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108th Congress                                            Rept. 108-159
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================



 
               BURMESE FREEDOM AND DEMOCRACY ACT OF 2003

                                _______
                                

 July 11, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Sensenbrenner, from the Committee on Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2330]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2330) to sanction the ruling Burmese military junta, 
to strengthen Burma's democratic forces and support and 
recognize the National League of Democracy as the legitimate 
representative of the Burmese people, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill do pass.
    The amendment adopted by this committee is identical to the 
text reported by the Committee on International Relations shown 
in their report filed June 17, 2003 (Rept. 108-159, Part 1).

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Vote of the Committee............................................     2
Committee Oversight Findings.....................................     2
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     3
Performance Goals and Objectives.................................     6
Constitutional Authority Statement...............................     6
Section-by-Section Analysis and Discussion.......................     6
Changes in Existing Law Made by the Bill, as Reported............     6
Markup Transcript................................................     7

                          Purpose and Summary

    The Committee on the Judiciary received a secondary 
referral of H.R. 2330 to considerthe immigration provisions in 
section 6 of the bill. The purpose of section 6 of H.R. 2330 is to 
expand the current ban prohibiting Burmese leaders from receiving U.S. 
visas. For the purpose and summary of other sections of H.R. 2330, see 
H. Rept. 108-159, Part I, filed by the Committee on International 
Relations, which had the primary referral of the bill.

                Background and Need for the Legislation


                         PROCEDURAL BACKGROUND

    H.R. 2330 was introduced on June 4, 2003, and referred to 
the Committee on International Relations, and in addition to 
the Committees on Ways and Means, Financial Services, and the 
Judiciary, in each case for consideration of such provisions as 
fall within the jurisdiction of the committee concerned. The 
Committee on International Relations reported the bill by voice 
vote on June 12, 2003, and filed its Committee report (H. Rept. 
108-159, Part I) on June 17, 2003.
    The Committees on Ways and Means, Financial Services, and 
the Judiciary were each granted an extension for further 
consideration of such provisions as fall within the 
jurisdiction of the committee concerned ending not later than 
July 11, 2003.

                          NEED FOR LEGISLATION

    Burma is ruled by a military junta that seized power by 
force in 1988 and currently calls itself the State Peace and 
Development Council (SPDC). Although the National League for 
Democracy (NLD) won the majority of National Assembly seats in 
a free and fair election in 1990, the junta nullified the 
results and imprisoned NLD leaders. The military regime has 
committed numerous other human rights abuses, such as large-
scale forced labor and the reported use of rape as a weapon 
against insurgencies by ethnic minorities. Section 6 of H.R. 
2330 would ban current and former leaders of the SPDC from 
obtaining a U.S. visa or entry into the U.S.

                                Hearings

    No hearings were held in the Committee on the Judiciary on 
H.R. 2330.

                        Committee Consideration

    On July 9, 2003, the Committee met in open session and 
ordered favorably reported the bill HR. 2330, with an 
amendment, by voice vote, a quorum being present. The amendment 
consists of the text of the bill as reported by the Committee 
on International Relations.

                         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. 2330.

                      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 section 6 of 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 section 6 of the bill, H.R. 2330, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974:

                                                     July 11, 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. 2330, the Burmese 
Freedom and Democracy Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Annabelle 
Bartsch.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 2330--Burmese Freedom and Democracy Act of 2003

    Summary: H.R. 2330 would ban all imports from Burma until 
the State Peace and Development Council (SPDC), the military 
regime of Burma, has made substantial and measurable progress 
to end violations of human rights, implement a democratic 
government, and meet its obligations under international 
counter-narcotics agreements. Under the bill, the President may 
terminate the restrictions upon the request of a democratically 
elected government in Burma or waive them in the national 
interest. By reducing net imports, and thus reducing federal 
tax receipts from duties on such imports, CBO estimates that 
enacting H.R. 2330 would reduce federal revenues by $2 million 
in 2003, by $60 million over the 2003-2008 period, and by $123 
million over the 2003-2013 period, net of income and payroll 
tax offsets.
    The bill also would require the Secretary of Treasury to 
freeze the assets of members of the ruling party of Burma and 
would require the Secretary of State to deny visas to the same. 
Based on information from those agencies, CBO estimates that 
enacting H.R. 2330 would not significantly affect federal 
spending.
    By banning all importers from Burma and freezing certain 
Burmese funds and assets held by U.S. financial institutions, 
H.R. 2330 would impose private-sector mandates as defined in 
the Unfunded Mandates Reform Act (UMRA). Due to the lack of 
information on the value of lost profits to importers resulting 
from the ban, CBO cannot determine whether the aggregate direct 
cost of the mandates would exceed the annual threshold for 
private-sector mandates established in UMRA ($117 million in 
2003, adjusted annually for inflation) in any of the first five 
years the mandates would be in effect.
    H.R. 2330 contains no intergovernmental mandates as defined 
in UMRA and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2330 is shown in the following table. 
CBO assumes that H.R. 2330 will be enacted by August 1, 2003.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal year, in millions of dollars--
                                                                 ---------------------------------------------------------------------------------------
                                                                   2003    2004    2005    2006    2007    2008    2009    2010    2011    2012    2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 CHANGES IN REVENUES \1\

