[Federal Register Volume 61, Number 109 (Wednesday, June 5, 1996)]
[Notices]
[Pages 28634-28636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14092]



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DEPARTMENT OF TRANSPORTATION
Maritime Administration
OMB No. 2133-0525


Public Comments on Extension of Information Collection

ACTION: Agency response and request for further comments.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (Pub. 
L. 104-13, as implemented by regulations at 5 CFR part 1320), this 
notice reviews comments in response to an earlier notice of the 
Maritime Administration's (MARAD) intention to request the Office of 
Management and Budget (OMB) for extension of approval of a currently 
approved information collection. Comments to OMB are invited on this 
request.

DATES: Comments should be submitted on or before July 5, 1996. Comments 
should be submitted to OMB as indicated below:

FOR FURTHER INFORMATION CONTACT:
James E. Caponiti, Associate Administrator for National Security, 
Maritime Administration, MAR-630, Room 7300, 400 Seventh Street, SW., 
Washington, DC 20590. Telephone 202-366-2323 or fax 202-493-2180. 
Copies of this collection can also be obtained from that office.

SUPPLEMENTARY INFORMATION: 

Background

    Currently, Title VI of the Merchant Marine Act, 1936, as amended 
(Act), 46 App. U.S.C. 1171 et seq., authorizes the Secretary of 
Transportation (Secretary) to provide operating-differential subsidy 
(ODS) to U.S.-flag ship operators for the operation of their vessels in 
essential services in the foreign commerce of the United States. 
Eligibility for the ODS program is limited to citizens of the United 
States, as defined in Section 2 of the Shipping Act, 1916, as amended, 
46 App. U.S.C. 802, and MARAD regulations at 46 CFR part 355. Section 
801 of the Act requires extensive recordkeeping for ODS contractors and 
related parties pursuant to MARAD regulations. In promulgating such 
regulations, MARAD created Form MA-172, which contains requests for 
specific information.
    The Maritime Security Program (MSP), contained in legislation 
currently pending in the Congress, H.R. 1350, the Maritime Security Act 
of 1995, will replace the current ODS program and provides financial 
assistance for U.S.-flag operators and vessels that meet certain 
qualifications. It will require the Secretary of Transportation to 
encourage the establishment of a fleet of active,

[[Page 28635]]

militarily useful, privately owned vessels to meet the national defense 
and other security requirements, while also maintaining a presence in 
international commercial shipping. Participation in the MSP will not be 
limited to Section 2 U.S. citizens.
    On March 7, 1996, MARAD published in the Federal Register a Notice 
and Request for Comments to MARAD on its request for extension of OMB 
approval of the information collection relating to applications to 
participate in the MSP pursuant to H.R. 1350 (OMB Control No. 2133-
0525), with a 60-day public comment period (61 FR 9223).

Description of Collection

    Title of Collection: Applications and Amendments for Participation 
under new Section 651 of Title VI, Subtitle B, Merchant Marine Act, 
1936, as amended, and amendments thereto.
    Type of Request: Extension of currently approved information 
collection.
    OMB Control Number: 2133-0525.
    Form Number: No form number is assigned to the application.
    Expiration Date of Approval: May 31, 1996.
    Summary of Collection of Information: The information collected 
includes an initial application for participation in the program as 
well as amendments of maritime security program operating agreements.
    Need and Use of the Information: When enacted, H.R. 1350 will amend 
Title VI of the Act and will require MARAD to accept applications for 
enrollment in a Maritime Security Fleet no later than 30 days after the 
date of enactment. Receipt of an application will indicate intent on 
the part of the applicant to enter its vessel(s) in the MSP. MARAD will 
analyze the information according to prescribed priorities and select 
vessels for participation in the program. Over the life of an agreement 
amendments may be necessary to include additional vessels and for 
changes to existing vessels or status of the applicant.
    Description of Respondents and Frequency of Collection: It is 
estimated that 10 carriers would submit one-time initial applications 
to participate in the program and it is estimated that five amendments 
would be required over a ten year period (average 0.5 per year) of an 
MSP operating agreement.
    Annual Responses: 10 one-time applications, 0.5 amendments.
    Annual Burden: 60 hours for one-time applications, 1 hour for 
amendments.
    Comments: Send all comments regarding this information collection 
to the Office of Information and Regulatory Affairs of OMB, Attention: 
Desk Officer for, Department of Transportation, Maritime 
Administration.

Discussion of Comments and Summary of Requirements in the Final 
Application and Rule

    This section includes a discussion of the significant issues raised 
by public comment and how they were addressed. One comment letter from 
a research and educational organization was received on the proposed 
application. The organization supported the proposed application, while 
disagreeing with certain components of the financial requirements 
section. On May 21, 1996, a meeting was held between the commentor and 
MARAD during which some of the comments were clarified.

