[Federal Register Volume 60, Number 43 (Monday, March 6, 1995)]
[Proposed Rules]
[Pages 12188-12192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5387]
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DEPARTMENT OF TRANSPORTATION
Coast Guard
46 CFR Part 67
[CGD 94-070]
RIN 2115-AE98
Facsimile Filing of Instruments
AGENCY: Coast Guard, DOT.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Coast Guard proposes to amend its vessel documentation
regulations to provide for optional filing of commercial instruments by
facsimile, and to establish a filing and recording handling fee for
filing instruments by facsimile. The option of filing commercial
instruments by facsimile complements the centralization of Coast Guard
vessel documentation services. Facsimile filing of commercial
instruments is one way in which a centralized vessel documentation
center can deliver timely services to distant vessel documentation
customers and be responsive to time sensitive matters. Filing
commercial instruments by facsimile should further streamline the
vessel documentation process.
DATES: Comments must be received on or before May 5, 1995.
ADDRESSES: Comments may be mailed to the Executive Secretary, Marine
Safety Council (G-LRA/3406) (CGD 94-070), U.S. Coast Guard
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may
be delivered to room 3406 at the same address between 8 a.m. and 3
p.m., Monday through Friday, except Federal holidays. The telephone
number is (202) 267-1477.
The Executive Secretary maintains the public docket for this
rulemaking. Comments will become part of this docket and will be
available for [[Page 12189]] inspection or copying at room 3406, U.S.
Coast Guard Headquarters, between 8 a.m. and 3 p.m., Monday through
Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
Lieutenant Commander Don M. Wrye, Vessel Documentation and Tonnage
Survey Branch; (202) 267-1492.
SUPPLEMENTARY INFORMATION:
Request for Comments
The Coast Guard encourages interested persons to participate in
this rulemaking by submitting written data, views, or arguments.
Persons submitting comments should include their names and addresses,
identify this rulemaking (CGD 94-070) and the specific section of this
proposal to which each comment applies, and give the reason for each
comment. Please submit two copies of all comments and attachments in an
unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. Persons wanting acknowledgment of
receipt of comments should enclose stamped, self-addressed postcards or
envelopes.
The Coast Guard will consider all comments received during the
comment period. It may change this proposal in view of the comments.
The Coast Guard plans no public hearing. Persons may request a
public hearing by writing to the Marine Safety Council at the address
under ADDRESSES. The request should include the reasons why a hearing
would be beneficial. If it determines that the opportunity for oral
presentations will aid this rulemaking, the Coast Guard will hold a
public hearing at a time and place announced by a later notice in the
Federal Register.
Drafting Information
The principal persons involved in drafting this document are
Lieutenant Commander Don M. Wrye, Project Manager, and C. G. Green,
Project Counsel, Office of Chief Counsel.
Background and Purpose
Significant changes to the vessel documentation program were made
in 1988 by Public Law 100-710 (the ``statute''). Among other things,
the statute added chapter 313 to title 46, U.S. Code, to revise,
consolidate, and codify into positive law the ship mortgage laws
administered by the Department of Transportation. The statute made
certain substantive changes to then-existing law to modernize ship
mortgages and the filing and recording process.
The legislative history for the statute is contained in House
Report No. 100-918. That report noted that one of the primary purposes
of chapter 313 of title 46, U.S. Code, is to provide third parties with
notice of the existence of mortgages and liens. The report further
advocates the use of a central computer system to facilitate access to
data. The report noted that the ``Secretary should also consider
allowing private vessel documentation services to submit applications
electronically, with appropriate paper document backup for legal
purposes * * *'' This proposal would implement some of the suggestions
the report made concerning office automation and should realize some of
the benefits expected to flow from modernization.
On November 15, 1993, the Coast Guard published a final rule
revising 46 CFR part 67 implementing the substantive changes made by
the statute. The final rule became effective on January 1, 1994.
Under subpart O of the current regulations, instruments to be filed
and recorded with the Coast Guard are first submitted to the
appropriate port of record. An instrument submitted for filing and
recording must be a completed, executed instrument at the time it is
submitted. If the instrument submitted meets the minimal requirements
for filing, it is filed and stamped with a date and time. If all of the
necessary elements for recording the instrument are present when it is
filed, it can be promptly recorded. If an instrument is filed but
cannot be recorded because of an error or omission, the instrument is
deemed ``filed subject to termination'' and a 90-day window is provided
for correction. If corrected within the 90-day period, the instrument
may then be recorded with the recording date and time ``relating back''
to the date and time filed. If the instrument is not corrected within
the 90-day period, the filing is terminated and the instrument is
returned. In order to preserve the notice purpose of the statute, any
instrument filed with the Coast Guard, even if the filing is terminated
and the instrument not recorded, is indexed on the vessel's General
Index or Abstract of Title (form CG-1332). Allowing for the submission
of an instrument by facsimile for filing would not change any of the
procedural steps provided in the current regulations. However, the
submission of an instrument by facsimile for filing will start the
process earlier, resulting in an earlier date and time for filing and
recording purposes.
The Coast Guard is proceeding with the consolidation of its 14
regional vessel documentation offices into one central location. This
centralization will conclude the effort begun in 1983 when a number of
field offices were consolidated into regional offices. Although most
vessel documentation transactions are currently completed by ordinary
mail, a number of persons have expressed concern with regard to
centralization for those cases where ``over-the-counter'' service is
desired. As an example, some lending institutions will not advance
funds under a ship mortgage until assured that the mortgage has been
filed and recorded so as to acquire preferred status. In such cases,
the Coast Guard documentation officer will verify over the telephone
that the mortgage has been filed and recorded and the lending
institution will advance funds immediately. The Coast Guard anticipates
that the desire for such service will continue. Therefore, the Coast
Guard is contemplating further use of office automation technology as
part of the centralization effort. One such use of office automation
technology is the filing of certain forms and instruments by facsimile.
This document proposes amendments to the Coast Guard's regulations to
permit optional submission by facsimile of certain forms and
instruments for filing.
Discussion of Proposed Rules
The Coast Guard proposes to add to 46 CFR part 67 a new Sec. 67.219
to provide for filing commercial instruments by facsimile submission.
Paragraph (a) of proposed Sec. 67.219 would limit the instruments that
could be filed by facsimile submission to those identified as eligible
for filing and recording in Sec. 67.200. Those instruments are: bills
of sale and similar instruments; deeds of gift; mortgages and
assignments, assumptions, supplements, amendments, subordinations,
satisfactions, and releases thereof; preferred mortgages and
assignments, assumptions, supplements, amendments, subordinations,
satisfactions, and releases thereof; interlender agreements affecting
mortgages, preferred mortgages, and related instruments; and notices of
claim of lien and assignments, amendments, and satisfactions and
releases thereof. Paragraph (a) of proposed Sec. 67.219 would also list
the facsimile telephone number for the National Vessel Documentation
Command to which facsimile submissions may be made. Finally, paragraph
(a) of proposed Sec. 67.219 would require that the vessel to which the
instrument relates either be currently documented or be the subject of
an application for documentation. [[Page 12190]]
In accordance with Sec. 67.203, no instrument will be accepted for
filing unless it pertains to a documented vessel or a vessel for which
a properly completed application for documentation, redocumentation, or
deletion from documentation is filed. The Coast Guard deems an
instrument filed contemporaneously with a properly completed
application for documentation, redocumentation, or deletion from
documentation of the related vessel to meet the requirements of the
regulation. Therefore, if the vessel related to the instrument being
submitted by facsimile for filing is not a currently documented vessel,
a completed application would also have to be submitted by facsimile
with the instrument.
Paragraph (b) of proposed Sec. 67.219 would require that the person
submitting an instrument by facsimile for filing within 10 days submit
the original instrument in duplicate to the National Vessel
Documentation Command. One of the duplicate instruments submitted would
have to bear original signatures. The 10-day period would begin to run
at the time the instrument is received by facsimile at the National
Vessel Documentation Command. Since the instrument being submitted by
facsimile must be a completed and executed document, the submitter
should be able to take it from the facsimile machine, place it in an
envelope with the original of any required application and the
appropriate fee, and mail the original and a copy to the National
Vessel Documentation Command without delay. Thus, the 10-day period is
considered a sufficient mailing window. The duplicate submission
requirement proposed in paragraph (b) would meet the submission
requirement for the filing of all instruments in Sec. 67.209, while
obtaining the earlier filing date for those instruments submitted by
facsimile. In addition, paragraph (b) of proposed Sec. 67.219 would
require that the original of any application required to be submitted
by paragraph (a) of this section, which is not already on file, also be
submitted to the National Vessel Documentation Command.
