User Fees for Licenses, Certificates of Registry, and Merchant Mariner Documents

SUMMARY: The Coast Guard revises the user fees for its services

relating to the issuance of merchant mariner licenses, certificates of

registry, and merchant mariner documents. We based the revisions on the

most recent recalculation of program costs. We have changed the format

of the two CFR sections in which the fees are published from narrative

text to tables that are easier to use.

DATES: This final rule is effective October 4, 1999.

ADDRESSES: Documents as indicated in this preamble are available for

inspection or copying at the Docket Management Facility, U.S.

Department of Transportation (DOT), room PL-401, 400 Seventh Street

SW., Washington, DC 20590-0001, between 10 a.m. and 5 p.m., Monday

through Friday, except Federal holidays. The telephone number is 202-

366-9329. You may also electronically access the public docket for this

rulemaking on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For information concerning the final

rule provisions, contact CDR Mark McEwen, Project Manager, U.S. Coast

Guard Headquarters, Office of Planning and Resources (G-MRP), telephone

202-267-0785. For questions on viewing material in the docket, contact

Dorothy Walker, Chief, Dockets, Department of Transportation, telephone

202-366-9329.

SUPPLEMENTARY INFORMATION:

Background

Regulatory History

The Coast Guard published a final rule entitled ``User Fees for

Marine Licensing, Certification of Registry and Merchant Mariner

Documentation'' in the Federal Register on March 19, 1993 (59 FR

15228). That rule established marine license, certificate of registry,

and merchant mariner document user fees in 46 CFR parts 10 and 12.

On September 27, 1994, we added user fees for renewals of

certificates of registry and MMDs to these fee schedules.

On April 1, 1998, the Coast Guard published a notice of proposed

rulemaking (NPRM) entitled ``User Fees for Licenses, Certificates of

Registry, and Merchant Mariner Documents'' in the Federal Register (63

FR 16024) [corrected April 20, 1998 at 63 FR 19580]. The NPRM proposed

revised fees based on our latest cost recalculations.

We allowed 180 days for mariners to review the NPRM and submit

written comments. During this time, we received 22 comments on a

variety of issues including one request for a series of public

meetings. Since the written comments addressed a wide variety of

issues, the Coast Guard did not find that public meetings were needed

to provide additional helpful information for the rulemaking and

determined that a public meeting would not be helpful to develop the

final rule.

Discussion of Comments and Changes

The following paragraphs discuss the comments received and explain

the changes we have made in the final rule.

Opposition to User Fees

Thirteen comments objected to all user fees in general, and

specifically to the user fees we proposed for merchant mariner licenses

and documents. Some comments agreed that the fees were necessary, but

objected to the amount of the proposed fees. Some comments stated that

the fee for the service exceeded the value of the service to the

recipient.

The Omnibus Budget Reconciliation Act of 1990 (the Act) amended 46

U.S.C. 2110 to require that the Coast Guard establish and collect fees

for Coast Guard services. Our fees are based on the cost to the Coast

Guard of providing the service.

Improve Service at RECs

We received four comments discussing the quality of service at the

17 Regional Examination Centers (REC). The comments suggested that the

Coast Guard lower costs and fees by reducing procedures and increasing

productivity at the RECs, and by allowing a third party to process

merchant mariner document (MMD) applications and certify merchant

mariners.

This rule does not include general changes to REC procedures or to

the licensing and documentation system. However, we have forwarded

these comments to the program managers and to the licensing

reengineering team for their consideration.

Five comments stated that they would prefer that the fees that were

paid would be used to improve service to the customer. Fees paid for

merchant mariner licensing and documentation (MMLD) services are

deposited in the general fund of the U.S. Treasury as offsetting

receipts of the Department of Transportation and ascribed to Coast

Guard activities. The Coast Guard cannot use fee receipts for any

purpose unless specifically authorized by Congress.

$17 Fee for Criminal Record Check

One comment stated that we should not charge the mariner a $17 fee

for a Federal Bureau of Investigation (FBI) criminal record check

because the mariner does not benefit from this service.

The United States Court of Appeals upheld the Coast Guard's

authority to charge the $17 fee for an FBI criminal record check

(Seafarers International Union of North America, et al. v. the United

States Coast Guard, 81 F.3d 185-186, (DC Cir. 1996)). We will start

collection of the $17 FBI criminal record check fee when this rule

becomes effective. The fee is included in the evaluation phase fee for

original documents.

Schedule for Recalculation and Implementation of Fees

One comment suggested that we should not recalculate the fees now

because we are considering privatizing certain licensing functions.

