SUPPLEMENTARY INFORMATION:

Background

The Food, Agriculture, Conservation, and Trade (FACT) Act of 1990 (21 U.S.C. 136a) authorizes the Animal and Plant Health Inspection Service (APHIS) of the United States Department of Agriculture to collect user fees to fully fund its agricultural quarantine and inspection (AQI) services program. These user fees must be sufficient to cover the costs of:

• Providing AQI services in connection with the arrival, at a port in the customs territory of the United States, of an international passenger, commercial vessel, commercial aircraft, commercial truck, or railroad car (21 U.S.C. 136a(a)(1)(A));
• Providing preclearance or preinspection at a site outside the customs territory of the United States of an international passenger, commercial vessel, commercial aircraft, commercial truck, or railroad car (21 U.S.C. 136a(a)(1)(A));
• Administering the AQI Program (21 U.S.C. 136a(a)(1)(B)); and
• Through fiscal year 2002, maintaining a reasonable balance in the AQI User Fee Account also established by the Act (21 U.S.C. 136a(a)(1)(C)).

In the April 25, 2014, Federal Register (79 FR 22895-22908, Docket No. APHIS-2013-0021), we issued a proposal to update the methodology by which APHIS would calculate AQI user fees for the user fee classes subject to 21 U.S.C. 136a. Relying on this updated methodology, we also proposed new AQI user fee rates. Such a change was necessary to address historic underfunding of the AQI program.

Following a comment period and review of public comments, on October 29, 2015, we issued a final rule in the Federal Register to revise the AQI user fees (80 FR 66748-66779; Docket No. APHIS-2013-0021).^[1] Under the 2015 final rule, four of the user fees (for commercial trucks and truck transponders, international air passengers, and international cruise ship passengers) included a 3.5 percent reserve surcharge above unit cost as part of the fee structure. All other fees set in the 2015 final rule were set at or slightly below unit cost and, therefore, did not include a reserve surcharge, and accordingly did not collect for maintenance of the reserve.

On May 13, 2016, the Air Transport Association of America and the International Air Transport Association filed suit against APHIS, claiming the final rule updating the fees for its AQI program violated the FACT Act and the Administrative Procedure Act. On June 21, 2022, the United States Court of Appeals for the District of Columbia Circuit issued an opinion that rejected the bulk of the challenges to APHIS's fee-setting. See Air Transport Ass'n of Am. v. United States Dep't of Agric., 37 F.4th 667 (D.C. Cir. 2022). However, the Court held that APHIS' authority to set and collect fees at a level to fund a reserve expired in 2002. The Court remanded this issue to the United States District Court for the District of Columbia for proceedings consistent with the appellate court's opinion. On September 15, 2022, the District Court issued a final judgment vacating the final rule only insofar as it authorizes collecting fees to maintain a reserve account.

Consistent with this September 15, 2022, final judgment, on November 1, 2022, APHIS issued a Stakeholder Registry ^[2] announcement stating that we were removing the 3.5 percent reserve surcharge from each fee class to which it had been applied and, effective December 1, 2022, no longer collecting the reserve component for AQI user fees.

This rule codifies that change in operational policy by revising the regulations to reflect the new fee rates.

Effective Date

The Court held that APHIS' authority to collect fees sufficient to maintain a reserve expired after fiscal year 2002 and, therefore, the 2015 final rule violated the FACT Act to the extent it set user fees at a level sufficient to maintain a reasonable balance in the AQI user fee account ( See Air Transport Ass'n of Am., 37 F.4th at 673). However, the Court upheld the remaining aspects of the 2015 final rule with respect to all other challenges. As a result of the September 15, 2022, final judgment, the Agency is legally obligated to remove the reserve surcharge from any fees that were set at a level to include such a surcharge. Accordingly, on November 1, 2022, APHIS issued a Stakeholder Registry announcement operationally removing the surcharge from any fees that had been set to include it, thereby lowering those fees, effective December 1, 2022. In that same announcement, APHIS set forth its basis for lowering the fees operationally and without opportunity for public comment. ( printed page 16372)

In the announcement, APHIS indicated that we would “publish a final rule in the Federal Register to codify this administrative action.” Insofar as this rule codifies current Agency operational policy and ensures alignment between the fees operationally assessed and the fee levels set forth in the regulations, this rule pertains to Agency procedure, and is thus exempt from the need for public comment pursuant to paragraph (b)(3) of 5 U.S.C. 553. Moreover, the good cause that APHIS found for making the Stakeholder Registry announcement effective without prior public comment remains and applies equally to this rule; no public comment could alter the Court's mandate to vacate the portion of the final rule that collects fees to maintain a reserve. Finally, this rule is exempt from Executive Orders 12866 and 12988, and is not a rule as defined by the Regulatory Flexibility Act (5 U.S.C. 501).

Paperwork Reduction Act

This final rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Accordingly, we are amending 7 CFR part 354 as follows: