User Charges, 4332-4335 [06-730]
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Federal Register / Vol. 71, No. 17 / Thursday, January 26, 2006 / Proposed Rules
(2) Create a serious inconsistency or
otherwise interfere with an action taken
or planned by another Agency;
(3) Materially alter the budgetary
impact of entitlements, grants, user fees,
or loan programs, or the rights and
obligations of recipients thereof; or
(4) Raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in this Executive Order.
DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 204
[DoD–2006–OS–0005]
RIN 0790–AH93
User Charges
Department of Defense.
Proposed rule.
AGENCY:
ACTION:
SUMMARY: The Department of Defense is
revising 32 CFR Part 204 to better align
it with OMB Circular A–25, ‘‘User
Charges.’’ This part provides guidelines
to establish appropriate charges for
authorized services supplied by
Department of Defense organizations
when such services provide special
benefits to an identifiable recipient
beyond those that accrue to the general
public.
DATES: Comments must be received by
March 27, 2006.
ADDRESSES: You may submit comments,
identified by docket number and or RIN
number and title, by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Federal Docket Management
System Office, 1160 Defense Pentagon,
Washington, DC 20301–1160.
Instructions: All submissions received
must include the agency name and
docket number or Regulatory
Information Number (RIN) for this
Federal Register document. The general
policy for comments and other
submissions from members of the public
is to make these submissions available
for public viewing on the Internet at
https://regulations.gov as they are
received without change, including any
personal identifiers or contact
information.
FOR FURTHER INFORMATION CONTACT:
Mr.
T. Summers, 706–697–3193.
SUPPLEMENTARY INFORMATION:
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Executive Order 12866, ‘‘Regulatory
Planning and Review’’
It has been determined that 32 Code
of Federal Regulations (CFR) Part 204 is
not a significant regulatory action. The
rule does not:
(1) Have an annual effect to the
economy of $100 million or more or
adversely affect, in a material way, the
economy; a section of the economy;
productivity; competition; jobs; the
environment; public health or safety; or
State, local, or tribal governments or
communities;
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Unfunded Mandates Reform Act (Sec.
202, Pub. L. 104–4)
It has been certified that this rule does
not contain a Federal mandate that may
result in the expenditure by State, local
and tribal governments, in aggregate, or
by the private sector, of $100 million or
more in any one year.
Public Law 96–354, ‘‘Regulatory
Flexibility Act’’ (5 U.S.C. 601)
It has been certified that 32 CFR part
204 is not subject to the Regulatory
flexibility Act (5 U.S.C. 601) because it
would not, if promulgated, have a
significant economic impact on a
substantial number of small entities.
The rule being promulgated provides
guidelines to establish appropriate
charges for authorized services supplied
by Department of Defense organizations
when such services provide special
benefits to an identifiable recipient
beyond those that accrue to the general
public.
Public Law 96–511, ‘‘Paperwork
Reduction Act’’ (44 U.S.C. Chapter 35)
It has been certified that 32 CFR Part
204 does not impose any reporting or
recordkeeping requirements under the
Paperwork Reduction Act of 1995.
Executive Order 13132, ‘‘Federalism’’
It has been certified that this rule does
not have federalism implications, as set
forth in Executive Order 13132. This
rule does not have substantial direct
effects on:
(1) The States;
(2) The relationship between the
National Government and the States; or
(3) The distribution of power and
responsibilities among the various
levels of government.
List of Subjects in 32 CFR Part 204
Accounting, Armed forces,
Government property.
Accordingly, 32 CFR Part 204 is
proposed to be revised to read as
follows:
PART 204—USER CHARGES
Sec.
204.1
204.2
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Purpose.
Applicability.
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204.3 Policy and procedures.
204.4 Responsiblities.
204.5 Charges and fees.
204.6 Collections.
204.7 Legislative proposals.
204.8 Benefits for which no charge shall be
made.
Authority: 31 U.S.C. 9701.
§ 204.1
Purpose.
This part implements the Department
of Defense (DoD) program under Title
31, United States Code, section 9701
and Office of Management and Budget
(OMB) Circular No. A–25, ‘‘User
Charges,’’ to establish appropriate
charges for authorized services supplied
by DoD organizations.
§ 204.2
Applicability.
This part applies to the Office of the
Secretary of Defense, the Military
Departments, the Chairman of the Joint
Chiefs of Staff, the Combatant
Commands, and the Defense Agencies
(hereafter referred to collectively as
‘‘Dod Components’’). None of the
provisions in this part should be
construed as giving authority for the
sale or lease of property, or the
rendering of special services. Actions to
convey such special benefits must be
authorized by separate authority. This
user charge policy is applicable except
when other statutes or directives
specifically direct other practices or
procedures.
§ 204.3
Policy and procedures.
(a) General. It is DoD policy not to
compete unfairly with available
commercial facilities in providing
special services or in the sale or lease of
property to private parties and agencies
outside the Federal Government.
