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[Federal Register: January 28, 2003 (Volume 68, Number 18)]
[Rules and Regulations]               
[Page 4090-4092]
From the Federal Register Online via GPO Access []



Immigration and Naturalization Service

8 CFR Part 286

[INS No. 2180-01]
RIN 1115-AG47

Establishment of a $3 Immigration User Fee for Certain Commercial 
Vessel Passengers Previously Exempt

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Final rule.


SUMMARY: This rule amends the Immigration and Naturalization Service 
(Service) regulations, as required by law, to provide for the 
collection of a $3 fee for commercial vessel passengers previously 
exempt under section 286(e)(1) of the Immigration and Nationality Act 
(Act), other than passengers on Great Lakes ferries and other Great 
Lakes vessels. This rule amends the Service regulations to require 
certain commercial vessel operators or their ticketing agents to charge 
and collect a $3 user fee from every commercial vessel passenger whose 
journey originated in the United States, Canada, Mexico, a territory or 
possession of the United States, or an adjacent island except those 
individuals exempted under section 286(e) of the Act.

DATES: This final rule is effective February 27, 2003.

FOR FURTHER INFORMATION CONTACT: Penny Pastiva, Border Management 
Branch, Office of Budget, Immigration and Naturalization Service, 425 I 
Street, NW., Room 5236, Washington, DC 20536, telephone (202) 514-6254.


Authority To Collect an Immigration User Fee

    In the 1987 Appropriations Act for the Department of Justice, 
Public Law 99-591, Congress directed the Service beginning in fiscal 
year (FY) 1987 to collect an immigration user fee for each passenger 
arriving in the United States by commercial air or sea conveyance (with 
limited exceptions). As provided by law, in section 286 of the Act, the 
user fees that are collected may be used, among other things, to:
    [sbull] Provide immigration inspection and preinspection services 
for commercial aircraft and vessels;
    [sbull] Provide overtime immigration inspection services for 
commercial aircraft or vessels;
    [sbull] Administer debt recovery, including the establishment and 
operation of a national collections office;
    [sbull] Expand, operate, and maintain information systems for 
nonimmigrant control and debt collection;
    [sbull] Detect fraudulent documents used by passengers traveling to 
the United States, including training of, and technical assistance to, 
commercial airline and vessel personnel regarding such detection;
    [sbull] Provide detention and removal services for inadmissible 
aliens arriving on commercial aircraft and vessels and for any 
inadmissible alien who has attempted illegal entry into the United 
States through avoidance of immigration inspection at air or sea ports-
of-entry; and,
    [sbull] Administer removal and asylum screening proceedings at air 
or sea ports-of-entry for inadmissible aliens arriving on commercial 
aircraft and vessels, including immigration removal proceedings 
resulting from the presentation of fraudulent documents and the failure 
to present documentation and for any inadmissible alien who has 
attempted illegal entry into the United States by avoiding immigration 
inspection at air or sea ports-of-entry.

Requirement To Charge a $3 Inspection Fee

    In section 109 of the Department of Justice Appropriations Act, 
2002, Public Law 107-77, title I, enacted on November 28, 2001, 
Congress amended section 286(e) of the Act to authorize the Attorney 
General to charge and collect a user fee from certain previously-exempt 
commercial vessel passengers. Prior to the enactment of this law, 
commercial vessel passengers whose journeys originated in Canada, 
Mexico, a State, territory or possession of the United States, or an 
adjacent island, were statutorily exempt from paying the Immigration 
User Fee prescribed by section 286(d) of the Act. While these vessel 
passengers were exempt from paying the fee, the Service was still 
required to provide inspection services. This exemption resulted in the 
Service's inability to invest in necessary staffing and technology 
resources. The new fee will enhance inspection operations and related 
inspection activities that support seaport immigration inspection.
    Section 202 of chapter 2, title I of the 2002 Supplemental 
Appropriations Act for Further Recovery From and Response to Terrorist 
Attacks on the United States, Public Law 107-206, signed August 2, 
2002, amended section 286(e)(3) of the Act to remove any discretionary 
authority not to collect the fee from commercial vessel passengers 
otherwise covered by the provision (principally, by changing ``The 
Attorney General is authorized to charge and collect'' to AThe Attorney 
General shall charge and collect'').

Comments on the Service's Proposed Rule Implementing Section 286(e)(3) 
of the Act

    The Service published a proposed rule in the Federal Register on 
April 3, 2002, at 67 FR 15753, authorizing the collection of a $3 fee 
for certain commercial vessel passengers previously exempt under 
section 286(e)(1) of the Act. The proposed rule was published with a 
30-day comment period, which closed on May 3, 2002. On May 14, 2002, 
the Service reopened

[[Page 4091]]

the comment period until May 28, 2002 (67 FR 34414).
    The Service received a total of 36 comments on the proposed rule. 
Comments were received from a broad spectrum of individuals and 
organizations, including 7 ferry and cruise ship companies, 3 
transportation advocacy groups, 5 city and county groups, 3 elected 
officials, 2 port authorities, 1 tourism board, and 15 interested 
individuals. All the comments were carefully considered before 
preparing this final rule. The following is a discussion of these 
comments and the Service's response.

1. Applicability to Ferries

    The primary concerns expressed in the comments received all related 
to international ferry operations in the Pacific Northwest. All 
comments received on this subject were similar and made three main 
arguments: (1) There is no justification for imposing this fee on 
ferries of the Pacific Northwest while excluding the Great Lakes 
ferries; (2) the $3 fee represents a disproportionately high percentage 
of the cost of using a ferry in the State of Washington; and (3) the $3 
fee will have a negative economic impact on the international ferry 
operators in the Pacific Northwest and on related businesses in the 
tourism industry. One commenter, the Airports Council International--
North America, strongly supported implementation of the $3 fee for 
commercial vessel passengers.
    The justification for excluding Great Lakes ferries and other Great 
Lakes vessels in the proposed rule was simple: Congress itself made 
special provisions for the Great Lakes by specifically exempting Great 
Lakes vessels from the authorization in section 286(e)(3) of the Act. 
Furthermore, the recent amendment to section 286(e)(3) of the Act 
removes whatever discretion the Service might have had to make 
exceptions for commercial vessel passengers other than the Great Lakes 
exception, including on the basis of economic impact. Because the 
amendment in the 2002 Supplemental Appropriations Act provides that the 
Attorney General ``shall'' charge this fee, the Service is required to 
adhere to the terms of the statutory language, which limited exceptions 
to the Great Lakes vessels and ferries. Therefore, the final rule 
applies to any commercial vessel (as defined in the Service's existing 
regulations at 8 CFR 286.1(d) to include ``any civilian vessel being 
used to transport persons or property for compensation or hire'') other 
than the Great Lakes vessels.
    One commenter requested the Service make this rule effective for 
ferries sometime beyond the 30 days after date of publication effective 
date for other vessels in order to give ferry operators additional time 
to comply. The Service considered this comment but declined to make a 
special exception for ferries regarding the effective date of this 

2. Collection of the Fee

    In addition to the ferry-specific concerns about the impact 
discussed above, there were other concerns expressed in the comments 
about the effective date when the $3 fee would be collected, and the 
amount of the fee collected.
    In order to clarify the fee collection requirement, the Service has 
amended Sec.  286.2(b) to make clear that the $3 fee will be assessed 
based on bookings or reservations made on or after February 27, 2003. 
By using the booking date, the cruise line or other commercial vessel 
operator can accurately communicate to passengers both the cost of the 
passage and the applicable fees for which they are responsible. This 
provides clear guidance on when fee collections are due and results in 
an ease of administration for operators whose passengers will be 
subject to the $3 fee.
    Regarding the amount of the fee, the Service notes that it has been 
set by law, and the FY 2002 Supplemental Appropriation Act requires the 
collection of the $3 fee for certain commercial vessel passengers who 
were previously exempt, except for the Great Lakes exception provided 
by Congress.

3. Other Changes

    Finally, the Service has made minor stylistic corrections to the 
proposed rule's changes to 8 CFR 286.3(a).

Regulatory Flexibility Act

    The Commissioner of the Immigration and Naturalization Service, in 
accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has 
reviewed this regulation and by approving it certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities. Immigration user fees are already being collected by 
commercial vessel carriers and/or their ticketing agents in connection 
with voyages originating in areas already covered by the fee. Since the 
passengers rather than the carriers ultimately pay the immigration 
inspection user fee, these passengers are not considered small entities 
as that term is defined in 5 U.S.C. 601(6), and this rule does not have 
a significant economic impact upon a substantial number of small 

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 

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in cost 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 12866

    This rule is considered by the Department of Justice, Immigration 
and Naturalization Service, to be a ``significant regulatory action'' 
under Executive Order 12866, section 3(f), Regulatory Planning and 
Review. Accordingly, this regulation has been submitted to the Office 
of Management and Budget for review.
    1. Impact of the $3 fee on cruise ships generally. The Service 
estimates that approximately 8 million cruise ship passengers per year 
who were previously statutorily exempt from paying the Immigration User 
Fee will now be required to pay this fee. The Service therefore 
estimates that the Immigration User Fund will receive $24 million in 
additional revenue per year from the fees paid by these passengers. The 
imposition of the $3 statutory fee is not anticipated to result in an 
economic burden for the cruise ship industry. When compared to the 
price of the average cruise, the $3 fee is very small and is not 
expected to affect cruise booking decisions.
    2. Impact of the $3 fee on ferries. The $3 immigration inspection 
fee imposed by this rule is likely to impose a greater proportionate 
burden on the service provided by ferry operators (in areas other than 
the statutorily-exempted Great Lakes areas) because the $3 fee is 
larger in relation to the cost of a ferry ticket as compared to a 
cruise ship

