[Federal Register Volume 61, Number 231 (Friday, November 29, 1996)]
[Rules and Regulations]
[Pages 60610-60613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30488]
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PANAMA CANAL COMMISSION
35 CFR Parts 133 and 135
RIN 3207-AA38
Tolls for Use of Canal; Rules for Measurement of Vessels
AGENCY: Panama Canal Commission.
ACTION: Final rule.
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SUMMARY: This rule announces a two-phase toll-rate increase--8.2
percent on January 1, 1997 followed by a 7.5 percent increase on
January 1, 1998. Record traffic demand on the Canal's transit capacity
has necessitated an expanded and accelerated capital program. Absent a
toll increase, the Commission anticipates capital program expenditures
will contribute to a significant deficit in FY's 1996-1998. The toll
increase is legally mandated to produce revenues sufficient to cover
all costs of maintenance and operation of the Panama Canal, including
capital for plant replacement, expansion and improvements.
This action increases toll rates for: merchant vessels, yachts,
army and navy transports, colliers, hospital ships, and supply ships,
when carrying passengers or cargo, from $2.21 to $2.39 per PC/UMS Net
Ton in January 1997, and to $2.57 in January 1998; vessels in ballast
without passengers or cargo, from $1.76 to $1.90 per PC/UMS Net Ton in
January 1997, and to $2.04 in January 1998; and other floating craft
including warships, other than transports, colliers, hospital ships,
and supply ships, from $1.23 to $1.33 per ton of displacement in
January 1997, and to $1.43 in January 1998.
[[Page 60611]]
In addition, on July 1, 1997, the Commission will begin applying
new rules of measurement to on-deck, container carrying capacity for
inclusion of a portion of that volume in PC/UMS Net Tonnage.
DATES: Effective date: This rule is effective on January 1, 1997. The
first toll rate increase of 8.2% is applicable January 1, 1997. The on-
deck, container-carrying capacity measurement rule is applicable July
1, 1997. The second toll rate increase of 7.5% is applicable January 1,
1998.
FOR FURTHER INFORMATION CONTACT: John A. Mills, Secretary, Panama Canal
Commission, 1825 I Street NW, Suite 1050, Washington, DC 20006-5402.
Telephone: (202) 634-6441, Fax: (202) 634-6439, Internet E-Mail:
[email protected]; or the Office of Financial Management, Panama Canal
Commission, Balboa Heights, Republic of Panama (Telephone: 011-507-272-
3194, Fax: 011-507-272-3040).
SUPPLEMENTARY INFORMATION: On September 3, 1996, a notice of proposed
rulemaking was published in the Federal Register (61 FR 46407) in which
the Panama Canal Commission (PCC) proposed a two-phase toll-rate
increase--8.2 percent in January 1, 1997 and 7.5 percent in January 1,
1998. This was coupled with an amendment to become effective January 1,
1997 to apply rules of measurement which would include in PC/UMS Net
Tonnage a portion of the volume of the container-carrying capacity on
or above the main deck. The notice of proposed rulemaking also provided
that, if for any reason, the on-deck measurement provision was not
adopted as proposed, the general toll-rate increase would be adjusted
to 8.7 and 7.9 percent, respectively.
To ensure maximum notice and participation in the rulemaking
process, PCC issued a press release on August 19, 1996 that was
distributed to more than 125 publications worldwide, including special
business and shipping publications as well as all major news services.
Information on the proposal was also faxed directly to approximately
400 shipowners and operators, maritime organizations and port
authorities. Additionally, the press release and the analysis were made
available in the Internet (http://www.pananet.com/pancanal). The
Administrator personally sent letters via facsimile on August 21, 1996
to the 40 top users of the Canal to advise them that they would each be
called to discuss the proposal to be published in the Federal Register.
Over 25 of these users were subsequently reached and encouraged to
comment on the proposal before any decisions were finalized. On August
28, 1996, in an effort to further disseminate information on the
proposal, the Administrator and a delegation from the PCC staff met
with the Camara Maritima de Panama (Panama Maritime Chamber), whose
members represent Canal users from around the world. On September 25,
1996 a follow-up letter was faxed to 40 top users of the Canal and 311
shipowners, operators and maritime organizations encouraging comments
and attendance at the public hearings. Thereafter, the Administrator
met or corresponded with various shipping interests explaining the
proposal and soliciting input from the customers.
At that time, a written analysis explaining the proposed toll
increase was made available to interested parties. This analysis stated
that traffic levels were rapidly approaching the Canal's existing
operating capacity which, unless addressed, could undermine PCC's
longstanding commitment to quality customer service, including the
target average 24-hour Canal Waters Time (CWT). To meet this challenge,
PCC's Board of Directors approved management's recommendation to
increase and accelerate the capital program to ensure a Canal operating
capacity that meets future traffic demands and an acceptable long-term
quality of transit service. More specifically, the PCC's capital
program for FY's 1996-1998 totals $248 million; an additional $228
million is programmed for FY's 1999-2000. This capital program will
augment and advance the implementation of many modernization and
improvement programs in response to projected customer requirements.
The toll rate increase was established to meet the projected
significant deficits in FY's 1996-1998 alone from capital expenditures
to expand Canal operating capacity. At current toll rates, total
operating expenses and capital expenditure requirements are estimated
to exceed revenues by $2.2 million in FY 1996, $34.5 million in FY 1997
and $69.7 million in FY 1998.
The proposed rulemaking document explained why costs of PCC's
expanded capital program prompted PCC to focus on the exclusion of on-
deck earning capacity from its toll base. The analysis noted PCC's
belief that the increasing use of on-deck spaces for the carriage of
cargo has resulted in an inequitable distribution of operating costs.
The Commission proposed to implement measurement rules to more
accurately reflect the true earning capacity of modern vessels.
Specifically, the measurement rules here adopted authorize PCC to
determine which ships qualify for the assessment and to calculate the
corresponding volume of on-deck container capacity (VMC). The VMC is
then multiplied by the fraction .031 to establish the portion included
in PC/UMS Net Tonnage.
Written comments were solicited and received from the public and
hearings were held in Washington, DC on October 8, 1996, and in Panama,
Republic of Panama on October 10, 1996. A complete record of the
proceedings, including the data and comments submitted by interested
parties, are included in the Panel Report to the Board of Directors.
The views presented by interested parties, as well as other relevant
information, were considered by the Board of Directors during its
Executive Session on November 22, 1996. Based upon this review, and in
order to meet previously reviewed traffic forecasts, requirement to
expand Canal operating capacity, justification for an accelerated
capital program, impact of that program on future deficits, funding
alternatives, consequences to the Canal's competitive position and
international commerce, and other related information, the Board voted
to approve a two-phase toll-rate increase--8.2 percent on January 1,
1997 followed by a 7.5 percent in increase on January 1, 1998.
The Board also approved the on-deck measurement rule, but agreed to
delay its implementation until July 1, 1997. The Board concluded that
consistency in all Canal toll assessments required that tolls be based
on net vessel tons of earning capacity in open spaces on or above the
main deck as well as in enclosed spaces below deck. The system adopted
captures most of this earning capacity in an easily-administered
process by including a fraction of on-deck container-carrying capacity
in PC/UMS Net Tonnage. The six-month implementation delay responds to
Canal customers who have expressed concerns about the specific impact
of the measurement rule change on individual vessels. Postponing
implementation of the measurement rule for six months will allow
customers to calculate the actual impact of the change based on new
tonnage certificates PCC will issue before July 1, 1997.
The Panel Report more fully addresses the comments submitted by
interested parties, either in writing or in testimony at one of the
public hearings. In the Report, the Panel has attempted to respond to
the most significant comments. On or after December 2,
[[Page 60612]]
1996, upon request, the Panel Report will be provided to any interested
party.
Section 1602(b) of the Panama Canal Act of 1979, as amended, 22
U.S.C. 3792(b), requires that Canal tolls be prescribed at rates
calculated to produce revenues to cover nearly as practicable, all
costs of maintaining and operating the Panama Canal as well as to
provide capital for plant replacement, expansion and improvements. It
is evident from all the information that for the Canal to remain self-
sufficient, the two-phase toll increase and the adoption of measurement
rules applicable to on-deck, container carrying capacity are required.
List of Subjects in 35 CFR Part 133 and 135
Measurement, Navigation, Panama Canal, Vessels.
Accordingly, 35 CFR parts 133 and 135 are amended as follows:
PART 133--TOLLS FOR USE OF CANAL
1. The authority citation for part 133 is revised to read as
follows:
Authority: 22 U.S.C. 3791-3792, 3794.
2. Section 133.1 is revised to read as follows:
Sec. 133.1 Rates of Toll.
The following rates of toll shall be paid by vessels using the
Panama Canal:
(a) On merchant vessels, yachts, army and navy transports,
colliers, hospital ships, and supply ships, when carrying passengers or
cargo, $2.39 per PC/UMS Net Ton--that is, the Net Tonnage determined in
accordance with part 135 of this chapter, effective January 1, 1997,
and $2.57 per PC/UMS Net Ton, effective January 1, 1998.
(b) On vessels in ballast without passengers or cargo, $1.90 per
PC/UMS Net Ton, effective January 1, 1997, and $2.04 per PC/UMS Net
Ton, effective January 1, 1998.
(c) On other floating craft including warships, other than
transports, colliers, hospital ships, and supply ships, $1.33 per ton
of displacement, effective January 1, 1997, and $1.43 per ton of
displacement, effective January 1, 1998.
PART 135--RULES FOR MEASUREMENT OF VESSELS
3. The authority citation for part 135 is revised to read as
follows:
Authority: 22 U.S.C. 3791-3792, 3794.
4. Section 135.2 is amended by adding at the end thereof a new
sentence to read as follows:
Sec. 135.2 Vessels generally to present tonnage certificate or be
measured.
* * * In addition, these same vessels shall provide documentation,
such as plans and classification certificates, with sufficient
information to determine the volume of the maximum capacity of
containers that may be carried on or above the upper deck, or VMC as
defined in section 135.13(a)(11).
5. In Sec. 135.3, the heading and paragraph (a) are revised to read
as follows:
Sec. 135.3 Determination of total volume and VMC.
(a) Determination of total volume and VMC used to calculate PC/UMS
Net Tonnage shall be carried out by the Panama Canal Commission. In so
doing, however, the Commission may rely upon total volume and VMC
information provided by such officials as are authorized by national
governments to undertake surveys and issue national tonnage
certificates. Total volume and VMC information presented to the
Commission shall be subject to verification, and if necessary,
correction as necessary to ensure accuracy to a degree acceptable to
the Commission.
* * * * *
6. Section 135.13 is amended by revising the formula for
determining PC/UMS Net Tonnage in paragraph (a), by adding new
paragraphs (a)(10) and (a)(11), and by revising paragraph (b) to read
as follows:
Sec. 135.13 Determination of PC/UMS Net Tonnage.
* * * * *
(a) * * *
PC/UMS Net Tonnage=K4(V)+K5(V) +CF1(VMC)
* * * * *
(10) ``CF1''=.031 for ships which the Commission determines
are designed to carry containers on or above the upper deck; otherwise
``CF1''=0. In making the foregoing determination, the Commission
may consider documentation provided by such officials as are authorized
by national governments to undertake surveys and issue national tonnage
certificates.
(11) ``VMC''=the volume (in cubic meters) of maximum capacity of
the containers that can be carried on or above the upper deck. This
volume may be calculated by multiplying the maximum number of
containers by 29.2 m3, or by other generally accepted methods that
meet the Commission's accuracy standards. VMC will not include any
container capacity that is included in ``V''.
(b) For vessels subject to transitional relief measures, the
existing Panama Canal Net Tonnage as specified on the certificate
issued by the Commission plus CF1 (VMC) shall be the PC/UMS Net
Tonnage. In such case, the formula for determining PC/UMS Net Tonnage
is: PC/UMS Net Tonnage=Panama Canal Net Tonnage+CF1(VMC).
7. Section 135.14 is amended by adding a new paragraph (d) to read
as follows:
Sec. 135.14 Change of PC/UMS Net Tonnage.
* * * * *
(d) If the VMC of a vessel is changed due to any physical
modification after the vessel's PC/UMS Net Tonnage has been determined
at the Canal, the PC/UMS Net Tonnage may be revised by the Commission.
8. Section 135.15 is amended by adding new paragraphs (d) and (e),
to read as follows:
Sec. 135.15 Calculation of volumes.
* * * * *
(d) VMC may be calculated by multiplying the maximum number of
containers by 29.2 m3, or by other generally accepted methods that
meet the Commission's accuracy standards.
(e) For purposes of this part, the outside dimension of a container
is 8 ft. x 8 ft. x 20 ft., or 36.25 m3. These parameters will be
used for determining the maximum above-deck container capacity.
9. Section 135.31 is amended by adding at the end thereof a new
sentence to read as follows:
Sec. 135.31 Transitional relief measures.
* * * Vessels subject to relief measures shall provide Canal
authorities with sufficient documentation, such as plans and
classification certificates, for the Commission to determine the VMC.
10. Section 135.41 is amended by revising the first sentence to
read as follows:
Sec. 135.41 Measurement of vessels when volume information is not
available.
When an ITC 69 or suitable substitute and documentation for the
calculation of the VMC are not presented, or when the certificate,
substitute or VMC documentation presented does not meet accuracy
standards acceptable to the Commission, vessels will be measured in a
manner that will include the entire cubical contents of V and VMC as
defined in this part. * * *
11. Section 135.42 is amended by adding a new paragraph (c) to read
as follows:
Sec. 135.42 Measurement of vessels when tonnage cannot be otherwise
ascertained.
* * * * *
[[Page 60613]]
(c) VMC may be determined by any accepted method or combination of
methods, including but not limited to, simple geometric formulas,
multiplication of a container by 29.2 m3, or other standard
mathematical formula. The on-deck container capacity of a vessel for
VMC purposes will be determined by the Commission.
Dated: November 25, 1996.
John A. Mills,
Secretary, Panama Canal Commission.
[FR Doc. 96-30488 Filed 11-27-96; 8:45 am]
BILLING CODE 3640-04-P