[House Report 108-224]
[From the U.S. Government Publishing Office]
108th Congress Rept. 108-224
HOUSE OF REPRESENTATIVES
1st Session Part 2
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UNITED STATES-CHILE FREE TRADE AGREEMENT IMPLEMENTATION ACT
_______
July 22, 2003.--Ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2738]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 2738) to implement the United States-Chile Free
Trade Agreement, having considered the same, reports favorably
thereon without amendment and recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 11
Committee Consideration.......................................... 11
Vote of the Committee............................................ 12
Committee Oversight Findings..................................... 12
New Budget Authority and Tax Expenditures........................ 12
Congressional Budget Office Cost Estimate........................ 12
Performance Goals and Objectives................................. 15
Constitutional Authority Statement............................... 15
Section-by-Section Analysis and Discussion....................... 15
Changes in Existing Law Made by the Bill, as Reported............ 20
Agency Correspondence............................................ 46
Markup Transcript................................................ 51
Mock Markup Transcript........................................... 155
Minority Views................................................... 203
Purpose and Summary
On June 6, 2003, the United States and Chile entered into a
Free Trade Agreement (``FTA'') after several rounds of
negotiation that commenced in December of 2000. H.R. 2738
approves the U.S.-Chile FTA submitted to Congress on July 15,
2003 and makes changes to United States law necessary to ensure
compliance with the agreement. The legislation contains four
titles: Title I, ``Approval of, and General Provisions Relating
to the Agreement;'' Title II, ``Customs Provisions;'' Title
III, ``Relief from Imports;'' and Title IV, ``Temporary Entry
of Business Persons.'' The Committee's consideration of H.R.
2738 was limited to title IV of the legislation. Title IV
establishes 1,400 annual professional worker visas for Chilean
citizens to enter the United States on a temporary basis.
H.R. 2738 was considered pursuant to the Bipartisan Trade
Promotion Authority Act of 2002 \1\ and the Trade Act of
1974.\2\ As a result, the legislation was considered on an
expedited basis which did not permit committees of jurisdiction
to amend the legislation after its formal introduction.
However, the Committee made several changes to draft
implementing legislation transmitted to the Committee for a
pre-introduction ``mock markup'' on July 10, 2003. These
changes were substantially reflected in H.R. 2738.
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\1\ 19 U.S.C. Sec. 3805 et. seq. (2002).
\2\ 19 U.S.C. Sec. 2191 et. seq. (2002).
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Background and Need for the Legislation
U.S.-CHILE FREE TRADE AGREEMENT
Background
On June 6, 2003, the United States and Chile entered into a
bilateral FTA, concluding a 14-round negotiation process that
began in December of 2000.\3\ Chile is recognized as one of the
most open, reformed, and developed economies in Latin America.
The Bush Administration has asserted that a U.S.-Chile FTA
would expand U.S. exports, provide a basis for broader
hemispheric trade liberalization, enhance regional economic and
political cooperation, and support economic and trade reform in
Latin America. Chile has pursued trade liberalization
agreements with a number of its trading partners, including
Bolivia, Mexico, Venezuela, Colombia, Ecuador, Peru, and
Argentina. In addition, Chile has signed FTAs with Canada and
Mexico. In April and October 2002, Chile completed negotiations
for an FTA with the European Union and South Korea, and is
negotiating FTAs with Japan, New Zealand, and Singapore.
Proponents of the U.S.-Chile FTA have argued that Chile's
current trade agreements with U.S. economic competitors place
U.S. exporters at a commercial disadvantage and that
eliminating these tariffs would enhance U.S. commercial
interests. In 2001, Chile's per capita income level was second
only to Argentina's in Latin America and will likely be first
once data reflect Argentina's current financial crisis.\4\
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\3\ The full text of the U.S.-Chile FTA is available at: .
\4\ See generally, J.F. Hornbeck, CRS Report for Congress, The
U.S.-Chile Free Trade Agreement: Economic and Trade Policy Issues, June
26, 2003.
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The United States is Chile's largest trading partner,
accounting for 20 percent of Chilean exports and 15 percent of
imports in 2002. By contrast, Chile is the United States' 34th
largest export destination and 36th largest import contributor,
accounting for 0.3 percent of U.S. trade.\5\ U.S. products
exported to Chile are mostly capital goods. These include:
machinery (31 percent), particularly computers, office
machinery, and industrial equipment such as gas turbines and
bulldozers; electrical machinery (16 percent) including
television and radio transmission apparatus, telephone
equipment, spare parts, integrated circuits, sound recording
equipment and media; vehicles (8 percent) mostly trucks and
passenger cars; aircraft and parts (5 percent) and optical/
medical instruments (5 percent).\6\ The top five U.S. imports
from Chile are natural resource based goods that reflect some
refining of the basic resource, but little value-added
manufacturing activity. They account for nearly 70 percent of
total imports from Chile and include: copper articles (19
percent), mostly refined alloys; edible fruits and nuts (18
percent), most of which are grapes; fish (15 percent), mostly
salmon; wood (13 percent), various types of lumber; and
beverages (4 percent), virtually all wine.\7\
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\5\ See U.S. Trade Balance With Chile, U.S. Census Bureau, Foreign
Trade Division, U.S. Dept. of Commerce, .
\6\ See Id.
\7\ Inter-American Development Bank (IDB), Integration and Trade in
the Americas: Periodic Note, December 2000, .
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Last month, the United States International Trade
Commission (ITC) released a comprehensive study assessing the
likely impact of the U.S.-Chile FTA on the U.S. economy,
providing both quantitative and qualitative estimates of the
FTA's possible effects. The overall estimate of the ITC study
was that by 2016, when the full effect of tariff eliminations
would be felt, U.S. exports to Chile would increase in a range
between 18 percent and 52 percent and U.S. imports would rise
between 6 percent and 14 percent. The study notes that this
flow of goods would be very small relative to total U.S. trade
and that the economy-wide effects on trade, production, and
overall economic welfare would be small to negligible (in a
range of negative 0.001 percent to a positive 0.003 percent of
GDP).\8\
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\8\ U.S.-Chile Free Trade Agreement: Potential Economywide and
Selected Sectoral Effects, U.S. Intl. Trade Comm., Publication 3605,
(June 2003), .
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Summary of U.S.-Chile FTA Provisions Pertaining to the Jurisdiction of
the Committee on the Judiciary
Although the Committee's formal legislative consideration
of H.R. 2738 was limited to title IV of the legislation, which
implemented changes to United States immigration law, the U.S.-
Chile FTA also contained intellectual property and competition
chapters that fall within the jurisdiction of the Committee.
Intellectual Property Rights (IPR)
Chile is a signatory to the Trade Related Intellectual
Property Rights (TRIPS), but has not yet ratified its
implementing provisions. In addition, Chile has signed two
World Intellectual Property Organization (WIPO) treaties, but
has also not fully complied with these obligations. The U.S.-
Chile FTA reaffirms obligations under TRIPS and adds another
layer of protection which would potentially increase revenues
to a number of industries including: motion picture, sound
recording, business software, book publishing, pharmaceuticals,
and agricultural chemicals.\9\
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\9\ Supra, note 5, at 109 and 118.
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Chapter 17 of the Agreement requires Chile to ratify or
accede to several international IPR agreements, including the
International Convention for the Protection of New Varieties of
Plants (UPOV 1991), the Trademark Law Treaty, the Brussels
Convention relating to the Distribution of Program-Carrying
Satellite Signals, and the Patent Cooperation Treaty. The FTA
also enhances enforcement of intellectual property rights. Non-
discrimination obligations apply to all types of intellectual
property. The FTA ensures government involvement in resolving
disputes between trademarks and Internet domain names
(important to prevent ``cyber-squatting'' of trademarked domain
names). It also applies the principle of ``first-in-time,
first-in-right'' to trademarks and geographical indicators
(place-names) applied to products.
The Agreement streamlines the trademark filing process by
allowing applicants to use their own national patent/trademark
offices for filing trademark applications. The FTA ensures that
only authors, composers, and other copyright owners have the
right the make their works available online. Copyright owners
maintain rights to temporary copies of their works on
computers. Copyrighted works and phonograms are protected for
extended terms, consistent with U.S. standards and
international trends. The FTA also contains anti-circumvention
provisions aimed at preventing tampering with technologies
(such as embedded codes on discs) that are designed to prevent
piracy and unauthorized distribution over the Internet. It also
ensures that governments use only legitimate computer software
(in order to set a positive example for private users). Chile
is to prohibit the production of optical discs (CDs, DVDs or
software) without a source identification code unless
authorized by the copyright holder in writing.
Under the FTA, protection for encrypted program-carrying
satellite signals extends to the signals themselves as well as
the programming. This is designed to prevent piracy of
satellite television programming. Both sides agreed to
criminalize unauthorized reception and redistribution of
satellite signals. The Agreement also contains limited
liability for Internet Service Providers (ISPs)--reflecting the
balance struck in the U.S. Digital Millennium Copyright Act
between legitimate ISP activity and the infringement of
copyrights. In essence, both sides are to provide immunity to
Internet service providers for complying with notification and
take-down procedures when material suspected to be infringing
on copyright is hosted on their servers. The FTA provides for a
patent term to be extended to compensate for up-front
administrative or regulatory delays in granting the original
patent, consistent with U.S. practice. The grounds for revoking
a patent are limited to the same grounds required to originally
refuse a patent. This is to protect against arbitrary
revocation.
The Agreement provides further protections for patents
covering biotech plants and animals. Chile is to accede to the
International Convention for the Protection of New Varieties of
Plants. It also provides for protection against imports of
pharmaceutical products without a patent-holder's consent by
allowing lawsuits when contracts are breached. Under the FTA,
test data and trade secrets submitted to a government for the
purpose of product approval are to be protected against
disclosure for a period of 5 years for pharmaceuticals and 10
years for agricultural chemicals. The FTA also closes potential
loopholes to these provisions and is designed to ensure that
government marketing-approval agencies will not grant approval
to patent-violating products.
In addition, the Agreement provides for criminal penalties
for companies that make pirated copies from legitimate
products. The Chilean government guarantees that it has
authority to seize, forfeit, and destroy counterfeit and
pirated goods and the equipment used to produce them. IPR laws
are to be enforced against traded goods, including trans-
shipments, to deter violators from using U.S. or Chilean ports
or free-trade zones to traffic in pirated products. The FTA
mandates both statutory and actual damages under Chilean law
for IPR violations (as a deterrent against piracy) and provides
that monetary damages be awarded even if actual economic harm
(retail value, profits made by violators) cannot be determined.
Chile is to cooperate in preventing pirated and counterfeit
goods from being imported into the United States. Finally, the
FTA sharply restricts Chile from using compulsory licenses to
copy patented drugs and sets up new barriers to the import of
patented drugs sold at lower prices in third countries.
Competition Policy/Antitrust
H.R. 2738 contains no changes to United States antitrust
law. However, a summary of provisions related to competition/
antitrust contained in the U.S.-Chile FTA is set forth below.
Chapter 16 of the Agreement helps ensure that the
opportunities created by trade liberalization are supported by
healthy competitive domestic markets, allowing the firms of
each country to compete unhampered by anticompetitive business
conduct in either country's territory. Firms that are subject
to antitrust enforcement action will be guaranteed some basic
procedural safeguards. Since these protections already exist in
the United States, no changes to United States law are
necessary. While state monopolies and state enterprises do not
account for a significant portion of either country's economy,
the provisions governing these entities will help eliminate the
potential for either party to favor domestic firms in the sale
or purchase of goods and services.
Specifically, chapter 16 ensures that both countries:
LEnforce domestic antitrust law that prohibits
anticompetitive business conduct;
LCooperate in the enforcement of antitrust
law;
LEnsure that any private or public monopolies
designated by either country, and any state
enterprises, be subject to disciplinary action for
abusing their status or otherwise discriminating in a
manner that harms the interests of the other country.
LExplicitly recognize that anticompetitive
conduct threatens the free flow of bilateral trade and
investment, and seek to secure the benefits of the FTA
by prohibiting such conduct, encouraging economically
sound competition policies, and furthering transparency
and cooperation;
LExpand NAFTA's competition provisions by
affirming that antitrust laws be enforced in a neutral
manner that does not discriminate on the basis of
nationality;
LEnsure basic procedural rights for firms that
are subject to antitrust enforcement actions: each
country will provide a right to be heard and to present
evidence before imposing a sanction or remedy;
LProvide for consultations and further
transparency by allowing either country to request from
the other specific public information regarding
antitrust enforcement activity, official monopolies and
state enterprises, and any exemptions from their
antitrust laws.
Finally, it is important to note that the provisions
regarding antitrust law and enforcement are not subject to
dispute settlement.
Temporary Entry
Title IV of the pre-introduction draft implementing
legislation for the U.S.-Chile FTA that the Administration
forwarded to the Committee for its ``mock markup'' on July 10,
2003, effectuated U.S. commitments under chapter 14 of the
U.S.-Chile FTA pertaining to the temporary entry of business
persons. However, this draft legislation was considerably
amended during the Committee's ``mock markup'' on July 10,
2003. These Committee recommendations were then incorporated
into the introduced version of H.R. 2738. These changes are
highlighted in the ``Pre-Introduction `Mock Markup' of U.S.-
Chile FTA Implementing Legislation and Committee Amendments
Incorporated Into H.R. 2738'' section of this report.
In general, chapter 14 of the U.S.-Chile FTA is consistent
with existing provisions of the Immigration and Nationality Act
(``INA''). The four categories of persons eligible for
admission under the Agreement's expedited procedures correspond
to existing INA nonimmigrant and related classifications.
In order to provide for the admission of business visitors
and intra-company transferees, no changes in U.S. statutes are
required. Limited technical changes are needed to provide for
the admission of traders and investors and professionals.
Legislation is also required to implement article 14.3(2) of
the Agreement regarding labor disputes.
Traders and Investors
Under Section B of Annex 14.3 of the Agreement, citizens of
Chile are eligible for temporary entry as traders and
investors. This category provides for admission under
requirements identical to those governing admission under INA
Sec. 101(a)(15)(E) (8 U.S.C. Sec. 1101(a)(15)(E)), which
permits entry for persons to carry on substantial trade in
goods or services or to develop and direct investment
operations.
Section 101(a)(15)(E) of the INA currently conditions
admission into the United States upon authorization pursuant to
a treaty of commerce and navigation. Since the Agreement is not
a treaty of commerce and navigation, and no such treaty exists
between the United States and Chile, legislation is necessary
to accord treaty trader and investor status to Chilean citizens
qualifying for entry under Section B.
Section 401 of the draft legislation did not amend section
101(a)(15)(E). Instead, it used a mechanism similar to that
provided in Sec. 341(a) of the North American Free Trade
Agreement Implementation Act, which in turn was based upon the
Act of June 18, 1954 (68 Stat. 264, 8 U.S.C. Sec. 1184(a)). The
Act of June 18, 1954 conferred treaty trader and investor
status upon nationals of the Philippines on a reciprocal basis
secured by an agreement entered into by the President of the
United States and the President of the Philippines.
Professionals
Section 402(a) of the draft bill amended Sec. 101(a)(15) of
the INA (8 U.S.C. Sec. 1101(a)(15)), which defines categories
of persons entitled to enter the United States as
nonimmigrants. Section 402(a) of the draft bill inserted a new
subparagraph (W) at the end of INA Sec. 101(a)(15).
Subparagraph (W) would have established a new category of
aliens entitled to enter the United States temporarily as
nonimmigrants. These aliens would have been citizens of
countries with which the United States had entered into free
trade agreements and who sought to come to the United States
temporarily to engage in business activities at the
professional level. Entry into the United States under
subparagraph (W) would have been subject to regulations issued
by the Secretary of Homeland Security implementing numerical
limitations provided for in the applicable agreement, as set
forth in new paragraph (8) of INA Sec. 214(g), as added by the
bill. The Department of Labor would have issued regulations
governing temporary entry of professionals under this proposed
provision of law. This amendment to the INA would have
implemented Section D of Annex 14.3 of the Agreement.
New INA Sec. 101(a)(15)(W) also provided for the entry of
spouses and children accompanying or following to join business
persons entering under this category. The purpose of this
provision was to grant express authorization for current
Immigration and Naturalization Service practice, which is to
admit such persons, but not allow them to be employed in the
United States unless they independently met all applicable INA
requirements.
Persons seeking temporary entry into the United States
under Sec. 101(a)(15)(W) would have been:
Lconsidered to be seeking nonimmigrant status;
Lsubject to general requirements relating to
admission of nonimmigrants, including those pertaining
to the issuance of entry documents and the presumption
set out in INA Sec. 214(b) (8 U.S.C. Sec. 1184(b)); and
Laccorded nonimmigrant status on admission.
It should be noted that while there are many similarities
in the way professionals would have been treated under
Sec. 101(a)(15)(W) of the INA, as proposed by the bill, and the
way H-1B professionals are treated, a determination of
admissibility under subparagraph (W) would have neither
foreclosed nor established eligibility for entry as an H-1B
professional. Further, Sec. 101(a)(15)(W) would not have
authorized a professional to establish a business or practice
in the United States in which the professional will be self-
employed.
Numerical Limitations
Paragraph six of Section D of Annex 14.3 of the Agreement
permits the United States to establish an annual numerical
limit on temporary entries under the Agreement of Chilean
professionals. Under the proposed paragraph (8) of INA
Sec. 214(g) that would have been added by Sec. 402(a) of the
draft bill, the Secretary of Homeland Security would have
issued regulations establishing an annual limit of up to 1,400
new temporary entry applications from Chilean professionals, as
provided in Appendix 14.3(D)(6) of the Agreement.
Labor Attestations
Under Sec. (D)(5) of Annex 14.3 of the Agreement, the
United States may require that an attestation of compliance
with labor and immigration laws be made a condition for the
temporary entry of Chilean professionals. This provision allows
U.S. labor and immigration officials to ensure that U.S.
employers are not hiring Chilean professionals as a way to put
pressure on U.S. employees to accept lower wages or less
favorable terms and conditions of employment.
Section 402(b) of the draft legislation would have
implemented the attestation requirement under the Agreement.
Section 402(b) of the draft bill would have amended Sec. 212 of
the INA (8 U.S.C. Sec. 1182) by adding a new subsection (s) to
the end of that section. INA Sec. 212(s)(1), which would have
been added by Sec. 402(b) of the bill, required a U.S. employer
seeking a temporary entry visa for a Chilean professional to
file an attestation with the Secretary of Labor. The
attestation would have consisted of four core elements similar
to those required for attestations under the ``H-1B'' visa
program. See 8 U.S.C. Sec. 1182(n)(1)(A)-(C). Thus, an employer
would have been required to attest that:
LIt would pay the employee the higher of: (a)
the actual wage paid to all other individuals with
similar experience and qualifications for the specific
employment in question, or (b) the prevailing wage
level for the occupational classification in the area
of employment.
LIt will provide working conditions for the
employee that will not adversely affect the working
conditions of workers similarly employed.
LThere is no strike or lockout in the course
of a labor dispute in the occupational classification
at the place of employment.
LThe employer has provided notice of its
attestation to its employees' bargaining representative
in the occupational classification in the area for
which the employee is sought or, absent such a
representative, has otherwise notified its employees.
The remainder of new INA Sec. 212(s) contains provisions
for enforcing the labor attestation requirement. Like the
contents of the attestation itself, the enforcement
requirements are based on requirements under the ``H-1B'' visa
program. INA Sec. 212(s)(2)(A) requires an employer to make
copies of labor attestations (and such accompanying documents
as are necessary) available for public examination at the
employer's principal place of business or worksite. INA
Sec. 212(s)(2)(B) requires the Secretary of Labor to compile a
list of all labor attestations filed including, with respect to
each attestation, the wage rate, number of alien professionals
sought for employment, period of intended employment, and date
of need. INA Sec. 212(s)(2)(C) provides that the Secretary of
Labor shall accept a labor attestation within 7 days of filing
and issue the certification necessary for an alien to enter the
United States as a nonimmigrant under INA Sec. 101(a)(15)(W),
unless the attestation is incomplete or obviously inaccurate.
INA Sec. 212(s)(3)(A) requires the Secretary of Labor to
establish a process for the receipt, investigation, and
disposition of complaints respecting an employer's failure to
meet a condition specified in a labor attestation or an
employer's misrepresentation of material facts in such an
attestation. Section 212(s)(3) also sets forth penalties that
may be imposed for violation of the labor attestation
requirements, including monetary fines and denial of
applications for visas under INA section 101(a)(15)(W) for
specified periods. INA Sec. 212(s)(4) defines certain terms
used in INA Sec. 212(s).
Labor Disputes
Article 14.3(2) of the Agreement establishes an important
safeguard for the domestic labor force in the United States and
Chile, respectively. It permits either government to refuse to
issue an immigration document authorizing employment where the
temporary entry of a business person might affect adversely the
settlement of a labor dispute or the employment of a person
involved in such dispute. Article 14.3(2) thus allows the
United States to deny temporary entry to a Chilean business
person whose activities in the United States require employment
authorization if admission might interfere with an ongoing
labor dispute. If the United States invokes article 14.3(2), it
must inform the business person in writing of the reasons for
its action and notify Chile.
Section 403 of the draft bill implements article 14.3(2) of
the Agreement by amending INA Sec. 214(j) (8 U.S.C.
Sec. 1184(j)), designating current subsection (j) as paragraph
(1) and inserting a new paragraph (2). New paragraph (2) of INA
Sec. 214(j) provides authority to refuse nonimmigrant
classification under specified circumstances to a Chilean
business person seeking to enter the United States under and
pursuant to the Agreement. In particular, nonimmigrant
classification must be refused if there is a strike or lockout
affecting the relevant occupational classification at the
Chilean business person's place of employment or intended place
of employment in the United States, unless that person
establishes, pursuant to regulations issued by the Secretary of
Homeland Security after consultations with the Secretary of
Labor, that the business person's entry will not adversely
affect the settlement of the strike or lockout or the
employment of any person involved in the strike or lockout.
