31806 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations

minority shareholders was ‘‘solely for

voting stock,’’ the liquidation of Y, as

part of the same plan, resulted in X

acquiring 80 percent of the Z stock in

exchange for Y stock surrendered back

to Y on the liquidation of Y and not

solely in exchange for X voting stock.

The commentator’s suggestion is

beyond the scope of this regulations

project, which relates to ‘‘C’’

reorganizations. In light of these

regulations, however, the IRS and

Treasury Department may reconsider

Rev. Rul. 69–294.

Effect on Other Documents

The following publication is obsolete

as of January 1, 2000: Rev. Rul. 54–396

(1954–2 C.B. 147).

Special Analyses

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in

Executive Order 12866. Therefore, a

regulatory assessment is not required. It

also has been determined that section

553(b) of the Administrative Procedure

Act (5 U.S.C. chapter 5) does not apply

to these regulations and, because these

regulations do not impose a collection

of information on small entities, the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) does not apply. Therefore, a

Regulatory Flexibility Analysis is not

required. Pursuant to section 7805(f) of

the Internal Revenue Code, these

regulations were submitted to the Chief

Counsel for Advocacy of the Small

Business Administration for comment

on its impact on small business.

Drafting Information: The principal

author of these regulations is Marnie

Rapaport of the Office of the Assistant

Chief Counsel (Corporate), IRS.

However, other personnel from the IRS

and Treasury Department participated

in their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and

recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 1 is

amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 continues to read in part as

follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.368–2 is amended by

adding paragraph (d)(4) to read as

follows:

§ 1.368–2 Definition of terms.

* * * * *

(d) * * *

(4)(i) For purposes of paragraphs

(d)(1) and (2)(ii) of this section, prior

ownership of stock of the target

corporation by an acquiring corporation

will not by itself prevent the solely for

voting stock requirement of such

paragraphs from being satisfied. In a

transaction in which the acquiring

corporation has prior ownership of

stock of the target corporation, the

requirement of paragraph (d)(2)(ii) of

this section is satisfied only if the sum

of the money or other property that is

distributed in pursuance of the plan of

reorganization to the shareholders of the

target corporation other than the

acquiring corporation and to the

creditors of the target corporation

pursuant to section 361(b)(3), and all of

the liabilities of the target corporation

assumed by the acquiring corporation

(including liabilities to which the

properties of the target corporation are

subject), does not exceed 20 percent of

the value of all of the properties of the

target corporation. If, in connection with

a potential acquisition by an acquiring

corporation of substantially all of a

target corporation’s properties, the

acquiring corporation acquires the target

corporation’s stock for consideration

other than the acquiring corporation’s

own voting stock (or voting stock of a

corporation in control of the acquiring

corporation if such stock is used in the

acquisition of the target corporation’s

properties), whether from a shareholder

of the target corporation or the target

corporation itself, such consideration is

treated, for purposes of paragraphs

(d)(1) and (2) of this section, as money

or other property exchanged by the

acquiring corporation for the target

corporation’s properties. Accordingly,

the transaction will not qualify under

section 368(a)(1)(C) unless, treating such

consideration as money or other

property, the requirements of section

368(a)(2)(B) and paragraph (d)(2)(ii) of

this section are met. The determination

of whether there has been an acquisition

in connection with a potential

reorganization under section

368(a)(1)(C) of a target corporation’s

stock for consideration other than an

acquiring corporation’s own voting

stock (or voting stock of a corporation in

control of the acquiring corporation if

such stock is used in the acquisition of

the target corporation’s properties) will

be made on the basis of all of the facts

and circumstances.

(ii) The following examples illustrate

the principles of this paragraph (d)(4):

Example 1. Corporation P (P) holds 60

percent of the Corporation T (T) stock that P

purchased several years ago in an unrelated

transaction. T has 100 shares of stock

outstanding. The other 40 percent of the T

stock is owned by Corporation X (X), an

unrelated corporation. T has properties with

a fair market value of $110 and liabilities of

$10. T transfers all of its properties to P. In

exchange, P assumes the $10 of liabilities,

and transfers to T $30 of P voting stock and

$10 of cash. T distributes the P voting stock

and $10 of cash to X and liquidates. The

transaction satisfies the solely for voting

stock requirement of paragraph (d)(2)(ii) of

this section because the sum of $10 of cash

paid to X and the assumption by P of $10 of

liabilities does not exceed 20% of the value

of the properties of T.

Example 2. The facts are the same as in

Example 1 except that P purchased the 60

shares of T for $60 in cash in connection

with the acquisition of T’s assets. The

transaction does not satisfy the solely for

voting stock requirement of paragraph

(d)(2)(ii) of this section because P is treated

as having acquired all of the T assets for

consideration consisting of $70 of cash, $10

of liability assumption and $30 of P voting

stock, and the sum of $70 of cash and the

assumption by P of $10 of liabilities exceeds

20% of the value of the properties of T.

(iii) This paragraph (d)(4) applies to

transactions occurring after December

31, 1999, unless the transaction occurs

pursuant to a written agreement that is

(subject to customary conditions)

binding on that date and at all times

thereafter.

* * * * *

David A. Mader,

Acting Deputy Commissioner of Internal

Revenue.

Approved: May 9, 2000.

Jonathan Talisman,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 00–12406 Filed 5–18–00; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 155

46 CFR Part 32

[USCG 1998–4443]

RIN 2115–AF65

Emergency Control Measures for Tank

Barges

AGENCY: Coast Guard, DOT.

ACTION: Final rule.

SUMMARY: This final rule implements

measures for maintaining or regaining

control of a tank barge that will reduce

the likelihood of a tank barge’s

Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations 31807

grounding and spilling its cargo. These

measures are necessary because without

them a tug that loses its tow lacks ready

means for regaining control of it. They

should increase the safety of marine

transport and protect the environment.

DATES: This final rule is effective June

19, 2000 except for 33 CFR 155.230(b)(1)

and 46 CFR 32.15–15(e), which are

effective on December 11, 2000.

ADDRESSES: The Docket Management

Facility maintains the public docket for

this rulemaking. Unless otherwise

indicated, documents mentioned in this

preamble will become part of this

docket and will be available for

inspection or copying at room PL–401

on the Plaza level of the Nassif Building,

400 Seventh Street SW., Washington,

DC, between 9 a.m. and 5 p.m., Monday

through Friday, except Federal holidays.

You may also find this docket on the

Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For

questions on this final rule, call Mr.

Robert Spears, Project Manager, Office

of Standards Evaluation and

Development, telephone 202–267–1099;

or Mr. Allen Penn, Technical Advisor,

Office of Design and Engineering

Standards, telephone 202–267–2997.

For questions on viewing the docket,

call Ms. Dorothy Walker, Chief,

Documents, Department of

Transportation, telephone 202–366–

9329.

Background and Purpose

On January 19, 1996, the tugboat

SCANDIA, towing the oil barge NORTH

CAPE, caught fire five miles off the

coast of Rhode Island. The crew could

not control the fire, and without power

they were unable to prevent the barge,

carrying 4 million gallons of oil, from

grounding and spilling about a quarter

of its contents into the coastal waters.

The NORTH CAPE spill led Congress to

add, in section 901 of the 1996 Coast

Guard Authorization Act (Pub. L. 104–

324), a new statute, 46 U.S.C. 3719. It

directs the Secretary of Transportation

to issue rules necessary to reduce oil

spills from single-hull non-selfpropelled tank vessels. On October 6,

1997, we published a notice of proposed

rulemaking (NPRM) on safety of towing

vessels and tank barges (62 FR 52057).

With the interim rule we published on

December 30, 1998 (63 FR 71754), we

adjusted safety measures proposed in

the NPRM. With this final rule, instead

of requiring just one emergency control

measure, we are requiring an anchoring

system (on single-hull tank barges) plus

one other (backup) measure.

Statutory Mandate

46 U.S.C. 3719 directs us to issue

rules requiring a single-hull, non-selfpropelled tank vessel (or the vessel

towing it), operating in the open ocean

or coastal waters, to have at least one of

the three safety measures listed in the

law. Under reasonably foreseeable sea

conditions, without assistance, either

the tank barge or the vessel towing it

must have—

(1) A crewmember and an operable

anchor on board the tank barge that

together can stop the barge from

drifting; and either

(2) An emergency system that will

allow the retrieval of the barge by the

towing vessel if the towline parts; or

(3) Another measure or combination

of measures that the Coast Guard

determines will provide protection

against grounding of the tank vessel

equivalent to that provided by the

measure described in paragraph (1) or

(2).

Another statute to reduce oil spills

from single-hull tank barges, 46 U.S.C.

4102(f)(2), directs the Coast Guard to

require the use of fire suppression

systems and other measures for towing

vessels. On October 19, 1999, we

published an interim rule, Fire

Protection Measures for Towing Vessels

(USCG 1998–4445) that implements

some of the fire protection measures we

had proposed in the NPRM of October

6, 1997. A supplemental notice of

proposed rulemaking will propose

further measures in response to

comments we received. Both statutes

mandating new rules direct the Coast

Guard to consult with the Towing Safety

Advisory Committee (TSAC) in

developing them. As we noted in the

NPRM, we considered the

recommendations of the TSAC and

incorporated them as we deemed

appropriate.

Regulatory Approach

In response to these statutory

mandates, the Coast Guard proposed

rules for fire protection and fire-fighting

on towing vessels operating anywhere

in U.S. waters, and rules for arresting

and retrieving tank barges. This final

rule applies to single-hull tank barges,

as specified in 46 U.S.C. 3719. Rules in

33 CFR 155.230 before this rulemaking

required emergency towing capability

for both single-hull and double-hull

barges operating outside the boundary

line. So double-hull tank barges already

satisfy 33 CFR 155.230 as amended by

this rule. The rules for barge control

require any single-hull tank barge or the

vessel towing it on certain waters to

have two of three emergency control

systems, where one serves for anchoring

the barge while one of the other two

serves for arresting or retrieving it.

Discussion of Comments and Changes

The Coast Guard received a total of 23

documents containing 38 comments to

the public docket of the interim rule on

emergency control measures for tank

barges. Of these comments, 11

concerned anchoring systems, 5

concerned the rule as applied, or not

applied, to barges being pushed or

towed alongside on limited routes, 12

concerned specific sections of 33 CFR

Part 155, and the rest concerned general

features of the proposed rule. We held

a public meeting on May 12, 1999, at the

Department of Transportation in

Washington, D.C. This final rule

addresses the comments from the

meeting and all other comments noted

above. The following paragraphs

contain summaries of the comments and

explanations of any changes made by

this rule to the interim rule.

Anchoring Systems

Eleven comments received from

companies, organizations, or

individuals on the West Coast opposed

the use of anchoring systems there.

They offered many reasons to support

some alternative means of maintaining

control of barges along the West Coast;

many cited the unsuitability of anchors

as a means to control barges due to the

lack of anchorage areas. The comments

also cited the high costs to retrofit their

barges, arguing that water depths on the

West Coast drop off into significantly

deeper water closer to shore than along

the East Coast. Some comments reported

that the heavy surge gear and bridle legs

used in towing on the West Coast act as

anchors in shallow water when they lie

on the bottom; it is not uncommon for

operators to use this equipment to

‘‘anchor’’ barges in sheltered areas until

storms or dangerous seas subside. The

Coast Guard acknowledges these

comments and has changed the interim

rule to give those operating barges on

the West Coast the option of using the

heavy surge gear and bridle legs in place

of the anchoring systems otherwise

required by this final rule. We do not

extend this option to barges operating

on the East Coast and the Gulf Coast,

since the anchoring system required by

the final rule is both feasible and

effective in the shallower waters of

those Coasts. Further, the heavy surge

gear and bridle legs have not been

shown to be an effective means of

anchoring barges in those waters.

31808 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations

Application to Barges Pushed or Towed

Alongside on Limited Routes

Five comments opposed applying this

rule to barges not towed astern or barges

towed on limited routes. The Coast

Guard agrees with these comments and

has changed the rule to exempt these

specific kinds of towing.

Comments Relating to Specific Sections

of the CFR

1. 33 CFR 155.230(b)(1)(i)(C). One

comment suggests letting the operator of

the system consult either the master or

mate regarding appropriate length of

line, cable, or chain. The Coast Guard

agrees with the comment and has

changed this section of the rule by

adding the mate as an alternative to the

operator of the system.

2. 33 CFR 155.230(b)(1)(i)(D). Three

comments opposed requiring the

operator of the system to wear a safety

belt or harness secured by lanyard to a

lifeline, a drop line, or a fixed structure.

The Coast Guard partially agrees with

these comments and has changed this

section of the rule to recommend that

the operator of the system wear a safety

belt or harness only during rough seas

or foul weather.

3. 33 CFR 155.230(b)(1)(iii). One

comment opposed requiring training all

crewmembers on manned barges in the

operation of the anchoring system. The

Coast Guard disagrees. To avoid having

to place a person on a barge for a

genuinely emergent anchoring or

retrieval, it is essential that every

crewmember already on the barge know

how to operate the anchoring system.

Another comment suggests that the

Coast Guard require exam questions or

training to improve safety of anchoring.

The Coast Guard partially agrees, yet

has not changed the rule, since this

section already requires crew training in

anchoring.

4. 33 CFR 155.230(b)(2)(iv). Seven

comments opposed requiring drills that

involve actually retrieving a drifting

barge. They state that requiring such

drills will place one or more

crewmembers in danger and impose

high costs of re-rigging the system. A

related comment suggested a one-time

training ‘‘exercise’’ for each master, and

quarterly ‘‘tabletop’’ retrieval drills and

gear inspection. The Coast Guard agrees

with these comments and has changed

the rule to require an annual bargeretrieval drill, and a drill not more than

one month after the employment of the

master or mate responsible for

supervising retrieval. This requirement

allows for methods other than actually

retrieving a drifting barge to

demonstrate each participant’s ability to

perform his or her part in regaining

control of a barge.

General Comments

1. One comment opposed the

applicability of this rule to the Strait of

Juan de Fuca and parts of Puget Sound.

It states that the open-ocean type swells

that can cause towline failures are not

common in the Strait, and that there are

ample sheltered areas for vessels to wait

for changes in unfavorable winds or

tides. The Coast Guard does not agree

with this comment; towline failures may

occur in these waters, and this rule’s

measures may reduce the likelihood of

tank barges grounding and spilling cargo

there. We have not changed the

applicability of this rule.

2. Two comments support the use of

escort tugs in certain areas, such as

‘‘sensitive’’ waters. This issue is beyond

the scope of this rulemaking.

3. Three comments opposed remotecontrol anchoring systems. This is

outside the scope of this rule because it

does not require such anchoring

systems. However, one could propose

the use of such a system, and seek Coast

Guard approval for it.

4. Two comments suggest

grandfathering existing anchoring

systems on tank barges. This would

allow existing systems to meet less

stringent standards (ones other than

those from the American Bureau of

Shipping (ABS)). The Coast Guard

partially agrees, and has changed the

wording to require ‘‘general conformity’’

rather than ‘‘substantial agreement’’

with ABS (or another recognized class

society’s) standards. If a Coast Guard

representative inspects your anchoring

system you should indicate which

standards you are using as guidance.

The Coast Guard may decide to

establish whether or not your anchoring

system is in general conformity with

that standard or another acceptable

standard. We will inform you of any

corrective action needed. We will

review this practice after getting some

experience with it and will modify it as

necessary.

5. One comment requested the use of

synthetic line, instead of chain or wire,

as approved equipment for the

anchoring system. The wording in this

final rule calls for anchor systems to

generally conform with standards from

ABS (or another recognized class

society). It does not prohibit the use of

new system components that are found

(by ABS or another recognized class

society) to be comparable to accepted or

approved equipment in widespread use.

However, wire cable may substitute for

chain under current applicable rules of

ABS; there is no mention in those rules

of line (natural or synthetic) as a

suitable substitute for anchor chain.

Since it is not addressed in ABS rules,

synthetic line is not yet acceptable.

Regulatory Evaluation

This final 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. It has not been reviewed by the

Office of Management and Budget under

that Order. However, it is significant

under the regulatory policies and

procedures of the Department of

Transportation (DOT) [44 FR 11040

(February 26, 1979)]; because of public

interest generated by the NPRM, it has

been reviewed by the Office of the

Secretary.

A Regulatory Assessment under

paragraph 10e of the regulatory policies

and procedures of DOT is available in

the docket for inspection or copying

where indicated under ADDRESSES. A

summary of the Assessment follows;

unless otherwise indicated, the

Assessment expresses costs and benefits

in end-of-1998 values:

Summary of Benefits

Measures published in this rule

should yield a net cost of $307 per

barrel of oil not spilled. This preventive

cost compares favorably, for example,

with costs of property damage and

actual restoration and cleanup

(excluding intangibles and transfer costs

such as fines, judgments resulting from

litigation, and insurance benefits paid)

incurred thus far as a result of the

20,000-barrel spill from the barge

NORTH CAPE in January of 1996. The

costs of that spill thus far total about

$50.2 million, which averages about

$2,550 per barrel spilled. This per-barrel

cost for only one spill is nearly seven

times the per-barrel costs of this rule to

avert similar events industry-wide.

Table 1 illustrates the calculation of

net cost-effectiveness from total

quantifiable costs and benefits resulting

from implementation of this rule. It

normalizes the benefits into costeffectiveness ratios to reflect the cost per

unit of oil not spilled. Here’s how: The

total estimated dollar cost of this rule

appears on Line (1); the total property

damage averted, an avoided cost

expressed in dollars, appears on Line (2)

and is subtracted from total dollar costs

to yield a net cost, which appears on

Line (3); pollution averted, the principal

benefit, which is expressed in barrels of

oil not spilled, appears on Line (4); and

the net cost from Line (3), divided by

the pollution-averted benefit from Line

(4) to yield an expression of costVerDate 11<MAY>2000 16:35 May 18, 2000 Jkt 190000 PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 E:\FR\FM\19MYR1.SGM pfrm02 PsN: 19MYR1
Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations 31809

effectiveness shown in units of net

discounted dollars per discounted

barrels of oil not spilled, appears on the

bottom line. This procedure permits us

to treat benefits from avoidance of

pollution and property damage together

in terms of net cost-effectiveness.

TABLE 1.—CONTROL MEASURES FOR TANK BARGES (BARGE ANCHORING AND RETRIEVAL): COST EFFECTIVENESS

EXPRESSED IN DOLLARS PER BARREL OF OIL NOT SPILLED

Type of benefits & costs Quantity Units

(1) Cost of this rule ...................................................................................................................................... 8,803,031 Dollars (PV).

(2) Property damage-averted 1 ................................................................................................................... 5,667,792 Dollars (PV).

(3) (1) minus (2) Net cost ............................................................................................................................ 3,135,239 Dollars (PV).

(4) Pollution averted 2 ................................................................................................................................. 10,205 Barrels of oil unspilled

(PV).

(3)÷(4) Net cost effectiveness ................................................................................................................... 307 Dollars per barrel

unspilled.

Note: benefits, shown on lines (2) and (4), are italicized. Net cost effectiveness is shown in bold. 1 Damage to vessels and equipment.

2Oil not spilled overboard into bodies of water.

The principal benefit of this rule is

protection against oil spillage and

property damage that may result when

a tow line to a tank barge parts or the

towing vessel otherwise loses control

over the tank barge, permitting it to run

aground. Quantifiable benefits accrue

from averted pollution measured in

barrels of oil not spilled and in averted

damage to property such as vessels and

machinery, measured in dollars. The

latter is an avoided cost. During 1999–

2014 inclusive, this rule will avert

10,205 barrels of oil spillage and $5.7

million of property damage.

To construct the benefits analysis, the

Coast Guard used data from its Marine

Safety Information System (MSIS) and

underlying reports to provide a

reasonable approximation for modeling

marine casualties and pollution

incidents. The model postulates that, if

requirements in this rule were not

enacted, the normalized frequency and

severity of pollution and damage due to

towline ruptures would continue at

about the same magnitude as during a

representative five-year base period,

which the Coast Guard identified as

1992–1996. This period captures the

maritime environment after the Oil

Pollution Act (OPA 90); the Coast Guard

considers the period long enough to

capture a representative history, while

short enough to be reasonably current.

Reports for 1992–96 are largely

complete. (We considered using 1992–

1997, but rejected it because report

histories for 1997 remain open and we

consider them too preliminary to

present a fair sample.)

The analysis recognized that a range

of variables extant in the marine

interface of people, vessels, machines,

and the sea may result in the occurrence

of some of the casualties targeted by this

rule after it is in force. Accordingly, the

Coast Guard assembled an analytical

team comprised of marine inspectors,

program analysts, and economists, who

reviewed data and individual case files

and who obtained consultations from a

range of subject-matter experts. This

team proceeded through a multi-step

risk assessment that considered the

combined and interactive effects of this

rule and several related rules that are in

effect or mandated by law for

completion in the near future. The

analysis yielded a probability of 32

percent that installed and working

powered anchoring-systems and

emergency-retrieval devices on the

affected tank barges, both single-hull

and double-hull vessels, would have

prevented or mitigated pollution and

property damage resulting from that

particular casualty.

The benefits analysis uses the phaseout of tank-barge capacity due under

OPA 90 as a proxy for the reduction of

exposure and spill potential, an

innovation that helped to guard against

the overstatement of benefits, since,

during 1998–2014 and before the final

phase-out of all single-hull tank barges,

single-hull tank barge capacity, which

represents the segment of industry

primarily affected by this rule, will

likely decrease at a much sharper rate

than will the actual count of available

in-service single-hull tank barges. This

is because the phase-out favors

longevity for the smallest single-hull

tank barges.

We used the phase-out schedule and

probabilities of effectiveness to weigh

capacity, and used this in turn to

calculate the benefits and avoided costs.

In addition, we reflated the avoided

costs—averted dollar damages to

property such as vessels and

machinery—from base-period

calculations to end-of-1998 values, by

relying on an adjustment factor based on

a Consumer Price Index.

The Coast Guard considered several

non-quantifiable benefits. No injuries,

deaths, or missing persons turned up in

casualty reports for the base period.

However, the types of casualties

addressed in this rule, particularly ones

that occur in inclement weather, are

inherently dangerous; a future casualty

of the kind that this rule will mitigate

could otherwise result in some deaths

and injuries. Further, while the pool of

oil-pollution benefit analyzed in the

assessment of this rule totaled slightly

less than 39,000 barrels of oil during the

base period, the upper bound of oil at

risk in those casualties—the total cargo

of oil aboard affected tank barges when

accidents occurred—exceeded 180,000

barrels. Future casualties of the kind

that this rule will mitigate could

otherwise result in far more serious

spills than this regulatory assessment

indicates.

Summary of Costs

Firms running tank barges, along with

a few State and local governments, will

incur costs primarily to purchase,

install, and maintain powered

anchoring systems and owners’ and

operators’ choices among retrieval

systems on certain tank barges, and in

some instances, on towing vessels. The

Coast Guard will incur modest

incremental inspection costs. Costs of

this rule will total $8.8 million. We

subtracted avoided costs from total costs

to yield a $3.1 million net cost.

Where we adjusted benefit

calculations to reflect phase-out of tankbarge capacity due under OPA 90 to

approximate both declining exposure

and declining potential for volume of

spills, we also adjusted cost calculations

to accommodate the phase-out of hulls

instead of volume. We did this because

we quantify the purchase, installation,

and maintenance of equipment required

by this rule hull by hull.

Purchase and installation costs accrue

to owners and operators of tank barges

31810 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations

and their towboats between 90 days and

two years after the publication of the

interim rule [63 FR 71754 (December 30,

1998)]. They should total between $7.93

million and $7.98 million. Fleet-wide,

costs for purchase and installation of

powered anchoring systems will total

$7.82 million, 98 percent of the total;

and, fleet-wide, costs for retrieval

systems will range between $112,000

and $157,000, depending on how

individual owners and operators weigh

the lower initial investment required for

powered anchoring systems against the

lower maintenance costs for retrieval

systems using hooks. A sensitivity

analysis contained in the regulatory

assessment showed that a typical

decision, if made on an economic basis,

will depend on the particular deal that

the owner or operator can drive and the

remaining life of the barge. Beyond all

those, qualitative decision factors

include not only availability of up-front

capital but personal or corporate

preferences.

Recurring costs to industry comprise

maintenance, repair, and, in some cases,

replacement of components. The

present value of these costs total about

$751,000 for powered anchoring

systems, and range between $49,000 for

retrieval systems using hooks and

$117,000 powered anchoring systems.

Recurring incremental costs borne by

the Coast Guard for inspections and law

enforcement should total about $4,500

at present value.

Double-hull tank barges are already in

compliance with this rule as a result of

their satisfying 33 CFR 155.230 before

this rulemaking. This rule should affect

up to 180 single-hull tank barges

operating on open oceans or in coastal

waters. We believe that many of these

barges are already in compliance. The

costs that we report account for our

estimates that, of the 180 barges, 97 will

need to install powered anchoring

systems and 24 barges or towing vessels

will need to install retrieval systems.

The Coast Guard does not expect

economic abandonment of any barges

on account of this rule. The per-barge

costs are relatively low, and the first

phase-out among the affected tank

barges does not occur until January 1,

2004. The two-year phase-in for the

more costly powered anchoring systems

obviates the need for an extra, out-ofcycle dry-dock period for the

installation. Most tank barges incurring

new costs as a result of this rule are

eligible to remain in service until 2015.

Unfunded Mandates Reform Act and

Enhancing the Intergovernmental

Partnership

The Unfunded Mandates Reform Act

of 1995 (UMRA) [2 U.S.C. 1531–1538]

and E.O. 12875, Enhancing the

Intergovernmental Partnership [58 FR

58093, (October 28, 1993)], govern the

issuance of Federal rules that require

unfunded mandates. An unfunded

mandate is a requirement that a State,

local, or tribal government or the private

sector incur direct costs without the

Federal Government’s having first

provided the funds to pay those costs.

If any Federal mandate causes those

entities to spend, in the aggregate, $100

million or more in any one year, an

analysis under the UMRA is necessary.

While several State and local

governments operate some tank barges,

entities in the private sector own and

operate most of the affected barges. This

final rule will not directly affect tribal

governments. The total burden of

Federal mandates imposed by this rule

is about $8.8 million and will not result

in annual expenditures of $100 million

or more. Therefore, this rule will not

impose an unfunded mandate.

Taking of Private Property

This rule will not effect a taking of

private property or otherwise have

taking implications under E.O. 12630,

Governmental Actions and Interference

with Constitutionally Protected Property

Rights.

Civil Justice Reform

This final rule meets applicable

standards in sections 3(a) and 3(b)(2) of

E.O. 12988, Civil Justice Reform, to

minimize litigation, eliminate

ambiguity, and reduce burden.

Protection of Children

We analyzed this final rule under E.O.

13045, Protection of Children from

Environmental Health Risks and Safety

Risks. This rule is not an economically

significant rule and does not concern an

environmental risk to health or risk to

safety that may disproportionately affect

children.

Small Entities

Under the Regulatory Flexibility Act

[5 U.S.C. 601 et seq.], the Coast Guard

considers the economic impact on small

entities of each rule for which a general

notice of proposed rulemaking is

required. ‘‘Small entities’’ include 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.

An analysis of impacts on small

entities for this final rule appears in the

regulatory assessment; it is available in

the docket for inspection or copying

where indicated under ADDRESSES.

Double-hull tank barges are already in

compliance with this rule’s

requirements for equipment by virtue of

their compliance with 33 CFR 155.230

before the interim rule on emergency

control measures became effective. That

section required an emergency towline,

the most common form of bargeretrieval system, on any oil barge

operating offshore. The requirements of

this rule for anchoring systems apply

only to single-hull barges. Further, most

towing vessels are now in voluntary

compliance with requirements, or their

owners may choose an option that shifts

requirements to a few barges that are not

now in voluntary compliance. As a

result, most towing vessels should not

incur compliance costs.

The impact of this rule will fall

primarily on single-hull tank barges

and, perhaps, several towing vessels.

The rule will require: (1) Owners and

operators of single-hull tank barges that

do not already have emergency

anchoring systems to purchase and

install them; (2) owners and operators of

vessels towing tank barges, regardless of

size, to purchase and carry emergency

retrieval systems if they do not already

have them; and (3) masters of towing

vessels to learn, and train crews, to

deploy anchors and operate retrieval

systems. Owners and operators of tank

barges and towing vessels are

responsible for both inspecting their

systems and maintaining them in good

working order. The purpose is to

decrease the probability of barge

breakaways and of the oil spillage,

pollution, and property damage that

could result.

The Coast Guard established a twoyear phase-in period for the

requirements of anchoring systems.

Although the Coast Guard received no

comments concerning small entities, we

recognize that some of the single-hull

tank barges are likely owned and

operated by small firms not dominant in

the industry. Barges affected by this rule

must undergo two drydock inspections

in five years, no more than three years

apart. The two-year phase-in permits

barges to undergo the installation of a

powered anchoring system during

normal yard availability. So they may

both avoid incurring the extra cost of a

third drydocking during a five-year

period and avoid incurring the

opportunity costs of lost revenue during

a third drydocking. The long phase-in

will thus permit most small entities to

explore the market, plan, and schedule

Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations 31811

installations during normal yard

availability. It reduces the pressure for

small entities to compete with major

operators for this availability.

Small owners and operators of singlehull tank barges do incur costs from the

phase-out mandated by OPA 90.

However, we believe that smaller barges

affected by this rule are the very ones

likeliest to be owned by small owners

and operators, many of whom will have

the opportunity to amortize purchase

and installation costs associated with

this rule through the end of the year

2014. The 146 relatively small barges

among the 180 barges directly affected

by this rule may remain in service until

January 1, 2015, the end of the phaseout period: the last vessels to be phased

out under OPA 90.

The equipment required by this rule

is in common use in the industry and

does not represent novel or untried

technology. Some small entities, no

doubt, are among the majority of owners

and operators who already meet some or

all of the requirements. Others will

incur a financial burden under this rule,

those who must purchase and install

equipment. But the costs are fairly low

in comparison with the replacement

cost of a tank barge, very low in

comparison with the replacement cost

of a towing vessel, and extremely low in

comparison with the damage that could

be caused by, and the liability that

could result from, an accident and

resultant spill.

The crafting of this rule so that many

affected vessels are already in

compliance, and the two-year phase-in

period for installation of retrievable

anchoring systems, together provide

important accommodations to, and

significant flexibility for, small entities

and others affected by this rule.

Accordingly, we certify under section

605(b) of the Regulatory Flexibility Act

[5 U.S.C. 601 et seq.] that this final rule

will not have a significant economic

impact on a substantial number of small

entities.

Assistance for Small Entities

Under section 213(a) of the Small

Business Regulatory Enforcement

Fairness Act of 1996 [Pub. L. 104–121],

the Coast Guard wants to assist small

entities in understanding this final rule

so they can better evaluate its effects on

them and participate in the rulemaking.

If this rule affects your small business

or organization and you have questions

concerning its provisions or options for

compliance, please call Mr. Robert

Spears, telephone 202–267–1099.

The Small Business and Agriculture

Regulatory Enforcement Ombudsman

and 10 Regional Fairness Boards were

established to receive comments from

small businesses about enforcement by

Federal agencies. The Ombudsman will

annually evaluate this enforcement and

rate each agency’s responsiveness to

small business. If you wish to comment

on enforcement by the Coast Guard, call

1–888–REG–FAIR (1–888–734–3247).

Collection of Information

This final rule does not provide for a

collection of information under the

Paperwork Reduction Act of 1995 [44

U.S.C. 3501 et seq.].

Impact on Federalism

This final rule revises the regulations

at 33 CFR 155.230 addressing

equipment, equipment operation,

maintenance, manning, and training

(personnel qualification) for tank barges

and the vessels towing them. It also

revises those regulations at 46 CFR

32.15–15 that address equipment for

tank barges. We have analyzed this final

rule in accordance with the principles

and criteria contained in Executive

Order (E.O.) 13132. It is well settled that

States are preempted from establishing

any requirements for tank vessels and

the vessels that tow them in the

categories of design, construction,

alteration, repair, maintenance,

operation, equipping, personnel

qualification, and manning. See the

decision of the Supreme Court in the

consolidated cases of United States v.

Locke and Intertanko v. Locke lll

U.S. lll, 2000 U.S. LEXIS 1895

(March 6, 2000). Thus, this entire rule

falls within preempted categories.

Because States may not promulgate

regulations within the categories

discussed above, preemption is not an

issue under E.O. 13132.

The NPRM and an effective interim

rule for this rulemaking were issued

before the E.O. went into effect.

However, we are aware that this is a

national rule of great interest to coastal

States. As a result, we provided States

and the public ample opportunity to

consult and comment during the

comment periods and public meetings

first for the NPRM and also following

the publication of the interim rule that

was in place before promulgation of this

final rule. We have considered their

comments on this rulemaking—whether

received through consultation, letters to

the docket, or public meetings—and

believe that we have accommodated

their concerns.

Barges Carrying Non-Petroleum Oil

The Edible Oil Regulatory Reform Act

[Pub. L. 104–55, 109 Stat. 546–547

(1995)] requires federal agencies to

differentiate between classes of oils and

consider different treatment of these

classes, if appropriate. The Coast Guard

has determined that bulk spills of

animal fat, vegetable oil, and other nonpetroleum oil can be damaging to the

environment; therefore, tank barges

carrying these products must comply

with this final rule.

Environment

The Coast Guard considered the

environmental impact of this final rule

and concluded that under Figure 2–1,

paragraphs (34)(c) and (d) of

Commandant Instruction M16475.1C,

this rule is categorically excluded from

further environmental documentation.

A Determination of Categorical

Exclusion is available in the docket for

inspection or copying where indicated

under ADDRESSES.

List of Subjects

33 CFR Part 155

Hazardous substances, Oil pollution,

Reporting and recordkeeping

requirements.

46 CFR Part 32

Cargo vessels, Fire prevention, Marine

safety, Navigation (water), Occupational

safety and health, Reporting and

recordkeeping requirements, Seamen.

For the reasons discussed in the

preamble, the Coast Guard amends 33

CFR part 155 and 46 CFR part 32, as

follows:

33 CFR PART 155—OIL OR

HAZARDOUS MATERIAL POLLUTION

PREVENTION REGULATIONS FOR

VESSELS

1. The authority citation for part 155

and the note following it continue to

read as follows:

Authority: 33 U.S.C. 1231, 1321(j); 46

U.S.C. 3703, 3715, 3719; sec. 2, E.O. 12777,

56 FR 54757, 3 CFR, 1991 Comp., p. 351; 49

CFR 1.46, 1.46(iii).

Sections 155.110–155.130, 155.350–

155.400, 155.430, 155.440, 155.470, 155.1030

(j) and (k), and 155.1065(g) also issued under

33 U.S.C. 1903(b); and §§ 155.1110–155.1150

also issued under 33 U.S.C. 2735.

Note: Additional requirements for vessels

carrying oil or hazardous materials appear in

46 CFR parts 30 through 36, 150, 151, and

153.

2. Revise § 155.230 to read as follows:

§ 155.230 Emergency control systems for

tank barges.

(a) Application. This section does not

apply to foreign vessels engaged in

innocent passage (that is, neither

entering nor leaving a U.S. port); it

applies to tank barges and vessels

towing them on the following waters:

31812 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations

(1) On the territorial sea of the U.S. [as

defined in Presidential Proclamation

5928 of December 27, 1988, it is the belt

of waters 12 nautical miles wide with its

shoreward boundary the baseline of the

territorial sea], unless—

(i) The barge is being pushed ahead

of, or towed alongside, the towing

vessel; and

(ii) The barge’s coastwise route is

restricted, on its certificate of inspection

(COI), so the barge may operate ‘‘in fair

weather only, within 20 miles of shore,’’

or with words to that effect. The Officer

in Charge, Marine Inspection, may

define ‘‘fair weather’’ on the COI.

(2) In Great Lakes service unless—

(i) The barge is being pushed ahead

of, or towed alongside, the towing

vessel; and

(ii) The barge’s route is restricted, on

its certificate of inspection (COI), so the

barge may operate ‘‘in fair weather only,

within 5 miles of a harbor,’’ or with

words to that effect. The Officer in

Charge, Marine Inspection, may define

‘‘fair weather’’ on the COI.

(3) On Long Island Sound. For the

purposes of this section, Long Island

Sound comprises the waters between

the baseline of the territorial sea on the

eastern end (from Watch Hill Point,

Rhode Island, to Montauk Point, Long

Island) and a line drawn north and

south from Premium Point, New York

(about 40°54.5′N, 73°45.5′W), to Hewlett

Point, Long Island (about 40°50.5′N,

73°45.3′W), on the western end.

(4) In the Strait of Juan de Fuca.

(5) On the waters of Admiralty Inlet

north of Marrowstone Point

(approximately 48°06′N, 122°41′W).

(b) Safety program. If you are the

owner or operator of a single-hull tank

barge or of a vessel towing it, you must

adequately man and equip either the

barge or the vessel towing it so the crew

can arrest the barge by employing

Measure 1, described in paragraph (b)(1)

of this section. Moreover, the crew must

be able to arrest or retrieve the barge by

employing either Measure 2 or Measure

3, described in paragraphs (b)(2) and (3)

of this section, respectively. If you are

the owner or operator of a double-hull

tank barge, you must adequately equip

it and train its crew or, if it is

unmanned, train the crew of the vessel

towing it, so the crew can retrieve the

barge by employing Measure 2

described in paragraph (b)(2) of this

section.

(1) Measure 1. Each single-hull tank

barge, whether manned or unmanned,

must be equipped with an operable

anchoring system that conforms to 46

CFR 32.15–15; except that, for barges

operating only on the West Coast of the

U.S., a system comprising heavy surge

gear and bridle legs may serve instead

of the anchoring system. Because these

systems will also serve as emergency

control systems, the owner or operator

must ensure that they meet the

following criteria:

(i) Operation and performance. When

the barge is underway—

(A) The system is ready for immediate

use;

(B) No more than two crewmembers

are needed to operate the system and

anchor the barge or arrest its movement;

(C) While preparing to anchor the

barge or arrest its movement, the

operator of the system should confer

with the master or mate of the towing

vessel regarding appropriate length of

cable or chain to use; and

(D) Each operator of the system

should wear a safety belt or harness

secured by a lanyard to a lifeline, drop

line, or fixed structure such as a welded

padeye, if the sea or the weather

warrants this precaution. Each safety

belt, harness, lanyard, lifeline, and drop

line must meet the specifications of

ANSI A10.14.

(ii) Maintenance and inspections. The

owner or operator of the system shall

inspect it annually. The inspection must

verify that the system is ready for

immediate use, and must include a

visual inspection of the equipment that

comprises the system in accordance

with the manufacturer’s

recommendations. The inspection must

also verify that the system is being

maintained in accordance with the

manufacturer’s recommendations. The

inspection need not include actual

demonstration of the operation of the

equipment or system.

(iii) Training. On each manned barge,

every crewmember must be thoroughly

familiar with the operation of the

system. On each vessel towing an

unmanned barge, every deck

crewmember must be thoroughly

familiar with the operation of the

system installed on the barge. If during

the last 12 months the system was not

used to anchor or arrest the movement

of the barge, then a drill on the use of

the system must be conducted within

the next month. The drill need not

involve actual deployment of the

system. However, it must allow every

participant to demonstrate the

competencies (that is, the knowledge,

skills, and abilities) needed to ensure

that everyone assigned a duty in

anchoring or arresting the movement of

the barge is ready to do his or her duty.

(2) Measure 2. If you are the owner or

operator of a tank barge or a vessel

towing it and this section applies to you

by virtue of paragraph (a) of this section,

you must have installed an emergency

retrieval system or some other measure

acceptable to the Coast Guard, as

provided in paragraph (b)(3) of this

section. Any such system must meet the

following criteria:

(i) Design. The system must use an

emergency towline with at least the

same pulling strength as required of the

primary towline. The emergency

towline must be readily available on

either the barge or the vessel towing it.

The towing vessel must have on board

equipment to regain control of the barge

and continue towing (using the

emergency towline), without having to

place personnel on board the barge.

(ii) Operation and performance. The

system must use a stowage arrangement

that ensures the readiness of the

emergency towline and the availability

of all retrieval equipment for immediate

use in an emergency whenever the barge

is being towed astern.

(iii) Maintenance and inspection. The

owner or operator of the system shall

inspect it annually. The inspection must

verify that the emergency retrieval

system is ready for immediate use, and

must include a visual inspection of the

equipment that comprises the system in

accordance with the manufacturer’s

recommendations. The inspection must

also verify that the system is being

maintained in accordance with the

manufacturer’s recommendations. The

inspection need not include actual

demonstration of the operation of the

equipment or system. Details

concerning maintenance of towlines

appear in 33 CFR 164.74(a)(3) and

Navigation and Vessel Inspection

Circular (NVIC) No. 5–92. Our NVICs

are available online at http://

www.uscg.mil/hq/g-m/nvic/index.htm.

(iv) Training. Barge-retrieval drills

must take place annually, and not more

than one month after a master or mate

responsible for supervising barge

retrieval begins employment on a vessel

that tows tank barges.

(A) Each drill must allow every

participant to demonstrate the

competencies (that is, the knowledge,

skills, and abilities) needed to ensure

that everyone assigned a duty in barge

retrieval is ready to do his or her part

to regain control of a drifting barge.

(B) If the drill includes actual

operation of a retrieval system, it must

be conducted under the supervision of

the master or mate responsible for

retrieval, and preferably in open waters

free from navigational hazards so as to

minimize risk to personnel and the

environment.

