[Federal Register Volume 63, Number 7 (Monday, January 12, 1998)]
[Proposed Rules]
[Pages 1775-1797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-576]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 63, No. 7 / Monday, January 12, 1998 / 
Proposed Rules  

[[Page 1775]]


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DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Part 103

[INS No. 1768-96; AG No. 2137-98]
RIN 1115-AE42


Adjustment of Certain Fees of the Immigration Examinations Fee 
Account

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to adjust the fees schedule of the 
Immigration Examinations Fee Account for certain immigration 
adjudication and naturalization applications and petitions. Fees 
collected from persons filing these applications and petitions are 
deposited into the Immigration Examinations Fee Account and used to 
fund the cost of processing immigration adjudication and naturalization 
applications and petitions and associated support services; the cost of 
providing similar services to asylum and refugee applicants; and the 
cost of similar services provided to other immigrants at no charge. The 
fees that fund the Immigration Examinations Fee Account were last 
revised on July 14, 1994; since the revision, the cost of the services 
supported by the Account have increased. The Immigration and 
Naturalization Service (INS) conducted a thorough review of the 
resources and activities funded by the Account and has determined that 
the current fees do not recover the costs of services. The fee 
increases range from $20.00 to $255.00 depending on the type of 
application or petition filed. Without a fee increase and based on 4.3 
million fee-paying applications, the INS projects FY 1998 fee revenues 
of $368.4 million. The INS also estimates that it will cost $638.6 
million to process 5 million applications, of which 4.3 are expected to 
be fee-paying. This would result in a shortfall of revenue to expenses 
of approximately $270.2 million. This rule is necessary to ensure that 
the fees that fund the Immigration Examinations Fee Account generate 
sufficient revenue to recover the full cost of processing immigration 
adjudication and naturalization applications, petitions, the cost of 
asylum, refugee and other immigrant services provided at no charge to 
the applicant.

DATES: Written comments must be submitted on or before March 13, 1998.

ADDRESSES: Please submit written comments, in triplicate (one original 
and two copies), to the Director, Policy Directives and Instructions 
Branch, Immigration and Naturalization Service (INS), 425 I Street, 
N.W., Room 5307, Washington, D.C., 20536, Attention: Public Comment 
Clerk. To ensure proper handling, please reference INS Number 1768-96 
on your correspondence. Comments are available for public inspection at 
the above address by calling (202) 514-3291 to arrange for an 
appointment.

FOR FURTHER INFORMATION CONTACT: Michael T. Natchuras, Chief, Fee 
Policy and Rate Setting Branch, Office of Budget, Immigration and 
Naturalization Service, or Diane M. Eggert, Senior Staff Accountant, 
Fee Policy and Rate Setting Branch, Office of Budget, Immigration and 
Naturalization Service, on (202) 616-2754, or in writing at 425 I 
Street, N.W., Room 6240, Washington, D.C., 20536. Detailed 
documentation of the rate setting process is available upon request by 
calling (202) 616-2754.

SUPPLEMENTARY INFORMATION:

Legislative Authority

A. Departments of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriation Acts of 1989 and 1991

    The Departments of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriation Act, 1989 (Public Law (P.L.) 100-459) 
authorized the INS to prescribe and collect fees to recover the cost of 
providing certain immigration adjudication and naturalization services. 
P.L. 100-459 also authorized the establishment of the Immigration 
Examinations Fee Account (Examinations Fee Account) in the Treasury of 
the United States. All revenue from fees collected for the provision of 
immigration adjudication and naturalization services are deposited in 
the Examinations Fee Account and ``* * * remain available * * * to 
reimburse any appropriation the amount paid out of such appropriation 
for expenses in providing immigration adjudication and naturalization 
services and the collection, safeguarding and accounting for fees * * * 
(8 U.S.C. 1356(n)).''
    In subsequent legislation, the Departments of Commerce, Justice, 
and State, the Judiciary, and Related Agencies Appropriations Act, 1991 
(P.L. 101-515), Congress further authorized ``* * * that fees for 
providing adjudication and naturalization services may be set at a 
level that will ensure recovery of the full costs of providing all such 
services, including the costs of similar services provided without 
charge to asylum applicants or other immigrants. Such fees may also be 
set at a level that will recover any additional costs associated with 
the administration of the fees collected.'' (8 U.S.C. 1356(m))
    Conference Report 104-378, Making Appropriations for the 
Departments of Commerce, Justice, and State, the Judiciary, and Related 
Agencies For the Fiscal Year Ending September 30, 1996, and For Other 
Purposes, directs the INS to fund the cost of the Cuban-Haitian Entrant 
Program from the Examinations Fee Account. The Report states, ``(t)he 
conferees have also agreed that the activities related to the 
resettlement of Cubans and Haitians should be transferred to the * * * 
Service and that the costs of these activities should be supported by 
the Immigration Examinations Fee account.''

B. The Independent Offices Appropriation Act, 1952

    The INS also employs the authority granted through the Independent 
Offices Appropriation Act, 1952 ((P.L. 82-137) (IOAA), 31 U.S.C. 9701), 
commonly referred to as the ``user fee statute,'' to develop its fees. 
The user fee statute directs Federal agencies to identify services 
provided to unique segments of the population and to charge fees for 
those services, rather than supporting such services through general 
tax revenues. The IOAA states that ``* * * each service or thing of 
value provided by an agency * * * to a person * * * is to be self-
sustaining to the extent possible.'' The IOAA further states that

[[Page 1776]]

charges for such services or things of value should be based on ``* * * 
[t]he costs to the Government * * *''

C. The Chief Financial Officers Act of 1990

    The INS must also conform to the requirements of the Chief 
Financial Officer Act of 1990 (P.L. 101-576). Section 205(a)(8) of the 
Act requires each agency's Chief Financial Officer to ``review, on a 
biennial basis, the fee, royalties, rents, and other charges imposed by 
the agency for services and things of value it provides, and make 
recommendations on revising those charges to reflect costs incurred by 
it in providing those services and things of value.'' (31 U.S.C. 
902(a)(8))

Federal Cost Accounting and Fee Setting Standards and Guidelines

A. Office of Management and Budget (OMB) Circular No. A-25, User 
Charges

    When developing fees for services, the INS adheres to the 
principles contained in OMB Circular Number A-25, User Charges. OMB 
Circular A-25 states that as a general policy a ``user charge * * * 
will be assessed against each identifiable recipient for special 
benefits derived from Federal activities beyond those received by the 
general public.'' (OMB Circular A-25, User Charges, section 6.) The 
Circular provides the following discussion of what constitutes a 
``special benefit'':

    When a service (or privilege) provides special benefits to an 
identifiable recipient beyond those that accrue to the general 
public, a charge will be imposed (to recover the full cost to the 
Federal Government for providing the special benefit * * *). For 
example, a special benefit will be considered to accrue and a user 
charge will be imposed when a Government service: (a) [E]nables the 
beneficiary to obtain more immediate or substantial gains or values 
(which may or may not be measurable in monetary terms) than those 
that accrue to the general public (e.g., receiving a patent, 
insurance, or guarantee provision, or a license to carry on a 
specific activity or business or various kinds of public land use); 
or (b) [P]rovides business stability or contributes to public 
confidence in the business activity of the beneficiary (e.g., 
insuring deposits in commercial banks); or (c) [I]s performed at the 
request of or for the convenience of the recipient, and is beyond 
the services regularly received by other members of the same 
industry or group or by the general public (e.g., receiving a 
passport, visa, airman's certificate, or a Customs inspection after 
regular duty hours). (OMB Circular A-25, User Charges, section 
6.a.(1))

    The guidance contained in OMB Circular A-25 is applicable to the 
extent that it is not inconsistent with any Federal statute. Specific 
legislative authority to charge fees for services takes precedence over 
OMB Circular A-25 when the statute expressly designates ``* * * who 
pays the charge; how much is the charge; where collections are 
deposited.'' (OMB Circular A-25, User Charges, section 4.b.) When a 
statute does not address issues of how to calculate fees or what costs 
to include in the fee calculation, Federal agencies must follow the 
principles and guidance contained in OMB Circular A-25 to the fullest 
extent allowable.
    OMB Circular A-25 directs Federal agencies to charge the ``full 
cost'' of providing services when calculating fees that provide a 
specific benefit to recipients. According to the Circular:

    ``Full cost'' includes all direct and indirect costs to any part 
of the Federal Government of providing a good, resource, or * * * 
appropriate share of:
    (a) Direct [or] indirect personnel costs, including salaries and 
fringe benefits such as medical insurance and retirement * * *
    (b) Physical overhead, consulting, and other indirect costs 
including material and supply costs, utilities, insurance, travel 
and rents or imputed rents on land, buildings, and equipment * * *
    (c) The management and supervisory costs.
    (d) The costs of enforcement, collection, research, 
establishment of standards, and regulation * * *
    (e) Full cost shall be determined or estimated from the best 
available records of the agency, and new cost accounting systems 
need not be established solely for this purpose. (OMB Circular A-25, 
User Charges, section 6.d.)

B. Department of Justice Guidelines

    The Department of Justice issued guidance on User Fee Programs in 
April 1993. The guidance states that as a general policy ``[a] charge 
shall be imposed to recover the full cost to the Federal Government of 
rendering a service that provides specific benefits to an identifiable 
recipient above and beyond those that accrue to the public at large.'' 
(User Fee Program, Supplement to Department of Justice Budget 
Formulation and Execution Calls, April 1993, pg. 2)

C. Federal Accounting Standards Advisory Board Statement of Federal 
Financial Accounting Standards No. 4: Managerial Cost Accounting 
Concepts and Standards for the Federal Government

    When developing fees for services, the INS also adheres to the cost 
accounting concepts and standards recommended by the Federal Accounting 
Standards Advisory Board (FASAB). The FASAB was established in 1990 
through a Memorandum of Understanding between the Secretary of the 
Treasury, the Director of the OMB, and the Comptroller General of the 
United States. The Board's purpose is to recommend accounting standards 
for the Federal Government. In developing its recommendations, the 
FASAB considers the financial and budgetary information requirements of 
the Congress, Executive agencies, and other users of Federal financial 
information.
    In June 1995, OMB and General Accounting Office (GAO) published the 
FASAB Statement of Federal Financial Accounting Standards No. 4: 
Managerial Cost Accounting Concepts and Standards for the Federal 
Government. In this document the FASAB recommends five standards as the 
fundamental elements of managerial cost accounting for Federal 
agencies: ``(1) accumulating and reporting costs of activities on a 
regular basis for management information purposes, (2) establishing 
responsibility segments to match costs with outputs, (3) determining 
full costs of government goods and services, (4) recognizing the costs 
of goods and services provided among federal entities, and (5) using 
appropriate costing methodologies to accumulate and assign costs to 
outputs.'' (FASAB, Statement of Federal Financial Accounting Standards 
Number 4, section 2, pg. 1) These standards became effective for 
Federal agencies on September 30, 1996.
    In the Basis for Conclusions, the FASAB states, ``* * * As stated 
in the [Exposure Draft], the full cost of an output produced by a 
responsibility segment is the sum of direct and indirect costs that 
contribute to the output, including the costs of supporting services 
provided by other segments and entities.'' (FASAB, Statement of Federal 
Financial Accounting Standards Number 4, section 199, pg. 78) The 
discussion emphasizes that full cost information has many uses, 
including ``Setting fees and prices for government goods and services'' 
and provides the following discussion on full cost:

    Many respondents agreed that full cost should be considered as a 
primary basis for setting fees and reimbursements for government 
goods and services. As pointed out in the E[xposure] D[raft], it is 
a federal policy that, with certain exceptions, user charges (prices 
or fees) should be sufficient to recover the full costs of goods, 
services, and resources provided by the federal government as 
sovereign. (FASAB Statement of Federal Financial Accounting 
Standards Number 4, section 203, pg. 79)
    To implement the policy, full cost information is necessary. 
Only with reliable full cost information can management ensure that 
user charges fully recover the costs. (FASAB, Statement of Federal 
Financial

[[Page 1777]]

Accounting Standards Number 4, section 204, pg. 79-80)

The Immigration Examinations Fee Account

A. Background

    The Department of Justice (DOJ), Immigration and Naturalization 
Service (INS) charges fees for the processing of specific immigration 
adjudication and naturalization applications and petitions. The INS 
maintains four fee accounts; the fees collected and deposited in each 
account are used to fund specific services. The four fee accounts are: 
the Examinations Fee Account, the Immigration User Fee Account, the 
Land Border Inspection Fee Account, and the Legalization Fee Account. 
Since the fees deposited into each of the accounts are designed to 
recover the cost of specific immigration and naturalization services, 
these fees must be reviewed regularly and adjusted as: (1) Costs 
change, (2) more precise cost determination processes become available, 
or (3) directed by legislation. This rule proposes to revise certain 
immigration adjudication and naturalization fees that are collected and 
deposited into the Examinations Fee Account.

B. History of Immigration Adjudication and Naturalization Fees and the 
Immigration Examinations Fee Account

    The INS has been charging fees for immigration adjudication and 
naturalization services since 1968. At that time, the INS' authority to 
assess fees derived from the authority of the IOAA. The revenue 
generated from these fees was deposited into the General Fund of the 
United States Treasury as miscellaneous receipts and was not available 
to the INS. The INS received an appropriation to fund immigration 
adjudication and naturalization services. The fees charged during the 
period of 1968 to 1989 were calculated based on the salary and benefit 
costs of the INS adjudicators who processed immigration adjudication 
and naturalization applications and petitions, and did not recover the 
full cost of service.
    In 1989, Congress established the Examinations Fee Account. In the 
first year of the Account's existence, the INS retained the 
appropriation that funded the processing of immigration adjudication 
and naturalization applications and petitions. During that year, fees 
collected for these applications and petitions were used to enhance the 
adjudication and naturalization program (although Congress did 
temporarily direct the INS to deposit $50 million of the fee revenue 
into the General Fund of the Treasury). In the subsequent years, fees 
deposited into the Account have been the sole source of funding for 
immigration adjudication and naturalization services, and other 
programs as directed by Congress, and replaced the annual appropriation 
that the INS received for such services. When the Account was first 
established, the INS revised its fee-setting methodology to include a 
component for indirect costs. In subsequent legislation, Congress 
directed the INS to use revenue in the Examinations Fee Account to fund 
the cost of asylum processing and other services provided to immigrants 
at no charge. Consequently, the INS began to add a ``surcharge'' to the 
immigration adjudication and naturalization fees to recover these 
additional costs.
    Currently, the Examinations Fee Account is funded by a variety of 
fees charged to persons who apply for specific adjudication and 
naturalization services by filing various applications and petitions 
with the INS or the Executive Office of Immigration Review (EOIR). 
Examples of these applications and petitions include, but are not 
limited to, applications for permanent resident status, petitions for 
relatives, employment authorization applications, reentry permits, and 
extensions of temporary stay. The current fees range from $65.00 to 
$155.00 and were last revised on July 14, 1994.

C. Sufficiency of the Current Fee Schedule

    In FY 1998, the INS may experience a shortfall of revenue to 
expenses in the Examinations Fee Account because the current fees do 
not recover the full cost of processing immigration adjudication and 
naturalization applications and petitions. Based on the current fee 
schedule and a projected fee-paying volume of 4.3 million applications, 
immigration adjudication and naturalization fees will generate $368.4 
million in revenue for FY 1998. For the same period, the estimated cost 
of processing immigration adjudication and naturalization applications 
and petitions is $638.6 million. This would cause a shortfall of 
revenue to expenses of $270.2 million.
    In addition, recent legislative changes to the Immigration and 
Nationality Act (INA) have reduced the amount of section 245(i) penalty 
fees that had been available to enhance the revenue in the Examinations 
Fee Account. Previously, certain aliens could apply for adjustment of 
status under section 245(i) of the INA by paying a $650.00 penalty fee, 
in addition to the base applications fee. Both the base application fee 
and the penalty fee were deposited into the Account and were available 
to fund immigration adjudication and naturalization programs. The 
amendments to section 245(i) have sharply limited the amount of penalty 
revenue available to the Examinations Fee Account for immigration 
adjudication and naturalization services. Virtually all of the penalty 
fee is now deposited into the Immigration Detention Account and 
available for only detention and deportation activities. In FY 1998, 
the Examinations Fee Account will experience a decrease of 
approximately $129.2 million in projected penalty fees due to changes 
in the law.
    Another factor that had contributed to the insufficiency of the 
current fees is the increased cost of providing asylum and refugee 
services. Congress has authorized the INS to fund its asylum and 
refugee programs, and Cuban and Haitian entrant relocation program from 
the Examinations Fee Account. Since the last fee adjustment, funding 
levels for the International Affairs program, which administers these 
programs, have increased. These increases include the transfer of the 
Cuban-Haitian Entrant Program from the Community Relations Service to 
the INS on March 31, 1996, which added $10.2 million and 21 positions 
to the Account, and the recent transfer of additional asylum and 
refugee costs from the Violent Crime Trust Fund to the Account. This 
transfer added costs of $29.6 million and 388 positions to the Account. 
Overall, funding for the International Affairs program from the Account 
has risen from $40.7 million in FY 1994 to a proposed $92.8 million in 
FY 1998.

