[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Rules and Regulations]
[Pages 59472-59474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29497]
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DEPARTMENT OF TRANSPORTATION
Coast Guard
46 CFR Part 2
[CGD 96-067]
RIN 2115-AF40
Vessel Inspection User Fees
AGENCY: Coast Guard, DOT.
ACTION: Final rule.
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SUMMARY: The Coast Guard is adopting as final, with changes, the
interim rule it published on April 21, 1997. The interim rule reduced
annual vessel inspection user fees for small passenger vessels and
exempted publicly owned ferries from payment of vessel inspection user
fees as required by the Coast Guard Authorization Act of 1996. The rule
also revised the discretionary exemption criteria for vessels owned or
operated by non-profit organizations.
DATES: This final rule is effective December 4, 1998.
ADDRESSES: Documents, as indicated in this preamble, are available for
inspection or copying at the office of the Executive Secretary, Marine
Safety Council (G-LRA/3406), U.S. Coast Guard Headquarters, 2100 Second
Street SW., room 3406, Washington, DC 20593-0001, between 9:30 a.m. and
2 p.m., Monday through Friday, except Federal holidays. The telephone
number is 1-800-842-8740, extension 7-1477 or 202-267-1477.
FOR FURTHER INFORMATION CONTACT: CDR Mark McEwen, Office of Planning
and Resources, Budget and Resources Division (G-MRP-2), Marine Safety
and Environmental Protection at 202-267-1409.
SUPPLEMENTARY INFORMATION:
Regulatory History
On April 21, 1997, the Coast Guard published an interim rule
entitled Vessel Inspection User Fees in the Federal Register (62 FR
19229). The rule reduced the annual vessel inspection fees for small
passenger vessels to the limits established under the Coast Guard
Authorization Act of 1996 (the Act) (Pub. L. 104-324); exempted
publicly owned ferries from annual vessel inspection fees, as mandated
by Congress; and added definitions for the terms publicly owned, ferry,
political subdivision, State, youth, and non-profit organization. The
Coast Guard also revised the exemption criteria for vessels owned or
operated by a non-profit organization to include some non-profit
organizations that did not previously qualify for exemption from
payment of fees.
The Coast Guard received 26 letters commenting on the interim rule.
Twenty-five comments were from ferry owners or operators (21
``privately owned'' ferries, 1 ``publicly owned'' ferry, and 3
``unspecified ownership'' ferries). The remaining comment was from the
Passenger Vessel Association (PVA). No public hearing was requested,
and none was held.
Discussion of Comments and Changes
Fee Caps
As required by the Act, the interim rule capped the annual vessel
inspection fees for small passenger vessels less than 65 feet in length
at $300 and for small passenger vessels 65 feet or over in length at
$600. The Coast Guard did not receive any comments on this issue and it
has not been changed in the final rule.
Definitions
The interim rule added several definitions to 46 CFR 2.10-25. Only
the definition of ferry was mentioned in the comments. The interim rule
defined ferry as a vessel transporting passengers or vehicles on a
regular run, over the most direct route between a point of embarkation
and a point of debarkation on lands separated by a body of water other
than an ocean, or between a point of embarkation and an island within
the same State.
The Coast Guard received two comments recommending that the rule
use the definition of ferry in subchapter T, 46 CFR 175.10-9 (now 46
CFR 175.400) and subchapter H, 46 CFR 70.10-15. The Coast Guard agrees
that the definition should be consistent with those in subchapters T
and H. The definition has been changed in the final rule to conform
with those in subchapters T and H.
The Coast Guard has also revised the definition of youth by raising
the age limit in the definition from 18 to 21 so the exemption could
apply to vessels owned by colleges and universities providing courses
of marine environmental studies and meeting the other exemption
requirements.
Exemption Criteria
The interim rule revised the exemption criteria in 46 CFR 2.10-5 to
allow some non-profit organizations that did not previously meet the
narrowly drawn criteria to qualify for exemption from payment of fees.
The Coast Guard received no comments on this revision, but we have
changed the language in this section concerning fundraising activities
to clearly give owners and operators flexibility in scheduling these
activities.
Publicly Owned Ferries
Small passenger vessels, passenger ships, and passenger barges
operating as ferries pay the annual vessel inspection fee for the
vessel category to which they belong, since there is no fee category
established specifically for ferries. As required by the Act, the
interim rule amended 46 CFR 2.10-25 to exempt publicly owned ferries
from the user fee requirements of 46 CFR part 2.
All of the written comments discussed the issue of exempting
publicly owned ferries and stated that owners or operators of privately
owned ferries should receive the same exemption as publicly owned
ferries.
Identical Services
Nineteen comments stated that privately owned ferries and publicly
owned ferries provide identical services. Several of the comments
stated that all ferries provide lifeline services, such as serving as
the primary or sole means of transportation for residents and visitors;
providing vital transportation services for passengers, autos, trucks,
and buses
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to islands, riverine, and coastal communities; providing transportation
of mail, packages, ambulances, food, and other things needed to supply
a thriving community; and breaking ice to remote locations when needed.
The majority of comments stated that all privately owned ferries
contribute to local economies by paying taxes; providing commuter
services; transporting a large number of tourists; or providing service
for commercial vehicles. One comment from a privately owned ferry
stated it enhanced commerce by providing an important link between two
major interstates.
Many comments stated that ferries in general are important to the
overall infrastructure of mass transit because they provide such
services as an efficient and popular mode of transit; reduce the costs
of constructing and maintaining costly infrastructure; meet the
increasing interest of government and the DOT transportation goals to
reduce energy use and air pollution, as well as provide safe,
comfortable, cost-effective transportation; and reduce vehicular
traffic. Many comments also stated that privately owned ferry companies
provide at least half of the waterborne passenger transportation
service in this nation.
Seventeen comments discussed the economic burden of vessel
inspection user fees on privately owned ferries. Several of the
comments stated that continuing user fees for privately owned ferries
exaggerates an uneven playing field, particularly when their exempted,
publicly owned counterparts operate in direct competition. Fourteen of
the comments stated the fees are yet another cost to an industry
already operating without any financial assistance or subsidies.
Additionally, several comments stated that fares, schedules, routes,
and insurance requirements of some privately owned ferries are
regulated by other rules and regulations. The comments did not describe
in detail how this affected them, other than as a limitation on their
ability to pass these costs on to their passengers.
Congress did not include privately owned ferries in the exclusion
provision of the Act and the legislative history of the Act does not
explain why Congress exempted only publicly owned ferries. The Coast
Guard is implementing the requirements in the Act and has not changed
the final rule.
A comment from one owner of a privately owned ferry stated that he
was one of eight ferry operations required to pay the annual vessel
inspection user fee for a Passenger Ship. Currently, his fee is
$6,835.00. The comment requested the Coast Guard ``eliminate these user
fees or at least provide this operation with the same break afforded to
the other [small] passenger vessels'' under the Act, reducing his user
fee from $6,835.00 to $600.00.
The legislative history of the Act is silent on why Congress only
capped the fees of small passenger vessels and not other types of
passenger vessels. With no relief provided in the Act to reduce any
other passenger vessel user fees, the Coast Guard has not changed the
vessel inspection user fees for passenger ships or other types of
passenger vessels that were not covered by the Act.
Regulatory Evaluation
This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866 and does not require an assessment of
potential costs and benefits under section 6(a)(3) of that order. The
Office of Management and Budget has not reviewed it under that order.
It is not significant under the regulatory policies and procedures of
the Department of Transportation (DOT)(44 FR 11040; February 26, 1979).
The Coast Guard expects the economic impact of this rule to be so
minimal that a full Regulatory Evaluation under paragraph 10e of the
regulatory policies and procedures of DOT is unnecessary. The Act
placed a cap on fees charged for the inspection of small passenger
vessels which reduced the economic burden imposed on small businesses.
The Act also provided an exemption for publicly owned ferries from the
payment of user fees, which eliminated costs to States, State agencies,
and local governments. Implementation of these provisions began on
November 1, 1996.
The exemption criteria in 46 CFR 2.10-5 allow additional exemptions
from payments of fees for vessels owned or operated by non-profit
organizations because the Coast Guard determined it is clearly within
the public interest to do so.
User fee revenues will be reduced by approximately $2.8 million
dollars as a result of the Congressional cap on small passenger vessels
and its exemption of the publicly owned ferries, and the Coast Guard's
broadening of the exemption eligibility criteria for vessel owners or
operators of non-profit organizations. The cap on small passenger
vessels will affect 5,880 vessels; it reduces revenues to the
government and provides savings to the small passenger vessel industry
in the amount of $2.25 million dollars. The exemption of publicly owned
ferries affects 170 vessels; it reduces revenues to the government and
provides a savings to the industry in the amount of $428,200 dollars.
Broadening the exemption eligibility for non-profit organizations is
estimated to affect 100 vessels; it will reduce revenues to the
government and will provide savings to industry in the amount of
$67,000 dollars.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the
Coast Guard considered whether this rule would have a significant
economic impact on a substantial number of small entities. ``Small
entities'' include small businesses, not-for-profit organizations that
are independently owned and operated and are not dominant in their
fields, governmental jurisdictions with populations of less than
50,000.
The Coast Guard has reviewed this rule for potential impact on
small entities under the Regulatory Flexibility Act. This rule reduces
an existing economic burden on small businesses owning inspected small
passenger vessels or ferrries specified by the Act, or that qualify for
the revised exemption status by lowering or eliminating fees required
for Coast Guard vessel inspection services. Therefore, the Coast Guard
certifies under section 605(b) of the Regulatory Flexibility Act that
this final rule will not have a significant economic impact on a
substantial number of small entities.
Assistance for Small Entities
In accordance with section 213(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard
offered to assist small entities in understanding the rule so that they
could better evaluate its effects on them and participate in the
rulemaking process. The interim rule informed individuals applying for
an exemption under this rule that their local Officer in Charge, Marine
Inspection (OCMI) could provide assistance, or they could call, toll
free, 1-800-941-3337. Individuals seeking further assistance may still
call, toll free, 1-800-941-3337.
During the interim rule comment period, assistance was provided to
small entities by explaining the reasons for the annual user fee cap
reduction for small passenger vessels and the revision of the
discretionary exemption criteria for vessels owned or operated by non-
profit organizations.
Collection of Information
This final rule contains no new collection-of-information
requirements under the Paperwork Reduction Act (44 U.S.C. 3501 et
seq.).
[[Page 59474]]
Federalism
The Coast Guard analyzed this rule under the principles and
criteria contained in Executive Order 12612 and determined that this
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment. This rule amends user fees for
vessel inspection and examination services to cap fees paid for
services related to small passenger vessels, and exempts publicly owned
ferries from payment of the fees.
Unfunded Mandates
Under the Unfunded Mandates Reform Act (Pub. L. 104-4), the Coast
Guard considered whether this final rule will result in an annual
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million (adjusted annually for
inflation). Section 205 of the Unfunded Mandates Reform Act requires
the Coast Guard to identify and to consider a reasonable number of
regulatory alternates, and from those alternatives, select the least
costly, most cost-effective, or least burdensome alternative that
achieves the objective of this final rule. This rule does not impose
additional costs upon any State, local, and tribal governments as a
result of a mandate imposed upon them as a government agency. The
completed analysis estimates that this final rule will provide a total
savings to vessel owners and operators of approximately $2.8 million
dollars. Publicly owned ferries will no longer have to pay a total of
$428,200 in annual inspection user fees. This rule will, therefore,
result in the reduction or elimination of fees paid by State, local,
and tribal governments for inspection services provided to the
applicable vessels owned by such entities.
Environment
The Coast Guard considered the environmental impact of this rule
and concluded that under figure 2-1, paragraph (34)(a) of Commandant
Instruction M16475.lC, this rule is categorically excluded from further
environmental documentation. Paragraph (34)(a) of that instruction
excludes editorial or procedural regulations that clearly do not have
any environmental impacts. ``Categorical Exclusion Determination'' is
available in the docket for inspection or copying where indicated under
ADDRESSES.
List of Subjects in 46 CFR Part 2
Fees, Marine safety, Vessels.
Accordingly, the interim rule amending 46 CFR part 2 which was
published in 62 FR 19229 on April 21, 1997, is adopted as a final rule
with the following changes and amendments:
PART 2--VESSELS INSPECTIONS
1. The authority citation for part 2 continues to read as follows:
Authority: 14 U.S.C 664; 31 U.S.C. 9701; 33 U.S.C. 1903; 43
U.S.C. 1333, 1356; 46 U.S.C. 2110, 3306, 3703; E.O. 12234, 45 FR
58801, 3 CFR 1980 Comp., p. 277; 49 CFR 1.46; Subpart 2.45 also
issued under the authority of Act Dec 27, 1950, Ch 1155, sections 1,
2, 64 Stat. 1120 [see 46 U.S.C. App. Note prec. 1].
2. In Sec. 2.10-5, revise paragraph (c)(2) to read as follows:
Sec. 2.10-5 Exemptions.
* * * * *
(c) * * *
(2) The vessel's use for fundraising activities without regard to
the age of the participants aboard the vessel, provided revenues raised
are for the operation and maintenance of the vessel and that such
fundraising activities do not exceed one day of fundraising for each
month of the vessel's operating season.
* * * * *
3. In Sec. 2.10-25, revise the definitions of ferry and youth to
read as follows:
Sec. 2.10-25 Definitions.
* * * * *
Ferry means a vessel that:
(1) Operates in other than ocean or coastwise service;
(2) Has provisions only for deck passengers or vehicles, or both;
(3) Operates on a short run on a frequent schedule between two
points over the most direct water route; and
(4) Offers a public service of a type normally attributed to a
bridge or tunnel.
* * * * *
Youth means an individual 21 years of age or younger.
Dated: September 28, 1998.
R.C. North,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety
and Environmental Protection.
[FR Doc. 98-29497 Filed 11-3-98; 8:45 am]
BILLING CODE 4910-15-U
