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43328

Federal Register

/Vol. 69, No. 138/Tuesday, July 20, 2004/Rules and Regulations

Dated: July 13, 2004.

Robert D. Brenner,

Acting Assistant Administrator for Office of Air and Radiation.

[FR Doc. 04

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16449 Filed 7

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04; 8:45 am]

BILLING CODE 6560

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DEPARTMENT OF TRANSPORTATIONMaritime Administration46 CFR Part 296

[Docket No. MARAD

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2004

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18489]RIN 2133

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AB62

Maritime Security Program

AGENCY

Maritime Administration,Department of Transportation.

ACTION

Interim final rule and requestfor comments.

SUMMARY

The Maritime Administration(MARAD) is issuing this interim finalrule to provide procedures to implementprovisions of the National DefenseAuthorization Act for Fiscal Year 2004,the Maritime Security Act of 2003 (MSA2003). The MSA 2003 authorizes thecreation of a new Maritime SecurityProgram (MSP) that establishes a fleet of active, commercially viable, privatelyowned vessels to meet national defenseand other security requirements and tomaintain a United States presence ininternational commercial shipping. Thisinterim final rule establishes the newMSP and provides, among other things,application procedures and deadlinesfor enrollment of vessels in the MSP.

DATES

Effective Date:

This interim finalrule is effective on October 1, 2004.

Comment Date:

MARAD will considercomments received not later thanAugust 19, 2004.

Application Due Date:

Applicationsfor enrollment of vessels in the MSP aredue by October 15, 2004, to the addresslisted in the

ADDRESSES

section below.

ADDRESSES

Comment Submission:

Youmay submit comments [identified byDOT DMS Docket Number MARAD

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2004

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18489] by any of the followingmethods:

•

Web site:

http://dms.dot.gov

.Follow the instructions for submittingcomments on the DOT electronic docketsite.

•

Fax: 1

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202

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493

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2251.

•

Mail: Docket Management Facility;U.S. Department of Transportation, 400Seventh Street, SW., Nassif Building,Room PL

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401, Washington, DC 20590

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001.

•

Hand Delivery: Room PL

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401 onthe plaza level of the Nassif Building,400 Seventh Street, SW., Washington,DC, between 9 a.m. and 5 p.m., Mondaythrough Friday, except FederalHolidays.

•

Federal eRulemaking Portal: Go to

http://www.regulations.gov

. Follow theonline instructions for submittingcomments.

Instructions:

All submissions mustinclude the agency name and docketnumber for this rulemaking. Note thatall comments received will be postedwithout change to

http://dms.dot.gov

including any personal informationprovided. Please see the

Privacy Act

heading under Regulatory Notices.

Docket:

For access to the docket toread background documents orcomments received, go to

http:// dms.dot.gov

at any time or to Room PL

–

401 on the plaza level of the Nassif Building, 400 Seventh Street, SW.,Washington, DC, between 9 a.m. and 5p.m., Monday through Friday, exceptFederal Holidays.

Application Submission:

Submitapplications for enrollment of vessels inthe MSP to the Secretary, MaritimeAdministration, Room 7218, MaritimeAdministration, U.S. Department of Transportation, 400 Seventh Street,SW., Washington, D.C. 20590.

FOR FURTHER INFORMATION CONTACT

Taylor E. Jones II, Director, Office of Sealift Support, MaritimeAdministration, Telephone 202

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366

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2323. For legal questions, call MurrayBloom, Chief, Division of MaritimePrograms, Maritime Administration,202

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366

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5320. For military utilityquestions, call LTC Todd Robbins, U.S.Transportation Command, 618

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229

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1451/1529.