Another comment recommended that we increase the fees once every 10

years and ``adjust the fees for inflation only.'' One comment

recommended that we gradually implement the new fee schedule over a 4-

year period.

We must review and, if necessary, recalculate the licensing and

documentation user fees every 2 years as required by OMB Circular A-25.

Based on the recalculated costs, we may adjust the fees to recover the

costs of providing services. The Coast Guard's settlement with

Seafarers International Union (SIU) dated September 17, 1997, obligates

the Coast Guard to ``going forward with notice and comment rulemaking

as to its MMLD program and further commits that this rulemaking will

include the recalculation of its costs and reassessment of its fees.''

A phased implementation of fees is not practical because the fee

reviews required by OMB are too frequent to allow phased

implementation.

Four comments stated that the user fees are unfair because they are

an additional burden to mariners who must already pay other costs to

maintain their

[[Page 42813]]

licenses or advance their careers such as required courses, travel to

required courses, and travel to the RECs.

The Coast Guard is aware of these other professional costs and we

discussed them in the rulemaking that established the original fees on

March 19, 1993 (58 FR 15228). We have not increased the fees since that

time. This rulemaking is the first adjustment of the MMLD fees based on

a recalculation of the costs of providing MMLD services.

Paying for Multiple Transactions

Three comments suggested that multiple license, MMD, and

endorsement renewals for one individual should all expire

simultaneously at 5-year intervals. This would consolidate all

licensing fees into a single payment for multiple transactions once

every 5 years. Mariners have the option to simplify their renewal

process by renewing all their documents at the same time, putting them

all on the same 5-year expiration schedule. The fee schedule provides

savings to mariners when more than one document is processed using a

single application.

Recalculation

One comment stated that the ``recalculation is not a true cost

analysis or an economic time test study, but an exercise in justifying

the Congressional mandate to impose user fees.''

We did the recalculation to comply with a court order resulting

from litigation initiated by SIU. That case was settled after we

completed the recalculation. The court ordered the Coast Guard to

reassess its fees based on that recalculation. This rulemaking does so.

Regulatory Assessment

One comment criticized the draft regulatory assessment because the

same user fee would represent a greater percentage of the average

annual income for an able seaman than that of a third mate.

The fees in this rule are based only on the costs of providing each

type of licensing and documentation service.

The same comment stated that ``Coast Guard fees are also

significantly higher than fees imposed by the government for similar

federally mandated licenses and documents'' such as by the Federal

Aviation Administration and the Federal Communications Commission.

Unless the licensing systems of other agencies are the same as the

Coast Guard's licensing system, the fees for licensing services will be

different in each agency. Each agency has different direct and indirect

costs for providing the service and their fees are related to those

costs. Comparisons with other government or professional organizations

are useful for evaluating the potential cumulative impacts on affected

persons, but each agency's or organization's system is unique and each

agency's license has different requirements for obtaining

certification.

Estimate of Uninspected Small Passenger Vessels

One comment disagreed with the Coast Guard's estimate of only 480

uninspected small passenger vessels and stated that the number should

be much higher.

The Coast Guard agrees with the comment that the 480 figure is

incorrect and, upon further research, the Coast Guard estimates there

are approximately 30,000 uninspected passenger vessels that could have

license holders both owning and operating their vessels as small

businesses.

STCW

One comment suggested that the proposed fees, in addition to the

requirements of the implementation of the International Convention on

Standards, Training, Certification and Watchkeeping (STCW), ``* * *

would place an unacceptable financial burden upon individual mariners

and upon vessel operators.''

The June 26, 1997, STCW final rule (62 FR 34525) discussed the

costs associated with implementation of that rule. However, the costs

of providing STCW services were not part of our recalculation used for

merchant mariner license and documentation fees in this rule. The Coast

Guard has not charged fees for STCW certification services and this

rule does not establish fees for these services. We have added new

entries to tables 10.109 and 12.02-18 for processing STCW forms, and we

clearly state there is no fee charged for this activity.

Other Changes

We have changed Secs. 10.110 and 12.02-18 to allow for payment of

fees for all phases at the time of application or for payment at each

phase.

We are also adding language to both sections permitting RECs, as

they become equipped, to accept payment by credit card.

Regulatory Evaluation

This final rule is not a significant regulatory action under

section 3(f) of Executive Order 12866 and 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). A separate

regulatory assessment document, however, has been prepared for this

rule and is available in the docket for inspection or copying where

indicated under ADDRESSES.

