HQ 0224000 - Application for further review of Protest No. 4909-92- 100015; Harbor Maintenance Fee; Exempt Ports; 26 U.S.C. 4462; 19 U.S.C. 1514(a)(5) - United States International Trade Commision Rulings

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HQ 224000

June 26, 1992

ENT-1-03-CO:R:C:E 224000 CB

CATEGORY: ENTRY

District Director
U.S. Customs Service
La Puntilla #1
Old San Juan, PR 00903

RE: Application for further review of Protest No. 4909-92- 100015; Harbor Maintenance Fee; Exempt Ports; 26 U.S.C. 4462; 19 U.S.C. 1514(a)(5)

Dear Sir/Madam:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

According to the file, the subject entry was liquidated on November 22, 1991, with a change to include a harbor maintenance fee assessment of $7, 385.86. According to protestant the HMF has not been paid to date. Subsequent to the liquidation of the subject entry, by way of a Federal Register Notice dated January 22, 1992, Customs clarified the list of ports subject to the HMF. Guayanilla is among those ports listed in the clarification as an exempt port. (See 59 Fed. Reg. 2456 (1992)).

The subject protest was filed on February 10, 1992. Protestant is requesting that the HMF assessment be rescinded on the grounds that Customs lacked statutory authority to assess a fee because there had been no expenditure of federal funds at this port.

ISSUE:

May the protest against the liquidation of the subject entry which included an assessment of harbor maintenance fees on the unloading of merchandise at the port of Guayanilla, Puerto Rico, be granted in this case?

LAW AND ANALYSIS:

Initially, we note that the protest, with application for further review, was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. 1514 and -2-

19 CFR Part 174) and that the decision protested, the liquidation of the subject entry which included the assessment of harbor maintenance fees, is a protestable decision (see 19 U.S.C. 1514 (a)(5) and 26 U.S.C. 4462(f)).

The subject entry was liquidated on November 22, 1991, and included an assessed harbor maintenance fee of $7,385.86. The fee has not been paid to date. Protestant contends that Customs lacked authority to assess the fee under the terms of the statute because Guayanilla had not received any federal funds since 1977 and that the inclusion of Guayanilla on the subject ports was beyond the scope of the statute. By T.D. 92-7 the Customs Service corrected 19 CFR 24.24. The statutory authority for the harbor maintenance fee is found in the Water Resources Development Act of 1986 (Public Law 99-662; 100 Stat. 4082, 4266; 26 U.S.C. 4461 et seq.). Under this statute, a fee is imposed for the use of a port, defined as any channel or harbor or component thereof in the United States which is not an inland waterway, is open to public navigation, and at which Federal funds have been used since 1977 for construction, maintenance, or operation. Consequently, the regulation was beyond the limits set by 26 U.S.C. 4462(a)(2)(B).

Under 19 U.S.C. 1514(a)(5), a protest may be filed as to the liquidation or reliquidation of an entry, or any modification thereof. The subject entry was liquidated on November 22, 1991 and this protest was filed within 90 days of the notice of liquidation (as required under 19 U.S.C. 1514(c)(2)(A)). There is no statutory requirement that any additional duties determined to be due at the time of liquidation must be paid prior to filing a protest contesting such liquidation. Under 26 U.S.C. 4462(f) (cited above), except as otherwise provided in regulations, all administrative and enforcement provisions of the Customs laws and regulations apply in respect to the harbor maintenance fee as if it were a duty. (Note: We emphasize that although this provision makes all administrative and enforcement provisions of the Customs laws and regulations applicable to the HMF, it does not transform the HMF into a Customs duty (see, in this regard, S. Rept. 99-126 (August 1, 1985) page 7, reprinted at U.S.C.C.A.N. 6644 (1986), and H. Rept. 99-228 (January 8, 1986), pp. 3 and 10, reprinted at U.S.C.C.A.N. 6707 and 6714- 6715 (1986)). Therefore, there is no requirement that an importer pay any amount of a fee, treated in this limited situation as a duty, and determined to be due on liquidation prior to filing a protest.

HOLDING:

The protest against the liquidation of the subject entry, which determined an amount of harbor maintenance fees to be due -3-
on the unloading of merchandise at the Port of Guayanilla, is granted.

A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director

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