H261838; 26 U.S.C. §§ 4461-62; 19 C.F.R. § 24.24; Harbor Maintenance Fee.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H261838 April 23, 2015 OT:RR:BSTC:CCR H261838 KLQ CATEGORY: Carriers Mr. Tom W. Rueter Alaska Maritime Agencies 4341 B Street, Suite 202 Anchorage, AK 99503 RE: H261838; 26 U.S.C. §§ 4461-62; 19 C.F.R. § 24.24; Harbor Maintenance Fee. Dear Mr. Rueter: This is in response to your February 6, 2015 ruling request on behalf of Alaska Maritime Agencies, and subsequent email of April 14, 2015, in which you request a ruling determining whether the drillship, the M/V NOBLE DISCOVERER (“vessel”), is subject to the Harbor Maintenance Fee (“HMF”) pursuant to 26 U.S.C. §§ 4461-62 and 19 C.F.R. § 24.24. Our decision follows. FACTS The following facts are from your ruling request and emails to this office, dated March 13, 2015, March 18, 2015, April 18, 2015 and April 20-21, 2015. The subject foreign-flagged vessel is a light vessel drilling platform. On or about April 23, 2015, the subject vessel will arrive at Honolulu, Hawaii. After Honolulu, the subject vessel’s itinerary is as follows: Seattle, Washington on or about May 15, 2015; Dutch Harbor, Alaska on or about June 24, 2015; Dutch Harbor, Alaska on or about November 15, 2015; Seattle, Washington on or about December 1, 2015; Dutch Harbor, Alaska on or about June 24, 2016; Dutch Harbor, Alaska on or about November 15, 2016; and Seattle, Washington on or about December 1, 2016. When arriving at each port, the subject vessel will be afloat and will operate under its own power with the assistance of coastwise-qualified tugs to facilitate the vessel’s movement to berth or anchor. The subject vessel will operate in the United States and will not be offered for sale. ISSUE Whether the subject vessel is commercial cargo subject to the HMF pursuant to 26 U.S.C. §§ 4461-62 and 19 C.F.R. § 24.24? LAW AND ANALYSIS The statutory authority for the HMF is found under 26 U.S.C. § 4461: (a) General rule. There is hereby imposed a tax on any port use. (b) Amount of tax. The amount of the tax imposed by subsection (a) on any port use shall be an amount equal to 0.125 percent of the value of the commercial cargo involved. (c) Liability and time of imposition of tax. (1) Liability. The tax imposed by subsection (a) shall be paid by-- (A) in the case of cargo entering the United States, the importer, or (B) in any other case, the shipper. (2) Time of imposition. Except as provided by regulations, the tax imposed by subsection (a) shall be imposed at the time of unloading. Pursuant to 26 U.S.C. § 4462, “port use” is defined as, “the loading of commercial cargo on, or the unloading of commercial cargo from, a commercial vessel at a port.” “Commercial cargo” is defined as “any cargo transported on a commercial vessel, including passengers transported for compensation or hire.” The CBP Regulation promulgated under the authority of the statute, 19 C.F.R. § 24.24(a) states in pertinent part, “[c]ommercial cargo loaded on or unloaded from a commercial vessel is subject to a port use fee of 0.125 percent (.00125) of its value if the loading or unloading occurs at a port within the definition of this section, unless exempt under paragraph (c) of this section or one of the special rules in paragraph (d) of this section is applicable.” CBP has consistently held that a vessel that moves under its own volition has not been transported. For instance, in HQ 229963 (June 12, 2003), a foreign-flagged yacht arrived at a U.S. port under its own power. CBP stated that since the yacht entered the port under its own power, it had not been transported as cargo. Consequently, the yacht was not commercial cargo for purposes of 26 U.S.C. § 4462. Moreover, since the yacht entered under its own power, there was no lading or unlading of commercial cargo from a commercial vessel. Therefore, there was no port use. CBP held that the yacht was not subject to the HMF. The facts of the present case are analogous to HQ 229963. The subject vessel will arrive under its own power with the assistance of navigation tugs. Insofar as the vessel will enter under its own power, it will not have been transported as cargo. Since it will not have been transported as cargo, it does not qualify as commercial cargo for purposes of the HMF. Moreover, since the subject vessel will not be laden onto or unladen from a commercial vessel, there is no port use. Therefore, the subject vessel is not subject to the HMF. In HQ H112875 (November 22, 2010) tugboats wet-towed jack-up rigs into and out of the FTZ. CBP found that the jack-up rigs were vessels and stated that the HMF is not assessed on vessels except when the vessel is “commercial cargo because it is transported on another commercial vessel.” CBP further explained that “jack-up rigs…floating in water do not cease to function as a vessel transporting goods simply because they are being wet-towed by tugboats.” In that case, the jack-up rigs were wet-towed as opposed to transported on top of another vessel. Therefore, CBP held that the jack-up rigs were vessels and not commercial cargo and thus, the jack-up rigs were not subject to the HMF. The present matter is analogous to HQ H112875. The subject light vessel drilling platform is a vessel. It will enter all ports under its own power with the assistance of tugs for navigation. It will not enter the ports on another vessel. Therefore, similar to HQ H112875, the subject vessel will maintain its identity as a vessel and will not be considered commercial cargo. Insofar as the subject vessel is not commercial cargo, it is not subject to the HMF. In the present matter, the subject vessel is not commercial cargo insofar as it is a vessel that will move under its own power with the assistance of tugs for navigation. Moreover, there is no port use insofar as the subject vessel will neither be laden onto nor unladen from a commercial vessel. Therefore, the subject vessel is not commercial cargo subject to the HMF. HOLDING The subject vessel is not commercial cargo subject to the HMF pursuant to 26 U.S.C. §§ 4461-62 and 19 C.F.R. § 24.24. Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection