E7-14938. Vessel Documentation; Recording of Instruments

AGENCY:

Coast Guard, DHS.

ACTION:

Direct final rule; request for comments.

SUMMARY:

By this direct final rule, the Coast Guard is amending the vessel documentation regulations to eliminate the requirement to provide certain original documents to the National Vessel Documentation Center (NVDC) for recording, and to eliminate the additional fee for filing by facsimile. We are undertaking this rulemaking to conform our business practices with similar functions provided by other governmental entities and to allow our customers to avail themselves of better service through electronic filing. This rulemaking is expected to improve efficiency at the NVDC and permit the use of improved information collection technology.

DATES:

This rule is effective October 31, 2007, unless an adverse comment, or notice of intent to submit an adverse comment, reaches the Docket Management Facility on or before October 1, 2007. If an adverse comment, or notice of intent to submit an adverse comment, is received, we will withdraw this direct final rule and publish a timely notice of withdrawal in the Federal Register.

ADDRESSES:

You may submit comments identified by Coast Guard docket number USCG-2007-28098 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods:

(1) Web Site: http://dms.dot.gov.

(2) Mail: Docket Management Facility (M-30), U.S. Department of Transportation, West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590.

(3) Fax: [phone].

(4) Delivery: Room W12-140 on the Ground Floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329.

(5) Federal eRulemaking Portal: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this rule, call Mr. Thomas L. Willis, Director, National Vessel Documentation Center, U.S. Coast Guard, telephone [phone]. If you have questions on viewing or submitting material to the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone [phone].

SUPPLEMENTARY INFORMATION:

Submitting comments: If you submit a comment, please include your name and address, identify the docket number for this rulemaking (USCG-2007-28098), indicate the specific section of this document to which each comment applies, and give the reason for each comment. You may submit your comments and material by electronic means, mail, fax, or delivery to the Docket Management Facility at the address under ADDRESSES; but please submit your comments and material by only one means. If you submit them by mail or delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this rule in view of them.

Viewing comments and documents: To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://dms.dot.gov at any time, click on “Simple Search,” enter the last five digits of the docket number for this rulemaking, and click on “Search.” You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Privacy Act: Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review the Department of Transportation's Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477), or you may visit http://dms.dot.gov.

Regulatory Information

We are publishing a direct final rule under 33 CFR 1.05-55 because we do not expect an adverse comment. If no adverse comment or notice of intent to submit an adverse comment is received by October 1, 2007, this rule will become effective as stated in the DATES section. In that case, approximately 30 days before the effective date, we will publish a document in the Federal Register stating that no adverse comment was received and confirming that this rule will become effective as scheduled. However, if we receive an adverse comment or notice of intent to submit an adverse comment, we will publish a document in the Federal Register announcing the withdrawal of all or part of this direct final rule. If an adverse comment applies only to part of this rule (e.g., to an amendment, a paragraph, or a section) and it is possible to remove that part without defeating the purpose of this rule, we may adopt, as final, those parts of this rule on which no adverse comment was received. We will withdraw the part of this rule that was the subject of an adverse comment. If we decide to proceed with a rulemaking following receipt of an adverse comment, we will publish a separate notice of proposed rulemaking (NPRM) and provide a new opportunity for comment.

A comment is considered “adverse” if the comment explains why this rule or a part of this rule would be inappropriate, including a challenge to its underlying premise or approach, or would be ineffective or unacceptable without a change.

Background and Purpose

We are undertaking this rulemaking to conform our business practices with similar functions provided by other governmental entities and to allow our customers to avail themselves of better service through electronic filing. It will also permit implementation of the Electronic Signature Act in maritime financial transactions. In addition, we are eliminating the need for multiple copies of instruments to conform to changing business practices within the Coast Guard.

The Coast Guard records bills of sale, mortgages, and related instruments in accordance with the provisions of Chapter 313 of Title 46 of the U.S. Code. This is similar to service provided by county registries of deeds for real estate. However, unlike county registries, the Coast Guard requires the submission of an originally signed instrument accompanied by one or more copies. In addition, it has kept originally signed instruments and returned the copy or copies after annotating them with information about the recording.

In 1982, the Coast Guard promulgated a rule which required original instruments to be provided (47 FR 27490, June 24, 1982). The Coast Guard reaffirmed that rule in 1993, following codification of the Ship Mortgage Act (58 FR 60256, November 15, 1993). The Coast Guard's practice and regulation was further buttressed in 1996 when Congress enacted section 305 of Public Law 104-324 providing clear authority to accept instruments by electronic means, but requiring submission of the originals within ten days of the electronic filing. However, after enactment of the Electronic Signatures in Global and National Commerce Act, Public Law 106-229, Congress in 2002 amended section 31321((a)(4) of Title 46, U.S. Code, by repealing the requirement to present original instruments within ten days following electronic filing (Pub. L. 107-295, section 420). (See also, 15 U.S.C. 7031 encouraging the use of electronic signatures and the elimination of paper-based obstacles to electronic transactions.)

In 2006, the Coast Guard began scanning all instruments into an electronic data base from which copies may be printed. Providing a copy from the data base rather than annotating a copy provided by the submitter is a better business practice for two primary reasons. First, it is no longer necessary to track copies of paperwork through the office. More importantly, however, it ensures that the copy returned to the submitter is a true copy of what appears in the electronic data base and not something that merely appears to be a true copy.

Discussion of Rule

Section 67.209 is amended to eliminate the need to submit originally signed instruments plus a copy. Section 67.219 is amended to eliminate the need to submit original instruments after filing by facsimile. Section 67.218 is a new section providing procedures for filing by submitting the instrument in Portable Document Filing, commonly referred to as “pdf”. The fee for filing by facsimile is deleted. Instruments may be submitted to the National Vessel Documentation Center for filing by e-mailing them as .pdf attachments to [e-mail].

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. We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation is unnecessary.

There are no new costs or requirements associated with this rule. Although persons filing instruments need send only a single copy, the savings are insignificant.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

This rule will affect the following small entities: Small businesses, individuals, nonprofit organizations, and municipal governments currently owning documented vessels or seeking to document vessels in the future; brokers, attorneys, and law offices providing vessel documentation services; small shipbuilders building vessels which are subsequently documented; boat dealers selling vessels of at least five (5) net tons in size; and lending institutions engaging in preferred mortgage financing.

The changes in this rulemaking are procedural and administrative in nature. The changes are technical amendments which the affected small entities should have little difficulty understanding or adopting into their business practices. Moreover, there are no new reporting, recordkeeping or other requirements for compliance.

Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. If, however, you think that your business qualifies as a small entity and that this proposal will have a significant impact on your business, please submit a comment [see “ADDRESSES”] explaining why you think your business qualifies and in what way and to what degree this rulemaking will economically affect your business. Comments submitted in response to this finding will be evaluated under the criteria in the “Regulatory Information” section of this preamble.

Assistance for Small Entities

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult Mr. Thomas L. Willis, Director of the National Vessel Documentation Center, 792 TJ Jackson Drive, Falling Waters, WV 25419, telephone [phone]. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

Collection of Information

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Additionally, the Coast Guard estimates this rule will result in no change to the information collection burden associated with the existing collection of information entitled, “Vessel Documentation,” Office of Management and Budget Control Number 1625-0027, which expires on January 31, 2010.

Federalism

A rule has implications for federalism under Executive Order 13132, Federalism, if the rule has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

Taking of Private Property

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

Civil Justice Reform

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

Protection of Children

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

Indian Tribal Governments

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

Energy Effects

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

Technical Standards

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

Environment

We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(d), of the Instruction from further environmental documentation. These regulations concern the documentation of vessels. Under figure 2-1, paragraph (34)(d), of the Instruction, an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule.

List of Subjects in 46 CFR Part 67

• Reporting and recordkeeping requirements
• Vessels

For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 67 as follows:

Title 46—Shipping

PART 67—DOCUMENTATION OF VESSELS

1. The authority citation for part 67 continues to read as follows:

Authority: 14 U.S.C. 1664; 31 U.S.C. 9701; 42 U.S.C. 9118; 46 U.S.C. 2103, 2107, 2110, 12106, 12120, 12122; 46 U.S.C. app. 841a, 876; Department of Homeland Delegation No. 0170.1.

2. Revise § 67.209 to read as follows:

§ 67.209

No original instrument requirement.

A copy of the original signed and acknowledged instrument must be presented. The original instrument itself may be presented but is not required. The copy may be delivered to the National Vessel Documentation Center or transmitted by facsimile or in portable document format (.pdf) in accordance with the procedures in §§ 67.218 and 67.219 of this part. Signatures may be affixed manually or digitally.

3. Add new § 67.218 to subpart O to read as follows:

§ 67.218

Optional filing of instruments in portable document format as attachments to electronic mail.

(a) Any instrument identified as eligible for filing and recording under § 67.200 may be submitted in portable document format (.pdf) as an attachment to electronic mail (e-mail) for filing at the National Vessel Documentation Center. The e-mail address to be used for instrument filing may be obtained from the National Vessel Documentation Center Web site. If the instrument submitted for filing in .pdf format pertains to a vessel that is not a currently documented vessel, a completed Application for Initial Issue, Exchange, or Replacement Certificate of Documentation, or Return to Documentation (form CG-1258) or a letter application for deletion from documentation must already be on file with the National Vessel Documentation Center or must be submitted in .pdf format with the instrument being submitted in .pdf format for filing.

(b) All instruments submitted for filing in .pdf format must be clearly legible, be submitted from 81/2 inch by 11 inch paper in not less than 10-point type size, and submitted as an attachment to e-mail.

(c) The e-mail required by paragraph (b) should indicate:

(1) The name, address, telephone number, and e-mail address of the person submitting the instrument for filing in .pdf format;

(2) The number of pages submitted for filing in .pdf format; and

(3) The name of the vessel, official number or hull identification number of the vessel(s), and the name(s) of the owner(s) of the vessel(s) to which the instrument relates.

(d) The filing of any instrument submitted for filing in .pdf format is terminated and the instrument will be returned to the submitter if the instrument is subject to termination for any cause under § 67.217(a).

4. Revise § 67.219 to read as follows:

§ 67.219

Optional filing of instruments by facsimile.

(a) Any instrument identified as eligible for filing and recording under § 67.200 may be submitted for filing to the National Vessel Documentation Center by facsimile at [phone]. If the instrument submitted by facsimile for filing pertains to a vessel that is not a currently documented vessel, a completed Application for Initial Issue, Exchange, or Replacement Certificate of Documentation, or Return to Documentation (form CG-1258) or a letter application for deletion from documentation must already be on file with the National Vessel Documentation Center or must be submitted by facsimile with the instrument being submitted by facsimile for filing.

(b) All instruments submitted by facsimile for filing must be clearly legible, be submitted from 81/2 inch by 11 inch paper in not less than 10-point type size, and accompanied by a cover sheet.

(c) The cover sheet required by paragraph (b) should indicate:

(1) The name, address, telephone number, and facsimile telephone number of the person submitting the instrument by facsimile;

(2) The number of pages submitted by facsimile; and

(3) The name of the vessel, official number or hull identification number of the vessel(s), and the name(s) of the owner(s) of the vessel(s) to which the instrument relates.

(d) The filing of any instrument submitted by facsimile is terminated and the instrument will be returned to the submitter if the instrument is subject to termination for any cause under § 67.217(a).

§ 67.540

[Removed]

5. Remove § 67.540.

§ 67.550

[Amended]

6. Amend § 67.550 by removing from Table 67.550-Fees, the entry reading: “Facsimile submission handling Subpart O 2.00  ¹.”

Dated: July 26, 2007.

J.G. Lantz,

Acting Assistant Commandant For Prevention, U.S. Coast Guard.