Maritime Security Program

DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 295

[Docket No. R-163]

RIN 2133-AB24

Maritime Security Program

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Final rule.

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SUMMARY: The Maritime Administration (MARAD) is issuing this final rule

to provide procedures to implement the provisions of the Maritime

Security Act of 1996 (MSA). The MSA establishes a new Maritime Security

Program (MSP), which authorizes payments through FY 2005. The MSP

supports the operations of U.S.-flag vessels in the foreign commerce of

the United States through assistance payments. Participating vessel

operators are required to make their ships and other commercial

transportation resources available to the Government during times of

war or national emergency.

DATES: This final rule is effective July 17, 1997.

FOR FURTHER INFORMATION CONTACT: Raymond R. Barberesi, Director, Office

of Sealift Support, Telephone 202-366-2323.

SUPPLEMENTARY INFORMATION:

Background

Section 2 of the MSA amended Title VI of the Merchant Marine Act,

1936, as amended, 46 App. U.S.C. 1171 et seq. (Act), by adding a new

Subtitle B, which authorizes MSP to provide assistance for operators of

U.S.-flag vessels that meet certain qualifications. It requires the

Secretary of Transportation (Secretary) to establish a fleet of active,

militarily useful, privately owned vessels to meet national defense and

other security requirements, while also maintaining an American

presence in international commercial shipping. Section 655 of the MSA

authorized $100 million annually through fiscal year 2005 to support

the operation of up to 47 U.S.-flag vessels in the foreign commerce of

the United States. Payments to participating operators are $2.1 million

per ship, per year. Participating operators are required to make their

ships available upon request by the Secretary of Defense during times

of war or national emergency. Unlike the operating-differential subsidy

(ODS) program, the MSP has few restrictions on vessels operating in the

U.S.-foreign commerce and eligible vessels may be built in foreign

shipyards.

Interim Final Rule

As authorized by section 8 of the MSA, MARAD issued an interim

final rule on October 16, 1996, (61 FR 53861), which added a new 46 CFR

Part 295. That rule provides procedures to implement the MSA with

respect to the application for, and award of, MSP operating agreements

that provide financial assistance to operators of vessels enrolled in

the program. The program will be administered on the basis of one-year

renewable contracts, provided funding is available in subsequent years.

The rule provides that participating operators will be required to

operate eligible vessels in the foreign commerce of the United States,

and certain specified mixed foreign and domestic areas, with a minimum

of operating restrictions, for at least 320 days in any fiscal year. It

provides that payments will be made on a prorated basis for vessels

operated less than 320 days in any year, exclusive of days a MSP vessel

is being drydocked, surveyed or repaired. In addition, no payments will

be made for each day any vessel carries civilian bulk preference

cargoes of 7,500 tons or more.

The interim final rule issued on October 16, 1996, allowed an

initial comment period ending November 15, 1996. This comment period

was later extended to December 2, 1996 by notice published in the

Federal Register (61 FR 58663; November 18, 1996). MARAD received 13

comments from persons or entities with an interest in the MSP,

including vessel operators, labor unions, representatives of U.S.

shipyards, and U.S. insurers providing U.S. marine hull insurance. In

addition, on October 11, 1996, MARAD invited applications for

participation in the MSP by

[[Page 37734]]

advertisement in the Federal Register (61 FR 53483) using the

application approved under OMB Approval No. 2133-0525. Based on these

applications MARAD awarded 47 contracts for annual payment of $98.7

million. Accordingly, the application process has been closed until

such time as additional funding may become available.

Editorial and Clarifying Comments Adopted

The commentors submitted many helpful, editorial and clarifying

comments which MARAD is incorporating in the final rule. In general,

the final rule drops all references to FY 1996. The term Eligible

Contractor is being deleted as it is confusing and now holds no

relevance. The reference in Sec. 295.10(b)(3) will read ``applicant,''

not ``contractor'' and reference will be made to the Maritime Security

Fleet Program instead of Maritime Security Program in Sec. 295.1

``Purpose.'' With respect to the hull insurance comments affecting the

marine insurance industry, MARAD will encourage use of the American

market for marine hull insurance to the maximum extent possible when

rates, terms and conditions offered by American underwriters are

competitive with those offered by foreign underwriters. In order to

satisfy the Congressional intent of providing a less restrictive

program, this requirement will not be mandatory.

Summary of Substantive Comments by Section

Definition of Militarily Useful

Sec. 295.2(q)

Comment: MARAD received three comments, two that requested

clarification of the term ``militarily useful'' and one that requested

that the term be deleted entirely. According to that commentor, the

Department of Defense (DOD) is the expert in the area of military

utility and, as written, the definition exceeds the authority of the

MSA.

Response: MARAD disagrees with the comment that a definition of

``militarily useful'' exceeds the MSA. Under the MSA, responsibility

for the determination of military utility belongs to MARAD in

conjunction with DOD, pursuant to authority contained in section

651(b)(1)(c) of the Act. MARAD agrees that DOD criteria should be

considered and therefore will use the Joint Strategic Capabilities Plan

(JSCAP) definition of ``militarily useful'' in the final rule to define

the type of vessel utility that would qualify a vessel as being

eligible for the MSP. MARAD agrees with the comments that requested

clarification and will include the applicable JSCAP definition

describing vessel types deemed acceptable for MSP use. The regulation

at Sec. 295.2(q) will be amended accordingly.

Definition of ``Related Party''

Sec. 295.2(x)(New)

Comment: MARAD received five comments from carriers on the issue of

clarifying the term ``related party'' used in numerous provisions of

the Interim Final Rule. Three commentors requested clarification of the

definition of the term and two commentors requested that the reference

be deleted from Sec. 295.12(a)(1).

Response: The term ``related party'' is defined in the MSA in

section 656(h), which specifies that the definition is for the purposes

of section 656 only. At the time the Interim Final Rule was published,

many questions concerning the interpretation of section 656 had not

been resolved and references to the non-contiguous domestic trades were

not finalized. As a result, no definition of this term was

contemplated. However, in view of the comments received and the use of

the term in section 652(i) of the Act and its reflective language in

Sec. 295.12 of the regulations, MARAD agrees that a general definition

is required. Accordingly, MARAD believes consistency requires that the

definition used in section 656(h) of the Act be used in general in the

regulations. That definition will be added to the definitions section

of the regulations with a new Sec. 295.2(x) ``Related Party.''

With regard to the reference to related parties in

Sec. 295.12(a)(1), that section was intended to mirror the language of

section 652(i)(1)(A)(i) of the Act relating to the ordering of

priorities in the granting of MSP awards. However, while the pertinent

language of that section of the Act reserves the highest first priority

eligibility to citizens of the United States, the language of

Sec. 295.12(a)(1) of the interim final rule extended that priority to

include related parties. Commentors requested that the term ``related

party'' be deleted from Sec. 295.12(a)(1), ``U.S. Citizen Ownership.''

MARAD agrees and this reference will be deleted.

Applications

Sec. 295.11(a)(2) (Revised)

Since MSP is authorized only through fiscal year 2005 and since it

has been fully implemented with annual renewable contracts,

applications will only be accepted in response to public invitation by

MARAD. Section 295.11(a)(2) has been clarified to establish the limits

within which applications will be accepted by MARAD.

Reflagging U.S. Vessels on the Basis of MSP Denial

Sec. 295.11(a)(4)

Comment: One commentor suggested that MARAD make clear that the

rejection for enrollment in the MSP of any U.S.-flag vessel which

requires, but did not receive either an affirmative defense or military

purposes determination or an age waiver, does not entitle the vessel to

be transferred to foreign registry without approval by DOT under

section 9 of the Shipping Act, 1916 (46 App. U.S.C. 808) (1916 Act).

Response: Generally, section 9(c)(2) of the 1916 Act provides that

a U.S.-documented vessel may not be transferred to a foreign registry

or operated under the authority of a foreign country without the

approval of the Secretary. Section 6 of the MSA adds a new subsection

(e) to section 9 of the 1916 Act. Pursuant to paragraph (2) of the new

subsection (e) an eligible vessel which has applied for an operating

agreement under the MSP, and which has not received an award within 90

days of application, may transfer to a foreign registry without

approval by the Secretary. After careful analysis, MARAD has determined

that the new section 9(e)(2) would not remove the requirement for

approval by MARAD for transfer to foreign registry of a U.S.-flag

vessel that applied for MSP but was not qualified for award other than

by reason of age. The statute applies only to vessels eligible under

section 651(b)(1), which encompasses all vessel eligibility

requirements, with the exception of age. Therefore, if MARAD has

determined that the applicant is qualified and the vessel is eligible

under the provisions of section 651(b)(1), but does not award a MSP

operating agreement due to lack of funds or an inadequate program

level, the applicant may remove the subject vessel from U.S. registry

and reflag the vessel under a foreign registry without section 9

approval by MARAD. This reflag would only apply to vessels eligible for

awards within a priority in which awards have been authorized. Vessels

under ODS contract or on MSC charter for which MSP applications have

been denied would be eligible to reflag only after those obligations

have expired.

[[Page 37735]]

Proration

Sec. 295.12(d)(1)

Comment: Rounding problems may produce more eligible vessels than

available slots.

Response: One comment was received regarding rounding of fractional

eligibility in the proration process. The point was that inclusion of

all fractional eligibility could result in a number of eligible vessels

that exceeds the funding available for a particular priority. MARAD

agrees. However, the problem of fractional vessels versus slots was

anticipated by the language of section 652(o)(2) of the Act.

Specifically, that section states that, if the number of vessels

eligible in a priority exceeds the available funding for the priority,

the number of awards to each person shall be made in approximately the

same ratio as the number of vessels that the individual applied for

bears to the total number of vessels applied for in the priority. The

term grants latitude within the process to round awards up or down, as

needed, to correct rounding problems and adjust awards. Accordingly,

Sec. 295.12(d)(1) provides a mechanism for dealing with rounding

problems and no changes are required.

Replacement Vessels

Sec. 295.20(c)

Comment: One comment was received concerning the statutory

authority and practical application of Sec. 295.20(c), which permits

the replacement of vessels enrolled in the MSP.

Response: In section 8(a), the MSA authorizes the Secretary to

prescribe rules as necessary to carry out the MSA. Providing for the

orderly replacement of vessels enrolled in the program, should such

replacement become necessary, falls within the purview of the

Secretary's mandate under section 8(a). Practical application of such

replacement would result from the loss of an enrolled vessel, or from

an enrolled vessel otherwise becoming ineligible for participation in

the program, for example, by becoming overage. The intent of

Sec. 295.20(c) is to provide the mechanism for such replacement.

Criteria are already established. Section 295.20(c) refers back to

Sec. 295.10, which establishes the eligibility criteria and reflects

section 651 of the Act. No change will be made in Sec. 295.20(c).

Notice to Shipbuilders

Sec. 295.20(d)

Comment: MARAD received four comments on Sec. 295.20(d). Two of the

commentors stated that the section exceeded the statutory authority of

the MSA by providing that MARAD issue notice in the Federal Register of

a contractor's intent to build a vessel in a foreign shipyard, and a

third commentor stated that this notice may be harmful to MSP

contractors. The commentors suggested that MARAD simply develop a list

of shipyards capable of building various types of vessels and make the

list available to the MSP contractors. A contractor then could satisfy

the requirements of section 652(b) of the MSA by directly providing

notice to the shipbuilders. One commentor suggested that the

prohibition against entering a contract with a foreign shipbuilder be

extended from 5 to 10 working days after MARAD's publication of notice

of the applicant's intent, and also that any interested U.S.

shipbuilder should be allowed not less than 30 days, and not more than

120 days, to submit a design and price to the Maritime Administration.

Further, the commentor suggested that MARAD require MSP contractors to

make both foreign and domestic bid prices known to MARAD. MARAD would

determine whether the U.S. bid is competitive and then notify the

contractor that, if they select the foreign offer, the vessel would not

be eligible for MSP payments.

Response: MARAD's role in issuing notices in instances where an MSP

contractor proposes construction of a vessel or vessels by a foreign

shipbuilder was intended to expedite the notification process while

ensuring that every shipbuilder in the United States would have proper

and timely notice. The agency considered the idea of providing a list

of shipbuilders to each MSP contractor. However, after review, MARAD

decided that such a list would be an inadequate notification tool when

considering the ever changing maritime environment. It is appropriate

for MARAD to exercise its discretion to provide adequate notice to U.S.

shipbuilders, and it would satisfy Congressional intent that they be

given an opportunity to compete for contracts. MARAD believes that

publishing in the Federal Register is in the best interest of U.S.

shipbuilders, since these notices are public documents and potential

U.S. shipbuilders have access to the information. MARAD agrees with the

comment concerning the length of the notice period because it will

allow a more reasonable time period for U.S. shipbuilders to learn of

the notice and respond to it. Section 295.20(d) will be amended to

provide that MARAD publish notice of a contractor's intent within 10

days of notification by the contractor, and that the contractor will be

required to wait an additional 10 days from the date of publication

before entering into any contract with a foreign shipyard.

