[Federal Register Volume 62, Number 142 (Thursday, July 24, 1997)]
[Rules and Regulations]
[Pages 39747-39755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19499]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 62, No. 142 / Thursday, July 24, 1997 / Rules
and Regulations
[[Page 39747]]
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DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
7 CFR Part 354
[Docket No. 96-038-3]
RIN 0579-AA81
User Fees; Agricultural Quarantine and Inspection Services
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Final rule.
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SUMMARY: We are amending the user fee regulations by adjusting the fees
charged for certain agricultural quarantine and inspection services we
provide in connection with certain commercial vessels, commercial
trucks, commercial railroad cars, commercial aircraft, and
international airline passengers arriving at ports in the customs
territory of the United States. We are setting user fees in advance for
these services for fiscal years 1997 through 2002. We have determined
that the fees must be adjusted to reflect the anticipated actual cost
of providing these services through fiscal year 2002.
EFFECTIVE DATE: September 1, 1997.
FOR FURTHER INFORMATION CONTACT: For information concerning Program
Operations, contact Mr. Jim Smith, Operations Officer, Program Support,
PPQ, APHIS, 4700 River Road Unit 60, Riverdale, MD 20737-1236, (301)
734-8295.
For information concerning rate development, contact Ms. Donna
Ford, User Fees Section Head, FSSB, BAD, APHIS, 4700 River Road Unit
54, Riverdale, MD 20737-1232, (301) 734-8351.
SUPPLEMENTARY INFORMATION:
Background
The regulations in 7 CFR 354.3 (referred to below as the
``regulations'') contain provisions for the collection of user fees for
certain agricultural quarantine and inspection (AQI) services provided
by the Animal and Plant Health Inspection Service (APHIS). These
services include, among other things, inspecting certain commercial
vessels, commercial trucks, commercial railroad cars, commercial
aircraft, and international airline passengers arriving at ports in the
customs territory of the United States from points outside the United
States. (The customs territory of the United States is defined in the
regulations as the 50 States, the District of Columbia, and Puerto
Rico.)
These user fees are authorized by section 2509(a) of the Food,
Agriculture, Conservation, and Trade Act of 1990 (21 U.S.C. 136a). This
statute, known as the Farm Bill, was amended by section 504 of the
Federal Agriculture Improvement and Reform Act of 1996 (Pub. L. 104-
127), on April 4, 1996.
As amended, the Farm Bill provides that APHIS may prescribe and
collect fees sufficient to cover the cost of providing AQI services in
connection with the arrival, at a port in the customs territory of the
United States, of commercial vessels, commercial trucks, commercial
railroad cars, commercial aircraft, and international airline
passengers. The Farm Bill, as amended, also provides that APHIS may
prescribe and collect fees sufficient to cover the cost of providing
preclearance or preinspection at a site outside the customs territory
of the United States to such passengers and vehicles. The Farm Bill, as
amended, further states that the fees should be sufficient to cover the
cost of administering the fee program, and sufficient to maintain a
reasonable balance in the Agricultural Quarantine Inspection User Fee
Account. In addition to user fees, the Farm Bill, as amended,
authorizes APHIS to assess late payment penalties and interest charges
if a person fails to pay a fee when due. The Farm Bill, as amended,
establishes a no-year fund, known as the ``Agricultural Quarantine
Inspection User Fee Account'' (Account), in the Treasury of the United
States. All fees, late payment penalties, and interest charges
collected by APHIS through fiscal year (FY) 2002 are to be deposited in
the Account. For each FY 1997 through 2002, funds in the Account are
available to APHIS, until expended, to cover the costs of providing AQI
services and administering the AQI program.
For each of FYs 1997 through 2002, fees collected in excess of $100
million may be used to cover the costs of providing AQI services and
are automatically available.
Under the Farm Bill, as amended, we may spend all AQI user fees we
collect in excess of $100 million for FYs 1997 through 2002, as long as
we spend the money only to provide AQI services. Any money we do not
spend must remain in the Account. After FY 2002, any unobligated
balance in the Account and any other amounts collected but not
disbursed will be credited to APHIS for future AQI activities.
On January 27, 1997, we published in the Federal Register (62 FR
3823-3830, Docket No. 96-038-1) a proposal to amend the regulations by
adjusting our user fees for servicing certain commercial vessels,
commercial trucks, commercial railroad cars, commercial aircraft, and
international airline passengers arriving at ports in the customs
territory of the United States from points outside the United States
and setting user fees in advance for these services for FY 1997 through
2002.
We solicited comments concerning our proposal for 60 days ending
March 28, 1997. We received 15 comments by that date. They were from
county and State government agencies, airline industry representatives,
maritime representatives, and agriculture representatives, including
producers and farmers.
Five commenters approved of the proposal as written. Ten commenters
opposed some portion of the proposal, supported part of the proposal,
or offered suggestions for improvements. Several commenters disagreed
with the amount of our fees, questioned our projections, or questioned
fees such as the annual truck decal, the vessel fee, and the aircraft
fee versus the international passenger fee. We carefully considered the
comments, all of which are discussed below by topic, and reviewed our
analysis. However, none of the commenters offered additional
information to revise our analysis. In the absence of any new
[[Page 39748]]
information, we continue to believe that the analysis presented in the
proposal is sound and that the proposed fees are appropriate.
Therefore, based on the rationale set forth in the proposed rule and in
this document, we are adopting the provisions of the proposed rule as a
final rule without change.
Fees for 6 Years in Advance
Two commenters disliked our proposal to adopt user fees for 6 years
in advance; three commenters liked the idea.
By proposing user fees in advance for a 6-year period, we are
responding to comments we received in response to past proposals. Those
commenters stated that it was difficult to make business plans without
knowing in advance when fees would change and by how much. Also,
commenters have, in the past, objected to large fee increases, even
though they occurred infrequently. We believe adopting user fees for 6
years in advance alleviates these concerns. Under this rule, business
planning should be easier and fee increases will be more gradual.
Vessel Inspection Fee
Two commenters objected to the increase in the vessel inspection
fee. They based their objections on the small percentage of ships that
are boarded in the Port of Hampton Roads in Virginia.
We inspect almost all internationally arriving vessels at ports of
entry in the United States. The user fees for these inspections are
based on the total cost of the vessel inspection program. The type of
inspection ranges from an exterior inspection from outside the vessel
to a boarding of the vessel for full-scale inspection of the interior
and cargo. The decision to board a vessel is based on numerous
variables, including the origin, cargo, and type of the vessel, which
indicate the risk presented by a vessel of introducing foreign pests
and diseases into the United States. A system that attempted to account
for every possible inspection situation would be unwieldy and expensive
to administer and would most likely result in higher user fees.
One commenter suggested that all options to reduce costs should be
considered before raising vessel inspection fees.
We agree with the commenter's approach. We are constantly trying to
reduce costs and minimize necessary cost increases. We raise our user
fees only when necessary to reflect unavoidable cost increases.
Likewise, because APHIS user fees reflect the actual cost of providing
a service, if we can reduce the cost of a service, we can reduce the
user fee for that service.
User Fees for Commercial Trucks
One commenter questioned why commercial trucks entering the United
States from Canada are exempt from paying an APHIS user fee and
suggested that trucks from Canada should pay the same fee as trucks
entering from Mexico.
APHIS restricts the importation of plants and animals and/or plant
and animal products from foreign countries based on the pest or disease
risk associated with those imports. In many cases, such imports from
Canada present a very low risk, and few restrictions apply. Under these
circumstances it is not necessary for APHIS to provide inspection
services for commercial trucks from Canada. Because APHIS provides no
inspection services, an APHIS user fee is not justified.
One commenter agreed that the lower truck decal price for FY 1997
is warranted. However, the commenter suggested that equity might call
for a 1-year moratorium on increasing the individual truck crossing fee
so that the two fees would not have a noticeable difference. Another
commenter questioned who is subsidizing the shortfall in user fees for
providing AQI inspections for trucks using the annual decal during FY
1997.
As explained in the proposed rule, both the truck decal and
individual truck crossing fees must be raised. The FY 1997 truck decal
cannot be changed because the decals have already been printed and many
have been sold. Therefore, APHIS is covering the FY 1997 truck decal
shortfall from the reserve fund. However, we believe the individual
crossing fee must be increased for FY 1997, to help ensure that the
full cost of inspecting these trucks is covered by user fees. It should
be noted that, by the date this rule is effective, FY 1997 will be more
than half over, and most truck decals are purchased early in the year.
Therefore, the disparity between the FY 1997 truck decal fee and the
individual crossing fee will be temporary and most likely minimal.
In addition, it is less expensive and more efficient to allow
prepayment of fees for commercial trucks than to attempt to collect and
process a fee for each arrival. It is possible that individual trucks
might pay more in user fees if there were no prepayment provisions.
However, the possible loss that will be incurred in FY 1997 if there is
a shortfall is more than offset by the savings of a more efficient
collection system.
One commenter stated that the annual decal for commercial trucks
violates the law, stating that the decal user fee would not cover the
cost of inspections. For example, if the truck with a decal entered the
United States enough times, then the average fee per inspection would
be lower than the actual cost for the service.
Our user fees cover the cost of providing services for the entire
inspection program. Therefore, sometimes fees may be more or less than
the actual cost of services received for individual cases. As explained
in our proposal, the user fee for the annual decal for commercial
trucks is calculated as 20 times the individual crossing fee. The total
collected for commercial truck user fees for annual decals and
individual crossing fees is expected to recover the cost of providing
those inspection services.
Commercial Truck Versus Commercial Aircraft User Fees
One commenter stated that inspecting a commercial truck takes
approximately the same amount of time as inspecting a commercial
aircraft and implied that the fees should be the same.
In our experience, inspecting a commercial aircraft is much more
involved than inspecting a commercial truck, and, therefore, takes
longer. The result is a higher user fee for aircraft.
One commenter complained that commercial airlines should be offered
quantity discounts similar to that offered commercial trucks through
our decal system.
The annual decal available for trucks is a joint APHIS-U.S. Customs
Service (Customs) decal covering fees for inspections by both agencies.
Commercial trucks may purchase an annual decal for APHIS inspections
when they purchase an annual decal from Customs. Although this exact
approach would probably not be applicable to aircraft, we appreciate
the commenter's suggestion. If we decide to make any changes based on
this comment, we will publish a proposal in the Federal Register for
public comment.
Commercial Aircraft and Airline Passenger User Fees
One commenter pointed out that passenger and aircraft inspection
fees would represent a large percent of AQI collections in each year
from FY 1997 through 2002. The commenter implied that passenger and
aircraft inspection fees subsidize other AQI services. Further, the
commenter asserted that
[[Page 39749]]
since we do not charge user fees for private vehicles entering the
United States at land border ports, it appears that those individuals
and vehicles who do pay user fees are subsidizing the inspection
process.
Each service category was considered separately. Each category
must, through user fee receipts, return enough money to APHIS to cover
the cost of providing AQI services to that particular category. Costs
were assigned directly to a category when the cost directly related to
providing the service. For example, our detector dog program only
applies to passenger inspections. Therefore, the passenger inspection
fees includes the full costs for the detector dog program. However,
where a cost benefits all categories of service, it was pro-rated among
the categories based on historic direct labor staff hours.
AQI user fees are used only for user fee related activities. APHIS
receives appropriated funds to cover the costs of those AQI services
not covered by user fees. This includes, among other things, inspection
of passengers and aircraft from Hawaii and Puerto Rico, and certain
Mexican land border activities, including pedestrian and personal
vehicle inspections. Commercial aircraft and aircraft passenger fees do
not subsidize any other AQI services.
One commenter stated that the air passenger fee should cover the
inspection of the aircraft as well. Two commenters stated that a
separate fee for inspection of the aircraft and its passengers violates
the law. The commenters asserted that the inspection of the aircraft
for food items and garbage is specifically passenger related. The
commenters point out that neither Customs nor the Immigration and
Naturalization Service (INS) assess a commercial aircraft fee separate
from a passenger fee.
On January 9, 1992, we published a final rule in the Federal
Register (57 FR 755-773, Docket No. 91-135) that amended our user fees
to shift all passenger-related inspection costs from the aircraft user
fee to the airline passenger user fee. The airline passenger user fee
includes the cost of inspections related to the presence of passengers
on aircraft, such as inspection of the passenger cabin. Specifically,
the airline passenger user fee covers inspection of the aircraft
galley, including garbage, the passenger compartment, the baggage hold,
and all related administrative and overhead expenses. The aircraft fee
covers the inspection of the aircraft and its cargo.
Passengers and aircraft, and the cargo it carries, pose different
risks of bringing foreign diseases and pests into the United States.
For example, passengers may have visited a farm that may present
agricultural concerns, or they may be carrying infested fruits or
vegetables or infected meat on their persons or in their baggage.
Aircraft may be infested with a pest that has escaped from infested
cargo or entered the aircraft when it was in an infested locality.
Therefore, aircraft or cargo may need to be fumigated or disinfected.
For all these reasons, passengers and their baggage must be inspected
separately and in a different manner than the aircraft and its cargo.
It seems appropriate that passengers themselves pay the APHIS user
fees for passengers. Although airlines collect the APHIS passenger user
fee along with the price of the ticket and then remit the APHIS user
fee to APHIS, the airlines could be charged a user fee that would cover
the entire cost of both aircraft and passenger inspections. If we
decide to consider such a change, we will publish a proposal in the
Federal Register for public comment.
International Trade
One commenter asserted that raising user fees could decrease
exports.
Although some countries do not currently charge for export-related
services, such as inspections, user fees for these services are being
adopted by more and more countries. Therefore, we do not believe that
U.S. exporters are at a competitive disadvantage compared with
exporters in other countries.
Unrestricted Access to Resources
One commenter suggested that APHIS should not have unrestricted
access to resources.
We do not have unrestricted access to the funds collected through
our user fees. Congress only gives access to the amount appropriated
plus any amount of collected user fees above $100 million. Our access
is also restricted in that we may only use the funds for AQI services
rendered.
Congressional Funding
One commenter suggested that ``if Congress stopped funding APHIS as
a cost cutting measure, then APHIS should reduce spending and
expenses.''
Congress still funds APHIS with appropriated funds; however, the
source of most of the appropriations for AQI services is collected user
fees. The cost of providing AQI services is projected to exceed $100
million for each of the years 1997 through 2002, and the AQI user fees
should generate enough funds to cover these costs. As explained in the
proposed rule, APHIS automatically has access to user fee funds in
excess of $100 million that are collected each year, but it takes
appropriation action to make that first $100 million available to APHIS
each year. If the full $100 million is not appropriated during any year
between 1997 and 2002, APHIS may find it necessary to increase the
amounts of individual user fees through rulemaking, thereby increasing
the amount of fees collected in excess of $100 million. Increasing the
fees by the proper amount would generate enough funds to compensate for
the user fee funds diverted by an appropriation of less than $100
million, and would ensure that APHIS has enough funds to cover the
costs of providing the AQI services.
Automated Commercial System Investment in FY 1997 and 1998
One commenter approved of our dedicating funds to fully implement
our use of Customs' Automated Commercial System (ACS). Several other
commenters expressed confusion about how and when the $3.175 million
investment would be made.
We understand the confusion. To clarify, the implementation costs
totaling $6.35 million were originally intended to be spent in FY 1996.
Due to technology constraints, we did not implement the system in FY
1996. Therefore, our plan is to spread the implementation over 2 years
with a one-time investment of $3.175 million each year. In the proposed
rule, the spending estimates for FYs 1997 and 1998 included $3.175
million in each year for a total investment of $6.35 million for ACS
implementation.
Cost Cutting and Changes in Inspection Process
One commenter suggested a USDA-wide reorganization in an effort to
streamline costs.
A USDA-wide reorganization is outside the scope of our control and
beyond the scope of the proposed rule. Nonetheless, we would like to
point out that USDA has and is still undergoing reorganization to
reduce costs and increase efficiency. As part of this reorganization,
APHIS has taken actions to reduce costs and increase efficiency. Many
of these actions are discussed later on in this document in response to
other comments.
Several commenters questioned increasing the number of inspectors.
One commenter asserted the percentage of these increases during FY 1996
did not relate to the growth in airline operations or a change in the
form of the agricultural inspections. The commenter also questioned
whether the large increase in staff in FY 1996 was a one
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time augmentation or a new rate of growth.
The large increase in staff in FY 1996 was mandated by Congress to
bring APHIS up to a reasonable level of service. With these new hires,
we staffed new terminals, extended service hours, and provided more and
better service. We increased staff based on need; however, we do not
foresee increases such as in FY 1996 to become the trend. In fact, as
stated in our proposal, we are planning to hire only 30 additional
officers each year, which is fully in line with our estimates of volume
increases.
Several commenters suggested that we should cut costs before
raising user fees.
We are always looking for ways to reduce our costs. One cost
cutting change we made this year was to centralize our detector dog
training program. Previously, we had three separate training centers.
These have all been combined into a single facility in Orlando, FL.
This facility trains dogs to detect agricultural products.
We are planning in the near future to combine our regional offices
into regional hubs over the next several years. Cost savings and better
program delivery are two factors considered in this and other
reorganizations. In addition, we have reduced Headquarters staffing,
which lowers overhead costs.
Several commenters suggested that we should improve efficiency
before raising user fees. One commenter specifically suggested that we
should find new methods to improve efficiency and enforcement via risk
assessment and selective or targeted inspection. One commenter
suggested that we need a new approach to the inspection process and
should look for innovative ways of performing inspections. One
commenter complained that APHIS currently does not seem to use
computers for its work. One commenter stated that cost estimates need
to consider the need for technology upgrades, such as the development
and use of tomographic X-ray equipment.
We are always looking for innovative approaches to improve our
efficiency. Along with manual inspections, we use alternative
inspection methods and technologies such as automated information
systems, X-ray systems, and specially trained detector dogs. Examples
of what we are doing in these areas and planned enhancements are
described below.
We determine where we need our resources based on risk assessment.
We are focusing on facilitation, education, and compliance.
Technology and other more efficient approaches facilitate inspections.
Education informs the public of our mission.
To facilitate passenger clearance, we use the Interagency Border
Inspection System (IBIS), where it is available. IBIS contains incoming
passenger information. To facilitate cargo movement, we use Customs'
ACS and Automated Targeting Systems (ATS), where they are available.
Today, more ports are using these systems, and we are continuing to
expand the use of these systems to all of our ports. In addition, we
are developing a system that will be integrated to ACS and ATS, so we
will provide better information and communication with the public about
the release and approval of cargo.
In addition, we, along with other Federal inspection agencies, are
negotiating with the airlines to develop an advance passenger
information system to provide better technology to facilitate passenger
clearance.
We continue to expand the use of X-ray equipment as a screening
tool in passenger baggage clearance at major international airports.
There are X-ray scanning machines located at all foreign-arrival and
predeparture sites. X-ray machines are used at international airports
and on the U.S.-Mexico border. We replaced old X-ray equipment with
modern X-rays which have integrated computers and provide improved
quality through enhanced imaging.
In partnership with the Federal Aviation Administration and the
Department of the Army, we are developing a tomographic X-ray system
that will automatically detect agricultural products in luggage and
alert inspectors. When operational, we expect this system to provide
more accurate images of the contents of baggage than current X-ray
equipment can. We expect to improve our ability to make decisions about
inspecting passenger baggage prior to passengers' picking up their
baggage. Therefore, we expect to decrease the number of passengers in
the inspection area and over time decrease the size of the inspection
area thus reducing costs and time delays associated with the inspection
process.
The prototype for this tomographic X-ray system is scheduled to be
tested in San Juan, PR, in April 1998. As with all of our enhancements,
after the pilot test, we plan to implement this new technology at the
largest, most active airports where the most people will benefit and
there will be the greatest impact. We will adapt the implementation, as
needed, to other locations and gradually incorporate this tool
throughout all international airports.
We continue to use specially trained dogs to detect prohibited
items at major international airports. Detector dogs have proven useful
in selecting bags to inspect and we plan to expand this program to meet
increased risk.
Several commenters questioned the apparent change in APHIS' role as
compared to other Federal inspection agencies. One commenter asserted
that APHIS' function in the airport environment is secondary to
Customs, as Customs inspectors perform all primary inspections. The
comment further asserted that this serves the needs of all agencies
adequately without multiplying the hurdles confronting the arriving
passenger.
In the past, Customs inspectors opened passenger baggage and
notified our inspectors when agricultural products were found. Customs
has shifted their focus away from passenger processing to other areas
that are more important from its perspective. Our priority continues to
be finding agricultural products that could introduce foreign pests and
diseases. One of the highest risks is from agricultural products in
passenger baggage. Passengers may inadvertently carry infested fruits
or vegetables or infected meat in their baggage. Therefore, we still
need to open baggage to check for these agricultural products.
In conjunction with both Customs and INS, we find ways to improve
processing of passengers and cargo. Along with other Federal inspection
agencies, we meet with the aircraft industry at least once a month as a
member of the Federal Inspection Committee. As a result of the efforts
of these groups and our continued attention to modernizing and
improving our inspections, we have several efforts underway to improve
efficiency and cut costs.
One commenter questioned whether user fees have any correlation to
the amount of services received by the user. One commenter questioned
the relative efficiency of one port operation over another. One
commenter suggested a sliding scale of fees based on location,
efficiency, and general overhead.
We realize that the amount of service for each user varies.
However, the number of variables that determines the amount of service
or length of time required to provide service is virtually infinite. A
system that attempted to account for every possible inspection
situation would be unwieldy and expensive to administer and would
require the additional expenses to be included in the fee calculation.
[[Page 39751]]
Interpretations/Violations
One commenter stated that the Farm Bill, as amended, does not
eliminate the annual review requirement.
Since the inception of our user fees, we have performed annual
reviews of our user fees and adjusted fees as required. As stated in
our proposed rule, we not only intend to monitor our fees throughout
each year, but we intend to look closely at adjustments to fees that
may be needed in future years. If we determine that any fees are too
high and are contributing to unreasonably high reserve levels, we will
publish lower fees in the Federal Register and make them effective as
quickly as possible. If it becomes necessary to increase any fees
because reserve levels are being drawn too low, we will publish
proposed fee increases in the Federal Register for public comment.
One commenter asserted that the Farm Bill, as amended, does not
permit adjustment in advance of a determination of need.
We disagree with the commenter's interpretation of the requirements
of the Farm Bill, as amended. The Secretary is under no formal
obligation to make a specific determination of need prior to the
adjustment of fees. Nonetheless, the user fee adjustments we propose
for FYs 1997 through 2002 were all based on cost estimates (i.e. a
determination of need) for providing AQI services for future years.
None of the fee adjustments will be effective until the fiscal year for
which they were proposed. As we stated in our proposed rulemaking (see
62 FR 3824), ``(w)e * * * plan to publish a notice in the Federal
Register prior to the beginning of each fiscal year to remind or notify
the public of the user fees for that particular fiscal year * * *. If
we determine that any fees are too high and are contributing to
unreasonably high reserve levels, we will publish lower fees in the
Federal Register and make them effective as quickly as possible. If it
becomes necessary to increase any fees because reserve levels are being
drawn too low, we will publish, for public comment, proposed fee
increases in the Federal Register.'' Therefore, contrary to the
commenter's assertions, no fees are being adjusted ``in advance of a
determination of need.''