Summary of Comments

1. Need for Financial Data and Expected Benefit

    Comment. The commentor stated that there was no practical need or 
policy basis for MARAD to require the extensive financial data required 
by the Form MA-172. The commentor noted that the MA-172 contained 29 
financial schedules and statements in addition to the 18 single spaced 
pages of financial requirements contained in MARAD's regulations at 46 
CFR part 232. The commentor noted that the Notice required information 
as it related to applications under the proposed statute and that the 
Notice stated that MARAD will analyze the information according to 
prescribed priorities to select vessels for participation in the 
program. The commentor believed that new Section 651(b) of the Act, 
``Vessel Eligibility,'' has a number of clear objective standards 
regarding vessel eligibility for the program, none of which require the 
type of information requested by MARAD in Form MA-172.
    Response. MARAD is not requiring the submission of Form MA-172. In 
the alternative, an applicant may submit an audited financial 
statement. The proposed submission of Form MA-172 (separate approval 
under OMB Control No. 2133-0005) is intended to (1) apply only to the 
applicant, not to any parent company, affiliate or subsidiary; and (2) 
simplify the process as most anticipated applicants have a current Form 
MA-172 on file with MARAD. The financial reporting burden would 
therefore be significantly reduced for a vast majority of the 
applicants.
    In connection with the Notice for Application to participate in the 
MSP, MARAD published a Notice and Request for Comments on changes to 
the Form MA-172. The commentor did not address the proposed changes 
contained in that Notice in their comment. The revised Form MA-172 has 
been reduced by 50 percent in an effort to lessen the burden on 
respondents. In response to the 18 pages of financial requirement of 
MARAD's regulations mentioned above, it was determined in the 
subsequent meeting that this was a misunderstanding between the agency 
and the commentor. The section on financial data submission states 
``For applicants which have not completed a Form MA-172 in conjunction 
with other MARAD assistance programs, complete that form as described 
at 46 CFR part 232.'' MARAD's intention is to give the respondents a 
format or guide to use (such as the one contained in its regulations at 
46 CFR part 232), and not to actually suggest adherence to the letter 
of part 232. The reference to part 232 has been removed and the section 
has been reworded to read: ``Applicant must submit an audited financial 
statement or have a Form MA-172 already on file with MARAD.''
    With respect to the selection criteria contained in new section 652 
of the Act, added by section 2 of H.R. 1350, MARAD believes it is 
within its administrative purview, and in the public interest, to 
consider the financial viability of a company prior to choosing it for 
participation in the program.

2. Authority To Collect Data

    Comment. The commentor stated that MARAD failed to identify that it 
did not have the authority to collect the information as section 801 of 
the Act is specifically exempted under new section 652(c) of the Act 
and therefore would not apply.
    Response. Section 801 of the Merchant Marine Act, 1936, as amended, 
applies to contracts executed by the Secretary of Transportation under 
Title VI or VII of the Act and therefore does not pertain specifically 
to application for such contracts. The pending legislation does not 
address information collection prior to the grant of MSP contracts. In 
the absence of specific direction from the Congress, it is appropriate 
for MARAD to exercise its discretion as to what information is 
necessary to process MSP applications, provided that it is not 
inconsistent with the express provisions of the legislation or with its 
legislative history. Since the proposed legislation is silent on the 
collection of information prior to the award of an MSP contract, MARAD, 
acting under general rulemaking authority for the Act derived from 
section 204(b) of the Act, 46 App. U.S.C. 1114, can collect appropriate 
information. MARAD believes it is good

[[Page 28636]]

administrative practice to require, at a minimum, the information 
requested as a condition for payment of financial assistance.

3. Subsidiaries and Affiliates

    Comment. The commentor stated MARAD lacked authority to obtain 
information concerning all contractors' parent companies, affiliates, 
and subsidiaries together with an indication of the business transacted 
by each.
    Response. In the meeting held between MARAD and the commentor, the 
issue was clarified and it was agreed that the request for information 
should be applicable only to parent companies, affiliates, and 
subsidiaries that are involved in the maritime industry for non-section 
2 citizen applicants. Section 2 citizen applicants will be required to 
provide information on affiliated relationships necessary to document 
status as a section 2 citizen.

4. Citizenship

    Comment. The commentor stated that, with respect to the extensive 
disclosure required with respect to stock ownership, shareholders, 
voting trusts and agreements whereby control of an applicant is in any 
way held or exercised by any person not the holder of legal title to 
such shares, it found the request to be too intrusive. The commentor 
suggested that MARAD on an ad hoc basis continue its practice of 
requiring citizenship affidavits from some applicants.
    Response. MARAD conceptually agrees with the commentor's suggestion 
and will require the submission of such extensive information only from 
those applicants requesting to apply as citizens of the United States. 
Other applicants need only prove lesser levels of citizenship.

5. Current or Anticipated Agreements

    Comment. The commentor stated that the requested information 
regarding current agreements with other carriers was already available 
and, with respect to anticipated agreements, that request was intrusive 
and unnecessary for the administration of the MSP.
    Response. During the meeting between MARAD and the commentor, the 
issue was clarified and it was agreed that current information on 
operations and agreements was needed to assist the agency in 
identifying potential sealift capacity available for use in accordance 
with an Emergency Preparedness Program. As a result, the section on 
agreements would read: ``Describe any current agreements and or 
relationships with other carriers.'' All reference to anticipated 
agreements will be deleted.

6. Certification of Citizenship

    Comment. The commentor stated that the application required the 
applicant to be a citizen of the United States within the meaning of 
Section 2, Shipping Act, 1916, as amended, and that requirement was 
wrong.
    Response. The requirement to certify Section 2 citizenship as part 
of the application was an error and has been corrected by adding a 
provision for applicants who are not applying as Section 2 citizens 
which reads: ``* * * or is eligible to document a vessel under 46 
U.S.C. 121 * * *''.

    Dated: May 30, 1996.

    By order of the Maritime Administrator.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 96-14092 Filed 6-4-96; 8:45 am]
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