However, when a service (or privilege)
provides special benefits to an
identifiable recipient, beyond those that
accrue to the general public, a charge
shall be imposed (to recover the full cost
to the Federal Government for providing
the special benefit, or the market price),
except as otherwise approved by the
Under Secretary of Defense
(Comptroller) and authorized by the
Director of the OMB. A special benefit
will be considered to accrue, and a user
charge shall be imposed, when a
Government service:
(1) Enables the beneficiary to obtain
more immediate or substantial gain or
values (which may or may not be
measurable in monetary terms) than
those which accrue to the general
public; or
(2) Provides business stability or
contributes to public confidence in the
business activity of the beneficiary (e.g.,
insuring deposits in commercial banks),
or
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Federal Register / Vol. 71, No. 17 / Thursday, January 26, 2006 / Proposed Rules
(3) Is performed at the request of or
for the convenience of the recipient, and
is beyond the services regularly received
by other members of the same industry
or group or by the general public (e.g.,
receiving a passport, visa, airman’s
certificate, or a Custom’s inspection
after regular duty hours).
(b) Costing. (1) Except as provided in
§ 204.3(c) and § 204.8, a user charge
shall be imposed to recover the full cost
to the Federal Government of providing
the service, resource, or good when the
Government is acting in its capacity as
sovereign.
(2) User charges shall be based on
market prices (as defined in
§ 204.5(a)(4)) when the Government is
not acting in its capacity as sovereign
and is leasing or selling goods or
resources, or is providing a service (e.g.,
leasing space in federally owned
buildings). Under these business-type
conditions, user charges need not be
limited to the recovery of full cost and
may yield net revenues.
(3) User charges will be collected in
advance of, or simultaneously with, the
rendering of services unless
appropriations and authority are
provided in advance to allow
reimbursable services.
(4) Whenever possible, charges should
be set as rates rather than fixed dollar
amounts in order to adjust for changes
in costs to the Government or changes
in market prices of the good, resource,
or service provided.
(c) Exclusions (1) The provisions of
this part to not apply when other
statutes or DoD issuances require
different practices or procedures, such
as for:
(i) Morale, welfare, and recreation
services to military personnel and
civilian employees of the Department of
Defense and other services provided
according to § 204.8.
(ii) Sale or disposal of surplus
property under approved programs
(Chapter 5 of DoD 7000.14–R 1).
(iii) Services furnished the general
public relating to, or in furtherance of,
the Armed Forces recruiting program.
(iv) Services furnished to
representatives of the public
information media in the interest of
public understanding of the Armed
Forces.
(v) Armed Forces participation in
public events. Charges for such
participation are governed by the
provisions of DoD Instruction 5410.19.2
(vi) Records made available to the
public, under the Freedom of
1 Copies may be obtained at https://www.dtic.mil/
whs/directives/.
2 See footnote 1 to § 204.3(c)(1)(ii).
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Information Act, pursuant to DoD
Directive 5400.7.3 Charges for such
record searches and copies of records
are governed by Chapter 6 of DoD
5400.7d–R.4
(vii) Services furnished to nonFederal audio-visual media. Charges for
such services are governed by the
provisions of DoD Instruction 5410.15.5
(viii) Government-developed
computer programs released to nonFederal customers. Charges for software
packages are governed by DoD
Instruction 7930.2.6
(ix) Pricing of performance by DoD
Working Capital Fund activities which
shall be according to Volume 11B of
DoD 7000.14–R.
(x) Foreign Military Sales of Defense
articles and services which shall be
according to Volume 15 of DoD
7000.14–R.
(xi) Records made available to Privacy
Act requesters shall be according to DoD
Directive 5400.11 7 and DoD 5400.11–
R.8
(2) User charges may be waived by the
Head of a DoD Component when:
(i) Furnishing of their service without
charge is an appropriate courtesy to a
foreign government or international
organization, or comparable fees are set
on a reciprocal basis with a foreign
country.
(ii) The Director of the OMB has
approved a request for an exception.
Such exceptions may be recommended
when:
(A) The cost of collecting the fees
would represent an unduly large part of
the receipts from the activity; or
(B) Any other conditions exists that,
in the opinion of the Head of the DoD
Component of his designee, justifies the
exception.
§ 204.4
Responsibilities.
(a) The USD(C) shall develop and
monitor policies governing user charges.
(b) The Heads of the DoD
Components, or designees, shall:
(1) Identify each service or activity
that may properly be the subject of a
user charge under this part.
(2) Determine the extent of the special
benefit provided.
(3) Apply the principles specified in
§ 204.5(a) in determining full cost or
market price.
(4) Review the user charges
biennially, to include:
3 See
footnote 1 to § 204.3(c)(1)(ii).
footnote 1 to § 204.3(c)(1)(ii).
5 See footnote 1 to § 204.3(c)(1)(ii).
6 See footnote 1 to § 204.3(c)(1)(ii).
7 See footnote 1 to § 204.3(c)(1)(ii).
8 See footnote 1 to § 204.3(c)(1)(ii).
4 See
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(i) Assurance that existing charges are
adjusted to reflect unanticipated
changes in costs or market values; and
(ii) A review of all other programs to
determine whether fees should be
assessed for Government services or the
user of Government goods or services.
DoD Components should discuss the
results of the annual review of user fees
and any resultant proposals in the Chief
Financial Officers Annual Report
required by the Chief Financial Officers
Act of 1990.
(5) Initiate exception actions outlined
in § 204.3(c)(2). All such actions shall be
coordinated with the USD(C) prior to
forwarding to the OMB.
(i) Exceptions granted under
§ 204.3(c)(2)(i) shall be renewed every
four years to ensure that conditions
warrant their continuation.
(ii) Exceptions granted under
§ 204.3(c)(2)(ii) shall be resubmitted for
approval to the OMB every 4 years
when conditions warrant their
continuation.
(6) Maintain readily accessible
records of:
(i) The services or activities covered
by this part.
(ii) The extent of special services
provided.
(iii) The exceptions to the general
policy of this part.
(iv) The information used to establish
charges and the specific methods used
in their determination.
(v) The collections from each user
charge imposed.
(7) Maintain adequate records of the
information used to establish charges
and provide them upon request to OMB
for the evaluation of the schedules and
provide data on user charges to OMB
according to the requirements in
Circular No. A–11.
(8) Develop legislative proposals as
outlined in § 204.7 when they are
statutory prohibitions or limitations on
the assessment of user charges.
§ 204.5
Charges and fees.
(a) General. (1) All charges and fees
shall be based on total cost to the U.S.
Government or market price, whichever
applies.
(2) ‘‘Full cost’’ includes all direct and
indirect costs associated with providing
a good, resource, or service. These costs
are outlined in Volume 11A, Chapter 1,
paragraph 010203 of DoD 7000.14–R).
(3) Full cost shall be determined or
estimated from the best available
records, and new cost accounting
systems shall not be established solely
for this purpose.
(4) ‘‘Market price’’ means the price for
a good, resource, or service that is based
on competition in open markets, and
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creates neither a shortage nor a surplus
of the good, resource, or service.
(i) When a substantial competitive
demand exists for a good, resource, or
service, its market price will be
determined using commercial practices,
for example:
(A) By competitive bidding; or
(B) By reference to prevailing prices
in competitive markets for goods
resources, or services that are the same
or similar to those provided by the
Government (e.g., campsites or grazing
lands in the general vicinity of private
ones) with adjustments as appropriate
that reflect demand, level of service, and
quality of the good or service.
(ii) In the absence of substantial
competitive demand, market price will
be determined by taking into account
the prevailing prices for goods
resources, or services that are the same
or substantially similar to those
provided by the Government, and then
adjusting the supply made available
and/or price of the good, resource, or
service so that there will be nether a
shortage nor a surplus (e.g., campsites in
remote areas).
(5) Charges and fees established in
advance of performance shall be based
on the estimated cost of performance
Projected amounts shall be reviewed
biennially or whenever significant
changes in cost or value occur.
(6) Management controls (see DoD
Directive 5010.38 9) must be established
to ensure that charges and fees are
developed and adjusted, using current,
accurate, and complete data, to provide
reimbursement conforming to statutory
requirements. These controls also must
ensure compliance with cash
management and debt collection
policies according to Volume 5 of DoD
7000.14–R.
(b) Information resources. These
charges for services provided by data
processing activities shall be
determined by using the costs
accumulated pursuant to requirements
in OMB Circular A–130, ‘‘Management
of Federal Information Resources.’’
(c) User fees for recurring services
shall be established in advance, when
feasible.
(d) Lease or sale of property. Charges
for lease or sale of property shall be
based on the following:
(1) Leases of military equipment or
real estate. (i) In cases involving the
lease or rental of military equipment,
when there is no commercial
counterpart, the charge will be based on
the procedures attached in Volume 11A,
Chapter 1, paragraph 010203.I of DoD
7000.14–R. The current interest rate in
9 See
footnote 1 to § 204.3(c)(1)(ii).
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OMB Circular A–94 will be used in the
computation of interest on investment
in assets. In determining the value,
consideration may be given to the
responsibility of the lessee to assume
the risk of loss or damage to the
property and to held the government
harmless against claims or liabilities by
the lessee or third parties.
(ii) In cases involving real estate
outgrants the consideration for a lease
shall be determined by appraisal of fair
market rental value according to 10
U.S.C. 2667.
(2) Sale of property. When there is
legal authority to sell property to the
public, the selling price of the property
and related accessorial and
administrative costs shall be computed
according to Volume 11A, Chapter 1 of
DoD 7000.14–R.
§ 204.6
Collections.
(a) Collections of charges and fees will
be made in advance or simultaneously
with the rendering of service unless
appropriations and authority allow
otherwise. The policies in this part,
Volume 5 of DoD 7000.14–R, and DoD
Directive 5010.38, shall be used in
accounting, controlling, and managing
cash and debt collections.
(b) Unless a statute provides
otherwise, user charge collections will
be credited to the general fund of the
Treasury as miscellaneous receipts, as
required by 31 U.S.C. 3302.
§ 204.7
Legislative proposals.
(a) Legislative proposals that allow
the DoD Component to retain
collections may be appropriate when a
fee is levied in order to finance a service
that is intended to be provided on a
substantially self-sustaining basis and
thus is dependent upon adequate
collections.
(1) The authority to use fees credited
to an appropriation is generally subject
to limits set in annual appropriations
language. However, it may be
appropriate to request exemption from
annual appropriations control, if a
provision of the service is dependent on
demand that is irregular or
unpredictable (e.g., a fee to reimburse an
agency for the cost of overtime pay of
inspectors for services performed after
regular duty hours).
(2) Legislative proposals that permit
fees to be credited to accounts shall be
consistent with the full-cost recovery
guidelines contained in this part. Any
fees in excess of full cost recovery and
any increase in fees to recover the
portion of retirement costs which
recoups all (funded or unfunded)
accrual costs not covered by employee
contributions are to be credited to the
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general fund of the Treasury as
miscellaneous receipts.
