[Federal Register Volume 59, Number 117 (Monday, June 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14871]


[[Page Unknown]]

[Federal Register: June 20, 1994]


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DEPARTMENT OF TRANSPORTATION

Coast Guard

46 CFR Part 67

[CGD 94-008]
RIN 2115-AE83

 

Documentation of Vessels

AGENCY: Coast Guard, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to amend its vessel documentation 
regulations. The proposed amendments would clarify the vessel 
documentation regulations by restating the citizenship requirements for 
trusts to reflect the Coast Guard's policy; by correcting an existing 
cross-reference error regarding mortgagee consent for exchange of 
Certificates of Documentation; by implementing statutory requirements 
concerning the endorsements on Certificates of Documentation for 
dredges and towing vessels; and by making other minor technical 
amendments.

DATES: Comments must be received on or before August 19, 1994.

ADDRESSES: Comments may be mailed to the Executive Secretary, Marine 
Safety Council (G-LRA/3406) (CGD 94-008), U.S. Coast Guard 
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may 
be delivered to room 3406 at the same address between 8 a.m. and 3 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is (202) 267-1477.
    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 8 a.m. and 3 p.m., Monday through Friday, except 
Federal holidays.
FOR FURTHER INFORMATION CONTACT:
Lieutenant Commander Don M. Wrye, Vessel Documentation and Tonnage 
Survey Branch, Merchant Vessel Inspection and Documentation Division, 
Office of Marine Safety, Security and Environmental Protection; (202) 
267-1492.

SUPPLEMENTARY INFORMATION:

Request for Comments

    The Coast Guard encourages interested persons to participate in 
this rulemaking by submitting written data, views, or arguments. 
Persons submitting comments should include their names and addresses, 
identify this rulemaking (CGD 94-008) 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 reasons 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 hearing at a time and place announced by a later notice in the 
Federal Register.

Drafting Information

    The principal person involved in drafting this document are 
Lieutenant Commander Don M. Wrye, Project Manager, and C.G. Green, 
Project Counsel, Office of Chief Counsel.

Background and Purpose

    On November 15, 1993, the Coast Guard published a final rule in the 
Federal Register (58 FR 60256) which revised 46 CFR Part 67 to 
implement a number of statutory initiatives to simplify and streamline 
the documentation process, to implement user fees for vessel 
documentation services, and to clarify the regulations and present them 
in a more orderly fashion. The final rule was the subject to two 
correction documents which appeared in the Federal Register on December 
13, 1993, at 58 FR 65130 and 58 FR 65243. The final rule became 
effective on January 1, 1994. This rulemaking, among other things, 
corrects certain errors and omissions in the final rule. It also 
clarifies the citizenship requirements for a trust arrangement as a 
vessel-owning entity, and states the endorsements required for dredges 
and towing vessels.
    On June 7, 1998 Congress amended 46 U.S.C. app. Sec. 316 (Pub. L. 
100-329) to require towing vessels to be documented with a coastwise or 
Great Lakes endorsement, as appropriate. On November 4, 1992, Congress 
amended 46 U.S.C. app. Sec. 292 (Pub. L. 102-587) to require vessels of 
at least five net tons engaged in dredging in the navigable waters of 
the United States to be documented with a coastwise endorsement. 
Neither of these statutory requirements were included in the revision 
of Part 67. In order to state those requirements and to clarify the 
endorsement requirements for vessels employed in towing or dredging, 
the regulations need to be amended. This rulemaking proposes that 
amendment.

Discussion of Proposed Amendments

    The Coast Guard proposes to revise paragraphs (a) and (b) of 
Sec. 67.19, which respectively describe a coastwide and Great Lakes 
endorsement, by adding the words ``, dredging, towing,'' in paragraph 
(a), and adding the words ``, towing in the Great Lakes,'' in paragraph 
(b). The revision to paragraph (a) reflects the requirement expressed 
in 46 U.S.C. app. Sec. 292 that vessels engaged in dredging in the 
navigable waters of the United States be documented with a coastwise 
endorsement. The revision to paragraph (b) reflects the requirement 
expressed in 46 U.S.C. app. Sec. 316 that vessels engaged in towing, 
other than in circumstances of distress, in waters subject to the 
jurisdiction of the United States be documented with an appropriate 
coastwide or Great Lakes endorsement.
    The Coast Guard proposes to revise several sections regarding 
citizenship requirements for vessel documentation. These revisions 
would reorder and set out the citizenship requirements for a 
partnership in a separate section; describe the citizenship 
requirements for a trust in detail to specify the requirements for each 
endorsement; set out the citizenship requirements for an association or 
joint venture in a separate section; and reorder the citizenship 
requirements for a corporation. None of the current citizenship 
requirements for these entities would be changed by the revisions.
    The proposed revision to Sec. 67.35 would set out the citizenship 
requirements for a partnership in a separate section and in a more 
logical order. Currently, Sec. 67.35 sets out the citizenship 
requirements for a partnership, association, or joint venture together. 
The partnership is frequently used as a vessel-owning business entity 
for documentation purposes and has citizenship requirements quite 
different from those of an association or joint venture. On the other 
hand, the citizenship requirements for an association or joint venture 
as a vessel-owning business entity for documentation purposes are the 
same. Setting forth the citizenship requirements for a partnership in a 
separate section would present them in a more appropriate format. None 
of the current citizenship requirements for a partnership would be 
changed.
    Section 67.37, which sets forth the citizenship requirements for 
trust arrangements as vessel-owning entities, would be redesignated as 
Sec. 67.36. In addition, the citizenship requirements for trust 
arrangements would be described in detail, like those for corporations 
and partnerships, to specify the requirements for the relevant 
endorsements. Paragraph (a) of proposed Sec. 67.36 would set forth the 
general requirements for a registry or recreational endorsement that 
each trustee and each beneficiary with an enforceable interest in the 
trust be citizens. This paragraph would simply restate the current 
regulatory requirements for trusts found in Sec. 67.37. Paragraphs (b) 
and (c) of proposed Sec. 67.36 would set forth the citizenship 
requirements for a fishery endorsement and a coastwise or Great Lakes 
endorsement, respectively. These requirements would reflect the 
statutory citizenship requirements for these endorsements applicable to 
any business entity owning a documented vessel. The owner citizenship 
requirements for a coastwise or Great Lakes endorsement may be found in 
Sec. 2 of the Shipping act, 1916 (46 U.S.C. app. Sec. 802) and 46 
U.S.C. 12107, respectively, and the owner citizenship requirements for 
a fishery endorsement may be found in 46 U.S.C. 12108. The proposed 
regulatory requirements would reflect the Coast Guard's policy in 
enforcement of the statutory requirements. None of the current 
citizenship requirements for trusts would be changed.
    The proposed addition of a new Sec. 67.37 would set out the 
citizenship requirements for associations and joint ventures as vessel-
owning entities for documentation purposes. The citizenship 
requirements for associations and joint ventures are currently stated 
in Sec. 67.35 with those for partnerships. However, there is no logical 
reason to continue this grouping. Separating the requirements for 
associations and joint ventures, which are identical, from those for 
partnerships would present the information in a more logical and 
orderly fashion. None of the current citizenship requirements for 
associations or joint ventures would be changed.
    The proposed revision to paragraphs (b), (c), and (d) of Sec. 67.39 
would clarify the current regulations by rearranging the citizenship 
requirements for corporations in a more logical order. None of the 
current citizenship requirements for corporations would be changed.
    The proposed revision to paragraph (e) of Sec. 67.119 would clarify 
the current regulations. Paragraph (e) of Sec. 67.119 was intended to 
serve as a savings or ``grandfather'' provision with regard to hailing 
port requirements for vessels issued a Certificate of Documentation 
prior to July 1, 1982. The language of the final rule implies that the 
provisions of the entire section do not apply to the identified 
vessels, rather than only the provisions of paragraph (c). This 
revision will remove the confusion that currently exists because of the 
omission from the final rule. The proposed revision would clearly state 
that only the requirements of paragraph (c) of Sec. 67.119, 
specifically that a hailing port include a State, territory, or 
possession designation, do not apply to vessels issued a Certificate of 
Documentation before July 1, 1982, until:
    a. a port of record assignment is required under the regulations, 
or
    b. the owner elects to designate a new hailing port. Therefore, 
vessels to which Sec. 67.119(c) do not apply can display a hailing port 
consisting of the name of a city only until either of the conditions 
described are met.
    The proposed amendment to Sec. 67.145 would correct the cross-
reference to appropriate paragraphs in Sec. 67.167 where mortgagee 
consent is required to exchange a Certificate of Documentation. The 
current regulation cites, in part, to paragraph (a) of Sec. 67.167, 
which is incorrect since that paragraph contains only procedural 
information and refers to the remaining paragraphs of that section. 
This cross-reference error has led to confusion, causing some 
documentation officers to conclude that mortgagee consent is required 
for any cause of exchange listed in Sec. 67.167. The reasons requiring 
mortgagee consent contained in the paragraphs referenced in the amended 
language are those for which consent has been traditionally required.
    The proposed revision to paragraph (d) of Sec. 67.171 would clarify 
that the request for a certificate evidencing deletion from 
documentation must be made to the vessel's port of record. Since the 
port of record is the custodian of the vessel's file, only that port 
should issue a deletion certificate.
    The proposed revision to Sec. 67.321 would clarify that when the 
address of the managing owner of a vessel changes, the managing owner 
must report that change to the documentation officer at the vessel's 
port of record within 10 days of its occurrence. This revision would 
conform Sec. 67.321 to a similar requirement in Sec. 67.113. Unreported 
changes of address have proved to be a particularly bothersome problem. 
If changes of address for the managing owner are not reported, the 
Coast Guard may send the renewal notice to the wrong address which can 
lead to late renewal or a failure to renew with civil penalty action. 
The proposed revision would clarify the responsibility of the managing 
owner to provide proper notice of changes of address.
    The proposed revision to Sec. 67.539, adding the words ``or 
document'', would clarify that the fee is charged for a copy of any 
instrument or document for which a specific fee is not listed. Also, 
the revision would clarify that the cross-reference to 49 CFR 7.95 is 
solely for the purpose of calculating the fee in the same manner as 
described in that section. It does not mean that a request for a copy 
of any instrument or document not specifically identified in Subpart Y 
of Part 67 is to be processed as a request pursuant to the Freedom of 
Information Act. Therefore, once the fee for the copy has been 
calculated in the manner described in 49 CFR 7.95, it is incorrect to 
refer to any other section in 49 CFR Part 7 for any purpose with regard 
to the fee.

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. As discussed 
earlier in this preamble, this proposal, if adopted, would clarify the 
citizenship requirements of a trust as a vessel-owning entity, correct 
certain errors and omissions made in the final rule for 46 CFR part 67, 
clarify a cross-reference with regard to calculation of fees for copies 
of instruments and documents, and address the statutorily required 
endorsements for vessels employed in towing and dredging. These matters 
are administrative in nature and do not have any economic impacts on 
the regulated public.

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 the impact of this proposal to be minimal 
because it would only clarify the structure of a trust as a vessel-
owning entity, correct certain errors and omissions made in the final 
rule for 46 CFR part 67, clarify a cross-reference with regard to 
calculation of fees for copies of instruments and documents, and 
address the statutorily required endorsements for vessels employed in 
towing or dredging. This proposal would bring the regulations into 
conformity with current policy and practice. These matters are 
administrative in nature and do not have any economic impacts on the 
regulated public. Because it expects the impact of this proposal to be 
minimal, 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.

Collection of Information

    This proposal contains no collection-of-information requirements 
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

Federalism

    The Coast Guard has analyzed this proposal under the principles and 
criteria contained in Executive Order 12612 and has determined that 
this proposal does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment.

Environment

    The coast guard considered the environmental impact of this 
proposal and concluded that under section 2.B.2. of Commandant 
Instruction M16475.1B, this proposal is categorically excluded from 
further environmental documentation. This proposal has been determined 
to be categorically excluded because the changes proposed are 
administrative in nature and clearly have no environmental impact. A 
``Categorical Exclusion Determination'' is available in the docket for 
inspection or copying where indicated under ADDRESSES.

List of Subjects in 46 CFR Part 67

    Fees, Incorporation by reference, Vessels.

    For the reasons set out in the preamble, the Coast Guard proposes 
to amend 46 CFR part 67 as follows:

PART 67--[AMENDED]

    1. The authority citation for part 67 is revised to read as 
follows:

    Authority: 14 U.S.C. 664; 31 U.S.C. 9701; 42 U.S.C. 9118; 46 
U.S.C. 2103, 2107, 2110; 46 U.S.C. app. 841a, 876; 49 CFR 1.46.

    2. In Sec. 67.19, paragraphs (a) and (b) are revised to read as 
follows:


Sec. 67.19  Coastwise or Great Lakes endorsement.

    (a) A coastwise endorsement entitles a vessel to employment in 
unrestricted coastwise trade, dredging, towing, and any other 
employment for which a registry, fishery, or Great Lakes endorsement is 
not required.
    (b) A Great lakes endorsement entitles a vessel to employment in 
the Great Lakes trade, towing in the Great Lakes, and any other 
employment for which a registry, fishery, or coastwise endorsement is 
not required.
* * * * *
    3. Section 67.35 is revised to read as follows:


Sec. 67.35  Partnership.

    A partnership is a citizen if all its general partners are 
citizens, and:
    (a) For the purpose of obtaining a registry or recreational 
endorsement, at least 50 percent of the equity interest in the 
partnership is owned by citizens.
    (b) For the purpose of obtaining a fishery endorsement, more than 
50 percent of the equity interest in the partnership is owned by 
citizens.
    (c) For the purpose of obtaining a coastwise or Great Lakes 
endorsement or both, at least 75 percent of the equity interest in the 
partnership is owned by citizens.

    4. Section 67.37 is redesignated as Sec. 67.36 and revised to read 
as follows:


Sec. 67.36  Trust.

    (a) For the purpose of obtaining a registry or recreational 
endorsement, a trust arrangement is a citizen if:
    (1) Each of its trustees is a citizen; and
    (2) Each beneficiary with an enforceable interest in the trust is a 
citizen.
    (b) For the purpose of obtaining a fishery endorsement, a trust 
arrangement is a citizen if:
    (1) It meets all the requirements of paragraph (a) of this section; 
and
    (2) More than 50 percent of the equity interest in the trust is 
owned by citizens.
    (c) For the purpose of obtaining a coastwise or Great Lakes 
endorsement or both, a trust arrangement is a citizen if:
    (1) It meets all the requirements of paragraph (a) of this section; 
and
    (2) At least 75 percent of the equity interest in the trust is 
owned by citizens.

    5. Section 67.37 is added to read as follows:


Sec. 67.37  Association or joint venture.

    (a) An association is a citizen if each of its members is a 
citizen.
    (b) A joint venture is a citizen if each of its members is a 
citizen.

    6. In Sec. 67.39, paragraphs (b), (c), and (d) are revised to read 
as follows:


Sec. 67.39  Corporation.

* * * * *
    (b) for the purpose of obtaining a fishery endorsement, a 
corporation is a citizen if:
    (1) It meets all the requirements of paragraph (a) of this section; 
and
    (2) More than 50 percent of the stock interest in the corporation 
including a majority of voting shares in the corporation is owned by 
citizens.
    (c) For the purpose of obtaining a coastwise or Great Lakes 
endorsement or both, a corporation is a citizen if:
    (1) It meets all the requirements of paragraph (a) of this section; 
and
    (2) At least 75 percent of the stock interest in the corporation is 
owned by citizens.
    (d) A corporation which does not meet the stock interest 
requirement of paragraph (c) of this section may qualify for limited 
coastwise trading privileges by meeting the requirements of part 68 of 
this chapter.

    7. In Sec. 67.119, paragraph (e) is revised to read as follows:


Sec. 67.119  Hailing port designation.

* * * * *
    (e) Until such time as a port of record assignment is required in 
accordance with Sec. 67.115, or the owner elects to designate a new 
hailing port, the provisions of paragraph (c) of this section do not 
apply to vessels which were issued a Certificate of Documentation 
before July 1, 1982.

    8. In Sec. 67.145, paragraph (a) is amended by removing the cross-
reference to ``Secs. 67,167(a) or 67.167(b) (1) through (6)'' and 
adding, in its place, ``Secs. 67.167(b) (1) through (6) or 67.167(c) 
(1) through (8)''.
    9. In Sec. 67.171, paragraph (d) is revised to read as follows:


Sec. 67.171  Deletion; requirement and procedure.

* * * * *
    (d) A certificate evidencing deletion from U.S. documentation will 
be issued upon request of the vessel owner to the vessel's port of 
record upon compliance with the applicable requirements of this 
subpart.

    10. Section 67.321 is revised to read as follows:


Sec. 67.321  Requirement to report change of address of managing owner.

    Upon the change of address of the managing owner of a documented 
vessel, the managing owner shall report the change of address to the 
documentation officer at the port of record of the vessel within 10 
days of its occurrence.

    11. Section 67.539 is revised to read as follows:


Sec. 67.539   Copies of instruments and documents.

    The fee charged for furnishing a copy of any instrument or document 
is calculated in the same manner as described in 49 CFR 7.95.

    Dated: June 10, 1994.
J.F. McGowan,
Captain, U.S. Coast Guard, Acting Chief, Office of Marine Safety, 
Security and Environmental Protection.
[FR Doc. 94-14871 Filed 6-17-94; 8:45 am]
BILLING CODE 4910-14-M