Paragraph (c) of proposed Sec. 67.219 would provide that upon
receipt of the duplicate instruments and the original of any required
application, the date and time of recording of the instrument ``relates
back'' to the date and time that the instrument submitted by facsimile
was filed. Provided that the instrument submitted by facsimile for
filing meets the minimal requirements for filing, it would be filed at
the date and time received by facsimile. The objective of submitting an
instrument by facsimile for filing is to obtain an earlier filing date
than could otherwise be acquired. Because the instrument submitted by
facsimile is itself filed, the process should work well to meet that
objective, even during weekends. For example, if an instrument were
submitted by facsimile for filing late Friday evening, it would not be
reviewed to ensure that it met the filing requirements until the next
regular workday. On a regular weekend that would be the following
Monday. On most holiday weekends, that would be the following Tuesday.
Therefore, it is possible that an instrument submitted by facsimile for
filing would not be reviewed to determine whether it met the minimal
filing requirements until as many as four days after it was submitted.
However, if the instrument submitted by facsimile does meet the filing
requirements, then it would be stamped filed and the date and time of
filing would be the date and time received by facsimile. The filing of
the instrument would then be indexed on the vessel's General Index or
Abstract of Title (form CG-1332). Of course, the 10-day period for
submitting the duplicate instruments would also start running on the
date the instrument is submitted by facsimile. Therefore, persons
submitting an instrument by facsimile for filing must exercise due
diligence to ensure that the duplicate instruments required by
paragraph (b) arrive within the 10-day period. When the duplicate
instruments arrive, they would be compared with the instrument filed by
facsimile and, if not subject to termination under paragraph (f) of
this section, the instrument would be recorded.
Paragraph (d) of proposed Sec. 67.219 would require that all
instruments filed by facsimile be clearly legible as received, that
they be originally submitted from 8\1/2\-inch by 11-inch paper in not
less than 10-point type size, and that they be accompanied by a cover
sheet. This requirement would provide for minimum quality control of
the instruments submitted by facsimile for filing. In addition, clear
legibility of the instrument as received will assist Coast Guard
personnel to ensure that the instrument meets minimum requirements for
filing and recording pending receipt of the duplicate instruments in
accordance with paragraph (b).
Paragraph (e) of proposed Sec. 67.219 would indicate that the
facsimile cover sheet required by paragraph (d) should contain the
name, address, telephone number and facsimile telephone number of the
person submitting the instrument by facsimile, and the number of pages
submitted. This information will assist Coast Guard personnel to verify
receipt of the complete instrument and will provide a point of contact
should a difficulty arise in facsimile transmission.
Paragraph (f) of proposed Sec. 67.219 would state the conditions
upon which the filing of an instrument submitted by facsimile would be
terminated. First, if the duplicate instruments required by paragraph
(b) are not received within the 10-day period following submission of
the instrument by facsimile, the filing is terminated and the
instrument submitted by facsimile is returned to the submitter. Second,
if there is any variance between the instrument submitted by facsimile
and the duplicate instruments required by paragraph (b), the filing is
terminated and the instrument submitted by facsimile is returned to the
submitter. The provision for termination because of a variance would
ensure that the instrument being submitted by facsimile for filing is
not being submitted for the purpose of reserving an earlier filing date
for a different or amended instrument submitted as the duplicate
instruments required by paragraph (b). The instrument being submitted
by facsimile for filing must be a complete and executed instrument at
the time it is submitted, as is the case for any instrument submitted
for filing under Subpart O of the current regulations.
Paragraph (g) of proposed Sec. 67.219 would provide that where the
filing of an instrument submitted by facsimile is terminated pursuant
to paragraph (f)(3) because of a variance with the duplicate
instruments submitted in accordance with paragraph (b), the duplicate
instruments would be treated as an original submission for filing.
Provided this instrument meets the minimal requirements for filing, it
would be filed but would be subject to termination under
Sec. 67.217(a)(1). This instrument would be subject to termination
because of the variance with the earlier instrument submitted by
facsimile. The termination of filing and distribution of instruments
procedures described in Sec. 67.217 (b) and (c) would apply. The reason
for treating this instrument as subject to termination is that the same
transaction has been addressed by two different instruments with a
variance between them. Therefore, the veracity of the facts of the
transaction as reflected in the two instruments is in question. The
instrument submitted as the duplicate instruments would be subject to
the 90-day termination period in which the variance may be explained,
thereby curing the defect and allowing for recording of the instrument.
In this [[Page 12191]] instance, the recording date and time would
relate back to the date and time that the ``duplicate instruments''
were filed subject to termination. A letter from the person who
submitted the instrument by facsimile for filing explaining that the
instrument submitted by facsimile has been superseded by the duplicate
instruments would be sufficient.
Paragraph (a) of Sec. 67.500 would be revised to clarify the Coast
Guard's current practice to not perform any vessel documentation
service which is subject to a fee until the required fee is paid. As is
current practice, the person requesting the documentation service would
submit the fee at the time the service is requested. As applied to the
submission by facsimile of instruments for filing, the payment of the
fee would accompany the submission of the duplicate instruments
submitted in accordance with paragraph (b) of this section.
A new Sec. 67.540 would be added to clearly state that a handling
fee would be charged for processing an instrument submitted by
facsimile for filing. This fee would not alter the current per page fee
charged for filing and recording services, but would be an additional
per page fee.
An appropriate entry in Table 67.550--FEES in Sec. 67.550 would be
added to reflect the amount of the fee added to address the handling
fee. This additional fee is justified because of the additional time
Coast Guard personnel would have to expend in processing the facsimile
submission, and to cover the added expense of facsimile machines. For
example, Coast Guard personnel would have to receive and sort the
facsimile submission, review it to ensure that it met minimal filing
requirements, assign a filing date and time, store the facsimile
submission, retrieve it when the duplicate instruments were received,
and compare the facsimile with the duplicate instruments. Based on the
additional personnel handling required for an instrument submitted by
facsimile for filing, and additional equipment costs, a fee of $2.00
per page is proposed.
Regulatory Evaluation
This proposal 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. It
has not been reviewed by the Office of Management and Budget 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
proposal to be so minimal that a full Regulatory Evaluation under
paragraph 10e of the regulatory policies and procedures of DOT is
unnecessary. The Coast Guard anticipates that optional filing by
facsimile will be used only in a limited number of cases. For example,
when additional financing is being negotiated; when an assignment or
assumption of an existing mortgage is pending; when financing at
favorable rates is time critical; or when a vessel owner desires to
meet a specific sailing date and filing an instrument is critical to
that date, are situations when filing by facsimile could be
advantageous. Nevertheless, submission by facsimile is proposed as an
optional method of presenting documents for filing. A party may always
use regular mail or personal delivery if desired. Therefore, any
additional costs to the public associated with this proposal would be
due to an election to use the optional method.
In order to more fully anticipate the costs and benefits associated
with this proposal, the Coast Guard specifically solicits information
from the public concerning potential use of the option of filing by
facsimile.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. et seq.), the Coast
Guard must consider whether this proposal, if adopted, will have a
significant economic impact on a substantial number of small entities.
``Small entities'' may include (1) small businesses and not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields and (2) governmental jurisdictions with
populations of less than 50,000.
As explained earlier in this preamble, this proposal, if adopted,
would merely add an optional method of submitting certain forms and
instruments to the Coast Guard for filing. Since filing by facsimile
would be optional, any additional costs borne by any users would be at
their election. Current methods of submitting instruments for filing,
at no increase in costs, would remain available. In addition, it is
anticipated that the option of filing by facsimile would be used only
in limited situations where time is of the essence. Therefore, the
Coast Guard expects the impact of this proposal to be minimal.
Because it expects the impact of this proposal to be minimal, the
Coast Guard certifies under 5 U.S.C. 605(b) that this proposal, if
adopted, will not have a significant economic impact on a substantial
number of small entities.
Collection of Information
This proposal contains no collection-of-information requirements
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). This
proposal merely describes an optional method of submitting instruments
for filing and recording.
Federalism
The Coast Guard has analyzed this proposal under the principles and
criteria contained in Executive Order 12612 and has determined that
this proposal does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment.
Environment
The Coast Guard considered the environmental impact of this
proposal and concluded that under paragraph 2.B.2 of Commandant
Instruction M16475.1B, this proposal is categorically excluded from
further environmental documentation. This proposal has been determined
to be categorically excluded because the changes proposed are
administrative and procedural in nature, relate solely to the
documentation of vessels, and clearly have no environmental impact. A
``Categorical Exclusion Determination'' is available in the docket for
inspection or copying where indicated under ADDRESSES.
List of Subjects in 46 CFR Part 67
Fees, Incorporation by reference, Vessels.
For the reasons set out in the preamble, the Coast Guard proposes
to amend 46 CFR part 67 as follows:
PART 67--[AMENDED]
1. The authority citation for part 67 continues to read as follows:
Authority: 14 U.S.C. 664; 31 U.S.C. 9701; 42 U.S.C. 9118; 46
U.S.C. 2103, 2107, 2110; 46 U.S.C. app. 841a, 876; 49 CFR 1.46.
2. Section 67.219 is added to read as follows:
Sec. 67.219 Optional filing of instruments by facsimile.
(a) Any instrument identified as eligible for filing and recording
under Sec. 67.200 may be submitted by facsimile for filing to the
National Vessel Documentation Command at [telephone number to be
inserted in final rule]. If the instrument submitted by facsimile for
filing pertains to a vessel that is not a currently documented vessel,
a properly completed Application for Initial Issue, Exchange, or
Replacement Certificate of Documentation; or Redocumentation (form CG-
1258) or an [[Page 12192]] application for deletion from documentation
must already be on file with the National Vessel Documentation Command
or must be submitted by facsimile with the instrument being submitted
by facsimile for filing.
(b) Within 10 days of submitting an instrument by facsimile for
filing, the person submitting the instrument by facsimile must submit
the instrument in duplicate to the National Vessel Documentation
Command, [address to be inserted in final rule]; at least one copy must
bear original signatures. If not already on file, the original of any
application required by paragraph (a) of this section must also be
submitted with the original instrument to the National Vessel
Documentation Command.
(c) Upon receipt of the instrument in duplicate in accordance with
paragraph (b) of this section, the date and time of recording of the
instrument is the date and time the instrument submitted by facsimile
was filed.
(d) All instruments submitted by facsimile for filing must be
clearly legible, submitted from 8\1/2\-inch by 11-inch paper in not
less than 10-point type size, and accompanied by a cover sheet.
(e) The facsimile cover sheet required by paragraph (d) of this
section should indicate the name, address, telephone number and
facsimile telephone number of the person submitting the instrument by
facsimile, and the number of pages submitted by facsimile.
(f) The filing of any instrument submitted by facsimile is
terminated and the instrument will be returned to the submitter if:
(1) The instrument is subject to termination for any cause under
Sec. 67.217(a);
(2) The instrument required to be submitted in duplicate in
accordance with paragraph (b) of this section is not received within
the 10-day period; or
(3) There is any variance between the instrument submitted by
facsimile for filing and the instrument submitted in duplicate in
accordance with paragraph (b) of this section.
(g) When the filing of an instrument submitted by facsimile is
terminated for a variance in accordance with paragraph (f)(3) of this
section, the instrument submitted in duplicate in accordance with
paragraph (b) of this section will be deemed to be an original filing
under this subpart subject to termination under Sec. 67.217(a)(1). The
instrument submitted in duplicate will be deemed not in substantial
compliance with the applicable regulations in this part because of the
variance between it and the instrument submitted by facsimile. The
procedures for termination of filing and disposition of instruments
described in paragraphs (b) and (c) of Sec. 67.217 will apply.
3. In Sec. 67.500, paragraph (a) is revised to read as follows:
Sec. 67.500 Applicability.
(a) This subpart specifies documentation services provided for
vessels for which fees are applicable. No documentation service for
which a fee is applicable will be performed until the appropriate fee
has been paid. Fees are contained in Table 67.550.
* * * * *
4. Section 67.540 is added to read as follows:
Sec. 67.540 Facsimile handling fee.
A handling fee is charged for processing an instrument submitted by
facsimile for filing in accordance with subpart O of this part.
5. In Sec. 67.550, Table 67.550 is amended by adding ``Facsimile
submission handling'' as an entry following the entry ``Notice of claim
of lien and related instruments'' under the category ``Filing and
recording:'' to read as follows:
Sec. 67.550 Fee table.
* * * * *
Table 67.550.--Fees
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Activity Reference Fee
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* * * *
* * *
Facsimile submission handling... Subpart O................... \1\2.00
* * * *
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\1\Per page.
* * * * *
Dated: February 28, 1995.
N.W. Lemley,
Acting Chief, Office of Marine Safety, Security and Environmental
Protection.
[FR Doc. 95-5387 Filed 3-3-95; 8:45 am]
BILLING CODE 4910-14-M
