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Administrative Waivers of the Coastwise Trade Laws for Eligible Vessels
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: February 11, 2000 (Volume 65, Number 29)]
[Rules and Regulations]
[Page 6905-6912]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11fe00-11]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 388
[Docket No. MARAD-1999-5915]
RIN 2133-AB39
Administrative Waivers of the Coastwise Trade Laws for Eligible
Vessels
AGENCY: Maritime Administration, Department of Transportation.
ACTION: Final rule.
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SUMMARY: The Maritime Administration (MARAD, we, our, or us) is
publishing this final rule to implement Title V of the Coast Guard
Authorization Act of 1998. This final rule implements regulations that,
under certain circumstances, will waive the U.S.-build and other
requirements of the Passenger Services Act and section 27 of the
Merchant Marine Act, 1920, for eligible vessels to be documented with
appropriate endorsement for employment in the coastwise trade as small
passenger vessels or uninspected passenger vessels authorized to carry
no more than 12 passengers for hire. This administrative process will
improve the responsiveness of the Federal Government in meeting the
needs of many vessel-operating small businesses.
DATES: The effective date of the final rule is February 11, 2000.
FOR FURTHER INFORMATION CONTACT: You may call Michael Hokana, Office of
Ports and Domestic Shipping, Maritime Administration, at (202) 366-
0760, or you may write to him at the following address: Maritime
Administration, MAR-832, Room 7201, 400 Seventh Street, SW, Washington,
DC 20590.
SUPPLEMENTARY INFORMATION: Title V of the Coast Guard Authorization Act
of 1998 authorizes the Secretary of Transportation to grant waivers of
certain requirements for the smallest of passenger vessels (those
carrying 12 or fewer passengers) to operate in the coastwise trade. In
order to carry out the provisions of the law, MARAD developed a
procedure (i.e., this rule) for: accepting applications from the
public, providing public notice of the intent to issue waivers to
foreign built vessels for use in the coastwise passenger trade, a set
of criteria to test the merits of the applications, a decision process,
and a review and revocation process. The application process requires a
$300 non-refundable fee, an ``adverse affect'' assessment on the U.S.-
flag shipping and vessel building community, and a requirement that the
vessel must meet U.S. Coast Guard documentation standards. After the
decision process is completed and the waiver is approved, MARAD will
issue a waiver document that becomes a permanent part of the vessel's
coastwise endorsement. The document will set limits on the vessel's
geographic use and will require MARAD's prior approval for all
significant changes in the vessel's operation. With regard to overall
processing, MARAD has also prepared a revocation procedure for use if
necessary and a review process where the Maritime Administrator may
review the waiver granting and revocation decisions of the MARAD staff.
One portion of the law requires public notice prior to rulemaking.
Accordingly, on July 8, 1999 MARAD published a 60-day notice in the
Federal Register (64
[[Page 6906]]
FR 36831) soliciting comments on a proposed rule and information
collection to administer a program implementing the above law. In
response to our notice, we received three letters expressing opinions
and recommending changes. MARAD has considered these comments and has
made changes to the regulation as necessary. The comments and our
responses follow.
MARAD, at its own initiative, made several changes to the proposed
text. None of these changes are substantive. By way of examples:
definitions of ``Administrator'' and ``MARAD'' are added to reduce the
length of the regulation (Sec. 388.2); the wording of the Act is
followed more closely, such as ``certification'' being replaced with
``certificate of documentation with appropriate endorsement'' (Sec.
388.2 (c) (2)); corrections are made, as in making singular
``Applications; fees'' (Sec. 388.3 Title) and ``origins'' (Sec. 388.3
(a) (4)); changed the organization that the check should be made out to
(Sec. 388.3 (c)); and the wording ``vessel builders'' has been used
instead of ``shipbuilders'' in several places.
Comments on the Proposed Rule
``3 Mates' MIMI Connection Inc.''
The first letter, from ``3 Mates'' MIMI Connection Inc.'', was an
affirmation that MARAD was serving all interests. No further action on
the part of MARAD is required with regard to this input.
Classic Sailing Adventures
The second letter, from the president of Classic Sailing
Adventures, contained three recommendations. In summary, the
recommendations were that MARAD: (1) Should not place geographic
restrictions on where a waived vessel can operate; (2) should eliminate
the ``adverse assessment'' consideration on U.S.-flag industries, and,
(3) should not require an application fee. MARAD's response is that
because of the requirements of the law, and previously enacted
legislation, we will not implement any of these recommendations. The
reasons for keeping these provisions in the regulation are threefold.
The geographic restriction allows MARAD to more closely focus on who
might be affected by a waiver. To eliminate the ``adverse affect''
assessment on U.S. operators and shipbuilders would violate enabling
legislation, which specifically requires an ``adverse affect''
determination. Lastly, the application fee is necessary to recoup
estimated direct costs incurred in the processing of each application
as required by law.
