[Federal Register Volume 75, Number 190 (Friday, October 1, 2010)]
[Proposed Rules]
[Pages 60674-60679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24687]


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DEPARTMENT OF STATE

22 CFR Part 62

[Public Notice: 7077]
RIN 1400-AC67


Exchange Visitor Program--Fees and Charges

AGENCY: U.S. Department of State.

ACTION: Proposed rule with request for comment.

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SUMMARY: The U.S. Department of State (Department) is proposing to 
revise its Fees and Charges assessed for providing Exchange Visitor 
Program (EVP) services to recoup the Department's costs associated with 
operating all aspects of the Exchange Visitor Program.

DATES: The Department will accept comments from the public through 
November 30, 2010.

ADDRESSES: You may submit comments, identified by any of the following 
methods:
    <bullet> Persons with access to the Internet will be able to view 
and comment on the rule and supporting documentation, including the 
supporting cost study, by going to the Regulations.gov Web site http://www.regulations.gov/search/Regs/home.html#home, and searching on docket 
ID DOS-2010-0214.
    <bullet> Mail (paper, disk, or CD-ROM submissions): U.S. Department 
of State, Office of Designation, SA-5, Floor 5, 2200 C Street, NW., 
Washington, DC 20522
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#f3b9b68b909b929d949680b38087928796dd949c85"><span class="__cf_email__" data-cfemail="b3f9f6cbd0dbd2ddd4d6c0f3c0c7d2c7d69dd4dcc5">[email protected]</span></a>. You must include the title 
and RIN (1400-AC67) in the subject line of your message.

FOR FURTHER INFORMATION CONTACT: Stanley S. Colvin, Deputy Assistant 
Secretary for Private Sector Exchange, U.S. Department of State, SA-5, 
Floor 5, 2200 C Street, NW., Washington, DC 20522, 202-632-2805, or 
email at <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="84eee1fce7ece5eae3e1f7c4f7f0e5f0e1aae3ebf2">[email protected]</a>.

SUPPLEMENTARY INFORMATION: Under the authority of Section 810 of the 
United States Information and Educational Exchange Act of 1948, as 
amended, 22 U.S.C. 1475e, and the Independent Offices Appropriations 
Act of 1952 (IOAA), 31 U.S.C. 9701, and following the guidelines set 
forth in Office of Management and Budget (OMB) Circular No. A-25, user 
fees for Exchange Visitor Program Services were adopted for the first 
time in 2000. Regulations adopting sufficient fees to recover the full 
cost of its administrative processing of requests for designation, 
redesignation, and for requests by program participants for certain 
services for which application is required were adopted. OMB Circular 
No. A-25 directs the Agency review of fees and services every two 
years.
    The current fee for an application for designation or an 
application for redesignation is $1,748.00 and the fee for foreign 
national exchange participants requesting individual program services, 
including a change of program category, program extension, 
reinstatement, etc. is currently $246.00 per request. The Department 
proposes amendment of both fees to: $2,700 and $233.00 respectively. 
The new proposed fee for either program designation or redesignation 
will increase by $952 (redesignation is required every two years) while 
the fee assessed program participants will decrease by $13.00. The 
increase in program designation and redesigantion requests is necessary 
to recoup the costs of application reviews, requests for amendments to 
program designations, and allotment requests, as well as the cost for 
enhanced compliance programs, regulatory review and development, 
outreach and general program administration, as explained below. These 
changes are necessary because the current fee for program designation 
and redesignation applications was calculated on a unit cost basis that 
assumed and projected a larger number of such applications than has 
proven to be received.

----------------------------------------------------------------------------------------------------------------
                                                       Current              Proposed          Increase/Decrease
----------------------------------------------------------------------------------------------------------------
Designation/Redesignation.....................             $1,748.00             $2,700.00                  $952
Individual Applications.......................                246.00                233.00                  -$13
----------------------------------------------------------------------------------------------------------------

The U.S. Department of State designates U.S. government, academic, and 
private sector entities to conduct educational and cultural exchange 
programs pursuant to a broad grant of authority provided by the Mutual 
Educational and Cultural Exchange Act of 1961, as amended (Fulbright-
Hays Act), 22 U.S.C. 2451 et seq.; the Immigration and Nationality Act, 
8 U.S.C. 1101(a)(15)(J); the Foreign Affairs Reform and Restructuring 
Act of 1998, Public Law 105-277; as well as other statutory enactments, 
Reorganization Plans and Executive Orders. Under those authorities, 
1,226 sponsor organizations facilitate the entry of more than 300,000 
exchange participants each year.
    The Fulbright-Hays Act is the organic legislation underpinning the 
entire Exchange Visitor Program. Section 101 of that Act sets forth the 
purpose of the Act, viz., ``to enable the Government of the United 
States to increase mutual understanding between the people of the 
United States and the people of other countries by means of educational 
and cultural exchange * * * .'' The Act authorizes the President to 
provide for such exchanges when he considers that it would strengthen 
international cooperative relations. The language of the Act and its 
legislative history make it clear that Congress considered 
international educational and cultural exchanges to be a significant 
part of the public diplomacy efforts of the President in connection 
with his Constitutional prerogatives in conducting foreign affairs.
    On September 27, 1999, the United States Information Agency (USIA) 
issued an interim final rule on the adoption of fees for all requests 
for an

