Archery Revenue Reform and Opportunity for Workers Act

Mr. Speaker, I ask unanimous consent that the Committee on Ways and Means be discharged from further consideration of the bill (H.R. 3652) to amend the Internal Revenue Code of 1986 to modify the taxation of imported archery products, and ask for its immediate consideration in the House.

Mr. Speaker, along with my colleague, Representative Matheson, I am pleased to introduce the Archery Revenue Reform and Opportunity for Workers Act of 2003 (ARROW Act).

Our bill will protect Americans jobs by fixing a mistake in the tax code that allows archery equipment to be imported into the United States without paying the excise tax that American manufacturers pay. Our bill will close this loophole now.

The excise tax on domestically produced arrows is 12.4 percent. The revenue from this excise tax is dedicated to the Pittman-Robertson Aid for Wildlife Restoration Fund that finances the States' wildlife conservation and habitat restoration programs. In 1997, a change in the excise tax inadvertently created a loophole that allows arrows manufactured outside of the United States to be sold in the United States without paying the tax paid by American manufacturers.

Sales of imported arrows and arrow shafts have increased from less than $1 million in 1997 to over $12 million in 2002. By avoiding the excise tax, foreign manufacturers have displaced more than one-third of our domestic production.

The loss of U.S. jobs and the negative impact on domestic small businesses will continue to accelerate, as year-to-date imports through June 30 have increased 35 percent over the same time period in 2002. In addition to the loss of jobs, this loophole is draining funding from the States' conservation and game management programs.

This legislation will close the loophole that allows imported arrows to avoid the excise tax paid by domestic manufacturers. While keeping the current 12.4 percent tax on arrow components, the proposal will impose a tax of 12 percent on the first sale of an arrow assembled from untaxed components. U.S. manufacturers and foreign manufacturers will be treated equally.

Current law also taxes non-hunters, contrary to congressional intent. To relieve non-hunters from the requirement to pay for wildlife management, the legislation would eliminate the current-law tax on bows with draw weights of less than 30 pounds. Those bows are not suitable or, in many States, legal for hunting. To preserve the revenue for the Wildlife Restoration Fund, the bill would retain the current tax on bows that are suitable for hunting.

Finally, the ARROW Act will clarify that broadheads are an accessory taxed at 11 percent rather than as an arrow component taxed at 12.4 percent. This will correct the ambiguity in the 1997 act that led to the misclassification of broadheads.

I urge my colleagues to pass the Archery Revenue Reform and Opportunity for Workers Act today. This bill will save American jobs and protect funding for the Wildlife Restoration Program (the Pittman- Robertson fund) by simplifying administration and compliance with the excise tax and closing the unintended loophole that allows arrows assembled outside the United States to avoid the excise tax imposed on domestic manufacturers.

The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to reconsider was laid on the table.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 3652.