Adjustment of Certain Fees of the Immigration Examinations Fee Account

AGENCY:

Immigration and Naturalization Service, Justice.

ACTION:

Final rule.

SUMMARY:

This rule adjusts the fee schedule of the Immigration Examinations Fee Account (IEFA) for certain immigration and naturalization applications and petitions, as well as the fee for the fingerprinting of applicants who apply for certain immigration and naturalization benefits. Fees collected from persons filing these applications and petitions are deposited into the IEFA and used to fund the full cost of processing immigration and naturalization applications and petitions and associated support benefits; the full cost of providing similar benefits to asylum and refugee applicants; and the full cost of similar benefits provided to other immigrants, as specified in the regulation, at no charge. This rule ensures that the fees will allow the Immigration and Naturalization Service (Service) to process applications and petitions that it expects to receive in fiscal year (FY) 2002 and FY 2003 and to provide funding to other programs that receive IEFA funds.

DATES:

This final rule is effective February 19, 2002. Applications or petitions mailed, postmarked, or otherwise filed, on or after this date require the new fee.

FOR FURTHER INFORMATION CONTACT:

Paul Schlesinger, Chief, Immigration Services Branch, Office of Budget, Immigration and Naturalization Service, 425 I Street NW., Room 5307, Washington, DC 20536, telephone (202) 314-3410.

SUPPLEMENTARY INFORMATION:

I. Introduction

The Service published a proposed rule in the Federal Register on August 8, 2001, at 66 FR 41456, to adjust certain fees of the IEFA. The fee adjustments are necessary to comply with specific federal immigration laws and the federal user fee statute and corresponding regulations and guidance, which require federal agencies to charge a fee for services when such services provide special benefits to recipients that do not accrue to the public at large. The revised fees are calculated to recover the full costs of providing these special benefits. The proposed rule was published with a 60-day comment period, which closed on October 9, 2001. The Service received 467 comments pertaining to the increases to the fees of the IEFA. The final rule implements the fee structure as outlined in the proposed rule, without change. Any applications or petitions mailed, postmarked, or otherwise filed, on or after February 19, 2002 will require the new fee.

Comments were received from a broad spectrum of individuals and organizations, including 5 refugee and immigrant service organizations, 17 public policy and advocacy groups, 5 attorney organizations, 129 past and present adopting parents, and 311 concerned citizens or prospective citizens. All of the comments were carefully considered before preparing this final rule. The following is a discussion of these comments and the Service's response.

II. Summary of Comments

A. Form I-600/600A, Petition To Classify an Orphan as an Immediate Relative/Application for Advance Processing of Orphan Petitions

One hundred and thirty comments were received expressing dissatisfaction with the fee increases associated with Forms I-600 and I-600A, Petition to Classify an Orphan as an Immediate Relative, and the Application for Advance Processing of Orphan Petition, respectively. All 130 comments received were similar in nature. The commenters indicated that these fees discriminated against United States citizens who wished to adopt abandoned children living in orphanages around the world.

For the Service, adjudication of the I-600 and I-600A “orphan petitions” has been a priority. This commitment is established in the regulations at 8 CFR 204.3(a)(2). Specifically, orphan petitions are filed at District Offices and adjudicated by senior District Adjudication Officers. This is due to both the complexity of the international adoption process in general and the process of adjudication required by law and regulation. In addition, because of the sensitivity of international adoptions, handling these cases in District Offices by experienced officers allows for personalized customer service.

The Service may be in constant contact with the petitioner throughout the process of a U.S. citizen's effort to adopt a child from abroad. The earliest contact may be a request for information and forms, followed by the filing of the I-600A and the home study. The adjudication of the I-600A petition requires knowledge of state law requirements regarding adoptions, including pre-adoption requirements in certain states, such as counseling. Each petition must be accompanied by a home study, for which there are state requirements as well as federal requirements. Since there is no single national standard, it makes sense to handle these in District Offices that are better able to stay on top of ever-changing state requirements and establish effective local liaisons.

