APHIS keeps inspection reserve fund in place

   Following a recent court challenge, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) said it will continue to maintain a 25 percent reserve fund for operating its Agricultural Quarantine Inspection (AQI) program.
   The Air Transport Association of America, which represents the airlines, filed suit against APHIS claiming that the agency’s 2015 final rule setting fee structures for its AQI program violated the Administrative Procedures Act.
   In its March 28, 2018 order, the U.S. District Court for the District of Columbia rejected challenges based on the calculations and methods for setting the AQI fees and the agency’s adoption of the final rule.
   While the court in its memorandum opinion with the order questioned APHIS’ reliance on the fee collection to maintain the reserve account, it did not explicitly state the agency could not access a surcharge to support the reserve fund.
   APHIS said the 25 percent reserve fund provides “a means to ensure the continuity of AQI services in cases of fluctuations in activity volumes, bad debt, carrier insolvency or other unforeseen events, such as those of Sept. 11, 2001, which … resulted in substantial cost increases for AQI programs and lower-than-anticipated revenues.”
   The agency provides quarantine and inspection services on agricultural shipments arriving by ship, truck, railcar, aircraft and international passengers at U.S. ports of entry.
   In addition, the agency said a 25 percent reserve fund is needed to account for the “lag” in AQI user fee collections. 
   “Payments are made into AQI user fee accounts for commercial aircraft and international airline passengers on a quarterly basis, with monies not remitted to APHIS until one month after the end of the quarter in which they were collected. Since the fourth-quarter fees are not due, and therefore not received, until after the fiscal year is over, we are not able to use those funds to pay for providing AQI services for commercial airlines and international air passengers in the fiscal year in which they are earned,” APHIS explained.
   The agency said its “interpretative” rule, which was published in the Federal Register on April 26, relates only to the legal authority for the reserve component of the AQI User Fee Program. The final rule for the fee, which took effect in 2015, remains in force. However, APHIS said it will consider industry comments received by May 28.