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T–213 Louisville, KY to Richmond, IN
[New]
Louisville, KY (IIU) ....................................... VORTAC ........................................................ (Lat. 38°06′13″ N., long. 85°34′39″ W.)
GAMKE, IN .................................................... WP ................................................................. (Lat. 38°47′02″ N., long. 85°15′14″ W.)
MILAN, IN ..................................................... WP ................................................................. (Lat. 39°21′22″ N., long. 85°19′01″ W.)
Richmond, IN (RID) ...................................... VORTAC ........................................................ (Lat. 39°45′18″ N., long. 84°50′20″ W.)
* * * * * * *
T–215 Lexington, KY to GAMKE, IN
[New]
Lexington, KY (HYK) .................................... VORTAC ........................................................ (Lat. 37°57′59″ N., long. 84°28′21″ W.)
GAMKE, IN .................................................... WP ................................................................. (Lat. 38°47′02″ N., long. 85°15′14″ W.)
* * * * * * *
T–217 Lexington, KY to Springfield, OH
[New]
Lexington, KY (HYK) .................................... VORTAC ........................................................ (Lat. 37°57′59″ N., long. 84°28′21″ W.)
BOSTR, OH ................................................... WP ................................................................. (Lat. 38°53′08″ N., long. 84°04′58″ W.)
HEDEN, OH ................................................... WP ................................................................. (Lat. 39°16′45″ N., long. 84°02′02″ W.)
Springfield, OH (SGH) .................................. VOR/DME ...................................................... (Lat. 39°50′12″ N., long. 83°50′42″ W.)
* * * * * Islands). The proposed rule would FOR FURTHER INFORMATION CONTACT: Faye
Issued in Washington, DC, on June 28, amend the regulations by making Robinson, (202) 482–3526, same address
2005. technical changes required by passage of as above.
Edith V. Parish, the Miscellaneous Trade and Technical SUPPLEMENTARY INFORMATION: The
Acting Manager, Airspace and Rules. Corrections Act of 2004; extending the insular possessions watch industry
[FR Doc. 05–13266 Filed 7–5–05; 8:45 am]
duty refund benefits to include the provision in Section 110 of Public Law
value of usual and customary health 97–446 (96 Stat. 2331) (1983), as
BILLING CODE 4910–13–P
insurance, life insurance and pension amended by Section 602 of Public Law
benefits; raising the ceiling on the 103–465 (108 Stat. 4991) (1994);
amount of jewelry that qualifies for the additional U.S. Note 5 to chapter 91 of
DEPARTMENT OF COMMERCE
duty refund benefit; allowing new the Harmonized Tariff Schedule of the
International Trade Administration insular jewelry producers to assemble United States (‘‘HTSUS’’), as amended
jewelry and have such jewelry treated as by Public Law 94–241 (90 Stat. 263)
DEPARTMENT OF THE INTERIOR an article of the insular possessions for (1976) requires the Secretary of
up to 18 months after the jewelry Commerce and the Secretary of the
15 CFR Part 303 company commences assembly Interior (‘‘the Secretaries’’), acting
operations; allowing duty refund jointly, to establish a limit on the
[Docket No. 050613157–5157–01]
certificate holders to secure a duty quantity of watches and watch
RIN 0625–AA68 refund on any articles that are imported movements that may be entered free of
into the customs territory of the United duty during each calendar year. The law
Office of Insular Affairs; Changes in States by the certificate holder duty also requires the Secretaries to establish
the Insular Possessions Watch, Watch paid; providing a more comprehensive the shares of this limited quantity which
Movement and Jewelry Programs definition of ‘‘unit;’’ adjusting the may be entered from the Virgin Islands,
AGENCIES: Import Administration, amount of watch repairs that are eligible Guam, American Samoa and the
International Trade Administration, for the duty refund; providing Commonwealth of the Northern Mariana
Department of Commerce; Office of compensation to insular watch Islands (‘‘CNMI’’). After the
Insular Affairs, Department of the producers if tariffs on watches and Departments have verified the data
Interior. watch movements are reduced; and submitted on the annual application
clarifying which wages are eligible for (Form ITA–334P), the producers’ duty-
ACTION: Notice of proposed rulemaking
purposes of determining the duty refund exemption allocations are calculated
and request for comments.
and identifying which records are from the territorial share in accordance
SUMMARY: The Departments of needed for the audit. with 15 CFR 303.14 and each producer
Commerce and the Interior (the is issued a duty-exemption license. The
DATES: Written comments must be law further requires the Secretaries to
Departments) propose amending their received on or before August 5, 2005.
regulations governing watch duty- issue duty-refund certificates to each
exemption allocations and the watch ADDRESSES: Address written comments territorial watch and watch movement
and jewelry duty-refund benefits for to Faye Robinson, Acting Director, producer based on the company’s duty-
producers in the United States insular Statutory Import Programs Staff, FCB, free shipments and creditable wages
possessions (the U.S. Virgin Islands, Suite 4100W, U.S. Department of paid during the previous calendar year.
