New Filing Fees

FEDERAL MARITIME COMMISSION

46 CFR Parts 514, 552, 560, and 572

[Docket No. 94-15]

New Filing Fees

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Maritime Commission (``Commission'' or ``FMC'') is

establishing filing fees for (1) tariffs, (2) service contract

essential terms (``ETs''), (3) financial reports in the domestic

offshore trades, (4) general rate increases in the domestic offshore

trades, and (5) agreements. The services the Commission provides on

these filings confer special benefits to identifiable members of the

public.

EFFECTIVE DATE: Effective January 11, 1995, except for 46 CFR

514.21(i), which will be effective on April 1, 1995.

FOR FURTHER INFORMATION CONTACT: Jeremiah D. Hospital or George S.

Smolik, Bureau of Trade Monitoring and Analysis, Federal Maritime

Commission, 800 North Capitol Street NW., Washington, D.C. 20573-0001,

(202) 523-5790.

SUPPLEMENTARY INFORMATION:

Proceeding

The Commission published a Notice of Proposed Rulemaking in the

Federal Register on July 28, 1994, 59 FR 38418 (``NPR'' or ``Proposed

Rule''),\1\ proposing to establish new filing fees. In the NPR, the

Commission noted that the Independent Offices Appropriation Act

(``IOAA''), 31 U.S.C. 9701, permits it to establish fees for services

and benefits that the Commission provides to specific recipients. The

primary guidance for implementation of IOAA is Office of Management and

Budget (``OMB'') Circular A-25, as revised July 8, 1993. OMB Circular

A-25 requires that a reasonable charge be made to each recipient for a

measurable unit or amount of Federal Government service from which the

recipient derives a benefit, in order that the Government recover the

full cost of rendering that service. OMB Circular A-25 further provides

that costs be determined or estimated from the best available records

in the agency, and that cost computations shall cover the direct and

indirect costs to the Government of carrying out the activity.

---------------------------------------------------------------------------

\1\On the same day, the Commission also published in the Federal

Register (59 FR 38411) a companion Notice of Proposed Rulemaking in

Docket No. 94-14, Update of Existing Filing and Service Fees.

---------------------------------------------------------------------------

The NPR advised that the Commission's existing filing and service

fees do not include fees for certain services that appear to provide

special benefits to identifiable members of the public. The Commission,

accordingly, proposed to establish several new fees to reflect the full

cost of services that provide special benefits to identifiable members

of the public.

Fourteen entities filed comments in response to the NPR: C V

International, Inc.; Tampa Port Authority; Seariders International,

Inc.; the Inter-American Discussion Agreement;\2\ Puerto Rico Maritime

Shipping Authority (``PRMSA'');\3\ Matson Navigation Company, Inc.; The

Joint Carrier Group (``JCG''); Hanjin Shipping Co., Ltd.; Cari-Freight

Shipping Co. Ltd.; Caribbean Shipowners Association; Lykes Bros.

Steamship Co., Inc. (``Lykes''); Transportation Services Incorporated;

and the Japan Conferences.\4\ The National Industrial Transportation

League (``NIT League'')\5\ filed late comments, which are considered

herein.

---------------------------------------------------------------------------

\2\Conferences represented by the Inter-American Discussion

Agreement are: the Inter-American Freight Conference; Brazil/Puerto

Rico and U.S. Virgin Islands Conference; River Plate/Puerto Rico and

U.S. Virgin Islands Conference; and the Inter-American Freight

Conference-Pacific Coast Area.

\3\See appendix A.

\4\The Japan Conferences are: the Trans-Pacific Freight

Conference of Japan, the Japan-Atlantic and Gulf Freight Conference,

the Japan-Puerto Rico & Virgin Islands Freight Conference, and their

member lines.

\5\The NIT League is a voluntary organization said to represent

some 1,400 shippers and groups/associations of shippers conducting

industrial and/or commercial enterprises, large, medium, and small,

throughout the United States and internationally.

---------------------------------------------------------------------------

The commenters represent a variety of industry interests:

individual ocean common carriers, ocean freight conferences and other

aligned agreement parties, ocean freight forwarders, non- vessel

operating common carriers (``NVOCCs''), a tariff publisher, a shippers'

group, and a port authority.

Discussion

Tariff and ET Filing Fees

The bulk of the comments focuses on the new fees for tariff and ET

filings. Those commenters opposed to the proposed fees for tariff and

ET filing primarily contend that the Commission should not require

carriers to pay for filings that are mandated by law; that facilitate

the administering of FMC regulations; and that, they believe, benefit

the shipping public as a whole.

As regards the argument that tariff and ET filings are required by

law, we would point out that the Federal Communication Commission's

(``FCC'') imposition of fees for processing carrier tariffs has been

upheld, Electronics Industries Ass'n v. FCC, 554 F.2d 1109, 1115 (D.C.

Cir. 1976), as has the Interstate Commerce Commission's (``ICC'')

imposition of fees for processing tariffs, Central & Southern Motor

Freight Tariff Ass'n v. U.S., 777 F.2d 722, 730-36 (D.C. Cir. 1985)

(``Central & Southern''). The courts in these cases upheld the

agencies' assessment of tariff filing fees even though tariff filing

was mandated by law.

It is also argued that carriers should not pay for such filings

because the purpose of the Commission's tariff filing program is to

provide rate information to shippers.\6\ Carriers, however, derive

identifiable benefits from tariff filing. The carrier benefits of

tariff filing were explained in Central & Southern, 777 F.2d at 734,

n.8, in which the court observed:

\6\For example, JCG argue that the primary purpose of tariff

filing is to ensure certainty and stability in rates that enables a

shipper to obtain the rates that its competitors receive.

---------------------------------------------------------------------------

The tariff-filing requirement may contribute to industry

stability in at least two ways. First, it may make secret price-

cutting impossible, since tariffs are of course public records and

inasmuch as a motor carrier must charge the rate specified in its

tariff. Second, the requirement may make instantaneous price cuts

more difficult; before lowering its rates to meet or undercut the

competition, a carrier must go to the trouble of filing its new

proposed rates with the ICC. These statutorily provided constraints

on competition, in turn, stabilize profits of individual carriers.

Our conclusion that this increased industry stability warrants

the imposition of a filing fee may appear, at first blush,

inconsistent with the statement . . . that a fee may not be

predicated merely upon the adoption of some practice of general

benefit to the industry as a whole. Such is not the case, however.

The tariff system is, in a sense, a cooperative venture, sanctioned

by statute and supported by the ICC, in which each carrier agrees to

publish its rates, thereby foregoing the opportunity of making

secret, precipitous rate cuts that would be advantageous to the

carrier in the short run. In return, all the other carriers agree to

similar behavior, the result of which is to stabilize prices in the

industry. As already noted, this stability is one of the chief

purposes underlying the tariff-filing requirement. The ICC, by

accepting a carrier's tariffs, assists that carrier in fulfilling

its obligation to the other carriers, even as it assists the carrier

in complying with its statutory duty. Hence, in these special

circumstances, the ICC's tariff-filing services benefit the

individual carrier, and not merely the industry as a whole.

While the court in Central & Southern was considering the benefits of

the ICC's tariff filing program to surface carriers, its observations

are applicable to ocean common carriers as well.

In the NPR, the Commission recognized that there exist public

benefits from tariff and ET filings, such as increased public access to

carriers' rate and service information. In cases where, as here, fees

have been assessed for programs conferring both public and private

benefits, reviewing courts have concluded that there need only be a

special private benefit to an identifiable beneficiary to justify

assessment of a fee, regardless of ``incidental'' public benefits.\7\

The court in Central & Southern concluded that ``[i]f the asserted

public benefits are the necessary consequence of the agency's provision

of the relevant private benefits, then the public benefits are not

independent, and the agency would therefore not need to allocate any

costs to the public.'' Central & Southern, 777 F.2d at 732.

---------------------------------------------------------------------------

\7\See Electronic Industries Ass'n v. FCC, 554 F.2d at 1114-5;

Centeral & Southern, 777 F.2d at 731-32.

---------------------------------------------------------------------------

A public benefit that results from nothing more than providing a

private benefit, or is a necessary consequence of the agency's

providing a private benefit, would be ``incidental'' to the private

benefit. In contrast, an ``independent'' public benefit is a benefit

that results from additional expense or effort above and beyond

providing the private benefit. In Engine Manufacturers Association v.

Environmental Protection Agency and Carol M. Browner, Administrator, 20

F.3d 1177, 1180 (D.C. Cir. 1994), the court noted that ``* * * the

public benefits associated with cleaner air are incidental to, not

independent of, that private benefit, in the sense that they are

produced at no cost beyond that required to produce the private

benefit.''

The difference between ``independent'' and ``incidental'' benefits

has been explained in a case involving the FCC as follows:

If the Commission, in granting an equipment type approval * * *

is required to incur expenses for testing or inspection, such

expenses can be charged in full to the applicant. These activities

have undisputed private benefits although they may also create

incidental public benefits as well. But if the agency were to engage

in further activity to determine whether a piece of equipment which

has already been found to have no potential for creating `harmful

interference'. . . meets standards for consumer safety it would be

doing so to satisfy some independent public interest, and the charge

for these additional expenses could not be included in fees imposed

on equipment owners. Although there may be some private benefit in

safety testing, it is not a part of the service the agency must

render to the manufacturer in order for him to comply with the

statute: the additional tests service an independent public

interest, with only incidental private benefits.

Electronic Indus. Ass'n v. FCC, 554 F.2d at 1115.

Given the distinction drawn between ``independent'' and

``incidental,'' the NPR invited the industry to comment on whether the

public benefit of tariff and ET filings is ``independent'' or merely

``incidental'' to that of tariff and ET filers, and, if

``independent,'' to comment on what proportion of the costs to tariff-

filing and ET-filing carriers should be pro-rated to reflect any

``independent'' benefit to the general public.

JCG contends that the benefit to shippers from tariff and ET

filings is ``independent'' rather than ``incidental,'' and that filers

therefore should not be required to pay the full cost of tariff and ET

filings. JCG refers to the Report of the Advisory Commission on

Conferences in Ocean Shipping,\8\ which noted that the majority of

shippers supported tariff filing provisions, and stated that the

provisions:

\8\The Advisory Commission on Conferences in Ocean Shipping was

established pursuant to section 18(d) of the Shipping Act of 1984

(``1984 Act''), 46 U.S.C. app. 1717(d), to conduct a comprehensive

study of conferences in ocean shipping. The Advisory Commission

issued a final report in April, 1992.

---------------------------------------------------------------------------

* * * Protect the shipper by requiring that a rate filed in a tariff

be available to all shippers of like transportation characteristics

* * *. The notion of protecting small shippers vis-a-vis larger

shipper * * * is also widespread. Small shippers focus on this

particular notion of common carriage, and are concerned that larger

shippers will get rates and/or services that they will not be able

to get.

* * * Support for [Tariff Filing and Enforcement] also came from

certain shippers and shippers' associations who use the filed rate

as a benchmark when negotiating service contracts. Since part of the

benefit to a shipper of signing a service contract is obtaining a

discount from the prevailing tariff rate, knowing the rate in

advance provides an effective starting point. Shippers' associations

state that they also use the tariff rate as an indicator of the

benefit of a collectively negotiated service contract. Shippers'

associations say they may also use the tariff to discover the value

of alternative service options for their members. Since tariffs

identify both the rates and the conditions of service, the

information is available to the association to tailor the contract

to the varying needs of its members.

JCG Comments at 13-14, quoting The Advisory Commission on Conferences

in Ocean Shipping Report, at 117-118 (April 1992). JCG argues further

that since the initiation, implementation, and, to a larger extent,

oversight and enforcement of tariff and ET filing requirements were,

and are, done for the benefit of shippers and consignees, it must be

concluded that such benefits are ``independent.''

Similarly, Lykes questions whether the 29 cents of the 34 cent

tariff filing fee covering the cost of staff review is actually for the

benefit of the filers. Lykes argues that ATFI was initially proposed as

being for the benefit of the shipper, and that there is an

``independent'' rather than ``incidental'' public benefit from tariff

and ET filings, and that fully 50 percent of the benefits of tariff and

ET filings are for the public.

JCG and Lykes recommend a 50 percent reduction in any fee to be

charged to a carrier or conference, arguing that at least half of the

benefit of the Commission's services can be attributed to shippers. JCG

further suggests that, since Commission services also benefit the

general public, 50 percent may be too high a percentage to charge

filers. The Japan Conferences contend that no more than one-third of

the Commission's tariff and ET filing processing costs should be borne

by the carrier industry.

These comments, urging that tariff and ET filing confer public

benefits that are ``independent'' rather than ``incidental,'' have

merit. In Electronics Industries, the court observed that if an agency

engages in further activity beyond that which is required to ensure

statutory compliance, in order to satisfy some ``independent'' public

interest, the charges for these additional efforts could not be

included in fees assessed to private applicants. Some elements of the

Commission's tariff filing program go beyond those that are necessary

to ensure compliance with statutory tariff filing requirements,\9\ and

instead are designed to confer a benefit on the shipping public.

Specifically, the requirement in 46 CFR 514.15(a) that carriers file

algorithms with their tariffs facilitates shipper calculation of total

applicable freight charges.

---------------------------------------------------------------------------

\9\Section 8 of the 1984 Act, 46 U.S.C. app. 1707; section 502

of P.L. 102-582, 46 U.S.C. app. 1707a.

---------------------------------------------------------------------------

Similarly, the Commission incurs additional costs by carefully

reviewing each tariff commodity description to make tariffs clearer and

more accessible to the shipping public. This review goes beyond what is

required by the statutory tariff filing provisions. The current

practice of extensively reviewing commodity descriptions represents an

additional cost and confers an independent public benefit.

At this time, it is not possible to quantify the amount of

Commission costs in reviewing tariff and ET filings that are

attributable to the provision of an independent public benefit.

Therefore, it appears that the approach urged by the commenters--that

is, the even division of these costs between filers and the public at

large--is the most equitable way of resolving the issue. Consequently,

the Commission is reducing the proposed tariff and ET filing fees by 50

percent.

Commenters have argued that the imposition of any tariff filing fee

is an undue burden on the ocean transportation industry. They point out

that the proposed filing fees would be a significant additional cost to

what they have already spent to convert their tariffs to the ATFI

system. Commenters also submit that the tariff filing fee could prompt

carriers to file tariff information in a more generic manner, and could

have a chilling effect on the filing of independent actions.

Based on the Commission's own assessment and the broad industry

position that tariff and ET filing fees impose an undue burden on the

industry, the Commission will seek an OMB exception for imposing these

fees. Under OMB Circular A-25, an agency may request that OMB grant the

agency an exception from OMB's general policy of assessing fees,

permitting the agency to forego assessing fees if conditions exist to

justify an exception.

In addition to those discussed above, respondents comment on a

number of other issues concerning tariff and ET filing fees. These are

addressed below.

JCG, PRMSA, and the Japan Conferences raise questions about the

Commission's methodology in calculating the proposed fees. JCG and the

Japan Conferences question the Commission's methodology as being less

than thorough, and argue that the Commission was unclear in describing

its time allocation methodology.\10\

---------------------------------------------------------------------------

\10\JCG contends that it is premature to propose user fees based

on services provided under a system, i.e., ATFI, that is still being

developed and the costs now being incurred are probably not an

accurate measure of what should be allocated.

---------------------------------------------------------------------------

As explained in the NPR, the Commission employed the best available

data to calculate the proposed filing fees, employing inhouse surveys

to determine the time and cost involved in providing particular

services. Extensive time and motion studies are not necessarily

required. See Central & Southern, 777 F.2d at 736-37. OMB Circular A-25

provides that the ``full cost [of a service] shall be determined or

estimated from the best available records of the agency, and new cost

accounting systems need not be established solely for this purpose

[setting fees].'' Section 6d(1)(e). The Commission need only provide

``some reasonable basis for its conclusions.'' Engine Manufacturers, 20

F. 3d at 1177. The methodology employed by the Commission satisfies

this standard.\11\

---------------------------------------------------------------------------

\11\See also National Association of Broadcasters v. Federal

Communications Commission, 554 F.2d 1118, 1130 (D.C. Cir. 1976),

nothing that ``[t]he ability to recoup both direct and indirect

costs to the Government does allow for some range and latitute in

effecting a reasonable attribution of costs.''

---------------------------------------------------------------------------

In addition to providing an extensive explanation of the

Commission's methodology to calculate its proposed fees, the NPR also

indicated that a detailed summary of the data used to arrive at the

proposed fees was available to the public from the Commission. To our

knowledge, only one commenter availed itself of this opportunity.

In response to the comment that it is premature to implement a user

fee for ATFI, the Commission explained in the NPR that OMB directed the

Commission to pursue establishing a tariff filing fee in 1994. Further,

the Commission employed the best available data to calculate the

proposed fees. Moreover, the Commission intends to periodically update

tariff filing fees, adjusting for changes in costs as warranted.

The Japan Conferences question the Commission's calculations of

indirect costs assignable to fee-related services. They further

question why the Commission included the proportional costs of several

FMC bureaus and offices\12\ that are only peripherally involved with

tariff filing, suggesting that such expenses be reduced by at least 50

percent.\13\

---------------------------------------------------------------------------

\12\Office of the Commissioners, General Counsel, Bureau of

Administration, and Bureau of Trade Monitoring and Analysis.

\13\The Japan Conferences urge that the proportional cost of the

Office of the Secretary be entirely deducted from the indirect cost

calculation.

---------------------------------------------------------------------------

As explained in the NPR, the FMC generally adopted the ICC's

methodology for determining indirect costs because the ICC's fee

schedule and methodologies have been reviewed by the courts and

generally deemed acceptable.\14\ See Central & Southern, 777 F.2d at

722. Although we developed an indirect cost methodology based on the

ICC's experience, we nevertheless deducted a number of expenses to

calculate the FMC's indirect costs. For example, the ICC employs an

indirect cost item for operations overhead, which apportions senior

executive time across fee-generating activities. Because we were able

to account for senior executive time in each service item, a separate

overhead item would be redundant. Accordingly, this ICC component was

not included in the FMC's calculations. Additionally, in calculating

our indirect costs, we deducted certain expenses that have no nexus

with any fee activity from the office general and administrative

component of the indirect cost calculation (e.g., buying Census data).

---------------------------------------------------------------------------

\14\The Japan Conference also point out that the Commission's

indirect costs, calculated at 99.5 percent of direct costs, is more

than 50 percent higher than the ICC's indirect costs reviewed in

Central & Southern, supra 777 F.2d at 726-27. However, the Japan

Conferences fail to take into account that the ICC's indirect costs

cited in Central & Southern were calculated almost ten years ago,

and that the ICC's current indirect cost factor is 100.8 percent,

slightly higher than that of the FMC.

---------------------------------------------------------------------------

In light of appeals court precedent supporting the methodology

employed in calculating the FMC's indirect costs, and because of the

attention given to include only those expenses that are relevant to our

indirect cost calculations, the Japan Conferences' arguments are

rejected.

JCG also states that a tariff filing fee may act as a disincentive

to taking independent action by conference members, and further, that

it could lead carriers and conferences to delay tariff filing at the

expense of clarity. The Japan Conferences recommend that the Commission

calculate a flat per-tariff or per-carrier/conference fee that would

not have, they contend, a disabling effect on the independent action

process or commodity-based tariffs. Similarly, JCG urges the Commission

to consider establishing a fixed annual fee for each tariff filed to

avoid repeat billings and collections and to reduce both Commission and

conference/carrier administrative time and costs. JCG contends that a

flat fee would also create a certainty for filers from the standpoint

of knowing the annual fees that will be paid for tariff filing

activities.

Administrative costs may decline if the Commission implements a

flat annual fee for tariff filing. A flat annual fee for tariff filing,

therefore, has some appeal. Further study would be required, however,

to determine the level of a cost-based fee. Also, adoption of a flat

fee is beyond the scope of this rulemaking.

Lykes argues that the Commission should reserve a certain

percentage of any user fees assessed for system enhancement in the

future, thereby addressing a certain lack of flexibility in the current

system. According to Lykes, these enhanced capabilities should include

simultaneous multiple tariff access, better definition and capabilities

for inland table construction and utilization, and inclusion of

transport mode in through single factor rate filings. Whatever its

merit otherwise, Lykes' suggestion is irreconcilable with the IOAA and

OMB Circular A-25, which instruct that user fee collections not be used

to offset costs of activities that are not related to the specific

service the Commission is performing for an identifiable recipient.

The Japan Conferences comment that ATFI contractor costs should be

pro-rated between filing and retrieval expenses, otherwise the

Commission will be charging twice for the same service. As explained in

the NPR, only that portion of the ATFI system cost allocated to filers

was included in the proposed filing fee. Because there is no double

billing of contractor costs, the Japan Conferences' concerns are

unfounded.

Hanjin Shipping Co., Ltd. (``Hanjin'') contends that the proposed

fees constitute a tax on international trade because such fees fail to

consider international comity, that is, other countries do not require

such filings and fees. Hanjin argues that the Commission should not

impose burdensome fees in the United States, where no such fees are

assessed by foreign governments on carriers operating there. Contrary

to Hanjin's assertions, the proposed tariff filing fee is not a tax.

The fee is designed to recover the full cost to the Commission of

performing a service that provides tariff filers with a special

benefit, as mandated by OMB Circular A-25. In Federal Power Commission

v. New England Power Co., 415 U.S. 345, 351 (1974), the Court held that

the assessment of specific charges to specific individuals or companies

was ``within the boundaries of the `fee' system and away from the

domain of `taxes'.''

The Tampa Port Authority urges that public entities, like itself,

be exempted from tariff filing fees because they are exempted from the

Commission's subscription fees. Exempting port authorities from paying

subscription fees is a courtesy provided by the Commission, since port

authorities typically request Commission issuances for informational

purposes. However, tariff filing provides a specific benefit to members

of the shipping public, including port authorities, similar to that

gained by private entities. No distinction would appear to exist

between the status of public and private tariff filers to justify the

exemption of port authorities from filing fees.

To address other matters raised concerning tariff and ET filings,

the Commission clarifies that: (1) The tariff and ET filing fee will

apply even if the filing or ET is subsequently rejected; (2) billing

for ETs will be based on a set of terms for an individual service

contract rather than on each term in the set, e.g., a filer of a

service contract who files a set of ten essential terms for that

contract will be billed a total of $1.65, not $16.50; (3) billing for

tariff filing will be done according to a filer's logon identification

number; and (4) to the extent possible, the Commission intends to bill

filers on a monthly basis.

Agreement Filing Fees

Several commenters contend that they should not be required to pay

the full cost of agreement filing because of the broad public benefit

associated with such filings, but do not elaborate on the nature and

extent of this public benefit. They also state that the proposed

agreement filing fees will discourage regular compliance and encourage

withholding important changes until such time as several changes can be

filed in a single amendment.

As stated in the NPR, the processing of agreements benefits the

filing parties because of the concomitant antitrust immunity conferred

by the Shipping Act, 1916, 46 U.S.C. app. Sec. 801 et seq., and the

Shipping Act of 1984, 46 U.S.C. app. Sec. 1701 et seq. Agreements

enable joint ratemaking or cost-cutting measures to accrue to the

benefit of the signatory parties. The sales revenues or cost savings,

or both, can add up to millions of dollars for one carrier, let alone

several carriers. While carrier savings may eventually benefit the

public, that benefit is incidental to the private benefits enjoyed by

the parties to agreements filed under the Shipping Acts. Concerns that

the proposed filing fee will have a dampening effect on filing

agreements, or amendments thereto, are speculative at best and do not

weigh against imposing the proposed filing fee.

General Rate Increase Filing Fee

Several commenters oppose the proposed filing fee for general rate

increases (``GRIs'') in the domestic offshore trade, contending that

such filings are for the public benefit, and that the full cost of such

review should not be borne by the carrier.\15\ However, the proposed

filing fee is based on the full cost to the Commission of processing

GRI filings, and not on the broader incidental benefits associated with

a regulated domestic offshore trade.\16\ Further, Commission review of

GRIs benefits filers, in that it ensures that they comply with

statutory requirements of the Intercoastal Shipping Act, 1933, 46

U.S.C. app. section 843 et. seq., i.e., that filed rates be just and

reasonable.

---------------------------------------------------------------------------

\15\PRMSA comments that the filing of GRIs is part of the

regulatory regimen established for the benefit of the public--to

ensure that the shipping public is treated fairly and without

discrimination.

\16\The NPR explained how filers of GRIs in the domestic

offshore trades specifically benefit because of the potential for

increased revenues.

---------------------------------------------------------------------------

The Commission believes that carriers operating in the domestic

offshore trades receive a clear and definite benefit from GRIs, and

that any public benefit flowing from Commission review of such filings

is ``incidental'' to the benefits accruing to the filers. The benefits

to carriers include their potential for increased revenues, and

assistance in meeting their statutory duty to charge ``just and

reasonable'' rates. Therefore, reduction of the GRI filing fee to

account for public benefit is not warranted.

Matson Navigation Company, Inc. (``Matson'') regards the imposition

of a new filing fee at this time as untimely. It points out that the

Commission is considering revisions of its methodology for determining

the reasonableness of a carrier's GRIs.\17\ Matson states that the new

GRI fee is based on historic cost data and that there is no indication

in the NPR that the Commission has yet made an analysis of what the

costs will be under the proposed revised methodology. The Commission is

therefore urged to defer implementation of its GRI filing fee proposal

until it has developed sufficient cost experience under the new

methodology to justify imposition of such a fee.

---------------------------------------------------------------------------

\17\See Docket No. 94-07, Financial Reporting Requirements and

Rate-Of-Return Methodology in the Domestic Offshore Trades, 59 FR 67

(April 7, 1994).

---------------------------------------------------------------------------

Matson's concerns themselves appear untimely, as any new GRI

methodology is some time away. If and when the Commission changes

methodologies, the cost of processing GRIs under the new method will be

studied and adjustment made accordingly. For now, the Commission still

employs the current method for determining the reasonableness of GRIs,

and the proposed fee reflects the current cost to the Commission of

analyzing GRIs.

PRMSA comments that including the agency's general and

administrative costs and other indirect costs (many of which PRMSA sees

as not pertaining to the cost of processing a GRI) is unreasonable and

improper. It argues that carriers should not be required to pay

Government overhead, which includes matters such as travel, furniture

and other expenses of the Commission, and which have little bearing on

the processing of those documents. At a maximum, PRMSA urges that the

industry should pay only those costs that are directly related to GRI

review.

As explained in the NPR, the Commission employed the best available

data to calculate the proposed filing fees, employing surveys to

determine the time and cost involved in providing particular services.

The courts have leaned toward reasonableness in attributing costs, not

necessarily exactitude.\18\ Furthermore, the Commission's method for

allocating indirect costs follows what has been generally accepted in

Central & Southern. Finally, the Commission deducted certain expenses

from its indirect cost calculations so that only relevant expenses

remained in calculating the proposed fees.

---------------------------------------------------------------------------

\18\See Engine Manufacturers Association, 20 F.3d at 1177.

---------------------------------------------------------------------------

PRMSA claims that the Commission's proposal to cover the full cost

of GRI filings is arbitrary because recouping the full cost does not

extend to other types of filings such as formal complaints, petitions,

and informal complaints, none of which include the Administrative Law

Judges' or Hearing Counsel's time.

The Commission's method for the assessment of user fees for GRI

filings is similar to the approach used for other Commission

activities. The proposed fees for filing formal complaints, petitions,

and informal complaints do not include any cost for adjudicatory

functions that they may require.\19\ Similarly, the proposed fees for

GRI and agreement filings do not include any cost for adjudicatory

functions. The filing fee for GRIs only covers the analytical staff

work in reviewing GRIs.

---------------------------------------------------------------------------

\19\As the Commission explained in the NPR, enforcement

activities are not deemed appropriate for assessing fees because

they are adjudicatory functions that have broad public significance

and a quasi-judicial impact.

---------------------------------------------------------------------------

Finally, PRMSA contends that the Commission's GRI fee of $11,951 is

inconsistent with the fees charged by other agencies. PRMSA cites the

ICC, which charges a fee of $7,700 to process requests for nationwide

and regional collectively filed GRIs under 49 CFR 1002.2(f). FMC review

of GRI filings in the domestic offshore trade is distinct in both

purpose and resource requirements from the ICC's processing of GRIs.

Further, while the FMC adopted the approach used by the ICC in

developing a methodology for determining indirect costs, we recognized

the need to develop our own fees due to differing cost structures

between the two agencies.

The proposed fees concerning applications filed by carriers in the

domestic offshore trades, requesting permission to deviate from annual

reporting requirements, did not elicit any comment and are adopted as

final.

Based on the foregoing, the Commission is adopting as final the

proposed new fees, as amended herein. Because the Commission finds that

there is an ``independent'' public benefit associated with tariff and

ET filings, the Commission is reducing by half the tariff filing fee to

$.17 per filing object, and the ET filing fee to $1.65 per set. See

Appendix B for a summary of the new fees established in this

proceeding.

To permit sufficient time to develop, test, and implement billing

procedures for collecting tariff and ET filing fees, the Commission is

delaying the effective date for those fees to April 1, 1995.

In keeping with OMB guidelines, the Commission intends to update

its fees on an annual basis. In updating its fees, the Commission will

incorporate changes in the wages and salaries of its employees into

direct labor costs associated with its services, and recalculate its

indirect costs (overhead) based on current costs.

In the NPR, the Commission certified, pursuant to section 605(b) of

the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the Proposed Rule

would not have a significant economic impact on a substantial number of

small entities, including small businesses, small organizational units,

and small governmental jurisdictions. The Commission did recognize,

however, that the proposed new fees may have an impact on the shipping

industry, but not of the magnitude that would be contrary to the

requirements of the Regulatory Flexibility Act.

As mentioned earlier, commenters argue that the proposed tariff and

ET filing fees would significantly increase their cost of doing

business, and that this additional cost coupled with what they have

already spent to convert their paper tariffs to the ATFI system

represents an undue burden on the industry.

Under the Regulatory Flexibility Act, agencies may examine

alternatives to minimize the economic burden of proposed rules on an

industry. Given the obligation to assess fees imposed on the FMC by the

IOAA and OMB Circular A-25, the Commission finds that there are no

viable alternatives, and that the proposed tariff and ET filing fees,

as amended herein, are the least burdensome choice for the Commission.

Although there is no apparent alternative that would minimize the

economic burden of tariff and ET filing fees on the industry and

achieve the Commission's regulatory objective, the Commission is

pursuing, nevertheless, an OMB exception, which would permit the

Commission to forego collecting these fees. If the Commission receives

a favorable response, the Commission will remove these fees from its

rules.

This final rule does not contain any collection of information

requirements as defined by the Paperwork Reduction Act of 1980, as

amended. Therefore, OMB review is not required.

List of Subjects

46 CFR Part 514

Freight, Harbors, Maritime carriers, and Reporting and

recordkeeping requirements.

46 CFR Part 552

Maritime carriers, Reporting and recordkeeping requirements, and

Uniform System of Accounts.

46 CFR Part 560

Administrative practice and procedure, Antitrust, Freight, Maritime

carriers, Penalties, and Reporting and recordkeeping requirements.

46 CFR Part 572

Administrative practice and procedure, Maritime carriers, and

Reporting and recordkeeping requirements.

Pursuant to 5 U.S.C. 553, the Independent Offices Appropriations

Act, 31 U.S.C. 9701, and section 17 of the Shipping Act of 1984, 46

U.S.C. app. 1716, the Commission amends title 46 of the Code of Federal

Regulations as follows:

PART 514--TARIFFS AND SERVICE CONTRACTS

1. The authority citation for Part 514 continues to read as

follows:

Authority: 5 U.S.C. 552 and 553; 31 U.S.C. 9701; 46 U.S.C. app.

804, 812, 814-817(a), 820, 833a, 841a, 843, 844, 845, 845a, 845b,

847, 1702-1712, 1714-1716, 1718, 1721 and 1722; and sec. 2(b) of

Pub. L. 101-92, 103 Stat. 601.

* * * * *

2. In Sec. 514.1, the heading is revised and a new paragraph (f) is

added to read as follows:

* * * * *

Sec. 514.1 Scope, purpose, requirements, penalties and fees.

* * * * *

(f) Filing fee. Under the authority of the Independent Offices

Appropriation Act, 31 U.S.C. 9701, the Commission assesses a filing fee

for ATFI filings. See Sec. 514.21(i) for filing fees.

3. In Sec. 514.21, paragraph (i) is added to read as follows:

Sec. 514.21 User charges.

* * * * *

(i) Tariff filing fee. The fee for tariff filing in either the

foreign or domestic offshore commerce of the United States shall be 17

cents per filing object; the fee for filing service contract essential

terms shall be $1.65 per filing set.

PART 552--FINANCIAL REPORTS OF VESSEL OPERATING COMMON CARRIERS BY

WATER IN THE DOMESTIC OFFSHORE TRADES

4. The authority citation for Part 552 is revised to read as

follows:

Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. app. 817(a),

820, 841a, 843, 844, 845, 845a, and 847.

5. In Sec. 552.2, the heading is revised, and new paragraphs

(c)(3), (d)(3), and (f)(3) are added and a sentence is added at the end

of the paragraph (e) to read as follows:

* * * * *

Sec. 552.2 General requirements and fees.

* * * * *

(c) * * *

(3) Applications shall be accompanied by remittance of a $55 filing

fee.

(d) * * *

(3) Applications shall be accompanied by remittance of a $165

filing fee.

(e) * * * Applications shall be accompanied by remittance of a $103

filing fee.

(f) * * *

(3) The filing of proposed rate changes described in this paragraph

shall be accompanied by remittance of a $11,951 filing fee.

* * * * *

PART 560--AGREEMENTS BY COMMON CARRIERS AND OTHER PERSONS SUBJECT

TO THE SHIPPING ACT, 1916

6. The authority citation for Part 560 is revised to read as

follows:

Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. app. 814,

817(a), 820, 821, 833a and 841a.

Subpart C--Exemptions

* * * * *

7. The following identical text is added as Secs. 560.302(c),

560.303(c), 560.304(c), 560.305(c), 560.306(f), 560.307(g), 560.308(c),

and 560.309(d), reading as follows:

* * * * *

( ) The filing fee for such agreements is described in section

560.401(c).

* * * * *

Subpart D--Filing and Form of Agreements

* * * * *

8. In Sec. 560.401, the heading is revised and a new paragraph (c)

is added to read as follows:

* * * * *

Sec. 560.401 Filing of Agreements; fees.

* * * * *

(c) Agreement filings for Commission action requiring detailed

justification and review by the Commission shall be accompanied by

remittance of a $1,402 filing fee; agreement filings for Commission

action not requiring detailed justification, but requiring review by

the Commission, shall be accompanied by remittance of a $695 filing

fee; and, agreement filings for terminal and carrier exempt agreements

shall be accompanied by remittance of a $120 filing fee.

PART 572--AGREEMENTS BY COMMON CARRIERS AND OTHER PERSONS SUBJECT

TO THE SHIPPING ACT OF 1984

9. The authority citation for Part 572 is revised to read as

follows:

Authority: 5 U.S.C. 553; 31 U.S.C. 9701; 46 U.S.C. app. 1701-

1707, 1709-1710, 1712 and 1714-1717.

Subpart C--Exemptions

10. The following identical text is added as Secs. 572.302(d),

572.303(c), 572.304(c), 572.305(c), 572.306(f), 572.307(g), 572.308(e),

572.309(c), 572.310(c), and 572.311(d) reading as follows:

* * * * *

( ) The filing fee for such agreements is described in

Sec. 572.401(f).

* * * * *

11. In Sec. 572.401, the reading is revised, and a new paragraph

(f) is added to read as follows:

* * * * *

Sec. 572.401 Filing of agreements; filing fees.

* * * * *

(f) Agreement filings for Commission action requiring an

Information Form and review by the Commission shall be accompanied by

remittance of a $1,402 filing fee; agreement filings for Commission

action not requiring an Information Form, but requiring review by the

Commission, shall be accompanied by remittance of a $695 filing fee;

agreement filings reviewed under delegated authority shall be

accompanied by remittance of a $353 filing fee; and agreement filings

for terminal and carrier exempt agreements shall be accompanied by

remittance of a $120 filing fee.

By the Commission.

Joseph C. Polking,

Secretary.

Note: The following appendices will not appear in the Code of

Federal Regulations.

Appendix A

Conferences and Discussion Agreements and the ATFI Working Group

Represented by the Joint Carrier Group

Asia North American Eastbound Rate Agreement

Colombia Discussion Agreement

Hispaniola Discussion Agreement

Inter-American Discussion Agreement

Inter-American Freight Conference

Inter-American Freight Conference Pacific Coast Area

Inter-American Freight Conference Puerto Rico and U.S. Virgin

Islands

Inter-American Freight Conference River Plate/Puerto Rico and U.S.

Virgin Islands/River Plate

Israel Trade Conference

Jamaica Discussion Agreement

Latin American Shipping Services Agreement

Mediterranean/North Pacific Freight Conference

Mediterranean/Puerto Rico Conference

Pacific Coast/Australia-New Zealand Tariff Bureau

PANAM Discussion Agreement

Southeastern Caribbean Discussion Agreement

South Europe American Conference

The 8900 Lines Agreement

Transpacific Westbound Rate Agreement

U.S. Atlantic & Gulf/Australia-New Zealand Conference

U.S. Atlantic & Gulf Hispaniola Freight Association

U.S. Atlantic & Gulf Port/Eastern Mediterranean North Africa Freight

Conference

U.S. Atlantic & Gulf/Southeastern Caribbean Freight Agreement

U.S./Panama Freight Association

Venezuelan American Maritime Association

West Coast of South America Agreement

West Coast of South America Discussion Agreement

Westbound Transpacific Stabilization Agreement

ATFI Working Group

American West African Freight Conference

Caribbean and Central America Discussion Agreement

The 8900 Lines Agreement

Inter-American Discussion Agreement

Inter-American Freight Conference

Israel Trade Conference

South Europe American Conference

Trans-Atlantic Agreement

Transpacific Westbound Rate Agreement

U.S. Atlantic & Gulf/Australia-New Zealand Conference

Appendix B

Federal Maritime Commission, Summary of New Fees

------------------------------------------------------------------------

CFR citation Application or service New fee

------------------------------------------------------------------------

Part 514--Tariffs and Service Contracts

------------------------------------------------------------------------

514.21(i) Tariff filing.......................... 17 cents per

filing object.

Filing a set of service contract $1.65 per

essential terms. filing set.

------------------------------------------------------------------------

Part 552--Financial Reports of Vessel Operating Common Carriers by Water

in the Domestic Offshore Trades

------------------------------------------------------------------------

552.2(f) General Rate Increase.................. $11,951

552.2(c) Application for Extension of Time for 55

Filing.

552.2(d) Application for Submission of 165

Alternative Data.

552.2(e) Application for Waiver of Detailed 103

Reporting Requirements.

------------------------------------------------------------------------

Part 560--Agreements by Common Carriers and Other Persons Subject to the

Shipping Act, 1916

------------------------------------------------------------------------

560.401(c) Agreement Filings Requiring Detailed 1,402

Justification and Commission Action.

Agreement Filings not Requiring 695

Detailed Justification but Requiring

Commission Action.

Agreement Filing for Terminal and 120

Carrier Exempt Agreements.

------------------------------------------------------------------------

Part 572--Agreements by Common Carriers and Other Persons Subject to the

Shipping Act of 1984

------------------------------------------------------------------------

572.401(f) Agreement Filings Requiring Information 1,402

Form and Commission Action.

Agreement Filings not Requiring 695

Information Form but Requiring

Commission Action.

Agreement Filing Reviewed Under 353

Delegated Authority.

Agreement Filing for Terminal and 120

Carrier Exempt Agreements.

------------------------------------------------------------------------

[FR Doc. 94-30475 Filed 12-9-94; 8:45 am]

BILLING CODE 6730-01-W