06-3867. Fees for Certain Services

AGENCY:

Customs and Border Protection, Homeland Security; Treasury.

ACTION:

Proposed rule.

SUMMARY:

This document proposes to amend the rules dealing with customs financial and accounting procedures by revising the fees charged for certain customs inspectional services under section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. These revisions propose to exercise authority provided under recent changes in the pertinent statutory provisions.

DATES:

Written comments must be received by May 24, 2006.

ADDRESSES:

You may submit comments, identified by docket number, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments via docket number USCBP-2006-0035.
• Mail: Trade and Commercial Regulations Branch, Office of Regulations and Rulings, Bureau of Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229.

Instructions: All submissions received must include the agency name and docket number for this rulemaking. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document.

Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov. Submitted comments may also be inspected during the regular business days between the hours of 9 a.m. and 4:30 p.m. at the Office of Regulations and Rulings, Bureau of Customs and Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC. Arrangements to inspect submitted comments should be made in advance by calling Mr. Joseph Clark at [phone].

FOR FURTHER INFORMATION CONTACT:

For information concerning user fee policy and rates, contact Mr. Jerry Petty, Director, Cost Management Division, 1300 Pennsylvania Avenue, NW., Room 4.5A, Washington, DC 20229. Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Public Participation

Interested persons are invited to participate in this rule-making by submitting written data, views, or arguments on all aspects of the proposed rule. The Bureau of Customs and Border Protection (CBP) also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposed rule. If appropriate to a specific comment, the commenter should reference the specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change.

Background

CBP collects fees to pay for the costs incurred in providing customs services in connection with certain activities under the authority of section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended, codified at section 19 U.S.C. 58c.

On October 22, 2004, the President signed the American Jobs Creation Act of 2004 (Pub. L. 108-357). Section 892 of the American Jobs Creation Act amended 19 U.S.C. 58c to renew the fees provided under COBRA, which would have otherwise expired March 1, 2005, and to allow the Secretary of the Treasury to increase such fees by an amount not to exceed 10 percent in the period beginning fiscal year 2006 through the period for which fees are authorized by law. It is noted that the law specifically mentions the Secretary of the Treasury, even though CBP is now a component of the Department of Homeland Security. Regulations concerning user fees, among other customs revenue functions, were retained by the Secretary of the Treasury pursuant to Treasury Department Order No. 100-16.

In accordance with the current statutory provisions, CBP is proposing to amend the regulations by increasing the fees for customs services provided in connection with (1) the arrival of certain commercial vessels, commercial trucks, railroad cars, private aircraft and private vessels, passengers aboard commercial aircraft and commercial vessels, and barges or other bulk carrier arrivals, (2) each item of dutiable mail for which a customs officer prepares documentation, and (3) annual customs brokers permits.

CBP is proposing to increase the fees by the amounts authorized so that they more accurately reflect the actual costs of providing the services for which they are charged. None of the user fees being raised in this package have been adjusted since their implementation in 1986. However, the costs incurred by CBP in performing certain customs inspection services have continued to grow because of higher volumes, greater varieties of cargo and increased security concerns which require inspections of individuals and conveyances entering the United States. As a result, CBP currently collects COBRA fees covering only thirty-two percent of the costs incurred by the agency. With this proposed increase, we estimate COBRA fees will generate an additional $26 million annually. Approximately 84 percent of these fees come from individual travelers, which are categorized as individual user fees. As such, the impact on business will be minimal.

It must be noted that the proposed fee changes would only apply to customs inspection fees charged by CBP under COBRA and do not impact the administration of any other user fees charged by CBP. Certain user fees, by statute, have annual caps that were not included in the legislation authorizing these increases and, as such, the amount of the annual caps remain unchanged.

Discussion of Changes

Following is a summary of the user fees affected and a description of customs services each fee covers.

Commercial Vessel User Fee (Vessel of 100 Net Tons or More)

CBP inspects commercial vessels of 100 net tons or more arriving at ports of entry in the customs territory of the United States. Vessel owners or operators pay a user fee for each arrival, up to a calendar year maximum amount.

The current CBP user fee for each commercial vessel arrival is $397 and a calendar year maximum of $5,955. The current fee became effective in 1985 and has not been adjusted prior to this rule. The user fee is proposed to be raised to $437 per arrival while retaining the maximum of $5,955 each calendar year.

User Fees for Commercial Trucks

CBP inspects commercial trucks arriving at all land ports in the customs territory of the United States. The United States Department of Agriculture (USDA) also assesses a commercial truck user fee for arrivals at certain land ports.

Commercial truck owners or operators can elect to pay a per arrival fee or pay a fee to cover the entire calendar year. The annual payment covers an unlimited number of entries during the calendar year. Upon payment of the annual fee, which includes both CBP and USDA user fees, the truck owner or operator receives a transponder to place on the truck windshield. This indicates that both the CBP and USDA user fees for the truck have been paid for that calendar year.

The current CBP commercial truck user fee is $5.00 for each arrival and $100 for the annual fee. The current fee became effective in 1985. This document proposes to raise the CBP user fee to $5.50 for each arrival and $100 for the calendar year fee.

An electronic transponder recently replaced the paper decal formerly used. Questions about the transponder should be directed to “Decal” Inquiries, National Finance Center, [phone].

Railroad Car Passenger/Freight User Fee and Decal

CBP inspects railroad cars, carrying passengers or commercial freight, arriving at land ports in the customs territory of the United States. However, CBP does not assess a fee on empty railroad cars. There is a calendar year maximum that applies to railroad cars and a decal may be purchased for the entire calendar year.

The current user fee is $7.50 for the arrival of each railroad car carrying passengers or commercial freight and $100 for a decal that covers the calendar year. The current fee became effective in 1986. The fee is proposed to be raised to $8.25 for the arrival of each railroad car carrying passengers or commercial freight and to $100 for a decal for the calendar year.

Private Aircraft and Private Vessel Decal Fees

CBP inspects private aircraft and private vessels arriving in the customs territory of the United States. Owners and operators of both private aircraft and private vessels are required to purchase a decal each calendar year.

Those parties currently pay $25 for all arrivals made during a calendar year by a private vessel or aircraft. The current fee became effective in 1985. This document proposes to raise the decal fee to $27.50 for all arrivals made during a calendar year by a private vessel or aircraft.

User Fee Passenger Aboard a Commercial Aircraft

CBP inspects commercial airline passengers arriving at airports in the customs territory of the United States. Millions of travelers pass through U.S. airports daily. Our overall goal, keeping in mind airport security, is a timely, seamless inspection process that is integrated with the clearance processes of other Federal agencies with inspection responsibilities. Our joint goal is to enhance security and improve enforcement and regulatory processes in order that international air passengers are cleared through the entire Federal inspection process as quickly as possible without jeopardizing our security requirements.

Currently, the user fee for international airline passenger clearance is $5.00 per passenger. The fee is proposed to be raised to $5.50 per passenger.

User Fee Passenger Aboard a Commercial Vessel (Non-Exempt)

CBP inspects commercial vessel passengers arriving at ports in the customs territory of the United States. Our overall goal, keeping in mind port security, is a timely, seamless inspection process that is integrated with the clearance processes of other Federal agencies with inspection responsibilities. Our joint goal is to enhance security and improve enforcement and regulatory processes in order that commercial vessel passengers are cleared through the entire Federal inspection process as quickly as possible without jeopardizing our security requirements.

Currently, the user fee for commercial vessel passenger clearance is $5.00 per passenger. The fee is proposed to be increased to $5.50 per passenger.

Passenger Commercial Vessel User Fee (Canada, Mexico, Territory or Possession of the U.S., or Adjacent Island as Defined in 8 U.S.C. 1101(b)(5))

CBP inspects commercial vessel passengers arriving at ports in the customs territory of the United States from Canada, Mexico, territory or possession of the U.S., or adjacent island as defined in the aforementioned statute.

Currently, the user fee for commercial vessel passenger processing relating to the above locations is $1.75 per passenger. The current fee became effective in 1999. The fee is proposed to be increased to $1.93 per passenger.

Dutiable Mail Entries User Fee

All international mail is subject to inspection by CBP; however, we assess a user fee only on packages and/or mail containing dutiable merchandise.

Currently, the user fee for dutiable mail is $5.00 per item. The current fee became effective in 1985. The fee is proposed to be raised to $5.50 per item.

Customs Broker Permits

Brokers are required to pay an annual fee to maintain their license for customs purposes. The fees are applicable for each district permit and each national permit held by an individual, partnership, association, or corporation. Currently, the user fee for a broker permit is $125.00 per permit. The current fee became effective in 1985.

The fee is proposed to be raised to $138.00 per permit.

Barges and Other Bulk Carriers (From Canada or Mexico)

CBP inspects barges and other bulk carriers from Canada and Mexico. Currently, the user fee for barge and bulk carrier inspection is $100 per arrival and a calendar year maximum of $1,500. The current fee became effective in 1986. The fee is proposed to be raised to $110 per arrival and a calendar year maximum of $1,500.

New Fee Structure

Table 1 indicates the customs inspection user fees currently in effect and the proposed user fee rates.

Table 1.—Summary of New Fee Rates

Customs services	Current fees/ annual cap	Proposed fees
Commercial Vessels	$397.00/$5,955	$437.00/$5,955
Commercial Trucks	$5.00/$100.00	$5.50/$100.00
Railroad Cars	$7.50/$100.00	$8.25/$100.00
Private Aircraft (Decal)	$25.00	$27.50
Private Vessel (Decal)	$25.00	$27.50
Commercial Aircraft Passenger	$5.00	$5.50
Commercial Vessel Passenger (Non-Exempt)	$5.00	$5.50
Commercial Vessel Passenger	$1.75	$1.93
Dutiable Mail	$5.00	$5.50
Broker Permit	$125.00	$138.00
Barges and other bulk carriers	$100.00/$1,500	$110.00/$1,500

Standard for Setting Fees

As noted above, Section 892 of the American Jobs Creation Act specifically gives the Secretary of the Treasury the authority to increase the COBRA fees by an amount not to exceed 10 percent in the period beginning fiscal year 2006 through the period for which fees are authorized by law. In addition, this provision requires that the amounts of fees charged (a) be reasonably related to the costs of providing customs services in connection with the activity or item for which the fee is charged, (b) may not exceed, in the aggregate, the amounts paid in that fiscal year for the costs incurred in providing customs services in connection with the activity or item for which the fee is charged, and (c) may not be collected except to the extent such fee will be expended to pay the costs incurred in providing customs services in connection with the activity or item for which the fee is charged.

Accordingly, CBP has compared the amounts of user fees charged and the corresponding costs incurred in providing customs services in connection with the activity or item for which the fee is charged to ensure that the fees accurately reflect the actual costs incurred in providing each service.

The fees are proposed to be increased by the amounts necessary to align them with the costs incurred by CBP in performing such services, subject to the 10 percent increase limit set by law.

Table 2 shows the collections received and obligations incurred by CBP, in Fiscal Year 2004, in performing customs inspectional services.

Table 2.—Summary of Fee Collections and Obligations

Customs services	Fiscal year 2004 collection by type	Fiscal year 2004 obligation by type
Commercial Vessels	$18,915,411	$87,816,021
Commercial Trucks	18,576,419	224,047,446
Railroad Cars	7,737,910	27,052,069
Private Aircraft	755,390	32,908,142
Private Vessel	729,678	5,934,279
Commercial Aircraft Passenger	236,939,037	494,340,066
Commercial Vessel Passenger (Non-Exempt)	1,475,810	8,409,194
Commercial Vessel Passenger	12,431,417	13,276,642
Dutiable Mail	344,510	49,038,824
Broker Permit	494,170	10,858,344
Barges and Other Bulk Carriers*	451,475	1,271,805
* Barge/Bulk Carrier obligations for Fiscal Year 2002.

