[Federal Register Volume 69, Number 236 (Thursday, December 9, 2004)]
[Rules and Regulations]
[Pages 71660-71683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27053]



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Part V





Department of Agriculture





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Animal and Plant Health Inspection Service



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7 CFR Part 354



User Fees for Agricultural Quarantine and Inspection Services; Interim 
Rule

  Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / 
Rules and Regulations  

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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 354

[Docket No. 04-042-1]
RIN 0579-AB88


User Fees for Agricultural Quarantine and Inspection Services

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Interim rule and request for comments.

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SUMMARY: We are amending the user fee regulations by adjusting the fees 
charged for certain agricultural quarantine and inspection (AQI) 
services that are provided in connection with certain commercial 
vessels, commercial trucks, commercial railroad cars, commercial 
aircraft, and international airline passengers arriving at ports in the 
customs territory of the United States. Existing user fees have not 
been adjusted since October 1, 2001. Due to the events of September 11, 
2001, and the resulting increased security concerns, a greater volume 
and variety of cargo entering the United States is being inspected. The 
fee adjustments are needed to recover the costs of this increased 
inspection activity and to account for routine inflationary increases 
in the cost of doing business. The adjusted AQI user fees will cover 
fiscal years 2005 through 2010.

DATES: This interim rule is effective January 1, 2005. We will consider 
all comments that we receive on or before February 7, 2005.

ADDRESSES: You may submit comments by any of the following methods:
     EDOCKET: Go to http://www.epa.gov/feddocket to submit or 
view public comments, access the index listing of the contents of the 
official public docket, and to access those documents in the public 
docket that are available electronically. Once you have entered 
EDOCKET, click on the ``View Open APHIS Dockets'' link to locate this 
document.
     Postal Mail/Commercial Delivery: Please send four copies 
of your comment (an original and three copies) to Docket No. 04-042-1, 
Regulatory Analysis and Development, PPD, APHIS, Station 3C71, 4700 
River Road Unit 118, Riverdale, MD 20737-1238. Please state that your 
comment refers to Docket No. 04-042-1.
     E-mail: Address your comment to 
[email protected]. Your comment must be contained in the body 
of your message; do not send attached files. Please include your name 
and address in your message and ``Docket No. 04-042-1'' on the subject 
line.
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the instructions for locating this 
docket and submitting comments.
    Reading Room: You may read any comments that we receive on this 
docket in our reading room. The reading room is located in room 1141 of 
the USDA South Building, 14th Street and Independence Avenue SW., 
Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., 
Monday through Friday, except holidays. To be sure someone is there to 
help you, please call (202) 690-2817 before coming.
    Other Information: You may view APHIS documents published in the 
Federal Register and related information, including the names of groups 
and individuals who have commented on APHIS dockets, on the Internet at 
http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: For information concerning program 
operations, contact Ms. Jennifer Lemly, Staff Officer, Quarantine 
Policy, Analysis and Support Staff, PPQ, APHIS, 4700 River Road Unit 
60, Riverdale, MD 20737-1236; (301) 734-8372. For information 
concerning rate development, contact Ms. Donna Ford, Branch Chief, 
Financial Services Branch, FMD, MRPBS, APHIS, 4700 River Road, Unit 55, 
Riverdale, MD 20737-1232, (301) 734-5901.

SUPPLEMENTARY INFORMATION:

Background

    Section 2509(a) of the Food, Agriculture, Conservation, and Trade 
Act of 1990 (21 U.S.C. 136a), referred to below as the FACT Act, 
authorizes the Animal and Plant Health Inspection Service (APHIS) to 
collect user fees for agricultural quarantine and inspection (AQI) 
services. The FACT Act was amended on April 4, 1996, and May 13, 2002.
    The FACT Act, as amended, authorizes APHIS to collect user fees for 
AQI services provided in connection with the arrival, at a port in the 
customs territory of the United States, of:
     Commercial vessels,
     Commercial trucks,
     Commercial railroad cars,
     Commercial aircraft, and
     International airline passengers.
    According to the FACT Act, as amended, these user fees should 
recover the costs of:
     Providing the AQI services for the conveyances and the 
passengers listed above,
     Providing preclearance or preinspection at a site outside 
the customs territory of the United States to international airline 
passengers, commercial vessels, commercial trucks, commercial railroad 
cars, and commercial aircraft, and
     Administering the user fee program.

Introduction

    On November 16, 1999, we published in the Federal Register (64 FR 
62089-62096, Docket No. 98-073-2) a final rule that amended the user 
fee regulations in Sec.  354.3 by adjusting the fees charged for 
certain AQI services we provide in connection with certain commercial 
vessels, commercial trucks, commercial railroad cars, commercial 
aircraft, and international airline passengers arriving at ports in the 
customs territory of the United States. We did this to ensure that we 
recovered the anticipated actual cost of providing these services. That 
rulemaking established the user fees for these services for fiscal 
years (FYs) 2000 through 2002.
    Subsequent rulemaking, culminating in a final rule published in the 
Federal Register on January 24, 2003 (68 FR 3375, Docket No. 02-085-2), 
extended those adjusted user fees beyond FY 2002 until the fees could 
be revised again.
    Subsequently, in an interim rule that was published in the Federal 
Register and effective on September 3, 2002 (67 FR 56217-56218, Docket 
No. 02-085-1), we extended those adjusted user fees beyond FY 2002 
until the fees could be revised again.
    In addition to the routine increases in the cost of providing AQI 
services, due to inflation, replacement of equipment, etc., the events 
of September 11, 2001, have had a profound impact on costs and 
revenues. Following the attacks, there was a sharp drop in the number 
of international passengers entering the United States. While 
international air traffic has rebounded, it has not returned to its 
pre-September 11 levels. We estimate that due to the decreases in the 
volume of passenger and cargo traffic entering the United States since 
September 11, 2001, revenues generated through AQI user fees are more 
than $135 million lower than they otherwise would have been. Despite 
the drop in traffic, we have had to step up our AQI inspection 
activities, rather than curtail them, due to increased post-September 
11 security concerns, which include the threat of bioterrorism. Since 
FY 2001, AQI staffing has increased by approximately one-third. 
Inspectors are

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now inspecting a greater volume of cargo entering the United States and 
a greater variety of types of cargo than they did before September 11, 
2001. Such operations are very personnel-intensive and costly.
    Following the terrorist attacks of September 11, 2001, certain AQI 
functions, but not the laws or regulations upon which they are 
premised, were transferred from APHIS to the Customs and Border 
Protection (CBP) bureau of the Department of Homeland Security (DHS). 
Together with certain U.S. Customs Service and Immigration and 
Naturalization Service employees, APHIS agricultural inspectors were 
brought into the newly created CBP bureau in an effort to secure our 
borders and ports of entry while still facilitating the movement of 
legitimate trade and travelers. The creation of a consolidated border 
inspection organization has allowed for unprecedented information 
sharing, cross-training among specialists, and the use of innovative 
techniques that were not possible when border inspection functions were 
spread across three separate agencies.
    Because our AQI programs are funded solely through user fee 
collections, it is imperative that we adjust the fees upward to cover 
our increased program costs. We estimate that, absent the necessary fee 
adjustments, the AQI account would be in deficit status by July 19, 
2005, meaning that APHIS and CBP could be forced to lay off significant 
numbers of employees and cut back on services. Such cutbacks would 
increase the potential for animal and plant pests and diseases to enter 
the United States and could disrupt trade if inspectors were not 
available to inspect and clear cargo on a timely basis.
    In this interim rule, therefore, we are amending our AQI user fee 
regulations in order to cover our increased costs. Specifically, we are 
establishing fees to be charged for FYs 2005 through 2010 for each of 
the types of conveyances or persons to whom AQI services are provided: 
Commercial vessels, commercial trucks, commercial railroad cars, 
commercial aircraft, and international airline passengers. However, 
because commercial truck inspection has separate fees for trucks with 
and without decals, we are actually adjusting a total of six fees. 
These adjustments are designed to recover our full costs for providing 
these AQI services and are based on an analysis of our costs for 
providing services in recent years, as well as our best projections of 
what it will cost us to provide these services in FYs 2005 through 
2010.
    These user fee adjustments are necessary to prevent plant and 
animal diseases and pests from entering the United States and to 
protect against the growing threat of bioterrorism.
    By projecting our flat-rate AQI user fees 6 years into the future, 
we are allowing our customers to make necessary business plans. We will 
review our fees annually and, if necessary, undertake rulemaking to 
amend them if the published fees do not properly recover our costs. We 
also plan to publish a notice in the Federal Register prior to the 
beginning of each fiscal year to remind or notify the public of the 
user fees for that particular fiscal year.

AQI User Fee Accounting

    In FY 1992, APHIS established accounting procedures to segregate 
AQI user fee program costs from all other costs. We published a 
detailed description of these procedures in the Federal Register on 
December 31, 1992 (57 FR 62469-62471, Docket No. 92-148-1), as part of 
an interim rule amending some of our user fees. We maintain all AQI 
fees we collect in distinct accounts, carefully monitor the balances in 
these accounts, and only use these funds to pay for our actual costs 
for providing these distinct services. Any surplus in these accounts 
carries forward from year to year, is not subject to appropriation by 
Congress, and is available until expended to fund AQI activities.

Types of AQI Program Costs

    As part of our accounting procedures, we maintain separate 
accounting codes to record costs that can be directly related to an 
inspection activity. These are referred to as ``direct-charge costs.'' 
At the State (i.e., field) level and below, we direct-charge the 
following costs to the AQI account: Salaries and benefits for 
inspectors and canine officers, supervisors (such as officers-in-
charge), and clerical staff; equipment used only in connection with 
services subject to user fees; contracts; and large supply items such 
as x-ray equipment and uniforms.
    Other program-delivery-related costs, at the State level and below, 
that cannot be directly charged to individual accounts are charged to 
``distributable'' accounts established at the State level and are 
referred to as ``distributable costs.'' The following types of costs 
are charged to distributable accounts: Utilities, rent, telephone, 
vehicles, office supplies, etc. The costs in these distributable 
accounts are prorated (or distributed) among all the activities that 
benefit from the expense, based on a formula under which the costs that 
are directly charged to each activity are divided by the total costs 
directly charged to each account at the field level. For example, if a 
work unit performs work on domestic programs, AQI user fee programs, 
and AQI-appropriated programs, the costs are distributed among each of 
these programs, based on the percentage of the direct costs for that 
activity at the field level that is charged to that activity.
    AQI program costs also include program direction and support costs 
we incur at the regional and headquarters level, as well as Agency-
level support costs. Headquarters-level costs include salaries and 
benefits for employees of APHIS' Plant Protection and Quarantine and 
International Services programs who are based at the programs' 
headquarters in Riverdale, MD, and Washington, DC. We incur Agency-
level support costs through activities that support the Agencies (i.e., 
APHIS and CBP), such as recruitment and development; legislative and 
public affairs; regulation development; regulatory enforcement; and 
budget, accounting, payroll, purchasing, billing, and collection 
services.
    Departmental charges are assessed for various AQI program costs 
including Federal telephone service, mail, processing of payroll and 
money management, unemployment compensation, Office of Workers 
Compensation Programs, and central supply for storing and issuing 
commonly used supplies and forms.
    In order to identify properly our actual total AQI program costs in 
prior fiscal years, we first identified the direct-charge costs. We 
then added to this the pro-rata share costs of the distributable 
accounts maintained at the State, regional, headquarters, Agency, and 
departmental levels.

Cost Projections for FY 2005 Through FY 2010

    We used the prior year (FY 2004) costs of $327 million and added 
inflationary factors to project our costs for FY 2005 through FY 2010. 
Based on the 2005 Mid-Session Review--Economic Assumptions, a factor of 
1.5 percent has been added for pay increases and general inflation cost 
increases (i.e., all of the AQI costs other than pay increases) for FYs 
2005 through 2010. Since the percentage increase was the same for both 
factors, a flat 1.5 percent has been applied to all costs. We then 
added a reasonable amount (25 percent of AQI program costs) to 
contribute to a reserve in the AQI account to identify our total

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anticipated costs for those years. We split our total costs for each 
fiscal year into six AQI service categories (costs for the inspection 
of trucks with and without prepaid decals were calculated separately), 
performed extensive volume analyses to project volumes of use for each 
fee category in the out-years, divided our projected costs per fee 
category by our projected volumes of users per fee category, and 
rounded each projected fee to obtain the final fees we are 
establishing. More detailed information about each of these steps 
follows.

Projected AQI Program Costs for Fiscal Years 2005 Through 2010

    Table 1 shows the total projected costs of administering the AQI 
program for FYs 2005 through 2010. In projecting these costs, we began 
with a FY 2004 base need of $133 million for APHIS' AQI work and $194 
million for CBP's AQI work, for a total FY 2004 AQI cost of $327 
million. This figure takes into account only the cost of providing AQI 
services for FY 2004 and does not include a reserve component. 
Similarly, the projected annual program costs for FYs 2005 through 2010 
reflect only the costs we anticipate for providing AQI services for 
each of those fiscal years. The reserve-building component for each is 
shown separately.
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Reserve Fund

    We need to maintain a reasonable reserve balance in the AQI account 
of 25 percent of the AQI program costs. We are including a reserve-
building component in the user fees for each activity for FYs 2005 
through 2010. Each fee contributes to the reserve proportionately.
    The reserve fund provides us with a means to ensure the continuity 
of AQI services in cases of fluctuations in activity volumes, bad debt, 
carrier insolvency, or other unforseen events, such as those of 
September 11, 2001, which, as noted earlier, resulted in substantial 
cost increases for the AQI programs and lower-than-anticipated 
revenues. Maintaining an adequate reserve fund is, therefore, essential 
for the AQI program. We intend to monitor the reserve balance closely 
and propose adjustments in our fees as necessary to ensure a reasonable 
balance. If we determine that any fees are too high and are 
contributing to unreasonably high reserve levels, we will undertake 
rulemaking to lower the fees as quickly as possible. Conversely, if it 
becomes necessary to increase any fees because reserve levels are being 
drawn too low, we will undertake rulemaking to increase the fees.

Volumes

    In order to calculate our costs and fees, we needed to estimate the 
annual number of users in each category of AQI services that would be 
subject to inspection in FYs 2005 through 2010. These estimates are 
based on our review of actual volumes for each service category shown 
in our FY 1999 through FY 2003 collection history, as well as factors 
that have affected these volumes in recent years, such as changes in 
airline passenger volumes as a result of the terrorist attacks on the 
United States on September 11, 2001. We calculated our projected 
changes in volumes in the out-years for each of the six AQI user fee 
categories (commercial trucks with decals and without decals are listed 
as separate categories) based on an individual analysis of each user 
fee service category.

Commercial Vessel Volumes

    We reviewed actual commercial vessel volumes for FYs 1999 through 
2003, as well as year-to-date data for FY 2004. The volumes for all 5 
fiscal years fluctuated between 51,007 and 53,421 commercial vessels, 
with no statistically significant trends identified. The year-to-date 
data for FY 2004 suggest that the volume for the year will fall within 
the same range. Based on our assumption of general trade increases each 
fiscal year, we anticipate a slight increase in commercial vessel 
volumes of 1 percent per year for FYs 2005 through 2010. We used this 
percentage to estimate volumes for FYs 2005 through 2010.

Commercial Truck Volumes (Individual Crossings and Decals)

    We reviewed actual commercial truck and commercial truck decal 
volumes in FYs 1999 through 2003, as well as year-to-date data for FY 
2004. The volumes of individual truck crossings for all 5 fiscal years 
fluctuated between 534,586 and 726,677 commercial truck crossings, with 
no statistically significant trends identified. The numbers of truck 
decals distributed in FYs 1999 through 2003 fluctuated between 23,094 
and 45,607, with no statistically significant trends identified. The 
year-to-date data for FY 2004 suggest that individual truck crossing 
and truck decal volumes will remain within these ranges. Using the 
average percentage change in the past 3 fiscal years, we detected 
slight increases in the individual commercial truck crossing volumes of 
0.55 percent and in the truck decal volumes of 1 percent. These slight 
increases in volumes are consistent with our assumption of general 
trade increases each fiscal year. We used these percentages to estimate 
the respective volumes for individual crossings and decals for FYs 2005 
through 2010, as shown in table 2. Projected volumes are one component 
we use in the calculation of user fees. In estimating the commercial 
truck user fees for FYs 2005 through 2010, we relied only on the 0.55 
percent figure associated with individual crossings because the truck 
decal fee is not calculated separately but is set at 20 times the 
individual crossing fee.

Commercial Railroad Car Volumes

    We reviewed actual commercial railroad car volumes in FYs 1999 
through 2003, as well as year-to-date data for FY 2004. The volumes for 
the 5 fiscal years fluctuated between 146,809 and 224,269 loaded 
commercial railroad car crossings, with no statistically significant 
trends identified. The year-to-date data for FY 2004 suggest that FY 
2004 volumes will remain within this range. Based upon the average 
percentage change in the past 3 fiscal years, we detected a slight 
increase in loaded commercial railroad car volumes of 1.35 percent per 
year, and we used this percentage to estimate the volumes for FYs 2005 
through 2010. This small increase in volumes is consistent with our 
assumption of general trade increases each fiscal year.

Commercial Aircraft Volumes

    We reviewed actual commercial aircraft volumes for FYs 1999 through 
2003, as well as year-to-date data for FY 2004. The volumes in these 
years ranged between 317,240 and 439,618 commercial aircraft. Although 
there was a decrease in volumes in FY 2002, the fiscal year following 
the September 11, 2001, attacks, the commercial aircraft volumes 
started to rebound in FY 2003, but they did not return to their pre-
September 11 levels. Year-to-date data for FY 2004 indicate that the 
commercial aircraft volumes continue to increase at a rate of about 
1.18 percent, which has been the average volume increase for the last 5 
fiscal years (FYs 1999 through 2003). Based on this figure, we used an 
estimated percentage increase in volumes of 1.18 percent per year to 
project commercial aircraft volumes in FYs 2005 through 2010.

International Airline Passenger Volumes

    We reviewed actual international airline passenger volumes for FYs 
1999 through 2003, as well as year-to-date data for FY 2004. The 
volumes in these years ranged between 44,552,311 and 66,609,081 
passengers. Although there was a decrease in passenger volumes in FY 
2002, the fiscal year following the attacks of September 11, 2001, the 
passenger volumes began to rebound in FY 2003 but did not return to 
pre-September 11 levels. The year-to-date data for FY 2004 indicate 
that passenger volumes continue to increase at a rate of about 1.18 
percent, which has been the average volume increase for the last 5 
fiscal years (FYs 1999 through 2003). Based on this figure, we used an 
estimated percentage increase in volumes of 1.18 percent per year to 
project international airline passenger volumes for FYs 2005 through 
2010.
    Estimated volumes for each category of AQI services for FY 2004 and 
projected estimated volumes for FYs 2005 through 2010 are shown in 
table 2. Estimated costs for each category of AQI services for FYs 2005 
through 2010 are shown in tables 3 through 8.

