Alternate Compliance via Recognized Classification Society and U.S. Supplement to Rules

SUMMARY: The Coast Guard is issuing regulations to provide owners of

U.S. tank vessels, passenger vessels, cargo vessels, miscellaneous

vessels and mobile offshore drilling units an alternative method to

fulfill the requirements for vessel design, inspection and

certification. Under this final rule, the Coast Guard can issue a

certificate of inspection based upon reports by a recognized,

authorized classification society that the vessel complies with the

International Convention for the Safety of Life at Sea (SOLAS), 1974,

as amended, the International Convention for the Prevention of

Pollution from Ships, 1973, as modified by the Protocol of 1978

relating thereto (MARPOL 73/78), other applicable international

conventions, classification society rules and other specified

requirements. This new procedure will reduce the burden on vessel

owners and operators by establishing an alternative to the current

Coast Guard inspection system that results in plan reviews and

inspections by the vessel's classification society as well as by the

Coast Guard.

DATES: This final rule is effective January 23, 1998. Section 8.440

applied to existing vessels as of July 31, 1997. The incorporation by

reference of certain publications listed in the rule is approved by the

Director of the Federal Register on January 23, 1998.

ADDRESSES: Documents as indicated in this preamble are available for

inspection or copying at the office of the Executive Secretary, Marine

Safety Council (G-LRA/3406), U.S. Coast Guard Headquarters, 2100 Second

Street SW., room 3406, Washington, DC 20593-0001, between 9:30 a.m. and

2 p.m., Monday through Friday, except Federal holidays. The telephone

number is 202-267-1477.

FOR FURTHER INFORMATION CONTACT: LCDR Daniel Pippenger, Marine Safety

and Environmental Protection (G-MSE-1), telephone (202) 267-2997, fax

(202) 267-4816.

SUPPLEMENTARY INFORMATION:

Regulatory History

On December 27, 1996, the Coast Guard published an interim rule

entitled ``Vessel Inspection Alternatives; Classification Procedures''

in the Federal Register (61 FR 68510). The Coast Guard received 17

letters commenting on the interim rule. No public hearing was

requested, and none was held.

Background and Purpose

On October 4, 1994, the Coast Guard published a notice of proposed

rulemaking (NPRM) entitled ``Alternate Inspection Compliance Programs

for the U.S. Maritime Industry'' in the Federal Register (59 FR 50537).

In the comments submitted in response to this NPRM, members of the U.S.

maritime industry noted the continuing economic pressure on the U.S.

oceangoing merchant fleet and commercial shipbuilding industry.

Additional comments were submitted calling for reduction of the cost

disadvantage attributed to Coast Guard inspection and certification of

U.S. merchant vessels in order to improve the international

competitiveness of the U.S. merchant fleet.

In order to address these concerns, the Coast Guard sought a means

to alleviate the cost burdens on the maritime industry that resulted

from the Coast Guard inspection program. The Coast Guard has had

authority under 46 U.S.C. Sec. 3116 to rely on reports, documents and

certificates issued by the American Bureau of Shipping (ABS) in

carrying out its responsibilities for safety of U.S. merchant vessels

and to delegate to ABS the inspection or examination of these vessels.

The Coast Guard had in fact delegated to ABS the authority to issue

certain certificates required by international conventions, such as the

International Convention for the Safety of Life at Sea (SOLAS) Cargo

Ship Safety Construction Certificate. Compliance with these standards

is required for oceangoing vessels, i.e. vessels trading in foreign

countries. Additionally, insurance companies require that, before a

vessel is insured, it be classed. This means that a classification

society must survey a vessel for compliance with its class rules. Class

rules are rules developed by the particular classification society to

cover the design, construction and maintenance of vessels. To ensure

compliance with these class rules and with international standards,

classification societies perform surveys on vessels using qualified

marine surveyors. Many of the items examined by the classification

society surveyors are the same as those examined by Coast Guard marine

inspectors in their inspections for certification.

Thus, there is duplication of effort between the Coast Guard and

the ABS involving safety of vessels that results in extra costs to U.S.

vessel owners. In light of the authority in 46 U.S.C. 3316 to delegate

vessel inspections and examinations to ABS, the Coast Guard, in order

to address the concerns of the vessel owners regarding these costs,

examined the feasibility of an alternative to the current situation

that would avoid the duplication of inspections between ABS and the

Coast Guard. A joint Coast Guard/ABS task force compared the Coast

Guard requirements in the Code of Federal Regulations (CFR) to the

class requirements in ABS class rules, SOLAS, and the International

Convention for the Prevention of Pollution from Ships, as amended,

(MARPOL 73/78) concerning the design, construction and safety systems

for oceangoing merchant vessels. The purpose of this comparison was to

identify redundancies between the requirements and to determine if the

class and international requirements, which U.S. vessels must currently

comply with, could be used in place of Coast Guard regulatory

requirements. The standard used was whether compliance with the class

and international standards would achieve a level of safety equivalent

to compliance with Coast Guard regulatory requirements.

The task force determined that many Coast Guard regulatory

requirements could be satisfied by certification of compliance with ABS

classification rules, SOLAS, MARPOL 73/78, or combination of the three.

This led to the development of a U.S. Supplement to the ABS

classification rules. This supplement addresses those areas where

current Coast Guard requirements are not embodied by either ABS

classification rules or international conventions.

The Coast Guard concluded that the design requirements and survey

provisions of ABS classification rules, applicable international

conventions and the U.S. Supplement to the ABS classification rules

provide a level of safety equivalent to corresponding Federal

regulations.

As a result of this effort, the Alternate Compliance Program (ACP)

was developed to reduce redundant inspection efforts without

jeopardizing safety. The Coast Guard expects that,

[[Page 67527]]

under the ACP, vessel owners and operators will have reduced vessel

down time, greater flexibility in scheduling inspections, and greater

flexibility in meeting required standards.

The Coast Guard conducted an ACP pilot program, which was announced

by the Federal Register notice of February 3, 1995 (60 FR 6687). Its

purpose was to test and evaluate the standards and procedures developed

for the ACP. Sixty-two ships were enrolled in the pilot program which

ended on July 31, 1997. The ACP was implemented on that date under the

regulations described in the following paragraphs.

On June 22, 1995, the Coast Guard published a NPRM entitled

``Alternate Compliance via Recognized Classification Society and U.S.

Supplement to Rules'' in the Federal Register (60 FR 32478). The NPRM

proposed regulatory changes to allow owners, operators, shipbuilders,

and designers of U.S. flagged tank vessels, passenger vessels, cargo

vessels, miscellaneous vessels and mobile offshore drilling units to

use the services of a recognized classification society to conduct

inspection and plan review functions now performed by the Coast Guard.

The NPRM proposed establishment of the ACP through addition of new

sections in 46 CFR parts 31 (31.01-3), 71 (71.15-5), 91 (91.15-5), and

107 (107.205). These sections would allow the owner or operator of a

vessel to submit the vessel for inspection by a recognized

classification society. The classification society would survey the

vessel and document compliance with applicable international

requirements, class rules and its U.S. supplement. The cognizant Coast

Guard Officer-in-Charge, Marine Inspection, could then issue a

certificate of inspection based upon the classification society's

reports documenting that the vessel is classed and that it complies

with all applicable requirements.

On December 27, 1996, the Coast Guard published an interim rule

entitled ``Vessel Inspection Alternatives; Classification Procedures''

in the Federal Register (61 FR 68510). This rulemaking with the

addition of other 46 CFR sections not included in the NPRM, implemented

the ACP program.

Discussion of Comments and Changes

In a continuous effort to refine the ACP, several minor technical

changes are needed to facilitate clear application of this rule.

The Coast Guard amended the text of 46 CFR 8.450 to clarify the

status of international certificates issued by a classification society

whose authority to participate in the ACP is terminated. If a

classification society is no longer eligible to participate in the ACP,

the certificates issued by that society would remain valid subject to

any termination of authorization to issue those certificates on behalf

of the Coast Guard as detailed in Sec. 8.330. Also, the Coast Guard

will notify a vessel owner of the time frame required for such action.

Because of the many variables involved in the possible termination of

authority of a classification society to participate in the ACP, such

as the reason for termination or the number of ships involved, it is

not reasonable to set a specific time limit for accomplishment of the

required action.

The current regulatory text regarding four of the certificates

listed in Sec. 8.320 (International Certificate of Fitness for the

Carriage of Dangerous Chemicals in Bulk; International Certificate of

Fitness for the Carriage of Liquefied Gases in Bulk; MARPOL 73/78

International Oil Pollution Prevention Certificate; and MARPOL 73/78

International Oil Pollution Prevention Certificate for the Carriage of

Noxious Liquid Substances in Bulk) allows only the Coast Guard to issue

these certificates to U.S. flag vessels. The intent of this rulemaking

is to allow certain classification societies to issue these

certificates on behalf of the U.S. as well. Therefore, modification to

33 CFR part 151, 46 CFR part 153 and 154 are necessary.

In Sec. 8.100, the definition of ``MARPOL 73/78'' was changed to be

consistent with the definition in 33 U.S.C. 1901.

As the ACP has been implemented, the Coast Guard has recognized

that additional references to rules and approved supplements are

necessary. Because a supplement is approved related to a specific year

of classification society rules and international conventions, it is

appropriate to update and approve the supplement each time a new set of

classification society rules are approved. Therefore, each year, the

Coast Guard anticipates approving and incorporating a set of

classification society rules and a companion supplement. To facilitate

this process, the Coast Guard eliminated the direct listing of approved

classification society rules and supplements in the applicable 46 CFR

parts (31, 71, 91, and 107) and modified the language of those sections

to refer the user to one section for a list of incorporated

classification society rules and supplements in Sec. 8.110(b).

In Sec. 8.320, the list of certificates requires correction. The

``SOLAS Certificate of Fitness for the Carriage of Dangerous Chemicals

in Bulk'' and the ``SOLAS Certificate of Fitness for the Carriage of

Liquefied Gases in Bulk'' are correctly titled the ``International

Certificate of Fitness for the Carriage of Dangerous Chemicals in

Bulk'' and the ``International Certificate of Fitness for the Carriage

of Liquefied Gases in Bulk''.

Participation of a vessel in the ACP is contingent upon several

items in Sec. 8.410. One requirement is that the vessel be ``classed''

by a recognized classification society that is authorized to

participate in the ACP. To clearly convey the Coast Guard's

understanding of what it means for a vessel to be ``classed,'' the

Coast Guard added a definition of the term to Sec. 8.100.

The applicability in Sec. 8.410 specified that the ACP applies to

all U.S. flag vessels that meet certain requirements. However, the ACP

is currently open to U.S. flag tank vessels, passenger vessels, cargo

vessels, miscellaneous vessels, and mobile offshore drilling units

(MODUs). To accurately reflect these limitations, Sec. 8.410 will refer

each vessel type to the appropriate subchapter of 46 CFR containing the

authorization to use the ACP in place of other requirements.

46 CFR subchapter G, Sec. 69.27(b) requires an organization to be a

full member of the International Association of Classification

Societies (IACS) and incorporated under the laws of the United States,

a State of the United States, or the District of Columbia to be

eligible for delegated tonnage measurement authority. There is no

statutory requirement for these criteria and they are inconsistent with

the intent of the ACP rulemaking, which is to allow classification

societies, regardless of home country, meeting the standards in part 8,

to be recognized and delegated authority to perform services on behalf

of the Coast Guard. Therefore, the final rule modifies this section so

the ACP can function as intended.

The Coast Guard received a total of 17 letters that commented on

the ACP interim rule. All letters expressed support for the program.

One comment specifically mentioned the reduced cost and increased

options the ACP will give the maritime industry. Some letters contained

suggestions for improvement in areas that may need adjustment. The

following discussion addresses these comments.

Ten comments addressed issues relating to reciprocity. One comment

noted that not all classification societies can ``certify'' in their

own home country. These comments recommended modification of acceptance

to include recognition when authorization to ABS is equal to that

allowed by the country of origin. The Coast Guard will delegate

[[Page 67528]]

the authority to issue listed certificates when all of the conditions

for reciprocity, recognition, and authorization are met. This approach

is consistent with the language in the Coast Guard Authorization Act of

1996 (Pub. L. 140-324), and will result in the most efficient

delegation program. To allow the appropriate flexibility needed for

successful application of the ACP program, the Coast Guard will modify

Sec. 8.120(a). The Coast Guard will grant authorization to a foreign

classification society to issue international certificates on a ``case-

by-case'' basis. Some of the factors that the Coast Guard may consider

in granting authorization are:

Whether the foreign classification society has a

satisfactory port state control history;

Whether the foreign classification society has met the

criteria contained in 46 CFR 8.230;

Whether the foreign classification society developed a

U.S. supplement to its class rules for use in the ACP that is in

accordance with 46 CFR 8.430, as appropriate; and whether the home

government of the foreign classification society has provided, or will

simultaneously provide, ABS sufficient access to inspect, certify and

provide related services to vessels documented in that country.

One of the comments suggested that the Coast Guard establish an

annual review of reciprocity provisions. An annual review of

reciprocity is unnecessary. In the event that the American Bureau of

Shipping undergoes any changes in their foreign government

authorizations, it is reasonable to expect that the Coast Guard will be

notified by the American Bureau of Shipping of any such changes, at

which time the Coast Guard will review the applicable reciprocity

provisions for appropriate resolution.

Two comments recommended the removal of the 2-year trial period

prior to being eligible to participate in the ACP as required in

Sec. 8.420. The Coast Guard does not agree. The ACP is a very

comprehensive program that covers issues not addressed by international

convention requirements. In the ACP, participating vessels have limited

involvement with the Coast Guard and the Certificate of Inspection

(COI) is based largely on classification society reports. The Coast

Guard has limited experience with foreign classification societies.

Therefore, it is prudent to maintain this 2-year trial period in order

to gain experience with foreign classification societies, their rules,

surveyors, and procedures. Additionally, the 2-year period will allow

the Coast Guard to assess the capability and performance of the

classification society to ensure they are adequate to perform the

extensive delegations granted under the ACP. The Coast Guard is making

no change to this requirement.

One comment requested that the Safety Certificate for High Speed

Craft be added to the functions that may be delegated in Sec. 8.320.

The Coast Guard does not agree. The High Speed Craft Code is new and

has had very limited application in the U.S. Until further experience

and familiarity are gained with the High Speed Craft Code for U.S. flag

vessels, the Coast Guard does not plan to delegate this function.

One comment suggested adding the SOLAS Passenger Vessel Safety

Certificate to those listed in Sec. 8.320. Passenger vessels may

qualify for participation in the ACP. However, the Coast Guard intends

to maintain first hand involvement in the issuance of this certificate

due to the degree of risk involved. The Coast Guard will retain

authority for issuance of the SOLAS Passenger Vessel Safety

Certificate.

One comment was from the United States Environmental Protection

Agency (EPA). The EPA expressed concern about authorizing a

classification society to issue the International Air Pollution

Prevention (IAPP) and the Engine International Air Pollution Prevention

(EIAPP) certificates under MARPOL Annex VI. Section 8.320 does not

permit delegation of these certificates to a classification society. No

change is made in response to this comment.

One comment addressed the definition of the term ``gross tons'' in

Sec. 8.100. The comment stated that the terms ``method used by flag

state administration'' are confusing and unnecessary since subpart A is

limited to U.S. flag vessels. The Coast Guard does not concur. This

terminology is necessary because classed tonnage is an element of the

minimum standards for a recognized classification society in

Sec. 8.230. The Coast Guard intends to allow class societies to count

all vessel tonnage they class, regardless of the flag administration.

Because not all administrations apply the International Convention on

Tonnage Measurement of Ships, 1969, to all measured vessels, this

clause is necessary.

One comment questioned the use of the American National Standards

Institute (ANSI) standard ANSI/ASQC Q9001 in place of the international

standard ISO 9001. The Coast Guard agrees that the international

standard is also acceptable. As stated in the rule, a classification

society may meet the requirements of the ANSI/ASQC Q9001 or an

equivalent quality standard. Therefore, the Coast Guard makes no change

in response to this comment.

Five comments recommended changes to the applicability of the ACP.

These comments noted that the ACP should not be restricted only to

vessels engaged on international voyages but should be open to all

vessels that meet international requirements regardless of their ports

of call. The term international voyages was used in Sec. 8.410 to

ensure that vessels in the ACP carried all applicable international

certificates and was not intended to restrict ACP to only those vessels

that engage on international voyages. The Coast Guard will modify the

wording of Sec. 8.410(b). Instead of the phrase ``engaged in

international voyages'', the Coast Guard will use the term

``certificated for international voyages''. This clearly expresses the

intent that a vessel participating in the ACP will have a valid set of

all certificates necessary to engage in an international voyage.

The ACP is solidly based on the safety system comprised of the

following elements: Compliance with all relevant international

requirements, classification society rules, and the relevant U.S.

supplement. This safety system is being accepted in the ACP as an

equivalent to the system embodied in Title 46 of the CFR. Thus, U.S.

flagged vessels that do not carry valid and appropriate certificates

necessary to engage in international voyages, regardless of class, are

not eligible to participate in the ACP.

Two comments related to the use of exclusive surveyors for all work

done on behalf of the Coast Guard. One comment requested the use of

exclusive surveyors for all ACP work. With the exception of tonnage

measurement, the Coast Guard agrees and notes that this is already

required under Sec. 8.130(a)(25). Restricting tonnage measurement to

exclusive surveyors is contrary to current practice and would reduce

flexibility and probably result in higher cost to the public. Section

8.130(a)(25) has been modified to allow the use of part-time employees

or independent contractors to provide tonnage measurement services.

The other comment requested the use of one classification society's

exclusive surveyors by other classification societies if the two

societies involved have a bilateral agreement. The Coast Guard does not

agree. When authorizing a classification society to do work related to

the ACP, the Coast Guard accepts a classification society's rules,

survey procedures and processes as an acceptable alternative to federal

[[Page 67529]]

regulations. A classification society's own exclusive surveyors are in

the best position to accurately enforce these items. Given the scope of

delegation and the minimal Coast Guard presence on ACP vessels, the

Coast Guard makes no change in response to this comment. However, based

on these comments, the Coast Guard has added a definition of

``exclusive surveyor'' to Sec. 8.100 for clarification.

One comment recommended a specific classification society not be

allowed to participate in the ACP. The Coast Guard appreciates the

intent of the individual to improve the program. All applications for

recognition and authorization are carefully reviewed in accordance with

part 8. Any classification society meeting these requirements may enter

the program. The Coast Guard has made no change in response to this

comment.

One comment recommended that authority to issue certificates be

revoked if reciprocity conditions were no longer being satisfied.

Reciprocity is required by U.S. law in the Coast Guard Authorization

Act of 1996 (Pub. L. 104-324, 110 Stat. 3901). The Coast Guard agrees

and has modified Secs. 8.330 and 8.450 accordingly.

One comment contained recommendations on document availability. It

requested all documents to be maintained in a public docket. The Coast

Guard disagrees. Some information submitted during the application for

recognition of a classification society is clearly proprietary and

therefore inappropriate for release. Information regarding recognition

and authorization status will be available in accordance with the

Freedom of Information Act. The Coast Guard is making no change in

response to this comment.

One comment on Sec. 8.320(a)(7) recommended the removal of the term

``SOLAS'' from the ``SOLAS Mobile Offshore Drilling Unit Safety

Certificate.'' The Coast Guard agrees and will correct this certificate

title to ``International Maritime Organization (IMO) Mobile Offshore

Drilling Unit Safety Certificate.''

One comment stated that load line and tonnage admeasurement should

be harmonized to require reciprocity with the delegations under ACP.

The Coast Guard does not agree. Delegation of these functions is

permitted under 46 U.S.C. 5107 and 46 U.S.C. 14103, respectively, and

reciprocity is not an element of the conditions of delegation. The

Coast Guard is making no change in response to this comment.

One comment stated that a recognized classification society should

have the right to refuse to conduct services. The Coast Guard agrees.

However, the interim rule does not restrict the classification society

actions in this regard. In consideration of this comment, the Coast

Guard modified the text in Sec. 8.130(a)(10) to recognize that a

classification society may have occasion to refuse to attend a vessel

for which it has performed a delegated function on behalf of the Coast

Guard, when requested by the Coast Guard.

One comment requested that documents be ``in a language which is

mutually acceptable to both parties.'' The Coast Guard does not agree.

The Coast Guard requires documents related to delegated functions to be

in English. There is no change to Sec. 8.130(a)(18) or Sec. 8.230(a)(7)

and (8) in response to this comment.

One comment suggests that the Coast Guard accept oversight

monitoring by other administrations. The Coast Guard agrees that

oversight and monitoring activities conducted by other administrations

may be useful to the delegated functions of the ACP. The Coast Guard

does not agree that any added text to Sec. 8.130(a)(22) is warranted.

The intent of this agreement condition is to ensure that an authorized

classification society will allow the Coast Guard the necessary access

to perform its own oversight activities. This agreement condition does

not prohibit other means of attaining information as part of the Coast

Guard's oversight activities.

One comment stated that reciprocity was intended to solidify ABS

market shares and not to advance marine safety. The Coast Guard

disagrees. Reciprocity is included because it is required under the

Coast Guard Authorization Act of 1996 (Pub. L. 104-324). This provision

may increase the choices available to the marine industry and result in

lower costs. The Coast Guard makes no change in response to this

comment.

One comment requested amendment to Sec. 8.410(b) to further expand

ACP applicability to foreign flag MODUs required to obtain a letter of

compliance under 33 CFR subchapter N. The Coast Guard does not agree.

The ACP is available for U.S. flag vessels as an alternative to

compliance with U.S. regulations. The Coast Guard reiterates that the

safety system of class rules, international conventions, and the

supplement to class rules is considered as an alternative to U.S.

regulations. Foreign flag vessels are not subject to U.S. vessel

standards and therefore, are not considered in this program. There is

no change in response to this comment.

One comment welcomed the ACP because COIs can be issued by foreign

class societies. The Coast Guard agrees that the ACP allows foreign

classification societies to apply for recognition and authorization to

perform delegated functions under part 8. However, the Coast Guard

retains the authority to issue COIs.

One comment recommended a change in the term ``serviced'' in

Sec. 8.230(a)(17). The Coast Guard agrees and has clarified the

language. The change will ensure that vessels on which a delegated

function has been performed comply with all statutory requirements

related to the delegation functions.

Three comments encouraged user fee reduction. The Coast Guard

agrees that participation in ACP may result in lower fees. However, the

purpose of this rulemaking is not to make changes to user fees. There

are no changes made to this rule in response to this comment.

Two comments concerned supplements. One pointed out the necessity

of the supplement. The other encouraged that the supplement be

simplified and used to lead to harmonization with industry standards.

The Coast Guard agrees with the spirit of these comments. In general, a

supplement for the ACP contains cites from four sources:

Statutory Requirements,

SOLAS Interpretations,

Critical safety issues where the combination of

classification society rules and international conventions do not

provide an equivalent level of safety to the CFR, or

Other requirements that apply to all ships (primarily

navigation safety and pollution prevention).

Because all classification society rules are not identical in

scope, the supplement is needed. The Coast Guard is actively pursuing

harmonized international interpretations to SOLAS. Where the

combination of classification society rules and international

conventions do not provide an equivalent level of safety, the Coast

Guard intends to pursue these items individually with the

classification society or through amendment of the international

convention as appropriate. Ideally, these Coast Guard efforts may

result in an equivalent level of safety and remove the need for

additions to classification society rules. In addition, the Coast Guard

has pursued harmonization with industry standards and will continue to

seek additional opportunities to do so. There are no changes as a

result of these comments.

One comment encouraged the Coast Guard to accept foreign class

standards without rigid adherence to U.S. regulations. The Coast Guard

agrees that an individual regulation, considered in

[[Page 67530]]

isolation, may not always be the best or most suitable standard for a

particular vessel. However, the Coast Guard considers the Code of

Federal Regulations (CFR) to represent a comprehensive set of standards

for commercial vessel safety. The Coast Guard has worked extensively

with the U.S. maritime industry in the application of standards other

than those specifically prescribed in the CFR, and has allowed use of

equivalent standards in many cases. The Coast Guard will ensure that a

double standard does not develop between vessels that participate in

ACP and those that do not. ACP standards will remain equivalent in

scope and result in no reduction in safety. There is no change made as

a result of this comment.