With regard to a mandatory delay of 30 to 120 days for U.S.

shipyards to respond to a foreign contracting notice published by

MARAD, MARAD does not believe that it has authority under the MSA to

require such extended delay. The apparent intent of the legislation was

only that notification be given, not that an extended delay should be

imposed. Since the notification from the contractor is required ``not

later than 30 days'' after a solicitation of a bid from a foreign yard,

the bidding process should not be sufficiently advanced that U.S.

shipyards could not provide bids in an expeditious manner. Accordingly,

MARAD will not attempt to impose any further restriction on the

contractors by requiring a longer waiting period.

With respect to the comment that MARAD evaluate bids and withhold

MSA payments if the MSP operator selects a foreign shipyard, the MSA

contains no authority for MARAD to deny an award or withhold MSP

payments based on its evaluation of the U.S. bid being competitive.

Early Termination

Sec. 295.20(e)

Comment: One commentor suggested that Sec. 295.20(e) should be

rewritten substantially in the form of section 652(m) of the Act, or

that the phrase ``* * * to the extent and for the period * * *,'' be

inserted before, ``* * * contained in section 652(m) of the Act.''

Response: Section 295.20(e) concerns the obligations of a

contractor to keep an Agreement Vessel documented under U.S. registry

if the contractor voluntarily elects to terminate the MSP Agreement

before its termination date. The inclusion of the language ``* * * to

the extent and for the period * * *'' would add some clarity to this

provision by directly linking Sec. 295.20(e) to the period of time

specified for retention under U.S. registry in section 652(m) of the

Act. Section 295.20(e) will be amended accordingly.

Termination for Lack of Funds

Sec. 295.20(f)

Comment: One commentor has proposed that the title of this part be

changed to ``Nonrenewal for Lack of Funds.'' In addition, the commentor

suggested that vessels transferred to another registry under this

regulation should be transferred to ``Effective United States Control''

registries deemed acceptable by MARAD.

[[Page 37736]]

Response: The first proposed amendment, i.e., the use of

``Nonrenewal'' vs. ``Termination,'' would conform the regulation to the

language of section 652(n) of the Act. Section 295.20(f) will be

amended accordingly. With regard to the language on ``Effective United

States Control,'' it should be noted that the language contained in

that section of the Act specifies that ``* * * the vessel owner or

operator may transfer and register such vessel under a foreign registry

deemed acceptable by the Secretary of Transportation, notwithstanding

any other provision of law.'' The language adopted in Sec. 295.20(f)

states ``* * * the contractor may transfer and register the applicable

vessel under a foreign registry deemed acceptable to the Maritime

Administration.'' Since the Administrator has been delegated authority

by the Secretary to authorize such transfers, MARAD believes that the

language contained in Sec. 295.20(f) adequately covers this situation

and that no additional change is required.

Transfer of Operating Agreements

Sec. 295.20(i)

In light of the issues raised by many commentors regarding possible

transfers of MSP operating agreements, additional safeguards have been

included in Sec. 295.20(i) to ensure that, in the event an Agreement is

transferred by a Contractor to another person or entity, the person or

entity to whom an Agreement is transferred, and the vessel to be

covered by the Agreement after transfer, meet the original eligibility

requirements.

Limitations

Sec. 295.21(e)

Comment: One commentor noted that section 804 of the Act was

substantially changed by section 5 of the MSA, and recommended that ``*

* * as amended,'' be added to the first sentence of Sec. 295.21(e)

after ``* * * section 804.''

Response: MARAD agrees, and will make the change.

Determination of Section 656 Service Level Criteria

Sec. 295.21(f)

Comment: MARAD received four extensive comments regarding how it

should interpret the statute with regard to service levels and provide

objective criteria to determine the allowable levels of service

provided by MSP contractors in noncontiguous domestic trades. Most of

the commentors requested that the service levels be determined at their

historical levels, not anticipated carrying capacity. One commentor, in

addition to advocating the use of historical capacity figures for this

purpose, suggested that the applicant or contractor submit this

information under oath, subject to validation by an objective source,

and that the number of TEU's carried in the noncontiguous trades be

reported annually by MSP contractors under oath, and subject to audit.

Response: Upon receipt of the applications for the MSP, MARAD

published notification of those applications wherein the applicants

requested approval to continue existing noncontiguous domestic

operations. These notices were separate from the Interim Final Rule,

and the comments were received separately from those of this

rulemaking. Notices were published for Sea-Land Service, Inc., for

services to Hawaii, Puerto Rico and Alaska; Crowley Maritime Corp., for

Alaska; and OSG Car Carriers, Inc., for Alaska, Hawaii, Puerto Rico and

the U.S. Virgin Islands.

Comments were received from seven commentors on the published

levels of existing service claimed by the applicants, particularly

where service to Alaska and Hawaii is involved. However, the volume and

complexity of those comments mandated a thorough and separate

examination of the implementation of section 656 of the Act.

MARAD is reserving a section in the Final Rule for determination of

limitations on operations in the non-contiguous domestic trades, and

will publish a Notice of Proposed Rulemaking regarding those provisions

after the issue has been resolved. Section 295.21(f) has been reserved

for that purpose.

Need for Financial Data

Sec. 295.23

Comment: MARAD received numerous comments which stated that the

requirement for filing form MA-172 and an audited financial statement

was beyond the statutory authority contained in the MSP and should be

removed.

MARAD does not agree. In collecting such information, MARAD is

exercising its discretion to require information necessary to perform

its responsibilities and to monitor the efficiency and effectiveness of

the maritime industry. However, in an effort to minimize the

administrative burden on the contractor, the rule has been changed.

MARAD is not requiring the submission of Form MA-172. The Final Rule

will provide that, in the alternative, an applicant may submit an

audited financial statement and vessel operating cost data submitted as

part of its Emergency Preparedness Program Agreement. Final approval of

the MSP data collection requirement was made by OMB on February 24,

1997, under approval number 2133-0525.

Reduction in Amount Payable

Sec. 295.30 (b)

Comment: MARAD received three comments which requested that the 30-

day limitation on the number of days a vessel may be drydocked,

surveyed, inspected or repaired be made more flexible.

Response. MARAD agrees in part with the commentors regarding the

30-day limitation. Some legitimate shipyard periods may require a

greater length of time. However, in its capacity as funds

administrator, the agency must assess some reasonable time frame for

work or maintenance to be performed in order to ensure that the program

is for operating vessels. Therefore, the final rule at

Sec. 295.30(b)(1) will be revised to permit greater than 30-day periods

upon approval from MARAD.

Calculation for Partial Months

Sec. 295.31(a)(3) (New)

After experience gained in the start-up of the MSP in December 1996

and January 1997, MARAD realized that clarification was required

regarding billing and payment for partial months. To remedy the

problems experienced, a new Sec. 295.31(a)(3) was developed. The new

paragraph provides for potential prorating. The original

Sec. 295.31(a)(3) has been redesignated Sec. 295.31(a)(4), and

subsequent material has been redesignated accordingly.

Withholding 10 Percent of Funds Payable Until Final Review of the

Billing Period

Sec. 295.31(a)(4)

Comment: MARAD received two comments stating that withholding 10

percent of funds payable until final review of the billing period

exceeds the authority of the MSA.

Response: MARAD disagrees with the commentors that withholding of

funds exceeds the authority granted by the MSA. Pursuant to 46 App.

U.S.C. 1114(b), the Secretary, acting through the Administrator by

delegation, has the authority to adopt all necessary rules and

regulations to carry out the Act.

The intent of Sec. 295.31(a)(4) is to provide a readily available

source for the recapture of funds in the event that

[[Page 37737]]

a Contractor fails to meet the requirements of Sec. 295.21(d). Section

295.21(d) reflects the language of section 652(b) of the Act, which

requires that a vessel must be operated in U.S.-foreign, or specified

mixed foreign and domestic trade, and must remain documented under 46

U.S.C., Chapter 121. However, MARAD agrees with the commentors that the

establishment of an across-the-board level of 10 percent would not be

necessary in all cases under the MSP. Therefore, MARAD will exercise

its discretion to withhold funds based on a carrier's normal operating

experience. Section 295.31(a)(4) is being amended accordingly.

Rulemaking Analysis and Notices

Executive Order 12866 (Regulatory Planning and Review), and Department

of Transportation (DOT) Regulatory Policies

This rulemaking is not considered to be an economically significant

regulatory action under section 3(f) of E.O. 12866. This Final Rule

also is not considered a major rule for purposes of Congressional

review under P.L. 104-121. Since the program is designed to support 47

vessels in FY 1997, each receiving up to $2.1 million annually, the

Maritime Administrator finds that the program will not have an annual

effect on the economy of $100 million or more. However, it is

considered to be a significant rule under Executive Order 12866 and

DOT's Regulatory Policies and Procedures (44 FR 11034, February 26,

1979). Accordingly, it has been reviewed by the Office of Management

and Budget.

The program is subject to annual appropriations to provide payments

to the participants of $2.1 million for each Agreement Vessel for each

fiscal year in which the agreement is in effect. These payments are

approximately 50 percent less, per vessel, than the average payments

made under the existing ODS program. A full regulatory evaluation is

not necessary since this rule only establishes the procedures to

implement the Act, which imposes conditions for enrollment of vessels

in the MSP.

Federalism

MARAD has analyzed this rulemaking in accordance with principles

and criteria contained in E.O. 12612 and has determined that these

regulations do not have sufficient federalism implications to warrant

the preparation of a Federalism Assessment.

Regulatory Flexibility

Although the Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et

seq, does not apply to final rules for which a proposed rulemaking was

not required, MARAD has evaluated this rule under that Act and

certifies that this rule will not have a significant economic impact on

a substantial number of small entities. The participants in this

program are not small entities.

Environmental Assessment

MARAD has concluded that this final rule falls into a class of

actions that are categorically excluded from review under the National

Environmental Policy Act of 1969 (NEPA) because they would not

individually or cumulatively have a significant impact on the human

environment, as determined by section 4.05 and Appendices 1 and 2 of

Maritime Administrative Order MAO-600-1, which contains MARAD

Procedures for Considering Environmental Impacts (50 FR 11606, March

22, 1985) implementing NEPA. The final rule does not change the

environmental effect of the current ODS program, which the MSP

supersedes (and which is currently under a categorical exclusion

pursuant to MAO-600-1), because the vessels eligible for the MSP (1)

Will continue to operate under the U.S. flag, and will continue to be

governed by U.S.-flag state control while operating in the global

commons; and (2) are and will continue to be designed, constructed,

equipped and operated in accordance with stringent United States Coast

Guard and International Maritime Organization standards for maritime

safety and marine environmental protection. Therefore, this rule does

not require an environmental impact statement or an environmental

assessment pursuant to NEPA.

Paperwork Reduction

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

3507 et seq.), this rulemaking contains new information collection or

recordkeeping requirements, which were approved by OMB (approval number

2133-0525) under emergency approval authority until February 28, 1997.

This approval was subsequently extended by OMB for the customary three

years on February 24, 1997.

This rule does not impose any unfunded mandates.

List of Subjects in 46 CFR Part 295

Assistance payments, Maritime carriers, Reporting and recordkeeping

requirements.

Accordingly, Part 295 of 46 CFR Chapter II, Subchapter C, is

revised to read as follows:

PART 295--MARITIME SECURITY PROGRAM (MSP)

Subpart A--Introduction

Sec.

295.1 Purpose.

295.2 Definitions.

295.3 Waivers.

Subpart B--Establishment of MSP Fleet and Eligibility

295.10 Eligibility requirements.

295.11 Applications.

295.12 Priority for awarding agreements.

Subpart C--Maritime Security Program Operating Agreements

295.20 General conditions.

295.21 MSP assistance conditions.

295.22 Commencement and termination of operations.

295.23 Reporting requirements.

Subpart D--Payment and Billing Procedures

295.30 Payment.

295.31 Criteria for payment.

Subpart E--Appeals Procedures

295.40 Administrative determinations.

Authority: 46 App. U.S.C. 1171 et seq., 46 App. U.S.C. 1114 (b),

49 CFR 1.66.

Subpart A--Introduction

Sec. 295.1 Purpose.