The home study process is complex and often the adjudicator needs to request that additional information be provided in the home study. When the child to be adopted is identified, further information and contact may ensue. Documentation is usually added to the petition as the adoption process progresses. It is not unusual for a case to be with the Service for many months, demanding an intense and protracted level of customer service. There is a great deal of communication in person, telephonically, and in writing, between the Service, adoption agencies, social workers, prospective adoptive parents, and, often, congressional offices on these cases.

The home study review makes this petition particularly labor-intensive. The adjudicator is tasked with the careful review of the home study, perhaps 10-20 pages long, addressing a number of issues including, any history of abuse and history of arrests. This information is carefully compared against Federal Bureau of Investigation (FBI) fingerprint checks. If necessary, the officer must request and review the arrest dispositions of petitioners with criminal records. When there are discrepancies, the home study must be revised or supplemented to include the new information and consider the impact it has on the placement.

The I-600 petition establishes eligibility of a child as an orphan. Adjudication of these petitions requires the Service to determine if the child meets the regulatory definition of an orphan. Accordingly, the adjudicator must develop and maintain a level of expertise in the laws and processes governing adoption in countries from which children are adopted. This assessment may require working with the Department of State or Service offices to verify the validity of documents and interpretation of laws regarding international adoptions in countries other than the United States.

Finally, the I-600 adjudication also includes an I-604 investigation. The I-604, Request for and Report on Overseas Orphan Investigation, is used to document the investigations that must be completed in every orphan case before the I-600 can be approved. This includes: the child's birth name, and date/place of birth; where the child lives, and if the child lives at an orphanage or with someone other than the biological parent(s), how and why that placement occurred; the child's physical and mental condition, and information about any known physical or mental illnesses (e.g. is the child a special needs child); if the child has siblings and, if so, if the child lives with the brothers or sisters; information concerning the child's biological parents and the determination that the child is an orphan because he/she has a “remaining parent”, “sole parent” or “surviving parent” (as defined in the regulations); and any other pertinent facts that the investigation uncovers. The purpose of the investigation is to verify that the child is an orphan, address specific concerns articulated by the adjudicating officer or consular officer that can only be resolved by an investigation, and resolve significant differences between the facts presented in the advanced processing application (Form I-600A or an I-600 approved by an INS office in the United States). The investigation is conducted at the overseas visa-issuing post by INS, or by the Department of State if there is no INS office at that U.S. Embassy or Consulate. An I-604 investigation often entails travel to a remote location to establish whether or not a child is actually an orphan. In many countries, a field investigation may require 2 or 3 days away from the office. Not every case requires a field investigation, however, a certain percentage of cases must have one, if only as an auditing tool.

Since the Service relies on fees to recover the full cost of processing immigration and naturalization benefits, the increase in fees for the I-600 and I-600A to $460 is necessary to recover the full costs associated with processing orphan petitions. Accordingly, the Service will charge a fee of $460 for processing Forms I-600 and I-600A.

B. How Will INS Improve Service?

One hundred and twenty-three comments were received opposing the increase in the fees given the current level of services provided by the Service. Many people noted the lengthy waiting times to process their benefit applications as well as the need to improve overall customer service.

Although the Service has made significant progress in improving productivity in the areas of naturalization and adjustment of status applications over the last few years, the Service continues to work toward improving efficiencies in all aspects of its service. At his confirmation hearing before the Senate Judiciary Committee, Commissioner James W. Ziglar clearly stated his commitment to improving customer service:

If I am confirmed for this position, my primary goal will be to insure that every person who comes into contact with the Immigration and Naturalization Service (INS), regardless of their citizenship, the circumstances of their birth or any other distinguishing characteristic, and regardless of the circumstances under which they find themselves within the ambit of the INS, will be treated with respect and dignity, and without any hint of bias or discrimination. The first impression is a lasting impression and we have only one opportunity to make a first impression—the first impression of America should be that of a compassionate, caring, and open nation of opportunity.