Two comments addressed reporting requirements for port-state

control violations. One comment recommended a change in the term

``ensure'' in Sec. 8.230 paragraphs (a)(16) and (a)(17). The comment

contends that no classification society has the power to ensure

compliance. Compliance is dependent on factors outside of the control

of the classification societies. The Coast Guard agrees and will modify

the text to more accurately reflect this condition.

One comment recommended that Oil Spill Recovery Vessels (OSRVs) be

included in ACP with appropriate modification to corresponding

regulations for this vessel type. The absence of specific regulations

for OSRVs precludes their inclusion in the ACP at this time. The Coast

Guard will consider participation of OSRVs after determining what

regulations apply to them.

One comment encouraged classification society fee restraints for

vessels participating in the ACP. While the intent of this rulemaking

is to reduce the cost associated with dual inspection, the Coast Guard

will not be involved with the establishment of classification society

fees for services related to the ACP program. The ACP is a voluntary

program and traditional Coast Guard inspection remains available to

U.S. flag vessels that require Coast Guard certification.

One comment expressed concern about the ACP being used to bring

more vessels under ABS class. The Coast Guard disagrees. Initially, the

ACP was developed with ABS based on the extensive experience that the

Coast Guard has with delegation of certification functions to ABS.

Until the passage of the Coast Guard Authorization Act of 1996 (Pub. L.

104-324), delegation of this nature was restricted by law to U.S.

classification societies. The ACP is now available to foreign based

classification societies as well. There is no change made as a result

of this comment.

One comment questioned how appeals will be handled. There are two

different levels of appeals. In the first level, a vessel owner,

operator, or builder may desire to appeal the decision of an ACP

authorized classification society or the Coast Guard. This procedure is

defined in Coast Guard policy guidance and is published as Navigation

and Vessel Inspection Circular (NVIC) No. 2-95, Change 1. On another

level, a classification society may wish to appeal the decision of the

Coast Guard with respect to its application for recognition. There was

no appeal provision in the Interim Rule for this condition. In response

to this comment, the Coast Guard has added a provision for a

classification society to appeal the decision of the Coast Guard in

Sec. 8.420, related to the recognition application.

One comment recommended that the criteria for recognition be

modified to be performance based. The comment suggested dropping the

size and age criteria and the use of the term ``adequate'' within the

list. The Coast Guard agrees in part. Performance is important.

However, other criteria required by the rule indicate characteristics

of the classification society that the Coast Guard determines to be

necessary to assess quality prior to recognition. Considering the

importance of the delegated work, no change is made in response to this

comment.

Incorporation by Reference

The Director of the Federal Register has approved the material in

Sec. 8.110 for incorporation by reference under 5 U.S.C. 552 and 1 CFR

part 51. Copies of the material are available from the sources listed

in that section.

Regulatory Evaluation

This rule is not a significant regulatory action under section 3(f)

of Executive Order 12866 and does not require an assessment of

potential costs and benefits under section 6(a)(3) of that order. It

has not been reviewed by the Office of Management and Budget under that

order. It is not significant under the regulatory policies and

procedures of the Department of Transportation (DOT) (44 FR 11040;

February 26, 1979).

The Coast Guard expects the economic impact of this rule to be so

minimal that a full Regulatory Evaluation under paragraph 10e of the

regulatory policies and procedures of DOT is unnecessary.

The Coast Guard expects this rule to provide an economic benefit to

the owners and operators of U.S. flagged vessels. Currently, 549 U.S.

vessels may be eligible to participate in this optional ACP. The Coast

Guard estimates that while a vessel owner may have to pay an additional

$5,000 in classification society fees for functions presently performed

by the Coast Guard, the savings in design, construction and operating

costs will recover this expense many times over during the lifetime of

the vessel. Moreover, ships built and maintained to SOLAS, MARPOL 73/

78, recognized classification society rules and accepted U.S.

supplement are expected to experience greater competitiveness in the

worldwide shipping market.

Additionally, streamlining the certification process will reduce

time frames for Coast Guard involvement in the COI process from an

average of over 50 hours to 10 hours or less. Because the vessel is

already inspected by the classification society, this program will

reduce duplication of effort, decrease vessel ``down time'' and permit

greater scheduling flexibility. Lower construction and operating costs,

greater flexibility for the vessel in the global market and additional

availability for vessel hire will offset the costs incurred through the

alternate plan review and inspection process utilizing a recognized

classification society. The Coast Guard specifically solicits comments

on potential costs, savings and benefits.

The Coast Guard expects no impact to the regulatory assessment as a

result of changes to this rulemaking.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the

Coast Guard considered whether this rule will have a significant

economic impact on a substantial number of small entities. ``Small

entities'' include small businesses, not-for-profit organizations that

are independently owned and operated and are not dominant in their

fields, and governmental jurisdictions with populations of less than

50,000.

This rule change provides an alternative to complying with existing

regulations. The Coast Guard determined this rulemaking will have a

positive economic impact if the owner chooses to participate in the

ACP. Because of the current structure of the industry, it is not

expected that any small businesses will be affected by the rule.

However, under Section 601 of the Regulatory Flexibility Act, the Coast

Guard has provided a flexible approach which could benefit any small

[[Page 67531]]

businesses which choose to enter this industry. This rulemaking will

have no impact on vessel owners who do not choose to participate in

this program. Therefore, the Coast Guard certifies under section 605(b)

of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) that this

final rule will not have a significant economic impact on a substantial

number of small entities.

Assistance for Small Entities

In accordance with section 213(a) of the Small Business Regulatory

Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard

offers to assist small entities in understanding the rule so that they

may better evaluate its effects on them and participate in the

rulemaking process. Assistance with provisions of this final rule can

be obtained by contacting Commandant (G-MSE), Office of Design and

Engineering Standards, 2100 Second Street, SW., Washington, DC 20593-

0001, telephone 202-267-2997.

Collection of Information

This final rule provides for a collection of information under the

Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Vessel

inspection reports are needed to document the compliance of a vessel

with recognized classification society rules, the accepted U.S.

supplement to rules, and applicable international maritime safety and

marine environmental conventions. Classification societies recognized

to participate in this program will submit copies of reports they

routinely prepare to the Coast Guard.

As required by 5 U.S.C. 3507(d), the Coast Guard submitted a copy

of this rule to the Office of Management and Budget (OMB) for its

review of the collection of information. OMB has approved the

collection. The section numbers are: Secs. 31.01-3, 71.15-5, 91.15-5,

and 107.205, and the corresponding approval number from OMB is OMB

Control Number 2115-0626, which expires on June 30, 1999.

Persons are not required to respond to a collection of information

unless it displays a currently valid OMB control number.

Federalism

The Coast Guard has analyzed this rule under the principles and

criteria contained in Executive Order 12612 and has determined that

this rule does not have sufficient federalism implications to warrant a

Federalism Assessment.

The authority to regulate safety requirements of U.S. vessels is

committed to the Coast Guard by statute. Furthermore, since these

vessels tend to move from port to port in the national market place,

these safety requirements need to be national in scope to avoid

numerous, unreasonable and burdensome variances. Therefore, this action

will preempt State action addressing the same matter.

Federal Preemption

Historically, the Coast Guard has inspected vessels for their

compliance with Federal regulations that address the safety of a vessel

and protection of the marine environment. These regulations establish

design, construction, equipment, manning and other inspection standards

that are part of international conventions to which the U.S. is a party

as well as other inspection standards that assure the safety of a

vessel participating in this alternative inspection program. The

certificate of inspection issued to a vessel by the Coast Guard as a

result of this inspection program indicates that the vessel is safe for

the service in which it is engaged. It is the Coast Guard's opinion

that the Supremacy Clause of the Constitution would preempt state and

local regulations that seek to impose different or higher standards

governing the inspection of a U.S. vessel as established in these

regulations.

Environment

The Coast Guard considered the environmental impact of this rule

and concluded that under paragraph 2.B.2 of Commandant Instruction

M16475.1B, this rule is categorically excluded from further

environmental documentation. This rule is excluded based on its

inspection and equipment aspects. A Categorical Exclusion Determination

is available in the docket for inspection or copying where indicated

under ADDRESSES.

Since the combination of classification society rules, applicable

international conventions and the U.S. supplement to the rules have

been determined to provide a level of safety equivalent to current

Coast Guard regulations, the Coast Guard expects that this rulemaking

will have no adverse environmental impact.

List of Subjects

33 CFR Part 151

Administrative practice and procedure, Oil pollution, Penalties,

Reporting and recordkeeping requirements, Water pollution control.

46 CFR Part 1

Administrative practice and procedure, Organization and functions

(Government agencies), Reporting and recordkeeping requirements.

46 CFR Part 8

Administrative practice and procedure, Incorporation by reference,

Organization and functions (Government agencies), Reporting and

recordkeeping requirements.

46 CFR Part 31

Marine safety, Reporting and recordkeeping requirements, Tank

vessels.

46 CFR Part 69

Measurement standards, Penalties, Reporting and recordkeeping

requirements, Vessels.

46 CFR Part 71

Marine safety, Passenger vessels, Reporting and recordkeeping

requirements.

46 CFR Part 91

Cargo vessels, Marine safety, Reporting and recordkeeping

requirements.

46 CFR Part 107

Marine safety, Oil and gas exploration, Reporting and recordkeeping

requirements, Vessels.

46 CFR Part 153

Administrative practice and procedure, Cargo vessels, Hazardous

materials transportation, Marine safety, Reporting and recordkeeping

requirements, Water pollution control.

46 CFR Part 154

Cargo vessels, Gases, Hazardous materials transportation, Marine

safety, Reporting and recordkeeping requirements.

For the reasons set out in the preamble, under the authority of 46

U.S.C. 3306, the Coast Guard amends 33 CFR part 151 and 46 CFR parts 1,

8, 31, 69, 71, 91 107, 153, and 154 as follows:

PART 151--VESSELS CARRYING OIL, NOXIOUS LIQUID SUBSTANCES, GARBAGE,

MUNICIPAL OR COMMERCIAL WASTE, AND BALLAST WATER

1. The authority citation for part 151 continues to read as

follows:

Authority: 33 U.S.C. 1321(j)(1)(c) and 1903(b); E.O. 12777, 3

CFR, 1991 Comp. P. 351; 49 CFR 1.46.

2. Revise Sec. 151.19(c) to read as follows:

Sec. 151.19 International Oil Pollution Prevention (IOPP)

Certificates.

* * * * *

[[Page 67532]]

(c) An IOPP Certificate is issued by a COTP, OCMI, or a

classification society authorized under 46 CFR part 8, after a

satisfactory survey in accordance with the provisions of Sec. 151.17.

* * * * *

Sec. 151.37 [Amended]

3. In Sec. 151.37, in paragraphs (a), (b), and (c), remove the

words ``Coast Guard issues'' and add, in its place, the words ``Coast

Guard or a classification society authorized under 46 CFR part 8

issues''.

PART 1--ORGANIZATION, GENERAL COURSE AND METHODS GOVERNING MARINE

SAFETY FUNCTIONS

4. The authority citation for part 1 continues to read as follows:

Authority: 5 U.S.C. 552; 14 U.S.C. 633; 46 U.S.C. 7701; 49 CFR

1045, 1.46; Sec. 1.01-35 also issued under the authority of 44

U.S.C. 3507.

5. Add Sec. 1.03-15(h)(4) to read as follows:

Sec. 1.03-15 General.

* * * * *

(h) * * *

(4) Commandant (G-MSE) for appeals involving the recognition of a

classification society.

* * * * *

6. Revise part 8 to read as follows:

PART 8--VESSEL INSPECTION ALTERNATIVES

Subpart A--General

Sec.

8.100 Definitions.

8.110 Incorporation by reference.

8.120 Reciprocity.

8.130 Agreement conditions.

Subpart B--Recognition of a Classification Society

8.200 Purpose.

8.210 Applicability.

8.220 Recognition of a classification society.

8.230 Minimum standards for a recognized classification society.

8.240 Application for recognition.

8.250 Acceptance of standards and functions delegated under

existing regulations.

8.260 Revocation of classification society recognition.

Subpart C--International Convention Certificate Issuance

8.300 Purpose.

8.310 Applicability.

8.320 Classification society authorization to issue international

certificates.

8.330 Termination of classification society authority.

Subpart D--Alternate Compliance Program

8.400 Purpose.

8.410 Applicability.

8.420 Classification society authorization to participate in the

Alternate Compliance Program.

8.430 U.S. Supplement to class rules.

8.440 Vessel enrollment in the Alternate Compliance Program.

8.450 Termination of classification society authority.

Authority: 46 U.S.C. 3306; 46 U.S.C. 3316, as amended by Sec.

607, Pub. L. 104-324, 110 Stat. 3901; 46 U.S.C. 3703; 49 CFR 1.45,

1.46.

Subpart A--General

Sec. 8.100 Definitions.

Authorized Classification Society means a recognized classification

society that has been delegated the authority to conduct certain

functions and certifications on behalf of the Coast Guard.

Class Rules means the standards developed and published by a

classification society regarding the design, construction and

certification of commercial vessels.

Classed means that a vessel meets the classification society

requirements that embody the technical rules, regulations, standards,

guidelines and associated surveys and inspections covering the design,

construction and through-life compliance of a ship's structure and

essential engineering and electrical systems.

Commandant means the Commandant of the Coast Guard.

Delegated Function means a function related to Coast Guard

commercial vessel inspection which has been delegated to a

classification society. Delegated functions may include issuance of

international convention certificates and participation in the

Alternate Compliance Program under this part.

Delegated Function Related to General Vessel Safety Assessment

means issuance of the SOLAS Cargo Ship Safety Construction Certificate

or issuance of the SOLAS Cargo Ship Safety Equipment Certificate.

Exclusive Surveyor means a person who is employed solely by a

classification society and is authorized to conduct vessel surveys.

Independent surveyors, hired on a case-by-case basis, or surveyors of

another classification society are not considered exclusive surveyors

for the performance of delegated functions on behalf of the Coast

Guard.

Gross Tons means vessel tonnage measured in accordance with the

International Convention on Tonnage Measurement of Ships, 1969. Vessels

not measured by this convention must be measured in accordance with the

method utilized by the flag state administration of that vessel.

MARPOL 73/78 means the Protocol of 1978 relating to the

International Convention for the Prevention of Pollution from Ships,

1973, and includes the Convention which means the International

Convention for the Prevention of Pollution from Ships, 1973, including

Protocols I and II and Annexes I, II, and V thereto, including any

modification or amendments to the Convention, Protocols or Annexes

which have entered into force for the United States.

Officer in Charge, Marine Inspection (OCMI) means any person from

the civilian or military branch of the Coast Guard designated as such

by the Commandant and who, under the superintendence and direction of a

Coast Guard District Commander, is in charge of an inspection zone for

the performance of duties with respect to the inspection, enforcement,

and administration of 46 U.S.C., Revised Statutes, and acts amendatory

thereof or supplemental thereto, and rules and regulations thereunder.

Recognized Classification Society means the American Bureau of

Shipping or other classification society recognized by the Commandant

under this part.

SOLAS means International Convention for the Safety of Life at Sea,

1974, as amended.

Sec. 8.110 Incorporation by reference.

(a) Certain material is incorporated by reference into this

subchapter with the approval of the Director of the Federal Register

under 5 U.S.C. 552(a) and 1 CFR Part 51. To enforce any edition other

than that specified in paragraph (b) of this section, the Coast Guard

must publish notice of the change in the Federal Register and the

material must be available to the public. All material is available for

inspection at the Office of the Federal Register, 800 North Capitol

St., NW., Suite 700, Washington, DC and at the U.S. Coast Guard, Office

of Design and Engineering Standards, 2100 Second St., SW., Washington,

DC 20593-0001, and is available from the sources listed in paragraph

(b).

(b) The material incorporated by reference in this subchapter and

the sections affected are as follows:

American Bureau of Shipping (ABS)--Two World Trade Center, 106th

Floor, New York, NY 10048.

Rules for Building and Classing Steel Vessels, 1996--31.01-3(b), 71.15-

5(b), 91.15-5(b)

U.S. Supplement to ABS Rules for Steel Vessels for Vessels on

International

[[Page 67533]]

Voyages, 21 October 1996--31.01-3(b), 71.15-5(b), 91.15-5(b)

American National Standards Institute (ANSI)--11 West 42nd St., New

York, NY 10036.

ANSI/ASQC Q9001-1994, Quality Systems--Model for Quality Assurance in

Design, Development, Production, Installation, and Servicing, 1994--

8.230

Sec. 8.120 Reciprocity.

(a) The Commandant may delegate authority to a classification

society that has its headquarters in a country other than the United

States only to the extent that the flag state administration of that

country delegates authority and provides access to the American Bureau

of Shipping to inspect, certify and provide related services to vessels

flagged by that country. The Commandant will determine reciprocity on a

``case-by-case'' basis.

(b) In order to demonstrate that the conditions described in

paragraph (a) of this section are satisfied, a classification society

must provide to the Coast Guard an affidavit, from the government of

the country that the classification society is headquartered in,

listing the authorities delegated by the flag state administration of

that country to the American Bureau of Shipping, and indicating any

conditions related to the delegated authority.

(c) The Commandant will not consider an application for

authorization to perform a delegated function submitted under this part

until the conditions described in paragraph (a) of this section are

satisfied. Where simultaneous authorization by a foreign government for

ABS is involved, this requirement may be waived.

(d) The Commandant will not evaluate a classification society for

recognition until the conditions described in paragraph (a) of this

section are satisfied for at least one of the authorized delegations

being sought. Where simultaneous recognition by a foreign government

for ABS is involved, this requirement may be waived.

(e) The Commandant may make a delegation regarding load lines under

46 U.S.C. 5107 or measurement of vessels under 46 U.S.C. 14103 without

regard to the conditions described in paragraph (a) of this section.

Sec. 8.130 Agreement conditions.

(a) Delegated functions performed by, and statutory certificates

issued by, an authorized classification society will be accepted as

functions performed by, or certificates issued by, the Coast Guard,

provided that the classification society maintains compliance with all

provisions of its agreement with the Commandant. Any agreement between

the Commandant and a recognized classification society authorizing the

performance of delegated functions will be written and will require the

classification society to comply with each of the following:

(1) Issue any certificates related to a delegated function in the

English language.

(2) Maintain a corporate office in the United States that has

adequate resources and staff to support all delegated functions and to

maintain required associated records.

(3) Maintain all records in the United States related to delegated

functions conducted on behalf of the Coast Guard.

(4) Make available to appropriate Coast Guard representatives

vessel status information and records, including outstanding vessel

deficiencies or classification society recommendations, in the English

language, on all vessels for which the classification society has

performed any delegated function on behalf of the Coast Guard.

(5) Report to the Commandant (G-MOC) the names and official numbers

of any vessels removed from class for which the classification society

has performed any delegated function on behalf of the Coast Guard and

include a description of the reason for the removal.

(6) Report to the Commandant (G-MOC) all port state detentions on

all vessels for which the classification society has performed any

delegated function on behalf of the Coast Guard when aware of such

detention.

(7) Annually provide the Commandant (G-MOC) with its register of

classed vessels.

(8) Ensure vessels meet all requirements for class of the accepting

classification society prior to accepting vessels transferred from

another classification society.

(9) Suspend class for vessels that are overdue for special renewal

or annual survey.

(10) Attend any vessel for which the classification society has

performed any delegated function on behalf of the Coast Guard at the

request of the appropriate Coast Guard officials, without regard to the

vessel's location-- unless prohibited to do so under the laws of the

United States, the laws of the jurisdiction in which the vessel is

located, the classification society's home country domestic law, or

where the classification society considers an unacceptable hazard to

life and/or property exists.

(11) Honor appeal decisions made by the Commandant (G-MSE) or

Commandant (G-MOC) on issues related to delegated functions.

(12) Apply U.S. flag administration interpretations, when they

exist, to international conventions for which the classification

society has been delegated authority to certificate or perform other

functions on behalf of the Coast Guard.

(13) Obtain approval from the Commandant (G-MOC) prior to granting

exemptions from the requirements of international conventions, class

rules, and the U.S. supplement to class rules.

(14) Make available to the Coast Guard all records, in the English

language, related to equivalency determinations or approvals made in

the course of delegated functions conducted on behalf of the Coast

Guard.

(15) Report to the Coast Guard all information specified in the

agreement at the specified frequency and to the specified Coast Guard

office or official.

(16) Grant the Coast Guard access to all plans and documents,

including reports on surveys, on the basis of which certificates are

issued or endorsed by the classification society.

(17) Identify a liaison representative to the Coast Guard.

(18) Provide regulations, rules, instructions and report forms in

the English language.

(19) Allow the Commandant (G-M) to participate in the development

of class rules.

(20) Inform the Commandant (G-M) of all proposed changes to class

rules.

(21) Provide the Commandant (G-M) the opportunity to comment on any

proposed changes to class rules and to respond to the classification

society's disposition of the comments made by the Coast Guard.

(22) Furnish information and required access to the Coast Guard to

conduct oversight of the classification society's activities related to

delegated functions conducted on behalf of the Coast Guard.

(23) Allow the Coast Guard to accompany them on internal and

external quality audits and provide written results of such audits to

appropriate Coast Guard representatives.

(24) Provide the Coast Guard access necessary to audit the

authorized classification society to ensure that it continues to comply

with the minimum standards for a recognized classification society.

(25) Use only exclusive surveyors of that classification society to

accomplish all work done on behalf of, or under any delegation from,

the Coast Guard. For tonnage-related measurement service only, however,

classification societies

[[Page 67534]]

may use part-time employees or independent contractors in place of

exclusive surveyors.

(26) Allow its surveyors to participate in training with the Coast

Guard regarding delegated functions.

(b) Amendments to an agreement between the Coast Guard and an

authorized classification society will become effective only after

consultation and written agreement between parties.

(c) Agreements may be terminated by one party only upon written

notice to the other party. Termination will occur sixty days after

written notice is given.

Subpart B--Recognition of a Classification Society

Sec. 8.200 Purpose.

This subpart establishes criteria and procedures for vessel

classification societies to obtain recognition from the Coast Guard.

This recognition is necessary in order for a classification society to

become authorized to perform vessel inspection and certification

functions delegated by the Coast Guard as described in this part.

Sec. 8.210 Applicability.

This subpart applies to all vessel classification societies seeking

recognition by the Coast Guard.

Sec. 8.220 Recognition of a classification society.

(a) A classification society must be recognized by the Commandant

before it may receive statutory authority delegated by the Coast Guard.

(b) In order to become recognized, a classification society must

meet the requirements of Sec. 8.230.

(c) A classification society found to meet the criteria for

recognition will be notified in writing by the Commandant.

(d) If the Coast Guard determines that a classification society

does not meet the criteria for recognition, the Coast Guard will

provide the reason for this determination.

(e) A classification society may reapply for recognition upon

correction of the deficiencies identified by the Coast Guard.

Sec. 8.230 Minimum standards for a recognized classification society.

(a) In order to receive recognition by the Coast Guard a

classification society must:

(1) Establish that it has functioned as an international

classification society for at least 30 years with its own class rules;

(2) Establish that is has a history of appropriate corrective

actions in addressing vessel casualties and cases of nonconformity with

class rules;

(3) Establish that it has a history of appropriate changes to class

rules based on their application and the overall performance of its

classed fleet;

(4) Have a total classed tonnage of at least 10 million gross tons;

(5) Have a classed fleet of at least 1,500 ocean-going vessels over

100 gross tons;

(6) Have a total classed tonnage of ocean-going vessels over 100

gross tons totaling no less than 8 million gross tons;

(7) Publish and maintain class rules in the English language for

the design, construction and certification of ships and their

associated essential engineering systems;

(8) Maintain written survey procedures in the English language;

(9) Have adequate resources, including research, technical, and

managerial staff, to ensure appropriate updating and maintaining of

class rules and procedures;

(10) Have adequate resources and geographical coverage to carry out

all plan review and vessel survey activities associated with delegated

functions as well as classification society requirements;

(11) Employ a minimum of 150 exclusive surveyors;

(12) Have adequate criteria for hiring and qualifying surveyors and

technical staff;

(13) Have an adequate program for continued training of surveyors

and technical staff;

(14) Have a corporate office in the United States that provides a

continuous management and administrative presence;

(15) Maintain an internal quality system based on ANSI/ASQC Q9001

or an equivalent quality standard;

(16) Determine classed vessels comply with class rules, during

appropriate surveys and inspection;

(17) Determine that attended vessels comply with all statutory

requirements related to delegated functions, during appropriate surveys

and inspection;

(18) Monitor all activities related to delegated functions for

consistency and required end-results;

(19) Maintain and ensure compliance with a Code of Ethics that

recognizes the inherent responsibility associated with delegation of

authority;

(20) Not be under the financial control of shipowners or

shipbuilders, or of others engaged commercially in the manufacture,

equipping, repair or operation of ships;

(21) Not be financially dependent on a single commercial enterprise

for its revenue;

(22) Not have any business interest in, or share of ownership of,

any vessel in its classed fleet; and

(23) Not be involved in any activities which could result in a

conflict of interest.

(b) Recognition may be granted after it is established that the

classification society has an acceptable record of vessel detentions

attributed to classification society performance under the Coast Guard

Port State Control Program.

Sec. 8.240 Application for recognition.

(a) A classification society must apply for recognition in writing

to the Commandant (G-MSE).

(b) An application must indicate which specific authority the

classification society seeks to have delegated.

(c) Upon verification from the Coast Guard that the conditions of

reciprocity have been met in accordance with Sec. 8.120, the requesting

classification society must submit documentation to establish that it

meets the requirements of Sec. 8.230.

Sec. 8.250 Acceptance of standards and functions delegated under

existing regulations.

(a) Classification society class rules will only be accepted as

equivalent to Coast Guard regulatory standards when that classification

society has received authorization to conduct a related delegated

function.

(b) A recognized classification society may not conduct any

delegated function under this title until it receives a separate

written authorization from the Commandant to conduct that specific

function.

Sec. 8.260 Revocation of classification society recognition.

A recognized classification society which fails to maintain the

minimum standards established in this part will be reevaluated and its

recognized status revoked if warranted.

Subpart C--International Convention Certificate Issuance

Sec. 8.300 Purpose.

This subpart establishes options for vessel owners and operators to

obtain required international convention certification through means

other than those prescribed elsewhere in this chapter.

Sec. 8.310 Applicability.

This subpart applies to:

(a) Recognized classification societies; and

(b) All U.S. flag vessels that are certificated for international

voyages

[[Page 67535]]

and are classed by a recognized classification society that is

authorized by the Coast Guard to issue the applicable international

certificate as specified in this subpart.

Sec. 8.320 Classification society authorization to issue international

certificates.

(a) The Commandant may authorize a recognized classification

society to issue certain international convention certificates.

Authorization will be based on review of:

(1) Applicable class rules; and

(2) Applicable classification society procedures.

(b) The Coast Guard may delegate issuance of the following

international convention certificates to a recognized classification

society:

(1) International Load Line Certificate;

(2) International Tonnage Certificate (1969);

(3) SOLAS Cargo Ship Safety Construction Certificate;

(4) SOLAS Cargo Ship Safety Equipment Certificate;

(5) International Certificate of Fitness for the Carriage of

Dangerous Chemicals in Bulk;

(6) International Certificate of Fitness for the Carriage of

Liquefied Gases in Bulk;

(7) International Maritime Organization (IMO) Mobile Offshore

Drilling Unit Safety Certificate;

(8) MARPOL 73/78 International Oil Pollution Prevention

Certificate; and

(9) MARPOL 73/78 International Oil Pollution Prevention Certificate

for the Carriage of Noxious Liquid Substances in Bulk.

(c) The Coast Guard will enter into a written agreement with a

recognized classification society authorized to issue international

convention certificates. This agreement will define the scope, terms,

conditions and requirements of that delegation. Conditions of these

agreements are presented in Sec. 8.130.

Sec. 8.330 Termination of classification society authority.

(a) The Coast Guard may terminate an authorization agreement with a

classification society if:

(1) The Commandant revokes the classification society's

recognition, as specified in Sec. 8.260; or

(2) The classification society fails to comply with the conditions

of the authorization agreement as specified in Sec. 8.130.

(b) In the event that a flag administration of a country changes

conditions related to the authority that is delegated to ABS, the

Commandant may modify or revoke the Coast Guard's authorization of that

classification society that has its headquarters in that country.

(c) Certificates issued by a classification society which has had

its authorization terminated will remain valid until the next

classification society survey associated with that certificate is

required or until the certificate expires, whichever occurs first.

Subpart D--Alternate Compliance Program

Sec. 8.400 Purpose.

This subpart establishes an alternative to subpart 2.01 of this

chapter for certification of United States vessels.

Sec. 8.410 Applicability.

This subpart applies to:

(a) Recognized classification societies; and

(b) U.S. flag vessels that are certificated for international

voyages and are classed by a recognized classification society that is

authorized by the Coast Guard to participate in the Alternate

Compliance Program (ACP) as specified in this subpart and whose vessel

type is authorized to participate in the ACP per the applicable

subchapter of 46 CFR chapter I.

Sec. 8.420 Classification society authorization to participate in the

Alternate Compliance Program.

(a) The Commandant may authorize a recognized classification

society to participate in the ACP. Authorization will be based on a

satisfactory review of:

(1) Applicable class rules; and

(2) Applicable classification society procedures.

(b) Authorization for a recognized classification society to

participate in the ACP will require development of a U.S. Supplement to

the society's class rules that meets the requirements of Sec. 8.430 of

this part, which must be accepted by the Coast Guard.

(c) A recognized classification society will be eligible to receive

authorization to participate in the ACP only after it has performed a

delegated function related to general vessel safety assessment, as

defined in Sec. 8.100, for a two-year period.

(d) If, after this two-year period, the Coast Guard finds that the

recognized classification society has not demonstrated the necessary

satisfactory performance or lacks adequate experience, the recognized

classification society will not be eligible to participate in the ACP.

The Coast Guard will provide the reason for this determination to the

recognized classification society. A classification society may appeal

the decision of the Coast Guard concerning recognition to the

Commandant in writing in accordance with 46 CFR 1.03-15(h)(4).

(e) The Coast Guard will enter into a written agreement with a

recognized classification society authorized to participate in the ACP.

This agreement will define the scope, terms, conditions and

requirements of the necessary delegation. Conditions of this agreement

are presented in Sec. 8.130.

Sec. 8.430 U.S. Supplement to class rules.

Prior to receiving authorization to participate in the ACP, a

recognized classification society must prepare, and receive Commandant

(G-MSE) approval of, a U.S. Supplement to the recognized classification

society's class rules. This supplement must include all regulations

applicable for issuance of a Certificate of Inspection (COI) which are

not, in the opinion of the Commandant, adequately established by either

the class rules of that classification society or applicable

international regulations.

Sec. 8.440 Vessel enrollment in the Alternate Compliance Program.

(a) In place of compliance with other applicable provisions of this

title, the owner or operator of a vessel subject to plan review and

inspection under this subchapter for initial issuance or renewal of a

COI may submit the vessel for classification, plan review and

inspection by a recognized classification society authorized by the

Coast Guard to determine compliance with applicable international

treaties and agreements, the classification society's class rules, and

the U.S. Supplement prepared by the classification society and accepted

by the Coast Guard.

(b) A vessel owner or operator wishing to have a vessel inspected

under paragraph (a) of this section shall submit an Application for

Inspection of U.S. Vessel (CG-3752) to the cognizant OCMI, and indicate

on the form that the inspection will be conducted by an authorized

classification society under the ACP.

(c) Based on reports from an authorized classification society that

a vessel complies with applicable international treaties and

agreements, the classification society's class rules, and the U.S.

Supplement prepared by the classification society and accepted by the

Coast Guard, the cognizant OCMI may issue a certificate of inspection

to the vessel. If the OCMI declines to issue a certificate of

inspection even though the reports made by the authorized

classification society indicate that the vessel meets applicable

standards, the vessel owner or operator may appeal the OCMI decision as

provided in subpart 1.03 of this chapter.

[[Page 67536]]

(d) If reports from an authorized classification society indicate

that a vessel does not comply with applicable international treaties

and agreements, the classification society's class rules, and the U.S.

Supplement prepared by the classification society and accepted by the

Coast Guard, the cognizant OCMI may decline to issue a certificate of

inspection. If the OCMI declines to issue a certificate of inspection,

the vessel owner or operator may:

(1) Correct the reported deficiencies and make arrangements with

the classification society for an additional inspection;

(2) Request inspection by the Coast Guard under other provisions of

this subchapter; or

(3) Appeal via the authorized classification society to the Chief,

Office of Compliance, Commandant (G-MOC), U.S. Coast Guard, 2100 Second

St. SW., Washington, DC 20593-0001.

Sec. 8.450 Termination of classification society authority.

(a) The Coast Guard may terminate an authorization agreement with a

classification society to participate in the Alternate Compliance

Program if:

(1) The Commandant revokes the classification society's

recognition, as specified in Sec. 8.260; or

(2) The classification society fails to comply with the conditions

of the authorization agreement as specified in Sec. 8.130.

(b) In the event that a flag administration of a country changes

conditions related to the authority that is delegated to ABS, the

Commandant may modify or revoke the Coast Guard's authorization of that

classification society that has its headquarters in that country.

(c) Certificates issued by a classification society which has had

its authorization to participate in the Alternate Compliance Program

terminated will be subject to the provisions of Sec. 8.330.

(d) Owners or operators of vessels enrolled in the ACP and classed

by a classification society that has its authority to participate in

the ACP terminated must:

(1) Change the classification society for the vessel to a

classification society that is authorized to participate in the ACP; or

(2) Disenroll the vessel from the ACP.

(e) The Coast Guard will provide guidance to a vessel owner

affected by the revocation of a classification society's authority to

participate in the ACP. This will include notification of when the

action required under paragraph (d) of this section must be completed.

PART 31--INSPECTION AND CERTIFICATION

7. The authority citation for part 31 continues to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 3306; 46 U.S.C. 3316, as

amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; 46 U.S.C.

3703, 5115, 8105; 49 U.S.C. App. 1804; E.O. 12234, 45 FR 58801, 3

CFR, 1980 Comp., p. 277; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975

Comp., p. 793; 49 CFR 1.46.

8. Revise Sec. 31.01-3 to read as follows:

Sec. 31.01-3 Alternate compliance.

(a) In place of compliance with other applicable provisions of this

subchapter, the owner or operator of a vessel subject to plan review

and inspection under this subchapter for initial issuance or renewal of

a Certificate of Inspection may comply with the Alternate Compliance

Program provisions of part 8 of this chapter.

(b) For the purposes of this section, a list of authorized

classification societies is available from Commandant (G-MSE). Approved

classification society rules and supplements are contained in 46 CFR

Sec. 8.110(b).

PART 69--MEASUREMENT OF VESSELS

9. The authority citation for part 69 continues to read as follows:

Authority: 46 U.S.C. 2301, 14103; 49 CFR 1.46.

10. Amend Sec. 69.27 by redesignating paragraphs (b)(3), (b)(4) and

(b)(5) as paragraphs (b)(4), (b)(5), and (b)(6), respectively and by

adding a new paragraph (b)(3) to read as follows:

Sec. 69.27 Delegation of authority to measure vessels.

* * * * *

(b) * * *

(3) In lieu of the requirements in paragraphs (b)(1) and (2) of

this section, is a recognized classification society under the

requirements of 46 CFR part 8.

* * * * *

PART 71--INSPECTION AND CERTIFICATION

11. The authority citation for part 71 continues to read as

follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2113, 3306; 46 U.S.C.

3316, as amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; E.O.

12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR

54757, 3 CFR 1991 Comp., p. 351; 49 CFR 1.46.

12. Revise Sec. 71.15-5 to read as follows:

Sec. 71.15-5 Alternate compliance.

(a) In place of compliance with other applicable provisions of this

subchapter, the owner or operator of a vessel subject to plan review

and inspection under this subchapter for initial issuance or renewal of

a Certificate of Inspection may comply with the Alternate Compliance

Program provisions of part 8 of this chapter.

(b) For the purposes of this section, a list of authorized

classification societies is available from Commandant (G-MSE). Approved

classification society rules and supplements are contained in 46 CFR

8.110(b).

PART 91--INSPECTION AND CERTIFICATION

13. The authority citation for part 91 continues to read as

follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 3306; 46 U.S.C. 3316, as

amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; E.O. 12234, 45

FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 11735, 38 FR 21243, 3 CFR,

1971-1975 Comp., p. 793; 49 CFR 1.46.

14. Revise Sec. 91.15-5 to read as follows:

Sec. 91.15-5 Alternate compliance.

(a) In place of compliance with other applicable provisions of this

subchapter, the owner or operator of a vessel subject to plan review

and inspection under this subchapter for initial issuance or renewal of

a Certificate of Inspection may comply with the Alternate Compliance

Program provisions of part 8 of this chapter.

(b) For the purposes of this section, a list of authorized

classification societies is available from Commandant (G-MSE). Approved

classification society rules and supplements are contained in 46 CFR

8.110(b).

PART 107--INSPECTION AND CERTIFICATION

15. The authority citation for part 107 continues to read as

follows:

Authority: 43 U.S.C. 1333; 46 U.S.C. 3306; 46 U.S.C. 3316, as

amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; 46 U.S.C 5115;

49 CFR 1.45, 1.46; Sec. 107.05 also issued under authority of 44

U.S.C. 3507.

16. Revise Sec. 107.205 to read as follows:

Sec. 107.205 Alternate compliance.

(a) In place of compliance with other applicable provisions of this

subchapter, the owner or operator of a vessel subject to plan review

and inspection under this subchapter for initial issuance or renewal of

a Certificate of Inspection may comply with the Alternate

[[Page 67537]]

Compliance Program provisions of part 8 of this chapter.

(b) For the purposes of this section, a list of authorized

classification societies is available from Commandant (G-MSE). Approved

classification society rules and supplements are contained in 46 CFR

8.110(b).

PART 153--SHIPS CARRYING BULK LIQUID, LIQUEFIED GAS, OR COMPRESSED

GAS HAZARDOUS MATERIALS

17. The authority citation for part 153 continues to read as

follows:

Authority: 46 U.S.C. 3703; 49 CFR 1.46. Section 153.40 issued

under 49 U.S.C. 5103. Sections 153.470 through 153.491, 153.110

through 153.1132, and 153.1600 through 153.1608 also issued under 33

U.S.C. 1903(b).

18. In Sec. 153.12, revise the introductory paragraph to read as

follows:

Sec. 153.12 IMO certificates for United States ships.

Either a classification society authorized under 46 CFR part 8, or

the Officer in Charge, Marine Inspection, issues a United States ship

an IMO Certificate endorsed to allow the carriage of a hazardous

material or NLS cargo in Table 1 of this part if the following

requirements are met:

* * * * *

PART 154--SAFTEY STANDARDS FOR SELF-PROPELLED VESSELS CARRYING BULK

LIQUEFIED GASES

19. The authority citation for part 154 continues to read as

follows:

Authority: 46 U.S.C. 3703, 9101; 49 CFR 1.46.

20. Revise Sec. 154.19(a) introductory text to read as follows:

Sec. 154.19 U.S. flag vessel: IMO certificate issuance.

(a) Either a classification society authorized under 46 CFR part 8,

or the Coast Guard Officer in Charge, Marine Inspection, issues an IMO

Certificate to a U.S. flag vessel when requested by the owner or

representative, if--

* * * * *

Dated: December 17, 1997.

R. C. North,

Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety

and Environmental Protection.

[FR Doc. 97-33477 Filed 12-23-97; 8:45 am]

BILLING CODE 4910-14-U