User Fees; U.S. Government Owned Vessels; 19 U.S.C. 58c(a)(1)

HQ 111029 July 27, 1990 VES-5-08-CO:R:P:C 111029 GV CATEGORY: Carriers D. T. Hawthorne, Manager Project Administration GE Government Services AUTEC Project West Palm Beach, Florida 33402-7517 RE: User Fees; U.S. Government Owned Vessels; 19 U.S.C. 58c(a)(1) Dear Mr. Hawthorne: This is in response to your letter dated May 2, 1990, requesting a waiver of the fee of $397 for the arrival of a commercial vessel of 100 net tons or more. Our ruling is set forth below. FACTS: General Electric Government Services (GEGS) currently pays the $397 user fee for U.S. Government owned vessels that are operated by GEGS in support of Contract N61339-87-C-0026. They seek a waiver of this fee by stating that the vessels are not involved in commercial activities. Specifically, the vessels are operated by GEGS on behalf of the U.S. Navy in direct support of the Atlantic Undersea Test and Evaluation Center (AUTEC) located on Andros Island, Bahamas. In addition to their letter of May 2, 1990, GEGS has also submitted documentation from the Department of the Navy, Officer in Charge, Naval Underwater Systems Center Detachment, AUTEC West Palm Beach, Florida, to this effect which lists the vessels under consideration the activities of which include torpedo launch and retrieval, use as test platforms, heavy equipment transportation, etc. ISSUE: Whether U.S. Government owned vessels operated by GEGS for the purpose of supporting an operation of the Department of the Navy are not considered to be commercial vessels so as to be exempted from the $397 user fee assessed pursuant to 19 U.S.C. 58c(a)(1). - 2 - LAW AND ANALYSIS: Title 19, United States Code, section 58c(a)(1), provides for the assessment of a $397 user fee upon the arrival of a commercial vessel of 100 net tons or more. The statute does not provide an exemption for commercial vessels simply because they are operated by a government entity. Customs has determined, however, that a vessel owned by or under the complete control of the United States, not carrying passengers or merchandise in trade, is not a commercial vessel for purposes of 19 U.S.C. 58c(a)(1). Under the above referenced contract, the subject vessels are exempt from the user fees established in 19 U.S.C. 58c(a)(1). They are not commercial vessels for purposes of that statute. Though G.E. personnel remain on board the vessels, the vessels' operation and movements are at the discretion of the U.S. Navy. Consequently, the vessels are under the control of the United States. Furthermore, the documentation submitted indicates that the subject vessels are not carrying passengers or merchandise in trade. Thus, in accord with Customs prior determinations, in the limited fact pattern described above, the vessels under consideration are not commercial vessels as that term is used in 19 U.S.C. 58c(a)(1), and are not required to pay the $397 user fee. HOLDING: U.S. Government owned vessels operated by GEGS for the purpose of supporting an operation of the Department of the Navy are not considered to be commercial vessels as that term is used in 19 U.S.C. 58c(a)(1) and therefore are exempted from the $397 user fee assessed pursuant to that statute. Sincerely, B. James Fritz Chief Carrier Rulings Branch