[Federal Register: August 25, 2006 (Volume 71, Number 165)]
[Rules and Regulations]
[Page 50320-50328]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25au06-2]
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DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
7 CFR Parts 319 and 354
[Docket No. APHIS 2006-0096]
RIN 0579-AC06
Agricultural Inspection and AQI User Fees Along the U.S./Canada
Border
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Interim rule and request for comments.
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SUMMARY: We are amending the foreign quarantine and user fee
regulations by removing the exemptions from inspection for imported
fruits and vegetables grown in Canada and the exemptions from user fees
for commercial vessels, commercial trucks, commercial railroad cars,
commercial aircraft, and international air passengers entering the
United States from Canada. As a result of this action, all agricultural
products imported from Canada will be subject to inspection, and
commercial conveyances, as well as airline passengers arriving on
flights from Canada, will be subject to inspection and user fees. We
are taking this action in part because we are not recovering the costs
of our current inspection activities at the U.S./Canada border. In
addition, our data show an increasing number of interceptions on the
U.S./Canada border of prohibited material that originated in regions
other than Canada that presents a high risk of introducing plant pests
or animal diseases into the United States. These findings, combined
with additional Canadian airport preclearance data on interceptions of
ineligible agricultural products approaching the U.S. border from
Canada, strongly indicate that we need to expand and strengthen our
pest exclusion and smuggling interdiction efforts at that border. In
order to do this and to recover the costs of our existing inspection
activity, we need to collect user fees for inspection of commercial
conveyances and international air passengers entering the United States
from Canada.
DATES: This interim rule is effective November 24, 2006. We will
consider all comments we receive on or before November 24, 2006.
ADDRESSES: You may submit comments by either of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov
and, in the lower ``Search Regulations and Federal
Actions'' box, select ``Animal and Plant Health Inspection Service''
from the agency drop-down menu, then click on ``Submit.'' In the Docket
ID column, select APHIS-2006-0096 to submit or view public comments and
to view supporting and related materials available electronically.
Information on using Regulations.gov, including instructions for
accessing documents, submitting comments, and viewing the docket after
the close of the comment period, is available through the site's ``User
Tips'' link.
Postal Mail/Commercial Delivery: Please send four copies
of your comment (an original and three copies) to Docket No. APHIS-
2006-0096, Regulatory Analysis and Development, PPD, APHIS, Station 3A-
03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state
that your comment refers to Docket No. APHIS-2006-0096.
Reading Room: You may read any comments that we receive on this
docket in our reading room. The reading room is located in room 1141 of
the USDA South Building, 14th Street and Independence Avenue SW.,
Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m.,
Monday through Friday, except holidays. To be sure someone is there to
help you, please call (202) 690-2817 before coming.
Other Information: Additional information about APHIS and its
programs is available on the Internet at http://www.aphis.usda.gov.
FOR FURTHER INFORMATION CONTACT: Mr. Alan S. Green, Executive Director,
Plant Health Programs, PPQ, APHIS, 4700 River Road Unit 36, Riverdale,
MD 20737; (301) 734-8261.
SUPPLEMENTARY INFORMATION:
Background
The regulations in 7 CFR part 319 prohibit or restrict the
importation of certain plants and plant products into the United States
to prevent the introduction of plant pests. Similarly, the regulations
in 9 CFR subchapter D prohibit or restrict the importation of certain
animals and animal products into the United States to prevent the
introduction of pests or diseases of livestock. The regulations in 7
CFR part 354 provide rates and requirements for overtime services
relating to imports and exports and for user fees.
The existing regulations in ``Subpart-Fruits and Vegetables''
(Sec. Sec. 319.56 through 319.56-8) require, with very few exceptions,
a specific written permit for the importation of fresh fruits or
vegetables into the United States. The imported fruits and vegetables
are
[[Page 50321]]
subject to inspection and, if necessary, cleaning and/or treatment at
the first port of arrival in the United States. Also, the owner or the
owner's agent must make full disclosure of the type, quantity, and
country of origin of the fruits and vegetables at the time the fruits
and vegetables are presented for inspection.
Current Sec. 319.56-2(c), however, provides that, with the
exception of potatoes from specified areas in Canada, fruits and
vegetables grown in Canada may be imported without restriction under
the regulations. Canada has been treated more leniently than other
countries because, at the time the policy was implemented, products
from Canada were produced in Canada and, in most cases, did not harbor
plant pests or animal diseases of concern to the United States. In
addition, we had reviewed Canada's import requirements and determined
that they were sufficient to ensure that Canada would keep out
agricultural commodities from other countries that could present plant
or animal pest or disease risks if those commodities were subsequently
exported from Canada to the United States. In the two final rules (the
first published in the Federal Register on April 12, 1991 (56 FR 14837-
14846, Docket No. 91-026) and the second on January 9, 1992 (57 FR 755-
773, Docket No. 91-135)) in which we first established agricultural
quarantine and inspection (AQI) user fees for commercial conveyances
and international air passengers, we exempted conveyances and
passengers from Canada from those fees. Because it was our
understanding at the time that such conveyances and passengers posed
little risk of introducing plant or animal pests or diseases into the
United States, we did not need to routinely provide AQI services for
them and, therefore, could not justify imposing user fees on them.
Recent trends have led us to reevaluate our AQI inspection regime
at the U.S./Canada border. The North American Free Trade Agreement has
had a significant impact on agricultural trade between the United
States and Canada. Between 1995 and 2005, Canadian exports to the
United States of vegetables and fruits and nuts increased by 80
percent. In addition, a huge demand created by Canada's growing
cultural diversity has led to an ever-increasing variety of
agricultural products from all over the world being imported into
Canada. Canadian re-exports of vegetables and fruits and nuts to the
United States increased by 336 percent during the same 10-year period.
