Frequency of Renewal Cycle for Indirect Air Carrier Security Programs, 8550-8557 [2024-02495]
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Federal Register / Vol. 89, No. 27 / Thursday, February 8, 2024 / Rules and Regulations
DEPARTMENT OF HOMELAND
SECURITY
navigation-structure/regulatory-policy/
regulatory-flexibility-act/sbrefa.
Transportation Security Administration
Abbreviations and Terms Used in This
Document
49 CFR Part 1548
[Docket No. TSA–2020–0002]
RIN 1652–AA72
Frequency of Renewal Cycle for
Indirect Air Carrier Security Programs
Transportation Security
Administration, Department of
Homeland Security (DHS).
ACTION: Final rule.
AGENCY:
The Transportation Security
Administration (TSA) is modifying its
regulations to reduce the frequency of
renewal applications by indirect air
carriers (IACs). Rather than requiring
these entities to submit an application
to renew their security program each
year, TSA now requires renewal once
every 3 years. This modification reduces
the burden of compliance without a
negative impact on security.
DATES: This rule is effective March 11,
2024.
FOR FURTHER INFORMATION CONTACT:
Angel Rodriguez, telephone 1–571–227–
2108; email angel.l.rodriguez@
tsa.dhs.gov; 6595 Springfield Center
Drive, Springfield, VA 20598–6003.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Availability of Rulemaking Document
You can find an electronic copy of
this rule using the internet by accessing
the Government Publishing Office’s web
page at https://www.govinfo.gov/app/
collection/FR/ to view the daily
published Federal Register edition or
accessing the Office of the Federal
Register’s web page at https://
www.federalregister.gov. Copies are also
available by contacting the individual
identified for ‘‘General Questions’’ in
the FOR FURTHER INFORMATION CONTACT
section. Make sure to identify the docket
number of this rulemaking.
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Small Entity Inquiries
The Small Business Regulatory
Enforcement Fairness Act (SBREFA) of
1996 requires TSA to comply with small
entity requests for information and
advice about compliance with statutes
and regulations within TSA’s
jurisdiction. Any small entity that has a
question regarding this document may
contact the person listed in the FOR
FURTHER INFORMATION CONTACT section.
Persons can obtain further information
regarding SBREFA on the Small
Business Administration’s web page at
https://www.sba.gov/category/advocacy-
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CCSF—Certified Cargo Screening Facility
CEQ—Council on Environmental Quality
DHS—Department of Homeland Security
DOT—Department of Transportation
E.O.—Executive Order
FOIA—Freedom of Information Act
IAC—Indirect Air Carrier
IACSSP—Indirect Air Carrier Standard
Security Program
NEPA—National Environmental Policy Act
OMB—Office of Management and Budget
PRA—Paperwork Reduction Act of 1995
SBREFA—Small Business Regulatory
Enforcement Fairness Act of 1996
SSI—Sensitive Security Information
TSA—Transportation Security
Administration
I. Executive Summary
A. Purpose of the Regulation
The Indirect Air Carrier (IAC),
sometimes called a freight forwarder,
acts as an intermediary between a
shipper of air cargo and an air carrier by
receiving and consolidating cargo from
one or more shippers for transport on
one or more aircraft flights. IACs are a
critical component of the secure air
cargo supply chain in the United States,
helping to ensure the safe, timely, and
efficient movement of goods every day.
Approximately 3,800 IACs are operating
in the United States and registered with
TSA, ranging from sole proprietors
working out of their homes to large
corporations. Currently, TSA’s
regulations require IACs to renew their
registration each year.
TSA is modifying 49 CFR 1548.7 to
reduce the frequency at which IACs
must renew their registration from
annual to once every 3 years. This
modification reduces the burden of
compliance by reducing the time and
effort an IAC must devote to renewing
their registration, permitting them to
focus on other operational and business
priorities. TSA has determined that the
change will not have a negative impact
on aviation security.
B. Summary of Major Provisions
This final rule makes limited changes
to 49 CFR 1548.7, which are necessary
to change the regulatory requirement for
the IAC security program-renewal from
1 year to 3 years. Table 1 identifies each
change.
C. Costs and Benefits
TSA has determined this modification
reduces the cost of compliance without
any negative impacts on security. As
described in the notice of proposed
rulemaking (NPRM) (87 FR 79264,
PO 00000
Frm 00026
Fmt 4700
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December 27, 2022) and as noted below,
TSA estimates that, over 10 years, cost
savings aggregate to $7.8 million
undiscounted, $6.6 million discounted
at 3 percent, and $5.4 million
discounted at 7 percent. This final rule
would realize an annualized $0.8
million cost savings discounted at 7
percent over 10 years.
II. General Discussion of the
Rulemaking
A. Background
To ensure the security of the air cargo
system, TSA imposes security
requirements on IACs in 49 CFR part
1548. Through these regulations, TSA
ensures ‘‘IACs are held accountable for
securing the goods entrusted to them
throughout those legs of the supply
chain for which they are responsible.’’ 1
Under 49 CFR 1548.5, each IAC must
adopt and carry out the IAC Standard
Security Program (IACSSP). Persons
interested in becoming IACs are vetted
by TSA and are required to implement
security requirements in the IACSSP.
These requirements are intended to
ensure security during the period
between when a package leaves a
shipper and when it is presented to the
aircraft operators. IACs must also ensure
their employees understand and are
trained to implement their security
responsibilities.
Current 49 CFR 1548.7(b) presents the
processes an IAC must follow annually
to seek renewed approval from TSA to
operate under the IACSSP. In general,
annual renewal is a continuation of
current practices and security measures
in the IACSSP, including any TSAapproved amendments issued under 49
CFR 1548.7(c), (d), and/or (e). IACs must
submit the renewal request to TSA at
least 30 calendar days before expiration
of the IACSSP, as well as other
standards for the submission.
Since 2006, TSA has required IACs to
renew their registration each year. Since
the annual renewal requirement was
imposed in 2006, TSA has determined
that it is unnecessary to continue
requiring annual renewal and that the
program could be renewed once every 3
years without having a negative impact
on security. As discussed below, this
determination is based on two key
factors: (1) TSA’s inspection processes
and priorities for IACs negate the need
for annual renewals, and (2) the
triennial renewal requirement for other
TSA air cargo programs that have
proven to be effective and secure.
1 See Proposed Rule, Air Cargo Security
Requirements, 69 FR 65257, 65269 (Nov. 10, 2004).
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TSA published an NPRM on
December 27, 2022,2 proposing to
change the renewal period, and
requested comments from the public to
be submitted by February 27, 2023. TSA
received two comments, both from
interested industry associations.
B. Summary of Comments
TSA received two comments, both
from interested industry associations.
One trade association representing
indirect air carriers and aircraft
operators expressed general support for
the rule, and expressed the belief that
the rule would not negatively impact
security.3 Another trade association
representing airline pilots
recommended that TSA not move
forward with the rulemaking.4 The
association for the airline pilots stated:
(1) TSA should not reduce oversight in
pursuit of economic relief, which could
reduce opportunities to discover
evolving security threats; (2) TSA’s
estimated burden of 4 hours to complete
annual certification is not a meaningful
burden on industry; (3) the high
turnover rate among IAC staff requires
TSA audits and training verification on
an annual basis at a minimum; and (4)
if TSA’s process for revalidating IACs is
tied to their security program renewals,
the shift to a 3-year renewal cycle would
create an unnecessary security risk and
TSA should assess IACs for security
risks on an annual basis, or more
frequently.
TSA Response: Following review of
the issues raised by the airlines pilots’
association, TSA has determined that
the commenter provided no new
information to counter TSA’s previous
determination on the benefits and need
for this rulemaking. First, TSA is not
sacrificing security in order to obtain
economic benefits. These limited
changes to the IAC regulation are
consistent with 49 U.S.C. 114(l)(3),
which requires TSA to consider the
costs of any proposed regulation relative
to its security benefit. In addition,
Executive Order (E.O.) 13563 of January
18, 2011 (Improving Regulation and
Regulatory Review), requires agencies to
periodically review existing regulations
to identify requirements that ‘‘may be
outmoded, ineffective, insufficient, or
excessively burdensome, and to modify,
streamline, expand, or repeal them in
accordance with what has been
learned.’’ 5 Before proposing this
change, TSA conducted a risk analysis
2 87
FR 79264 (Dec. 27, 2022).
3 https://www.regulations.gov/docket/TSA-2020-
0002/comments, TSA–2020–0002–0002.
4 https://www.regulations.gov/docket/TSA-20200002/comments, TSA–2020–0002–0003.
5 See sec. 6 of E.O. 13563.
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and determined that the revision would
not have a negative impact on security
due to other compensating procedures.
This final rule provides an overall
reduction in the burden of compliance
without negatively affecting security.6
Second, the costs of compliance with
the annual renewal requirement may be
relatively small for each IAC, but TSA
estimates that over 10 years the cost
savings aggregate to $7.8 million
undiscounted, $6.6 million discounted
at 3 percent, and $5.4 million
discounted at 7 percent. The rule would
realize annualized savings of $0.8
million in 2020 dollars.7 These cost
savings accrue for both the industry and
TSA. Reducing the administrative
burden on TSA staff of reviewing
annual renewal applications allows TSA
to focus additional resources and staff
effort on the highest air cargo security
priorities.
Third, as noted in the NPRM, the
transition from an annual security
program certification to a 3-year security
program certification renewal period
does not mean that IACs will only be
assessed or audited for compliance once
every 3 years. As discussed in the
NPRM and below, TSA has determined
that a 3-year renewal cycle is effective,
efficient, and secure when coupled with
an appropriately staffed and resourced
inspection and enforcement program.8
TSA acknowledges the airline pilots
association concern regarding turnover
in the IAC industry, but an extension of
the recertification period does not mean
a reduction in regulatory inspections.
This determination is supported by
TSA’s experience with other air cargo
security regulations, specifically the
Certified Cargo Screening Program
(CCSP), and TSA believes it will be
similarly effective with IACs.9
Fourth, under this final rule, within
any 3-year period, every IAC will be
subject to at least one triennial
comprehensive inspection, two targeted
annual inspections in years when a
comprehensive inspection is not
conducted, and possible supplemental
inspections whenever TSA’s assessment
of risk or evolving compliance posture
indicate that additional inspections are
warranted. TSA’s process for inspecting
and revalidating IACs is not tied to the
annual renewal of IAC security
programs because the inspection and
revalidation schedules of TSA
inspectors are managed separately from
TSA’s program renewal efforts. TSA
implements a national inspection plan
6 87
FR 79265.
FR 79266.