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Calculation and Rounding of User Fees

    Once we established the total annual costs to administer the AQI 
program, including the amount necessary to maintain the AQI account 
reserve at a reasonable level, we began the calculation of our fees. In 
calculating the user fees, we divided the sum of the costs of providing 
each service by the projected number of users subject to inspection 
(i.e., the volume of use), thereby arriving at ``raw'' fees. We then 
rounded the raw fees. As in the past, we rounded raw fees up, rather 
than down, to ensure that we collect enough revenue to cover the costs 
of providing services and to maintain a reasonable reserve balance. Any 
excess collections due to rounding are added to the reserve balance for 
each individual fee category. If an increase in volume results in 
additional revenue from user fees, this revenue would not necessarily 
increase the reserve because the additional money would be used to 
service the increased volume. We rounded all user fees up to the 
nearest quarter, except for the international airline passenger user 
fee. Given the sheer volume of passengers, if we rounded up to the 
nearest quarter we would recover far more than is necessary. Therefore, 
we rounded these passenger user fees up to the nearest nickel. Tables 3 
through 8 contain data on projected costs, including the amounts 
necessary to maintain reasonable reserve levels; volumes of use; raw 
and rounded fees; and projected revenues for FYs 2005 through 2010.
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    Table 9 shows the AQI user fees in effect prior to the effective 
date of this interim rule and the projected user fees for FYs 2005 
through 2010. Also, below, we describe each AQI service and explain 
additional activities and costs as they pertain to each service 
individually.
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Commercial Vessel User Fee

    We inspect commercial vessels of 100 net tons or more arriving at 
ports of entry in the customs territory of the United States. Vessel 
owners/operators pay a user fee for the first 15 arrivals at ports. CBP 
collects this user fee on our behalf.
    The AQI user fee for commercial vessel inspection prior to this 
interim rule was $480.50. That fee became effective on October 1, 2001, 
and had not been adjusted prior to this rulemaking. The user fee from 
the effective date of this interim rule until the end of FY 2005 is 
$486.00. User fees for subsequent years are as follows: $488 in FY 
2006, $490 in FY 2007, $492 in FY 2008, $494 in FY 2009, and $496 in FY 
2010.

Commercial Truck and Truck Decal User Fees

    We inspect commercial trucks arriving at land ports in the customs 
territory of the United States from Mexico. CBP collects these user 
fees on our behalf.
    Commercial trucks crossing at land border ports are also required 
to pay CBP user fees; therefore, our regulations provide that 
commercial truck owners/operators must prepay our user fee if they are 
prepaying the CBP user fee. In this case, our required prepaid user 
(decal) fee is 20 times the user fee for each single arrival. This fee 
covers an unlimited number of entries during the calendar year. Upon 
payment, the truck owner or operator receives a decal to place on his 
or her truck windshield. This is a joint decal that indicates that both 
the Customs (now part of DHS) and APHIS user fees for the truck have 
been paid for that calendar year.
    Prior to this rulemaking, the commercial truck user fee was $4.75 
for a single crossing and $95 for a decal. This interim rule raises the 
fee to $5 for a single crossing and $100 for a decal until the end of 
FY 2005. User fees for FYs 2006 through 2010 are $5.25 for a single 
crossing and $105 for a decal.

Commercial Railroad Car User Fee

    We inspect loaded commercial railroad cars arriving at land ports 
in the customs territory of the United States. The fees for this 
service are calculated and remitted by the individual railroad 
companies within 60 days after the end of each calendar month. If a 
railroad company chooses to prepay our fees, the fee is 20 times the 
individual arrival fee for each loaded rail car. This prepaid user fee 
covers 1 calendar year's worth of AQI inspections. Our user fee prior 
to this interim rule was $7 per commercial loaded railcar. The fee from 
the effective date of this interim rule until the end of FY 2005 is 
$7.50. User fees for subsequent years are as follows: $7.50 in FY 2006 
and $7.75 in FYs 2007 through 2010.

Commercial Aircraft User Fee

    We inspect international commercial aircraft arriving at airports 
in the customs territory of the United States. The fees for this 
service are calculated and remitted by the individual airline companies 
within 31 days after the end of each calendar quarter. The user fee for 
commercial aircraft inspection prior to this interim rule was $65.25. 
This interim rule raises the fee for commercial aircraft inspection to 
$70 from the effective date of the rule until the end of FY 2005. User 
fees for subsequent years are as follows: $70.25 in FY 2006, $70.50 in 
FYs 2007 and 2008, and $70.75 in FYs 2009 and 2010.

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International Airline Passenger User Fee

    We inspect international airline passengers arriving at airports in 
the customs territory of the United States. Millions of travelers pass 
through U.S. airports daily. Our overall goal, keeping in mind airport 
security, is a timely, seamless inspection process that is integrated 
with the clearance processes of other Federal agencies with inspection 
responsibilities, that will ensure the fastest passenger clearance time 
while at the same time safeguard against the introduction of pests and 
diseases of animals and plants. Our joint goal is to enhance security 
and improve enforcement and regulatory processes in order that 
international air passengers are cleared through the entire Federal 
inspection process as quickly as possible without jeopardizing our 
security requirements. In partnership with the airline industry, we 
obtain advance information on international air passengers through the 
use of an Advance Passenger Information System to expedite the overall 
processing of passengers with no loss in enforcement of security 
requirements.
    Prior to this interim rule, the user fee for international airline 
passenger clearance was $3.10 per passenger; the fee from the effective 
date of this interim rule until the end of FY 2005 will be $4.95 per 
passenger. The user fee for FYs 2006 through 2010 will be $5 per 
passenger. We wish to point out that, under the regulations, it is the 
user fee in effect at the time the fee is collected--in most cases, at 
the time the ticket is purchased--that applies; therefore, passengers 
who purchased a ticket and paid a user fee prior to the effective date 
of this rule would not have to pay an additional $1.85 if their date of 
departure came after the effective date of this rule.

Miscellaneous

    In addition to the substantive changes described above, we are 
making a number of editorial changes to Sec.  354.3. Previously, there 
were various addresses given for remittances of AQI user fees and for 
the submission of statements and other information. This interim rule 
provides a single new address for these purposes. The new address is as 
follows: U.S. Bank, United States Department of Agriculture (USDA), 
APHIS, AQI, P.O. Box 952181, St. Louis, MO 63195-2181. Where reference 
was made in Sec.  354.3 to ``APHIS user fees'' and ``APHIS permits,'' 
we now refer to ``AQI user fees'' and ``AQI permits.'' We have also 
updated the definition of Customs to read as follows: ``The Bureau of 
Customs and Border Protection, U.S. Department of Homeland Security.'' 
In Sec.  354.3(b)(2)(vi), we have updated a reference to an obsolete 
Customs form. The amended paragraph refers to ``the Vessel Entrance or 
Clearance Statement, CBP Form 1300.'' Additionally, for the sake of 
clarity, we have made an editorial change to the introductory text that 
precedes the table in Sec.  354.3(b), changed the paragraph heading of 
Sec.  354.3(d)(4) from Remittance and statement procedures to Statement 
procedures, and added the heading Remittance procedures to Sec.  
354.3(d)(5). Further, in Sec.  354.3(e)(3)(i), we have replaced the 
word ``vessel'' with the word ``aircraft,'' also for the purpose of 
clarification. Though there are some paragraphs of Sec.  354.3 that 
remain unchanged, in the rule portion of this document, we have 
reprinted the section in its entirety so that it will be available to 
users of the regulations when this interim rule is published.

Emergency Action

    This rulemaking, which adjusts our flat-rate AQI user fees, is 
necessary on an emergency basis to ensure the adequate funding and 
continued operation at necessary levels of CBP and APHIS activities 
vital to preventing the introduction of plant and animal pests and 
diseases into the United States. Under these circumstances, the 
Administrator has determined that there is good cause under 5 U.S.C. 
553 for issuing this rule as an interim rule rather than by publishing 
it as a notice of proposed rulemaking. We are making this rule 
effective on January 1, 2005, to provide adequate notice of our 
adjusted fees.
    We will consider comments we receive during the comment period for 
this interim rule (see DATES above). After the comment period closes, 
we will publish another document in the Federal Register. The document 
will include a discussion of any comments we receive and any amendments 
we are making to the rule.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be economically significant for the purposes of 
Executive Order 12866 and, therefore, has been reviewed by the Office 
of Management and Budget.
    For this rule, we have prepared an economic analysis. The economic 
analysis provides a cost-benefit analysis as required by Executive 
Order 12866, as well as an analysis of the potential economic effects 
of this interim rule on small entities, as required under the 
Regulatory Flexibility Act. The economic analysis is summarized below. 
The full analysis is available on the EDOCKET Web site (see ADDRESSES 
above). Copies of the full analysis may also be obtained by contacting 
Ms. Donna Ford, Branch Chief, Financial Services Branch, FMD, MRPBS, 
APHIS, 4700 River Road Unit 55, Riverdale, MD 20737-1232, (301) 734-
5901.
    In this interim rule, we are amending the user fee regulations by 
adjusting the fees charged for certain AQI services we provide in 
connection with certain commercial vessels, commercial trucks, 
commercial railroad cars, commercial aircraft, and international 
airline passengers arriving at ports in the customs territory of the 
United States. The fees are being updated to enable us to recover the 
cost of providing those services.
    The volume and intensity of inspection activities have increased 
dramatically in recent years, particularly since the events of 
September 11, 2001. Consequently, the cost of providing AQI services 
has increased, significantly outpacing user fee collections. In 
addition, the funding required to maintain even the current level of 
services has increased as well, due to pay raises and inflation.
    Increasingly open and more extensive international trade brings 
with it the need for increased vigilance against threats to the 
agricultural resources of the United States. In addition, bioterrorism 
is a new and serious threat. Therefore, the need exists for more cargo 
inspection, both in the sheer number of inspections and in the range of 
commodities inspected. Broader and more intensive passenger screening 
has also become necessary. As shown in table 10, had APHIS continued to 
collect user fees in FY 2005 through FY 2010 at the rates in effect 
prior to this interim rule, total collections would have amounted to 
approximately $1.502 billion. Program costs are expected to be about 
$2.210 billion over the same period. This $708 million difference 
demonstrates the magnitude of the shortfall in cost recovery that would 
have occurred absent the changes.

