preferences:
OF THE BILL
a. All communist countries, except those which receive MFN
treatment, which are members of the GATT and the IMF, and
In compliance with section 252 (a) of the Legislative Reorganization
which are not dominated by international communism.
Act of 1970, the following statement is made relative to the costs to
b. Any country which is a member of OPEC or has entered
be incurred in carrying out this bill and the effect on the revenues of
into any other cartel-type arrangement, and acts to withhold sup-
the bill. The Committee estimates that the tariff change with respect
plies of vital materials or to charge a monopolistic price which
to certain aircraft components and materials curtail a customs revenue
creates serious disequilibrium in the world economy. Countries
loss on a one-time basis of not more than $24,640 in 1976. There will
which are members of such cartels or OPEC and which act to
be some loss of revenues as a result of the amendment dealing with
withhold supplies or charge unreasonable prices may qualify
OPEC nations but the amount is not believed to be large and depends
for preferential treatment in the U.S. market if they entered into
on Presidential action. The amendment relating to textile fibers will
an agreement with the United States or an agreement to which
increase customs revenues by an undetermined amount.
the United States is a party, which assures U.S. access to essential
articles at reasonable prices.
VOTE OF COMMITTEE IN REPORTING THE BILL
c. Any country which has expropriated the property of a U.S.
national without provision for prompt, adequate, and effective
In compliance with section 133 of the Legislative Reorganization
compensation or without submitting the dispute to arbitration or
Act, as amended, the following statement is made relative to the vote
carrying on good-faith negtiations.
of the committee on reporting the bill. This bill was ordered favorably
d. Any country which has not taken adequate steps to cooperate
reported by the committee without a roll call vote and without
with the United States to prevent narcotics and other controlled
objection.
substances from unlawfully entering the United States.
6
7
CHANGES IN EXISTING LAW
developing country under this section-
In addition, the President shall not designate any country a beneficiary
In compliance with subsection (4) of Rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as re-
(1) if such country is a Communist country, unless (A) the
ported, are shown as follows (existing law proposed to be omitted is
products of such country receive nondiscriminatory treatment,
(B) such country is a contracting party to the General Agreement
enclosed in black brackets, new matter is printed in italic, existing
on Tariffs and Trade and a member of the International Mone-
law in which no change is proposed is shown in roman) :
tary Fund, and (C) such country is not dominated or controlled
by international communism;
TARIFF SCHEDULES OF THE UNITED STATES
(2) if such country is a member of the Organization of Petro-
*
*
*
*
leum Exporting Countries, or a party to any other arrangement
of foreign countries, and such country [participates] participates
SCHEDULE 3.-TEXTILE FIBERS AND TEXTILE PRODUCTS
or has participated in any action pursuant to such arrangement
the effect of which is to withhold supplies of vital commodity re-
*
sources from international trade [or to raise the price of such com-
modities to an unreasonable level and to cause serious disruption
Schedule 3 headnotes:
of the world economy; withhold supplies of vital commodity re-
*
sources from international trade or to raise the price of such com-
modities to an unreasonable level which causes serious disruption
8. Notwithstanding any other provision of law, for the purposes of
of the world economy
;
the tariff schedules an article to which this schedule applies, 90 per-
*
cent or more of the total fiber content of which consists, by weight, of
cotton and man-made fibers—
(a) shall "be treated as if it were in chief value of cotton if
65 percent or more of the total fiber content of the article con-
sists, by weight, of cotton (whether the article is in chief value
of cotton or not), and
(b) shall be treated as if it were in chief value of man-made
fiber if less than 65 percent of the total fiber content of the
article consists by weight, of cotton (whether the article is in
chief value of man-made fiber or not).
TRADE ACT OF 1974
*
TITLE V-GENERALIZED SYSTEM OF PREFERENCES
*
SEC. 502. BENEFICIARY DEVELOPING COUNTRY.-
*
(b) No designation shall be made under this section with respect to
any of the following:
Australia
Japan
Austria
Monaco
Canada
New Zealand
Czechoslovakia
Norway
European Economic Commu-
Poland
nity member states
Republic of South Africa
Finland
Sweden
Germany (East)
Switzerland
Hungary
Union of Soviet Socialist
Iceland
Republics
94TH CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 94-1060
EXEMPTION FROM DUTY OF CERTAIN COMPONENTS
AND MATERIALS INSTALLED IN AIRCRAFT PREVI-
OUSLY EXPORTED FROM THE UNITED STATES
APRIL 29, 1976.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. ULLMAN, from the Committee on Ways and Means,
submitted the following
REPORT
[To accompany H.R. 2177]
The Committee on Ways and Means, to whom was referred the bill
(H.R. 2177) to amend the Tariff Schedules of the United States to
provide for a partial exemption from duty for articles previously ex-
ported from the United States composed in part of fabricated com-
ponents the products of the United States, when returned after hav-
ing been exported, without having been advanced in value or improved
in condition while abroad, having considered the same, report favor-
ably thereon with amendments and recommend that the bill as
amended do pass.
The amendments are as follows:
Strike out all after the enacting clause and insert in lieu thereof the
following:
"That in the case of any aircraft which—
(1) was previously exported from the United States,
(2) was composed, at the time of such exportation, in part of components
and materials which are products of the United States and which were
installed-
(A) while such aircraft was within the United States, and
(B) after such aircraft was operational,
(3) is returned to the United States after being SO exported without hav-
ing been advanced in value or improved in condition by any process of manu-
facture or other means while abroad, and
(4) was entered for consumption before 1970 pursuant to an entry which
is unliquidated as of the date of the enactment of this Act,
the rate of duty provided for in item 694.40 of the Tariff Schedules of the United
States (19 U.S.C. 1202) on the date of such entry shall, notwithstanding any
other provision of law, be assessed upon the full value of such aircraft less the
value of such components and materials. For the purposes of this Act, the value
of any such component or material is the cost of such component or material at
the time of installation in the aircraft plus the cost of such installation.
57-006
2
3
SEC. 2. No entry may be liquidated as provided for in the first section of this
original duty-paid entry of the aircraft involved ferrying it to the
Act unless request therefor is filed with the customs officer concerned on or before
United States with temporary instrumentation and controls. These
the thirtieth day after the date of the enactment of this Act.
temporary controls were removed and replaced by avionics systems
Amend the title SO as to read :
and other equipment and furnishings of American manufacture. The
A bill to exempt from duty certain aircraft components and materials installed
aircraft was then sold to a foreign corporation and exported. Subse-
in aircraft previously exported from the United States where the aircraft is
quently, the aircraft was purchased by an American firm and
returned without having been advanced in value or improved in condition while
reimported.
abroad.
It is claimed that such reimportation involving an article pre-
DESCRIPTION OF PROVISIONS
viously exported from the United States and not advanced in value
abroad should have been permitted duty-free entry under item 800.00
Section 1 of H.R. 2177 as reported would provide that certain
of the tariff schedules. Such duty-free entry was denied by the Bu-
aircraft previously exported and composed at the time of such expor-
reau of Customs. The Bureau also ruled that the instrumentation of
tation in part of components and materials which are products of the
American manufacture could not be separately identified and granted
United States and which were installed while the aircraft was within
duty-free treatment under item 800.00.
the United States, will be dutiable at the regular rate of duty appro-
H.R. 2177 as originally introduced would have made a permanent
priate to such aircraft provided for in item 694.40 of the Tariff Sched-
change in the Tariff Schedules permitting a partial exemption from
ules and assessed on the full value of such aircraft less the cost of
duty on articles which are composed in part of U.S. components and
U.S. components and materials at the time of installation including
which have been exported from the United States but later returned
the cost of such installation.
to the United States without having been advanced in value while
As reported, the provisions of H.R. 2177 would apply the tariff
abroad.
treatment to such aircraft previously exported and returned to the
Your Committee in considering the equities involved in entries of
United States without having been advanced in value or improved
this type concludes that the payment of duty on U.S. components and
in condition while abroad and which was entered for consumption
materials which are assembled into foreign articles while such articles
before 1970 pursuant to an entry which is unliquidated as of the date
are in the United States serves no purpose. However, the Committee
of enactment of H.R. 2177.
also concludes that an amendment to the Tariff Schedules generally
Section 2 of H.R. 2177, as reported would require that an appro-
covering such entries would be unwise in the light of tariff avoidance
priate request for liquidation of any entry under the bill must be filed
practices that might develop.
on or before the 30th day after date of enactment.
Therefore, the Committee amended the bill to provide that only cer-
tain aircraft previously exported, and composed at the time of such
GENERAL STATEMENT
exportation in part of components and materials installed in the
Headnote 1 of part 1 (articles exported and returned) of schedule
United States which are products of the United States, will be duti-
8 of the Tariff Schedules of the United States provides that "in the
able at the regular rate of duty provided for in item 694.40 of the
absence of a specific provision to the contrary, the tariff status of an
Tariff Schedules but assessed upon the full value of such aircraft less
article is not affected by the fact it was previously imported into the
the cost of such components and materials at the time of installation
customs territory of the United States and cleared through customs
including the cost of such installation.
whether or not a duty was paid upon such previous importation".
The Departments of the Treasury, State and Commerce and the
Subpart A of part 1 of schedule 8 subsequently sets forth a number
Office of the Special Representative for Trade Negotiations reported
of specific provisions (item numbers 800.00 through 802.40) under
no objections to the enactment of the bill as reported.
Public hearings were held by the Subcommittee on Trade of the
which articles previously exported may be imported free of duty if
Committee on Ways and Means on February 19 and 20, 1976, on duty-
not advanced in value or improved in condition while abroad. For
free entry and temporary duty suspension bills. No objections to this
example, item 800.00 provides that "products of the United States
legislation have been received by the committee from any source. A
when returned after having been exported, without having been
similar bill was reported to the House in the 92nd Congress. The
advanced in value or improved in condition by any process of manu-
House did not take action on the bill.
facture or other means while abroad" may enter free of duty.
Your committee believes that under the time limitation and other
H.R. 2177 as reported would provide for an exemption from duty
safeguards provided in the bill, as amended, that the exemption from
for certain aircraft components and materials installed in aircraft pre-
duty provided in H.R. 2177, is meritorious. Your committee is unan-
viously exported from the United States where the aircraft is returned
imous in recommending enactment of H.R. 2177.
without having been advanced in value or improved in condition while
abroad.
EFFECT OF THE BILL ON THE REVENUE AND VOTE OF THE COMMITTEE
Although of possible broader implications as originally introduced,
the bill involves the entry of a foreign aircraft which was imported
In compliance with clause 7 of Rule XIII of the Rules of the House
into the United States and the appropriate duties were paid. This
of Representatives, the following statement is made relative to the
H.R. 1060
H.R. 1060
4
effect on the revenues of this bill. Based on the known entries of air-
craft to which H.R. 2177 would be applicable, the customs revenue
loss on a one-time basis would be no more than $24,640 in 1976.
In compliance with clause 2(1) (2) (B) of Rule XI of the Rules
of the House of Representatives, the following statement is made with
respect to the vote by the Committee on the motion to report the bill.
This bill was unanimously ordered favorably reported as amended by
the Committee.
OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER HOUSE RULES
In compliance with clauses 2 (1) (3) and 2 (1) (4) of Rule XI of
the Rules of the House of Representatives, the following statements
are made.
With regard to subdivision (A) of clause 3 relating to oversight
findings, your committee advises that in its review of the special
circumstances with respect to certain aircraft components and mate-
rials installed in aircraft previously exported from the United States
where the aircraft is returned without having been advanced in value
or improved in condition while abroad, it concluded it would be desir-
able to exempt from duty certain articles covered by this bill, by
reason of the considerations outlined above in the General Statement.
With regard to subdivision (B) of clause 3, the Committee advises
the bill involves no new budgetary authority or new increased tax
expenditures.
With respect to subdivisions (C) and (D) of clause 3, the Com-
mittee advises that the Director of the Congressional Budget Office
concurs in the estimate of a one-time customs revenue loss affected by
this bill. The Committee on Government Operations has submitted no
oversight findings or recommendations with respect to the subject
matter contained in the bill.
In compliance with clause (2) (1) (4) of Rule XI, the Committee
states that this bill would not have an inflationary impact on prices
and costs in the operation of the general economy.
H.R. 1060
H.R. 2177
Ainety-fourth Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the nineteenth day of January,
one thousand nine hundred and seventy-six
An Act
To exempt from duty certain aircraft components and materials installed in
aircraft previously exported from the United States where the aircraft is
returned without having been advanced in value or improved in condition
while abroad.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That in the case of
any aircraft which-
(1) was previously exported from the United States,
(2) was composed, at the time of such exportation in part of
components and materials which are products of the United States
and which were installed-
(A) while such aircraft was within the United States, and
(B) after such aircraft was operational,
(3) is returned to the United States after being SO exported
without having been advanced in value or improved in condition
by any process of manufacture or other means while abroad, and
(4) was entered for consumption before 1970 pursuant to an
entry which is unliquidated as of the date of the enactment of this
Act,
the rate of duty provided for in item 694.40 of the Tariff Schedules of
the United States (19 U.S.C. 1202) on the date of such entry shall,
notwithstanding any other provision of law, be assessed upon the full
value of such aircraft less the value of such components and materials.
For the purposes of this Act, the value of any such component or mate-
rial is the cost of such component or material at the time of installation
in the aircraft plus the cost of such installation.
SEC. 2. No entry may be liquidated as provided for in the first sec-
tion of this Act unless request therefor is filed with the customs officer
concerned on or before the thirtieth day after the date of the enactment
of this Act.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.