New paragraph (2) also requires the provision of notice to
the affected Chilean business persons and to Chile of a
determination to deny nonimmigrant classification, as required
under article 14.3(3) of the Agreement. INA Sec. 214(j)(2) as
inserted by the bill applies only to requests for temporary
entry by traders and investors, intra-company transferees, and
professionals--i.e., the categories of nonimmigrants that
require employment authorization under U.S. law (corresponding
to Sections B, C, and D of Annex 14.3 of the Agreement).
Employment in the U.S. labor market is not permitted for
business visitors, as defined in INA Sec. 101(a)(15)(B) (8
U.S.C. 1101(a)(15)(B)) (corresponding to Section A of Annex
14.3 of the Agreement); violations of status under that
provision that involve labor disputes are fully redressable
under existing law.
Section 214(j)(2) is similar to existing INA provisions
that prohibit admission in certain circumstances where
interference with a labor dispute may result. For example,
under INA Sec. 212(n)(1)(B) (8 U.S.C. Sec. 1182(n)(1)(B)), the
U.S. employer sponsoring an alien for admission must certify
that there is no strike or lockout in the occupational
classification at the place of employment. Additionally,
Sec. 214(j)(2) will supplement INA Sec. 237(a)(1)(C) (8 U.S.C.
1227(a)(1)(C)) and related INA provisions that now authorize
deportation of an alien admitted under a particular
nonimmigrant category if the alien ceases to perform the type
of work permitted under that category or misrepresented the
nature of the work at the time of admission. The Department of
Labor will provide strike certifications to the Department of
Homeland Security, as it has provided to the Immigration and
Naturalization Service under existing provisions, pursuant to 8
C.F.R. 214.2(h)(17).
Administrative Action
Chile will be added to the list of countries, maintained by
the Department of State, whose citizens are eligible for treaty
trader and treaty investor status under INA Sec. 101(a)(15)(E).
With respect to professionals provided for under Section D of
Annex 14.3 of the Agreement, in all cases where a state license
is required to engage in a particular activity in the United
States, such professionals will be required to obtain the
appropriate state license. Pursuant to INA Sec. 101(a)(15)(W)
as added by section 402(a) of the bill, the Secretary of
Homeland Security will issue regulations implementing the
numerical limits set forth in Appendix 14.3(D)(6) of the
Agreement. The Secretary of Labor would have issued regulations
implementing the labor attestation provisions in new subsection
(s) of INA Sec. 212. The administrative agencies responsible
for administering the other amendments to the INA described
above will promulgate regulations to implement those
amendments.
Pre-Introduction ``Mock Markup'' of U.S.-Chile FTA Implementing
Legislation and Committee Amendments Incorporated Into H.R.
2738
On July 10, 2003, the Committee held a pre-introduction
``mock markup'' of draft implementing legislation submitted by
the Administration to the Committee. The Committee's
consideration of this draft legislation was limited to title IV
of the draft implementing legislation. During this meeting,
Chairman Sensenbrenner, Ranking Member Conyers, and several
Members of the Committee made it clear that they opposed the
inclusion of immigration provisions in H.R. 2738 and that they
would not support any future FTA that included substantive
changes to United States immigration law.
Judiciary Committee Amendments to Draft Implementing
Legislation
The Committee reported several amendments to the
immigration provisions by voice vote. The amendments were
reflected in H.R. 2738.
First, the Committee reported an amendment by
Representative King to transfer the new ``W'' professional
worker visa category for citizens of Chile to section
101(a)(15)(H)(i)(b(1) of the Immigration and Nationality Act,
rather than 101(a)(15)(W) as provided for in the draft
implementing legislation. Representative King's amendment also
ensured that in future years, the national H-1B visa cap will
be reduced in two situations. First, the number of H-1B visas
available in a fiscal year will be reduced by the number of
Chilean citizens granted extensions of H-1B1 status in that
fiscal year after having previously been granted five or more
consecutive prior extensions. Second, the number of H-1B visas
available in a fiscal year will be reduced by the number of H-
1B1 visas allocated (1,400 for citizens of Chile). However, if
at the end of a fiscal year, the 6,800 slots reserved for
citizens of Chile and Singapore have not been exhausted, the
number of H-1B visas available for that fiscal year will be
adjusted upwards by the number of unused Chile/Singapore visas.
These newly available H-1B visas may be issued within the first
45 days of the next fiscal year to aliens who had applied for
such visas during the fiscal year for which the adjustment was
made.
The Committee also reported an amendment offered by
Representatives Berman and Conyers requiring that an
application for every second extension for an H-1B1 visa be
accompanied by a new employer attestation. This will have the
effect of requiring the employer to update the prevailing wage
determination at such time. The amendment also requires that an
employer pay a fee when H-1B1 status is initially granted and
after every second extension of that status. The fee shall be
the same as the fee an employer must pay when petitioning for
an H-1B visa. However, if no fee is being assessed under the H-
1B program, no fee shall be imposed under the H-1B1 program.
Finally, the implementing legislation now clarifies that an
employer generally cannot sponsor an alien for an E, L, or H-
1B1 visa it there is any labor dispute occurring in the
occupational classification at the place of employment,
regardless of whether the labor dispute is classified as a
strike or lockout. In this regard, worker protections in H.R.
2738 are broader than those contained in the H-1B visa
category.
Hearings
No hearings were held on H.R. 2738 before the Committee on
the Judiciary.
Committee Consideration
On July 16, 2003, the Committee met in open session and
ordered favorably reported the bill H.R. 2738 without amendment
by voice vote, a quorum being present.
Vote of the Committee
In compliance with clause 3(b) of Rule XIII of the Rules of
the House of Representatives, the Committee notes that there
were no recorded votes during the committee consideration of
H.R. 2738.
Committee Oversight Findings
In compliance with clause 3(c)(1) of Rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of Rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of Rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of Rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 2738, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 21, 2003.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2738, a bill to
implement the United States-Chile Free Trade Agreement.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Annabelle
Bartsch, who can be reached at 226-2680.
Sincerely,
Douglas Holtz-Eakin.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 2738--A bill to implement the United States-Chile Free Trade
Agreement.
SUMMARY
H.R. 2738 would approve the free trade agreement (FTA)
between the government of the United States and the government
of Chile that was entered into on June 6, 2003. It would
provide for tariff reductions and other changes in law related
to implementation of the agreement, such as provisions dealing
with dispute settlement, rules of origin, and safeguard
measures for textile and apparel industries. The bill also
would allow the temporary entry of certain business persons
into the United States.
The Congressional Budget Office estimates that enacting the
bill would reduce revenues by $5 million in 2004, by $38
million over the 2004-2008 period, and by $109 million over the
2004-2013 period, net of income and payroll tax offsets. The
bill would not have a significant effect on direct spending or
spending subject to appropriation. CBO has determined that H.R.
2738 contains no intergovernmental or private-sector mandates
as defined in the Unfunded Mandates Reform Act (UMRA) and would
not affect the budgets of State, local, or tribal governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 2738 is shown in the
following table.
BASIS OF ESTIMATE
Revenues
Under the United States-Chile agreement, all tariffs on
U.S. imports from Chile would be phased out over time. The
tariffs would be phased out for individual products at varying
rates according to one of several different timetables ranging
from immediate elimination to partial elimination over 10
years. According to the U.S. International Trade Commission
(USITC), the U.S. collected $24 million in customs duties in
2002 on about $3.6 billion of imports from Chile. These imports
consist mostly of edible fruits and nuts, articles of wood or
copper, fish and crustaceans, and certain organic chemicals.
Based on these data, CBO estimates that phasing out tariff
rates as outlined in the U.S.-Chile agreement would reduce
revenues by $5 million in 2004, by $38 million over the 2004-
2008 period, and by $109 million over the 2004-2013 period, net
of income and payroll tax offsets.
This estimate includes the effects of increased imports
from Chile that would result from the reduced prices of
imported products in the United States, reflecting the lower
tariff rates. It is likely that some of the increase in U.S.
imports from Chile would displace imports from other countries.
In the absence of specific data on the extent of this
substitution effect, CBO assumes that an amount equal to one-
half of the increase in U.S. imports from Chile would displace
imports from other countries.
H.R. 2738 would also allow the Secretary of Labor to assess
civil monetary penalties on employers for violations of the
labor attestation process with respect to certain workers from
Chile. CBO expects that any additional revenues collected as a
result would amount to less than $500,000 in any year.
Direct Spending
Title IV of the bill would establish a new nonimmigrant
category for certain professional workers from Chile. The
legislation would limit the number of annual entries under this
category to 1,400, plus spouses and children. The Bureau of
Citizenship and Immigration Services (BCIS) would charge fees
of about $100 to provide nonimmigrant visas, so CBO estimates
that the agency would collect less than $1 million annually in
offsetting receipts (a credit against direct spending). The
agency is authorized to spend such fees without further
appropriation, so the net impact on BCIS spending would not be
significant.
Under current law, the Department of State also collects
$100 application fee for nonimmigrant visas. These collections
are spent on border security and consular functions. CBO
estimates that the net budgetary impact would be less than
$500,000 a year.
Spending Subject to Appropriation
Title I of H.R. 2738 would authorize the appropriation the
necessary funds for the Department of Commerce to pay the
United States' share of the costs of the dispute settlement
procedures established by the agreement. Based on information
from the agency, CBO estimates that implementing this provision
would cost $100,000 in 2004, and $250,000 in each of the
following years, subject to the availability of appropriated
funds.
Title III would require the International Trade Commission
(ITC) to investigate claims of injury to domestic industries as
a result of the FTA. The ITC would have 120 days to determine
whether a domestic industry has been injured, and if so, would
recommend the necessary amount of import relief. The ITC would
also submit a report on its determination to the President.
According to the ITC, similar FTAs have resulted in only a
handful of cases each year, at an average cost of about
$200,000 per investigation. Based on this information, CBO
estimates the bill would have no significant effect on spending
subject to appropriation.
SUMMARY OF EFFECT ON REVENUES AND DIRECT SPENDING
The overall effects of H.R. 2738 on revenues and direct
spending are shown in the following table.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
The bill contains no intergovernmental or private-sector
mandates as defined in UMRA and would not affect the budgets of
State, local, or tribal governments.
ESTIMATE PREPARED BY:
Federal Revenues: Annabelle Bartsch (226-2680)
Federal Spending:
Dispute Settlements--Melissa Zimmerman (226-2860)
Immigration--Mark Grabowicz (226-2860), Christi Hawley-Sadoti
(226-2820), and Sunita D'Monte (226-2840)
Impact on State, Local, and Tribal Governments: Melissa Merrell
(225-3220)
Impact on the Private Sector: Paige Piper/Bach (226-0207)
ESTIMATE APPROVED BY:
G. Thomas Woodward
Assistant Director for Tax Analysis
Peter H. Fontaine
Deputy Assistant Director for Budget Analysis
Performance Goals and Objectives
H.R. 2738 does not authorize funding. Therefore, clause
3(c)(4) of Rule XIII of the Rules of the House of
Representatives is inapplicable.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
Section-by-Section Analysis and Discussion
The following section-by-section analysis describes the
sections of H.R. 2738 within the rule X jurisdiction of the
Committee on the Judiciary.
TITLE IV. TEMPORARY ENTRY FOR BUSINESS PERSONS
It should be emphasized that all grounds of inadmissibility
found at section 212(a) of the Immigration and Nationality Act
(INA), as the section currently exists or as it may be modified
in the future, shall apply to any applicant for admission
pursuant to title IV.
Sec. 401. Nonimmigrant Traders and Investors.
``E'' nonimmigrant visas are available for treaty traders
and investors. A visa is available to an alien who:
is entitled to enter the United States under and in
pursuance of the provisions of a treaty of commerce and
navigation between the United States and the foreign state of
which he is a national, and the spouse and children of any such
alien if accompanying or following to join him: i) solely to
carry on substantial trade, including trade in services or
trade in technology, principally between the United States and
the foreign state of which he is a national, or ii) solely to
develop and direct the operations of an enterprise in which he
has invested . . . a substantial amount of capital[.]
INA section 101(a)(15)(E).
Section 401 of the bill provides that nationals of Chile
(along with spouses and children, if accompanying or following
to join), may, if otherwise eligible for a visa and admissible
into the U.S., be considered to be classifiable as ``E''
nonimmigrants if entering solely for a purpose specified in
clause (i) or (ii) of INA section 101(a)(15)(E). H.R. 2739
contains a similar provision for nationals of Singapore.
Sec. 402. Nonimmigrant Professionals; Labor Attestations.
Section 402 of the bill creates a new nonimmigrant
classification--``H1B1''--at section 101(a)(15)(H)(i)(b1) of
the INA. This classification, for nationals of Chile (and
Singapore, as provided for in H.R. 2739), is generally derived
from the ``H1B'' program, found at section 101(a)(15)(H)(i)(b).
Already existing and future Executive Office for Immigration
Review (Immigration Judges and the Board of Immigration
Appeals) and Federal court precedent regarding the H-1B program
shall be applicable to identical provisions of the H-1B1
program, and shall be applicable to similar provisions where
appropriate. In deciding whether to grant visas for aliens
under the H-1B1 visas, State Department consular officers and
supervising officers of the Department of Homeland Security
shall be familiar with, and adhere to, this precedent.
There are four principal differences between the H-1B
program and the new H-1B1 program. First, the H-1B1 category
has its own yearly numerical quota--1,400 for Chileans (and
5,400 for Singaporeans, as contained in H.R. 2739). Second,
under the H-1B1 program, there is no petition requirement.
After the Department of Labor approves an employer's
attestation, a State Department consular officer overseas will
decide whether to grant visas to alien applicants, dependent in
part on whether the prospective job meets the standards of a
qualifying occupation and whether the alien meets the
educational standards of a qualifying employee. Third, while an
alien can be granted H-1B status for a maximum of 6 years which
generally cannot be further extended, an alien will receive H-
1B1 status for a 1-year period, which may be extended in 1 year
increments. Fourth, aliens seeking H-1B status do not have to
prove, as most prospective nonimmigrants do, that they do not
have an intent to become immigrants (see INA section 214(b)).
Aliens seeking H-1B1 status will have to prove that they have
no intent to become immigrants, as befits the purely temporary
nature of visa provisions created as part of free trade
agreements.
H-1B1 visas are available for workers coming temporarily to
the United States to perform services in a specialty
occupation. Such an occupation is one that requires ``(A)
theoretical and practical application of a body of specialized
knowledge; and (B) attainment of a bachelor's or higher degree
in the specific speciality (or its equivalent) as a minimum for
entry into the occupation in the United States.'' This
requirement is to be interpreted identically to the requirement
to qualify as a professional under the H-1B category (except as
regarding four professions listed in appendix 14.3(D)(2) of the
U.S.-Chile Free Trade Agreement). Thus, to qualify as a
professional for purposes of section 402, a person must be
engaged in a specialty occupation requiring a theoretical and
practical application of a body of highly specialized knowledge
and the attainment of a bachelor's degree or higher in the
specific specialty (or the equivalent of such a degree).
H-1B1 visas shall authorize admission for 1 year. Such
admission may be extended at the sole discretion of the
Department of Homeland Security, but only in 1 year increments,
and only if the alien is found to be in compliance with INA
section 214(b). After every second extension of H-1B1 status,
an application for a further extension must be accompanied by a
new employer attestation. This will have the effect of
requiring the employer to update the prevailing wage
determination at such time.
The total number of initial applications for admission
under the H-1B1 program for Chilean nationals during any fiscal
year is 1,400 (plus accompanying or following to join spouses
and children). This will have the effect of reducing the H-1B
visa quota in two ways. First, the number of aliens who may be
issued visas or otherwise provided nonimmigrant status in a
fiscal year under the H-1B program will be reduced by the
maximum number of approvals of initial applications for
admission permitted under the H-1B1 program in that fiscal
year. However, if at the end of a fiscal year, the 1,400
approvals for nationals of Chile (or the 5,400 for nationals of
Singapore under H.R. 2739) have not been exhausted, the number
of H-1B visas available for that fiscal year will be adjusted
upwards by the number of unused Chile/Singapore visas. These
newly available H-1B visas may be issued within the first 45
days of the next fiscal year to aliens who had applied for such
visas during the fiscal year for which the adjustment was made.
Second, the number of aliens who may be issued visas or
otherwise provided nonimmigrant status in a fiscal year under
the H-1B program will be reduced by the number of extensions of
H-1B1 status approved in that fiscal year to aliens who have
previously been granted five or more consecutive prior
extensions.
As under the H-1B program, the H-1B1 program's mechanism
for protecting American workers is not a lengthy pre-arrival
review of the availability of suitable American workers (such
as the labor certification process necessary to obtain most
employer-sponsored immigrant visas). Instead, an employer files
a ``labor condition attestation'' with the Department of Labor
(identical to the labor condition application under the H-1B
program) making certain basic attestations (promises) and the
Department of Labor then investigates complaints alleging
noncompliance.
The H-1B1 program contains the four basic attestations of
the H-1B1 program (found at INA sections 212(n)(1) for the H-1B
program and at INA sections 212(t)(1) for the H-1B1 program):
LThe employer will pay H-1B1 aliens wages that
are the higher of the actual wage level paid by the
employer to all other individuals with similar
experience and qualifications for the specific
employment in question or the prevailing wage level for
the occupational classification in the area of
employment, and the employer will provide working
conditions for H-1B1 aliens that will not adversely
affect those of workers similarly employed.
LThere is no strike or lockout in the course
of a labor dispute in the occupational classification
at the place of employment.
LAt the time of the filing of the application,
the employer has provided notice of the filing to the
bargaining representative of the employer's employees
in the occupational classification and area for which
the H-1B1 aliens are sought, or if there is no such
bargaining representative, the employer has posted
notice through such methods as physical posting in
conspicuous locations at the place of employment or
electronic notification to employees in the relevant
occupation classification.
LThe attestation will contain a specification
of the number of aliens sought, the occupational
classification in which the aliens will be employed,
and the wage rate and conditions under which they will
be employed.
There are two other attestations in the H-1B program that
expire at the end of fiscal year 2003 that apply to specific
employers, generally H-1B dependent employers. Should Congress
decide to reauthorize these additional H-1B attestations and
their enforcement mechanisms, or expand their scope, such as by
requiring all employers to meet their terms, Congress can also
make these changes applicable to the H-1B1 program. This is
provided for specifically in annex 14.3(D)(5) of the U.S.-Chile
Free Trade Agreement (``[A] party may require a business person
seeking temporary entry [as a professional] to comply with
procedures applicable to temporary entry of professionals, such
as an attestation of compliance with the Party's labor and
immigration laws.'') and similarly in the U.S.-Singapore Free
Trade Agreement. More generally, should Congress extend or
modify any provisions of the H-1B program, it may make
corresponding modifications to the amendments to the INA made
by this bill (and H.R. 2739), to the extent consistent with the
obligations of the United States under the Agreement, as
spelled out in side letters sent to the Chilean (and
Singaporean) governments by Ambassador Zoellick. Thus, even
though this implementing legislation does not include all
requirements currently present in the H-1B visa program,
Congress is not precluded from amending the INA to add
additional requirements to the H1B1 program consistent with the
H-1B program, such as the attestations for H-1B dependent
employers (as mentioned, and found at INA section 212(n)(1)(E)-
(G)) or the self initiated investigations of employer
compliance (found at INA section 212(n)(2)(G)).
The enforcement scheme for the H-1B1 program is generally
the same as that of the H-1B program (found at INA section
212(n)(2) for the H-1B program and at INA section 212(t)(3) for
the H-1B1 program). Department of Labor investigations as to
whether an employer has failed to fulfill its promises or has
misrepresented material facts in its attestation are triggered
by complaints filed by aggrieved persons or organizations
(including bargaining representatives). Investigations are to
be conducted where there is reasonable cause to believe that a
violation has occurred.
An employer is subject to penalties for failing to fulfill
the attestations--for willfully failing to pay the required
wage, for there being a strike or lockout, for substantially
failing to provide notice or provide all required information
in an application, and for making a misrepresentation of
material fact in an attestation. Penalties include
administrative remedies (including civil monetary penalties of
up to $35,000 per violation) that the Department of Labor
determines to be appropriate and a bar for at least 1 year on
the Department of State or the Department of Homeland
Security's ability to approve petitions or applications filed
by the employer for alien workers (both immigrant and
nonimmigrant) (found at INA section 212(n)(2)(C) for the H-1B
program and 212(t)(3)(C) for the H-1B1 program). In addition,
the Department of Labor must order an employer to provide H-1B1
nonimmigrants with back pay where wages were not paid at the
required level, regardless of whether other penalties are
imposed (found at INA section 212(n)(2)(D) for the H-1B program
and INA section 212(t)(3)(D) for the H-1B program).
Also included in the H-1B1 enforcement scheme is 1) the bar
on retaliation (found at INA sections 212(n)(2)(C)(iv)-(v) for
the H-1B program and at INA sections 212(t)(3)(C)(iv)-(v) for
the H-1B1 program), 2) the ability of the Department of Labor
to engage in random investigations in certain circumstances
(found at INA section 212(n)(2)(D) for the H-1B program and at
INA section 212(t)(3)(D) for the H-1B1 program), and 3) the
preservation of any other enforcement authority under the INA
(found at INA section 212(n)(2)(F) for the H-1B program and at
INA section 212(t)(3)(F) for the H-1B1 program).
Also included in the H-1B1 program are 1) the prohibition
of an employer from seeking a penalty against an alien for
ceasing employment (found at INA section 212(n)(2)(C)(vi) for
the H-1B program and INA section 212(t)(3)(C)(vi) for the H-1B1
program), 2) the prohibition of an employer from ``benching''
an alien (found at INA section 212(n)(2)(C)(vii) for the H-1B
program and INA section 212(t)(3)(C)(vii) for the H-1B1
program), 3) the requirement that an employer offer to an alien
benefits and the eligibility for benefits on the same basis and
criteria as the employer offers U.S. workers (found at INA
section 212(n)(2)(C)(viii) for the H-1B program and INA section
212(t)(3)(C)(viii) for the H-1B1 program), and 4) the special
rule for computation of the prevailing wage for educational and
research institutions (found at INA section 212(p) ).
Under the H-1B1 program, an employer will have to pay a fee
in order for an alien to be initially granted H-1B1 status and
after every second extension of that status. The fee shall be
the same as the fee an employer must pay when petitioning for
an H-1B visa (currently $1,000 per alien). However, if no fee
is being assessed under the H-1B program (the current fee
expires at the end of the fiscal year), no fee shall be imposed
under the H-1B1 program.
Sec. 403 Labor Disputes
Section 403 of the bill provides that, except when
superseded by the enhanced labor protections of the H-1B1
program found at found at INA section 212(t)(1), an alien who
seeks to enter the U.S. under and pursuant to the U.S.-Chile
Free Trade Agreement (and the U.S-Singapore Free Trade
Agreement as under H.R. 2739), and the spouse and children
accompanying and following to join, may be denied admission as
an ``E'', ``L'' or ``H1B1'' nonimmigrant if there is in
progress a labor dispute in the occupational classification at
the place or intended place of employment, unless the alien
establishes that the alien's entry will not affect adversely
the settlement of the labor dispute or the employment of any
person who is involved in the labor dispute.
Section 404. Conforming Amendments
Section 404 of the bill makes conforming amendments.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of Rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
TARIFF ACT OF 1930
* * * * * * *
TITLE III--SPECIAL PROVISIONS
Part I--Miscellaneous
* * * * * * *
SEC. 311. BONDED MANUFACTURING WAREHOUSES.
All articles manufactured in whole or in part of imported
materials, or of materials subject to internal-revenue tax, and
intended for exportation without being charged with duty, and
without having an internal-revenue stamp affixed thereto,
shall, under such regulations as the Secretary of the Treasury
may prescribe, in order to be so manufactured and exported, be
made and manufactured in bonded warehouses similar to those
known and designated in Treasury Regulations as bonded
warehouses, class six: Provided, That the manufacturer of such
articles shall first give satisfactory bonds for the faithful
observance of all the provisions of law and of such regulations
as shall be prescribed by the Secretary of the Treasury:
Provided further, That the manufacture of distilled spirits
from grain, starch, molasses, or sugar, including all dilutions
or mixtures of them or either of them, shall not be permitted
in such manufacturing warehouses.
Whenever goods manufactured in any bonded warehouse
established under the provisions of the preceding paragraph
shall be exported directly therefrom or shall be duly laden for
transportation and immediate exportation under the supervision
of the proper officer who shall be duly designated for that
purpose, such goods shall be exempt from duty and from the
requirements relating to revenue stamps.
No flour, manufactured in a bonded manufacturing warehouse
from wheat imported from ninety days after the date of the
enactment of this Act, shall be withdrawn from such warehouse
for exportation without payment of a duty on such imported
wheat equal to any reduction in duty which by treaty will apply
in respect of such flour in the country to which it is to be
exported.
Any materials used in the manufacture of such goods, and
any packages, coverings, vessels, brands, and labels used in
putting up the same may, under the regulations of the Secretary
of the Treasury, be conveyed without the payment of revenue tax
or duty into any bonded manufacturing warehouse, and imported
goods may, under the aforesaid regulations, be transferred
without the exaction of duty from any bonded warehouse into any
bonded manufacturing warehouse; but this privilege shall not be
held to apply to implements, machinery, or apparatus to be used
in the construction or repair of any bonded manufacturing
warehouse or for the prosecution of the business carried on
therein.
Articles or materials received into such bonded
manufacturing warehouse or articles manufactured therefrom may
be withdrawn or removed therefrom for direct shipment and
exportation or for transportation and immediate exportation in
bond to foreign countries or to the Philippine Islands under
the supervision of the officer duly designated therefor by the
appropriate customs officer of the port, who shall certify to
such shipment and exportation, or ladening for transportation,
as the case may be, describing the articles by their mark or
otherwise, the quantity, the date of exportation, and the name
of the vessel: Provided, That the by-products incident to the
processes of manufacture, including waste derived from cleaning
rice in bonded warehouse under the Act of March 24, 1874, in
said bonded warehouses may be withdrawn for domestic
consumption on the payment of duty equal to the duty which
would be assessed and collected by law if such waste or by-
products were imported from a foreign country: Provided, That
all waste material may be destroyed under Government
supervision. All labor performed and services rendered under
these provisions shall be under the supervision of a duly
designated officer of the customs and at the expense of the
manufacturer.
A careful account shall be kept by the appropriate custom
officer of all merchandise delivered by him to any bonded
manufacturing warehouse, and a sworn monthly return, verified
by the customs officers in charge, shall be made by the
manufacturer containing a detailed statement of all imported
merchandise used by him in the manufacture of exported
articles.
Before commencing business the proprietor of any
manufacturing warehouse shall file with the Secretary of the
Treasury a list of all the articles intended to be manufactured
in such warehouse, and state the formula of manufacture and the
names and quantities of the ingredients to be used therein.
Articles manufactured under these provisions may be
withdrawn under such regulations as the Secretary of the
Treasury may prescribe for transportation and delivery into any
bonded warehouse for the sole purpose of export therefrom:
Provided, That cigars manufactured in whole of tobacco imported
from any one country, made and manufactured in such bonded
manufacturing warehouses, may be withdrawn for home consumption
upon the payment of the duties on such tobacco in its condition
as imported under such regulations as the Secretary of the
Treasury may prescribe, and the payment of the internal-revenue
tax accruing on such cigars in their condition as withdrawn,
and the boxes or packages containing such cigars shall be
stamped to indicate their character, origin of tobacco from
which made, and place of manufacture.
The provisions of section 3433 of the Revised Statutes
shall, so far as may be practicable, apply to any bonded
manufacturing warehouse established under this Act and to the
merchandise conveyed therein.
Distilled spirits and wines which are rectified in bonded
manufacturing warehouse, class six, and distilled spirits which
are reduced in proof and bottled in such warehouses, shall be
deemed to have been manufactured within the meaning of this
section, and may be withdrawn as hereinbefore provided, and
likewise for shipment in bond to Puerto Rico, subject to the
provisions of this section, and under such regulations as the
Secretary of the Treasury may prescribe, there to be withdrawn
for consumption or be rewarehoused and subsequently withdrawn
for consumption: Provided, That upon withdrawal in Puerto Rico
for consumption, the duties imposed by the customs laws of the
United States shall be collected on all imported merchandise
(in its condition as imported) and imported containers used in
the manufacture and putting up of such spirits and wines in
such warehouses: Provided further, That no internal-revenue tax
shall be imposed on distilled spirits and wines rectified in
class six warehouses if such distilled spirits and wines are
exported or shipped in accordance with the provisions of this
section, and that no person rectifying distilled spirits or
wines in such warehouses shall be subject by reason of such
rectification to the payment of special tax as a rectifier.
No article manufactured in a bonded warehouse from
materials that are goods subject to NAFTA drawback, as defined
in section 203(a) of the North American Free Trade Agreement
Implementation Act, may be withdrawn from warehouse for
exportation to a NAFTA country, as defined in section 2(4) of
that Act, without assessment of a duty on the materials in
their condition and quantity, and at their weight, at the time
of importation into the United States. The duty shall be paid
before the 61st day after the date of exportation, except that
upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid to the NAFTA
country on the article, the customs duty may be waived or
reduced (subject to section 508(b)(2)(B)) in an amount that
does not exceed the lesser of--
(1) the total amount of customs duties paid or owed
on the materials on importation into the United States,
or
(2) the total amount of customs duties paid on the
materials to the NAFTA country.
If Canada ceases to be a NAFTA country and the suspension of
the operation of the United States-Canada Free-Trade Agreement
thereafter terminates, no article manufactured in a bonded
warehouse, except to the extent that such article is made from
an article that is a drawback eligible good under section
204(a) of the United States-Canada Free-Trade Agreement
Implementation Act of 1988, may be withdrawn from such
warehouse for exportation to Canada during the period such
Agreement is in operation without payment of a duty on such
imported merchandise in its condition, and at the rate of duty
in effect, at the time of importation.
No article manufactured in a bonded warehouse from
materials that are goods subject to Chile FTA drawback, as
defined in section 203(a) of the United States-Chile Free Trade
Agreement Implementation Act, may be withdrawn from warehouse
for exportation to Chile without assessment of a duty on the
materials in their condition and quantity, and at their weight,
at the time of importation into the United States. The duty
shall be paid before the 61st day after the date of
exportation, except that the duty may be waived or reduced by--
(1) 100 percent during the 8-year period beginning
on January 1, 2004;
(2) 75 percent during the 1-year period beginning
on January 1, 2012;
(3) 50 percent during the 1-year period beginning
on January 1, 2013; and
(4) 25 percent during the 1-year period beginning
on January 1, 2014.
SEC. 312. BONDED SMELTING AND REFINING WAREHOUSES.
(a) * * *
(b) The several charges against such bond may be canceled
in whole or in part--
(1) upon the exportation from the bonded warehouses
which treated the metal-bearing materials, or from any
other bonded smelting or refining warehouse, of a
quantity of the same kind of metal contained in any
product of smelting or refining of metal-bearing
materials equal to the dutiable quantity contained in
the imported metal-bearing materials less wastage
provided for in subsection (c); [except that in the
case of a withdrawal for exportation of such a product
to a NAFTA country, as defined in section 2(4) of the
North American Free Trade Agreement Implementation Act,
if any of the imported metal-bearing materials are
goods subject to NAFTA drawback, as defined in section
203(a) of that Act, the duties on the materials shall
be paid, and the charges against the bond canceled,
before the 61st day after the date of exportation; but
upon the presentation, before such 61st day, of
satisfactory evidence of the amount of any customs
duties paid to the NAFTA country on the product, the
duties on the materials may be waived or reduced
(subject to section 508(b)(2)(B)) in an amount that
does not exceed the lesser of--
[(A) the total amount of customs duties
owed on the materials on importation into the
United States, or
[(B) the total amount of customs duties
paid to the NAFTA country on the product, or]
except that--
(A) in the case of a withdrawal for
exportation of such a product to a NAFTA
country, as defined in section 2(4) of the
North American Free Trade Agreement
Implementation Act, if any of the imported
metal-bearing materials are goods subject to
NAFTA drawback, as defined in section 203(a) of
that Act, the duties on the materials shall be
paid, and the charges against the bond
canceled, before the 61st day after the date of
exportation; but upon the presentation, before
such 61st day, of satisfactory evidence of the
amount of any customs duties paid to the NAFTA
country on the product, the duties on the
materials may be waived or reduced (subject to
section 508(b)(2)(B)) in an amount that does
not exceed the lesser of--
(i) the total amount of customs
duties owed on the materials on
importation into the United States, or
(ii) the total amount of customs
duties paid to the NAFTA country on the
product, and
(B) in the case of a withdrawal for
exportation of such a product to Chile, if any
of the imported metal-bearing materials are
goods subject to Chile FTA drawback, as defined
in section 203(a) of the United States-Chile
Free Trade Agreement Implementation Act, the
duties on the materials shall be paid, and the
charges against the bond canceled, before the
61st day after the date of exportation, except
that the duties may be waived or reduced by--
(i) 100 percent during the 8-year
period beginning on January 1, 2004,
(ii) 75 percent during the 1-year
period beginning on January 1, 2012,
(iii) 50 percent during the 1-year
period beginning on January 1, 2013,
and
(iv) 25 percent during the 1-year
period beginning on January 1, 2014, or
* * * * * * *
(4) upon the transfer of the bond charges to a
bonded customs warehouse other than a bonded smelting
or refining warehouse by physical shipment of a
quantity of the same kind of metal contained in any
product of smelting or refining equal to the dutiable
quantity contained in the imported metal-bearing
materials less wastage provided for in subsection (c),
and upon withdrawal from such other warehouse for
exportation or domestic consumption the provisions of
this section shall apply; [except that in the case of a
withdrawal for exportation of such a product to a NAFTA
country, as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act, if
any of the imported metal-bearing materials are goods
subject to NAFTA drawback, as defined in section 203(a)
of that Act, the duties on the materials shall be paid,
and the charges against the bond canceled, before the
61st day after the date of exportation; but upon the
presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid to
the NAFTA country on the product, the duties on the
materials may be waived or reduced (subject to section
508(b)(2)(B)) in an amount that does not exceed the
lesser of--
[(A) the total amount of customs duties
owed on the materials on importation into the
United States, or
[(B) the total amount of customs duties
paid to the NAFTA country on the product, or]
except that--
(A) in the case of a withdrawal for
exportation of such a product to a NAFTA
country, as defined in section 2(4) of the
North American Free Trade Agreement
Implementation Act, if any of the imported
metal-bearing materials are goods subject to
NAFTA drawback, as defined in section 203(a) of
that Act, the duties on the materials shall be
paid, and the charges against the bond
canceled, before the 61st day after the date of
exportation; but upon the presentation, before
such 61st day, of satisfactory evidence of the
amount of any customs duties paid to the NAFTA
country on the product, the duties on the
materials may be waived or reduced (subject to
section 508(b)(2)(B)) in an amount that does
not exceed the lesser of--
(i) the total amount of customs
duties owed on the materials on
importation into the United States, or
(ii) the total amount of customs
duties paid to the NAFTA country on the
product, and
(B) in the case of a withdrawal for
exportation of such a product to Chile, if any
of the imported metal-bearing materials are
goods subject to Chile FTA drawback, as defined
in section 203(a) of the United States-Chile
Free Trade Agreement Implementation Act, the
duties on the materials shall be paid, and the
charges against the bond canceled, before the
61st day after the date of exportation, except
that the duties may be waived or reduced by--
(i) 100 percent during the 8-year
period beginning on January 1, 2004,
(ii) 75 percent during the 1-year
period beginning on January 1, 2012,
(iii) 50 percent during the 1-year
period beginning on January 1, 2013,
and
(iv) 25 percent during the 1-year
period beginning on January 1, 2014, or
* * * * * * *
(d) Upon the exportation of a product of smelting or
refining other than refined metal the bond shall be credited
with a quantity of metal equivalent to the quantity of metal
contained in the product exported less the proportionate part
of the deductions allowed for losses in determination of the
bond charge being cancelled that would not ordinarily be
sustained in production of the specific product exported as
ascertained from time to time by the Secretary of the Treasury;
[except that in the case of a withdrawal for exportation to a
NAFTA country, as defined in section 2(4) of the North American
Free Trade Agreement Implementation Act, if any of the imported
metal-bearing materials are goods subject to NAFTA drawback, as
defined in section 203(a) of that Act, charges against the bond
shall be paid before the 61st day after the date of
exportation; but upon the presentation, before such 61st day,
of satisfactory evidence of the amount of any customs duties
paid to the NAFTA country on the product, the bond shall be
credited (subject to section 508(b)(2)(B)) in an amount not to
exceed the lesser of--
[(1) the total amount of customs duties paid or
owed on the materials on importation into the United
States, or
[(2) the total amount of customs duties paid to the
NAFTA country on the product.] except that--
(1) in the case of a withdrawal for exportation to
a NAFTA country, as defined in section 2(4) of the
North American Free Trade Agreement Implementation Act,
if any of the imported metal-bearing materials are
goods subject to NAFTA drawback, as defined in section
203(a) of that Act, charges against the bond shall be
paid before the 61st day after the date of exportation;
but upon the presentation, before such 61st day, of
satisfactory evidence of the amount of any customs
duties paid to the NAFTA country on the product, the
bond shall be credited (subject to section
508(b)(2)(B)) in an amount not to exceed the lesser
of--
(A) the total amount of customs duties paid
or owed on the materials on importation into
the United States, or
(B) the total amount of customs duties paid
to the NAFTA country on the product; and
(2) in the case of a withdrawal for exportation to
Chile, if any of the imported metal-bearing materials
are goods subject to Chile FTA drawback, as defined in
section 203(a) of the United States-Chile Free Trade
Agreement Implementation Act, charges against the bond
shall be paid before the 61st day after the date of
exportation, and the bond shall be credited in an
amount equal to--
(A) 100 percent of the total amount of
customs duties paid or owed on the materials on
importation into the United States during the
8-year period beginning on January 1, 2004,
(B) 75 percent of the total amount of
customs duties paid or owed on the materials on
importation into the United States during the
1-year period beginning on January 1, 2012,
(C) 50 percent of the total amount of
customs duties paid or owed on the materials on
importation into the United States during the
1-year period beginning on January 1, 2013, and
(D) 25 percent of the total amount of
customs duties paid or owed on the materials on
importation into the United States during the
1-year period beginning on January 1, 2014.
* * * * * * *
SEC. 313. DRAWBACK AND REFUNDS.
(a) * * *
* * * * * * *
(j) Unused Merchandise Drawback.--
(1) * * *
* * * * * * *
(4)(A) Effective upon the entry into force of the
North American Free Trade Agreement, the exportation to
a NAFTA country, as defined in section 2(4) of the
North American Free Trade Agreement Implementation Act,
of merchandise that is fungible with and substituted
for imported merchandise, other than merchandise
described in paragraphs (1) through (8) of section
203(a) of that Act, shall not constitute an exportation
for purposes of paragraph (2).
(B) Beginning on January 1, 2015, the exportation
to Chile of merchandise that is fungible with and
substituted for imported merchandise, other than
merchandise described in paragraphs (1) through (5) of
section 203(a) of the United States-Chile Free Trade
Agreement Implementation Act, shall not constitute an
exportation for purposes of paragraph (2). The
preceding sentence shall not be construed to permit the
substitution of unused drawback under paragraph (2) of
this subsection with respect to merchandise described
in paragraph (2) of section 203(a) of the United
States-Chile Free Trade Agreement Implementation Act.
* * * * * * *
[(n)] (n) Refunds, Waivers, or Reductions Under Certain
Free Trade Agreements.--(1) For purposes of this subsection and
subsection (o)--
(A) * * *
(B) the terms ``NAFTA country'' and ``good subject
to NAFTA drawback'' have the same respective meanings
that are given such terms in sections 2(4) and 203(a)
of the NAFTA Act; [and]
(C) a refund, waiver, or reduction of duty under
paragraph (2) of this subsection or paragraph (1) of
subsection (o) is subject to section 508(b)(2)(B)[.];
and
(D) the term ``good subject to Chile FTA drawback''
has the meaning given that term in section 203(a) of
the United States-Chile Free Trade Agreement
Implementation Act.
* * * * * * *
(4)(A) For purposes of subsections (a), (b), (f), (h),
(j)(2), (p), and (q), if an article that is exported to Chile
is a good subject to Chile FTA drawback, no customs duties on
the good may be refunded, waived, or reduced, except as
provided in subparagraph (B).
(B) The customs duties referred to in subparagraph (A) may
be refunded, waived, or reduced by--
(i) 100 percent during the 8-year period beginning
on January 1, 2004;
(ii) 75 percent during the 1-year period beginning
on January 1, 2012;
(iii) 50 percent during the 1-year period beginning
on January 1, 2013; and
(iv) 25 percent during the 1-year period beginning
on January 1, 2014.
[(o)] (o) Special Rules for Certain Vessels and Imported
Materials.--(1) For purposes of subsection (g), if--
(A) * * *
* * * * * * *
(3) For purposes of subsection (g), if--
(A) a vessel is built for the account and ownership
of a resident of Chile or the Government of Chile, and
(B) imported materials that are used in the
construction and equipment of the vessel are goods
subject to Chile FTA drawback, as defined in section
203(a) of the United States-Chile Free Trade Agreement
Implementation Act,
no customs duties on such materials may be refunded, waived, or
reduced, except as provided in paragraph (4).
(4) The customs duties referred to in paragraph (3) may be
refunded, waived or reduced by--
(A) 100 percent during the 8-year period beginning
on January 1, 2004;
(B) 75 percent during the 1-year period beginning
on January 1, 2012;
(C) 50 percent during the 1-year period beginning
on January 1, 2013; and
(D) 25 percent during the 1-year period beginning
on January 1, 2014.
* * * * * * *
SEC. 508. RECORDKEEPING.
(a) * * *
(b) [Exportations to Free Trade Countries.--] Exportations
to NAFTA Countries.--
(1) * * *
(2) Exports to nafta countries.--
(A) * * *
(B) Claims for certain waivers, reductions,
or refunds of duties or for credit against
bonds.--
(i) In general.--Any person that
claims with respect to an article--
(I) a waiver or reduction
of duty under [the last
paragraph of section 311] the
eleventh paragraph of section
311, section 312(b)(1) or (4),
section 562(2), or [the last
proviso to section 3(a)] the
proviso preceding the last
proviso to section 3(a) of the
Foreign Trade Zones Act;
* * * * * * *
(f) Certificates of Origin for Goods Exported Under the
United States-Chile Free Trade Agreement.--
(1) Definitions.--In this subsection:
(A) Records and supporting documents.--The
term ``records and supporting documents''
means, with respect to an exported good under
paragraph (2), records and documents related to
the origin of the good, including--
(i) the purchase, cost, and value
of, and payment for, the good;
(ii) if applicable, the purchase,
cost, and value of, and payment for,
all materials, including recovered
goods, used in the production of the
good; and
(iii) if applicable, the production
of the good in the form in which it was
exported.
(B) Chile fta certificate of origin.--The
term ``Chile FTA Certificate of Origin'' means
the certification, established under article
4.13 of the United States-Chile Free Trade
Agreement, that a good qualifies as an
originating good under such Agreement.
(2) Exports to chile.--Any person who completes and
issues a Chile FTA Certificate of Origin for a good
exported from the United States shall make, keep, and,
pursuant to rules and regulations promulgated by the
Secretary of the Treasury, render for examination and
inspection all records and supporting documents related
to the origin of the good (including the Certificate or
copies thereof).
(3) Retention period.--Records and supporting
documents shall be kept by the person who issued a
Chile FTA Certificate of Origin for at least 5 years
after the date on which the certificate was issued.
(g) Penalties.--Any person who fails to retain records and
supporting documents required by subsection (f) or the
regulations issued to implement that subsection shall be liable
for the greater of--
(1) a civil penalty not to exceed $10,000; or
(2) the general record keeping penalty that applies
under the customs laws of the United States.
* * * * * * *
SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS SERVICE.
