13550 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 143

46 CFR Part 2

[CGD 91–030]

RIN 2115–AD78

Direct User Fees for Inspection or

Examination of U.S. and Foreign

Commercial Vessels

AGENCY: Coast Guard, DOT.

ACTION: Final rule.

SUMMARY: The Omnibus Budget

Reconciliation Act of 1990 requires the

Coast Guard to establish user fees for

Coast Guard services related to the

inspection and examination of U.S. and

foreign commercial vessels. Fees in this

rule are based on existing vessel

inspection program requirements and

services. The fees are established for the

purpose of recovering costs associated

with providing Coast Guard vessel

inspection services.

EFFECTIVE DATE: This rule is effective on

May 1, 1995.

ADDRESSES: Unless otherwise indicated,

documents referred to 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 8

a.m. and 3 p.m., Monday through

Friday, except Federal holidays. The

telephone number is (202) 267–1477.

For inquiries and payment

information during initial

implementation of the rule, call, tollfree, 1–800–941–3337.

FOR FURTHER INFORMATION CONTACT:

Denise J. Mursch, Planning Staff (G-MP–

2), Office of Marine Safety, Security and

Environmental Protection, (202) 267–

0785.

SUPPLEMENTARY INFORMATION:

Drafting Information

The principal persons involved in

drafting this document are LCDR John J.

Kelly, Project Manager, and LCDR J.K.

Gillespie, Office of Marine Safety,

Security and Environmental Protection,

and C.G. Green, Project Counsel, Office

of Chief Counsel.

Regulatory History

On December 18, 1991, the Coast

Guard published in the Federal Register

(56 FR 65786) a notice of proposed

rulemaking (NPRM) entitled ‘‘Direct

User Fees for Inspection or Examination

of U.S. and Foreign Commercial

Vessels.’’ On December 24, 1991, the

Coast Guard published a correction to

the proposed rule (56 FR 66766). This

correction added Appendix A, a

summary of the preliminary Regulatory

Evaluation, to the NPRM published on

December 18, 1991. The initial public

comment period closed on February 18,

1992.

The Coast Guard received numerous

comments requesting that public

hearings be held in connection with the

vessel inspection user fee rulemaking.

The Coast Guard determined that public

hearings would significantly contribute

to this rulemaking, and published a

Notice in the Federal Register on March

24, 1992 (57 FR 10149) to reopen the

public comment period and announce

the scheduling of nine public hearings.

The nine public hearings were held

between April 13, 1992, and May 1,

1992, at the following locations:

Baltimore, MD; Secaucus, NJ; Boston,

MA; Miami, FL; New Orleans, LA;

Chicago, IL; Seattle, WA; San Francisco,

CA; and San Diego, CA. The public

comment period closed on May 18,

1992.

Background and Purpose

The Omnibus Budget Reconciliation

Act of 1990 (the Act) amended 46 U.S.C.

2110 and removed long-standing

prohibitions against imposing certain

user fees.

As amended by the Act, 46 U.S.C.

2110 now requires the establishment

and collection of user fees for Coast

Guard services provided under Subtitle

II of Title 46, United States Code. The

Coast Guard is developing Subtitle II

user fees in several separate

rulemakings, each of which covers

services provided in an identifiable

program area. On March 19, 1993 (58 FR

15228), the Coast Guard published the

final rule on User Fees for Marine

Licensing, Certification of Registry, and

Merchant Mariner Documentation (CGD

91–002). On November 15, 1993 (58 FR

60256), the Coast Guard published the

final rule on User Fees for

Documentation of Vessels and

Recording of Instruments (CGD 89–007).

In addition to the fees for inspection or

examination of U.S. and foreign

commercial vessels in this rule, the

Coast Guard also plans to establish fees

for services related to Coast Guard

equipment approval and factory

inspections (CGD 92–013); inspections

for the initial Certificate of Inspection

(COI), such as new vessel construction

inspections, inspections of existing

vessels undergoing rebuilding,

reflagging, or major conversion; and for

commercial vessel plan review.

Overview of the Rulemaking

This rule revises 46 CFR Part 2 and

creates user fees for Coast Guard

inspections or examinations of existing

U.S. and foreign commercial vessels as

follows:

For U.S. Vessels

(1) An annual vessel inspection fee

which covers all periodic inspections

and follow-on inspections conducted

during the course of a given year for

commercial vessels required to have a

Coast Guard COI.

(2) An overseas inspection fee for

inspections conducted outside the

United States and its territories, except

for inspections conducted in Canada,

Mexico, and the British Virgin Islands.

For Foreign Vessels

(1) A fee for the biannual Letter of

Compliance (LOC) examination and for

the annual reexamination of tankships

carrying hazardous liquids or liquefied

gases in bulk in U.S. waters;

(2) A fee for the annual examination

of tankships carrying oil in bulk in U.S.

waters;

(3) A fee for the LOC examination of

mobile offshore drilling units (MODUs)

operating on the U.S. outer continental

shelf;

(4) An annual vessel inspection fee for

all vessels required to have a Coast

Guard COI, including Canadian tank

barges and vessels of nations not

signatory to the International

Convention for Safety of Life at Sea

(SOLAS).

(5) An overseas examination fee for

examinations conducted outside the

United States and its territories, except

for examinations conducted in Canada,

Mexico, and the British Virgin Islands.

Vessels Not Covered

This rule does not apply to foreign

passenger vessels, to training vessels

operated by State maritime academies,

or to public vessels of the United States

which are excluded from the provisions

of subtitle II of Title 46 U.S. Code.

Waivers

Collection of vessel inspection fees is

waived for all vessels whose fees would

be paid directly using Federal

appropriated funds.

Exemptions

No exemptions were proposed in the

NPRM; however, the final rule contains

one exemption for charitable, not-forprofit, youth-oriented organizations

which use their vessel(s) exclusively for

training youths in boating, seamanship,

and navigation skills. This exemption is
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13551

discussed more fully in the section of

this document entitled Exemptions.

Fee Limit for Tank Barges

Annual vessel inspection fees

calculated for tank barges in various

service and route categories all

exceeded $500. However, the Act

provides that a user fee for inspection or

examination of a non-self-propelled

tank barge may not exceed $500 per

year. Thus, the Coast Guard set the

annual vessel inspection fee for tank

barges at the statutory limit of $500.

Types of Inspections Covered under this

Rule

Fees established by this rule are based

on Coast Guard costs of providing

inspection and examination services.

These costs include marine inspector

hours, travel time, mileage costs,

administrative support costs, training

costs, and overhead costs. In

establishing these fees, the Coast Guard

reviewed all inspection requirements

contained in 46 CFR part 2, as well as

the technical requirements for

inspections found in 46 CFR parts 31,

71, 91, 105, 107, 108, 109, 151, 167, 175,

176, 189, and 190 and in 33 CFR parts

140, 143, 151, 155, and 157.

Depending on vessel type,

commercial vessels are subject to

periodic inspections at quarterly, 1 year,

1.5 year, 2 year, 2.5 year, 3 year, 5 year

or 10 year inspection intervals.

Typically, Coast Guard marine

inspectors visit each U.S. commercial

vessel a minimum of once each year to

either: Inspect the vessel for reissuance

of the COI; to conduct the annual

reinspection; or to inspect the vessel’s

hull. The amount of time it takes to

conduct any given inspection is often a

function of the type of inspection being

conducted, the specific category of

vessel being inspected, the length and in

some cases the tonnage of the vessel

being inspected, and the maximum

number of passengers the vessel is

authorized to carry under the vessel’s

COI. These three periodic inspections,

namely the inspection for certification,

the reinspection (or mid-period

inspection), and the hull (or drydock)

inspection, generally require the same

amount of inspection time for the

majority of vessels in each vessel

category.

Follow-on inspections ensure that a

vessel remains in compliance with its

COI. The purpose of follow-on

inspections varies from one vessel to the

next. However, these inspections

typically include, but are not limited to,

any of the following four activities:

(a) Certifying that deficiencies noted

during a previous inspection have been

satisfactorily corrected;

(b) Surveying either damaged ship

structures or propulsion systems, or

lifesaving, navigation, or firefighting

equipment which has failed;

(c) Inspecting, testing, or approving

repairs either to damaged ship

structures or propulsion systems, or to

lifesaving, navigation, or firefighting

equipment which has failed; or

(d) Verifying that vessel modifications

or alterations meet regulatory

requirements.

Wide variations exist relative to the

amount of time required to conduct

follow-on inspections, which include,

but are not limited to: Drydock

extension inspections; MARPOL

compliance inspections; inspections to

clear outstanding requirements issued

by a Coast Guard marine inspector on

Coast Guard Form CG–835; damage

surveys; repair inspections; permit to

proceed inspections; and non-credit

drydock inspections. These variations

are attributable to many factors,

including: The degree to which the

vessel is made ready for inspection by

the owner or operator; the knowledge,

training, and experience of shipyard

personnel and the ship’s crew; the

knowledge and training of the marine

inspector; the vessel owner’s or

operator’s management and operating

procedures; the level of coordination

with third party contractors; the nature

and extent of the repairs required; and

the size and extent of any deficiency list

to be inspected or cleared. Generally,

there are no accurate predictors as to the

amount of time each type of follow-on

inspection should take.

Inspection and Examination Fees

For the purposes of this rule, vessels

required to have a COI are inspected,

and foreign vessels not required to have

a COI are examined. Annual vessel

inspection fees are payable each year on

or before the vessel’s user fee

anniversary date and entitle a vessel

owner or operator to all periodic and

follow-on inspection services needed

during the year. All other inspection or

examination-related fees are payable by

the vessel’s owner or operator prior to

the time that the Service is provided.

Vessels of nations which are party to

SOLAS are examined by the Coast

Guard only to the extent necessary to

verify compliance with their own

nation’s inspection laws, the

requirements of various international

treaties, and any additional domestic

regulations which may be imposed by

the United States. This rule does not

establish fees for SOLAS compliance

examinations.

Derivation of the Annual Vessel

Inspection Fee

Depending on the specific vessel

category, COIs are issued for a period of

one, two, or three years. Reinspections

are conducted during the intervening

years, on or about the anniversary date

of the vessel’s COI. Hull inspection

intervals vary from once every twelve

months to once every ten years,

depending on the vessel category and

whether the vessel operates in salt water

or fresh water. Follow-on inspections,

on the other hand, can occur at any

time.

The length of the period for which a

COI is issued is only one factor in the

annual vessel inspection fee calculation.

Using vessel inspection data, the Coast

Guard determined the average amount

of time needed to conduct periodic and

follow-on inspections for vessels in each

vessel category during a twelve month

period. For Coast Guard data capture

purposes, hull inspections also included

internal structural inspections, fuel oil

tank inspections, and tailshaft

inspections, since these inspections

most often coincide or are associated

with the hull inspection.

The annual vessel inspection fee is

based upon an equation which

calculates the average expected value

(in terms of annual inspector hours) of

inspection services provided to each

vessel category during any given year.

The average expected value is the

average number of hours it takes to

conduct a type of inspection multiplied

by the probability of that inspection

taking place during any given year. It

assumes that the average time to

conduct an inspection is representative

for all vessels within a given vessel

category; that the distribution of the

average inspection time about the mean

is normal; and that the average

inspection time has a relatively small

standard deviation. However, while use

of the average expected value worked

well for periodic inspections, it did not

work as well for follow-on inspections,

because the standard deviation for many

follow-on inspections was several times

the mean.

Constructing annual vessel inspection

fees predicated on full recovery of

follow-on inspection costs would have

resulted in shipowners who require less

inspection services subsidizing

shipowners who require significantly

greater inspection services. For this

reason, the Coast Guard proposed to

base charges for follow-on inspections at

50% of cost. Charging only 50% of the

cost associated with conducting follow-
13552 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

on inspections minimized the impact of

the large standard deviations and

reduced the potential for inequities

within vessel categories and

subcategories. No comments on the

NPRM suggested that there was any

disagreement with the proposal. The

annual vessel inspection fees in this

final rule are thus based on the total cost

of conducting periodic inspections and

half of the costs of conducting followon inspections.

The Coast Guard developed its vessel

inspection and examination fees using

information from a workload analysis

study, vessel inspection data contained

in the Coast Guard’s Marine Safety

Information System (MSIS), and costs

associated with conducting vessel

inspection and examination activities by

personnel assigned to Coast Guard

Marine Safety Offices and Coast Guard

Marine Inspection Offices.

