Document ID: USCG-2012-0861-0005
Agency: uscg
Document Type: Rule
Title: FR:  Certificates Recognized Classification Societies May Issue: International Energy Efficiency Certificate (Federal Register Publication)
Posted Date: 2012-12-10T05:00Z

[Federal Register Volume 77, Number 237 (Monday, December 10, 2012)]
[Rules and Regulations]
[Pages 73334-73338]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29749]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 8

[Docket No. USCG-2012-0861]
RIN 1625-AB90

Adding International Energy Efficiency (IEE) Certificate to List 
of Certificates a Recognized Classification Society May Issue

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is amending its Vessel Inspection Alternatives 
regulations to add the International Energy Efficiency (IEE) 
Certificate to the list of certificates that a recognized 
classification society may issue on behalf of the Coast Guard. We are 
making this change because Annex VI of the International Convention for 
the Prevention of Pollution by Ships, 1973, as modified by the Protocol 
of 1978, has been amended to address energy efficiency for ships, and 
these amendments call for the issuance of IEE Certificates starting 
January 1, 2013. This rule will enable recognized classification 
societies to apply to the Coast Guard to issue IEE Certificates to 
vessel owners and help to ensure that the demand for IEE Certificates 
is met.

DATES: This final rule is effective January 9, 2013.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket USCG-2012-0861 and are available for inspection or 
copying at the Docket Management Facility (M-30), U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue SE.,

[[Page 73335]]

Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays. You may also find this docket on the Internet 
by going to http://www.regulations.gov, inserting USCG-2012-0861 in the 
Search box, and pressing Enter.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, 
call or email Mr. Wayne Lundy, Systems Engineering Division, Office of 
Design and Engineering Standards, Coast Guard; telephone 202-372-1379, 
email Wayne.M.Lundy@uscg.mil. If you have questions on viewing the 
docket, call Renee V. Wright, Program Manager, Docket Operations, 
telephone 202-366-9826.

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble

I. Abbreviations
II. Regulatory History
III. Basis and Purpose
IV. Background
V. Discussion of Comments and Changes
VI. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Abbreviations

ABS American Bureau of Shipping
APPS Act to Prevent Pollution from Ships
CFR Code of Federal Regulations
DHS Department of Homeland Security
EPA Environmental Protection Agency
FR Federal Register
IEE International Energy Efficiency
IMO International Maritime Organization
MARPOL Protocol International Convention for the Prevention of 
Pollution from Ships, 1973, as modified by the Protocol of 1978
MEPC Maritime Environment Protection Committee
NMFS National Marine Fisheries Service
NPRM Notice of Proposed Rulemaking
OMB Office of Management and Budget
Sec.  Section
U.S.C. United States Code

II. Regulatory History

    On October 2, 2012, we published a notice of proposed rulemaking 
(NPRM) entitled ``Adding International Energy Efficiency (IEE) 
Certificate to List of Certificates a Recognized Classification Society 
May Issue'' in the Federal Register (77 FR 60096). We received one 
written submission on the proposed rule. No public meeting was 
requested and none was held.

III. Basis and Purpose

    The Coast Guard is amending its Vessel Inspection Alternatives 
regulations to add the International Energy Efficiency (IEE) 
Certificate to the list of certificates that a recognized 
classification society may issue on behalf of the Coast Guard. We are 
making this change because Annex VI of the International Convention for 
the Prevention of Pollution by Ships, 1973 (MARPOL), as modified by the 
Protocol of 1978 (MARPOL Protocol), has been amended to address energy 
efficiency for ships, and these amendments call for the issuance of IEE 
Certificates starting January 1, 2013. This rule will enable recognized 
classification societies to apply to the Coast Guard to issue IEE 
Certificates to vessel owners and help to ensure that the demand for 
IEE Certificates is met.

IV. Background

    The Act to Prevent Pollution from Ships (APPS), 33 U.S.C. 1901 et 
seq., implements legislation for the International Convention for the 
Prevention of Pollution from Ships, 1973 as modified by the Protocol of 
1978 (MARPOL Protocol), which includes MARPOL Annex VI: Regulations for 
the Prevention of Air Pollution from Ships. See 33 U.S.C. 1901(a)(4) 
and (5). APPS directs the Secretary of Homeland Security to prescribe 
any necessary or desired regulations to carry out the provisions of the 
MARPOL Protocol, and it directs the Secretary to designate those 
persons authorized to issue MARPOL Protocol certificates on behalf of 
the United States. See 33 U.S.C. 1903(c) and 1904. This authority was 
delegated to the Coast Guard. See Department of Homeland Security 
Delegation No. 0170.1. As required by APPS, the Coast Guard has 
consulted with the U.S. Environmental Protection Agency (EPA) regarding 
this final rule.
    On July 15, 2011, in resolution MEPC.203(62), the International 
Maritime Organization's (IMO's) Marine Environment Protection Committee 
(MEPC) adopted amendments to MARPOL Annex VI. Those amendments, which 
were accepted July 1, 2012, and come into force January 1, 2013, 
contain energy efficiency provisions for new and existing ships. These 
amended regulations call for the issuance of an International Energy 
Efficiency (IEE) Certificate to document a ship's compliance with Annex 
VI's new Chapter 4, Regulations on Energy Efficiency for Ships. See 
amended Annex VI Regulations 5.4 and 6.4. Since the mid-1990s, under 
authority of 46 U.S.C. 3103, 3306, 3316, and 3703, and regulations in 
46 CFR part 8--Vessel Inspection Alternatives, the Coast Guard has 
authorized recognized classification societies to issue international 
certificates to vessels. The Coast Guard regularly adds to the list of 
international certificates that classification societies may apply to 
issue to vessels on the Coast Guard's behalf. This list is located in 
46 CFR 8.320(b). Recent additions to the list include the MARPOL 73/78 
International Air Pollution Prevention Certificate and the 
International Anti-Fouling System Certificate. See, respectively, 74 FR 
21554, May 8, 2009; and 76 FR 76896, December 9, 2011. The United 
States currently recognizes seven classification societies for purposes 
of issuing international certificates: The American Bureau of Shipping 
(ABS, United States); Det Norske Veritas (DNV, Norway); Lloyd's 
Register (LR, Great Britain); Germanischer Lloyd (GL, Germany); Bureau 
Veritas (BV, France); RINA S.p.A. (RINA, Italy), and ClassNK (NKK, 
Japan).
    Recognized classification societies assist the Coast Guard and help 
to ensure that U.S.-flagged ships that qualify for an international 
certificate are able to obtain it promptly. As we stated in 1996, to 
avoid a duplication of effort between the Coast Guard and 
classification societies that results in extra costs to U.S. vessel 
owners, it is more efficient to take full advantage of inspections done 
by classification societies:

    * * * Insurance companies require that, before a vessel is 
insured, it be classed. This means that a classification society 
must survey a vessel for compliance with its class rules. Class 
rules are rules developed by the particular classification society 
to cover design, construction and safety of vessels. To ensure 
compliance with these class rules and with international standards, 
classification societies perform surveys on vessels using qualified 
marine surveyors. Many of the items examined by the classification 
society surveyors are the same as those examined by Coast Guard 
marine inspectors in their inspections for certification.

61 FR 68510-11, December 27, 1996.

    Starting January 2013, U.S.-flagged ships that are 400 gross 
tonnage or more as measured under 46 U.S.C. 14302, Convention 
Measurement System, (hereafter 400 GT ITC or more) may be subject to 
detention or delay in foreign ports if they do not have an IEE 
certificate to document compliance with Annex VI. See amended Annex VI 
Regulation 19.
    Section 8.320 of 46 CFR allows the Coast Guard to delegate issuance 
of an international convention certificate to a

[[Page 73336]]

recognized classification society only if the certificate is listed in 
Sec.  8.320(b). The IEE Certificate is not currently listed in Sec.  
8.320(b).