Estimated revenues..............................................      -2     -11     -11     -12     -12     -12     -12     -12     -13     -13     -13
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ CBO also estimates that enacting H.R. 2330 would have no significant impact on federal spending.

Basis of estimate

            Revenues
    H.R. 2330 would ban all U.S. imports from Burma until the 
President of the United States has determined that certain 
conditions outlined in the bill have been met by the SPDC. The 
President would have the authority to lift or waive the ban 
imposed by H.R. 2330; however, CBO assumes that the President 
would not exercise this authority before 2013. Based on data 
from the U.S. International Trade Commission on recent U.S. 
imports from Burma, information from several government 
agencies, and CBO's most recent forecast of total U.S. imports, 
CBO estimates that enacting H.R. 2330 would reduce federal 
revenues by $2 million in 2003, by $60 million over the 2003-
2008 period, and by $123 million over the 2003-2013 period, net 
of income and payroll tax offsets.
    In recent years, over half of all U.S. imports from Burma 
have been knitted or crocheted clothing and apparel goods. The 
remaining imports include apparel items not knitted or 
crocheted, certain types of fish and crustaceans, goods made of 
wood, certain precious and semiprecious stones and metals, and 
woven fabrics and tapestries. In 2001 and 2002, roughly 80 
percent of duties collected on these imports came from knitted 
and crocheted articles.
    CBO assumes that a portion of the banned imports would be 
replaced with imports from other countries, especially in 
southeast Asia, which face similar duty rates, while the 
remaining portion would be displaced by duty-free goods or not 
replaced at all. Substitution of apparel imports would be 
partially limited because of existing quotas on imports from 
other countries. These quotas on countries in the World Trade 
Organization are set to expire at the end of 2004. CBO assumes, 
even if H.R. 2330 is not enacted, that Burma's share of U.S. 
imports would decrease significantly after that date.
    CBO estimates that over the 2003-2013 period, enacting H.R. 
2330 would decrease the dutiable value of U.S. imports by about 
$1 billion. Assuming an average duty rate of about 16 percent, 
the United States would forgo about $160 million in customs 
duties over the period. This gross revenue loss would be 
partially offset by higher revenues from income and payroll 
taxes.
    The President could remove the ban on imports upon the 
request of a democratically elected government in Burma or he 
could waive them if he determines and notifies Congress that to 
do so is in the national interest. Should the ban be lifted, 
U.S. companies would be allowed to resume importation of goods 
produced, manufactured, grown, or assembled in Burma. It is 
unclear whether or when the President would exercise the 
authority to lift or waive the ban on imports from Burma. If 
such an action were taken during the 2003-2013 period, then the 
impact on federal revenues would be reduced accordingly.
            Federal spending
    The bill also would require the Secretary of Treasury to 
freeze the assets of members of the ruling party of Burma and 
would require the Secretary of State to deny visas to the same. 
Based on information from those two agencies, CBO estimates 
implementing H.R. 2330 would not significantly affect spending 
by those departments.
    The United States provides some assistance to the people of 
Burma, about $7 million a year in grants to nongovernmental 
organizations to support HIV/AIDS prevention and democracy 
programs in Burma. The bill would not affect those programs.
    Estimated impact on the private sector: By banning all 
Burmese imports and freezing certain Burmese assets held by 
U.S. financial institutions, H.R. 2330 would impose private-
sector mandates as defined in UMRA; however, CBO cannot 
determine the aggregate direct cost of the mandates.
    Specifically, the bill would ban all imports from Burma. 
The U.S. International Trade Commission estimates the value of 
U.S. imports from Burma in 2002 at approximately $360 million. 
CBO expects that importers would substitute goods from other 
countries, mostly within the region, to compensate for a 
portion of the trade loss with Burma. For the portion of trade 
loss that is not made up through substitution, importers would 
bear a cost oflost profits. Due to a lack of information on the 
value of lost profits, CBO cannot determine the cost of the mandate.
    In addition, H.R. 2330 would direct the Treasury Department 
to freeze the assets of the Burmese regime held by U.S. 
financial institutions after the institutions report such 
holdings to the Office of Foreign Assets Control. Based on 
information from government sources indicating that an 
insignificant amount of assets would be affected, if any at 
all, CBO expects U.S. financial institutions would incur 
minimal costs as a result of the mandate.
    Estimated impact on state, local, and tribal governments: 
H.R. 2330 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments.
    Previous CBO estimate: On June 19, 2003, CBO transmitted a 
cost estimate for H.R. 2330, the Burmese Freedom and Democracy 
Act of 2003, as reported by the House Committee on 
International Relations on June 17, 2003. The two versions of 
the bill are identical, as are the two cost estimates.
    Estimate prepared by: Federal revenues: Annabelle Bartsch; 
Federal costs: Joseph C. Whitehill; impact on state, local, and 
tribal governments: Melissa Merrell; impact on the private 
sector: Paine Piper/Bach.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis; Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    Section 6 of H.R. 2330 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 
section 6 of this legislation in article I, section 8, of the 
Constitution.

