[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Rules and Regulations]
[Pages 51848-51868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20840]



[[Page 51847]]

Vol. 76

Thursday,

No. 160

August 18, 2011

Part III





Department of Homeland Security





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Transportation Security Administration





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49 CFR Parts 1515, 1520, 1522 et al.





Air Cargo Screening; Final Rule

Federal Register / Vol. 76, No. 160 / Thursday, August 18, 2011 / 
Rules and Regulations

[[Page 51848]]


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DEPARTMENT OF HOMELAND SECURITY

Transportation Security Administration

49 CFR Parts 1515, 1520, 1522, 1540, 1544, 1546, 1548, and 1549

[Docket No. TSA-2009-0018; Amendment Nos. 1515-2, 1520-9, 1522-1, 1540-
11, 1544-10, 1546-6, 1548-6, 1549-1]
RIN 1652-AA64


Air Cargo Screening

AGENCY: Transportation Security Administration, DHS.

ACTION: Final rule; request for comments.

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SUMMARY: This rule amends two provisions of the Air Cargo Screening 
Interim Final Rule (IFR) issued on September 16, 2009, and responds to 
public comments on the IFR. The IFR codified a statutory requirement of 
the Implementing Recommendations of the 9/11 Commission Act of 2007 
that the Transportation Security Administration (TSA) establish a 
system to screen 100 percent of cargo transported on passenger aircraft 
not later than August 3, 2010. It established the Certified Cargo 
Screening Program, in which TSA certifies shippers, indirect air 
carriers, and other entities as Certified Cargo Screening Facilities 
(CCSFs) to screen cargo prior to transport on passenger aircraft. Under 
the IFR, each CCSF applicant had to successfully undergo an assessment 
of their facility by a TSA-approved validation firm or by TSA. In 
response to public comment, this Final Rule removes all validation firm 
and validator provisions, so that TSA will continue to conduct 
assessments of the applicant's facility to determine if certification 
is appropriate.
    The IFR also required that if an aircraft operator or foreign air 
carrier screens cargo off an airport, it must do so as a CCSF. The 
Final Rule deletes this requirement, as aircraft operators are already 
screening cargo on airport under a TSA-approved security program, and 
do not need a separate certification to screen cargo off airport.
    This rule also proposes a fee range for the processing of Security 
Threat Assessments, and seeks comment on the proposed fee range and the 
methodology used to develop the fee. TSA will announce the final fee in 
a future Federal Register notice.

DATES: Effective September 19, 2011.
    Comment Date: Comments must be received by September 19, 2011.

ADDRESSES: You may submit comments, identified by the TSA docket number 
to this rulemaking, to the Federal Docket Management System (FDMS), a 
government-wide, electronic docket management system, using any one of 
the following methods:
    Electronically: You may submit comments through the Federal 
eRulemaking portal at http://www.regulations.gov. Follow the online 
instructions for submitting comments.
    Mail, In Person, or Fax: Address, hand-deliver, or fax your written 
comments to the Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., West Building Ground 
Floor, Room W12-140, Washington, DC 20590-0001; Fax 202-493-2251. The 
Department of Transportation (DOT), which maintains and processes TSA's 
official regulatory dockets, will scan the submission and post it to 
FDMS.
    See SUPPLEMENTARY INFORMATION for format and other information 
about comment submissions.

FOR FURTHER INFORMATION CONTACT: For questions related to air cargo 
screening program: Tamika McCree, Manager, Air Cargo Stakeholder 
Relations, Air Cargo Security, TSA-28, Transportation Security 
Administration, 601 South 12th Street, Arlington, VA 20598-6028; 
telephone (571) 227-2632; facsimile (571) 227-1947; e-mail 
<a href="/cdn-cgi/l/email-protection#93d2fae1d0f2e1f4fcc0f0e1f6f6fdfafdf4d0fcfefef6fde7e0dad5c1d3f7fbe0bdf4fce5"><span class="__cf_email__" data-cfemail="f1b09883b29083969ea2928394949f989f96b29e9c9c949f8582b8b7a3b1959982df969e87">[email protected]</span></a>.
    For legal questions: Alice Crowe, Senior Counsel, Office of Chief 
Counsel, TSA-22, Transportation Security Administration, 601 South 12th 
Street, Arlington, VA 20598-6028; telephone (571) 227 -2652; facsimile 
(571) 227-1379; e-mail <a href="/cdn-cgi/l/email-protection#47262b2e242269243528302207232f3469202831"><span class="__cf_email__" data-cfemail="d8b9b4b1bbbdf6bbaab7afbd98bcb0abf6bfb7ae">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    In this final rule, TSA seeks prior public comment on our proposed 
fee to cover the cost of the STAs. To the maximum extent possible, DHS 
provides an opportunity for public comment on regulations issued 
without prior notice. Accordingly, TSA invites interested persons to 
participate in this rulemaking by submitting written comments, data, or 
views on the proposed fee for the STA. See ADDRESSES above for 
information on where to submit comments.
    With each comment, please identify the docket number at the 
beginning of your comments. TSA encourages commenters to provide their 
names and addresses. The most helpful comments reference a specific 
portion of the rulemaking, explain the reason for any recommended 
change, and include supporting data. You may submit comments and 
material electronically, in person, by mail, or fax as provided under 
ADDRESSES, but please submit your comments and material by only one 
means. If you submit comments by mail or delivery, submit them in an 
unbound format, no larger than 8.5 by 11 inches, suitable for copying 
and electronic filing.
    If you would like TSA to acknowledge receipt of comments submitted 
by mail, include with your comments a self-addressed, stamped postcard 
on which the docket number appears. We will stamp the date on the 
postcard and mail it to you.
    TSA will file in the public docket all comments received by TSA, 
except for comments containing confidential information and sensitive 
security information (SSI).\1\ TSA will consider all comments received 
on or before the closing date for comments and will consider comments 
filed late to the extent practicable. The docket is available for 
public inspection before and after the comment closing date.
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    \1\ ``Sensitive Security Information'' or ``SSI'' is information 
obtained or developed in the conduct of security activities, the 
disclosure of which would constitute an unwarranted invasion of 
privacy, reveal trade secrets or privileged or confidential 
information, or be detrimental to the security of transportation. 
The protection of SSI is governed by 49 CFR part 1520.
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Handling of Confidential or Proprietary Information and Sensitive 
Security Information (SSI) Submitted in Public Comments

    Do not submit comments that include trade secrets, confidential 
commercial or financial information, or SSI to the public regulatory 
docket. Please submit such comments separately from other comments on 
the rulemaking. Comments containing this type of information should be 
appropriately marked as containing such information and submitted by 
mail to the address listed in FOR FURTHER INFORMATION CONTACT section.
    Upon receipt of such comments, TSA will not place the comments in 
the public docket and will handle them in accordance with applicable 
safeguards and restrictions on access. TSA will hold documents 
containing SSI, confidential business information, or trade secrets in 
a separate file to which the public does not have access, and place a 
note in the public docket that TSA has received such materials from the 
commenter. If TSA determines, however, that portions of these comments 
may be made publicly available, TSA may include a redacted version of 
the comment in the public docket. If TSA receives a request to examine 
or copy information that is not

[[Page 51849]]

in the public docket, TSA will treat it as any other request under the 
Freedom of Information Act (FOIA) (5 U.S.C. 552) and the FOIA 
regulation of the Department of Homeland Security found in 6 CFR part 
5.

Reviewing Comments in the Docket

    Please be aware that anyone is able to search the electronic form 
of all comments received into any of our dockets by the name of the 
individual who submitted the comment (or signed the comment, if 
submitted on behalf of an association, business, labor union, etc.). 
You may review the applicable Privacy Act Statement published in the 
Federal Register on April 11, 2000 (65 FR 19477) and modified on 
January 17, 2008 (73 FR 3316).
    You may review TSA's electronic public docket on the Internet at 
http://www.regulations.gov. In addition, DOT's Docket Management 
Facility provides a physical facility, staff, equipment, and assistance 
to the public. To obtain assistance or to review comments in TSA's 
public docket, you may visit this facility between 9 a.m. to 5 p.m., 
Monday through Friday, excluding legal holidays, or call (202) 366-
9826. This docket operations facility is located in the West Building 
Ground Floor, Room W12-140 at 1200 New Jersey Avenue, SE., Washington, 
DC 20590.

Availability of Rulemaking Document

    You can get an electronic copy using the Internet by--
    (1) Searching the electronic Federal Docket Management System 
(FDMS) web page at http://www.regulations.gov;
    (2) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html; or
    (3) Visiting TSA's Security Regulations Web page at http://www.tsa.gov and accessing the link for ``Research Center'' at the top 
of the page.
    In addition, copies are available by writing or calling the 
individual in the FOR FURTHER INFORMATION CONTACT section. Make sure to 
identify the docket number of this rulemaking.

Small Entity Inquiries

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires TSA to comply with small entity requests for information 
and advice about compliance with statutes and regulations within TSA's 
jurisdiction. Any small entity that has a question regarding this 
document may contact the person listed in FOR FURTHER INFORMATION 
CONTACT. Persons can obtain further information regarding SBREFA on the 
Small Business Administration's web page at http://www.sba.gov/advo/laws/law_lib.html.

Abbreviations and Terms Used in This Document

ACDMS Air Cargo Data Management System
CBP U.S. Customs and Border Protection
CCSF Certified Cargo Screening Facility
CCSP Certified Cargo Screening Program
CFR Code of Federal Regulations
CHRC Criminal History Records Check
DHS Department of Homeland Security
DOE Department of Energy
FSD Federal Security Director
IAC Indirect Air Carrier
IED Improvised Explosive Device
SIDA Security Identification Display Area
SSI Sensitive Security Information
STA Security Threat Assessment
S&T DHS Directorate of Science & Technology
STP Screening Technology Pilot
TSA Transportation Security Administration

Outline of Final Rule

I. Background
II. Summary of the Final Rule
III. Disposition of Comments
IV. Section-by-Section Analysis of Changes
V. Proposed Fee for Security Threat Assessments
VI. Paperwork Reduction Act
VII. Economic Impact Analysis
VIII. Executive Order 13132, Federalism
IX. Environmental Analysis
X. Energy Impact Analysis

I. Background

    Sec. 1602 of the Implementing the Recommendations of the 9/11 
Commission Act of 2007 (Pub. L. 110-53, 121 Stat. 266, 478, Aug. 3, 
2007) (9/11 Act), which amended 49 U.S.C. 44901(g)(1), provides, in 
pertinent part:

    Not later than 3 years after the date of enactment of the [9/11 
Act], the Secretary of Homeland Security shall establish a system to 
screen 100 percent of cargo transported on passenger aircraft 
operated by an air carrier or foreign air carrier in air 
transportation or intrastate air transportation to ensure the 
security of all such passenger aircraft carrying cargo.

    As amended by the 9/11 Act, 49 U.S.C. 44901(g)(2) provides that the 
system used to screen cargo on passenger aircraft shall provide a level 
of security ``commensurate with the level of security for the screening 
of passenger checked baggage,'' and directs that one hundred percent of 
such cargo must be screened not later than August 3, 2010.

Summary of Interim Final Rule

    Section 44901(g)(3)(B) explicitly authorizes TSA to issue an 
interim final rule to implement the requirements. On September 16, 
2009, TSA issued the Air Cargo Screening IFR implementing these 9/11 
Act requirements, and sought comments on the provisions contained in 
the IFR.\2\ Section 44901(g)(3)(B)(i) of the 9/11 Act requires TSA to 
issue a final rule not later than one year after the effective date of 
the IFR, or by November, 16, 2010. TSA was unable to meet the November 
16, 2010, deadline due to changes that had to be made to the Final 
Rule. Data from industry indicates that industry met the August 3, 
2010, deadline for domestically up lifted cargo only. Neither the IFR 
nor the Final Rule apply to international inbound cargo.
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    \2\ 74 FR 47672. The IFR provides detailed information on TSA's 
reasoning behind the regulatory provisions for the CCSP. For further 
information refer to the IFR.
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Requirements of the IFR

    The IFR established the Certified Cargo Screening Program (CCSP), a 
program to certify shippers, indirect air carriers (IAC), and other 
entities located in the United States to screen cargo prior to 
tendering it to aircraft operators for transport on passenger 
aircraft.\3\ The CCSP requires certified cargo screening facility 
(CCSF) personnel to successfully undergo a TSA conducted security 
threat assessment (STA) \4\ and submit to an evaluation of its facility 
by a TSA-approved validator or TSA.\5\ Once certified, the CCSF must, 
among other responsibilities:
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    \3\ 74 FR 47686 and 47706.
    \4\ 49 CFR 1549.111.
    \5\ 49 CFR 1549.7.
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    <bullet> Implement a TSA-approved standard security program.\6\
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    \6\ 49 CFR 1549.5.
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    <bullet> Ensure that key personnel with unescorted access to 
screened cargo undergo an STA \7\ including (1) Each employee and 
authorized representative who screens cargo or has unescorted access to 
screened cargo, and (2) each security coordinator and alternate, senior 
manager of the facility, and other individual who implements the cargo 
screening program.
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    \7\ 49 CFR 1540.203.
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    <bullet> Adhere to strict physical and access control measures for 
the storage, handing, and screening of cargo.
    <bullet> Screen cargo using TSA-approved methods.
    <bullet> Initiate chain of custody measures to ensure the security 
of the cargo from the time the CCSF screens the cargo until it is 
loaded on passenger aircraft.\8\
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    \8\ 49 CFR 1549.101(d).
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    <bullet> Appoint security coordinators at the corporate and 
facility levels and alternates to be available 24 hours per day, 7 days 
per week.

[[Page 51850]]

    <bullet> Apply for recertification, including a new examination by 
TSA or a TSA-approved validator, every 36 months.
    The IFR further stated that aircraft operators that wish to screen 
cargo off-airport must become a CCSF, and adopt and implement a CCSF 
security program for that purpose.\9\ Additionally, the IFR established 
procedures under which firms may apply for TSA's approval to conduct 
validation assessments of CCSF facilities.\10\ TSA believed these 
procedures would help quickly process many applications for CCSPs in a 
short amount of time.
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    \9\ 49 CFR 1549.5.
    \10\ 49 CFR part 1522.
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    The IFR also amended the threat assessment provisions that 
currently exist in 49 CFR part 1540, subpart C, for individuals who 
work in the air cargo sector to enhance TSA's ability to effectively 
conduct STAs.
    Finally, the IFR explained the methodology by which TSA would 
calculate a fee that TSA would charge for conducting STAs and presented 
an expected fee range for these STAs. TSA invited comment on the amount 
of the fee and the methodology used to calculate the fee but did not 
establish a fee. The IFR explained that TSA would specify the final fee 
amount in a separate notice in the Federal Register.\11\
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    \11\ 74 FR 47683 and 47684.
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II. Summary of the Final Rule

    In response to comments on the IFR, TSA decided to remove two major 
requirements, explained below, concerning validation firms and 
certification of aircraft operators. This final rule also makes a few 
clarifications and other minor revisions such as typographical errors. 
Further explanations of these changes can be found in section IV of 
this rule, in the Section-by-Section Analysis of Changes.
    TSA deleted part 1522 regarding validation firms and validators as 
we do not believe they are needed. TSA will continue to conduct all 
assessments of the facilities applying to become CCSFs because TSA has 
the capacity to review and certify all CCSF applicants itself.
    In addition, this final rule deletes the IFR requirement that an 
aircraft operator must become certified as a CCSF in order to screen 
air cargo off-airport. As explained in Section III. (Disposition of 
Comments) of this preamble, TSA will continue to update the security 
programs through the security program amendment process as described in 
49 CFR 1544.105(c) and 156.105(c) for aircraft operators and foreign 
air carriers to ensure that the same level of security applies to cargo 
that those entities and CCSFs screen. Because aircraft operators will 
need to meet the same substantive requirements as CSSFs, they do not 
need to be certified under the CCSP to screen cargo off airport.

III. Disposition of Comments

    TSA received approximately 40 comments from trade associations, 
aircraft operators, including a few from individuals. The issues raised 
in these comments are discussed below.

TSA Screening at Airports

    Comment: Several commenters stated that TSA, not private industry 
through the CCSP, should conduct screening of cargo to be transported 
on passenger aircraft. These commenters stated that TSA should use 
existing statutory authority to establish TSA-operated screening 
operations at airports. One commenter stated that TSA should screen all 
cargo transported on passenger aircraft because Congress created TSA to 
replace screening by third parties. These commenters believe that TSA 
screening is the only way to screen 100 percent of cargo on passenger 
aircraft without impeding the flow of commerce. Some commenters 
suggested that the CCSP must be a complement to, but not a substitute 
for, a Federal air cargo screening program operated by TSA at all 
domestic airports.
    Other commenters favored the CCSP. The International Air Cargo 
Association (TIACA) commented that either federalization or airline-
only screening would unduly crowd screening onto airport grounds, 
potentially creating significant bottlenecks by imposing a one-size-
fits-all approach to air cargo screening. TIACA commented that the 
flexibility allowed under the CCSP is a better fit with the diverse 
needs of the air cargo supply chain.
    TSA Response: The 9/11 Act required the Secretary of Homeland 
Security to establish a system to screen 100 percent of cargo loaded in 
the United States on passenger aircraft. TSA has determined the most 
appropriate model to accomplish this mandate is for TSA to establish 
screening standards that allows airlines, shippers, and IACs and other 
entities to perform the necessary screening. The CCSP program satisfies 
the statutory directive. The 9/11 Act, 49 U.S.C. 44901(g)(1), requires 
TSA to ``* * * establish a system * * *'' for screening 100 percent of 
air cargo, and does not require TSA to conduct the screening. The 9/11 
Act provides that screening includes ``* * * a program to certify the 
security methods used by shippers * * *'' and therefore, anticipates 
that an entity other than TSA may conduct the screening to TSA 
standards. 49 U.S.C. 44901(g)(5).
    TSA believes that if TSA screened cargo at airports, the screening 
process would very likely impede the flow of commerce as described in 
the TIACA comment above. It would create many of the same problems that 
would occur if aircraft operators screened 100 percent of cargo. There 
is insufficient space at airports to screen the 7.6 million pounds of 
cargo transported on passenger aircraft daily. TSA believes airport 
screening would be time-consuming. A high volume of cargo reaches the 
airports on skids or loaded into unit load devices, which TSA would 
have to break down and screen, a process that could lead to congestion 
at the cargo screening locations.
    A fundamental principle of the CCSP is to provide stakeholders with 
additional options for screening air cargo. Participation in the CCSP 
allows shippers to move screening away from the airport to avoid the 
bottlenecks that TSA expects would occur if all cargo were screened 
there. The CCSP also allows industry participants to conduct screening 
at stages earlier within the cargo supply chain and off-airport. Thus, 
the CCSP gives industry control to schedule screening of the cargo at 
the most financially sensible point in their business process while 
still meeting all security requirements. Screening conducted by the 
industry permits IACs and shippers to tender screened cargo to aircraft 
operators so that it can be transported immediately on passenger 
aircraft, thereby avoiding the backlog that would result from screening 
solely by TSA or aircraft operators on-airport. TSA is confident that 
the CCSP will achieve the security benefits that Congress sought in the 
statutory mandate without causing unnecessary delays.
    TSA believes the CCSP, supplemented by TSA screening at Category 
II-IV airports \12\ and other measures TSA has already taken (such as 
requiring 100 percent screening of cargo transported on narrow-body 
aircraft), combined with cargo screened directly by aircraft operators, 
has achieved the 100 percent screening requirement. TSA believes that 
the CCSP concept provides the greatest

[[Page 51851]]

degree of flexibility and efficiency and should be the centerpiece of 
the current air cargo screening program. TSA will continue to screen 
almost all cargo received at Category II-IV airports.\13\ Cargo 
screened at these locations involves relatively lower volumes and 
smaller pieces, which are conducive to screening by existing baggage 
equipment. TSA will also continue to screen any cargo delivered to the 
ticket counter for shipment, known as a counter-to-counter express 
shipment.
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    \12\ TSA classifies the over 400 commercial airports in the 
United States into one of five airport security categories (I, II, 
III, IV, and X) based on various factors, such as the total number 
of take-offs and landings annually, the extent to which passengers 
are screened at the airport, and other special security 
considerations. In general, Category X airports have the largest 
number of passenger boardings and Category IV airports have the 
smallest.
    \13\ A Category I airport is an airport where screening is 
performed pursuant to TSA regulations and the number of annual 
enplanements are 1 million or more. A Category X airport is an 
airport where screening is performed pursuant to TSA regulations, 
the number of annual enplanements is 5 million or more, and the 
number of international enplanements is 1 million or more.
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    Comment: The U.S. Chamber of Commerce recommended that TSA expand 
the use of TSA-certified explosive-detection canines to screen large 
air cargo consolidations.
    TSA Response: TSA will continue to evaluate the need for additional 
canine teams. In the future, TSA is also considering the use of TSA-
approved canine teams owned by regulated parties to screen air cargo.

Impact of the CCSP on Small and Mid-Sized Companies

    Comment: Some commenters expressed the view that small and mid-
sized freight forwarders do not have the financial resources to 
participate in the CCSP, and that the CCSP will put them out of 
business, or impose significant economic burdens. One commenter cited 
the costs that a CCSF would incur for maintaining a compliant facility 
and ensuring adequate employee training as placing a burden on the 
companies.
    TSA Response: TSA designed the CCSP to give small- and medium-sized 
companies several options to avoid unnecessary costs while achieving 
the security benefits of the program. The CCSP is a voluntary program 
intended to give industry the flexibility to respond to new security 
requirements in the 9/11 Act. Participation in CCSP does not require a 
business to purchase any costly screening equipment, because TSA 
provides multiple options to participants. For example, entities that 
wish to join the CCSP may choose to screen by conducting a physical 
search of the cargo as they pack it for shipment. Physical search may 
be more cost effective for companies that would have to screen smaller 
volumes of cargo and for any company that is conducting the screening 
as they pack the cargo for shipment, as many CCSFs do. A physical 
search is likely to satisfy the screening requirement of the 9/11 Act 
at a much lower cost for such companies than purchasing screening 
equipment.
    Moreover, a small- or mid-sized freight forwarder has several 
options for getting its cargo screened that do not require 
participation in the CCSP. They may choose to have their cargo screened 
by a CCSF IAC, a CCSF independent cargo screening facility (ICSF), or 
an aircraft operator, if that is more cost effective than participating 
in the CCSP.
    We believe that the most viable option for many small to medium 
shippers and IACs who do not wish to join the CCSP may be to have their 
cargo screened by ICSFs located away from the airport. This fee-based 
solution provides the benefit of screening away from the potential 
congestion and delay at the airport, without necessitating an 
investment in facilities, training, or screening equipment. TSA has 
published a list of all CCSFs IACs and ICSFs, as well as other IACs 
authorized to transport screened cargo for CCSF shippers. See the 
``Certified Cargo Screening Locations'' section at http://www.tsa.gov/what_we_do/layers/aircargo/certified_screening.shtm.
    Comment: The House Committee on Homeland Security requested that 
TSA consider expanding Screening Technology Pilot (STP) locations and 
on-airport screening options to provide stakeholders, particularly 
small businesses, with screening options that do not involve the 
purchase of costly screening equipment.
    The Committee also recommended that TSA find a way to incorporate 
grants, tax incentives, low-interest loans, or innovative financing 
measures into the CCSP.
    TSA Response: TSA has attempted to mitigate the impacts of the new 
air cargo program on small businesses by offering options, described in 
the TSA Response immediately above, that allow small businesses to 
choose how best to get their cargo screened.
    The STP, a Congressionally-funded pilot program designed to test 
screening technology, was a useful program that authorized TSA to 
reimburse participants for a portion of the cost of acquiring screening 
technology. At this time, the funding has been exhausted through 
reimbursement to companies that participate in the CCSP. The 
reimbursement did not include the cost of labor, training, consumables, 
maintenance, facility security, or any other costs associated with the 
CCSP. Therefore, it may not be the best option for small businesses. At 
this time, TSA has no other program to provide financial assistance for 
air cargo screening technology.

Validations by Independent Validation Firms

    Comment: TSA received several significant comments on the 
validation firm and validator requirements of the IFR. Some commenters 
stated that TSA, not private entities, should perform the validations 
because they view the function as ``inherently governmental.'' Other 
commenters believed that TSA should bear the cost of the validation or 
set a fee for the service. Several commenters were concerned that there 
is an inherent conflict of interest between the facility and the 
validator, because the facility would pay the validator to conduct the 
assessment.
    TSA Response: While TSA disagrees that the validation process set 
forth in this rule requires industry to perform ``inherently 
governmental'' functions, TSA has decided that it does not need 
independent validators to perform assessments of CCSF applicants. TSA 
is removing the validation firms and validators process in part 1522 
because there were fewer CCSF applicants than TSA expected, and TSA is 
capable of processing the applications itself. The IFR, published in 
November 2009, included this feature based on a similar validation 
program successful in the United Kingdom and a concern that TSA lacked 
the capacity to quickly evaluate and certify the 15,000 applications 
TSA estimated it would receive. The actual number of CCSF applications, 
however, is much lower than the estimate. To date, TSA has certified 
over 1,000 CCSFs, and is able to process the new applications without 
the support of validation firms. These certified locations are already 
screening a large volume of cargo destined for transport on passenger 
aircraft. Further, we believe that the industry has achieved 100 
percent air cargo screening for domestic uplift as of the beginning of 
August 2010. While we may see additional CCSF applicants as shippers 
decide they want to screen their own cargo rather than risking the 
cargo being opened during screening downstream, TSA has determined that 
it can handle the future facility assessment workload without undue 
delay.
    Under the final rule, applicants for the CCSP will not have to pay 
a fee to independent validators, thereby reducing the cost of the CCSP. 
Approximately $65.9 million in costs, discounted at 7 percent, over the 
10-year period of the rulemaking were removed from the IFR to the FR as 
a result of the elimination of the requirement for TSA-approved 
validation firms (TAVFs). Discounted at seven percent, the following 
are the

[[Page 51852]]

specific cost reductions to the respective impacted entities: $11.7 
million for TAVFs, $54.0 million for CCSFs, and $0.2 million for TSA. 
This reduction in the cost of CCSP participation should be particularly 
helpful to the small- and mid-sized companies concerned that the cost 
of joining the CCSP is too high.

Security Level of Cargo Screening Relative to the Security Level of 
Checked Baggage Screening

    Comment: One commenter argued that the CCSP does not provide a 
level of security that is commensurate with the level of security for 
passenger checked baggage, as required by the 9/11 Act. This commenter 
stated that ``commensurate'' means ``equal'' and that such a standard 
limits the discretion of TSA. According to this commenter, it would be 
much easier for a third party to compromise the chain of custody under 
the CCSP and tamper with screened cargo than it would be to infiltrate 
the chain of custody for passenger-checked baggage. For example, this 
commenter believes that tamper evident tape, which may be used as a 
chain of custody procedure under the CCSP, is inexpensive, and could 
easily be acquired or manufactured by a terrorist. This commenter also 
believes that even if CCSFs use more technologically advanced methods 
to protect the chain of custody, the length of time an item of cargo is 
stored after it is screened and prior to its delivery to an airport 
could provide third parties with time to break the chain of custody.
    TSA Response: Section 44901(g)(2) of the 9/11 Act establishes the 
parameters for meeting the 100 percent screening requirement--the 
system must provide a level of security for cargo commensurate with the 
level of security for checked baggage. ``Commensurate'' is not a 
statutorily defined term and must be understood to have its ordinary 
meaning of ``similar'' or ``analogous.'' ``Commensurate'' does not mean 
``identical.'' Notably, it is not the ``method of screening'' that must 
be commensurate with that of checked baggage, but the resulting ``level 
of security'' that must be commensurate. Physical examination is but 
one of many layers of security in place to protect air transportation. 
Therefore, it is the entire system that must ultimately produce 
security of cargo commensurate with that in place for checked baggage.
    Section 44901(g)(5) defines ``screening'' of air cargo placed on a 
passenger aircraft, and enumerates specific types of authorized 
screening, including x-ray systems, explosives detection systems (EDS), 
explosives trace detection, and explosives detection canine teams 
certified by TSA. In addition to the particular screening technologies 
and techniques listed, paragraph (g)(5) expressly provides that ``the 
Administrator may approve additional methods to ensure that the cargo 
does not pose a threat to transportation and to assist in meeting the 
requirements of this subsection.'' A system of screening that utilizes 
a combination of the screening methods planned for use in the CCSP will 
provide a level of security commensurate with that in place for checked 
baggage.
    The methods of screening, in some cases, may be the same used for 
checked baggage. By statute, however, checked baggage must be screened 
using EDS. 49 U.S.C. 44901(d). There is no parallel requirement for 
cargo in 49 U.S.C. 44901(g); rather, any one or more of a number of 
methods, including EDS, may be used. Also, like checked baggage 
security, the overall system will rely on layers of security to protect 
cargo from terrorist threats. Those layers will include STAs of 
individuals with unescorted access to cargo, physical protection of 
cargo once it is screened, and chain of custody practices to protect 
cargo from the time it is screened until it is tendered for transport 
on passenger aircraft.
    TSA believes that the chain of custody measures the CCSP requires 
will provide a high degree of security for air cargo throughout the 
supply chain. TSA has established multiple layers of security for cargo 
as it travels through the supply chain. For example, the CCSP security 
programs, which are sensitive security information (SSI), contain 
requirements, such as the use of tamper-evident tape on cargo that has 
been screened, and security measures for the trucks and other 
conveyances that transport screened cargo to the airport. The transport 
and handling measures established in the security programs for the CCSP 
are similar to those already in place for the ground transport of 
screened cargo that is in the custody of air carriers. Screened cargo 
in the supply chain is handled by secure facilities and modes of 
transport. Air cargo is not typically stored for any significant period 
once it has been tendered for transport, as the very nature of air 
cargo is to move materials as quickly as possible from shipper to 
consignee.

TSA's Funding for Implementing the CCSP

    Comment: The House Committee on Homeland Security expressed 
concerns regarding the level of TSA's investment in the CCSP and 
stressed the importance of TSA having appropriate resources to support 
its regulatory oversight role. Specifically, the Committee noted that 
TSA would need appropriate staffing levels for inspectors to be able to 
certify TSA-approved validation firms, and process STAs for workers at 
such firms and for CCSFs. The Committee suggested that TSA seek 
multiple means of additional funding to ensure that the 100 percent 
screening mandate is met, including seeking funds through the American 
Recovery and Reinvestment Act (ARRA). The Committee was also concerned 
that TSA would not have enough resources to certify enough CCSFs by the 
August 3, 2010, deadline.
    TSA Response: TSA has requested, and Congress has provided, 
sufficient resources to attain the 100 percent screening requirements 
set forth in the mandate. In addition, the FY 2010 Homeland Security 
Appropriations Act provided nearly $15 million above the 
Administration's request, including $3.45 million for additional air 
cargo inspectors and $9 million for technology development. TSA 
considered requesting ARRA funds, however, they are not available for 
TSA staffing for the CCSP; Congress restricted ARRA funds to the 
procurement and installation of checked baggage explosives detection 
systems and checkpoint explosives detection equipment.
    TSA concurs that it is important to have the resources to certify 
CCSFs quickly so as not to disrupt commerce. In the months before the 
requirement to screen 100 percent of air cargo became effective, TSA 
coordinated with the different applicants to ensure that facilities 
desiring to be CCSFs received an assessment as soon as the facility 
declared that it was ready.
    At the current pace of applications and certifications, TSA remains 
confident that it will be able to certify all current (and a 
significant number of additional) applicants that remain engaged and 
interested in proceeding. TSA believes it also has the capability to 
manage any short-term surges in activity. TSA will continue to monitor 
and evaluate resource and funding levels, and will request increases 
that may be required by the circumstances to carry out its oversight 
responsibilities. After evaluating the flow of applications and the 
certification process, TSA has determined that the usage of TSA-
approved validation firms is no longer required. Not having to certify 
validation firms, as well as no longer needing to process STA's for 
their workers, will provide TSA inspectors with some additional time 
for oversight and compliance activities related to CCSFs.

[[Page 51853]]

Outreach to Stakeholders

    Comment: The House Committee on Homeland Security urged TSA to 
conduct additional industry outreach to encourage participation in the 
CCSP. Suggestions for increasing CCSP participation through outreach 
included: Utilizing existing federal supply chain programs, such as the 
Customs-Trade Partnership Against Terrorism (C-TPAT) program to conduct 
industry outreach and training on a larger scale; obtaining statistical 
data on shippers from the U.S. Department of Commerce in order to 
perform targeted outreach; providing low-cost training and information 
sessions to small businesses; and increasing CCSP visibility to 
industry trade publications.
    TSA Response: To ensure the cargo and shipping industry are aware 
of the impact and requirements of the 100 percent screening 
requirement, TSA conducted outreach through multiple organizations, and 
we continue our longstanding relationships with associations whose 
members are impacted by the 9/11 Act. These organizations include 
members of airports, airlines, and freight forwarders. TSA continues 
its contact with associations such as the Air and Expedited Motor 
Carriers Association, Air Forwarders Association, Air Transport 
Association, American Association of Exporters and Importers, Cargo 
Airline Association, Council of Supply Chain Management Professionals, 
Express Delivery and Logistics Association, International Air Transport 
Association, Meridian One Consulting, National Association of 
Manufacturers, National Association of Wholesalers-Distributors, 
National Customs Brokers and Forwarders Association of America, and 
National Industrial Transportation League.
    In addition, TSA representatives speak at trade association 
conferences and participate in webinars and other public forums to 
share vital information regarding the CCSP. This on-going effort will 
continue throughout implementation of the CCSP.
    In coordinating outreach efforts, TSA estimates that approximately 
20 of the largest airports within the United States disproportionately 
account for most of the air cargo transported on passenger aircraft, 
and these locations are primarily the largest (Category I and Category 
X) airports. TSA continues its outreach efforts to these airports to 
ensure widespread understanding of the CCSP.

Applicability of CCSP to Cargo Loaded Outside the United States

    Comment: One association commended TSA for clarifying that the IFR 
does not apply to cargo that is loaded on passenger aircraft outside 
the United States. This commenter supports TSA's two-pronged approach 
of working with the International Civil Aviation Organization (ICAO) 
standards, and applying risk assessments for air cargo. The commenter 
suggested that TSA should leverage other Government programs, such as 
pertinent U.S. Customs and Border Protection (CBP) programs, and adopt 
best security practices currently in use in other countries for 
international inbound cargo.
    TSA Response: TSA is working closely with its foreign government 
counterparts to leverage existing air cargo security practices and to 
work towards compatibility across systems to the greatest extent 
possible. TSA has been working in both bilateral and multilateral 
forums to better understand the air cargo security regimes currently in 
place in other countries in order to promote best practices while also 
enhancing air cargo security systems, where necessary, in order to 
ensure commensurate levels of security from system to system. This is 
an ongoing effort and will take considerable time to review and analyze 
the information, and to coordinate and collaborate with our partners 
and industry stakeholders in the development of mutually recognizable 
systems. TSA is hopeful that with the continued cooperation of our 
international partners, this work will promote uniformity and 
recognition among countries. In addition, TSA has aligned its CCSP as 
closely as possible with CBP's C-TPAT program and continues to seek 
opportunities to create efficiencies where possible.

Aircraft Operators or Foreign Air Carriers as CCSFs

    Comment: The IFR required any air cargo screening facility that is 
off-airport, including one operated by an aircraft operator, to become 
a CCSF in order to screen cargo. Several commenters objected to this 
requirement, stating that this requires aircraft operators to comply 
with two separate security programs. They claimed that this was 
unnecessary. However, another commenter argued that exempting aircraft 
operators from the certification requirements would be inappropriate; 
it would produce an economic disadvantage for non-air carriers that 
currently operate as CCSFs. A trade association argued that this 
portion of the rule (Sec.  1544.205(g)(3)) should be removed only if 
there is: (1) No difference in security requirements between existing 
air carrier rules and CSSP requirements, and (2) there is no economic 
benefit favoring air carriers over non-air carriers.
    TSA Response: TSA has evaluated the issue of aircraft operators and 
foreign air carriers operating off-airport screening facilities, and is 
amending the IFR to eliminate the requirement for aircraft operators 
and foreign air carriers to become CCSFs in order to screen off-
airport. The security programs for aircraft operators have been and 
will continue to be amended to ensure that the same level of security 
involving screened cargo are equivalent to that for CCSFs. Because 
aircraft operators will need to meet the same substantive requirements 
as other CCSFs and CCSFs will no longer need to be validated by a third 
party, TSA does not believe that non-aircraft operators will be at a 
disadvantage.

Comparable Programs

    Comment: One commenter commended TSA for using some of the same 
chain of custody requirements for the CCSP as for the IAC Standard 
Security Program.
    TSA Response: In developing the CCSP, TSA tried to leverage the 
existing IAC program to the extent possible. Using the IAC program as a 
base, TSA strengthened those requirements for handling screened cargo 
in the CCSP.
    Comments: Several commenters expressed the view that compliance 
with other cargo security programs should substitute for compliance 
with TSA's regulation. Commenters listed a number of programs that they 
believed provide comparable security. A trade association expressed 
concern that many of its members have to comply with security 
provisions in other government programs, including DOD's National 
Industrial Security Program Operating Manual (NISPOM), International 
Traffic in Arms Regulations (ITAR), Export Administration Regulations 
(EAR), and C-TPAT. The commenter urged TSA and other agencies to 
consider recognizing security requirements in each other's programs as 
being commensurate with one another.
    Another association also recommended aligning C-TPAT and CCSP 
security requirements.
    TSA Response: TSA structured the CCSP to incorporate secure 
practices recommended by industry representatives, including many of 
the security measures and processes already used in programs such as C-
TPAT and

[[Page 51854]]

Transported Asset Protection Association, to the extent that these 
programs were compatible with the security and other requirements of 
the CCSP. Initially, TSA structured the CCSP to basically align with 
CBP's C-TPAT program following its structure in areas such as: Facility 
security, background checks, and basic chain of custody. However; there 
are key differences that should be noted: (1) The CCSP requires 
individuals to have a TSA security threat assessment, (2) individuals 
must be trained and implement screening procedures, (3) individuals 
must complete training specified by TSA, and (4) each entity is 
identified by site-specific methods rather than company-wide methods. 
Additionally, TSA structured the CCSP to incorporate industry security 
``best practice'' procedures recommended by industry representatives, 
including many of the security measures and processes already used in 
programs such as C-TPAT and Transported Asset Protection Association, 
(TAPA).
    The CCSP was established to enable a flexible solution for 
achieving the U.S. domestic 100 percent screening requirements. The air 
cargo security environment will continue to change and therefore the 
security practices, both established by TSA and practiced by industry 
or other government agencies will continue to change. TSA will maintain 
its close working relationship with key stakeholders and evaluate 
ongoing security measures and processes as the threat and risk to air 
cargo change. This may include incorporating additional measures and 
practices into the CCSP.

Certification for CCSPs

    Comment: One commenter recommended that TSA should allow companies 
to participate in the CCSP on a corporate basis, rather than have to 
enroll on a facility-by-facility basis. Under this scenario, TSA would 
certify a company as being CCSP-compliant through random inspections of 
a sampling of facilities per corporate entity.
    TSA Response: TSA is retaining the CCSP as a facility-based 
program. In order to achieve the level of security that is the goal of 
the CCSP, every participating facility must be considered individually 
because of its unique design and security configuration. While a 
corporation may direct the types and level of security at its 
facilities, the CCSF must account for the security of cargo at each 
location where cargo is screened, packed, or consolidated before the 
cargo is transferred to an aircraft operator. TSA must be confident 
that each location will meet TSA's CCSF standards.
    Comment: Several commenters feared that there may be a backlog of 
CCSF applications, and that it could take TSA over six months to 
certify a facility to become a CCSF. Commenters urged TSA to take 
measures to avoid disruptions and dislocations to the cargo shipping 
industry.
    TSA Response: To keep up with the CCSF applicant pool, TSA 
prioritizes, coordinates, and assesses any CCSF facility based on the 
readiness of the CCSF facility to meet the requirements of the security 
program. Some applicants can be certified sooner than others can. TSA 
has found that IACs applying for the program are often ready to 
implement the regulatory security requirements of the CCSP, and TSA can 
certify them quickly. TSA does not expect future delays in certifying 
CCSFs.

Security Threat Assessments

    Comment: One commenter stated that the CCSP's use of name-based 
STAs provides less security than criminal history records checks 
(CHRCs), which are required for individuals with access to passenger 
baggage. This commenter believed that STAs by themselves are not a 
robust enough vetting tool for the CCSP, and that all individuals who 
maintain unescorted access to air cargo should be vetted according to 
the same standard--a fingerprint-based CHRC, accompanied by an STA.
    TSA Response: TSA agrees that fingerprint-based CHRCs provide a 
greater degree of security than the STA requirement in this final rule, 
and that there should be congruency among the STA requirements for 
workers in functions that present similar security concerns, such as 
checked baggage screeners and cargo screeners. TSA is considering 
proposing a rulemaking that would provide for more consistent 
application of the CHRC requirement in STAs, including STAs for air 
cargo workers. Rather than addressing a CHRC requirement for air cargo 
workers on a program-specific basis in this final rule, TSA intends to 
address the CHRC requirement in the broader context of all TSA 
programs. TSA believes this approach will result in a more consistent, 
efficient, and equitable outcome on this issue.
    Comment: Several commenters objected to the five-year renewal 
requirement for STAs, stating their belief that it is overly burdensome 
to industry. Commenters believed that this is a particular issue for 
express consignment operators, who may find it difficult to segregate 
their employees who handle air cargo, and therefore would have to issue 
hundreds of thousands of STAs across their industry. These commenters 
stated that only a name change should trigger a new STA requirement. 
These commenters maintain that TSA tools, such as the IAC Management 
System (IACMS), provide the means necessary to continually check 
applicant names against watch lists, and should obviate the need for a 
reapplication process, except for cases where a person's name changes.
    TSA Response: The five-year renewal requirement is consistent with 
the duration of renewal requirements in other similar programs, such as 
national security clearances administered by the Office of Personnel 
Management, the CBP Free and Secure Trade Credential, the CBP Nexus 
credential, and TSA's Transportation Worker Identification Credential 
(TWIC). It is important for TSA to have current biographic information, 
such as address, to identify the individual and to administer the 
program effectively. For example, even after an individual successfully 
completes the initial STA, he or she is continually re-checked against 
various databases and watch lists; in the event of a subsequent match, 
TSA needs accurate information regarding the individual to distinguish 
similar names and to contact the individual with information about 
redress rights if subsequent vetting produces a match. If TSA renews 
the STA only as often as the individual's name changes, the other 
important biographic data may become stale. A system that only tracks 
the names of individuals, such as the IACMS, is therefore not an 
adequate substitute for periodic renewals.
    Comment: Several commenters expressed their belief that requiring 
an STA for certain individuals is duplicative and unnecessary. These 
parties submitted that individuals who have already completed an STA 
for airport credentialing purposes should not have to reapply for 
another STA under the CCSP. A third commenter approved of TSA's 
decision to accept Hazardous Materials Endorsements, TWICs, or Free and 
Secure Trade cards in lieu of redundant background checks for air cargo 
screening operations.
    TSA Response: TSA attempts to avoid unnecessary redundancy in STA 
requirements. Therefore, TSA regulations provide for the possibility of 
comparable STAs. If TSA determines that another STA conducted by TSA or 
by another government agency is comparable to the STA required by part 
1540, subpart C, individuals who have successfully completed such a

[[Page 51855]]

comparable STA are not required to undergo another STA under part 1540, 
subpart C. 49 CFR 1540.203(f).
    TSA has already determined that an STA conducted for purposes of 
security identification display area (SIDA) access at airports, that 
is, a CHRC conducted in accordance with 49 CFR 1542.209, 1544.229, or 
1544.230 that includes a name-based check conducted by TSA, is 
comparable to the check required under part 1540, subpart C. 49 CFR 
1540.203(h). For other security threat assessments conducted by a 
governmental agency, the commenter may request a determination that the 
other governmental STA is comparable to the STA required under part 
1540, subpart C. 49 CFR 1540.203(f), (g). If TSA grants the 
determination of comparability, the individuals who have successfully 
completed such a comparable STA are not required to undergo another STA 
under part 1540, subpart C. A background check or investigation 
conducted by a non-governmental agency would not qualify as a 
``comparable'' STA. Non-governmental agencies are not necessarily 
focused on the factors underlying a governmental STA, and are unlikely 
to have access to the depth and breadth of information available to a 
governmental agency. Therefore, TSA does not consider the STA required 
by part 1540, subpart C, to be duplicative with such non-governmental 
checks.

Screening of Animals

    Comment: The Association of Zoos and Aquariums expressed concern 
with screening procedures for live animals, and warned that opening 
containers with live animals inside could create potential hazards for 
the animals, handlers, and cargo personnel.
    TSA Response: TSA agrees that screening live animals provides 
special challenges. Aircraft operator and CCSF security programs, as 
required under 49 CFR parts 1544, 1546, and 1549, already provide 
procedures for screening live animals to ensure the safety of both the 
screeners and the animals.

Use of Non-Citizens To Perform Screening

    Comment: One commenter expressed concern that the air carriers' and 
freight forwarders' use of non-U.S. citizens to screen cargo violates 
International Traffic in Arms Regulations (ITAR) and Export 
Administration Regulations (EAR) for cargo that is designated as 
sensitive military technology.
    TSA Response: Section 1549.103(d) requires, in part, that each 
certified cargo screening facility must ensure that each individual who 
screens cargo or who supervises cargo screening is a citizen or 
national of the United States or an alien lawfully admitted for 
permanent residence. TSA sets minimum standards for the screening of 
cargo to be transported on passenger aircraft, which the CCSF must 
meet. However, if there are additional standards that apply, for 
example, for sensitive military technology, the CCSF must meet those 
additional requirements as well.

Time Concerns

    Comment: Several commenters expressed concern about the time it 
takes a CCSF to break down palletized shipments for screening.
    TSA Response: TSA agrees that having to break down and screen cargo 
consolidations at the airport could lead to significant delays. The 
CCSP allows entities to screen cargo before it is consolidated. TSA 
will continue to evaluate technologies that allow for bulk screening of 
some types of consolidated cargo. As such technologies become 
available, TSA may authorize their use.

Reporting Burden; Estimated Number of CCSFs

    Comment: Several commenters stated that TSA's estimate of 7,514 
entities seeking CCSP membership annually was an overestimate, but that 
TSA's estimate of annual cargo reporting burden of 293,037 hours was an 
underestimate. Furthermore, one air carrier argued that TSA's estimate 
that CCSFs will complete monthly cargo reports at an estimated time of 
one hour per week is an underestimate of the time required. The air 
carrier maintained that dealing with thousands of shipments and 
hundreds of thousands of pieces in a reporting period produces a data 
collection burden that will far surpass TSA's estimate.
    TSA Response: With respect to the estimate of 7,514 entities 
applying to the CCSP annually, TSA agrees that this was an overestimate 
and has revised the population estimate in the regulatory evaluation 
and fee model so that this final rule better reflects where the CCSP is 
today. The new estimate also takes into account recent information from 
shippers and IACs as to the types and sizes of entities that will most 
likely join the CCSP in the future.
    TSA's original estimate that it takes CCSFs one hour per week to 
report monthly cargo statistics was based on how long it might take a 
CCSF to record the data by hand on the form provided by TSA, resolve 
any identified discrepancies in that data, and transmit that 
information to TSA.
    Subsequently, TSA created the Cargo Reporting Tool (CRT) as a 
convenience for CCSFs, IACs, and aircraft operators, to allow these 
entities to more easily submit cargo screening data to TSA. A small 
group of air carriers, freight forwarders, and shippers was asked to 
beta test the CRT for approximately one year and the users indicated it 
took approximately one hour to enter information into the system. 
Accordingly, TSA believes that the one-hour time limit is a reasonable 
estimate, and is retaining this estimate for the final rule.
    In addition, TSA is developing an Air Cargo Data Management System 
(ACDMS) to facilitate compliance with this requirement and minimize the 
reporting burden on industry. The ACDMS will allow industry to submit 
certain information to a single point of entry online, which then will 
provide industry access to several systems and services.
    Comment: The House Committee on Homeland Security asked TSA to 
review the recordkeeping provisions to ascertain how to streamline 
these requirements while maintaining the appropriate regulatory 
oversight.
    TSA Response: TSA reviewed the recordkeeping requirements \14\ and 
has decided to maintain these recordkeeping requirements. These 
requirements are consistent with those required by other regulated 
entities within the air cargo supply chain (for example, air carriers, 
aircraft operators, and indirect air carriers). These requirements are 
necessary to ensure that regulated parties are in compliance with CCSF 
regulations. Additionally, TSA is developing ACDMS to assist industry 
in complying with this requirement. TSA expects the ACDMS to reduce the 
time required to comply with the recordkeeping requirements.
---------------------------------------------------------------------------

    \14\ Section 1549.105.
---------------------------------------------------------------------------

Issuance of IFR

    Comment: One commenter expressed the view that TSA's issuance of an 
IFR was inappropriate, and that TSA should have provided prior 
opportunity for public comment.
    TSA Response: The 9/11 Act required TSA to put in place an air 
cargo screening program within a short time period. Accordingly, 49 
U.S.C. 44901(g)(3)(A) provides that ``the Secretary of Homeland 
Security may issue an interim final rule * * * to implement this 
subsection without regard to the provision of chapter 5 of title 5.'' 
Thus, Congress concluded that the significant benefits of strengthening 
air cargo security within the statutory

[[Page 51856]]

time period warranted implementing the program through an IFR. TSA 
could not have had the CCSP operational by the August deadline without 
being able to issue an IFR.
    TSA conducted outreach to a wide range of stakeholders before 
issuing the IFR. In addition, TSA provided a 60-day notice and an 
opportunity to submit written comments on the IFR. TSA considered these 
comments in developing this final rule and before establishing the 
final STA fee.

Screening Technology

    Comment: One commenter expressed the view that most of the approved 
screening methods and equipment are appropriate for the passenger 
screening environment, but are ill-suited to the air cargo environment 
where palletized or other consolidated shipments are the norm. The 
commenter stated that CCSFs are currently technologically incapable of 
effectively screening large pallets of cargo without breaking down 
shipments and urged TSA to use the $4 million Congress appropriated to 
TSA for FY2010 to develop and deploy technologies capable of screening 
skids and pallets, including vapor and metal detection technologies. 
Another commenter also urged TSA to test and approve effective 
screening technology equipment that could be used to screen palletized 
shipments.
    TSA Response: TSA is exploring newer technologies for screening 
cargo, especially those technologies that screen palletized and 
consolidated cargo. In order to effectively evaluate and qualify 
technologies for screening cargo, TSA is working closely with the DHS 
Science and Technology Directorate (S&T), and the Department of Energy 
(DOE) National Laboratories and Technology Centers to continue to 
evaluate new and emerging technologies. TSA has qualified three 
technologies for screening some skid-level cargo configurations and 
commodities on the Air Cargo Screening Technology List (ACSTL), and is 
currently in the process of evaluating additional large aperture 
technologies for screening cargo. A non-SSI version of the ACSTL may be 
found at http://www.tsa.gov/assets/pdf/non_ssi_acstl.pdf. In addition 
to these efforts, screening protocols in security programs have also 
been refined for use in a cargo environment.
    Congress appropriated $18 million for TSA to specifically evaluate 
and deploy screening technologies. TSA added to the Congressional 
appropriation to fund a $40 million Screening Technology Pilot (STP) 
for IACs. This pilot is evaluating the effectiveness of screening 
technologies for screening cargo at the piece level, as well as for 
cargo consolidations, such as TSA Advanced Technology X-Ray (AT X-Ray) 
and Explosives Trace Detection (ETD), by commodity class, at each 
participant's consolidation facility. TSA provided some distributed 
funding to 47 participants at 111 different locations among 17 airports 
nationwide that handle large volumes of cargo, and that build cargo 
pallets for transport on passenger wide-body aircraft. TSA's objectives 
for the pilot program include determining the effectiveness of 
screening technology on various commodity classes of cargo, including 
palletized shipments. The pilot is evaluating 11 different X-ray models 
and 4 different ETD models, totaling 226 systems.
    TSA was also appropriated $4M in FY2010 for the evaluation and 
qualification of other technologies for air cargo screening including 
metal detectors and vapor detection systems with the intent to focus on 
perishable commodities and screening skids and pallets. These types of 
systems are currently undergoing the qualification process and results 
of these evaluations will be complete by the fourth quarter 2010.
    Comment: A commenter requested that TSA ensure transparency in its 
review procedures and expedite its evaluation of new technologies. In 
addition, the House Committee on Homeland Security also expressed 
concerns about TSA's approval of new technologies, adding their view 
that the lack of a Qualified Product List (QPL) for cargo screening 
technology makes industry stakeholders hesitant to purchase expensive 
equipment on the Approved List of Technology without the assurances 
that this equipment will be certified in future years. The Committee 
urged TSA to work with S&T to strengthen their processes in order to 
give timely attention to the development and certification of 
technology for cargo screening.
    TSA Response: DHS has expedited the evaluation process for new 
technologies by instituting simultaneous field and laboratory testing, 
and is working to qualify dozens of technologies. TSA is working 
closely with DHS S&T and the DOE National Laboratories to determine new 
and emerging technologies that exhibit proficiency in detecting 
improvised explosive devices and other prohibited items. Additionally, 
TSA's implementation of the CCSP is also mitigating the impact of 
screening consolidations on the air cargo supply chain, as CCSFs may 
tender screened cargo that does not need to be broken down to the piece 
level for additional screening.
    TSA has expedited the evaluation of these new technologies and is 
working to encourage industry to invest in new technology research and 
development by releasing Requests for Information (RFIs), holding 
industry forums with potential developers, and conducting other ongoing 
outreach. All of these efforts support the development and 
qualification of additional cargo screening technologies providing more 
technologies to meet industry's needs. As part of these activities, TSA 
must be confident that new technologies will meet the CCSP's security 
objectives before approving them. TSA has posted a Qualified Technology 
List.\15\ TSA will continually update this list with additional 
qualified technologies as those qualifications are completed.
---------------------------------------------------------------------------

    \15\ See http://www.tsa.gov/what_we_do/layers/aircargo/certified_screening.shtm#approved for information about the CCSP, 
including links to qualified vendor lists.
---------------------------------------------------------------------------

IV. Section-by-Section Analysis of Changes

Part 1515--Appeal and Waiver Procedures for Security Threat Assessments 
for Individuals

    In part 1515 TSA removed references to part 1522, validation firms, 
and validators because that part is being removed from the CFR, as 
discussed below.

Part 1522--TSA-Approved Validation Firms and Validators

    As explained in Section III., TSA decided it does not need 
independent validators to perform assessments of CCSF applicants 
because TSA has the capacity to review and certify all CCSF applicants 
itself. Thus, TSA has deleted part 1522 in its entirety.

Part 1540--Civil Aviation Security: General Rules

    TSA is amending Sec.  1540.201(a), Applicability and terms used in 
this subpart, to correct an incorrect citation. The IFR reference to 49 
CFR 1549.113 was incorrect and is changed in this final rule to 49 CFR 
1549.111.

Part 1544--Aircraft Operator Security: Air Carriers and Commercial 
Operations; and Part 1546--Foreign Air Carrier Security

    Under the IFR, Sec.  1544.105(a) provided that each aircraft 
operator must submit a security program to TSA at least 90 days before 
the intended date of passenger operations. In this final rule, TSA 
deleted the term ``passenger'' from the provision, because the 
requirement

[[Page 51857]]

applies to both passenger and all-cargo operations.
    Paragraphs (g)(3) of Sec. Sec.  1544.205 and 1546.205, Acceptance 
and Screening of Cargo, Subpart C, of the IFR provided that an aircraft 
operator that screens cargo off-airport must become a certified cargo 
screening facility in accordance with part 1549. In response to 
comments, TSA is deleting this requirement for both aircraft operators 
and foreign air carriers for the reasons stated in Section III. of this 
preamble.

Part 1548--Indirect Air Carrier Security

    Sections 1548.15(a) and Sec.  1548.15(a)(2) incorrectly referred to 
the ``aircraft operator.'' TSA corrected these sections by inserting 
the word ``indirect air carrier'' in place of ``aircraft operator.''

Part 1549--Certified Cargo Screening Program

    TSA clarified the language in Sec.  1549.7(b)(1) to make it clear 
that a CCSF must apply for renewal of its security program and its 
certification every 36 months.

V. Proposed Fee for Security Threat Assessments

    TSA is authorized to collect fees to offset the cost of conducting 
security threat assessments (STAs). 6 U.S.C. 469.
    TSA issued the Air Cargo Security Requirements final rule on May 
26, 2006 (2006 rulemaking),\16\ which, in part, required certain cargo 
workers of aircraft operators, foreign air carriers, and indirect air 
carriers (IACs) to obtain a security threat assessment. That final rule 
established a fee for STAs of $28, and incorporated the fee amount in 
49 CFR 1540.209. TSA published the Air Cargo Screening IFR on September 
16, 2009,\17\ that establishes requirements for certain additional 
individuals to successfully complete security threat assessments 
conducted by TSA. These individuals are CCSF employees and authorized 
representatives that screen cargo, have unescorted access to screened 
cargo or carry out certain other cargo security duties. The IFR amended 
Sec.  1540.209 to remove the specific fee amount. In the preamble to 
the IFR, we described how TSA would calculate the fee for STAs, and 
stated that the fee would be between $13 and $21, depending on the size 
of the population and whether costs involved in the calculation may 
change. We invited comment on the proposed fee, and the methodology and 
population estimates we used to arrive at the proposed fee. We stated 
that TSA would publish specific fee amounts and changes to fee amounts 
as a notice in the Federal Register.
---------------------------------------------------------------------------

    \16\ 71 FR 30478.
    \17\ 74 FR 47672.
---------------------------------------------------------------------------

    However, since the IFR, TSA has further reviewed costs and 
population data. Due to significant decreases in the population 
estimate, the fee necessary to recover our costs of conducting threat 
assessments would need to be increased. In this final rule, we propose 
that the user fee for the security threat assessments under 49 CFR 
1540.209 will be between $31 and $51. As stated above, we will announce 
the final fee in a notice in the Federal Register.

Discussion

    TSA proposes a fee range of $31 to $51 for STAs for aircraft 
operators, foreign air carriers, and IAC personnel who have unescorted 
access to screened cargo to be transported on passenger aircraft, 
screen cargo, supervise the screening of cargo, or perform certain 
other security functions as provided for in Sec.  1540.201.\18\ 
Applicants who have previously completed a TSA STA under the Air Cargo 
Security Requirements final rule, 71 FR 30478 (May 26, 2006) (2006 
rulemaking), were subject to the security fee in effect at that time 
and will not be subject to this fee until their existing STA reaches 
its five year expiration mark. At the time of expiration, applicants 
re-applying for an STA will be asked to pay a new air cargo screening 
fee that will be between $31 and $51.
---------------------------------------------------------------------------

    \18\ Section 1540.209 of the 2006 rule stated that a fee of $28 
is required for TSA to conduct an STA. The 2009 IFR, however, 
revised Sec.  1540.209 so that the regulation no longer contains a 
specific fee amount. Section 1540.209 now states that TSA will 
publish fee amounts and any revisions to the fee amounts as a notice 
in the Federal Register.
---------------------------------------------------------------------------

    To ensure consistency and equity across the entire air cargo 
community, TSA combined the costs and populations of individuals, or 
applicants, who would need STAs under both the 2006 IAC Air Cargo 
Security Requirements Final Rule and the 2009 IFR to create one 
harmonious fee. TSA calculated the fee based on historical counts of 
IAC applications and an estimate of the number of CCSF applicants 
(population), the cost of processing the applications, the cost of 
performing the STAs, and the cost of maintaining the information 
systems to support the process. Table 1, below in the Costs section, 
presents the calculations supporting the estimated fee.

Costs

    TSA proposes that individuals required to undergo an STA would be 
required to pay a fee to cover the following costs:

                                                            Table 1--Air Cargo Cost Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Operational year                         1st Year        2nd Year        3rd Year        4th Year        5th Year          Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cost Components:
    Name Check..........................................        $445,705        $659,710        $874,730        $721,160        $557,350      $3,258,656
    Platforms/Systems...................................       3,240,521       1,890,265       1,718,315       1,781,956       1,845,597      10,476,654
    Personnel...........................................       2,538,286       2,489,620       2,663,626       2,685,010       2,706,329      13,082,872
                                                         -----------------------------------------------------------------------------------------------
        Grand Totals....................................       6,224,512       5,039,595       5,256,671       5,188,126       5,109,276      26,818,182
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For the TSA STA, each applicant's information will be name-checked 
against multiple databases and other information sources. The threat 
assessment process includes an appeals process for individuals who 
believe the records upon which TSA bases its determination are 
incorrect. TSA would also need to implement and maintain the 
appropriate systems, resources, and personnel to process applicant 
information and to allow TSA to receive, and act on, the results of the 
STA.
    TSA's fee methodology begins with estimating the unit cost for each 
name-check, and then builds on costs for threat assessment investments 
used by all applicants. These investments are estimated as fixed costs 
over a five-year period and then equally distributed to all applicants 
over that same five-year period. In doing so, TSA has established a 
constant fee that will be imposed

[[Page 51858]]

equitably across the population that is receiving and benefiting from 
this unique service.
    TSA estimates that the cost, net of appropriations,\19\ of STA 
services for both the IAC and CCSF populations will be $26,818,182 over 
five years. The estimate for STA services includes $3,258,656 for TSA 
name-based checks, $10,476,654 for platforms/systems costs, and 
$13,082,872 for fully-loaded personnel costs necessary to facilitate 
the STA processing. TSA arrived at these cost estimates using 
information gathered from subject matter experts in the program office. 
Please see Table 2 below for detailed breakout of the Air Cargo fee:
---------------------------------------------------------------------------

    \19\ TSA utilized appropriations to fund certain start-up 
systems costs. These appropriations have not been included in the 
fee model and therefore, will not be recovered through the 
imposition of security fees.

                     Table 2--Air Cargo Fee Breakout
------------------------------------------------------------------------
          Cost category               Total cost           Fee  (%)
------------------------------------------------------------------------
Security Threat Assessment......          $3,258,656                  12
Equipment/Systems...............          10,476,654                  39
Personnel.......................          13,082,872                  49
                                 ---------------------------------------
    Total.......................          26,818,182                 100
------------------------------------------------------------------------

Population

    TSA estimates that approximately 651,713 applicants would be 
required to complete a STA during the next five years of the program. 
This estimate is derived from the following population figures that 
have been gathered for specific segments of the regulated population.

                                     Table 3--Air Cargo Population Estimates
----------------------------------------------------------------------------------------------------------------
         Operational year             1st Year     2nd Year     3rd Year     4th Year     5th Year      Total
----------------------------------------------------------------------------------------------------------------
CCSP:
    Applicants....................       30,165       67,598       53,878       50,852       55,370      257,863
IAC:
    Applicants....................       58,976       64,344      121,068       93,380       56,100      393,868
                                   -----------------------------------------------------------------------------
        Grand Totals..............       89,141      131,942      174,946      144,232      111,470      651,731
----------------------------------------------------------------------------------------------------------------

    The CCSP population segment includes an estimated number of STAs to 
be performed for CCSP enrolled shippers and independent cargo screening 
facilities from 2010 to 2014. The number of STAs is based on a 
projected 1,745 entities and an average 131 STAs per entity over five 
years. The number of projected entity enrollments and average number of 
STAs per entity were based on information known about currently 
enrolled CCSFs and the types of entities that may enroll in the future. 
The turnover estimate is based on the 2009 BLS JOLT transportation, 
warehousing, and utilities worker hires rate. The turnover rate is also 
used to estimate the number of employees that received an STA in 2009, 
which would still be employed in 2014 when they are required to renew 
their STA. For the IAC population segment, TSA utilized historical 
actual enrollments over the past four years to develop an estimate for 
the next five years.
    When the IFR was published, TSA anticipated as many as 15,000 
applicants would apply to participate in the CCSP. This was based on 
the assumption that the CCSP would be comprised of a high number of 
individual shippers. TSA surmised that individual shippers would 
participate in the program to screen their own cargo to minimize 
additional handling and the potential for delay or damage to the cargo 
if it were screened at a later point in the supply chain. Instead, the 
indirect air carrier industry (i.e., freight forwarders) led enrollment 
in CCSP and has taken on a significant percentage of the screening 
performed under the program. This has resulted in significantly fewer 
applicants and participants in the program than originally estimated, 
as a single indirect air carrier has the capacity to screen cargo for 
multiple shippers. This redistribution of screening led to a 
significant reduction in the number of STAs required by personnel who 
have access to screened cargo.
    TSA will continue to work to minimize all costs and will finalize 
the proposed fee in a notice in the Federal Register. Additionally, 
pursuant to the Chief Financial Officers Act of 1990 (Pub. L. 101-576, 
104 Stat. 2838, Nov. 15, 1990), DHS/TSA is required to review fees no 
less than every two years (31 U.S.C. 3512). Upon review, if TSA finds 
that the fees are either too high (that is, total fees exceed the total 
cost to provide the services) or too low (total fees do not cover the 
total costs to provide the services) TSA would adjust the fee. Finally, 
TSA would be able to adjust the fees for inflation following 
publication of the final rule. If TSA were to adjust the fees for this 
reason, TSA would publish a notice in the Federal Register notifying 
the public of the change.

Fee Range

    The fee TSA establishes for the STA should cover all the costs 
related to the STA process. TSA estimates that the final fee to the 
applicant will be between $31 and $51 per applicant based on the total 
estimated cost of services provided ($26,818,182). This cost will be 
equally apportioned to the estimated population (651,731) receiving the 
threat assessment service. The resulting fee will be sufficient to 
fully recover the remaining STA costs.
    TSA invites comment on the proposed fee range of $31 to $51 and the 
methodology and population estimates we used to arrive at this amount. 
Additional detailed information regarding the fee determination has 
been provided in the ``Air Cargo Screening Security Threat Assessment 
Fee Development Report.'' This report

[[Page 51859]]

has been placed in the public docket established for this rulemaking. 
After reviewing all comments received, TSA will issue a notice in the 
Federal Register that summarizes and addresses the comments we receive, 
and establishes the final fee amount, after which the fee will be 
charged to applicants.
    Revised Sec.  1540.209 provides that TSA will calculate fees for 
STAs based on widely accepted accounting principles and practices and 
in accordance with the provisions of 31 U.S.C. 9701 and other Federal 
law as applicable.

Comments on the Fee Calculation

    TSA received two comments on the IFR relating to the STA fee. The 
comments raised several points, discussed below.
    Comment: Two commenters stated that the proposed fee range in the 
IFR indicated that TSA has been overcharging by applying an STA fee of 
$28 for IACs since the 2006 rulemaking.
    TSA Response: TSA based the fee of $28, established in 2006, on the 
population and costs of conducting STAs only on cargo workers covered 
under the 2006 rulemaking. TSA set that fee to cover TSA's cost of 
conducting STAs for that population. Further, as we established the 
CCSP in the 2009 IFR, both the overall estimated costs of processing 
the STAs and the overall number of estimated individuals that would be 
required to undergo the STA increased. Because the IFR population 
estimate had increased in greater proportion to the costs, TSA 
estimated a fee range of $13 to $21. Ultimately, in this final rule, 
TSA utilized the most robust cost and population estimates to determine 
the STA fee range. Compared to IFR estimates, both cost and population 
estimates have decreased. But because the population estimate decreased 
in greater proportion to the cost estimate, TSA must increase the fee 
to a range between $31 and $51 to recover the full cost of the STA 
services from the estimated population regulated under this rulemaking.
    Comment: A commenter stated that TSA's failure to impose fees for 
processing the STAs for CCSF applicants prior to this notice amounted 
to discrimination against the regulated entities that have been paying 
the fee of $28 under the 2006 rulemaking. The commenter believes that 
TSA should have waited to process STAs for the CCSFs until we had the 
rulemaking authority in place to charge fees.
    TSA Response: TSA considered it necessary to initiate the CCSP in 
order to meet the mandatory screening requirements imposed by the 
Implementing the Recommendations of the 9/11 Act. To protect the public 
from explosives on passenger aircraft, Congress required that 50 
percent of cargo transported on passenger aircraft be screened by 
February 3, 2009, and that 100 percent of such cargo be screened by 
August 3, 2010. TSA commenced a screening pilot to build the CCSP so 
that industry could meet the deadlines of the 9/11 Act. STAs were 
needed to implement the pilot program to ensure that key personnel with 
unescorted access to screened cargo, and thus, the opportunity to 
compromise security, were checked against the relevant domestic and 
international watch lists.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) 
requires that TSA consider the impact of paperwork and other 
information collection burdens imposed on the public and, under the 
provisions of PRA section 3507(d), obtain approval from the Office of 
Management and Budget (OMB) for each collection of information it 
conducts, sponsors, or requires through regulations. OMB has approved 
information collection requirements associated with this rule and has 
assigned OMB Control Number 1652-0053 to these collections. However, 
TSA has adjusted its burden estimates to reflect information actually 
collected following the publication of the IFR, as well as the 
elimination of TAVF requirements from the IFR to the final rule, and 
has submitted the following information requirements to OMB for its 
review.
    Title: Certified Cargo Screening Program Final Rule.
    Summary: Section 1602 of the Implementing Recommendations of the 9/
11 Commission Act of 2007 (Pub. L. 110-53, 121 Stat. 266, Aug. 3, 2007) 
requires the development of a system to screen 100 percent of the cargo 
transported on a passenger aircraft operating within the United States 
by August 2010 and to screen 50 percent of all air cargo by February 
2009. This rule amends several parts of title 49 of the Code of Federal 
Regulations (CFR), as described in prior sections of this preamble. The 
rule involves several information collections already approved by OMB.
    This final rule includes the following information collections, 
which were included in the IFR:
    First, an entity that seeks to become a CCSF under 49 CFR part 1549 
must submit an application to TSA.
    Second, TSA must conduct STAs for key personnel of CCSFs. These key 
personnel must submit personal data to TSA for the STAs. This STA 
portion is a previously approved collection under OMB control number 
1652-0040. This FR under OMB control number 1652-0053 expands the 
population from which the information is collected.
    Third, CCSFs (49 CFR 1549.7) must accept the TSA-approved security 
program or submit amendments to the TSA-approved security program. 
CCSFs must accept a standard security program provided by TSA or submit 
a proposed modified security program to the designated TSA official for 
approval initially and periodically thereafter as required.
    Fourth, CCSP participants must maintain records of compliance with 
the final rule and make them available for TSA inspection (see 49 CFR 
1549.105 and 1522.129).
    Finally, CCSFs must submit TSA-determined monthly cargo screening 
metrics to TSA in accordance with their security programs.
    Use of: TSA uses the applications of entities seeking to become 
CCSFs to approve the entity as a CCSF. TSA collects personally 
identifiable information from CCSFs about their key personnel in order 
to conduct STAs on these individuals. STAs are required for individuals 
who screen cargo, those who have unescorted access to screened cargo, 
and other key individuals who support those functions. CCSF security 
programs are necessary because they contain specific measures to deter 
incidents that may jeopardize transportation security. CCSFs must 
maintain records and provide TSA Inspectors and Principal Cargo 
Security Analysts (PCSAs) access to their records, equipment, and 
facilities necessary to conduct inspections and assessments. Finally, 
TSA requires CCSFs to provide information on the amount of cargo 
screened at an approved facility in order to evaluate the compliance 
and performance of the CCSFs and to provide information needed for 
congressional reporting and future rulemaking relating to air cargo 
security.
    Respondents (including number of): Over a three-year period, the 
likely respondents to this proposed information requirement are the 
2,902 entities that seek to become CCSFs under 49 CFR part 1549.
    Frequency: CCSFs will submit an application for recertification 
every three years. CCSFs will submit personally identifiable 
information of their key personnel so that TSA can conduct STAs every 
five years. The rule requires CCSFs to accept the TSA-approved security 
program or submit

[[Page 51860]]

amendments to the TSA-approved security program once. TSA estimates 
CCSFs will submit updates to their security program on average once 
annually. The recordkeeping requirements must be continuous in 
accordance with their security program. The requirement for CCSFs to 
provide information on the amount of cargo screened and other screening 
data at an approved facility will be a monthly collection.
    Annual Burden Estimate: TSA estimates that the 967 entities who 
seek to become CCSFs annually will spend approximately 2 hours each to 
complete the applications for an annual burden of 1,934 hours. TSA 
estimates 51,172 annual responses from CCSFs submitting applications to 
TSA for processing STAs. TSA estimates an average of 15 minutes per 
application for an annual burden of 12,793 hours. TSA has estimated 
that a total of 1,778 CCSFs will adopt their security programs over the 
three years for an average of 593 security programs annually. Each CCSF 
will devote approximately 42 hours to their initial security program, 
resulting in an annual burden of 24,906 hours. TSA has estimated that a 
total 3,701 CCSFs will be required to maintain and update their 
security programs over the three years for an average of 1,234 security 
programs updated annually. Each CCSF will devote approximately four 
hours annually, beginning in the second year, updating their security 
programs for an annual hour burden of 4,936. TSA estimates all CCSFs 
over the three years will be required to maintain records of compliance 
with the final rule. This includes a time burden of approximately 5 
minutes (0.083 hours) for every CCSF employee required to have an STA 
as well as other records of compliance. This recordkeeping requirement 
results in 51,172 annual record updates for an annual burden of 
approximately 4,247 hours. TSA estimates that 1,826 CCSFs, the 
estimated annual average in the program, will complete monthly cargo 
reports at an estimated time of one hour per week for an annual burden 
of approximately 94,952 hours.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Average         Average
               Function                    annual          annual          Time per response      Annual hours         TSA form No.           FR cite
                                         respondents      responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
          CCSF Applications                                           Collected every 36 months after initial application.
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Year.............................             967             967  2 hours.................           1,934  419E...................   Sec.   1549.7
Three Years..........................           2,902           2,902  2 hours.................           5,804
--------------------------------------------------------------------------------------------------------------------------------------------------------
           STA Applications                                          Collected every five years after initial application.
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Year.............................          51,172          51,172  .25 hours...............          12,793  419F...................  Sec.   1549.11
Three Years..........................         153,516         153,516  .25 hours...............          38,379  .......................            Sec.
                                                                                                                                                1549.103
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Security Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Creations                                                               One time collection.
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Year.............................             593             593  42 hours................          24,906  N/A....................   Sec.   1549.5
Three Years..........................           1,778           1,778  42 hours................          74,676
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Updates                                                                   Once annually
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Year.............................           1,234           1,234  4 hours.................           4,936  N/A....................   Sec.   1549.5
Three Years..........................           3,701           3,701  4 hours.................          14,804
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Recordkeeping                                                            Continuous as needed.
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Year.............................          51,172          51,172  .083 hours..............           4,247  N/A....................            Sec.
                                                                                                                                                1549.105
Three Years..........................         153,516         153,516  .083 hours..............          12,742
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Cargo Reporting                                                            Monthly collection.
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Year.............................           1,826          21,912  52 hours/yr.............          94,952  N/A....................            Sec.
                                                                                                                                                1549.105
Three Years..........................           5,479          65,748  52 hours/yr.............         284,908
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total for One Year...............         106,964         127,050  ........................         143,768
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total for Three Years............         320,892         381,161  ........................         431,313
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: One year burdens may not multiply to three year burdens due to rounding.

    As a protection provided by the Paperwork Reduction Act, as 
amended, an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.

VII. Economic Impact Analyses

A. Regulatory Evaluation Summary

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order (EO) 12866, Regulatory Planning and 
Review, as supplemented by EO 13563, Improving Regulation and 
Regulatory Review, directs each Federal agency to propose or adopt a 
regulation only if the agency makes a reasoned determination that the 
benefits of the intended regulation justify its costs. Second, the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq., as amended by 
the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996) requires agencies to consider the economic impact of regulatory 
changes on small entities when an agency is required to issue a notice 
of proposed rulemaking. Third,

[[Page 51861]]

the Trade Agreements Act (19 U.S.C. 2531-2533) prohibits agencies from 
setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. Fourth, the Unfunded Mandates Reform Act 
of 1995 (2 U.S.C. 1531-1538) requires agencies to prepare a written 
assessment of the costs, benefits, and other effects of proposed or 
final rules that include a Federal mandate likely to result in the 
expenditure by State, local, or Tribal governments, in the aggregate, 
or by the private sector, of $100 million or more annually (adjusted 
for inflation).
    TSA has prepared a Regulatory Evaluation, with detailed analyses, 
which is available to the public in this docket. With respect to these 
analyses, TSA provides the following conclusions and summary 
information:
    <bullet> This rule is considered an economically significant rule 
within the definition of EO 12866, as supplemented by EO 13563, as 
estimated annual costs or benefits exceed $100 million in any year. TSA 
has included the mandatory OMB Circular A-4 Accounting Statement in the 
Regulatory Evaluation and thus has not repeated it here.
    <bullet> Under the Regulatory Flexibility Act of 1980, TSA is not 
required to perform a Regulatory Flexibility Analysis because we did 
not publish a proposed rule.
    <bullet> The Regulatory Evaluation provides the required assessment 
of the Trade Agreement Act of 1979.
    <bullet> The Regulatory Evaluation provides the required written 
assessment of Unfunded Mandates. This final rule is not likely to 
result in the expenditure by State, local, or Tribal governments, in 
the aggregate, of $100 million or more annually (adjusted for 
inflation). This rule, however, does impose an unfunded mandate of 
greater than $100 million or more annually (adjusted for inflation) on 
the private sector. The separate analysis of the costs and benefits of 
the rule in the Regulatory Evaluation, found in the public docket, 
satisfies the analysis requirements of the Unfunded Mandates Reform 
Act.

B. Executive Order 12866 and Executive Order 13563 Assessments

    The following summary highlights the costs and benefits of the 
rule. The following table presents the annualized, monetized costs of 
the rule, discounted at both seven and three percent, along with a 
discussion of the qualitative benefits, which have not changed from the 
IFR to this final rule. This information is also found in the OMB 
Circular A-4 in the Regulatory Evaluation Summary of the regulatory 
evaluation.

----------------------------------------------------------------------------------------------------------------
                                                               Estimates                          Units
                                                ----------------------------------------------------------------
                    Category                                                                           Discount
                                                   Primary        Low          High     Year dollar      rate
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Annualized.....................................       $178.1       $146.1       $210.9         2009           7%
Monetized ($millions/year).....................       $180.1       $147.7       $213.1         2009           3%
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Qualitative....................................     Increased protection of passengers and cargo from acts of
                                                   terrorism. Prevent the introduction of unauthorized persons,
                                                  explosives, incendiaries, and other destructive substances or
                                                  items into the air cargo supply chain. Protect citizens on the
                                                 ground, in buildings, and elsewhere in our society from acts of
                                                             terrorism involving the use of aircraft.
----------------------------------------------------------------------------------------------------------------

Costs

    TSA issued an IFR implementing the CCSP on September 16, 2009 (74 
FR 47672). This final rule makes only two changes to the program TSA 
established in the IFR--the elimination of the requirement for aircraft 
operators to be certified as a CCSF in order to screen cargo off-
airport and the elimination of TSA-approved validation firms (TAVFs) in 
favor of TSA assessments because of the reduction in the expected 
number of CCSF participants. In response to public comments and changes 
in the expected CCSF population, TSA has adjusted the estimated costs 
for the CCSP. The effect of eliminating the TAVF requirement will be to 
lower the cost of the rulemaking by $65.9 million, discounted at 7 
percent, over the 10-year period of the rulemaking. However, TSA is 
unable to quantify any potential impacts on cargo volumes or shipping/
screening prices that may stem from changes in requirements which 
removed the TAVFs. The TAVF concept was never implemented by TSA, 
consequently there is no data that can be used as a baseline. The 
Regulatory Evaluation accompanying this rule contains a further 
qualitative discussion of these potential impacts.
    The Regulatory Evaluation accompanying this rule summarizes the 
revised cost estimates of the CCSP, which would be borne by four 
relevant parties: aircraft operators (including, in this context, both 
U.S. aircraft operators and foreign air carriers), CCSFs, non-CCSF 
entities that receive screened cargo from CCSFs, and TSA.

Total

    In summary, over the 10-year period of the analysis, TSA estimates 
the aggregate costs of the CCSP to total approximately $1.5 billion 
discounted at three percent and approximately $1.3 billion discounted 
at seven percent. The Regulatory Evaluation, available in the public 
docket, provides detailed estimates of these costs.
    TSA estimates costs of this Regulatory Evaluation using two 
methods: a top-down approach and a bottom-up approach. TSA's bottom-up 
cost approach is based primarily on the projected participation of 
IACs, ICSFs, and shippers in the CCSP. TSA uses these estimates in 
conjunction with estimated costs of program compliance to estimate a 
total cost for the rule from the bottom up.
    TSA expects IACs and ICSFs choosing to become CCSFs to charge a 
service fee for screening cargo. TSA believes that this fee, similar to 
that charged by United Kingdom Known Consignors, would include all 
costs and profit associated with screening of cargo and is therefore a 
useful proxy in determining the cost to firms of screening cargo. TSA's 
top-down method estimates the cost of CCSP using a range of fees seen 
in the United

[[Page 51862]]

Kingdom Known Consignor program as the basis for costs incurred by 
industry.
    TSA considers the top-down cost approach more accurate considering 
the level of uncertainty in TSA's estimate of the number of firms 
choosing to become CCSFs. Also, the top-down approach is more likely to 
reflect the efficiencies captured by allowing the market to allocate 
screening measures. Thus, the top-down cost estimate is TSA's preferred 
approach.
    Both the bottom-up and the top-down cost estimates decreased from 
the IFR to the final rule due to changes in assumptions, based on 
having better data available for the final rule. For example, TSA used 
Bureau of Transportation Statistics data in the IFR to estimate cargo 
volume, but in the final rule, actual cargo volume data were available 
from the air carriers. The only change in rule requirements that 
impacted the cost estimates was the elimination of the TSA-approved 
validation firms. In the top-down approach, only the TSA costs were 
reduced by the elimination of TAVFs. In the bottom-up approach, costs 
were reduced for CCSFs, TSA, and the potential TAVFs.
    The following table presents the annual costs of the rule over the 
10-year analysis period. The total is broken out by costs to TSA, cost 
to industry (using the preferred approach), and the estimated delay 
costs due to screening. The TSA total represents the estimated costs 
TSA will incur to implement the CCSP and enforce compliance.
    The industry cost is estimated using a range of fees observed in 
the United Kingdom Known Consignor Program as the basis, and accounts 
for the 57 percent of cargo shipped on passenger planes expected to be 
screened at CCSFs as well as the additional 28 percent that aircraft 
operators are expected to screen. The remaining 15 percent is assumed 
to have been screened by the air carriers prior to the rulemaking. The 
delay cost assumes the 43 percent of cargo (15 percent screened prior 
to the CCSP and an additional 28 percent under the CCSP) expected to be 
screened by the aircraft operators will be the only cargo subject to 
delay. The high and low estimates represent variance around TSA's 
primary estimate to allow for uncertainties with the inputs used to 
estimate the total cost of the rule.

                                                       Table 1--10-Year Total Cost Summary of CCSP
                                                                      [$ millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Discounted  (3  Discounted  (7
                          Year                               TSA cost      Industry cost    Delay cost      Total cost       percent)        percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................           $32.7          $109.7           $30.1          $172.5          $167.5          $161.2
2.......................................................             5.4           115.0            31.6           152.0           143.3           132.7
3.......................................................             4.9           120.5            33.1           158.5           145.1           129.4
4.......................................................             4.1           126.3            34.7           165.1           146.7           126.0
5.......................................................             4.1           132.3            36.4           172.9           149.1           123.3
6.......................................................             4.5           138.7            38.2           181.4           151.9           120.9
7.......................................................             4.3           145.3            40.1           189.7           154.3           118.2
8.......................................................             4.3           152.3            42.0           198.6           156.8           115.6
9.......................................................             4.6           159.6            44.0           208.2           159.6           113.3
10......................................................             4.4           167.3            46.2           217.9           162.1           110.8
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................            73.4         1,367.0           376.5         1,816.8         1,536.3         1,251.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low.....................................................            55.0         1,139.2           296.5         1,490.7         1,260.2         1,026.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
High....................................................            91.7         1,594.8           463.3         2,149.9         1,818.2         1,481.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Cost Estimates From Interim Final Rule

    The CCSP final rule cost estimates differ from the IFR in large 
part to reflect actual data gathered since the implementation of the 
program. TSA uses the current state of the program, technology 
purchased, screening distribution, and numerous other sources of 
information to better estimate population projections and program 
costs. The tables below identify these cost differences for the CCSP 
top-down approach (which is TSA's preferred approach), CCSP bottom-up 
approach, and the 100 percent Air Carrier Alternative at the 
undiscounted, three percent, and seven percent discounted rate.

                                   Table 2--Changes to Cost Estimates From IFR
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                                         Undiscounted 10-year total costs
                            Estimate                             -----------------------------------------------
                                                                        IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
CCSP Top-down...................................................        $2,836.4        $1,816.8      ($1,019.6)
CCSP Bottom-up..................................................         5,199.5         2,300.0       (2,899.5)
Air Carrier Alternative.........................................        11,141.6         3,513.7       (7,627.9)
----------------------------------------------------------------------------------------------------------------


[[Page 51863]]


                                  Table 2a--Changes to Cost Estimates From IFR
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                                          3% Discount 10-year total costs
                            Estimate                             -----------------------------------------------
                                                                        IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
CCSP Top-down...................................................        $2,394.0        $1,536.3        ($857.7)
CCSP Bottom-up..................................................         4,403.9         1,946.1       (2,457.7)
Air Carrier Alternative.........................................         9,427.0         2,966.4       (6,460.6)
----------------------------------------------------------------------------------------------------------------


                                  Table 2b--Changes to Cost Estimates From IFR
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                                          7% Discount 10-year total costs
                            Estimate                             -----------------------------------------------
                                                                        IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
CCSP Top-down...................................................        $1,945.0        $1,251.2        ($693.8)
CCSP Bottom-up..................................................         3,597.0         1,585.4       (2,011.5)
Air Carrier Alternative.........................................         7,683.0         2,410.4       (5,272.6)
----------------------------------------------------------------------------------------------------------------

    The tables below identify the major driving forces behind the 
changes for the CCSP Bottom-up approach. The Regulatory Evaluation 
explains in detail the reasons for the changes.

                             Table 3--Changes to Air Carrier and Non-CCSF IAC Costs
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                   10-year total costs
           Cost component           ------------------------------------------------  Major cost driving changes
                                           IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
Personnel..........................          $709.9          $564.1        ($145.8)  TSA increased the
Equipment..........................            57.3            34.8          (22.5)   percentage of cargo
Screener Training..................             6.4             3.7           (2.7)   screened by air carriers
                                                                                      and updated tendering
                                                                                      percentage configuration
                                                                                      assumptions based on
                                                                                      current screening data.
Chain of Custody Training..........            75.5            55.2          (20.3)  TSA updated with a more
                                                                                      industry-specific wage.
----------------------------------------------------------------------------------------------------------------
    Undiscounted Total.............           849.1           657.8         (191.3)  ...........................
------------------------------------------------------------------------------------
    3% Discounted Total............           717.7           556.3         (161.4)  ...........................
------------------------------------------------------------------------------------
    7% Discounted Total............           584.3           453.0         (131.2)  ...........................
----------------------------------------------------------------------------------------------------------------


                          Table 4--Changes to TSA Approved Validation Firm (TAVF) Costs
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                   10-year total costs
           Cost component           ------------------------------------------------  Major cost driving changes
                                           IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
Enrollment.........................          $0.002           $0.00        ($0.002)  TSA will perform
Validator Training.................           14.10            0.00         (14.10)   assessments on CCSFs and
STA Cost...........................            0.10            0.00          (0.10)   has eliminated the need
                                                                                      for TAVFs.
----------------------------------------------------------------------------------------------------------------
    Undiscounted Total.............           14.20            0.00         (14.20)  ...........................
------------------------------------------------------------------------------------
    3% Discounted Total............            14.0             0.0          (14.0)  ...........................
------------------------------------------------------------------------------------
    7% Discounted Total............            11.7             0.0          (11.7)
----------------------------------------------------------------------------------------------------------------


[[Page 51864]]


                                         Table 5--Changes to CCSF Costs
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                   10-year total costs
           Cost component           ------------------------------------------------  Major cost driving changes
                                           IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
Validations........................           $75.4            $0.0         ($75.4)  TSA will now perform
                                                                                      assessments at no charge
                                                                                      to CCSFs and eliminated
                                                                                      the need for TAVFs.
Facility Security..................           172.3            19.1         (153.2)  TSA updated the CCSF
                                                                                      population projection
                                                                                      based on current
                                                                                      participation and the
                                                                                      types of entities expected
                                                                                      to enroll in the future.
Training...........................           902.2           107.0         (795.2)
Security Coordinators..............           593.8            53.2         (540.6)
Enrollment.........................           119.0            17.0         (102.0)  TSA updated CCSF population
                                                                                      projection. Also, based on
                                                                                      current program included
                                                                                      new cost for a two-hour
                                                                                      application per CCSF.
Screening Equipment................           914.8           309.6         (605.2)  TSA updated CCSF population
                                                                                      projection and equipment
                                                                                      expected to be purchased
                                                                                      based on technology
                                                                                      purchased by currently
                                                                                      enrolled CCSFs. Also
                                                                                      revised purchase prices to
                                                                                      reflect industry
                                                                                      experience.
Chain of Custody...................            58.8            24.5          (34.3)  TSA updated assumptions
                                                                                      based on current practice.
STA Cost...........................            31.0            20.7          (10.3)  TSA updated CCSF population
                                                                                      projection and STA fee. In
                                                                                      addition, estimated firms
                                                                                      will pay STA fee in years
                                                                                      3-10. Previously, TSA was
                                                                                      assumed responsible for
                                                                                      the duration of the
                                                                                      analysis.
Personnel..........................           785.5           641.4         (144.1)  TSA updated tendering
                                                                                      percentage assumptions
                                                                                      based on current screening
                                                                                      data.
----------------------------------------------------------------------------------------------------------------
    Undiscounted Total.............         3,652.8         1,192.4       (2,460.4)  ...........................
------------------------------------------------------------------------------------
    3% Discounted Total............         3,094.8         1,006.4       (2,088.4)  ...........................
------------------------------------------------------------------------------------
    7% Discounted Total............         2,529.1           816.6       (1,712.6)
----------------------------------------------------------------------------------------------------------------


                                          Table 6--Changes to TSA Costs
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                   10-year total costs
           Cost component           ------------------------------------------------- Major cost driving changes
                                           IFR         Final rule       Difference
----------------------------------------------------------------------------------------------------------------
Inspections........................          $200.2            $9.5         ($190.7)  TSA updated the CCSF
                                                                                       population projections
                                                                                       based on current
                                                                                       participation and the
                                                                                       types of entities
                                                                                       expected to enroll in the
                                                                                       future.
Training...........................            10.0             5.1            (4.9)  TSA updated with more
                                                                                       industry-specific wages.
Security Plan Review...............            30.0             4.3           (25.7)  TSA updated CCSF
                                                                                       population projection.
Assessments........................             0.0             9.6             9.6   TSA will be performing
                                                                                       assessments and
                                                                                       eliminated the need for
                                                                                       TAVFs.
Assessment Review..................            42.3             1.0           (41.3)  TSA updated CCSF
                                                                                       population projection.
Validation Firm Enrollment.........             0.3             0.0            (0.3)  TSA will be performing
                                                                                       assessments and has
                                                                                       eliminated the need for
                                                                                       TAVFs.
ACDMS..............................             9.0            14.0             5.0   TSA updated costs based on
                                                                                       current ACDMS
                                                                                       development.
STAs...............................            71.4             1.5           (69.9)  TSA updated CCSF
                                                                                       population projections.
                                                                                       TSA estimates industry
                                                                                       will pay an STA fee in
                                                                                       years 3-10. Previously,
                                                                                       TSA was assumed
                                                                                       responsible for the
                                                                                       duration of the analysis.
Equipment for Screening Technology             23.6            28.4             4.8   TSA updated cost to
 Pilot (STP).                                                                          reflect actual cost
                                                                                       incurred for pilot.
----------------------------------------------------------------------------------------------------------------
    Undiscounted Total.............           386.8            73.4          (313.4)
-------------------------------------------------------------------------------------
    3% Discounted Total............           326.8            66.0          (260.8)
-------------------------------------------------------------------------------------

[[Page 51865]]

 
    7% Discounted Total............           268.7            58.3          (210.4)
----------------------------------------------------------------------------------------------------------------


                                       Table 7--Changes to CCSP Delay Cost
                                                   [$millions]
----------------------------------------------------------------------------------------------------------------
                                                   10-year total costs
           Cost component           ------------------------------------------------  Major cost driving changes
                                           IFR         Final rule      Difference
----------------------------------------------------------------------------------------------------------------
    Undiscounted Total Delay Cost..          $297.1          $376.5           $79.4  TSA updated the percentage
                                                                                      of cargo screened by CCSFs
                                                                                      and tendering percentage
                                                                                      configuration assumptions
                                                                                      based on current screening
                                                                                      data. In addition, TSA
                                                                                      corrected errors in the
                                                                                      delay model.
----------------------------------------------------------------------------------------------------------------
    3% Discounted Total............           250.3           317.4            67.2  ...........................
------------------------------------------------------------------------------------
    7% Discounted Total............           202.9           257.5            54.6  ...........................
----------------------------------------------------------------------------------------------------------------

Benefits

    The CCSP allows for more standardized governance in cargo screening 
and provides fourfold benefits in terms of increased security of 
commercial passenger aviation. First, by screening 100 percent of cargo 
shipped on passenger aircraft, the passenger airline industry will have 
more protection against an act of terrorism or other malicious 
behavior. Second, allowing the screening process to occur throughout 
the supply chain via the CCSP reduces potential bottlenecks and delays 
at the airports. Third, the CCSP allows the market to identify the most 
efficient venue for screening along the supply chain thereby permitting 
any entity in the supply chain to apply for TSA certification to screen 
the cargo and apply chain-of-custody procedures. Finally, the CCSP 
enables members to screen valuable cargo earlier in the supply chain 
and avoid any potentially invasive screening that may occur at the 
aircraft operator level.
    The main benefit of this regulation, decreased terrorism risk, 
cannot be quantified given current data limitations. When it is not 
possible to quantify or monetize the important incremental benefits of 
a regulation, OMB recommends conducting a threshold, or ``break-even'' 
analysis. According to OMB, such an analysis answers the question, 
``How small could the value of the non-quantified benefits be (or how 
large would the value of the non-quantified costs need to be) before 
the rule would yield zero net benefits?'' \20\ Consequently, to better 
inform the comparison of the costs of implementing the rule with the 
benefits to homeland security of the CCSP, TSA performed a series of 
break-even analyses. In these break-even analyses, TSA compared the 
annualized costs of the rule's requirements to the expected benefits of 
preventing certain potential terrorist attacks. To evaluate the 
potential range of attacks, TSA considers four relevant attack 
scenarios.
---------------------------------------------------------------------------

    \20\ U.S. Office of Management and Budget, Circular A-4, 
September 17, 2003, p.2.
---------------------------------------------------------------------------

    For example, TSA considered the direct costs of a scenario where an 
explosive device placed in cargo shipped on a passenger plane destroys 
a standard narrow body aircraft (from the fleets used by major U.S. 
aircraft operators) during flight. This incident is assumed to result 
in the loss of the lives of all passengers and crewmembers on board, 
along with the total destruction of the aircraft. Based on data 
reported in the FAA Critical Values Guidance,\21\ TSA used an average 
capacity of 142 passengers with a load factor of 80 percent \22\ and an 
average crew size of five to estimate 119 (142 passengers x 80 percent 
+ 5 crewmembers) total people to be on board. TSA estimates the value 
of these statistical lives is approximately $714.0 million, based on 
the Department of Transportation's Value of a Statistical Life (VSL) 
estimation of $6.0 million per person.\23\ The VSL represents an 
individuals' willingness to pay to avoid a fatality, based on economic 
studies of the value individuals place on small changes in risk and is 
not meant to represent the actual value of a specific life. TSA notes 
the VSL used in the final rule has increased to $6.0 million from the 
$5.8 million used in the IFR. This increase was done to remain in 
alignment with the VSL used by DOT, which was raised from $5.8 million 
to $6.0 million.\24\ A further discussion of VSL is included in the 
Break Even Analysis section of the Regulatory Evaluation.
---------------------------------------------------------------------------

    \21\ ``Economic Values for FAA Investment and Regulatory 
Decisions, a Guide'' (updated Oct 2007).
    \22\ FAA Aerospace Forecast 2008-2025 (load factor across all 
aircraft). The FAA Aerospace Forecast is updated annually and 
provides the best available data on load factors.
    \23\ U.S. Department of Transportation memorandum, ``Treatment 
of the Economic Value of a Statistical Life in Departmental 
Analyses--2009 Annual Revision.'' Office of the Secretary of 
Transportation, March 18, 2009. http://gov.rosenet.org/uploads/254/treatment_of_a_statistical_life_dot.pdf.
    \24\ Ibid.
---------------------------------------------------------------------------

    The estimated aircraft cost is $18.5 million. The aircraft 
replacement costs are from an FAA guide on economic values in 
regulatory analysis.\25\ The values in the FAA guidance are in 2003 
dollars. In the IFR, TSA inflated these 2003 prices to 2006 price 
levels using the BLS Producer Price Index (PPI) Commodity Data for 
Civilian Aircraft. The final rule inflated them to 2009 dollars using 
the PPI Industry Data for Aircraft Manufacturing of Civilian 
Aircraft.\26\ The eight percent increase from the IFR shows the PPI 
increase for this industry from 2006 to 2009, and is

[[Page 51866]]

consistent across all aircraft types used in the Regulatory Evaluation.
---------------------------------------------------------------------------

    \25\ http://www.faa.gov/regulations_policies/policy_guidance/benefit_cost/media/050404%20Critical%20Values%20Dec%2031%20Report%2007Jan05.pdf.
    \26\ http://bls.gov/ppi/.
---------------------------------------------------------------------------

    Assuming that the aircraft is destroyed and minimal impact damage 
is done, TSA estimates the total direct monetary consequence of the 
attack, the value of the lives on board and the aircraft, at $732.5 
million. Dividing the $732.5 million in estimated direct consequences, 
by the $178.1 (the annualized cost of the rule discounted at seven 
percent), shows that in order for the rule to break even, it will need 
to reduce the existing or baseline frequency of terror attack by one 
attack every 4.1 years ($732.5/$178.1 = 4.1).
    The estimate of the economic impacts of the attack scenarios used 
in these break-even analyses is limited to direct costs only (value of 
casualties and loss of aircraft). This analysis does not consider any 
indirect or macroeconomic consequences these terrorist attacks might 
cause. Consequently, the economic impacts of the terrorist attacks 
estimated for this series of break-even analyses is a lower-bound 
estimate of the economic impact of these attacks. A full discussion of 
the break-even analysis including an analysis of each of the four 
scenarios analyzed is presented in Chapter 4 of the Regulatory 
Evaluation accompanying this rule.

C. Regulatory Flexibility Act Assessment

    Section 604(a) of the Regulatory Flexibility Act (RFA) requires 
that, when an agency promulgates a final rule ``after being required * 
* * to publish a general notice of proposed rulemaking,'' the agency 
must determine whether a proposed or final rule will have a significant 
economic impact on a substantial number of small entities and, if so, 
must prepare a regulatory flexibility analysis as described in the Act. 
Because TSA did not issue a proposed rule prior to this final rule, we 
are not required to perform a Regulatory Flexibility Analysis. Although 
a Regulatory Flexibility Analysis was not prepared, TSA analyzed the 
impact of costs of the program on all CCSFs currently enrolled. This 
analysis is presented in Appendix A of the Regulatory Evaluation 
accompanying this rule.

D. International Trade Impact Assessment

    The Trade Agreements Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States. Legitimate domestic objectives, such as safety, are not 
considered unnecessary obstacles. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards. TSA has assessed the potential 
effect of this final rule and has determined that the same measures 
must apply to both U.S. aircraft operators and foreign air carriers 
loading cargo on passenger aircraft.

E. Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among 
other things, to curb the practice of imposing unfunded Federal 
mandates on State, local, and Tribal governments. Title II of UMRA 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed or final agency rule 
that may result in an expenditure of $100 million or more (adjusted 
annually for inflation) in any one year by State, local, and Tribal 
governments, in the aggregate, or by the private sector, such a mandate 
is deemed to be a ``significant regulatory action''. This final rule 
does not exceed this threshold with respect to State, local, and Tribal 
governments, because it does not require them to take any action. The 
impact on the private sector, however, does exceed the threshold, 
resulting in an unfunded mandate on the private sector; the regulatory 
evaluation documents the costs and alternatives associated with this 
regulatory action.

VIII. Executive Order 13132, Federalism

    TSA has analyzed this final rule under the principles and criteria 
of Executive Order 13132, Federalism. We determined that this action 
will not have a substantial direct effect on the States, or the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government, and, therefore, does not have federalism implications.

IX. Environmental Analysis

    We have analyzed this final rule under DHS Management Directive 
5100.1 ``Environmental Planning Program'' (see also 71 FR 16790, Apr. 
4, 2006), which guides DHS in complying with the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). We have concluded 
that this rule is part of a category of actions described in items A3, 
A4, A7, B3, H1 and H2 of Table 1 in Appendix A of the Management 
Directive. This final rule would not have individually or cumulatively 
a significant effect on the human environment and, therefore, neither 
an environmental assessment nor an environmental impact statement is 
necessary.

X. Energy Impact Analysis

    TSA has assessed the energy impact of this rule in accordance with 
the Energy Policy and Conservation Act (EPCA), Public Law 94-163, as 
amended (42 U.S.C. 6362). We have determined that this rulemaking is 
not a major regulatory action under the provisions of the EPCA.

List of Subjects

49 CFR Part 1515

    Appeals, Commercial driver's license, Criminal history background 
checks, Explosives, Facilities, Hazardous materials, Incorporation by 
reference, Maritime security, Motor carriers, Motor vehicle carriers, 
Ports, Seamen, Security measures, Security threat assessment, Vessels, 
Waivers.

49 CFR Part 1520

    Air transportation, Law enforcement officers, Maritime carriers, 
Reporting and recordkeeping requirements, Security measures.

49 CFR Part 1522

    Accounting, Aircraft operators, Aviation safety, Reporting and 
recordkeeping requirements, Security measures.

49 CFR Part 1540

    Air carriers, Aircraft, Airports, Civil aviation security, Law 
enforcement officers, Reporting and recordkeeping requirements, 
Security measures, Screening.

49 CFR Part 1544

    Air carriers, Aircraft, Aviation safety, Freight forwarders, 
Incorporation by reference, Reporting and recordkeeping requirements, 
Security measures.

49 CFR Part 1546

    Aircraft, Aviation safety, foreign air carriers, Incorporation by 
reference, Reporting and recordkeeping requirements, Security measures.

49 CFR Part 1548

    Air transportation, Aviation safety, Reporting and recordkeeping 
requirements, Security measures.

49 CFR Part 1549

    Air transportation, Reporting and recordkeeping requirements, 
Security measures.

The Amendments

    Under 49 U.S.C. 114(l) and as discussed in the preamble, the 
Transportation Security Administration

[[Page 51867]]

amends Chapter XII, of Title 49, Code of Federal Regulations as 
follows:

SUBCHAPTER A--ADMINISTRATIVE AND PROCEDURAL RULES

PART 1515--APPEAL AND WAIVER PROCEDURES FOR SECURITY THREAT 
ASSESSMENTS FOR INDIVIDUALS

0
1. The authority citation for part 1515 continues to read as follows:

    Authority: 46 U.S.C. 70105; 49 U.S.C. 114, 5103a, 40113, and 
46105; 18 U.S.C. 842, 845; 6 U.S.C. 469.


0
2. Revise Sec.  1515.1(a)(2) to read as follows:


Sec.  1515.1  Scope.

    (a) * * *
    (2) 49 CFR part 1540, subpart C, which includes individuals engaged 
in air cargo operations who work for certain aircraft operators, 
foreign air carriers, indirect air carriers (IACs), or certified cargo 
screening facilities.
* * * * *

0
3. In Sec.  1515.9 remove paragraph (c)(1)(v), and revise paragraphs 
(a)(3) and (f)(3) to read as follows:


Sec.  1515.9  Appeal of security threat assessment based on other 
analyses.

    (a) * * *
    (3) TSA had determined that an individual engaged in air cargo 
operations who works for certain aircraft operators, foreign air 
carriers, IACs, or certified cargo screening facilities, poses a 
security threat as provided in 49 CFR 1549.109.
* * * * *
    (f) * * *
    (3) If TSA withdraws a Determination of No Security Threat for an 
individual engaged in air cargo operations who works for certain 
aircraft operators, foreign air carriers, IACs, or certified cargo 
screening facilities.

0
4. Revise Sec.  1515.11(a)(3) to read as follows:


Sec.  1515.11  Review by administrative law judge and TSA Final 
Decision Maker.

    (a) * * *
    (3) An individual engaged in air cargo operations who works for 
certain aircraft operators, foreign air carriers, IACs, or certified 
cargo screening facilities who has been issued a Final Determination of 
Threat Assessment after an appeal as described in 49 CFR 1515.9.
* * * * *

SUBCHAPTER B--SECURITY RULES FOR ALL MODES OF TRANSPORTATION

PART 1520--PROTECTION OF SENSITIVE SECURITY INFORMATION

0
5. The authority citation for part 1520 continues to read as follows:

    Authority: 46 U.S.C. 70102-70106, 70117; 49 U.S.C. 114, 40113, 
44901-44907, 44913-44914, 44916-44918, 44935-44936, 44942, 46105.


0
6. Revise Sec.  1520.7(b) to read as follows:


Sec.  1520.7  Covered persons.

* * * * *
    (b) Each indirect air carrier (IAC), as described in 49 CFR part 
1548; and each certified cargo screening facility and its personnel, as 
described in 49 CFR part 1549.
* * * * *

PART 1522--[REMOVED]

0
7. Remove part 1522.

SUBCHAPTER C--CIVIL AVIATION AUTHORITY

PART 1540--CIVIL AVIATION AUTHORITY: GENERAL RULES

0
8. The authority citation for part 1540 continues to read as follows:

    Authority:  49 U.S.C. 114, 5103, 40113, 44901-44907, 44913-
44914, 44916-44918, 44935-44936, 44942, 46105.

Subpart C--Security Threat Assessments

0
9. In Sec.  1540.201 remove paragraphs (a)(10), (11), and (12), and 
revise paragraph (a) introductory text and paragraph (b) definition of 
``Operator'' to read as follows:


Sec.  1540.201  Applicability and terms used in this subpart.

    (a) This subpart includes the procedures that certain aircraft 
operators, foreign air carriers, indirect air carriers, and certified 
cargo screening facilities must use to have security threat assessments 
performed on certain individuals pursuant to 49 CFR 1544.228, 1546.213, 
1548.7, 1548.15, 1548.16 and 1549.111. This subpart applies to the 
following:
* * * * *
    (b) * * *
    Operator means an aircraft operator, foreign air carrier, and 
indirect air carrier listed in paragraphs (a)(1) through (a)(3) of this 
section, and a certified cargo screening facility described in 
paragraph (a)(6) of this section.
* * * * *


Sec.  1540.203  [Amended]

0
10. In Sec.  1540.203 remove paragraph (a)(1) and redesignate 
paragraphs (a)(2) through (a)(6) as paragraphs (a)(1) through (a)(5).

0
11. Revise Sec.  1540.209 introductory text and paragraph (c)(1) to 
read as follows:


Sec.  1540.209  Fees for security threat assessment.

    This section describes the payment process for completion of the 
security threat assessments required under this subpart.
* * * * *
    (c) * * *
    (1) The fees required under this subpart must be remitted to TSA in 
a form and manner acceptable to TSA each time the applicant or an 
aircraft operator, foreign air carrier, indirect air carrier, or 
certified cargo screening facility submits the information required 
under Sec.  1540.203 or Sec.  1540.207 to TSA.
* * * * *

PART 1544--AIRCRAFT OPERATOR SECURITY: AIR CARRIERS AND COMMERCIAL 
OPERATORS

0
12. The authority citation for part 1544 continues to read as follows:

    Authority:  49 U.S.C. 114, 5103, 40113, 44901-44905, 44907, 
44913-44914, 44916-44918, 44932, 44935-44936, 44942, 46105.

Subpart C--Operations

0
13. Revise Sec.  1544.105(a) introductory text to read as follows:


Sec.  1544.105  Approval and amendments.

    (a) Initial approval of security program. Unless otherwise 
authorized by TSA, each aircraft operator required to have a security 
program under this part must submit its proposed security program to 
the designated official for approval at least 90 days before the 
intended date of operations. The proposed security program must meet 
the requirements applicable to its operation as described in Sec.  
1544.101. Such requests will be processed as follows:
* * * * *

0
14. Revise Sec.  1544.205(g)(3) to read as follows:


Sec.  1544.205  Acceptance and screening of cargo.

* * * * *
    (g) * * *
    (3) Limitation on who may conduct screening. Screening must be 
conducted by the foreign air carrier on an airport, by another aircraft 
operator or foreign

[[Page 51868]]

air carrier operating under a security program under this chapter with 
a comparable cargo security program on an airport with a complete 
program under 49 CFR part 1542, by a certified cargo screening facility 
in accordance with 49 CFR part 1549, or by TSA.
* * * * *

PART 1546--FOREIGN AIR CARRIER SECURITY

0
15. The authority citation for part 1546 continues to read as follows:

    Authority: 49 U.S.C. 114, 5103, 40113, 44901-44905, 44907, 
44914, 44916-44917, 44935-44936, 44942, 46105.

Subpart C--Operations

0
16. Revise Sec.  1546.205(g)(3) to read as follows:


Sec.  1546.205  Acceptance and screening of cargo.

* * * * *
    (g) * * *
    (3) Limitation on who may conduct screening. Screening must be 
conducted by the foreign air carrier on an airport, by another aircraft 
operator or foreign air carrier operating under a security program 
under this chapter with a comparable cargo security program on an 
airport with a complete program under 49 CFR part 1542, by a certified 
cargo screening facility in accordance with 49 CFR part 1549, or by 
TSA.
* * * * *

PART 1548--INDIRECT AIR CARRIER SECURITY

0
17. The authority citation for part 1548 continues to read as follows:

    Authority:  49 U.S.C. 114, 5103, 40113, 44901-44905, 44913-
44914, 44916-17, 44932, 44935-44936, 46105.


0
18. Revise Sec.  1548.15(a) to read as follows:


Sec.  1548.15  Access to cargo: Security threat assessments for 
individuals having unescorted access to cargo.

    (a) Before an indirect air carrier authorizes and before an 
individual performs a function described in paragraph (b) of this 
section--
    (1) Each individual must successfully complete a security threat 
assessment or comparable security threat assessment described in part 
1540 subpart C of this chapter; and
    (2) Each indirect air carrier must complete the requirements in 
part 1540 subpart C.
* * * * *

PART 1549--CERTIFIED CARGO SCREENING PROGRAM

0
19. The authority citation for 1549 continues to read as follows:

    Authority:  49 U.S.C. 114, 5103, 40113, 44901-44905, 44913-
44914, 44916-44917, 44932, 44935-44936, 46105.

Subpart A--General

0
20. In Sec.  1549.7 revise paragraphs (a)(2)(ii), (a)(3)(ii), (a)(5), 
and (b)(2) to read as follows:


Sec.  1549.7  Approval, amendment, renewal of the security program and 
certification of a certified cargo screening facility.

    (a) * * *
    (2) * * *
    (ii) An applicant must successfully undergo an assessment by TSA.
    (3) * * *
    (ii) The applicant has successfully undergone an assessment by TSA;
    (5) Commencement of operations. The certified cargo screening 
facility may operate under a security program when it meets all TSA 
requirements, including but not limited to an assessment by TSA, 
successful completion of training, and Security Threat Assessments by 
relevant personnel.
* * * * *
    (b) * * *
    (2) The certified cargo screening facility must demonstrate that it 
has successfully undergone a revalidation of its operations by TSA 
prior to the first day of the 36th anniversary month of initial 
approval of its security program.
* * * * *

Subpart B--Operations

0
21. Revise Sec.  1549.105(a)(2) to read as follows:


Sec.  1549.105  Recordkeeping.

    (a) * * *
    (2) Copies of all documents related to applications for, or 
renewals of, TSA certification to operate under part 1549.
* * * * *

    Issued in Arlington, Virginia, on August 10, 2011.
John S. Pistole,
Administrator.
[FR Doc. 2011-20840 Filed 8-17-11; 8:45 am]
BILLING CODE 9110-05-P


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