HQ 113215: Harbor Maintenance Fee; Exemption; 26 U.S.C. 4461, 4462

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 113215

                       September 16, 1994

VES-5-CO:R:IT:C 113215 GEV

CATEGORY:  Carriers

Stephen Murchake
Tax Manager
Steuart Petroleum Company
4646 Fortieth Street, N.W.
Washington, 20016

RE:  Harbor Maintenance Fee; Exemption; 26 U.S.C.    4461, 4462

Dear Mr. Murchake:

     This is in response to your letter dated August 30, 1994,
requesting a ruling that certain jet fuel transported by your
company be exempted from the harbor maintenance fee.  Our ruling
on this matter is set forth below.

FACTS:

     Steuart Petroleum Company ("Steuart") has contracted with the
Defense Fuel Supply Center ("DFSC") for the shipment of JP-5 jet
fuel owned by the Defense Logistics Agency ("DLA").  Upon receipt
of the fuel from Baton Rouge, Louisiana via pipeline at its
terminal in Cockpit Point, Virginia, Steuart will transport it by
barge to the following locations:  Piney Point Industries,
Washington, D.C.; Standard Transpipe, Virginia Beach, Va.; DFSP
Norfolk, Craney Island and Yorktown, Va.; and the Naval Air Station
at Patuxent River, Md.  A copy of the aforementioned contract,
effective May 13, 1981, was enclosed in the requesting letter.

     The particular jet fuel in question (JP-5) is a blend of
kerosene and gasoline used exclusively in military aircraft.  This
is in contrast to JP-1 which is pure kerosene and used in
commercial aviation.  Furthermore, Steuart is licensed for all
products except for aviation fuels for IRS purposes and therefore
cannot trade in JP-5 jet fuel.

ISSUE:

     Whether JP-5 jet fuel owned by the Defense Logistics Agency
is exempt from the harbor maintenance fee pursuant to 
  24.24(c)(7), Customs Regulations (19 CFR   24.24(c)(7)).

                              - 2 -

LAW AND ANALYSIS:

     Title 26, United States Code,    4461 and 4462 provide for
the imposition of the harbor maintenance fee, including special
rules regarding its administration.  The applicable regulatory
authority promulgated pursuant to these statutes is found in 
  24.24, Customs Regulations (19 CFR   24.24).  Specifically, 
  24.24(a) provides in pertinent part:

          "Commercial 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
          exempted under paragraph (c) of this section..."
          (emphasis added)

     Included among the above-referenced exemptions is 
  24.24(c)(7) which provides that the harbor maintenance fee does
not apply to, "Cargo or vessels of the U.S. or any agency or
instrumentality of the U.S."  (See also 26 U.S.C.   4462(e))
 
     In regard to the JP-5 jet fuel under consideration, it is
apparent that it is cargo of a U.S. agency (DLA).  Accordingly, it
is exempt from the harbor maintenance fee pursuant to 
  24.24(c)(7).

HOLDING:

     The JP-5 jet fuel under consideration which is owned by the
Defense Logistics Agency is exempt from the harbor maintenance fee
pursuant to 19 CFR   24.24(c)(7).

                              Sincerely,




                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch