[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Notices]
[Pages 93660-93664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30423]


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DEPARTMENT OF COMMERCE

International Trade Administration

[Docket No. 161020988-6988-01]
RIN 0625-XC026


Revisions to User Fees for Export and Investment Promotion 
Services/Events

AGENCY: U.S. & Foreign Commercial Service, International Trade 
Administration, Commerce.

ACTION: Notice of proposed fee revisions and request for comment.

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SUMMARY: The U.S. & Foreign Commercial Service (US&FCS) within the 
International Trade Administration (ITA) is seeking comment on its 
proposal to adjust user fees in light of an independent cost study 
which concluded that the US&FCS is not fully covering its costs for 
providing services under the current fee structure, as provided in the 
Office of Management and Budget (OMB) Circular A-25. ITA provides a 
wide range of export and investment promotion information and services 
to U.S. individuals and entities. The services considered here are a 
subset of ITA activities that involve relatively more intensive time 
engagements with particular client firms; ITA will continue to provide 
information and services that are less intensive and/or benefit the 
general public without charge. As part of this proposal, US&FCS also 
proposes to revise the standards related to company size for 
determining the fees to be charged.

DATES: We will consider all comments that we receive by January 16, 
2017.

ADDRESSES: You may submit comments by either of the following methods:
     Federal eRulemaking Portal: www.Regulations.gov. The 
identification number is ITA-2016-0012.
     Postal Mail/Commercial Delivery to Docket No. ITA-2016-
0012, International Trade Administration, U.S. & Foreign Commercial 
Service, Office of Strategic Planning & Resource Management, 1400 
Constitution Avenue NW., Rm. C125, Washington, DC 20235.
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by US&FCS. All comments received are a part of 
the public record and will generally be posted for public viewing on 
www.regulations.gov without change. All personal identifying 
information (e.g., name, address, etc.), confidential business 
information, or otherwise sensitive information submitted voluntarily 
by the sender will be publicly accessible. US&FCS will accept anonymous 
comments (enter ``N/A'' in required fields if you wish to remain 
anonymous).

FOR FURTHER INFORMATION CONTACT: Ms. Aditi Palli, International Trade 
Administration, U.S. & Foreign Commercial Service, Office of Strategic 
Planning, 1400 Constitution Avenue NW., Rm. 21022, Washington, DC 
20230, Phone: (202) 482-2025.

SUPPLEMENTARY INFORMATION:

Background

    The statutory mission of US&FCS is to ``place primary emphasis on 
the promotion of exports of goods and services from the United States, 
particularly by small businesses and medium-sized businesses, and on 
the protection of United States business interests abroad . . . through 
activities that include assisting United States exporters.'' 15 U.S.C. 
Sec. 4721(b). The statute further defines the term ``United States 
exporter'' at 15 U.S.C. Sec. 4721(j) as a U.S. citizen, U.S. 
corporation, or foreign corporation that is more than 95% U.S.-owned, 
that ``exports or seeks to export, goods or services produced in the 
United States.'' In addition, US&FCS leads the federal government's 
investment promotion efforts ``to attract and retain investment in the 
American economy'' as provided in Executive Order 13577--SelectUSA 
Initiative (June 15, 2011). In carrying out these efforts, US&FCS may 
collect user fees from U.S. economic development organizations that 
seek to promote their locality to foreign investors.
    OMB Circular A-25 requires the recovery of an appropriate share of 
the full cost through user fees for goods and services provided to 
recipients of benefits beyond those accruing to the general public. 
Specifically, section 6 of Circular A-25 states that ``when a service 
(or privilege) provides special benefits to an identifiable recipient 
beyond those that accrue to the general public, a charge will be 
imposed (to recover the full cost to the Federal Government for 
providing the special benefit, or the market price).'' A ``user fee'' 
is the amount paid by a recipient of a special benefit beyond those 
benefits accruing to the general public. A ``special benefit'' may 
accrue and a user fee be imposed when a government service: (a) Enables 
the beneficiary to obtain more immediate or substantial gains or values 
than those that accrue to the general public; (b) is performed at the 
request or for the convenience of the recipient, and is beyond the 
services regularly received by members of the same industry or group or 
by the general public; or (c) provides business stability or 
contributes to public confidence in the business activity of the 
beneficiary.
    The direct or indirect cost of a service provided by the Federal 
Government includes, but is not limited to, the following:
     Direct and indirect personnel costs, including salaries 
and fringe benefits such as medical insurance and retirement. 
Retirement costs should include all (funded or unfunded) accrued costs 
not covered by employee contributions as specified in Circular A-11.
     Physical overhead, consulting, or other indirect costs 
including material and supply costs, utilities, insurance travel, and 
rents or imputed rents on land, buildings, and equipment.
     The management and supervisory costs.
     The costs of enforcement, collection, research, 
establishment of standards, and regulation, including any environmental 
impact statements.

