Schedule of Fees for Consular Services, Department of State and Overseas Embassies and Consulates-Passport Services Fee Changes, 4425-4428 [2018-01809]
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Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Rules and Regulations
Memorandum M–17–21, ‘‘Guidance
Implementing Executive Order 13771’’
of April 5, 2017.
DEPARTMENT OF STATE
F. Executive Order 13563
[Public Notice 10027]
The Department of State has
considered this rule in light of
Executive Order 13563 and affirms that
this regulation is consistent with the
guidance therein. G. Executive Orders
12372 and 13132: Federalism
H. Executive Order 13175—
Consultation and Coordination With
Indian Tribal Governments
22 CFR Part 22
RIN 1400–AD81
Schedule of Fees for Consular
Services, Department of State and
Overseas Embassies and
Consulates—Passport Services Fee
Changes
Department of State.
Final rule.
AGENCY:
ACTION:
The Department of State
implements an adjustment to the
Schedule of Fees for Consular Services
of the Department of State’s Bureau of
Consular Affairs (‘‘Schedule of Fees’’ or
‘‘Schedule’’) to raise the execution fee
for passport books and cards from $25
to $35. The Department is adjusting this
fee in light of the findings of the most
recently approved update to the Cost of
Service Model to better align the fees for
consular services with the costs of
providing those services.
DATES: In accordance with the
Congressional Review Act, this rule is
effective on April 2, 2018.
FOR FURTHER INFORMATION CONTACT: Rob
Schlicht, Management Analyst, Office of
the Comptroller, Bureau of Consular
Affairs, Department of State; phone:
202–485–6685, telefax: 202–485–6826;
email: fees@state.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
The Department of State 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.
I. Paperwork Reduction Act
This rule does not impose or revise
information collections subject to the
provisions of the Paperwork Reduction
Act, 44 U.S.C., Chapter 35.
For a summary of the regulatory
findings and analyses regarding this
rulemaking, please refer to the findings
and analyses published with the interim
final rule, which can be found at 80 FR
53704, which are adopted herein.
Section 22.1, Items 2.(a), 2.(b), and 2.(g)
of this rule became effective September
26, 2015. Section 22.1, Item 8 became
effective November 9, 2015. As noted
above, the Department considered the
comments submitted in response to the
interim final rule and does not adopt
them. Thus, the rule remains in effect.
List of Subjects in 22 CFR Part 22
Consular services, Fees, Passports and
visas.
Background
This rule makes a change to the
Schedule of Fees for passport services
(passport books and cards). The
Department published a notice of
proposed rulemaking (NPRM) on
September 19, 2016 (81 FR 64088), with
60 days provided for public comment.
This final rule addresses the relevant
comments. Justification for this
rulemaking can be found in the NPRM.
Analysis of Comments
PART 22—SCHEDULE OF FEES FOR
CONSULAR SERVICES—
DEPARTMENT OF STATE AND
FOREIGN SERVICE
Accordingly, the interim final rule
amending 22 CFR part 22, which was
published in the Federal Register, 80 FR
53704, on September 8, 2015 is adopted
as final without change.
sradovich on DSK3GMQ082PROD with RULES
■
Carl C. Risch,
Assistant Secretary for Consular Affairs,
Department of State.
[FR Doc. 2018–01850 Filed 1–30–18; 8:45 am]
BILLING CODE 4710–06–P
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The Department received 34
comments, of which 26 are addressed
herein. The other eight were duplicates
submitted to regulations.gov and fees@
state.gov.
The majority of the comments were in
favor of raising the fee from $25 to $35.
Four were opposed to raising the fee
and one comment referred to visa fees
which are not addressed in this
rulemaking.
A majority of the comments that were
in favor of the fee increase cited
increased overhead, with most
mentioning staffing and postage as
major costs. Other comments expressed
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4425
the view that the small increase in fee
would not affect business or personal
travel.
Two commenters who opposed the
fee increase expressed concern that the
fee would be a burden to some travelers.
Although the Department is sympathetic
to the impact the fee increase may have
on the public, the fee increase reflects
the result of an evaluation to determine
the cost of the service provided so that
the U.S. Government may recover the
full cost of the service in accordance
with 31 U.S.C. 9701 and guidance from
the Office of Management and Budget
(OMB). Federal agencies make every
effort to ensure that fees for services are
sufficient to recover the full cost to the
government. (See OMB Circular A–25,
¶ 6(a)(1), (a)(2)(a).)
Two commenters stated that the
government should work more
efficiently rather than raise fees. The
Department of State’s Bureau of
Consular Affairs along with its partner
acceptance facilities strive to optimize
business functions to increase efficiency
and effectively manage financial and
capital resources funded by consular
fees. There are approximately 7,400
acceptance facilities throughout the
United States, including those at post
offices and clerks of court. This fee is
necessary to ensure that acceptance
agents are compensated for the time and
materials required to accept
applications on behalf of the
Department of State. The fee has
remained the same for over nine years
even though the cost of labor and
material has increased during the same
time period. In 2008, the Department
lowered the execution fee for passport
books from $30 to $25 based on costs at
the time. The proposed $10 increase to
$35, from the current fee of $25, is in
line with cost increases for both the
Department and United States Postal
Service during the past nine years.
In an effort to improve business
practices, the Department publishes a
guide that standardizes processes for
acceptance facilities and provides
annual training to ensure the processes
are followed. Additionally, the
Department conducts regular audits and
inspections of the acceptance facilities
to protect the integrity of the application
process, prevent mis/malfeasance, and
promote standardization and efficiency.
The revenue from retained consular
fees fund CA’s domestic and overseas
operations and consular-related
programs. These operations protect the
lives and serve the interests of United
States citizens and strengthen U.S.
border security.
One commenter stated that the
amount of time and effort it takes to
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process applications does not justify the
cost of service. The person believes that
fees should be less for children when
they apply with their family. As
described in the section of this rule
describing activity-based costing, the fee
is determined in its totality, not as an
individual transaction with
consideration given to family
circumstances. Conforming to guidance
from OMB, federal agencies make every
effort to ensure that fees for service are
sufficient to recover the full cost to the
government of providing the service.
(See OMB Circular A–25, ¶ 6(a)(1),
(a)(2)(a).) Activity-based costing was
explained in the NPRM, and the
Department will summarize the
explanation here, for convenience.
Activity-Based Costing
To set fees in accordance with the
general principles of cost recovery, the
Department must determine the true
cost of providing consular services.
Following guidance provided in
‘‘Managerial Cost Accounting Concepts
and Standards for the Federal
Government,’’ OMB’s Statement #4 of
Federal Accounting Standards (SFFAS
#4 (available at https://www.fasab.gov/
pdffiles/sffas-4.pdf), the Department
developed an activity-based costing
(ABC) model to determine the true cost
of each of its consular services.
The Government Accountability
Office (GAO) defines activity-based
costing as a ‘‘set of accounting methods
used to identify and describe costs and
required resources for activities within
processes.’’ Because an organization can
use the same staff and resources
(computer equipment, production
facilities, etc.) to produce multiple
products or services, ABC models seek
to identify and assign costs to processes
and activities and then to individual
products and services through the
identification of key cost drivers
referred to as ‘‘resource drivers’’ and
‘‘activity drivers.’’ ABC models also
seek to identify the amount of time an
organization’s personnel spend on each
service and how much overhead cost
(rent, utilities, facilities maintenance,
etc.) is associated with delivering each
service.
ABC models require financial and
accounting analysis and modeling skills
combined with a detailed understanding
of an organization’s business processes.
ABC models require an organization to
identify all activities required to
produce a particular product or service
(‘‘activities’’) and all resources
consumed (‘‘costs’’) in the course of
producing that product or service. An
organization must also measure the
quantity of resources consumed
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(‘‘resource driver’’); and the frequency
and intensity of demand placed on
activities to produce services (‘‘activity
driver’’). SFFAS Statement #4 provides
a detailed discussion of the use of cost
accounting by the U.S. Government.
The Department’s Cost of Service Model
The Department conducted periodic
Cost of Service Studies using ABC
methods to determine the costs of its
consular services through 2009. In 2010,
the Department moved to adopt an
annually updated Cost of Service Model
that measures all of its consular
operations and costs, including all
activities needed to provide consular
services, whether fee-based or not. This
provides a comprehensive and detailed
look at all consular services as well as
all services the Department performs for
other agencies in connection with its
consular operations. The Cost of Service
Model now includes approximately 80
distinct activities, and enables the
Department to model its consularrelated costs with a high degree of
precision.
The Department uses three methods
outlined in SFFAS Statement #4
(paragraph 149(2)) to assign resource
costs to activities: (a) Direct tracing; (b)
estimation based on surveys, interviews,
or statistical sampling; and (c)
allocations. The Department uses direct
tracing to assign the cost of, for
example, a physical passport book or
the visa foil placed in a visa applicant’s
passport. Assigning costs to activities
such as adjudicating a passport or visa
application requires estimation based on
surveys, interviews, or statistical
sampling to determine who performs an
activity and how long it takes. Indirect
costs (overhead) in the Cost of Service
Model are allocated according to the
level of effort needed for a particular
activity. Where possible, the model uses
overhead cost pools to assign indirect
costs only to related activities. For
instance, the cost of rent for domestic
passport agencies is assigned only to
passport costs, not to visas or other
services the Department provides only
overseas. The Department allocates
indirect support costs to each consular
service by the portion of each cost
attributable to consular activities. For
example, the model allocates a portion
of the cost of the Department’s Bureau
of Human Resources to consular
services. The total amount of this
allocation is based on the number of
Bureau of Human Resources staff
members who support Bureau of
Consular Affairs personnel. In turn, this
amount is allocated between the
different consular services by the level
of effort to provide them.
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To assign labor costs, the Department
relies on a variety of industry-standard
estimation methodologies. To document
how consular staff divide their time
overseas, the Department conducts the
Consular Overseas Data Collection
(CODaC) survey of a representative
sample of posts each year. The
Department uses CODaC survey data in
conjunction with volume data from over
200 individual consular sections in
consulates and embassies worldwide, to
develop resource drivers to assign labor
costs to activities. For consular activities
that take place in the United States, the
Department collects volume data from
periodic workload reports including
Passport Agency Task Reports pulled
from management databases that
include Passport’s Management
Information System. Financial
information is gathered from reports by
the Comptroller and Global Financial
Services bureau financial systems. The
Department converts the cost and
workload data it collects into resource
drivers and activity drivers for each
resource and activity.
Roughly 70 percent of the workforce
involved in providing consular services
are full-time Federal employees. When
demand for a service rises, it takes time
for the Department to increase the
number of employees because of the
lengthy security clearance process and
special training involved. Likewise, it is
difficult to rapidly decrease the number
of employees when demand for a
service falls. Additionally, given
government procurement rules and
security requirements, the Department
must commit to many of its facilities
and infrastructure costs years before a
facility becomes available. In spite of
changes in demand, the Department is
obligated to cover these costs. Given
these and other constraints on altering
the Department’s cost structure in the
short term, changes in service volumes
can have dramatic effects on whether a
fee is self-sustaining. Therefore, the Cost
of Service Model includes predictive
data as well as actual data. Predictive
workloads are based on projections by
the Office of Visa Services, the Office of
Passport Services, and other parts of the
Bureau of Consular Affairs that are
consistent with Department budget
documents prepared for Congress. As
notified in the FY 2018 Congressional
Budget Justification, the Department
estimates a workload of 20.2 million
passport applications, 14.4 million
nonimmigrant visa applications, and
600,000 immigrant visa applications in
FY 2018.
The costs the Department enters into
the Cost of Service Model include every
line item of costs, such as physical
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material for making passports and visas,
salaries, rent, supplies, and IT hardware
and software. The Department then
calculates a resource driver for overseas
staff time based on responses to the
Consular Overseas Data Collection
survey for overseas compensation costs
and enters the resource drivers and
activity assignments into the model. The
Department then selects an activity
driver, such as the volume data
discussed above, for each activity, in
order to assign these costs to each
service type. This process allows the
model to calculate a total cost for each
of the Schedule of Fees line items for
visa services, passport services, and
overseas citizens services as well as
services for other government agencies
and no fee services. The model then
divides this total cost by the total
volume of the service or product in
question in order to determine a final
unit cost for the service or product.
Projected costs for predictive years are
also included to take account of changes
in the size of consular staff, workload,
and similar factors.1 The resulting
database constitutes the Cost of Service
Model. The Department continues to
refine and update the Cost of Service
Model in order to set fees commensurate
with the cost of providing consular
services.
The Cost of Service Model is a
complex series of iterative computer
processes incorporating more than a
million calculations, housed in an
industry standard commercial off-theshelf product, SAP Enterprise
Performance Management; therefore, it
is not reducible to a tangible form such
as a document. Inputs are formatted in
spreadsheets for entry into the ABC
software package. The software’s output
includes spreadsheets with raw unit
costs, validation reports, and
management reports. All data inputs
and outputs are considered Sensitive
but Unclassified and therefore cannot be
made publically available.
The new cost reflected in the
Schedule of Fees is based on projected
workload for Fiscal Year 2018, and the
fee has been rounded to make it easier
to collect.
sradovich on DSK3GMQ082PROD with RULES
The New Passport Execution Fee
The Department is increasing the
execution fee for passport books and
1 Workload volume increases and decreases are
the main drivers for staffing changes, but other
factors may impact staffing or the speed of staffing
changes (e.g., the length of the recruitment and
clearance processes).
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cards from $25 to $35, excepting those
persons who are statutorily exempted
from paying the passport execution fee.
The costs of providing passport services
to exempt individuals are covered by
fees paid by non-exempt individuals.
The passport execution fee is applicable
to all first-time passport applicants and
certain other applicants who must apply
in person, such as minors under the age
of 16. Applicants apply in person at
post offices and other acceptance
facilities, such as local clerks of court,
as well as at the Department’s passport
offices. The passport execution fee
includes the costs associated with
accepting passport applications and fees
in-person, including salaries, benefits,
and an allocated portion of overhead
including, but not limited to, rent,
utilities, supplies and equipment. The
Department’s Cost of Service Model
showed that these costs were over $33.
The United States Postal Service—the
acceptance agent for the majority of
passport applications—regularly
conducts a similar study and found that
these costs were more than $34.2 See 22
U.S.C. 214(a); 22 CFR 51.51(b).
