House to Consider FY 2012 DHS/CBP Appropriations Bill on June 1

Consideration of H.R. 2017 Begins June 1, Amendments Allowed

According to the House Majority Leader, the House is scheduled to begin consideration of H.R. 2017 on June 1, 2011.

(On May 31, 2011, the House Rules Committee adopted a rule for consideration of H.R. 2017 which provides one hour of general debate equally divided and allows for amendments.)

Highlights for CBP from Bill and Committee’s Report

The following are highlights of the provisions for CBP in the text of the bill (as introduced) and the Committee’s report¹. (See future issue of ITT for details on the provisions affecting the other DHS agencies, such as TSA, etc.)

C-TPAT and expediting low-risk cargo. The Committee notes that it continues to hear concerns that the promise of expediting lower-risk cargo through the Customs-Trade Partnership Against Terrorism program has not been fully realized. According to H.R. 2017, $45 million would be provided (the same amount requested by the President) for C-TPAT.

FDA, CPSC certified importer program. CBP is directed by the Committee to continue its work with other agencies, such as the Food and Drug Administration and the Consumer Products Safety Commission, to provide the trade community with clear guidelines for what constitutes low-risk shippers and shipments, which could include the concept of a certified importer program.

The Committee notes that it does not suggest that CBP or other agencies eliminate random inspections or reduce inspection of goods due to targeting activities and any new pilot project or program to promote efficient movement of trade must include a rigorous compliance review component, including regular audits. CBP is required to brief the Committee on its efforts no later than December 1, 2011.

Getting ACE “on track” for major drops. H.R. 2017 would provide $334 million for CBP automation modernization funding, a $2.3 million decrease compared with what was appropriated in FY 2011. Of that amount, not less than $140 million would be for the Automated Commercial Environment (ACE).

The Committee stated that it is not sympathetic to excuses for delays in ACE implementation and urges DHS to get ACE on track to complete its major capability drops and provide the necessary features critical to facilitating trade and supporting security requirements for cargo screening and inspection.

H.R. 2017 would require CBP to (i) provide an expenditure plan detailing how it would distribute FY 2012 appropriations to ACE/ITDS, Current Operations Protection and Processing Support (COPPS), TECS modernization, and the Terrorism Prevention Systems Enhancements (TSPE); and (ii) submit a multi-year investment and management plan (to be updated annually).

300 additional CBP officers for ports of entry. H.R. 2017 would provide an increase of $557 million in FY 2012 for CBP salaries and expenses over what was provided in FY 2011. Of this amount, the bill would also provide $20.69 million for an additional 300 CBP officers at new and expanded ports of entry and $2 million for additional canine units at port of entry.

Reducing certain CBP staffing levels. The Committee notes that while it supports targeted staffing increases where a clearly demonstrated need exists--for new and expanded ports of entry as well as for the National Targeting Center-Passenger (NTC-P), overseas programs, and, more recently, outbound operations—the Committee does not believe that CBP has demonstrated that it has fully explored all practicable options for reducing staffing growth in other environments.

Although the Committee is prepared to consider well-documented operational staffing increase proposals in the future, the methodology supporting such proposals, including how the required positions are calculated, must produce more precise requests and must take into consideration potential staffing level reductions or offsets that could be achieved by initiatives such as:

• Automation of port of entry processes- re-engineering port of entry processes to automate more administrative tasks and focus staff on core operational activities, such as fully implementing the Land Border Initiative (LBI) and new automated pedestrian processing procedures;
• Segmenting cargo, travelers by risk - further segmenting travelers and cargo by risk and facilitating the entry of lower risk traffic by expanding and improving the targeting capabilities in ATS for pedestrians, passenger vehicles, trucks, and air and sea passengers;
• Facilitate low-risk traffic- facilitating the entry of lower risk traffic by strengthening and expanding registered traveler programs, including C-TPAT/Free and Secure Trade (FAST) programs; and
• ID technology investments to increase efficiency- identifying areas where technology investments could increase CBP officer efficiency or better utilize available staffing.

The Committee also directs CBP to report to the Committee not later than 120 days after the date of enactment on its allocation of CBP officers, including how CBP can more effectively manage staffing resources across ports of entry to meet rising and falling staffing requirements more efficiently.

(The Committee notes that approximately 37% of CBP officers are funded by COBRA² user fees, which have been below estimates in recent years, given the global economic crisis and the decline in international travel. Furthermore, CBP has not been able to manage fluctuations in fee funding levels through officer attrition due to the low attrition rate also related to the prevailing economic conditions.

While CBP has considered submitting legislative proposals for changes to their fee collections, a thoughtful, thorough approach has not been proposed with a concerted effort to implement changes. Rather, the President’s budget request assumes funds that have not been authorized, leaving the Committee with a shortfall to address or the consequences of cutting CBP’s port of entry operations. As a result, the Committee has reduced the anticipated level of COBRA fee collections and increased the appropriated funds to fill the short-fall.

See ITT’s Online Archives or 12/21/10 mews, 10122120, for BP summary of CBP fact sheet on its user fees in which it states that it is working to consolidate its fees.)

Textile transshipment enforcement. The Committee included $4.75 million, as in previous years, to continue textile transshipment enforcement and directs CBP to ensure that the activities of the Textile and Apparel Policies and Programs Office, specifically seizures, detention, and special operations, are maintained at least at the level of those activities in prior years. The Committee directs CBP to submit a report with the FY 2013 budget on execution of its five-year strategic plan. The report should include information covering enforcement activities; textile production verification team exercises and special operations; numbers of seizures; penalties imposed; and the numbers and types of personnel responsible for enforcing textile laws.

Customs fraud, including China misclassification, circumvention. The Committee directs CBP to submit a report on the extent and frequency of customs fraud, including circumvention of duties and misclassification on entries of imports of goods from China by February 1, 2012. This report should include information covering enforcement activities, numbers of seizures, penalties imposed, the numbers and types of personnel responsible (including interagency collaboration for enforcing laws), and estimated costs to reduce substantially the incidence of illegal transshipments.

Agency involvement in ITDS. The Committee stated that it was pleased to see progress on the International Trade Data System (ITDS) uniform data set; however, the list of participating government agencies (PGAs) remains incomplete, as many agencies with relevant interests and responsibilities for trade data have not yet engaged in ITDS.

The Committee directs CBP to continue to include in its ACE plan a report on progress in implementing ITDS, with regard to the technical features of ITDS as well as the recruitment of all participating government agencies needed for ITDS to achieve the benefits of the aforementioned single trade window'.

Plans to make CSI mostly “virtual’. The Committee emphasizes that it does not support the 44% reduction in CSI proposed by the Administration’s budget, which would have converted CSI from a program with an overseas presence in 58 seaports to one that is primarily U.S.-based, maintaining operations in a select number of yet-to-be named ports of strategic importance.

Where CSI operations would be closed, CBP would instead relied on a virtual' approach, using remote targeting, and possibly reciprocal inspection agreements with foreign governments. The Committee does not support such an approach.

Note that H.R. 2017 would provide $79 million for international cargo screening, including $76 million for the Container Security Initiative (CSI) program and $3.2 million for the Secure Freight Initiative (SFI), to continue operations in Qasim, Pakistan; limited operations in Salalah, Oman, and expand operations to Karachi, Pakistan, if possible with funds provided.

No pilot on alternatives to 100% scanning. The Committee states that it did not include in H.R. 2017 the requested funding for CBP’s proposed pilot projects to assess alternatives for implementing the 100% scanning requirement (until DHS comes forward with a substantive approach to meeting or adapting the 100% scanning requirement), instead applying these resources to partially restore the cut to CSI.

Enhancing automated targeting systems. H.R. 2017 would provide $46 million in H.R. 2017 for automated targeting systems ($15 million above the amount requested by the President), to enhance passenger and cargo targeting efforts. The Committee directs CBP to report to the Committees on Appropriations not later than 90 days after the date of enactment on its planned application of this enhanced automated targeting system funding.

Need for NTC to focus on cargo. H.R. 2017 includes $47 million for the National Targeting Center (NTC), as requested. The Committee is concerned that, despite recent attempted attacks in international air cargo, CBP did not request funds to further secure the international cargo supply chain and has not developed the strategic vision for the NTC-Cargo (NTC-C) that it has for the NTC-Passenger.

CBP is directed to provide a briefing to the Committee on its initiatives to advance the effectiveness of cargo targeting capabilities as well as its vision for the NTC-C not later than 90 days after the date of enactment of this Act.

Outbound operations, report on future plans. The Committee notes that CBP has devoted substantial resources from its base, as well as supplemental funds provided by Congress, for the effort to dismantle the Mexican drug cartels, to conduct outbound inspections along the Southwest border. The Committee encourages CBP to assess the effectiveness of outbound operations considering the costs dedicated to these activities and directs CBP to provide a briefing, no later than November 1, 2011, on its plans for outbound operations, etc.

Replacing, upgrading NII systems, etc. H.R. 2017 includes $149.5 million for Inspection and Detection Technology, as requested. In addition to ongoing operations and maintenance of CBP's inventory of technology systems, this funding will support acquisition of replacement or upgraded systems, to include six large-scale Non-Intrusive Inspection (NII) systems, four large-scale NII systems for new and enhanced ports, and the purchase, testing, and deployment of small-scale NII. The Committee expects CBP to award procurement for these items on a fully competitive basis, with the focus for award being on attaining the performance goals for which technology is to be used.

Management of technology, such as radiation detection. The Committee expresses concern that CBP has not had a robust, steady plan for managing this technology through its lifecycle. The devices that were rapidly deployed in the wake of the 9/11 attacks will soon need to be replaced. As the Advanced Spectroscopic Portals have not met expectations, it is unclear how CBP, with the input of the Domestic Nuclear Detection Office, intends to maintain, if not improve, fielded radiation detection capabilities. Therefore, this bill includes a requirement for a multi-year investment and management plan to be provided at the time of budget submission and updated on an annual basis to fully justify requested funds for this activity as well as project future year requirements and funding levels.

Port of entry infrastructure investment. According to the Committee, largely due to port of entry infrastructure investment through the American Recovery and Reinvestment Act, CBP has made progress on its construction and facility needs. At the same time, CBP’s Construction and Facility Management plans are still maturing. With the submission of the President’s budget request, the bill requires the real property inventory and a plan that includes the full costs of each activity and project proposed and underway in FY 2013.

Border security, including Northern Border security. H.R. 2017 would provide $500 million for border security fencing, infrastructure, and technology, a $74 million decrease from what was appropriated in FY 2011. Due to concerns about the proposed Arizona Border Technology Plan, H.R. 2017 would limit the obligation of $150 million until a detailed expenditure plan is provided to the House Appropriations Committee. The bill also includes $45 million for continued technology investments to address Northern Border security needs.

Inspection, detection technology plan. The bill would require DHS to provide the House and Senate Appropriations Committees with a multi-year investment and management plan for Inspection and Detection Technology.

CBP’s five-year strategic plan. In H.R. 2017, the Committee directs CBP to update its five-year strategic plan, submitting it not later than the date on which the President's budget request is submitted for FY 2013, to enable appropriate oversight of CBP's plans for this important component of border security operations and mission.

¹Although the Appropriations Committee’s report does not have statutory force; departments and agencies are not legally bound by their declarations. It does, however, explain congressional intent and frequently have effect because departments and agencies must justify their budget requests annually to the Appropriations Committees.

²Consolidated Omnibus Budget Reconciliation Act (COBRA), which are used to ensure all carriers, passengers, and their personal effects entering the U.S. are compliant with U.S. customs laws.

(See ITT’s Online Archives or 05/16/11 news, 11051616, for BP summary of House Appropriations Committee’s Homeland Security Subcommittee’s approval of a FY 2012 DHS appropriations bill.

See ITT’s Online Archives or 05/26/11 news, 11052604, for BP announcement that the House Appropriations Committee had approved the FY 2012 DHS appropriations bill.)

H.R. 2017 available here

H. Rept. 112-91 available here