Business Size Standards

    To comply with the Small Business Act, US&FCS, in consultation with 
the Small Business Administration (SBA), proposes the following 
standards related to company size:
     Small Business: The company qualifies as a ``small 
business'' under SBA's size standards matched to the North American 
Industry Classification System Codes.
     Medium-sized Business: The company does not qualify under 
SBA's size standards matched to the North American Industry 
Classification System Codes, but has less than $1 billion in annual 
revenue.
     Large Business: The company does not qualify under SBA's 
size standards matched to the North American Industry Classification 
System Codes and has more than $1 billion in annual revenue.
    The US&FCS is committed to ensuring small and medium-sized 
enterprises (SMEs) can access the services that US&FCS provides. The 
US&FCS has historically offered a discount to SMEs, as well as to U.S. 
economic development organizations and non-profit educational 
institutions. US&FCS proposes to continue discounted fees for these 
target populations. Rather than applying a

[[Page 93661]]

standard discount rate to all services, the fees proposed for each 
service are based on price sensitivity survey results as well as other 
considerations, such as the need to ensure that user fees set the 
proper expectation about the value-added for one service relative to 
other service offerings. The result is an average discount of 70 
percent for small companies, U.S. economic development organizations, 
and non-profit educational institutions, and 30 percent for medium-
sized companies.

User Fee Schedule

    The US&FCS offers export and investment promotion services to U.S. 
businesses that consist of Standardized Fee Services and Customized Fee 
Services. For each of these services, the US&FCS collects fees 
according to the User Fee Schedule that is made available on its Web 
site and agency publications. The ``Standardized Fee Services'' listed 
in the User Fee Schedule are services that are performed in the same 
general manner by all US&FCS field units. Other ``Customized 
Services,'' not shown in the chart below, entail substantive variation 
of the scope of work with fees based on the level of effort required 
and direct costs incurred. Under this notice, US&FCS proposes to turn 
more Customized Fee Services into Standardized Fee Services to improve 
the consistency and clarity of fees to be charged.
    The US&FCS proposes to modify the user fees for both Standardized 
Fee Services and Customized Fee Services. The proposed new User Fee 
Schedule provided below lists each standardized fee service and the 
estimated number of hours for completion of service delivery. To 
determine the large company fee for any service, a flat hourly rate of 
$46 for locally employed staff, $150 for commercial officers and $80 
for U.S.-based staff is multiplied by the estimated workload hours for 
each employee type. To determine the fees for a small business and 
medium-sized business, price sensitivity survey results were analyzed 
to determine the discount to be applied. Direct costs, such as 
transportation or an interpreter, will be discussed with the client and 
assessed in addition to the user fee. For Customized Fee Services, the 
estimated workload hours will vary, but the user fee will be calculated 
based on the weighted average hourly rate of $90 per hour for large 
companies, $70 per hour for medium-sized enterprises, and $30 per hour 
for small businesses. The services included in this proposal are 
described below.
    1. Business Service Provider A listing of U.S. and foreign business 
service providers that offer export/investment assistance; such as 
consultants, lawyers, freight forwarders, etc. The fee is paid for by 
the business service provider to be listed on US&FCS's Web sites.
    2. Certified Trade/Investment Mission: Provides a group of U.S. 
companies or economic development organizations with a market briefing, 
networking reception and Gold Key Service in-country as part of a 
mission organized by an economic development organization or US&FCS 
office/team. The fees for these missions are separate from DOC 
Executive-led Missions, which are organized by Industry and Analysis/
Trade Promotion Programs.
    3. Featured U.S. Exporter: Provides U.S. companies with an 
opportunity to enhance their international marketing efforts through 
improved search engine optimization via .gov link-backs to their 
company's Web site. The service entails listing their goods/services 
overseas on a trusted U.S. government Web site with a brief description 
and contact information.
    4. Gold Key Service: Provides U.S. companies with matchmaking 
appointments with up to five interested partners in a foreign market; 
including: Identification and outreach to potential matching firms; 
sending client's information to identified matching firms; preparing a 
profile of interested firms; and providing a report with the profile 
and contact information for interested firms.
    5. Initial Market Check: Provides U.S. firms with a report 
containing information needed to evaluate the potential of their 
product or service offering in a specific target market; including: A 
snapshot of the market potential of the product/service; feedback from 
up to five local contacts on their level of interest in the product/
service; and analysis and recommendations for next steps.
    6. International Company Profile--Full Report: Full: Provides U.S. 
companies and economic development organizations with a comprehensive 
background report on a specific foreign company, including: Information 
on company size, sales data, business activities, corporate structure, 
shareholders and directors, references, financial data creditworthiness 
and market outlook; site visit and interviews with principals; 
information sources consulted in preparing the report; and analysis of 
information collected.
    7. International Company Profile--Partial Report: Provides U.S. 
companies and economic development organizations with a partial 
background report on a specific foreign company; including: Information 
on company size, sales data, business activities, references, corporate 
structure, and shareholders/directors; information sources consulted in 
preparing the report; and brief analysis of information collected.
    8. International Partner Service: Provides U.S. companies with a 
list of up to five partners/distributors that have expressed an 
interest in the client's goods/services; including: Identification and 
outreach to potential matching firms; sending client's information to 
identified matching firms; preparing a profile of interested firms; and 
providing a report with the profile and contact information for 
interested firms.
    9. International Partner Search + Virtual Introductions: Provides 
the same as above, but also includes virtual introductions via 
conference calls with up to five of the contacts identified.
    10. Other Customized Services/Events: Includes all other services/
events not listed.
    11. Single Company or Location Promotion: Provides a U.S. firm or 
locality with a promotional event (such as a technical seminar, press 
conference, luncheon, dinner, cocktail reception, etc.) to help 
increase awareness of their locality or existing/new products/services 
in a specific market, including: organizing the event logistics/venue; 
conducting a targeted direct mail or email campaigns; managing the 
promotional campaign and event-related logistics; providing logistical 
and promotional support on-site during the event; and providing a post-
event de-briefing to discuss next steps.
    12. Target Market Analysis: Provides U.S. firms with an analysis of 
the most promising target markets overseas for their product/service 
based on analysis of secondary research/data (macroeconomic/commercial 
& trade/risk data).
    13. Trade Show Representation: Provides U.S. companies and economic 
development organizations with the ability to increase their marketing 
exposure at a trade show when they are unable to attend in-person; 
entails conducting pre-trade show promotions via Internet/social media/
email campaign; representing the client at the trade show; displaying 
the client's promotional materials at the trade show; conducting 
outreach to foreign buyers/distributors in attendance at the trade 
show; and providing contact information for each overseas company that 
expressed interest in the client's products/services at the trade show.
    14. Verified Contact List: Provides U.S. firms with a basic contact 
list of up to five to 10 agents, distributors and partners in a foreign 
market. The

[[Page 93662]]

information included in the contact list will have been reviewed and 
verified for accuracy only and no information will be provided on the 
level of interest in the client's products/services.
    15. Webinar: Provides U.S. firms and economic development 
organizations with export knowledge and/or market intelligence from 
experts located around the globe via an online webinar. The webinars 
are archived on export.gov.
    16. Web site Globalization: provides U.S. companies with services 
to enhance the strength of their Web site for the purpose of attracting 
foreign partners/business.

User Fee Discounts

    The US&FCS currently offers various discounts to SMEs, economic 
development organizations and non-profit educational institutions. 
US&FCS proposes to discount services for all small businesses, economic 
development organization and non-profit educational institutions by an 
average of ~70 percent and for all medium-sized enterprises by an 
average of ~30 percent. Under this notice, US&FCS also proposes to 
eliminate the current SME incentive program, which currently offers an 
additional discount for first-time users of US&FCS services.
    Full cost rates and SME discount rates are provided on the next 
page so that the public can comment upon the implications of full and 
SME rates.
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    \1\ Other direct costs not included in the service description 
must be assumed by the client. Types of other direct costs include 
translation, transportation, use of contractors, venue rental, 
catering, etc.
    \2\ Fees listed also apply to Economic Development Organizations 
and Non-profit Educational Institutions
    \3\ Fees listed also apply to Foreign Companies, regardless of 
their size, that use US&FCS services, particularly the Business 
Service Provider listing, to promote themselves to U.S. exporters.

                                                Proposed User Fee Schedule for Export Promotion Services
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                                                                    Current fee \1\                                     Proposed fee \1\
        Service/Event            Average hours  --------------------------------------------------------------------------------------------------------
                                 (per client)        Small \2\          Medium           Large \3\        Small \2\          Medium         Large \3\
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Business Service Provider....  4...............  $300............  $600............  $600............  $150...........  $250...........  $350
                                                 + $50 for         + $50 for         + $50 for         + $50 for        + $50 for        + $50 for
                                                  translation if    translation if    translation if    translation if   translation if   translation if
                                                  needed.           needed.           needed.           needed.          needed.          needed.
Certified Trade Mission        70..............  $28 per staff     $28 per staff     $28 per staff     Full Package:    Full Package:    Full Package:
 (market briefing and/or                          hour.             hour.             hour.             $1,200.          $2,800.          $4,000.
 networking reception and/or                     + any direct      + any direct      + any direct      Networking       Networking       Networking
 Gold Key Service--GKS).                          costs.            costs.            costs.            Reception and    Reception and    Reception and
                                                                                                        GKS: $1,100.     GKS: $2,700.     GKS: $3,900.
                                                                                                       Market Briefing  Market Briefing  Market Briefing
                                                                                                        and GKS:         and GKS:         and GKS:
                                                                                                        $1,000.          $2,400.          $3,500.
                                                                                                       Market Briefing  Market Briefing  Market Briefing
                                                                                                        and Networking   and Networking   and Networking
                                                                                                        Reception:       Reception:       Reception:
                                                                                                        $250.            $500.            $600.
                                                                                                       + any direct     + any direct     + any direct
                                                                                                        costs.           costs.           costs.
Featured U.S. Exporter         8...............  $150............  $300............  $300............  $150...........  $350...........  $500.
 listing (5 markets).                            + $50 for         + $50 for         + $50 for         + $50 for        + $50 for        + $50 for
                                                  translation if    translation if    translation if    translation if   translation if   translation if
                                                  needed.           needed.           needed.           needed.          needed.          needed.
Gold Key Service.............  62..............  $700............  $2,300..........  $2,300..........  $950...........  $2,300.........  $3,400.
                                                 + $350 for 2nd    + $1,000 for 2nd  + $1,000 for 2nd  + $350 for 2nd   + $1,000 for     + $1,200 for
                                                  day.              day.              day.              day.             2nd day.         2nd day.
Initial Market Check.........  20..............  $450............  $1,280..........  $1,280..........  $450...........  $1,000.........  $1,300.
International Company          31..............  $600............  $900............  $900............  $700...........  $1,200.........  $2,000.
 Profile--Full.
International Company          12..............  N/A.............  N/A.............  N/A.............  $350...........  $850...........  $1,100.
 Profile--Partial.
International Partner Search.  40..............  $550............  $1,400..........  $1,400..........  $750...........  $1,400.........  $2,800.
International Partner Search   45..............  N/A.............  N/A.............  N/A.............  $900...........  $1,750.........  $3,250.
 + Virtual Introductions.
Other Customized Services and  N/A.............  $28 per staff     $80 per staff     $80 per staff     $30 per staff    $70 per staff    $90 per staff
 Events.                                          hour.             hour.             hour.             hour.            hour.            hour
                                                 + any direct      + any direct      + any direct      + any direct     + any direct     + any direct
                                                  costs.            costs.            costs.            costs.           costs.           costs.
Single Company Promotion.....  Events requires   $28 per staff     $80 per staff     $80 per staff     20 to 40 hours   20 to 40 hours   20 to 40 hours
                                20 to 40; 40 to   hour.             hour.             hour.             of staff time:   of staff time:   of staff time:
                                80; or 80 to     + any direct      + any direct      + any direct       $800.            $1,800.          $2,600.
                                110.              costs.            costs.            costs.           40 to 80 hours   40 to 80 hours   40 to 80 hours
                                                                                                        of staff time:   of staff time:   of staff time:
                                                                                                        $1,500.          $2,000.          $4,500.
                                                                                                       80 to 110 hours  80 to 110 hours  80 to 110 hours
                                                                                                        of staff time:   of staff time:   of staff time:
                                                                                                        $2,600.          $4,800.          $6,300.
                                                                                                       + any direct     + any direct     + any direct
                                                                                                        costs..          costs..          costs.
Target Market Analysis.......  5...............  N/A.............  N/A.............  N/A.............  $150...........  $350...........  $500.
Trade Show Representation....  12..............  N/A.............  N/A.............  N/A.............  $400...........  $950...........  $1,350.
Verified Contact List........  5...............  N/A.............  N/A.............  N/A.............  $150...........  $350...........  $450.

[[Page 93663]]

 
Webinar......................  2...............  $28 per staff     $28 per staff     $28 per staff     $25 per webinar  $25 per webinar  $25 per webinar
                                                  hour.             hour.             hour.             hour.            hour.            hour.
Website Globalization........  4...............  N/A.............  N/A.............  N/A.............  $100...........  $300...........  $400.
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    \4\ Other direct costs not included in the service description 
must be covered by the client in the form of additional user fees. 
Types of other direct costs include translation, transportation, use 
of contractors, venue rental, catering, etc.

                          Proposed User Fee Schedule for Investment Promotion Services
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                                                                 Current fee for      Proposed fee for economic
              Service                  Average hours (per     economic development    development organizations
                                             client)            organizations \4\                \4\
----------------------------------------------------------------------------------------------------------------
Certified Investment Mission         70....................  $28 per staff hour....  Full Package: $1,200.
 (market briefing, networking                                + any direct costs....  Networking Reception and
 reception and Gold Key Service).                                                     GKS: $1,100.
                                                                                     Market Briefing and GKS:
                                                                                      $1,000.
                                                                                     Market Briefing and
                                                                                      Networking Reception:
                                                                                      $250.
                                                                                     + any direct costs.
Gold Key Service...................  62....................  $700..................  $950
                                                             + $350 for 2nd day....  + $350 for 2nd day.
International Company Profile--Full  31....................  $600..................  $700.
International Company Profile--      12....................  N/A...................  $350.
 Partial.
Other Customized Services/Events...  N/A...................  $28 per staff hour....  $30 per staff hour
                                                             + any direct costs....  + any direct costs.
Single Location Promotion..........  20 to 40; 40 to 80; or  $28 per staff hour....  20-40 hours of staff time:
                                      80 to 110.             + any direct costs....   $800.
                                                                                     40-80 hours of staff time:
                                                                                      $1,500.
                                                                                     80-110 hours of staff time:
                                                                                      $2,000.
                                                                                     + any direct costs.
----------------------------------------------------------------------------------------------------------------

    Notes:
     Business Service Provider: Fee is for up to 5 categories. 
To be listed in more than 5 categories, there is an additional fee per 
category of $60 for large companies, $40 for medium-sized enterprises 
and $30 for small businesses.
     Certified Trade Mission: The fee is assessed on a per 
Post/city basis. Applicants will be charged a fee for an Initial Market 
Check if US&FCS staff is uncertain about their market potential. The 
fee paid by the applicant will then be applied to their Certified Trade 
Mission fee if they participate in the mission.
     Featured U.S. Exporter: Listings are typically provided 
for up to 5 markets; however, they can be provided for an individual 
market for $100 for large companies, $40 for medium-sized enterprises 
and $30 for small businesses.
     Initial Market Check: Will be a required precursor to more 
time intensive services if US&FCS staff is uncertain about a client's 
market potential. Fees paid for the Initial Market Check will then be 
applied to any follow-on service if the results are positive. The fee 
is assessed on a per country basis.
     International Company Profile--Partial: Does not include a 
site visit.
     Webinars will be archived and made available to the 
general public, so the requirement to cover US&FCS's costs does not 
apply; however, a minimal fee is proposed to help ensure the 
suitability of participants and cover the cost of any special benefit 
that may derive from attending in real-time, such as question and 
answer opportunities. Uniform pricing is proposed as the enforcement of 
pricing by size standards of each registrant would create an 
administrative burden. Some webinars will be provided at no charge when 
the purpose is primarily to promote US&FCS or other United States 
Government events, activities, etc.

Determining the Cost of Performing Each Service

    The cost of service methodology developed by US&FCS was designed to 
bring the organization closer to full cost recovery guidance set forth 
in OMB Circular A-25. To set user fees that are ``self-sustaining,'' 
the US&FCS had to determine the true cost of providing various export 
and investment promotion services.
    Federal Accounting Standards permit US&FCS to use an activity-based 
costing model to determine the true cost of services listed in the 
proposed User Fee Schedule. The activities were defined in accordance 
with the US&FCS list of services offered by US&FCS, including both 
standard and customized services.
    As part of the cost of service study, the US&FCS conducted a 
workload survey to obtain a more accurate estimate of the true cost for 
delivery of specific services. The workload survey was designed and 
distributed to all US&FCS international and domestic field units. The 
data submitted by various US&FCS field units was then aggregated to 
determine the global average of workload for each standard or 
customized service. Using FY2015 US&FCS budget data, fringe benefits 
and non-labor related costs (e.g., materials, supplies, rent, 
utilities, and equipment) were prorated to determine the burdening rate 
that was to be added to the hourly rate. This resulted in an hourly 
rate that accounts for all applicable labor and non-labor costs

[[Page 93664]]

specifically related to the delivery of services, which is consistent 
with federal accounting standards.

Conclusion

    Based on the information provided above, the US&FCS believes its 
proposed fees are consistent with both the mission of US&FCS to promote 
``exports of goods and services from the United States, particularly by 
small businesses and medium-sized businesses,'' and the objective of 
OMB Circular A-25 to ``promote efficient allocation of the nation's 
resources by establishing charges for special benefits provided to the 
recipient that are at least as great as the cost to the U.S. Government 
of providing the special benefits.''

Frank Spector,
Senior Advisor, Office of Trade Promotion Programs.
[FR Doc. 2016-30423 Filed 12-20-16; 8:45 am]
 BILLING CODE 3510-FP-P