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HQ 111481


March 11, 1991

VES-5-08-CO:R:IT:C 111481 GEV

CATEGORY: CARRIER

Sondra George Tipton
Director
Park West Children's Fund, Inc.
Berth 57
San Pedro, California 90731-7211

RE: User Fees; Commercial Vessel; 19 U.S.C. 58c(a)(1)

Dear Ms. Tipton:

This is in response to your letter dated January 18, 1991, requesting a waiver of the fee of $397 for the arrival of a commercial vessel of 100 net tons or more. Our ruling is set forth below.

FACTS:

Park West Children's Fund, Inc., of San Pedro, California, a nonprofit corporation not funded by government or corporate grants and operated by an all volunteer staff, provides food and supplies at no cost to needy families on a domestic and international basis. This corporation is the owner and operator of the SPIRIT SHIP, a 3800 ton fishing vessel used to aid and assist the poor in developing countries.

Upon returning from its maiden voyage to Central America last year, the vessel was assessed a $397 user fee. Park West Children's Fund, Inc. requests a waiver of this fee.

ISSUE:

Whether a fishing vessel owned and operated by a nonprofit organization for the purpose of providing food and supplies for needy families overseas is considered to be a commercial vessel within the meaning of 19 U.S.C. 58c(a)(1) and therefore subject to the $397 user fee.

LAW AND ANALYSIS:

Title 19, United States Code, section 58c(a)(1), provides for the assessment of a $397 user fee upon the arrival of a commercial vessel of 100 net tons or more. Under 19 U.S.C. 58c(a)(4) there is an annual fee of $25 for all arrivals made during a calendar year by a private vessel. These fees are reflected in sections 24.22(b) and (e), Customs Regulations (19 CFR 24.22(b) and (e)).

Neither the user fee legislation nor related legislative history indicate what Congress meant by the term "commercial vessel." Webster's New World Dictionary of the American Language, Second Edition, defines "commercial" as "of or connected with commerce or trade."

Upon reviewing this matter we conclude that while the SPIRIT SHIP is operating in the manner described above, it is not a vessel transporting passengers or merchandise in commerce or trade. Accordingly, it is not considered a "commercial vessel" for purposes of 19 U.S.C. 58c(a)(1) and therefore is not subject to the $397 user fee assessed pursuant thereto.

We note the copy of a letter from the District Director, Internal Revenue Service (IRS), Los Angeles, California, attached to your January 18 letter stating that your organization is not considered to be a private foundation for purposes of the IRS. This determination, however, is not dispositive in regard to Customs assessment of user fees. Furthermore, we note that the user fee legislation contains no provision exempting charitable organizations. Accordingly, we consider the subject vessel to be a private vessel subject to the $25 annual fee prescribed by 19 U.S.C. 58c(a)(4).

HOLDING:

A fishing vessel owned and operated by a nonprofit organization for the purpose of providing food and supplies for needy families overseas is not considered to be a commercial vessel within the meaning of 19 U.S.C. 58c(a)(1) and therefore is not subject to the $397 user fee.

Sincerely,

B. James Fritz

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