[Federal Register Volume 89, Number 151 (Tuesday, August 6, 2024)]
[Rules and Regulations]
[Pages 63830-63841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17061]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 10

[Docket No. USCG-2021-0288]
RIN 1625-AC83


Exemption for Active-Duty Uniformed Service Members From Merchant 
Mariner Credentialing Fees

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is exempting certain members of the uniformed 
services from Merchant Mariner Credential (MMC) fees for the evaluation 
of an MMC application, the administration of an examination required 
for an MMC endorsement, and the issuance of an MMC. This final rule is 
in response to Executive Order 13860--Supporting the Transition of 
Active Duty Service Members and Military Veterans Into the Merchant 
Marine, and the National Defense Authorization Act for Fiscal Year 
2020.

DATES: This final rule is effective November 4, 2024.

ADDRESSES: To view documents mentioned in this final rule as being 
available in the docket, go to www.regulations.gov, type USCG-2021-0288 
in the search box and click ``Search.'' Next, in the Document Type 
column, select ``Supporting & Related Material.''

FOR FURTHER INFORMATION CONTACT: For information about this document, 
call or email Mr. James Cavo, U.S. Coast Guard Office of Merchant 
Mariner Credentialing; telephone 202-372-1205, email 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Abbreviations
II. Background
III. Discussion of Comments and Changes
IV. Legal Authority
V. Discussion of the Rule
VI. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Abbreviations

CATEX Categorical exclusion
CFR Code of Federal Regulations
CG-MMC Coast Guard Office of Merchant Mariner Credentialing
CPI Consumer Price Index
DHS Department of Homeland Security
GS General Schedule
MMC Merchant Mariner Credential
NDAA 2020 National Defense Authorization Act for Fiscal Year 2020
NOAA National Oceanic and Atmospheric Administration
NMC National Maritime Center
NPRM Notice of Proposed Rulemaking
OMB Office of Management and Budget
RA Regulatory analysis
Sec.  Section
STCW International Convention on Standards of Training, 
Certification and Watchkeeping for Seafarers
USPHS U.S. Public Health Service
U.S.C. United States Code

II. Background

    As mandated by Title 46 of the United States Code (U.S.C.), section 
2110, and in accordance with 31 U.S.C. 9701, the Coast Guard has 
established fees associated with Merchant Mariner Credential (MMC) 
applications, which are codified in table 1 to Sec.  10.219(a) of Title 
46 of the Code of Federal Regulations (CFR). There are three types of 
credentialing fees: an evaluation fee, an examination fee, and an 
issuance fee. The amount of the fee varies based on the individual 
credential transaction an applicant seeks.
    Evaluation fees for MMCs range from $50 to $100, and the applicant 
must pay the fee at the time an application is submitted to the Coast 
Guard. Examination fees range from $45 to $140, depending on the 
endorsement sought, and must be paid before the professional 
examination for an endorsement is taken.\1\ If an applicant applies for 
an MMC with both a rating and an officer endorsement, the higher 
evaluation fee is charged. Issuance fees

[[Page 63831]]

are $45 and must be paid before an MMC is issued.\2\
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    \1\ An endorsement is a ``statement of a mariner's 
qualifications.'' 46 CFR 10.107(b). The particular endorsement(s) on 
each mariner's MMC indicate what capacities they may serve in, such 
as a ``Barge Supervisor'' or a ``Lifeboatman.'' See id.; 46 CFR 
10.109(a) through (b).
    \2\ A rating endorsement is an annotation on an MMC that allows 
a mariner to serve in those capacities set out in 46 CFR 10.109(b). 
46 CFR 10.107(b). Officer endorsement means an annotation on an MMC 
that allows a mariner to serve in the capacities listed in 46 CFR 
10.109. Id.
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    The original issuance of an MMC, as well as any subsequent 
credential transactions, such as increasing the scope or raising the 
grade of authority, or renewing an MMC, all require a fee.\3\ MMCs are 
valid for a period of 5 years and may be renewed at any time during the 
validity period of the credential and for 1 year after expiration.
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    \3\ ``Increase in scope'' and ``raise of grade'' are defined at 
46 CFR 10.107.
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    Mariners typically seek additional endorsements after accruing the 
required sea service and completing required training. There are no 
fees associated with issuing mariner medical certificates or 
endorsements for the International Convention on Standards of Training, 
Certification and Watchkeeping for Seafarers (STCW).
    The Coast Guard does not require a fee for MMC transactions if one 
of the following three conditions is met:
    (1) The application is for a Document of Continuity, as specified 
in 46 CFR 10.219(e)(3).
    (2) The credential is a duplicate of a credential lost in a 
shipwreck or other casualty under 46 CFR 10.229(c) and reflected in 
table 1 to Sec.  10.219(a).
    (3) The applicant qualifies for a ``no-fee'' MMC under 46 CFR 
10.219(h).
    Currently, an applicant only qualifies for a ``no-fee'' MMC if they 
are a volunteer for, or an employee of, an organization that is youth-
oriented, not-for-profit, and charitable, 46 CFR 10.219(h). The holder 
of a ``no-fee'' MMC is restricted to using vessels owned or operated by 
the sponsoring organization, 46 CFR 10.219(k).
    In March 2019, Executive Order 13860 (Supporting the Transition of 
Active Duty Service Members and Military Veterans Into the Merchant 
Marine) directed the Coast Guard to waive the fees associated with MMC 
applications ``for active duty service members, if a waiver is 
authorized and appropriate.'' \4\ That Executive Order applied only to 
members of the armed forces.
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    \4\ Executive Order 13860, section 3, paragraph (a)(ii) (84 FR 
8407, March 7, 2019).
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    Subsequently, in December 2019, Congress enacted the National 
Defense Authorization Act for Fiscal Year 2020 (NDAA 2020).\5\ Building 
upon Executive Order 13860, section 3511(c)(1) of the NDAA 2020 
directed the Coast Guard to waive evaluation, examination, and issuance 
fees associated with MMCs if a waiver is authorized and appropriate, 
not just for the armed forces (Army, Navy, Air Force, Marine Corps, 
Space Force, and Coast Guard), but for all ``members of the uniformed 
services on active duty.'' The uniformed services include the 
Commissioned Corps of the National Oceanic and Atmospheric 
Administration (NOAA) and the Commissioned Corps of the U.S. Public 
Health Service (USPHS) in addition to the Army, Navy, Air Force, Marine 
Corps, Space Force, and Coast Guard.\6\
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    \5\ Public Law 116-92, Dec. 20, 2019.
    \6\ Section 3511 of the NDAA 2020 is codified as a note to 46 
U.S.C. 7302; ``Uniformed services'' defined at 10 U.S.C. 101(a)(5).
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    In accordance with Executive Order 13860 and section 3511 of the 
NDAA 2020, on May 26, 2020, the U.S. Coast Guard's Office of Merchant 
Mariner Credentialing (CG-MMC) issued Policy Letter 02-20, ``Waiver of 
Fees Associated with MMC Applications for Active Duty Members of the 
Uniformed Services.'' \7\ CG-MMC Policy Letter 02-20 provided guidance 
for waiving MMC fees for active duty members of the uniformed services. 
The policy also provided a waiver of fees for mariners who provided 
documentation evidencing their eligibility for the fee waiver. This 
documentation could include active duty orders or a letter from their 
command or personnel office on official letterhead that stated the 
applicant was a current member of the uniformed services on active duty 
or a member of the Selected Reserve of the Ready Reserve of any of the 
armed forces or the Ready Reserve Corps of the USPHS.
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    \7\ CG-MMC Policy Letter 02-20 is available at https://www.dco.uscg.mil/Portals/9/DCO%20Documents/5p/5ps/MMC/CG-MMC-2%20Policies/CG-MMC-Policy-Letter-02-20.pdf (last visited 4/9/2024).
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    On October 3, 2023, the Coast Guard published a notice of proposed 
rulemaking (NPRM) entitled ``Exemption for Active Duty Uniformed 
Service Members from Merchant Mariner Credentialing Fees'' (88 FR 
68042). Having considered comments submitted in response to that NPRM, 
we are issuing this final rule to exempt certain members of the 
uniformed services from MMC fees for the evaluation of an MMC 
application, the administration of an examination required for an MMC 
endorsement, and the issuance of an MMC.

III. Discussion of Comments and Changes

    We received two comments on the NPRM published on October 3, 2023. 
These written submissions are available in the public docket for this 
rulemaking, where indicated under ADDRESSES or use the direct link 
https://www.regulations.gov/docket/USCG-2021-0288.
    One commenter expressed that the Coast Guard should research and 
collect data concerning the Endangered Species Act of 1973. This 
comment is not within the scope of this rulemaking. For this reason, we 
have made no changes from the proposed rule in response to this 
comment.
    The second commenter expressed support for this final rule and 
inquired whether an exemption received on one MMC application applied 
to future applications. As proposed in the NPRM, a mariner must submit 
documentation of their eligibility for the exemption at the time they 
submit an application. A mariner who received an exemption in the past 
may not be eligible for an exemption on a subsequent application if 
their active duty or reserve status has changed. So, the applicant must 
demonstrate their eligibility for an exemption each time they apply for 
an original, renewal, or raise of grade of an MMC. For these reasons, 
we have made no changes from the proposed rule in response to this 
comment.

IV. Legal Authority

    Section 3511(c)(1) of the NDAA 2020 directed the Coast Guard to 
waive evaluation, examination, and issuance fees associated with MMCs 
for members of the uniformed services on active duty, if a waiver is 
authorized and appropriate. The Coast Guard has found that such a 
waiver is authorized and appropriate. Under 46 U.S.C. 2110(g), the 
Secretary of the Department of Homeland Security (DHS) may exempt a 
person from paying such a fee if the Secretary determines that it is in 
the public interest to do so. The Secretary has delegated this 
authority to the Coast Guard through article II, paragraph 92, 
subparagraph (a) of DHS Delegation No. 00170.1, Revision No. 01.4.
    The Coast Guard concludes it is in the public interest to exempt 
members of the uniformed services (Army, Navy, Air Force, Marine Corps, 
Space Force, Coast Guard, Commissioned Corps of the NOAA, and 
Commissioned Corps of USPHS) on active duty; members of the Selected 
Reserve of the Ready Reserve of any of the armed forces (Army National 
Guard of the United States, Army Reserve, Navy Reserve, Marine Corps 
Reserve, Air National Guard of the United States, Air Force Reserve, 
and Coast Guard Reserve); and the Ready Reserve Corps of the USPHS from 
fees associated with obtaining an MMC.

[[Page 63832]]

    As discussed in Executive Order 13860, it is the policy of the 
United States to establish and maintain an effective merchant marine 
and to provide sufficient support and resources to active duty and 
separating service members who pursue or possess MMCs. The goals of not 
requiring these fees are to: (1) help attract active duty service 
members with the appropriate skills and expertise to obtain an MMC for 
employment in the maritime industry; (2) support U.S. national security 
requirements; and (3) provide meaningful, well-paying jobs to U.S. 
veterans.\8\
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    \8\ Executive Order 13860, section 1.
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V. Discussion of the Rule

    The Coast Guard is amending 46 CFR 10.219 to codify this MMC fee 
waiver in the regulations. Specifically, the Coast Guard is exempting 
members of the uniformed services on active duty, members of the 
Selected Reserve of the Ready Reserve of any of the armed forces (Army 
National Guard of the United States, Army Reserve, Navy Reserve, Marine 
Corps Reserve, Air National Guard of the United States, Air Force 
Reserve and Coast Guard Reserve), and the Ready Reserve Corps of the 
USPHS from paying evaluation, examination, or issuance fees for an MMC.
    For purposes of this final rule, ``uniformed services'' has the 
same meaning as defined in 10 U.S.C. 101(a)(5): the Army, Navy, Air 
Force, Marine Corps, Space Force, and Coast Guard, as well as members 
of the NOAA and USPHS Commissioned Corps. Members of the Selected 
Reserve of the Ready Reserve of a reserve component named in 10 U.S.C. 
10101 and members of the Ready Reserve Corps of the USPHS are also 
eligible for the exemption.\9\
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    \9\ The NOAA Commissioned Corps does not have a reserve 
component.
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    For members of the armed forces, ``active duty'' has the same 
meaning as under 10 U.S.C. 101(d)(1). For members of the NOAA 
commissioned corps, ``active duty'' has the same meaning as under 33 
U.S.C. 3002(b)(1). For members of the USPHS Commissioned Corps, 
``active duty'' has the same meaning as defined in 42 CFR 21.72(f). 
``Selected Reserve'' has the same meaning as under 10 U.S.C. 10143(a). 
This fee exemption will be located in a new paragraph (m) in 46 CFR 
10.219.

VI. Regulatory Analyses

    We developed this final rule after considering numerous statutes 
and Executive orders related to the final rule. Below we summarize our 
analyses based on these statutes and Executive orders.

A. Regulatory Planning and Review

    Executive Orders 12866 (Regulatory Planning and Review), as amended 
by Executive Order 14094 (Modernizing Regulatory Review), and 13563 
(Improving Regulation and Regulatory Review) direct agencies to assess 
the costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    The Office of Management and Budget (OMB) has not designated this 
final rule a significant regulatory action under section 3(f) of 
Executive Order 12866, as amended by Executive Order 14094 (Modernizing 
Regulatory Review). Accordingly, OMB has not reviewed this rule. A 
regulatory analysis (RA) follows.
Changes From the Notice of Proposed Rulemaking
    For the reasons discussed in section III of this preamble, 
Discussion of Comments, we have made no substantive changes to the 
regulatory text from the proposed rule in response to the two comments 
received during the NPRM comment period. However, we have made two non-
substantive editorial changes to the regulatory text in 46 CFR 
10.219(m) of this final rule. First, we referenced ``section'' instead 
of ``subsection''. Second, we inserted the term ``paragraph'' before 
``(b)(2)'' for clarity. The comments received also do not necessitate a 
change to either the methodology or type of data used in the RA from 
the NPRM. The only change to the regulatory analysis from the NPRM to 
this final rule is to update costs from 2021 to 2023 to utilize the 
most current available information.
Summary of Regulatory Analysis
    The Coast Guard issues this final rule in response to two items. 
The first is section 3, paragraph (a)(ii) of Executive Order 13860 
(Supporting the Transition of Active Duty Service Members and Military 
Veterans Into the Merchant Marine) signed March 4, 2019.\10\ The second 
item is section 3511(c)(1) of the NDAA 2020.\11\
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    \10\ 84 FR 8407 March 7, 2019 (``With respect to NMC license 
evaluation, issuance, and examination, [the Coast Guard shall] take 
all necessary and appropriate actions to provide for the waiver of 
fees for active duty service members.'').
    \11\ Public Law 116-92, Dec. 20, 2019.
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    For purposes of the analysis, this RA is presented in two parts. 
Part I examines the impacts of CG-MMC Policy Letter 02-20, which was 
issued on May 26, 2020.\12\ Part II examines the impacts of this final 
rule after the issuance of the CG-MMC Policy Letter 02-20. The policy 
letter and this final rule cover different populations. The difference 
between the two populations arises from which components of the 
reserves were eligible for a waiver of fees under the policy letter and 
which are eligible for an exemption under this final rule. The policy 
letter covered all current members of the reserves of the uniformed 
services and members of the National Guard, who were previously on 
active duty. This final rule, however, covers only those reservists who 
are currently members of the Selected Reserve, as described in 10 
U.S.C. 10143(a), a reserve component named in 10 U.S.C. 10101, or the 
Ready Reserve of the USPHS. The population of this final rule is a 
subset of that of the policy letter.
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    \12\ Section 5e of the policy letter. A copy of the policy 
letter can be found in the docket.
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    The Coast Guard does not have data on the reserve and active duty 
status of applicants who were granted fee waivers under the policy 
letter. Due to this lack of data, it is not possible to estimate the 
differences in the affected populations between the policy letter and 
this final rule.\13\ Therefore, the Coast Guard is treating the 
estimated difference as an unquantified impact of this final rule, 
though the Coast Guard explores potential cost savings effects in its 
analysis. Further discussion follows.
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    \13\ Although the NMC has data on the aggregate number of 
applicants for the fee waiver, it does not have data on the 
applicants broken out by subcategories such as what service they are 
in (or were in) or their active or reserve status. Executive Order 
13860 does not require the Coast Guard to collect this data. As a 
result, the Coast Guard does not collect it. In addition, the 
Department of Defense did not publish data on the number of Selected 
Reservists or Ready Reservists who are currently on active duty or 
who were in the recent past at the time this final rule was written.
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    Since the policy letter and this final rule are implemented at 
different time periods (the policy letter was implemented in 2020, and 
this final rule will be implemented in 2024), two different baselines 
are examined. The first baseline is associated with the pre-policy 
baseline (covering 2020 through 2033), and the second is associated 
with the final rule baseline (covering 2024 through 2033).

[[Page 63833]]

    The pre-policy baseline analyzes the effects of Policy Letter 02-
20, published in 2020, which allowed certain eligible applicants to 
receive a waiver of MMC fees. The pre-policy baseline estimates the 
costs and savings that applicants and the Coast Guard received as a 
result of the policy letter, as well as the costs and savings from this 
rulemaking.
    The final rule baseline estimates the costs and savings that will 
occur as the result of this final rule. However, since we are unable to 
determine the change in population, there are no additional costs or 
savings that can be attributed to the final rule baseline.
    Tables 1a and 1b provide a summary of all impacts from Policy 
Letter 02-20 and this final rule on a per-applicant basis. Table 1a 
discusses the impact of the policy letter, and table 1b discusses the 
impact of this final rule. The dollar figures are presented in both 
undiscounted and discounted terms (7 percent on an annualized basis) 
for a 14-year period. All dollar figures presented in this final rule 
are in 2023 dollar terms unless otherwise stated.

   Table 1a--Summary of the Impacts of Policy Letter 02-20 Pre-Policy
                                Baseline
                      [All figures in 2023 dollars]
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           Category                             Impacts
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Applicability................  46 U.S.C. 2110, Executive Order 13860,
                                and NDAA 2020.
Affected Population..........  Members of the uniformed services (Army,
                                Navy, Air Force, Space Force, Marine
                                Corps, Coast Guard, Commissioned Corps
                                of NOAA, Commissioned Corps of USPHS),
                                including reservists and members of the
                                National Guard, who are on active duty
                                at the time of application, or are
                                current members of the reserve forces
                                and were previously on active duty.
Estimated Fee Waivers          The estimated number of fee waivers in
 (annually).                    the future is 622 (annually).
Labor costs for applicants to  $10.23 per application.
 provide documentation of      The 14-year documentation costs for the
 eligibility for an MMC fee     622 yearly applicants are:
 waiver.                        $89,105 (in total undiscounted
                                dollars).
                                $73,948.
                               $6,365 (annualized, discounted at 7%).
Labor costs to the Coast       $8.50 per application.
 Guard to evaluate             The 14-year costs to the Coast Guard are:
 applicant's eligibility for    $74,018 (in total undiscounted
 MMC fee waiver.                dollars).
                                $60,608 (total, discounted at
                                7%).
                               $5,287 (annualized, discounted at 7%).
Transfer payments............  The mean estimated transfer is $159 per
(eliminated applicant's MMC     MMC.
 fees paid to the Federal      Over the 14-year period, the transfers
 Government).                   are estimated at:
                                $1,384,572 (in total
                                undiscounted dollars).
                                $1,133,720 (total, discounted at
                                7%).
                               $98,898 (annualized, discounted at 7%).
Unquantified benefits........  May provide uniformed services members
                                greater flexibility with respect to
                                pursuing careers after leaving the
                                uniformed services.
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             Table 1b--Summary of the Impacts of Final Rule
                    [All figures are in 2023 dollars]
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           Category                             Impacts
------------------------------------------------------------------------
Applicability................  46 U.S.C. 2110, Executive Order 13860,
                                and NDAA 2020.
Affected Population..........  This final rule covers only uniformed
                                service members and reservists on active
                                duty, members of the Selected Reserve,
                                and members of the Ready Reserve Corps
                                of the USPHS.
                               This final rule involves a narrower
                                population because Policy Letter 02-20
                                covers all reservists currently on
                                active duty as well as those who were on
                                active duty in the past.
Estimated Fee Exemptions       The number of fee exemptions in the
 (annually).                    future is estimated, for purposes of our
                                analysis, at 622 (annually).
                               However, because the only change from
                                Policy Letter 02-20 involves a potential
                                decrease in the reservist population,
                                the actual number may be smaller. Due to
                                a lack of data, it is not possible to
                                quantify this number.
Labor costs for applicants to  $10.23 per application.
 provide documentation of
 eligibility for an MMC fee
 exemption.
                               There are no additional labor costs to
                                the applicants to provide documentation
                                as this rulemaking codifies the already-
                                existing Policy Letter 02-20.
Labor costs to the Coast       $8.50 per application.
 Guard to evaluate
 applicant's eligibility for
 MMC fee exemption.
                               There are no additional labor costs
                                expected from the implementation of this
                                rulemaking as it codifies the already-
                                existing Policy Letter 02-20.
Transfer payments (eliminated  Codifies MMC Fee Waiver. The mean
 applicant's MMC fees paid to   estimated transfer is $159 per MMC.
 the Federal Government).
                               There are no additional transfer payments
                                expected from the implementation of this
                                final rule as it codifies the already
                                existing Policy Letter 02-20.
Unquantified benefits........  May reduce the burden on the affected
                                population by increasing efficiency and
                                transparency, as opposed to remaining a
                                standalone policy letter.
------------------------------------------------------------------------
Note: Aggregate total numbers in the table have been rounded to the
  closest whole dollar.


[[Page 63834]]

Part I. CG-MMC Policy Letter 02-20 (Pre-Policy Baseline)
    A policy letter was published to immediately implement Executive 
Order 13860 and section 3511(c)(1) of the NDAA 2020. Implementing the 
policy letter had three impacts. The first impact was the time that 
applicants were required to provide documentation to show eligibility 
for the MMC fee waiver.\14\ The second impact involved the labor costs 
for the Coast Guard to evaluate documentation for eligibility of the 
fee waiver. Before the policy letter was implemented, the Coast Guard 
did not have to evaluate such documentation, so there was no cost to 
the Government. The third impact of the policy letter was in the form 
of transfer payments, which are monetary payments from one group to 
another that do not affect the total resources available to society. 
Before the Coast Guard implemented the policy letter, the affected 
population was required to pay the MMC fees. Following publication of 
the policy letter, the Federal Government incurred the cost of those 
fees. These three factors comprise the effects of the of Policy Letter 
02-20.
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    \14\ Applicants must submit documentation consistent with CG-MMC 
Policy Letter 02-20 to show that they are eligible for the fee 
exemption. Documentation may include a copy of active duty orders 
citing Titles 10 or 14 of the U.S.C., or a letter from the relevant 
command or personnel office on official letterhead stating that the 
applicant is a current member of the uniformed services.
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Affected Population for Policy Letter 02-20
    In accordance with Executive Order 13860, section 3511 of the NDAA 
2020, and the authority under 46 U.S.C. 2110(g), the Coast Guard waived 
MMC fees for members of the uniformed services (Army, Navy, Air Force, 
Marine Corps, Space Force, Coast Guard, and the Commissioned Corps of 
NOAA and the USPHS), including reservists and members of the National 
Guard, if they were on active duty at the time of application, or a 
member of the reserve forces and were previously on active duty.\15\ 
The fee waiver was implemented through Policy Letter 02-20. This policy 
letter took effect on May 26, 2020. Data is available for all these 
categories of personnel except the Ready Reserve Corps of the USPHS. 
The Ready Reserve Corps of the USPHS was authorized and funded by the 
Coronavirus Aid, Relief and Economic Security Act and signed into law 
on March 27, 2020. It only began to accept applications in the fall of 
2020.\16\
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    \15\ The legal authority is discussed in greater detail in 
section II of this preamble, Background.
    \16\ https://www.usphs.gov/ready-reserve (last visited 4/9/
2024).
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    With respect to the other groups mentioned, the maximum potentially 
affected population was 2,145,035. That was the total number of 
personnel who may have been eligible for an MMC fee waiver. A detailed 
breakdown of this population can be found below in table 2.

                  Table 2--Maximum Total Potentially Affected Population by Policy Letter 02-20
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           Service branch                Number                     Source                         Notes
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                                          Members of Uniformed Services
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Army...............................         466,172  Defense Manpower Data Center DMDC     This data is as of
Navy...............................         340,390   website, https://dwp.dmdc.osd.mil/    the quarter ending
Air Force and Space Force..........         329,257   dwp/app/dod-data-reports/workforce-   March 2022.\1\
                                                      reports (last visited 4/9/2024).
Marines............................         176,259
Coast Guard........................          40,308
Commissioned Corps of NOAA.........             327  Information from NOAA, provided May   .....................
                                                      27, 2021.
Commissioned Corps of USPHS........           6,100  Department of Health and Human        .....................
                                                      Services website https://uscg.sharepoint-mil.us/sites/PWA-DCO-5P/ActiveRulemakingProjects/CG-REGActiveRulemakingProjects/Undocketed-MMCFeeWaiver/ECON/NPRM/Data/Population/In-ScopeOldPreMay26,2021/PopulationSetActiveDuty/USPHSSize.pdf?CT=1712845632479&OR=ItemsView temsView (last visited 4/11/24).
Total Active Uniformed Service            1,358,813
 Members.
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                                Members of Selected Reserve of the Ready Reserve
----------------------------------------------------------------------------------------------------------------
Army Reserve.......................         180,647  Defense Manpower Data Center          This data is as of
Army National Guard of the U.S.....         333,182   website, https://dwp.dmdc.osd.mil/    March 2022.\2\
Navy Reserve.......................          56,017   dwp/app/dod-data-reports/workforce-
Air Force Reserve..................          69,697   reports, (last visited 4/9/2024).
Air National Guard of the U.S......         106,964   Downloaded from section ``military
                                                      personal, Military and civilian
                                                      personnel by service/agency by
                                                      state/country, March 2022''.
Marine Corps Reserves..............          33,607
Coast Guard Reserves...............           6,108
Commissioned Corps of USPHS (Ready          N.A.\3\
 Reserve).
Space Force Reserve................           \4\ 0
Total Members of Selected Reserve           786,222
 of the Ready Reserve.
Total Active Uniformed Service            2,145,035
 Members + Members of Selected
 Reserve of the Ready Reserve.
----------------------------------------------------------------------------------------------------------------
\1\ This table does not include personnel on temporary duty or deployed in support of contingency operations.
  The data is the latest available as of June 2022.
\2\ Latest available data as of the search date, September 1, 2022.
\3\ USPHS Ready Reserve was created in March 2020 and started to take applications in Fall 2020.
\4\ The Space Force, as of September 1, 2022, does not have a reserve element.


[[Page 63835]]

    Of the 2,145,035 eligible persons, only a small number applied for 
an MMC and received a fee waiver. Based on available data, 2020 through 
2022 inclusively, an average of 622 eligible persons were granted a 
waiver of MMC fees per year. The Coast Guard assumes that, in the 10-
year period following implementation of Policy Letter 02-20, an average 
of 622 persons will continue to annually request and receive a waiver 
of MMC fees.
MMC Fees To Be Exempted
    Table 3 provides the MMC evaluation, examination, and issuance fees 
waived for qualifying individuals based on Policy Letter 02-20.\17\ The 
column on the right side shows the aggregated evaluation, examination, 
and issuance fees for each type of credential transaction. The average 
fee for an MMC, as can be seen at the bottom of table 3, is 
$159.38.\18\
---------------------------------------------------------------------------

    \17\ See Table 1 to 10.219(a)--Fees in 46 CFR 10.219.
    \18\ The $159.38 is the nominal figure. Converting this into 
2021 dollar terms, from 2023, it is $139.28. The conversion process, 
along with its impact on the RA, is discussed in more detail further 
in the RA.

     Table 3--Fee for MMCs and Associated Endorsements From Table 1 to Sec.   10.219(a) in 46 CFR 10.219(a)
----------------------------------------------------------------------------------------------------------------
                                          Evaluation,    Examination,
           If you apply for              then the fee    then the fee    Issuance, then the fee is .     Total
                                           is . . .        is . . .                  . .
----------------------------------------------------------------------------------------------------------------
MMC with officer endorsement:
    Original:
        Upper level 1.................            $100            $110  $45.........................        $255
        Lower level 2.................             100              95  45..........................         240
        Renewal.......................              50              45  45..........................         140
        Raise of grade................             100              45  45..........................         190
        Modification or removal of                  50              45  45..........................         140
         limitation or scope.
Radio Officer endorsement:
    Original..........................              50              45  45..........................         140
    Renewal...........................              50             n/a  45..........................          95
Staff officer endorsements:
    Original..........................              90             n/a  45..........................         135
    Renewal...........................              50             n/a  45..........................          95
MMC with rating endorsement:
    Original endorsement for ratings                95             n/a  45..........................         140
     other than qualified ratings.
    Original endorsement for qualified              95             140  45..........................         280
     rating.
    Upgrade or raise of grade.........              95             140  45..........................         280
    Renewal endorsement for ratings                 50             n/a  45..........................          95
     other than qualified ratings.
    Renewal endorsement for qualified               50              45  45..........................         140
     rating.
    Modification or removal of                      50              45  45..........................         140
     limitation or scope.
STCW endorsement:
    Original..........................               0               0  0...........................         n/a
    Renewal...........................               0               0  0...........................         n/a
    Reissue, replacement, and                      n/a             n/a  45..........................          45
     duplicate.
----------------------------------------------------------------------------------------------------------------
                                                                                   Summary Statistics
                                                                       -----------------------------------------
                                                                        Mean........................     $159.38
                                                                        Lower Bound.................      $45.00
                                                                        Upper Bound.................     $280.00
                                                                        Credential transaction types          16
                                                                         that require fees.
----------------------------------------------------------------------------------------------------------------

Cost and Transfer Impacts of Policy Letter 02-20
    As stated previously, there were three impacts of the policy 
letter. The first was it resulted in a cost to applicants to provide 
the documentation needed to show eligibility for the MMC fee waiver. 
The second was the cost to the Coast Guard to process this 
documentation. The third was the transfer price associated with the 
costs of the fees being shifted from individual applicants to the 
Federal Government. The costs to applicants are discussed in detail in 
section (1), the costs to the Coast Guard are discussed in section (2), 
the combined costs to applicants and the Coast Guard are discussed in 
section (3), and the transfer costs are detailed in section (4).
(1) Labor Costs for Applicants Providing Documentation Showing 
Eligibility for MMC Fee Waiver
    Applicants for an MMC fee waiver, under Policy Letter 02-20, 
provided documentation to show eligibility. Examples of documentation 
include, but are not limited to, active duty orders citing Titles 10 or 
14 of the U.S.C., a letter from the command or personnel office on 
official letterhead stating that the applicant was serving under Titles 
10 or 14 of the U.S.C., or similar documentation. The applicant 
submitted the documentation with their application for an MMC.\19\
---------------------------------------------------------------------------

    \19\ In order to provide maximum flexibility to applicants, the 
acceptable forms of documentation will be provided in updated 
guidance that the Coast Guard is planning to publish when this final 
rule is published.

---------------------------------------------------------------------------

[[Page 63836]]

    The National Maritime Center (NMC) estimated that it took 
applicants 15 minutes to obtain eligibility documentation and include 
it with an MMC application.20 21 The Coast Guard estimates 
the mean hourly rate of active duty uniformed service members at $40.93 
per hour (in 2023 dollars).\22\ To estimate hourly rates, the Coast 
Guard divides $85,416.12 (the average annual pay of all active duty 
military personnel, rounded) by 2,087, which the Office of Personnel 
and Management uses as the number of working hours in a year, per 5 
U.S.C. 5504(b)(1).\23\ Therefore, the Coast Guard estimates the average 
hourly rate of active duty uniformed service members, in 2023 dollar 
terms, is $40.93 \24\ ($85,416.12 / 2,087, rounded).
---------------------------------------------------------------------------

    \20\ The NMC is responsible for receiving and evaluating MMC 
applications and issuing MMCs to qualified mariners.
    \21\ The Coast Guard, in its calculations, has assumed that 
applicants provide their own documentation as opposed to command 
personnel providing the documentation on their behalf. The Coast 
Guard does not have information on the breakdown between the two 
groups.
    \22\ This dollar figure for uniformed service members is 
provided in nominal terms, as opposed to a loaded rate (adjusted for 
benefits). This is due to the complexity of measuring and obtaining 
readily available data on the uniformed service members benefit 
compensation package. We compared civilian employees and uniformed 
service members and concluded that the comparison is not 
appropriate, since civilian employees and uniformed service members 
receive significantly different benefits. Uniformed personnel, for 
example, are provided full housing (or equivalent financial 
compensation), food or partial food stipend, full medical coverage 
for themselves and their families, significant educational benefits 
during their time in service and, upon completing terms of military 
service, pensions (for those who complete the requisite amount of 
service) complete moving expenses throughout their careers, and 
other benefits that are dependent upon an individual's assignment. 
By comparison, few employees in the private sector receive such 
benefits.
    \23\ The $85,416.12 figure was estimated using the January 2023 
Monthly Basic Pay Table on the Department of Defense website, 
https://militarpay.defense.gov/Portals/3/Documents/2023%20Basic%20Pay%20Table.pdf (last visited 4/9/2024), which in 
turn was found under ``active-duty pay'' at https://militarypay.defense.gov/Pay/Basic-Pay/Active-Duty-Pay/ (last visited 
4/9/2024). In calculating this average, we excluded all zero cells 
in the table, as they are fields for which wages cannot exist. For 
example, it is not possible to obtain a 0-to-10 rating with fewer 
than 20 years of experience. Hence, the zeros in the table for that 
rating, for years of experience under 20, were excluded from our 
calculations. After deriving the unweighted monthly average from 
this table ($7,118.01), the figure was annualized by multiplying by 
12 to obtain $85,416.12. It should be noted that this figure may not 
be exact due to rounding.
    \24\ Rounded to nearest whole cent.
---------------------------------------------------------------------------

    The Coast Guard estimates it takes 15 minutes to provide the 
documentation showing eligibility for the fee waiver and forecasts 622 
applicants per year. We estimate the total cost (in 2023 dollars) for 
all applicants to be $6,365 per year, rounded (622 applicants x $40.93 
per hour x (15 minutes / 60 minutes) \25\).
---------------------------------------------------------------------------

    \25\ This figure is rounded to the nearest whole cent.
---------------------------------------------------------------------------

    Table 4 shows the estimated nominal cost over a 14-year period, 
including discounted and annualized figures. Because the policy letter 
became effective in 2020, table 4 shows the estimated costs for the 14-
year period covering 2020 through 2033.\26\ Table 4 shows the pre-
policy letter baseline, which is the 14-year period following the 
implementation of the policy letter. All dollar figures in table 4, as 
with all other tables in this Regulatory Analysis, are in 2023 dollars 
unless otherwise stated.
---------------------------------------------------------------------------

    \26\ It should be noted that for the 3 years (2020 through 2022, 
inclusively), we are implicitly applying our assumptions regarding 
the final rule's population numbers and costs for 2022 the years 
that follow. The same reasoning applies to analysis later in this RA 
on the 2020 through 2022 periods examined for Policy Letter 02-20.

                   Table 4--Labor Costs for Applicants Completing MMC Fee Waiver Documentation
                     [Policy Letter 02-20 impact, pre-policy letter implementation baseline]
----------------------------------------------------------------------------------------------------------------
   Table 4--Labor Costs to In-Scope Applicants of Completing MMC Fee Waiver Documentation (Policy Letter 02-20
                               Impact) (Pre-policy letter implementation baseline)
-----------------------------------------------------------------------------------------------------------------
                              Year                                    Nominal           3%              7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)...................................................          $6,365          $6,955          $7,797
Year 2 (2021)...................................................           6,365           6,752           7,287
Year 3 (2022)...................................................           6,365           6,556           7,797
Year 4 (2023)...................................................           6,365           6,365           6,365
Year 5 (2024)...................................................           6,365           6,179           5,948
Year 6 (2025)...................................................           6,365           5,999           5,559
Year 7 (2026)...................................................           6,365           5,825           5,195
Year 8 (2027)...................................................           6,365           5,655           4,856
Year 9 (2028)...................................................           6,365           5,490           4,538
Year 10 (2029)..................................................           6,365           5,330           4,241
Year 11 (2030)..................................................           6,365           5,175           3,964
Year 12 (2031)..................................................           6,365           5,024           3,704
Year 13 (2032)..................................................           6,365           4,878           3,462
Year 14 (2033)..................................................           6,365           4,736           3,235
                                                                 -----------------------------------------------
    Total.......................................................          89,105          80,919          73,948
        NPV of nominal stream...................................  ..............          71,895          55,662
        Annualized..............................................  ..............           6,365           6,365
----------------------------------------------------------------------------------------------------------------
Please note totals may not sum up exactly due to rounding.

(2) Labor Costs to the Coast Guard To Evaluate and Process 
Documentation Showing Eligibility for MMC Fee Waivers
    Just as there are labor costs for applicants to submit 
documentation, there are labor costs to the Coast Guard to evaluate and 
process the documentation showing eligibility for an MMC fee waiver. 
The NMC estimates that the time to process the typical documentation is 
10 minutes, or 0.17 hours (10 / 60). The processing is performed by 
personnel holding positions at the Government General Schedule (GS) pay 
scale of GS-07. According to Commandant Instruction 7310.1W,\27\ the 
hourly loaded rate for a GS-07 Coast Guard employee is

[[Page 63837]]

$50.00.\28\ This rate is in 2023 dollars. Thus, the labor cost to the 
Coast Guard to process the eligibility documentation is $8.50 (0.17 
hours x $50.00 per hour) per applicant (in 2023 dollars).
---------------------------------------------------------------------------

    \27\ This was the latest Commandant Instructions for 
Reimbursable Standard Rates available as of the time this final rule 
was written, January 15, 2024.
    \28\ Page two of enclosure 2 to Commandant Instruction 7310.1W 
(https://media.defense.gov/2022/Aug/24/2003063079/-1/-1/0/CI_7310_1W.PDF) (last visited 4/9/2024).
---------------------------------------------------------------------------

    As stated previously, the Coast Guard assumes 622 applicants will 
receive a MMC fee waiver each year. Given this, the Coast Guard 
predicts it will spend $5,287 per year to evaluate and process 
documentation provided by applicants showing eligibility for fee 
waivers (622 x $8.50 = $5,287, rounded to the nearest whole dollar). 
The Coast Guard estimates the aggregate 14-year cost to the Government 
is $60,608, with an annualized figure of $5,287, discounted at 7 
percent. Table 5 provides the labor costs by year.

                 Table 5--Labor Costs to Coast Guard To Evaluate Eligibility for MMC Fee Waiver
                     [Policy Letter 02-20 impact, pre-policy letter implementation baseline]
----------------------------------------------------------------------------------------------------------------
                              Year                                    Nominal           3%              7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)...................................................          $5,287          $5,777          $6,477
Year 2 (2021)...................................................           5,287           5,609           6,053
Year 3 (2022)...................................................           5,287           5,446           5,657
Year 4 (2023)...................................................           5,287           5,287           5,287
Year 5 (2024)...................................................           5,287           5,133           4,941
Year 6 (2025)...................................................           5,287           4,984           4,618
Year 7 (2026)...................................................           5,287           4,838           4,316
Year 8 (2027)...................................................           5,287           4,697           4,033
Year 9 (2028)...................................................           5,287           4,561           3,770
Year 10 (2029)..................................................           5,287           4,428           3,523
Year 11 (2030)..................................................           5,287           4,299           3,292
Year 12 (2031)..................................................           5,287           4,174           3,077
Year 13 (2032)..................................................           5,287           4,052           2,876
Year 14 (2033)..................................................           5,287           3,934           2,688
                                                                 -----------------------------------------------
    Total.......................................................          74,018          67,218          60,608
        Annualized..............................................  ..............           5,287           5,287
----------------------------------------------------------------------------------------------------------------
Please note totals may not sum due to rounding.


(3) Aggregated Labor Costs for Applicants and the Coast Guard 
Associated With Documentation of Eligibility for an MMC Fee Waiver

    The Coast Guard estimates the total costs related to the 
documentation of eligibility for applicants and the Coast Guard shown 
in tables 4 and 5 for the 14-year period following the implementation 
of the policy letter in table 6. The estimated total costs to evaluate 
and process the documentation for applicants and the Coast Guard for 
the 14-year period is $133,569, with an annualized cost of $11,652, 
discounted at 7 percent.

 Table 6--Total Costs to Applicants and Coast Guard To Evaluate and Process Documentation of Eligibility for MMC
                                                   Fee Waiver
                     [Policy Letter 02-20 impact, pre-policy letter implementation baseline]
----------------------------------------------------------------------------------------------------------------
                              Year                                    Nominal           3%              7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)...................................................         $11,652         $12,732         $14,274
Year 2 (2021)...................................................          11,652          12,361          13,340
Year 3 (2022)...................................................          11,652          12,001          12,467
Year 4 (2023)...................................................          11,652          11,652          11,652
Year 5 (2024)...................................................          11,652          11,312          10,889
Year 6 (2025)...................................................          11,652          10,983          10,177
Year 7 (2026)...................................................          11,652          10,663           9,511
Year 8 (2027)...................................................          11,652          10,352           8,889
Year 9 (2028)...................................................          11,652          10,051           8,307
Year 10 (2029)..................................................          11,652           9,758           7,764
Year 11 (2030)..................................................          11,652           9,474           7,256
Year 12 (2031)..................................................          11,652           9,198           6,781
Year 13 (2032)..................................................          11,652           8,930           6,338
Year 14 (2033)..................................................          11,652           8,670           5,923
                                                                 -----------------------------------------------
    Total.......................................................         163,123         148,137         133,569
        NPV of nominal stream...................................  ..............         131,617         101,899
        Annualized..............................................  ..............          11,652          11,652
----------------------------------------------------------------------------------------------------------------
Please note totals may not sum due to rounding.


[[Page 63838]]

(4) Eliminating Transfer Payments to Federal Government of Providing 
MMC Fee Waivers
    Before the Coast Guard implemented Policy Letter 02-20, applicants 
had to pay evaluation, examination, and issuance fees to obtain an 
MMC.\29\ Implementing the policy letter eliminated this requirement for 
applicants eligible for a fee waiver. No longer requiring applicants to 
pay MMC fees represents a loss of revenue to the Federal Government and 
an equal gain to eligible MMC applicants. This is referred to as a 
transfer payment. For those MMC fees that were eliminated by the policy 
letter, the Federal Government will face a shortfall in revenues. The 
revenues from those fees will need to be made up through alternative 
means (for example, increased taxes, new or increased fees for other 
services, or similar sources of revenue or in some other manner). Thus, 
there will be no net social benefit or cost with respect to transfer 
payments.
---------------------------------------------------------------------------

    \29\ Listed in table 3 of this RA.
---------------------------------------------------------------------------

    As stated previously, the average annual number of uniformed 
service members who received a waiver of MMC fees between 2020 and 2022 
(inclusively) was 622. The estimated average fee associated with the 
applications for these MMCs was $159 each (in 2023 dollars).\30\
---------------------------------------------------------------------------

    \30\ This number is rounded to the closest whole number. The 
number can be found in table 3 of this RA.
---------------------------------------------------------------------------

    For this population, the cost was $98,898 per year in nominal terms 
(622 x $159.00 = $98,898). Thus, for the 14 years after the 
implementation of the policy letter, the Coast Guard estimates transfer 
payments will total $1,133,720, with an annualized amount of $98,898, 
discounted at 7 percent. These estimates can be seen in table 7.

                                     Table 7--Transfer Payments--Eliminated
                     [Policy Letter 02-20 impact, pre-policy letter implementation baseline]
----------------------------------------------------------------------------------------------------------------
                              Year                                    Nominal           3%              7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)...................................................         $98,898        $108,069        $121,154
Year 2 (2021)...................................................          98,898         104,921         113,228
Year 3 (2022)...................................................          98,898         101,865         105,821
Year 4 (2023)...................................................          98,898          98,898          98,898
Year 5 (2024)...................................................          98,898          96,017          92,428
Year 6 (2025)...................................................          98,898          93,221          86,381
Year 7 (2026)...................................................          98,898          90,506          80,730
Year 8 (2027)...................................................          98,898          87,870          75,449
Year 9 (2028)...................................................          98,898          85,310          70,513
Year 10 (2029)..................................................          98,898          82,826          65,900
Year 11 (2030)..................................................          98,898          80,413          61,589
Year 12 (2031)..................................................          98,898          78,071          57,560
Year 13 (2032)..................................................          98,898          75,797          53,794
Year 14 (2033)..................................................          98,898          73,589          50,275
                                                                 -----------------------------------------------
    Total.......................................................       1,384,572       1,257,372       1,133,720
        NPV of nominal stream...................................  ..............       1,117,159         864,909
        Annualized..............................................  ..............          98,898          98,898
----------------------------------------------------------------------------------------------------------------
Please note totals may not sum due to rounding.

Benefits of Policy Letter 02-20
    The Coast Guard has identified one qualitative benefit of Policy 
Letter 02-20 stemming from the elimination of the MMC fees referred to 
in Executive Order 13860. The fee waiver may provide eligible uniformed 
service members greater flexibility with respect to pursuing careers 
after leaving the uniformed services.
Part II. Final Rule
    This final rule codifies Policy Letter 02-20 in terms of required 
actions.\31\ In addition, it covers only a subset of the affected 
population of the policy letter. This final rule covers only the 
Selected Reserves and Ready Reserves of the uniformed services while 
the policy letter covered all current members of the reserves of the 
uniformed services and National Guard who were on active duty in the 
past. As a result, this final rule covers a smaller portion of the 
affected population than the policy letter. However, as discussed 
previously, there is no available data to accurately estimate this 
difference. The reason there is no available data is because the NMC 
only collects data on those receiving the NMC fee exemptions and does 
so on an aggregate basis. The NMC does not collect more detailed data 
such as what branch they are in or whether they are in the reserve. Due 
to the smaller number of eligible applicants, the Coast Guard surmises 
that when compared to the policy letter, this final rule will result in 
a small cost savings to the applicant and the Coast Guard for no longer 
needing to provide and review the documentation for the fee waiver.
---------------------------------------------------------------------------

    \31\ This is as opposed to the final rule population. The issues 
regarding the final rule population are discussed below.
---------------------------------------------------------------------------

    The following cost analysis discusses the impact of the difference 
in the reservist populations on the number of MMC applications. 
However, due to a lack of data, it is not possible to quantify the cost 
difference.
Affected Population for Final Rule
    As this final rule covers a narrower definition of reservists than 
Policy Letter 02-20, it will cover fewer than 622 persons per year. Due 
to a lack of data, the Coast Guard assumes that, for this final rule, 
the number of applicants for MMC exemptions is 622.
Cost Analysis for Final Rule
    This final rule involves a narrower population than Policy Letter 
02-20, as the Policy Letter covered current, and previously serving, 
members of the reserves of the uniformed services and National Guard 
while this final rule covers only those who are currently on active 
duty or are members of the Selected Reserve or Ready Reserve. The final 
rule, unlike the Policy Letter, does not include those who were on 
active duty in the past. As the Coast Guard does not have data on the 
differences between the two populations, and

[[Page 63839]]

therefore cannot quantify the difference, it assumes that the reduction 
in the number of waivers from the policy letter and exemptions from 
this final rule is zero.\32\
---------------------------------------------------------------------------

    \32\ For a more detailed discussion of the cost difference 
discussions between this final rule and the policy letter in the 
``Cost and Transfer Impacts of Cost Analysis of Policy Letter 02-
20'' section of the RA.
---------------------------------------------------------------------------

    If the number of applicants seeking exemptions under this final 
rule is fewer than the number of waivers under the policy letter, there 
will be a decrease in the costs of this final rule when compared to the 
costs of the policy letter. For every applicant that does not seek an 
exemption under this final rule (as opposed to a waiver under the 
policy letter), this final rule will result in a cost savings of $10.24 
per applicant related to providing the necessary documentation, and a 
cost savings of $8.50 per applicant for the Coast Guard, related to 
reviewing that documentation. If this final rule results in any 
decrease in the number of individuals seeking an exemption from MMC 
fees, the amount will be $159 (rounded to the closest dollar) per 
applicant (the average MMC fee paid by an applicant).
    As stated previously, this final rule codifies an already existing 
policy letter. The only difference between the policy letter and this 
final rule is that this final rule does not cover a subset of the 
reserve forces that the policy letter covers. Due to a lack of data 
regarding this potential difference, it is not possible to estimate 
differences in costs or benefits. The lack of data also makes it 
impossible to even determine whether there actually is a difference in 
populations between this final rule and the policy letter. If there is 
a difference between the policy letter and this final rule in 
populations, the costs and cost savings differences will amount to the 
figures cited in the previous paragraph on a per individual basis.
Benefits of the Final Rule
    The Coast Guard believes that updating regulations in the CFR with 
this final rule may reduce the burden on the affected population by 
increasing efficiency and transparency, as opposed to remaining a 
standalone policy letter.\33\
---------------------------------------------------------------------------

    \33\ This final rule also incorporates greater flexibility with 
respect to pursuing careers. As this has already been achieved by 
issuing the policy letter, independent of this final rule, we list 
only the increased clarity and transparency that would be obtained 
through codifying the Coast Guard's policy for exempting MMC fees 
through this final rule.
---------------------------------------------------------------------------

Regulatory Alternatives Considered
    In developing this final rule, the Coast Guard considered three 
alternatives to the exemption (fourth alternative).
    The first alternative was the exemption of the MMC fees listed in 
table 1 to Sec.  10.219(a) in 46 CFR 10.219(a), as shown in table 3 of 
this final rule. Because this alternative would not fulfill the 
requirements of Executive Order 13860 or the NDAA 2020, the Coast Guard 
rejected this alternative.
    The second alternative was to make no change to the user fee 
schedule for members of the uniformed services, but to establish 
program to reimburse MMC fees for uniformed service members. Under this 
alternative, the population applying for MMCs would initially pay MMC 
fees and then file a request for reimbursement with their service in 
order to be compensated for the cost. However, the process to reimburse 
fees would be a greater burden than this final rule's framework for 
eligible applicants, who would pay MMC fees out of pocket and then 
request compensation through their service. Filing a request for 
reimbursement would also increase the amount of documentation 
applicants would be required to file and would add an administrative 
burden to the services in establishing and implementing reimbursement 
programs. The Coast Guard rejected this alternative.
    The third alternative was to extend the exemption only to the 
portion of the population consisting of members of the Selected Reserve 
of the Ready Reserve of any of the armed forces (Army National Guard of 
the United States, Army Reserve, Navy Reserve, Marine Corps Reserve, 
Air National Guard of the United States, Air Force Reserve and Coast 
Guard Reserve), and the Ready Reserve Corps of the USPHS who are on 
``active duty,'' \34\ while excluding those simply in an ``active 
status.'' \35\ The Coast Guard rejected this alternative because it 
does not best support the intent of Executive Order 13860 and the NDAA 
2020 to help attract active duty service members to obtain an MMC, and 
provide meaningful, well-paying jobs to U.S. veterans in support of 
U.S. national security requirements.
---------------------------------------------------------------------------

    \34\ Active duty is defined here as under 10 U.S.C. 101(d)(1). 
Under that section it means ``full-time duty in the active military 
service of the United States. Such term includes full-time training 
duty, annual training duty, and attendance, while in the active 
military service, at a school designated as a service school by law 
or by the Secretary of the military department concerned. Such term 
does not include full-time National Guard duty.''
    \35\ All members of the Ready Reserve are in active status. 
Selected Reserves are only part of that group. Individual ready 
reserves are also active status.
---------------------------------------------------------------------------

    The Coast Guard believes that the intent of Executive Order 13860 
and NDAA 2020 is best supported through a fourth alternative--extending 
the eligibility for MMC fee exemptions to members of the Selected 
Reserve of the Reserves of the Army, Navy, Air Force, Marines, Coast 
Guard and Space Force (such as Selected and Ready Reservists), and not 
limiting eligibility to only members of the uniformed services on 
active duty. This alternative best supports the intent of Executive 
Order 13860 and the NDAA 2020 by ensuring a wide range of service 
members who wish to pursue an MMC are provided support and by expanding 
the population eligible to receive an exemption from MMC fees. The 
Coast Guard believes this alternative will result in a larger number of 
credentialed mariners available to support U.S national security 
requirements and provide meaningful, well-paying jobs to U.S. veterans.

B. Small Entities

    Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, the Coast 
Guard has considered whether this final rule has a significant economic 
impact on a substantial number of small entities. The term ``small 
entities'' comprises small businesses, not-for-profit organizations 
that are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with populations of less than 
50,000.
    This final rule codifies certain actions taken in the previously 
implemented Policy Letter 02-20. Therefore, this final rule exempts 
fees for the evaluation of an MMC application, the administration of a 
required examination, and the issuance of an MMC for members of the 
uniformed services. Since the impacts discussed above in the RA affect 
individuals and not business (firms), not-for-profit organizations, and 
State or Local governmental jurisdictions, this final rule will not 
impact small entities as defined by the Small Business Administration 
in 13 CFR 121.201. Based on this analysis, this final rule will not 
affect a substantial number of small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996, Public Law 104-121, the Coast Guard wants to 
assist small entities in understanding this final rule so that they can 
better evaluate its effects on them and participate in the rulemaking. 
The Coast

[[Page 63840]]

Guard will not retaliate against small entities that question or 
complain about this final rule or any policy or action of the Coast 
Guard.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

D. Collection of Information

    This final rule codifies actions taken under the previously 
implemented Policy Letter 02-20, therefore, this final rule calls for a 
change to an existing collection of information under the Paperwork 
Reduction Act of 1995, 44 U.S.C. 3501-3520. As defined in 5 CFR 
1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other similar 
actions. The title and description of the information collections, a 
description of those who must collect the information, and an estimate 
of the total annual burden, follow. The estimate covers the time for 
reviewing instructions, searching existing sources of data, gathering 
and maintaining the data needed, and completing and reviewing the 
collection.
    The information collection associated with this final rule is the 
currently approved collection, OMB Control Number 1625-0040, 
``Applications for Merchant Mariner Credentials and Medical 
Certificates.'' In order to process the fee exemptions in this final 
rule, the Coast Guard will require eligible applicants for an MMC to 
provide documentation of their eligibility for a fee exemption.\36\ In 
addition, it will require the NMC to evaluate and process this 
documentation part of an evaluation for an MMC.
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    \36\ In order to provide maximum flexibility to applicants, the 
Coast Guard is planning to issue updated guidance on the acceptable 
forms of documentation for this final rule after this final rule is 
published.
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    reTitle: Applications for Merchant Mariner Credentials and Medical 
Certificates.
    OMB Control Number: 1625-0040
    Summary of the Collection of Information: The Coast Guard currently 
collects information from individuals seeking to obtain an MMC, renew 
an MMC, and obtain a merchant mariner medical certificate. The final 
rule requires applicants who are members of the uniformed services (622 
applicants per year), and who sought a waiver of MMC fees, to provide 
documentation of eligibility for the MMC fee waiver as part of an MMC 
application (form CG-719B).
    Need for Information: Title 46 CFR, section 10.217(a), requires MMC 
applicants to apply at one of the Coast Guard's 17 Regional Exam 
Centers, located nationwide or any other location designated by the 
Coast Guard. The Coast Guard is responsible for issuing MMCs to 
applicants within the qualifying age, character, and habits of life, 
experience, professional qualifications, and physical fitness. The 
instruments contained within OMB Control No. 1625-0040 serve as a means 
for the applicant to apply for an MMC and a merchant mariner medical 
certificate.
    Use of Information: The Coast Guard conducts this collection of 
information solely for the purposes of determining eligibility for 
issuance of an MMC in accordance with applicable statutes and 
regulations. The Coast Guard evaluates the collected information to 
determine whether applicants are qualified to serve under the authority 
of the requested credential with respect to their professional 
qualifications and suitability.
    Description of the Respondents: All applicants for an MMC, whether 
original, renewal, duplicate, raise of grade, or to add a new 
endorsement on a previously issued MMC, are included in this 
collection. The respondent population includes the number of uniformed 
service members applying for MMCs who receive a waiver of MMC fees (622 
applicants annually).
    Number of Respondents: The currently approved number of respondents 
is 310,604.\37\ This final rule will add an additional 622 respondents 
per year.
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    \37\ This is the latest Collection of Information, OMB control 
number 1625-0040, dated April 14, 2023. This was the latest 
Collection of Information available as of the time the Regulatory 
Analysis for this final rule was written.
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    Frequency of Response: The frequency of response is once per 
year.\38\
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    \38\ Please note there 622 applicants are expected every year. 
We are not implying that each individual applicant will be applying 
every year.
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    Burden of Response: The collection of information from this final 
rule requires the population to spend 15 minutes (0.25 hours) to 
provide evidence of eligibility for an MMC fee exemption.
    Estimate of Total Annual Burden: The current collection of 
information estimates the total number of respondent's hours at 62,004. 
The Coast Guard estimates this final rule will increase the annual 
burden by 156 (0.25 x 622 = 155.5, rounded up to nearest whole number) 
hours. Hence this final rule is expected to result in a new total 
burden hour total of 62,160.\39\
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    \39\ 62,004 + 156 = 62,160.
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    As required by 44 U.S.C. 3507(d), we will submit a copy of this 
final rule to OMB for its review of the collection of information.
    You need not respond to a collection of information unless it 
displays a currently valid control number from OMB. Before the Coast 
Guard can enforce the collection of information requirements in this 
final rule, OMB will need to approve the Coast Guard's request to 
collect this information.

E. Federalism

    A rule has implications for federalism under Executive Order 13132 
(Federalism) if it has a substantial direct effect on States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. We have analyzed this final rule under Executive Order 
13132 and have determined that it is consistent with the fundamental 
federalism principles and preemption requirements described in 
Executive Order 13132. Our analysis follows.
    It is well settled that States may not regulate in categories 
reserved for regulation by the Coast Guard. It is also well settled 
that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 
8101 (design, construction, alteration, repair, maintenance, operation, 
equipping, personnel qualification, and manning of vessels), as well as 
the reporting of casualties and any other category in which Congress 
intended the Coast Guard to be the sole source of a vessel's 
obligations, are within the field foreclosed from regulation by the 
States. See the Supreme Court's decision in United States v. Locke, 529 
U.S. 89, 529 U.S. 89, 120 S.Ct. 1135 (2000). Therefore, because the 
States may not regulate within these categories, this final rule is 
consistent with the fundamental federalism principles and preemption 
requirements described in Executive Order 13132.

F. Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions

[[Page 63841]]

that may result in the expenditure by a State, local, or tribal 
government, in the aggregate, or by the private sector of $100 million 
(adjusted for inflation) or more in any one year. Although this final 
rule will not result in such an expenditure, we do discuss the 
potential effects of this final rule elsewhere in this preamble.

G. Taking of Private Property

    This final rule will not cause a taking of private property or 
otherwise have taking implications under Executive Order 12630 
(Governmental Actions and Interference with Constitutionally Protected 
Property Rights).

H. Civil Justice Reform

    This final rule meets applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988 (Civil Justice Reform) to minimize 
litigation, eliminate ambiguity, and reduce burden.

I. Protection of Children

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

J. Indian Tribal Governments

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

K. Energy Effects

    We have analyzed this final rule under Executive Order 13211 
(Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use). We have determined that it is not a 
significant energy action under this order because it is not a 
significant regulatory action under Executive Order 12866 and therefore 
unlikely to have a significant adverse effect on the supply, 
distribution, or use of energy.

L. Technical Standards

    The National Technology Transfer and Advancement Act, codified as a 
note to 15 U.S.C. 272, directs agencies to use voluntary consensus 
standards in their regulatory activities unless the agency provides 
Congress, through OMB, with an explanation of why the use of these 
standards would be inconsistent with applicable law or otherwise 
impractical. Voluntary consensus standards are technical standards (for 
example, specifications of materials, performance, design, or 
operation; test methods; sampling procedures; and related management 
systems practices) that are developed or adopted by voluntary consensus 
standards bodies.
    This final rule does not use technical standards. Therefore, we did 
not consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this final rule under DHS Management Directive 
023-01, Rev. 1, associated implementing instructions, and Environmental 
Planning COMDTINST 5090.1 (series), which guide the Coast Guard in 
complying with the National Environmental Policy Act of 1969 (42 U.S.C. 
4321-4370f), and have determined that this action falls under a 
category of actions that do not individually or cumulatively have a 
significant effect on the human environment. A Record of Environmental 
Consideration supporting this determination is available in the docket. 
For instructions on locating the docket, see the ADDRESSES section of 
this preamble. This final rule is categorically excluded under 
paragraphs L54 and L56 of Appendix A, table 1 of DHS Instruction Manual 
023-01-001-01, Rev. 1. The categorical exclusion (CATEX) L54 pertains 
to regulations that are editorial or procedural, and CATEX L56 pertains 
to regulations concerning training, qualifying, licensing, and 
disciplining maritime personnel.
    This final rule involves the fees for MMCs and associated 
endorsements.

List of Subjects in 46 CFR Part 10

    Penalties, Personally identifiable information, Reporting and 
recordkeeping requirements, Seafarers.

    For the reasons discussed in the preamble, the Coast Guard amends 
46 CFR part 10 as follows:

PART 10--MERCHANT MARINER CREDENTIAL

0
1. The authority citation for part 10 is revised to read as follows:

    Authority:  14 U.S.C. 503; 31 U.S.C. 9701; 46 U.S.C. 2101, 2103, 
2104, 2110; 46 U.S.C. chapters 71, 73, and 75; 46 U.S.C. 7701, 8903, 
8904, and 70105; Executive Order 10173; DHS Delegation No. 00170.1, 
Revision No. 01.4.


0
2. Amend Sec.  10.219 by adding paragraph (m) to read as follows:


Sec.  10.219  Fees.

* * * * *
    (m) For members of the uniformed services, a qualified applicant 
under this section is exempt from paying evaluation, examination, or 
issuance fees for an MMC as described in paragraph (b)(2) of this 
section.
    (1) For purposes of paragraph (m) of this section, qualified 
applicant means an individual who, at the time of submission of an 
application, is--
    (i) A member of the uniformed services listed in 10 U.S.C. 
101(a)(5) on active duty;
    (ii) A member of the Selected Reserve, as described in 10 U.S.C. 
10143(a), of a reserve component named in 10 U.S.C. 10101; or
    (iii) A member of the Ready Reserve Corps of the Public Health 
Service established in 42 U.S.C. 204(a)(1).
    (2) For purposes of paragraph (m)(1)(i) of this section--
    (i) For the members of the armed forces, as defined in 10 U.S.C. 
101(a)(4), active duty is defined by 10 U.S.C. 101(d)(1);
    (ii) For the commissioned corps of the National Oceanic and 
Atmospheric Administration, active duty has the same meaning as found 
in 33 U.S.C. 3002(b)(1); and
    (iii) For the members of the commissioned corps of the Public 
Health Service, active duty has the meaning defined in 42 CFR 21.72(f).

    Dated: July 29, 2024.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard Assistant Commandant for Prevention 
Policy.
[FR Doc. 2024-17061 Filed 8-5-24; 8:45 am]
BILLING CODE 9110-04-P