Guam, American Samoa and the Commerce, 14th and Constitution Ave., Public Law 106–36 (113 Stat. 127)
Commonwealth of the Northern Mariana NW., Washington, DC 20230. (1999) authorizes the issuance of a duty-
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Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Proposed Rules 38829
refund certificate to each territorial out that repair work is very labor Another proposed change, pursuant to
jewelry producer for any article of intensive and more time consuming Public Law 108–429, would amend
jewelry provided for in heading 7113 of than regular watch assembly. The Section 303.20(a)(2) to allow new
the HTSUS which is the product of any producer requesting the change program jewelry producers up to an18
such territory. The value of the explained that there is a shortage of month exemption from meeting the
certificate is based on creditable wages watchmakers in the United States and substantial transformation requirements
paid and duty-free units shipped into therefore companies are starting to send and the other provisions normally
the United States during the previous watches abroad to be repaired. The required for duty-free entry into the
calendar year. Although the law proposed change is intended to capture United States. Starting on the day the
specifically mentions the U.S. Virgin part of this market because there are new producer commences jewelry
Islands, Guam and American Samoa, the currently experienced watchmakers in manufacturing or jewelry assembly, the
issuance of the duty-refund certificate the U.S. Virgin Islands who are jewelry producer would have up to 18
would also apply to the CNMI due to unemployed and looking for work. months for any article of jewelry
the Covenant to Establish a Increasing employment and providing provided for in heading 7113, HTSUS,
Commonwealth of the Northern Mariana meaningful work for permanent that is assembled in an insular
Islands in Political Union with the residents of the insular possessions is possession, to be treated as a product of
United States of America (Pub. L. 94– the cornerstone of the watch and the insular possession. This proposed
241), which states that goods from the jewelry programs. change is intended to allow a new
CNMI are entitled to the same tariff In an effort to further clarify which producer adequate time to train
treatment as imports from Guam. See wages are eligible for the duty refund, employees in the skills necessary to
also 19 CFR 7.2(a). In order to be we propose adding a new Section meet the substantial transformation
considered a product of such territories, 303.2(a)(14); redesignating the current requirements.
the jewelry must meet the U.S. Customs Sections 303.2(a)(14) through (a)(16) as The proposed rule would also amend
Service substantial transformation Sections 303.2(a)(15) through (a)(17), Section 303.16(a)(7) by expanding the
requirements (the jewelry must become respectively; adding a new Section definition of a ‘‘unit’’ of jewelry so that
a new and different article of commerce 303.16(a)(10); and redesignating current the term unit more accurately represents
as a result of production or manufacture Sections 303.16(a)(10) and 303.16(a)(11) the way some heading 7113, HTSUS,
performed in the territory). To receive as Sections 303.16(a)(11) and jewelry is sold in the industry.
duty-free treatment, the jewelry must 303.16(a)(12), respectively, to further The proposed rule would also amend
also satisfy the requirements of General clarify which wages are not creditable. Sections 303.5(b)(5) and 303.17(b)(4) to
Note 3(a)(iv) of the HTSUS and We also propose, as requested by a clarify that all records pertaining to
applicable Customs Regulations (19 CFR producer, to clarify the term ‘‘year’’ in shipment documents and proof of
7.3). current Sections 303.2(a)(16) and residency, as required, must be
303.16(a)(11) to clear up any possible maintained and made available for the
Proposed Amendments confusion. verification of data. We also propose
Section 1562 of Public Law 108–429 We also propose amending Sections adding new Sections 303.5(b)(8) and
(2004) amended Public Law 97–446, 303.2(b)(4), 303.2(b)(5), 303.12(c)(1), 303.17(b)(9) which would require the
Public Law 103–465 and Public Law 303.16(b)(2), 303.16(b)(3), and collection and maintenance of
106–36. The proposed rule would make 303.19(c)(1). These sections currently information pertaining to health
the necessary technical changes to allow the duty refund certificate holder insurance, life insurance and pension
reflect the new authority for the insular a refund of duties on watches, watch benefits for each employee in order that
watch and jewelry programs. Changes movements and parts therefor, except the benefit information can be verified
would be made to Authority, 15 CFR discrete watch cases and any article and the duty refunds, based on the
303.1(a), 303.2(a)(1), 303.12(c)(2), containing a material which is the verified data, be issued in accordance
303.15(a), and 303.16(a)(1). product of a country to which column with Public Law 108–429. Further, in
Pursuant to Public Law 108–429, we 2 rates of duty apply. Pursuant to Public accordance with Public Law 108–429,
propose changing the definitions of Law 108–429, we propose allowing the we proposed adding a new Section
‘‘creditable wages’’ by amending 15 CFR refund of duties on any articles that are 303.5(b)(9) in the event that the HTSUS
303.2(a)(13) and 15 CFR 303.16(a)(9) to imported into the customs territory of tariffs on watches and watch
include the value of usual and the United States duty paid by the movements are reduced. If such tariffs
customary health insurance, life certificate holder unless the articles were reduced, we would need records
insurance and pension benefits. We also contain a material to which column 2 pertaining to the annual value and
propose changing the definition of rates of duty apply. quantities of the duty-free shipments of
creditable wages to include the Further, we propose amending watches and watch movements into the
difference between the duty rates for Sections 303.20(b)(ii), (b)(iii) and (b)(iv) United States by individual HTSUS
watches and watch movements that by raising the ceiling on the number of tariff numbers along with information
were in effect on January 1, 2001 and duty-free units of jewelry entering the about components contained in the
any new lower duty rates that takes United States each year that qualify for watches and watch movements. This
place in the future. This provision in duty refund benefits under the program. information would be collected on an
Public Law 108–429 would only be Currently, a maximum of 750,000 units annual basis.