8 See id. for more discussion on this issue.
9 Id.
7 87
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based on regular cycles, and conducts
focused Special Emphasis Assessments
and Special Emphasis Inspections
whenever necessary. Further, TSA’s
local inspection plans augment the
national plan with risk-based local
inspection and revalidation schedules
that consider regional threats, a specific
IAC’s past performance, and other
factors.
TSA’s local field offices determine
whether to conduct additional
inspections of an individual IAC by
assessing the results of prior compliance
reviews in light of evolving and
emerging threat information. TSA’s
local field offices may conduct more
frequent inspections of IACs that have
lower compliance rates, or otherwise
present an elevated security risk. All
IACs are subject to supplemental
inspections if the local field office
determines one is necessary.
When TSA imposed the annual
renewal requirement in 2006, TSA
expected that the annual cycle of
renewals would be the primary method
to ensure the agency regularly reviewed
each IAC and confirmed compliance
with TSA security requirements. As
described above, TSA now ensures
compliance with the program through
the nationwide schedule of regular
annual inspections, Special Emphasis
Assessments and Inspections, and
additional inspections at the discretion
of the local field office.
An additional safeguard is provided
by 49 CFR 1540.301, which allows TSA
to withdraw approval of an IAC security
program if TSA determines continued
operation is contrary to security and the
public interest. If TSA withdraws
approval, an IAC must discontinue
operation immediately, regardless of the
renewal date of its program certification.
As TSA noted in the NPRM,10 the
triennial renewal requirement for other
TSA air cargo programs have proven to
be effective and secure. In addition to
recognizing the effectiveness of its
regular inspections to ensure
compliance with the IAC program, TSA
considered the requirements for the IAC
program compared to other aviation
security requirements, specifically
requirements for the CCSP under 49
CFR part 1549. When TSA finalized the
rule establishing the CCSP in 2011, TSA
provided a 3-year renewal period for
Certified Cargo Screening Facilities
(CCSFs). Experience gained by more
than a decade of implementing the
CCSP validates that the triennial
recertification cycle does not have a
negative impact on security. The final
rule does not change the actions that
10 87
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IACs must perform to recertify or the
requirements they must meet to
maintain approval to operate as an IAC;
the final rule simply reduces the
frequency with which they must
recertify.
C. Section-by-Section Analysis
After consideration of each comment
and any relevant potential changes to
the proposed rule, TSA is adopting the
revisions as proposed in the NPRM.
TSA has addressed all issues and
concerns derived from these comments
in the discussion below.
Table 1 identifies each change made
to 49 CFR 1548.7 as a result of this
rulemaking.
TABLE 1—CHANGES TO 49 CFR 1548.7
Section
Prior text
Revised text
1548.7(a)(4) ..............
Removing the words ‘‘one year after the month it was approved’’.
1548.7(a)(5) ..............
...............................................................................................
1548.7(b)(1) ..............
Removing the words ‘‘at least 30 calendar days prior to the
first day of the anniversary month of initial approval’’.
Removing the words ‘‘one year after the month it was renewed’’.
Adding in their place ‘‘3 years after the month it was approved, or until the program has been surrendered or
withdrawn, whichever is earlier’’.
In the introductory text, adding the words ‘‘or renewal’’ after
the words ‘‘submitted during its initial’’.
Adding in their place ‘‘at least 30 calendar days before the
36th month after the initial approval’’.
Adding in their place ‘‘3 years after the month it was renewed, or until the program has been surrendered or
withdrawn, whichever is earlier’’.
1548.7(b)(4) ..............
III. Regulatory Analyses
TSA conducted a regulatory impact
analysis (RIA) for the NPRM, posted in
the docket for this rulemaking. As there
were no comments related to the
regulatory impact analysis in the NPRM,
TSA has made no changes to the
analysis in this final rule. TSA
considered numerous statutes and
executive orders related to rulemaking
when developing this rule. The
following summarizes TSA’s analyses of
the impact of the rulemaking as directed
by these statutes or Executive orders.
A. Regulatory Planning and Review
1. Background
Under the requirements of E.O. 12866
of September 30, 1993 (Regulatory
Planning and Review),11 as amended by
E.O. 14094 of April 6, 2023
(Modernizing Regulatory Review),12 and
E.O. 13563 of January 18, 2011
(Improving Regulation and Regulatory
Review),13 agencies must assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, select regulatory approaches
that maximize net benefits (including
potential economic, environmental,
public health and safety effects,
distributive impacts, and equity). These
requirements were supplemented by
E.O. 13563, which emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility.
The Office of Management and Budget
(OMB) has determined this rule is not
a significant regulatory action under
section 3(f) of E.O. 12866, as amended.
Accordingly, OMB has not reviewed
this rule.
In conducting these analyses, TSA has
certified that this rulemaking does not
have a significant economic impact on
a substantial number of small entities.
The basis for this conclusion is set
forth below.
This final rule reduces regulatory
costs by reducing the frequency that
IACs must renew their security program
certifications. This final rule reduces the
frequency of annual IAC security
program certifications to once every 3
years. This rule does not impose any
incremental costs because regulated
entities are already performing all
actions required to obtain the
certification in question. The expected
outcome will be a minimal impact with
positive net benefits.
2. Estimated Cost Savings to Affected
Entities
The cost savings from this rule arise
from extending the duration of IAC
security programs approved by TSA
from 1 year to 3 years. This change
aligns the duration of the IAC security
program with the CCSP.14 Table 2
summarizes the change and impact from
this action.
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TABLE 2—COMPARISON OF CURRENT 49 CFR PART 1548 AND THE FINAL RULE
Current
Final rule
Impact
Estimated cost savings
Requires annual
renewal of security program.
Revises to renewal every
3 years.
(1) Aligns part 1548 renewal period with that
of the TSA-approved Certified Cargo
Screening Program, part 1549.
(2) Provides cost savings to industry and
TSA.
TSA estimates the annualized cost saving to industry and
Federal government to be $0.8 million annualized at a 7
percent discount rate. Cost savings arise from time saved
due to a less frequent security program renewal cycle.
To estimate cost savings, TSA
calculates the number of instances an
IAC would resubmit a security program
under the current annual requirement,
and the number of instances that would
be avoided under the final rule’s 3-year
11 Published
12 Published
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at 88 FR 21879 (Apr. 6, 2023).
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requirement. TSA uses the difference in
the number of resubmission instances
between the current requirement and
the final rule as the basis for the cost
savings.
13 Published
PO 00000
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at 76 FR 3821 (Jan. 21, 2011).
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TSA uses historical data on the
number of existing IACs to forecast the
number of security programs submitted
for certification over the 10-year period
of analysis. TSA assumes that the
regulatory change for less frequent
14 See 49 CFR 1549.7(a)(6). See also supra notes
8 and 10, and accompanying text.
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recertification does not impact the
annual number of forecasted active IAC
certifications. Based on historical
program data, TSA assumes the
aggregate population of active and
approved IACs under the baseline and
the final rule decreases each year with
more dropping out than entering. TSA
calculates that the aggregate active
population decreases at an annual rate
of 1.61 percent 15 and compounds this
rate to estimate the aggregate active IAC
population for the next 10 years, as
displayed in column a of Table 3. The
aggregate active population of IACs
(column a) also represents the number
of security program submissions and
resubmissions under the baseline
annual renewal requirement.
TSA postulates that the number of
newly approved IAC applications
represents a proportion of the number of
aggregate active IACs in the same year.
This proportion has stabilized over the
last 5 years at 5.41 percent. TSA applied
this percentage to the forecasted
aggregate number of active IACs during
a year to estimate the number of newly
approved IAC applications during the
same year 16 as displayed in column c of
Table 3.
The aggregate active population of
IACs during a year is composed of IAC
renewals and newly approved IAC
applications. Since TSA calculates the
number of newly approved IAC
applications by assuming they are a
constant proportion of the number of
aggregate active IACs, then the number
of renewals must be estimated applying
the complementary proportion to the
number of aggregate active IACs, as
shown in column b of Table 3.17
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15 Based on TSA data, there were 4,576 IACs in
2008 and 3,768 in 2020. TSA calculates a negative
compound annual growth rate of 1.61% = (3,768 ÷
4,576)(1 ÷ (2020¥2008))¥1.
16 The number of aggregate active IACs is
estimated using the previous year aggregate value
and the negative growth rate. For instance, the year
0 (2022) aggregate number of active IACs of 3,648
is estimated applying the negative growth rate to
the year¥1 (2021) aggregate number of 3,707: 3,648
= 3,707 × (1¥1.61%). The number of new IAC
applications in year 0 is estimated at 197 by
multiplying the estimated number of aggregate IACs
in year 0 (3,648) by the average proportion of new
IAC applications: 197 = 3,648 × 5.41%.
17 The number of IAC renewals is estimated
applying the percentage complementary to the
proportion of new IAC applications (1¥5.41%) into
the aggregate number of active IACs. For instance,
the year 0 (2022) number of renewals is estimated
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The exit rate of IAC in a given year
is based on the subtraction of the given
year’s active IAC population from the
preceding year’s active IAC population,
and the removal of the given year’s
newly approved IACs,18 as displayed in
column d of Table 2. Since the number
of IAC exits is estimated based on the
number of active IACs during the year
and the number of newly approved IAC
applications, an exit rate is derived from
these two estimates for the purposes of
compounding the number of exits over
time. TSA calculates an IAC exit rate of
6.92 percent 19 (i.e., do not resubmit or
are not approved) from year to year. The
exit rate in a specific year is the
percentage of IACs that do not request
their security program renewed 20 out of
the total number of IACs that had a
security program in place before this
year.
TSA estimates the total number of
submissions in two blocks: the first
block includes submissions associated
with the current IAC population in each
year, and the second block includes
submissions from new applicants. This
final rule is expected to be implemented
in year 1 and the relevant prior year
active IAC population will have, by
then, a valid security plan; which will
have to be renewed following the new
multiplying the number of aggregate active IACs, or
3,648, by the complementary percentage of 94.59%
to obtain 3,451 (3,648 × 94.59%). The number of
IAC renewals can also be estimated subtracting the
number of newly approved IAC applications from
the number of aggregate active IACs.
18 For example, calculations of Year 0, Year 1 and
Year 2 IAC Exits are as follows:¥257 (Year 0 Exits)
= 3,648 (Year 0 Active IACs)¥3,707 (Year¥1
Active IACs)¥197 (Year 0 Newly Approved
IACs);¥253 (Year 1 Exits) = 3,589 (Year 1 Active
IACs)¥3,648 (Year 0 Active IACs)¥194 (Year 1
Newly Approved IACs); and¥249 (Year 2 Exits) =
3,532 (Year 2 Active IACs)¥3,395 (Year 1 Active
IACs)¥191 (Year 2 Newly Approved IACs).
19 The exit rate is estimated by dividing the
number of IAC exits by the aggregate number of
active IACs in the previous year. For example, TSA
estimates there would be 257 exits in year 0 (197
exits that were replaced by new entrants plus the
60 exits that decreased the aggregate population).
TSA calculates a 6.92% exit rate in year 0 (257 exits
÷ 3,707 aggregate active IACs in year¥1). This exit
rate is the same throughout the 10-year period of
analysis. The exit rate for future years can also be
derived mathematically as follows: (Newly
Approved IAC Proportion) × (1 + Active IAC
Growth Rate)¥(Active IAC Growth Rate), which
numerically is equal to: 6.92% = 5.41%
(1¥1.61%)¥(¥1.61%).
20 Firms do not get renewals either because a
submission was not filed or was not approved.
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3-year cycle.21 New applicants would
also have to follow this 3-year renewal
cycle. In both blocks, there is a share of
IAC firms that will not renew their
security plans during the next renewal
event, and a share of IAC firms that will
renew. The number of IACs
resubmitting in a given year is estimated
by multiplying the number of program
submissions from 3 years prior by a
factor that results from compounding
the annual exit rate over 3 years; this
retention factor, estimated to be 80.6
percent,22 is multiplied by the number
of program submissions from 3 years
before estimate the number of renewals
in the corresponding year.
Table 3 staggers recertifications under
the final rule’s 3-year cycle 23 in four
separate columns for submissions one to
four in the 10-year projection span. For
example, TSA estimates that 2,738 of
the 3,395 IAC recertifications in year 1
would resubmit their security programs
in year 4,24 and that 159 of the 197 new
entrants in year 1 would resubmit for
the first time in year 4 (see columns e
and f regarding first and second
submissions). In Table 3, TSA takes into
account four recertification cycles 25
within the 10-year framework (columns
e through h) and sums all the
recertifications under the final rule in
column i. Finally, TSA calculates the
number of eliminated recertifications
(column j) by subtracting the final rule
recertifications (column i) from the
baseline annual recertifications (column
b).
21 It is assumed that the validity of security plans
will be extended until year 1 once this action is
executed. If an IAC firm in the year 0 population
wants to remain active over the 10 years of analysis
it will have to obtain four renewals during this
period, in years 1, 4, 7, and 10.
22 80.6% = (100%¥6.92% exit rate)(3-year cycle).
23 A cycle is the period in between renewals (or
between the first renewal and the initial approval).
The 3-year cycle means that submissions have to be
renewed every 3 years. The current submission
cycle is annual, one submission every year.
24 Note IACs that were approved by TSA in
year¥1 (2 years before the start date of this rule)
and partially in year 0 (1 year before the publication
of this final rule) would need to resubmit 36
months from their last approval. IACs that were
approved before the publication of the final rule
(¥1 & 0) are included in year¥1, for the purpose
of this analysis. For example: (Year 4 Second Cycle
Resubmissions) = (Year 1 Renewals) × 80.6%.
25 The frequency in which an IAC must resubmit
their security program for review.
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TABLE 3—NUMBER OF FINAL RULE ELIMINATED SECURITY PROGRAM RECERTIFICATIONS
Recertification cycle 28
Active
IACs 26
Baseline
recerts 27
New IACs
a(¥1) =
initial pop a
= a(n¥1) ×
(1¥1.61%)
b1 = first
year
renewals
bn = an ×
(1¥5.41%)
c = an ×
(5.41%)
3,589
3,532
3,475
3,419
3,364
3,310
3,257
3,205
3,153
3,103
3,395
3,341
3,287
3,234
3,182
3,131
3,081
3,032
2,983
2,935
Year
1 ..............
2 ..............
3 ..............
4 ..............
5 ..............
6 ..............
7 ..............
8 ..............
9 ..............
10 ............
IAC exits
dn =
(an¥a(n¥1))¥cn
1st
2nd
3rd
4th
e1 = b1 en
= c(n¥3)
× (0.806)
fn = e(n¥3)
× (0.806)
gn = f(n¥3)
× (0.806)
hn =
g(n¥3)
× (0.806)
0
0
0
2,738
130
128
126
124
122
120
0
0
0
0
0
0
2,207
105
103
102
¥253
¥249
¥245
¥241
¥237
¥233
¥229
¥226
¥222
¥218
194
191
188
185
182
179
176
173
170
168
3,395
162
159
156
154
151
149
147
144
142
Final rule
recerts
Eliminated
recerts
i=e+f+
g+h
j = b¥i
0
0
0
0
0
0
0
0
0
1,780
3,395
162
159
2,894
284
280
2,483
376
370
2,144
0
3,179
3,128
340
2,898
2,852
598
2,656
2,613
791
Note: Calculations may not be exact due to rounding in the table.
TSA estimates a time burden of 4
hours for an IAC manager to review and
resubmit a security program. To
calculate the hourly savings to industry,
TSA multiplies the 4-hour burden by
the fully loaded hourly wage rate for an
IAC manager. TSA calculates the wage
rate by estimating a weighted wage rate
for two occupations across two industry
subgroups.29 To calculate the weighted
wage rate, TSA multiplies each labor
category wage rate by its respective
number of employees, sums the product
of these calculations, and then divides
the result by the total number of
employees across all four wage rates.
Table 4 illustrates the weighted average
wage calculation.
TABLE 4—CALCULATION OF WEIGHTED AVERAGE INDUSTRY WAGE RATE
Industry NAICS
Freight Transportation Arrangement (488510).
Management, Scientific,
and Technical Consulting Services
(541611).
Wage rate
Number of
employees
a
b
Occupations
First-Line Supervisors of Transportation and Material Moving Workers (53–1040)
$28.72
3,460
Transportation, Storage, and Distribution Managers (11–3071) .............................
First-Line Supervisors of Transportation and Material Moving Workers (53–1040)
46.41
27.52
4,920
3,190
Transportation, Storage, and Distribution Managers (11–3071) .............................
50.65
2,680
Industry Weighted Average Wage Rate = è(ai × bi) ÷ èb
$38.68
Note: Calculations may not be exact due to rounding in the table.
Next, TSA adjusts this wage rate to
account for employer benefits,30 which
results in an industry compensation rate
of $57.90 per hour. Table 5 illustrates
the calculation of the hourly industry
compensation rate based on these
adjustments.
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TABLE 5—CALCULATION OF INDUSTRY COMPENSATION RATE
Weighted wage rate
(a)
Benefits factor
(b)
Compensation rate
(c = a × b)
$38.68
1.4968
$57.90
26 The active IAC population in subsequent years
was estimated by applying the negative growth rate
of 1.61% to the active IAC population. The negative
growth rate represents the net change in the active
IAC population accounting for IAC exits and
entries. Year 1’s value accounts for 3 years of
negative growth derived from 3,768 IACs as of the
end of fiscal year 2020 based on TSA records.
27 Baseline renewals represent Active IACs minus
New IACs.
28 A retention factor of 0.806 is calculated as the
exit rate of 6.92 percent compounded over 3 years
to account for the number of IACs still operating
who submitted a security program 3 years prior.
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29 Bureau of Labor Statistics (BLS), U.S.
Department of Labor, May 2020 National Industry
Specific Occupation Employment and Wage
Estimates, First-Line Supervisors of Transportation
and Material Moving Workers (SOC 53–1040) in
Freight Transportation Arrangement (NAICS
488510) and Administrative Management and
General Management Consulting Services (NAICS
541611), and to Transportation, Storage, and
Distribution Managers (SOC 11–3071) in (NAICS
488510) and (NAICS 541611). (Accessed May 19,
2021 at https://www.bls.gov/oes/2020/may/naics4_
541600.htm and https://www.bls.gov/oes/2020/
may/naics4_488500.htm).
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30 The average compensation factor is 1.4968.
1.4968 = (($31.76 + $30.89 + $30.99 + $30.40) ÷ 4)
÷ (($21.35 + $20.62 + $20.61 + $20.29) ÷ 4). The
compensation factor is calculated based on the
average of the quarterly total compensation divided
by the average of the quarterly total wages. Source:
BLS, News Releases, 2020 Employer Costs for
Employee Compensation, Table 4: Employer Costs
for Employee Compensation for private industry
workers by occupational and industry group
(Transportation and Material Moving Occupational
Group), as published in June 2020, September 2020,
December 2020, and March 2021. (Accessed May
19, 2021 at https://www.bls.gov/bls/news-release/
ecec.htm.)
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TSA multiplies 4 hours per
resubmission by the $57.90 for an IAC
manager to calculate a unit cost savings
of $232 per recertification.31
TSA estimates a duration of 2.25
hours for TSA staff to review a
resubmission. The TSA review staff is
composed of two ‘‘I’’ pay band
members 32 and four ‘‘J’’ pay band
members. Each submission could be
reviewed by any one of these staff
members. TSA calculates a staff
compensation rate based on the
weighted average of two different TSA
pay-bands that conduct reviews. To
calculate the TSA weighted
compensation rate, TSA multiplies the
respective pay band compensation 33 by
the respective number of employees,
sums the product of these calculations,
and then divides by the total number of
employees. Table 6 displays this
weighted average calculation.
TABLE 6—CALCULATION OF WEIGHTED AVERAGE TSA COMPENSATION RATE
TSA pay band
Compensation
rate *
Number of
employees
a
b
TSA I Band ............................................................................................................................................................
TSA J Band ...........................................................................................................................................................
$70.62
83.17
Weighted Average TSA Compensation Rate = è(ai × bi ) ÷ èb ...........................................................................
2
4
$78.99
* Compensation Rate includes employer benefits.
TSA multiplies 2.25 hours by the TSA
compensation rate of $78.99 per hour to
obtain a unit cost savings per
recertification of $178.34
To calculate savings, TSA multiplies
the number of eliminated resubmissions
from column j of Table 3, by the
respective unit cost savings for industry
($232) and TSA ($178). Table 7 displays
the industry, TSA, and total savings
from modifying the security program
resubmission frequency from 1 to 3
years. TSA estimates that over 10 years
cost savings aggregate to $7.8 million
undiscounted, $6.6 million discounted
at 3 percent, and $5.4 million
discounted at 7 percent. The final rule
would realize an annualized $0.8
million cost savings discounted at 7
percent over 10 years.
TABLE 7—TOTAL COST SAVINGS FROM THE FINAL RULE
[$Thousands]
Eliminated resubmissions
Year
a
Industry savings
TSA savings
b = a × $231.61
÷ 1,000
c = a × $177.73
÷ 1,000
(Cost savings)
d = èb,c
Undiscounted
Discounted
at 3%
Discounted
at 7%
1 ..............................................................................................
2 ..............................................................................................
3 ..............................................................................................
4 ..............................................................................................
5 ..............................................................................................
6 ..............................................................................................
7 ..............................................................................................
8 ..............................................................................................
9 ..............................................................................................
10 ............................................................................................
..........................
3,179
3,128
340
2,898
2,852
598
2,656
2,613
791
$0
736
725
79
671
660
139
615
605
183
$0
565
556
60
515
507
106
472
464
141
$0
1,301
1,280
139
1,186
1,167
245
1,087
1,070
324
$0
1,227
1,172
124
1,023
978
199
858
820
241
$0
1,137
1,045
106
846
778
153
633
582
165
Total .................................................................................
19,056
4,413
3,387
7,800
6,641
5,443
Annualized ................................................................
..........................
............................
............................
........................
$775
$779
Note: Calculation may not be exact in table due to rounding.
B. Small Entities
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As required by the Regulatory
Flexibility Act,35 TSA considered
whether this final rule would have a
significant economic impact on a
substantial number of small entities,
including small businesses and not-forprofit organizations that are
independently owned and operated and
31 $231.61 Renewal Unit Cost to Industry = 4Hour Renewal Time Burden × $57.90 Compensation
Rate for IAC Managers.
32 TSA uses an SV pay grading system, which is
a discrete salary system with pay ranges,
incorporated into pay bands.
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are not dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000. This
rule does not place any new
requirements on the regulated industry
or small businesses. In addition, TSA
received no comments related to the
regulatory impact analysis in the NPRM,
therefore has made no changes to this
analysis in the final rule. TSA has
certified that this rule does not have a
significant economic impact on a
substantial number of small entities.
33 TSA, DHS Modular Cost Standards,
Washington DC Metropolitan Area Locality Pay, IBand $70.62 = $147,382 annual compensation ÷
2,087 hours and J-Band $83.17 = $173,585 annual
compensation ÷ 2,087 hours (Office Personnel
Management changed the 2,080 work hours for
federal employees to 2,087 by amending 5 U.S.C.
5504(b). Source: Consolidated Omnibus Budget
Reconciliation Act of 1985, Public Law 99–272 (100
Stat. 82; April 7, 1986).
34 $177.73 Renewal Unit Cost to TSA = $78.99 I/
J Band TSA Weighted Compensation Rate × 2.25
Hour Burden for Renewal Review.
35 See Public Law 96–354 (94 Stat. 1164; Sept. 19,
1980) as codified at 5 U.S.C. 601 et seq.
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Fmt 4700
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C. Collection of Information
The Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3501. et seq.) requires
that TSA consider the impact of
paperwork and other information
collection burdens imposed on the
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public and, under the provisions of 44
U.S.C. 3507(d), obtain approval from the
OMB for each collection of information
it conducts, sponsors, or requires
through regulations. As provided by the
PRA, as amended, an agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless it displays a
currently valid OMB control number.
The collection of information covered
by this final rule is covered by OMB
control number 1652–0040.
This final rule impacts the collection
of information by reducing the
frequency that information must be
submitted. This reduction would
decrease the current number of security
program recertifications submitted from
an estimated annual average of 3,700 to
1,239 responses (a reduction of 2,461).
The corresponding burden is also
reduced from an annual average of
14,800 hours to 4,956 hours (a reduction
of 9,844 hours). Table 8 displays the
annual number of responses and burden
hour estimates associated with the final
rule.
TABLE 8—PRA INFORMATION COLLECTION RESPONSES AND BURDEN HOURS
Responses
Year 2
Year 3
Total
responses
Average
annual
responses
Time
burden per
response
(hours)
Total hours
Year 1
Average
annual
hours
3,395
162
159
3,716
1,239
....................
4,956
1,652
Collection activity
Final Rule Recerts ..........................................................
As required by the PRA (44 U.S.C.
3507(d)), TSA has submitted a copy of
the final rule to the OMB for its review
of the collection of information.
D. International Trade Impact
Assessment
The Trade Agreements Act of 1979 36
prohibits Federal agencies from
establishing any standards or engaging
in related activities that create
unnecessary obstacles to the foreign
commerce of the United States.
Pursuant to these requirements, the
establishment of standards is not
considered an unnecessary obstacle to
the foreign commerce of the United
States, so long as the standard has a
legitimate domestic objective, such as
the protection of safety, and does not
operate in a manner that excludes
imports that meet this objective. The
statute also requires consideration of
international standards and, where
appropriate, that they be the basis for
U.S. standards. TSA has assessed the
potential effect of the final rule and has
determined that it does not impose any
new requirements. Therefore, the rule
would not have an adverse impact on
international trade.
E. Unfunded Mandates Assessment
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Title II of the Unfunded Mandates
Reform Act of 1995 37 establishes
requirements for Federal agencies to
assess the effects of their regulatory
actions on State, local, and tribal
governments and the private sector.
Under sec. 202 of the Unfunded
Mandates Reform Act, TSA generally
36 See Public Law 96–39 (93 Stat. 144; July 26,
1979) as amended by the Uruguay Round
Agreements Act, Public Law 103–465 (108 Stat
4809; Dec. 8, 1994), codified at 19 U.S.C. 2531–
2533.
37 See Public Law 104–4 (109 Stat. 48; Mar. 22,
1995), codified at 2 U.S.C. 1501–1538.
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must prepare a written statement,
including a cost-benefit analysis, for
proposed and final rules with ‘‘Federal
mandates’’ that may result in
expenditures by State, local, and tribal
governments in the aggregate or by the
private sector of $100 million (adjusted
for inflation) or more in any one year.
The final rule does not contain such a
mandate. Therefore, the written
statement requirements of the Act do
not apply.
F. Environment
TSA has reviewed this rulemaking for
purposes of the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C.
4321–4347) and has determined that
this action will not have a significant
effect on the human environment. This
action is covered by categorical
exclusion number A3(b) in DHS
Management Directive 023–01 (formerly
Management Directive 5100.1),
Environmental Planning Program,
which guides TSA compliance with
NEPA.G. International Compatibility
and Cooperation.
E.O. 13609 of May 1, 2012 (Promoting
International Regulatory Cooperation),38
promotes international regulatory
cooperation to meet shared challenges
involving health, safety, labor, security,
environmental, and other issues and to
reduce, eliminate, or prevent
unnecessary differences in regulatory
requirements. TSA analyzed this action
under the policies and agency
responsibilities of E.O. 13609, and has
determined that this action would have
no effect on international regulatory
cooperation. In keeping with U.S.
obligations under the Convention on
International Civil Aviation (also known
as the ‘‘Chicago Convention’’), it is TSA
policy to comply with International
38 Published
PO 00000
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at 77 FR 26413 (May 4, 2012).
Fmt 4700
Sfmt 4700
Civil Aviation Organization Standards
and Recommended Practices to the
maximum extent practicable. TSA has
determined that this regulation has no
direct relationship to the Chicago
Convention.
H. Executive Order 13132, Federalism
TSA has analyzed this rule under the
principles and criteria of E.O. 13132 of
August 4, 1999 (Federalism).39 TSA has
determined that this action will not
have a substantial direct effect on the
States, or the relationship between the
Federal Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government, and, therefore,
does not have federalism implications.
I. Energy Impact Analysis
The energy impact of this rulemaking
has been assessed in accordance with
the Energy Policy and Conservation Act
(EPCA), Public Law 94–163, as amended
(42 U.S.C. 6362). TSA has determined
that this rulemaking would not be a
major regulatory action under the
provisions of the EPCA.
List of Subjects in 49 CFR Part 1548
Air transportation, Reporting and
recordkeeping requirements, Security
measures.
The Amendment
For the reasons set forth in the
preamble, the Transportation Security
Administration amends chapter XII of
title 49, Code of Federal Regulations, as
follows:
39 Published
E:\FR\FM\08FER1.SGM
at 64 FR 43255 (Aug. 10, 1999).
08FER1
Federal Register / Vol. 89, No. 27 / Thursday, February 8, 2024 / Rules and Regulations
Subchapter C—Civil Aviation Security
DEPARTMENT OF COMMERCE
PART 1548—INDIRECT AIR CARRIER
SECURITY
National Oceanic and Atmospheric
Administration
1. The authority citation for part 1548
continues to read as follows:
50 CFR Part 648
■
Authority: 49 U.S.C. 114, 5103, 40113,
44901–44905, 44913–44914, 44916–44917,
44932, 44935–44936, 46105.
§ 1548.7
[Amended]
2. Amend § 1548.7 by:
a. In paragraph (a)(4), removing the
words ‘‘one year after the month it was
approved’’ and adding in their place ‘‘3
years after the month it was approved,
or until the program has been
surrendered or withdrawn, whichever is
earlier’’.
■ b. In paragraph (a)(5) introductory
text, adding the words ‘‘or renewal’’
after the words ‘‘submitted during its
initial’’.
■ c. In paragraph (b)(1), removing the
words ‘‘at least 30 calendar days prior
to the first day of the anniversary month
of initial approval’’ and adding in their
place ‘‘at least 30 calendar days before
the 36th month after the initial
approval’’.
■ d. In paragraph (b)(4), removing the
words ‘‘one year after the month it was
renewed’’ and adding in their place ‘‘3
years after the month it was renewed, or
until the program has been surrendered
or withdrawn, whichever is earlier’’.
■
■
Dated: February 1, 2024.
David P. Pekoske,
Administrator.
[FR Doc. 2024–02495 Filed 2–7–24; 8:45 am]
BILLING CODE 9110–05–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
[240202–0033]
RIN 0648–XD495
Fisheries of the Northeastern United
States; Atlantic Deep-Sea Red Crab
Fishery; 2024 Atlantic Deep-Sea Red
Crab Specifications
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Final rule.
AGENCY:
NMFS is approving
specifications for the 2024–2027
Atlantic deep-sea red crab fishery,
including the annual catch limits and
total allowable landings limits. This
action implements the allowable 2024
harvest levels, consistent with the
Atlantic Deep-Sea Red Crab Fishery
Management Plan. This action is
necessary to establish allowable red crab
harvest levels that will prevent
overfishing.
SUMMARY:
The final specifications for the
2024 Atlantic deep-sea red crab fishery
are effective March 11, 2024, through
February 28, 2025.
ADDRESSES: Copies of the supplemental
information report, including the
Regulatory Flexibility Act Analysis and
other supporting documents for the
specifications, are available from Dr.
Cate O’Keefe, Executive Director, New
England Fishery Management Council,
50 Water Street, Mill 2, Newburyport,
MA 01950 or at https://www.nefmc.org/
library/2024-2027-red-crabspecifications.
DATES:
FOR FURTHER INFORMATION CONTACT:
50 CFR Part 217
Allison Murphy, Fishery Policy Analyst,
(978) 281–9122.
SUPPLEMENTARY INFORMATION:
Regulations Governing the Take of
Marine Mammals Incidental to
Specified Activities
Background
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CFR Correction
This rule is being published by the
Office of the Federal Register to correct
an editorial or technical error that
appeared in the most recent annual
revision of the Code of Federal
Regulations.
■ In Title 50 of the Code of Federal
Regulations, Parts 200 to 227, revised as
of October 1, 2023, remove Subpart I to
Part 217.
[FR Doc. 2024–02695 Filed 2–7–24; 8:45 am]
BILLING CODE 0099–10–P
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The Atlantic deep-sea red crab fishery
is managed by the New England Fishery
Management Council (Council). The
Atlantic Deep-Sea Red Crab Fishery
Management Plan (FMP) includes a
specification process that requires the
Council to recommend, on a triennial
basis, an acceptable biological catch
(ABC), an annual catch limit (ACL), and
total allowable landings (TAL) every 4
years. The Council’s Scientific and
Statistical Committee (SSC) provides a
recommendation to the Council for the
ABC. The Council makes a
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Fmt 4700
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8557
recommendation to NMFS on the ABC,
which cannot exceed the ABC
recommendation made by the SSC.
Final Specifications
The biological and management
reference points currently in the FMP
are used to determine whether
overfishing is occurring or if the stock
is overfished. There is insufficient
information on the species to establish
the maximum sustainable yield,
optimum yield, or overfishing limit. The
ABC is defined in terms of landings
instead of total catch because there is
insufficient information to estimate
dead discards of red crab. We are
approving the Council-recommended
specifications for the 2024–2027 fishing
years that establish a 2,000-metric ton
ABC, ACL, and TAL. This action
implements these specifications for the
2024 fishing year.
At the end of each fishing year, we
evaluate catch information and
determine if the quota has been
exceeded. If a quota is exceeded, the
regulations at 50 CFR 648.262(b) require
a pound-for-pound reduction of the
quota in a subsequent fishing year.
NMFS will publish a notice in the
Federal Register of any revisions to the
projected specifications if an overage
occurs. Based on the performance of the
2023 red crab fishery, no adjustment is
necessary for fishing year 2024. NMFS
will provide notice of the final 2025–
2027 quotas, and any necessary
reductions, prior to the start of each
respective fishing year.
Comments and Responses
The public comment period for the
proposed rule (88 FR 83893, December
1, 2023) ended on January 2, 2024. No
comments were received on the
proposed rule.
Changes From the Proposed Rule
There are no changes from the
proposed rule.
Classification
Pursuant to section 304(b)(1)(A) of the
Magnuson-Stevens Act, the NMFS
Assistant Administrator has determined
that this final rule is consistent with the
Atlantic Deep-Sea Red Crab FMP, other
provisions of the Magnuson-Stevens
Act, and other applicable law.
This final rule is exempt from review
under Executive Order 12866.
The Chief Counsel for Regulation,
Department of Commerce, certified to
the Chief Counsel for Advocacy of the
Small Business Administration (SBA)
during the proposed rule stage that this
action would not have a significant
economic impact on a substantial
E:\FR\FM\08FER1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 27 (Thursday, February 8, 2024)]
[Rules and Regulations]
[Pages 8550-8557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02495]
[[Page 8550]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Transportation Security Administration
49 CFR Part 1548
[Docket No. TSA-2020-0002]
RIN 1652-AA72
Frequency of Renewal Cycle for Indirect Air Carrier Security
Programs
AGENCY: Transportation Security Administration, Department of Homeland
Security (DHS).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Transportation Security Administration (TSA) is modifying
its regulations to reduce the frequency of renewal applications by
indirect air carriers (IACs). Rather than requiring these entities to
submit an application to renew their security program each year, TSA
now requires renewal once every 3 years. This modification reduces the
burden of compliance without a negative impact on security.
DATES: This rule is effective March 11, 2024.
FOR FURTHER INFORMATION CONTACT: Angel Rodriguez, telephone 1-571-227-
2108; email [email protected]; 6595 Springfield Center
Drive, Springfield, VA 20598-6003.
SUPPLEMENTARY INFORMATION:
Availability of Rulemaking Document
You can find an electronic copy of this rule using the internet by
accessing the Government Publishing Office's web page at https://www.govinfo.gov/app/collection/FR/ to view the daily published Federal
Register edition or accessing the Office of the Federal Register's web
page at https://www.federalregister.gov. Copies are also available by
contacting the individual identified for ``General Questions'' in the
FOR FURTHER INFORMATION CONTACT section. Make sure to identify the
docket number of this rulemaking.
Small Entity Inquiries
The Small Business Regulatory Enforcement Fairness Act (SBREFA) of
1996 requires TSA to comply with small entity requests for information
and advice about compliance with statutes and regulations within TSA's
jurisdiction. Any small entity that has a question regarding this
document may contact the person listed in the FOR FURTHER INFORMATION
CONTACT section. Persons can obtain further information regarding
SBREFA on the Small Business Administration's web page at https://www.sba.gov/category/advocacy-navigation-structure/regulatory-policy/regulatory-flexibility-act/sbrefa.
Abbreviations and Terms Used in This Document
CCSF--Certified Cargo Screening Facility
CEQ--Council on Environmental Quality
DHS--Department of Homeland Security
DOT--Department of Transportation
E.O.--Executive Order
FOIA--Freedom of Information Act
IAC--Indirect Air Carrier
IACSSP--Indirect Air Carrier Standard Security Program
NEPA--National Environmental Policy Act
OMB--Office of Management and Budget
PRA--Paperwork Reduction Act of 1995
SBREFA--Small Business Regulatory Enforcement Fairness Act of 1996
SSI--Sensitive Security Information
TSA--Transportation Security Administration
I. Executive Summary
A. Purpose of the Regulation
The Indirect Air Carrier (IAC), sometimes called a freight
forwarder, acts as an intermediary between a shipper of air cargo and
an air carrier by receiving and consolidating cargo from one or more
shippers for transport on one or more aircraft flights. IACs are a
critical component of the secure air cargo supply chain in the United
States, helping to ensure the safe, timely, and efficient movement of
goods every day. Approximately 3,800 IACs are operating in the United
States and registered with TSA, ranging from sole proprietors working
out of their homes to large corporations. Currently, TSA's regulations
require IACs to renew their registration each year.
TSA is modifying 49 CFR 1548.7 to reduce the frequency at which
IACs must renew their registration from annual to once every 3 years.
This modification reduces the burden of compliance by reducing the time
and effort an IAC must devote to renewing their registration,
permitting them to focus on other operational and business priorities.
TSA has determined that the change will not have a negative impact on
aviation security.
B. Summary of Major Provisions
This final rule makes limited changes to 49 CFR 1548.7, which are
necessary to change the regulatory requirement for the IAC security
program-renewal from 1 year to 3 years. Table 1 identifies each change.
C. Costs and Benefits
TSA has determined this modification reduces the cost of compliance
without any negative impacts on security. As described in the notice of
proposed rulemaking (NPRM) (87 FR 79264, December 27, 2022) and as
noted below, TSA estimates that, over 10 years, cost savings aggregate
to $7.8 million undiscounted, $6.6 million discounted at 3 percent, and
$5.4 million discounted at 7 percent. This final rule would realize an
annualized $0.8 million cost savings discounted at 7 percent over 10
years.
II. General Discussion of the Rulemaking
A. Background
To ensure the security of the air cargo system, TSA imposes
security requirements on IACs in 49 CFR part 1548. Through these
regulations, TSA ensures ``IACs are held accountable for securing the
goods entrusted to them throughout those legs of the supply chain for
which they are responsible.'' \1\
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\1\ See Proposed Rule, Air Cargo Security Requirements, 69 FR
65257, 65269 (Nov. 10, 2004).
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Under 49 CFR 1548.5, each IAC must adopt and carry out the IAC
Standard Security Program (IACSSP). Persons interested in becoming IACs
are vetted by TSA and are required to implement security requirements
in the IACSSP. These requirements are intended to ensure security
during the period between when a package leaves a shipper and when it
is presented to the aircraft operators. IACs must also ensure their
employees understand and are trained to implement their security
responsibilities.
Current 49 CFR 1548.7(b) presents the processes an IAC must follow
annually to seek renewed approval from TSA to operate under the IACSSP.
In general, annual renewal is a continuation of current practices and
security measures in the IACSSP, including any TSA-approved amendments
issued under 49 CFR 1548.7(c), (d), and/or (e). IACs must submit the
renewal request to TSA at least 30 calendar days before expiration of
the IACSSP, as well as other standards for the submission.
Since 2006, TSA has required IACs to renew their registration each
year. Since the annual renewal requirement was imposed in 2006, TSA has
determined that it is unnecessary to continue requiring annual renewal
and that the program could be renewed once every 3 years without having
a negative impact on security. As discussed below, this determination
is based on two key factors: (1) TSA's inspection processes and
priorities for IACs negate the need for annual renewals, and (2) the
triennial renewal requirement for other TSA air cargo programs that
have proven to be effective and secure.
[[Page 8551]]
TSA published an NPRM on December 27, 2022,\2\ proposing to change
the renewal period, and requested comments from the public to be
submitted by February 27, 2023. TSA received two comments, both from
interested industry associations.
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\2\ 87 FR 79264 (Dec. 27, 2022).
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B. Summary of Comments
TSA received two comments, both from interested industry
associations. One trade association representing indirect air carriers
and aircraft operators expressed general support for the rule, and
expressed the belief that the rule would not negatively impact
security.\3\ Another trade association representing airline pilots
recommended that TSA not move forward with the rulemaking.\4\ The
association for the airline pilots stated: (1) TSA should not reduce
oversight in pursuit of economic relief, which could reduce
opportunities to discover evolving security threats; (2) TSA's
estimated burden of 4 hours to complete annual certification is not a
meaningful burden on industry; (3) the high turnover rate among IAC
staff requires TSA audits and training verification on an annual basis
at a minimum; and (4) if TSA's process for revalidating IACs is tied to
their security program renewals, the shift to a 3-year renewal cycle
would create an unnecessary security risk and TSA should assess IACs
for security risks on an annual basis, or more frequently.
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\3\ https://www.regulations.gov/docket/TSA-2020-0002/comments,
TSA-2020-0002-0002.
\4\ https://www.regulations.gov/docket/TSA-2020-0002/comments,
TSA-2020-0002-0003.
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TSA Response: Following review of the issues raised by the airlines
pilots' association, TSA has determined that the commenter provided no
new information to counter TSA's previous determination on the benefits
and need for this rulemaking. First, TSA is not sacrificing security in
order to obtain economic benefits. These limited changes to the IAC
regulation are consistent with 49 U.S.C. 114(l)(3), which requires TSA
to consider the costs of any proposed regulation relative to its
security benefit. In addition, Executive Order (E.O.) 13563 of January
18, 2011 (Improving Regulation and Regulatory Review), requires
agencies to periodically review existing regulations to identify
requirements that ``may be outmoded, ineffective, insufficient, or
excessively burdensome, and to modify, streamline, expand, or repeal
them in accordance with what has been learned.'' \5\ Before proposing
this change, TSA conducted a risk analysis and determined that the
revision would not have a negative impact on security due to other
compensating procedures. This final rule provides an overall reduction
in the burden of compliance without negatively affecting security.\6\
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\5\ See sec. 6 of E.O. 13563.
\6\ 87 FR 79265.
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Second, the costs of compliance with the annual renewal requirement
may be relatively small for each IAC, but TSA estimates that over 10
years the cost savings aggregate to $7.8 million undiscounted, $6.6
million discounted at 3 percent, and $5.4 million discounted at 7
percent. The rule would realize annualized savings of $0.8 million in
2020 dollars.\7\ These cost savings accrue for both the industry and
TSA. Reducing the administrative burden on TSA staff of reviewing
annual renewal applications allows TSA to focus additional resources
and staff effort on the highest air cargo security priorities.
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\7\ 87 FR 79266.
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Third, as noted in the NPRM, the transition from an annual security
program certification to a 3-year security program certification
renewal period does not mean that IACs will only be assessed or audited
for compliance once every 3 years. As discussed in the NPRM and below,
TSA has determined that a 3-year renewal cycle is effective, efficient,
and secure when coupled with an appropriately staffed and resourced
inspection and enforcement program.\8\ TSA acknowledges the airline
pilots association concern regarding turnover in the IAC industry, but
an extension of the recertification period does not mean a reduction in
regulatory inspections. This determination is supported by TSA's
experience with other air cargo security regulations, specifically the
Certified Cargo Screening Program (CCSP), and TSA believes it will be
similarly effective with IACs.\9\
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\8\ See id. for more discussion on this issue.
\9\ Id.
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Fourth, under this final rule, within any 3-year period, every IAC
will be subject to at least one triennial comprehensive inspection, two
targeted annual inspections in years when a comprehensive inspection is
not conducted, and possible supplemental inspections whenever TSA's
assessment of risk or evolving compliance posture indicate that
additional inspections are warranted. TSA's process for inspecting and
revalidating IACs is not tied to the annual renewal of IAC security
programs because the inspection and revalidation schedules of TSA
inspectors are managed separately from TSA's program renewal efforts.
TSA implements a national inspection plan based on regular cycles, and
conducts focused Special Emphasis Assessments and Special Emphasis
Inspections whenever necessary. Further, TSA's local inspection plans
augment the national plan with risk-based local inspection and
revalidation schedules that consider regional threats, a specific IAC's
past performance, and other factors.
TSA's local field offices determine whether to conduct additional
inspections of an individual IAC by assessing the results of prior
compliance reviews in light of evolving and emerging threat
information. TSA's local field offices may conduct more frequent
inspections of IACs that have lower compliance rates, or otherwise
present an elevated security risk. All IACs are subject to supplemental
inspections if the local field office determines one is necessary.
When TSA imposed the annual renewal requirement in 2006, TSA
expected that the annual cycle of renewals would be the primary method
to ensure the agency regularly reviewed each IAC and confirmed
compliance with TSA security requirements. As described above, TSA now
ensures compliance with the program through the nationwide schedule of
regular annual inspections, Special Emphasis Assessments and
Inspections, and additional inspections at the discretion of the local
field office.
An additional safeguard is provided by 49 CFR 1540.301, which
allows TSA to withdraw approval of an IAC security program if TSA
determines continued operation is contrary to security and the public
interest. If TSA withdraws approval, an IAC must discontinue operation
immediately, regardless of the renewal date of its program
certification.
As TSA noted in the NPRM,\10\ the triennial renewal requirement for
other TSA air cargo programs have proven to be effective and secure. In
addition to recognizing the effectiveness of its regular inspections to
ensure compliance with the IAC program, TSA considered the requirements
for the IAC program compared to other aviation security requirements,
specifically requirements for the CCSP under 49 CFR part 1549. When TSA
finalized the rule establishing the CCSP in 2011, TSA provided a 3-year
renewal period for Certified Cargo Screening Facilities (CCSFs).
Experience gained by more than a decade of implementing the CCSP
validates that the triennial recertification cycle does not have a
negative impact on security. The final rule does not change the actions
that
[[Page 8552]]
IACs must perform to recertify or the requirements they must meet to
maintain approval to operate as an IAC; the final rule simply reduces
the frequency with which they must recertify.
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\10\ 87 FR 79266.
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C. Section-by-Section Analysis
After consideration of each comment and any relevant potential
changes to the proposed rule, TSA is adopting the revisions as proposed
in the NPRM. TSA has addressed all issues and concerns derived from
these comments in the discussion below.
Table 1 identifies each change made to 49 CFR 1548.7 as a result of
this rulemaking.
Table 1--Changes to 49 CFR 1548.7
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Section Prior text Revised text
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1548.7(a)(4)....................... Removing the words ``one year after Adding in their place ``3 years
the month it was approved''. after the month it was approved, or
until the program has been
surrendered or withdrawn, whichever
is earlier''.
1548.7(a)(5)....................... ..................................... In the introductory text, adding the
words ``or renewal'' after the
words ``submitted during its
initial''.
1548.7(b)(1)....................... Removing the words ``at least 30 Adding in their place ``at least 30
calendar days prior to the first day calendar days before the 36th month
of the anniversary month of initial after the initial approval''.
approval''.
1548.7(b)(4)....................... Removing the words ``one year after Adding in their place ``3 years
the month it was renewed''. after the month it was renewed, or
until the program has been
surrendered or withdrawn, whichever
is earlier''.
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III. Regulatory Analyses
TSA conducted a regulatory impact analysis (RIA) for the NPRM,
posted in the docket for this rulemaking. As there were no comments
related to the regulatory impact analysis in the NPRM, TSA has made no
changes to the analysis in this final rule. TSA considered numerous
statutes and executive orders related to rulemaking when developing
this rule. The following summarizes TSA's analyses of the impact of the
rulemaking as directed by these statutes or Executive orders.
A. Regulatory Planning and Review
1. Background
Under the requirements of E.O. 12866 of September 30, 1993
(Regulatory Planning and Review),\11\ as amended by E.O. 14094 of April
6, 2023 (Modernizing Regulatory Review),\12\ and E.O. 13563 of January
18, 2011 (Improving Regulation and Regulatory Review),\13\ agencies
must assess the costs and benefits of available regulatory alternatives
and, if regulation is necessary, select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
These requirements were supplemented by E.O. 13563, which emphasizes
the importance of quantifying both costs and benefits, of reducing
costs, of harmonizing rules, and of promoting flexibility.
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\11\ Published at 58 FR 51735 (Oct. 4, 1993).
\12\ Published at 88 FR 21879 (Apr. 6, 2023).
\13\ Published at 76 FR 3821 (Jan. 21, 2011).
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The Office of Management and Budget (OMB) has determined this rule
is not a significant regulatory action under section 3(f) of E.O.
12866, as amended. Accordingly, OMB has not reviewed this rule.
In conducting these analyses, TSA has certified that this
rulemaking does not have a significant economic impact on a substantial
number of small entities.
The basis for this conclusion is set forth below.
This final rule reduces regulatory costs by reducing the frequency
that IACs must renew their security program certifications. This final
rule reduces the frequency of annual IAC security program
certifications to once every 3 years. This rule does not impose any
incremental costs because regulated entities are already performing all
actions required to obtain the certification in question. The expected
outcome will be a minimal impact with positive net benefits.
2. Estimated Cost Savings to Affected Entities
The cost savings from this rule arise from extending the duration
of IAC security programs approved by TSA from 1 year to 3 years. This
change aligns the duration of the IAC security program with the
CCSP.\14\ Table 2 summarizes the change and impact from this action.
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\14\ See 49 CFR 1549.7(a)(6). See also supra notes 8 and 10, and
accompanying text.
Table 2--Comparison of Current 49 CFR Part 1548 and the Final Rule
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Current Final rule Impact Estimated cost savings
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Requires annual renewal of security Revises to renewal (1) Aligns part 1548 renewal period TSA estimates the annualized cost saving to
program. every 3 years. with that of the TSA-approved industry and Federal government to be $0.8
Certified Cargo Screening Program, million annualized at a 7 percent discount
part 1549. rate. Cost savings arise from time saved due to
(2) Provides cost savings to industry a less frequent security program renewal cycle.
and TSA.
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To estimate cost savings, TSA calculates the number of instances an
IAC would resubmit a security program under the current annual
requirement, and the number of instances that would be avoided under
the final rule's 3-year requirement. TSA uses the difference in the
number of resubmission instances between the current requirement and
the final rule as the basis for the cost savings.
TSA uses historical data on the number of existing IACs to forecast
the number of security programs submitted for certification over the
10-year period of analysis. TSA assumes that the regulatory change for
less frequent
[[Page 8553]]
recertification does not impact the annual number of forecasted active
IAC certifications. Based on historical program data, TSA assumes the
aggregate population of active and approved IACs under the baseline and
the final rule decreases each year with more dropping out than
entering. TSA calculates that the aggregate active population decreases
at an annual rate of 1.61 percent \15\ and compounds this rate to
estimate the aggregate active IAC population for the next 10 years, as
displayed in column a of Table 3. The aggregate active population of
IACs (column a) also represents the number of security program
submissions and resubmissions under the baseline annual renewal
requirement.
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\15\ Based on TSA data, there were 4,576 IACs in 2008 and 3,768
in 2020. TSA calculates a negative compound annual growth rate of
1.61% = (3,768 / 4,576)(1 / (2020-2008))-1.
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TSA postulates that the number of newly approved IAC applications
represents a proportion of the number of aggregate active IACs in the
same year. This proportion has stabilized over the last 5 years at 5.41
percent. TSA applied this percentage to the forecasted aggregate number
of active IACs during a year to estimate the number of newly approved
IAC applications during the same year \16\ as displayed in column c of
Table 3.
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\16\ The number of aggregate active IACs is estimated using the
previous year aggregate value and the negative growth rate. For
instance, the year 0 (2022) aggregate number of active IACs of 3,648
is estimated applying the negative growth rate to the year-1 (2021)
aggregate number of 3,707: 3,648 = 3,707 x (1-1.61%). The number of
new IAC applications in year 0 is estimated at 197 by multiplying
the estimated number of aggregate IACs in year 0 (3,648) by the
average proportion of new IAC applications: 197 = 3,648 x 5.41%.
