[Federal Register Volume 86, Number 206 (Thursday, October 28, 2021)]
[Rules and Regulations]
[Pages 59613-59615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23449]



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DEPARTMENT OF STATE

22 CFR Part 22

[Public Notice: 11465]
RIN 1400-AE15


Schedule of Fees for Consular Services--Passport Security 
Surcharge

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: This rule adopts as final the notice of proposed rulemaking 
(NPRM) published in the Federal Register on March 26, 2021. This final 
rule adjusts the Schedule of Fees for Consular Services (Schedule of 
Fees) by increasing the passport book security surcharge (PSS) from $60 
to $80. This increase reflects increases in security-related costs for 
processing passports attributed to the PSS. Increases in security-
related costs are largely due to a 37 percent increase in compensation 
costs for passport adjudicators and enhanced printing technology costs 
for the Next Generation (NextGen) passport book. Based on FY 2022 
projections of 15.9 million passport products for which the PSS is 
included as part of the overall fee (passport books, and passport books 
and card combinations), the Department anticipates an additional $318 
million in revenue. The Department retains all PSS revenue, and it is 
used to cover the costs associated with passport application processing 
that support enhanced border security. The adjustment will result in a 
more accurate alignment of the fees for consular services to the costs 
of providing the services.

DATES: This final rule is effective on December 27, 2021.

FOR FURTHER INFORMATION CONTACT: Johanna Cruz, Management Analyst, 
Office of the Comptroller, Bureau of Consular Affairs, Department of 
State; phone: 202-485-8915, telefax: 202-485-6826; email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    This final rule adjusts the Schedule of Fees for Consular Services 
(Schedule of Fees) by increasing the PSS from $60 to $80. The 
Department of State (Department) published a NPRM on March 26, 2021 (86 
FR 16149), with 60 days provided for public comment. This rule 
addresses the two comments received by the Department. Justification 
for this rulemaking and PSS change, including relevant authorities and 
information on the study used to calculate this surcharge, can be found 
in the NPRM.