The Service is committed to building and maintaining an immigration services system that provides immigration information and benefits in a timely, accurate, consistent, courteous, and professional manner. To support this commitment, the Service has developed a plan to eliminate backlogs and obtain a 6-month processing time standard for all applications and petitions. The plan outlines an aggressive 5-year strategy to reduce the backlogs. By the end of FY 2003, the Service expects to reach a national average processing time of 6 months or less for all applications and petitions. By the end of FY 2004, the Service intends to reduce the processing times to 6 months or less at every Service office. The Service will use the remaining 2 years to continue improving the infrastructure to ensure that backlogs do not recur in the future. The Service is committed to improve the current information technology and business processes to eliminate all backlogs.

To achieve these results, the Service will: (1) Set backlog reduction milestones by application for every office, (2) assign staffing resources to offices based on a comprehensive workload analysis, (3) monitor office accomplishments of the backlog reduction milestones, and (4) establish performance incentives for individual offices to meet and exceed the backlog reduction milestones.

The Service is applying a $5 surcharge to each application and petition to recover information technology and quality assurance costs associated with application processing. These costs were not included previously. The Service believes that this approach will ensure the resources necessary to support streamlined business processes, including on-line filing and case status inquiry via telephone or on-line; and expand quality assurance efforts to ensure the accurate and consistent adjudication of benefits.

It is also important to note that restructuring of the Service will result in improved services by clearly separating its conflicting missions of service and enforcement, clarifying its priorities, and ensuring adequate resources to carry out its mission.

C. Why INS Believes the Fee Increases Are Reasonable

One hundred and forty-nine comments stated that the fee increase was either too high or too burdensome on those applying for immigration and naturalization benefits. Many commenters noted that the Service only recently increased the majority of fees.

The Service is increasing fees by an average of $20 per application/petition, or 17 percent. The current fees, which were most recently increased in 1998, were based on a fee review that began in 1996 and was completed in 1997. Those fee levels reflected costs in 1997.

Other than the $5 per application surcharge for quality assurance and information technology, the fee schedule is based solely on the recovery of costs for general cost-of-living increases since 1997, not from the period in which the fees were implemented. Bearing this in mind, the increase in fees on an annual basis equates to a less than 4 percent average increase. In this context, the Service believes the fee increases are reasonable.

With regard to the fingerprint fee, this is the first time the fee was ever reviewed for the purpose of full cost recovery. As stated in the proposed rule, Congress directed the Service to implement changes to its fingerprint process in a short timeframe. To the extent that the revised fee may be viewed by some as a significant increase over the current fee, such an increase is both necessary and justified in an effort to recover the full cost of providing the service in accordance with applicable fee setting laws, regulations, and guidance.

The Service does have the ability to waive fees on a case-by-case basis. Any applicant or petitioner who has an inability to pay the fees may request a fee waiver from either a District or Service Center Director depending on where the petition/application is to be filed. Service regulations at 8 CFR 103.7(c) concerning the granting of fee waivers is posted on the Service Web site at www.ins.usdoj.gov.

D. Why INS Is Raising the Fees Instead of Seeking Additional Sources of Funding

Thirty-eight of the commenters encouraged the Service to seek additional sources of funding from Congress instead of relying solely on fees. From FY 1989 to FY 1998, the fees collected and deposited into the IEFA have been the sole source of funding for immigration and naturalization benefits. In creating the IEFA, Congress intended that the activities supported by this account be self-sustaining, and not be funded by tax dollars (P.L. 100-459). The Service has been managing this account consistent with federal law and congressional direction. In the past, however, fees did not recover the full costs of processing applications and petitions. In an effort to eliminate the backlog this created, Congress provided additional appropriated resources. With this support, the Service dramatically improved productivity for naturalization and adjustment of status benefit applications.

The President included $100 million in the FY 2002 budget request as the first installment of a multi-year effort to support elimination of backlogs and overall improvements in service. The funding sources for the $100 million installment are $20 million from the Premium Processing fee and $80 million in appropriations. In contrast to the new fees that will recover the full costs of processing newly filed immigration benefit applications, the $100 million budget request will provide funding for reduction and elimination of the current backlog of immigration benefit applications. The Service will use this supplemental funding for the backlog elimination plan primarily to finance the costs of term staffing increases. Without this additional staff, the Service cannot process enough immigration benefit applications to meet the processing time goals and backlog reduction milestones. The Service will also use this supplemental funding to recover the costs to develop a performance incentives program for all Service offices.

E. How Will INS Provide Consistent Service?

Five of the commenters opposed increasing fees when service varies so greatly from office to office. The Service recognizes the need for a consistent level of service among offices. As previously stated, the Service's backlog elimination plan includes a two-step effort to achieve processing time goals for all immigration benefit applications. In the first step, the Service will reduce national average processing times to 6 months or less by the end of FY 2003. In the second step, the Service will achieve the processing time goals of 6 months or less in every Service office by the end of FY 2004. This fee schedule will begin to bring consistency of processing at all field offices, as well as ensure that backlogs do not recur in the future.

F. Why INS Believes the Fee Methodology Captures Full Costs

Two of the commenters objected to the methodology used to calculate the proposed fees. Some of the commenters felt that the activity-based costing methodology calculated fees based upon inefficient practices.

The fee review adhered to the guidance contained in the Office of Management and Budget (OMB) Circular A-25, User Charges, which requires that user charges imposed recover the full cost to the Government for providing a special benefit. In addition, the Federal Accounting Standards Advisory Board (FASAB) provides additional guidance on the meaning of full-cost recovery. In FASAB Statement No. 4, full cost is defined as:

The total amount of resources used to produce the output. This includes direct and indirect costs that contribute to the output regardless of funding sources. It also includes costs of supporting services provided by other responsibility segments or entities.

The fees reflect the full cost of processing immigration and naturalization benefits. The review was conducted consistent with the requirements of subsection 205(a)(8) of the Chief Financial Officers Act of 1990, Pub. L. 101-576, 104 Stat. 2838 (1990) (31 U.S.C. 902(a)(8)), which requires a biennial review of user fees to ensure that full costs are being recovered.

G. Why Do the Fees Pay for Unrelated Expenses?

Two of the commenters opposed the use of the applicant fees to pay for expenses that they perceived to be for unrelated services, such as the running of the asylum, refugee, parole, and the Cuban-Haitian Entrant programs. In the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1991, Pub. L. 101-515, 104 Stat. 2101 (1990), Congress authorized the Service to provide certain immigration and naturalization services at no cost to the applicants. Subsection 210(d)(2) of Public Law 101-515 states that “fees for providing adjudication and naturalization services may be set at a level that will ensure recovery of the full costs of providing all such services, including the costs of similar services provided without charge to asylum applicants or other immigrants. Such fees may also be set at a level that will recover any additional costs associated with the administration of the fees collected.” (8 U.S.C. 1356(m)). As a result of this legislation, Congress no longer provided the Service with an appropriation to cover the costs of asylum and refugee services, and directed the Service to fund these costs with revenue from the IEFA.

In FY 1996, Congress also authorized the Service to pay for the cost of the Cuban-Haitian Entrant Resettlement Program from the IEFA. See H.R. Conf. Rep. No. 104-378, at 83 (1995). In FY 1997, Congress transferred the cost of other asylum and refugee services that had been paid from the Violent Crime Trust Fund to the IEFA. See Pub. L. 104-208, 110 Stat. 3009 (1996). Through explicit legislative language and subsequent appropriation action, Congress has signaled its desire that certain asylum and refugee services should be provided at no charge to the recipient. The revenue to pay for these costs must be recovered from the fees charged to other applicants for immigration and naturalization benefits. All expenses being included for cost recovery are consistent with federal law and federal accounting standards.

Many of these commenters also opposed the Service paying for costs that are unusual or atypical when compared to the usual costs in a normal processing year. They claimed that the type of organizational activities that the Service is currently engaged in, such as infrastructure building, should not be funded by current applications and must not be included in the fee calculation. Proper accounting treatment requires inclusion of unusual or atypical costs, such as improvement of automation activities or upgrading of records management. These types of costs were assigned a useful life, and the cost of these projects amortized or depreciated over the assigned useful life. Therefore, a portion of the unusual or atypical cost has been included in the fee calculation framework for the current year and treated like any other cost based on the useful life assigned to that asset.

H. Fee Increases Are Necessary

Seventeen comments were received in favor of the fee increases. Commenters noted several reasons for this:

(1) Current fees are too low given the benefit received;

(2) taxpayers should not pay for the increasing costs of providing immigration and naturalization benefits; (3) fee increases are justified given the increasing demand for immigration and naturalization benefits over the last several years; and (4) fee increases are necessary in order to increase the current level of services.

I. Separate Versus Blended Fee Schedule

In the proposed rule, the Service requested comments on whether it should set separate fee schedules for FY 2002 and FY 2003 versus the proposed single, blended schedule effective for both years. The Service also noted that commenters might want to consider whether changing fee schedules would unduly confuse applicants and petitioners.

The Service received one comment on this subject. The commenter was in favor of a separate year fee schedule. The commenter noted that a separate, single year fee schedule will allow applicants to follow fee increases in relation to yearly inflation figures, making it easier to understand why fees increased more in one year versus another. The Service respectfully disagrees. Upon consideration of the issue, the Service has decided that changing fees every year will create unnecessary confusion with applicants and practitioners. Therefore, the Service will proceed with the single, blended fee schedule.

J. Review of the Fee for LIFE Act Adjustment of Status Applications (I-485)

In the proposed rule, the Service questioned whether it should change the established $330 fee for filing legalization applications under section 1104 of the Legal Immigration Family Equity Act, Pub. L. 106-553, 114 Stat. 2762 (2000) (LIFE Act). In establishing the fee, on an interim final basis on June 1, 2001, the Service first identified the adjustment of status application (Form I-485) process as most similar to the new legalization application process. 66 FR 29661, 29667 (June 1, 2001). The Service then referred to the 1999 fee review, which identified an estimated full cost of the Form I-485 to be $330. Id. at 29,668.

The Service questioned the methodology and limited nature of the 1999 fee review and proposed that the Form I-485 fee be $255. Id. The Service then said it would review the $330 fee established for filing legalization applications. Id.

Although no comments were received on this subject, the Service has reviewed the Form I-485 fee for legalization applications and has deemed it fair and reasonable to reduce the fee from $330 to $255, and refund the difference to those who have already paid the $330 fee. The Service will undertake a separate rulemaking to notify the public of the timing for this action.

III. Fee Adjustments

The fee adjustments, as adopted in this rule, are shown as follows:

Regulatory Flexibility Act

The Attorney General, in accordance with 5 U.S.C. 605(b), has reviewed this regulation and by approving it has determined that this rule will not have a significant economic impact on a substantial number of small entities.

The majority of applications and petitions are submitted by individuals and not small entities as that term is defined in 5 U.S.C. 601(6). The Service acknowledges, however, that a number of small entities, particularly those filing business-related applications and petitions, such as Forms I-140, Immigrant Petition for Alien Worker; I-526, Immigrant Petition by Alien Entrepreneur; and I-829, Petition by Entrepreneur to Remove Conditions may be affected by this rule. For FY 2001, the Service projects approximately 130,000 Forms I-140, 400 Forms I-526, and 400 Forms I-829 will be filed. However, this volume represents petitions filed by a variety of businesses, ranging from large multi-national corporations to small domestic businesses. The Service does not collect data on the size of the businesses filing petitions, and therefore does not know the number of small businesses that may be affected by this rule. Even if all of the employers applying for benefits met the definition of small businesses, the resulting degree of economic impact would not require a Regulatory Flexibility Analysis to be performed.

Unfunded Mandates Reform Act of 1995

This rule will not impose a mandate of enforceable duty on State, local, and tribal governments in the aggregate, or on the private sector, and it will not significantly or uniquely affect small governments. Accordingly, no further actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is a major rule as defined by the Small Business Regulatory Enforcement Act of 1996, Public Law 104-121, 110 Stat. 847 (1996). Based on the data included in the proposed rule, this rule will result in an annual effect on the economy of $169 million, in order to generate the revenue necessary to fund the increased expenses of processing the Service's immigration and naturalization applications and petitions. The increased fees will be paid by persons who file applications or petitions to obtain immigration benefits.

Executive Order 12866

This rule is considered by the Department of Justice to be an economically “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, because it will have an annual effect on the economy of over $100 million. Without the fee adjustments, the Service estimates that it will collect approximately $815 million in fees for immigration and naturalization benefits in FY 2002. If the fee adjustments become effective on January 1, 2002, the Service anticipates collecting approximately $942 million in FY 2002—$127 million in additional revenue.

The projected increase in revenues may overstate the actual receipt of applications and petitions since fewer applications and petitions may be filed due to the implementation of the higher fees. The decrease in volume due to the higher fees has a real economic effect in that there may be fewer people applying for and receiving benefits paid for by the Service's user fees.

This increase in revenue will be used to fund the processing of immigration and naturalization applications and petitions. The revenue increase is based on the Service's costs and workload volumes. The volume of applications and petitions filed is projected based on a regression analysis of a 5-year history of actual applications and petitions received by the Service. The regression analysis is adjusted for any anticipated or actual changes in laws, policies, or procedures that may affect future filing patterns. The proposed fees will be paid by an estimated 6.6 million individuals and businesses filing immigration and naturalization applications and petitions. Accordingly, this regulation has been reviewed by the Office of Management and Budget (OMB).

Executive Order 13132

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, the Department has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

Executive Order 12988

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995, Public Law 104-13, 109 Stat. 163 (1995), all Departments are required to submit to OMB, for review and approval, any reporting or recordkeeping requirements inherent in a final rule. This rule does not impose any new reporting or recordkeeping requirements under the Paperwork Reduction Act.

However, it should be noted that the Service solicited public comments on the change of fees in the proposed rule which was published in the Federal Register on August 8, 2001. It should also be noted that the changes to the fees will require changes to the application/petition forms to reflect the new fees. As a result of the changes to the forms, the Service will be submitting the forms to OMB for its approval.

List of Subjects in 8 CFR Part 103

• Administrative practice and procedure
• Authority delegations (Government agencies)
• Freedom of Information
• Privacy
• Reporting and recordkeeping requirements
• Surety bonds

Accordingly, part 103 of chapter I of title 8 of the Code of Federal Regulations is amended as follows:

PART 103—POWERS AND DUTIES OF SERVICE OFFICERS; AVAILABILITY OF SERVICE RECORDS

1. The authority citation for part 103 continues to read as follows:

Authority: 5 U.S.C. 552, 552(a); 8 U.S.C. 1101, 1103, 1304, 1356; 31 U.S.C. 9701; E.O. 12356, 47 FR 14874, 15557; 3 CFR, 1982 Comp., p. 166; 8 CFR part 2.

2. In § 103.7, paragraph (b)(1) is amended by revising the entry “For fingerprinting by the Service” and by revising the entries for the following forms. The revisions read as follows: