[Federal Register Volume 89, Number 89 (Tuesday, May 7, 2024)]
[Rules and Regulations]
[Pages 38596-38644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09348]



[[Page 38595]]

Vol. 89

Tuesday,

No. 89

May 7, 2024

Part V





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; Final 
Rule

  Federal Register / Vol. 89 , No. 89 / Tuesday, May 7, 2024 / Rules 
and Regulations  

[[Page 38596]]


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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: Final rule.

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SUMMARY: We are amending the user fee regulations associated with the 
agricultural quarantine and inspection (AQI) program. Specifically, we 
are adjusting 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 or precleared or preinspected at a site outside the customs 
territory of the United States; adjusting the caps on prepaid fees 
associated with commercial trucks and commercial railroad cars; and 
removing certain fee exemptions that are no longer justifiable based 
upon pathway analyses of risk. We are also revising requirements 
pertaining to remittances and statements. Specifically, we will require 
monthly rather than quarterly remittances for the commercial aircraft 
fee, international air passenger fee, and international cruise 
passenger fee, clarify our requirements, and provide for electronic 
payments and statements. We are also including in the regulations 
information on agents responsible for ensuring compliance with paying 
the user fees and the requirement for entities to notify the Animal and 
Plant Health Inspection Service in the event they have a change in 
personnel responsible for fee payments. These 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: This rule is effective October 1, 2024, except for the removal 
of section Sec.  354.3(e)(2)(iv), which is effective on April 1, 2025.

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

 Background
    [cir] General Issues
    [cir] Economic Comments
    [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
    [cir] Records Retention
    [cir] Severability
 Executive Orders 12866, 13563 and 14094, and Regulatory 
Flexibility Act
    [cir] Air Passengers
    [cir] Commercial Aircraft
    [cir] Small Aircraft Exemption
    [cir] Commercial Vessels
    [cir] Canadian Barge Exemption
    [cir] Commercial Trucks
    [cir] Commercial Railroad Cars
    [cir] International Cruise Vessel Passengers
    [cir] Treatment Monitoring

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 prescribe and 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.
    On August 11, 2023, we published in the Federal Register (88 FR 
54796-54827, Docket No. APHIS-2022-0023) a proposal \1\ to amend the 
user fee regulations by adjusting 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; adjusting the caps on prepaid fees associated with 
commercial trucks and commercial railroad cars; removing certain fee 
exemptions that are no longer justifiable based upon pathway analyses 
of risk; and restructuring the treatment monitoring fee.
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    \1\ To view the proposed rule, supporting documents, and the 
comments we received, go to www.regulations.gov. Enter APHIS-2022-
0023 in the Search field.
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    We also proposed to revise requirements pertaining to remittances 
and statements. Specifically, we proposed to require monthly rather 
than quarterly remittances for the commercial aircraft fee, 
international air passenger fee, and international cruise passenger 
fee, clarify our requirements, and provide for electronic payments and 
statements. We also proposed to 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.
    We proposed these changes 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.
    We solicited comments concerning our proposal for 60 days ending 
October 10, 2023. We received 70 comments by that date. They were from 
airlines, shipping companies, treatment providers, industry 
associations, and private citizens. Eighteen commenters generally 
supported the proposed rule, while 15 generally opposed it. The 
remaining commenters, while commenting on the provisions of the

[[Page 38597]]

proposed rule, did not articulate a position in favor or against it. 
The comments are discussed below by topic.
    Based on the comments that we received, we have made the following 
modifications to the proposed rule in this final rule:
     We have lowered the fees for commercial vessels, 
commercial aircraft, and international air passengers based on our 
determination that, while aggregate cost was correct (the numerator for 
the fee rate), there were more instances in which AQI services were 
provided in these modes (the denominator for the fee rate) than we had 
initially calculated.
     We have established a commercial vessel fee specific to 
commercial vessels operating within the Great Lakes or in the region 
along the coastline from Alaska to Oregon, provided that certain 
conditions are met.
     We have decided not to revise our regulations governing 
the treatment monitoring fee at this time.
     We have decided not to specify the method by which 
airlines and cruise ships must refund passenger user fees assessed for 
trips not taken.

General Issues

    Several commenters who supported the proposed rule agreed with the 
proposed rule that additional personnel were needed at ports of entry 
to reduce workload on individual employees. One of these commenters 
stated that port personnel at certain ports of entry currently 
routinely must work overtime to conduct inspections.
    As we stated in the proposed rule, the increased fees will provide 
for additional staffing at ports of entry.
    One of these commenters also said that APHIS' regulations governing 
reimbursable overtime also needed to be updated.
    Changes to APHIS' regulations governing reimbursable overtime are 
outside of the scope of this rulemaking. However, we do note that our 
user fee model did consider staffing at ports in order to address the 
staffing shortages highlighted by the commenter and reduce the need for 
individual employees to work overtime to conduct inspections. We 
discuss the staffing model at greater length below.
    Several commenters, while supportive of the proposed rule, took the 
view that the regulations imposed a protective tariff on imports. 
Similarly, several other commenters stated that they were domestic 
producers who supported the proposal and construed the regulations as a 
mechanism to reduce import volume.
    User fees are not tariffs, nor are they intended as a mechanism to 
reduce import volume. Although the AQI user fees pertain to 
international trade, user fees are a cost-recovery mechanism employed 
more broadly than just in the international trade context. They are a 
fee that a party charges to an entity receiving a service in order to 
recover the costs associated with providing the service. User fees are 
often imposed by a government, but not always. For example, a toll 
collected on a privately owned toll road would fit the definition of a 
user fee. As we highlighted in the preamble of the proposed rule (88 FR 
54799, August 11, 2023), user fees are currently used throughout the 
Federal Government to recover the costs of many Federal services, both 
international and domestic.
    Several domestic producers stated that the services funded by the 
fees are necessary in order to keep plant pests, noxious weeds, and 
pests and diseases of livestock from being introduced into or further 
disseminated within the United States. We agree. AQI services are 
essential to protect American agriculture and natural resources from 
the introduction or further dissemination of plant pests, noxious 
weeds, and pests and diseases of livestock. Furthermore, as we 
mentioned in the proposed rule, programs to control or eradicate pests 
once they become established in the United States can be costly for the 
Agency to administer.
    One commenter construed the proposed rule to include a notice-based 
process by which the fees would be adjusted after October 1, 2028. We 
did not propose to establish a notice-based process to adjust the fees 
in the proposed rule. We did state in the proposed rule that we intend 
to initiate a separate rulemaking to propose notice-based adjustments 
to the fees to be implemented after October 1, 2028.
    One commenter stated that the exact language of paragraph (a)(1)(A) 
of the FACT Act provides authority to recover the cost of AQI services 
provided to ``an international passenger, commercial vessel, commercial 
aircraft, commercial truck, or railroad car,'' while our proposed rule 
stated that it provided authority to recover the cost of services 
provided to commercial vessels, commercial trucks, commercial railroad 
cars, commercial aircraft, and international passengers. The commenter 
argued that the word ``international'' in the FACT Act could be read to 
apply to all the commercial means of conveyance listed, and not just 
passengers.
    Insofar as the services are provided to the listed means of 
conveyance that are entering the United States from outside the United 
States, the services are provided to the listed means of conveyance 
that are operating ``internationally'' in the standard dictionary 
definition of that term. (Merriam-Webster's online dictionary, for 
example, defines ``international'' to mean, among other things, ``of, 
relating to, or affecting two or more nations.'') \2\ Accordingly, 
whether or not the term ``international'' in the FACT Act is read 
restrictively to refer solely to passengers or more generally to apply 
to both passengers and the listed means of conveyance does not change 
the approach in this final rule.
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    \2\ https://www.merriam-webster.com/dictionary/international.
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    The same commenter stated that inspection of animals, animal 
products, plants, and plant products that enter the United States from 
Canada may violate trade agreements between the two countries. The 
commenter did not specify which trade agreements it considered to be 
violated.
    APHIS is unaware of any trade agreement that precludes either the 
United States or Canada from conducting sanitary or phytosanitary 
inspection and quarantine services. To the contrary, the U.S.-Mexico-
Canada Agreement, or USMCA, allows for inspection of imported 
commodities among the three nations.
    Several commenters stated that our proposed implementation date of 
January 1, 2024, would be difficult or impossible for their businesses 
to absorb, and requested more time to allow for adequate budget 
planning and adjustment of contracts with customers. Two commenters 
suggested that, regardless of what fiscal year is chosen for 
implementation, the implementation date should be within the June to 
November timeframe to minimize disruption to service contracts for that 
year.
    Because the publication of this final rule occurred after January 
1, 2024, we have elected to set October 1, 2024, as our implementation 
date. In the proposed rule, this was the date that the second phase of 
the increased fees was scheduled to take effect. The October 1 date 
corresponds to the beginning of APHIS' fiscal year (FY), and it occurs 
within the June to November timeframe requested by the commenters. In 
general, on October 1, 2024, we will revise the fees to set them at the 
level specified in the proposed rule beginning on that date. That is, 
for most fee classes, we are starting at phase 2 of the

[[Page 38598]]

proposed fees, but otherwise finalizing them as proposed. However, for 
reasons discussed below, the user fees for commercial vessels, 
commercial aircraft, international air passengers, and treatment 
monitoring will differ from those proposed.
    The same commenters who asked that the implementation date be 
within the June to November time frame asked for at least a 1-year 
delay in the implementation of this rulemaking to allow for budget 
planning.
    As noted in the proposed rule, the AQI program ran an average 
deficit of over $166 million annually for FY 2017 through FY 2019. 
During the COVID-19 pandemic, decreased international travel further 
exacerbated these deficits, and the program had to rely on emergency 
appropriated supplemental funds to cover program costs. Even in a post-
pandemic environment, current revenue projections indicate that the 
fees must be raised by the outset of FY 2025 to avoid possible 
disruptions to program delivery due to insufficient funds. Due to these 
exigencies, we cannot delay the implementation of the new fees for such 
a prolonged period. We note, however, that we have elected to have a 
later effective date of April 1, 2025, for the removal of a provision 
exempting commercial aircraft with 64 or fewer seats meeting certain 
conditions from paying the user fee for their mode of conveyance. We 
have determined that this later effective date can be implemented 
without disruption to program delivery.
    Two commenters stated that the fee increases should be phased in 
over a 5-to-10-year period.
    We note that we are phasing in the fee increases; the final fee 
increase will occur more than 4 years after the issuance of this final 
rule. A more prolonged phase-in schedule would adversely impact cost 
recovery and is not feasible to sustain program operations.
    Commenters stated that the proposed increases are not warranted in 
the current inflation/recession prone environment and associated 
impacts to industry.
    The fee increases are necessary to help achieve full cost recovery 
for the AQI services provided to the parties subject to the fees. AQI 
user fee-funded activities operated at a substantial deficit before the 
COVID-19 pandemic, and the pandemic exacerbated this deficit to the 
extent that emergency supplemental appropriations were needed to cover 
program costs. Moreover, APHIS notes that the AQI program is subject to 
the same inflationary pressures as other sectors of the economy. Costs 
associated with AQI personnel compensation and benefits, equipment and 
materials, rents, leases, utilities, contracts, and other direct and 
indirect costs have all increased since APHIS last adjusted the AQI 
user fees in December 2015. Since December 2015, the consumer price 
index for all urban consumers has increased over 30 percent,\3\ and the 
AQI program is unsustainable at the current fee rates. Finally, we note 
that a commenter, a small business owner, indicated that businesses 
routinely factor the impact of compliance with Federal, State, and 
local laws and regulations into their business models, and take into 
account changes in compliance costs. The commenter's contention that 
this is a common business practice was supported by several commenters 
who represented regulated entities and indicated they would need to 
adjust billing and contracts depending on the implementation date of a 
final rule.
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    \3\ The CPI Inflation Calculator is available on the Bureau of 
Labor Statistics website at https://www.bls.gov/.
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    Several commenters stated that instead of raising user fees, APHIS 
should find alternate funding sources (for example, appropriated funds) 
for AQI activities.
    As we explained in the proposed rule, the FACT Act of 1990 was 
passed by Congress and signed by the President for the express purpose 
of the AQI program becoming self-funding through the prescription and 
collection of user fees. While emergency appropriated supplemental 
funds were provided during the COVID-19 pandemic to mitigate low 
balances in the accounts, Congress indicated in the appropriations 
bills that they were to address pandemic-related exigencies, and we 
cannot depend on appropriations to cover the cost of AQI activities on 
a routine and ongoing basis.
    Many commenters asked accounting questions relating to how the fees 
were developed. We will address specific comments below by topic. In 
general, these questions are answered in the APHIS AQI cost model data 
that was cited in the proposed rule and made 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. This data 
was comprehensive; for example, the FY 2017 commercial aircraft rollup 
report contains over 190,000 lines of highly detailed cost data. To 
that end, we also provided a dedicated AQI cost model video instructing 
the public on how to properly read the data; these video instructions 
were also available at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports. 
APHIS also referenced the data in stakeholder webinars conducted during 
the comment period; information about the dates and subjects of these 
webinars is available on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-userfee-proposed-rule-webinars as are links to recordings 
of the webinars. The data availability and link also were provided via 
stakeholder announcement and, as previously mentioned, further 
explained via a dedicated AQI cost model video and corresponding 
stakeholder announcement. APHIS web analytics showed an increase in AQI 
cost model data web traffic following each of the above engagements.
    Several commenters stated that APHIS should have discussed any 
cost-cutting measures we had identified or considered in addition to 
the proposed fee increases.
    To address the current challenges, the AQI program has implemented 
ways to increase efficiency. These efficiencies reduced AQI program 
costs, and these cost savings were realized in the FY 2017 through FY 
2019 period. As a result, the cost data that APHIS used to develop the 
AQI user fee rates in this rulemaking, and which serve as the 
``baseline,'' include these program cost savings. The most significant 
way we have increased inspection efficiency is by using Risk Based 
Sampling (RBS). RBS is an advanced statistical approach that adapts to 
increase inspection rates of higher risk products and reduce inspection 
rates of proven lower risk products. Table 1 below shows the time 
savings for our trade and U.S. Customs and Border Protection (CBP) 
inspectors across all monitored pathways, without compromising 
agriculture safeguarding efforts. APHIS and CBP redirect this saved 
time to intensive activities with greater phytosanitary risk, such as 
physical inspections and regulated garbage monitoring.

