Customs' user fee plan faces House opposition

Customs' user fee plan faces House opposition

The modernization is necessary to keep Customs' systems up-to-date, agency CIO Woody Hall says.

By Shruti Dat'

GCN Staff

An administration proposal to fund the Customs Service's modernization through the annual collection of $210 million in user fees is getting a cold reception on Capitol Hill.

Although Rep. Jim Kolbe said he could not support the user fee proposal included in the president's fiscal 2001 budget, he said he is committed to moving the Treasury Department agency's modernization forward. The Arizona Republican is chairman of the House Appropriations Subcommittee on Treasury, Postal Service and General Government.

Customs wants to collect user fees from importers and exporters to fund development of the Automated Commercial Environment, a system to replace the bureau's 16-year-old Automated Commercial System. (ACS) Treasury estimates that ACE development would cost $1.25 billion over four years.

Almost gone

The service last month almost had to shut down its ACE pilot because of a funding shortfall [GCN, March 20, Page 6]. Treasury, however, reprogrammed $1.2 million from other department projects. The department funneled another $1.8 million from unobligated fiscal 1999 funds into the ACE pilot.

A House Ways and Means Committee staff member said Reps. Bill Archer (R-Texas), the committee's chairman, and Philip M. Crane (R-Ill.), chairman of the Ways and Means Subcommittee on Trade, also question the need for the user fees. They want to see more justification, she said. 'It is viewed by many people as a tax,' the staff member said.

Treasury last year also requested that Congress approve a user fee plan, but legislators removed it from the fiscal 2000 budget.

Neither Customs nor Treasury has provided necessary background or details about the fee structure to Ways and Means, which has jurisdiction over Customs' tariff and import fees, the staff member said. 'We've been given a few parameters but no specifics.'

Treasury officials said they believe the fee plan is the best way to maintain long-term funding for the modernization effort. 'We continue to believe the proposed fee appropriately captures some of the benefits private business will receive from Customs modernization,' James E. Johnson, Treasury undersecretary for enforcement, said at a recent House Appropriations Committee hearing.

Customs is watching the budget battle between the administration and Congress. During the waiting period, it has resorted to piecemeal funding to maintain its modernization efforts and the older ACS.

Despite Treasury's reprogramming of some funds, Customs re-cently needed $12 million to keep its modernization office operational, testified Woody Hall, Customs' chief information officer, at a House hearing earlier this month.

Those funds were required to continue the acquisition process for a modernization prime contractor and to address General Accounting Office concerns about the structure and management of the system, he said. Customs was able to internally reprogram $7 million toward its contract with Mitre Corp. of Bedford, Mass., but still needs an additional $5 million.

'It is vital that the automation system upon which Customs relies to perform its mission-critical functions be up-to-date and capable of handling the ever-increasing pressure on the service,' Hall said.

Customs processes more than 58,000 import shipments worth $2.6 billion and monitors 27,000 export shipments and $60 million in revenue daily, Hall said.

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