[Federal Register Volume 69, Number 116 (Thursday, June 17, 2004)]
[Rules and Regulations]
[Pages 33858-33860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13609]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 181

[USCG-2003-14272]
[RIN 1625-AA53]


Country of Origin Codes and Revision of Regulations on Hull 
Identification Numbers

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is revising its regulations to allow U.S. 
manufacturers of recreational boats to display a 2-character country of 
origin code before the 12-character hull identification number (HIN) 
without separating the two by means of borders or on a separate label. 
This removal of our previous restriction will allow U.S. manufactures 
to comply with the International Organization for Standardization (ISO) 
HIN standard, without changing the information collected by States on 
undocumented vessels that they register because the U.S. HIN remains 
only 12 characters.

DATES: This final rule is effective August 16, 2004.

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-2003-14272 and are available for inspection or 
copying at room PL-401 on the Plaza level of the Nassif Building, 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.

FOR FURTHER INFORMATION CONTACT: If you have questions on this final 
rule, call Mr. Alston Colihan, Office of Boating Safety, Coast Guard, 
telephone 202-267-0984. If you have questions on viewing or submitting 
material to the docket, call Andrea M. Jenkins, Program Manager, Docket 
Operations, telephone 202-366-0271.

SUPPLEMENTARY INFORMATION: 

Regulatory History

    On June 20, 2003, we published in the Federal Register (68 FR 
36957) a notice of proposed rulemaking (NPRM) entitled ``Country of 
Origin Codes and Revision of Regulations on Hull Identification 
Numbers.'' We received six letters commenting on the proposed rule. No 
public hearing was requested and none was held.

Background and Purpose

    In 1995, the International Organization for Standardization (ISO) 
finalized a hull identification number standard (ISO 10087:1995(E)) 
consisting of the existing Coast Guard 12-character HIN format preceded 
by a 2-character country code and a hyphen. Boat manufacturers in the 
United States that export to Europe started using the ISO HIN standard 
beginning with the 1996 model year.
    The ISO standard states that ``A HIN shall consist of 14 
consecutive characters plus a hyphen * * *'' But 33 CFR 181.27 of our 
HIN standard states, ``If additional information is displayed on the 
boat within two inches of the [12-character] hull identification 
number, that information must be separated from the hull identification 
number by means of borders or must be on a separate label so that it 
will not be interpreted as part of the hull identification number.'' 
While the ISO HIN standard includes a paragraph, ISO 10087:1995(E)(6) 
entitled ``Additional information,'' that contains language nearly 
identical to that in Sec.  181.27, the ISO additional information 
requirements do not apply to the country code and hyphen, which are 
part of the 14-character, international HIN.
    The American Boat and Yacht Council (ABYC) develops voluntary 
consensus safety standards for the design, construction, equipage, 
maintenance, and repair of small craft. An ABYC Technical Committee 
studying the ISO HIN standard and our HIN standard concluded that the 
differing requirements are a problem for U.S. builders exporting to 
Europe. One large U.S. manufacturer that exports to Europe pointed out 
that use of a separate tape to create the border required by our HIN 
standard often results in misalignment and other flaws that may be 
confused with attempts to alter an HIN.
    This proposal was discussed at the October 29, 2001 meeting of the 
National Boating Safety Advisory Council (66 FR 49445, September 27, 
2001) and there were no objections stated by State boating law 
administrators in attendance at the meeting. The NBSAC passed a 
resolution requesting the Coast Guard to immediately pursue rulemaking 
for an exception to current regulations to allow the U.S. HIN system to 
conform to the ISO HIN standard while not requiring the states to 
include the country code in their registration process.

Discussion of Comments

    By the close of the comment period on September 18, 2003, we 
received six comments from the following categories: one individual, 
one State boating official, one boat manufacturer, and three 
associations.

Rule Beneficial to Import-Export Community

    The individual supported the rule because it removes the 
limitations of the separate label requirement and will be beneficial to 
the import-export community.
    The boat manufacturer supported the rule because separation of the 
2-character country of origin code from the HIN by means of borders or 
on a separate label is burdensome and costly due to the necessity to 
maintain two different HIN labeling systems: One for boats sold 
domestically and a second one for boats exported for sale overseas. 
Removal of the requirement for borders or a separate label around the 
country of origin code will allow U.S. manufacturers to comply with the 
ISO HIN standard, without changing the information collected by the 
States on undocumented vessels they register.
    This manufacturer stated that one of the challenges the company 
faces as an exporter is being cost-effective while

[[Page 33859]]

maintaining compliance with regulations in different countries or 
regions. The more the company can streamline production to meet global 
market standards, according to the manufacturer, the greater the 
company's effectiveness as global marketing competitors. As these views 
are consistent with our proposed rule, we made no changes in the rule 
based on these two comments.

Importance of Manufacturers and State Officials Being Aware That 
Country of Origin Codes Are Not Part of U.S. HINs

    The State boating official was not opposed to the hyphen between 
the country of origin and the HIN. According to the official, one issue 
that may arise would be the entering of stolen boats into State and 
National Crime Information systems. If the country of origin is 
included as part of the HIN on a theft entry, that entry would not 
produce a ``hit'' if someone looking to see if a vessel was stolen 
simply uses the 12-digit HIN which does not include a country code. 
Therefore, the official suggests that it be made clear to manufacturers 
and state titling authorities that manufacturer's statements of origin 
and state titles only include the 12-digit HIN.
    The Coast Guard agrees. Consistent with the NBSAC resolution, our 
rule brings the U.S. HIN system into conformity to the ISO HIN standard 
and does not require the states to include the country code in their 
registration process. The manufacturer's statements of origin and state 
titles are State paperwork and ownership issues. Publication of the 
state official's concerns here in the Federal Register, however, should 
help ensure that manufacturers and State officials take note of this 
concern. In addition, we are revising our final rule to expressly 
include a reference in Sec.  181.27, that the HIN is 12 characters 
long.

Advocates for Changing to 17-Character HIN

    An association representing auto theft investigators opposed the 
proposed rule, because, according to the association, the addition of 
two new HIN characters would only serve to complicate and confuse the 
law enforcement and insurance communities, as well as various state 
registration departments and the general public. Also according to the 
comment, any HIN modification should result in the adoption of a 17-
character HIN format as approved and submitted to the Coast Guard by 
the association representing auto theft investigators, the American 
Boat and Yacht Council (ABYC) and the National Association of State 
Boating Law Administrators (NASBLA).
    Since the Coast Guard published the HIN regulations in 1972, boat 
manufacturers have had the option of including additional characters 
near the HIN, provided the additional characters were distinctly 
separate--by a hyphen from 1972 to 1984 and by means of borders or on a 
separate label from August 1, 1984 (48 FR 40716, September 9, 1983) to 
the present. United States manufacturers exporting overseas have been 
using the ISO HIN standards since 1996. In addition, the 17-character 
HIN format to which the comment refers is beyond the scope of this 
rulemaking.
    An association representing State Boating Law Administrators as 
well as an association representing investigators of boat thefts also 
opposed the proposed rule and instead, supported adoption of the 17-
character HIN format. Again, U.S. manufacturers exporting overseas have 
been using the ISO HIN standards since 1996; however, they have had to 
separate the country of origin code from the 12-character HIN by means 
of borders or with a separate label. This rule simply makes the U.S. 
HIN regulations more compatible with the ISO HIN Standard. In addition, 
the 17-character HIN format to which the associations refer is beyond 
the scope of this rulemaking that does not call for States to adjust 
for the addition of any characters to the HIN.
    All three associations indicated we were creating a 14-character 
HIN. We are not. The country of origin code is separated by a hyphen 
and is not part of the U.S. HIN. As noted above, we have revised our 
final rule to reflect that our HIN remains 12 characters.

Discussion of Rule

    We did not change the final rule from the rule we proposed in 2003 
(68 FR 36957, June 20, 2003) with the exception of inserting a 
reference to the length of the HIN, 12 characters, in Sec.  181.27. 
This final rule will relieve manufacturers of recreational boats who 
sell both internationally and domestically of the burden of the 
requirement to separate the country of origin code for the United 
States, ``U.S.-'', from the 12-character HIN by means of borders or a 
separate label. Any other information would still have to be separated 
from the 12-character HIN by means of borders or a separate label.

Regulatory Evaluation

    This rule is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866, Regulatory Planning and Review, and does 
not require an assessment of potential costs and benefits under section 
6(a)(3) of that Order. The Office of Management and Budget has not 
reviewed it under that Order. It is not ``significant'' under the 
regulatory policies and procedures of the Department of Homeland 
Security (DHS).
    We expect the economic impact of this rule to be so minimal that a 
full Regulatory Evaluation under the regulatory policies and procedures 
of DHS is unnecessary. Allowing manufacturers following the ISO HIN 
format to separate the country of origin code without the use of 
borders or a separate label would relieve a burden and thereby reduce 
the costs of complying with the HIN display requirement.

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. 
The Small Business Administration (SBA) has size standards for each 
industry and has established codes under the North American Industry 
Classification System (NAICS). Each NAICS code identifies an industry, 
and has a corresponding revenue- or employee-based small business size 
standard. The only type of small entity that this rule would affect 
would be small businesses.
    There were 4,420 U.S. manufacturers of recreational boats in 2002, 
an estimated 80 percent of which qualify as small businesses by the 
size standards of the SBA. However, we have observed that the 
businesses we have identified as small manufacture fewer numbers of 
boats than their larger competitors. In addition, most of the 
businesses we have identified as small do not export to the European 
market and therefore would not follow the ISO HIN format.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that 
this rule would not 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 have offered to assist small 
entities in understanding this final rule so that they can better 
evaluate its effect on

[[Page 33860]]

them and participate in the rulemaking. If the rule affects your small 
business, organization, or governmental jurisdiction and you have 
questions concerning its provisions or options for compliance, please 
contact Mr. Alston Colihan, Project Manager, Office of Boating Safety, 
by telephone at (202) 267-0984 or by e-mail at [email protected].
    Small businesses may also 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 would call for no new collection of information 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

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. We have analyzed this final rule 
under that Order and have determined that it does not have implications 
for 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 tribal government, in 
the aggregate, or by the private sector of $100,000,000 or more in any 
one year. This final rule would not impose an unfunded mandate.

Taking of Private Property

    This rule would not affect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

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.

Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection 
of Children from Environmental Health Risks and Safety Risks. This rule 
is not an economically significant rule and would not create an 
environmental risk to health or risk to safety that might 
disproportionately affect children.

Indian Tribal Governments

    This rule does not have tribal implications under Executive Order 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it would 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.

Energy Effects

    We have analyzed this 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 because it is not a ``significant 
regulatory action'' under Executive Order 12866 and 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.

Environment

    We have analyzed this rule under Commandant Instruction M16475.lD, 
which guides the Coast Guard in complying with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and 
have concluded that there are no factors in this case that would limit 
the use of a categorical exclusion under section 2.B.2 of the 
Instruction. Therefore, this rule is categorically excluded, under 
figure 2-1, paragraph (34)(d), of the Instruction, from further 
environmental documentation. The proposed rule to remove the 
requirement to separate the 2-character country of origin code from the 
12-character HIN by means of borders or on a separate label relates to 
the documentation of vessels and is not expected to have any 
environmental impact. An ``Environmental Analysis Checklist'' and a 
``Categorical Exclusion Determination'' are available in the docket 
where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 181

    Labeling, Marine safety, Reporting and recordkeeping requirements.

0
For the reasons set out in the preamble, the Coast Guard amends 33 CFR 
part 181 as follows:

PART 181--MANUFACTURER REQUIREMENTS

0
1. The authority citation for part 181 is revised to read as follows:

    Authority: 46 U.S.C. 4302.

0
2. Revise Sec.  181.27 to read as follows:


Sec.  181.27  Information displayed near hull identification number.

    With the exception of the characters ``US-'', which constitute the 
country of origin code for the United States, if information is 
displayed on the boat within 2 inches of the 12-character hull 
identification number (HIN), that information must be separated from 
the HIN by means of borders or must be on a separate label, so that it 
will not be interpreted as part of the hull identification number.

    Dated: May 10, 2004.
David S. Belz,
Rear Admiral, U.S. Coast Guard, Director of Operations.
[FR Doc. 04-13609 Filed 6-16-04; 8:45 am]
BILLING CODE 4910-15-P