applicable if there were duty reductions of jewelry a year qualifies for duty
on watches and watch movements. We refund benefits. The proposed change, Administrative Law Requirements
further propose reapportioning the pursuant to Public Law 108–429, would Regulatory Flexibility Act. In
percentage of watch and watch allow a maximum of 10,000,000 units a accordance with the Regulatory
movement repair wages that will be year to qualify for the duty refund Flexibility Act, 5 U.S.C. 601 et seq., the
creditable towards the duty-refund. We benefit as long as the limit on available Chief Counsel for Regulation at the
propose raising the percentage of repairs program funds is not exceeded and all Department of Commerce has certified
that are eligible for benefits in response the units are entered free of duty in to the Chief Counsel for Advocacy,
to a request we received which pointed accordance with the regulations. Small Business Administration, that the
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38830 Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Proposed Rules
proposed rule, if promulgated as final, expectation that this will result in Therefore, a regulatory flexibility
would not have a significant economic increased sales and employment. analysis is not required.
impact on a substantial number of small The proposed changes would require Paperwork Reduction Act. This
entities. There are currently four insular companies to provide information on proposed rulemaking contains revised
watch program companies and four their employees’ health insurance, life collection of information requirements
insular program jewelry companies. All insurance and pension benefits for the that have been submitted to the Office
these companies would be considered annual application (form ITA–334P) and of Management and Budget (OMB) for
small entities. The majority of proposed have such information available for the review and approval. The rule would
changes are being made to reflect the annual audit. Also, if tariffs on watches require further paperwork to be
new statutory requirements contained in and watch movements are reduced, then collected due to the passage of Public
Public Law 108–429. The changes companies would have to provide Law 108–429 which extends the duty
include extending the watch and annual aggregate information by refund benefit to include the value of
jewelry programs to the year 2015; individual HTSUS watch tariff numbers usual and customary health insurance,
extending the duty refund benefit to for the following components contained life insurance and pension benefits and
include the value of usual and therein: The quantity and value of provides compensation to insular watch
customary health insurance, life watch cases, the quantity of movements, producers if tariffs on watches and
insurance and pension benefits; raising the quantity and value of each type of watch movements are reduced. The
the ceiling on the number of units of strap, bracelet or band, and the quantity documentation for the health insurance,
jewelry that qualifies for the duty refund and value of batteries shipped free of life insurance and pension benefits,
benefit; allowing new insular jewelry duty into the United States. If discrete would be required for the annual audit
producers to assemble jewelry and have watch movements are shipped free of of information and would be needed to
the jewelry be treated as an article of the duty into the United States, then the complete the annual application, form
insular possessions for up to 18 months companies would need to submit the ITA–334P, which will be revised. Also,
after the jewelry company commences annual aggregate quantity by individual if tariffs on watches and watch
assembly operations; allowing duty HTSUS movement tariff numbers and movements were reduced, then
refund certificate holders to secure a the quantity and value of the batteries, companies would have to provide
refund of duties on any articles that if included in the movement. This annual aggregate information by
entered the customs territory of the information would normally be part of individual HTSUS watch tariff numbers
United States with the duty having been the each company’s records. for the following components contained
paid by the certificate holder; providing Consequently, a producer would merely therein, i.e., the quantity and value of
a more comprehensive definition of need to provide the data on fringe watch cases, the quantity of movements,
‘‘unit;’’ adjusting the amount of watch benefits on the annual application and the quantity and value of each type of
repairs that are eligible for the duty to retain the records for review during strap, bracelet or band, and the quantity
refund; providing compensation to the audit. We estimate that the cost of and value of batteries shipped free of
insular watch producers if tariffs on supplying the documentation as needed duty into the United States. If discrete
watches and watch movements are would be no more than $40 a year. The watch movements are shipped free of
reduced; and clarifying which wages are reporting and recordkeeping duty into the United States, producers
eligible for the duty refund and which requirements in this proposed rule would have to provide the annual
records must be kept for audit purposes. would increase the total burden hours aggregate quantity of movements by
Adoption of this proposed rule would per company by approximately two individual HTSUS tariff numbers, and
afford producers greater flexibility in hours a year to account for retrieval of the value and quantity of the batteries,
dealing with market realities, thereby the information for the audit and if included in the movement. This
giving them the ability to take further inclusion of the aggregate data on the information would be required for the
advantage of opportunities that are annual application. Therefore, there annual audit of information and would
suited to their particular needs without would be little economic impact, be needed to complete the annual
losing the duty refund benefit. Also, because this information would be part application, form ITA–334P, if tariff on
increasing the ceiling on the amount of of a company’s normal recordkeeping. watches and watch movements were
jewelry units eligible for the duty refund This proposed rule would not have a reduced. We estimate the burden to be
will be beneficial to the program significant economic impact on a no more than two hours a year to
because it will allow findings substantial number of small entities. include the information on form ITA–
companies (re: companies that produce Although the rule effects a significant 334P and have it available for the audit.