SUPPLEMENTARY INFORMATION

Background

On October 8, 1996 the Presidentsigned the Maritime Security Act of 1996 establishing the Maritime SecurityProgram (MSP) for FYs 1996 through2005 to provide financial assistance of up to $2.1 million per vessel per year tooperators of U.S.-flag vessels withapproved MSP Operating Agreements.The MSP is funded at $100 million peryear for each year from FY 1996 throughFY 2005, which covers a maximum of 47 vessels.On November 24, 2003, the Presidentsigned the National DefenseAuthorization Act for Fiscal Year 2004,which contained the MSA 2003 creatinga new MSP for FY 2006 through FY2015. This program also providesfinancial assistance to operators of U.S.-flag vessels that meet certainqualifications. The MSA 2003 requiresthat the Secretary of Transportation, inconsultation with the Secretary of Defense, establish a fleet of active,commercially viable, militarily useful,privately-owned vessels to meetnational defense and other securityrequirements. Section 53111 of the MSA2003 authorizes $156 million annuallyfor FYs 2006, 2007, and 2008; $174million annually for FYs 2009, 2010,and 2011; and $186 million annually forFYs 2012, 2013, 2014, and 2015 tosupport the operation of up to 60 U.S.-flag vessels in the foreign commerce of the United States. Payments toparticipating operators are limited to$2.6 million per ship per year for FYs2006 through 2008, $2.9 million pership per year for FYs 2009 through2011, and $3.1 million per ship per yearfor FYs 2012 through 2015. Paymentsare subject to annual appropriations.Participating operators are required tomake their commercial transportationresources available upon request by theSecretary of Defense during times of waror national emergency.Subtitle A, section 3517 of the MSA2003 provides for a pilot program underwhich the Secretary of Transportationmay enter into an agreement(s) toreimburse MSP vessel operators up to80 percent of the cost of performingmaintenance and repairs in U.S.shipyards versus the cost of performingthis work in a geographic region inwhich the MSP vessel generallyoperates. Funding to perform qualifiedmaintenance and repair work in theUnited States on MSP vessels isauthorized to be appropriated in theamount of $19.5 million for each of fiscal years 2006 through 2011.

Military Utility

The U.S. Transportation Command,on behalf of the Secretary of Defense,will issue a press release or anotherform of announcement within 20 daysafter the issuance of this regulationdescribing the current operationalrequirements of the Department of Defense for determining the award of operating agreements within a priority.Current requirements may be stated interms of capability to perform aparticular mission or in terms of vesselcharacteristics (militarily useful squarefootage, deck height, deck strength,draft, ammunition certification, etc.) orin other operational terms.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review), and Department of Transportation (DOT) Regulatory Policies; Pub. L. 104

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121

This rulemaking is considered to bean economically significant regulatoryaction under section 3(f) of Executive

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Federal Register

/Vol. 69, No. 138/Tuesday, July 20, 2004/Rules and Regulations

Order 12866. This interim final rule isalso considered a major rule forpurposes of Congressional review underPub. L. 104

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121. Since the program isdesigned to support up to 60 vessels inFY 2006, each receiving up to $2.6million annually, the MaritimeAdministrator finds that the programmay have an annual effect on theeconomy of $100 million or more. Thus,it is considered to be a significant ruleunder Executive Order 12866 and DOT

’

sRegulatory Policies and Procedures (44FR 11034, February 26, 1979), and has been reviewed by OMB. Changes madein response to OMB suggestions orrecommendations will be documentedin the public record. Under ExecutiveOrder 12866, MARAD is required toprovide an analysis of informationdeveloped as part of its decisionmakingprocess, including the benefitsanticipated from the regulatory action,the costs anticipated from the action,and an assessment of the costs and benefits of potentially effective andreasonably feasible alternatives to theregulatory action. MARAD

’

s regulatoryanalysis follows.

Background

The Maritime Security Act of 1996(MSA) was passed with strong bipartisan support in Congress and wassigned into law on October 8, 1996. TheMSA outlined, in detail, theestablishment of a fleet of vessels,pursuant to agreement, engaged in U.S.foreign commerce and available for use by the Department of Defense duringtimes of war or national emergency.Based on the success of the programunder the original MSA, Congress, aspart of the recently enacted MaritimeSecurity Act of 2003 (MSA 2003),created a new program that permits anincrease in both the number of participant vessels as well as thepayment amounts such vessels willreceive under the program.

Benefits

The major benefit of the MSA 2003 isthat it will provide the Department of Defense (DOD) with assured access of up to 60 vessels that may be used duringtimes of war or national emergency. Theexisting MSP fleet of 47 vessels consistsprimarily of containerships, which aremainly designed for the sustainmentphase of sealift operations that supportmilitary operations. In Operation IraqiFreedom, 35 MSP vessels wereemployed in support of militaryoperations. In addition, the MSPprovides necessary support to helpmaintain a U.S.-flag presence ininternational commerce. The MSPvessels are a major component of theU.S.-flag capability that contributes tothe U.S. mariner base for utilization on both commercial and DOD organic fleet.

Costs

From the inception of the program,Congress set strict limits, not subject tothe Secretary of Transportation

’

sdiscretion, on the number of participantvessels and the annual payment pervessel. The MSA 2003 will permit anincrease in the number of participantvessels from 47 authorized under theoriginal MSA (for FYs 1996

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2005) to 60(authorized for FYs 2006

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2015).Similarly, the payments per vessel may be increased from $2.1 million (underthe original MSA for FYs 1997

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2005) to$2.6 million (for FYs 2006

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2008); $2.9million (for FYs 2009

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2011); and $3.1million (for FYs 2012

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2015). Themaximum programmatic payment thatCongress directed through the MSA2003 is $156 million, $174 million, and$186 million per year for FYs 2006

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2008, 2009

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2011, and 2012

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2015respectively, subject to appropriation.

