Exchange Visitor Program-Fees and Charges

AGENCY:

Department of State.

ACTION:

Final rule.

SUMMARY:

The Department of State is amending its regulations regarding fees and charges for Exchange Visitor Program services. The fees permit the Department to recoup the cost of providing such Exchange Visitor Program services.

DATES:

Effective Date: This rule is effective 30 days from February 25, 2011.

FOR FURTHER INFORMATION CONTACT:

Stanley S. Colvin, Deputy Assistant Secretary for Private Sector Exchange, U.S. Department of State, SA-5, Floor 5, 2200 C Street, NW., Washington, DC 20522, 202-632-2805, or e-mail at jexchanges@state.gov.

SUPPLEMENTARY INFORMATION:

The Department published a proposed rule, Public Notice 7077 at 75 FR 60674-60679, October 1, 2010, with a request for comments, amending § 62.17 (“Fees and Charges”) containing all of the fees and charges for Exchange Visitor Program services. As explained in the proposed rule, the Department is increasing user fees charged for Exchange Visitor Program services in order to recoup the full cost of such services which are requested and performed for the benefit of foreign nationals or U.S. corporate entities. These costs were calculated by an independent certified public accounting firm in full compliance with the Office of Management and Budget directives regarding such user fee calculations as set forth in OMB Circular A-25.

The Department received three comments and is now promulgating a final rule with no changes from the proposed rule. Thus, the fee charged to foreign nationals for a request for individual program services, such as change of program category, program extensions and reinstatements, will decrease to $233.00. The fee charged to U.S. corporate entities for requests for program designation, redesignation and amendments to program designation will increase to $2,700.00 in order to recoup the full cost of such services.

Comment Analysis

The Department received three comments. One comment suggested that the Exchange Visitor Program be closed and that the fees be increased to $10,991 for application fees and $5,945 for individual program services. The Department rejected this comment as there is no basis or justification for such a proposal. The comment was not responsive to the proposed rule concepts. Another comment was from an academic institution and opined that a 54% increase in fees was such a financial burden on academic institutions that the redesignation period should also be increased. As no other academic institutions presented this view, we find that this comment does not represent the views of the higher academic community or its ability to pay this bi-annual redesignation fee. A further comment was from a private sector organization that combined comments to both opposition of the final secondary school student rule and the proposed fee rule and does not believe that the increase in fees will help the Department with its oversight responsibilities. This comment was not responsive to the proposed rule which discussed neither secondary school student exchanges nor oversight initiatives or duties of designated program sponsors.

Regulatory Findings

Administrative Procedure Act

The Department of State is of the opinion that the Exchange Visitor Program is a foreign affairs function of the U.S. Government and that rules implementing this function are exempt from section 553 (Rulemaking) and section 554 (Adjudications) of the Administrative Procedure Act (APA). The U.S. Government supervises programs that invite foreign nationals to come to the United States to participate in exchange visitor programs, either directly or through private sector program sponsors or grantees. When problems occur, the U.S. Government often has been, and likely will be, held accountable by foreign governments for the treatment of their nationals, regardless of who is responsible for the problems.

The purpose of this rule is to set the fees that will fund the services provided by the Exchange Visitor Program Office of Designation, which provides services to 1,226 sponsor organizations and 350,000 Exchange Visitor Program participants. These services include oversight and compliance with program requirements as well as the monitoring of programs to ensure the health, safety and well-being of foreign nationals entering the United States (many of these exchange programs and participants are often funded by the U.S. Government) under the aegis of the Exchange Visitor Program and in furtherance of its foreign relations mission. The Department of State represents that failure to protect the health and well-being of these foreign nationals and their appropriate placement with reputable organizations will have direct and substantial adverse effects on the foreign affairs of the United States.

Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department published this rule as a proposed rule and solicited comments. This was without prejudice to its determination that the Exchange Visitor Program is a foreign affairs function.

Regulatory Flexibility Act/Executive Order 13272: Small Business

As discussed above, the Department believes that this final rule is exempt from the provisions of 5 U.S.C 553, and that no other law requires the Department to give notice of proposed rulemaking. Accordingly the Department believes that this rule is not subject to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601, et seq.) or Executive Order 13272, section 3(b).