(3) Measure 3. If you are the owner or

operator of a tank barge or a vessel

towing it and this section applies to you

by virtue of paragraph (a) of this section,

Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations 31813

you may use an alternative measure or

system fit for retrieving a barge or

arresting its movement as a substitute

for Measure 2, described in paragraph

(b)(2) of this section. Before you use

such a measure or system, however, it

must receive the approval of the

Commandant (G–MSE). It will receive

this approval if it provides protection

against grounding of the tank vessel

comparable to that provided by one of

the other two measures described in this

section.

46 CFR PART 32—SPECIAL

EQUIPMENT, MACHINERY, AND HULL

REQUIRMENTS

3. The authority citation for part 32

continues to read as follows:

Authority: 46 U.S.C. 2103, 3306, 3703,

3719; E.O. 12234, 45 FR 58801, 3 CFR, 1980

Comp., p. 277; 49 CFR 1.46; Subpart 32.59

also issued under the authority of Sect. 4109,

Pub. L. 101–380, 104 Stat. 515.

4. In § 32.15–15, revise paragraph (e)

to read as follows:

§ 32.15–15 Anchors, Chains, and HawsersTB/ALL.

* * * * *

(e) Barges Equipped with Anchors to

Comply with 33 CFR 155.230(b)(1). Each

barge equipped with an anchor, to

comply with 33 CFR 155.230(b)(1), must

be fitted with an operable anchoring

system that includes a cable or chain,

and a winch or windlass. All

components of the system must be in

general conformity with the standards

issued by a recognized classification

society. A list of recognized

classification societies, including

information for ordering copies of

approved standards, is available from

Commandant (G–MSE), 2100 Second

Street SW, Washington, DC 20593–0001;

telephone (202) 267–6925 or fax (202)

267–4816. If the Coast Guard finds that

your anchoring system is not in general

conformity with an approved standard,

it will advise you how to bring it into

such conformity.

* * * * *

Dated: May 8, 2000.

J.C. Card,

Vice Admiral, U.S. Coast Guard, Acting

Commandant.

[FR Doc. 00–12570 Filed 5–18–00; 8:45 am]

BILLING CODE 4910–15–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 165

[CGD05–00–013]

RIN 2115–AA97

Safety Zone; Atlantic Ocean, Virginia

Beach, VA.

AGENCY: Coast Guard, DOT.

ACTION: Temporary final rule; request for

comments.

SUMMARY: The Coast Guard is

establishing a temporary safety zone for

the Virginia Beach fireworks displays,

north of the Virginia Beach Fishing Pier,

in the Atlantic Ocean. This action will

restrict vessel traffic on the Atlantic

Ocean within a 2500-foot radius of a

fireworks laden barge. The safety zone

is necessary to protect mariners and

spectators from the hazards associated

with the fireworks display.

DATES: This rule is effective from May

20, 2000 through July 4, 2000.

ADDRESSES: Comments must be received

by June 15, 2000. You may mail

comments and related material to USCG

Marine Safety Office Hampton Roads,

200 Granby Street, Norfolk, Virginia, or

deliver them to the same address

between 8 a.m. and 4 p.m., Monday

through Friday, except Federal holidays.

USCG Marine Safety Office Hampton

Roads maintains the public docket for

this rulemaking. Comments and

materials received from the public, as

well as documents indicated in this

preamble as being available in the

docket, will become part of this docket

and will be available for inspection or

copying at the above address between 8

a.m. and 4 p.m., Monday through

Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Chief Petty Officer Roddy Corr, project

officer, USCG Marine Safety Office

Hampton Roads, telephone number

(757) 441–3290.

SUPPLEMENTARY INFORMATION:

Request for Comments

Although this rule is being published

as a temporary final rule without prior

notice, an opportunity for public

comment is nevertheless desirable to

ensure the rule is both reasonable and

workable. Accordingly, we encourage

you to submit comments and related

material. If you do so, please include

your name and address, identify the

docket number for this rulemaking

(CGD05–00–013), indicate the specific

section of this document to which each

comment applies, and give the reason

for each comment. Please submit all

comments and related material in an

unbound format, no larger than 81⁄2 by

11 inches, suitable for copying. If you

would like to know they reached us,

please enclose a stamped, self-addressed

postcard or envelope.

Regulatory History

We did not publish a notice of

proposed rulemaking (NPRM) for this

regulation. Under 5 U.S.C. 553(b), the

Coast Guard finds that good cause exists

for not publishing an NPRM. We were

not notified of these events until May 5,

2000. There was insufficient time to

publish an NPRM, allow for comments,

and publish a final rule in sufficient

time to allow notice to the public for the

fireworks displays taking place prior to

July 4, 2000. In previous years, these

and similar events have been held

without incident and without comment

from the public regarding the Coast

Guard’s establishment of limited safety

zones around barges engaged in

launching fireworks. An NPRM will be

published for those Virginia Beach

fireworks displays taking place after

July 4, 2000 of which we have been

notified.

Under 5 U.S.C. 553(d)(3), the Coast

Guard finds that good cause exists for

making this rule effective less than 30

days after publication in the Federal

Register. Most of these events will take

place within 30 days of the publication

of this rule. Delaying the effective date

of the regulation would be contrary to

the public interest because immediate

action is needed to protect the mariners

and spectators from the hazards

associated with the fireworks display.

Background and Purpose

The Coast Guard is establishing a

temporary safety zone for the Virginia

Beach fireworks displays north of the

Virginia Beach Fishing Pier, in the

Atlantic Ocean. The safety zone will

restrict vessel traffic within a 2500-foot

radius of a fireworks laden barge in

approximate position 36°50.75′ north

and 076°58.40′ west. The safety zone is

necessary to protect mariners and

spectators from the hazards associated

with the fireworks display.

The safety zone will be enforced from

9 p.m. until 11 p.m. on May 20, 2000;

May 27, 2000—rain date May 28, 2000;

June 4, 2000—rain date June 10, 2000;

June 11, 2000—rain date June 17, 2000;

June 18, 2000—rain date June 24, 2000;

June 25, 2000—rain date July 1, 2000;

and July 4, 2000.

Additional public notifications will

be made prior to the event via marine

information broadcasts.