Vessel inspection and examination

fees were developed to generate receipts

approximating the total vessel

inspection program costs of providing

those services. Vessel inspection

program costs include the cost of

personnel, local travel costs for

inspectors, a portion of the annual cost

of operating MSIS, and the associated

overhead required to provide Coast

Guard inspection and examination

services (i.e., office space; office

equipment and supplies such as

telephones, computers and copiers;

special training; and other personnelrelated costs). Using information

derived from a workload analysis study,

the hourly standard rates provided in

the Coast Guard Standard Rate

Instruction (COMDTINST 7310.1), and

the Coast Guard Staffing Standards

Manual (COMDTINST M5312.11), the

Coast Guard calculated the total cost of

the vessel inspection program to be

approximately $28.7 million. Of this

amount, an estimated $2.9 million will

be the subject of a separate rule covering

fees for inspections associated with new

vessel construction and for commercial

vessel plan review services.

Based on the workload analysis study

and the total vessel inspection program

cost, the Coast Guard calculated a basic

hourly rate for vessel inspection

services of $87 per qualified inspector

hour. A detailed discussion of the

calculation of this figure is set out in the

Regulatory Evaluation.

Each fee was calculated based upon

the time the Coast Guard would

reasonably expect to spend inspecting

or examining vessels in specific

categories during an average year,

including travel time to and from the

inspection site. All fees were rounded

down to the nearest $5.00 increment.

The costs associated with inspecting the

different types of MODUs were

determined using Coast Guard historical

information, because workload data was

not captured based on the type of

drilling unit.

Consistent with guidance provided by

the Office of Management and Budget

(OMB) Circular A–25, and except where

otherwise mandated by statute, the

Coast Guard’s goal in establishing user

fees for Subtitle II services is full cost

recovery. This rule will recover an

estimated $17.2 million of the $25.8

million annual cost of providing Coast

Guard vessel inspection and

examination services. An estimated $8.6

million in costs will not be recovered by

user fees due to statutory prohibitions or

limitations; lack of statutory authority;

exemptions in the rule from payment of

fees; and administrative reductions

during development of the final fee

schedule. These unrecovered costs are

listed in Appendix E of the Regulatory

Evaluation for this rule.

OMB Circular No. A–25 requires that

all user fees be reviewed periodically to

determine if adjustments or changes to

the fees are necessary. The fees in this

rule will be revised if costs change due

to inflation or deflation; if the Coast

Guard changes the manner in which

inspection or examination services are

provided; or if otherwise deemed

appropriate. Revisions to the fees would

be done through rulemaking.

Optional Prepayment of Annual Vessel

Inspection Fee

The final rule allows a vessel owner

or operator to prepay the annual vessel

inspection fee for any period of not less

than three years and not more than the

design life or expected remaining

service life of the vessel. The Coast

Guard will calculate the prepayment

amount using the net present value of

each annual payment during the

requested prepayment period. The net

present value is a discounted amount

which, if deposited in an interest

bearing account until the payment year

and when added to the accumulated

interest, would equal the payment

amount due. The interest rate used in

calculating net present value will be the

10-year Treasury note rate in effect at

the time of calculation, as adjusted for

inflation using the projected rate for

Federal pay increases. Entitlement to

inspection services during the

prepayment period is transferable to a

subsequent owner of the vessel, but the

entitlement is not transferable to a

different vessel. If a vessel certificated

for a single service changes service

during the prepayment period, the fee

for the remainder of the prepayment

period must be recalculated using the

vessel’s new category. The remaining

prepaid balance will be applied to the

fee calculated for the remaining years in

the vessel’s new category, commencing

with the next user fee anniversary date.

With the exception of a vessel that is

removed from Coast Guard certification,

as discussed in § 2.10–105(e),

prepayments of fees are non-refundable.

Overseas Inspection and Examination

Fees

Approximately 40,000 inspector

hours are expended annually in the

overseas inspection of U.S. commercial

vessels. These overseas inspections are

conducted at the request of the vessel

owner. Vessel owners and operators

reimburse the Coast Guard (under 46

U.S.C. 3317) for travel and per diem

expenses of the marine inspectors, but

not for the personnel costs associated

with conducting overseas inspections.

Personnel hours expended during travel

to the overseas inspection site and at the

overseas inspection site waiting for a

vessel to be made ready for inspection

constitute the extra costs associated

with providing inspection and

examination services at overseas

locations which are not included in the

annual vessel inspection fees.

The Coast Guard proposed an

additional flat fee for each overseas

inspection. The total marine inspector

hours expended in conducting overseas

inspections divided by the number of

overseas inspections conducted

provides an average time for each

inspection of approximately 53 hours

travel and delay time. At $87 per

qualified inspector hour, this rule sets

the fee for each overseas inspection at

$4,585.

Foreign Tankship Fees

Foreign tankships which carry

hazardous liquids or liquefied gases in

bulk are issued a LOC, which is valid

for two years. These tankships are also

examined annually, at which time the

vessel’s LOC is endorsed. Foreign

tankships carrying oil in bulk, on the

other hand, are issued a Tank Vessel

Examination (TVE) Letter, which is

valid for one year. The time involved to

conduct each of these tankship

examinations is essentially the same.

The fee for each of the three

examinations, therefore, is the same

amount, namely $1,100.

Foreign MODU Fees

Foreign MODUs are examined under

the authority of the Outer Continental

Shelf Lands Act, codified in 43 U.S.C.

1356. The regulation requiring a foreign

MODU to obtain a LOC is published in
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13553

33 CFR 143.210. LOCs for foreign

MODUs are valid for one year or until

the MODU departs the outer continental

shelf, whichever occurs first. Since

certain other foreign vessels are required

to pay user fees for inspections and

examinations, and since U.S. MODUs

are generally inspected by and pay fees

to foreign agencies when operating in

foreign waters, the Coast Guard has

established user fees for examination

services provided to foreign MODUs.

Foreign MODU fees are collected under

the authority of 14 U.S.C. 664 and 31

U.S.C. 9701.

Foreign MODU examinations are

conducted under 33 CFR 143.207 and

143.210 to ensure compliance with one

of the following: (a) The design and

equipment standards for MODU’s in 46

CFR part 108; (b) the design and

equipment standards of the

documenting nation, if those regulations

have been found to meet or exceed U.S.

standards; or, (c) the standards issued

by the International Maritime

Organization.

Since examinations conducted to

ensure compliance with (a) above

involve essentially the same inspection

services provided to U.S. MODUs, the

fees for these foreign MODU

examinations are identical to the annual

vessel inspection fees for U.S. MODUs.

Likewise, since the scope of the

examinations conducted to ensure

compliance with categories (b) and (c)

above are essentially the same, and

involve the same amount of time, the fee

for each of these foreign MODU

examinations is the same amount,

namely $1,830.

Foreign Passenger Vessel Fees

The Coast Guard examines foreign

passenger vessels of nations that are

party to SOLAS to verify that these

vessels are in substantial compliance

with the laws of their flag state and the

controls imposed by appropriate

international treaties. The Coast Guard

initially proposed to charge the same fee

for each initial, annual, and quarterly

foreign passenger vessel examination.

However based on further review and

research, the Coast Guard has

subsequently determined that the

reciprocity provision contained in 46

U.S.C. 3303(b) does not allow

imposition of a fee for the examination

of a foreign passenger vessel except to

the extent that a foreign country charges

vessels of the United States trading to

the ports of that country. Since there are

no U.S. passenger vessels being charged

examination fees by a foreign country,

and no clear indication that any such

fees would be charged, the Coast Guard

has not established a fee for the

examination of foreign passenger vessels

under 46 U.S.C. 3303.

Fee Collections

The Coast Guard has established a

vessel user fee anniversary date for each

existing vessel currently inspected by

the Coast Guard. This was accomplished

by checking MSIS data for the COI

anniversary date of all Coast Guard

inspected vessels and assigning the

vessel’s user fee anniversary date as the

first day of the next month after the COI

anniversary date, exclusive of the year.

Once established, the vessel user fee

anniversary date remains the same for

the service life of the vessel. Annual

vessel inspection fees are due on or

before the vessel’s user fee anniversary

date. Coast Guard inspection services

will not be provided until the annual

vessel inspection fee for that year has

been paid in full. For new vessels

entering service after the effective date

of this rule, the vessel user fee

anniversary date will be based upon the

vessel’s initial COI issuance date. This

same method will be used for existing

vessels coming under Coast Guard

certification for the first time.

Annual vessel inspection fees and

foreign vessel examination fees must be

mailed to the address specified in 46

CFR 2.10–20. Overseas inspection and

examination fees, on the other hand,

must accompany each request for an

overseas inspection or examination as

required by § 2.10–120.

Fees generated by this rulemaking

will be deposited in the general fund of

the U.S. Treasury as offsetting receipts

of the Department of Transportation and

ascribed to Coast Guard activities. This

means that the fees will not be added to

current Coast Guard appropriations; nor

will the fees directly affect future

appropriations used for administration

of the Coast Guard’s marine safety

programs. The Coast Guard considers

this to be an advantage, since funding

for these programs is more predictable

when based on firm appropriations, and

administration of the vessel inspection

program will not be dependent on the

amount of fees collected during any

given year.

Discussion of the Comments

Overview

During the comment period, the Coast

Guard received a total of 1,092 written

comments to the docket. In addition,

176 persons either testified or submitted

written statements during the nine

public hearings.

All segments of the industry generally

objected to the proposed imposition of

any user fees for the inspections of their

vessels. They also objected to the

proposed fee amounts being too high.

Many requested an after-the-fact billing

system to charge for the actual

inspection time rather than the

proposed annual fees.

The largest number of comments

came from owners and operators of

small passenger vessels who were

primarily concerned with the

cumulative economic impact of local,

State, and Federal fees and the effect of

the fees on their income.

Numerous comments were also

received from the freight barge industry.

The industry’s primary concerns were

that they were not included in the fee

cap for tank barges and that they would

be charged twice for what appears to be

identical services conducted by the

Coast Guard and American Bureau of

Shipping (ABS).

The oceangoing merchant fleet

industry was primarily concerned that

the proposed fees would place their

vessels at a competitive disadvantage

relative to their foreign counterparts;

that foreign countries may choose to

reciprocate and charge U.S. vessels fees

for operating in their ports; that the

Coast Guard should delegate more of its

inspection responsibilities to ABS; that

charging an hourly rate would provide

an incentive for owners to have their

vessels ready for inspection; and that if

the industry must pay for vessel

inspection services, the Coast Guard

needs to improve its efficiency and the

quality of its inspection corps.

The offshore oil industry also

submitted numerous comments. The

primary concerns of this industry

segment related to the economic impact

the fees would have on individual

vessel operators supporting their

industry, i.e. offshore supply vessels

(OSVs).

Some comments requested that more

information be provided which

specifically shows how the annual

inspection fees were derived. The Coast

Guard has included a detailed example

of an annual fee calculation in the final

Regulatory Evaluation for this rule.

Exemptions

Under 46 U.S.C. 2110(g), the Coast

Guard may exempt a person from

paying fees if it is determined to be in

the public interest to do so. In the

NPRM the Coast Guard did not propose

any exemptions, but invited comments

on exemptions that could be considered

to be in the public interest. Over 40

exemption requests were received,

spanning a wide range of vessel

categories. The categories for which

exemptions were requested included:

State, local, and private ferries; vessels
13554 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

operated by youth-oriented, not for

profit, charitable or educational

organizations; vessels operated by

nonprofit organizations or foundations;

oceangoing merchant vessels; small

passenger vessels less than 30 feet in

length; certain historic vessels; small

entities; small passenger vessels; U.S.

vessels engaged in foreign commerce;

small passenger vessels built before

December 31, 1990; vessels whose gross

profit was less than 20% of the

proposed annual vessel inspection fee;

companies engaged in providing

passenger transportation services;

auxiliary sailing vessels; sailing school

vessels less than or equal to 65 feet in

length; yacht club launches carrying 12

passengers or less; any small entity

negatively impacted by the fees; tourism

vessels; U.S. flag liner vessels; small

passenger vessels less than 100 gross

tons; small passenger vessels less than

100 gross tons and engaged in

recreational diving and fishing

activities; foreign vessels; and U.S.

vessels in general. Of this list, the

greatest number of comments came from

the Boy Scouts of America (BSA); state,

local, and private ferries; and various

not for profit organizations. Comments

from these groups presented a variety of

reasons to support their requests for

exemption.

Most other requests for exemptions

simply suggested an exemption category

but failed to provide an articulated

rationale in support of their request.

Several comments requested an

exemption for ferries which are owned

and operated by local, state, or private

entities and which support local

transportation systems. The comments

indicated that ferries reduced vehicle

traffic congestion on area roads and

provided access to remote sites, such as

to a barrier island State park, or to the

islands of Martha’s Vineyard and

Nantucket. The comments also

indicated that many ferries operate on a

nonprofit basis in an effort to keep their

fares as low as possible, with fare

increases often regulated by a State

Public Utilities Commission. One State

transportation department indicated

that it received some type of subsidy

from the Federal Transit Administration

(FTA) and stated that it is not logical for

the Federal Government to subsidize

water-based nonprofit operations on the

one hand, while imposing a fee for

Coast Guard inspection services on the

other hand.

A substantial number of comments

requested exemptions for vessels owned

or operated by organizations that are

charitable, not for profit, and youthoriented, such as the BSA, including the

Sea Scouts and Sea Explorers, Girl

Scouts of the United States of America

(GSA), and the Young Men’s Christian

Association (YMCA) of the United

States of America. These organizations

are involved in teaching youths

maritime skills, such as boating,

seamanship, and navigational skills.

These organizations argued that since

many of their programs rely solely on

volunteers, fund-raising activities, and

private donations for their total funding

and support, their ability to continue

offering these programs would be

adversely affected if fees were charged

for the inspection of their vessels.

In addition to organizations discussed

above, several other nonprofit

organizations requested exemptions for

their vessels. These organizations

provide the public with educational

programs having an environmental or

historical focus, rather than teaching

youths maritime skills. One

organization provides charitable

medical care and therefore has a

humanitarian focus.

The Coast Guard acknowledges that

there are many charitable organizations

which provide services to the public,

and that even commercial operations,

such as ferries, benefit the general

public. However, the Coast Guard does

not agree that all organizations which

serve or benefit the public in some

manner should be exempted from the

vessel inspection fees.

The Coast Guard has a long-standing

record of supporting national youth

programs (Coast Guard Public Affairs

Manual—COMDTINST M5728.2B).

Charging fees for inspecting these

vessels would not be in keeping with

this long-standing support, nor would it

be consistent with other Coast Guard

user fee rulemakings such as the

recreational vessel user fee and

merchant marine licensing user fees

which have established a similar

exemption. Therefore, consistent with

past practice, the Coast Guard has

decided to exempt vessels which are

owned or operated by not for profit,

charitable, youth-oriented organizations

and which are used exclusively by those

organizations for training youths in

boating, seamanship, and navigation

skills.

A vessel meeting the criteria set out

in the final rule may be eligible for an

exemption. Vessel owners and

operators, including the BSA, GSA, and

YMCA organizations, desiring an

exemption must submit a written

request to Commandant (G-MP) via the

Officer in Charge, Marine Inspection

(OCMI) of the Marine Inspection Zone

in which the vessel normally operates.

Since some of the vessels owned or

operated by the BSA, GSA, and YMCA

organizations may not be used

exclusively by those organizations for

training youths in boating, seamanship,

and navigation skills, it is expected that

some of these vessels may not be

eligible for this exemption.

Historic Vessels

Several comments to the docket

asserted that the proposed annual vessel

inspection fees will have an adverse

impact on vessels listed on the National

Register of Historic Places and other

vessels possessing either historical

character or historical significance.

Section 106 of the National Historic

Preservation Act (NHPA) requires

Federal agencies to consider the effects

of their actions on historic properties

and to seek comments from an

independent reviewing agency, the

Advisory Council on Historic

Preservation (ACHP). The purpose of

the Section 106 process is to prevent

unnecessary harm to historic properties

arising from Federal actions.

Regulations for the Section 106 process

are contained in 36 CFR part 800.

Because a number of inspected

vessels are listed on the National

Register of Historic Places, the Coast

Guard referred this matter to the

Advisory Council on Historic

Preservation. In November 1993, the

Advisory Council determined that this

rule does not constitute an undertaking

under Section 106 of the National

Historic Preservation Act, therefore the

Coast Guard did not do a Section 106

analysis.

Specific Comments

Several comments expressed the

opinion that their taxes had already

paid for the cost of providing Coast

Guard inspection services, and that

charging fees amounted to nothing more

than ‘‘double taxation.’’ Some

comments stated that the primary

beneficiaries of Coast Guard inspection

services include the public, the ship’s

crew and its passengers, and the

environment, and that fees should be

reduced substantially in recognition of

that fact.

The Coast Guard does not agree. The

Omnibus Budget Reconciliation Act of

1990 tasked the Coast Guard with

establishing user fees for services

provided under Subtitle II of Title 46,

United States Code. This congressional

mandate was aimed at recovering costs

associated with providing Coast Guard

services from the recipients of those

services. OMB Circular No. A–25, dated

July 15, 1993, states that when a service

or privilege provides special benefits to

an identifiable recipient beyond those

that accrue to the general public, a
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13555

charge will be imposed to recover the

full cost to the Federal Government for

providing the special benefit, or the

market price. The Circular also provides

that when the public obtains benefits as

a necessary consequence of an agency’s

provision of special benefits to an

identifiable recipient (i.e., the public

benefits are not independent of, but

merely incidental to, the special

benefits), an agency need not allocate

any costs to the public and should seek

to recover from the identifiable recipient

either the full cost to the Federal

Government of providing the special

benefit or the market price, whichever

applies.

Just as a business cannot operate

legally without applicable State and city

business licenses, a U.S. commercial

vessel of a certain size or tonnage

cannot legally carry passengers or cargo

in U.S. waters unless it has a valid COI

issued by the Coast Guard. The Coast

Guard’s position is that the vessel owner

or operator is the primary beneficiary of

Coast Guard inspection services.

A few comments asserted that there

were no cost controls inherent in the

proposed fees that would help ensure

that the fees were competitive,

reasonable, and cost effective. Still

others questioned having 416 FTE (full

time equivalents or man-years, as

opposed to actual personnel) associated

with the total vessel inspection program

cost, because only about half of the FTE

could be accounted for by the MSIS

inspection workload data.

Personnel such as the Chief of the

Inspection Department, the Assistant

Chief of the Inspection Department,

marine inspector trainees, clerical and

support personnel, and to a lesser extent

the Executive Officer and the

Commanding Officer at each of the

Marine Safety Offices, all contribute to

the 416 FTE associated with the

administration of the Coast Guard’s

vessel inspection program. However, the

hours for these support personnel are

not in the MSIS inspection workload

data which tracks mainly those who are

directly involved in doing the

inspection or processing the reports.

The support and administrative costs

not tracked in MSIS are nonetheless

necessary to the vessel inspection

program, as are the marine inspectors

actually conducting the onboard

inspections.

Others asserted that the Coast Guard

intended to charge a separate fee for

reinspections and follow-on

inspections.

All reinspections, hull inspections,

and follow-on inspections are

encompassed within the annual vessel

inspection fee. With the exception of the

overseas inspection fee, the annual

vessel inspection fee represents the only

inspection fee most U.S. vessel owners

will pay during any given year. Payment

of the annual vessel inspection fee

entitles each owner or operator to a full

year of periodic and follow-on

inspections, regardless of when the COI,

or any other inspection, is conducted.

Some comments stated that the Coast

Guard’s de facto COI issuance policy is

shortening the inspection cycle, causing

inspections to occur more frequently

than statutorily required. They

indicated the current Coast Guard

practice of listing the COI issuance date

as the date that the inspection was

conducted (versus the actual expiration

date of the COI) would cause owners to

pay an annual vessel inspection fee

while receiving less than 12 months of

Coast Guard inspection services.

The annual vessel inspection fee will

be due on the same date each year,

namely the user fee anniversary date, for

as long as the vessel remains in service.

Therefore, the COI issuance date will

have no bearing on the amount of

annual vessel inspection services

provided.

A few comments suggested that

inspectors may become even more

vigilant during future inspections so as

to find discrepancies and thereby

generate additional user fee receipts for

the U.S. Treasury.

Since the annual vessel inspection fee

includes all periodic and follow-on

inspections conducted during the

course of the year, there exists no

incentive for inspectors to uncover

additional discrepancies to increase fee

collections.

A number of comments took

exception to the Coast Guard’s use of

the term ‘‘privilege of inspection’’ in the

NPRM and suggested that since

inspections are required by Coast Guard

regulations a more appropriate phrase

would be either ‘‘right to be inspected,’’

‘‘eligibility for inspection,’’ or

‘‘entitlement to inspection.’’ The Coast

Guard agrees, and the phrase ‘‘privilege

of inspection’’ has been replaced by

language more correctly indicating that

payment of the annual vessel inspection

fee entitles a vessel owner or operator to

a full year of periodic and follow-on

inspection services.

Numerous comments suggested that

the proposed $500 cap on tank barge

inspection fees was discriminatory and

inequitable, especially when compared

to the fees proposed for small passenger

vessels and the fees proposed for freight

barges.

The tank barge cap was part of the Act

passed by Congress. The calculated fees

for tank barges ranged from an annual

fee of $778 to $1,015. Because the fees

as calculated exceeded the statutory

limit of $500, and the Act prohibits

charging a fee exceeding $500 per year

for these vessels, the Coast Guard set the

annual vessel inspection fee at the

maximum amount allowed by Congress.

Some comments expressed the

opinion that in response to the fees

established for foreign vessels under

this rule, countries may elect, in turn, to

charge fees for U.S. vessels operating in

foreign ports.

The Coast Guard acknowledges the

possibility that foreign countries may

consider charging reciprocal fees.

However, the Act requires that fees be

established for services provided under

Subtitle II of Title 46 United States

Code, except as otherwise provided in

Title 46 and to the extent that the fees

are not in conflict with the international

obligations of the United States. The

Coast Guard has determined that user

fees are enforceable for TVE and LOC

examinations conducted on foreign

tankships and MODUs. These

examinations are required by 46 U.S.C.

Chapter 37 and are not based solely on

any international convention or

agreement; rather, they are based on

U.S. domestic port entry requirements

aimed at ensuring the protection of U.S.

ports, its waterways, and the

environment.

Several comments suggested that

annual vessel inspection fees will place

U.S. vessels at a competitive

disadvantage relative to foreign vessels

engaging in U.S. or international

commerce. One commercial shipping

representative commented that his

company was attempting to compete in

an international market, where his

competitor’s costs associated with

regulatory bodies are limited to those of

a classification society. He objected to

having to pay Coast Guard vessel

inspection fees in addition to

classification fees stating that the

increased fee burden placed his

company at a competitive disadvantage.

Just as the Coast Guard inspects the

U.S. commercial vessel fleet, SOLAS

signatory nations inspect vessels

belonging to their commercial vessel

fleets. Most of these nations charge their

fleets fees for providing these inspection

services. Since these vessels have been

inspected by their ‘‘flag state,’’ and have

been issued appropriate international

convention certificates prior to entering

U.S. waters, Coast Guard examinations

are limited to ensuring compliance only

with U.S. regulations which may

supersede international requirements.

These LOC and TVE examinations take

less time to conduct than an inspection

for a COI. Thus, these examinations
13556 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

have lower fees. Vessels of foreign

nations not party to SOLAS, and vessels

to which SOLAS does not apply are

subject to the same inspection

requirements as U.S. vessels. Because

these latter vessels require the same

amount of Coast Guard inspection

services as their U.S. counterparts, they

must pay a vessel inspection fee equal

to the annual vessel inspection fee paid

by U.S. vessels of the same vessel

service category. Thus, foreign vessels

using U.S. ports pay the equivalent

amounts for Coast Guard inspection

services as U.S. vessels.

One comment suggested that the

proposed vessel examination fee

schedule should be expanded to include

inspections of foreign cargo vessels of

nations that are signatory to SOLAS.

As authorized by 46 U.S.C. 3303 and

required under 46 CFR 90.05–1, foreign

vessels of a country having inspection

laws and standards similar to those of

the United States, and which have an

unexpired COI issued by proper

authority of its respective country,

receive only a port state control

examination to ensure that the

condition of the vessel is as stated on its

COI. User fees solely for port state

control examinations would be

inconsistent with the operation of

customary international practice and

they are not included in this rule.

A few comments stated that every

vessel carrying passengers for hire

should be inspected by the Coast Guard.

Others stated that the law concerning

bareboat charters should be changed.

These suggestions would require

changes to inspection statutes and

regulations which are beyond the scope

of this rulemaking. However, should

additional categories of commercial

vessels become subject to Coast Guard

inspection in the future, user fees will

be established for these vessels as well.

For example, the Passenger Vessel

Safety Act of 1993 now requires that

certain additional vessels carrying

passengers for hire be inspected by the

Coast Guard. Therefore, the fees

established in this rule also apply to

these vessels.

A few comments expressed the

concern that fees charged for vessel

inspection services were, in reality,

paying for other Coast Guard services

provided to recreational and fishing

vessels for which user fees have not

been proposed. The Coast Guard

disagrees.

This rule establishes annual vessel

inspection fees for those vessels subject

to Coast Guard inspection under 46

U.S.C. 3301. Recreational vessels and

fishing vessels are not currently

required to be inspected.

One comment suggested that the

proposed annual vessel inspection fee

for liquefied natural gas tankships

(LNG) was not based on the actual time

spent inspecting such vessels. The

comment stated that the proposed fee

for LNG tankships was 244% higher

than the proposed fee for a non-LNG

tankship, despite the fact that both

tankship categories should take

essentially the same amount of time to

inspect.

The Coast Guard agrees that if vessel

size was the only factor, LNG tankships

should take essentially the same amount

of time to conduct the required

inspections as non-LNG tankships.

However, Coast Guard-inspected LNG

vessels operate almost exclusively in the

overseas trade. MSIS data indicates that

most reinspections of LNG tankships

occur while the vessel is underway, and

most drydockings often require the

services of a dedicated inspector for

extended periods. The annual vessel

inspection fee for LNG tankships also

includes Coast Guard costs associated

with conducting the annual testing of

firefighting systems. All of these factors

increase the average annual inspection

time.

Because there are only 10 active

vessels in the LNG tankship fleet, the

Coast Guard reviewed MSIS data on

each of the 10 vessels dating back to

1987 to establish a more reliable average

inspection time. Data which clearly

exceeded the mean inspection time was

intentionally eliminated from this

analysis. The results indicated that a

reduction in the proposed annual vessel

inspection fee for LNG tankships was, in

fact, justified. However, the recalculated

annual vessel inspection fee for LNG

tankships remains almost twice as high

as the annual vessel inspection fee for

a conventional tankship.

One comment asked whether a

separate fee would be assessed to a

vessel operating part of the year in one

region of the country and operating the

rest of the year in another region of the

country.

Only one annual vessel inspection fee

will be charged per vessel, regardless of

the number of regions in which a vessel

operates during any given year. Payment

of the annual vessel inspection fee

entitles a vessel owner to a full year of

periodic and follow-on inspections,

regardless of where in the country the

vessel chooses to operate and how often

the vessel is inspected.

Several comments suggested that the

Coast Guard should consider billing at

the conclusion of the inspection. Other

comments expressed the opinion that

fixed annual fees do not provide an

incentive for owners to have their

vessels ‘‘ready for inspection.’’ These

comments argued that paying an annual

fee, in effect, rewards those owners and

operators who are not prepared for the

inspection at the expense of those who

are prepared. One commenter said he

objected to having his annual fee

become higher because of another

company which makes no attempt to

maintain its vessels or prepare

adequately for an inspection. He

suggested the Coast Guard establish a

published guideline of thresholds.

When the number of visits exceeds that

threshold, the annual fee for that vessel

should increase on its next anniversary,

and hopefully other more cooperative

and prepared companies’ fees should

decline. Generally, these comments

stated that charging for each inspection

at a fair, hourly rate would not only be

more equitable, but would also ensure

that the fees reflected the actual amount

of time spent on board the vessel.

Hourly fees would more accurately

reflect the actual time an inspector

spends on board a vessel and would

also likely result in lower fees for those

owners whose vessels were ‘‘ready for

inspection’’ compared to owners whose

vessels were ‘‘not ready for inspection.’’

However, the average expected value of

services provided each year is

representative of the majority of vessels

in each vessel category. In addition to

the average annual amount of time spent

on board each vessel, annual vessel

inspection fees also include travel and

administrative (paperwork, review, and

research) time.

Billing at the conclusion of each

inspection poses essentially the same

problems as charging at an hourly rate.

Charging at an hourly rate would

require creating and staffing a billing

system that would increase collection

costs by an estimated $1.75 million,

resulting in higher fees for vessel

owners and operators. Moreover, OMB

Circular No. A–25 guidance states that

user charges will be collected in

advance of, or simultaneously with, the

rendering of services unless

appropriations and authority are

provided in advance to allow

reimbursable services. Thus, the Coast

Guard decided not to bill at the

conclusion of the inspection using an

hourly rate.

The small passenger vessel industry

was particularly concerned with the

impact of the proposed fees on the

ability of many operators, especially

small entities, to stay in business. Citing

the poor state of the economy and their

declining revenues in general, they

commented on the cumulative adverse

impact of the growing number of

Federal, State, and local fees and
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13557

regulations. The comments cited more

than 60 different fees and assessments,

with the number of fees applicable to

any given vessel owner depending upon

such considerations as the type of

operation, the vessel’s size, the

geographic area of operation, and the

number of passengers carried on board

a given vessel. Included were such fees

as harbor maintenance fees; drug testing

fees; State gaming fees; tonnage fees;

Animal and Plant Health Inspection

Service fees; State agricultural

inspection fees; Bureau of Land

Management fees; State saltwater fishing

license fees; Customs fees; St. Lawrence

Seaway tolls; Federal Communications

Commission (FCC) inspection fees; State

vessel registration fees; State and

Federal water use fees; dockage fees;

National Marine Fisheries Service

permit fees; municipal business

registration fees; commercial use permit

fees; Federal reef fishing fees; State

business license fees; Gulf of Mexico

Fishery Management Council fees;

International Pacific Halibut

Commission permit fees; Mexican Fish

Commission permit fees; State fish and

game permit fees; retail fish license fees;

lobster license fees; and Public Utility

Commission fees. Other comments

mentioned State and Federal income

taxes; State sales and excise taxes; fuel

taxes; corporation taxes; municipal head

taxes; self-employment taxes;

unemployment taxes; winter boat

storage fees; lift fees; insurance and

maintenance costs; proposed Coast

Guard user fees for marine licensing,

vessel documentation, and plan review;

and compliance with the Oil Pollution

Act of 1990, the Americans with

Disabilities Act, and the proposed

Subchapter T, liferaft, and EPIRB

regulations.

While admitting that the proposed

vessel inspection fees alone would not

likely cause them to consider leaving

the industry, comments stated that the

increasing costs of operating small

passenger vessels is so overwhelming

that some owners or operators will have

little choice but to exit the industry.

They were also concerned that if they

went out of business there would be

resulting loss of jobs and revenues in

the local communities which often rely

on tourist dollars for their income. Some

small passenger vessel owners stated

they were reluctant or unable to pass on

the cost of Coast Guard fees by raising

their fees to customers. Other small

passenger vessel owners were

concerned that their customers would

be unwilling to pay higher fares, and

would seek other, less costly leisure or

tourist activities.

The Coast Guard considered the

impact that the annual vessel inspection

fees would have, particularly on the

ability of small passenger vessel

operators to remain in business. The

Coast Guard held nine public hearings

on the proposed rule in order to gather

more data on the likely economic

impact of the proposed fees. Based upon

the comments received, both in writing

to the docket and during the public

hearings, the Coast Guard reviewed its

proposed fees. The Coast Guard

recognizes that the economic impact on

each owner or operator depends on a

myriad of factors including seasonal

operation, number of passengers, status

of the economy, weather, and the ability

to pass on new costs to paying

passengers. While the Coast Guard can

calculate the dollar amount of impact on

individual vessel owners, it cannot

calculate the overall economic impact

on each vessel owner and the data in the

comments did not support a finding of

a significant impact on a substantial

number of small entities.

In the NPRM, the Coast Guard divided

the U.S. fleet into 29 different vessel

subcategories for the purpose of

establishing annual vessel inspection

fees. The Coast Guard selected the fee

subcategories after observing patterns in

the amount of time it takes to conduct

an inspection as a function of inspection

type, vessel type, and other factors.

Many comments stated that the costs

for inspecting smaller vessels appeared

too high and did not accurately reflect

the inspection time required for these

vessels. In response to these comments,

the Coast Guard reexamined its

inspection data and found that other

breakpoints could be used to establish

additional subcategories (see Figure 1).

By establishing these additional

subcategories, the Coast Guard was able

to tier the fees differently in order to

achieve a more precise allocation of

program costs. While reexamining the

inspection data, the Coast Guard also

identified some outliers in the data that

skewed the average mean inspection

time for all vessels of that category. By

disregarding these data outliers in

computing the mean inspection time,

the Coast Guard was able to develop

mean inspection times that more

precisely represent the average

inspection time for each vessel category

resulting, in many cases, in lower fees.

FIGURE 1.—NUMBER OF ANNUAL VESSEL INSPECTION FEE

SUBCATEGORIES

Vessel category NPRM1 Final

rule

Freight Barges .............. 1 3

Freight Ships ................. 1 3

Ready Reserve Fleet

Freight Ships ............. 1 0

Industrial Vessels .......... 1 2

Mobile Offshore Drilling

Units .......................... 4 4

Offshore Supply Vessels ............................ 1 2

Offshore Supply Vessels in the Alternate

Reinspection Program 0 2

Oceanographic Research Vessels .......... 1 3

Sea-going Towing Vessels ............................ 1 1

Tank Barges ................. 1 1

Tankships ...................... 1 3

Ready Reserve Fleet

Tankships .................. 1 0

Liquefied Gas Tankships .......................... 1 1

Small Passenger Vessels ............................ 6 9

Sailing School Ships 2 ... 0 3

Passenger Barges ........ 1 4

Passenger Ships ........... 5 5

Nautical School Ships ... 1 3

All Other Inspected Vessels ............................ 1 1

Totals ................. 29 50

Notes:

1 Ready Reserve Fleet Freight Ship and

Ready Reserve Fleet Tankship are not included as categories in the final rule. 2Sailing School Ships were included with

Small Passenger Vessels in the NPRM.

For instance, the Coast Guard initially

proposed a single fee subcategory for all

small passenger vessels less than or

equal to 54 feet in length. The annual

inspection fee proposed for all vessels

in this category was $820. However,

during the review of the proposed fees

for small passenger vessels, the Coast

Guard determined that the inspection

data supported creating another

subcategory based on length, and

recalculated the annual vessel

inspection fees based on these new

subcategories. The Coast Guard also

examined its inspection data for DUKW

vessels (ex-Army 21⁄2 ton amphibian

trucks), hydrojet boats, swamp tour

boats, and yacht club launches.

Comments stated that due to these

vessels’ simplified design, the time

required to conduct an inspection on

these types of vessels was considerably

less than the time required for other

small passenger vessels. However, MSIS

inspection data supported the creation

of separate fee categories for DUKW

vessels and hydrojet boats, but did not
13558 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

indicate a significant difference in the

mean inspection time for ‘‘swamp tour

boats’’ and yacht club launches when

compared to other small passenger

vessels of the same length. Therefore the

following new subcategories were

created for small passenger vessels

(SPVs):

New subcategories

Annual

inspection fee

—DUKW vessels .......................... $450

—Hydrojet boats ........................... 470

—SPVs length not greater than

30 feet ....................................... 545

—SPVs more than 30 feet but not

more than 54 feet ..................... 670

Several comments stated that fees

should be linked to some measure of a

vessel’s ability to generate revenue, such

as the number of passengers a vessel can

carry. Others stated that fees should take

into account a vessel’s actual gross

earnings for the year. For instance,

several comments asserted that the fees

failed to take into account the seasonal

nature of many vessel operations, and

that vessels operating 3–5 months a year

should not be charged the same annual

fees as vessels which operate yearround.

The Coast Guard does not agree. The

number of passengers for which a vessel

is certificated is not a direct measure of

actual revenues, it is a measure of

potential revenues. The authorized total

number of passengers is not necessarily

the same as the actual number of

passengers a vessel carries during any

given voyage. Indeed, many small

passenger vessel owner comments

indicated that their vessels frequently

sail with fewer than half the authorized

number of passengers on board. Nor is

the number of months a vessel may

operate during the year an effective

predictor of revenues for that year. For

instance, revenue generated by a vessel

carrying one-half its passenger capacity

for twelve months would be comparable

to a similar vessel carrying full

passenger capacity for six months.

Although the economic impact of an

annual fee may be greater for a vessel

with a short operating season, than for

a similar vessel with a longer season,

the amount of resources expended by

the Coast Guard to inspect these vessels

is the same whether a vessel operates for

one month or for twelve. The Coast

Guard based its annual vessel

inspection fees on the average cost to

the Coast Guard of inspecting each

category of vessels.

Some comments expressed the

opinion that Coast Guard travel costs

ought to reflect the proximity of the

inspector to the job site, instead of

attributing a fixed amount of average

travel time to each vessel per year.

Others pointed out that many small

passenger vessel owners and operators,

especially those located in remote areas,

often coordinate inspections with other

vessel owners and operators in an effort

to minimize Coast Guard travel time.

Coordinating inspections is a common

practice within the small passenger

vessel industry. This practice most often

applies to inspection sites located

several hours from the Coast Guard

inspection unit. However, Coast Guard

MSIS data shows that travel time

averages just over two hours per

inspection, regardless of the number of

inspections conducted during a

particular inspection trip. It is not

uncommon for inspectors to travel three

hours each way to get to an inspection

site. In other cases, one inspector may

inspect three vessels in the same day.

The practice of doing multiple

inspections during a single inspection

trip allows the Coast Guard to minimize

its travel costs; otherwise, average Coast

Guard travel costs would be greater.

Thus, the Coast Guard considers it

reasonable that it include in the vessel

owner’s annual vessel inspection fee an

average of about two hours travel time

per vessel per year.

Comments from various industry

segments recommended that the Coast

Guard not impose any user fees until all

the proposed user fee rules have been

published, so that the cumulative

economic impact of these fees on

owners and operators could be properly

evaluated.

The user fee rules under development

by the Coast Guard may impact some of

the same segments of the regulated

marine community. One example is the

small passenger vessel industry, where

vessels are often owned and operated by

the same individual who may be subject

to both marine licensing fees (CGD 91–

002) and inspection fees from this rule.

On December 18, 1991, the Coast Guard

reopened the comment period for the

Marine Licensing NPRM to run

concurrently with the comment period

for the Commercial Vessel Inspection

NPRM. Establishing the concurrent

comment period did not provide any

new information to the marine licensing

user fee rule, or to this rule concerning

cumulative impact of the fees. Since

these two rules are the most likely to

have affected the same segments of the

regulated community, and since the

Coast Guard did not receive data from

the licensing rule comments during the

concurrent comment period that

necessitated changes in this final rule,

the Coast Guard decided not to delay

publication of this final rule pending

comments on remaining user fee

proposals.

A number of comments expressed

concern over the apparent duplication

of inspection services by Coast Guard,

ABS, and other parties for which fees

are charged. One commercial shipping

representative suggested that when a

classed vessel is surveyed by ABS that

the survey be accepted by the Coast

Guard. One barge company stated that

barge owners will incur inspection

charges for essentially the same service

from both Coast Guard and ABS, i.e., an

inspection and survey to ensure the

structural integrity of the vessel.

The Coast Guard is aware that

inspections or surveys done by other

agencies such as FCC, by classification

societies like ABS, and by marine

surveyors are subject to fees. Although

activities of the same type done by

different agencies may appear to be at

least partially duplicative, the activities

have a different purpose. Other third

party inspections or surveys, such as

those conducted by marine surveyors,

are also for a different purpose, usually

to meet insurance company

requirements.

The Coast Guard agrees that cost

savings could result if some inspections

or surveys done by one agency could be

used by other agencies or third parties

for several purposes. Acceptance of

third party inspections or surveys as

evidence of compliance with Coast

Guard regulations is an issue which is

being reviewed by the Coast Guard as

part of its Maritime Regulatory Reform

initiative, and could result in changes to

the Coast Guard’s marine inspection

program. However, such program

changes are beyond the scope of this

rule.

A few comments suggested that the

Coast Guard should consider revising its

vessel inspection intervals so that the

various inspection requirements such as

hull inspection interval and mid-period

inspection or COI inspection interval

coincide, thereby reducing the number

of required Coast Guard inspections.

One commercial shipping representative

stated that presently, the rules call for

drydocking deep-draft vessels twice in

five years with a maximum of three

years between drydockings. In addition,

there are two inspections for certificate

renewal and three annual inspections.

As it stands now, some owners will

schedule an inspection for certificate

renewal at the two year interval and

then drydock the vessel 6 to 12 months

later and again request a new certificate.
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13559

The existing certificate expiration

schedule and the new drydock

provisions do not complement each

other and cause both parties additional

inspection time and delays. He

suggested that adopting a 2.5 year COI

with a 15 month reinspection schedule

would rectify this situation.

Because the Coast Guard is currently

unable to apportion its hull inspection

costs more precisely, it chose to

compute the annual vessel inspection

fee based upon the longest hull

inspection interval applicable to each

vessel category or subcategory.

Although the Coast Guard is

reexamining this subject with a view to

minimizing the intervals to the extent

allowed by law, this and other similar

suggestions to revise the Coast Guard

inspection intervals would involve

program changes which are beyond the

scope of this rule.

Some comments recommended

deferring follow-on overseas inspections

until the next scheduled reinspection or

inspection for certification. Follow-on

inspections can often be scheduled

around or in conjunction with a

periodic inspection. Only in extreme

cases is it necessary to dispatch an

inspector overseas solely for the

purpose of conducting a follow-on

inspection. Certain deficiencies may

impact a vessel’s overall safety and must

be corrected prior to the next scheduled

periodic inspection. The OCMI may

extend the compliance date for certain

deficiencies which do not jeopardize the

safety of the vessel, its passengers, or its

crew. Other deficiencies can be cleared

administratively by the vessel’s master

or chief engineer submitting written

servicing reports or certifications. The

cognizant OCMI possesses the authority

to determine whether a deficiency’s

compliance timeframe can be extended

or whether it can be cleared

administratively. If it requires a separate

overseas trip, then another overseas fee

must be paid. The overseas inspection

and examination fee will apply to each

periodic and follow-on inspection

conducted overseas, as well as to each

foreign vessel examination conducted

overseas.

Some comments indicated that the

overseas inspection or examination fee

would be excessive for inspections or

examinations conducted in locations

near the continental U.S. These

comments indicated that it may take

less time to travel to the inspection site

outside the continental U.S. than to

travel to other inspection sites within

the continental U.S. For instance, one

commenter indicated that on occasion

his firm, and at least one other U.S.

shipping company, has used a Canadian

shipyard requiring approximately 35

miles of inspector travel from the

Marine Safety Office in Buffalo, New

York, for required inspections.

The Coast Guard agrees. The overseas

inspection or examination fee in the

final rule does not apply to inspections

or examinations conducted in Canada,

Mexico, or the British Virgin Islands.

The overwhelming majority of

inspections or examinations conducted

in these countries involve only a short

commute by either car, boat, or plane.

For example, it is not uncommon for

Coast Guard inspectors to travel to sites

in Canada and Mexico by car or short

plane trip, and sites in the British Virgin

Islands by short boat trip. Coast Guard

data indicates that it actually takes less

time to travel to some of these sites than

it does to travel to a remote inspection

site in the continental United States. For

this reason the Coast Guard will not

charge the additional overseas

inspection or examination fee for these

inspections or examinations.

Another comment stated that it would

be more equitable to owners whose

vessels operate overseas if the Coast

Guard charged just one overseas

inspection fee per vessel per year

instead of charging an overseas

inspection fee each time an overseas

inspection is conducted.

Overseas inspections involve travel

and delay time of approximately 40,000

hours annually. Much of this time is

expended in direct support of

conducting periodic inspections;

however, some of the time is expended

conducting follow-on inspections, such

as clearing deficiencies (i.e., CG–835s).

Several comments suggested that the

Coast Guard should consider expanding

the OSV alternate reinspection program

for mid-period inspections to MODUs

operating outside the U.S. for extended

periods. Currently, OSVs under 400

gross tons, operating outside the

continental U.S., have the option to

participate in an alternate reinspection

program, under the regulations

contained in 46 CFR 91.27–13. If

accepted into the alternate reinspection

program, OSV owners perform an

alternate reinspection of their vessel, in

lieu of having a Coast Guard marine

inspector perform the inspection, and

then submit results to the OCMI for

review.

This rule establishes a lower annual

vessel inspection fee for OSVs

participating in the alternate

reinspection program than for those

OSVs which do not participate in the

alternate reinspection program. This

lower fee reflects the fact that since a

marine inspector is not needed for the

inspection, it takes less time for the

Coast Guard simply to review the results

of the alternate reinspection. Although

expansion of the alternate reinspection

program to include U.S. MODUs

operating overseas is beyond the scope

of this rule, the Coast Guard will

examine this issue independently of this

rule.

A few comments suggested that vessel

owners should receive either credit or a

refund for ‘‘unused certificate time’’ to

cover that portion of a year during

which a vessel may be laid up or

otherwise taken out of service.

If the vessel owner pays the annual

vessel inspection fee, and the vessel is

subsequently laid up or taken out of

service for part of the year, the Coast

Guard will not issue a refund for the

portion of the year for which the vessel

was laid up or taken out of service. If

a vessel is laid up or out of service on

its user fee anniversary date, and the

vessel is expected to remain laid up or

out of service until its next user fee

anniversary date (twelve months later),

the vessel owner or operator will not be

required to pay the annual vessel

inspection fee for that year. When the

vessel is placed back in service,

however, the owner or operator will be

required to pay the full annual vessel

inspection fee before the vessel is

inspected.

Additionally, OSVs will occasionally

surrender their COI in order to operate

as an oceanographic research vessel.

Upon compliance with the procedures

set forth in 46 CFR 3.10, the OCMI

issues a Letter of Designation as an

Oceanographic Research Vessel.

Uninspected vessels may also be issued

a Letter of Designation. For the purposes

of this rule, vessels operating under a

Letter of Designation as an

Oceanographic Research Vessel will not

be charged an annual vessel inspection

fee. However, if the vessel returns to

inspected service, it must pay the

annual vessel inspection fee for that

year before any inspection services are

provided.

Several comments suggested Coast

Guard marine inspectors should

conduct FCC radio inspections, thereby

saving vessel owners the cost of the FCC

radio inspection fee.

When Coast Guard marine inspectors

conduct inspections for COIs or

reinspections, they do not conduct the

FCC radio inspection. They only verify

that a vessel has a valid Safety

Radiotelephone Certificate issued by the

FCC and ensure that the vessel’s radio

equipment passes an operational test.

The Coast Guard and FCC have

previously considered this issue and

determined it was not feasible to

combine these inspection activities.
13560 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

Several comments expressed the

opinion that if an OSV were to change

its service to a freight vessel at any time

during the course of a given year, the

vessel owner should not have to pay the

higher annual vessel inspection fee

applicable to freight vessels. Another

commenter suggested that since many

OSV crewboats and utility boats are

inspected under Subchapter T, these

vessels should not have to pay an OSV

fee that is any higher than the fee for a

corresponding small passenger vessel.

Annual vessel inspection fees for

vessels certificated for single service

will not be adjusted for the year in

which a change in vessel service occurs.

The vessel’s service at the time of its

user fee anniversary date will thus

determine which annual vessel

inspection fee the owner must pay.

Regardless of whether or not a crewboat

or a utility boat is inspected under

Subchapter T or Subchapter I, the vessel

is still an OSV. Annual vessel

inspection fees are based on the COI,

reinspection, and hull inspection

intervals applicable to each vessel

category, and the average amount of

time it takes to conduct each of these

inspections. Thus, since small passenger

vessel COIs are valid for three years and

OSV COIs are valid for two years, an

OSV owner should expect to pay a

higher annual vessel inspection fee in

comparison to a small passenger vessel

of equivalent size.

A few comments asked which fee

would apply on vessels operating in

more than one service under their COI.

Vessels which are authorized to operate

in more than one service are referred to

as ‘‘dual-certificated.’’ In such instances,

the vessel owner will pay the higher

annual vessel inspection fee of the two.

Several questions were raised

regarding the examination of foreign

vessels and applicable fee payment

procedures. For instance, how will fees

be collected, and what billing system

will be in place?

As with U.S. vessels, foreign vessel

fees must be paid before the

examination is conducted. The fee may

be paid by either the vessel owner, the

vessel operator, or some other

designated vessel representative (e.g. the

vessel’s agent); however, the primary

responsibility for payment of the fees

resides with the vessel owner. Since it

is not uncommon for a vessel to arrive

in a U.S. port with an expired TVE

Letter or LOC, foreign vessel

representatives will need to plan

accordingly. Payment must be received

before the examination is conducted.

The fees listed in § 2.10–125 apply for

foreign tank vessel examinations

required by the Coast Guard. For vessels

receiving a LOC, which is valid for two

years, the $1,100 fee must be paid for

each initial (or biennial examination, as

appropriate), and for the examination

conducted in the intervening years. For

foreign tank vessels receiving a TVE,

which is valid for one year only, the

$1,100 fee applies to each annual TVE

letter examination. As with annual

vessel inspection fees, follow-up visits

necessary for corrections of deficiencies

related to the above examinations are

included in the fees established for TVE

and LOC examinations.

Foreign vessel examination fees are

based on the cost of providing required

examination services, regardless of how

many or how few port calls are made

during the course of a given twelve

month period. If a foreign tank vessel

carrying oil in bulk has a TVE

conducted one year and does not make

another U.S. port call until three years

later, its TVE letter will have expired

and the $1,100 fee must be paid before

another TVE is conducted. If, on the

other hand, a chemical tankship has a

LOC examination conducted one year

and doesn’t return to U.S. waters until

thirteen months later, its intervening

annual examination will be due and the

$1,100 fee must be paid before the LOC

endorsement examination is conducted.

Comments Beyond the Scope of the Rule

The Coast Guard received many other

suggestions for changing the way the

Coast Guard conducts its inspection

program. These persons believed these

changes would result in more efficient

use of Coast Guard resources and would

reduce the fees. For instance, several

small passenger vessel owners

recommended that the Coast Guard

accept inspections by non-Coast Guard

inspectors, such as insurance industry

inspectors; qualified members of the

marine surveying community belonging

to a recognized professional

organization; or qualified marine

surveyors certified by the Coast Guard.

These comments asserted that private

sector companies could conduct vessel

inspections in a more cost-effective

manner.

Also, a few comments indicated that

it takes a significant amount of time just

to inspect lifejackets on large passenger

vessels. They suggested that this activity

should be performed by an individual

whose services would cost less than a

marine inspector, such as a Coast Guard

petty officer.

All these comments are beyond the

scope of this rule, and the Coast Guard

will examine these issues

independently of this rule.

Other Changes

In addition to changes discussed in

the preceding sections, the Coast Guard

made other substantive changes to the

proposed regulations.

Applications for Inspections

In the NPRM, the Coast Guard

proposed in § 2.01–1, Applications for

inspections, that application forms

would be accompanied by applicable

fees, that evidence of payment would be

endorsed on the COI, and that payment

of fees would be verified before the

inspection was scheduled. The Coast

Guard has determined that this language

is now redundant or inconsistent with

the requirements of subpart 2.10 and,

therefore, has been deleted from the

final rule.

Definitions

Most vessel definitions are based on

regulations or statutes. In addition to a

few minor revisions to certain proposed

definitions which are editorial in

nature, the definition for ‘‘Towing

vessel’’ has been changed to ‘‘Sea-going

towing vessel.’’ A definition for

‘‘Submersible vessel,’’ the ‘‘user fee

anniversary date’’ and the ‘‘vessel

identification number,’’ the latter two of

which relate to the collection process,

have been added, and the definition for

Oceanographic research vessel has been

corrected to conform with the definition

in 46 U.S.C. 2101.

Also, definitions of the following have

been revised to conform to revisions

made by the Passenger Vessel Safety Act

of 1993:

1. Offshore supply vessel

2. Passenger vessel

3. Sailing school vessel

4. Small passenger vessel

The revised definitions in the final rule

do not change the category in which a

vessel would have been placed by the

NPRM. However, the Passenger Vessel

Safety Act of 1993 has resulted in

certain previously uninspected charter

vessels now coming under Coast Guard

inspection requirements. When the

NPRM was published, these vessels

were not inspected by the Coast Guard

and, therefore, were not subject to

inspection user fees. To comport with

the statutory change, these vessels (most

of which are now included in the small

passenger vessel category) are subject to

Coast Guard inspection and to the

corresponding fees established in this

rule.

The language in Table 2.10–101 has

been revised so that the definition for

‘‘all other inspected vessels’’ is no

longer needed and has been deleted

from the final rule.
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13561

Public Vessels of the United States and

Other Vessels Owned or Operated by

Federal Agencies

Under 46 U.S.C. 2109, most public

vessels of the United States are

excluded from the vessel inspection

requirements of Subtitle II of Title 46

United States Code. The provisions of

Subtitle II apply only to those public

vessels of the United States owned or

operated by the Department of

Transportation, except for Saint

Lawrence Seaway Development and

Coast Guard vessels. That means the

Maritime Administration is the only

Federal agency subject to user fees for

subtitle II services provided to their

public vessels. Maritime Administration

public vessels include vessels of the

Ready Reserve Fleet and training vessels

operated by the U.S. Merchant Marine

Academy and State maritime academies.

Under specific Memorandums of

Understanding, the Coast Guard does

inspect public vessels of other agencies

such as the Military Sealift Command.

However, these inspections are not

required by Subtitle II, and the cost of

providing these services is not

recoverable through user fees; nor can

these costs be reallocated to other

vessels. In addition, Federal agencies

may own or operate vessels which are

not ‘‘public vessels’’ because they are

engaged in commerce, or are required

for some other reason to be inspected

under Subtitle II. The Coast Guard could

charge inspection fees for these vessels;

however, there would be no benefit to

charging fees to these agencies for

required inspections. The user fee

provisions of the Act are intended to

help reduce the Federal budget deficit

and the fees collected by the Coast

Guard are deposited into the general

fund of the U.S. Treasury. Payment of

the fees by a Federal agency would

result in a payment from a Federal

agency to the U.S. Treasury; it would

not increase the revenues to the U.S.

Treasury. Thus, the Coast Guard has

decided to waive collection of annual

vessel inspection fees which would be

paid directly using Federal appropriated

funds.

Overtime Compensation for Civilian

Inspectors

Overtime compensation for civilian

inspectors is authorized by 46 U.S.C.

2111 and is currently located in 46 CFR

2.01–60 of the regulations. The Coast

Guard proposed to update § 2.01–60 and

include it with other inspection fees in

new Subpart 2.10.

However, the Coast Guard decided

not to move this section on overtime

compensation regulations into the user

fee regulations. Although the Coast

Guard’s intent was to locate

requirements for all inspection fees

together, the Coast Guard decided that

this action could cause confusion. The

overtime compensation fees are required

by a different statute and are not part of

the user fees established in this rule.

Also, since the Coast Guard is

authorized to directly recover these

amounts to pay for civilian overtime,

different accounting procedures are in

place.

Although the Coast Guard proposed to

update the existing regulations in

§ 2.01–60, the Coast Guard has decided

against doing so at this time. Instead,

these regulations will be revised in a

future rulemaking. Therefore, the

regulations in § 2.01–60 have not been

changed in this rulemaking and apply to

inspections where civilian inspector

overtime is involved.

Excursion Permit Fee

The NPRM proposed to charge a fee

for excursion permits. Vessel operators

desiring to carry passengers in excess of

the number listed on the vessel’s COI

must apply to the cognizant OCMI for

issuance of an excursion permit.

Excursion permits are issued by the

OCMI only after the vessel has been

inspected to ensure that the proposed

excursion would meet minimum safety

requirements. The MSIS data indicates

that only a limited number of these

permits are issued each year (79 in

1989, 56 in 1990, and 85 in 1991),

despite verbal comments during the

public hearings which suggested that a

substantially greater number of such

permits are issued annually. Because

the MSIS data on these permit

inspections is incomplete, proposed

section 2.10–106 has been deleted from

this rule. The Coast Guard may,

however, propose an excursion permit

fee when more data becomes available

in the future.

Collection Procedures

Since the NPRM was published, a

collection system has been established

for the payment of annual vessel

inspection fees, foreign vessel

examination fees, and overseas

inspection fees. As a result, specific

collection procedures have been added

to this rule.

This rule specifies that payments may

be made by check or money order only.

Wire transfers and credit cards are not

available payment options at this time.

If desired, vessel owners and operators

may pay inspection or examination fees

for several different vessels in the same

transaction, provided that the vessel

name and vessel identification number

of each vessel for which a payment is

being made accompanies the payment.

All inspection and examination fees

must be paid before the inspection or

examination service is provided.

Regarding payment of the annual

vessel inspection fee, proposed § 2.10–

101(b) indicated that a U.S. vessel

owner would pay the annual vessel

inspection fee on the anniversary date of

the COI. This requirement has been

changed. The vessel owner must pay the

annual inspection fee on or before the

vessel’s user fee anniversary date, as

defined in § 2.10–25. Approximately six

weeks prior to this date, the Coast Guard

will send a user fee notification letter to

the owner of each U.S. commercial

vessel inspected by the Coast Guard.

The notification letter will include the

vessel’s name, its official number, the

vessel’s user fee anniversary date

(payment due date), the amount due,

and the address to which the payment

must be sent to ensure that the fee is

credited to the proper vessel.

All user fee payments will be

processed by NationsBank in Atlanta,

Georgia. Inspection and examination fee

payments will not be accepted at Coast

Guard Marine Safety or Marine

Inspection Offices. The only exception

to this policy involves payment of

overseas inspection and examination

fees, which must accompany the request

for an overseas inspection or

examination. Under the computerized

payment tracking system established by

the Coast Guard, all payment histories

should be updated within one business

day following receipt of the payment by

NationsBank. An 800 number has also

been established to handle start-up user

fee inquiries and to provide payment

information. The number, 1–800–941–

3337 will remain in effect during initial

implementation of the rule.

Penalties for Failure To Pay

Section 2110 of Title 46 U.S.C.

authorizes a civil penalty of up to

$5,000 for failure to pay fees and

authorizes the Secretary of the Treasury

to withhold customs clearance for

vessels which fail to pay fees, when so

requested by the Secretary of

Transportation. Inspection and

examination services will not be

provided unless the Coast Guard can

verify that the appropriate fees have

been paid. The Coast Guard will treat

checks returned due to insufficient

funds, account closed, or any other such

reason, as a delinquent payment and

will seek to recover appropriate

collection and enforcement costs from

the appropriate party as permitted by

law.
13562 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

Renumbered Sections

This rule renumbers and reorganizes

many of the sections in the proposed

regulations (see Figure 2).

FIGURE 2.—CHANGES TO SECTION

NUMBERS IN THE REGULATION

NPRM Final Rule

(None) ................................... § 2.10–1

(None) ................................... § 2.10–5

(None) ................................... § 2.10–10

§ 2.10–11 .............................. (None)

(None) ................................... § 2.10–20

§ 2.10–1 ................................ § 2.10–25

§ 2.10–101 ............................ § 2.10–101

§ 2.10–103 ............................ § 2.10–105

§ 2.10–105 ............................ § 2.10–115

§ 2.10–106 ............................ (None)

§ 2.10–107 ............................ § 2.10–120

§ 2.10–109 ............................ § 2.10–125

§ 2.10–110 ............................ § 2.10–130

§ 2.10–13 .............................. § 2.10–135

Regulatory Evaluation

This rule is a significant regulatory

action under section 3(f) of Executive

Order 12866 but does not require an

assessment of potential costs and

benefits under section 6(a)(3) of that

order. It has been reviewed by the Office

of Management and Budget under that

order. It is significant under the

regulatory policies and procedures of

the Department of Transportation (DOT)

(44 FR 11040; February 26, 1979). Fees

are mandated by the Omnibus Budget

Reconciliation Act of 1990, which

amended 46 U.S.C. 2110 to remove

long-standing prohibitions against

charging fees for Coast Guard

commercial vessel inspection and

examination services.

The Act required the Coast Guard to

establish fees for services provided

under Subtitle II of Title 46 United

States Code. These services include:

Licensing and documentation of

merchant marine personnel; commercial

vessel documentation; commercial

vessel inspections and examinations;

equipment approval and factory

inspections; and vessel plan review and

new vessel construction. Whereas the

total cost of these user fees is expected

to be less than $35 million, this

rulemaking deals only with vessel

inspection user fees, which are

estimated at $17.2 million annually.

Projected receipts are well below the

$100 million threshold which would

make this subject to the provisions of

section 6(a)(3) of Executive Order

12866, however the Coast Guard has

prepared a final Regulatory Evaluation.