The total annual revenues from direct user fees under subtitle II

of 46 U.S.C. 2110 does not exceed $23.1 million and the merchant marine

licensing and documentation (MMLD) revenues for fiscal year 1996 were

only $4.6 million. The revised fees will increase these revenues to an

estimated $9.3 million. This represents the maximum amount of revenue

that could be collected based on recalculated data and transaction

figures. The total revenue of direct user fees under subtitle II of 46

U.S.C. 2110 for fiscal year 1997 did not exceed $23.1 million, well

below the $100 million threshold that makes a rulemaking economically

significant.

This final rule will affect all mariners required to hold a license

or certificate of registry (COR) in accordance with 46 CFR part 10 or a

merchant mariner document (MMD) in accordance with 46 CFR part 12. Data

from the RECs (1994) indicate a grand total of 57,529 transactions,

including new license issuances as well as renewals.

The impact of the fees on the individual merchant mariner will

occur at the time fees are paid. At all other times during the validity

of the license, document, or certificate, if there are no document

transactions, no payments are made. The relative economic impact of the

fees on each mariner would vary depending upon the number and type of

documents held by the mariner and the mariner's ability to pay.

To assess the impact of the fees on the individual mariner, the

Coast Guard annualized fees over the period the documents were valid.

We determined that the document transactions a typical mariner may

require over the first 10 years he or she holds a license or document

will include renewals as well as raises in grade or endorsements. Our

analysis of the costs borne by the mariner covers a 10-year period.

Based on these assumptions, the annualized fee differences range

from a low of $0.80 for Upper Level Licenses to a high of $16.30 for a

Merchant Mariner's Document with qualified rating.

Summary

The Coast Guard found that the impact of the revisions will vary

with the financial situation of each individual mariner. However, the

data suggested the financial impact of the fee

[[Page 42814]]

revisions are not significantly different from the user and licensing

fees of other professions, both in terms of actual fees and as a

percent of salary. The impact of the fee revisions to the individual

merchant mariner occurs over the phases of the document transactions at

the time a fee is paid for each transaction phase. Absent further

transactions during the document's 5-year period of validity, no other

payments would be necessary until the renewal of the document.

The Coast Guard understands that the fee revisions may represent

only one of several expenses incurred by the individual mariner when

acquiring a Coast Guard license, COR, or MMD. Within the marine

professions and trades, the fees for MMLD transactions have essentially

become part of the overall cost associated with working in the

industry.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), 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.

The fee revisions in this final rule will impact the individual

mariner. However, some license holders both own and operate their

vessels as small businesses. For those individuals, this final rule has

small entity implications. The annual impact of these fee revisions on

any sole proprietor will be less than $20. The Coast Guard estimates

that few sole proprietors work as towing vessel operators, offshore

supply vessel operators, and mobile offshore drilling unit operators.

However, we believe that there are a number of sole proprietors in the

small passenger vessel industry. As a business, sole proprietors can

claim their licensing and documentation user fees as a business expense

for tax purposes and many can pass along the expense of the licensing

fees to the consumer in the form of higher rates. Therefore, the Coast

Guard certifies under section 605(b) of the Regulatory Flexibility Act

(5 U.S.C. 601-612) 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

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

could better evaluate its effects on them and participate in the

rulemaking process.

The Small Business and Agriculture Regulatory Enforcement Ombudsman

and 10 Regional Fairness Boards were established to receive comments

from small businesses about Federal agency enforcement actions. The

Ombudsman will annually evaluate the enforcement activities and rate

each agency's responsiveness to small business. If you wish to comment

on the enforcement action of the Coast Guard, call 1-888-REG-FAIR (1-

888-734-3247).

Collection of Information

This final rule does not provide for a collection of information

under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Federalism

The Coast Guard has analyzed this final rule under the principles

and criteria contained in Executive Order 12612 and has determined that

this final rule does not have sufficient implications for federalism to

warrant the preparation of a Federalism Assessment.

Unfunded Mandates

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub.

L. 104-4, 109 Stat. 48) requires Federal agencies to assess the effects

of certain regulatory actions on State, local, and tribal governments,

and the private sector. The UMRA requires a written statement of

economic and regulatory alternatives for rules that contain Federal

mandates. A ``Federal mandate'' is a new or additional enforceable duty

imposed on any State, local, or tribal government, or the private

sector. If any Federal mandate causes those entities to spend, in the

aggregate, $100 million or more in any one year, the UMRA analysis is

required. This final rule will not impose Federal mandates on any

State, local, or tribal governments, or the private sector.

Environment

The Coast Guard considered the environmental impact of this rule

and concluded that, under figure 2-1, paragraph (34)(a) of Commandant

Instruction M16475.1C, this final rule is categorically excluded from

further environmental documentation. A ``Categorical Exclusion

Determination'' is available in the docket for inspection or copying

where indicated under ADDRESSES.

Other Executive Orders on the Regulatory Process

In addition to the statutes and executive orders already addressed

in this preamble, the Coast Guard considered the following executive

orders in developing this final rule and reached the following

conclusions--

E.O. 12630, Governmental Actions and Interference With

Constitutionally Protected Property Rights

This rule will not effect a taking of private property or otherwise

have taking implications under this Order.

E.O. 12875, Enhancing the Intergovernmental Partnership

This rule will not impose, on any State, local, or tribal

government, a mandate that is not required by statute and that is not

funded by the Federal government.

E.O. 12988, Civil Justice Reform

This rule meets the applicable standards in sections 3(a) and

3(b)(2) of this Order to minimize litigation, eliminate ambiguity, and

reduce burden.

E.O. 13045, Protection of Children From Environmental Health Risks

and Safety Risks

This rule is not an economically significant rule and does not

concern an environmental risk to safety disproportionately affecting

children.

List of Subjects

46 CFR Part 10

Fees, Reporting and recordkeeping requirements, Schools, Seamen.

46 CFR Part 12

Fees, Reporting and recordkeeping requirements, Seamen.

For the reasons discussed in the preamble, the Coast Guard amends

46 CFR parts 10 and 12 as follows:

PART 10--LICENSING OF MARITIME PERSONNEL

1. The authority citation for part 10 continues to read as follows:

Authority: 31 U.S.C. 9701; 46 U.S.C. 2101, 2103, 2110; 46 U.S.C.

Chapter 71; 46 U.S.C. 7502, 7505, 7701; 49 CFR 1.45, 1.46.

Section 10.107 is also issued under the authority of 44 U.S.C.

3507.

2. Revise Sec. 10.109 to read as follows:

Sec. 10.109 Fees.

Use table 10.109 to determine the fees that you must pay for

license and certificate of registry activities in this part.

[[Page 42815]]

Table 10.109--Fees

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

And you need...

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

If you apply for... Evaluation Then Examination Then Issuance Then the

the fee is: the fee is: fee is:

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

License:

Original upper level............................ $115 $110 $45

Original lower level............................ 115 95 45

Raise of grade.................................. 100 45 45

Modification or removal of limitation or scope.. 50 45 45

Endorsement..................................... 50 45 45

Renewal......................................... 50 45 45

Renewal for continuity purposes................. n/a n/a 45

Reissue, Replacement, and Duplicate............. n/a n/a \1\ 45

Radio Officer License:

Original........................................ 65 n/a 45

Endorsement..................................... 50 45 45

Renewal......................................... 50 n/a 45

Renewal for continuity purposes................. n/a n/a 45

Reissue, Replacement, and Duplicate............. n/a n/a \1\ 45

Certificate of Registry:

Original (MMD holder)........................... 105 n/a 45

Original (MMD applicant)........................ 120 n/a 45

Renewal......................................... 50 n/a 45

Renewal for continuity purposes................. n/a n/a 45

Endorsement..................................... n/a n/a 45

Reissue, Replacement, and Duplicate............. n/a n/a \1\ 45

STCW Certification:

Original........................................ (\2\) (\2\) (\2\)

Renewal......................................... (\2\) (\2\) (\2\)

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

\1\ Duplicate for document lost as result of marine casualty--No Fee.

\2\ No fee.

3. Revise Sec. 10.110 to read as follows:

Sec. 10.110 Fee payment procedures.

(a) You may pay--

(1) All fees required by this section when you submit your

application; or

(2) A fee for each phase at the following times:

(i) An evaluation fee when you submit your application.

(ii) An examination fee before you take the first examination

section.

(iii) An issuance fee before you receive your license or

certificate of registry.

(b) If you take your examination someplace other than a Regional

Examination Center (REC), you must pay the examination fee to the REC

at least one week before your scheduled examination date.

(c) Unless the REC provides additional payment options, your fees

may be paid as follows:

(1) Your fee payment must be for the exact amount.

(2) Make your check or money order payable to the U.S. Coast Guard,

and write your social security number on the front of each check or

money order.

(3) If you pay by mail, you must use either a check or money order.

(4) If you pay in person, you may pay with cash, check, or money

order at Coast Guard units where Regional Examination Centers are

located.

(d) Unless otherwise specified in this part, when two or more

documents are processed on the same application--

(1) Evaluation fees. If a certificate of registry transaction is

processed on the same application as a license transaction, only the

license evaluation fee will be charged; and

(2) Issuance fees. A separate issuance fee will be charged for each

document issued.

Sec. 10.209 [Amended]

4. In Sec. 10.209(e)(4), remove the symbols ``Secs. '' and add, in

their place, ``the tables in Secs. ''.

Secs. 10.205, 10.207, 10.209, 10.217, and 10.219 [Amended]

5. In addition to the amendments set forth above, in 46 CFR part

10, remove the word ``Sec. 10.109'' and add, in its place, the words

``table 10.109 in Sec. 10.109'' in the following places:

(a) Section 10.205(a);

(b) Section 10.207(a);

(c) Section 10.209(a)(1), (e)(3)(i)(A), and (f)(1);

(d) Section 10.217(a)(1) and (a)(2); and

(e) Section 10.219(c).

PART 12--CERTIFICATION OF SEAMEN

6. The authority citation for part 12 continues to read as follows:

Authority: 31 U.S.C. 9701; 46 U.S.C. 2101, 2103, 2110, 7301,

7302, 7503, 7505, 7701; 49 CFR 1.46.

7. Revise Sec. 12.02-18 to read as follows:

Sec. 12.02-18 Fees.

(a) Use table 12.02-18 to determine the fees that you must pay for

merchant mariner document activities in this part.

(b) Unless otherwise specified in this part, when two documents are

processed on the same application--

(1) Evaluation fees. If a merchant mariner document transaction is

processed on the same application as a license or certificate of

registry transaction, only the license or certificate of registry

evaluation fee will be charged;

(2) Examination fees. If a license examination under part 10 also

fulfills the examination requirements in this part for a merchant

mariner document, only the fee for the license examination is charged;

and

(3) Issuance fees. A separate issuance fee will be charged for each

document issued.

(c) You may pay--

(1) All fees required by this section when you submit your

application; or

(2) A fee for each phase at the following times:

(i) An evaluation fee when you submit your application.

[[Page 42816]]

(ii) An examination fee before you take the first examination

section.

(iii) An issuance fee before you receive your merchant mariner

document.

(d) If you take your examination someplace other than a Regional

Examination Center (REC), you must pay the examination fee to the REC

at least one week before your scheduled examination date.

(e) Unless the REC provides additional payment options, your fees

may be paid as follows:

(1) Your fee payment must be for the exact amount.

(2) Make your check or money order payable to the U.S. Coast Guard,

and write your social security number on the front of each check or

money order.

(3) If you pay by mail, you must use either a check or money order.

(4) If you pay in person, you may pay with cash, check, or money

order at Coast Guard units where Regional Examination Centers are

located.

(f) The Coast Guard may assess charges for collecting delinquent

payments or returned checks. The Coast Guard will not provide

documentation services to a mariner who owes money for documentation

services previously provided.

Table 12.02-18--Fees

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

And you need...

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

If you apply for... Evaluation Then Examination Then Issuance Then the

the fee is: the fee is: fee is:

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

Merchant Mariner Document:

Original without endorsement.................... $110 n/a $45

Original with endorsement....................... 110 140 45

Endorsement for qualified rating................ 95 140 45

Upgrade or Raise in Grade....................... 95 140 45

Renewal without endorsement for qualified rating 50 n/a 45

Renewal with endorsement for qualified rating... 50 45 45

Renewal for continuity purposes................. n/a n/a 45

Reissue, Replacement, and Duplicate............. n/a n/a \1\ 45

STCW Certification:

Original........................................ (2) (2) (2)

Renewal......................................... (2) (2) (2)

Other Transactions:

Duplicate Continuous Discharge Book............. n/a n/a 10

Duplicate record of sea service................. n/a n/a 10

Copy of certificate of discharge................ n/a n/a 10

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

\1\ Duplicate for document lost as result of marine casualty--No Fee.

\2\ No Fee.

Sec. 12.02-27 [Amended]

7. In Sec. 12.02-27(e)(4) and (f), remove the symbols ``Secs. ''

and add, in their place, ``tables in Secs. ''.

Secs. 12.02-23 and 12.02-27 [Amended]

8. In addition to the amendments set forth above, in 46 CFR part

12, remove the word ``Sec. 12.02-18'' and add, in its place, the words

``table 12.02-18 in Sec. 12.02-18'' in the following places:

(a) Section 12.02-23(b) and (c)(2); and

(b) Section 12.02-27(a)(1) and (e)(3)(i)(A).

Dated: July 27, 1999.

R.C. North,

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

and Environmental Protection.

[FR Doc. 99-20037 Filed 8-4-99; 8:45 am]

BILLING CODE 4910-15-P