[Federal Register Volume 64, Number 130 (Thursday, July 8, 1999)]
[Proposed Rules]
[Pages 36831-36835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17045]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 388

[Docket No. MARAD-1999-5915]
RIN 2133-AB39


Administrative Waivers of the Coastwise Trade Laws for Eligible 
Vessels

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Notice of proposed rulemaking.

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[[Page 36832]]

SUMMARY: The Maritime Administration (MARAD, or we, our or us) is 
seeking public comment on a proposed rule to implement Title V of the 
Coast Guard Authorization Act of 1998. The new law authorizes the 
Secretary of Transportation to waive the U.S.-build and other 
requirements of the Passenger Services Act and Section 27 of the 
Merchant Marine Act, 1920, for eligible vessels to be documented with 
appropriate endorsement for employment in the coastwise trade as small 
passenger vessels or uninspected passenger vessels authorized to carry 
no more than 12 passengers for hire. This administrative process will 
improve the responsiveness of the Federal Government in meeting the 
needs of many vessel-operating small businesses.

DATES: You should submit your comments early enough to ensure that 
Docket Management receives them not later than September 7, 1999.

ADDRESSES: You should mention the docket number that appears at the top 
of this document. You should submit your written comments to the Docket 
Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 
7th St., SW, Washington, DC 20590. Comments may also be submitted by 
electronic means via the Internet at http://dmses.dot.gov/submit/. All 
comments will become part of this docket. You may call Docket 
Management at (202) 366-9324. You may visit the docket room to inspect 
and copy comments at the above address between 10 a.m. and 5 p.m., EDT. 
Monday through Friday, except Federal holidays. An electronic version 
of this document is available on the World Wide Web at http://
dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: You may call Michael Hokana, Office of 
Ports and Domestic Shipping, Maritime Administration, at (202) 366-
0760, or you may write to him at the following address: MAR-832 Room 
7201, 400 Seventh Street, SW, Washington, DC 20590.

SUPPLEMENTARY INFORMATION: By this notice of proposed rulemaking, MARAD 
seeks public comment on an implementation plan for its Small Passenger 
Vessel Waiver Administration Program and related information collection 
requirements. Title V of the Coast Guard Authorization Act of 1998 
(Public Law 105-383) authorizes the Secretary of Transportation to 
grant waivers of certain requirements for the smallest of passenger 
vessels (those carrying twelve or fewer passengers) to operate in the 
coastwise trade.
    Within the Department of Transportation there are two agencies with 
responsibilities related to the coastwise trade laws. The Coast Guard 
issues the vessel documents and endorsements that authorize vessels to 
engage in the coastwise trade. However, the Secretary of Transportation 
has delegated to MARAD the authority to process applications for 
waivers of the coastwise laws and to determine the effect of waivers of 
the coastwise trade laws on United States vessel builders and United 
States-built vessel coastwise trade businesses. We are outlining the 
procedures to be followed in processing applications for waivers, or 
revoking waivers previously granted. Upon grant of a waiver, MARAD will 
notify the applicant and the Coast Guard. Thereafter, you may register 
the vessel so waived with the Coast Guard under the Coast Guard's 
normal procedures, provided the vessel is otherwise eligible.
    Vessels eligible for a waiver of the coastwise trade laws will be 
limited to foreign-built or foreign rebuilt small passenger vessels and 
uninspected passenger vessels as defined by section 2101 of Title 46, 
United States Code. Additionally, vessels requested for consideration 
must be greater than three (3) years old. We will not grant waivers in 
instances where such waiver activity will have an unduly harmful impact 
on U.S. shipyards or U.S.-flag ship operators. Specifically, and in 
order to meet the public comment provisions of Title V, it is our 
intention to publish waiver requests for comment in the Federal 
Register. After a period of time to evaluate comments and assess the 
impact that the proposed waivers will have on the U.S.-flag shipping 
and shipbuilding industry, we will issue a determination.
    In assessing the adverse effect of grant of a particular waiver, we 
may consider sales of vessels of the same type and size and for the 
same trade by domestic shipbuilders. As an example, the grant of a 
waiver for a motor vessel might not have an adverse effect on sales by 
a builder of sailboats. As for adverse effects on coastwise trade 
businesses, we may look at the type of service and geographic location 
of the applicant and the objector. An intended service providing day 
trips for whale watching might not affect a service providing weeklong 
trips on a sailing ship. A charter service in Maine might not affect a 
charter service in California. Each decision will be made on the facts 
of the individual circumstances, including the degree of competition in 
a proposed market.
    We do not have the authority to waive citizenship requirements for 
vessel ownership and documentation. The Coast Guard will ascertain 
whether the shipowner is qualified as a citizen to register a vessel. 
In addition, the Coast Guard, not MARAD, will determine whether a 
particular vessel will be considered a small passenger vessel or an 
uninspected passenger vessel. However, we may refuse to process an 
application if the vessel is not the type eligible for a waiver. 
Prospective applicants for a coastwise trade law waiver may wish to 
consult with the Coast Guard prior to initiating the waiver application 
process with MARAD.
    Under Title V, MARAD also has the authority to revoke coastwise 
endorsements under the limited circumstances where a foreign-built or 
foreign-rebuilt passenger vessel, previously allowed into service, 
substantially changes that service and the vessel is employed other 
than as a small passenger vessel or an uninspected passenger vessel and 
the vessel is having an unduly harmful impact on U.S. vessel builders 
or persons who employ U.S.-built vessels in the domestic trade. The 
procedure for revocation of a MARAD waiver will include the publication 
of a notice in the Federal Register seeking public comments on the 
proposed revocation. Secondly, we will determine the extent of the 
allegedly detrimental activity and, if an undue impact is found, we 
will issue a formal letter of waiver revocation with an appropriate 
grace period. This determination will be sent to the Coast Guard for 
revocation of the vessel's coastwise endorsement.
    MARAD's decisions to grant or deny a waiver and to revoke or not 
revoke a waiver will not be final until after time for review has 
expired. Applicants and persons who submitted comments in response to a 
Federal Register notice may petition the Maritime Administrator to 
review a waiver determination, or request the Maritime Administrator 
not to review a waiver determination. Relatively short time periods are 
provided for this review process.

Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number that appears at the top of this document in your comments. We 
encourage you to write your primary comments in a concise fashion. 
However, you may attach necessary additional documents to your

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comments. There is no limit on the length of the attachments. Please 
submit two copies of your comments, including the attachments, to 
Docket Management at the address given above under ADDRESSES. Comments 
may also be submitted by electronic means via the Internet at http://
dmses.dot.gov/submit/.

How Can I Be Sure That My Comments Were Received?

    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Chief Counsel, Maritime Administration, 
MAR-220, 400 7th Street, SW, Washington, DC 20590. In addition, you 
should submit two copies, from which you have deleted the claimed 
confidential business information, to Docket Management at the address 
given above under ADDRESSES. When you send comments containing 
information claimed to be confidential business information, you should 
include a cover letter setting forth with specificity the basis for any 
such claim.

Will The Agency Consider Late Comments?

    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated 
above under DATES. To the extent possible, we will also consider 
comments that Docket Management receives after that date. If Docket 
Management receives a comment too late for us to consider it in 
developing a final rule, we will consider that comment as an informal 
suggestion for future rulemaking action.

How Can I Read the Comments Submitted by Other People?

    You may read the comments received by Docket Management at the 
address given above under ADDRESSES. The hours of the Docket Room are 
indicated above in the same location. You may also see the comments on 
the Internet. To read the comments on the Internet, take the following 
steps: Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (http://dms.dot.gov/). On that page, click 
on ``search.'' On the next page (http://dms.dot.gov/search/), type in 
the four-digit docket number shown at the beginning of this document. 
Example: If the docket number were ``MARAD-1999-1234,'' you would type 
``1234.'' After typing the docket number, click on ``search.'' On the 
next page, which contains docket summary information for the docket 
that you selected, click on the desired comments. You may download the 
comments.
    Please note that even after the comment closing date, we will 
continue to file relevant information in the Docket, as it becomes 
available. Further, some people may submit late comments. Accordingly, 
we recommend that you periodically check the Docket for new material.

May I Comment on MARAD?s Use of Plain Language?

    This NPRM is one of our first published rulemaking documents under 
the plain language directives. We welcome any comments and suggestions 
on the use and effectiveness of plain language techniques in this 
document or other suggestions on improving our use of plain language.

Rulemaking Analysis and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This proposed rule is not significant according to the Regulatory 
Policies and Procedures of the Department of Transportation (44 FR 
11034; February 26, 1979). This rule is not an economically significant 
regulatory action under section 3(f) of E.O. 12866, because it would 
not have an effect on the economy of $100 million or more. We do not 
anticipate that a preliminary regulatory evaluation will be prepared.

Federalism

    MARAD has analyzed this notice of proposed rulemaking in accordance 
with the principles and criteria contained in Executive Order 12612 and 
has determined that it would not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), MARAD 
must consider whether a notice of proposed rulemaking would have a 
significant economic impact on a substantial number of small entities. 
Based on a review of this proposed rule, MARAD certifies that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities because this regulation does not 
impose any significant burdens on small entities, and we do not expect 
that a substantial number of small entities will be applicants.

Environmental Assessment

    This rule would not significantly affect the environment because 
the small number and small size of vessels admitted to U.S. registry 
under this waiver program would have little or no effect on the 
environment. Accordingly, an Environmental Impact Statement is not 
required under the National Environmental Policy Act of 1969.

Paperwork Reduction Act

    This proposed rulemaking establishes a new requirement for the 
collection of information. The Office of Management and Budget (OMB) 
will be requested to review and approve the information collection 
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 
Sec. 3501, et seq.).
    In accordance with the Paperwork Reduction Act this document 
announces MARAD's intentions to request approval for three years of 
information collection to allow processing of applications for waivers. 
Copies of this request may be obtained from the Division of Domestic 
Shipping at MAR-832 Room 7201, 400 7th Street, SW, Washington, DC 
20590.
    Title of Collection: Application for Waiver of the Coastwise Trade 
Laws for Small Passenger Vessels, 46 CFR Part 388.
    Type of Request: New request for information collection.
    OMB Control Number: 2133-NEW.
    Form Number: None.
    Expiration Date of Approval: Three years following approval by the 
Office of Management and Budget.
    Summary of Collection of Information: Persons desiring waiver of 
the coastwise trade laws affecting small passenger vessels will be 
required to file a written application. No form or particular format 
will be required for the application. However, a minimal amount of 
information about the applicant and the vessel proposed for a waiver 
will be necessary to properly make the determinations required to grant 
a waiver.
    Need for and Use of the Information: The information collected will 
be used to process applications for waiver of the coastwise trade laws 
for small passenger vessels. Without the information it would be 
impossible to know who wants a waiver and whether they qualify for a 
waiver.

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    Description of Respondents: Owners of small passenger vessels.
    Annual Responses: Responses will be a one-time requirement of up to 
approximately 100 respondents per year.
    Annual Burden: 100 hours.

Unfunded Mandates Reform Act

    This proposed rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$100 million or more to either State, local, or tribal governments, in 
the aggregate, or to the private sector, and is the least burdensome 
alternative that achieves the objectives of the rule.

Consultation and Coordination with Indian Tribal Governments

    MARAD believes that regulations evolving from this NPRM would have 
no significant or unique effect on the communities of Indian tribal 
governments when analyzed under the principles and criteria contained 
in Executive Order 13084 (Consultation and Coordination with Indian 
Tribal Governments). Therefore, the funding and consultation 
requirements of this Executive Order would not apply. Nevertheless, 
this NPRM specifically requests comments from affected persons, 
including Indian tribal governments, as to its potential impact.

Impact on Business Processes and Computer Systems (Year 2000)

    Many computers that use two digits to keep track of dates may, on 
January 1, 2000, recognize ``double zero'' not as 2000 but as 1900. 
This glitch, the Year 2000 problem, could cause computers to stop 
running or start generating erroneous data. The Year 2000 problem poses 
a threat to the global economy in which Americans live and work. With 
the help of the President's Council on Year 2000 Conversion, Federal 
agencies are reaching out to increase awareness of the problem and to 
offer support. We do not want to impose new requirements that would 
mandate business process changes when the resources necessary to 
implement those requirements would otherwise be applied to the Year 
2000 problem.
    This NPRM does not propose business process changes or require 
modification to computer systems. Because the NPRM apparently does not 
affect organizations' ability to respond to the Year 2000 problem, we 
do not intend to delay the effectiveness of the proposed requirements 
in the NPRM.

Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 46 CFR Part 388

    Administrative practice and procedure, Maritime carriers, Passenger 
vessels, Reporting and recordkeeping requirements.

    Accordingly, the Maritime Administration proposes to add a new Part 
388 to 46 CFR chapter II, subchapter J, to read as follows:

PART 388--ADMINISTRATIVE WAIVERS OF THE COASTWISE TRADE LAWS

Sec.
388.1  Purpose.
388.2  Definitions.
388.3  Applications; fees.
388.4  Criteria for grant of a waiver.
388.5  Criteria for revocation of a waiver.
388.6  Process.
388.7  Sunset provision.

    Authority: 46 App. U.S.C. 1114(b); Public Law 105-383, 112 Stat. 
3445 (46 U.S.C. 12106 note); 49 CFR 1.66.


Sec. 388.1  Purpose.

    This part prescribes regulations implementing the provisions of 
Title V of Public Law 105-383, 112 Stat. 3445, which grants the 
Secretary of Transportation authority to review and approve 
applications for waiver of the coastwise trade laws to allow the 
carriage of no more than twelve passengers for hire on vessels, which 
are three years old or more, built or rebuilt outside the United 
States, and grants authority for revocation of those waivers.


Sec. 388.2  Definitions.

    For the purposes of this part:
    (a) Coastwise Trade Laws include:
    (1) The Coastwise Endorsement Provision of the Vessel Documentation 
Laws, (46 U.S.C. 12106);
    (2) The Passenger Services Act, section 8 of the Act of June 19, 
1886 (46 App. U.S.C. 289); and
    (3) The Jones Act, section 27 of the Merchant Marine Act, 1920 (46 
App. U.S.C. 883).
    (b) Eligible Vessel means a vessel of five or more tons that is 
either a small passenger vessel or an uninspected passenger vessel 
that--
    (1) Was not built in the United States and is at least 3 years of 
age; or
    (2) If rebuilt, was rebuilt outside the United States at least 3 
years before the certification requested would become effective.
    (c) Secretary means the Secretary of Transportation.
    (d) The terms, small passenger vessel, uninspected passenger vessel 
and passenger for hire have the meaning given such terms by section 
2101 of title 46, United States Code.


Sec. 388.3  Applications; fees.

    (a) You may apply in writing to the Secretary, Maritime 
Administration (MARAD), MAR-120 Room 7210, 400 7th St., SW, Washington, 
DC 20590, for an administrative waiver of the coastwise laws of the 
United States for an Eligible Vessel to carry no more than twelve 
passengers for hire. The application need not be in any particular 
format, but must be signed and contain the following information:
    (1) Name of vessel and owner for which waiver is requested.
    (2) Size, capacity and tonnage of vessel (state whether tonnage is 
measured pursuant to 46 U.S.C. 14502, or otherwise, and if otherwise, 
how measured).
    (3) Intended use for vessel, including geographic region of 
intended operation and trade.
    (4) Date and place of construction and (if applicable) rebuilding. 
(If applicant is unable to determine origins of vessel, foreign 
construction will be assumed).
    (5) Name, address, and telephone number of applicant and vessel 
owner (if different from applicant).
    (6) A statement on the impact this waiver will have on other 
commercial passenger vessel operators, including a statement describing 
the operations of existing operators.
    (7) A statement on the impact this waiver will have on U.S. 
shipyards.
    (b) You must enclose an application fee for each waiver requested, 
in the form of a check for $300, made out to the order of ``Treasurer 
of the United States.''


Sec. 388.4  Criteria for grant of a waiver.

    (a) General criteria. (1) A waiver of the foreign build and/or 
foreign rebuild prohibition in the coastwise trade laws will be granted 
for an Eligible Vessel if we determine that the employment of the 
vessel in the coastwise trade will not unduly adversely affect--
    (i) United States vessel builders; or
    (ii) The coastwise trade business of any person who employs vessels 
built in the United States in that business.
    (2) We may evaluate the expected impact of the proposed waiver on 
the basis of the information received from

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all sources, including public comment, internal investigation and 
analysis, and any other sources of information deemed appropriate.
    (b) Impact on U.S. shipbuilders. We may use the following criteria 
to determine the effect on U.S. shipbuilders: Whether a potentially 
impacted U.S. vessel builder has a history of construction of similar 
vessels, or can demonstrate the capability and capacity to build a 
similar vessel, for use in the same geographic region of the United 
States, as the proposed vessel of the applicant.
    (c) Impact on coastwise trade operators. We may use the following 
criteria to determine the effect on existing operators of U.S.-built 
vessels in coastwise trade:
    (1) Whether the proposed vessel of the applicant and the vessel(s) 
of an existing operator(s) (or the vessel(s) of an operator that can 
demonstrate it has taken definite steps to begin operation):
    (i) Are of similar size;
    (ii) Are of similar characteristics;
    (iii) Would provide similar commercial service; and
    (iv) Would operate in the same geographic area.
    (2) The number of similar vessels operating or proposed to operate 
in the same market with the same or similar itinerary, relative to the 
size of the market.


Sec. 388.5  Criteria for revocation of a waiver.

    (a) We may revoke a waiver previously granted under this part if we 
determine that the employment of the vessel in the coastwise trade has 
substantially changed since the issuance of the endorsement, and--
    (1) The vessel is employed other than as a small passenger vessel 
or an uninspected passenger vessel; or
    (2) The employment of the vessel unduly adversely affects--
    (i) United States vessel builders; or
    (ii) The coastwise trade business of any person who employs vessels 
built in the United States.
    (b) We may evaluate the effects of the employment of the waived 
vessel in the coastwise trade on the basis of the information received 
from all sources, including public comment, internal investigation and 
analysis, and any other sources of information deemed appropriate.


Sec. 388.6  Process.

    (a) Initial process. We will review each application for 
completeness as received. We will notify the applicant if additional 
information is necessary or if the application does not meet the 
initial eligibility requirements for a waiver. All applications that 
pass the initial screening will be available for public inspection in 
the Department of Transportation Docket Room following publication in 
the Federal Register. We will publish a notice of such applications in 
the Federal Register. Interested parties will be given an opportunity 
to comment on whether introduction of any of the proposed vessels would 
adversely affect them. In the absence of duly filed objections to an 
application, and in the absence of undue market impact on vessel 
operators or vessel builders otherwise discovered by us, we will assume 
that there will be no adverse effect. If an objection to an application 
is received, additional information may be sought from the objector. 
The applicant will be given a sufficient amount of time to respond. The 
Director, Office of Ports and Domestic Shipping, will then either make 
a decision based on the written submissions and all available 
information or may, as a matter of discretion, hold a hearing on the 
application. The decision will be communicated to the applicant, 
commenters and the Coast Guard. If the Maritime Administration grants a 
waiver, the applicant must thereafter contact the Coast Guard to obtain 
the necessary documentation for domestic operation, provided the vessel 
and its owner otherwise qualify.
    (b) Revocation. We may, upon the motion of an interested party, or 
upon our own motion, publish a notice in the Federal Register proposing 
to revoke a waiver granted under this part. We may request additional 
information from any respondent to the notice. The Director, Office of 
Ports and Domestic Shipping, will then either make a decision based on 
the written submissions and additional publicly available information 
or may, as a matter of discretion, refer the request for revocation to 
a hearing. The Maritime Administration will communicate its decision to 
the applicant and the Coast Guard. If MARAD revokes a waiver, the Coast 
Guard shall revoke the vessel's coastwise endorsement.
    (c) Review of determinations. (1) The decisions by the Director, 
Office of Ports and Domestic Shipping, to grant a waiver, deny a waiver 
or revoke a waiver will not be final until after time for discretionary 
review by the Maritime Administrator has expired. Applicants and 
persons who submitted comments in response to a Federal Register notice 
may petition the Maritime Administrator to review a waiver, waiver 
denial, or waiver revocation within five (5) days of such 
determination. Each petition for review should state the petitioner's 
interest and the reasons review is being sought, clearly pointing out 
any alleged errors of fact or misapplied points of law. Within three 
(3) days of submission of a petition for review, applicants for a 
waiver and persons who submitted comments in response to a Federal 
Register notice may request the Maritime Administrator not to review a 
waiver, waiver denial or waiver revocation.
    (2) Such petitions and responses may be sent by facsimile to the 
Secretary, Maritime Administration, at (202) 366-9206. To the extent 
possible, each petitioner or respondent should send a copy of their 
petition or response to other interested parties by facsimile at the 
same time the submission is made to MARAD. The Maritime Administrator 
will decide whether to take review within two (2) days following the 
time for submission of a request that the Maritime Administrator not 
take review. If the Maritime Administrator takes review, the 
determination by the Director, Office of Ports and Domestic Shipping, 
will be stayed until final disposition. If review is not taken, the 
determination by the Director, Office of Ports and Domestic Shipping, 
will become final two (2) days after the time for submission of 
requests that the Maritime Administrator not take review. If the last 
day of a time limit falls on a Saturday, Sunday or Federal holiday, the 
time is extended to the next business day. In the absence of any 
petition for review, the determination by the Director, Office of Ports 
and Domestic Shipping, will become final within ten (10) days. The 
Secretary, MARAD, may extend any of the time limits for good cause 
shown.


Sec. 388.7  Sunset provision.

    We will grant no waivers after September 30, 2002, unless the 
statutory authority to grant waivers is extended beyond that date. Any 
waiver granted prior to September 30, 2002 will continue in effect 
until otherwise invalidated or revoked under chapter 121 of title 46, 
United States Code.

    By order of the Maritime Administrator.

    Dated: June 30, 1999.
Joel C. Richard,
Secretary.
[FR Doc. 99-17045 Filed 7-7-99; 8:45 am]
BILLING CODE 4910-81-P