[Federal Register Volume 75, Number 68 (Friday, April 9, 2010)]
[Rules and Regulations]
[Pages 18095-18107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7899]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 393

[Docket No. MARAD-2010-0035]
RIN 2133-AB70


America's Marine Highway Program

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Final rule.

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SUMMARY: On October 9, 2008, the Department of Transportation published 
an interim final rule that established America's Marine Highway 
Program, under which the Secretary will designate marine highway 
corridors and identify and support short sea transportation projects to 
expand domestic water transportation services as an alternative means 
of moving containerized and wheeled freight cargoes; mitigate the 
economic, environmental and energy costs of landside congestion; 
integrate the marine highway into the transportation planning process; 
and research improvements in efficiencies and environmental 
sustainability. This action is required by Public Law 110-140, the 
Energy Independence and Security Act of 2007. The interim final rule 
solicited comments, which are discussed in the ``Section by Section 
Review'' below and incorporated in this final rule. In addition, the 
interim final rule sought recommendations for designation of Marine 
Highway Corridors. This rule adopts the interim final rule, addresses 
Marine Highway Corridors (and continues to solicit recommendations for 
Marine Highway Corridor recommendations), and establishes eligibility 
requirements, criteria and information necessary to apply for 
designation as a Marine Highway Project by the Secretary of 
Transportation. Solicitations from applicants desiring Marine Highway 
Project designation will be initiated through notification in the 
Federal Register at a future date. This rule also sets forth the manner 
in which the Department of Transportation will identify and recommend 
solutions to impediments to expanded use of marine highways and lays 
the groundwork for coordinating with States, private transportation 
providers, and local and Tribal governments, and conducting research 
related to marine highway development. The program should improve 
system capacity and efficiency, air quality, highway safety, and 
national security.

DATES: This final rule is effective April 9, 2010.

FOR FURTHER INFORMATION CONTACT: Michael Gordon, Office of Intermodal 
System Development, Marine Highways and Passenger Services, at (202) 
366-5468, via e-mail at [email protected], or by writing to the 
Office of Marine Highways and Passenger Services, MAR-520, Suite W21-
315, 1200 New Jersey Avenue, SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Background

    Following the current economic slowdown, experts project that 
cargoes moving through our ports will return to pre-recession levels. 
In fact, freight tonnage of all types, including exports, imports, and 
domestic shipments, is expected to grow 73 percent by 2035 from 2008 
levels [``Freight Facts and Figures 2009'', U.S. Department of 
Transportation, Federal Highway Administration, Office of Freight 
Management and Operations; Table 2-1; November 2009]. The development 
of a capable, cost-effective, safe and resilient transportation system 
is essential to handling the movement of this cargo in a manner that is 
efficient with respect to cost, energy usage, and environmental 
consequences. Since nearly all international cargos move along our 
surface transportation corridors to access or depart from seaports, 
which are major gateways for commerce, getting such cargoes to and from 
the major seaports could involve more usage of marine corridors to and 
from smaller and medium-sized maritime ports.
    The challenges faced by our nation's transportation planners and 
policymakers involve making better use of existing infrastructure, 
addressing the need for more capacity in our freight corridors, and 
reducing the environmental impacts of transportation. In recent years, 
it has become increasingly evident that the Nation's existing road and 
rail infrastructure cannot adequately meet our future transportation 
needs. Land-based infrastructure expansion opportunities are limited in 
many critical bottleneck areas due to geography or very high right-of-
way acquisition costs. This is particularly severe in urban areas where 
there are additional concerns about emissions from transportation 
sources. Investments in additional infrastructure, particularly 
highways, must consider the full costs to society of more greenhouse 
gas emissions and pollutants and, potentially, the need to pay for such 
emissions in future transportation fees. Accordingly, new road and rail 
investments may not be feasible, desirable, or cost-beneficial in many 
instances.
    The cost of expanding our existing land-based transportation 
systems, along with transportation efficiency and environmental 
concerns, has caused many policymakers to re-focus on the underutilized 
transportation capacity of the Nation's waterways. To help address 
these challenges, America's Marine Highways can represent a viable 
alternative where water transportation is an option. Expanding the 
Marine Highways can be done in a way that reduces emissions, will 
require less new infrastructure than land transportation alternatives, 
generates significant fuel savings, and can increase resiliency in the 
surface transportation system. The Marine Highways, consisting of more 
than 25,000 miles of inland, intracoastal, and coastal waterways, have 
considerable room for expansion. [U.S. Army Corps of Engineers, 
``Waterborne Commerce of the United States'' (2005).] In fact, while 
the inland river system, Great Lakes, and coastal fleets still move a 
billion metric tons of cargo each year, less than 4 percent of the 
Nation's domestic freight (by volume) now moves by water. However, this 
is down from 1957 levels, when over 31 percent moved by water 
[``National Transportation Statistics 2009,'' U.S. Department of 
Transportation, Research and Innovative Technology Administration--
Bureau of Transportation Statistics; Table 1-52: Freight Activity in 
the United States: 1993, 1997, 2002, and 2007].
    Water transportation can be expanded quickly and at little 
incremental cost to meet freight traffic needs. In addition to offering 
abundant and reliable capacity under normal conditions, waterways 
provide critical resiliency to the transportation system during 
emergencies when land-based freight and passenger delivery systems are 
damaged. Especially in urban areas, the movement of both freight and 
passengers by waterway can represent an excellent opportunity to 
improve

[[Page 18096]]

livability and quality of life for communities.
    In recognition of the growing need to address concerns about land-
based transportation efficiencies and sustainability, Congress enacted 
the Energy Independence and Security Act of 2007 (Energy Act), a sub-
title of which requires the Secretary of Transportation (Secretary) to 
``establish a short sea transportation program and designate short sea 
transportation projects to be conducted under the program to mitigate 
surface congestion'' [Energy Independence and Security Act of 2007, 
Subtitle C--Marine Transportation; Sec. 1121 Short Sea Transportation 
Initiative]. Among the primary program objectives listed in the Energy 
Act is to reduce surface congestion to maximize public benefits that 
include, but are not limited to, improved air quality, highway safety, 
and national security. Of principal concern to the Energy Act is the 
movement of intermodal containerized and wheeled cargos which currently 
move largely by rail and truck, often under congested surface 
conditions.
    The America's Marine Highway Program envisioned by the Department 
of Transportation will implement the Energy Act's requirements for 
short sea shipping by working to bring about a seamless, energy-
efficient, and climate-friendly transportation system through the 
creation and expansion of domestic water transportation services. To 
achieve these overall objectives, the program will include the 
development of marine highway corridors, identification and support of 
specific marine highway projects, the integration of the marine highway 
into the transportation planning process, and research to improve 
efficiencies and environmental sustainability. This will be 
accomplished through an organized outreach effort to State and local 
governments, private transportation providers and Tribal governments, 
by leveraging recent discretionary Federal transportation grants (the 
Transportation Investments Generating Economic Recovery, or ``TIGER,'' 
Program) to realize the inherent advantages of these types of services, 
and working to remove impediments and identify incentives to optimize 
system performance.
    The goal of America's Marine Highway Program is to develop and 
integrate these services into the overall transportation system in a 
self-sustaining, commercially-viable manner that also recognizes the 
public benefits these services create. The Marine Highway will enable 
more goods and people to travel by water where possible, striking a 
more equitable capacity balance between highway, rail and Marine 
Highway surface routes, making it more likely our country will realize 
the benefits sought by the Congress.

Discussion of Comments Received

    The Department of Transportation received 95 documents reflecting 
319 comments, including almost 60 corridor recommendations, to the 
interim final rule during the public comment period ending February 6, 
2009. The largest group of commenters was 32 port authorities, followed 
by 21 private interests representing various types of carriers, 14 
organizations representing maritime and environmental interests and 12 
State departments of transportation. The remaining comments came from 
Congressional representatives, individual private interests, and city/
county transportation and planning entities. The vast majority of 
comments were supportive of the Marine Highway Program.
    Generally speaking, comments received can be separated into five 
categories:
    The first category of comments consisted of more than 60 comments 
in general agreement with the rulemaking and did not propose any 
changes to the rule.
    The second category of comments contained nearly 40 suggestions 
that would require changes to the Energy Independence and Security Act 
of 2007, United States Code or other Federal Statutes and, therefore, 
could not be incorporated into the rule. Where appropriate, these 
comments are summarized in the section-by-section discussion.
    The third category of comments consisted of more than 100 corridor 
recommendations, endorsements of recommendations, or comments that 
addressed specific services, systems, proposals or geographic areas. Of 
these, 30 are related either to the definition of Marine Highway 
Corridors, or suggestions on how to interpret corridors as they are 
defined in the Interim Final Rule. Ten comments supported corridor 
recommendations made by other entities. Corridor recommendations are 
addressed in section 393.3 (Marine Highway Corridors) of this rule. 
Another ten comments in this grouping were deemed more appropriate to 
the development of potential future Marine Highway Project applications 
and are not addressed in this rule.
    The fourth category of about 40 comments consisted of remarks and 
suggestions that are either beyond the scope of the Marine Highway 
Program, or determined not appropriate incorporation for incorporation 
in the final rule. However, because these may be helpful to other 
programs, they have been provided to appropriate Federal entities and 
summarized in the applicable section-by-section discussion.
    Six comments in this category proposed that the Marine Highway 
Program be fully funded through upcoming Surface Transportation 
Reauthorization. One comment proposed that the Department of 
Transportation receive funding to execute the research component of the 
program in order to establish a nationwide approach to the challenges 
facing vessel and terminal design, construction, and other system 
needs. Another suggested that the Department of Transportation identify 
research funding to examine issues related to Marine Highway 
Implementation. Nine other comments proposed inclusion of Canadian 
Maritime Provinces and Mexico in the program. Other suggestions 
addressed worker compensation rights, maritime academies, and other 
activities beyond the scope of the Marine Highway Program. Numerous 
comments (40) proposed specific incentives or solutions to perceived 
impediments to expansion of the marine highways. Of these, the greatest 
number of comments (13) focused on the degree to which collection of 
Harbor Maintenance Tax acts as an impediment to the development of the 
Marine Highway Program and all proposed waiving the tax for domestic 
waterborne freight and passenger movements. This ad valorem tax is 
charged on cargoes imported to the U.S. and pays for channel dredging 
that allows access for deep draft ships to U.S. ports. However, in its 
current form, the same cargo is subjected to the tax a second time if 
it moves from the port of arrival to another U.S. destination by water. 
The tax is not charged if this second movement of the cargo is by 
landside modes.
    The final category of comments contained more than 75 suggestions 
that could be implemented at the discretion of the Secretary of 
Transportation. The Department of Transportation was open to all 
suggestions in this category and gave them careful consideration. These 
comments, along with the Department of Transportation's response, are 
captured in the section-by-section discussion that follows.