jewelry and jewelry components such as number of small entities, it would only Collection activities are currently
earring backs, links, etc.) to take impose minimal economic impact. The approved by the Office of Management
advantage of the program, thereby rule would only increase reporting or and Budget under control numbers
increasing employment. Findings record keeping requirements by 0625–0040. Public comment is sought
companies normally produce millions approximately 2 hours per year per regarding: whether the proposed
of units a year and without this ceiling company. Further, the proposed collection of information requirements
increase, findings companies would not changes will not duplicate, overlap or are necessary for the proper
consider moving to the insular conflict with other laws or regulations. performance of the functions of the
possessions. The proposed changes Finally, the proposed changes would agency, including whether the
would have an overall positive result in an overall positive economic information will have practical utility;
economic benefit to watch and jewelry benefit to the watch and jewelry the accuracy of the burden estimate;
producers by providing greater program producers. Consequently, these ways to enhance the quality, utility, and
benefits which will be a further proposed changes are not expected to clarity of the information to be
incentive for new companies to locate in meet the RFA criteria of having a collected; and the ways to minimize the
the insular possessions. In addition, the ‘‘significant’’ economic effect on a burden of the collection of information,
proposed changes are intended to make ‘‘substantial number’’ of small entities, including the use of automated
companies more competitive with the as stated in 5 U.S.C. 603 et seq. collection techniques or other forms of
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Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Proposed Rules 38831
information technology. Send comments physically present for at least 183 days accordance with the Departments’
regarding the burden estimate or any per year)’’ and adding ‘‘(i.e., be regulations, along with meeting all other
other aspect of the collection of physically present for at least 183 days creditable wage requirements of the
information to U.S. Department of within a continuous 365 day period)’’ in regulations, which must be documented
Commerce, ITA Information Officer, its place. and verified to the satisfaction of the
Washington, DC 20230 and the Office of E. The heading and the first sentence Secretaries.
Information and Regulations Officer, of paragraph (b)(4) are revised as set (ii) The combined creditable amount
Office of Management and Budget, forth below. of individual health and life insurance
Washington, DC 20503 (Att: OMB Desk F. The heading of paragraph (b)(5) is per year, for each full-time permanent
Officer), or email revised as set forth below. resident employee who works on the
David_Rostker@omb.eop.gov. premises of the company office and
Notwithstanding any other provision § 303.2 Definitions and forms. whose wages qualify as creditable, may
of the law, no person is required to (a) * * * not exceed 100 percent of the ‘‘weighted
respond to, nor shall any person be (13) Creditable wages, creditable average’’ yearly federal employee health
subject to a penalty for failure to comply fringe benefits and creditable duty insurance, which is calculated from the
with the collection of information differentials eligible for the duty refund individual health plans weighted by the
unless it displays a currently valid OMB benefit include, but are not limited to, number of individual contracts in each
Control Number. the following: plan. The yearly amount is calculated
E.O. 12866. It has been determined (i) Wages up to an amount equal to 65 by the Office of Personnel Management
that the proposed rulemaking is not percent of the contribution and benefit and includes the ‘‘weighted average’’ of
significant for purposes of Executive base for Social Security, as defined in all individual health insurance costs for
Order 12866. the Social Security Act for the year in federal employees throughout the
which wages were earned, paid to United States. The maximum life
List of Subjects in 15 CFR Part 303 permanent residents of the insular insurance allowed within this combined
Administrative practice and possessions employed in a firm’s 91/5 amount is $50,000 for each employee.