(a) * * *
* * * * * * *
(g) Denial of Preferential Tariff Treatment Under United
States-Chile Free Trade Agreement.--If the Bureau of Customs
and Border Protection or the Bureau of Immigration and Customs
Enforcement finds indications of a pattern of conduct by an
importer of false or unsupported representations that goods
qualify under the rules of origin set out in section 202 of the
United States-Chile Free Trade Agreement Implementation Act,
the Bureau of Customs and Border Protection, in accordance with
regulations issued by the Secretary of the Treasury, may deny
preferential tariff treatment under the United States-Chile
Free Trade Agreement to entries of identical goods imported by
that person until the person establishes to the satisfaction of
the Bureau of Customs and Border Protection that
representations of that person are in conformity with such
section 202.
* * * * * * *
SEC. 520. REFUNDS AND ERRORS.
(a) * * *
* * * * * * *
[(d)] (d) Goods Qualifying Under Free Trade Agreement Rules
of Origin.--Notwithstanding the fact that a valid protest was
not filed, the Customs Service may, in accordance with
regulations prescribed by the Secretary, reliquidate an entry
to refund any excess duties (including any merchandise
processing fees) paid on a good qualifying under the rules of
origin set out in section 202 of the North American Free Trade
Agreement Implementation Act or section 202 of the United
States-Chile Free Trade Agreement Implementation Act for which
no claim for preferential tariff treatment was made at the time
of importation if the importer, within 1 year after the date of
importation, files, in accordance with those regulations, a
claim that includes--
(1) a written declaration that the good qualified
under [those] the applicable rules at the time of
importation;
(2) copies of all applicable NAFTA Certificates of
Origin (as defined in section 508(b)(1)), or other
certificates of origin, as the case may be; and
* * * * * * *
SEC. 562. MANIPULATION IN WAREHOUSE.
Unless by special authority of the Secretary of the
Treasury, no merchandise shall be withdrawn from bonded
warehouse in less quantity than an entire bale, cask, box, or
other package; or, if in bulk, in the entire quantity imported
or in a quantity not less than one ton weight. All merchandise
so withdrawn shall be withdrawn in the original packages in
which imported unless, upon the application of the importer, it
appears to the appropriate customs officer that it is necessary
to the safety or preservation of the merchandise to repack or
transfer the same; except that upon permission therefor being
granted by the Secretary of the Treasury, and under customs
supervision, at the expense of the proprietor, merchandise may
be cleaned, sorted, repacked, or otherwise changed in
condition, but not manufactured, in bonded warehouses
established for that purpose and be withdrawn therefrom--
(1) * * *
* * * * * * *
(3) without payment of duties for exportation to
any foreign country other than [to a NAFTA country] to
Chile, to a NAFTA country, or to Canada when exports to
that country are subject to paragraph (4);
(4) without payment of duties for exportation to
Canada (if that country ceases to be a NAFTA country
and the suspension of the operation of the United
States-Canada Free-Trade Agreement thereafter
terminates), but the exemption from the payment of
duties under this paragraph applies only in the case of
an exportation during the period such Agreement is in
operation of merchandise that--
(A) * * *
(B) is a drawback eligible good under
section 204(a) of the United States-Canada
Free-Trade Agreement Implementation Act of
1988[; and]
(5) without payment of duties for shipment to the
Virgin Islands, American Samoa, Wake Island, Midway
Island, Kingman Reef, Johnston Island or the island of
Guam[.]; and
(6)(A) without payment of duties for exportation to
Chile, if the merchandise is of a kind described in any
of paragraphs (1) through (5) of section 203(a) of the
United States-Chile Free Trade Agreement Implementation
Act; and
(B) for exportation to Chile if the merchandise
consists of goods subject to Chile FTA drawback, as
defined in section 203(a) of the United States-Chile
Free Trade Agreement Implementation Act, except that--
(i) the merchandise may not be withdrawn
from warehouse without assessment of a duty on
the merchandise in its condition and quantity,
and at its weight, at the time of withdrawal
from the warehouse with such additions to, or
deductions from, the final appraised value as
may be necessary by reason of a change in
condition, and
(ii) duty shall be paid on the merchandise
before the 61st day after the date of
exportation, except that such duties may be
waived or reduced by--
(I) 100 percent during the 8-year
period beginning on January 1, 2004,
(II) 75 percent during the 1-year
period beginning on January 1, 2012,
(III) 50 percent during the 1-year
period beginning on January 1, 2013,
and
(IV) 25 percent during the 1-year
period beginning on January 1, 2014.
* * * * * * *
SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE.
(a) * * *
* * * * * * *
(c) Maximum Penalties.--
(1) * * *
* * * * * * *
(6) Prior disclosure regarding claims under the
united states-chile free trade agreement.--An importer
shall not be subject to penalties under subsection (a)
for making an incorrect claim that a good qualifies as
an originating good under section 202 of the United
States-Chile Free Trade Agreement Implementation Act if
the importer, in accordance with regulations issued by
the Secretary of the Treasury, voluntarily makes a
corrected declaration and pays any duties owing.
[(6)] (7) Seizure.--If the Secretary has reasonable
cause to believe that a person has violated the
provisions of subsection (a) and that such person is
insolvent or beyond the jurisdiction of the United
States or that seizure is otherwise essential to
protect the revenue of the United States or to prevent
the introduction of prohibited or restricted
merchandise into the customs territory of the United
States, then such merchandise may be seized and, upon
assessment of a monetary penalty, forfeited unless the
monetary penalty is paid within the time specified by
law. Within a reasonable time after any such seizure is
made, the Secretary shall issue to the person concerned
a written statement containing the reasons for the
seizure. After seizure of merchandise under this
subsection, the Secretary may, in the case of
restricted merchandise, and shall, in the case of any
other merchandise (other than prohibited merchandise),
return such merchandise upon the deposit of security
not to exceed the maximum monetary penalty which may be
assessed under subsection (c).
* * * * * * *
(g) False Certifications of Origin Under the United States-
Chile Free Trade Agreement.--
(1) In general.--Subject to paragraph (2), it is
unlawful for any person to certify falsely, by fraud,
gross negligence, or negligence, in a Chile FTA
Certificate of Origin (as defined in section
508(f)(1)(B) of this Act that a good exported from the
United States qualifies as an originating good under
the rules of origin set out in section 202 of the
United States-Chile Free Trade Agreement Implementation
Act. The procedures and penalties of this section that
apply to a violation of subsection (a) also apply to a
violation of this subsection.
(2) Immediate and voluntary disclosure of incorrect
information.--No penalty shall be imposed under this
subsection if, immediately after an exporter or
producer that issued a Chile FTA Certificate of Origin
has reason to believe that such certificate contains or
is based on incorrect information, the exporter or
producer voluntarily provides written notice of such
incorrect information to every person to whom the
certificate was issued.
(3) Exception.--A person may not be considered to
have violated paragraph (1) if--
(A) the information was correct at the time
it was provided in a Chile FTA Certificate of
Origin but was later rendered incorrect due to
a change in circumstances; and
(B) the person immediately and voluntarily
provides written notice of the change in
circumstances to all persons to whom the person
provided the certificate.
* * * * * * *
----------
SECTION 3 OF THE ACT OF JUNE 18, 1934
(Commonly known as the ``Foreign Trade Zones Act'')
Sec. 3. (a) Foreign and domestic merchandise of every
description, except such as is prohibited by law, may, without
being subject to the customs laws of the United States, except
as otherwise provided in this Act, be brought into a zone and
may be stored, sold, exhibited, broken up, repacked, assembled,
distributed, sorted, graded, cleaned, mixed with foreign or
domestic merchandise, or otherwise manipulated, or be
manufactured except as otherwise provided in this Act, and be
exported, destroyed, or sent into customs territory of the
United States therefrom, in the original package or otherwise;
but when foreign merchandise is so sent from a zone into
customs territory of the United States it shall be subject to
the laws and regulations of the United States affecting
imported merchandise: Provided, That whenever the privilege
shall be requested and there has been no manipulation or
manufacture effecting a change in tariff classification, the
appropriate customs officer shall take under supervision any
lot or part of a lot of foreign merchandise in a zone, cause it
to be appraised and taxes determined and duties liquidated
thereon. Merchandise so taken under supervision may be stored,
manipulated, or manufactured under the supervision and
regulations prescribed by the Secretary of the Treasury, and
whether mixed or manufactured with domestic merchandise or not
may, under regulations prescribed by the Secretary of the
Treasury, be exported or destroyed, or may be sent into customs
territory upon the payment of such liquidated duties and
determined taxes thereon. If merchandise so taken under
supervision has been manipulated or manufactured, such duties
and taxes shall be payable on the quantity of such foreign
merchandise used in the manipulation or manufacture of the
entered article. Allowance shall be made for recoverable and
irrecoverable waste; and if recoverable waste is sent into
customs territory, it shall be dutiable and taxable in its
condition and quantity and at its weight at the time of entry.
Where two or more products result from the manipulation or
manufacture of merchandise in a zone the liquidated duties and
determined taxes shall be distributed to the several products
in accordance with their relative value at the time of
separation with due allowance for waste as provided for above:
Provided further, That subject to such regulations respecting
identity and the safeguarding of the revenue as the Secretary
of the Treasury may deem necessary, articles, the growth,
product, or manufacture of the United States, on which all
internal-revenue taxes have been paid, if subject thereto, and
articles previously imported on which duty and/or tax has been
paid, or which have been admitted free of duty and tax, may be
taken into a zone from the customs territory of the United
States, placed under the supervision of the appropriate customs
officer, and whether or not they have been combined with or
made part, while in such zone, of other articles, may be
brought back thereto free of quotas, duty, or tax: Provided
further, That if in the opinion of the Secretary of the
Treasury their identity has been lost, such articles not
entitled to free entry by reason of noncompliance with the
requirements made hereunder by the Secretary of the Treasury
shall be treated when they reenter customs territory of the
United States as foreign merchandise under the provisions of
the tariff and internal-revenue laws in force at that time:
Provided further, That under the rules and regulations of the
controlling Federal agencies, articles which have been taken
into a zone from customs territory for the sole purpose of
exportation, destruction (except destruction of distilled
spirits, wines, and fermented malt liquors), or storage shall
be considered to be exported for the purpose of--
(1) * * *
* * * * * * *
Such a transfer may also be considered an exportation for the
purposes of other Federal laws insofar as Federal agencies
charged with the enforcement of those laws deem it advisable.
Such articles may not be returned to customs territory for
domestic consumption except where the Foreign-Trade Zones Board
deems such return to be in the public interest, in which event
the articles shall be subject to the provisions of paragraph
1615(f) of the Tariff Act of 1930, as amended: Provided
further, That no operation involving any foreign or domestic
merchandise brought into a zone which operation would be
subject to any provision or provisions of section 1807, chapter
15, chapter 16, chapter 17, chapter 21, chapter 23, chapter 24,
chapter 25, chapter 26, or chapter 32 of the Internal Revenue
Code if performed in customs territory, or involving the
manufacture of any article provided for in paragraph 367 or
paragraph 368 of the Tariff Act of 1930, shall be permitted in
a zone except those operations (other than rectification of
distilled spirits and wines, or the manufacture or production
of alcoholic products unfit for beverage purposes) which were
permissible under this Act prior to July 1, 1949: Provided
further, That articles produced or manufactured in a zone and
exported therefrom shall on subsequent importation into the
customs territory of the United States be subject to the import
laws applicable to like articles manufactured in a foreign
country, except that articles produced or manufactured in a
zone exclusively with the use of domestic merchandise, the
identity of which has been maintained in accordance with the
second proviso of this section, may, on such importation, be
entered as American goods returned: Provided further, That no
merchandise that consists of goods subject to NAFTA drawback,
as defined in section 203(a) of the North American Free Trade
Agreement Implementation Act, that is manufactured or otherwise
changed in condition shall be exported to a NAFTA country, as
defined in section 2(4) of that Act, without an assessment of a
duty on the merchandise in its condition and quantity, and at
its weight, at the time of its exportation (or if the privilege
in the first proviso to this subsection was requested, an
assessment of a duty on the merchandise in its condition and
quantity, and at its weight, at the time of its admission into
the zone) and the payment of the assessed duty before the 61st
day after the date of exportation of the article, except that
upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid or owed to
the NAFTA country on the article, the customs duty may be
waived or reduced (subject to section 508(b)(2)(B) of the
Tariff Act of 1930) in an amount that does not exceed the
lesser of (1) the total amount of customs duties paid or owed
on the merchandise on importation into the United States, or
(2) the total amount of customs duties paid on the article to
the NAFTA country: Provided further, That if Canada ceases to
be a NAFTA country and the suspension of the operation of the
United States-Canada Free-Trade Agreement thereafter
terminates, with the exception of drawback eligible goods under
section 204(a) of the United States-Canada Free-Trade Agreement
Implementation Act of 1988, no article manufactured or
otherwise changed in condition (except a change by cleaning,
testing or repacking) shall be exported to Canada during the
period such Agreement is in operation without the payment of a
duty that shall be payable on the article in its condition and
quantity, and at its weight, at the time of its exportation to
Canada unless the privilege in the first proviso to this
subsection was requested[.]: Provided, further, That no
merchandise that consists of goods subject to Chile FTA
drawback, as defined in section 203(a) of the United States-
Chile Free Trade Agreement Implementation Act, that is
manufactured or otherwise changed in condition shall be
exported to Chile without an assessment of a duty on the
merchandise in its condition and quantity, and at its weight,
at the time of its exportation (or if the privilege in the
first proviso to this subsection was requested, an assessment
of a duty on the merchandise in its condition and quantity, and
at its weight, at the time of its admission into the zone) and
the payment of the assessed duty before the 61st day after the
date of exportation of the article, except that the customs
duty may be waived or reduced by (1) 100 percent during the 8-
year period beginning on January 1, 2004; (2) 75 percent during
the 1-year period beginning on January 1, 2012; (3) 50 percent
during the 1-year period beginning on January 1, 2013; and (4)
25 percent during the 1-year period beginning on January 1,
2014.
* * * * * * *
----------
SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF
1985
SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.
(a) * * *
(b) Limitations on Fees.--(1) * * *
* * * * * * *
(12) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Chile Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
* * * * * * *
----------
SECTION 202 OF THE TRADE ACT OF 1974
SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY
COMMISSION.
(a) Petitions and Adjustment Plans.--
(1) * * *
* * * * * * *
(8) The procedures concerning the release of
confidential business information set forth in section
332(g) of the Tariff Act of 1930 shall apply with
respect to information received by the Commission in
the course of investigations conducted under this
chapter, part 1 of title III of the North American Free
Trade Agreement Implementation Act, [and] title II of
the United States-Jordan Free Trade Area Implementation
Act, and title III of the United States-Chile Free
Trade Agreement Implementation Act. The Commission may
request that parties providing confidential business
information furnish nonconfidential summaries thereof
or, if such parties indicate that the information in
the submission cannot be summarized, the reasons why a
summary cannot be provided. If the Commission finds
that a request for confidentiality is not warranted and
if the party concerned is either unwilling to make the
information public or to authorize its disclosure in
generalized or summarized form, the Commission may
disregard the submission.
* * * * * * *
----------
IMMIGRATION AND NATIONALITY ACT
* * * * * * *
TITLE I--GENERAL
definitions
Section 101. (a) As used in this Act--
(1) * * *
* * * * * * *
(15) The term ``immigrant'' means every alien except an
alien who is within one of the following classes of
nonimmigrant aliens--
(A) * * *
* * * * * * *
(H) an alien (i)(b) subject to section 212(j)(2),
who is coming temporarily to the United States to
perform services (other than services described in
subclause (a) during the period in which such subclause
applies and other than services described in subclause
(ii)(a) or in subparagraph (O) or (P)) in a specialty
occupation described in section 214(i)(1) or as a
fashion model, who meets the requirements for the
occupation specified in section 214(i)(2) or, in the
case of a fashion model, is of distinguished merit and
ability, and with respect to whom the Secretary of
Labor determines and certifies to the Attorney General
that the intending employer has filed with the
Secretary an application under section [212(n)(1), or
(c)] 212(n)(1), or (b1) who is entitled to enter the
United States under and in pursuance of the provisions
of an agreement listed in section 214(g)(8)(A), who is
engaged in a specialty occupation described in section
214(i)(3), and with respect to whom the Secretary of
Labor determines and certifies to the Secretary of
Homeland Security and the Secretary of State that the
intending employer has filed with the Secretary of
Labor an attestation under section 212(t)(1), or (c)
who is coming temporarily to the United States to
perform services as a registered nurse, who meets the
qualifications described in section 212(m)(1), and with
respect to whom the Secretary of Labor determines and
certifies to the Attorney General that an unexpired
attestation is on file and in effect under section
212(m)(2) for the facility (as defined in section
212(m)(6)) for which the alien will perform the
services; or (ii)(a) having a residence in a foreign
country which he has no intention of abandoning who is
coming temporarily to the United States to perform
agricultural labor or services, as defined by the
Secretary of Labor in regulations and including
agricultural labor defined in section 3121(g) of the
Internal Revenue Code of 1954 and agriculture as
defined in section 3(f) of the Fair Labor Standards Act
of 1938 (29 U.S.C. 203(f)), of a temporary or seasonal
nature, or (b) having a residence in a foreign country
which he has no intention of abandoning who is coming
temporarily to the United States to perform other
temporary service or labor if unemployed persons
capable of performing such service or labor cannot be
found in this country, but this clause shall not apply
to graduates of medical schools coming to the United
States to perform services as members of the medical
profession; or (iii) having a residence in a foreign
country which he has no intention of abandoning who is
coming temporarily to the United States as a trainee,
other than to receive graduate medical education or
training, in a training program that is not designed
primarily to provide productive employment; and the
alien spouse and minor children of any such alien
specified in this paragraph if accompanying him or
following to join him;
* * * * * * *
TITLE II--IMMIGRATION
* * * * * * *
Chapter 2--Qualifications for Admission of Aliens; Travel Control of
Citizens and Aliens
* * * * * * *
GENERAL CLASSES OF ALIENS INELIGIBLE TO RECEIVE VISAS AND INELIGIBLE
FOR ADMISSION; WAIVERS OF INADMISSIBILITY
Sec. 212. (a) * * *
* * * * * * *
(p)(1) In computing the prevailing wage level for an
occupational classification in an area of employment for
purposes of subsections [(n)(1)(A)(i)(II) and (a)(5)(A)]
(a)(5)(A), (n)(1)(A)(i)(II), and (t)(1)(A)(i)(II) in the case
of an employee of--
(A) * * *
* * * * * * *
[(p)] (s) In determining whether an alien described in
subsection (a)(4)(C)(i) is inadmissible under subsection (a)(4)
or ineligible to receive an immigrant visa or otherwise to
adjust to the status of permanent resident by reason of
subsection (a)(4), the consular officer or the Attorney General
shall not consider any benefits the alien may have received
that were authorized under section 501 of the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996 (8
U.S.C. 1641(c)).
(t)(1) No alien may be admitted or provided status as a
nonimmigrant under section 101(a)(15)(H)(i)(b1) in an
occupational classification unless the employer has filed with
the Secretary of Labor an attestation stating the following:
(A) The employer--
(i) is offering and will offer during the
period of authorized employment to aliens
admitted or provided status under section
101(a)(15)(H)(i)(b1) wages that are at least--
(I) the actual wage level paid by
the employer to all other individuals
with similar experience and
qualifications for the specific
employment in question; or
(II) the prevailing wage level for
the occupational classification in the
area of employment,
whichever is greater, based on the best
information available as of the time of filing
the attestation; and
(ii) will provide working conditions for
such a nonimmigrant that will not adversely
affect the working conditions of workers
similarly employed.
(B) There is not a strike or lockout in the course
of a labor dispute in the occupational classification
at the place of employment.
(C) The employer, at the time of filing the
attestation--
(i) has provided notice of the filing under
this paragraph to the bargaining representative
(if any) of the employer's employees in the
occupational classification and area for which
aliens are sought; or
(ii) if there is no such bargaining
representative, has provided notice of filing
in the occupational classification through such
methods as physical posting in conspicuous
locations at the place of employment or
electronic notification to employees in the
occupational classification for which
nonimmigrants under section
101(a)(15)(H)(i)(b1) are sought.
(D) A specification of the number of workers
sought, the occupational classification in which the
workers will be employed, and wage rate and conditions
under which they will be employed.
(2)(A) The employer shall make available for public
examination, within one working day after the date on which an
attestation under this subsection is filed, at the employer's
principal place of business or worksite, a copy of each such
attestation (and such accompanying documents as are necessary).
(B)(i) The Secretary of Labor shall compile, on a current
basis, a list (by employer and by occupational classification)
of the attestations filed under this subsection. Such list
shall include, with respect to each attestation, the wage rate,
number of aliens sought, period of intended employment, and
date of need.
(ii) The Secretary of Labor shall make such list available
for public examination in Washington, D.C.
(C) The Secretary of Labor shall review an attestation
filed under this subsection only for completeness and obvious
inaccuracies. Unless the Secretary of Labor finds that an
attestation is incomplete or obviously inaccurate, the
Secretary of Labor shall provide the certification described in
section 101(a)(15)(H)(i)(b1) within 7 days of the date of the
filing of the attestation.
(3)(A) The Secretary of Labor shall establish a process for
the receipt, investigation, and disposition of complaints
respecting the failure of an employer to meet a condition
specified in an attestation submitted under this subsection or
misrepresentation by the employer of material facts in such an
attestation. Complaints may be filed by any aggrieved person or
organization (including bargaining representatives). No
investigation or hearing shall be conducted on a complaint
concerning such a failure or misrepresentation unless the
complaint was filed not later than 12 months after the date of
the failure or misrepresentation, respectively. The Secretary
of Labor shall conduct an investigation under this paragraph if
there is reasonable cause to believe that such a failure or
misrepresentation has occurred.
(B) Under the process described in subparagraph (A), the
Secretary of Labor shall provide, within 30 days after the date
a complaint is filed, for a determination as to whether or not
a reasonable basis exists to make a finding described in
subparagraph (C). If the Secretary of Labor determines that
such a reasonable basis exists, the Secretary of Labor shall
provide for notice of such determination to the interested
parties and an opportunity for a hearing on the complaint, in
accordance with section 556 of title 5, United States Code,
within 60 days after the date of the determination. If such a
hearing is requested, the Secretary of Labor shall make a
finding concerning the matter by not later than 60 days after
the date of the hearing. In the case of similar complaints
respecting the same applicant, the Secretary of Labor may
consolidate the hearings under this subparagraph on such
complaints.
