[Federal Register Volume 68, Number 204 (Wednesday, October 22, 2003)]
[Rules and Regulations]
[Pages 60559-60570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26350]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 26, 161, 164, and 165

[USCG-2003-14757]
RIN 1625-AA67


Automatic Identification System; Vessel Carriage Requirement

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: This final rule adopts, with changes, the temporary interim 
rule that amends port and waterway regulations and implements the 
Automatic Identification System (AIS) carriage requirements of the 
Maritime Transportation Security Act of 2002 (MTSA) and the 
International Maritime Organization requirements adopted under 
International Convention for the Safety of Life at Sea, 1974, (SOLAS) 
as amended.
    This rule is one in a series of final rules published in today's 
Federal Register. To best understand this rule, first read the final 
rule titled ``Implementation of National Maritime Security 
Initiatives'' (USCG-2003-14792), published elsewhere in today's Federal 
Register.

DATES: This final rule is effective November 21, 2003. On July 1, 2003, 
the Director of the Federal Register approved the incorporation by 
reference of certain publications listed in this final rule.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket USCG-2003-14757 and are available for inspection or 
copying at the Docket Management Facility, U.S. Department of 
Transportation, room PL-401, 400 Seventh Street SW., Washington, DC, 
between 9 a.m. and 5 p.m., Monday through Friday, except Federal 
holidays. You may also find this docket on the Internet at http://dms.dot.gov.
    You may inspect the material incorporated by reference at room 
1409, U.S. Coast Guard Headquarters, 2100 Second Street SW., 
Washington, DC 20593-0001 between 8:30 a.m. and 3:30 p.m., Monday 
through Friday, except Federal holidays. The telephone number is 202-
267-6277. Copies of the material are available as indicated in the 
``Incorporation by Reference'' section of this preamble.

FOR FURTHER INFORMATION CONTACT: If you have questions on this final 
rule, call Mr. Jorge Arroyo, U.S. Coast Guard Office of Vessel Traffic 
Management (G-MWV), by telephone 202-267-6277, toll-free telephone 1-
800-842-8740 ext. 7-6277, or electronic mail [email protected]. If 
you have questions on viewing the docket, call Andrea M. Jenkins, 
Program Manager, Docket Operations, Department of Transportation, at 
telephone 202-366-0271.

SUPPLEMENTARY INFORMATION: 

Regulatory Information

    On July 1, 2003, we published a temporary interim rule with request 
for comments and notice of public meeting titled ``Automatic 
Identification System; Vessel Carriage Requirement'' in the Federal 
Register (68 FR 39353). This temporary interim rule was one of a series 
of temporary interim rules on maritime security published in the July 
1, 2003, issue of the Federal Register. On July 16, 2003, we published 
a document correcting typographical errors and omissions in that rule 
(68 FR 41913).
    We received a total of 438 letters in response to the six temporary 
interim rules by July 31, 2003. The majority of these letters contained 
multiple comments, some of which applied to the docket to which the 
letter was submitted, and some which applied to a different docket. For 
example, we received several letters in the docket for the temporary 
interim rule titled ``Implementation of National Maritime Security 
Initiatives'' that contained comments in that temporary interim rule, 
plus comments on the ``Automated Identification System; Carriage 
Requirement'' temporary interim rule. We have addressed individual 
comments in the preamble to the appropriate final rule. Additionally, 
we had several commenters submit the same comment to all six dockets. 
We counted these duplicate submissions as only one letter, and we 
addressed each comment within that letter in the preamble for the 
appropriate final rule. Because of statutorily imposed time constraints 
for publishing these regulations, we were unable to consider, in this 
Final Rule, comments received after the period for receipt of comments 
closed on July 31, 2003. Copies of late-received comments on AIS will 
be placed into the docket for the separate AIS Notice and request for 
comments that was published on July 1, 2003 (USCG 2003-14878; 68 FR 
39369).
    A public meeting was held in Washington, DC, on July 23, 2003, and 
approximately 500 people attended. Comments from the public meeting are 
also included in the ``Discussion of Comments and Changes'' section of 
this preamble. A transcript of this meeting is available in the docket, 
where indicated under ADDRESSES.
    In order to focus on the changes made to the regulatory text since 
the temporary interim rule was published, we have adopted the temporary 
interim rule and set out, in this final rule, only the changes made to 
the temporary interim rule. We will place a copy of the unofficial 
complete regulatory text in

[[Page 60560]]

the docket, where indicated under ADDRESSES.

Public Meetings for Rulemakings Related to Vessel Traffic Service

    The Coast Guard held a public meeting on October 28, 1998, in New 
Orleans, Louisiana. The meeting was announced in a notice published in 
the Federal Register on September 18, 1998 (63 FR 49939). This meeting 
gave the Coast Guard the opportunity to discuss the Vessel Traffic 
Service (VTS) concept on the Lower Mississippi River and the envisioned 
use of automatic identification system technology in the VTS. At this 
1998 meeting, we reported the preliminary results of tests conducted on 
the Lower Mississippi River using precursor AIS. The proposed VTS on 
the Lower Mississippi River is not discussed in this rulemaking because 
it is the subject of a separate rulemaking titled ``Vessel Traffic 
Service Lower Mississippi River'' (65 FR 24616, April 26, 2000; docket 
[USCG-1998-4399]). We copied those comments regarding AIS that were 
submitted to the VTS Lower Mississippi River docket and placed those 
copies in the docket for this final rule for historical purposes. 
However, most of those comments were not addressed in the preamble 
discussion of the temporary interim rule because they were no longer 
applicable or because they addressed a previous version of AIS and not 
the version required by this final rule.
    Over the past few years, the Coast Guard has made AIS presentations 
at various public forums including Federal advisory committee meetings 
(Towing Safety Advisory Committee, National Offshore Safety Advisory 
Committee, Houston-Galveston Navigation Safety Advisory Committee and 
Navigation Safety Advisory Council). Moreover, the AIS-based Ports and 
Waterways Safety System project being installed at the VTS Lower 
Mississippi River is regularly discussed at the Lower Mississippi River 
Waterway Safety Advisory Committee meetings.
    The Houston-Galveston Navigation Safety Advisory Committee and 
Lower Mississippi River Waterway Safety Advisory Committee are 
federally chartered advisory committees charged with making 
recommendations to the Coast Guard on matters relating to the safe and 
efficient transit of vessels on their respective waterways. These open 
forums have afforded the public, particularly those in the Gulf of 
Mexico and Mississippi River areas, the opportunity to comment on both 
VTS Lower Mississippi River and AIS issues. The public's input was 
taken into account throughout this final rule.

Background and Purpose

    Section 5004 of the Oil Pollution Act of 1990, as codified in 33 
U.S.C. 2734, directed the Coast Guard to operate additional equipment, 
as necessary, to provide surveillance of tank vessels transiting Prince 
William Sound, Alaska. We have done so since 1994 through a system then 
known as ``Automated Dependent Surveillance.'' Advances have taken 
place with this technology, now referred to as AIS. Section 102 of the 
Maritime Transportation Security Act of 2002 (MTSA) mandates that AIS 
be installed and operating on most commercial and passenger vessels on 
all navigable waters of the United States.
    The version of AIS required by this final rule automatically 
broadcasts vessel and voyage-related information that is received by 
other AIS-equipped ships and shore stations. In the ship-to-shore mode, 
AIS enhances maritime domain awareness and allows for the efficient 
exchange of vessel traffic information that previously was only 
available via voice communications with a VTS. In ship-to-ship mode, an 
AIS provides essential information to other vessels, such as name, 
position, course, and speed that is not otherwise readily available on 
board vessels. In either mode, an AIS enhances the mariner's 
situational awareness, makes possible the accurate exchange of 
navigational information, mitigates the risk of collision through 
reliable passing arrangements, and facilitates vessel traffic 
management, while simultaneously reducing voice radiotelephone 
transmissions.
    AIS has achieved acceptance through worldwide adoption of 
performance and technical standards developed to ensure commonality, 
universality, and inter-operability. These recommendations have now 
been established and adopted as standards by the following diverse 
international bodies: The International Maritime Organization (IMO), 
the International Telecommunications Union (ITU), and the International 
Electrotechnical Commission (IEC). Further, installation of such 
equipment is required on vessels subject to the International 
Convention for the Safety of Life at Sea, 1974, (SOLAS), as amended.
    The ``Automatic Identification System; Vessel Carriage 
Requirement'' temporary interim rule provides a comprehensive 
discussion on the applicability and compliance dates, AIS testing, the 
need for standardization, existing AIS-like systems, and the ports and 
waterways safety system. This information will not be duplicated in 
this final rule, but remains available at the Federal Register (68 FR 
39353) and in the docket for this rule (USCG-2003-14757).

Discussion of Comments and Changes

    Comments from each of the temporary interim rules and from the 
public meeting held on July 23, 2003, have been grouped by topic and 
addressed within the preambles to the applicable final rules. If a 
comment applied to more than one of the six rules, we discussed it in 
the preamble to each of the final rules that it concerned. Several 
comments were submitted to a docket that included topics not addressed 
in that particular rule, but were addressed in one or more of the other 
rules. This was especially true for several comments submitted to the 
docket of part 101 (USCG-2003-14792). In such cases, we discussed the 
comments only in the preamble to each of the final rules that concerned 
the topic addressed.

General

    One commenter requested that we extend the compliance date for 
passenger and fishing vessels to December 31, 2005, to take advantage 
of prospective, potentially lower cost, AIS devices.
    We believe the costs of AIS will continue to decrease as more 
manufacturers, models and types are brought to market. We also welcome 
all efforts of international standards bodies and manufacturers, to 
date, to design and produce cost-effective AIS equipment. As these 
improved or less costly devices are submitted for type approval, the 
Coast Guard will decide whether they meet our requirements and the 
intent of the MTSA, and if need be, we will amend this rule accordingly 
to permit their use.
    Twenty-one commenters stated various reasons why they opposed a 
carriage requirement for AIS. Three commenters stated that AIS would 
not provide increased security to vessels or ports, arguing that 
knowing the location of larger, slower vessels does not eliminate any 
threat and that smaller, more agile recreational vessels are more 
accessible to terrorists. Seven commenters stated that AIS has very 
limited security benefits, is technically limited due to its line-of-
sight range, and to the extent it does work, it works equally well for 
governmental authorities and those who choose to do harm. Four 
commenters stated that AIS installation will not provide vessel 
operators with information on the identity of other commercial craft 
that is

[[Page 60561]]

not already available through basic visual or radio means. Three 
commenters stated that VTS areas would not receive information on non-
applicable vessels that could pose threats. Eight commenters stated 
that the estimated cost would be a burden that most companies would be 
unable to bear. One commenter stated that the installation would 
distract the captain's attention from surrounding non-commercial 
recreational traffic and will clutter the pilothouse. One commenter 
stated that AIS is an outdated technology.
    We acknowledge these limitations; however, we believe that AIS has 
the potential to mitigate collisions and the risk of a transportation 
security incident, as defined in the MTSA. We recognize that a single 
sensor, such as AIS, will not likely prevent a transportation security 
incident alone, but if AIS can have a mitigating effect on just a 
single collision or transportation security incident, the security 
benefit could be significant. Furthermore, under the MTSA, the Coast 
Guard is required to implement AIS carriage.
    One commenter stated that costs for annual repairs and for the 
replacement of the AIS unit need to be calculated.
    The Regulatory Assessment and Initial Regulatory Flexibility Act 
Analysis, available in the docket for this rule (USCG-2003-14757), 
included detailed estimates for annual repairs and periodic 
replacement. The summary included in the temporary interim rule 
reflects these costs.
    One commenter believes it is inappropriate to analyze the economic 
impact of the cost using the ``percentage of annual revenue that is 
first-year AIS cost,'' stating that it would be more appropriate to 
analyze the impact of the cost as a percentage of the net revenue of 
small businesses.
    We recognize that using net revenues to determine the cost of this 
rule to small businesses would provide a more accurate picture of the 
effects of this rule on those entities, however this information is not 
available to the public. Thus, we used the information that is publicly 
available, the percentage of annual revenue, to analyze the economic 
impact of the cost of implementation on small businesses.
    One commenter stated that our regulatory analysis is unclear as to 
whether the benefit assessment for AIS accounts for domestic vessels 
operating in VTS areas only, or applies to the entire inland waterway 
system.
    In order to quantify the benefits of AIS implementation, the Coast 
Guard reviewed Marine Casualty Incident Reports from 1993-1999 that 
involved the vessel populations affected by the temporary interim rule. 
This included domestic vessels operating in VTS areas, not the entire 
inland waterway system.
    One commenter agreed with our economic analysis regarding AIS and 
with our assessment that the cost of AIS installation for the domestic 
fleet far outweighs the benefit.
    While monetized safety benefits produced a low benefit-cost ratio, 
Congress mandated an AIS carriage requirement that included domestic 
vessels in 46 U.S.C. 70114 of the MTSA. In addition, we believe that 
AIS is critical to maritime domain awareness and, although our 
assessment could not quantify or monetize the benefits of the security 
contribution of AIS, we believe it has the potential to mitigate the 
consequences of a transportation security incident as described in the 
MTSA.
    Nine commenters noted that AIS is duplicative of existing systems 
because fishing vessels are currently equipped with Vessel Monitoring 
System (VMS), which already fulfills the AIS monitoring aspect. Two 
commenters requested that existing satellite tracking systems, such as 
the VMS used by the National Marine Fisheries Service (NMFS) be allowed 
as an alternative to the AIS requirement.
    As discussed in the ``Existing AIS-Like Systems'' section of the 
preamble to the temporary interim rule, there are many precursor and 
competing tracking systems in use today, VMS is just one of them. VMS 
is a system required by the NMFS as a means to monitor and enforce 
compliance with NMFS requirements. VMS relies upon International Mobile 
Satellite Organization (INMARSAT C) communication service providers to 
schedule or poll, one-way, traffic reports from the vessel to NMFS. 
AIS, conversely, is an open, two-way, non-proprietary system that is 
autonomous and self-organizing, requiring no shoreside commands for its 
operations. AIS is also a short-range VHF-FM system that provides a 
vessel's location more frequently than VMS. This permits AIS to be both 
a safety and security tool. Furthermore, AIS is not limited to one-way 
communications or tied to proprietary software or communications 
services, and AIS signals can be monitored from shore and from other 
vessels to provide greater maritime domain awareness.
    One commenter recommended that we rewrite the final rule in plain 
language so that vessel owners and operators can easily understand the 
carriage requirements and technical specifications.
    We have attempted to make these final regulations as clear as 
possible. However, using plain language would require a complete 
rewrite of 33 CFR parts 26, 161, 164, and 165, which is beyond the 
scope of this rule.
    Two commenters requested that the Coast Guard allow industry 
alternative programs as provided for in both facility and vessel 
security rules.
    We are unable, at this time, to approve industry alternative 
programs for AIS. We do believe that it is a subject worthy of 
consideration, and welcome comments and suggestions on potential 
alternative programs for the AIS carriage requirement. We have 
published in the Federal Register (68 FR 55643) a notice reopening the 
comment period on our previously published notice titled ``Automatic 
Identification System; Expansion of Carriage Requirements for U.S. 
Waters'' (USCG 2003-14878; July 1, 2003; 68 FR 39369). Please send your 
comments on the use of an alternative program to that docket.
    One commenter stated that the AIS regulation represents an unfunded 
mandate, stating that further discussion of funding for AIS purchase 
and maintenance is needed because vessel owners should not be expected 
to fund this.
    As stated in the temporary interim rule and below, this final rule 
is exempted from assessing the effects of the regulatory action as 
required by the Unfunded Mandate Reform Act because it is necessary for 
the national security of the United States (2 U.S.C. 1503(5)). We are 
aware of the burden this rule places on industry. In order to re-
evaluate this burden, we have amended the applicability section for 
this final rule (discussed below), and will reopen the comment period 
on our previously published notice titled ``Automatic Identification 
System; Expansion of Carriage Requirements for U.S. Waters'' (USCG 
2003-14878; July 1, 2003; 68 FR 39369).
    One commenter stated that vessels carrying AIS equipment should be 
released from liability whenever they are involved in a collision with 
a vessel that is not carrying AIS equipment.
    While we appreciate the points raised concerning potential 
liability, the issue of liability is beyond the scope of this rule. No 
provision of the MTSA addresses liability, either to expressly limit 
liability or to address immunity from liability. Determinations of 
liability require a fact-laden inquiry on a case-by-case basis, and 
typically require complex analyses regarding matters such as choice of 
law, contracts,

[[Page 60562]]

and international conventions. Additionally, we note that carrying AIS 
does not relieve mariners from following all applicable navigation 
rules, and therefore may not be enough reason to relieve vessel owners 
and operators of liability.

Applicability

    Five commenters supported our approach to AIS implementation. Three 
commenters expressed enthusiastic support for the AIS system, and 
agreed with the time schedule and criteria for SOLAS and domestic AIS 
carriage. Two commenters supported the decision to phase-in the 
requirements of the AIS regulation, and supported implementing the AIS 
requirements as a security measure, rather than as a safety tool.
    One commenter asked whether U.S. government research ships are 
required to have AIS installed. If yes, the commenter asked what the 
time frame required for this installation is. Another commenter asked 
whether law enforcement and military vessels will carry AIS.
    Sections 164.01(c) and 164.46(a)(1) were amended or added by the 
temporary interim rule (68 FR 39367) and state that the rules do not 
apply to government or non-commercial vessels. Therefore, these 
regulations do not apply to military, government, or public vessels so 
long as they are not used commercially. We do, however, encourage these 
vessels to voluntarily use AIS, as operational conditions may warrant, 
as will the Coast Guard fleet.
    One commenter requested that the implementation date for AIS in the 
St. Mary's River Vessel Traffic Service (VTS) area be changed to 
January 31, 2005, from December 31, 2003, as published in the temporary 
interim rule, arguing that the December 31, 2003, implementation date 
is impractical based on vessel operations in the locks.
    We agree that having the implementation deadline towards the end of 
a limited shipping season is impractical, but we do not agree with 
changing the date to January 31, 2005, because that date is beyond the 
deadline date established by the MTSA. In response, we have amended 33 
CFR 164.46(a)(3) to apply uniformly to all VTS areas by December 31, 
2004. We have made conforming amendments to Sec. Sec.  164.43 and 
165.1704 to reflect this change.
    We received 47 comments requesting changes to the applicability of 
the AIS carriage requirement. Two commenters requested that passenger 
vessels be exempt from this rule. Two commenters asked why AIS is being 
required on vessels 65 feet and over. Four commenters disagreed in 
general with the applicability of the AIS rule. Two commenters asked 
the Coast Guard to suspend the AIS requirements for the domestic fleet. 
Two commenters asked that we exempt commercial marine assistance 
vessels that operate in a limited geographical area. One commenter 
requested that we exempt sailing vessels from the AIS requirement. One 
commenter suggested that we exempt charter boats. Eleven commenters 
requested that fishing vessels also be exempt from or be given a waiver 
from this rule, citing high costs and minimal benefits. Eight 
commenters urged the Coast Guard to amend the AIS carriage requirement 
to apply to passenger vessels carrying more than 150 passengers, not 50 
passengers, stating that this would ease the regulatory burden for the 
most economically vulnerable companies, improve the cost-benefit ratio 
for the domestic fleet, and align with the applicability requirements 
in 33 CFR subchapter H. Ten commenters asked whether the requirements 
for AIS carriage apply if a vessel spends periods of reduced operations 
in a VTS area but conducts commercial operations only outside the VTS. 
One of these commenters further added that the AIS requirement could 
impose unintended consequences on VTS ports and shipyards because 
owners may now decide to moor their vessels to non-VTS areas.
    Congress mandated an AIS carriage requirement on commercial vessels 
over 65-feet in length in 46 U.S.C. 70114, and provided explicit 
deadlines for AIS in the MTSA, Sec.  102(e). Under the MTSA, the Coast 
Guard is granted discretion as to which passenger vessels should be 
required to have AIS. In crafting the temporary interim rule, the Coast 
Guard took into consideration that Vessel Bridge-to-Bridge 
Radiotelephone and Vessel Movement Reporting System (VMRS) requirements 
apply to passenger vessels over 100 gross tonnage and those 
certificated to carry 50 passengers, and that this population comprises 
a large segment of VTS users. We believe that AIS is a key component in 
providing safety and security in VTS and VMRS areas and should cover as 
many vessels as practicable, including smaller passenger vessels. 
Nevertheless, the Coast Guard is removing the AIS carriage requirement 
for commercial fishing vessels and small passenger vessels certificated 
to carry less than 151 passengers. The Coast Guard is amending Sec.  
164.46(a)(3) accordingly and will reengage the public with respect to 
applicability and carriage requirements for small passenger vessels and 
commercial fishing vessels.
    To that end, the Coast Guard published in the Federal Register (68 
FR 55643) a notice that reopened the comment period on our previously 
published notice titled ``Automatic Identification System; Expansion of 
Carriage Requirements for U.S. Waters'' (USCG 2003-14878; July 1, 2003; 
68 FR 39369). The notice reopening the comment period included 
additional questions regarding expanding AIS carriage to small 
passenger vessels, whether infrequent VTS users (e.g., fishing vessels) 
should be exempt from the AIS requirement, and whether exemptions may 
be granted by the VTS as a deviation request, as opposed to the written 
notification required in 33 CFR 164.55. By this action, we hope to 
generate further comments, discussion, and contributions from 
prospective mandatory users of AIS that we will then consider as we 
continue forward with future AIS rulemakings.
    Five commenters stated that the AIS carriage requirement should be 
universal, arguing that an AIS carriage requirement that does not apply 
to every vessel, including recreational vessels, is of limited value as 
either a security or a safety tool.
    We agree that AIS would provide the greatest benefit if all vessels 
were required to be equipped with an AIS unit. However, as with any new 
technology, AIS carriage must be implemented prudently. Therefore, the 
Coast Guard has chosen to implement AIS domestically beginning in VTS 
areas (as denoted in table 161.12(c), and will consider expanding AIS 
carriage to other waterways in consideration of comments received on 
our previously published notice titled ``Automatic Identification 
System; Expansion of Carriage Requirements for U.S. Waters'' (USCG 
2003-14878; July 1, 2003; 68 FR 39369). Additionally, the AIS carriage 
requirements found in the MTSA do not apply to recreational vessels.
    Upon further review, we have amended Sec.  164.02 to clarify 
applicability for foreign vessels.

Technical

    One commenter supported the AIS unit standardization proposal 
presented in the temporary interim rule.
    One commenter asked if vessels that use an electronic chart to 
display AIS targets must have the chart updated and corrected to the 
latest Broadcast Notice to Mariners. The same commenter also asked if a 
vessel would still have to carry nautical charts if it uses an 
Electronic Chart Display and

[[Page 60563]]

Information System (ECDIS) to display AIS targets.
    Mariners are advised that U.S. regulations or SOLAS requirements 
have always called for paper charts that are relied upon for the 
navigation of the vessel to be correct and up to date, regardless of 
whether they have AIS or can view vessels on an electronic chart.
    One commenter expressed concerns over the electronic display of AIS 
data, stating that the technical limitations of commercial radar or 
ECDIS to merge data from the AIS is an issue.
    We acknowledge the concerns expressed by the commenter. There are 
no international standards, at this time, for a manufacturer to rely 
upon to assure AIS buyers that an AIS may be properly integrated into 
other display devices. All AIS units come with a display that allows 
the user to input AIS information (e.g., vessel identity, dimensions, 
navigation status, antenna location) and to access all information 
received from other units. AIS also has multiple output options that 
facilitate using or integrating AIS data on other navigational systems, 
such as radar, Advanced Radar Plotting Aid (ARPA), ECDIS, and 
electronic charts. We have purposely not required this integration, or 
chosen a one-size fits all approach to graphical displays, in order to 
leave the choice with the mariner, who is best positioned to decide 
which output option suits the mariner's vessel and operation. 
Additionally, we are working diligently on this matter, commissioning 
the Transportation Research Board to develop recommendations for us, 
and working with various standards bodies to develop guidelines and 
standards.
    One commenter stated that the IMO guidelines on installation of AIS 
devices might not be well suited for smaller vessels.
    We agree; the IMO Installation Guidelines (particularly regarding 
antenna placement) are not well suited for smaller vessels. We will 
develop further guidelines to assist these vessel owners and operators 
with the installation of their AIS, and will place a copy in the docket 
and post a copy on our website at http://www.navcen.uscg.gov/enav/ais/AIS_carriage_reqmts.htm as soon as we have completed these 
guidelines.
    One commenter asked whether AIS would require a backup power 
source.
    Given the importance and value of AIS data to possible search and 
rescue efforts, we have begun work with IMO to require back-up power 
requirements, similar to those imposed on Global Maritime Distress and 
Safety System (GMDSS) equipment. Should these requirements be adopted 
by IMO, we will propose regulatory amendments in a separate rulemaking 
to do the same for those vessels subject to SOLAS and strongly 
encourage the same on other vessels that transit the high seas.
    Five commenters asked the Coast Guard to consider its ability to 
develop and support the public infrastructure necessary to fully 
support AIS and the availability of the radio-frequency bandwidth, 
citing the Coast Guard's recent history with similar projects (e.g., 
GMDSS). Five commenters asked us to resolve questions involving 
frequency allocation, stating that vessel operators should not be 
required to keep track of different frequency requirements and manually 
adjust their AIS units for each VTS area. Three commenters stated that 
it is up to the Coast Guard, not the FCC, to ensure that frequencies 
are available for AIS use.
    We have considered our ability to develop and support the public 
infrastructure necessary to fully support AIS. We have chosen to 
require carriage of AIS in those areas that are being upgraded through 
our Ports and Waterways Safety System acquisition program. The Coast 
Guard does not have the authority to designate frequencies for AIS use, 
therefore, we requested and received frequency authorizations from the 
Federal Communication Commission (FCC) and the National 
Telecommunication and Information Agency (NTIA). Pending a rulemaking 
by FCC, we rely on the FCC decision stated in FCC Notice DA-02-1362 
that states that the Commission ``will consider the use of shipborne 
AIS equipment to be authorized by existing ship station licenses, 
including vessels that are licensed by rule.'' We agree that the 
operation of AIS should be seamless to the user, who should not be 
required to manually adjust their AIS units for each VTS area. FCC 
policies currently authorize the use of AIS frequencies (AIS1, Channel 
87B, 161.975 MHz and AIS2, Channel 88B, 162.025 MHz) on existing ship 
station licenses. Should AIS frequency management be required due to 
the unavailability of AIS1 or AIS2 in any one VTS area, we intend to 
have the infrastructure in place to perform frequency management 
through the base station capabilities of AIS.
    Five commenters stated that interference to adjacent channels would 
potentially result in the loss of property and life at sea.
    AIS devices must fully comply with ITU and IEC standards and 
undergo an additional level of review not applicable to most other FCC 
type certified devices prior to being authorized to operate in the VHF 
marine band. Further, IMO has developed detailed guidelines (IMO SN/
Circ. 227) to be followed regarding the installation of AIS. These 
guidelines have been incorporated by reference into this regulation, as 
a requirement, in 33 CFR 164.03 and 164.46. Notwithstanding this 
requirement, as is the case with any radiating or receiving radio 
device, there is always a possibility for radio interference when 
numerous emission devices are operating in the near vicinity of each 
other, particularly in a congested and noisy environment as exists on 
the VHF FM maritime band. The Coast Guard will be diligent in 
monitoring AIS use for interferences and will promptly mitigate them by 
enforcing the required installation guidelines, through the AIS type 
approval process, and through frequency plan coordination with existing 
public coast station licensees.
    One commenter noted that the interference to adjacent channels from 
the currently adopted AIS carriage requirement is an unconstitutional 
taking of private property without just compensation.
    The Coast Guard does not believe the MTSA or these regulations 
effect a taking, inter alia, because these regulations rely on FCC 
decisions to authorize existing shipboard licensees to operate AIS on 
the AIS frequencies. See FCC Public Notice DA-02-1622 (June 13, 2002). 
Additionally, we do not believe that the commenter's license 
constitutes a sufficient property interest to justify its position that 
this regulation constitutes a ``taking.'' Finally, even assuming, 
without admitting that there is a legally cognizable property interest 
in the commenter's license, this regulation does not create such an 
interference with the commenter's use of that license as to constitute 
a regulatory taking in violation of the Constitution.
    One commenter asked whether a fleet manager could buy an AIS base 
station to assist with the company dispatch and logistics.
    Shoreside AIS stations, mistakenly referred to by some as AIS base 
stations, are subject to FCC regulation and licensing. FCC Notice DA-
02-1362 permits the use of AIS by ship station licenses but did not 
address its similar use by VHF shore stations. Shoreside AIS stations 
enhance the AIS network because they control matters regarding 
frequency management, power setting, and allocation of AIS data slots, 
which are all functions that will be performed by the Coast Guard or 
another government entity.
    Three commenters stated that the utility of AIS is considerably 
diminished if the system, as installed, is not capable of relaying 
information from

[[Page 60564]]

an automatic position indicating system and gyrocompass.
    We recognize that the information provided by external sensors, 
such as a transmitting heading device, speed log, or navigation lights, 
to an AIS in accordance with the standards incorporated by reference in 
this regulation will provide the additional benefit to the user, as 
would integrating AIS with the existing on board navigation equipment. 
However, this integration technology and its accompanying standards are 
still being developed, thus, we did not require them. Each U.S. type 
approved AIS has a timing and positioning component built-in (e.g., 
Global Positioning System) and the lack of additional sensor input does 
not diminish the utility of the AIS in providing for security and 
navigational safety.
    One commenter asked whether AIS is an electronic aid to navigation 
as that term is used in 33 CFR 66.01-1, which states: ``With the 
exception of radar beacons (racons) and shore-based radar stations, 
operation of electronic aids to navigation as private aids will not be 
authorized.''
    AIS is a navigational aid, but not necessarily an aid to 
navigation, as that term is used in 33 CFR part 66. In addition to 
increasing maritime domain awareness for security purposes, shipborne 
AIS is intended for collision avoidance, and not intended to be relied 
upon or referred to, as a buoy, lighthouse, or racon would be. AIS 
standards allow for the creation of AIS aids to navigation, and should 
we choose to use these aids, they will be catalogued in the Coast 
Guard's Light List as all other aids to navigation currently are.
    One commenter stated that the Coast Guard must resolve questions 
over patent rights for the AIS standard prior to implementing a 
domestic carriage requirement.
    Prospective AIS users should not be concerned with any patent 
issues regarding AIS or any other shipboard equipment. These are 
matters that need only be worked out by manufacturers of the devices 
and any patent holders.
    One commenter asked whether vessels would be required to provide a 
Maritime Mobile Service Identifier (MMSI) and Universal Time 
Coordinated (UTC), stating that not all vessels currently have an MMSI. 
This commenter also asked how a vessel operator can be confident that 
the target identified on an AIS is who it says it is, if AIS units can 
be purchased from any commercial source, and an MMSI obtained from an 
FCC agent.
    One goal of AIS is to lessen the reporting required by mariners. 
However, certain information and data input is necessary for the proper 
operation of an AIS. Many of these data fields are inputted only once, 
such as the vessel's identity, MMSI, dimensions, and antenna location. 
MMSI and UTC are critical to AIS; the MMSI (defined in note 1 to Table 
161.12(c) of 33 CFR 161.12), which we have amended for clarity, 
provides a unique identifier for each AIS user, and the UTC is relied 
upon by the system to properly manage the AIS data link and network. 
UTC is provided internally by the AIS unit, and requires no input by 
the user. MMSI does need to be entered by the user, and is noted on the 
ship's station radio license issued by the FCC. Because user error is 
always possible, we urge users to be vigilant and request that you 
notify the nearest COTP if you encounter improper AIS usage.

Operations

    One commenter recommended rewording Sec.  164.46(a) because as 
presently drafted it could be incorrectly interpreted to mean that 
manufacturer self-certification of equipment to the listed standards 
would be sufficient.
    We agree and have amended Sec.  164.46(a) to require ``type 
approved AIS.''
    One commenter stated that AIS is unnecessary because collision 
avoidance is best accomplished with an alert watch that is monitoring 
VHF channels, radar, GPS chart plotters, and depth sounders. This 
commenter stated that these technologies are already found on fishing 
vessels and it is not apparent that the addition of AIS will result in 
any significant benefit over maintaining a good watch.
    We agree that competent and attentive watchkeeping is paramount to 
prudent navigation. We further note that prudent mariners are required 
to use all means available to avoid a collision. AIS is the latest 
navigation system to assist watchkeepers in the performance of their 
duties. None of the existing technologies found on commercial fishing 
vessels can accurately identify other vessels to the extent that AIS 
can. Additionally, in our analysis of costs and benefits, we found 
examples of marine casualties involving commercial fishing vessels that 
could have been prevented or mitigated with the use of AIS. More 
details on these casualties can be found in the Regulatory Assessment 
and Initial Regulatory Flexibility Act Analysis located in the docket 
for this rule (USCG-2003-14757).
    One commenter asked us several questions regarding whether use of 
an AIS would satisfy various ``Rules of the Road'' under the 
International Regulations for Preventing Collisions at Sea (COLREGS) or 
the Inland Navigation Rules (33 U.S.C. 2000 and 1201, et seq.), such as 
the requirement for a lookout, the provision regarding safe speed, 
provisions regarding risk of collision, and coordinating passing 
arrangements.
    AIS is the latest of the available means a mariner will have to 
prevent collisions at sea. It is not intended to replace any of the 
existing means commonly and traditionally used by mariners to ascertain 
the risk of collision such as radar, Automatic Radar Plotting Aids 
(ARPA), lookouts, binoculars, visual bearings, relative position 
maneuvering boards, and EDCIS, but it can certainly supplement them. 
AIS provides mariners with near real-time information regarding another 
vessel's identity, dimensions, speed over ground, course over ground, 
navigation status, and heading. It will aid mariners in identifying 
other vessels in restricted visibility, and those that would be 
indistinguishable in radar sea clutter. It displays the bearing and 
range of other AIS-equipped vessels and provides another means of 
reliable communication by using ship-to-ship addressed text messages. 
In the future VTSs will be able to relay information on vessels not 
carrying AIS to AIS users. However, AIS should not be relied upon as 
the sole means to determine risk of collision, safe speed, or to avoid 
collision.
    In the temporary interim rule, we discussed that AIS can assist 
mariners in coordinating passing arrangements. AIS will allow mariners 
to accurately identify a vessel by name and call sign to effectively 
make passing arrangements, thus replacing vague radio calls such as 
``vessel off my port bow'' with more descriptive calls such as ``vessel 
NAME/Call sign, bearing XXX degrees and XX meters.'' While AIS allows 
for ship-to-ship text messaging to communicate with others and make 
passing arrangements, these private communications do not meet the 
requirements of the Vessel Bridge-to-Bridge Radiotelephone Act (33 
U.S.C. 1201 et seq.) for open broadcasts on the designated bridge-to-
bridge channel, nor does it relieve a vessel operator from the 
requirement to sound whistle signals.
    Three commenters asked the Coast Guard to test AIS on vessels on 
the Lower Mississippi River, stating that previous tests were not 
adequate.
    We do not believe that additional testing on the Lower Mississippi 
River

[[Page 60565]]

is necessary prior to implementation. The Coast Guard conducted 
exhaustive testing of precursor AIS in cooperation with stakeholders on 
the Lower Mississippi River. We detailed this testing in the ``AIS 
Testing'' section of the preamble to the AIS temporary interim rule (68 
FR 39357). We also conducted tests with the AIS being required in this 
regulation (ITU-R M.1371-1) in other VTS areas, and monitored similar 
tests conducted in other countries. However, the Coast Guard will 
continue to conduct system acceptance testing of the newly installed 
AIS shoreside network in the Lower Mississippi River.
    Five commenters stated that AIS should require only minimal 
information from vessel operators, so that the information flow to and 
from AIS does not distract vessel operators from their other duties.
    We agree that AIS users should not be burdened unnecessarily. One 
goal of AIS is to unburden mariners from the important, although 
tedious, tasks of reporting information to a VTS. Through AIS these 
reports are automated and additional voyage data may be transmitted. 
Whether vessels are required to supply this additional data (people on 
board, destination, and estimated time of arrival) will be determined 
by the VTS, which will take into consideration the reporting exemptions 
listed in 33 CFR 161.23.
    One commenter asked whether the operator of a vessel entering a 
VMRS area must call the VTS on a VHF voice channel and whether the VTS 
will notify users of required actions by message or on VHF voice 
channels.
    This rule mandates AIS position reports in lieu of VTS voice 
reports; however, it does not abolish the requirements set forth in 33 
CFR part 161 regarding deviation requests, monitoring requirements, 
sailing plans, and final reports. Additionally, VTS and VTS users 
should still rely upon VHF voice communications on the designated VTS 
frequencies as the primary mode of VTS communication. VTS areas will 
eventually supplement these broadcasts with pertinent AIS text or 
binary messages.
    One commenter asked whether a vessel could use AIS as a tool even 
if the vessel it is communicating with is not in sight, citing 
confusion with the COLREGS and Inland Navigation Rules Eleven to 
Eighteen.
    Inland Navigation Rule Three clearly states that vessels are deemed 
to be in sight of one another only when one can be observed visually 
from the other, not when observed electronically (e.g., AIS or radar). 
However, AIS-like radar--is still a useful tool to use when making 
navigational decisions prior to being in the sight of another vessel.
    One commenter asked for clarification on the training requirements 
for an AIS operator.
    At this time, we envision no additional training requirements other 
than reading the AIS owner's manual and being familiar with operation 
of the AIS. However, mariners seeking a greater understanding of AIS 
and its uses may wish to read a document developed by the International 
Association of Marine Aids to Navigation and Lighthouse Authorities 
(IALA) titled ``IALA Guidelines on the Universal Automatic 
Identification System (AIS), Volume 1, Part 1--Operational Issues, 
Edition 1.1, December 2002,'' that is available at http://www.iala-aism.org.
    One commenter asked how many vessels are displayed on an AIS when a 
vessel is in a crowded harbor.
    AIS is designed to provide information on a minimum of the 20 
closest active AIS targets.

Editorial

    The temporary interim rule contained a typographical error, which 
is corrected in this rule. In Sec. Sec.  164.03 and 164.46, the IMO 
circular ``Guidelines for Installation of Shipborne Automatic 
Identification System (AIS), dated January 6, 2003'' should have been 
titled ``SN/Circ.227'' vice ``SN/Circ.277.''
    We have also added a note to 33 CFR 164.46(a) to clarify which 
international tonnage convention is being identified.

Procedural

    Five commenters requested a longer comment period specifically for 
the AIS temporary interim rule.
    We did not extend the comment period on this rule due to the need 
to follow the MTSA's statutory deadline for issuance of regulations. We 
acknowledge that these regulations are being implemented in a short 
period of time. We have, however, reopened the comment period on our 
previously published notice titled ``Automatic Identification System; 
Expansion of Carriage Requirements for U.S. Waters'' (USCG 2003-14878; 
July 1, 2003; 68 FR 39369).

Incorporation by Reference

    The Director of the Federal Register has approved the material in 
Sec.  164.03 for incorporation by reference under 5 U.S.C. 552 and 1 
CFR part 51. You may inspect this material at U.S. Coast Guard 
Headquarters where indicated under ADDRESSES. Copies of the material 
are available from the sources listed in Sec.  164.03.

Regulatory Assessment

    This final rule is a ``significant regulatory action'' under 
section 3(f) of Executive Order 12866, Regulatory Planning and Review. 
The Office of Management and Budget has reviewed it under that Order. 
It requires an assessment of potential costs and benefits under section 
6(a)(3) of that Order. It is significant under the regulatory policies 
and procedures of the Department of Homeland Security. A final 
assessment is available in the docket as indicated under ADDRESSES. A 
summary of the assessment and changes from the draft assessment 
follows.

Cost Assessment

    This final rule is requiring the carriage of AIS on all U.S. flag 
SOLAS vessels, certain domestic vessels in VTS areas, and foreign flag 
vessels less than 300 gross tonnage that call on ports in the U.S. We 
estimate that 438 U.S. flag SOLAS vessels, 2,963 non-SOLAS domestic 
vessels, and 70 non-SOLAS foreign vessels will be affected by this 
final rule.
    The estimated total present value cost of this final rule is $50.4 
million (where the period of analysis is 2003-2012). An estimated 
present value $5.2 million is for the U.S. flag SOLAS fleet, $44.1 
million is for the domestic, non-SOLAS fleet in VTS areas, and $1.1 
million is for the foreign, non-SOLAS fleet that call on ports in the 
U.S.
    In the first year of implementation, the estimated cost is $1.9 
million for the U.S. flag SOLAS fleet, $27.6 million for the domestic, 
non-SOLAS fleet in VTS areas, and less than $1 million for the foreign, 
non-SOLAS fleet. Following initial implementation, the estimated annual 
cost is less than $1 million for the entire affected population.

Safety Benefits

    The Coast Guard expects both quantifiable and non-quantifiable 
benefits as a result of the final rule. Quantified benefits include 
avoided property damage, injuries, fatalities, and pollution events as 
a result of having an AIS. Other benefits include better situational 
awareness, information, and communications. The final rule will also 
enhance Coast Guard missions such as marine safety and security, aids 
to navigation, and maritime mobility.
    In order to quantify the benefits of AIS implementation, the Coast 
Guard reviewed Marine Casualty Incident Reports (MCIRs) from 1993-1999 
that involved the vessel populations affected by this final rule. These 
incidents were

[[Page 60566]]

used to develop a historical rate of marine casualties in VTS areas to 
determine the effectiveness of AIS as a mitigating factor.
    The estimated total present value benefit of the final rule is 
$24.4 million (2003-2012). An estimated present value $13.3 million is 
for the U.S. flag SOLAS fleet, $11.1 million is for the domestic, non-
SOLAS fleet in VTS areas. We did not find any quantified safety 
benefits for the foreign, non-SOLAS fleet.

Security Benefits

    This final rule is one of six final rules that implement national 
maritime security initiatives concerning general provisions, Area 
Maritime Security (ports), vessels, facilities, Outer Continental Shelf 
(OCS) facilities, and AIS. The Coast Guard used the National Risk 
Assessment Tool (N-RAT) to assess benefits that would result from 
increased security for vessels, facilities, OCS facilities, and areas. 
The N-RAT considers threat, vulnerability, and consequences for several 
maritime entities in various security-related scenarios. For a more 
detailed discussion on the N-RAT and how we employed this tool, refer 
to ``Applicability of National Maritime Security Initiatives'' in the 
temporary interim rule titled ``Implementation of National Maritime 
Security Initiatives'' (68 FR 39243) (part 101). For this benefit 
assessment, the Coast Guard used a team to calculate a risk score for 
each entity and scenario before and after the implementation of 
required security measures. The difference in before and after scores 
indicated the benefit of the proposed action.
    We recognized that the final rules are a ``family'' of rules that 
will reinforce and support one another in their implementation. We have 
ensured, however, that risk reduction that is credited in one rule is 
not also credited in another. For a more detailed discussion on the 
benefit assessment and how we addressed the potential to double-count 
the risk reduced, refer to ``Benefit Assessment'' in the temporary 
interim rule titled ``Implementation of National Maritime Security 
Initiatives'' (68 FR 39274) (part 101).
    We determined annual risk points reduced for each of the six final 
rules using the N-RAT. The benefits are apportioned among the vessel, 
facility, OCS facility, area, and AIS rules. As shown in Table 1, the 
implementation of AIS for the affected population reduces 1,422 risk 
points annually through 2012. The benefits attributable for part 101, 
General Provisions, were not considered separately since this part is 
an overarching section for all the parts.

                             Table 1.--Annual Risk Points Reduced by the Final Rules
----------------------------------------------------------------------------------------------------------------
                                                     Annual risk points reduced by final rule
                                 -------------------------------------------------------------------------------
         Maritime entity              Vessel         Facility      OCS facility
                                     security        security        security           AMS             AIS
----------------------------------------------------------------------------------------------------------------
Vessels.........................         778,633           3,385           3,385           3,385           1,317
Facilities......................           2,025         469,686  ..............           2,025  ..............
OCS Facilities..................              41  ..............           9,903  ..............  ..............
Port Areas......................             587             587  ..............         129,792             105
                                 -----------------
    Total.......................         781,285         473,659          13,288         135,202           1,422
----------------------------------------------------------------------------------------------------------------

    Once we determined the annual risk points reduced, we discounted 
these estimates to their present value (7 percent discount rate, 2003-
2012) so that they could be compared to the costs. We presented cost 
effectiveness, or dollars per risk point reduced, in two ways: First, 
we compared the first-year cost and first-year benefit because first-
year cost is the highest in our assessment as companies develop 
security plans and purchase equipment. Second, we compared the 10-year 
present value cost and the 10-year present value benefit. The results 
of our assessment are presented in Table 2.

               Table 2.--First-Year and 10-Year Present Value Cost and Benefit of the Final Rules
----------------------------------------------------------------------------------------------------------------
                                                                    Final rule
                                 -------------------------------------------------------------------------------
              Item                    Vessel         Facility      OCS  facility
                                     security        security        security           AMS            AIS *
----------------------------------------------------------------------------------------------------------------
First-Year Cost (millions)......            $218          $1,125              $3            $120             $30
First-Year Benefit..............         781,285         473,659          13,288         135,202           1,422
First-Year Cost Effectiveness ($/            279           2,375             205             890          21,224
 Risk Point Reduced)............
10-Year Present Value Cost                 1,368           5,399              37             477              26
 (millions).....................
10-Year Present Value Benefit...       5,871,540       3,559,655          99,863       1,016,074          10,687
10-Year Present Value Cost                   233           1,517             368             469           2,427
 Effectiveness ($/Risk Point
 Reduced).......................
----------------------------------------------------------------------------------------------------------------
* Cost less monetized safety benefit.

    Although we have quantified these security benefits relative to 
AIS, the N-RAT is limited in its ability to measure benefits 
attributable to intelligence or information gathering. These 
limitations are discussed in the ``Assessment Limitations'' section in 
the preamble of the temporary interim rule titled ``Implementation of 
National Maritime Security Initiatives'' (USCG-2003-14792).
    Congress mandated an AIS carriage requirement on domestic (non-
SOLAS) vessels in 46 U.S.C. 70114, and provided an explicit phase-in 
schedule for AIS in section 102(e) of the MTSA. Strictly upon 
consideration of

[[Page 60567]]

monetized safety benefits, as measured through decreased collisions and 
the resulting decrease in injuries, mortalities, and pollution 
incidents, the cost of AIS installation for the domestic fleet far 
outweighs the benefit over a 10-year period (0.25 benefit-cost ratio). 
This ratio results from the high costs of purchasing and installing the 
unit (an estimated $9,330 per vessel), and the types of marine 
casualties that AIS is expected to mitigate, where damage is not 
usually severe nor is there significant loss of life. In view of the 
benefit-cost ratio presented above, the Coast Guard has shared with the 
Congress all significant information provided by the public that 
addresses the reasonableness of implementing the statute. A copy of 
this letter is available in the docket where indicated under ADDRESSES.
    Because there is not yet a mass market for AIS, the cost per unit 
in the next few years, when the domestic fleet is required to purchase 
AIS, is likely to be higher than when it is replaced (around 2012). 
Because the AIS market is in its infancy, we cannot estimate how much 
the unit cost will decrease over the next decade. If many manufacturers 
enter the market, costs are likely to drop through competition. Because 
manufacturers have a potential world market and a significant U.S. 
market, many may attempt to capture a segment. Conversely, if only a 
few players emerge worldwide, AIS costs could remain high. Because 
manufacturers must engage in a rigorous approval process and cannot be 
assured that they will recoup research and development costs through 
unit sales, there is the potential that only a few dominant players 
will emerge in the AIS market. Because we cannot determine the trend of 
the AIS market and we did not want to understate the cost for AIS, we 
assumed that the cost for units in 2012 would again be approximately 
$9,000 per unit. It is possible that an AIS unit will not be this 
expensive to replace.
    In terms of security, we estimated that we will not experience a 
significant benefit from a decrease in risk, as measured in risk points 
reduced in the N-RAT, as a result of AIS installation. There are two 
primary reasons for this estimate. First, the N-RAT was an internal 
Coast Guard tool that was modified to estimate the national benefits 
attributable to the suite of security rules mandated by the MTSA. The 
tool was not designed to measure the security benefits of AIS 
specifically. The N-RAT does not, therefore, robustly capture the risk 
mitigation potential of AIS. Second, the Coast Guard strongly believes 
that AIS is critical to maritime domain awareness. However, we are 
unable to quantify or monetize the benefits of this Coast Guard mission 
or the individual contribution of AIS to it.
    While the monetized benefit of the rule does not exceed its cost, 
the Coast Guard believes that AIS has the potential to mitigate a 
transportation security incident. The Coast Guard recognizes that a 
single sensor, such as AIS, will not likely prevent a transportation 
security incident alone--but if AIS can have a mitigating effect on 
just a single incident, the security benefit could be significant. The 
Coast Guard must consider AIS in its suite of security rules and has 
developed a final rule that considers the mandates of the MTSA in light 
of the high initial costs of purchasing the unit by requiring AIS in 
VTS areas only for the domestic fleet. We are concentrating our efforts 
in VTS areas since this is where we can begin accruing the most 
benefit--for industry, the public, and the Coast Guard--in the shortest 
period of time. However in response to public comment, in Sec.  
164.46(a)(1) and (a)(2)(i), we have removed the carriage requirement of 
the temporary interim rule for commercial fishing vessels and some 
small passenger vessels. Through this final rule we are attempting to 
maximize the return on investment as quickly and as effectively as 
practical.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this rule would have a significant economic impact 
on a substantial number of small entities. The term ``small entities'' 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000. We 
have reviewed this final rule for potential economic impacts on small 
entities. A Final Regulatory Flexibility Analysis discussing the impact 
of this rule on small entities is available in the docket where 
indicated under ADDRESSES.

Number and Types of Small Entities Affected

U.S. Flag SOLAS Vessels

    Of the affected population, we estimated that of the 438 total U.S. 
flag SOLAS vessels, 205 are owned by 122 small businesses. The 
remaining 233 vessels are owned by approximately 40 large companies.
    We estimated the cost of an AIS unit per vessel in the first year 
will be $9,330. Of this, $7,000 is for the AIS unit, $2,000 is for 
installation, and $330 is for mariner training. We estimated that 
following installation, each AIS will require $250 in annual 
maintenance to replace such items as the antenna, keyboard, and display 
screen. We estimated that the entire unit will be replaced after eight 
years.
    We found that annual maintenance costs will have a less-than-1-
percent impact on annual revenue for all small businesses with U.S. 
flag SOLAS vessels. First-year impacts to small businesses, therefore, 
are the focus of this analysis. To estimate the revenue impact on small 
businesses in the first year, the cost per vessel for AIS, $9,330, was 
multiplied by the number of vessels owned by each company, then divided 
by the average annual revenue for each company, as reported in the 
online databases. Of the 122 small businesses that own U.S. flag SOLAS 
vessels, we found revenue for 59 of them (48 percent). Table 3 presents 
the revenue impact for the 59 entities with known average annual 
revenue.

 Table 3.--Effect of First-Year Cost on Average Annual Revenue for Small
                 Entities Owning U.S. Flag SOLAS Vessels
------------------------------------------------------------------------
                                                 Number of    Percent of
                                                  entities     entities
 Percent of annual revenue that is first-year    with known   with known
                   AIS cost                        annual       annual
                                                  revenues     revenues
------------------------------------------------------------------------
0-3...........................................           43           73
 3-5...............................            5            8
 5-10..............................            4            7
 10-20.............................            6           10
 20-30.............................            0            0
 30................................            1            2
                                               --------------
    Total.....................................           59          100
------------------------------------------------------------------------

    As shown, the final rule will have a less-than-3-percent impact on 
73 percent of small businesses owning non-SOLAS vessels in the first 
year it is in effect. Approximately 88 percent have a less-than-10-
percent impact.

Number and Types of Small Entities Affected: Non-SOLAS Fleet in VTS 
Areas

    We estimated that there are 637 small businesses that will be 
affected by the final rule that own non-SOLAS vessels that transit VTS 
areas. These 637 companies own 1,349 vessels, representing 46 percent 
of the 2,963 non-SOLAS vessels affected by the rule. An estimated 1,456 
vessels (49 percent) are owned by 150 large businesses, and 55 vessels 
(2 percent) are owned by State and local governments. There are

[[Page 60568]]

103 vessels that transit VTS areas (3 percent of the non-SOLAS fleet) 
that have no company associated with the vessel due to missing company 
information in our data. We could not be certain if these vessels 
belong to small, large, or government entities and did not apportion 
these 103 vessels to one type of entity or another.
    We estimated the cost of AIS per vessel in the first year will be 
$9,330. As with the U.S. flag SOLAS fleet, annual cost following 
installation of AIS will have little impact on annual revenues--a less-
than-1 percent impact on annual revenue for most small businesses. The 
first-year cost of this final rule, therefore, will again have the 
greatest impact on average annual revenue. To estimate the revenue 
impact on small businesses in the first year, the cost per vessel for 
AIS, $9,330, was multiplied by the number of vessels owned by each 
company, then divided by the average annual revenue for each company. 
Of the 637 small businesses that own non-SOLAS vessels in VTS areas, we 
found revenue for 392 of them (62 percent). The results of the analysis 
for the non-SOLAS fleet in VTS areas with known company information are 
presented in Table 4.

 Table 4.--Effect of First-Year Cost on Average Annual Revenue for Small
        Entities Owning Domestic, Non-SOLAS Vessels in VTS Areas
------------------------------------------------------------------------
                                                 Number of    Percent of
                                                  entities     entities
 Percent of  annual revenue that is first-year   with known   with known
                   AIS cost                        annual       annual
                                                  revenues     revenues
------------------------------------------------------------------------
0-3...........................................          303           77
 3-5...............................           32            8
 5-10..............................           28            7
 10-20.............................           15            4
 20-30.............................           10            3
 30................................            4            1
                                               --------------
    Total.....................................          392          100
------------------------------------------------------------------------

    As shown, the final rule will have a less-than-3-percent impact on 
77 percent of small businesses owning non-SOLAS vessels in the first 
year it is in effect. Approximately 92 percent have a less-than-10-
percent impact. We concluded, therefore, that this final rule may have 
a significant economic impact on a substantial number of small 
entities.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small 
entities in understanding the rule so that they could better evaluate 
its effects on them and participate in the rulemaking. We provided 
small entities with a name, phone number, and e-mail address to contact 
if they had questions concerning the provisions of the final rules or 
options for compliance.
    We have placed Small Business Compliance Guides in the dockets for 
the Area Maritime, Vessel, and Facility Security and the AIS rules. 
These Compliance Guides will explain the applicability of the 
regulations, as well as the actions small businesses will be required 
to take in order to comply with each respective final rule. We have not 
created Compliance Guides for part 101 or for the OCS Facility Security 
final rule, as neither will affect a substantial number of small 
entities.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

Collection of Information

    This final rule contains no new collection of information 
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520). The reports required by this rule are considered to be 
operational communications, transitory in nature, and, do not 
constitute a collection of information under the Paperwork Reduction 
Act.
    We did not receive comments regarding collection of information.

Federalism

    A rule has implications for Federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on them. It is well settled that States may 
not regulate in categories reserved for regulation by the Coast Guard. 
It is also well settled, now, that all of the categories covered in 46 
U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, 
repair, maintenance, operation, equipping, personnel qualification, and 
manning of vessels), as well as the reporting of casualties and any 
other category in which Congress intended the Coast Guard to be the 
sole source of a vessel's obligations, are within the field foreclosed 
from regulation by the States. In addition, under the authority of 
Title I of the Ports and Waterways Safety Act, 33 U.S.C. 1221-1232 
(specifically 33 U.S.C. 1223) and the MTSA this regulation will preempt 
any State action on the subject of Automatic Identification System 
carriage requirements. (See the decision of the Supreme Court in the 
consolidated cases of United States v. Locke and Intertanko v. Locke, 
529 U.S. 89, 120 S. Ct. 1135 (March 6, 2000).) Our AIS carriage 
requirement rule falls into the category of equipping of vessels. 
Because the States may not regulate within this category, preemption 
under Executive Order 13132 is not an issue.
    We did not receive comments regarding Federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or Indian Tribal 
government, in the aggregate, or by the private sector of $100,000,000 
or more in any 1 year. We discuss the effects of this final rule 
elsewhere in this preamble. However, this final rule is exempted from 
assessing the effects of the regulatory action as required by the Act 
because it is necessary for the national security of the United States 
(2 U.S.C. 1503(5)).
    We did receive one comment regarding the Unfunded Mandates Reform 
Act; this comment is discussed within the ``Discussion of Comments and 
Changes'' section of this preamble.

Taking of Private Property

    This final rule will not effect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights. We did receive one comment regarding the taking of 
private property; this comment is discussed within the ``Discussion of 
Comments and Changes'' section of this preamble.

Civil Justice Reform

    This final rule meets applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. We did not receive 
comments regarding Civil Justice Reform.

[[Page 60569]]

Protection of Children

    We have analyzed this final rule under Executive Order 13045, 
Protection of Children from Environmental Health Risks and Safety 
Risks. While this final rule is an economically significant rule, it 
does not create an environmental risk to health or risk to safety that 
may disproportionately affect children. We did not receive comments 
regarding the protection of children.

Indian Tribal Governments

    This final rule does not have tribal implications under Executive 
Order 13175, Consultation and Coordination with Indian Tribal 
Governments, because it does not have a substantial direct effect on 
one or more Indian tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes. We 
did not receive comments regarding Indian Tribal Governments.

Energy Effects

    We have analyzed this final rule under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order. Although it is a ``significant 
regulatory action'' under Executive Order 12866, it is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. The Administrator of the Office of Information and 
Regulatory Affairs has not designated it as a significant energy 
action. Therefore, it does not require a Statement of Energy Effects 
under Executive Order 13211.
    This final rule has a positive effect on the supply, distribution, 
and use of energy. The final rule provides for enhanced maritime 
security, which will prove beneficial for the supply, distribution, and 
use of energy at increased levels of maritime security.
    We did not receive comments regarding energy effects.

Environment

    We have considered the environmental impact of this final rule and 
concluded that under figure 2-1, paragraphs (34)(d), (34)(e), and 
(34)(i) of Commandant Instruction M16475.lD, this rule is categorically 
excluded from further environmental documentation. This final rule 
concerns vessel equipment requirements that will contribute to a higher 
level of marine safety and maritime domain awareness for U.S. port and 
waterways. A ``Categorical Exclusion Determination'' is available in 
the docket where indicated under ADDRESSES.
    This rulemaking will not significantly impact the coastal zone. 
Further, the rulemaking and the execution of this rule will be done in 
conjunction with appropriate State coastal authorities. The Coast Guard 
will comply with the requirements of the Coastal Zone Management Act 
while furthering its intent to protect the coastal zone.
    We did not receive comments regarding the environment.

List of Subjects

33 CFR Part 26

    Communications equipment, Marine safety, Radiotelephone, Vessels.

33 CFR Part 161

    Harbors, Navigation (water), Reporting and recordkeeping 
requirements, Vessels, Waterways.

33 CFR Part 164

    Incorporation by reference, Marine safety, Navigation (water), 
Reporting and recordkeeping requirements, Waterways.

33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and 
recordkeeping requirements, Security measures, Waterways.

0
Accordingly, the interim rule amending 33 CFR parts 26, 161, 164, and 
165 that was published at 68 FR 39353 on July 1, 2003, and amended at 
68 FR 41913 on July 16, 2003, is adopted as a final rule with the 
following changes:

PART 161--VESSEL TRAFFIC MANAGEMENT

0
1. The authority citation for part 161 continues to read as follows:

    Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. 70114, 70117; Pub. L. 
107-295, 116 Stat. 2064; Department of Homeland Security Delegation 
No. 0170.1.


Sec.  161.12  [Amended]

0
2. In Sec.  161.12, in note 1 following table 161.12(c), add the 
following sentence to the end of the note: ``The requirements set forth 
in Sec. Sec.  161.21 and 164.46 of this subchapter apply in those areas 
denoted with a MMSI number.''

PART 164--NAVIGATION SAFETY REGULATIONS

0
3. The authority citation for part 164 continues to read as follows:

    Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. 2103, 3703, 70114, 
70117; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland 
Security Delegation No. 0170.1. Sec. 164.13 also issued under 46 
U.S.C. 8502. Sec. 164.61 also issued under 46 U.S.C. 6101.

0
4. In Sec.  164.02, revise paragraph (a) introductory text to read as 
follows:


Sec.  164.02  Applicability exception for foreign vessels.

    (a) Except as provided in Sec.  164.46(a)(2) of this part, 
including Sec. Sec.  164.38 and 164.39, this part does not apply to 
vessels that:
* * * * *


Sec.  164.03  [Amended]

0
5. In Sec.  164.03(b), under ``International Maritime Organization'', 
remove the word ``SN/Circ.277'' and add, in its place, the word ``SN/
Circ.227''.


Sec.  164.43  [Amended]

0
6. In Sec.  164.43, in paragraph (a) introductory text, remove the 
words ``July 1'' and add, in their place, the words ``December 31''.

0
7. Revise Sec.  164.46 to read as follows:


Sec.  164.46  Automatic Identification System (AIS).

    (a) The following vessels must have a properly installed, 
operational, type approved AIS as of the date specified:
    (1) Self-propelled vessels of 65 feet or more in length, other than 
passenger and fishing vessels, in commercial service and on an 
international voyage, not later than December 31, 2004.
    (2) Notwithstanding paragraph (a)(1) of this section, the 
following, self-propelled vessels, that are on an international voyage 
must also comply with SOLAS, as amended, Chapter V, regulation 
19.2.1.6, 19.2.4, and 19.2.3.5 or 19.2.5.1 as appropriate (Incorporated 
by reference, see Sec.  164.03):
    (i) Passenger vessels, of 150 gross tonnage or more, not later than 
July 1, 2003;
    (ii) Tankers, regardless of tonnage, not later than the first 
safety survey for safety equipment on or after July 1, 2003;
    (iii) Vessels, other than passenger vessels or tankers, of 50,000 
gross tonnage or more, not later than July 1, 2004; and
    (iv) Vessels, other than passenger vessels or tankers, of 300 gross 
tonnage or more but less than 50,000 gross tonnage, not later than the 
first safety survey for safety equipment on or after July 1, 2004, but 
no later than December 31, 2004.
    (3) Notwithstanding paragraphs (a)(1) and (a)(2) of this section, 
the following vessels, when navigating an area denoted in table 
161.12(c) of Sec.  161.12 of this chapter, not later than December 31, 
2004:

[[Page 60570]]

    (i) Self-propelled vessels of 65 feet or more in length, other than 
fishing vessels and passenger vessels certificated to carry less than 
151 passengers-for-hire, in commercial service;
    (ii) Towing vessels of 26 feet or more in length and more than 600 
horsepower, in commercial service;
    (iii) Passenger vessels certificated to carry more than 150 
passengers-for-hire.
    Note to Sec.  164.46(a): ``Properly installed'' refers to an 
installation using the guidelines set forth in IMO SN/Circ.227 
(incorporated by reference, see Sec.  164.03). Not all AIS units are 
able to broadcast position, course, and speed without the input of an 
external positioning device (e.g. dGPS); the use of other external 
devices (e.g. transmitting heading device, gyro, rate of turn 
indicator) is highly recommended, however, not required except as 
stated in Sec.  164.46(a)(2). ``Type approved'' refers to an approval 
by an IMO recognized Administration as to comply with IMO Resolution 
MSC.74(69), ITU-R Recommendation M.1371-1, and IEC 61993-2 
(Incorporated by reference, see Sec.  164.03). ``Length'' refers to 
``registered length'' as defined in 46 CFR part 69. ``Gross tonnage'' 
refers to tonnage as defined under the International Convention on 
Tonnage Measurement of Ships, 1969.
    (b) The requirements for Vessel Bridge-to-Bridge radiotelephones in 
Sec. Sec.  26.04(a) and (c), 26.05, 26.06 and 26.07 of this chapter 
also apply to AIS. The term ``effective operating condition'' used in 
Sec.  26.06 of this chapter includes accurate input and upkeep of AIS 
data fields.
    (c) The use of a portable AIS is permissible only to the extent 
that electromagnetic interference does not affect the proper function 
of existing navigation and communication equipment on board and such 
that only one AIS unit may be in operation at any one time.
    (d) The AIS Pilot Plug, on each vessel over 1,600 gross tons on an 
international voyage, must be available for pilot use, easily 
accessible from the primary conning position of the vessel, and near a 
120 Volt, AC power, 3-prong receptacle.

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
8. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 
U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. 
L. 107-295, 116 Stat. 2064; Department of Homeland Security 
Delegation No. 0170.1.


Sec.  165.1704  [Amended]

0
9. In Sec.  165.1704(c)(6), remove the words ``July 1'' and add, in 
their place, the words ``December 31''.

    Dated: October 8, 2003.
Thomas H. Collins,
Admiral, Coast Guard, Commandant.
[FR Doc. 03-26350 Filed 10-20-03; 8:45 am]
BILLING CODE 4910-15-U