One commenter suggested that by proposing user fees for 6 years, we
avoid notice and comment rulemaking mandated by the Administrative
Procedure Act (APA) (5 U.S.C. 551 et seq.). The commenter also stated
that APHIS should be held accountable for timely rulemaking.
APHIS has been actively pursuing different avenues to make user fee
rulemaking more timely. Although beneficial for the result, the time
spent to develop the user fees, analyze their potential impacts, and
have other government organizations review our documents can cause
significant delays in implementing our user fees. Therefore, in the
past, our user fees have been out of date by the time they are
effective. Proposing potential user fees in advance is an attempt to
ensure timely rulemaking. Our 6-year proposal has gone through the
standard notice and comment rulemaking process as required by the APA.
Also, by proposing user fees for a 6-year period, we are responding to
comments received in the past by providing information sooner for
planning purposes and phasing in gradual increases rather than large
increases.
Projections and Cost Estimates
Several commenters stated that our proposed fees were either too
high or too low.
We have determined, using the best data available, the cost of each
of the services for which we will charge an APHIS user fee. In
addition, the services we provide and the cost of providing those
services will change over time. Therefore, as stated in our proposal,
we intend to monitor our fees throughout the year and review them at
least annually. If we determine that any fees are too high and are
contributing to unreasonably high reserve levels, we will publish lower
fees in the Federal Register and make them effective as quickly as
possible. If it becomes necessary to increase any fees because reserve
levels are being drawn too low, we will publish proposed fee increases
in the Federal Register for public comment.
To calculate the proposed user fees, we projected the direct costs
of providing AQI services in FYs 1997 through 2002 for each category of
service: Commercial vessels, commercial trucks, commercial railroad
cars, commercial aircraft, and international airline passengers. The
cost of providing these services in prior FYs served as a basis for
calculating our projected costs.
In FY 1992, APHIS established accounting procedures to segregate
AQI user fee program costs. On December 31, 1992, we published a final
rule in the Federal Register (57 FR 62469-62471, Docket No. 92-148-1)
that amended some of our user fees and included a detailed description
of these accounting procedures.
As part of our accounting procedures, we established distinct
accounting codes to record costs that can be directly related to each
inspection activity.
Other costs that cannot be directly charged to individual accounts
are charged to ``distributable'' accounts. The costs in these
distributable accounts are prorated (or distributed) among all the
activities that benefit from the expense, based on the ratio of the
costs that are directly charged to each activity divided by the total
costs directly charged to each account at the field level.
Using these accounting procedures, we calculated the total cost of
providing AQI services in each past year by determining the amounts in
each direct-charge account, then adding the pro rata share of the
distributable accounts.
We then projected total costs to provide each category of service
during each future year. Each projection included the costs of program
delivery, which are incurred at the State level and below. Also
included was a pro rata share of the program direction and support
costs, which include items at the regional and headquarters program
staff levels. Finally, each projection included a pro rata share of
agency-level support costs, which includes activities that support the
entire agency, such as recruitment and development, legislative and
public affairs, regulations development, regulatory enforcement, budget
and accounting services, and payroll and purchasing services. Costs for
billing and collection services, legal counsel, and rate development
services that are directly related to user fee activities are directly
added to the user fee activities they support and are not included in
the proration of agency-level costs.
Each service category was considered separately. Each category
must, through user fee receipts, return enough money to APHIS, to cover
the cost of providing AQI services to that particular category.
Several commenters questioned our cost estimates and variances
between years. Specifically, commenters questioned the use of volumes,
past estimates, and differences between FYs 1995, 1996, and 1997.
In the proposed rule, different components were included in
different categories. For example, because FY 1996 spending was used as
the basis for calculations, the base amount did not include all of the
components that were added to estimated projected costs for FY 1997.
As explained in our proposed rule, we hired 217 new inspectors in
FY 1996. Therefore, there was a large increase between FYs 1995 and
1996. In addition, there were differences in the
[[Page 39752]]
per employee costs for new employees in various years, because all new
hires were not employed for the full year.
The information regarding spending estimates that we provided in
the proposed rule was, in scope, the same information that we used to
set the new user fees. Our user fees are based on data gathered at the
work unit, region, and headquarters levels. For members of the public
who, like the commenters, wish to obtain additional information, the
names, addresses, and telephone numbers of knowledgeable APHIS
personnel were provided in the proposed rule, and are provided in this
document, under the heading FOR FURTHER INFORMATION CONTACT.
One commenter stated APHIS' vessel volume was a low figure compared
with the number that Customs reported entering in FY 1996. A similar
comment was received comparing APHIS' international air passenger
volume with INS' international air passenger volume.
We acknowledge that our volume figures are lower, but it is easy to
explain. First, the Customs number of vessels entering the United
States for FY 1996 was for all vessel arrivals. APHIS only charges for
the first 15 arrivals of vessels over 100 net tons and exempts vessels
sailing solely between the United States and Canada. Secondly, the INS
international air passenger volumes include all arriving international
passengers. Again, APHIS is interested in a different portion of total
international passengers and various passengers are exempt, including
all passengers arriving from Canada. Therefore, our projections are and
should be different from other Federal inspection agencies.
Reserve Fund
Commenters suggested that the size of the APHIS reserve fund is
unjustified. Two commenters stated that a far smaller reserve fund
would be adequate. Both of these commenters compared APHIS' reserve
fund with INS', which, according to one commenter, maintains a reserve
fund of approximately 8 percent of annual operating expenses, or,
according to the other commenter, maintains a reserve fund of
approximately 1 month's worth of operating costs.
