[Federal Register Volume 61, Number 215 (Tuesday, November 5, 1996)]
[Notices]
[Page 56996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28416]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
[Docket No. P-009]
Title XI Obligation Guarantees Citizenship Requirement
AGENCY: Maritime Administration; Department of Transportation.
ACTION: Conforming Agency Procedures to Statutory Change; request for
comments.
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SUMMARY: The Maritime Administration (MARAD) is soliciting Public
comments to provide assistance in adopting a policy, which may
ultimately be incorporated in amendments to its regulations, governing
the administration of its obligation guarantees (``Title XI'') program
with respect to citizenship requirements for program participants. This
action is intended to harmonize the interpretation of citizenship
requirements in MARAD's Title XI regulations with amendments to Title
XI, as effected by the enactment on October 8, 1996, of the Maritime
Security Act of 1996.
DATE: Comments are requested by January 6, 1997.
ADDRESSES: To be considered, comments must be mailed, delivered in
person or telefaxed (in which case an original must be received) to the
Secretary, Maritime Administration, Room 7210, Department of
Transportation, 400 Seventh Street, SW., Washington, DC 20590. All
comments will be made available for inspection during normal business
hours at the above address. Commentors wishing MARAD to acknowledge
receipt of comments must enclose a stamped self-addressed envelope or
postcard.
FOR FURTHER INFORMATION CONTACT: Robert J. Patton, Jr., Deputy Chief
Counsel, Maritime Administration, (202) 366-5712.
SUPPLEMENTARY INFORMATION: Title XI of the Merchant Marine Act, 1936,
as amended (``Act''), 46 App. U.S.C. 1271 et seq., establishes a
program which provides for the issuance of U.S. Government guarantees
of obligations (debt) issued to finance the construction of vessels.
The term vessel is broadly defined to include many and diverse types,
as specified. Units the enactment of the National Shipbuilding and
Shipyard Conversion Act of 1993 (``Shipbuilding Act''), Subtitle D of
Title XIII, Pub. L. 103-160, a corporation or other entities were not
eligible for guarantees unless a majority or 75% of its stock was owned
by U.S. citizens, within the meaning of section 2 of the Shipping Act
1916, as amended (46 App. U.S.C. 802). The Stock ownership requirement
was dependent on the trade served; i.e. foreign or coastwise trade.
To promote U.S. shipbuilding, the Shipbuilding Act expanded the
Title XI obligation guarantee program to allow participation by vessel
owners, irrespective of citizenship, for financing of vessels built in
a U.S. shipyard for export (``eligible export vessels''). At the same
time, amendments to Title XI in the Shipbuilding Act removed references
to U.S. citizenship requirements in some provisions of the statute
while retaining them in other provisions. In issuing a final rule
amending its regulations for administering the Title XI obligation
guarantee program, MARAD addressed comments with respect to its
retention of U.S. citizenship requirements for all vessels, except
eligible export vessels (61 F.R. 21306; May 9, 1996). Citing the
statutory requirement and its longstanding interpretation, MARAD
rejected the view expressed by some commentates on its proposed rule
(60 F.R. 20592; April 28, 1995) that there are no U.S. citizenship
requirements under the Act, except where such requirements are made
applicable to certain specified types of vessels, such as fishing
vessels, pollution abatement vessels, etc.
Section 11 of the Maritime Security Act of 1996, PL. 104-239, 110
Stat. 3118, enacted on October 8, 1996, amended Title XI of the Act by
striking the words ``citizens of the United States'' in 46 App. U.S.C.
1271(b), 1274(a) and 1281(a). The effect was to remove the citizenship
requirements for applicants to MARAD for Title XI obligation
guarantees, except where specifically provided for by other laws.
MARAD recognizes the clear intent of the Congress expressed in Pub.
L. 104-239 to eliminate, prospectively, the eligibility requirement of
U.S. citizenship for vessel owners applying for obligation guarantees,
except as otherwise provided by law.
Accordingly, where MARAD's existing regulations are now in conflict
with Title XI, as amended by PL. 104-239 with respect to citizenship
requirements, they are no longer valid. Less certain is the retroactive
effect, if any, of the new law. MARAD's goal is to minimize the burden
on applicants of establishing U.S. citizenship without compromising
MARAD's responsibility to protect the interests of the United States
for the obligations which it guarantees. MARAD is also considering
establishing a priority, in the event of a scarcity of funds, for loan
guarantee applications by U.S. citizens over non-citizens for operation
under U.S.-flag in the foreign commerce.
MARAD is soliciting comments on the following issues:
1. Does MARAD have the legal authority to give retroactive effect
to the elimination of its general U.S. citizenship test for existing
participants in its obligation guarantee program?
2. If MARAD has such authority, to what extent should it exercise
that authority?
3. With respect to owners of vessels with obligation guarantees
that operate in the United States domestic (``coastwise'') trade, for
which U.S. citizenship requirements remain, can MARAD's security
interest in these vessels, for which it has issued guarantees, be
sufficiently protected if it adopts the self-certification process as
to establishing a vessel owner's citizenship used by the United States
Coast Guard for purposes of issuing a coastwise trade endorsement?
4. Should U.S. citizens be given priority for loan guarantees over
non-U.S. citizens for operation of U.S.-flag vessels in foreign
commerce in the event of scarcity of funds for approval of Title XI
obligation guarantees.
By Order of the Maritime Administrator.
Dated: October 31, 1996.
Joel C. Richard,
Secretary.
[FR Doc. 96-28416 Filed 11-4-96; 8:45 am]
BILLING CODE 4910-81-P