               Section-by-Section Analysis and Discussion

    The following section-by-section analysis addresses section 
6 of the bill on which the Committee on the Judiciary received 
its referral.

Sec. 6. Expansion of visa ban

    Section 6(a) authorizes the President to deny visas and 
entry to the former and present leadership of the State Peace 
and Development Council (SPDC) or the Union Solidarity 
Development Association (USDA), the political arm of the SPDC. 
The President currently has such authority to deny entry to 
Burma's regime leaders under an October 3, 1996, Presidential 
proclamation signed by President Clinton. That proclamation, as 
authorized by section 212(f) of the Immigration and Nationality 
Act, is still in effect and is currently being implemented by 
the Secretary of State pursuant to the proclamation. Neither 
the proclamation nor the Secretary of State's implementation of 
the proclamation would be undermined by section 6(a) of H.R. 
2330. Rather section 6(a) would codify that proclamation's 
policy to ensure that visas for such political leaders continue 
to be barred.
    Section 6(a) also requires the Secretary of State to 
coordinate on a biannual basis with European Union 
representatives to ensure coordination of lists of individuals 
banned from obtaining a European Union visa because of SPDC or 
USDA leadership and those banned from receiving a U.S. visa for 
the same reason. Section 6(b) requires the Secretary of State 
to post on the State Department's web site the names of 
individuals whose entry into the U.S. is banned.

            Changes in Existing Law by the Bill, as Reported

    The bill was referred to this committee for consideration 
of such provisions of the bill and amendment as fall within the 
jurisdiction of this committee pursuant to clause 1(k) of rule 
X of the rules of the House of Representatives. The changes 
made to existing law by the amendment reported by the Committee 
on International Relations are shown in the report filed by 
that committee (H. Rept. 108-159, Part 1). In compliance with 
clause 3(e) of rule XIII of the Rules of the House of 
Representatives, the Committee notes section 6 of H.R. 2330 
makes no changes to existing law.

                           Markup Transcript




                            BUSINESS MEETING

                              ----------                              


                        WEDNESDAY, JULY 9, 2003

                          House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    Chairman Sensenbrenner. Pursuant to notice, I now call up 
the bill H.R. 2330, the Burmese and Freedom and Democracy Act 
of 2003 for purposes of markup and move its favorable 
recommendation to the House. Without the objection, the bill 
will be considered as read, considered as the original text for 
purposes of amendment and open for amendment at any point.
    [H.R. 2330 follows:]
    
    
    Chairman Sensenbrenner. The Chair notes that this bill was 
referred to this committee because of its jurisdiction over 
immigration provisions at Section 6, and amendments should be 
limited to that section. The Chair recognizes the gentleman 
from Indiana, Mr. Hostettler, the Chairman of the Subcommittee 
on Immigration for a brief 5 minutes to explain Section 6, and 
would ask members to be brief because I would like to get this 
bill out of here while a reporting quorum is present and before 
we vote. Gentleman from Indiana.
    Mr. Hostettler. Thank you, Mr. Chairman. Mr. Chairman, H.R. 
2330, the Burmese Freedom and Democracy Act is a bipartisan 
bill with the purpose of sanctioning the ruling Burmese 
military junta in recognizing the National League of Democracy 
as the legitimate representative of the Burmese people. This 
committee has jurisdiction over Section 6 of the bill, as the 
Chairman stated.
    Section 6 or H.R. 2330 authorizes the President to deny 
visas and entry to the former and present leadership of the 
State Peace and Development Council, or SPDC, formerly known as 
the State Law and Order Restoration Council or SLORC, or its 
political arm, the Union Solidarity Development Association, 
otherwise known as USDA. It requires the Secretary of State to 
coordinate on a biannual basis with European Union 
representatives to ensure a coordination of lists of 
individuals banned from obtaining a European visa because of 
SPDC or USDA leadership, and those banned from receiving a U.S. 
visa for the same reason.
    Finally, Section 6 requires the Secretary of State to post 
on the state Department's website the names of individuals 
whose entry into the U.S. is banned. For decades Burma has been 
ruled by a highly authoritarian repressive military regime that 
has operated through the use of arrests detention and 
intimidation of political opponents. The junta has continued to 
prevent the parliament elected in 1990 from convening. Leaders 
and former leaders of such a regime should not be permitted to 
enter the United States.
    I ask committee members to support this section of the bill 
and yield back the balance of my time.
    Ms. Lofgren. Would the gentleman yield?
    Mr. Hostettler. I yield to the gentlelady.
    Mr. Lofgren. For a question. I mean I don't object to what 
we're trying to accomplish here----
    Chairman Sensenbrenner. The gentlewoman from California.
    Ms. Lofgren. Should I move to strike the last word?
    Chairman Sensenbrenner. The gentlewoman's reorganized.
    Ms. Lofgren. I do think, however, that this section is 
superfluous because the President already has the authority to 
deny visas through his Secretary of State. He doesn't need 
additional authority to do that, whereas, you know, it doesn't 
look like we're requiring--perhaps we are requiringthe 
publication of the bad guys' names on the Secretary's website----
    Chairman Sensenbrenner. Will the gentlewoman yield?
    Ms. Lofgren [continuing]. But they have the ability to do 
that without a law.
    Chairman Sensenbrenner. Would the gentlewoman yield? I 
agree with what the gentlewoman has said. However, this bill 
was referred to us on a sequential that expires on Friday. I 
don't see why this Section 6 needs to have any amendments. I 
don't see why it was put in there originally by the Committee 
on International Relations, but because they did put it in 
there and because visas are under our jurisdiction, we have the 
sequential, and I would just suggest that we report this bill 
out and file a committee report and we've done our duty.
    Ms. Lofgren. Reclaiming my time, I'm not going to vote 
against this, but I do think it would be important in the 
committee report to note that the authority provided to the 
President and Secretary of State under Section 6 exists without 
this bill. I don't want to undercut the authority of the 
President and the Secretary of State to make these judgments by 
presuming or setting a precedent that we would need to pass a 
law, and I would make that recommendation.
    Chairman Sensenbrenner. If the gentlewoman will yield 
further, the Chair will direct the staff to put that disclaimer 
within the committee report, that we will file in a timely 
manner.
    Ms. Lofgren. Thank you.
    Chairman Sensenbrenner. Without objection, opening 
statements of other members will be included in the record at 
this point.

              Opening Statement of Congressman Steve King

    Thank you, Chairman Sensenbrenner. Ask anyone what the 
foundation of democracy is and they will tell you the freedom 
to elect your leaders. The people of Burma held elections in 
1990 to remove The State Peace and Development Council (SPDC), 
however, SPDC refused to transfer power to the National League 
for Democracy (NLD) forcing the people of Burma to live under 
13 more years of a corrupt and oppressive regime.
    The United States should not reward the illegitimate 
government of Burma any longer. We must do all we can to ensure 
that the elected National League for Democracy takes control of 
Burma to ensure that the human rights of the Burmese people are 
once again restored.
    I urge you to vote for this bill. Thank you, Chairman 
Sensenbrenner.