Being situated entirely in cool to cold ecoregions, Canada imposes
fewer phytosanitary requirements than does the United States on imports
of plant products from most countries where tropical or subtropical
pests are present. Of the 402 species on the U.S. regulated plant pest
list as of December 2001, 349, or 87 percent, were not regulated pests
in Canada. Therefore, most commodities that are refused entry into the
United States, or are admitted only after certain phytosanitary
requirements have been met, can be imported into Canada without any
impediments.
Canada's import requirements for many foreign plant products allow
Canada to offer a greater availability of such products than can the
United States. This greater availability, which may result in lower
prices, combined with the lack of routine inspection at U.S. ports of
entry of agricultural products labeled as products of Canada and of
international air passengers at the Canada/U.S. border, creates an
incentive for people to bring agricultural commodities that may not be
eligible for U.S. import into the United States from Canada. Some
commodities that fall into this category are mangoes, litchis, guava,
and lemon grass.
Responding to this incentive, commercial importers can circumvent
U.S. phytosanitary regulations by having agricultural commodities
shipped to Canada, having them re-labeled there as products of Canada,
and then having them shipped to the United States, taking advantage of
the exemption in Sec. 319.56-2(c) referred to above. Interceptions at
the border, including one in Detroit in 2004 of Spanish oranges and
Dutch peppers manifested as products of Canada, provide evidence of
this practice. There have also been instances of flowers grown in a
third country being mixed into bouquets with Canadian-grown flowers and
then shipped to the United States. Hydrangea plants from third
countries have been cut into small rooted cuttings, labeled as Canadian
products, and then shipped across the border to the United States. In
2005, approximately 14,000 hydrangea plants from Japan entered the
United States via Canada. Importation into the United States of
hydrangeas from Japan is prohibited due to the possibility that they
could introduce the quarantine-significant rust Puccinia glyceriae
(anam. Aecidium hydrangeae-paniculatae Dietel into this country. There
have been frequent interceptions of litchis and longans that originated
in Asian countries, were taken out of their original boxes, re-labeled,
and then shipped across the border from Canada. A 3,000-pound shipment
of untreated longans, which was part of a mixed load, was intercepted
at Blaine, WA, in 2003. A shipment of litchis was seized as recently as
July 2006, also at Blaine.
Further confirmation of these practices was provided by the results
of three extensive inspection operations along the U.S./Canada border
(two in Buffalo, NY, and a third at Blaine, WA). The inspections
resulted in numerous interceptions of unauthorized material produced in
regions other than the United States and Canada.
Prohibited articles found during these inspections included
untreated citrus fruit, mangoes, and other tropical fruit; meat; live
birds; and plants in pots with soil. The prohibited plants, plant
products, birds, and animal products intercepted originated in regions
throughout the world and presented a high risk of introducing plant
pests or animal diseases into the United States. In fact, according to
our interception records, a number of exotic plant pests were found
during these inspections, including fruit flies and mealybugs on
cherimoyas; aphids, mites, and scale insects on litchis; white flies
and fruit flies on guavas; and scale insects and mealybugs on mangoes.
Additional interception records compiled by APHIS' Plant Protection
and Quarantine (PPQ) program have documented a number of potential risk
factors associated with imports of agricultural products from Canada.
Materials with the potential for carrying foot-and-mouth disease (FMD)
have been found to approach the border regularly from Canada. Solid
wood packing material, a pathway for the Asian and citrus longhorned
beetles, Sirex noctilio, pine shoot beetle, emerald ash borer, and
other pests and diseases, is estimated to be present in some 70 percent
of all Canadian rail containers. We view both the packing materials and
the railway conveyances in which they are carried as more significant
risk pathways than we did when we first established AQI user fees.
Fruit flies have been intercepted at U.S. entry ports on mangoes from
Mexico and Morocco, longans and litchis from various Asian countries,
citrus from Spain, Spondia spp. from Mexico, Acanthocereus spp. from
China, and Musa spp. from India that were shipped from those countries
to the United States via Canada.
Results of our AQI preclearance activities at Canadian airports
have demonstrated that air passengers from Canada represent another
pest pathway. The number of air passengers entering the United States
from Canada has increased over 70 percent in the last 14 years, from 35
million in 1992 to a
[[Page 50322]]
projected 60 million in 2006. AQI monitoring of this pathway was first
implemented in FY 1996 at Vancouver International Airport, with
permanent staffing placed at that airport in FY 2001. The preclearance
program was then expanded to include Toronto, Montreal, and Calgary.
Table 1 below provides data on interceptions of animal products
prohibited U.S. entry that were carried by preclearance passengers at
Vancouver International Airport in FYs 2000 and 2001. Imports of animal
products from the countries listed in the table may present a risk of
introducing FMD or other animal diseases into the United States. The
interception totals were higher in FY 2001 because of the permanent
staffing we had in place during that year. Regrettably, in subsequent
years, staffing shortfalls elsewhere resulted in AQI personnel being
reassigned from this location, increasing the possibility that
prohibited animal products may not be intercepted at Vancouver
International Airport prior to entering the United States.
Table 1.--Interceptions of Prohibited Animal Products During
Preclearance Passenger Inspections at Vancouver International Airport
------------------------------------------------------------------------
Animal product
interceptions
Passenger origin -------------------------
FY 2000 FY 2001
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Canada........................................ 3 8
China......................................... 2 41
Hong Kong..................................... 0 11
Japan......................................... 0 3
South Korea................................... 0 1
Philippines................................... 0 5
Singapore..................................... 0 1
United Kingdom................................ 0 1
Spain......................................... 1 0
Taiwan........................................ 2 0
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Source: Work Accomplishment Data System, APHIS, PPQ.
