Adjustment of the Immigration Benefit Application Fee Schedule

AGENCY:

Bureau of Citizenship and Immigration Services, Department of Homeland Security.

ACTION:

Proposed rule.

SUMMARY:

This rule proposes to adjust the fee schedule of the Immigration Examinations Fee Account (IEFA) for immigration benefit applications and petitions, as well as the fee for capturing biometric information of applicants/petitioners who apply for certain immigration benefit applications and petitions. Fees collected from persons filing immigration benefit applications are deposited into the IEFA and used to fund the full cost of providing immigration 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 proposes to adjust the immigration benefit application fees by approximately $55 per application, and increases the biometric fee by $20, in order to ensure sufficient funding to process incoming applications.

DATES:

Written comments must be submitted on or before March 4, 2004.

ADDRESSES:

Please submit written comments to the Director, Regulations and Forms Services Division, Bureau of Citizenship and Immigration Services (BCIS), Department of Homeland Security, 425 I Street NW., Room 4034, Washington, DC 20536. To ensure proper handling, please reference CIS No. 2233-02 on your correspondence. You may also submit comments electronically at rfs.regs@dhs.gov. When submitting comments electronically, you must include CIS No. 2233-02 in the subject box so that your comments can be properly routed to the appropriate office. Comments and other docketed materials (including additional information regarding the rate-setting process) are available for public inspection at the above address by calling (202) 514-3206 to arrange for an appointment.

FOR FURTHER INFORMATION CONTACT:

Paul L. Schlesinger, Acting Budget Director, Office of Budget, U.S. Citizenship and Immigration Services, 425 I Street NW., Room 5307, Washington, DC 20536, telephone (202) 514-3206.

SUPPLEMENTARY INFORMATION:

What Legal Authority Does BCIS Have To Charge Fees?

Section 286(m) of the Immigration and Nationality Act (INA) provides for the collection of fees at a level that will ensure recovery of the full costs of providing adjudication and naturalization services, including the costs of providing similar services without charge to asylum applicants and other immigrants. [8 U.S.C. 1356(m).] The INA further states that the fees may recover administrative costs as well. This revenue remains available to provide immigration and naturalization benefits and the collection, safeguarding, and accounting for fees. [8 U.S.C. 1356(n).]

The BCIS must also conform to the requirements of the Chief Financial Officers Act of 1990 (CFO Act), Public Law No. 101-576, 104 Stat. 2838 (1990). Section 205(a)(8) of the CFO Act requires each agency's Chief Financial Officer to “review, on a biennial basis, the fees, royalties, rents, and other charges imposed by the agency for services and things of value it provides, and make recommendations on revising those charges to reflect costs incurred by it in providing those services and things of value.” Id., 104 Stat. at 2844, 31 U.S.C. 902(a)(8).

What Federal Cost Accounting and Fee Setting Standards and Guidelines Were Used in Developing These Fee Changes?

The authority provided by section 286(m) of the INA permits BCIS to recover the full costs of providing all immigration adjudication and naturalization services, including those services provided to individuals other than those paying fees. When developing fees for services, the BCIS also looks, to the extent applicable, to the cost accounting concepts and standards recommended by the Federal Accounting Standards Advisory Board (FASAB). The FASAB was established in 1990, and its purpose is to recommend accounting standards for the Federal Government. The FASAB defines “full cost” to include “direct and indirect costs that contribute to the output, regardless of funding sources.” Federal Accounting Standards Advisory Board, Statement of Financial Accounting Standards No. 4: Managerial Cost Accounting Concepts and Standards for the Federal Government 36 (July 31, 1995). To obtain full cost, FASAB identifies various classifications of costs to be included, and recommends various methods of cost assignment. Id. at 36-42. Full costs include, but are not limited to, an appropriate share of:

(a) Direct and indirect personnel costs, including salaries and fringe benefits such as medical insurance and retirement;

(b) Physical overhead, consulting, and other indirect costs, including material and supply costs, utilities, insurance, travel and rents or imputed rents on land, buildings, and equipment; and,

(c) Management and supervisory costs.

Full costs are determined based upon the best available records of the agency.

How Is the Processing of Immigration Benefit Applications Funded and Supported?

In 1988, Congress established the IEFA. See Public Law No. 100-459, sec. 209, 102 Stat. at 2203. Since 1989, fees deposited into the IEFA have been the primary source of funding for providing immigration and naturalization benefits, and other benefits as directed by Congress. In subsequent legislation, Congress directed use of IEFA revenue to fund the cost of asylum processing and other services provided to immigrants at no charge. See Public Law No. 101-515, sec. 210(d)(2), 104 Stat. at 2121. Consequently, the immigration benefit application fees were increased to recover these additional costs.

The current immigration benefit application fees are based on the review conducted in 1997 adjusted for cost of living increases (most recently on February 19, 2002) (66 FR 65811). The current fees also include a $5 per immigration benefit application surcharge to recover information technology and quality assurance costs. This surcharge allows BCIS to improve upon the delivery of services to its customers such as offering electronic filing for certain immigration benefit applications.

With reference to the biometric fee, the Department of Justice Appropriations Act, 1998, Public Law No. 105-119, 111 Stat. 2440, 2448 (1997), authorized the collection of a fee for fingerprinting applicants for certain immigration benefits. Id. The fees are deposited into the IEFA established by 8 U.S.C. 1356(m)-(p). The current fee is $50.

How Are the Application Fees Changing in This Rule?

A. National Security Enhancements

In processing immigration benefit applications, BCIS is making national security a high priority. Since July 2002, BCIS has added security checks to the processing of all immigration benefit applications to help ensure that those who receive immigration benefits have come to join the people of the United States in building a better society and not to do harm.

The process of performing security checks has been designed to compare information on applicants, petitioners, beneficiaries, derivatives and household members who apply for an immigration benefit on a BCIS immigration benefit application against various Federal lookout systems.

The purpose of conducting security checks is to help law enforcement agencies identify risks to the community and/or to national security and to prevent ineligible individuals from obtaining immigration benefits. BCIS performs two routine checks; one when the application is initially received, and one at the time of adjudication.

This change in the manner in which BCIS processes immigration benefit applications has increased processing costs because the costs of performing these checks were not factored into the initial fee schedule. As a result, existing resources have been diverted in order to perform the additional security checks until the fees could be adjusted to cover these costs.

To determine the impact on resources of the additional security checks, BCIS developed a methodology to identify the additional time or “level of effort” needed to perform the additional security checks by an adjudicator, since time is a key factor in determining immigration benefit application fees.

In identifying the average time for the additional security checks, BCIS employed a time and motion study through on-site visits to various field offices. To collect a representative sample, BCIS reviewed adjudications at small, medium, and large-sized field offices. To ensure the integrity of the process, BCIS personnel interviewed those who performed the security checks on various immigration benefit applications, validated the times through random observations, and revalidated those times with BCIS personnel.

BCIS calculated the total time requirements using average check times, average number of checks per application, as well as application volumes (using number of applications received for the initial check and number of applications completed for the adjudications check). The total time was then converted into the total cost of performing the additional security checks.

The analysis revealed an annual cost of about $140 million to recover the costs of security enhancements. This equates to a $21 per application charge.

B. Program Enhancements and New Activities

The rule proposes adjusting the fees to cover an annual cost of about $46 million to support other program enhancements and new activities. This equates to a $7 per application charge. A description of these activities follow.