APHIS' user fee authority provides for the maintenance of a
reasonable balance in the user fee account. We link the reserve
requirement in each category to the category's collection schedule. The
reserves for the commercial aircraft and international air passenger
user fee accounts are one-fourth of their respective annual costs
because those fees are collected in arrears on a quarterly basis. The
reserve requirement for commercial vessels and trucks is one-twelfth of
that category's annual costs because those fees are remitted to APHIS
monthly. The reserve requirement for loaded railroad cars is one-sixth
of that category's annual costs because those fees are remitted to
APHIS 2 months in arrears. We continue to believe that a fully funded
reserve in each category's user fee account is essential to ensure the
continuity of service in cases of bad debt, carrier insolvency, and
fluctuations in activity volumes.
Additional Uses for Fees
One commenter suggested additional services that could be funded
from the AQI user fees.
We have made no change to the rule based upon this comment since it
is ouside the scope of this rulemaking proceeding.
Advisory Committee
Two commenters suggested that APHIS should establish an advisory
committee to assist in determining appropriate changes to the user fee
amounts and expenditure of user fee funds. Both commenters referred to
Customs' and INS' advisory committees.
Both Customs and INS are mandated to establish advisory committees.
The Farm Bill, as amended, has not authorized an advisory committee for
APHIS' AQI user fees. We are taking no action based on these comments
at this time. The establishment of an advisory committee is outside the
scope of this rulemaking proceeding.
Miscellaneous Comments
Two commenters questioned a USDA reorganization, which would
consolidate the labs into five ``super-labs'' to reduce USDA expenses.
They questioned the effect this would have on ship inspections.
APHIS is not involved in any such reorganization. In addition, we
are not aware of any such planned USDA reorganization to establish five
``super-labs.'' However, if there was a USDA reorganization to reduce
the Department's expenses, that reorganization might not reduce APHIS'
vessel inspection expenses.
Miscellaneous
We have made a correction to a typographical error in the user fee
for vessel inspections for FY 1997. In the proposed rule, the user fee
was shown as $447.00 in the Supplementary Information under the
background and as $447.50 in the rule portion. The correct fee should
be $447.00; we have changed the rule portion accordingly.
Executive Order 12866 and Regulatory Flexibility Act
This rule has been reviewed under Executive Order 12866. The rule
has been determined to be significant for the purposes of Executive
Order 12866 and, therefore, has been reviewed by the Office of
Management and Budget.
This rule, will, over a 6-year period, generally increase user fees
for certain international airline passengers, commercial aircraft,
commercial vessels, commercial trucks, and commercial railroad cars, in
order to recover the cost to APHIS of providing services. Some user
fees are initially reduced. Amendments to user fees are necessary to
adjust for changes in service volume and in costs.
These fee changes will directly affect international commercial
maritime vessels of 100 net tons or more, commercial trucks, loaded
commercial railroad cars, and commercial aircraft arriving at ports in
the customs territory of the United States. The impact of adjusting
each fee is discussed separately below.
The fee changes will also directly impact international airline
passengers arriving at ports in the customs territory of the United
States. However, we have not included a discussion of the effect on
airline passengers, as individuals are not covered by the Regulatory
Flexibility Act.
Commercial Vessels
According to the Bureau of the Census, there were 334 U.S.
businesses in 1992 engaged in water transportation of freight
internationally between the United States and foreign ports. Of these
businesses, at least 93 percent would be considered small according to
SBA criteria for a small entity in this category (i.e., an entity that
employs fewer than 500 persons).
APHIS user fees for commercial vessels apply only to those of 100
net tons or more arriving from foreign ports, except vessels sailing
solely between Canadian and U.S. ports. All of the United States'
oceangoing fleet exceeds 100 net tons, but only a limited portion
engages in foreign trade. Data from the Department of Transportation's
Maritime Administration shows that there were 319 private oceangoing
merchant vessels in the United States at the beginning of 1996. Of
these vessels, 127 are tankers and the remainder are dry cargo vessels.
The vast majority of the tankers operate nearly exclusively between
United States ports. They are therefore not subject to the APHIS
[[Page 39753]]
commercial vessel user fee. Those vessels subject to the APHIS user fee
are mostly dry cargo vessels operating between the United States and
foreign ports. We believe, however, that the impact of the revised
APHIS user fees on these vessels is likely to be minimal, whether a
vessel is operated by a small or a large entity. Total daily operating
costs for dry cargo vessels idle in port averages between $23,600 and
$26,800. The $77.50 user fee increase for FY 1997 represents less than
0.4 percent of one day's operating costs of an average dry cargo vessel
while in port, and remains $97.00 below the original fee set in 1991.
For subsequent years, there is either no fee increase (FY 1999) or
much smaller increases ($7.50, FY 1998; $7.25, FY 2000; $9.50, FY 2001;
and $9.00, FY 2002). Therefore, we believe the impact of our commercial
vessel user fees on small businesses will be minimal.
Commercial Trucks
The SBA criterion for a small trucking firm is one whose annual
receipts are less than $18.5 million. We are unable to accurately
estimate the number of U.S. firms that would be considered small by
this criterion. However, we believe U.S. firms will be largely
unaffected by the proposed fee changes. In 1991, transportation
expenses for commercial U.S. trucks traveling from Mexico to the United
States varied between $85.00 and $175.00 per trip for trucks carrying
non-agricultural commodities. Assuming constant costs, adding $2.00 to
the user fee per truck, per crossing,1 will represent an
increase in operating expenses of between 1.1 and 2.4 percent for
trucks carrying non-agricultural commodities. Transportation expenses
for trucks hauling agricultural commodities ranged from $300.00 to
$1,700.00 per trip in 1991. Again, assuming constant costs, our user
fee increases will represent operating expense increases of between
0.12 and 0.67 percent for trucks hauling agricultural goods. It
therefore appears that the impact on small U.S. independent trucking
firms will not be significant.
---------------------------------------------------------------------------
\1\ A decal is also available which allows unlimited border
crossings per year for one fee. This decal is available only for
trucks which prepay the Customs user fee which applies to them.
---------------------------------------------------------------------------
Commercial Railroad Cars
There are five U.S. railroad companies currently transporting goods
across the U.S.-Mexican border. These railroad companies will be
directly affected by our reduced user fee for this service. These
railroad companies will also be directly affected by the subsequent fee
increases. However, we are not increasing this fee until FY 2002, at
which time the fee will increase to an amount equal to the current fee.
We are not increasing the user fee beyond the current rate. User fee
changes will affect direct operating expenses. Two of these railroad
companies met the SBA criterion for small entities (i.e., fewer than
1,500 employees). As of 1991, the most recent year for which figures
are available, these small railroad companies were transporting between
960 and 2,000 loaded railroad cars into the United States from Mexico
annually. These cars were all subject to the APHIS user fee. Assuming a
similar number of cars subject to inspection in future years, in FY
1997 reduced user fees will result in a cost savings for these railroad
companies of between $480.00 and $1,000.00. Specific data on the
operating expenses or profit margins of these railroad companies is not
available to us. However, we believe the fee changes will not have any
significant economic effect on small railroad companies.
Commercial Airlines
We received a comment that suggested that there were basic flaws in
our analysis of the impact on commercial airlines required by the
Regulatory Flexibility Act. Specifically, the commenter suggested that
the analysis should have analyzed the impact on the airline industry's
component parts. In addition, the analysis should have taken into
consideration that the impact will fall disproportionately on certain
airlines.
In the Regulatory Flexibility Analysis prepared for the proposed
rule, we used information available from the Bureau of the Census on
domestic and international airlines. Our user fees are spread evenly
across all incoming international flights, both domestic and
international carriers are charged the same fee, regardless of size or
location. Certain exceptions are specified in our regulations. All
exemptions have been added over time based on suggestions and analysis
that their pest risk is close to zero. In response to the comment, we
have reviewed the available data and revised our analysis on commercial
airlines.
In FY 1995, 241 different companies, both foreign and domestic, had
accounts with APHIS to pay user fees for commercial aircraft
inspections. The separation of these companies into large and small
categories according to Small Business Administration size
classifications cannot be determined. While the size distribution of
these carriers that enter the continental United States and subject to
the user fee 2 is unknown, APHIS still anticipates that the
impact of the user fee increase will be small regardless of carrier
size. The increase of $6.25 in the first year, and a total increase of
$9.25 over the 6-year period should represent a very small portion of
operating costs for an international flight arriving in the United
States.
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\2\ The following are exempt from the user fee: aircraft moving
solely between the United States and Canada, aircraft used
exclusively in governmental purposes of the United States or a
foreign government, aircraft making an emergency landing, any
passenger plane with 64 or fewer seats not carrying cargo such as
fresh fruit, aircraft moving from the U.S. Virgin Islands to Puerto
Rico, and aircraft making an in transit stop at a port of entry, but
not required to go through any portion of the federal clearance
process.
---------------------------------------------------------------------------
In addition to user fees paid directly by airlines for aircraft
inspection, airlines collect user fees on our behalf from passengers.
Airlines already have collection and disbursement systems in place for
international passengers. We believe it is unlikely that there would be
any significant increase in the costs of maintaining these systems as a
result of our rule. Airlines will establish trust accounts for user
fees collected from passengers. However, airlines may retain any
interest earned by monies in such accounts.
Under these circumstances, the Administrator of the Animal and
Plant Health Inspection Service has determined that this action would
not have a significant economic impact on a substantial number of small
entities.
Executive Order 12372
This program/activity is listed in the Catalog of Federal Domestic
Assistance under No. 10.025 and is subject to Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. (See 7 CFR part 3015, subpart V.)
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule: (1) Preempts all State and local laws and
regulations that are inconsistent with this rule; (2) has no
retroactive effect; and (3) does not require administrative proceedings
before parties may file suit in court challenging this rule.
Paperwork Reduction Act
This rule contains no new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
[[Page 39754]]
List of Subjects in 7 CFR Part 354
Exports, Government employees, Imports, Plant diseases and pests,
Quarantine, Reporting and recordkeeping requirements, Travel and
transportation expenses.
Accordingly, 7 CFR part 354 is amended as follows:
PART 354--OVERTIME SERVICES RELATING TO IMPORTS AND EXPORTS; AND
USER FEES
1. The authority citation for part 354 continues to read as
follows:
Authority: 7 U.S.C. 2260; 21 U.S.C. 136 and 136a; 49 U.S.C.
1741; 7 CFR 2.22, 2.80, and 371.2(c).
2. Section 354.3 is amended by revising paragraphs (b)(1), (c)(1),
(c)(3)(i) introductory text, (d)(1), (e)(1), and (f)(1) and by adding a
new paragraph (f)(4)(i)(C) to read as follows:
Sec. 354.3 User fees for certain international services.
* * * * *
(b) * * * (1) Except as provided in paragraph (b)(2) of this
section, the master, licensed deck officer, or purser of any commercial
vessel which is subject to inspection under part 330 of this chapter or
9 CFR chapter I, subchapter D, and which is either required to make
entry at the customs house under 19 CFR 4.3 or is a United States-flag
vessel proceeding coastwise under 19 CFR 4.85, shall, upon arrival,
proceed to Customs and pay an APHIS user fee. The APHIS user fee for
each arrival, not to exceed 15 payments in a calendar year, is shown in
the following table. The APHIS user fee shall be collected at each port
of arrival.