procedure, American Samoa, Customs watch and watch movement program. (A) The combined creditable amount
duties and inspection, Guam, Imports, (A) Wages paid for the repair of of family health and life insurance per
Marketing quotas, Northern Mariana watches up to an amount equal to 85 year, for each full-time permanent
Islands, Reporting and recordkeeping percent of the firm’s total creditable resident employee who works on the
requirements, Virgin Islands, Watches wages. premises of the company office and
and jewelry. (B) Wages paid to watch and watch whose wages qualify as creditable, may
For reasons set forth above, the movement assembly workers involved not exceed 120 percent of the ‘‘weighted
Departments propose to amend 15 CFR in the complete assembly of watches average’’ yearly federal employee health
Part 303 as follows: and watch movements which have insurance, which is calculated from the
entered the United States duty-free and family health plans weighted by the
PART 303—WATCHES, WATCH have complied with the laws and number of family contracts in each plan.
MOVEMENTS AND JEWELRY regulations governing the program. The yearly amount is calculated by the
PROGRAMS (C) Wages paid to watch and watch Office of Personnel Management and
1. The authority citation for 15 CFR movement assembly workers involved includes the ‘‘weighted average’’ of all
Part 303 is revised to read as follows: in the complete assembly of watches, family health insurance costs for federal
excluding the movement, only in employees throughout the United
Authority: Pub. L. 97–446, 96 Stat. 2331
(19 U.S.C. 1202, note); Pub. L. 103–465, 108 situations where the desired movement States. The maximum life insurance
Stat. 4991; Pub. L. 94–241, 90 Stat. 263 (48 can not be purchased unassembled and allowed within this combined amount is
U.S.C. 1681, note); Pub. L. 106–36, 113 Stat. the producer has documentation $50,000 for each employee.
167; Pub. L. 108–429, 118 Stat. 2582. establishing this. (B) The creditable pension benefit, for
2. The first sentence of § 303.1(a) is (D) Wages paid to those persons each full-time permanent resident
amended by removing ‘‘and amended by engaged in the day-to-day assembly employee who works on the premises of
Public Law 103–465, enacted 8 operations on the premises of the the company office and whose wages
December 1994.’’ and adding ‘‘amended company office, wages paid to qualify as creditable, is up to 3 percent
by Public Law 103–465, enacted 8 administrative employees working on of the employee’s wages unless the
December 1994 and amended by Public the premises of the company office, employee’s wages exceed the maximum
Law 108–429 enacted 3 December wages paid to security employees and annual creditable wage allowed under
2004.’’ in its place. wages paid to servicing and the program (see paragraph (a)(13)(i) of
3. Section 303.2 is amended as maintenance employees if these services this section). An employee earning more
follows: are integral to the assembly and than the maximum creditable wage
A. Section 303.2(a)(1) is amended by manufacturing operations and the allowed under the program will be
removing ‘‘.’’ at the end of the sentence employees are working on the premises eligible for only 3 percent of the
and adding ‘‘, Public Law 108–429, of the company office. maximum creditable wage.
enacted on 3 December 2004, 118 Stat. (E) Wages paid to persons engaged in (iii) If tariffs on watches and watch
2582.’’ in its place. both creditable and non-creditable movements are reduced, then
B. Section 303.2(a)(13) is revised as assembly and repair operations may be companies would be required to provide
set forth below. credited proportionally provided the the annual aggregate data by individual
C. In Section 303.2, paragraphs (a)(14) firm maintains production, shipping HTSUS watch tariff numbers for the
through (a)(16) are redesignated as and payroll records adequate for the following components contained
paragraphs (a)(15) through (a)(17), and a Departments’ verification of the therein: The quantity and value of
new paragraph (a)(14) is added as set creditable portion. watch cases, the quantity of movements,
forth below. (F) Wages paid to new permanent the quantity and value of each type of
D. Newly designated paragraph (a)(17) residents who have met the strap, bracelet or band, and the quantity
is amended by removing ‘‘(i.e., be requirements of permanent residency in and value of batteries shipped free of
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38832 Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Proposed Rules
duty into the United States. If discrete (E) Wages paid to persons engaged in number and proof of residency, as
watch movements are shipped free of both creditable and non-creditable requested;
duty into the United States, then the assembly and repair operations if the * * * * *
annual aggregate quantity by individual producer does not maintain production,
HTSUS movement tariff numbers would shipping and payroll records adequate (8) All records pertaining to health
also be required along with the value of for the Departments’ verification of the insurance, life insurance and pension
each battery if it is contained within. creditable portion. benefits for each employee; and
These data would be used to calculate (ii) Any costs, for the year in which (9) If HTSUS tariffs on watches and
the annual duty rate before each HTSUS the wages were paid, of the combined watch movements are reduced, records
tariff reduction, and the annual duty creditable amount of individual health of the annual aggregate data by
rate after the HTSUS tariff reduction. and life insurance for employees over individual HTSUS watch tariff numbers
The amount of the difference would be 100 percent of the ‘‘weighted average’’ for the following components contained
creditable toward the duty refund. The yearly individual health insurance costs therein would be required: The quantity
tariff information would only be for all federal employees. The cost of and value of watch cases; the quantity
collected and used in the calculation of any life insurance over the $50,000 limit of movements; the quantity and value of
the annual duty-refund certificate and for each employee. each type of strap, bracelet or band; and
would not be used in the calculation of (A) Any costs, for the year in which the quantity and value of batteries
the mid-year duty-refund. the wages were paid, of the combined shipped free of duty into the United
(14) Non-creditable wages and non- creditable amount of family health and States. In addition, if applicable, records
creditable fringe benefits. Wages life insurance for employees over 120 of the annual aggregate quantity of
ineligible for the duty refund benefit percent of the ‘‘weighted average’’ discrete watch movements shipped free
wages include, but are not limited to, yearly family health insurance costs for of duty into the United States by HTSUS
the following: all federal employee. The cost of any life tariff number.
(i) Wages over 65 percent of the insurance over the $50,000 limit for
each employee. * * * * *
contribution and benefit base for Social
Security, as defined in the Social (B) The cost of any pension benefit 5. Section 303.12 (c)(1) and (2) are
Security Act for the year in which wages per employee over 3 percent of the revised to read as follows:
were earned paid to permanent employee’s creditable wages unless the
employee’s wages exceed the maximum § 303.12 Issuance and use of production
residents of the territories employed in incentive certificates.
a firm’s 91/5 watch and watch annual creditable annual maximum
creditable wage allowed under the * * * * *
movement program.
program (see paragraph (a)(13)(i) of this (c) The use and transfer of certificate
(A) Wages paid for the repair of
section). Employees earning over the of entitlements. (1) Insular producers
watches in an amount over 85 percent
maximum creditable wage allowed issued a certificate may request a refund
of the firm’s total creditable wages.
under the program would have a by executing Form ITA–361P (see
(B) Wages paid for the assembly of
creditable annual pension benefit of up § 303.2(b)(5) and the instructions on the
watches and watch movements which
to 3 percent of the maximum creditable form). After authentication by the
are shipped outside the customs
wage and wages over 3 percent of the Department of Commerce, Form ITA–
territory of the United States; wages
maximum creditable wage would not be 361P may be used to obtain duty
paid for the assembly of watches and
creditable. refunds on articles that entered the
watch movements that do not meet the
regulatory assembly requirements; or * * * * * customs territory of the United States
wages paid for the assembly of watches (b) * * * duty paid except for any article
(4) ITA–360P ‘‘Certificate of containing a material which is the
or watch movements that contain
Entitlement to Secure the Refund of product of a country to which column
HTSUS column 2 components.
Duties on Articles that Entered the 2 rates of duty apply. Articles for which
(C) Wages paid for the complete
Customs Territory of The United State duty refunds are claimed must have
assembly of watches, excluding the
Duty Paid.’’ This document authorizes entered the customs territory of the
movement, when the desired movement
an insular watch producer to request the United States during the two-year
can be purchased unassembled, if the
refund of duties on imports of articles period prior to the issue date of the
producer does not have adequate
that entered the customs territory of the certificate or during the one-year period
documentation, demonstrating to the
United States duty paid, up to the the certificate remains valid. Copies of
satisfaction of the Secretaries, that the
specified value of the certificate. * * * the appropriate Customs entries must be
movement could not be purchased (5) ITA–361P ‘‘Request for Refund of
unassembled whether or not it is provided with the refund request in
Duties on Articles that Entered the order to establish a basis for issuing the
entering the United States. Customs Territory of the United States
(D) Wages paid to persons not claimed amounts. Certification
Duty Paid.’’ * * * regarding drawback claims and
engaged in the day-to-day assembly
operations on the premises of the * * * * * liquidated refunds relating to the
4. Section 303.5(b)(5) is revised to presented entries is required from the
company office; wages paid to any
read as set forth below and paragraphs claimant on the form.
outside consultants; wages paid outside
(b)(8) and (b)(9) are added to read as set
the office personnel, including but not (2) Regulations issued by the Bureau
forth below.
limited to, lawyers, gardeners, of Customs and Border Protection, U.S.
construction workers, and accountants; § 303.5 Application for annual allocation of Department of Homeland Security,
wages paid to employees not working duty-exemptions. govern the refund of duties under Public
on the premises of the company office; * * * * * Law 97–446, as amended by Public Law
and wages paid to employees who do (b) * * * 103–465 and Public Law 108–429. If the
not qualify as permanent residents in (5) Customs, bank, payroll, Departments receive information from
accordance with the Departments’ production records, and all shipping the Bureau of Customs and Border
regulations. records including the importer of record Protection that a producer has made
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Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Proposed Rules 38833
unauthorized use of any official form, the company office, wages paid to United States. The maximum life
they shall cancel the affected certificate. administrative employees working on insurance allowed within this combined
* * * * * the premises of the company office, amount is $50,000 for each employee.
6. Section 303.15(a) is amended by wages paid to security operations (A) The combined creditable amount
removing ‘‘.’’ at the end of the sentence employees and wages paid to servicing of family health and life insurance per
and adding ‘‘, and Public Law 108–429, and maintenance employees if these year, for each full-time permanent
enacted on 3 December 2004.’’ in its services are integral to the assembly and resident employee who works on the
place. manufacturing operations and the premises of the company office and
7. Section 303.16 is amended as employees are working on the premises whose wages qualify as creditable, may
follows: of the company office. not exceed 120 percent of the ‘‘weighted
A. Section 303.16(a)(1) is amended by (B) Wages paid to permanent average’’ yearly federal employee health
removing ‘‘.’’ at the end of the last residents who are employees of a new insurance, which is calculated from the
sentence and adding ‘‘, and Public Law company involved in the jewelry family health plans weighted by the
108–429, enacted on 3 December 2004.’’ assembly and jewelry manufacturing of number of family contracts in each plan.
in its place. HTSUS heading 7113 jewelry for up to The yearly amount is calculated by the
B. Section 303.16(a)(7) is revised to 18 months after such jewelry company Office of Personnel Management and
read as set forth below. commences jewelry manufacturing or includes the ‘‘weighted average’’ of all
C. Section 303.16(a)(9) is revised to jewelry assembly operations in the family health insurance costs for federal
read as set forth below. insular possessions. employees throughout the United
D. Paragraphs (a)(10) and (a)(11) are (C) Wages paid when a maximum of States. The maximum life insurance
redesignated as paragraphs (a)(11) and two producers work on a single piece of allowed within this combined amount is
(12), and a new paragraph (a)(10) is HTSUS heading 7113 jewelry which $50,000 dollars for each employee.
added as set forth below. entered the United States free of duty (B) The creditable pension benefit, for
E. Newly designated paragraph (a)(12) under the program. Wages paid by the each full-time permanent resident
is amended by removing ‘‘(i.e., be two producers will be credited employee who works on the premises of
physically present for at least 183 days proportionally provided both producers the company office and whose wages
per year)’’ and adding ‘‘(i.e., be demonstrate to the satisfaction of the qualify as creditable, is up to 3 percent
physically present for at least 183 days Secretaries that they worked on the of the employee’s wages unless the
within a continuous 365 day period same piece of jewelry, the jewelry employee’s wages exceed the maximum
year)’’ in its place. received duty-free treatment into the annual creditable wage allowed under
F. Paragraph (b)(2) is revised to read customs territory of the United States, the program (see paragraph (a)(9)(i) of
as set forth below. and the producers maintained this section). An employee earning more
G. The heading of paragraph (b)(3) is production and payroll records than the maximum creditable wage
revised to read as set forth below. sufficient for the Departments’ allowed under the program will be
verification of the creditable wage eligible for only 3 percent of the
§ 303.16 Definitions and forms. portion (see § 303.17(b)). maximum creditable wage.
(a) * * * (D) Wages paid to persons engaged in (10) Non-creditable wages and non-
(7) Unit of Jewelry means a single both creditable and non-creditable creditable fringe benefits. Wages
article (e.g., ring, bracelet, necklace), assembly and repair operations may be ineligible for the duty refund benefit
pair (e.g, cufflinks), gram for links credited proportionally provided the include, but are not limited to, the
which are sold in grams and stocked in firm maintains production, shipping following:
grams, and other subassemblies and and payroll records adequate for the (i) Wages over 65 percent of the
components in the customary unit of Departments’ verification of the contribution and benefit base for Social
measure they are stocked and sold creditable portion. Security, as defined in the Social
within the industry. (E) Wages paid to new permanent Security Act for the year in which wages
* * * * * residents who have met the were earned, paid to permanent
(9) Creditable wages and creditable requirements of permanent residency in residents of the territories employed in
fringe benefits eligible for the duty accordance with the Departments’ a firm’s 91/5 heading 7113, HTSUS,
refund benefit include, but are not regulations along with meeting all other jewelry program.
limited to, the following: creditable wage requirements of the (A) Wages paid for the repair of
(i) Wages up to an amount equal to 65 regulations, which must be documented jewelry in an amount over 50 percent of
percent of the contribution and benefit and verified to the satisfaction of the the firm’s total creditable wages.
