E9-28674. Further Consolidation of CBP Drawback Centers

AGENCY:

Customs and Border Protection, DHS.

ACTION:

Notice of proposed rulemaking; solicitation of comments.

SUMMARY:

This document proposes to amend the U.S. Customs and Border Protection (CBP) regulations to reflect a planned closing of the CBP drawback center at the Port of Los Angeles-Long Beach (“Los Angeles”), California. CBP believes that the further consolidation in the number of drawback processing centers from five to four is necessary because of decreases in claim filings and drawback claim values at the Los Angeles center. This proposed closure of this drawback center is intended to conserve resources, increase efficiency, exercise fiscal responsibility, and promote greater uniformity in the processing of drawback claims.

DATES:

Written comments must be received on or before December 31, 2009.

ADDRESSES:

You may submit comments, identified by docket number, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments via Docket No. USCBP 2009-0035.
• Mail: Trade and Commercial Regulations Branch, Regulations and Rulings, U.S. Customs and Border Protection, 799 9th Street, NW. (Mint Annex), Washington, DC 20229-1179.

Instructions: All submissions received must include the agency name and docket number for this rulemaking. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document.

Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov. Submitted comments may also be inspected during regular business days between the hours of 9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, Regulations and Rulings, Office of International Trade, U.S. Customs and Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC Arrangements to inspect submitted comments should be made in advance by calling Joseph Clark at [phone].

FOR FURTHER INFORMATION CONTACT:

Christine Kegley, Import Operations Branch, Office of Field Operations, Customs and Border Protection, [phone].

SUPPLEMENTARY INFORMATION:

Public Participation

Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of this proposed rule. U.S. Customs and Border Protection (CBP) also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposed rule. Comments that will provide the most assistance to CBP in developing these procedures will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that supports such recommended change. See ADDRESSES above for information on how to submit comments.

Background

To conserve resources, increase efficiency, exercise fiscal responsibility, and promote greater uniformity in the processing of drawback claims, U.S. Customs Service (now CBP) published on January 24, 2003, Treasury Decision (T.D.) 03-05 in the Federal Register (68 FR 3381), which consolidated the drawback centers from eight to the current five by closing the centers located in Miami, Florida; New Orleans, Louisiana; and Boston, Massachusetts and redirecting that all claims be filed in the remaining five centers located in Chicago, Illinois; Houston, Texas; New York, New York; Los Angeles-Long Beach (“Los Angeles”), California; and San Francisco, California. Additionally, T.D. 03-05 noted that the agency would re-evaluate further consolidations as needed. In 2008, CBP further evaluated the number of drawback claims processed at its remaining drawback centers. Based on this evaluation, CBP proposes to further consolidate the drawback centers by closing the Los Angeles, California Drawback Center to achieve its goal of four drawback centers to cover its key geographical areas of North, South, East, and West.

On May 27, 2008 and April 29, 2009, in accordance with 19 U.S.C. 2075(g)(2)(C), the Homeland Security Act of 2002 (6 U.S.C. 217(b)(2)), and the SAFE Port Act of 2006 (6 U.S.C. 115(D)), CBP notified the House Committee on Ways & Means, the Senate Committee on Finance, and House Committee on Homeland Security of its intent to close the Los Angeles Drawback Center. The Congressional notification period expired July 27, 2009, and CBP did not receive from Congress any objections to the proposed closing of the Los Angeles Drawback Center. Out of the remaining five drawback centers, Los Angeles receives and processes the fewest claims. Drawback statistics from fiscal years 2006, 2007, and 2008 reveal that only 8.4, 9.01, and 7.49 percent of all claims were filed in Los Angeles. Moreover, the claims paid out by the Los Angeles center during those years represented only 2.6, 2.42, and 3.15 percent of all drawback claims paid nationally. Because of the decrease in the number of drawback claims filed and processed at the Los Angeles Drawback Center since 2003 and the small number of claims filed overall in the Los Angeles center, CBP is proposing to close this drawback center, thus leaving four centers located in its key geographical areas of Chicago, Houston, New York, and San Francisco. CBP believes that closing the Los Angeles Drawback Center is required in order to attain CBP's original goals of conserving resources, increasing efficiency, exercising fiscal responsibility, and promoting greater uniformity in the processing of drawback claims.

