The fees vary in the way they are set, collected, used, and  reviewed, which may affect their efficiency, equity, revenue adequacy, and  administrative costs. The Inspection Process Is Largely Consolidated but the Inspection Fees Vary in How Rates Are Set and Adjusted, the Portion of Costs Recovered, and How Costs Are Assigned to Users

Although all of the fees we examined vary in how they are set and  adjusted, these differences are a particular issue with the inspection fees. Misalignments Exist between Fee Collections and Activities for Which They May Be Used

All of the fees we reviewed suffer from some misalignment—although the  nature of that misalignment varies—which affects how the fees are used. There Is No Link between the Amount of Annual HMF Collections and Expenditures

Since 2003, HMF collections have significantly exceeded funds  appropriated for harbor maintenance, resulting in a large and growing  surplus in the trust fund. For example, CBP and APHIS report separately on the customs,  immigration, and AQI vessel fees, and the reviews generally do not reflect  input from the other. Furthermore, CBP’s review of the MPF does not  detail program costs and project fee collections, or provide enough  information to determine if the amount, structure, or authorized uses of  the fee should be updated. Unless  remedied, differences such as the way overtime charges are assessed for  commercial vessel inspections, as well as misalignments between actual  and reimbursable inspection activities, will persist, causing confusion and  raising equity concerns. Assess interest and penalties on late HMF payments for domestic  shipments, shipments into foreign trade zones, and sea passengers. Appendix I: Objectives, Scope, and Methodology

In order to provide context as Congress considers funding options for port  programs, we examined (1) what is known about the way selected fees  assessed on air and sea port users are set, collected, used, and reviewed  (including the views of stakeholders) and (2) the effects of these attributes  on program operations. To meet this objective, we examined selected fees that are assessed on  port users; specifically the Harbor Maintenance Fee (HMF), Merchandise  Processing Fee (MPF), Customs Inspection Fees, Immigration User Fee,  and Agricultural Quarantine Inspection (AQI) User Fees. We interviewed officials responsible for managing the  selected user fees at the U.S. Army Corps of Engineers (Corps), the U.S.  Department of Agriculture’s Animal and Plant Health Inspection Service  (APHIS), and the U.S. Customs and Border Protection (CBP) offices in  Washington, D.C. CBP administers the MPF and Customs inspection fees,  and it collects the HMF on behalf of the Corps.
Why GAO Did This Study

America's port infrastructure is vital to U.S. foreign trade and a bulwark for national security. One way the federal government funds port-related programs is to levy user fees. GAO was asked to examine (1) what is known about the way selected fees assessed on air and sea port users are set, collected, used, and reviewed and (2) the effects of these attributes on program operations. GAO examined the Harbor Maintenance Fee (HMF), the Merchandise Processing Fee (MPF), and the Customs, Immigration, and Agricultural Quarantine Inspection (AQI) user fees assessed on air and cruise passengers and commercial vessels using criteria that have often been used to assess user fees and taxes--equity, efficiency, revenue adequacy, and administrative burden.

What GAO Found

The port-related fees GAO examined vary in how they are set, collected, used, and reviewed, creating misalignments between the fees and corresponding services, as well as administrative and oversight challenges. Although the customs, immigration, and AQI inspections have largely been consolidated under U.S. Customs and Border Protection (CBP), the corresponding fees remain separate and distinct and differ in how the rates are set and adjusted, the portion of costs they recover, and on whom the fees are levied. For example, overtime charges are handled differently for each type of inspection, creating confusion about the circumstances under which overtime must be paid, at what rate, and for which services. Certain collection methods increase administrative costs and reduce compliance. For example, quarterly remittance delays availability of funds and failure to charge interest and penalties on certain late payments is costly and discourages compliance. Further, lack of coordination between CBP and the U.S. Army Corps of Engineers inhibits oversight of certain HMF payments. All of the fees GAO reviewed suffer from some misalignment--for example, with their respective costs or activities--which affects how the fees are used. For example, since 2003, HMF collections have far exceeded funds appropriated for harbor maintenance, resulting in a large and growing surplus in the trust fund. Also, not all MPF and customs inspection activities are reimbursable and not all reimbursable activities are inspection related. Finally, agency user fee reviews are not always comprehensive. For example, CBP's review of the MPF does not detail program costs, project collections, or provide enough information to determine if the amount, structure, or authorized uses of the fee should be updated. Further, limited opportunities for substantive communication with HMF stakeholders hamper their understanding of the fee.