[Federal Register Volume 62, Number 247 (Wednesday, December 24, 1997)]
[Rules and Regulations]
[Pages 67526-67537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33477]



[[Page 67525]]

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Part VII





Department of Transportation





_______________________________________________________________________



Coast Guard



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33 CFR Part 151



46 CFR Part 1, et al.



Alternate Compliance via Recognized Classification Society and U.S. 
Supplement to Rules; Final Rule

Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / 
Rules and Regulations

[[Page 67526]]



DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 151

46 CFR Parts 1, 8, 31, 69, 71, 91, 107, 153, and 154

[CGD 95-010]
RIN 2115-AF11


Alternate Compliance via Recognized Classification Society and 
U.S. Supplement to Rules

AGENCY: Coast Guard, DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard is issuing regulations to provide owners of 
U.S. tank vessels, passenger vessels, cargo vessels, miscellaneous 
vessels and mobile offshore drilling units an alternative method to 
fulfill the requirements for vessel design, inspection and 
certification. Under this final rule, the Coast Guard can issue a 
certificate of inspection based upon reports by a recognized, 
authorized classification society that the vessel complies with the 
International Convention for the Safety of Life at Sea (SOLAS), 1974, 
as amended, the International Convention for the Prevention of 
Pollution from Ships, 1973, as modified by the Protocol of 1978 
relating thereto (MARPOL 73/78), other applicable international 
conventions, classification society rules and other specified 
requirements. This new procedure will reduce the burden on vessel 
owners and operators by establishing an alternative to the current 
Coast Guard inspection system that results in plan reviews and 
inspections by the vessel's classification society as well as by the 
Coast Guard.

DATES: This final rule is effective January 23, 1998. Section 8.440 
applied to existing vessels as of July 31, 1997. The incorporation by 
reference of certain publications listed in the rule is approved by the 
Director of the Federal Register on January 23, 1998.

ADDRESSES: Documents as indicated in this preamble are available for 
inspection or copying at the office of the Executive Secretary, Marine 
Safety Council (G-LRA/3406), U.S. Coast Guard Headquarters, 2100 Second 
Street SW., room 3406, Washington, DC 20593-0001, between 9:30 a.m. and 
2 p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-267-1477.

FOR FURTHER INFORMATION CONTACT: LCDR Daniel Pippenger, Marine Safety 
and Environmental Protection (G-MSE-1), telephone (202) 267-2997, fax 
(202) 267-4816.

SUPPLEMENTARY INFORMATION:

Regulatory History

    On December 27, 1996, the Coast Guard published an interim rule 
entitled ``Vessel Inspection Alternatives; Classification Procedures'' 
in the Federal Register (61 FR 68510). The Coast Guard received 17 
letters commenting on the interim rule. No public hearing was 
requested, and none was held.

Background and Purpose

    On October 4, 1994, the Coast Guard published a notice of proposed 
rulemaking (NPRM) entitled ``Alternate Inspection Compliance Programs 
for the U.S. Maritime Industry'' in the Federal Register (59 FR 50537). 
In the comments submitted in response to this NPRM, members of the U.S. 
maritime industry noted the continuing economic pressure on the U.S. 
oceangoing merchant fleet and commercial shipbuilding industry. 
Additional comments were submitted calling for reduction of the cost 
disadvantage attributed to Coast Guard inspection and certification of 
U.S. merchant vessels in order to improve the international 
competitiveness of the U.S. merchant fleet.
    In order to address these concerns, the Coast Guard sought a means 
to alleviate the cost burdens on the maritime industry that resulted 
from the Coast Guard inspection program. The Coast Guard has had 
authority under 46 U.S.C. Sec. 3116 to rely on reports, documents and 
certificates issued by the American Bureau of Shipping (ABS) in 
carrying out its responsibilities for safety of U.S. merchant vessels 
and to delegate to ABS the inspection or examination of these vessels. 
The Coast Guard had in fact delegated to ABS the authority to issue 
certain certificates required by international conventions, such as the 
International Convention for the Safety of Life at Sea (SOLAS) Cargo 
Ship Safety Construction Certificate. Compliance with these standards 
is required for oceangoing vessels, i.e. vessels trading in foreign 
countries. Additionally, insurance companies require that, before a 
vessel is insured, it be classed. This means that a classification 
society must survey a vessel for compliance with its class rules. Class 
rules are rules developed by the particular classification society to 
cover the design, construction and maintenance of vessels. To ensure 
compliance with these class rules and with international standards, 
classification societies perform surveys on vessels using qualified 
marine surveyors. Many of the items examined by the classification 
society surveyors are the same as those examined by Coast Guard marine 
inspectors in their inspections for certification.
    Thus, there is duplication of effort between the Coast Guard and 
the ABS involving safety of vessels that results in extra costs to U.S. 
vessel owners. In light of the authority in 46 U.S.C. 3316 to delegate 
vessel inspections and examinations to ABS, the Coast Guard, in order 
to address the concerns of the vessel owners regarding these costs, 
examined the feasibility of an alternative to the current situation 
that would avoid the duplication of inspections between ABS and the 
Coast Guard. A joint Coast Guard/ABS task force compared the Coast 
Guard requirements in the Code of Federal Regulations (CFR) to the 
class requirements in ABS class rules, SOLAS, and the International 
Convention for the Prevention of Pollution from Ships, as amended, 
(MARPOL 73/78) concerning the design, construction and safety systems 
for oceangoing merchant vessels. The purpose of this comparison was to 
identify redundancies between the requirements and to determine if the 
class and international requirements, which U.S. vessels must currently 
comply with, could be used in place of Coast Guard regulatory 
requirements. The standard used was whether compliance with the class 
and international standards would achieve a level of safety equivalent 
to compliance with Coast Guard regulatory requirements.
    The task force determined that many Coast Guard regulatory 
requirements could be satisfied by certification of compliance with ABS 
classification rules, SOLAS, MARPOL 73/78, or combination of the three. 
This led to the development of a U.S. Supplement to the ABS 
classification rules. This supplement addresses those areas where 
current Coast Guard requirements are not embodied by either ABS 
classification rules or international conventions.
    The Coast Guard concluded that the design requirements and survey 
provisions of ABS classification rules, applicable international 
conventions and the U.S. Supplement to the ABS classification rules 
provide a level of safety equivalent to corresponding Federal 
regulations.
    As a result of this effort, the Alternate Compliance Program (ACP) 
was developed to reduce redundant inspection efforts without 
jeopardizing safety. The Coast Guard expects that,

[[Page 67527]]

under the ACP, vessel owners and operators will have reduced vessel 
down time, greater flexibility in scheduling inspections, and greater 
flexibility in meeting required standards.
    The Coast Guard conducted an ACP pilot program, which was announced 
by the Federal Register notice of February 3, 1995 (60 FR 6687). Its 
purpose was to test and evaluate the standards and procedures developed 
for the ACP. Sixty-two ships were enrolled in the pilot program which 
ended on July 31, 1997. The ACP was implemented on that date under the 
regulations described in the following paragraphs.
    On June 22, 1995, the Coast Guard published a NPRM entitled 
``Alternate Compliance via Recognized Classification Society and U.S. 
Supplement to Rules'' in the Federal Register (60 FR 32478). The NPRM 
proposed regulatory changes to allow owners, operators, shipbuilders, 
and designers of U.S. flagged tank vessels, passenger vessels, cargo 
vessels, miscellaneous vessels and mobile offshore drilling units to 
use the services of a recognized classification society to conduct 
inspection and plan review functions now performed by the Coast Guard.
    The NPRM proposed establishment of the ACP through addition of new 
sections in 46 CFR parts 31 (31.01-3), 71 (71.15-5), 91 (91.15-5), and 
107 (107.205). These sections would allow the owner or operator of a 
vessel to submit the vessel for inspection by a recognized 
classification society. The classification society would survey the 
vessel and document compliance with applicable international 
requirements, class rules and its U.S. supplement. The cognizant Coast 
Guard Officer-in-Charge, Marine Inspection, could then issue a 
certificate of inspection based upon the classification society's 
reports documenting that the vessel is classed and that it complies 
with all applicable requirements.
    On December 27, 1996, the Coast Guard published an interim rule 
entitled ``Vessel Inspection Alternatives; Classification Procedures'' 
in the Federal Register (61 FR 68510). This rulemaking with the 
addition of other 46 CFR sections not included in the NPRM, implemented 
the ACP program.

Discussion of Comments and Changes

    In a continuous effort to refine the ACP, several minor technical 
changes are needed to facilitate clear application of this rule.
    The Coast Guard amended the text of 46 CFR 8.450 to clarify the 
status of international certificates issued by a classification society 
whose authority to participate in the ACP is terminated. If a 
classification society is no longer eligible to participate in the ACP, 
the certificates issued by that society would remain valid subject to 
any termination of authorization to issue those certificates on behalf 
of the Coast Guard as detailed in Sec. 8.330. Also, the Coast Guard 
will notify a vessel owner of the time frame required for such action. 
Because of the many variables involved in the possible termination of 
authority of a classification society to participate in the ACP, such 
as the reason for termination or the number of ships involved, it is 
not reasonable to set a specific time limit for accomplishment of the 
required action.
    The current regulatory text regarding four of the certificates 
listed in Sec. 8.320 (International Certificate of Fitness for the 
Carriage of Dangerous Chemicals in Bulk; International Certificate of 
Fitness for the Carriage of Liquefied Gases in Bulk; MARPOL 73/78 
International Oil Pollution Prevention Certificate; and MARPOL 73/78 
International Oil Pollution Prevention Certificate for the Carriage of 
Noxious Liquid Substances in Bulk) allows only the Coast Guard to issue 
these certificates to U.S. flag vessels. The intent of this rulemaking 
is to allow certain classification societies to issue these 
certificates on behalf of the U.S. as well. Therefore, modification to 
33 CFR part 151, 46 CFR part 153 and 154 are necessary.
    In Sec. 8.100, the definition of ``MARPOL 73/78'' was changed to be 
consistent with the definition in 33 U.S.C. 1901.
    As the ACP has been implemented, the Coast Guard has recognized 
that additional references to rules and approved supplements are 
necessary. Because a supplement is approved related to a specific year 
of classification society rules and international conventions, it is 
appropriate to update and approve the supplement each time a new set of 
classification society rules are approved. Therefore, each year, the 
Coast Guard anticipates approving and incorporating a set of 
classification society rules and a companion supplement. To facilitate 
this process, the Coast Guard eliminated the direct listing of approved 
classification society rules and supplements in the applicable 46 CFR 
parts (31, 71, 91, and 107) and modified the language of those sections 
to refer the user to one section for a list of incorporated 
classification society rules and supplements in Sec. 8.110(b).
    In Sec. 8.320, the list of certificates requires correction. The 
``SOLAS Certificate of Fitness for the Carriage of Dangerous Chemicals 
in Bulk'' and the ``SOLAS Certificate of Fitness for the Carriage of 
Liquefied Gases in Bulk'' are correctly titled the ``International 
Certificate of Fitness for the Carriage of Dangerous Chemicals in 
Bulk'' and the ``International Certificate of Fitness for the Carriage 
of Liquefied Gases in Bulk''.
    Participation of a vessel in the ACP is contingent upon several 
items in Sec. 8.410. One requirement is that the vessel be ``classed'' 
by a recognized classification society that is authorized to 
participate in the ACP. To clearly convey the Coast Guard's 
understanding of what it means for a vessel to be ``classed,'' the 
Coast Guard added a definition of the term to Sec. 8.100.
    The applicability in Sec. 8.410 specified that the ACP applies to 
all U.S. flag vessels that meet certain requirements. However, the ACP 
is currently open to U.S. flag tank vessels, passenger vessels, cargo 
vessels, miscellaneous vessels, and mobile offshore drilling units 
(MODUs). To accurately reflect these limitations, Sec. 8.410 will refer 
each vessel type to the appropriate subchapter of 46 CFR containing the 
authorization to use the ACP in place of other requirements.
    46 CFR subchapter G, Sec. 69.27(b) requires an organization to be a 
full member of the International Association of Classification 
Societies (IACS) and incorporated under the laws of the United States, 
a State of the United States, or the District of Columbia to be 
eligible for delegated tonnage measurement authority. There is no 
statutory requirement for these criteria and they are inconsistent with 
the intent of the ACP rulemaking, which is to allow classification 
societies, regardless of home country, meeting the standards in part 8, 
to be recognized and delegated authority to perform services on behalf 
of the Coast Guard. Therefore, the final rule modifies this section so 
the ACP can function as intended.
    The Coast Guard received a total of 17 letters that commented on 
the ACP interim rule. All letters expressed support for the program. 
One comment specifically mentioned the reduced cost and increased 
options the ACP will give the maritime industry. Some letters contained 
suggestions for improvement in areas that may need adjustment. The 
following discussion addresses these comments.
    Ten comments addressed issues relating to reciprocity. One comment 
noted that not all classification societies can ``certify'' in their 
own home country. These comments recommended modification of acceptance 
to include recognition when authorization to ABS is equal to that 
allowed by the country of origin. The Coast Guard will delegate

[[Page 67528]]

the authority to issue listed certificates when all of the conditions 
for reciprocity, recognition, and authorization are met. This approach 
is consistent with the language in the Coast Guard Authorization Act of 
1996 (Pub. L. 140-324), and will result in the most efficient 
delegation program. To allow the appropriate flexibility needed for 
successful application of the ACP program, the Coast Guard will modify 
Sec. 8.120(a). The Coast Guard will grant authorization to a foreign 
classification society to issue international certificates on a ``case-
by-case'' basis. Some of the factors that the Coast Guard may consider 
in granting authorization are:
    <bullet> Whether the foreign classification society has a 
satisfactory port state control history;
    <bullet> Whether the foreign classification society has met the 
criteria contained in 46 CFR 8.230;
    <bullet> Whether the foreign classification society developed a 
U.S. supplement to its class rules for use in the ACP that is in 
accordance with 46 CFR 8.430, as appropriate; and whether the home 
government of the foreign classification society has provided, or will 
simultaneously provide, ABS sufficient access to inspect, certify and 
provide related services to vessels documented in that country.
    One of the comments suggested that the Coast Guard establish an 
annual review of reciprocity provisions. An annual review of 
reciprocity is unnecessary. In the event that the American Bureau of 
Shipping undergoes any changes in their foreign government 
authorizations, it is reasonable to expect that the Coast Guard will be 
notified by the American Bureau of Shipping of any such changes, at 
which time the Coast Guard will review the applicable reciprocity 
provisions for appropriate resolution.
    Two comments recommended the removal of the 2-year trial period 
prior to being eligible to participate in the ACP as required in 
Sec. 8.420. The Coast Guard does not agree. The ACP is a very 
comprehensive program that covers issues not addressed by international 
convention requirements. In the ACP, participating vessels have limited 
involvement with the Coast Guard and the Certificate of Inspection 
(COI) is based largely on classification society reports. The Coast 
Guard has limited experience with foreign classification societies. 
Therefore, it is prudent to maintain this 2-year trial period in order 
to gain experience with foreign classification societies, their rules, 
surveyors, and procedures. Additionally, the 2-year period will allow 
the Coast Guard to assess the capability and performance of the 
classification society to ensure they are adequate to perform the 
extensive delegations granted under the ACP. The Coast Guard is making 
no change to this requirement.
    One comment requested that the Safety Certificate for High Speed 
Craft be added to the functions that may be delegated in Sec. 8.320. 
The Coast Guard does not agree. The High Speed Craft Code is new and 
has had very limited application in the U.S. Until further experience 
and familiarity are gained with the High Speed Craft Code for U.S. flag 
vessels, the Coast Guard does not plan to delegate this function.
    One comment suggested adding the SOLAS Passenger Vessel Safety 
Certificate to those listed in Sec. 8.320. Passenger vessels may 
qualify for participation in the ACP. However, the Coast Guard intends 
to maintain first hand involvement in the issuance of this certificate 
due to the degree of risk involved. The Coast Guard will retain 
authority for issuance of the SOLAS Passenger Vessel Safety 
Certificate.
    One comment was from the United States Environmental Protection 
Agency (EPA). The EPA expressed concern about authorizing a 
classification society to issue the International Air Pollution 
Prevention (IAPP) and the Engine International Air Pollution Prevention 
(EIAPP) certificates under MARPOL Annex VI. Section 8.320 does not 
permit delegation of these certificates to a classification society. No 
change is made in response to this comment.
    One comment addressed the definition of the term ``gross tons'' in 
Sec. 8.100. The comment stated that the terms ``method used by flag 
state administration'' are confusing and unnecessary since subpart A is 
limited to U.S. flag vessels. The Coast Guard does not concur. This 
terminology is necessary because classed tonnage is an element of the 
minimum standards for a recognized classification society in 
Sec. 8.230. The Coast Guard intends to allow class societies to count 
all vessel tonnage they class, regardless of the flag administration. 
Because not all administrations apply the International Convention on 
Tonnage Measurement of Ships, 1969, to all measured vessels, this 
clause is necessary.
    One comment questioned the use of the American National Standards 
Institute (ANSI) standard ANSI/ASQC Q9001 in place of the international 
standard ISO 9001. The Coast Guard agrees that the international 
standard is also acceptable. As stated in the rule, a classification 
society may meet the requirements of the ANSI/ASQC Q9001 or an 
equivalent quality standard. Therefore, the Coast Guard makes no change 
in response to this comment.
    Five comments recommended changes to the applicability of the ACP. 
These comments noted that the ACP should not be restricted only to 
vessels engaged on international voyages but should be open to all 
vessels that meet international requirements regardless of their ports 
of call. The term international voyages was used in Sec. 8.410 to 
ensure that vessels in the ACP carried all applicable international 
certificates and was not intended to restrict ACP to only those vessels 
that engage on international voyages. The Coast Guard will modify the 
wording of Sec. 8.410(b). Instead of the phrase ``engaged in 
international voyages'', the Coast Guard will use the term 
``certificated for international voyages''. This clearly expresses the 
intent that a vessel participating in the ACP will have a valid set of 
all certificates necessary to engage in an international voyage.
    The ACP is solidly based on the safety system comprised of the 
following elements: Compliance with all relevant international 
requirements, classification society rules, and the relevant U.S. 
supplement. This safety system is being accepted in the ACP as an 
equivalent to the system embodied in Title 46 of the CFR. Thus, U.S. 
flagged vessels that do not carry valid and appropriate certificates 
necessary to engage in international voyages, regardless of class, are 
not eligible to participate in the ACP.
    Two comments related to the use of exclusive surveyors for all work 
done on behalf of the Coast Guard. One comment requested the use of 
exclusive surveyors for all ACP work. With the exception of tonnage 
measurement, the Coast Guard agrees and notes that this is already 
required under Sec. 8.130(a)(25). Restricting tonnage measurement to 
exclusive surveyors is contrary to current practice and would reduce 
flexibility and probably result in higher cost to the public. Section 
8.130(a)(25) has been modified to allow the use of part-time employees 
or independent contractors to provide tonnage measurement services.
    The other comment requested the use of one classification society's 
exclusive surveyors by other classification societies if the two 
societies involved have a bilateral agreement. The Coast Guard does not 
agree. When authorizing a classification society to do work related to 
the ACP, the Coast Guard accepts a classification society's rules, 
survey procedures and processes as an acceptable alternative to federal

[[Page 67529]]

regulations. A classification society's own exclusive surveyors are in 
the best position to accurately enforce these items. Given the scope of 
delegation and the minimal Coast Guard presence on ACP vessels, the 
Coast Guard makes no change in response to this comment. However, based 
on these comments, the Coast Guard has added a definition of 
``exclusive surveyor'' to Sec. 8.100 for clarification.
    One comment recommended a specific classification society not be 
allowed to participate in the ACP. The Coast Guard appreciates the 
intent of the individual to improve the program. All applications for 
recognition and authorization are carefully reviewed in accordance with 
part 8. Any classification society meeting these requirements may enter 
the program. The Coast Guard has made no change in response to this 
comment.
    One comment recommended that authority to issue certificates be 
revoked if reciprocity conditions were no longer being satisfied. 
Reciprocity is required by U.S. law in the Coast Guard Authorization 
Act of 1996 (Pub. L. 104-324, 110 Stat. 3901). The Coast Guard agrees 
and has modified Secs. 8.330 and 8.450 accordingly.
    One comment contained recommendations on document availability. It 
requested all documents to be maintained in a public docket. The Coast 
Guard disagrees. Some information submitted during the application for 
recognition of a classification society is clearly proprietary and 
therefore inappropriate for release. Information regarding recognition 
and authorization status will be available in accordance with the 
Freedom of Information Act. The Coast Guard is making no change in 
response to this comment.
    One comment on Sec. 8.320(a)(7) recommended the removal of the term 
``SOLAS'' from the ``SOLAS Mobile Offshore Drilling Unit Safety 
Certificate.'' The Coast Guard agrees and will correct this certificate 
title to ``International Maritime Organization (IMO) Mobile Offshore 
Drilling Unit Safety Certificate.''
    One comment stated that load line and tonnage admeasurement should 
be harmonized to require reciprocity with the delegations under ACP. 
The Coast Guard does not agree. Delegation of these functions is 
permitted under 46 U.S.C. 5107 and 46 U.S.C. 14103, respectively, and 
reciprocity is not an element of the conditions of delegation. The 
Coast Guard is making no change in response to this comment.
    One comment stated that a recognized classification society should 
have the right to refuse to conduct services. The Coast Guard agrees. 
However, the interim rule does not restrict the classification society 
actions in this regard. In consideration of this comment, the Coast 
Guard modified the text in Sec. 8.130(a)(10) to recognize that a 
classification society may have occasion to refuse to attend a vessel 
for which it has performed a delegated function on behalf of the Coast 
Guard, when requested by the Coast Guard.
    One comment requested that documents be ``in a language which is 
mutually acceptable to both parties.'' The Coast Guard does not agree. 
The Coast Guard requires documents related to delegated functions to be 
in English. There is no change to Sec. 8.130(a)(18) or Sec. 8.230(a)(7) 
and (8) in response to this comment.
    One comment suggests that the Coast Guard accept oversight 
monitoring by other administrations. The Coast Guard agrees that 
oversight and monitoring activities conducted by other administrations 
may be useful to the delegated functions of the ACP. The Coast Guard 
does not agree that any added text to Sec. 8.130(a)(22) is warranted. 
The intent of this agreement condition is to ensure that an authorized 
classification society will allow the Coast Guard the necessary access 
to perform its own oversight activities. This agreement condition does 
not prohibit other means of attaining information as part of the Coast 
Guard's oversight activities.
    One comment stated that reciprocity was intended to solidify ABS 
market shares and not to advance marine safety. The Coast Guard 
disagrees. Reciprocity is included because it is required under the 
Coast Guard Authorization Act of 1996 (Pub. L. 104-324). This provision 
may increase the choices available to the marine industry and result in 
lower costs. The Coast Guard makes no change in response to this 
comment.
    One comment requested amendment to Sec. 8.410(b) to further expand 
ACP applicability to foreign flag MODUs required to obtain a letter of 
compliance under 33 CFR subchapter N. The Coast Guard does not agree. 
The ACP is available for U.S. flag vessels as an alternative to 
compliance with U.S. regulations. The Coast Guard reiterates that the 
safety system of class rules, international conventions, and the 
supplement to class rules is considered as an alternative to U.S. 
regulations. Foreign flag vessels are not subject to U.S. vessel 
standards and therefore, are not considered in this program. There is 
no change in response to this comment.
    One comment welcomed the ACP because COIs can be issued by foreign 
class societies. The Coast Guard agrees that the ACP allows foreign 
classification societies to apply for recognition and authorization to 
perform delegated functions under part 8. However, the Coast Guard 
retains the authority to issue COIs.
    One comment recommended a change in the term ``serviced'' in 
Sec. 8.230(a)(17). The Coast Guard agrees and has clarified the 
language. The change will ensure that vessels on which a delegated 
function has been performed comply with all statutory requirements 
related to the delegation functions.
    Three comments encouraged user fee reduction. The Coast Guard 
agrees that participation in ACP may result in lower fees. However, the 
purpose of this rulemaking is not to make changes to user fees. There 
are no changes made to this rule in response to this comment.
    Two comments concerned supplements. One pointed out the necessity 
of the supplement. The other encouraged that the supplement be 
simplified and used to lead to harmonization with industry standards. 
The Coast Guard agrees with the spirit of these comments. In general, a 
supplement for the ACP contains cites from four sources:
    <bullet> Statutory Requirements,
    <bullet> SOLAS Interpretations,
    <bullet> Critical safety issues where the combination of 
classification society rules and international conventions do not 
provide an equivalent level of safety to the CFR, or
    <bullet> Other requirements that apply to all ships (primarily 
navigation safety and pollution prevention).
    Because all classification society rules are not identical in 
scope, the supplement is needed. The Coast Guard is actively pursuing 
harmonized international interpretations to SOLAS. Where the 
combination of classification society rules and international 
conventions do not provide an equivalent level of safety, the Coast 
Guard intends to pursue these items individually with the 
classification society or through amendment of the international 
convention as appropriate. Ideally, these Coast Guard efforts may 
result in an equivalent level of safety and remove the need for 
additions to classification society rules. In addition, the Coast Guard 
has pursued harmonization with industry standards and will continue to 
seek additional opportunities to do so. There are no changes as a 
result of these comments.
    One comment encouraged the Coast Guard to accept foreign class 
standards without rigid adherence to U.S. regulations. The Coast Guard 
agrees that an individual regulation, considered in

[[Page 67530]]

isolation, may not always be the best or most suitable standard for a 
particular vessel. However, the Coast Guard considers the Code of 
Federal Regulations (CFR) to represent a comprehensive set of standards 
for commercial vessel safety. The Coast Guard has worked extensively 
with the U.S. maritime industry in the application of standards other 
than those specifically prescribed in the CFR, and has allowed use of 
equivalent standards in many cases. The Coast Guard will ensure that a 
double standard does not develop between vessels that participate in 
ACP and those that do not. ACP standards will remain equivalent in 
scope and result in no reduction in safety. There is no change made as 
a result of this comment.
    Two comments addressed reporting requirements for port-state 
control violations. One comment recommended a change in the term 
``ensure'' in Sec. 8.230 paragraphs (a)(16) and (a)(17). The comment 
contends that no classification society has the power to ensure 
compliance. Compliance is dependent on factors outside of the control 
of the classification societies. The Coast Guard agrees and will modify 
the text to more accurately reflect this condition.
    One comment recommended that Oil Spill Recovery Vessels (OSRVs) be 
included in ACP with appropriate modification to corresponding 
regulations for this vessel type. The absence of specific regulations 
for OSRVs precludes their inclusion in the ACP at this time. The Coast 
Guard will consider participation of OSRVs after determining what 
regulations apply to them.
    One comment encouraged classification society fee restraints for 
vessels participating in the ACP. While the intent of this rulemaking 
is to reduce the cost associated with dual inspection, the Coast Guard 
will not be involved with the establishment of classification society 
fees for services related to the ACP program. The ACP is a voluntary 
program and traditional Coast Guard inspection remains available to 
U.S. flag vessels that require Coast Guard certification.
    One comment expressed concern about the ACP being used to bring 
more vessels under ABS class. The Coast Guard disagrees. Initially, the 
ACP was developed with ABS based on the extensive experience that the 
Coast Guard has with delegation of certification functions to ABS. 
Until the passage of the Coast Guard Authorization Act of 1996 (Pub. L. 
104-324), delegation of this nature was restricted by law to U.S. 
classification societies. The ACP is now available to foreign based 
classification societies as well. There is no change made as a result 
of this comment.
    One comment questioned how appeals will be handled. There are two 
different levels of appeals. In the first level, a vessel owner, 
operator, or builder may desire to appeal the decision of an ACP 
authorized classification society or the Coast Guard. This procedure is 
defined in Coast Guard policy guidance and is published as Navigation 
and Vessel Inspection Circular (NVIC) No. 2-95, Change 1. On another 
level, a classification society may wish to appeal the decision of the 
Coast Guard with respect to its application for recognition. There was 
no appeal provision in the Interim Rule for this condition. In response 
to this comment, the Coast Guard has added a provision for a 
classification society to appeal the decision of the Coast Guard in 
Sec. 8.420, related to the recognition application.
    One comment recommended that the criteria for recognition be 
modified to be performance based. The comment suggested dropping the 
size and age criteria and the use of the term ``adequate'' within the 
list. The Coast Guard agrees in part. Performance is important. 
However, other criteria required by the rule indicate characteristics 
of the classification society that the Coast Guard determines to be 
necessary to assess quality prior to recognition. Considering the 
importance of the delegated work, no change is made in response to this 
comment.

Incorporation by Reference

    The Director of the Federal Register has approved the material in 
Sec. 8.110 for incorporation by reference under 5 U.S.C. 552 and 1 CFR 
part 51. Copies of the material are available from the sources listed 
in that section.

Regulatory Evaluation

    This 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. It is not significant under the regulatory policies and 
procedures of the Department of Transportation (DOT) (44 FR 11040; 
February 26, 1979).
    The Coast Guard expects the economic impact of this rule to be so 
minimal that a full Regulatory Evaluation under paragraph 10e of the 
regulatory policies and procedures of DOT is unnecessary.
    The Coast Guard expects this rule to provide an economic benefit to 
the owners and operators of U.S. flagged vessels. Currently, 549 U.S. 
vessels may be eligible to participate in this optional ACP. The Coast 
Guard estimates that while a vessel owner may have to pay an additional 
$5,000 in classification society fees for functions presently performed 
by the Coast Guard, the savings in design, construction and operating 
costs will recover this expense many times over during the lifetime of 
the vessel. Moreover, ships built and maintained to SOLAS, MARPOL 73/
78, recognized classification society rules and accepted U.S. 
supplement are expected to experience greater competitiveness in the 
worldwide shipping market.
    Additionally, streamlining the certification process will reduce 
time frames for Coast Guard involvement in the COI process from an 
average of over 50 hours to 10 hours or less. Because the vessel is 
already inspected by the classification society, this program will 
reduce duplication of effort, decrease vessel ``down time'' and permit 
greater scheduling flexibility. Lower construction and operating costs, 
greater flexibility for the vessel in the global market and additional 
availability for vessel hire will offset the costs incurred through the 
alternate plan review and inspection process utilizing a recognized 
classification society. The Coast Guard specifically solicits comments 
on potential costs, savings and benefits.
    The Coast Guard expects no impact to the regulatory assessment as a 
result of changes to this rulemaking.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the 
Coast Guard considered whether this rule will have a significant 
economic impact on a substantial number of small entities. ``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.
    This rule change provides an alternative to complying with existing 
regulations. The Coast Guard determined this rulemaking will have a 
positive economic impact if the owner chooses to participate in the 
ACP. Because of the current structure of the industry, it is not 
expected that any small businesses will be affected by the rule. 
However, under Section 601 of the Regulatory Flexibility Act, the Coast 
Guard has provided a flexible approach which could benefit any small

[[Page 67531]]

businesses which choose to enter this industry. This rulemaking will 
have no impact on vessel owners who do not choose to participate in 
this program. Therefore, the Coast Guard certifies 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

    In accordance with section 213(a) of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard 
offers to assist small entities in understanding the rule so that they 
may better evaluate its effects on them and participate in the 
rulemaking process. Assistance with provisions of this final rule can 
be obtained by contacting Commandant (G-MSE), Office of Design and 
Engineering Standards, 2100 Second Street, SW., Washington, DC 20593-
0001, telephone 202-267-2997.

Collection of Information

    This final rule provides for a collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Vessel 
inspection reports are needed to document the compliance of a vessel 
with recognized classification society rules, the accepted U.S. 
supplement to rules, and applicable international maritime safety and 
marine environmental conventions. Classification societies recognized 
to participate in this program will submit copies of reports they 
routinely prepare to the Coast Guard.
    As required by 5 U.S.C. 3507(d), the Coast Guard submitted a copy 
of this rule to the Office of Management and Budget (OMB) for its 
review of the collection of information. OMB has approved the 
collection. The section numbers are: Secs. 31.01-3, 71.15-5, 91.15-5, 
and 107.205, and the corresponding approval number from OMB is OMB 
Control Number 2115-0626, which expires on June 30, 1999.
    Persons are not required to respond to a collection of information 
unless it displays a currently valid OMB control number.

Federalism

    The Coast Guard has analyzed this rule under the principles and 
criteria contained in Executive Order 12612 and has determined that 
this rule does not have sufficient federalism implications to warrant a 
Federalism Assessment.
    The authority to regulate safety requirements of U.S. vessels is 
committed to the Coast Guard by statute. Furthermore, since these 
vessels tend to move from port to port in the national market place, 
these safety requirements need to be national in scope to avoid 
numerous, unreasonable and burdensome variances. Therefore, this action 
will preempt State action addressing the same matter.

Federal Preemption

    Historically, the Coast Guard has inspected vessels for their 
compliance with Federal regulations that address the safety of a vessel 
and protection of the marine environment. These regulations establish 
design, construction, equipment, manning and other inspection standards 
that are part of international conventions to which the U.S. is a party 
as well as other inspection standards that assure the safety of a 
vessel participating in this alternative inspection program. The 
certificate of inspection issued to a vessel by the Coast Guard as a 
result of this inspection program indicates that the vessel is safe for 
the service in which it is engaged. It is the Coast Guard's opinion 
that the Supremacy Clause of the Constitution would preempt state and 
local regulations that seek to impose different or higher standards 
governing the inspection of a U.S. vessel as established in these 
regulations.

