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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection 

Service 

7 CFR Part 354

[Docket No. 04–042–1] 

RIN 0579–AB88

User Fees for Agricultural Quarantine 

and Inspection Services

AGENCY: Animal and Plant Health 

Inspection Service, USDA.

ACTION: Interim rule and request for 

comments. 

SUMMARY: We are amending the user fee 

regulations by adjusting the fees charged 

for certain agricultural quarantine and 

inspection (AQI) services that are 

provided in connection with certain 

commercial vessels, commercial trucks, 

commercial railroad cars, commercial 

aircraft, and international airline 

passengers arriving at ports in the 

customs territory of the United States. 

Existing user fees have not been 

adjusted since October 1, 2001. Due to 

the events of September 11, 2001, and 

the resulting increased security 

concerns, a greater volume and variety 

of cargo entering the United States is 

being inspected. The fee adjustments are 

needed to recover the costs of this 

increased inspection activity and to 

account for routine inflationary 

increases in the cost of doing business. 

The adjusted AQI user fees will cover 

fiscal years 2005 through 2010.

DATES: This interim rule is effective 

January 1, 2005. We will consider all 

comments that we receive on or before 

February 7, 2005.

ADDRESSES: You may submit comments 

by any of the following methods: 

• EDOCKET: Go to http://

www.epa.gov/feddocket to submit or 

view public comments, access the index 

listing of the contents of the official 

public docket, and to access those 

documents in the public docket that are 

available electronically. Once you have 

entered EDOCKET, click on the ‘‘View 

Open APHIS Dockets’’ link to locate this 

document. 

• Postal Mail/Commercial Delivery:

Please send four copies of your 

comment (an original and three copies) 

to Docket No. 04–042–1, Regulatory 

Analysis and Development, PPD, 

APHIS, Station 3C71, 4700 River Road 

Unit 118, Riverdale, MD 20737–1238. 

Please state that your comment refers to 

Docket No. 04–042–1. 

• E-mail: Address your comment to 

regulations@aphis.usda.gov. Your 

comment must be contained in the body 

of your message; do not send attached 

files. Please include your name and 

address in your message and ‘‘Docket 

No. 04–042–1’’ on the subject line. 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov and follow 

the instructions for locating this docket 

and submitting comments. 

Reading Room: You may read any 

comments that we receive on this 

docket in our reading room. The reading 

room is located in room 1141 of the 

USDA South Building, 14th Street and 

Independence Avenue SW., 

Washington, DC. Normal reading room 

hours are 8 a.m. to 4:30 p.m., Monday 

through Friday, except holidays. To be 

sure someone is there to help you, 

please call (202) 690–2817 before 

coming. 

Other Information: You may view 

APHIS documents published in the 

Federal Register and related 

information, including the names of 

groups and individuals who have 

commented on APHIS dockets, on the 

Internet at http://www.aphis.usda.gov/

ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: For 

information concerning program 

operations, contact Ms. Jennifer Lemly, 

Staff Officer, Quarantine Policy, 

Analysis and Support Staff, PPQ, 

APHIS, 4700 River Road Unit 60, 

Riverdale, MD 20737–1236; (301) 734–

8372. For information concerning rate 

development, contact Ms. Donna Ford, 

Branch Chief, Financial Services 

Branch, FMD, MRPBS, APHIS, 4700 

River Road, Unit 55, Riverdale, MD 

20737–1232, (301) 734–5901.

SUPPLEMENTARY INFORMATION: 

Background 

Section 2509(a) of the Food, 

Agriculture, Conservation, and Trade 

Act of 1990 (21 U.S.C. 136a), referred to 

below as the FACT Act, authorizes the 

Animal and Plant Health Inspection 

Service (APHIS) to collect user fees for 

agricultural quarantine and inspection 

(AQI) services. The FACT Act was 

amended on April 4, 1996, and May 13, 

2002. 

The FACT Act, as amended, 

authorizes APHIS to collect user fees for 

AQI services provided in connection 

with the arrival, at a port in the customs 

territory of the United States, of: 

• Commercial vessels, 

• Commercial trucks, 

• Commercial railroad cars, 

• Commercial aircraft, and 

• International airline passengers. 

According to the FACT Act, as 

amended, these user fees should recover 

the costs of: 

• Providing the AQI services for the 

conveyances and the passengers listed 

above, 

• Providing preclearance or 

preinspection at a site outside the 

customs territory of the United States to 

international airline passengers, 

commercial vessels, commercial trucks, 

commercial railroad cars, and 

commercial aircraft, and 

• Administering the user fee program. 

Introduction 

On November 16, 1999, we published 

in the Federal Register (64 FR 62089–

62096, Docket No. 98–073–2) a final 

rule that amended the user fee 

regulations in § 354.3 by adjusting the 

fees charged for certain AQI services we 

provide in connection with certain 

commercial vessels, commercial trucks, 

commercial railroad cars, commercial 

aircraft, and international airline 

passengers arriving at ports in the 

customs territory of the United States. 

We did this to ensure that we recovered 

the anticipated actual cost of providing 

these services. That rulemaking 

established the user fees for these 

services for fiscal years (FYs) 2000 

through 2002. 

Subsequent rulemaking, culminating 

in a final rule published in the Federal 

Register on January 24, 2003 (68 FR 

3375, Docket No. 02–085–2), extended 

those adjusted user fees beyond FY 2002 

until the fees could be revised again. 

Subsequently, in an interim rule that 

was published in the Federal Register

and effective on September 3, 2002 (67 

FR 56217–56218, Docket No. 02–085–1), 

we extended those adjusted user fees 

beyond FY 2002 until the fees could be 

revised again. 

In addition to the routine increases in 

the cost of providing AQI services, due 

to inflation, replacement of equipment, 

etc., the events of September 11, 2001, 

have had a profound impact on costs 

and revenues. Following the attacks, 

there was a sharp drop in the number 

of international passengers entering the 

United States. While international air 

traffic has rebounded, it has not 

returned to its pre-September 11 levels. 

We estimate that due to the decreases in 

the volume of passenger and cargo 

traffic entering the United States since 

September 11, 2001, revenues generated 

through AQI user fees are more than 

$135 million lower than they otherwise 

would have been. Despite the drop in 

traffic, we have had to step up our AQI 

inspection activities, rather than curtail 

them, due to increased post-September 

11 security concerns, which include the 

threat of bioterrorism. Since FY 2001, 

AQI staffing has increased by 

approximately one-third. Inspectors are 

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now inspecting a greater volume of 

cargo entering the United States and a 

greater variety of types of cargo than 

they did before September 11, 2001. 

Such operations are very personnelintensive and costly. 

Following the terrorist attacks of 

September 11, 2001, certain AQI 

functions, but not the laws or 

regulations upon which they are 

premised, were transferred from APHIS 

to the Customs and Border Protection 

(CBP) bureau of the Department of 

Homeland Security (DHS). Together 

with certain U.S. Customs Service and 

Immigration and Naturalization Service 

employees, APHIS agricultural 

inspectors were brought into the newly 

created CBP bureau in an effort to 

secure our borders and ports of entry 

while still facilitating the movement of 

legitimate trade and travelers. The 

creation of a consolidated border 

inspection organization has allowed for 

unprecedented information sharing, 

cross-training among specialists, and the 

use of innovative techniques that were 

not possible when border inspection 

functions were spread across three 

separate agencies. 

Because our AQI programs are funded 

solely through user fee collections, it is 

imperative that we adjust the fees 

upward to cover our increased program 

costs. We estimate that, absent the 

necessary fee adjustments, the AQI 

account would be in deficit status by 

July 19, 2005, meaning that APHIS and 

CBP could be forced to lay off 

significant numbers of employees and 

cut back on services. Such cutbacks 

would increase the potential for animal 

and plant pests and diseases to enter the 

United States and could disrupt trade if 

inspectors were not available to inspect 

and clear cargo on a timely basis. 

In this interim rule, therefore, we are 

amending our AQI user fee regulations 

in order to cover our increased costs. 

Specifically, we are establishing fees to 

be charged for FYs 2005 through 2010 

for each of the types of conveyances or 

persons to whom AQI services are 

provided: Commercial vessels, 

commercial trucks, commercial railroad 

cars, commercial aircraft, and 

international airline passengers. 

However, because commercial truck 

inspection has separate fees for trucks 

with and without decals, we are actually 

adjusting a total of six fees. These 

adjustments are designed to recover our 

full costs for providing these AQI 

services and are based on an analysis of 

our costs for providing services in 

recent years, as well as our best 

projections of what it will cost us to 

provide these services in FYs 2005 

through 2010. 

These user fee adjustments are 

necessary to prevent plant and animal 

diseases and pests from entering the 

United States and to protect against the 

growing threat of bioterrorism. 

By projecting our flat-rate AQI user 

fees 6 years into the future, we are 

allowing our customers to make 

necessary business plans. We will 

review our fees annually and, if 

necessary, undertake rulemaking to 

amend them if the published fees do not 

properly recover our costs. We also plan 

to publish a notice in the Federal 

Register prior to the beginning of each 

fiscal year to remind or notify the public 

of the user fees for that particular fiscal 

year.

AQI User Fee Accounting 

In FY 1992, APHIS established 

accounting procedures to segregate AQI 

user fee program costs from all other 

costs. We published a detailed 

description of these procedures in the 

Federal Register on December 31, 1992 

(57 FR 62469–62471, Docket No. 92–

148–1), as part of an interim rule 

amending some of our user fees. We 

maintain all AQI fees we collect in 

distinct accounts, carefully monitor the 

balances in these accounts, and only use 

these funds to pay for our actual costs 

for providing these distinct services. 

Any surplus in these accounts carries 

forward from year to year, is not subject 

to appropriation by Congress, and is 

available until expended to fund AQI 

activities. 

Types of AQI Program Costs 

As part of our accounting procedures, 

we maintain separate accounting codes 

to record costs that can be directly 

related to an inspection activity. These 

are referred to as ‘‘direct-charge costs.’’

At the State (i.e., field) level and below, 

we direct-charge the following costs to 

the AQI account: Salaries and benefits 

for inspectors and canine officers, 

supervisors (such as officers-in-charge), 

and clerical staff; equipment used only 

in connection with services subject to 

user fees; contracts; and large supply 

items such as x-ray equipment and 

uniforms. 

Other program-delivery-related costs, 

at the State level and below, that cannot 

be directly charged to individual 

accounts are charged to ‘‘distributable’’

accounts established at the State level 

and are referred to as ‘‘distributable 

costs.’’ The following types of costs are 

charged to distributable accounts: 

Utilities, rent, telephone, vehicles, office 

supplies, etc. The costs in these 

distributable accounts are prorated (or 

distributed) among all the activities that 

benefit from the expense, based on a 

formula under which the costs that are 

directly charged to each activity are 

divided by the total costs directly 

charged to each account at the field 

level. For example, if a work unit 

performs work on domestic programs, 

AQI user fee programs, and AQIappropriated programs, the costs are 

distributed among each of these 

programs, based on the percentage of 

the direct costs for that activity at the 

field level that is charged to that 

activity. 

AQI program costs also include 

program direction and support costs we 

incur at the regional and headquarters 

level, as well as Agency-level support 

costs. Headquarters-level costs include 

salaries and benefits for employees of 

APHIS’ Plant Protection and Quarantine 

and International Services programs 

who are based at the programs’

headquarters in Riverdale, MD, and 

Washington, DC. We incur Agency-level 

support costs through activities that 

support the Agencies (i.e., APHIS and 

CBP), such as recruitment and 

development; legislative and public 

affairs; regulation development; 

regulatory enforcement; and budget, 

accounting, payroll, purchasing, billing, 

and collection services. 

Departmental charges are assessed for 

various AQI program costs including 

Federal telephone service, mail, 

processing of payroll and money 

management, unemployment 

compensation, Office of Workers 

Compensation Programs, and central 

supply for storing and issuing 

commonly used supplies and forms. 

In order to identify properly our 

actual total AQI program costs in prior 

fiscal years, we first identified the 

direct-charge costs. We then added to 

this the pro-rata share costs of the 

distributable accounts maintained at the 

State, regional, headquarters, Agency, 

and departmental levels.

Cost Projections for FY 2005 Through 

FY 2010 

We used the prior year (FY 2004) 

costs of $327 million and added 

inflationary factors to project our costs 

for FY 2005 through FY 2010. Based on 

the 2005 Mid-Session Review—

Economic Assumptions, a factor of 1.5 

percent has been added for pay 

increases and general inflation cost 

increases (i.e., all of the AQI costs other 

than pay increases) for FYs 2005 

through 2010. Since the percentage 

increase was the same for both factors, 

a flat 1.5 percent has been applied to all 

costs. We then added a reasonable 

amount (25 percent of AQI program 

costs) to contribute to a reserve in the 

AQI account to identify our total 

71662 Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 

anticipated costs for those years. We 

split our total costs for each fiscal year 

into six AQI service categories (costs for 

the inspection of trucks with and 

without prepaid decals were calculated 

separately), performed extensive volume 

analyses to project volumes of use for 

each fee category in the out-years, 

divided our projected costs per fee 

category by our projected volumes of 

users per fee category, and rounded 

each projected fee to obtain the final 

fees we are establishing. More detailed 

information about each of these steps 

follows. 

Projected AQI Program Costs for Fiscal 

Years 2005 Through 2010 

Table 1 shows the total projected 

costs of administering the AQI program 

for FYs 2005 through 2010. In projecting 

these costs, we began with a FY 2004 

base need of $133 million for APHIS’

AQI work and $194 million for CBP’s 

AQI work, for a total FY 2004 AQI cost 

of $327 million. This figure takes into 

account only the cost of providing AQI 

services for FY 2004 and does not 

include a reserve component. Similarly, 

the projected annual program costs for 

FYs 2005 through 2010 reflect only the 

costs we anticipate for providing AQI 

services for each of those fiscal years. 

The reserve-building component for 

each is shown separately. 

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Reserve Fund 

We need to maintain a reasonable 

reserve balance in the AQI account of 25 

percent of the AQI program costs. We 

are including a reserve-building 

component in the user fees for each 

activity for FYs 2005 through 2010. 

Each fee contributes to the reserve 

proportionately. 

The reserve fund provides us with a 

means to ensure the continuity of AQI 

services in cases of fluctuations in 

activity volumes, bad debt, carrier 

insolvency, or other unforseen events, 

such as those of September 11, 2001, 

which, as noted earlier, resulted in 

substantial cost increases for the AQI 

programs and lower-than-anticipated 

revenues. Maintaining an adequate 

reserve fund is, therefore, essential for 

the AQI program. We intend to monitor 

the reserve balance closely and propose 

adjustments in our fees as necessary to 

ensure a reasonable balance. If we 

determine that any fees are too high and 

are contributing to unreasonably high 

reserve levels, we will undertake 

rulemaking to lower the fees as quickly 

as possible. Conversely, if it becomes 

necessary to increase any fees because 

reserve levels are being drawn too low, 

we will undertake rulemaking to 

increase the fees. 

Volumes 

In order to calculate our costs and 

fees, we needed to estimate the annual 

number of users in each category of AQI 

services that would be subject to 

inspection in FYs 2005 through 2010. 

These estimates are based on our review 

of actual volumes for each service 

category shown in our FY 1999 through 

FY 2003 collection history, as well as 

factors that have affected these volumes 

in recent years, such as changes in 

airline passenger volumes as a result of 

the terrorist attacks on the United States 

on September 11, 2001. We calculated 

our projected changes in volumes in the 

out-years for each of the six AQI user fee 

categories (commercial trucks with 

decals and without decals are listed as 

separate categories) based on an 

individual analysis of each user fee 

service category. 

Commercial Vessel Volumes 

We reviewed actual commercial 

vessel volumes for FYs 1999 through 

2003, as well as year-to-date data for FY 

2004. The volumes for all 5 fiscal years 

fluctuated between 51,007 and 53,421 

commercial vessels, with no statistically 

significant trends identified. The yearto-date data for FY 2004 suggest that the 

volume for the year will fall within the 

same range. Based on our assumption of 

general trade increases each fiscal year, 

we anticipate a slight increase in 

commercial vessel volumes of 1 percent 

per year for FYs 2005 through 2010. We 

used this percentage to estimate 

volumes for FYs 2005 through 2010. 

Commercial Truck Volumes (Individual 

Crossings and Decals) 

We reviewed actual commercial truck 

and commercial truck decal volumes in 

FYs 1999 through 2003, as well as yearto-date data for FY 2004. The volumes 

of individual truck crossings for all 5 

fiscal years fluctuated between 534,586 

and 726,677 commercial truck 

crossings, with no statistically 

significant trends identified. The 

numbers of truck decals distributed in 

FYs 1999 through 2003 fluctuated 

between 23,094 and 45,607, with no 

statistically significant trends identified. 

The year-to-date data for FY 2004 

suggest that individual truck crossing 

and truck decal volumes will remain 

within these ranges. Using the average 

percentage change in the past 3 fiscal 

years, we detected slight increases in 

the individual commercial truck 

crossing volumes of 0.55 percent and in 

the truck decal volumes of 1 percent. 

These slight increases in volumes are 

consistent with our assumption of 

general trade increases each fiscal year. 

We used these percentages to estimate 

the respective volumes for individual 

crossings and decals for FYs 2005 

through 2010, as shown in table 2. 

Projected volumes are one component 

we use in the calculation of user fees. 

In estimating the commercial truck user 

fees for FYs 2005 through 2010, we 

relied only on the 0.55 percent figure 

associated with individual crossings 

because the truck decal fee is not 

calculated separately but is set at 20 

times the individual crossing fee. 

Commercial Railroad Car Volumes 

We reviewed actual commercial 

railroad car volumes in FYs 1999 

through 2003, as well as year-to-date 

data for FY 2004. The volumes for the 

5 fiscal years fluctuated between 

146,809 and 224,269 loaded commercial 

railroad car crossings, with no 

statistically significant trends identified. 

The year-to-date data for FY 2004 

suggest that FY 2004 volumes will 

remain within this range. Based upon 

the average percentage change in the 

past 3 fiscal years, we detected a slight 

increase in loaded commercial railroad 

car volumes of 1.35 percent per year, 

and we used this percentage to estimate 

the volumes for FYs 2005 through 2010. 

This small increase in volumes is 

consistent with our assumption of 

general trade increases each fiscal year. 