This part prescribes regulations implementing the provisions of

Subtitle B (Maritime Security Fleet Program) of Title VI of the

Merchant Marine Act, 1936, as amended, governing Maritime Security

Program payments for vessels operating in the foreign trade or mixed

foreign and domestic commerce of the United States allowed under a

registry endorsement issued under 46 U.S.C. 12105.

Sec. 295.2 Definitions.

For the purposes of this part:

(a) Act, means the Merchant Marine Act, 1936, as amended by the

Maritime Security Act of 1996 (MSA)(46 App. U.S.C. 1101 et seq.).

(b) Administrator, means the Maritime Administrator, U.S. Maritime

Administration (MARAD), U.S. Department of Transportation, who is

authorized to administer the MSA.

(c) Agreement Vessel, means a vessel covered by a MSP Operating

Agreement.

(d) Applicant, means an applicant for a MSP Operating Agreement.

(e) Bulk Cargo, means cargo that is loaded and carried in bulk

without mark or count.

(f) Chapter 121, means the vessel documentation provisions of

chapter 121 of Title 46, United States Code.

(g) Citizen of the United States, means an individual or a

corporation, partnership or association as

[[Page 37738]]

determined under section 2 of the Shipping Act, 1916, as amended (46

App. U.S.C. 802).

(h) Contracting Officer, means the Associate Administrator for

National Security, MARAD.

(i) Contractor, means the owner or operator of a vessel that enters

into a MSP Operating Agreement for the vessel with MARAD pursuant to

Sec. 295.20 of this part.

(j) DOD, means the U.S. Department of Defense.

(k) Domestic Trade, means trade between two or more ports and/or

points in the United States.

(l) Eligible Vessel, means a vessel that meets the requirements of

Sec. 295.10(b) of this part.

(m) Emergency Preparedness Program Agreement, means the agreement,

required by section 653 of the Act, between a Contractor and the

Secretary of Transportation (acting through MARAD) to make certain

commercial transportation resources available during time of war or

national emergency.

(n) Enrollment, means the entry into a MSP Operating Agreement with

the MARAD to operate a vessel(s) in the MSP Fleet in accordance with

Sec. 295.20 of this part.

(o) Fiscal Year, means any annual period beginning on October 1 and

ending on September 30.

(p) LASH Vessel, means a lighter aboard ship vessel.

(q) Militarily Useful, is defined according to DOD Joint Strategic

Planning Capabilities Plan (JSCAP) guidance as follows:

(1) U.S. Sources--All active and inactive ocean-going ships (and

certain other specially selected vessels) within the following types

and criteria from United States sources with a minimum speed of 12

knots.

(2) Dry Cargo--All dry cargo ships, including integrated tug/barges

(ITBs) with a minimum capacity of 6,000 tons (DWT) capable of carrying,

without significant modification, any of the following cargoes: unit

equipment, ammunition, or sustaining supplies.

(r) MSP Fleet, means the fleet of vessels operating under MSP

Operating Agreements.

(s) MSP Operating Agreement, means the MSP Operating Agreement,

providing for MSP payments entered into by a Contractor and MARAD.

(t) MSP Payments, means the payments made for the operation of

U.S.-flag vessels in the foreign trade or mixed foreign and domestic

trade of the United States allowed under a registry endorsement issued

under 46 U.S.C. 12105, to maintain intermodal shipping capability and

to meet national defense and security requirements in accordance with

the terms and conditions of the MSP Operating Agreement.

(u) Ocean Common Carrier, means a carrier that meets the

requirements of the MSA, section 654(3).

(v) ODS, means Operating-Differential Subsidy provided by Subtitle

A, Title VI, of the Act.

(w) Operating Day, means any day during which a vessel is operated

in accordance with the terms and conditions of the MSP Operating

Agreement.

(x) Related party, means:

(1) a holding company, subsidiary, affiliate, or associate of a

contractor who is a party to an operating agreement under Subtitle B,

Title VI, of the Act; and

(2) an officer, director, agent, or other executive of a contractor

or of a person referred to in paragraph (x)(1) of this section.

(y) Roll-on/Roll-off Vessel, means a vessel that has ramps allowing

cargo to be loaded and discharged by means of wheeled vehicles so that

cranes are not required.

(z) Secretary, means the Secretary of Transportation.

(aa) United States Documented Vessel, means a vessel documented

under Chapter 121 of Title 46, United States Code.

Sec. 295.3 Waivers.

In special circumstances, and for good cause shown, the procedures

prescribed in this part may be waived in writing by the Maritime

Administration, by mutual agreement of the Maritime Administration and

the Contractor, so long as the procedures adopted are consistent with

the Act and with the objectives of these regulations.

Subpart B--Establishment of MSP Fleet and Eligibility

Sec. 295.10 Eligibility requirements.

(a) Applicant. Any person may apply to MARAD for Enrollment of

Eligible Vessels in MSP Operating Agreements for inclusion in the MSP

Fleet pursuant to the provisions of Subtitle B, Title VI, of the Act.

Applications shall be addressed to the Secretary, Maritime

Administration, 400 Seventh Street, S.W., Washington, D.C. 20590.

(b) Eligible Vessel. A vessel eligible for enrollment in a MSP

Operating Agreement shall be self-propelled and meet the following

requirements:

(1) Vessel Type. (i) Liner Vessel. The vessel shall be operated by

a person as an Ocean Common Carrier.

(ii) Specialty vessel. Whether in commercial service, on charter to

the DOD, or in other employment, the vessel shall be either:

(A) a Roll-on/Roll-off vessel with a carrying capacity of at least

80,000 square feet or 500 twenty-foot equivalent units; or

(B) a LASH vessel with a barge capacity of at least 75 barges; or

(iii) Other vessel. Any other type of vessel that is determined by

the MARAD to be suitable for use by the United States for national

defense or military purposes in time of war or national emergency; and

(2) Vessel Requirements. (i) U.S. Documentation. Except as provided

in paragraph (b)(2)(iv) of this section, the vessel is a U.S.-

documented vessel; and

(ii) Age. Except as provided in paragraph (b)(2)(iii), on the date

a MSP Operating Agreement covering the vessel is first entered into is:

(A) a LASH Vessel that is 25 years of age or less; or

(B) any other type of vessel that is 15 years of age or less.

(iii) Waiver Authority. In accordance with section 651(b)(2) of the

Act, MARAD is authorized to waive the application of paragraph

(b)(2)(ii) of this section if MARAD, in consultation with the Secretary

of Defense, determines that the waiver is in the national interest.

(iv) Intent to document U.S. Although the vessel may not be a U.S.-

documented vessel, it shall be considered an Eligible Vessel if the

vessel meets the criteria for documentation under 46 U.S.C. Chapter

121, the vessel owner has demonstrated an intent to have the vessel

documented under 46 U.S.C. Chapter 121, and the vessel will be less

than 10 years of age on the date of that documentation; and

(3) MARAD's determination. MARAD determines that the vessel is

necessary to maintain a United States presence in international

commercial shipping and the applicant possesses the ability,

experience, resources and other qualifications necessary to execute the

obligations of the MSP Operating Agreement, or MARAD, after

consultation with the Secretary of Defense, determines that the vessel

is militarily useful for meeting the sealift needs of the United

States.

Sec. 295.11 Applications.

(a) Action by MARAD. (1) Time Deadlines. Not later than 30 days

after the enactment of the Maritime Security Act of 1996, Pub. L. 104-

239, MARAD shall accept applications for Enrollment of vessels in the

MSP Fleet. Within 90 days after receipt of a completed application,

MARAD shall enter into a MSP Operating Agreement with the

[[Page 37739]]

applicant or provide in writing the reason for denial of that

application.

(2) Closure of Applications. Applications for MSP Operating

Agreements shall be made only at such time as, and in response to,

publication of invitations to apply by MARAD in the Federal Register.

After the Administrator has fully allocated authorized contracting

authority through the award of the maximum number of vessels allowed

under Sec. 295.30(a), MARAD will not accept any applications for award

of new Operating Agreements until additional contracting authority

becomes available, or existing contracting authority reverts back to

MARAD.

(3) Reflagging for Eligible vessels. Except as provided in

paragraph (a)(4) of this section, an applicant may remove a vessel from

U.S. registry without MARAD approval if an application for a MSP

Operating Agreement has been filed for that vessel, the applicant is

qualified, and it has been determined by MARAD to be eligible under MSA

section 651(b)(1) under a priority for which sufficient funds are

available and the Administrator has not awarded an Operating Agreement

for the vessel within 90 days of that application.

(4) Reflagging ODS and MSC chartered vessels. Vessels eligible

under MSA section 651(b)(1) which are also subject to ODS contracts or

on charter to MSC, and for which applications have been denied pursuant

to Sec. 295.11(a)(1) of this part, may be removed from U.S. registry

only after those agreements have expired and only after the age

requirement in section 9(e)(3) of the Shipping Act, 1916 (46 App.

U.S.C. 808) has been met.

(b) Action by the Applicant. Applicants for MSP Payments shall

submit information on the following:

(1) Intermodal network. A statement describing its operating and

transportation assets, including vessels, container stocks, trucks,

railcars, terminal facilities, and systems used to link such assets

together;

(2) Diversity of trading patterns. A list of countries and trade

routes serviced along with the types and volumes of cargo carried;

(3) Vessel construction date;

(4) Vessel type and size; and

(5) Military Utility. An assessment of the value of the vessel to

DOD sealift requirements.

(Approved by the Office of Management and Budget under Control Number

2133-0525)

Sec. 295.12 Priority for awarding agreements.

Subject to the availability of appropriations, MARAD shall enter

into individual MSP Operating Agreements for Eligible Vessels according

to the following priorities:

(a) First priority requirements. First priority shall be accorded

to any Eligible Vessel meeting the following requirements:

(1) U.S. citizen ownership. Vessels owned and operated by persons

who are Citizens of the United States as defined in Sec. 295.2; or

(2) Other corporations. Vessels less than 10 years of age and owned

and operated by a corporation that is:

(i) eligible to document a vessel under 46 U.S.C. Chapter 121; and

(ii) affiliated with a corporation operating or managing for the

Secretary of Defense other vessels documented under 46 U.S.C. Chapter

121, or chartering other vessels to the Secretary of Defense.

(3) Limitation on number of vessels. Limitation on the total number

of Eligible Vessels awarded under paragraph (a) of this section shall

be:

(i) For any U.S. citizen under paragraph (a)(1), the number of

vessels may not exceed the sum of:

(A) the number of U.S.-flag documented vessels that the Contractor

or a related party operated in the foreign commerce of the United

States on May 17, 1995, except mixed coastwise and foreign commerce;

and

(B) the number of U.S.-flag documented vessels the person chartered

to the Secretary of Defense on that date; and

(ii) For any corporation under paragraph (a)(2) of this section,

not more than five Eligible Vessels.

(4) Related party. For the purpose of this section a related party

with respect to a person shall be treated as the person.

(b) Second priority requirements. To the extent that appropriated

funds are available after applying the first priority in paragraph (a)

of this section, the MARAD shall enter into individual MSP Operating

Agreements for Eligible Vessels owned and operated by a person who is:

(1) U.S. citizen. A Citizen of the United States, as defined in

Sec. 295.2(g), that has not been awarded a MSP Operating Agreement

under the priority in paragraph (a) of this section, or

(2) Other. A person (individual or entity) eligible to document a

vessel under 46 U.S.C. Chapter 121, and affiliated with a person or

corporation operating or managing other U.S.-documented vessels for the

Secretary of Defense or chartering other vessels to the Secretary of

Defense.

(c) Third priority. To the extent that appropriated funds are

available after applying the first and second priority, any other

Eligible Vessel.

(d) Number of MSP Operating Agreements Awarded. If appropriated

funds are not sufficient to award agreements to all vessels within a

priority set forth herein, MARAD shall award to each eligible applicant

in that priority a number of Operating Agreements that bears

approximately the same ratio to the total number of Operating

Agreements requested under that priority, and for which timely

applications have been made, as the amount of appropriations available

for MSP Operating Agreements for Eligible Vessels in the priority bears

to the amount of appropriations necessary for MSP Operating Agreements

for all Eligible Vessels in the priority.

Subpart C--Maritime Security Program Operating Agreements

Sec. 295.20 General conditions.

(a) Approval. MARAD may approve applications to enter into a MSP

Operating Agreement and make MSP Payments with respect to vessels that

are determined to be necessary to maintain a United States presence in

international commercial shipping or those that are deemed, after

consultation with the Secretary of Defense, to be militarily useful for

meeting the sealift needs of the United States in national emergencies.

(b) Effective date. (1) General Rule. Unless otherwise provided in

the contract, the effective date of a MSP Operating Agreement is the

date when executed by the Contractor and MARAD.

(2) Exceptions. In the case of an Eligible Vessel to be included in

a MSP Operating Agreement that is subject to an ODS contract under

Subtitle A, Title VI, of the Act or on charter to the U.S. Government,

other than a charter under the provisions of an Emergency Preparedness

Program Agreement provided by Section 653 of the Act, unless an earlier

date is requested by the applicant, the effective date for a MSP

Operating Agreement shall be:

(i) The expiration or termination date of the ODS contract or

Government charter covering the vessel, respectively, or

(ii) Any earlier date on which the vessel is withdrawn from that

contract or charter.

(c) Replacement Vessels. MARAD may approve the replacement of an

Eligible Vessel in a MSP Operating Agreement provided the replacement

vessel is eligible under Sec. 295.10.

(d) Notice to shipbuilders. The Contractor agrees that no later

than 30

[[Page 37740]]

days after soliciting any offer or bid for the construction of any

vessel in a foreign shipyard, and before entering into any contract for

construction of a vessel in a foreign shipyard, the Contractor shall

provide notice of its intent to enter into such a contract (for vessels

being considered for U.S.-flag registry) to MARAD. Within 10 business

days after the receipt of such notification, MARAD shall issue a notice

in the Federal Register of the Contractor's intent. The Contractor is

prohibited from entering into any such contract until 10 business days

after the date of publication of such notice.

(e) Early termination. A MSP Operating Agreement shall terminate on

a date specified by the Contractor if the Contractor notifies MARAD not

later than 60 days before the effective date of the proposed

termination, that the Contractor intends to terminate the Agreement.

The Contractor shall be bound by the provisions relating to vessel

documentation and national security commitments to the extent and for

the period contained in section 652(m) of the Act.

(f) Non-renewal for lack of funds. If, by the first day of a fiscal

year, insufficient funds have been appropriated under Section 655 of

the Act for that fiscal year, MARAD shall notify the Congress that MSP

Operating Agreements for which insufficient funds are available will be

terminated on the 60th day of that fiscal year if sufficient funds are

not appropriated or otherwise made available by that date. If only

partial funding is appropriated by the 60th day of such fiscal year,

then MSP Operating Agreements for which funds are not available shall

be terminated using the pro rata distribution method used to award MSP

Operating Agreements set forth in Sec. 295.12(d). With respect to each

terminated agreement the Contractor shall be released from any further

obligation under the agreement, and the Contractor may transfer and

register the applicable vessel under a foreign registry deemed

acceptable by MARAD. In the event that no funds are appropriated, then

all MSP Operating Agreements shall be terminated and each Contractor

shall be released from its obligations under the agreement. Final

payments under the terminated agreements shall be made in accordance

with Sec. 295.30. To the extent that funds are appropriated in a

subsequent fiscal year, existing operating agreements may be renewed if

mutually acceptable to the Administrator and the Contractor and the MSP

vessel remains eligible.

(g) Operation under a Continuing Resolution. In the event a

Continuing Resolution (CR) is in place that does not provide sufficient

appropriations to fully meet obligations under MSP Operating

Agreements, a Contractor may request termination of the agreement in

accordance with paragraph (f), herein, and Sec. 295.30.

(h) Requisition authority. To the extent section 902 of the Act is

applicable to any vessel transferred foreign under this section, the

vessel shall remain available to be requisitioned by the Maritime

Administration under that provision of law.

(i) Transfer of Operating Agreements. A Contractor subject to an

Agreement may transfer that Agreement (including all rights and

obligations thereunder) to any person eligible to enter into an

Agreement under the same priority established in section 652(i)(1)(A)

of the Act as the Contractor, provided that:

(1) The Contractor gives notice of any such transfer to the

Maritime Administrator by filing a completed application;

(2) The transfer is not disapproved in writing by the Maritime

Administrator within 90 days of the notification; and

(3) the vessel to be covered by the Agreement after transfer is the

same vessel originally covered by the Agreement or is an eligible

vessel under section 651(b) of the Act and is the same type, and

comparable to, the vessel originally covered by the Agreement.

Sec. 295.21 MSP Assistance Conditions.

(a) Term of MSP Operating Agreement. MSP Operating Agreements shall

be effective for a period of not more than one fiscal year, and unless

otherwise specified in the Agreement, shall be renewable, subject to

the availability of appropriations or amounts otherwise made available,

for each subsequent fiscal year through the end of FY 2005. In the

event appropriations are enacted after October 1 with respect to any

subsequent fiscal year, October 1 shall be considered the effective

date of the renewed agreement, provided sufficient funds are made

available and subject to the Contractor's rights for early termination

pursuant to section 652(m) of the Act.

(b) Terms under a Continuing Resolution (CR). In the event funds

are available under a CR, the terms and conditions of the MSP Operating

Agreements shall be in force provided sufficient funds are available to

fully meet obligations under MSP Operating Agreements, and only for the

period stipulated in the applicable CR. If funds are not appropriated

at sufficient levels for any portion of a fiscal year, the terms and

conditions of any applicable MSP Operating Agreement may be voided and

the Contractor may request termination of the MSP Operating Agreement

in accordance with Sec. 295.20(f).

(c) National security requirements. Each MSP Operating Agreement

shall require the owner or operator of an Eligible Vessel included in

that agreement to enter into an Emergency Preparedness Program

Agreement pursuant to Section 653 of the Act.

(d) Vessel operating requirements. The MSP Operating Agreement

shall require that during the period an Eligible Vessel is included in

that Agreement, the Eligible Vessel shall:

(1) Documentation. Be documented as a U.S.-flag vessel under 46

U.S.C. Chapter 121; and

(2) Operation. Be operated exclusively in the U.S.-foreign trade or

in mixed foreign and domestic trade allowed under a registry

endorsement issued under 46 U.S.C. 12105, and shall not otherwise be

operated in the coastwise trade of the United States.

(e) Limitations. Limitations on Contractors with respect to the

operation of foreign-flag vessels shall be in accordance with section

804 of the Act, as amended. The operation of vessels, other than

Agreement Vessels, in the noncontiguous trades shall be limited in

accordance with service levels and conditions permitted in section 656

of the Act.

(f) Non-Contiguous Domestic Trade. [Reserved]

(g) Obligation of the U.S. Government. The amounts payable as MSP

Payments under a MSP Operating Agreement shall constitute a contractual

obligation of the United States Government to the extent of available

appropriations.

Sec. 295.22 Commencement and termination of operations.

(a) Time frames. A Contractor that has been awarded a MSP Operating

Agreement shall commence operations of the Eligible Vessel, under the

applicable agreement or a subsequently renewed agreement, within the

time frame specified as follows:

(1) Existing vessel. Within one year after the initial effective

date of the MSP Operating Agreement in the case of a vessel in

existence on that date and after notification to MARAD within 30 days

of the Contractor's intent; or

(2) New building. Within 30 months after the initial effective date

of the MSP Operating Agreement in the case of a vessel to be

constructed after that date.

(b) Unused authority. In the event of a termination of unused

authority pursuant to paragraph (a) of this section, such authority

shall revert to MARAD.

[[Page 37741]]

Sec. 295.23 Reporting requirements.

The Contractor shall submit to the Director, Office of Financial

Approvals, Maritime Administration, 400 Seventh St., SW., Washington,

DC 20590, one of the following reports, including management footnotes

where necessary to make a fair financial presentation:

(a) Form MA-172. Not later than 120 days after the close of the

Contractor's semiannual accounting period, a Form MA-172 on a

semiannual basis, in accordance with 46 CFR 232.6; or

(b) Financial Statement. Not later than 120 days after the close of

the Contractor's annual accounting period, an audited annual financial

statement in accordance with 46 CFR 232.6 and the most recent vessel

operating cost data submitted as part of its Emergency Preparedness

Agreement.

(Approved by the Office of Management and Budget under Control Number

2133-0525.)

Subpart D--Payment and Billing Procedures

Sec. 295.30 Payment.

(a) Amount payable. A MSP Operating Agreement shall provide,

subject to the availability of appropriations and to the extent the

agreement is in effect, for each Agreement Vessel, an annual payment of

$2,100,000 for each fiscal year. This amount shall be paid in equal

monthly installments at the end of each month. The annual amount

payable shall not be reduced except as provided in paragraph (b) of

this section and Sec. 295.31(a)(3).

(b) Reductions in amount payable. (1) The annual amount otherwise

payable under a MSP Operating Agreement shall be reduced on a pro rata

basis for each day less than 320 in a fiscal year that an Agreement

Vessel is not operated exclusively in the U.S.-foreign trade or in

mixed foreign and domestic trade allowed under a registry endorsement

issued under 46 U.S.C. 12105. Days during which the vessel is drydocked

or undergoing survey, inspection, or repair shall be considered to be

days during which the vessel is operated, provided the total of such

days within a fiscal year does not exceed 30 days, unless prior to the

expiration of a vessel's 30 day period, approval is obtained from MARAD

for an extension of the 30 day provision.

(2) There shall be no payment for any day that a MSP Agreement

Vessel is engaged in transporting more than 7,500 tons (using the U.S.

English standard of short tons, which converts to 6,696.75 long tons,

or 6,803.85 metric tons) of civilian bulk preference cargoes pursuant

to section 901(a), 901(b), or 901b of the Act, provided that it is bulk

cargo.

Sec. 295.31 Criteria for payment

(a) Submission of voucher. For contractors operating under more

than one MSP Operating Agreement, the contractor may submit a single

monthly voucher applicable to all its agreements. Each voucher

submission shall include a certification that the vessel(s) for which

payment is requested were operated in accordance with Sec. 295.21(d)

and applicable MSP Operating Agreements with MARAD, and consideration

shall be given to reductions in amounts payable as set forth in

Sec. 295.30. All submissions shall be forwarded to the Director, Office

of Accounting, MAR-330 Room 7325, Maritime Administration, 400 Seventh

Street, SW., Washington, DC 20590. Payments shall be paid and processed

under the terms and conditions of the Prompt Payment Act, 31 U.S.C.

3901.

(1) Payments shall be made per vessel, in equal monthly

installments, of $175,000.

(2) To the extent that reductions under Sec. 295.30(b) are known,

such reductions shall be applied at the time of the current billing.

The daily reduction amounts shall be based on the annual amounts in

295.30(a) of this part divided by 365 days (366 days in leap years) and

rounded to the nearest cent. Daily reduction amounts shall be applied

as follows:

FY 1997--$5,753.42

FY 1998--$5,753.42

FY 1999--$5,753.42

FY 2000--$5,737.70

FY 2001--$5,753.42

FY 2002--$5,753.42

FY 2003--$5,753.42

FY 2004--$5,737.70

FY 2005--$5,753.42

(3) In the event a monthly payment is for a period less than a

complete month, that month's payment shall be calculated by multiplying

the appropriate daily rate in Sec. 295.31(a)(2) by the actual number of

days the Eligible Vessel operated in accordance with Sec. 295.21.

(4) MARAD may require, for good cause, that a portion of the funds

payable under this section be withheld if the provisions of

Sec. 295.21(d) have not been met.

(5) Amounts owed to MARAD for reductions applicable to a prior

billing period shall be electronically transferred using MARAD's

prescribed format, or a check may be forwarded to the Maritime

Administration, P.O. Box 845133, Dallas, Texas 75284-5133, or the

amount owed can be credited to MARAD by offsetting amounts payable in

future billing periods.

(b) [Reserved]

Subpart E--Appeals Procedures

Sec. 295.40 Administrative determinations.

(a) Policy. A Contractor who disagrees with the findings,

interpretations or decisions of the Contracting Officer with respect to

the administration of this part may submit an appeal to the Maritime

Administrator. Such appeals shall be made in writing to the Maritime

Administrator, within 60 days following the date of the document

notifying the Contractor of the administrative determination of the

Contracting Officer. Such an appeal should be addressed to the Maritime

Administrator, Att.: MSP Contract Appeals, Maritime Administration, 400

Seventh St., S.W. Washington, D.C. 20590.

(b) Process. The Maritime Administrator may require the person

making the request to furnish additional information, or proof of

factual allegations, and may order any proceeding appropriate in the

circumstances. The decision of the Maritime Administrator shall be

final.

By order of the Maritime Administrator.

Dated: July 10, 1997.

Joel C. Richard,

Secretary, Maritime Administration.

[FR Doc. 97-18559 Filed 7-14-97; 8:45 am]

BILLING CODE 4910-81-P