D. Programs and Services Funded through the Examinations Fee Account

    The Examinations Fee Account provides approximately 20% of the INS' 
funding; funds from the Account are dispersed to virtually every 
program within the INS. Figure 1 illustrates the proposed FY 1998 
funding for the various INS programs through the Examinations Fee 
Account, along with the full time equivalents (FTE) supported by this 
funding (in thousands of dollars).

[[Page 1778]]



                                Figure 1.                               
------------------------------------------------------------------------
                                                  FY 1998               
                                                  Resource   FY 1998 FTE
                    Program                        amount       level   
                                                   ($000)               
------------------------------------------------------------------------
Inspections...................................      $28,618          405
Investigations................................        9,930           92
Intelligence..................................        1,139           13
Adjudication and Naturalization...............      259,696        3,226
International Affairs.........................       92,799          756
Training......................................        4,275           25
Data and Communications.......................       94,555           70
Information and Records Management............      128,836          787
Construction and Engineering..................        1,270            1
Legal Proceedings.............................        6,816           55
Management and Administration.................       18,982          141
                                               -------------------------
      Total...................................     $646,916        5,571
------------------------------------------------------------------------

    The major programs, activities and services funded by the 
Examinations Fee Account are discussed below.
    Inspections. Applications and petitions for a full range of 
benefits under the immigration laws are adjudicated by inspection 
personnel during periods of stand-by time at most ports-of-entry during 
non-peak workload hours. Certain types of applications, such as the 
Form I-193, Application for Waiver of Passport and/or Visa, are 
presented directly at land border ports-of-entry located on the United 
States borders, where they are adjudicated by inspection personnel. The 
Inspection program receives approximately 6% of its total funding from 
the Examinations Fee Account.
    Investigations. Resources from the Examinations Fee Account 
provided to the Investigations program are focused on the detection and 
deterrence of fraud and to protect the integrity of benefits and 
documents legitimately provided by the INS to authorized aliens. The 
Investigations program's concentration on individual applications has 
led to the identification of large-scale production of fraudulent 
documentation. Examinations Fee Account funds are used to target 
complex criminal organizations involved in immigration benefits fraud 
for prosecution. The Investigations program receives approximately 4% 
of its total funding from the Examinations Fee Account.
    Intelligence. This program provides strategic and tactical 
intelligence support to INS offices enforcing the provisions of the 
INA, and assists other Federal agencies in addressing national security 
issues. The INS's Forensic Document Laboratory is a critical component 
of the Intelligence program. Intelligence program support funding from 
the Examinations Fee Account is used to detect fraudulent documents and 
false claims to citizenship and other immigration benefits and 
privileges. The Intelligence program receives approximately 8% of its 
total funding from the Examinations Fee Account.
    Adjudication and Naturalization. The adjudication and 
naturalization program processes, adjudicates, and ultimately grants or 
denies applications and petitions for benefits provided under the INA. 
The Adjudications program is responsible for processing applications 
and petitions for immigration and naturalization benefits, including, 
but not limited to: applications for permanent resident status, 
applications for work authorization, petitions for relatives, 
applications and petitions for immigrant and nonimmigrant workers, 
applications for travel documents, and applications for extensions of 
temporary stay by nonimmigrants in the United States. Naturalization 
processes include the examination of aliens to determine their 
qualifications for naturalization, the issuance of citizenship 
documents, the appearance of INS officials and the conduct of 
administrative naturalization oaths, and the appearance of INS 
officials at Federal and state courts that administer naturalization 
oaths. The Adjudications and Naturalization program operates in field 
offices located throughout the United States, and in four service 
centers located in California, Texas, Nebraska, and Vermont. 
Applications for immigration, nationality and citizenship benefits, and 
naturalization are received and adjudicated by a corps of immigration 
adjudication officers, and adjudication support personnel. District 
officers adjudicate cases that may require personal appearances by 
applicants and petitioners. Service center operations concentrate on 
cases that can be processed without individual appearances and that 
benefit from the economies generated by large volume, production-
oriented processing, where immigration adjudication officers can 
conduct their reviews without interruptions caused by telephone 
inquiries and meetings with applicants.
    Examinations Fee Account revenue is used to process and adjudicate 
applications and petitions for benefits provided under the INA, along 
with providing responses to inquires from the public and private 
sectors. The INS uses funds from the Examinations Fee Account for the 
entire benefits delivery process, from initial information 
dissemination and forms distribution, through the records and files 
activities, case adjudication, and the final close-out of the case and 
file. In the proposed FY 1998 Examinations Fee Account Budget, the 
adjudications and naturalization program requested resource 
enhancements that support the agency's strategic plan and permit the 
INS to build on the progress begun with previous enhancements. These 
resources will support and expand the contract with private vendors to 
provide the records maintenance services necessary to maintain pace 
with expected workload in FY 1998 and the ability to meet the 
challenges posed by new legislation and the associated increased demand 
for a broad range of information. These resources will support and 
expand on the records services provided to the key Districts (New York, 
Los Angeles, Miami, Chicago, and San Francisco), extend the direct mail 
program for naturalization applications to additional districts, 
provide funding for expanding capacity in the service centers, and 
develop pilot automation procedures in the benefits process. The direct 
mail program was instituted by the INS to allow the public to mail 
certain applications and petitions directly to service centers

[[Page 1779]]

where they are receipted and processed on the Computer Linked 
Application Information Management System (CLAIMS); when necessary, the 
applications and petitions are then transferred to district offices for 
interviews and adjudication. Currently, the INS has instituted the 
direct mail program for naturalization applications in four districts: 
New York, Los Angeles, Miami, and Chicago. Additional funding will 
allow for expansion of this program to other INS district offices. 
Service centers will expand capacity and infrastructure so that direct 
mail and CLAIMS may be extended to more districts. CLAIMS is a local 
area network and mainframe system that records and tracks cases for 
immigration and benefits. CLAIMS also includes a receipt tracking 
system in which an application or petition is receipted and then 
adjudicated.
    The resources from the Examinations Fee Account will provide 
naturalization case support to the service centers by modifying CLAIMS 
and re-engineering the naturalization process by developing a 
naturalization module (NATS), within the CLAIMS environment. In 
addition, the Examinations Fee Account will provide resources to 
improve the INS' response to inquiries from the public and private 
sectors and the various branches of government, by telephone, in-
person, and in writing by expanding and consolidating current telephone 
improvement efforts to establish a single
1-800 line that would act as a front-end to all immigration benefit and 
naturalization questions. The single 1-800 line would enable the INS to 
provide information on the status of applications and petitions, accept 
forms requests, and provide information on the requirements for filing 
an application and petition. This 1-800 line will increase the 
accessibility and availability of adjudication and naturalization forms 
and information without the necessity of multiple telephone inquiries. 
Fee revenues will be used to fund the naturalization reengineering 
project being conducted by the INS, the DOJ, and a private contractor. 
The naturalization reengineering will develop pilot programs to 
evaluate options for improving the timeliness and quality of 
naturalization services. The reengineering project will allow the INS 
to encourage and promote naturalization through community outreach and 
public education programs.
    The Adjudications and Naturalization program receives approximately 
99% of its total funding from the Examinations Fee Account.
    International Affairs. The function of this program is to 
adjudicate refugee and asylum applications (which includes conducting 
FBI fingerprint checks of applicants), conduct investigations for 
preference and relative visa petitions, and conduct other records 
checks and background investigations as are required at overseas INS 
offices. Officers assigned to this program also provide assistance to 
citizens and lawful permanent residents abroad regarding adoptions, 
immigration, or parole of alien spouses and children, and other 
benefits under the INA. They also review requests for the Attorney 
General to grant humanitarian parole into the United States for 
deserving persons. The Congress transferred the cost of the Cuban and 
Haitian Entrant Program (CHEP) from the Community Relations Service to 
the INS Examinations Fee Account in 1996. Through grants and 
cooperative agreements, CHEP has responsibility for: (1) The primary 
Resettlement Program, which provides transitional community-based 
resettlement services to Cubans and Haitians paroled from INS 
detention; (2) the secondary Resettlement Program, which provides 
resettlement services, including employment placement and retention at 
specialized sites outside the state of Florida for those Cubans and 
Haitians whose initial resettlement in South Florida did not lead to 
self-sufficiency; and (3) the unaccompanied minors program, which 
provides foster care, residential shelter care, and health, counseling, 
educational, recreational, and family reunification services to 
unaccompanied Cuban and Haitian minors.
    The International Affairs program receives approximately 90% of its 
total funding from the Examinations Fee Account.
    Training. The Training program provides the staff and resources 
necessary to maintain an employee development program that meets the 
training needs of the INS' adjudications and naturalization workforce. 
The Training program provides services through a variety of ways, 
including initial training for Asylum, Immigration Adjudications, and 
Immigration Information Officers that is currently conducted at the 
four INS Service Centers; journeyman-level training for the asylum, 
adjudications, and naturalization workforce at the Federal Law 
Enforcement Training Center facility in Artesia, New Mexico; programs 
conducted by other Federal agencies; programs conducted by private 
contractors; and combined presentations using INS and non-INS 
resources. The Examinations Fee Account provides the Training program 
with resources to fund the costs the program incurs for providing 
adjudication and naturalization workforce training. The Training 
program receives approximately 14% of its total funding from the 
Examinations Fee Account.
    Data and Communications. The Data and Communications program 
develops and operates INS automated information systems that support 
the adjudications and naturalization program, and operates the 
identification card production facility. Adjudications and 
naturalization support systems are currently being integrated and 
consolidated into CLAIMS, which provides adjudication support to 
service centers, district offices, and ports-of-entry. The system, 
which is operating in the service centers and is being installed in 
other field offices, reduces application processing time and response 
time to inquiries. The Data and Communications program also provides 
the administrative support functions for the INS through various 
management systems, both financial and administrative. The Data and 
Communications program receives approximately 25% of its total funding 
from the Examinations Fee Account.
    Information and Records Management. The Information and Records 
Management program provides a variety of services critical to the 
adjudication and naturalization processes. These services include: 
creation of records; records maintenance, storage and tracking; 
response to Freedom of Information Act and Privacy Act requests; 
provision of information, including application forms, to the public, 
both in-person and by telephone, on immigration-related matters; 
compilation, analysis, publication, and issuance of INS statistical 
data. The processing of immigration adjudication and naturalization 
applications and petitions places a high demand for the services of the 
Information and Records Management program; in FY 1998, approximately 
64% of the program's total resources will be funded through the 
Examinations Fee Account.
    Construction and Engineering. The function of this program is to 
provide for the acquisition, design, construction, alteration, repair, 
maintenance, and management of all buildings, structures, and 
facilities that the INS owns or leases, some of which are involved in 
the processing of immigration adjudication and naturalization 
applications and petitions. The Construction and Engineering program

[[Page 1780]]

receives approximately 2% of its total funding from the Examinations 
Fee Account.
    Legal Proceedings. Within the Legal Proceedings program, INS 
attorneys provide support to and/or represent the INS in asylum, 
rescission, naturalization, visa petition, adjustment of status cases, 
registry, sections 212(c) and 241(f), and other examination-related 
cases and matters. In FY 1998, the Legal Proceedings program will 
receive approximately 9% of its total funding from the Examinations Fee 
Account.
    Management and Administration. The purpose of the Management and 
Administration program is to develop, implement, direct, operate, and 
evaluate the administrative support systems and services that meet 
internal operational and managerial needs and externally mandated 
requirements. Included in this program is the responsibility to provide 
executive direction and control of the INS; furnish accurate and prompt 
responses to Congressional and public inquires; administer and maintain 
effective budget and financial management systems; perform audits; 
conduct internal investigations to provide informational responses to 
inquires from the GAO, Office of Inspector General, and OMB, and DOJ 
offices; and develop and evaluate policies and systems to improve the 
effectiveness of INS programs. The major administrative functions 
within this program include personnel; accounting; budgeting; equal 
employment opportunity; procurement; property management; fleet 
management; security; safety and health; and other general services 
that support all programs within the INS. These services provide 
necessary support functions to the personnel and offices involved in 
the processing of immigration adjudication and naturalization 
applications and petitions. The Examinations Fee Account provides a 
portion of the funding for the Management and Administration program. 
In FY 1998, the Management and Administration program will receive 
approximately 11% of its total funding from the Examinations Fee 
Account.

The Immigration Examinations Fee Account Study

    In the proposed rule that preceded the July 1994 fee adjustment, 
the INS acknowledged deficiencies in its fee development process and 
pledged to undertake a process of continuous improvement in the 
management of its fee accounts and the development of its fee 
schedules. In the January 10, 1994 proposed rule, the INS stated:

    INS has initiated a process of continuous improvement in the 
management of the finances of the fee accounts and the development 
of fee schedules. Areas that are being addressed over a projected 
multi-year time horizon include: Identifying the INS resources 
consumed in providing services to our customers which by law must be 
recovered through fee revenues; refining definitions of direct and 
indirect costs; and refining cost measurement systems, in concert 
with wider Department of Justice initiatives to improve financial 
management information systems. (Federal Register, Volume 59, Number 
6, January 10, 1994, pg. 1308)

A. Composition of the Fee Study Team

    As part of the process of continual improvement, the INS formed a 
Fee Study Team composed of INS personnel with expertise in budget, 
accounting, finance, rate setting, and immigration adjudication and 
naturalization processes. This team was supplemented with contracted 
technical support in the areas of Activity-Based Costing (ABC), 
activity process decomposition, and statistical sampling. From July 
1995 until November of 1996, the Fee Study Team conducted a thorough 
review of the activities and costs of the immigration adjudication and 
naturalization services funded through the Examinations Fee Account. As 
a result of this study, the INS determined that the fee schedule of the 
Examinations Fee Account should be revised to reflect the current, full 
cost of immigration adjudication and naturalization services. A copy of 
this study will be provided upon request. Please see the ``For Further 
Information'' section of this rule for details on obtaining a copy of 
the study.

B. INS Fee Setting Methodology

    The INS Fee Study Team employed an ABC methodology to determine the 
cost of the immigration adjudication and naturalization services for 
which a fee is charged. ABC relies on the premise that managers do not 
manage resources directly, but rather manage the activities that 
consume resources. The ABC approach measures costs across an 
organization without regard to functional boundaries and aggregates 
activities into logical process flows that ultimately deliver a 
product, service, or benefit. ABC allows an organization to identify 
costs from start to finish and associates those costs with the 
activities performed by that organization. Through this cross-
functional process analysis, ABC focuses on the causal relationship of 
costs to activities. The FASAB Statement of Federal Financial 
Accounting Standards Number 4, Managerial Cost Accounting Concepts and 
Standards for the Federal Government, encourages the Federal agencies 
to use ABC ``to study its potential within their own operations.'' 
(section 142, pg. 60). The FASAB also notes that ABC has ``gained broad 
acceptance by manufacturing and service industries as an effective 
managerial tool.'' (Id.)
    The ABC methodology uses a two stage approach to assigning costs. 
The first stage assigns resource costs to activities; the second stage 
assigns activity costs to cost objects (for the INS, the cost objects 
are the immigration adjudication and naturalization applications and 
petitions for which a fee is charged). To implement this two stage 
approach, ABC requires: the identification and definition of the 
activities involved in processing immigration adjudication and 
naturalization applications; the examination of budgetary and financial 
records to identify the resources required to conduct immigration 
adjudication and naturalization services; the assignment of these 
resources to the defined activities; and the assignment of activity 
costs to defined immigration adjudication and naturalization 
applications and petitions for which a fee is charged.
    The Fee Study Team also selected a commercially-available ABC 
software to use in computing the immigration adjudication and 
naturalization application and petition fees. This software application 
was specially designed to assign resource costs through activities to 
final cost objects (applications and petitions). The data entered into 
the software was tailored to INS specifications using the pre-existing 
software structure. The software application was a fee calculation 
tool; the Fee Study Team performed the analysis necessary to identify 
the resources consumed in the processing of the various immigration 
adjudication and naturalization applications and petitions, define the 
application and petition processing activities, and develop the causal 
relationships between the resources, the activities, and the 
applications and petitions.

C. Fee Setting Assumptions

    In calculating the proposed fees, the INS matched the resources 
needed to receive and process the new application and petition with the 
workload expected to be received in FY 1998. The adjudications process 
is continuous cycle. At any point in time, there will be applications 
in various stages of processing. This fee study attempted to

[[Page 1781]]

match the resources required to completely process approximately 5 
million applications (of which 4.3 million will be fee-paying 
applications). At the time of the fee study, the INS had a ``backlog'' 
of uncompleted applications in excess of 1.5 million. The cost to 
process this backlog was not included in the resource base for this fee 
study. The cost to process these applications will be paid through the 
carry-over balance in the Examinations Fee Account. This carry over 
balance consists of revenue from backlogged applications and section 
245(i) penalty fees. (The section 245(i) penalty fee is the amount that 
Congress allowed the INS to levy on certain adjustment of status 
applicants. The revenue from the section 245(i) penalty fee was used to 
subsidize the cost of processing immigration adjudication and 
naturalization applications and petitions. In January 1997, Congress 
redirected the use of most of this penalty fee to purposes other than 
immigration adjudication and naturalization application and petition 
processing. The section 245(i) penalty fee was discussed in more detail 
in the section of this document titled ``Sufficiency of the Current Fee 
Schedule.'')

Defining Immigration Adjudication and Naturalization Activities

    In ABC, activities are the critical link to assigning resources to 
cost objects (applications and petitions for which the INS charges a 
fee). For purposes of the Fee Study, a generic model was constructed to 
demonstrate by use of a flowchart the activities involved in processing 
INS applications and to assist in identifying the resources these 
activities and tasks consume. This flowchart, and its accompanying 
text, is the Application Process Model (APM). The APM is a narrative 
and graphical representation of the activities (and their component 
tasks) necessary to process an application or petition. Linked together 
in logical sequence, these activities form a model of the application 
process. The APM models all the possible activities and tasks that are 
involved in processing immigration adjudication and naturalization 
applications and petitions; it does not model a specific application or 
petition. Individual activities or tasks may or may not occur in the 
processing of each application and may depend on the application type 
and the location (i.e., district office, service center) where 
processing occurs. The APM serves as the framework for accumulating 
activity costs. The activity costs are then assigned to each specific 
application and petition based on cycle times. (Cycle times measure the 
frequency and intensity of the demand for activity cost by each 
specific application or petition. Cycle times are discussed later in 
this document.)
    To develop the APM, the INS Fee Study Team visited all of the four 
service centers and eight district offices, taking notes, conducting 
interviews, observing, and dissecting each of the activities involved 
in processing the INS applications and petitions for which fees are 
charged. The Fee Study Team consolidated the results of the 
observations during a series of focus sessions held shortly after the 
end of the field visits. During these sessions, the observed activities 
were arranged sequentially to illustrate the processing flow of an 
application, activities and their component tasks were defined, and the 
inputs and outputs of each activity were identified. To ensure the 
accuracy of the resulting APM, the Fee Study Team validated the results 
with INS and contractual personnel with extensive experience in 
processing immigration adjudication and naturalization applications and 
petitions. These validation sessions were held at INS headquarters and 
at selected field locations. After each validation session, the APM was 
modified and updated.
    The development of the APM focused on actions, not on 
organizational structure or the person or group of persons performing 
the activity. An activity had to be an operationally-related set of 
tasks that occurred over time, have a definite beginning and end point, 
and consume at least five percent and no more than 40 percent of the 
Examinations Fee Account resources. Each activity was defined only 
once, although it was realized that certain activities (or component 
tasks) could occur more than once in processing a specific application 
or petition (this type of application-specific processing would be 
captured in the cycle time analysis).
    The APM attempts to model the logical flow of an application or 
petition from the time it is received by the INS to its final 
disposition. However, the APM may not map tasks exactly in the sequence 
they occur in a specific INS office. A significant criterion for an 
accurate APM is that the activities and their corresponding tasks 
reasonably represent complete work steps. The operational sequence is 
of secondary importance. In visits to the district offices, variations 
in the operational sequence of tasks performed among offices were 
observed. Therefore, when composing the APM, the placement of a task 
(or sequence of tasks) within one named activity rather than another 
activity reflects the Study Team's best judgment of how and where the 
sequence occurred in most district offices or service centers.
    During the development of the APM, it was assumed that as long as 
all tasks are accounted for, the sequence in which they occur would not 
materially affect the outcome of the Study. Within each activity, 
discrete, measurable tasks were identified. Activity and task names 
were chosen to describe clearly definable actions. There is a wide 
variety of terms used within various INS offices for a particular 
activity or task. The Fee Study Team attempted to define each activity 
using a commonly understood term. While a few activity and/or task 
names may not be recognized by practitioners in the field, the 
descriptions of each activity and its subordinate tasks should be 
familiar. The APM must be viewed as a whole with both the graphical 
representation and the accompanying textual definitions.
    The major immigration adjudication and naturalization activities 
defined in the APM are:
    Receive application and petitions, which includes the tasks of 
receiving, opening, screening, batching, and assembling application and 
petitions;
    Record fee, which includes the task of receipting fees, reconciling 
registers, preparing and making deposits, and recording fee information 
into INS program and financial systems;
    Input application data, which includes the tasks of entering data 
from application and petitions into program systems, verifying data, 
and printing current system data;
    Manage records, which includes the tasks of searching and 
requesting files from other INS offices; creating temporary and/or 
permanent alien files; consolidating files; connecting returned 
evidence with application or petition files; pulling, storing, and 
moving files upon request; auditing and updating INS systems on the 
location of files; and archiving inactive files;
    Adjudicate application, which includes the tasks of distributing 
workload; scheduling and conducting interviews, when necessary; 
reviewing, examining, and adjudicating applications and petitions; 
making and recording adjudicative decisions; requesting and reviewing 
additional evidence; and consulting with supervisors, legal counsel, 
and researching applicable laws and decisions on non-routine 
adjudications;
    Prepare outgoing correspondence, which includes the tasks of 
preparing

[[Page 1782]]

interview schedules; coordinating requests for inter and intra-agency 
reports; preparing decision letters and requests for additional 
information; mailing all outgoing correspondence; sending requested 
files to other INS offices; preparing visa packages; and preparing and 
sending cables to United States consulates and INS offices in foreign 
locations;
    Issue end product, which includes the tasks of entering alien 
registration, employment authorization, naturalization, or certificate 
of citizenship information into the appropriate INS system; producing 
the card or certificate, including printing, laminating, and 
inspection; scheduling and conducting naturalization ceremonies; and 
distributing the card or certificates to authorized beneficiaries; and
    Respond to inquiry, which includes the tasks of receiving and 
responding to inquiries on the status of applications and petitions 
filed, or on how to obtain and file the various INS applications and 
petitions. Inquiries can be from applicants, legal representatives, or 
members of Congress and made through telephone calls, written 
correspondence, or walk-in inquiries.
    These definitions are important in understanding the processes 
occurring at each activity and task level and how each process adds 
value to the application or petition.
    The APM includes a detailed definition for each identified task. 
These definitions are important to understanding the processing that 
occurs in each activity and are an integral part of the APM. As noted 
previously, detailed documentation of the Fee Study is available upon 
request, including the complete APM with definitions. Please refer to 
the ``For Further Information'' section of this proposed rule for 
instructions on obtaining this information.

Identifying FY 1998 Examinations Fee Account Resources

    The second step in implementing an ABC methodology is to identify 
the total resources of an organization and to assign these resources to 
the defined organizational activities. The Fee Study Team determined 
that the FY 1998 Congressional Budget for the Examinations Fee Account 
was the best available source of data for determining the cost of 
immigration adjudication and naturalization services.

A. Sources of Cost Information

    Although the INS prepares financial statements for past fiscal 
years, there are problems with relying on financial statements as the 
sole source of resource data. Financial statements are inherently 
historically-focused. They record past events. While financial 
statement analysis can be a useful tool for determining historical 
spending patterns, financial statements do not incorporate anticipated 
program changes, staffing level fluctuations, or planned infrastructure 
improvements. Budgets, on the other hand, formally quantify management 
plans. Federal budgets reflect both policy decisions and program 
operational plans that have received the approval of both the 
Administration and Congress. In the Federal sector, budgets are 
rigorously examined at all levels of agency management, by the 
Administration through OMB reviews, and by the Congress. For these 
reasons, the INS relied on the FY 1998 Congressional Budget for the 
Examinations Fee Account as the base for determining the full cost of 
providing immigration adjudication and naturalization services for the 
ensuing fiscal years (FY 1998 and beyond).
    As discussed earlier, the INS must follow Federal guidance in 
determining its fees for service. Both the FASAB Managerial Cost 
Accounting Standards and OMB Circular A-25, User Charges, require 
agencies to base fees and reimbursements on the ``full'' cost of the 
goods or services provided. The FY 1998 Congressional Budget for the 
Examinations Fee Account was the basis for determining the cost of 
immigration adjudication and naturalization service. However, several 
adjustments to this budget base were made to arrive at the ``full'' 
cost of immigration adjudication and naturalization services. These 
adjustments included deducting amounts from the Examinations Fee 
Account Budget that were not attributable to immigration adjudication 
and naturalization services and adding unfunded costs (i.e., bad debt 
expense, annual leave liability, and contingent liabilities) to the 
budget base. The budget base also includes the cost of asylum and 
refugee processing and the cost of applications processed at no charge 
to the applicant. These services consume resources but do not produce 
revenue; as such, asylum, refugee, and fee-waived costs can also be 
considered ``unfunded.''

B. Adjusting for Land Border Costs

    Two types of fees are deposited into the Examinations Fee Account: 
(1) Fees for services related to immigration adjudication and 
naturalization services, and (2) fees for adjudication services 
provided at land border ports-of-entry into the United States (Land 
Border Services). Fees are charged at the northern and southern United 
States land borders for the processing and issuance of land border 
travel documents, including: non-immigrant records of arrival and/or 
departure, visa waiver non-immigrant records of arrival and/or 
departure, Canadian Border boat landing permits, and the replacements 
of a lost, stolen, or mutilated nonresident alien Mexican or Canadian 
border crossing cards. These land border fees were implemented in 
October of 1996 and were considered too new to be included in this Fee 
Study. (Both the CFO Act and OMB Circular A-25 require a bi-annual 
review of fees for services; the INS will review the adequacy of these 
fees at the appropriate time.) The FY 1998 Examinations Fee Account 
budget, however, is based on anticipated program f unding levels for 
services related to both fee types. To determine the budgeted funding 
level for immigration adjudication and naturalization services, amounts 
budgeted for Land Border Services were subtracted from the total FY 
1998 Examinations Fee Account budget.

C. Determining Unfunded Items

    Federal budgets are based on the amount of obligations that an 
agency plans to incur within the current fiscal year. Federal agencies 
often incur liabilities for actions or events that take place in the 
current fiscal year, but the obligations for those actions or events 
occur in subsequent fiscal years. These unbudgeted expenses are called 
``unfunded items.'' Since the obligation and payment of these amounts 
will take place in future periods, they are not included--or 
``funded''--in the current period budget, hence the name ``unfunded'' 
items. The INS must include amounts for unfunded items in its fees to 
generate sufficient revenue in the Examinations Fee Account to provide 
funding for these items when payment becomes due. The INS must 
recognize three categories of unfunded items: contingent liabilities, 
annual leave, and bad debt expense. Annual leave is vacation time 
earned by INS employees. While annual leave may be earned in one year, 
it may not actually be used until future periods. An amount must be 
added to the resource base to fund the cost of annual leave earned this 
year, but used in another year. A contingent liability is an event or 
existing condition that may result in a financial loss. For the INS, 
contingent liabilities are usually personnel actions, legal actions, or 
contract disputes for which the INS may make a financial settlement or 
perform an additional service. (For example, an employee may

[[Page 1783]]

file a personnel action that results in the payment of back wages, or 
an interest group may bring a legal action to have the INS re-
adjudicate certain classes of applications without the payment of 
additional fees.) When a contingent liability is reasonably probable 
and ``estimatable,'' an agency must record the liability in its 
official books and records and set aside an amount to fund the 
liability when it becomes due and payable. Bad debt expense is incurred 
when an applicant submits an application or petition with a non-
negotiable check. The INS has instituted procedures to prevent, as much 
as possible, the processing of applications and petitions presented 
with a non-negotiable check. However, due to the time lag between the 
deposit of the check and the return for non-negotiability, the INS 
usually incurs some processing costs. Most often, the INS has processed 
the application through the mail room, data entry, and records 
management areas. Holding applications until the accompanying checks 
are cleared would unfairly penalize the vast majority of clients who 
present negotiable checks. However, the fees are calculated at a level 
that recovers the full cost of immigration adjudication and 
naturalization services provided, even those that are provided when a 
non-negotiable check is presented. For that reason, a bad debt expense 
must be calculated and added to the budget base.

D. Total FY 1998 Immigration Adjudication and Naturalization Resources

    The total resource base for FY 1998 immigration adjudication and 
naturalization services is the FY 1998 Examinations Fee Account Budget 
adjusted for the cost of Land Border Services, plus the unfunded items 
discussed previously. The resulting total is the estimated FY 1998 
resources to fund the cost of processing the various immigration 
adjudication and naturalization services for which the INS charges a 
fee, plus the cost of similar services provided at no cost. The 
calculation of total immigration adjudication and naturalization 
application and petition processing resources that were assigned to the 
various applications and petitions is illustrated in Figure 2.

    Figure 2.--Resource Base--Processing Immigration Adjudication and   
            Naturalization Applications and Petitions ($000)            
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FY 1998 Proposed Examinations Fee Account Budget............   $646,916 
 Less: Land Border Costs....................................    (14,623)
Add: Bad Debt Expense.......................................        446 
  Contingent Liabilities....................................      2,500 
  Unfunded Annual Leave.....................................      3,390 
                                                             -----------
      Total FY 1998 Resource Base...........................   $638,629 
------------------------------------------------------------------------

Recommended Cost Assignment Methods

    Once the resource base was determined, the Fee Study Team examined 
each resource type to determine the cost assignment method that best 
links the resource to an activity performed in the processing of 
immigration adjudication and naturalization applications and petitions. 
Activity costs were then assigned to the various applications and 
petitions based on the demand for the activity by the applications or 
petitions. Determining a cost assignment method is important to 
producing accurate results. Cost assignment methods are determined by 
carefully studying the factors that cause a resource to be consumed by 
an activity, and the consumption of activity costs by cost 
applications. The FASAB, in its Statement of Federal Financial 
Accounting Standards Number 4, Managerial Cost Accounting Concepts and 
Standards for the Federal Government, section 11, pg. 3, recognizes 
three types of cost assignments: direct tracing, cause-and-effect, and 
allocation. Determining a cost assignment method depends on (1) the 
materiality of the cost being assigned, and (2) the amount of precision 
gained by using a particular assignment method. The precision of the 
results must be weighed against the time and resources that must be 
expended to develop a cost assignment method. Direct Tracing Cost 
Assignment. When the relationship of the cost to the cost object is 
readily identifiable and measurable, direct tracing is the preferred 
method of cost assignment. An example of direct tracing is direct 
labor. The time and resources devoted to a specific task, product, or 
service can be observed and measured.
    Cause-and-Effect Cost Assignment. When the relationship of the cost 
to the cost object is not readily observable, but can be assumed and 
measured based on another factor, it is called cause-and-effect cost 
assignment. For example, the cost of automated data processing can be 
assumed relational to the number of lines of data entered. A cost 
assignment can be developed using the percentage of lines of data 
entered to total cost.
    Allocation Cost Assignment. In some cases, however, no relationship 
can be developed between the cost and the cost object. For example, the 
cost of a firm's chief executive officer may not be related through 
either direct-tracing or cause-and-effect to the firm's activities or 
cost objects.
    Yet the cost of a chief executive officer, and the cost to maintain 
staff, is vital to the continued operation of the company for, among 
other services, strategic planning, policy decisions, and financing. 
When neither a direct-tracing nor cause-and-effect relationship can be 
established, a cost allocation is used. Allocation is a fair and 
reasonable assignment of cost based on a consistent factor, such as 
number of employees, department budgets, or actual costs. Cost 
allocation can also be used when the costs being assigned are not 
material and it is not cost-beneficial to determine a more precise 
assignment method.