BILLING CODE 3410-34-P

[[Page 71675]]

[GRAPHIC] [TIFF OMITTED] TR09DE04.017

BILLING CODE 3410-34-C

[[Page 71676]]

Benefits

    The chief benefit associated with AQI services is the prevention of 
losses that could be incurred as a result of plant and animal pests and 
diseases entering the United States. Such potential losses include 
reductions in yield and productivity of affected hosts, costs to 
governmental and private entities of pest or disease control and 
eradication, and losses in export revenues due to trade embargoes. The 
harm to American agriculture associated with the introduction of plant 
and animal pests and diseases can be immense. For example, the 
eradication efforts associated with an outbreak of exotic Newcastle 
disease in the western United States that began in October of 2002 cost 
U.S. taxpayers, both State and Federal, in excess of $180 million. In 
addition, the total direct value of the export restrictions which were 
in place from October 2002 though December 2003 has been estimated at 
$167 million.\1\
---------------------------------------------------------------------------

    \1\ Economic Impact of Poultry Export Restrictions. USDA-APHIS, 
CEAH.
---------------------------------------------------------------------------

    The primary benefit of increasing AQI user fees is to assure that 
the program operates at a level considered sufficient to minimize the 
risk of introduction of agricultural pests and diseases. If the AQI 
user fees do not accurately reflect costs, services cannot be 
adequately provided. Without the fee increases, the reserve fund would 
be depleted, and the program would be in a deficit status, potentially 
forcing layoffs of significant numbers of employees and cutbacks in 
services. As a result, the potential for foreign pests and diseases to 
enter the United States could be increased. In addition, trade could be 
disrupted if inspectors were not available to inspect and clear cargo 
on a timely basis.
    While the expected benefits of this interim rule are not 
quantified, they are likely to exceed the costs.

Costs

    International airline passengers and the operators of commercial 
aircraft, commercial vessels, commercial trucks, and commercial 
railroad cars will be affected by this rule. Taken collectively, the 
changes in user fees contained in this rule appear very large, 
amounting to more than $100 million per fiscal year in increased 
revenues. Estimates of changes in demand for commercial vessel, 
aircraft, truck, and railroad car inspections attributable to the 
changes in user fees are hindered by the difficulty in choosing 
appropriate prices and elasticities of demand; however, the fee 
increases represent very small portions of the overall costs related to 
the AQI activities in all categories, so the economic impacts on 
passengers and conveyances affected by this interim rule are likely to 
be very small. These impacts are discussed in greater detail in the 
paragraphs that follow.

Impact on International Air Passengers

    AQI fees are charged for the inspection of passengers on commercial 
aircraft upon arrival from outside the United States, with certain 
limited exceptions. International air passenger user fees will increase 
by $1.85, or 60 percent, in FY 2005, and by an additional $0.05 in FY 
2006, with no further increases projected through FY 2010. The total 
increase, therefore, is $1.90, or 61 percent. These revised fees are 
expected to generate a substantial increase in program revenues--an 
additional $120 million by 2010--because of the volume of international 
air travel. In fact, the bulk of increased program revenues from the 
fee revisions--more than 80 percent--will come from this category.
    The increases in the AQI user fees for this category are larger, in 
percentage terms, than those for the other service categories. As noted 
earlier, due to the events of September 11, 2001, and the resulting 
increased security concerns, we are inspecting a greater volume of 
international airline passengers arriving in the United States than we 
did before. Additional personnel and additional inspection measures 
have been needed to clear passengers through the Federal inspection 
process in a timely manner while at the same time ensuring that post-
September 11 security concerns, which include the threat of 
bioterrorism, are addressed. These increased inspection operations are 
very personnel-intensive and costly, but a very necessary part of the 
process.
    The individual fee increases, while high in percentage terms, are 
very small relative to international airfares. In 2002, overseas 
visitors \2\ to the United States paid an average of $1,317 in 
international airfare, and U.S. residents visiting overseas 
destinations paid an average of $1,409 in international airfare.\3\ The 
FY 2005 user fee of $4.95 amounts to less than 0.4 percent of the 
average international air fare, and the overall increase is less than 
0.1 percent.
---------------------------------------------------------------------------

    \2\ ``Overseas'' refers to all countries except Canada and 
Mexico.
    \3\ Survey of International Air Travelers. Office of Travel and 
Tourism Industries, International Trade Administration, U.S. 
Department of Commerce.
---------------------------------------------------------------------------

    Fare increases can affect passenger demand and, therefore, affect 
the airlines. The impact of increased user fees on the volume of 
international air passengers will depend on the price elasticity of 
demand for international air travel. Because there are no close 
substitutes for international air travel, it can be assumed that demand 
is relatively inelastic. When demand is relatively inelastic, the 
percentage decrease in quantity of trips demanded will be less than the 
percentage increase in price attributable to increased user fees. This, 
combined with the fact that the user fee increase is very small 
relative to the price of an international air ticket, should make the 
impact very small.

Impact on Commercial Aircraft

    Certain international scheduled and unscheduled (chartered) air 
passenger, air cargo, and air courier carriers arriving at U.S. customs 
ports are subject to AQI inspections. AQI user fees are charged for 
these inspections. These regulations affect international flights, many 
of which are operated by foreign-owned firms. Agency records show that 
about 43 percent of the aircraft clearance user fees collected in FY 
2003 were from foreign airlines. More than 2,000 domestic firms operate 
in air transportation; however, the vast majority do not operate 
international flights and, therefore, are not subject to the fees. 
According to Agency records, 15 major air carriers, 20 national 
carriers, and 18 large regional carriers \4\ were responsible for about 
87 percent of the aircraft clearance fee collections in FY 2003.
---------------------------------------------------------------------------

    \4\ Department of Transportation (DOT), Bureau of Transportation 
Statistics (BTS), Office of Airline Information, Air Carrier 
Groupings. Carriers are grouped according to operating revenue 
boundaries: Major air carriers--over $1 billion; national air 
carriers--over $100 million to $1 billion; large regional air 
carriers--$20 million to $100 million; and medium regional air 
carriers--under $20 million.
---------------------------------------------------------------------------

    Commercial aircraft user fees increase by $4.75, or 7 percent, in 
FY 2005 and by $0.25 in FYs 2006, 2007, and 2009, respectively, for a 
total increase of $5.50, or 8 percent, over the period covered by this 
interim rule. Based on the expected volume, the increase in user fees 
generates additional revenues ranging from $1.5 million in FY 2005, 
when the adjusted fee is expected to be in effect for only three-
fourths of the fiscal year, to $2.5 million in FY 2010. We anticipate 
that there will be more than 400,000 aircraft needing clearance 
annually during the period covered by this interim rule.
    The impact of the increases in this user fee should be small. The 
fee increases are very small relative to the overall operating costs of 
air carriers. About 57 percent of the aircraft cleared are owned by 
U.S. carriers, and about 87 percent of those aircraft are owned by

[[Page 71677]]

major carriers, national carriers, or large regional carriers. In 2002, 
13 domestic major air carriers had operating expenses of $79 billion, 
30 domestic national air carriers had operating expenses of $6 billion, 
and domestic large regional air carriers had operating expenses of $670 
million.\5\ The total increase in the fee over the entire period 
covered by this rule, applied to all annual inspections, will represent 
an increase in operating expenses of 0.007 percent on average for a 
major carrier, 0.01 percent on average for a national carrier, and 0.6 
percent on average for a large regional carrier.\6\
---------------------------------------------------------------------------

    \5\ Air Carrier Profile. National Transportation Statistics 
2003. DOT/BTS.
    \6\ Based on the number of inspections in FY 2003 (APHIS 
records) and operating expenses for air carriers for 2002 (DOT/BTS).
---------------------------------------------------------------------------

Impact on Commercial Vessels

    The user fee for inspecting commercial vessels increases by $5.50, 
or 1 percent, per vessel inspected in FY 2005 and by a total of $15.50, 
or 3 percent, over the period covered in this interim rule. The 
additional revenues collected are estimated to be $0.2 million in FY 
2005 and $0.8 million in FY 2010. The impact of the increases in this 
user fee should be small. The fee increases represent an extremely 
small proportion of the operating costs of bulk vessels. The total 
daily operating costs of dry bulk vessels in the year 2001 averaged 
$14,769,\7\ placing the total increase in this user fee at 0.1 percent 
of a single day's operating expenses.
---------------------------------------------------------------------------

    \7\ Ruth K. DeVelbis, Transportation Industry Analyst, Office of 
Financial and Rate Approvals, Maritime Administration, personal 
communication May 2004.
---------------------------------------------------------------------------

Impact on Commercial Trucks

    AQI user fees are charged for the inspection of commercial trucks 
arriving in the United States. The fee for single truck inspections 
increases by $0.25, or 5 percent, in FY 2005 and by $0.50, or 11 
percent, in total over the period covered in this interim rule. The 
truck decal user fee, which is set at a level equal to 20 times the 
single crossing fee, increases by $5 in FY 2005 and by $10 in total. 
Additional collections from both commercial truck sources (single entry 
user fees and multiple entry truck decals) will be $0.3 million in FY 
2005. In FY 2010, additional collections from single-entry fees and 
multiple-entry decals will total an estimated $0.6 million.
    If we assume that any U.S. trucking firm that regularly transports 
freight across the U.S./Mexican border will purchase an APHIS decal, 
which is good for an unlimited number of entries during the calendar 
year, the proposed increase in user fees in FY 2005 could cost a firm, 
at most, an additional $5 per truck decal or an estimated $325 for a 
firm operating 65 trucks.\8\ This increase is insignificant when 
compared to the annual receipts of the typical trucking firm, 
representing only 0.02 percent of the average U.S. trucking firm's year 
2000 operating revenues of $1.8 million.
---------------------------------------------------------------------------

    \8\ This estimate is based on the assumption that a firm owns 65 
trucks, the average number of truck registrations per trucking 
establishment. (DOT/BTS).
---------------------------------------------------------------------------

Impact on Loaded Railroad Cars

    AQI user fees are charged for the inspection of loaded railroad 
cars entering the United States from Mexico. Loaded railcar user fees 
will increase by $0.50, or 7 percent, in FY2005, and by a total of 
$0.75, or 11 percent, over the period covered in this interim rule. The 
annual volume of loaded railroad cars arriving in the United States 
from Mexico is estimated at about 200,000. The additional revenues from 
the increases in this user fee are expected to be $0.1 million in FY 
2005 and to total $0.7 million over the period covered in the rule.
    The impact of the increase in fees should be small. The total 
increase in this user fee over the entire time frame covered in this 
rule of $0.75 per railcar represents only about 0.06 percent of the 
average freight revenue per carload for Class I railroads (those with 
2002 operating revenue of at least $272 million) in 2003.\9\ Even the 
full fee in FY 2005 of $7.50 represents only 0.6 percent of the average 
freight revenue per carload.
---------------------------------------------------------------------------

    \9\ Based on data from Class I Railroad Statistics. Association 
of American Railroads, Policy and Economics Department. Freight 
revenue per ton-mile ($0.02283 in 2003) x average length of haul 
(862.4 miles in 2003) = freight revenue per haul ($19.70). Freight 
revenue per haul x average tons per carload (62.3 in 2003) = average 
freight revenue per carload ($1,226.60).
---------------------------------------------------------------------------

Administrative Cost Estimates

    Additional reporting costs to private airlines associated with 
revising user fees are likely to be very small because mechanisms are 
already in place for collecting fees. There should be no additional 
recordkeeping costs for ticketing agents and tour operators who are not 
involved in remitting fees and are not expected to remit fees in the 
future. Similarly, additional reporting burdens associated with cargo 
inspection fees on vessel, aircraft, railcar, and truck operators 
resulting from a revision of user fees are likely to be very small as 
mechanisms are already in place for collecting fees.

Alternatives

    One alternative to this interim rule would have been to leave the 
regulations unchanged. In that case, the fees would have remained 
unchanged. However, in addition to routine increases in the cost of 
providing AQI services due to inflation, replacement of equipment, and 
mandated increases in pay costs, the events of September 11, 2001, have 
had a profound impact on costs and revenues. Revenues have diminished 
due, in large part, to reduced passenger loads, conveyance arrivals, 
and cargo volumes. On the other hand, new security concerns regarding 
international travel have led us to adopt an inspection process that is 
much more extensive than before and is very personnel-intensive. 
Therefore, AQI program costs have not declined, but rather have 
increased considerably. In fact, the program's cost has significantly 
outpaced user fee collections. If APHIS were to continue to collect 
user fees at the rates in effect prior to this interim rule during the 
period from FY 2005 through FY 2010, total collections would be more 
than $708 million short of projected program costs. As noted earlier, 
such a shortfall could result in AQI service cutbacks, which would 
increase the potential for animal and plant pests and diseases to enter 
the United States and could disrupt trade if inspectors were not 
available to inspect and clear cargo on a timely basis. Therefore, this 
alternative was rejected.
    Another alternative to this rule would have been to leave the AQI 
user fees unchanged and request that Congress cover the additional AQI 
program costs through appropriations. Since FY 1992, however, APHIS has 
received no directly appropriated funds to provide AQI services. The 
shift to funding AQI programs through user fees rather than through 
appropriations provided a more equitable way of matching program costs 
to program users or beneficiaries. The implementation of user fees is 
based on the premise that the beneficiaries or users of a public system 
should pay for its operation, rather than the public at large. The use 
of appropriations to cover the growth in the cost of AQI activities 
would shift some of the burden of paying for the AQI system back to 
U.S. taxpayers and away from the users of that system. Therefore, this 
alternative was rejected.
    A third alternative to this rule would have been to simplify the 
fee increases by using a set percentage increase for the out-years of 
the proposal. This approach would have involved increasing the fees to 
cover the cost

[[Page 71678]]

increases in FY 2005, followed by fee increases of 1.5 percent per year 
in FYs 2006 through 2010.\10\ However, the annual number of users in 
each category of service and trends in those numbers affect the level 
at which each fee should be set to properly recover the cost of 
providing the corresponding service. These volumes fluctuate over time, 
and those fluctuations also vary by user fee service category. While 
developing the needed fee increases, APHIS performed a review of 
factors affecting volumes for each service category shown in our 
collection history. This review showed that a set percentage increase 
in the fees would eventually result in an excess of revenues flowing 
into the reserve fund because we do anticipate general volume 
increases. A 1.5 percent across-the-board fee increase, which does not 
take into account volume fluctuations and variations between 
categories, would result in additional reserve contributions of $26 
million in 2010, exceeding our planned reserve level. Moreover, a 
single rate of increase for all service categories would have users of 
one service subsidizing fees paid by users of another service. 
Therefore, we rejected this alternative.
---------------------------------------------------------------------------

    \10\ As a policy, USDA is using an inflation factor of 1.5 
percent when estimating increases in salaries and other economic 
factors, in accordance with the Mid-Session Review--Economic 
Assumptions.
---------------------------------------------------------------------------

Impact on Small Entities

    The Regulatory Flexibility Act requires that the Agency 
specifically consider the economic impact of its rules on small 
entities. The fee changes will directly affect commercial maritime 
vessels of 100 net tons or more, commercial trucks, commercial railroad 
cars, and commercial aircraft arriving at ports in the customs 
territory of the United States. Some of the firms affected will be 
foreign-owned firms, and some will be U.S.-owned firms. The fee changes 
will also affect international airline passengers arriving in the 
customs territory of the United States, but passengers are not included 
in the discussion here because the Regulatory Flexibility Act does not 
cover individuals.
    The Small Business Administration (SBA) has established guidelines 
for determining which establishments are to be considered small. For 
air transportation, the SBA defines a small business entity as having 
1,500 or fewer employees. For water transportation, a small business 
entity is defined as having 500 or fewer employees. The definition for 
small business entity in truck transportation is one having $18.5 
million or less in annual receipts. For railroad transportation, the 
SBA defines a small business entity as having 500 or fewer employees.
    According to 1997 Economic Census data for air transportation 
(North American Industry Classification System [NAICS] code 481; not 
including large certificated passenger carriers),\11\ only 13 of the 
1,868 firms that operated for the entire year employed more than 1,000 
workers. Thus approximately 99 percent (1,855 firms) of these air 
transportation firms employed fewer than 1,500 workers. However, the 
vast majority of these firms are not operating internationally and are 
therefore not affected by this rule. In 2002, approximately 65 percent 
of the 72 major, national, and large and medium regional air carriers 
would have been considered small by SBA standards. All of the major air 
carriers, and 12 of 30 nationals, would be considered large. In FY 
2003, those large air carriers accounted for more than 78 percent of 
the aircraft clearance inspections for which user fees were collected.
---------------------------------------------------------------------------

    \11\ U.S. Census Bureau, U.S. Department of Commerce. The 
Economic Census does not cover large certificated passenger carriers 
that report to the DOT's Office of Airline Statistics. Data from the 
2002 Economic Census are not yet fully available, and data from the 
National Transportation Statistics 2003, DOT/BTS do not contain 
information on firm size.
---------------------------------------------------------------------------

    Data on deep-sea coastal water transportation (NAICS code 4831) 
from the 1997 Economic Census show that of the 487 firms that operated 
for the entire year, 40 firms employed 100 or more workers. Thus, at 
least 92 percent of affected water transportation firms would be 
considered small. Data on truck transportation (NAICS code 484) from 
the 1997 Economic Census show that of the 70,044 firms that operated 
for the entire year, 1,614 firms had annual receipts in excess of $10 
million. Thus, approximately 97.7 percent (68,830 firms) of all truck 
transportation firms had less than $10 million in annual receipts. 
Based on information from the Association of American Railroads 
(AAR),\12\ of the 571 firms that operated for all of 2001 in railroad 
transportation (NAICS code 4011), only 18 firms employed more than 500 
workers. Thus approximately 97 percent (553 firms) of all line-haul 
railroads employed fewer than 500 workers.
---------------------------------------------------------------------------

    \12\ The Economic Census does not cover railroads.
---------------------------------------------------------------------------

    From the above it can be expected that a considerable number of 
those entities affected by this rule can be considered small. However, 
as we have noted in our discussions of the individual transportation 
sectors, the impacts of the user fee changes represent a small portion 
of overall operating costs on transportation entities, whether small or 
large, and should therefore have a small impact.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action will 
not have a significant economic impact on a substantial number of small 
entities.

Executive Order 12372

    This program/activity is listed in the Catalog of Federal Domestic 
Assistance under No. 10.025 and is subject to Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. (See 7 CFR part 3015, subpart V.)

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule has been designated by the Administrator, Office of 
Information and Regulatory Affairs, Office of Management and Budget, as 
a major rule under the Small Business Regulatory Enforcement Fairness 
Act of 1996 (SBREFA, 5 U.S.C. 801-808). Under SBREFA, major rules, in 
general, cannot take effect until 60 days after the rule is published 
in the Federal Register. However, section 808(2) of SBREFA states that 
agencies may waive this effective date requirement for ``good cause'' 
and establish an earlier effective date. As explained above, this rule 
is necessary on an emergency basis to ensure the adequate funding and 
continued operation at necessary levels of CBP and APHIS activities 
vital to preventing the introduction of plant and animal pests and 
diseases into the United States, and the Administrator has determined 
that there is good cause for issuing this rule as an interim rule 
rather than by publishing it as a notice of proposed rulemaking. For 
these same reasons, there is ``good cause'' under section 808(2) of 
SBREFA to make this rule effective on a date earlier than would 
otherwise be required under that Act.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule: (1) Preempts all State and local laws and 
regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule.

Paperwork Reduction Act

    This rule contains no new information collection or recordkeeping 
requirements under the Paperwork

[[Page 71679]]

Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 7 CFR Part 354

    Animal diseases, Exports, Government employees, Imports, Plant 
diseases and pests, Quarantine, Reporting and recordkeeping 
requirements, Travel and transportation expenses.


0
Accordingly, we are amending 7 CFR part 354 as follows:

PART 354--OVERTIME SERVICES RELATING TO IMPORTS AND EXPORTS; AND 
USER FEES

0
1. The authority citation for part 354 is revised to read as follows:

    Authority: 7 U.S.C. 7701-7772 and 8301-8317; 21 U.S.C. 136 and 
136a; 49 U.S.C. 80503; 7 CFR 2.22, 2.80, and 371.3.


0
2. Section 354.3 is revised to read as follows:


Sec.  354.3  User fees for certain international services.

    (a) Definitions. Whenever in this section the following terms are 
used, unless the context otherwise requires, they shall be construed, 
respectively, to mean:
    APHIS. The Animal and Plant Health Inspection Service of the United 
States Department of Agriculture.
    Arrival. Arrival at a port of entry in the customs territory of the 
United States, or at any place served by a port of entry as specified 
in 19 CFR 101.3.
    Calendar year. The period from January 1 to December 31, inclusive, 
of any particular year.
    Commercial aircraft. Any aircraft used to transport persons or 
property for compensation or hire.
    Commercial purpose. The intention of receiving compensation, or 
making a gain or profit.
    Commercial railroad car. A railroad car used or capable of being 
used for transporting property for compensation or hire.
    Commercial shipment. A shipment for gain or profit.
    Commercial truck. A self-propelled vehicle, designed and used for 
transporting property for compensation or hire. Empty trucks and truck 
cabs without trailers fitting this description are included.
    Commercial vessel. Any watercraft or other contrivance used or 
capable of being used as a means of transportation on water to 
transport property for compensation or hire, with the exception of any 
aircraft or ferry.
    Customs. The Bureau of Customs and Border Protection, U.S. 
Department of Homeland Security.
    Customs territory of the United States. The 50 States, the District 
of Columbia, and Puerto Rico.
    Designated State or county inspector. A State or county plant 
regulatory official designated by the Secretary of Agriculture to 
inspect and certify to shippers and other interested parties as to the 
phytosanitary condition of plant products inspected under the Plant 
Protection Act.
    Export certificate for processed plant products. A certificate (PPQ 
Form 578) issued by an inspector, describing the plant health condition 
of processed or manufactured plant products based on inspection of 
submitted samples and/or by virtue of the processing received.
    Person. An individual, corporation, partnership, trust, 
association, or any other public or private entity, or any officer, 
employee, or agent thereof.
    Phytosanitary certificate. A certificate (PPQ Form 577) issued by 
an inspector, giving the phytosanitary condition of domestic plants or 
unprocessed or unmanufactured plant products based on inspection of the 
entire lot or representative samples drawn by a Federal or State 
employee authorized to conduct such sampling.
    Phytosanitary certificate for reexport. A certificate (PPQ Form 
579) issued by an inspector, giving the phytosanitary condition of 
foreign plants and plant products legally imported into the United 
States and subsequently offered for reexport. The certificate certifies 
that, based on the original foreign phytosanitary certificate and/or 
additional inspection or treatment in the United States, the plants and 
plant products are considered to conform to the current phytosanitary 
regulations of the receiving country and have not been subjected to the 
risk of infestation or infection during storage in the United States. 
Plants and plant products which transit the United States under Customs 
bond are not eligible to receive the phytosanitary certificate for 
reexport.
    (b) Fee for inspection of commercial vessels of 100 net tons or 
more. (1) Except as provided in paragraph (b)(2) of this section, the 
master, licensed deck officer, or purser of any commercial vessel which 
is subject to inspection under part 330 of this chapter or 9 CFR 
chapter I, subchapter D, and which is either required to make entry at 
the customs house under 19 CFR 4.3 or is a United States-flag vessel 
proceeding coastwise under 19 CFR 4.85, shall, upon arrival, proceed to 
Customs and pay an agricultural quarantine and inspection (AQI) user 
fee. The AQI user fee for each arrival, not to exceed 15 payments in a 
calendar year (i.e., no additional fee will be charged for a 16th or 
subsequent arrival in a calendar year), is shown in the following 
table. The AQI user fee shall be collected at each port of arrival.

------------------------------------------------------------------------
                      Effective dates                           Amount
------------------------------------------------------------------------
January 1, 2005, through September 30, 2005................      $486.00
October 1, 2005, through September 30, 2006................       488.00
October 1, 2006, through September 30, 2007................       490.00
October 1, 2007, through September 30, 2008................       492.00
October 1, 2008, through September 30, 2009................       494.00
October 1, 2009, through September 30, 2010................       496.00
------------------------------------------------------------------------

    (2) The following categories of commercial vessels are exempt from 
paying an AQI user fee:
    (i) Foreign passenger vessels making at least three trips a week 
from a port in the United States to the high seas (including ``cruises 
to nowhere'') and returning to the same port in the United States, not 
having touched any foreign port or place other than in Canada, or taken 
on any stores other than in Canada;
    (ii) Any vessel which, at the time of arrival, is being used solely 
as a tugboat;
    (iii) Vessels used exclusively in the governmental service of the 
United States or a foreign government, including any agency or 
political subdivision of the United States or a foreign government, so 
long as the vessel is not carrying persons or merchandise for 
commercial purposes;
    (iv) Vessels arriving in distress or to take on bunkers, sea 
stores, or ship's stores;
    (v) Tugboats towing vessels on the Great Lakes; and
    (vi) Any vessel which sails only between United States and Canadian 
ports, when the Master of such vessel arriving from Canada certifies, 
in the ``Particulars of Voyage'' block of the Vessel Entrance or 
Clearance Statement, CBP Form 1300, that the vessel has sailed solely 
between the United States and Canada for the previous 2 years.
    (c) Fee for inspection of commercial trucks. (1) Except as provided 
in paragraph (c)(2) of this section, the driver or other person in 
charge of a commercial truck that is entering the customs territory of 
the United States and that is subject to inspection under part 330 of 
this chapter or under 9 CFR, chapter I, subchapter D, must, upon 
arrival, proceed to Customs and pay an AQI user fee for each arrival, 
as shown in the following table:

[[Page 71680]]



------------------------------------------------------------------------
                      Effective dates                           Amount
------------------------------------------------------------------------
January 1, 2005, through September 30, 2005................        $5.00
October 1, 2005, through September 30, 2006................         5.25
October 1, 2006, through September 30, 2007................         5.25
October 1, 2007, through September 30, 2008................         5.25
October 1, 2008, through September 30, 2009................         5.25
October 1, 2009, through September 30, 2010................         5.25
------------------------------------------------------------------------

    (2) The following categories of commercial trucks are exempt from 
paying an AQI user fee:
    (i) Trucks entering the customs territory of the United States from 
Canada.
    (ii) [Reserved]
    (3) Prepayment.
    (i) The owner or operator of a commercial truck, if entering the 
customs territory of the United States from Mexico and applying for a 
prepaid Customs permit for a calendar year, must apply for a prepaid 
AQI permit for the same calendar year. Applicants must apply to Customs 
for prepaid AQI permits.\1\ The following information must be provided, 
together with payment of an amount 20 times the AQI user fee for each 
arrival:
---------------------------------------------------------------------------

    \1\ Applicants should refer to Customs and Border Protection 
regulations (19 CFR part 24) for specific instructions.
---------------------------------------------------------------------------

    (A) Vehicle make, model, and model year.
    (B) Vehicle Identification Number (VIN).
    (C) License numbers issued by State, Province, or country.
    (D) Owner's name and address.
    (ii) No credit toward the prepaid AQI permit will be given for user 
fees paid for individual arrivals.
    (d) Fee for inspection of commercial railroad cars. (1) Except as 
provided in paragraph (d)(2) of this section, an AQI user fee will be 
charged for each loaded commercial railroad car which is subject to 
inspection under part 330 of this chapter or under 9 CFR chapter I, 
subchapter D, upon each arrival. The railroad company receiving a 
commercial railroad car in interchange at a port of entry or, barring 
interchange, the railroad company moving a commercial railroad car in 
line haul service into the customs territory of the United States, is 
responsible for paying the AQI user fee. The AQI user fee for each 
arrival of a loaded railroad car is shown in the following table. If 
the AQI user fee is prepaid for all arrivals of a commercial railroad 
car during a calendar year, the AQI user fee is an amount 20 times the 
AQI user fee for each arrival.

------------------------------------------------------------------------
                      Effective dates                           Amount
------------------------------------------------------------------------
January 1, 2005, through September 30, 2005................        $7.50
October 1, 2005, through September 30, 2006................         7.50
October 1, 2006, through September 30, 2007................         7.75
October 1, 2007, through September 30, 2008................         7.75
October 1, 2008, through September 30, 2009................         7.75
October 1, 2009, through September 30, 2010................         7.75
------------------------------------------------------------------------

    (2) The following categories of commercial railroad cars are exempt 
from paying an AQI user fee:
    (i) Commercial railroad cars entering the customs territory of the 
United States from Canada;
    (ii) Any commercial railroad car that is part of a train whose 
journey originates and terminates in the United States, if--
    (A) The commercial railroad car is part of the train when the train 
departs the United States; and
    (B) No passengers board or disembark from the commercial railroad 
car, and no cargo is loaded or unloaded from the commercial railroad 
car, while the train is within any country other than the United 
States; and
    (iii) Locomotives and cabooses.
    (3) Prepayment.
    (i) Railroad companies may, at their option, prepay the AQI user 
fee for each commercial railroad car for a calendar year. This payment 
must be remitted in accordance with paragraph (d)(5) of this section.
    (ii) No credit toward the calendar year AQI user fee will be given 
for AQI user fees paid for individual arrivals.
    (4) Statement procedures. The Association of American Railroads 
(AAR), and the National Railroad Passenger Corporation (AMTRAK), shall 
file monthly statements with the U.S. Bank, United States Department of 
Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 63195-
2181, within 60 days after the end of each calendar month. Each 
statement shall indicate:
    (i) The number of loaded commercial railroad cars entering the 
customs territory of the United States from Mexico during the relevant 
period;
    (ii) The number of those commercial railroad cars pulled by each 
railroad company; and
    (iii) The total monthly AQI user fee due from each railroad 
company.
    (5) Remittance procedures. Individual railroad companies shall 
remit the AQI user fees calculated by AAR, and AMTRAK shall remit the 
AQI user fees it has calculated, within 60 days after the end of each 
calendar month in which commercial railroad cars entered the customs 
territory of the United States. AQI user fees, together with monthly 
statements, must be remitted to the U.S. Bank, United States Department 
of Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 
63195-2181.
    (6) Compliance. AAR, AMTRAK, and each railroad company responsible 
for making AQI user fee payments must allow APHIS personnel to verify 
the accuracy of AQI user fees collected and remitted and otherwise 
determine compliance with 21 U.S.C. 136a and this paragraph. The AAR, 
AMTRAK, and each railroad company responsible for making AQI user fee 
payments must advise the U.S. Bank, United States Department of 
Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 63195-
2181, of the name, address, and telephone number of a responsible 
officer who is authorized to verify AQI user fee calculations, 
collections, and remittances, as well as any changes in the identifying 
information submitted.
    (e) Fee for inspection of commercial aircraft. (1) Except as 
provided in paragraph (e)(2) of this section, an AQI user fee will be 
charged for each commercial aircraft which is arriving, or which has 
arrived and is proceeding from one United States airport to another 
under a Bureau of Customs and Border Protection ``Permit to Proceed,'' 
as specified in 19 CFR 122.81 through 122.85, or an ``Agricultural 
Clearance or Safeguard Order'' (PPQ Form 250), used pursuant to Sec.  
330.400 of this chapter and 9 CFR 94.5, and which is subject to 
inspection under part 330 of this chapter or 9 CFR chapter I, 
subchapter D. Each carrier is responsible for paying the AQI user fee. 
The AQI user fee for each arrival is shown in the following table:

------------------------------------------------------------------------
                      Effective dates                           Amount
------------------------------------------------------------------------
January 1, 2005, through September 30, 2005................       $70.00
October 1, 2005, through September 30, 2006................        70.25
October 1, 2006, through September 30, 2007................        70.50
October 1, 2007, through September 30, 2008................        70.50
October 1, 2008, through September 30, 2009................        70.75
October 1, 2009, through September 30, 2010................        70.75
------------------------------------------------------------------------

    (2) The following categories of commercial aircraft are exempt from 
paying an AQI user fee:

[[Page 71681]]

    (i) Any aircraft moving solely between the United States and 
Canada;
    (ii) Any aircraft used exclusively in the governmental services of 
the United States or a foreign government, including any Agency or 
political subdivision of the United States or a foreign government, as 
long as the aircraft is not carrying persons or merchandise for 
commercial purposes;
    (iii) Any aircraft making an emergency or forced landing when the 
original destination of the aircraft was a foreign port;
    (iv) Any passenger aircraft with 64 or fewer seats, which is not 
carrying the following cargo: Fresh fruits, fresh vegetables, plants, 
unprocessed plant products, cotton or covers, sugarcane, or fresh or 
processed meats; and which does not offer meal service other than 
beverages and prepackaged snacks that do not contain meats derived from 
ruminants, swine, or poultry or fresh fruits and fresh vegetables. 
Aircraft exempt from the user fee under this paragraph would still be 
subject to the garbage handling requirements found in Sec.  330.400 of 
this chapter and 9 CFR 94.5;
    (v) Any aircraft moving from the United States Virgin Islands to 
Puerto Rico; and
    (vi) Any aircraft making an intransit stop at a port of entry, 
during which the aircraft does not proceed through any portion of the 
Federal clearance process, such as inspection or clearance by APHIS or 
the Bureau of Customs and Border Protection, no cargo is removed from 
or placed on the aircraft, no passengers get on or off the aircraft, no 
crew members get on or off the aircraft, no food is placed on the 
aircraft, and no garbage is removed from the aircraft.
    (3) Remittance and statement procedures. (i) Each carrier must 
remit the appropriate fees to the U.S. Bank, United States Department 
of Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 
63195-2181, for receipt no later than 31 days after the close of the 
calendar quarter in which the aircraft arrivals occurred. Late payments 
will be subject to interest, penalty, and handling charges as provided 
in the Debt Collection Act of 1982, as amended by the Debt Collection 
Improvement Act of 1996 (31 U.S.C. 3717).
    (ii) The remitter must mail with the remittance a written statement 
to the U.S. Bank, United States Department of Agriculture (USDA), 
APHIS, AQI, P.O. Box 952181, St. Louis, MO 63195-2181. The statement 
must include the following information:
    (A) Name and address of the person remitting payment;
    (B) Taxpayer identification number of the person remitting payment;
    (C) Calendar quarter covered by the payment;
    (D) Ports of entry at which inspections occurred;
    (E) Number of arrivals at each port; and
    (F) Amount remitted.
    (iii) Remittances must be made by check or money order, payable in 
United States dollars, through a United States bank, to ``The Animal 
and Plant Health Inspection Service.''
    (4) Compliance. Each carrier subject to this section must allow 
APHIS personnel to verify the accuracy of the AQI user fees remitted 
and to otherwise determine compliance with 21 U.S.C. 136a and this 
paragraph. Each carrier must advise the U.S. Bank, United States 
Department of Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. 
Louis, MO 63195-2181, of the name, address, and telephone number of a 
responsible officer who is authorized to verify AQI user fee 
calculations and remittances, as well as any changes in the identifying 
information submitted.
    (5) Limitations on charges. (i) Airlines will not be charged 
reimbursable overtime for inspection of aircraft if the aircraft is 
subject to the AQI user fee for arriving aircraft as prescribed by this 
section.
    (ii) Airlines will not be charged reimbursable overtime for 
inspection of cargo from an aircraft if:
    (A) The aircraft is subject to the AQI user fee for arriving 
aircraft as prescribed by this section; and
    (B) The cargo is inspected between 8 a.m. and 4:30 p.m., Monday 
through Friday; or
    (C) The cargo is inspected concurrently with the aircraft.
    (f) Fee for inspection of international passengers. (1) Except as 
specified in paragraph (f)(2) of this section, each passenger aboard a 
commercial aircraft who is subject to inspection under part 330 of this 
chapter or 9 CFR, chapter I, subchapter D, upon arrival from a place 
outside of the customs territory of the United States, must pay an AQI 
user fee. The AQI user fee for each arrival is shown in the following 
table:

------------------------------------------------------------------------
                     Effective dates\1\                         Amount
------------------------------------------------------------------------
January 1, 2005, through September 30, 2005................        $4.95
October 1, 2005, through September 30, 2006................         5.00
October 1, 2006, through September 30, 2007................         5.00
October 1, 2007, through September 30, 2008................         5.00
October 1, 2008, through September 30, 2009................         5.00
October 1, 2009, through September 30, 2010................        5.00
------------------------------------------------------------------------
\1\ Persons who issue international airline tickets or travel documents
  are responsible for collecting the AQI international airline passenger
  user fee from ticket purchasers. Issuers must collect the fee
  applicable at the time tickets are sold. In the event that ticket
  sellers do not collect the AQI user fee when tickets are sold, the air
  carrier must collect the user fee from the passenger upon departure.
  Carriers must collect the fee applicable at the time of departure from
  the traveler.

    (2) The following categories of passengers are exempt from paying 
an AQI user fee:
    (i) Passengers arriving from Canada whose journey originates in 
Canada;
    (ii) Crew members who are on duty on a commercial aircraft;
    (iii) Airline employees, including ``deadheading'' crew members, 
who are traveling on official airline business;
    (iv) Diplomats, except for United States diplomats, who can show 
that their names appear on the accreditation listing maintained by the 
United States Department of State. In lieu of the accreditation 
listing, an individual diplomat may present appropriate proof of 
diplomatic status to include possession of a diplomatic passport or 
visa, or diplomatic identification card issued by a foreign government;
    (v) Passengers departing and returning to the United States without 
having touched a foreign port or place other than Canada;
    (vi) Passengers arriving on any commercial aircraft used 
exclusively in the governmental service of the United States or a 
foreign government, including any agency or political subdivision of 
the United States or a foreign government, so long as the aircraft is 
not carrying persons or merchandise for commercial purposes. Passengers 
on commercial aircraft under contract to the United States Department 
of Defense (DOD) are exempted if they have been precleared abroad under 
the joint DOD/APHIS Military Inspection Program;
    (vii) Passengers arriving on an aircraft due to an emergency or 
forced landing when the original destination of the aircraft was a 
foreign port;
    (viii) Passengers transiting the United States and not subject to 
inspection; and
    (ix) Passengers moving from the United States Virgin Islands to 
Puerto Rico.
    (3) AQI user fees shall be collected under the following 
circumstances:
    (i) When through tickets or travel documents are issued indicating 
travel to the customs territory of the United

[[Page 71682]]

States which originates in any location other than Canada;
    (ii) When through tickets or travel documents are issued in Canada 
indicating an arrival in the customs territory of the United States 
following a stopover (layover) in a location other than Canada; and
    (iii) When passengers arrive in the customs territory of the United 
States in transit from a location other than Canada and are inspected 
by APHIS or Customs.
    (4) Collection of fees. (i) Any person who issues tickets or travel 
documents on or after May 13, 1991, is responsible for collecting the 
AQI user fee from all passengers transported into the customs territory 
of the United States to whom the AQI user fee applies.
    (A) Tickets or travel documents must be marked by the person who 
collects the AQI user fee to indicate that the required AQI user fee 
has been collected from the passenger.
    (B) If the AQI user fee applies to a passenger departing from the 
United States and if the passenger's tickets or travel documents were 
issued on or after May 13, 1991, but do not reflect collection of the 
AQI user fee at the time of issuance, then the carrier transporting the 
passenger from the United States must collect the AQI user fee upon 
departure.
    (C) AQI user fees collected from international passengers pursuant 
to paragraph (f) of this section shall be held in trust for the United 
States by the person collecting such fees, by any person holding such 
fees, or by the person who is ultimately responsible for remittance of 
such fees to APHIS. AQI user fees collected from international 
passengers shall be accounted for separately and shall be regarded as 
trust funds held by the person possessing such fees as agents, for the 
beneficial interest of the United States. All such user fees held by 
any person shall be property in which the person holds only a 
possessory interest and not an equitable interest. As compensation for 
collecting, handling, and remitting the AQI user fees for international 
passengers, the person holding such user fees shall be entitled to any 
interest or other investment return earned on the user fees between the 
time of collection and the time the user fees are due to be remitted to 
APHIS under this section. Nothing in this section shall affect APHIS' 
right to collect interest for late remittance.
    (5) Remittance and statement procedures. (i) The carrier whose 
ticket stock or travel document reflects collection of the AQI user fee 
must remit the fee to the U.S. Bank, United States Department of 
Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 63195-
2181. The travel agent, United States-based tour wholesaler, or other 
entity, which issues its own non-carrier related ticket or travel 
document to a passenger who is subject to an AQI user fee under this 
part, must remit the fee to APHIS, unless by contract the carrier will 
remit the fee.
    (ii) AQI user fees must be remitted to the U.S. Bank, United States 
Department of Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. 
Louis, MO 63195-2181, for receipt no later than 31 days after the close 
of the calendar quarter in which the AQI user fees were collected. Late 
payments will be subject to interest, penalty, and handling charges as 
provided in the Debt Collection Act of 1982, as amended by the Debt 
Collection Improvement Act of 1996 (31 U.S.C. 3717). Refunds by a 
remitter of AQI user fees collected in conjunction with unused tickets 
or travel documents shall be netted against the next subsequent 
remittance.
    (iii) The remitter must mail with the remittance a written 
statement to the U.S. Bank, United States Department of Agriculture 
(USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 63195-2181. The 
statement must include the following information:
    (A) Name and address of the person remitting payment;
    (B) Taxpayer identification number of the person remitting payment;
    (C) Calendar quarter covered by the payment; and
    (D) Amount collected and remitted.
    (iv) Remittances must be made by check or money order, payable in 
United States dollars, through a United States bank, to ``The Animal 
and Plant Health Inspection Service.''
    (6) Carriers contracting with United States-based tour wholesalers 
are responsible for notifying the U.S. Bank, United States Department 
of Agriculture (USDA), APHIS, AQI, P.O. Box 952181, St. Louis, MO 
63195-2181, of all flights contracted, the number of spaces contracted 
for, and the name, address, and taxpayer identification number of the 
United States-based tour wholesaler, within 31 days after the close of 
the calendar quarter in which such a flight occurred; except that, 
carriers are not required to make notification if tickets, marked to 
show collection of the AQI user fee, are issued for the individual 
contracted spaces.
    (7) Compliance. Each carrier, travel agent, United States-based 
tour wholesaler, or other entity subject to this section must allow 
APHIS personnel to verify the accuracy of the AQI user fees collected 
and remitted and to otherwise determine compliance with 21 U.S.C. 136a 
and this paragraph. Each carrier, travel agent, United States-based 
tour wholesaler, or other entity must advise the U.S. Bank, United 
States Department of Agriculture (USDA), APHIS, AQI, P.O. Box 952181, 
St. Louis, MO 63195-2181, of the name, address, and telephone number of 
a responsible officer who is authorized to verify AQI user fee 
calculations, collections, and remittances, as well as any changes in 
the identifying information submitted.
    (8) Limitation on charges. Airlines will not be charged 
reimbursable overtime for passenger inspection services required for 
any aircraft on which a passenger arrived who has paid the airline 
passenger AQI user fee for that flight.
    (g) Fees for export certification of plants and plant products. (1) 
For each certificate issued by APHIS personnel, the recipient must pay 
the applicable AQI user fee at the time and place the certificate is 
issued, or, in the case of a block of certificates, at the time the 
certificates are given to the shipper.
    (2) There is no AQI user fee for a certificate issued by a 
designated State or county inspector.
    (3) If a designated State inspector issues a certificate, the State 
where the certificate is issued may charge for inspection services 
provided in that State.
    (4) Any State which wishes to charge a fee for services it provides 
to issue certificates must establish fees in accordance with one of the 
following guidelines:
    (i) Calculation of a ``cost-per-certificate'' fee. The State must:
    (A) Estimate the annual number of certificates to be issued;
    (B) Determine the total cost of issuing certificates by adding 
together delivery,\2\ support,\3\ and administrative \4\ costs; and
---------------------------------------------------------------------------

    \2\ Delivery costs are costs such as employee salary and 
benefits, transportation, per diem, travel, purchase of specialized 
equipment, and user fee costs associated with maintaining field 
offices. Delivery hours are similar hours taken by inspectors, 
including travel time, inspection time, and time taken to complete 
paperwork.
    \3\ Support costs are costs at supervisory levels which are 
similar to delivery costs, and user fee costs such as training, 
automated data processing, public affairs, enforcement, legal 
services, communications, postage, budget and accounting services, 
and payroll, purchasing, billing, and collecting services. Support 
hours are similar hours taken at supervisory levels, as well as 
hours taken in training, automated data processing, enforcement, 
legal services, communication, budgeting and accounting, payroll 
purchasing, billing, and collecting.
    \4\ Administrative costs are costs incurred as a direct result 
of collecting and monitoring Federal phytosanitary certificates. 
Administrative hours are hours taken as a direct result of 
collecting and monitoring Federal phytosanitary certificates.

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

[[Page 71683]]

    (C) Divide the cost of issuing certificates by the estimated number 
of certificates to be issued to obtain a ``raw'' fee. The State may 
round the ``raw'' fee up to the nearest quarter, if necessary for ease 
of calculation, collection, or billing; or
    (ii) Calculation of a ``cost-per-hour'' fee. The State must:
    (A) Estimate the annual number of hours taken to issue certificates 
by adding together delivery,\2\ support,\3\ and administrative \4\ 
hours;
    (B) Determine the total cost of issuing certificates by adding 
together delivery, support, and administrative costs; and
    (C) Divide the cost of issuing certificates by the estimated number 
of hours taken to issue certificates to obtain a ``cost-per-hour'' fee. 
The State may round the ``cost-per-hour'' fee up to the nearest 
quarter, if necessary for ease of calculation, collection, or billing.
    (5) The AQI user fees are:
    (i)(A) $50 for a certificate for a commercial shipment; or
    (B) $23 for a certificate for a low-value commercial shipment, if 
the following criteria are met:
    (1) The items being shipped are identical to those identified on 
the phytosanitary certificate;
    (2) The shipment is accompanied by an invoice which states that the 
items being shipped are worth less than $1,250; and
    (3) The shipper requests that user fee charged be based on the low 
value of the shipment;
    (ii) $23 for a certificate for a noncommercial shipment;
    (iii)(A) $50 for a certificate for reexport of a commercial 
shipment; or
    (B) $23 for a certificate for reexport of a low value commercial 
shipment, if the following criteria are met:
    (1) The items being shipped are identical to those identified on 
the phytosanitary certificate;
    (2) The shipment is accompanied by an invoice which states that the 
items being shipped are worth less than $1,250; and
    (3) The shipper requests that the user fee charged be based on the 
low value of the shipment;
    (iv) $50 for a processed product certificate for a commercial 
shipment; and
    (v) $7 for reissuing any certificate or certificate for reexport.
    (h) Refunds of AQI user fees. (1) A shipper who pays for a block of 
certificates to cover commercial shipments may obtain a refund or a 
credit against future AQI user fees under the following circumstances:
    (i) If a certificate from the block is voided;
    (ii) If a certificate from the block is returned unused;
    (iii) If the shipper pays for inspection outside of normal business 
hours (8 a.m. to 4:30 p.m.) under Sec.  354.1 of this part.
    (iv) If a certificate from the block is used for a noncommercial 
shipment; or
    (v) If a certificate from the block is used to reissue another 
certificate.
    (2) The amount of any refund or credit will be the amount 
overcharged, less $7 to cover APHIS administrative expenses.
    (i) Payment methods. For payment of any of the AQI user fees 
required in paragraph (g) of this section, we will accept personal 
checks for amounts less than $100, and checks drawn on commercial 
accounts, cashier's checks, certified checks, traveler's checks, and 
money orders for any amount. All payments must be for the exact amount 
due.
    (j) The person for whom the service is provided and the person 
requesting the service are jointly and severally liable for payment of 
user fees for any import or entry services listed below, of $56 per 
hour, or $14 per quarter hour, with a minimum fee of $14 for each 
employee required to perform the following services. If the services 
must be conducted on a Sunday or holiday or at any other time outside 
the normal tour of duty of the employee, then the premium user fee rate 
as listed below applies, as well as the 2-hour minimum charge and a 
commuted traveltime period required by Sec.  354.1(a)(2). If the 
services requested are performed on a Sunday, the hourly user fee rate 
will be $74, or $18.50 per quarter hour, with a $18.50 minimum. If the 
services requested are performed on a day other than Sunday outside the 
normal tour of duty of the employee providing the service, the hourly 
user fee rate will be $65, or $16.25 per quarter hour, with a $16.25 
minimum:
    (1) Conducting inspections, on vessels or in storage areas, of 
solid wood packing material or cargo when a shipment arrives without a 
certificate or exporter statement required under Sec.  319.40-5(g) or 
Sec.  319.40-5(h) of this chapter, or with an incomplete certificate or 
exporter statement; and
    (2) Supervising the separation of cargo from solid wood packing 
material denied entry under this subpart and the destruction or 
reexportation of the solid wood packing material. (Approved by the 
Office of Management and Budget under control numbers 1651-0019, 0579-
0094, or 0579-0052).

    Done in Washington, DC, this 6th day of December 2004.
Bill Hawks,
Under Secretary for Marketing and Regulatory Programs.
[FR Doc. 04-27053 Filed 12-8-04; 8:45 am]
BILLING CODE 3410-34-P