[Federal Register Volume 69, Number 217 (Wednesday, November 10, 2004)]
[Proposed Rules]
[Pages 65332-65345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25122]



[[Page 65331]]

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Part VI





Department of Homeland Security





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Transportation Security Administration



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49 CFR Part 1522



Fees for Security Threat Assessments for Hazmat Drivers; Proposed Rule

  Federal Register / Vol. 69, No. 217 / Wednesday, November 10, 2004 / 
Proposed Rules  

[[Page 65332]]


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DEPARTMENT OF HOMELAND SECURITY

Transportation Security Administration

49 CFR Part 1522

[Docket No. TSA-2004-19605]
RIN 1652-AA33


Fees for Security Threat Assessments for Hazmat Drivers

AGENCY: Transportation Security Administration (TSA), Department of 
Homeland Security (DHS).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: In response to recent statutory requirements, the 
Transportation Security Administration (TSA) proposes to establish a 
fee for security threat assessments that TSA is required to perform on 
individuals who apply for or renew a hazardous materials endorsement 
for a commercial driver's license. TSA also proposes to establish a fee 
for collection and transmission of fingerprints, which is necessary to 
perform the security threat assessments. TSA intends to use fees 
collected under this proposed rule to pay for the costs of the security 
threat assessments and the costs of collection and transmission of 
fingerprints.

DATES: Submit comments by December 1, 2004.

ADDRESSES: You may submit comments to this rulemaking, identified by 
the TSA docket number, using any one of the following methods:
    Comments Filed Electronically: You may submit comments through the 
docket Web site at http://dms.dot.gov. Please be aware that anyone is 
able to search the electronic form of all comments received into any of 
our dockets by the name of the individual submitting the comment (or 
signing the comment, if submitted on behalf of an association, 
business, labor union, etc.). You may review the applicable Privacy Act 
Statement published in the Federal Register on April 11, 2000 (65 FR 
19477), or you may visit http://dms.dot.gov.
    You also may submit comments through the Federal eRulemaking portal 
at http://www.regulations.gov.
    Comments Submitted by Mail, Fax, or In Person: Address or deliver 
your written, signed comments to the Docket Management System, U.S. 
Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., 
Washington, DC 20590-0001; Fax: 202-493-2251.
    Comments that include trade secrets, confidential commercial or 
financial information, or sensitive security information (SSI) should 
not be submitted to the public regulatory docket.\1\ Please submit such 
comments separately from other comments on the rule. Comments 
containing trade secrets, confidential commercial or financial 
information, or SSI should be appropriately marked as containing such 
information and submitted by mail to the individual listed in FOR 
FURTHER INFORMATION CONTACT.
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    \1\ See 49 CFR 1520.5 for a description of SSI material.
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    Reviewing Comments in the Docket: You may review the public docket 
containing comments in person in the Dockets Office between 9 a.m. and 
5 p.m., Monday through Friday, except Federal holidays. The Dockets 
Office is located on the plaza level of the NASSIF Building at the 
Department of Transportation address above. Also, you may review public 
dockets on the Internet at http://dms.dot.gov.
    See SUPPLEMENTARY INFORMATION for format and other information 
about comment submissions.

FOR FURTHER INFORMATION CONTACT: For technical questions: Mr. Randall 
Fiertz, Office of Revenue, Transportation Security Administration 
Headquarters, West Building, Floor 12, TSA-14, 601 South 12th Street, 
Arlington, VA 22202; telephone: (571) 227-2323; e-mail: [email protected].
    For legal questions: Mr. Dion Casey, Office of Chief Counsel, 
Transportation Security Administration Headquarters, East Building, 
Floor 12, TSA-2, 601 South 12th Street, Arlington, VA 22202; telephone: 
(571) 227-2663; e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

Comments Invited

    TSA invites interested persons to participate in this rulemaking by 
submitting written comments, data, or views. We also invite comments 
relating to the economic, environmental, energy, or federalism impacts 
that might result from adopting the proposals in this document. See 
ADDRESSES above for information on where to submit comments.
    Comments that include trade secrets, confidential commercial or 
financial information, or SSI should not be submitted to the public 
regulatory docket. Please submit such comments separately from other 
comments on the proposed rule. Comments containing this type of 
information should be appropriately marked and submitted to the address 
specified in the ADDRESSES section. Upon receipt of such comments, TSA 
will not place the comments in the public docket and will handle them 
in accordance with applicable safeguards and restrictions on access. 
TSA will hold them in a separate file to which the public does not have 
access, and place a note in the public docket that TSA has received 
such materials from the commenter. If TSA receives a request to examine 
or copy this information, TSA would treat it as any other request under 
the Freedom of Information Act (FOIA) (5 U.S.C. 552) and the Department 
of Homeland Security's FOIA regulation found in 6 Code of Federal 
Regulation (CFR) part 5.
    With each comment, please include your name and address, identify 
the docket number at the beginning of your comments, and give the 
reason for each comment. The most helpful comments reference a specific 
portion of the proposal, explain the reason for any recommended change, 
and include supporting data. You may submit comments and material 
electronically, in person, or by mail as provided under ADDRESSES, but 
please submit your comments and material by only one means. If you 
submit comments by mail or delivery, submit them in two copies, in an 
unbound format, no larger than 8.5 by 11 inches, suitable for copying 
and electronic filing.
    If you want TSA to acknowledge receipt of your comments on this 
rulemaking, include with your comments a self-addressed, stamped 
postcard on which the docket number appears. We will stamp the date on 
the postcard and mail it to you.
    Except for comments containing confidential information and SSI, we 
will file in the public docket all comments we receive, as well as a 
report summarizing each substantive public contact with TSA personnel 
concerning this rulemaking. The docket is available for public 
inspection before and after the comment closing date.
    We will consider all comments we receive on or before the closing 
date for comments. We will consider comments filed late to the extent 
practicable. We may change this rulemaking in light of the comments we 
receive.

Availability of Rulemaking Document

    You can get an electronic copy using the Internet by--
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) Web page (http://dms.dot.gov/search);
    (2) Accessing the Government Printing Office's Web page at http://www.access.gpo.gov/su_docs/aces/aces140.html; or

[[Page 65333]]

    (3) Visiting TSA's Law and Policy Web page at http://www.tsa.dot.gov/public/index.jsp.
    In addition, copies are available by writing or calling the 
individual in the FOR FURTHER INFORMATION CONTACT section. Make sure to 
identify the docket number of this rulemaking.

Abbreviations and Terms Used in This Document

ATF--Bureau of Alcohol, Tobacco, Firearms, and Explosives
AAMVA--Association of American Motor Vehicle Administrators
ATSA--Aviation and Transportation Security Act
BLS--Bureau of Labor Statistics
BTS--Bureau of Transportation Statistics
CDL--commercial drivers license
CDLIS--Commercial Drivers License Information System
CFR--Code of Federal Regulations
CHRC--criminal history records check
DHS--Department of Homeland Security
DOT--Department of Transportation
FBI--Federal Bureau of Investigation
FMCSA--Federal Motor Carrier Safety Administration
HME--hazardous materials endorsement
ICE--Bureau of Immigration and Customs Enforcement
IFR--interim final rule
NPRM--notice of proposed rulemaking
PRA--Paperwork Reduction Act
SEA--Safe Explosives Act
TSA--Transportation Security Administration

I. Background

    On September 11, 2001, several terrorist attacks were made against 
the United States. Those attacks resulted in catastrophic human 
casualties and property damage. In response to those attacks, Congress 
passed the Aviation and Transportation Security Act (ATSA), which 
established the Transportation Security Administration (TSA).\2\ TSA 
was created as an agency within the Department of Transportation (DOT), 
operating under the direction of the Under Secretary of Transportation 
for Security. As of March 1, 2003, pursuant to the Homeland Security 
Act of 2002, TSA became an agency of the Department of Homeland 
Security (DHS), and the Under Secretary is now the Assistant Secretary 
of Homeland Security for TSA.\3\ TSA continues to possess the statutory 
authority that ATSA established. ATSA granted to the Assistant 
Secretary responsibility for security in all modes of 
transportation.\4\
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    \2\ Pub. L. 107-71, November 19, 2001, 115 Stat. 597.
    \3\ Section 403 of Pub. L. 107-296, November 25, 2002, 116 Stat. 
2135, codified at 6 U.S.C. 203.
    \4\ 49 U.S.C. 114(d).
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    ATSA authorizes TSA to identify individuals who pose a threat to 
transportation security.\5\ This authority includes conducting 
background checks on individuals in the transportation industries. The 
background checks may include collecting fingerprints to determine if 
an individual has a criminal conviction or the use of a name and other 
identifying characteristics to determine whether an individual has 
committed international criminal offenses or immigration offenses.
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    \5\ 49 U.S.C. 114(f)(2).
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    Based on his functions, duties, and powers, the Assistant Secretary 
is situated to determine whether sufficient cause exists to believe 
that an individual poses a threat to transportation security.

