[Federal Register Volume 69, Number 229 (Tuesday, November 30, 2004)]
[Proposed Rules]
[Pages 69546-69549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26370]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 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. 69, No. 229 / Tuesday, November 30, 2004 / 
Proposed Rules  

[[Page 69546]]



DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 103

[CIS No. 2245-02; Docket No. DHS-2004-0021]
RIN 1615-AA88


Adjustment of the Appeal and Motion Fees to Recover Full Costs

AGENCY: U.S. Citizenship and Immigration Services, Department of 
Homeland Security.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: On March 1, 2003, the Immigration and Naturalization Service 
(Service) transferred from the Department of Justice (DOJ) to the 
Department of Homeland Security (DHS) pursuant to the Homeland Security 
Act of 2002 (Pub. L. 107-296). The adjudications functions transferred 
to the U.S. Citizenship and Immigration Services (USCIS). This document 
proposes to raise the fee for filing appeals of, and motions to reopen 
or reconsider, any decision under the immigration laws in any type of 
proceeding other than those described at 8 CFR 1003.1(b), over which 
the Board of Immigration Appeals (BIA) has appellate jurisdiction.
    This proposed rule applies to fees for appeals and motions relating 
to the types of cases under the jurisdiction of the Administrative 
Appeals Office (AAO). The AAO is an appellate office of USCIS. The BIA 
remains a component of DOJ, and has appellate jurisdiction over the 
orders of immigration judges, denials of relative immigrant visa 
petitions (Form I-130), and decisions involving administrative fines 
and penalties. Appeals from denials of all other types of applications 
and petitions, and any subsequently filed motions, are under the 
jurisdiction of the AAO.
    In this proposed rule, the fees, which are deposited into the 
Immigration Examinations Fee Account (IEFA), are being raised from $110 
to $385 to recover the full costs associated with the processing of an 
appeal or motion to reopen or motion to reconsider. Federal statutes 
and guidelines authorize USCIS to establish and collect fees to recover 
the full cost of processing immigration benefit applications, rather 
than supporting these services with tax revenue.

DATES: Written comments must be submitted on or before December 30, 
2004.

ADDRESSES: You may submit comments, identified by Docket No. DHS-2004-
0021, by one of the following methods:
     EPA Federal Partner EDOCKET Web Site: http://www.epa.gov/feddocket. Follow instructions for submitting comments on the Web site. 
The Department of Homeland Security has joined the Environmental 
Protection Agency (EPA) online public docket and comment system on its 
Partner Electronic Docket System (Partner EDOCKET). The Department of 
Homeland Security and its agencies (excluding the United States Coast 
Guard and Transportation Security Administration) will use the EPA 
Federal Partner EDOCKET system. The USCG and TSA [legacy Department of 
Transportation (DOT) agencies] will continue to use the DOT Docket 
Management System until full migration to the electronic rulemaking 
federal docket management system in 2005.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. When submitting comments 
electronically, please include Docket No. DHS-2004-0021 in the subject 
line of the message.
     Mail: The Director, Regulatory Management Division, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
111 Massachusetts Avenue, NW., 3rd Floor, Washington, DC 20529. To 
ensure proper handling, please reference Docket No. DHS-2004-0021 on 
your correspondence. This mailing address may also be used for paper, 
disk, or CD-ROM submissions.
     Hand Delivery/Courier: U.S. Citizenship and Immigration 
Services, Department of Homeland Security, 111 Massachusetts Avenue, 
NW., 3rd Floor, Washington, DC 20529. Contact Telephone Number (202) 
514-3048.
    Instructions: All submissions received must include the agency name 
and Docket No. DHS-2004-0021 for this rulemaking. All comments received 
will be posted without change to http://www.epa.gov/feddocket, 
including any personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.epa.gov/feddocket. You may also 
access the Federal eRulemaking Portal at http://www.regulations.gov. 
Submitted comments may also be inspected at the Director, Regulatory 
Management Division, U.S. Citizenship and Immigration Services, 
Department of Homeland Security, 111 Massachusetts Avenue, NW., 3rd 
Floor, Washington, DC 20529. To ensure proper handling, please 
reference CIS No. 2245-02 on your correspondence.

FOR FURTHER INFORMATION CONTACT: Paul Schlesinger, Director, Office of 
Budget, U.S. Citizenship and Immigration Services, 20 Massachusetts 
Avenue, NW., 4th Floor, Washington, DC 20529, telephone (202) 272-1930.

SUPPLEMENTARY INFORMATION:

What Legal Authority Does DHS Have To Charge Fees?

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

    Section 209 of the Departments of Commerce, Justice, and State, the 
Judiciary, and Related Agencies Appropriation Act, 1989, Public Law 
100-459, section 209(a), 102 Stat. 2186, 2203 (October 1, 1988), 8 
U.S.C. 1356(m), authorizes DHS to prescribe and collect fees to recover 
the cost of providing certain immigration and naturalization benefits. 
That law also authorized the establishment of the IEFA in the Treasury 
of the United States. All revenue from fees collected for immigration 
and naturalization benefits are deposited in the IEFA and remain 
available to provide immigration and naturalization benefits and to 
provide for the collection, safeguarding, and accounting for fees. 8 
U.S.C. 1356(n).

B. The Independent Offices Appropriation Act, 1952

    DHS also employs the authority granted by the Independent Offices 
Appropriation Act, 1952 (IOAA), 31 U.S.C. 9701, commonly referred to as 
the ``User Fee Statute,'' to develop its fees. The IOAA directs federal 
agencies

[[Page 69547]]

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 ``[i]t is the sense 
of Congress that each service or thing of value provided by an agency * 
* * to a person * * * is to be self-sustaining to the extent 
possible.'' 31 U.S.C. 9701(a).
    The IOAA further provides that charges for such services or things 
of value should be fair and based on ``(A) the costs to the Government; 
(B) the value of the service or thing to the recipient; (C) public 
policy or interest served; and (D) other relevant facts.'' 31 U.S.C. 
9701(b).

C. The Chief Financial Officers Act of 1990

    DHS must also conform to the requirements of the Chief Financial 
Officers Act of 1990 (CFO Act), Public Law 101-576, 104 Stat. 2838 
(1990). Section 205(a) of the CFO Act, amending 31 U.S.C. 902, requires 
each agency's Chief Financial Officer to ``review, on a biennial basis, 
the fees, 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.'' Public Law 101-576, 104 Stat. 
2838 (1990) at 2844, 31 U.S.C. 902(a)(8).

What Federal Cost Accounting and Fee Setting Standards and Guidelines 
Were Used in Developing the Proposed Fee Changes?

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

    When developing fees for special benefits, DHS adheres to the 
principles contained in OMB Circular No. A-25, Revised, User Charges 
(1993). OMB Circular No. A-25 states at Section 6, 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.''
    The guidance contained in OMB Circular No. A-25 is applicable to 
the extent that it is not inconsistent with any federal statute. For 
example, specific legislative authority to charge fees for special 
benefits takes precedence over OMB Circular No. A-25. Specifically, 
section 4(b) provides ``where a statute prohibits the assessment of a 
user charge on a service or addresses an aspect of the user charge 
(e.g., who pays the charge; how much is the charge; where collections 
are deposited), the statute shall take precedence over the Circular.'' 
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 No. A-25 to the 
fullest extent allowable. The guidance directs federal agencies to 
charge the ``full cost'' of providing benefits when calculating fees 
that provide a special benefit to recipients. Section 6(d) of OMB 
Circular No. A-25 defines ``full cost'' as including ``all direct and 
indirect costs to any part of the Federal Government of providing a 
good, resource, or service.'' These costs include, but are not limited 
to, an appropriate share of:
    (a) Direct and 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) Management and supervisory costs; and
    (d) The costs of enforcement, collection, research, establishment 
of standards, and regulation.
    Finally, section 6(d)(1)(e) states that ``[f]ull 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.''