Commercial Aircraft Volumes 

We reviewed actual commercial 

aircraft volumes for FYs 1999 through 

2003, as well as year-to-date data for FY 

2004. The volumes in these years ranged 

between 317,240 and 439,618 

commercial aircraft. Although there was 

a decrease in volumes in FY 2002, the 

fiscal year following the September 11, 

2001, attacks, the commercial aircraft 

volumes started to rebound in FY 2003, 

but they did not return to their preSeptember 11 levels. Year-to-date data 

for FY 2004 indicate that the 

commercial aircraft volumes continue to 

increase at a rate of about 1.18 percent, 

which has been the average volume 

increase for the last 5 fiscal years (FYs 

1999 through 2003). Based on this 

figure, we used an estimated percentage 

increase in volumes of 1.18 percent per 

year to project commercial aircraft 

volumes in FYs 2005 through 2010. 

International Airline Passenger 

Volumes 

We reviewed actual international 

airline passenger volumes for FYs 1999 

through 2003, as well as year-to-date 

data for FY 2004. The volumes in these 

years ranged between 44,552,311 and 

66,609,081 passengers. Although there 

was a decrease in passenger volumes in 

FY 2002, the fiscal year following the 

attacks of September 11, 2001, the 

passenger volumes began to rebound in 

FY 2003 but did not return to preSeptember 11 levels. The year-to-date 

data for FY 2004 indicate that passenger 

volumes continue to increase at a rate of 

about 1.18 percent, which has been the 

average volume increase for the last 5 

fiscal years (FYs 1999 through 2003). 

Based on this figure, we used an 

estimated percentage increase in 

volumes of 1.18 percent per year to 

project international airline passenger 

volumes for FYs 2005 through 2010. 

Estimated volumes for each category 

of AQI services for FY 2004 and 

projected estimated volumes for FYs 

2005 through 2010 are shown in table 2. 

Estimated costs for each category of AQI 

services for FYs 2005 through 2010 are 

shown in tables 3 through 8.

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Calculation and Rounding of User Fees 

Once we established the total annual 

costs to administer the AQI program, 

including the amount necessary to 

maintain the AQI account reserve at a 

reasonable level, we began the 

calculation of our fees. In calculating 

the user fees, we divided the sum of the 

costs of providing each service by the 

projected number of users subject to 

inspection (i.e., the volume of use), 

thereby arriving at ‘‘raw’’ fees. We then 

rounded the raw fees. As in the past, we 

rounded raw fees up, rather than down, 

to ensure that we collect enough 

revenue to cover the costs of providing 

services and to maintain a reasonable 

reserve balance. Any excess collections 

due to rounding are added to the reserve 

balance for each individual fee category. 

If an increase in volume results in 

additional revenue from user fees, this 

revenue would not necessarily increase 

the reserve because the additional 

money would be used to service the 

increased volume. We rounded all user 

fees up to the nearest quarter, except for 

the international airline passenger user 

fee. Given the sheer volume of 

passengers, if we rounded up to the 

nearest quarter we would recover far 

more than is necessary. Therefore, we 

rounded these passenger user fees up to 

the nearest nickel. Tables 3 through 8 

contain data on projected costs, 

including the amounts necessary to 

maintain reasonable reserve levels; 

volumes of use; raw and rounded fees; 

and projected revenues for FYs 2005 

through 2010. 

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Table 9 shows the AQI user fees in 

effect prior to the effective date of this 

interim rule and the projected user fees 

for FYs 2005 through 2010. Also, below, 

we describe each AQI service and 

explain additional activities and costs as 

they pertain to each service 

individually.

Commercial Vessel User Fee 

We inspect commercial vessels of 100 

net tons or more arriving at ports of 

entry in the customs territory of the 

United States. Vessel owners/operators 

pay a user fee for the first 15 arrivals at 

ports. CBP collects this user fee on our 

behalf. 

The AQI user fee for commercial 

vessel inspection prior to this interim 

rule was $480.50. That fee became 

effective on October 1, 2001, and had 

not been adjusted prior to this 

rulemaking. The user fee from the 

effective date of this interim rule until 

the end of FY 2005 is $486.00. User fees 

for subsequent years are as follows: 

$488 in FY 2006, $490 in FY 2007, $492 

in FY 2008, $494 in FY 2009, and $496 

in FY 2010. 

Commercial Truck and Truck Decal 

User Fees 

We inspect commercial trucks 

arriving at land ports in the customs 

territory of the United States from 

Mexico. CBP collects these user fees on 

our behalf. 

Commercial trucks crossing at land 

border ports are also required to pay 

CBP user fees; therefore, our regulations 

provide that commercial truck owners/

operators must prepay our user fee if 

they are prepaying the CBP user fee. In 

this case, our required prepaid user 

(decal) fee is 20 times the user fee for 

each single arrival. This fee covers an 

unlimited number of entries during the 

calendar year. Upon payment, the truck 

owner or operator receives a decal to 

place on his or her truck windshield. 

This is a joint decal that indicates that 

both the Customs (now part of DHS) and 

APHIS user fees for the truck have been 

paid for that calendar year. 

Prior to this rulemaking, the 

commercial truck user fee was $4.75 for 

a single crossing and $95 for a decal. 

This interim rule raises the fee to $5 for 

a single crossing and $100 for a decal 

until the end of FY 2005. User fees for 

FYs 2006 through 2010 are $5.25 for a 

single crossing and $105 for a decal. 

Commercial Railroad Car User Fee 

We inspect loaded commercial 

railroad cars arriving at land ports in the 

customs territory of the United States. 

The fees for this service are calculated 

and remitted by the individual railroad 

companies within 60 days after the end 

of each calendar month. If a railroad 

company chooses to prepay our fees, the 

fee is 20 times the individual arrival fee 

for each loaded rail car. This prepaid 

user fee covers 1 calendar year’s worth 

of AQI inspections. Our user fee prior to 

this interim rule was $7 per commercial 

loaded railcar. The fee from the effective 

date of this interim rule until the end of 

FY 2005 is $7.50. User fees for 

subsequent years are as follows: $7.50 in 

FY 2006 and $7.75 in FYs 2007 through 

2010.

Commercial Aircraft User Fee 

We inspect international commercial 

aircraft arriving at airports in the 

customs territory of the United States. 

The fees for this service are calculated 

and remitted by the individual airline 

companies within 31 days after the end 

of each calendar quarter. The user fee 

for commercial aircraft inspection prior 

to this interim rule was $65.25. This 

interim rule raises the fee for 

commercial aircraft inspection to $70 

from the effective date of the rule until 

the end of FY 2005. User fees for 

subsequent years are as follows: $70.25 

in FY 2006, $70.50 in FYs 2007 and 

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International Airline Passenger User 

Fee 

We inspect international airline 

passengers arriving at airports in the 

customs territory of the United States. 

Millions of travelers pass through U.S. 

airports daily. Our overall goal, keeping 

in mind airport security, is a timely, 

seamless inspection process that is 

integrated with the clearance processes 

of other Federal agencies with 

inspection responsibilities, that will 

ensure the fastest passenger clearance 

time while at the same time safeguard 

against the introduction of pests and 

diseases of animals and plants. Our joint 

goal is to enhance security and improve 

enforcement and regulatory processes in 

order that international air passengers 

are cleared through the entire Federal 

inspection process as quickly as 

possible without jeopardizing our 

security requirements. In partnership 

with the airline industry, we obtain 

advance information on international air 

passengers through the use of an 

Advance Passenger Information System 

to expedite the overall processing of 

passengers with no loss in enforcement 

of security requirements. 

Prior to this interim rule, the user fee 

for international airline passenger 

clearance was $3.10 per passenger; the 

fee from the effective date of this 

interim rule until the end of FY 2005 

will be $4.95 per passenger. The user fee 

for FYs 2006 through 2010 will be $5 

per passenger. We wish to point out 

that, under the regulations, it is the user 

fee in effect at the time the fee is 

collected—in most cases, at the time the 

ticket is purchased—that applies; 

therefore, passengers who purchased a 

ticket and paid a user fee prior to the 

effective date of this rule would not 

have to pay an additional $1.85 if their 

date of departure came after the 

effective date of this rule. 

Miscellaneous 

In addition to the substantive changes 

described above, we are making a 

number of editorial changes to § 354.3. 

Previously, there were various addresses 

given for remittances of AQI user fees 

and for the submission of statements 

and other information. This interim rule 

provides a single new address for these 

purposes. The new address is as 

follows: U.S. Bank, United States 

Department of Agriculture (USDA), 

APHIS, AQI, P.O. Box 952181, St. Louis, 

MO 63195–2181. Where reference was 

made in § 354.3 to ‘‘APHIS user fees’’

and ‘‘APHIS permits,’’ we now refer to 

‘‘AQI user fees’’ and ‘‘AQI permits.’’ We 

have also updated the definition of 

Customs to read as follows: ‘‘The 

Bureau of Customs and Border 

Protection, U.S. Department of 

Homeland Security.’’ In 

§ 354.3(b)(2)(vi), we have updated a 

reference to an obsolete Customs form. 

The amended paragraph refers to ‘‘the 

Vessel Entrance or Clearance Statement, 

CBP Form 1300.’’ Additionally, for the 

sake of clarity, we have made an 

editorial change to the introductory text 

that precedes the table in § 354.3(b), 

changed the paragraph heading of 

§ 354.3(d)(4) from Remittance and 

statement procedures to Statement 

procedures, and added the heading 

Remittance procedures to § 354.3(d)(5). 