(C)(i) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a failure to meet a condition of
paragraph (1)(B), a substantial failure to meet a condition of
paragraph (1)(C) or (1)(D), or a misrepresentation of material
fact in an attestation--
(I) the Secretary of Labor shall notify the
Secretary of State and the Secretary of Homeland
Security of such finding and may, in addition, impose
such other administrative remedies (including civil
monetary penalties in an amount not to exceed $1,000
per violation) as the Secretary of Labor determines to
be appropriate; and
(II) the Secretary of State or the Secretary of
Homeland Security, as appropriate, shall not approve
petitions or applications filed with respect to that
employer under section 204, 214(c), or
101(a)(15)(H)(i)(b1) during a period of at least 1 year
for aliens to be employed by the employer.
(ii) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a willful failure to meet a
condition of paragraph (1), a willful misrepresentation of
material fact in an attestation, or a violation of clause
(iv)--
(I) the Secretary of Labor shall notify the
Secretary of State and the Secretary of Homeland
Security of such finding and may, in addition, impose
such other administrative remedies (including civil
monetary penalties in an amount not to exceed $5,000
per violation) as the Secretary of Labor determines to
be appropriate; and
(II) the Secretary of State or the Secretary of
Homeland Security, as appropriate, shall not approve
petitions or applications filed with respect to that
employer under section 204, 214(c), or
101(a)(15)(H)(i)(b1) during a period of at least 2
years for aliens to be employed by the employer.
(iii) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a willful failure to meet a
condition of paragraph (1) or a willful misrepresentation of
material fact in an attestation, in the course of which failure
or misrepresentation the employer displaced a United States
worker employed by the employer within the period beginning 90
days before and ending 90 days after the date of filing of any
visa petition or application supported by the attestation--
(I) the Secretary of Labor shall notify the
Secretary of State and the Secretary of Homeland
Security of such finding and may, in addition, impose
such other administrative remedies (including civil
monetary penalties in an amount not to exceed $35,000
per violation) as the Secretary of Labor determines to
be appropriate; and
(II) the Secretary of State or the Secretary of
Homeland Security, as appropriate, shall not approve
petitions or applications filed with respect to that
employer under section 204, 214(c), or
101(a)(15)(H)(i)(b1) during a period of at least 3
years for aliens to be employed by the employer.
(iv) It is a violation of this clause for an employer who
has filed an attestation under this subsection to intimidate,
threaten, restrain, coerce, blacklist, discharge, or in any
other manner discriminate against an employee (which term, for
purposes of this clause, includes a former employee and an
applicant for employment) because the employee has disclosed
information to the employer, or to any other person, that the
employee reasonably believes evidences a violation of this
subsection, or any rule or regulation pertaining to this
subsection, or because the employee cooperates or seeks to
cooperate in an investigation or other proceeding concerning
the employer's compliance with the requirements of this
subsection or any rule or regulation pertaining to this
subsection.
(v) The Secretary of Labor and the Secretary of Homeland
Security shall devise a process under which a nonimmigrant
under section 101(a)(15)(H)(i)(b1) who files a complaint
regarding a violation of clause (iv) and is otherwise eligible
to remain and work in the United States may be allowed to seek
other appropriate employment in the United States for a period
not to exceed the maximum period of stay authorized for such
nonimmigrant classification.
(vi)(I) It is a violation of this clause for an employer
who has filed an attestation under this subsection to require a
nonimmigrant under section 101(a)(15)(H)(i)(b1) to pay a
penalty for ceasing employment with the employer prior to a
date agreed to by the nonimmigrant and the employer. The
Secretary of Labor shall determine whether a required payment
is a penalty (and not liquidated damages) pursuant to relevant
State law.
(II) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that an employer has committed a
violation of this clause, the Secretary of Labor may impose a
civil monetary penalty of $1,000 for each such violation and
issue an administrative order requiring the return to the
nonimmigrant of any amount paid in violation of this clause,
or, if the nonimmigrant cannot be located, requiring payment of
any such amount to the general fund of the Treasury.
(vii)(I) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under this
subsection and who places a nonimmigrant under section
101(a)(15)(H)(i)(b1) designated as a full-time employee in the
attestation, after the nonimmigrant has entered into employment
with the employer, in nonproductive status due to a decision by
the employer (based on factors such as lack of work), or due to
the nonimmigrant's lack of a permit or license, to fail to pay
the nonimmigrant full-time wages in accordance with paragraph
(1)(A) for all such nonproductive time.
(II) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under this
subsection and who places a nonimmigrant under section
101(a)(15)(H)(i)(b1) designated as a part-time employee in the
attestation, after the nonimmigrant has entered into employment
with the employer, in nonproductive status under circumstances
described in subclause (I), to fail to pay such a nonimmigrant
for such hours as are designated on the attestation consistent
with the rate of pay identified on the attestation.
(III) In the case of a nonimmigrant under section
101(a)(15)(H)(i)(b1) who has not yet entered into employment
with an employer who has had approved an attestation under this
subsection with respect to the nonimmigrant, the provisions of
subclauses (I) and (II) shall apply to the employer beginning
30 days after the date the nonimmigrant first is admitted into
the United States, or 60 days after the date the nonimmigrant
becomes eligible to work for the employer in the case of a
nonimmigrant who is present in the United States on the date of
the approval of the attestation filed with the Secretary of
Labor.
(IV) This clause does not apply to a failure to pay wages
to a nonimmigrant under section 101(a)(15)(H)(i)(b1) for
nonproductive time due to non-work-related factors, such as the
voluntary request of the nonimmigrant for an absence or
circumstances rendering the nonimmigrant unable to work.
(V) This clause shall not be construed as prohibiting an
employer that is a school or other educational institution from
applying to a nonimmigrant under section 101(a)(15)(H)(i)(b1)
an established salary practice of the employer, under which the
employer pays to nonimmigrants under section
101(a)(15)(H)(i)(b1) and United States workers in the same
occupational classification an annual salary in disbursements
over fewer than 12 months, if--
(aa) the nonimmigrant agrees to the compressed
annual salary payments prior to the commencement of the
employment; and
(bb) the application of the salary practice to the
nonimmigrant does not otherwise cause the nonimmigrant
to violate any condition of the nonimmigrant's
authorization under this Act to remain in the United
States.
(VI) This clause shall not be construed as superseding
clause (viii).
(viii) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under this
subsection to fail to offer to a nonimmigrant under section
101(a)(15)(H)(i)(b1), during the nonimmigrant's period of
authorized employment, benefits and eligibility for benefits
(including the opportunity to participate in health, life,
disability, and other insurance plans; the opportunity to
participate in retirement and savings plans; and cash bonuses
and non-cash compensation, such as stock options (whether or
not based on performance)) on the same basis, and in accordance
with the same criteria, as the employer offers to United States
workers.
(D) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that an employer has not paid wages
at the wage level specified in the attestation and required
under paragraph (1), the Secretary of Labor shall order the
employer to provide for payment of such amounts of back pay as
may be required to comply with the requirements of paragraph
(1), whether or not a penalty under subparagraph (C) has been
imposed.
(E) The Secretary of Labor may, on a case-by-case basis,
subject an employer to random investigations for a period of up
to 5 years, beginning on the date on which the employer is
found by the Secretary of Labor to have committed a willful
failure to meet a condition of paragraph (1) or to have made a
willful misrepresentation of material fact in an attestation.
The authority of the Secretary of Labor under this subparagraph
shall not be construed to be subject to, or limited by, the
requirements of subparagraph (A).
(F) Nothing in this subsection shall be construed as
superseding or preempting any other enforcement-related
authority under this Act (such as the authorities under section
274B), or any other Act.
(4) For purposes of this subsection:
(A) The term ``area of employment'' means the area
within normal commuting distance of the worksite or
physical location where the work of the nonimmigrant
under section 101(a)(15)(H)(i)(b1) is or will be
performed. If such worksite or location is within a
Metropolitan Statistical Area, any place within such
area is deemed to be within the area of employment.
(B) In the case of an attestation with respect to
one or more nonimmigrants under section
101(a)(15)(H)(i)(b1) by an employer, the employer is
considered to ``displace'' a United States worker from
a job if the employer lays off the worker from a job
that is essentially the equivalent of the job for which
the nonimmigrant or nonimmigrants is or are sought. A
job shall not be considered to be essentially
equivalent of another job unless it involves
essentially the same responsibilities, was held by a
United States worker with substantially equivalent
qualifications and experience, and is located in the
same area of employment as the other job.
(C)(i) The term ``lays off'', with respect to a
worker--
(I) means to cause the worker's loss of
employment, other than through a discharge for
inadequate performance, violation of workplace
rules, cause, voluntary departure, voluntary
retirement, or the expiration of a grant or
contract; but
(II) does not include any situation in
which the worker is offered, as an alternative
to such loss of employment, a similar
employment opportunity with the same employer
at equivalent or higher compensation and
benefits than the position from which the
employee was discharged, regardless of whether
or not the employee accepts the offer.
(ii) Nothing in this subparagraph is intended to
limit an employee's rights under a collective
bargaining agreement or other employment contract.
(D) The term ``United States worker'' means an
employee who--
(i) is a citizen or national of the United
States; or
(ii) is an alien who is lawfully admitted
for permanent residence, is admitted as a
refugee under section 207 of this title, is
granted asylum under section 208, or is an
immigrant otherwise authorized, by this Act or
by the Secretary of Homeland Security, to be
employed.
* * * * * * *
admission of nonimmigrants
Sec. 214. (a) * * *
(b) Every alien [(other than a nonimmigrant described in
subparagraph (H)(i), (L), or (V) of section 101(a)(15))] (other
than a nonimmigrant described in subparagraph (L) or (V) of
section 101(a)(15), and other than a nonimmigrant described in
any provision of section 101(a)(15)(H)(i) except subclause (b1)
of such section) shall be presumed to be an immigrant until he
establishes to the satisfaction of the consular officer, at the
time of application for a visa, and the immigration officers,
at the time of application for admission, that he is entitled
to a nonimmigrant status under section 101(a)(15). An alien who
is an officer or employee of any foreign government or of any
international organization entitled to enjoy privileges,
exemptions, and immunities under the International
Organizations Immunities Act, or an alien who is the attendant,
servant, employee, or member of the immediate family of any
such alien shall not be entitled to apply for or receive an
immigrant visa, or to enter the United States as an immigrant
unless he executes a written waiver in the same form and
substance as is prescribed by section 247(b).
(c)(1) The question of importing any alien as a
nonimmigrant under [section 101(a)(15)(H), (L), (O), or (P)(i)]
subparagraph (H), (L), (O), or (P)(i) of section 101(a)(15)
(excluding nonimmigrants under section 101(a)(15)(H)(i)(b1)) in
any specific case or specific cases shall be determined by the
Attorney General, after consultation with appropriate agencies
of the Government, upon petition of the importing employer.
Such petition shall be made and approved before the visa is
granted. The petition shall be in such form and contain such
information as the Attorney General shall prescribe. The
approval of such a petition shall not, of itself, be construed
as establishing that the alien is a nonimmigrant. For purposes
of this subsection with respect to nonimmigrants described in
section 101(a)(15)(H)(ii)(a), the term ``appropriate agencies
of Government'' means the Department of Labor and includes the
Department of Agriculture. The provisions of section 218 shall
apply to the question of importing any alien as a nonimmigrant
under section 101(a)(15)(H)(ii)(a).
* * * * * * *
(11)(A) Subject to subparagraph (B), the Secretary of
Homeland Security or the Secretary of State, as appropriate,
shall impose a fee on an employer who has filed an attestation
described in section 212(t)--
(i) in order that an alien may be initially granted
nonimmigrant status described in section
101(a)(15)(H)(i)(b1); or
(ii) in order to satisfy the requirement of the
second sentence of subsection (g)(8)(C) for an alien
having such status to obtain certain extensions of
stay.
(B) The amount of the fee shall be the same as the amount
imposed by the Secretary of Homeland Security under paragraph
(9), except that if such paragraph does not authorize such
Secretary to impose any fee, no fee shall be imposed under this
paragraph.
(C) Fees collected under this paragraph shall be deposited
in the Treasury in accordance with section 286(s).
* * * * * * *
(g)(1) * * *
* * * * * * *
(8)(A) The agreement referred to in section
101(a)(15)(H)(i)(b1) is the United States-Chile Free Trade
Agreement.
(B)(i) The Secretary of Homeland Security shall establish
annual numerical limitations on approvals of initial
applications by aliens for admission under section
101(a)(15)(H)(i)(b1).
(ii) The annual numerical limitations described in clause
(i) shall not exceed 1,400 for nationals of Chile for any
fiscal year. For purposes of this clause, the term ``national''
has the meaning given such term in article 14.9 of the United
States-Chile Free Trade Agreement.
(iii) The annual numerical limitations described in clause
(i) shall only apply to principal aliens and not to the spouses
or children of such aliens.
(iv) The annual numerical limitation described in paragraph
(1)(A) is reduced by the amount of the annual numerical
limitations established under clause (i). However, if a
numerical limitation established under clause (i) has not been
exhausted at the end of a given fiscal year, the Secretary of
Homeland Security shall adjust upwards the numerical limitation
in paragraph (1)(A) for that fiscal year by the amount
remaining in the numerical limitation under clause (i). Visas
under section 101(a)(15)(H)(i)(b) may be issued pursuant to
such adjustment within the first 45 days of the next fiscal
year to aliens who had applied for such visas during the fiscal
year for which the adjustment was made.
(C) The period of authorized admission as a nonimmigrant
under section 101(a)(15)(H)(i)(b1) shall be 1 year, and may be
extended, but only in 1-year increments. After every second
extension, the next following extension shall not be granted
unless the Secretary of Labor had determined and certified to
the Secretary of Homeland Security and the Secretary of State
that the intending employer has filed with the Secretary of
Labor an attestation under section 212(t)(1) for the purpose of
permitting the nonimmigrant to obtain such extension.
(D) The numerical limitation described in paragraph (1)(A)
for a fiscal year shall be reduced by one for each alien
granted an extension under subparagraph (C) during such year
who has obtained 5 or more consecutive prior extensions.
(h) The fact that an alien is the beneficiary of an
application for a preference status filed under section 204 or
has otherwise sought permanent residence in the United States
shall not constitute evidence of an intention to abandon a
foreign residence for purposes of obtaining a visa as a
nonimmigrant described in subparagraph [(H)(i)] (H)(i)(b) or
(c), (L), or (V) of section 101(a)(15) or otherwise obtaining
or maintaining the status of a nonimmigrant described in such
subparagraph, if the alien had obtained a change of status
under section 248 to a classification as such a nonimmigrant
before the alien's most recent departure from the United
States.
(i)(1) [For purposes] Except as provided in paragraph
(3), for purposes of section 101(a)(15)(H)(i)(b) and paragraph
(2), the term ``specialty occupation'' means an occupation that
requires--
(A) * * *
* * * * * * *
(3) For purposes of section 101(a)(15)(H)(i)(b1), the term
``specialty occupation'' means an occupation that requires--
(A) theoretical and practical application of a body
of specialized knowledge; and
(B) attainment of a bachelor's or higher degree in
the specific specialty (or its equivalent) as a minimum
for entry into the occupation in the United States.
(j)(1) Notwithstanding any other provision of this Act, an
alien who is a citizen of Canada or Mexico who seeks to enter
the United States under and pursuant to the provisions of
Section B, Section C, or Section D of Annex 1603 of the North
American Free Trade Agreement, shall not be classified as a
nonimmigrant under such provisions if there is in progress a
strike or lockout in the course of a labor dispute in the
occupational classification at the place or intended place of
employment, unless such alien establishes, pursuant to
regulations promulgated by the Attorney General, that the
alien's entry will not affect adversely the settlement of the
strike or lockout or the employment of any person who is
involved in the strike or lockout. Notice of a determination
under this [subsection] paragraph shall be given as may be
required by paragraph 3 of article 1603 of such Agreement. For
purposes of this [subsection] paragraph, the term ``citizen of
Mexico'' means ``citizen'' as defined in Annex 1608 of such
Agreement.
(2) Notwithstanding any other provision of this Act except
section 212(t)(1), and subject to regulations promulgated by
the Secretary of Homeland Security, an alien who seeks to enter
the United States under and pursuant to the provisions of an
agreement listed in subsection (g)(8)(A), and the spouse and
children of such an alien if accompanying or following to join
the alien, may be denied admission as a nonimmigrant under
subparagraph (E), (L), or (H)(i)(b1) of section 101(a)(15) if
there is in progress a labor dispute in the occupational
classification at the place or intended place of employment,
unless such alien establishes, pursuant to regulations
promulgated by the Secretary of Homeland Security after
consultation with the Secretary of Labor, that the alien's
entry will not affect adversely the settlement of the labor
dispute or the employment of any person who is involved in the
labor dispute. Notice of a determination under this paragraph
shall be given as may be required by such agreement.
* * * * * * *
Chapter 9--Miscellaneous
* * * * * * *
disposition of moneys collected under the provisions of this title
Sec. 286. (a) * * *
* * * * * * *
(s) H-1B Nonimmigrant Petitioner Account.--
(1) In general.--There is established in the
general fund of the Treasury a separate account, which
shall be known as the ``H-1B Nonimmigrant Petitioner
Account''. Notwithstanding any other section of this
title, there shall be deposited as offsetting receipts
into the account all fees collected under [section
214(c)(9).] paragraphs (9) and (11) of section 214(c).
* * * * * * *
Agency Correspondence
Markup Transcript
BUSINESS MEETING
WEDNESDAY, JULY 16, 2003
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 10:04 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr., [Chairman of the Committee] presiding.
Chairman Sensenbrenner. The Committee will come to order. A
working quorum is present.
Pursuant to notice, I now call up H.R. 2738, the
implementing legislation for the U.S.-Chile Free Trade
Agreement, and move its favorable recommendation to the House.
This legislation was introduced by the majority leader, by
request of the Administration, as provided by the Trade
Promotion Authority law. It makes necessary changes in U.S. law
to ensure compliance with the U.S.-Chile Free Trade Agreement.
Last week, the Committee considered draft implementing
legislation for this agreement and recommended changes to
provisions within this Committee's jurisdiction. The underlying
agreement contains several provisions within the jurisdiction
of this Committee. However, only those pertaining to the
immigration law require accompanying implementing legislation.
Thus, our consideration of the draft implementing
legislation last week was confined to those provisions. The
changes we recommended to those provisions have now been
incorporated in the introduced legislation that is before us
today, and they have greatly improved the product. Under the
Trade Promotion Authority law, no amendments to this introduced
legislation are in order.
In addition, Members should keep in mind that the
legislation has been referred to us only for consideration of
those provisions that fall under our jurisdiction.
Without objection the bill will be considered as read.
[The bill, H.R. 2738, follows:]
Chairman Sensenbrenner. And without objection, the
transcript of the mock markup that was held on this legislation
last week will be included in the record following opening
statements by myself and whoever the Democratic designated
hitter is.
I think that we thoroughly explained all of this last week,
and I am just going to ask unanimous consent that my opening
statement be placed in the record at this point.
[The prepared statement of Mr. Sensenbrenner follows:]
Prepared Statement of the Honorable F. James Sensenbrenner, Jr., a
Representative in Congress From the State of Wisconsin
H.R. 2738, the ``U.S.-Chile Free Trade Agreement Implementation
Act,'' and H.R. 2739, the ``U.S.-Singapore Free Trade Agreement
Implementation Act'' were referred to the Judiciary Committee for
consideration of provisions that fall within the Committee's
jurisdiction.
As we were all reminded last week, Trade Promotion Authority (TPA)
requires the Administration to actively consult with Congress when
initiating, negotiating, and implementing trade agreements. TPA also
provides that legislation to implement free trade agreements may not be
amended by committees of jurisdiction and may only receive an up or
down vote on the floor of the House.
The U.S.-Chile and U.S.-Singapore Free Trade Agreements contain
several issues within the purview of this Committee. Both agreements
contain competition clauses that ensure antitrust laws are applied in a
neutral, transparent, nondiscriminatory manner while safeguarding basic
procedural rights. The agreements also contain robust intellectual
property protections, requiring the governments of Chile and Singapore
to take affirmative steps to eradicate the piracy of trademarks,
patents, satellite television signals, and other forms of intellectual
property.
While the antitrust and intellectual property provisions within
these agreements are critical, they do not require any substantive
changes to U.S. law. As a result, our consideration of H.R. 2738 and
H.R. 2739 must be confined to Title IV of each bill, which pertains to
``Temporary Entry of Business Persons.''
I have long expressed concern about substantive changes to U.S. law
contained in free trade agreements. Before passage of Trade Promotion
Authority, immigration provisions were included in earlier free trade
agreements such as NAFTA, without any consultation with this Committee.
This practice unfortunately created precedent for subsequent trade
agreements, such as those we consider today, and immigration provisions
were included in the Chile and Singapore Free Trade Agreements before
passage of TPA last year.
At last week's mock markup, Members of this Committee spoke with a
united bipartisan voice that immigration provisions in future free
trade agreements will not receive the support of this Committee. In
addition, the implementing legislation we consider today contains a
number of modifications recommended by the Committee at last week's
mock markup.
While the draft implementing legislation created a separate visa
category for skilled workers from Chile and Singapore, the bills we
consider today amend the Immigration and Nationality Act to ensure that
these visas--6,800 in total--are deducted from the national H-1B cap
when they are issued or when a Chilean or Singaporean citizen is
granted an extension after five or more consecutive prior extensions.
In addition, the implementing legislation now provides that after
every second extension of H-1B1 status for a citizen of Chile or
Singapore, an application for a further extension must be accompanied
by a new employer attestation. This will have the effect of requiring
the employer to update the prevailing wage determination at such time.
Moreover, the legislation provides that an employer will have to
pay a fee in order for an alien to be initially granted H-1B1 status
and after every second extension of that status. The fee shall be the
same as the fee an employer must pay when petitioning for an H-1B visa.
