Streamlined Inspection Program

SUMMARY: The Coast Guard proposes to establish an optional Streamlined

Inspection Program (SIP) to provide owners and operators of U.S.

documented or registered vessels an alternative method of complying

with Coast Guard inspection requirements. Vessel owners or operators

would have their own personnel periodically perform many of the tests

and examinations conducted by Coast Guard marine inspectors. Vessel

owners and operators opting to participate in the program would

maintain a vessel in compliance with a Vessel Action Plan (VAP). The

Coast Guard expects that participating vessels would continuously meet

a higher level of safety and inspection readiness throughout the

inspection cycle.

DATES: Comments must be received on or before July 7, 1997.

ADDRESSES: Mail comments to the Executive Secretary, Marine Safety

Council (G-LRA/3406) [CGD 96-055], U.S. Coast Guard Headquarters, 2100

Second Street SW., Washington, DC 20593-0001, or deliver them to room

3406 at the same address between 9:30 a.m. and 2 p.m., Monday through

Friday, except Federal holidays. The telephone number is (202) 267-

1477.

Comments on collection-of-information requirements must be mailed

also to the Office of Information and Regulatory Affairs, Office of

Management and Budget, 725 17th Street NW., Washington, DC 20593, ATTN:

Desk Officer, U.S. Coast Guard.

The Executive Secretary maintains the public docket for this

rulemaking. Comments will become part of this docket and will be

available for inspection or copying at room 3406, U.S. Coast Guard

Headquarters, between 9:30 a.m. and 2 p.m., Monday through Friday,

except Federal holidays.

FOR FURTHER INFORMATION CONTACT: CDR Mark D. Bobal, Vessel and Facility

Operating Standards Division (G-MSO-2), U.S. Coast Guard Headquarters,

2100 Second Street, SW., Washington, DC 20593-0001, telephone (202)

267-1093.

SUPPLEMENTARY INFORMATION:

Request for Comments

The Coast Guard encourages interested persons to participate in

this rulem aking by submitting written data, views, or arguments.

Persons submitting comments should include their names and addresses,

identify this rulemaking [CGD 96-055] and the specific section of this

proposal to which each comment applies, and give the reason for each

comment. Please submit two copies of all comments and attachments in an

unbound format, no larger than 8\1/2\ by 11 inches, suitable for

copying and electronic filing. Persons wanting acknowledgment of

receipt of comments should enclose stamped, self-addressed postcards or

envelopes.

The Coast Guard will consider all comments received during the

comment period. It may change this proposal in view of the comments.

The Coast Guard plans no public hearing. Persons may request a

public hearing by writing to the Marine Safety Council at the address

under ADDRESSES. The request should include the reason why a hearing

would be beneficial. If it determines that the opportunity for oral

presentations will aid this rulemaking, the Coast Guard will hold a

public meeting at a time and place announced by a later document in the

Federal Register.

Background and Purpose

Title 46 U.S.C. 3306 authorizes the Coast Guard to prescribe

regulations necessary to carry out the inspection of vessels required

to be inspected under 46 U.S.C. 3301. The inspection of vessels

identified in 46 U.S.C. 3301 is required by statute; however, the

specific procedures for conducting inspection are set out in Coast

Guard regulations.

In 1992, as part of an initiative known as Maritime Regulatory

Reform, the Coast Guard considered a number of alternatives for

inspection of U.S. documented or registered vessels. Two of these

alternatives are the Alternate Compliance Program (ACP)(46 CFR part 8)

and the proposed Streamlined Inspection Program (SIP).

The SIP would be an optional alternative inspection program for

owners and operators of U.S. documented or registered vessels,. The

objective of the SIP would be to have vessels participate in a constant

state of regulatory compliance rather than the traditional cyclical

readiness associated with vessels that must undergo Coast Guard

periodic inspections. Under this alternative, the vessel owner or

operator would work with a Coast Guard representative to develop a

Company Action Plan (CAP) and a Vessel Action Plan (VAP). A CAP

describes the company's organization and its commitment to the SIP. The

CAP also details how the company would train its employees on their

specific SIP responsibilities. The VAP describes the Coast Guard

regulations that apply to the vessel and the company's tailored plans

for its employees to properly examine vessel systems and ensure these

systems operate safely. To simplify the CAP and the VAP and to provide

consistency throughout the country, the Coast Guard would provide

specific guidance for prospective SIP companies and Coast Guard

personnel. These guidance documents would be published for each

regulatory subchapter applicable to particular types of vessels (e.g.,

46 CFR chapter I, subchapters T, K, H, L, I, and D). Plans would

contain detailed procedures for periodic examination and testing of

vessel equipment and systems by company employees.

To provide flexibility and to encourage greater participation in

the SIP, waiver provisions for the SIP procedural requirements are

included in this proposed rule. A company could request a waiver for

any provision of the proposed SIP regulations. After the cognizant OCMI

has reviewed the request, waivers would be considered on a case-by-case

basis by the Coast Guard District Commander. For example, a waiver

could be granted for a company to allow enrollment of a vessel that

does not meet the 3-year ownership rule prior to the date of

application as proposed in Sec. 8.515. The waiver provisions in this

proposed rule do not affect the equipment, operating, or other

requirements of the regulatory subchapter applicable to the vessel.

The SIP would be premised on responsible company personnel

performing vessel system examinations at a frequency ordinarily greater

than, but at least equal to, examinations conducted by Coast Guard

marine inspectors. The Coast Guard would continue to certificate

vessels enrolled in the SIP and ensure that they meet applicable safety

requirements. Under SIP, the company would have an interactive role in

ensuring compliance with applicable laws and regulations. By

participating in the development of a VAP with the Coast Guard, the

company has greater control of its vessels' operations and procedures,

and will be able to measure the success of the SIP. The CAP and VAP are

expected to be dynamic working documents that would require continuous

maintenance and periodic revision by the company to

[[Page 17009]]

ensure proper administration of its SIP as set forth in this proposed

rule. A vessel enrolled in the SIP and operating under an approved VAP

would still be inspected by a Coast Guard marine inspector, but the

procedures for inspection would be contained in the VAP's Inspection

Criteria References and the Inspection Schedule and Verification. These

documents incorporate all inspection requirements for the vessel and

conform to the inspection subchapters applicable to the vessel.

To ensure the high standards of the SIP are upheld, the Coast Guard

is proposing disenrollment criteria. Under this proposal, the

disenrollment of a vessel from the SIP may take two forms--voluntary

and involuntary. Voluntary disenrollment would be granted at the

company's request. Failure to maintain compliance with a CAP or VAP may

lead to involuntary disenrollment of a company or a vessel. Should this

occur, the vessel would be inspected under traditional inspection

methods or inspected under the ACP. Disenrolled companies and vessels

would have to apply to the cognizant Officer in Charge, Marine

Inspection (OCMI), if they wanted to participate in the SIP again.

Companies would have the right to appeal the OCMI determinations under

this proposed SIP as found in 46 CFR 1.03.

If vessels choose not to participate in the SIP, these vessels

would continue to be inspected by the Coast Guard under traditional

procedures or, perhaps, opt to be inspected by a Recognized

Classification Society under the ACP.

Discussion of Proposed Rules

The Coast Guard proposes to add the SIP as an inspection

alternative for qualified U. S. documented or registered vessels. The

SIP would include inspections for certification, reinspections, and

discrepancy follow-ups. Dry-dock examinations would not be included in

the SIP. Dry-dock examinations would be conducted as prescribed by the

operational inspection subchapter in 46 CFR chapter I applicable to

each vessel. As SIP performance data is collected and evaluated by the

Coast Guard, dry-dock examinations may be added to this program.

The Coast Guard's proposed process to consider a company and at

least one of its vessels for the SIP can be broken down into four

phases as described in the following discussion.

Phase (1): Application

This phase would begin with a company's application submission to

the OCMI and end with the OCMI's acceptance or rejection of the

applicant. Illustration (1) shows the proposed process and lists the

proposed regulatory sections for each step.

BILLING CODE 4910-14-P

[[Page 17010]]

[GRAPHIC] [TIFF OMITTED] TP08AP97.021

[[Page 17011]]

[GRAPHIC] [TIFF OMITTED] TP08AP97.021

[[Page 17012]]

The applying company and at least one of its vessels would have to

meet certain eligibility requirements to be accepted in the SIP. The

proposal includes a requirement for the company to operate the vessel

for at least 3 years prior to the SIP application. This ensures that

the Coast Guard would have sufficient documentation on the vessel's

operating history to properly evaluate the company and vessel

application. The Coast Guard is proposing other eligibility

requirements that would ensure that a vessel has been operating in

compliance with Coast Guard regulations. For example, the company would

have to reconcile all overdue civil penalties or user fees and the

vessel could not have documented material deficiencies which indicate

operation outside the requirements contained in the COI. These

documented deficiencies do not apply to the provisions of deviations

from navigation safety rules (33 CFR 164.51 through 164.55) or sailing

short (46 CFR 15.725).

Phase (2): Plan Development

During this phase, the company and vessel personnel would work with

a Coast Guard SIP Advisor, who would be a qualified Coast Guard marine

inspector assigned by the OCMI as resources permit. Together they would

develop the CAP and the VAP(s), the detailed documents that would

govern how company employees would be trained and would test and

examine the vessel's systems under the SIP. Illustration (2) shows the

proposed process and lists the proposed regulatory sections for each

step.

