[Federal Register: January 13, 2005 (Volume 70, Number 9)]
[Rules and Regulations]
[Page 2541-2560]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja05-28]
[[Page 2541]]
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Part IV
Department of Homeland Security
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Transportation Security Administration
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49 CFR Part 1572
Hazmat Fee Rule: Fees for Security Threat Assessments for Hazmat
Drivers; Final Rule
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DEPARTMENT OF HOMELAND SECURITY
Transportation Security Administration
49 CFR Part 1572
[Docket No. TSA-2004-19605; Amendment No. 1572-5]
RIN 1652-AA33
Hazmat Fee Rule: Fees for Security Threat Assessments for Hazmat
Drivers
AGENCY: Transportation Security Administration (TSA), Department of
Homeland Security (DHS).
ACTION: Final rule.
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SUMMARY: In response to recent statutory requirements, the
Transportation Security Administration (TSA) is establishing a fee for
security threat assessments that TSA is required to perform on
individuals who apply for or renew a hazardous materials endorsement
for a commercial driver's license. TSA also is establishing a fee for
collection and transmission of fingerprints and biographical
information, which is necessary to perform the security threat
assessments. TSA intends to use fees collected under this rule to pay
for the costs of the security threat assessments and the costs of
collection and transmission of fingerprints and biographical
information.
DATES: This rule is effective January 31, 2005.
ADDRESSES: You may obtain an electronic copy of this final rule using
the Internet by--
(1) Searching the Department of Transportation's electronic Docket
Management System (DMS) web page (http://dms.dot.gov/search); (2) Accessing the Government Printing Office's web page at http://www.access.gpo.gov/su_docs/aces/aces140.html
; or
(3) Visiting TSA's Law and Policy web page at http://www.tsa.dot.gov/public/index.jsp
.
In addition, copies are available by writing or calling the
individual in the For Further Information Contact section. Make sure to
identify the docket number of this rulemaking.
You may also review the public docket in person in the Docket
Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The Docket Office is on the plaza level of the Department of
Transportation.
FOR FURTHER INFORMATION CONTACT: For payment eligibility questions,
such as who is required to pay the fees: George J. Petersen, Hazmat
Program Office, TSA-19, Transportation Security Administration
Headquarters, 601 South 12th Street, Arlington, VA 22202; telephone:
(571) 227-2215; e-mail George.J.Petersen@dhs.gov.
For billing questions: Randall Fiertz, Office of Revenue, TSA-14,
Transportation Security Administration Headquarters, 601 South 12th
Street, Arlington, VA 22202; telephone: (571) 227-2323; e-mail:
TSA-Fees@dhs.gov.
For legal questions: Dion Casey, Office of Chief Counsel, TSA-2,
Transportation Security Administration Headquarters, 601 South 12th
Street, Arlington, VA 22202; telephone: (571) 227-2663; e-mail:
Dion.Casey@dhs.gov.
SUPPLEMENTARY INFORMATION:
Abbreviations and Terms Used in This Document
ATF--Bureau of Alcohol, Tobacco, Firearms, and Explosives
AAMVA--Association of American Motor Vehicle Administrators
ATSA--Aviation and Transportation Security Act
BLS--Bureau of Labor Statistics
BTS--Bureau of Transportation Statistics
CDL--commercial driver's license
CDLIS--Commercial Drivers License Information System
CFR--Code of Federal Regulations
CHRC--criminal history records check
DHS--Department of Homeland Security
DMV--Department of Motor Vehicles
DOT--Department of Transportation
FBI--Federal Bureau of Investigation
FMCSA--Federal Motor Carrier Safety Administration
HME--hazardous materials endorsement
ICE--Bureau of Immigration and Customs Enforcement
IFR--interim final rule
NPRM--notice of proposed rulemaking
PRA--Paperwork Reduction Act
SEA--Safe Explosives Act
TSA--Transportation Security Administration
I. Background
On September 11, 2001, several terrorist attacks were perpetrated
against the United States. Those attacks resulted in catastrophic human
casualties and property damage. In response to those attacks, Congress
passed the Aviation and Transportation Security Act (ATSA), which
established the Transportation Security Administration (TSA).\1\ TSA
was created as an agency within the Department of Transportation (DOT),
operating under the direction of the Under Secretary of Transportation
for Security. As of March 1, 2003, pursuant to the Homeland Security
Act of 2002, TSA became an agency of the Department of Homeland
Security (DHS), and the functions of the Under Secretary were
ultimately assigned to the Assistant Secretary of Homeland Security for
TSA.\2\ TSA continues to possess the statutory authority that ATSA
established. ATSA granted to the Assistant Secretary responsibility for
security in all modes of transportation.\3\
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\1\ Pub. L. 107-71, November 19, 2001, 115 Stat. 597.
\2\ Section 403 of Pub. L. 107-296, November 25, 2002, 116 Stat.
2135, codified at 6 U.S.C. 203.
\3\ 49 U.S.C. 114(d).
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ATSA authorizes TSA to identify individuals who pose a threat to
transportation security.\4\ This authority includes conducting
background checks on individuals in the transportation industries. The
background checks may include collecting fingerprints to determine if
an individual has a criminal conviction or the use of a name and other
identifying characteristics to determine whether an individual has
committed international criminal offenses or immigration offenses.
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\4\ 4 49 U.S.C. 114(f)(2).
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Based on his functions, duties, and powers, the Assistant Secretary
is situated to determine whether sufficient cause exists to believe
that an individual poses a threat to transportation security.
A. USA PATRIOT Act
The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
was enacted on October 25, 2001.\5\ Section 1012 of the USA PATRIOT Act
amended 49 U.S.C. Chapter 51 by adding a new section 5103a titled,
``Limitation on issuance of hazmat licenses.''
Section 5103a(a)(1) provides:
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\5\ Pub. L. 107-56, October 25, 2001, 115 Stat. 272.
A State may not issue to any individual a license to operate a
motor vehicle transporting in commerce a hazardous material unless
the Secretary of Transportation has first determined, upon receipt
of a notification under subsection (c)(1)(B), that the individual
does not pose a security risk warranting denial of the license.
Section 5103a(a)(2) subjects license renewals to the same
requirements.
Section 5103a(c) requires the Attorney General, upon the request of
a State in connection with issuance of a hazardous materials
endorsement (HME) for a commercial driver's license (CDL), to carry out
a background records check of the individual applying for the
[[Page 2543]]
endorsement and, upon completing the check, to notify the Secretary of
Transportation of the results. The Secretary of Transportation then
determines whether the individual poses a security threat warranting
denial of the endorsement. The Secretary of Transportation delegated
the responsibilities of Section 5103a to the Under Secretary of
Transportation for Security.\6\ Pursuant to section 403 of the Homeland
Security Act of 2002, these responsibilities transferred to the
Secretary of Homeland Security.\7\ The Secretary then delegated these
responsibilities to the Assistant Secretary of Homeland Security for
TSA.
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\6\ 68 FR 10988 (March 7, 2003).
\7\ Pub. L. 107-296, November 25, 2002.
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The background records check must consist of: (1) A check of the
relevant criminal history databases; (2) in the case of an alien, a
check of the relevant databases to determine the status of the alien
under U.S. immigration laws; and (3) as appropriate, a check of the
relevant international databases through Interpol-U.S. National Central
Bureau or other appropriate means.\8\ As explained in further detail
below, TSA is performing a more comprehensive check than required by
Section 5103a, including a review of pertinent databases to determine
whether an individual poses a security threat. TSA has the authority to
perform such comprehensive checks under ATSA.\9\
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\8\ The National Crime Prevention and Privacy Compact (Compact),
codified at 42 U.S.C. 14616, establishes the Compact Council, which
is authorized to establish legal criteria governing criminal history
record checks for non-criminal justice purposes. The Compact Council
is composed of 15 members, appointed by the Attorney General. As a
general rule, the Compact requires the submission of fingerprints
for purposes of gaining access to criminal history databases for
non-criminal justice purposes.
\9\ See 49 U.S.C. 114(f).
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B. Safe Explosives Act
Congress enacted the Safe Explosives Act (SEA) on November 25,
2002.\10\ Sections 1121-1123 of the SEA amended section 842(i) of title
18, United States Code, by adding several categories to the list of
persons who may not lawfully ``ship or transport any explosive in or
affecting interstate or foreign commerce'' or ``receive or possess any
explosive which has been shipped or transported in or affecting
interstate or foreign commerce.'' Prior to the amendment, 18 U.S.C.
842(i) prohibited the transportation of explosives by any person under
indictment for or convicted of a felony, a fugitive from justice, an
unlawful user or addict of any controlled substance, and any person who
had been adjudicated as a mental defective or committed to a mental
institution. The amendment added three new categories to the list of
prohibited persons: aliens (with certain limited exceptions), persons
dishonorably discharged from the armed forces, and former U.S. citizens
who have renounced their citizenship. Individuals who violate 18 U.S.C.
842(i) are subject to criminal prosecution.\11\ These incidents are
investigated by the Bureau of Alcohol, Tobacco, Firearms, and
Explosives (ATF) of the Department of Justice and referred, as
appropriate, to the United States Attorneys.
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\10\ Pub. L. 107-296, November 25, 2002, 116 Stat. 2280,
codified at 18 U.S.C. 842.
\11\ The penalty for violation of 18 U.S.C. 842(i) is up to ten
years imprisonment and a fine of up to $250,000.
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However, 18 U.S.C. 845(a)(1) provides an exception to section
842(i) for ``any aspect of the transportation of explosive materials
via railroad, water, highway, or air which are regulated by the United
States Department of Transportation and agencies thereof, and which
pertains to safety.'' Under this exception, if DOT regulations address
the transportation security issues of persons engaged in a particular
aspect of the safe transportation of explosive materials, then those
persons are not subject to prosecution under 18 U.S.C. 842(i) while
they are engaged in the transportation of explosives in commerce.\12\
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\12\ Explosives are among the categories of substances that are
defined as hazardous materials under DOT regulations. See 49 CFR
383.5 and 173.50.
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This exception was triggered when TSA issued an interim final rule
on May 5, 2003 (May 5 IFR), discussed below, in coordination with the
Federal Motor Carrier Safety Administration (FMCSA) and Research and
Special Programs Administration (RSPA), agencies within the DOT.
C. The May 5, 2003 Interim Final Rule
To comply with the mandates of the USA PATRIOT Act, and to trigger
the exception in 18 U.S.C. 845(a)(1) for the transportation of
explosives, TSA issued an interim final rule in coordination with FMCSA
and RSPA on May 5, 2003.\13\ The May 5 IFR established security threat
assessment standards for determining whether an individual poses a
security threat warranting denial of an HME. Under the May 5 IFR, TSA
determined that an individual poses a security threat if he or she: (1)
Is an alien (unless he or she is a lawful permanent resident) or a U.S.
citizen who has renounced his or her U.S. citizenship; (2) is wanted or
under indictment for certain felonies; (3) was convicted or found not
guilty by reason of insanity of any of certain felonies in military or
civilian court within the past 7 years or was released from
incarceration for committing any of the specified felonies within the
past 5 years; (4) has been adjudicated as a mental defective or
involuntarily committed to a mental institution; or (5) is considered
to pose a security threat based on a review of pertinent databases.
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\13\ 68 FR 23852. The rule was codified at 49 CFR parts 1570 and
1572. On the same date, FMCSA issued a companion rule prohibiting
States from issuing, renewing, transferring, or upgrading a CDL with
an HME unless TSA has first determined that the individual applying
for the HME does not pose a security threat warranting denial of the
HME. 68 FR 23844. Because FMCSA is a part of DOT, and because the
FMCSA and TSA rules regulate the transport of hazardous materials,
including explosives, with regard to safety, the exception in 18
U.S.C. 845(a)(1) was triggered.
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The May 5 IFR also established conditions under which an individual
who has been determined to be a security threat may appeal the
determination, and the procedures that TSA follows when considering an
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appeal.\14\ In addition, the May 5 IFR provided a waiver process for
those individuals who otherwise could not obtain an HME due to a
disqualifying felony conviction or mental defect.\15\ Finally, the May
5 IFR prohibited an individual from holding, and a State from issuing,
renewing, or transferring an HME for a driver unless the individual has
met the TSA security threat assessment standards or has been granted a
waiver.\16\ The May 5 IFR was to take effect in November 2003.\17\
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\14\ Under the May 5 IFR, an individual could appeal a
determination if the individual believes that he or she does not
meet the criteria warranting revocation. For example, an individual
could appeal because he or she believes the criminal record to be
incorrect, or if the individual's conviction for a disqualifying
criminal offense was pardoned, expunged, or overturned on appeal.
\15\ Such individuals were permitted to apply for a waiver if
they could demonstrate that they are rehabilitated or are no longer
a danger to themselves or others.
\16\ In the interim final rule issued on November 24, 2004
(Hazmat Program Rule), discussed herein, TSA amended the May 5 IFR
to permit a driver who successfully completes the TSA security
threat assessment and receives an HME in one State to transfer the
HME to another State without undergoing another TSA security threat
assessment until the date the HME would expire in the issuing State.
For instance, if the renewal period in Virginia is once every 4
years, a driver who obtains his HME in Virginia in 2005 and moves to
West Virginia in 2006, where the renewal period is once every 5
years, is required to undergo a new security threat assessment in
2009 in West Virginia, rather than within 30 days of moving into
West Virginia or in 2010. FMCSA's regulations require renewing the
HME at least once every five years, so drivers across the country
have nearly identical renewal periods. (49 CFR 383.141(d)). Thus,
there is no risk that any driver will go more that five years
without a security threat assessment.
\17\ An exception to this effective date was a provision in the
May 5 IFR that required any holder of an HME who had committed a
disqualifying offense to surrender the HME to the State by September
2003.
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In the May 5 IFR, TSA requested and received comments from the
States, labor organizations, and representatives of the trucking
industry. In addition, TSA held working group sessions with the States
to discuss potential fingerprinting systems that would achieve the
statutory requirements, but would not adversely impact the States.
Based on the comments received and the working sessions with the
States, TSA issued a technical amendment in November 2003 to extend the
date on which fingerprints and applicant information must be
submitted.\18\ A majority of the States could not implement the program
by November, and TSA was not able to set the fee levels through
rulemaking to cover TSA's implementation costs.\19\ This technical
amendment required the States either to submit fingerprints and
applicant information by April 1, 2004, or request an extension of time
and produce a fingerprint collection plan by April 1, 2004. All States
were required to have the fingerprint collection program in place as of
December 1, 2004.
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\18\ 68 FR 63033 (November 7, 2003).
\19\ Congress did not grant TSA the statutory authority required
for rulemaking to set and collect fees for costs related to
background checks and credentialing until October 1, 2003, per
section 520 of the 2004 Homeland Security Appropriations Act (Pub.
L. 108-90, October 1, 2003, 117 Stat. 1137).
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In response to the November 2003 technical amendment, a majority of
the States asked for an extension of time, because they were not ready
to begin collecting applicant information or fingerprints by April 1,
2004. Therefore, on April 6, 2004, TSA published a final rule removing
the April 1 date and establishing January 31, 2005, as the date on
which States must begin complying with the requirements.\20\
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\20\ 69 FR 17969 (April 6, 2004).
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D. Hazmat Program Rule
On November 24, 2004, TSA issued an interim final rule, titled
``Security Threat Assessment for Individuals Applying for a Hazardous
Materials Endorsement for a Commercial Driver's License'' RIN 1652-AA17
(the Hazmat Program Rule).\21\ In the Hazmat Program Rule, TSA made
several amendments to the May 5 IFR. TSA also required States to choose
between the following two fingerprint and applicant information
collection options: (1) The State collects and transmits the
fingerprints and applicant information of individuals who apply for or
renew an HME; or (2) the State allows an entity approved by TSA (TSA
agent) to collect and transmit the fingerprints and applicant
information of such individuals. TSA required States to notify TSA in
writing of their choice by December 27, 2004. TSA noted that if a State
did not notify TSA in writing of its choice by that date, TSA would
assume that the State had chosen the second option and would work with
the State to establish a system for a TSA agent to collect fingerprints
and applicant information in the State. The Hazmat Program Rule
requires a State to operate under the option it chooses until at least
February 1, 2008.
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\21\ 69 FR 68720 (November 24, 2004).
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Seventeen States opted to collect and transmit fingerprints and
applicant information. The remaining 34 States opted to allow a TSA
agent to perform those services.\22\ Information on which States have
chosen which option is available on the TSA Web site at http://www.tsa.gov/public/interapp/editorial/editorial_1735.xml
.
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\22\ TSA notes that as defined in the Hazmat Program Rule, the
term ``State'' includes the District of Columbia. Thus, for purposes
of the hazmat program there are 51 States.
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E. Fee Authority
On October 1, 2003, Congress enacted legislation directing TSA to
collect reasonable fees to cover the costs of providing credentialing
and background investigations in the transportation field, including
implementation of the USA PATRIOT Act requirements.\23\ Section 520 of
the Department of Homeland Security Appropriations Act, 2004 (2004
Appropriations Act) authorizes TSA to collect fees to pay for the
following costs: Conducting or obtaining a criminal history records
check (CHRC); reviewing available law enforcement databases, commercial
databases, and records of other governmental and international
agencies; reviewing and adjudicating requests for waivers and appeals
of TSA decisions; and any other costs related to performing the
background records check or providing the credential.
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\23\ Department of Homeland Security Appropriations Act, 2004,
Section 520, Pub. L. 108-90, October 1, 2003, 117 Stat. 1156 (6
U.S.C. 469) (2004 Appropriations Act).
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Section 520 of the 2004 Appropriations Act mandates that any fee
collected be available for expenditure only to pay for the costs
incurred in providing services in connection with performing the
background check or providing the credential. The fee must remain
available until expended.
F. Fee NPRM
On November 10, 2004, TSA issued a notice of proposed rulemaking
(Fee NPRM) to propose a fee for the security threat assessments that
TSA is required to perform on individuals who apply for or renew an HME
for a CDL (Threat Assessment Fee).\24\ The Fee NPRM also proposed a fee
for the collection and transmission of fingerprints and other HME
applicant information necessary to perform the security threat
assessments (Information Collection Fee). The Fee NPRM also proposed
that HME applicants remit the fee required by the Federal Bureau of
Investigation (FBI) for performing the CHRC on behalf of government
agencies for non-government applicants. In addition, the Fee NPRM
proposed procedures for States and entities approved by TSA to collect,
handle, and remit to TSA those fees. TSA requested public comment on
all aspects of the Fee NPRM.
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\24\ 69 FR 65332, November 10, 2004.
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[[Page 2545]]
II. Response to Public Comments
TSA received approximately 25 comments on the Fee NPRM from
individual commercial drivers, labor organizations, trucking industry
associations, State Departments of Motor Vehicles, associations
representing the agricultural, chemical, explosives, and petroleum
industries, and associations representing State governments. The
discussion below groups the comments by issue.
A. Responsibility for the Fees
Labor organizations and individual drivers commented that drivers
should not bear the full cost of the threat assessments conducted under
the Hazmat Program Rule. They noted that the statute authorizing TSA to
collect fees for threat assessments (Section 520 of the 2004
Appropriations Act) does not require TSA to collect the fees from the
driver. They argued that the fees should be divided among all of the
affected parties, including employers and the Federal Government.
TSA notes that the May 5 IFR specified that the driver or the
driver's employer was responsible for paying the fee charged by the
entity that collected the driver's fingerprints and generated the
driver's criminal history.\25\ The Hazmat Program Rule contains a
similar provision specifying that the HME applicant or the applicant's
employer is responsible for the TSA and FBI fees.\26\ The Hazmat
Program Rule provides that the driver or the driver's employer is
responsible for paying the required fees. Some commenters noted that a
commercial driver's employer typically pays the commercial driver's
licensing fees. Whether the driver or the driver's employer pays the
fees is a matter that must be resolved between drivers and their
employers.
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\25\ 49 CFR 1572.5(b)(2)(iii). See also the discussion in the
preamble of the May 5 IFR. 68 FR at 23859 (May 5, 2003).
\26\ 49 CFR 1572.11(d)(3). See also the discussion in the
preamble of the Hazmat Program Rule. 69 FR at 68732 (November 24,
2004).
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As for the Federal Government subsidizing the fees, when Congress
enacted Sec. 520 of the 2004 Appropriations Act it expressed its intent
that TSA seek user fee funding to cover the costs of providing
credentialing and background investigations in the transportation
field. The hazmat program is an example of a credentialing and
background investigation program that was intended to be supported by
user fees. That said, TSA has subsidized the program to some extent by
bearing the costs of the name-based threat assessments for hazmat
drivers that TSA performed prior to full implementation of the hazmat
program. Moreover, TSA notes that certain overhead costs that directly
support the program, such as those for human resources, financial
reporting and accounting, and TSA executive management support, have
not been included in the user fees.
B. Amount of the Fees
Several commenters stated that the estimated total fee range of
$83-$103 is unreasonable. They noted that the proposed fees are
significantly higher than fees for security threat assessments in other
transportation-related programs, such as the security threat
assessments TSA proposed for individuals requiring unescorted access to
air cargo (air cargo handlers) ($39) \27\ and drivers seeking
certification under the Free and Secure Trade (FAST) program ($50).
They questioned why TSA is requiring the trucking industry to absorb
higher fees.
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\27\ 69 FR 65258 (November 10, 2004).
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TSA notes that while there are some similarities to other Federal
Government background check programs, each program is unique.
Differences in cost arise due to the legal requirements associated with
certain background checks as well as the differences in how the agency
requiring the background check is able to collect fingerprints and
other information needed from the population being checked. There are
also differences in the legislative authorities and appropriations
allocated to agencies for supporting the programs. These differences
determine whether the programs are totally funded through appropriated
funding, partially funded through user fees, or fully funded through
user fees.
As noted in the Fee NPRM, the total proposed fee range of $83 to
$103 per applicant for the hazmat driver threat assessment included
three parts. Part one was for the collection and transmission of
fingerprints and other applicant information (Information Collection
Fee). This service will either be provided directly by individual
States or by a TSA agent who will be located at various sites within
each State. If a TSA agent provided this service, the proposed
Information Collection Fee was estimated at $25-$45. The Fee NPRM
explained that if a State provides this service, the fee for this
service could be higher or lower than the proposed $25-$45 range. The
Fee NPRM explained that the final fee level for information collection
and transmission would depend primarily on the volume of applicants
that the TSA agent serves.