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The aggregate active population of IACs during a year is composed
of IAC renewals and newly approved IAC applications. Since TSA
calculates the number of newly approved IAC applications by assuming
they are a constant proportion of the number of aggregate active IACs,
then the number of renewals must be estimated applying the
complementary proportion to the number of aggregate active IACs, as
shown in column b of Table 3.\17\
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\17\ The number of IAC renewals is estimated applying the
percentage complementary to the proportion of new IAC applications
(1-5.41%) into the aggregate number of active IACs. For instance,
the year 0 (2022) number of renewals is estimated multiplying the
number of aggregate active IACs, or 3,648, by the complementary
percentage of 94.59% to obtain 3,451 (3,648 x 94.59%). The number of
IAC renewals can also be estimated subtracting the number of newly
approved IAC applications from the number of aggregate active IACs.
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The exit rate of IAC in a given year is based on the subtraction of
the given year's active IAC population from the preceding year's active
IAC population, and the removal of the given year's newly approved
IACs,\18\ as displayed in column d of Table 2. Since the number of IAC
exits is estimated based on the number of active IACs during the year
and the number of newly approved IAC applications, an exit rate is
derived from these two estimates for the purposes of compounding the
number of exits over time. TSA calculates an IAC exit rate of 6.92
percent \19\ (i.e., do not resubmit or are not approved) from year to
year. The exit rate in a specific year is the percentage of IACs that
do not request their security program renewed \20\ out of the total
number of IACs that had a security program in place before this year.
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\18\ For example, calculations of Year 0, Year 1 and Year 2 IAC
Exits are as follows:-257 (Year 0 Exits) = 3,648 (Year 0 Active
IACs)-3,707 (Year-1 Active IACs)-197 (Year 0 Newly Approved IACs);-
253 (Year 1 Exits) = 3,589 (Year 1 Active IACs)-3,648 (Year 0 Active
IACs)-194 (Year 1 Newly Approved IACs); and-249 (Year 2 Exits) =
3,532 (Year 2 Active IACs)-3,395 (Year 1 Active IACs)-191 (Year 2
Newly Approved IACs).
\19\ The exit rate is estimated by dividing the number of IAC
exits by the aggregate number of active IACs in the previous year.
For example, TSA estimates there would be 257 exits in year 0 (197
exits that were replaced by new entrants plus the 60 exits that
decreased the aggregate population). TSA calculates a 6.92% exit
rate in year 0 (257 exits / 3,707 aggregate active IACs in year-1).
This exit rate is the same throughout the 10-year period of
analysis. The exit rate for future years can also be derived
mathematically as follows: (Newly Approved IAC Proportion) x (1 +
Active IAC Growth Rate)-(Active IAC Growth Rate), which numerically
is equal to: 6.92% = 5.41% (1-1.61%)-(-1.61%).
\20\ Firms do not get renewals either because a submission was
not filed or was not approved.
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TSA estimates the total number of submissions in two blocks: the
first block includes submissions associated with the current IAC
population in each year, and the second block includes submissions from
new applicants. This final rule is expected to be implemented in year 1
and the relevant prior year active IAC population will have, by then, a
valid security plan; which will have to be renewed following the new 3-
year cycle.\21\ New applicants would also have to follow this 3-year
renewal cycle. In both blocks, there is a share of IAC firms that will
not renew their security plans during the next renewal event, and a
share of IAC firms that will renew. The number of IACs resubmitting in
a given year is estimated by multiplying the number of program
submissions from 3 years prior by a factor that results from
compounding the annual exit rate over 3 years; this retention factor,
estimated to be 80.6 percent,\22\ is multiplied by the number of
program submissions from 3 years before estimate the number of renewals
in the corresponding year.
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\21\ It is assumed that the validity of security plans will be
extended until year 1 once this action is executed. If an IAC firm
in the year 0 population wants to remain active over the 10 years of
analysis it will have to obtain four renewals during this period, in
years 1, 4, 7, and 10.
\22\ 80.6% = (100%-6.92% exit rate)(3-year cycle).
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Table 3 staggers recertifications under the final rule's 3-year
cycle \23\ in four separate columns for submissions one to four in the
10-year projection span. For example, TSA estimates that 2,738 of the
3,395 IAC recertifications in year 1 would resubmit their security
programs in year 4,\24\ and that 159 of the 197 new entrants in year 1
would resubmit for the first time in year 4 (see columns e and f
regarding first and second submissions). In Table 3, TSA takes into
account four recertification cycles \25\ within the 10-year framework
(columns e through h) and sums all the recertifications under the final
rule in column i. Finally, TSA calculates the number of eliminated
recertifications (column j) by subtracting the final rule
recertifications (column i) from the baseline annual recertifications
(column b).
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\23\ A cycle is the period in between renewals (or between the
first renewal and the initial approval). The 3-year cycle means that
submissions have to be renewed every 3 years. The current submission
cycle is annual, one submission every year.
\24\ Note IACs that were approved by TSA in year-1 (2 years
before the start date of this rule) and partially in year 0 (1 year
before the publication of this final rule) would need to resubmit 36
months from their last approval. IACs that were approved before the
publication of the final rule (-1 & 0) are included in year-1, for
the purpose of this analysis. For example: (Year 4 Second Cycle
Resubmissions) = (Year 1 Renewals) x 80.6%.
\25\ The frequency in which an IAC must resubmit their security
program for review.
[[Page 8554]]
Table 3--Number of Final Rule Eliminated Security Program Recertifications
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Baseline Recertification cycle \28\
Year Active IACs recerts New IACs IAC exits ---------------------------------------------------- Final rule Eliminated
\26\ \27\ 1st 2nd 3rd 4th recerts recerts
a(-1) = b1 = first c = an x dn = e1 = b1 en fn = e(n-3) gn = f(n-3) hn = i = e + f + j = b-i
initial pop year (5.41%) (an-a(n-1))-cn = c(n-3) x (0.806) x (0.806) g(n-3) g + h
a renewals x (0.806) x (0.806)
= a(n-1) x bn = an x
(1-1.61%) (1-5.41%)
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1....................................................... 3,589 3,395 194 -253 3,395 0 0 0 3,395 0
2....................................................... 3,532 3,341 191 -249 162 0 0 0 162 3,179
3....................................................... 3,475 3,287 188 -245 159 0 0 0 159 3,128
4....................................................... 3,419 3,234 185 -241 156 2,738 0 0 2,894 340
5....................................................... 3,364 3,182 182 -237 154 130 0 0 284 2,898
6....................................................... 3,310 3,131 179 -233 151 128 0 0 280 2,852
7....................................................... 3,257 3,081 176 -229 149 126 2,207 0 2,483 598
8....................................................... 3,205 3,032 173 -226 147 124 105 0 376 2,656
9....................................................... 3,153 2,983 170 -222 144 122 103 0 370 2,613
10...................................................... 3,103 2,935 168 -218 142 120 102 1,780 2,144 791
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Note: Calculations may not be exact due to rounding in the table.
TSA estimates a time burden of 4 hours for an IAC manager to review
and resubmit a security program. To calculate the hourly savings to
industry, TSA multiplies the 4-hour burden by the fully loaded hourly
wage rate for an IAC manager. TSA calculates the wage rate by
estimating a weighted wage rate for two occupations across two industry
subgroups.\29\ To calculate the weighted wage rate, TSA multiplies each
labor category wage rate by its respective number of employees, sums
the product of these calculations, and then divides the result by the
total number of employees across all four wage rates. Table 4
illustrates the weighted average wage calculation.
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\26\ The active IAC population in subsequent years was estimated
by applying the negative growth rate of 1.61% to the active IAC
population. The negative growth rate represents the net change in
the active IAC population accounting for IAC exits and entries. Year
1's value accounts for 3 years of negative growth derived from 3,768
IACs as of the end of fiscal year 2020 based on TSA records.
\27\ Baseline renewals represent Active IACs minus New IACs.
\28\ A retention factor of 0.806 is calculated as the exit rate
of 6.92 percent compounded over 3 years to account for the number of
IACs still operating who submitted a security program 3 years prior.
\29\ Bureau of Labor Statistics (BLS), U.S. Department of Labor,
May 2020 National Industry Specific Occupation Employment and Wage
Estimates, First-Line Supervisors of Transportation and Material
Moving Workers (SOC 53-1040) in Freight Transportation Arrangement
(NAICS 488510) and Administrative Management and General Management
Consulting Services (NAICS 541611), and to Transportation, Storage,
and Distribution Managers (SOC 11-3071) in (NAICS 488510) and (NAICS
541611). (Accessed May 19, 2021 at https://www.bls.gov/oes/2020/may/naics4_541600.htm and https://www.bls.gov/oes/2020/may/naics4_488500.htm).
Table 4--Calculation of Weighted Average Industry Wage Rate
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Wage rate Number of
---------------- employees
Industry NAICS Occupations ---------------
a b
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Freight Transportation Arrangement First-Line Supervisors of Transportation $28.72 3,460
(488510). and Material Moving Workers (53-1040).
Transportation, Storage, and 46.41 4,920
Distribution Managers (11-3071).
Management, Scientific, and Technical First-Line Supervisors of Transportation 27.52 3,190
Consulting Services (541611). and Material Moving Workers (53-1040).
Transportation, Storage, and 50.65 2,680
Distribution Managers (11-3071).
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Industry Weighted Average Wage Rate = [sum](ai x bi) / [sum]b $38.68
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Note: Calculations may not be exact due to rounding in the table.
Next, TSA adjusts this wage rate to account for employer
benefits,\30\ which results in an industry compensation rate of $57.90
per hour. Table 5 illustrates the calculation of the hourly industry
compensation rate based on these adjustments.
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\30\ The average compensation factor is 1.4968. 1.4968 =
(($31.76 + $30.89 + $30.99 + $30.40) / 4) / (($21.35 + $20.62 +
$20.61 + $20.29) / 4). The compensation factor is calculated based
on the average of the quarterly total compensation divided by the
average of the quarterly total wages. Source: BLS, News Releases,
2020 Employer Costs for Employee Compensation, Table 4: Employer
Costs for Employee Compensation for private industry workers by
occupational and industry group (Transportation and Material Moving
Occupational Group), as published in June 2020, September 2020,
December 2020, and March 2021. (Accessed May 19, 2021 at https://www.bls.gov/bls/news-release/ecec.htm.)
Table 5--Calculation of Industry Compensation Rate
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Compensation rate (c
Weighted wage rate (a) Benefits factor (b) = a x b)
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$38.68 1.4968 $57.90
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[[Page 8555]]
TSA multiplies 4 hours per resubmission by the $57.90 for an IAC
manager to calculate a unit cost savings of $232 per
recertification.\31\
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\31\ $231.61 Renewal Unit Cost to Industry = 4-Hour Renewal Time
Burden x $57.90 Compensation Rate for IAC Managers.
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TSA estimates a duration of 2.25 hours for TSA staff to review a
resubmission. The TSA review staff is composed of two ``I'' pay band
members \32\ and four ``J'' pay band members. Each submission could be
reviewed by any one of these staff members. TSA calculates a staff
compensation rate based on the weighted average of two different TSA
pay-bands that conduct reviews. To calculate the TSA weighted
compensation rate, TSA multiplies the respective pay band compensation
\33\ by the respective number of employees, sums the product of these
calculations, and then divides by the total number of employees. Table
6 displays this weighted average calculation.
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\32\ TSA uses an SV pay grading system, which is a discrete
salary system with pay ranges, incorporated into pay bands.
\33\ TSA, DHS Modular Cost Standards, Washington DC Metropolitan
Area Locality Pay, I-Band $70.62 = $147,382 annual compensation /
2,087 hours and J-Band $83.17 = $173,585 annual compensation / 2,087
hours (Office Personnel Management changed the 2,080 work hours for
federal employees to 2,087 by amending 5 U.S.C. 5504(b). Source:
Consolidated Omnibus Budget Reconciliation Act of 1985, Public Law
99-272 (100 Stat. 82; April 7, 1986).
Table 6--Calculation of Weighted Average TSA Compensation Rate
----------------------------------------------------------------------------------------------------------------
Compensation Number of
rate * employees
TSA pay band --------------------------------
a b
----------------------------------------------------------------------------------------------------------------
TSA I Band..................................................................... $70.62 2
TSA J Band..................................................................... 83.17 4
----------------------------------------------------------------------------------------------------------------
Weighted Average TSA Compensation Rate = [sum](ai x bi ) / [sum]b.............. $78.99
----------------------------------------------------------------------------------------------------------------
* Compensation Rate includes employer benefits.
TSA multiplies 2.25 hours by the TSA compensation rate of $78.99
per hour to obtain a unit cost savings per recertification of $178.\34\
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\34\ $177.73 Renewal Unit Cost to TSA = $78.99 I/J Band TSA
Weighted Compensation Rate x 2.25 Hour Burden for Renewal Review.
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To calculate savings, TSA multiplies the number of eliminated
resubmissions from column j of Table 3, by the respective unit cost
savings for industry ($232) and TSA ($178). Table 7 displays the
industry, TSA, and total savings from modifying the security program
resubmission frequency from 1 to 3 years. TSA estimates that over 10
years cost savings aggregate to $7.8 million undiscounted, $6.6 million
discounted at 3 percent, and $5.4 million discounted at 7 percent. The
final rule would realize an annualized $0.8 million cost savings
discounted at 7 percent over 10 years.
Table 7--Total Cost Savings From the Final Rule
[$Thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Eliminated Industry savings TSA savings (Cost savings) d = [sum]b,c
resubmissions -----------------------------------------------------------------------------
Year ----------------- b = a x $231.61 c = a x $177.73 Discounted Discounted
a / 1,000 / 1,000 Undiscounted at 3% at 7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................ ............... $0 $0 $0 $0 $0
2........................................................ 3,179 736 565 1,301 1,227 1,137
3........................................................ 3,128 725 556 1,280 1,172 1,045
4........................................................ 340 79 60 139 124 106
5........................................................ 2,898 671 515 1,186 1,023 846
6........................................................ 2,852 660 507 1,167 978 778
7........................................................ 598 139 106 245 199 153
8........................................................ 2,656 615 472 1,087 858 633
9........................................................ 2,613 605 464 1,070 820 582
10....................................................... 791 183 141 324 241 165
----------------------------------------------------------------------------------------------
Total................................................ 19,056 4,413 3,387 7,800 6,641 5,443
----------------------------------------------------------------------------------------------
Annualized....................................... ............... ................ ................ .............. $775 $779
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Calculation may not be exact in table due to rounding.
B. Small Entities
As required by the Regulatory Flexibility Act,\35\ TSA considered
whether this final rule would have a significant economic impact on a
substantial number of small entities, including small businesses and
not-for-profit organizations that are independently owned and operated
and are not dominant in their fields, and governmental jurisdictions
with populations of less than 50,000. This rule does not place any new
requirements on the regulated industry or small businesses. In
addition, TSA received no comments related to the regulatory impact
analysis in the NPRM, therefore has made no changes to this analysis in
the final rule. TSA has certified that this rule does not have a
significant economic impact on a substantial number of small entities.
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\35\ See Public Law 96-354 (94 Stat. 1164; Sept. 19, 1980) as
codified at 5 U.S.C. 601 et seq.
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C. Collection of Information
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501. et seq.)
requires that TSA consider the impact of paperwork and other
information collection burdens imposed on the
[[Page 8556]]
public and, under the provisions of 44 U.S.C. 3507(d), obtain approval
from the OMB for each collection of information it conducts, sponsors,
or requires through regulations. As provided by the PRA, as amended, an
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number. The collection of information covered by this
final rule is covered by OMB control number 1652-0040.
This final rule impacts the collection of information by reducing
the frequency that information must be submitted. This reduction would
decrease the current number of security program recertifications
submitted from an estimated annual average of 3,700 to 1,239 responses
(a reduction of 2,461). The corresponding burden is also reduced from
an annual average of 14,800 hours to 4,956 hours (a reduction of 9,844
hours). Table 8 displays the annual number of responses and burden hour
estimates associated with the final rule.
Table 8--PRA Information Collection Responses and Burden Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Responses
---------------------------------------------------------------------------
Time burden Average annual
Collection activity Total Average per Total hours hours
Year 1 Year 2 Year 3 responses annual response
responses (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Rule Recerts........................... 3,395 162 159 3,716 1,239 ............ 4,956 1,652
--------------------------------------------------------------------------------------------------------------------------------------------------------
As required by the PRA (44 U.S.C. 3507(d)), TSA has submitted a
copy of the final rule to the OMB for its review of the collection of
information.
D. International Trade Impact Assessment
The Trade Agreements Act of 1979 \36\ prohibits Federal agencies
from establishing any standards or engaging in related activities that
create unnecessary obstacles to the foreign commerce of the United
States. Pursuant to these requirements, the establishment of standards
is not considered an unnecessary obstacle to the foreign commerce of
the United States, so long as the standard has a legitimate domestic
objective, such as the protection of safety, and does not operate in a
manner that excludes imports that meet this objective. The statute also
requires consideration of international standards and, where
appropriate, that they be the basis for U.S. standards. TSA has
assessed the potential effect of the final rule and has determined that
it does not impose any new requirements. Therefore, the rule would not
have an adverse impact on international trade.
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\36\ See Public Law 96-39 (93 Stat. 144; July 26, 1979) as
amended by the Uruguay Round Agreements Act, Public Law 103-465 (108
Stat 4809; Dec. 8, 1994), codified at 19 U.S.C. 2531-2533.
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E. Unfunded Mandates Assessment
Title II of the Unfunded Mandates Reform Act of 1995 \37\
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. Under sec. 202 of the Unfunded Mandates Reform Act,
TSA generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures by State, local, and tribal
governments in the aggregate or by the private sector of $100 million
(adjusted for inflation) or more in any one year. The final rule does
not contain such a mandate. Therefore, the written statement
requirements of the Act do not apply.
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\37\ See Public Law 104-4 (109 Stat. 48; Mar. 22, 1995),
codified at 2 U.S.C. 1501-1538.
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F. Environment
TSA has reviewed this rulemaking for purposes of the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4347) and has
determined that this action will not have a significant effect on the
human environment. This action is covered by categorical exclusion
number A3(b) in DHS Management Directive 023-01 (formerly Management
Directive 5100.1), Environmental Planning Program, which guides TSA
compliance with NEPA.G. International Compatibility and Cooperation.
E.O. 13609 of May 1, 2012 (Promoting International Regulatory
Cooperation),\38\ promotes international regulatory cooperation to meet
shared challenges involving health, safety, labor, security,
environmental, and other issues and to reduce, eliminate, or prevent
unnecessary differences in regulatory requirements. TSA analyzed this
action under the policies and agency responsibilities of E.O. 13609,
and has determined that this action would have no effect on
international regulatory cooperation. In keeping with U.S. obligations
under the Convention on International Civil Aviation (also known as the
``Chicago Convention''), it is TSA policy to comply with International
Civil Aviation Organization Standards and Recommended Practices to the
maximum extent practicable. TSA has determined that this regulation has
no direct relationship to the Chicago Convention.
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\38\ Published at 77 FR 26413 (May 4, 2012).
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H. Executive Order 13132, Federalism
TSA has analyzed this rule under the principles and criteria of
E.O. 13132 of August 4, 1999 (Federalism).\39\ TSA has determined that
this action will not have a substantial direct effect on the States, or
the relationship between the Federal Government and the States, or on
the distribution of power and responsibilities among the various levels
of government, and, therefore, does not have federalism implications.
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\39\ Published at 64 FR 43255 (Aug. 10, 1999).
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I. Energy Impact Analysis
The energy impact of this rulemaking has been assessed in
accordance with the Energy Policy and Conservation Act (EPCA), Public
Law 94-163, as amended (42 U.S.C. 6362). TSA has determined that this
rulemaking would not be a major regulatory action under the provisions
of the EPCA.
List of Subjects in 49 CFR Part 1548
Air transportation, Reporting and recordkeeping requirements,
Security measures.
The Amendment
For the reasons set forth in the preamble, the Transportation
Security Administration amends chapter XII of title 49, Code of Federal
Regulations, as follows:
[[Page 8557]]
Subchapter C--Civil Aviation Security
PART 1548--INDIRECT AIR CARRIER SECURITY
0
1. The authority citation for part 1548 continues to read as follows:
Authority: 49 U.S.C. 114, 5103, 40113, 44901-44905, 44913-
44914, 44916-44917, 44932, 44935-44936, 46105.
Sec. 1548.7 [Amended]
0
2. Amend Sec. 1548.7 by:
0
a. In paragraph (a)(4), removing the words ``one year after the month
it was approved'' and adding in their place ``3 years after the month
it was approved, or until the program has been surrendered or
withdrawn, whichever is earlier''.
0
b. In paragraph (a)(5) introductory text, adding the words ``or
renewal'' after the words ``submitted during its initial''.
0
c. In paragraph (b)(1), removing the words ``at least 30 calendar days
prior to the first day of the anniversary month of initial approval''
and adding in their place ``at least 30 calendar days before the 36th
month after the initial approval''.
0
d. In paragraph (b)(4), removing the words ``one year after the month
it was renewed'' and adding in their place ``3 years after the month it
was renewed, or until the program has been surrendered or withdrawn,
whichever is earlier''.
Dated: February 1, 2024.
David P. Pekoske,
Administrator.
[FR Doc. 2024-02495 Filed 2-7-24; 8:45 am]
BILLING CODE 9110-05-P
