[Federal Register Volume 62, Number 67 (Tuesday, April 8, 1997)]
[Proposed Rules]
[Pages 17008-17022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8509]



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_______________________________________________________________________

Part III





Department of Transportation





_______________________________________________________________________



Coast Guard



_______________________________________________________________________



46 CFR Part 8



Streamlined Inspection Program; Proposed Rule

  Federal Register /Vol. 62, No. 67 / Tuesday, April 8, 1997 / Proposed 
Rules  

[[Page 17008]]



DEPARTMENT OF TRANSPORTATION

Coast Guard

46 CFR Part 8

[CGD 96-055]
RIN 2115-AF37


Streamlined Inspection Program

AGENCY: Coast Guard, DOT.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Coast Guard proposes to establish an optional Streamlined 
Inspection Program (SIP) to provide owners and operators of U.S. 
documented or registered vessels an alternative method of complying 
with Coast Guard inspection requirements. Vessel owners or operators 
would have their own personnel periodically perform many of the tests 
and examinations conducted by Coast Guard marine inspectors. Vessel 
owners and operators opting to participate in the program would 
maintain a vessel in compliance with a Vessel Action Plan (VAP). The 
Coast Guard expects that participating vessels would continuously meet 
a higher level of safety and inspection readiness throughout the 
inspection cycle.

DATES: Comments must be received on or before July 7, 1997.

ADDRESSES: Mail comments to the Executive Secretary, Marine Safety 
Council (G-LRA/3406) [CGD 96-055], U.S. Coast Guard Headquarters, 2100 
Second Street SW., Washington, DC 20593-0001, or deliver them to room 
3406 at the same address between 9:30 a.m. and 2 p.m., Monday through 
Friday, except Federal holidays. The telephone number is (202) 267-
1477.
    Comments on collection-of-information requirements must be mailed 
also to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, 725 17th Street NW., Washington, DC 20593, ATTN: 
Desk Officer, U.S. Coast Guard.
    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 9:30 a.m. and 2 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: CDR Mark D. Bobal, Vessel and Facility 
Operating Standards Division (G-MSO-2), U.S. Coast Guard Headquarters, 
2100 Second Street, SW., Washington, DC 20593-0001, telephone (202) 
267-1093.

SUPPLEMENTARY INFORMATION:

Request for Comments

    The Coast Guard encourages interested persons to participate in 
this rulem aking by submitting written data, views, or arguments. 
Persons submitting comments should include their names and addresses, 
identify this rulemaking [CGD 96-055] 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 reason 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 meeting at a time and place announced by a later document in the 
Federal Register.

Background and Purpose

    Title 46 U.S.C. 3306 authorizes the Coast Guard to prescribe 
regulations necessary to carry out the inspection of vessels required 
to be inspected under 46 U.S.C. 3301. The inspection of vessels 
identified in 46 U.S.C. 3301 is required by statute; however, the 
specific procedures for conducting inspection are set out in Coast 
Guard regulations.
    In 1992, as part of an initiative known as Maritime Regulatory 
Reform, the Coast Guard considered a number of alternatives for 
inspection of U.S. documented or registered vessels. Two of these 
alternatives are the Alternate Compliance Program (ACP)(46 CFR part 8) 
and the proposed Streamlined Inspection Program (SIP).
    The SIP would be an optional alternative inspection program for 
owners and operators of U.S. documented or registered vessels,. The 
objective of the SIP would be to have vessels participate in a constant 
state of regulatory compliance rather than the traditional cyclical 
readiness associated with vessels that must undergo Coast Guard 
periodic inspections. Under this alternative, the vessel owner or 
operator would work with a Coast Guard representative to develop a 
Company Action Plan (CAP) and a Vessel Action Plan (VAP). A CAP 
describes the company's organization and its commitment to the SIP. The 
CAP also details how the company would train its employees on their 
specific SIP responsibilities. The VAP describes the Coast Guard 
regulations that apply to the vessel and the company's tailored plans 
for its employees to properly examine vessel systems and ensure these 
systems operate safely. To simplify the CAP and the VAP and to provide 
consistency throughout the country, the Coast Guard would provide 
specific guidance for prospective SIP companies and Coast Guard 
personnel. These guidance documents would be published for each 
regulatory subchapter applicable to particular types of vessels (e.g., 
46 CFR chapter I, subchapters T, K, H, L, I, and D). Plans would 
contain detailed procedures for periodic examination and testing of 
vessel equipment and systems by company employees.
    To provide flexibility and to encourage greater participation in 
the SIP, waiver provisions for the SIP procedural requirements are 
included in this proposed rule. A company could request a waiver for 
any provision of the proposed SIP regulations. After the cognizant OCMI 
has reviewed the request, waivers would be considered on a case-by-case 
basis by the Coast Guard District Commander. For example, a waiver 
could be granted for a company to allow enrollment of a vessel that 
does not meet the 3-year ownership rule prior to the date of 
application as proposed in Sec. 8.515. The waiver provisions in this 
proposed rule do not affect the equipment, operating, or other 
requirements of the regulatory subchapter applicable to the vessel.
    The SIP would be premised on responsible company personnel 
performing vessel system examinations at a frequency ordinarily greater 
than, but at least equal to, examinations conducted by Coast Guard 
marine inspectors. The Coast Guard would continue to certificate 
vessels enrolled in the SIP and ensure that they meet applicable safety 
requirements. Under SIP, the company would have an interactive role in 
ensuring compliance with applicable laws and regulations. By 
participating in the development of a VAP with the Coast Guard, the 
company has greater control of its vessels' operations and procedures, 
and will be able to measure the success of the SIP. The CAP and VAP are 
expected to be dynamic working documents that would require continuous 
maintenance and periodic revision by the company to

