[Federal Register: January 25, 2007 (Volume 72, Number 16)]
[Rules and Regulations]               
[Page 3491-3604]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25ja07-13]                         
 

[[Page 3491]]

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Part II





Department of Homeland Security





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Coast Guard



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33 CFR Parts 1, 20 et al. and 46 CFR Parts 1, 4 et al.



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Transportation Security Administration



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49 CFR Parts 10, 12, and 15



Transportation Worker Identification Credential (TWIC) Implementation 
in the Maritime Sector; Final Rule



Consolidation of Merchant Mariner Qualification Credentials; Proposed 
Rule


[[Page 3492]]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 101, 103, 104, 105, 106, 125 and 46 CFR Parts 10, 12, 
15 Transportation Security Administration 49 CFR Parts 1515, 1540, 
1570, 1572 [Docket Nos. TSA-2006-24191; Coast Guard-2006-24196; TSA 
Amendment Nos. 1515-(New), 1540-8, 1570-2, 1572-7]

RIN 1652-AA41

 
Transportation Worker Identification Credential (TWIC) 
Implementation in the Maritime Sector; Hazardous Materials Endorsement 
for a Commercial Driver's License

AGENCY: Transportation Security Administration; United States Coast 
Guard, DHS.

ACTION: Final rule; request for comments.

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SUMMARY: The Department of Homeland Security (DHS), through the 
Transportation Security Administration (TSA) and the United States 
Coast Guard (Coast Guard), issues this final rule to further secure our 
Nation's ports and modes of transportation. This rule implements the 
Maritime Transportation Security Act of 2002 and the Security and 
Accountability for Every Port Act of 2006. Those statutes establish 
requirements regarding the promulgation of regulations that require 
credentialed merchant mariners and workers with unescorted access to 
secure areas of vessels and facilities to undergo a security threat 
assessment and receive a biometric credential, known as a 
Transportation Worker Identification Credential (TWIC). After DHS 
publishes a notice announcing the compliance date for each Captain of 
the Port (COTP) zone, persons without TWICs will not be granted 
unescorted access to secure areas at affected maritime facilities. 
Those seeking unescorted access to secure areas aboard affected 
vessels, and all Coast Guard credentialed merchant mariners must 
possess a TWIC by September 25, 2008. This final rule will enhance the 
security of ports by requiring such security threat assessments of 
persons in secure areas and by improving access control measures to 
prevent those who may pose a security threat from gaining unescorted 
access to secure areas of ports.
    With this final rule, the Coast Guard amends its regulations on 
vessel and facility security to require the use of the TWIC as an 
access control measure. The Coast Guard also amends its merchant 
mariner regulations to incorporate the requirement to obtain a TWIC. 
This final rule does not include the card reader requirements for 
owners and operators set forth in the Notice of Proposed Rulemaking 
(NPRM) issued in this matter on May 22, 2006. Such requirements will be 
addressed in a future rulemaking. Although the card reader requirements 
are not being implemented at this time, the Coast Guard will institute 
periodic unannounced checks to confirm the identity of the holder of 
the TWIC.
    With this final rule, TSA applies its security threat assessment 
standards that currently apply to commercial drivers authorized to 
transport hazardous materials in commerce to merchant mariners and 
workers who require unescorted access to secure areas on vessels and at 
maritime facilities. This final rule amends TSA regulations in a number 
of ways. To minimize redundant background checks of workers, TSA amends 
the threat assessment standards to include a process by which TSA 
determines if a security threat assessment conducted by another 
governmental agency or by TSA for another program is comparable to the 
standards in this rule. TSA amends the qualification standards by 
changing the list of crimes that disqualify an individual from holding 
a TWIC or a hazardous materials endorsement.
    TSA expands the appeal and waiver provisions to apply to TWIC 
applicants and air cargo employees who undergo a security threat 
assessment. These modifications include a process for the review of 
adverse waiver decisions and certain disqualification cases by an 
administrative law judge (ALJ). TSA also extends the time period in 
which applicants may apply for an appeal or waiver.
    Finally, this rule establishes the user fee for the TWIC and 
invites comment on one component of the fee, the card replacement fee.
    Under this rule, TSA will begin issuing first generation TWIC cards 
at initial port deployment locations. These TWIC cards will not 
initially support contactless biometric operations, but the TWIC cards 
will be functional with certain existing access control systems in use 
at ports today.
    TSA and the Coast Guard have established a working group, comprised 
of members of the maritime and technology industries, through the 
National Maritime Security Advisory Committee (NMSAC), a federal 
advisory committee to the Coast Guard. This working group, in 
consultation with the National Institute for Standards and Technology 
(NIST), is tasked with recommending the contactless biometric software 
specification for TWIC cards.
    TSA will publish a notice detailing the draft contactless biometric 
software specification for TWIC cards no later than the date by which 
it publishes the final TWIC fee as required by this Rule. Currently 
those notices are expected to be published in February 2007. TSA will 
subsequently publish a final specification for TWIC contactless 
biometric software functionality and the associated specifications for 
TWIC card readers. TSA plans also to write electronically the 
contactless biometric software application to all issued TWIC cards 
after publication of this specification. After initial field testing, 
this additional contactless biometric function will be included with 
all TWIC cards produced after publication of the contactless biometric 
software specification.
    Although this rule goes into effect on March 26, 2007, the 
requirements to hold a TWIC, and to restrict access to secure areas of 
a facility or OCS facility, will be effective only after the regulated 
party is notified by DHS. These notifications will be published in the 
Federal Register and will require compliance on a COTP by COTP basis. 
Those seeking unescorted access to secure areas aboard affected 
vessels, and all Coast Guard credentialed merchant mariners must 
possess a TWIC by September 25, 2008.

DATES: Effective Date: This rule is effective March 26, 2007.
    Comment Date: Comments with respect to the Card Replacement Fee 
must be submitted by February 26, 2007.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of dockets TSA-2006-24191 and Coast Guard-2006-24196 and are 
available for inspection or copying at the Docket Management Facility, 
U.S. Department of Transportation, room PL-401, 400 Seventh Street SW., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays. You may also find this docket on the Internet 
at http://dms.dot.gov.

    You may submit comments identified by docket number TSA-2006-24191 
to the Docket Management Facility at the U.S. Department of 
Transportation. To avoid duplication, please use only one of the 
following methods:
    (1) Web Site: http://dms.dot.gov.

    (2) Mail: Docket Management Facility, U.S. Department of 
Transportation, 400

[[Page 3493]]

Seventh Street SW., Room PL-401, Washington, DC 20590-0001.
    (3) Fax: 202-493-2251.
    (4) Delivery: Room PL-401 on the Plaza level of the Nassif 
Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-366-9329.
    (5) Federal eRulemaking Portal: http://www.regulations.gov.

    See SUPPLEMENTARY INFORMATION for format and other information 
about comment submissions.

FOR FURTHER INFORMATION CONTACT: For questions related to TSA's 
standards: Greg Fisher, Transportation Security Administration, TSA-19, 
601 South 12th Street, Arlington, VA 22202-4220, TWIC Program, (571) 
227-4545; e-mail: credentialing@dhs.gov.
    For legal questions: Christine Beyer, TSA-2, Transportation 
Security Administration, 601 South 12th Street, Arlington, VA 22202-
4220; telephone (571) 227-2657; facsimile (571) 227-1380; e-mail 
Christine.Beyer@dhs.gov.

    For questions concerning the Coast Guard provisions of the TWIC 
rule: LCDR Jonathan Maiorine, Commandant (G-PCP-2), United States Coast 
Guard, 2100 Second Street, SW., Washington, DC 20593; telephone 1-877-
687-2243.
    For questions concerning viewing or submitting material to the 
docket: Renee V. Wright, Program Manager, Docket Management System, 
U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, 
SW., Washington, DC 20590-0001; telephone (202) 493-0402.

SUPPLEMENTARY INFORMATION:

Comments Invited

    TSA invites comment on one provision of the rule, the Card 
Replacement Fee, as discussed in section I under Fees and section VI of 
this preamble. See ADDRESSES above for information on where to submit 
comments. With each comment, please include your name and address, 
identify the docket number at the beginning of your comments, and give 
the reason for each comment. Please explain the reason for any 
recommended change and include supporting data. You may submit comments 
and material electronically, in person, by mail, or fax as provided 
under ADDRESSES, but please submit your comments and material by only 
one means. If you submit comments by mail or delivery, submit them in 
an unbound format, no larger than 8.5 by 11 inches, suitable for 
copying and electronic filing.
    If you want TSA to acknowledge receipt of comments submitted by 
mail, include with your comments a self-addressed, stamped postcard on 
which the docket number appears. We will stamp the date on the postcard 
and mail it to you.
    TSA will file in the public docket all comments received by TSA, 
except for comments containing confidential information and sensitive 
security information (SSI)\1\, TSA will consider all comments received 
on or before the closing date for comments and will consider comments 
filed late to the extent practicable. The docket is available for 
public inspection before and after the comment closing date.
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    \1\ ``Sensitive Security Information'' or ``SSI'' is information 
obtained or developed in the conduct of security activities, the 
disclsoure of which would constitute an unwarranted invasion of 
privacy, reveal trade secrets or privileged or confidential 
information, or be detrimental to the security of transportation. 
The protection of SSI is governed by 49 CFR part 1520.
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Handling of Confidential or Proprietary Information and Sensitive 
Security Information (SSI) Submitted in Public Comments

    Do not submit comments that include trade secrets, confidential 
commercial or financial information, or SSI to the public regulatory 
docket. Please submit such comments separately from other comments on 
the rulemaking. Comments containing this type of information should be 
appropriately marked as containing such information and submitted by 
mail to the address listed in the FOR FURTHER INFORMATION CONTACT 
section. Upon receipt of such comments, TSA will not place the comments 
in the public docket and will handle them in accordance with applicable 
safeguards and restrictions on access. TSA will hold them in a separate 
file to which the public does not have access, and place a note in the 
public docket that TSA has received such materials from the commenter. 
If TSA receives a request to examine or copy this information, TSA will 
treat it as any other request under the Freedom of Information Act 
(FOIA) (5 U.S.C. 552) and the Department of Homeland Security's (DHS's) 
FOIA regulation found in 6 CFR part 5.

Reviewing Comments in the Docket

    Please be aware that anyone is able to search the electronic form 
of all comments received into any of our dockets by the name of the 
individual submitting the comment (or signing the comment, if submitted 
on behalf of an association, business, labor union, etc.). You may 
review the applicable Privacy Act Statement published in the Federal 
Register on April 11, 2000 (65 FR 19477), or you may visit http://dms.dot.gov
.

    You may review the comments in the public docket by visiting the 
Dockets Office between 9 a.m. and 5 p.m., Monday through Friday, except 
Federal holidays. The Dockets Office is located on the plaza level of 
the Nassif Building at the Department of Transportation address, 
previously provided under ADDRESSES. Also, you may review public 
dockets on the Internet at http://dms.dot.gov.


Availability of Rulemaking Document

    You can get an electronic copy of this document as well as other 
documents associated with this rulemaking on 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://

http://www.gpoaccess.gov/fr/index.html; or

    (3) Visiting TSA's Security Regulations web page at http://www.tsa.gov
 and accessing the link for ``Research Center'' at the top 

of the page.

Abbreviations and Terms Used in This Document

ALJ--Administrative Law Judge
AMS--Area Maritime Security
ASP--Alternative Security Program
CBP--Bureau of Customs and Border Protection
CDC--Certain Dangerous Cargo
CDL--Commercial drivers license
CDLIS--Commercial drivers license information system
CHRC--Criminal history records check
CJIS--Criminal Justice Information Services Division
COR--Certificate of Registry
COTP--Captain of the Port
DHS--Department of Homeland Security
DOJ--Department of Justice
DOT--Department of Transportation
FBI--Federal Bureau of Investigation
FMCSA--Federal Motor Carrier Safety Administration
FMSC--Federal Maritime Security Coordinator
FSP--Facility Security Plan
HME--Hazardous materials endorsement
HSA--Homeland Security Act
HSPD 12--Homeland Security Presidential Directive 12
MARSEC--Maritime Security
MMD--Merchant Mariner's Document
MSC--Marine Safety Center
MTSA--Maritime Transportation Security Act
NIST--National Institute of Standards and Technology

[[Page 3494]]

NPRM--Notice of Proposed Rulemaking
NVIC--Navigation and Vessel Inspection Circular
OCS--Outer Continental Shelf
REC--Regional Examination Center
SAFETEA-LU--Safe, Accountable, Flexible, Efficient Transportation 
Equity Act--A Legacy for Users
STCW--International Convention on Standards of Training, Certification, 
and Watchkeeping for Seafarers, 1978, as amended
TSA--Transportation Security Administration
TPS--Temporary Protected Status
TWIC--Transportation Worker Identification Credential
VSP--Vessel Security Plan

Table of Contents

I. Background
II. Final Rule
    A. Coast Guard Provisions
    B. TSA Provisions
    C. Changes From NPRM
    D. Anticipated Future Notices and Rulemaking
    E. Summary of TWIC Process under the Final Rule
    F. SAFE Port Act of 2006
III. Discussion of Comments
    A. Requests for Extension of Comment Period and Additional 
Public Meetings
    B. Coast Guard Provisions
    1. Definitions
    2. General Comments on Applicability
    3. Coast Guard Roles
    4. Owner/operator Requirements
    5. Requirements for Security Officers and Personnel
    6. Recordkeeping/Tracking Persons on Vessels/Security Incident 
Procedures
    7. Reader Requirements/Biometric Verification/TWIC Validation 
Procedures
    8. Access Control Issues
    9. TWIC Addendum
    10. Compliance Dates
    11. General Compliance Issues
    12. Additional Requirements--Cruise Ships
    13. Additional Requirements--Cruise Ship Terminals
    14. Additional Requirements--CDC Facilities
    15. Additional Requirements--Barge Fleeting Facilities
    16. Miscellaneous
    C. TSA Provisions
    1. Technology Concerns
    2. Enrollment Issues
    3. Appeal and Waiver Issues
    4. TSA Inspection
    5. Security Threat Assessment
    6. Immigration Status
    7. Mental Incapacity
    8. TWIC Expiration and Renewal Periods
    9. Fees for TWIC
    10. Implementing TWIC in Other Modes
    D. Comments Relating to Economic Issues
    E. Comments Beyond the Scope of the Rule
IV. Advisory Committee Recommendations and Responses
V. Rulemaking Analyses and Notices
    A. Regulatory Planning and Review (Executive Order 12866)
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism (Executive Order 13132)
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment
VI. Solicitation of Comments

I. Background

    The Department of Homeland Security (DHS), through the United 
States Coast Guard (Coast Guard) and the Transportation Security 
Administration (TSA), issues this final rule pursuant to the Maritime 
Transportation Security Act (MTSA), Pub. L. 107-295, 116 Stat. 2064 
(November 25, 2002), and the Security and Accountability for Every Port 
Act of 2006 (SAFE Port Act), Pub. L. 109-347 (October 13, 2006). 
Section 102 of MTSA (46 U.S.C. 70105) requires DHS to issue regulations 
to prevent individuals from entering secure areas of vessels or MTSA-
regulated port facilities unless such individuals hold transportation 
security cards issued under section 102 and are authorized to be in the 
secure areas. An individual who does not hold the required 
transportation security card, but who is otherwise authorized to be in 
the secure area in accordance with the facility's security plan, must 
be accompanied by another individual who holds a transportation 
security card. MTSA also requires all credentialed merchant mariners to 
hold these transportation security cards, and requires DHS to establish 
a waiver and appeals process for persons found to be ineligible for the 
required transportation security card. The SAFE Port Act contained 
amendments to the basic MTSA requirements for credentialing (concurrent 
processing, fees, card readers, program roll out, testing and 
timelines) as well as added new requirements (disqualifying crimes, new 
hire provisions and discretion as to who may obtain a TWIC). The 
substance of the SAFE Port Act is discussed in greater detail later in 
this document.
    On May 22, 2006, TSA and the Coast Guard issued a joint notice of 
proposed rulemaking (71 FR 29396), setting forth the proposed 
requirements and processes required under sec. 102 of MTSA (TWIC NPRM) 
for implementation of the TWIC program in the maritime sector. The NPRM 
proposed changes to three titles of TSA and Coast Guard regulations (33 
CFR, 46 CFR, and 49 CFR). The Department intends for these combined 
changes to increase port security by requiring all credentialed 
mariners and all persons who require unescorted access to a regulated 
facility or vessel to have undergone a security threat assessment by 
TSA and obtain a TWIC.\2\ The proposed security threat assessment 
included a review of criminal, immigration, and pertinent intelligence 
records. TSA also proposed a process for individuals denied TWICs to 
appeal adverse determinations or apply for waivers of the standards.
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    \2\ Additional information on the statutory and regulatory 
history of this rule can be found in the NPRM at 71 FR 29396 (May 
22, 2006).
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    Prior to the publication of the TWIC NPRM, the Coast Guard 
published a Notice in the Federal Register informing the public that 
the Commandant of the Coast Guard, pursuant to his authority under 50 
U.S.C. 191 and 33 CFR part 125, was exercising his authority to require 
identification credentials for persons seeking access to waterfront 
facilities and to port and harbor areas, including vessels and harbor 
craft in such areas. 71 FR 25066 (April 28, 2006). This action has 
served as an interim measure to improve security at our nation's ports 
by verifying maritime workers' identities, validating their background 
information, and accounting for access for authorized personnel to 
transportation facilities, vessels and activities. Id.
    The May 22, 2006 TWIC NPRM provided the draft regulatory text for 
review and solicited public comments for 45 days. TSA and the Coast 
Guard also held four public meetings throughout the country to solicit 
public comments. Those meetings were held on May 31, 2006 in Newark, 
New Jersey; on June 1, 2006 in Tampa, Florida; on June 6, 2006 in St. 
Louis, Missouri; and on June 7, 2006 in Long Beach, California. 
Approximately 1200 people attended these meetings. The public can view 
transcripts of the four public meetings on the public docket for this 
rulemaking action at http://www.regulations.gov. DHS also received 

approximately 1770 written comments on the TWIC NPRM. Those comments 
also can be accessed through the public docket for this action. TSA and 
the Coast Guard respond to the comments received in the ``Discussion of 
Comments'' section, below.
    Many commenters requested an extension of the comment period and 
additional public meetings. As explained more fully in the ``Discussion 
of Comments'' section below, DHS has decided not to delay 
implementation of the TWIC program by extending the

[[Page 3495]]

comment period or providing additional public meetings because it is 
imperative to begin implementation of the TWIC requirements, and 
accompanying security threat assessments, as soon as possible to 
improve the security of our Nation's vessels and port facilities. TSA 
and Coast Guard, however, have not promulgated in this final rule the 
proposed requirements on owners and operators relating to biometric 
readers. The Department will address those proposed requirements, which 
generated the majority of the comments received on the NPRM, in a 
separate rulemaking action. Interested parties will have the 
opportunity to comment on those provisions during that rulemaking 
action. Although the card reader requirements are not being implemented 
under this final rule, Coast Guard personnel will periodically, and 
without advance notice, use handheld readers to check the biometric 
information contained in the card to confirm the identity of the holder 
of the TWIC.
    On May 22, 2006, the Coast Guard also published a related proposed 
rule, ``Consolidation of Merchant Mariner Qualification Credentials,'' 
at 71 FR 29462 (MMC NPRM), proposing the consolidation of Coast Guard-
issued merchant mariner's document (MMD), merchant mariner's license 
(license), certificate of registry (COR) and International Convention 
on Standards of Training, Certification, and Watchkeeping for Seafarers 
(STCW) certificate into a single credential called the merchant mariner 
credential (MMC). The MMC NPRM proposed to streamline the application 
process, and reduce the administrative burden for the public and the 
Federal Government. The public meetings held on the TWIC NPRM also 
included time for the Coast Guard to receive comments on the MMC NPRM. 
In a separate rulemaking action published elsewhere in this edition of 
the Federal Register, the Coast Guard has provided a Supplemental 
Notice of Proposed Rulemaking (SNPRM) also entitled ``Consolidation of 
Merchant Mariner Qualification Credentials.'' The purpose of the SNPRM 
is to address comments received from the public on the MMC NPRM, revise 
the proposed rule based on those comments, and provide the public with 
an additional opportunity to comment on the revised rulemaking. If it 
becomes final, the MMC rulemaking is not expected to go into effect 
until the initial TWIC roll out is complete. This time lapse will not 
cause a detrimental effect on security, as all credentialed mariners 
will still need to comply with the TWIC requirements and compliance 
deadlines set forth in this final rule.

II. Final Rule

    Under this final rule, DHS, through the Coast Guard and TSA, 
requires all credentialed merchant mariners and individuals with 
unescorted access to secure areas of a regulated facility or vessel to 
obtain a Transportation Worker Identification Credential (TWIC).

A. Coast Guard Provisions

    Owners/operators of MTSA-regulated vessels, facilities, and Outer 
Continental Shelf (OCS) facilities will need to change their existing 
access control procedures to ensure that merchant mariners and any 
other individual seeking unescorted access to a secure area of their 
vessel or facility has a TWIC.

B. TSA Provisions

    Workers must provide biographic and biometric information to apply 
for a TWIC and pay a fee of $107-$159 to cover all costs associated 
with the TWIC program. A TWIC applicant must complete a TSA security 
threat assessment and will be disqualified from obtaining a TWIC if he 
or she has been convicted or incarcerated for certain crimes within 
prescribed time periods, lacks legal presence and/or authorization to 
work in the United States, has a connection to terrorist activity, or 
has been determined to lack mental capacity.
    All applicants have the opportunity to appeal a disqualification, 
and may apply to TSA for a waiver if disqualified for certain crimes or 
mental incapacity, or are aliens in Temporary Protected Status (TPS). 
Applicants who seek a waiver and are denied may seek review by an 
administrative law judge (ALJ). In addition, applicants who are 
disqualified under Sec.  1572.107 may seek ALJ review of the 
disqualification.
    A security threat assessment is valid for five years. Therefore, in 
most cases, a TWIC is valid for five years unless a disqualifying event 
occurs. If an applicant obtains a TWIC based on a comparable threat 
assessment under Sec.  1572.5(e), the TWIC will expire five years from 
the date on the credential associated with the comparable threat 
assessment. To renew a TWIC, the renewal applicant must provide new 
biographic and biometric information, complete a new threat assessment, 
and pay the fee to renew the credential.

C. Changes From NPRM

    Each of the changes made from the NPRM to the final rule is 
summarized in Table 1 and discussed in detail following the table.

 Table 1.--Summary of Significant Changes Between May 22, 2006 NPRM and
                             This Final rule
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            Topic                    NPRM              Final rule
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Access control...............  Visual identity  Visual identity badge;
                                badge and        Coast Guard will
                                reader (with     conduct periodic checks
                                biometric        of biometric and
                                verification     validity (second rule
                                and validity     for reader
                                check at         requirements).
                                facility/
                                vessel based
                                on MARSEC
                                level).
Escorted access..............  Definition only  Definition modified to
                                                 clarify that in
                                                 restricted areas (33
                                                 CFR 101.105),
                                                 ``escort'' means a side-
                                                 by-side escort; outside
                                                 restricted areas,
                                                 ``escort'' may consist
                                                 of monitoring.
New hires....................  Not granted      Permitted to have
                                unescorted       limited access for 30
                                access to        consecutive days if
                                secure areas     accompanied by TWIC-
                                until            holder and additional
                                successful       requirements are met.
                                completion of
                                security
                                threat
                                assessment and
                                card issuance.
Passenger access area........  Defined only     Passenger access area
                                for certain      remains and employee
                                vessels          access area for certain
                                (passenger,      vessels added (employee
                                ferries,         access areas do not
                                cruise ships).   apply to cruise ships).
TWIC Addendum and              Included.......  Excluded.
 recordkeeping requirements.
Secure area..................  Definition only  Clarified definition's
                                                 meaning in preamble,
                                                 and revised part 105 to
                                                 allow part 105
                                                 facilities to submit
                                                 FSP amendment to change
                                                 access control area.

[[Page 3496]]


Lost/Stolen/Damaged cards....  Access           Specific requirements
                                procedures       included in regulation.
                                defined in
                                TWIC Addendum.
AMS Committee members........  Need TWIC......  Need name-based check or
                                                 a TWIC.
Vessels in foreign waters....  No special       Changed secure area
                                provisions.      definition to state
                                                 that at certain
                                                 specified times, U.S.
                                                 vessels may not have
                                                 any secure areas.
Emergency responders.........  Not              Not required to obtain a
                                specifically     TWIC for emergency
                                addressed.       response.
Voluntary compliance.........  Offered........  Not offered.
Compliance dates.............  12-18 months     Phased for facilities by
                                after final      each COTP zone. All
                                rule.            mariners and vessels 20
                                                 months after the
                                                 publication date of
                                                 this final rule.
Disqualifying crimes.........  Same as those    Amended; new list will
                                used for HME.    apply for both TWIC and
                                                 HME.
Administrative law judge       Not included...  May be used for waiver
 (ALJ) review.                                   denials and
                                                 disqualifications under
                                                 Sec.   1572.107.
Immigration standards........  Limited ability  Expanded to cover
                                for non-U.S.     foreign maritime
                                citizens to      students, and certain
                                obtain TWICs.    professionals and
                                                 specialists on
                                                 restricted visas;
                                                 permitting aliens in
                                                 TPS to apply for a
                                                 waiver.
Mental incapacity............  Could only be    Waiver broadened to
                                waived by        allow for ``case-by-
                                showing court    case'' determinations.
                                order or
                                letter from
                                institution.
Fee..........................  $95-$149; card   $107-$159; card
                                replacement      replacement fee $36,
                                fee $36.         but requesting comment
                                                 on increasing this fee
                                                 to $60.
------------------------------------------------------------------------

1. Changes From Coast Guard's Proposed Rule
    Coast Guard is changing several sections of the proposed rule as a 
result of comments received and additional analysis. These changes 
include: (1) Changing the access control procedures to be used with 
TWICs by removing the reader requirements; (2) revising and clarifying 
the definition of the term ``escorting;'' (3) adding provisions 
allowing for access for individuals who are new hires and who have 
applied for, but not yet received, a TWIC; (4) adding a provision to 
allow for limited, continued unescorted access for those individuals 
who report their TWIC as lost, damaged, or stolen; (5) adding a 
provision to create ``employee access areas'' aboard passenger vessels 
and ferries; (6) removing the proposed requirement to submit a TWIC 
Addendum and keep additional records regarding who has been granted 
access privileges; (7) adding a provision to allow certain facilities 
to designate smaller portions of their property as their secure area 
via an amendment to their facility security plan; (8) removing the 
proposed requirement for all AMS Committee members to hold a TWIC; (9) 
changing the definition of secure area to state that, at certain times, 
U.S. vessels may not have any secure areas; (10) adding a provision to 
allow emergency responders to have unescorted access without a TWIC 
during emergency situations; (11) removing the provision allowing for 
voluntary compliance for those vessels and facilities not otherwise 
required to implement the TWIC requirements; and (12) revising the 
compliance dates for owners/operators of vessels and facilities.
(a). Reader Requirements
    After reviewing the comments (which are summarized below), we 
determined that implementing the reader requirements as envisioned in 
the NPRM would not be prudent at this time. As such, we have removed 
the reader requirements from the final rule, and will be issuing a 
subsequent NPRM to address these requirements. That NPRM will address 
many of the comments and concerns regarding technology that were raised 
in the below-summarized comments. We will, however, continue to require 
the use of the TWIC. As stated in the NPRM, there are considerable 
security benefits to be gained from a TWIC, even in the absence of 
reader usage. The TWIC provides greater reliability than existing 
visual identity badge systems because it presents a uniform appearance 
with embedded features on the face of the credential that make it 
difficult to forge or alter. When presented with a TWIC, security 
personnel familiar with its security features are immediately able to 
notice any absence or destruction of these features, making it less 
likely that an individual will be able to gain unescorted access to 
secure areas using a forged or altered TWIC. Additionally, the Coast 
Guard will conduct unannounced checks of the cards while visiting 
facilities and vessels. The Coast Guard will use handheld readers to 
check the biometrics on the card against the person presenting the 
card. These unannounced checks are an important component of the 
security efforts at the ports.
(b). ``Escorting''/''Unescorted Access''
    We have amended the definition of escorted access to clarify our 
intent. Namely, that the distinction between escort and unescorted 
access are to serve as performance standards, rather than strict 
definitions. We expect that, when in an area defined as a restricted 
area in a vessel or facility security plan, escorting will mean a live, 
physical side-by-side escort. Whether it must be a one-to-one escort, 
or whether there can be one escort for multiple persons, will depend on 
the specifics of each vessel and/or facility. We will provide 
additional guidance on what these specifics might be in a Navigation 
and Vessel Inspection Circular (NVIC). Outside of restricted areas, 
however, side-by-side escorting is not required, so long as the method 
of surveillance or monitoring is sufficient to allow for a quick 
response should an individual ``under escort'' be found in an area 
where he or she has not been authorized to go or is engaging in 
activities other than those for which escorted access was granted. 
Again, we will provide additional guidance with more specifics in a 
NVIC.
(c). New Hires
    We have added a new section within parts 104, 105, and 106 to 
provide owners/operators with the ability to put new hires to work once 
new hires have applied for their TWIC and an initial name-based check 
is completed. In order to ensure adequate security for the vessel and 
facility during this period, these provisions allow new hires to have 
access to secure areas for up to 30 consecutive days, so long as they 
pass a TSA name based check and are

[[Page 3497]]

accompanied by another employee with a TWIC. If TSA does not act upon a 
TWIC application within 30 days, the Coast Guard may further extend 
access to secure areas for another 30 days. Additional guidance on the 
manner in which new hires may be accompanied will be issued by the 
Coast Guard. The guidance will be in the form of a NVIC that considers 
vessel or facility size, crew or staff size, vessel or facility 
configuration, the number of TWIC holders, and other appropriate 
factors, or by making a determination on a case-by-case basis. For 
example, in some instances, where the operating environment of the 
vessel is such that there is a small crew, and there is a 24-hour live 
watchstand while underway, we expect to view the new hires as 
accompanied when the vessel owner/operator ensures that the security 
measures for monitoring and access control included within their Coast 
Guard-approved security plans are implemented. As the operating 
environment increases or becomes more complex, such as might be the 
case when Certain Dangerous Cargoes (CDCs) are present, we expect to 
require additional security measures to ensure that the new hires are, 
in fact, accompanied by an individual with a TWIC. Similar guidance 
will also be in place for larger vessels, as well as for facilities and 
OCS facilities. The NVIC will be released in the near future.
    In order to take advantage of this new hire provision, the 
following procedures must be followed:
    (1) The new hire will need to have applied for a TWIC in accordance 
with 49 CFR part 1572 by completing the full enrollment process and 
paying the user fee. He or she cannot be engaged in a waiver or appeal 
process. The owner or operator must have the new hire sign a statement 
affirming this.
    (2) The owner or operator or the security officer must enter the 
following information on the new hire into the Coast Guard's Homeport 
Web site (http://homeport.uscg.mil):

    (i) Full legal name, including middle name if one exists;
    (ii) Date of birth;
    (iii) Social security number (optional);
    (iv) Employer name and 24 hour contact information; and
    (v) Date of TWIC enrollment;
    (3) The new hire must present an identification credential that 
meets the requirements of Sec.  101.515 of this subchapter; and
    (4) There must be no other circumstances that would cause 
reasonable suspicion regarding the new hire's ability to obtain a TWIC, 
and the owner or operator or Facility Security Officer (FSO) must not 
have been informed by the cognizant COTP that the individual poses a 
security threat.
    This provision only applies to direct hires of the owner/operator; 
it cannot be used to allow temporary unescorted access to contractors, 
vendors, longshoremen, truck drivers (unless they are direct employees 
of the owner/operator), or any other visitor. This provision does not 
apply if the new hire is a Company, Vessel, or Facility Security 
Officer, or is otherwise tasked with security duties as a primary 
assignment.
    In order for the Coast Guard and TSA to verify that a new hire who 
is awaiting TWIC issuance passes an initial security review, this 
provision includes a requirement for the owner, operator, Vessel 
Security Officer (VSO) or FSO to enter new hire identifying information 
into the Coast Guard's Homeport web page. The Homeport web page is a 
secure location capable of communicating sensitive security information 
such as Vessel Security Plans (VSP) and Facility Security Plans (FSP) 
between industry and the Coast Guard. The Homeport web page address is 
http://homeport.uscg.mil. Homeport will then interface with the TSA 

system, and if a match to an enrollment record can be made, the TSA 
system will pass back to Homeport the result of the initial name-based 
check. If the result is that the new hire has been cleared, the owner/
operator/security officer can put the new hire to work under the 
provisions of this section and any guidance provided by the Coast Guard 
in a forthcoming NVIC.
    TSA will begin the security threat assessment process as soon as 
the enrollment record is complete. Generally, TSA can complete an 
initial security review within 48-72 hours based on all of the 
information provided during enrollment. Thus, in some cases (where the 
new hire information is entered into Homeport three or more days 
following enrollment), the owner/operator/security officer will not 
have to wait long before finding out if an individual has cleared the 
initial name check. We expect that Homeport will be able to notify 
owners/operators/security officers, via e-mail, when it has received an 
update on any of the new hires entered by that owner/operator/security 
officer, which will alleviate any need for them to continuously check 
in with Homeport.
    The new hire must have applied for a TWIC in accordance with 49 CFR 
part 1572 by completing the full enrollment process and paying the user 
fee. The owner/operator must have the new hire sign a statement 
affirming the enrollment, payment, and that the new hire is not 
involved in an appeal or waiver application. The owner/operator must 
retain this statement until the new hire receives a TWIC. The statement 
must be produced if the Coast Guard requests it during an inspection or 
investigation. The new hire must also present to the owner or operator 
a form of identification that meets the standard set in 33 CFR 101.515.
    It is also important to note here that a new hire may be initially 
cleared to work in the secure area under the provisions of this 
section, but be disqualified from receiving a TWIC when the full threat 
assessment is complete. The results of the criminal history records 
check (CHRC) generally will not be fully adjudicated within three days, 
and if the adjudication reveals a disqualifying criminal history, the 
new hire will not be cleared to receive a TWIC.
    The owner/operator of regulated vessels or facilities is required 
to accompany new hires in secure areas, which includes monitoring new 
hires while they are in restricted areas of the vessel or facility. 
Monitoring has the same meaning here as found in Sec. Sec.  104.285, 
105.275, and 106.275 of 33 CFR chapter I, subchapter H.
    We are also requiring owners/operators of regulated vessels and 
facilities to determine that their new hires need access to secure 
areas immediately in order to prevent adverse impact to the operation 
of the vessel or facility. Owners and operators must identify that a 
hardship exists to their operations if their new hires are not allowed 
access. This adverse impact is not the impact of simply providing 
escorts for new hires, but must be adverse impacts to the business 
itself from not being able to employ new hires immediately in secure 
areas without escort.
    Owners and operators of regulated vessels and facilities must be 
assured that there are no other circumstances that would cause 
reasonable suspicion regarding the new hire's ability to obtain a TWIC. 
This information can come through the normal hiring process, reference 
checks, or interviews. Also, if the Coast Guard, through its Captain of 
the Port (COTP), has informed the owner/operator that the new hire 
poses a security threat, the new hire may not have unescorted access to 
secure areas of the vessel or facility. Only individuals who pass a 
threat assessment and are issued a TWIC may have unescorted access to 
secure areas of the vessel or facility.