Analysis of Comments

    As noted above, the Department received two comments in response to 
the NPRM. One commenter requested to view the entire activity 
dictionary, or at least the list of activities before and after it was 
streamlined. The commenter suggested that this comparison would allow 
the public to understand what tasks changed and how those changes led 
to the fee increase. As explained in the NPRM, the activity dictionary 
changes focused on standardizing and clarifying tasks, ultimately 
improving accuracy in cost assignments. These changes resulted in more 
security-related costs being attributed to the PSS, since this 
methodology update determined more precisely which passport activities 
are security-related and assigned them accordingly. For example, the 
new dictionary has an activity called ``Adjudicate,'' which combines 
several of the previous model's sub-activities (or tasks) like 
``process and adjudicate first-time passport applications for Minors 
(DS-11),'' ``process and adjudicate passport renewal applications (DS-
82),'' and ``process EPDP [emergency photo digital passport] 
passports.'' The Department found that these sub-activities could be 
consolidated, because they require the same amount of effort and 
resources and follow the same process steps. The consolidated 
activities help reduce possibilities for over-, mis-, or under-
attribution of costs to the sub-activity level. By consolidating the 
sub-activities, the model more accurately reflects the activities 
required to accept, adjudicate, and issue passports and better assigns 
costs more consistently to those activities. It is important to note, 
however, that the activity dictionary update is not the main driver 
that led to the proposed increase in the PSS. The Department has 
experienced a steady increase each year in costs associated with 
passport application processing that support enhanced border security 
since the last adjustment to the PSS. As detailed in the NPRM, the 
increases in security-related costs are largely due to an increase in 
compensation costs for passport adjudicators (an approximately $8.00 
per unit increase), passport books (a $7.00 per unit increase), and 
enhanced printing technology costs for the more secure Next Generation 
(NextGen) passport books that include state-of-the-art anti-
counterfeiting improvements (a $3.45 per unit increase). Other less 
significant increases and decreases in the many other cost categories 
comprise the small remainder of the $20.00 cost increase.
    A second comment, which was duplicated three times, suggested that 
the fee increase is too high and that every taxpayer should receive no-
fee services as tax dollars should fund this activity. While the 
Department is sympathetic to the impact the fee increase may have on 
those who seek this service, the Department generally sets consular 
fees at an amount calculated to achieve full cost recovery for the U.S. 
Government of providing the consular service, consistent with its 
statutory authorities and guidance from the Office of Management and 
Budget (OMB). As set forth in OMB Circular A-25, as a general policy, 
each identifiable recipient should pay a user charge for government 
services, resources, or goods from which he or she derives a special 
benefit, at an amount sufficient for the U.S. Government to recover the 
full costs of providing the service, resource, or good. See OMB 
Circular No. A-25, sec. 6(a)(1), (a)(2)(a). Similarly, the Government 
Accountability Office's Federal User Fees Guide (https://www.gao.gov/products/gao-08-386sp) states that ``user fees can be designed to 
reduce the burden on taxpayers to finance the portions of activities 
that provide benefits to identifiable users above and beyond what is 
normally provided to the public. By charging the costs of those 
programs or activities to beneficiaries, user fees can also promote 
economic efficiency and equity.''
    Fees collected for passport processing and retained by the 
Department are the main source of operational funding for the Passport 
office, which typically does not rely on taxpayer or appropriated 
funding to support its operations. Passport fees are set based on the 
costs the Department incurs in processing passports and charged only to 
individuals applying for a passport. While the PSS is proposed to 
increase 33 percent, it is only one component of the overall adult 
passport book fee. The PSS increase will result in an increase from 
$110 to $130 in the overall passport book application fee for adults 
seeking a renewal (DS-82), which is an 18 percent increase overall, or 
a 1.8 percent increase each year during the 10-year validity of an 
adult passport book. This increase to the PSS is necessary to assist 
the Department in its effort to continue to support services, such as 
passport services, that benefit only identifiable recipients instead of 
the general public. These services are funded primarily with fee 
collections instead of taxpayer dollars/appropriations.

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Conclusion

    The Department will adjust the PSS in light of the Cost of Service 
Model's findings that the U.S. government is not recovering fully its 
costs related to enhanced border security for passport services. 
Consistent with OMB guidance, the Department endeavors to recover 
through user fees the cost of services that provide special benefits to 
an identifiable recipient beyond those that accrue to the general 
public. See OMB Circular A-25, sec. 6(a)(1), (a)(2)(a). For this 
reason, the Department will adjust the Schedule of Fees.

Regulatory Findings

Administrative Procedure Act

    The Department published this rulemaking as a proposed rule and 
provided 60 days for public comment. It will be effective 60 days after 
publication, in accordance with 5 U.S.C. 553(d).

Regulatory Flexibility Act

    The Department has reviewed this rule and, by approving it, 
certifies that it will not have a significant economic impact on a 
substantial number of small entities as defined in 5 U.S.C. 601(6).

Unfunded Mandates Act of 1995

    This rule is not expected to result in the expenditure by state, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any year, and it will not 
significantly or uniquely affect small governments. Therefore, no 
actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995, 2 U.S.C. 1501-1504.

Congressional Review Act

    This rule is a major rule as defined by 5 U.S.C. 804(2).