Determining the Amount of Resource Costs to be Assigned to 
Activities

    This section describes how the various cost assignment methods were 
used to distribute costs from the FY 1998 resource base to the 
immigration adjudication and naturalization activities. (See the 
section entitled ``Defining Immigration Adjudication and Naturalization 
Activities'' for a discussion of how the Fee Study Team identified and 
defined these activities.) Several resource costs, however, were not 
assigned to the immigration adjudication and naturalization activities. 
These resources included asylum and refugee costs, resources 
attributable to applications and petitions for which the INS is not 
proposing a fee increase, and any resources that could be immediately 
assigned to a specific immigration adjudication and naturalization 
application or petition.

A. Costs for Asylum and Refugee Services

    Of the $638,629,299 resource base, $92.8 million represents funding 
for the asylum and refugee programs administered by the INS' 
International Affairs program. Applicants for asylum and refugee 
benefits are processed without charge to individuals seeking such 
benefits. Therefore, these costs, and the cost of other refugee and 
asylum benefits, are not classified as direct costs. Congress has 
directed the INS to

[[Page 1784]]

set its immigration adjudication and naturalization fees at a level 
that recovers sufficient revenue to provide asylum and refugee 
services. The cost of the refugee and asylum programs are allocated to 
the fee-based immigration adjudication and naturalization applications 
and petitions as a surcharge. The method used to assign this surcharge 
is discussed later in this proposed rule.

B. Applications and Petitions for Which the INS is not Proposing a fee 
Increase

    The intent of the Fee Study was to determine the full cost of the 
immigration adjudication and naturalization applications and petitions 
for which the INS charges a fee, and to adjust the fees charged for 
these applications and petitions based on cost. There are over 40 
immigration adjudication and naturalization applications within the 
Examination Fee Account Fee Schedule. Some of these applications are 
filed in large numbers. For example, 11 applications and/or petitions 
types account for more than 97% of the total volume of applications and 
petitions filed annually. The remaining applications and petitions are 
filed much lower volumes.
    This Fee Study was based, in large part, on the actual observation 
and measurement of the time needed to perform the various immigration 
adjudication and naturalization activities. Since these ``small 
volume'' applications are filed much less frequently, actual 
observation of the processing of these applications by the Fee Study 
Team was difficult. The Fee Study Team could not observe a sufficient 
number of these ``small volume'' applications to satisfy statistical 
sample requirements. Some of these ``small volume'' applications were 
so infrequent that it was impossible for the Fee Study Team to find a 
service center or district office that processed the application within 
the past year. For example, in FY 1995, only one office reported 
receiving the Form N-644, Application for Posthumous Naturalization. 
Since these ``small volume'' applications are filed infrequently, the 
INS determined that the most reasonable approach was not to revise the 
fees for these applications as part of the recently completed fee 
study. These ``small volume'' applications may be reviewed and their 
fees may be revised as the result of future fee studies.
    There are also certain applications that have an altogether 
different and complex process. These applications are appeals of 
previously adjudicated applications, and motions to reopen or 
reconsider a case. Applications for appeals and motions to reopen can 
be received by either the INS or the Executive Office of Immigration 
Review (EOIR), and are adjudicated by either the Board of Immigration 
Review or Immigration Judges. Adjudication of these forms involve 
numerous organizations within the INS, and different agencies within 
the DOJ. Because of their scope, variation, and complexity, these forms 
were not reviewed during the recently completed Fee Study. A thorough 
review of the processes and costs of the appeals and motions to reopen 
is required and will be performed in a subsequent study.
    The applications and petitions for which the INS is not proposing a 
fee increase in this proposed rule include: Form EOIR-26, Appeal of 
decision of Immigration Judge over which the Board of Immigration 
Appeals has appellate jurisdiction; Form EOIR-29, Appeal of decision of 
INS over which the Board of Immigration Appeals has appellate 
jurisdiction; Form I-256A, Application of Suspension of Deportation 
under section 244 of the Act; Form I-290B Notice of Appeals to the 
Administrative Appeals Unit; Form I-360, Petition for Amerasian, 
Widow(er), or Special Immigrant; Form I-821, Application for Temporary 
Protected Status; Form N-300, Application to File Declaration of 
Intention; Form N-336, Request for Hearing on a Decision in 
Naturalization Proceedings under section 336 of the Act; Form N-470, 
Application to Preserve Residence for Naturalization Purposes; and 
Motions to Reopen.
    The amount of resources attributable to these ``small volume'' 
applications, and applications for appeals and motions to reopen had to 
be deducted from the total FY 1998 immigration adjudication and 
naturalization resource base. If such resources were not deducted, the 
INS would have attributed all immigration adjudication and 
naturalization resources to the fees that were the subject of this 
Study. As a result, the cost of the revised fees would have been 
overstated. To avoid this potential ``double charging,'' the INS 
projected the number of ``small volume'' applications, applications for 
appeals, and motions to reopen that it expects to be filed in FY 1998. 
This projected volume was multiplied by the current fee for these 
applications to approximate FY 1998 costs (using the assumption that 
for these applications, appeals, and motions to reopen, revenue equals 
costs). This amount, $6.5 million, was deducted from the FY 1998 
immigration adjudication and naturalization resource base.

C. Resources Immediately Assignable to Specific Applications and 
Petitions

    Additionally, there were also several budgeted items that could be 
assigned immediately to an application or petition, or a specific group 
of applications and petitions, without first being assigned to an 
activity. These costs were specifically identified in budget proposals. 
The costs immediately attributable to a specific application or group 
of applications are:
    $32,548,000 to improve the direct mail initiative to improve 
efficiency of service center operations; this amount was assigned to 
all applications received at the INS service centers;
    $17,800,000 to improve Records Management at INS district offices; 
this amount was assigned to all applications received at INS district 
offices;
    $26,922,000 to improve the automated application processing 
infrastructure; this amount was assigned to all immigration 
adjudication and naturalization applications;
    $4,210,000 to enhance computer systems that provide naturalization 
support; $29,866,000 to increase naturalization processing, including 
additional funding for Federal Bureau of Investigation clearances, 
increased funding for ceremonies and oaths, and contract support for 
improved automated case management; and $1,940,000 to maintain 
naturalization processing at FY 1997 levels; these amounts were 
assigned directly to the N-400, Application for Naturalization; and
    $1,000,000 to enhance the computer system that provides case 
tracking and interview scheduling for adjustment of status 
applications; and $5,804,000 for increased processing of adjustment of 
status cases; these amounts were assigned directly to the Form I-485, 
Application to Register Permanent Residence or Adjust Status.

D. Amount of FY 1998 Immigration Adjudication and Naturalization 
Resources Assigned to Activities

    The amount of immigration adjudication and naturalization resources 
that were assigned to activities was determined by subtracting from the 
resources base the resources immediately assignable to specific 
applications or petitions and the imputed costs attributable to small 
volume applications, appeals, and motions to reopen. The cost of asylum 
and refugee services was assigned to each application and petition 
using an allocation cost assignment method. The allocation method used 
for asylum and refugee cost is discussed later in this proposed rule.

[[Page 1785]]

Assigning Immigration Adjudication and Naturalization Costs From 
Resources to Activities

A. Assigning Personal Services and Benefits Costs

    The single most significant resource consumed in providing 
immigration adjudication and naturalization services is Personal 
Services and Benefits (PS&B) costs. PS&B is composed of the salary paid 
to INS employees (both permanent and temporary) to perform immigration 
adjudication and naturalization services, plus the government share of 
benefits accrued by INS employees. These benefits include, but are not 
limited to, retirement, health insurance, life insurance, and social 
security payments. For FY 1998, PS&B costs account for approximately 
45% of immigration adjudication and naturalization resources ($280.5 
million of the total resource base of $638.6 million).
    To achieve a high level of precision in assigning resource costs to 
activities, the INS assigned PS&B resource costs to the pre-defined 
immigration adjudication and naturalization activities by job series. 
In the Federal sector, each personnel position is identified by a job 
series number and description. This job series designation defines the 
duties required and the performance expected for each Federal personnel 
position. Personnel assigned to each job series have differing 
responsibilities in the immigration adjudication and naturalization 
processes. For example, Immigration Adjudication Officers devoted more 
time adjudicating applications and petitions than clerical positions; 
Immigration Information Officers may spend more time responding to 
inquiries than an Immigration Adjudication Officer; supervisory 
personnel usually expend their time in very different patterns than 
those they supervised, and so on. It was logical to assume that 
attributing PS&B costs by job series would result in more precise cost 
assignment than if the PS&B costs were assigned as a single cost pool.
    To make PS&B resource assignments by job series, the Study Team 
determined the amount of PS&B costs budgeted for each job series in FY 
1998. The Study Team then determined the average percentage of time 
each job series spent on the eight pre-defined immigration adjudication 
and naturalization activities. The INS does not develop its budget by 
job series costs; rather, each program estimates an aggregate PS&B 
costs when formulating their budget. To assign PS&B costs by job 
series, the budgeted FY 1998 PS&B costs had to first be assigned to 
each job series based on historic obligation percentages. (Obligations 
are binding agreements that will result in the expenditure of budgetary 
resources, either immediately or in the future.) PS&B obligations are 
incurred each time the INS pays it employees for services. Each pay 
period during the fiscal year, the INS updates its Pay Database with 
the current amount of PS&B that has been obligated and paid. In 
simplest terms, the budget provides the spending authority and the 
spending plan, the Pay Database tracks what has been spent. The INS Pay 
Database tracks actual PS&B obligations by account, program, job 
series, FTE, and amount. The INS Pay Database provided an excellent 
source of data to determine actual PS&B obligation patterns. These 
patterns, expressed as percentages, were used to dis-aggregate the FY 
1998 PS&B costs from program and OMB Object Class detail to job series 
detail, by amount and FTE.
    Once determined, the estimated FY 1998 PS&B job series amounts were 
assigned to the eight pre-defined immigration adjudication and 
naturalization activities. These activities are an ABC tool and were 
defined and created as a part of this Study. These activities are not 
data elements for either preparing the INS budget or for tracking 
obligations and expenditures in the Pay Database. Assigning PS&B job 
series costs to the immigration adjudication and naturalization 
activities required determining the amount, or percentage, of time 
personnel in each job series spent performing the various activities. 
Since no reports existed that would provide us with this information, 
the Study Team developed a survey to gather this information.
    A representative sample of the INS personnel in each job series 
completed these surveys. The Study Team conducted extensive field 
visits to gather the cycle time data to assign activity costs to 
applications. To prevent bias in data collection, all sites visited 
were randomly selected. During the site visits, Study Team members also 
conducted interviews with representative personnel from the various job 
series. The Study Team asked the persons interviewed to provide their 
expert opinion on the amount of time spent performing the various pre-
defined activities. The responses were then weighted by the application 
volumes of each office. Since the responses were representative 
samples, a response from an office that processes a high volume of 
immigration adjudication and naturalization applications and petitions 
should have a correspondingly higher weight than responses from an 
office that processes smaller volumes. For example, estimates of 
activity time for job series 1801, Adjudication Officers, assigned to 
Miami (with a total of 132,213 applications processed) was given 
greater weight in the calculation than the estimate from an 
Adjudication Officer assigned to Omaha (11,785 applications processed). 
The final step in assigning PS&B costs required applying PS&B amounts 
in each job series to the immigration adjudication and naturalization 
activities based on the weighted average percent derived from the time 
usage survey.

B. Assigning General Expense Costs to Activities

    For the purpose of this study, General Expenses (GE) represent all 
costs other than PS&B costs. The INS budgets, monitors, and reports its 
GE costs by OMB Object Class Codes. OMB Object Class Codes are used 
throughout the Federal government to budget and report costs by the 
nature of the service or goods procured. Segregating costs by OMB 
Object Class Codes provided the Fee Study Team with an excellent method 
of analyzing costs by their specific nature and determining an 
assignment method that is best related to how the resource costs are 
consumed by activities. Some GE costs could be directly traced to a 
specific immigration adjudication and naturalization activity, while 
others could be assigned by a cause and effect assignment methods. When 
analysis did not provide a means for either direct tracing or cause and 
effect assignment, costs were assigned using an allocation method based 
on the total PS&B costs assigned to each activity. (See the previous 
discussion of PS&B cost assignment.)
    The Fee Study Team reviewed the FY 1998 Examinations Fee Account 
Budget to determine which GE items could be directly traced from the 
resource base to the immigration adjudication and naturalization 
activities. The following costs were assigned directly to immigration 
adjudication and naturalization activities:
    $3,000,000 for the cost of enhancements to fingerprint collection 
and clearance process were assigned direction to the ``Adjudicate 
Application'' activity;
    $1,250,000 for the cost of enhancements to the Central Index 
System, and $2,643,00 for the Cost of hardware and software to enhance 
the records management infrastructure were assigned directly to the 
``Manage Records'' activity;

[[Page 1786]]

    $4,262,262 for the cost of postage were assigned directly to the 
``Prepare Outgoing Correspondence'' activity;
    $13,989,000 for the cost of card production were assigned directly 
to the ``Issue End Product'' activity; and
    $4,243,000 for the cost of improving public access to information 
and forms, $2,113,000 for the cost to create, train, and support 50 
positions that will specialize in improving community and customer 
relations as well as train other INS service providers, and $9,500,000 
for the cost of creating a single INS 1-800 telephone line that will 
act as a front end to all non-enforcement related questions were 
assigned directly to the ``Respond to Inquiry'' activity.
    Facilities and Utilities costs were assigned to the immigration 
adjudication and naturalization activities using a cause-and-effect 
cost assignment method based on the amount of space used by each 
activity. To determine the square footage of space by specific 
activity, the Fee Study Team devised a square footage survey. The 
square footage survey was conducted at all four INS service centers, 
and at district offices located in Los Angeles, Phoenix, San Antonio, 
Miami, Omaha, Kansas City, Philadelphia, and Boston. These district 
offices were randomly selected as sites for cycle time data collection 
(discussed later in this document) and were assumed to be 
representative of all INS district offices. The square footage survey 
was conducted by interviewing administrative officers at the various 
sites, observing space usage, and reviewing site-specific floor plans.
    The survey results were analyzed and converted into percentages 
that were used to assign facilities and utility costs to the various 
immigration adjudication and naturalization activities. The percentage 
of floor space dedicated to a particular activity was weighted by 
relative size of the facility. For example, at the California Service 
Center, 143,338 total square feet, has ten percent of its floor space 
dedicated to the ``Receive Application'' activity, whereas the 
Philadelphia District Office, 41,380 total square feet, has five 
percent of its floor space dedicated to the same activity. A simple 
average of the two percentages ((10% + 5%)/2=7.5%) does not take into 
account the relative size of the offices. When weighted by applications 
processed, the resulting percent for ``Receive Application'' square 
footage for all facilities surveyed was 9%.
    The remainder of GE costs were assigned using an allocation method. 
This method was based on the percentages derived from the PS&B labor 
survey. The following is a brief discussion of the various types of GE 
costs assigned to activities by cost allocation:
    Costs incurred for the transportation of Government employees, and 
their per diem allowances, are only authorized for payment when travel 
is for missions of public service.
    Costs are incurred for the freight and express transport of 
government equipment, authorized movement of employees' household goods 
and parcel post and express mail transportation. Historically, 87 
percent of these costs are related to the transportation of employees' 
property; the use of the PS&B resource assignment method was determined 
to be the best assignment method.
    The INS receives three types of telecommunication's bills: Federal 
Telephone System local, data communications, and long-distance voice 
toll calls. The General Services Administration bills these services to 
the INS through the DOJ. Both the GSA and DOJ add a service charge to 
the communications billing to cover their administrative costs. The 
amount assigned to each INS fee account is based on the number of INS 
employees budgeted to each account. Within the Examination Fee Account 
the cost of communication was allocated to each activity based on the 
PS&B labor survey.
    Costs incurred for contractual printing by the Government Printing 
Office and commercial printers were examined to determine if a 
relationship could be established between this cost category and the 
specific applications and petitions under review for this Study. Since 
no relationship could be established, the Fee Study team used the PS&B 
percentages as an equitable method for assigning these costs to the 
immigration adjudication and naturalization activities.
    The Fee Study Team carefully examined the amounts budgeted for OMB 
Object Class 25.0, Other Services, and was able to directly trace a 
significant portion of these costs to a particular immigration 
adjudication and naturalization activity, application or petition, or 
group of applications and petitions. These costs have been previously 
discussed in this proposed rule.
    All remaining costs budgeted under this OMB Object Class were 
assigned using the PS&B percentages, a consistent and equitable cost 
assignment method.
    Supplies and materials are costs for consumable commodities that 
are ordinarily used within one year of purchase. Supplies and Materials 
include office supplies, ADP supplies, and miscellaneous supplies and 
materials. While examining the underlying accounting records related to 
supply and material resources consumed, the Fee Study Team determined 
that these costs were not directly traceable to the applications under 
review for this Study. As a result, use of PS&B percentages was used as 
a reasonable and consistent cost assignment method for this cost 
category.
    Equipment costs include the purchase of property that is normally 
expected to have a period of service of a year or more. While examining 
the underlying accounting records related to the purchase of equipment, 
the Fee Study Team determined that the purchase of most equipment, 
particularly computer hardware, provides a benefit for all application 
and petitions. However, certain equipment purchases were directly 
traceable to specific activities or applications and petitions, and 
have been discussed previously.
    Once PS&B and GE costs were assigned to activities, the ABC 
methodology dictates that the activity cost should then be assigned to 
the cost objects. (For purposes of this Fee Study, the cost objects are 
the immigration adjudication and naturalization applications and 
petitions for which the INS charges a fee.) The cost assignment method 
used to ``drive'' activity costs to the immigration adjudication and 
naturalization applications and petitions was cycle times. The 
following sections discuss the cycle times and the data gathering 
necessary for their development.

Cycle Time Development

    As stated previously, ABC uses a two-step cost assignment process. 
Costs are first assigned from resource pools to activities, and then 
activity costs are assigned to cost objects. (For the purposes of this 
Study, the activities are those defined in the APM that were discussed 
previously in this proposed rule, and the cost objects are the various 
immigration adjudication and naturalization applications and petitions 
for which the INS charges a fee.) The Fee Study Team used cycle times 
as a cause-and-effect assignment method to distribute activity costs to 
the various immigration adjudication and naturalization applications 
and petitions. Cycle times measure the frequency and intensity of the 
consumption of activity costs by the various immigration adjudication 
and naturalization applications and petitions. Cycle times are the 
``drivers'' that assign activity costs to the various applications and 
petitions. The cycle

[[Page 1787]]

time measures the amount of time needed to complete each activity in 
the processing of the various immigration adjudication and 
naturalization applications and petitions. Developing cycle times that 
accurately reflected application and petition processing times involved 
the following: developing a statistically-valid sampling plan, the 
random selection of a representative sample of INS offices from which 
to collect cycle time data, the development of data collection 
procedures to control sampling bias, the actual collection of cycle 
time data, the review and analysis of the cycle time data collected, 
and the use of the cycle time data to assign activity costs to the 
immigration adjudication and naturalization applications and petitions 
for which the INS charges a fee.

A. Developing the Statistical Sampling Plan

    To ensure the representativeness, accuracy, and defensibility of 
the cycle times used in activity cost assignments, the data collected 
during this effort had to be randomly selected and unbiased. The Fee 
Study Team devised a statistical sampling plan for cycle time data 
collection that ensured the integrity of the data, standardized data 
collection procedures, and eliminated bias in data collection. The 
statistical plan outlined the Team's methodology for determining the 
sampling method, clustering, selecting sites and applications to be 
observed, assigning the number of observations, controlling for sample 
bias, and making adjustments.
    Sample Size. Statistical sampling assumes that a representative 
sample of a population has the same characteristics of the population 
as a whole. A statistical sampling plan must include a sample size that 
ensures that the samples observed do, indeed, reflect the 
characteristics of the total population. Several factors influence the 
size of the sample: the desired confidence level, the size of the 
population samples, the expected rate of data collection (or the ``miss 
rate''), and the number of activities observed.
    Confidence Interval. By using a statistical formula with a 95% 
confidence interval, the Fee Study Team determined that 200 
observations were necessary for each of the common and unique 
activities. Establishing a level of precision or a confidence interval 
of 95% ensures confidence that the data collection was both 
representative and statistically significant. This level of confidence 
was selected for its high reliability, accuracy, and acceptability in 
organizational research. Selecting a confidence interval of 95% places 
a high level of confidence in the results, provides the precision of 
measurement necessary for extrapolating the results, and is sufficient 
in cases of legal defensibility. The INS sampling plan guarantees that 
the number of required cycle times for the Fee Study is statistically 
correct.
    Population Size. For this Study, the statistical sample included 
all applications and petitions with FY 1995 completed volumes of 
greater than 10,000, as reported in the Performance Analysis System 
(PAS). (The PAS is a management and work load measurement system that 
records application volumes and associated work hours.) The Fee Study 
Team used FY 1995 PAS data, the most recent complete year of data 
available during the conduct of the Fee Study. The applications and 
petitions with a volume of 10,000 annually represent 99.5% of all 
applications and petitions processed by the INS, and were the focus of 
the on-site observations for cycle time data gathering. For the most 
part, the Study did not include applications with a volume of less than 
10,000 completions because of the low probability of actually observing 
cycle times in statistically sufficient numbers for these applications. 
Also, these applications account for less than 1% of the total revenue 
deposited into the Examinations Fee Account each year. The Fee Study 
Team developed alternate methods to determine cycle times for the 
unobserved applications and petitions. Methods used to develop cycle 
times for the lower volume applications included the use of expert 
opinion to determine when to apply observed cycle times to similarly 
processed applications and petitions that were not observed, and the 
use of experts to provide estimated cycle times for the lower volume 
applications. Figure 3 lists the applications observed in the cycle 
time data gathering phase of the fee study.

       Figure 3.--List of the Applications and Petitions Observed       
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
I-90..............................  Application to Replace Alien        
                                     Registration Card.                 
I-102.............................  Application for Replacement/Initial 
                                     Nonimmigrant Arrival/Departure     
                                     Document.                          
I-129 1...........................  Petition for Nonimmigrant Worker/   
                                     Classify Nonimmigrant as Temporary 
                                     Worker or Trainee/Employ           
                                     Intracompany Transferee.           
I-129F............................  Petition for Alien Fiance(e).       
I-130.............................  Petition for Alien Relative.        
I-131 2...........................  Application for Travel Document.    
I-140.............................  Immigrant Petition for Alien Worker.
I-485.............................  Application to Register Permanent   
                                     Residence or Adjust Status.        
I-539.............................  Application to Extend/Change        
                                     Nonimmigrant Status.               
I-600 3...........................  Petition to Classify Orphan as an   
                                     Immediate Relative/Application for 
                                     Advance Processing or Orphan       
                                     Petition.                          
I-724 4...........................  Waiver Forms.                       
I-751.............................  Petition to Remove the Conditions on
                                     Residence.                         
I-765.............................  Application for Employment          
                                     Authorization.                     
I-817.............................  Application for Voluntary Departure 
                                     under the Family Unity Program.    
I-824.............................  Application for Action on an        
                                     Approved Application or Petition.  
N-400.............................  Application for Naturalization.     
N-565.............................  Application for Replacement         
                                     Naturalization/Citizenship         
                                     Document.                          
N-600.............................  Application for Certification of    
                                     Citizenship.                       
N-643 5...........................  Application for Certificate of      
                                     Citizenship in Behalf of an Adopted
                                     Child.                             
------------------------------------------------------------------------
\1\ The I-129 includes the I-129, I-129H, and I-129L.                   
\2\ The I-131 includes the Reentry Permit and Advanced Parole.          
\3\ The I-600 includes the I-600A.                                      
\4\ The I-724 includes all six of the Waiver Forms--I-191, I-192, I-193,
  I-212, I-601, and I-612.                                              
\5\ N-643 fell below the 10,000 volume limit for population size;       
  however, during our visit to the Buffalo District Office sufficient N-
  643 applications were available for sampling.                         

    ``Miss'' Rate. The Fee Study Team allowed for the possibility of 
data collection ``misses'' in the statistical sampling plan and ``built 
in'' additional observations above the 200 needed for a 95% confidence 
level to guarantee that a statistically valid sample size would be 
obtained. Data collection ``misses'' constitute possible observations 
discarded as a result of inconsistencies in recording cycle times, 
incomplete observations due to faulty equipment or interruptions that 
caused the timer to halt an observation, and the possibility that 
applications and petitions scheduled to be timed may not have been 
available in sufficient numbers at the planned site visits. The Fee 
Study Team recognized that at any scheduled site the number of 
applications and petitions available for processing may not match the 
number anticipated in the statistical sample plan. This could happen 
for a number of reasons, such as applicants failing to appear for 
scheduled interviews, applications and petitions not being filed in the 
numbers anticipated while the Fee Study Team

[[Page 1788]]

was on-site, or the actual applications available for processing during 
site visits varied from the applications reported as available during 
the time when the sample plan was developed. (The Fee Study Team 
observed applications and petitions that were available and scheduled 
for processing while on-site; they did not interrupt the normal work 
flow at the various INS district offices or service centers.) Each 
application had a reserved ``miss'' rate based on the volume of 
applications required for the statistical sample; the higher the 
application volume, the lower the assigned ``miss'' rate. Increasing 
the lower volume of application sample sizes to hedge for ``misses'' 
was necessary to ensure that adequate sample sizes would be collected.
    Common and Unique Activities. The Fee Study Team divided the sample 
into two categories based on the APM: common activities and unique 
activities. Common activities are those activities that are completed 
in the same amount of time regardless of the type of application or 
petition. For example, the amount of time required to open an envelope 
containing an application or petition is basically the same for all 
application and petition types; the amount of time to record a fee is 
the same regardless of form type, and the time required to request a 
file is similar for all applications and petitions. Regardless of the 
type of application or petition, the time to perform an activity or 
task is similar. With unique activities, the processing time is 
directly linked to the type of application or petition filed. For 
example, adjudication of each type of application and petition is based 
on specific sections in the INA, and requires specific documentation 
and adjudicative review. This, logically, makes the ``Adjudicate 
Application'' activity unique depending on the type of application or 
petition observed. Some applications require the production of a 
certificate or card that identifies the bearer as eligible for a 
specific benefit (such as Form I-766, Employment Authorization 
Document, or a N-550, Certificate of Naturalization). The time to 
produce an ``End Product'' is unique to the type of card or certificate 
created. Of the eight immigration adjudication and naturalization 
activities, six were designated as ``common'' and two as ``unique.'' 
The six common activities are: Receive Application/Petition, Record 
Fee, Input Application Data, Manage Records, Prepare Outgoing 
Correspondence, and Respond to Inquiry. The two unique activities are: 
Adjudicate Application and Issue End Product.
    The designation of ``common'' or ``unique'' had a direct bearing on 
the sample size. As stated earlier, each activity required a sample 
size of 200 for a 95% confidence level. For each common activity, the 
total sample size which includes all applications and petitions was 
200. For unique activities, the total sample size was 200 for each type 
of application and petition observed. Since the Fee Study Team observed 
18 application and petition types, the sample size for the two unique 
activities, Adjudicate Application, and Issue End Product, was much 
larger. For the ``Adjudicate Application'' activity, the sample size 
was 3,600 (the 18 observed applications and petitions times 200). For 
the ``Issue End Product'' activity, the sample size was 1,400 (the 
seven applications or petition types that require an end product 
multiplied times 200).

B. Site Selection

    Clustering. Determining which sites to visit for data collection 
was based on clustering. Clustering, the grouping of similar items, is 
a widely accepted technique used to achieve the most representative 
sample of a population (total set of items to analyze). For this study, 
INS offices of comparable size were grouped together into four clusters 
based on operating environments and the volume of applications and 
petitions processed: service centers, large district offices, medium 
district offices, and small district offices. The large district office 
cluster included those offices with a processed volume of more than 
50,000 applications annually, the medium district office cluster 
included offices that processed more than 20,000 applications annually, 
but less than 50,000, and the small district office cluster included 
offices that processed less than 20,000 applications annually. After 
determining the four cluster groups, the Fee Study Team randomly 
selected 15% of the offices within each cluster to visit for data 
collection. Selecting 15% of offices within each cluster ensured that 
the data gathered from the sites were representative of the different 
size offices. The 15% selection rate is commonly accepted in 
statistical sampling for selecting samples within a cluster, and helped 
insure that a representative sample of office sizes was selected for 
data gathering. Without clustering, the possibility existed that large, 
medium, or small size district offices could have been overly 
represented in the number of offices chosen. This may have skewed the 
sample and increased the potential for cycle time biases. The 
combination of clustering and randomly selecting 15% of each cluster 
also served to reduce the cost and time of gathering data when sampling 
a large and widely dispersed population.
    Selecting 15% of offices within each cluster resulted in the random 
selection of two sites from the large district office cluster, three 
sites from the medium district office cluster, and two sites from the 
small district office cluster. The sites selected included: Miami and 
Los Angeles as large district offices; Honolulu, San Antonio, and 
Phoenix as medium district offices; and Kansas City and Omaha as small 
district offices.
    Adjustments to the Site Selections. The site selections were 
adjusted for various reasons: cost considerations, geographical 
representation, or insufficient data collection as the site visits 
proceeded. After reviewing the geographical dispersion of the original 
sites selected, the Fee Study Team determined that district offices 
located in the northeastern United States were not represented, even 
though a large number of immigration adjudication and naturalization 
applications and petitions are received and processed by offices 
located in the northeast. To ensure geographical representation, an 
additional office was randomly selected from a pool of district offices 
located in the northeastern United States. The Boston District Office 
was randomly selected through this process. The Honolulu District 
Office was removed from the site selection list due to cost and time 
constraints involved in visiting that office. From the pool of offices 
remaining in the medium district office cluster, the Fee Study Team 
randomly selected the Philadelphia District Office to replace the 
Honolulu District Office. The Baltimore District Office was added to 
the medium district office list to observe its use of CLAIMS. The 
Baltimore District Office is piloting CLAIMS at the district office 
level. At the conclusion of the site visits, the Fee Study Team 
discovered that they had observed an unacceptably low number of the 
Form N-565, Application for a Naturalization or Citizenship Paper, and 
the Form N-600, Application for Certification of Citizenship. To bring 
the sample size to acceptable levels, the Buffalo District Office was 
visited to collect additional data on these applications. The Buffalo 
District Office was chosen for the Form N-565 and Form N-600 data 
collection because they had these forms available in sufficient numbers 
for observation. Visiting the Buffalo District Office also afforded the 
Fee Study Team the opportunity to visit the Toronto, Canada

[[Page 1789]]

pre-inspection site to observe processing of the Form I-192, 
Application for Advanced Permission to Enter as Nonimmigrant. This 
additional visit was required because the planned site visits did not 
encompass a field office with an available supply of this waiver form 
for the Fee Study Team to observe and time. Toronto is the predominant 
INS office for processing the Form I-192 and sufficient numbers of 
these forms were available for observation to develop a statistically 
sound sample size.
    Service Center Site Visit Selection. Service centers were clustered 
separately. Since service centers process high volumes of applications, 
their operating procedures were very different from district offices. 
In addition, service centers usually process applications that do not 
require an interview and are not usually processed in district offices. 
The INS has four service centers; only one service center had to be 
visited to satisfy the 15% representation rule. The Nebraska Service 
Center, unlike the district offices visited, was not randomly selected 
for a site visit. The Fee Study Team decided to select the Nebraska 
Service Center since the Nebraska Service Center was the only service 
center that processed all types of applications, including the Form I-
131, Application for Travel Document. To ensure that there was no bias 
in the data due to possible differences in operating procedures in the 
various service centers, the Fee Study Team decided to visit the other 
three service centers to collect a pro-rata share of common activity 
observations and a limited number of unique observations for specific 
applications and petitions.
    Site-Specific Sampling Plans. After determining the number of 
observations needed for each of the common and unique activities and 
determining the sites to visit, observations were divided by activity 
among the field sites. This process required distributing the number of 
observations needed among the selected sites based on the volume of 
each application and petition processed at each selected site. This was 
accomplished by establishing a ratio of the processing volume for each 
selected site using the FY 1995 PAS data. As field office data 
collection progressed, the sampling plan was adjusted, as necessary, to 
ensure adequate data collection. If the required number of applications 
and petitions were not available at a planned site visit, the shortage 
was pro-rated to the future site visit sampling plans. For example, 
prior to the Miami District Office site visit, the sampling plan was 
adjusted to increase the number of planned observations of the N-565, 
Application for Replacement Naturalization Citizenship Document and 
Form N-600, Application for Certification of Citizenship, to reflect 
the shortage of data collection for those forms at other sites. The 
site specific sampling plans are available for public inspection. 
Please refer to the FOR FURTHER INFORMATION CONTACT section for 
instruction on obtaining this information.