[[Page 3498]]

(d). Access for Individuals With Lost/Stolen TWICs
    Under the NPRM, we proposed requiring owners/operators to include 
alternative security procedures in the TWIC Addenda. These alternative 
procedures were to be used in various situations, such as when 
individuals needed unescorted access to secure areas but had lost their 
TWIC, had it stolen, or simply forgotten it that day. As discussed 
below, we removed the TWIC Addendum requirement from the final rule, 
but we wanted to include a provision to allow TWIC holders to continue, 
for a short period, to have unescorted access to secure areas after 
reporting their TWICs as lost, damaged, or stolen. As a result, this 
final rule includes specific procedures for owners/operators to use in 
the case of lost, damaged, or stolen TWICs. This procedure includes 
having the individual report his/her card as lost, damaged, or stolen 
to the TWIC Call Center and checking another form of identification 
that meets 33 CFR 101.515, provided there are no other suspicious 
circumstances that would cause an owner/operator to question the 
veracity of the individual. In order to prevent this procedure from 
becoming a significant loophole in the TWIC regulation, we require that 
the individual be known to have had a valid TWIC and to have previously 
been granted unescorted access, and have limited the use of the 
procedure to seven (7) consecutive calendar days. This should provide 
enough time for the replacement card to be produced and shipped to the 
nearest enrollment enter, and for the individual to travel to that 
center to pick up the replacement card.
(e). ``Employee Access Areas''
    We intended for the term ``passenger access area'' to capture those 
employees whose jobs are necessary solely for the entertainment of the 
passengers of the vessel, such as musicians, wait staff, or casino 
employees on a passenger vessel. Upon reviewing comments, however, we 
realized that there are a variety of employees who may need to enter 
non-passenger spaces, such as the galley, who would be included under 
TWIC's applicability merely because of their need to enter these areas. 
As such, we are adding a definition for ``employee access areas,'' for 
use only by passenger vessels and ferries. An employee access area is a 
defined space within the access control area of a ferry or passenger 
vessel that is open to employees but not passengers. It is not a secure 
area and does not require a TWIC for unescorted access. It may not 
include any areas defined as restricted areas in the vessel security 
plan (VSP). Note, however, that any employee that needs to have 
unescorted access to areas of the vessel outside of the passenger or 
employee access areas will need to obtain a TWIC.
(f) TWIC Addendum and Recordkeeping Requirements
    We removed the TWIC Addendum requirement from the final rule when 
we determined that the reader requirements would be delayed until a 
subsequent rulemaking. The purpose of the TWIC Addendum was to allow 
the owner/operator to explain how the readers would be incorporated 
into their overall access control structure, within the standards 
provided in the NPRM. With the removal of the reader requirements from 
this final rule, we feel it is appropriate to also remove the TWIC 
Addendum requirement. Additionally, because we envision the TWIC 
Addendum to be a part of the subsequent rulemaking on reader 
requirements, we felt it would be overly burdensome to also require a 
TWIC Addendum at this point in time.
    The recordkeeping requirements related to TWIC implementation have 
also been removed from the final rule. We had proposed the requirements 
because we believed they could be satisfied by using the TWIC readers, 
which were also proposed. Due to our decision to remove the reader 
requirements from this final rule, it makes sense to also remove the 
recordkeeping requirements that were intrinsically tied to those 
readers.
(g). Secure Area
    We did not intend for the terms ``secure area'' and ``restricted 
area'' to be read as meaning the same thing. Restricted areas are 
defined already in the MTSA regulations as ``the infrastructure or 
locations identified in an area, vessel, or facility security 
assessment or by the operator that require limited access and a higher 
degree of security protection.'' (33 CFR 101.105) Additionally, those 
regulations spell out certain areas within vessels and facilities that 
must be included as restricted areas (see 33 CFR 104.270, 105.260, and 
106.265). This final rule defines ``secure area'' as meaning the area 
over which an owner/operator has implemented security measures for 
access control. In other words, the secure area would be anything 
inside the outer-most access control point of a facility, and it would 
encompass the entirety of a vessel or OCS facility.
    We adopted this definition after much consideration, including 
consideration of making only restricted areas secure areas. We 
ultimately abandoned this option, however, when we realized that 
equating the restricted area to the secure area would have required 
that the readers and biometric verification be used at the entry points 
of each restricted area. Because some facilities and vessels have 
multiple restricted areas that are not always contiguous, this would 
have likely meant that many owners/operators would have needed more 
than one reader, increasing their compliance costs. Additionally, the 
process of repeated biometric identification could have interfered with 
the operations of facilities and vessels. Finally, we determined that 
there are areas within some facilities that are not required to be 
restricted areas that should be deemed secure areas, such as truck 
staging areas, empty container storage areas, and roads leading between 
the facility gates and the pier. Allowing persons who have not been 
through the security threat assessment or are not escorted to have 
access to these areas could provide them with the opportunity to access 
the non-restricted areas of the facility to perpetrate a transportation 
security incident (TSI). Pushing the secure area out beyond the 
restricted area makes the event of an intentional TSI less likely. As a 
result, we decided to define the secure area as the ``access control 
area,'' thus limiting the number of readers required, as well as the 
number of times biometric verification would need to take place, and 
providing for the necessary level of security outside of restricted 
areas. We note, however, that facility owners/operators have the 
discretion to designate their entire facility as a restricted area. In 
this situation, the restricted area and secure area would be one and 
the same.
    We recognize that many facilities may have areas within their 
access control area that are not related to maritime transportation, 
such as areas devoted to manufacturing or refining operations, and were 
only included within the FSP because the owner/operator did not want to 
have to install additional access control measures to separate the non-
maritime transportation related portions of their facility from the 
maritime transportation related portions. Given the new obligations of 
this TWIC final rule, however, these owners/operators may wish to 
revisit this decision. As such, we are giving facility owners/operators 
the option of amending their FSP to redefine their secure area, to 
include only those portions of their facility that are directly 
connected to maritime transportation or are at risk of being involved 
in a transportation

[[Page 3499]]

security incident. These amendments must be submitted to the cognizant 
COTP by July 25, 2007.
    We realize that there may be some owners and operators of vessels 
that would like the same option. However, vessels present a unique 
security threat over facilities in that they may not only be targets in 
and of themselves, but may also be used as a weapon. Due to this fact, 
we will continue to define the entire vessel as a ``secure area,'' 
making exception only for those special passenger and employee access 
areas which are discussed above. Vessel owners/operators need not 
submit an amendment to the VSP in order to implement these special 
areas, however they may do so, following the procedures described in 
part 104.
(h). U.S. Vessels in Foreign Waters
    Due in part to the unique operating requirements imposed on U.S. 
Offshore Supply Vessels (OSVs) and Mobile Offshore Drilling Units 
(MODUs) when operating in support of OCS facilities in foreign waters, 
we determined that we must change some language from the proposed rule. 
As such, we are adding a provision to the definition of secure area in 
Sec.  101.105 that states that U.S. vessels operating under the waiver 
provision in 46 U.S.C. 8103(b)(3)(A) or (B) have no secure areas. These 
waiver provisions allow U.S. vessels to employ foreigners as crew in 
certain circumstances. The effect of this change is to exempt these 
vessels from the TWIC requirement while they are operating under the 
referenced waivers. As soon as the vessel ceases operating under these 
waiver provisions, it will be deemed to have secure areas as otherwise 
defined, and TWIC provisions will apply.
(i). Area Maritime Security (AMS) Committee Members
    The NPRM proposed requiring all members of AMS Committees to have a 
TWIC. We recognize that large numbers of the members will either (1) 
already have a TWIC, due to their role within the security organization 
of a facility, or (2) already have undergone some type of comparable 
background screening due to their position as a Federal, State, or 
local law enforcement official. After further consideration, we believe 
that anyone not falling into one of these categories could be 
discouraged from volunteering to sit on an AMS Committee, due to the 
cost of obtaining a TWIC. This could have a detrimental effect on the 
AMS Committee, as there may be individuals who are experts in security 
who would be (and in some cases already are) valuable parts of AMS 
Committees, who would opt out of sitting on the Committee rather than 
assume the cost of obtaining a TWIC. Therefore, we have changed the 
final rule to allow AMSC members to serve on the AMSC after the 
completion of a name-based terrorist check from TSA. If an AMSC member 
requires unescorted access to secure areas of vessels or facilities 
they will be required to obtain a TWIC. If, however, they do not 
require unescorted access, but do need access to SSI, they must first 
pass a TSA name based check at no cost to the AMSC member. The Federal 
Maritime Security Coordinator for the member's particular AMSC (i.e. 
COTPs) will forward the names of these individuals to TSA or Coast 
Guard Headquarters for clearance prior to sharing SSI with these 
members.
(j). Emergency Responders
    We added a provision within 33 CFR 101.514 to allow State and local 
emergency responders to gain access to secure areas without a TWIC 
during an emergency situation. Not all emergency responders will fall 
into the category of State or local officials. We feel it is imperative 
that these individuals be allowed unescorted access to secure areas in 
an emergency situation. Emergency responders who are not State or local 
officials are encouraged to apply for a TWIC. Under the existing access 
control requirements of 33 CFR 105.255, the owner or operator has 
documented procedures for checking credentials prior to allowing access 
and will maintain responsibility for all those granted access to a 
vessel or facility, even in an emergency situation.
(k). Voluntary Compliance
    The provisions that would have allowed vessel and facility owners/
operators to implement voluntary TWIC programs have been removed. These 
provisions have been eliminated due to the fact that neither TSA nor 
the Coast Guard can, at this time, envision being in a position to 
approve voluntary compliance before the full TWIC program, (i.e., 
reader requirements) is in place. We will keep it in mind, however, as 
we develop our NPRM to repropose reader requirements.
(l). Compliance Dates
    We have also revised the compliance dates slightly. Vessels will 
now have 20 months from the publication date of this final rule to 
implement the new TWIC access control provisions. Facilities will still 
have their compliance date tied to the completion of initial enrollment 
in the COTP zone where the facility is located. This date will vary, 
and will be announced for each COTP zone at least 90 days in advance by 
a Notice published in the Federal Register. The latest date by which 
facilities can expect to be required to comply will be September 25, 
2008. Additionally, mariners will not need to hold a TWIC until 
September 25, 2008. Mariners may rely upon their Coast Guard-issued 
credential and a photo ID to gain unescorted access to secure areas to 
any facility that has a compliance date earlier than September 25, 
2008.
2. Changes From TSA's Proposed Rule
    TSA is changing several sections of the proposed rule as a result 
of comments received, new legislation, and additional analysis. The 
changes include: (1) Establishing procedures for review of waiver 
denials by an ALJ; (2) applying the hazmat and TWIC appeal procedures 
to air cargo personnel; (3) amending the list of disqualifying criminal 
offenses; (4) expanding the group of aliens who meet the immigration 
standards; (5) amending the waiver standards for applicants 
disqualified due to mental incapacity; (6) amending the fees for TWIC; 
(7) revising the standard for drivers licensed in Mexico and Canada who 
transport hazardous materials into and within the United States; and 
(8) modifying the prohibitions on fraudulent use or manufacture of TWIC 
or access control procedures.
(a). Review by Administrative Law Judge
    We noted in the NPRM that if legislation was enacted after 
publication of the final rule to require review by an Administrative 
Law Judge of the denial of waiver requests by TSA, we would include 
such a statutory mandate in the final rule. See 71 FR at 29421. The 
Coast Guard and Maritime Transportation Act of 2006, Pub. L. 109-241, 
was enacted on July 11, 2006. Section 309 of this Act requires the 
Secretary of Homeland Security to establish an ALJ review process for 
individuals denied a waiver by TSA. Accordingly, we are including the 
ALJ review procedures in new Sec.  1515.11.
    The ALJ review process set forth under Sec.  1515.11 does not alter 
the substantive criteria under which TSA will grant or deny a waiver. 
Therefore, this provision constitutes a rule of agency procedure and 
may be implemented without prior notice and comment under the 
Administrative Procedure Act, 5 U.S.C. 553(b)(A). See Hurson Assoc. 
Inc., v. Glickman, 229 F.3d 277 (D.C. Cir. 2000) (rule eliminating 
face-to-face process in agency review of requests for approval

