Administrative Waivers of the Coastwise Trade Laws for Eligible Vessels

DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 388

[Docket No. MARAD-1999-5915]

RIN 2133-AB39

Administrative Waivers of the Coastwise Trade Laws for Eligible

Vessels

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Maritime Administration (MARAD, or we, our or us) is

seeking public comment on a proposed rule to implement Title V of the

Coast Guard Authorization Act of 1998. The new law authorizes the

Secretary of Transportation to waive the U.S.-build and other

requirements of the Passenger Services Act and Section 27 of the

Merchant Marine Act, 1920, for eligible vessels to be documented with

appropriate endorsement for employment in the coastwise trade as small

passenger vessels or uninspected passenger vessels authorized to carry

no more than 12 passengers for hire. This administrative process will

improve the responsiveness of the Federal Government in meeting the

needs of many vessel-operating small businesses.

DATES: You should submit your comments early enough to ensure that

Docket Management receives them not later than September 7, 1999.

ADDRESSES: You should mention the docket number that appears at the top

of this document. You should submit your written comments to the Docket

Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400

7th St., SW, Washington, DC 20590. Comments may also be submitted by

electronic means via the Internet at http://dmses.dot.gov/submit/. All

comments will become part of this docket. You may call Docket

Management at (202) 366-9324. You may visit the docket room to inspect

and copy comments at the above address between 10 a.m. and 5 p.m., EDT.

Monday through Friday, except Federal holidays. An electronic version

of this document is available on the World Wide Web at http://

dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: You may call Michael Hokana, Office of

Ports and Domestic Shipping, Maritime Administration, at (202) 366-

0760, or you may write to him at the following address: MAR-832 Room

7201, 400 Seventh Street, SW, Washington, DC 20590.

SUPPLEMENTARY INFORMATION: By this notice of proposed rulemaking, MARAD

seeks public comment on an implementation plan for its Small Passenger

Vessel Waiver Administration Program and related information collection

requirements. Title V of the Coast Guard Authorization Act of 1998

(Public Law 105-383) authorizes the Secretary of Transportation to

grant waivers of certain requirements for the smallest of passenger

vessels (those carrying twelve or fewer passengers) to operate in the

coastwise trade.

Within the Department of Transportation there are two agencies with

responsibilities related to the coastwise trade laws. The Coast Guard

issues the vessel documents and endorsements that authorize vessels to

engage in the coastwise trade. However, the Secretary of Transportation

has delegated to MARAD the authority to process applications for

waivers of the coastwise laws and to determine the effect of waivers of

the coastwise trade laws on United States vessel builders and United

States-built vessel coastwise trade businesses. We are outlining the

procedures to be followed in processing applications for waivers, or

revoking waivers previously granted. Upon grant of a waiver, MARAD will

notify the applicant and the Coast Guard. Thereafter, you may register

the vessel so waived with the Coast Guard under the Coast Guard's

normal procedures, provided the vessel is otherwise eligible.

Vessels eligible for a waiver of the coastwise trade laws will be

limited to foreign-built or foreign rebuilt small passenger vessels and

uninspected passenger vessels as defined by section 2101 of Title 46,

United States Code. Additionally, vessels requested for consideration

must be greater than three (3) years old. We will not grant waivers in

instances where such waiver activity will have an unduly harmful impact

on U.S. shipyards or U.S.-flag ship operators. Specifically, and in

order to meet the public comment provisions of Title V, it is our

intention to publish waiver requests for comment in the Federal

Register. After a period of time to evaluate comments and assess the

impact that the proposed waivers will have on the U.S.-flag shipping

and shipbuilding industry, we will issue a determination.

In assessing the adverse effect of grant of a particular waiver, we

may consider sales of vessels of the same type and size and for the

same trade by domestic shipbuilders. As an example, the grant of a

waiver for a motor vessel might not have an adverse effect on sales by

a builder of sailboats. As for adverse effects on coastwise trade

businesses, we may look at the type of service and geographic location

of the applicant and the objector. An intended service providing day

trips for whale watching might not affect a service providing weeklong

trips on a sailing ship. A charter service in Maine might not affect a

charter service in California. Each decision will be made on the facts

of the individual circumstances, including the degree of competition in

a proposed market.

We do not have the authority to waive citizenship requirements for

vessel ownership and documentation. The Coast Guard will ascertain

whether the shipowner is qualified as a citizen to register a vessel.

In addition, the Coast Guard, not MARAD, will determine whether a

particular vessel will be considered a small passenger vessel or an

uninspected passenger vessel. However, we may refuse to process an

application if the vessel is not the type eligible for a waiver.

Prospective applicants for a coastwise trade law waiver may wish to

consult with the Coast Guard prior to initiating the waiver application

process with MARAD.

Under Title V, MARAD also has the authority to revoke coastwise

endorsements under the limited circumstances where a foreign-built or

foreign-rebuilt passenger vessel, previously allowed into service,

substantially changes that service and the vessel is employed other

than as a small passenger vessel or an uninspected passenger vessel and

the vessel is having an unduly harmful impact on U.S. vessel builders

or persons who employ U.S.-built vessels in the domestic trade. The

procedure for revocation of a MARAD waiver will include the publication

of a notice in the Federal Register seeking public comments on the

proposed revocation. Secondly, we will determine the extent of the

allegedly detrimental activity and, if an undue impact is found, we

will issue a formal letter of waiver revocation with an appropriate

grace period. This determination will be sent to the Coast Guard for

revocation of the vessel's coastwise endorsement.

MARAD's decisions to grant or deny a waiver and to revoke or not

revoke a waiver will not be final until after time for review has

expired. Applicants and persons who submitted comments in response to a

Federal Register notice may petition the Maritime Administrator to

review a waiver determination, or request the Maritime Administrator

not to review a waiver determination. Relatively short time periods are

provided for this review process.

Comments

How Do I Prepare and Submit Comments?

Your comments must be written and in English. To ensure that your

comments are correctly filed in the Docket, please include the docket

number that appears at the top of this document in your comments. We

encourage you to write your primary comments in a concise fashion.

However, you may attach necessary additional documents to your

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comments. There is no limit on the length of the attachments. Please

submit two copies of your comments, including the attachments, to

Docket Management at the address given above under ADDRESSES. Comments

may also be submitted by electronic means via the Internet at http://

dmses.dot.gov/submit/.

How Can I Be Sure That My Comments Were Received?

If you wish Docket Management to notify you upon its receipt of

your comments, enclose a self-addressed, stamped postcard in the

envelope containing your comments. Upon receiving your comments, Docket

Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

If you wish to submit any information under a claim of

confidentiality, you should submit three copies of your complete

submission, including the information you claim to be confidential

business information, to the Chief Counsel, Maritime Administration,

MAR-220, 400 7th Street, SW, Washington, DC 20590. In addition, you

should submit two copies, from which you have deleted the claimed

confidential business information, to Docket Management at the address

given above under ADDRESSES. When you send comments containing

information claimed to be confidential business information, you should

include a cover letter setting forth with specificity the basis for any

such claim.

Will The Agency Consider Late Comments?

We will consider all comments that Docket Management receives

before the close of business on the comment closing date indicated

above under DATES. To the extent possible, we will also consider

comments that Docket Management receives after that date. If Docket

Management receives a comment too late for us to consider it in

developing a final rule, we will consider that comment as an informal

suggestion for future rulemaking action.

How Can I Read the Comments Submitted by Other People?

You may read the comments received by Docket Management at the

address given above under ADDRESSES. The hours of the Docket Room are

indicated above in the same location. You may also see the comments on

the Internet. To read the comments on the Internet, take the following

steps: Go to the Docket Management System (DMS) Web page of the

Department of Transportation (http://dms.dot.gov/). On that page, click

on ``search.'' On the next page (http://dms.dot.gov/search/), type in

the four-digit docket number shown at the beginning of this document.

Example: If the docket number were ``MARAD-1999-1234,'' you would type

``1234.'' After typing the docket number, click on ``search.'' On the

next page, which contains docket summary information for the docket

that you selected, click on the desired comments. You may download the

comments.

Please note that even after the comment closing date, we will

continue to file relevant information in the Docket, as it becomes

available. Further, some people may submit late comments. Accordingly,

we recommend that you periodically check the Docket for new material.

May I Comment on MARAD?s Use of Plain Language?

This NPRM is one of our first published rulemaking documents under

the plain language directives. We welcome any comments and suggestions

on the use and effectiveness of plain language techniques in this

document or other suggestions on improving our use of plain language.

Rulemaking Analysis and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

This proposed rule is not significant according to the Regulatory

Policies and Procedures of the Department of Transportation (44 FR

11034; February 26, 1979). This rule is not an economically significant

regulatory action under section 3(f) of E.O. 12866, because it would

not have an effect on the economy of $100 million or more. We do not

anticipate that a preliminary regulatory evaluation will be prepared.

Federalism

MARAD has analyzed this notice of proposed rulemaking in accordance

with the principles and criteria contained in Executive Order 12612 and

has determined that it would not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment.

Regulatory Flexibility Act

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

must consider whether a notice of proposed rulemaking would have a

significant economic impact on a substantial number of small entities.

Based on a review of this proposed rule, MARAD certifies that this

proposed rule will not have a significant economic impact on a

substantial number of small entities because this regulation does not

impose any significant burdens on small entities, and we do not expect

that a substantial number of small entities will be applicants.

Environmental Assessment

This rule would not significantly affect the environment because

the small number and small size of vessels admitted to U.S. registry

under this waiver program would have little or no effect on the

environment. Accordingly, an Environmental Impact Statement is not

required under the National Environmental Policy Act of 1969.

Paperwork Reduction Act

This proposed rulemaking establishes a new requirement for the

collection of information. The Office of Management and Budget (OMB)

will be requested to review and approve the information collection

requirements under the Paperwork Reduction Act of 1995 (44 U.S.C.

Sec. 3501, et seq.).

In accordance with the Paperwork Reduction Act this document

announces MARAD's intentions to request approval for three years of

information collection to allow processing of applications for waivers.

Copies of this request may be obtained from the Division of Domestic

Shipping at MAR-832 Room 7201, 400 7th Street, SW, Washington, DC

20590.

Title of Collection: Application for Waiver of the Coastwise Trade

Laws for Small Passenger Vessels, 46 CFR Part 388.

Type of Request: New request for information collection.

OMB Control Number: 2133-NEW.

Form Number: None.

Expiration Date of Approval: Three years following approval by the

Office of Management and Budget.

Summary of Collection of Information: Persons desiring waiver of

the coastwise trade laws affecting small passenger vessels will be

required to file a written application. No form or particular format

will be required for the application. However, a minimal amount of

information about the applicant and the vessel proposed for a waiver

will be necessary to properly make the determinations required to grant

a waiver.

Need for and Use of the Information: The information collected will

be used to process applications for waiver of the coastwise trade laws

for small passenger vessels. Without the information it would be

impossible to know who wants a waiver and whether they qualify for a

waiver.

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Description of Respondents: Owners of small passenger vessels.

Annual Responses: Responses will be a one-time requirement of up to

approximately 100 respondents per year.

Annual Burden: 100 hours.

Unfunded Mandates Reform Act

This proposed rule does not impose unfunded mandates under the

Unfunded Mandates Reform Act of 1995. It does not result in costs of

$100 million or more to either State, local, or tribal governments, in

the aggregate, or to the private sector, and is the least burdensome

alternative that achieves the objectives of the rule.

Consultation and Coordination with Indian Tribal Governments

MARAD believes that regulations evolving from this NPRM would have

no significant or unique effect on the communities of Indian tribal

governments when analyzed under the principles and criteria contained

in Executive Order 13084 (Consultation and Coordination with Indian

Tribal Governments). Therefore, the funding and consultation

requirements of this Executive Order would not apply. Nevertheless,

this NPRM specifically requests comments from affected persons,

including Indian tribal governments, as to its potential impact.

Impact on Business Processes and Computer Systems (Year 2000)

Many computers that use two digits to keep track of dates may, on

January 1, 2000, recognize ``double zero'' not as 2000 but as 1900.

This glitch, the Year 2000 problem, could cause computers to stop

running or start generating erroneous data. The Year 2000 problem poses

a threat to the global economy in which Americans live and work. With

the help of the President's Council on Year 2000 Conversion, Federal

agencies are reaching out to increase awareness of the problem and to

offer support. We do not want to impose new requirements that would

mandate business process changes when the resources necessary to

implement those requirements would otherwise be applied to the Year

2000 problem.

This NPRM does not propose business process changes or require

modification to computer systems. Because the NPRM apparently does not

affect organizations' ability to respond to the Year 2000 problem, we

do not intend to delay the effectiveness of the proposed requirements

in the NPRM.

Regulation Identifier Number (RIN)

A regulation identifier number (RIN) is assigned to each regulatory

action listed in the Unified Agenda of Federal Regulations. The

Regulatory Information Service Center publishes the Unified Agenda in

April and October of each year. The RIN number contained in the heading

of this document can be used to cross-reference this action with the

Unified Agenda.

List of Subjects in 46 CFR Part 388

Administrative practice and procedure, Maritime carriers, Passenger

vessels, Reporting and recordkeeping requirements.

Accordingly, the Maritime Administration proposes to add a new Part

388 to 46 CFR chapter II, subchapter J, to read as follows:

PART 388--ADMINISTRATIVE WAIVERS OF THE COASTWISE TRADE LAWS

Sec.

388.1 Purpose.

388.2 Definitions.

388.3 Applications; fees.

388.4 Criteria for grant of a waiver.

388.5 Criteria for revocation of a waiver.

388.6 Process.

388.7 Sunset provision.

Authority: 46 App. U.S.C. 1114(b); Public Law 105-383, 112 Stat.

3445 (46 U.S.C. 12106 note); 49 CFR 1.66.

Sec. 388.1 Purpose.

This part prescribes regulations implementing the provisions of

Title V of Public Law 105-383, 112 Stat. 3445, which grants the

Secretary of Transportation authority to review and approve

applications for waiver of the coastwise trade laws to allow the

carriage of no more than twelve passengers for hire on vessels, which

are three years old or more, built or rebuilt outside the United

States, and grants authority for revocation of those waivers.

Sec. 388.2 Definitions.

For the purposes of this part:

(a) Coastwise Trade Laws include:

(1) The Coastwise Endorsement Provision of the Vessel Documentation

Laws, (46 U.S.C. 12106);

(2) The Passenger Services Act, section 8 of the Act of June 19,

1886 (46 App. U.S.C. 289); and

(3) The Jones Act, section 27 of the Merchant Marine Act, 1920 (46

App. U.S.C. 883).

(b) Eligible Vessel means a vessel of five or more tons that is

either a small passenger vessel or an uninspected passenger vessel

that--

(1) Was not built in the United States and is at least 3 years of

age; or

(2) If rebuilt, was rebuilt outside the United States at least 3

years before the certification requested would become effective.

(c) Secretary means the Secretary of Transportation.

(d) The terms, small passenger vessel, uninspected passenger vessel

and passenger for hire have the meaning given such terms by section

2101 of title 46, United States Code.

Sec. 388.3 Applications; fees.

(a) You may apply in writing to the Secretary, Maritime

Administration (MARAD), MAR-120 Room 7210, 400 7th St., SW, Washington,

DC 20590, for an administrative waiver of the coastwise laws of the

United States for an Eligible Vessel to carry no more than twelve

passengers for hire. The application need not be in any particular

format, but must be signed and contain the following information:

(1) Name of vessel and owner for which waiver is requested.

(2) Size, capacity and tonnage of vessel (state whether tonnage is

measured pursuant to 46 U.S.C. 14502, or otherwise, and if otherwise,

how measured).

(3) Intended use for vessel, including geographic region of

intended operation and trade.

(4) Date and place of construction and (if applicable) rebuilding.

(If applicant is unable to determine origins of vessel, foreign

construction will be assumed).

(5) Name, address, and telephone number of applicant and vessel

owner (if different from applicant).

(6) A statement on the impact this waiver will have on other

commercial passenger vessel operators, including a statement describing

the operations of existing operators.

(7) A statement on the impact this waiver will have on U.S.

shipyards.

(b) You must enclose an application fee for each waiver requested,

in the form of a check for $300, made out to the order of ``Treasurer

of the United States.''

Sec. 388.4 Criteria for grant of a waiver.

(a) General criteria. (1) A waiver of the foreign build and/or

foreign rebuild prohibition in the coastwise trade laws will be granted

for an Eligible Vessel if we determine that the employment of the

vessel in the coastwise trade will not unduly adversely affect--

(i) United States vessel builders; or

(ii) The coastwise trade business of any person who employs vessels

built in the United States in that business.

(2) We may evaluate the expected impact of the proposed waiver on

the basis of the information received from

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all sources, including public comment, internal investigation and

analysis, and any other sources of information deemed appropriate.

(b) Impact on U.S. shipbuilders. We may use the following criteria

to determine the effect on U.S. shipbuilders: Whether a potentially

impacted U.S. vessel builder has a history of construction of similar

vessels, or can demonstrate the capability and capacity to build a

similar vessel, for use in the same geographic region of the United

States, as the proposed vessel of the applicant.

(c) Impact on coastwise trade operators. We may use the following

criteria to determine the effect on existing operators of U.S.-built

vessels in coastwise trade:

(1) Whether the proposed vessel of the applicant and the vessel(s)

of an existing operator(s) (or the vessel(s) of an operator that can

demonstrate it has taken definite steps to begin operation):

(i) Are of similar size;

(ii) Are of similar characteristics;

(iii) Would provide similar commercial service; and

(iv) Would operate in the same geographic area.

(2) The number of similar vessels operating or proposed to operate

in the same market with the same or similar itinerary, relative to the

size of the market.

Sec. 388.5 Criteria for revocation of a waiver.

(a) We may revoke a waiver previously granted under this part if we

determine that the employment of the vessel in the coastwise trade has

substantially changed since the issuance of the endorsement, and--

(1) The vessel is employed other than as a small passenger vessel

or an uninspected passenger vessel; or

(2) The employment of the vessel unduly adversely affects--

(i) United States vessel builders; or

(ii) The coastwise trade business of any person who employs vessels

built in the United States.

(b) We may evaluate the effects of the employment of the waived

vessel in the coastwise trade on the basis of the information received

from all sources, including public comment, internal investigation and

analysis, and any other sources of information deemed appropriate.

Sec. 388.6 Process.

(a) Initial process. We will review each application for

completeness as received. We will notify the applicant if additional

information is necessary or if the application does not meet the

initial eligibility requirements for a waiver. All applications that

pass the initial screening will be available for public inspection in

the Department of Transportation Docket Room following publication in

the Federal Register. We will publish a notice of such applications in

the Federal Register. Interested parties will be given an opportunity

to comment on whether introduction of any of the proposed vessels would

adversely affect them. In the absence of duly filed objections to an

application, and in the absence of undue market impact on vessel

operators or vessel builders otherwise discovered by us, we will assume

that there will be no adverse effect. If an objection to an application

is received, additional information may be sought from the objector.

The applicant will be given a sufficient amount of time to respond. The

Director, Office of Ports and Domestic Shipping, will then either make

a decision based on the written submissions and all available

information or may, as a matter of discretion, hold a hearing on the

application. The decision will be communicated to the applicant,

commenters and the Coast Guard. If the Maritime Administration grants a

waiver, the applicant must thereafter contact the Coast Guard to obtain

the necessary documentation for domestic operation, provided the vessel

and its owner otherwise qualify.

(b) Revocation. We may, upon the motion of an interested party, or

upon our own motion, publish a notice in the Federal Register proposing

to revoke a waiver granted under this part. We may request additional

information from any respondent to the notice. The Director, Office of

Ports and Domestic Shipping, will then either make a decision based on

the written submissions and additional publicly available information

or may, as a matter of discretion, refer the request for revocation to

a hearing. The Maritime Administration will communicate its decision to

the applicant and the Coast Guard. If MARAD revokes a waiver, the Coast

Guard shall revoke the vessel's coastwise endorsement.

(c) Review of determinations. (1) The decisions by the Director,

Office of Ports and Domestic Shipping, to grant a waiver, deny a waiver

or revoke a waiver will not be final until after time for discretionary

review by the Maritime Administrator has expired. Applicants and

persons who submitted comments in response to a Federal Register notice

may petition the Maritime Administrator to review a waiver, waiver

denial, or waiver revocation within five (5) days of such

determination. Each petition for review should state the petitioner's

interest and the reasons review is being sought, clearly pointing out

any alleged errors of fact or misapplied points of law. Within three

(3) days of submission of a petition for review, applicants for a

waiver and persons who submitted comments in response to a Federal

Register notice may request the Maritime Administrator not to review a

waiver, waiver denial or waiver revocation.

(2) Such petitions and responses may be sent by facsimile to the

Secretary, Maritime Administration, at (202) 366-9206. To the extent

possible, each petitioner or respondent should send a copy of their

petition or response to other interested parties by facsimile at the

same time the submission is made to MARAD. The Maritime Administrator

will decide whether to take review within two (2) days following the

time for submission of a request that the Maritime Administrator not

take review. If the Maritime Administrator takes review, the

determination by the Director, Office of Ports and Domestic Shipping,

will be stayed until final disposition. If review is not taken, the

determination by the Director, Office of Ports and Domestic Shipping,

will become final two (2) days after the time for submission of

requests that the Maritime Administrator not take review. If the last

day of a time limit falls on a Saturday, Sunday or Federal holiday, the

time is extended to the next business day. In the absence of any

petition for review, the determination by the Director, Office of Ports

and Domestic Shipping, will become final within ten (10) days. The

Secretary, MARAD, may extend any of the time limits for good cause

shown.

Sec. 388.7 Sunset provision.

We will grant no waivers after September 30, 2002, unless the

statutory authority to grant waivers is extended beyond that date. Any

waiver granted prior to September 30, 2002 will continue in effect

until otherwise invalidated or revoked under chapter 121 of title 46,

United States Code.

By order of the Maritime Administrator.

Dated: June 30, 1999.

Joel C. Richard,

Secretary.

[FR Doc. 99-17045 Filed 7-7-99; 8:45 am]

BILLING CODE 4910-81-P