V. Discussion of Comments and Changes

    As noted, we published an NPRM on October 2, 2012 (77 FR 60096). We 
received one written submission containing three comments. See docket 
USCG-2012-0861.
    First, the commenter recommended that the Coast Guard consult with 
the National Marine Fisheries Service (NMFS) within the Department of 
Commerce regarding this rulemaking, as we did with the EPA. She wrote 
that NMFS's expertise is valuable in determining whether adding the IEE 
Certificate is worth the additional administrative costs it will cause. 
In response to the first comment, the Coast Guard did contact NMFS and 
advised them of our rulemaking and this comment. The NMFS had no 
comments.
    Second, regarding the comment on the administrative cost of adding 
the International Energy Efficiency (IEE) Certificate, we note that 
APPS requires compliance with Annex VI, which now includes a new 
chapter, Chapter 4, with energy efficiency requirements for ships, and 
the IEE Certificate documents compliance with these Chapter 4 
requirements. See 33 U.S.C. 1907(a). Annex VI Regulation 6.5 directs 
that the IEE ``certificate shall be issued or endorsed either by the 
[United States] or any organization duly authorized by it.'' APPS 
directs the Secretary of Homeland Security to designate those persons 
authorized to issue MARPOL Protocol certificates on behalf of the 
United States and this final rule does that. See 33 U.S.C. 1904(a).
    Third, the commenter recommended that the United States consider 
creating its own energy efficiency certificate that has greater 
standards than the IEE Certificate, and that such a certificate could 
meet the standards of the IEE Certificate, and more. The commenter 
stated: ``This way other areas could require the IEE Certificate as a 
minimum baseline, while [a U.S.] energy efficiency certificate would 
not only meet the minimum baseline but also go beyond it.'' This third 
comment is beyond the scope of this rulemaking. This rulemaking is 
solely intended to identify who may issue a MARPOL Annex VI IEE 
certificate on behalf of the Coast Guard. We made no changes from the 
proposed rule based on any of these comments.
    In the NPRM, we proposed to insert a statement regarding preemption 
in Sec.  8.300, of part 8, subpart C, International Convention 
Certificate Issuance, and to rename that section heading ``Purpose and 
Preemption.'' See 77 FR 60098, 60100, October 2, 2012. After another 
review of Presidential Memorandum of May 20, 2009 titled ``Preemption'' 
(74 FR 24693, May 22, 2009) however, we have determined that we should 
not include our proposed changes to Sec.  8.300 in this final rule. As 
discussed in our preamble Federalism section, VI.E, below, States may 
not regulate in an area that is preempted by Federal statute. APPS is 
the source of preemption regarding the issuance of MARPOL certificates, 
not this regulatory action. Therefore, our only change to the CFR in 
this final rule is to add the IEE certificate to Sec.  8.320.

VI. Regulatory Analyses

    We developed this final rule after considering numerous statutes 
and executive orders related to rulemaking. Below we summarize our 
analyses based on these statutes or executive orders.