Improving Refugee Processing. Currently, the BCIS Office of Refugee Affairs (ORA) has neither the workforce nor the management structure needed to meet the processing challenges facing BCIS overseas, particularly in the wake of the September 11, 2001 terrorist attacks and the resulting security mandates. ORA relies on temporary duty personnel borrowed from other BCIS programs, in particular the Asylum Program, to meet virtually all its processing responsibilities. When refugee processing was largely confined to well-defined caseloads at limited and easily accessible locations, small numbers of temporary duty personnel were usually able to generate enough refugee approvals to meet refugee admissions goals. However, as the U.S. Refugee Program (USRP) continues to focus on more diverse, at-risk populations and to attempt to increase the responsiveness of the USRP to these populations, it is increasingly difficult for it to meet its responsibilities with the limited flexibility and resources that can be provided by other programs with equally critical missions. Therefore, BCIS plans to establish a refugee corps with dedicated staff focused on this population.

This new structural and functional arrangement will greatly improve the quality of refugee adjudications and oversight, provide cost-effective immigration services, and significantly improve the nation's ability to secure our borders without compromising humanitarian objectives.

Providing Naturalization Services for Military Personnel. On November 24, 2003, the President signed the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136). Title XVII of this Act, among other things, removes the fees for individuals eligible for expedited naturalization through military service under sections 328 and 329 of the INA, 8 U.S.C. 1439 and 1440, effective October 1, 2004. The Congressional Budget Office (CBO) estimates two-thirds (over 30,000) of the eligible persons would apply for naturalization, including an additional twenty-five positions to provide naturalization services to military personnel in overseas locations, as also authorized by Title XVII. Therefore, the rule proposes to adjust the fees to recover these additional costs. A conforming change to the reference to the N-400 fee in the rule is also made in order to implement the fee limitation provided by Title XVII.

Office of Citizenship. Section 451(f) of the Homeland Security Act of 2002 states, “There shall be a position of Chief of the Office of Citizenship and Immigration Services. The Chief of the Office of Citizenship and Immigration Services shall be responsible for promoting instruction and training on citizenship responsibilities for aliens interested in becoming naturalized citizens of the United States, including the development of educational materials.”

Other Activities. BCIS is undergoing a significant competitive sourcing study for public-private job competitions of the functions performed by Immigration Information Officers and Contact Representatives. In addition, BCIS seeks to recover the annual costs of litigation settlements. These legal costs are not included in the current fee structure.

C. Administrative Support Costs

As previously stated, BCIS has authority under the INA to recover full costs of the program, including administrative costs. To date, these administrative costs have been funded through discretionary appropriations. In FY 2004, BCIS was appropriated $235 million of which $155 million supported administrative costs (e.g. records management, forms management, human resources, procurement, budget, finance). Since these costs are associated with the processing of immigration benefit applications, BCIS proposes adjusting the fees to recover these costs in accordance with the INA. The annual amount, adjusted for FY 2004 and FY 2005, of $157 million equates to a $23 per application charge.

D. Cost of Living

To maintain current service levels, the current immigration benefit application fees were adjusted for cost of living increases for FY 2004 and FY 2005 based upon inflationary rates used for the President's annual budget request. This increase in the annual amount of $28 million equates to a $4 average per application charge.

How Is the Biometric Fee Changing in This Rule?

BCIS charges a fee to recover the operating costs of its fingerprinting program. The costs of the program have risen since 1999, the time of the last fee review. The annualized cost of the program is $96 million, which includes the capability to electronically capture and retain necessary biometrics (photo, signature, and press-print images) for certain immigration benefit applications at the time of the applicant/petitioner's first visit to a BCIS Application Support Center. This equates to an increase of $20. Therefore, the new biometric fee will be $70.

To better describe the services provided under this fee, the proposed rule refers to it as a biometric fee rather than a fingerprinting fee.

What Are the New Application Fees and How Do the New Fees Compare to the Current Fees?

The proposed new immigration benefit application fees and their dollar differences are displayed in Table 1.

BCIS is also making a number of non-substantive stylistic corrections to the fee provisions amended by this rule, and updating the cross-reference to fee regulations under the Freedom of Information Act in 8 CFR 103.7(b)(2) to refer to Department of Homeland Security rather than Department of Justice regulations. Reference to Form I-700 has been deleted, as this form is no longer used.

Does BCIS Have the Authority To Waive Fees on a Case-By-Case Basis?

Yes, BCIS has the authority to waive fees on a case-by-case basis pursuant to 8 CFR 103.7(c). In all fee waiver requests, applicants are required to demonstrate “inability to pay.” In determining “inability to pay,” BCIS officers will consider all factors, circumstances, and evidence supplied by the applicant including age, disability, household income, and qualification within the past 180 days for a Federal means tested benefit.

How Will BCIS Inform the Public of Future Fee Adjustments Based Solely on Inflation?

The proposed rule provides that in subsequent years, starting with FY 2006, BCIS will adjust the current immigration benefit application fees on October 1st each year based upon the inflation level enacted by Congress. If Congress has not enacted the inflationary rate by the start of the fiscal year, BCIS will use the anticipated inflation rates used in the President's annual budget request. BCIS will inform the public of the new fee schedule through a notice published in the Federal Register and on its Web site.

Regulatory Flexibility Act

This rule has been reviewed in accordance with 5 U.S.C. 605(b), and the Department of Homeland Security certifies 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).

BCIS acknowledges, however, that a number of small entities, particularly those filing business-related applications and petitions, such as Form I-140, Immigrant Petition for Alien Worker; Form I-526, Immigrant Petition by Alien Entrepreneur; and Form I-829, Petition by Entrepreneur to Remove Conditions, may be affected by this rule. For the FY 2004/2005 biennial time period, BCIS projects that approximately 190,000 Forms I-140, 435 Forms I-526, and 508 Forms I-829 will be filed. However, this volume represents petitions filed by a variety of businesses, ranging from large multinational corporations to small domestic businesses. BCIS 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. However, 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 result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed 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 section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will result in an annual effect on the economy of more than $100 million, in order to generate the revenue necessary to fully fund the increased cost associated with the processing of immigration benefit applications 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. The increased costs will be recovered through the fees charged for various immigration benefit applications.

Executive Order 12866

This rule is considered by the Department of Homeland Security to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. The implementation of this interim rule would provide BCIS with an additional $232 million in FY 2004 and $394 million in FY 2005 in annual fee revenue, based on a projected annual fee-paying volume of 6.8 million, over the fee revenue that would be collected under the current fee structure. This increase in revenue will be used pursuant to subsections 286(m) and (n) of the INA to fund the full costs of processing immigration benefit applications 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 at no charge. If BCIS does not adjust the current fees to recover the full costs of processing immigration benefit applications, the backlog will likely increase. The revenue increase is based on BCIS costs and projected volumes that were available at the time of the rule. Accordingly, this rule has been reviewed by the Office of Management and Budget.

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 of Homeland Security has determined that this rule does not have sufficient Federalism implications to warrant the preparation of a federalism summary impact statement.

Executive Order 12988: Civil Justice Reform

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 No. 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 rule. This rule does not impose any new reporting or recordkeeping requirements under the Paperwork Reduction Act.

It should be noted that the changes to the fees will require changes to the application/petition forms to reflect the new fees. BCIS will submit a notification to OMB with respect to any such changes.

List of Subjects in 8 CFR Part 103

• Administrative practice and procedures
• 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 proposed to be amended as follows:

PART 103—POWERS AND DUTIES; AVAILABILITY OF RECORDS

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

Authority: 5 U.S.C. 301, 552, 552(a); 8 U.S.C. 1101, 1103, 1304, 1356; 31 U.S.C. 9701; Public Law 107-296, 116 Stat. 2135 (6 U.S.C. 1 et seq.); E.O. 12356, 47 FR 14874, 15557; 3 CFR, 1982 Comp., p. 166; 8 CFR part 2. 2. Section 103.7(b) is amended by: a. Removing the entry “For fingerprinting by the Service” and adding the entry “For capturing biometric information” in its place, and by revising the entries for the following forms in paragraph (b)(1); b. Adding the entry for “Form N-600K” in paragraph (b)(1); c. Revising paragraph (b)(2); and by d. Adding a new paragraph (b)(3). The revisions and additions read as follows: