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CUSTOMS SIMPLIFICATION ACT OF 1954

TUESDAY, JUNE 22, 1954

HOUSE OF REPRESENTATIVES,

COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

The committee met at 10:10 a. m., pursuant to call, in the committee room, New House Office Building, Hon. Daniel A. Reed (chairman) presiding.

The CHAIRMAN. The committee will come to order.

This morning the committee is scheduled to begin public hearings on H. R. 9476, introduced by Representative Byrnes of Wisconsin. H. R. 9476 is a bill to provide for the establishment of simplified customs-tariff schedules, to improve procedures for the tariff classification of unenumerated articles, to repeal or amend obsolete provisions of the customs laws, and for other purposes.

Without objection, the bill will be printed in the record at this point. (H. R. 9476 follows:)

[H. R. 9476, 83d Cong., 2d sess.]

A BILL To provide for the establishment of simplified customs tariff schedules, to improve procedures for the tariff classification of unenumerated articles, to repeal or amend obsolete provisions of the customs laws, and for other purposes

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

TITLE I-REVISION OF CUSTOMS TARIFF SCHEDULES

SEC. 101. This Act may be cited as the "Customs Simplification Act of 1954". SEC. 102. (a) The United States Tariff Commission (hereinafter referred to as the "Commission") shall promptly undertake a study of all provisions of the customs laws of the United States under which imported articles may be classified for the purpose of determining the applicable rate of duty or exemption from duty. including the dutiable and free lists and certain special provisions of the Tariff Act of 1930, as amended and as modified, the provisions of the Internal Revenue Code relating to the duties designated import taxes, as amended and as modified, and other laws. Before the expiration of two years after the enactment of this Act the Commission shall cause to be published in the Federal Register a proposed revision and consolidation of such provisions of the customs laws, including incidental changes in forms and amounts of rates, which, in the judgment of the Commission, will accomplish the following purposes:

(1) Establish schedules of tariff classifications which will be logical in arrangement and terminology and adapted to the changes which have occurred since 1930 in the character and importance of articles produced in and imported into the United States and in the markets in which they are sold.

(2) Eliminate anomalies in the classification of articles resulting from legislation, executive action, judicial decision, or other cause.

(3) Simplify, to the extent practicable, the determination and application of tariff classifications with respect to particular products by (i) eliminating multiple provisions for the tariff treatment of the same product; (ii) revising tariff descriptions; (iii) changing forms of rates of duty; (iv) establishing consistent and simplified principles and standards of tariff classification; and (v) establishing a single

1

classification provision for each group of articles which are subject now to different classifications, but which are similar in character or in competitive relationship. (b) The revised tariff schedules to be published in accordance with the preceding subsection shall specify two rates of duty for each classification provision, which rates may be identical or different. One such rate (hereinafter referred to as the "maximum rate") whether ad valorem, specific, or compound, shall be the rate, or equal to the aggregate of rates, prescribed by statute or by proclamation of the President made under section 336, Tariff Act of 1930 (U. S. C., 1952 edition, title 19, sec. 1336), on the date of publication of the revised schedules (even though temporarily suspended by Act of Congress). The second such rate (hereinafter referred to as the "general rate") shall be the rate, or equal to the aggregate of rates, applicable (even though temporarily suspended by Act of Congress) on the date of publication of the revised schedules to articles covered by such classification provision which are products of countries, other than Cuba and the Philippine Republic, whose products are entitled to the benefits of rates of duty established pursuant to trade agreements entered into under the authority of section 350, Tariff Act of 1930, as amended (U. S. C., 1952 edition, title 19, sec. 1351). If the Commission changes the form of the rate of any duty, or establishes a single classification provision and rate of duty for a group of articles formerly subject to different rates of duty, the revised rate, whether ad valorem, specific, or compound, shall be that which, in the judgment of the Commission, will bring substantially the same amount of duties as would have been collected by application of the superseded rate or rates, based upon reasonably available information as to the amounts of duties which were and would have been collected on imports entered, or withdrawn from warehouse, for consumption during the calendar years 1952 and 1953. For the purpose of specifying all rates under this subsection, such tolerance shall be applied as is no greater than necessary to result in the statement of each rate as follows:

(1) In a multiple of 5 if the rate or part thereof is ad valorem and 20 per centum or higher.

(2) In a multiple of 21⁄2 if the rate or part thereof is ad valorem and 10 per centum or higher, but under 20 per centum.

(3) In an even whole number if the rate or part thereof is ad valorem and under 10 per centum.

(4) In a multiple of 5 if the rate or part thereof is specific and 20 cents or higher per unit.

(5) In a multiple of 2% if the rate or part thereof is specific and 10 cents or higher, but under 20 cents per unit.

(6) In an even whole number if the rate or part thereof is specific and 5 cents or higher, but under 10 cents per unit.

(7) In a multiple of one-half if the rate or part thereof is specific and 1 cent or higher, but under 5 cents per unit.

(8) In a multiple of one-twentieth if the rate or part thereof is specific and under 1 cent per unit.

(c) No provision shall be included in any revised tariff schedule, as prepared pursuant to this section or as adjusted pursuant to section 105, which will have the effect of increasing or decreasing any existing rate of duty to an extent which, in the judgment of the Commission, would cause or threaten serious injury to domestic industry or materially increase or reduce imports of any particular article, or which would have the effect of transferring any article between the dutiable and free lists.

SEC. 103. After the expiration of sixty days after publication of the proposed tariff schedules in the Federal Register the Commission shall hold and complete public hearings with respect to such schedules and shall afford interested parties reasonable opportunity to present oral or written testimony at such hearings. SEC. 104. Upon conclusion of the hearings provided for in section 103, the Commission shall modify its proposed schedules to such extent as it shall deem appropriate in the light of the testimony presented at the hearings and to conform with any changes in rates of duty which have occurred or are to occur in any known manner after the proposed schedules were published in the Federal Register, and shall prepare revisions of United States schedules of tariff concessions contained in then existing trade agreements concluded under the authority of section 350, Tariff Act of 1930, as amended (U. S. C., 1952 edition, title 19, sec. 1351), to conform with its proposed revision of United States tariff schedules. Within six months after the close of the said hearings the Commission shall recommend to the President its proposed revision of United States tariff schedules and its proposed revision of the schedules of trade agreement tariff concessions, trans

mitting with its recommendations a report showing in detail the differences between the existing and proposed classification provisions and a summary of the data on the basis of which each proposed rate of duty was calculated.

SEC. 105. (a) Upon receipt of the recommended revisions of the United States tariff schedules and of the trade agreement schedules, the President may negotiate with the contracting parties to the trade agreements to effect the substitution of the revised trade agreement schedules for the schedules of United States concessions then contained in such agreements. If the President finds that any classification provisions, or part thereof, would be contrary to the national interest or that it would be impracticable to effectuate a particular substitution in a trade agreement schedule, which is one element of a proposed classification provision in the recommended revision of United States tariff schedules, he may either: 1. replace that particular substitution in the proposed revision of United States tariff schedules and trade agreement schedules, if any, by the corresponding existing provisions and proceed to effectuate by negotiation, if necessary, the remainder of the proposed classification provision after receiving the recommendation of the Tariff Commission as to rate determined in accordance with section 102 (b) to be applicable to the remainder of the proposed classification provision; or

2. replace all of such classification provision in the proposed revision of United States tariff schedules and trade agreement schedules, if necessary, by the corresponding existing provisions which were proposed to be consolidated therein.

(b) At any time after receipt of the recommended revisions of the United States tariff schedules and of the trade agreement schedules from the Tariff Commission and before proclamation of such revised schedules, as hereinafter provided, the President may determine to take no further action pursuant to this title either because the recommended revisions would not reasonably accomplish the purpose of this title or because further action would be contrary to the national interest. (c) Within one year after such negotiations were commenced, the President may cause the recommended United States tariff schedules to be revised to reflect any modification pursuant to subsection (a) and transmit such revised tariff schedules to the Congress, together with a copy of the recommendation and report submitted to the President by the Tariff Commission pursuant to section 104. SEC. 106. The President may, upon the expiration of the first period of sixty calendar days of continuous session of the Congress following the date on which the revision of United States tariff schedules is transmitted to it, proclaim such United States tariff schedules as revised, and the revised trade agreement schedules as negotiated; but only if, between the date of transmittal to the Congress and the expiration of such sixty-day period there has not been passed by either of the two Houses, by the affirmative vote of a majority of the authorized membership of that House, a resolution stating in substance that that House does not favor the revision. Upon the first business day after the expiration of the first full calendar month after the date of such proclamation, the proclaimed United States tariff schedules shall replace all matter in title I of the Tariff Act of 1930, as amended, following the enacting clause, and all matter in title II of the Tariff Act of 1930, as amended, following the matter preceding paragraph 1601, and all laws and parts of laws covered by the proclaimed United States tariff schedules, as indicated by the Commission's report to the President, referred to in section 104, shall be repealed.

SEC. 107. Upon the amendment of the tariff schedules of the Tariff Act of 1930, as provided for in section 106:

(1) The general rates in the tariff schedules shall be substituted for the rates which would otherwise apply to products of all foreign countries, except products of Cuba or the Philippine Republic for which preferential treatment is elsewhere prescribed, and except as specified in paragraph (2) of this section. Such general rates and the rates in the revised trade agreement schedules shall have the same application and effect for the purposes of all collateral provisions of law as the rates for which they have been substituted in whole or in part, and shall be subject to modification or termination in the same manner as was the case with respect to the rates for which they were substituted.

(2) The maximum rates in the amended schedules shall be substituted for the rates now prescribed by statute, or by a proclamation of the President made under section 336, Tariff Act of 1930 (U. S. C., 1952 edition, title 19, sec. 1336), as the case may be, which they respectively replace. In the case of any revised classification provision which includes all or portions of more than one prior

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