03-20568. Tonnage Duties-Revised Amounts

AGENCY:

Customs and Border Protection, Homeland Security.

ACTION:

Final rule.

SUMMARY:

This document amends the rules dealing with vessels in foreign and domestic trades by revising the amounts of tonnage duties applicable to those entering the United States from a foreign port. These revisions are necessary to reflect recent changes in the pertinent statutory provisions.

EFFECTIVE DATE:

August 13, 2003.

FOR FURTHER INFORMATION CONTACT:

Glen Vereb, Entry Procedures & Carriers Branch, [phone].

SUPPLEMENTARY INFORMATION:

Background

Customs and Border Protection (CBP) assesses and collects tonnage duties and light money on vessels brought into the United States from a foreign port or place, under the authority of 46 U.S.C. App. 121. Tonnage duties, which are in effect charges for the privilege of entering, trading in, or lying in a port, cover the expenses incurred in clearing and improving harbors, erecting lighthouses and keeping up lights. The amount of tonnage duty depends on the registry of the vessel, subject to certain exemptions, as prescribed by law.

On November 5, 1990, the President signed the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508), which amended 46 U.S.C App. 121 to increase the tonnage taxes collected from vessels arriving in the United States from foreign ports. The amendment intended to offset the costs incurred by Coast Guard operations. For vessels calling on the United States from North American ports and certain Central American, South American and Caribbean ports, the amount of tonnage tax was increased to 9 cents per ton, not to exceed in the aggregate 45 cents per ton per annum. For vessels entering a port of the United States from any other foreign port or place, the amount of tonnage tax was increased to 27 cents per ton, not to exceed $1.35 per ton per annum. These increases were in effect until the end of fiscal year 2002; thereafter the duties were to revert to the same amount as in effect prior to the passage of this legislation.

Congress has not enacted legislation renewing these provisional tonnage duty rates. In accordance with the statute, the tonnage tax rates have reverted to the previous rates of 2 cents per ton (10 cents annual aggregate cap) for vessels arriving in the United States from the first group of ports and 6 cents per ton (30 cents annual aggregate cap) for vessels arriving from all other originating ports.

Thus, CBP has determined that current statutory provisions require CBP to amend Part 4 of the Customs Regulations (19 CFR 4.20) to revise the amounts of tonnage duties applicable to vessels entering from a foreign port or place. Following is a summary of those changes.

Discussion of Changes

1. Section 4.20(a) generally provides for the payment of tonnage tax on vessels entering from a foreign port or place. Section 4.20(a) is revised to reflect changes in the regular tonnage duty applicable in such circumstances.

2. Section 4.20(b) is amended to reflect the revised maximum assessment amount of tonnage duty of a vessel per tonnage year. The revised aggregate amount for vessels arriving in the United States from North American ports, certain Central American, South American and Caribbean ports is 10 cents per ton. For vessels arriving from all other originating ports the revised amount is 30 cents per ton.

3. Section 4.20(c) generally provides for the payment of special tonnage tax and light money on vessels entering from a foreign port or place. The present table in this section listing the vessel tonnage and light money rates payable under various conditions is revised to reflect the current tonnage duty rates.

The following chart indicates the provisional tonnage tax amount that has expired and the currently assessed amount.

Vessels entering U.S. from	Provisional tonnage tax per ton (annual cap)	Current tonnage tax per ton (annual cap)
North America, Central America, the West Indies, the Bahama Islands, the Bermuda Islands, the coast of South America bordering on the Caribbean Sea, or the high seas adjacent to the U.S. or the above listed foreign locations	9¢ (45¢)	2¢ (10¢)
Any other foreign port	27¢ ($1.35)	6¢ (30¢)

Inapplicability of Public Notice and Comment and Delayed Effect Requirements, the Regulatory Flexibility Act, and Executive Order 12866

Inasmuch as these amendments merely conform the Customs Regulations to existing law as noted above, pursuant to 5 U.S.C. 553(b)(3)(B), notice and public procedure thereon are unnecessary and pursuant to 5 U.S.C. 553(d)(3), a delayed effective date is not required. Since this document is not subject to the notice and public procedure requirements of 5 U.S.C. 553, it is not subject to the provisions of the Regulatory Flexibility Act, as amended (5 U.S.C. 601 et seq.).

For the same reasons, the amendments do not meet the criteria for a “significant regulatory action” as specified in E.O. 12866. Accordingly, a regulatory impact analysis it is not required thereunder.

Drafting Information

The principal author of this document was Fernando Pena, Office of Regulations and Rulings, Bureau of Customs and Border Protection. However, personnel from other Bureau offices participated in its development.

List of Subjects in 19 CFR Part 4

• Cargo vessels
• Coastal zone
• Coastwise trade
• Customs duties and inspection
• Entry
• Fees
• Fishing vessels
• Freight
• Harbors
• Imports
• Maritime carriers
• Reporting and recordkeeping requirements
• Seamen
• Vessels, and Yachts

Amendments to the Regulations

For the reasons stated above, part 4 of the Customs Regulations (19 CFR part 4) is amended as set forth below.

PART 4—VESSELS IN FOREIGN AND DOMESTIC TRADES

1. The general authority citation for part 4 and the specific authority citation for § 4.20 continue to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624; 46 U.S.C. App. 3, 91.

* * * * *

Section § 4.20 also issued under 46 U.S.C. 2107(b), 8103, 14306,14502, 14511, 14512, 14513, 14701, 14702; 46 U.S.C. App. 121, 128;

* * * * *

2. Amend § 4.20 as follows:

a. In paragraph (a):

i. all references to the number “9” are removed and, in their place, the number “2” is added;

ii. all references to the number “27” are removed and, in their place, the number “6” is added;

iii. the reference to the number “45” is removed and, in its place, the number “10” is added; and,

iv. the figure “$1.35” is removed and, in its place, the number “30” is added.

b. In paragraph (b):

i. the reference to the number “9” is removed and, in its place, the number “2” is added;

ii. the reference to the number “27” is removed and, in its place, the number “6” is added; and,

iii. the figure “$1.80” is removed and, in its place, the figure “40 cents” is added.

c. In the table under paragraph (c), in the column headed “Regular tax”:

i. the figure “0.09” and all the figures reading “.09” are removed and, in their place, the figure “.02” is added; and,

ii. the figure “0.27” and all the figures reading “.27” are removed and, in their place, the figure “.06” is added.

Dated: August 7, 2003.

Robert C. Bonner,

Commissioner, Customs and Border Protection.