Executive Orders 12866 and 13563

    The Department has reviewed this rule to ensure its consistency 
with the regulatory philosophy and principles set forth in the 
Executive Orders. OMB has determined that this rule is economically 
significant under Executive Order 12866.
    The final rule is necessary in light of the Department of State's 
Cost of Service Model's findings that costs associated with passport 
application processing that support enhanced border security have 
increased significantly since the last update to the PSS and justify 
this adjustment through the rulemaking process. See Public Law 109-472, 
section 6, 120 Stat. 3555, reproduced at 8 U.S.C. 1714 (note) 
(requiring that the amount of the surcharge be reasonably related to 
the costs of providing the service).
    The following table summarizes the impact of this final rule:

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                                                                                                                 Estimated annual    Estimated change in
                            Item No.                                 Fee     Current   Change     Percentage         number of           annual fees
                                                                               fee     in fee      increase      applications \1\       collected \2\
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                                                         Schedule of Fees For Consular Services
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                                                                      * * * * * * *
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                                                            Passport and Citizenship Services
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2. Passport Book Application Services for: (g) Passport book           $80       $60       $20           33.33    FY22: 15,900,000    FY22: $318,000,000
 security surcharge (enhanced border security fee)..............
                                                                 ---------------------------------------------------------------------------------------
    Total.......................................................        80        60        20           33.33          15,900,000           318,000,000
 
                                                                      * * * * * * *
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\1\ Projected passport workload is FY 2022 receipts projected by the PPT directorate as of July 2021.
\2\ The Department of State retains this fee.
\3\ The Department anticipates implementing this fee change in FY 2022. FY 2022 volumes are used to project fee collection totals.

    As noted in the NPRM, the Department of State does not anticipate 
that demand for passport services will change significantly as a result 
of this rule. The price of a passport book or card will remain minor in 
comparison with other costs associated with foreign travel. As a 
result, the Department does not believe passport demand will be 
significantly affected by the new fee. This is especially true because 
an adult passport book is valid for 10 years, and a minor passport book 
is valid for 5 years or until the applicant turns 18. As a result, the 
cost to the applicant of the PSS increase is spread over the lifetime 
of the passport book use.

Executive Order 12372 and 13132

    This regulation will not have substantial direct effects on the 
states, on the relationship between the National Government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement. The 
regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this regulation.

Executive Order 13175

    The Department has determined that this rulemaking will not have 
tribal implications, will not impose substantial direct compliance 
costs on Indian tribal governments, and will not preempt tribal law. 
Accordingly, the requirements of Executive Order 13175 do not apply to 
this rulemaking.

Paperwork Reduction Act

    This rule does not impose any new reporting or record-keeping 
requirements subject to the Paperwork Reduction Act.

List of Subjects in 22 CFR Part 22

    Consular services, Fees.

    Accordingly, for the reasons stated in the preamble, 22 CFR part 22 
is amended as follows:

PART 22--SCHEDULE OF FEES FOR CONSULAR SERVICES--DEPARTMENT OF 
STATE AND FOREIGN SERVICE

0
1. Revise the authority citation for part 22 to read as follows:

    Authority:  8 U.S.C. 1101 note, 1153 note, 1157 note, 1183a 
note, 1184(c)(12), 1201(c), 1351, 1351 note, 1713, 1714, 1714 note; 
10 U.S.C. 2602(c); 22 U.S.C. 214, 214 note, 1475e, 2504(h), 2651a, 
4206, 4215, 4219, 6551; 31 U.S.C. 9701; E.O. 10718, 22 FR 4632, 3 
CFR, 1954-1958 Comp., p. 382; E.O.

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11295, 31 FR 10603, 3 CFR, 1966-1970 Comp., p. 570.


0
2. In Sec.  22.1, amend the table by revising entry 2(g) under the 
heading ``Passport and Citizenship Services'' to read as follows:


Sec.  22.1   Schedule of fees.

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                 Schedule of Fees for Consular Services
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                          Item No.                                Fee
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                 Schedule of Fees for Consular Services
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                    Passport and Citizenship Services
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                              * * * * * * *
2. Passport Book Application Services for:
 
                              * * * * * * *
    (g) Passport book security surcharge (enhanced border           $80
     security fee)..........................................
 
                              * * * * * * *
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Rena Bitter,
Assistant Secretary for Consular Affairs, Department of State.
[FR Doc. 2021-23449 Filed 10-27-21; 8:45 am]
BILLING CODE 4710-06-P