The $10 increase in the passport
execution fee will affect first-time
passport applicants and certain
applicants who must appear at post
offices and other acceptance facilities
such as local clerks of court. Individuals
who apply for a passport renewal by
mail will not see a fee increase.
Regulatory Findings
Administrative Procedure Act
The Department published this rule as
a proposed rule on September 19, 2016,
with a 60-day provision for public
comments. See 81 FR 64088. In
accordance with the Congressional
Review Act, this rule will be effective 60
days after publication and receipt by
Congress and the GAO.
Regulatory Flexibility Act
The Department has reviewed this
rule and, by approving it, certifies that
it will not have a significant economic
impact on a substantial number of small
entities as defined in 5 U.S.C. 601(6).
Unfunded Mandates Act of 1995
This rule will not result in the
expenditure by state, local, or tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any year, and it will not significantly
2 The United States Postal Service does not
produce a public report on this study.
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4427
or uniquely affect small governments.
Therefore, no actions were deemed
necessary under the provisions of the
Unfunded Mandates Reform Act of
1995, 2 U.S.C. 1501–1504.
Small Business Regulatory Enforcement
Fairness Act of 1996
This rule is a major rule as defined by
5 U.S.C. 804(2). The Congressional
Review Act, 5 U.S.C. 801 et seq., as
added by the Small Business Regulatory
Enforcement Fairness Act of 1996,
generally provides that before a rule
may take effect, the agency
promulgating the rule must submit a
rule report, which includes a copy of
the rule, to each House of the Congress
and to the Comptroller General of the
United States. The Department will
submit the required information to the
U.S. Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to
publication of the rule in the Federal
Register. This rule will take effect 60
days after it is published in the Federal
Register and receipt by Congress and
the GAO.
Executive Order 12866
The Department has reviewed this
rule to ensure its consistency with the
regulatory philosophy and principles set
forth in the Executive Orders. OMB has
determined that this rule is
economically significant under
Executive Order 12866.
This rule is necessary in light of the
Department of State’s Cost of Service
Model finding that the cost of executing
first-time passports is higher than the
current fee. The Department is setting
this fee in accordance with 22 U.S.C.
214(a) (‘‘There shall be collected and
paid into the Treasury of the United
States . . . a fee, prescribed by the
Secretary of State by regulation, for
executing each such [passport]
application) and 31 U.S.C. 9701(‘‘The
head of each agency . . . may prescribe
regulations establishing the charge for a
service or thing of value provided by the
agency . . . based on . . . the costs to
the Government.’’). This regulation
generally sets the fee for passport
executions at the amount required to
recover the costs associated with
providing this service.
Details of the fee change are as
follows:
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Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Rules and Regulations
Item No.
Proposed fee
Current fee
Change in fee
Estimated annual
number of
applications 1
Estimated change
in annual fees
collected 1
*
Percentage
increase
*
Schedule of Fees for Consular Services
*
*
*
*
*
Passport and Citizenship Services
1. Passport Book or Card Execution: Required for first-time applicants and others who must
apply in person ..........................
$35
$25
$10
40
11,500,000
$115,000,000
Total .......................................
........................
........................
........................
........................
..............................
$115,000,000
*
1 Based
*
*
*
*
*
on projected FY 2018 workload.
As noted in the NPRM, the
Department of State does not anticipate
that demand for passport services
affected by this rule will change
significantly due to the fee change.
The Department does not believe that
passport application fees are a
significant determining factor when
Americans decide to travel
internationally. The price of a passport
book or card remains minor in
comparison with other costs associated
with foreign travel, given that taxes and
surcharges alone on international airfare
can easily surpass $100. As a result, the
Department does not believe passport
demand will be significantly affected by
the new fee.
Executive Order 13771
This rule is not an E.O. 13771
regulatory action because it is a transfer
rule that changes only the fee for a
service without imposing any new costs.
sradovich on DSK3GMQ082PROD with RULES
*
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.
Executive Order 13175
The Department has determined that
this rulemaking will not have tribal
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implications, will not impose
substantial direct compliance costs on
Indian tribal governments, and will not
preempt tribal law. Accordingly, the
requirements of Executive Order 13175
do not apply to this rulemaking.
Paperwork Reduction Act
Information collection 1405–0004,
which relates to this rule, is approved
by OMB pursuant to the Paperwork
Reduction Act, 44 U.S.C. Chapter 35.
Other than the comments summarized
above, the Department received no
public comments regarding this
rulemaking. This information collection
has been renewed until August 31,
2019.
SCHEDULE OF FEES FOR CONSULAR
SERVICES
Item No.
Fee
Passport and Citizenship Services:
1. Passport Book or Card Execution: Required for first-time
applicants and others who
must apply in person .............
*
*
*
*
$35
*
Carl C. Risch,
Assistant Secretary for Consular Affairs,
Department of State.
[FR Doc. 2018–01809 Filed 1–30–18; 8:45 am]
BILLING CODE 4710–06–P
List of Subjects in 22 CFR Part 22
Consular Services, Fees, Passports.
Accordingly, 22 CFR part 22 is
amended as follows:
PART 22—SCHEDULE OF FEES FOR
CONSULAR SERVICES—
DEPARTMENT OF STATE AND
FOREIGN SERVICE
1. The authority citation for part 22 is
revised to read as follows:
■
Authority: 8 U.S.C. 1101 note, 1153 note,
1183a note, 1351, 1351 note, 1714, 1714 note;
10 U.S.C. 2602(c); 11 U.S.C. 1157 note; 22
U.S.C. 214, 214 note, 1475e, 2504(a), 2651a,
4201, 4206, 4215, 4219, 6551; 31 U.S.C. 9701;
Exec. Order 10,718, 22 FR 4632 (1957); Exec.
Order 11,295, 31 FR 10603 (1966).
2. In § 22.1, in the table, revise item
1 to read as follows:
■
§ 22.1
*
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*
*
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*
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DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 117
[Docket No. USCG–2017–0161]
RIN 1625–AA09
Drawbridge Operation Regulation
Canaveral Barge Canal, Canaveral, FL
Coast Guard, DHS.
Final rule.
AGENCY:
ACTION:
The Coast Guard is modifying
the operating schedule that governs the
SR 401 Drawbridges across the
Canaveral Barge Canal, mile 5.5, at Port
Canaveral, Florida. This modification is
necessary to reduce vehicular traffic
congestion and to ensure the safety of
roadways while passengers are
transiting to and from the cruise ship
terminals. Since the arrival of additional
cruise ships to the Port of Canaveral,
traffic back-ups have been caused by the
SUMMARY:
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]]>Agencies
[Federal Register Volume 83, Number 21 (Wednesday, January 31, 2018)]
[Rules and Regulations]
[Pages 4425-4428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01809]
-----------------------------------------------------------------------
DEPARTMENT OF STATE
22 CFR Part 22
[Public Notice 10027]
RIN 1400-AD81
Schedule of Fees for Consular Services, Department of State and
Overseas Embassies and Consulates--Passport Services Fee Changes
AGENCY: Department of State.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of State implements an adjustment to the
Schedule of Fees for Consular Services of the Department of State's
Bureau of Consular Affairs (``Schedule of Fees'' or ``Schedule'') to
raise the execution fee for passport books and cards from $25 to $35.
The Department is adjusting this fee in light of the findings of the
most recently approved update to the Cost of Service Model to better
align the fees for consular services with the costs of providing those
services.
DATES: In accordance with the Congressional Review Act, this rule is
effective on April 2, 2018.
FOR FURTHER INFORMATION CONTACT: Rob Schlicht, Management Analyst,
Office of the Comptroller, Bureau of Consular Affairs, Department of
State; phone: 202-485-6685, telefax: 202-485-6826; email:
[email protected].
SUPPLEMENTARY INFORMATION:
Background
This rule makes a change to the Schedule of Fees for passport
services (passport books and cards). The Department published a notice
of proposed rulemaking (NPRM) on September 19, 2016 (81 FR 64088), with
60 days provided for public comment. This final rule addresses the
relevant comments. Justification for this rulemaking can be found in
the NPRM.
Analysis of Comments
The Department received 34 comments, of which 26 are addressed
herein. The other eight were duplicates submitted to regulations.gov
and [email protected].
The majority of the comments were in favor of raising the fee from
$25 to $35. Four were opposed to raising the fee and one comment
referred to visa fees which are not addressed in this rulemaking.
A majority of the comments that were in favor of the fee increase
cited increased overhead, with most mentioning staffing and postage as
major costs. Other comments expressed the view that the small increase
in fee would not affect business or personal travel.
Two commenters who opposed the fee increase expressed concern that
the fee would be a burden to some travelers. Although the Department is
sympathetic to the impact the fee increase may have on the public, the
fee increase reflects the result of an evaluation to determine the cost
of the service provided so that the U.S. Government may recover the
full cost of the service in accordance with 31 U.S.C. 9701 and guidance
from the Office of Management and Budget (OMB). Federal agencies make
every effort to ensure that fees for services are sufficient to recover
the full cost to the government. (See OMB Circular A-25, ] 6(a)(1),
(a)(2)(a).)
Two commenters stated that the government should work more
efficiently rather than raise fees. The Department of State's Bureau of
Consular Affairs along with its partner acceptance facilities strive to
optimize business functions to increase efficiency and effectively
manage financial and capital resources funded by consular fees. There
are approximately 7,400 acceptance facilities throughout the United
States, including those at post offices and clerks of court. This fee
is necessary to ensure that acceptance agents are compensated for the
time and materials required to accept applications on behalf of the
Department of State. The fee has remained the same for over nine years
even though the cost of labor and material has increased during the
same time period. In 2008, the Department lowered the execution fee for
passport books from $30 to $25 based on costs at the time. The proposed
$10 increase to $35, from the current fee of $25, is in line with cost
increases for both the Department and United States Postal Service
during the past nine years.
In an effort to improve business practices, the Department
publishes a guide that standardizes processes for acceptance facilities
and provides annual training to ensure the processes are followed.
Additionally, the Department conducts regular audits and inspections of
the acceptance facilities to protect the integrity of the application
process, prevent mis/malfeasance, and promote standardization and
efficiency.
The revenue from retained consular fees fund CA's domestic and
overseas operations and consular-related programs. These operations
protect the lives and serve the interests of United States citizens and
strengthen U.S. border security.
One commenter stated that the amount of time and effort it takes to
[[Page 4426]]
process applications does not justify the cost of service. The person
believes that fees should be less for children when they apply with
their family. As described in the section of this rule describing
activity-based costing, the fee is determined in its totality, not as
an individual transaction with consideration given to family
circumstances. Conforming to guidance from OMB, federal agencies make
every effort to ensure that fees for service are sufficient to recover
the full cost to the government of providing the service. (See OMB
Circular A-25, ] 6(a)(1), (a)(2)(a).) Activity-based costing was
explained in the NPRM, and the Department will summarize the
explanation here, for convenience.
Activity-Based Costing
To set fees in accordance with the general principles of cost
recovery, the Department must determine the true cost of providing
consular services. Following guidance provided in ``Managerial Cost
Accounting Concepts and Standards for the Federal Government,'' OMB's
Statement #4 of Federal Accounting Standards (SFFAS #4 (available at
https://www.fasab.gov/pdffiles/sffas-4.pdf), the Department developed an
activity-based costing (ABC) model to determine the true cost of each
of its consular services.
The Government Accountability Office (GAO) defines activity-based
costing as a ``set of accounting methods used to identify and describe
costs and required resources for activities within processes.'' Because
an organization can use the same staff and resources (computer
equipment, production facilities, etc.) to produce multiple products or
services, ABC models seek to identify and assign costs to processes and
activities and then to individual products and services through the
identification of key cost drivers referred to as ``resource drivers''
and ``activity drivers.'' ABC models also seek to identify the amount
of time an organization's personnel spend on each service and how much
overhead cost (rent, utilities, facilities maintenance, etc.) is
associated with delivering each service.
ABC models require financial and accounting analysis and modeling
skills combined with a detailed understanding of an organization's
business processes. ABC models require an organization to identify all
activities required to produce a particular product or service
(``activities'') and all resources consumed (``costs'') in the course
of producing that product or service. An organization must also measure
the quantity of resources consumed (``resource driver''); and the
frequency and intensity of demand placed on activities to produce
services (``activity driver''). SFFAS Statement #4 provides a detailed
discussion of the use of cost accounting by the U.S. Government.
The Department's Cost of Service Model
The Department conducted periodic Cost of Service Studies using ABC
methods to determine the costs of its consular services through 2009.
In 2010, the Department moved to adopt an annually updated Cost of
Service Model that measures all of its consular operations and costs,
including all activities needed to provide consular services, whether
fee-based or not. This provides a comprehensive and detailed look at
all consular services as well as all services the Department performs
for other agencies in connection with its consular operations. The Cost
of Service Model now includes approximately 80 distinct activities, and
enables the Department to model its consular-related costs with a high
degree of precision.
The Department uses three methods outlined in SFFAS Statement #4
(paragraph 149(2)) to assign resource costs to activities: (a) Direct
tracing; (b) estimation based on surveys, interviews, or statistical
sampling; and (c) allocations. The Department uses direct tracing to
assign the cost of, for example, a physical passport book or the visa
foil placed in a visa applicant's passport. Assigning costs to
activities such as adjudicating a passport or visa application requires
estimation based on surveys, interviews, or statistical sampling to
determine who performs an activity and how long it takes. Indirect
costs (overhead) in the Cost of Service Model are allocated according
to the level of effort needed for a particular activity. Where
possible, the model uses overhead cost pools to assign indirect costs
only to related activities. For instance, the cost of rent for domestic
passport agencies is assigned only to passport costs, not to visas or
other services the Department provides only overseas. The Department
allocates indirect support costs to each consular service by the
portion of each cost attributable to consular activities. For example,
the model allocates a portion of the cost of the Department's Bureau of
Human Resources to consular services. The total amount of this
allocation is based on the number of Bureau of Human Resources staff
members who support Bureau of Consular Affairs personnel. In turn, this
amount is allocated between the different consular services by the
level of effort to provide them.
To assign labor costs, the Department relies on a variety of
industry-standard estimation methodologies. To document how consular
staff divide their time overseas, the Department conducts the Consular
Overseas Data Collection (CODaC) survey of a representative sample of
posts each year. The Department uses CODaC survey data in conjunction
with volume data from over 200 individual consular sections in
consulates and embassies worldwide, to develop resource drivers to
assign labor costs to activities. For consular activities that take
place in the United States, the Department collects volume data from
periodic workload reports including Passport Agency Task Reports pulled
from management databases that include Passport's Management
Information System. Financial information is gathered from reports by
the Comptroller and Global Financial Services bureau financial systems.
The Department converts the cost and workload data it collects into
resource drivers and activity drivers for each resource and activity.
Roughly 70 percent of the workforce involved in providing consular
services are full-time Federal employees. When demand for a service
rises, it takes time for the Department to increase the number of
employees because of the lengthy security clearance process and special
training involved. Likewise, it is difficult to rapidly decrease the
number of employees when demand for a service falls. Additionally,
given government procurement rules and security requirements, the
Department must commit to many of its facilities and infrastructure
costs years before a facility becomes available. In spite of changes in
demand, the Department is obligated to cover these costs. Given these
and other constraints on altering the Department's cost structure in
the short term, changes in service volumes can have dramatic effects on
whether a fee is self-sustaining. Therefore, the Cost of Service Model
includes predictive data as well as actual data. Predictive workloads
are based on projections by the Office of Visa Services, the Office of
Passport Services, and other parts of the Bureau of Consular Affairs
that are consistent with Department budget documents prepared for
Congress. As notified in the FY 2018 Congressional Budget
Justification, the Department estimates a workload of 20.2 million
passport applications, 14.4 million nonimmigrant visa applications, and
600,000 immigrant visa applications in FY 2018.
The costs the Department enters into the Cost of Service Model
include every line item of costs, such as physical
[[Page 4427]]
material for making passports and visas, salaries, rent, supplies, and
IT hardware and software. The Department then calculates a resource
driver for overseas staff time based on responses to the Consular
Overseas Data Collection survey for overseas compensation costs and
enters the resource drivers and activity assignments into the model.
The Department then selects an activity driver, such as the volume data
discussed above, for each activity, in order to assign these costs to
each service type. This process allows the model to calculate a total
cost for each of the Schedule of Fees line items for visa services,
passport services, and overseas citizens services as well as services
for other government agencies and no fee services. The model then
divides this total cost by the total volume of the service or product
in question in order to determine a final unit cost for the service or
product. Projected costs for predictive years are also included to take
account of changes in the size of consular staff, workload, and similar
factors.\1\ The resulting database constitutes the Cost of Service
Model. The Department continues to refine and update the Cost of
Service Model in order to set fees commensurate with the cost of
providing consular services.
---------------------------------------------------------------------------
\1\ Workload volume increases and decreases are the main drivers
for staffing changes, but other factors may impact staffing or the
speed of staffing changes (e.g., the length of the recruitment and
clearance processes).
---------------------------------------------------------------------------
The Cost of Service Model is a complex series of iterative computer
processes incorporating more than a million calculations, housed in an
industry standard commercial off-the-shelf product, SAP Enterprise
Performance Management; therefore, it is not reducible to a tangible
form such as a document. Inputs are formatted in spreadsheets for entry
into the ABC software package. The software's output includes
spreadsheets with raw unit costs, validation reports, and management
reports. All data inputs and outputs are considered Sensitive but
Unclassified and therefore cannot be made publically available.
The new cost reflected in the Schedule of Fees is based on
projected workload for Fiscal Year 2018, and the fee has been rounded
to make it easier to collect.
The New Passport Execution Fee
The Department is increasing the execution fee for passport books
and cards from $25 to $35, excepting those persons who are statutorily
exempted from paying the passport execution fee. The costs of providing
passport services to exempt individuals are covered by fees paid by
non-exempt individuals. The passport execution fee is applicable to all
first-time passport applicants and certain other applicants who must
apply in person, such as minors under the age of 16. Applicants apply
in person at post offices and other acceptance facilities, such as
local clerks of court, as well as at the Department's passport offices.
The passport execution fee includes the costs associated with accepting
passport applications and fees in-person, including salaries, benefits,
and an allocated portion of overhead including, but not limited to,
rent, utilities, supplies and equipment. The Department's Cost of
Service Model showed that these costs were over $33. The United States
Postal Service--the acceptance agent for the majority of passport
applications--regularly conducts a similar study and found that these
costs were more than $34.\2\ See 22 U.S.C. 214(a); 22 CFR 51.51(b).
---------------------------------------------------------------------------
\2\ The United States Postal Service does not produce a public
report on this study.
---------------------------------------------------------------------------
The $10 increase in the passport execution fee will affect first-
time passport applicants and certain applicants who must appear at post
offices and other acceptance facilities such as local clerks of court.
Individuals who apply for a passport renewal by mail will not see a fee
increase.
Regulatory Findings
Administrative Procedure Act
The Department published this rule as a proposed rule on September
19, 2016, with a 60-day provision for public comments. See 81 FR 64088.
In accordance with the Congressional Review Act, this rule will be
effective 60 days after publication and receipt by Congress and the
GAO.
Regulatory Flexibility Act
The Department has reviewed this rule and, by approving it,
certifies that it will not have a significant economic impact on a
substantial number of small entities as defined in 5 U.S.C. 601(6).
Unfunded Mandates Act of 1995
This rule will not result in the expenditure by state, local, or
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any year, and it will not significantly or uniquely
affect small governments. Therefore, no actions were deemed necessary
under the provisions of the Unfunded Mandates Reform Act of 1995, 2
U.S.C. 1501-1504.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is a major rule as defined by 5 U.S.C. 804(2). The
Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. The Department will submit the required information to
the U.S. Senate, the U.S. House of Representatives, and the Comptroller
General of the United States prior to publication of the rule in the
Federal Register. This rule will take effect 60 days after it is
published in the Federal Register and receipt by Congress and the GAO.
Executive Order 12866
The Department has reviewed this rule to ensure its consistency
with the regulatory philosophy and principles set forth in the
Executive Orders. OMB has determined that this rule is economically
significant under Executive Order 12866.
This rule is necessary in light of the Department of State's Cost
of Service Model finding that the cost of executing first-time
passports is higher than the current fee. The Department is setting
this fee in accordance with 22 U.S.C. 214(a) (``There shall be
collected and paid into the Treasury of the United States . . . a fee,
prescribed by the Secretary of State by regulation, for executing each
such [passport] application) and 31 U.S.C. 9701(``The head of each
agency . . . may prescribe regulations establishing the charge for a
service or thing of value provided by the agency . . . based on . . .
the costs to the Government.''). This regulation generally sets the fee
for passport executions at the amount required to recover the costs
associated with providing this service.
Details of the fee change are as follows:
[[Page 4428]]
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Estimated annual Estimated change
Item No. Proposed fee Current fee Change in fee Percentage number of in annual fees
increase applications \1\ collected \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Schedule of Fees for Consular Services
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Passport and Citizenship Services
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Passport Book or Card Execution: Required for $35 $25 $10 40 11,500,000 $115,000,000
first-time applicants and others who must apply
in person........................................
-----------------------------------------------------------------------------------------------------
Total......................................... .............. .............. .............. .............. ................. $115,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Based on projected FY 2018 workload.
As noted in the NPRM, the Department of State does not anticipate
that demand for passport services affected by this rule will change
significantly due to the fee change.
The Department does not believe that passport application fees are
a significant determining factor when Americans decide to travel
internationally. The price of a passport book or card remains minor in
comparison with other costs associated with foreign travel, given that
taxes and surcharges alone on international airfare can easily surpass
$100. As a result, the Department does not believe passport demand will
be significantly affected by the new fee.
Executive Order 13771
This rule is not an E.O. 13771 regulatory action because it is a
transfer rule that changes only the fee for a service without imposing
any new costs.
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.
Executive Order 13175
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 preempt tribal law.
Accordingly, the requirements of Executive Order 13175 do not apply to
this rulemaking.
Paperwork Reduction Act
Information collection 1405-0004, which relates to this rule, is
approved by OMB pursuant to the Paperwork Reduction Act, 44 U.S.C.
Chapter 35. Other than the comments summarized above, the Department
received no public comments regarding this rulemaking. This information
collection has been renewed until August 31, 2019.
List of Subjects in 22 CFR Part 22
Consular Services, Fees, Passports.
Accordingly, 22 CFR part 22 is amended as follows:
PART 22--SCHEDULE OF FEES FOR CONSULAR SERVICES--DEPARTMENT OF
STATE AND FOREIGN SERVICE
0
1. The authority citation for part 22 is revised to read as follows:
Authority: 8 U.S.C. 1101 note, 1153 note, 1183a note, 1351,
1351 note, 1714, 1714 note; 10 U.S.C. 2602(c); 11 U.S.C. 1157 note;
22 U.S.C. 214, 214 note, 1475e, 2504(a), 2651a, 4201, 4206, 4215,
4219, 6551; 31 U.S.C. 9701; Exec. Order 10,718, 22 FR 4632 (1957);
Exec. Order 11,295, 31 FR 10603 (1966).
0
2. In Sec. 22.1, in the table, revise item 1 to read as follows:
Sec. 22.1 Schedule of fees.
* * * * *
Schedule of Fees for Consular Services
------------------------------------------------------------------------
Item No. Fee
------------------------------------------------------------------------
Passport and Citizenship Services:
1. Passport Book or Card Execution: Required for first-time $35
applicants and others who must apply in person............
* * * * *
------------------------------------------------------------------------
Carl C. Risch,
Assistant Secretary for Consular Affairs, Department of State.
[FR Doc. 2018-01809 Filed 1-30-18; 8:45 am]
BILLING CODE 4710-06-P