(b) Where the retention of the
collections is appropriate, the DoD
Components(s) concerned may submit
appropriate legislative proposals under
applicable legislative procedures
included in OMB Circular A–19. These
procedures may be obtained from the
Office of Legislative Counsel, General
Counsel, 1600 Defense Pentagon,
Washington, DC 20301–1600. Proposals
to remove user fee restrictions or retain
collections shall:
(1) Define in general terms the
services for which charges will be
assessed and the pricing mechanism
that will be used.
(2) Specify whether fees will be
collected in advance of, or
simultaneously with, the provision of
service unless appropriations and
authority are provided in advance to
allow reimbursable services.
(3) Specify where collections will be
credited. Legislative proposals should
not normally specify precise charges.
The user charge schedule should be set
by regulation to allow for the
administrative updating of fees to reflect
changing costs and market values.
§ 204.8 Benefits for which no charge shall
be made.
(a) Documents and information
requested by members of the Armed
Forces when the documents or
information requested is required by
such personnel in their capacity as
Service members.
(b) Documents and information
requested by members of the Armed
Forces who are in a casualty status, or
requested by their next of kin or legal
representative.
(c) The provisions of the address of
record of a member or former member
of the Armed Forces when the address
is readily available through a directory
(locator) service, and when the address
is requested by a member of the Armed
Forces or by a relative or a legal
representative of a member of the
Armed Forces, or when the address of
record is requested by any source for the
purpose of paying monies or forwarding
property to a member or former member
of the Armed Forces.
(d) Services requested by, or on behalf
of, a member or former member of the
Armed Forces and civilian personnel of
the Department of Defense (where
applicable) or, if deceased, his or her
next of kin or legal representative that
pertain to the provision of:
(1) Information required to obtain
financial benefits regardless of the terms
of separation from the Service.
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(2) Document showing membership
and military record in the Armed Forces
if discharge or release was under
honorable conditions, except as shown
in paragraphs (d)(1) and (d)(4) of this
section.
(3) Information relating to a
decoration or award or required for
memoralization purposes.
(4) Information relating to the review
or change in type of discharge or
correction of records.
(5) Personal documents, such as birth
certificates, when such documents are
required to be furnished by the member.
(6) Services that are furnished free
according to statutes or Executive
Orders.
(7) Information from or copies of
medical and dental records or x-ray
films of patients or former patients of
military medical or dental facilities,
when such information is required for
further medical or dental care, and
requests for such data are submitted by
an accredited medical facility,
physician, or dentist, or requested by
the patient, his or her next of kin, or
legal representative. Other requests
subject to the Privacy Act shall be
according to DoD 5400.11–R, ‘‘DoD
Privacy Act Program’’ (see
§ 204.3(c)(1)(xi) of this part).
(8) Services requested by, and
furnished to, a member of Congress for
official use.
(9) Services requested by state,
territorial, county, or municipal
government, or an agency thereof, that
is performing a function related to or
furthering a DoD objective.
(10) Services requested by a court,
when such services will serve as a
substitute for personal court appearance
of a military or civilian employee of the
Department of Defense.
(11) Services requested by a nonprofit
organization that is performing a
function related to or furthering an
objective of the Federal Government or
that is in the interest of public health
and welfare, including education.
(12) Services requested by donors in
connection with the conveyance or
transfer of a gift to the Department of
Defense.
(13) Occasional and incidental
services (including requests from
residents of foreign countries), that are
not requested often, when it is
determined administratively that a fee
would be inappropriate for the
occasional and incidental services
rendered.
(14) Administrative services offered
by reference or reading rooms to inspect
public records, excluding copies of
records or documents furnished.
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(15) Services rendered in response to
requests for classification review of DoD
classified records, submitted under
Executive Order 12065, ‘‘National
Security Information,’’ and
implemented by DoD 5200.1–R. Such
services consist of the work performed
in conducting the classification review
or in granting and completing an appeal
from a denial of declassification
following such review.
(16) Services of a humanitarian nature
performed in such emergency situations
as life-saving transportation for nonArmed Forces patients, search and
rescue operations, and airlift of
personnel and supplies to a disaster site.
This does not mean that inter- and intragovernmental agreements to recover all
or part of costs shall not be negotiated.
Rather, it means the recipients or
beneficiary will not be assessed a ‘‘user
charge.’’
Dated: January 20, 2006.
L.M. Bynum,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
[FR Doc. 06–730 Filed 1–25–06; 8:45 am]
BILLING CODE 5001–06–M
OFFICE OF MANAGEMENT AND
BUDGET
Office of Federal Procurement Policy
48 CFR Part 9904
Cost Accounting Standards Board;
Accounting for Insurance Costs
Cost Accounting Standards
Board, Office of Federal Procurement
Policy, OMB.
ACTION: Staff discussion paper.
4335
attachment readable in either MS Word
or Corel WordPerfect. Please include
your name, title, organization, postal
address, telephone number, and e-mail
address in the text of the message.
Comments may also be submitted via
facsimile to (202) 395–5105.
FOR FURTHER INFORMATION CONTACT: Rein
Abel, Cost Accounting Standards Board
(telephone: 202–395–3254).
SUPPLEMENTARY INFORMATION:
A. Regulatory Process
The Board’s rules, regulations and
Standards are codified at 48 CFR
Chapter 99. The Office of Federal
Procurement Policy Act, 41 U.S.C.