Further, in § 354.3(e)(3)(i), we have 

replaced the word ‘‘vessel’’ with the 

word ‘‘aircraft,’’ also for the purpose of 

clarification. Though there are some 

paragraphs of § 354.3 that remain 

unchanged, in the rule portion of this 

document, we have reprinted the 

section in its entirety so that it will be 

available to users of the regulations 

when this interim rule is published. 

Emergency Action 

This rulemaking, which adjusts our 

flat-rate AQI user fees, is necessary on 

an emergency basis to ensure the 

adequate funding and continued 

operation at necessary levels of CBP and 

APHIS activities vital to preventing the 

introduction of plant and animal pests 

and diseases into the United States. 

Under these circumstances, the 

Administrator has determined that there 

is good cause under 5 U.S.C. 553 for 

issuing this rule as an interim rule 

rather than by publishing it as a notice 

of proposed rulemaking. We are making 

this rule effective on January 1, 2005, to 

provide adequate notice of our adjusted 

fees. 

We will consider comments we 

receive during the comment period for 

this interim rule (see DATES above). 

After the comment period closes, we 

will publish another document in the 

Federal Register. The document will 

include a discussion of any comments 

we receive and any amendments we are 

making to the rule. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This rule has been reviewed under 

Executive Order 12866. The rule has 

been determined to be economically 

significant for the purposes of Executive 

Order 12866 and, therefore, has been 

reviewed by the Office of Management 

and Budget.

For this rule, we have prepared an 

economic analysis. The economic 

analysis provides a cost-benefit analysis 

as required by Executive Order 12866, 

as well as an analysis of the potential 

economic effects of this interim rule on 

small entities, as required under the 

Regulatory Flexibility Act. The 

economic analysis is summarized 

below. The full analysis is available on 

the EDOCKET Web site (see ADDRESSES

above). Copies of the full analysis may 

also be obtained by contacting Ms. 

Donna Ford, Branch Chief, Financial 

Services Branch, FMD, MRPBS, APHIS, 

4700 River Road Unit 55, Riverdale, MD 

20737–1232, (301) 734–5901. 

In this interim rule, we are amending 

the user fee regulations by adjusting the 

fees charged for certain AQI services we 

provide in connection with certain 

commercial vessels, commercial trucks, 

commercial railroad cars, commercial 

aircraft, and international airline 

passengers arriving at ports in the 

customs territory of the United States. 

The fees are being updated to enable us 

to recover the cost of providing those 

services. 

The volume and intensity of 

inspection activities have increased 

dramatically in recent years, 

particularly since the events of 

September 11, 2001. Consequently, the 

cost of providing AQI services has 

increased, significantly outpacing user 

fee collections. In addition, the funding 

required to maintain even the current 

level of services has increased as well, 

due to pay raises and inflation. 

Increasingly open and more extensive 

international trade brings with it the 

need for increased vigilance against 

threats to the agricultural resources of 

the United States. In addition, 

bioterrorism is a new and serious threat. 

Therefore, the need exists for more 

cargo inspection, both in the sheer 

number of inspections and in the range 

of commodities inspected. Broader and 

more intensive passenger screening has 

also become necessary. As shown in 

table 10, had APHIS continued to 

collect user fees in FY 2005 through FY 

2010 at the rates in effect prior to this 

interim rule, total collections would 

have amounted to approximately $1.502 

billion. Program costs are expected to be 

about $2.210 billion over the same 

period. This $708 million difference 

demonstrates the magnitude of the 

shortfall in cost recovery that would 

have occurred absent the changes.

BILLING CODE 3410–34–P

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BILLING CODE 3410–34–C


ER09DE04.017</GPH>
71676 Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 

1Economic Impact of Poultry Export Restrictions. 

USDA–APHIS, CEAH.

2 ‘‘Overseas’’ refers to all countries except Canada 

and Mexico.

3Survey of International Air Travelers. Office of 

Travel and Tourism Industries, International Trade 

Administration, U.S. Department of Commerce.

4 Department of Transportation (DOT), Bureau of 

Transportation Statistics (BTS), Office of Airline 

Information, Air Carrier Groupings. Carriers are 

grouped according to operating revenue boundaries: 

Major air carriers—over $1 billion; national air 

carriers—over $100 million to $1 billion; large 

regional air carriers—$20 million to $100 million; 

and medium regional air carriers—under $20 

million.

Benefits 

The chief benefit associated with AQI 

services is the prevention of losses that 

could be incurred as a result of plant 

and animal pests and diseases entering 

the United States. Such potential losses 

include reductions in yield and 

productivity of affected hosts, costs to 

governmental and private entities of 

pest or disease control and eradication, 

and losses in export revenues due to 

trade embargoes. The harm to American 

agriculture associated with the 

introduction of plant and animal pests 

and diseases can be immense. For 

example, the eradication efforts 

associated with an outbreak of exotic 

Newcastle disease in the western United 

States that began in October of 2002 cost 

U.S. taxpayers, both State and Federal, 

in excess of $180 million. In addition, 

the total direct value of the export 

restrictions which were in place from 

October 2002 though December 2003 

has been estimated at $167 million.1

The primary benefit of increasing AQI 

user fees is to assure that the program 

operates at a level considered sufficient 

to minimize the risk of introduction of 

agricultural pests and diseases. If the 

AQI user fees do not accurately reflect 

costs, services cannot be adequately 

provided. Without the fee increases, the 

reserve fund would be depleted, and the 

program would be in a deficit status, 

potentially forcing layoffs of significant 

numbers of employees and cutbacks in 

services. As a result, the potential for 

foreign pests and diseases to enter the 

United States could be increased. In 

addition, trade could be disrupted if 

inspectors were not available to inspect 

and clear cargo on a timely basis. 

While the expected benefits of this 

interim rule are not quantified, they are 

likely to exceed the costs. 

Costs 

International airline passengers and 

the operators of commercial aircraft, 

commercial vessels, commercial trucks, 

and commercial railroad cars will be 

affected by this rule. Taken collectively, 

the changes in user fees contained in 

this rule appear very large, amounting to 

more than $100 million per fiscal year 

in increased revenues. Estimates of 

changes in demand for commercial 

vessel, aircraft, truck, and railroad car 

inspections attributable to the changes 

in user fees are hindered by the 

difficulty in choosing appropriate prices 

and elasticities of demand; however, the 

fee increases represent very small 

portions of the overall costs related to 

the AQI activities in all categories, so 

the economic impacts on passengers 

and conveyances affected by this 

interim rule are likely to be very small. 

These impacts are discussed in greater 

detail in the paragraphs that follow. 

Impact on International Air Passengers 

AQI fees are charged for the 

inspection of passengers on commercial 

aircraft upon arrival from outside the 

United States, with certain limited 

exceptions. International air passenger 

user fees will increase by $1.85, or 60 

percent, in FY 2005, and by an 

additional $0.05 in FY 2006, with no 

further increases projected through FY 

2010. The total increase, therefore, is 

$1.90, or 61 percent. These revised fees 

are expected to generate a substantial 

increase in program revenues—an 

additional $120 million by 2010—

because of the volume of international 

air travel. In fact, the bulk of increased 

program revenues from the fee 

revisions—more than 80 percent—will 

come from this category. 

The increases in the AQI user fees for 

this category are larger, in percentage 

terms, than those for the other service 

categories. As noted earlier, due to the 

events of September 11, 2001, and the 

resulting increased security concerns, 

we are inspecting a greater volume of 

international airline passengers arriving 

in the United States than we did before. 

Additional personnel and additional 

inspection measures have been needed 

to clear passengers through the Federal 

inspection process in a timely manner 

while at the same time ensuring that 

post-September 11 security concerns, 

which include the threat of 

bioterrorism, are addressed. These 

increased inspection operations are very 

personnel-intensive and costly, but a 

very necessary part of the process. 

The individual fee increases, while 

high in percentage terms, are very small 

relative to international airfares. In 

2002, overseas visitors 2 to the United 

States paid an average of $1,317 in 

international airfare, and U.S. residents 

visiting overseas destinations paid an 

average of $1,409 in international 

airfare.3 The FY 2005 user fee of $4.95 

amounts to less than 0.4 percent of the 

average international air fare, and the 

overall increase is less than 0.1 percent.

Fare increases can affect passenger 

demand and, therefore, affect the 

airlines. The impact of increased user 

fees on the volume of international air 

passengers will depend on the price 

elasticity of demand for international air 

travel. Because there are no close 

substitutes for international air travel, it 

can be assumed that demand is 

relatively inelastic. When demand is 

relatively inelastic, the percentage 

decrease in quantity of trips demanded 

will be less than the percentage increase 

in price attributable to increased user 

fees. This, combined with the fact that 

the user fee increase is very small 

relative to the price of an international 

air ticket, should make the impact very 

small.

Impact on Commercial Aircraft 

Certain international scheduled and 

unscheduled (chartered) air passenger, 

air cargo, and air courier carriers 

arriving at U.S. customs ports are 

subject to AQI inspections. AQI user 

fees are charged for these inspections. 

These regulations affect international 

flights, many of which are operated by 

foreign-owned firms. Agency records 

show that about 43 percent of the 

aircraft clearance user fees collected in 

FY 2003 were from foreign airlines. 

