[Federal Register Volume 88, Number 189 (Monday, October 2, 2023)]
[Proposed Rules]
[Pages 67687-67690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21559]
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DEPARTMENT OF STATE
22 CFR Part 22
[Public Notice: 11995]
RIN 1400-AF61
Schedule of Fees for Consular Services--Administrative Processing
of Request for Certificate of Loss of Nationality (CLN) Fee
AGENCY: Department of State.
ACTION: Proposed rule.
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SUMMARY: The Department of State (``Department'') is proposing to amend
the Schedule of Fees for Consular Services (``Schedule'') to reduce the
current fee for Administrative Processing of a Request for a
Certificate of Loss of Nationality of the United States (CLN) from
$2,350 to $450.
DATES: The Department of State will accept comments until November 1,
2023.
ADDRESSES: Interested parties may submit comments to the Department by
any of the following methods:
* Visit the Regulations.gov website at: https://www.regulations.gov
and search for the Regulatory Information Number (RIN) 1400-AF61 or
docket number DOS-2023-0026.
* Email: [email protected]. You must include the RIN (1400-AF61) in
the subject line of your message.
[[Page 67688]]
All comments should include the commenter's name, the organization
the commenter represents (if applicable), and the commenter's address.
If the Department is unable to read your comment for any reason, and
cannot contact you for clarification, the Department may not be able to
consider your comment. After the conclusion of the comment period, the
Department will publish a final rule that will address relevant
comments as expeditiously as possible.
FOR FURTHER INFORMATION CONTACT: Johanna Cruz, Management Analyst,
Office of the Comptroller, Bureau of Consular Affairs, Department of
State; phone: 202-485-8915, email: [email protected].
SUPPLEMENTARY INFORMATION:
Background
The proposed rule makes changes to the Department of State's
Schedule of Fees for Consular Services by reducing the fee for Item #8,
Administrative Processing of Request for Certificate of Loss of
Nationality of the United States (CLN), from $2,350 to $450. The fee
for administrative processing of a CLN (referred to as the ``fee for
CLN services'' throughout this rulemaking) applies to U.S. nationals
(i.e., U.S. citizens and non-citizen nationals) who request a CLN under
8 U.S.C. 1481(a)(5) (taking the oath of renunciation before a U.S.
diplomatic or consular officer abroad) as well as those who request a
CLN under 8 U.S.C. 1481(a)(1) to 1481(a)(4) or other applicable law
administered by the Department of State. The fee for CLN services is
remitted entirely to the Department of Treasury; revenue collected from
the fee for CLN services is not factored into the Bureau of Consular
Affairs' (CA) budget.
What is the authority for this action?
The Department of State derives the authority to set fees based on
the cost of the consular services it provides, and to charge those fees
from the general user charges statute, 31 U.S.C. 9701. See, e.g., 31
U.S.C. 9701(b)(2)(A) (``The head of each agency . . . may prescribe
regulations establishing the charge for a service or thing of value
provided by the agency . . . based on . . . the costs to the
government.''). The President also has the power to set the amount of
fees to be charged for consular services provided at U.S. embassies and
consulates abroad pursuant to 22 U.S.C. 4219, and has delegated this
authority to the Secretary of State, E.O. 10718 (June 27, 1957). In the
absence of a specific statutory fee retention authority, fees collected
for consular services must be deposited into the general fund of the
Treasury pursuant to 31 U.S.C. 3302(b).
Activity-Based Costing
OMB Circular A-25 states that it is the objective of the United
States Government to ``(a) ensure that each service, sale, or use of
Government goods or resources provided by an agency to specific
recipients be self-sustaining; [and] (b) promote efficient allocation
of the Nation's resources by establishing charges for special benefits
provided to the recipient that are at least as great as costs to the
Government of providing the special benefits . . .'' OMB Circular A-25,
5(a)-(b); see also 31 U.S.C. 9701(b)(2)(A) (agency ``may prescribe
regulations establishing the charge for a service or thing of value
provided by the agency . . . based on . . . the costs to the Government
. . .''). To set fees that are ``self-sustaining,'' the Department must
determine the full cost of providing each consular service. Following
guidance provided in ``Managerial Cost Accounting Concepts and
Standards for the Federal Government,'' OMB's Statement #4 of Federal
Accounting Standards (SFFAS #4), available at http://www.fasab.gov/pdffiles/sffas-4.pdf, the Department chose to develop and use an
activity-based costing (ABC) model to determine the full cost of all
the services listed in its Schedule of Fees, including those whose fee
the Department proposes to change. The Department refers to the
specific ABC model that underpins the proposed fees as the ``Cost of
Service Model'' or ``CoSM.''
The Government Accountability Office (GAO) defines ABC as a ``set
of accounting methods used to identify and describe costs and required
resources for activities within processes.'' Organizations can use the
same staff and resources (computer equipment, production facilities,
etc.) to produce multiple products or services; therefore, ABC models
seek to identify and assign costs to processes and activities and then
to individual products and services through the identification of key
cost drivers referred to as ``resource drivers'' and ``activity
drivers.'' The goal is to proportionally and accurately distribute
costs. ABC models require financial and accounting analysis and
modeling skills combined with a detailed understanding of an
organization's business processes. SFFAS Statement #4 provides a
detailed discussion of the use of cost accounting by the U.S.
Government.
The ABC approach focuses on the activities required to produce a
particular service or product and uses resource drivers to assign costs
through activities and activity drivers to assign costs from activities
to services. In the context of the work of the Department's Bureau of
Consular Affairs (CA), resource drivers assign costs (resources
including materials, supplies, and labor utilized in the production or
delivery of services and products) to activities using business rules
that reflect the operational reality of CA and the data available from
consular systems, surveys, and internal records. Most resource drivers
are based on time spent on each activity. Activity drivers assign the
cost of consular activities to the services CA provides. Most activity
drivers are based on volumes.
Why is the Department adjusting this fee?
Processing a U.S. citizen's request for a CLN based on the
performance of a potentially expatriating act provided by statute has
always been extremely costly for the Department, requiring consular
officers and employees overseas, as well as Bureau of Consular Affairs
employees domestically, to spend substantial time accepting,
processing, and adjudicating these requests. See 75 FR 6324; 79 FR
51250-51. This service is necessarily time consuming because of
constitutional and other safeguards imposed by U.S. law to ensure the
would-be renunciant is a U.S. national who fully understands the
serious consequences of renunciation and that the renunciation is both
voluntary and intentional. 80 FR 51466.
A fee for processing a request for a CLN under INA 349(a)(5)
(taking the oath of renunciation before a U.S. diplomatic or consular
officer abroad) was first implemented in 2010. The fee was set at $450,
which at that time represented less than 25% of the cost to the U.S.
Government. 75 FR 36529. The Department set the fee below cost ``in
order to lessen the impact on those who need this service and not
discourage the utilization of the service.'' 75 FR 36529. That decision
was consistent with the approach taken with respect to certain other
fees the Department has discretion to set below cost, including those
provided to U.S. citizens in connection with applications for a
Consular Report of Birth Abroad, emergency services, documentary
services, and death and estate services. The Department's estimate of
the level at which U.S. citizens will not be deterred from taking
advantage of the service was based on its extensive consultations with
experienced consular officers and senior Department managers. 75 FR
36527.
[[Page 67689]]
Subsequently, the number of requests for a CLN increased
dramatically. During the period the $450 fee was in place, the demand
for CLNs jumped from 956 in 2010 to 3,436 in 2014, an approximately
360-fold increase. The dramatic increase in demand meant that far more
consular officer time and resources were consumed providing CLN
services. As a result, the Department made the decision to set the fee
at cost. In 2014, the Department issued an interim final rule raising
the fee from $450 to $2,350, as determined by the results of the 2010-
2014 Cost of Service Model (CoSM), which incorporated improvements that
better captured the actual costs to the U.S. Government of providing
consular services overseas. 79 FR 51251. The rule was finalized in
2015. 80 FR 51465.
At the time the fee was increased, the Department received
approximately two dozen comments suggesting that the new fee was too
costly and that it therefore acted as a deterrent to renunciation. See
80 FR 51465. The Department took those concerns into account in setting
the fee, but ultimately determined that the significant additional
burden on consular operations justified setting the fee at cost, in
accordance with general fee-setting principles in 31 U.S.C. 9701 and
OMB Circular A-25. Id.
In the years since the fee was increased, members of the public
have continued to raise concerns about the cost of the fee and the
impact of the fee on their ability to renounce their citizenship. While
there is no legal requirement for individuals to declare their
motivation for renouncing U.S. citizenship, anecdotal evidence suggests
that difficulties due at least in part to stricter financial reporting
requirements imposed by the Foreign Account Tax Compliance Act (FATCA),
Public Law 111-147, on foreign financial institutions with whom U.S.
nationals have an account or accounts may well be a factor.
After significant deliberation, taking into account both the
affected public's concerns regarding the cost of the fee and the not
insignificant anecdotal evidence regarding the difficulties many U.S.
nationals residing abroad are encountering at least in part because of
FATCA, the Department has made a policy decision to help alleviate at
least the cost burden for those individuals who decide for whatever
reason to request CLN services by returning to the below-cost fee of
$450. Although the prior fee of $450 represents a fraction of the cost
of providing CLN services, this change will better align the fee for
CLN services with other fees for services provided to U.S. citizens
abroad, including, for example, applications for a Consular Report of
Birth Abroad, which all are set significantly below cost, even as the
costs of providing these services have fluctuated over time.
The Department reviews its Cost of Service Model annually, to
calculate the cost of providing all services, including CLN services,
applying its standard ABC methodology. If, in the future, the results
of the CoSM indicate that the Department ought to reevaluate its
approach to the fee for CLN services and/or other services provided to
U.S. citizens that are set below cost, the Department will engage its
experienced consular officers and senior Department managers to help
determine the appropriate level at which to set the fee, balancing the
need for the U.S. Government to recoup its costs with the need to
charge a fee for these services that does not deter individuals from
seeking them.
This proposed fee change applies to all services included under
``Administrative Processing of Request for Certificate of Loss of
Nationality'' on the Department's Schedule of Fees for Consular
Services. 22 CFR 22.1 Item 8. That item lists services to U.S.
nationals (i.e., U.S. citizens and non-citizen nationals) who request a
CLN under 8 U.S.C. 1481(a)(5) as well as services to U.S. nationals who
request a CLN under 8 U.S.C. 1481(a)(1)-(4) or other applicable law.
The fee for processing a request for a CLN under 8 U.S.C. 1481(a)(1)-
(4) was also set at $2,350 in 2018 as a matter of ``fee parity'' after
the 2010-2014 CoSM indicated that documenting a U.S. national's
relinquishment of nationality is extremely costly regardless of the
subsection under which the request for a CLN is made. 80 FR 53707.
Although the fee for processing a request for a CLN under 8 U.S.C.
1481(a)(1)-(4) was never set at $450, the same considerations apply and
warrant a consistent approach in setting the fee below cost.
Regulatory Findings
Administrative Procedure Act
The Department is publishing this rulemaking as a proposed rule,
with a 30-day provision for public comments. The Department believes
that a 30-day comment period provides the public sufficient opportunity
to meaningfully review the proposed rule and generate informed comments
on its text. The proposed rule involves only one fee, and is not
lengthy, technical, and/or complex. Moreover, the Department is
engaging in this rulemaking in response to public concerns that already
have been raised. A 30-day comment period will enable the Department to
complete rulemaking expeditiously, which will facilitate implementation
of a change that will benefit applicants seeking CLN services.
Regulatory Flexibility Act
The Department has reviewed this proposed rule and, by approving
it, certifies that it will not have a significant economic impact on a
substantial number of small entities as defined in 5 U.S.C. 601(6).
Unfunded Mandates Act of 1995
This rulemaking will not result in the expenditure by state, local,
and tribal governments, in the aggregate, or by the private sector, of
$100 million or more in any year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995, 2 U.S.C. 1501-1504.
Executive Orders 12866, 13563, and 14094
The Department has reviewed this proposed rule to ensure its
consistency with the regulatory philosophy and principles set forth in
Executive Order 12866, as amended by Executive Order 14094, and
Executive Order 13563, and affirms that this regulation is consistent
with the guidance therein. The Office of Management and Budget has
designated this rulemaking as significant under E.O. 12866.
Details of the changes to the Schedule of Fee are as follows:
[[Page 67690]]
Table 1--Changes to the Schedule of Fees
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Projected
annual number Estimated Change in Change in
Item No. Proposed fee Current fee Change in Percentage of change in state retained remittance to
fee decrease applications annual fees fees Treasury
\1\ collected \2\
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SCHEDULE OF FEES FOR CONSULAR SERVICES
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* * * * * * *
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PASSPORT AND CITIZENSHIP SERVICES
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8. Administrative Processing of Request for Certificate of Loss $450 $2,350 ($1,900) (80) 4,661 ($8,855,900) $0 ($8,855,900)
of Nationality..................................................
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\1\ Based on estimated FY 2022 workload calculated with FY2021 actual demand.
\2\ Using FY 2021 workload to generate collections. This will be a reduction in total annual remittance to Treasury.
Executive Orders 12372 and 13132
This rulemaking will not have substantial direct effects on the
states, on the relationship between the National Government and the
states, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with section 6
of Executive Order 13132, it is determined that this proposed rule does
not have sufficient federalism implications to require consultations or
warrant the preparation of a federalism summary impact statement. The
regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this regulation.
Executive Order 13175
The Department has determined that this rulemaking will not have
tribal implications, will not impose substantial direct compliance
costs on Indian Tribal Governments, and will not preempt tribal law.
Accordingly, the requirements of Executive Order 13175 do not apply to
this rulemaking.
Paperwork Reduction Act
This rulemaking does not impose any new reporting or recordkeeping
requirements subject to the Paperwork Reduction Act.
List of Subjects in 22 CFR Part 22
Consular services, Fees.
Accordingly, for the reasons stated in the preamble, 22 CFR part 22
is proposed to be amended as follows:
PART 22--SCHEDULE OF FEES FOR CONSULAR SERVICES--DEPARTMENT OF
STATE AND FOREIGN SERVICE
0
1. The authority citation for part 22 continues to read as follows:
Authority: 8 U.S.C. 1101 note, 1153 note, 1157 note, 1183a
note, 1184(c)(12), 1201(c), 1351, 1351 note, 1713, 1714, 1714 note;
10 U.S.C. 2602(c); 22 U.S.C. 214, 214 note, 1475e, 2504(h), 2651a,
4206, 4215, 4219, 6551; 31 U.S.C. 9701; E.O. 10718, 22 FR 4632, 3
CFR, 1954-1958 Comp., p. 382; E.O. 11295, 31 FR 10603, 3 CFR, 1966-
1970 Comp., p. 570.
0
2. In Sec. 22.1, amend the table by revising Item 8 to read as
follows:
Sec. 22.1 Schedule of Fees.
The following table sets forth the fees for the following
categories listed on the U.S. Department of State's Schedule of Fees
for Consular Services:
Schedule of Fees for Consular Services
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Item No. Fee
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Passport and Citizenship Services
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* * * * * * *
8. Administrative Processing of Request for Certificate of $450
Loss of Nationality........................................
* * * * * * *
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Hugo Rodriguez,
Acting Assistant Secretary for Consular Affairs, Department of State.
[FR Doc. 2023-21559 Filed 9-29-23; 8:45 am]
BILLING CODE 4710-06-P