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STATEMENT OF COMMISSIONER REBECCA DYE

REVISIONS TO THE COMMISSION’S PASSENGER VESSEL 

REGULATIONS

SEPTEMBER 8, 2011

• At our last meeting, I explained that my position 

on the need to increase the level of financial 

responsibility for passenger ship operators has 

not changed.

• I believe that the only really effective passenger 

indemnification requirement is based on the 

actual risk that a cruise ship passenger will not be 

reimbursed for cruise ship nonperformance.

• An effective regulatory system should also take 

into consideration all available sources of 

indemnification, and avoid the “one size fits all” 

approach. 
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MAJOR RULES

• I am disappointed to see that this proposed rule 

does not follow the principles of regulation 

contained in Executive Order 12866 and Office of 

Management and Budget Circular A-4, by 

identifying in writing the specific market failure 

or other specific problem that it intends to 

address, as well as assessing the significance of 

that problem, to determine whether any new 

regulation is warranted.

• Alternatives, risks, and cost-effectiveness are not 

identified and assessed in this proposal.

• In addition, under Executive Order 12866 and 

Public Law 104-121, agencies must identify which 

regulatory actions are “significant regulatory 

actions” or “major rules.”
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• The proposed rule contains a conclusion that this 

rule is not a “major rule.”

• However, this conclusion does not attempt to 

address the total annual effect on the economy 

of this proposed rule, as required by Chapter 8 of 

title 5, United States Code. 

REGULATORY FLEXIBILITY ACT 

• The draft proposed rule contains a certification 

by our Chairman under the Regulatory Flexibility 

Act that the draft rule will not have a “significant 

economic impact on a substantial number of 

small entities.”

• Section 605(b) of the Regulatory Flexibility Act 

requires that when agencies certify that 

proposed rules do not have a significant small 

business impact, the proposed rule must also 

contain a statement providing the factual basis 

for the certification. 
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• This certification is based on an FMC rebuttable 

presumption that passenger vessel operators are 

not small businesses.

• This presumption was not created by statute or 

Formal Rule, and yet, we assume that it provides 

us with an exemption from the Regulatory 

Flexibility Act for passenger vessel operators.

• I do not agree that this proposed rule will not 

have a significant economic impact on small 

businesses. Currently, 23 out of 39 passenger 

vessel operators in our financial responsibility 

program have unearned passenger revenues 

under the $15 cap. 

• Of course, just yesterday we received a copy of a 

letter to the Chairman from the Passenger 

Vessels Association clarifying the status of several 

passenger vessel operators as “small businesses.”
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• I appreciate the additional vessel cost 

information added to this proposed rule last 

night by the Chairman, but I believe we are still 

required to perform a complete Regulatory 

Flexibility Analysis to allow the public and the 

Small Business Administration to comment on its 

accuracy.

REDUCING REGULATORY BURDENS

• Our priority should be to reduce the regulatory 

burden and encourage additional job creation.

• In the maritime industry, unnecessary regulatory

compliance expenses discourage ship building 

and job creation.

• In 2009, cruise lines and their passengers 

generated nearly 314,000 American jobs, paying 

over $14 billion in wages and salaries.
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• I look forward to consideration of our analysis of 

our existing rules under the President’s Executive 

Order 13579 to determine which of our 

regulations may be revised to make the agency’s 

regulatory program more effective and less 

burdensome.

• Under the current economic conditions, I believe 

the Commission should suspend the 

consideration of additional economic regulatory 

requirements without considering every possible 

alternative.

• Our priority should be to reduce current 

regulatory burdens and create a business 

environment conducive to job creation.

Please note the original linked title, Commissioner Rebecca F. Dye Dissents on FMC Vote to Move 

Forward on Cruise Line Passenger Financial Protections and Rules for Service Contracts that Link Rates to 

Freight Indices, has been changed (11/03/11) to more accurately reflect Commissioner Brennan’s dissent 

only to the PVO matter.