E8-22235. Capital Construction Fund

AGENCY:

Maritime Administration, Department of Transportation.

ACTION:

Final rule.

SUMMARY:

The Maritime Administration is issuing this final rule to implement provisions of the Energy Independence and Security Act of 2007 and amend the definition of a “qualified vessel” under the Capital Construction Fund. This rule is final because its underlying statutes leave no discretion; therefore, a notice of proposed rulemaking is not required.

DATES:

Effective Date: This final rule is effective September 30, 2008.

FOR FURTHER INFORMATION CONTACT:

Murray Bloom, Chief, Division of Maritime Programs, Maritime Administration at 202-366-5320, via e-mail at [e-mail], or by writing to Murray Bloom, Office of the Chief Counsel, Maritime Administration, MAR-222, 1200 New Jersey Avenue, SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Background

The Capital Construction Fund allows a deferral of federal income tax provided that the amount of the tax deferral is deposited into a fund to be used for the purpose of acquiring, constructing or reconstructing U.S.-built, U.S.-documented vessels. Such vessels are called “qualified vessels,” and they must be operated in the United States foreign, Great Lakes or noncontiguous domestic trade. On December 19, 2007, the President signed Public Law 110-140, the Energy Independence and Security Act of 2007, which contains Title XI—Energy Transportation and Infrastructure, Subtitle C—Department of Transportation, authorizing the creation of a new Short Sea Transportation Program. The Short Sea Transportation Program establishes an expanded definition of a qualified vessel under the Capital Construction Fund. Public Law 110-140 also expands the trade permitted to qualified vessels by allowing qualified vessels to operate in the short sea transportation trade in addition to the other trades presently permitted. Since Public Law 110-140 specifically defines “short sea transportation trade,” this final rule merely amends the existing regulation by including the statutory definition and making other conforming changes. Separately, Congress enacted Public Law 109-304 to complete the codification of Title 46, United States Code. This statute restated section 607 of the Merchant Marine Act, 1936, without substantive change. Section 607 is now section 53501, et seq. This final rule updates the statutory references in the regulation to conform to the new codification.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review), and Department of Transportation (DOT) Regulatory Policies; Public Law 104-121

This rulemaking is not significant under section 3(f) of Executive Order 12866 and as a consequence, OMB did not review the rule. This rulemaking is also not significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034; February 26, 1979). It is also not considered a major rule for purposes of Congressional review under Public Law 104-121. The Maritime Administration believes that the economic impact of this rulemaking is so minimal as to not warrant the preparation of a full regulatory evaluation. This rulemaking amends the definition of a qualified vessel to conform to the newly enacted statute.

Executive Order 13132

We have analyzed this rulemaking 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. The regulations have no substantial effects on the States, the current Federal-State relationship, or the current distribution of power and responsibilities among various local officials. Therefore, consultation with State and local officials was not necessary.

Executive Order 13175

Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, dated November 6, 2000, seeks to establish regular and meaningful consultation and collaboration with tribal officials in the development of Federal policies that have tribal implications, to strengthen the United States government-to-government relationships with Indian tribes, and to reduce the imposition of unfunded mandates upon Indian tribes. Executive Order 13175 does not apply to this regulation as it does not affect, directly or indirectly, Indian tribes.

Regulatory Flexibility

The Regulatory Flexibility Act requires us to assess the impact that regulations will have on small entities. After analysis of this final rule, the Maritime Administrator certifies that this final rule will not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

This final rule will not impose an unfunded mandate under the Unfunded Mandates Reform Act of 1995. It will 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, and is the least burdensome alternative that achieves this objective of U.S. policy. Department of Transportation guidance requires the use of a revised threshold figure of $136.1 million, which is the value of $100 million in 2008 after adjusting for inflation.

Environmental Assessment

We have analyzed this final rule for purposes of compliance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and we have concluded that, under the categorical exclusions provision 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 rulemaking is required. This final rule does not change the environmental effects of the current Capital Construction Fund program. This final rule implements a definition of a qualified vessel for the Capital Construction Fund. This rulemaking will not result, either individually or cumulatively, in a significant impact on the environment.

Paperwork Reduction

This rule does not establish a new requirement for the collection of information. Thus, the Office of Management and Budget (OMB) will not be requested to review and approve the information collection requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

Regulation Identifier Number (RIN)

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

Privacy Act

You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-19478) or you may visit http://www.regulations.gov.

List of Subjects in 46 CFR Part 390

• Income taxes
• Investments
• Maritime carriers
• Vessels

Accordingly, the Maritime Administration amends 46 CFR part 390 as follows:

PART 390—CAPITAL CONSTRUCTION FUND

1. The authority citation for part 390 is amended to read as follows:

Authority: Secs. 53501, et seq., of Title 46, United States Code, formerly, section 607, Merchant Marine Act, 1936, as amended (46 App. U.S.C. 1177); 49 CFR 1.66.

2. In the table below, for each section indicated in the left column, remove the phrase indicated in the middle column and add the phrase indicated in the right column:

Section	Remove	Add
390.2(a)(2)(i)	section 2 of the Shipping Act, 1916	46 U.S.C. 50501.
390.2(a)(2)(ii)	section 607(k)(1) of the Act	46 U.S.C. 53501.
390.2(a)(2)(iii)	section 607(k)(2) of the Act	46 U.S.C. 53501(5).
390.2(a)(2)(iii)	section 607(k) of the Act	46 U.S.C. 53501.
390.2(a)(2)(iii)	section 905(a) of the Act	46 U.S.C. 109(b).
390.3(a)	section 101 of the Act	46 U.S.C. 50501.
390.3(b)(2)(i)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.5(a)	section 607(k) of the Act	46 U.S.C. 53501.
390.5(b)(2) introductory text	section 607(b) of the Act	46 U.S.C. 53505.
390.5(c)(2) introductory text	section 607(f) of the Act	46 U.S.C. 53509.
390.5(c)(3)(ii)	section 506 of the Act	46 U.S.C. 53101 note.
390.5(c)(7)(ii)(A)	section 905 of the Act	46 U.S.C. 109.
390.7(a)(1)	section 607(b) of the Act	46 U.S.C. 53505.
390.7(a)(2)	section 607(d) of the Act	46 U.S.C. 53507.
390.7(b)(1)	section 607(c) of the Act	46 U.S.C. 53506.
390.7(c)(1)	section 607(d)(2) of the Act	46 U.S.C. 53507(b).
390.7(d)(1)	section 607(c) of the Act	46 U.S.C. 53506.
390.7(e)(1)	section 607(a) of the Act	46 U.S.C. 53504.
390.7(f)(1)	section 607(b)(2) of the Act	46 U.S.C. 53505(b).
390.7(h)(2)	section 607(c) of the Act	46 U.S.C. 53506.
390.7(i)	Title XI of the Act	46 U.S.C. Chapter 537.
390.8(a)	section 607(c) of the Act	46 U.S.C. 53506.
390.8(b)(3)(ii)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.8(c)(4)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.9(a)(1) introductory text	section 607(f) of the Act	46 U.S.C. 53509.
390.9(a)(2)	section 607(g) of the Act	46 U.S.C. 53510.
390.9(b)(4)	section 607(f)(1)(C)	46 U.S.C. 53509(a)(2).
390.9(c)(1)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.9(c)(4)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.10(a)(2)	section 607(h) of the Act	46 U.S.C. 53511.
390.11(c)(1)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.12(b)(2)	Internal Revenue Code of 1954	Internal Revenue Code of 1986.
390.13(a)	section 607(f)(2) of the Act	46 U.S.C. 53509(c).
Appendix I to Part 390	section 2 of the Shipping Act, 1916	46 U.S.C. 50501.
Appendix I to Part 390	section 607(k) of the Act	46 U.S.C. 53501.
Appendix I to Part 390	section 607(f)(2) of the Act	46 U.S.C. 53509(c).
Appendix I to Part 390I	section 607(k) of the Act	46 U.S.C. 53501.

3. Amend § 390.1 by:

A. Revising paragraph (a)(1) and (b) to read as set forth below;

B. Removing the phrase “Section 607” and adding in its place “Chapter 535” in paragraphs (a)(3) and (4); and

C. Removing the phrase “Section 607 of the Act” and adding in its place “Chapter 535” in paragraph (c).

§ 390.1

Scope of the regulations.

(a) In general—(1) Scope. The regulations prescribed in this part govern the capital construction fund (“fund”) authorized by 46 U.S.C. 53501 et seq.

* * * * *

(b) Act. For purposes of this part, the term Act shall mean Chapter 535 of Title 46, United States Code.

* * * * *

4. Section 390.2 is amended by:

A. Removing the phrase “section 607 of the Act” and adding in its place “Chapter 535” in paragraph (a)(2) introductory text; and

B. Revising the last sentence of paragraph (a)(2)(iii) to read as follows:

§ 390.2

Application for an agreement.

(a) * * *

(2) * * *

(iii) * * * Such provisions state that the vessel will be operated in the United States foreign, Great Lakes, noncontiguous domestic, or short sea transportation trade as defined in 46 U.S.C. 53501 and 46 U.S.C. 109(b); and

* * * * *

5. Section 390.5 is amended by

A. Revising paragraph (c)(1)(iii);

B. Redesignating paragraphs (c)(6) through (c)(8) as paragraphs (c)(7) through (c)(9) and adding new paragraph (c)(6);

C. Removing the phrase “section 607 of the Act” and adding in its place “Chapter 535” in newly redesignated paragraph (c)(7)(i); and

D. Revising newly redesignated paragraphs (c)(7)(iv) and (c)(8)(iii);

§ 390.5

Agreement vessel.

* * * * *

(c) * * *

(1) * * *

(iii) Operated in the United States foreign, Great Lakes, noncontiguous domestic, or short sea transportation trade.

* * * * *

(6) Short Sea Transportation Trade. The term short sea transportation trade means the carriage by vessel of cargo—

(i) That is:

(A) Contained in intermodal cargo containers and loaded by crane on the vessel; or

(B) Loaded on the vessel by means of wheeled technology; and

(ii) That is:

(A) Loaded at a port in the United States and unloaded either at another port in the United States or at a port in Canada located in the Great Lakes Saint Lawrence Seaway System; or

(B) Loaded at a port in Canada located in the Great Lakes Saint Lawrence Seaway System and unloaded at a port in the United States.”

(7) * * *

(iv) Bunkering in support of non-qualified trade operations.

(8) * * *

(iii) Ship assist work, including lightering or shifting of a vessel at the end or beginning of a noncontiguous domestic, short sea transportation trade, Great Lakes or U.S. foreign trade voyage. In addition, the lightering of foreign-flag vessels in U.S. ports is permitted.

* * * * *

§ 390.12

[Amended]

6. In § 390.12, remove the phrase “section 607 of the Act” and add in its place “Chapter 535” in paragraph (a)(1).

Appendix I to Part 390—[Amended]

7. In Appendix I:

A. Remove the phrase “section 607 of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1177)” and add in its place “46 U.S.C. 53501 et seq.” wherever it may occur; and

B. Remove “19__” and add in its place “20__” wherever it may occur.

Appendix II to Part 390—[Amended]

8. In Appendix II:

A. Remove the phrase “section 607 of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1177)” and add in its place “46 U.S.C. 53501 et seq.” wherever it may occur; and

B. Remove “19__” and add in its place “20__” wherever it may occur.

Appendix IV to Part 390—[Amended]

9. In Appendix IV:

A. Remove the phrase “Assistant General Counsel” and add in its place “Assistant Chief Counsel” wherever it may occur; and

B. Remove “19__” and add in its place “20__” wherever it may occur.

Dated: September 18, 2008.

By order of the Maritime Administrator.

Leonard Sutter,

Secretary, Maritime Administration.