Part two of the proposed fee range was $36 for the threat
assessment (Threat Assessment Fee). In accordance with the mandates of
the USA PATRIOT Act and the SEA, the threat assessment consists of TSA
reviewing the information collected and determining whether the
individual poses a security threat. The Threat Assessment Fee also
included costs associated with appeals and waivers.
Part three of the proposed fee range was the FBI fee for conducting
a fingerprint-based criminal history records check (FBI Fee). This fee
is set by the FBI and is currently at $22, or $24 if a State submits
the fingerprints to the FBI.
As noted earlier, other background check programs have different
Congressionally-mandated requirements and thus have different costs.
For example, the proposed air cargo program would require air cargo
handlers to undergo one of the following: A name-based security threat
assessment; or, if otherwise required, a fingerprint-based CHRC or
another TSA-approved security threat assessment.\28\ The hazmat program
requires drivers to undergo both a fingerprint-based CHRC and a name-
based security threat assessment, as well as checks of their mental
capacity and citizenship or immigration status (emphasis added).\29\
These additional checks were required under the USA PATRIOT Act and the
SEA. In addition, the proposed air cargo program does not contain
waiver provisions, while the hazmat program does. TSA believes that the
waiver procedures are an important part of the hazmat program; these
procedures recognize that individuals who have committed a
disqualifying crime may be rehabilitated to the point that they may be
trusted to transport hazmat. The costs associated with adjudicating
waiver requests are a large part of the costs of the hazmat program.
For these reasons, the costs associated with the hazmat program are
significantly higher than the costs associated with the proposed
security threat assessments for air cargo handlers.
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\28\ See 49 CFR 1544.228(a), 1546.213(a), and 1548.15(a). Under
the proposed air cargo program an air cargo handler would have to
undergo the name-based threat assessment, and pay the proposed $39
fee, only if he or she was not required to undergo a fingerprint-
based CHRC or another security threat assessment approved by TSA.
The proposed $39 fee would cover only the cost of the name-based
security threat assessment.
\29\ See 49 CFR 1572.5(c).
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One commenter suggested that TSA charge separate fees to HME
applicants
[[Page 2546]]
who use the appeal or waiver procedures. Making this change would
require creating a new process. TSA is not establishing a separate fee
collection process for appeals and waivers at this time. TSA may do so
in the future, if experience with the hazmat program suggests that
separating these fees would be appropriate.
Another example is the FAST program, which involves efforts by the
United States, Canada, and Mexico to improve the efficiency of
screening and clearing commercial traffic at the shared borders. The
FAST program is a voluntary initiative operated by U.S. Customs and
Border Protection (CBP) that provides an expedited customs and
immigration process at the borders for approved truck drivers. To be
approved for the FAST program, a driver must be admissible to the U.S.
and must not have been convicted of a criminal offense or been found in
violation of customs or immigration law. The driver must submit
fingerprints and other information, such as proof of citizenship and
work history. Drivers who are not approved for the FAST program are
required to follow normal CBP procedures at the borders.
The $50 fee for the FAST program is an application fee, rather than
a threat assessment fee. Drivers must also pay the FAST fee each time
any information on the FAST card must be changed, or if the driver
loses the card and requires a replacement. In addition, CBP uses
appropriated funding to subsidize the costs of conducting the required
background checks. As noted above, in section 520 of the 2004
Appropriations Act, Congress directed TSA to fund credentialing and
background investigation programs, such as the hazmat program, with
user fees.
C. Infrastructure Costs
Labor organization and trucking industry associations objected to
the inclusion of infrastructure costs in the fee structure. They noted
that the Threat Assessment Fee structure includes the costs of creating
and maintaining databases, disaster recovery, and other start-up costs.
They argued that these costs should not be passed along to drivers
because they are not part of performing the security threat assessment
or providing the HME. They suggested that the Federal Government should
absorb these costs. Finally, some commenters objected to paying for
infrastructure that TSA has stated may be used for other programs.
Section 520 of the 2004 Homeland Security Appropriations Act grants
TSA the authority to recover infrastructure and other start-up costs
necessary to perform background checks and provide credentialing-
related services. Section 520 further directs that fees must be
``reasonably related to the costs of providing services in connection
with the activity or item for which the fee is charged.'' \30\
Recoverable costs via user fees costs may include both the costs of
accessing various law enforcement, governmental and commercial
databases, adjudication costs and ``any other costs related to
providing the credential or performing the background record check.''
\31\ Thus, TSA's user fee may include infrastructure and other start-up
costs required to implement TSA's hazmat driver security threat
assessment program. TSA has chosen not to include certain general
overhead costs that could be applied to calculate the agency's full
costs of implementing the program. As previously stated, these costs
include costs associated with human resources, financial reporting and
accounting, and TSA executive management support.
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\30\ Department of Homeland Security Appropriations Act, 2004,
section 520, Pub. L. 108-90, October 1, 2003, 117 Stat. 1156 (6
U.S.C. 469) (2004 Appropriations Act).
\31\ Id.
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With respect to the possible future use of the hazmat driver
program infrastructure for other programs, if TSA implements other
background check programs that leverage the infrastructure that was
created for the hazmat program, TSA will re-evaluate its hazmat user
fees and adjust them accordingly.
D. Cost Estimates
Several commenters stated that TSA likely underestimated the threat
assessment costs because the agency did not include costs associated
with appeals and waivers. They also noted that allowing a private
entity to collect fingerprints and applicant information on behalf of
TSA (TSA agent) or the States (an entity that contracts with a State
that chooses to collect fingerprints and applicant information)
necessarily implies that the agent will make a profit. They argued that
Section 520 of the 2004 Appropriations Act does not permit TSA to
include private profit costs as part of the costs recoverable by fees.
TSA notes that the threat assessment costs estimated in the Fee
NPRM did include the estimated costs to TSA associated with handling
appeals and requests for a waiver. Moreover, in the Regulatory
Evaluation for the Hazmat Program Rule, TSA estimated the likely cost
to drivers in terms of time for both the HME threat assessment process
and the appeal/waiver process for those drivers who receive
notification of disqualification. Thus, the threat assessment costs
estimated in the Fee NPRM were not understated.
With regard to the legality and appropriateness of including
contractor profits as part of TSA's costs for fee recovery, TSA notes
that Sec. 15.404-4 of title 48 of the Federal Acquisition Regulation
(FAR) specifically allows profit for contractors providing goods and
services to the Government, subject to Federal cost accounting
standards. As such, contractor cost proposals usually contain a profit
component in the rates or a fee, and the Government contracting officer
must determine that all the cost elements, including fee, in the
proposal are fair and reasonable before awarding a contract. In TSA's
contract award process to the TSA agent for the Information Collection
Fee, TSA has determined the contractor's charges to be fair and
reasonable. Costs are determined to be fair and reasonable by
evaluating several factors such as the Government's Independent Cost
Estimate (ICE) developed for evaluating this activity, the costs for
similar services, including historical costs, and the comparison of
costs in various proposals under a competitive procurement award
process. Thus, it is appropriate that TSA's costs to provide background
check related services under Sec. 520 of the 2004 Homeland Security
Appropriations Act (Pub. L. 108-90), include contractor profit/fee as
provided under both the FAR and the Transportation Security
Administration's Acquisition Management System.
E. Missing Criminal Prosecution Disposition Information
States and State associations commented that States will have to
play a role in providing to TSA information regarding the disposition
of criminal prosecutions that may be missing from FBI records. They
noted that FBI records of State criminal offenders are often
incomplete, particularly with regards to disposition information. They
stated that as a result, TSA will need to call upon State courts and
criminal justice agencies to provide that information, which could
impose considerable burdens on States. They argued that TSA should
compensate States for providing this information.
The Hazmat Program Rule provides HME applicants an opportunity to
submit evidence of the final disposition of a criminal case in those
instances where disposition information is missing or unresolved. Thus,
the burden of demonstrating that an open offense or warrant is not
disqualifying is placed on
[[Page 2547]]
the HME applicant rather than State authorities. TSA recognizes there
may be instances in which an applicant may seek information on an open
disposition by turning to State agencies for assistance, and that this
may result in costs to State agencies in looking up old records for
missing dispositions. Nothing in the Hazmat Program Rule or this final
rule prevents States from recovering those costs from HME applicants,
if they are authorized to do so under their own State law.
F. Impact of Fees on Drivers and Small Businesses
Several commenters stated that the total amount of the fees would
have a substantial negative impact on the availability of drivers
qualified to transport hazardous materials. They argued that the
trucking industry is already experiencing a shortage of qualified
drivers, and that the proposed fees would exacerbate that problem. They
also argued that any substantial reduction in the number of qualified
drivers will have a detrimental impact on the trucking industry as a
whole, and an even more pronounced impact on small businesses
(especially small rural businesses) because small businesses are less
able to reimburse drivers for the cost of obtaining an HME. They
believe that TSA has failed to meet its obligation under the Regulatory
Flexibility Act (RFA) to ensure that small businesses are not
substantially burdened by Federal regulations.
TSA considered all of the requirements of the RFA in this
rulemaking. TSA responds to comments on compliance with the RFA in the
Regulatory Flexibility Determination section below and in the separate
Regulatory Analysis document provided to the docket. With respect to
this specific comment, TSA notes that the expected reduction in HME
holders is not likely to have a significant impact on businesses that
depend on qualified hazmat drivers. It is anticipated that most of the
drivers who will allow their HME to lapse as a result of this final
rule rarely transport hazmat. See Section V. ``Hazmat Driver
Population'' of the final rule for more discussion of the anticipated
reduction in HME holders.
G. Allowing States To Collect Fingerprints and Applicant Information
Industry associations requested that TSA reconsider its decision to
allow States to collect fingerprints and applicant information, and to
charge a fee for those services. They noted that States, under State
fee authority, could charge higher fees for those services than the
Information Collection Fee proposed in the Fee NPRM. They argued that
there is no security reason to allow for such State participation in a
Federal program. They also claimed that a nationwide Federal
fingerprint and applicant information collection system would be less
expensive than the proposed joint Federal-State collection system
because a higher volume of applicants would reduce costs. They
suggested that TSA establish only one fee for fingerprint and
information collection nationwide.
TSA notes that although the hazmat program is mandated by Federal
law, the State is the licensing body for drivers who are State
residents, and the State has both authority and a clear interest in
licensing standards. Regulation of commercial drivers has traditionally
been a combined State-Federal effort. While the Federal Government sets
minimum standards, including through Federal Motor Carrier Safety
Administration (FMCSA) and TSA rules, States are responsible for most
activities in determining that applicants qualify, and for issuing
licenses.
TSA considers States to be essential partners in the hazmat
program, and some States have infrastructure in place that can help
implement the hazmat program and a desire to do so. Because States want
to perform this function, and to preserve strong State-Federal
relationships in this area, TSA will not prevent States from choosing
to collect fingerprints and applicant information in accordance with
the Hazmat Program Rule.
H. Performance Standards for TSA Agents
Industry associations commented that an HME applicant's costs of
providing information and fingerprints to a TSA agent could vary
depending on the proximity of the agent to the applicants, the agent's
hours of operation, and the tolerance allowed for agent error. They
argued that this could cause delays in the HME application approval
process, which would negatively impact the trucking industry as well as
industries that rely on the trucking industry to supply their
customers. They suggested that TSA establish performance standards for
TSA agents collecting fingerprints and applicant information.