B. 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, DHS also adheres to the cost 
accounting concepts and standards recommended by the Federal Accounting 
Standards Advisory Board (FASAB). The FASAB was established in 1990, 
and its purpose is to recommend accounting standards for the Federal 
Government. The FASAB defines ``full cost'' to include ``direct and 
indirect costs that contribute to the output, regardless of funding 
sources.'' Federal Accounting Standards Advisory Board, Statement of 
Financial Accounting Standards No. 4: Managerial Cost Accounting 
Concepts and Standards for the Federal Government 36 (July 31, 1995). 
To obtain full cost, FASAB identifies various classifications of costs 
to be included, and recommends various methods of cost assignment, as 
will be discussed later. Id. at 36-42.

How Are the Adjudications of Immigration Benefit Applications Funded 
and Supported?

    Fees collected from immigration benefit applications are used to 
fund the full costs of processing immigration benefit applications. 
Fees deposited into the IEFA have been the primary source of funding 
for the processing of immigration benefit applications, and generally 
have replaced the annual appropriation that was received for such 
services.

How Were the Unit Cost and Proposed Fees for Filing an Appeal or Motion 
Determined?

A. Insufficiency of the Current Fees

    Since 1989, the fees for the vast majority of immigration benefit 
applications have increased more than threefold based on an improved 
cost accounting methodology as well as a general rise in resource 
requirements commensurate with the mission to provide immigration 
information and benefits for USCIS customers in a timely, accurate, 
consistent, courteous, and professional manner.
    However, the current appeal and motion fees of $110 have neither 
been reviewed nor adjusted since 1989. In addition, recent performance 
data indicates that the processing time for an appeal or motion did not 
meet the President's 5-year goal of processing immigration benefit 
applications in 6 months or less due, in large part, to staffing 
shortfalls.
    A review to adjust appeal and motion fees was not conducted in the 
past given the low workload volume. However, recent data indicates a 
significant and steady increase of 12% in appeal and motion filings 
from 1993 to 2002. Thus, USCIS deemed it was reasonable and necessary 
to perform a fee review of the appeal and motion process to ensure full 
compliance with applicable federal law and user fee guidance by 
recovering the full costs of appeal and motion filings.

B. The Appeal and Motion Process

    When a petition or application is denied or revoked by USCIS, in 
most cases the applicant or petitioner may appeal that decision to a 
higher authority. The AAO has appellate jurisdiction over 66 types of 
petitions and applications. If an applicant or petitioner receives an 
appealable denial notice, the denial notice will advise the applicant 
or petitioner of his or her right to appeal to the AAO or BIA, 
whichever is appropriate; provide the applicant or petitioner with the 
appropriate appeal form; and include instructions on any

[[Page 69548]]

applicable time limit for filing an appeal.
    There are strict deadlines that must be met to file an appeal 
properly. In addition, only the person that submitted the original 
application or petition may file the appeal. For example, if a U.S. 
employer petitions for an alien employee, only the U.S. employer may 
appeal the denial. If the AAO has jurisdiction over the decision, the 
notice of appeal must be filed on Form I-290B, Notice of Appeal to the 
Administrative Appeals Unit (AAU). The appeal, as well as the 
accompanying fee, must be filed with the office that made the original 
decision to deny the application or petition. The applicant or 
petitioner may file a brief written explanation in support of an 
appeal. After review, the AAO may agree with the applicant or 
petitioner and change the original decision, disagree with the 
applicant or petitioner and affirm the original decision, or send the 
matter back to the originating office for further action. Only one 
appeal may be filed for each denial or revocation; there is no further 
administrative appellate review of an AAO decision.
    In addition to the right to appeal (in which the applicant or 
petitioner asks a higher authority to review a denial), the applicant 
or petitioner may file a motion to reopen the case or a motion to 
reconsider the denial with the office that made the unfavorable 
decision, such as the field office or AAO. By filing these motions, the 
applicant or petitioner may ask the office to reexamine or reconsider 
its decision. A motion to reopen must state the new facts that are to 
be provided in the reopened proceeding and must be accompanied by 
affidavits or other documentary evidence per 8 CFR 103.5(a)(2). Under 8 
CFR 103.5(a), a motion to reconsider must establish that the decision 
was based on an incorrect application of law or USCIS policy, and 
further establish that the decision was incorrect based on the evidence 
of record at the time the initial decision was issued. Any motion to 
reopen or reconsider must be filed with the correct fee within 30 days 
of the decision.
    Form I-290B is used to appeal decisions issued by adjudication 
officers located at DHS service centers and district offices. Appeals 
and motions require approximately the same amount of effort, on 
average, according to discussions with AAO management. The core work of 
writing and editing performed at the AAO is very labor intensive, given 
the three full days it requires to process an average appeal/motion 
case.

C. Methodology

    In Fiscal Year 2003, KPMG Consulting was hired to provide an 
independent fee review as well as to ensure adherence to applicable 
federal law and fee guidance. The fee review identified the full costs 
of processing appeals and motions and the estimated completion volumes 
over the Fiscal Year 2003/2004 biennial time period. The full cost 
determination included the labor-intensive activities involved in 
application logistics, legal research, decision writing, and decision 
review. The full cost determination also included the staffing 
necessary to meet the President's 5-year goal of processing immigration 
benefit applications in 6 months or less.

D. Basis for the Proposed Fees

    The unit cost of $382.98 was determined by dividing the full costs 
of processing appeal/motion cases associated with the FY 2003/2004 
biennial time period ($13,021,582) by the FY 2003/2004 completion 
volumes (34,000). The time required to process an average appeal versus 
an average motion case is essentially the same. Therefore, their 
respective unit costs are equal.
    The table below identifies the unit cost of $382.98 and the 
proposed fee of $385.

                 Unit Cost and Proposed Fee Calculations
------------------------------------------------------------------------
                                                           FY 2003/2004
------------------------------------------------------------------------
Appeal/Motion Processing Costs..........................     $13,021,582
Appeal/Motion Completion Volume.........................          34,000
Appeal/Motion Unit Cost.................................          382.98
Rounding Adjustment.....................................            2.02
Proposed Appeal/Motion Fee..............................          385.00
------------------------------------------------------------------------

    This rule also clarifies that the fee amount of $385 also applies 
when an appeal is filed by, or on behalf of, two or more aliens and the 
two aliens are covered by one decision. In so doing, it corrects a 
transcription error in the Code of Federal Regulations in 1989 that 
failed to amend the fee amount from $50 to $110 for two or more aliens 
when the aliens are covered by one decision when the base fee (for one 
alien) was raised from $50 to $110, as provided in the final rule dated 
April 4, 1989 (54 FR 13513). The failure resulted in an unintended 
discrepancy between the base fee, and the fee for two or more aliens 
when the aliens are covered by one decision. Notwithstanding this 
transcription error, affected aliens have been properly charged, and 
the Service as well as USCIS have collected the correct fee since the 
1989 amendment. The form instructions also reflected the proper fee 
amount. This rule corrects the discrepancy in 8 CFR 103.7(b)(1) and 
brings this fee as properly amended ($50 to $110) from $110 to $385 so 
that both fees are now equal as intended.
    Finally, this proposed rule also makes a conforming change to 8 CFR 
103.5(a)(1)(iii) to replace an obsolete reference to a withdrawn form, 
Form I-290A, with a reference to Form I-290B.

Does USCIS Have the Authority To Waive Fees on a Case-By-Case Basis?

    Yes, USCIS has the authority to waive fees on a case-by-case basis 
pursuant to 8 CFR 103.7(c).

Regulatory Flexibility Act

    DHS has reviewed this regulation in accordance with 5 U.S.C. 
605(b), and by approving it, DHS has determined that this rule will not 
have a significant economic impact on a substantial number of small 
entities since a majority of motions and appeals are submitted by 
individuals and not small entities as that term is defined in 5 U.S.C. 
601(6).
    DHS acknowledges, however, that some small entities, particularly 
those filing appeals of and/or motions to review denials of business-
related applications and petitions, such as the Form I-140, Immigration 
Petition for Alien Worker, Form I-526, Immigrant Petition for Alien 
Entrepreneur, and Form I-829, Petition for Entrepreneur to Remove 
Conditions, may be affected by this rule. USCIS does not collect data 
on the size of the businesses filing appeals and/or motions related to 
employment based petitions, and therefore does not know the precise 
number of small businesses that may be affected by this rule (as the 
majority of petitions are filed by individuals). USCIS projects the 
following number of denials for business-related petitions for the 
Fiscal Year 2003/2004 biennial period:
    Form I-140, Immigrant Petition for Alien Worker (35,866 denials);
    Form I-526, Immigrant Petition by Alien Entrepreneur (217 denials);
    Form I-829, Petition by Entrepreneur to Remove Conditions (174 
denials).
    Although this volume represents the total number of denials, it 
does not represent the total number of motions/appeals filed on these 
petitions which would be far less given that the number of motions/
appeals filed by individuals and businesses totaled only 34,000 in the 
Fiscal Year 2003/2004 biennial period. However, even if all of the 
motions/appeals were filed by small businesses, the resulting degree of 
economic impact would not require a

[[Page 69549]]

Regulatory Flexibility Analysis to be performed.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by state, local and 
tribal governments, in the aggregate, or by the private sector of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in costs or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based companies to compete with foreign-
based companies in domestic and export markets.

Executive Order 12866

    This rule is considered by DHS to be ``significant regulatory 
action'' under Executive Order 12866, section 3(f), Regulatory Planning 
and Review. Accordingly, this rule has been submitted to the Office of 
Management and Budget (OMB) for review. DHS has assessed both the costs 
and benefits of this rule as required by section 1(b)(6) of Executive 
Order 12866 and has made a determination that, although increasing the 
fee to $385 will increase the cost to the individual applicant and/or 
petitioner, USCIS must establish and collect fees to recover the full 
cost of processing immigration benefit applications, rather than 
supporting these services with tax revenue. There are no identifiable 
alternatives associated with this fee increase. The implementation of 
this rule also will provide USCIS with an additional $6.7 million in FY 
2005 over the fee revenue that would be collected under the current fee 
structure. If USCIS does not adjust the current fees to recover the 
full costs of processing immigration benefit applications, the backlog 
will likely increase. The revenue increase is based on USCIS costs and 
projected volumes that were available at the time of this rule.

Executive Order 13132

    This rule 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 section 6 of 
Executive Order 13132, DHS has determined that this rule does not have 
sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement.

Executive Order 12988: Civil Justice Reform

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

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, Public Law 104-13, 109 
Stat. 163 (1995), all Departments are required to submit to OMB, for 
review and approval, any reporting or recordkeeping requirements 
inherent in a rule. This rule does not impose any new reporting or 
recordkeeping requirements under the Paperwork Reduction Act. This rule 
proposes that the fees for motions and appeals be increased. Since an 
increase of these fees will increase the cost burden on the public, DHS 
will submit the required Paperwork Reduction Change Worksheet (OMB-83C) 
to the Office of Management and Budget (OMB) reflecting the new fees 
and cost burdens on the public. It should also be noted that changes to 
the fees require changes to the application form (Form I-290B) to 
reflect the new fees. USCIS will submit a notification to OMB with 
respect to any such changes.

List of Subjects in 8 CFR Part 103

    Administrative practice and procedure, Authority delegations 
(government agencies), 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; AVAILABILITY OF RECORDS

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

    Authority: 5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304, 
1356; 31 U.S.C. 9701; Public Law 107-296, 116 Stat. 2135 (6 U.S.C. 1 
et seq.); E.O. 12356, 47 FR 14874, 15557, 3 CFR, 1982 Comp., p. 166; 
8 CFR part 2.

    2. In Sec.  103.5(a)(1)(iii), the introductory text is revised to 
read as follows:


Sec.  103.5  Reopening or reconsideration.

    (a) * * *
    (1) * * *
    (iii) Filing Requirements--A motion shall be submitted on Form I-
290B and may be accompanied by a brief. It must be:
* * * * *


Sec.  103.7  [Amended]

    3. In Sec.  103.7(b)(1):
    a. The entry for ``Form I-290B'' is amended by revising the fee 
``$50'' to read: ``$385.00'', and by revising the fee ``$110.00'' to 
read: ``$385.00''; and
    b. The entry for ``Motion'' is amended by revising the fee ``$110'' 
to read: ``$385'', wherever that fee appears in the entry.

    Dated: November 18, 2004.
Tom Ridge,
Secretary of Homeland Security.
[FR Doc. 04-26370 Filed 11-29-04; 8:45 am]
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