Elimination of Customs Broker District Permit Fee, 34549-34554 [2020-04708]
Download as PDF
<![CDATA[
Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules
lotter on DSK9F5VC42PROD with PROPOSALS
other federal, state, or local laws or
regulations? If so, how? Provide any
evidence that supports your position.
With reference to the asserted conflicts,
should the Rule be modified? If so, why,
and how? If not, why not?
IX. Comment Submissions
You can file a comment online or on
paper. For the FTC to consider your
comment, we must receive it on or
before September 3, 2020. Write
‘‘Energy Market Manipulation Rule, 16
CFR part 317, Project No. P082900)’’ on
your comment. Because of the public
health emergency in response to the
COVID–19 outbreak and the agency’s
heightened security screening, postal
mail addressed to the Commission will
be subject to delay. We strongly
encourage you to submit your comment
online through the https://
www.regulations.gov website. To ensure
the Commission considers your online
comment, please follow the instructions
on the web-based form provided by
regulations.gov. Your comment,
including your name and your state,
will be placed on the public record of
this proceeding, including the https://
www.regulations.gov website.
If you file your comment on paper,
write ‘‘Energy Market Manipulation
Rule, 16 CFR part 317, Project No.
P082900’’ on your comment and on the
envelope, and mail it to the following
address: Federal Trade Commission,
Office of the Secretary, 600
Pennsylvania Avenue NW, Suite CC–
5610 (Annex J), Washington, DC 20580,
or deliver your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW,
5th Floor, Suite 5610 (Annex J),
Washington, DC 20024. If possible,
please submit your paper comment to
the Commission by courier or overnight
service.
Because your comment will be placed
on the publicly accessible website at
www.regulations.gov, you are solely
responsible for making sure that your
comment does not include any sensitive
or confidential information. In
particular, your comment should not
include any sensitive personal
information, such as your or anyone
else’s Social Security number; date of
birth; driver’s license number or other
state identification number, or foreign
country equivalent; passport number;
financial account number; or credit or
debit card number. You are also solely
responsible for making sure that your
comment does not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
VerDate Sep<11>2014
17:12 Jun 04, 2020
Jkt 250001
addition, your comment should not
include any ‘‘trade secret or any
commercial or financial information
which . . . is privileged or
confidential’’—as provided by Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
including in particular competitively
sensitive information such as costs,
sales statistics, inventories, formulas,
patterns, devices, manufacturing
processes, or customer names.
Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with FTC Rule 4.9(c).
In particular, the written request for
confidential treatment that accompanies
the comment must include the factual
and legal basis for the request, and must
identify the specific portions of the
comment to be withheld from the public
record. See FTC Rule 4.9(c). Your
comment will be kept confidential only
if the General Counsel grants your
request in accordance with the law and
the public interest. Once your comment
has been posted publicly at https://
www.regulations.gov—as legally
required by FTC Rule 4.9(b)—we cannot
redact or remove your comment unless
you submit a confidentiality request that
meets the requirements for such
treatment under FTC Rule 4.9(c), and
the General Counsel grants that request.
Visit the FTC website to read this
request for comment and the news
release describing it. The FTC Act and
other laws that the Commission
administers permit the collection of
public comments to consider and use in
this proceeding as appropriate. The
Commission will consider all timely
and responsive public comments that it
receives on or before September 3, 2020.
For information on the Commission’s
privacy policy, including routine uses
permitted by the Privacy Act, see
https://www.ftc.gov/site-information/
privacy-policy.
By direction of the Commission.
April J. Tabor,
Acting Secretary.
[FR Doc. 2020–10988 Filed 6–4–20; 8:45 am]
BILLING CODE 6750–01–P
PO 00000
Frm 00013
Fmt 4702
Sfmt 4702
34549
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
19 CFR Parts 24 and 111
[Docket No. USCBP–2020–0010]
RIN 1515–AE43
Elimination of Customs Broker District
Permit Fee
U.S. Customs and Border
Protection, DHS; Department of the
Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
This document proposes to
amend the U.S. Customs and Border
Protection (CBP) regulations to
eliminate customs broker district permit
fees. Concurrently with this document,
CBP is publishing a notice of proposed
rulemaking to, among other things,
eliminate customs broker districts (see
‘‘Modernization of the Customs Brokers
Regulations’’ RIN 1651–AB16).
Specifically, CBP proposes to transition
all brokers to national permits and to
expand the scope of the national permit
authority to allow national permit
holders to conduct any type of customs
business throughout the customs
territory of the United States. By
transitioning to a national permit, CBP
also proposes to eliminate the
requirements for brokers to maintain
district permits. As a result, CBP
proposes the conforming amendments
discussed in this document to eliminate
customs broker district permit fees.
DATES: Comments must be received on
or before August 4, 2020.
ADDRESSES: You may submit comments,
identified by docket number, by one of
the following methods:
• Federal eRulemaking Portal at
https://www.regulations.gov. Follow the
instructions for submitting comments
via Docket No. USCBP–2020–0010.
• Mail: Trade and Commercial
Regulations Branch, Regulations and
Rulings, Office of Trade, U.S. Customs
and Border Protection, 90 K Street NE,
10th Floor, Washington, DC 20229–
1177.
Instructions: All submissions received
must include the agency name and
docket number for this rulemaking. All
comments received will be posted
without change to https://
www.regulations.gov, including any
personal information provided. For
detailed instructions on submitting
comments and additional information
on the rulemaking process, see the
‘‘Public Participation’’ heading of the
SUMMARY:
E:\FR\FM\05JNP1.SGM
05JNP1
34550
Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules
SUPPLEMENTARY INFORMATION section of
this document.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov. Submitted
comments may be inspected during
regular business days between the hours
of 9 a.m. and 4:30 p.m. at the Trade and
Commercial Regulations Branch,
Regulations and Rulings, Office of
Trade, U.S. Customs and Border
Protection, 90 K Street NE, 10th Floor,
Washington, DC. Arrangements to
inspect submitted comments should be
made in advance by calling Ms. Cammy
Canedo at (202) 325–0439.
FOR FURTHER INFORMATION CONTACT:
Melba Hubbard, Chief, Broker
Management Branch, (202) 863–6986,
melba.hubbard@cbp.dhs.gov.
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to
participate in this rulemaking by
submitting written data, views, or
arguments on all aspects of this
proposed rule. U.S. Customs and Border
Protection (CBP) also invites comments
that relate to the economic,
environmental, or federalism effects that
might result from this regulatory
change. Comments that will provide the
most assistance to CBP will reference a
specific portion of the rule, explain the
reason for any recommended change,
and include data, information or
authority that support such
recommended change.
lotter on DSK9F5VC42PROD with PROPOSALS
Background
Section 641 of the Tariff Act of 1930,
as amended (19 U.S.C. 1641), provides
that individuals and business entities
must hold a valid customs broker’s
license and permit to transact customs
business on behalf of others. The statute
also sets forth standards for the issuance
of broker licenses and permits; provides
for disciplinary action against brokers in
the form of suspension or revocation of
such licenses and permits or assessment
of monetary penalties; and provides for
the assessment of monetary penalties
against other persons for conducting
customs business without the required
broker’s license. Section 641 authorizes
the Secretary of the Treasury to
prescribe rules and regulations relating
to the customs business of brokers as
may be necessary to protect the public
and the revenue of the United States
and to carry out the provisions of
section 641.