[[Page 17013]]

[GRAPHIC] [TIFF OMITTED] TP08AP97.022

[[Page 17014]]

The Coast Guard SIP Advisor would initially help the company to

develop the CAP and first VAP. After OCMI approval, additional VAPs

would be created addressing other company vessel's and their specific

equipment and systems. Development of the CAP and VAP(s) is an

iterative process. The CAP and VAP may need to be revised to address

concerns such as vessel specific equipment or personnel training needs.

This planning phase would end with OCMI approval of all VAP(s) and any

vessels would then enter the operational evaluation phase.

Phase (3): Operational Evaluation

During this phase, a participating vessel would be operated under

its VAP and inspected by the Coast Guard SIP Advisor in accordance with

the VAP. The company would train its employees to follow procedures in

the VAP. Illustration (3) shows the proposed process and lists the

proposed regulatory sections for each step.

[[Page 17015]]

[GRAPHIC] [TIFF OMITTED] TP08AP97.023

[[Page 17016]]

After OCMI approval of the CAP and VAP(s), the company would begin

implementation of its SIP. This would be a two-step process consisting

of employee training and a SIP trial period. Company training would

provide company employees the skills they need to perform their

specific SIP responsibilities.

When the training is completed, a trial period of at least 3 months

would begin to test the effectiveness of the VAP on each vessel. During

the trial period, problems would be documented by company personnel and

the Coast Guard SIP Advisor. The company may be required to modify its

VAP procedures, if necessary.

Phase (4): Enrollment

Following a successful operational evaluation phase, the cognizant

OCMI would enroll a vessel in the SIP and authorize full implementation

of the SIP through a specific endorsement on the vessel's COI.

Illustration (4) shows the proposed process and lists the proposed

regulatory sections for each step.

[[Page 17017]]

[GRAPHIC] [TIFF OMITTED] TP08AP97.024

BILLING CODE 4910-14-C

[[Page 17018]]

Regulatory Evaluation

This proposal 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 proposal 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 proposal to provide an economic benefit to the

owners and operators of U.S. documented or registered vessels.

Currently, 11,800 U.S. documented or registered vessels may be eligible

to participate in this optional Streamlined Inspection Program (SIP).

Entrance into a SIP is voluntary. Because the program is new, it is

difficult to estimate how many vessel owners will choose to develop a

Vessel Action Plan (VAP) and seek enrollment. Some Coast Guard offices

have been working with company owners on prototype programs that are

similar to the proposed SIP.

Over the next 3 years, the Coast Guard estimates that the following

number of vessels would voluntarily enroll in the SIP:

274 small passenger vessels (subchapter T).

78 small passenger vessels (subchapter K).

48 large passenger vessels (subchapter H).

131 offshore supply vessels (subchapter L).

29 cargo vessels (subchapter I).

4 tank ships (subchapter D).

942 tank barges or oil spill response vessels (OSRVs)

(subchapter D or O).

These estimates of vessel enrollment reflect both the number of

vessels presently in prototype programs similar to the proposed SIP and

the number of vessels that could enter in the SIP within the next 3

years.

Industry Cost

Cost estimates for the proposed SIP were based on the incremental

costs company owners and operators have incurred participating in

prototype programs similar to the proposed SIP. Company owners and

operators would have different economic impacts from this program

depending on the number, class, and size of the vessels that they enter

in the program. The time and resources an owner or operator may spend

developing the VAP would vary depending on the vessel's system

complexity (simple tank barge systems or multi-faceted large passenger

vessel systems), the current company management infrastructure

(availability of support staff, system expertise and strength of

organizational policies), and the number of crewmembers or employees

involved with the plan's implementation. The company time spent

developing and implementing the VAP(s) is considered part of this

proposal's collection-of-information burden.

Under this proposal, vessel owners and operators would incur some

SIP implementation training costs. These costs reflect a slight

increase in existing crew or employee training costs to ensure

responsible personnel have the skills needed to conduct maintenance and

examinations of vessel equipment a'nd systems required by the VAP.

One small passenger vessel owner (regulated under subchapter K),

currently in a prototype program estimated that training on the VAP

took approximately 35 hours for four employees required to properly

conduct and record the tests and examinations under the VAP. Based on

an hourly salary of $16 for the trainer, and an average hourly salary

of $13 for each of the four employees, a one-time training cost is

estimated to be $2,380 for a similar passenger vessel.

A tank barge owner currently in a prototype program estimated that

training on the VAP took approximately 40 days for 16 employees

required to conduct and record examinations under the VAP. Based on an

8-hour training day, an hourly salary of $33.65 for the trainer, and an

average hourly salary of $25 for each of the employees, the training

cost is estimated to be $138,770 for a similar 200-barge fleet.

One-time training costs for vessels in the SIP is estimated to

range from $700 ($138,770 divided by a 200-simple-system fleet) to

$3,000 (for one large multi-system vessel) per vessel. Once the VAP is

approved and the vessel is enrolled in the SIP, it was assumed that any

further training would be incorporated into established company

training and vessel maintenance programs at little or no additional

cost. Therefore, recurring training costs were not included in the cost

estimates for this proposal.

Some owners and operators participating in prototype programs

purchased computers and other administrative items to assist in the

collation of plan information. While a computer could reduce the

administrative time spent on developing the VAP, a company would not be

required to have a computer in this proposal. Because a company could

meet all of the SIP criteria without a computer, no equipment costs

were included in the cost estimate for this proposal. The Coast Guard

specifically solicits comments on potential training costs or other

costs companies may incur if voluntarily enrolled in SIP.

Industry Benefits

Benefits from the proposed SIP are expected to vary and are not

currently quantifiable. Participants in prototype programs stated that

the cost to participate and maintain this type of voluntary program has

been partially offset by an increased availability of their vessels for

profit-making ventures. Some Coast Guard marine inspectors have noted

as much as a 50 percent reduction in their onboard inspection time on

vessels participating in a prototype program. Other benefits have also

been reported by prototype program participants. These participants

reported that they have experienced the following benefits:

The vessel's material condition was kept at a consistently

high level and there were fewer major repairs.

The company's cost of maintaining the vessel in regulatory

compliance was reduced and expenses were more evenly distributed over

time.

The licensed mariners recognized their role in regulatory

compliance and welcomed the empowerment to conduct the procedures

specified in the VAP.

The unlicensed crew experienced more rapid professional

growth as they were trained and became familiar with conducting the

step-by-step verification procedures.

The communication between the company and the Coast Guard

was open and problem-solving.

The vessel's working environment was better than it was

under the traditional inspection program.

There were fewer insurance claims and personnel injuries.

The vessel's maintenance records provide more information

and are better than the records the company required on its own.

There were no monetary estimates for the value of these benefits.

The Coast Guard specifically seeks comments on these potential benefits

and their value for this proposed program.

User Fees

The Coast Guard expects that once implemented, the proposed SIP

would result in fewer onboard Coast Guard inspection hours required to

inspect and

[[Page 17019]]

certify participating vessels. This proposal, however, would not change

existing vessel inspection user fees. When sufficient data exists

regarding the Coast Guard costs required to administer the new program,

the Coast Guard plans to review the existing user fee structure to

determine if a reduction in fees is warranted.

Government Costs

This proposal has short-term costs to the Coast Guard but, in the

long-term, will save resources. In the initial implementation of the

proposed SIP, Coast Guard inspectors would need to review company

applications, assist companies in plan development, and oversee the

operational implementation of the plan. The time required by this

program varies depending on the type of vessel and the current company

management infrastructure. It may take the Coast Guard as little as 3

hours to verify a tank barge company's eligibility, 18 hours to assist

in developing and reviewing its plan, and 8 hours to oversee its

operation prior to a favorable assessment of the program by the Coast

Guard marine inspector. However, the Coast Guard may take significantly

more time to assist in developing, reviewing, and overseeing the plans

and operation of a large passenger vessel because of its complex

onboard systems and the large number of company personnel involved in

managing the SIP. After the initial investment of Coast Guard resources

(time and training) to assist vessel personnel with their plans, the

Coast Guard expects to reduce the amount of time taken to inspect and

certify SIP enrolled vessels.

Small Entities

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

Coast Guard must consider whether this proposal, if adopted, will have

a significant economic impact on a substantial number of small

entities. ``Small entities'' may include (1) small businesses and not-

for-profit organizations that are independently owned and operated and

are not dominant in their fields and (2) governmental jurisdictions

with populations of less than 50,000.

The Coast Guard expects this proposal to have a positive economic

impact for owners and operators who choose to participate in the SIP.

Approximately 1,388 owners and operators may volunteer for the proposed

SIP within the next 3 years. Of these, 334 small passenger vessels, 52

offshore supply vessels, and 94 tank barges or OSRV's are estimated to

be owned by small entities. Under Section 601 of the Regulatory

Flexibility Act, the Coast Guard has provided a flexible approach which

meets the needs of each company and its vessels and would benefit any

small businesses choosing to enter the proposed program. This proposal

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

in the program.

This proposal would provide an optional way of complying with

existing inspection regulations and would only have an economic impact

if the vessel owner chooses to use the SIP instead of the existing

Coast Guard scheduled inspection program. For a small entity, plan

development may be too large an initial investment recoverable after

too long a time for them to see the benefits. To assist small entities

in plan development, the Coast Guard intends to provide detailed

guidance tailored to the small passenger vessel operator and to other

small entities that operate other vessel types. The Coast Guard

proposal also provides for one-on-one time with Coast Guard inspectors

to assist in plan development. Benefits from the proposed SIP are

expected to be especially positive to those small entities with more

than one vessel in the program because after developing the first CAP

and VAP, costs would be minimal for developing VAP(s) for the remaining

vessels.

Because this proposed program is voluntary and provides benefits to

small entities willing to invest the time and training needed for

enrollment, the Coast Guard certifies under 5 U.S.C. 605(b) that this

proposal, if adopted, will not have a significant economic impact on a

substantial number of small entities. If however, you think that your

business or organization qualifies as a small entity and that this

proposal would have a significant economic impact on your business or

organization, please submit a comment to the address under ADDRESSES

explaining why you think it qualifies and in what way and to what

degree this proposal would economically affect it.

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

will provide assistance to small entities to determine how this

proposed rule applies to them. If you are a small business and need

assistance understanding the provisions of this proposed rule please

contact CDR Mark D. Bobal, Vessel and Facility Operating Standards

Division (G-MSO-2), U.S. Coast Guard Headquarters, 2100 Second Street,

SW., Washington, DC 20593-0001, telephone (202) 267-1093.

Collection of Information

Under the Paperwork Reduction Act (44 U.S.C. 3501 et. seq.), the

Office of Management and Budget (OMB) reviews each rule that contains a

collection-of-information requirement to determine whether the

practical value of the information is worth the burden imposed by its

collection. Collection-of-information requirements include reporting,

recordkeeping, notification and other similar requirements.

This proposal contains collection-of-information requirements in

the following sections: Secs. 8.520, 8.530, 8.535, and 8.550. The

following particulars apply: DOT NO: 2115-AF37.

OMB Control No(S).: 2115-0578, 2115-0592, 2115-0071, 2115-0025.

Administration: U.S. Coast Guard.

Title: 2115-0578: Various forms and posting requirements under 46

CFR chapter I, subchapters K and T ``Small Passenger Vessels (under 100

gross tons).''

2115-0592: 46 CFR chapter I, subchapter L--Reporting, Recordkeeping

and Marking Requirements.

2115-0071: Official Logbook.

2115-0025: Oil Record Book for Ships.

Need for Information: Vessel records are needed to document the

compliance of a vessel with U.S. regulations and law. Company owners or

operators wishing to enroll their vessel(s) in the program must submit

the application(s), develop the Vessel Action Plan(s), and keep records

on plan activities conducted by designated company employees.

Proposed Use of Information: The information would be used by the

Coast Guard during vessel inspections to help determine if the vessel

is in compliance with the requirements necessary for issuance of a

certificate of inspection (COI).

Frequency of Response: Records must be kept and reports must be

submitted whenever the company representative performs activities

required by the VAP. These activities generally include a crew member

or company employee completing a checklist for each onboard system on a

monthly or quarterly basis, depending on the system and the VAP.

Estimates of the increase in the collection burden differ based on the

vessel's type, the company's existing operational guides and internal

inspection documents (if any), and the vessel system knowledge of those

company personnel assigned to write the plan. The development of the

VAP

[[Page 17020]]

would be a one-time collection burden. Recurring collection burdens

would be created when company employees keep records of their

activities to ensure the plan is being followed. Based on prototype

programs similar to the proposed SIP, the following collection burdens

are estimated for each vessel type:

Small passenger vessel (subchapter T): Vessel Action Plan

development: 70 hours. Annual report time after plan approval: 9 hours

in addition to current collections under 2115-0578.

Small passenger vessel (subchapter K): Vessel Action Plan

development: 100 hours. Annual report time after plan approval: 12

hours in addition to current collections under 2115-0578.

Large passenger vessel (subchapter H):

Vessel Action Plan development: 100 hours.

Annual report time after plan approval: 14 hours in addition to

current collections under 2115-0071.

Offshore supply vessel (subchapter L):

Vessel Action Plan development: 60 hours.

Annual report time after plan approval: 18 hours in addition to

current collections under 2115-0592.

Cargo vessel (subchapter I):

Vessel Action Plan development: 80 hours.

Annual report time after plan approval: 14 hours in addition to

current collections under 2115-0071.

Tank Ship (subchapter D):

Vessel Action Plan development: 100 hours.

Annual report time after plan approval: 16 hours in addition to

current collections under 2115-0071.

Tank Barge and Oil Spill Response Vessel (subchapter D):

Vessel Action Plan development: 40 hours.

Annual report time after plan approval: 3 hours in addition to

current collections under 2115-0025.

Burden Estimate: The Coast Guard is seeking an authorized increase

in the collection-of-information burden for the following existing OMB

control numbers:

2115-0578: From 405,608 burden hours to 416,869 hours.

2115-0592: From 2,051 burden hours to 51,467 hours.

2115-0071: From 1,750 burden hours to 5,018 hours.

2115-0025: From 10,418 burden hours to 49,559 hours.

Respondents: The number of respondents for each collection will be

amended as follows:

2115-0578: Remains the same.

2115-0592: Increases from 45 respondents to 528 respondents.

2115-0071: Remains the same.

2115-0025: Increases from 586 respondents to 2,516 respondents.

Form(s): None.

Average Burden Hours per Respondent: Those respondents voluntarily

enrolled in the SIP would have an increased average burden hour per

respondent as follows:

From 41 hours to 76 hours per respondent for 2115-0578.

From 46 hours to 78 hours per respondent for 2115-0592.

From 5 hours to 46 hours per respondent for 2115-0071.

From 18 hours to 33 hours per respondent for 2115-0025.

The Coast Guard has submitted the proposed requirements to the OMB

for review under section 3504(h) of the Paperwork Reduction Act (44

U.S.C. 3501 et seq.). Persons submitting comments on the requirements

should submit their comments both to OMB and the Coast Guard where

indicated under ADDRESSES.

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

delegated to the Coast Guard by statute. Furthermore, because 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

would preempt State action addressing the same matter.

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.

List of Subjects in 46 CFR Part 8

Administrative practice and procedures, Organization and functions

(Government agencies), Reporting and recordkeeping requirements,

Incorporation by reference.

For the reasons set out in the preamble, the Coast Guard proposes

to amend 46 CFR part 8 as follows:

PART 8--VESSEL INSPECTION ALTERNATIVES

1. The authority citation for part 8 is revised to read as follows:

Authority: 46 U.S.C. 3103, 3306; 46 U.S.C. 3316, 3703; 49 CFR

1.45.

2. Subpart E, consisting of Secs. 8.500 through 8.570, is added to

read as follows:

Subpart E--Streamlined Inspection Program

Sec.

8.500 Purpose.

8.505 Scope and applicability.

8.510 Definitions.

8.515 Eligibility.

8.520 Application.

8.525 OCMI review and action.

8.530 Plan development and approval.

8.535 Training and operational evaluation.

8.540 Enrollment in SIP.

8.545 Scope of inspection for enrolled vessels.

8.550 Plan review and revisions.

8.555 Disenrollment.

8.560 Waiver.

8.565 Appeal.

8.570 Interim approval of prototype company or vessel plans.

Subpart E--Streamlined Inspection Program

Sec. 8.500 Purpose.

(a) This subpart establishes the Streamlined Inspection Program

(SIP) which is an alternative inspection program for U.S. documented or

registered vessels required to maintain a valid certificate of

inspection (COI).

(b) This subpart sets out the eligibility and application

requirements and the plan development and approval procedures for

enrollment of companies and their vessels in the SIP.

Sec. 8.505 Scope and applicability.

(a) This subpart applies to U.S. documented or registered vessels

that have a valid COI.

(b) A vessel enrolled in the SIP will be inspected in accordance

with its approved Vessel Action Plan (VAP).

(c) The SIP includes all inspections required to renew and maintain

a valid COI. The SIP does not include dry-dock examinations,

unscheduled inspections related to vessel casualties, equipment repair

or replacement, or vessel modifications. Those inspections will be

conducted in accordance with the subparts applicable to the vessel.

Sec. 8.510 Definitions.

The following definitions apply to this subpart:

[[Page 17021]]

Civil penalty means a final assessment under the provisions of 33

CFR part 1, subpart 1.07 or part 20 of this chapter.

Coast Guard SIP Advisor means the Coast Guard marine inspector

assigned by the Officer in Charge, Marine Inspection (OCMI), to assist

in the development of an action plan.

Company means the owner of the vessel or any other organization or

person, such as the manager or the bareboat charterer, who operates a

vessel under the SIP.

Company Action Plan (CAP) means the document describing a company's

organization, policies, and responsibilities required for participation

in the SIP.

Company SIP Agent means the individual who is responsible for the

Company Action Plan and the Vessel Action Plan development and

implementation and who has the authority to bind the company to the

terms of these plans.

Correction Report means a document which sets out specific vessel

deficiencies and is used to record their correction by the company.

Documented deficiency means an incident documented in a Coast Guard

record in which the condition of a vessel, its equipment, or its

operation was not in compliance with Coast Guard regulations.

Exam checklist means the form that is used to record the periodic

examinations required by the VAP to be conducted by company employees.

Inspection Criteria References (ICR) means the individual pages in

the VAP that list each item on the vessel required by regulation to be

periodically inspected.

Inspection Schedule and Verification (ISV) means the document that

lists the items to be inspected and the intervals for their inspection,

and on which is recorded the completion of required examinations and

tests conducted by designated company employees.

Prototype vessel plan means the SIP plan developed for a vessel

participating in a Coast Guard District- or OCMI-endorsed SIP before

[Date of publication of the final rule in the Federal Register].

Reportable casualty means a marine casualty or accident required to

be reported under 46 CFR part 4, subpart 4.05 of this chapter.

Streamlined Inspection Program (SIP) means the alternative

inspection program set out in this subpart.

Vessel Action Plan (VAP) means the document that prescribes

procedures for maintenance, examination, and inspection of a vessel

enrolled in the SIP.

Sec. 8.515 Eligibility.

(a) The company must--

(1) Have owned or operated at least one U.S. documented or

registered vessel for a minimum of 3 consecutive years before the SIP

application date; and

(2) Have paid all civil penalties and user fees.

(b) Each vessel must--

(1) Have been in operation with an eligible owner or operator for

at least 3 consecutive years before the SIP application date;

(2) Have had no revocation of its COI during the 3 years before the

SIP application date; and

(3) Have no documented deficiency for the following in the 3 years

before the SIP application date:

(i) Any vessel operation inconsistent with the operating details

specified on its COI.

(ii) Operating without the required amount of lifesaving appliances

on board the vessel or with inoperable survival craft.

(iii) Operating without the required firefighting equipment on

board the vessel or with an inoperable fire pump(s).

(iv) Unauthorized modifications to the vessel's approved systems or

structure, such as fixed firefighting systems, pollution prevention

arrangements, overcurrent protection devices, or watertight boundary

arrangements.

(v) Operating without the required navigation equipment on board

the vessel or with inoperable navigation equipment.

Sec. 8.520 Application.

To apply for SIP enrollment, a company will submit an application,

in writing, to the cognizant OCMI. The application must contain the

following:

(a) A statement that the company and prospective vessel(s) meet the

requirements of Sec. 8.515.

(b) A summation of the company's current status in relation to

Sec. 8.530(a).

(c) The name and official number of the vessel(s) the company

intends to enroll in the SIP.

(d) The name and contact information for the Company SIP Agent.

Sec. 8.525 OCMI review and action.

(a) The cognizant OCMI will review Coast Guard records for the 3

years before the SIP application date to verify the eligibility of the

company and each vessel listed in the SIP application.

(b) If the company and one or more of its vessels meets the

eligibility requirements contained in Sec. 8.515, the cognizant OCMI

will notify the company of its eligibility and assign a Coast Guard SIP

Advisor.

(c) If, according to Coast Guard records, a company or vessel does

not meet the eligibility requirements contained in Sec. 8.515, the

cognizant OCMI will notify the company in writing of its ineligibility

with a list the reasons for not accepting the company or a vessel.

Sec. 8.530 Plan development and approval.

The Company SIP Agent will develop the CAP and VAP with guidance

from the Coast Guard SIP Advisor for OCMI approval.

(a) Company Action Plan. The CAP shall include at least the

following:

(1) A copy of the OCMI CAP approval letter (once the CAP is

approved).

(2) An organization commitment statement.

(3) A company organization chart that includes the name(s) of the

designated SIP support personnel who will be responsible for

implementation and oversight of the approved CAP and VAP(s).

(4) A statement describing the responsibilities and authorities of

personnel involved in the examination and maintenance of the vessel(s)

for the company.

(5) A description of the method the company will use to integrate

the applicable subpart regulations into its SIP and the method or

system used to initiate corrective action.

(6) A description of the company's safety program.

(7) A description of the company's environmental protection

program.

(8) A description of the company's training infrastructure, the

method used to track and record training for individual employees, and

the training required for the designated SIP support personnel to

implement the CAP and the VAP.

(9) A master list of all SIP documents and ICRs that the company

intends to use in its VAP(s).

(10) Appendices for each approved VAP.

(b) Vessel Action Plan. Each VAP shall include at least the

following:

(1) A copy of the OCMI VAP approval letter (once the VAP is

approved).

(2) A description of the method that will be used to integrate the

VAP into the vessel's regular operations.

(3) Vessel-specific ICRs.

(4) Vessel-specific ISV forms.

(5) Vessel-specific exam checklists.

(6) Correction Reports.

(c) Plan Approval. The Company SIP Agent will submit the CAP and

each VAP to the cognizant OCMI for approval. Once approved, a copy of

the VAP shall be kept on board the vessel.

[[Page 17022]]

Sec. 8.535 Training and operational evaluation.

When the CAP and VAP(s) have been approved by the cognizant OCMI,

the company may begin training and operating under the plans. This

evaluation phase includes the following:

(a) The company shall provide the designated SIP support personnel

with training as required by the CAP.

(b) The vessel must operate and be examined under the VAP for a

period of at least 3 months.

(c) During the operational periods, the Coast Guard SIP Adviser

will conduct an ongoing evaluation of the vessel's operation, the

training records, and the ability of all designated persons to perform

their assigned functions under the VAP. The Coast Guard SIP Advisor

will report periodically to the cognizant OCMI and the Company SIP

Agent on the vessel's performance, and make recommendations, if needed.

(e) Revisions recommended under paragraph (c) of this section, or

any additional operational periods under a revised CAP or VAP as may be

required by the cognizant OCMI must be completed prior to enrollment.

Sec. 8.540 Enrollment in SIP.

Upon recommendation of the Coast Guard SIP Advisor, the OCMI may

issue an enrollment letter to a vessel and endorse the vessel's COI to

reflect SIP enrollment. Subsequent inspections covered under this

subpart will be conducted in accordance with the approved VAP.

Sec. 8.545 Scope of inspection for enrolled vessels.

(a) A Coast Guard marine inspector will conduct required annual and

follow-on inspections necessary to ensure compliance with Coast Guard

regulations.

(b) A Coast Guard marine inspector will conduct the inspections in

paragraph (a) of this section in accordance with the procedures set out

in the VAP. These inspections will normally include the following:

(1) Administrative review. This portion of the inspection consists

of a review of prior Coast Guard SIP inspection forms, review of the

contents of the VAP, and review of other certifications of equipment

and vessel systems.

(2) SIP performance review. This portion of the inspection consists

of a review of vessel SIP documentation and records, review of the SIP

procedures, and a company evaluation of their SIP.

(3) Materiel review. This portion of the inspection consists of a

general examination of the vessel, witnessing the examination of

selected items under the VAP by company designated SIP support

personnel, inspection of selected items, and witnessing of crew

participation in drills by the Coast Guard marine inspector.

(4) Conclusion and recommendations. This portion of the inspection

contains the Coast Guard marine inspector's evaluation of regulatory

compliance of the vessel under its VAP.

(c) A Coast Guard marine inspector may conduct any additional tests

or examinations of vessel equipment or systems necessary to ensure

compliance with Coast Guard regulations during an inspection covered in

paragraph (a) of this section.

Sec. 8.550 Plan review and revisions.

(a) Mandatory reviews and revisions. The CAP and VAP(s) must be

reviewed and revised as follows:

(1) Every 2 years after the plan approval date, the company shall

review the CAP and update all information required by Sec. 8.530.

(2) Every 5 years after the plan approval date, the Coast Guard SIP

Advisor and the Company SIP Agent will review the VAP.

(3) If a reportable casualty occurs, the cognizant OCMI will review

the portions of the VAP related to equipment, training, personnel, and

systems involved in the casualty and determine whether revisions to the

VAP are appropriate.

(4) When statutes or regulations change, the appropriate sections

of the CAP and VAP(s) will be revised.

(b) Discretionary reviews and revisions. The CAP and VAP(s) may be

reviewed and revised by the company at any time. The revisions must be

submitted to the cognizant OCMI for approval.

Sec. 8.555 Disenrollment.

(a) Voluntary disenrollment. A company may request SIP

disenrollment (which includes all of its vessels) or may request

disenrollment of a specific vessel from the SIP by writing to the

cognizant OCMI. The OCMI will then issue a letter disenrolling the

vessel or company. Disenrolled vessels will be inspected in accordance

with the requirements of 46 CFR part 2, subpart 2.01 of this chapter.

(b) Company disenrollment. The OCMI may issue a letter disenrolling

the company if the company no longer has at least one enrolled vessel

or if the company fails to continuously meet the eligibility

requirements in Sec. 8.515.

(c) Vessel disenrollment. The OCMI may issue a letter disenrolling

a vessel if any one or more of the following occurs:

(1) The sale of the vessel.

(2) A finalized letter of warning or assessment of a civil penalty

for--

(i) Operating outside the scope of the vessel's COI or Stability

Letter;

(ii) Not reporting a personnel or material casualty required to be

reported under 46 CFR part 4; or

(iii) A material deficiency listed in Sec. 8.515(b)(3).

Sec. 8.560 Waiver.

(a) A Coast Guard District Commander may waive any requirement of

this subpart--

(1) If good cause exists for granting a waiver; and

(2) If the safety of the vessel and those on board will not be

adversely affected.

(b) Requests for waiver of any requirement of this subpart must be

submitted in writing to the cognizant OCMI for review before forwarding

to the Coast Guard District Commander for action.

(c) A copy of each waiver under this section shall be maintained at

all times in the VAP.

Sec. 8.565 Appeal.

A company may appeal any decision or action taken under this

subpart in accordance with 46 CFR part 1, subpart 1.03 of this chapter.

Sec. 8.570 Interim approval of prototype company or vessel plans.

(a) A company operating under an approved prototype company or

vessel plan must apply, in writing by [Date 3 months after the

effective date of the final rule], to the cognizant OCMI for approval

to continue operating under the plans while revisions are developed to

bring the prototype company or vessel plan into conformance with this

subpart. The OCMI may approve the request for a period of up to 3

years.

(b) A company that does not request approval as required by

paragraph (a) of this section or does not obtain approval to continue

operating under a prototype company or vessel plan by [Date 6 months

after the effective date of the final rule], may no longer operate

under the plans and will be inspected in accordance with the

requirements of 46 CFR part 2, subpart 2.01 of this chapter.

Dated: March 21, 1997.

J.C. Card,

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

and Environmental Protection.

[FR Doc. 97-8509 Filed 4-7-97; 8:45 am]

BILLING CODE 4910-14-M