Passenger Vessel Association
The third letter, containing 20 specific recommendations, was
received from the Passenger Vessel Association (PVA), which represents
U.S.-flag passenger vessel owners, operators and builders. In order to
present the recommendations and MARAD's decisions in a clear and
concise manner, we have set up our response in the following format:
Each recommendation is provided a number, followed by the section
where the rule has been (or might have been) changed. ``Proposed''
means the text as originally proposed in MARAD's notice of proposed
rulemaking. ``Recommendation'' means the recommendation of the
Passenger Vessel Association, and ``Decision'' is the action taken by
MARAD. Specific word changes are underlined in the recommendation for
clarity.
1. Section 388.2 Definitions
Proposed: In paragraph (2) of the definition of eligible vessel
``If rebuilt, was rebuilt outside of the United States at least 3 years
before the certificate of documentation with appropriate endorsement
would become effective.''
Recommendation: The PVA requests the inclusion of ``if granted'' in
the sentence: ``If rebuilt, was rebuilt outside of the United States at
least 3 years before the certificate of documentation with appropriate
endorsement, if granted, would become effective.'' The words ``if
granted'' ensure applicants know that waivers are not guaranteed.
Decision: MARAD accepts the requested recommendation.
2. Section 388.3 Application; Fee
Proposed: In paragraph (a) ``(a) You may apply in writing to the
Secretary, Maritime Administration* * *''
Recommendation: Change ``You'' in paragraph (a) to read: ``(a) An
owner of a vessel may apply in writing to the Secretary, Maritime
Administration* * *''
The recommendation would insert the new words ``an owner of a
vessel'' in place of the word ``you'' in order to ensure only vessel
owners apply for waivers. The PVA could not see any other rationale for
a person other than an owner applying for a waiver.
Decision: MARAD accepts the requested recommendation.
3. Section 388.3 Application; Fee
Proposed: Paragraph (a), question number (5) on the application:
``Name, address, and telephone number of the applicant and vessel owner
if different from the applicant.''
Recommendation: Change paragraph (a), question number (5) on the
application to read: ``Name, address, and telephone number of the
vessel owner.''
The recommendation would delete the words ``applicant'' and
``vessel owner if different than applicant'' in order to accept
applications only from owners.
Decision: MARAD accepts the recommendation.
4. Section 388.3 Application; Fee
Proposed: This requirement was not covered in the proposed rule.
Recommendation: The PVA recommends a new requirement to the waiver
application that would read as a new question (8):
(8) A statement explaining the duration of the applicant's
ownership of the vessel, his cost of purchasing or otherwise
obtaining the vessel, the person or source from whom he obtained the
vessel, and the uses to which he has put the vessel since obtaining
it.
The PVA justifies this requirement as better enabling the
government to determine if the waiver will have an effect on an
industry.
Decision: MARAD believes this question to be intrusive and
unnecessary to carry out MARAD's responsibilities and does not accept
the change recommendation.
5. Section 388.4 Criteria for Grant of a Waiver
Proposed: In paragraph (a) General criteria:
(1) A waiver of the foreign build and/or foreign rebuild
prohibition in the coastwise trade laws will be granted for an
eligible vessel if we determine that the employment of the vessel in
the coastwise trade will not unduly adversely affect--
(i) United States vessel builders; or
(ii) The coastwise trade business of any person who employs
vessels built in the United States in that business.
Recommendation: It is recommended that the words ``only if'' be
inserted in paragraph (a) General criteria, (1):
(1) A waiver of the foreign build and/or foreign rebuild
prohibition in the coastwise trade laws will be granted for an
eligible vessel only if we determine that the employment of the
vessel in the coastwise trade will not unduly adversely affect--
(i) United States vessel builders; or
(ii) The coastwise trade business of any person who employs
vessels built in the United States in that business.
The PVA would like to ensure that MARAD would interpret the two
industry areas of consideration for adverse impact separately such that
an adverse impact on operators or vessel builders would be seen to be
an adverse impact subject to rejection.
[[Page 6907]]
Decision: MARAD agrees with this logic and will follow this
interpretation. The words ``only if'' are added in the final rule.
6. Section 388.4 Criteria for Grant of a Waiver
Proposed: In paragraph (a) General criteria, (1):
(1) A waiver of the foreign build and/or foreign rebuild
prohibition in the coastwise trade laws will be granted for an
eligible vessel only if we determine that the employment of the
vessel in the coastwise trade will not unduly adversely affect--
(i) United States vessel builders; or
(ii) The coastwise trade business of any person who employs
vessels built in the United States in that business.
Recommendation: In paragraph (a) General criteria, (1) The PVA
recommends the deletion of the word unduly from the phrase as this sets
too high of a standard for adverse impact.
Decision: MARAD believes that to remove the word ``unduly'' would
require the rejection of a waiver request for the smallest and most
frivolous of adverse conditions. The recommendation is not accepted.
7. Section 388.4 Criteria for Grant of a Waiver
Proposed: This issue was not covered in the proposed rule.
Recommendation: At the end of paragraph (a) General criteria (1),
the PVA requests the following statement be inserted to allow larger
passenger cruise vessel operators to claim adverse affect.
The determination of unduly adverse affect on a coastwise
operator or a U.S. shipbuilder should not be limited to operators or
builders of vessels carrying 12 or fewer passengers.
Decision: MARAD will use the following sentence instead:
We may not limit the determination of `unduly adverse affect' on
a coastwise operator or an U.S. vessel builder to operators or
builders of vessels carrying 12 or fewer passengers.
This is a reasonable recommendation, as it will allow MARAD to
gauge impact on U.S.-flag vessels of all sizes. MARAD accepts the
recommendation with the changed language.
8. Section 388.4 Criteria for Grant of a Waiver
Proposed: In paragraph (a) General criteria, (2) ``We may evaluate
the expected impact of the proposed waiver on the basis of information
received from all sources, including public comment, internal
investigation and analysis, and any other sources of information deemed
appropriate.''
Recommendation: In paragraph (a) General criteria, (2) The PVA
recommends that the word ``may'' be replaced with the word ``will'' in
the sentence; and that the evaluation will take into account ``all''
the information received from all sources.
We will evaluate the expected impact of the proposed waiver on
the basis of all the information received * * *
Decision: MARAD accepts the premise and changes the wording from
``may'' to ``will'' and from ``and'' to ``or'' in order to maintain
flexibility as to the information needed to make a decision.
We will evaluate the expected impact of the proposed waiver on
the basis of all the information received from all sources,
including public comment, internal investigation and analysis, or
any other sources of information deemed appropriate.
9. Section 388.4 Criteria for Grant of a Waiver
Proposed: In paragraph (b) Impact on U.S. vessel builders:
We may use the following criteria to determine the effect on
U.S. vessel builders.
Recommendation: The recommended change is to delete the word
``may'' and replace it with the word ``will'' in the sentence:
We will use the following criteria to determine the effect on
U.S. vessel builders.
Decision: MARAD prefers to maintain the flexibility that ``may''
provides in as much as there may need to be more than one criteria
weighed in making a decision.
10. Section 388.4 Criteria for Grant of a Waiver
Proposed: In paragraph (c) Impact on coastwise trade operators:
We may use the following criteria to determine the effect on
existing operators of U.S.-built vessels in coastwise trade:
(1) Whether the proposed vessel of the applicant and the
vessel(s) of an existing operator(s) (or the vessel(s) of an
operator that can demonstrate it has taken definite steps to begin
operation):
(i) Are of similar size;
(ii) Are of similar characteristics;
(iii) Would provide similar commercial service; and
(iv) Would operate in the same geographic area.
Recommendation: In paragraph (c) Impact on coastwise trade
operators, the PVA commented that the original phrasing was too narrow.
MARAD's original phrasing would not allow a vessel owner to claim
adverse effect if the U.S.-built vessel was a different size, although
employed in similar commercial service as a foreign proposed vessel.
Decision: MARAD agrees with the premise of the comment and has
changed the final rule to read:
We may use the following criteria to determine the effect on
existing operators of U.S.-built vessels in coastwise trade:
(1) Whether the proposed vessel of the applicant and a vessel of
an existing operator (or the vessel of an operator that can
demonstrate it has taken definite steps to begin operation) would
provide similar commercial service and would operate in the same
geographic area.
This new language eliminates the previous criterion that in order
to be adversely affected, the impacted vessel must be of similar size
and similar characteristics.
11. Section 388.4 Criteria for Grant of a Waiver
Proposed: This issue was not covered in the proposed rule.
Recommendation: PVA proposes a new paragraph (d) as follows:
(d) Advance notice and approval needed for changes.
When we approve a waiver application, we will notify the
applicant that no substantial change in the employment of the vessel
in the coastwise trade may be made without prior notice to MARAD.
Failure to provide advance notice of a proposed change in employment
creates a presumption that the waiver should be revoked under
section 388.5.
Decision: MARAD has reviewed this proposal and has added the
following in the final rule:
(d) Advance notice and approval needed for changes.
When we approve a waiver application, we will notify the
applicant that the applicant may not make substantial changes in the
employment of the vessel in the coastwise trade without prior notice
to MARAD. If the applicant fails to provide advance notice of
substantial changes to MARAD, we may immediately revoke the waiver
under section 388.5.
The change is accepted with MARAD's modifications.
12. Section 388.5 Criteria for Revocation of a Waiver
Proposed: In paragraph (a):
(a) We may revoke a waiver previously granted under this part if
we determine that the employment of the vessel in the coastwise
trade has substantially changed since the issuance of the
endorsement,
and--
Recommendation: In paragraph (a), the PVA recommends changing the
first sentence to read as follows, deleting the word ``may'' and
replacing it with ``will''.