[[Page 60675]]

extension, change of category, reinstatement, or program designation as 
well as for non-routine requests for the then Form IAP-66. This rule 
was to be effective on January 1, 2000. The September 27, 1999 interim 
final rule was amended by a rule dated October 7, 1999 (4 FR 54538), 
and also by a second rule dated January 5, 2000 (65 FR 352). Those 
amendments were required due to the consolidation of USIA into the 
Department of State.
    User fees were adopted for the first time under the authority of 
Section 810 of the United States Information and Educational Exchange 
Act of 1948, as amended, 22 U.S.C. 1475e, and the Independent Offices 
Appropriations Act of 1952 (IOAA), 31 U.S.C. 9701, and following the 
guidelines set forth in Office of Management and Budget (OMB) Circular 
No. A-25. Following the consolidation of USIA operations and two 
regulatory amendments, the Interim Final Rule and the fees established 
under this rule became Final on April 14, 2000, 65 FR 20083.
    In 2006, the Department examined its current Exchange Visitor 
Program fee structure for compliance with applicable laws and policies, 
and to determine the appropriate level of fees given the expansion of 
the offices providing services. This analysis was grounded on the 
guiding principles set forth in the legislative framework and 
authorities cited above, namely, that user fees should be fair and 
reflect the full cost to perform the service; and that services 
performed on behalf of distinct, identifiable beneficiaries (versus the 
public at large) should, to the extent possible, be self-sustaining. As 
a result of the review, it was determined that both additional fee 
categories and increased fees were required, and the Department 
published a final rule on November 1, 2007 (72 FR 61800), which became 
effective December 3, 2007.
    The 2007 fee rule identified the program redesignation process as a 
separate and identifiable service for which the cost of such service 
should be recouped. This fee is collected from some 1226 academic, 
governmental, and private sector sponsor organizations. This fee also 
includes the cost of services arising from a program sponsor's requests 
for amendments to programs, allotment requests, and updates of 
information, as well as the costs for program compliance, regulatory 
review and development, outreach, and general program administration. 
Also established in the 2007 fee rule were fees charged to foreign 
national exchange participants for services provided on an individual 
basis and for the sole benefit of the exchange participant. (i.e., 
requests for exchange visitor status changes of program category, 
extension beyond maximum duration, requests for reinstatement, requests 
to update the Student and Exchange Visitor Information System (SEVIS) 
status, and similar requests). The fees received for these individual 
services also include an apportioned share of costs for regulatory 
review and development, outreach, and general program administration.
    The Department began its biennial review of these established fees 
in 2009 by publishing a solicitation for services to conduct a fee 
study. Deloitte and Touche was awarded a contract. The new proposed fee 
structure was conducted under the guidelines set forth in OMB Circular 
A-25, as well as the Statement of Federal Finance and Accounting 
Standards No. 4 (SFFAS 4). In accordance with SFFAS 4, the Department 
used an ``activity-based costing'' (ABC) approach to develop a 
sustainable cost model to align the costs of the program to the 
specific services performed on behalf of program sponsors and other 
program stakeholders. Activity-based costing is a method of identifying 
the work that is performed, how resources are consumed by that work, 
and how that work contributes to the production of required outputs. 
The ABC methodology enabled the development of a bottom-up budget that 
factored in forecasts for expected demand of program services in the 
years when the fees are effective and would provide the program with 
adequate resources to meet that future program demand. This fee study 
relates only to services provided in the administration of the Exchange 
Visitor Program. The fee study is available for review at http://exchanges.state.gov/jexchanges.

Results of Fiscal Year 2010 Fee Study

Full Cost

    One of the most critical elements in building the cost models to 
determine user fees is to identify all of the sources and the 
appropriate amounts of costs to be included in the analysis. According 
to the legislative and regulatory guidance as documented in the legal 
framework, user charges should be based on the full cost to the 
government of providing the services or things of value. OMB Circular 
A-25 defines full cost as all direct and indirect costs to any part of 
the Federal government of providing a good, resource, or service. These 
costs include, but are not limited to, an appropriate share of:
    <bullet> Direct and indirect personnel costs, including salaries 
and fringe benefits such as medical insurance and retirement.
    <bullet> Physical overhead, consulting, and other indirect costs 
including material and supply costs, utilities, insurance, travel, and 
rents or imputed rents on land, buildings, and equipment.
    <bullet> Management and supervisory costs.
    <bullet> Costs of enforcement, collection, research, establishment 
of standards, and regulation, including any required environmental 
impact statements.
    The generally accepted government accounting practices for 
managerial cost accounting, published in SFFAS 4, provide the standards 
for cost definition, recognition, accumulation and assignment as they 
relate to the recognition of full cost. These standards have been 
applied to the determination of what costs to include in or exclude 
from the Exchange Visitor Program fees.

Cost Model Structure

Model Overview

    In summary, the Cost Accounting Model takes cost data input into 
the ``Civilian Pay Cost Data'', ``Activity Model Cost Pools'', and 
``Other Cost Pools'' modules, assigns direct costs or allocates 
indirect and General and Administrative (G&A) costs using ratios 
derived from the ``SEVIS & FTE (Full Time Equivalent) Data'' module, 
and then uses the direct, indirect, and G&A cost pools to calculate the 
two recommended user fees for the Fiscal Year (FY) 2011-2012 time 
frame.
    The Cost Accounting Model contains eleven modules described in 
detail in the following sections. Most modules include an FY 2011 tab 
and an FY 2012 tab, given the need to enter separate data for each 
fiscal year. The three modules that only have one tab are ``Home'', 
``SEVIS & FTE Data'', and ``Final EVP Fees FY 2011-2012''. The modules 
are sequenced to follow the general flow of calculations performed by 
the model.

Home

    The ``Home'' module is displayed when the user opens the model. 
This module also provides hyperlinks to support navigation to the other 
areas of the model.

Civilian Pay Cost Data FY 2011 & FY 2012

    This module allows the user to enter Civilian Pay data for Private 
Sector Exchange personnel by General Schedule (GS) Level. The Civilian 
Pay data entered is then escalated for benefits. This calculation is 
detailed further in the Cost Accounting Model Data Sources section.

[[Page 60676]]

Activity Model Cost Pools FY 2011 & FY 2012

    This module allows the user to enter Labor Survey results by 
personnel position in the form of percentages. It then multiplies those 
percentages by the escalated salary calculated in the ``Civilian Pay 
Cost Data'' module to create Activity Model Cost Pools. Finally, this 
module includes a self-check feature to verify the completeness and 
accuracy of user entries.

Other Cost Pools FY 2011 & FY 2012

    This module allows the user to enter all other costs associated 
with the EVP, including the following:
    <bullet> Bureau of Educational and Cultural Affairs, Private Sector 
Exchange (ECA/EC) non-labor costs
    <bullet> Bureau of Educational and Cultural Affairs (ECA) labor 
costs
    <bullet> Bureau of Educational and Cultural Affairs (ECA) non-labor 
costs
    <bullet> Department of State labor costs
    <bullet> Department of State non-labor costs

SEVIS & FTE Data

    There is only one tab for the ``SEVIS & FTE Data'' module. It 
allows the user to input SEVIS historical data for Calendar Year (CY) 
2007 through CY 2009, as well as FY 2008 and FY 2009 FTE historical 
data for the following organizational areas:
    <bullet> Bureau of Educational and Cultural Affairs, Private Sector 
Exchange, Office of Designation (ECA/EC/D) and Office of Exchange 
Coordination and Compliance (ECA/EC/ECC)
    <bullet> Human Resources
    <bullet> Support Services
    <bullet> IIP Budget Office (Bureau of International Information 
Programs)
    <bullet> ECA Budget Office
    <bullet> Program Management Office
    <bullet> Bureau of Educational and Cultural Affairs (ECA)
    <bullet> Department of State
    It then uses these inputs to calculate SEVIS activity projections 
for Applications for Designation, Applications for Redesignation, and 
Exchange Visitor Administration Applications for CY 2010 through CY 
2012, and FTE projections for FY 2011 and FY 2012. SEVIS and FTE data 
projections are necessary to create ratios for indirect and G&A cost 
allocation to each fee later in the model.

Cost Assignment & Allocation FY 2011 & FY 2012

    This module pulls the data from the previous modules in order to 
assign direct costs or allocate indirect or G&A costs to each fee. The 
method for allocating indirect and general and administrative (G&A) 
cost took into account the volume of services supported by each user 
fee in terms of SEVIS activity counts. These activity counts can also 
be viewed as the services procured by the user fees. The method in 
which the cost is allocated varies by cost pool:
    (1) For direct costs, the full cost is assigned to the fee for 
which it is determined to be a direct cost.
    (2) For indirect costs, the full cost in each indirect cost pool is 
split and each portion is then assigned to the appropriate user fee. 
This splitting and assignment process is also referred to as cost 
allocation. This process is accomplished by multiplying the total 
indirect cost by the ratio of Total Fee-Related SEVIS Activity Counts 
to Total SEVIS Activity Counts. For example, in order to determine the 
amount of an indirect cost to be applied to the Application Fee, the 
full indirect cost was multiplied by the ratio of Total Application 
Fee-Related SEVIS Activity Counts to Total Activity Counts. This 
allocates the appropriate fraction of the total indirect cost to the 
Application Fee. The same would be done with the ratio of Total 
Administrative Fee-Related SEVIS Activity Counts to Total Activity 
Counts to determine the complimentary fraction of the indirect cost to 
be allocated to the Administrative Fee. In so doing, the full indirect 
cost is appropriately allocated to the two user fees.
    For G&A cost, not all G&A cost is allocated to the two EVP user 
fees since G&A costs support the entire Department not just the cost of 
the activities supporting the EVP. Deloitte allocated appropriate 
portions of total G&A cost to the EVP by either FTE ratios or manual 
percentage as follows:
    <bullet> For ECA/EC non-labor G&A costs, the full cost was 
multiplied by the ratio of ECA/EC/D and ECA/EC/ECC FTEs plus the 
Bureau's Executive Office FTEs to ECA FTEs.
    <bullet> For ECA labor G&A costs, two separate methods were 
applied:

--For ECA Front Office labor G&A costs, the ECA provided manual 
percentages, as these costs represent specific staff positions that 
support the EVP but not in a full-time capacity.
--For all other ECA labor G&A costs, the full G&A labor cost was 
multiplied by the ratio of ECA/EC/D and ECA/EC/ECC FTEs to ECA FTEs 
minus three. The ECA FTE number is subtracted by three because the cost 
for those three positions is already accounted for in the ECA Front 
Office labor G&A costs detailed above.

    <bullet> For ECA non-labor G&A costs, the full non-labor G&A cost 
was multiplied by the ratio of ECA/EC/D and ECA/EC/ECC FTEs to ECA 
FTEs.
    <bullet> For Department labor and non-labor G&A costs, the full 
non-labor G&A cost was multiplied by the ratio of ECA/EC/D and ECA/EC/
ECC FTEs to Department FTEs.
    After completing the calculations just described, the resulting 
portions of the full G&A costs are allocated to each of the fees in the 
same way indirect costs are allocated, using SEVIS activity ratios.
    The following information depicts the above described assignment 
and allocation of costs.

User Fee Cost Pools FY 2011 & FY 2012

    This module pulls data from the ``Cost Assignment & Allocation'' 
module and groups it into total direct, indirect, and G&A cost pools. 
It then divides each of those cost pool amounts by the total projected 
SEVIS activity units to determine each fee's direct, indirect, and G&A 
components. It also sums each of these cost components to provide the 
total for each user fee for FY 2011 and FY 2012. Finally, this module 
includes a self-check feature to verify the completeness and accuracy 
of user entries.

Final EVP Fees FY 2011-2012

    This module adds the total costs and SEVIS Activity Units for FY 
2011 and FY2012 from the ``User Fee Cost Pools'' module in order to 
provide fees that are based on a two-year fee lifecycle consistent with 
the EVP regulatory framework requiring current Program Sponsors to 
apply for Redesignation status every two years. It also includes a 
self-check feature to verify the completeness and accuracy of user 
entries.

Cost Accounting Model Data Sources

Civilian Pay Cost Data

    For the data input in the ``Civilian Pay Cost Data'' module, ECA 
provided Deloitte with each ECA/EC/D and ECA/EC/ECC employee's GS 
level, and then Deloitte used the Step 5 salary assumption for each 
level to determine the salary to be entered for each employee. This 
figure was then escalated by 36.25% to capture benefits. This 
percentage is the guidance given for average benefits escalation in OMB 
Circular A-76 Performance of Commercial Activities, Attachment C--
Calculating Public-Private Competition Costs.

Activity Model Cost Pools

    The only data input in the ``Activity Model Cost Pools'' module is 
the Labor Survey results. This input was

[[Page 60677]]

accomplished by converting the hours each respondent recorded for their 
position and for each activity they performed during the Labor Survey 
into percentages of FTEs.

Other Cost Pools

    For the data input in the ``Other Cost Pools'' module, ECA provided 
Deloitte with budgetary data.
    <bullet> Deloitte used the following methods to derive ECA/EC non-
labor costs:

--Costs associated with the new On-site Review and Site Visit travel 
functions were identified in close consultation with ECA/EC senior 
management. Appropriate estimates were developed for FY 2011 and FY 
2012. See the On-site Review and Site Visit Travel Cost Estimate 
section below.
--ECA provided Deloitte with FY 2009 actual expenses for all other ECA/
EC Non-Labor costs. The FY 2009 Actuals were then escalated by 3% per 
year to determine FY 2011 and FY 2012 cost estimates.

    <bullet> Deloitte used the following methods to derive ECA labor 
costs:

--For ECA Front Office costs for the Deputy Assistant Secretary for 
Private Sector Exchange, the Senior Advisor to the Deputy Assistant 
Secretary, and the Special Assistant to the Deputy Assistant Secretary, 
Deloitte assumed CY 2010 SES-II pay for the DAS and GS15, Step 5 pay 
for the Senior Advisor and GS13, Step 5 for the Special Assistant. 
These salaries were escalated by 36.25% for benefits, and then 
escalated by 3% per year for CY 2011 and CY 2012 estimates.
--For all other ECA labor costs, Deloitte obtained the 2010 Total 
Department Budget from the Department of State Budget in Brief--Fiscal 
Year 2010 and pro-rated that figure by FTEs, and escalated by 3% per 
year for FY 2011 and FY 2012 estimates.

    <bullet> For ECA non-labor costs, ECA/EC approved the use of the FY 
2010 estimates projected by Grant Thornton in its 2006 Exchange Visitor 
Program Fee Study--Final Report (Draft). This figure was then escalated 
by 3% per year for FY 2011 and FY 2012 estimates.
    <bullet> For Department labor costs, Deloitte assumed GS-15, Step 5 
pay with 36.25% benefits escalation for all Categories. These figures 
were then escalated by 3% per year for FY 2011 and FY 2012 estimates.
    <bullet> For Department non-labor costs, Deloitte obtained the 
Total Department-wide GSA Rents from the Department of State Budget in 
Brief--Fiscal Year 2010. This figure was then escalated by 3% per year 
for FY 2011 and FY 2012 estimates.

SEVIS & FTE Data

    ECA/EC provided Deloitte with historical CY 2007 through CY 2009 
SEVIS activity counts associated with each user fee, as well as 
historical ECA and ECA/EC FTE counts. Deloitte obtained historical 
Department FTE levels from the Department of State Congressional Budget 
Justification--Fiscal Year 2010. Deloitte used this data to determine 
projected SEVIS and FTE data in the following manner:

<bullet> For SEVIS data projections, the following method was developed 
and approved by ECA/EC:
--ECA/EC provided CY 2007 through CY 2009 data.
--CY 2009 data cutoff of 16 December 2009 required data adjustment from 
350 to 365 days.
--CY 2007 through CY 2009 data was averaged and a 2% rate of growth was 
applied to determine CY 2010.
--CY 2011 and CY 2012 were each projected with a 2% growth rate over 
the previous year.

    <bullet> For all FTE data projections, Deloitte obtained FY 2008-
2010 Department FTE levels from the Department of State Congressional 
Budget Justification--Fiscal Year 2010. Deloitte calculated a 6.91% 
average growth rate from FY 2008 through FY 2010 for Department total 
FTEs. For fiscal years in each of the below organizational areas where 
FTE data was unavailable, each was projected using this 6.91% growth 
rate year over year. ECA/EC approved of this projection method.
--For ECA/EC/D and ECA/EC/ECC FTEs, ECA/EC provided FY 2009 through 
2011 data; Deloitte used the above method to project FY 2012.
--For the ECA and International Information Programs (IIP) Support 
Offices (ECA-IIP/EX), the ECA-IIP/EX Organizational Chart (September 
2009) provided FY 2009 data; Deloitte used the above method to project 
FY 2010 through FY 2012.
--For ECA FTEs, ECA provided FY 2009 data; Deloitte used the above 
method to project FY 2010 through FY 2012.
--For Department FTEs, the Department of State Congressional Budget 
Justification--Fiscal Year 2010 provided FY 2008 through 2010 data; 
Deloitte used the above method to project FY 2011 through FY 2012.

Travel Cost Estimate

    Deloitte, in close consultation with ECA/EC/D and ECA/EC/ECC, 
developed a travel cost estimate for Site Visits and On-site Reviews. 
These two general categories of travel by government officials to 
Program Sponsor locations will be performed during the FY 2011 and FY 
2012 time frame for which the user fees recommended in this report are 
effective. Site Visits are performed by government officials with 
entities applying for Designation as an EVP Sponsor. On-site Reviews 
will take the form of a Liaison Visit, a Redesignation Review, or a 
Compliance Review. These three types of On-site Reviews are covered in 
more detail below. Site Visits and On-site Reviews, which will be the 
responsibility of ECA/EC/D and ECA/EC/ECC respectively, require travel 
to the potential sponsor or sponsor's place of business. In addition to 
travel to the sponsors' offices, pre-planning analysis and post-travel 
reporting will be completed.

Site Visit Travel Cost Estimate

    In developing the Site Visit Travel Cost Estimate, Deloitte took 
the top 25 states by Program Sponsor activity (exchange visitor 
participant) levels as recorded in SEVIS. In addition to using the top 
25 states, Deloitte also included other states to provide an accurate 
picture across the United States. These assumptions were made because, 
unlike the On-site Review process, Site Visits are planned for entities 
applying for Designation. Since the cities and states where the 
potential Program Sponsors will come from are unknown, this method was 
developed to provide an accurate estimate for costs, while capturing 
most of the states.
    Deloitte mapped appropriate city and state locations based on the 
above analysis and in consultation with ECA/EC for use in determining 
per diem, airfare, car rental, and miscellaneous costs in the same 
manner as the On-site Review Travel Cost Estimate. Deloitte escalated 
FY 2011 and FY 2012 by 3% to give a more accurate cost for those fiscal 
years.
    Through discussions with ECA/EC, Deloitte set the number of Site 
Visit travelers to two per trip and concluded that the travelers would 
range from the GS 9 to 14 levels and include Program Specialists, 
Program Coordinators and Program Officers. Deloitte also concluded that 
procedures for pre-visit preparations would also be developed in close 
coordination with knowledgeable Program Officers and Compliance 
Officers.

On-site Review Travel Cost Estimate

    The On-site Review travel cost estimate is based on visiting the 
top 20 Private Sector Program Sponsors and the top 20 Academic and 
Government Program Sponsors according to Program Sponsor activity 
(exchange visitor

[[Page 60678]]

participant) levels as documented in SEVIS.
    Deloitte determined roundtrip airfare, per diem, rental car, and 
miscellaneous expense costs for single or multiple destination trips. 
Deloitte used the per diem rates for FY 2010 found on the GSA Web site. 
Deloitte also conducted research for roundtrip airfare and car rental 
prices using the kayak.com search engine. Deloitte added all costs, 
including a set cost for miscellaneous items to cover fees for airline 
tickets, copying, business calls, etc., to provide a total trip cost. 
Total trip costs were added together to provide a Total Travel Cost 
Estimate. Deloitte escalated FY 2011 and FY 2012 per diem rates as well 
as airfare and car rental prices by 3% each year to provide a more 
accurate cost for those fiscal years.
    The number of travelers for On-site Reviews depends largely on the 
type of visit or the Program Sponsor. The three types of On-site 
Reviews that any given sponsor could receive are:
    <bullet> Liaison Visits
    <bullet> Redesignation Reviews
    <bullet> Compliance Reviews.
    The primary purpose of a Liaison Visit is to provide ECA/EC with an 
opportunity for outreach and consultation with Program Sponsors. GS 
levels of staff conducting these types of visits can vary depending on 
the purpose of visit and the size of the Program Sponsor. Liaison 
Visits should include meeting key Program Sponsor staff and touring 
facilities, and they may last from a half day to one full day. Staff 
conducting these visits may range from the GS 12 to GS 15 levels, 
depending on the primary purpose.
    The primary purpose of a Redesignation Review is to determine the 
Program Sponsor's continued eligibility and/or suitability as a 
designated sponsor. Redesignation Reviews may last from one to two days 
and should require the participation of both one or more Program 
Officers and one or more Compliance Officers, usually at the GS 12 to 
13 levels, but may also include the GS 9 to 11 levels and the GS 14 
level.
    The primary purpose of a Compliance Review is to visit Program 
Sponsors whose performance and compliance with program regulations has 
come under question. Experience shows that Compliance Reviews may last 
from two to five days and usually require the participation of both one 
or more Program Officers and one or more Compliance Officers, with 
perhaps a supporting Program Coordinator or Program Specialist.