    Mr. Watt. Mr. Chairman.
    Chairman Sensenbrenner. Are there amendments?
    Mr. Watt. Mr. Chairman.
    Chairman Sensenbrenner. Gentleman from North Carolina.
    Mr. Watt. I move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Watt. Mr. Chairman. I know the Chairman wants to move 
this bill quickly, and I'm not trying to delay the movement of 
it. I actually want to just call to the attention of the 
Chairman a provision that really is not under the jurisdiction 
of our committee, but in hopes that the Chairman will advise 
the committee that has jurisdiction over this, that there are 
some substantial adverse impacts on North Carolina, and I'm 
sure Mr. Coble will join me in this.
    In Section 3 of the bill, talking about items that are 
grown in Burma, 80 percent of the world's teak is grown in 
Burma. It is an import that the furniture industry in North 
Carolina finds imperative, and the furniture industry in North 
Carolina is now in the process of, seems to be in the process 
of following the same downhill slide that the textile and 
apparel industry in North Carolina followed over the last 10 to 
20 years, which is to say if you look at the amount of 
furniture purchased in this country that was produced elsewhere 
in the world. It has grown from under 10 percent in 1990 to 
over 45 percent in 2002, and because North Carolina is the--was 
the furniture manufacturing capital of the world, that has had 
a substantial impact on our economy and on employment in North 
Carolina, and plants are closing. If we take away the ability 
of furniture manufacturers in North Carolina to use the teak 
wood that is grown in Burma and can't be really grown 
effectively anywhere else, we are going to have an added 
devastating impact.
    So I just hope the Chairman will--and this could really be 
addressed by changing one word in the bill. That word happens 
not to be under our jurisdiction and we can't do anything about 
it here, but I hope the Chairman will help me and Mr. Coble 
deliver that message to whoever the leadership is so that they 
might consider the impact on----
    Chairman Sensenbrenner. If the gentleman will yield, I 
agree with the gentleman's concern, and I certainly would be 
supportive of such an amendment on the floor and also in the 
Rules Committee in making that amendment an order.
    Mr. Watt. I thank the Chairman and I yield back the balance 
of my time.
    Chairman Sensenbrenner. Are there amendments to Section 6 
of the bill?
    Ms. Jackson Lee. Mr. Chairman.
    Chairman Sensenbrenner. Gentlewoman from Texas, Ms. Jackson 
Lee.
    Ms. Jackson Lee. Mr. Chairman, and I did not hear the 
complete statement of the distinguished Chairman of the 
Subcommittee on Immigration and Claims, but I was looking at a 
provision in the legislation that deals with the listing of 
those that the European Union would deny visas to, and it seems 
that this language is asking to coordinate with the State 
Department a list of names as well, requires the Secretary of 
State to post on the State Department's website the names of 
individuals whose entry into the United States is banned.
    I'm trying to determine is there going to be oversight on 
this list? Is this list then to be transferred to the Homeland 
Security? What is the basis of them being banned? What is the 
ultimate results of this gathering of this information? I'm not 
sure if Mr. Hostettler knows about this provision in particular 
dealing with the visas?
    Mr. Hostettler. If the gentlelady will yield?
    Ms. Jackson Lee. I'll be happy to yield.
    Mr. Hostettler. This is, my understanding, an unprecedented 
but necessary requirement that this part individuals who have 
been a part of this regime be known in a more public fashion as 
to being denied entry into the United States.
    Ms. Jackson Lee. So this is just a listing procedure at 
this time?
    Mr. Hostettler. Yes.
    Ms. Jackson Lee. And I thank the--reclaiming my time, one 
of the issues that comes up when you begin to establish lists, 
and certainly I believe that there is great question with the 
leadership in Burma and great concern, is the oversight on the 
list, who's on the list, who's not on the list, and the 
utilization of this list in coordination with the European 
Union, not knowing the basis upon which they list these 
individuals, whether they are listing only government 
officials, whether they are listing activists, whether they're 
listing academicians. And so I would raise a question about 
this provision and would want to look further on it, and may 
ultimately have an amendment on this particular point. I yield 
back.
    Chairman Sensenbrenner. Are there amendments?
    [No response.]
    Chairman Sensenbrenner. There are no amendments. A 
reporting quorum is present. The question is on the motion to 
report the bill, H.R. 2330 favorably. Those in favor will say 
aye.
    Opposed, no.
    The ayes have it. The motion to report favorably is agreed 
to. Without objection, the Chairman is authorized to move to go 
to conference pursuant to House rules. Without objection, the 
staff is directed to make any technical and conforming changes. 
And all members will be given two days as provided by House 
rules in which to submit additional dissenting, supplemental or 
minority views.