Table 2 below presents approach rates for FYs 2001 through 2004 for
samples of preclearance passengers at the four Canadian airport
locations--Calgary, Montreal, Toronto, and Vancouver--at which we have
had an AQI presence. The approach rate is the percentage of passengers
carrying agricultural items prohibited entry into the United States.
For example, in FY 2001, there were 5,433 passengers sampled, of whom
358 were found to be carrying prohibited materials, which were then
seized, resulting in an approach rate of 6.6 percent.
Table 2.--Approach Rates for Preclearance Passengers at Canadian
Airports
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Quarantined Approach
Fiscal year Passengers material rate
sampled interceptions (percent)
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2001........................... 5,433 358 6.6
2002........................... 4,386 160 3.6
2003........................... 18,285 901 4.9
2004........................... 19,496 1,520 7.8
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Average.................... 11,900 735 6.2
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Source: APHIS, PPQ, Agricultural Quarantine Inspection Monitoring
Program.
In FY 1999, the last year for which we have complete data on the
number of air passengers precleared in Canada for entry into the United
States, the total exceeded 10 million passengers. As shown in table 2,
the average yearly approach rate for such passengers is 6.2 percent.
This means that approximately 620,000 prohibited agricultural
commodities may be carried by air passengers attempting to enter the
United States from Canada each year. When surveys and blitzes were
conducted on passenger baggage at destination airports in the United
States, significant amounts of prohibited agricultural materials were
found.
In addition to all the conventional risk pathways discussed above,
in the wake of the terrorist attacks of September 11, 2001,
bioterrorism has become a much greater source of concern to us than it
was in the past. The U.S./Canada border, which stretches over 3,985
miles from the Pacific to the Atlantic Ocean, is the longest undefended
border in the world. Our current dearth of inspection activity at that
border could potentially leave the United States vulnerable to
bioterrorism. A successful bioterrorist attack could, in addition to
causing death and illness, undermine Americans' confidence in the
safety of their food system and have a devastating impact on U.S.
agriculture.
In order to safeguard U.S. agriculture, we have recently augmented
our inspection activities at the U.S./Canada borders. The Bureau of
Customs and Border Protection (CBP) of the U.S. Department of Homeland
Security, which now conducts agricultural inspections pursuant to
APHIS' regulations, currently has agricultural inspector positions
along the U.S./Canadian land border stretching from Maine to Washington
State. Busy corridors, such as Buffalo, NY, Detroit, MI, and Blaine,
WA, have had the most inspectors. In recent years, agriculture
[[Page 50323]]
inspectors have been assigned to ports that previously did not have
coverage for agricultural products, such as those in Maine, Minnesota,
North Dakota, Montana, and Idaho. In addition to the border inspectors,
there are the CBP agricultural inspectors located at preclearance
stations at the larger Canadian airports of Toronto, Vancouver, and
Montreal.
Inspectors at the border check and verify import permits and
conduct inspection of agricultural products, such as cut flowers and
produce, that are arriving on commercial conveyances, when those
products are not of Canadian origin or when paperwork is lacking. Such
commodities as meat and solid wood packing material have also been
subject to inspection. In addition, the inspectors have been conducting
some passenger vehicle inspections, which have resulted in the seizure
of prohibited foreign agricultural commodities, such as untreated Asian
and Latin American fruits that are eligible to enter Canada without the
treatment necessary for importation into the United States.
Lack of funding and personnel have hampered our border inspection
efforts, however. Because we have not charged user fees for inspecting
commercial vessels (100 net tons or more), commercial trucks,
commercial railroad cars, commercial aircraft, or international air
passengers that enter the United States from Canada, we have not been
recovering the costs of the inspections that we have been conducting.
CBP staffing shortages have prevented us from augmenting our inspection
activities to the extent that we deem necessary. At some of the newly
staffed border locations referred to earlier, there is only one
inspector to cover multiple points of entry.
Based on all the findings discussed above regarding conventional
risk pathways, as well as our concerns about bioterrorism, we have
determined that we need to expand and strengthen our pest exclusion
efforts at the U.S./Canadian border. CBP concurs with this
determination.
To sum up then, this interim rule has a threefold purpose:
Closing the inspection exemption loophole for fruits and
vegetables entering the United States from Canada;
Recovering the costs of AQI services we are already
providing at the U.S./Canada border; and
Recovering the costs of new, expanded AQI services at the
U.S./Canada border.
To address the risks posed by agricultural products agricultural
products that originate in a third country and are shipped through
Canada to the United States, we are amending Sec. 319.56-2(c), which,
as noted above, provides that, with the exception of potatoes from
specified areas in Canada, fruits and vegetables grown in Canada may be
imported without restriction under the regulations in ``Subpart-Fruits
and Vegetables.'' Specifically, we are amending that paragraph to
provide that such fruits and vegetables will be subject to the
requirements in Sec. 319.56-6 for inspection at the port of first
arrival. There are no specific inspection exemptions in other APHIS
regulations for commodities from Canada. Agricultural commodities from
Canada other than fruits and vegetables, such as cut flowers and
nursery stock, are already subject to inspection, though such
inspections have not been conducted with a frequency commensurate with
the level of risk now associated with such imports.
We are also removing the exemptions from AQI user fees in Sec.
354.3 for commercial vessels, commercial trucks, commercial railroad
cars, commercial aircraft, and international air passengers \1\
entering the United States from Canada. Removing these exemptions will
enable us to recover the both costs of our current inspection
activities and the costs associated with implementing an augmented
inspection regime for these conveyances and passengers.
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\1\ Fees charged air passengers are collected by the airlines
and transmitted to APHIS. We have used appropriated funds to cover
AQI costs attributable to pedestrians and private vehicular traffic.
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The additional resources generated by the user fees will enable us
to hire sufficient personnel to help target existing agricultural risk
pathways for adequate pest exclusion and conduct compliance checks for
all entrants from Canada. Adequate staffing is also vital to the effort
to uncover currently unknown pathways. In addition, more inspectors are
necessary to properly conduct verification of exit for transiting
commodities at land borders. At Canadian airports, additional personnel
will enable us to increase inspections of passengers determined to be
at high risk for carrying restricted or prohibited animal products and
produce. Anticipated personnel and other costs resulting from this
interim rule are discussed below in the summary of the economic
analysis, as well as in the full analysis.
Our amendments to Sec. 354.3 entail removing or amending those
paragraphs in the section that provide specific exemptions for
conveyances or passengers arriving from Canada or that have moved
solely between the United States and Canada. In the paragraphs that
provide for the prepayment of user fees for commercial trucks and
commercial railroad cars, which have applied only to such trucks and
railroad cars from Mexico due to the exemptions discussed previously
for those conveyances arriving from Canada, we have removed the words
``from Mexico'' so those prepayment provisions will apply to
conveyances arriving from both Canada and Mexico.
This interim rule does not establish any new user fees. Rather, the
same AQI user fees that apply to commercial vessels, commercial trucks,
commercial railroad cars, commercial aircraft, and international air
passengers from every other nation arriving at ports in the customs
territory of the United States will now apply to Canada as well.
In an interim rule published in the Federal Register on December 9,
2004 (69 FR 71660-71683, Docket No. 04-042-1), and effective on January
1, 2005, we amended the user fee regulations in Sec. 354.3 by
adjusting these fees. The fee adjustments were needed to recover the
costs of increased inspection activity necessitated by the events of
September 11, 2001, and to account for routine inflationary increases
in the cost of doing business. The December 2004 interim rule contained
adjusted AQI user fees for fiscal years (FYs) 2005 through 2010.
We develop user fees by determining the total annual costs to
administer each individual AQI program activity for air passengers,
commercial aircraft, trucks, railroad cars, and maritime vessels,
including direct costs for providing inspection services, and indirect
costs, such as agency overhead; the administrative costs of developing,
collecting, and monitoring AQI user fees; and an amount to maintain a
reasonable balance in reserve. We divide the total costs for each
individual program activity by the estimated volume of airline
passengers and commercial conveyances in that program activity arriving
from all destinations to calculate each individual program's user fees.
Depending on the type of commodity or the agricultural risks associated
with the region from which a conveyance or passenger originates, the
inspection process may take only a few minutes or it can be quite
extensive. These factors vary considerably from port to port and season
to season; however, our fees do not. The number of variables which
determine the amount of service or length of time required to provide
service is virtually infinite. A system
[[Page 50324]]
that attempted to account for all these variables would be unwieldy and
expensive to administer and would require that additional expenses be
included in the fee calculations.
AQI user fees are spent only on AQI-related activities-in this
case, establishing a workforce on the U.S./Canadian border commensurate
with the volume of traffic that is sufficient to implement and maintain
an inspection program on that border. Internal recordkeeping ensures
that revenues received from air passengers and each mode of
transportation are properly recorded and utilized. While AQI revenues
all go into one AQI account, they are applied to specific activities.
Revenues from AQI fees collected from international air passengers are
only used for expenses associated with providing AQI services for those
passengers. Similarly, revenues from AQI fees for each type of
conveyance are only used for expenses associated with providing AQI
services for that type of conveyance. Any excess collections will be
used to rebuild the AQI reserve balances for the various service
categories, which have been depleted in part because we have not been
recovering the costs of even the limited inspection activities we have
been conducting on the U.S./Canada border. As APHIS assesses its user
fees, it will initiate rulemaking to increase or decrease the fees as
necessary.
Section 2509(a) of the Food, Agriculture, Conservation, and Trade
Act of 1990 (21 U.S.C. 136a, referred to below as the FACT Act), as
amended by section 917 of the Federal Agricultural Improvement and
Reform Act of 1997 (Pub. L. 104-127), authorizes APHIS to collect user
fees for AQI services. These include an amount sufficient to maintain a
reasonable balance, i.e., a reserve fund, in the AQI User Fee Account
for each service category. The reserve fund serves two purposes. First,
it ensures that the Agency has access, through the AQI User Fee
Account, to funds for normal operating expenses for each AQI service
category. Second, the reserve fund ensures that the Agency has
sufficient operating funds to carry on with AQI activities in each
service category in cases of bad debt, carrier insolvency, or
fluctuations in activity volumes.
The aftermath of the events of September 11, 2001, shows the
importance and necessity for such a reserve. For a time, airline
business stopped completely, and it is still at lower levels than it
was before September 11, 2001. Many airlines have either filed for
bankruptcy or simply stopped flying into the United States. Further,
some U.S. passengers are wary of traveling abroad, and some foreign
travelers have the same fears of traveling to the United States.
Without the reserve, AQI operations would have been severely disrupted.
Emergency Action
This rulemaking, which removes the exemption from inspection for
imported fruits and vegetables grown in Canada and subjects all air
passengers and commercial vessels, trucks, railroad cars and aircraft
from Canada to AQI user fees, is necessary on an emergency basis to
prevent the introduction of plant pests and animal diseases into the
United States via conventional pathways or through bioterrorism and to
recover the cost of the needed inspections. Under these circumstances,
the Administrator has determined that there is good cause under 5
U.S.C. 553 for issuing this rule as an interim rule rather than by
publishing a notice of proposed rulemaking. We are making this rule
effective 90 days after publication in the Federal Register in order to
allow adequate time for the transfer of inspectors to the U.S./Canada
border, the establishment of new inspection protocols, and the
implementation of collection procedures by those who must collect user
fees.
We will consider comments we receive during the comment period for
this interim rule (see DATES above). After the comment period closes,
we will publish another document in the Federal Register. The document
will include a discussion of any comments we receive and any amendments
we are making to the rule.
Executive Order 12866 and Regulatory Flexibility Act
This rule has been reviewed under Executive Order 12866. This rule
has been determined to be significant for the purposes of Executive
Order 12866 and, therefore, has been reviewed by the Office of
Management and Budget.
For this interim rule, we have prepared an economic analysis. The
economic analysis, which provides a cost-benefit analysis as required
by Executive Order 12866 and an analysis of the potential economic
effects on small entities as required by the Regulatory Flexibility
Act, is summarized below. Copies of the full analysis are available by
contacting the person listed under FOR FURTHER INFORMATION CONTACT and
may be viewed on the Regulations.gov Web site (see ADDRESSES above for
instructions for accessing Regulations.gov).
The Regulatory Flexibility Act requires that agencies specifically
consider the economic effects associated with their rules on small
entities, which include small businesses, small not-for-profit
organizations, and small governmental jurisdictions. We do not have
enough data for a comprehensive analysis of the economic effects of
this rule on small entities. Therefore, in accordance with 5 U.S.C.
603, we have performed an initial regulatory flexibility analysis for
this rule. We are inviting comments about this rule as it relates to
small entities. In particular, we are interested in determining the
number and kind of small entities who may incur benefits or costs as a
result of this rule and the economic effects of those benefits or
costs.
Under the Plant Protection Act (7 U.S.C. 7701 et seq.), the
Secretary of Agriculture is authorized to regulate the importation of
plants, plant products, means of conveyance, and other articles to
prevent the introduction into or dissemination within the United States
of plant pests and diseases and noxious weeds. Similarly, under the
Animal Health Protection Act (7 U.S.C. 8301 et seq.), the Secretary of
Agriculture is authorized to regulate the importation or entry into the
United States of any animal, animal product, means of conveyance, or
other article to prevent the introduction into or dissemination within
the United States of any pest or disease of livestock. Also, under the
FACT Act, the Secretary of Agriculture is authorized to prescribe and
collect fees that will cover the cost of providing import- and export-
related AQI inspection services in connection with the arrival of
international passengers, commercial vessels, commercial aircraft,
commercial trucks, and railroad cars in the customs territory of the
United States or their preclearance at a site outside the customs
territory of the United States.
This interim rule removes exemptions from AQI inspection for
Canadian-grown fruits and vegetables imported from Canada and the
exemptions from user fees for commercial vessels, commercial trucks,
commercial railroad cars, commercial aircraft, and air passengers
moving into the United States from Canada. As a result of this action,
fruits and vegetables grown in Canada and imported into the United
States will be subject to inspection, and commercial vessels, trucks,
railroad cars, and aircraft, as well as airline passengers coming into
the United States from Canada, will be subject to inspection and user
fees. We are taking this action because we are not recovering the costs
of our current
[[Page 50325]]
inspection activity at the U.S./Canada border and because our data show
an increasing number of interceptions on the border of prohibited
material that originated in regions other than Canada. These findings,
combined with our increased concerns about the threat of bioterrorism,
make it imperative that we expand and strengthen our pest exclusion
efforts at the U.S./Canada border and that we have the funds available
to support both our existing and expanded activity.
Affected Entities and User Fee Revenues
This interim rule will affect entities that move commodities into
the United States from Canada. Broadly, these include commercial
surface, waterborne, and air conveyances.
Surface Conveyances
For commercial freight trucking, the Small Business Administration
(SBA) defines a small entity as one having not more than $23.5 million
in annual receipts. According to the 2002 Economic Census (the most
recent available), there were 29,321 general long-distance freight
trucking establishments in the United States (North American Industry
Classification System [NAICS] code 484121). A total of 403 of these
establishments, or less than 2 percent, had annual receipts of $21.5
million or more, the largest revenue category identified. Thus, more
than 98 percent of trucking establishments in the United States are
small entities. We do not know the number or size of trucking
establishments that transport products across the border from Canada,
but can reasonably assume that they are also mostly small entities.
For commercial railroad transportation, the SBA defines a small
business entity as one having not more than 1,500 employees for long-
haul railroads (NAICS code 482111) and not more than 500 employees for
short-line railroads (NAICS code 482112). Of the 571 firms operating as
railroad transportation companies in the United States according to the
2002 Economic Census, 18 firms employed more than 500 workers.
Therefore, approximately 97 percent of commercial railroad companies in
the United States could be considered small entities. We assume that
this percentage applies to railroad companies that transport products
into the United States from Canada.
Under this interim rule, all commercial trucks and trains, except
those exempt from payment under 7 CFR 354.3(d)(2), entering the United
States from Canada will be subject to AQI user fees. A user fee of
$5.25 per crossing or $105 for the year will be charged to each truck
(table 3) in FYs 2006 and 2007. A user fee of $7.50 per crossing will
be charged to each loaded rail car in FY 2006. In FY 2007, the fee will
be $7.75. Trucks, trains, and all other surface modes of conveyance
transported approximately $458 billion worth of goods across the U.S./
Canada border in 2005.\2\ While agricultural shipments are expected to
be the focus of the border inspections, all commercial conveyances
crossing the border are subject to inspection and the user fee.
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\2\ Bureau of Transportation Statistics. U.S. Surface
Transportation Trade with Canada, 2006.
---------------------------------------------------------------------------
Waterborne Conveyances
For commercial water transportation, the SBA defines a small
business entity as one having not more than 500 employees. According to
2002 U.S. Census data for Transportation and Warehousing, there were
1,334 firms that operated in the United States for the entire year
providing ``deep sea, coastal, and Great Lakes water transportation''
(NAICS codes 483111 and 483113). Twelve of these firms employed 500 to
999 workers, and 10 firms employed 1,000 or more workers. Thus, over 98
percent of water transportation firms in the United States employed
fewer than 500 workers and could be considered small.
Under this interim rule, all commercial vessels of 100 net tons or
more entering the United States from Canada in FY 2006, unless exempt
from payment under Sec. 354.3(b)(2), will be charged a user fee of
$488 per vessel (table 3). The fee rises slightly to $490 in FY 2007.
All waterborne trade with Canada in 2005 was valued at $14 billion.\3\
Approximately 1,895 vessels were used to move cargo from Canada to the
United States in 2005; however, it is not known how many of these
vessels carried agricultural goods.\4\
---------------------------------------------------------------------------
\3\ Bureau of Transportation Statistics. U.S. Surface
Transportation Trade with Canada, 2006.
\4\ Bureau of Transportation Statistics. U.S. Surface
Transportation Trade with Canada, 2006.
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Air Conveyances
For commercial air transportation, the SBA defines a small business
entity as one having not more than 1,500 employees. According to the
2002 U.S. Economic Census for Transportation and Warehousing, there
were 1,674 firms in the United States classified under ``scheduled
freight air transportation'' (NAICS code 481112), of which only 13
firms employed more than 1,000 workers. Thus, over 99 percent of all
air transportation firms in the United States could be considered
small.
Under this interim rule, commercial aircraft arriving in the United
States from Canada in FY 2006 will be charged a user fee of $70.25 per
arrival, unless exempt from payment under Sec. 354.3(e)(2). In FY
2007, the fee will be $70.50 per arrival. The interim rule also
requires that air passengers coming to the United States from Canada
(10.1 million in FY 2005) be charged a user fee of $5.00 each (table 3)
in both FYs 2006 and 2007, unless exempt from payment under Sec.
354.3(f)(2).
Table 3.--Agricultural Inspection (AQI) User Fees for Conveyances Entering the United States
----------------------------------------------------------------------------------------------------------------
User fee User fee Prepaid Prepaid
per per user fee user fee
Conveyance crossing crossing decal (FY decal (FY
(FY 2006) (FY 2007) 2006) 2007)
----------------------------------------------------------------------------------------------------------------
Maritime vessels............................................ $488.00 $490.00 N/A N/A
Trucks*..................................................... 5.25 5.25 $105.00 $105.00
Railroad cars............................................... 7.50 7.75 N/A N/A
Aircraft.................................................... 70.25 70.50 N/A N/A
Air passengers (per passenger).............................. 5.00 5.00 N/A N/A
----------------------------------------------------------------------------------------------------------------
*Truck operators will have a choice of paying per crossing or per year (decal).
[[Page 50326]]
Economic Effects of Changes
Regardless of what goods they carry, unless exempt, commercial
trucks, vessels of 100 net tons or more, railroad cars, and aircraft
are subject to inspection and will be charged a user fee. Table 4 shows
the revenues that we project will be generated by applying the FY 2006
and FY 2007 user fees to conveyances arriving from Canada, assuming
similar Canadian conveyance volumes to the averages recorded for FYs
2003 through 2005. We estimate that vessel entities would be required
to pay about $925,000 in user fees in FY 2006 and $938,000 in FY 2007;
truck entities, about $14.6 million in FY 2006 and $14.8 million in FY
2007; and rail entities, about $6.2 million in FY 2006 and $6.5 million
in FY 2007.
Table 4.--Value of User Fees by Type of Conveyance
----------------------------------------------------------------------------------------------------------------
Estimated Projected Projected
Conveyance User fees (FY User fees (FY volumes (FY revenue (FY revenue (FY
2006) 2007) 2006)* 2006) 2007)**
----------------------------------------------------------------------------------------------------------------
Maritime vessels............. $488.00......... $490.00........ 1,895 $924,760 $937,836
Trucks....................... 5.25............ 5.25........... 982,765 5,159,516 5,211,111
Trucks with decal............ 105/year........ 105/year....... 90,256 9,476,880 9,571,649
Rail car..................... 7.50............ 7.75........... 827,793 6,208,448 6,479,550
----------------------------------------------------------------------------------
Total fees............... ................ ............... .............. 21,769,604 22,200,146
----------------------------------------------------------------------------------------------------------------
* Estimated volumes for FY 2006 are based on average FY 2003-FY 2005 border crossings.
** Projected revenues for FY 2007 are based on FY 2006 estimated volumes plus a slight increase in general trade
volumes of 1 percent.
Source: Figures derived from APHIS' Financial Management Division.
Projected revenue from user fees for air passengers from Canada
would total approximately $50.4 million in FY 2006 and $50.9 million in
FY 2007, and the figures for commercial aircraft entities would be
approximately $4.9 million in both of those years. Table 5 shows these
revenues.
Table 5.--Air Passengers and Aircraft User Fees
----------------------------------------------------------------------------------------------------------------
Estimated Projected Projected
Entity entering the United User fees (FY User fees (FY volumes* (FY revenue (FY revenue (FY
States from Canada 2006) 2007) 2006) 2006) 2007)**
----------------------------------------------------------------------------------------------------------------
Air passenger................... $5.00 $5.00 10,078,551 $50,392,755 $50,896,683
Aircraft....................... 70.25 70.50 69,398 4,875,210 4,941,485
-------------------------------------------------------------------------------
Total fees.................. .............. .............. .............. 55,267,965 55,838,168
----------------------------------------------------------------------------------------------------------------
*Estimated volumes from FY 2006 are based on average FY 2003-FY 2005 border crossings.
**Projected revenues for FY 2007 are based on FY 2006 estimated volumes plus a slight increase in general trade
volumes of 1 percent.
Source: Figures derived from APHIS' Financial Management Division.
Based upon our projected totals in tables 4 and 5, the total
projected revenues for surface and air conveyances and airline
passengers from Canada come to $77 million in FY 2006 and $78 million
in FY 2007. Any amounts collected in excess of our actual expenditures
would remain in a no-year account as a reserve until expended on AQI
services in future years.
Federal Government Costs
We have estimated that to implement an AQI program for Canada, 136
full-time employees will need to be deployed along the U.S./Canada land
border to inspect ground conveyances (passenger vehicles, trucks, and
trains),\5\ and 65 full-time employees will be required at 7 different
Canadian airport locations to inspect air passengers and cargo.\6\ CBP
concurs with these estimates. It is likely that new hiring and
implementation will be phased in over time.
---------------------------------------------------------------------------
\5\ Eastern Region Staffing Plan and Western Region Staffing
Plan for Canadian Border, October 26, 2001.
\6\ PPQ pre-clearance AQI staffing report for 7 Canadian airport
locations, April 9, 2003. (To be consistent with the eastern and
western land border staffing reports, salaries and benefits are
based on the 2006 general Federal pay rate for airport staff.
---------------------------------------------------------------------------
The annual cost for 136 staff along the entire U.S.-Canadian border
is expected to be about $22.45 million. The annual cost of the 65 pre-
clearance airport staff will be approximately $46 million. The total
direct cost to the Federal Government of providing inspection services
associated with this rule, based on the estimated cost of 136 positions
on the Canadian land border and the 65 airport pre-clearance positions,
is $68.5 million.
Indirect costs associated with the AQI program include support
costs (e.g., expenses of maintaining regional and headquarters staff
and offices, developing detection methods, preparing risk assessments,
enforcing the regulations, and providing communications, budget, and
accounting services); administrative costs of developing, collecting,
and monitoring AQI user fees; and APHIS' share of the costs incurred by
the U.S. Department of Agriculture (USDA) in providing centralized
services (e.g., telephone and mail service) to USDA agencies. The
indirect costs associated with this rule are estimated at $6.3 million,
as shown below in table 6. The total estimated annual costs associated
with this rule, i.e., the direct and indirect costs of conducting
inspections and collecting user fees, are then $74.8 million, assuming
full implementation of the program.
Table 6.--Total Estimated Annual Costs of Inspections and User Fee
Collections Under This Rule
------------------------------------------------------------------------
------------------------------------------------------------------------
Direct costs............................................ $68,466,469
Indirect costs:
Agency support (7.47 %)............................... 5,114,445
[[Page 50327]]
Departmental charges (1.52 %)......................... 1,040,690
Administrative costs (0.26 %)......................... 178,013
Total indirect costs................................ 6,333,148
---------------
Total costs................................. 74,799,617
------------------------------------------------------------------------
In addition to the estimated costs detailed above, we may incur
costs for additional staff that may be required at both maritime ports
and airports to inspect waterborne cargo and air cargo arriving from
Canada. Since Canadian vessels and aircraft can use any U.S. maritime
port or airport, it is not yet clear whether additional positions may
be needed at these locations or, if so, how many.
Along with the costs of hiring additional staff for maritime ports,
airports, and the U.S./Canada land border, there will be other costs
because the current infrastructure will need to be expanded to
accommodate workers and inspection bays. At this time, we have not
determined the cost of these staffing and infrastructure requirements.
As we have discussed above, we anticipate that the costs of
implementing and maintaining an AQI program at the U.S./Canada border
will be fully recovered through the collection of AQI user fees.
Alternatives
One alternative to this rule would be to make no changes to the
current regulations. However, as we have already discussed, data
showing an increasing number of interceptions on the U.S./Canada border
of prohibited material that originated in regions other than Canada
indicate to us that increased pest exclusion efforts are needed at the
U.S./Canada border to prevent the introduction of plant pests and
animal diseases via unauthorized importations into the United States
through Canada. Increasing our border inspection activities is also
necessary to protect U.S. agriculture from bioterrorism. Removing the
Canadian exemption from AQI user fees is necessary to recover the costs
of our existing inspection activities and to implement an expanded
inspection program.
Another alternative to this rule would be to limit user fees to
commercial vessels, commercial trucks, commercial railroad cars, and
commercial aircraft, i.e., to exclude international air passengers
entering the United States from Canada. However, as we discussed
earlier, data from our preclearance inspections at Canadian airports
indicate that air passengers attempt to carry tropical and exotic
fruits and vegetables, as well as prohibited animal products, from
Canadian markets into the United States. We would not be able to
prevent or control the movement of such regulated articles into the
United States if we did not increase our passenger-inspection
activities, along with our conveyance-inspection activities, at the
U.S./Canada border and would not be recovering the costs of passenger
inspections if we did not charge passengers AQI user fees. We are
already unable to recover the costs of inspecting passengers crossing
the border in private vehicles because collecting user fees from such
passengers would not be cost effective and would be administratively
complex.
One other alternative would be to only charge AQI user fees for
inspections of commercial conveyances transporting agricultural goods
(table 7). We estimate that between 5 and 20 percent of commercial
conveyances are moving agricultural goods.
Table 7.--Value of User Fees by Type of Conveyance Assuming Only 5 to 20 Percent of Conveyances Would Be Charged
a User Fee (FY 2006)
----------------------------------------------------------------------------------------------------------------
Number of
Conveyance User fee conveyances 5 percent 20 percent
----------------------------------------------------------------------------------------------------------------
Maritime vessel................................. $488.00 1,895 $46,238 $184,952
Truck........................................... 5.25 982,765 257,975 1,031,903
Truck with yearly decals........................ 105.00 90,256 473,844 1,895,376
Rail car........................................ 7.50 827,793 310,422 1,241,690
Commercial aircraft............................. 70.25 69,398 243,760 975,041
---------------------------------------------------------------
Total revenue............................... .............. .............. 1,332,241 5,328,963
----------------------------------------------------------------------------------------------------------------
This option would eliminate the costs to commercial conveyances not
transporting agricultural goods because those entities would not be
required to pay a user fee. As we noted earlier, however, both the
conveyances and packing material that they may be carrying are
potential pest pathways that must be addressed. APHIS experts familiar
with the Canadian border crossings have determined that all commercial
conveyances need to be inspected.
We also considered developing user fees specific to inspections of
air passengers and commercial conveyances from Canada. We chose not to
do so because it is important that user fees be consistent for all
users. Developing user fees for air passengers and commercial
conveyances from Canada that would differ from user fees for air
passengers and commercial conveyances from other places could be
confusing for the public and commercial carriers.
Costs and Benefits
This interim rule will impose costs on commercial vessels,
commercial trucks, commercial railroad cars, commercial aircraft, and
air passengers entering the United States from Canada. While the costs
these entities will have to pay in the form of user fees are readily
apparent, other costs are not so clearly defined. For example, CBP
inspectors will be required to inspect commercial trucks while
maintaining a steady traffic flow. The possibility of border delays
occurring as a result of this interim rule due to increased inspection
activity was considered; however, APHIS and CBP do not foresee that
happening, since CBP will have additional employees and resources to
conduct inspections. The public is invited to comment on the issue of
whether border delays may result because of AQI inspections and the
potential cost of these delays for affected commercial transportation
entities.
While certain entities will incur costs as a result of this rule,
the potential benefits of excluding pests and diseases that could be
introduced through unauthorized imports from Canada may
[[Page 50328]]
be enormous. As discussed previously, AQI inspectors along the U.S./
Canada border have confiscated numerous prohibited fruits and other
articles that can harbor pests and diseases. Interception of infested
hosts helps to minimize the chances that the pests and diseases will
become established in the United States and prevents the costs
associated with eradicating them.
This rule contains no information collection requirements (see
``Paperwork Reduction Act'' below).
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule: (1) Preempts all State and local laws and
regulations that are inconsistent with this rule; (2) has no
retroactive effect; and (3) does not require administrative proceedings
before parties may file suit in court challenging this rule.
Paperwork Reduction Act
This interim rule contains no information collection or
recordkeeping requirements under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
List of Subjects
7 CFR Part 319
Coffee, Cotton, Fruits, Imports, Logs, Nursery stock, Plant
diseases and pests, Quarantine, Reporting and recordkeeping
requirements, Rice, Vegetables.
7 CFR Part 354
Exports, Government employees, Imports, Plant diseases and pests,
Quarantine, Reporting and recordkeeping requirements, Travel and
transportation expenses.
0
Accordingly, we are amending 7 CFR parts 319 and 354 as follows:
PART 319--FOREIGN QUARANTINE NOTICES
0
1. The authority citation for part 319 continues to read as follows:
Authority: 7 U.S.C. 450, 7701-7772, and 7781-7786; 21 U.S.C. 136
and 136a; 7 CFR 2.22, 2.80, and 371.3.
Sec. 319.56-2 [Amended]
0
2. In Sec. 319.56-2, paragraph (c) is amended by adding the words ``,
except that they are subject to the inspection and other requirements
in Sec. 319.56-6'' after the word ``subpart''.
PART 354--OVERTIME SERVICES RELATING TO IMPORTS AND EXPORTS; AND
USER FEES
0
3. The authority citation for part 354 continues to read as follows:
Authority: 7 U.S.C. 7701-7772, 7781-7786, and 8301-8317; 21
U.S.C. 136 and 136a; 49 U.S.C. 80503; 7 CFR 2.22, 2.80, and 371.3.
0
4. Section 354.3 is amended as follows:
0
a. In paragraph (b)(2)(i), by removing the words ``other than in
Canada'' both times they appear.
0
b. In paragraph (b)(2)(iv), by adding the word ``and'' after the
semicolon.
0
c. In paragraph (b)(2)(v), by removing the word ``; and'' and adding a
period in its place.
0
d. By removing paragraph (b)(2)(vi).
0
e. In paragraph (c)(1), by revising the first sentence to read as set
forth below.
0
f. By removing and reserving paragraph (c)(2).
0
g. In the introductory text of paragraph (c)(3)(i), by removing the
words ``from Mexico''.
0
h. By removing and reserving paragraph (d)(2)(i).
0
i. In paragraph (d)(4)(i), by removing the words ``from Mexico''.
0
j. By removing and reserving paragraphs (e)(2)(i) and (f)(2)(i).
0
k. In paragraph (f)(2)(v), by removing the words ``other than Canada''.
0
l. By revising paragraph (f)(3) to read as set forth below.
Sec. 354.3 User fees for certain international services.
* * * * *
(c) * * *
(1) The driver or other person in charge of a commercial truck that
is entering the customs territory of the United States and that is
subject to inspection under part 330 of this chapter or under 9 CFR,
chapter I, subchapter D, must, upon arrival, proceed to Customs and pay
an AQI user fee for each arrival, as shown in the following table: * *
*
* * * * *
(f) * * *
(3) AQI user fees shall be collected under the following
circumstances:
(i) When through tickets or travel documents are issued indicating
travel to the customs territory of the United States that originates in
any foreign country; and
(ii) When passengers arrive in the customs territory of the United
States in transit from a foreign country and are inspected by APHIS or
Customs.
* * * * *
Done in Washington, DC, this 21st day of August 2006.
Bruce Knight,
Under Secretary for Marketing and Regulatory Programs.
[FR Doc. E6-14128 Filed 8-24-06; 8:45 am]
BILLING CODE 3410-34-P