Regulatory Findings

Administrative Procedure Act

    The Department of State is of the opinion that the Exchange Visitor 
Program is a foreign affairs function of the U.S. Government and that 
rules implementing this function are exempt from Sec.  553 (Rulemaking) 
and Sec.  554 (Adjudications) of the Administrative Procedure Act 
(APA). The U.S. Government supervises programs that invite foreign 
nationals to come to the United States to participate in exchange 
visitor programs, either directly or through private sector program 
sponsors or grantees. When problems occur, the U.S. Government often 
has been, and likely will be, held accountable by foreign governments 
for the treatment of their nationals, regardless of who is responsible 
for the problems.
    The purpose of this rule is to set the fees that will fund the 
office Exchange Visitor Program services to 1,226 sponsor organizations 
and 350,000 exchange Visitor Program participants. These services 
include oversight and compliance with program requirements as well as 
the monitoring of programs to ensure the health, safety and well-being 
of foreign nationals entering the United States (these exchange 
programs and participants are often funded by the U.S. Government) 
under the aegis of the Exchange Visitor Program and in furtherance of 
its foreign relations mission. The Department of State represents that 
failure to protect the health and well-being of these foreign nationals 
and their appropriate placement with reputable organizations will have 
direct and substantial adverse effects on the foreign affairs of the 
United States.
    Although the Department is of the opinion that this rule is exempt 
from the rulemaking provisions of the APA, the Department is publishing 
this rule as a proposed rule, with a 60-day provision for public 
comment and without prejudice to its determination that the Exchange 
Visitor Program is a foreign affairs function.

Regulatory Flexibility Act/Executive Order 13272: Small Business

    As discussed above, the Department believes that this proposed rule 
is exempt from the provisions of 5 U.S.C. 553, and that no other law 
requires the Department to give notice of proposed rulemaking. 
Accordingly the Department believes that this proposed rule is not 
subject to the requirements of the Regulatory Flexibility Act (5 U.S.C. 
601, et seq.) or Executive Order 13272, Sec.  3(b).
    Nevertheless, the Department has examined the potential impact of 
this proposed rule on small entities. Entities conducting student 
exchange programs are classified under code number 6117.10 of the North 
American Industry Classification System. Some 5,573 for-profit and tax-
exempt entities are listed as falling within this classification. Of 
this total number of so-classified entities, 1,226 are designated by 
the Department of State as sponsors of an exchange visitor program, 
designated as such to further the public diplomacy mission of the 
Department and U.S. Government through the conduct of people to people 
exchange visitor programs. Of these 1,226 Department designated 
entities, 933 are academic institutions and 293 are for-profit or tax-
exempt entities. Of the 933 academic institutions designated by the 
Department, none are believed to meet the definition of small entity 
for Regulatory Flexibility Act analysis purposes. The RFA utilizes the 
SBA's definition of ``small entities'' for educational institutions, 
which are for-profit entities that have annual revenues of less than $7 
million. The RFA defines ``small organizations'' as any not-for-profit 
educational institution that is independently owned or operated and not 
dominant in its field. Of the 293 for-profit or tax-exempt entities 
designated by the Department, 131 have annual revenues of less than $7 
million, thereby falling within the analysis purview of the Regulatory 
Flexibility Act. Although, as stated above, the Department is of the 
opinion that the Exchange Visitor Program is a foreign affairs function 
of the United States Government and, as such, that this proposed rule 
is exempt from the rulemaking provisions of section 553 of the APA, 
given the projected costs (detailed below) to the approximately 131 
small entities designated to conduct exchange visitor programs, the 
Department has determined that this proposed rule will not have a 
significant economic impact on a substantial number of small entities. 
The Department asks the public to comment on the agency's estimates of 
the numbers of small entities and/or the economic impact of this rule 
on small businesses.

Unfunded Mandates Reform Act of 1995

    This proposed rule will not result in the expenditure by State, 
local and tribal governments, in the aggregate, or by the private 
sector, of $100 million in any year and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the

[[Page 60679]]

Unfunded Mandates Reform Act of 1995.

Executive Order 13175--Consultation and Coordination With Indian Tribal 
Governments

    The Department has determined that this rulemaking will not have 
tribal implications, will not impose substantial direct compliance 
costs on Indian tribal governments, and will not pre-empt tribal law. 
Accordingly, the requirements of Section 5 of Executive Order 13175 do 
not apply to this rulemaking.

Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed rule is not a major rule as defined by 5 U.S.C. 804 
for the purposes of Congressional review of agency rulemaking under the 
Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 
801-808). This rule will not result in an annual effect on the economy 
of $100 million or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
companies to compete with foreign-based companies in domestic and 
export markets.

Executive Order 12866

    As discussed above, the Department is of the opinion that the 
Exchange Visitor Program is a foreign affairs function of the United 
States Government and that rules governing the conduct of this function 
are exempt from the requirements of Executive Order 12866. However, the 
Department has nevertheless reviewed this proposed regulation to ensure 
its consistency with the regulatory philosophy and principles set forth 
in that Executive Order. The Department has examined the economic 
benefits, costs, and transfers associated with this proposed rule, and 
declares that educational and cultural exchanges are both the 
cornerstone of U.S. public diplomacy and an integral component of 
American foreign policy. Though the benefits of these exchanges to the 
United States and its people cannot be monetized, the Department is 
nonetheless of the opinion that these benefits outweigh the costs 
associated with this proposed rule. The Department projects the cost to 
the government of providing Exchange Visitor Program services to be 
$3.4 million annually. This rule will provide an estimated $3.4 million 
annually that will support the operations of the Office of Designation, 
including funds for designation and redesignation, for individual 
exchange participant services, and the appropriate share of costs for 
regulatory review and development, outreach, and general program 
administration. These costs are divided amongst the 1,226 designated 
sponsors who will account for $2.7 million of the total $6.8 million 
over the next two years, with foreign national exchange participants 
requesting individual-based program services accounting for the 
remaining $4.1 million. The actual increase in annual costs per 
designated sponsor is $462 which represents a total annual increase of 
$378,302. The cost to foreign national exchange participants requesting 
program services has been decreased by $13 per transaction. Though the 
costs are borne by sponsors and exchange visitors, a benefit-cost study 
considers these costs to be economic transfers, since money is 
``transferred'' from sponsors and applicants to the Department of 
State, but society as a whole has not gained or lost any resources in 
this transaction. Thus, the Department of State has identified $3.4 
million in economic transfers associated with this rule. The Department 
has not identified any monetized benefits or costs, though it believes 
that the revenue generated by these fees and charges will enable the 
Department to administer an effective program and is essential to 
continuing to support and strengthen the United States' foreign policy 
goal of promoting mutual understanding between the people of the United 
States and other countries.

Executive Order 12988

    The Department has reviewed this regulation in light of sections 
3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, 
minimize litigation, establish clear legal standards, and reduce 
burden.

Executive Orders 12372 and 13132

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement. The 
regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this regulation.

Paperwork Reduction Act

    The information collection requirements contained in this proposed 
rulemaking are pursuant to the Paperwork Reduction Act, 44 U.S.C. 
chapter 35 and OMB Control Number 1405-0147, expiring on September 30, 
2010.

List of Subjects in 22 CFR Part 62

    Cultural Exchange Program.

    Accordingly, 22 CFR part 62 is proposed to be amended as follows:

PART 62--EXCHANGE VISITOR PROGRAM

    1. The authority citation for part 62 is revised to read as 
follows:

    Authority:  8 U.S.C. 1101(a)(15)(J), 1182, 1184, 1258; 22 U.S.C. 
1431-1442, 2451 et seq.; Foreign Affairs Reform and Restructuring 
Act of 1998, Pub. L. 105-277, Div. G, 112 Stat. 2681 et seq.; 
Reorganization Plan No. 2 of 1977, 3 CFR, 1977 Comp. p. 200; E.O. 
12048 of March 27, 1978; 3 CFR, 1978 Comp. p. 168; the Illegal 
Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 
1996, Pub. L. 104-208, Div. C, 110 Stat. 3009-546, as amended; 
Uniting and Strengthening America by Providing Appropriate Tools 
Required to Intercept and Obstruct Terrorism Act of 2001 (USA 
PATRIOT ACT), Pub. L. 107-56, Sec. 416, 115 Stat. 354; and the 
Enhanced Border Security and Visa Entry Reform Act of 2002, Pub. L. 
107-173, 116 Stat. 543.

    2. Section 62.17 is revised to read as follows:


Sec.  62.17  Fees and charges.

    (a) Remittances. Fees prescribed within the framework of 31 U.S.C. 
9701 must be submitted as directed by the Department and must be in the 
amount prescribed by law or regulation.
    (b) Amounts of fees. The following fees are prescribed.
    (1) For filing an application for program designation and/or 
redesignation (Form DS-3036)--$2,700.00.
    (2) For filing an application for exchange visitor status changes 
(i.e., extension beyond the maximum duration, change of category, 
reinstatement, reinstatement-update, SEVIS status, ECFMG sponsorship 
authorization, and permission to issue)--$233.00.

Stanley S. Colvin,
Deputy Assistant Secretary for Private Sector Exchange, Bureau of 
Educational and Cultural Affairs, Department of State.
[FR Doc. 2010-24687 Filed 9-30-10; 8:45 am]
BILLING CODE 4710-05-P


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