TSA is mindful of the need to ensure adequate performance standards
and oversight in selecting appropriate locations to provide, to the
extent possible, a consistent application of service in rural and urban
areas. In order to establish the number and type of sites, TSA will
take into consideration the overall population, density of the HME
applicant population, geographic dispersion throughout the State, and
the urban-rural mix in the State. TSA has developed performance
standards for the TSA agent that will collect fingerprints and
applicant information in those States that opt for a TSA agent to
provide those services, and those performance standards are
incorporated into the contract between TSA and the agent. TSA will
monitor the program throughout the duration of the contract and
determine the need for additional or varied collection sites should the
need for service improvement be identified.
I. Hazmat Program Rule
Many of the comments to the Fee NPRM discussed aspects of the
Hazmat Program Rule. For example, trucking industry associations
encouraged TSA to ensure that hazmat drivers not be required to undergo
multiple threat assessments for different programs, such as the
Transportation Worker Identification Credential (TWIC). Labor
organizations commented that TSA should require Mexican and Canadian
drivers to undergo the same security threat assessments as U.S.
drivers. State associations recommended that the security threat
assessment include a check of State criminal history records.
Although these comments are directed at aspects of the Hazmat
Program Rule, TSA is providing preliminary responses in this final
rule. TSA may reexamine these issues when promulgating the final Hazmat
Program Rule.
With respect to the concern that hazmat drivers may be subjected to
multiple threat assessments, TSA recognizes that there may be
overlapping security threat assessment and identification verification
requirements for certain transportation workers and is making every
effort to minimize duplication. TSA noted this in the preamble of the
Hazmat Program Rule, particularly concerning drivers who transport
hazardous material for the defense and nuclear industries. TSA invited
comment on the issue in the Hazmat Program Rule, and stated that the
agency plans to implement an acceptance process for comparable threat
assessments that are completed by other agencies or for other purposes.
TSA notes that the TWIC program is intended to implement the threat
assessment process for workers in all modes of transportation who need
unescorted access to secure areas of transportation facilities. TSA
plans that once a driver has successfully completed the TSA security
threat assessment for an HME, and holds a
[[Page 2548]]
current HME, the driver will not be required to undergo a new security
threat assessment if TSA requires drivers to obtain a TWIC. TSA will,
as appropriate, coordinate with other programs that may affect hazmat
drivers to minimize the duplication of threat assessments.
With respect to the suggestion that TSA require foreign drivers to
undergo the same security threat assessments as U.S. drivers, TSA
regulations at 49 CFR 1572.201 require Canadian drivers who transport
explosives from Canada to the U.S. to submit certain information to
Transport Canada, which conducts a background check and determines
whether the drivers are properly licensed. Drivers who are not listed
by Transport Canada as completing these steps are not authorized to
enter the U.S. with explosives shipments. Also, TSA checks these names
against certain watch lists to determine whether they may pose a threat
to security.
TSA will address threat assessments for hazmat drivers from Canada
and Mexico in the future. Consultations are ongoing between U.S. and
Canadian officials, and DHS intends to begin discussions on this issue
with the appropriate agencies in Mexico.
With respect to the suggestion that the TSA threat assessment
include a check of State criminal history records, TSA notes that it
would be difficult and costly for TSA to conduct an effective search of
State criminal history records. Commercial drivers often travel from
State to State, making it difficult for TSA to know which State
criminal history records to search. TSA also notes that searching State
records would add significantly to the cost of the program, which would
necessitate an increase in the Threat Assessment Fee. However, TSA
notes that the Hazmat Program Rule does not prevent a State from
searching its own criminal history records. If a State checks its
criminal history records and forward any pertinent information to TSA
during an applicant's security threat assessment, TSA will use the
information. TSA encourages States to provide such information.
J. Relationship to the TWIC Program
Industry associations and labor organizations suggested that TSA
conduct only name-based security threat assessments without
fingerprint-based CHRCs, or defer CHRCs until the TWIC requirements are
implemented.
TSA considered conducting only name-based threat assessments.
However, the USA PATRIOT Act mandates that TSA conduct a check of
relevant criminal history databases, and TSA believes that a CHRC adds
value to a security threat assessment. Thus, TSA believes that it is
important to conduct CHRCs as part of the hazmat program security
threat assessment.
TSA must require drivers to submit their fingerprints, because, as
noted above, the Compact generally requires fingerprints for the
purpose of gaining access to criminal history databases for non-
criminal justice purposes. However, as the security programs
administered by TSA mature, TSA intends to leverage resources and take
other steps in an effort to ease the costs and burdens of the programs
while maintaining a high level of security.
Commenters were concerned that the TWIC requirements would be
duplicative, that is, that drivers who were approved under the hazmat
program would need to undergo another threat assessment under the TWIC
program. TSA has determined that drivers who are approved under the
hazmat program will not have to submit to another threat assessment
under the TWIC program. TSA is also considering other alternatives to
reduce the time and/or cost of the hazmat threat assessment.
III. Summary of the Final Rule
To comply with the mandates of Section 520 of the 2004
Appropriations Act, as well as the mandates of the USA PATRIOT Act and
the SEA, in this final rule (final rule or Hazmat Fee Rule) TSA is
establishing user fees for individuals who apply for or renew an HME,
and thus are required to undergo a security threat assessment in
accordance with 49 CFR part 1572. TSA is establishing the following two
new user fees, in addition to the FBI Fee \32\ for performing the CHRC
on behalf of government agencies for non-governmental applicants: (1) A
fee to cover TSA's costs of performing and adjudicating security threat
assessments, appeals, and waivers (Threat Assessment Fee); and (2) a
fee to cover the costs of collecting and transmitting fingerprints and
applicant information (Information Collection Fee).
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\32\ The FBI is authorized to establish and collect fees to
process fingerprint identification records and name checks for non-
criminal justice, non-law enforcement employment and licensing
purposes that may be used for salaries and other expenses incurred
in providing these services. See title II of Pub. L. 101-515,
November 5, 1990, 104 Stat. 2112, codified in a note to 28 U.S.C.
534.
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Under the final rule, a State that opts to collect fingerprints and
applicant information itself in accordance with the Hazmat Program Rule
is required to: (1) Collect and remit to TSA the Threat Assessment Fee
in accordance with the requirements of the final rule; and (2) collect
and remit to the FBI its user fee (FBI Fee) to perform a CHRC in
accordance with established FBI procedures. Nothing in the final rule
prohibits the State, under its own fee authority, from collecting a fee
determined by the State to cover its costs of collecting and
transmitting fingerprints and applicant information. TSA notes that a
State may not collect a fee for its own costs under TSA's fee
authority.
A State that opts to permit a TSA agent to collect and transmit
fingerprints and applicant information is not required to collect and
remit to TSA any fees under this final rule (emphasis added). Rather, a
TSA agent will: (1) Collect and remit to TSA the Threat Assessment Fee;
(2) collect and keep the Information Collection Fee; and (3) collect
and remit to TSA the FBI Fee for forwarding to the FBI. After
discussions with the FBI, TSA decided to add a requirement that the TSA
agent remit the FBI fee to TSA for forwarding to the FBI, as the FBI
intends to bill TSA for the CHRCs the FBI will perform for TSA.
The fees are as follows: Information Collection Fee $38 (in States
where a TSA agent collects fingerprints and applicant information),
Threat Assessment Fee $34, and FBI Fee $22 (if TSA agent collects) or
$24 (if State collects).
Pursuant to the Chief Financial Officers Act of 1990, DHS/TSA is
required to review these fees no less than every two years.\33\ Upon
review, if it is found that the fees are either too high (that is,
total fees exceed the total cost to provide the services) or too low
(that is, total fees do not cover the total costs to provide the
services), TSA may propose changes to the fees. In addition, as DHS and
TSA identify and implement additional efficiencies across numerous
threat assessment and credentialing programs, any resulting cost
savings will be incorporated into the fee levels accordingly.
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\33\ 31 U.S.C. 3512.
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In this final rule, TSA is making the following changes to the Fee
NPRM:
TSA is placing the fee procedures and requirements in 49
CFR part 1572, rather than 49 CFR part 1522. TSA initially intended to
have a separate part for fee rules, but has since determined that
placing fee rules in the same part as the rules governing the programs
that the fees support is easier for stakeholders to locate. Thus, TSA
decided to place the Hazmat Fee Rule in the same part as the Hazmat
Program Rule.
[[Page 2549]]
As noted above in the response to comments, TSA is
specifying in the final rule that the driver or the driver's employer
is responsible for paying the required fees.
TSA is changing the name of the main infrastructure
support system from the Hazardous Materials Endorsement Screening
Gateway (HMESG) to the Screening Gateway. The Screening Gateway is the
information system platform that will allow TSA to submit, receive, and
integrate security threat assessment information from a variety of
Federal, State, and other sources in order to help make security threat
assessment determinations. The new name better reflects the mission of
this information system platform, which TSA expects may include
security threat assessment processing for a variety of threat
assessment and credentialing programs in the future, including TWIC,
Air Cargo, and Registered Traveler.
TSA is reducing the estimated number of applicants
expected to be processed in the first year by 70,000 to compensate for
the effect the of program's phased-in approach. As a result of a
population reduction, and without any other changes to the costs, the
fee generally would have increased because the costs would have been
shared among a smaller population. However, TSA has reduced other
expected program costs, and thus various components of the fee, and as
a result is able to reduce the total Threat Assessment fee from $36 to
$34 (despite the decrease in estimated population).
TSA is removing the costs associated with the use of
commercial data sources for terrorist threat analysis. At present, TSA
has decided not to employ commercial data sources in the terrorist
threat analysis because TSA has not yet concluded that these data
sources would significantly augment the threat analysis process. If
TSA's experience with the hazmat program indicates that the use of
commercial data sources would enhance the security threat assessment,
TSA will review the cost implications of adding such data sources. In
the Fee NPRM, TSA estimated the cost of using commercial data sources
to be $1.7 million per year (depending on annual applicant volume) for
a five-year program lifecycle cost total of $8.6 million.
TSA is adding $1.35 million in start-up costs and
approximately $3 million in costs for years 1 through 5 for system and
infrastructure costs and system programming costs. These increased
costs include programming modifications to the Screening Gateway that
add significant enhancements in adjudication, appeal, and waiver
processing, reduce processing time, and increase flexibility in the
workflow. Thus, the total five-year lifecycle program costs for the
information systems cost component category has risen from total five-
year cost estimates of $10.8 million to $15.1 million (see Figure 2 for
a complete listing of cost estimates). Some of these cost adjustments
include the following:
--$400,000 was invested to provide the Screening Gateway the capability
to ``translate'' or read certain State criminal history records.
Additionally, $75,000 in recurring costs will be required to maintain
and support this capability. This will allow the Screening Gateway to
more efficiently interpret the results of certain criminal history
records and complete a cursory automated screening of information on
the applicant. This is a cost-effective solution to translating
criminal history records into a format that can be more expeditiously
read and processed by the Screening Gateway.
--$5.9 million was added over the five-year program lifecycle for
applicant help desk support services. This will ensure that drivers
applying for the TSA threat assessment will be able to check the status
of their application, as well as provide information and support during
the waiver and/or appeals process.
--Other information system cost estimates have decreased since the Fee
NPRM was published. For example, cost estimates have decreased from
$3.1 million to $1.6 million over five years for the disaster recovery
system. TSA has identified existing resources since publishing the Fee
NPRM and intends to leverage this advantage to reduce the costs of the
disaster recovery system.
TSA is increasing office-related costs by $3.9 million
over the five-year program. Costs were driven up primarily by a $3.2
million increase for off-site mail and digitized processing after
receiving updated cost estimates, adjusting for a significant increase
in anticipated appeals, and a new requirement to notify drivers of a
Determination of No Security Threat. In the Fee NPRM, TSA proposed to
notify drivers only of negative adjudication results (i.e.,
determination of threat warranting disqualification). However, in
response to States' comments, TSA has decided to notify drivers of all
threat determinations (see Figure 2 for a complete listing of cost
estimates).
TSA is decreasing Federal and contractor labor costs by
$6.2 million over the five-year program lifecycle after receiving more
current cost estimates for manpower and off-site processing, additional
notifications, and related threat assessment applicant support
services. Increases in adjudication costs for increased labor costs of
contract and Federal adjudicators and Federal legal support were offset
by decreases in Federal and contracting program support (please see
Figure 2 for a complete listing of cost estimates). Some of these cost
adjustments include the following:
--TSA is adding $750,000 in costs to pay for interim data entry and
communication of adjudication results for those States that did not
choose the TSA Agent for the period of February 2005 through July 2005.
To allow sufficient time for States to implement system upgrades, TSA
will provide these temporary alternative methods for data transfer to
help ensure the volume of applicants can be processed quickly and
efficiently.
--TSA is also removing the costs for an Interpol connection and an
Interpol Liaison Officer. TSA intends to use Interpol information when
appropriate, but at present, TSA has decided to not seek a direct
connection to Interpol. If TSA's experience with the hazmat program
indicates that a direct Interpol connection with liaison support would
enhance the security threat assessment, TSA will review the cost
implications of adding such services.
In sum, TSA has reduced the total estimated five-year program
lifecycle costs from $72.42 million to $65.76 million, a decrease of
$6.66 million. As a result, based on the total estimated costs divided
by the total estimated five-year population of HME new applicants,
renewals, and transfers, TSA has reduced the Threat Assessment Fee from
$36 to $34 ($65.76 million divided by 1,952,000 = $34).
IV. Hazmat Driver Population
TSA estimates that there are currently 2.7 million HME holders
throughout the United States. This estimate is based on the results of
the initial name-based terrorist threat assessment recently performed
by TSA on the entire current population of HME holders.\34\ Each State
and the District of Columbia submitted to TSA the names of all current
(not expired) holders of HMEs.
[[Page 2550]]
This estimate was based on an actual head count, rather than a
statistical sampling or other estimate. However, the DOT's Bureau of
Transportation Statistics (BTS) and the U.S. Department of Commerce's
U.S. Census Bureau have historically estimated the number of drivers
carrying hazardous materials (those drivers either carrying primarily
hazardous materials or carrying such on a regular basis) to be in the
range of 500,000-800,000.\35\ TSA believes this disparity between the
total current number of HME holders and estimated ``active'' or
``dedicated'' drivers of hazardous materials suggests that a
significant portion of the HME holder population rarely, if ever,
transports hazardous materials.
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\34\ In July 2004, TSA used HME applicant names and biographical
data to conduct threat assessments on all current HME holders. The
threat assessment included entering names and biographical data in
the National Crime Information Center (NCIC) database and other
databases, such as terrorism watch lists. TSA noted its intent to
conduct these threat assessments in the May 5 IFR.
\35\ ``Transportation Statistics Annual Reports, 2001'', p. 120;
``Transportation Statistics Annual Reports, 2003'', p. 106;
``Commodity Flow Survey: Hazardous Materials'', U.S. Department of
Transportation, Bureau of Transportation Statistics, U.S. Census
Bureau, Economic Census, 1997, p. 9; ``Vehicle Inventory and Use
Survey'', U.S. Department of Commerce, U.S. Census Bureau, 1997. In
reaching this estimate, TSA extrapolated 1997-2003 data and applied
it to current hazardous materials volume, driver, and truck
estimates.
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Due to the additional cost, effort, and the prospect of
disqualification for certain felony offenses resulting from this
security threat assessment, TSA expects that a certain number of
current HME holders who do not regularly transport hazardous materials
will choose not to renew their HME over the course of the five-year
renewal period. TSA bases this assumption on recent discussions with
various trucking industry representatives that will be affected by
TSA's security threat assessment requirement, including trucking
associations, union leaders, and individual trucking companies.\36\
Industry representatives that TSA contacted predict at least some
decrease in the HME population as a result of TSA's security threat
assessment regulation. The same industry representatives further concur
that current CDL driver shortages across the commercial trucking
industry, coupled with the fact that drivers are not typically paid any
wage premium specifically for carrying hazardous materials, further
support TSA's prediction that there will be some reduction of total HME
holders due to TSA's security threat assessment process.
---------------------------------------------------------------------------
\36\ To estimate the volume of HME holders expected to submit to
the TSA security threat assessment processes, TSA conducted phone
interviews during the months of June and July 2004 with
representatives from the following organizations: American Trucking
Association; Estes Express Lines; International Brotherhood of
Teamsters; Motor Freight Carriers' Associations; National Private
Truck Council; National Tank Truck Carriers, Inc.; and the Truckload
Carriers Association.
---------------------------------------------------------------------------
Empirical data suggest that there has been a decline in total HME
holders since early 2003. A recent TSA survey of certain State motor
vehicle administrators, representing approximately 20 percent of the
2.7 million total HME records from the States, revealed a one-year
weighted average decline of 17 percent from early 2003 to early
2004.\37\ TSA believes this decline is due, at least in part, to the
prospect of TSA's security threat assessment regulation (announced
publicly in the May 5 IFR). With the imposition of the new fees
requirement, TSA estimates that there will be a further 20 percent
decline in the HME holder population resulting from the first year of
operations after the Hazmat Program Rule takes effect on January 31,
2005. This is the date when new HME applicants will be required to
submit fingerprints, biographical information, and fees. Applicants
seeking to renew expiring HMEs will be subject to the fingerprint,
biographical information, and fee submission requirements beginning May
31, 2005.
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\37\ This sample survey decline in total HME holders from 2003
to 2004 is also supported by the decrease in total HME records in
the Federal Motor Carrier Safety Administration's (FMCSA) Commercial
Drivers License Information System (CDLIS) database. In early 2003,
FMCSA reported to TSA that the CDLIS contained approximately 3.5
million total HME holders. TSA published this earlier estimate of
3.5 million total HME holders in the May 5 IFR. In May 2004, FMCSA
reported approximately 2.7 million HME holders in the CDLIS.
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TSA expects to receive a prorated total of 360,000 new and renewal
applications in the first year after January 31, 2005.\38\ In the
second and third years, TSA estimates a 5 percent annual HME population
decline each year, for a total of approximately 410,000 and 390,000
total new and renewal applicants, respectively. After the third year,
TSA estimates that the regulatory-induced adjustment on the HME holder
population will have been fully realized. Thus, in the fourth and fifth
years, TSA estimates a modest annual growth in renewals and new
applications, in line with that of overall estimated domestic non-farm
employment growth, at 1 percent annually. Thus, TSA expects
approximately 394,000 and 398,000 total new applicants and renewals,
respectively, in the fourth and fifth years. The total five-year new
and renewal applicants for whom TSA expects to perform security threat
assessments will thus be approximately 1.952 million.
---------------------------------------------------------------------------
\38\ Due to the Hazmat Program Rule's May 31, 2005, compliance
date for renewals and transfers, 360,000 is the prorated portion of
TSA's annual estimation of 432,000 applicants in the first program
year. The 432,000-applicant estimate is calculated by reducing 2.7
million HMEs by 20 percent, for a total of 2,160,000, and then
dividing by 5 to calculate an even distribution of TSA's five-year
renewal cycle requirement. HME estimates for subsequent recurring
years are calculated accordingly.
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[[Page 2551]]
[GRAPHIC] [TIFF OMITTED] TR13JA05.013
V. Fee Program Overview
The fee program for the security threat assessment consists of
three parts, discussed below: (A) The Information Collection Fee for
the collection and transmission of fingerprints and applicant
information; (B) the Threat Assessment Fee for the security threat
assessment and associated notification, adjudication, appeal, and
waiver processes; and (C) the FBI Fee for checking applicants'
fingerprints against the FBI's CHRC database to identify past criminal
offenses as reported to FBI. Each of these fees is structured to
recover the Federal Government's cost of performing these functions.
TSA notes that some States have opted to collect and transmit
fingerprints and applicant information, and charge a user fee for those
services under their own user fee authority. In those States, HME
applicants will be required under the final rule to remit to the State,
for transmission to the Federal Government, only the Threat Assessment
Fee and FBI Fee. Nothing in this final rule prohibits the State from
collecting a fee determined by the State under the State's own fee
authority to cover its costs of collecting and transmitting
fingerprints and applicant information. TSA notes that a State may not
collect a fee pursuant to TSA's fee authority to reimburse the State's
own costs.
A discussion of the three fees follows.
A. Information Collection Fee
As set forth in the Hazmat Program Rule, the security threat
assessment process requires all drivers who apply for or renew an HME
to submit fingerprints and other biographical information. The Hazmat
Program Rule required States to choose one of the following two options
for collection and transmission of fingerprints and applicant
information:
(1) Collect and transmit fingerprints and applicant information
itself, either through a State agency, such as the State DMV or State
law enforcement agencies, or by contracting with a third party; or
(2) Allow a TSA agent to collect and transmit fingerprints and
applicant information.
1. Cost of Information Collection
As noted above, in those States that have chosen to allow a TSA
agent to collect and transmit fingerprints and applicant information,
TSA will hire a contractor agent to provide those services. Based on
TSA's research of both commercial and Government fingerprint and
information collection services, as well as a competitive bidding and
acquisition process, TSA has concluded that the per applicant cost to
collect and transmit fingerprints and other required applicant data
electronically is $38. This also includes the costs for required
administrative support, quality control, and chain of custody
assurance.
2. Information Collection Fee
Based on the above costs, TSA concludes that the per applicant fee
for information collection and transmission will be $38. This fee will
only apply to those HME applicants in States that have chosen to have a
TSA agent perform information collection and transmission, as well as
related administrative support. States that choose to perform the
information collection and transmission functions themselves, and
charge a fee to recover the costs of performing these services, are
responsible for establishing their own State fee, in accordance with
their State user fee authority and requirements. TSA's Information
Collection Fee may not be the same as the fees States may establish for
performing these services. The Information Collection Fee will not
include the fee charged by FBI to process fingerprint identification
records.
B. Threat Assessment Fee
For the TSA security threat assessment process, each applicant's
information will be checked against multiple databases and other
information sources so TSA can determine whether the applicant poses a
security threat that warrants denial of the HME. This check searches
for potential security threats, immigration status, past criminal
activity and mental incompetence. TSA will perform all of the threat
assessment functions. The threat assessment includes an appeal process
for individuals who believe the records on which TSA bases its
determination are incorrect. In addition, TSA will administer a waiver
process for applicants who seek a waiver of disqualification.
Individuals whom TSA has determined pose a security threat based on
reviews of pertinent databases, or who are not in the U.S. lawfully,
are not eligible for a waiver.\39\
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\39\ These threat assessment standards are contained at 49 CFR
part 1572.
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1. Start-Up Costs
TSA's effort to conduct security threat assessments on drivers with
an HME will require ``start-up'' costs and annual ``recurring'' costs
for checks conducted in years after January 31, 2005. The
[[Page 2552]]
start-up costs will consist of all the costs associated with start-up
activities necessary to implement the program. The start-up costs
include the systems, personnel, and resources TSA will be required to
bring on-line to conduct security threat assessments on applicants
renewing or newly applying for a CDL with an HME.
Regardless of whether a State or a TSA agent collects and transmits
fingerprints and applicant information, TSA must implement and maintain
the appropriate systems, resources, and personnel to ensure that
fingerprints and applicant information are ``linked,'' and that TSA can
receive and act on the results of the security threat assessment. TSA
will be required to have the necessary resources to perform the
security threat assessments and process appeals, requests for waivers,
and notification (to the driver and the appropriate State) of all
results. In addition, TSA must be capable of archiving the results of
these actions for the purpose of drivers newly applying or renewing
their HME application in future years (in the case of drivers who
successfully appealed a TSA background check or were granted a waiver).
TSA estimates that the total start-up cost for the hazmat program
will be $4.44 million. This estimate includes: (i) $4.02 million for
all information systems costs, including the development and deployment
of TSA's Screening Gateway--an information system platform that will
allow TSA to submit, receive, and integrate security threat assessment
information from a variety of Federal, State, and other sources in
order to help make security threat assessment determinations--as well
as related network and communication support costs, including access to
information systems from AAMVA, an adjudication helpdesk system, and
support capability to keep applicants informed on the status of their
threat assessments; (ii) $360,000 for contract personnel to perform
various program management functions in support of program operations;
and (iii) $60,000 for office costs, including program travel. TSA notes
that certain start-up overhead costs that directly support the program,
such as those for human resources, most financial systems, accounting
and budgeting support costs and TSA executive management time, have not
been included in the user fees. See Figure 2 below for additional
details.
2. Recurring Costs
This section summarizes TSA's estimated costs of completing
security threat assessments on individuals who apply for or renew an
HME for each year after January 31, 2005. Recurring costs represent the
resources necessary for TSA to perform ongoing security threat
assessments on drivers applying for or renewing an HME as well as to
maintain program infrastructure (e.g., technical systems). As
previously stated, TSA estimates that the population of drivers who
apply for or renew an HME will be 360,000 drivers for the prorated
first year (due to the phased in approach whereby HME renewal and
transfer applicants must comply with TSA's program requirements
beginning May 31, 2005). Pursuant to the Hazmat Program Rule, State
Departments of Motor Vehicles (DMVs) will be prohibited from issuing or
renewing an HME until TSA has notified the State that the driver (based
on a security threat assessment) does not pose a security threat.
TSA estimates that the total annual recurring costs for performing
threat assessments will be $14.35 million for the first year (i.e.,
from January 31, 2005 to January 30, 2006) and between $11.62 million
and $11.86 million per year for the second through fifth years.\40\
Recurring costs will include the costs of: continued development and
lifecycle maintenance of information systems; disaster recovery
infrastructure, digitization of applicant biographical data; the use of
databases containing citizenship, international criminal history, and
other data necessary to perform a security threat assessment; Federal
and contractor personnel to perform all program office functions,
including support of State's activities in the program along with
compliance assurance; Federal and contractor support to perform
security threat assessments, and to administer and document
adjudications, appeals, and waivers; \41\ and office costs, including
office space, notification mailing costs, and required program travel.
See Figure 2 for additional cost details.
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\40\ All cost and fee estimates in recurring years are not
adjusted for inflation.
\41\ As the Hazmat Program matures, and TSA gains experience
with the appeals and waiver processes, the agency may need to adjust
these processes. If TSA adjusts the appeals or waiver process, the
agency's costs may increase or decrease, which would necessitate an
adjustment in the Threat Assessment Fee.
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3. Threat Assessment Total Costs
Based on its population and cost estimates assumptions, TSA
concludes that the total of start-up and the first five years'
recurring costs will be $65.76 million. Recurring costs are not
adjusted for inflation. All figures are rounded to the nearest
thousand.
BILLING CODE 4910-62-P
[[Page 2553]]
[GRAPHIC] [TIFF OMITTED] TR13JA05.016
BILLING CODE 4910-62-C
[[Page 2554]]
4. Threat Assessment Fee Calculation
TSA will charge a fee to recover most of its security threat
assessment start-up costs as well as all recurring costs. The start-up
costs include non-recurring costs required to perform the security
threat assessments that include fingerprint submission. Because these
costs cannot be recovered prior to the full implementation of the
Hazmat Program, and because all HME recipients benefit from the
services provided as a result of the infrastructure and capabilities
that TSA must develop to implement the Hazmat Program, TSA proposes to
amortize the start-up costs over a five-year period to recover these
one-time costs equitably.
This amortization period coincides with the requirement in the
FMCSA companion rule \42\ to the May 5 IFR \43\ that States mandate a
five-year maximum renewal period for the HMEs. Thus, a five-year
amortization period means the start-up costs will be borne by all
individuals who either currently hold an HME or who apply for an HME in
that five-year period. TSA notes that the amortization is done by
totaling all start-up costs and the five-year annual recurring costs
and dividing by 1.952 million requests for a new or renewed HME--the
total number expected in the first five years. (See Figure 1).
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\42\ 68 FR 23843 (May 5, 2003).
\43\ 68 FR 23852 (May 5, 2003).
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Based on the estimated costs in Figure 2, TSA has calculated the
per applicant Threat Assessment Fee as follows: TSA's estimated start-
up costs of $4.44 million, added to the estimated sum of the first five
years' annual recurring costs of $61.32 million, equal a total of
$65.76 million. These total costs are then divided by the 1.952 million
total estimated number of applicants for a new or renewed HME over the
first five years after January 31, 2005. This calculation results in an
estimated cost to each applicant of $33.69, which is rounded up to $34
per applicant.
As noted above, States that have chosen to collect and transmit
fingerprints and applicant information under the Hazmat Program Rule
are still required to collect the Threat Assessment Fee on behalf of
TSA and remit it to TSA in accordance with the final rule. In States
that have chosen to allow a TSA agent to collect and transmit
fingerprints and applicant information under the Hazmat Program Rule,
the TSA agent is required to collect this fee on behalf of TSA and
remit it to TSA in accordance with the final rule.
C. FBI Fee
As part of the security threat assessment, TSA will use FBI's CHRC
process. The FBI is authorized to establish and collect fees to process
fingerprint identification records and name checks for non-criminal
justice, non-law enforcement employment and licensing purposes that may
be used for salaries and other expenses incurred in providing these
services.\44\ Pursuant to Criminal Justice Information Services (CJIS)
Information Letter 93-3 (October 8, 1993), this fee is currently set at
$24. CJIS Information Letter 93-3 provides that ``State Identification
Bureaus and other agencies that channel user-fee fingerprint cards to
the FBI and account for the fees on a monthly basis will continue to
retain $2 of the payment to help offset handling costs.'' Thus, in
those States that have opted to allow a TSA agent to collect and
transmit fingerprints and applicant information, the FBI fingerprint
processing charge (FBI Fee) will be $22. States that have chosen to
collect and transmit fingerprints and applicant information on their
own may charge $24 (the $22 FBI Fee plus the $2 handling costs), as
long as it is consistent with CJIS Information Letter 93-3. The
fingerprint processing user fee is set by the FBI, and the amount is
subject to change.
---------------------------------------------------------------------------
\44\ See Title II of Pub. L. 101-515, November 5, 1990, 104
Stat. 2112, codified in a note to 28 U.S.C. 534.
---------------------------------------------------------------------------
VI. Total Fees
In this final rule, TSA establishes the following fees for HME
applicants who submit fingerprints and applicant information to a TSA
agent:
(1) Information Collection and Transmission Fee: $38.
(2) Threat Assessment Fee: $34.
(3) FBI Fee: $22.
Thus, the total fees for such applicants are $94.
Under the final rule, in States that have opted to collect and
transmit fingerprints and applicant information on their own, HME
applicants will be required to pay the $34 Threat Assessment Fee and an
FBI Fee of $22 or $24, depending on the amount charged by the State.
TSA assumes that such applicants also will be required under State user
fee authority to pay to the State a fee to cover the State's costs of
collecting and transmitting fingerprints and applicant information.
That fee may vary from State to State. Thus, TSA cannot estimate the
total fees for such applicants.
VII. Section by Section Analysis
TSA did not receive any substantive public comments on the fee
collection procedures proposed in the Fee NPRM, and so has made very
few revisions to those procedures in the final rule.
Section 1572.301 establishes the applicability of this part and
definitions of terms used in this part. This part applies to States
that issue an HME, individuals who apply for a new or renewed HME, and
entities that collect fees from such individuals on behalf of TSA.
The terms ``commercial driver's license,'' ``endorsement,'' and
``hazardous materials'' are used as defined in FMCSA regulations.
The term ``day'' is defined as a calendar day.
The term ``FBI Fee'' is defined as the fee required for the cost of
the FBI to process fingerprint identification records and name checks.
The term ``hazardous materials endorsement'' is defined as the
authorization for an individual to transport hazardous materials in
commerce, which must be issued on the individual's commercial driver's
license.
The term ``Information Collection Fee'' is defined as the fee
required for the cost of collecting and transmitting fingerprints and
other applicant information under 49 CFR part 1572.
The term ``State'' is defined as a U.S. State or the District of
Columbia.
The term ``Threat Assessment Fee'' is defined as the fee required
for the cost of TSA adjudicating security threat assessments, appeals,
and waivers under 49 CFR part 1572.
The term ``TSA agent'' is defined as an entity approved by TSA to
collect fingerprints in accordance with 49 CFR part 1572 and fees in
accordance with this subpart.
Sections 1572.303 through 1572.399 are reserved.
Section 1572.401 requires a State that collects fingerprints and
applicant information under 49 CFR part 1572 to collect, handle, and
remit to TSA the Threat Assessment Fee in accordance with the
procedures in Sec. 1572.403. The State also is required to collect and
remit to the FBI the FBI Fee in accordance with established FBI
procedures. After discussions with the FBI, TSA added this requirement
to the final rule because the FBI intends to bill States for CHRCs it
will perform in accordance with procedures already established by FBI
and the States.
Section 1572.401 also requires a TSA agent that collects
fingerprints and applicant information under 49 CFR
[[Page 2555]]
part 1572 to collect the Information Collection Fee, Threat Assessment
Fee, and FBI Fee in accordance with procedures approved by TSA. A TSA
agent also is required to remit to TSA the Threat Assessment Fee and
the FBI Fee in accordance with procedures approved by TSA.
Section 1572.403 describes the procedures a State is required to
follow if the State chooses to collect and transmit fingerprints under
the Hazmat Program Rule. Section 1572.403 pertains only to the
collection of the Threat Assessment Fee to cover TSA's costs and the
FBI Fee to cover the costs of the CHRC.\45\ Nothing in this regulation
prohibits a State from collecting additional fees, under its own user
fee authority, to cover its costs of collecting and transmitting
fingerprints and applicant information at the time the State collects
the TSA Threat Assessment Fee and the FBI Fee from HME applicants.
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\45\ As noted above, the FBI currently allows States to charge
$24 for the FBI CHRC.
---------------------------------------------------------------------------
Paragraph 1572.403(a) requires States to impose the Threat
Assessment Fee and the FBI Fee when an individual submits an
application to the State for a new or renewed HME in compliance with 49
CFR part 1572. It also establishes the TSA Threat Assessment Fee at
$34. Finally, it requires the individual applying for the HME, or that
individual's employer, to remit the Threat Assessment Fee and the FBI
Fee to the State in which the individual is applying for the HME, in a
form and manner approved by TSA and the State.
Paragraph 1572.403(b) requires each State to collect the Threat
Assessment Fee and the FBI Fee from an individual at the time the
individual submits an application for a new or renewed HME. TSA expects
that as States become fully operational for purposes of this part, TSA
will be receiving names frequently and far in advance of the States
remitting the Threat Assessment Fee. Therefore, it is vital that the
States collect the Threat Assessment Fee under this part from the
applicant as the application is submitted. In addition, paragraph
1572.403(d)(8) provides that TSA does not envision issuing any refunds.
Once the application is received by TSA, analysis of the application
will commence immediately. Therefore, TSA incurs the costs of
performing the analysis immediately. Paragraph 1572.403(b)(2) clarifies
that once TSA receives an application from a State for a security
threat assessment in accordance with 49 CFR part 1572, the State is
liable for the Threat Assessment Fee.
Paragraph 1572.403(c) establishes requirements for the handling of
Threat Assessment Fees collected by the States prior to remittance to
TSA. Because the States are collecting the Threat Assessment Fees on
behalf of TSA, the fees are considered to be held in trust for the
beneficial interest of the United States. Thus, States are required to
safeguard all Threat Assessment Fees collected until they are remitted
to TSA. In addition, States are required to account for Threat
Assessment Fees separately. However, States are permitted to commingle
such fees with other sources of revenue.
Paragraph 1572.403(d) establishes procedures for the remittance of
Threat Assessment Fees to TSA. States are required to remit all Threat
Assessment Fees collected under this part to TSA on a monthly basis.
Every month, TSA will issue an invoice to each State based on the
number of HME applications the State has sent to TSA. For example, if a
State sends TSA 100 HME applications during the month of February, TSA
will bill the State $3400 (100 x $34). The State is required to pay the
invoice in full within 30 days of the date that TSA sends the invoice
to the State.
The payments must be remitted to TSA by check, money order, wire,
or any other payment method acceptable to TSA in the future. Payments
must be made in U.S. currency and made payable to the ``Transportation
Security Administration.'' States are allowed to retain any interest
that accrues on the principal amounts of the Threat Assessment Fees
between the date of collection and the date the fees are remitted to
TSA, which shall not be more than 30 days after the date on which TSA
sends the invoice to the State.
Paragraph (d) also specifies that TSA accept fees only from a
State, not from an individual HME applicant. TSA will not issue any fee
refunds, and, if a State does not remit the Threat Assessment Fees, TSA
may decline to process any HME applications from that State. TSA
reserves the right to take any other appropriate action against
delinquent States, as necessary.
Section 1572.405 describes the procedures that an HME applicant is
required to follow if a TSA agent collects fingerprints and applicant
information under the Hazmat Program Rule. Paragraph 1572.405(a)
requires an individual applying for an HME, or that individual's
employer, to remit the Threat Assessment Fee, FBI Fee, and Information
Collection Fee to the TSA agent, in a form and manner approved by TSA,
when the individual submits an application pursuant to part 1572 to the
TSA agent. It also establishes the Threat Assessment Fee at $34, the
FBI Fee at $22, and the Information Collection Fee at $38.
Paragraph 1572.405(b) states that a TSA agent will collect the fees
required under this section when an individual submits an application
pursuant to 49 CFR part 1572. A TSA agent will: (1) Collect and remit
to TSA the Threat Assessment Fee; (2) collect and keep the Information
Collection Fee; and (3) collect and remit to TSA the FBI Fee for
forwarding to the FBI.
Paragraph 1572.405(c) requires that fees remitted under this
section be remitted to TSA by check, money order, wire or any payment
method acceptable to TSA in the future. Payments must be made in U.S.
currency and made payable to the ``Transportation Security
Administration.'' It also specifies that TSA will not issue any refunds
of fees submitted under this section. Finally, it specifies that
applications submitted under 49 CFR part 1572 are processed only upon
receipt of all applicable fees.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), as
amended, requires consideration of the impact of paperwork and other
information collection burdens imposed on the public. As provided by
the PRA, 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 Office of Management and Budget (OMB) control number.
TSA has determined that there are no new information collection
requirements associated with this final rule.
TSA notes that the Hazmat Program Rule requires drivers to submit
their fingerprints and other biographical information. Those
requirements may be considered an information collection burden under
the PRA. Since they are imposed under the Hazmat Program Rule, they are
discussed in that rulemaking.
Regulatory Analyses
Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs each Federal agency to
adopt a regulation only if the agency makes a reasoned determination
that the benefits of the intended regulation justify its costs. Second,
the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)) requires
agencies to analyze the economic impact of regulatory changes on small
entities. Third, the Trade Agreements Act (19 U.S.C. 2531-2533)
prohibits
[[Page 2556]]
agencies from setting standards that create unnecessary obstacles to
the foreign commerce of the United States. In developing U.S.
standards, the Trade Agreement Act requires agencies to consider
international standards, where appropriate, as the basis of U.S.
standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Public Law
104-4) requires agencies to prepare a written assessment of the costs,
benefits, and other effects of final rules that include a Federal
mandate likely to result in the expenditure by State, local, or tribal
governments, in the aggregate, or by the private sector, of $100
million or more annually (adjusted for inflation).
In conducting these analyses, TSA has determined:
1. This rule is not economically significant, as neither the costs
nor benefits exceed $100 million annually.
2. This rule is a ``significant regulatory action'' as defined in
the Executive Order because there is significant public interest in
security issues since September 11, 2001.
3. Both threshold tests and a Final Regulatory Flexibility Analysis
show the rule will not have a significant direct impact on a
substantial number of small entities.
4. The rule will impose no significant barriers to international
trade.
5. The rule will not impose an unfunded mandate on State, local, or
tribal governments, or on the private sector in excess of $100 million
annually.
Executive Order 12866 Assessment
Executive Order 12866, ``Regulatory Planning and Review'' (58 FR
51735, October 4, 1993), provides for making determinations whether a
regulatory action is ``significant'' and therefore subject to OMB
review and to the requirements of the Executive Order. TSA has
determined that this action is a significant regulatory action within
the meaning of Executive Order 12866 because there is significant
public interest in security issues since September 11, 2001, as well as
the background check requirements in the Hazmat Program Rule.
This final rule responds to the requirements of section 520 of the
2004 Appropriations Act by establishing fees for the background checks
TSA is required to perform by section 1012 of the USA PATRIOT Act and
sections 1121-1123 of the SEA. The final rule establishes two fees: A
user fee to cover the HME security threat assessment program and
associated costs (Threat Assessment Fee) and a user fee to cover the
costs of collecting and transmitting fingerprints and applicant
information (Information Collection Fee). The amount of the fees are
$34 (Threat Assessment Fee) and $38 (Information Collection and
Transmission Fee) per HME applicant. There will also be a $22 fee to
cover FBI's CHRC.
TSA has prepared a full regulatory evaluation for this final rule,
which is available for review in the docket of this matter. The
regulatory evaluation examines the costs and benefits of the final rule
establishing fees for security threat assessments that TSA is required
to perform on individuals who apply for or renew an HME for a CDL. The
results of the evaluation are summarized below.
Costs
The costs that result from the implementation of the Hazmat Fee
Rule are the administrative and labor costs related to determining an
equitable level for the Transportation Security Administration's threat
assessment fee; remitting and processing that fee; and remitting and
processing the Federal Bureau of Investigation's criminal history
record check fee. The costs identified in this regulatory evaluation
are not the costs of completing threat assessments or criminal history
record checks. Because those identity vetting procedures are mandated
by a companion interim final rule, titled ``Security Threat Assessment
for Individuals Applying for a Hazardous Materials Endorsement for a
Commercial Driver's License'' RIN 1652-AA17 (Hazmat Program Rule), the
costs of those procedures were catalogued in that rule's attendant
regulatory evaluation.
The total administrative and labor costs of the Hazmat Fee Rule,
however, are a function of how each State decides to fulfill the
requirements of the Hazmat Program Rule. In complying with the Hazmat
Program Rule, each State must either collect and forward all
fingerprints, applicant information, and fees to TSA and the FBI, or
allow an entity approved by TSA to complete these tasks. States were
required to notify TSA in writing of their choice by December 27, 2004.
The Hazmat Program Rule was published on November 24, 2004, and 17
States notified TSA that they will opt to collect all requisite fees
and applicant information and then pass that information along to TSA
and the FBI. In constant 2004 U.S. dollars, the total ten year cost for
this aspect of the program is estimated to be approximately $900,000.
The remaining 34 States will allow a TSA-approved agent to perform
all required fingerprint, fee and information collection duties. For
this aspect of the program, the ten-year cost of the Fee Rule is
estimated to be $1.3 million. The total ten-year cost for this final
rule, therefore, is estimated to be $2.2 million in constant 2004 U.S.
dollars. Discounted, the rule is estimated to cost $1.6 million over
the ten-year horizon.
Two summary tables provide an overview of the cost estimates. See
Figures 2 and 3. A detailed discussion of the cost estimates can be
found in the Cost of Compliance Section of this evaluation.
[[Page 2557]]
[GRAPHIC] [TIFF OMITTED] TR13JA05.014
[GRAPHIC] [TIFF OMITTED] TR13JA05.015
Benefits
There are several qualitative benefits realized from the
implementation of the Hazmat Fee Rule. Primarily, the Hazmat Fee Rule
provides a funding mechanism for the Hazmat Program Rule, which
regulates the population of drivers with hazardous materials
endorsements. By creating a set of fees, TSA ensures that the cost of
regulation is not the sole responsibility of the Federal Government.
TSA determined that creating a fee rule was the most efficient and cost
effective way to fund the aforementioned Hazmat Program Rule.
Final Regulatory Flexibility Assessment
The Regulatory Flexibility Act of 1980 (RFA), as amended, was
enacted by Congress to ensure that small entities (small businesses,
small not-for-profit organizations, and small governmental
jurisdictions) are not unnecessarily or disproportionately burdened by
Federal regulations. The RFA requires agencies to review rules to
determine if they have ``a significant economic impact on a substantial
number of small entities.'' TSA has determined that this final rule
will not have a significant economic impact on a substantial number of
small entities.
An analysis of the rule's impact on small entities, as well as
responses to comments on the analysis that TSA prepared for the Fee
NPRM, is contained in the Final Regulatory Evaluation, which is
available in the docket of this rulemaking. Based on that analysis, TSA
has determined that the rule will have an impact on a substantial
number of small entities. However, TSA has determined that the impact
on entities affected by the rule will not be significant. Accordingly,
TSA hereby certifies that this rule will not have a significant
economic impact
[[Page 2558]]
on a substantial number of small entities.
Unfunded Mandates Assessment
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires Federal agencies to prepare a written assessment of the costs,
benefits, and other effects of proposed or final rules that include a
Federal mandate likely to result in the expenditure by State, local, or
tribal governments, in the aggregate, or by the private sector, of more
than $100 million in any one year (adjusted for inflation with base
year of 1995). Before promulgating a rule for which a written
assessment is needed, section 205 of UMRA generally requires TSA to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, most cost-effective, or least burdensome
alternative that achieves the objective of the rule. The provisions of
section 205 do not apply when they are inconsistent with applicable
law. Moreover, section 205 allows TSA to adopt an alternative other
than the least costly, most cost-effective, or least burdensome
alternative if the agency publishes with the final rule an explanation
of the reasons that alternative was not adopted.
TSA has determined that this rule will not result in the
expenditure by State, local, or tribal governments, in the aggregate,
or by the private sector, of more than $100 million annually.
International Trade Impact Assessment
The Trade Agreement Act of 1979 prohibits Federal agencies from
establishing any standards or engaging in related activities that
create unnecessary obstacles to the foreign commerce of the United
States. Legitimate domestic objectives, such as safety, are not
considered unnecessary obstacles. 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 this rulemaking and has
determined that it will have only a domestic impact and therefore no
effect on any trade-sensitive activity. This final rule will impact
only individuals applying for a State-issued HME, not individuals with
an HME issued by Canada or Mexico. As noted above, TSA has implemented
a program for Canadian drivers who transport explosives into the U.S.
TSA is also consulting with Canada and Mexico on requiring threat
assessments for Canadian and Mexican drivers who transport hazmat into
the U.S., and will continue to do so. TSA will also continue to consult
with Canada and Mexico to ensure that any adverse impacts on trade are
minimized.
Executive Order 13132 (Federalism)
Executive Order 13132 requires TSA to develop an accountable
process to ensure ``meaningful and timely input by State and local
officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.''
TSA has analyzed this final rule under the principles and criteria
of Executive Order 13132. TSA notes that various statutes mandate the
requirements of this final rule, including the USA PATRIOT Act, SEA,
and section 520 of the Homeland Security Appropriations Act of 2004.
Moreover, the Federal Government, primarily through the Federal Motor
Carrier Safety Administration, is already substantially involved in
establishing conditions for the issuance of an HME. Accordingly, TSA
has determined that this action will not have a substantial direct
effect on the States, on the relationship between the national
Government and the States, or on the distribution of power and
responsibilities among the various levels of government, and therefore
will not have federalism implications. However, TSA determined that the
Hazmat Program Rule has federalism implications.\46\ In the preamble of
the Hazmat Program Rule, TSA noted that both TSA and FMCSA coordinated
with the States in the development of the rule.
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\46\ See 69 FR 68741 (November 24, 2004).
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Environmental Analysis
TSA has reviewed this proposal 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. The final rule will only implement a fee structure
for commercial drivers who transport hazardous materials, and thus will
have no environmental consequences.
Energy Impact
TSA has assessed the energy impact of this proposal 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 is
not a major regulatory action under the provisions of the EPCA.
List of Subjects in 49 CFR Part 1572
Fees, Commercial driver's license, Criminal history background
checks, Explosives, Hazardous materials, Motor carriers, Motor vehicle
carriers, Security measures, Security threat assessment.
The Amendments
0
For the reasons set forth in the preamble, the Transportation Security
Administration amends chapter XII of title 49, Code of Federal
Regulations, as follows:
Subchapter D--Maritime and Land Transportation Security
PART 1572--CREDENTIALING AND BACKGROUND CHECKS FOR LAND
TRANSPORTATION SECURITY
0
1. The authority citation for part 1572 is revised to read as follows:
Authority: 49 U.S.C. 114, 5103a, 40113, and 46105; 18 U.S.C.
842, 845; Sec. 520, Pub. L. 108-90, 117 Stat. 1156 (6 U.S.C. 469).
0
2. Add new subparts D and E to part 1572 as follows:
Subpart D--Fees for Security Threat Assessments for Individuals
Sec.
1572.301 Scope and definitions.
1572.303-1572.399 [Reserved]
Subpart E--Fees for Security Threat Assessments for Hazmat Drivers
1572.401 Fee collection options.
1572.403 Fee procedures for collection by States.
1572.405 Fee procedures for collection by TSA agents.
Subpart D--Fees for Security Threat Assessments for Individuals
Sec. 1572.301 Scope and definitions.
(a) Scope. This part applies to:
(1) States that issue a hazardous materials endorsement for a
commercial driver's license;
(2) Individuals who apply for or renew a hazardous materials
endorsement for a commercial driver's license and must undergo a
security threat assessment under 49 CFR part 1572; and
(3) Entities who collect fees from such individuals on behalf of
TSA.
(b) Terms. As used in this part:
Commercial driver's license (CDL) is used as defined in 49 CFR
383.5.
Day means calendar day.
Endorsement is used as defined in 49 CFR 383.5.
FBI Fee means the fee required for the cost of the Federal Bureau
of
[[Page 2559]]
Investigation to process fingerprint identification records and name
checks.
Hazardous materials means any material that has been designated as
hazardous under 49 U.S.C. 5103 and is required to be placarded under
subpart F of 49 CFR part 172 or any quantity of a material listed as a
select agent or toxin in 42 CFR part 73.
Hazardous materials endorsement (HME) means the authorization for
an individual to transport hazardous materials in commerce, which must
be issued on the individual's commercial driver's license.
Information Collection Fee means the fee required in this part for
the cost of collecting and transmitting fingerprints and other
applicant information under 49 CFR part 1572.
State means a State of the United States or the District of
Columbia.
Threat Assessment Fee means the fee required in this part for the
cost of TSA adjudicating security threat assessments, appeals, and
waivers under 49 CFR part 1572.
TSA agent means an entity approved by TSA to collect and transmit
fingerprints and applicant information in accordance with 49 CFR part
1572 and fees in accordance with this part.
Sec. Sec. 1572.303-1572.399 [Reserved]
Subpart E--Fees for Security Threat Assessments for Hazmat Drivers
Sec. 1572.401 Fee collection options.
(a) State collection and transmission. If a State collects
fingerprints and applicant information under 49 CFR part 1572, the
State must collect and transmit to TSA the Threat Assessment Fee in
accordance with the requirements of Sec. 1572.403. The State also must
collect and remit the FBI Fee in accordance with established
procedures.
(b) TSA agent collection and transmission. If a TSA agent collects
fingerprints and applicant information under 49 CFR part 1572, the
agent must--
(1) Collect the Information Collection Fee, Threat Assessment Fee,
and FBI Fee in accordance with procedures approved by TSA;
(2) Transmit to TSA the Threat Assessment Fee in accordance with
procedures approved by TSA; and
(3) Transmit to TSA the FBI Fee in accordance with procedures
approved by TSA and the Federal Bureau of Investigation.
Sec. 1572.403 Fee procedures for collection by States.
This section describes the procedures that a State that collects
fingerprints and applicant information under 49 CFR part 1572, and the
procedures an individual who applies for a new HME or renewal of an
existing HME for a CDL in that State, must follow for collection and
transmission of the Threat Assessment Fee and the FBI Fee.
(a) Imposition of fees. (1) The following Threat Assessment Fee is
required for TSA to conduct a security threat assessment under 49 CFR
part 1572 for an individual who applies for a new HME or renewal of an
existing HME: $34.
(2) The following FBI Fee is required for the FBI to process
fingerprint identification records and name checks required under 49
CFR part 1572: the fee collected by the FBI under 28 U.S.C. 534.
(3) An individual who applies for a new or renewed HME, or the
individual's employer, must remit to the State the Threat Assessment
Fee and the FBI Fee, in a form and manner approved by TSA and the
State, when the individual submits the application for the HME to the
State.
(b) Collection of fees. (1) A State must collect the Threat
Assessment Fee and FBI Fee when an individual submits an application to
the State for a new HME or renewal of an existing HME.
(2) Once TSA receives an application from a State for a security
threat assessment under 49 CFR part 1572, the State is liable for the
Threat Assessment Fee.
(3) Nothing in this subpart prevents a State from collecting any
other fees that a State may impose on an individual who applies for a
new HME or renewal of an existing HME.
(c) Handling of fees. (1) A State must safeguard all Threat
Assessment Fees from the time of collection until remittance to TSA.
(2) All Threat Assessment Fees are held in trust by a State for the
beneficial interest of the United States in paying for the costs of
conducting the security threat assessment required by 49 U.S.C. 5103a
and 49 CFR part 1572. A State holds neither legal nor equitable
interest in the Threat Assessment Fees except for the right to retain
any accrued interest on the principal amounts collected pursuant to
this section.
(3) A State must account for Threat Assessment Fees separately, but
may commingle such fees with other sources of revenue.
(d) Remittance of fees. (1) TSA will generate and provide an
invoice to a State on a monthly basis. The invoice will indicate the
total fee dollars (number of applicants times the Threat Assessment
Fee) that are due for the month.
(2) A State must remit to TSA full payment for the invoice within
30 days after TSA sends the invoice.
(3) TSA accepts Threat Assessment Fees only from a State, not from
an individual applicant for an HME.
(4) A State may retain any interest that accrues on the principal
amounts collected between the date of collection and the date the
Threat Assessment Fee is remitted to TSA in accordance with paragraph
(d)(2) of this section.
(5) A State may not retain any portion of the Threat Assessment Fee
to offset the costs of collecting, handling, or remitting Threat
Assessment Fees.
(6) Threat Assessment Fees remitted to TSA by a State must be in
U.S. currency and made payable to the ``Transportation Security
Administration.''
(7) Threat Assessment Fees must be remitted by check, money order,
wire or any other payment method acceptable to TSA.
(8) TSA will not issue any refunds of Threat Assessment Fees.
(9) If a State does not remit the Threat Assessment Fees for any
month, TSA may decline to process any HME applications from that State.
Sec. 1572.405 Fee procedures for collection by TSA agents.
This section describes the procedures that an individual who
applies for a new HME or renewal of an existing HME for a CDL must
follow if a TSA agent collects and transmits the Information Collection
Fee, Threat Assessment Fee, and FBI Fee.
(a) Imposition of fees. (1) The following Information Collection
Fee is required for a TSA agent to collect and transmit fingerprints
and applicant information in accordance with 49 CFR part 1572: $38.
(2) The following Threat Assessment Fee is required for TSA to
conduct a security threat assessment under 49 CFR part 1572 for an
individual who applies for a new HME or renewal of an existing HME:
$34.
(3) The following FBI Fee is required for the FBI to process
fingerprint identification records and name checks required under 49
CFR part 1572: The fee collected by the FBI under 28 U.S.C. 534.
(4) An individual who applies for a new or renewed HME, or the
individual's employer, must remit to the TSA agent the Information
Collection Fee, Threat Assessment Fee, and FBI Fee, in a form and
manner approved by TSA, when the individual submits the application
required under 49 CFR part 1572.
(b) Collection of fees. A TSA agent will collect the fees required
under this
[[Page 2560]]
section when an individual submits an application to the TSA agent in
accordance with 49 CFR part 1572.
(c) Remittance of fees. (1) Fees required under this section that
are remitted to a TSA agent must be made in U.S. currency and made
payable to the ``Transportation Security Administration.''
(2) Fees required under this section must be remitted by check,
money order, wire or any other payment method acceptable to TSA.
(3) TSA will not issue any refunds of fees required under this
section.
(4) Applications submitted in accordance with 49 CFR part 1572 will
be processed only upon receipt of all applicable fees under this
section.
Issued in Arlington, Virginia, on January 10, 2005.
Carol DiBattiste,
Acting Assistant Secretary of Homeland Security for TSA.
[FR Doc. 05-773 Filed 1-11-05; 9:50 am]
BILLING CODE 4910-62-P