422(g)(1), requires the Board, prior to
the establishment of any new or revised
CAS, to complete a prescribed
rulemaking process. The process
generally consists of the following four
steps:
1. Consult with interested persons
concerning the advantages,
disadvantages and improvements
anticipated in the pricing and
administration of government contracts
as a result of the adoption of a proposed
Standard (e.g., prepare and publish a
SDP).
2. Promulgate an Advance Notice of
Proposed Rulemaking (ANPRM).
3. Promulgate a Notice of Proposed
Rulemaking (NPRM).
4. Promulgate a Final Rule.
This SDP is issued by the Board in
accordance with the requirements of 41
U.S.C. 422(g)(1)(B), and is step one of
the four-step process.
AGENCY:
B. Background and Summary
SUMMARY: The Cost Accounting
Standards (CAS) Board, Office of
Federal Procurement Policy, invites
public comments on the staff discussion
paper (SDP) regarding CAS 416,
‘‘Accounting for Insurance Costs.’’ In
particular, this staff discussion paper
addresses the use of the term
‘‘catastrophic losses’’ in CAS 416–
50(b)(1).
DATES: Comments must be in writing
and must be received by March 27,
2006.
ADDRESSES: Due to delays in OMB’s
receipt and processing of mail,
respondents are strongly encouraged to
submit comments electronically to
ensure timely receipt. Electronic
comments may be submitted to
casb2@omb.eop.gov. Please put the full
body of your comments in the text of the
electronic message and also as an
The Office of Federal Procurement
Policy, Cost Accounting Standards
Board, is releasing a SDP on the use of
the term ‘‘catastrophic losses’’ in CAS
416–50(b)(1). Section 26(g)(1) of the
Office of Procurement Policy Act, 41
U.S.C. 422(g)(1), requires that the Board,
prior to the promulgation of any new or
revised CAS, consult with interested
persons concerning the advantages,
disadvantages, and improvements
anticipated in the pricing and
administration of Government contracts
as a result of the adoption or revision of
an existing Standard. The purpose of the
SDP is to solicit public views with
respect to the Board’s consideration of
whether the word ‘‘catastrophic’’ should
be replaced with a term such as
‘‘significant’’ or ‘‘very large’’ in 48 CFR
9904.416–50(b)(1) in order to (a) more
closely align the Standard with what
was intended by its original
promulgators and (b) eliminate any
confusion between 48 CFR 9904.416
and FAR 31.205–19, Insurance cost.
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[Federal Register Volume 71, Number 17 (Thursday, January 26, 2006)]
[Proposed Rules]
[Pages 4332-4335]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-730]
[[Page 4332]]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 204
[DoD-2006-OS-0005]
RIN 0790-AH93
User Charges
AGENCY: Department of Defense.
ACTION: Proposed rule.
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SUMMARY: The Department of Defense is revising 32 CFR Part 204 to
better align it with OMB Circular A-25, ``User Charges.'' This part
provides guidelines to establish appropriate charges for authorized
services supplied by Department of Defense organizations when such
services provide special benefits to an identifiable recipient beyond
those that accrue to the general public.
DATES: Comments must be received by March 27, 2006.
ADDRESSES: You may submit comments, identified by docket number and or
RIN number and title, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Federal Docket Management System Office, 1160
Defense Pentagon, Washington, DC 20301-1160.
Instructions: All submissions received must include the agency name
and docket number or Regulatory Information Number (RIN) for this
Federal Register document. The general policy for comments and other
submissions from members of the public is to make these submissions
available for public viewing on the Internet at https://regulations.gov
as they are received without change, including any personal identifiers
or contact information.
FOR FURTHER INFORMATION CONTACT: Mr. T. Summers, 706-697-3193.
SUPPLEMENTARY INFORMATION:
Executive Order 12866, ``Regulatory Planning and Review''
It has been determined that 32 Code of Federal Regulations (CFR)
Part 204 is not a significant regulatory action. The rule does not:
(1) Have an annual effect to the economy of $100 million or more or
adversely affect, in a material way, the economy; a section of the
economy; productivity; competition; jobs; the environment; public
health or safety; or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another Agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs, or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.
Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4)
It has been certified that this rule does not contain a Federal
mandate that may result in the expenditure by State, local and tribal
governments, in aggregate, or by the private sector, of $100 million or
more in any one year.
Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
It has been certified that 32 CFR part 204 is not subject to the
Regulatory flexibility Act (5 U.S.C. 601) because it would not, if
promulgated, have a significant economic impact on a substantial number
of small entities. The rule being promulgated provides guidelines to
establish appropriate charges for authorized services supplied by
Department of Defense organizations when such services provide special
benefits to an identifiable recipient beyond those that accrue to the
general public.
Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)
It has been certified that 32 CFR Part 204 does not impose any
reporting or recordkeeping requirements under the Paperwork Reduction
Act of 1995.
Executive Order 13132, ``Federalism''
It has been certified that this rule does not have federalism
implications, as set forth in Executive Order 13132. This rule does not
have substantial direct effects on:
(1) The States;
(2) The relationship between the National Government and the
States; or
(3) The distribution of power and responsibilities among the
various levels of government.
List of Subjects in 32 CFR Part 204
Accounting, Armed forces, Government property.
Accordingly, 32 CFR Part 204 is proposed to be revised to read as
follows:
PART 204--USER CHARGES
Sec.
204.1 Purpose.
204.2 Applicability.
204.3 Policy and procedures.
204.4 Responsiblities.
204.5 Charges and fees.
204.6 Collections.
204.7 Legislative proposals.
204.8 Benefits for which no charge shall be made.
Authority: 31 U.S.C. 9701.
Sec. 204.1 Purpose.
This part implements the Department of Defense (DoD) program under
Title 31, United States Code, section 9701 and Office of Management and
Budget (OMB) Circular No. A-25, ``User Charges,'' to establish
appropriate charges for authorized services supplied by DoD
organizations.
Sec. 204.2 Applicability.
This part applies to the Office of the Secretary of Defense, the
Military Departments, the Chairman of the Joint Chiefs of Staff, the
Combatant Commands, and the Defense Agencies (hereafter referred to
collectively as ``Dod Components''). None of the provisions in this
part should be construed as giving authority for the sale or lease of
property, or the rendering of special services. Actions to convey such
special benefits must be authorized by separate authority. This user
charge policy is applicable except when other statutes or directives
specifically direct other practices or procedures.
Sec. 204.3 Policy and procedures.
(a) General. It is DoD policy not to compete unfairly with
available commercial facilities in providing special services or in the
sale or lease of property to private parties and agencies outside the
Federal Government. However, when a service (or privilege) provides
special benefits to an identifiable recipient, beyond those that accrue
to the general public, a charge shall be imposed (to recover the full
cost to the Federal Government for providing the special benefit, or
the market price), except as otherwise approved by the Under Secretary
of Defense (Comptroller) and authorized by the Director of the OMB. A
special benefit will be considered to accrue, and a user charge shall
be imposed, when a Government service:
(1) Enables the beneficiary to obtain more immediate or substantial
gain or values (which may or may not be measurable in monetary terms)
than those which accrue to the general public; or
(2) Provides business stability or contributes to public confidence
in the business activity of the beneficiary (e.g., insuring deposits in
commercial banks), or
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(3) Is performed at the request of or for the convenience of the
recipient, and is beyond the services regularly received by other
members of the same industry or group or by the general public (e.g.,
receiving a passport, visa, airman's certificate, or a Custom's
inspection after regular duty hours).
(b) Costing. (1) Except as provided in Sec. 204.3(c) and Sec.
204.8, a user charge shall be imposed to recover the full cost to the
Federal Government of providing the service, resource, or good when the
Government is acting in its capacity as sovereign.
(2) User charges shall be based on market prices (as defined in
Sec. 204.5(a)(4)) when the Government is not acting in its capacity as
sovereign and is leasing or selling goods or resources, or is providing
a service (e.g., leasing space in federally owned buildings). Under
these business-type conditions, user charges need not be limited to the
recovery of full cost and may yield net revenues.
(3) User charges will be collected in advance of, or simultaneously
with, the rendering of services unless appropriations and authority are
provided in advance to allow reimbursable services.
(4) Whenever possible, charges should be set as rates rather than
fixed dollar amounts in order to adjust for changes in costs to the
Government or changes in market prices of the good, resource, or
service provided.
(c) Exclusions (1) The provisions of this part to not apply when
other statutes or DoD issuances require different practices or
procedures, such as for:
(i) Morale, welfare, and recreation services to military personnel
and civilian employees of the Department of Defense and other services
provided according to Sec. 204.8.
(ii) Sale or disposal of surplus property under approved programs
(Chapter 5 of DoD 7000.14-R \1\).
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\1\ Copies may be obtained at https://www.dtic.mil/whs/
directives/.
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(iii) Services furnished the general public relating to, or in
furtherance of, the Armed Forces recruiting program.
(iv) Services furnished to representatives of the public
information media in the interest of public understanding of the Armed
Forces.
(v) Armed Forces participation in public events. Charges for such
participation are governed by the provisions of DoD Instruction
5410.19.\2\
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\2\ See footnote 1 to Sec. 204.3(c)(1)(ii).
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(vi) Records made available to the public, under the Freedom of
Information Act, pursuant to DoD Directive 5400.7.\3\ Charges for such
record searches and copies of records are governed by Chapter 6 of DoD
5400.7d-R.\4\
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\3\ See footnote 1 to Sec. 204.3(c)(1)(ii).
\4\ See footnote 1 to Sec. 204.3(c)(1)(ii).
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(vii) Services furnished to non-Federal audio-visual media. Charges
for such services are governed by the provisions of DoD Instruction
5410.15.\5\
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\5\ See footnote 1 to Sec. 204.3(c)(1)(ii).
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(viii) Government-developed computer programs released to non-
Federal customers. Charges for software packages are governed by DoD
Instruction 7930.2.\6\
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\6\ See footnote 1 to Sec. 204.3(c)(1)(ii).
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(ix) Pricing of performance by DoD Working Capital Fund activities
which shall be according to Volume 11B of DoD 7000.14-R.
(x) Foreign Military Sales of Defense articles and services which
shall be according to Volume 15 of DoD 7000.14-R.
(xi) Records made available to Privacy Act requesters shall be
according to DoD Directive 5400.11 \7\ and DoD 5400.11-R.\8\
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\7\ See footnote 1 to Sec. 204.3(c)(1)(ii).
\8\ See footnote 1 to Sec. 204.3(c)(1)(ii).
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(2) User charges may be waived by the Head of a DoD Component when:
(i) Furnishing of their service without charge is an appropriate
courtesy to a foreign government or international organization, or
comparable fees are set on a reciprocal basis with a foreign country.
(ii) The Director of the OMB has approved a request for an
exception. Such exceptions may be recommended when:
(A) The cost of collecting the fees would represent an unduly large
part of the receipts from the activity; or
(B) Any other conditions exists that, in the opinion of the Head of
the DoD Component of his designee, justifies the exception.
Sec. 204.4 Responsibilities.
(a) The USD(C) shall develop and monitor policies governing user
charges.
(b) The Heads of the DoD Components, or designees, shall:
(1) Identify each service or activity that may properly be the
subject of a user charge under this part.
(2) Determine the extent of the special benefit provided.
(3) Apply the principles specified in Sec. 204.5(a) in determining
full cost or market price.
(4) Review the user charges biennially, to include:
(i) Assurance that existing charges are adjusted to reflect
unanticipated changes in costs or market values; and
(ii) A review of all other programs to determine whether fees
should be assessed for Government services or the user of Government
goods or services. DoD Components should discuss the results of the
annual review of user fees and any resultant proposals in the Chief
Financial Officers Annual Report required by the Chief Financial
Officers Act of 1990.
(5) Initiate exception actions outlined in Sec. 204.3(c)(2). All
such actions shall be coordinated with the USD(C) prior to forwarding
to the OMB.
(i) Exceptions granted under Sec. 204.3(c)(2)(i) shall be renewed
every four years to ensure that conditions warrant their continuation.
(ii) Exceptions granted under Sec. 204.3(c)(2)(ii) shall be
resubmitted for approval to the OMB every 4 years when conditions
warrant their continuation.
(6) Maintain readily accessible records of:
(i) The services or activities covered by this part.
(ii) The extent of special services provided.
(iii) The exceptions to the general policy of this part.
(iv) The information used to establish charges and the specific
methods used in their determination.
(v) The collections from each user charge imposed.
(7) Maintain adequate records of the information used to establish
charges and provide them upon request to OMB for the evaluation of the
schedules and provide data on user charges to OMB according to the
requirements in Circular No. A-11.
(8) Develop legislative proposals as outlined in Sec. 204.7 when
they are statutory prohibitions or limitations on the assessment of
user charges.
Sec. 204.5 Charges and fees.
(a) General. (1) All charges and fees shall be based on total cost
to the U.S. Government or market price, whichever applies.
(2) ``Full cost'' includes all direct and indirect costs associated
with providing a good, resource, or service. These costs are outlined
in Volume 11A, Chapter 1, paragraph 010203 of DoD 7000.14-R).
(3) Full cost shall be determined or estimated from the best
available records, and new cost accounting systems shall not be
established solely for this purpose.
(4) ``Market price'' means the price for a good, resource, or
service that is based on competition in open markets, and
[[Page 4334]]
creates neither a shortage nor a surplus of the good, resource, or
service.
(i) When a substantial competitive demand exists for a good,
resource, or service, its market price will be determined using
commercial practices, for example:
(A) By competitive bidding; or
(B) By reference to prevailing prices in competitive markets for
goods resources, or services that are the same or similar to those
provided by the Government (e.g., campsites or grazing lands in the
general vicinity of private ones) with adjustments as appropriate that
reflect demand, level of service, and quality of the good or service.
(ii) In the absence of substantial competitive demand, market price
will be determined by taking into account the prevailing prices for
goods resources, or services that are the same or substantially similar
to those provided by the Government, and then adjusting the supply made
available and/or price of the good, resource, or service so that there
will be nether a shortage nor a surplus (e.g., campsites in remote
areas).
(5) Charges and fees established in advance of performance shall be
based on the estimated cost of performance Projected amounts shall be
reviewed biennially or whenever significant changes in cost or value
occur.
(6) Management controls (see DoD Directive 5010.38 \9\) must be
established to ensure that charges and fees are developed and adjusted,
using current, accurate, and complete data, to provide reimbursement
conforming to statutory requirements. These controls also must ensure
compliance with cash management and debt collection policies according
to Volume 5 of DoD 7000.14-R.
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\9\ See footnote 1 to Sec. 204.3(c)(1)(ii).
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(b) Information resources. These charges for services provided by
data processing activities shall be determined by using the costs
accumulated pursuant to requirements in OMB Circular A-130,
``Management of Federal Information Resources.''
(c) User fees for recurring services shall be established in
advance, when feasible.
(d) Lease or sale of property. Charges for lease or sale of
property shall be based on the following:
(1) Leases of military equipment or real estate. (i) In cases
involving the lease or rental of military equipment, when there is no
commercial counterpart, the charge will be based on the procedures
attached in Volume 11A, Chapter 1, paragraph 010203.I of DoD 7000.14-R.
The current interest rate in OMB Circular A-94 will be used in the
computation of interest on investment in assets. In determining the
value, consideration may be given to the responsibility of the lessee
to assume the risk of loss or damage to the property and to held the
government harmless against claims or liabilities by the lessee or
third parties.
(ii) In cases involving real estate outgrants the consideration for
a lease shall be determined by appraisal of fair market rental value
according to 10 U.S.C. 2667.
(2) Sale of property. When there is legal authority to sell
property to the public, the selling price of the property and related
accessorial and administrative costs shall be computed according to
Volume 11A, Chapter 1 of DoD 7000.14-R.
Sec. 204.6 Collections.
(a) Collections of charges and fees will be made in advance or
simultaneously with the rendering of service unless appropriations and
authority allow otherwise. The policies in this part, Volume 5 of DoD
7000.14-R, and DoD Directive 5010.38, shall be used in accounting,
controlling, and managing cash and debt collections.
(b) Unless a statute provides otherwise, user charge collections
will be credited to the general fund of the Treasury as miscellaneous
receipts, as required by 31 U.S.C. 3302.
Sec. 204.7 Legislative proposals.
(a) Legislative proposals that allow the DoD Component to retain
collections may be appropriate when a fee is levied in order to finance
a service that is intended to be provided on a substantially self-
sustaining basis and thus is dependent upon adequate collections.
(1) The authority to use fees credited to an appropriation is
generally subject to limits set in annual appropriations language.
However, it may be appropriate to request exemption from annual
appropriations control, if a provision of the service is dependent on
demand that is irregular or unpredictable (e.g., a fee to reimburse an
agency for the cost of overtime pay of inspectors for services
performed after regular duty hours).
(2) Legislative proposals that permit fees to be credited to
accounts shall be consistent with the full-cost recovery guidelines
contained in this part. Any fees in excess of full cost recovery and
any increase in fees to recover the portion of retirement costs which
recoups all (funded or unfunded) accrual costs not covered by employee
contributions are to be credited to the general fund of the Treasury as
miscellaneous receipts.
(b) Where the retention of the collections is appropriate, the DoD
Components(s) concerned may submit appropriate legislative proposals
under applicable legislative procedures included in OMB Circular A-19.
These procedures may be obtained from the Office of Legislative
Counsel, General Counsel, 1600 Defense Pentagon, Washington, DC 20301-
1600. Proposals to remove user fee restrictions or retain collections
shall:
(1) Define in general terms the services for which charges will be
assessed and the pricing mechanism that will be used.
(2) Specify whether fees will be collected in advance of, or
simultaneously with, the provision of service unless appropriations and
authority are provided in advance to allow reimbursable services.
(3) Specify where collections will be credited. Legislative
proposals should not normally specify precise charges. The user charge
schedule should be set by regulation to allow for the administrative
updating of fees to reflect changing costs and market values.
Sec. 204.8 Benefits for which no charge shall be made.
(a) Documents and information requested by members of the Armed
Forces when the documents or information requested is required by such
personnel in their capacity as Service members.
(b) Documents and information requested by members of the Armed
Forces who are in a casualty status, or requested by their next of kin
or legal representative.
(c) The provisions of the address of record of a member or former
member of the Armed Forces when the address is readily available
through a directory (locator) service, and when the address is
requested by a member of the Armed Forces or by a relative or a legal
representative of a member of the Armed Forces, or when the address of
record is requested by any source for the purpose of paying monies or
forwarding property to a member or former member of the Armed Forces.
(d) Services requested by, or on behalf of, a member or former
member of the Armed Forces and civilian personnel of the Department of
Defense (where applicable) or, if deceased, his or her next of kin or
legal representative that pertain to the provision of:
(1) Information required to obtain financial benefits regardless of
the terms of separation from the Service.
[[Page 4335]]
(2) Document showing membership and military record in the Armed
Forces if discharge or release was under honorable conditions, except
as shown in paragraphs (d)(1) and (d)(4) of this section.
(3) Information relating to a decoration or award or required for
memoralization purposes.
(4) Information relating to the review or change in type of
discharge or correction of records.
(5) Personal documents, such as birth certificates, when such
documents are required to be furnished by the member.
(6) Services that are furnished free according to statutes or
Executive Orders.
(7) Information from or copies of medical and dental records or x-
ray films of patients or former patients of military medical or dental
facilities, when such information is required for further medical or
dental care, and requests for such data are submitted by an accredited
medical facility, physician, or dentist, or requested by the patient,
his or her next of kin, or legal representative. Other requests subject
to the Privacy Act shall be according to DoD 5400.11-R, ``DoD Privacy
Act Program'' (see Sec. 204.3(c)(1)(xi) of this part).
(8) Services requested by, and furnished to, a member of Congress
for official use.
(9) Services requested by state, territorial, county, or municipal
government, or an agency thereof, that is performing a function related
to or furthering a DoD objective.
(10) Services requested by a court, when such services will serve
as a substitute for personal court appearance of a military or civilian
employee of the Department of Defense.
(11) Services requested by a nonprofit organization that is
performing a function related to or furthering an objective of the
Federal Government or that is in the interest of public health and
welfare, including education.
(12) Services requested by donors in connection with the conveyance
or transfer of a gift to the Department of Defense.
(13) Occasional and incidental services (including requests from
residents of foreign countries), that are not requested often, when it
is determined administratively that a fee would be inappropriate for
the occasional and incidental services rendered.
(14) Administrative services offered by reference or reading rooms
to inspect public records, excluding copies of records or documents
furnished.
(15) Services rendered in response to requests for classification
review of DoD classified records, submitted under Executive Order
12065, ``National Security Information,'' and implemented by DoD
5200.1-R. Such services consist of the work performed in conducting the
classification review or in granting and completing an appeal from a
denial of declassification following such review.
(16) Services of a humanitarian nature performed in such emergency
situations as life-saving transportation for non-Armed Forces patients,
search and rescue operations, and airlift of personnel and supplies to
a disaster site. This does not mean that inter- and intra-governmental
agreements to recover all or part of costs shall not be negotiated.
Rather, it means the recipients or beneficiary will not be assessed a
``user charge.''
Dated: January 20, 2006.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 06-730 Filed 1-25-06; 8:45 am]
BILLING CODE 5001-06-M
