[Federal Register Volume 59, Number 89 (Tuesday, May 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11223]


[[Page Unknown]]

[Federal Register: May 10, 1994]


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DEPARTMENT OF TRANSPORTATION

Coast Guard

46 CFR Part 67

[CGD 93-063]

 

Vessel Rebuild Standards

AGENCY: Coast Guard, DOT.

ACTION: Policy statement.

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SUMMARY: The Coast Guard is planning to undertake rulemaking to develop 
standards for vessel rebuild determinations. In order to help it 
determine the scope of the issues involved, the Coast Guard conducted 
two public meetings, the first on November 16, 1993, and the second on 
February 15, 1994. At the meetings, attendees discussed problems 
encountered under existing procedures and expressed confusion 
concerning the Coast Guard's current rebuild standard. This notice 
states the Coast Guard's regulatory standard for rebuild determinations 
and related practices and procedures.

EFFECTIVE DATE: May 10, 1994.

FOR FURTHER INFORMATION CONTACT: Ms. Laura Burley, Vessel Documentation 
and Tonnage Survey Branch at (202) 267-1492.

SUPPLEMENTARY INFORMATION: Under 27 of the Merchant Marine Act, 1920 
(46 U.S.C. app. 883), a vessel entitled to engage in the coastwise 
trade by virtue of having been built in the United States which is 
later rebuilt outside the United States, loses its eligibility to 
engage in the coastwise trade. Under 46 U.S.C. 12106, a vessel not 
eligible for the coastwise trade cannot receive a Great Lakes 
endorsement on its Certificate of Documentation. In addition, under 46 
U.S.C. 12108, a fishing vessel which has been rebuilt outside the 
United States
and which does not qualify for the rebuild savings provision of the 
Commercial Fishing Industry Vessel Anti-Reflagging Act of 1987, is not 
eligible for a fishery endorsement on its Certificate of Documentation.
    In accordance with the Coast Guard's regulatory standard, a vessel 
is rebuilt when ``any considerable part of its hull or superstructure 
is built upon or is substantially altered.'' Prior to September 1989, 
the Coast Guard evaluated whether work performed on a vessel 
constituted a rebuilding under that standard by focusing on whether the 
nature of the work was structural or nonstructural. In September 1989, 
the Coast Guard issued a rebuild determination for work performed on 
the vessel Monterey. The Monterey decision analyzed and explained the 
Coast Guard's regulatory standard as a two step process. The first step 
in applying the standard is to identify that work which involves 
building upon or alteration of the hull or superstructure. Once the 
relevant work has been identified, the second step is to determine 
whether that work involves a considerable part of the hull or 
superstructure. If it does, then the vessel has been rebuilt. A 
determination that a vessel has been rebuilt, if the rebuilding was 
done outside the U.S., results in a permanent loss of the eligibility 
of the vessel to engage in the restricted trades, with a commensurate 
loss in value. Effective January 1, 1994, the Coast Guard's regulatory 
standard for rebuild determinations is found in 46 CFR 67.177. (See 
final rule published in the Federal Register issue of Monday, November 
15, 1993, page 60256.)
    As a result of the regulatory requirement, the Coast Guard 
frequently receives applications for preliminary determinations that 
work to be performed on a vessel does not constitute a rebuilding. In 
support of an application for a rebuild determination, the applicant 
will generally enclose extensive documentation addressing the character 
and scope of the work to be performed including plans, drawings, 
contracts, work orders, and materials lists. The applicant will then 
attempt to show that the work will not build upon or ``substantially'' 
alter ``any considerable part'' of the vessel's hull or superstructure. 
Often, comparisons are made between the before and after area of the 
hull and superstructure; the weight of steel to be replaced or added 
will be compared to the vessel's total steelweight; or the cost of the 
planned work will be compared to the value of the vessel. Sometimes, 
the vessel representative submits no documentation until after the work 
is performed, which assumes the risk that the Coast Guard may determine 
that the vessel has been rebuilt, with the disastrous consequence of 
loss of trading entitlements. In other cases, the work actually done on 
the vessel differs from or exceeds the planned work, with possible 
adverse effects on the final determination. In any event, following 
completion of the work the vessel representative applies for a final 
determination.
    The Coast Guard is planning to initiate rulemaking to develop 
standards for determining when work on a vessel constitutes a 
rebuilding and to define the terms involved in rebuild determinations. 
In support of the decision to initiate a rulemaking, the Coast Guard 
conducted a review of its rebuild determinations since the Monterey 
decision. The Coast Guard's experience has been that work performed on 
a vessel which involved five percent or less of the vessel's 
steelweight has never been determined to constitute a rebuilding. 
Barring unusual circumstances, the Coast Guard anticipates that this 
trend will continue. However, pending publication of a final rule on 
this matter, the Coast Guard will adhere to the published regulatory 
standard and will continue to follow its current practice of making 
case-by-case determinations as described above.

    Dated: April 18, 1994.
A.E. Henn,
Rear Admiral, U.S. Coast Guard, Chief, Office of Marine Safety, 
Security and Environmental Protection.
[FR Doc. 94-11223 Filed 5-9-94; 8:45 am]
BILLING CODE 4910-14-M