[Federal Register Volume 62, Number 76 (Monday, April 21, 1997)]
[Rules and Regulations]
[Pages 19229-19233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10231]


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DEPARTMENT OF TRANSPORTATION

Coast Guard

46 CFR Part 2

[CGD 96-067]
RIN 2115-AF40


Vessel Inspection User Fees

AGENCY: Coast Guard, DOT.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule reduces annual vessel inspection user fees for small 
passenger vessels and exempts publicly owned ferries from payment of 
vessel inspection user fees. These changes are required by the Coast 
Guard Authorization Act of 1996. The rule also revises the existing 
discretionary exemption criteria to allow additional vessels to qualify 
for exemption from payment of the annual vessel inspection fee. The 
Coast Guard requests comments on this interim rule.

DATES: This rule is effective April 21, 1997. Comments must be received 
on or before August 19, 1997.

ADDRESSES: Comments should be mailed to the Executive Secretary, Marine 
Safety Council (G-LRA/3406) [CGD 96-067], 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 9:30 a.m. and 2 
p.m., Monday through Friday, except Federal holidays.
    The Executive Secretary maintains the public docket for this 
rulemaking. Comments will becomes 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. The telephone number is (202) 267-1477. For 
inquiries and user fee payment information call, toll free, 1-800-941-
3337.

FOR FURTHER INFORMATION CONTACT: Denise Mursch, Budget and Resources 
Division, Office of Planning and Resources, (G-MRP-2) Marine Safety and 
Environmental Protection (202) 267-0785.

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 96-067] and the specific section of

[[Page 19230]]

this rule 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 acknowledgement 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 rule 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 public 
meeting 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 placed announced by a later notice in 
the Federal Register.

Regulatory Information

    This rule is being published as an interim rule and is being made 
effective on the date of publication. The reductions in annual vessel 
inspection fees for small passenger vessels and the exemption of 
publicly owned ferries from payment of vessel inspection fees are 
required by the Coast Guard Authorization Act of 1996. The changes to 
the discretionary exemption criteria will allow more vessels to qualify 
for exemption from payment of annual vessel inspection fees and will 
reduce the financial burden on qualified vessels. For these reasons, 
the Coast Guard finds good cause, under 5 U.S.C. 553(b) (3) (B) and (d) 
(3), why notice, and public procedure on the notice, before the 
effective date of this rule are unnecessary and this rule should be 
made effective in less than 30 days after publication.

Regulatory Background

    The Omnibus Budget Reconciliation Act of 1990 amended 46 U.S.C. 
2110 and removed long-standing prohibitions against imposing certain 
fees. As amended, 46 U.S.C. 2110 required the establishment and 
collection of user fees for Coast Guard services provided under 
Subtitle II of Title 46, United States Code. The Coast Guard 
subsequently developed user fees for several Subtitle II services, 
including marine personnel licensing and documentation services, vessel 
registration and documentation services, and inspection and examination 
services provided to U.S. and foreign vessels.
    The final rule establishing direct user fees for inspection or 
examination of U.S. and foreign commercial vessels was published in the 
Federal Register (60 FR 13550) on March 13, 1995. That final rule 
established fees in accordance with the criteria provided under 31 
U.S.C. 9701, known as the General User Fee Statute, based on the costs 
of providing Coast Guard vessel inspection services. These costs 
included Coast Guard personnel costs associated with the actual time 
spent inspecting vessels, as well as training, travel, overhead, and 
other administrative and collection costs.
    The published fees for small passenger vessels ranged from $450 for 
DUKW (wheeled amphibious) vessels to $2,585 for small passenger vessels 
over 130 feet. The fees for passenger barges less than 100 gross tons 
(defined as small passenger vessels under 46 CFR 2.10-25) ranged from 
$825 for barges carrying fewer than 150 passengers to $1,110 for barges 
carrying 150 or more passengers.

Discussion of Rules

Fee Caps

    The Coast Guard Authorization Act of 1996 (the Act) limits the 
amounts of the fees that may be charged for vessel inspection services 
provided to small passenger vessels as defined in 46 CFR 2.10-25. The 
Act limits the annual fee for small passenger vessels less than 65 feet 
in length to not more than $300 and for small passenger vessels 65 feet 
or over in length to not more than $600. Current costs of inspecting 
small passenger vessels of all lengths exceed the fee limits set by the 
Act. This rule, therefore, reduces the annual vessel inspection fees 
for small passenger vessels to the limits established under the Act.
    The separate fee categories for DUKW Vessels and Hydrojet Boats 
were first established because costs for inspecting these vessels were 
lower than for other small passenger vessel categories. Coast Guard 
records indicate, however, that all DUKW Vessels and Hydrojet Boats are 
under 65 feet in length and costs of inspecting these vessels exceed 
the Act's $300 cap for small passenger vessels under 65 feet. The 
separate fee categories for these vessels, therefore, are no longer 
necessary and DUKW Vessels and Hydrojet Boats are included in the 
category for small passenger vessels less than 65 feet in length in the 
final rule.

Publicly Owned Ferries.

    The Act prohibits the establishment of a fee or charge for 
inspection or examination under Title 46, U.S. Code, of any publicly 
owned ferry. Small passenger vessels, passenger ships, and passenger 
barges currently operating as ferries pay the annual vessel inspection 
fee for the vessel category to which they belong. No fee category was 
established specifically for ferries. The term publicly owned ferry was 
not defined within existing law or regulation.
    This rule amends 46 CFR 2.10-25 to define the terms publicly owned, 
ferry, political subdivision, State, youth, and non-profit organization 
for the purposes of these regulations and to exempt publicly owned 
ferries from the provisions of 46 CFR part 2.
    The term publicly owned is defined for the purposes of these 
regulations as owned by the federal government or the government of any 
State or political subdivision thereunder.
    The term ferry is defined as a vessel transporting passengers or 
vehicles on a regular run, over the most direct route between a point 
of embarkation and a point of debarkation on lands separated by a body 
of water other than an ocean, or between a point of embarkation and an 
island within the same State.
    The term political subdivision, as used within the definition of 
publicly owned, includes county, district, parish, township, city or 
similar governmental entities established within a State.
    As used within this part, the term State in accordance with 46 
U.S.C. 2101(1)(36) means a State of the United States, Guam, Puerto 
Rico, the Virgin Islands, American Samoa, the District of Columbia, the 
Northern Mariana Islands, and any other territory or possession of the 
Untied States.
    The term Youth is defined for the purposes of these regulations as 
an individual 18 years of age or younger.

Exemption Criteria

    This rule also revises the exemption criteria in 46 CFR 2.10-5 to 
allow some non-profit organizations that do not meet the current 
narrowly-drawn exemption criteria to qualify for exemption from payment 
of fees. Under current regulations, a vessel must be owned or operated 
by an organization that is (1) charitable in nature, (2) not for 
profit, and (3) youth oriented and the vessel must be used exclusively 
for training youth in boating, seamanship, and navigational skills.
    Under 46 U.S.C. 2110(g), exemptions from payment of user fees may 
be granted whenever it is in the public interest to do so. Since May 1, 
1995, the Coast Guard has granted exemptions to only 48 vessels, of 
which 34 are owned or operated by the Outward Bound Organization, two 
by the Boy Scouts of

[[Page 19231]]

America, and the remainder by a variety of other similar organizations.
    At least 29 organizations applied for exemptions but did not meet 
the exemption criteria. Among those organizations denied exemptions was 
the Floating Hospital in New York, a charitable, non-profit 
organization providing medical services to inner city residents of New 
York City at no cost to the patients. The organization did not meet the 
exemption criteria because it was not youth-oriented, and did not train 
youth in boating, navigation, or seamanship. Similarly, a non-profit 
organization that provided enrichment excursions to individuals with a 
disability, regardless of their age, did not meet the criteria because 
it was not specifically youth-oriented.
    Requests for exemption were also received from several non-profit 
organizations providing training to youth aboard the vessels, but which 
offered a curriculum exceeding the criteria specified under current 
regulation. Typically, these programs are centered around marine 
environmental awareness and education. The marine environmental 
awareness training offered to youth aboard these vessels is a goal that 
is within the public interest to promote. It is necessary, however, to 
differentiate between a course in marine environmental studies, and 
environmental vacations consisting of sightseeing, whale watching, or 
other excursions for the enjoyment or appreciation of nature.
    The term not for profit corporation is being changed to the more 
commonly used terminology of non-profit organization. Previously, the 
term had not been defined. This rule defines the term as an 
organization under Internal Revenue Code (I.R.C.) section 501(c) which 
is exempt for the purposes of federal income taxation. The Internal 
Revenue Service requires such organizations to be organized and 
operated exclusively for one or more of the following purposes: (a) 
religious; (b) charitable; (c) scientific; (d) testing for public 
safety; (e) literary; (f) educational; (g) prevention of cruelty to 
children or animals; or (h) to foster national or international sports. 
This rule removes the words charitable in nature from the exemption 
criteria because it is already included in the broader term non-profit 
organization.
    The rule also adds educating youth in a course of marine 
environmental studies; providing excursions for individuals with a 
disability; and providing medical services to the activities in which a 
qualified vessel may be engaged. The term disability means a person 
having a disability as defined by the Americans with Disabilities Act 
(ADA) [42 U.S.C. 12102(2)].

Regulatory Evaluation

    This rule 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 rule 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 Authorization Act of 1996 (the Act) placed a cap on fees charged 
for the inspection of small passenger vessels to reduce the economic 
burden imposed on small businesses. The Act also provided an exemption 
for publicly-owned ferries from the payment of user fees, which 
eliminates costs to State, State agencies, and local governments. 
Implementation of these provisions began on November 1, 1996.
    In addition, the current exemption criteria under 46 U.S.C. 2110(g) 
is being broadened to allow additional exemptions from payments of fees 
in instances where it is clearly within the public interest to do so.
    User fee revenues will be reduced by approximately $2.8 million 
dollars as a result of the cap on small passenger vessels, exemption of 
the publicly-owned ferries, and the broadening of the exemption 
eligibility criteria under 46 U.S.C. 2110(g). The cap on small 
passenger vessels will affect 5,880 vessels and reduce revenues to the 
government and provide savings to the small passenger vessel industry 
in the amount of $2.25 million dollars. The exemption of publicly-owned 
ferries affects 164 vessels and reduces revenues to the government and 
provides a savings to the industry in the amount of $480,000 dollars. 
The broadening of the exemption eligibility is estimated to affect 100 
vessels and will reduce revenues to the government and will provide a 
savings to industry in the amount of $67,000 dollars.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the 
Coast Guard must consider the economic impact on small entities of a 
rule for which a general notice of proposed rulemaking is required. 
``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; (2) governmental jurisdictions with 
populations of less than 50,000; and (3) ``small business concern[s]'' 
as defined by section 3 of the Small Business Act [15 U.S.C. 632(a)]. 
Small businesses are identified under Standard Industrial 
Classification codes and size standards in the table following 13 CFR 
121.201. This rule does not require a general notice of proposed 
rulemaking and, therefore, is exempt from the requirements of the Act. 
Although this rule is exempt, the Coast Guard has reviewed it for 
potential impact on small entities.
    This rule will reduce an existing economic burden on small 
businesses owning inspected small passenger vessels, or that qualify 
for the revised exempt status by lowering or eliminating fees they pay 
for required Coast Guard vessel inspection services. Therefore, the 
Coast Guard's position is that this rule 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 rule will have a significant economic impact on 
your business or organization, please submit a comment (see ADDRESSES) 
explaining why you think it qualifies and in what way and to what 
degree this rule will 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 rule 
applies to them. If you are a small business and need assistance 
understanding the provisions of this rule or applying for an exemption 
under this rule, please contact your local Officer in Charge, Marine 
Inspection (OCMI) or call, toll free, 1-800-941-3337.

Collection of Information

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

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 
the preparation of a

[[Page 19232]]

Federalism Assessment. This rule amends user fees for vessel inspection 
and examination services to cap fees paid for services related to small 
passenger vessels, and exempts publicly owned ferries from payment of 
the fees.

Unfunded Mandates

    Under the Unfunded Mandates Reform Act (Pub. L. 104-4) (the ACT), 
the Coast Guard must consider whether this Interim Rule will result in 
an annual expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million (adjusted annually 
for inflation). Section 205 of the Act also that the Coast Guard 
identify and consider a reasonable number of regulatory alternates, and 
from those alternatives, select the least costly, most cost-effective, 
or least burdensome alternative that achieves the objective of this 
Interim Rule. The rule does not impose additional costs upon any State 
or local government as a result of a mandate imposed upon them as a 
government agency. The completed analysis estimates that this Interim 
rule will provide a total savings of $2.8 million dollars. This rule 
will result in the reduction or elimination of fees paid by State, 
State agencies, and local governments for inspection services provided 
to these categories of vessels owned by such entities.

Environment

    The Coast Guard considered the environmental impact of this rule 
and has concluded that, under paragraph 2.B.2 of Commandant Instruction 
M16475.1B, this rule is categorically excluded from further 
environmental documentation. Paragraph 2.,B.2 of that instruction 
excludes administrative actions and procedural regulations and policies 
that clearly do not have any environmental impacts. A ``Categorical 
Exclusion Determination'' is available in the docket for inspection or 
copying where indicated under ADDRESSES.

List of Subjects in 46 CFR Part 2

    Fees, Marine safety, Vessels.

    For the reasons set out in the preamble, the Coast Guard amends 46 
CFR part 2 as follows:

PART 2--VESSELS INSPECTIONS

    1. The authority citation for part 2 is revised to read as follows:

    Authority: 14 U.S.C. 664; 31 U.S.C. 9701; 33 U.S.C. 1903; 43 
U.S.C. 1333, 1356; 46 U.S.C. 2110, 3306, 3703; E.O. 12234, 45 FR 
58801, 3 CFR 1980 Comp., p. 277; 49 CFR 1.46; Subpart 2.45 also 
issued under the authority of Act Dec 27, 1950, Ch 1155, sections 1, 
2, 64 Stat. 1120 [see 46 U.S.C. App. Note prec. 1].

    2. In Sec. 2.10-1, paragraph (b) is revised to read as follows:


Sec. 2.10-1  Applicability.

* * * * *
    (b) The fees in this subpart do not apply to:
    (1) Vessels being inspected for the initial issuance of a 
Certificate of Inspection;
    (2) Foreign passenger vessels;
    (3) Training vessels operated by State maritime academies;
    (4) Public vessels of the United States except for Maritime 
Administration vessels; and
    (5) Publicly owned ferries.
    3. Section 2.10-5 is revised to read as follows:


Sec. 2.10-5  Exemptions.

    (a) Vessels owned or operated by a non-profit organization may be 
exempted from payment of the fees required by this subpart, only if the 
vessel is used exclusively for one or more of the following:
    (1) Training youth in boating, seamanship, or navigation skills;
    (2) Educating youth in a course of marine environmental studies;
    (3) Providing excursions for persons with disabilities as defined 
under the Americans with Disabilities Act (ADA) [42 U.S.C. 12102(2)]; 
or
    (4) Providing medical services.
    (b) Vessels owned or operated by the Federal government or the 
government of any State or political subdivision thereunder may be 
exempted from the fees required by this subpart provided the vessel is 
used exclusively for one or more of the purposes listed in paragraph 
(a) of this section.
    (c) The term used exclusively in paragraphs (a) and (b) of this 
section does not preclude:
    (1) the carriage of adult volunteers or crew, or
    (2) the vessel's use for fund raising activities without regard to 
the age of the participants aboard the vessel, provided revenues raised 
are for the operation and maintenance of the vessel and that such fund 
raisers are held no more frequently than once a month.
    (d) Vessel owners or operators may submit a written request for 
exemption to the Officer in Charge, Marine Inspection, of the Marine 
Inspection Zone in which the vessel normally operates. The exemption 
request must provide the vessel name, the vessel identification number, 
and evidence that the organization and the vessel meet the criteria set 
forth in this section.
    4. Section 2.10-25 is amended by adding in alphabetical order new 
definitions for Ferry, Non-profit organization, Political subdivision, 
Publicly owned, State and Youth, to read as follows:


Sec. 2.10-25  Definitions.

* * * * *
    Ferry means, a vessel transporting passengers or vehicles on a 
regular run, over the most direct route between a point of embarkation 
and a point of debarkation on lands separated by a body of water other 
than an ocean, or between a point of embarkation and an island within 
the same State.
* * * * *
    Non-profit organization means an organization under Internal 
Revenue Code (I.R.C.) section 501(c) which is exempt for the purposes 
of federal income taxation.
* * * * *
    Political subdivision means a county, district, parish, township, 
city or similar governmental entity established within a State.
    Publicly owned means, owned by (1) the federal government, or (2) 
the government of any State or political subdivision thereunder.
* * * * *
    State means a State of the United States, Guam, Puerto Rico, the 
Virgin Islands, American Samoa, the District of Columbia, the Northern 
Mariana Islands and any other territory or possession of the United 
States.
* * * * *
    Youth means an individual 18 years of age or younger.
* * * * *
    5. In table 2.10-101, the entries for Passenger Barges and for 
Small Passenger Vessels are revised to read as follows:

   Table 2.10-101.--Annual Vessel Inspection Fees for U.S. and Foreign  
               Vessels Requiring Certificate of Inspection              
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*                  *                  *                  *              
                  *                  *                  *               
Passenger Barges:                                                       

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    Less than 100 gross tons and:                                       
        Less than 65 feet in length...........................       300
        65 feet or more in length.............................       600
    100 gross tons or more and:                                         
        Certified for fewer than 150 passengers...............     2,215
        Certified for 150 or more passengers..................     2,525
                                                                        
*                  *                  *                  *              
                  *                  *                  *               
Small Passenger Vessels:                                                
    Less than 65 feet in length...............................       300
    65 feet or more in length.................................       600
                                                                        
*                  *                  *                  *              
                  *                  *                  *               
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    Dated: March 21, 1997.
J.C. Card,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety 
and Environmental Protection.
[FR Doc. 97-10231 Filed 4-18-97; 8:45 am]
BILLING CODE 4910-14-M