2010-30151. Updates to Vessel Inspection Fees

AGENCY:

Coast Guard, DHS.

ACTION:

Notice of inquiry; request for information.

SUMMARY:

The Coast Guard seeks public comment on updating vessel inspection fees. The Coast Guard, by regulation, establishes inspection fees for U.S. commercial vessels required to maintain a Certificate of Inspection and foreign tankships and mobile offshore drilling units required to maintain a Certificate of Compliance. This includes overseas inspection and examination fees. The Coast Guard is considering options for updating and/or restructuring these inspection fees to ensure their adequacy and equity, and for adapting to changes that have occurred since they were last modified in 1998. The Coast Guard seeks information on factors to consider when updating these fees.

DATES:

Comments and related material must either be submitted to our online docket via http://www.regulations.gov on or before March 1, 2011 or reach the Docket Management Facility by that date.

ADDRESSES:

You may submit comments identified by docket number USCG-2010-0245 using any one of the following methods:

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

(2) Fax: [phone].

(3) 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 20590-0001.

(4) Hand delivery: Same as mail address above, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329.

To avoid duplication, please use only one of these four methods. See the “Request for Information” portion of the SUPPLEMENTARY INFORMATION section below for instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this notice of inquiry, call or e-mail Lieutenant Commander Alan Moore, U.S. Coast Guard, at telephone: [phone] or e-mail: [e-mail]. If you have questions on viewing or submitting material to the docket, call Ms. Renee V. Wright, Program Manager, Docket Operations, at telephone: [phone].

SUPPLEMENTARY INFORMATION:

Request for Information

We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided.

Submitting comments and information: If you submit a comment, please include the docket number for this notice of inquiry (USCG-2010-0245), and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. We recommend that you include your name and a mailing address, an e-mail address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov,, enter “USCG-2010-0245” in the “Keyword” box, and click “Search.” Then, click on the “Submit a Comment” link. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments 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.

Viewing comments and documents: To view comments, and other documents available in the docket, go to http://www.regulations.gov,, enter “USCG-2010-0245” in the “Keyword” box, and click “Search.” If you do not have access to the Internet, you may view the docket by visiting the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation 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 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 a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the Federal Register (73 FR 3316).

Background and Purpose

In the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, November 5, 1990) Congress amended 46 U.S.C. 2110 by removing long-standing prohibitions against imposing certain inspection fees. Congress also directed the Coast Guard to establish inspection fees to recover costs associated with providing Coast Guard vessel inspection services.

On December 18, 1991, the Coast Guard published a notice of proposed rulemaking (NPRM) (56 FR 65786) on Direct User Fees for Inspection or Examination of U.S. and Foreign Commercial Vessels. A correction to the proposed rule (56 FR 66766) was issued on December 24, 1991, adding Appendix A, a summary of the preliminary Regulatory Evaluation. Following publication of the NPRM, the Coast Guard received 1,092 written comments and 176 statements from participants at public meetings. All segments of the maritime industry generally objected to the proposed imposition of any inspection fees for the inspection of their vessels.

On March 13, 1995, the Coast Guard published a final rule on Direct User Fees for Inspection or Examination of U.S. and Foreign Commercial Vessels (60 FR 13550). Through this final rule, Coast Guard added a new subpart 2.10, Fees, to Title 46 Code of Federal Regulations (CFR), part 2.

On April 21, 1997, as required by the Coast Guard Authorization Act of 1996, the Coast Guard published an interim rule titled Vessel Inspection User Fees (62 FR 19229) that reduced annual vessel inspection fees for small passenger vessels and excluded publicly owned ferries from payment of vessel inspection fees. The interim rule also revised the existing discretionary exemption criteria to allow additional vessels to qualify for exemptions from the annual fee. The Coast Guard published the final rule (63 FR 59472) on November 4, 1998, adding several new definitions and amending the exemptions section to exclude inspection fees for qualifying vessels owned or operated by certain non-profit organizations.

Currently, the Coast Guard collects inspection fees to recover the costs of providing vessel inspection services in support of commercial vessels required to have Certificates of Inspection (COIs) (for U.S. vessels) or Certificates of Compliance (COCs) (for foreign vessels) in order to meet statutory and regulatory requirements. Additional fees are required for inspections and examinations conducted at overseas locations.

The inspection fee amounts have not been updated since 1998. Office of Management and Budget Circular Number A-25 directs a biennial review of inspection fees. The Coast Guard completed its last review on May 30, 2008. That review, which is available in the docket, accounted for various inflations and revealed that the cost associated with marine inspection services exceeds the inspection fees collected, which have not been adjusted since 1998. Based on this review, the Coast Guard is considering adjusting its vessel inspection fees.

Because there have been many changes since the last update to 46 CFR part 2, subpart 2.10, Fees, both in the maritime industry and in the Coast Guard's commercial vessel inspection program, the Coast Guard is seeking public input on any such update. This notice of inquiry and request for information seeks public comment and information to aid the Coast Guard in updating and/or restructuring vessel inspection fees.

With some exceptions, the current vessel inspection fees are assigned based on vessel service and length. The Coast Guard designed this fee structure based on these factors to offset the Coast Guard's cost of providing vessel inspection services. The vessel inspection and fee categories were derived from inspection activity data during the years 1987, 1988, 1989, and 1990, and included the contemporary program costs associated with conducting vessel inspection and examination activities by Coast Guard personnel. The current annual vessel inspection fee structure is shown in the table below, as set forth in 46 CFR 2.10-101. Section 2.10-101 covers U.S. vessel inspection fees plus other fees charged for foreign tankships and foreign mobile offshore drilling units trading in U.S. ports. Subpart 2.10 also sets forth fees for inspections conducted at overseas locations.

Certain inspection fees have been capped by statute; the Coast Guard Authorization Act of 1996 limited the amount of fees that may be charged to small passenger vessels as defined in Title 46 CFR 2.10-25, and the Omnibus Budget and Reconciliation Act of 1990 limited the annual vessel inspection fee for non-self propelled tank barges. In any update to 46 CFR part 2, subpart 2.10, the Coast Guard does not intend to make any changes to these capped fees or to any currently excluded or exempted category vessels despite being required to maintain a COI. For convenience, the table in 46 CFR 2.101 listing inspection fees has been reproduced below.

Table 2.10-101—Annual Vessel Inspection Fees for U.S. And Foreign Vessels Requiring a Certificate of Inspection

Any inspected vessel not listed in this table	$1,030
Freight barges:
Length not greater than 150 feet	495
More than 150 feet but not more than 300 feet	610
More than 300 feet	955
Freight ships:
Length not greater than 100 feet	1,425
More than 100 feet but not more than 300 feet	1,870
More than 300 feet	5,410
Industrial Vessels:
Length not greater than 200 feet	1,435
More than 200 feet	2,550
Mobile Offshore Drilling Units (MODUs):
Drill ship MODUs	6,710
Submersible MODUs	4,695
Self-elevating MODUs	4,695
Semi-submersible MODUs	8,050
Nautical School Vessels:
Length not greater than 100 feet	835
More than 100 feet but not more than 200 feet	1,450
More than 200 feet	7,205
Oceanographic Research Vessels:
Length not greater than 170 feet	840
More than 170 feet but not more than 240 feet	1,980
More than 240 feet	3,610
Offshore Supply Vessels:
Length not greater than 140 feet	1,135
More than 140 feet	1,470
Offshore Supply Vessels: Alternate Reinspection Program
Length not greater than 140 feet	940
More than 140 feet	1,260
Passenger Barges:
Less than 100 gross tons and:
Less than 65 feet in length	300
65 feet or more in length	600
100 gross tons or more and:
Certified for fewer than 150 passengers	2,215
Certified for 150 or more passengers	2,525
Passenger Ships:
Length not greater than 250 feet:
Certified for fewer than 150 passengers	3,600
Certified for 150 or more passengers	4,050
More than 250 feet but not more than 350 feet	5,330
More than 350 feet but not more than 450 feet	6,835
More than 450 feet	14,650
Sailing School Vessels:
Length not greater than 30 feet	530
More than 30 feet but not more than 65 feet	560
More than 65 feet	980
Sea-going Towing Vessels	2,915
Small Passenger Vessels:
Less than 65 feet in length	300
65 feet or more in length	600
Tank Barges	500
Tankships:
Length not greater than 100 feet	1,295
More than 100 feet but not more than 300 feet	2,310
More than 300 feet	5,805
Liquefied Gas Tankships	12,120

Fees generated by 46 CFR part 2, subpart 2.10 are deposited in the general fund of the U.S. Treasury as offsetting receipts of the Department of Homeland Security and are assigned generally to Coast Guard activities. The Coast Guard does not directly benefit from the collection of inspection fees. The Coast Guard's intent, during any update to subpart 2.10, is to consider viable options for updating and/or restructuring the inspection fees listed above to ensure their adequacy and equity, plus to adapt to changes that have occurred since inspection fee amounts were last modified in 1998. It is expected that any update to subpart 2.10 will ensure a more comprehensive, equitable, and current inspection fee structure.

Request for Information

Through this notice of inquiry, the Coast Guard asks for comments and information to consider in updating vessel inspection fees. Please consider the following questions when preparing comments:

• Should the Coast Guard restructure the current vessel inspection fees?
• What factors, such as length, tonnage, type of vessel, inspection time, type of service, number of crew, number of passengers, or length of operating season, should be considered in restructuring the vessel inspection fees?
• How often or at what frequency should inspection fees be adjusted?
• Should the fee be indexed based on economic measures?
• Should the fee be a direct bill based on the inspection type and frequency (to include and not be limited to separate fees for annual inspections, periodic inspections, re-examinations, hull examinations, and deficiency follow-ups) based on program costs and Coast Guard personnel hours incurred?
• Should the Coast Guard impose fees on a vessel based upon the number of visits to complete the inspection or examination?
• Should vessel owners or operators apply annually for exemptions and waivers?
• Should the Coast Guard apply inspection fees to new construction vessels and associated plan review?
• Should the Coast Guard apply inspection fees to vessels undergoing major alterations where new plan review and onsite verification is required?
• Should separate fees be developed for vessels enrolled in the Alternate Compliance and Streamlined Inspection Programs under Title 46 CFR Part 8—Vessel Inspection Alternatives?

This notice of inquiry is issued under authority of 46 U.S.C. 3305, 46 U.S.C. 3306, Department of Homeland Security Delegation No. 0170.1.

Dated: September 10, 2010.

Kevin S. Cook,

Rear Admiral, U.S. Coast Guard, Director of Prevention Policy.