[[Page 4092]]

ticket. The Service has been informed that the $3 fee could increase 
the price of an adult ticket for a ferry in Washington State by an 
average of 20 to 25 percent, with larger percentage increases for 
lower-priced child and infant tickets. Commenters feared a significant 
loss of ferry business due to the imposition of this fee, in some cases 
possibly causing operators to drop seasonal international service.
    The Service estimates that one million passengers enter into the 
United States per year using Pacific Northwest ferries. If passenger 
volume after the imposition of the $3 fee were to remain constant, the 
Service's Immigration User Fund could receive as much as $3 million 
annually from ferry passengers. However, based on comments received, 
the Service expects that the imposition of the $3 fee will result in a 
decrease in the number of ferry passengers, as travelers switch to 
alternative transportation modes. Accordingly, the Service is unable to 
estimate the amount that will actually be collected.
    While the Service is sympathetic to arguments presented by 
commenters concerned about the likely disproportionate impact of this 
$3 fee on ferry passengers, it has no discretion under the statute to 
provide any exemption, waiver, or other accommodation to ferries other 
than for the Great Lakes ferries, which Congress exempted by law.
    3. Benefits of this rule. For years, the Service has been providing 
the immigration inspection services for commercial vessel operators 
(including ferries) on voyages originating in the United States, 
Canada, Mexico, a territory or possession of the United States, or an 
adjacent island, but has not--until the statutory change being 
implemented by this rule--been able to charge commercial vessel 
passengers the immigration user fee for doing so. These services are 
described further in the Supplementary Information for this rule. The 
$3 fee is appropriate to offset the costs of seaport inspection 
services provided, allows for the investment in new resources towards 
improving the inspection process at seaports, and allows the Service to 
meet customer service requirements. These services and activities 
funded by the immigration user fee benefit the national security by 
screening arriving aliens for possible threats and also benefit the 
general public by complementing other immigration enforcement 
activities and speed the processing of legitimate travelers.

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, it is 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, Pub. L. 104-13, all 
Departments are required to submit to the Office of Management and 
Budget (OMB), for review and approval, any reporting requirements 
inherent in a final rule. This rule does not impose any new reporting 
or recordkeeping requirements under the Paperwork Reduction Act.

List of Subjects in 8 CFR Part 286

    Air carriers, Immigration, Maritime carriers, Reporting and 
recordkeeping requirements.

    Accordingly, part 286 of chapter I of title 8 of the Code of 
Federal Regulations is amended as follows:


    1. The authority citation for part 286 continues to read as 

    Authority: 8 U.S.C. 1103, 1356; 8 CFR part 2.

    2. Section 286.2 is amended by redesignating paragraph (b) as 
paragraph (c), and by adding a new paragraph (b), to read as follows:

Sec.  286.2  Fee for arrival of passengers aboard commercial aircraft 
or commercial vessels.

* * * * *
    (b) A fee, in the amount prescribed in section 286(e)(3) of the 
Act, per individual, is charged and collected by the Commissioner for 
the immigration inspection at a port-of-entry in the United States, or 
for the preinspection in a place outside the United States of each 
commercial vessel passenger whose journey originated in the United 
States, Canada, Mexico, territories or possessions of the United 
States, or adjacent islands, except as provided in Sec.  286.3. All 
tickets or documents for transportation on voyages that are booked on 
or after February 27, 2003, will be subject to this immigration user 
* * * * *

    3. Section 286.3 is amended by revising the introductory text, and 
by revising paragraph (a), to read as follows:

Sec.  286.3  Exceptions.

    The fees set forth in Sec.  Sec.  286.2(a) and 286.2(b) shall not 
be charged or collected from passengers who fall within any one of the 
following categories:
    (a) Persons arriving at designated ports-of-entry by the following 
vessels, when operating on a regular schedule: Great Lakes 
international ferries or Great Lakes vessels on the Great Lakes and 
connecting waterways;
* * * * *

    Dated: December 26, 2002.
Michael J. Garcia,
Acting Commissioner, Immigration and Naturalization Service.
[FR Doc. 03-1808 Filed 1-27-03; 8:45 am]