base for Social Security, as defined in Secretaries. (B) Wages paid to employees who are
the Social Security Act for the year in (ii) The combined creditable amount involved in assembling HTSUS heading
which wages were earned, paid to of individual health and life insurance 7113 jewelry beyond 18 months after
permanent residents of the insular per year, for each full-time permanent such jewelry company commences
possessions employed in a firm’s resident employee who works on the jewelry manufacturing or jewelry
manufacture of HTSUS heading 7113 premises of the company office and assembly operations in the insular
articles of jewelry which are a product whose wages qualify as creditable, may possessions if the jewelry does not meet
of the insular possessions and have met not exceed 100 percent of the ‘‘weighted the Bureau of Customs and Border
the Bureau of Customs and Border average’’ yearly federal employee health Protection’s substantial transformation
Protection’s criteria for duty-free entry insurance, which is calculated from the requirements and other criteria for duty-
into the United States, plus any wages individual health plans weighted by the free enter into the United States.
paid for the repair of non-insular number of individual contracts in each (C) Wages paid for the assembly and
HTSUS heading 7113 jewelry up to an plan. The yearly amount is calculated manufacturing of jewelry which is
amount equal to 50 percent of the firm’s by the Office of Personnel Management shipped to places outside the customs
total creditable wages. and includes the ‘‘weighted average’’ of territory of the United States; wages
(A) Wages paid to persons engaged in all individual health insurance costs for paid for the assembly and
the day-to-day assembly operations at federal employees throughout the manufacturing of jewelry that does not
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38834 Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Proposed Rules
meet the regulatory assembly articles that entered the customs § 303.20 Duty refund.
requirements; or wages paid for the territory of the United States duty paid, * * * * *
assembly and manufacture of jewelry with certain exceptions, up to the (a) * * *
that contain HTSUS column 2 specified value of the certificate. (2) Eighteen month exemption. Any
components. Certificates may be used to obtain duty article of jewelry provided for in HTSUS
(D) Wages paid to those persons not refunds only when presented with a heading 7113, assembled in the insular
engaged in the day-to-day assembly properly executed Form ITA–361P. possessions by a new entrant jewelry
operations on the premises of the (3) ITA–361P ‘‘Request for Refund of manufacturer shall be treated as a
company office, wages paid to any Duties on Articles that Entered the product of the insular possessions if
outside consultants, wages paid to Customs Territory of the United States such article is entered into the customs
outside the office personnel, including Duty Paid.’’ * * * territory of the United States no later
but not limited to, lawyers, gardeners, * * * * * than 18 months after such producer
construction workers and accountants; 8.–9. Section 303.17 is amended by commences jewelry manufacturing or
wages paid to employees not working revising paragraph (b)(6); by jewelry assembly operations in the
on the premises of the company office redesignating paragraphs (b)(7) and insular possessions.
and wages paid to employees who do (b)(8) as paragraphs (b)(8) and (b)(9); * * * * *
not qualify as permanent residents in and by adding a new paragraph (b)(7) to 11. Section 303.20 is further amended
accordance with the Departments’ read as follows: as follows:
regulations. A. Paragraph (b)(1)(ii) is amended by
(E) Wages paid to persons engaged in § 303.17 Annual jewelry application. removing ‘‘450,000’’ and adding
both creditable and non-creditable * * * * * ‘‘3,533,334’’ in its place.
assembly and repair operations if the (b) * * * B. Paragraph (b)(1)(iii) is amended by
producer does not maintain production, (6) Customs, bank, payroll, removing ‘‘600,000’’ and adding
shipping and payroll records adequate production records, and all shipping ‘‘6,766,667’’ in its place.
for the Departments’ verification of the records including the importer of record C. Paragraph (b)(1)(iv) is amended by
creditable portion. number and proof of residency, as removing ‘‘750,000’’ and adding
(ii) Any costs, for the year in which requested; ‘‘10,000,000’’ in its place.
the wages were paid, of the combined (7) All records pertaining to health Joseph A. Spetrini,
creditable amount of individual health insurance, life insurance and pension Acting Assistant Secretary for Import
and life insurance for employees over benefits for each employee; Administration, Department of Commerce.
100 percent of the ‘‘weighted average’’ * * * * * Nikolao I. Pula,
yearly individual health insurance costs 10. Section 303.19(c)(1) is revised to Director for Insular Affairs, Department of
for all federal employees. The cost of read as follows: the Interior.
any life insurance over the $50,000 limit
§ 303.19 Issuance and use of production [FR Doc. 05–13284 Filed 7–5–05; 8:45 am]
for each employee.
(A) Any costs, for the year in which incentive certificates. BILLING CODE 3510–DS–P; 4310–93–P
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