[Federal Register Volume 63, Number 31 (Tuesday, February 17, 1998)]
[Proposed Rules]
[Pages 7744-7745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3890]



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DEPARTMENT OF TRANSPORTATION

Maritime Administration
[Docket No. MARAD-98-3468]
46 CFR Part 298
RIN No. 2133-AB32


Putting Customers First in the Title XI Program

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Advance notice of proposed rulemaking; request for comments

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SUMMARY: The Maritime Administration (MARAD) is soliciting public 
comment on whether MARAD should amend its existing regulations or alter 
its existing administrative practices governing the Title XI 
application process, standards for evaluation and approval of 
applications, and the process and documentation for closing of 
commitments to guarantee obligations issued under 46 CFR part 298 and 
if so, what changes should be made.

DATES: Comments must be received on or before March 19, 1998.

ADDRESSES: Signed, written comments should refer to the docket number 
that appears at the top of this document and must be submitted to the 
Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh Street, S.W., 
Washington, D.C. 20590-001. All comments received will be available for 
examination at the above address between 10 a.m. and 5 p.m., e.t. 
Monday through Friday, except Federal Holidays. An electronic version 
of this document is available on the World Wide Web at http:/dot.gov.

FOR FURTHER INFORMATION CONTACT: Mitchell D. Lax, Director, Office of 
Ship Financing, Maritime Administration, Washington, DC 20590, 
telephone (202) 366-5744.

SUPPLEMENTARY INFORMATION: In response to a 1993 recommendation from 
Vice President Gore's National Performance Review team, President 
Clinton issued Executive Order 12862, September 11, 1993, calling for 
``a revolution within the Federal Government to change the way it does 
business'' by ``putting customers first'' and striving for a 
``customer-driven government'' that matches or exceeds the best service 
available in the private sector. In October 1997, the National 
Performance Review team reported that Federal agencies, implementing 
the Executive Order, had launched a massive effort to improve 
governmental service and had made a noticeable difference.
    On December 1, 1997, in a memorandum to Heads of Operating 
Administrations and Departmental Officers at the United States 
Department of Transportation, Secretary of Transportation Rodney E. 
Slater urged all Departmental officers and heads of Operating 
Administrations to ask their customers ``what is important to them in 
the kinds and quality of services they want and what is their level of 
satisfaction with existing services.'' Secretary Slater emphasized that 
it is ``this customer feedback that will be the basis for improving, 
revising, adding, or deleting standards when it makes sense and, 
ultimately, for helping us become a more customer-focused DOT.'' The 
purpose of this Advance Notice of Proposed Rulemaking (ANPRM) is to 
obtain such customer feedback in connection with the program for 
guarantees of financial obligations authorized by Title XI of the 
Merchant Marine Act, 1936, as amended, 46 App. U.S.C. 1271 et seq. 
(Title XI).
    Title XI authorizes the Secretary of Transportation (Secretary) to 
provide guarantees of debt issued for the purpose of financing or 
refinancing (i) the construction, reconstruction or reconditioning of 
U.S-flag vessels or eligible export vessels built in United States 
shipyards and (ii) the construction of advanced shipbuilding technology 
and modern shipbuilding technology of a general shipyard facility 
located in the United States. Applications for obligation guarantees 
are made to MARAD acting under authority delegated by the Secretary to 
the Maritime Administrator. Prior to execution of a guarantee, MARAD 
must, among other things, make determinations of economic soundness of 
the proposed project and the financial and operating capability of the 
applicant. The Title XI program enables owners of eligible vessels and 
shipyards to obtain long-term financing on terms and conditions that 
may otherwise not be available.
    MARAD requests that its customers, the shipyard and shipowner 
executives, their lawyers, accountants, investment bankers and other 
professionals, who have used or are familiar with the Title XI program, 
provide MARAD with their views about how the Title XI program is 
administered and how it could be improved. MARAD requests that these 
program customers address the application process, the review and 
approval standards employed by MARAD for the issuance of a commitment 
to guarantee obligations, the closing documentation, and the process 
for the issuance of the obligation guarantees. Although all comments 
are welcome, MARAD is particularly interested in comments concerning 
the following specific questions:
    1. Are changes needed in the current application form (Form MA-
163)? What specific changes should be made in the application procedure 
and the application form to make the process more efficient without 
eliminating critical information needed by MARAD to evaluate 
applications properly?
    2. Should there be a separate application form for eligible export 
vessels and a separate application form for shipyard modernizations? 
What specific information in the current application Form MA-163 is 
unnecessary for a proper evaluation of these applications and should be 
deleted? What additional information is needed for these types of 
applications and should be added? Can there be a ``one form fits all 
approach,'' or are there differences of sufficient magnitude to warrant 
separate application forms and procedures? A working draft of a 
possible application form covering shipyard modernization is available 
upon request.
    3. Should MARAD permit the electronic filing of all or part of 
Title XI applications, and what special steps would be necessary to 
ensure privacy of business confidential information to facilitate an 
initiative in this direction?
    4. Do any of the requirements for information on the applicant's 
and operator's qualifications (46 CFR 298.12) seek information which is 
unnecessary or redundant or is not generally required in commercial 
financing transactions of this type? Do they ask sufficient information 
to permit MARAD to screen out inappropriate and inexperienced 
applicants and operators? What specific changes, if any, would you make 
to the regulations?
    5. Do the financial requirements (46 CFR 298.13) request financial 
information which is unnecessary or redundant? Do they seek sufficient 
information to permit MARAD to make valid determinations? Do they pose 
impracticable or excessive tests? What specific changes, if any, would 
you make to the regulations?
    6. Do the requirements for information on the economic soundness 
(46 CFR 298.14) of a proposed project seek information which is 
unnecessary or redundant? Do they provide sufficient information to 
permit MARAD to make valid determinations about the commercial 
viability of an applicant's proposed project in the foreseeable future? 
Do they pose any impractical or excessive tests? What

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specific changes, if any, would you make to the regulations?
    7. On April 17, 1997, the Maritime Administrator issued Maritime 
Administrative Order (MAO) No. 520-1, Amendment 2 to clarify MARAD's 
existing policies and procedures with respect to economic 
considerations employed in evaluating applications for Title XI 
guarantees. The MAO is set out in full below. Should these 
administrative guidelines be placed into the Title XI regulations? 
Please support your reply with an explanation and specific examples of 
the benefits or problems that could inure from making these guidelines 
part of MARAD's regulations.
    8. Do the documentation requirements for a closing on a commitment 
to guarantee obligations as set out in Subpart D of 46 CFR 298, and as 
incorporated into MARAD's standard vessel financing closing documents 
for U.S.-flag and eligible export vessels (which, incidentally, are 
available from MARAD on computer diskette) impose requirements that are 
unnecessary or redundant? What specific changes, if any, would you 
recommend MARAD make to its standard documentation or to its closing 
practices?
    9. Should MARAD create special documents to govern closings on 
commitments to guarantee shipyard modernizations?
    10. MARAD has previously preapproved designs, plans and 
specifications for ships that can be built under the Title XI program. 
Once a shipyard has had a design approved by MARAD, should MARAD waive 
the submission of the plans and specifications normally required by the 
application form? To what extent should MARAD require plans and 
specifications if the proposed ship would deviate from plans and 
specifications that have been previously approved by MARAD?
    Persons interested in the efficient administration of the Title XI 
program are invited to submit written comments on the questions set out 
above, or to raise any other issues. Please make your suggestions and 
views as specific as possible, naming and quoting the practices and 
regulations that you believe should be changed. MARAD may subsequently 
hold a public meeting, if it believes that such a meeting would be 
helpful, to seek further clarification of the written issues raised. 
After consideration of the written comments and oral comments, if a 
public meeting is held, MARAD will decide whether to proceed with any 
specific proposed change to its existing regulations or administrative 
practices. Any changes proposed by MARAD will be the subject of a 
future Notice of Proposed Rulemaking.

    By Order of the Maritime Administrator.

    Dated: February 11, 1998.
Joel C. Richard,
Secretary.
[FR Doc. 98-3890 Filed 2-13-98; 8:45 am]
BILLING CODE 4910-81-P