Analysis of Alternatives

The MSA 2003 expands the MSPprogram that was originally established by Congress in 1996 by increasing thenumber of participant vessels, annualfunding amounts, and expenditureamounts for the new MSP program.However, beyond the increased size of the new MSP program under the MSA2003, the underlying statutes aresubstantially similar, and envision anew MSP program that is essentially acontinuation of the prior MSP programunder the original MSA. Under both theoriginal MSA and the MSA 2003,Congress prescribed the salient detailsof the MSP program, including shipownership, vessel eligibility, vesseldocumentation, program duration, thenumber of participants, the amount of funding, and, under the MSA 2003,guidelines regarding the composition of the fleet. Since the MSA 2003 providesdetailed requirements for continuing theMSP program, MARAD has littlediscretion to propose regulatory options.In fact, given the highly prescriptivenature of both the original MSA andMSA 2003, MARAD believes that noviable regulatory alternatives exist inlieu of implementing these regulations,which continue and expand the currentMSP program.

Administrative Procedure Act

Pursuant to authority granted bysection 3533 of the MSA 2003, whichprovides an exception from compliancewith the notice and commentrequirements of section 553 of Title 5,United States Code, MARAD ispublishing this rule as an interim finalrule. This will facilitate establishment of the new MSP as early as possible. Afinal rule will be published in the

Federal Register

after MARAD has hadan opportunity to consider allcomments on this interim final rule.Section 3533 provides that all interimrules under that section that are notsuperseded earlier by final rules shallexpire no later than 270 days after theeffective date of Subtitle C, or October1, 2004. Accordingly, these interimregulations shall no longer be effectiveafter June 27, 2005.

Executive Order 13132

We have analyzed this rulemaking inaccordance with the principles andcriteria contained in Executive Order13132 (

‘‘

Federalism

’’

) and havedetermined that it does not havesufficient Federalism implications towarrant the preparation of a Federalismsummary impact statement. Theregulations have no substantial effectson the States, the current Federal-Staterelationship, or the current distributionof power and responsibilities amongvarious local officials. Therefore,consultation with State and localofficials was not necessary.

Executive Order 13175

MARAD does not believe that thisinterim final rule will significantly oruniquely affect the communities of Indian tribal governments whenanalyzed under the principles andcriteria contained in Executive Order13175 (Consultation and Coordinationwith Indian Tribal Governments).Therefore, the funding and consultationrequirements of this Executive Order donot apply.

Regulatory Flexibility

Because no notice of proposedrulemaking is required for this interimfinal rule, as set forth in section 3533 of Subtitle C, Title XXXV, of the NationalDefense Authorization Act for FiscalYear 2004, the provisions of theRegulatory Flexibility Act (5 U.S.C. 601

et seq.

) do not apply. However, theMaritime Administrator certifies thatthis interim final rule will not have asignificant economic impact on asubstantial number of small entities. Weanticipate that few, if any, small entitieswill participate in this program due tothe nature of the shipping industry andthe capital costs associated with shipsthat are eligible for the program.

Unfunded Mandates Reform Act of 1995

This interim final rule will notimpose an unfunded mandate under theUnfunded Mandates Reform Act of

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Federal Register

/Vol. 69, No. 138/Tuesday, July 20, 2004/Rules and Regulations

1995. It will not result in costs of $100million or more, in the aggregate, to anyof the following: State, local, or NativeAmerican tribal governments, or theprivate sector. This interim final rule isthe least burdensome alternative thatachieves this objective of U.S. policy.

Environmental Assessment

We have analyzed this interim finalrule for purposes of compliance withthe National Environmental Policy Actof 1969 (NEPA) (42 U.S.C. 4321

et seq.

)and we have concluded that, under thecategorical exclusions provision insection 4.05 of Maritime AdministrativeOrder (MAO) 600

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‘‘

Procedures forConsidering Environmental Impacts,

’’

50 FR 11606 (March 22, 1985), neitherthe preparation of an EnvironmentalAssessment, an Environmental ImpactStatement, nor a Finding of NoSignificant Impact for this rulemaking isrequired. This interim final rule doesnot change the environmental effects of the current MSP, which has beenoperational since FY 1997, and thus nofurther analysis under NEPA isrequired. The vessels eligible for theMSP under the MSA 2003 (1) willcontinue to operate under the U.S. flag,and will continue to be governed byU.S.-flag state control while operating inthe foreign commerce of the UnitedStates; and (2) are and will continue to be designed, constructed, equipped andoperated in accordance with stringentUnited States Coast Guard andInternational Maritime Organizationstandards for maritime safety andmaritime environmental protection.

Paperwork Reduction

MARAD has requested that the Officeof Management and Budget revise itsapproval of an information collectionunder the Paperwork Reduction Act of 1995 (44 U.S.C. 3507

et seq.

). The titleof the information collection isApplication and Reporting Elements forParticipation in the Maritime SecurityProgram, OMB #2133

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0525.This information collection requiresvessel operators to continue to submitinitial applications, amendments toapplications (if necessary), and monthlyand annual reports. We estimate that thenumber of annual respondents underthe new MSP program will increasefrom 12.5 to 15, the average totalnumber of annual responses willincrease from 132 to 198.5, and that theaverage annual recordkeeping andreporting burden program total willincrease from 152 hours to 224 hours.We estimate that the total averageannual cost burden associated with thisinformation collection will be$10,726.65, or $715.11 per respondent.In accordance with the PaperworkReduction Act, MARAD published a 60-day notice in the

Federal Register

seeking public comment on theinformation collection on May 28, 2004(69 FR 30744).

Privacy Act

Anyone is able to search theelectronic form of all commentsreceived into any of our dockets by thename of the individual submitting thecomment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You mayreview DOT

’

s complete Privacy ActStatement in the

Federal Register

published on April 11, 2000 (Volume65, Number 70; Pages 19477

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78) or youmay visit

http://dms.dot.gov.

List of Subjects in 46 CFR Part 296

Assistance payments, Maritimecarriers, Reporting and record keepingrequirements.

Accordingly, Part 296 is added to 46CFR Chapter II, Subchapter C, to read asfollows:

PART 296

—

MARITIME SECURITYPROGRAM (MSP)

Subpart A

—

Introduction

Sec.296.1Purpose.296.2Definitions.296.3Applications.296.4Waivers.

Subpart B

—

Eligibility

296.10Citizenship requirements of owners,charterers and operators.296.11Vessel requirements.296.12Applicants.

Subpart C

—

Priority for GrantingApplications

296.20Tank vessels.296.21Participating Fleet Vessels.296.22Other vessels.

Subpart D

—

Maritime Security ProgramOperating Agreements

296.30General conditions.296.31MSP assistance conditions.296.32Reporting requirements.

Subpart E

—

Payment and BillingProcedures

296.40Billing procedures.296.41Payment procedures.

Subpart F

—

Appeals Procedures

296.50Administrative determinations.

Subpart G

—

Maintenance and RepairReimbursement Pilot Program

296.60Applications.

Authority:

Pub. L. 108

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136, 117 Stat. 1392;46 App. U.S.C. 1114(b), 49 CFR 1.66.

Subpart A

—

Introduction

296.1Purpose.

This part prescribes regulationsimplementing the provisions of SubtitleC, Maritime Security Fleet Program,Title XXXV of the National DefenseAuthorization Act for Fiscal Year 2004,the Maritime Security Act of 2003 (MSA2003), governing Maritime SecurityProgram (MSP) payments for vesselsoperating in the foreign trade or mixedforeign and domestic commerce of theUnited States allowed under a registryendorsement issued under 46 U.S.C.12105. The MSA 2003 provides for jointresponsibility between the Departmentof Defense (DOD) and the Department of Transportation (DOT) for administeringthe law. These regulations provide theframework for the coordination betweenDOD and DOT in implementing theMSA 2003. Implementation of the MSA2003 has been delegated by theSecretary of Transportation to theMaritime Administrator, U.S. MaritimeAdministration and by the Secretary of Defense to the Commander, U.S.Transportation Command, respectively.

296.2Definitions.

For the purposes of this part:

Act

means the Merchant Marine Act,1936, as amended (46 App. U.S.C. 1101

et seq.

Administrator

means the MaritimeAdministrator, U.S. MaritimeAdministration (MARAD), U.S. DOT,who is authorized by the Secretary of Transportation to administer the MSA2003, in consultation with theCommander, U.S. TransportationCommand (USTRANSCOM).

Agreement Vessel

means a vesselcovered by an MSP OperatingAgreement.

Applicant

means an applicant for anMSP Operating Agreement.

Bulk Cargo

means cargo that is loadedand carried in bulk without mark orcount.

Chapter 121

means the vesseldocumentation provisions of chapter121 of title 46, United States Code.

Citizen of the United States

means anindividual who is a United Statescitizen, or a corporation, partnership orassociation as determined under section2 of the Shipping Act, 1916, as amended(46 App. U.S.C. 802).

Commander

means Commander,USTRANSCOM, who is authorized bythe Secretary of Defense to administerthe MSA 2003, in consultation with theAdministrator.

Contracting Officer

means theAssociate Administrator for NationalSecurity, MARAD.

Contractor

means the owner oroperator of a vessel that enters into an

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