However, if no fee is being assessed under the H-1B program, no fee
shall be imposed under the H-1B1 program.
Finally, the legislation now clarifies that an employer generally
cannot sponsor an alien for an E, L, or H-1B1 visa if there is any
labor dispute occurring in the occupational classification at the place
of employment, regardless of whether the labor dispute is classified as
a strike or lockout. In this regard, the implementing language provides
greater worker protections than those contained in the current H-1B
program.
The legislation we consider today is a considerable improvement
over the draft implementing legislation we considered last week. The
Committee's bipartisan commitment to ensuring that our recommendations
were incorporated into these bills reaffirms the constitutional
prerogative of Congress and this Committee's commitment to ensuring
that future free trade agreements are not used to substantively alter
United States immigration law. It is my hope and expectation that our
actions over the last week will not go unnoticed by this and future
Administrations.
These implementing bills as the result of extensive negotiation and
cooperation between the USTR and Members of this Committee, both
majority and minority. They represent true bipartisan compromise.
Several concerns of the minority were addressed and are represented in
the legislation before us. In recognition of the diligent work by the
Committee and the USTR to improve the implementing legislation, and in
light of the fact that our limited jurisdictional referral requires the
Committee to consider only provisions within our jurisdiction, I would
urge all members who support our work on the immigration sections in
Title IV of both bills to support reporting this legislation today. For
members who do not support portions of the implementing legislation
outside of this Committee's jurisdiction or the underlying trade
agreements themselves, I encourage you to vote to report the
legislation and then submit supplemental views to the committee report
outlining your position on the broader implementing legislation.
I now recognize the Ranking Member for his remarks.
Chairman Sensenbrenner. Without objection, all opening
statements will be placed in the record at this point.
[The prepared statement of Ms. Jackson Lee follows:]
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress From the State of Texas
I have serious reservations about the actions the U.S. Trade
Representative (USTR) has taken with respect to the temporary entry
provisions in the Chile and Singapore Free Trade Agreements. In my
opinion, they have overstepped their bounds and usurped this
Committee's jurisdiction. The negotiating objectives that Congress laid
out for USTR in the Trade Act of 2002 (TPA) do not include even one
word on temporary entry. There is no specific authority in TPA to
negotiate new visa categories or impose new requirements on our
temporary entry system, yet that is exactly what USTR has done in the
Chile and Singapore FTAs.
The Singapore and Chile FTAs create a new visa classification for
the temporary admission of nonimmigrant professionals that is similar
in many respects to the existing H-1B nonimmigrant classification. The
new nonimmigrant visa classification, however, would differ from the
existing H-1B program in significant ways.
Both agreements include caps on the number of professionals that
can be granted entry each year (1,400 for Chile and 5,400 for
Singapore).
The provisions for the new nonimmigrant visa permit an unlimited
number of extensions in 1-year increments. This makes it possible to
transform a temporary entry program into a permanent program. In
effect, employers would have the power to keep permanent workers in a
temporary legal status. In contrast, under the H-1B program, workers
are granted a three-year visa that can be renewed only once.
The Labor Certification Attestation (LCA) is one of the few
safeguards we have in our H-1B system for ensuring that employers do
not abuse temporary workers to undermine the domestic labor market. The
implementing legislation contains some, but not all, of the LCA
requirements that apply in our H-1B programs.
The implementing legislation completely omits the category of H-1B
dependent employers and the additional LCA requirements that apply to
them. H-1B dependent employers are required to attest that new entrants
will not displace U.S. workers and demonstrate that they have tried to
recruit U.S. workers. The implementing legislation should have a
similar provision.
In addition, the H-1B program authorizes the Secretary of Labor to
initiate her own investigations and enforcement proceedings based on
credible information that an employer is violating the rules of the H-
1B program. No such authority is granted in the administration of the
Chile and Singapore visa programs.
The Singapore and Chile FTAs require permanent changes to our
immigration system, but for now these changes are limited to two
countries. Unfortunately, we may see these programs expanded to dozens
of additional countries in future free trade agreements. The
administration is currently negotiating additional FTAs with Australia,
Morocco, five countries in Southern Africa, five countries in Central
America, and the 34 countries of the Western Hemisphere.
Immigration policy is a sensitive, political matter. Changes in
immigration policy have traditionally been the result of intense, open
negotiations between workers, employers, immigration advocates, and
Members of Congress. These issues simply do not belong in fast-tracked
trade agreements negotiated by executive agencies.
Chairman Sensenbrenner. Without objection, the previous
question is ordered, since a reporting quorum is not present.
[Intervening business.]
Chairman Sensenbrenner. Because a reporting quorum is
present, the unfinished business is the motion to report
favorably the bill H.R. 2738, the implementing legislation for
the U.S.-Chile Free Trade Agreement on which the previous
question has been ordered.
Ms. Jackson Lee. Mr. Chairman?
Chairman Sensenbrenner. The previous question has been
ordered. No debate is in order.
Those in favor will say aye.
Opposed, no.
The ayes appear to have it, the ayes have it, and the
motion to report favorably is agreed to. And all Members will
be given 2 days, as provided by House rules, in which to submit
additional dissenting supplemental or minority views.
Mock Markup Transcript
BUSINESS MEETING
THURSDAY, JULY 10, 2003
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 10:49 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr., [Chairman of the Committee] presiding.
Chairman Sensenbrenner. The Committee will be in order. A
working quorum is present.
The next item on the agenda for consideration is the draft
implementing legislation for the U.S.-Chile Free Trade
Agreement, which was signed by the President on June 6, 2003.
This draft legislation was provided to the Committee by the
U.S. Trade Representative and makes changes to U.S. law to
ensure compliance with the agreement.
Under the Trade Promotion Authority law, Congress cannot
amend either trade agreements or implementing legislation after
their formal introduction. The U.S.-Chile legislation will be
introduced next week, and today's markup will be to recommend
changes to provisions in a draft bill that are within the
jurisdiction of the Committee.
While the underlying agreement contains several provisions
within the jurisdiction of this Committee, only those
pertaining to immigration law require accompanying implementing
legislation. Thus, our markup today will be confined to these
provisions.
At the conclusion of today's session, these recommendations
will be forwarded to the Administration. While the
Administration will weigh recommendations made by the
Committee, it is not required to accept them. And with that in
mind, I now move that the Committee approve the U.S.-Chile
draft implementing legislation and forward it to the United
States Trade Representative.
Without objection, the draft implementing legislation will
be considered as read and opening for amendment at any time.
[The legislation follows:]
Chairman Sensenbrenner. And the Chair recognizes himself to
strike the last word.
The entire issue of trade agreements has been a matter of
great controversy in the Congress, and the Trade Promotion
Authority or fast-track legislation passed the House by one
vote last year, and the conference report was adopted by three
votes last year. And basically what it does is make non-
amendable trade agreements that have been negotiated and signed
by the President and thus subject to an up-or-down vote by the
Congress.
What the TPA law did do, however, is to require extensive
consultation by the U.S. Trade Representative to Congress and
congressional Committees relative to issues within each of the
congressional Committee's jurisdiction. The Ranking Member Mr.
Conyers and I, immediately following the enactment of the trade
promotion authority, sent a letter to Ambassador Zoellick, the
U.S. Trade Representative, asking for that consultation.
At the time TPA was enacted into law, a lot of the
negotiations in both of these trade agreements had been well
underway and tentative agreements had been reached between the
United States, on the one hand, and either Chile or Singapore,
on the other hand, including agreements pertaining to increased
immigration quotas and various types of immigration visas.
I expressed both in writing and verbally my concerns to Mr.
Zoellick on these areas as well as my hope that trade
agreements would not derogate U.S. antitrust law or U.S.
intellectual property protection law. And I can say that in
these latter two areas, the trade agreement reflects the
concerns that I have expressed to Mr. Zoellick, and they also
do not require any implementing legislation. So both the IP
protection issues as well as the antitrust and competition
issues are not before the Committee, and the agreement does not
derogate our national law in either of these respects.
However, with respect to the immigration provision, the
draft implementing legislation creates a new W non-immigrant
professional worker visa category for nationals of Chile and
Singapore. And what this does is that it increases the total
number of aliens who would be admitted into the United States
by 5,400 in the case of Singapore and 1,400 in the case of
Chile.
It is my concern that immigration policy really does not
belong in any trade promotion authority bill or any free trade
agreement. And as a result, there will be an amendment that
will be offered shortly that will basically not authorize the
new W non-immigrant professional worker visa category that is
contained in the draft implementing legislation and require
that the number of people who are eligible for these visas be
deducted from the national H-1B visa cap. Thus, the amendment
will create a new category of H-1B visas to effect the
temporary entry provisions in the free trade agreements without
increasing the total number of temporary entries that are
allowed into the United States.
I would also point out that the H-1B visa category requires
certain labor certifications as well as a $1,000 fee. So there
will be no distinction between how applicants from Singapore
and Chile will be treated versus applicants for this type of
visa category from other countries.
I think that this is a good amendment, but I am also
concerned that there not be future changes in the basic
immigration law contained in future trade agreements. Article
I, section 8 of the Constitution makes immigration and
naturalization law an exclusive enumerated power of the
Congress, and we intend to follow the Constitution and not to
delegate this authority to the executive branch of Government.
I intend to send a letter to Ambassador Zoellick, which I
will invite Mr. Conyers to co-sign with me, stating our strong
opposition to any type of changes in the immigration law in any
future free trade agreements that will be put in the Committee
report when we formally mark up the introduced legislation next
week, as well as any response that Ambassador Zoellick cares to
give to us. There will also be some rather strong report
language that says that changes in immigration law are off the
table as far as this Committee is concerned in future free
trade agreements.
With that, I will be happy to yield to the gentleman from
Michigan, Mr. Conyers, for whatever remarks he chooses to make.
Mr. Conyers. Thank you, Chairman Sensenbrenner.
I come to the markup this morning in extreme agreement with
you, as contrasted with 24 hours ago, for example. So here we
meet in amity and peace and accord. And so I have nothing to
add except the comment that the Judiciary portion is to me very
well crafted. The bigger problem is with trade agreements in
general. I am part of that group that they just go through by
one or two or three votes. I was one of those that was trying
to let it not get through.
The problem, the bigger problem is that with these trade
agreements increasingly--and this was true in the previous
Administration, maybe not to the same extent it looks like it's
going to develop now. But we are opening the gates to workers
coming in to whom the standard of living that we enjoy is so
different from theirs that it increases our unemployment. The
other problem is that we have companies taking jobs and
industry out at the same time--all of this under the rubric of
free trade. Isn't globalization wonderful. Well. And the only--
the small thing I would like to do with the immigration portion
that is before the Committee today is that we have a little
amendment on line 23 at page 3 that says you can't stay forever
in this country once you come in without the numbers being
counted against the cap of the country from which the immigrant
comes. Not unreasonable. I mean, otherwise, we're driving a
huge hole into the whole concept of immigration because here
you just come in and that's it, you stay. Frequently you become
a citizen or you become lost in the 275 million others.
And so I'm happy to join with our Chairman and all of us in
today's markup.
Chairman Sensenbrenner. The gentleman from Texas, Mr.
Smith.
Mr. Smith. Mr. Chairman, I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Smith. Mr. Chairman, thank you.
I do want to point out that in both of these two trade
agreements there are some good provisions, particularly those
that have strong intellectual property protections, and we
ought not overlook the fact that this is good for American
industry, good for American high-tech companies to have these
strong intellectual property protections in these two trade
agreements. And in regard to those intellectual property
protections, I think they do set a good precedent that we hope
to establish in future trade agreements as well.
Mr. Chairman, like you, I share your concerns about the
immigration provisions in both these trade agreements, and I
think that you have done as much as humanly possible to try to
correct the problems with the immigration provisions. We are no
longer going to have an indefinite category of a new visa. That
is being corrected by the amendment. Hopefully in the future we
will be able to send a message to the trade reps that we do not
want a trade negotiator or the Administration establishing
immigration policy, which is clearly the prerogative of the
U.S. Congress. And I am glad that we have bipartisan agreement
on that.
Also, Mr. Chairman, I just want to point out that I'm not
aware of any trade agreement in the last 12 years or so that
has had these type of immigration provisions in it. So I'm glad
that we can get back in the future to having trade agreements
without immigration provisions and leaving those
determinations, again, to be made by Congress.
Mr. Chairman, I just want to say I appreciate very much all
that you've done to negotiate with the--with Ambassador
Zoellick and others to try to work out, as I say, the best
compromise that I think is possible and that will establish a
good precedent in the future for not having others determine
what the immigration policy of the United States is.
I will yield back.
Chairman Sensenbrenner. The gentleman from California, Mr.
Berman.
Mr. Berman. Well, thank you, Mr. Chairman.
First, I want to echo the comments of our Ranking Member
and Mr. Smith in praising you for, I think, standing up both
for the jurisdiction of the Committee and for the powers of
Congress in this context. I agree very much with--every once in
a while, for reasons I'm never quite sure of, I find myself
agreeing with Mr. Smith, the former Chairman of the Immigration
Subcommittee, on these issues. And this is one of those times.
The fact is, although in all fairness we can't blame the
Trade Representative this time for initiating something new,
because I believe NAFTA and some of our other earlier
agreements also had some immigration provisions in them which
were not separately enacted by Congress but just stuck into the
implementing legislation. But, Mr. Chairman, I was wondering if
it would be possible, since this is a mockup and not a markup,
and since what we do here are simply in the form of
recommendations to the Trade Representative for the legislation
that they will be presenting next week, which will come up at
an up-or-down vote, to ask a representative of that office just
to clarify a few of the questions that have gone on in the
discussions so that there's no doubt that when they prepare
this legislation, we are all--we have a shared understanding of
what that implementing legislation will look like before it's
too late and it can no longer be amended.
So could I--only because this is not a regular----
Chairman Sensenbrenner. Can we find out for the record if a
USTR representative would like--since this is a mock markup--
ordinarily we do not allow witnesses at a markup. But would a
representative of the USTR mind answering questions of Members
of the Committee?
Mr. Berman. In the spirit of the compromise which you have
been----
Mr. Conyers. A few friendly questions.
[Pause.]
Mr. Berman. I don't know if ``mind'' should be the
standard.
Mr. Chairman, in the meantime, while they are making up
their mind----
Chairman Sensenbrenner. I see them nodding yes.
Mr. Berman. Oh, okay.
Chairman Sensenbrenner. Could whomever wants to answer the
questions sit at the witness table? Please identify yourselves
for the record and I'll swear you in.
Mr. Shigetomi. Mr. Chairman, my name is Kent Shigetomi----
Chairman Sensenbrenner. Could you press the mike button,
please.
Mr. Shigetomi. Mr. Chairman, my name is Kent Shigetomi. I'm
from the Office of the U.S. Trade Representative.
Chairman Sensenbrenner. Is there anybody else with the USTR
that will be testifying?
Mr. Posner. Mr. Chairman, my name is Ted Posner. I'm with
the Office of General Counsel at the Office of the U.S. Trade
Representative.
Chairman Sensenbrenner. Would both of you please stand and
raise your right hands?
[Witnesses sworn.]
Chairman Sensenbrenner. Let the record indicate that both
witnesses answered in the affirmative. Mr. Berman, you have
some questions.
Mr. Berman. Yes, Mr. Chairman. As I understand it, Mr. King
will be--I don't know if it's a manager's amendment or it's an
amendment by Mr. King, but there will be an amendment, a mock
amendment to this mocked-up bill being offered later. And my
questions pertain to some of the fundamental issues that that
amendment, I understand, will be trying to deal with.
As I understand it, the W visas that were proposed in the
proposed legislation will now become part of the H-1B--they'll
be H-1B visas. Am I--is that correct?
Mr. Posner. Congressman, I should preface my response by
saying I have not seen the text, but in concept, my
understanding is that is what is intended.
Mr. Berman. And does that mean that the fees that now apply
to the H-1B program will apply to each of these individual
visas as well?
Mr. Posner. That is my understanding.
Mr. Berman. Okay. And that the fees collected, those fees
will be allocated the way the H-1B visa's fees are now
allocated?
Mr. Posner. That is also my understanding.
Mr. Berman. Okay. Secondly, the H-1B program has provisions
with respect to replacing workers in a time of strike or
lockout. And the H-1B law requires petitioning employers to
attest that there is not a strike or lockout in the
occupational classification that the visa holder will fill.
Will that language now apply to these visas as well?
Mr. Posner. My understanding is that the employer, the
intended employer, will make an attestation including elements
substantively identical, including the item you just described,
the no strike or lockout attestation.
Mr. Berman. Say that one more time.
Mr. Posner. My understanding is that the substantive
elements of the attestation that the employer will make will be
the same as the H-1B attestation items, including the no strike
or lockout attestation.
Mr. Berman. Okay. Then on the issue of the renewals and
the--in effect, these visas--let's just--it's 5,000 for
Singapore?
Mr. Shigetomi. Five thousand four hundred for Singapore,
1,400 for Chile.
Mr. Berman. Five thousand one hundred----
Mr. Shigetomi. Five thousand four hundred----
Mr. Berman. Five thousand four hundred for Singapore,
5,100----
Mr. Shigetomi. One thousand four hundred for Chile.
Mr. Berman. And to the extent those visas are allotted in
any given year, they will come off the H-1B overall cap for
that year? They will come out of that cap?
Mr. Posner. That's my understanding.
Mr. Berman. Okay. And then the issue of the renewals, those
visas as to Singapore and Chile, unlike the H-1B visas, as I
understand the negotiated agreement, they are permitted an
infinite number of annual visa renewals. Is that--not infinite.
As long as the person and the--is it the employer who keeps
petitioning for the annual renewal, or is it the visa holder
who petitions for the renewal?
Mr. Shigetomi. Congressman, I should preface my remarks by
saying I haven't seen the actual text of the amendment.
Mr. Berman. Conceptually. We're talking----
Mr. Shigetomi. One difference I would point out is that
under the implementation of the entry for Singaporeans and
Chileans, there would be no petition. In fact, petitions are
not permitted under the terms of the--of both free trade
agreements.
Mr. Berman. There would be an attestation, but not a
petition.
Mr. Shigetomi. That's correct.
Mr. Berman. All right. But the granting of the visa would
come out of the H-1B cap?
Mr. Shigetomi. That's correct.
Mr. Berman. All right. Now the question of the renewal of
the visa. Somebody has to initiate that renewal. Who is it, the
employer or the employee?
Mr. Shigetomi. Well, there are certain elements that fall
to the responsibility of the alien and certain that fall to the
responsibility of the employer. Only the employer can make the
attestation, and it's my understanding that the attestation
would be--a new attestation would be required after 3 years.
Mr. Berman. That's under H-1B?
Mr. Shigetomi. And under the operation of this proposed
program.
Mr. Berman. But I understand that the agreement that was
negotiated allows an annual renewal----
Mr. Shigetomi. Oh, I'm sorry, sir. That was for the
attestation of compliance with U.S. labor laws.
Mr. Berman. I am not----
Mr. Shigetomi. For the period that the alien is in the
United States, there is nothing in the text of the agreement
that mandates a specific time. It was our understanding that
the program would operate in a manner similar to the NAFTA TN
professional system under which an alien is permitted an
initial stay of 1 year and then an extension granted in 1-year
increments thereafter.
Mr. Berman. I think the thing the Committee should be aware
of is that under the H-1B program you're entitled to 3 years--
--
Mr. Shigetomi. For an initial stay.
Mr. Berman. For an initial stay, and one renewal, for a
maximum of 6 years under the H-1B status. Here, you--the plan
is to have annual renewals with no limit for this non-immigrant
temporary visa program. It could be--it could be perpetual. Is
that right?
Mr. Shigetomi. Again, I should preface my remarks by saying
I haven't seen the text of the amendment, but any alien who
seeks entry under this category would still be required to
comply or meet--overcome the presumptions of an immigrant
intent that are established in another section of the
Immigration and Nationality Act. So all of the exclusions, the
rights, or privileges that apply to non-immigrants would also
apply to aliens.
Mr. Berman. My only point is, were this Committee to adopt
an amendment that said--it gets complicated. The way it works
under the H-1B program is you have an annual cap of a hundred--
what is it now?--190----
Mr. Shigetomi. Five thousand.
Mr. Berman. A hundred ninety-five thousand. The renewals
don't count against the cap. If there were a provision that
said renewals after 6 years for these sub-quotas inside the cap
for Singapore and Chile, if the renewals were to count against
the H-1B cap after 6 years, would that in any way violate the
provisions of this agreement? It would not?
Mr. Shigetomi. Congressman, that would create a problem.
Mr. Berman. Why?
Mr. Shigetomi. Under both agreements there is language--
I'll just read it to you. This is from the Singaporean text
under Appendix 11A.3: ``Beginning on the date of entry into
force of this agreement, the United States shall annually
approve as many as 5,400 initial applications of
businesspersons.'' And then in paragraph 2, subparagraph (a),
``The United States shall not take into account: (a), the
renewal of a period of temporary entry.''
Mr. Berman. I'm aware of that. But if the amendment were
simply to say that after 6 years the renewal of a period of
temporary entry would count--would count--6 consecutive years,
would count against the H-1B cap, that is not a prevention of
renewals. It doesn't violate the agreement. It simply says in
the seventh year it----
Mr. Shigetomi. It would count against----
Mr. Berman. It would count against the overall H-1B cap. It
wouldn't in any way violate the agreement. It would simply
limit the other visas that could be granted under H-1B.
Mr. Shigetomi. I think I understand your point now. So
you're saying that in the--after the 6-year period, in the
seventh year that extension would count against the H-1B cap
and not against the separate cap established.
Mr. Berman. That's right.
Mr. Shigetomi. I'm not an attorney, sir, but that would not
seem to be in conflict with the terms of the free trade
agreement.
Mr. Berman. All right. Then are we----
Chairman Sensenbrenner. The gentleman from Iowa would like
to offer an amendment now. Do you have an amendment at the
desk?
Ms. Jackson Lee. Excuse me. Are we allowed to have opening
remarks or what?
Chairman Sensenbrenner. Wait a minute.
Mr. King. Mr. Chairman, I have an amendment, an amendment
at the desk.
Chairman Sensenbrenner. The clerk will report the
amendment.
The Clerk. Amendment to the draft implementing legislation
for the United States-Chile Free Trade Agreement, offered by
Mr. King. Page 2----
Chairman Sensenbrenner. Without objection, the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. The gentleman from Iowa will be
recognized for 5 minutes to explain his amendment.
Mr. King. Thank you, Mr. Chairman, and ladies and gentlemen
of the Committee, much of this amendment has been discussed.
I'd like to preface my remarks on the amendment with a
philosophy on immigration, which is I believe the United States
of America needs to continue to develop an immigration policy
that's designed to enhance the economic, the social, and the
cultural well-being of the United States of America. That
should be our endeavor here in this Committee and in this
Congress, and, in fact, we have a constitutional authority and
a constitutional obligation to provide that policy to the
Administration rather than have the Administration provide the
policy to Congress for our ratification. And I am a strong
supporter of free trade and a strong supporter of trade
promotion authority, although I do not believe that it was the
intent of Congress to consider trade and immigration as part of
those negotiations, and that's the effort here in this
Committee, is to help the Administration have some guidance on
limitation of what you might be negotiating with free trade.
This amendment then before us today takes the new W
category for immigration that's been negotiated, particularly
this first amendment with the Chile agreement, and rolls that
new category of the W into a new subcategory under H-1B called
H-1B2. And it just simply limits the number under the cap, the
existing cap of 195,000 that's there for H-1B, and it will
statutorily roll back to 65,000 sometime later this fall.
So it is exactly as described by the Committee and
announced by the Chairman, and I'd point out also that the H-1B
program is one of the best programs that we have with--
immigration program because it is designed to go out and
identify highly skilled, highly talented people who can come
into this economy and make a positive contribution right away.
I believe it has some flaws in it that at some point we will
need to address in another bill on another issue down the road
a few months. But what's in front of us today is this amendment
that simply rolls the W category underneath the H-1B, sets up a
new subcategory of H-1B2, and that I think is the intent of
this Committee, and I'm asking----
Mr. Nadler. Would the gentleman yield for a question?
Mr. King.--for your support on this amendment. I will
yield.
Mr. Nadler. I really don't understand what you're trying to
do. How does that differ from what the Chairman outlined in the
Chairman's amendment?
Mr. King. I'm not aware there was a Chairman's amendment
before us, but it's consistent----
Mr. Nadler. Never mind. Thank you.
Mr. King. You're welcome.
That would conclude my remarks, and I'd yield back.
Mr. Conyers. Mr. Chairman?
Chairman Sensenbrenner. I am going to recognize myself for
5 minutes at this point.
I support the King amendment, and I think the important
thing to note in the King amendment is that the new visas that
have been negotiated as a part of both the Singapore and the
Chile Free Trade Agreement will not result in an increase in
the total number of visas that will be allowed on a worldwide
basis, meaning that the 5,400 for Singapore and the 1,400 for
Chile will come under the existing H-1B cap, be subject to the
same fee, which is $1,000 for applications, and will also be
subject to the labor attestation provisions and the anti-strike
and lockout provisions that are contained in H-1B.
So what this amendment does is decouple immigration policy
from free trade policy. I don't think it ever should have been
merged. It was merged in the past. I think that we're
decoupling this in the future. And I intend to support this
amendment.
I also intend to support an amendment that will shortly be
offered by Mr. Conyers to make sure that renewals go against
the worldwide cap on H-1B visa, and according to the testimony
of the USTR representative, the Conyers amendment will not
conflict with either the Chile or the Singapore Free Trade
Agreement.
With that, I yield back the balance of my time, and for
what purpose does the gentleman from Michigan seek recognition?
Mr. Conyers. Mr. Chairman, I have that amendment.
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Conyers. It's the Conyers-Berman amendment now.
Mr. Goodlatte. Point of order, Mr. Chairman. Is that an
amendment to this amendment?
Chairman Sensenbrenner. Yes, it is.
The Clerk. Mr. Chairman, I don't have a copy.
Chairman Sensenbrenner. Would the----
The Clerk. Amendment to the draft implementing legislation
for the United States-Chile----
Mr. Conyers. No, that's not the right one.
The Clerk. Amendment to draft implementing legislation for
the United States-Chile Free Trade Agreement, offered by Mr.
Conyers. Page 3, line 23, strike the quotation----
Chairman Sensenbrenner. Without objection, the amendment is
considered as read.
[The amendment follows:]
Chairman Sensenbrenner. And the gentleman from Michigan is
recognized for 5 minutes.
Mr. Conyers. Thank you. Mr. Chairman and Members of the
Committee, after talking this over with the Chairman, Howard
Berman, and Perry Applebaum, what are we trying to do with the
amendment to the amendment, the King amendment, which I
support? Well, it's because we've supported in the past H-1B
extensions and renewals, but we always know at the end of the
day that the stay of the aliens would be temporary and would be
subject to a cap. That protection is not contained in the bill
as it's currently written, and so all we do is make that
important. And all of you who are concerned about the labor,
domestic labor aspects, this would be very important.
It's a kind of a loophole in the bill that we're correcting
because, as currently written, individuals could come into and
remain indefinitely and not count against any subsequent
overall annual cap once they're given entry. So we fixed the
problem by providing that any extensions beyond 6 years count
against the H-1B cap in that year. And we think that's very
fair, and I would yield to the gentleman from California.
Mr. Berman. I thank the gentleman for yielding, and I think
he just expressed it exactly the way it is. This is consistent
with the whole premise of the H-1B program, which is to have an
annual cap that allows people to stay here for 6 years, and by
this amendment it will be consistent with it and won't violate
the underlying agreement reached between the two countries, or
the three countries in this case. I support it.
Mr. Watt. Mr. Chairman, might I make a parliamentary
inquiry?
Chairman Sensenbrenner. State your inquiry.
Mr. Watt. I'm a little confused about what it is we're
marking up. Are we marking up the King amendment as the
underlying bill, the thing that was given out yesterday? Is Mr.
Conyers' an amendment to King's?
Chairman Sensenbrenner. Okay. The answer to the gentleman's
parliamentary inquiry is the base bill is the draft
implementing legislation, which was given to the Members
yesterday. That.
Mr. Watt. All right.
Chairman Sensenbrenner. Mr. King has an amendment to the
draft implementing legislation. Mr. Conyers' amendment is an
amendment to the King amendment.
Mr. Watt. All right. May I make a further--I think I
understand substantively what we're doing. I just----
Chairman Sensenbrenner. The questions will be put as
follows: the adoption of the Conyers amendment to the King
amendment, the adoption of the King amendment, presumably as
amended, then the draft implementing legislation. The
immigration provisions of it are open to further amendment, and
then we would make a recommendation to the USTR to make these
changes in his draft implementing legislation. And then we will
be back here next week to deal with the actual formal markup.
Mr. Watt. Thank you, Mr. Chairman.
Chairman Sensenbrenner. Okay. The question----
Mr. Goodlatte. Mr. Chairman?
Chairman Sensenbrenner. For what--the gentleman from
Virginia, Mr. Goodlatte.
Mr. Goodlatte. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Goodlatte. Thank you, Mr. Chairman.
I first want to comment you for making the best of a very
difficult situation, and I want to thank the them from
Michigan, the gentleman from Iowa, and others who've worked in
a bipartisan way to try to resolve this problem.
The real problem here is not what I consider to be bad
immigration policy. It is bad immigration policy. The real
problem here is--as the gentleman from California has noted,
this is a mock markup, and what we're trying to do is to avoid
making a mockery of the jurisdiction of the United States
Congress that we've inherited.
And I also want to make it very clear to our friends from
the U.S. Trade Representative's office that I know that this is
something that's been going on for a long time, and I don't
hold them, those here today, personally accountable for this.
But I hope they can see from what we've been put through in the
last few days and the Chairman's been put through for the last
few months that this is a major, major insult to the United
States Congress. That is exactly what we're confronting here.
This has no business being in trade agreements of the past,
certainly not in this one, and quite frankly, all we're able to
do today is try to patch together a bad situation and then send
it down to the Trade Representative, hope that's the
understanding that he reached with the Chairman, and that it'll
come back in that form when we get it back from the USTR next
week.
So we'll have to see what we get from them and reserve
judgment on that before we make any final decision on how to
proceed. And all of that's a shame because these are good free
trade agreements. As the gentleman from Texas noted, there are
good provisions in here promoting trade in a whole host of
areas between countries in which we have a great deal of
interest in increasing exports and allowing our American
consumers to have choice of new goods from these countries.
But to add this to the process is very, very problematic,
and I----
Mr. Berman. Would the gentleman yield?
Mr. Goodlatte. I will yield in just a minute. I would hope
that the Chairman's assurance that his discussions with the
U.S. Trade Representative will lead to this not occurring again
in the future, will be very strongly and carefully heeded. And
I would like to ask the USTR representatives what their
understanding is of future trade negotiations that the USTR may
be presently involved in or intending to be involved in in the
future with regard to changing U.S. immigration policy.
Mr. Shigetomi. Congressman Goodlatte, my experiences here
for the last 2 days have made it perfectly clear what the views
of this Committee are in this particular aspect of trade
negotiation.
Mr. Goodlatte. You don't need to tell me what the views of
the Committee are. I want to know what the views of the U.S.
Trade Representative are on this issue.
Mr. Shigetomi. Congressman, I am not in a position to
address the views of my agency with regard to the other trade
negotiations that we're undertaking.
Mr. Goodlatte. Well, I would hope that you would convey to
the Representative that before I cast my vote on these
agreements, which I've already stated have much merit--as the
Chairman of the Agriculture Committee, I've looked at the
provisions related to agricultural trade, and while there is
not unanimity of support for them, there's a great deal of
comfort in the United States on these being well negotiated in
that regard. But prior to that, I hope to receive that
assurance from the U.S. Trade Representative that we're not
going to see this in future trade agreements.
Mr. Nadler. Would the gentleman yield?
Mr. Goodlatte. I would be happy to yield to the gentleman
from New York.
Mr. Nadler. Thank you. I just wanted to say that I would
hope the U.S. Trade Representative would take from this little
colloquy the fact that if there are such provisions in this
trade agreement when it finally comes down to us or in future
trade agreements, you run a real risk of not having the trade
agreement agreed to because an immigration provision is a
real--and after this Committee has made its opinion clear, a
studied and deliberate insult to the Congress, which many
people who might support those trade agreements on the merits
would not stand for.
I'll yield back.
Mr. Berman. Would the gentleman yield?
Mr. Goodlatte. The gentleman from California----
Mr. Berman. I ask unanimous consent for the gentleman to
have one additional minute.
Chairman Sensenbrenner. Without objection.
Mr. Berman. Thank you. I thank the gentleman for yielding.
Let's just clarify one point. First, just as a preface, it is
not this Trade Representative who started the insults.
Mr. Goodlatte. I--reclaiming my time, I fully agree with
that and thought I had indicated that.
Mr. Berman. Oh, okay. But what I would--to look at this as
half-full rather than half-empty, this is the first time this
Committee has pushed back. And as I understand it--and let's
just clarify that. As to these two agreements, my understanding
is that it is subject to technical corrections and those kinds
of things that frequently come up after an amendment's adopted.
It is my understanding that it is the intention of the Trade
Representative in proposing the implementing legislation which
we will be seeing next year to reflect the--next week, I mean,
the agreements that you have already discussed and that are
reflected in the King amendment, now amended, soon to be
hopefully amended by the Conyers amendment.
Mr. Conyers. Mr. Chairman, could the gentleman from
Virginia get 30 seconds additional?
Chairman Sensenbrenner. Without objection.
Mr. Conyers. I'd like to scare these two guys a little bit
more during that time. [Laughter.]
Mr. Conyers. They're such fine fellows. Obviously some of
these questions may be slightly below their pay grade. But
here's the problem, men, is that these are relatively small
trade agreements, Chile and so forth. But we know that around
the corner entire continents may be involved in massive
situations like the one before us. And this would have
incredible implications in terms of our immigration law, and
that's the point.
So, so nice of you being here.
Mr. Watt. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from California wants
a direct answer to the question that he asked, which we'll put
on the record.
Mr. Posner. Right. Thank you, Mr. Chairman. With respect to
recommendations by the Committee that the USTR can agree to,
there are certain provisions, including the provisions of the
King amendment, that were discussed among staff of the
Committee and staff of USTR, which it is my understanding we
are prepared to agree to. The provisions of the Conyers
amendment to the King amendment is not one that we have
discussed, and so I'm not prepared at this time to say one way
or the other whether the agency would be prepared to accept it.
Mr. Conyers. Bring out the leg irons, then. That's it.
[Laughter.]
Mr. Goodlatte. Would the gentleman yield?
Mr. Berman. Well, it's your time, but I'd just like--but
as--I'd just like the record to show that as to the--what we
have described as the Conyers amendment--you'll be able to
analyze it--I think we've had a statement from the office, from
your office, that that does not violate the underlying
agreements, that its impact is on the overall H-1B quota, cap
in the seventh year.
Mr. Posner. If I could just make one point of clarification
on that. It is correct to the extent that it doesn't draw down
the agreement-specific cap, it is not a violation of the
agreement. If you had a particular factual situation in a given
year where you were not able to renew a Singaporean or a
Chilean citizen's stay under this W category because the H-1B
cap had already been exhausted, in that particular--in that
particular factual scenario, I can't say definitively that we
would not in that case be violating the agreement.
What I'm saying--what we intended to say previously is that
nothing about the amendment appears to us per se to violate
provision of the agreement to the extent that you're not
drawing down the 5,400 or 1,400 cap. So if I could just have
that clarification on the record.
Ms. Lofgren. Mr. Chairman?
Chairman Sensenbrenner. I believe the time of the gentleman
from Virginia has expired.
Ms. Lofgren. Mr. Chairman?
Chairman Sensenbrenner. The gentlewoman from California,
Ms. Lofgren.
Ms. Lofgren. Thank you, Mr. Chairman.
First, I would like unanimous consent to make a part of the
record several letters that were exchanged between Congressman
Boucher and myself and the USTR relative to the IT provisions.
It's not before us today, but I'd just like to make that----
Chairman Sensenbrenner. If the gentlewoman from California
would yield, this is a mock markup.
Ms. Lofgren. I understand.
Chairman Sensenbrenner. We will not be filing a Committee
report following this markup. This is kind of advice to the
USTR on what to put in the bill that we'll be marking up next
week.
Ms. Lofgren. So I'll save these for next week.
Chairman Sensenbrenner. And I think the proper time--you
know, if you want this to be preserved and read forever and
ever----
Ms. Lofgren. That's my goal.
Chairman Sensenbrenner.--is to ask UC next week, and I have
no objection to doing that.
Ms. Lofgren. I will do that, then.
On the issue before us----
Mr. Berman. Would the gentlelady just yield on this first
point first?
Ms. Lofgren. Yes.
Mr. Berman. Would it then be appropriate to say that we
want to--some of us on the Committee want to congratulate the
Representative for the intellectual property provisions? Is
this the appropriate time?
Ms. Lofgren. No. That will be next week.
Mr. Berman. Next week I will----
Ms. Lofgren. Reclaiming my time, I want to talk about--I
voted against the fast-track bill last year because I was
afraid that this would happen, and I was right. You know, the
Ways and Means Committee doesn't know anything about matters
within our jurisdiction. And I was focusing on antitrust, but
the--I'll just say that the drafting of these immigration
provisions is defective in my judgment. They're poorly drafted.
They're not well thought out. And because the numbers are
small, it's not going to prevent us from passing these
agreements. But if this a template for the future, you're not
going to have any trade agreements, because we know that there
are many--there are many in the labor community who oppose
these free trade agreements. There are many people who are very
concerned about immigration. You're not going to have any free
trade agreements if you don't stop doing this. And I think it's
important that you understand that.
What I object--and I've spent a lot of time on immigration.
I used to teach immigration law. I've been on the Immigration
Subcommittee for many years. What we're going to end up doing
is skewing a program that is supposed to bring the brightest
people in the world to the United States to help our country.
And what we've said is now, you know, 10,000 of those people
must come from two little countries. Well, maybe we don't have
Ph.D.s in astrophysics from Chile and Singapore. So you're
really messing up a program that should charge the economy.
If we do this down the road with whole continents, you're
going to seriously disrupt the technology economy of the United
States, and I think that's a big problem.
So I would just hope that we--out of this public session we
can have a sit-down with people who work on this stuff with the
USTR and make sure that you don't continue to cause problems
for our country by faulty and defective drafting of these
agreements.
I understand that we will have a proposal--it's an up-and-
down vote on the trade agreement, but I think you're in very--
you may lose this even with these amendments that are being
proposed. And I think, you know, this isn't the first time.
When I went to do some reforms on the H-1B program, I found
out--I mean, I was stunned--that the WTO got there first and
that we were constrained on what we could do in reforming the
H-1B program. There are still some things that I think we need
to do on the H-1B program that I wanted to do when we last
touched the agreement in terms of protections for employees and
the like.
I think that the--what you've done on this agreement, I'm
sure with the best intentions in the world, has even caused
problems in that arena.
So I would just like to counsel the USTR, number one, not
to be negotiating matters that are really within the purview of
this Committee, and certainly not to do so without a full
communication, not just with the Chairman and Ranking Member,
but with the Members of the Committee who in many cases have
spent several decades working on these issues and actually know
quite a bit about--I don't want to just say myself, but Mr.
Berman and Ms. Jackson Lee and others on the other side of the
aisle who actually know something about this more than you do,
because you've made a mess of this, I must say.
And I yield back my time.
Chairman Sensenbrenner. The gentleman from Indiana, Mr.
Hostettler.
Mr. Hostettler. Mr. Chairman, I ask to strike the last
word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Hostettler. Mr. Chairman, I want to commend Mr. Conyers
and Mr. King for their amendments, and I support them. And I
want to also commend the representatives here today from the
U.S. Trade Representative and your willingness to help us in
this process. It's very encouraging that--you did not have to
testify. You did not have to answer our questions on the
record. But you chose to, and that's very helpful and we want
to thank you for that.
Mr. Chairman, I want to commend you and the gentleman from
Virginia and the gentleman from Texas as well as the gentleman
from Iowa and the gentleman from Michigan for jealously
guarding the prerogatives not only of this Committee but of
this Congress in our constitutional obligations. You are in a
sense, this Committee is in a sense today attempting to put the
genie back in the bottle, because, as has been pointed out
several times today, this U.S. Trade Representative was simply
working from a template of previously agreed-to agreements, not
only between the United States and other countries but of this
United States Congress. And so I don't hold these folks at any
fault because they did it before, we did it before--I guess I
should say that Congress did it before, and so they were simply
working on that assumption that it would be okay to continue
this.
But just as this Committee is jealously guarding our
constitutional prerogatives with regard to article I, section
8, when it says, ``Congress shall have power to establish a
uniform rule of naturalization,'' I would hope that at some
time in the future that the entire Congress would once again
re-establish our primacy when it comes to trade agreements in
general, because in the same Constitution, in the same section
of that Constitution, article I, section 8, it says that
``Congress shall have power to regulate commerce with foreign
nations.''
We are delegating that power to the executive branch with
every single trade agreement that we do. Every time we pass
what has previously been referred to as fast-track, now as
trade promotion authority, we are essentially ceding them the
legislative authority to fashion law for this country, and then
they are granting us the law that we pass--I should say trade
promotion authority grants us essentially a veto authority,
turning the constitutional prerogatives and obligations on
their head. They fashioned the law. They fashioned the policy.
And all we get to do, because, as we said earlier, this is a
mockup and not a markup, we basically get an up-or-down vote in
the House of Representatives. So we can either veto the bill or
we can--we can essentially put the bill into law, even though
the President has to sign our piece of legislation afterwards.
And so I would hope that in our discussion today that we go
from this point and as a Committee we maybe make the case to
the rest of the Congress that we are trying to do our part with
regard to immigration law, antitrust law, intellectual property
law, and that maybe the rest of the Congress should do our job
into making the case that maybe Congress is capable of
regulating commerce with foreign nations since the Framers of
the Congress--Framers of the Constitution gave us that
obligation over 200 years ago.
And I yield back the balance of my time.
Ms. Jackson Lee. Mr. Chairman?
Chairman Sensenbrenner. The gentlewoman from Texas, Ms.
Jackson Lee.
Ms. Jackson Lee. Mr. Chairman, thank you very much. I want
to add my appreciation to the Chairman and the Ranking Member
for demanding jurisdiction on this question or oversight over
this trade deal that has become a legislative initiative. And
I'd like to emphasize that the agreements that we are looking
at are simply that. They are deals. And when you're in
negotiations, two nations are dealing--dealing on matters of
who can benefit the most or, as they say, it's a lot of horse
trading. And I think it's very difficult to horse trade on a
very technical area of the law and area of responsibility of
the Congress such as immigration.
And I want to cite to you gentlemen--and I assume that
there is a record--that one of the difficulties we have or that
I have with this process and with the fact that immigration
policies are included in a trade deal is that we have throngs
of individuals who are in line to access legalization, who are
proceeding through a process to achieve legal status and
permanent status. These are temporary statuses. And they're
waiting years and years because of backlog to be able to enter
into this country or to be able to achieve either legal
permanent resident status or citizenship.
And then we have an additional burden that I believe this
Committee and this Congress has abdicated its responsibility,
and that is, of course, to deal with the throngs of others who
are in this country that may have entered illegally, but many
of us know are working, paying taxes, and we should develop
policies to allow them to earn access to legalization. That is
certainly an issue beyond the jurisdiction--not the
jurisdiction but the discussion today.
But I raise it only because I'm concerned about this
temporary status that goes on and on and on, and as I recall--
and I'd appreciate it if the witnesses could listen while I'm
speaking. I listened to the inquiry being made by Congressman
Berman, and I'm not clear on the answer. It goes to the
amendment that is before us, and that is the temporary annual
renewal of the visas that would be allowed. I think you said
5,000 from Singapore and 1,400 from Chile. And my question is:
Are we still at that point where they are annually renewed,
even with this amendment? I didn't understand. This means that
these are 1-year visas, if I understand them, and they're
temporary, but they are renewed every year and there's no--
there's no ending time. Is that correct?
Mr. Shigetomi. Congresswoman, my understanding is that each
extension would be granted in 1-year increments.
Ms. Jackson Lee. Right.
Mr. Shigetomi. By virtue of its inclusion as a--by virtue
of its classification as a non-immigrant, these aliens would be
subject to the same grounds of exclusions, rights,
responsibilities, and privileges as all other classes of non-
immigrants. As a result, they are held to the same standard as
any other non-immigrant.
Ms. Jackson Lee. And I appreciate that you are not well
versed in immigration law, and I appreciate your attempting to
answer the question. What I am suggesting is, are you--I
understand criteria and standards, but am I to understand that
the provision suggests that you can renew and renew and renew
and renew, as long as you meet the standards, but it could be
12 years and you could still be here on that visa? Is that my
understanding?
Mr. Shigetomi. That's theoretically possible, yes.
Ms. Jackson Lee. Then what I would say to my colleagues, I
find that totally unacceptable. And because I juxtapose it
against our responsibilities with respect to immigration
policies, immigration--or applicants for immigration status,
and also the H-1Bs, as I understand the present structure, is
you have a 3-year and then you have a renewal. And as my
colleague said from California, those were based upon a certain
expertise that you brought.
I am making no speculation of the expertise in Chile or
Singapore. I am sure there are an enormous number of
individuals who qualify for H-1B, but they're not coming in
under H-1B.
So I would simply say that I have a--I take great umbrage
with the process. I, too, celebrate my vote in opposition to
the free trade act, the speed trade act, because I believe it's
very important that these issues not be unaddressed.
I would also ask you to take back a message that they have
made a large mistake in adding this to the trade legislation.
I'd ask for an additional 1 minute.
Chairman Sensenbrenner. Without objection.
Ms. Jackson Lee. And I believe that we can move further, if
you will, with the understanding that there is great difficulty
in this process. When we hear--when Members hear that you have
a perpetual 1-year renewal, regardless of whether or not they
meet criteria, it certainly begs the question of the
difficulties we have. I'll do that in just a second.
I would like to also suggest to my colleagues that I will
have an amendment that I hope to gain support, even though one
suggests that it might be in, and that is the distribution of
the user fees. I think it'll be very helpful to give
instruction on the user fees that may be offered in terms of
the immigration process. I hope to offer it in a moment. I'd be
happy to yield to the distinguished gentlelady.
Ms. Lofgren. If I--and I thank the gentlelady for yielding.
I just think it's a huge mistake to have a temporary visa that
theoretically could go on for 25 years. I mean--or 50 years.
You know, we have a temporary visa program. It serves a
purpose. But it's limited. And if somebody's going to come here
and live for 20 years, they should meet the labor certification
standard, they should apply just like any other immigrant. This
is a huge problem. It's fraught with abuse. The potential for
abuse of individuals is huge. And I just think it's a huge
mistake. And if you bring this to the floor without changing
that, I mean, I think you risk having this thing come down.
Chairman Sensenbrenner. The time of the gentlewoman has
expired.
Mr. Coble. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from North Carolina,
Mr. Coble.
Mr. Coble. Mr. Chairman, move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Coble. Mr. Chairman, I realize that the King and the
Conyers amendment are before us, but you've been very generous
procedurally. I'd like to make a general comment or two.
First of all, I want to associate with the remarks made by
Mr. Berman and Mr. Smith regarding the intellectual property
feature. I'm pleased that that received a good amount of
attention in this bill.
When the appropriate time comes, Mr. Chairman, to send this
bill to the floor, I will vote to send it to the floor because
I think it deserves full floor attention.
I am concerned, however, that most of these--well, strike
that. Many of these--some of these trade amendments initiated
by Democrat administrations as well as Republican
administrations strongly emphasize free trade, but fair trade
oftentimes is conspicuously missing. And I hope that's not the
case with this bill. I'll dig into that more in more detail.
But when fairness is omitted in the scenario, it oftentimes
works to the detriment of U.S. manufacturers. I'm talking
textiles, furniture, et cetera.
But I repeat, Mr. Chairman, when the appropriate day comes
to send it to the floor, I will vote to send it to the floor. I
don't know how I'll do at that point, but it's good to have you
all----
Ms. Jackson Lee. Would the gentleman yield?
Mr. Coble. I will yield.
Ms. Jackson Lee. I thank the gentleman very much. You were
mentioning intellectual property, but I wanted to finish on a
point that somewhat ties to the comment of intellectual
property, just to explain why I have such difficulty in this
perpetual visa, Mr. Coble, is that we're having difficulty in
even getting research scientists for some of our institutions
of higher learning and research institutions to be able to get
visas to come into the country post-9/11.
We're also having difficulty, coming from Texas--and I know
others who have medical centers such as the Texas Medical
Center--where patients who are attempting to come in for unique
and particular services at our medical facilities, who
typically have been able, or previously to 9/11 been able to
achieve visas are not able to get them, some to the extent
where we're hearing indications that patients have died waiting
for a visa to come into this country for legitimate medical
treatment.
Mr. Coble. Ms. Jackson Lee, if you would suspend, I need to
make another point.
Ms. Jackson Lee. I'd be happy to suspend.
Mr. Coble. If you want to wrap up quickly.
Ms. Jackson Lee. All right. I would beg you to take this
message back that what you do when you put a perpetual visa
alongside of individuals who have decided needs and then
Americans who have decided needs for them to be here, it makes
it a very difficult mountain to climb. And I think these
provisions should not be in there, and I think there should be
some modification.
I yield back to the gentleman.
Mr. Coble. Let me reclaim my time. I just want to reiterate
what's already been suggested from both sides of the aisle.
This is a bad precedent to lump--and I'm not blaming you
gentlemen--to lump immigration matters into a trade bill. And I
hope that can be avoided subsequently.
And I yield back, Mr. Chairman.
Chairman Sensenbrenner. The question--or the gentleman from
California has a modification he wishes to propose to the
Conyers amendment.
Mr. Berman. Thank you, Mr. Chairman. I guess I'd ask
unanimous consent that the--that on line 4 of the Conyers
amendment, the number 6 be replaced by the following: 5 or
more.
Chairman Sensenbrenner. Without objection, the modification
is agreed to. The question is----
Mr. Watt. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from North Carolina,
Mr. Watt.
Mr. Watt. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Watt. I will try not to take the 5 minutes because it's
quite obvious the Chairman doesn't want to hear me since he
passed on me several times trying to get recognition. But I
wanted to make a couple of comments.
Number one, to seize the historic opportunity to be on the
same side of an issue with Mr. Hostettler, which doesn't happen
very often.
Number two, to say that I generally agree with most of the
comments that have been made about the substance of what's
being done here.
But, number three, to--and I'm the last person that ought
to be trying to defend the U.S. Trade Representative's office--
to make it clear that this is a logical result when you support
fast-track legislation.
I mean, I--you know, it's like these people have done
something outrageous. This is like what you get when you pass a
law and you leave the details to be written by the regulators.
This is what you get when you pass fast-track, and then they
take the authority that they've been given under fast-track and
come back to you, and then you say, well, I'm praising you for
what I agree with, which is the intellectual property part of
it, because I consider that trade, yet I'm absolutely
condemning you for the other parts of it that I don't agree
with.
There is no way you're going to be able to get off of that
slippery slope. And so the problem from my opinion all along
with Democratic administrations and Republican administrations
is that this is our authority as a Congress. And we shouldn't
be delegating it under fast-track to the Administration. And if
we do delegate it, then I think you're going to get exactly the
same result in the future that you got this time. I mean, this
is just--these people are just doing the job you told them to
do. They're going and negotiating an agreement, and I'm even
surprised that we're back here a week early to even get
consultation on it as opposed to being here next week with the
agreement already done and saying either vote it up or down,
which has been historically the precedent that's been followed.
So this righteous indignation that we're expressing up here
is a little misplaced, in my opinion. Although I agree with the
content of the righteous indignation, I just take issue with
our right to be righteously indignant in this circumstance.
Mr. Berman. Would the gentleman yield?
Mr. Watt. I'd be happy to yield.
Mr. Berman. One could be righteously indignant about
delegating our jurisdiction and not care too much about
delegating the Ways and Means jurisdiction.
Mr. Watt. Yes, and that's exactly what I'm saying, is once
you get--there's somewhere along the spectrum, and you are on a
very slippery slope, and I don't think you can say to the Trade
Representative, okay, you've got to do only what's in the--
because, I mean, we don't even know what's in that Committee's
jurisdiction over--versus our Committee's jurisdiction versus
Commerce Committee's jurisdiction. We've been arguing about
that for years and years and can't even resolve it among
ourselves. How are we going to expect the Administration to
resolve it?
Ms. Lofgren. Would the gentleman yield?
Mr. Watt. And I'm not--I mean, this is not about the
substance of this conversation. It's about me watching this on
television, which the Chairman wants me to do rather than
participate in it, and just giving you my observations as a
casual observed.
I'll yield to the gentlelady.
Ms. Lofgren. Thank you, and----
Chairman Sensenbrenner. Without objection, the gentleman
from North Carolina will be given 5 additional minutes.
Mr. Watt. I don't care for 5 additional minutes.
Ms. Lofgren. I do.
Mr. Watt. I'll take 1 additional minute, and I'll yield it
to Ms. Lofgren.
Ms. Lofgren. I would just like to say, you know, the idea
of fast-track is not antithetical to me. I mean, I do
understand that the Trade Representative needs to be able to
make a deal and that you can't then come to Congress and have
435 people micromanage every line.
I mean, the problem I have with what's happened here is
that the Ways and Means Committee was supposed to be consulted.
I don't know if they were. I presume and hope that they were
under the fast-track. But there was no consultation with me
about the issues under the jurisdiction of this Committee. And
I don't know what communication occurred with the senior
Members of the Committee, but I will say the result is inept.
And it reflects the fact that there was no consultation with
people who knew something about this, and that's the problem.
And I think if we move forward with these deals, you guys
better deal with the people who are in charge of these
substantive law areas, or you're not going to have any deals.
Mr. Watt. Reclaiming my time long enough to say that I
definitely agree with the gentlelady from California that this
is inept. But I've also agreed that most of the other parts of
the agreements that you've come back with in the other
Committees' jurisdiction have been inept, too.
So we can't do this on the basis of what we consider inept.
We gave these people this authority, and they've taken it, and
now I'm----
Ms. Jackson Lee. Would the gentleman yield?
Mr. Watt. I don't want any more time because I don't want
to offend the Chairman. I'm going to yield back.
Mr. Chabot. Mr. Chairman?
Chairman Sensenbrenner. The gentleman from North Carolina
never offends the Chairman.
Let me say that we've got this one to do, which is the
Chile one. We've also got the Singapore one to do. And I would
encourage the Members to be succinct in their comments on this
and not repetitious.
The gentleman from Ohio.
Mr. Chabot. Thank you, Mr. Chairman. I'll be very brief and
won't take up the 5 minutes. But there's been a--I think this
has been a beneficial and instructive and helpful discussion
here this morning. There have been a number of shots taken at
fast-track or trade promotion authority or whatever one wants
to call it, and I think it's important to again at least point
out that the reason that I think the majority--it was only by
one--in the Congress voted for this legislation is because many
of us believe that it's--these agreements will be mutually
beneficial to both the United States and some other country or
group of countries that will ultimately create more jobs in
this country, will improve the standard of living in this
country, will enable the American public to buy more affordable
products, that other countries' standard of living will
increase as well as they're able to have jobs and those folks
then will buy products from our country, and that creates jobs
here.
And so I think the Congress was appropriate--or taking
appropriate action in passing that, but I think this has been a
very good discussion this morning. I thank the gentlemen here
for their candor, and I yield back the balance of my time.
Ms. Jackson Lee. Mr. Chabot, would you yield for a moment?
Mr. Chabot. I'm going to yield back my time because the
Chairman wants to get this----
Chairman Sensenbrenner. The question is on agreeing to the
Conyers-Berman amendment as modified to the King amendment.
Those in favor will say aye? Opposed, no?
The ayes appear to have it. The ayes have it, and the
Conyers-Berman amendment is modified as agreed to.
The question now is on the King amendment as amended by the
Conyers-Berman amendment. Those in favor say aye? Opposed, no?
The ayes appear to have it. The ayes have it, and the
amendment as amended is agreed to.
Are there further amendments to the draft implementing
legislation?
Ms. Jackson Lee. Mr. Chairman?
Chairman Sensenbrenner. The gentlewoman from Texas.
Ms. Jackson Lee. Thank you. I have an amendment that I
would like to pursue with the Trade Representative this coming
week as we move toward the formal markup. I will not--I'd like
to bring it up at this point to describe it, Mr. Chairman. I'm
going to ask to withdraw it if you can----
Chairman Sensenbrenner. The clerk will report the
amendment.
Mr. Goodlatte. Mr. Chairman, I reserve a point of order.
Chairman Sensenbrenner. A point of order is reserved. The
clerk will report the amendment.
The Clerk. Amendment to draft implementing legislation,
offered by Ms. Jackson Lee of Texas. Add at the end the
following----
Ms. Jackson Lee. I ask that the amendment be considered as
read.
Chairman Sensenbrenner. Without objection, so ordered.
[The amendment follows:]
Chairman Sensenbrenner. And the gentlewoman from Texas is
recognized for 5 minutes.
Ms. Jackson Lee. Since I do not understand fully the King
amendment, I am going to at this time withdraw this amendment
so that I can understand the revenue stream that the King
amendment and the Conyers amendment have actually now produced.
Chairman Sensenbrenner. Will the gentlewoman yield?
Ms. Jackson Lee. I'd be happy to yield.
Chairman Sensenbrenner. The issue of what happens to the
fees that are generated for H-1B applications is not a part of
the free trade agreement, and I assume that the gentleman from
Virginia will insist on his point of order and that the Chair
will say that he's prepared to sustain----
Ms. Jackson Lee. I have already indicated--if I could
reclaim my time----
Chairman Sensenbrenner. However--however, the Chair is
intending to deal with the entire issue of the H-1B visa cap
and the H-1B visa law after we return from the August recess,
and the proper time to deal with the allocation of fees would
be at that time.
Ms. Jackson Lee. Excuse me. Let me just say, Mr. Chairman,
that I would be happy to work with this Committee on that
issue, and I hope that any review of the H-1B fees because of
all of our interest will be an inclusive process. But I still
desire--as I said, I was going to withdraw this amendment
because I wanted to make the point that I do think it is
important to utilize some of the resources to help in the
backlog as this is indicated for some of the consular offices,
and then also to help with the processing of these particularly
expansive visas.
But I hope that we can have an opportunity to discuss this,
and I hope that this coming week I'd like to discuss it with
you as--I'm talking about the gentlemen here, your office or
representative thereof, so I can understand the implications of
the King and Conyers amendment as to whether or not they impact
that.
I'd be happy to yield to the gentlelady from California.
Ms. Lofgren. I realize we're speaking on the point of
order. The fees do expire this fall, and I am just hopeful that
as we move forward--I was--that the Chairman will consider--
many of us have discussing the GAO report that basically
describes the training programs in less than glorious terms,
and that we might pursue the math and scholarship program that
was discussed in 1998 that would actually yield a greater level
of Ph.D. among Americans. And I----
Chairman Sensenbrenner. If the gentlewoman----
Ms. Jackson Lee. Reclaiming my time----
Chairman Sensenbrenner.--from Texas would yield again,
that's, you know, one of the things that we have to do when we
deal with the H-1B visa program. I certainly think that the
fees have not been spent in as proper a manner as they could
be. I certainly would not want to take money away from training
American students to do these high-tech jobs in order to hire
more consular officials overseas. I think that we would like to
get Americans to take these jobs rather than issue more H-1B
visas for aliens to take these jobs.
But certainly the allocation of the funds needs to be
better monitored and fine-tuned, and we will have an
opportunity to do that in September.
Ms. Jackson Lee. Well, reclaiming my time, I'm not ruling
out any use of the H-1B fees that would enhance the
opportunities for training Americans. If the Chairman will
recollect, Mr. Smith and myself, in fact, drafted legislation
that was rejected by this Committee that had to do with
enhancing training in H-1B for Americans. So I'm not someone
who has not done that.
I hope this process will be inclusive, that all of us will
have input. I still think it's important to provide resources
that are needed for processing visa applications, and we can
look at other alternatives. But I at this time offer to
withdraw the amendment, and if I could inquire of Mister--I'm
sorry. Please forgive me.
Mr. Shigetomi. Shigetomi.
Ms. Jackson Lee. Atomi, is that correct?
Mr. Shigetomi. Shigetomi.
Ms. Jackson Lee. Shigetomi. Thank you very much, sir. The
opportunity to meet with some representative this week in my
office on this issue.
Chairman Sensenbrenner. The amendment is withdrawn.
Ms. Jackson Lee. I'm sorry. I didn't get his--is that--can
we----
Mr. Shigetomi. That's fine, yes.
Ms. Jackson Lee. Thank you very much.
Thank you, Mr. Chairman. I ask unanimous consent to
withdraw the amendment.
Chairman Sensenbrenner. The amendment is withdrawn.
Are there further amendments? If there are no further
amendments, the question is on agreeing to the draft
legislation that has been put before. Those in favor will say
aye? Opposed, no?
The ayes appear to have it. The ayes have it, and the draft
legislation as amended is sent back to the USTR for a redo job.
Without objection, this staff is directed to make technical
and conforming changes.
Minority Views
We write these views to explain that, as a general
proposition we oppose efforts by the Administration to distort
our immigration laws by offering new visa categories to
specific nations as a bargaining chip in trade negotiations.
This should not have been done as part of the North American
Free Trade Agreement and it should not have been done as part
of the Chile Free Trade Agreement.
We would note that Article I, section 8, clause 4 of the
Constitution provides that Congress shall have the power to
``establish an uniform Rule of Naturalization.'' The Supreme
Court has long found that this provision of the Constitution
grants Congress plenary power over immigration policy.\1\
Moreover, the Court has found that ``the formulation of
policies [pertaining to the entry of aliens and their right to
remain here] is entrusted exclusively to Congress has become
firmly imbedded in the legislative and judicial tissues of our
body politics as any aspect of our government.''\2\ Nonetheless
the Administration has negotiated a new visa program in the
U.S.-Chile FTA; usurping Congress' clear constitutional role in
creating immigration law.
---------------------------------------------------------------------------
\1\ See: Kleindienst v. Mandel, 408 U.S. 753, 766 (1972) and
Boutilier v. INS, 387 U.S. 118, 123 (1967)
\2\ Galvan v. Press, 347 U.S. 522,531(1954)
---------------------------------------------------------------------------
Having stated that, we do appreciate the efforts of the
Majority to work with us in improving the implementing language
with regard to immigration as best we could, given the
unfortunate constraints of the underlying agreement. For
example, the initial draft of the legislation we received
contained several major loopholes and flaws. It would have
created 1,400 new visas for persons to come into this country
from Chile. There was no requirement that employers pay any
fees when such temporary workers were brought in. There was no
requirement that employers certify that they were unable to
find American workers before they hired these foreign workers.
And there was no real limitation on the ability of these
individuals to stay in this country indefinitely.
Many of these problems were mitigated as a result of this
Committee's input in the process. We enacted language which
would insure that several H-1b requirements apply to these new
visas.\3\ We also enacted a requirement that the new visas not
go beyond the current H-1b limits.
---------------------------------------------------------------------------
\3\ Although the amount of the fee was specified, the implementing
legislation fails to include the requirement in INA section
212(n)(2)(C)(vi)(II) that forbids the employer from requiring the
employee to pay the fee.
---------------------------------------------------------------------------
We would note that we have a significant remaining concern
that the Administration was unwilling to include in the text of
the implementing legislation. First and foremost, the Chile
implementing bill provides no overall limitation on how many
times professional visas can be renewed. While the implementing
language included the Conyers/Berman language insuring that
renewals beyond 6 years count against the overall H-1b cap, it
does not include language present in the current H-1b
provisions that limits authorized admission to 6 years. Thus,
it is possible that employers could renew their employees'
visas each and every year under the Chile agreement, with no
limits, while also bringing in new entrants to fill up the
annual numerical limit for new visas. This would rob the
program of its supposedly temporary nature and harm American
workers.
In addition we are concerned that the implementing
legislation does not contain all of the Labor Condition
Application requirements that apply in the current H-1b
programs. Most importantly, the implementing legislation
completely omits the category of H-1b dependent employers
present in existing law that requires employers to demonstrate
that they have tried to recruit U.S. workers and attest that
new entrants will not displace U.S. workers.\4\ In addition,
the implementing legislation does not grant the authority given
to Secretary of Labor in the H-1b to initiate her own
investigations based on credible information that the employer
is violating the rules of employment of the H-1b program. USTR
has argued that these provisions expire in October 1, 2003 and
that should Congress extend or modify provisions of the H-1b
program, it may make corresponding modifications to the
amendments to the INA made by the implementing bill. However,
omission of these important worker protections sets a dangerous
precedent for inclusion in future agreements.
---------------------------------------------------------------------------
\4\ The implementing language also omits H-1b dependent requirement
in 212(n)(2)(E) that the H-1b dependent employer not place the H-1b
worker with a third employer that is displacing U.S. workers.
---------------------------------------------------------------------------
Finally, we strongly object to any notion that the U.S.-
Chile Free Trade Agreement will be used as a model for future
FTAs. We have been informed by the Majority that the
Administration will not seek immigration in future possible
free trade agreements, such as the Central American Free Trade
Agreement, and this is spelled out in the letter from Chairman
Sensenbrenner and Ranking Member Conyers to Ambassador
Zoellick. It is critical that the administration interpret the
inherent problems in the new visa program not as a precedent
for future agreements, but rather as a sign that immigration
has no place in trade agreements.
John Conyers, Jr.
Jerrold Nadler.
Robert C. Scott.
Sheila Jackson Lee.
Martin T. Meehan.
William D. Delahunt.
Tammy Baldwin.
Linda T. Sanchez.