A. Regulatory Planning and Review

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') direct agencies 
to assess the costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. This final rule has not been designated a 
``significant regulatory action'' under section 3(f) of Executive Order 
12866. Accordingly, this final rule has not been reviewed by the Office 
of Management and Budget. A final regulatory assessment follows:
    Under the authority of 33 U.S.C. 1903, 1904, and 46 U.S.C. 3103, 
3306, 3316, and 3703, the Coast Guard is amending 46 CFR 8.320, to 
enable the Coast Guard to delegate the activity of issuing IEE 
Certificates to a recognized classification society that would act on 
behalf of the Coast Guard. The intent of this rule is to allow for the 
delegation of IEE Certification to recognized class societies and thus 
create options for industry in obtaining these certificates. This rule 
does not impose mandatory actions on the U.S. maritime industry.
    Although requesting the delegation of authority to conduct IEE 
surveys, inspections, and certifications is voluntary, classification 
societies may incur minor costs associated with this process. The Coast 
Guard may incur costs associated with the evaluation of these requests 
and the issuance of delegations of authority to recognized 
classification societies.
    The Coast Guard estimates that this rule would potentially affect 
seven classification societies that may request a delegation of 
authority to issue IEE Certificates. The Coast Guard used an Office of 
Management and Budget (OMB)-approved collection of information (1625-
0041) to estimate the costs and burden.
    The Coast Guard estimates that it will take classification society 
employees 5.25 hours to review the rulemaking requirements and prepare 
the delegation request, at an average one-time cost of $428.75 per 
classification society (3.5 hours at $112 per hour \1\ for a director 
and 1.75 hours at $21 per hour for an administrative assistant). The 
total one-time cost for all seven classification societies is estimated 
to be $3,000 (rounded).
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    \1\ All hourly wages shown are ``fully loaded'' wages. Fully 
loaded wages include the costs of employer paid benefits such as 
health insurance.
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    In addition, the Coast Guard estimates that it will incur a one-
time cost to review and approve the requests for delegation. Based on 
the OMB-approved collections of information discussed above, the Coast 
Guard estimates that it will take about 5 hours to review, approve, and 
issue an order to delegate authority, at an average cost of $360 per 
event (3.5 hours for reviewing/approving and 1.5 hours for issuing at 
$72 per hour for a lieutenant (O-3)). The Coast Guard estimates a total 
one-time Government cost of $2,500 (rounded) based on OMB-approved 
collection of information estimates.
    The Coast Guard estimates the total one-time cost of this rule for 
classification societies and the Government combined to be 
approximately $5,500 (non-discounted) for classification societies and 
the Government combined.
    This rule may result in several benefits to the U.S. maritime 
industry. First, it may result in a reduction of potential wait time 
for IEE certificates. In the absence of delegation of authority to 
classification societies, vessel owners and operators may experience 
delays while the Coast Guard processes and issues IEE Certificates. The 
Coast Guard also might have to redirect resources that could be used 
for other missions, resulting in a less efficient use of Government 
resources. Finally, this rule may mitigate potential consequences to

[[Page 73337]]

U.S.-flagged vessels due to non-compliance with the Convention, 
including costly vessel detentions in foreign ports.

B. Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this rule would have a significant economic impact 
on a substantial number of small entities. The term ``small entities'' 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000.
    Affected classification societies are classified under one of the 
following North American Industry Classification System codes for water 
transportation: 488330--Navigational Services to Shipping, 488390--
Other Support Activities for Water Transportation, or 541611--
Administrative Management and General Management Consulting Services.
    The only predominate U.S. classification society is the American 
Bureau of Shipping (ABS). ABS is a privately owned non-profit 
organization that is dominant in its field (Source: 2011 Hoovers, 
http://www.hoovers.com/company/American Bureau of Shipping Inc/rfsksji-
1.html). Based on publicly available information, ABS has more than 
3,000 employees and annual revenues of more than $800 million.\2\ We do 
not consider ABS to be a small entity using the Small Business Act 
definitions of a small entity.
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    \2\ Source: 2011 Bloomberg, http://investing.businessweek.com/research/stocks/private/person.asp?personId=28915205&privcapId=4217113&previousCapId=764755&previous Title=ABS%20Group%20of%20Companies,%20Inc.
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    The Coast Guard expects that this rule will not have a significant 
economic impact on a substantial number of small entities. As described 
in section VI.A. of this preamble, ``Regulatory Planning and Review,'' 
the anticipated cost of this proposed rule, per class society, would be 
less than $500. This rule is not mandatory, and classification 
societies, regardless of size, would choose to participate only if the 
benefits are greater than the costs.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that 
this final rule will not have a significant economic impact on a 
substantial number of small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small 
entities in understanding this rule so that they can better evaluate 
its effects on them and participate in the rulemaking. If this rule 
would affect your small business, organization, or governmental 
jurisdiction and you have questions concerning its provisions or 
options for compliance, please consult Mr. Wayne Lundy, Systems 
Engineering Division, Coast Guard, telephone 202-372-1379 or email 
Wayne.M.Lundy@uscg.mil. The Coast Guard will not retaliate against 
small entities that question or complain about this rule or any policy 
or action of the Coast Guard.

D. Collection of Information

    This rule calls for no new collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) because the Coast 
Guard expects that the number of applications would be fewer than 10 in 
any given year.

E. Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. We have analyzed this rule under that Order and have 
determined that it does not have implications for federalism.
    As noted above, APPS implements the MARPOL Protocol. APPS also 
directs the Secretary to ``designate those persons authorized to issue 
on behalf of the United States the certificates required by the MARPOL 
Protocol.'' See 33 U.S.C. 1904. By enacting this specific provision, it 
was the intent of Congress to give the Coast Guard, as delegated by the 
Secretary, the exclusive authority to regulate within this field.
    A State may not regulate in an area such as this one which is field 
preempted by Federal statute. Because the exclusive authority to issue 
certificates under APPS was given to the DHS Secretary by law, and 
further delegated to the Coast Guard, this rule does not substantially 
affect the States, the relationship between the national government and 
the States, or the distribution of power and responsibilities among the 
various levels of government. Therefore, we have determined that this 
rule does not have implications for federalism because the States are 
preempted from issuing certificates evincing compliance with APPS.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or Tribal government, in 
the aggregate, or by the private sector of $100,000,000 (adjusted for 
inflation) or more in any one year. Though this rule would not result 
in such expenditure, we do discuss the effects of this rule elsewhere 
in this preamble.

G. Taking of Private Property

    This rule will not cause a taking of private property or otherwise 
have taking implications under Executive Order 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights.

H. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

I. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection 
of Children from Environmental Health Risks and Safety Risks. This rule 
is not an economically significant rule and does not create an 
environmental risk to health or a risk to safety that might 
disproportionately affect children.

J. Indian Tribal Governments

    This rule does not have Tribal implications under Executive Order 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it does not have a substantial direct effect on one or more 
Tribal governments, on the relationship between the Federal Government 
and Tribal governments, or on the distribution of power and 
responsibilities between the Federal Government and Tribal governments.

K. Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under Executive Order 12866, supplemented by 
Executive Order 13563, and is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. The Administrator 
of the Office of

[[Page 73338]]

Information and Regulatory Affairs has not designated it as a 
significant energy action. Therefore, it does not require a Statement 
of Energy Effects under Executive Order 13211.

L. Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the OMB, with an explanation of why using these standards would 
be inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., specifications of 
materials, performance, design, or operation; test methods; sampling 
procedures; and related management systems practices) that are 
developed or adopted by voluntary consensus standards bodies.
    This rule does not use technical standards. Therefore, we did not 
consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this rule under Department of Homeland Security 
Management Directive 023-01 and Commandant Instruction M16475.lD, which 
guide the Coast Guard in complying with the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have concluded that this 
action is one of a category of actions that do not individually or 
cumulatively have a significant effect on the human environment. This 
rule is categorically excluded under section 2.B.2, figure 2-1, 
paragraphs (34)(b) and (d), of the Instruction, and under section 6(b) 
of the ``Appendix to National Environmental Policy Act: Coast Guard 
Procedures for Categorical Exclusions, Notice of Final Agency Policy'' 
(67 FR 48243, July 23, 2002). This rule involves the delegation of 
authority, the inspection and documentation of vessels, and 
congressionally-mandated regulations designed to improve or protect the 
environment. An environmental analysis checklist and a categorical 
exclusion determination are available in the docket where indicated 
under ADDRESSES.

List of Subjects in 46 CFR Part 8

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

    For the reasons discussed in the preamble, the Coast Guard amends 
46 CFR part 8 as follows:

PART 8--VESSEL INSPECTION ALTERNATIVES

0
1. The authority citation for part 8 is revised to read as follows:

    Authority: 33 U.S.C. 1903, 1904, 3803 and 3821; 46 U.S.C. 3103, 
3306, 3316, and 3703; Department of Homeland Security Delegation No. 
0170.1 and Aug. 8, 2011 Delegation of Authority, Anti-Fouling 
Systems.

0
2. Amend Sec.  8.320 as follows:
0
a. In paragraph (b)(12), remove the word ``and'';
0
b. In paragraph (b)(13), remove the period at the end of the sentence 
and add, in its place, the text ``; and''; and
0
c. Add paragraph (b)(14) to read as follows:

Sec.  8.320  Classification society authorization to issue 
international certificates.

* * * * *
    (b) * * *
    (14) MARPOL 73/78 International Energy Efficiency Certificate.
* * * * *

    Dated: December 5, 2012.
J.G. Lantz,
Director of Commercial Regulations and Standards, U.S. Coast Guard.
[FR Doc. 2012-29749 Filed 12-7-12; 8:45 am]
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