DATA-BASED USER FEE FOR ACE DEVELOPMENT CONSIDERED

DATA-BASED USER FEE FOR ACE DEVELOPMENT CONSIDERED    To offset the cost of building Customs’ future computer system, the Clinton Administration is considering a user fee based on volume of data filed through the agency current system.
   The user fee may be based on the amount of “data bytes” or lines of data on paper documents filed with agency, said John Simpson, deputy assistant secretary of Treasury for Regulatory Tariff and Trade Enforcement. Value of the merchandise processed in Customs’ current Automated Commercial System would not be considered.
   Simpson made his statements before the House Subcommittee on Treasury, Postal Service and General Government’s hearing on U.S. Customs Service Automation Modernization Tuesday in Washington.
   The amount of money generated from the user fee would not exceed the estimated $210 million annual cost to build ACE. It also conforms with the rules of the General Agreement on Tariffs and Trade, Simpson said.
   “It’s a way to solve a budget problem and most importantly we think it’s fair,” Simpson said. He told the committee the user fee would only last as long as ACE is being built.
   Congress and industry aren’t expected to support the Administration’s proposed user fee.
   “This is new information to me,” said House Representative John E. Sununu, R-N.H. “Seems to me that would send up red flags in the trade community.”
   Customs already collects user fees from the industry to cover inspection costs under the 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA fees generated $274 million for Customs in fiscal 1999.
   The agency also collects about $900 million a year from the Merchandise Processing Fee (MPF). This money was originally intended for Customs’ system development, but it ends up in the government’s general funds.
   Industry officials say they won’t support another user fee. Money for ACE development should come out of general funds.
   “Since 1993, industry has paid a total of $5 billion in MPF — enough to purchase a new computer system four times over,” said Ronald D. Schoof, manager of customs and export regulations at Caterpillar, on behalf of the Joint Industry Group and the Coalition for Customs Automation Funding. “These fees should have been dedicated to funding Customs automation but have not been.”