Environment

    The Coast Guard considered the environmental impact of this rule 
and concluded that under paragraph 2.B.2 of Commandant Instruction 
M16475.1B, this rule is categorically excluded from further 
environmental documentation. This rule is excluded based on its 
inspection and equipment aspects. A Categorical Exclusion Determination 
is available in the docket for inspection or copying where indicated 
under ADDRESSES.
    Since the combination of classification society rules, applicable 
international conventions and the U.S. supplement to the rules have 
been determined to provide a level of safety equivalent to current 
Coast Guard regulations, the Coast Guard expects that this rulemaking 
will have no adverse environmental impact.

List of Subjects

33 CFR Part 151

    Administrative practice and procedure, Oil pollution, Penalties, 
Reporting and recordkeeping requirements, Water pollution control.

46 CFR Part 1

    Administrative practice and procedure, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements.

46 CFR Part 8

    Administrative practice and procedure, Incorporation by reference, 
Organization and functions (Government agencies), Reporting and 
recordkeeping requirements.

46 CFR Part 31

    Marine safety, Reporting and recordkeeping requirements, Tank 
vessels.

46 CFR Part 69

    Measurement standards, Penalties, Reporting and recordkeeping 
requirements, Vessels.

46 CFR Part 71

    Marine safety, Passenger vessels, Reporting and recordkeeping 
requirements.

46 CFR Part 91

    Cargo vessels, Marine safety, Reporting and recordkeeping 
requirements.

46 CFR Part 107

    Marine safety, Oil and gas exploration, Reporting and recordkeeping 
requirements, Vessels.

46 CFR Part 153

    Administrative practice and procedure, Cargo vessels, Hazardous 
materials transportation, Marine safety, Reporting and recordkeeping 
requirements, Water pollution control.

46 CFR Part 154

    Cargo vessels, Gases, Hazardous materials transportation, Marine 
safety, Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, under the authority of 46 
U.S.C. 3306, the Coast Guard amends 33 CFR part 151 and 46 CFR parts 1, 
8, 31, 69, 71, 91 107, 153, and 154 as follows:

PART 151--VESSELS CARRYING OIL, NOXIOUS LIQUID SUBSTANCES, GARBAGE, 
MUNICIPAL OR COMMERCIAL WASTE, AND BALLAST WATER

    1. The authority citation for part 151 continues to read as 
follows:

    Authority: 33 U.S.C. 1321(j)(1)(c) and 1903(b); E.O. 12777, 3 
CFR, 1991 Comp. P. 351; 49 CFR 1.46.

    2. Revise Sec. 151.19(c) to read as follows:


Sec. 151.19  International Oil Pollution Prevention (IOPP) 
Certificates.

* * * * *

[[Page 67532]]

    (c) An IOPP Certificate is issued by a COTP, OCMI, or a 
classification society authorized under 46 CFR part 8, after a 
satisfactory survey in accordance with the provisions of Sec. 151.17.
* * * * *


Sec. 151.37  [Amended]

    3. In Sec. 151.37, in paragraphs (a), (b), and (c), remove the 
words ``Coast Guard issues'' and add, in its place, the words ``Coast 
Guard or a classification society authorized under 46 CFR part 8 
issues''.

PART 1--ORGANIZATION, GENERAL COURSE AND METHODS GOVERNING MARINE 
SAFETY FUNCTIONS

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

    Authority: 5 U.S.C. 552; 14 U.S.C. 633; 46 U.S.C. 7701; 49 CFR 
1045, 1.46; Sec. 1.01-35 also issued under the authority of 44 
U.S.C. 3507.

    5. Add Sec. 1.03-15(h)(4) to read as follows:


Sec. 1.03-15  General.

* * * * *
    (h) * * *
    (4) Commandant (G-MSE) for appeals involving the recognition of a 
classification society.
* * * * *
    6. Revise part 8 to read as follows:

PART 8--VESSEL INSPECTION ALTERNATIVES

Subpart A--General

Sec.
8.100  Definitions.
8.110  Incorporation by reference.
8.120  Reciprocity.
8.130  Agreement conditions.

Subpart B--Recognition of a Classification Society

8.200  Purpose.
8.210  Applicability.
8.220  Recognition of a classification society.
8.230  Minimum standards for a recognized classification society.
8.240  Application for recognition.
8.250  Acceptance of standards and functions delegated under 
existing regulations.
8.260  Revocation of classification society recognition.

Subpart C--International Convention Certificate Issuance

8.300  Purpose.
8.310  Applicability.
8.320  Classification society authorization to issue international 
certificates.
8.330  Termination of classification society authority.

Subpart D--Alternate Compliance Program

8.400  Purpose.
8.410  Applicability.
8.420  Classification society authorization to participate in the 
Alternate Compliance Program.
8.430  U.S. Supplement to class rules.
8.440  Vessel enrollment in the Alternate Compliance Program.
8.450  Termination of classification society authority.
    Authority: 46 U.S.C. 3306; 46 U.S.C. 3316, as amended by Sec. 
607, Pub. L. 104-324, 110 Stat. 3901; 46 U.S.C. 3703; 49 CFR 1.45, 
1.46.

Subpart A--General


Sec. 8.100  Definitions.

    Authorized Classification Society means a recognized classification 
society that has been delegated the authority to conduct certain 
functions and certifications on behalf of the Coast Guard.
    Class Rules means the standards developed and published by a 
classification society regarding the design, construction and 
certification of commercial vessels.
    Classed means that a vessel meets the classification society 
requirements that embody the technical rules, regulations, standards, 
guidelines and associated surveys and inspections covering the design, 
construction and through-life compliance of a ship's structure and 
essential engineering and electrical systems.
    Commandant means the Commandant of the Coast Guard.
    Delegated Function means a function related to Coast Guard 
commercial vessel inspection which has been delegated to a 
classification society. Delegated functions may include issuance of 
international convention certificates and participation in the 
Alternate Compliance Program under this part.
    Delegated Function Related to General Vessel Safety Assessment 
means issuance of the SOLAS Cargo Ship Safety Construction Certificate 
or issuance of the SOLAS Cargo Ship Safety Equipment Certificate.
    Exclusive Surveyor means a person who is employed solely by a 
classification society and is authorized to conduct vessel surveys. 
Independent surveyors, hired on a case-by-case basis, or surveyors of 
another classification society are not considered exclusive surveyors 
for the performance of delegated functions on behalf of the Coast 
Guard.
    Gross Tons means vessel tonnage measured in accordance with the 
International Convention on Tonnage Measurement of Ships, 1969. Vessels 
not measured by this convention must be measured in accordance with the 
method utilized by the flag state administration of that vessel.
    MARPOL 73/78 means the Protocol of 1978 relating to the 
International Convention for the Prevention of Pollution from Ships, 
1973, and includes the Convention which means the International 
Convention for the Prevention of Pollution from Ships, 1973, including 
Protocols I and II and Annexes I, II, and V thereto, including any 
modification or amendments to the Convention, Protocols or Annexes 
which have entered into force for the United States.
    Officer in Charge, Marine Inspection (OCMI) means any person from 
the civilian or military branch of the Coast Guard designated as such 
by the Commandant and who, under the superintendence and direction of a 
Coast Guard District Commander, is in charge of an inspection zone for 
the performance of duties with respect to the inspection, enforcement, 
and administration of 46 U.S.C., Revised Statutes, and acts amendatory 
thereof or supplemental thereto, and rules and regulations thereunder.
    Recognized Classification Society means the American Bureau of 
Shipping or other classification society recognized by the Commandant 
under this part.
    SOLAS means International Convention for the Safety of Life at Sea, 
1974, as amended.


Sec. 8.110  Incorporation by reference.

    (a) Certain material is incorporated by reference into this 
subchapter with the approval of the Director of the Federal Register 
under 5 U.S.C. 552(a) and 1 CFR Part 51. To enforce any edition other 
than that specified in paragraph (b) of this section, the Coast Guard 
must publish notice of the change in the Federal Register and the 
material must be available to the public. All material is available for 
inspection at the Office of the Federal Register, 800 North Capitol 
St., NW., Suite 700, Washington, DC and at the U.S. Coast Guard, Office 
of Design and Engineering Standards, 2100 Second St., SW., Washington, 
DC 20593-0001, and is available from the sources listed in paragraph 
(b).
    (b) The material incorporated by reference in this subchapter and 
the sections affected are as follows:
    American Bureau of Shipping (ABS)--Two World Trade Center, 106th 
Floor, New York, NY 10048.

Rules for Building and Classing Steel Vessels, 1996--31.01-3(b), 71.15-
5(b), 91.15-5(b)
U.S. Supplement to ABS Rules for Steel Vessels for Vessels on 
International

[[Page 67533]]

Voyages, 21 October 1996--31.01-3(b), 71.15-5(b), 91.15-5(b)

    American National Standards Institute (ANSI)--11 West 42nd St., New 
York, NY 10036.

ANSI/ASQC Q9001-1994, Quality Systems--Model for Quality Assurance in 
Design, Development, Production, Installation, and Servicing, 1994--
8.230


Sec. 8.120  Reciprocity.

    (a) The Commandant may delegate authority to a classification 
society that has its headquarters in a country other than the United 
States only to the extent that the flag state administration of that 
country delegates authority and provides access to the American Bureau 
of Shipping to inspect, certify and provide related services to vessels 
flagged by that country. The Commandant will determine reciprocity on a 
``case-by-case'' basis.
    (b) In order to demonstrate that the conditions described in 
paragraph (a) of this section are satisfied, a classification society 
must provide to the Coast Guard an affidavit, from the government of 
the country that the classification society is headquartered in, 
listing the authorities delegated by the flag state administration of 
that country to the American Bureau of Shipping, and indicating any 
conditions related to the delegated authority.
    (c) The Commandant will not consider an application for 
authorization to perform a delegated function submitted under this part 
until the conditions described in paragraph (a) of this section are 
satisfied. Where simultaneous authorization by a foreign government for 
ABS is involved, this requirement may be waived.
    (d) The Commandant will not evaluate a classification society for 
recognition until the conditions described in paragraph (a) of this 
section are satisfied for at least one of the authorized delegations 
being sought. Where simultaneous recognition by a foreign government 
for ABS is involved, this requirement may be waived.
    (e) The Commandant may make a delegation regarding load lines under 
46 U.S.C. 5107 or measurement of vessels under 46 U.S.C. 14103 without 
regard to the conditions described in paragraph (a) of this section.


Sec. 8.130  Agreement conditions.

    (a) Delegated functions performed by, and statutory certificates 
issued by, an authorized classification society will be accepted as 
functions performed by, or certificates issued by, the Coast Guard, 
provided that the classification society maintains compliance with all 
provisions of its agreement with the Commandant. Any agreement between 
the Commandant and a recognized classification society authorizing the 
performance of delegated functions will be written and will require the 
classification society to comply with each of the following:
    (1) Issue any certificates related to a delegated function in the 
English language.
    (2) Maintain a corporate office in the United States that has 
adequate resources and staff to support all delegated functions and to 
maintain required associated records.
    (3) Maintain all records in the United States related to delegated 
functions conducted on behalf of the Coast Guard.
    (4) Make available to appropriate Coast Guard representatives 
vessel status information and records, including outstanding vessel 
deficiencies or classification society recommendations, in the English 
language, on all vessels for which the classification society has 
performed any delegated function on behalf of the Coast Guard.
    (5) Report to the Commandant (G-MOC) the names and official numbers 
of any vessels removed from class for which the classification society 
has performed any delegated function on behalf of the Coast Guard and 
include a description of the reason for the removal.
    (6) Report to the Commandant (G-MOC) all port state detentions on 
all vessels for which the classification society has performed any 
delegated function on behalf of the Coast Guard when aware of such 
detention.
    (7) Annually provide the Commandant (G-MOC) with its register of 
classed vessels.
    (8) Ensure vessels meet all requirements for class of the accepting 
classification society prior to accepting vessels transferred from 
another classification society.
    (9) Suspend class for vessels that are overdue for special renewal 
or annual survey.
    (10) Attend any vessel for which the classification society has 
performed any delegated function on behalf of the Coast Guard at the 
request of the appropriate Coast Guard officials, without regard to the 
vessel's location-- unless prohibited to do so under the laws of the 
United States, the laws of the jurisdiction in which the vessel is 
located, the classification society's home country domestic law, or 
where the classification society considers an unacceptable hazard to 
life and/or property exists.
    (11) Honor appeal decisions made by the Commandant (G-MSE) or 
Commandant (G-MOC) on issues related to delegated functions.
    (12) Apply U.S. flag administration interpretations, when they 
exist, to international conventions for which the classification 
society has been delegated authority to certificate or perform other 
functions on behalf of the Coast Guard.
    (13) Obtain approval from the Commandant (G-MOC) prior to granting 
exemptions from the requirements of international conventions, class 
rules, and the U.S. supplement to class rules.
    (14) Make available to the Coast Guard all records, in the English 
language, related to equivalency determinations or approvals made in 
the course of delegated functions conducted on behalf of the Coast 
Guard.
    (15) Report to the Coast Guard all information specified in the 
agreement at the specified frequency and to the specified Coast Guard 
office or official.
    (16) Grant the Coast Guard access to all plans and documents, 
including reports on surveys, on the basis of which certificates are 
issued or endorsed by the classification society.
    (17) Identify a liaison representative to the Coast Guard.
    (18) Provide regulations, rules, instructions and report forms in 
the English language.
    (19) Allow the Commandant (G-M) to participate in the development 
of class rules.
    (20) Inform the Commandant (G-M) of all proposed changes to class 
rules.
    (21) Provide the Commandant (G-M) the opportunity to comment on any 
proposed changes to class rules and to respond to the classification 
society's disposition of the comments made by the Coast Guard.
    (22) Furnish information and required access to the Coast Guard to 
conduct oversight of the classification society's activities related to 
delegated functions conducted on behalf of the Coast Guard.
    (23) Allow the Coast Guard to accompany them on internal and 
external quality audits and provide written results of such audits to 
appropriate Coast Guard representatives.
    (24) Provide the Coast Guard access necessary to audit the 
authorized classification society to ensure that it continues to comply 
with the minimum standards for a recognized classification society.
    (25) Use only exclusive surveyors of that classification society to 
accomplish all work done on behalf of, or under any delegation from, 
the Coast Guard. For tonnage-related measurement service only, however, 
classification societies

[[Page 67534]]

may use part-time employees or independent contractors in place of 
exclusive surveyors.
    (26) Allow its surveyors to participate in training with the Coast 
Guard regarding delegated functions.
    (b) Amendments to an agreement between the Coast Guard and an 
authorized classification society will become effective only after 
consultation and written agreement between parties.
    (c) Agreements may be terminated by one party only upon written 
notice to the other party. Termination will occur sixty days after 
written notice is given.

Subpart B--Recognition of a Classification Society


Sec. 8.200  Purpose.

    This subpart establishes criteria and procedures for vessel 
classification societies to obtain recognition from the Coast Guard. 
This recognition is necessary in order for a classification society to 
become authorized to perform vessel inspection and certification 
functions delegated by the Coast Guard as described in this part.


Sec. 8.210  Applicability.

    This subpart applies to all vessel classification societies seeking 
recognition by the Coast Guard.


Sec. 8.220  Recognition of a classification society.

    (a) A classification society must be recognized by the Commandant 
before it may receive statutory authority delegated by the Coast Guard.
    (b) In order to become recognized, a classification society must 
meet the requirements of Sec. 8.230.
    (c) A classification society found to meet the criteria for 
recognition will be notified in writing by the Commandant.
    (d) If the Coast Guard determines that a classification society 
does not meet the criteria for recognition, the Coast Guard will 
provide the reason for this determination.
    (e) A classification society may reapply for recognition upon 
correction of the deficiencies identified by the Coast Guard.


Sec. 8.230  Minimum standards for a recognized classification society.

    (a) In order to receive recognition by the Coast Guard a 
classification society must:
    (1) Establish that it has functioned as an international 
classification society for at least 30 years with its own class rules;
    (2) Establish that is has a history of appropriate corrective 
actions in addressing vessel casualties and cases of nonconformity with 
class rules;
    (3) Establish that it has a history of appropriate changes to class 
rules based on their application and the overall performance of its 
classed fleet;
    (4) Have a total classed tonnage of at least 10 million gross tons;
    (5) Have a classed fleet of at least 1,500 ocean-going vessels over 
100 gross tons;
    (6) Have a total classed tonnage of ocean-going vessels over 100 
gross tons totaling no less than 8 million gross tons;
    (7) Publish and maintain class rules in the English language for 
the design, construction and certification of ships and their 
associated essential engineering systems;
    (8) Maintain written survey procedures in the English language;
    (9) Have adequate resources, including research, technical, and 
managerial staff, to ensure appropriate updating and maintaining of 
class rules and procedures;
    (10) Have adequate resources and geographical coverage to carry out 
all plan review and vessel survey activities associated with delegated 
functions as well as classification society requirements;
    (11) Employ a minimum of 150 exclusive surveyors;
    (12) Have adequate criteria for hiring and qualifying surveyors and 
technical staff;
    (13) Have an adequate program for continued training of surveyors 
and technical staff;
    (14) Have a corporate office in the United States that provides a 
continuous management and administrative presence;
    (15) Maintain an internal quality system based on ANSI/ASQC Q9001 
or an equivalent quality standard;
    (16) Determine classed vessels comply with class rules, during 
appropriate surveys and inspection;
    (17) Determine that attended vessels comply with all statutory 
requirements related to delegated functions, during appropriate surveys 
and inspection;
    (18) Monitor all activities related to delegated functions for 
consistency and required end-results;
    (19) Maintain and ensure compliance with a Code of Ethics that 
recognizes the inherent responsibility associated with delegation of 
authority;
    (20) Not be under the financial control of shipowners or 
shipbuilders, or of others engaged commercially in the manufacture, 
equipping, repair or operation of ships;
    (21) Not be financially dependent on a single commercial enterprise 
for its revenue;
    (22) Not have any business interest in, or share of ownership of, 
any vessel in its classed fleet; and
    (23) Not be involved in any activities which could result in a 
conflict of interest.
    (b) Recognition may be granted after it is established that the 
classification society has an acceptable record of vessel detentions 
attributed to classification society performance under the Coast Guard 
Port State Control Program.


Sec. 8.240  Application for recognition.

    (a) A classification society must apply for recognition in writing 
to the Commandant (G-MSE).
    (b) An application must indicate which specific authority the 
classification society seeks to have delegated.
    (c) Upon verification from the Coast Guard that the conditions of 
reciprocity have been met in accordance with Sec. 8.120, the requesting 
classification society must submit documentation to establish that it 
meets the requirements of Sec. 8.230.


Sec. 8.250  Acceptance of standards and functions delegated under 
existing regulations.

    (a) Classification society class rules will only be accepted as 
equivalent to Coast Guard regulatory standards when that classification 
society has received authorization to conduct a related delegated 
function.
    (b) A recognized classification society may not conduct any 
delegated function under this title until it receives a separate 
written authorization from the Commandant to conduct that specific 
function.


Sec. 8.260  Revocation of classification society recognition.

    A recognized classification society which fails to maintain the 
minimum standards established in this part will be reevaluated and its 
recognized status revoked if warranted.

Subpart C--International Convention Certificate Issuance


Sec. 8.300  Purpose.

    This subpart establishes options for vessel owners and operators to 
obtain required international convention certification through means 
other than those prescribed elsewhere in this chapter.


Sec. 8.310  Applicability.

    This subpart applies to:
    (a) Recognized classification societies; and
    (b) All U.S. flag vessels that are certificated for international 
voyages

[[Page 67535]]

and are classed by a recognized classification society that is 
authorized by the Coast Guard to issue the applicable international 
certificate as specified in this subpart.


Sec. 8.320  Classification society authorization to issue international 
certificates.

    (a) The Commandant may authorize a recognized classification 
society to issue certain international convention certificates. 
Authorization will be based on review of:
    (1) Applicable class rules; and
    (2) Applicable classification society procedures.
    (b) The Coast Guard may delegate issuance of the following 
international convention certificates to a recognized classification 
society:
    (1) International Load Line Certificate;
    (2) International Tonnage Certificate (1969);
    (3) SOLAS Cargo Ship Safety Construction Certificate;
    (4) SOLAS Cargo Ship Safety Equipment Certificate;
    (5) International Certificate of Fitness for the Carriage of 
Dangerous Chemicals in Bulk;
    (6) International Certificate of Fitness for the Carriage of 
Liquefied Gases in Bulk;
    (7) International Maritime Organization (IMO) Mobile Offshore 
Drilling Unit Safety Certificate;
    (8) MARPOL 73/78 International Oil Pollution Prevention 
Certificate; and
    (9) MARPOL 73/78 International Oil Pollution Prevention Certificate 
for the Carriage of Noxious Liquid Substances in Bulk.
    (c) The Coast Guard will enter into a written agreement with a 
recognized classification society authorized to issue international 
convention certificates. This agreement will define the scope, terms, 
conditions and requirements of that delegation. Conditions of these 
agreements are presented in Sec. 8.130.


Sec. 8.330  Termination of classification society authority.

    (a) The Coast Guard may terminate an authorization agreement with a 
classification society if:
    (1) The Commandant revokes the classification society's 
recognition, as specified in Sec. 8.260; or
    (2) The classification society fails to comply with the conditions 
of the authorization agreement as specified in Sec. 8.130.
    (b) In the event that a flag administration of a country changes 
conditions related to the authority that is delegated to ABS, the 
Commandant may modify or revoke the Coast Guard's authorization of that 
classification society that has its headquarters in that country.
    (c) Certificates issued by a classification society which has had 
its authorization terminated will remain valid until the next 
classification society survey associated with that certificate is 
required or until the certificate expires, whichever occurs first.

Subpart D--Alternate Compliance Program


Sec. 8.400  Purpose.

    This subpart establishes an alternative to subpart 2.01 of this 
chapter for certification of United States vessels.


Sec. 8.410  Applicability.

    This subpart applies to:
    (a) Recognized classification societies; and
    (b) U.S. flag vessels that are certificated for international 
voyages and are classed by a recognized classification society that is 
authorized by the Coast Guard to participate in the Alternate 
Compliance Program (ACP) as specified in this subpart and whose vessel 
type is authorized to participate in the ACP per the applicable 
subchapter of 46 CFR chapter I.


Sec. 8.420  Classification society authorization to participate in the 
Alternate Compliance Program.

    (a) The Commandant may authorize a recognized classification 
society to participate in the ACP. Authorization will be based on a 
satisfactory review of:
    (1) Applicable class rules; and
    (2) Applicable classification society procedures.
    (b) Authorization for a recognized classification society to 
participate in the ACP will require development of a U.S. Supplement to 
the society's class rules that meets the requirements of Sec. 8.430 of 
this part, which must be accepted by the Coast Guard.
    (c) A recognized classification society will be eligible to receive 
authorization to participate in the ACP only after it has performed a 
delegated function related to general vessel safety assessment, as 
defined in Sec. 8.100, for a two-year period.
    (d) If, after this two-year period, the Coast Guard finds that the 
recognized classification society has not demonstrated the necessary 
satisfactory performance or lacks adequate experience, the recognized 
classification society will not be eligible to participate in the ACP. 
The Coast Guard will provide the reason for this determination to the 
recognized classification society. A classification society may appeal 
the decision of the Coast Guard concerning recognition to the 
Commandant in writing in accordance with 46 CFR 1.03-15(h)(4).
    (e) The Coast Guard will enter into a written agreement with a 
recognized classification society authorized to participate in the ACP. 
This agreement will define the scope, terms, conditions and 
requirements of the necessary delegation. Conditions of this agreement 
are presented in Sec. 8.130.


Sec. 8.430  U.S. Supplement to class rules.

    Prior to receiving authorization to participate in the ACP, a 
recognized classification society must prepare, and receive Commandant 
(G-MSE) approval of, a U.S. Supplement to the recognized classification 
society's class rules. This supplement must include all regulations 
applicable for issuance of a Certificate of Inspection (COI) which are 
not, in the opinion of the Commandant, adequately established by either 
the class rules of that classification society or applicable 
international regulations.


Sec. 8.440  Vessel enrollment in the Alternate Compliance Program.

    (a) In place of compliance with other applicable provisions of this 
title, the owner or operator of a vessel subject to plan review and 
inspection under this subchapter for initial issuance or renewal of a 
COI may submit the vessel for classification, plan review and 
inspection by a recognized classification society authorized by the 
Coast Guard to determine compliance with applicable international 
treaties and agreements, the classification society's class rules, and 
the U.S. Supplement prepared by the classification society and accepted 
by the Coast Guard.
    (b) A vessel owner or operator wishing to have a vessel inspected 
under paragraph (a) of this section shall submit an Application for 
Inspection of U.S. Vessel (CG-3752) to the cognizant OCMI, and indicate 
on the form that the inspection will be conducted by an authorized 
classification society under the ACP.
    (c) Based on reports from an authorized classification society that 
a vessel complies with applicable international treaties and 
agreements, the classification society's class rules, and the U.S. 
Supplement prepared by the classification society and accepted by the 
Coast Guard, the cognizant OCMI may issue a certificate of inspection 
to the vessel. If the OCMI declines to issue a certificate of 
inspection even though the reports made by the authorized 
classification society indicate that the vessel meets applicable 
standards, the vessel owner or operator may appeal the OCMI decision as 
provided in subpart 1.03 of this chapter.

[[Page 67536]]

    (d) If reports from an authorized classification society indicate 
that a vessel does not comply with applicable international treaties 
and agreements, the classification society's class rules, and the U.S. 
Supplement prepared by the classification society and accepted by the 
Coast Guard, the cognizant OCMI may decline to issue a certificate of 
inspection. If the OCMI declines to issue a certificate of inspection, 
the vessel owner or operator may:
    (1) Correct the reported deficiencies and make arrangements with 
the classification society for an additional inspection;
    (2) Request inspection by the Coast Guard under other provisions of 
this subchapter; or
    (3) Appeal via the authorized classification society to the Chief, 
Office of Compliance, Commandant (G-MOC), U.S. Coast Guard, 2100 Second 
St. SW., Washington, DC 20593-0001.


Sec. 8.450  Termination of classification society authority.

    (a) The Coast Guard may terminate an authorization agreement with a 
classification society to participate in the Alternate Compliance 
Program if:
    (1) The Commandant revokes the classification society's 
recognition, as specified in Sec. 8.260; or
    (2) The classification society fails to comply with the conditions 
of the authorization agreement as specified in Sec. 8.130.
    (b) In the event that a flag administration of a country changes 
conditions related to the authority that is delegated to ABS, the 
Commandant may modify or revoke the Coast Guard's authorization of that 
classification society that has its headquarters in that country.
    (c) Certificates issued by a classification society which has had 
its authorization to participate in the Alternate Compliance Program 
terminated will be subject to the provisions of Sec. 8.330.
    (d) Owners or operators of vessels enrolled in the ACP and classed 
by a classification society that has its authority to participate in 
the ACP terminated must:
    (1) Change the classification society for the vessel to a 
classification society that is authorized to participate in the ACP; or
    (2) Disenroll the vessel from the ACP.
    (e) The Coast Guard will provide guidance to a vessel owner 
affected by the revocation of a classification society's authority to 
participate in the ACP. This will include notification of when the 
action required under paragraph (d) of this section must be completed.

PART 31--INSPECTION AND CERTIFICATION

    7. The authority citation for part 31 continues to read as follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 3306; 46 U.S.C. 3316, as 
amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; 46 U.S.C. 
3703, 5115, 8105; 49 U.S.C. App. 1804; E.O. 12234, 45 FR 58801, 3 
CFR, 1980 Comp., p. 277; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 
Comp., p. 793; 49 CFR 1.46.

    8. Revise Sec. 31.01-3 to read as follows:


Sec. 31.01-3  Alternate compliance.

    (a) In place of compliance with other applicable provisions of this 
subchapter, the owner or operator of a vessel subject to plan review 
and inspection under this subchapter for initial issuance or renewal of 
a Certificate of Inspection may comply with the Alternate Compliance 
Program provisions of part 8 of this chapter.
    (b) For the purposes of this section, a list of authorized 
classification societies is available from Commandant (G-MSE). Approved 
classification society rules and supplements are contained in 46 CFR 
Sec. 8.110(b).

PART 69--MEASUREMENT OF VESSELS

    9. The authority citation for part 69 continues to read as follows:

    Authority: 46 U.S.C. 2301, 14103; 49 CFR 1.46.

    10. Amend Sec. 69.27 by redesignating paragraphs (b)(3), (b)(4) and 
(b)(5) as paragraphs (b)(4), (b)(5), and (b)(6), respectively and by 
adding a new paragraph (b)(3) to read as follows:


Sec. 69.27  Delegation of authority to measure vessels.

* * * * *
    (b) * * *
    (3) In lieu of the requirements in paragraphs (b)(1) and (2) of 
this section, is a recognized classification society under the 
requirements of 46 CFR part 8.
* * * * *

PART 71--INSPECTION AND CERTIFICATION

    11. The authority citation for part 71 continues to read as 
follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2113, 3306; 46 U.S.C. 
3316, as amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; E.O. 
12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 
54757, 3 CFR 1991 Comp., p. 351; 49 CFR 1.46.

    12. Revise Sec. 71.15-5 to read as follows:


Sec. 71.15-5  Alternate compliance.

    (a) In place of compliance with other applicable provisions of this 
subchapter, the owner or operator of a vessel subject to plan review 
and inspection under this subchapter for initial issuance or renewal of 
a Certificate of Inspection may comply with the Alternate Compliance 
Program provisions of part 8 of this chapter.
    (b) For the purposes of this section, a list of authorized 
classification societies is available from Commandant (G-MSE). Approved 
classification society rules and supplements are contained in 46 CFR 
8.110(b).

PART 91--INSPECTION AND CERTIFICATION

    13. The authority citation for part 91 continues to read as 
follows:

    Authority: 33 U.S.C. 1321(j); 46 U.S.C. 3306; 46 U.S.C. 3316, as 
amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; E.O. 12234, 45 
FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 11735, 38 FR 21243, 3 CFR, 
1971-1975 Comp., p. 793; 49 CFR 1.46.

    14. Revise Sec. 91.15-5 to read as follows:


Sec. 91.15-5  Alternate compliance.

    (a) In place of compliance with other applicable provisions of this 
subchapter, the owner or operator of a vessel subject to plan review 
and inspection under this subchapter for initial issuance or renewal of 
a Certificate of Inspection may comply with the Alternate Compliance 
Program provisions of part 8 of this chapter.
    (b) For the purposes of this section, a list of authorized 
classification societies is available from Commandant (G-MSE). Approved 
classification society rules and supplements are contained in 46 CFR 
8.110(b).

PART 107--INSPECTION AND CERTIFICATION

    15. The authority citation for part 107 continues to read as 
follows:

    Authority: 43 U.S.C. 1333; 46 U.S.C. 3306; 46 U.S.C. 3316, as 
amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; 46 U.S.C 5115; 
49 CFR 1.45, 1.46; Sec. 107.05 also issued under authority of 44 
U.S.C. 3507.

    16. Revise Sec. 107.205 to read as follows:


Sec. 107.205  Alternate compliance.

    (a) In place of compliance with other applicable provisions of this 
subchapter, the owner or operator of a vessel subject to plan review 
and inspection under this subchapter for initial issuance or renewal of 
a Certificate of Inspection may comply with the Alternate

[[Page 67537]]

Compliance Program provisions of part 8 of this chapter.
    (b) For the purposes of this section, a list of authorized 
classification societies is available from Commandant (G-MSE). Approved 
classification society rules and supplements are contained in 46 CFR 
8.110(b).

PART 153--SHIPS CARRYING BULK LIQUID, LIQUEFIED GAS, OR COMPRESSED 
GAS HAZARDOUS MATERIALS

    17. The authority citation for part 153 continues to read as 
follows:

    Authority: 46 U.S.C. 3703; 49 CFR 1.46. Section 153.40 issued 
under 49 U.S.C. 5103. Sections 153.470 through 153.491, 153.110 
through 153.1132, and 153.1600 through 153.1608 also issued under 33 
U.S.C. 1903(b).

    18. In Sec. 153.12, revise the introductory paragraph to read as 
follows:


Sec. 153.12  IMO certificates for United States ships.

    Either a classification society authorized under 46 CFR part 8, or 
the Officer in Charge, Marine Inspection, issues a United States ship 
an IMO Certificate endorsed to allow the carriage of a hazardous 
material or NLS cargo in Table 1 of this part if the following 
requirements are met:
* * * * *

PART 154--SAFTEY STANDARDS FOR SELF-PROPELLED VESSELS CARRYING BULK 
LIQUEFIED GASES

    19. The authority citation for part 154 continues to read as 
follows:

    Authority: 46 U.S.C. 3703, 9101; 49 CFR 1.46.

    20. Revise Sec. 154.19(a) introductory text to read as follows:


Sec. 154.19  U.S. flag vessel: IMO certificate issuance.

    (a) Either a classification society authorized under 46 CFR part 8, 
or the Coast Guard Officer in Charge, Marine Inspection, issues an IMO 
Certificate to a U.S. flag vessel when requested by the owner or 
representative, if--
* * * * *
    Dated: December 17, 1997.
R. C. North,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety 
and Environmental Protection.
[FR Doc. 97-33477 Filed 12-23-97; 8:45 am]
BILLING CODE 4910-14-U