------------------------------------------------------------------------
Effective dates Amount
------------------------------------------------------------------------
September 1, 1997 through September 30, 1997................. $447.00
October 1, 1997 through September 30, 1998................... 454.50
October 1, 1998 through September 30, 1999................... 454.50
October 1, 1999 through September 30, 2000................... 461.75
October 1, 2000 through September 30, 2001................... 471.25
October 1, 2001.............................................. 480.25
------------------------------------------------------------------------
* * * * *
(c) * * * (1) Except as provided in paragraph (c)(2) of this
section, the driver or other person in charge of a commercial truck
which is entering the customs territory of the United States and which
is subject to inspection under part 330 of this chapter or under 9 CFR,
chapter I, subchapter D, must, upon arrival, proceed to Customs and pay
an APHIS user fee for each arrival, as shown in the following table:
------------------------------------------------------------------------
Effective dates Amount
------------------------------------------------------------------------
September 1, 1997 through September 30, 1997................. $3.75
October 1, 1997 through September 30, 1998................... 4.00
October 1, 1998 through September 30, 1999................... 4.00
October 1, 1999 through September 30, 2000................... 4.00
October 1, 2000 through September 30, 2001................... 4.00
October 1, 2001.............................................. 4.25
------------------------------------------------------------------------
* * * * *
(3) * * *
(i) The owner or operator of a commercial truck, if entering the
customs territory of the United States from Mexico and applying for a
prepaid Customs permit for a calendar year, must apply for a prepaid
APHIS permit for the same calendar year. Applicants must apply to
Customs for prepaid APHIS permits.\1\ The following information must be
provided, together with payment of an amount 20 times the APHIS user
fee for each arrival, except, that through September 30, 1997, the
amount to be paid is $40.00:
---------------------------------------------------------------------------
\1\ Applicants should refer to Customs Service regulations (19
CFR part 24) for specific instructions.
---------------------------------------------------------------------------
* * * * *
(d) * * * (1) Except as provided in paragraph (d)(2) of this
section, an APHIS user fee will be charged for each loaded commercial
railroad car which is subject to inspection under part 330 of this
chapter or under 9 CFR chapter I, subchapter D, upon each arrival. The
railroad company receiving a commercial railroad car in interchange at
a port of entry or, barring interchange, the railroad company moving a
commercial railroad car in line haul service into the customs territory
of the United States, is responsible for paying the APHIS user fee. The
APHIS user fee for each arrival of a loaded railroad car is shown in
the following table. If the APHIS user fee is prepaid for all arrivals
of a commercial railroad car during a calendar year, the APHIS user fee
is an amount 20 times the APHIS user fee for each arrival.
------------------------------------------------------------------------
Effective dates Amount
------------------------------------------------------------------------
September 1, 1997 through September 30, 1997................. $6.50
October 1, 1997 through September 30, 1998................... 6.50
October 1, 1998 through September 30, 1999................... 6.50
October 1, 1999 through September 30, 2000................... 6.75
October 1, 2000 through September 30, 2001................... 6.75
October 1, 2001.............................................. 7.00
------------------------------------------------------------------------
* * * * *
(e) * * * (1) Except as provided in paragraph (e)(2) of this
section, an APHIS user fee will be charged for each commercial aircraft
which is arriving, or which has arrived and is proceeding from one
United States airport to another under a United States Customs Service
``Permit to Proceed,'' as specified in title 19, Code of Federal
Regulations, Secs. 122.81 through 122.85, or an ``Agricultural
Clearance or Safeguard Order'' (PPQ Form 250), used pursuant to title
7, Code of Federal Regulations, Sec. 330.400 and title 9, Code of
Federal Regulations, Sec. 94.5, and which is subject to inspection
under part 330 of this chapter or 9 CFR chapter I, subchapter D. Each
carrier is responsible for paying the APHIS user fee. The APHIS user
fee for each arrival is shown in the following table:
------------------------------------------------------------------------
Effective dates Amount
------------------------------------------------------------------------
September 1, 1997 through September 30, 1997................. $59.25
October 1, 1997 through September 30, 1998................... 59.75
October 1, 1998 through September 30, 1999................... 59.75
October 1, 1999 through September 30, 2000................... 60.25
October 1, 2000 through September 30, 2001................... 61.25
October 1, 2001.............................................. 62.25
------------------------------------------------------------------------
* * * * *
(f) * * * (1) Except as specified in paragraph (f)(2) of this
section, each passenger aboard a commercial aircraft who is subject to
inspection under part 330 of this chapter or 9 CFR, chapter I,
subchapter D, upon arrival from a place outside of the customs
territory of the United States, must pay an APHIS user fee. The APHIS
user fee for each arrival is shown in the following table:
------------------------------------------------------------------------
Effective dates Amount
------------------------------------------------------------------------
September 1, 1997 through September 30, 1997................. $1.95
October 1, 1997 through September 30, 1998................... 2.00
October 1, 1998 through September 30, 1999................... 2.00
October 1, 1999 through September 30, 2000................... 2.05
October 1, 2000 through September 30, 2001................... 2.10
October 1, 2001.............................................. 2.15
------------------------------------------------------------------------
* * * * *
(4) * * *
(i) * * *
[[Page 39755]]
(C) APHIS user fees collected from international passengers
pursuant to paragraph (f) of this section shall be held in trust for
the United States by the person collecting such fees, by any person
holding such fees, or by the person who is ultimately responsible for
remittance of such fees to APHIS. APHIS user fees collected from
international passengers shall be accounted for separately and shall be
regarded as trust funds held by the person possessing such fees as
agents, for the beneficial interest of the United States. All such user
fees held by any person shall be property in which the person holds
only a possessory interest and not an equitable interest. As
compensation for collecting, handling, and remitting the APHIS user
fees for international passengers, the person holding such user fees
shall be entitled to any interest or other investment return earned on
the user fees between the time of collection and the time the user fees
are due to be remitted to APHIS under this section. Nothing in this
section shall affect APHIS' right to collect interest for late
remittance.
* * * * *
Done in Washington, DC, this 18th day of July 1997.
Terry L. Medley,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 97-19499 Filed 7-23-97; 8:45 am]
BILLING CODE 3410-34-P