More than 2,000 domestic firms operate 

in air transportation; however, the vast 

majority do not operate international 

flights and, therefore, are not subject to 

the fees. According to Agency records, 

15 major air carriers, 20 national 

carriers, and 18 large regional carriers 4

were responsible for about 87 percent of 

the aircraft clearance fee collections in 

FY 2003.

Commercial aircraft user fees increase 

by $4.75, or 7 percent, in FY 2005 and 

by $0.25 in FYs 2006, 2007, and 2009, 

respectively, for a total increase of 

$5.50, or 8 percent, over the period 

covered by this interim rule. Based on 

the expected volume, the increase in 

user fees generates additional revenues 

ranging from $1.5 million in FY 2005, 

when the adjusted fee is expected to be 

in effect for only three-fourths of the 

fiscal year, to $2.5 million in FY 2010. 

We anticipate that there will be more 

than 400,000 aircraft needing clearance 

annually during the period covered by 

this interim rule. 

The impact of the increases in this 

user fee should be small. The fee 

increases are very small relative to the 

overall operating costs of air carriers. 

About 57 percent of the aircraft cleared 

are owned by U.S. carriers, and about 87 

percent of those aircraft are owned by 

Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 71677

5Air Carrier Profile. National Transportation 

Statistics 2003. DOT/BTS.

6Based on the number of inspections in FY 2003 

(APHIS records) and operating expenses for air 

carriers for 2002 (DOT/BTS).

7Ruth K. DeVelbis, Transportation Industry 

Analyst, Office of Financial and Rate Approvals, 

Maritime Administration, personal communication 

May 2004.

8This estimate is based on the assumption that 

a firm owns 65 trucks, the average number of truck 

registrations per trucking establishment. (DOT/

BTS).

9Based on data from Class I Railroad Statistics. 

Association of American Railroads, Policy and 

Economics Department. Freight revenue per tonmile ($0.02283 in 2003) × average length of haul 

(862.4 miles in 2003) = freight revenue per haul 

($19.70). Freight revenue per haul × average tons 

per carload (62.3 in 2003) = average freight revenue 

per carload ($1,226.60).

major carriers, national carriers, or large 

regional carriers. In 2002, 13 domestic 

major air carriers had operating 

expenses of $79 billion, 30 domestic 

national air carriers had operating 

expenses of $6 billion, and domestic 

large regional air carriers had operating 

expenses of $670 million.5 The total 

increase in the fee over the entire period 

covered by this rule, applied to all 

annual inspections, will represent an 

increase in operating expenses of 0.007 

percent on average for a major carrier, 

0.01 percent on average for a national 

carrier, and 0.6 percent on average for 

a large regional carrier.6

Impact on Commercial Vessels 

The user fee for inspecting 

commercial vessels increases by $5.50, 

or 1 percent, per vessel inspected in FY 

2005 and by a total of $15.50, or 3 

percent, over the period covered in this 

interim rule. The additional revenues 

collected are estimated to be $0.2 

million in FY 2005 and $0.8 million in 

FY 2010. The impact of the increases in 

this user fee should be small. The fee 

increases represent an extremely small 

proportion of the operating costs of bulk 

vessels. The total daily operating costs 

of dry bulk vessels in the year 2001 

averaged $14,769,7 placing the total 

increase in this user fee at 0.1 percent 

of a single day’s operating expenses.

Impact on Commercial Trucks 

AQI user fees are charged for the 

inspection of commercial trucks arriving 

in the United States. The fee for single 

truck inspections increases by $0.25, or 

5 percent, in FY 2005 and by $0.50, or 

11 percent, in total over the period 

covered in this interim rule. The truck 

decal user fee, which is set at a level 

equal to 20 times the single crossing fee, 

increases by $5 in FY 2005 and by $10 

in total. Additional collections from 

both commercial truck sources (single 

entry user fees and multiple entry truck 

decals) will be $0.3 million in FY 2005. 

In FY 2010, additional collections from 

single-entry fees and multiple-entry 

decals will total an estimated $0.6 

million. 

If we assume that any U.S. trucking 

firm that regularly transports freight 

across the U.S./Mexican border will 

purchase an APHIS decal, which is good 

for an unlimited number of entries 

during the calendar year, the proposed 

increase in user fees in FY 2005 could 

cost a firm, at most, an additional $5 per 

truck decal or an estimated $325 for a 

firm operating 65 trucks.8 This increase 

is insignificant when compared to the 

annual receipts of the typical trucking 

firm, representing only 0.02 percent of 

the average U.S. trucking firm’s year 

2000 operating revenues of $1.8 million.

Impact on Loaded Railroad Cars 

AQI user fees are charged for the 

inspection of loaded railroad cars 

entering the United States from Mexico. 

Loaded railcar user fees will increase by 

$0.50, or 7 percent, in FY2005, and by 

a total of $0.75, or 11 percent, over the 

period covered in this interim rule. The 

annual volume of loaded railroad cars 

arriving in the United States from 

Mexico is estimated at about 200,000. 

The additional revenues from the 

increases in this user fee are expected to 

be $0.1 million in FY 2005 and to total 

$0.7 million over the period covered in 

the rule. 

The impact of the increase in fees 

should be small. The total increase in 

this user fee over the entire time frame 

covered in this rule of $0.75 per railcar 

represents only about 0.06 percent of 

the average freight revenue per carload 

for Class I railroads (those with 2002 

operating revenue of at least $272 

million) in 2003.9 Even the full fee in 

FY 2005 of $7.50 represents only 0.6 

percent of the average freight revenue 

per carload.

Administrative Cost Estimates 

Additional reporting costs to private 

airlines associated with revising user 

fees are likely to be very small because 

mechanisms are already in place for 

collecting fees. There should be no 

additional recordkeeping costs for 

ticketing agents and tour operators who 

are not involved in remitting fees and 

are not expected to remit fees in the 

future. Similarly, additional reporting 

burdens associated with cargo 

inspection fees on vessel, aircraft, 

railcar, and truck operators resulting 

from a revision of user fees are likely to 

be very small as mechanisms are already 

in place for collecting fees. 

Alternatives 

One alternative to this interim rule 

would have been to leave the 

regulations unchanged. In that case, the 

fees would have remained unchanged. 

However, in addition to routine 

increases in the cost of providing AQI 

services due to inflation, replacement of 

equipment, and mandated increases in 

pay costs, the events of September 11, 

2001, have had a profound impact on 

costs and revenues. Revenues have 

diminished due, in large part, to 

reduced passenger loads, conveyance 

arrivals, and cargo volumes. On the 

other hand, new security concerns 

regarding international travel have led 

us to adopt an inspection process that 

is much more extensive than before and 

is very personnel-intensive. Therefore, 

AQI program costs have not declined, 

but rather have increased considerably. 

In fact, the program’s cost has 

significantly outpaced user fee 

collections. If APHIS were to continue 

to collect user fees at the rates in effect 

prior to this interim rule during the 

period from FY 2005 through FY 2010, 

total collections would be more than 

$708 million short of projected program 

costs. As noted earlier, such a shortfall 

could result in AQI service cutbacks, 

which would increase the potential for 

animal and plant pests and diseases to 

enter the United States and could 

disrupt trade if inspectors were not 

available to inspect and clear cargo on 

a timely basis. Therefore, this 

alternative was rejected. 

Another alternative to this rule would 

have been to leave the AQI user fees 

unchanged and request that Congress 

cover the additional AQI program costs 

through appropriations. Since FY 1992, 

however, APHIS has received no 

directly appropriated funds to provide 

AQI services. The shift to funding AQI 

programs through user fees rather than 

through appropriations provided a more 

equitable way of matching program 

costs to program users or beneficiaries. 

The implementation of user fees is 

based on the premise that the 

beneficiaries or users of a public system 

should pay for its operation, rather than 

the public at large. The use of 

appropriations to cover the growth in 

the cost of AQI activities would shift 

some of the burden of paying for the 

AQI system back to U.S. taxpayers and 

away from the users of that system. 

Therefore, this alternative was rejected.

A third alternative to this rule would 

have been to simplify the fee increases 

by using a set percentage increase for 

the out-years of the proposal. This 

approach would have involved 

increasing the fees to cover the cost 

71678 Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 

10As a policy, USDA is using an inflation factor 

of 1.5 percent when estimating increases in salaries 

and other economic factors, in accordance with the 

Mid-Session Review—Economic Assumptions.

11U.S. Census Bureau, U.S. Department of 

Commerce. The Economic Census does not cover 

large certificated passenger carriers that report to 

the DOT’s Office of Airline Statistics. Data from the 

2002 Economic Census are not yet fully available, 

and data from the National Transportation 

Statistics 2003, DOT/BTS do not contain 

information on firm size.

12The Economic Census does not cover railroads.

increases in FY 2005, followed by fee 

increases of 1.5 percent per year in FYs 

2006 through 2010.10 However, the 

annual number of users in each category 

of service and trends in those numbers 

affect the level at which each fee should 

be set to properly recover the cost of 

providing the corresponding service. 

These volumes fluctuate over time, and 

those fluctuations also vary by user fee 

service category. While developing the 

needed fee increases, APHIS performed 

a review of factors affecting volumes for 

each service category shown in our 

collection history. This review showed 

that a set percentage increase in the fees 

would eventually result in an excess of 

revenues flowing into the reserve fund 

because we do anticipate general 

volume increases. A 1.5 percent acrossthe-board fee increase, which does not 

take into account volume fluctuations 

and variations between categories, 

would result in additional reserve 

contributions of $26 million in 2010, 

exceeding our planned reserve level. 