[[Page 3500]]

was procedural and not subject to notice-and-comment rulemaking).
    The new legislation requires ALJ review to be available for denials 
of waivers. Under the rules waivers are not available for 
determinations under Sec.  1572.107 that an applicant poses a security 
threat, which usually is based on an intelligence-related check 
involving classified information. However, we have considered that 
there appears to be an intent that we provide for an ALJ review of such 
determinations, considering, for example, that the statute provides for 
ALJ review of classified information, which rarely is relevant to 
waivers under the current rules. We have also considered that the 
decision to determine whether an applicant poses a threat under Sec.  
1572.107 is largely a subjective judgment based on many facts and 
circumstances. The same is true for the decision to grant or deny a 
waiver of the standards in Sec. Sec.  1572.103 (criminal offenses), 
aliens who are in TPS under 1572.105, or 1572.109 (mental capacity). 
Accordingly, we are providing for ALJ review of both a determination 
that the applicant does not meet the standards in Sec.  1572.107, and a 
denial of a waiver of certain standards in Sec. Sec.  1572.103, 
1572.105, and 1572.109.
    An applicant who has received an Initial Determination of Threat 
Assessment based on Sec.  1572.107 may first appeal that determination 
using the procedures in new Sec.  1515.9. If after that appeal TSA 
continues its determination that the applicant is not qualified, the 
applicant may seek ALJ review under Sec.  1515.11.
    On the other hand, the determination that an applicant does or does 
not have a disqualifying criminal offense listed in Sec.  1572.103, 
immigration status in Sec.  1572.105, or mental capacity described in 
Sec.  1572.109, largely involves an analysis of the legal events that 
have occurred. Such analyses depend mainly on review of legal 
documents. We have retained in Sec.  1515.5 the paper hearing process 
for the appeal of an Initial Determination that an applicant is not 
qualified under those sections. At the end of that appeal, if TSA 
issues a Final Determination that the applicant is not qualified under 
one of those sections, the applicant may seek review in the Court of 
Appeals. At any time, however, the applicant may seek a waiver of 
certain standards in those sections on the basis that, notwithstanding 
a lack of qualification, the applicant asserts that he or she does not 
pose a security threat and thus seeks to waive the subject standards. 
The applicant initiates the request for a waiver using the procedures 
in Sec.  1515.7. If a waiver is not granted, the applicant may seek 
review by an ALJ under Sec.  1515.11.
    For consistency, we are providing the same review processes for 
hazardous materials endorsement (HME) applicants that we are providing 
for TWIC applicants.
    Paragraph 1515.11(a) of this new section specifies that the new 
process applies to applicants who are seeking review of an initial 
decision by TSA denying a request for a waiver under Sec.  1515.7 or 
who are seeking review of a Final Determination of Threat Assessment 
issued under Sec.  1515.9.
    Section 1515.11(b) allows the applicant 30 calendar days from the 
date of service of the determination to request a review. The review 
will be conducted by an ALJ who possesses the appropriate security 
clearances to review classified information. The rule sets forth the 
information that the applicant must submit. This section clarifies that 
the ALJ may only consider evidence that was presented to TSA at the 
time of application in the request for a waiver or the appeal. If the 
applicant has new evidence or information to support a request for 
waiver, the applicant must file a new request for a waiver under Sec.  
1515.7 or a new appeal under Sec.  1515.9 and the pending request for 
review will be dismissed. Section 1515.11 provides detailed 
requirements for the conduct of the review, such as requests for 
extension of time and duties of the ALJ.
    In accordance with the Coast Guard and Maritime Transportation Act, 
this section provides for ALJ review of classified information on an ex 
parte, in camera basis and consideration of such information in 
rendering a decision if the information appears to be material and 
relevant.
    Paragraph 1515.11(f) provides that within 30 calendar days after 
the conclusion of the hearing, the ALJ will issue an unclassified 
decision to the parties. The ALJ may issue a classified decision to 
TSA. The ALJ may decide that the decision was supported by substantial 
evidence on the record or that the decision was not supported by 
substantial evidence on the record. If neither party requests a review 
of the ALJ's decision, TSA will issue a final order either granting or 
denying the waiver or the appeal.
    Paragraph 1515.11(g) describes the process by which a party may 
petition for review of the ALJ's decision to the TSA Final Decision 
Maker. The TSA Final Decision Maker will issue a written decision 
within 30 calendar days after receipt of the petition or receipt of the 
other party's response. The TSA Final Decision Maker may issue an 
unclassified opinion to the parties and a classified opinion to TSA. 
The decision of the TSA Final Decision Maker is a final agency order.
    Paragraph 1515.11(h) states that an applicant may seek judicial 
review of a final order of the TSA Final Decision Maker in accordance 
with 49 U.S.C. 46110, which provides for review in the United States 
Court of Appeals. Under sec. 46110 a party has 60 days after the date 
of service of the final order to petition for review.
(b). Appeal Procedures for Air Cargo Personnel
    In the final rule we are adding the appeal procedures that 
currently apply to air cargo workers codified at 49 CFR parts 1540 to 
1515. In the NPRM TSA stated that it may use the procedures in part 
1515 for other security threat assessments, such as for air cargo 
personnel. See 71 FR at 29418. At that time the air cargo proposed rule 
had been published but was not yet final, and it proposed to use appeal 
procedures that were essentially the same as for HME applicants. The 
air cargo rule has now been made final. See 71 FR 30478 (May 26, 2006). 
Because part 1515 was not yet final in the air cargo rule, we placed 
the appeal procedures for the air cargo security threat assessment into 
part 1540 subpart C, along with other procedures that apply to air 
cargo threat assessments. In a further effort to harmonize security 
threat assessments, we are now moving the appeal procedures for air 
cargo personnel to part 1515. For consistency with the TWIC and HME 
processes we are providing for review by an ALJ as described above.
    We are also revising part 1540 subpart C to harmonize more with 
part 1572. Thus, we are replacing ``individual'' with ``applicant'' to 
refer to the person who is applying for a security threat assessment. 
We are also revising Sec.  1540.205 to read essentially the same as 
Sec.  1572.21 for TWIC, because it serves the same function. Note that 
while the procedures for TWIC refer to CHRCs and other checks, the 
procedures for air cargo personnel refer only to intelligence-related 
checks, because they are not subject to the other checks conducted on 
TWIC applicants.
(c). Disqualifying Criminal Offenses.
    In this final rule, the list of criminal acts that disqualify an 
applicant from holding an HME under 49 CFR 1572.103 now applies to TWIC 
applicants. We believe equal treatment for transportation workers is 
appropriate and consistent with the pertinent

[[Page 3501]]

statutory requirements. The standards for the HME rule were mandated by 
the Uniting and Strengthening America by Providing Appropriate Tools 
Required to Intercept and Obstruct Terrorism Act (USA Patriot Act) Pub. 
L. 107-56, 115 Stat.272 (October 25, 2001). It provides that TSA 
conduct a security threat assessment on applicants to determine if they 
pose a ``security risk.'' The USA Patriot Act was enacted shortly after 
and in response to the terrorist attacks on the United States on 
September 11. As a result, we interpreted the language ``security 
risk'' to mean a risk of terrorism or terrorist activity. Nothing in 
the statute or the legislative history of the USA Patriot Act 
contradicts this reading of the language. MTSA, enacted a year later, 
requires a security threat assessment to determine whether an applicant 
poses a ``terrorism security threat.'' We believe the security threat 
assessment required under MTSA is the same threat assessment required 
under the USA Patriot Act, even though the actual language differs 
slightly.
    In addition, TSA is making administrative and substantive changes 
to this section. In the NPRM, TSA indicated that it was considering 
changing the list of disqualifying crimes and asked for comment on the 
list. TSA received significant comments from Congress and others 
suggesting that the list of disqualifying crimes is overly broad, and 
that some crimes had more of a nexus to terrorism than others. 152 
Cong. Rec. 2120 (2006). See also Comments of House Committee on 
Homeland Security on TSA and Coast Guard's Rule to Implement TWIC, July 
6, 2006. TSA has evaluated the list of disqualifying crimes and decided 
to fine tune the list to better reflect crimes that are more likely to 
result in a terrorism security risk or a transportation security 
incident, and thus should disqualify an applicant from receiving a 
TWIC.
    TSA is making a substantive change to this section concerning the 
crimes of treason, sedition, espionage, and terrorism listed in Sec.  
1572.103(a), which are permanently disqualifying. Applicants convicted 
of these crimes are not eligible for a waiver. As we proposed to do in 
the NPRM, TSA is adding conspiracy to commit these crimes to the list 
of crimes that are not subject to a waiver request. TSA has determined 
that a conviction of conspiracy to commit espionage, treason, sedition, 
or terrorism is indicative of a serious, ongoing, unacceptable risk to 
security and should not be waived under any circumstances.
    TSA is changing the language in (a)(4) from ``a crime listed in 18 
U.S.C. Chapter 113B--Terrorism'' to ``a federal crime of terrorism as 
defined in 18 U.S.C. 2332b(g)'' or conspiracy to commit such crime, or 
comparable State law. Section 2332b(g) is a definitional list that is 
broader and more explicit than the crimes punished directly in Chapter 
113B. We are making this change to more accurately capture all 
pertinent terrorism-related crimes. Although we intended to be as 
inclusive as possible with the previous language, experts at the 
Department of Justice advise that the new language more accurately 
captures the relevant criminal acts. TSA is adding felony bomb threat 
in paragraph (a)(9) as a permanent disqualifier including maliciously 
conveying false information concerning the deliverance, placement, or 
detonation of an explosive or other lethal device against a state or 
government facility, public transportation system or an infrastructure 
facility. TSA is including this crime because it is, in essence, a 
threat to commit an act of terrorism. We note that we have disqualified 
an applicant with such crime under the authority of current paragraph 
(b)(6) dishonesty, misrepresentation, or fraud. To be clear that this 
crime is a permanent disqualifier, we are adding it as an independent 
offense in Sec.  1572.103(a)(9). This offense includes making any 
threat, or maliciously conveying false information knowing the same to 
be false, concerning the deliverance, placement, or detonation of an 
explosive or other lethal device in or against a place of public use, a 
state or government facility, a public transportation system, or an 
infrastructure facility.
    Paragraph 1572.103(a)(9) is based in part on conduct prohibited by 
several federal crimes. The first is 18 U.S.C. 844(e), which is found 
in chapter 40 (Explosive Materials) of the federal criminal code. 
Section 844(e) criminalizes the use of the mail, telephone, or other 
instrument of interstate or foreign commerce to willfully make any 
threat or maliciously convey false information knowing the same to be 
false, concerning an attempt to kill, injure, or intimidate any 
individual or unlawfully damage or destroy any building, vehicle, or 
other real or personal property by means of an explosive. This crime is 
already disqualifying under paragraph (a)(7). For inclusion in the list 
of disqualifying crimes, TSA modified this description to broaden it 
beyond a threat made through an instrument of interstate or foreign 
commerce. This change provides a disqualification for purely intrastate 
conduct that results in a felony conviction under State law. TSA also 
modified the wording found in section 844(e) to include threats of use 
of lethal weapons in addition to fire and explosives, such as 
biological, chemical, or radiological weapons. Threats to use these 
weapons are prohibited by other sections of the federal criminal code. 
See, e.g., 18 U.S.C 175 (Biological weapons); 18 U.S.C. 229 (Chemical 
Weapons); and 18 U.S.C. 2332h.
    TSA has revised the language of paragraph (b) to clarify that the 
crimes listed are disqualifying if either of the following are true: 
(1) The applicant's date of conviction is within seven years of the 
date of application; or (2) the applicant was incarcerated for that 
crime and was released from incarceration within five years of the date 
of application.
    TSA is adding the offense of fraudulent entry into seaport secure 
areas to the list of interim disqualifiers. This is a new provision in 
18 U.S.C. 1036 that we believe is particularly relevant to this 
rulemaking and any TWIC applicant.
    TSA is also clarifying in paragraph (b)(2)(iii) that money 
laundering is an interim disqualifier because it is encompassed under 
the crimes of dishonesty and fraud and can be a means of funding 
terrorism. It is known that criminals obtain money from the illegal 
sale of drugs, firearms and other contraband, launder the money to hide 
its origin and then funnel this money to terrorist groups. The money 
laundering disqualifier is limited to convictions where the laundering 
was for proceeds of other disqualifying criminal activities such as 
drugs or weapon sales.
    TSA is also clarifying that welfare fraud and passing bad checks 
will not be considered crimes of dishonesty, fraud, or 
misrepresentation for purposes of paragraph (b)(2)(iii). In some 
states, conviction for passing a bad check of $100 is a felony and so 
would be disqualifying for an HME or TWIC applicant. Similarly, a 
conviction for welfare fraud can be a felony under state law, depending 
on the circumstances of the case. TSA believes that these crimes 
generally do not have a nexus to terrorism and therefore should not be 
disqualifying under MTSA.
    TSA is moving the definitions of ``explosive,'' ``firearm,'' and 
``transportation security incident'' from Sec.  1572.3 to Sec.  
1572.103, where the terms are used. This should help to eliminate 
uncertainty about the crimes that are disqualifying. In addition, TSA 
is adopting clarifying language concerning the kind of activity that 
constitutes a ``transportation security incident.'' As required in 
Sec.  7105 of SAFETEA-LU,