Nevertheless, the Department has examined the potential impact of this rule on small entities. Entities conducting student exchange programs are classified under code number 6117.10 of the North American Industry Classification System. Some 5,573 for-profit and tax-exempt entities are listed as falling within this classification. Of this total number of so-classified entities, 1,226 are designated by the Department of State as sponsors of an exchange visitor program, designated as such to further the public diplomacy mission of the Department and U.S. Government through the conduct of people-to-people exchange visitor programs. Of these 1,226 Department designated entities, 933 are academic institutions and 293 are for-profit or tax-exempt entities. Of the 933 academic institutions designated by the Department, none are believed to meet the definition of small entity for Regulatory Flexibility Act analysis purposes. The RFA utilizes the SBA's definition of “small entities” for educational institutions, which are for-profit entities that have annual revenues of less than $7 million. The RFA defines “small organizations” as any not-for-profit educational institution that is independently owned or operated and not dominant in its field. Of the 293 for-profit or tax-exempt entities designated by the Department, 131 have annual revenues of less than $7 million, thereby falling within the analysis purview of the Regulatory Flexibility Act. Although, as stated above, the Department is of the opinion that the Exchange Visitor Program is a foreign affairs function of the United States Government and, as such, that this rule is exempt from the rulemaking provisions of section 553 of the APA, given the projected costs (discussed below) to the approximately 131 small entities designated to conduct exchange visitor programs, the Department has determined that this rule will not have a significant economic impact on a substantial number of small entities. The annual additional cost to a small entity is $476.00.

Unfunded Mandates Reform Act of 1995

This final rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million in any 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.

Executive Order 13175—Consultation and Coordination With Indian Tribal Governments

The Department has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Section 5 of Executive Order 13175 do not apply to this rulemaking.

Small Business Regulatory Enforcement Fairness Act of 1996

This final rule is not a major rule as defined by 5 U.S.C. 804 for the purposes of Congressional review of agency rulemaking under the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801-808). This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

Executive Order 13563 and Executive Order 12866

As discussed above, the Department is of the opinion that the Exchange Visitor Program is a foreign affairs function of the United States Government and that rules governing the conduct of this function are exempt from the requirements of Executive Order 12866. However, the Department has nevertheless reviewed this regulation to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order. The Department has examined the economic benefits, costs, and transfers associated with this final rule, and finds that educational and cultural exchanges are both the cornerstone of U.S. public diplomacy and an integral component of American foreign policy. Though the benefits of these exchanges to the United States and its people cannot be monetized, the Department is nonetheless of the opinion that these benefits outweigh the costs associated with this rule. The Department projects the cost to the government of providing Exchange Visitor Program services to be $3.4 million annually. This rule will provide an estimated $3.4 million annually that will support the operations of the Department's Office of Designation, including funds for designation and redesignation, for individual exchange participant services, and the appropriate share of costs for regulatory review and development, outreach, and general program administration. These costs are divided among the 1,226 designated sponsors who will account for $2.7 million of the total $6.8 million over the next two years, with foreign national exchange participants requesting individual-based program services accounting for the remaining $4.1 million. The actual increase in annual costs per designated sponsor is $462 which represents a total annual increase of $378,302. The cost to foreign national exchange participants requesting program services has been decreased by $13 per transaction. Thus, the Department of State has identified $3.4 million in economic transfers associated with this rule. The Department has not identified any monetized benefits or costs, though it believes that the revenue generated by these fees and charges will enable the Department to administer an effective program and is essential to continuing to support and strengthen the United States' foreign policy goal of promoting mutual understanding between the people of the United States and other countries.

Executive Order 12988

The Department has reviewed this regulation in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

Executive Orders 12372 and 13132

This regulation 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, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this regulation.

Paperwork Reduction Act

The information collection requirements contained in this rulemaking are pursuant to the Paperwork Reduction Act, 44 U.S.C. chapter 35 and OMB Control Number 1405-0147, expiring on November 30, 2013.

List of Subjects in 22 CFR Part 62

• Cultural exchange program

Accordingly, 22 CFR part 62 is amended as follows:

PART 62—EXCHANGE VISITOR PROGRAM

1. The authority citation for part 62 is revised to read as follows:

Authority: 8 U.S.C. 1101(a)(15)(J), 1182, 1184, 1258; 22 U.S.C. 1431-1442, 2451 et seq.; Foreign Affairs Reform and Restructuring Act of 1998, Pub. L. 105-277, Div. G, 112 Stat. 2681 et seq.; Reorganization Plan No. 2 of 1977, 3 CFR, 1977 Comp. p. 200; E.O. 12048 of March 27, 1978; 3 CFR, 1978 Comp. p. 168; the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996, Pub. L. 104-208, Div. C, 110 Stat. 3009-546, as amended; Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT ACT), Pub. L. 107-56, section 416, 115 Stat. 354; and the Enhanced Border Security and Visa Entry Reform Act of 2002, Pub. L. 107-173, 116 Stat. 543.

2. Section 62.17 is revised to read as follows: