05-9824. Merchant Marine Training

AGENCY:

Maritime Administration, Department of Transportation.

ACTION:

Final rule.

SUMMARY:

This rule revises and adopts as final the interim final rule published in the Federal Register (69 FR 31897) on June 8, 2004. The Maritime Administration (MARAD) is publishing this final rule to implement changes to its regulations in part 310 regarding Maritime Education and Training. This rulemaking updates the Maritime Education and Training regulations to conform with title XXXV, subtitle A, of the National Defense Authorization Act for Fiscal Year 2004, regarding the administration of state, regional and United States merchant marine academies. This rulemaking also makes non-substantive technical changes to part 310.

DATES:

This final rule is effective May 19, 2005.

ADDRESSES:

This final rule is available for inspection and copying between 10 a.m. and 5 p.m., ET, Monday through Friday, except Federal holidays at the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 7th St., SW., Washington, DC 20590. An electronic version of this document along with all documents entered into this docket are available on the World Wide Web at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

Jay Gordon, Maritime Administration, 400 7th St., SW., Washington, DC 20590; telephone: [phone]; or e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

On June 8, 2004, MARAD published an interim final rule in the Federal Register (69 FR 31897) that amended existing regulations in 46 CFR part 310 regarding Maritime Education and Training. This rulemaking adopts the interim final rule as a final rule and revises the interim rule in two ways. First, the interim final rule provided in section 310.12-1 that MARAD would post on our Web site a model agreement between MARAD and schools for annual maintenance and support payments, Federal student subsistence and incentive payments, and fuel assistance. In lieu of posting the agreement on our Web site, MARAD is amending this section to provide that interested parties may obtain copies of the agreement from the Office of Policy and Plans. The second change effected by this final rule involves sections 310.7(b)(5) and 310.58(b). Both sections describe the number of days a graduate must serve each year on a vessel at sea in order to satisfy this component of his/her service obligations. The interim final rule indicated in both sections that the number of days would be posted on MARAD's Web site. At this time, MARAD has decided not to post the number of days, but has instead decided to amend the State maritime academy's regulations at section 310.7(b)(5) to match the Merchant Marine Academy's regulations at 310.58(b), which provide a default minimum number of sea days that will satisfy the obligation as well as an alternate method to derive the number of sea days in lieu of the default number (i.e., the median number of days of seafaring employment based on articles achieved by deck or engine officers in the most recent calendar year for which statistics are available).

The changes set forth in the interim rule, with the revisions noted above, are summarized in the section-by-section analysis below.

Comments on the interim rule were due by August 9, 2004, and no comments were received.

Section-by-Section Analysis

For purposes of the following analysis, the term “Act” refers to the National Defense Authorization Act for Fiscal Year 2004, Pub. L. 108-136, unless otherwise indicated.

Subpart A—Regulations and Minimum Standards for State, Territorial or Regional Maritime Academies and Colleges

Section 310.1 Definitions

(b) Act—We update the term “Act” to include sections of the Maritime Education and Training Act of 1980, Public Law 96-453, as amended, which includes the changes effected by the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, and any subsequent amendments.

(i) Cost of Education Provided—is a concept added by the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, in connection with requiring Student Incentive Payment (“SIP”) students defaulting on their obligations to repay the student incentive payments made to such students by the Federal Government.

(j)-(r)—Definitions under these designations were renumbered.

Section 310.3 Schools and Courses

Changes in this section include capitalizing the words “training ship” and replacing the title of the Office of Maritime Labor and Training with the Office of Policy and Plans.

Section 310.7 Federal Student Subsistence Allowances and Student Incentive Payments

Section 310.7(b)(1)—Under the Oceans Act of 1992, Public Law 102-587, the student incentive payment amount was increased from $1200 per annum to $3000 per annum. While MARAD's regulations currently list $1200 as the annual SIP payment amount, students currently receive payments of $3000 per annum. Students receiving $3,000 under their existing service obligation contracts will have the option of continuing to receive the $3,000 payment under their old service obligation contracts or executing new service obligation contracts and receiving the increased amount of $4000 per annum. The new service obligation contracts will include the increased obligations required by the new law. Individuals must execute the new service obligation contracts to receive the increased SIP payment amount.

Section 310.7(b)(3) addresses the form of the service obligation contract. This paragraph is changed to reflect revisions in the Act.

Section 310.7(b)(3)(ii)—Under former (b)(3)(ii), the separation of an individual by the School released that individual from his or her obligation to complete the course of instruction at the School. By virtue of the changes in the law, the separation of an individual by the School no longer releases an individual from this obligation. An individual who is separated by the School is now in default of his or her service obligations and is liable for the remedies for failure to fulfill these obligations, such as induction into military service or recovery by the Federal Government of the Cost of Education Provided, plus interest and attorney's fees.

Section 310.7(b)(3)(iv)—The previous law required graduates to maintain their license for at least six (6) years following graduation. This previous law required the graduate to maintain a Coast Guard license at least equal to the license, including endorsements, which such graduate had upon graduation from the School. The subsequent promulgation of Standards of Training, Certification and Watchkeeping (STCW) requirements created a situation in which various graduates were required to take additional courses in order to maintain such a license. Given the unanticipated impact of the STCW requirements, the Administration has determined that individuals graduating without the necessary STCW courses need not take these courses and can satisfy their service obligations by maintaining a more restricted type of Coast Guard license, other than a continuity license. Continuity licenses were not deemed acceptable because they do not allow such graduates to sail in any capacity.

Individuals executing or reexecuting service obligation contracts after the effective date of the Act are specifically required by law to maintain licenses that are at least equal in status to the licenses they had at the time of graduation (i.e., the ability to sail without restrictions in both domestic and foreign commerce). Such graduates are required to take all courses necessary to maintain their licenses, even with respect to unforeseen future requirements. The type of Coast Guard license that is required to satisfy the service obligation of maintaining a license for at least six (6) years following graduation is a license containing appropriate national and international endorsements and certifications required by the United States Coast Guard for service both on domestic and international voyages. “Appropriate” in this instance means the same endorsements and certifications held at the date of graduation, or the equivalent. Restricted licenses limited in applicability to just portions of the domestic or international voyages do not satisfy this obligation, nor do continuity licenses. By this change, Congress confirmed the Administration's longstanding interpretation of the law in this respect—that graduates continue to maintain Coast Guard licenses that are not more restricted than the licenses with which they graduated.

Section 310.7(b)(3)(vi)—The Act now allows employment within the Federal Government to satisfy the requirement that graduates “serve in the foreign or domestic commerce” or “national defense” of the United States. Such employment in the Federal Government must be significantly maritime-related and serve the national security interests of the United States.

The determination of whether such employment satisfies this service obligation is made by the Administration. Examples of civilian employment that might satisfy this obligation are civilian positions relating to vessel or port security in the Navy, the Department of Homeland Security, or the Transportation Security Administration. “Significant” is equated to a material or essential portion of an individual's responsibilities. It does not mean a “majority” of such individual's responsibilities, but means more than just an incidental part.

Section 310.7(b)(5)—This section is amended to provide a default minimum number of sea days as well as an alternate method to determine the minimum number of sea days to be used in lieu of the default number.

Section 310.7(b)(7) Breach of Contract

Section 310.7(b)(7)(i)(A)—Undergraduate Breach/Induction into Armed Forces: This paragraph is substantially rewritten to conform to the new terms of the Act. Any individual who has accepted SIP payments for a minimum of two (2) academic years and fails to fulfill any of their service obligations may be ordered by the Secretary of Defense to active duty in the Armed Forces of the United States to serve a period of time not to exceed two (2) years. In cases of hardship or impossibility of performance of the provisions of the service obligation contract due to accident, illness or other justifiable reason, as determined by the Maritime Administrator, this requirement may be waived in whole or in part. See section 310.7(b)(8).

Section 310.7(b)(7)(i)(B)—Undergraduate Breach/Collection of Cost of Education Provided: This paragraph contains a new provision set forth in the Act. It authorizes the Secretary of Transportation, acting through the Maritime Administrator, to take action against defaulting individuals to recover the Cost of Education Provided to such individuals, plus interest and attorney's fees. Such authority may be exercised in instances where the Maritime Administrator determines that it would better serve the national interest to recover the Cost of Education Provided from a defaulting individual rather than to refer such individual to the Secretary of Defense for induction into the Armed Forces of the United States.

Section 310.7(b)(7)(i)(C)—Sets forth the discretionary authority of the Maritime Administrator to reduce the amount to be recovered from such defaulting individuals to reflect partial performance of service obligations and such other factors as the Maritime Administrator determines merit such reduction. This provision is in addition to the Maritime Administrator's authority to waive the service obligations as set forth in section 310.7(b)(8).

Section 310.7(b)(7)(i)(D)—For purposes of paragraph (b)(7)(i)(A) of this section, an “academic year” is defined as the completion by a student of the required number of semesters, trimesters, or quarters, as applicable, whether at school or at sea, which comprise a complete course of study for an academic year. Thus, liability under paragraph (b)(7)(i)(A) begins for students at the beginning of their third (3rd) academic year, whether at school or at sea.

Section 310.7(b)(7)(ii) Post Graduation Defaults

Section 310.7(b)(7)(ii)(A)—Individuals who breach their service obligations after graduation are subject to be ordered to active duty in the Armed Forces of the United States for a period of time not less than two (2) years and not more than the unexpired portion of the three (3) years of service required in the foreign and domestic commerce or the national defense of the United States following graduation.

Section 310.7(b)(7)(ii)(B)—If the Secretary of Defense is unable or unwilling to order an individual to active duty or if the Maritime Administrator determines that reimbursement of the Cost of Education Provided would better serve the interests of the United States, the Maritime Administrator may recover from the defaulting individual the Cost of Education Provided by the Federal Government, plus interest and attorney's fees.

Section 310.7(b)(7)(ii)(C)—Sets forth the discretionary authority of the Maritime Administrator to reduce the amount to be recovered from such defaulting individual to reflect partial performance of service obligations and such other factors as the Maritime Administrator determines merit such reduction.

This provision is in addition to the Maritime Administrator's authority to waive the service obligations. Such authority is set forth in section 310.7(b)(8) and may be exercised in cases where there would be undue hardship or impossibility of performance of the provisions of the service obligation contract due to accident, illness or other justifiable reason.

Section 310.7(b)(10)(ii)(C)—Reflects that graduates are required to keep the Office of Policy and Plans, as opposed to the Office of Maritime Labor, Training and Safety, aware of the graduates' current mailing addresses.

Section 310.7(b)(11)—This new paragraph reflects that the Administration is now authorized to collect debts owed to the Federal Government by commencing court proceedings as well as utilizing the Federal debt collection procedures set forth in chapter 176, title 28 of the United States Code and other applicable administrative remedies for debt collection. Such administrative collection options include offsetting debts against defaulting individuals' tax refunds.

Section 310.12-1 Form of Agreement

The form of agreement has been deleted in its entirety. Setting forth a required agreement in the Administration's regulations constrained the ability of the Administration and the Schools to modify the agreement to reflect changing circumstances. Not only would the agreements have to be modified, but also the regulations would have to be changed. Copies of the agreement may be obtained from the Office of Policy and Plans.

Subpart C—Admission and Training of Midshipmen at the United States Merchant Marine Academy

Section 310.51 Definitions

(b) Act—We update the term “Act” to include sections of the Maritime Education and Training Act of 1980, Public Law 96-453, as amended, which includes the changes effected by the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, and any subsequent amendments.

(f) Cost of Education Provided—is a concept added by the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, in connection with recovery of funds from individuals failing to perform their service obligations, both before and after graduation. It is the intent of the Act that the Administration recover the financial costs incurred by the Federal Government for providing training or financial assistance to students at the Academy. For students at the Academy, this means the pro rata cost of all charges incurred with respect to the Academy for a given fiscal year, including room, board, classroom academics, and other training activity costs as well as any direct financial assistance given to such individual.

(g)-(i)—Definitions under these designations were renumbered.

Section 310.58 Service Obligation for Students Executing or Reexecuting Contracts

Section 310.58(a)—The terms of the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, apply to individuals executing service obligation contracts after November 24, 2003. No individual previously having executed a service obligation contract is required by virtue of the amendments of the Act to execute a new service obligation contract. Individuals executing contracts after November 24, 2003, even those who have already executed a service obligation contract, are required to execute the new service obligation contract if they receive new consideration from the Federal Government for such execution.

Section 310.58(a)(1)—Under former section 310.58(a)(1), the separation of an individual by the Academy released that individual from his or her obligation to complete the course of instruction at the Academy. By virtue of the changes in the law, the separation of an individual by the Academy no longer releases an individual from this obligation. An individual who is separated by the Academy is now in default of his or her service obligations and is liable for the remedies for failure to fulfill these obligations. Among these remedies are induction into military service or recovery by the Federal Government of the Costs of Education Provided.

Section 310.58(a)(3)—Under former section 310.58(a)(3), graduates were required to maintain their licenses for at least six (6) years following graduation. The previous law required the graduate to maintain a Coast Guard license at least equal to the license that such graduate had upon graduation from the Academy. The subsequent promulgation of STCW requirements created a situation wherein various graduates were required to take additional courses in order to maintain such a license. Given the unanticipated impact of the STCW requirements, the Administration determined that individuals graduating without the necessary STCW courses need not take these courses and can satisfy their service obligations by maintaining a more restricted type of Coast Guard license, other than a continuity license. Continuity licenses were not acceptable because they do not allow such graduates to sail in any capacity.

Individuals executing service obligation contracts after the effective date of the Act are now required to maintain their licenses in at least equal status to the status they had at the time of graduation (i.e., the ability to sail without restrictions in both domestic and foreign commerce). Such graduates are required to take all courses necessary to maintain their licenses, even with respect to unforeseen future requirements. The type of Coast Guard license that is required to satisfy the service obligation of maintaining a license for at least six (6) years following graduation is a license containing appropriate national and international endorsements and certifications required by the United States Coast Guard for service both on domestic and international voyages. “Appropriate” in this instance means the same endorsements and certifications held at the date of graduation, or the equivalent. Restricted licenses limited in applicability to just portions of the domestic or international voyages do not satisfy this obligation, nor do continuity licenses. The Act confirmed the Administration's longstanding interpretation of the law in this respect—that graduates continue to maintain Coast Guard licenses that are not more restricted than the licenses with which they graduated.

Section 310.58(a)(5) has been amended to reflect the statutory authorization of additional ways to perform the employment aspects of the service obligation requirements. The Act now allows employment within the Federal Government to satisfy the requirement that graduates “serve in the foreign or domestic commerce” or “national defense” of the United States. Such employment in the Federal Government must be significantly maritime-related and serve the national security interests of the United States.

The determination of whether such employment satisfies the service obligation requirements is made by the Administration. Examples of civilian employment that might satisfy the service obligation are civilian positions relating to vessel or port security in the Navy, the Department of Homeland Security, or the Transportation Security Administration.

“Significantly” is equated to a material or essential portion of an individual's responsibilities. It does not mean a “majority” of such individual's responsibilities, but means more than just an incidental part.

Section 310.58(b) is amended for purposes of clarity.

Section 310.58(e)(1) Breach of Contract Before Graduation

Section 310.58(e)(1)(i)—This paragraph is substantially rewritten to conform to the new terms of the Act. Any individual who has attended the Academy for a minimum of two (2) academic years who fails to fulfill any of their service obligations may be ordered by the Secretary of Defense to active duty in the Armed Forces of the United States to serve a period of time not to exceed two (2) years. In cases of hardship or impossibility of performance of the provisions of the service obligation contract due to accident, illness or other justifiable reason, as determined by the Maritime Administrator, this requirement may be waived in whole or in part. See section 310.58(f).

Section 310.58(e)(1)(ii)—This paragraph contains a provision set forth in the Act. It authorizes the Secretary of Transportation, acting through the Maritime Administrator, to take action against defaulting individuals to recover the Cost of Education Provided from individuals who have attended the Academy for more than two (2) academic years, but have not yet graduated.

Section 310.58(e)(1)(iii)—For purposes of paragraph (e)(1)(i) of this section, an “academic year” is defined as the completion by a student of a total of three (3) trimesters, whether at the Academy or at sea. Thus, liability under paragraph (e)(1)(i) begins for students when they begin their seventh (7th) trimester, whether at the Academy or at sea.

Section 310.58(e)(2) Breach After Graduation

Section 310.58(e)(2)(i)—Individuals who breach their service obligations after graduation are subject to be ordered to active duty in the Armed Forces of the United States for a period of time of not less than three (3) years and not more than the unexpired portion of the five (5) years of service required in the foreign and domestic commerce or the national defense of the United States following graduation.

Section 310.58(e)(2)(ii)—If the Secretary of Defense is unable or unwilling to order an individual to active duty or if the Maritime Administrator determines that reimbursement of the Cost of Education Provided would better serve the interests of the United States, the Maritime Administrator may recover from the defaulting individual the Cost of Education Provided by the Federal Government.

Section 310.58(e)(2)(iii) sets forth the discretionary authority of the Maritime Administrator to reduce the amount to be recovered from such defaulting individual to reflect partial performance of service obligations and such other factors as the Maritime Administrator determines merit such reduction. This provision is in addition to the Maritime Administrator's authority to waive the service obligations as set forth in section 310.58(f).

Section 310.58(h)(2)(iii)—Reflects that graduates are required to keep the Office of Policy and Plans, as opposed to the Office of Maritime Labor, Training and Safety, aware of the graduates' current mailing addresses.

Section 310.58(i)—This new paragraph reflects that the Administration is now authorized to collect debts owed to the Federal Government by commencing court proceedings as well as utilizing the Federal debt collection procedures set forth in chapter 176, title 28 of the United States Code and other applicable administrative remedies for debt collection. Such administrative collection options include offsetting debts against defaulting individuals' tax refunds.

Regulatory Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

This final rule is not considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, was not reviewed by the Office of Management and Budget. This final rule is not likely to result in an annual effect on the economy of $100 million or more. This final rule is also not significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034, February 26, 1979). The economic impact associated with this rule, if any, should be minimal; therefore, further regulatory evaluation is not necessary. This final rule is intended only to update provisions in part 310 to conform to the National Defense Authorization Act for Fiscal Year 2004 and to make technical changes and corrections.

Administrative Procedure Act

The Administrative Procedure Act (5 U.S.C. 553) provides an exception to notice and comment procedures when they are unnecessary or contrary to the public interest. MARAD finds that under 5 U.S.C. 553(b)(3)(B), good cause exists for not providing notice and comment since this final rule only updates existing regulations to conform to the National Defense Authorization Act for Fiscal Year 2004 and makes non-substantive technical corrections. While MARAD solicited public comments on the interim final rule, no comments were received.

Regulatory Flexibility Act

The Maritime Administrator certifies that this final rule will not have a significant economic impact on a substantial number of small entities. This final rule is intended only to update provisions in part 310, which do not affect a substantial number of small entities, but instead affect the United States Merchant Marine Academy, State maritime academies, and students thereof.

Federalism

We have analyzed this final rule in accordance with the principles and criteria contained in Executive Order 13132 (Federalism) and have determined that it does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. These regulations have no substantial effect on the States, the current Federal-State relationship, or the current distribution of power and responsibilities among local officials. Therefore, consultation with State and local officials is not necessary.

Executive Order 13175

MARAD does not believe that this final rule will significantly or uniquely affect the communities of Indian tribal governments when analyzed under the principles and criteria contained in Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments). Therefore, the funding and consultation requirements of this Executive Order do not apply.

Environmental Impact Statement

We have analyzed this final rule for purposes of compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and have concluded that under the categorical exclusions in section 4.05 of Maritime Administrative Order (MAO) 600-1, “Procedures for Considering Environmental Impacts,” 50 FR 11606 (March 22, 1985), neither the preparation of an Environmental Assessment, an Environmental Impact Statement, nor a Finding of No Significant Impact for this final rule is required. This final rule involves administrative and procedural regulations that have no environmental impact.

Unfunded Mandates Reform Act of 1995

This final rule does not impose an unfunded mandate under the Unfunded Mandates Reform Act of 1995. It does not result in costs of $100 million or more, in the aggregate, to any of the following: State, local, or Native American tribal governments, or the private sector. This final rule is the least burdensome alternative that achieves the objective of the rule.

Paperwork Reduction Act

This rulemaking contains no new or amended information collection or recordkeeping requirements that have been approved or require approval by the Office of Management and Budget.

List of Subjects in 46 CFR Part 310

• Federal Aid Programs
• Reporting and recordkeeping requirements
• Schools, and Seamen

Accordingly, the interim final rule amending 46 CFR part 310 that was published in the Federal Register on June 8, 2004 (69 FR 31897), is adopted as a final rule with the following changes.

PART 310—MERCHANT MARINE TRAINING

1. The authority citation for part 310 continues to read as follows:

Authority: 46 App. U.S.C. 1295; 49 CFR 1.66.

2. Amend § 310.7 by revising paragraph (b)(5) to read as follows:

§ 310.7

Federal student subsistence allowances and student incentive payments.

* * * * *

(b) * * *

(5) Afloat employment year. For purposes of the service obligation, a satisfactory year of afloat employment shall be the lesser of—

(i) 150 days; or

(ii) The number of days employed afloat that is at least equal to the median number of days of seafaring employment under articles achieved by deck or engine officers in the most recent calendar year for which statistics are available.

* * * * *

3. Revise § 310.12-1 to read as follows:

§ 310.12-1

Form of Agreement.

The form of agreement between the Maritime Administrator and schools for annual maintenance and support payments, Federal student subsistence and incentive payments and fuel assistance under the 1958 Act and the Act may be obtained from the Office of Policy and Plans, Maritime Administration, 400 7th St., SW., Washington, DC 20590.

4. Amend § 310.58 by revising paragraph (b) to read as follows:

§ 310.58

Service obligation for students executing or reexecuting contracts.

* * * * *

(b) Service as a merchant marine officer. For purposes of the service obligation set forth in paragraph (a)(5)(i) of this section, a satisfactory year of service on vessels in the United States merchant marine as a merchant marine officer shall be the lesser of—

(1) 150 days; or

(2) The number of days that is at least equal to the median number of days of seafaring employment under articles achieved by deck or engine officers in the most recent calendar year for which statistics are available.

* * * * *

By Order of the Maritime Administrator.

Dated: May 12, 2005.

Joel C. Richard,

Secretary, Maritime Administration.