The Regulatory Evaluation is available

in the docket for inspection or copying

where indicated under ADDRESSES. It

concluded that the financial impact on

the public, including most of the

individuals subject to the user fees in

this rule, is expected to be minimal.

Small Entities

Under the Regulatory Flexibility Act

(5 U.S.C. 601 et seq.), the Coast Guard

must consider whether this rule will

have a significant economic impact on

a substantial number of small entities.

‘‘Small entities’’ include independently

owned and operated small businesses

that are not dominant in their field and

that otherwise qualify as ‘‘small

business concerns’’ under section 3 of

the Small Business Act (15 U.S.C. 632).

Based upon a careful review of the

public comments and public testimony,

the Coast Guard developed a fee

structure which is intended to help

reduce the impact on owners and

operators of small business entities.

Based on the establishment of

additional vessel subcategories, which

resulted in lower fees in many

instances, the Coast Guard certifies

under 5 U.S.C. 605(b) that these fees are

not expected to have a significant

economic impact on a substantial

number of small entities.

Collection of Information

This rule contains additional

collection of information requirements

under the Paperwork Reduction Act (44

U.S.C. 3501 et seq.). Existing

requirements for applications for

inspection are covered under OMB

control number 2115–0007. Additional

requirements under this rule involve the

collection of funds, and of such

information as is required to calculate

the annual vessel inspection fee due and

to ensure proper collection of fees. This

information includes the name of the

vessel, the vessel identification number,

and other identifying information which

will permit follow-up action if an

incorrect fee amount is submitted or a

payment instrument fails to clear

NationsBank.

A new requirement is established for

those owners choosing to pay annual

vessel inspection fees for future years in

advance. The owner must, in a written

request to the Coast Guard, indicate the

vessel identification number and the

number of years for which the owner

desires to prepay the annual vessel

inspection fee. If a vessel is permanently

removed from Coast Guard certification,

the owner may seek a refund of the

remaining prepayment amount by

submitting a written request to the Coast

Guard.

Another new requirement is

established for organizations seeking an

exemption from the annual vessel

inspection fee for vessels owned or

operated by their organization. In order

to be eligible for an exemption,

organizations must submit a written

request to the Coast Guard and provide

evidence that their organization is

charitable in nature, not for profit, and

youth-oriented, and that each vessel is

owned or operated by the organization

and is used exclusively for training

youths in boating, seamanship, and

navigation skills.

Finally, a new requirement is

established for Federal agencies owning

or operating inspected vessels for which

fees would be paid directly using

Federal appropriated funds. The Coast

Guard will waive collection of the

annual vessel inspection fee for these

vessels. However, by October 1 of each

year, agencies owning or operating

eligible vessels must provide the Coast

Guard with the name and the vessel

identification number of each vessel to

which the waiver will apply.

The additional collection of

information burden placed on the

public by this rule is expected to be

minimal. These new collection of

information requirements were

approved by OMB and are covered

under OMB control number 2115–0617.

Federalism

The Coast Guard has analyzed this

rule in accordance with the principles

and criteria contained in Executive

Order 12612 and has determined that

the final rule does not have sufficient

federalism implications to warrant the

preparation of a Federalism Assessment.

This final rule establishes user fees for

vessel inspection and examination

services. This rule will result in the

payment of fees by States, State

agencies, and local governments for

inspection services provided to vessels

owned by such entities. The impact of

these fees on these entities is expected

to be minimal. While some States and

local governments may be required to

pay fees, the fees will be solely due to

the fact that the entity owns or operates

the vessel, not due to a mandate

imposed on them as a government

entity.

Environment

The Coast Guard has considered the

environmental impact of this rule and

has concluded that, under section 2.B.2

of Commandant Instruction M16475.1B,

this rule is categorically excluded from

further environmental documentation.

Section 2.B.2 of that instruction

excludes ‘‘administrative actions and

procedural regulations and policies

which clearly do not have any

environmental impacts.’’ A Categorical
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13563

Exclusion Determination is available in

the docket for inspection or copying.

List of Subjects

33 CFR Part 143

Continental shelf, Fees, Marine safety,

Occupational safety and health, Vessels.

46 CFR Part 2

Fees, Marine safety, Reporting and

recordkeeping requirements, Vessels.

For the reasons set out in the

preamble, the Coast Guard amends Title

33, Chapter I, Subchapter N, Part 143

and Title 46, Chapter I, Subchapter A,

Part 2 as follows:

Title 33—[Amended]

SUBCHAPTER N—OUTER CONTINENTAL

SHELF ACTIVITIES

PART 143—DESIGN AND EQUIPMENT

1. The authority citation for Part 143

is revised to read as follows:

Authority: 43 U.S.C. 1333(d)(1), 1348(c),

1356; 49 CFR 1.46; section 143.210 is also

issued under 14 U.S.C. 664 and 31 U.S.C.

9701.

2. Section 143.210 is amended by

adding a new paragraph (c) to read as

follows:

§ 143.210 Letter of Compliance.

* * * * *

(c) The owner or operator of a foreign

mobile offshore drilling unit requiring a

letter of compliance examination must

pay the fee prescribed in 46 CFR 2.10–

130.

Title 46—[Amended]

SUBCHAPTER A—PROCEDURES

APPLICABLE TO THE PUBLIC

PART 2—VESSEL INSPECTIONS

3. The authority citation for Part 2 is

revised to read as follows:

Authority: 14 U.S.C. 664; 31 U.S.C. 9701;

33 U.S.C. 1903; 43 U.S.C. 1333, 1356; 46

U.S.C. 2110, 3306, 3703, 5115, 8105; E.O.

12234, 45 FR 58801, 3 CFR 1980 Comp., p.

277; 49 CFR 1.46; Subpart 2.45 also issued

under the authority of Act Dec. 27, 1950, Ch.

1155, secs 1, 2, 64 Stat 1120 (see 46 U.S.C.

App. note prec. 1).

PART 2—VESSEL INSPECTIONS

4. In section 2.01–1 paragraph (b) is

revised to read as follows:

§ 2.01–1 Applications for inspections.

(a) * * *

(b) To whom submitted. The

completed form must be submitted to

the Officer in Charge, Marine

Inspection, in the Marine Inspection

Zone within which the inspection is to

be conducted.

* * * * *

5. In section 2.01–6 the section

heading is revised, paragraph (a)(2) is

redesignated as paragraph (a)(2)(i) and a

new paragraph (a)(2)(ii) is added to read

as follows:

§ 2.01–6 Certificates issued to foreign

vessels.

(a) * * *

(2) (i) * * *

(ii) Letter of Compliance—issued to

Foreign Mobile Offshore Drilling Units

engaged in Outer Continental Shelf

activities under 33 CFR 143.210.

* * * * *

6. A new Subpart 2.10 is added to

read as follows:

Subpart 2.10—Fees

Sec.

2.10–1 Applicability.

2.10–5 Exemptions.

2.10–10 Waivers.

2.10–20 General requirements.

2.10–25 Definitions.

2.10–101 Annual vessel inspection fee.

2.10–105 Prepayment of annual vessel

inspection fees.

2.10–115 Changes in vessel service.

2.10–120 Overseas inspection and

examination fees.

2.10–125 Fees for examination of foreign

tankships.

2.10–130 Fees for examination of foreign

mobile offshore drilling units.

2.10–135 Penalties.

Subpart 2.10—Fees

§ 2.10–1 Applicability.

(a) This subpart establishes vessel

inspection fees for all vessels required

to have a Certificate of Inspection and

vessel examination fees for all foreign

vessels required to have either a Letter

of Compliance or a Tank Vessel

Examination Letter.

(b) The fees in this subpart do not

apply to:

(1) Vessels being inspected for the

initial issuance of a Certificate of

Inspection;

(2) Foreign passenger vessels;

(3) Training vessels operated by State

maritime academies; and

(4) Public vessels of the United States,

except for Maritime Administration

vessels.

§ 2.10–5 Exemptions.

(a) Vessels owned or operated by an

organization which is charitable in

nature, not for profit, and youthoriented may be exempted from the fees

required by this subpart provided that

the vessels are used exclusively for

training youths in boating, seamanship,

and navigation skills.

(b) Vessel owners or operators must

submit a written request for exemption

to the Officer in Charge, Marine

Inspection of the Marine Inspection

Zone in which the vessel normally

operates. The exemption request must

provide the vessel name, the vessel

identification number, and evidence

that the organization and the vessel

meet the criteria set forth in paragraph

(a) of this section.

§ 2.10–10 Waivers.

The Commandant (G–MP) will waive

collection of vessel inspection fees in

this subpart for a Federally-owned or

operated vessel if the fee would be

directly paid by an agency acting as the

vessel owner using Federal appropriated

funds. By October 1 of each year,

Federal agencies shall provide

Commandant (G–MP) with a list of the

names and vessel identification

numbers of vessels for which a fee

waiver is requested.

§ 2.10–20 General requirements.

(a) Unless otherwise specified, vessel

owners must pay the fees required by

this subpart before inspection or

examination services are provided.

(b) Fees required by this subpart must

be paid in U.S. currency by check or

money order, drawn on a U.S. bank, and

made payable to the U.S. Treasury.

(c) All payments must be

accompanied by the vessel name and its

vessel identification number.

(d) Unless otherwise specified, fees

required by this subpart must be mailed

to the following address: USCG

Inspection Fees, PO Box 105663,

Atlanta, GA 30348–5663.

(e) For purposes of this subpart, the

address for Commandant (G–MP) is:

Commandant (G–MP), United States

Coast Guard, 2100 Second Street S.W.,

Washington, DC 20593–0001.

(f) Information concerning a vessel’s

user fee anniversary date may be

obtained from any Coast Guard Marine

Safety or Marine Inspection Office.

§ 2.10–25 Definitions.

The following definitions apply to

this subpart:

Drill ship MODU means a mobile

offshore drilling unit with a ship shape

displacement hull intended for

operation in the floating condition.

Freight barge means a non-selfpropelled vessel carrying freight for

hire.

Freight ship means a self-propelled

freight vessel.

Freight vessel means a motor vessel of

more than 15 gross tons that carries

freight for hire, except an oceanographic

research vessel or an offshore supply

vessel.
13564 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

Industrial vessel means a vessel

which, by reason of its special outfit,

purpose, design, or function engages in

certain industrial ventures. For the

purposes of this subpart, this

classification includes such vessels as

dredges, cable layers, derrick barges,

and construction and wrecking barges,

but does not include vessels which

carry passengers or freight for hire,

OSVs, oceanographic research vessels,

or vessels engaged in the fisheries.

Liquefied gas tankship means a selfpropelled vessel equipped with cargo

tanks primarily designed to carry

liquefied or compressed gases in bulk.

Mobile offshore drilling unit (MODU)

means a vessel capable of engaging in

drilling operations for the exploration or

exploitation of subsea resources that is:

seagoing and 300 or more gross tons and

self-propelled by machinery; Seagoing

and 100 or more gross tons and non-selfpropelled; or more than 65 feet in length

and propelled by steam.

Nautical school vessel means a vessel

operated by or in connection with a

nautical school or an educational

institution under section 13 of the Coast

Guard Authorization Act of 1986, Public

Law 99–640.

Oceanographic research vessel means

a vessel that is being employed only in

instruction in oceanography or

limnology, or both, or only in

oceanographic or limnological research,

including those studies about the sea

such as seismic, gravity meter, and

magnetic exploration and other marine

geophysical or geological surveys,

atmospheric research, and biological

research.

Offshore supply vessel means a motor

vessel that is of at least 15 gross tons

and less than 500 gross tons, and that

regularly carries goods, supplies,

individuals in addition to the crew, and

equipment in support of exploration,

exploitation, or production of offshore

mineral or energy resources.

Passenger barge means a non-selfpropelled passenger vessel, including a

prison barge or a barge which carries

occupied recreational vehicles.

Passenger ship means a self-propelled

passenger vessel.

Passenger vessel means a vessel of at

least 100 gross tons:

(1) Carrying more than 12 passengers,

including at least one passenger for hire;

(2) That is chartered and carrying

more than 12 passengers; or

(3) That is a submersible vessel

carrying at least one passenger for hire.

Sailing school vessel means a vessel

of less than 500 gross tons, carrying

more than 6 individuals who are sailing

school instructors or sailing school

students, principally equipped for

propulsion by sail even if the vessel has

an auxiliary means of propulsion, and

owned or demise chartered and

operated by a qualified organization

during such times as the vessel is

operated exclusively for the purposes of

sailing instruction.

Sea-going towing vessel means a seagoing commercial vessel engaged in or

intending to engage in the service of

pulling, pushing or hauling alongside,

or any combination of pulling, pushing

or hauling alongside.

Self-elevating MODU means a mobile

offshore drilling unit with movable legs

capable of raising its hull above the

surface of the sea.

Semi-submersible MODU means a

mobile offshore drilling unit with the

main deck connected to an underwater

hull by columns or caissons, that is

intended for drilling operations in the

floating condition.

Small passenger vessel means a vessel

of less than 100 gross tons:

(1) Carrying more than 6 passengers,

including at least one passenger for hire;

(2) That is chartered with the crew

provided or specified by the owner or

the owner’s representative and carrying

more than 6 passengers;

(3) That is chartered with no crew

provided or specified by the owner or

the owner’s representative and carrying

more than 12 passengers; or

(4) That is a submersible vessel

carrying at least one passenger for hire.

Submersible MODU means a mobile

offshore drilling unit intended for

drilling operations in the bottombearing condition, having the main deck

connected to an underwater hull or

pontoons by way of columns or

caissons.

Submersible vessel means a vessel

that is capable of operating below the

surface of the water.

Tank barge means any tank vessel not

equipped with means of propulsion.

Tank vessel means a vessel that is

constructed or adapted to carry, or that

carries, oil or hazardous material in bulk

as cargo or cargo residue.

Tankship means any tank vessel

propelled by power or sail, including an

integrated tug and barge designed to

operate together only in the pushing

mode.

User fee anniversary date means the

date on which a vessel’s annual

inspection fee is due each year. Once

established by the Coast Guard, a

vessel’s user fee anniversary date

remains fixed for as long as the vessel

remains in service.

Vessel identification number (VIN)

means a U.S. official number, a number

assigned by a State, a number assigned

by the Coast Guard, or a Lloyd’s Register

of Shipping identification number

issued to a U.S. or foreign commercial

vessel for purposes of vessel

identification. For U.S. vessels, VIN

means the number listed on the

Certificate of Inspection. For foreign

vessels, VIN means either the Lloyd’s

Register of Shipping identification

number or the number assigned by the

Coast Guard.

§ 2.10–101 Annual vessel inspection fee.

(a)(1) Unless otherwise provided by

this subpart, each vessel required to

have a Certificate of Inspection is

subject to the annual vessel inspection

fee listed in Table 2.10–101 for its vessel

category.

(2) A vessel certificated for more than

one service must pay only the higher of

the two applicable fees in Table 2.10–

101 of this section.

(b) The vessel owner or operator must

pay the annual vessel inspection fee

each year on or before the vessel’s user

fee anniversary date, unless the fee has

been prepaid under § 2.10–103 of this

subpart.

(c) Payment of the annual vessel

inspection fee entitles a vessel to all

inspection services related to

compliance with its Certificate of

Inspection, including but not limited to

the inspection for renewal of the

Certificate of Inspection, reinspections

(midperiod inspections), hull (drydock)

inspections, deficiency inspections,

damage surveys, repair and

modification inspections, change in

vessel service inspections, permit to

proceed inspections, drydock extension

inspections, and all inspections

required for the issuance of

international certificates.

(d) Entitlement to inspection services

for the current year remains with the

vessel if it is sold. The entitlement to

inspection services may not be

transferred to any other vessel.
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations 13565

TABLE 2.10–101.—ANNUAL VESSEL INSPECTION FEES FOR U.S. AND FOREIGN VESSELS REQUIRING A CERTIFICATE OF

INSPECTION

Any inspected vessel not listed in this table ........................................................................................................................................... $1,030

Freight Barges:

Length not greater than 150 feet ..................................................................................................................................................... 495

More than 150 feet but not more than 300 feet ............................................................................................................................... 610

More than 300 feet ........................................................................................................................................................................... 955

Freight Ships:

Length not greater than 100 feet ..................................................................................................................................................... 1,425

More than 100 feet but no more than 300 feet ................................................................................................................................ 1,870

More than 300 feet ........................................................................................................................................................................... 5,410

Industrial Vessels:

Length not greater than 200 feet ..................................................................................................................................................... 1,435

More than 200 feet ........................................................................................................................................................................... 2,550

Mobile Offshore Drilling Units (MODUs):

Drill ship MODUs .............................................................................................................................................................................. 6,710

Submersible MODUs ........................................................................................................................................................................ 4,695

Self-elevating MODUs ...................................................................................................................................................................... 4,695

Semi-submersible MODUs ............................................................................................................................................................... 8,050

Nautical School Vessels:

Length not greater than 100 feet ..................................................................................................................................................... 835

More than 100 feet but not more than 200 feet ............................................................................................................................... 1,450

More than 200 feet ........................................................................................................................................................................... 7,205

Oceanographic Research Vessels:

Length not greater than 170 feet ..................................................................................................................................................... 840

More than 170 feet but not more than 240 feet ............................................................................................................................... 1,980

More than 240 feet ........................................................................................................................................................................... 3,610

Offshore Supply Vessels:

Length not greater than 140 feet ..................................................................................................................................................... 1,135

More than 140 feet ........................................................................................................................................................................... 1,470

Offshore Supply Vessels: Alternate Reinspection Program *:

Length not greater than 140 feet ..................................................................................................................................................... 940

More than 140 feet ........................................................................................................................................................................... 1,260

Passenger Barges:

Less than 100 gross tons and:

Certified for fewer than 150 passengers ................................................................................................................................... 825

Certified for 150 or more passengers ....................................................................................................................................... 1,110

100 gross tons or more and:

Certified for fewer than 150 passengers ................................................................................................................................... 2,215

Certified for 150 or more passengers ....................................................................................................................................... 2,525

Passenger Ships:

Length not greater than 250 feet:

Certified for fewer than 150 passengers ................................................................................................................................... 3,600

Certified for 150 or more passengers ....................................................................................................................................... 4,050

More than 250 feet but not more than 350 feet ............................................................................................................................... 5,330

More than 350 feet but not more than 450 feet ............................................................................................................................... 6,835

More than 450 feet ........................................................................................................................................................................... 14,650

Sailing School Vessels:

Length not greater than 30 feet ....................................................................................................................................................... 530

More than 30 feet but not more than 65 feet ................................................................................................................................... 560

More than 65 feet ............................................................................................................................................................................. 980

Sea-going Towing Vessels ...................................................................................................................................................................... 2,915

Small Passenger Vessels:

DUKW vessels .................................................................................................................................................................................. 450

Hydrojet boats .................................................................................................................................................................................. 470

All other small passenger vessels:

Length not greater than 30 feet ................................................................................................................................................ 545

More than 30 feet but not more than 54 feet ........................................................................................................................... 670

More than 54 feet but not more than 65 feet ........................................................................................................................... 750

More than 65 feet but not more than 130 feet ......................................................................................................................... 975

More than 130 feet but not more than 160 feet:.

Certified for fewer than 150 passengers ........................................................................................................................... 1,215

Certified for 150 or more passengers ................................................................................................................................ 2,585

More than 160 feet .................................................................................................................................................................... 2,585

Tank Barges ............................................................................................................................................................................................ 500

Tankships:

Length not greater than 100 feet ..................................................................................................................................................... 1,295

More than 100 feet but not more than 300 feet ............................................................................................................................... 2,310

More than 300 feet ........................................................................................................................................................................... 5,805

Liquefied Gas Tankships ......................................................................................................................................................................... 12,120

* Note: Eligibility for the reduced annual vessel inspection fee for Offshore Supply Vessels is contingent upon the vessel’s continued acceptance in the alternative reinspection program

by the cognizant Officer in Charge, Marine Inspection.
13566 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Rules and Regulations

§ 2.10–105 Prepayment of annual vessel

inspection fees.

(a) Vessel owners may prepay the

annual vessel inspection fee for any

period of not less than three years, and

not more than the design life or

remaining expected service life of the

vessel.

(b) To prepay the annual vessel

inspection fee for a period of three or

more years, the owner must submit a

written request to Commandant (G–MP)

specifying the vessel identification

number and the period for which

prepayment is to be made.

(c) The total of the annual fees for the

requested prepayment period will be

discounted to its net present value using

the following formula:

PV

R

i

t

t

t

n

= +

= +

∑ 0

0

1

1

( )

( )

π

Where:

PV is the Present Value of the series of

annual user fees to be prepaid (the

net amount to be prepaid)

RO is the published user fee of the vessel

i is the interest rate for 10-year Treasury

notes at the time of prepayment

calculation

π is the rate of inflation (based on

projected military personnel costs

at the time of prepayment

calculation)

n is the total number of years to be

prepaid

t is the number of years after

prepayment of the fee, for each

annual increment (t=0, 1, 2, 3 ... n)

(d) When the annual vessel inspection

fee has been prepaid, the entitlement to

inspection services for the prepayment

period attaches to the vessel and

remains with the vessel if it is sold. The

entitlement to inspection services may

not be transferred to any other vessel.

(e) If a vessel is removed from Coast

Guard certification and the vessel owner

surrenders the vessel’s Certificate of

Inspection, the owner may request a

refund of the remaining prepayment

amount. The annual vessel inspection

fee will not be refunded for the year in

which the Certificate of Inspection is

surrendered. The request for refund

must be submitted to the Officer in

Charge, Marine Inspection to whom the

Certificate of Inspection is surrendered.

§ 2.10–115 Changes in vessel service.

(a) If a vessel certificated for a single

service changes service, the annual

vessel inspection fee is not adjusted

during the year in which a change in

service occurs. The annual vessel

inspection fee for the new vessel

category is payable on the vessel’s user

fee anniversary date immediately

following the date of the change in

service.

(b) If a change in service occurs and

the annual vessel inspection fee has

been prepaid, Commandant (G–MP) will

recalculate the prepayment amount

based on the new vessel category and

advise the owner of available

prepayment options.

§ 2.10–120 Overseas inspection and

examination fees.

(a) In addition to any other fee

required by this subpart, an overseas

inspection and examination fee of

$4,585 must be paid for each vessel

inspection and examination conducted

outside the United States and its

territories. This fee does not apply to

vessel inspections and examinations

conducted in Canada, Mexico, or the

British Virgin Islands.

(b) The overseas inspection and

examination fee for each vessel must

accompany each request to the

cognizant Officer in Charge, Marine

Inspection for an overseas inspection or

examination.

§ 2.10–125 Fees for examination of foreign

tankships.

Each foreign tankship of a country

party to the International Convention for

the Safety of Life at Sea, 1974 as

amended, must pay:

(a) For examination for the issuance of

a Letter of Compliance under § 2.01–

6(a)(2)(i) of this part, or examination for

the annual endorsement to a Letter of

Compliance, a fee of $1,100.

(b) For examination for the issuance

of a Tank Vessel Examination Letter

under § 2.01–6(a)(3) of this part, a fee of

$1,100.

§ 2.10–130 Fees for examination of foreign

mobile offshore drilling units.

Each foreign mobile offshore drilling

unit must pay:

(a) For examination for the issuance of

a Letter of Compliance indicating

compliance with the design and

equipment standards of either the

documenting nation or the International

Maritime Organization Code for

Construction and Equipment of Mobile

Offshore Drilling Units, a fee of $1,830.

(b) For examination for the issuance

of a Letter of Compliance indicating

compliance with the design and

equipment standards of 46 CFR part

108, the inspection fee listed in Table

2.10–101 of this subpart for the same

type of mobile offshore drilling unit.

§ 2.10–135 Penalties.

(a) A vessel owner or operator who

fails to pay a fee or charge established

under this subpart is liable to the United

States Government for a civil penalty of

not more than $5,000 for each violation.

(b) In addition to the fees established

in this subpart, the Coast Guard may

recover collection and enforcement

costs associated with delinquent

payments of, or failure to pay, a fee.

Coast Guard inspection and

examination services may also be

withheld pending payment of

outstanding fees owed to the Coast

Guard for inspection and examination

services provided.

(c) Each District Commander or

Officer in Charge Marine Inspection

may request the Secretary of the

Treasury, or the authorized

representative thereof, to withhold or

revoke the clearance required by 46

U.S.C. app. 91 of a vessel for which a

fee or charge established under this part

has not been paid or until a bond is

posted for the payment.

Dated: March 2, 1995.

A.E. Henn,

Vice Admiral, U.S. Coast Guard Acting

Commandant.

[FR Doc. 95–6034 Filed 3–10–95; 8:45 am]

BILLING CODE 4910–14–P