The Regulatory Flexibility Act

Based on the supplementary information set forth in the preceding section and as illustrated in Table 2 above, this proposed rule generally affects individuals and large commercial carriers. The proposed increase, if adopted, would only increase fees by 10 percent over the amounts currently paid by users of the customs services for which each fee is charged. The American Jobs Creation Act specifically provides that the Secretary of the Treasury shall charge fees that are reasonably related to these activities. Accordingly, CBP certifies that this proposed rule will not have a significant impact on a substantial number of small entities because the majority of fees will come from individual travelers into the United States. Therefore, it is not subject to the analysis provisions of the Regulatory Flexibility Act, as amended (5 U.S.C. 601 et seq.).

Executive Order 12866

For the same reasons stated above, the proposed amendments do not meet the criteria for a “significant regulatory action” as specified in E.O. 12866. Accordingly, a regulatory impact analysis is not required thereunder.

Signing Authority

This document is being issued in accordance with § 0.1(a) of Chapter I of Title 19, Code of Federal Regulations (19 CFR 0.1) pertaining to the exercise of authority to approve regulations in 19 CFR chapter I.

List of Subjects

19 CFR Part 24

• Accounting
• Claims
• Customs duties and inspection
• Fees
• Financial and accounting procedures
• Imports
• Taxes
• User fees

19 CFR Part 111

• Administrative practice and procedure
• Brokers
• Customs duties and inspection
• Imports
• Licensing

Proposed Amendments to the Regulations

For the reasons stated in the preamble, parts 24 and 111 of the Customs and Border Protection Regulations (19 CFR parts 24 and 111) are proposed to be amended as follows:

PART 24—CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

1. The authority citation for part 24 continues to read in part as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1505, 1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 9701; Public Law 107-296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).

* * * * *

§ 24.22

[Amended]

2. Amend § 24.22 as follows:

a. In paragraph (b)(1)(i), the figure “$397” is removed and, in its place, the figure “$437” is added.

b. In paragraph (b)(2)(i), the figure “$100” is removed and, in its place, the figure “$110” is added.

c. In paragraph (c)(1), the figure “$5” is removed and, in its place, the figure “$5.50” is added.

d. In paragraph (d)(1), the figure “$7.50” is removed and, in its place, the figure “$8.25” is added.

e. In paragraph (e)(1), the figure “$25” is removed and, in its place, the figure “$27.50” is added.

f. In paragraph (e)(2), the figure “$25” is removed and, in its place, the figure “$27.50” is added.

g. In paragraph (f), the figure “$5” is removed and, in its place, the figure “$5.50” is added.

h. In paragraph (g)(1)(i), the figure “$5” is removed and, in its place, the figure “$5.50” is added.

i. In paragraph (g)(1)(ii), the figure “$1.75” is removed and, in its place, the figure “$1.93” is added.

j. In the table under paragraph (g)(2), in both columns headed “Fee status for arrival from SL”, all the figures reading “$1.75” are removed and, in their place, the figure “$1.93” is added; and, in the column headed “Fee status for arrival from other than SL”, all the figures reading “$5” are removed and, in their place, the figure “$5.50” is added.

k. In paragraph (g)(5)(v), the figure “$5” is removed and, in its place, the figure “$5.50” is added; and, the figure “$1.75” is removed and, in its place, the figure “$1.93” is added.

l. In paragraph (i)(7), the figure “$5” is removed and, in its place, the figure “$5.50” is added.

m. In paragraph (i)(8), the figure “$1.75” is removed and, in its place, the figure “$1.93” is added.

PART 111—CUSTOMS BROKERS

3. The authority citation for part 111 continues to read in part as follows:

Authority: 19 U.S.C. 66, 1202, (General Note 3(i), Harmonized Tariff Schedule of the United States), 1624, 1641.

* * * * *

Section 111.96 also issued under 19 U.S.C. 58c; 31 U.S.C. 9701.

§ 111.19

[Amended]

4. Section 111.19 is amended in paragraph (c) by removing all the figures reading “$125” and adding in their place the figure “$138”.

§ 111.96

[Amended]

5. Section 111.96 is amended in paragraph (c) by removing all the figures reading “$125” and adding in their place the figure “$138”.

Approved: April 19, 2006.

Deborah J. Spero,

Acting Commissioner, Customs and Border Protection.

Timothy E. Skud,

Deputy Assistant Secretary of the Treasury.