C. Controlling Sampling Bias

    The Study Team took precautions to ensure that all data collectors 
maintained a high level of consistency and accuracy when gathering 
cycle time data. This was achieved through standard operating 
procedures, training, uniform timing equipment, and the random 
selection of applications and personnel observed at each site.
    Training. To ensure consistency in data collection, the Fee Study 
Team developed standard operating procedures for data collection and 
provided training on cycle time data collection procedures. All data 
collectors were required to attend the training, which was conducted by 
contracted statistical sampling specialists. Participants received 
instructions on standard procedures for measuring and recording data, 
including an overview of how to control response and observation 
biases. To reduce the response bias, the training provided the data 
collectors with guidelines on how to interact with personnel being 
timed, their role as a data collector, and the purpose of the 
observations. Data collection bias was also reduced through the use of 
uniform and consistent measuring equipment and a uniform recording 
medium (optical scan forms). Data collectors were also trained on the 
use of the Activity/Task Definition Report to identify the specific 
activities/tasks being timed and standard start and stop points for 
each observation. Procedures were also developed to help data 
collectors identify anomalies that may compromise an observation, such 
as interruption in the work flow, and how to manage such situations.
    Selection of Observed Employees. The personnel observed at site 
were selected randomly. All site personnel had an equal chance for 
selection, regardless of their work experience. The Fee Study Team 
randomly selected employees to be observed using a list of employees 
provided by site management and a random number table to select 
employees from the list. Participation by site personnel was voluntary 
and no identifying information on the personnel observed, other than 
length of experience, was placed on the optical scan form. This 
procedure helped reduce any bias on the part of the personnel observed.
    Selection of Observed Applications/Petitions. The Fee Study Team 
recorded observations at the randomly selected sites, with any 
application or petition having an equal chance of being observed. 
Applications and petitions are processed at INS offices in a first-
come, first-served manner. That order was preserved for the Fee Study 
observations. Applications or petitions were observed in the order they 
were received at the various offices visited. Individual applications 
or petitions were not reviewed by any INS official or Fee Study Team 
member to determine whether they would or would not be observed.
    Recording Data. To standardize cycle time data collection, the Fee 
Study Team developed an optical scan form that lists the activities and 
tasks of the APM and provides areas for the data collectors to record 
the Activity/Task Observed, Decision, Application type, Number of 
Employees Observed, Batch Size, Time, Employee Experience, Date, 
Location, and Timer Code. The Activity/Task Definition Report was 
extremely important to obtain consistent and accurate cycle times. The 
definitions provided the timers with the information required to ensure 
that the data collectors placed their observations under the proper 
activity/tasks.

D. Collection of Cycle Time Data

    From June to September 1996, the Fee Study Team collected data at 
the district offices and services centers selected for cycle time data 
gathering. During this period, the Fee Study Team made over 50,000 
observations of the various tasks and activities involved in processing 
immigration adjudication and naturalization applications and petitions. 
The data was collected by office, common and unique activities, and 
application and/or petitions observed. Detailed information on cycle 
time data gathering is available upon request. Please refer to the FOR 
FURTHER INFORMATION CONTACT section of this proposed rule for 
instructions on how to obtain this information.

E. Data Normalization and Weighting

    After collecting and recording the data on optical scan forms, the 
Fee Study Team developed cycle times for each type of application and 
petition observed. The Fee Study Team constructed an analysis process 
for computing the specific time required to process each application 
through the

[[Page 1790]]

normalization of data at the task level and compiled these tasks into a 
cycle time at the activity level. (As stated earlier, each activity 
consists of various numbers of sub-component tasks.) For each task 
observed, the Fee Study Team developed an average time. This normalized 
data was used to develop activity cycle times for each of the eight 
activities. When appropriate, each task was weighted by the rate of 
denials, approvals, requests for additional evidence (RFAE), and, for 
applications that could be processed at either a district office or 
service center, a percent weight based on volumes processed at each 
type of office.
    The Fee Study Team reviewed all optical scan forms entered into the 
computer database. Data anomalies were resolved and discrepancies 
clarified according to pre-defined procedures. For example, if a data 
collector recorded the time in numerals in the ``Time'' section of the 
optical scan form, but they did not darken the corresponding ovals for 
the optical scanner to read, the written time had to be recorded in the 
database. Other types of anomalies included the data collector failing 
to record batch size, which resulted in an aggregate time from several 
applications read as a single time, or a data collector darkening two 
ovals from one observation. Each identified anomaly was researched by 
interviewing the data collector. For those anomalies that were 
unsatisfactorily resolved, that scan form and all corresponding data 
were eliminated from the database. Less than 1% of the total 5,000 scan 
forms were voided.
    The optical scan form also contained a section for written comments 
that had to be reviewed to determine their impact on the data. For 
example, a data collector often recorded on a single scan form several 
tasks that were performed concurrently. The data collector would 
provide a breakdown of each task and its respective time in the written 
comments section of the optical scan form. These types of observations 
had to be reviewed and added to the data base.
    The Fee Study Team also performed an ``outlier'' analysis. All 
cycle times were plotted to uncover the outlier(s). An outlier was an 
observation that fell outside two standard deviations from the average 
of all observations for a particular task. When an outlier was 
identified, the observation had to be analyzed to determine if the 
timing pattern was reasonable. Usually, the original data collector was 
contacted, if possible, to determine the reasonableness of the 
observation and timing pattern. Often, human error was not the cause of 
an outlier; rather the outlier was usually an exceptionally complicated 
or difficult case that resulted in an activity or task taking longer 
than the average time. For example, interview times often varied 
depending on the applicant's language ability, the complexity of the 
application, and/or the questions regarding the materials submitted 
with the application. An outlier may be the result of an observation of 
a particularly long interview. Most outliers were valid observations 
and remained in the database. Occasionally, cycle time formulas were 
developed to help determine the average time for specific activities 
because some cycle times needed additional calculations to get a 
complete cycle time for a task. For example, the creation of the alien 
registration receipt form (``Issue End Product'' activity) for the Form 
I-90, Application to Replace Alien Registration Card, Form I-485, 
Application to Register Permanent Residence or Adjust Status, and Form 
I-751, Petition to Remove the Conditions on Residence, requires that 
the process begin at the district offices with taking fingerprints and 
collecting photos. The process is finalized at the Immigration Card 
Facility with the photo scanning step, etc., and the actual production 
of the card. These three steps were timed separately and added to 
produce a single task time.
    After valid task times were produced through the normalization 
process, these task times were grouped by activity to create an overall 
activity cycle time. Just as data normalization was performed at the 
task level, data analysis occurred at the activity level. The Study 
Team designed a three-step method of computation to ensure that each 
piece of data was fairly represented and carried the observation weight 
through the analysis process to the final time determination. Special 
protocol for recording and developing the cycle times for the approval, 
denial, and RFAE data were established. Percentages for application 
specific denial, approval, and RFAEs were accumulated at the service 
centers and district offices and then incorporated into the respective 
activity cycle times. For example, the percentage of applications that 
require additional information was calculated into the cycle time. 
Processing for incomplete applications had to be accounted for since 
the set of tasks and thus the time to complete these tasks differed 
from an approved or denied application. The same weighting process 
occurred for the approval and denial rate of the various applications 
and petitions. Since the time to process an application is different 
depending on the adjudicative decision, the approval and denial rates 
for each application or petition type was obtained and weighted to 
determine the final cycle time. This is important because both approval 
and denial rates are associated with different tasks. Approved 
applications may require the issuance of a card or certificate, while 
denied applications require a letter stating the reason for the denial. 
These processing differences were accounted for by weighting various 
activities and tasks.
    Applications such as the Form I-751, Form I-90, and Form I-131, 
Application for Travel Document, are processed at both the service 
centers and district offices. Observations were collected at both 
service centers and district offices and weighted accordingly to 
calculate activity cycle times that represented the dual processing of 
these applications. For example, approximately 36% of the Forms I-751 
filed require interviews that are conducted at district offices. 
Specific task average times to conduct an interview were weighted by 
36% and then added to the other tasks in the timing pattern to get a 
complete cycle time for adjudicating a Form I-751. Likewise, the Form 
I-90 had dual processing in the service center and district office. 
Approximately 4% of the tasks involved with adjudicating a Form I-90 
take place at a district office and the remaining 96% of the tasks take 
place at the service center. These percentages were weighted with 
average cycle times for the corresponding tasks and then combined to 
develop the complete cycle time for that activity.
    Weighting also occurred with the ``common'' activity of ``Manage 
Records.'' Although the ``Manage Records'' activity was determined to 
be a common activity, application-specific cycle times were developed 
by weighting the tasks of the ``Manage Records'' activity. For example, 
the creation of an alien file (A-file) varies according to the 
application or petition file. Since not all applications result in an 
A-file creation, this task had to be weighted to produce an application 
or petition-specific cycle time.
    Cycle times for the unique activities for applications that were 
not observed as a result of low volume and lack of opportunity to 
observe were developed in two ways: (1) Using average observed timings 
of similarly processed applications or (2) using expert opinion. The 
Fee Study Team used the average cycle time of producing a 
naturalization certificate for the ``Issue End Product'' activity for 
the Form N-643, Application for Certificate of

[[Page 1791]]

Citizenship in Behalf of an Adopted Child, since the Team was unable to 
observe the creation of a naturalization certificate for that form. The 
Fee Study Team did, however, observe the actual adjudication of a 
representative sample of the Form N-643; the cycle time for 
``Adjudicate Application'' for the Form N-643 is based on those 
observations. Cycle times for the Form I-17, Petition for Approval of 
School for Attendance by Nonimmigrant Students, Form I-526, Immigrant 
Petition by Alien Entrepreneur, and Form I-829, Petition by 
Entrepreneur to Remove Conditions (applications and petitions processed 
at volumes too low to qualify for statistical sampling) were based on 
expert opinion of INS subject matter experts from both the field and 
headquarters who contributed their knowledge of application processing 
to develop cycle times for these applications.
    The cycle times that resulted from the data gathering and data 
normalization stages of the Fee Study were used as the activity 
``drivers'' to assign costs from activities to cost objects. Detailed 
information on the cycle time development process is available from the 
INS upon request. Please refer to the ``For Further Information 
Contract'' section of this proposed rule for instructions on obtaining 
this information.

Determining Application and Petition Volumes

    The Service estimated FY 1998 application and petition volumes by 
performing regression analysis on five years of actual receipt data 
obtained from the PAS data base. As stated earlier, the PAS is an INS 
system that provides operational statistics for a broad range of 
services, including the numbers of immigration adjudication and 
naturalization applications and petitions received and processed. The 
INS'' Workload Projection Group reviews immigration and naturalization 
application and petition volume projections and will adjust them, 
either upward or downward, when it is determined that legislative 
changes, policy decisions, operational changes, or other factors would 
significantly affect the number of immigration adjudication and 
naturalization applications and petitions filed. The FY 1998 projected 
volumes for the applications and petitions that were reviewed during 
the Fee Study are presented in Figure 4.

                Figure 4.--Projected FY 1998 Application/Petition Volumes and Waiver Percentages                
----------------------------------------------------------------------------------------------------------------
                                                               Projected                                        
              Form No.                      Description         FY 1998       Waiver     Fee-waived   Fee-paying
                                                                 volume     percentage     volume       volume  
----------------------------------------------------------------------------------------------------------------
I-17................................  Petition for Approval           800          20%          160          640
                                       of School Attendance                                                     
                                       by Non-immigrant                                                         
                                       Student.                                                                 
I-90................................  Application to Replace      275,500           5%       13,775      261,725
                                       Alien Registration                                                       
                                       Card.                                                                    
I-102...............................  Application for               8,000           0%            0        8,000
                                       Replacement/Initial                                                      
                                       Nonimmigrant Arrival/                                                    
                                       Departure Document.                                                      
I-129/I-129H/I-129L.................  Petitions for               253,500          15%       38,025      215,475
                                       Nonimmigrant Worker.                                                     
I-129F..............................  Petition for Alien          109,000           0%            0      109,000
                                       Fiance(e).                                                               
I-130...............................  Petition for Alien          657,000           0%            0      657,000
                                       Relative.                                                                
I-131...............................  Application for Travel      365,000           0%            0      365,000
                                       Document.                                                                
I-140...............................  Immigrant Petition for       56,000           0%            0       56,000
                                       Alien Worker.                                                            
I-485...............................  Application to              423,930           0%            0      423,930
                                       Register Permanent                                                       
                                       Residence or Adjust                                                      
                                       Status.                                                                  
I-526...............................  Immigrant Petition by           500           0%            0          500
                                       Alien Entrepreneur.                                                      
I-539...............................  Application to Extend/     206,9001          10%       20,690      186,210
                                       Change Nonimmigrant                                                      
                                       Status.                                                                  
I-600/I-600A........................  Petition to Classify         14,000           0%            0       14,000
                                       Orphan as an                                                             
                                       Immediate Relative/                                                      
                                       Application for                                                          
                                       Advance Processing or                                                    
                                       Orphan Petition.                                                         
I-724...............................  Waiver Applications          27,000           2%          540       26,460
                                       \1\.                                                                     
I-751...............................  Petition to Remove the      130,000           0%            0      130,000
                                       Conditions on                                                            
                                       Residence.                                                               
I-765...............................  Application for             972,000          50%      486,000      486,000
                                       Employment                                                               
                                       Authorization.                                                           
I-817...............................  Application for              22,000           0%            0       22,000
                                       Voluntary Departure                                                      
                                       under the Family                                                         
                                       Unity Program.                                                           
I-824...............................  Application for Action       44,000           0%            0       44,000
                                       on an Approved                                                           
                                       Application or                                                           
                                       Petition.                                                                
I-829...............................  Petition by                     403           0%            0          403
                                       Entrepreneur to                                                          
                                       Remove Conditions.                                                       
N-400...............................  Application for           1,306,900          17%      222,173    1,084,727
                                       Naturalization.                                                          
N-565...............................  Application for              16,700           0%            0       16,700
                                       Replacement of                                                           
                                       Naturalization/                                                          
                                       Citizenship Document.                                                    
N-600...............................  Application for              32,700           0%            0       32,700
                                       Certification of                                                         
                                       Citizenship.                                                             
N-643...............................  Application for               7,400           0%            0       7,400 
                                       Certification of                                                         
                                       Citizenship in Behalf                                                    
                                       of an Adopted Child.                                                     
----------------------------------------------------------------------------------------------------------------
\1\ Waiver Applications include the Forms I-191, Application for Advance Permission to Return to Unrelinquished 
  Domicile; I-192, Application for Advance Permission to Enter as a Non-immigrant; I-193, Application for Waiver
  of Passport and/or Visa; I-212, Application to Reapply for Admission into the U.S. After Deportation; I-601,  
  Application for Waiver on Grounds of Excludability; and I-612, Application for Waiver of the Foreign Residence
  Requirement.                                                                                                  

Assigning Activity Costs to Immigration Adjudication and 
Naturalization Applications and Petitions

    The cycle times for each activity were converted to percentages to 
assign activity costs to the various applications and/or petitions that 
consume the resources of that activity. Cycle time assignment 
percentages were calculated for each activity. The assignment 
percentages were applied to total activity costs to determine an 
application or petition's pro-rata share of the activity cost. Each 
application or petition could have up to eight different activity 
costs. Each application or petition's pro-rata share of the activity 
cost was then divided by its anticipated FY 1998 volume to arrive at a 
per application or petition activity cost. The activity cost for each 
application or petition was totaled, along with any application-
specific cost assigned directly, to arrive at the total processing cost 
for each application or petition. Figure 5 displays the processing 
costs for each application and petition by activity. In order to arrive

[[Page 1792]]

at a final fee amount, however, an amount to recover fee waiver and 
exempt costs, and the asylum and refugee surcharge must be added to the 
application and petition processing costs.