A. USA PATRIOT Act

    The Uniting and Strengthening America by Providing Appropriate 
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act 
was enacted on October 25, 2001.\6\ Section 1012 of the USA PATRIOT Act 
amended 49 U.S.C. Chapter 51 by adding a new section 5103a titled 
``Limitation on issuance of hazmat licenses.'' Section 5103a(a)(1) 
provides:
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    \6\ Pub. L. 107-56, October 25, 2001, 115 Stat. 272.

    A State may not issue to any individual a license to operate a 
motor vehicle transporting in commerce a hazardous material unless 
the Secretary of Transportation has first determined, upon receipt 
of a notification under subsection (c)(1)(B), that the individual 
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does not pose a security risk warranting denial of the license.

    Section 5103a(a)(2) subjects license renewals to the same 
requirements.
    Section 5103a(c) requires the Attorney General, upon the request of 
a State in connection with issuance of a hazardous materials 
endorsement (HME) for a commercial drivers license (CDL), to carry out 
a background records check of the individual applying for the 
endorsement and, upon completing the check, to notify the Secretary of 
Transportation of the results. The Secretary of Transportation then 
determines whether the individual poses a security threat warranting 
denial of the endorsement. The Secretary of Transportation delegated 
the authority to carry out the provisions of Section 5103a to the Under 
Secretary of Transportation for Security (now the Assistant Secretary 
of Homeland Security for TSA).\7\
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    \7\ 68 FR 10988, March 7, 2003.
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    The background records check must consist of: (1) a check of the 
relevant criminal history databases; (2) in the case of an alien, a 
check of the relevant databases to determine the status of the alien 
under U.S. immigration laws; and (3) as appropriate, a check of the 
relevant international databases through Interpol-U.S. National Central 
Bureau or other appropriate means.\8\ As explained in further detail 
below, TSA is performing a more comprehensive check than required by 
Section 5103a, including a review of pertinent databases to determine 
whether an individual poses a security threat. TSA has the authority to 
perform such comprehensive checks under ATSA.\9\
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    \8\ The National Crime Prevention and Privacy Compact (Compact) 
is authorized under 42 U.S.C. 14616 to establish legal criteria 
governing criminal history record checks for non-criminal justice 
purposes. The Compact Council is composed of 15 members, appointed 
by the Attorney General. As a general rule, the Compact Council 
requires the submission of fingerprints for purposes of gaining 
access to criminal history databases for non-criminal justice 
purposes.
    \9\ See 49 U.S.C. 114(f).
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B. Safe Explosives Act

    Congress enacted the Safe Explosives Act (SEA) on November 25, 
2002.\10\ Sections 1121-1123 of the SEA amended section 842(i) of Title 
18 of the U.S. Code by adding several categories to the list of persons 
who may not lawfully ``ship or transport any explosive in or affecting 
interstate or foreign commerce'' or ``receive or possess any explosive 
which has been shipped or transported in or affecting interstate or 
foreign commerce.'' Prior to the amendment, 18 U.S.C. 842(i) prohibited 
the transportation of explosives by any person under indictment for or 
convicted of a felony, a fugitive from justice, an unlawful user or 
addict of any controlled substance, and any person who had been 
adjudicated as a mental defective or committed to a mental institution. 
The amendment added three new categories to the list of prohibited 
persons: aliens (with certain limited exceptions), persons dishonorably 
discharged from the armed forces, and former U.S. citizens who have 
renounced their citizenship. Individuals who violate 18 U.S.C. 842(i) 
are subject to criminal prosecution.\11\ These incidents are 
investigated by the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives

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(ATF) of the Department of Justice and referred, as appropriate, to the 
United States Attorneys.
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    \10\ Pub. L. 107-296, November 25, 2002, 116 Stat. 2280, 
codified at 18 U.S.C. 842.
    \11\ The penalty for violation of 18 U.S.C. 842(i) is up to ten 
years imprisonment and a fine of up to $250,000.
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    However, 18 U.S.C. 845(a)(1) provides an exception to section 
842(i) for ``any aspect of the transportation of explosive materials 
via railroad, water, highway, or air which are regulated by the United 
States Department of Transportation and agencies thereof, and which 
pertains to safety.'' Under this exception, if DOT regulations address 
the transportation security issues of persons engaged in a particular 
aspect of the safe transportation of explosive materials, then those 
persons are not subject to prosecution under 18 U.S.C. 842(i) while 
they are engaged in the transportation of explosives in commerce.\12\
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    \12\ Explosives are among the categories of substances that are 
defined as hazardous materials under DOT regulations. See 49 CFR 
383.5 and 173.50.
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    This exception was triggered when TSA issued the May 5 Interim 
Final Rule, discussed below, in coordination with the Federal Motor 
Carrier Safety Administration (FMCSA) and Research and Special Programs 
Administration (RSPA), agencies within the DOT.

C. The May 5, 2003 Interim Final Rule

    To comply with the mandates of the USA PATRIOT Act, and to trigger 
the exception in 18 U.S.C. 845(a)(1) for the transportation of 
explosives, TSA issued an interim final rule in coordination with FMCSA 
and RSPA on May 5, 2003 (the May 5 IFR).\13\ The May 5 IFR established 
security threat assessment standards for determining whether an 
individual poses a security threat warranting denial of an HME. Under 
the May 5 IFR, TSA determines that an individual poses a security 
threat if he or she: (1) Is an alien (unless he or she is a lawful 
permanent resident) or a U.S. citizen who has renounced his or her U.S. 
citizenship; (2) is wanted or under indictment for certain felonies; 
(3) was convicted or found not guilty by reason of insanity of any of 
certain felonies in military or civilian court within the past 7 years 
or was released from incarceration for committing any of the specified 
felonies within the past 5 years; (4) has been adjudicated as a mental 
defective or involuntarily committed to a mental institution; or (5) is 
considered to pose a security threat based on a review of pertinent 
databases.
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    \13\ 68 FR 23852. The rule was codified at 49 CFR parts 1570 and 
1572. On the same date, the FMCSA issued a companion rule 
prohibiting States from issuing, renewing, transferring, or 
upgrading a CDL with an HME unless TSA has first determined that the 
individual applying for the HME does not pose a security threat 
warranting denial of the HME. 68 FR 23844. Because the FMCSA is a 
part of DOT, and because the FMCSA and TSA rules regulate the 
transport of hazardous materials, including explosives, with regard 
to safety, the exception in 18 U.S.C. 845(a)(1) is triggered.
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    The May 5 FIR also established conditions under which an individual 
who has been determined to be a security threat may appeal the 
determination, and procedures TSA follows when considering an 
appeal.\14\ In addition, the May 5 IFR provides a waiver process for 
those individuals who otherwise could not obtain an HME due to a 
disqualifying felony conviction or mental defect.\15\ Finally, the May 
5 IFR prohibits an individual from holding, and a State from issuing, 
renewing, or transferring an HME for a driver unless the individual has 
met the TSA security threat assessment standards or has been granted a 
waiver.\16\ The May 5 IFR was to take effect in November 2003.\17\
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    \14\ An individual may appeal a determination if the individual 
believes that he or she does not meet the criteria warranting 
revocation. For example, an individual may appeal because he or she 
believes the criminal record to be incorrect, or if the individual's 
conviction for a disqualifying criminal offense was pardoned, 
expunged, or overturned on appeal.
    \15\ Such individuals are permitted to apply for a waiver if 
they can demonstrate that they are rehabilitated or are no longer a 
danger to themselves or others.
    \16\ In the companion Hazmat Program Rule, discussed herein, TSA 
is amending the May 5 IFR to permit one security threat assessment 
for a transfer applicant during the period of time required in the 
driver's original State of issuance. For instance, if the renewal 
period in Virginia is once every 4 years, a driver who obtains his 
HME in Virginia in 2005 and moves to West Virginia in 2006, where 
the renewal period is once every 5 years, is required to undergo a 
new security threat assessment in 2009 in West Virginia, rather than 
within 30 days of moving into West Virginia or in 2010. The Federal 
Motor Carrier Safety Administration's regulations require renewing 
the HME at least once every five years, so drivers across the 
country have nearly identical renewal periods. (49 CFR 383.141(d)). 
Thus, there is no risk that any driver will go more that five years 
without a security threat assessment.
    \17\ An exception to this effective date was a provision in the 
May 5 IFR that required any holder of an HME who had committed a 
disqualifying offense to surrender the HME to the State by September 
2003.
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    In the May 5 IFR, TSA requested and received comments from the 
States, labor organizations, and representatives of the trucking 
industry. In addition, TSA held working group sessions with the States 
to discuss potential fingerprinting systems that would achieve the 
statutory requirements, but would not adversely impact the States. 
Based on the comments received and the working sessions with the 
States, TSA issued a technical amendment in November 2003 to extend the 
date on which fingerprints and applicant information must be 
submitted.\18\ A majority of the States could not implement the program 
by November, and TSA did not have statutory authority to collect fees 
to cover TSA's implementation costs. This technical amendment required 
the States to either submit fingerprints and applicant information by 
April 1, 2004 or request an extension of time and produce a fingerprint 
collection plan by April 1, 2004. All States were required to have the 
fingerprint collection program in place as of December 1, 2004.
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    \18\ 68 FR 63033 (November 7, 2003).
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    In response to the November 2003 technical amendment, a majority of 
the States asked for an extension of time because they were not ready 
to begin collecting applicant information or fingerprints by April 1, 
2004. Therefore, on April 6, 2004, TSA published a final rule removing 
the April 1 date and establishing January 31, 2005 as the date on which 
States must begin complying with the requirements.\19\
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    \19\ 69 FR 17696 (April 6, 2004).
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D. Fee Authority

    On October 1, 2003, legislation was enacted authorizing TSA to 
collect reasonable fees to cover the costs of providing credentialing 
and background investigations in the transportation field, including 
implementation of the USA PATRIOT Act requirements.\20\ Section 520 of 
the Department of Homeland Security Appropriations Act, 2004 (2004 
Appropriations Act) authorizes TSA to collect fees to pay for the 
following costs: Conducting or obtaining a criminal history records 
check (CHRC); reviewing available law enforcement databases, commercial 
databases, and records of other governmental and international 
agencies; reviewing and adjudicating requests for waivers and appeals 
of TSA decisions; and any other costs related to performing the 
background records check or providing the credential.
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    \20\ Department of Homeland Security Appropriations Act, 2004, 
Section 520, Pub. L. 108-90, October 1, 2003, 117 Stat. 1137 (2004 
Appropriations Act).
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    Section 520 of the 2004 Appropriations Act mandates that any fee 
collected shall be available for expenditure only to pay for the costs 
incurred in providing services in connection with performing the 
background check or providing the credential. The fee shall remain 
available until expended.

II. Companion Hazmat Program Rule

    In a related interim final rule (IFR), titled ``Security Threat 
Assessment for Individuals Applying for a Hazardous Materials 
Endorsement for a Commercial Driver's License'' RIN 1652-

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AA17 (the Hazmat Program Rule), that is to be issued in association 
with this proposed fee rule (the Fee NPRM), TSA plans to require States 
to choose between two fingerprint and applicant information collection 
options. TSA intends to require each State to either: (1) collect and 
transmit the fingerprints and applicant information of individuals who 
apply for or renew an HME; or (2) allow an entity approved by TSA (TSA 
agent) to collect and transmit the fingerprints and applicant 
information of such individuals. TSA plans to require States to notify 
TSA in writing of their choice within 30 days of the date the Hazmat 
Program Rule is published in the Federal Register. If a State does not 
notify TSA in writing of its choice by that date, TSA will assume that 
the State has chosen the second option and will work with the State to 
establish a system for a TSA agent to collect fingerprints and 
applicant information in the State. The State will be required to 
operate under the option it chooses until at least February 1, 2008.
    As discussed in more detail below, the State's fingerprint and 
applicant information collection choice under the Hazmat Program Rule 
affects its obligations under the Fee NPRM and affects the fee to be 
charged.

III. Summary of the Proposed Rule

    To comply with the mandates of Section 520 of the 2004 
Appropriations Act, as well as the mandates of the USA PATRIOT Act and 
the SEA, TSA proposes to establish user fees for individuals who apply 
for or renew an HME, and thus are required to undergo a security threat 
assessment in accordance with 49 CFR part 1572. TSA proposes to 
establish two new user fees in addition to the Federal Bureau of 
Investigation's (FBI) fee \21\ for performing the CHRC on behalf of 
government agencies for non-governmental applicants: (1) To cover TSA's 
costs of performing and adjudicating security threat assessments, 
appeals, and waivers (Threat Assessment Fee), and (2) to cover the 
costs of collecting and transmitting fingerprints and applicant 
information (Information Collection Fee).
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    \21\ The FBI is authorized to establish and collect fees to 
process fingerprint identification records and name checks for non-
criminal justice, non-law enforcement employment and licensing 
purposes that may be used for salaries and other expenses incurred 
in providing these services. See Title II of Pub. L. 101-515, 
November 5, 1990, 104 Stat. 2112, codified in a note to 28 U.S.C. 
534.
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    Under the proposed rule, if a State opts to collect fingerprints 
and applicant information itself under the Hazmat Program Rule, the 
State would be required to (1) collect and remit to TSA the Threat 
Assessment Fee in accordance with the requirements of the Fee NPRM and 
(2) collect and remit to the FBI its user fee to perform a CHRC for 
matches of non-governmental applicant names against certain 
disqualifying criminal activity (FBI Fee). Nothing in this proposed 
rule would prohibit the State, under its own fee authority, from 
collecting a fee determined by the State to cover its costs of 
collecting and transmitting fingerprints and applicant information. TSA 
notes that a State may not collect a fee under TSA's fee authority.
    If a State opts to permit a TSA agent to collect and transmit 
fingerprints and applicant information, the State would not be required 
to collect and remit to TSA any fees under the Fee NPRM. Rather, a TSA 
agent would (1) collect and remit to TSA the Threat Assessment Fee; (2) 
collect and remit to the FBI the FBI Fee; and (3) collect and keep the 
Information Collection Fee. The exact amount of the Information 
Collection Fee will be established by TSA, in accordance with Section 
520, once all the States have determined whether to collect and 
transmit fingerprints and applicant information or allow a TSA agent to 
perform these services. These State decisions will enable TSA and a TSA 
agent to determine the final volume, scale, and costs of these 
services.
    Based on the information currently available to the agency, TSA 
proposes the following fees: Information Collection Fee $25-$45, Threat 
Assessment Fee $36, and FBI Fee $22 (if TSA agent collects) or $24 (if 
State collects).
    Pursuant to the Chief Financial Officers Act of 1990, DHS/TSA is 
required to review these fees no less than every two years.\22\ Upon 
review, if it is found that the fees are either too high (i.e., total 
fees exceed the total cost to provide the services) or too low (i.e., 
total fees do not cover the total costs to provide the services), new 
fees will be proposed.
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    \22\ 31 U.S.C. 3512.
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IV. Hazmat Driver Population

    TSA estimates that there are currently 2.7 million HME holders 
throughout the United States. This estimate is based on the results of 
the initial name-based terrorist threat assessment recently performed 
by TSA on the entire current population of HME holders.\23\ Each State 
and the District of Columbia submitted to TSA the names of all current 
(not expired) holders of HMEs. This estimate was based on an actual 
head count, rather than a statistical sampling or other estimate. 
However, the DOT's Bureau of Transportation Statistics (BTS) and the 
U.S. Department of Commerce's U.S. Census Bureau have historically 
estimated the number of drivers carrying hazardous materials (those 
drivers either carrying primarily hazardous materials or carrying such 
on a regular basis) to be in the range of 500,000-800,000.\24\ TSA 
believes this disparity between the total current number of HME holders 
and estimated ``active'' or ``dedicated'' drivers of hazardous 
materials suggests that a significant portion of the HME holder 
population transport hazardous materials rarely or infrequently.
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    \23\ In July 2004, TSA used HME applicant names and biographical 
data to conduct threat assessments on all current HME holders. The 
threat assessment included entering names and biographical data in 
the National Crime Information Center (NCIC) database, the 
Interstate Identification Index (III), and other databases, such as 
terrorism watch lists. TSA noted its intent to conduct these threat 
assessments in the May 5 IFR.
    \24\ Transportation Statistics Annual Reports, 2001, p.120; 
Transportation Statistics Annual Reports, 2003, p.106; Commodity 
Flow Survey: Hazardous Materials, U.S Department of Transportation, 
Bureau of Transportation Statistics, U.S. Census Bureau, Economic 
Census, 1997, p.9; Vehicle Inventory and Use Survey, U.S. Department 
of Commerce, U.S. Census Bureau, 1997. In reaching this estimate, 
TSA extrapolated 1997-2003 data and applied it to current hazardous 
materials volume, driver, and truck estimates.
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    Due to the additional cost, effort, and the prospect of 
disqualification for certain felony offenses resulting from this 
security threat assessment, TSA expects that a certain number of 
current HME holders who do not actively or regularly transport 
hazardous materials will choose not to renew their HME over the course 
of the five-year renewal period. TSA bases this assumption on recent 
discussions with various trucking industry representatives that will be 
affected by TSA's security threat assessment requirement, including 
trucking associations, union leaders and individual trucking 
companies.\25\ Industry representatives predict at least some decrease 
in the HME population as a result of TSA's security threat assessment 
regulation. The same industry representatives further concur that 
current CDL driver shortages across

[[Page 65336]]

the commercial trucking industry, coupled with the fact that drivers 
are not typically paid any wage premium specifically for carrying 
hazardous materials, further support TSA's rationale for some reduction 
of total HME holders due to TSA's security threat assessment process.
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    \25\ To estimate the volume of HME holders expected to submit to 
the TSA security threat assessment processes, TSA conducted phone 
interviews during the months of June and July 2004 with 
representatives from the following organizations: American Trucking 
Association; Estes Express Lines; International Brotherhood of 
Teamsters; Motor Freight Carriers' Associations; National Private 
Truck Council; National Tank Truck Carriers, Inc.; and the Truckload 
Carriers Association.
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    Empirical data suggest that there has been a decline in total HME 
holders over the past year. A recent TSA survey of state motor vehicle 
administrators, representing approximately 20 percent of the 2.7 
million total HME records from the States, revealed a one-year weighted 
average decline of 17 percent from early 2003 to early 2004.\26\ TSA 
believes this decline over the past year is due, at least in part, to 
TSA's security threat assessment regulation (announced publicly in the 
May 5 IFR). With the imposition of the new fees requirement, TSA 
estimates that there will be a 20 percent decline in the HME holder 
population resulting from the first year of operations after the Hazmat 
Program Rule takes effect on January 31, 2005, when the fingerprint and 
application submission and fees will be newly required of HME holders 
when their State-issued CDL must be renewed.
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    \26\ This sample survey decline in total HME holders from 2003 
to 2004 is also supported by the decrease in total HME records in 
the Federal Motor Carrier Safety Administration's (FMCSA) Commercial 
Drivers License Information System (CDLIS) database. In early 2003, 
FMCSA reported to TSA that the CDLIS contained approximately 3.5 
million total HME holders. TSA published this earlier estimate of 
3.5 million total HME holders in the May 5 IFR.
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    Therefore, TSA expects to receive approximately 432,000 new and 
renewal applications in the first year after January 31, 2005.\27\ In 
the second and third years, TSA estimates a 5 percent annual HME 
population decline, for a total of approximately 410,000 and 390,000 
total new and renewal applicants, respectively. After the third year, 
TSA estimates that the regulatory-induced adjustment on the HME holder 
population will have been realized. Thus, in the fourth and fifth 
years, TSA estimates a modest annual growth in renewals and new 
applications, in line with that of overall estimated domestic non-farm 
employment growth, at 1 percent annually. Thus, TSA expects 
approximately 394,000 and 398,000 total new applicants and renewals, 
respectively, in the fourth and fifth years. The total five-year new 
and renewal applicants for whom TSA expects to perform security threat 
assessments will thus be approximately 2.024 million. TSA requests 
comment on these assumptions and estimates.
---------------------------------------------------------------------------

    \27\ 432,000 is calculated by reducing 2.7 million HMEs by 20 
percent, for a total of 2,160,000, and then dividing by 5 to 
calculate an even distribution of TSA's five-year renewal cycle 
requirement. HME estimates for subsequent recurring years are 
calculated accordingly.

 Figure 1.--TSA's Five-Year Estimates for HAZMAT Endorsement Holder Population, Growth and Total New Applicants
                                                  and Renewals
----------------------------------------------------------------------------------------------------------------
                                                                    HME holder        Annual         Total new
                              Year                                     base         percentage    applicants and
                                                                    population        growth         renewals
----------------------------------------------------------------------------------------------------------------
                                                                       2,700,000           \(1)\           \(1)\
1...............................................................       2,160,000             -20         432,000
2...............................................................       2,052,000              -5         410,000
3...............................................................       1,949,000              -5         390,000
4...............................................................       1,969,000               1         394,000
5...............................................................       1,989,000               1         398,000
                                                                 -----------------
    Totals......................................................           \(1)\           \(1)\      2,024,000
----------------------------------------------------------------------------------------------------------------
\(1)\ Not applicable.

V. Fee Program Overview

    The fee program for the security threat assessment consists of 
three parts, discussed below: (A) The Information Collection Fee for 
the collection and transmission of fingerprints and applicant 
information; (B) the Threat Assessment Fee for the security threat 
assessment and associated notification, adjudication, appeal, and 
waiver processes; and (C) the FBI Fee for checking applicants' 
fingerprints against the FBI's CHRC database to identify past criminal 
offenses as reported to FBI. Each of these fees is structured to 
recover the Federal Government's cost of performing these functions.
    TSA notes that some States may opt to collect and transmit 
fingerprints and applicant information under their own user fee 
authority. In those States, HME applicants will be required under the 
Fee NPRM to remit to the Federal Government only the Threat Assessment 
Fee and FBI Fee. Nothing in this proposed rule would prohibit the State 
from collecting a fee determined by the State under the State's own fee 
authority to cover its costs of collecting and transmitting 
fingerprints and applicant information. TSA notes that a State may not 
collect a fee pursuant to TSA's fee authority to reimburse the State's 
costs.
    A discussion of the three fees summarized above follows.

A. Information Collection Fee

    As set forth in the Hazmat Program Rule, the security threat 
assessment process requires all drivers who apply for or renew an HME 
to submit fingerprints and other biographical information. The Hazmat 
Program Rule is expected to require States to choose one of the 
following two options for collection and transmission of fingerprints 
and applicant information:
    (1) A State may choose to collect and transmit fingerprints and 
applicant information itself, either through a State agency, such as 
the State DMV or State law enforcement agencies, or by contracting with 
a third party; or
    (2) A State may choose to allow a TSA agent to collect and transmit 
fingerprints and applicant information.
1. Cost of Information Collection
    As noted above, in those States that choose to allow a TSA agent to 
collect and transmit fingerprints and applicant information, TSA will 
hire a contractor agent to provide those services. Based on TSA's 
informal research of both commercial and government fingerprint and 
information collection services, TSA estimates that the per applicant 
fee to collect and transmit fingerprints and other required applicant 
data electronically will range from $25 to $45 per applicant. This 
range will vary based on economies of scale which depend primarily on 
the number of States (and thus number of annual HME

[[Page 65337]]

new applicants and renewals) that can be serviced by one or more agents 
(i.e., TSA's agent(s) and any agents that the States may assign on 
their behalf to perform such services), as well as the existing 
infrastructure that States currently have to process fingerprint-based 
background checks.\28\ Also included in this estimated fee range are 
the costs for required administrative support such as providing 
application status to applicants. TSA requests comment on these 
estimates.
---------------------------------------------------------------------------

    \28\ For example, if 40 States choose to allow a TSA agent to 
collect fingerprints and applicant information, the TSA agent's 
economies of scale would be greater, and thus the Information 
Collection Fee would be less, than if 15 States choose this option.
---------------------------------------------------------------------------

2. Information Collection Fee
    Based on the above cost estimate, TSA anticipates a per applicant 
fee for information collection and transmission to range from $25 to 
$45. This fee will only apply to those HME applicants in States that 
have chosen to have a TSA agent perform information collection and 
transmission, as well as related administrative support. States that 
choose to perform the information collection and transmission functions 
themselves and charge a fee under their own user fee authority are 
responsible for establishing their own State fee, in accordance with 
their user fee criteria and requirements, to recover the costs of 
performing these services. TSA's final Information Collection Fee may 
not be the same as the fees States may establish for performing these 
services. The Information Collection Fee will not include the fee 
charged by FBI to process fingerprint identification records.

B. Threat Assessment Fee

    For the TSA security threat assessment process, each applicant's 
information will be checked against multiple databases and other 
information sources so TSA can determine whether the applicant poses a 
security threat that warrants denial of the HME. This check searches 
for potential security threats, immigration status, past criminal 
activity and mental incompetence. The threat assessment includes an 
appeal process for individuals who believe the records on which TSA 
bases its determination are incorrect. TSA will perform all of the 
threat assessment functions. In addition, TSA will administer a waiver 
process for applicants who seek a waiver of disqualification. 
Individuals whom TSA has determined to pose a security threat based on 
reviews of pertinent databases, or who are not in the U.S. lawfully, 
are not eligible for a waiver.\29\
---------------------------------------------------------------------------

    \29\ These threat assessment standards are contained at 49 CFR 
part 1572.
---------------------------------------------------------------------------

    TSA requests comments on the estimated costs discussed below.
1. Start-Up Costs
    TSA's effort to conduct security threat assessments on drivers with 
an HME will require ``start-up'' costs that TSA will incur before 
January 31, 2005, when the Hazmat Program Rule will take effect, as 
well as annual ``recurring,'' costs for checks conducted in years after 
January 31, 2005. The start-up costs will consist of all the costs 
associated with start-up activities necessary to implement the program, 
including costs associated with the initial name-based background 
checks performed on the entire population of drivers that currently 
hold an HME. The start-up costs also will include the systems, 
personnel, and resources TSA will be required to bring on-line to 
conduct security threat assessments on applicants renewing or newly 
applying for a CDL with an HME.
    Regardless of whether a State or a TSA agent collects and transmits 
fingerprints and applicant information, TSA must implement and maintain 
the appropriate systems, resources, and personnel to ensure that 
fingerprints and applicant information are ``linked,'' and that TSA can 
receive and act on the results of the security threat assessment. TSA 
will be required to have the necessary resources to perform the 
security threat assessments and process appeals, requests for waivers, 
and notification (to the driver and the appropriate State) of all 
results. In addition, TSA must also be capable of archiving the results 
of these actions for the purpose of drivers newly applying or renewing 
their HME application in future years (in the case of drivers who 
successfully appealed a TSA background check or were granted a waiver).
    TSA estimates that the total start-up cost for the Hazmat Program 
will be $4.76 million. This estimate includes: (i) $2.67 million for 
all information systems costs, including the development and deployment 
of TSA's Hazardous Materials Endorsement Screening Gateway (HMESG)--an 
information system platform that allows TSA to submit, receive, and 
integrate security threat assessment information from a variety of 
Federal, State and other sources in order to help make security threat 
assessment determinations, and related network and communication 
support costs, including access to information systems from the 
Association of American Motor Vehicle Administrators (AAMVA), the Law 
Enforcement Management System (LEMS), Interpol and required disaster 
recovery infrastructure; (ii) $1.89 million for Federal and contract 
personnel to perform various program management functions in support of 
program operations, including support and compliance assurance teams 
for the States; and (iii) $197,000 for office costs, including mailing 
costs and program travel. See Figure 2 below for additional details.
2. Recurring Costs
    This section summarizes TSA's estimated costs of completing 
security threat assessments on individuals who apply for or renew an 
HME for each year after January 31, 2005. Recurring costs represent the 
resources necessary for TSA to perform ongoing security threat 
assessments on drivers applying for or renewing an HME as well as to 
maintain program infrastructure (e.g. technical systems). As previously 
stated, TSA estimates that the population of drivers who apply for or 
renew an HME will be 432,000 drivers for the first year. Pursuant to 
the Hazmat Program Rule, State DMVs will be prohibited from issuing or 
renewing an HME until TSA has notified the State that the driver (based 
on a security threat assessment) does not pose a security threat.
    TSA estimates that the total annual recurring costs will be $14.19 
million for the first year (i.e., from January 31, 2005 to January 30, 
2006) and between $13.23 million and $13.58 million per year for the 
second through fifth years.\30\ Recurring costs will include the costs 
of: continued development and lifecycle maintenance of information 
systems; digitization of applicant biographical data; the use of 
databases containing citizenship, international criminal history, and 
other data necessary to perform a security threat assessment; Federal 
and contractor personnel to perform all program office functions, 
including support of State's activities in the program along with 
compliance assurance; Federal and contractor support to perform 
security threat assessments, and to administer and document 
adjudications, appeals, waivers, and compliance assurance; \31\

[[Page 65338]]

and office costs, including office space, notification mailing costs, 
and required program travel. See Figure 2 below for additional cost 
details.
---------------------------------------------------------------------------

    \30\ All cost and fee estimates in recurring years are not 
adjusted for inflation.
    \31\ TSA notes that as the Hazmat Program matures, and TSA gains 
experience with the appeals and waiver processes, the agency may 
need to adjust these processes. If TSA adjusts the appeals or waiver 
process, the agency's costs may increase, which would necessitate an 
increase in the Threat Assessment Fee.
---------------------------------------------------------------------------

3. Threat Assessment Total Costs
    Based on its population and cost estimates assumptions, TSA 
estimates that the sum total of the start-up and first five-years' 
recurring costs will be $72.42 million. TSA notes that these are 
preliminary estimates that will continue to be refined. TSA requests 
comment on these estimates. Recurring years' costs are not adjusted for 
inflation. All figures rounded to the nearest thousand.

BILLING CODE 4910-62-P

[[Page 65339]]

[GRAPHIC] [TIFF OMITTED] TP10NO04.001


[[Page 65340]]


BILLING CODE 4910-62-C
4. Threat Assessment Fee Calculation
    TSA is proposing to charge a fee to recover its security threat 
assessment start-up costs as well as recurring costs. The start-up 
costs include costs related to the name check security threat 
assessments performed prior to January 31, 2005, for individuals who 
currently hold an HME as well as other non-recurring costs required to 
perform the recurring years' security threat assessments that include 
fingerprint submission. Because these costs cannot be recovered prior 
to the full implementation of the Hazmat Program, and because all HME 
recipients benefit from the services provided as a result of the 
infrastructure and capabilities that TSA must develop to implement the 
Hazmat Program, TSA proposes to amortize the start-up costs over a 5-
year period to equitably recover these one-time costs.
    This amortization period coincides with the requirement in the 
FMCSA companion rule \32\ to the May 5 IFR \33\ that States mandate a 
5-year maximum renewal period for the HMEs. Thus, a 5-year amortization 
period would mean the start-up costs would be borne by all individuals 
who either currently hold an HME or who apply for an HME in that 5-year 
period. TSA notes that the amortization is done by totaling all start-
up costs and the 5-year annual recurring costs and dividing by 2.024 
million requests for a new or renewed HME--the total number expected in 
the first 5 years. (See Figure 1).
---------------------------------------------------------------------------

    \32\ 68 FR 23843, May 5, 2003.
    \33\ 68 FR 23852, May 5, 2003.
---------------------------------------------------------------------------

    Based on the estimated costs in Figure 2, TSA has calculated the 
per applicant Threat Assessment Fee as follows: TSA's estimated start-
up costs of $4.76 million, added to the estimated sum of the first five 
years' annual recurring costs of $67.66 million, equal a total of 
$72.42 million. These total costs are then divided by the 2.024 million 
total estimated number of applicants for a new or renewed HME over the 
first five years after January 31, 2005. This calculation results in an 
estimated cost to each applicant of $35.78, which is rounded to $36 per 
applicant.
    As noted above, if a State chooses to collect and transmit 
fingerprints and applicant information under the Hazmat Program Rule, 
the State would still be required to collect the Threat Assessment Fee 
on behalf of TSA and remit it to TSA in accordance with the Fee NPRM. 
If a State chooses to allow a TSA agent to collect and transmit 
fingerprints and applicant information under the Hazmat Program Rule, 
the TSA agent would be required to collect this fee on behalf of TSA 
and remit it to TSA in accordance with the Fee NPRM.

C. FBI Fee

    As part of the security threat assessment, TSA will use FBI's CHRC 
process. The FBI is authorized to establish and collect fees to process 
fingerprint identification records and name checks for non-criminal 
justice, non-law enforcement employment and licensing purposes that may 
be used for salaries and other expenses incurred in providing these 
services.\34\ Pursuant to Criminal Justice Information Services (CJIS) 
Information Letter 93-3 (October 8, 1993), this fee is currently set at 
$24. CJIS Information Letter 93-3 provides that ``State Identification 
Bureaus and other agencies that channel user-fee fingerprint cards to 
the FBI and account for the fees on a monthly basis will continue to 
retain $2 of the payment to help offset handling costs.'' Thus, in 
those States that opt to allow a TSA agent to collect and transmit 
fingerprints and applicant information, the FBI fingerprint processing 
charge (FBI Fee) will be $22. States that choose to collect and 
transmit fingerprints and applicant information on their own may charge 
$24 (the $22 FBI Fee plus the $2 handling costs), as long as it is 
consistent with CJIS Information Letter 93-3. The fingerprint 
processing user fee is set by the FBI, and the amount is subject to 
change.
---------------------------------------------------------------------------

    \34\ See Title II of Pub. L. 101-515, November 5, 1990, 104 
Stat. 2112, codified in a note to 28 U.S.C. 534.
---------------------------------------------------------------------------

VI. Total Fees

    TSA proposes the following fees for HME applicants who submit 
fingerprints and applicant information to a TSA agent:
    (1) Information Collection and Transmission Fee: $25-$45.
    (2) Threat Assessment Fee: $36.
    (3) FBI Fee: $22.
    Thus, the total fees for such applicants would be $83-$103.
    Under the Fee NPRM, in States that opt to collect and transmit 
fingerprints and applicant information on their own HME applicants 
would be required to pay the $36 Threat Assessment Fee and an FBI Fee 
of $22 or $24, depending on the amount charged by the State. TSA 
assumes that such applicants also would be required under State user 
fee authority to pay to the State a fee to cover the State's costs of 
collecting and transmitting fingerprints and applicant information. 
That fee should vary from State to State. Thus, TSA cannot estimate the 
total fees for such applicants.

VII. Section by Section Analysis

    Section 1522.1 would establish the applicability of this part and 
definitions of terms used in this part. This part would apply to States 
that issue an HME, individuals who apply for a new or renewed HME, and 
entities that collect fees from such individuals on behalf of TSA.
    The terms ``commercial drivers license,'' ``endorsement,'' and 
``hazardous materials'' would be used as defined in FMCSA regulations.
    The term ``day'' would be defined as a calendar day.
    The term ``FBI Fee'' would be defined as the fee required for the 
cost of the FBI to process fingerprint identification records and name 
checks.
    The term ``hazardous materials endorsement'' would be defined as 
the authorization for an individual to transport hazardous materials in 
commerce, which must be issued on the individual's commercial driver's 
license.
    The term ``Information Collection Fee'' would be defined as the fee 
required for the cost of collecting and transmitting fingerprints and 
other applicant information under 49 CFR part 1572.
    The term ``State'' would be defined as a U.S. State or the District 
of Columbia.
    The term ``Threat Assessment Fee'' would be defined as the fee 
required for the cost of TSA adjudicating security threat assessments, 
appeals, and waivers under 49 CFR part 1572.
    The term ``TSA agent'' would be defined as an entity approved by 
TSA to collect fingerprints in accordance with 49 CFR part 1572 and 
fees in accordance with this subpart.
    Sections 1522.3 through 1522.9 would be reserved.
    Section 1522.11 would require a State that collects fingerprints 
and applicant information under 49 CFR part 1572 to collect, handle, 
and remit to TSA the Threat Assessment Fee in accordance with the 
procedures in Sec.  1522.13. Section 1522.11 would require a TSA agent 
that collects fingerprints and applicant information under 49 CFR part 
1572 to collect the Information Collection Fee, Threat Assessment Fee, 
and FBI Fee in accordance with the procedures in Sec.  1522.15. A TSA 
agent also would be required to remit to TSA the Threat Assessment Fee 
and remit to the FBI the FBI Fee in accordance with that section.
    Section 1522.13 describes the procedures a State would be required 
to

[[Page 65341]]

follow if the State chooses to collect and transmit fingerprints under 
the Hazmat Program Rule. Section 1522.13 would pertain only to the 
collection of Threat Assessment Fees to cover TSA's costs. Nothing in 
this regulation would prohibit a State from collecting additional fees, 
under its own user fee authority, to cover its costs of collecting and 
transmitting fingerprints and applicant information or the costs 
associated with collecting and remitting the FBI's CHRC fee at the time 
the State collects the TSA Threat Assessment Fee from HME applicants.
    Paragraph 1522.13(a) would require States to impose the Threat 
Assessment Fee when an individual submits an application to the State 
for a new or renewed HME in compliance with 49 CFR part 1572. It also 
would establish the TSA Threat Assessment Fee at $36. Finally, it would 
require the individual applying for the HME to remit the Threat 
Assessment Fee to the State in which the individual is applying for the 
HME, in a form and manner approved by TSA and the State.
    Paragraph 1522.13(b) would require each State to collect the Threat 
Assessment Fee from an individual at the time the individual submits an 
application for a new or renewed HME. TSA expects that as States become 
fully operational for purposes of this part, TSA will be receiving 
names frequently and far in advance of the States remitting the Threat 
Assessment Fee. Therefore, it is vital that the States collect the 
Threat Assessment Fee under this part from the applicant as the 
application is submitted. In addition, paragraph 1522.13(d)(8) provides 
that TSA does not envision issuing any refunds. Once the application is 
received by TSA, analysis of the application would commence 
immediately. Therefore, TSA incurs the costs of performing the analysis 
immediately. Paragraph 1522.13(b)(2) clarifies that once TSA receives 
an application from a State for a security threat assessment in 
accordance with 49 CFR part 1572, the State is liable for the Threat 
Assessment Fee.
    Paragraph 1522.13(c) would establish requirements for the handling 
of Threat Assessment Fees collected by the States prior to remittance 
to TSA. Because the States are collecting the Threat Assessment Fees on 
behalf of TSA, the fees would be considered to be held in trust for the 
beneficial interest of the United States. Thus, States would be 
required to safeguard all Threat Assessment Fees collected until they 
are remitted to TSA. In addition, States would be required to account 
for Threat Assessment Fees separately. However States would be 
permitted to commingle such fees with other sources of revenue.
    Paragraph 1522.13(d) would establish procedures for the remittance 
of Threat Assessment Fees to TSA. States would be required to remit all 
Threat Assessment Fees collected under this part to TSA on a monthly 
basis. Every month, TSA would issue an invoice to each State based on 
the number of HME applications the State has sent to TSA. For example, 
if a State sends TSA 100 HME applications during the month of February, 
TSA would bill the State $3600 (100 x $36). The State would be required 
to pay the invoice in full within 30 days of the date that TSA sends 
the invoice to the State.
    The payments would be required to be remitted to TSA by electronic 
funds transfer, check, money order, wire, or draft, payable to the 
``Transportation Security Administration'' in U.S. currency and drawn 
on a U.S. bank. States would be allowed to retain any interest that 
accrues on the principal amounts of the Threat Assessment Fees between 
the date of collection and the date the fees are remitted to TSA, not 
to exceed 30 days from the date that TSA sends the invoice to the 
State.
    Paragraph (d) also would specify that TSA accept fees only from a 
State, not from an individual HME applicant. TSA would not issue any 
fee refunds, and, if a State does not remit the Threat Assessment Fees, 
TSA could decline to process any HME applications from that State. TSA 
would reserve the right to take any other appropriate action against 
delinquent States, as necessary.
    TSA requests comments on all aspects of these proposed procedures 
for States.
    Section 1522.15 describes the procedures that a TSA agent and an 
HME applicant would be required to follow if a State chooses to permit 
a TSA agent to collect fingerprints and applicant information under the 
Hazmat Program Rule. Paragraph 1522.15(a) would require an individual 
applying for an HME to remit the Threat Assessment Fee, FBI Fee, and 
Information Collection Fee to the TSA agent, in a form and manner 
approved by TSA, when the individual submits an application pursuant to 
part 1572 to the TSA agent. It also would establish the Threat 
Assessment Fee at $36, the FBI Fee at $22, and the Information 
Collection Fee at $25-$45.
    Paragraph 1522.15(b) states that a TSA agent will collect the fees 
required under this section when an individual submits an application 
pursuant to 49 CFR part 1572.
    Paragraph 1522.15(c) would require that fees remitted under this 
section be remitted to TSA by electronic funds transfer, check, money 
order, wire, or draft, payable to the ``Transportation Security 
Administration'' in U.S. currency and drawn on a U.S. bank. It also 
would specify that TSA will not issue any refunds of fees submitted 
under this section. Finally, it would specify that applications 
submitted under 49 CFR part 1572 would be processed only upon receipt 
of all applicable fees.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), as 
amended, requires consideration of the impact of paperwork and other 
information collection burdens imposed on the public. As provided by 
the PRA, an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid Office of Management and Budget (OMB) control number. 
TSA has determined that there are no new information collection 
requirements associated with this proposed rule.
    TSA notes that the Hazmat Program Rule requires drivers to submit 
their fingerprints and other biographical information. Those 
requirements may be considered an information collection burden under 
the PRA. Since they are imposed under the Hazmat Program Rule, they 
will be discussed in that rulemaking.

Regulatory Analyses

    Proposed changes to Federal regulations must undergo several 
economic analyses. First, Executive Order 12866 directs each Federal 
agency to propose or adopt a regulation only if the agency makes a 
reasoned determination that the benefits of the intended regulation 
justify its costs. Second, the Regulatory Flexibility Act of 1980 (5 
U.S.C. 605(b)) requires agencies to analyze the economic impact of 
regulatory changes on small entities. Third, the Trade Agreements Act 
(19 U.S.C. 2531-2533) prohibits agencies from setting standards that 
create unnecessary obstacles to the foreign commerce of the United 
States. In developing U.S. standards, the Trade Agreement Act requires 
agencies to consider international standards, where appropriate, as the 
basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 
1995 (Public Law 104-4) requires agencies to prepare a written 
assessment of the costs, benefits, and other effects of proposed or 
final rules that include a Federal mandate likely to result in the 
expenditure by State, local, or tribal governments, in the aggregate, 
or by the

[[Page 65342]]

private sector, of $100 million or more annually (adjusted for 
inflation).
    In conducting these analyses, TSA has determined:
    1. This proposed rule is a ``significant regulatory action'' as 
defined in the Executive Order because there is significant public 
interest in security issues since September 11, 2001. However, TSA 
estimates that the proposed rule would not exceed the $100 million 
annual threshold that would cause it to be economically significant.
    2. An initial Regulatory Flexibility Analysis suggests the proposed 
rule would not have a significant impact on a substantial number of 
small entities;
    3. The proposed rule would impose no significant barriers to 
international trade; and
    4. The proposed rule would not impose an unfunded mandate on State, 
local, or tribal governments, or on the private sector in excess of 
$100 million annually.
    Below is a summary of each section of the Fee NPRM and its 
respective cost impact.

Executive Order 12866 Assessment

    Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735, October 4, 1993), provides for making determinations whether a 
regulatory action is ``significant'' and therefore subject to OMB 
review and to the requirements of the Executive Order. TSA has 
determined that this action is a significant regulatory action within 
the meaning of Executive Order 12866 because there is significant 
public interest in security issues since September 11, 2001, as well as 
the background check requirements in the Hazmat Program Rule.
    This proposed rule responds to the requirements of Section 520 of 
the 2004 Appropriations Act by establishing fees for the background 
checks TSA is required to perform by Section 1012 of the USA PATRIOT 
Act and Sections 1121-1123 of the SEA. The Fee NPRM would establish two 
fees: a user fee to cover the HME security threat assessment program 
and associated costs (Threat Assessment Fee) and a user fee to cover 
the costs of collecting and transmitting fingerprints and applicant 
information (Information Collection Fee). The amount of the proposed 
fees are $36 (Threat Assessment Fee) and $25-$45 (Information 
Collection and Transmission Fee) per HME applicant. There will also be 
a $22 fee to cover FBI's CHRC.
    TSA has prepared a full regulatory evaluation for this notice of 
proposed rulemaking (NPRM), which is available for review in the docket 
of this matter. The regulatory evaluation examines the costs and 
benefits of the proposed rule to establish fees for security threat 
assessments that TSA is required to perform on individuals who apply 
for or renew an HME for a CDL. The results of the evaluation are 
summarized below.

Costs

    The following sections summarize the estimated costs of the Fee 
NPRM. Under the Hazmat Program Rule, as described above, each State 
will be required to choose between two fingerprint and applicant 
information collection and transmission options. Each State will be 
required to either: (1) Collect and transmit the fingerprints and 
applicant information of individuals who apply for or renew an HME; or 
(2) allow an entity approved by TSA to complete these tasks. States 
will be required to notify TSA in writing of their choice within 30 
days of the date the Hazmat Program Rule is published in the Federal 
Register. Because these different options have different cost impacts 
under the Fee NPRM--and because TSA cannot predict which option each 
State will choose--it is impossible to produce one accurate cost 
estimate for the Fee NPRM.
    For the purposes of the regulatory evaluation, therefore, three 
scenarios will be evaluated: (1) All States decide to collect and 
transmit the fingerprints and applicant information of individuals who 
apply for or renew an HME; (2) twenty-five States choose to collect and 
transmit all required fingerprints and applicant information to TSA, 
while the remainder allows an approved TSA agent to complete the work; 
and (3) all States decide to allow an approved TSA agent to collect all 
required fingerprints and applicant information. The second scenario 
represents TSA's best estimate for what will happen once the Fee NPRM 
becomes effective and is based on communications with the States.
    It is important to note that the figures detailed in this 
evaluation reflect only the estimated cost of determining, 
administering, and remitting fees associated with collecting and 
transmitting fingerprints and applicant information. A detailed 
discussion of the cost estimates can be found in the Regulatory 
Evaluation.
(1) State Option
    If all States opt to collect fingerprints and applicant information 
to comply with the Hazmat Program Rule, the States would be required to 
(1) collect and remit to TSA the Threat Assessment Fee in accordance 
with the requirements of the Fee NPRM and (2) collect and remit to the 
FBI its user fee to perform a CHRC for matches of non-governmental 
applicant names against certain disqualifying criminal activity (FBI 
Fee). If this alternative is adopted, the total ten-year cost of the 
Fee NPRM in constant 2004 U.S. Dollars is estimated to be $5.3 million, 
and $4.0 million discounted.
(2) Best Estimate
    In this estimate, it is assumed that twenty-five States will choose 
to comply with the Hazmat Program Rule by collecting fingerprints, 
fees, and applicant information themselves; the remainder of the States 
will allow an approved TSA agent to collect and transmit fingerprints 
and applicant information as well as all fees. Under these assumptions, 
the ten-year cost of the Fee NPRM is estimated to be $4.6 million, and 
$3.5 million discounted.
(3) TSA Option
    If all States opt to permit a TSA agent to collect and transmit 
fingerprints, fees, and applicant information, the States would not be 
required to collect and remit to TSA any fees under the Fee NPRM. 
Rather, a TSA agent would collect and remit all required fingerprints, 
information, and fees. If all States choose this option, the ten-year 
cost of the Fee NPRM falls to $3.9 million, and $3.0 million 
discounted.
    In all of these estimates, the costs of the Fee NPRM are well below 
the annual $100 million threshold established by EO 12866 that would 
cause the Fee NPRM to be identified as a major rule. A further 
discussion of these costs is contained in the Regulatory Evaluation.

Benefits

    There are several qualitative benefits realized from the 
implementation of the Fee NPRM. Primarily, the Fee NPRM provides a 
funding mechanism for the Hazmat Program Rule, which regulates the 
population of hazardous materials drivers. In essence, the Fee NPRM 
would allow TSA to spread the costs associated with processing threat 
assessments in an equitable manner among the affected parties. TSA 
determined that creating a Fee NPRM was the most equitable, efficient, 
and cost effective way to fund the aforementioned Hazmat Program Rule.

Initial Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA), as amended, was 
enacted by Congress to ensure that small entities

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(small businesses, small not-for-profit organizations, and small 
governmental jurisdictions) are not unnecessarily or disproportionately 
burdened by Federal regulations. The RFA requires agencies to review 
rules to determine if they have ``a significant economic impact on a 
substantial number of small entities.'' TSA has tentatively determined 
that the proposed rule would not have a significant economic impact on 
a substantial number of small entities.
    This proposal would affect the States and individuals. However, 
States are not considered ``small governmental jurisdictions,'' such as 
small towns or boroughs, and individuals are not considered ``small 
entities'' under the RFA.
    Small businesses are identified as small entities under the RFA. 
For the purpose of this analysis, it will be assumed that the total 
fees associated with obtaining an HME would not exceed $100. Businesses 
transporting hazardous materials often incur high fixed and sunk costs. 
The approximately $100 in fees, therefore, measured as a percentage of 
the total operating costs of a typical small business working in the 
hazardous materials transportation industry, would not represent a 
significant economic burden.
    TSA has tentatively determined that this proposed rule would not 
have a significant impact on a substantial number of small entities. 
TSA requests comment on this issue.

Unfunded Mandates Assessment

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires Federal agencies to prepare a written assessment of the costs, 
benefits, and other effects of proposed or final rules that include a 
Federal mandate likely to result in the expenditure by State, local, or 
tribal governments, in the aggregate, or by the private sector, of more 
than $100 million in any one year (adjusted for inflation with base 
year of 1995). Before promulgating a rule for which a written 
assessment is needed, section 205 of the UMRA generally requires TSA to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, most cost-effective, or least burdensome 
alternative that achieves the objective of the rule. The provisions of 
section 205 do not apply when they are inconsistent with applicable 
law. Moreover, section 205 allows TSA to adopt an alternative other 
than the least costly, most cost-effective, or least burdensome 
alternative if the agency publishes with the final rule an explanation 
of the reasons that alternative was not adopted.
    TSA has determined that this proposed rule would not result in the 
expenditure by State, local, or tribal governments, in the aggregate, 
or by the private sector, of more than $100 million annually. As noted 
above in the Executive Order 12866 analysis, the costs of the Fee NPRM 
would be well below the $100 million annually in each of the three 
scenarios analyzed.

International Trade Impact Assessment

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States. Legitimate domestic objectives, such as safety, are not 
considered unnecessary obstacles. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards.
    TSA has assessed the potential effect of this rulemaking and has 
determined that it would have only a domestic impact and therefore no 
effect on any trade-sensitive activity. This proposed rule would impact 
only individuals applying for a State-issued HME, not individuals with 
an HME issued by Canada or Mexico. TSA will continue to consult with 
Canada and Mexico to ensure that any adverse impacts on trade are 
minimized.

Executive Order 13132 (Federalism)

    Executive Order 13132 requires TSA to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that 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.''
    TSA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132. TSA notes that the requirements of 
this proposed rule are mandated by various statutes, including the USA 
PATRIOT Act, SEA, and section 520 of the Homeland Security 
Appropriations Act of 2004. Moreover, the Federal government, primarily 
through the Federal Motor Carrier Safety Administration, is already 
substantially involved in establishing conditions for the issuance of 
an HME. Accordingly, TSA has determined that this action would not have 
a substantial direct effect on the States, on the relationship between 
the national Government and the States, or on the distribution of power 
and responsibilities among the various levels of government, and 
therefore would not have federalism implications.

Environmental Analysis

    TSA has reviewed this proposal for purposes of the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4347) and has 
determined that this action would not have a significant effect on the 
human environment. The proposed rule would only implement a fee 
structure for commercial drivers who transport hazardous materials, and 
thus would have no environmental consequences.

Energy Impact

    TSA has assessed the energy impact of this proposal in accordance 
with the Energy Policy and Conservation Act (EPCA) Public Law 94-163, 
as amended (42 U.S.C. 6362). We have determined that this rulemaking is 
not a major regulatory action under the provisions of the EPCA.

List of Subjects in 49 CFR Part 1522

    Fees, Commercial drivers license, Criminal history background 
checks, Explosives, Hazardous materials, Motor carriers, Motor vehicle 
carriers, Security measures, Security threat assessment.

The Proposed Amendments

    For the reasons set forth in the preamble, the Transportation 
Security Administration proposes to amend 49 CFR Chapter XII, 
Subchapter B as follows:
    1. Add part 1522 to read as follows:

PART 1522--FEES FOR CREDENTIALING AND SECURITY THREAT ASSESSMENTS

Subpart A--Fees for Security Threat Assessments for Individuals
Sec.
1522.1 Scope and definitions.
1522.3-1522.9 [Reserved]
Subpart B--Fees for Security Threat Assessments for Hazmat Drivers
1522.11 Fee collection options.
1522.13 Fee procedures for collection by States.
1522.15 Fee procedures for collection by TSA agents.

    Authority: 49 U.S.C. 114, 5103a, 40113, and 46105; Pub. L. 108-
90, 117 Stat. 1137.

Subpart A--Fees for Security Threat Assessments for Individuals


Sec.  1522.1  Scope and definitions.

    (a) Scope. This part applies to States that issue a hazardous 
materials

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endorsement for a commercial drivers license; to individuals who apply 
for or renew a hazardous materials endorsement for a commercial drivers 
license and must undergo a security threat assessment under 49 CFR part 
1572; and to entities who collect fees from such individuals on behalf 
of TSA.
    (b) Terms. As used in this part:
    Commercial drivers license (CDL) is used as defined in 49 CFR 
383.5.
    Day means calendar day.
    Endorsement is used as defined in 49 CFR 383.5.
    FBI Fee means the fee required for the cost of the Federal Bureau 
of Investigation to process fingerprint identification records and name 
checks.
    Hazardous materials means any material that has been designated as 
hazardous under 49 U.S.C. 5103 and is required to be placarded under 
subpart F of 49 CFR part 172 or any quantity of a material listed as a 
select agent or toxin in 42 CFR part 73.
    Hazardous materials endorsement (HME) means the authorization for 
an individual to transport hazardous materials in commerce, which must 
be issued on the individual's commercial drivers license.
    Information Collection Fee means the fee required in this part for 
the cost of collecting and transmitting fingerprints and other 
applicant information under 49 CFR part 1572.
    State means a State of the United States or the District of 
Columbia.
    Threat Assessment Fee means the fee required in this part for the 
cost of TSA adjudicating security threat assessments, appeals, and 
waivers under 49 CFR part 1572.
    TSA agent means an entity approved by TSA to collect and transmit 
fingerprints and applicant information in accordance with 49 CFR part 
1572 and fees in accordance with this part.


Sec. Sec.  1522.3-1522.9  [Reserved]

Subpart B--Fees for Security Threat Assessments for Hazmat Drivers


Sec.  1522.11  Fee collection options.

    (a) State collection and transmission. If a State collects 
fingerprints and applicant information under 49 CFR part 1572, the 
State must collect and transmit to TSA the Threat Assessment Fee in 
accordance with the requirements of Sec.  1522.13.
    (b) TSA agent collection and transmission. If a TSA agent collects 
fingerprints and applicant information under 49 CFR part 1572, the 
agent must--
    (1) Collect the Information Collection Fee, Threat Assessment Fee, 
and FBI Fee in accordance with the requirements of Sec.  1522.15;
    (2) Transmit to TSA the Threat Assessment Fee in accordance with 
the requirements of Sec.  1522.15 and any other procedures approved by 
TSA; and
    (3) Transmit to the Federal Bureau of Investigation the FBI Fee in 
accordance with procedures approved by TSA.


Sec.  1522.13  Fee procedures for collection by States.

    This section describes the procedures that a State that collects 
fingerprints and applicant information under 49 CFR part 1572, and the 
procedures an individual who applies for or renews an HME for a CDL in 
that State, must follow for collection and transmission of the Threat 
Assessment Fee.
    (a) Imposition of fee. (1) The following Threat Assessment Fee is 
required for TSA to conduct a security threat assessment under 49 CFR 
part 1572 for an individual who applies for or renews an HME: $36.
    (2) An individual who applies for a new or renewed HME must remit 
to the State the Threat Assessment Fee, in a form and manner approved 
by TSA and the State, when the individual submits the application for 
the HME to the State.
    (b) Collection of fees. (1) A State must collect the Threat 
Assessment Fee when an individual submits an application to the State 
for a new or renewed HME.
    (2) Once TSA receives an application from a State for a security 
threat assessment under 49 CFR part 1572, the State is liable for the 
Threat Assessment Fee.
    (3) Nothing in this subpart prevents a State from collecting any 
other fees that a State may impose on an individual who applies for or 
renews an HME.
    (c) Handling of fees. (1) A State must safeguard all Threat 
Assessment Fees from the time of collection until remittance to TSA.
    (2) All Threat Assessment Fees are held in trust by a State for the 
beneficial interest of the United States in paying for the costs of 
conducting the security threat assessment required by 49 U.S.C. 5103a 
and 49 CFR part 1572. A State holds neither legal nor equitable 
interest in the Threat Assessment Fees except for the right to retain 
any accrued interest on the principal amounts collected pursuant to 
this section.
    (3) A State must account for Threat Assessment Fees separately, but 
may commingle such fees with other sources of revenue.
    (d) Remittance of fees. (1) TSA will generate and provide an 
invoice to a State on a monthly basis. The invoice will indicate the 
total fee dollars (number of applicants times the Threat Assessment 
Fee) that are due for the month.
    (2) A State must remit to TSA full payment for the invoice within 
30 days after TSA sends the invoice.
    (3) TSA accepts Threat Assessment Fees only from a State, not from 
an individual applicant for an HME.
    (4) A State may retain any interest that accrues on the principal 
amounts collected between the date of collection and the date the 
Threat Assessment Fee is remitted to TSA in accordance with paragraph 
(d)(2) of this section.
    (5) A State may not retain any portion of the Threat Assessment Fee 
to offset the costs of collecting, handling, or remitting Threat 
Assessment Fees.
    (6) Threat Assessment Fees remitted to TSA by a State must be 
payable to the ``Transportation Security Administration'' in United 
States currency and drawn on a United States bank.
    (7) Threat Assessment Fees may be remitted by electronic funds 
transfer, check, money order, wire transfer, or draft.
    (8) TSA will not issue any refunds of Threat Assessment Fees.
    (9) If a State does not remit the Threat Assessment Fees for any 
month, TSA may decline to process any HME applications from that State.


Sec.  1522.15  Fee procedures for collection by TSA agents.

    This section describes the procedures that a TSA agent that 
collects fingerprints and applicant information under 49 CFR part 1572 
in a State, and the procedures an individual who applies for or renews 
an HME for a CDL in that State, must follow for collection and 
transmission of the Information Collection, Threat Assessment Fee, and 
FBI Fee.
    (a) Imposition of fees. (1) The following Information Collection 
Fee is required for a TSA agent to collect and transmit fingerprints 
and applicant information in accordance with 49 CFR part 1572: $25-45.
    (2) The following Threat Assessment Fee is required for TSA to 
conduct a security threat assessment under 49 CFR part 1572 for an 
individual who applies for or renews an HME: $36.
    (3) The following FBI Fee is required for the FBI to process 
fingerprint identification records and name checks required under 49 
CFR part 1572: the fee collected by the FBI under 28 U.S.C. 534.
    (4) An individual who applies for a new or renewed HME must remit 
to the TSA agent the Information Collection Fee, Threat Assessment Fee, 
and FBI Fee, in a form and manner approved by

[[Page 65345]]

TSA, when the individual submits the application required under 49 CFR 
part 1572.
    (b) Collection of fees. A TSA agent will collect the fees required 
under this section when an individual submits an application to the TSA 
agent in accordance with 49 CFR part 1572.
    (c) Remittance of fees. (1) Fees required under this section that 
are remitted to a TSA agent must be payable to the ``Transportation 
Security Administration'' in United States currency and drawn on a 
United States bank.
    (2) Fees required under this section may be remitted by electronic 
funds transfer, check, money order, wire transfer, or draft.
    (3) TSA will not issue any refunds of fees required under this 
section.
    (4) Applications submitted in accordance with 49 CFR part 1572 will 
be processed only upon receipt of all applicable fees under this 
section.

    Issued in Arlington, VA, on November 5, 2004.
David M. Stone,
Assistant Secretary.
[FR Doc. 04-25122 Filed 11-5-04; 4:02 pm]
BILLING CODE 4910-62-P