[Federal Register Volume 88, Number 154 (Friday, August 11, 2023)]
[Proposed Rules]
[Pages 54796-54827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17045]



[[Page 54795]]

Vol. 88

Friday,

No. 154

August 11, 2023

Part III





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; Proposed 
Rules

  Federal Register / Vol. 88, No. 154 / Friday, August 11, 2023 / 
Proposed Rules  

[[Page 54796]]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 354

[Docket No. APHIS-2022-0023]
RIN 0579-AE71


User Fees for Agricultural Quarantine and Inspection Services

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: We are proposing to update and amend the user fee regulations 
associated with the agricultural quarantine and inspection (AQI) 
program. Specifically, we propose to adjust the fees for certain AQI 
services that are provided in connection with certain commercial 
vessels, commercial trucks, commercial railroad cars, commercial 
aircraft, and international passengers arriving at ports in the customs 
territory of the United States; adjust the caps on prepaid fees 
associated with commercial trucks and commercial railroad cars; remove 
certain fee exemptions that are no longer justifiable based upon 
pathway analyses of risk; and restructure the treatment monitoring fee. 
We would also revise requirements pertaining to remittances and 
statements. Specifically, we would require monthly rather than 
quarterly remittances for the commercial aircraft fee, international 
air passenger fee, and international cruise passenger fee to make our 
revenue stream more stable, clarify our requirements, and provide for 
electronic payments and statements. We would also include in the 
regulations information on agents responsible for ensuring compliance 
with paying the user fees and the requirement for entities to notify 
APHIS in the event they have a change in personnel responsible for fee 
payments. These proposed changes are necessary to recover the costs of 
the current level of AQI activity, to account for actual and projected 
increases in the cost of doing business, to increase fee payer 
accountability, and to more accurately align fees with the costs 
associated with each fee service.

DATES: We will consider all comments that we receive on or before 
October 10, 2023.

ADDRESSES: You may submit comments by either of the following methods:
     Federal eRulemaking Portal: Go to www.regulations.gov. 
Enter APHIS-2022-0023 in the Search field. Select the Documents tab, 
then select the Comment button in the list of documents.
     Postal Mail/Commercial Delivery: Send your comment to 
Docket No. APHIS-2022-0023, Regulatory Analysis and Development, PPD, 
APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-
1238.
    Supporting documents and any comments we receive on this docket may 
be viewed at Regulations.gov in our reading room, which is located in 
room 1620 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) 799-7039 before coming.

FOR FURTHER INFORMATION CONTACT: Mr. George Balady, Senior Regulatory 
Policy Specialist, PPQ, APHIS, 4700 River Road Unit 36, Riverdale, MD 
20737; (301) 851-2338; [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

 Legal Authority and Overview of Program Activities
 Need for the Proposed Rule
 Updates to the ABC Model and Cost Calculations
 Court Ruling on Reserve Surcharge
 Proposed User Fee Amounts and Justifications
 Proposed Regulatory Changes
    [cir] Revisions to Regulatory Definitions
    [cir] Commercial Vessels
    [cir] Commercial Trucks
    [cir] Commercial Railroad Cars
    [cir] Commercial Aircraft
    [cir] International Passengers Arriving at Airports and Seaports
    [cir] AQI Treatment Monitoring
    [ssquf] Change From a per-Treatment Basis to an Hourly Basis
    [ssquf] Applying the Treatment Monitoring Fee to All Treatment 
Types and Treatment-Related Activities
    [ssquf] Applying Overtime to Treatment Monitoring Performed Outside 
of Regular Business Hours
    [ssquf] Changes to Treatment Monitoring Fee Designation of 
Responsible Parties and Remittance Procedures
 Technical amendments
 Records Retention
 Severability
 Executive Orders 12866 and 13563, and Regulatory Flexibility 
Act
    [cir] Air Passengers
    [cir] Commercial Aircraft
    [cir] Small aircraft Exemption
    [cir] Commercial Cargo Vessel
    [cir] Canadian Barge Exemption
    [cir] Commercial Truck
    [cir] Commercial Cargo Railroad Car
    [cir] Cruise Vessel Passenger
    [cir] Treatment Monitoring
 Executive Order 12988
 Executive Order 13175
 Paperwork Reduction Act
 E-Government Act Compliance

Legal Authority and Overview of Program Activities

Background

    Section 2509(a) of the Food, Agriculture, Conservation, and Trade 
(FACT) Act of 1990 (21 U.S.C. 136a) authorizes the Animal and Plant 
Health Inspection Service (APHIS) to prescribe and collect user fees 
for agricultural quarantine and inspection (AQI) services. Congress 
amended the FACT Act 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 certain commercial vessels, 
commercial trucks, commercial railroad cars, commercial aircraft, and 
international passengers. According to the FACT Act, as amended, these 
user fees should be ``sufficient'' ``to cover the cost of'':
     Providing AQI services ``in connection with the arrival at 
a port in the customs territory of the United States'' of the 
conveyances and the passengers listed above;
     Providing ``preclearance or preinspection at a site 
outside the customs territory of the United States'' to the conveyances 
and the passengers listed above; and
    Administering 21 U.S.C. 136a, concerning the ``collection of fees 
for inspection services.''
    In addition, the FACT Act, as amended, contains the following 
requirements:
     The amount of the fees shall be ``commensurate with the 
costs of [AQI] services with respect to the class of persons or 
entities paying the fees.''
     The cost of AQI services ``with respect to passengers as a 
class'' shall ``include the cost of related inspections of the aircraft 
or other vehicle.''
    The user fees for the AQI activities described above are contained 
in 7 CFR 354.3, ``User fees for certain international services.'' 
APHIS' regulations regarding user fees relating to imports and exports, 
as well as overtime services, are found in 7 CFR part 354.
    AQI services funded by these user fees and covered in the 
regulations in part 354 include inspections of arriving commercial 
maritime vessels, commercial trucks, commercial railroad

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cars, commercial aircraft, international air passengers, and 
international sea (cruise) passengers; as well as monitoring 
phytosanitary treatment and treatment-related activities. Services 
related to conveyances and cargo include issuance of import permits, 
review of manifests and other documentation, as well as inspections of 
the cargo, conveyances, and packaging material for prohibited imports 
and contaminants, pests, or invasive species. Passenger services 
include prescreening and inspection of passenger baggage and personal 
belongings for prohibited agricultural imports. We also charge a user 
fee for monitoring prescribed treatments that are performed on some 
agricultural goods as a condition of entry or when a pest of quarantine 
significance (i.e., a plant pest that should not be allowed to be 
introduced into or disseminated within the United States) is detected 
during a port-of-entry inspection.
    APHIS and the Department of Homeland Security's (DHS) U.S. Customs 
and Border Protection (CBP) work together to carry out these AQI 
program activities and thereby protect U.S. agriculture and natural 
resources by intercepting foreign animal and plant pests and diseases 
(such as African swine fever or ASF, foot and mouth disease, exotic 
fruit flies, and Ralstonia race 3 biovar 2) before they can enter the 
country. APHIS and CBP perform different functions that complement each 
other. For example, CBP's AQI activities include inspecting passengers, 
passenger baggage, personal belongings, conveyances, shipments, and 
monitoring regulatory compliance at United States ports of entry; CBP 
also preclears passengers at certain ports of departure outside the 
United States. APHIS performs pest identification for shipments across 
all modes (air cargo, maritime cargo, truck cargo, etc.), inspection of 
plants for planting shipments, and monitoring of phytosanitary 
treatments and related activities. CBP's agricultural inspection and 
safeguarding activities generate the majority of AQI costs covered by 
the fees, approximately 70 percent of program costs per year. Pursuant 
to Sec.  354.3, APHIS collects AQI user fees for commercial railroad 
cars, commercial aircraft, international air and cruise (sea) 
passengers, and treatment monitoring directly. Also pursuant to Sec.  
354.3, CBP collects AQI user fees for commercial vessels, commercial 
trucks, and commercial truck transponders on APHIS' behalf, and then 
transfers the funds to APHIS. APHIS periodically transfers that portion 
of the funds allocated for CBP in accordance with Sec.  421 of the 
Homeland Security Act of 2002 (6 U.S.C. 231 and the Memorandum of 
Agreement effectuating the transfer of functions.\1\)
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    \1\ The Memorandum of Agreement can be viewed on the APHIS 
website at https://www.aphis.usda.gov/aphis/ourfocus/planthealth/import-information/moa.
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    Inspection of commercial aircraft and their passengers account for 
the preponderance of fees remitted. In fiscal year (FY) 2017 to FY 
2019, commercial aircraft collections averaged over 23 percent of total 
collections annually, or nearly $188M. Also, from FY 2017 to FY 2019, 
commercial aircraft passenger collections averaged over 61 percent of 
total collections annually, or nearly $486M. Collections from the air 
sector (commercial aircraft and commercial air passenger) are a 
combined annual average of over 85 percent of total AQI collections. If 
this rule is adopted as proposed, APHIS estimates that by FY 2028 the 
combined air sector would account for approximately 68 percent of total 
collections, assuming future arrivals match average arrivals for FY 
2017 through FY 2019. (For this reason, we propose a change in air 
collections to be monthly rather than quarterly, as discussed below.)

Need for the Proposed Rule

    In a final rule published in the Federal Register on October 29, 
2015 (80 FR 66748-66779, Docket No. APHIS-2013-0021),\2\ we updated and 
amended the user fee regulations in Sec.  354.3 to improve AQI service 
cost recovery and to more accurately align fees with the costs 
associated with each fee service. Significant changes included the 
following:
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    \2\ To view the final rule, go to www.regulations.gov and enter 
APHIS-2013-0021 in the Search field.
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     Adding new fee categories for international cruise 
passengers and monitoring of phytosanitary treatments;
     Adjusting existing fees charged for certain agricultural 
quarantine and inspection services that are provided in connection with 
certain commercial vessels, commercial trucks, commercial railroad 
cars, commercial aircraft, and international air passengers arriving at 
ports in the customs territory of the United States; and
     Adjusting the user fee cap associated with commercial 
trucks and adjusting or removing the user fee cap associated with 
commercial railroad cars.
    For FYs 2017 through 2019, the AQI program ran an average deficit 
of over $166 million annually. For a number of reasons, as discussed 
below, the fees established in the 2015 rulemaking, which were based on 
cost data from FY 2010 through FY 2012, no longer reflect actual 
program costs. This proposed rule uses cost data from FY 2017 through 
FY 2019 because these years reflect costs from the most recent period 
of normal (pre-pandemic) operations, and most closely approximate the 
costs in a return to normal operations (post-pandemic) AQI program 
environment.
    For the 2015 rulemaking, APHIS used an Activity-Based Costing (ABC) 
Model to analyze the costs associated with the program. ABC is a cost 
accounting method used to calculate the total costs of a service or 
product. It differs from Financial Accounting, which is the preparation 
of financial reports for stakeholders or users who are interested in 
the financial position of an agency or program. ABC translates costs 
from ``what we pay for'' to ``what we do.'' This process entails 
assigning both direct and indirect costs to an activity (such as 
managing the import permitting process), associating those activities 
with outputs (such as a Maritime Cargo Inspection), and using the cost 
of outputs to calculate fee levels (such as the Commercial Vessel Fee) 
for specific user classes.
    In developing this proposed rule, we re-examined the ABC Model cost 
allocations to ensure costs accurately reflect workload. We ensured 
that all costs flow through the model, that the relationships between 
objects in the model were accurate, and that the allocation of costs 
followed standard cost accounting methodologies. The re-examination 
also revealed that the 2015 model is not forward looking; that is, it 
does not factor in costs required to address new program and staffing 
needs. Emerging issues that are not accounted for in the 2015 model 
include the need for additional inspection resources at ports of entry 
to mitigate emerging risks,\3\ such as ASF at airports, the expanding 
demand for treatment monitoring services, such as monitoring

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the restacking of cargo in overloaded cargo containers, and capital 
planning. In developing the model for this proposed rule, the 2023 
full-time equivalent (FTE) model, APHIS incorporated cost objects for 
additional staffing to address these workload increases, and additional 
program costs related to capital planning: New and upgraded facilities, 
new equipment, and outreach. This proposed rule would adjust AQI user 
fees to reflect the updates and additions to the cost model including 
updated cost data, changes in cost allocation methodology, additional 
personnel to address emerging risks, and capital planning costs.
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    \3\ For example, on July 28, 2021, the Dominican Republic 
informed APHIS that samples obtained from swine in the country had 
tested positive for ASF, a highly contagious disease of wild and 
domestic swine that can spread rapidly in swine populations with 
extremely high rates of morbidity and mortality. Subsequently, on 
September 20 of that year, the Chief Veterinary Officer in Haiti 
reported a positive case of ASF to the World Organization for Animal 
Health (WOAH). Because of Hispaniola's proximity to Puerto Rico and 
the U.S. Virgin Islands, and the frequency of trade in pork and pork 
products between Hispaniola and these territories, APHIS enhanced 
monitoring and surveillance activities for ASF in Puerto Rico and 
the U.S. Virgin Islands as a result of these detections, and 
submitted a dossier to WOAH to finalize a new ASF protection zone in 
Puerto Rico and the U.S. Virgin Islands.
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    Further, due to its retrospective nature, ABC modeling fails to 
account adequately for inflation unless inflation factors are applied 
to it. For example, the 2015 rulemaking used source data from FY 2010 
through FY 2012 adjusted to FY 2016 dollars [80 FR 66753]; however, no 
adjustment was made for inflation beyond the beginning of FY 2016 
(October 2015). As a result, the 2015 fee rates using FY 2016 dollars 
are still in effect after 7 years (FY 2023), meaning, as of September 
2022 (the end of FY 2022 for APHIS), the fees are approximately 24.79 
percent \4\ below the levels necessary to meet today's costs based on 
inflation alone. As discussed in the regulatory impact analysis (RIA) 
accompanying this proposed rule,\5\ we determined that costs would be 
more accurately recovered if the ABC Model cost data were adjusted for 
inflation based on the Chained Consumer Price Index for all Urban 
Consumers (C-CPI-U).
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    \4\ https://www.bls.gov/data/inflation_calculator.htm using the 
period October 2015 to September 2022.
    \5\ To view these and other supporting documents, go to 
www.regulations.gov and enter APHIS-2022-0023 in the Search field.
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    Our ability to recover the full costs of administering the AQI 
program has also been limited by exemptions and fee caps. Under the 
existing regulations, commercial aircraft with 64 or fewer seats 
meeting certain conditions have been exempted from the fees listed in 
Sec.  354.3(e), and barges operating between the United States and 
Canada meeting certain conditions have been exempted from those listed 
in Sec.  354.3(b). The original basis for both of these exemptions, as 
discussed in earlier rulemakings, was that they posed little or no 
sanitary/phytosanitary risk, and therefore did not require inspection 
and would not incur costs to the program (see 58 FR 14305-14307, Docket 
No. 92-088-2 \6\ and 75 FR 10634-10644, Docket No. APHIS-2006-0096 
\7\). However, recent findings from two APHIS pathway analyses 
(``Pathway Analysis for Commercial Aircraft with 64 or Fewer Seats'' 
and ``Pathway Analysis for Barges from Canada''),\8\ indicate that 
today commercial aircraft with 64 or fewer seats do serve as a pathway 
for the introduction of quarantine pests, and that barges from Canada 
that meet the current user fee exemption do not pose less of a 
phytosanitary risk than barges travelling from other countries or other 
vessel types travelling from Canada. The analyses accordingly conclude 
that both such aircrafts and such barges merit inspection that incurs 
AQI program costs. We discuss the analyses at greater length later in 
this document, under the headings ``Commercial Aircraft'' and 
``Commercial Vessels.''
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    \6\ FR-1993-03-17.pdf (govinfo.gov), published in the Federal 
Register on May 24, 1995.
    \7\ To view the rule, the supporting documents, and the comments 
we received, go to www.regulations.gov and enter APHIS-2006-0096 in 
the Search field.
    \8\ These analyses are available with this proposed rule. See 
footnote 5 for instructions on how to view these and other 
supporting documents on Regulations.gov.
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    Fee caps for commercial trucks and railroad car user fees have also 
limited our ability to cover costs. Under current Sec.  354.3(c)(3)(i) 
and (d)(3)(i), respectively, operators of commercial trucks and 
commercial railroad cars have the option to prepay AQI user fees for a 
calendar year. A prepayment equivalent to 40 times an individual 
crossing allows a commercial truck to make an unlimited number of 
crossings in a calendar year. For commercial railroad cars, the 
prepayment amount for unlimited crossings in a calendar year is capped 
at 20 times the fee for an individual crossing. We have determined that 
these prepayment multiples should be increased, as they are no longer 
sufficient to recover program costs and fail to account for increased 
usage of transponders and prepayment options.\9\ This determination is 
discussed at length below, under the section heading labeled 
``Commercial Trucks.''
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    \9\ See supporting document ``Analysis of AQI User Fees: Truck 
Transponder and Prepaid Railroad Car Multiples Using Fee Collections 
and Arrival Data.'' See footnote 5 for instructions on how to view 
this and other supporting documents on Regulations.gov.
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    Without adequate funding, the AQI program is likely to fail to keep 
pace with growing demand and become less effective, leading to more 
frequent and severe agricultural pest and disease outbreaks in the 
United States. Such outbreaks can be costly. To cite one example, APHIS 
has spent more than $1.3 billion on the eradication and quarantine of 
wood, tree, and forest pests such as Asian Longhorn Beetle, Emerald Ash 
Borer, and Spotted Lantern Fly to protect U.S. forests and the U.S. 
forest products industry valued at more than $350 billion in 
manufacturing production annually.\10\ Additionally, such outbreaks may 
cause declines in U.S. domestic production of agricultural products 
(according to the Census of Agriculture 2017, the market value of U.S. 
agricultural products sold was $388.5 billion \11\) and harm natural 
resources. Trading partners may question the sanitary/phytosanitary 
integrity of U.S. agricultural products, which would either reduce the 
demand for or value of U.S. agricultural exports, which were valued at 
$196.4 billion in fiscal year 2022.\12\ Further, inadequate funding 
would prevent the AQI program from being able to adapt to meet emerging 
program needs as discussed above, resulting in additional challenges in 
effectively clearing cargo and passengers and mitigating the risk of 
costly pest and disease outbreaks impacting U.S. agricultural 
production and exports, and natural resources. The AQI program makes 
the safe importation of agricultural commodities possible. Such imports 
accounted for $194.0 billion in economic activity in FY 2021.\13\
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    \10\ https://www.afandpa.org/statistics-resources/our-economic-impact.
    \11\ https://www.nass.usda.gov/Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf, pg. 17.
    \12\ https://www.ers.usda.gov/webdocs/outlooks/105919/aes-123.pdf?v=5132.7.
    \13\ Ibid.
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    We are therefore proposing to update and amend the user fee 
regulations to align the fees with the current needs of the AQI 
program. Specifically, we propose to adjust the fees for certain AQI 
services that are provided in connection with certain commercial 
vessels, commercial trucks, commercial railroad cars, commercial 
aircraft, and international air and sea passengers arriving at ports in 
the customs territory of the United States; adjust prepaid fee caps 
associated with commercial trucks and commercial railroad cars; remove 
certain fee exemptions that are no longer justifiable; and restructure 
the treatment monitoring fee. We would also revise the payment sections 
in order to recover the full cost of providing these AQI services, 
commensurate with the class of persons or entities paying the fees.

Updates to the ABC Model and Cost Calculations

    In updating our cost modeling, APHIS contracted in 2021 with the 
accounting

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firm Grant Thornton \14\ to review the data and the methodology in the 
ABC Model. Grant Thornton's assessment of the APHIS AQI model included 
a thorough review of every cost object, driver, assignment, and value. 
APHIS prepared two different versions of the ABC Model, using APHIS and 
CBP data sources, and Grant Thornton compared them. One version of the 
model used the cost allocation methodology from the 2015 rulemaking 
(direct trace and number of/workload), and the second used the proposed 
cost allocation methodology (direct trace, number of/workload, full-
time equivalent (FTE) hours) for comparison purposes. The intent was to 
identify and resolve any inconsistencies between versions and compare 
the impact of the two different methodologies on cost allocation, as 
discussed further below.
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    \14\ Since completion of the assessment, Grant Thornton's 
government division has moved to Guidehouse Federal. However, to 
reflect the firm's name at the time the assessment was completed, we 
use the name ``Grant Thornton'' throughout this document when 
referring to the work.
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    As a result of its review, Grant Thornton recommended options to 
more accurately allocate costs based on the activity and the 
output.\15\ In the 2015 rulemaking, APHIS used two methods for 
allocating costs: Direct trace, which directly assigns costs to 
outputs; and ``number of'' (or workload), which allocated costs based 
upon the number of inspection units (a passenger, a vessel, an 
aircraft, etc.). Grant Thornton recommended that APHIS add a third 
allocation method for allocating certain costs: FTE hours spent 
conducting an output (i.e., such as an inspection). As noted above, 
APHIS prepared two versions of the model for each of the three base 
years--one using the methodology from the 2015 rulemaking (direct trace 
and number of/workload) and one using the proposed methodology (direct 
trace, number of/workload, FTE hours) for comparison purposes. As part 
of the comparison, Grant Thornton reviewed the underlying CBP FTE 
allocation methodology and provided recommended changes for CBP support 
activities (supervision, data entry, etc.) that should be allocated 
across the direct AQI activities. APHIS reviewed and accepted the 
recommendations and incorporated those changes into a new FTE data 
source file and the AQI cost models. Concurring with Grant Thornton's 
recommendation, APHIS is employing the model with the new methodology 
(direct trace, number of/workload, FTE hours) for this rulemaking.
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    \15\ See supporting document ``Grant Thornton United States 
Dpartment of Agriculture Animal and Plant Health Inspection Service 
Services to Validate Agency's Activity-Based Cost Model for AQI User 
Fees: Recommendations Report.'' See footnote 5 for instructions on 
how to view this and other supporting documents on Regulations.gov.
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    Several agencies charge user fees under a variety of authorities, 
and use different methodologies to meet their statutory mandates. For 
example, CBP's Consolidated Omnibus Budget Reconciliation Act of 1985 
(COBRA) fees are set as prescribed by statute with adjustments for 
inflation.16 17 The U.S. Patent and Trademark Office uses an 
activity-based costing methodology.\18\ Federal Maritime Commission 
uses a costing methodology under the Independent Offices Appropriation 
Act of 1952 (31 U.S.C. 9701) in accordance with OMB Circular A-76, 
Performance of Commercial Activities (revised May 29, 2003).\19\ USDA's 
Agricultural Marketing Service develops fees through a series of 
equations set by rulemaking,20 21 and a notice-based process 
for updating the components of the equations.\22\ Accordingly, when an 
Agency is not fulfilling a ministerial function to prescribe user fees 
in a certain manner (as is the case with CBP), there are a variety of 
methodologies currently in use throughout the Federal government to 
compute the fees, and the most pertinent consideration is which 
methodology is most appropriate for a particular Agency's purposes. In 
this regard, we consider the proposed three-part methodology to have a 
distinct advantage over the previous two-part methodology with respect 
to the allocation of costs in non-equivalent outputs. As previously 
mentioned, direct trace allocation assigns costs directly to an output 
or outputs, and ``number of''/workload allocation assigns costs based 
on the number of inspection units. ``Number of''/workload allocation is 
optimal for equivalent outputs. For example, a pest identification is 
equivalent across all pathways: The workload to perform a taxonomic 
pest identification in the air passenger environment is equivalent to 
the workload to perform a taxonomic pest identification in maritime, 
truck, rail, or air cargo environments. However, the ``number of''/
workload method is less useful for non-equivalent outputs such as the 
inspection of an air passenger and their luggage compared to the 
inspection of a maritime vessel and its associated cargo. While both 
are considered individual inspection events, they are decidedly not 
equivalent in terms of workload. The use of FTE hours, that is, the 
number of hours spent producing outputs, is the optimal cost allocation 
method for non-equivalent outputs. To continue the air passenger/
commercial vessel comparison, assigning costs using the FTE hours spent 
inspecting in the air passenger environment compared to the number of 
FTE hours spent inspecting in the commercial vessel and maritime cargo 
environments provides a much more accurate means of measuring the 
workload required for these two non-equivalent outputs than does the 
previous methodology. Following the model validation task, Grant 
Thornton found that the APHIS (direct trace, number of/workload, FTE 
hours) cost models use the preferred allocation scheme for equivalent 
outputs and non-equivalent outputs as appropriate.
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    \16\ https://www.govinfo.gov/content/pkg/FR-2007-01-26/pdf/07-335.pdf.
    \17\ https://www.govinfo.gov/content/pkg/FR-2017-11-01/pdf/2017-23878.pdf.
    \18\ https://www.uspto.gov/sites/default/files/documents/Activity%20Based%20Information%20and%20Patent%20Fee%20Unit%20Expense%20Methodology.docx.
    \19\ https://downloads.regulations.gov/FMC-2023-0009-0001/content.pdf.
    \20\ https://downloads.regulations.gov/AMS-LPS-13-0050-0001/content.pdf.
    \21\ https://downloads.regulations.gov/AMS-LPS-13-0050-0004/content.pdf.
    \22\ https://downloads.regulations.gov/AMS_FRDOC_0001-2337/content.pdf.
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    A second proposed update to the ABC Model and cost calculation is 
to change the manner in which we calculate costs to account for 
inflation. The proposed rule would apply the C-CPI-U to prior years' 
(FY 2017-FY 2019) costs into rulemaking year dollars before calculating 
the base fees. We would also apply a projected C-CPI-U to set the 
overall fee schedule. In prior rulemaking to adjust AQI user fees, 
APHIS has used the Office of Management and Budget (OMB) economic 
assumptions for inflation. These assumptions incorporate the Consumer 
Price Index for all Urban Consumers (CPI-U). APHIS selected the
    C-CPI-U as the basis for inflation adjustments for AQI user fees 
because it accounts for consumer substitution taking place between CPI 
item categories.\23\ Typically, the C-CPI-U does not increase by as 
much as an index that was based on fixed purchase patterns, such as the 
CPI-U. APHIS therefore determined that the C-CPI-U would be fairer in 
fee setting for AQI user fees than the CPI-U. The Bureau of Labor 
Statistics has comprehensive

[[Page 54800]]

information about the C-CPI-U on their website.\24\
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    \23\ See supporting document ``Projected Fees for Agricultural 
Quarantine Inspections, FY2024-2028.'' See footnote 5 for 
instructions on how to view this and other supporting documents on 
Regulations.gov.
    \24\ https://www.bls.gov/cpi/additional-resources/chained-cpi.htm.
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    Third, the fee calculations in this proposed rule would also be 
forward-looking in that they would account for costs not previously 
considered. We now face new sanitary and phytosanitary threats that 
require APHIS and CBP to take on additional safeguarding measures and 
activities not previously accounted for in our assessment of staffing 
needs. We have been forced to commit resources to cover high priority 
risks, at the cost of necessary investments including mission critical 
infrastructure, IT system modernization, and methods innovation. 
Emerging high-priority program areas include the following:
     Additional inspection resources at airports to mitigate 
ASF risk.
     Additional inspection resources at international mail and 
express courier establishments experiencing eCommerce-driven trade 
growth.
     New seed sampling and testing workload at ports of entry 
and plant inspection stations.
     Expanding demand for treatment-monitoring-related 
services, such as monitoring the restacking of cargo in overloaded 
cargo containers.
    Both houses of Congress have indicated interest in different 
aspects of the AQI program and AQI user fees in their respective 
reports that accompany Agriculture Appropriations legislation. The 
House of Representatives has focused on AQI program resources 
(personnel, facilities, etc.) and funding.25 26 27 The 
Senate has focused more on policy: Re-evaluating the per-enclosure 
basis for the treatment monitoring fee, and reevaluating the exemption 
for certain small aircraft with 64 or fewer seats.28 29 30
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    \25\ https://www.congress.gov/116/crpt/hrpt446/CRPT-116hrpt446.pdf.
    \26\ https://www.congress.gov/117/crpt/hrpt82/CRPT-117hrpt82.pdf.
    \27\ https://www.congress.gov/117/crpt/hrpt396/CRPT-117hrpt396.pdf.
    \28\ https://www.congress.gov/117/crpt/srpt34/CRPT-117srpt34.pdf.
    \29\ https://www.congress.gov/116/crpt/srpt110/CRPT-116srpt110.pdf.
    \30\ https://www.gpo.gov/fdsys/pkg/CRPT-115srpt259/pdf/CRPT-115srpt259.pdf.
---------------------------------------------------------------------------

    As illustrated in tables 1 and 2 below, even under current workload 
demands, the AQI program is understaffed by 1,978 personnel.

                                              Table 1--CBP Staffing
----------------------------------------------------------------------------------------------------------------
                                                                                                       Total
                       Pathway/conveyance                          Total FTEs as    Additional     projected  FY
                                                                    of FY 2019     FTEs required     2028 FTE
----------------------------------------------------------------------------------------------------------------
CBP FTEs:
    Air Passengers..............................................           1,324             341           1,665
    Commercial Aircraft.........................................             819             438           1,257
    Commercial Vessel...........................................             356             247             603
    Commercial Truck............................................             155             258             413
    Commercial Rail.............................................              33              74             107
    Cruise Vessel Passenger.....................................              22               6              28
    Other (Non-Fee Areas).......................................             362              70             432
                                                                 -----------------------------------------------
        Totals..................................................           3,071           1,434           4,505
----------------------------------------------------------------------------------------------------------------


                                             Table 2--APHIS Staffing
----------------------------------------------------------------------------------------------------------------
                                                                                                       Total
                       Pathway/conveyance                          Total FTEs as    Additional     projected  FY
                                                                    of FY 2019     FTEs required     2028 FTE
----------------------------------------------------------------------------------------------------------------
APHIS FTEs:
    Commercial Aircraft.........................................             392             200             592
    Commercial Vessel...........................................             208              91             299
    Air Passengers..............................................             193              93             286
    Commercial Truck............................................             153              62             215
    Treatments..................................................              57              55             112
    Commercial Rail.............................................              34              14              48
    Cruise Vessel Passenger.....................................               6               4              10
    Other (AQI Non-Fee Areas)...................................              43              25              68
                                                                 -----------------------------------------------
        Totals..................................................           1,086             544           1,630
----------------------------------------------------------------------------------------------------------------

    The AQI program would need to spend an estimated additional $331 
million per year to fully staff at the level required to meet current 
workload. Because the existing ABC Model does not factor in the 
additional cost to increase staffing to meet this workload demand, we 
do not currently have the means to recover those costs. Under this 
proposed rule, these costs would be factored into our cost model and 
fee calculations.
    From an operational perspective, there is a limit to the number of 
frontline personnel the AQI program can feasibly recruit, hire, and 
train within 1 year. The current vacancy rate for APHIS agriculture 
specialist positions is 13.2 percent, and for CBP positions it is 3.14 
percent. The proposed fee schedule covers a 5-year period during which 
we implement the fee changes incrementally to account for the fact that 
it will take us 5 years to achieve full staffing and incorporates the 
projected inflation adjustment mentioned above. This phased approach 
tightly links fees to actual costs rather than charging for unrealized 
full staffing up front.
    The proposed rule would also account for capital planning costs not 
currently factored into the existing ABC Model. In developing the fees 
for this proposed rule, we would treat capital planning as a recurring 
cost category and build it

[[Page 54801]]

into the model. We would also create a separate, dedicated capital 
expenditure account. This approach to capital planning aligns with 
guidance for Federal agencies from OMB in the Capital Programming 
Guide, Circular A-11 \31\ (2021), and the U.S. Government 
Accountability Office (GAO) Executive Guide (1998).\32\ Congress 
recognizes the need for these types of investments. As recently as 
2021, the House Agriculture, Rural Development, Food and Drug 
Administration Committee reported that ``The Committee recognizes that 
there may be a need to update APHIS physical facilities, staff 
capabilities, and processes due to the increased volume of agricultural 
imports'' (H.R. 117-82). By incorporating these planned costs, APHIS 
can better adapt to meet increased volumes of imports and changes in 
phytosanitary risk, and facilitate trade with enhanced automation, 
improved levels of service and compliance assistance.
---------------------------------------------------------------------------

    \31\ https://www.whitehouse.gov/wp-content/uploads/2018/06/a11.pdf.
    \32\ Executive Guide: Leading Practices in Capital Decision-
Making (Superseded by AIMD-99-32) U.S. GAO.
---------------------------------------------------------------------------

    For a full description of the model and how we applied it when 
calculating AQI costs and fees, please see the documents in the 
supporting documents folder on Regulations.gov, which we are making 
available along with this proposed rule.\33\ APHIS has included APHIS 
and CBP input costs in the model as well as comprehensive rollup 
reports for both fee and non-fee outputs as supplemental documents to 
this rulemaking.
---------------------------------------------------------------------------

    \33\ See supporting documents ``AQI User Fee Input Costs and 
Cost Allocation Summary'' and the data files ending in ``. . . 
Rollup Report.'' The AQI User Fee Input Costs and Cost Allocation 
Summary can be viewed on Regulations.gov. See footnote 5 for 
instructions on how to view the supporting documents on 
Regulations.gov. Due to the size of the files, the rollup reports 
are available on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports. The rollup reports must be downloaded before 
viewing.
---------------------------------------------------------------------------

Court Ruling on Reserve Surcharge

    On June 21, 2022, the United States Court of Appeals for the 
District of Columbia Circuit issued a decision in Air Transport 
Association of America v. United States Department of Agriculture, 37 
F.4th 667 (D.C. Cir. 2022). In that case, plaintiffs contested aspects 
of the 2015 rulemaking which set AQI user fees. The D.C. Circuit 
primarily affirmed the 2015 rulemaking in the face of plaintiffs' 
challenges. The court, however, found in favor of plaintiffs on one 
count: That collection of a reserve surcharge violates the FACT Act of 
1990, as amended. On September 15, 2022, upon remand, the district 
court issued an amended final judgment vacating the 2015 final rule 
only insofar as it authorized the collection of a surcharge in order to 
maintain a reserve account.
    The D.C. Circuit opinion in the Air Transport Association of 
America case has informed this rulemaking. First, APHIS recalculated 
its AQI user fees so that the fees would not include a reserve 
surcharge component. On November 1, 2022, APHIS issued a Stakeholder 
Registry notice \34\ that administratively lowered the fees effective 
on December 1, 2022, to comport with the Court's ruling, and on March 
17, 2023, APHIS published a final administrative rule in the Federal 
Register (88 FR 16371-16372, Docket No. APHIS-2013-0021) adjusting the 
four fees that were affected by these recalculations: Those covering 
inspection services for trucks making individual crossings and using 
transponders, for international air passengers, and for international 
cruise vessel passengers. Those adjusted fees are listed under the 
heading ``Current Fees'' in table 3 below, along with the other fees 
that did not require adjustment. Moreover, it is these fee rates, 
rather than the rates as set forth in the 2015 final rule, that served 
as the baseline for APHIS' calculations in the supporting documents for 
this proposed rule.
---------------------------------------------------------------------------

    \34\ https://www.aphis.usda.gov/aphis/newsroom/stakeholder-info/sa_by_date/sa-2022/aqi-user-fees-response.
---------------------------------------------------------------------------

    Second, there is no reserve component in the fee rates in this 
proposed rule. The fee rates in this proposed rule are set at levels 
intended only to result in fee collections that cover the cost of 
providing agricultural quarantine and inspection services and the costs 
of administering the program, and personnel and capital planning cost 
components have been added to the cost model. Adding these cost 
components to the model ensures that the program can be fully staffed 
in future years and ensures that future-looking capital costs can be 
offset as they are actualized, without recourse to use of a general-
purpose reserve to pay for these costs.
    Third, historically, the reserve surcharge helped to cover service 
costs between the period of service delivery and quarterly AQI user fee 
collections. Under the current regulations, payments are made on a 
quarterly basis into AQI user fee accounts for commercial aircraft and 
international airline and cruise passengers, with monies not remitted 
to APHIS until 1 month after the end of the quarter in which they are 
collected. Since the fiscal year fourth quarter fees are not due, and 
therefore not received, until after the fiscal year is over, we are not 
able to use those funds to pay for providing AQI services for those 
activities in the fiscal year in which they are earned. Without the 
reserve surcharge, APHIS must shorten the time frame between service 
delivery and fee collection to avoid periods of insufficient funding 
for program operations. Also under the current regulations, APHIS 
collects fees for railroad cars 60 days after the close of the month; 
APHIS proposes adjusting this remittance schedule to be consistent with 
the fees mentioned above. These proposed changes are reflected in the 
payment and billing sections for these fee types and are discussed 
individually below.

Proposed User Fee Amounts and Justifications

    Using the data and methodology discussed above, we calculated the 
proposed fees shown below in table 3. We explain each fee service 
activity in greater detail in the following paragraphs. If these 
proposed fees become effective, we would continue to monitor the costs 
of AQI services and our collections and would undertake rulemaking to 
adjust the fees if we determine we are not appropriately recovering 
costs.
---------------------------------------------------------------------------

    \35\ Commercial Truck (per truck arrival) fees have been rounded 
down to the next $0.05 (five-cent) increment to facilitate 
operations at the border. This rounding does not impact calculation 
of the transponder fee.
    \36\ One annual payment for unlimited crossings within a 
calendar year.

                                             Table 3--Proposed Fees
----------------------------------------------------------------------------------------------------------------
                                                                           Proposed (in US$)
                                                     -----------------------------------------------------------
      Fee service activity              Current       January 1,  October 1,  October 1,  October 1,  October 1,
                                                         2024        2024        2025        2026        2027
----------------------------------------------------------------------------------------------------------------
Commercial Vessel (per vessel     $825.00...........    3,219.29    3,302.23    3,386.20    3,471.18    3,557.18
 arrival).

[[Page 54802]]

 
Commercial Truck (per truck       7.29..............       11.40       12.40       13.45       14.50       15.55
 arrival) \35\.
Commercial Truck (Transponder)    291.60............      686.40      746.40      808.20      870.60      935.40
 \36\.
Commercial Rail (per railroad     2.00..............        5.81        6.51        7.23        7.97        8.72
 car arrival).
Commercial Aircraft (per          225.00............      288.41      309.00      330.07      351.64      373.68
 aircraft arrival).
Air Passenger (per passenger      3.83..............        4.29        4.44        4.60        4.76        4.93
 arrival).
Cruise Vessel Passenger (per      1.68..............        1.20        1.25        1.29        1.34        1.39
 passenger arrival).
Treatments (per hour)...........  237.00 (per             232.97      253.19      273.90      295.12      316.83
                                   treatment).
----------------------------------------------------------------------------------------------------------------

    In the sections that follow, we summarize the regulatory changes we 
propose. Where we address specific AQI activities, we generally 
describe the relevant activities, state the current fee, state the new 
fee, and explain the basis for the new fee. The intent of the proposed 
provisions is to bring the AQI program closer to full cost recovery, 
and more accurately assign costs to different user classes as required 
under the FACT Act of 1990, as amended.

Proposed Regulatory Changes

Revisions to Regulatory Definitions

    In this proposed rule, we would revise some existing definitions 
and add some new ones to Sec.  354.3(a).
    The regulations currently define commercial railroad car as a 
railroad car used or capable of being used for transporting property 
for compensation or hire. We propose to revise the definition to read 
as any carrying vehicle, measured from coupler to coupler and designed 
to operate on railroad tracks, other than a locomotive or a caboose. 
This proposed revision would align APHIS' definition with that of CBP's 
in 19 CFR 24.22(d). This alignment is necessary because CBP is the 
responsible party for auditing fee remittances; therefore, we believe 
it is also appropriate to align our definition with CBP's definition 
for consistency of application of the regulations. Aligning our 
regulatory definitions with CBP's regulatory definitions simplifies 
understanding in the port environment for stakeholders and enhances 
operations between the two agencies, such as conducting audits.
    The existing regulations in Sec.  354.3(a) define commercial truck 
as a self-propelled vehicle, designed and used for transporting 
property for compensation or hire and that empty trucks and truck cabs 
without trailers fitting this description are included. We are 
proposing to define the term as any self-propelled vehicle, including 
an empty vehicle or a truck cab without a trailer, which is designed 
and used for the transportation of commercial merchandise or for the 
transportation of non-commercial merchandise on a for-hire basis. The 
proposed revision to the definition would align it with the definition 
in the CBP regulations in 19 CFR 24.22(c)(1). CBP collects the 
commercial truck fee on behalf of APHIS; therefore, we believe it is 
also appropriate to align our definition with theirs for consistency of 
application of the regulations.
    The existing regulations define Customs as the Bureau of Customs 
and Border Protection, U.S. Department of Homeland Security. We propose 
to replace that definition with a definition for Customs and Border 
Protection (CBP), which would be defined as U.S. Customs and Border 
Protection, U.S. Department of Homeland Security. This proposed change 
reflects current usage.
    We propose to add a definition of passenger to read ``a natural 
person for whom transportation is provided, including infants, whether 
a separate ticket or travel document is issued for the infant or 
toddler, or the infant or toddler occupies a seat, or the infant or 
toddler is held or carried by another passenger.'' This proposed 
definition would clarify that APHIS' understanding of what constitutes 
a passenger aligns with that of CBP in paragraph (g)(1)(v) of 19 CFR 
24.22.
    We are proposing to add definitions of reconditioning and 
restacking. We would define reconditioning as the removal or alteration 
of packaging associated with commercial cargo. We would define 
restacking as the redistribution of commercial cargo within or removal 
from a shipping container or other conveyance. Both of these are 
activities that we monitor in connection with AQI treatment services. 
As explained later in this document, we have not been charging for 
these services, but under this proposed rule, we would begin doing so.

Commercial Vessels

    Pursuant to the current regulations in Sec.  354.3(b), the AQI 
program inspects, with some exceptions that are discussed below, 
commercial vessels of 100 net tons or more arriving at ports of entry 
into the customs territory of the United States. Inspecting commercial 
maritime vessels involves the following activities: Reviewing manifests 
and documentation accompanying incoming cargo; determining entry 
status; targeting higher-risk cargo for inspection or clearance; 
inspecting cargo, cargo containers, wood packaging material, and 
packing materials for plant pests and contaminants; and determining 
regulatory compliance. In the maritime cargo environment, the AQI 
program also: Inspects the vessel's stores; inspects vessels for 
contaminants; identifies pests and invasive species found during 
inspection; monitors the storage and removal of regulated international 
garbage from the vessel to ensure consistency with all regulatory 
requirements; and safeguards shipments pending Plant Protection and 
Quarantine (PPQ) determination for treatment or final disposition. The 
current fee for these inspection services, as listed in Sec.  
354.3(b)(1), is $825 per arrival at a U.S. port.
    Over 65 percent of the cargo that arrives in the United States 
arrives by commercial vessel. The current revenues generated by the 
existing fee of $825 per arrival fall well short of recovering the 
costs we incur in providing and administering the associated inspection 
services. As indicated in the RIA accompanying this proposed rule, 
APHIS estimates a $130 million per year loss if the fee is not adjusted 
in year one.
    Under this proposed rule, the user fee per arrival, as listed in 
Sec.  354.3(b)(1), would increase to $3,219.29 in FY 2024 (beginning in 
Quarter 2), $3,302.23 in FY 2025, $3,386.20 in FY 2026, $3,471.18 in FY 
2027, and $3,557.18 in FY 2028. See table 3 above for the effective 
dates for each fee adjustment. After FY 2028, the fee would remain at 
FY 2028 levels for future years pending additional rulemaking. We 
intend to initiate a separate rulemaking to

[[Page 54803]]

propose to allow for notice-based adjustments to the fees.
    The proposed new fees adjust for the significant increase in ship 
cargo capacity since our prior rulemaking, which has increased the 
workload required to inspect each vessel. According to the U.S. 
Department of Agriculture (USDA) Agricultural Marketing Service,\37\ 
while the global container vessel fleet expanded by just 6.7 percent 
from 2011 through 2020, total cargo capacity of the global fleet 
expanded by more than 63 percent. This time period marshaled in the age 
of the megaship (a ship with a capacity of 18,000 20-foot containers, 
also known as 20-foot equivalent units (TEUs)). These megaships allowed 
more containers to be moved per voyage than before, increasing 
economies of scale and reducing the number of ships serving some trade 
lanes.\38\ The advent and adoption of megaships disrupted the industry 
and AQI revenue, as our current fees are tied to the number of ship 
arrivals, not the workload required to inspect and clear them. As the 
maritime industry shifted to greater carrying capacity, fewer ships 
arrived than APHIS predicted, but individual ships took much longer to 
inspect. The 2014 proposed rule had assumed average vessel arrivals of 
approximately 125,000 for FY 2014 through FY 2016, but the actual 
vessel arrivals were only around 54,000 for each of those 3 years. Much 
larger ships displaced smaller ships, which reduced costs to trade, but 
increased the AQI program's cost to inspect each vessel and the cargo 
it carried. The proposed adjusted fees, which would be listed in Sec.  
354.3(b)(1), reflect a change in the allocation of certain costs within 
the model from using the number of ship arrivals per year to the 
workload (FTE hours) it takes to inspect the average ship and its 
cargo-a more accurate reflection of our actual costs. Without the 
adjusted fees, we would not have adequate resources to provide the 
necessary level of AQI services for inspection of commercial vessels, 
potentially resulting in bottlenecks in the clearance of maritime 
cargo.
---------------------------------------------------------------------------