Moreover, a single rate of increase for all 

service categories would have users of 

one service subsidizing fees paid by 

users of another service. Therefore, we 

rejected this alternative.

Impact on Small Entities 

The Regulatory Flexibility Act 

requires that the Agency specifically 

consider the economic impact of its 

rules on small entities. The fee changes 

will directly affect commercial maritime 

vessels of 100 net tons or more, 

commercial trucks, commercial railroad 

cars, and commercial aircraft arriving at 

ports in the customs territory of the 

United States. Some of the firms 

affected will be foreign-owned firms, 

and some will be U.S.-owned firms. The 

fee changes will also affect international 

airline passengers arriving in the 

customs territory of the United States, 

but passengers are not included in the 

discussion here because the Regulatory 

Flexibility Act does not cover 

individuals. 

The Small Business Administration 

(SBA) has established guidelines for 

determining which establishments are 

to be considered small. For air 

transportation, the SBA defines a small 

business entity as having 1,500 or fewer 

employees. For water transportation, a 

small business entity is defined as 

having 500 or fewer employees. The 

definition for small business entity in 

truck transportation is one having $18.5 

million or less in annual receipts. For 

railroad transportation, the SBA defines 

a small business entity as having 500 or 

fewer employees. 

According to 1997 Economic Census 

data for air transportation (North 

American Industry Classification 

System [NAICS] code 481; not including 

large certificated passenger carriers),11

only 13 of the 1,868 firms that operated 

for the entire year employed more than 

1,000 workers. Thus approximately 99 

percent (1,855 firms) of these air 

transportation firms employed fewer 

than 1,500 workers. However, the vast 

majority of these firms are not operating 

internationally and are therefore not 

affected by this rule. In 2002, 

approximately 65 percent of the 72 

major, national, and large and medium 

regional air carriers would have been 

considered small by SBA standards. All 

of the major air carriers, and 12 of 30 

nationals, would be considered large. In 

FY 2003, those large air carriers 

accounted for more than 78 percent of 

the aircraft clearance inspections for 

which user fees were collected.

Data on deep-sea coastal water 

transportation (NAICS code 4831) from 

the 1997 Economic Census show that of 

the 487 firms that operated for the entire 

year, 40 firms employed 100 or more 

workers. Thus, at least 92 percent of 

affected water transportation firms 

would be considered small. Data on 

truck transportation (NAICS code 484) 

from the 1997 Economic Census show 

that of the 70,044 firms that operated for 

the entire year, 1,614 firms had annual 

receipts in excess of $10 million. Thus, 

approximately 97.7 percent (68,830 

firms) of all truck transportation firms 

had less than $10 million in annual 

receipts. Based on information from the 

Association of American Railroads 

(AAR),12 of the 571 firms that operated 

for all of 2001 in railroad transportation 

(NAICS code 4011), only 18 firms 

employed more than 500 workers. Thus 

approximately 97 percent (553 firms) of 

all line-haul railroads employed fewer 

than 500 workers.

From the above it can be expected 

that a considerable number of those 

entities affected by this rule can be 

considered small. However, as we have 

noted in our discussions of the 

individual transportation sectors, the 

impacts of the user fee changes 

represent a small portion of overall 

operating costs on transportation 

entities, whether small or large, and 

should therefore have a small impact. 

Under these circumstances, the 

Administrator of the Animal and Plant 

Health Inspection Service has 

determined that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

Executive Order 12372 

This program/activity is listed in the 

Catalog of Federal Domestic Assistance 

under No. 10.025 and is subject to 

Executive Order 12372, which requires 

intergovernmental consultation with 

State and local officials. (See 7 CFR part 

3015, subpart V.) 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This rule has been designated by the 

Administrator, Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, as a major rule 

under the Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA, 5 U.S.C. 801–808). Under 

SBREFA, major rules, in general, cannot 

take effect until 60 days after the rule is 

published in the Federal Register. 

However, section 808(2) of SBREFA 

states that agencies may waive this 

effective date requirement for ‘‘good 

cause’’ and establish an earlier effective 

date. As explained above, this rule is 

necessary on an emergency basis to 

ensure the adequate funding and 

continued operation at necessary levels 

of CBP and APHIS activities vital to 

preventing the introduction of plant and 

animal pests and diseases into the 

United States, and the Administrator 

has determined that there is good cause 

for issuing this rule as an interim rule 

rather than by publishing it as a notice 

of proposed rulemaking. For these same 

reasons, there is ‘‘good cause’’ under 

section 808(2) of SBREFA to make this 

rule effective on a date earlier than 

would otherwise be required under that 

Act. 

Executive Order 12988 

This 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. 

Paperwork Reduction Act 

This rule contains no new 

information collection or recordkeeping 

requirements under the Paperwork 

Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 71679

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.).

List of Subjects in 7 CFR Part 354 

Animal diseases, Exports, 

Government employees, Imports, Plant 

diseases and pests, Quarantine, 

Reporting and recordkeeping 

requirements, Travel and transportation 

expenses.

■ Accordingly, we are amending 7 CFR 

part 354 as follows:

PART 354—OVERTIME SERVICES 

RELATING TO IMPORTS AND 

EXPORTS; AND USER FEES

■ 1. The authority citation for part 354 is 

revised to read as follows:

Authority: 7 U.S.C. 7701–7772 and 8301–

8317; 21 U.S.C. 136 and 136a; 49 U.S.C. 

80503; 7 CFR 2.22, 2.80, and 371.3.

■ 2. Section 354.3 is revised to read as 

follows:

§ 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. 

Arrival. Arrival at a port of entry in 

the customs territory of the United 

States, or at any place served by a port 

of entry as specified in 19 CFR 101.3.

Calendar year. The period from 

January 1 to December 31, inclusive, of 

any particular year. 

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. A railroad 

car used or capable of being used for 

transporting property for compensation 

or hire. 

Commercial shipment. A shipment for 

gain or profit. 

Commercial truck. A self-propelled 

vehicle, designed and used for 

transporting property for compensation 

or hire. Empty trucks and truck cabs 

without trailers fitting this description 

are included. 

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. The Bureau of 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. 

Export certificate for processed plant 

products. A certificate (PPQ Form 578) 

issued by an inspector, describing the 

plant health condition of processed or 

manufactured plant products based on 

inspection of submitted samples and/or 

by virtue of the processing received. 

Person. An individual, corporation, 

partnership, trust, association, or any 

other public or private entity, or any 

officer, employee, or agent thereof. 

Phytosanitary certificate. A certificate 

(PPQ Form 577) issued by an inspector, 

giving the phytosanitary condition of 

domestic plants or unprocessed or 

unmanufactured plant products based 

on inspection of the entire lot or 

representative samples drawn by a 

Federal or State employee authorized to 

conduct such sampling. 

Phytosanitary certificate for reexport.

A certificate (PPQ Form 579) issued by 

an inspector, giving the phytosanitary 

condition of foreign plants and plant 

products legally imported into the 

United States and subsequently offered 

for reexport. The certificate certifies 

that, based on the original foreign 

phytosanitary certificate and/or 

additional inspection or treatment in the 

United States, the plants and plant 

products are considered to conform to 

the current phytosanitary regulations of 

the receiving country and have not been 

subjected to the risk of infestation or 

infection during storage in the United 

States. Plants and plant products which 

transit the United States under Customs 

bond are not eligible to receive the 

phytosanitary certificate for reexport. 

(b) Fee for inspection of commercial 

vessels of 100 net tons or more. (1) 

Except as provided in paragraph (b)(2) 

of this section, the master, licensed deck 

officer, or purser of any commercial 

vessel which is subject to inspection 

under part 330 of this chapter or 9 CFR 

chapter I, subchapter D, and which is 

either required to make entry at the 

customs house under 19 CFR 4.3 or is 

a United States-flag vessel proceeding 

coastwise under 19 CFR 4.85, shall, 

upon arrival, proceed to Customs and 

pay an agricultural quarantine and 

inspection (AQI) user fee. The AQI user 

fee for each arrival, not to exceed 15 

payments in a calendar year (i.e., no 

additional fee will be charged for a 16th 

or subsequent arrival in a calendar 

year), is shown in the following table. 

The AQI user fee shall be collected at 

each port of arrival.

Effective dates Amount 

January 1, 2005, through September 30, 2005 .................... $486.00 

October 1, 2005, through September 30, 2006 .................... 488.00 

October 1, 2006, through September 30, 2007 .................... 490.00 

October 1, 2007, through September 30, 2008 .................... 492.00 

October 1, 2008, through September 30, 2009 .................... 494.00 

October 1, 2009, through September 30, 2010 .................... 496.00 

(2) The following categories of 

commercial vessels are exempt from 

paying an AQI user fee: 

(i) Foreign passenger vessels making 

at least three trips a week from a port 

in the United States to the high seas 

(including ‘‘cruises to nowhere’’) and 

returning to the same port in the United 

States, not having touched any foreign 

port or place other than in Canada, or 

taken on any stores other than in 

Canada; 

(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 bunkers, sea stores, or ship’s 

stores;

(v) Tugboats towing vessels on the 

Great Lakes; and 

(vi) Any vessel which sails only 

between United States and Canadian 

ports, when the Master of such vessel 

arriving from Canada certifies, in the 

‘‘Particulars of Voyage’’ block of the 

Vessel Entrance or Clearance Statement, 

CBP Form 1300, that the vessel has 

sailed solely between the United States 

and Canada for the previous 2 years. 

(c) Fee for inspection of commercial 

trucks. (1) Except as provided in 

paragraph (c)(2) of this section, the 

driver or other person in charge of a 

commercial truck that is entering the 

customs territory of the United States 

and that is subject to inspection under 

part 330 of this chapter or under 9 CFR, 

chapter I, subchapter D, must, upon 

arrival, proceed to Customs and pay an 

AQI user fee for each arrival, as shown 

in the following table:

71680 Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 

1Applicants should refer to Customs and Border 

Protection regulations (19 CFR part 24) for specific 

instructions.

Effective dates Amount 

January 1, 2005, through September 30, 2005 .................... $5.00

October 1, 2005, through September 30, 2006 .................... 5.25

October 1, 2006, through September 30, 2007 .................... 5.25

October 1, 2007, through September 30, 2008 .................... 5.25

October 1, 2008, through September 30, 2009 .................... 5.25

October 1, 2009, through September 30, 2010 .................... 5.25

(2) The following categories of 

commercial trucks are exempt from 

paying an AQI user fee: 

(i) Trucks entering the customs 

territory of the United States from 

Canada. 

(ii) [Reserved] 

(3) Prepayment. 

(i) The owner or operator of a 

commercial truck, if entering the 

customs territory of the United States 

from Mexico and applying for a prepaid 

Customs permit for a calendar year, 

must apply for a prepaid AQI permit for 

the same calendar year. Applicants must 

apply to Customs for prepaid AQI 

permits.1 The following information 

must be provided, together with 

payment of an amount 20 times the AQI 

user fee for each arrival:

(A) Vehicle make, model, and model 

year. 

(B) Vehicle Identification Number 

(VIN). 

(C) License numbers issued by State, 

Province, or country. 

(D) Owner’s name and address. 

(ii) No credit toward the prepaid AQI 

permit will be given for user fees paid 

for individual arrivals. 

(d) Fee for inspection of commercial 

railroad cars. (1) Except as provided in 

paragraph (d)(2) of this section, an AQI 

user fee will be charged for each loaded 

commercial railroad car which is subject 

to inspection under part 330 of this 

chapter or under 9 CFR chapter I, 

subchapter D, upon each arrival. The 

railroad company receiving a 

commercial railroad car in interchange 

at a port of entry or, barring interchange, 

the railroad company moving a 

commercial railroad car in line haul 

service into the customs territory of the 

United States, is responsible for paying 

the AQI user fee. The AQI user fee for 

each arrival of a loaded railroad car is 

shown in the following table. If the AQI 

user fee is prepaid for all arrivals of a 

commercial railroad car during a 

calendar year, the AQI user fee is an 

amount 20 times the AQI user fee for 

each arrival.

Effective dates Amount 

January 1, 2005, through September 30, 2005 .................... $7.50 

October 1, 2005, through September 30, 2006 .................... 7.50 

October 1, 2006, through September 30, 2007 .................... 7.75 

October 1, 2007, through September 30, 2008 .................... 7.75 

October 1, 2008, through September 30, 2009 .................... 7.75 

October 1, 2009, through September 30, 2010 .................... 7.75 

(2) The following categories of 

commercial railroad cars are exempt 

from paying an AQI user fee: 

(i) Commercial railroad cars entering 

the customs territory of the United 

States from Canada; 

(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. 

(i) Railroad companies may, at their 

option, prepay the AQI user fee for each 

commercial railroad car for a calendar 

year. This payment must be remitted in 

accordance with paragraph (d)(5) of this 

section. 

(ii) No credit toward the calendar year 

AQI user fee will be given for AQI user 

fees paid for individual arrivals. 

(4) Statement procedures. The 

Association of American Railroads 

(AAR), and the National Railroad 

Passenger Corporation (AMTRAK), shall 

file monthly statements with the U.S. 

Bank, United States Department of 

Agriculture (USDA), APHIS, AQI, P.O. 

Box 952181, St. Louis, MO 63195–2181, 

within 60 days after the end of each 

calendar month. Each statement shall 

indicate: 

(i) The number of loaded commercial 

railroad cars entering the customs 

territory of the United States from 

Mexico during the relevant period; 

(ii) The number of those commercial 

railroad cars pulled by each railroad 

company; and 

(iii) The total monthly AQI user fee 

due from each railroad company. 

(5) Remittance procedures. Individual 

railroad companies shall remit the AQI 

user fees calculated by AAR, and 

AMTRAK shall remit the AQI user fees 

it has calculated, within 60 days after 

the end of each calendar month in 

which commercial railroad cars entered 

the customs territory of the United 

States. AQI user fees, together with 

monthly statements, must be remitted to 

the U.S. Bank, United States Department 

of Agriculture (USDA), APHIS, AQI, 

P.O. Box 952181, St. Louis, MO 63195–

2181. 

(6) Compliance. AAR, AMTRAK, and 

each railroad company responsible for 

making AQI user fee payments must 

allow APHIS personnel to verify the 

accuracy of AQI user fees collected and 

remitted and otherwise determine 

compliance with 21 U.S.C. 136a and 

this paragraph. The AAR, AMTRAK, 

and each railroad company responsible 

for making AQI user fee payments must 

advise the U.S. Bank, United States 

Department of Agriculture (USDA), 

APHIS, AQI, P.O. Box 952181, St. Louis, 

MO 63195–2181, of the name, address, 

and telephone number of a responsible 

officer who is authorized to verify AQI 

user fee calculations, collections, and 

remittances, as well as any changes in 

the identifying information submitted. 

(e) Fee for inspection of commercial 

aircraft. (1) 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 Bureau of Customs and 

Border Protection ‘‘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 § 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 is responsible for paying 

the AQI user fee. The AQI user fee for 

each arrival is shown in the following 

table:

Effective dates Amount 

January 1, 2005, through September 30, 2005 .................... $70.00 

October 1, 2005, through September 30, 2006 .................... 70.25 

October 1, 2006, through September 30, 2007 .................... 70.50 

October 1, 2007, through September 30, 2008 .................... 70.50 

October 1, 2008, through September 30, 2009 .................... 70.75 

October 1, 2009, through September 30, 2010 .................... 70.75 

(2) The following categories of 

commercial aircraft are exempt from 

paying an AQI user fee: 

Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 71681

(i) Any aircraft moving solely between 

the United States and Canada; 

(ii) Any aircraft used exclusively in 

the governmental services of the United 

States or a foreign government, 

including any Agency or political 

subdivision of the United States or a 

foreign government, as long as the 

aircraft is not carrying persons or 

merchandise for commercial purposes; 

(iii) Any aircraft making an 

emergency or forced landing when the 

original destination of the aircraft was a 

foreign port; 

(iv) Any passenger aircraft with 64 or 

fewer seats, which is not carrying the 

following cargo: Fresh fruits, fresh 

vegetables, plants, unprocessed plant 

products, cotton or covers, sugarcane, or 

fresh or processed meats; and which 

does not offer meal service other than 

beverages and prepackaged snacks that 

do not contain meats derived from 

ruminants, swine, or poultry or fresh 

fruits and fresh vegetables. Aircraft 

exempt from the user fee under this 

paragraph would still be subject to the 

garbage handling requirements found in 

§ 330.400 of this chapter and 9 CFR 

94.5; 

(v) Any aircraft moving from the 

United States Virgin Islands to Puerto 

Rico; and 

(vi) Any aircraft making an intransit 

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 the Bureau of Customs and 

Border Protection, 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 statement 

procedures. (i) Each carrier must remit 

the appropriate fees to the U.S. Bank, 

United States Department of Agriculture 

(USDA), APHIS, AQI, P.O. Box 952181, 

St. Louis, MO 63195–2181, for receipt 

no later than 31 days after the close of 

the calendar quarter in which the 

aircraft arrivals occurred. 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). 

(ii) The remitter must mail with the 

remittance a written statement to the 

U.S. Bank, United States Department of 

Agriculture (USDA), APHIS, AQI, P.O. 

Box 952181, St. Louis, MO 63195–2181. 

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; 

(D) Ports of entry at which inspections 

occurred; 

(E) Number of arrivals at each port; 

and 

(F) Amount remitted. 

(iii) 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.’’

(4) Compliance. Each carrier subject 

to this section must allow APHIS 

personnel to verify the accuracy of the 

AQI user fees remitted and to otherwise 

determine compliance with 21 U.S.C. 

136a and this paragraph. Each carrier 

must advise the U.S. Bank, United 

States Department of Agriculture 

(USDA), APHIS, AQI, P.O. Box 952181, 

St. Louis, MO 63195–2181, of the name, 

address, and telephone number of a 

responsible officer who is authorized to 

verify AQI user fee calculations and 

remittances, as well as any changes in 

the identifying information submitted. 

(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) Fee for inspection of international 

passengers. (1) Except as specified in 

paragraph (f)(2) of this section, each 

passenger aboard a commercial aircraft 

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 AQI user fee for each arrival is 

shown in the following table:

Effective dates1 Amount 

January 1, 2005, through September 30, 2005 .................... $4.95 

October 1, 2005, through September 30, 2006 .................... 5.00 

October 1, 2006, through September 30, 2007 .................... 5.00 

October 1, 2007, through September 30, 2008 .................... 5.00 

October 1, 2008, through September 30, 2009 .................... 5.00 

Effective dates1 Amount 

October 1, 2009, through September 30, 2010 .................... 5.00 

1Persons who issue international airline 

tickets or travel documents are responsible for 

collecting the AQI international airline passenger user fee from ticket purchasers. 

Issuers must collect the fee applicable at the 

time tickets are sold. In the event that ticket 

sellers do not collect the AQI user fee when 

tickets are sold, the air carrier must collect the 

user fee from the passenger upon departure. 

Carriers must collect the fee applicable at the 

time of departure from the traveler. 

(2) The following categories of 

passengers are exempt from paying an 

AQI user fee: 

(i) Passengers arriving from Canada 

whose journey originates in Canada; 

(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 United 

States diplomats, who can show that 

their names appear on the accreditation 

listing maintained by the United States 

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 other 

than Canada; 

(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 United States 

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 

United States Virgin Islands to Puerto 

Rico.

(3) 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 

71682 Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 

2 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.

3Support 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.

4Administrative costs are costs incurred as a 

direct result of collecting and monitoring Federal 

phytosanitary certificates. Administrative hours are 

States which originates in any location 

other than Canada; 

(ii) When through tickets or travel 

documents are issued in Canada 

indicating an arrival in the customs 

territory of the United States following 

a stopover (layover) in a location other 

than Canada; and 

(iii) When passengers arrive in the 

customs territory of the United States in 

transit from a location other than 

Canada and are inspected by APHIS or 

Customs. 

(4) Collection of fees. (i) Any person 

who issues tickets or travel documents 

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 

paragraph (f) of this section shall be 

held in trust for the United States by the 

person collecting such fees, by any 

person holding such fees, or by the 

person who is ultimately responsible for 

remittance of such fees to APHIS. AQI 

user fees collected from international 

passengers shall be accounted for 

separately and shall be regarded as trust 

funds held by the person possessing 

such fees as agents, for the beneficial 

interest of the United States. All such 

user fees held by any person shall be 

property in which the person holds only 

a possessory interest and not an 

equitable interest. As compensation for 

collecting, handling, and remitting the 

AQI user fees for international 

passengers, the person holding such 

user fees shall be entitled to any interest 

or other investment return earned on the 

user fees between the time of collection 

and the time the user fees are due to be 

remitted to APHIS under this section. 

Nothing in this section shall affect 

APHIS’ right to collect interest for late 

remittance. 

(5) Remittance and statement 

procedures. (i) The carrier whose ticket 

stock or travel document reflects 

collection of the AQI user fee must 

remit the fee to the U.S. Bank, United 

States Department of Agriculture 

(USDA), APHIS, AQI, P.O. Box 952181, 

St. Louis, MO 63195–2181. The travel 

agent, United States-based tour 

wholesaler, or other entity, which issues 

its own non-carrier related ticket or 

travel document to a passenger who is 

subject to an AQI user fee under this 

part, must remit the fee to APHIS, 

unless by contract the carrier will remit 

the fee. 

(ii) AQI user fees must be remitted to 

the U.S. Bank, United States Department 

of Agriculture (USDA), APHIS, AQI, 

P.O. Box 952181, St. Louis, MO 63195–

2181, 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). 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.

(iii) The remitter must mail with the 

remittance a written statement to the 

U.S. Bank, United States Department of 

Agriculture (USDA), APHIS, AQI, P.O. 

Box 952181, St. Louis, MO 63195–2181. 

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.’’

(6) Carriers contracting with United 

States-based tour wholesalers are 

responsible for notifying the U.S. Bank, 

United States Department of Agriculture 

(USDA), APHIS, AQI, P.O. Box 952181, 

St. Louis, MO 63195–2181, of all flights 

contracted, the number of spaces 

contracted for, and the name, address, 

and taxpayer identification number of 

the United States-based tour wholesaler, 

within 31 days after the close of the 

calendar quarter in which such a flight 

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, United States-based tour 

wholesaler, or other entity subject to 

this section must allow APHIS 

personnel 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. 

Each carrier, travel agent, United Statesbased tour wholesaler, or other entity 

must advise the U.S. Bank, United 

States Department of Agriculture 

(USDA), APHIS, AQI, P.O. Box 952181, 

St. Louis, MO 63195–2181, of the name, 

address, and telephone number of a 

responsible officer who is authorized to 

verify AQI user fee calculations, 

collections, and remittances, as well as 

any changes in the identifying 

information submitted. 

(8) Limitation on charges. Airlines 

will not be charged reimbursable 

overtime for passenger inspection 

services required for any aircraft on 

which a passenger arrived who has paid 

the airline passenger AQI user fee for 

that flight. 

(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, or, in the case of a 

block of certificates, at the time the 

certificates are given to the shipper. 

(2) There is no AQI user fee for a 

certificate issued by a designated State 

or county inspector. 

(3) If a designated State inspector 

issues a certificate, the State where the 

certificate is issued may charge for 

inspection services provided in that 

State. 

(4) 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-percertificate’’ fee. The State must: 

(A) Estimate the annual number of 

certificates to be issued;

(B) Determine the total cost of issuing 

certificates by adding together delivery,2

support,3 and administrative 4 costs; and

Federal Register / Vol. 69, No. 236 / Thursday, December 9, 2004 / Rules and Regulations 71683

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,2 support,3 and 

administrative 4 hours; 

(B) Determine the total cost of issuing 

certificates by adding together delivery, 

support, 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. 

(5) The AQI user fees are: 

(i)(A) $50 for a certificate for a 

commercial shipment; or 

(B) $23 for a certificate for a low-value 

commercial shipment, if the following 

criteria are met: 

(1) The items being shipped are 

identical to those identified on the 

phytosanitary certificate; 

(2) The shipment is accompanied by 

an invoice which states that the items 

being shipped are worth less than 

$1,250; and 

(3) The shipper requests that user fee 

charged be based on the low value of the 

shipment; 

(ii) $23 for a certificate for a 

noncommercial shipment; 

(iii)(A) $50 for a certificate for 

reexport of a commercial shipment; or 

(B) $23 for a certificate for reexport of 

a low value commercial shipment, if the 

following criteria are met: 

(1) The items being shipped are 

identical to those identified on the 

phytosanitary certificate; 

(2) The shipment is accompanied by 

an invoice which states that the items 

being shipped are worth less than 

$1,250; and 

(3) The shipper requests that the user 

fee charged be based on the low value 

of the shipment; 

(iv) $50 for a processed product 

certificate for a commercial shipment; 

and 

(v) $7 for reissuing any certificate or 

certificate for reexport. 

(h) Refunds of AQI user fees. (1) A 

shipper who pays for a block of 

certificates to cover commercial 

shipments may obtain a refund or a 

credit against future AQI user fees under 

the following circumstances:

(i) If a certificate from the block is 

voided; 

(ii) If a certificate from the block is 

returned unused; 

(iii) If the shipper pays for inspection 

outside of normal business hours (8 a.m. 

to 4:30 p.m.) under § 354.1 of this part. 

(iv) If a certificate from the block is 

used for a noncommercial shipment; or 

(v) If a certificate from the block is 

used to reissue another certificate. 

(2) The amount of any refund or credit 

will be the amount overcharged, less $7 

to cover APHIS administrative 

expenses. 

(i) Payment methods. For payment of 

any of the AQI user fees required in 

paragraph (g) of this section, 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. 

(j) The person for whom the service is 

provided and the person requesting the 

service are jointly and severally liable 

for payment of user fees for any import 

or entry services listed below, of $56 per 

hour, or $14 per quarter hour, with a 

minimum fee of $14 for each employee 

required to perform the following 

services. If the services must be 

conducted on a Sunday or holiday or at 

any other time outside the normal tour 

of duty of the employee, then the 

premium user fee rate as listed below 

applies, as well as the 2-hour minimum 

charge and a commuted traveltime 

period required by § 354.1(a)(2). If the 

services requested are performed on a 

Sunday, the hourly user fee rate will be 

$74, or $18.50 per quarter hour, with a 

$18.50 minimum. If the services 

requested are performed on a day other 

than Sunday outside the normal tour of 

duty of the employee providing the 

service, the hourly user fee rate will be 

$65, or $16.25 per quarter hour, with a 

$16.25 minimum: 

(1) Conducting inspections, on vessels 

or in storage areas, of solid wood 

packing material or cargo when a 

shipment arrives without a certificate or 

exporter statement required under 

§ 319.40–5(g) or § 319.40–5(h) of this 

chapter, or with an incomplete 

certificate or exporter statement; and 

(2) Supervising the separation of cargo 

from solid wood packing material 

denied entry under this subpart and the 

destruction or reexportation of the solid 

wood packing material. (Approved by 

the Office of Management and Budget 

under control numbers 1651–0019, 

0579–0094, or 0579–0052).

Done in Washington, DC, this 6th day of 

December 2004. 

Bill Hawks, 

Under Secretary for Marketing and Regulatory 

Programs.

[FR Doc. 04–27053 Filed 12–8–04; 8:45 am] 

BILLING CODE 3410–34–P