E8-1343. Schedule of Fees for Consular Services, Department of State and Overseas Embassies and Consulates

AGENCY:

Department of State.

ACTION:

Interim final rule.

SUMMARY:

The Department of State is revising the Schedule of Fees for Consular Services to reflect an increase in the surcharge related to consular services in support of enhanced border security and a reduction in the execution fee for the passport book. The Secretary of State is authorized to collect the border security surcharge by the Consolidated Appropriations Act, 2005 (Pub. L. 108-447). In 2007, Congress authorized the Secretary of State to administratively amend the surcharge amount in the Department of State Authorities Act of 2006 (Pub. L. 109-472). The Secretary is also authorized to set and collect a fee for executing passport applications by 22 U.S.C. 214.

DATES:

Effective date: This interim final rule is effective February 1, 2008.

Comment date: The Department of State will accept written comments from interested persons up to March 31, 2008. Comments received before the end of the comment period will be addressed in a final rule.

ADDRESSES:

Interested parties may submit comments by any of the following methods. All comments must include the Regulatory Identification Number (RIN) that appears in the heading of this document.

• E-mail: [e-mail]. You must include the Regulatory Identification Number (RIN) in the subject line of your message.
• Mail: (paper, disk, or CD-ROM submissions): An original and three copies of comments should be sent to: Christine L. Grauer, Office of Passport Services, Legal Affairs Division, Planning and Advisory Services, 2100 Pennsylvania Ave., NW., 3rd Floor, Washington, DC 20037.
• Fax: [phone]. You must include the Regulatory Identification Number (RIN) in the subject line of your message.

Persons with access to the internet may also view this notice and provide comments by going to the regulations.gov Web site at: http://www.regulations.gov/​index.cfm.

FOR FURTHER INFORMATION CONTACT:

For passport issuance policy: Susan Bozinko, Division Chief, Office of Passport Services, Legal Affairs Division, 2100 Pennsylvania Ave., NW., 3rd Floor, Washington, DC 20037. Telephone [phone]. E-mail: [e-mail]. For consular fee setting policy: Tracy Henderson, Director of the Budget, Bureau of Consular Affairs, U.S. Department of State, Suite H1004, 2401 E St., NW., Washington, DC 20520, telephone [phone] or by e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Amendment to the Schedule of Fees for Consular Services

As discussed below, this change in the schedule of fees will reflect the proposed passport book surcharge increase, as well as a reduction in the execution fee for the passport book.

Amendment to Passport Book Fees

Border Security Surcharge

Due to increased security concerns following the events of September 11th, the Department of State has focused upon improved security, particularly in relation to our nation's borders. In 2004, Congress authorized the Secretary of State to collect a surcharge related to consular services in support of enhanced border security. (Pub. L. 108-447, Div. B, Title IV, 118 Stat. 2896 (2004), 8 U.S.C. 1714). The law set the initial border security surcharge at $12.00 because that was the estimated cost of providing consular services in support of enhanced border security at that time.

In 2007, Congress provided the Secretary of State with the authority to administratively amend the border security surcharge. Department of State Authorities Act of 2006, Public Law 109-472, section 6, 120 Stat. 3554 (2007) (codified at 8 U.S.C. 1714 note). Congress included four requirements for such amendments:

(1) The amounts of the surcharges shall be reasonably related to the costs of providing services in connection with the activity or item for which the surcharges are charged.

(2) The aggregate amount of surcharges collected may not exceed the aggregate amount obligated and expended for the costs related to consular services in support of enhanced border security incurred in connection with the activity or item for which the surcharges are charged.

(3) A surcharge may not be collected except to the extent the surcharge will be obligated and expended to pay the costs related to consular services in support of enhanced border security incurred in connection with the activity or item for which the surcharge is charged.

(4) A surcharge shall be available for obligation and expenditure only to pay the costs related to consular services in support of enhanced border security incurred in providing services in connection with the activity or item for which the surcharge is charged.

The proposed $8.00 increase in the surcharge falls within the above parameters set by Congress.

The $8.00 increase is reasonably related to the costs of providing consular services in support of enhanced border security because it represents the cost of providing passport books with upgraded security features resulting from the State Department's enhanced border security programs implemented since 2005. New passport book security measures, including the introduction of an electronic passport and the use of traceable priority mail delivery to applicants to prevent passport loss or theft, have increased the security-related passport costs and $12.00 is no longer sufficient to cover such costs.

