House Passes Conference Report on FY 2010 DHS Appropriations (Part I - CBP)

On October 14, 2009, the House Committee on Rules granted a rule providing for full House consideration of this conference report, and on October 15, 2009, the House passed the measure.

(The House and Senate had earlier passed different versions of H.R. 2892. A House-Senate conference was held to resolve the differences between the two versions, which resulted in one bill - the House-Senate Conference Report for H.R. 2892.)

This is Part I of a two-part series of summaries on the H.R. 2892 conference report and its accompanying Joint Explanatory Statement¹, and highlights the appropriations and instructions related to CBP. See future issue of ITT for Part II regarding TSA, ICE, and the general provisions (including a provision on switchblades).

$40 Million Less for CBP Automation Than House or Senate Bills

The conference report would provide $422,445,000 for CBP automated systems, of which not less than $227,960,000 would be for the development of the Automated Commercial Environment (ACE), of which $16,000,000 would be for the International Trade Data System (ITDS).

(The House- and Senate-passed bills would have provided $462,445,000 for CBP automation.)

The conference report states that of the total amount made available, $50,000,000 would not be able to be obligated for ACE until the House and Senate Appropriations Committees receive a report on the results to date and plans for the program from the Secretary of Homeland Security.

Concern about CBP's management of ACE. The conferees state that they remain staunchly committed to completing the development and deployment of ACE. Significant capabilities have already been delivered to the trade community and to the employees of CBP. However, CBP continues to struggle and fail at program management, requirements development, contractor oversight, and delivering capabilities on time. The conferees note that what originally was a 5-year development plan has become a 20-year odyssey.

Summary reconciliation, cargo release. The conferees state CBP is again restructuring its approach to managing the development of ACE, including requiring future capability releases to undergo business case reviews. They note that reductions in funding below the amount requested in the budget are prudent and should allow CBP to place Entry Summary Reconciliation and Cargo Release into a full business case review rather than proceeding with their development in fiscal year 2010 under the original plan.

Instructions and Requests Regarding CBP, Commercial Trade

Conferees have expressed their views and directed CBP to take certain actions, as follows:

CBP financial plan. The conferees expressed disappointed with poor financial decisions made by CBP in fiscal year 2009, such as insufficiently linking hiring initiatives to available resources, and the failure to factor the impact of decreased international travel, and subsequent reductions in inspection fee revenue, into spending plans based on those fees. CBP is directed to provide within 90 days after the date of enactment, a financial plan reflecting a detailed breakout of funding.

Alternatives to 100% scanning. The conferees strongly support current efforts to reduce the vulnerability of international supply chains being used to smuggle illicit weapons, or being disrupted by such weapons. However, the conferees also recognize practical difficulties in trying to meet the statutorily mandated target of 100% scanning of U.S.-bound cargo in foreign ports. The conferees therefore direct CBP to report, not later than February 1, 2010, on its strategy to achieve meaningful and effective cargo and supply chain security.

Greater focus on IPR enforcement. The conferees believe a greater focus needs to be brought to intellectual property rights (IPR) enforcement. CBP is directed to submit by December 15, 2009, a 5-year enforcement strategy to reduce IPR violations. In addition, CBP, in consultation with the U.S. Patent and Trademark Office (PTO) and the U.S. Copyright Office (CO), is directed to submit a feasibility study to the Committees not later than April 16, 2010, for developing and implementing an opt-in or voluntary automated link between the IPR e-Recordation online system and systems maintained by PTO and CO to allow rights holders to elect to record their rights with CBP.

Congressional briefings on WHTI. Conferees direct the DHS Office of Policy, with CBP, to provide semiannual briefings to the Committees on Western Hemisphere Travel Initiative (WHTI) implementation, beginning not later than 30 days after the date of enactment. These briefings should begin detailing the transition of WHTI systems and infrastructure to regular inspection and trade and travel facilitation operations, and identify program elements and funding that will be non-recurred as WHTI is fully integrated into CBP base operations.

Textile transshipment enforcement. The conference report provides $4.75 million for textile transshipment enforcement. The conferees direct CBP to submit a report with its fiscal year 2011 budget request on the execution of its five-year strategic plan for textile transshipment enforcement.

AD/CV duties. The conferees state that they have ensured that there will be sufficient funds to administer the on-going requirements of section 754 of the Tariff Act of 1930 (19 USC 1675c, the Byrd Amendment). The conferees direct CBP to continue to work with the Departments of Commerce and Treasury, and the Office of the U.S. Trade Representative (and all other relevant agencies) to increase collections, and to provide a public report on an annual basis, within 30 days of each year's distributions under the law. The report should summarize CBP's efforts to collect past due amounts and increase current collections, particularly with respect to cases involving unfairly traded U.S. imports from China. The report shall provide the amount of uncollected duties for each antidumping (AD) and countervailing (CV) duty order, and indicate the amount of open, unpaid bills for each such order. In that report, the DHS Secretary, in consultation with the other relevant agencies, including the Secretaries of Commerce and Treasury, should also advise as to whether CBP can adjust its bonding requirements to further protect revenue without violating U.S. law or international obligations, and without imposing unreasonable costs upon importers.

The conferees further direct the Secretary to work with the Secretary of Commerce to identify opportunities for the Department of Commerce to improve the timeliness, accuracy, and clarity of liquidation instructions sent to CBP. Increased attention and interagency coordination in these areas could help ensure that steps in the collection of duties are completed in a more expeditious manner.

Instructions and Requests Regarding Border Security, Infrastructure

Northern Border security. The conferees expect DHS and CBP to devote the attention and funding needed to secure the Northern border. The conferees direct the Secretary to address the issues discussed in the House and Senate reports regarding the Northern border, update the August 2009 Northern Border Strategy, and meet the stated goal of deploying 2,212 Border Patrol agents along the Northern border in fiscal year 2010. A briefing on the steps being taken to achieve these specific goals shall be provided to the Committees not later than December 15, 2009.

Northern Border enforcement initiatives. Conferees direct CBP to submit a report to the Committees not later than January 15, 2010, on staffing, funding, and implementation of Northern Border enforcement initiatives.

Northern Border technology investment. The conferees express concern that not all options are receiving due consideration when allocating funding to deploy technology to Border Patrol sectors along the Northern Border. CBP is directed to continue, as part of the quarterly Secure Border Initiative (SBI) reports, a report on technology investment on the Northern border.

Port of entry construction plan. The conference report requires CBP, in consultation with the General Services Administration, to include a 5-year construction plan for land border ports of entry. The conferees direct DHS to continue to work with GSA to prioritize and address land border port of entry infrastructure needs, etc.

Security fencing. The conference report would provide $800 million for border security fencing, infrastructure, and technology of which $75 million would not be obligated until the House and Senate Appropriations Committees receive an expenditure plan from the DHS Secretary for a program to establish a security barrier along the borders of the U.S.

The conference report also continues current law making no funding available until the Secretary certifies that CBP has complied with legal requirements for consultation with communities, federal agencies, and other stakeholders affected by planned deployment of fencing and tactical infrastructure, and, for projects for which the Secretary has exercised statutory authority to waive various environmental and other regulations and laws, until 15 days after public notice of such waiver.

Total Budget of $8 Billion for CBP Enforcement, Regulatory Activities, Salaries

The conference report would provide a total budget of approximately $8.065 billion for CBP salaries and expenses for the enforcement of laws relating to border security, immigration, customs, agricultural inspections and regulatory activities related to plant and animal imports, etc. This is more than what was passed by the House, but less than in the bill passed by the Senate.

This amount includes funding for 50 additional CBP Officers and 10 support positions to enhance Southwest border outbound operations, procurement of non-intrusive inspection (NII) equipment, Border Security and Control Between Ports of Entry initiatives, 100 additional Border Patrol agents and 23 associated support personnel, the Global Advanced Passenger Information/Passenger Name Record Program.

¹The Joint Statement explains the effect of the accompanying conference report.

(See ITT's Online Archives or 07/02/09 news, 09070215, for BP summary on the House-passed version of H.R. 2892. See ITT's Online Archives or July 14, 2009, 09071405, for BP summary of the Senate-passed version of H.R. 2892. See ITT's Online Archives or 07/17/09 news, 09071715, for BP summary of the Senate-passed version of H.R. 2892's provisions on switchblade provision.)

H.R. 2892 conference report, including Joint Explanatory Statement (H.Rept. 111-298) available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_reports&docid=f:hr298.111.pdf.