               Figure 5.--Immigration Adjudication and Naturalization Application and Petition Processing Costs Application Process Model               
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Activity costs                                                        
                                     --------------------------------------------------------------------------------------------------------    Unit   
              Form No.                                          Input                              Prepare     Issue    Respond  Application  processing
                                        Receive     Record   application   Manage    Adjudicate   outgoing      end       to       specific      cost   
                                      application     fee        data      records  application  correction   product   inquiry     costs               
--------------------------------------------------------------------------------------------------------------------------------------------------------
I-17................................       $1.91      $1.09       $3.52     $10.37      $99.60       $6.60      $0.00    $10.43       $9.61     $143.13 
I-90................................        1.94       1.30        3.55      10.83       22.68        6.88       5.58     10.59       16.13       79.48 
I-102...............................        1.91       1.37        3.52      10.03       12.87        6.60       0.00     10.43       16.01       62.74 
I-129...............................        1.94       1.15        3.55       9.76       26.08        8.31       0.00     10.59       16.11       77.49 
I-129F..............................        1.91       1.36        3.49      19.85        9.96        7.89       0.00     10.43       12.56       67.45 
I-130...............................        1.94       1.37        3.55      10.50       27.79        6.88       0.00     10.59       16.13       78.75 
I-131...............................        1.94       1.37        3.55       9.33       10.13        6.88       8.12     10.59       16.07       67.98 
I-140...............................        1.94       1.37        3.55      10.64       29.92        7.08       0.00     10.59       16.78       81.87 
I-485...............................        1.94       1.37        3.55      21.28       58.79       12.49       5.58     10.59       43.15      158.74 
I-526...............................        1.91       1.36        3.49      10.45      200.36        6.55       0.00     10.43       16.06      250.61 
I-539...............................        1.91       1.24        3.52       9.46       36.75        6.60       0.00     10.43       16.31       86.22 
I-600/I-600A........................       19.18       3.50        0.98      13.76       69.88       59.86       5.55     98.26       20.58      291.55 
I-724 \1\...........................        1.91       1.34        3.52       9.19       55.98       11.90       0.00     10.43       27.00      121.27 
I-751...............................        1.94       1.37        2.69      16.39       28.93        6.88       5.55     10.59       16.31       90.65 
I-765...............................        1.94       0.68        3.55      10.19       12.13        6.88      11.76     10.59       16.07       73.79 
I-817...............................        2.54       1.36        4.57       9.63       13.98        3.61      13.04     10.43       27.00       86.16 
I-824...............................        1.91       1.37        3.52       9.74       18.40       11.90       0.00     10.43       27.80       85.07 
I-829...............................        1.91       1.36        2.65      10.68      200.36        6.55       0.00     10.43       16.03      249.97 
N-400...............................        1.94       1.16        3.55      16.96       47.08       12.51      15.44     10.59       54.59      163.82 
N-565...............................        1.91       1.37        3.52      11.10       32.83        6.60      13.23     10.43       16.02       97.01 
N-600...............................        1.91       1.37        3.52      11.58       49.99        7.95      13.23     10.43       16.66      116.64 
N-643...............................        1.91       1.37        3.52      10.33       12.51        7.95      23.93     10.43       18.90      90.85  
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Waiver Forms Include: I-191, Application for Advance Permission to Return to Unrelinquished Domicile; I-192, Application for Advance Permission to  
  Enter as a Nonimmigrant; I-193, Application for Waiver of Passport and/or Visa; I-212, Application to Reapply for Admission into the U.S. After       
  Deportation; I-601, Application for Waiver on Grounds of Excludability; and I-612, Application for Waiver of the Foreign Residence Requirement.       

Waiver/Exempt Costs and the Asylum and Refugee (International 
Affairs) Surcharge

    The final step in calculating the immigration adjudication and 
naturalization fees is to add amounts to recover waiver/exempt costs, 
and the surcharge to recover the cost of asylum and refugee services 
funded by the Examinations Fee Account. For purposes of this document, 
the surcharge that recovers the cost of the International Affairs 
program is known as the asylum and refugee surcharge. As stated earlier 
in this proposed rule, P.L. 101-515 authorizes the INS to set the 
immigration adjudication and naturalization fees at a level that will 
recover the costs of providing all immigration adjudication and 
naturalization services ``including the costs of similar services 
provided without charge to asylum applicants or other immigrants.'' (8 
U.S.C. 1356(m)) The INS adds a surcharge to its immigration 
adjudication and naturalization fees to recover the cost of providing 
asylum and refugee services, and adds an additional amount to each fee 
to recover the cost of application and petitions that the INS processes 
at no charge, either through exempting certain classes of applicants 
from paying a fee or waiving the fee for those applicants for whom 
paying the fee would constitute a financial hardship.
    Previously, the INS had assigned waiver/exempt costs and the asylum 
and refugee surcharge as a flat ``per application'' amount. While this 
method produced a single surcharge amount, the total percent of the 
surcharge to each fee type varied greatly. For example, as a result of 
the last fee adjustment in July 1994, the asylum and refugee surcharge 
was determined to be $9.00 per application. This $9.00 surcharge 
represented an assessment of 10% for an application costing $90.00, but 
it was an assessment of nearly 30% for an application costing $30.00. 
Audits of the INS fee setting methodology had been critical of this 
method of assigning the surcharge and other costs. The auditors felt 
that a more equitable method for assigning these amounts would be to 
base them on the relationship of the cost of the various applications 
and petitions. To prevent the disparity in the percentage of an 
application's or petition's fee that was attributable to the surcharge 
and waiver/exempt amount, the INS now assesses it waiver/exempt costs 
and surcharge as a flat percentage of each application's or petition's 
processing costs. While the amount of the waiver/exempt cost and 
surcharge will vary between fee types, the percentage of cost is 
constant.
    The Illegal Immigration Reform and Immigrant Responsibility Act of 
1996 (IIRIRA) states that ``asylum cannot be granted until the identity 
of the applicant has been checked against all appropriate records or 
databases maintained by the Attorney General and by the Secretary of 
State. . .'' (INA, section 208(d)(5)(A)(I)) Under this provision, 
fingerprint checks will have to be completed prior to approving any 
asylum application. This requirement was not effective during the fee 
study, and is not reflected in the asylum and refugee surcharge. This 
requirement may result in additional resource requirements for the 
International Affairs program and an increase in the asylum and refugee 
surcharge amount to recover these resources.
    The INS specifically solicits comments on whether a flat rate or

[[Page 1793]]

percentage should be used to assign waiver costs.

A. Waiver/Exempt Costs

    The INS provides the initial Form I-765, Application for Employment 
Authorization, at no charge to persons granted asylum or refugee 
status, or when the INS cannot adjudicate an asylum or refugee 
application within 180 days of filing. For FY 1998, the INS estimates 
that approximately 50% of the Form I-765 applications will be processed 
at no charge to applicants, at a total cost of $35.9 million. In 
addition, persons filing certain applications or petitions may apply 
for a waiver of the fee when paying the fee would constitute a 
financial hardship. For FY 1998, the INS estimates that it will incur 
costs of approximately $42.3 million to process applications and 
petitions for which the fee has been waived. As stated previously, the 
revenue generated from the immigration adjudication and naturalization 
fees is the sole source of funding for these services. The INS does not 
receive appropriated funds (tax dollars) to provide these services. As 
a result, the fees must be set at a level that will recover the full 
cost of processing immigration adjudication and naturalization 
applications and petitions, including those applications and petitions 
for which the fees have been waived. The waiver/exempt costs were 
assessed to the various application and petition types in relation to 
the total cost assigned to each application/ petition type; this amount 
was then divided by the estimated fee-paying volume of for each 
application/petition type to determine the per application/petition 
amount.
    The INS is currently evaluating under what conditions a waiver of 
the fee should be granted. The INS specifically seeks comments on 
setting standards for application fee waivers.

B. Asylum and Refugee Surcharge

    As noted previously, Congress has directed the INS to set its fees 
at a level that will generate sufficient revenue to fund the processing 
of asylum and refugee applications. Within the INS, the International 
Affairs program administers the adjudication of asylum and refugee 
applications. Approximately 15% of the total immigration adjudication 
and naturalization resource base funds asylum and refugee adjudications 
administered by the INS' International Affairs program. This amount is 
recovered through the fees by adding a surcharge to the immigration 
adjudication and naturalization fees. This surcharge is calculated 
similar to the assignment of waiver/exempt costs. The total amount of 
the International Affairs program is assigned to each application/
petition type in the same ratio as their total processing costs. The 
amount assigned to each application/petition type is then divided by 
the total volume of applications/petitions expected to be received for 
the application/petition type to arrive at a per application/petition 
surcharge amount.

Proposed Fee Adjustments

    The INS is proposing to increase 30 fees on the Examinations Fee 
Account fee schedule. The INS must adjust its fee schedule due to the 
increased costs experienced since the last fee adjustment in July 1994, 
which was based on resource requirements of $331 million. The INS 
estimates resource requirements in FY 1998 of $638.6 million for the 
processing of immigration adjudication and naturalization applications 
and petitions. Revenue projections for FY 1998, based on the current 
fee schedule and an estimated fee-paying volume of 4.3 million 
applications, are only $368.4 million. Increases in fees are necessary 
to generate sufficient revenue to ensure that funds are available to 
continue providing services to customers.
    The INS performed a thorough review of its immigration adjudication 
and naturalization resources and activities, and the relationship of 
these resources and activities to the various applications and 
petitions for which a fee is charged. The resources were assigned to 
applications and petitions based on causal relationships, with the 
exception of the waiver/exempt costs, and the asylum and refugee 
surcharge. These costs were assigned to each application and petition 
based on their relationship to processing costs. The proposed 
adjustments to the fee schedule of the Examinations Fee Account is the 
total resource costs assigned to each application and petition type, 
plus the pro-rata share of waiver/exempt costs and the asylum and 
refugee surcharge. This amount is then rounded to the nearest whole 
five-dollar amount. The proposed adjusted fee schedule for the 
Immigration Examinations Fee Account is illustrated in Figure 6. Figure 
6 provides information on the application or petition the INS proposes 
to adjust, the total processing costs assigned to each application or 
petition, the asylum and refugee surcharge, the amount for waiver/
exempt costs, and the total costs per application and petition. The 
proposed rounded fees are compared to the current fee. (A summary of 
the approach and methodology used in the fee study is explained in this 
proposed rule. A comprehensive Fee Study report is available upon 
request. Please refer to the FOR FURTHER INFORMATION CONTACT section of 
this proposed rule for instructions on obtaining a copy of the fee 
schedule.)

                                    Figure 6.--Immigration Examinations Fee Account Proposed Fee Schedule Adjustments                                   
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Asylum and                                       
              Application No.                         Description            Processing    Waiver/      refugee    Total  cost    Proposed     Current  
                                                                                cost     exempt cost   surcharge                    fee          fee    
--------------------------------------------------------------------------------------------------------------------------------------------------------
I-17.......................................  Petition for Approval of           $143.13       $24.71       $30.84      $198.68      $200.00      $140.00
                                              School for Attendance by                                                                                  
                                              Nonimmigrant Student.                                                                                     
I-90.......................................  Application to Replace Alien         79.48        13.72        17.12       110.32       110.00        75.00
                                              Registration Card.                                                                                        
I-102......................................  Application for Replacement/         62.74        10.83        13.52        87.09        85.00        65.00
                                              Initial Nonimmigrant Arrival/                                                                             
                                              Departure Record.                                                                                         
I-129/I-129H/I-129L........................  Petitions for Nonimmigrant           77.49        13.38        16.69       107.56       110.00    \1\ 75.00
                                              Worker.                                                                                                   
I-129F.....................................  Petition for Alien Fiance(e).        67.45        11.64        14.53        93.62        95.00        75.00
I-130......................................  Petition for Alien Relative..        78.75        13.59        16.96       109.30       110.00        80.00
I-131......................................  Application for Travel               67.98        11.73        14.64        94.35        95.00        70.00
                                              Document.                                                                                                 
I-140......................................  Petition for Alien Worker....        81.87        14.13        17.64       113.64       115.00        75.00

[[Page 1794]]

                                                                                                                                                        
I-485......................................  Application to Register             158.74        27.40        34.19       220.33       220.00       130.00
                                              Permanent Residence or                                                                                    
                                              Adjust Status.                                                                                            
I-526......................................  Immigrant Petition by Alien         250.61        43.26        53.99       347.86       350.00       155.00
                                              Entrepreneur.                                                                                             
I-539......................................  Application to Extend/Change         86.22        14.88        18.58       119.68       120.00        75.00
                                              Nonimmigrant Status.                                                                                      
I-600/I-600A...............................  Petition to Classify Orphan         291.55        50.33        62.81       404.69       405.00       155.00
                                              as an Immediate Relative/                                                                                 
                                              Application for Advance                                                                                   
                                              Processing of Orphan                                                                                      
                                              Petition.                                                                                                 
I-724......................................  Waiver Forms \2\.............       121.27        20.93        26.13       168.33       170.00        95.00
I-751......................................  Petition to Remove the               90.65        15.65        19.53       125.83       125.00        80.00
                                              Conditions of Residence.                                                                                  
I-765......................................  Application for Employment           73.79        12.74        15.90       102.43       100.00        70.00
                                              Authorization.                                                                                            
I-817......................................  Application for Voluntary            86.16        14.87        18.56       119.59       120.00        80.00
                                              Departure under the Family                                                                                
                                              Unity Act.                                                                                                
I-824......................................  Application for Action on an         85.07        14.68        18.32       118.07       120.00        30.00
                                              Approved Application or                                                                                   
                                              Petition.                                                                                                 
I-829......................................  Petition by Entrepreneur to         249.97        43.15        53.85       346.97       345.00        90.00
                                              Remove Conditions.                                                                                        
N-400......................................  Application for                     163.82        28.28        35.29       227.39       225.00        95.00
                                              Naturalization.                                                                                           
N-565......................................  Application for Replacement          97.01        16.74        20.90       134.65       135.00        65.00
                                              Naturalization/Citizenship                                                                                
                                              Document.                                                                                                 
N-600......................................  Application for Certification       116.64        20.13        25.13       161.90       160.00       100.00
                                              of Citizenship.                                                                                           
N-643......................................  Application for Certificate          90.85        15.68        19.57       126.10       125.00       80.00 
                                              of Citizenship on Behalf of                                                                               
                                              an Adopted Child.                                                                                         
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ This amount represents the base fee currently charged for the Form I-129. In addition to the base fee, petitioners are currently required to add    
  additional amounts depending upon the number of non-immigrant workers on each petition, or whether the petition is for an extension of stay, change of
  status, reclassification as a temporary worker or trainee, or to employee an intracompany transferee. The INS has simplified this fee structure by    
  charging a uniform fee for each type of non-immigrant worker petition filed.                                                                          
\2\ Waiver Forms Include: I-191, Application for Advance Permission to Return to Unrelinquished Domicile; I-192, Application for Advance Permission to  
  Enter as a Nonimmigrant; I-193, Application for Waiver of Passport and/or Visa; I-212, Application to Reapply for Admission into the U.S After        
  Deportation; I-601, Application for Waiver on Grounds of Excludability; and I-612, Application for Waiver of the Foreign Residence Requirement.       

Impact on Applicants and Petitioners

    The INS recognizes that this proposed rule will have an impact on 
persons who file the effected applications and petitions, with a total 
impact in excess of $100 million annually. The fee increases will 
affect the over 4 million applicants who file immigration adjudication 
and naturalization applications and petitions each year. The financial 
impact on persons who file these applications and petitions will vary; 
the proposed fee increases range from $20.00 to $255.00 depending on 
the type of application or petition filed. Three fees will increase by 
amounts between $20.00 and $25.00; 11 fees will increase by amounts 
between $30.00 and $45.00; seven fees will increase by amounts between 
$60.00 and $75.00; four fees will increase by amounts between $80.00 
and $90.00; and five fees will increase by amounts in excess of 
$100.00. (Please refer to Figure 6 for details on the proposed fee 
increases.)
    During this fee setting process the INS used statistically valid 
methods to determine the processing time and the related costs of 
providing immigration adjudication and naturalization services. These 
processing times include the time necessary to receive applications, 
process data, manage records and files, adjudicate applications 
(including interviewing), provide clerical support, produce cards and 
certificates, and respond to inquiries. Prior fee setting efforts only 
considered the adjudicative and clerical time as direct costs of the 
immigration adjudication and naturalization applications and petitions. 
For this reason, some applications and petitions may increase more 
dramatically than others. These applications, particularly the Form N-
400, Application for Citizenship, and the Form I-600, Petition to 
Classify Orphan as an Immediate Relative, require considerable time and 
attention to receive, process, and adjudicate. In past fee setting 
efforts, any costs that were not direct adjudicative, clerical, or card 
production costs were assigned to an indirect cost pool and spread 
evenly over all application and petitions types. This method obscured 
the true full cost of the individual applications and petitions. The 
current fee setting effort more closely aligns costs to application and 
petition type.
    The fee increases are necessary to fund the various immigration 
adjudication and naturalization services provided by the INS. The INS 
does not receive an appropriation (tax dollars) to fund these 
activities and must rely on the revenue generated from its various 
immigration adjudication and naturalization fees to continue providing 
such services. The favorable

[[Page 1795]]

adjudication of immigration and naturalization applications and 
petitions results in the granting of status, rights, and benefits upon 
which it is difficult to place a monetary value. The INS accepts and 
adjudicates applications and petitions that: confer legal permanent 
resident, asylee, and refugee status; allow for family reunification; 
permit non-immigrants to enter the United States for employment 
purposes; allow legal permanent residents, asylees, and refugees to 
seek employment in the United States; allow foreign students to enter 
the United States for educational purposes; allow for the 
classification of non-resident orphans as immediate relatives for the 
purpose of adoption; provide reentry rights into the United States for 
persons who may otherwise be excludable; and allow immigrants to apply 
for and become citizens of the United States and partake of the 
benefits of a democratic society.
    Without the funding provided through these fees, the INS could not 
continue to provide such services. The INS conducted a lengthy and 
thorough review of the costs of providing immigration adjudication and 
naturalization services and assigned those costs to the various 
immigration adjudication and naturalization applications and petitions 
in accordance with legislative intent and Federal cost accounting 
guidelines. The fee setting process is explained in this proposed rule 
and detailed documentation of the Fee Study is available from the INS 
upon request. The INS attempted to set each fee at the cost of 
resources consumed to providing specific services and without unduly 
burdening any particular class of applicants or petitioners. The INS 
has also established procedures by which applicants and petitioners may 
apply for a waiver of certain fees when paying the fee constitutes a 
financial hardship.

Changes in Certain Specific Fees

    The INS is proposing to change the structure and eliminate several 
fees. The fee for the Form I-485A, Application to Register Permanent 
Residence or Adjust Status--Cuban Refugees, has been eliminated because 
the INS has rescinded the use of this form.
    The maximum amount payable for families filing the Form I-817, 
Application for Voluntary Departure under the Family Unity Act, is also 
being eliminated. The INS is changing the processing procedures for the 
Form I-817. (New procedures for filing the I-817 will be addressed in a 
separate rule.) Previously, applicants for Family Unity benefits who 
desired employment authorization were required to file a separate Form 
I-765, Application for Employment Authorization, and pay the 
appropriate fee for that form. As part of the new processing procedures 
for the Form I-817, the INS will now issue an Employment Authorization 
Card (EAD) to each approved Form I-817 applicant. Family Unity 
applicants will no longer be required to file a Form I-765 and pay the 
additional fee in order to obtain an EAD. The INS had previously 
established a maximum fee amount for families of four or more that 
filed Forms I-817 concurrently. Most families of four or more members 
who filed for Family Unity benefits had heads of households, spouses, 
or minor children that wished to obtain employment authorization. The 
INS recognized that the cost of filing the Forms I-817 and I-765 
concurrently for multiple family members would be a financial hardship. 
To mitigate this financial hardship, the INS capped the amount of the 
Form I-817 fee for families of four at $225.00.
    With the new procedure of issuing an EAD with each approved Form I-
817 application, the INS' processing costs will increase, but the 
burden on families of four or more filing concurrent Forms I-817 will 
decrease since these families will no longer be required to file the 
Form I-765 and pay the additional fee.
    The INS has also simplified the fee structure for the Form I-129, 
Petition for Non-Immigrant Worker. Previously, the INS charged an 
additional fee for petitions with named beneficiaries requesting 
consulate or port-of-entry notification, and additional fees for 
workers requesting a change of status or extension of stay. Since the 
Form I-129 allows a petitioner to apply for several benefits on the 
same form, petitioners found the fee structure very confusing, and 
often submitted petitions with the wrong fee amount. This caused delays 
in adjudication since any application or petition filed with the wrong 
fee amount must be returned to the applicant or petitioner with a 
request to re-submit the application with the correct fee. To mitigate 
this confusion and prevent any delays in processing, the INS is 
proposing a single fee for each Form I-129 filed, regardless of the 
type of benefit requested. Future fees studies will further examine the 
fee structure of the Form I-129 and refine the fee structure, if 
necessary. For the same reasons, the INS is eliminating the co-
applicant fee on the Form I-539, Application to Extend or Change 
Nonimmigrant Status.

Regulatory Flexibility Act

    The Attorney General, in accordance with 5 U.S.C. 605(b), has 
reviewed this regulation and by approving it has determined that this 
rule will not have a significant economic impact on a substantial 
number of small entities. The INS does acknowledge, however, that a 
number of small entities, particularly those filing business-related 
applications and petitions such as the Form I-129, Petition for 
Nonimmigrant Worker, may be affected by this rule. For FY 1998, the INS 
projects that approximately 254,000 Forms I-129 will be filed. However, 
this volume represents petitions filed by a variety of businesses, 
ranging from large multi-national corporations to small domestic 
businesses. The INS does not have statistics on the number of small 
businesses that may be affected by this rule. The INS tracks the number 
of petitions filed; these volume statistics do not indicate which types 
of businesses file petitions, or the size of the businesses filing the 
Form I-129.
    The INS conducted an exhaustive review of the costs incurred by the 
INS for the processing the various immigration adjudication and 
naturalization applications and petitions. The INS believes that, as a 
result of this study, the proposed fees reflect, as closely as 
possible, the full cost of providing the specific service provided 
through the filing of an application or petition. The INS conducted its 
review and adjusted its fees in accordance with statutory mandates and 
Federal cost accounting standards. These statutes and standards require 
the INS to recover the full cost of providing services that confer a 
benefit that does not accrue to the public at large. The Form I-129 
will increase from the current base fee of $75.00 to $110.00, an 
increase of $35.00. While this increase is notable, it is important to 
note that the immigration adjudication and naturalization fees have not 
increased in the past three years; during the same period the INS has 
experienced a significant increase in its costs. Additionally, the 
increased cost for the Form I-129 is modest indeed in the context of 
the total costs businesses incur in relocating non-immigrant workers to 
the United States.

Unfunded Mandates Reform Act of 1995

    This rule will not impose a mandate or enforceable duty on State, 
local and tribal governments, in the aggregate, or on the private 
sector, and it will not significantly or uniquely affect small 
governments. This rule will only affect persons who file applications 
or petitions for immigration benefits. The increase in fees is 
necessary to defray the higher costs of adjudicating and

[[Page 1796]]

granting the benefits sought. The Supplementary Information portion of 
this rule explains in detail the basis for calculating these fee 
increases. No further actions are necessary under the provisions of the 
Unfunded Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is a major rule as defined by the Small Business 
Regulatory Enforcement Act of 1996. This rule will result in an annual 
effect on the economy of more than $100 million, in order to generate 
the revenue necessary to fund the increased expenses of the INS 
adjudication and naturalization program. The increased fees will be 
paid by persons who file applications or petitions to obtain 
immigration benefits.

Executive Order 12866

    This rule is considered by the Department of Justice to be an 
economically ``significant regulatory action'' under Executive Order 
12866, Regulatory Planning and Review, section 3(f), because it will 
have an annual effect on the economy of $100 million or more. Without 
the proposed increases, the INS estimates that it will collect $368.4 
million in fees for immigration adjudication and naturalization 
services in FY 1998; with the proposed increase, the INS will collect 
approximately $648.7 million. The implementation of this proposed rule 
will provide the INS with an additional $280.3 million in revenue over 
the revenue that would be collected under the current fee structure. 
This increase in revenue will be used to fund the processing of 
immigration adjudication and naturalization applications and petitions. 
The revenue increase is based on INS costs and workload volumes that 
were available at the time of the fee study. The volume of applications 
and petitions filed is projected based on a regression analysis of a 
five-year history of actual applications and petitions received by the 
INS. The regression analysis is adjusted for any anticipated or actual 
changes in laws, policies, or procedures that may affect future filing 
patterns. The proposed fees will be paid by an estimated 4.3 million 
individuals and businesses filing immigration adjudication and 
naturalization applications and petitions. Accordingly, this regulation 
has been submitted to the Office of Management and Budget for review.

Executive Order 12612

    The regulations proposed herein will 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. Therefore, in 
accordance with Executive Order 12612, it is determined that this rule 
does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment.

Executive Order 12988

    This proposed rule meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

Paperwork Reduction Act

    This proposed rule does not impose any new reporting or 
recordkeeping requirements.

List of Subjects in 8 CFR Part 103

    Administrative practice and procedure, Authority delegations 
(Government agencies), Fees, Forms, Freedom of Information, Privacy, 
Reporting and recordkeeping requirements, Surety bonds.
    Accordingly, part 103 of chapter I of title 8 of the Code of 
Federal Regulations is proposed to be amended as follows:

PART 103--POWERS AND DUTIES OF SERVICE OFFICERS; AVAILABILITY OF 
SERVICE RECORDS

    1. The authority citation for part 103 continues to read as 
follows:

    Authority: 5 U.S.C. 552, 552a; 8 U.S.C. 1101, 1103, 1201, 1252 
note, 1252b, 1304, 1356; 31 U.S.C. 9701; E.O. 12356, 47 FR 14874, 
15557; 3 CFR, 1982 Comp., p. 166; 8 CFR part 2.

    2. In Sec. 103.7, paragraph (b)(1) is amended by removing the entry 
for ``Form I-485A'' and revising the entries for the following forms 
listed, to read as follows:


Sec. 103.7  Fees.

* * * * *
    (b) * * *
    (1) * * *
* * * * *
    Form I-17. For filing an application for school approval, except 
in the case of a school or school system owned or operated as a 
public educational institution or system by the United States or a 
state or political subdivision thereof--$200.00.
* * * * *
    Form I-90. For filing an application for Alien Registration 
Receipt Card (Form I-551) in lieu of an obsolete card or in lieu of 
one lost, mutilated, or destroyed, or for a change in name-$110.00.
* * * * *
    Form I-102. For filing a petition for an application (Form I-
102) for Arrival-Departure Record (Form I-94) or Crewman's Landing 
(Form I-95) , in lieu of one lost, mutilated, or destroyed--$85.00.
    Form I-129. For filing a petition for a non-immigrant worker--
$110.00.
    Form I-129F. For filing petition to classify nonimmigrant as 
fiancee or fiance under section 214(d) of the Act--$95.00.
    Form I-129H. For filing a petition to classify nonimmigrant as 
temporary worker or trainee under section 214(c) of the Act--
$110.00.
    Form I-129L. Petition to employ intracompany transferee--
$110.00.
    Form I-130. For filing a petition to classify status of alien 
relative for issuance of immigrant visa under section 204(a) of the 
Act--$110.00.
    Form I-131. For filing an application for travel documents--
$95.00.
    Form I-140. For filing a petition to classify preference status 
of an alien on basis of profession or occupation under section 
204(a) of the Act--$115.00.
* * * * *
    Form I-191. For filing applications for discretionary relief 
under section 212(c) of the Act--$170.00.
    Form I-192. For filing application for discretionary relief 
under section 212(d)(3) of the Act, except, in an emergency case, or 
where the approval of the application is in the interest of the 
United States Government--$170.00.
    Form I-193. For filing an application for waiver of passport 
and/or visa--$170.00.
    Form I-212. For filing an application for permission to reapply 
for an excluded, deported or removed alien, an alien who has fallen 
into distress, an alien who has been removed as an alien enemy, or 
an alien who has been removed at Government expense in lieu of 
deportation--$170.00.
* * * * *
    Form I-485. For filing application for permanent resident status 
or creation of a record of lawful permanent residence--$220.00 for 
an applicant 14 years of age or older; $160.00 for an applicant 
under the age of 14 years.
* * * * *
    Form I-526. For filing a petition for an alien entrepreneur--
$350.00.
* * * * *
    Form I-539. For filing an application to extend or change 
nonimmigrant status--$120.00.
* * * * *
    Form I-600. For filing a petition to classify orphan as an 
immediate relative for issuance of immigrant visa under section 
204(a) of the Act. (When more than one petition is submitted by the 
same petitioner on behalf of orphans who are brothers or sisters, 
only one fee will be required.)--$405.00.
    Form I-600A. For filing an application for advance processing of 
orphan petition. (When more than one petition is submitted by the 
same petitioner on behalf of orphans who are brothers or sisters, 
only one fee will be required.)--$405.00.
    Form I-601. For filing an application for waiver of ground of 
inadmissability under section 212(h) or (i) of the Act. (Only a 
single application and fee shall be required when

[[Page 1797]]

the alien is applying simultaneously for a waiver under both those 
sub-sections.)--$170.00.
    Form I-612. For filing an application for waiver of the foreign-
residence requirement under section 212(e) of the Act--$170.00.
* * * * *
    Form I-751. For filing a petition to remove the conditions on 
residence, based on marriage--$125.00.
    Form I-765. For filing an application for employment 
authorization pursuant to 8 CFR 274a.13--$100.00.
* * * * *
    Form I-817. For filing an application for voluntary departure 
under the Family Unity Program--$120.00.
* * * * *
    Form I-824. For filing for action on an approved application or 
petition--$120.00
    Form I-829. For filing petition by entrepreneur to remove 
conditions--$345.00.
* * * * *
    Form N-400. For filing an application for naturalization--
$225.00. For filing an application for naturalization under section 
405 of the Immigration Act of 1990, if the applicant will be 
interviewed in the Philippines--$250.00.
* * * * *
    Form N-565. For filing an application for a certificate of 
naturalization or declaration of intention in lieu of a certificate 
or declaration alleged to have been lost, mutilated, or destroyed; 
for a certificate of citizenship in a changed name under section 
343(b) or (d) of the Act; or for a special certificate of 
naturalization to obtain recognition as a citizen of the United 
States by a foreign state under section 343(c) of the Act--$135.00.
    Form N-600. For filing an application for certificate of 
citizenship under section 309(c) or section 341 of the Act--$160.00.
    Form N-643. For filing an application for a certificate of 
citizenship on behalf of an adopted child--$125.00.
* * * * *
    Dated: January 5, 1998.
Janet Reno,
Attorney General.
[FR Doc. 98-576 Filed 1-9-98; 8:45 am]
BILLING CODE 4410-10-P