[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
------------------------------------------------------------------------
                          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