[[Page 17009]]

ensure proper administration of its SIP as set forth in this proposed 
rule. A vessel enrolled in the SIP and operating under an approved VAP 
would still be inspected by a Coast Guard marine inspector, but the 
procedures for inspection would be contained in the VAP's Inspection 
Criteria References and the Inspection Schedule and Verification. These 
documents incorporate all inspection requirements for the vessel and 
conform to the inspection subchapters applicable to the vessel.
    To ensure the high standards of the SIP are upheld, the Coast Guard 
is proposing disenrollment criteria. Under this proposal, the 
disenrollment of a vessel from the SIP may take two forms--voluntary 
and involuntary. Voluntary disenrollment would be granted at the 
company's request. Failure to maintain compliance with a CAP or VAP may 
lead to involuntary disenrollment of a company or a vessel. Should this 
occur, the vessel would be inspected under traditional inspection 
methods or inspected under the ACP. Disenrolled companies and vessels 
would have to apply to the cognizant Officer in Charge, Marine 
Inspection (OCMI), if they wanted to participate in the SIP again. 
Companies would have the right to appeal the OCMI determinations under 
this proposed SIP as found in 46 CFR 1.03.
    If vessels choose not to participate in the SIP, these vessels 
would continue to be inspected by the Coast Guard under traditional 
procedures or, perhaps, opt to be inspected by a Recognized 
Classification Society under the ACP.

Discussion of Proposed Rules

    The Coast Guard proposes to add the SIP as an inspection 
alternative for qualified U. S. documented or registered vessels. The 
SIP would include inspections for certification, reinspections, and 
discrepancy follow-ups. Dry-dock examinations would not be included in 
the SIP. Dry-dock examinations would be conducted as prescribed by the 
operational inspection subchapter in 46 CFR chapter I applicable to 
each vessel. As SIP performance data is collected and evaluated by the 
Coast Guard, dry-dock examinations may be added to this program.
    The Coast Guard's proposed process to consider a company and at 
least one of its vessels for the SIP can be broken down into four 
phases as described in the following discussion.

Phase (1): Application

    This phase would begin with a company's application submission to 
the OCMI and end with the OCMI's acceptance or rejection of the 
applicant. Illustration (1) shows the proposed process and lists the 
proposed regulatory sections for each step.

BILLING CODE 4910-14-P

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[GRAPHIC] [TIFF OMITTED] TP08AP97.021



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[GRAPHIC] [TIFF OMITTED] TP08AP97.021



[[Page 17012]]

    The applying company and at least one of its vessels would have to 
meet certain eligibility requirements to be accepted in the SIP. The 
proposal includes a requirement for the company to operate the vessel 
for at least 3 years prior to the SIP application. This ensures that 
the Coast Guard would have sufficient documentation on the vessel's 
operating history to properly evaluate the company and vessel 
application. The Coast Guard is proposing other eligibility 
requirements that would ensure that a vessel has been operating in 
compliance with Coast Guard regulations. For example, the company would 
have to reconcile all overdue civil penalties or user fees and the 
vessel could not have documented material deficiencies which indicate 
operation outside the requirements contained in the COI. These 
documented deficiencies do not apply to the provisions of deviations 
from navigation safety rules (33 CFR 164.51 through 164.55) or sailing 
short (46 CFR 15.725).

Phase (2): Plan Development

    During this phase, the company and vessel personnel would work with 
a Coast Guard SIP Advisor, who would be a qualified Coast Guard marine 
inspector assigned by the OCMI as resources permit. Together they would 
develop the CAP and the VAP(s), the detailed documents that would 
govern how company employees would be trained and would test and 
examine the vessel's systems under the SIP. Illustration (2) shows the 
proposed process and lists the proposed regulatory sections for each 
step.

[[Page 17013]]

[GRAPHIC] [TIFF OMITTED] TP08AP97.022



[[Page 17014]]

    The Coast Guard SIP Advisor would initially help the company to 
develop the CAP and first VAP. After OCMI approval, additional VAPs 
would be created addressing other company vessel's and their specific 
equipment and systems. Development of the CAP and VAP(s) is an 
iterative process. The CAP and VAP may need to be revised to address 
concerns such as vessel specific equipment or personnel training needs. 
This planning phase would end with OCMI approval of all VAP(s) and any 
vessels would then enter the operational evaluation phase.

Phase (3): Operational Evaluation

    During this phase, a participating vessel would be operated under 
its VAP and inspected by the Coast Guard SIP Advisor in accordance with 
the VAP. The company would train its employees to follow procedures in 
the VAP. Illustration (3) shows the proposed process and lists the 
proposed regulatory sections for each step.

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[GRAPHIC] [TIFF OMITTED] TP08AP97.023




[[Page 17016]]


    After OCMI approval of the CAP and VAP(s), the company would begin 
implementation of its SIP. This would be a two-step process consisting 
of employee training and a SIP trial period. Company training would 
provide company employees the skills they need to perform their 
specific SIP responsibilities.
    When the training is completed, a trial period of at least 3 months 
would begin to test the effectiveness of the VAP on each vessel. During 
the trial period, problems would be documented by company personnel and 
the Coast Guard SIP Advisor. The company may be required to modify its 
VAP procedures, if necessary.

Phase (4): Enrollment

    Following a successful operational evaluation phase, the cognizant 
OCMI would enroll a vessel in the SIP and authorize full implementation 
of the SIP through a specific endorsement on the vessel's COI. 
Illustration (4) shows the proposed process and lists the proposed 
regulatory sections for each step.

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[GRAPHIC] [TIFF OMITTED] TP08AP97.024



BILLING CODE 4910-14-C

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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. The Coast 
Guard expects this proposal to provide an economic benefit to the 
owners and operators of U.S. documented or registered vessels. 
Currently, 11,800 U.S. documented or registered vessels may be eligible 
to participate in this optional Streamlined Inspection Program (SIP). 
Entrance into a SIP is voluntary. Because the program is new, it is 
difficult to estimate how many vessel owners will choose to develop a 
Vessel Action Plan (VAP) and seek enrollment. Some Coast Guard offices 
have been working with company owners on prototype programs that are 
similar to the proposed SIP.
    Over the next 3 years, the Coast Guard estimates that the following 
number of vessels would voluntarily enroll in the SIP:
     274 small passenger vessels (subchapter T).
     78 small passenger vessels (subchapter K).
     48 large passenger vessels (subchapter H).
     131 offshore supply vessels (subchapter L).
     29 cargo vessels (subchapter I).
     4 tank ships (subchapter D).
     942 tank barges or oil spill response vessels (OSRVs) 
(subchapter D or O).
    These estimates of vessel enrollment reflect both the number of 
vessels presently in prototype programs similar to the proposed SIP and 
the number of vessels that could enter in the SIP within the next 3 
years.

Industry Cost

    Cost estimates for the proposed SIP were based on the incremental 
costs company owners and operators have incurred participating in 
prototype programs similar to the proposed SIP. Company owners and 
operators would have different economic impacts from this program 
depending on the number, class, and size of the vessels that they enter 
in the program. The time and resources an owner or operator may spend 
developing the VAP would vary depending on the vessel's system 
complexity (simple tank barge systems or multi-faceted large passenger 
vessel systems), the current company management infrastructure 
(availability of support staff, system expertise and strength of 
organizational policies), and the number of crewmembers or employees 
involved with the plan's implementation. The company time spent 
developing and implementing the VAP(s) is considered part of this 
proposal's collection-of-information burden.
    Under this proposal, vessel owners and operators would incur some 
SIP implementation training costs. These costs reflect a slight 
increase in existing crew or employee training costs to ensure 
responsible personnel have the skills needed to conduct maintenance and 
examinations of vessel equipment a'nd systems required by the VAP.
    One small passenger vessel owner (regulated under subchapter K), 
currently in a prototype program estimated that training on the VAP 
took approximately 35 hours for four employees required to properly 
conduct and record the tests and examinations under the VAP. Based on 
an hourly salary of $16 for the trainer, and an average hourly salary 
of $13 for each of the four employees, a one-time training cost is 
estimated to be $2,380 for a similar passenger vessel.
    A tank barge owner currently in a prototype program estimated that 
training on the VAP took approximately 40 days for 16 employees 
required to conduct and record examinations under the VAP. Based on an 
8-hour training day, an hourly salary of $33.65 for the trainer, and an 
average hourly salary of $25 for each of the employees, the training 
cost is estimated to be $138,770 for a similar 200-barge fleet.
    One-time training costs for vessels in the SIP is estimated to 
range from $700 ($138,770 divided by a 200-simple-system fleet) to 
$3,000 (for one large multi-system vessel) per vessel. Once the VAP is 
approved and the vessel is enrolled in the SIP, it was assumed that any 
further training would be incorporated into established company 
training and vessel maintenance programs at little or no additional 
cost. Therefore, recurring training costs were not included in the cost 
estimates for this proposal.
    Some owners and operators participating in prototype programs 
purchased computers and other administrative items to assist in the 
collation of plan information. While a computer could reduce the 
administrative time spent on developing the VAP, a company would not be 
required to have a computer in this proposal. Because a company could 
meet all of the SIP criteria without a computer, no equipment costs 
were included in the cost estimate for this proposal. The Coast Guard 
specifically solicits comments on potential training costs or other 
costs companies may incur if voluntarily enrolled in SIP.

Industry Benefits

    Benefits from the proposed SIP are expected to vary and are not 
currently quantifiable. Participants in prototype programs stated that 
the cost to participate and maintain this type of voluntary program has 
been partially offset by an increased availability of their vessels for 
profit-making ventures. Some Coast Guard marine inspectors have noted 
as much as a 50 percent reduction in their onboard inspection time on 
vessels participating in a prototype program. Other benefits have also 
been reported by prototype program participants. These participants 
reported that they have experienced the following benefits:
     The vessel's material condition was kept at a consistently 
high level and there were fewer major repairs.
     The company's cost of maintaining the vessel in regulatory 
compliance was reduced and expenses were more evenly distributed over 
time.
     The licensed mariners recognized their role in regulatory 
compliance and welcomed the empowerment to conduct the procedures 
specified in the VAP.
     The unlicensed crew experienced more rapid professional 
growth as they were trained and became familiar with conducting the 
step-by-step verification procedures.
     The communication between the company and the Coast Guard 
was open and problem-solving.
     The vessel's working environment was better than it was 
under the traditional inspection program.
     There were fewer insurance claims and personnel injuries.
     The vessel's maintenance records provide more information 
and are better than the records the company required on its own.
    There were no monetary estimates for the value of these benefits. 
The Coast Guard specifically seeks comments on these potential benefits 
and their value for this proposed program.

User Fees

    The Coast Guard expects that once implemented, the proposed SIP 
would result in fewer onboard Coast Guard inspection hours required to 
inspect and

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certify participating vessels. This proposal, however, would not change 
existing vessel inspection user fees. When sufficient data exists 
regarding the Coast Guard costs required to administer the new program, 
the Coast Guard plans to review the existing user fee structure to 
determine if a reduction in fees is warranted.

Government Costs

    This proposal has short-term costs to the Coast Guard but, in the 
long-term, will save resources. In the initial implementation of the 
proposed SIP, Coast Guard inspectors would need to review company 
applications, assist companies in plan development, and oversee the 
operational implementation of the plan. The time required by this 
program varies depending on the type of vessel and the current company 
management infrastructure. It may take the Coast Guard as little as 3 
hours to verify a tank barge company's eligibility, 18 hours to assist 
in developing and reviewing its plan, and 8 hours to oversee its 
operation prior to a favorable assessment of the program by the Coast 
Guard marine inspector. However, the Coast Guard may take significantly 
more time to assist in developing, reviewing, and overseeing the plans 
and operation of a large passenger vessel because of its complex 
onboard systems and the large number of company personnel involved in 
managing the SIP. After the initial investment of Coast Guard resources 
(time and training) to assist vessel personnel with their plans, the 
Coast Guard expects to reduce the amount of time taken to inspect and 
certify SIP enrolled vessels.

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 this proposal to have a positive economic 
impact for owners and operators who choose to participate in the SIP. 
Approximately 1,388 owners and operators may volunteer for the proposed 
SIP within the next 3 years. Of these, 334 small passenger vessels, 52 
offshore supply vessels, and 94 tank barges or OSRV's are estimated to 
be owned by small entities. Under Section 601 of the Regulatory 
Flexibility Act, the Coast Guard has provided a flexible approach which 
meets the needs of each company and its vessels and would benefit any 
small businesses choosing to enter the proposed program. This proposal 
would have no impact on vessel owners who do not choose to participate 
in the program.
    This proposal would provide an optional way of complying with 
existing inspection regulations and would only have an economic impact 
if the vessel owner chooses to use the SIP instead of the existing 
Coast Guard scheduled inspection program. For a small entity, plan 
development may be too large an initial investment recoverable after 
too long a time for them to see the benefits. To assist small entities 
in plan development, the Coast Guard intends to provide detailed 
guidance tailored to the small passenger vessel operator and to other 
small entities that operate other vessel types. The Coast Guard 
proposal also provides for one-on-one time with Coast Guard inspectors 
to assist in plan development. Benefits from the proposed SIP are 
expected to be especially positive to those small entities with more 
than one vessel in the program because after developing the first CAP 
and VAP, costs would be minimal for developing VAP(s) for the remaining 
vessels.
    Because this proposed program is voluntary and provides benefits to 
small entities willing to invest the time and training needed for 
enrollment, 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. If however, you think that your 
business or organization qualifies as a small entity and that this 
proposal would have a significant economic impact on your business or 
organization, please submit a comment to the address under ADDRESSES 
explaining why you think it qualifies and in what way and to what 
degree this proposal would economically affect it.

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 
will provide assistance to small entities to determine how this 
proposed rule applies to them. If you are a small business and need 
assistance understanding the provisions of this proposed rule please 
contact CDR Mark D. Bobal, Vessel and Facility Operating Standards 
Division (G-MSO-2), U.S. Coast Guard Headquarters, 2100 Second Street, 
SW., Washington, DC 20593-0001, telephone (202) 267-1093.

Collection of Information

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et. seq.), the 
Office of Management and Budget (OMB) reviews each rule that contains a 
collection-of-information requirement to determine whether the 
practical value of the information is worth the burden imposed by its 
collection. Collection-of-information requirements include reporting, 
recordkeeping, notification and other similar requirements.
    This proposal contains collection-of-information requirements in 
the following sections: Secs. 8.520, 8.530, 8.535, and 8.550. The 
following particulars apply: DOT NO: 2115-AF37.
    OMB Control No(S).: 2115-0578, 2115-0592, 2115-0071, 2115-0025.
    Administration: U.S. Coast Guard.
    Title: 2115-0578: Various forms and posting requirements under 46 
CFR chapter I, subchapters K and T ``Small Passenger Vessels (under 100 
gross tons).''
    2115-0592: 46 CFR chapter I, subchapter L--Reporting, Recordkeeping 
and Marking Requirements.
    2115-0071: Official Logbook.
    2115-0025: Oil Record Book for Ships.
    Need for Information: Vessel records are needed to document the 
compliance of a vessel with U.S. regulations and law. Company owners or 
operators wishing to enroll their vessel(s) in the program must submit 
the application(s), develop the Vessel Action Plan(s), and keep records 
on plan activities conducted by designated company employees.
    Proposed Use of Information: The information would be used by the 
Coast Guard during vessel inspections to help determine if the vessel 
is in compliance with the requirements necessary for issuance of a 
certificate of inspection (COI).
    Frequency of Response: Records must be kept and reports must be 
submitted whenever the company representative performs activities 
required by the VAP. These activities generally include a crew member 
or company employee completing a checklist for each onboard system on a 
monthly or quarterly basis, depending on the system and the VAP. 
Estimates of the increase in the collection burden differ based on the 
vessel's type, the company's existing operational guides and internal 
inspection documents (if any), and the vessel system knowledge of those 
company personnel assigned to write the plan. The development of the 
VAP

[[Page 17020]]

would be a one-time collection burden. Recurring collection burdens 
would be created when company employees keep records of their 
activities to ensure the plan is being followed. Based on prototype 
programs similar to the proposed SIP, the following collection burdens 
are estimated for each vessel type:
     Small passenger vessel (subchapter T): Vessel Action Plan 
development: 70 hours. Annual report time after plan approval: 9 hours 
in addition to current collections under 2115-0578.
     Small passenger vessel (subchapter K): Vessel Action Plan 
development: 100 hours. Annual report time after plan approval: 12 
hours in addition to current collections under 2115-0578.
     Large passenger vessel (subchapter H):
    Vessel Action Plan development: 100 hours.
    Annual report time after plan approval: 14 hours in addition to 
current collections under 2115-0071.
     Offshore supply vessel (subchapter L):
    Vessel Action Plan development: 60 hours.
    Annual report time after plan approval: 18 hours in addition to 
current collections under 2115-0592.
     Cargo vessel (subchapter I):
    Vessel Action Plan development: 80 hours.
    Annual report time after plan approval: 14 hours in addition to 
current collections under 2115-0071.
     Tank Ship (subchapter D):
    Vessel Action Plan development: 100 hours.
    Annual report time after plan approval: 16 hours in addition to 
current collections under 2115-0071.
     Tank Barge and Oil Spill Response Vessel (subchapter D):
    Vessel Action Plan development: 40 hours.
    Annual report time after plan approval: 3 hours in addition to 
current collections under 2115-0025.
    Burden Estimate: The Coast Guard is seeking an authorized increase 
in the collection-of-information burden for the following existing OMB 
control numbers:
    2115-0578: From 405,608 burden hours to 416,869 hours.
    2115-0592: From 2,051 burden hours to 51,467 hours.
    2115-0071: From 1,750 burden hours to 5,018 hours.
    2115-0025: From 10,418 burden hours to 49,559 hours.
    Respondents: The number of respondents for each collection will be 
amended as follows:
    2115-0578: Remains the same.
    2115-0592: Increases from 45 respondents to 528 respondents.
    2115-0071: Remains the same.
    2115-0025: Increases from 586 respondents to 2,516 respondents.
    Form(s): None.
    Average Burden Hours per Respondent: Those respondents voluntarily 
enrolled in the SIP would have an increased average burden hour per 
respondent as follows:
    From 41 hours to 76 hours per respondent for 2115-0578.
    From 46 hours to 78 hours per respondent for 2115-0592.
    From 5 hours to 46 hours per respondent for 2115-0071.
    From 18 hours to 33 hours per respondent for 2115-0025.
    The Coast Guard has submitted the proposed requirements to the OMB 
for review under section 3504(h) of the Paperwork Reduction Act (44 
U.S.C. 3501 et seq.). Persons submitting comments on the requirements 
should submit their comments both to OMB and the Coast Guard where 
indicated under ADDRESSES.

Federalism

    The Coast Guard has analyzed this rule under the principles and 
criteria contained in Executive Order 12612 and has determined that 
this rule does not have sufficient federalism implications to warrant a 
Federalism Assessment.
    The authority to regulate safety requirements of U.S. vessels is 
delegated to the Coast Guard by statute. Furthermore, because these 
vessels tend to move from port to port in the national market place, 
these safety requirements need to be national in scope to avoid 
numerous, unreasonable and burdensome variances. Therefore, this action 
would preempt State action addressing the same matter.

Environment

    The Coast Guard considered the environmental impact of this rule 
and concluded that under paragraph 2.B.2 of Commandant Instruction 
M16475.1B, this rule is categorically excluded from further 
environmental documentation. This rule is excluded based on its 
inspection and equipment aspects. A Categorical Exclusion Determination 
is available in the docket for inspection or copying where indicated 
under ADDRESSES.

List of Subjects in 46 CFR Part 8

    Administrative practice and procedures, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements, 
Incorporation by reference.

    For the reasons set out in the preamble, the Coast Guard proposes 
to amend 46 CFR part 8 as follows:

PART 8--VESSEL INSPECTION ALTERNATIVES

    1. The authority citation for part 8 is revised to read as follows:

    Authority: 46 U.S.C. 3103, 3306; 46 U.S.C. 3316, 3703; 49 CFR 
1.45.

    2. Subpart E, consisting of Secs. 8.500 through 8.570, is added to 
read as follows:

Subpart E--Streamlined Inspection Program

Sec.
8.500  Purpose.
8.505  Scope and applicability.
8.510  Definitions.
8.515  Eligibility.
8.520  Application.
8.525  OCMI review and action.
8.530  Plan development and approval.
8.535  Training and operational evaluation.
8.540  Enrollment in SIP.
8.545  Scope of inspection for enrolled vessels.
8.550  Plan review and revisions.
8.555  Disenrollment.
8.560  Waiver.
8.565  Appeal.
8.570  Interim approval of prototype company or vessel plans.

Subpart E--Streamlined Inspection Program


Sec. 8.500  Purpose.

    (a) This subpart establishes the Streamlined Inspection Program 
(SIP) which is an alternative inspection program for U.S. documented or 
registered vessels required to maintain a valid certificate of 
inspection (COI).
    (b) This subpart sets out the eligibility and application 
requirements and the plan development and approval procedures for 
enrollment of companies and their vessels in the SIP.


Sec. 8.505  Scope and applicability.

    (a) This subpart applies to U.S. documented or registered vessels 
that have a valid COI.
    (b) A vessel enrolled in the SIP will be inspected in accordance 
with its approved Vessel Action Plan (VAP).
    (c) The SIP includes all inspections required to renew and maintain 
a valid COI. The SIP does not include dry-dock examinations, 
unscheduled inspections related to vessel casualties, equipment repair 
or replacement, or vessel modifications. Those inspections will be 
conducted in accordance with the subparts applicable to the vessel.


Sec. 8.510  Definitions.

    The following definitions apply to this subpart:

[[Page 17021]]

    Civil penalty means a final assessment under the provisions of 33 
CFR part 1, subpart 1.07 or part 20 of this chapter.
    Coast Guard SIP Advisor means the Coast Guard marine inspector 
assigned by the Officer in Charge, Marine Inspection (OCMI), to assist 
in the development of an action plan.
    Company means the owner of the vessel or any other organization or 
person, such as the manager or the bareboat charterer, who operates a 
vessel under the SIP.
    Company Action Plan (CAP) means the document describing a company's 
organization, policies, and responsibilities required for participation 
in the SIP.
    Company SIP Agent means the individual who is responsible for the 
Company Action Plan and the Vessel Action Plan development and 
implementation and who has the authority to bind the company to the 
terms of these plans.
    Correction Report means a document which sets out specific vessel 
deficiencies and is used to record their correction by the company.
    Documented deficiency means an incident documented in a Coast Guard 
record in which the condition of a vessel, its equipment, or its 
operation was not in compliance with Coast Guard regulations.
    Exam checklist means the form that is used to record the periodic 
examinations required by the VAP to be conducted by company employees.
    Inspection Criteria References (ICR) means the individual pages in 
the VAP that list each item on the vessel required by regulation to be 
periodically inspected.
    Inspection Schedule and Verification (ISV) means the document that 
lists the items to be inspected and the intervals for their inspection, 
and on which is recorded the completion of required examinations and 
tests conducted by designated company employees.
    Prototype vessel plan means the SIP plan developed for a vessel 
participating in a Coast Guard District- or OCMI-endorsed SIP before 
[Date of publication of the final rule in the Federal Register].
    Reportable casualty means a marine casualty or accident required to 
be reported under 46 CFR part 4, subpart 4.05 of this chapter.
    Streamlined Inspection Program (SIP) means the alternative 
inspection program set out in this subpart.
    Vessel Action Plan (VAP) means the document that prescribes 
procedures for maintenance, examination, and inspection of a vessel 
enrolled in the SIP.


Sec. 8.515  Eligibility.

    (a) The company must--
    (1) Have owned or operated at least one U.S. documented or 
registered vessel for a minimum of 3 consecutive years before the SIP 
application date; and
    (2) Have paid all civil penalties and user fees.
    (b) Each vessel must--
    (1) Have been in operation with an eligible owner or operator for 
at least 3 consecutive years before the SIP application date;
    (2) Have had no revocation of its COI during the 3 years before the 
SIP application date; and
    (3) Have no documented deficiency for the following in the 3 years 
before the SIP application date:
    (i) Any vessel operation inconsistent with the operating details 
specified on its COI.
    (ii) Operating without the required amount of lifesaving appliances 
on board the vessel or with inoperable survival craft.
    (iii) Operating without the required firefighting equipment on 
board the vessel or with an inoperable fire pump(s).
    (iv) Unauthorized modifications to the vessel's approved systems or 
structure, such as fixed firefighting systems, pollution prevention 
arrangements, overcurrent protection devices, or watertight boundary 
arrangements.
    (v) Operating without the required navigation equipment on board 
the vessel or with inoperable navigation equipment.


Sec. 8.520  Application.

    To apply for SIP enrollment, a company will submit an application, 
in writing, to the cognizant OCMI. The application must contain the 
following:
    (a) A statement that the company and prospective vessel(s) meet the 
requirements of Sec. 8.515.
    (b) A summation of the company's current status in relation to 
Sec. 8.530(a).
    (c) The name and official number of the vessel(s) the company 
intends to enroll in the SIP.
    (d) The name and contact information for the Company SIP Agent.


Sec. 8.525  OCMI review and action.

    (a) The cognizant OCMI will review Coast Guard records for the 3 
years before the SIP application date to verify the eligibility of the 
company and each vessel listed in the SIP application.
    (b) If the company and one or more of its vessels meets the 
eligibility requirements contained in Sec. 8.515, the cognizant OCMI 
will notify the company of its eligibility and assign a Coast Guard SIP 
Advisor.
    (c) If, according to Coast Guard records, a company or vessel does 
not meet the eligibility requirements contained in Sec. 8.515, the 
cognizant OCMI will notify the company in writing of its ineligibility 
with a list the reasons for not accepting the company or a vessel.


Sec. 8.530  Plan development and approval.

    The Company SIP Agent will develop the CAP and VAP with guidance 
from the Coast Guard SIP Advisor for OCMI approval.
    (a) Company Action Plan. The CAP shall include at least the 
following:
    (1) A copy of the OCMI CAP approval letter (once the CAP is 
approved).
    (2) An organization commitment statement.
    (3) A company organization chart that includes the name(s) of the 
designated SIP support personnel who will be responsible for 
implementation and oversight of the approved CAP and VAP(s).
    (4) A statement describing the responsibilities and authorities of 
personnel involved in the examination and maintenance of the vessel(s) 
for the company.
    (5) A description of the method the company will use to integrate 
the applicable subpart regulations into its SIP and the method or 
system used to initiate corrective action.
    (6) A description of the company's safety program.
    (7) A description of the company's environmental protection 
program.
    (8) A description of the company's training infrastructure, the 
method used to track and record training for individual employees, and 
the training required for the designated SIP support personnel to 
implement the CAP and the VAP.
    (9) A master list of all SIP documents and ICRs that the company 
intends to use in its VAP(s).
    (10) Appendices for each approved VAP.
    (b) Vessel Action Plan. Each VAP shall include at least the 
following:
    (1) A copy of the OCMI VAP approval letter (once the VAP is 
approved).
    (2) A description of the method that will be used to integrate the 
VAP into the vessel's regular operations.
    (3) Vessel-specific ICRs.
    (4) Vessel-specific ISV forms.
    (5) Vessel-specific exam checklists.
    (6) Correction Reports.
    (c) Plan Approval. The Company SIP Agent will submit the CAP and 
each VAP to the cognizant OCMI for approval. Once approved, a copy of 
the VAP shall be kept on board the vessel.

[[Page 17022]]

Sec. 8.535  Training and operational evaluation.

    When the CAP and VAP(s) have been approved by the cognizant OCMI, 
the company may begin training and operating under the plans. This 
evaluation phase includes the following:
    (a) The company shall provide the designated SIP support personnel 
with training as required by the CAP.
    (b) The vessel must operate and be examined under the VAP for a 
period of at least 3 months.
    (c) During the operational periods, the Coast Guard SIP Adviser 
will conduct an ongoing evaluation of the vessel's operation, the 
training records, and the ability of all designated persons to perform 
their assigned functions under the VAP. The Coast Guard SIP Advisor 
will report periodically to the cognizant OCMI and the Company SIP 
Agent on the vessel's performance, and make recommendations, if needed.
    (e) Revisions recommended under paragraph (c) of this section, or 
any additional operational periods under a revised CAP or VAP as may be 
required by the cognizant OCMI must be completed prior to enrollment.


Sec. 8.540  Enrollment in SIP.

    Upon recommendation of the Coast Guard SIP Advisor, the OCMI may 
issue an enrollment letter to a vessel and endorse the vessel's COI to 
reflect SIP enrollment. Subsequent inspections covered under this 
subpart will be conducted in accordance with the approved VAP.


Sec. 8.545  Scope of inspection for enrolled vessels.

    (a) A Coast Guard marine inspector will conduct required annual and 
follow-on inspections necessary to ensure compliance with Coast Guard 
regulations.
    (b) A Coast Guard marine inspector will conduct the inspections in 
paragraph (a) of this section in accordance with the procedures set out 
in the VAP. These inspections will normally include the following:
    (1) Administrative review. This portion of the inspection consists 
of a review of prior Coast Guard SIP inspection forms, review of the 
contents of the VAP, and review of other certifications of equipment 
and vessel systems.
    (2) SIP performance review. This portion of the inspection consists 
of a review of vessel SIP documentation and records, review of the SIP 
procedures, and a company evaluation of their SIP.
    (3) Materiel review. This portion of the inspection consists of a 
general examination of the vessel, witnessing the examination of 
selected items under the VAP by company designated SIP support 
personnel, inspection of selected items, and witnessing of crew 
participation in drills by the Coast Guard marine inspector.
    (4) Conclusion and recommendations. This portion of the inspection 
contains the Coast Guard marine inspector's evaluation of regulatory 
compliance of the vessel under its VAP.
    (c) A Coast Guard marine inspector may conduct any additional tests 
or examinations of vessel equipment or systems necessary to ensure 
compliance with Coast Guard regulations during an inspection covered in 
paragraph (a) of this section.


Sec. 8.550  Plan review and revisions.

    (a) Mandatory reviews and revisions. The CAP and VAP(s) must be 
reviewed and revised as follows:
    (1) Every 2 years after the plan approval date, the company shall 
review the CAP and update all information required by Sec. 8.530.
    (2) Every 5 years after the plan approval date, the Coast Guard SIP 
Advisor and the Company SIP Agent will review the VAP.
    (3) If a reportable casualty occurs, the cognizant OCMI will review 
the portions of the VAP related to equipment, training, personnel, and 
systems involved in the casualty and determine whether revisions to the 
VAP are appropriate.
    (4) When statutes or regulations change, the appropriate sections 
of the CAP and VAP(s) will be revised.
    (b) Discretionary reviews and revisions. The CAP and VAP(s) may be 
reviewed and revised by the company at any time. The revisions must be 
submitted to the cognizant OCMI for approval.


Sec. 8.555  Disenrollment.

    (a) Voluntary disenrollment. A company may request SIP 
disenrollment (which includes all of its vessels) or may request 
disenrollment of a specific vessel from the SIP by writing to the 
cognizant OCMI. The OCMI will then issue a letter disenrolling the 
vessel or company. Disenrolled vessels will be inspected in accordance 
with the requirements of 46 CFR part 2, subpart 2.01 of this chapter.
    (b) Company disenrollment. The OCMI may issue a letter disenrolling 
the company if the company no longer has at least one enrolled vessel 
or if the company fails to continuously meet the eligibility 
requirements in Sec. 8.515.
    (c) Vessel disenrollment. The OCMI may issue a letter disenrolling 
a vessel if any one or more of the following occurs:
    (1) The sale of the vessel.
    (2) A finalized letter of warning or assessment of a civil penalty 
for--
    (i) Operating outside the scope of the vessel's COI or Stability 
Letter;
    (ii) Not reporting a personnel or material casualty required to be 
reported under 46 CFR part 4; or
    (iii) A material deficiency listed in Sec. 8.515(b)(3).


Sec. 8.560  Waiver.

    (a) A Coast Guard District Commander may waive any requirement of 
this subpart--
    (1) If good cause exists for granting a waiver; and
    (2) If the safety of the vessel and those on board will not be 
adversely affected.
    (b) Requests for waiver of any requirement of this subpart must be 
submitted in writing to the cognizant OCMI for review before forwarding 
to the Coast Guard District Commander for action.
    (c) A copy of each waiver under this section shall be maintained at 
all times in the VAP.


Sec. 8.565  Appeal.

    A company may appeal any decision or action taken under this 
subpart in accordance with 46 CFR part 1, subpart 1.03 of this chapter.


Sec. 8.570  Interim approval of prototype company or vessel plans.

    (a) A company operating under an approved prototype company or 
vessel plan must apply, in writing by [Date 3 months after the 
effective date of the final rule], to the cognizant OCMI for approval 
to continue operating under the plans while revisions are developed to 
bring the prototype company or vessel plan into conformance with this 
subpart. The OCMI may approve the request for a period of up to 3 
years.
    (b) A company that does not request approval as required by 
paragraph (a) of this section or does not obtain approval to continue 
operating under a prototype company or vessel plan by [Date 6 months 
after the effective date of the final rule], may no longer operate 
under the plans and will be inspected in accordance with the 
requirements of 46 CFR part 2, subpart 2.01 of this chapter.

    Dated: March 21, 1997.
J.C. Card,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety 
and Environmental Protection.
[FR Doc. 97-8509 Filed 4-7-97; 8:45 am]
BILLING CODE 4910-14-M