[[Page 3502]]

codified at 47 U.S.C. 5103a(g)(3), the definition now makes clear that 
nonviolent labor-management activity is not considered a disqualifying 
offense.
    The list of disqualifying crimes in Sec.  1572.103 applies equally 
to TWIC and HME applicants, thus the amendments apply to both.
(d). Immigration standards
    The NPRM was drafted to permit non-resident aliens in the U.S. with 
unrestricted authorization to work here to apply for and obtain a TWIC. 
As a result of comments and the relatively common employment of foreign 
specialists in certain maritime job categories who do not have 
``unrestricted'' work authorization, we are expanding the group of 
aliens who can apply to include certain restricted work authorization 
categories.
    For purposes of this discussion, it is helpful to explain that 
there are two categories of U.S. visas: immigrant and nonimmigrant. As 
provided in the immigration laws, an immigrant is a foreign national 
who has been approved for lawful permanent residence in the United 
States. Immigrants enjoy unrestricted eligibility for employment 
authorization. Nonimmigrants, on the other hand, are foreign nationals 
who have permanent residence outside the United States and who are 
admitted to the United States on a temporary basis. Thus, immigrant 
visas are issued to qualified persons who intend to live permanently in 
the United States. Nonimmigrant visas are issued to qualified persons 
with permanent residence outside the United States, but who are 
authorized to be in the United States on a temporary basis, usually for 
tourism, business, study, or short-or long-term work. Certain 
categories of lawful nonimmigrant visas or status allow for restricted 
employment authorization during the validity period of the visa or 
status.
    TSA has carefully reconsidered the immigration standards we 
proposed in the NPRM in light of the comments we received relating to 
immigration status and our own ongoing analysis. As a result, we are 
amending the immigration standards for TWIC and HME applicants. The 
critical issues we examined and on which we rely to determine whether 
an alien should be permitted to apply for a TWIC or HME are: (1) The 
statutory language regarding immigration status; (2) the degree to 
which TSA can complete a thorough threat assessment both initially and 
perpetually on the applicant; (3) the duration of the applicant's legal 
status as of the date he or she enrolls and the degree to which we can 
control possession of a TWIC once legal status ends; (4) the 
restrictions, if any, that apply to the applicant's immigration status; 
(5) particular maritime professions that commenters stated often 
involve aliens; and (6) the checks done by the U.S. Department of State 
(State Department) or other federal agency relevant to granting alien 
status.
    With respect to non-U.S. citizens, MTSA provides that an individual 
may not be denied a TWIC unless he or she may be denied admission to or 
removed from the United States under the Immigration and Nationality 
Act (8 U.S.C. 1101, et seq.), or ``otherwise poses a terrorism security 
risk to the United States\3\.'' 46 U.S.C. 70105(c). Under this final 
rule, all applicants for TWICs must be lawfully present in the country. 
Each of the permissible classes listed in Sec.  1572.105 has, as a 
basis, lawful presence in the United States. Additionally, if the 
duration of an applicant's legal status as of the date of enrollment 
does not meet or exceed the period of validity of the credential, five 
years, we have concerns about permitting the applicant to receive a 
TWIC\4\. Given the statutory language--that we may deny a TWIC to an 
applicant who ``may be denied admission to the United States or removed 
from the United States under the Immigration and Nationality Act''--we 
believe it is not advisable and may be inconsistent with MTSA to issue 
a five-year credential to an individual whose known lawful status as of 
the date of enrollment is a much shorter time period. The statutory 
language reflects the evolving nature of immigration status and we 
believe it is a significant distinction that warrants particular 
treatment.
---------------------------------------------------------------------------

    \3\ The governing statute for immigration standards for an HME 
(49 U.S.C. 5103a) requires TSA to ``review relevant databases to 
determine the status of an alien under U.S. immigration law,'' which 
provides TSA more discretion to determine whether an alien in a 
particular immigration class should hold an HME. In order to 
maintain consistent standards among transportation workers where 
possible, the immigration standards we are establishing in this 
final rule for TWIC applicants will also apply to HME applicants. 
However, as a threshold matter, HME applicants must first meet the 
standards to hold a commercial driver's license promulgated by the 
U.S. Department of Transportation, which may include immigration 
status.
    \4\ The TSA system is not currently programmed to issue 
credentials with varying expiration dates; all TWICs will expire 
five years from the date on which they were issued. We plan to 
explore modifying aspects of the TSA system as the program matures.
---------------------------------------------------------------------------

    Changes to alien status occur frequently and are difficult to track 
accurately in real time and perpetually, both of which are necessary to 
ensure that a TWIC holder remains in legal status. Where we can achieve 
a level of certainty that the applicant will not possess a TWIC longer 
than his or her lawful presence and commenters have indicated there is 
a need for certain short-term aliens to hold a TWIC, we will consider 
issuing them a credential.
    Many aliens in lawful nonimmigrant status are not eligible to work 
in the United States or their employment authorization is restricted in 
some way, usually to the particular sponsoring employer or entity. With 
the exception of students in valid M-1 nonimmigrant status who are 
enrolled in the U.S. Merchant Marine Academy or a comparable State 
school and must complete vocational training, we do not believe it 
would be consistent with MTSA to permit lawful nonimmigrants that are 
ineligible to work or conduct business in the United States to apply 
for a TWIC. Also, if the employment restriction placed on the 
nonimmigrant generally prevents the individual from working in a 
maritime facility or vessel, we do not believe a TWIC should be 
granted. The final rule now lists the nonimmigrant classifications with 
restricted employment authorization that have a nexus to the maritime 
industry. Aliens in these nonimmigrant categories with restricted 
employment authorization may apply for a TWIC notwithstanding the fact 
that their immigration status may expire in less than five years, 
because we are requiring additional measures to ensure that the TWIC 
expires after the employment that requires unescorted access to secure 
areas ends.
    The final rule now requires employers of TWIC holders who are 
lawful nonimmigrants with restricted authorization to work to retrieve 
the applicant's TWIC when the job for which the nonimmigrant status was 
granted is complete. The employer in this situation should be well 
aware that the employment status has ended because the visa was issued 
to facilitate a specific job or employment with the employer. However, 
if an employer terminates the employment relationship with the alien 
working on a restricted visa, or that alien quits working for the 
employer, the employer is required to notify TSA within 5 days and 
provide the TWIC to TSA if possible. Additionally, all applicants must 
return their TWIC to TSA when they are no longer qualified for it, and 
a visa applicant's TWIC expires when either the employment ends or the 
visa expires. These requirements should minimize the likelihood that an 
alien will continue to possess a TWIC and have unescorted access to 
secure areas

[[Page 3503]]

of the maritime industry after his or her legal status to do so 
expires.
    The requirement to return a TWIC to TSA when the pertinent 
employment ends does not apply to employers of lawful nonimmigrants 
with unrestricted authorization to work or employers of unrestricted 
lawful nonimmigrants. Under the immigration laws, the status assigned 
to an alien carries with it the determination that the individual may 
work in the United States with or without restriction. Where the alien 
status includes employer sponsorship as a condition of legal presence, 
we believe it is appropriate to require the employer to return the 
credential to TSA once that relationship ends. However, in the cases of 
alien status that do not carry employment restrictions, we do not 
believe it is advisable at this time to require any employer action. 
The lawful nonimmigrant who is not under employment restriction may 
cease working for an employer and maintain legal status. Retrieving the 
TWIC at this point would not be appropriate. If the applicant loses 
lawful status, under the rule, he or she must report any disqualifying 
offense to TSA and surrender the TWIC. In addition, the enrollment 
record for each applicant contains contact information for employers, 
and if TSA determines that an applicant has lost legal status, we would 
generally have the information necessary to contact the employer and 
the TWIC holder.
    To satisfy the second prong of MTSA's immigration status 
requirement, that a TWIC holder does not pose a terrorism security 
threat to the United States, TSA considers a variety of factors. TSA 
must be able to conduct a comprehensive threat assessment of the 
applicant. As in all of TSA's security threat assessment programs, we 
will conduct a comprehensive threat assessment of each applicant upon 
enrollment, and then will vet the applicants perpetually using 
appropriate databases throughout the five-year term of the TWIC. We 
consider the initial and perpetual vetting to be equally important in 
maintaining a high level of confidence in the TWIC population. To the 
extent that a full threat assessment cannot be completed on an 
applicant initially or perpetually, TSA has concerns about granting 
that applicant unescorted access to secure areas of maritime facilities 
and vessels.
    Many immigration statuses change over time, and TSA generally is 
not in a position to perpetually vet the immigration status of an 
applicant. We are reluctant to provide a five-year TWIC under these 
circumstances unless we achieve some level of control over the actual 
credential through the applicant's employer to minimize the likelihood 
that an alien who has lost lawful status keeps the credential.
    A significant component of a comprehensive security threat 
assessment is a fingerprint-based criminal history records check for 
arrests, indictments, wants, warrants, and serious felony convictions. 
If we are unable to complete such a check because we cannot access the 
criminal records of the country in which an applicant has lived for 
many years, we have concerns that we cannot make an accurate assessment 
of the individual. Many U.S. workers commented on this fact, in some 
cases asserting that U.S. citizens are held to a higher standard than 
workers born abroad because of the inability to do a complete criminal 
records check on foreign-born applicants. We do not believe that this 
situation alone constitutes justification to deny non-citizens a TWIC, 
particularly since U.S. citizens may be born abroad, or spend 
substantial time abroad. However, it does give rise to a legitimate 
security concern. Consequently, we must make every effort to minimize 
the likelihood that someone with malicious intent can enter the United 
States legally or illegally, hide significant prior criminal or 
terrorist activity, and obtain unescorted access to secure areas of the 
maritime industry.
    To reduce the likelihood that TWICs will be issued to someone with 
malicious intent, we are changing the immigration standards in a 
variety of ways to reduce those eligible for TWICs to only those 
individuals on whom the Department of State and/or DHS can perform an 
adequate security review. First, we are not permitting certain aliens 
in lawful nonimmigrant status with unrestricted employment 
authorization to apply for a TWIC. We are not permitting aliens in 
valid S-5 or S-6 lawful nonimmigrant status with unrestricted 
authorization to work in the United States to apply for a TWIC. 
Individuals who are in S-5 and S-6 lawful nonimmigrant status are 
informants providing information relating to criminal or terrorist 
organizations. Typically, individuals who are able to provide this kind 
of information to law enforcement personnel in the United States have 
been engaged in criminal or terrorist activity themselves. For this 
reason, we believe they pose a security risk and should not be granted 
a TWIC. Additionally, this status is granted to no more than 250 
individuals per year, and so the likelihood that preventing these 
individuals from applying for a TWIC would adversely impact a 
significant number of applicants or the maritime industry is virtually 
nonexistent. Finally, the S-5 and S-6 status requires frequent contact 
with U.S. law enforcement personnel for approximately three years, 
after which time the applicant may be recommended for lawful permanent 
resident status. After these individuals satisfy the conditions of 
their status and become lawful permanent residents, the risk they 
initially present would effectively be mitigated and they would be 
permitted to apply for a TWIC.
    We do not believe it is advisable to permit lawful nonimmigrants in 
K-1 or K-2 status to apply for a TWIC. These individuals include the 
fianc[eacute]s and minor children of fianc[eacute]s of U.S. citizens. 
Their lawful status expires in just four months. We believe these 
individuals can be escorted under the final rule until they obtain 
permanent or other lawful status.
    Aside from holders of the S-5 and S-6 and K-1 and K-2 statuses all 
lawful nonimmigrants with unrestricted authorization to work in the 
United States may apply for a TWIC.
    Second, we are revising the rule to treat U.S. nationals, that is, 
principally American Samoans, as we treat U.S. citizens.\5\ We 
accomplished this change by adding a definition to the rule for 
``National of the United States,'' which means a citizen of the United 
States or an individual who owes permanent allegiance to the United 
States. This change is consistent with longstanding principles of 
immigration law and we believe would not introduce a security threat. 
Similarly, the final rule permits citizens of the Federated States of 
Micronesia, the Republic of the Marshall Islands, and Palau who have 
been admitted as nonimmigrants under the Compacts of Free Association 
between the United States and those countries to apply for a TWIC. The 
United States has entered into treaties with these countries that 
afford their citizens preferred treatment. For instance, citizens of 
these countries may reside indefinitely and work in the United States 
without restriction. Therefore, we believe it is appropriate to permit 
these individuals to apply for a TWIC.
---------------------------------------------------------------------------

    \5\ Note that Swains Island has been incorporated into American 
Samoa and thus does not need a separate reference. (48 USC 1662) In 
addition, this includes nationals of the Commonwealth of the 
Northern Mariana Islands.
---------------------------------------------------------------------------

    Third, in response to many comments about the use of foreign 
professionals in the maritime industry for specialty work, we are 
permitting certain lawful

[[Page 3504]]

nonimmigrants with restricted authorization to work in the United 
States to apply for a TWIC. There is a longstanding practice of 
employing non-U.S. citizens to complete specialized maritime tasks, 
such as maintaining vessel engines and motors. In addition, many 
international maritime companies transfer staff from abroad into the 
United States for short or long-term periods, and many of these 
individuals must work at maritime facilities or on vessels. Denying 
this segment of the industry the opportunity to apply for a TWIC could 
adversely impact maritime operations and economic vitality. However, to 
mitigate our concerns about the inability to complete a thorough 
initial and perpetual threat assessment on individuals who have not 
lived in the United States for any significant period of time and who 
are authorized to remain in the United States for less than five years, 
we are adding requirements for employers and affected workers to return 
the TWIC to TSA when the job is completed or the worker otherwise 
ceases employment with the company.
    We received a comment concerning aliens who are religious personnel 
in valid R-1 lawful nonimmigrant status with restricted employment 
authorization. The commenter noted that vessel crew members may request 
spiritual guidance or religious services when their vessel docks at a 
port in the United States, and religious workers in valid R-1 status 
should be permitted to apply for a TWIC to board the vessel. Seafarer 
Welfare Advocates are eligible for TWICs as long as they meet the TWIC 
rulemaking eligibility requirements; however, there are no exemptions 
for aliens holding R-1 visas. We believe that individuals with R-1 
visas can be escorted because any individual providing religious 
services to crew members on a vessel would be on board the vessel for 
relatively short periods of time and would most likely be in the 
company of TWIC holders during that time. While we do not believe that 
these individuals need to hold a TWIC to carry out their religious or 
spiritual functions, they may apply and will be issued TWICs if they 
meet the eligibility requirements.
    Fourth, we are permitting students of the United States Maritime 
Academy and comparable State maritime colleges in valid M-1 lawful 
nonimmigrant status to apply for a TWIC. These individuals clearly have 
a need for unescorted access to maritime facilities and vessels as they 
complete their vocational training in the United States.
    Fifth, we are adding individuals who are in TPS to the group of 
applicants who may apply for a waiver. Temporary Protected Status is a 
temporary immigration status granted to eligible nationals of 
designated countries. The Secretary may designate a country for TPS 
when it is determined that (1) there is an ongoing armed conflict in 
the state and, due to that conflict, return of nationals to that state 
would pose a serious threat to their personal safety; (2) the state has 
suffered an environmental disaster resulting in a substantial, 
temporary disruption of living conditions, the state is temporarily 
unable to handle adequately the return of its nationals, and the state 
has requested TPS designation; or (3) there exist other extraordinary 
and temporary conditions in the state that prevent nationals from 
returning in safety.
    TPS beneficiaries are not required to leave the United States and 
may obtain work authorization for the initial TPS period and for any 
extensions of the designation. TPS does not automatically lead to 
permanent resident status. A TPS designation may be effective for a 
minimum of 6 months and a maximum of 18 months. Before the end of the 
TPS designation period, the conditions that gave rise to the TPS 
designation are reviewed. Unless a determination is made that those 
conditions are no longer met, the TPS designation will be extended for 
6, 12, or 18 months. If the conditions that led to the TPS designation 
are no longer met, the TPS designation is terminated. Designations, 
extensions, terminations and other documents regarding TPS are 
published in the Federal Register. Currently, nationals of Somalia, 
Sudan, Burundi, Honduras, Nicaragua, and El Salvador have TPS status in 
the United States.
    In many cases, TPS status for a particular country will remain in 
place for several years. Thus, nationals of these countries may be in 
the United States for a decade or more and establish a record that TSA 
can effectively review for a security threat assessment. Based on this 
and the unrestricted work authorization, we have determined that under 
certain circumstances, TPS recipients should be permitted to hold a 
TWIC. Our ability to complete a thorough threat assessment and the 
record that is disclosed during the threat assessment will be critical 
factors in determining if a waiver should be granted to a TPS 
recipient. In addition, letters of reference from employers, teachers, 
and religious or spiritual personnel are also important to reach a 
determination on a waiver. Part 1515 lists the information TSA reviews 
in making waiver determinations, which now also apply to TPS 
recipients.
    Finally, on October 17, 2006 Congress passed the John Warner 
National Defense Authorization Act for Fiscal Year 2007 (P.L. 109-364). 
In that Act, Congress amended 46 U.S.C. 8103 to permit an alien allowed 
to be employed in the U.S. under the Immigration and Nationality Act 
who meets additional requirements for service as a steward aboard large 
passenger vessels to obtain an MMD. Since all MMD holders must obtain a 
TWIC, we have extended this statutory requirement to TWIC as well. 
Individuals who would satisfy the statutory requirements would most 
likely, if not always, possess a C-1/D Crewman Visa. The C-1/D visa has 
been added to the list of acceptable restricted nonimmigrant visas.
    Table 2 indicates the types of visas that a lawful nonimmigrant 
with a restricted visa must hold in order to demonstrate eligibility to 
apply for a TWIC.

Table 2.--Types of Visas That a Nonimmigrant With a Restricted Visa Must
                                  Hold
------------------------------------------------------------------------
                      Nonimmigrant
       Visa          classifications        Description/information
------------------------------------------------------------------------
C-1/D............  Combined Transit    For alien crewmen serving in good
                    and Crewman Visa.   faith in a capacity required for
                   8 CFR 214.2(c)(D).   normal operation and service on
                                        board a vessel who intends to
                                        land temporarily and solely in
                                        pursuit of his calling as a
                                        vessel crewman.
E-1..............  Treaty Trader (see  For nationals of a country with
                    8 CFR               which the United States
                    214.2(e)(1)).       maintains a treaty of commerce
                                        and navigation who is coming to
                                        the United States to carry on
                                        substantial trade, including
                                        trade in services or technology,
                                        principally between the United
                                        States and the treaty country,
                                        or to develop and direct the
                                        operations of an enterprise in
                                        which the national has invested.
                                        The employee must intend to
                                        depart the United States upon
                                        the expiration or termination of
                                        E-1 status.

[[Page 3505]]


E-2..............  Treaty Investor     An alien employee of a treaty
                    (see 8 CFR          investor, if otherwise
                    214.2(e)(2)).       admissible, may be classified as
                                        E-2 if the employee is in or is
                                        coming to the United States to
                                        engage in duties of an executive
                                        or supervisory character, or, if
                                        employed in a lesser capacity,
                                        the employee has special
                                        qualifications that make the
                                        alien's services essential to
                                        the efficient operation of the
                                        enterprise. The employee must
                                        have the same nationality as the
                                        principal alien employer. In
                                        addition, the employee must
                                        intend to depart the United
                                        States upon the expiration or
                                        termination of E-2 status.
E-3..............  Australian in       The E-3 is a new visa category
                    Specialty           only for Australians coming to
                    Occupation.         the U.S. to work temporarily in
                                        a specialty occupation.
H-1B.............  Specialty           Persons who will perform services
                    Occupations (see    in a specialty occupation which
                    8 CFR               requires theoretical and
                    214.2(h)(4)).       practical application of a body
                                        of highly specialized knowledge
                                        and attainment of a
                                        baccalaureate or higher degree
                                        or its equivalent (in the
                                        specialty) as a minimum
                                        requirement for entry into the
                                        occupation in the US.
H-1B1............  Free Trade          Foreign nationals of countries
                    Agreement (FTA)     which have Free Trade Agreements
                    Professional Visa   with the United States and are
                    (H-1B1).            engaged in a specialty
                                        occupation are eligible for the
                                        H-1B1 FTA Professional Visa
                                        [Free Trade Agreement (FTA)
                                        Professional Visa]. A U.S.
                                        employer must furnish a job
                                        letter specifying the details of
                                        the temporary position
                                        (including job responsibilities,
                                        salary and benefits, duration,
                                        description of the employing
                                        company, qualifications of the
                                        applicant) and confirming the
                                        employment offer.
L-1..............  Executive,          An alien who within the preceding
                    managerial.         three years has been employed
                                        abroad for one continuous year
                                        by a qualifying organization may
                                        be admitted temporarily to the
                                        United States to be employed by
                                        a parent, branch, affiliate, or
                                        subsidiary of that employer in a
                                        managerial or executive
                                        capacity, or in a position
                                        requiring specialized knowledge.
O-1..............  Extraordinary       An alien who has extraordinary
                    Ability or          ability in the sciences, arts,
                    Achievement.        education, or athletics, which
                                        has been demonstrated by
                                        sustained national or
                                        international achievement.
TN...............  North American      The nonimmigrant NAFTA
                    Free Trade          Professional (TN) visa allows
                    Agreement (NAFTA)   citizens of Canada and Mexico,
                    visas for           as NAFTA professionals, to work
                    Canadians and       in the United States.
                    Mexicans.
M-1..............  Vocational student  This visa category is for a fixed
                                        time needed to complete the
                                        course of study and training.
                                        For purposes of the final rule,
                                        only students who are attending
                                        the U.S. Merchant Marine Academy
                                        or comparable State maritime
                                        school and hold this visa are
                                        permitted to apply for a TWIC.
------------------------------------------------------------------------

    We are making an additional change to the application information 
required of TWIC applicants who are not U.S. nationals. In 49 CFR 
1572.17, we are requiring all aliens to bring to enrollment the 
documents that verify the immigration status they are in as of the date 
of enrollment. We will examine the documents to ensure that the 
applicant is eligible to apply for a TWIC under the immigration 
standards and then scan the documents into the TSA system so that they 
become part of the enrollment record.
    In addition, we are requiring drivers with commercial licenses from 
Canada to provide a Canadian passport at enrollment, if they do not 
hold a Free and Secure Trade (FAST) card \6\. We know that Canadian 
TWIC applicants who hold a FAST card have completed a thorough 
background check by the Canadian government. However, Canadian 
provinces do not always require Canadian citizenship or in some cases, 
lawful presence, when issuing a drivers license. Therefore, we do not 
believe it is advisable to issue a TWIC based solely on a Canadian 
driver's license. We are not requiring this of Mexican-licensed drivers 
who apply for a TWIC because they must obtain border crossing documents 
to enter the United States, which are issued after the Mexican 
government has completed a review of the individual and determined they 
are Mexican citizens or are lawfully present in Mexico.
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    \6\ The FAST program is a cooperative effort between the Bureau 
of Customs and Border Patrol (CBP) and the governments of Canada and 
Mexico to coordinate processes for the clearance of commercial 
shipments at the U.S.-Canada and U.S.-Mexico borders. Participants 
in the FAST program, which requires successful completion of a 
background records check, may receive expedited entrance privileges 
at the northern and southern borders.
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(e). Mental Incapacity
    TSA is changing the waiver process to permit applicants who in the 
past have been involuntarily committed to a mental health facility or 
declared mentally incapable of handling their affairs to apply for a 
waiver without always having to provide documentation showing that the 
disqualifying condition is no longer present, as we have previously. 
For example, there may be cases in which an individual has an addiction 
to drugs or alcohol and is involuntarily committed to a mental health 
facility to complete rehabilitation. If the individual wishes to apply 
for a waiver, documents showing that applicant completed rehabilitation 
successfully would be critical to TSA's determination on the waiver 
request. The individual may no longer use illegal drugs or drink 
alcohol, but technically they may still have an addiction. Therefore, 
we believe TSA should decide these waiver requests on a case-by-case 
basis. The documentation submitted to TSA in support of the waiver 
request will be very important in making the waiver determination. 
Applicants and/or their representatives should carefully consider and 
include all available information TSA can use to determine if the 
applicant poses a security threat.
(f). Fees
    Section 520 of the 2004 DHS Appropriations Act, Pub. L. 108-90, 
requires TSA to collect reasonable fees for providing credentialing and 
background investigations in the field of transportation. Fees may be 
collected to pay for the costs of: (1) Conducting or obtaining a CHRC; 
(2) reviewing available law enforcement databases, commercial 
databases, and records of other governmental and international 
agencies; (3) reviewing and adjudicating requests for waivers and 
appeals of TSA decisions; and (4) other costs related to

[[Page 3506]]

performing the security threat assessment or the background records 
check, or providing the credential. Section 520 requires that any fee 
collected must be available only to pay for the costs incurred in 
providing services in connection with performing the security threat 
assessment, or the background records check, or providing the 
credential. The funds generated by the fee do not have a limited period 
of time in which they must be used. They can be used until they are 
fully spent. TSA has also established the fees in this final rule 
pursuant to the requirements of the General User Fee Statute (31 U.S.C. 
9701), which requires fees to be fair and based on: (1) Costs to the 
government; (2) the value of the service or thing to the recipient; (3) 
public policy or interest served; and (4) other relevant facts.
    In this final rule, TSA uses slightly different terminology to 
describe the three types of fees and their segments than was used in 
the NPRM. The Standard TWIC Fee is the fee that an applicant would pay 
to obtain or renew a TWIC. The Standard TWIC Fee contains the following 
segments:
     Enrollment Segment (referred to as the ``Information 
Collection/Credential Issuance Fee'' in the NPRM),
     Full Card Production/Security Threat Assessment (STA) 
Segment (referred to as the ``Threat Assessment/Credential Production 
Fee'' in the NPRM), and
     FBI Segment (referred to as the ``FBI Fee'' in the NPRM).
    The Reduced TWIC Fee is the fee an applicant would pay to obtain a 
TWIC when the applicant has undergone a comparable threat assessment in 
connection with an HME, a FAST card, or other threat assessment, as 
provided in Sec.  1572.5(e), or holds an MMD or License as provided in 
Sec.  1572.19(b). The Reduced TWIC fee is made up of the following 
segments:
     Enrollment Segment, and
     Reduced Card Production/STA Segment (referred to as the 
``reduced fee for the Security Threat Assessment/Credential Production 
Fee'' in the NPRM).
    The Card Replacement Fee is the fee that an applicant would pay to 
replace a credential that has been lost, stolen, or damaged and is made 
up of the Card Replacement Segment.
    In the TWIC NPRM, TSA proposed to set the Standard TWIC Fee at 
$129-149, including the Enrollment Segment of $45-65, the Full Card 
Production/Security Threat Assessment (STA) Segment of $62, and the FBI 
Segment of $22. TSA proposed that the Reduced TWIC Fee be set at $95-
115, including the Enrollment Segment of $45-65 and the Reduced Card 
Production/STA Segment of $50.\7\ TSA proposed that the Card 
Replacement Fee, composed of the Card Replacement Segment, be set at 
$36. See 71 FR at 29405, 29428-29431.
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    \7\ While the proposed rule text at Sec.  1572.503(2) indicated 
that the Reduced TWIC Fee included both the Enrollment Segment and 
the Reduced Card Production/STA Segment, it erroneously listed the 
fee at $50. The total for this fee was correctly stated in the 
preamble as $95. See 98 FR at 29045.
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    In this final rule, TSA establishes the Standard TWIC Fee at $139-
159, including the Enrollment Segment of $45-65, the Full Card 
Production/STA Segment of $72, and the FBI Segment of $22.\8\ The total 
Reduced TWIC Fee is set at $107-127, including the Enrollment Segment 
of $45-53 and the Reduced Card Production/STA Segment of $62.
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    \8\ If the FBI changes its fee in the future, TSA will collect 
the amended fee.
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    In this final rule, TSA establishes the Replacement Card Fee of 
$36, as was in the NPRM. TSA's analysis shows that this fee is costed 
out at $60, but is not including that amount in the final rule due to 
the large difference in amount from the NPRM. TSA proposes in this 
final rule to change the Replacement Card Fee to $60 based on the 
reevaluation of costs elements discussed below, and requests comments 
only on this fee. See Request for Comments in Section VI.
    Table 3 compares the NPRM per person fee and segments amounts to 
the final rule per person fee and segments amounts:
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    \9\ While this rule sets a Card Replacement Fee of $36, TSA is 
proposing that the Card Replacement Fee be increased to $60 and is 
seeking comment only on the Card Replacement Fee. See Request for 
Comments Section VI.

                           Table 3.--TWIC Per Person Fee Segments--NPRM vs. Final Rule
----------------------------------------------------------------------------------------------------------------
                                                       NPRM         Final rule      $ Increase      % Increase
----------------------------------------------------------------------------------------------------------------
                Standard TWIC Fee
Enrollment Segment..............................         $45-$65         $45-$65
Full Card Production/STA Segment (for                         62              72             $10
 Individuals requiring a full STA)..............
FBI Segment:....................................              22              22
                                                 ---------------------------------------------------------------
    Total.......................................         129-149         139-159              10        7.86-6.7
                Reduced TWIC Fee
Enrollment Segment..............................           45-65           45-65
Reduced Card Production/STA Segment (for                      50              62              12
 Individuals not requiring a full STA):.........
                                                 ---------------------------------------------------------------
    Total.......................................          95-115         107-127              12       12.6-10.4
              Card Replacement Fee
Card Replacement Segment........................              36          60 \9\              24            66.7
----------------------------------------------------------------------------------------------------------------

    No applicant will be required to pay a fee until after TSA 
publishes this notice in the Federal Register.
Cost Components
    The NPRM identified the cost components from which the proposed 
fees were calculated. These are the same components that were used to 
calculate the final fees. However, the fees themselves have changed for 
the reasons described in this section. Since publication of the NPRM, 
the TWIC program has reevaluated the cost estimates that drive the TWIC 
fees. Table 4 lists the cost components of the TWIC Program as 
estimated for the NPRM and compares them to the costs estimated for the 
final rule. These cost components are used to derive the TWIC fees that 
must be collected to fully recover program costs.

[[Page 3507]]



                                            Table 4.--5-Year Total TWIC Cost Components--NPRM vs. Final Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Standard TWIC     Reduced TWIC         Card
                  Cost components                          NPRM          Final rule    Percent change        fee              fee        replacement fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enrollment/Issuance................................      $65,212,285      $65,980,199               1               X                X            X\10\
Threat Assessments \11\............................       42,463,118       32,120,927             -24               X           X \12\   ...............
IDMS...............................................       18,783,000       44,190,882             135               X                X                X
Card Production....................................       20,427,000       28,346,657              39               X                X                X
Program Support....................................       22,641,000       18,810,786             -17               X                X                X
                                                    --------------------------------------------------
    Total..........................................      169,526,403      189,449,451              12
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown by Table 4, some of the cost components decreased from the 
NPRM costs estimates, while some increased. The Enrollment/Issuance  
cost component increased by approximately 1 percent due to further 
analysis that indicated a need to account for the contractor fee 
associated with replacing a lost, stolen, or damaged card. This 
contractor fee is estimated at $5. This card re-issuance cost within 
the Card Replacement Fee was not included as part of the NPRM estimate.
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    \10\ While the majority of the Enrollment/Issuance requirements 
have already been satisfied by the applicant through initial 
enrollment, there are still some enrollment/issuance functions 
associated with these card replacements, such as overhead. 
Therefore, these applicants will not be burdened with the normal 
enrollment/issuance cost component.
    \11\ The Threat Assessments, IDMS, Card Production and Program 
Support Components makeup the Card Production/STA and the FBI 
Segments.
    \12\ While the majority of the Threat Assessment requirements 
have already been satisfied by the applicant through participation 
in a previous security fee, there are still some threat assessment 
functions associated with these applicants, such as CSOC activities. 
Therefore, these applicants will pay the Reduced Card Productions/
STA Segment.
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    The Threat Assessments cost component decreased overall by 
approximately 24 percent. While the costs associated with adjudication 
by ALJs have been added, cost reductions for perpetual vetting and 
threat assessment gateway account for the overall reduction.
    The IDMS cost component increased based on a re-evaluation of the 
overall IDMS costs. The program office identified: (1) The need to 
increase the hardware and software required to obtain a Security 
Certification & Accreditation, and to support the full volume of TWIC 
applicants; (2) system changes required to address security 
vulnerabilities; and (3) increases in contractor support necessary for 
systems operations and maintenance. The total increase is estimated at 
$19 per credential produced.
    The Card Production cost increased by approximately 39 percent 
based on two factors. First, in order to produce cards more rapidly 
during the initial enrollment, additional shifts were required at the 
card production facility. This decision was made in order to address 
comments to the NPRM that cards needed to be produced as quickly as 
possible. Second, TSA and Coast Guard received comments to the NPRM on 
the need to support contactless biometric authentication based on the 
harsh conditions of the maritime environment and operational 
efficiencies. In order to address these comments TSA and the Coast 
Guard have established a NMSAC working group to recommend a contactless 
TWIC technology specification. Second, we have added a fee to cover 
future technology-related product improvements to the TWIC system and 
credential. Technology improvements occur rapidly and in order to take 
advantage of the efficiency these improvements provide, we must plan 
for that cost. Building in the cost of technology and system 
improvements is a common practice for programs that rely so heavily on 
software and hardware to collect and transmit large amounts of 
information.
    The Program Support cost decreased by approximately 17 percent 
because the program office reevaluated and decreased program staffing 
levels required to support the maritime population after the initial 
maritime enrollment period. Additionally, Program Support costs related 
to interagency communication requirements also decreased. These cost 
reductions resulted in approximately a $2 per card decrease.
    The discussion below describes the cost components associated with 
each type of fee, Standard, Reduced and Card Replacement. Although the 
overall program costs increased by approximately 12 percent, the three 
types of TWIC fees did not increase by 12 percent as each fee is 
composed of different cost components.
    The per person cost segments for the Standard TWIC Fee are derived 
from all five of the cost components in the Total TWIC Cost Components 
table above--Enrollment/Issuance, Threat Assessments,\13\ IDMS, Card 
Production, and Program Support. Note that the IDMS, Card Production, 
Program Support cost components makeup the Card Production/STA and FBI 
segments of the Standard and Reduced TWIC Fees. The net increase in the 
total for the Standard TWIC Fee is based primarily on the increase of 
the IDMS and Card Production cost components, as described above in the 
analysis of the TWIC cost components.
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    \13\ The Threat Assessment cost component includes the FBI 
Segment of the Standard TWIC Fee.
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    The per person cost segments for the Reduced TWIC Fee are also 
derived from five of the cost components in the Total TWIC Cost 
Components Table 4--Enrollment/Issuance, Threat Assessments,\14\ IDMS, 
Card Production, and Program Support. The net increase in the Reduced 
TWIC Fee is based on the reevaluation of the cost components, as 
described in the analysis of the TWIC cost components above. It should 
be noted that the reduced fee does not include the entire Threat 
Assessments cost component. Because the Reduced TWIC Fee does not 
include this entire cost component, this fee does not entirely benefit 
from the reduction in the Threat Assessments cost component, and 
therefore, increased at a greater percentage than the Standard TWIC 
Fee.
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    \14\ As stated in footnote 11, although the majority of the 
Threat Assessment requirements have already been satisfied by the 
applicant through participation in a previous security fee, there 
are still some threat assessement functions associated with these 
applicants.
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    The per person cost for the Card Replacement Fee is derived from 
four of the cost components in the Total TWIC Cost Components Table 4--
Enrollment/Issuance,\15\ IDMS, Card Production, and Program Support. 
The net increase in the Card Replacement Fee of $24 is based on the 
reevaluation of the cost components, as described in the analysis of 
TWIC cost components

[[Page 3508]]

above. It should be noted that this fee does not include the entire 
Enrollment/Issuance cost component or any of the Threat Assessments 
cost component. Because this fee does not include the Threat 
Assessments cost component, this fee does not benefit from the 
reduction in the Threat Assessments cost component. Thus, the Card 
Replacement Fee has increased at a greater percentage than the Standard 
and Reduced TWIC Fees. Because this fee is substantially higher than 
that in the NPRM, TSA is establishing $36 as the fee in this rule but 
is proposing to increase the fee to $60 and is providing the public an 
opportunity to submit additional comments on the card replacement fee. 
See Request for Comments in Section VI.
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    \15\ As