Section-by-Section Discussion

    This section discusses comments submitted on each section of the 
rule

[[Page 18097]]

along with an explanation of any changes that have been made from the 
Interim Rule to the Final Rule. All references to revisions or changes 
refer/pertain to language that was originally proposed in the Interim 
Final Rule, as amended.

Section 393.0

    The Department of Transportation received 28 comments specifically 
pertaining to the summary and environmental assessment portions of the 
program introduction. Six comments related to types of cargo covered by 
the Marine Highway Program and nine comments pertained to the inclusion 
of Mexico and Canada's Maritime Provinces. These comments will be 
addressed in section 393.2 (Definitions). While many comments asserted 
that expanding Marine Highway use will have positive impacts on the 
environment, five commenters made specific recommendations regarding 
this section. These comments are discussed below.
Environmental Considerations
    The Department of Transportation received comments from five 
respondents on this section regarding three general areas: National 
Environmental Policy Act compliance, the Endangered Species Act, and 
the Clean Air Act, which are addressed individually below:
    National Environmental Policy Act (NEPA): Commenters suggested that 
a programmatic environmental review be conducted for the America's 
Marine Highway Program prior to issuance of the final rule to comply 
with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 
4321 et seq.). The proposed rule for the America's Marine Highway 
Program is promulgating procedural rules for how Marine Highway 
Corridors will be designated, and the procedure for proposing Marine 
Highway Projects. These new regulations do not amount to a major 
Federal action requiring NEPA analysis because the regulations are 
procedural in nature and only set forth protocol for future actions 
that would be subject to NEPA. See Piedmont Environmental Council v. 
Federal Energy Regulatory Commission, 558 F.3d 304, 315-17 (4th Cir. 
2009). Designation of Marine Highway Corridors will only identify 
existing landside corridors that could, in the future, benefit from 
marine transportation. The location, scope and nature of any new or 
expanded services are not yet known. In addition, the extent of any 
Federal action, including funding (if any) is not yet known. Conducting 
an environmental review pursuant to NEPA will not provide a meaningful 
analysis until: (1) There is a concrete determination of what role the 
Federal government might play in encouraging such services, (2) the 
geographic footprint of the program is determined and; (3) potential 
Marine Highway projects are proposed. Without this information, a NEPA 
analysis would not present a credible forward look and would therefore 
not be a useful tool for basic program planning. Once project 
applications are received, an environmental review under NEPA will be 
conducted to assess the environmental effects of the proposed 
project(s). See Piedmont, 558 F.3d at 317 (4th Cir. 2009). The 
Environmental Considerations and other sections of the rule were 
revised to reflect this and to clarify the topic.

--Part of section 393.3(d) was separated into section 393.3(c) in order 
to more clearly note the procedural requirements for submitting 
requests for corridor designations and the actions which may be taken 
by the Department of Transportation after a corridor has been 
designated.
--Section 393.4(d) has been supplemented to include language that 
indicates the Department of Transportation will also evaluate projects 
or groups of projects along a corridor based on the results of an 
environmental review.
--Section 393.4(e)(3) has been supplemented to include language to 
provide greater guidance on the information necessary for the 
Department of Transportation to conduct the environmental review of the 
proposed project or groups of projects along a corridor.

    One commenter noted that the Maritime Administration is required to 
comply with its own Administrative Order 600-1 (Procedures for 
Considering Environmental Impacts). As required by the order, the 
Coordinator of Environmental Activities has been, and will continue to 
be consulted regarding the program to ensure appropriate and timely 
actions and compliance with the Agency order. Additionally, to ensure a 
continuing dialogue with environmental interests, the Department of 
Transportation is establishing a new advisory board under section 
393.5(e) to identify impediments and recommend solutions to increased 
use of the Marine Highway.
    These respondents also noted that, in evaluating the overall 
benefits or impacts on the public and the environment and other 
factors, all aspects should be considered, including shifts in routes 
and congestion, redistribution of land-based transportation and cargo 
handling infrastructure, and negative impacts of new or increased 
waterway use. The Department of Transportation agrees that there are a 
number of factors that will have to be considered and appreciates the 
respondents' suggestions. The Department intends to use the Marine 
Highway Project application and review process to identify the 
appropriate factors and collect relevant information for the assessment 
including whether or not some individual projects should be grouped 
(e.g., along a corridor) under a single NEPA analysis as appropriate.
    Endangered Species Act: Two respondents recommended that the 
Department of Transportation take actions, as appropriate under the 
Endangered Species Act (ESA), including commencement of the 
consultation process under section 7 of the ESA. Without specific 
project proposals, however, this action would be premature for this 
rulemaking.
    Clean Air Act: Two commenters noted that approval of individual 
Marine Highway Projects may involve specific actions under the Clean 
Air Act in cases where State Implementation Plans are required. The 
Department of Transportation notes the comment and continues to work 
closely with the EPA in development of this program.
    Green Shipping Design and Operation: Two commenters noted that 
there are a number of affirmative actions that the Department of 
Transportation can take to maximize the benefits and minimize any 
adverse impacts of Marine Highway services, both in the short and long 
term. The Department of Transportation agrees. The Department of 
Transportation has engaged government and academia to begin development 
of a program that recognizes the activities of Marine Highway service 
providers (both afloat and shoreside) that exceed current standards of 
responsibility in emissions reduction, energy conservation, ballast and 
discharge water management, endangered species protection, and other 
categories. Several elements of projects are also intended to address 
environmental responsibility, including potential relief for surface 
transportation congestion related environmental, energy or safety 
benefits (in the form of reduced vehicle miles traveled). In addition, 
language in Section 393.4(e) (Application for Designation as a Marine 
Highway Project) has been revised to both encourage participation in 
and provide documentation of participation

[[Page 18098]]

in environmental or other conservation programs.

Section 393.1 Purpose

    The Agency received only one comment regarding this section. The 
commenter suggested expanding the statement regarding the goals of 
Marine Highway Project Designations (Section 393.1(b)(2)) to go beyond 
designating Marine Highway Projects solely to ``mitigate landside 
congestion,'' arguing that the summary goes on to further identify the 
goal of providing ``greatest benefit to the public.'' While the Act 
specified the purpose of project designation, the Government 
Accountability Office (GAO), in a report on this topic entitled, 
``Freight Transportation: Short Sea Shipping Option Shows Importance of 
Systematic Approach to Public Investment Decisions (July 2005)'' (GAO-
05-768, July 2005), proposed that public involvement should be 
determined based on ``public benefits,'' with which the Department of 
Transportation concurs. This paragraph (and the Purpose statement in 
Section 393.4(b)) was revised to more clearly articulate these 
complementary objectives.

Section 393.2 Definitions

    The Agency received more than 30 comments that are best addressed 
in this section. Comments focused on the definition, scope or 
application of Marine Highway Corridors, proposed means of configuring 
or grouping corridors and water routes that have no corresponding 
landside transportation corridors, the inclusion of Mexico as well as 
expanded portions of Canada in the program, cargos to be included 
within the scope of the program, and entities eligible to be Project 
Sponsors.
    Marine Highway Corridor: The Department of Transportation received 
11 comments addressing the definition of a Marine Highway Corridor, or 
suggesting how corridors should be viewed. Comments included whether a 
port/terminal is included in a ``Marine Highway Corridor,'' and 
suggested that smaller ports and terminals, including niche ports that 
handle specific commodities and passengers should be included in 
corridors. After further consideration of these comments and the 
intended purpose of Marine Highway Corridors, the Department of 
Transportation amended the definition to be broader and more 
descriptive of the land route that Marine Highway expansion would 
benefit than the waterways, ports and terminals that actually provide 
the relief. This is more consistent with the Act's language that calls 
for the designation of short sea transportation routes as ``extensions 
of the surface transportation system,'' and its purpose to ``focus 
public and private efforts to use the waterways to relieve landside 
congestion along coastal corridors.''
    Several comments suggested delineation of routes by either National 
or Regional significance, and proposed that short distance, cross 
harbor or inter-terminal services can also provide significant relief. 
The Department of Transportation concurs that both short and long 
distance services could offer considerable benefit, and amended the 
definition of Marine Highway Corridors to include ``crossings'' and 
``connectors'' to address short-distance or regionally significant 
routes.
    Additionally, several comments were received that indicated either 
an assumption or a recommendation to include routes or services that do 
not have a landside alternative, and cannot therefore relieve landside 
congestion. These include routes and services to Hawaii, Guam and other 
territorial islands. Because these routes (and services) cannot meet 
the program's stated purpose of relieving landside congestion, the 
Department of Transportation believes the inclusion of these routes or 
associated services falls outside the scope of the Act, and cannot be 
part of the Marine Highway Program. This clarification has been 
incorporated in the definition of Marine Highway Corridor.
    Marine Highway (or Short Sea Transportation): The Department of 
Transportation received nine comments recommending the inclusion of 
Mexico and the Maritime Provinces of Canada in the definition of Marine 
Highway under this program. In crafting this definition, the Department 
of Transportation was mindful of the Act that authorized this program, 
which did not include Mexico, or these portions of Canada in its 
language. Therefore the international portion of the definition was not 
changed. However, it is worth noting that--outside the scope of this 
program--the Department of Transportation entered into a tri-lateral 
agreement in May 2006 with Canada and Mexico to seek opportunities to 
work together and expand short sea shipping services where practicable, 
and this initiative will continue to receive the Department of 
Transportation support outside of this program. Six comments were 
received proposing that eligible cargos be expanded to include bulk, 
break-bulk and heavy lift cargo. However, Section 55605 of the Energy 
Act defines short sea transportation as ``carriage by vessel of cargo 
that is contained in intermodal cargo containers and loaded by crane on 
the vessel or loaded on the vessel by means of wheeled technology'' 
(also reflected in ``Summary'' section of the Interim Final Rule). The 
Department of Transportation believes that the addition of bulk, break-
bulk or heavy lift cargos would go beyond the scope of the authorizing 
legislation. However, three comments suggested that car floats or rail 
ferries (vessels equipped with railroad track sections to accommodate 
wheeled rail cars) be included in the program and the Department of 
Transportation agrees this meets the scope of the Energy Act. The 
definition of Roll-on/Roll-off (RO/RO) vessel was expanded to include 
rail floats.
    Project Sponsor: Two comments proposed that private entities be 
eligible as project sponsors based on the assertion that not doing so 
adds a layer of difficulty that does not advance the purpose of the 
rule. The purpose of requiring that project sponsors be public sector 
entities is that the Department of Transportation believes that, should 
Federal funding later become available, it is not generally appropriate 
for the Federal government to select individual companies as the 
recipient of public funds. Rather, it is appropriate for the Federal 
government to identify those projects whose stated public benefits, 
offsetting savings to Federally-funded infrastructure, and likelihood 
to be sustainable in the long term, represent the best potential for 
return on public investment. It is up to the regional, State or local 
public sector project sponsor (including Tribal governments) to 
identify--through open competition--the private sector entity or 
entities most able perform the proposed service(s). In light of this 
approach, the final rule remains unchanged and reflects public sector 
sponsorship for both marine highway corridors and projects.
    Marine Highway Project: One comment suggested that projects should 
include services that facilitate transfer from international-to-
domestic maritime services. Others were unsure if transportation of 
passengers by water is eligible under the program. The Department of 
Transportation added language to include a definition of Marine Highway 
Projects under this section to better clarify the intent and 
eligibility criteria for projects.
    Where appropriate, language elsewhere in the rule was changed to be 
consistent with these definitions.

Section 393.3 Marine Highway Corridors

    The agency received more than 100 comments regarding Marine Highway 
Corridors. Of these, 59 were

[[Page 18099]]

recommendations for designation of specific corridors and several 
others endorsed a recommendation made by another entity. Other comments 
addressed the process of corridor designation, noted the benefits of 
designating corridors, and proposed options that could provide 
regional, local and border crossing benefits.
    Generally speaking, respondents supported designation of Marine 
Highway Corridors, although one commenter indicated corridors may 
become a ponderous process with limited benefit. Conversely, another 
respondent believes it is a valuable way to enlarge the circle of 
support and engagement and facilitates cooperative arrangements. One 
commenter expressed concern that both Corridor recommendations and 
Project applications could require onerous and costly research for 
entities ill equipped to do so.
    Ten comments cited the public benefits of marine highways, 
including reduced emissions per ton-mile of commercial carriage on the 
water in contrast to truck or rail. Another ten comments focused on the 
various consortiums that are, or should be, engaged in the development 
of marine highways, citing the need for public involvement at the 
local/State and Federal levels as well as from Tribal governments for 
private service providers (i.e., carriers), or public-private 
partnerships. No changes to the rule were necessary in response to 
these comments, as public benefit and the development of stakeholder 
coalitions are already key elements of the program.
    Numerous comments endorsed the concept of corridor designation and 
incorporation of DOT's Corridors of the Future and proposed that 
corridors include ports (both large and small), or ``marine exits,'' 
harbor crossings and sub-corridors. The Department of Transportation 
recognizes that major arteries alone, such as the ``Corridors of the 
Future'' and others, might not fully encompass these concepts and added 
the terms ``connectors'' and ``crossings'' to Section 393.2 
(Definitions). Connectors will provide substantial linkages to the 
larger corridors and crossings will be defined as short-distance routes 
that provide relief to congested border crossings, bridges or tunnels 
or offer a much shorter route than the landside alternative. Section 
393.3 was revised to clarify how Marine Highway Corridors will be 
described and defined and the roles connectors and crossings will play 
in conjunction with the larger Marine Highway Corridors.
    Fifty-nine Marine Highway Corridor recommendations were received in 
response to the Interim Final Rule. The Department of Transportation is 
working closely with potential Corridor sponsors to combine 
complimentary and interconnecting corridor proposals and develop 
recommended Marine Highway connectors and crossings that offer shorter, 
but potentially significant, water-bridges and linkages that can 
relieve significant bottlenecks at the local and regional level. 
Corridors, connectors and crossings that receive designation by the 
Secretary will be published on the Maritime Administration's Marine 
Highway Web site (http://www.marad.dot.gov/ships_shipping_landing_page/mhi_home/mhi_home.htm).

Section 393.4 Marine Highway Projects

    While several comments received were specific to a single project, 
marine highway service or geographic area, more than 30 comments 
related to the content, designation process, or evaluation criteria for 
Marine Highway Projects. These comments are addressed in this section.
    Three commenters noted the complexity of coordinating multiple 
agencies and entities when projects involve origins and destinations 
separated by relatively long distances and involving numerous 
jurisdictions. The Department of Transportation acknowledges this 
challenge and believes that the proposed approach of designating 
project sponsors and developing coalitions is an appropriate way to 
address multi-jurisdictional coordination.
    Four comments recommended that the Department of Transportation 
recognize the benefits of dual-use vessels in Marine Highway Projects. 
This capability would allow vessels in commercial service to be 
available to the Department of Defense (DOD) should the need arise. 
While the Departments of Transportation and Defense recognize the 
considerable potential for this concept to provide sealift capacity, 
and are working together toward a dual-use capability with the limited 
funding that the Department of Defense has available for the 
incorporation of National Defense Features, policy and protocols are 
not yet in place to develop a dual-use capability. No changes to the 
rule are currently warranted, however, future development of the 
America's Marine Highway Program will incorporate dual-use programs 
when feasible.
    Several comments pertained to Marine Highway Project Applications 
and the criteria by which they will be evaluated. Five commenters 
recommended that the Department of Transportation recognize the public 
benefits that new or expanded services offer in terms of transportation 
system resiliency and redundancy, especially following natural or man-
made events that can cripple landside corridors. The Department of 
Transportation has modified both the information required in the 
application (Section 393.4(e)) and the evaluation criteria to reflect 
this public benefit. Another comment pointed out the additional public 
benefit that shifting oversize and overweight containerized or 
trailerized cargo from roadways can offer because these cargos cause a 
disproportionate amount of damage to road surfaces, bridges and 
tunnels. Language was added to Section 393.4(e)(1)(D) and the 
evaluation criteria to address this benefit.
    One commenter asserted that project designation should be based 
primarily on the ability to demonstrate a clear path to profitability. 
While the Department of Transportation agrees that the ability of a 
project to ultimately become self supporting is an important criterion, 
a path to profitability alone does not establish a rationale for 
governmental involvement in the project, which should instead be based 
on the potential to produce public benefits. This is also consistent 
with a public investment approach proposed by the Government 
Accountability Office report, entitled, ``Freight Transportation: Short 
Sea Shipping Option Shows Importance of Systematic Approach to Public 
Investment Decisions (July 2005)'' (GAO-05-768, July 2005). However, to 
better clarify this methodology, both the information required in 
project applications and the weight-based criteria were reorganized in 
the final rule. Additionally, in recognition that confidential business 
information may be required to adequately describe the finance plan, a 
section was added to protect confidential business information.
    Two commenters believe that the Marine Highway Program needs strong 
support throughout DOT's leadership and inquired about the process and 
means by which Marine Highway Project applications will be evaluated, 
designated and supported by the Federal government. An inter-agency 
review team, consisting of both the Department of Transportation and 
non-Department of Transportation representation will be established for 
this purpose. Section 393.4(e)(6) titled ``Evaluation Process'' was 
inserted into the final rule to address this.
    Nine comments were received that recommended the Department of

[[Page 18100]]

Transportation establish standard measures to quantify benefits of 
proposed Marine Highway Projects. Suggestions included specifying the 
use of ``ton-miles'' and including a formula to convert to/from twenty-
foot equivalent unit (TEU) and forty-foot equivalent unit (FEU) using 
standard weights. Commenters recommended including standards for diesel 
emissions, fuel savings, and standards to quantify savings in highway 
maintenance and bridge maintenance, as well as safety benefits on a 
per-mile basis. The Department of Transportation believes that 
development and use of uniform measures, to the extent practicable, 
would benefit applicants, improve objective review of applications and 
set the stage for consistent performance measures for projects that 
receive designation by the Secretary. The Department of Transportation 
concurs that standards of measure and some basic baseline measures 
would be beneficial, but applicants should be encouraged to use more 
accurate or localized data and measures, when available. Section 
393.4(e)(3) was added in the final rule, addressing this issue, but the 
actual standards and measures will be posted on the Maritime 
Administration's Web site to enable refinement and updating over time.
    One commenter noted that, after initial designation, a corridor 
could expand beyond the original scope in the designation. While the 
Department of Transportation intends that the Marine Highway Corridors 
be broadly defined and inclusive of all related ports, both large and 
small, it is recognized that specific projects could (and hopefully 
will) find expansion opportunities after designation by the Secretary 
of Transportation. To address this possibility, Section 393.4(e)(5) was 
amended to establish a process by which this can be achieved.

Section 393.5 Incentives, Impediments and Solutions

    A total of 60 comments were received that either recommended 
incentives, or identified and recommended solutions for impediments to 
increased use of America's Marine Highway. Many of these comments could 
be interpreted as proposing an incentive or addressing specific 
impediments. Commenters proposed incentives including tax credits, 
reduced emissions incentives, accelerated depreciation and other 
mechanisms for shippers, service providers, shipyards and other 
stakeholders. Other comments recommended subsidies to reduce start-up 
risk, use of Congestion Mitigation and Air Quality (CMAQ) funding, and 
other vehicles to stimulate new services and vessel construction. While 
no changes to the rule were warranted by these comments, the Department 
of Transportation appreciates the thoughtful suggestions and will take 
them into consideration in meeting the Energy Act's requirement to 
develop and propose short-term incentives that would encourage the use 
of the Marine Highway.
    Comments that identified or recommended solutions to impediments to 
increased use of the Marine Highway had several areas of focus. The 
greatest number of comments (13) identified the Harbor Maintenance Tax 
(HMT) as an impediment and recommended waiving HMT for domestic 
waterborne shipments. One commenter noted that with 18 Federal 
departments and agencies playing a role in marine transportation policy 
and operations, the lack of a comprehensive regulatory structure in 
general represents an impediment to marine highway growth. The 24-hour 
advance notice requirement for U.S.-Canada services was also identified 
as an impediment, as the duration of most of these voyages is well 
under 24 hours. Other comments proposed funding mechanisms for 
infrastructure, weight handling equipment and port-connectors, 
increased dredging in the Great Lakes, short-term or temporary 
modifications to the Jones Act, streamlining or modification of the 
Title XI loan guarantee program, and changes to worker compensation 
policy, among other items. No statutory authority currently exists to 
implement these recommendations. Therefore, no changes to the rule were 
warranted by these comments, however, the Department of Transportation 
appreciates this input and will provide these comments to the advisory 
board that the Energy Act calls for to examine these issues.
    One commenter indicated that the program needs to be incorporated 
into the policies and programs of several Federal departments to 
address various impediments to marine highway expansion. The Department 
of Transportation intends to include several key governmental agencies 
on the advisory board to address these issues, but no change to the 
rule is needed to achieve this outcome.

Section 393.6 Research on Marine Highway Transportation

    The Department received one comment specific to section 393.6. The 
commenter recommended that the Department of Transportation direct 
funding for the Maritime Administration to sponsor Marine Highway 
Research and Development centers that would be provided through Surface 
Transportation Reauthorization, and be primarily aimed at vessel design 
(including dual-use DOD/commercial capabilities) and interfacing port/
terminal design with emerging vessel characteristics. This comment is 
beyond the scope of the rulemaking and does not impact the final rule.

Program Description

    In this rulemaking, the Department of Transportation adopts as 
final, with some minor and clarifying changes, the America's Marine 
Highway Program established by the October 9, 2008, Interim Final Rule. 
This rulemaking also sets forth more specific procedures for 
recommendations for designation of Marine Highway Corridors, and 
separate procedures for applications for Marine Highway Projects.

Rulemaking Analyses and Notices

Executive Order 12866 and Department of Transportation Regulatory 
Policies and Procedures

    This rulemaking is not significant under section 3(f) of Executive 
Order 12866, and as a consequence, the Office of Management and Budget 
(OMB) did not review the rule. This rulemaking is also not significant 
under the Regulatory Policies and Procedures of the Department (44 FR 
11034; February 26, 1979). It is also not considered a major rule for 
purposes of Congressional review under Public Law 104-121. Designation 
of Marine Highway Corridors and Marine Highway Projects does not have 
an immediate economic impact. Following designation, individual 
Corridor and Project components that may have an economic impact will 
be determined as they are identified.

Executive Order 13132

    We analyzed this rulemaking in accordance with the principles and 
criteria contained in Executive Order 13132 (``Federalism'') and have 
determined that it does not have sufficient federalism implications to 
warrant the preparation of a federalism summary impact statement. The 
regulations herein have no substantial effects on the States, the 
current Federal-State relationship, or the current distribution of 
power and responsibilities among local officials. No State, local 
government or Tribal government raised concerns about federalism in 
comments regarding the interim final rule. Therefore, we did not 
consult with State and local officials on

[[Page 18101]]

this procedural rule. However, we will act as partners with States and 
local officials in transportation planning and supporting individual 
projects under this program.

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires us to assess the impact 
that regulations will have on small entities. After analysis of this 
final rule, the Department of Transportation certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities, because this rule merely sets forth procedures.

Environmental Impact Analysis

    We have analyzed this final rule for purposes of compliance with 
the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et 
seq.) and we have concluded that designation of Marine Highway 
Corridors does not have an immediate environmental impact. Designation 
of Marine Highway Corridors will only identify existing landside 
corridors that could, in the future, accommodate and benefit from 
expanded marine transportation. The location, scope and nature of any 
new or expanded services is not yet known. The promulgation of these 
procedural rules does not therefore significantly affect the 
environment. In addition, the extent of any Federal action, including 
funding (if any) is not yet known. NEPA analysis will be conducted 
when: (1) There is a concrete determination of what role the Federal 
government might play in encouraging such services, (2) the geographic 
footprint of the program is determined and; (3) potential Marine 
Highway projects are proposed. Until this information is available, a 
NEPA analysis would not present a credible forward look and would 
therefore not be a useful tool for basic program planning. NEPA 
analysis will be commenced as soon as sufficient information is 
available.

Paperwork Reduction Act

    This regulation establishes new requirements for designation of a 
Marine Highway Project and republishes the requirements in MARAD-2008-
0096 for designation of a Marine Highway Corridor. Persons seeking 
designation of a Corridor or Project (if within a designated Marine 
Highway Corridor) under America's Marine Highway Program are required 
to submit a written application via U.S. Mail or electronically via 
http://www.regulations.gov (MARAD-2010-0022). Measurements and 
standards (criteria) for designation of a Marine Highway Project will 
be published on the Maritime Administration's Web site (http://www.marad.dot.gov/ships_shipping_landing_page/mhi_home/mhp_trans_planning/mhp_trans_planning.htm). The format will also be provided.
    The information collected will be used to review recommendations 
for designation as a Marine Highway Corridor or Project and evaluate 
applications for designation as ``America's Marine Highway Corridor'' 
or ``America's Marine Highway Project.'' (The Department of 
Transportation will keep business information confidential if marked 
accordingly.) Designated projects will also be published on the 
Maritime Administration's Web site (http://www.marad.dot.gov/ships_shipping_landing_page/mhi_home/mhp_project_recommendations/mhp_project_recommendations.htm).
    The Office of Management and Budget (OMB) will be requested to 
review and approve the information collection requirements under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Sec. 3501, et seq.).

Unfunded Mandates Reform Act

    This rulemaking does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$141.3 million or more to either State, local, or Tribal governments, 
in the aggregate, or to the private sector, and is the least burdensome 
alternative that achieves this objective of U.S. policy. Department 
guidance requires the use of a revised threshold figure of $141.3 
million, which is the value of $100 million in 1995 after adjusting for 
inflation.

Consultation and Coordination With Indian Tribal Governments

    Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments, dated November 6, 2000, seeks to establish regular 
and meaningful consultation and collaboration with Tribal officials in 
the development of Federal policies that have Tribal implications, to 
strengthen the United States government-to-government relationships 
with Indian Tribal Governments, and to reduce the imposition of 
unfunded mandates upon Indian Tribes. At this time we believe that 
designation of Marine Highway Corridors and Marine Highway Projects 
does not have an impact on Indian Tribal Governments. Following 
designation, individual Corridor and Project components that may have 
an impact on Indian Tribes will be determined as they are identified. 
The Department of Transportation will consult with those Indian Tribal 
Governments that may be affected by these designations on factors 
pertaining to program implementation.

Regulation Identifier Number (RIN)

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

Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
http://www.regulations.gov.

List of Subjects in 46 CFR Part 393

    Marine Highway, Short sea transportation, Vessels.

0
Accordingly, the Department of Transportation amends 46 CFR Chapter II 
by revising part 393 to read as follows:

PART 393--AMERICA'S MARINE HIGHWAY PROGRAM

Sec.
393.1 Purpose.
393.2 Definitions.
393.3 Marine Highway Corridors.
393.4 Marine Highway Projects.
393.5 Incentives, Impediments and Solutions.
393.6 Research on Marine Highway Transportation.

    Authority: Energy Independence and Security Act of 2007, 
Sections 1121, 1122, and 1123 of Public Law 110-140, enacted into 
law on December 19, 2007 (121 Stat. 1492).


Sec.  393.1  Purpose.

    (a) This part prescribes final regulations establishing a short sea 
transportation program as set forth in Sections 1121, 1122, and 1123 of 
the Energy Independence and Security Act of 2007, enacted into law on 
December 19, 2007.
    (b) The purpose of America's Marine Highway Program is described in 
Section 1121. Section 1121 states that ``[t]he Secretary shall 
designate short sea transportation routes as extensions of

[[Page 18102]]

the surface transportation system to focus public and private efforts 
to use the waterways to relieve landside congestion along coastal 
corridors.'' America's Marine Highway Program consists of four primary 
components:
    (1) Marine Highway Corridor Designations. This regulation 
establishes the goals and methods by which specific Marine Highway 
Corridors (including Connectors and Crossings) will be identified and 
designated by the Secretary of Transportation. The purpose of 
designating Marine Highway Corridors is to integrate America's Marine 
Highway into the surface transportation system. The Marine Highway 
Corridors will serve as extensions of the surface transportation 
system. They are commercial coastal, inland, and intracoastal waters of 
the United States, described in terms of the specific landside 
transportation routes (road or rail line) that they supplement. They 
support the movement of passengers and cargo along these specified 
routes and mitigate the effects of landside congestion, such as 
increased emissions and energy inefficiencies. In addition to 
corridors, the Secretary may designate Marine Highway ``Connectors'' 
and ``Crossings'' as described in paragraphs (h)(1) and (h)(2) of Sec.  
393.2. Through America's Marine Highway Program, the Department will 
encourage the development of multi-jurisdictional coalitions and focus 
public and private efforts and investment on shifting freight and 
passengers from at- or near capacity landside routes to more 
effectively utilize Marine Highway Corridors.
    (2) Marine Highway Project Designations. This regulation 
establishes the goals and methods by which specific Marine Highway 
Projects will be identified and designated by the Secretary of 
Transportation. The purpose is to designate projects that, if 
successfully implemented, expanded, or otherwise enhanced, would reduce 
external costs and provide the greatest benefit to the public. Closely 
linked to congestion relief, public benefits can include, but are not 
limited to, reduced emissions, including greenhouse gases, reduced 
energy consumption, reduced costs associated with landside 
transportation infrastructure maintenance savings, improved safety and 
transportation system resiliency and redundancy. Additional 
consideration will be given to Marine Highway Projects that represent 
the most cost-effective option among other modal improvements. 
Designated Marine Highway Projects may receive direct support from the 
Department as described in this section.
    (3) Incentives, Impediments and Solutions. This section outlines 
how the Department, in partnership with public and private entities, 
will identify potential incentives, seek solutions to impediments to 
encourage utilization of America's Marine Highway and incorporate it, 
including ferries, in State, regional, local, and Tribal government 
transportation planning.
    (4) Research. This section describes the research that the 
Department, working with the Environmental Protection Agency, will 
conduct to support America's Marine Highway, within the limitations of 
available resources, and to encourage multi-State planning. Research 
would include environmental and transportation impacts (benefits and 
costs), technology, vessel design, and solutions to impediments to the 
Marine Highway.
    (c) In addition, vessels engaged in Marine Highway operations may 
apply for Capital Construction Fund (CCF) benefits. This program was 
created to assist owners and operators of U.S.-flag vessels in 
accumulating the capital necessary for the modernization and expansion 
of the U.S. merchant marine by encouraging construction, 
reconstruction, or acquisition of vessels through the deferment of 
Federal income taxes on certain deposits of money placed into a CCF.


Sec.  393.2  Definitions.

    For the purposes of this part:
    (a) Administrator. The Maritime Administrator, Maritime 
Administration, U.S. DOT, who has been authorized by the Secretary of 
Transportation to administer America's Marine Highway Program.
    (b) Applicant. An entity that applies for designation of a Marine 
Highway Corridor or Project under this regulation.
    (c) Coastwise Shipping Laws. Laws, including the Jones Act, as set 
forth in Chapter 551 of Title 46, United States Code.
    (d) Corridor Sponsor. An entity that recommends a Corridor 
(including a Connector or Crossing, as described below) for designation 
as a Marine Highway Corridor. Corridor sponsors must be public 
entities, including but not limited to, Metropolitan Planning 
Organizations, State governments (including Departments of 
Transportation), port authorities and Tribal governments, who may 
submit recommendations for designation as a Marine Highway Corridor.
    (e) Department. The U.S. Department of Transportation (DOT).
    (f) Domestic Trade. Trade between points in the United States.
    (g) Lift-on/Lift-off (LO/LO) Vessel. A vessel of which the loading 
and discharging operations are carried out by cranes and derricks.
    (h) Marine Highway Corridor. A water transportation route that 
serves as an extension of the surface transportation system that can 
help mitigate congestion-related impacts along a specified land 
transportation route. It is identified and described in terms of the 
land transportation route that it supplements, and must, by 
transporting freight or passengers, provide measurable benefits to the 
surface transportation route in the form of traffic reductions, reduced 
emissions, energy savings, improved safety, system resiliency, and/or 
reduced infrastructure costs. Routes that cannot relieve landside 
congestion (i.e.; those to/from islands) are not eligible for 
designation under this program. In addition to ``Corridors,'' 
prospective sponsors can recommend Marine Highway ``Connectors'' and 
``Crossings'' for designation as described in paragraphs (h)(1) and 
(h)(2) of this section:
    (1) Marine Highway Connectors are routes that will provide 
substantial linkages to or between the larger corridors, and serve, in 
conjunction with a corridor, to move freight and/or passengers into, 
out of or within a region.
    (2) Marine Highway Crossings are routes that provide relief to 
congested border crossings, bridges, and tunnels or offer a shorter 
route than the landside alternative. Although they may not parallel a 
corridor or connector, crossings may provide relief to a corridor or 
connector, or to local or regional passenger and freight transportation 
systems. Crossings may include cross-harbor and inter-terminal 
passenger and/or freight services.
    (i) Marine Highway Project. A new Marine Highway service, or 
expansion of an existing service, that receives support from the 
Department and provides public benefit by transporting passengers and/
or freight (container or wheeled) in support of all or a portion of a 
Marine Highway Corridor, Connector or Crossing. Projects are proposed 
by a project sponsor and designated by the Secretary under this 
program.
    (j) Marine Highway (or Short Sea Transportation): The carriage by 
vessel of passengers and/or cargo (intermodal containers, trailers, car 
floats, rail ferries and other cargoes loaded by wheeled technology) 
that is loaded at a port in the United States and unloaded either at 
another port in the United States, or that

[[Page 18103]]

is loaded at a port in the United States and unloaded at a port in 
Canada located in the Great Lakes-Saint Lawrence Seaway System, or 
loaded at a port in Canada located in the Great Lakes-Saint Lawrence 
Seaway System and unloaded at a port in the United States. For the 
purposes of this specific program, routes and services that do not 
offer potential relief to a landside transportation route (i.e.; to/
from islands) do not fall within this definition.
    (k) Project sponsor. Project sponsors must be public entities, 
including but not limited to, Metropolitan Planning Organizations, 
State governments (including State Departments of Transportation), port 
authorities and Tribal governments, who may submit applications for 
designation as a Marine Highway Project.
    (l) Roll-on/Roll-off (RO/RO) Vessel. Any vessel that has ramps 
allowing cargo to be loaded and discharged by means of wheeled vehicles 
so that cranes are not required. This includes, but is not limited to 
trailers, car floats and ferries, including rail ferries.
    (m) Secretary. The Secretary of Transportation.
    (n) United States Documented Vessel. A vessel documented under 46 
U.S.C. Chapter 121.


Sec.  393.3  Marine Highway Corridors.

    (a) Summary. The purpose of this section is to designate specific 
routes as Marine Highway Corridors (including Connectors and 
Crossings). Corridors will be designated by the Secretary. The goal of 
this designation process is to accelerate the development of multi-
State and multi-jurisdictional Marine Highway Corridors to relieve 
landside congestion. Designation will encourage public/private 
partnerships, and help focus investment on those Marine Highway 
Corridors that offer the maximum potential public benefit in 
congestion-related emissions reduction, energy efficiency, safety and 
other areas. Corridors already designated as ``Corridors of the 
Future'' under DOT's National Strategy to Reduce Congestion that have 
commercial waterways that parallel or can otherwise benefit them will 
be fast-tracked for designation as Marine Highway Corridors.
    (b) Objectives. The primary objectives of the designation of Marine 
Highway Corridors are to:
    (1) Establish Marine Highway Corridors as ``extensions of the 
surface transportation system'' as provided by Section 1121 of the 
Energy Independence and Security Act of 2007.
    (2) Develop multi-jurisdictional coalitions that focus public and 
private efforts to use the waterways to relieve congestion-related 
impacts along land transportation routes for freight and passengers.
    (3) Obtain public benefit by shifting freight and passengers in 
measurable terms from land transportation routes to Marine Highway 
Corridors. In addition, public benefits can include, but are not 
limited to, reduced emissions, including greenhouse gases, reduced 
energy consumption, landside infrastructure maintenance savings, 
improved safety, and added system resiliency. Additional consideration 
will be given to Marine Highway Projects that represent the most cost-
effective option among other modal improvements and projects that 
reduce border delays.
    (4) Identify potential savings that could be realized by providing 
an alternative to land transportation infrastructure construction and 
maintenance.
    (c) Designation of Marine Highway Corridors. The Department will 
continue to accept Marine Highway Corridor recommendations from 
prospective Corridor sponsors. Corridor sponsors must be public 
entities, including but not limited to, Metropolitan Planning 
Organizations, State governments (including State Departments of 
Transportation), port authorities and Tribal governments. In addition 
to ``Corridors,'' prospective sponsors may recommend Marine Highway 
``Connectors'' and ``Crossings'' for designation by the Secretary (see 
definitions). The Secretary will make Marine Highway Corridor 
designations. In certain cases the Secretary of Transportation may 
designate a Marine Highway Corridor, Connector or Crossing without 
receipt of a recommendation. The Department will publish all Marine 
Highway Corridors that receive designation by the Secretary on the 
Maritime Administration's Web site. Interested parties are encouraged 
to visit http://www.marad.dot.gov/ships_shipping_landing_page/mhi_home/mhi_home.htm for the current list of Designated Corridors. When 
responding to specific solicitations for Marine Highway Corridors, 
Connectors and Crossings by the Secretary of Transportation, the 
sponsors should provide the following information in the 
recommendation:
    (1) Physical Description of Proposed Marine Highway Corridor. 
Describe the proposed Marine Highway Corridor (including Connector or 
Crossing), and its connection to existing or planned transportation 
infrastructure and intermodal facilities. Include key navigational 
factors such as available draft, channel width, bridge or lock 
clearance and identify if they could limit service.
    (2) Surface Transportation Corridor Served. Provide a summary of 
the land transportation route that the Marine Highway would benefit. 
Include a description of the route, its primary users, the nature, 
locations and occurrence of travel delays, urban areas affected, and 
other geographic or jurisdictional issues that impact its overall 
operation and performance.
    (3) Involved Parties. Provide the organizational structure of the 
parties recommending the Corridor designation including business 
affiliations, and private sector stakeholders. Multi-jurisdictional 
coalitions may include State Departments of Transportation, 
Metropolitan Planning Organizations, municipalities and other 
governmental entities (including Tribal) that have been engaged. 
Include the extent to which they support the corridor designation. 
Provide any affiliations with environmental groups or civic 
associations.
    (4) Passengers and Freight. Identify the number of likely 
passengers and/or quantity of freight that are candidates for shifting 
to water transportation on the proposed Marine Highway Corridor. If 
known, include specific shippers, manufacturers, distributors or other 
entities that could benefit from a Marine Highway alternative, and the 
extent to which these entities have been engaged.
    (5) Congestion Reduction. Describe the extent to which the proposed 
Corridor could relieve landside congestion in measurable terms. Include 
any known offsetting land transportation infrastructure savings (either 
construction or maintenance) that would result from the project.
    (6) Public benefits. Provide, if known, the savings over status quo 
in emissions, including greenhouse gases, energy consumption, landside 
infrastructure maintenance costs, safety and system resiliency. Specify 
if the Marine Highway Corridor represents the most cost-effective 
option among other modal improvements. Include consideration of the 
implications future growth may have on the proposal.
    (7) Impediments. Describe known or anticipated obstacles to 
shifting capacity to the proposed Marine Highway Corridor. Include any 
strategies, either in place or proposed, to deal with the impediments.
    (d) Scope of Department Support. Marine Highway Corridors, 
Connectors and Crossings that receive designation will be posted on a 
Web site maintained by the Maritime Administration. The Department of 
Transportation will coordinate with Corridor sponsors to

[[Page 18104]]

identify the most appropriate actions to support the Corridors. Support 
could include any of the following, as appropriate and within agency 
resources:
    (1) Promote the Corridor with appropriate governmental, State, 
local and Tribal government transportation planners, private sector 
entities or other decision-makers.
    (2) Coordinate with ports, State Departments of Transportation, 
Metropolitan Planning Organizations, localities, other public agencies 
(including Tribal governments) and the private sector to support the 
designated corridor. Efforts can be aimed at obtaining access to land 
or terminals, developing landside facilities and infrastructure, and 
working with Federal, regional, State, local, and Tribal governmental 
entities to remove barriers to self-supporting operations.
    (3) Pursue memorandums of agreement with other Federal entities to 
transport Federally owned or generated cargo using waterborne 
transportation along the Marine Highway Corridor, when practical or 
available.
    (4) Assist with collection and dissemination of data for the 
designation and delineation of Marine Highway Corridors as available 
resources permit.
    (5) Work with Federal entities and regional, State, local and 
Tribal governments to include designated Corridors in transportation 
planning.
    (6) Bring specific impediments to the attention of the advisory 
board chartered to address such barriers.
    (7) Conduct research on issues specific to designated Corridors as 
available resources permit.
    (8) Utilize current or future Federal funding mechanisms, as 
appropriate, to support the Corridor.
    (9) Communicate with designated Corridor coalitions to provide 
ongoing support and identify lessons learned and best practices for the 
overall Marine Highway program.


Sec.  393.4  Marine Highway Projects.

    (a) Summary. The purpose of this section is to designate projects 
that, if successfully implemented, expanded, or otherwise enhanced, 
would reduce external costs and provide the greatest benefit to the 
public. In addition to congestion relief, public benefits can include, 
but are not limited to, reduced emissions, including greenhouse gases, 
reduced energy consumption, landside infrastructure maintenance 
savings, and improved safety. The Department will give additional 
consideration to Marine Highway Projects that represent the most cost-
effective option among other modal improvements or reduce border 
crossing delays. Some Marine Highway Projects can also provide public 
benefit by offering routes that are more resilient to natural or human 
incidents that interrupt surface transportation, or provide additional, 
redundant surface transportation options. Designation can help focus 
public and private investment on pre-identified projects that offer the 
maximum potential public benefit. Designated Marine Highway Projects 
may receive support from the Department as described in this section.
    (b) Objectives. The primary objectives of the designation of Marine 
Highway Projects are to:
    (1) Reduce landside congestion-related impacts.
    (2) Identify proposed water transportation services that represent 
the greatest public benefit as measured in reduced emissions, including 
greenhouse gases, reduced energy consumption, landside infrastructure 
maintenance savings and improved safety.
    (3) Identify potential savings with water transportation projects 
that represent the most cost-effective option among other modal 
improvements or reduce border crossing delays.
    (4) Improve surface transportation system resiliency and provide 
additional options.
    (5) Focus resources on those projects that offer the greatest 
likelihood of successful operation.
    (6) Develop best practices for the Marine Highway Program.
    (7) Provide specific examples, with performance measures and 
quantifiable outcomes, of successful Marine Highway Projects for 
demonstration of the benefits of water transportation.
    (c) Designation of Marine Highway Projects. The Department will 
solicit applications for designation as specific Marine Highway 
Projects. Applications will be accepted from a Project sponsor. Project 
sponsors must be public entities, including but not limited to, 
Metropolitan Planning Organizations, State governments (including State 
Departments of Transportation), port authorities and Tribal 
governments. Project sponsors are encouraged to develop coalitions and 
public/private partnerships with the common objective of developing the 
specific Marine Highway Project. Potential partners can include vessel 
owners and operators, third party logistics providers, trucking 
companies, shippers, railroads, port authorities, State, regional, 
local and Tribal government transportation planners, environmental 
interests or any combination of entities working in collaboration under 
a single application. Candidate Projects can start a new operation or 
be an existing Marine Highway operation where expansion or improvements 
present maximum public benefit. Applications must meet the requirements 
of coastwise shipping laws and all applicable Federal, State and local 
laws.
    (d) Action by the Department of Transportation. The Department will 
evaluate and select Projects based on an analysis and technical review 
of the information provided by the applicant. The Department will also 
evaluate projects based on the results of an environmental analysis. 
Projects that support a designated Marine Highway Corridor (or 
Connector or Crossing), receive a favorable technical review, and meet 
other criteria as defined in 46 CFR 393.4(e), may be nominated by the 
Maritime Administrator for selection by the Secretary. Upon designation 
as a Marine Highway Project, the Department will coordinate with the 
Project sponsor to identify the most appropriate Departmental actions 
to support the project. Department support could include any of the 
following, as appropriate and within agency resources:
    (1) Promote the service with appropriate governmental, regional, 
State, local or Tribal government transportation planners, private 
sector entities or other decision makers.
    (2) Coordinate with ports, State Departments of Transportation, 
Metropolitan Planning Organizations, localities, other public agencies 
and the private sector to support the designated service. Efforts can 
be aimed at identifying resources, obtaining access to land or 
terminals, developing landside facilities and infrastructure, and 
working with Federal, regional, State, local or Tribal governmental 
entities to remove barriers to success.
    (3) Pursue memorandums of agreement with other Federal entities to 
transport Federally owned or generated cargo using the services of the 
designated project, when practical or available.
    (4) In cases where transportation infrastructure is needed, Project 
sponsors may request to be included on the Secretary of 
Transportation's list of high-priority transportation infrastructure 
projects under Executive Order 13274, ``Environmental Stewardship and 
Transportation Infrastructure Project Review.'' For these projects, 
Executive Order 13274 provides that Federal agencies shall, to the 
maximum extent practicable, expedite their reviews for relevant permits 
or other approvals and take related actions as necessary, consistent

[[Page 18105]]

with available resources and applicable laws.
    (5) Assist with developing individual performance measures for 
Marine Highway Projects.
    (6) Work with Federal entities and regional, State, local and 
Tribal governments to include designated Projects in transportation 
planning.
    (7) Bring specific impediments to the attention of the advisory 
board chartered to address these barriers.
    (8) Conduct research on issues specific to Marine Highway Projects.
    (9) Utilize current or future Federal funding mechanisms, as 
appropriate, to support the Projects.
    (10) Maintain liaison with sponsors and representatives of 
designated Projects to provide ongoing support and identify lessons 
learned and best practices for other projects and the overall Marine 
Highway program.
    (e) Application for Designation as a Marine Highway Project. This 
section specifies the criteria that the Department will use to evaluate 
Marine Highway Project applications. Applicants should provide the 
following:
    (1) Applications for Proposed Projects. When responding to specific 
solicitations for Marine Highway Projects by the Department, describe 
the overall operation of the proposed project, including which ports 
and terminals will be served, number and type of vessels, size, 
quantity and type of cargo and/or passengers, routes, frequency, and 
other relevant information. Applicants should also include the 
following information in their project applications:
    (i) Marine Highway Corridor(s). Identify which, if known, 
designated Marine Highway Corridors, Connectors or Crossings will be 
utilized.
    (ii) Organization. Provide the organizational structure of the 
proposed project, including business affiliations, environmental, non-
profit organizations and governmental or private sector stakeholders.
    (iii) Partnerships.
    (A) Private Sector participation. Identify private sector partners 
and describe their levels of commitment. Private sector partners can 
include terminals, vessel operators, shipyards, shippers, trucking 
companies, railroads, third party logistics providers, shipping lines, 
labor, workforce and other entities deemed appropriate by the 
Secretary.
    (B) Public Sector partners: Identify State Departments of 
Transportation, Metropolitan Planning Organizations, municipalities and 
other governmental entities (including Tribal) that have been engaged 
and the extent to which they support the service. Include any 
affiliations with environmental groups or civic associations.
    (C) Documentation. Provide documents affirming commitment or 
support from entities involved in the project.
    (iv) External cost savings and public benefit.
    (A) Potential relief to surface transportation travel delays. 
Describe the extent to which the proposed project will relieve landside 
congestion in measurable terms now and in the future, such as 
reductions in vehicle miles traveled. Include the landside routes that 
stand to benefit from the water transportation operation.
    (B) Emissions benefits. Address the savings, in quantifiable terms, 
now and in the future over the current practice in emissions, including 
greenhouse gas emissions, criteria air pollutants or other 
environmental benefits the project offers.
    (C) Energy savings. Provide an analysis of potential reductions in 
energy consumption, in quantifiable terms, now and in the future over 
the current practice.
    (D) Landside transportation infrastructure maintenance savings. To 
the extent the data is available, indicate, in dollars per year, the 
projected savings of public funds that would result from a proposed 
project in road or railroad maintenance or repair, including pavement, 
bridges, tunnels or related transportation infrastructure. Include the 
impacts of accelerated infrastructure deterioration caused by vehicles 
currently using the route, especially in cases of oversize or 
overweight vehicles.
    (E) Safety improvements. Describe, in measurable terms, the 
projected safety improvements that would result from the proposed 
operation.
    (F) System resiliency and redundancy. To the extent data is 
available describe, if applicable, how a proposed Marine Highway 
Project offers a resilient route or service that can benefit the 
public. Where land transportation routes serving a locale or region are 
limited, describe how a proposed project offers an alternative and the 
benefit this could offer when other routes are interrupted as a result 
of natural or man-made incidents.
    (v) Capacity Alternatives. In cases where a Marine Highway Project 
is proposed as an alternative to constructing new land transportation 
capacity, indicate, in quantifiable terms, whether the proposed project 
represents the most cost-beneficial option among other modal 
improvements. Include in the comparison an analysis of the full range 
of benefits expected from the project. Include the projected savings in 
life-cycle costs of publicly maintained infrastructure.
    (vi) Business Planning. Indicate the degree to which the proposed 
project is associated with a service that is self-supporting:
    (A) Financial plan. Provide the project's financial plan and 
provide projected revenues and expenses. Include labor and operating 
costs, drayage, fixed and recurring infrastructure and maintenance 
costs, vessel or equipment acquisition or construction costs, etc. 
Include any anticipated changes in local or regional freight or 
passenger transportation, policy or regulations, ports, industry, 
corridors, or other developments affecting the project.
    (B) Demand for services. Identify shippers that have indicated an 
interest in and level of commitment to the proposed service, or 
describe the specific commodities, market, and shippers the service 
will attract, and the extent to which these entities have been engaged. 
In the case of services involving passengers, provide indicators of 
demand for the service, anticipated volumes and other factors that 
indicate likely utilization of the service. Include a marketing 
strategy, if one is in place.
    (C) Analysis. Provide, (or reference, if publicly available) market 
or transportation system research, data, and analysis used to develop 
or support the business model.
    (vii) Proposed Project Timeline. Include a proposed project 
timeline with estimated start dates and key milestones. Include the 
point in the timeline at which the enterprise is anticipated to attain 
self-sufficiency (if applicable).
    (viii) Support. Describe any known or anticipated obstacles to 
either implementation or long-term success of the project. Include any 
strategies, either in place or proposed, to mitigate impediments. In 
the event that public sector financial support is being sought, 
describe the amount, form and duration of public investment required.
    (ix) Environmental Considerations. Applicants must provide all 
information on hand that would assist the Department in conducting 
environmental analysis of the proposed project under the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.)
    (2) Cost and Benefits. The Department believes that benefit-cost 
analysis (BCA), including the monetization and discounting of costs and 
benefits to a common unit of measurement in present-day dollars, is 
important. The systematic process of comparing

[[Page 18106]]

expected benefits and costs helps decision-makers organize information 
about, and evaluate trade-offs between alternative transportation 
investments. However, we also recognize that development of a thorough 
BCA can be prohibitively costly to applicants, especially in cases 
where Federal funding is not currently available. Applicants should 
provide a BCA, if one is available. At a minimum, applicants should 
provide estimates of the project's expected benefits in external cost 
savings and public benefit and costs of capacity alternatives [sections 
393.4(e)(1)(iv) and 393.4(e)(1)(v)].
    (3) Standards and Measures. The Department will post, on the 
Maritime Administration's Web site, (http://www.marad.dot.gov) proposed 
standards (i.e.: the definition and use of ton-miles, measures of 
landside congestion, etc.) and measures that, lacking more specific or 
technically supported applicant-provided data, will be used by the 
Department to evaluate applications. Some examples of measures are the 
use of a standard cargo tonnage per container, fuel consumption rates, 
vehicle emissions and safety data for various transportation options, 
and baseline maintenance, repair and construction costs for surface 
transportation infrastructure. While we recognize that these standards 
and measures may not be ideal, the intent is to establish a minimal 
baseline by which to evaluate external costs and public benefits of 
transportation options. In the event applicants provide more specific 
and supported measures, they will be used in evaluating the potential 
benefits and costs of a project.
    (4) Protection of Confidential Business Information. All 
information submitted as part of or in support of an application shall 
use publicly available data or data that can be made public and 
methodologies that are accepted by industry practice and standards, to 
the extent possible. If your application includes information that you 
consider to be trade secret or confidential commercial or financial 
information, please do the following:
    (i) Note on the front cover that the submission ``Contains 
Confidential Business Information (CBI);''
    (ii) Mark each affected page ``CBI;'' and
    (iii) Clearly highlight or otherwise denote the CBI portions. The 
Department protects such information from disclosure to the extent 
allowed under applicable law. In the event the Department receives a 
Freedom of Information Act (FOIA) request for the information, the 
Department will follow the procedures described in its FOIA regulations 
at 49 CFR Sec.  7.17. Only information that is ultimately determined to 
be confidential under that procedure will be exempt from disclosure 
under FOIA.
    (5) Contents of Application. When responding to specific 
solicitations for Marine Highway Projects by the Department, applicants 
should include all of the information requested by Section 393.4(e)(1) 
and (2) above organized in a manner consistent with the elements set 
forth in that section. The Department reserves the right to ask any 
applicant to supplement the data in its application, but expects 
applications to be complete upon submission. The narrative portion of 
an application should not exceed 20 pages in length. The narrative 
should address all relevant information contained in paragraphs 
(e)(1)(i) through (ix) of Sec.  393.4. Documentation supporting the 
assertions made in the narrative portion may also be provided in the 
form of appendices, but limited to relevant information. Applications 
may be submitted electronically via the Federal Register (http://www.regulations.gov). Applications submitted in writing must include 
the original and three copies and must be on 8.5'' x 11'' single spaced 
paper, excluding maps, Geographic Information Systems (GIS) 
representations, etc. In the event that the sponsor of a Marine Highway 
Project that has already been designated by the Secretary seeks a 
modification to the designation because of a change in project scope, 
an expansion of the project, or other significant change to the 
project, the project sponsor should request the change in writing to 
the Secretary via the Administrator of the Maritime Administration. The 
request should contain any changed or new information that is relevant 
to the project.
    (6) Evaluation Process. Upon receipt by the Maritime Administrator, 
the application will be evaluated using the criteria outlined above 
during a technical review and an environmental analysis. The review 
will assess factors such as project scope, impact, public benefit, 
environmental effect, offsetting costs, cost to the Government (if 
any), the likelihood of long-term self-supporting operations, and its 
relationship with Marine Highway Corridors once designated (See section 
393.3 Marine Highway Corridors). Additional factors may be considered 
during the evaluation process. Upon completion of the technical review, 
applications will be forwarded to an inter-agency review team as 
described below. The Department will establish an inter-agency team to 
review each application received during the solicitation period 
(solicitation periods will be established via a future Federal Register 
Notice). The evaluation team will be led by the Office of the Secretary 
and will include members of the Maritime Administration, other 
Department of Transportation Operating Administrations, and as 
appropriate, representation from other Federal agencies and other 
representatives, as needed. The inter-agency team will evaluate 
applications using criteria that establishes the degree to which a 
proposed project can; reduce external cost and provide public benefit; 
offer a lower-cost alternative to increasing capacity in the Corridor, 
and; demonstrate the likelihood the service associated with the project 
will become self-supporting in a specified and reasonable timeframe. 
The Department will assign ratings of ``highly recommended,'' 
``recommended,'' or ``not recommended'' for each application based on 
the criteria set forth in section 393.4(e)(1) and (2) of this rule. 
Specific numerical scores will not be assigned. Within the overall 
criteria of External Cost Savings and Public Benefit, elements 
paragraphs (e)(1)(iv)(A) through (e)(1)(iv)(D) of this section will 
receive greater weight than will paragraphs (e)(1)(iv)(E) and 
(e)(1)(iv)(F) of this section. For the Business Planning elements, only 
paragraphs (e)(1)(vi)(A) and (e)(1)(vi)(B) of this section will be 
weighted; paragraph (e)(1)(vi)(C) of this section will be reviewed to 
assess the degree to which future projections such as operating costs 
and freight/passenger demand are accurate and reliable. Projects that 
have been deemed ``highly recommended'' and ``recommended'' will be 
placed on a preliminary list of projects for designation. The Secretary 
will make final designations in a manner that provides a balance 
between geographic regions and business models (i.e. among freight and 
passenger, expansion and new service, and existing vessel/terminal and 
new construction) to the degree this can be achieved. Prospective 
project sponsors will be notified as to the status of their application 
in writing once a determination has been made.
    (7) Performance Monitoring. (i) Once designated projects enter the 
operational phase (either start of a new service, or expansion of 
existing service), the Department will evaluate them regularly to 
determine if the project's objectives are being achieved.
    (ii) Overall project performance will be in one of three 
categories--exceeds, meets, or does not meet original projections in 
each of the three areas defined below:

[[Page 18107]]

    Public benefit. Does the project meet the stated goals in shifting 
specific numbers of vehicles (number of trucks, rail cars or 
automobiles) off the designated landside routes? Other public benefits, 
including energy savings, reduced emissions, and safety improvements 
will be assumed to be a direct derivative of either numbers of vehicles 
shifted, or vehicle/ton miles avoided, unless specific factors change 
(such as a change in vessel fuel or emissions).
    Public cost. Is the overall cost to the Federal government (if any) 
on track with estimates at the time of designation? The overall cost to 
the Federal government represents the amount of Federal investment 
(i.e. direct funding, loan guarantees or similar mechanisms) reduced by 
the offsetting savings the project represents (road/bridge wear and 
tear avoided, infrastructure construction or expansion deferred).
    Timeliness factor. Is the project on track for the point at which 
the enterprise is projected to attain self-sufficiency? For example, if 
the project was anticipated to attain self-sufficiency after 36 months 
of operation, is it on track at the point of evaluation to meet that 
objective? This can be determined by assessing revenues, freight and 
passenger trends, expenses and other factors established in the 
application review process.


Sec.  393.5.  Incentives, Impediments and Solutions.

    (a) Summary. The purpose of this section is to identify short term 
incentives and solutions to impediments in order to encourage use of 
the Marine Highway for freight and passengers.
    (b) Objectives. This section is aimed at increasing the use of the 
Marine Highways through the following primary objectives:
    (1) Encourage the integration of Marine Highways in transportation 
plans at the State, regional, local and Tribal levels.
    (2) Develop short term incentives aimed at expanding existing or 
starting new Marine Highway operations.
    (3) Identify and seek solutions to impediments to the Marine 
Highway.
    (c) Federal, State, Local, Regional and Tribal Transportation 
Planning. The Department will coordinate with Federal, State, local and 
Tribal governments and Metropolitan Planning Organizations to develop 
strategies to encourage the use of America's Marine Highways for 
transportation of passengers and cargo. The Department will:
    (1) Work with these entities to assess plans and develop 
strategies, where appropriate, to incorporate Marine Highway 
transportation, including ferries, and other marine transportation 
solutions for regional and interstate transport of freight and 
passengers in their statewide and metropolitan transportation plans.
    (2) Facilitate groups of States and multi-State transportation 
entities to determine how Marine Highway transportation can address 
traffic delays, bottlenecks, and other interstate transportation 
challenges to their mutual benefit.
    (3) Identify other Federal agencies that have jurisdiction over the 
project, or which currently provide funding for components of the 
project, in order to determine the extent to which those agencies 
should be consulted with and invited to assist in the coordination 
process.
    (4) Consult with Federal Highway Administration, Federal Motor 
Carrier Safety Administration, Federal Railroad Administration, Federal 
Transit Administration and other entities within DOT, as appropriate, 
for support and to evaluate costs and benefits of proposed Marine 
Highway Corridors and Projects.
    (d) Short-Term Incentives. The Department will develop proposed 
short-term incentives to encourage the use, initiation, or expansion of 
Marine Highway services in consultation with shippers and other 
participants in transportation logistics, and government entities, as 
appropriate.
    (e) Impediments and Solutions. The Department will either establish 
a board, or modify an existing body, in accordance with the Federal 
Advisory Committee Act (FACA), whose role is to identify impediments 
that hinder effective use of the Marine Highways and recommend 
solutions. The Board will meet regularly and report its findings and 
recommended solutions to the Maritime Administrator. Board membership 
will include, among others, representation by Federal Departments and 
Agencies, State Departments of Transportation, Metropolitan Planning 
Organizations and other local public entities including Tribal 
governments and private sector stakeholders. The Department will take 
actions, as appropriate, to address impediments to the Marine Highways.


Sec.  393.6.  Research on Marine Highway Transportation.

    (a) Summary. The Department will work in consultation with the 
Environmental Protection Agency and other entities as appropriate, 
within the limits of available resources, to conduct research in 
support of America's Marine Highway or in direct support of designated 
Marine Highway Corridors and Projects.
    (b) Objectives. The primary objectives of selected research 
Projects are to:
    (1) Identify and quantify environmental and transportation-related 
benefits that can be derived from utilization of the Marine Highways as 
compared to other modes of surface transportation.
    (2) Identify existing or emerging technology, vessel design, and 
other improvements that would reduce emissions, increase fuel economy, 
and lower costs of Marine Highway transportation and increase the 
efficiency of intermodal transfers.

    Dated: April 1, 2010.

    By Order of the Administrator.
Julie P. Agarwal,
Acting Secretary, Maritime Administration.
[FR Doc. 2010-7899 Filed 4-7-10; 11:15 am]
BILLING CODE 4910-81-P