If this proposal is adopted, then future claims will be required to be sent to one of the four remaining drawback centers located in Chicago, Houston, New York, or San Francisco. All remaining claims that were filed at the Los Angeles Drawback Center prior to closure that have not been liquidated and still require CBP review will be forwarded to the San Francisco Drawback Center for final processing.

In order to file a drawback claim at one of the four remaining centers, persons must ensure that all license/permit and bond requirements are met in accordance with the regulations. See 19 CFR Parts 111 and 113 of the CBP regulations.

Explanation of Amendment

Section 101.3(b)(1) of the CBP regulations lists all the CBP ports of entry. Five ports are denoted with a “plus” sign that designates their status as a “Drawback unit/office.” This document proposes to amend § 101.3(b)(1) to remove the “plus” sign in § 101.3(b)(1) next to the port listing for Los Angeles-Long Beach.

Inapplicability of the Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires federal agencies to examine the impact a rule would have on small entities. A small entity may be a small business (defined as any independently owned and operated business not dominant in its field that qualifies as a small business per the Small Business Act); a small not-for-profit organization; or a small governmental jurisdiction (locality with fewer than 50,000 people).

Although this document is being issued with notice for public comment, it is noted that this proposal, which relates to agency management and organization, does not directly regulate small entities and is not subject to the notice and public procedure requirements of 5 U.S.C. 553. The proposed change is part of CBP's continuing program to conserve resources, increase efficiency, and exercise fiscal responsibility, and to provide better service to importers and the general public.

Because this proposal does not directly regulate small entities and because CBP estimates that virtually all transactions are accomplished through either electronic or mailed submissions, and any follow-up is handled by telephone, fax and/or email, the physical location of a drawback center is largely irrelevant to the process. Accordingly, CBP does not believe that this rule will have a significant economic impact on a substantial number of small entities. However, CBP welcomes comments on this assumption. If we do not receive any comments to the contrary, we may certify in the final rule that this rule will not have a significant economic impact on a substantial number of small entities.

Executive Order 12866

This proposed rule does not meet the criteria to be considered an economically “significant regulatory action” under Executive Order 12866 because it will not result in the expenditure of over $100 million in any one year. The Office of Management and Budget (OMB) has not reviewed this proposed rule under that Order.

As stated previously, CBP estimates that virtually all of follow-up transactions are through fax, email, or telephone; it is a very rare occasion for any member of the public to visit a drawback center. Thus, CBP anticipates that this rule will have de minimus costs to the public as a result of the further consolidation of drawback centers.

Signing Authority

This document is being issued in accordance with 19 CFR 0.2(a), which provides that the authority of the Secretary of the Treasury with respect to CBP regulations that are not related to customs revenue functions was transferred to the Secretary of Homeland Security pursuant to § 403(l) of the Homeland Security Act of 2002. Accordingly, this notice of proposed rulemaking to amend such regulations may be signed by the Secretary of Homeland Security (or her delegate).

List of Subjects in 19 CFR Part 101

• Customs duties and inspection
• Customs ports of entry

Proposed Amendment to the Regulations

For the reasons set forth above, CBP proposes to amend part 101 of the CBP regulations (19 CFR Part 101) as follows:

PART 101—GENERAL PROVISIONS

1. The general authority citation for part 101 continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 2, 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1623, 1624, 1646a.

Section 101.3 and 101.4 also issued under 19 U.S.C. 1 and 58b.

* * * * *

§ 101.3—[Amended].

2. In § 101.3, the table in paragraph (b)(1) is amended by removing the plus sign in the “Ports of entry” column before the column listing for “Los Angeles-Long Beach” under the state of California.

Dated: November 25, 2009.

Jayson P. Ahern,

Acting Commissioner, U.S. Customs and Border Protection.