Agricultural and Quarantine Inspection Service User Fees

This memo deals with recent developments regarding the Agricultural Quarantine Inspection (AQI) user fees. Commercial air passengers pay a $5.00 fee and airlines pay an aircraft fee of $70.75. The fee revenues are shared under an agreed allocation between the Agriculture and Plant Health Inspection Service (APHIS), US Department of Agriculture (USDA) and US Customs and Border Protection (CBP), Department of Homeland Security.

APHIS generally oversees the AQI program including setting protocols, training CBP agricultural specialists, identifying pests, conducting treatments (.e.g. fumigation) and inspecting certain agricultural products. CBP conducts inspections at US ports of entry.

On May 1, 2013 APHIS held a meeting for stakeholders to share information on the costs for providing AQI services. In March 2013, GAO released a study calling for major changes to align revenues from the AQI user fees with costs.

May APHIS Meeting

ACI-NA staff (Diane Peterson) attended the APHIS stakeholder meeting. The major points which emerged are:

  • Commercial air passengers overpaid, but commercial aircraft underpaid for related AQI services; overall commercial aviation overpaid (based on the way costs are currently counted)
  • APHIS essentially acknowledged that there is cross-subsidization; which is not consistent with the law that AQI fees should be commensurate with the costs to the class or entities paying the fee.
  • The revenue sharing agreement between APHIS and CBP has to be revised to funnel more of the revenue from the fees to CBP based on their higher costs incurred; the agreement is being renegotiated to rectify the situation
  • APHIS plans to issue a Notice of Proposed Rulemaking (NPRM) on the AQI user fees by the end of 2013 and will hold another stakeholder meeting thereafter.                                                                                                            

March GAO Report

In March 2013 GAO issued its Report to Congressional Requesters on Agricultural Quarantine Inspection Fees:  Major Changes Needed to Align Fee Revenues with Program Costs. http://www.gao.gov/products/GAO-13-268.  Some report numbers are different from those cited at the APHIS meeting as GAO is uses more recent data.

The GAO report finds that APHIS and CBP do not recover all of their AQI costs through user fees (covered 62% in FY 2011) and rely on CBP’s appropriations to close the gap. The agencies do not charge for some services, do not charge enough for some services and do not collect some user fees or do not do so in a timely manner.

The GAO report makes numerous recommendations listed below. None of the recommendations focus on the air passenger fee or aircraft fee directly.  However, some recommendations might impact aviation if adopted:  e.g. imputed costs, time spent by CBP Officers in primary regarding agricultural inspections, treatment of overtime costs, and monitoring of compliance agreements for international.

  • Align fees more closely with costs incurred
     
  • Secretary of Agriculture include all imputed costs borne by other agencies
  • Secretary of Homeland Security direct CBP to disseminate guidance that a portion of CBP Officer’s primary inspection time should be charged to agriculture
  • Secretary of Agriculture establish an AQI fee for cruise passengers aligned with cost of inspection of cruise passengers and vessels (there is a cruise vessel fee, but no cruise passenger fee)
  • Secretary of Agriculture establish an AQI fee for passenger railcars aligned with the cost of inspecting rail passengers and railcars (there is no rail passenger or railcar fee)
  • Secretary of Agriculture eliminate caps on commercial vessel and commercial freight rail fees
  • Secretary of Agriculture set truck fees to recover AQI costs for trucks while maintaining an incentive for trucks to use transponders
  • Secretary of Agriculture establish fees for buses and bus passengers by establishing a bus passenger fee or by seeking legislative authority to establish a bus fee covering the passenger inspection costs.
  • Secretaries of Agriculture and Homeland Security work to amend overtime regulations to align reimbursable overtime rates with AQI costs and ensure collection by denying service to entities with bills more than 90 days overdue.
  • Charge fees for AQI permit applications, treatment services and monitoring compliance agreements for regulated garbage (USDA disagreed with the GAO recommendation regarding charging for CBP’s monitoring of compliance agreements for the disposal of regulated international garbage, arguing that the agreements save USDA money and charging a fee would be a disincentive to entering an agreement)
     

Align AQI Fee Distribution with Costs

  • Secretaries of Agriculture and Homeland Security work to align the sharing of the fee revenues between APHIS and CBP to reflect their respective costs.  (In FY 2011, CBP incurred over 80% of the AQI program costs, but only received 60% of the fee revenue; APHIS incurred only 19% of the costs, but received 39% of the fee revenue)
  • Secretary of Agriculture establish an AQI reserve more closely aligned with program needs and risks, based on experience (GAO found that APHIS reserves were excessive in view of the risk and experience with the 2009 financial crisis and 9/11; USDA does not agree with the GAO)
  • Secretaries ensure that fees are collected
    • APHIS should collect the railcar fees already in its regulations
    • CBP should verify that arriving aircraft, vessels, and vehicles have paid the appropriate fees
       
  • Congress should consider legislative changes
    • Allow the Secretary of Agriculture to set fees for all services to recover the full costs of the AQI program.
    • Allow USDA to assess fees on buses, private vessels and private aircraft and include in those fees the cost of AQI Services for the associated passengers.