[[Page 38599]]

[GRAPHIC] [TIFF OMITTED] TR07MY24.080

    The AQI program has identified other ways to increase efficiency in 
recent years. For example, CBP, through various initiatives, has 
increased its targeting efficiency rates to approximately 63 percent. 
In doing so, CBP deployed new approaches that significantly improved 
their ability to identify and inspect non-compliant material compared 
to random selection. APHIS and CBP have also facilitated more timely 
clearance of agricultural cargo by improving our processes to grant 
authority to inspectors and pest identifiers to make regulatory 
decisions at ports, rather than by national specialists in other 
locations. We also implemented advanced digital imaging to expedite 
pest identifications that in the past would have required physically 
shipping specimens, shaving days off of the pest identification 
process.
    APHIS also increased its electronic capacity to process cargo. Of 
all the government agencies that set import requirements, APHIS had the 
greatest number of forms and documents required to clear cargo. APHIS 
joined CBP's Automated Commercial Environment single window initiative, 
making it easier for importers to electronically provide information 
critical for AQI clearance prior to importation, reducing expense and 
clearance time. Additionally, we have structured regulatory 
requirements into an advanced database, and automated permit issuance 
to reduce the processing time for most Plants and Plant Products 
permits from 5 to 7 days to 1 day or less. APHIS eFile issues up to 85 
percent of the Plants and Plant Products permits to applicants in less 
than 1 minute.
    Program and process efficiencies are just one aspect of the AQI 
program's efforts to become more effective and efficient at a lower 
cost. Personnel compensation and benefits are the single largest cost 
in the AQI program, and so effective use of personnel time is essential 
to keep costs down without compromising the mission. CBP found that 
their Agriculture Specialists were increasingly spending time on 
administrative activities, taking them away from core inspection and 
regulatory functions. To address this, CBP piloted using technicians 
(full performance level GS-08) to free Agriculture Specialists (full 
performance level GS-12) to spend more time on inspection-related 
activities. CBP's staffing and workload analysis found that adding one 
technician frees up 1.49 CBP Agriculture Specialists. The 731 
Technicians in CBP's staffing plan free up the equivalent of 1,089 
Agriculture Specialists, resulting in a cost savings of nearly $81 
million per year.
    Despite these efforts to increase efficiencies, anticipated AQI 
operational costs would far surpass AQI anticipated revenue unless the 
fees are raised in the manner specified in this final rule.
    A commenter stated that APHIS should provide greater transparency 
for capital costs. The commenter expressed concerns over what was 
included in the capital costs, the allocation of those costs, and 
capital costs associated with non-AQI programs. The commenter stated 
that the proposed rule should have explained how capital costs were 
factored into fee calculations.
    We disagree with the commenter. As we explained in the proposed 
rule, there is no reserve component in the fee rates in this proposed 
rule. Rather, the fee rates in the proposed rule were 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.\4\ 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. In the AQI cost model that 
accompanied the proposed rule, we included capital costs in the cost 
model at level 26 for APHIS and level 27 for CBP, all cost objects with 
an identification code starting with ``26'' or ``27'' are planned 
capital spending costs. Likewise, we note that an overall summary of 
planned capital spending costs could also be found in the supporting 
document at https://www.regulations.gov/document/APHIS-2022-0023-0035 
that was made available during the comment period. As an additional 
measure, APHIS has included the planned capital expenditure costs in a 
series of summary tables in this document.
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    \4\ The programmatic need and legal basis for the application of 
fees to capital costs was discussed in further detail in the 
proposed rule, the relevant sections of which the agency 
incorporates by reference here. See 88 FR 54797-98, 54800-801.
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    Capital costs include items such as facility design, development 
and maintenance costs; new information technology and equipment costs, 
and AQI program outreach expansion and

[[Page 38600]]

improvement costs. The AQI Program's top 10 capital projects are:
    1. Design and construct two new plant inspection stations;
    2. Design and construct a new multi-function laboratory and 
containment facility;
    3. Upgrades and updates to the eFile system;
    4. Beltsville facility infrastructure improvements;
    5. Design and construct new plant pathogen diagnostic methods lab;
    6. Design and construct new national plant germplasm greenhouse;
    7. Design and construct new identification laboratory;
    8. New Preclearance and Offshore Programs IT System;
    9. Engage in an outreach campaign, Clean Clears Quicker, to 
emphasize the importance of regulatory compliance; and
    10. Establish Federal oversight of the existing Don't Pack A Pest 
outreach campaign.
    APHIS has treated capital costs as an overhead cost and allocated 
capital costs according to frontline Full Time Equivalent (FTE) hours 
because any capital projects would support the AQI program 
proportionately to frontline AQI FTEs. With respect to shared 
facilities, that is, facilities which house or support both AQI and 
non-AQI functions--the planned capital costs in the AQI activity-based 
cost model only include those costs attributable to the AQI program. 
Moreover, a portion of those costs are allocated to non-fee areas. Non-
fee areas are those AQI activities for which there is no fee. The 
largest non-fee areas are privately owned vehicle (POV) and POV 
passenger clearance, and pedestrians. The AQI program allocates costs 
to non-fee areas for the express purpose of ensuring that the payers of 
AQI user fees do not pay for the costs associated with non-fee areas. 
Rollup reports associated with non-fee areas are available to the 
public on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports alongside the rollup reports for the fee areas. CBP's 
appropriation covers CBP's costs associated with AQI activities in non-
fee areas. The rest are covered by trust funds that we have entered 
into pursuant to regulations issued under authority of the Plant 
Protection Act (7 U.S.C. 7711 et seq.), such as those in 7 CFR 319.37-
22 for plants for planting and those in 7 CFR 319.56-6 for fruits and 
vegetables, or are part of other APHIS programs and appropriations and 
are not included in costs factored into the AQI User Fees.
    We note, additionally, that the commenter assumed that the AQI 
program is fully funded and staffed currently, which is not the case.
    A commenter stated that they worked with CBP personnel who were 
underused at a port of entry, and questioned whether additional CBP 
staffing was warranted in light of their experience. While not directly 
challenging the validity of this claim, several other commenters 
asserted that, at other ports of entry, throughput is substantial and 
CBP employees often work overtime to ensure timely delivery of 
services. One commenter stated that some ports of entry only currently 
employ a single inspector to conduct AQI inspections.
    Our data does not support the commenter's anecdotal experience that 
CBP personnel are underused. CBP's staffing models, which are addressed 
at greater length directly below, evaluated workload and throughputs at 
ports of entry throughout the United States. CBP's staffing models 
underscore that many ports of entry have workload demands that 
currently exceed regular FTE hours.
    Several commenters noted that a significant amount of each fee 
would go to staffing. The commenters stated that it was not clear from 
the proposed rule how the additional staffing levels needed were 
arrived at, and how they would be used in providing AQI services.
    Additional staffing costs were included in the AQI cost model at 
level 35 and level 451 for APHIS and level 452 for CBP; all cost 
objects with an identification code starting with ``35'' or ``45'' are 
additional staffing costs. We summarized CBP's additional staffing 
requirements by fee area in table 1 of the proposed rule, which we have 
reproduced as table 2 below.
[GRAPHIC] [TIFF OMITTED] TR07MY24.081


[[Page 38601]]


    CBP uses two statistical workload models to determine AQI staffing 
needs by environment. The Agriculture Specialist Resource Allocation 
Model \5\ (AgRAM) calculates staffing needs for CBP Agriculture 
Specialists, and the Mission Operations Support Resource Allocation 
Model (MOSRAM) calculates the staffing needs for support positions such 
as CBP Agriculture Technicians and other support positions.
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    \5\ This model is described in the document ``Agriculture 
Resource Optimization: Fiscal Year 2020 Report to Congress'' 
available on CBP's website at https://www.dhs.gov/sites/default/files/publications/cbp_-_agriculture_resource_optimization_0.pdf.
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    CBP's staffing models calculated additional personnel needs based 
on estimated throughput as calculated in light of actual workload, in 
order to ensure that bottlenecks do not occur in port operations. APHIS 
summarized its additional personnel needs by fee area in table 2 of the 
proposed rule, which we have reproduced as table 3 below. The bulk of 
additional APHIS personnel are field positions, including botany, 
entomology and plant pathology identifiers, veterinary medical 
officers, and plant health safeguarding specialists. Increased 
frontline staffing also requires additional support staff to 
accommodate additional workload in areas such as human resources, 
financial management, and employee training. Finally, some additional 
policy and operational personnel will also be needed to accommodate the 
additional throughput. Our data in tables 2 and 3 account for these 
factors.
[GRAPHIC] [TIFF OMITTED] TR07MY24.082

    A commenter noted that the proposed rule was based on cost data 
from FY 2017 through FY 2019 and asked how budget shortfalls or 
surpluses in FY 2013 through FY 2016 and FY 2020 through FY 2022 may 
have impacted the setting of the AQI user fees.
    APHIS does not set AQI user fees based upon prior year shortfalls 
or surpluses. Under an activity-based costing methodology, APHIS uses 
actual program costs per fiscal year plus anticipated costs for capital 
planning and additional staffing allocated to each fee and non-fee 
area, then takes the total costs in each fee area and divides that 
total cost by the number of projected units (a unit being a commercial 
vessel, commercial truck, commercial railroad car, commercial aircraft, 
an international air or cruise passenger, or a treatment). The unit 
costs for 3 consecutive fiscal years are adjusted for inflation to 
today's dollars (in this rulemaking, June 2022), and then these 
adjusted unit costs are averaged. Finally, APHIS adjusted the average 
unit cost (that is, June 2022 dollars) for projected inflation, (that 
is, future dollars) for FY 2025 through FY 2028.\6\ As we explained 
above, non-fee areas are those AQI activities for which there is no 
fee. The largest non-fee areas are privately owned vehicle (POV) and 
POV passenger clearance, and pedestrians. The AQI program allocates 
costs to non-fee areas for the express purpose of ensuring that the 
payers of AQI user fees do not pay for the costs associated with non-
fee areas. Rollup reports associated with non-fee areas are available 
to the public on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports alongside the rollup reports for the fee areas. CBP's 
appropriation covers most of the costs associated with non-fee areas.
---------------------------------------------------------------------------

    \6\ See the document titled ``Projected Fees for Agricultural 
Quarantine Inspections, FY 2024-2028'' which we made available with 
the proposed rule at https://www.regulations.gov/document/APHIS-2022-0023-0010.
---------------------------------------------------------------------------

    The same commenter stated that it appeared that cost data from FY 
2014 through FY 2016 and FY 2020 through FY 2022 had a role in the 
proposed fees, although it was difficult to discern exactly to what 
degree.
    APHIS did not use cost data from FY 2014 through FY 2016 for the 
proposed rule because we had newer cost data on which to rely. APHIS 
also did not use cost data for FY 2020 through FY 2022 because, as we 
suggested in the proposed rule, these fiscal years were not a period of 
normal operations.
    A commenter stated that the proposed fees did not appear to follow 
the inflation rate since the fees were last updated. The commenter 
stated that, were the fees calculated in such a manner, they would be 
significantly lower than proposed.
    The fees were not calculated solely by applying intervening 
inflation. APHIS used actual cost data for FY 2017 through FY 2019 by 
user class, future costs for planned capital expenditures, and 
additional staffing, and divided that by the number of users per fiscal 
year to arrive at a unit cost. We then adjusted those unit costs to 
June 2022 dollars, averaged the unit costs across the 3 fiscal years, 
and finally adjusted that average unit cost for projected inflation.

[[Page 38602]]

We made comprehensive rollup reports for the cost components of each 
fee available as supplemental documents for the proposed rule. The 
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. In addition, we have included summary 
tables for each fee area below as a quick visual reference regarding 
fee development.
    A commenter stated that all AQI user fees should be capped.
    Capping all AQI user fees would undermine full cost recovery, one 
of the aims of the FACT Act. As we indicated in the proposed rule, 
while we cap fees for two AQI modes, prepaid commercial railroad cars 
and prepaid commercial truck crossings (transponder), this is due to 
their unique operational exigencies. For example, we pointed out that 
in the absence of a commercial truck transponder, CBP personnel would 
have to collect the fee at border crossings 11 million times annually, 
which is operationally untenable.
    Several commenters suggested that APHIS should tier user fees based 
on the sanitary and phytosanitary risk presented by different modes of 
conveyance (e.g., commercial aircraft versus commercial vessel) or 
different conveyance types within that mode (e.g., containerized ship 
versus non-containerized ship).
    APHIS' current user fee structure does charge different fees based 
on the mode of conveyance. This is done to preclude cross-
subsidization, and to ensure that the fees correlate to the AQI 
services that each mode receives.
    We generally do not consider it possible to tier fees within a mode 
of conveyance. This is because it is not usually possible to assign a 
particular level of sanitary and phytosanitary risk, and corresponding 
AQI services, to a conveyance type that is unique to the type. To use 
an example within the commercial vessel mode, while agricultural cargo 
is often carried in containerized ships, certain types of agricultural 
cargo, such as citrus, bananas, and pineapples, are routinely shipped 
in break bulk shipments, in which the individual boxes are placed 
within a commercial vessel's cargo hull, rather than in containers. In 
both instances, CBP personnel need to offload and inspect the cargo for 
plant pests, noxious weeds, and overall compliance with APHIS' 
regulations. Likewise, a containerized ship may carry cargo with a low 
sanitary and phytosanitary risk during one shipment, and a higher 
sanitary and phytosanitary risk in a later shipment. The climates of 
different ports of export can be unique, and a vessel departing from 
one port of export during a particular shipment may face exposure risks 
to hitchhiking pests that it does not experience when departing from a 
different port. For a similar reason, the route chosen and the time of 
year during which the shipment takes place may also contribute to 
exposure risks.
    In instances in which we have determined that the level of sanitary 
and phytosanitary risk is such that AQI services are not warranted for 
a particular conveyance type, we can and do exempt certain conveyance 
types from our user fees. For example, while we charge commercial 
railroad cars a user fee, the regulations have exempted and will 
continue to exempt locomotives and cabooses from the railroad car fee. 
Likewise, we do not charge a commercial vessel fee for vessels of less 
than 100 net tons.
    Finally, we do note that CBP's staffing model accounts for sanitary 
and phytosanitary risk, so ports of entry that routinely inspect means 
of conveyance and cargo with a high phytosanitary and sanitary risk are 
assigned more personnel than ports of entry that do not.
    Several commenters suggested that APHIS could establish different 
user fee tiers for methods of conveyance that carry agricultural cargo 
versus those that do not; while other commenters suggested a base fee, 
plus additional fees for extended service based on cargo carried.
    The current method by which APHIS calculates the AQI user fees, in 
which aggregate costs of providing AQI services are divided by number 
of instances in which those services are provided, generally does not 
currently allow for such a distinction between conveyances carrying 
agricultural cargo and those that do not carry agricultural cargo. To 
that end, we note that sanitary and phytosanitary inspections are not 
only conducted of the cargo carried by a method of conveyance, but also 
the method of conveyance itself. We also note that non-agricultural 
cargo may present sanitary and phytosanitary risks; for example, gypsy 
moth (Lymantria dispar, also known commonly as spongy moth) is known to 
infest stone and quarry products.
    As noted above, cargo is not the sole factor contributing to the 
sanitary and phytosanitary risk associated with a particular means of 
conveyance, and the AQI services required for that means of conveyance. 
Port of export, route, and time of year of the shipment may also all 
contribute to increased risk and extend the AQI services required. As a 
result, if we were to establish a base fee, with additional surcharges 
based on cargo carried, this would not take all these risk factors into 
consideration.
    A commenter suggested that fees should be tiered based on handling 
volume at a particular port of entry.
    The commenter provided no information regarding why handling 
volume, that is, the number of instances in which AQI services were 
provided at the port, should be considered indicative of the level of 
AQI services provided to individual arrivals and would provide a better 
basis for setting fees than the basis articulated in the proposed rule. 
A single, huge container shipment of cargo that has a significant 
sanitary or phytosanitary risk may take as long to inspect, if not 
longer, as several smaller shipments of low-risk cargo. We also note 
that variances throughout the year in handling volume at particular 
ports would require the fee rate to be dynamic, which would lead to 
unpredictability in terms of what fee would be assessed from arrival to 
arrival, as well as concomitant unpredictability in APHIS and CBP's 
revenue stream. It also could lead to staffing and resource allocation 
issues at ports of entry, particularly if owners and operators began to 
seek out ports with the lowest current fee.
    A commenter asked how APHIS will monitor expenditures to ensure the 
increased fees are used appropriately.
    APHIS employs multiple safeguards to ensure user fee funds are used 
appropriately. For example, from an operational perspective, APHIS 
maintains all AQI fees we collect in distinct accounts, carefully 
monitors the balances in these accounts, and only uses these funds to 
pay for our actual costs for providing these distinct services. In 
addition, APHIS will continue to maintain, evaluate, and ensure that 
our internal controls, which include our expenditure-related accounts 
and processes, are operating properly and in compliance with Office of 
Management and Budget (OMB) Circular A-123, Management's Responsibility 
for Enterprise Risk Management and Internal Control requirements. 
Examples of APHIS internal controls include verifications, 
reconciliations, authorizations and approvals, and supervisory control 
activities. APHIS also complies with Federal audit requirements which 
include audit of expenditure-related processes and accounts under the 
Chief Financial Officers Act of 1990 (CFO Act) (Pub. L. 101-576), as 
amended, the Government Management Reform Act of 1994 (GMRA) (Pub. L. 
103-356), as amended, and the Federal Financial

[[Page 38603]]

Management Improvement Act of 1996 (FFMIA) (Pub. L. 104-208, title 
VIII), as amended.
    A commenter stated that APHIS should amend the regulations to 
assess a penalty on airlines and cruise lines that is equivalent to the 
amount airlines and cruise lines have failed to lawfully remit to 
passengers.
    APHIS has no statutory authority to assess such penalties, nor is 
this request within the scope of this rulemaking.
    One commenter asked how airline passengers can assess that their 
fee was appropriately set by APHIS when they are greeted and inspected 
not by APHIS, but by CBP.
    The Homeland Security Act of 2002 created the Department of 
Homeland Security and transferred the function for AQI clearance of 
international passengers and certain other AQI functions from APHIS to 
CBP.\7\ CBP Officers review passenger manifests, passenger 
documentation and interview arriving international passengers. CBP 
Officers also refer passengers of interest to the AQI program to CBP 
Agriculture Specialists who are funded by AQI user fees for secondary 
inspection. As stated previously, rollup reports from the activity-
based cost model are available for public review on the APHIS website 
at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports. For example, there are 
over 92,000 lines of highly detailed cost data in the FY 2017 
international air passenger rollup report.
---------------------------------------------------------------------------

    \7\ 6 U.S.C. 231.
---------------------------------------------------------------------------

    Finally, several commenters requested that APHIS extend the comment 
period for the proposed rule.
    One of these commenters posed a series of questions that, the 
commenter asserted, APHIS needed to respond to for the public to 
provide informed comments on the proposed rule. These included 
questions about whether there were budget shortfalls or surpluses in 
the years 2013-2016 and 2020-2022, if such shortfalls or surpluses were 
factored into the cost-benefit analysis for the rulemaking, and whether 
adjustments for inflation would have resulted in shortfalls or 
surpluses in the years 2016 to the present. The commenter also asked 
why the aircraft fee is increasing if the number of aircraft arrivals 
has not changed and if there was a breakdown of how APHIS estimated the 
costs of capital costs and staffing and how capital costs were 
allocated in airport or non-airport environments.
    We disagree with the commenter that APHIS' responses to the 
commenter's questions were necessary to evaluate the merits of the 
proposed rule. APHIS provided all information necessary to evaluate the 
proposed rule to the public in the proposed rule itself and its 
supporting documentation. This included, for example, documentation 
regarding how the fee model was selected and why it was appropriate, 
the cost components that led to the proposed fees using that model, the 
rationale for revising particular fee caps, and the basis for our 
proposed removal of exemptions. We note that, between September 12, 
2023, and September 18, 2023, APHIS hosted webinars for the industries 
affected by the rulemaking. During the webinars, we allowed for a 
question-and-answer period. We also recorded the webinars and made them 
publicly available on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-userfee-proposed-rule-webinars. During the webinar for the commercial 
aircraft fee, which the commenter attended, we responded to each of the 
commenter's questions.
    Two commenters who requested extension of the comment period stated 
that APHIS provided no information regarding how the fees were 
calculated.
    We made comprehensive rollup reports for the cost components of 
each fee available as supplemental documents for the proposed rule. 
They were and 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.
    One commenter who requested extension of the comment period stated 
that APHIS provided no indication of how the fees would be used.
    We disagree. The proposed rule discussed at length the direct and 
indirect costs associated with providing the AQI services funded by the 
user fees.

Economic Comments

    Commenters raised several issues concerning the Regulatory Impact 
Analysis that accompanied the proposed rule. These are addressed in the 
final Regulatory Impact Analysis that accompanies this final rule.

Revisions to Regulatory Definitions

    We proposed to revise some existing definitions and to add new ones 
to Sec.  354.3(a). Specifically, we proposed to amend the definitions 
for commercial railroad car and commercial truck; to replace the 
definition of Customs with one for a definition for Customs and Border 
Protection (CBP); and to add definitions for the terms passenger, 
reconditioning, and restacking. We received no comments on these 
revisions and additions and will adopt most of them accordingly. 
However, as discussed below, we have decided not to finalize proposed 
revisions to our AQI treatment monitoring fee that would have, among 
other things, charged parties for restacking and reconditioning 
services provided in connection with AQI treatment services. Because 
the terms restacking and reconditioning will not appear in the 
regulations as a result of this decision, there is no longer a need to 
define these terms and we have not done so in this final rule.
    Additionally, for reasons that we discuss below under the section 
heading ``Commercial Vessels,'' we are adding two definitions to the 
regulations in this final rule, for the terms Great Lakes and Cascadia. 
The revisions to the commercial vessel fee described below removed the 
term barge from the regulations; as a result, we no longer need a 
regulatory definition for the term and are removing it accordingly.

Commercial Vessels

    The AQI program inspects, with some exceptions, commercial vessels 
of 100 net tons or more arriving at ports of entry into the customs 
territory of the United States. AQI user fees for inspection of 
commercial vessels are listed in Sec.  354.3(b)(1). We proposed to 
increase the user fee per arrival.
    We also proposed to eliminate the exemption for barges from Canada; 
the exemption is currently found in Sec.  354.3(b)(2)(vi). As discussed 
in the pathway analysis that accompanied the proposed rule, 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.
    Finally, we proposed that the commercial vessel fee would also not 
apply to commercial cruise (passenger) vessels that carry passengers 
paying the international passenger fees under Sec.  354.3(f), because 
the cost of inspecting the entirety of the vessel is included in the 
international cruise passenger fee. That broad proposed exemption would 
replace the existing limited exemption in Sec.  354.3(b)(2)(i) for 
certain foreign passenger vessels. In this respect, the treatment of 
commercial vessels is

[[Page 38604]]

distinct from that of international aircraft carrying passengers, which 
are not exempt from the commercial aircraft user fee.
    We received 28 comments on these proposed changes to the commercial 
vessel fee. All the commenters were generally opposed to the proposed 
changes.
    Most commenters noted that we proposed to increase the commercial 
vessel fee from the current fee of $825 to $3,557.18 in 2028, which was 
a higher percent increase than any other fee.
    Several of the commenters stated that they would support the fee if 
it was correlated to service received. The commenters asserted that the 
fees appeared higher than the level of AQI services they received at 
ports of entry.
    As we discussed in the proposed rule, our revised cost model for 
the proposed fees was based on aggregate full-time equivalent (FTE) 
hours spent providing services, such as inspections, for a particular 
user fee class.
    Similarly, a commenter suggested that APHIS should begin to analyze 
FTE hours worked by vessel type and revise the commercial vessel fee 
based on these findings before issuing a final rule to revise the 
commercial vessel fee.
    As we noted above, vessel type is not necessarily a reliable 
indicator of the level of effort needed to provide AQI services. Cargo, 
port of departure, route, time of the year in which the shipment 
occurs, and port of arrival all play a contributing role to determining 
the sanitary and phytosanitary risk associated with the vessel and the 
commensurate level of services warranted. Because these can vary 
significantly from shipment to shipment, if we were to conduct such an 
assessment, it would be difficult to extrapolate generalized, 
defensible conclusions about different vessel types from our current 
data set, which is limited to aggregate hours worked providing AQI 
services for the commercial vessel user fee class as a whole and number 
of instances of providing those services. Our current data is therefore 
insufficiently granular to observe those variances. Moreover, as we 
mentioned in the proposed rule, cargo from commercial vessels is 
routinely offloaded into a joint holding area, and inspected en masse. 
We mention this in order to underscore that the assessment requested by 
the commenter would need to be conducted de novo, and cannot be 
extracted from the existing data used to calculate the fee rates, and 
that it would require a fundamental reorientation in the manner in 
which cargo inspections are conducted. It is impracticable to conduct 
such an assessment at this time, particularly in light of resource 
constraints (as noted above, overtime is common at some ports of entry 
just to meet core inspection functions) and the economic exigencies 
facing the AQI program. To execute the sort of assessment requested by 
the commenter, we would need to hire additional port-specific 
analytical and billing support, which requires raising the fees to 
support the additional personnel.
    One commenter stated that, based on data that the commenter 
obtained, APHIS had appeared to undercount the number of arrivals of 
commercial vessels. The commenter requested that APHIS use a data set 
from CBP that they considered to be more accurate in terms of 
characterizing arrivals.
    APHIS used the same CBP data set as the commenter to calculate the 
commercial vessel fee. In reviewing the commenter's concerns, however, 
we realized that coastwise arrivals had been inadvertently filtered out 
of the data set. Coastwise arrivals refer to arrivals of the same 
vessel at a different port of entry, for which AQI services are 
provided; for example, a commercial vessel offloading cargo at the port 
of Philadelphia, then subsequently offloading at the port of 
Wilmington, Delaware, would be making coastwise arrivals. CBP's vessel 
arrival fee is set out in their regulations at 19 CFR 24.22(b). That 
fee is collected from vessels of 100 net tons or more for each arrival 
regardless of the number of arrivals taking place in the course of a 
single voyage, with a cap currently set at $5,955 per calendar year. 
Because AQI services are provided at each port of entry, an AQI user 
fee is charged for each coastwise arrival, though we do not have a cap 
on those fees. APHIS charges AQI user fees for each arrival because a 
sizable component of the fees is the inspection of the cargo, usually 
after it has been offloaded and is in a joint inspection area. Some 
vessels offload large volumes of cargo at multiple ports-of-entry 
during a single voyage. If the AQI vessel fee were charged on first 
arrival only, we would need to increase the fee even more to recover 
costs. We charge at each arrival to be more equitable to single port-
of-entry arrivals versus multiple port-of-entry arrival voyages.
    Accordingly, the proposed user fees should have been calculated by 
including coastwise arrivals within total arrivals. Total program 
costs, however, were accurate. When these costs are divided by the 
updated arrivals (including coastwise arrivals), the user fee is 
correspondingly lower; the numerator (costs) has not changed while the 
denominator (number of arrivals) has. Accordingly, in this final rule, 
the commercial vessel fee has been lowered as shown in table 4 below.
[GRAPHIC] [TIFF OMITTED] TR07MY24.083

    This discovery led APHIS to evaluate all other data sets in the 
proposed rule to ensure that all instances in which the fee had been 
assessed were accurate. We discovered that, for two other proposed fee 
increases, those for commercial aircraft and those for international 
air passengers, filtering had also occurred to remove inspections that 
occur during preclearance. We discuss this below, in the relevant 
sections of the preamble for those fees.
    Several commenters opposed the fee increase because it would have a 
disproportionate impact on vessels that are not ultra large container 
vessels.\8\
---------------------------------------------------------------------------

    \8\ See the graph for Container Ship Fleet Categories at https://agtransport.usda.gov/stories/s/Ocean-Container-Fleet-Dashboard/pjaw-nxa9.
---------------------------------------------------------------------------

    We acknowledge that the fees may often have a greater impact on 
smaller vessels than larger vessels, but we disagree that smaller 
vessels merit a lower fee just because they are smaller. Furthermore, 
we disagree that the existence of smaller vessels did not factor into 
the fee calculation. The commenters often stated as an assumption that 
ultra large container vessels necessitate more intensive AQI services 
than commercial vessels that are not ultra large container vessels. 
While this is sometimes the case, size of vessel is not the sole 
determinant of the level of AQI services warranted for a particular 
vessel. As we noted above, cargo, port of departure, route, time of the 
year in which the shipment occurs,

[[Page 38605]]

and port of arrival all play a contributing role to determining the 
sanitary and phytosanitary risk associated with the vessel and the 
commensurate level of services warranted. APHIS also notes that the 
rise of ultra large container vessels was not the sole factor 
contributing to this fee increase. The change in cost allocation 
methodology from number of arrivals to FTE hours was also a significant 
factor. As discussed above, APHIS develops fees using the average unit 
cost across 3 fiscal years. In the case of the commercial vessel fee, 
the unit cost is the arrival of a vessel in foreign trade, including 
coastwise arrivals, during a single voyage. The arrivals of vessels in 
foreign trade that were not ultra large container vessels brought this 
average cost per arrival down to the rates in this final rule. If APHIS 
had based the new vessel fee rates exclusively on ultra large container 
vessel arrivals, the commercial vessel fee would have been considerably 
higher.
    Summary tables 5 and 6 for commercial vessel fee calculation below 
show that APHIS used actual cost data for FY 2017 through FY 2019 for 
commercial vessels, future costs for planned capital expenditures, and 
additional staffing, divided by number of users per fiscal year to 
arrive at a unit cost. We then adjusted those unit costs to June 2022 
dollars, averaged the unit costs across the 3 fiscal years, and finally 
adjusted that average unit cost for projected inflation. The discussion 
of fee rates relative to other costs of doing business was to 
illustrate relative economic impact of the fee, and not to serve as the 
basis for fee development.
    We included the summary tables to be used as a quick reference 
regarding fee development. For more comprehensive cost data information 
please see the full rollup reports from the APHIS AQI activity-based 
cost model. As we explained above, these questions are answered in the 
APHIS AQI cost model data that was cited in the proposed rule and made 
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.
    For October 1, 2024, October 1, 2025, October 1, 2026, fee rates, 
APHIS subtracted the January 1, 2024 rate from the October 1, 2027 
rate, and divided by 4. This amount became the per phase increase. The 
per phase increase was then added to the previous phase amount until 
reaching the October 1, 2027 rate.
BILLING CODE 3410-34-P

[[Page 38606]]

[GRAPHIC] [TIFF OMITTED] TR07MY24.084


[[Page 38607]]


[GRAPHIC] [TIFF OMITTED] TR07MY24.085

BILLING CODE 3410-34-C
    Notwithstanding the above discussion, we have determined that 
certain commercial vessels that operate within the Great Lakes, or in 
the region along the coastline between Alaska and Oregon, are uniquely 
situated and have created a new commercial vessel fee that is lower 
than that for other commercial vessels. This will provide a degree of 
regulatory relief for such vessels that is also aligned with the 
sanitary and phytosanitary risk that the vessels present. We discuss 
these changes below.
    Several commenters stated that they operated barges or other 
shipping vessels within the Great Lakes, or in the region along the 
coastline between Alaska and Oregon. The commenters stated that they 
were uniquely situated and that assumptions that APHIS articulated in 
the proposed rule about

[[Page 38608]]

the commercial vessel industry as a whole did not apply to them. While 
we stated in the proposed rule that total cargo capacity of the global 
fleet expanded by more than 63 percent from 2011 through 2020, the 
commenters stated that their vessels had not increased in size. In 
fact, vessel operators within the Great Lakes stated that the average 
size of vessels operating within the Great Lakes had not increased 
since the 1970s. Similarly, we stated in the proposed rule that far 
fewer vessels had arrived internationally from 2011 through 2020 than 
APHIS had predicted, but the commenters stated that their average 
number of arrivals per year had remained relatively constant. Further, 
we stated in the proposed rule that individual vessels now took much 
longer to inspect than they previously had, but the commenters stated 
that they had experienced no significant increase in the amount of time 
inspections took.
    Several commenters stated that visual inspection of their vessels 
was often brief, and a few barge operators stated that CBP had never 
boarded their vessels. Several commenters also questioned whether the 
proposed fees significantly exceeded the level of AQI services provided 
to vessels within the Great Lakes and in the region along the coastline 
between Alaska and Oregon. Two commenters stated that, at face value, 
the fee levels appeared to be set significantly above the level of 
inspection services currently provided, which would be inconsistent 
with the FACT Act. Several operators stated that they seldom, if ever, 
carried agricultural cargo. Finally, the commenters stated that, 
because they operated solely within distinct geographical areas between 
the United States and Canada, they pose little to no phytosanitary 
risk. (As discussed in this document, the geographic area covered by 
the port of departure, the route, and the port of arrival all do 
contribute to the risk profile associated with a particular commercial 
vessel. However, they are not the sole factors; for example, the cargo 
carried may itself present a sanitary or phytosanitary risk.) To that 
end, several commenters stated that Great Lakes vessels often are too 
large to fit through the St. Lawrence seaway lock system and cannot 
leave the Great Lakes; one commenter stated that, even if they could 
leave the Great Lakes, many Great Lakes vessels are not certified by 
the United States Coast Guard to enter the ocean.
    Commenters proposed multiple options to address these stated 
differences. One option proposed was to entirely exempt vessels 
operating within the Great Lakes or in the region along the coastline 
between Alaska and Oregon from the commercial vessel fee. This 
exemption would apply to all vessels operating within the regions, 
including container vessels, break bulk vessels, barges, and all other 
commercial vessels. A second option proposed was to retain the current 
exemption for certain Canadian barges. A third option proposed was to 
apply the fee only to vessels carrying agricultural cargo, and to 
exempt commercial vessels that did not carry agricultural cargo. A 
fourth option proposed was to retain the existing commercial vessel fee 
for vessels operating within the Great Lakes or in the region along the 
coastline between Alaska and Oregon, provided that the vessels were not 
currently exempt from paying the fee (e.g., barges), but to add an 
additional per-container surcharge or otherwise scale it in accordance 
with ship size. Finally, a fifth option proposed was to retain the 
existing fee, but to adjust it for intervening inflation. The 
commenters who provided the fifth option stated that the cost to 
inspect commercial vessels operating within the Great Lakes or in the 
region along the coastline between Alaska and Oregon should not have 
increased above the rate of inflation since the previous fees were put 
in place.
    After reviewing the comments and available information, including 
data from CBP and the U.S. Army Corps of Engineers, as well as 
information maintained by the shipping industry in the regions 
themselves, we agree that the vessels operating within the Great Lakes, 
or in the region along the coastline between Alaska and Oregon, merit 
additional consideration. The commenters presented information that 
they operate in a distinct geographical area that they seldom depart 
from, and sometimes are not physically able to leave. They also 
presented information indicating that their departures and arrivals are 
often more frequent than those of other commercial vessels, and 
publicly available information indicates that the vessels often take 
the same or substantially similar routes per shipment and sometimes 
carry the same or substantially similar cargo per shipment. Based on 
the risk factors identified above, the risk from these vessels is 
often, although not always, more well defined. The port of departure, 
route, and port of arrival are often the same or substantially similar: 
Many vessels are running out and back trips across the Great Lakes or 
along the coastline between Alaska and Oregon, sometimes multiple times 
a week.
    However, as we discuss below, we would not say that these vessels 
are always less risky. Cargo can be a significant risk factor. For 
example, several areas in Canada are quarantined for European cherry 
fruit fly. Cherries from such areas could present a phytosanitary risk 
and vessels carrying such cargo would likewise present a risk. For this 
reason, we disagree with the first option that proposed to exempt all 
such vessels entirely from the commercial vessel fee. We currently 
inspect the vessels for possible sanitary and phytosanitary risks, and 
such vessels can carry cargo with significant risks. This is true even 
if the cargo is not agricultural cargo; as noted above, gypsy moth or 
spongy moth (Lymantria dispar) is known to infest stone and quarry 
products, so quarry products from an area of Canada that is infested 
with the moth do present a phytosanitary risk. For this reason, the 
third option also is not viable, because vessels that do not carry 
agricultural cargo may still merit AQI inspections.
    Insofar as barge operators did not provide verifiable, supporting 
information that they only carry cargo with no sanitary or 
phytosanitary risk, and do not merit inspection of the vessel itself, 
and in light of our aim to achieve full cost recovery, we have decided 
not to retain the barge exemption, the second option proposed by 
commenters.
    We also disagree with the fourth option to assess a per container 
surcharge; among other things, this option would incentivize the use of 
break bulk vessels, which do not carry containers, to carry 
agricultural products between Canada and the United States, because the 
vessels would be subject to a lower user fee. Because of their 
agricultural cargo, however, these vessels would still need an 
equivalent rate of phytosanitary inspection. Accordingly, over time, we 
consider it likely that this incentivization would compromise full cost 
recovery.
    For a similar reason, we also cannot scale the fee based solely on 
ship size; a smaller ship containing break bulk agricultural products 
may pose a higher phytosanitary risk and thus require more intensive 
inspection services than a larger container ship containing no 
agricultural products or known host material for plant pests and 
noxious weeds. (That being said, as we mentioned previously in this 
document, commercial vessels of less than 100 net tons have been, and 
will continue to be, exempt from the commercial vessel fee.

[[Page 38609]]

This is true regardless of whether they originate from Canada or any 
other foreign country.)
    We see merit in the fifth option, however. The commenters presented 
significant information suggesting that the commercial vessel fee, as 
proposed, may not be appropriate for or commensurate with the level of 
AQI services provided to them. This option would allow APHIS to account 
for the differences stated by the commenters, and allow APHIS to 
further assess the appropriate fee in a future rulemaking. In so doing, 
it would effectively keep the current fee for such vessels, with an 
allowance, adjustment for inflation, that the commenters suggested and 
that we agree is appropriate.
    However, we do not think this solution can be applied unilaterally 
to all arrivals within the Great Lakes or in the region along the 
coastline between Alaska and Oregon, particularly if the vessel carries 
cargo that may present a significant sanitary or phytosanitary risk.
    Accordingly, in this final rule, we are pursuing the fifth option, 
with appropriate modifications to address the foregoing considerations. 
Commercial vessels traveling solely between the United States and 
Canada and either within the Great Lakes or along the coastline between 
Alaska and Oregon (which we are terming ``Cascadia'' out of recognition 
of the Cascadian bioregion in which the coastline is located) would be 
assessed the following fee, provided that certain conditions, set forth 
below, are met: $837.51 in FY 2025, $850.03 in FY 2026, $862.54 in FY 
2027, and $875.06 in FY 2028.
    To qualify for the lower fee rate, a vessel must meet the following 
requirements:
     Is not carrying cargo originating from countries other 
than the United States or Canada.
     Is not carrying plants or plant products.
     Is not carrying animals or animal products.
     Is not carrying soil or quarry products from areas in 
Canada listed in 7 CFR 319.77-3 as being infested with gypsy moth. That 
section of the regulations governs the importation of gypsy moth host 
material.
     Is not carrying wood packaging material as defined under 7 
CFR 319.40-1. In this section of the regulations, ``wood packaging 
material'' is defined as ``Wood or wood products (excluding paper 
products) used in supporting, protecting or carrying a commodity 
(includes dunnage).''
    All the above types of cargo may present a sanitary or 
phytosanitary risk, and, in instances in which a vessel carries such 
cargo, the level of AQI services provided to address this possible risk 
would merit the full commercial vessel fee.
    To clarify to which vessels the reduced fee could apply, in this 
final rule, we are adding definitions for Great Lakes and Cascadia to 
the regulations. We have also prepared maps depicting the Great Lakes 
and Cascadia regions and are making them available as supporting 
documents with this final rule.
    We are defining Great Lakes as ``the Great Lakes of North America 
and the waters of the St. Lawrence River west of a rhumb line drawn 
from Cap de Rosiers to West Point, Anticosti Island, and west of a line 
along 63[deg] W longitude from Anticosti Island to the north shore of 
the St. Lawrence River.'' This is consistent with the U.S. Coast Guard 
definition of the region in their regulations found in 46 CFR 42.05-40.
    We are defining Cascadia as ``British Columbia and those ports of 
entry into the United States lying south of 59[deg]26'59.316'' N, north 
of 43[deg]23'34.152'' N, west of 122[deg]20'31.2'' W, and east of 
135[deg]20'2.4'' W.'' CBP's regulations in 19 CFR 101.3 designate 
United States ports of entry, and the following ports of entry fall 
within the area we are defining as Cascadia:
     Alaska--Juneau;
     Alaska--Ketchikan;
     Alaska--Sitka;
     Alaska--Skagway;
     Alaska--Wrangell;
     Washington--Aberdeen;
     Washington--Anacortes (Puget Sound);
     Washington--Friday Harbor (Puget Sound);
     Washington--Longview;
     Washington--Port Angeles (Puget Sound);
     Washington--Seattle (Puget Sound);
     Washington--Tacoma (Puget Sound);
     Oregon--Astoria;
     Oregon--Coos Bay;
     Oregon--Newport; and
     Oregon--Portland.
    Two commenters stated that they operated container vessels between 
New Jersey and Bermuda, with the majority of arrivals into the United 
States being unloaded containers that previously contained cargo. The 
commenters requested a lower fee for their vessels and similarly 
situated operators.
    The commenters did not provide sufficient information to 
characterize their operation as uniquely situated or similarly situated 
to the Great Lakes and Cascadian vessels described above. To cite a few 
examples, it was not clear whether the containers ever contained 
agricultural cargo, and, if so, whether the empty containers were 
cleared of all agricultural debris before return to the United States. 
The commenters also did not mention whether the routes were direct, and 
what route was used. Based on the absence of information necessary to 
evaluate the commenter's claims, we cannot make the determination that 
a lower vessel fee is appropriate for the commenters operating 
container vessels between New Jersey and Bermuda. APHIS is, however, 
open to receiving additional information on this topic and would 
consider proposing a revision in the future.
    Finally, one commenter encouraged APHIS to explore means for 
electronic remittance of the commercial vessel fee.
    CBP collects the commercial vessel fee on APHIS' behalf and offers 
electronic remittance through its eCBP portal (e.cbp.dhs.gov) and its 
Mobile Receipts and Collections (MCR) solution (cbp.gov/trade/priority-issues/revenue/revenue-modernization/automation-368-and-1002-receipts/mcr-faq).
    In summary, in response to comments, we have lowered the commercial 
vessel fee overall to account for coastwise arrivals and have created a 
separate commercial vessel fee for certain vessels operating within the 
Great Lakes or along the coast between Alaska and Oregon.

Commercial Trucks

    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 fee had been set at $7.29 per truck arrival, with an 
option, under paragraph (c)(3), to prepay an amount 40 times the 
single-arrival fee to obtain a transponder. We proposed to adjust the 
fees in that paragraph and to set the corresponding prepaid 
(transponder) user fees at an amount 60 times the unrounded fee rates 
for each arrival. We further proposed to clarify that prepayments for 
purchases of transponders may be made at any time during a calendar 
year. The proposed rule did not provide, however, for prorating of the 
prepayment cost or allowing credit for individual crossings made prior 
to prepayment if the operator of the commercial truck elects to prepay 
during a calendar year. This is consistent with CBP's handling of their 
truck transponder fee in 19 CFR 24.22(c)(2), and we stated in the 
proposed rule that the intent of the proposed change was to better 
align our prepayment requirements with those of CBP.

[[Page 38610]]

    We also proposed 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 was intended to clarify 
application of the fee.
    We received two comments from one commenter on the proposed changes 
to the fees for commercial trucks.
    In the supporting documentation that accompanied the proposed rule, 
we indicated that the data that we had obtained from the Department of 
Transportation (DOT) regarding freight volume per truck between the 
years 2006 and 2021 suggested a 79 percent increase in the number of 
tons per truck during that time. The commenter stated that this truck 
crossing and freight data did not completely match its own data and 
calculations. Specifically, the commenter indicated that its data 
indicated lower carrying capacity per truck in 2021 (9.63 tons) and an 
average of 22,376 more truck crossings per year between 2006 and 2016. 
Assuming truck crossings to be the denominator by which we determined 
average freight volume, the commenter stated that its data indicated 
that average freight volume was in fact lower in 2006 through 2016 than 
we had presented it to be. While the commenter conceded that carrying 
capacity per truck had increased between 2006 and 2021, the commenter 
stated that carrying capacity had not increased to the magnitude 
presented by APHIS, and that these discrepancies resulted in an 
overestimation of agricultural risk. The commenter stated that this 
overestimation of agricultural risk had resulted in CBP erroneously 
believing that additional personnel were needed to inspect commercial 
trucks, and that the fee would be lower were it adjusted to reflect 
actual freight volume.
    The commenter did cite data that differs from the data APHIS cited 
in the supporting documentation that accompanied the proposed rule, and 
the data in that supporting documentation may have been in error. 
However, the data the commenter presented does not directly or 
indirectly impact how the fee was set. Neither the disputed numbers nor 
the supporting document itself served as the basis for the fee, nor the 
analysis of fee impacts in the initial economic analysis. The fee for 
this conveyance is not derived from the performance of the industry, 
nor did we use cargo capacity as a proxy for the level of effort needed 
to inspect trucks. As with the other fees, the commercial truck fee 
results from total AQI commercial truck program costs divided by the 
number of truck crossings for FY 2017 through FY 2019 to arrive at the 
base unit cost.
    The commenter itself noted that both its data and APHIS' data 
reported the same number of truck crossings per year from 2017 to 2020. 
As noted above, the supporting document that the commenter disputed did 
not serve as a basis for the fee. It was intended only to indicate that 
the freight volume for commercial trucks had increased since 2006, a 
contention that the commenter did not dispute in principle, only in 
degree. The purpose of the supporting document is to contextualize the 
changes in the carrying capacity in the industry, as well as illustrate 
the relative size and impact that the fee might have on the conveyance 
as a whole. To that end, though, we do note that the commenter's data 
does suggest that commercial trucks may have lower cargo capacity than 
our supporting documentation suggested. We have evaluated the economic 
analysis that accompanies this final rule in light of that information 
but determined that its assumptions and conclusions still hold.
    Additionally, this supporting document was not used as the basis 
for the additional CBP staffing needs. As indicated previously in this 
document, CBP's staffing models calculated additional personnel needs 
based on estimated throughput as calculated in light of actual 
workload, in order to ensure that bottlenecks do not occur in port 
operations.
    The commenter also expressed concerns about the transponder cost 
increasing from 40 to 60 times the per arrival fee. The commenter asked 
how we would continue to incentivize transponder use.
    As we stated in the proposed rule and the supporting document, 
APHIS determined that the average truck transponder is used 90 times 
per year, cross-referencing truck border-crossing data and truck 
transponder purchase data. Charging 60 times the per crossing fee is 
still a 33.3 percent discount, compared to average transponder use. We 
consider a 33.3 percent discount compared to average transponder use a 
sufficient incentive for transponder use.
    The same commenter stated that, because the percentage of increase 
for the transponder fee would significantly surpass the percentage 
increase for the individual per-crossing fee, the transponder would no 
longer be incentivized, and commercial truck operators could abandon 
the transponder in favor of the single arrival fee.
    The CBP Transponder system does not track the individual number of 
crossings per transponder; instead, it tracks the total number of 
crossings. Collections for single payer and transponder crossings are 
separate. The number of single payer crossings is determined by 
dividing single payer collections by the fee rate. Single payer 
crossings are subtracted from total crossings to determine transponder 
crossings. We determined average transponder crossings by dividing 
total transponder crossings by total transponders purchased 
(transponder collections divided by transponder fee). Given that APHIS 
found that the average transponder is used 90 times a year, charging 60 
times the per crossing fee still significantly incentivizes the 
transponder over the per crossing fee for the average commercial truck 
operator, despite the differences in percent increase between the two 
fees. It is possible that some truck operators who make fewer than 60 
crossings will decide to pay the per crossing fee as a result of this 
rulemaking; however, we do not foresee the transponder being generally 
abandoned in the manner suggested by the commenter.
    We acknowledge that we proposed to raise both the per arrival 
commercial truck fee and the multiple that results in the transponder 
fee. Additionally, while we proposed to phase in the increases to the 
per arrival fee, we did not propose to phase in the increase to the 
multiple: We proposed that the multiple would immediately increase from 
40 times to 60 times. To help facilitate transponder use in the first 
year of implementation of the revised fee, we will set the fee at a 
multiple of 50 times the individual crossing fee for the period between 
October 1, 2024 and September 30, 2025. We have revised the regulatory 
text accordingly.
    The commenter stated that APHIS should work with our counterparts 
in Canada and Mexico to develop policies that will mitigate the risk of 
pest importation or other potential threats while reducing, exempting, 
or eliminating fees and other regulatory costs impacting North America 
trade.
    APHIS works collaboratively with our colleagues in Canada and 
Mexico to develop harmonized polices to mitigate the risk of pest 
importation. For example, APHIS is the United States' representative to 
the North American Plant Protection Organization, or NAPPO, a regional 
plant protection organization. Created in 1976, NAPPO coordinates the 
efforts among the United States, Canada, and Mexico to

[[Page 38611]]

protect their plant resources from the entry, establishment, and spread 
of harmful plant pests, while facilitating safe intra- and inter-
regional trade. Through NAPPO, APHIS works closely with its regional 
counterparts and industries to develop harmonized regional standards 
and approaches for managing pest threats.
    Additionally, outside of the auspices of NAPPO, APHIS works closely 
with our North American National Plant Protection Organization (NPPO) 
counterparts, the Canadian Food Inspection Agency (CFIA) and Mexico's 
Servicio Nacional de Sanidad, Inocuidad y Calidad Agroalimentaria, to 
harmonize our approaches to phytosanitary risk to the extent possible. 
Examples of this collaboration include the United States-Canada 
Greenhouse-Grown Plant Certification Program (GCP) and the Netherlands 
bulb preclearance program. The GCP has been active since 1996 and 
allows greenhouse-grown indoor houseplants and outdoor bedding plants 
to move between Canada and the United States using a certification 
label in lieu of a phytosanitary certificate (PC), provided the plants 
meet the phytosanitary import requirements of both Canada and the 
United States. The GCP certification label eliminates the cost of a PC 
for certified nurseries. For the Netherlands bulb preclearance program, 
APHIS and CFIA have harmonized our operational workplan for imports 
since 2008.
    Finally, as discussed previously in this document, APHIS has 
pursued measures to improve efficiencies and reduce costs associated 
with the AQI program.
    However, the commenter's assumption that North American trade 
presents little or no sanitary and phytosanitary risk that merits AQI 
services is incorrect; under APHIS' regulations in titles 7 and 9 of 
the Code of Federal Regulations, there are numerous restrictions on the 
importation of animals, animal products, plants, and plant products 
from Canada and Mexico.
    We note also that North American trade is no longer exclusively 
North American; for example, APHIS is aware that 194 countries send 
United States-bound freight through Canada seaports, and then across 
the border via truck and rail. The increased risk posed by commodities 
arriving through our North American trading partners makes it necessary 
to increase our level of effort to safeguard United States agriculture. 
This increased effort requires additional personnel, equipment, and 
facilities and, therefore, incurs additional costs. The AQI program 
must adjust the fees to recover these costs. In short, the elimination 
or exemption of AQI user fees for North American trade would 
significantly adversely impact full cost recovery because we would 
still need to provide AQI services to address the sanitary and 
phytosanitary risks posed by such trade.
    The commenter stated that the information and data provided by 
APHIS does not explain how the proposed fee increases were calculated 
based upon the various services performed by APHIS inspectors. The 
commenter expressed concern that APHIS did not calculate the proposed 
fees based upon the current and future needs of the agency, but rather 
upon what they assume motor carriers can afford according to operating 
cost data.
    The summary tables for the commercial truck fee calculation (tables 
7 and 8 below) show that APHIS used actual cost data for fiscal years 
2017 through 2019 for commercial truck, future costs for planned 
capital expenditures, and additional staffing, divided by number of 
truck arrivals per fiscal year to arrive at a unit cost. We then 
adjusted those unit costs to June 2022 dollars, averaged the unit costs 
across the 3 fiscal years, and finally adjusted that average unit cost 
for projected inflation. The discussion of fee rates relative to other 
costs of doing business was to illustrate relative economic impact of 
the fee, and not to serve as the basis for fee development.
    The summary tables are intended to be a quick reference regarding 
fee development. For more comprehensive cost data information please 
see the full rollup reports from the APHIS AQI activity-based cost 
model on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports. As we explained above, these questions regarding how the fees 
were arrived at are answered in the APHIS AQI cost model data that was 
cited in the proposed rule and made available on the APHIS website at 
the link above.
    For October 1, 2024, October 1, 2025, October 1, 2026, fee rates, 
APHIS subtracted the January 1, 2024 rate from the October 1, 2027 
rate, and divided by 4. This amount became the per phase increase. The 
per phase increase was then added to the previous phase amount until 
reaching the October 1, 2027 rate.
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[[Page 38613]]


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BILLING CODE 3410-34-C
    In summary, in response to comments regarding the commercial truck 
fee, we have lowered the cost of a transponder to 50 times the per 
arrival fee for the period between October 1, 2024 and September 30, 
2025. The fees are otherwise being finalized as proposed.

Commercial Railroad Cars

    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. We 
proposed to increase the user fee per arrival and to set the 
corresponding prepaid user fees at an amount 48 times the AQI user fee 
for each arrival.
    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 proposed to amend Sec.  354.3(d)(1) to 
remove the references to loaded cars. We proposed this change

[[Page 38614]]

because APHIS does not collect AQI user fees for unloaded railroad cars 
under the current regulations; however, CBP inspects all commercial 
railroad cars, loaded and unloaded. We received no comments on this 
proposed change and will adopt it accordingly.
    We also proposed to revise paragraph (d)(4) to provide for 
submission of remittance not only by The Association of American 
Railroads (AAR), and the National Railroad Passenger Corporation 
(AMTRAK), as is the case in the current regulations, but by individual 
railroad companies as well. This revision would more closely align our 
requirements pertaining to railroad car user fees with those of CBP as 
set out in 19 CFR 24.22(d).
    We received two comments from one commenter on the proposed changes 
to the fees for commercial railroad cars.
    The commenter opposed the proposed fee increases in general and the 
increase to the prepaid railroad car fee in particular. The commenter 
noted that, in the economic analysis that accompanied the proposed 
rule, we indicated that the number of railroad car arrivals has 
remained relatively steady, averaging approximately 3.5 million from 
2014 to 2022. The commenter questioned why the per arrival fee and 
prepaid fee would increase significantly if arrivals had not 
commensurately increased.
    The per arrival fee was derived by dividing the actual programs 
costs plus planned capital expenditures and additional staffing costs 
(adjusted for inflation) associated with providing AQI services for 
railroad cars by the number of anticipated arrivals. Accordingly, an 
increase or decrease in the forecasted number of arrivals would not 
itself have caused the fee to change, if aggregate costs remained 
correlated with arrivals. However, as stated in the proposed rule, the 
main reason for the per arrival fee increase for commercial railroad 
cars is that what falls under the definition of a railroad car as set 
forth in CBP's regulations in 19 CFR 24.22(d)(1) is now much larger 
than what the current inspection fee is designed to cover. The fees 
were 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. This, in turn, has increased the amount of cargo 
in general arriving into the United States by rail. In sum, although 
arrivals have remained relatively constant, costs have increased 
significantly due to the change in size of railroad cars.
    With regard to the increased cost of the prepaid fee, as stated in 
the proposed rule, based upon analysis of collections and arrival data, 
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. APHIS notes, 
however, that the prepaid railroad car user fee is optional, and, as we 
noted in the proposed rule, very few railroad companies use the prepaid 
option. If an entity determines that paying per arrival fee is more 
advantageous, they may do so.
    The commenter stated that it was not clear that the fee increases 
are directly linked to the need for more resources and staff to inspect 
railroad cars specifically. The commenter noted that while costs for 
staffing and capital resources are noted generally, it is not clear if 
those costs are based on deficits experienced by the agency due to 
railroad car inspection duties.
    APHIS made available a high-level cost summary as a supporting 
document with the proposed rule,\9\ and comprehensive rollup reports 
directly from the APHIS AQI cost model were available with the proposed 
rule on the APHIS website at https://www.aphis.usda.gov/aphis/ourfocus/business-services/aqi-user-fees/aqi-fee-types/aqi-user-fee-reports.\10\ 
Moreover, the summary tables for commercial railroad car fee 
calculation (tables 9 and 10 below) show that APHIS used actual cost 
data for fiscal years 2017 through 2019 for railroad cars, future costs 
for planned capital expenditures and additional staffing, divided by 
number of users per fiscal year to arrive at a unit cost. APHIS 
adjusted those unit costs to June 2022 dollars, averaged the unit costs 
across the 3 fiscal years, and finally adjusted that average unit cost 
for projected inflation. The summary tables are intended to be a quick 
reference regarding fee development. For more comprehensive cost data 
information please see the full rollup reports from the APHIS AQI 
activity-based cost model.
---------------------------------------------------------------------------

    \9\ The document, titled ``AQI User Fee Input Costs and Cost 
Allocation Summary,'' can be accessed online at https://www.regulations.gov/document/APHIS-2022-0023-0035.
    \10\ 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.
---------------------------------------------------------------------------

    For October 1, 2024, October 1, 2025, October 1, 2026, fee rates, 
APHIS subtracted the January 1, 2024 rate from the October 1, 2027 
rate, and divided by 4. This amount became the per phase increase. The 
per phase increase was then added to the previous phase amount until 
reaching the October 1, 2027 rate.
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[[Page 38615]]

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[[Page 38616]]


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    The commenter stated that the proposed rule did not appear to 
consider the use of technology by APHIS to reduce inspection costs, in 
lieu of raising fees, though the commenter did not specify what kinds 
of technology APHIS might use to reduce inspection costs.
    As we discussed above, the AQI program has made significant efforts 
to reduce program costs while maintaining a robust agricultural 
safeguarding program. APHIS also notes that the evaluation, 
procurement, maintenance, and upgrading of technology also carries a 
cost, as well as the cost of training personnel or the hiring of new 
personnel skilled in handling the technology.
    In summary, we are finalizing the commercial railroad car fee as 
proposed.

Commercial Aircraft

    APHIS inspects international commercial aircraft arriving at 
airports in the customs territory of the United

[[Page 38617]]

States. These inspections cover commercial aircraft capable of carrying 
cargo and passengers, regardless of whether cargo or passengers are on 
a particular flight. AQI user fees for inspection of commercial 
aircraft per arrival are listed in Sec.  354.3(e)(1). The current fee 
is $225 per arrival. We proposed to adjust the fee in that paragraph to 
increase the user fee per arrival.
    In addition to the proposed fee changes, we proposed to remove 
paragraph (e)(2)(iv) to eliminate the current fee exemption for 
aircraft with 64 or fewer seats.
    We also proposed to require monthly, rather than quarterly, 
remittances for the commercial aircraft fee, clarify our remittance 
requirements, and provide for electronic payments and statements. We 
further proposed to include in the regulations information on agents 
responsible for ensuring compliance with paying the user fees and a 
requirement for entities to notify APHIS in the event they have a 
change in personnel responsible for fee payments.
    We received five comments on these proposed changes. All the 
commenters were generally opposed to the proposed changes.
    A commenter stated that we needed to disclose the number of 
aircraft inspected per inspector and number of plant pests or noxious 
weeds found during these inspections per day, month, or year, in order 
to validly assess the efficacy of the current inspections and the need 
for the fee increases.
    The number of aircrafts inspected per inspector is materially 
irrelevant to evaluating the base costs for the proposed fee. In the 
AQI cost model used to set the proposed fee, we evaluated the aggregate 
time currently needed to conduct all commercial aircraft inspections, 
whether they were conducted by one inspector or multiple inspectors at 
a particular port of entry. We do note, however, that CBP's staffing 
model indicated that additional staff were needed to inspect aircraft 
and air cargo to match personnel to throughputs and workload.
    As we discussed above, a host of factors can contribute to the 
sanitary and phytosanitary risk associated with a particular arrival. 
This includes the cargo, the country of departure, the route chosen, 
the port of entry, and the time of year when the shipment takes place. 
Furthermore, the sanitary and phytosanitary risk in foreign regions 
that ship to the United States is not static and past import history is 
not necessarily indicative of future trends. A disease or pest of 
concern not previously known to exist in the country could be 
introduced; climatic conditions for a particular season could be 
especially conducive to pest populations (this is becoming increasingly 
common due to the climatic volatility associated with climate change); 
industry downturns could reduce monitoring and suppression efforts at 
places of production; or regime change could downsize the foreign 
government's sanitary and phytosanitary efforts. Sometimes multiple 
factors can occur simultaneously.
    It is important to note, however, that the introduction and 
establishment of plant pests within the United States has significant 
economic consequences both for APHIS and for the affected industries. 
As we discussed in the proposed rule, 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, in addition to the direct and indirect losses experienced 
by the affected industries themselves. Even plant pest outbreaks in a 
single State can prove quite costly: APHIS recently had to request 
$103.5 million in emergency funding to address the effects of fruit fly 
outbreaks in California.
    The same commenter stated that the proposed rule appeared to state 
that APHIS uses the commercial aircraft fee and international passenger 
fee to cross-subsidize other fee areas. The commenter specifically 
cited the following from the preamble of the proposed rule: 
``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 final 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.'' The commenter 
asserted that APHIS failed to explain the anticipated reduction in 
percentage of total collections paid by the air sector, and whether 
this indicates that the air sector industry overpaid in FY 2017 through 
FY 2019 and thus cross-subsidized other user fee areas.
    As discussed in the proposed rule, APHIS updated its AQI cost model 
to allocate certain costs based upon the number of frontline FTE hours. 
In contrast, in the 2015 rulemaking, the cost model allocated those 
costs based upon the number of arrivals. Our updated model resulted in 
more accurate cost allocations based upon level of effort in each area, 
and the percentage of total collections associated with the air sector 
shifted accordingly. No cross-subsidization of other modes occurred 
between FY 2017 and FY 2019. Revenue from other fees will increase more 
than aircraft and air passenger fees, making the relative revenue from 
aircraft and air passengers a smaller percentage of total revenue. We 
disagree with the commenters' interpretation of our statements in the 
proposed rule.
    A commenter stated that APHIS did not recognize fundamental changes 
since 2020 to CBP's customs clearance process, specifically for e-
Commerce-driven parcel processing and de minimis (Entry Type 86) 
shipments.
    APHIS did not propose to charge a fee for individual parcels. We 
note, however, that entry type has no bearing on sanitary or 
phytosanitary risk.
    A commenter stated that international mail shipments already pay 
customs fees.
    The customs fees mentioned by the commenter are unrelated to AQI 
services, but rather other customs services provided by CBP. 
International mail shipments pay specific Customs entry fees to CBP, 
but those are not for AQI inspections. APHIS does not charge an AQI 
user fee specifically for international mail shipments. Rather, those 
costs are allocated to the fee for commercial aircraft. While the AQI 
program is related to the customs entry process, funds collected by CBP 
through their various fees do not fund AQI activities. AQI cargo 
activities are funded through AQI user fees and not CBP fees.
    A commenter stated that users were asked to accept the proposed 
fees at face value without any means to review how APHIS arrived at the 
proposed user fees outlined in the proposed rule.
    We disagree. APHIS AQI has prioritized transparency in this 
rulemaking and gone to great lengths to make its data available. As we 
explained above, the APHIS AQI cost model data was cited in the 
proposed rule and made available on the APHIS website. We also 
referenced the data in the stakeholder webinars. We also provided the 
data and link via stakeholder announcement, and we further explained 
via a dedicated AQI cost model video and corresponding stakeholder 
announcement. APHIS web analytics showed an increase in AQI cost model 
data traffic following each of the above engagements. At least one 
stakeholder specifically referenced the data in their comment, making 
it clear the data was available and usable by stakeholders for the 
purpose of notice

[[Page 38618]]

and comment. Moreover, the summary tables for commercial aircraft fee 
calculation (tables 11 and 12 below) show that APHIS used actual cost 
data for FY 2017 through FY 2019 for commercial aircraft, future costs 
for planned capital expenditures and additional staffing, divided by 
number of commercial aircraft arrivals per fiscal year to arrive at a 
unit cost. APHIS adjusted those unit costs to June 2022 dollars, 
averaged the unit costs across the 3 fiscal years, and finally adjusted 
that average unit cost for projected inflation. The summary tables are 
intended to be a quick reference regarding fee development. For more 
comprehensive cost data information please see the full rollup reports 
from the APHIS AQI activity-based cost model 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.
    For October 1, 2024, October 1, 2025, October 1, 2026, fee rates, 
APHIS subtracted the January 1, 2024 rate from the October 1, 2027 
rate, and divided by 4. This amount became the per phase increase. The 
per phase increase was then added to the previous phase amount until 
reaching the October 1, 2027 rate.
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[[Page 38619]]

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[[Page 38620]]


[GRAPHIC] [TIFF OMITTED] TR07MY24.091

BILLING CODE 3410-34-C
    A commenter stated that APHIS excluded data showing potential AQI 
program surpluses from 2016 to the present, if AQI fees had been 
adjusted for inflation in the 2015 rulemaking.
---------------------------------------------------------------------------

    \11\ As described in: https://www.regulations.gov/document/APHIS-2022-0023-0010.
---------------------------------------------------------------------------

    The 2015 rulemaking did not adjust the fees for inflation, and 
positing a counterfactual scenario in which it did is materially 
irrelevant to assessing the proposed fees. The fees in this proposed 
rule were based on actual costs for 3 fiscal years, plus capital 
planning and future staffing costs, all adjusted for inflation. The 
fees were developed using Activity Based Costing to support full cost 
recovery.
    A commenter stated that the fee exemption for aircraft with 64 or 
fewer seats should remain because the commenter claimed that our study 
was predicated on a misunderstanding of the reason for the exemption. 
The commenter stated that, in the 1992 rule that had established the 
exemption, APHIS had cited two bases for the exemption to the fee. The 
first was that such aircraft required little to no phytosanitary 
inspection. The second was that such an exemption was predicated on the 
per-passenger cost differential that made it ``difficult for small 
commuter airlines to compete with larger airlines for business.'' The 
commenter further contended that our study had assumed that exempted 
aircraft had an increased exposure risk to plant pests since the 1992 
exemption was established, without identifying the actual increased 
phytosanitary risk now associated with such aircraft, which the 
commenter stated could only be substantiated through pest detections on 
exempted aircraft. Finally, the commenter stated that if AQI services 
are not being provided for such exempted aircraft, removing the 
exemption would charge a user fee in the absence of services provided, 
and thus violate the FACT Act.

[[Page 38621]]

    In 1991, when this fee exemption was first established it exempted 
aircraft with 30 or fewer seats which are not carrying cargo and are 
not equipped to offer inflight food service. We explained that we 
exempted those aircraft because we did not provide AQI services to the 
aircraft (56 FR 37483, August 7, 1991). In 1992, when we proposed to 
expand the fee exemption to aircraft with 64 or fewer seats, we 
explained that this was intended to exempt commuter aircraft that 
require little or no inspection from the per aircraft inspection fee 
(57 FR 56862, December 1, 1992). In other words, the initial exemption 
for aircraft with 30 or fewer seats was based on our determination that 
no AQI services were being provided for such aircraft, and the 
expansion to 64 or fewer seats was based on an assumption that such 
aircraft were commuter in nature and would not require such an 
inspection.
    It is worth noting that the 1992 proposed rule did not also 
predicate the exemption on the per-passenger cost differential between 
small commuter airlines and larger airlines. The language cited by the 
commenter was articulated in the section of the preamble that evaluated 
the economic impacts of the rule pursuant to Executive Order 12291 
(since rescinded) and the Regulatory Flexibility Act. We were 
characterizing the effects of the rulemaking on small entities, not 
articulating a basis for the rulemaking.
    Now, 30 years after that rulemaking, CBP does in fact conduct 
inspections on aircraft with 64 or fewer seats. These inspections incur 
costs on the part of the AQI program. The FACT Act specifically 
authorizes us to prescribe and collect fees sufficient to cover the 
cost of providing AQI services in connection with the arrival of 
commercial aircraft at a port in the customs territory of the United 
States (21 U.S.C. 136a(a)(1)(A)).
    To address whether such inspections are warranted, we re-evaluated 
the sanitary and phytosanitary risks posed by aircraft with 64 or fewer 
seats and the results of this pathway analysis indicated that aircraft 
with 64 or fewer seats do pose phytosanitary risk to the United States. 
Specifically, we found that the variety of aircraft origins worldwide 
(countries/airports) and destinations in the United States (States/
airports) for aircraft with 64 or fewer seats was similar to or 
slightly higher than those of aircraft with 65 or more seats. For 
comparison and context, between FY 2016 and FY 2018, aircraft with 65 
seats or more averaged 2,272 routes. With an average of 1,224 flight 
routes from calendar years 2016 to 2018, aircraft with 64 or fewer 
seats had many risks of exposure to hitchhiking pests, as well as many 
risks to expose pests to a large variety of environments in the United 
States. Exposure risk was used in order to characterize sanitary and 
phytosanitary risk because pest detections on commercial aircraft are 
not categorized based on whether the aircraft has 65 or more or 64 or 
fewer seats. In sum, while inspection may not have been necessary based 
on phytosanitary conditions in 1993, when we originally established the 
exemption, that is no longer the case today.
    A commenter stated that our basis for removing the exemption was to 
create an additional funding stream for the AQI program.
    Our basis for removing the exemption, as articulated in the 
proposed rule and its supporting documentation, and reiterated above, 
is to fulfill our agricultural safeguarding mandate and achieve full 
cost recovery. Our articulated assumptions for the exemption in 1991 
and 1992, respectively, are no longer indicative of air travel 
conducted by planes with 64 or fewer seats, and the current operational 
dynamics of such travel carry a sanitary and phytosanitary risk that 
merits AQI services.
    In light of the fact that small commercial aircraft have not 
previously been subject to the fee, APHIS believes that additional time 
is warranted to allow operators to come into compliance. Accordingly, 
APHIS is delaying the effective date for removal of the exemption for 
aircraft with 64 or fewer seats until April 1, 2025.
    Two commenters stated that APHIS should not change from quarterly 
to monthly fee remittances, because it would increase the paperwork 
burden on airlines. Another commenter stated that monthly remittance 
would increase the burden on express carriers and would be out of step 
with other user fees they remit, which are almost all done quarterly.
    We do not consider, and the commenters did not provide any 
evidence, that the revised remittance procedures to be more burdensome 
than the current procedures. Under the proposed rule, payments would be 
remitted on a monthly basis after a 90-day grace period--for example, 
January fees would be remitted to APHIS at the end of April, February 
fees at the end of May. Nonetheless, monthly remittance itself is 
necessary. Without the authority to prescribe and collect fees to 
maintain a reasonable balance in the AQI account, APHIS needs to move 
to a monthly remittance schedule to ensure smoother and more stable 
cash flow. In terms of paperwork burden, we expect a negligible 
difference between quarterly and monthly reporting, because the 
proposed rule does not change the information required for an 
individual month. For example, remittance reporting for the month of 
October is identical regardless of reporting only for October or 
whether issuing a quarterly report for October, November, and December 
of any given year.
    In addition, we note that the revised procedures should make 
aspects of reconciliation and remittance easier, rather than harder. 
For example, the new monthly remittance schedule provides for a 90-day 
reconciliation period for each month, whereas the current quarterly 
remittance schedule provides a 90-day reconciliation period for the 
first month of the quarter, a 60-day reconciliation period for the 
second month of the quarter, and only a 30-day reconciliation period 
for the third month of the quarter.
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[[Page 38622]]

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[GRAPHIC] [TIFF OMITTED] TR07MY24.093

BILLING CODE 3410-34-C
    Another commenter noted that our proposed rule required the use of 
remittance worksheets as part of remittance procedures. The commenter 
expressed opposition to the use of the remittance worksheet as 
burdensome.
    Our intent in proposing to require the use of the worksheet was 
primarily as a service to regulated entities in order to facilitate 
remittance; as noted in the proposed rule, entities currently submit 
remittance in a variety of formats, and some entities submit more 
information than is necessary. We believed that use of the worksheet 
would facilitate remittance processes for regulated entities by making 
them more standardized and streamlined.
    Given the comments received that stated that the worksheet could be 
more burdensome than the status quo, however, we are stating in this 
final rule that the remittance worksheet is not mandatory. Entities may 
elect to use it depending on whether or not they find it less 
burdensome than current remittance practices. However, APHIS again 
notes that while the worksheet is not mandatory, there is mandatory 
information that must be provided in remittance statements, and also 
notes that many entities provide information in their remittance 
statements that goes beyond APHIS' requirements. For those entities 
that choose to use existing

[[Page 38623]]

remittance statements rather than the worksheet, the remittance 
worksheet serves as a guide for the remittance statement, even if an 
entity chooses not to use the worksheet itself.
    The same commenter stated that APHIS had not made the remittance 
worksheet available for review as part of the supporting documents for 
the proposed rule. Without viewing the worksheet, the commenter stated 
that they could not ascertain whether it would be less burdensome or 
more burdensome than the status quo. The commenter also stated that we 
had an obligation to make the worksheet available during the comment 
period in order for commenters to provide informed comments on the 
accuracy of the estimate of burden articulated in the Paperwork 
Reduction Act section of the proposed rule.
    While it is true that APHIS omitted the worksheet from the specific 
suite of supporting documents associated with the proposed rule, the 
remittance worksheet has been available on the APHIS website at https://www.aphis.usda.gov/mrpbs/userfees/remittance-form.pdf since well 
before the proposed rule was published and has been used by some 
entities for more than 15 years.
    Nonetheless, as previously stated, in this final rule, use of the 
remittance worksheet is not mandatory.
    Finally, as noted above, in reviewing the data on which the 
proposed fee increases were based, we noticed that the total costs 
associated with commercial aircraft were accurate, but the denominator 
(number of commercial aircraft arrivals) was not accurate, and did not 
include precleared aircraft. APHIS has corrected this error, resulting 
in lower commercial aircraft fees than proposed. In this final rule, 
the commercial aircraft fees are as follows: $281.39 for FY 2025, 
$300.78 for FY 2026, $320.61 for FY 2027, and $340.90 for FY 2028. As 
noted above, we also are not requiring the use of a worksheet for the 
remittance of the fees.

International Passengers Arriving at Airports and Seaports

    AQI user fees for inspection of commercial air passengers are 
listed in Sec.  354.3(f)(1). The current fee is $3.83 per arrival. We 
proposed to adjust the AQI user fee per arrival for commercial air 
passengers. The commercial air passenger fee will increase relative to 
the current fee.
    Similarly, the AQI user fee for inspection of commercial cruise 
vessel passenger fee is also listed in Sec.  354.3(f)(1). The current 
fee is $1.68 per arrival. We proposed to adjust the AQI user fee for 
inspection of commercial cruise passengers. The commercial cruise 
vessel passenger fee will decrease relative to the current fee. The 
change in the cruise passenger fee owes mainly to the change in 
allocation criteria from number of inspection events (passengers) to 
FTE hours.
    We also proposed several clarifications in paragraph (f) of Sec.  
354.3 related to applicability, payment, and handling of international 
passenger user fees collected and remitted for trips not taken. In 
proposed paragraph (f)(1), we 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 CBP's 
definition of passenger in 19 CFR 24.22(g)(1)(v). As noted above, we 
also proposed to add a definition of passenger to help clarify these 
requirements.
    In proposed changes to paragraphs (f)(5) and (6), we 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 with respect to the commercial aircraft fee. Also as 
discussed above in relation to paragraph (e) of Sec.  354.3, 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, 
as opposed to the current 31-day period after the close of the quarter. 
For example, under this final rule, 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 proposed 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) stated 
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 AQI user 
fees in the original form of payment to the purchaser for trips not 
taken.
    Proposed paragraph (f)(5)(vi) described 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 or written statement. In keeping with other proposed changes 
to remittance timeframes, the revised remittance worksheet or written 
statement 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.
    We received three comments about the proposed changes to the 
remittance procedures. The commenters generally opposed the proposed 
changes.
    One commenter agreed with the intent of proposed paragraph 
(f)(5)(vi), which would allow airlines to request a credit from APHIS. 
The commenter stated that in such instances, AQI services are not 
actually provided, so a mechanism of recovering the remitted user fee 
for those services is warranted. The commenter also noted that the 
paragraph could be construed to mean that airlines must remit all fees 
collected to APHIS, and then only subsequently revise the remittance by 
requesting credit for flights not taken. The commenter stated that in 
instances when the flight is not taken and a refund occurs before an 
initial remittance of the fee is due to the Agency, airlines should be 
authorized to reconcile this in the initial remittance, rather than a 
subsequent revision.
    The commenter strongly objected to proposed paragraph (f)(5)(v), 
however. In addition to citing numerous logistical obstacles with its 
implementation, the commenter stated that, in proposing to prescribe 
the method by which airlines must refund fees to passengers, APHIS had 
exceeded its statutory authority under the FACT Act.
    After reviewing this comment, we acknowledge that the commenter 
raised points that merit further consideration. APHIS has therefore 
elected not to finalize paragraph (f)(5)(v).
    We will retain the substance of paragraph (f)(5)(vi), though we 
have renumbered to paragraph (f)(5)(v). We have modified the proposed 
provisions of that paragraph in order to reflect the fact that the use 
of a remittance worksheet will be optional. Additionally, we clarify 
that the provision applies only in instances when an airline requests 
credit after it

[[Page 38624]]

remitted the fee to APHIS. If an airline has reconciled a trip not 
taken with the customer prior to remittance to APHIS, no subsequent 
action is needed.
    Finally, based on a review of data, the fee for commercial air 
passengers will be lower than originally proposed. The total costs 
associated with commercial air passengers was accurate; however, the 
denominator, that is, the number of air passengers, did not include 
precleared air passengers at certain ports of departure. APHIS 
corrected this error, resulting in a lower air passenger fee than 
proposed. In this final rule, the fees are as follows: $3.71 in FY 
2025, $3.84 in FY 2026, $3.98 in FY 2027, and $4.12 in FY 2028.
    The summary tables for AQI International Air Passenger Fee 
Calculation (tables 15 and 16 below) show that APHIS used actual cost 
data for FY 2017 through FY 2019 international air passengers, future 
costs for planned capital expenditures and additional staffing, divided 
by number of international air passengers per fiscal year to arrive at 
a unit cost. APHIS adjusted those unit costs to June 2022 dollars, 
averaged the unit costs across the 3 fiscal years, and finally adjusted 
that average unit cost for projected inflation. The summary tables are 
intended to be a quick reference regarding fee development. For more 
comprehensive cost data information please see the full rollup reports 
from the APHIS AQI activity-based cost model 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.
    For October 1, 2024, October 1, 2025, October 1, 2026, fee rates, 
APHIS subtracted the January 1, 2024 rate from the October 1, 2027 
rate, and divided by 4. This amount became the per phase increase. The 
per phase increase was then added to the previous phase amount until 
reaching the October 1, 2027 rate.
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[[Page 38625]]

[GRAPHIC] [TIFF OMITTED] TR07MY24.094


[[Page 38626]]


[GRAPHIC] [TIFF OMITTED] TR07MY24.095


[[Page 38627]]


    We received no comments on the AQI cruise vessel passenger fee and 
are finalizing it as proposed.
    The summary tables for AQI Cruise Vessel Passenger Fee Calculation 
(tables 17 and 18 below) show that APHIS used actual cost data for FY 
2017 through FY 2019 by user class, future costs for planned capital 
expenditures and additional staffing, divided by number of users per 
fiscal year to arrive at a unit cost. APHIS adjusted those unit costs 
to June 2022 dollars, averaged the unit costs across the 3 fiscal 
years, and finally adjusted that average unit cost for projected 
inflation. The summary tables are intended to be a quick reference 
regarding fee development. For more comprehensive cost data information 
please see the full rollup reports from the APHIS AQI activity-based 
cost model 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.
    For October 1, 2024, October 1, 2025, October 1, 2026, fee rates, 
APHIS subtracted the January 1, 2024 rate from the October 1, 2027 
rate, and divided by 4. This amount became the per phase increase. The 
per phase increase was then added to the previous phase amount until 
reaching the October 1, 2027 rate.

[[Page 38628]]

[GRAPHIC] [TIFF OMITTED] TR07MY24.096


[[Page 38629]]


[GRAPHIC] [TIFF OMITTED] TR07MY24.097

BILLING CODE 3410-34-PC

AQI Treatment Monitoring

    AQI treatments are performed on some agricultural goods as a 
condition of entry, and additional treatments 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. Currently, these treatments are 
charged on a per-treatment basis; that is, if two or more consignments 
are treated together, only a single fee will be charged, and if a 
single consignment is split or must be retreated, a fee will be charged 
for each separate treatment conducted. The current fees are set out in 
Sec.  354.3(h). APHIS reevaluated assessing AQI treatment monitoring 
fees on a per-enclosure basis, and we proposed an hourly rate instead.
    We received seven comments about the proposed changes to the 
treatment monitoring fee. The commenters generally opposed the proposed 
changes.
    Commenters were generally opposed to this proposed change. They 
raised a number of concerns about moving to an hourly charge, including 
the magnitude of the fee increases for certain treatment types, 
uncertainty over how the hourly rate would be applied given nonuniform 
standards of service and if new efficiencies (e.g., remote monitoring) 
could be used. The commenters also stated that the proposed hourly 
billing process would present challenges in terms of providing 
customers with timely invoices. The commenters further stated that for 
certain low-value commodities, the hourly rate would exceed the value 
of the import.
    After reviewing the comments, we agree with the commenters that 
these issues merit further consideration before making changes to the 
AQI treatment monitoring fees. We have therefore decided not to proceed 
with amending Sec.  354.3(h) at this time. We will address the 
restructuring of the AQI treatment monitoring fees in a future 
rulemaking. APHIS will keep the per-enclosure fee in place.

[[Page 38630]]

    However, we received no comments, and are aware of no evidence, 
that treatment monitoring services are not subject to inflationary 
forces. Therefore, we are incorporating annual adjustments for 
projected inflation \12\ as follows, using the current fee of $237 per 
enclosure as the basis:
---------------------------------------------------------------------------

    \12\ As described in: https://www.regulations.gov/document/APHIS-2022-0023-0010.
[GRAPHIC] [TIFF OMITTED] TR07MY24.098

Records Retention

    To improve monitoring, compliance, and enforcement of this 
regulation, we proposed to add a new paragraph (j), which would contain 
records retention requirements related to AQI user fees. Proposed 
paragraph (j)(1) provided 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 or 
written statements. 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 remittance 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 U.S. Government Accountability Office 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.
    Commenters stated that the proposed 5-year record retention period 
does not align with current airline industry practice and other Federal 
agency policies (e.g., FAA requires certain records be retained for 3 
years).
    This change is being made to harmonize APHIS regulations with CBP's 
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) fee 
regulations in 19 CFR 24.22(g)(7), which require a 5-year retention 
period. As we explained in the proposed rule, CBP audits the AQI 
aircraft and international air passenger fee collections on APHIS' 
behalf. CBP requires the 5-year-retention period because the statute of 
limitations for litigation purposes is 6 years. The 5-year-retention 
period gives us the time needed to state what is owed in the event of 
non-payment as well as time to bring legal action if necessary to 
collect. APHIS will implement these changes in this final rule.

Severability

    We proposed to add a new Sec.  354.3(k), ``Severability,'' to 
address the possibility that this final rule, or portions of this final 
rule, may be challenged in litigation. It is APHIS' intent that the 
individual sections of this final 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. We received no comments on 
this proposed addition and will implement it in this final rule.
    Therefore, for the reasons given in the proposed rule and in this 
document, we are adopting the proposed rule as a final rule, with the 
changes discussed in this document.

Executive Orders 12866, 13563, 14094 and Regulatory Flexibility Act

    This final rule has been determined to be significant under section 
3(f)(1) of Executive Order 12866, 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 rulemaking. The 
economic analysis provides a cost-benefit analysis, as required by 
Executive Orders 12866 and 13563, 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 a final regulatory flexibility analysis 
that examines the potential economic effects of this final rule on 
small entities, as required by the Regulatory Flexibility Act. The 
economic analysis is summarized below. Copies of the full analysis are 
available on the Regulations.gov website (see footnote 1 in this 
document for a link to Regulations.gov) or by contacting the person 
listed under FOR FURTHER INFORMATION CONTACT.
    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 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 commercial 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

[[Page 38631]]

insufficient collections to achieve full cost recovery.
    APHIS is making a number of revisions to the regulations that 
govern the 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 revisions make adjustments to the cost model that is 
used to calculate the fees. Those revisions incorporate inflation into 
the user fees, including the fee for treatment monitoring.
    This final rule will 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.
    APHIS has decided not to restructure the treatment fee in this 
final rule. Rather, we are retaining the per-enclosure treatment fee, 
while incorporating annual inflation adjustments for this fee. 
Additionally, based on comments received, APHIS has created a reduced 
user fee rate for commercial vessels operating solely between the 
United States and Canada and within either the Great Lakes or a region 
along the coastline between Alaska and Oregon, provided that the 
vessels meet certain requirements.
    This final rule will also update remittance procedures to 
facilitate timely submission of fees. Finally, we have made editorial 
revisions in order to clarify intent in the regulations.
    The Agricultural Quarantine and Inspection (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. APHIS uses an Activity-
Based Cost (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 final rule will 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 
from sanitary and phytosanitary risks. 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 by this final rule 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 enable 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 
when 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.\13\ 
The benefits and costs, as well as the annualized transfer payments are 
summarized in table A.
---------------------------------------------------------------------------

    \13\ 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.
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BILLING CODE 3410-34-P

[[Page 38632]]

[GRAPHIC] [TIFF OMITTED] TR07MY24.099

    The fee schedule will better reflect the costs of AQI services 
provided to commercial vessels, commercial trucks, commercial railroad 
cars, commercial aircraft, and international air and sea passengers 
arriving at U.S. ports (table B).

[[Page 38633]]

[GRAPHIC] [TIFF OMITTED] TR07MY24.100

BILLING CODE 3410-34-C

Air Passengers

    The air passenger fee will increase from $3.83 to $4.12 in FY 2028. 
The total fee increase of $0.29 will be approximately a 7.6 percent 
increase from current fees, but only a 0.05 percent increase in the 
average price of an international round-trip airfare.\14\ These changes 
in the effective cost for international air travel are extremely small, 
and seem unlikely to significantly change consumer purchasing behavior. 
Limitations in the amount and nature of data available on such small 
fee changes make it difficult for the agency to draw specific 
conclusions as to how these small changes in airfare 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.
---------------------------------------------------------------------------

    \14\ Damodaran, A., Consumer Airfare Index Report--May 2021. As 
travel demand returns and more Americans are vaccinated, what does 
it mean for airfare prices? May 18, 2021.
---------------------------------------------------------------------------

Commercial Aircraft

    The commercial aircraft fee will increase from $225 to $340.90 per 
arrival in FY 2028. This increase of $115.90 will be about a 51.5 
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 51.5 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 alone, the 2028 
commercial aircraft fee rate under this rulemaking represents 
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 $115.90 by 2028, the commercial aircraft user fee is 
equivalent to approximately five minutes of operating costs for 
aircraft.\15\ Like all AQI user fees, this fee is based solely on the 
actual cost of AQI services provided for this mode of conveyance 
between FY 2017 and FY 2019, plus forecasted staffing and capital 
costs, adjusted for inflation. The fee for this conveyance is not 
derived from the financial performance of the industry. Limitations in 
the internal industry performance data available to the agency make it 
difficult to develop specific conclusions as to how such a fee change 
will affect the commercial aircraft industry overall. This information, 
however, is used to contextualize the scale of the collections and 
illustrate the relative size and impact that the fee might have on the 
conveyance as a whole. However, the increase in the AQI commercial 
aircraft fee is likely to have a limited impact on aircraft operators.
---------------------------------------------------------------------------

    \15\ 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 final rule will result in the removal of this exemption.
    In light of the fact that small commercial aircraft have not 
previously been subject to the fee, APHIS believes that additional time 
is warranted to allow operators to come into compliance. Accordingly, 
APHIS is delaying the effective date for removal of the exemption for 
aircraft with 64 or fewer seats until April 1, 2025.
    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

[[Page 38634]]

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 only affects international arrivals of 
aircraft with fewer than 65 seats. The commercial aircraft fee is not 
derived from the financial performance of the industry. Like all AQI 
user fees, this fee is based solely on the cost of providing AQI 
services for this mode of conveyance between FY 2017 and FY 2019, plus 
forecasted staffing and capital costs, adjusted for inflation. 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. 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. This provides 
context for the scale of the collections and illustrates the impact 
that the fee might have on the affected entities.

Commercial Vessels

    The commercial vessel fee will increase from $825 to $3,139.06 by 
FY 2028. Some vessels operating in the Great Lakes or Cascadia areas 
will be eligible to pay a reduced commercial vessel fee. A variety of 
factors contributed to the commercial vessel fee increase. Among these 
were an increase in the cost of AQI services across the pathway, an 
expansion of the average ship cargo capacity, and an increase in the 
level of effort required to inspect the average vessel. Even with the 
commercial vessel fee increasing by up to 280 percent to $3,139.06 by 
FY 2028, the 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.\16\ The fee for this conveyance is not derived from the financial 
performance of the industry. Like all AQI user fees, this fee is based 
solely on the costs for providing AQI services for this mode of 
conveyance between FY 2017 and FY 2019, plus forecasted staffing and 
capital costs, adjusted for inflation. The change to the commercial 
vessel fee seems likely to have a limited impact on the operations of 
commercial vessels.
---------------------------------------------------------------------------

    \16\ Global 20 port average VSLFO, first half of 2022. Retrieved 
08/11/22 from https://shipandbunker.com; Stratiotis, E. Fuel Costs 
in Ocean Shipping. January 22, 2018. (https://www.morethanshipping.com/fuel-costs-ocean-shipping); $3139.06/$900 
(per ton of fuel) = 3.5 tons of fuel. Average fuel consumption is 
200 tons/day. 3.5 tons/200 tons = 1.75%
---------------------------------------------------------------------------

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 will be affected. APHIS has concluded 
that barges from Canada that are currently exempted do pose a 
phytosanitary risk and require inspection and payment of the associated 
fee. Barges operating in the Great Lakes and Cascadia areas also 
require inspection and a payment of a fee. However, those meeting 
certain additional conditions will be eligible to pay a reduced fee, 
provided their cargo meets the requirements. The reduced fee represents 
approximately $.00025 per kilogram imported by barge. These fees are 
not derived from the financial performance of the industry. This 
information provides context for the scale of the collections and 
illustrates the impact that the fee might have on the affected 
entities. 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 entities.

Commercial Trucks

    The commercial truck fee will increase from $7.29 to $15.55 \17\ by 
2028, an increase of $8.26 per truck arrival. In addition, commercial 
truck operators have the option to prepay for an unlimited number of 
arrivals (per year) by purchasing a transponder, the price of which 
will increase from the equivalent of 40 arrivals to 50 arrivals in the 
period between October 1, 2024 and October 1, 2025, and thereafter to 
60 arrivals.\18\ Between 2013 and 2019 imports into the United States 
by truck increased by 397 million kilograms. Even after a 114 percent 
increase, the user fee of $15.55 in 2028 for a commercial truck 
entering the U.S. will be the equivalent of 0.034 percent of the 
average value of goods imported by truck. The user fee in 2028 in 
dollars-per-kilogram for truck cargo is approximately $0.0014. In 
addition, this user fee is roughly the equivalent of the operating 
expenditures of a truck transporting goods about nine miles. The fee 
for this conveyance is not derived from the financial performance of 
the industry. Limitations in the internal industry performance data 
available to the agency make it difficult to develop specific 
conclusions as to how such a fee change will affect the commercial 
truck industry overall. This information, however, is used to 
contextualize the scale of the collections and illustrate the relative 
size and impact that the fee might have on the conveyance as a whole. 
The impact of this fee change on the operations of commercial trucks 
seems likely to be limited. Because of the efficiencies gained by both 
the program and users of the AQI services, APHIS will also continue to 
provide an incentive to purchase the transponder in the form of a cap.
---------------------------------------------------------------------------

    \17\ $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.
    \18\ In addition, commercial truck operators have the option to 
prepay for an unlimited number of arrivals (per year) by purchasing 
a transponder, the price of which will increase from the equivalent 
of 40 arrivals to 50 arrivals in the period between October 1, 2024 
and October 1, 2025, and thereafter to 60 arrivals.
---------------------------------------------------------------------------

Commercial Railroad Cars

    The commercial railroad car fee will 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 railroad car fee is approximately 0.029 percent of the value 
of goods being imported on by railroad car. The user fee in 2028 in 
dollars-per-kilogram for commercial railroad cars generally is 
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 fee changes will affect international 
commercial railroad car arrivals overall. Like all AQI user fees, this 
fee is based solely on the cost of providing AQI services for this mode 
of conveyance between FY 2017 and FY 2019, plus forecasted staffing and 
capital costs, adjusted for inflation.

[[Page 38635]]

Industry information is used to contextualize the scale of the 
collections and illustrate the relative size and impact that the fee 
might have on the conveyance as a whole. The change to this user fee 
seems likely to have a limited impact on commercial railroad car 
operations.

International Cruise Vessel Passengers

    The international cruise vessel passenger fee will 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. APHIS proposed to shift the treatment 
monitoring fee to an hourly basis rather than a per-enclosure basis, 
and to make adjustments to the remittance practices for the treatment 
monitoring fee. Based on the comments received, we have decided not to 
make that structural revision to our AQI treatment monitoring fee or 
the remittance practices in this final rule. APHIS will keep the per-
enclosure fee in place with annual adjustments for projected inflation, 
and the remittance practices will remain unchanged at this time.
    APHIS estimates the total annualized cost of the paperwork and 
recordkeeping associated with this final rule to be $70,061. Reporting 
and recordkeeping requirements associated with this final rule are 
discussed under the heading ``Paperwork Reduction Act.''
    The Small Business Administration has set small-entity standards 
for the transportation sectors. Small entities make up between 92 
percent and 99 percent of each of the regulated industries, though the 
size data do not distinguish between transportation firms that operate 
internationally and those firms that only operate within the United 
States. The impacts of this final rule are likely to be limited for all 
entities within the affected industries, including small entities. 
While most businesses that will be affected by this final rule are 
likely to be small, for the reasons discussed further in the Final 
Regulatory Flexibility Analysis, we believe that the changes set forth 
in this final rule satisfactorily accomplish the regulatory objectives 
while minimizing impact on small entities. The provisions of this final 
rule are consistent with ensuring a level of AQI services commensurate 
with that required to safeguard American agriculture and natural 
resources from sanitary and phytosanitary risks.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule: (1) Preempts all State and local laws 
and regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule.

Executive Order 13175

    This final 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.
    The Puyallup Tribe has requested Tribal consultation regarding this 
final rule. APHIS will coordinate with the Office of Tribal Relations 
to ensure that meaningful consultation occurs.

Congressional Review Act

    Pursuant to subtitle E of the Small Business Regulatory Enforcement 
Fairness Act of 1996, also known as the Congressional Review Act (5 
U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs 
determined that this rule meets the criteria set forth in 5 U.S.C. 
804(2).

Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), some of the reporting and 
recordkeeping requirements in the proposed rule and this final rule 
have been submitted for approval to the Office of Management and Budget 
(OMB) control number 0579-0055, APHIS Credit and User Fee Accounts. The 
remaining reporting and recordkeeping requirements that were solely 
associated with this final rule were submitted to OMB as a new 
information collection and assigned OMB comment-filed number 0579-0489. 
After approval, this information collection will be merged into 0579-
0055 in the future.
    New information collection requirements created by the regulations 
of this final rule include information collection, reporting, and 
recordkeeping requirements in the form of paper, electronic 
submissions, and information systems. In conjunction with the changes 
to provide for cost recovery for services, we have considered each 
change and their impact(s) on these burdens. These changes concern 
adjusting fee amounts, adjusting caps on certain prepaid fees, removing 
exemptions, and providing electronic payments and statement options. 
Estimates include additional respondents, responses, and burden 
estimates across all activities affected by this rule.
    As described above, APHIS received several public comments on the 
proposed rule, and the following changes were made to the final rule:
     We have lowered the fees for commercial vessels, 
commercial aircraft, and international air passengers based on our 
determination that, while aggregate cost was correct (the numerator for 
the fee rate), there were more instances in which AQI services were 
provided in these modes (the denominator for the fee rate) than we had 
initially calculated.
     We have established a commercial vessel fee specific to 
commercial vessels operating within the Great Lakes or in the region 
along the coastline from Alaska to Oregon, provided that certain 
conditions are met.
     We have decided not to revise our regulations governing 
the treatment monitoring fee at this time.
     We have decided not to specify the method by which 
airlines and cruise ships must refund passenger user fees assessed for 
trips not taken.
    With these changes, there are corresponding updates in the related 
recordkeeping burdens (Applications for Credit Account and Request for 
Services, User Fees for International Air Passengers--Remittance and 
Statements, and Fees for Conducting and Monitoring Treatments) between 
the proposed and final rules. There was no impact on burden assumptions 
between the proposed and final rules due to the first two bulleted 
items above. The estimated burden on commercial vessels, commercial 
aircraft, and international aircraft customers has not changed. In 
addition, the volumes of payers of the new commercial vessel fee

[[Page 38636]]

specific to commercial vessels operating within the Great Lakes or in 
the region along the coastline from Alaska to Oregon is a subset of the 
original burdens vessel user fee-related burdens included in the 
proposed rule, so there is no change in the estimated burden between 
the proposed and final rules. Because the revisions to the treatment 
user fees in the proposed rule would have created new burdens, the 
decision not to revise the regulations governing the treatment 
monitoring user fees has lowered the assumed burdens between the 
proposed and this the final rule in four ways:
     The proposed rule assumed there would be 2,844 new 
treatments (1,190 heat treatments and 1,654 irradiation treatments) 
with an estimated 5 minutes per treatment burden yielding 237 
respondent burden hours per year. With the removal of the treatment fee 
changes from the final rule, we reduced the burden estimate between the 
proposed and final rules accordingly.
     The proposed rule included a new billing process for 
treatment monitoring, and in the proposed rule, we assumed half of the 
approximate 50 treatment facilities would want to be billed. 25 
facilities x 8.4 minutes per facility (the estimated time for a 
facility to complete an application for an account based on timed 
trials) = 3.5 respondent burden hours for treatment facilities to 
manage being billed. With the removal of the treatment fee changes from 
the final rule, we reduced the burden estimate between the proposed and 
final rules accordingly.
     The proposed rule included consequences for late payment 
of AQI treatment monitoring user fees and estimated there would be six 
treatment facilities incurring an increased time burden of 20 minutes 
per facility for an estimated increase in respondent burden of 2 hours. 
We removed these 2 hours from our estimated burden with the removal of 
the treatment fee changes from the final rule.
     The proposed rule included a reduction in the need for 
facilities to create new business procedures to hold fees in trust 
estimating it would save 50 treatment facilities 4.75 hours per year 
for a total of 237 reduction in respondent burden hours each year for 
individuals and 237 reduction in respondent burden hours each year for 
businesses. With the removal of the treatment fee changes from the 
final rule, the treatment facilities remain holding fee collections in 
trust. For this change between the proposed rule and final rule, we 
added 237 respondent burden hours into the total number of respondent 
burden hours between the proposed and final rules.
    In addition, the decision not to specify the method by which 
airlines and cruise ships must refund passenger user fees assessed for 
trips not taken has also lowered the assumed burdens between the 
proposed rule and the final rule. The proposed rule assumed one third 
of the estimated 331 airlines would be required to submit revised 
remittance sheets each month. \1/3\ of 331 airlines = 110 airlines. We 
estimated those 110 airlines would be required to submit 12 additional 
remittances per year taking 3 minutes each at 66 hours of additional 
burden per year. With the decision not to specify the passenger user 
fee refund methods, we have reduced the overall respondent burden 
estimate between the proposed and final rule by this amount.
    With the changes to the final rule, the estimated number of 
respondents has decreased by 392, the estimated number of responses has 
decreased by 9,881, and the estimated burden has decreased by 781 
hours.

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. For information pertinent to E-Government Act 
compliance related to this final rule, please contact Mr. Joseph Moxey, 
APHIS' Paperwork Reduction Act Coordinator, at (301) 851-2533.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104.4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, tribal 
governments, and the private sector. Under section 101 of the UMRA, 
APHIS generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires APHIS to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, more cost-effective, or least burdensome alternative that 
achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) that may result in expenditures by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any one year. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

Executive Order 13132

    APHIS has reviewed this rule in accordance with Executive Order 
13132 regarding Federalism and has determined that it does not have 
``federalism implications.'' The rule does 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.''

List of Subjects in 7 CFR Part 354

    Exports, Government employees, Plant diseases and pests, 
Quarantine, Reporting and recordkeeping requirements, Travel and 
transportation expenses.

    As discussed in the preamble, APHIS is amending 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 or 
as defined by 19 CFR 101.1, in the customs territory of the United 
States or at any place serviced by any such port of entry.
    Calendar year. The period from January 1 to December 31, inclusive, 
of any particular year.
    Cascadia. British Columbia and those ports of entry into the United 
States lying south of 59[deg]26'59.316'' N, north of 43[deg]23'34.152'' 
N, west of 122[deg]20'31.2'' W, and east of 135[deg]20'2.4'' W.''

[[Page 38637]]

    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.).
    Great Lakes. The Great Lakes of North America and the waters of the 
St. Lawrence River west of a rhumb line drawn from Cap de Rosiers to 
West Point, Anticosti Island, and west of a line along 63[deg] W. 
longitude from Anticosti Island to the north shore of the St. Lawrence 
River.
    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.
    (b) Fee for inspection of commercial vessels of 100 net tons or 
more. (1) Except as provided in paragraphs (b)(2) and (3) 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.

Table 1 to Paragraph (b)(1)--Fee for Inspection of Commercial Vessels of
                          100 Net Tons or More
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
October 1, 2024............................................    $2,903.73
October 1, 2025............................................     2,981.17
October 1, 2026............................................     3,059.61
October 1, 2027............................................     3,139.06
------------------------------------------------------------------------

    (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.
    (3) If not otherwise exempt from paying the fee, a vessel traveling 
solely between the United States and Canada and within the Great Lakes 
or Cascadia may pay the AQI user fee for each arrival as the fee is 
shown in table 2, provided that the vessel:
    (i) Is not carrying cargo originating from countries other than the 
United States or Canada.
    (ii) Is not carrying plants or plant products.
    (iii) Is not carrying animals or animal products.
    (iv) Is not carrying soil or quarry products from areas in Canada 
listed in Sec.  319.77-3 of this chapter as being infested with gypsy 
moth.
    (v) Is not carrying wood packaging material as defined under Sec.  
319.40-1 of this chapter.

  Table 2 to Paragraph (b)(3)--Fee for Inspection of Commercial Vessels
  Traveling Solely Between the United States and Canada and Within the
            Great Lakes or Cascadia, and Not Otherwise Exempt
------------------------------------------------------------------------
                    Effective date                           Amount
------------------------------------------------------------------------
October 1, 2024......................................            $837.51
October 1, 2025......................................             850.03
October 1, 2026......................................             862.54
October 1, 2027......................................             875.06
------------------------------------------------------------------------

    (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 3).

[[Page 38638]]



  Table 3 to Paragraph (c)(1)--Fee for Inspection of Commercial Trucks
------------------------------------------------------------------------
                                       Amount (per      Amount (prepaid
          Effective date                 arrival)         annual fees)
------------------------------------------------------------------------
October 1, 2024...................             $12.40            $622.00
October 1, 2025...................              13.45             808.20
October 1, 2026...................              14.50             870.60
October 1, 2027...................              15.55             935.40
------------------------------------------------------------------------
Note: The per arrival fee has been rounded down to the next $0.05 (five-
  cent) increment to facilitate border operations. Additionally, the
  prepaid fees are set at 50 times the unrounded fee rate of $12.44, and
  60 times the unrounded fee rates of $13.47, $14.51, and $15.59,
  respectively.

    (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 50 times the 
unrounded per arrival fee for the period between October 1, 2024 and 
September 30, 2025, and 60 times the unrounded per arrival fee 
thereafter. 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 4. 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 
(d), 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 times the AQI user fee for each 
arrival.

                   Table 4 to Paragraph (d)(1)--Fee for Inspection of Commercial Railroad Cars
----------------------------------------------------------------------------------------------------------------
                                                                               Amount (per
                              Effective date                                     arrival)       Amount (prepaid)
----------------------------------------------------------------------------------------------------------------
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
    (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 procedures. The Association of American Railroads 
(AAR), the National Railroad Passenger Corporation (AMTRAK), and 
railroad companies acting individually shall file monthly written 
statement with USDA, APHIS, FMD, within 90 days after the end of each 
calendar month. Each written statement 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 written statement with 
their mailed payment as directed in this paragraph (d)(4). For all 
other payment types, the companies must email the written

[[Page 38639]]

statement to [email protected]. Individual railroad companies must 
submit a written statement 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 90 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) Written statements 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 written statements, 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 5:

 Table 5 to Paragraph (e)(1)--Fee for Inspection of Commercial Aircraft
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
October 1, 2024............................................      $281.39
October 1, 2025............................................       300.78
October 1, 2026............................................       320.61
October 1, 2027............................................       340.90
------------------------------------------------------------------------

    (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) [Reserved]
    (v) Any aircraft moving from the U.S. Virgin Islands to Puerto 
Rico; and
    (vi) 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 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/userfees/aqi-payment-types.pdf or for further 
information relative to electronic remittance, 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. 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 written statement 
each month stating the fees that are due for the month. Carriers or 
their agents must include a hard copy of the written statement with any 
mailed payment. For all other payment types, including for months with 
no fees collected, the carriers must email the written statement to 
[email protected].
    (iii) The written statement 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 written statement 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 this paragraph (e) 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

[[Page 38640]]

calculations, payments, and written statements 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 October 1, 2024. The fees are shown in tables 6 and 7:

        Table 6 to Paragraph (f)(1)--International Air Passenger
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
October 1, 2024............................................        $3.71
October 1, 2025............................................         3.84
October 1, 2026............................................         3.98
October 1, 2027............................................         4.12
------------------------------------------------------------------------


    Table 7 to Paragraph (f)(1)--International Cruise (Sea) Passenger
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
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.
    (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) 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.
    (ii) [Reserved]

[[Page 38641]]

    (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.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/sites/default/files/aqi-payment-types.pdf. 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/sites/default/files/aqi-payment-types.pdf.
    (iv) The air or sea carrier, travel agent, tour wholesaler, or 
other party issuing a ticket or travel document must provide a written 
statement 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 written statement with their mailed 
payment. For all other payment types, they must email the written 
statement separately to [email protected]. The written statement 
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) Refunds by a remitter of AQI user fees collected in conjunction 
with unused tickets or travel documents shall be netted against the 
next subsequent remittance. The ticket or travel document-issuing 
entity must submit a revised written statement indicating the revised 
number of passengers and international passenger AQI user fees amount 
collected. The revised written statement 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.
    (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 (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, 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 8. 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 8 to Paragraph (g)(3)(i)--Administrative User Fee
----------------------------------------------------------------------------------------------------------------
                                                                                     Amount per shipment
                              Effective dates                              -------------------------------------
                                                                                PCIT used        PCIT not used
----------------------------------------------------------------------------------------------------------------
October 1, 2009, through September 30, 2010...............................                 $3                 $6
October 1, 2010, through September 30, 2011...............................                  6                 12

[[Page 38642]]

 
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 9.

   Table 9 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 10. 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 10 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 11.

  Table 11 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 12.

            Table 12 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

[[Page 38643]]

delivery,\1\ support,\2\ and administrative costs;\3\ and
---------------------------------------------------------------------------

    \1\ 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.
    \2\ 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.
    \3\ 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,\4\ support,\5\ and administrative \6\ 
hours;
---------------------------------------------------------------------------

    \4\ 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.
    \5\ 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.
    \6\ 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,\1\ support,\2\ 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. (1) Each 
importer of a consignment of articles that require treatment upon 
arrival from a place outside of the customs territory of the United 
States, either as a preassigned condition of entry or as a remedial 
measure ordered following the inspection of the consignment, must pay 
an AQI user fee. The AQI user fee is charged on a per-treatment basis, 
i.e., if two or more consignments are treated together, only a single 
fee will be charged, and if a single consignment is split or must be 
retreated, a fee will be charged for each separate treatment conducted. 
The AQI user fee for each treatment is shown in table 13:

     Table 13 to Paragraph (h)(1)--Fee for Conducting and Monitoring
                               Treatments
------------------------------------------------------------------------
                       Effective date                           Amount
------------------------------------------------------------------------
October 1, 2024............................................      $240.60
October 1, 2025............................................       244.19
October 1, 2026............................................       247.79
October 1, 2027............................................       251.38
------------------------------------------------------------------------

    (2) Treatment provider. (i) 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. 
Treatment providers must collect the AQI treatment fee applicable at 
the time the treatment is applied.
    (ii) When AQI treatment services are provided by APHIS, APHIS will 
collect the AQI treatment fee applicable at the time the treatment is 
applied from the person receiving the services. Remittances must be 
made by check or money order, payable in United States dollars, through 
a United States bank, to ``The Animal and Plant Health Inspection 
Service.''
    (3) Collection of fees. (i) In cases where APHIS is not providing 
the AQI treatment and collecting the associated fee, AQI user fees 
collected from importers pursuant to this 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. AQI user fees 
collected from importers 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 treatment 
user fees, 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 from the person holding such user fees for 
late remittance.
    (ii) [Reserved]
    (4) Remittance and statement procedures. (i) The treatment provider 
that collects the AQI treatment user fee must remit the fee to USDA, 
APHIS, AQI, PO Box 979044, St. Louis, MO 63197-9000.
    (ii) AQI treatment user fees must be remitted for receipt no later 
than 31 days after the close of the calendar quarter in which the AQI 
user fees were collected. Late payments will be subject to interest, 
penalty, and handling charges 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) The remitter must mail with the remittance a written 
statement to USDA, APHIS, AQI, PO Box 979044, St. Louis, MO 63197-9000. 
The statement must include the following information:
    (A) Name and address of the person remitting payment;
    (B) Taxpayer identification number of the person remitting payment;
    (C) Calendar quarter covered by the payment; and
    (D) Amount collected and remitted.
    (iv) Remittances must be made by check or money order, payable in 
United States dollars, through a United States bank, to ``The Animal 
and Plant Health Inspection Service.''
    (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;

[[Page 38644]]

    (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.
    (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) of this section. If regulated articles 
can be released from quarantine, the articles will be released, and any 
unpaid debt will be handled in accordance with procedures for unpaid 
debt in 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 
written statements, 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, written statements. 
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 remittance 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 this part 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.


(Approved by the Office of Management and Budget under control numbers 
1651-0019, 0579-0052, 0579-0094, and 0579-0489).

    Done in Washington, DC, this 25th day of April 2024.
Jennifer Moffitt,
Undersecretary, Marketing and Regulatory Programs.
[FR Doc. 2024-09348 Filed 5-6-24; 8:45 am]
BILLING CODE 3410-34-P