The regulations issued under the
authority of section 641 are set forth in
Part 111 of title 19 of the Code of
VerDate Sep<11>2014
17:12 Jun 04, 2020
Jkt 250001
Federal Regulations (CFR) (19 CFR part
111) and provide for, among other
things, fee payment requirements
applicable to brokers under section 641
and 19 U.S.C. 58c(a)(7).
The current customs brokers
regulations are based on a district
system in which ports within a district
handle entry, entry summary, and postsummary activity and for which a
broker district permit is required.
Discussion of Proposed Amendments
In a concurrent notice of proposed
rulemaking, published elsewhere in this
issue of the Federal Register (see
‘‘Modernization of the Customs Brokers
Regulations’’ RIN 1651–AB16), CBP
proposes to amend the CBP regulations
by modernizing the customs brokers
regulations to coincide with the
development of CBP trade initiatives
including the Automated Commercial
Environment (ACE) and the Centers of
Excellence and Expertise (Centers).
Specifically, CBP is proposing to
transition all brokers to national permits
and to expand the scope of the national
permit authority to allow national
permit holders to conduct any type of
customs business throughout the
customs territory of the United States.
To accomplish this, CBP proposes to
eliminate broker districts and district
permits, which also eliminates the need
for district permit waivers and for
brokers to maintain district offices. This
document proposes conforming
amendments to Parts 24 and 111 to
eliminate customs broker district permit
fees.
Part 24
Part 24 of title 19 of the CFR (19 CFR
part 24) sets forth the regulations
regarding customs financial and
accounting procedures. Section 24.22
describes the customs Consolidated
Omnibus Budget Reconciliation Act
(COBRA) user fees and limitations for
certain services. Specifically, paragraph
(h) of section 24.22 describes the
customs broker permit user fee. CBP
proposes conforming amendments to
sections 24.22(h) and (i)(9) to eliminate
the customs broker district permit fee.
Part 111
Elimination of District Permits
Section 111.19 provides the
procedures for obtaining broker permits,
responsible supervision and control
requirements for permits, and review
procedures for the denial of a permit. As
further described in the concurrent
notice of proposed rulemaking,
published elsewhere in this issue of the
Federal Register, CBP is proposing to
PO 00000
Frm 00014
Fmt 4702
Sfmt 4702
eliminate district permits and move to
a national permit-only system (see
‘‘Modernization of the Customs Brokers
Regulations’’ RIN 1651–AB16).
Section 111.19(c) describes permit
fees. As CBP is proposing to eliminate
district permits in a concurrent notice of
proposed rulemaking, this document
proposes conforming amendments to
this section by eliminating fees for
district permits. In addition, CBP
proposes removing the specific permit
application and permit user fee amounts
and replacing the numerical figures
with a reference to the relevant fee
provision in sections 111.96(b) and (c).
The proposed changes to section
111.96(b) can be found in the
concurrent notice of proposed
rulemaking.
Elimination of District Permit Fees
Section 111.96 describes fees required
throughout part 111. Paragraph (c) of
section 111.96 describes the permit user
fee. To reflect the proposed elimination
of district permits, CBP proposes to
eliminate the customs broker district
permit fee. CBP also proposes to specify
that the user fee is for national permits
issued under section 111.19(a).
As discussed in the concurrent
proposal ‘‘Modernization of the
Customs Brokers Regulations’’ RIN
1651–AB16, CBP published an interim
final rule that transferred certain trade
functions from the port director to the
Center director. Similarly, certain broker
management functions previously
performed by the port director will be
transferred to the Centers as part of this
proposed rule. CBP proposes to revise
the last sentence of paragraph (c) by
splitting it into two sentences, with the
second sentence providing that the
director of the designated Center will
notify the broker in writing of the failure
to pay and the revocation of the permit.
Other Conforming Amendments
The authority for part 111 currently
provides a specific authority citation for
section 111.3. When the text of section
111.3 was transferred to section 111.2 in
a final rule published in the Federal
Register (65 FR 13880) on March 15,
2000, CBP inadvertently did not revise
the specific authority citation for either
section. CBP proposes to correct this by
revising the specific authority citation
for section 111.2 by adding that this
section is also issued under 19 U.S.C.
1484 and 4798, and by removing the
specific authority citation for section
111.3. An identical amendment is
proposed in the concurrent document,
‘‘Modernization of the Customs Brokers
Regulations’’ RIN 1651–AB16.
E:\FR\FM\05JNP1.SGM
05JNP1
34551
Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules
Executive Orders 13563, 12866, and
13771
Executive Orders 13563 and 12866
direct agencies to assess the costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. Executive
Order 13771 (‘‘Reducing Regulation and
Controlling Regulatory Costs’’) directs
agencies to reduce regulation and
control regulatory costs and provides
that ‘‘for every one new regulation
issued, at least two prior regulations be
identified for elimination, and that the
cost of planned regulations be prudently
managed and controlled through a
budgeting process.’’
This rule is not a ‘‘significant
regulatory action,’’ under section 3(f) of
Executive Order 12866. Accordingly,
OMB has not reviewed this regulation.
As this rule is not a significant
regulatory action, this rule is exempt
from the requirements of Executive
Order 13771. See OMB’s Memorandum
titled ‘‘Guidance Implementing
Executive Order 13771, Titled
‘Reducing Regulation and Controlling
Regulatory Costs’’’ (April 5, 2017).
However, this rule is considered a
deregulatory action under Executive
Order 13771 and the estimated
annualized savings to the public are
$481,089. CBP has prepared the
following analysis to help inform
stakeholders of the impacts of this
proposed rule.
1. Need and Purpose of Rule
The current customs brokers
regulations are based on the district
system in which entry, entry summary,
and post-summary activity are all
handled by the ports within a permit
district. In the rule published
concurrently (RIN 1651–AB16) with this
proposed rule, CBP proposes to
modernize the regulations governing
customs brokers to better reflect the
current work environment and
streamline the customs broker
permitting process to save money.
2. Background
The customs territory of the United
States is divided into seven customs
regions. Within each region, the
customs territory of the United States is
further divided into districts; there are
currently 40 customs districts.1
Currently, a district permit is required
for each district in which a customs
broker intends to conduct customs
business. Each district permit requires a
one-time permit fee of $100 and an
annual user fee of $141.70. A customs
broker has the option of receiving his/
her first district permit concurrently
with the receipt of the customs broker
license in which case the $100 permit
fee is waived. In an effort to modernize
the permitting process for customs
brokers, the proposed rule published
concurrently in the FR (RIN 1651–
AB16) will eliminate the district
permitting process and automatically
grant each district permit holder a
national permit.
3. Proposed Rule Amendments: Costs
and Benefits
Concurrently with this document,
CBP is publishing a notice of proposed
rulemaking that eliminates customs
broker districts (see ‘‘Modernization of
the Customs Brokers Regulations’’ RIN
1651–AB16). CBP proposes to transition
all brokers to national permits and to
expand the scope of the national permit
authority to allow national permit
holders to conduct any type of customs
business throughout the customs
territory of the United States. By
transitioning to a national permit, CBP
proposes to eliminate the requirements
for brokers to maintain district permits
and pay the annual user fee.
Consequently CBP proposes to eliminate
customs broker district permit annual
user fees. CBP has prepared the
following analysis to help inform
stakeholders of the impacts of this
proposed rule.
3.1
Permit User Fee
Currently, the payment of an annual
permit user fee of $141.70 is required
for each permit that is granted to an
individual, partnership, association, or
corporate broker. The permit user fee is
payable for each district and/or national
permit a customs broker has, including
when a district permit is issued
concurrently with the broker’s license.
As a result of the concurrent CBP rule,
district permits will be eliminated and
customs brokers will only need to pay
an annual user fee on a single national
permit.2
According to data from CBP’s Broker
Management Branch, as of January 2017
there were 2,093 3 brokers holding one
or more district permits 4 that have
3,067 active district permits. This is an
average of approximately 1.5 district
permits per customs broker permit
holder. Using this figure we can now
project how many district permits
brokers who currently hold at least one
permit, would have had over the period
of the analysis, from 2017 through 2021
under the baseline condition (i.e., if this
rule is not promulgated). This is shown
in Exhibit 1 below.
EXHIBIT 1—PROJECTION OF NEW INDIVIDUAL AND CORPORATE PERMITS
Year
lotter on DSK9F5VC42PROD with PROPOSALS
2017
2018
2019
2020
2021
New individual
licenses
issued
New individual
permits
New corporate
licenses
issues
New corporate
permits
762
839
922
1,015
1,116
1,143
1,258
1,384
1,522
1,674
97
106
115
126
137
146
159
173
188
205
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
1 In addition to the 40 geographically defined
customs districts, there are three special districts
that are responsible for specific types of imported
merchandise. These special districts include
districts 60, 70 and 80. District 60 refers to entries
made by vessels under their own power. District 70
refers to shipments with a value under $800.
District 80 refers to mail shipments. These three
special districts do not require the use of a licensed
VerDate Sep<11>2014
17:12 Jun 04, 2020
Jkt 250001
broker with a specific district permit and as a result
are not affected by this proposal.
2 The reduction of the fee revenue will result in
less funds available for CBP operations, but this is
offset by the reduction in costs to process the
permits. Thus, there is no net effect to CBP in
reducing this revenue.
3 This figure represents all current licensed
brokers that are permit holders, regardless of what
PO 00000
Frm 00015
Fmt 4702
Sfmt 4702
year they received their license and is inclusive of
the 1,258 brokers that hold at least one district
permit concurrently with a national permit.
4 Note that 11,531 brokers (13,624 active broker
licenses ¥2,093 customs broker permit holders) do
not have any permits at all, and as a result, will not
be affected by the permitting changes of this rule.
E:\FR\FM\05JNP1.SGM
05JNP1
34552
Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules
EXHIBIT 1—PROJECTION OF NEW INDIVIDUAL AND CORPORATE PERMITS—Continued
Year
New individual
licenses
issued
New individual
permits
New corporate
licenses
issues
New corporate
permits
4,654
6,981
581
871
Total ..........................................................................................................
Note: Values may not sum to total due to rounding.
Absent this rule, there would be 4,654
new individual licenses and 581 new
corporate licenses issued for a total of
5,235 licenses (see Exhibit 1). Using the
aforementioned ratio of district permits
to customs broker permit holders of 1.5
district permits to 1 customs broker
permit holder, these 5,235 broker
licenses would result in 7,853 district
permits. According to CBP’s Broker
Management Branch, in addition to the
7,853 district permits that would be
granted over the period of analysis,
approximately 150 national permits are
issued annually. This means that over
the period of analysis from 2017
through 2021, 750 national permits will
be granted to customs brokers in
addition to the 7,853 district permits for
a total of 8,603 permits. Absent this
rule, these 8,603 permits would result in
permit user fee charges of $1,219,045
(8,603 total permits * $141.70 annual
permit user fee) over the period of the
analysis. With this rule in place, the
5,235 total brokers would only receive
a single national permit each for a total
of 5,235 permits. This would result in
permit user fee charges over the period
of analysis of $741,800 (5,235 national
permits * $141.70 annual permit user
fee). This represents total savings to new
customs brokers of $477,245 ($1,219,045
¥ $741,800) over the period of analysis.
Please see Exhibit 2, below, for the
estimated annual cost savings.
EXHIBIT 2—COST SAVINGS FROM THE PERMIT USER FEE FOR NEW LICENSES
[$2016]
New licenses
issued
Year
2017
2018
2019
2020
2021
New district
permits
New national
permits
Total permits
Savings as a
result of this
proposed rule
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
859
945
1,037
1,141
1,253
1,289
1,418
1,556
1,712
1,880
150
150
150
150
150
1,439
1,568
1,706
1,862
2,030
$82,186
88,279
94,797
102,166
110,101
Total ..............................................................................
5,235
7,853
750
8,603
477,245
Note: Values may not sum to total due to rounding.
Current brokers that have more than
one permit will also benefit from this
rule. According to CBP’s Broker
Management Branch, as of January 2017
there were 1,319 brokers that either
have more than one district permit or a
combination of at least one district
permit and a national permit. These
1,319 brokers currently hold a total of
3,613 permits which results in a ratio of
2.73 permits per broker (some of the
existing brokers hold significantly more
than the average of 1.5 permits per
customs broker permit holder). Absent
this rule, these permits would result in
an annual permit user fee charge in
2017 of $511,962 (3,613 permits *
$141.70 annual permit user fee) or
$2,559,810 over the period of analysis
from 2017 through 2021. As a result of
this rule, the 1,319 brokers would only
need to hold a single national permit for
a total of 1,319 permits. This would
result in an annual permit user fee
charge in 2017 of $186,902 (1,319
national permits * $141.70 annual
permit user fee) or $934,510 over the
period of analysis. This represents an
annual savings in 2017 of $325,060
($511,962¥$186,902) or $1,956,192
over the period of analysis to customs
brokers who currently hold more than
one permit. This also represents a
decrease in the transfer payment from
customs brokers to the government of
$1,956,192 over the period of analysis
from 2017 through 2021. Please see
Exhibit 3, below, for the estimated
annual cost savings for existing license
holders.
EXHIBIT 3—COST SAVINGS FROM THE PERMIT USER FEE FOR EXISTING LICENSES OVER PERIOD OF ANALYSIS
[$2016]
Existing
licenses 5
lotter on DSK9F5VC42PROD with PROPOSALS
Year
2017 .........................................................
2018 .........................................................
2019 .........................................................
1,319
1,444
1,582
5 A growth rate of 9.5 percent was used to project
the number of existing licenses over the period of
analysis. The 9.5 percent figure is the average of the
VerDate Sep<11>2014
17:12 Jun 04, 2020
Jkt 250001
Number of
permits absent
rule
Number of
permits with
rule
3,613
3,943
4,318
1,319
1,444
1,582
ten (10) percent calculated average growth rate for
individual licenses and the nine (9) percent
PO 00000
Frm 00016
Fmt 4702
Sfmt 4702
Cost absent
rule
($)
511,962
558,716
611,794
Cost with rule
($)
186,902
204,658
224,101
Annual cost
savings over
period of
analysis
($)
325,060
354,058
387,694
calculated average growth rate for corporate
licenses that was used in the analysis.
E:\FR\FM\05JNP1.SGM
05JNP1
34553
Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules
EXHIBIT 3—COST SAVINGS FROM THE PERMIT USER FEE FOR EXISTING LICENSES OVER PERIOD OF ANALYSIS—
Continued
[$2016]
Existing
licenses 5
Year
Number of
permits absent
rule
Number of
permits with
rule
Cost absent
rule
($)
Cost with rule
($)
Annual cost
savings over
period of
analysis
($)
2020 .........................................................
2021 .........................................................
1,732
1,896
4,728
5,177
1,732
1,896
669,915
733,557
245,390
268,702
424,525
464,855
Total ..................................................
........................
........................
........................
3,085,945
1,129,753
1,956,192
Note: Values may not sum to total due to rounding.
3.2 Total Costs
The elimination of the annual user fee
for district permits does not result in
any costs to brokers, but as noted above
the rule yields the aforementioned cost
savings.
3.3 Total Benefits
The total annual monetized cost
savings for customs brokers are the
result of monetary savings from
switching from a district permitting
system to a national permitting system.
Specifically, the cost savings are the
result of the payment of the annual
permit user fee for only a single national
permit instead of for each of the
potentially several district permits a
broker holds. As shown in Exhibit 4
below, total savings over the period of
analysis are approximately $2.4 million
dollars.
EXHIBIT 4—TOTAL ANNUAL
UNDISCOUNTED SAVINGS FOR BROKERS ($2016), 2017–2021
Year
2017
2018
2019
2020
2021
Total savings
......................................
......................................
......................................
......................................
......................................
$407,246
442,337
482,491
526,691
574,956
Total ..................................
2,433,721
Exhibit 5 shows the total and
annualized savings over the period of
analysis (2017–2021) at a three (3) and
seven (7) percent discount rate, per
guidance provided in OMB Circular A–
4. Total benefits range from
approximately $2.1 to $2.3 million over
the period of analysis. Annualized
benefits are approximately $480,000.
Note: Values may not sum to total due to
rounding.
EXHIBIT 5—TOTAL PRESENT VALUE AND ANNUALIZED BENEFITS, FROM 2017–2021
[$2016]
Total present value benefits
Annualized benefits
3%
7%
3%
7%
$2,284,331
$2,110,639
$484,266
$481,089
3.4 Net Benefits
Exhibit 6 summarizes the monetized
costs and benefits of this rule to
individual and business entity customs
brokers. As shown, the total monetized
present value net benefit of this rule
over a 5-year period of analysis from
2017–2021 ranges from approximately
$2.3 to $2.4 million and the annualized
net benefit is approximately $500,000.
In 2017, we estimate that 859 brokers
will receive their broker licenses (762
individual licenses plus 97 corporate
licenses). The adoption of this rule will
result in an average annual net benefit
per broker in 2017 of $560 ($481,089
annualized net benefit/859 total new
brokers for 2017).
EXHIBIT 6—PRESENT VALUE AND ANNUALIZED NET BENEFIT OF RULE ($2016), 2017–2021
3% Discount rate
lotter on DSK9F5VC42PROD with PROPOSALS
Present value
Total Cost ........................................................................................................
Total Benefit ....................................................................................................
Total Net Benefit .............................................................................................
4. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.), as amended by the
Small Business Regulatory Enforcement
VerDate Sep<11>2014
17:12 Jun 04, 2020
Jkt 250001
$0
2,284,331
2,284,331
and Fairness Act of 1996, requires
agencies to assess the impact of
regulations on small entities. A small
entity may be a small business (defined
as any independently owned and
PO 00000
Frm 00017
Fmt 4702
Sfmt 4702
7% Discount rate
Annualized
$0
484,266
484,266
Present value
$0
2,110,639
2,110,639
Annualized
$0
481,089
481,089
operated business not dominant in its
field that qualifies as a small business
per the Small Business Act); a small notfor-profit organization; or a small
E:\FR\FM\05JNP1.SGM
05JNP1
34554
Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Proposed Rules
governmental jurisdiction (locality with
fewer than 50,000 people).
The proposed rule will apply to all
customs brokers, regardless of size.
Accordingly, the proposed rule will
affect a substantial number of small
entities. However, as stated above in the
Executive Orders 13563, 12866, and
13771 section, the proposed rule will
result in an average savings per customs
broker of a discounted present value of
$560. Since brokers, on average, will
benefit as a result of this rule, and the
savings are relatively small on a per
broker basis, it will not have a
significant impact on customs brokers.
Accordingly, CBP certifies that this rule
does not have a significant impact on a
substantial number of small entities.
5. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (Pub. L. 104–13,
44 U.S.C. 3507) an agency may not
conduct, and a person is not required to
respond to, a collection of information
unless the collection of information
displays a valid control number
assigned by OMB. The collections of
information contained in these
regulations are provided for by OMB
control number 1651–0034 (CBP
Regulations Pertaining to Customs
Brokers) and by OMB control number
1651–0076 (Recordkeeping
Requirements). This rule does not
change the burden under these
information collections.
Signing Authority
This regulation is being issued in
accordance with 19 CFR 0.1(a)(1)
pertaining to the Secretary of the
Treasury’s authority (or that of his
delegate) to approve regulations related
to certain customs revenue functions.
List of Subjects
19 CFR Part 24
Accounting, Claims, Customs duties
and inspection, Harbors, Reporting and
recordkeeping requirements, Taxes.
19 CFR Part 111
lotter on DSK9F5VC42PROD with PROPOSALS
Proposed Amendments to the CBP
Regulations
For the reasons set forth in the
preamble, parts 24 and 111 of title 19 of
the Code of Federal Regulations (19 CFR
parts 24 and 111) are proposed to be
amended as set forth below.
17:12 Jun 04, 2020
1. The general authority citation for
part 24 continues to read as follows:
■
Authority: 5 U.S.C. 301; 19 U.S.C. 58a–
58c, 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1505,
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C.
3717, 9701; Pub. L. 107–296, 116 Stat. 2135
(6 U.S.C. 1 et seq.).
*
*
§ 24.22
*
*
*
[Amended]
2. In § 24.22:
a. Paragraph (h) is amended by:
i. Removing the phrase ‘‘each district
permit and for’’ in the first sentence;
■ ii. Removing the second sentence; and
■ iii. Removing the word ‘‘port’’ from
the third sentence and adding in its
place the words ‘‘designated Center’’;
and
■ b. Paragraph (i)(9) is amended by
removing the phrase ‘‘: for district
permits, class code 497;’’ from the first
sentence.
■
■
■
PART 111—CUSTOMS BROKERS
3. The authority citation for part 111
is revised to read as follows:
■
Authority: 19 U.S.C. 66, 1202 (General
Note 3(i), Harmonized Tariff Schedule of the
United States), 1624; 1641.
Section 111.2 also issued under 19 U.S.C.
1484, 1498;
Section 111.96 also issued under 19 U.S.C.
58c, 31 U.S.C. 9701.
Jkt 250001
the designated Center referred to in
§ 111.19(b). The permit user fee must be
paid by the due date as published
annually in the Federal Register, and
must be remitted in accordance with the
procedures set forth in § 24.22(i) of this
chapter. When a broker submits an
application for a national permit under
§ 111.19(b), the full permit user fee must
be remitted with the application,
regardless of the point during the
calendar year at which the application
is submitted. If a broker fails to pay the
annual permit user fee by the published
due date, the permit is revoked by
operation of law. The director of the
designated Center will notify the broker
in writing of the failure to pay and the
revocation of the permit.
*
*
*
*
*
Approved: March 3, 2020.
Timothy E. Skud,
Deputy Assistant Secretary, Department of
the Treasury.
Mark A. Morgan,
Acting Commissioner, U.S. Customs and
Border Protection.
[FR Doc. 2020–04708 Filed 6–4–20; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF EDUCATION
34 CFR Chapter III
[Docket ID ED–2020–OSERS–0015]
4. In § 111.19, revise the section
heading and paragraph (c) to read as
follows:
Proposed Requirements—The
Individuals With Disabilities Education
Act (IDEA) Paperwork Reduction
Waivers
§ 111.19
AGENCY:
■
National permit.
*
*
*
*
*
(c) Fees. A national permit issued
under paragraph (a) of this section is
subject to the permit application fee
specified in § 111.96(b) and to the
customs user permit fee specified in
§ 111.96 (c). The fees must be paid at the
designated Center (see § 111.1) or online
with the submission of the permit
application.
*
*
*
*
*
5. In § 111.96, paragraph (c) is revised
to read as follows:
■
Administrative practice and
procedure, Brokers, Customs duties and
inspection, Penalties, Reporting and
recordkeeping requirements.
VerDate Sep<11>2014
PART 24—CUSTOMS FINANCIAL AND
ACCOUNTING PROCEDURE
§ 111.96
Fees.
*
*
*
*
*
(c) Permit user fee. Payment of an
annual permit user fee defined in
§ 24.22(h) of this chapter is required for
a national permit granted to an
individual, partnership, association, or
corporate broker. The permit user fee is
payable with the filing of an application
for a national permit under § 111.19(b),
and for each subsequent calendar year at
PO 00000
Frm 00018
Fmt 4702
Sfmt 4702
Office of Special Education and
Rehabilitative Services, Department of
Education.
ACTION: Proposed requirements and
definition.
The Department of Education
(Department) proposes requirements
and a definition for waivers under
section 609 of the Individuals with
Disabilities Education Act (IDEA). The
Department may select as many as 15
States to receive waivers of statutory
requirements of, or regulatory
requirements relating to, IDEA Part B,
for a period of time not to exceed 4
years, to reduce excessive paperwork
and noninstructional time burdens that
do not assist in improving educational
and functional results for children with
disabilities. The purpose of these
waivers is to increase the time and
resources available for instruction and
other activities aimed at improving
educational and functional results for
children with disabilities. Statutory
requirements of, or regulatory
SUMMARY:
E:\FR\FM\05JNP1.SGM
05JNP1
]]>Agencies
[Federal Register Volume 85, Number 109 (Friday, June 5, 2020)]
[Proposed Rules]
[Pages 34549-34554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04708]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
19 CFR Parts 24 and 111
[Docket No. USCBP-2020-0010]
RIN 1515-AE43
Elimination of Customs Broker District Permit Fee
AGENCY: U.S. Customs and Border Protection, DHS; Department of the
Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document proposes to amend the U.S. Customs and Border
Protection (CBP) regulations to eliminate customs broker district
permit fees. Concurrently with this document, CBP is publishing a
notice of proposed rulemaking to, among other things, eliminate customs
broker districts (see ``Modernization of the Customs Brokers
Regulations'' RIN 1651-AB16). Specifically, CBP proposes to transition
all brokers to national permits and to expand the scope of the national
permit authority to allow national permit holders to conduct any type
of customs business throughout the customs territory of the United
States. By transitioning to a national permit, CBP also proposes to
eliminate the requirements for brokers to maintain district permits. As
a result, CBP proposes the conforming amendments discussed in this
document to eliminate customs broker district permit fees.
DATES: Comments must be received on or before August 4, 2020.
ADDRESSES: You may submit comments, identified by docket number, by one
of the following methods:
Federal eRulemaking Portal at https://www.regulations.gov.
Follow the instructions for submitting comments via Docket No. USCBP-
2020-0010.
Mail: Trade and Commercial Regulations Branch, Regulations
and Rulings, Office of Trade, U.S. Customs and Border Protection, 90 K
Street NE, 10th Floor, Washington, DC 20229-1177.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to https://www.regulations.gov, including any
personal information provided. For detailed instructions on submitting
comments and additional information on the rulemaking process, see the
``Public Participation'' heading of the
[[Page 34550]]
SUPPLEMENTARY INFORMATION section of this document.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov. Submitted comments
may be inspected during regular business days between the hours of 9
a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch,
Regulations and Rulings, Office of Trade, U.S. Customs and Border
Protection, 90 K Street NE, 10th Floor, Washington, DC. Arrangements to
inspect submitted comments should be made in advance by calling Ms.
Cammy Canedo at (202) 325-0439.
FOR FURTHER INFORMATION CONTACT: Melba Hubbard, Chief, Broker
Management Branch, (202) 863-6986, [email protected].
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of this
proposed rule. U.S. Customs and Border Protection (CBP) also invites
comments that relate to the economic, environmental, or federalism
effects that might result from this regulatory change. Comments that
will provide the most assistance to CBP will reference a specific
portion of the rule, explain the reason for any recommended change, and
include data, information or authority that support such recommended
change.
Background
Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641),
provides that individuals and business entities must hold a valid
customs broker's license and permit to transact customs business on
behalf of others. The statute also sets forth standards for the
issuance of broker licenses and permits; provides for disciplinary
action against brokers in the form of suspension or revocation of such
licenses and permits or assessment of monetary penalties; and provides
for the assessment of monetary penalties against other persons for
conducting customs business without the required broker's license.
Section 641 authorizes the Secretary of the Treasury to prescribe rules
and regulations relating to the customs business of brokers as may be
necessary to protect the public and the revenue of the United States
and to carry out the provisions of section 641.
The regulations issued under the authority of section 641 are set
forth in Part 111 of title 19 of the Code of Federal Regulations (CFR)
(19 CFR part 111) and provide for, among other things, fee payment
requirements applicable to brokers under section 641 and 19 U.S.C.
58c(a)(7).
The current customs brokers regulations are based on a district
system in which ports within a district handle entry, entry summary,
and post-summary activity and for which a broker district permit is
required.
Discussion of Proposed Amendments
In a concurrent notice of proposed rulemaking, published elsewhere
in this issue of the Federal Register (see ``Modernization of the
Customs Brokers Regulations'' RIN 1651-AB16), CBP proposes to amend the
CBP regulations by modernizing the customs brokers regulations to
coincide with the development of CBP trade initiatives including the
Automated Commercial Environment (ACE) and the Centers of Excellence
and Expertise (Centers). Specifically, CBP is proposing to transition
all brokers to national permits and to expand the scope of the national
permit authority to allow national permit holders to conduct any type
of customs business throughout the customs territory of the United
States. To accomplish this, CBP proposes to eliminate broker districts
and district permits, which also eliminates the need for district
permit waivers and for brokers to maintain district offices. This
document proposes conforming amendments to Parts 24 and 111 to
eliminate customs broker district permit fees.
Part 24
Part 24 of title 19 of the CFR (19 CFR part 24) sets forth the
regulations regarding customs financial and accounting procedures.
Section 24.22 describes the customs Consolidated Omnibus Budget
Reconciliation Act (COBRA) user fees and limitations for certain
services. Specifically, paragraph (h) of section 24.22 describes the
customs broker permit user fee. CBP proposes conforming amendments to
sections 24.22(h) and (i)(9) to eliminate the customs broker district
permit fee.
Part 111
Elimination of District Permits
Section 111.19 provides the procedures for obtaining broker
permits, responsible supervision and control requirements for permits,
and review procedures for the denial of a permit. As further described
in the concurrent notice of proposed rulemaking, published elsewhere in
this issue of the Federal Register, CBP is proposing to eliminate
district permits and move to a national permit-only system (see
``Modernization of the Customs Brokers Regulations'' RIN 1651-AB16).
Section 111.19(c) describes permit fees. As CBP is proposing to
eliminate district permits in a concurrent notice of proposed
rulemaking, this document proposes conforming amendments to this
section by eliminating fees for district permits. In addition, CBP
proposes removing the specific permit application and permit user fee
amounts and replacing the numerical figures with a reference to the
relevant fee provision in sections 111.96(b) and (c). The proposed
changes to section 111.96(b) can be found in the concurrent notice of
proposed rulemaking.
Elimination of District Permit Fees
Section 111.96 describes fees required throughout part 111.
Paragraph (c) of section 111.96 describes the permit user fee. To
reflect the proposed elimination of district permits, CBP proposes to
eliminate the customs broker district permit fee. CBP also proposes to
specify that the user fee is for national permits issued under section
111.19(a).
As discussed in the concurrent proposal ``Modernization of the
Customs Brokers Regulations'' RIN 1651-AB16, CBP published an interim
final rule that transferred certain trade functions from the port
director to the Center director. Similarly, certain broker management
functions previously performed by the port director will be transferred
to the Centers as part of this proposed rule. CBP proposes to revise
the last sentence of paragraph (c) by splitting it into two sentences,
with the second sentence providing that the director of the designated
Center will notify the broker in writing of the failure to pay and the
revocation of the permit.
Other Conforming Amendments
The authority for part 111 currently provides a specific authority
citation for section 111.3. When the text of section 111.3 was
transferred to section 111.2 in a final rule published in the Federal
Register (65 FR 13880) on March 15, 2000, CBP inadvertently did not
revise the specific authority citation for either section. CBP proposes
to correct this by revising the specific authority citation for section
111.2 by adding that this section is also issued under 19 U.S.C. 1484
and 4798, and by removing the specific authority citation for section
111.3. An identical amendment is proposed in the concurrent document,
``Modernization of the Customs Brokers Regulations'' RIN 1651-AB16.
[[Page 34551]]
Executive Orders 13563, 12866, and 13771
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. Executive Order 13771 (``Reducing Regulation and
Controlling Regulatory Costs'') directs agencies to reduce regulation
and control regulatory costs and provides that ``for every one new
regulation issued, at least two prior regulations be identified for
elimination, and that the cost of planned regulations be prudently
managed and controlled through a budgeting process.''
This rule is not a ``significant regulatory action,'' under section
3(f) of Executive Order 12866. Accordingly, OMB has not reviewed this
regulation. As this rule is not a significant regulatory action, this
rule is exempt from the requirements of Executive Order 13771. See
OMB's Memorandum titled ``Guidance Implementing Executive Order 13771,
Titled `Reducing Regulation and Controlling Regulatory Costs''' (April
5, 2017). However, this rule is considered a deregulatory action under
Executive Order 13771 and the estimated annualized savings to the
public are $481,089. CBP has prepared the following analysis to help
inform stakeholders of the impacts of this proposed rule.
1. Need and Purpose of Rule
The current customs brokers regulations are based on the district
system in which entry, entry summary, and post-summary activity are all
handled by the ports within a permit district. In the rule published
concurrently (RIN 1651-AB16) with this proposed rule, CBP proposes to
modernize the regulations governing customs brokers to better reflect
the current work environment and streamline the customs broker
permitting process to save money.
2. Background
The customs territory of the United States is divided into seven
customs regions. Within each region, the customs territory of the
United States is further divided into districts; there are currently 40
customs districts.\1\ Currently, a district permit is required for each
district in which a customs broker intends to conduct customs business.
Each district permit requires a one-time permit fee of $100 and an
annual user fee of $141.70. A customs broker has the option of
receiving his/her first district permit concurrently with the receipt
of the customs broker license in which case the $100 permit fee is
waived. In an effort to modernize the permitting process for customs
brokers, the proposed rule published concurrently in the FR (RIN 1651-
AB16) will eliminate the district permitting process and automatically
grant each district permit holder a national permit.
---------------------------------------------------------------------------
\1\ In addition to the 40 geographically defined customs
districts, there are three special districts that are responsible
for specific types of imported merchandise. These special districts
include districts 60, 70 and 80. District 60 refers to entries made
by vessels under their own power. District 70 refers to shipments
with a value under $800. District 80 refers to mail shipments. These
three special districts do not require the use of a licensed broker
with a specific district permit and as a result are not affected by
this proposal.
---------------------------------------------------------------------------
3. Proposed Rule Amendments: Costs and Benefits
Concurrently with this document, CBP is publishing a notice of
proposed rulemaking that eliminates customs broker districts (see
``Modernization of the Customs Brokers Regulations'' RIN 1651-AB16).
CBP proposes to transition all brokers to national permits and to
expand the scope of the national permit authority to allow national
permit holders to conduct any type of customs business throughout the
customs territory of the United States. By transitioning to a national
permit, CBP proposes to eliminate the requirements for brokers to
maintain district permits and pay the annual user fee. Consequently CBP
proposes to eliminate customs broker district permit annual user fees.
CBP has prepared the following analysis to help inform stakeholders of
the impacts of this proposed rule.
3.1 Permit User Fee
Currently, the payment of an annual permit user fee of $141.70 is
required for each permit that is granted to an individual, partnership,
association, or corporate broker. The permit user fee is payable for
each district and/or national permit a customs broker has, including
when a district permit is issued concurrently with the broker's
license. As a result of the concurrent CBP rule, district permits will
be eliminated and customs brokers will only need to pay an annual user
fee on a single national permit.\2\
---------------------------------------------------------------------------
\2\ The reduction of the fee revenue will result in less funds
available for CBP operations, but this is offset by the reduction in
costs to process the permits. Thus, there is no net effect to CBP in
reducing this revenue.
---------------------------------------------------------------------------
According to data from CBP's Broker Management Branch, as of
January 2017 there were 2,093 \3\ brokers holding one or more district
permits \4\ that have 3,067 active district permits. This is an average
of approximately 1.5 district permits per customs broker permit holder.
Using this figure we can now project how many district permits brokers
who currently hold at least one permit, would have had over the period
of the analysis, from 2017 through 2021 under the baseline condition
(i.e., if this rule is not promulgated). This is shown in Exhibit 1
below.
---------------------------------------------------------------------------
\3\ This figure represents all current licensed brokers that are
permit holders, regardless of what year they received their license
and is inclusive of the 1,258 brokers that hold at least one
district permit concurrently with a national permit.
\4\ Note that 11,531 brokers (13,624 active broker licenses -
2,093 customs broker permit holders) do not have any permits at all,
and as a result, will not be affected by the permitting changes of
this rule.
Exhibit 1--Projection of New Individual and Corporate Permits
----------------------------------------------------------------------------------------------------------------
New individual New corporate
Year licenses New individual licenses New corporate
issued permits issues permits
----------------------------------------------------------------------------------------------------------------
2017............................................ 762 1,143 97 146
2018............................................ 839 1,258 106 159
2019............................................ 922 1,384 115 173
2020............................................ 1,015 1,522 126 188
2021............................................ 1,116 1,674 137 205
---------------------------------------------------------------
[[Page 34552]]
Total....................................... 4,654 6,981 581 871
----------------------------------------------------------------------------------------------------------------
Note: Values may not sum to total due to rounding.
Absent this rule, there would be 4,654 new individual licenses and
581 new corporate licenses issued for a total of 5,235 licenses (see
Exhibit 1). Using the aforementioned ratio of district permits to
customs broker permit holders of 1.5 district permits to 1 customs
broker permit holder, these 5,235 broker licenses would result in 7,853
district permits. According to CBP's Broker Management Branch, in
addition to the 7,853 district permits that would be granted over the
period of analysis, approximately 150 national permits are issued
annually. This means that over the period of analysis from 2017 through
2021, 750 national permits will be granted to customs brokers in
addition to the 7,853 district permits for a total of 8,603 permits.
Absent this rule, these 8,603 permits would result in permit user fee
charges of $1,219,045 (8,603 total permits * $141.70 annual permit user
fee) over the period of the analysis. With this rule in place, the
5,235 total brokers would only receive a single national permit each
for a total of 5,235 permits. This would result in permit user fee
charges over the period of analysis of $741,800 (5,235 national permits
* $141.70 annual permit user fee). This represents total savings to new
customs brokers of $477,245 ($1,219,045 - $741,800) over the period of
analysis. Please see Exhibit 2, below, for the estimated annual cost
savings.
Exhibit 2--Cost Savings From the Permit User Fee for New Licenses
[$2016]
----------------------------------------------------------------------------------------------------------------
Savings as a
Year New licenses New district New national Total permits result of this
issued permits permits proposed rule
----------------------------------------------------------------------------------------------------------------
2017............................ 859 1,289 150 1,439 $82,186
2018............................ 945 1,418 150 1,568 88,279
2019............................ 1,037 1,556 150 1,706 94,797
2020............................ 1,141 1,712 150 1,862 102,166
2021............................ 1,253 1,880 150 2,030 110,101
-------------------------------------------------------------------------------
Total....................... 5,235 7,853 750 8,603 477,245
----------------------------------------------------------------------------------------------------------------
Note: Values may not sum to total due to rounding.
Current brokers that have more than one permit will also benefit
from this rule. According to CBP's Broker Management Branch, as of
January 2017 there were 1,319 brokers that either have more than one
district permit or a combination of at least one district permit and a
national permit. These 1,319 brokers currently hold a total of 3,613
permits which results in a ratio of 2.73 permits per broker (some of
the existing brokers hold significantly more than the average of 1.5
permits per customs broker permit holder). Absent this rule, these
permits would result in an annual permit user fee charge in 2017 of
$511,962 (3,613 permits * $141.70 annual permit user fee) or $2,559,810
over the period of analysis from 2017 through 2021. As a result of this
rule, the 1,319 brokers would only need to hold a single national
permit for a total of 1,319 permits. This would result in an annual
permit user fee charge in 2017 of $186,902 (1,319 national permits *
$141.70 annual permit user fee) or $934,510 over the period of
analysis. This represents an annual savings in 2017 of $325,060
($511,962-$186,902) or $1,956,192 over the period of analysis to
customs brokers who currently hold more than one permit. This also
represents a decrease in the transfer payment from customs brokers to
the government of $1,956,192 over the period of analysis from 2017
through 2021. Please see Exhibit 3, below, for the estimated annual
cost savings for existing license holders.
---------------------------------------------------------------------------
\5\ A growth rate of 9.5 percent was used to project the number
of existing licenses over the period of analysis. The 9.5 percent
figure is the average of the ten (10) percent calculated average
growth rate for individual licenses and the nine (9) percent
calculated average growth rate for corporate licenses that was used
in the analysis.
Exhibit 3--Cost Savings From the Permit User Fee for Existing Licenses Over Period of Analysis
[$2016]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual cost
Existing Number of Number of Cost absent Cost with rule savings over
Year licenses \5\ permits absent permits with rule ($) ($) period of
rule rule analysis ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2017.................................................... 1,319 3,613 1,319 511,962 186,902 325,060
2018.................................................... 1,444 3,943 1,444 558,716 204,658 354,058
2019.................................................... 1,582 4,318 1,582 611,794 224,101 387,694
[[Page 34553]]
2020.................................................... 1,732 4,728 1,732 669,915 245,390 424,525
2021.................................................... 1,896 5,177 1,896 733,557 268,702 464,855
-----------------------------------------------------------------------------------------------
Total............................................... .............. .............. .............. 3,085,945 1,129,753 1,956,192
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Values may not sum to total due to rounding.
3.2 Total Costs
The elimination of the annual user fee for district permits does
not result in any costs to brokers, but as noted above the rule yields
the aforementioned cost savings.
3.3 Total Benefits
The total annual monetized cost savings for customs brokers are the
result of monetary savings from switching from a district permitting
system to a national permitting system. Specifically, the cost savings
are the result of the payment of the annual permit user fee for only a
single national permit instead of for each of the potentially several
district permits a broker holds. As shown in Exhibit 4 below, total
savings over the period of analysis are approximately $2.4 million
dollars.
Exhibit 4--Total Annual Undiscounted Savings for Brokers ($2016), 2017-
2021
------------------------------------------------------------------------
Year Total savings
------------------------------------------------------------------------
2017.................................................... $407,246
2018.................................................... 442,337
2019.................................................... 482,491
2020.................................................... 526,691
2021.................................................... 574,956
---------------
Total................................................. 2,433,721
------------------------------------------------------------------------
Note: Values may not sum to total due to rounding.
Exhibit 5 shows the total and annualized savings over the period of
analysis (2017-2021) at a three (3) and seven (7) percent discount
rate, per guidance provided in OMB Circular A-4. Total benefits range
from approximately $2.1 to $2.3 million over the period of analysis.
Annualized benefits are approximately $480,000.
Exhibit 5--Total Present Value and Annualized Benefits, From 2017-2021
[$2016]
------------------------------------------------------------------------
Total present value benefits Annualized benefits
------------------------------------------------------------------------
3% 7% 3% 7%
------------------------------------------------------------------------
$2,284,331 $2,110, $484,266 $481,089
639
------------------------------------------------------------------------
3.4 Net Benefits
Exhibit 6 summarizes the monetized costs and benefits of this rule
to individual and business entity customs brokers. As shown, the total
monetized present value net benefit of this rule over a 5-year period
of analysis from 2017-2021 ranges from approximately $2.3 to $2.4
million and the annualized net benefit is approximately $500,000. In
2017, we estimate that 859 brokers will receive their broker licenses
(762 individual licenses plus 97 corporate licenses). The adoption of
this rule will result in an average annual net benefit per broker in
2017 of $560 ($481,089 annualized net benefit/859 total new brokers for
2017).
Exhibit 6--Present Value and Annualized Net Benefit of Rule ($2016), 2017-2021
----------------------------------------------------------------------------------------------------------------
3% Discount rate 7% Discount rate
----------------------------------------------------------------
Present value Annualized Present value Annualized
----------------------------------------------------------------------------------------------------------------
Total Cost..................................... $0 $0 $0 $0
Total Benefit.................................. 2,284,331 484,266 2,110,639 481,089
Total Net Benefit.............................. 2,284,331 484,266 2,110,639 481,089
----------------------------------------------------------------------------------------------------------------
4. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996,
requires agencies to assess the impact of regulations on small
entities. A small entity may be a small business (defined as any
independently owned and operated business not dominant in its field
that qualifies as a small business per the Small Business Act); a small
not-for-profit organization; or a small
[[Page 34554]]
governmental jurisdiction (locality with fewer than 50,000 people).
The proposed rule will apply to all customs brokers, regardless of
size. Accordingly, the proposed rule will affect a substantial number
of small entities. However, as stated above in the Executive Orders
13563, 12866, and 13771 section, the proposed rule will result in an
average savings per customs broker of a discounted present value of
$560. Since brokers, on average, will benefit as a result of this rule,
and the savings are relatively small on a per broker basis, it will not
have a significant impact on customs brokers. Accordingly, CBP
certifies that this rule does not have a significant impact on a
substantial number of small entities.
5. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (Pub. L.
104-13, 44 U.S.C. 3507) an agency may not conduct, and a person is not
required to respond to, a collection of information unless the
collection of information displays a valid control number assigned by
OMB. The collections of information contained in these regulations are
provided for by OMB control number 1651-0034 (CBP Regulations
Pertaining to Customs Brokers) and by OMB control number 1651-0076
(Recordkeeping Requirements). This rule does not change the burden
under these information collections.
Signing Authority
This regulation is being issued in accordance with 19 CFR 0.1(a)(1)
pertaining to the Secretary of the Treasury's authority (or that of his
delegate) to approve regulations related to certain customs revenue
functions.
List of Subjects
19 CFR Part 24
Accounting, Claims, Customs duties and inspection, Harbors,
Reporting and recordkeeping requirements, Taxes.
19 CFR Part 111
Administrative practice and procedure, Brokers, Customs duties and
inspection, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the CBP Regulations
For the reasons set forth in the preamble, parts 24 and 111 of
title 19 of the Code of Federal Regulations (19 CFR parts 24 and 111)
are proposed to be amended as set forth below.
PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE
0
1. The general authority citation for part 24 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General
Note 3(i), Harmonized Tariff Schedule of the United States), 1505,
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 3717, 9701; Pub. L. 107-
296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
Sec. 24.22 [Amended]
0
2. In Sec. 24.22:
0
a. Paragraph (h) is amended by:
0
i. Removing the phrase ``each district permit and for'' in the first
sentence;
0
ii. Removing the second sentence; and
0
iii. Removing the word ``port'' from the third sentence and adding in
its place the words ``designated Center''; and
0
b. Paragraph (i)(9) is amended by removing the phrase ``: for district
permits, class code 497;'' from the first sentence.
PART 111--CUSTOMS BROKERS
0
3. The authority citation for part 111 is revised to read as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1624; 1641.
Section 111.2 also issued under 19 U.S.C. 1484, 1498;
Section 111.96 also issued under 19 U.S.C. 58c, 31 U.S.C. 9701.
0
4. In Sec. 111.19, revise the section heading and paragraph (c) to
read as follows:
Sec. 111.19 National permit.
* * * * *
(c) Fees. A national permit issued under paragraph (a) of this
section is subject to the permit application fee specified in Sec.
111.96(b) and to the customs user permit fee specified in
Sec. 111.96 (c). The fees must be paid at the designated Center (see
Sec. 111.1) or online with the submission of the permit application.
* * * * *
0
5. In Sec. 111.96, paragraph (c) is revised to read as follows:
Sec. 111.96 Fees.
* * * * *
(c) Permit user fee. Payment of an annual permit user fee defined
in Sec. 24.22(h) of this chapter is required for a national permit
granted to an individual, partnership, association, or corporate
broker. The permit user fee is payable with the filing of an
application for a national permit under Sec. 111.19(b), and for each
subsequent calendar year at the designated Center referred to in Sec.
111.19(b). The permit user fee must be paid by the due date as
published annually in the Federal Register, and must be remitted in
accordance with the procedures set forth in Sec. 24.22(i) of this
chapter. When a broker submits an application for a national permit
under Sec. 111.19(b), the full permit user fee must be remitted with
the application, regardless of the point during the calendar year at
which the application is submitted. If a broker fails to pay the annual
permit user fee by the published due date, the permit is revoked by
operation of law. The director of the designated Center will notify the
broker in writing of the failure to pay and the revocation of the
permit.
* * * * *
Approved: March 3, 2020.
Timothy E. Skud,
Deputy Assistant Secretary, Department of the Treasury.
Mark A. Morgan,
Acting Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2020-04708 Filed 6-4-20; 8:45 am]
BILLING CODE 9111-14-P