First, due to these new security measures, the passport book and mailing now costs the Department $19.40. Each passport book costs $14.80, nearly triple the previous cost, and priority mail costs $4.60 as opposed to the original 60-cent standard first-class mail rate, for a total cost of $19.40. In order to avoid a loss, the Department is rounding up the security surcharge to $20. Thus, the Department is raising the security surcharge by a total of $8.00 at the present time.

Even taking this rounding into account, the total amount of the surcharge collected will not exceed the aggregate amount obligated and expended for costs related to consular services in support of enhanced border security incurred in connection with passport services, nor will it exceed the total amount obligated and expended for passport books and mailing. When the Department initially began collecting the security surcharge in March 2005, the amounts collected were more than sufficient to fund costs. Nevertheless, each fiscal year, the Department expended the majority of its passport book security surcharge collections, leaving only a minimal amount to carry over into the new fiscal year for operating expenses on October 1.^[1] Because of the substantial increase in costs caused by the introduction of the electronic passport book and the use of priority mailing, these costs now significantly exceed the amounts collected through the security surcharge. Thus, the amounts now collected through the security surcharge do not fully cover the costs for passport books and secure mail and other consular fees are used to fund the full cost of the passport book and priority mailing. This demonstrates the necessity of raising the passport book security surcharge at this time.

Third, the surcharge is only collected to the extent that it is obligated and expended to pay the costs associated with enhanced border security. These funds are maintained in a separate account—“Passport Security Surcharge”—and are used only for consular functions supporting enhanced border security.

Fourth, all of the surcharge funds are obligated and expended only to pay costs related to consular services in support of enhanced border security. As stated above, the Department has established a separate account for monies collected through the border security surcharge and ensures, and will continue to ensure, that such monies are expended only to pay the related border security enhancement costs. The financial plan for the Border Security Program exclusively uses the revenue received through the passport book security surcharge to pay for the production and mailing costs of the new electronic passport books. The passport book security surcharge is not used to support any other activities.

It is important that the Department of State increase the security surcharge by $8.00 to $20.00. The Department of State considers the enactment of this rule a matter of the utmost importance to ensure the availability of funds necessary to support consular services related to enhanced border security throughout our nation.

Execution Fee

The Department is also reducing the execution fee for the passport book from $30.00 to $25.00, as proposed in its Notice of Proposed Rulemaking (NPRM) published on October 17, 2006 at 71 FR 60928. As the Department explained in the NPRM, the $25.00 execution fee for passport applications is based on an internal review of the Department's cost of service, along with information from the United States Postal Service. The $25.00 execution fee has already been implemented for the passport card through the Passport Card Rule published on December 31, 2007. This rule completes the transition to the $25.00 execution fee for passport card and passport book applications by applying the lower fee for the passport book.

The passport book security surcharge and reduction of the execution fee will take effect at the same time the new passport card fees become effective so that the Department can administratively implement all passport fee changes at the same time.

The new fees for the passport book are as follows:

	Current fees	New fees
Passport Book Services:
(a) Application fee for applicants age 16 or over (including renewals) [Adult Passport Book]	$55	$55
(b) Application fee for applicants under age 16 [Minor Passport Book]	40	40
(c) Passport Book execution fee (required for first time applicants and others who must apply in person)	30	25
(d) Passport Book Security Surcharge (enhanced border security fee)	12	20
Total First Time—Adult	97	100
Total “Renewal”—Adult	67	75
Total Child	82	85

Regulatory Findings

Administrative Procedure Act

The Department is publishing this rule as an interim final rule, with a 60-day provision for post-promulgation comments and with an effective date less than 30 days from the date of publication, based on the “good cause” exceptions set forth at 5 U.S.C. 553(b)(3)(B) and 553(d)(3). Delaying implementation of this rule would be contrary to the public interest because the rule is necessary in order to continue to fund consular services in support of enhanced border security. This rule constitutes an integral component of several changes to the Department's regulations taking place between January 1 and February 1, 2008 as part of the Department's plans to increase border security in several key areas. Failure to increase the border security surcharge on February 1 would jeopardize the Department's ability to fund consular services in support of enhanced border security, and would undermine the integrated implementation of other security-related initiatives designed to go into effect during the same time period. Moreover, delaying implementation of the $25.00 execution fee for the passport book until after February 1 would create a disparity between the fee charged for the same service for the passport book and the passport card.

Regulatory Flexibility Act/Executive Order 13272: Small Business

The Department of State, in accordance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) and Executive Order 13272, section 3(b), has evaluated the effects of this proposed action on small entities. The Department has determined and hereby certifies that this rule would not have a significant impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995 (UFMA), Public Law 104-4; 109 Stat. 48; 2 U.S.C. 1532, generally requires agencies to prepare a statement before proposing any rule that may result in an annual expenditure of $100 million or more by State, local, or tribal governments, or by the private sector. This rule does not result in any expenditure by State, local or tribal governments, nor will it significantly or uniquely affect small governments. The effects on the private sector are discussed below in connection with the economic analysis required under Executive Order 12866.

The Small Business Regulatory Enforcement Fairness Act of 1996

This rule is a major rule as defined by 5 U.S.C. 804 for purposes of congressional review of agency rulemaking under the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121. A copy of the rule, along with a concise general statement relating to the rule and its effective date, are being provided to each House of Congress and the Comptroller General as required by 5 U.S.C. 801. Pursuant to 5 U.S.C. 808, this interim final rule will take effect on February 1, 2008.

Executive Order 12866: Regulatory Review

This rule is considered by the Department of State to be an economically significant regulatory action under Executive Order 12866, section 3(f), Regulatory Planning and Review. The surcharge increase is based on the Department's costs and projected volumes that were available at the time this rule was drafted, and the rule has been reviewed by the Office of Management and Budget.

The implementation of this rule will result in a net increase of $3.00 per application in the cost of a passport book when execution of the passport book application is required. For those renewal applications that do not require execution it will result in an $8 increase. Although the economic impact of the rule on any given individual will be relatively minor, it will provide the Department with an additional $232 million in FY 2008 in annual fee revenue, based on a projected annual volume of 29 million applications for passport books, over the fee revenue that would be collected through the current security surcharge. This increase in revenue will be used to fund consular services in support of enhanced border security, as required by 8 U.S.C. 1714 note. The increased revenue will be used for the purchase of blank passport books and priority mailing for completed passport books. If the Department does not adjust the security surcharge to recover the cost of the books and priority mailing, its ability to fund these and other consular services in support of enhanced border security will be compromised, and the Department will be forced to continue to divert funds from other consular fees in order to meet the shortfall. This diversion, in turn, will undermine the Department's ability to deliver the high-quality consular services the public has come to rely on from it.

The Department is concerned with the impact on individual applicants of any rise in the overall cost of the passport book, and carefully analyzed whether it would be possible to keep the security surcharge below the Department's actual cost for passport book purchasing and mailing. It determined, however, that a fee amount that did not meet these costs was not possible given the amount of funding required for the Department's consular services in support of enhanced border security. Although this rule will cause a modest increase in the total cost of a passport book for the individual applicant, the increased cost of the passport book over its 10-year lifetime will be minimal. An increase of $3.00 or, for renewals, $8.00, in the cost of a passport book with a validity period of 10 years corresponds to an increased cost of either thirty cents or eighty cents per year for the life of the passport book. The Department does not anticipate that this de minimis increase in the lifetime cost of a passport book will impose an undue burden on individual passport book applicants, or that it will have an impact on application volumes or any other public behavior. Public demand for the passport book has been rising over the past several years and is expected to continue to rise as individuals increasingly come to regard the passport book as a valuable identity document.

This rule will also provide distinct benefits that cannot be quantified monetarily. As OMB Circular A-4 states, “It will not always be possible to express in monetary units all of the important benefits and costs” of a rule. A vital, non-quantifiable benefit of this interim final rule is that it will enable the Department to advance its goal of enhancing border security while simultaneously investing in infrastructure and other developments needed to meet projected levels of passport book demand in FY 2008 and beyond. By supplying the funds to purchase passport books and priority mailing, the security surcharge will significantly enhance the nation's border security.

The passport book costs three times the previous passport book for a reason. It is one the world's most secure travel documents. It contains an embedded chip with coding that will prevent digital data from being altered or removed, as well as a unique ID number for the chip. In addition, the electronic passport book uses a form of Public Key Infrastructure (PKI) that will permit digital signatures, thus protecting the data from tampering. These features make it much more difficult for individuals to engage in the fraudulent use of an electronic passport book. Likewise, the use of priority mail makes it possible for both the Department and the legitimate recipient to track the electronic passport book through the mailing process, making it easier to prevent and detect any loss or theft of the book.

At the same time, because it will fully fund the cost of blank passport books and priority mailing, the increased surcharge will permit the Department to maximize the efficiency of its operations. As OMB Circular A-4 explains, “[a] regulation may be appropriate when you have a clearly identified measure that can make government operate more efficiently.” By ensuring that the base cost of each passport book and priority mailing is funded through the surcharge, the rule allows the Department to more effectively plan for what is projected to be a record level of passport book demand, and to determine in advance how to best allocate the Department's other available resources so as to provide efficient and high-quality consular services to the American public. Specifically, the rule will permit the Department to use other funds to provide the infrastructure and staffing needed to meet the projected demand for passport books over the next fiscal year and beyond. This will enable both the Department and the public to avoid the inefficient use of resources that arises when infrastructure and staffing are insufficient to meet demand. This, along with enhanced border security through the use of the passport book and priority mailing, is a tangible and noticeable benefit. Thus, the benefits of this rule exceed its costs.

Executive Order 13132: Federalism

This regulation would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and Executive Order No. 13132 is therefore not applicable.

Executive Order 12988: Civil Justice Reform

The Department has reviewed this regulation in light of sections 3(a) and 3(b)(2) of Executive Order No. 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and to reduce burden.

National Environmental Policy Act

The Department has analyzed this regulation for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that it would not have any effect on the quality of the environment.

The Paperwork Reduction Act of 1995

This proposed rule would not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

List of Subjects in 22 CFR Part 22

• Passports and visas

Accordingly, for the reasons set forth above, 22 CFR part 22 is amended as follows:

PART 22—SCHEDULE OF FEES FOR CONSULAR SERVICES—DEPARTMENT OF STATE AND FOREIGN SERVICE

1. The authority citation for part 22 is revised to read as follows:

Authority: 8 U.S.C. 1153 note, 1351, 1351 note; 10 U.S.C. 2602(c); 22 U.S.C. 214, 2504(a), 4201, 4206, 4215, 4219; 31 U.S.C. 9701; Pub. L. 105-277, 112 Stat. 2681 et seq.; Pub. L. No. 108-447, 118 Stat. 2809 et seq.; E.O. 10718, 22 FR 4632, 3 CFR, 1954-1958 Comp., p. 382; E.O. 11295, 31 FR 10603, 3 CFR, 1966-1970 Comp., p. 570, Pub. L. 109-167, January 10, 2006, 119 Stat. 3578; Pub. L. 109-472, section 6, 120 Stat. 3554 (2007).

2. Section 22.1 is amended in the table by revising entries 1 and 2 under the heading “Passport and Citizenship Services” to read as follows:

§ 22.1

Schedule of fees.

The following table sets forth the U.S. Department of State's Schedule of Fees for Consular Services:

 Schedule of Fees for Consular Services

Item No.	Fee
Passport and Citizenship Services
1. Passport Book Execution: Required for first-time applicants and others who must apply in person [01—Passport Book Execution]	$25.
2. Passport Book Application Services for:
(a) Applicants age 16 or over (including renewals) [02—Adult Passport Book]	$55.
(b) Applicants under age 16 [03—Minor Passport Book]	$40.
(c) Passport Book amendments (extension of validity, name change, etc.) 04—Amendment]	No fee.
(d) Passport Book security surcharge (enhanced border security fee) [05—Security Surcharge]	$20.

* * * * *

Dated: January 22, 2008.

Maura Harty,

Assistant Secretary of State for Consular Affairs, Department of State.

Footnotes

1.  Since these funds are designated as no-year funds which do not expire at the end of a fiscal year, they may be used in the following year, but only to the extent that they are expended to cover enhanced border security costs.