(a) We will revoke a waiver previously granted under this
paragraph if we determine
[[Page 6908]]
that the employment of the vessel in the coastwise trade has
substantially changed since the issuance of the endorsement.
Decision: This recommendation is not acceptable to MARAD as
``will'' is mandatory and requires unconditional revocation. Since the
change in employment of the vessel may be a positive impact on the
merchant marine with no adverse impact, we do not want to have to
automatically revoke a waiver.
13. Section 388.5 Criteria for Revocation of a Waiver
Proposed: In paragraph (a)(3):
(3) The employment of the vessel unduly adversely affects--
(i) United States vessel builders; or
(ii) The coastwise trade business of any person who employs
vessels built in the United States.''
Recommendation: In paragraph (a) (3), the change recommendation
from the PVA is to remove the word ````unduly'''' from the phrase
``unduly adversely affects'' as it sets too high a standard for adverse
impact on industry.
Decision: MARAD believes that to remove ``unduly'' would require
the revocation of a waiver request for the smallest and most frivolous
of adverse conditions. MARAD does not accept the recommendation.
14. Section 388.5 Criteria for Revocation of a Waiver
Proposed: In paragraph (b):
(b) We may evaluate the effects of the employment of the waived
vessel in the coastwise trade on the basis of the information
received from all sources * * *
Recommendation: In paragraph (b), similar to other recommendations,
PVA requested that the word ``may'' be changed to ``will'' in the
following context:
(b) We will evaluate the effects of the employment of the waived
vessel in the coastwise trade on the basis of the information
received from all sources * * *
Decision: MARAD accepts the premise and changes the wording from
``may'' to ``will'' and from ``and'' to ``or'' in order to maintain
flexibility as to the information needed to make a decision. We also
made the change to indicate that we will evaluate * * * on the basis of
all the information received * * *
(b) We will evaluate the effects of the employment of the waived
vessel in the coastwise trade on the basis of all the information
received from all sources, including public comment, internal
investigation and analysis, or any other sources of information
deemed appropriate.
15. Section 388.6 Process
Proposed: These issues were not covered in the proposed rule.
(a) Recommendation: The PVA would like additional public notice of
federal actions with regard to passenger vessel waivers and recommended
the following three changes:
The notice of the waiver application should be printed at least
once a week for three weeks in one or more newspapers of general
circulation for the geographic area in which the vessel will be
operated. The notice should be published by MARAD, and be of one-
quarter page newspaper size.
Decision: Because MARAD is an agency of the Federal Government,
MARAD considers the Federal Register the appropriate public forum for
the announcement of proposed waiver actions and will not require the
publication of proposed waivers in local newspapers. MARAD does not
accept this recommendation.
(b) Recommendation: Notice of federal waiver action should be
distributed by e-mail to interested parties.
Decision: MARAD actions will be available publicly on the
electronic docket provided by DOT. MARAD does not believe that any
additional electronic notification is necessary.
(c) Recommendation: MARAD should maintain a proposed waiver listing
on its website.
Decision: MARAD will post its notices and all comments received on
the electronic docket. This activity and the notice in the Federal
Register will meet our public notice requirements.
16. Section 388.6 Process
Proposed: In paragraph (a) Initial process:
In the absence of duly filed objections to an application, and
in the absence of undue market impact on vessel operators or vessel
builders otherwise discovered by us, we will assume that there will
be no adverse effect.
Recommendation: In paragraph (a) Initial process, the PVA objects
to the word ``assume'' as it implies favoritism towards an application
for waiver. No specific rewording was recommended.
Decision: MARAD has reviewed this section and is changing the word
``assume'' to ``conclude'' in the final rule as this is how MARAD will
base its adverse impact decision. The new text will read:
In the absence of duly filed objections to an application, and
in the absence of undue market impact on vessel operators or vessel
builders otherwise discovered by us, we will conclude that there
will be no adverse effect.
17. In Section 388.6 Process
Proposed: In paragraph (a):
The decision will be communicated to the applicant, those who
have submitted written comments, and the Coast Guard.
This issue was not covered in paragraph (c).
Recommendation: In paragraph (c), The PVA recommended in paragraph
(c) a revision to require notification in writing of MARAD actions,
such as in the phrase:
Each decision to grant, deny, or revoke a waiver will be made in
writing, and a copy of the written decision will be provided to each
applicant and other parties to the decision.
Decision: MARAD accepts the recommendation that decisions will be
in writing and has added that language to both paragraph (a) and (c).
18. Section 388.6 Process
Proposed: In Paragraph (c): certain parties may ``. . . petition
the Maritime Administrator to review a waiver, waiver denial, or waiver
revocation within five (5) days of such determination.''
Recommendation: In paragraph (c): Review of determinations, PVA
recommends that the time limits on petitioning should run from the date
of a person's receipt of the written notice (not the date of
determination). The PVA believes to do otherwise would frustrate a
distant party's ability to seek a review or appeal.
Decision: MARAD understands this condition and changes to the
following wording:
Applicants and persons who submitted comments in response to a
Federal Register may petition the Administrator to review a waiver,
waiver denial, or waiver revocation within five (5) business days
after MARAD files the decision in the docket.
This revision by MARAD provides added flexibility for interested
parties by making the time limit five business days instead of calendar
days. Similarly, making the time limits effective based on when the
decision is filed in the docket provides further flexibility. Further,
all time references have been changed to business days in the final
rule.
19. Under Section 338.7 Sunset Provision
Proposed: In the first sentence: ``We will grant no waivers after
September 30, 2002 unless the statutory authority to grant waivers is
extended beyond that date.''
Recommendation: The PVA recommends the deletion of the phrase
``unless the statutory authority to grant
[[Page 6909]]
waivers is extended beyond that date'' as it implies a prediction of
Congressional action.
Decision: MARAD accepts the recommendation and has deleted this
phrase in the final rule.
20. Section 338.7 Sunset Provision
Proposed: The second sentence reads: ``Any waiver granted prior to
September 30, 2002 will continue in effect until otherwise invalidated
or revoked under chapter 121 of title 46, United States Code.''
Recommendation: The PVA claims that this sentence may not have a
legal basis.
Decision: MARAD has conducted a legal review of this remark and has
decided to rephrase the statement as follows: ``We will grant no
waivers on or after September 30, 2002.''
Therefore, with the public comments having been considered, and the
appropriate changes made to the regulation a program description
follows:
Program Description: Within the Department of Transportation there
are two agencies with responsibilities related to the coastwise trade
laws. The U.S. Coast Guard issues the vessel documents and endorsements
that authorize vessels to engage in the coastwise trade. However, the
Secretary of Transportation has delegated to MARAD the authority to
process applications for waivers of the coastwise laws and to determine
the effect of waivers of the coastwise trade laws on United States
vessel builders and United States-built vessel coastwise trade
businesses. We are outlining the procedures to be followed in
processing applications for waivers, or revoking waivers previously
granted. Upon grant of a waiver, MARAD will notify the applicant and
the U.S. Coast Guard. Thereafter, you may register the vessel so waived
with the U.S. Coast Guard under the U.S. Coast Guard's normal
procedures, provided the vessel is otherwise eligible.
Vessels eligible for a waiver of the coastwise trade laws will be
limited to foreign-built or foreign rebuilt small passenger vessels and
uninspected passenger vessels as defined by section 2101 of Title 46,
United States Code. Vessels of unknown origin will be considered
foreign built. Additionally, vessels requested for consideration must
be greater than three (3) years old. We will not grant waivers in
instances where such waiver activity will have an unduly harmful impact
on U.S. shipyards or U.S.-flag ship operators. Specifically, and in
order to meet the public comment provisions of Title V, it is our
intention to publish waiver requests for comment in the Federal
Register. After a period of time to evaluate comments and assess the
impact that the proposed waivers will have on the U.S.-flag shipping
and shipbuilding industry, we will issue a determination.
In assessing the adverse effect of grant of a particular waiver, we
may consider sales of vessels of the same type and size and for the
same trade by domestic shipbuilders. As an example, the grant of a
waiver for a motor vessel might not have an adverse effect on sales by
a builder of sailboats. As for adverse affects on coastwise trade
businesses, we may look at the type of service and geographic location
of the applicant and the objector. An intended service providing day
trips for whale watching might not affect a service providing weeklong
trips on a sailing ship. A charter service in Maine might not affect a
charter service in California. Each decision will be made on the facts
of the individual circumstances, including the degree of competition in
a proposed market.
We do not have the authority to waive citizenship requirements for
vessel ownership and documentation. The U.S. Coast Guard will ascertain
whether the shipowner is qualified as a citizen to register a vessel.
In addition, the U.S. Coast Guard, not MARAD, will determine whether a
particular vessel will be considered a small passenger vessel or an
uninspected passenger vessel. However, we may refuse to process an
application if the vessel is not the type eligible for a waiver.
Prospective applicants for a coastwise trade law waiver may wish to
consult with the U.S. Coast Guard prior to initiating the waiver
application process with MARAD.
Under Title V, MARAD also has the authority to revoke coastwise
endorsements under the limited circumstances where a foreign-built or
foreign-rebuilt passenger vessel, previously allowed into service,
substantially changes that service and the vessel is employed other
than as a small passenger vessel or an uninspected passenger vessel or
the vessel is having an unduly harmful impact on U.S.-vessel builders
or persons who employ U.S.-built vessels in the domestic trade. The
procedure for revocation of a MARAD waiver will include the publication
of a notice in the Federal Register seeking public comments on the
proposed revocation. Secondly, we will determine the extent of the
allegedly detrimental activity and, if an undue impact is found, we
will issue a formal letter of waiver revocation with an appropriate
grace period. This determination will be sent to the U.S. Coast Guard
for revocation of the vessel's coastwise endorsement.
MARAD's decisions to grant or deny a waiver and to revoke or not
revoke a waiver will not be final until after time for review has
expired. Applicants and persons who submitted comments in response to a
Federal Register notice may petition the Maritime Administrator to
review a waiver determination, or request the Maritime Administrator
not to review a waiver determination. Relatively short time periods are
provided for this review process.
Rulemaking Analyses and Notices
Executive Order 12866 and DOT Regulatory Policies and Procedures
This final rule is not significant under section 3(f) of Executive
Order 12866, and as a consequence, OMB did not review the rule. This
final rule is not significant under the Regulatory Policies and
Procedures of the Department of Transportation (44 FR 11034; February
26, 1979). The costs and benefits associated with this rulemaking are
considered to be so minimal that no further analysis is necessary.
Vessels eligible for a waiver of the coastwise trade laws will be
limited to foreign built or foreign re-built small passenger vessels
and uninspected passenger vessels as defined by section 2101 of Title
46, United States Code. Additionally, vessels requested for
consideration must be greater than (3) years old. We will not grant
waivers in instances where such waiver activity will have an unduly
adverse affect on U.S. vessel builders or U.S. businesses that use U.S.
flag vessels. Under Title V, MARAD also has the authority to revoke
coastwise endorsements under the limited circumstances where a foreign-
built or foreign-rebuilt passenger vessel, previously allowed into
service, substantially changes that service and the vessel is employed
other than as a small passenger vessel or an uninspected passenger
vessel or the vessel is having an unduly adverse affect on U.S. vessel
builders or persons who employ U.S.-built vessels in the domestic
trade.
Executive Order 13132
We analyzed this rulemaking in accordance with the principles and
criteria contained in E.O. 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
[[Page 6910]]
herein have no substantial effects on the States, or on the current
Federal-State relationship, or on the current distribution of power and
responsibilities among the various local officials. Therefore, MARAD
did not consult with State and local officials because it was not
necessary.
Regulatory Flexibility Act
The Regulatory Flexibility Act requires MARAD to assess the impact
that regulations will have on small entities. After analysis of this
final rule MARAD certifies that this final rule will not have a
significant economic impact on a substantial number of small
businesses. Although we expect many applicants for vessel waivers to be
small businesses, we do not believe that the economic impact will be
significant. This regulation allows MARAD to waive the U.S.-build and
other requirements for eligible vessels and adds a small economic
benefit to applicants. This regulation will only allow vessels to carry
the statutory maximum of 12 passengers. As a consequence, MARAD
estimates that a vessel applicant who receives a waiver may earn a few
hundred dollars per year for localized operations (geographic
restrictions apply) such as whale watching and personalized fishing
expeditions. Also, the economic impact of this rule is limited because
it precludes vessel operators from participating in other economic
activities such as carrying cargo and commercial fishing.
Environmental Assessment
This rule would not significantly affect the environment because
the small number and small size of vessels admitted to U.S. registry
under this waiver program would have little or no effect on the
environment. Accordingly, an Environmental Impact Statement is not
required under the National Environmental Policy Act of 1969.
Paperwork Reduction Act
This rulemaking establishes a new requirement for the collection of
information. The Office of Management and Budget (OMB) has reviewed and
approved the information collection requirements under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501, et seq.) Comments received on
this information collection are discussed in the ``Comments on the
Proposed Rule'' section of this notice of final rule. The OMB approval
number is 2133-0529.
Unfunded Mandates Reform Act
This rule does not impose unfunded mandates under the Unfunded
Mandates Reform Act of 1995. It does not result in costs of $100
million or more to either State, local, or tribal governments, in the
aggregate, or to the private sector, and is the least burdensome
alternative that achieves the objectives of the rule.
Consultation and Coordination With Indian Tribal Governments
MARAD believes that regulations in this final rule will have no
significant or unique effect on the communities of Indian tribal
governments when analyzed under the principles and criteria contained
in Executive Order 13084 (Consultation and Coordination with Indian
Tribal Governments). Therefore, the funding and consultation
requirements of this Executive Order would not apply.
Regulation Identifier Number (RIN)
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN number contained in the heading
of this document can be used to cross-reference this action with the
Unified Agenda.
List of Subjects in 46 CFR Part 388
Administrative practice and procedure, Maritime carriers, Passenger
vessels, Reporting and record keeping requirements.
Accordingly, the Maritime Administration adds a new part 388 to 46
CFR chapter II, subchapter J, to read as follows:
PART 388--ADMINISTRATIVE WAIVERS OF THE COASTWISE TRADE LAWS FOR
ELIGIBLE VESSELS
Sec.
388.1 Purpose.
388.2 Definitions.
388.3 Application; fee.
388.4 Criteria for grant of a waiver.
388.5 Criteria for revocation of a waiver.
388.6 Process.
388.7 Sunset provision.
Authority: 46 App. U.S.C. 1114(b); 49 U.S.C. 322; Public Law
105-383, 112 Stat. 3445 (46 U.S.C. 12106 note); 49 CFR 1.66(cc).
Sec. 388.1 Purpose.
This part prescribes regulations implementing the provisions of
Title V of Public Law 105-383,112 Stat. 3445, which grants the
Secretary of Transportation authority to review and approve
applications for waiver of the coastwise trade laws to allow the
carriage of no more than 12 passengers for hire on vessels, which are
three years old or more, built or rebuilt outside the United States,
and grants authority for revocation of those waivers.
Sec. 388.2 Definitions.
For the purposes of this part:
(a) Administrator means the Maritime Administrator.
(b) Coastwise Trade Laws include:
(1) The Coastwise Endorsement Provision of the Vessel Documentation
Laws, (46 U.S.C. 12106);
(2) The Passenger Services Act, section 8 of the Act of June
19,1886 (46 App. U.S.C. 289); and
(3) The Jones Act, section 27 of the Merchant Marine Act, 1920 (46
App. U.S.C. 883).
(c) Eligible Vessel means a vessel otherwise eligible for a U.S.
Coast Guard certificate of documentation (i.e. of five or more tons)
that is either a small passenger vessel or an uninspected passenger
vessel that--
(1) Was not built in the United States and is at least 3 years of
age; or
(2) If rebuilt, was rebuilt outside the United States at least 3
years before the certificate of documentation with appropriate
endorsement, if granted, would become effective.
(d) MARAD means the Maritime Administration, U.S. Department of
Transportation.
(e) Secretary means the Secretary of Transportation.
(f) The terms, small passenger vessel, uninspected passenger
vessel, and passenger for hire have the meaning given such terms by 46
2102 U.S.C.
Sec. 388.3 Application; fee.
(a) An owner of the vessel may apply in writing to the Secretary,
MARAD, MAR-120, Room 7210, 400 7th St., SW., Washington, DC 20590, for
an administrative waiver of the coastwise trade laws of the United
States for an eligible vessel to carry no more than 12 passengers for
hire. The application need not be in any particular format, but must be
signed and contain the following information:
(1) Name of vessel and owner for which waiver is requested.
(2) Size, capacity and tonnage of vessel (state whether tonnage is
measured pursuant to 46 U.S.C. 14502, or otherwise, and if otherwise,
how measured).
(3) Intended use for vessel, including geographic region of
intended operation and trade.
(4) Date and place of construction and (if applicable) rebuilding.
(If applicant is unable to determine the origin of the vessel, foreign
construction will be assumed).
(5) Name, address, and telephone number of vessel owner.
[[Page 6911]]
(6) A statement on the impact this waiver will have on other
commercial passenger vessel operators, including a statement describing
the operations of existing operators.
(7) A statement on the impact this waiver will have on U.S.
shipyards.
(b) MARAD may ask additional questions of the applicant as part of
the application review.
(c) You must enclose a non-refundable application fee for each
waiver requested, in the form of a check or money order for $300, made
out to the order of ``Maritime Administration--Transportation.''
Sec. 388.4 Criteria for grant of a waiver.
(a) General criteria. (1) We will waive the foreign build and/or
foreign rebuild prohibition in the coastwise trade laws for an eligible
vessel only if we determine that the employment of the vessel in the
coastwise trade will not unduly adversely affect--
(i) United States vessel builders; or
(ii) The coastwise trade business of any person who employs vessels
built in the United States in that business.
(2) We may not limit the determination of ``unduly adverse affect''
on a coastwise operator or an U.S. vessel builder to operators or
builders of vessels carrying 12 or fewer passengers.
(3) We will evaluate the expected impact of the proposed waiver on
the basis of all the information received from all sources, including
public comment, internal investigation and analysis, or any other
sources or information deemed appropriate.
(b) Impact on U.S. vessel builders. We may use the following
criteria to determine the effect on U.S. vessel builders: Whether a
potentially impacted U.S. vessel builder has a history of construction
of similar vessels, or can demonstrate the capability and capacity to
build a similar vessel, for use in the same geographic region of the
United States, as the proposed vessel of the applicant.
(c) Impact on coastwise trade operators. We may use the following
criteria to determine the effect on existing operators of U.S.-built
vessels in coastwise trade:
(1) Whether the proposed vessel of the applicant and a vessel of an
existing operator (or the vessel of an operator that can demonstrate it
has taken definite steps to begin operation) would provide similar
commercial service and would operate in the same geographic area.
(2) The number of similar vessels operating or proposed to operate
in the same market with the same or similar itinerary, relative to the
size of the market.
(d) Advance notice and approval needed for changes. When we approve
a waiver application, we will notify the applicant that the applicant
may not make substantial changes in the employment of the vessel in the
coastwise trade without prior notice to MARAD. If the applicant fails
to provide advance notice of substantial changes to MARAD, we may
immediately revoke the waiver under Sec. 388.5.
Sec. 388.5 Criteria for revocation of a waiver.
(a) We may revoke a waiver previously granted under this part if we
determine that the employment of the vessel in the coastwise trade has
substantially changed since the issuance of the endorsement, and--
(1) The vessel is employed other than as a small passenger vessel
or an uninspected passenger vessel; or
(2) The employment of the vessel unduly adversely affects--
(i) United States vessel builders; or
(ii) The coastwise trade business of any person who employs vessels
built in the United States.
(b) We will evaluate the effects of the employment of the waived
vessel in the coastwise trade on the basis of the information received
from all sources, including public comment, internal investigation and
analysis, or any other sources of information deemed appropriate.
Sec. 388.6 Process.
(a) Initial process. We will review each application for
completeness as received. We will notify the applicant if additional
information is necessary or if the application does not meet the
initial eligibility requirements for a waiver. All applications that
pass the initial screening will be available for public inspection in
the Department of Transportation Docket Room following publication in
the Federal Register. We will publish a notice of such applications in
the Federal Register. Interested parties will be given an opportunity
to comment on whether introduction of any of the proposed vessels would
adversely affect them. In the absence of duly filed objections to an
application, and in the absence of undue market impact on vessel
operators or vessel builders otherwise discovered by us, we will
conclude that there will be no adverse effect. If an objection to an
application is received, additional information may be sought from the
objector. The applicant will be given a sufficient amount of time to
respond. The Director, Office of Ports and Domestic Shipping, will then
either make a decision based on the written submissions and all
available information or may, as a matter of discretion, hold a hearing
on the application. The decision will be communicated in writing to the
applicant, those who have submitted written comments, and the Coast
Guard. If MARAD grants a waiver, the applicant must thereafter contact
the Coast Guard to obtain the necessary documentation for domestic
operation, provided the vessel and its owner, otherwise qualify.
(b) Revocation. We may, upon the motion of an interested party, or
upon our own motion, publish a notice in the Federal Register,
proposing to revoke a waiver granted under this part. We may request
additional information from any respondent to the notice. The Director,
Office of Ports and Domestic Shipping, will then either make a decision
based on the written submissions and additional publicly available
information or may, as a matter of discretion, refer the request for
the revocation to a hearing. MARAD will communicate its decision in
writing to the waiver recipient, the requestor (if any), each
respondent to the proposed revocation notice; and the Coast Guard. If
MARAD revokes a waiver, the Coast Guard shall revoke the vessel's
coastwise endorsement.
(c) Review of determinations. (1) The decisions by the Director,
Office of Ports and Domestic Shipping, to grant a waiver, deny a
waiver, or revoke a waiver will not be final until after time for
discretionary review by the Administrator has expired. Applicants and
persons who submitted comments in response to a Federal Register notice
may petition the Administrator to review a waiver, waiver denial, or
waiver revocation within five (5) business days after MARAD files the
decision in the docket. Each petition for review should state the
petitioner's interest and the reasons review is being sought, clearly
pointing out any alleged errors of fact or misapplied points of law.
Within three (3) business days of submission of a petition for review,
applicants for a waiver and persons who submitted comments in response
to a Federal Register notice may request the Administrator not to
review a waiver, waiver denial, or waiver revocation.
(2) Such petitions and responses may be sent by facsimile to the
Secretary, Maritime Administration, at (202) 366-9206. To the extent
possible, each petitioner or respondent should send a copy of their
petition or response to other interested parties by facsimile at the
same time the submission is made to MARAD. The Administrator will
decide whether to take review within
[[Page 6912]]
two (2) business days following the time for submission of a request
that the Administrator not take review. If the Administrator takes
review, the determination by the Director, Office of Ports and Domestic
Shipping, will be stayed until final disposition. If review is not
taken, the determination by the Director, Office of Ports and Domestic
Shipping, will become final two (2) business days after the time for
submission of requests that the Administrator not take review. If the
last day of a time limit falls on a Saturday, Sunday, or Federal
holiday, the time is extended to the next business day. In the absence
of any petition for review, the determination by the Director, Office
of Ports and Domestic Shipping will become final within ten (10)
business days. Each decision to grant, deny, or revoke a waiver will be
made in writing, and a copy of the written decision will be provided to
each applicant and other parties to the decision. The Secretary, MARAD,
may extend any of the time limits for good cause shown.
Sec. 388.7 Sunset provision.
We will grant no waivers on or after September 30, 2002.
Dated: February 7, 2000.
By Order of the Maritime Administrator.
Joel C. Richard,
Secretary.
[FR Doc. 00-3176 Filed 2-10-00; 8:45 am]
BILLING CODE 4910-81-P