    \37\ https://agtransport.usda.gov/stories/s/pjaw-nxa9.
    \38\ https://agtransport.usda.gov/stories/s/Ocean-Container-Fleet-Dashboard/pjaw-nxa9/.
---------------------------------------------------------------------------

    The proposed vessel fee in FY 2024 is more than four times the 
current fee. However, considering the greater cargo capacity per ship 
(increased workload), inflation since FY 2010-FY 2012 (prior rule 
source data), and the need for additional personnel to inspect and 
clear cargo in a timely manner, APHIS believes the data justify this 
increase. Two main factors contributed to the increase in the 
commercial vessel fee: First, increase in workload per vessel; second, 
the change from number of arrivals to FTE hours as the allocation 
criterion for certain costs. The 2015 rule used cost and arrival data 
from FY 2010 through FY 2012. At that time, the average container 
vessel arriving into the United States carried 1,903 twenty-foot 
equivalent units (TEUs). This rulemaking uses cost and arrival data 
from FY 2017 through FY 2019; during this period, the average arriving 
container vessel now carried 2,710 TEUs, a 42.4 percent increase versus 
the 2015 rulemaking. This increased workload per vessel increased the 
per vessel costs to the AQI program. In addition, in the 2015 
rulemaking, certain costs were allocated using number of arrivals as 
the allocation criterion for certain costs; the number of vessel 
arrivals (approximately 108,000 per year in FY 2010--FY 2012) was 
relatively small (0.03 percent) compared to total arrival numbers 
(approximately 325 million arrivals per year between FY 2010 and FY 
2012 including all conveyances and passenger). This rulemaking uses 
frontline AQI FTE hours--a more accurate measure for assigning costs 
for non-equivalent outputs (inspecting one passenger versus inspecting 
a commercial vessel and its cargo are not equivalent)--to allocate 
these costs. At full implementation, there will be approximately 
575,000 frontline AQI FTE hours assigned to the commercial vessel and 
maritime cargo functions out of over 4 million total frontline AQI FTE 
hours or over 14 percent. The change to frontline AQI FTE hours changes 
the cost allocation for certain costs to commercial vessels from 
approximately 0.03 percent to over 14 percent.
    The current version of Sec.  354.3(b)(2) exempts certain vessels 
from AQI user fees. These include passenger vessels that depart from 
and return to U.S. ports without docking at any foreign ports, as well 
as certain barges, tugboats, and vessels used in government service. 
Currently, paragraph (b)(2)(vi) states that certain barges traveling 
solely between the United States and Canada meeting certain conditions 
are exempted from AQI user fees. Barges eligible for the exemption are 
those barges: That travel solely between the United States and Canada; 
that do not carry cargo originating from countries other than the 
United States or Canada; that do not carry plants or plant products; 
that do not carry animals or animal products; and that do not carry 
soil or quarry products from areas in Canada listed in 7 CFR 319.77-3 
as being infested with gypsy moth. Based on the pathway analysis that 
we conducted, we are proposing to eliminate this exemption. As 
discussed in our pathway analysis, we determined that barges entering 
the United States from Canada pose a phytosanitary risk similar to 
barges entering the United States from origins other than Canada and to 
other types of vessels entering from Canada. Barges from origins other 
than Canada and other types of vessels from Canada are not exempt from 
AQI user fees. Other vessels from Canada are required to pay user fees 
even when travelling the same routes and carrying the same cargo as 
exempt barges. APHIS promulgated the exemption for barges from Canada 
meeting certain conditions in 2010 (75 FR 10634) stating: ``we [APHIS] 
do recognize that barges traveling solely between the United States and 
Canada are operating in a lower-risk environment: A limited range of 
waterways between and around the U.S./Canada border such as the Puget 
Sound and the Great Lakes, which means that such barges present a much 
lower risk of carrying cargo or hitchhiking pests from a third 
country.'' In APHIS' recent analysis, we found that nearly 1,500 barges 
arrive from Canada annually requiring manifest review, review of 
documents, and physical inspection as necessary, which incur costs on 
the part of the AQI program. Moreover, part of the original premise 
that barges from Canada travel in limited waterways is no longer true, 
with certain barges from Canada arriving into 49 United States ports of 
entry as far south as Charleston, South Carolina on the east coast, and 
Oakland, California on the west coast. For additional information, 
please see the document titled ``Pathway Analysis for Barges from 
Canada,'' which we are making available along with this proposed 
rule.\39\ Because barges from Canada do not pose less of a 
phytosanitary risk than those other vessel types, the proposed rule 
would eliminate the exemption for barges. To be clear, the AQI program 
does currently conduct inspections of barges arriving from Canada and 
the cargo they carry, and therefore incurs costs to the program. 
Removal of the exemption allows the AQI program to recover these barge-
related costs.
---------------------------------------------------------------------------

    \39\ See footnote 5 for instructions on how to view this and 
other supporting documents on Regulations.gov.
---------------------------------------------------------------------------

    Finally, the commercial vessel fee would also not apply to 
commercial cruise (passenger) vessels that carry

[[Page 54804]]

passengers paying the international passenger fees under paragraph (f) 
of Sec.  354.3 because the cost of inspecting the entirety of the 
vessel is included in the international cruise passenger fee, and 
cruise vessels almost never carry commercial cargo. That broad 
exemption would replace the existing limited exemption in paragraph 
(b)(2)(i) of Sec.  354.3 for certain foreign passenger vessels. In this 
respect, the treatment of commercial vessels is distinct from that of 
international aircraft carrying passengers, which are not exempt from 
the commercial aircraft user fee. It is routine for commercial aircraft 
to carry passengers (and associated baggage) and cargo, but cruise 
vessels almost never carry commercial cargo.

Commercial Trucks

    We inspect commercial trucks at land ports in the customs territory 
of the United States arriving from Mexico and Canada. Inspecting 
commercial trucks involves the following activities: Reviewing 
manifests and documentation accompanying incoming cargo; determining 
entry status; targeting higher risk cargo for inspection or clearance; 
inspecting cargo, cargo containers, wood packaging material, and 
packing materials for plant pests and contaminants; and determining 
regulatory compliance. In the commercial truck environment, the AQI 
program also: Inspects trucks for contaminants; identifies pests and 
invasive species found during inspection; ensures consistency with all 
regulatory requirements; and safeguards shipments pending PPQ 
determination for treatment or final disposition.
    AQI user fees for inspection of commercial trucks entering the 
customs territory of the United States are listed in Sec.  354.3(c)(1). 
The current operational fee is $7.29 per truck arrival (see footnote 35 
for further elaboration), with an option, under paragraph (c)(3), to 
prepay an amount (currently $290.61) 40 times the single-arrival fee to 
obtain a transponder that will cover all arrivals of a commercial truck 
during a calendar year.
    For context regarding the transponder option, there are only two 
fee classes that allow for remittance of an annual fee, commercial 
trucks and commercial railroad cars. (As we discuss below, the option 
for commercial railroad cars is effectively unused and we are seeking 
public comment on whether to eliminate it.) In both instances the means 
of conveyance are crossing land borders using routes (whether roads or 
rails) that are heavily traversed. This is especially true of 
commercial trucks, where there are approximately 11 million crossings 
per year.
    Currently, there is not infrastructure in place at land borders to 
allow for real-time fee collection (similar to automated toll 
collection systems used throughout the United States), although that is 
a long-term goal. Accordingly, annual remittance is used as an option 
to reduce border congestion and to keep border operations manageable.
    We currently incentivize annual payments by placing a cap on the 
annual fee for truck crossings; crossings beyond the cap are 
effectively free. This incentivization makes sense because the 
alternative, in which CBP personnel must collect the commercial truck 
fee 11 million times annually, is operationally untenable. However, if 
we were to make this same practice broadly applicable across modes, it 
would undermine full cost recovery.
    We are proposing to add a sentence to paragraph (c)(1) stating that 
the AQI user fee would apply to all commercial trucks, regardless of 
what they are carrying, including empty trucks and truck cabs. This 
addition is already codified under the current definition of commercial 
truck, but the existing regulations in paragraph (c)(1) do not state 
the requirement explicitly; this revision clarifies application of the 
fee. Empty trucks and truck cabs need to be inspected because they may 
pose a phytosanitary risk due to hitchhiking pests and contaminants 
from past shipments.
    Strictly following the 2023 FTE model, the user fee per arrival, as 
listed in proposed paragraph (c)(1), would increase to $11.44 in FY 
2024, $12.44 in FY 2025, $13.47 in FY 2026, $14.51 in FY 2027, and 
$15.59 in FY 2028; however, at CBP's request, we are rounding these 
fees down to the next $0.05 (five-cent) increment to facilitate 
operations at the border. CBP has indicated that making change at the 
penny level for single-payer trucks would have a negative impact on 
wait times at the land border. Therefore, the fees under proposed 
paragraph (c)(1) would increase to $11.40 in FY 2024, $12.40 in FY 
2025, $13.45 in FY 2026, $14.50 in FY 2027, and $15.55 in FY 2028. The 
corresponding prepaid (transponder) user fees would be set at an amount 
60 times the unrounded fee rates for each arrival, as discussed further 
below, and would rise to $686.40, $746.40, $808.20, $870.60, and 
$935.40, respectively. As shown in the RIA accompanying this proposed 
rule, APHIS estimates an aggregate $67.5 million loss per year if the 
per-arrival and prepaid user fees are not adjusted in year one.
    In the past 10 years, agricultural cargo arriving by truck has 
increased by 90.6 percent, from 21.7 billion kilograms to 41.32 billion 
kilograms. In addition, APHIS conducted an analysis showing that the 
volume of freight per truck has increased from 7.6 tons per truck in 
2010 (beginning of the 2015 final rule's source data) to 8.5 tons per 
truck in 2019 (end of this rulemaking's source data); moreover, this 
increase continues, with the average arriving truck carrying 10.4 tons 
of freight in 2021.\40\ We must increase staff on the truck pathway to 
address this increase in volume.
---------------------------------------------------------------------------

    \40\ See supporting documents: Changes in the Carrying Capacity 
of Containerized Maritime and Land Border Transport Over Time: A 
Brief Analysis.
---------------------------------------------------------------------------

    Analysis of collections data cross-referenced with truck arrival 
data shows a consistent average of 90 crossings per transponder per 
year from 2013 through 2021. However, to incentivize use of annual 
transponders, APHIS proposes to set the AQI truck transponder fee at 60 
times the per arrival fee, an increase from 40 times the per arrival 
fee used to calculate the current transponder fee. This has no impact 
on CBP truck transponder fees.
    The proposed truck fee at full implementation (FY 2028) is more 
than double the current fee; however, the volume of cargo per truck has 
increased from an average of 7.6 tons per truck (FY 2010-FY 2012) to 
over 8.5 tons per truck (FY 2017-FY 2019). Considering the increased 
cargo volume per truck, increased agricultural risk per truck, 
additional personnel to ensure more expedient border clearance, and 
inflation since the FY 2010-FY 2012 source data period for the 2015 
final rule, APHIS believes the data justify this increase. Under the 
proposed rule, by FY 2028, the associated prepaid transponder fee will 
more than triple; however, the average truck transponder crosses the 
border more than 90 times in a calendar year. To incentivize the 
purchase of transponders, which facilitate border-crossing procedures, 
while limiting the impact of the fee increase on trucking companies, 
APHIS is proposing to set the truck transponder fee multiple at 60 
times the unrounded per arrival fee. Again, APHIS believes the 
underlying transponder usage data justifies this increase.
    We are proposing an additional amendment to clarify that 
prepayments for purchases of transponders may be made at any time 
during a calendar year. The proposed rule would not provide, however, 
for prorating of the prepayment cost or allowing credit for individual 
crossings made prior to

[[Page 54805]]

prepayment, if the operator of the commercial truck elects to prepay 
during a calendar year. This proposed change would better align our 
prepayment requirements with those of CBP.\41\ As noted earlier, 
provisions for prepayment for truck transponders are currently 
contained in paragraph (c)(3) of the regulations. In those existing 
regulations, paragraph (c)(2) is reserved. In this proposed rule, the 
prepayment requirements described above would be moved to proposed 
(c)(2), and paragraph (c)(3) would be eliminated.
---------------------------------------------------------------------------

    \41\ https://dtops.cbp.dhs.gov/main/help/HelpfulInfo2FAQs.jsp 
section ``About Decals, Transponders, and Single Crossing Fees''.
---------------------------------------------------------------------------

Commercial Railroad Cars

    The AQI program inspects commercial railroad cars (cargo) arriving 
at land ports in the customs territory of the United States from Mexico 
and Canada. Inspecting railroad cars involves the following activities: 
Reviewing manifests and documentation accompanying incoming cargo; 
determining entry status; targeting higher risk cargo for inspection or 
clearance; inspecting cargo, cargo containers, wood packaging material, 
and packing materials for plant pests and contaminants; and determining 
regulatory compliance. In the rail cargo environment, the AQI program 
also: Inspects railroad cars for contaminants; identifies pests and 
invasive species found during inspection; monitors the storage and 
removal of regulated international garbage from the railroad car to 
ensure consistency with all regulatory requirements; and safeguards 
shipments pending PPQ determination for treatment or final disposition.
    Fees for inspection of loaded commercial railroad cars arriving at 
land ports in the United States are listed in current Sec.  
354.3(d)(1). The current fee is $2 per loaded railroad car arrival, 
with an option to prepay an amount 20 times the single-arrival fee for 
all arrivals of a commercial railroad car during a calendar year.
    Under this proposed rule, the user fee per arrival, as listed in 
proposed paragraph (d)(1)(l), would increase to $5.81 in FY 2024, $6.51 
in FY 2025, $7.23 in FY 2026, $7.97 in FY 2027, and $8.72 in FY 2028. 
The corresponding prepaid user fees, which would be set at an amount 48 
times the AQI user fee for each arrival, would rise to $278.88, 
$312.48, $347.04, $382.56, and $418.56, respectively.
    Based upon analysis of collections and arrival data,\42\ the 
average railroad car arrives 48.32 times per year. A prepaid multiple 
of 48 brings us significantly closer to full cost recovery than the 
present multiple of 20 times the per arrival fee. As shown in the RIA 
accompanying this proposed rule, APHIS estimates a $13.5 million loss 
annually if the commercial railroad car user fees are not adjusted in 
year one.
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    \42\ See supporting document ``Analysis of AQI User Fees: Truck 
Transponder and Prepaid Railroad Car Multiples Using Fee Collections 
and Arrival Data''. See footnote 5 for instructions on how to view 
the supporting documents on Regulations.gov. Please note that 
because our analysis reviews FY 2017-2019 data, which precedes the 
court opinion referred to above, it assesses usage when the truck 
crossing fee was $7.55, rather than the current $7.29.
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    The commercial railroad car fee will more than quadruple by full 
implementation in FY 2028 from its current level. The main reason for 
this is what falls under the regulatory definition of a railroad car 
[19 CFR 24.22(d)(1)] is now much larger than what the current 
inspection fee is designed to cover. The current fees are designed to 
cover inspection costs for a railroad car that is essentially a single 
box on wheels. The typical railroad car in use today, however, consists 
of a multi-unit chassis with double stacked containers on wheels. Cargo 
in general arriving into the United States by rail has increased nearly 
15 percent since the FY 2010-FY 2012 period (source data 2015 final 
rule). Moreover, agricultural cargo arriving by rail has increased over 
20 percent since 2010, from over 15 billion kilograms to over 18 
billion kilograms in 2021. We must increase staff on the rail pathway 
to address these changes in trade on our land borders (see Tables 1 and 
2 above). Considering the aforementioned increase in rail cargo volume 
and the steeper increase in agricultural rail cargo volume, the 
necessary addition of personnel to ensure more expedient border 
clearance, and inflation since the FY 2010-FY 2012 source data period 
for the 2015 final rule, APHIS believes the data justify this increase.
    As noted above, the existing regulations in Sec.  354.3(d)(1) refer 
to AQI fees for inspection of loaded commercial railroad cars. In 
addition to the fee changes, we are proposing to amend Sec.  
354.3(d)(1) to remove the references therein to loaded cars. CBP 
inspects all commercial railroad cars, loaded and unloaded; however, 
APHIS does not collect AQI user fees for unloaded rail cars under the 
current regulations. However, both loaded and unloaded cars and rail-
bound containers can harbor hitchhiking pests, and can transit through 
multiple countries with disparate pest risk profiles in terms of 
possible hitchhiking pests. For this reason, both the exterior and 
interior of unloaded railroad cars and unloaded rail-bound containers 
need to be inspected because they, too, may pose a phytosanitary risk 
due to hitchhiking pests and contaminants from past shipments. In order 
to recover the costs of conducting these inspections, we propose to 
make unloaded railroad cars subject to AQI user fees.
    Current paragraph (d)(3) contains prepayment requirements for a 
calendar year for railroad companies choosing that option. We are 
proposing to amend that paragraph, as we did paragraph (c)(2), to 
provide for purchases made during a calendar year. The amendment would 
better align the rule with language in CBP regulations in 19 CFR 24.22. 
As is the case for commercial trucks, no credit would be given towards 
the annual prepayment for single payer crossings made earlier in the 
calendar year, nor would the annual prepayment amount be prorated.
    While the current regulations include a prepaid option for 
commercial railroad cars, very few railroad companies use the prepay 
option. Based on this, APHIS is considering eliminating the prepaid 
option to simplify the regulations. APHIS originally developed the 
prepaid railroad car option to reflect a similar option available for 
railroad companies paying CBP COBRA fees. Recent consultation with CBP 
and discussions with APHIS' own Financial Management Division reveal 
that in any given year very few, if any, railroad operators do actually 
exercise this option. APHIS invites comments on the possibility of 
eliminating the prepaid railroad car option.
    Statement, remittance, and compliance requirements for AQI user 
fees for commercial railroad cars are located in current paragraphs 
(d)(4) through (6) of Sec.  354.3. Under current paragraph (d)(4), the 
Association of American Railroads (AAR) and the National Railroad 
Passenger Corporation (AMTRAK) must submit monthly written statements 
by mail to APHIS listing the number of loaded commercial railroad cars 
entering the United States during the relevant period, the number of 
those cars pulled by each railroad company and the total monthly AQI 
user fee due from each railroad company.
    We would revise paragraph (d)(4) to provide for submission of 
remittance not only by AAR and AMTRAK, as is the case in the current 
regulations, but by individual railroad companies as well. This 
proposed revision would more closely align our requirements pertaining 
to railroad car user fees with those of CBP [19 CFR 24.22(d) et seq.].

[[Page 54806]]

CBP cites: ``The Association of American Railroads (AAR), the National 
Railroad Passenger Corporation (AMTRAK), and any railroad company 
preferring to act individually, must file monthly statements. . . .'' 
Current APHIS regulations omit ``any railroad company preferring to act 
individually''. This revision corrects this oversight.
    We are also proposing some updates to statement, remittance, and 
compliance procedures in paragraphs (d)(4) through (6). We are 
proposing to replace the words ``statement'' and ``remittance'' in the 
rule with the words ``remittance worksheet'' and ``payments'' to 
clarify what is required in plain language. The document that would be 
submitted along with a payment would be the ``remittance worksheet'' 
rather than a monthly statement, which is the current practice. The 
remittance worksheet would capture the same data previously submitted 
on the monthly statements but is a standardized worksheet produced by 
APHIS' Financial Management Division. Changing to the remittance 
worksheet would standardize the documentation we receive from entities 
within a user class as well as standardize documentation across all 
user classes, which would simplify APHIS recordkeeping and payer 
compliance. For example, entities currently submit this data in a 
variety of formats. Some even submit more information than is 
necessary. Having the ability to complete a worksheet would focus their 
efforts on only the required information. This would also make the 
process easier for APHIS, because we would look at incoming data on the 
same type of incoming document each time rather than being required to 
hunt through various entity formats to find and record the information 
we need. We are making the worksheet available as a supporting document 
for this proposed rule. We would also remove outdated mailing 
addresses, and provide a link (https://www.aphis.usda.gov/aphis/ourfocus/planthealth/ppq-program-overview/ppq-cbp-aqi-user-fees-contacts) to information on submitting remittance worksheets, and 
payments, both electronically and by mail, and for entities submitting 
online, provide an email address for submission.
    To make collections for railroad cars consistent with the proposed 
changes to international air passenger, commercial aircraft, and 
international cruise passenger fees, APHIS proposes changing the 
remittance deadline for railroad cars to 90 days after the close of a 
calendar month. Under this proposed rule, railroads would remit their 
payments to APHIS on a monthly basis (12 times per year) which is the 
same as the current requirement; however, railroads would have 90 days 
to reconcile their books for each month versus the current 60-day 
period after the close of the month. For example, remittance of fees 
collected in January of a given year would occur at the end of April of 
that year (90 days after the close of January); remittance of fees for 
February of a given year would occur at the end of May of that year; 
remittance of fees for October of a given year would occur at the end 
of January of the following year, etc. Regular and predictable 
remittance of user fee collections helps with the financial management 
of the AQI account and with trend prediction for future operation 
planning. The proposed changes to these paragraphs would both clarify 
and streamline the procedures and update them to improve APHIS business 
practices.
    Further, to increase accountability and establish individual 
responsibility for complying with our payment and remittance worksheet 
requirements, we would require that the AAR, AMTRAK, and any railroad 
company acting individually for making AQI user fee payments designate 
an agent or responsible person, who would have that responsibility. We 
would also specify the duties of that responsible person in paragraph 
(d)(6), which we would divide into two subparagraphs. Proposed 
paragraph (d)(6)(i) would contain the existing provisions of paragraph 
(d)(6), without the outdated addresses. Proposed paragraph (d)(6)(ii) 
would state that the agent or other responsible person for a payment 
remains the agent or responsible person until the railroad company 
notifies APHIS of a transfer of responsibility. Before such a transfer 
could take place, the agent or responsible person would first have to 
contact APHIS to initiate the transfer. Once APHIS acknowledges the 
transfer, the new agent or responsible person would assume all 
responsibilities for ensuring compliance with the requirements of 7 CFR 
part 354. This proposed requirement would ensure seamless continuity of 
individual responsibility for compliance in the event of personnel 
changes on the part of a regulated party, and facilitates APHIS' 
ability to resolve issues quickly, thereby improving efficiency and 
customer service.

Commercial Aircraft

    APHIS inspects international commercial aircraft arriving at 
airports in the customs territory of the United States. These 
inspections cover commercial aircraft capable of carrying cargo and 
passengers, regardless of whether cargo or passengers are on a 
particular flight. Inspecting commercial aircraft involves the 
following activities: Reviewing manifests and documentation 
accompanying incoming cargo; determining entry status; targeting higher 
risk cargo for inspection or clearance; inspecting cargo, international 
mail, expedited courier packages, cargo containers, wood packaging 
material, and packing materials for plant pests and contaminants; and 
determining regulatory compliance. In the commercial aircraft 
environment, the AQI program also: Inspects the aircraft hold and 
exterior for contaminants and pests; identifies pests and invasive 
species found during inspection; ensures consistency with all 
regulatory requirements; and safeguards shipments pending PPQ 
determination for treatment or final disposition. As discussed below, 
there is a separate international air passenger fee, which covers, 
among other things, inspection of the aircraft passenger cabin.
    Fees for inspection of commercial aircraft are listed in Sec.  
354.3(e)(1). The current fee is $225 per arrival. Under this proposed 
rule, the user fee per arrival, as listed in proposed paragraph (e)(1), 
would increase to $288.41 in FY 2024, $309.00 in FY 2025, $330.07 in FY 
2026, $351.64 in FY 2027, and $373.68 in FY 2028.
    Commercial aircraft carry less than 1 percent by volume of 
commercial cargo arriving in the United States. However, commercial air 
cargo is high-risk, highly perishable, and includes time-sensitive 
express courier shipments, and it accounts for an estimated 43 percent 
of total AQI cargo inspection costs. These costs are driven in part by 
the intensive effort required to inspect numerous small packages and 
highly perishable commodities, which are more likely to be transported 
via aircraft than by another type of conveyance. As with other 
conveyances and shipping containers, the aircraft themselves pose a 
significant risk from potential hitchhiking pests. From 2014 to 2020, 
the increase in agricultural cargo imports coincided with a tripling in 
the growth of worldwide mail and express courier shipment volumes, 
growing from 43 billion to 131 billion parcels--a 27 percent year-on-
year increase. Industry analysts predict another doubling in worldwide 
parcel volume by 2026.\43\
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    \43\ https://www.statista.com/chart/10922/parcel-shipping-volume-and-parcel-spend-in-selected-countries/.

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

[[Page 54807]]

    The proposed adjusted fees would fund full staffing to inspect 
these aircraft and their cargo at airport facilities throughout the 
country, at all arrival times. The proposed aircraft fee for FY 2028 is 
approximately 1.6 times the current fee. This cost increase under the 
terms of the proposed rule reflects the additional staffing to meet our 
current and anticipated needs in the air cargo environment. The wide 
geographic range (over 320 airport facilities throughout the United 
States receive foreign cargo), stakeholders' need for rapid processing 
times, and around-the-clock service requests make servicing the air 
cargo environment one of the most demanding AQI functions. When coupled 
with inflation since the FY 2010-FY 2012 source data period for the 
2015 final rule, APHIS believes the data justify this increase.
    In addition to the proposed fee changes, we are proposing to remove 
paragraph (e)(2)(iv), which exempts from AQI user fees certain 
passenger aircraft with 64 or fewer seats. As noted above, the pathway 
analysis we conducted demonstrates that this exemption is no longer 
justified. Results of the pathway analysis indicated that aircraft with 
64 or fewer seats had many opportunities for exposure to hitchhiker 
pests, as well as many opportunities to expose pests to a large variety 
of environments in the United States. Because of the high number of 
flights and flight routes by aircraft with 64 or fewer seats, relative 
to those with 65 seats and above, and given the similar numbers in 
origins and destinations between the two types of aircraft, we 
concluded that commercial passenger aircraft with 64 or fewer seats 
serve as a pathway for the introduction of quarantine pests to the 
United States and propose eliminating the exemption.\44\
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    \44\ See footnote 5 for instructions on how to view this and 
other supporting documents on Regulations.gov.
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    APHIS decided not to propose a new tiered structure for the 
commercial aircraft fee based upon aircraft size or seat number. This 
is because, as noted in the pathway analysis, the phytosanitary risk 
posed by a particular aircraft is based upon a variety of factors, 
including the country of origin, countries transited, type and volume 
of cargo, country of origin of the cargo, and environmental conditions 
at point of origin and final destination.
    The number of seats in the aircraft thus has little bearing on 
phytosanitary risk as it pertains to the aircraft fee. (Indeed, 
inspection of seats on an aircraft is a cost component factored into 
the international air passenger fee, not the commercial aircraft fee.) 
There is, moreover, not a single consideration that differentiates 
aircraft into ``high risk'' and ``low risk'' categories. Moreover, a 
fee tiered to account for all these factors would require excessive 
administration to run properly and become cost-prohibitive and 
impracticable. Instead, APHIS is proposing a single aircraft fee that 
is based on the average cost to inspect and clear commercial aircraft 
and their cargo, regardless of the number of seats on the plane. APHIS 
invites specific comment on whether the aircraft fee could be 
structured differently from our proposed structure, as well as evidence 
in support these alternate structures.
    We are proposing to revise paragraphs (e)(3) and (4), which pertain 
to remittances and compliance for AQI user fees for commercial 
aircraft, in a manner corresponding with the revisions to paragraphs 
(d)(4) through (6), i.e., by changing the terminology to refer to 
``remittance worksheets'' and ``payments'' rather than ``statements'' 
and ``remittances,'' removing outdated addresses, providing updated 
information links and options for making electronic payments and 
submissions of remittance worksheets, and adding requirements 
pertaining to the air carrier's agent or responsible person for 
overseeing compliance. These changes would parallel those in paragraph 
(d) described above. We would also remove the requirement currently in 
paragraph (e)(3)(ii)(B), which requires the person submitting payment 
to provide his or her taxpayer identification number (TIN). APHIS 
collects the TIN for enforcement and debt collection when the 
stakeholder establishes a payment account with APHIS; therefore, this 
personally identifiable information is not necessary for submission of 
individual remittances. APHIS also proposes removing current paragraphs 
(e)(3)(ii)(D) and (e)(3)(ii)(E). APHIS no longer uses ports of entry at 
which inspections occurred or number of arrivals at each port for fee 
collection purposes.
    Proposed changes to paragraph (e)(3) also include decreasing the 
period for payment of the fees and submission of remittance reports 
from quarterly to monthly. Under this proposed rule, airlines would 
remit their payments to APHIS on a monthly basis (12 times per year) 
versus the current quarterly basis (four times per year). They would 
have 90 days to reconcile their books for each month versus the current 
31-day period after the close of the quarter. For example, remittance 
of fees collected in January of a given year would occur at the end of 
April of that year (90 days after the close of January); remittance of 
fees for February of a given year would occur at the end of May of that 
year; remittance of fees for October of a given year would occur at the 
end of January of the following year, etc.
    The AQI account balance changes daily as customers remit their user 
fees, as the APHIS program obligates funds, as refund requests are 
processed, as account recoveries are received, as funds are transferred 
to CBP, and as other account adjustments are made. A regular and 
predictable remittance of user fee collections helps with the financial 
management of the account and trend prediction for future operation 
planning. To illustrate, from FY 2017 to FY 2019, commercial aircraft 
collections averaged over 23 percent of total collections, or nearly 
$188 million. Also, from FY 2017 to FY 2019, commercial aircraft 
passenger collections averaged over 61 percent of total collections, or 
nearly $486 million. Collections from the air sector (commercial 
aircraft and commercial air passenger) are a combined annual average of 
over 85 percent of total AQI collections. Under this rule as proposed, 
APHIS estimates that by FY 2028 the combined air sector would account 
for approximately 68 percent of total collections assuming future 
arrivals match average arrivals for FY2017 through FY2019. Because of 
the large proportion of collections from the air sector, the current 
quarterly remittance schedule for airlines results in significant 
fluctuations in the account balance, making such financial management 
and planning challenging throughout the fiscal year. For example, 
airlines remit large sums 1 month after the close of each quarter, and 
APHIS transfers funds to CBP every other month. At certain times of the 
year, the quarterly remittance schedule and bi-monthly transfers lead 
to a low balance in the account, which may lead to a needed delay in 
transferring funds to CBP or APHIS operations until collections are 
received. During the pandemic, this trend was mitigated by appropriated 
supplemental funds. A monthly remittance schedule would smooth the 
revenue stream, which would lead to a more regular and predictable 
account balance. This, in turn, would allow for better financial 
management and trend predictions to promote the program's ability to 
achieve its mission efficiently and effectively. Finally, we note that, 
under 21 U.S.C. 136a(a)(3), APHIS has broad authority to set remittance 
schedules as it deems fit.

[[Page 54808]]

International Passengers Arriving at Airports and Seaports

    Millions of travelers arrive at U.S. airports and seaports from 
international destinations daily. Inspecting international air 
passengers includes pre-arrival analysis of incoming passengers and 
screening arriving air passengers for agricultural products by the AQI 
Program; inspection of passenger baggage using CBP agriculture canines 
and specialized non-intrusive inspection equipment; inspecting the 
interior of the passenger cabin and baggage compartments of the 
aircraft; monitoring the storage and removal of regulated international 
garbage from the aircraft to ensure consistency with all regulatory 
requirements; safeguarding and appropriately disposing of any seized or 
abandoned prohibited agricultural products; and identifying and 
mitigating pests found on prohibited agricultural products or in 
passenger cabins brought into the country via international travel.
    Inspecting a cruise vessel and its passengers includes pre-arrival 
analysis of incoming passengers; screening arriving sea passengers for 
agricultural products by CBP Agriculture Specialists and CBP Officers; 
inspection of passenger baggage using CBP agriculture canines and 
specialized non-intrusive inspection equipment; inspection of the 
vessel itself to ensure that contaminants, prohibited articles, or 
invasive pests are not present; inspecting the ship's stores to ensure 
that prohibited items are not present or are properly safeguarded; and 
monitoring the storage and removal of regulated international garbage 
from the vessel to ensure consistency with all existing regulatory 
requirements. The costs of inspecting the cruise ships themselves are 
covered by the sea passenger fee because the entirety of a cruise 
vessel is passenger-related. APHIS added the sea passenger AQI user fee 
in the 2015 final rule.
    The current AQI user fee for inspection of commercial air 
passengers is $3.83 per arrival. Under this proposed rule, the user fee 
per arrival, as listed in proposed Sec.  354.3(f)(1), would increase to 
$4.29 in FY 2024, $4.44 in FY 2025, $4.60 in FY 2026, $4.76 in FY 2027, 
and $4.93 in FY 2028.
    Over the past decade, air and sea passenger volumes have each grown 
on average by over 50 percent (air by 54.6 percent and cruise by 51.65 
percent), but the number of frontline employees (inspectors) actually 
decreased over this period. Looking specifically at frontline employee 
workload, there were 62,000 passengers per frontline employee in 2010. 
By 2019 there were 98,000 passengers per frontline employee, a 58 
percent increase in workload per employee. While we experienced a 
decrease due to the COVID-19 pandemic, international passenger volumes 
are projected to recover in 2024 and grow 3.5 percent annually, further 
increasing frontline employee workload. In a static cost and wage 
environment, collections of passenger fees increase with increasing 
passenger arrivals, and increased collections would result in 
additional funds for hiring additional personnel and purchasing 
additional equipment to cover workload; however, underlying Federal 
employee wages and equipment costs have increased while the fee has 
remained static. For example, from 2015 to 2023, a GS-12 Step 5 
(typical CBP Agriculture Specialist inspector) salary at two of the 
largest airports, John F. Kennedy International Airport in New York and 
Los Angeles International Airport in California, increased more than 22 
percent, and equipment and other costs as measured by inflation (CPI-U) 
have increased over 28 percent from December 2015 to April 2023 while 
the fee itself remained static.
    In addition to enabling us to recover the costs of our current 
program activities, the proposed fee change would increase the presence 
of CBP AQI canine teams from the current 189 AQI canine units to a 
total of 281 AQI canine units to improve the detection of prohibited 
products that could harbor ASF, which has become a disease of 
particular concern due to recent outbreaks in the western hemisphere, 
as well as other sanitary and phytosanitary risks in passenger baggage. 
Congress authorized up to $220 million per year for additional 
positions, but it did not fund the authorization.\45\ APHIS estimates a 
shortfall of $28.9 million per year if the air passenger fee is not 
adjusted.
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    \45\ https://www.govinfo.gov/content/pkg/CRPT-116srpt94/html/CRPT-116srpt94.htm.
---------------------------------------------------------------------------

    The commercial cruise vessel passenger fee is the only fee that 
will decrease relative to the current fee. The cruise ship passenger 
fee is currently $1.68 per arrival. As listed in proposed Sec.  
354.3(f)(1), the fee would decrease to $1.20 in FY 2024, $1.25 in FY 
2025, $1.29 in FY 2026, $1.34 in FY 2027, and $1.39 in FY 2028. The 
change in the cruise passenger fee owes mainly to the change in 
allocation criteria from number of inspection events (passengers) to 
FTE hours. Between FY 2017 and FY 2019, there was an average of 15.6 
million cruise passenger arrivals out of a total of 287.6 million total 
arrivals (all commercial passengers, pedestrians, commercial 
conveyances, and privately owned vehicles) or 5.42 percent; however, 22 
FTEs out of 3,071 total FTEs or 0.72 percent of CBP AQI personnel 
inspected cruise passengers. Using FTE hours as the allocation 
criterion for certain costs resulted in 0.72 percent of those costs 
allocating to cruise passenger clearance rather than 5.42 percent using 
number of passengers (workload).
    We have added several proposed clarifications in paragraph (f) 
related to applicability, payment, and handling of international 
passenger user fees collected and remitted for trips not taken. In 
proposed paragraph (f)(1), we have added language to clarify that 
infants, traveling with or without documents, whether in assigned seats 
or held in an adult passenger's lap, are subject to AQI user fees, as 
they are subject to the same inspection as other passengers. This 
harmonizes APHIS regulations with CBP regulations in 19 CFR 24.22(g), 
and their definition of passenger. As noted above, we are also 
proposing to add a definition of passenger to help clarify these 
requirements. In proposed changes to paragraphs (f)(5) and (6), we have 
shortened the period for payment of international passenger fees and 
submission of remittance reports from quarterly to monthly, in order to 
recover the costs of inspecting international passengers in a timely 
manner as discussed above. As discussed above in relation to paragraph 
(e), operators would have 90 days to reconcile their books for each 
month. Airlines and cruise lines would remit passenger fees to APHIS on 
a monthly basis (12 times per year) versus the current quarterly basis 
(four times per year), and would have 90 days to reconcile their books 
for each month versus the current 31-day period after the close of the 
quarter. For example, remittance of fees collected in January of a 
given year would occur at the end of April of that year (90 days after 
the close of January); remittance of fees for February of a given year 
would occur at the end of May of that year; remittance of fees for 
October of a given year would occur at the end of January of the 
following year, etc.
    We are proposing to add new paragraphs (f)(5)(v) and (vi), which 
would cover the handling of international passenger AQI user fees 
collected and remitted for trips not taken. Proposed paragraph 
(f)(5)(v) would clarify that APHIS' policy is that the entity issuing 
the ticket or travel document (e.g., air or sea carriers, travel 
agents, tour wholesalers, or other entities) has a responsibility to 
make refunds of the international passenger

[[Page 54809]]

AQI user fees in the original form of payment to the purchaser for 
trips not taken. Proposed paragraph (f)(5)(vi) describes the process 
for requesting a credit from APHIS for international passenger AQI user 
fees collected and remitted prior to refunding a ticket purchaser for 
an international passenger AQI user fee for a trip that was not taken. 
In such cases, the ticket issuing entity would have to submit a revised 
remittance worksheet.\46\ In keeping with other proposed changes to 
remittance timeframes, the revised remittance worksheet would be 
completed and filed for each month during which the ticket or travel 
document-issuing entity certifies that there was a decrease in the 
number of passengers and international passenger AQI user fees 
collected, using the same procedure described in Sec.  354.3(f)(5)(iv) 
of this proposed rule.
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    \46\ https://www.aphis.usda.gov/mrpbs/userfees/aqi-account-credit-req.xlsx.
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AQI Treatment Monitoring

    AQI treatments are performed on some agricultural goods as a 
condition of entry, and others are performed when an actionable pest 
(i.e., a plant pest that should not be allowed to be introduced into or 
disseminated within the United States) is detected during a port-of-
entry inspection. The objective of these AQI treatments is to ensure 
that agricultural goods and commodities entering the United States are 
free from viable plant pests and noxious weeds that would pose a risk 
to the health of U.S. domestic agriculture and natural resources. AQI 
treatment methods include fumigation, cold treatment, irradiation, and 
heat treatment. APHIS activities related to the application of AQI 
treatments include personnel determining the appropriate treatment 
schedule, monitoring the treatment to ensure it takes place in the 
prescribed manner, and determining whether the treatment was 
successful. These AQI services focus on ensuring the effectiveness of a 
given treatment, regardless of its methodology. While AQI treatments 
are usually provided by private entities who charge the importer for 
their services, from time-to-time APHIS will provide the treatment, 
especially for propagative materials. We also develop new methods of 
treatments. These methods increase the effectiveness of treating 
agricultural goods and reduce the risk of dangerous pests entering the 
United States.
    The 2015 final rule established user fees to cover the costs of 
these activities as listed currently in Sec.  354.3(h). Prior to that 
rulemaking, these costs were allocated to the conveyance fees; however, 
a U.S. Government Accountability Office report \47\ recommended that 
treatment monitoring be made a stand-alone fee to improve the 
efficiency of AQI user fees. In recent years, the Senate has included 
language in reports accompanying Agriculture Appropriations legislation 
to reevaluate assessing AQI treatment monitoring fees on a per-
enclosure basis.48 49 50
---------------------------------------------------------------------------

    \47\ https://www.gao.gov/products/gao-13-268.
    \48\ https://www.congress.gov/117/crpt/srpt34/CRPT-117srpt34.pdf.
    \49\ https://www.congress.gov/116/crpt/srpt110/CRPT-116srpt110.pdf.
    \50\ APHIS is exploring several options for AQI user fees after 
FY2028 including a new rulemaking to adjust the fee schedule and a 
rule implementing a notice-based process for inflation adjustments 
for those periods between fee adjustment rulemakings.
---------------------------------------------------------------------------

    APHIS has reevaluated the per-enclosure basis and is proposing an 
hourly rate instead. We are proposing this change for two reasons. 
First, the work of treatment monitoring is clocked in and clocked out 
by an employee devoted solely to monitoring that particular treatment, 
which results in distinct ``blocks'' of treatment oversight. This lends 
itself to an hourly rate because there is an actual computation of the 
amount of time worked on a distinct unit without diversion; we can say 
a specific employee oversaw a specific treatment for 2 hours.
    Conveyance and cargo inspection do not lend themselves as readily 
to an hourly rate. For example, in the commercial vessel environment, 
cargo is routinely offloaded into a joint holding area, and inspected 
en masse, while a separate team inspects the actual vessel. Likewise, 
for commercial aircraft, one employee may make rounds to inspect the 
exterior of recently arrived aircraft for hitchhiking insects while 
another employee inspects offloaded cargo from multiple aircraft in a 
holding area and another employee inspects the cargo hold. In those 
instances, CBP will provide the number of vessels or aircraft 
inspected, and the collective workforce hours it took to inspect, but 
there is not a distinct record of time worked on any one vessel or 
aircraft, and disaggregating the total time worked in order to arrive 
at that figure is unfeasible. Instead, we total the costs associated 
with providing inspections annually, and divide by the number of 
arrivals. This results in an average amount worked, and the fee is 
pegged against that average.
    The second reason, which we discuss below, is that there can be a 
significant variance in the amount of time needed to oversee a 
particular treatment. An in-transit cold treatment may be verified in 
less than 15 minutes, whereas some fumigation treatments must be 
administered over multiple days. These differing requirements for 
treatment oversight lead us to believe that an hourly treatment fee 
would help ensure that parties are treated equitably when assessing 
treatment monitoring fees.
    Under the current regulations in paragraph (h)(1), treatment 
monitoring fees are assessed on a per-treatment basis, e.g., per 
fumigation, cold treatment, etc. For example, a fumigation conducted 
under a single tarp is a single treatment, regardless of the volume 
under the tarp or the number of consignments subjected to the treatment 
under the tarp at one time, and it is subject to one treatment 
monitoring fee. If, however, a single consignment is split into 
multiple separate enclosures due to volume, treatment monitoring fees 
will be assessed for the treatments conducted in each enclosure, even 
if those treatments occurred simultaneously and a single Plant Health 
Safeguarding Specialist (PHSS) monitored them. In some cases, 
therefore, a per treatment approach may not accurately account for the 
time and effort required to perform these treatment monitoring 
services.
    Additionally, the per-treatment approach lacks flexibility. Trade 
needs drive treatment activities, and these needs are not the same at 
all ports of entry. For example, in the northeast, trade primarily 
consists of large volumes of single commodity cargo, which has led to 
large scale treatment enclosures and fewer monitoring events (and thus 
fewer occurrences of the fee). In contrast, South Florida ports-of-
entry have more cargo diversity, resulting in small-scale treatment 
enclosures and more monitoring events (and thus more occurrences of the 
fee).
    Since 2018, the Senate has requested that APHIS evaluate 
alternatives to assessing treatment monitoring fees on a per-treatment 
basis: The Senate Committee on Appropriations \51\ noted that assessing 
AQI treatment monitoring fees on a per-enclosure or per-treatment basis 
imposes disproportionate impacts on industry and user groups at certain 
key ports of entry, including ports along the southeast United States. 
The Senate Committee on Appropriations encouraged USDA to continue 
conducting a study that specifically outlines the actual costs of 
treatments, examines the disproportionate impact the fee has on 
airports and seaports in different regions of the United States,

[[Page 54810]]

and evaluates alternative and equitable funding mechanisms.
---------------------------------------------------------------------------

    \51\ 2018: https://www.govinfo.gov/content/pkg/CRPT-115srpt259/pdf/CRPT-115srpt259.pdf. 2019: https://www.congress.gov/116/crpt/srpt110/CRPT-116srpt110.pdf. 2021: https://www.congress.gov/117/crpt/srpt34/CRPT-117srpt34.pdf.
---------------------------------------------------------------------------

    APHIS has holistically evaluated issues associated with treatment 
monitoring. First, we have determined that there are often significant 
differences in the amount of time and workload necessary to monitor 
certain treatments. For example, in-transit container cold treatments 
require considerably less time to monitor than a tarpaulin-less 
container fumigation.
    Second, we have determined that the only difference in current 
actualized program costs between treatments monitored during regular 
business hours and those performed on overtime is the rate of pay to 
the PHSS(s) conducting the treatment monitoring. For example, APHIS 
assumes the average treatment monitoring event is conducted by a GS-11 
step 5 (mid-career journeyman level). If one takes the average GS-11 
step 5 rate of pay across all locality pay rates,\52\ weighted by the 
number of Federal employees in a given locality,\53\ in 2022 dollars, 
that weighted average is $37.52 per hour. Similarly, the average 
weighted overtime rate for Monday through Saturday and holidays is 
$45.21 per hour and for Sundays $75.05 per hour. The additional cost to 
the AQI program for treatment monitoring during overtime on Mondays 
through Saturdays and holidays is $7.68 per hour, and on Sundays that 
difference is $37.52 per hour (numbers may appear off due to 
rounding).\54\ These cost differences have then been added to the 
proposed base treatment monitoring hourly rate, and then adjusted for 
projected inflation. Tables 4 and 5 of this document reflect these 
calculations.
---------------------------------------------------------------------------

    \52\ https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2022/2022-general-schedule-pay-rates.xls.
    \53\ https://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/reports-publications/major-work-locations-of-the-executive-branch.pdf.
    \54\ See supporting document ``AQI Treatment Monitoring User 
Fee: Change to an Hourly Rate, and Incorporate Reimbursable 
Overtime.'' See footnote 5 for instructions on how to view this and 
other supporting documents on Regulations.gov/.
---------------------------------------------------------------------------

    Finally, APHIS has assessed the role of the party responsible for 
paying the user fee associated with treatment monitoring. In cases in 
which a third-party treatment provider provides the treatment, APHIS 
has determined that the responsible party should be the treatment 
provider. In cases in which APHIS is the treatment provider, APHIS has 
determined that the responsible party should be the importer.
    Based on the foregoing, the proposed rule would restructure the 
treatment monitoring fee to better address the concerns of 
stakeholders, increase program flexibility, and more accurately assign 
costs. Specifically, we would revise Sec.  354.3(h), which lists the 
treatment monitoring fees and related requirements, including those 
pertaining to remittances, statements, and collections, to change the 
structure of the fees from a per-treatment basis to an hourly basis and 
to update those other requirements.
Change From a per-Treatment Basis to an Hourly Basis
    With treatments fees assessed on an hourly rate (in quarter-hour 
increments, rounded up to the next quarter-hour) instead of per-
treatment, the responsible party requesting and receiving treatment 
monitoring services would only be charged for the total time the 
employee spends monitoring the treatments. The hourly rate (as opposed 
to the per-treatment rate) would more accurately reflect the time spent 
and costs incurred for any APHIS treatment monitoring service and, 
therefore, would be fairer and more transparent. The impact of changing 
from a per-treatment basis to an hourly basis on an individual 
treatment provider will depend upon several factors, including number 
of simultaneous treatment monitoring events and duration of treatments.
    To illustrate the impact of the change from per-treatment to 
hourly, consider two common treatment types: In-transit container cold 
treatments and tarp-less container fumigations. The average in-transit 
container cold treatment requires less than 15 minutes of monitoring, 
but the average tarp-less container fumigation requires over 2\1/2\ 
hours (2 hours and 30 minutes) of monitoring. Under the current fee 
schedule, the treatment monitoring fee for both of those treatments 
during regular business hours is $237, regardless of the amount of time 
or effort spent monitoring a treatment. Under the proposed hourly 
scheme at full implementation (FY 2028, Table 4), the in-transit 
container cold treatment would cost $79.21 (assumes 15 minutes; 0.25 
hours x $316.83/hour), and the tarp-less container fumigation would 
cost $792.08 (assumes 2\1/2\ hours; 2.5 hours x $316.83/hour).
    Additional benefits of our proposed hourly rate structure include 
the following:
     Multiple treatments could be monitored by a single PPQ 
employee in a given hour (per local labor agreements), incentivizing 
efficient operations;
     The fee could be implemented in 15-minute increments, 
incentivizing treatment provider investments in automation of treatment 
application; and
     Premium service rates would simplify treatment monitoring 
services provided on reimbursable overtime: One premium rate for Monday 
through Saturday and holidays, and a second premium service rate for 
Sunday.
Applying the Teatment Monitoring Fee to All Treatment Types and 
Treatment-Related Activities
    The range of treatment related activities subject to the proposed 
fee would include phytosanitary treatments under 7 CFR part 305 and in 
the USDA APHIS Treatment Manual,\55\ as well as to the treatment-
preparatory activities of restacking and reconditioning, which are 
discussed earlier in this document under the heading ``Definitions'' 
and below. The current regulations allow the fee to be applied to all 
phytosanitary treatments. However, as a matter of current Agency 
practice, since the 2015 rulemaking, APHIS has only applied the 
treatment monitoring fee to fumigations and cold treatments, and we 
have not been recovering the costs of monitoring other treatment types. 
Moreover, we have not been collecting fees for monitoring activities 
such as restacking and reconditioning. For a treatment to be effective, 
the commodity must meet certain conditions such as sufficient space 
above, below, and between commodity stacks for the movement of air, as 
well as packaging which does not interfere with the treatment. If these 
conditions do not exist at the time of arrival, APHIS must monitor and 
safeguard restacking and reconditioning procedures that will satisfy 
these conditions and make it possible to treat the commodity. The time 
necessary to restack and recondition ranges from an hour to multiple 
days depending upon the condition of the commodity at the time of 
arrival, the type of commodity, the treatment to be performed, etc. The 
practice of not collecting fees for reconditioning and restacking has 
prevented us from recovering any of the costs to APHIS in monitoring 
these activities. As noted earlier, we would also add definitions of 
reconditioning and restacking to Sec.  354.3(a). We are proposing to 
add new paragraphs (h)(1)(ii)(A) through (D), which would describe the 
activities for which the treatment monitoring fees are assessed.
---------------------------------------------------------------------------

    \55\ Treatment schedules will migrate to the Agriculture 
Commodity Import Requirements (ACIR) Database in the future: https://www.aphis.usda.gov/aphis/resources/acir.
---------------------------------------------------------------------------

    The proposed treatment monitoring user fee rates, as listed in 
proposed paragraph (h)(1)(i), are listed in table 4.

[[Page 54811]]

The fees are assessed per employee, per hour conducting the service.

                         Table 4--Treatment Monitoring Fees (Hourly Rate)--Regular Time
----------------------------------------------------------------------------------------------------------------
                                    FY1/1/2024      FY10/1/2024     FY10/1/2025     FY10/1/2026     FY10/1/2027
          Beginning on                FY2024          FY2025          FY2026          FY2027          FY2028
----------------------------------------------------------------------------------------------------------------
                Treatment monitoring and related services performed during regular business hours
----------------------------------------------------------------------------------------------------------------
Regular Time Hourly Rate........         $232.97         $253.19         $273.90         $295.12         $316.83
Quarter Hour Rate...............           58.24           63.30           68.48           73.78           79.21
----------------------------------------------------------------------------------------------------------------

Applying Overtime to Treatment Monitoring Performed Outside of Regular 
Business Hours
    Proposed paragraph (h)(2) would clarify that overtime rates, rather 
than the regular hourly rates, would apply for treatment monitoring 
activities conducted outside of normal business hours. The paragraph 
would further state that the treatment services overtime hourly rate 
would be applied identically to reimbursable overtime and that overtime 
services would incur a minimum charge of 2 hours, unless performed on 
the employee's regular tour of duty and performed in direct 
continuation of the regular tour of duty or begun within an hour of the 
regular tour of duty. Overtime hourly rates for activities conducted on 
Mondays through Saturdays and holidays and Premium hourly rates for 
activities conducted on Sundays would be listed separately in a table 
in paragraph (h)(2).

                           Table 5--Treatment Monitoring Fees (Hourly Rate) --Overtime
----------------------------------------------------------------------------------------------------------------
                                    FY1/1/2024      FY10/1/2024     FY10/1/2025     FY10/1/2026     FY10/1/2027
          Beginning on                FY2024          FY2025          FY2026          FY2027          FY2028
----------------------------------------------------------------------------------------------------------------
  Treatment monitoring and related services performed outside of regular business hours Monday through Saturday
                                                  and Holidays
----------------------------------------------------------------------------------------------------------------
Mon-Sat, Holiday Overtime Hourly         $240.89         $261.36         $282.32         $303.93         $326.04
 Rate...........................
----------------------------------------------------------------------------------------------------------------
Quarter Hour Rate...............           60.22           65.34           70.58           75.98           81.51
----------------------------------------------------------------------------------------------------------------
                         Treatment monitoring and related services performed on Sundays
----------------------------------------------------------------------------------------------------------------
Sunday Premium Hourly Rate......          272.27          294.34          317.62          342.26          368.40
Quarter Hour Rate...............           68.07           73.58           79.41           85.57           92.10
----------------------------------------------------------------------------------------------------------------

Changes to Treatment Monitoring Fee Designation of Responsible Parties 
and Remittance Procedures
    Current paragraphs (h)(2), (3), (4), and (i), contain provisions 
for collection of treatment user fees, remittance and statement 
procedures, payment methods, and liability. The existing regulations in 
(h)(2) and (3) specify that private entities that provide AQI treatment 
services to importers are responsible for collecting the AQI treatment 
user fee from the importer for whom the service is provided and for 
holding those fees separately in a trust for the United States by the 
entity collecting such fees. Paragraphs (h)(4) and (i) contain 
provisions pertaining to remittance and statement procedures and 
payment methods that are outdated, as discussed earlier in relation to 
commercial railroad cars and commercial aircraft fees. Paragraph (j) 
lists hourly and overtime rates for certain treatment monitoring 
services pertaining to solid wood packing material.
    Since implementation of the treatment fees, APHIS has received 
feedback from stakeholders regarding challenges with the structure of 
the fee collection and payment process. Some stakeholders expressed the 
view that because the Agency did not provide an invoice for services 
delivered, tracking APHIS-delivered services fell entirely on the AQI 
treatment provider, which added burden and cost. Another concern was 
that the requirement to set up a separate trust account for user fees 
added cost and burden to business operations compared to typical 
invoice and billing practices. In addition, the Agency had to develop 
procedures to pursue compliance and enforcement actions when funds were 
collected and held in trust, compared to more typical, and efficient, 
billing and debt collection procedures.
    We are therefore proposing a new approach to collection, billing, 
and payment, which we discuss in detail in the paragraphs that follow. 
This approach would reduce cost and burden on treatment providers by 
reducing the need to create new business procedures to monitor, 
collect, and pay treatment monitoring fees to APHIS, while simplifying 
the Agency's procedures to address payment non-compliance.
    The existing regulations in paragraph (h)(3)(i) state that in cases 
in which APHIS is not providing the AQI treatment and collecting the 
associated fee, AQI user fees collected from importers pursuant to 
paragraph (h) 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. We are proposing to clarify responsibility for payment by 
revising paragraphs (h)(3) and (4). For treatments carried out by third 
party treatment providers and monitored by APHIS, APHIS would collect 
the fees from the treatment providers either at the time of service or 
as described below in the discussion of the billing process. For 
treatments conducted by APHIS, APHIS would collect the AQI treatment 
fee at the time the treatment is applied directly from the person 
receiving the services, which, in that case, would be the importer or 
their agent. Because APHIS would issue a bill to all service providers 
who have credit accounts in good standing, or would collect payment at 
the time of service, service

[[Page 54812]]

providers would no longer be required to establish a trust fund 
account.
    Proposed paragraph (h)(5) would describe the billing process. User 
fees for treatment monitoring would be due at the time-of-service 
delivery, unless the treatment provider has established an acceptable 
credit history and opened a customer account with APHIS, in which case 
they can be billed by APHIS for services provided. Proposed paragraph 
(h)(6) would provide the same updated link for payment information 
provided in proposed paragraphs (d) and (e).
    The existing regulations in Sec.  354.3 do not specify consequences 
for late payment or nonpayment of AQI treatment monitoring user fees. 
We propose to add new paragraphs (i)(1) to (5) to explain the 
consequences of and procedures for nonpayment or late payment of 
treatment monitoring user fees, including debt 
collection.56 57 Consequences for nonpayment or late payment 
under proposed paragraph (i) include denial of AQI services, seizure 
and disposal of cargo, assessment of late fees and fees for dishonored 
debt, and reporting by APHIS of delinquent debt to credit reporting 
agencies. Procedures for debt collection, which would be carried out by 
the USDA and the Department of the Treasury on behalf of the USDA, are 
contained in proposed paragraph (i)(5).
---------------------------------------------------------------------------

    \56\ Current paragraph (g) in Sec.  354.3 of the regulations 
covers export certification user fees. Current paragraph (i) in 
Sec.  354.3 contains requirements related to payment methods for 
those export certification user fees only. This proposed rule does 
not address any of those requirements. We are proposing, however, to 
consolidate the export certification user fee requirements presently 
found in paragraph (i) and move them to in Sec.  354.3(g)(6). This 
proposed editorial change would make the regulations clearer and 
easier to use.
    \57\ This change will not affect export certification user fees.
---------------------------------------------------------------------------

    Collectively, proposed paragraphs (h) and (i) would reduce cost and 
burden on treatment providers by reducing the need to create new 
business procedures to hold fees in trust, while codifying and 
streamlining the Agency's procedures to address payment non-compliance. 
The changes would also update addresses and provisions pertaining to 
payment methods in a manner consistent with the updates to the 
corresponding requirements for commercial railroad cars and aircraft.

Technical Amendments

    We are proposing to remove current paragraph (j), which lists 
hourly and overtime charges for certain treatment monitoring services 
pertaining to solid wood packing material. Prior to the adoption of 
International Standards for Phytosanitary Measures (ISPM) 15 \58\ in 
2002, APHIS had specific regulations in 7 CFR 319.40-5(g) and (h) 
regarding solid wood packing material and merchandise from the Peoples 
Republic of China, including Hong Kong, with Sec.  319.40-5(h) 
referring to the fees in Sec.  354.3(j). Adoption of ISPM 15 made Sec.  
319.40-5(g) and (h) obsolete, and APHIS removed them in 2005. Though 
APHIS did not also remove Sec.  354.3(j) from the regulations at that 
time, it, too, has become obsolete because there are no other sections 
of APHIS' regulations pointing to or relying upon Sec.  354.3(j).
---------------------------------------------------------------------------

    \58\ https://www.fao.org/3/mb160e/mb160e.pdf.
---------------------------------------------------------------------------

Records Retention

    To improve monitoring, compliance, and enforcement of this 
regulation, we are proposing to add a new paragraph (j), which would 
contain retention requirements for records related to AQI user fees. 
Proposed paragraph (j)(1) would provide that entities responsible for 
collecting and paying the fees and their agents would be responsible 
for maintaining all records required under Sec.  354.3, as well as 
legible copies of contracts and other agreements made between 
responsible persons and their agents. Under proposed paragraph (j)(2), 
all parties responsible for collecting and paying the fees would have 
to maintain sufficient documentation for APHIS, CBP, and authorized 
representatives to verify the accuracy of the fee collections and 
remittance worksheets. Such information would have to be made available 
for inspection upon APHIS and CBP's demand. Such documentation would be 
required to be maintained in the United States for a period of 5 years 
from the date of fee calculation. Each entity covered by this proposed 
requirement would have to provide to APHIS and CBP the name, address, 
and telephone number of a responsible officer who is able to verify any 
statements or records required to be filed or maintained under this 
section and to promptly notify APHIS and CBP of any changes in the 
identifying information previously submitted. Currently, CBP conducts 
GAO yellow book standard audits of the commercial aircraft fee and 
international air passenger fee on APHIS' and CBP's behalf. APHIS seeks 
to expand this arrangement to include audits of the AQI program's 
commercial railroad car fee and international cruise passenger fee.

Severability

    Finally, we are proposing to add a new Sec.  354.3(k), 
``Severability,'' to address the possibility that this rule, or 
portions of this rule, may be challenged in litigation. It is APHIS' 
intent that the individual sections of this rule be severable from each 
other, and that if any sections or portions of the regulations are 
stayed or invalidated, the validity of the remainder of the sections 
shall not be affected and shall continue to be operative.

Executive Orders 12866 and 13563, and Regulatory Flexibility Act

    This proposed rule has been determined to be significant under 
section 3(f)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' as amended by Executive Order 14094, ``Modernizing Regulatory 
Review,'' and, therefore, has been reviewed by the Office of Management 
and Budget.
    We have prepared an economic analysis for this proposed rule. The 
economic analysis provides a cost-benefit analysis, as required by 
Executive Orders 12866 and 13563, ``Improving Regulation and Regulatory 
Review,'' which direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
and equity). Executive Order 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. The economic analysis also 
provides an initial regulatory flexibility analysis that examines the 
potential economic effects of this proposed rule on small entities, as 
required by the Regulatory Flexibility Act. The economic analysis is 
summarized below. Copies of the full analysis are available by 
contacting the person listed under FOR FURTHER INFORMATION CONTACT or 
on the Regulations.gov website (see ADDRESSES above for instructions 
for accessing Regulations.gov).
    We do not have sufficient information to certify that this proposed 
rule will not have significant economic impact on a substantial number 
of small entities. We have therefore included an Initial Regulatory 
Flexibility Analysis exploring the impacts on small entities. We invite 
comments on potential effects. In particular, we are interested in 
determining the number and kind of small entities that may incur 
benefits or costs from the implementation of this proposed rule.
    The Food, Agriculture, Conservation and Trade (FACT) Act of 1990 
(as amended) [21 U.S.C. 136a] authorizes the Secretary of Agriculture 
to prescribe and collect fees sufficient to cover the

[[Page 54813]]

cost of providing agricultural quarantine and inspection services in 
connection with the arrival at a port in the customs territory of the 
United States, or the preclearance or pre-inspection at a site outside 
the customs territory of the United States, of an international 
passenger, commercial vessel, commercial aircraft, commercial truck, or 
railroad car, and to cover the cost of administering the AQI program. 
The United States Department of Agriculture's (USDA's) Animal and Plant 
Health Inspection Service (APHIS) Plant Protection and Quarantine (PPQ) 
is responsible for developing and setting the Agricultural Quarantine 
and Inspection (AQI) user fee schedule, and related regulatory policy. 
Periodically, APHIS updates the schedule of rates paid by users via the 
rulemaking process. Due to a variety of factors, the current AQI fee 
schedule results in insufficient collections to achieve full cost 
recovery.
    APHIS is proposing a number of revisions to the regulations that 
govern the oversight of phytosanitary treatments, user fee rates, and 
related regulatory requirements for maritime vessels, commercial 
trucks, commercial railroad cars, commercial aircraft, and 
international passengers on airlines and cruise ships. The proposed 
revisions would incorporate adjustments to the cost model that is used 
to calculate the fees.
    This proposed rule would also eliminate an exemption from the 
commercial aircraft fee that currently applies to commercial aircraft 
with 64 or fewer seats that meet certain regulatory requirements; 
eliminate an exemption from the commercial vessel fee that currently 
applies to commercial barges operating between Canada and the United 
States that meet certain regulatory requirements; increase the ``per 
arrival'' multiple used to calculate the fee for a multiple-use 
transponder for commercial trucks; as well as increase the ``per 
arrival'' multiple used to calculate the prepaid railroad car fee and 
apply the fee to all arriving railroad cars.
    This proposed rule also restructures the treatment monitoring fee 
from a ``per treatment'' basis to a three-tier, per employee, hourly 
rate system; applies the treatment monitoring fee to all approved 
phytosanitary treatments; incorporates associated actions, such as 
monitoring restacking and reconditioning, into the fee; and 
incorporates monitoring destructions and other phytosanitary mitigation 
measures, such as seed grinding and steam cleaning, into the fee. The 
proposed rule would also implement a billing process for the treatment 
monitoring fee and move responsibility for paying the fee from the 
importer of record to the party applying the treatment.
    This proposed rule would also update remittance procedures to 
facilitate timely submission of fees. Finally, we have made editorial 
revisions throughout the proposed rule in order to clarify intent in 
the regulations.
    The AQI Program implements a continuum of exclusion strategies and 
activities that mitigate the plant and animal health risks associated 
with the spread of pests and diseases due to global trade, 
international travel, or the smuggling of prohibited agricultural and 
related products. The personnel and support to carry out an effective 
import and pest exclusion program begins before and continues after the 
port-of-entry where inspections often take place. APHIS uses an ABC 
Model to calculate the individual user fees. First, costs are allocated 
to a series of activities. Next, the costs assigned to those activities 
are allocated to the fee areas based on the level of effort associated 
with each fee area. For example, the costs associated with the cargo 
inspection activity (which include the costs of providing the service, 
as well as the administrative and overhead costs associated with 
providing the service) are allocated to the commercial vessel, truck, 
railroad car, and aircraft fees, based on the level of effort in each 
of those fee areas. This cost allocation approach avoids cross-
subsidization (e.g., cargo inspection costs do not get assigned to 
passengers or treatment users).
    When the cost of providing AQI services and the fees paid to fund 
these services do not align, adjustments are a necessary step in 
reaching the goal of full cost recovery. Services in the AQI program 
must be provided, but when the user fee is not covering the costs, the 
user of the service is not bearing the true cost of providing the 
service. This proposed rule would benefit the public by continuing to 
ensure that the fees received from users for providing necessary AQI 
services align with the expenditures associated with providing those 
services.
    AQI services protect American agriculture and natural resources. 
The spread of invasive species harms domestic agricultural producers 
and damages the natural environment. Imported freight constitutes a 
major phytosanitary risk. The wide diversity of origins and commodities 
present multiple opportunities for pests to infest a product or wood 
packing material. AQI services are provided to mitigate such 
phytosanitary risks. To ensure that the expenditures on AQI services 
and the fees applied to those services align, adjustments to the fees 
are necessary. Those most likely to be impacted should this proposed 
rule be finalized are international air and sea passengers, businesses 
within the truck, rail, sea, and air transportation sectors, and 
providers of treatment services. While users of AQI services do incur 
costs in the form of user fees, these user fees help the government to 
recover the costs of providing AQI services. However, the associated 
revenues do not currently align with the costs of providing these AQI 
services and administering the AQI program.
    Individual importers or passengers may experience some financial 
burden from the establishment of or increase in user fees (or relief if 
a fee is reduced), but the AQI services are already being provided and 
thus are already counted as government costs. The revenue from user 
fees for services provided are intended to cover the expenditures for 
those services, a concept known as transfer payments. Examples of 
transfer payments include fees paid to government agencies for services 
provided by the agency. Federal regulations with transfer payments are 
assumed to have a one-to-one effect, balancing benefits and costs.\59\ 
The benefits and costs, as well as the annualized transfer payments are 
summarized in table A.
---------------------------------------------------------------------------

    \59\ Transfer payments are noted by the Office of Management and 
Budget to include ``Fees to government agencies for goods or 
services provided by the agency (monetary transfers from fee payers 
to the government--the goods and services are already counted as 
government costs and including them as private costs would entail 
double counting).'' Federal regulations with transfer payments are 
assumed to have a one-to-one effect on benefits and costs. See: 
Regulatory Impact Analysis: A Primer, page 8. https://www.reginfo.gov/public/jsp/Utilities/circular-a-4_regulatory-impact-analysis-a-primer.pdf.

[[Page 54814]]



     Table A--Accounting Statement of Costs, Benefits, and Transfers
                        Associated With the Rule
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Non-Quantified Benefits...........  The proposed rule would better align
                                      AQI expenditures and revenues by
                                    class. Transfer payments balance the
                                     costs and benefits of the program.
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Non-Quantified Costs..............  Realigned AQI user fees are intended
                                     to cover the costs of providing AQI
                                      services. User fees transfer the
                                       cost of those services from the
                                          government to the users.
------------------------------------------------------------------------
                                Transfers
------------------------------------------------------------------------
Annualized Transfers by user class    7% discount        3% discount
 1 2..............................  rate               rate
                                   -------------------------------------
    Air Passengers................       $471,200,000       $472,500,000
    Commercial Aircraft...........        290,200,000        291,700,000
    Commercial Rail...............         25,730,000         25,920,000
    Commercial Truck \3\..........        113,500,000        114,100,000
    Commercial Vessel.............        186,100,000        186,400,000
    Cruise Vessel Passenger.......         20,120,000         20,170,000
    Treatments ($/Hr.)............         14,430,000         14,520,000
                                   -------------------------------------
        Total \4\.................      1,121,280,000      1,125,310,000
------------------------------------------------------------------------
\1\ Annualized value of transfers from 2024 through 2028; discounted at
  7 and 3 percent, 2022 dollars.
\2\ Estimates of user fee collections (transfers) based on individual
  fee levels for each year of the 5-year implementation schedule (see
  table B) multiplied by an estimate of the activity level in each fee
  category. This activity level estimate is based on the average number
  of each category of arrivals from FY 2017-2019, the 3 years for which
  clean data are available.
\3\ This estimate is based on truck arrivals from FY 2017-2019. To
  account for the change in both the fee level and transponder cap, the
  estimate uses a distribution of one million single payer crossings and
  125,000 transponders.
\4\ Totals may not sum due to rounding.

    The proposed fee schedule would better reflect the costs of AQI 
services provided to commercial cargo vessels, commercial trucks, 
commercial cargo railroad cars, commercial aircraft, and international 
air and sea passengers arriving at U.S. ports; and it would more 
accurately assign costs to treatment monitoring activities (table B).

                                                    Table B--Current and Proposed AQI User Fee Rates
                                                                        [Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Proposed fees
                        Fee area                            Current fee  -------------------------------------------------------------------------------
                                                                               2024            2025            2026            2027            2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air Passenger...........................................            3.83            4.29            4.44            4.60            4.76            4.93
Commercial Aircraft.....................................          225.00          288.41          309.00          330.07          351.64          373.68
Commercial Cargo Vessel.................................          825.00        3,219.29        3,302.23        3,386.20        3,471.18        3,557.18
Commercial Truck........................................            7.29           11.40           12.40           13.45           14.50           15.55
Commercial Cargo Railroad Car...........................            2.00            5.81            6.51            7.23            7.97            8.72
Cruise Vessel Passenger.................................            1.68            1.20            1.25            1.29            1.34            1.39
Treatment:
    (per treatment).....................................          237.00  ..............  ..............  ..............  ..............  ..............
    (per hour)..........................................  ..............          232.97          253.19          273.90          295.12          316.83
--------------------------------------------------------------------------------------------------------------------------------------------------------

Air Passengers

    The air passenger fee would increase from $3.83 to $4.93 by 2028. 
The total fee increase of $1.10 would be approximately a 28.7 percent 
increase from current fees, but only a 0.1 percent increase in the 
average price of an international round-trip airfare. Limitations in 
the amount and nature of data available to the agency make it difficult 
to develop specific conclusions as to how small fee changes will affect 
international air travel overall. However, any change in international 
air travel due to a change of less than one dollar in the price of 
international airfare is likely to be small.

Commercial Aircraft

    The commercial aircraft fee would increase from $225 to $373.68 per 
arrival by 2028. This increase of $148.68 would be approximately a 66 
percent increase from the current fees. Between 2013 and 2019 the 
volume of imports into the United States by air increased by eight 
percent (82 million kg) and the value increased by 57 percent in 
constant dollars. Even after the 66 percent increase, the commercial 
aircraft fee is still the equivalent of 0.05 percent of the value of 
goods being imported by air. In terms of the cargo

[[Page 54815]]

alone, the 2028 commercial aircraft fee rate under this proposal would 
represent approximately $0.069 in dollars-per-kilogram imported by air 
generally. In addition, the commercial aircraft user fee constitutes a 
small portion of the expenses associated with commercial aircraft. And 
moreover, most international arrivals have passenger airfares as a 
primary revenue source. Even with the commercial aircraft fee 
increasing by $148.68 by 2028, the commercial aircraft user fee would 
be the equivalent to approximately 5 minutes of operating costs for 
aircraft.\60\ Limitations in the amount and nature of data available to 
the agency make it difficult to develop specific conclusions as to how 
such a fee change will affect international arrivals of commercial 
aircraft overall. However, the increase in the AQI commercial aircraft 
fee is likely to have a limited impact on aircraft operators.
---------------------------------------------------------------------------

    \60\ Federal Aviation Administration. Economic Values for 
Investment and Regulatory Decisions--Chapter 4: Aircraft Operating 
Costs. March 2021 Update. Retrieved on June 8, 2022, from https://www.faa.gov/sites/faa.gov/files/regulations_policies/policy_guidance/benefit_cost/econ-value-section-4-op-costs.pdf.
---------------------------------------------------------------------------

Small Aircraft Exemption

    The commercial aircraft user fee is not currently applied to the 
international arrivals of certain commercial aircraft with 64 or fewer 
seats. Commercial aircraft with 64 or fewer seats comprised 
approximately 10 percent of arriving international flights from 2016 to 
2018. This proposed rule would result in the removal of this exemption.
    The commercial aircraft fee is based on the average cost of 
clearing commercial aircraft and their cargo. The cost associated with 
any specific aircraft, whether small or large, also depends on a 
variety of other factors because the phytosanitary risk posed by a 
particular aircraft is based upon the country of origin, countries 
transited, type and volume of cargo, country of origin of the cargo, 
and environmental conditions at point of origin and final destination. 
These costs are not currently borne by all operators of commercial 
aircraft with fewer than 65 seats arriving internationally.
    Domestic flights are not subject to the commercial aircraft fee. 
For most operators of small commercial aircraft, domestic flights are 
the greatest portion of their operations and associated revenue. The 
removal of the exemption would only apply to international arrivals of 
aircraft with fewer than 65 seats. Approximately 7 percent of the 
flights of the top 5 small aircraft operators, and less than 5 percent 
of the flights of the top 10 operators, are international arrivals. 
Because we do not have explicit data on the per-flight revenue, profit 
margins, and competitive landscape affecting international arrivals of 
commercial aircraft with 64 or fewer seats, we cannot make specific 
conclusions as to how the collection of this user fee will affect 
individual businesses. We are inviting the public to provide data 
relevant to these and other questions concerning the operation of 
commercial aircraft with fewer than 65 seats arriving internationally. 
We also invite public comment on other matters related to the removal 
of this exemption.

Commercial Cargo Vessel

    The commercial cargo vessel fee would increase from $825 to 
$3,557.18 by 2028. The proposed fee better accounts for the level of 
effort it takes to inspect the average ship and its cargo and reflects 
the expanded capacity of modern container ships. Even with the 
commercial vessel fee increasing by 331 percent to $3,557.18 by 2028, 
the user fee would still represent a fraction of the value of goods 
being imported by vessel generally (0.02 percent). The proposed 
commercial vessel fee rate in 2028 dollars-per-kilogram for vessel 
cargo generally would be less than $0.0006. The proposed commercial 
vessel fee remains very small relative to other vessel operating 
expenses. It is equivalent to approximately 2 percent of a single day's 
fuel consumption for a moderately sized container ship. Limitations in 
the amount and nature of data available to the agency make it difficult 
to develop specific conclusions as to how the proposed fee changes will 
affect international arrivals of commercial cargo vessels overall. 
However, the proposed change to the commercial vessel fee seems likely 
to have a limited impact on the operations of commercial vessels.

Canadian Barge Exemption

    From 2016 through 2018, an annual average of 1,405 commercial 
barges arrived from Canada into the United States, most of which are 
exempt from the current commercial vessel AQI fee. Vessel companies and 
ports facilitating the movement of currently exempted barge shipments 
from Canada and the United States would be affected if the exemption 
were removed. APHIS has concluded that barges from Canada that meet the 
user fee exemption do not pose less of a phytosanitary risk than barges 
travelling from other countries or other vessel types travelling from 
Canada. At the 2028 rate, the commercial cargo vessel fee would be 
approximately $0.001 per kilogram (kg) imported by barge. Because we do 
not have explicit data on international barge traffic revenue, profit 
margins, and the competitive landscape affecting arrivals of currently-
exempt barges from Canada, we cannot make specific conclusions as to 
how the collection of this user fee will affect individual businesses. 
We are inviting the public to provide data relevant to these and other 
questions concerning the operation of currently-exempt barges from 
Canada. We also invite public comment on other matters related to the 
removal of this exemption, or on the proposed rule generally.

Commercial Truck

    The commercial truck fee would increase from $7.29 to $15.55 \61\ 
by 2028, an increase of $8.26 per truck arrival. Between 2013 and 2019 
imports into the United States by truck increased by 397 million kg. 
Even after a 114 percent increase, the user fee of $15.55 proposed in 
2028 for a commercial truck entering the U.S. would be the equivalent 
of 0.034 percent of the average value of goods imported by truck. The 
proposed fee in 2028 in dollars-per-kilogram for truck cargo generally 
would be approximately $0.0014. In addition, this user fee would be the 
equivalent of the operating expenditures of a truck transporting goods 
about nine miles. Limitations in the amount and nature of data 
available to the agency make it difficult to develop specific 
conclusions as to how these proposed fee changes will affect 
international arrivals of commercial trucks overall. However, the 
impact of this proposed fee on the operations of commercial trucks 
seems likely to be limited.
---------------------------------------------------------------------------

    \61\ $15.59 rounded down to the nearest $0.05 (five-cent) 
increment. At CBP's request, we rounded down to the next $0.05 
(five-cent) increment to facilitate operations at the border. CBP 
has indicated that making change at the penny level for single-payer 
trucks would have a negative impact on wait times at the land 
border.
---------------------------------------------------------------------------

Commercial Cargo Railroad Car

    The commercial cargo railroad car fee would increase from $2 to 
$8.72 per arriving railroad car by 2028, a total increase of $6.72. 
Between 2013 and 2019, imports into the United States by rail remained 
relatively constant, but technology improvements have allowed for a 
reduction in the number of railroad cars assessed the commercial 
railroad car fee. Even after a total increase of approximately 337 
percent, the commercial cargo railroad car fee would still be the 
equivalent of approximately 0.029 percent of the value of goods being 
imported on by railroad car. The

[[Page 54816]]

proposed fee in 2028 in dollars-per-kilogram for commercial railroad 
cars generally would have been approximately $0.0004. Limitations in 
the amount and nature of data available to the agency make it difficult 
to develop specific conclusions as to how these proposed fee changes 
will affect international commercial cargo railroad arrivals overall. 
However, the proposed change to this fee seems likely to have a limited 
impact on commercial cargo rail operations.

Cruise Vessel Passenger

    The cruise vessel passenger fee would decline by 31 percent 
initially, and still be 21 percent lower than the current fee by 2028, 
an overall decline of $0.29 per passenger arrival. Limitations in the 
amount and nature of data available to the agency make it difficult to 
develop specific conclusions as to how small fee changes will affect 
international cruise passenger arrivals overall. However, a decrease of 
$0.29 in the fee represents less than a 0.02 percent decrease in the 
cost of a 7-day cruise.

Treatment Monitoring

    APHIS monitors phytosanitary treatments to ensure that they are 
conducted as prescribed. Shifting the treatment monitoring fee to an 
hourly basis would reduce the cost of treatment monitoring for many 
treatment providers. Multiple treatments can often be monitored by a 
single PPQ employee in a given hour, and the proposed hourly fee can be 
implemented in 15-minute increments. The impact of shifting to an 
hourly fee would vary from user to user, as the cost would depend on 
the amount of time spent monitoring treatments rather than on the 
number of treatment enclosures. It is, however, likely that impacts 
from the proposed changes would be lower under an hourly fee than they 
would be under the current per-treatment fee. Providers of some 
treatment services are not currently subject to the treatment 
monitoring fee and would be impacted by the proposed rule. Because we 
do not have explicit data on those providers affected by the proposed 
changes, we cannot make specific conclusions as to how the collection 
of this user fee will affect individual businesses. We are inviting the 
public to provide data relevant to these and other questions concerning 
treatment operations.
    APHIS estimates the total annualized cost of the paperwork and 
recordkeeping associated with this proposed rule to be $104,039. 
Reporting and recordkeeping requirements associated with the proposed 
rule are discussed in the rule under the heading ``Paperwork Reduction 
Act.''
    While the Small Business Administration has set small-entity 
standards for the transportation sectors, the size data do not 
distinguish between transportation firms that operate internationally 
and those firms that only operate within the United States. Most 
businesses that would be affected by the rule are likely to be small. 
This RIA and initial regulatory flexibility analysis addresses possible 
effects of the proposed rule on small-entity stakeholders and their 
operations.
    We recognize we may not have all relevant information concerning 
economic impacts at this time. Therefore, we invite the public to 
comment on the proposed rule and provide any additional relevant 
information. We also invite public comments on alternatives that may 
achieve the objective of this proposed rule.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
``Civil Justice Reform.'' If this proposed rule is adopted: (1) All 
State and local laws and regulations that are inconsistent with this 
rule will be preempted; (2) no retroactive effect will be given to this 
rule; and (3) administrative proceedings will not be required before 
parties may file suit in court challenging this rule.

Executive Order 13175

    This proposed rule has been reviewed in accordance with the 
requirements of Executive Order 13175, ``Consultation and Coordination 
with Indian Tribal Governments.'' Executive Order 13175 requires 
Federal agencies to consult and coordinate with tribes on a government-
to-government basis on policies that have tribal implications, 
including regulations, legislative comments or proposed legislation, 
and other policy statements or actions that have substantial direct 
effects on one or more Indian Tribes, on the relationship between the 
Federal Government and Indian Tribes or on the distribution of power 
and responsibilities between the Federal Government and Indian Tribes.
    APHIS has determined that this proposed rule, if finalized, does 
not have substantial direct effects on one or more Tribes; however, 
APHIS continues to seek opportunities to engage Tribal nations and 
their communities on new rulemaking. Accordingly, on July 18, 2022, 
APHIS held an initial listening session for Tribal nations regarding 
the provisions of the rule. No comments or concerns were received 
regarding that listening session. However, should a Tribe request 
consultation, APHIS will collaborate with the Office of Tribal 
Relations to ensure meaningful consultation occurs. APHIS is committed 
to full compliance with the provisions of Executive Order 13175.

Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or 
recordkeeping requirements included in this proposed rule have been 
submitted for approval to the Office of Management and Budget (OMB). 
Written comments and recommendations for the proposed information 
collection should be sent within 60 days of publication of this 
document to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under Review--Open for 
Public Comments'' or by using the search function. Please send a copy 
of your comments to: (1) Docket No. APHIS-2022-0023, Regulatory 
Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road 
Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, OCIO, 
USDA, room 404-W, 14th Street and Independence Avenue SW, Washington, 
DC 20250. A comment to OMB is best assured of having its full effect if 
OMB receives it within 30 days of publication of this proposed rule.
    The processes involving the agricultural quarantine and inspection 
user fees and changes proposed in this document involve information 
collection, reporting, and recordkeeping requirements in the form of 
paper, electronic submissions, and information systems. In conjunction 
with the proposed changes to provide for cost recovery for services, we 
have considered each proposed change and their impact(s) on these 
burdens. These changes concern adjusting fee amounts, adjusting caps on 
certain prepaid fees, removing exemptions, changing certain fees from 
flat to hourly rates, updating requirements for fee remittances and 
statement, and providing electronic payments and statement options.
    User fee information collection activities are reported in 
information collection 0579-0055. This proposed rule will add 
additional respondents to activities related to preparation and 
submission of monthly statement submissions for commercial railroad 
cars and commercial aircraft, and user fees for international air and 
cruise passengers. There is also one new information collection 
activity that formalizes new recordkeeping and record retention 
requirements. The new

[[Page 54817]]

recordkeeping burden is associated with applications for credit 
accounts and requests for services; collection of user fees in 
connection with the arrival and inspection of commercial vessels, 
railroad cars, commercial aircraft, trucks, and international air and 
cruise passengers; collection of user fees for conducting and 
monitoring treatments; and issuing and use of electronic transponders.
    Changes prescribed in this proposed rule may increase or decrease 
burden on respondents and affect one or multiple fee categories.
    a. Commence Charging for Empty Railroad Cars.
    (1) We will start charging for empty railroad cars. The changes in 
burdens here would be two-fold: (a) We will need to identify the burden 
involved with existing companies paying for loaded railroad cars to 
also identify how many empty railroad cars they will now be paying for 
and (b) possible burdens involved with any railroad company who is in 
the business of only moving empty railroad cars.
    (2) Our current burden assumption includes 5 minutes per railroad 
company to submit user fees for their railroad cars. We assume if we 
commence charging for empty railroad cars, there would be an overall 
increase in burden of 5 percent in that time will be spent determining 
how many empty railroad cars each of the current railroad companies 
remitting the fees must spend to identify how many empty cars they 
would then be remitting for. A 5 percent increase in the 5-minute time 
value is 0.25 minutes or 15 seconds.
    (3) In addition, we assume there is one railroad company whose 
business is only moving empty railroad cars, and that company would be 
required to start paying user fees for their empty cars. With railroad 
companies remitting fees monthly, we assume this railroad company would 
have the new burden of remitting fees 12 times per year. These 
assumptions on the impact on the burdens of the Federal Government 
commencing charging for empty railroad cars increases the overall 
estimated burden on the public by 2 hours.
    b. Removal of the Exemption for Barges. Currently barges are 
eligible for exemption if they travel solely between the United States 
and Canada; that do not carry cargo originating from countries other 
than the United States or Canada; that do not carry plants or plant 
products; that do not carry animals or animal products; and that do not 
carry soil or quarry products from areas in Canada listed in 7 CFR 
319.77-3 as being infested with gypsy moth. As discussed above, we are 
proposing to eliminate this exemption. Department of Transportation 
Statistics identify 76 barge companies operating between the United 
States and Canada. We make the assumption barge companies move once a 
month, so the increase in burden is 912 occurrences. Our current burden 
assumption includes less than 1 minute per barge company to submit user 
fees in addition to their U.S. Customs and Border Protection fee. The 
overall impact of this change would be an increase of less than 1 hour.
    c. Commercial Vessel Fee Exemption for Commercial Cruise 
(Passenger) Vessels That Carry Passengers Paying the International 
Passenger Fees. The commercial vessel fee would not apply to commercial 
cruise (passenger) vessels that carry passengers paying the 
international passenger fees under paragraph (f) of Sec.  354.3, 
because the cost of inspecting the entirety of the vessel is included 
in the international cruise passenger fee, and cruise vessels do not 
generally carry commercial cargo. In October 2022, we estimated there 
will be 29,009 cruise vessels trips that would be subject to paying the 
vessel fee over a 6-year period. This yields about 4,834 cruise vessels 
trips per year. [29,009/6 = 4,834]. Applying an estimate that cruise 
ships run 12 times a year, we obtain the number of impacted commercial 
cruise (passenger) vessels to be 403 per year. [4,834/12 = 403] and the 
number of paying cruise vessel companies to be 14. Our current burden 
assumption includes less than 1 minute per commercial cruise 
(passenger) vessel company to submit user fees in addition to their 
U.S. Customs and Border Protection fee. The overall impact of this 
change would be a decrease of less than 1 hour.
    d. Commence Charging for Empty Trucks and Truck Cabs. We are 
proposing to add a sentence to paragraph (c)(1) of Sec.  354.3 stating 
that the AQI user fee would apply to all commercial trucks, regardless 
of what they are carrying, including empty trucks and truck cabs. 
Because many truck haul freight in one direction across the U.S. 
border, and because there may be additional movements of empty trucks 
and truck cabs, we estimate there are 1,521,600 empty truck and truck 
cab entries per year which could have an increased burden of less than 
1 minute each. These entries are a mix of both single payer entries and 
annual pass owner entries. The overall impact of this change would be 
an increase of 1,268 respondent hours per year.
    e. Commercial Railroad Companies' Use of Remittance Worksheets. As 
discussed above, we are planning to use remittance worksheets for the 
respondents to submit along with payments. This is designed to simplify 
the data elements respondents report. We assume this change will cut 
the time it takes for 27 railroad companies to remit their payments by 
a third. 27 commercial railroad companies remitting 12 times a year is 
324 submissions per year. We assume it ordinarily takes about 5 minutes 
per submission, so with a reduction of this amount by one third, we 
estimate the overall impact of this change would be decrease of 9 
respondent hours per year.
    f. Commercial Railroad Companies' Requirement to Complete Transfers 
of Responsibility. Proposed paragraph (d)(6)(ii) of Sec.  354.3 would 
state that the agent or other responsible person for a payment remains 
the agent or responsible person unless a transfer of responsibility is 
approved by APHIS. Before such a transfer could take place, the agent 
or responsible person would first have to contact APHIS to initiate the 
transfer. Once APHIS approves the transfer, the new agent or 
responsible person would assume all responsibilities for ensuring 
compliance with the requirements of part 354. We estimate 12 commercial 
railroad companies may need to exert time and effort to do so, which 
would create a new burden for them. We estimate each action will take 
10 minutes leading to an overall impact of this new requirement to be 
an increase in two respondent hours per year. We estimate each action 
will take 10 minutes leading to an overall impact of this new 
requirement to be an increase in 2 respondent hours per year.
    g. Removal of Aircraft Exemption with 64 or Fewer Seats. The 
proposed removal of paragraph (e)(2)(iv) of Sec.  354.3, which exempts 
from AQI user fees certain passenger aircraft with 64 or fewer seats 
will create a new burden for those aircraft. Of an estimated 331 
airlines with arriving international flights into the U.S. we estimate 
19 percent of these airlines fall into this exemption category or 63 
airlines. [331 * 19% = 63] With airlines being required to remit fees 
four times per year, this leads to an estimated 252 possible new burden 
actions. Our current burden assumption includes 5 minutes per 
submission, so the overall impact of the removal of this exemption on 
respondents would be an increase of 21 respondent hours per year.
    h. Commercial Airlines' Use of Remittance Worksheets. As discussed 
above, we are planning to use remittance worksheets for the respondents 
to submit along with

[[Page 54818]]

payments. This is designed to simplify the data elements respondents 
report. We assume this change will cut the time it takes for 331 
airlines to remit their payments by a third. 331 airlines remitting 4 
times a year is 1324 submissions per year. We assume it ordinarily 
takes about 10 minutes per airline submission, so with a reduction of 
this amount by one third, we estimate the overall impact of this change 
would be decrease of 74 respondent hours per year.
    i. Change in Commercial Airlines' Fee Remittances to Monthly rather 
than Quarterly. Proposed changes to paragraph (e)(3) of Sec.  354.3 
include decreasing the period for payment of the fees and submission of 
remittance reports from quarterly to monthly. This would triple the 
current burden on these respondents; however, it is important to note 
burden (h) above will also have an impact on commercial airlines' 
burden. Using an estimated 331 airlines x 3 (a tripling of their 
current submission frequency) = 993 new occurrences. These occurrences 
will take 6.67 minutes [\2/3\ of the normal 10 minutes submission time 
assumption used as a starting point for burden (h)]/60 minutes--an 
overall impact of this change to be an increase of 110 respondent hours 
per year.
    j. Commercial Airlines to Make Refunds of AQI International Airline 
Passenger Fees to Ticket Purchasers when Passengers Do Not Ultimately 
Take Their Journey. The ticket issuing entity would have to submit a 
revised remittance worksheet showing the number of passengers who 
traveled and those passengers that did not ultimately travel who 
received user fee reimbursements. In keeping with other proposed 
changes to remittance timeframes, the revised remittance worksheet 
would be completed and filed for each month during which the ticket 
issuing entity certifies that there was an increase or decrease in the 
number of passengers and AQI fees collected, using the procedure 
described in Sec.  354.3(f)(5)(iv) of this proposed rule. This 
represents an increase in respondent burden hours. We estimate this 
would affect one third of the 331 airlines. 331 airlines x 12 
remittances per year per airline = 3972 occurrences. 3972 occurrences/3 
impacted = 1324 occurrences with increased burdens. 1324 occurrences 
with increased burdens x 3 minutes/60 minutes per hour = an estimated 
increase of 66 respondent burden hours per year.
    k. Proposed Commencing of Charging the Phytosanitary Treatment User 
Fees Under 7 CFR part 305 and in the USDA, APHIS Treatment Manual and 
Treatment Preparatory Activities of Restacking and Reconditioning. We 
are proposing to add new paragraphs (h)(1)(ii)(A) through (D) to Sec.  
354.3, which would describe the activities for which the treatment 
monitoring fees are assessed. Charging for these activities will cause 
an increased burden for these respondents. We estimate there will be 
about 1,654 additional irradiation treatments and 1,190 heat 
treatments. 1,654 + 1,190 = 2,844 new chargeable treatments. 2,844 x an 
estimated 5 minutes per treatment = an estimated increase of 237 
respondent burden hours per year.
    l. New Billing Process for Treatment Monitoring. Above we have 
proposed a new billing process in paragraph (h)(5) of Sec.  354.3 which 
would describe the billing process. User fees for treatment monitoring 
would be due at the time-of-service delivery, unless the treatment 
provider has established an acceptable credit history and opened a 
customer account with APHIS, in which case they can be billed by APHIS 
for services provided. There are about 50 treatment facilities of which 
we estimate about half would want to be billed. One half of 50 
treatment facilities = 25 facilities who would want to be billed. Timed 
trials show the application for an account takes approximately 8.4 
minutes to complete. 25 x 8.4 minutes = 3.5 hours new burden during the 
initial year half of the treatment facilities would decide to open 
accounts. The assumptions made and this approach are considered 
reasonable.
    m. Consequences for Late Payment or Nonpayment of AQI Treatment 
Monitoring User Fees. The existing regulations in Sec.  354.3 do not 
specify consequences for late payment or nonpayment of AQI treatment 
monitoring user fees. To remedy that omission, we propose to add new 
paragraphs (i)(1) to (5) to Sec.  354.3 to explain the consequences of 
and procedures for nonpayment or late payment of treatment monitoring 
user fees, including debt collection. We estimate six treatment 
facilities will incur an increased time burden of 20 minutes each for a 
total estimated increase in respondent burden of 2 hours.
    n. Reduction in the Need to Create New Business Procedures to Hold 
Fees in Trust. Above, we propose in paragraphs (h) and (i) of Sec.  
354.3 to reduce cost and burden on treatment providers by reducing the 
need to create new business procedures to hold fees in trust, while 
codifying and streamlining the Agency's procedures to address payment 
non-compliance. We estimate this will save 50 treatment facilities 4.75 
hours per year for a total of 237 reduction in respondent burden hours 
each year.
    o. Records Retention Requirements. To improve monitoring, 
compliance, and enforcement of this regulation, we are proposing to add 
a new paragraph (j) to Sec.  354.3, which would contain retention 
requirements for records related to AQI user fees. Proposed paragraph 
(j)(1) would state that entities responsible for collecting and paying 
the fees and their agents would be responsible for maintaining all 
records required under Sec.  354.3, as well as legible copies of 
contracts and other agreements made between responsible persons and 
their agents. Under proposed paragraph (j)(2), all parties responsible 
for collecting and paying the fees would have to maintain sufficient 
documentation for APHIS, CBP, and authorized representatives to verify 
the accuracy of the fee collections and remittance worksheets. Such 
information would have to be made available for inspection upon APHIS 
and CBP's demand. Such documentation would be required to be maintained 
in the United States for a period of 5 years from the date of fee 
calculation. Each entity covered by this proposed requirement would 
have to provide to APHIS and CBP the name, address, and telephone 
number of a responsible officer who is able to verify any statements or 
records required to be filed or maintained under this section and to 
promptly notify APHIS and CBP of any changes in the identifying 
information previously submitted. We estimate there to be approximately 
500 entities affected by this requirement. At 1 minute per entity for 
records retention, we estimate the increase in respondent burden to be 
about 8 hours.
    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the new activities and the additional 
burden associated with this proposed rule have been submitted to OMB as 
a new information collection for approval. If a final rule is 
published, this information collection request will be scheduled for 
merger into 0579-0055.
    We are soliciting comments from the public (as well as affected 
agencies) concerning our proposed reporting and recordkeeping 
requirements. These comments will help us:
    (1) Evaluate whether the proposed information collection is 
necessary for the proper performance of our agency's functions, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of our estimate of the burden of the 
proposed

[[Page 54819]]

information collection, including the validity of the methodology and 
assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the information collection on those who 
are to respond (such as through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology; e.g., permitting electronic 
submission of responses).
    Estimate of burden: The public burden for this collection of 
information is estimated to average 0.001 hours per response.
    Respondents: Individuals and private and commercial importers or 
exporters of agricultural plants and animals or their products.
    Estimated annual number of respondents: 35,374.
    Estimated annual number of responses per respondent: 43.
    Estimated annual number of responses: 1,535,575.
    Estimated total annual burden on respondents: 2,172 hours. (Due to 
averaging, the total annual burden hours may not equal the product of 
the annual number of responses multiplied by the reporting burden per 
response.)
    A copy of the information collection may be viewed on the 
Regulations.gov website or in our reading room. (A link to 
Regulations.gov and information on the location and hours of the 
reading room are provided under the heading ADDRESSES at the beginning 
of this proposed rule.) Copies can also be obtained from Mr. Joseph 
Moxey, APHIS' Paperwork Reduction Act Coordinator, at (301) 851-2483. 
APHIS will respond to any information collection review-related 
comments in the final rule. All comments will also become a matter of 
public record.

E-Government Act Compliance

    The Animal and Plant Health Inspection Service is committed to 
compliance with the E-Government Act to promote the use of the internet 
and other information technologies, to provide increased opportunities 
for citizen access to Government information and services, and for 
other purposes. APHIS is working with U.S. Customs and Border 
Protection to explore options for further improving, streamlining, and 
automating user fee payment in the field, especially trucks and 
maritime ``real time'' payment procedures, and transponders. For 
information pertinent to E-Government Act compliance related to this 
proposed rule, please contact Mr. Joseph Moxey, APHIS' Paperwork 
Reduction Act Coordinator, at (301) 851-2483.

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.
    Accordingly, APHIS is proposing to amend 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 continues to read as follows:

    Authority:  7 U.S.C. 7701-7772, 7781-7786, 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. Revise Sec.  354.3 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 (USDA).
    Arrival. Arrival at a port of entry, as listed in 19 CFR 101.3, in 
the customs territory of the United States or at any place serviced by 
any such port of entry.
    Barge. A non-self-propelled commercial vessel that transports cargo 
that is not contained in shipping containers. This does not include 
integrated tug barge combinations.
    Calendar year. The period from January 1 to December 31, inclusive, 
of any particular year.
    Certificate. Any certificate issued by or on behalf of APHIS 
describing the condition of a shipment of plants or plant products for 
export, including but not limited to Phytosanitary Certificate (PPQ 
Form 577), Export Certificate for Processed Plant Products (PPQ Form 
578), and Phytosanitary Certificate for Reexport (PPQ Form 579).
    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. Any carrying vehicle, measured from 
coupler to coupler and designed to operate on railroad tracks, other 
than a locomotive or a caboose.
    Commercial shipment. A shipment for gain or profit.
    Commercial truck. Any self-propelled vehicle, including an empty 
vehicle or a truck cab without a trailer, which is designed and used 
for the transportation of commercial merchandise or for the 
transportation of non-commercial merchandise on a for-hire basis.
    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 and Border Protection (CBP). U.S. 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 (7 U.S.C. 7701 et seq.).
    Passenger. A natural person for whom transportation is provided, 
including infants, whether a separate ticket or travel document is 
issued for the infant, or the infant or toddler occupies a seat, or the 
infant or toddler is held or carried by another passenger.
    Person. An individual, corporation, partnership, trust, 
association, or any other public or private entity, or any officer, 
employee, or agent thereof.
    Reconditioning. The removal or alteration of packaging associated 
with commercial cargo.
    Restacking. The redistribution of commercial cargo within or 
removal from a shipping container or other conveyance.
    (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 U.S.-flag vessel proceeding 
coastwise under 19 CFR 4.85, shall, upon arrival, proceed to CBP and 
pay an agricultural quarantine and inspection (AQI) user fee. The base 
AQI user fee for each arrival is shown in table 1. The fee will be paid 
for each arrival regardless of the number of arrivals taking place in 
the course of a single voyage.

[[Page 54820]]



Table 1 to Paragraph (b)(1)--Fee for Inspection of Commercial Vessels of
                          100 Net Tons or More
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
Beginning January 1, 2024...................................   $3,219.29
October 1, 2024.............................................    3,302.23
October 1, 2025.............................................    3,386.20
October 1, 2026.............................................    3,471.18
October 1, 2027.............................................    3,557.18
------------------------------------------------------------------------

    (2) The following categories of commercial vessels are exempt from 
paying an AQI user fee:
    (i) Commercial cruise vessels carrying passengers paying fees under 
paragraph (f) of this section;
    (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 fuel, sea stores, 
or ship's stores;
    (v) Tugboats towing vessels on the Great Lakes; and
    (vi) Vessels returning to the United States after traveling to 
Canada solely to take on fuel.
    (c) Fee for inspection of commercial trucks--(1) On-arrival 
payment. Upon arrival at a CBP port of entry, the driver or other 
person in charge of a commercial truck that is subject to inspection 
under part 330 of this chapter or under 9 CFR, chapter I, subchapter D, 
must tender the AQI user fees to CBP, unless they have been prepaid as 
provided for in paragraph (c)(2) of this section. APHIS strongly 
encourages electronic remittance of fees. The fee applies to all 
commercial trucks, regardless of what they are carrying, as well as 
empty trucks and truck cabs (see table 2).

  Table 2 to Paragraph (c)(1)--Fee for Inspection of Commercial Trucks
------------------------------------------------------------------------
                                                              Amount
                                            Amount (per      (prepaid
             Effective date                arrival) \1\    annual fees)
                                                                \2\
------------------------------------------------------------------------
Beginning January 1, 2024...............          $11.40         $686.40
October 1, 2024.........................           12.40          746.40
October 1, 2025.........................           13.45          808.20
October 1, 2026.........................           14.50          870.60
October 1, 2027.........................           15.55          935.40
------------------------------------------------------------------------
\1\ Rounded down to the next $0.05 (five-cent) increment to facilitate
  border operations.
\2\ Prepaid fees are set at 60 times the unrounded fee rates: $11.44,
  $12.44, $13.47, $14.51, $15.59.

    (2) Prepayment. (i) The owner, their agent, or person in charge of 
a commercial vehicle may at any time prepay the commercial truck AQI 
fee as defined in paragraph (c)(1) of this section for all arrivals of 
that vehicle during a calendar year or any remaining portion of a 
calendar year. The prepayment transponder fee is set at 60 times the 
unrounded per arrival fee. Prepayment of the AQI fee must be made in 
accordance with the procedures and payment methods set forth in 19 CFR 
24.22. The following information must be provided, together with the 
prepayment amount for each arrival:
    (A) Vehicle make, model, and model year;
    (B) Vehicle Identification Number (VIN);
    (C) License numbers issued by State, Province, or country; and
    (D) Owner's name and address.
    (ii) Purchases of transponders may be made at any time during a 
calendar year; APHIS will not prorate for the portion of the calendar 
year already elapsed, nor refund single-crossing fees already paid.
    (d) Fee for inspection of commercial railroad cars--(1) General 
requirement. Except as provided in paragraph (d)(2) of this section, an 
AQI user fee will be charged for each commercial railroad car (loaded 
or empty) which is subject to inspection under part 330 of this chapter 
or under 9 CFR chapter I, subchapter D, upon each arrival, as indicated 
in table 3. The railroad company receiving a railroad car in 
interchange at a port of entry or, barring interchange, the company 
moving a car in line haul service into the customs territory of the 
United States, will be responsible for payment of the fee. Payment of 
the fee must be made in accordance with the procedures set forth in 
paragraph (d)(3) or (4) of this section. For purposes of this 
paragraph, the term ``railroad car'' means any carrying vehicle, 
measured from coupler to coupler and designed to operate on railroad 
tracks. If the AQI user fee is prepaid for all arrivals of a commercial 
railroad car during a calendar year or any remaining portion of a 
calendar year, the AQI user fee is an amount 48.32 times the AQI user 
fee for each arrival.

 Table 3 to Paragraph (d)(1)--Fee for Inspection of Commercial Railroad
                                  Cars
------------------------------------------------------------------------
                                            Amount (per       Amount
             Effective date                  arrival)        (prepaid)
------------------------------------------------------------------------
Beginning January 1, 2024...............           $5.81         $278.88
October 1, 2024.........................            6.51          312.48
October 1, 2025.........................            7.23          347.04
October 1, 2026.........................            7.97          382.56
October 1, 2027.........................            8.72          418.56
------------------------------------------------------------------------

    (2) Exemptions. The following categories of commercial railroad 
cars are exempt from paying an AQI user fee:
    (i) Any commercial railroad car that is part of a train whose 
journey originates and terminates in Canada, if:
    (A) The commercial railroad car is part of the train when the train 
departs Canada; and

[[Page 54821]]

    (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 the United States.
    (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. The owner, agent, or person in charge of a railroad 
company may at any time prepay the commercial railroad car AQI fee as 
defined in paragraph (d)(1) of this section for all arrivals of that 
railroad car during a calendar year or any remaining portion of a 
calendar. This payment must be remitted in accordance with paragraph 
(d)(4)(iii) of this section.
    (4) Remittance worksheet procedures. The Association of American 
Railroads (AAR), the National Railroad Passenger Corporation (AMTRAK), 
and railroad companies acting individually shall file monthly 
Remittance Worksheets with USDA, APHIS, FMD, within 90 days after the 
end of each calendar month. Each remittance worksheet shall indicate:
    (i) The number of commercial railroad cars entering the customs 
territory of the United States during the relevant period by railroad 
company;
    (ii) The total monthly AQI user fees due from each railroad 
company; and
    (iii) In the case of prepayments to cover all annual arrivals of 
certain railroad car(s) in accordance with paragraph (d)(3) of this 
section; include the number of railroad cars being prepaid for, 
railroad car number(s) covered by the prepayment and the calendar year 
to which the prepayment applies.
    (iv) Railroad companies may include the remittance worksheet with 
their mailed payment as directed in this paragraph (d)(4). For all 
other payment types, the companies must email the remittance worksheet 
to [email protected]. Individual railroad companies must submit a 
remittance worksheet for periods with no fees collected. Detailed 
remittance instructions are located at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees. Questions and 
correspondence may be directed to [email protected] or (612) 336-
3400 (fax) or (877) 777-2128 (phone).
    (5) Payment procedures. (i) If the railroad company intends to pay 
monthly, the owner, agent or person in charge of an individual railroad 
company shall pay the AQI user fees calculated by the Association of 
American Railroads (AAR), the National Railroad Passenger Corporation 
(AMTRAK), or the individual railroad company itself within 60 days 
after the end of each calendar month in which commercial railroad cars 
entered the customs territory of the United States.
    (ii) If the owner, agent or person in charge of an individual 
railroad company intends to prepay for railroad car(s) for the entire 
calendar year, as specified in paragraph (d)(3) of this section, 
prepayment may be made at any time during a calendar year; APHIS will 
not prorate for the portion of the calendar year already elapsed, nor 
refund or credit per arrival fees already paid.
    (iii) Remittance worksheets as described in paragraph (d)(4) of 
this section, are required to accompany all payments. Detailed payment 
instructions are located at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees. Questions and correspondence may be 
sent to [email protected], fax (612) 336-3400 or phone (877) 777-
2128.
    (6) Compliance. (i) AAR, AMTRAK, and each railroad company 
responsible for making AQI user fee payments must allow APHIS, CBP, and 
authorized representatives to verify the accuracy of AQI user fees 
collected and remitted and otherwise determine compliance with 21 
U.S.C. 136a and this paragraph (d). The AAR, AMTRAK, and each railroad 
company responsible for making AQI user fee payments must advise the 
USDA, APHIS, FMD of the name, address, and telephone number of an agent 
or other responsible person who is authorized to verify AQI user fee 
calculations, collections, and remittance worksheets, payments, as well 
as any changes in the identifying information submitted.
    (ii) The agent or other responsible person for a payment remains 
the agent or responsible person until the railroad company notifies 
APHIS of a transfer of responsibility. The agent or responsible person 
must contact APHIS to initiate any transfer by contacting 
[email protected]. The new agent or responsible person assumes all 
responsibilities for ensuring compliance for meeting the requirements 
of this part.
    (e)(1) Fee for inspection of commercial aircraft. 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 CBP ``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 or their agent 
is responsible for paying the AQI user fee. The AQI user fee for each 
arrival is shown in table 4:

 Table 4 to Paragraph (e)(1)--Fee for Inspection of Commercial Aircraft
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
Beginning January 1, 2024...................................     $288.41
October 1, 2024.............................................      309.00
October 1, 2025.............................................      330.07
October 1, 2026.............................................      351.64
October 1, 2027.............................................      373.68
------------------------------------------------------------------------

    (2) Exemptions. The following categories of commercial aircraft are 
exempt from paying an AQI user fee:
    (i) [Reserved]
    (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 aircraft moving from the U.S. Virgin Islands to Puerto 
Rico; and
    (v) Any aircraft making an in-transit 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 
CBP, 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 worksheet and payment procedures. (i) The carrier or 
their agent must pay the appropriate fees for receipt no later than 90 
days after the close of the month in which the aircraft arrivals 
occurred. APHIS strongly encourages electronic payment of fees. To set 
up electronic payment refer to our detailed instructions at https://
www.aphis.usda.gov/mrpbs/

[[Page 54822]]

userfees/aqi-payment-types.pdf or for further information relative to 
electronic remittance, contact [email protected]. In the event 
electronic remission is impractical, a check or money order can be 
mailed to the Agency lock box following detailed payment instructions 
at https://www.aphis.usda.gov/mrpbs/userfees/aqi-payment-types.pdf. 
Questions and correspondence may be directed to [email protected] or 
to (612) 336-3400 (fax) or (877) 777-2128 (phone). For payment 
information, refer to our detailed payment instructions at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi_user_fees. Late payments will be subject to interest, penalty, and 
a charge to cover the cost of processing and handling a delinquent 
claim 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 carrier or their agent must provide a remittance worksheet 
each month stating the fees that are due for the month. Carriers or 
their agents must include a hard copy of the remittance worksheet with 
any mailed payment. For all other payment types, including for months 
with no fees collected, the carriers must email the remittance 
worksheet to [email protected].
    (iii) The remittance worksheet is a written statement that must 
include the following information:
    (A) Name and address of the person making the payment;
    (B) Calendar month covered by the payment;
    (C) Amount being paid, or a remittance worksheet stating that no 
fees were collected.
    (iv) All fee payments required under this section must be made in 
U.S. dollars. For all payment types accepted, please visit https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees.
    (4) Compliance. Each carrier subject to this section must allow 
APHIS, CBP, and authorized representatives to verify the accuracy of 
the AQI user fees paid and to otherwise determine compliance in 
accordance with paragraph (e) of this section and 21 U.S.C. 136a. Each 
carrier must advise USDA, APHIS, FMD, FOB of the name, address, and 
telephone number of an agent or responsible person who is authorized to 
verify AQI user fee calculations, payments, and remittance worksheets 
as well as any changes in the identifying information submitted. The 
agent or responsible person for a payment remains the agent or 
responsible person until the carrier notifies APHIS of a transfer of 
responsibility. The carrier or their agent or responsible person must 
contact APHIS at https://www.aphis.usda.gov/aphis/ourfocus/planthealth/ppq-program-overview/ppq-cbp-aqi-user-fees-contacts to initiate any 
transfer. The new agent or responsible person assumes all 
responsibilities for ensuring compliance for meeting the requirements 
of this part.
    (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)(1) Fee for inspection of international passengers. Except as 
specified in paragraph (f)(2) of this section, each passenger aboard a 
commercial aircraft or cruise ship 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 fee covers one individual 
arriving into a port of entry within the customs territory of the 
United States from a foreign port. Each air or sea carrier, travel 
agent, tour wholesaler, or other party issuing a ticket or travel 
document for transportation into the customs territory of the United 
States is responsible for collecting from the passenger the applicable 
fee specified in this section, including the fee applicable to any 
infants or toddlers traveling without a separate ticket or travel 
document, whether in assigned seats or held in an adult passenger's 
lap. In the event that the air or sea carrier, travel agent, tour 
wholesaler, or other party issuing a ticket or travel document does not 
collect the AQI user fee when tickets are sold, the air carrier or 
cruise line must collect the user fee that is applicable at the time of 
departure from the passenger upon departure. The AQI user fee will 
apply to tickets purchased beginning January 1, 2024. The fees are 
shown in tables 5 and 6:

        Table 5 to Paragraph (f)(1)--International Air Passenger
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
Beginning January 1, 2024...................................       $4.29
October 1, 2024.............................................        4.44
October 1, 2025.............................................        4.60
October 1, 2026.............................................        4.76
October 1, 2027.............................................        4.93
------------------------------------------------------------------------


    Table 6 to Paragraph (f)(1)--International Cruise (Sea) Passenger
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
Beginning January 1, 2024...................................       $1.20
October 1, 2024.............................................        1.25
October 1, 2025.............................................        1.29
October 1, 2026.............................................        1.34
October 1, 2027.............................................        1.39
------------------------------------------------------------------------

    (2) Exemptions. The following categories of passengers are exempt 
from paying an AQI user fee:
    (i) Crew members onboard for purposes related to the operation of 
the vessel;
    (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 U.S. diplomats, who can show that their 
names appear on the accreditation listing maintained by the U.S. 
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;
    (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 U.S. 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 U.S. Virgin Islands to Puerto Rico.

[[Page 54823]]

    (3) Circumstances of user fee collections. 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 States that originates in 
any foreign country; and
    (ii) When passengers arrive in the customs territory of the United 
States in transit from a foreign country and are inspected by APHIS or 
CBP.
    (4) Responsibility for collection of fees. (i) Any air or sea 
carrier, travel agent, tour wholesaler, or other party issuing a ticket 
or travel document 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) Unless refunded pursuant to paragraph (f)(5)(v) of this 
section, AQI user fees collected from international passengers pursuant 
to this paragraph (f) 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 payment procedures. (i) The air or sea carrier, 
travel agent, tour wholesaler, or other party issuing a ticket or 
travel document or their own non-carrier related tickets or travel 
documents, must remit collections of AQI user fees from the passengers 
to APHIS.
    (ii) The air or sea carrier, travel agent, tour wholesaler, or 
other party issuing a ticket or travel document must remit the 
passengers' fees to APHIS no later than 90 days after the close of the 
calendar month in which the ticket issuer collected the AQI user fees 
from the passengers. Late payments will be subject to interest, 
penalties, and a charge to cover the cost of processing and handling a 
delinquent claim as provided in the Debt Collection Act of 1982, as 
amended by the Debt Collection Improvement Act of 1996 (31 U.S.C. 
3717).
    (iii) All fee payments required under this section must be made in 
U.S. dollars. For payment types accepted please visit https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees. 
APHIS strongly encourages electronic remittance of fees. To set up 
electronic remittance refer to our detailed payment instructions at 
https://www.aphis.usda.gov/mrpbs/userfees/aqi-payment-types or for 
further information relative to electronic remittance, contact 
[email protected]. In the event electronic remission is impractical, 
a check or money order can be mailed to the Agency lock box following 
detailed payment instructions at https://www.aphis.usda.gov/mrpbe/userfees/aqi-payment-types. Questions and correspondence may be sent to 
[email protected] or fax (612) 336-3400 or (877) 777-2128. For 
payment information, refer to our detailed payment instructions at 
https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi_user_fees.
    (iv) The air or sea carrier, travel agent, tour wholesaler, or 
other party issuing a ticket or travel document must provide a 
remittance worksheet each month stating the passenger fees that are due 
for the month or stating that no payments are due. The air or sea 
carrier, travel agent, tour wholesaler, or other party issuing a ticket 
or travel document must include the remittance worksheet with their 
mailed payment. For all other payment types, they must email the 
remittance worksheet separately to [email protected]. The remittance 
worksheet is a written statement that must include the following 
information:
    (A) Name and address of the person remitting payment;
    (B) Calendar month covered by the payment; and
    (C) Amount collected and remitted.
    (v) It is the ticket or travel document-issuing entity's (e.g., air 
or sea carrier, travel agent, tour wholesaler, or other party) 
responsibility to make refunds of international passenger AQI user fees 
to the purchaser for trips not taken. The air or sea carrier, travel 
agent, tour wholesaler, or other party issuing a ticket or travel 
document must refund the purchaser in the exact form of payment that 
the purchaser originally used, and the entity may not issue vouchers, 
other forms of credit, or other forms of refund different from the 
purchaser's original form of payment.
    (vi) If an air or sea carrier, travel agent, tour wholesaler, or 
other party issuing a ticket or travel document collected and remitted 
to APHIS the international passenger AQI user fees prior to refunding 
the purchaser in accordance with paragraph (f)(5)(v) of this section, 
it may request that APHIS credit its account in the net amount refunded 
to the purchaser. APHIS will apply the credit against remittances due 
in future months until the credit is expended. To request such a 
credit, the ticket or travel document-issuing entity must submit a 
revised remittance worksheet indicating the revised number of 
passengers and international passenger AQI user fees amount collected. 
The revised remittance worksheet must be completed and filed for each 
month during which the ticket or travel document-issuing entity 
certifies that there was a decrease in the number of passengers and 
international passenger AQI user fees collected, using the procedure 
described in paragraph (f)(5)(iv) of this section.
    (6) Notification. Carriers contracting with U.S.-based tour 
wholesalers are responsible for notifying the USDA, APHIS, FMD, FOB at 
https://www.aphis.usda.gov/aphis/ourfocus/planthealth/ppq-program-overview/ppq-cbp-aqi-user-fees-contacts of all journeys contracted, the 
number of spaces contracted for, and the name, address, and taxpayer 
identification number of the United States-based tour wholesaler, 
within 90 days after the close of the calendar month in which such a 
journey 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, U.S.-based tour 
wholesaler, or other entity subject to this section must allow APHIS, 
CBP, and authorized representatives 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

[[Page 54824]]

(f). Each carrier, travel agent, U.S.-based tour wholesaler, or other 
entity must advise USDA, APHIS, FMD, at https://www.aphis.usda.gov/aphis/ourfocus/planthealth/ppq-program-overview/ppq-cbp-aqi-user-fees-contacts of the name, address, and telephone number of a responsible 
officer who is authorized to verify AQI user fee calculations, 
payments, and remittance worksheets, as well as any changes in the 
identifying information submitted. The responsible person for a payment 
remains the responsible person until the air or sea carrier, travel 
agent, tour wholesaler, or other party issuing a ticket or travel 
document notifies APHIS of a transfer of responsibility. The 
responsible person must contact APHIS to initiate any transfer. The new 
responsible person assumes all responsibilities for ensuring compliance 
for meeting the requirements of this part.
    (8) Limitation on charges. Airlines and cruise lines will not be 
charged reimbursable overtime for passenger inspection services 
required for any aircraft or cruise ship on which a passenger arrived 
who has paid the international passenger AQI user fee for that flight 
or cruise.
    (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.
    (2) When the work necessary for the issuance of a certificate is 
performed by APHIS personnel on a Sunday or holiday, or at any other 
time outside the regular tour of duty of the APHIS personnel issuing 
the certificate, in addition to the applicable user fee, the recipient 
must pay the applicable overtime rate in accordance with Sec.  354.1.
    (3)(i) Each exporter who receives a certificate issued on behalf of 
APHIS by a designated State or county inspector must pay an 
administrative user fee, as shown in table 7. The administrative fee 
can be remitted by the exporter directly to APHIS through the 
Phytosanitary Certificate Issuance and Tracking System (PCIT), provided 
that the exporter has a PCIT account and submits the application for 
the export certificate through the PCIT. If the PCIT is not used, the 
State or county issuing the certificate is responsible for collecting 
the fee and remitting it monthly to the U.S. Bank, United States 
Department of Agriculture, APHIS, AQI, P.O. Box 979043, St. Louis, MO 
63197-9000.

         Table 7 to Paragraph (g)(3)(i)--Administrative User Fee
------------------------------------------------------------------------
                                                Amount per shipment
             Effective dates             -------------------------------
                                             PCIT used     PCIT not used
------------------------------------------------------------------------
October 1, 2009, through September 30,                $3              $6
 2010...................................
October 1, 2010, through September 30,                 6              12
 2011...................................
Beginning October 1, 2011...............               6              12
------------------------------------------------------------------------

    (ii) The AQI user fees for an export or reexport certificate for a 
commercial shipment are shown in table 8.

   Table 8 to Paragraph (g)(3)(ii)--Export or Reexport Certificate for
                           Commercial Shipment
------------------------------------------------------------------------
                                                            Amount per
                     Effective dates                         shipment
------------------------------------------------------------------------
October 1, 2009, through September 30, 2010.............             $77
October 1, 2010, through September 30, 2011.............             104
Beginning October 1, 2011...............................             106
------------------------------------------------------------------------

    (iii) The AQI user fees for an export or reexport certificate for a 
low-value commercial shipment are shown in table 9. A commercial 
shipment is a low-value commercial shipment if the items being shipped 
are identical to those identified on the certificate; the shipment is 
accompanied by an invoice which states that the items being shipped are 
worth less than $1,250; and the shipper requests that the user fee 
charged be based on the low value of the shipment.

Table 9 to Paragraph (g)(3)(iii)--Export or Reexport Certificate for Low-
                        Value Commercial Shipment
------------------------------------------------------------------------
                                                            Amount per
                     Effective dates                         shipment
------------------------------------------------------------------------
October 1, 2009, through September 30, 2010.............             $42
October 1, 2010, through September 30, 2011.............              60
Beginning October 1, 2011...............................              61
------------------------------------------------------------------------

    (iv) The AQI user fees for an export or reexport certificate for a 
noncommercial shipment are shown in table 10.

[[Page 54825]]



  Table 10 to Paragraph (g)(3)(iv)--Export or Reexport Certificate for
                         Noncommercial Shipment
------------------------------------------------------------------------
                                                            Amount per
                     Effective dates                         shipment
------------------------------------------------------------------------
October 1, 2009, through September 30, 2010.............             $42
October 1, 2010, through September 30, 2011.............              60
Beginning October 1, 2011...............................              61
------------------------------------------------------------------------

    (v) The AQI user fees for replacing any certificate are shown in 
table 11.

            Table 11 to Paragraph (g)(3)(v)--Replacement Fee
------------------------------------------------------------------------
                                                            Amount per
                     Effective dates                        certificate
------------------------------------------------------------------------
October 1, 2009, through September 30, 2010.............             $11
October 1, 2010, through September 30, 2011.............              15
Beginning October 1, 2011...............................              15
------------------------------------------------------------------------

    (4) If a designated State inspector issues a certificate, the State 
where the certificate is issued may charge for inspection services 
provided in that State.
    (5) 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,\3\ support,\4\ and administrative costs; \5\ and
---------------------------------------------------------------------------

    \3\ 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.
    \4\ 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.
    \5\ 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.
---------------------------------------------------------------------------

    (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,\6\ support,\7\ and administrative \8\ 
hours;
---------------------------------------------------------------------------

    \6\ 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.
    \7\ 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.
    \8\ 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.
---------------------------------------------------------------------------

    (B) Determine the total cost of issuing certificates by adding 
together delivery,\3\ support,\4\ 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.
    (6) For payment of any of the AQI user fees required in this 
paragraph (g), 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.
    (h)(1) Fee for conducting and monitoring treatments. (i) User fees 
for all treatment-and treatment-related AQI services listed in 
paragraphs (h)(1)(ii)(A) through (D) of this section, will be 
calculated at the hourly rate listed in table 12 for each employee 
required to perform the service during regular business hours. Each 
treatment provider conducting a treatment application required for 
entry into the United States, or other monitored activity such as 
restacking or reconditioning required for treatment application, is 
responsible for collecting from the importer, their broker or agent the 
applicable fee specified in this section. In instances in which APHIS 
is the treatment provider, the importer is responsible paying the fee 
directly to APHIS. Multiple phytosanitary treatments and treatment-
related activities may be conducted during the same time period and 
covered by a single hourly rate subject to local government, union 
agreements, environmental standards, and other applicable regulations, 
rules, and ordinances.

                                      Table 12 to Paragraph (h)(1)(i)--Fee for Conducting and Monitoring Treatments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           User fee                              January 1, 2024   October 1, 2024   October 1, 2025   October 1, 2026   October 1, 2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly rate (per employee):

[[Page 54826]]

 
    Per hour..................................................           $232.97           $253.19           $273.90           $295.12           $316.83
    Per quarter hour..........................................             58.24             63.30             68.48             73.78             79.21
    Per service minimum fee...................................             58.24             63.30             68.48             73.78             79.21
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) APHIS will charge user fees for all treatment-and treatment-
related AQI services:
    (A) Conducting or monitoring phytosanitary treatments in accordance 
with part 305 of this chapter and the USDA APHIS Treatment Manual 
(https://www.aphis.usda.gov/import_export/plants/manuals/ports/downloads/treatment.pdf) including but not limited to approved 
fumigation, irradiation, heat, cold, and mechanical treatment types.
    (B) Conducting or monitoring the restacking of shipments in 
preparation for phytosanitary treatments in accordance with this 
section.
    (C) Conducting or monitoring the reconditioning of shipments in 
preparation for phytosanitary treatments in accordance with this 
section.
    (D) Conducting or monitoring the aeration of shipments after the 
completion of phytosanitary treatments in accordance with this section.
    (2) When do I pay an additional amount for employee(s) working 
overtime? You must pay an additional amount if you need an APHIS 
employee to work on a Sunday, on a holiday, or at any time outside the 
normal tour of duty of that employee. Instead of paying the hourly rate 
user fee, you pay the premium rate listed in table 13 for each employee 
needed to get the work done. The treatment services overtime hourly 
rate will be applied identically to reimbursable overtime (rules 
pertaining to commuted travel time, minimum call-outs, etc., in Sec.  
354.1). Overtime services will incur a minimum charge of 2 hours, 
unless performed on the employee's regular workday and performed in 
direct continuation of the regular workday or begun within an hour of 
the regular workday. When the 2-hour minimum applies, you may need to 
pay commuted travel time. (See Sec.  354.1(a)(2) for specific 
information about commuted travel time.)

   Table 13 to Paragraph (h)(2)--Fee for Conducting and Monitoring Treatments Outside the Employee's Normal Tour of Duty, Monday Through Saturday and
                                     Holidays; and Premium Rates for Conducting and Monitoring Treatments on Sunday
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Reimbursable overtime and premium rate user fee
 Overtime rates  (outside the employee's normal tour of duty)  -----------------------------------------------------------------------------------------
                                                                 January 1, 2024   October 1, 2024   October 1, 2025   October 1, 2026   October 1, 2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overtime hourly rate Monday through Saturday and holidays:
    Per hour:.................................................           $240.89           $261.36           $282.32           $303.93           $326.04
    Per quarter hour:.........................................             60.22             65.34             70.58             75.98             81.51
Premium hourly rate for Sundays:
    Per hour:.................................................            272.27            294.34            317.62            342.26            368.40
    Per quarter hour:.........................................             68.07             73.58             79.41             85.57             92.10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (3) Who must pay APHIS treatment monitoring hourly user fees? Any 
treatment provider or importer for whom a service is provided related 
to treatment conducting or monitoring as specified in paragraphs 
(h)(1)(ii)(A) through (D) of this section is liable for payment of fees 
as prescribed in paragraph (h)(4) of this section.
    (4) Collection of fees. (i) The owner, agent, or person in charge 
of private entities that provide AQI treatment services to importers 
must collect the AQI treatment services hourly user fee and remit them 
to APHIS.
    (ii) When APHIS conducts treatments, APHIS will collect the AQI 
treatment fee applicable at the time the treatment is applied from the 
person receiving the services.
    (5) When are APHIS treatment monitoring user fees due? User fees 
specified in paragraph (h)(1)(i) of this section must be paid when 
service is provided (for example when APHIS monitors a treatment at a 
facility). If APHIS determines that the user has established an 
acceptable credit history, the owner, agent, or person in charge may 
request to pay when billed.
    (6) What payment methods are acceptable? All fee payments required 
under this section must be made in U.S. dollars. For payment types 
accepted please visit https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees.
    (i) Consequences for nonpayment or late payment of user fees--(1) 
Unpaid debt. In cases of delinquent debts, the government is required 
to charge and collect interest, penalties, and costs. See 31 U.S.C. 
3717(a) (interest); 3717(e)(1) (costs); and 3717(e)(2) (penalties). If 
any person for whom the service is provided fails to pay when due any 
debt to APHIS, including any user fee due under chapter I or chapter 
III of this title, then:
    (i) Subsequent user fee payments. Payment must be made for 
subsequent user fees before the service is provided if:
    (A) For unbilled fees, the user fee is unpaid 60 days after the 
date the pertinent regulatory provision indicates payment is due;
    (B) For billed fees, the user fee is unpaid 60 days after date of 
bill;
    (C) The person for whom the service is provided or the person 
requesting the service has not paid the late payment penalty charges, 
interest charges, or charges for the cost of processing and handling 
the delinquent bill on any delinquent APHIS user fee; or
    (D) Payment has been dishonored.
    (ii) Resolution of difference between estimate and actual. APHIS 
will estimate the user fee to be paid; any difference between the 
estimate and the actual amount owed to APHIS will be resolved as soon 
as reasonably possible following the delivery of the service, with 
APHIS returning any excess to the payor or billing the payor for the 
additional amount due.
    (iii) Prepayment form. The prepayment must be in guaranteed form of 
payment, such as money order or certified check. Prepayment in 
guaranteed form will continue until the debtor pays the delinquent 
debt.

[[Page 54827]]

    (iv) Denied service. Service will be denied until the debt is paid 
if:
    (A) For unbilled fees, the user fee is unpaid 90 days after date 
the pertinent regulatory provision indicates payment is due;
    (B) For billed fees, the user fee is unpaid 90 days after date of 
bill;
    (C) The person for whom the service is provided or the person 
requesting the service has not paid the late payment penalty charges, 
interest charges, or charges for the cost of processing and handling 
the delinquent bill on any delinquent APHIS user fee; or
    (D) Payment has been dishonored.
    (2) Unpaid debt during service. If APHIS is in the process of 
providing a service for which an APHIS user fee is due, and the user 
has not paid the fee within the time required, or if the payment 
offered by the user is inadequate or unacceptable, then APHIS will take 
the following action: If regulated articles in quarantine at a 
treatment facility cannot be released from quarantine, APHIS may seize 
and dispose of them, as determined by the Administrator, and may 
recover all expenses of handling the articles from persons liable for 
user fees under paragraph (h)(1)(i) of this section as outlined in 
paragraphs (h)(6)(i) through (iv) of this section. If regulated 
articles can be released from quarantine, the articles will be released 
and any unpaid debt will be handled as outlined in paragraph (h)(6)(i) 
of this section.
    (3) Late payments. If for unbilled user fees, the user fees are 
unpaid 30 days after the date the pertinent regulatory provisions 
indicates payment is due, or if billed, are unpaid 30 days after the 
date of the bill, APHIS will impose late payment penalty charges, 
interest charges, and charges for the cost of processing and handling 
the delinquent bill in accordance with 31 U.S.C. 3717.
    (4) Dishonored payment. User fees paid with dishonored forms of 
payment, such as a check returned for insufficient funds, will be 
subject to interest and penalty charges in accordance with 31 U.S.C. 
3717. Administrative charges will be assessed at $20.00 per dishonored 
payment to be paid in addition to the original amount owed. Payment 
must be in guaranteed form, such as a money order or certified check.
    (5) Debt collection management. In accordance with applicable debt 
collection law, the following provisions apply:
    (i) Taxpayer identification number. APHIS will collect a taxpayer 
identification number from all persons, other than Federal agencies, 
who are liable for a user fee.
    (ii) Offset. APHIS takes appropriate action to collect debts 
through offset under applicable law, including by notifying the 
Department of the Treasury of debts that are over 120 days delinquent 
for the purposes of offset through the Treasury Offset Program. Through 
the Treasury Offset Program, the Department of the Treasury will offset 
eligible Federal and State payments to satisfy the debt to APHIS.
    (iii) Cross-servicing. APHIS will transfer debts that are over 120 
days delinquent to the Department of the Treasury's Cross-Servicing 
program. Through the Cross-Servicing program, the Department of the 
Treasury will collect debts on behalf of APHIS. Exceptions may be made 
for debts that meet certain requirements, for example, debts that are 
already at a collection agency or in payment plans.
    (6) Report delinquent debt. APHIS will report all unpaid debts to 
credit reporting bureaus.
    (j) Recordkeeping and record retention. (1) Entities responsible 
for paying AQI user fees and their agents are required to establish, 
keep, and make available to APHIS the following records:
    (i) Records and reports required under this section, including 
remittance worksheets, if applicable; and
    (ii) Legible copies of contracts (including amendments to 
contracts) between the responsible entity or their agents and agents 
that conduct activities subject to this part for the responsible 
entity, and copies of documents relating to agreements made without a 
written contract.
    (2) Responsible entities or their agents must maintain sufficient 
documentation for APHIS, CBP, and representatives to verify the 
accuracy of the fee collections and, if applicable, remittance 
worksheets. Such information must be made available for inspection upon 
APHIS and CBP's demand. Such documentation shall be maintained in the 
United States for a period of 5 years from the date of fee calculation, 
unless a longer retention period is determined to be needed by the 
Administrator. Each such affected entity shall provide to APHIS and CBP 
the name, address, and telephone number of a responsible officer who is 
able to verify any statements or records required to be filed or 
maintained under this section and shall promptly notify APHIS and CBP 
of any changes in the identifying information previously submitted.
    (k) Severability. The sections of part 354 are separate and 
severable from one another. If any section or portion therein is stayed 
or determined to be invalid, or the applicability of any section to any 
person or entity is held invalid, it is the APHIS' intention that the 
validity of the remainder of those parts shall not be affected, with 
the remaining sections to continue in effect.

    Done in Washington, DC, this 2nd day of August 2023.
Jennifer Moffitt,
Undersecretary, Marketing and Regulatory Programs, USDA.
[FR Doc. 2023-17045 Filed 8-10-23; 8:45 am]
BILLING CODE 3410-34-P