        DEPARTMENT OF TRANSPORTATION
        Coast Guard
        46 CFR Part 67
        [USCG 2001-8825]
        RIN 2115-AG08
        Vessel Documentation: Lease-Financing for Vessels Engaged in the Coastwise Trade

          AGENCY:
          Coast Guard, DOT.

          ACTION:
          Notice of proposed rulemaking.

          SUMMARY:
          The Coast Guard proposes to amend its regulations on the documentation of vessels engaged in the coastwise trade. These proposals address statutory amendments eliminating certain barriers to seeking foreign financing by lease for U.S.-flag vessels. These proposals would clarify the information needed to determine the eligibility of a vessel financed in this manner for a coastwise endorsement.

          DATES:
          Comments and related material must reach the Docket Management Facility on or before July 2, 2001.
          Comments sent to the Office of Management and Budget (OMB) on collection of information must reach OMB on or before July 2, 2001.

          ADDRESSES:
          To make sure your comments and related material are not entered more than once in the docket, please submit them by only one of the following means:
          (1) By mail to the Docket Management Facility (USCG-2001-8825), U.S. Department of Transportation, room PL-401, 400 Seventh Street SW., Washington, DC 20590-0001.
          (2) By delivery to room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329.
          (3) By fax to the Docket Management Facility at 202-493-2251.

          (4) Electronically through the Web Site for the Docket Management System at http://dms.dot.gov.

          You must also mail comments on collection of information to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, ATTN: Desk Officer, U.S. Coast Guard.

          The Docket Management Facility maintains the public docket for this rulemaking. Comments and material received from the public, as well as documents mentioned in this preamble as being available in the docket, will become part of this docket and will be available for inspection or copying at room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also find this docket on the Internet at http://dms.dot.gov.

          FOR FURTHER INFORMATION CONTACT:
          If you have questions on this proposed rule, call Patricia Williams, Deputy Director, National Vessel Documentation Center, Coast Guard, telephone 304-271-2506. If you have questions on viewing or submitting material to the docket, call Dorothy Beard, Chief, Dockets, Department of Transportation, telephone 202-366-9329.

        SUPPLEMENTARY INFORMATION:
        Request for Comments

        We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking (USCG-2001-8825) indicate the specific section of this document to which each comment applies, and give the reason for each comment. You may submit your comments and material by mail, hand delivery, fax, or electronic means to the Docket Management Facility at the address under ADDRESSES; but please submit your comments and material by only one means. If you submit them by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.
        Public Meeting

        We do not now plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register.

        Background and Purpose
        In 1996, Congress amended the vessel documentation laws to promote lease financing of vessels engaged in the coastwise trade (section 1113(d) of Public Law 104-324, the Coast Guard Authorization Act of 1996) (“the 1996 Act”) (46 U.S.C. 12106(e)). Lease financing has become a very common way to finance capital assets in the maritime industry. Under lease financing, ownership of the vessel is in the name of the lessor, with a demise charter to the charterer of the vessel. (A demise or bareboat charter is an agreement in which the charterer assumes the responsibility for operating, crewing, and maintaining the vessel as if the charterer owned it.) Many vessel operators choose to acquire or build vessels through lease financing, instead of the traditional mortgage financing, because of possible cost benefits. But, until the 1996 Act, operators were prevented from obtaining this financing from U.S. companies that are less than 75 per cent U.S. owned because the leasing company had to be a U.S. citizen under section 2 of the Shipping Act, 1916, (46 U.S.C. app. 802), which requires at least 75 per cent U.S. ownership. This situation severely restricted the source of available capital.
        Under section 1113(d) of the 1996 Act, Congress eliminated this technical impediment to vessel financing by adding a new paragraph (e) to 46 U.S.C. 12106. Under 46 U.S.C. 12106(e), Congress authorized the Secretary of Transportation (since delegated to the Commandant of the Coast Guard) to issue coastwise endorsements if (1) the vessel is eligible for documentation; (2) the owner, a parent entity of the owner, or subsidiary of a parent of the owner is primarily engaged in leasing or other financing transactions; (3) the vessel is under a demise charter to a person certifying that the person is a U.S. citizen for engaging in coastwise trade under section 2 of the Shipping Act, 1916; and (4) the demise charter is for at least 3 years.
        According to the legislative history for the 1996 Act (see House Conference Report No. 104-854; Public Law 104-324, 1996 U.S. Code Congressional and Administrative News, p. 4323), Congress intended to broaden the sources of capital for owners of U.S. vessels engaged in the coastwise trade by creating new lease-financing options. At the same time, Congress did not intend to undermine the basic principle of U.S. maritime law that vessels operated in domestic trades must be built in shipyards in the U.S. and be operated and controlled by U.S. citizens, which is vital to U.S. military and economic security. In that report, Congress directed the Coast Guard to establish the necessary regulations to administer 46 U.S.C. 12106(e), including the filing of demise charters for vessels issued a coastwise endorsement under that provision.
        The Coast Guard's National Vessel Documentation Center (NVDC) has received requests by owners and prospective owners of U.S. vessels wanting to avail themselves of the lease-finance provisions under 46 U.S.C. 12106(e). The NVDC began implementing the new statutory provisions on a case-by-case basis. Initially, the NVDC based its determinations of eligibility for a coastwise endorsement on (1) a letter submitted by the owner or owner's attorney explaining the nature of the business relationship and how that relationship satisfied the statutory provisions and (2) a copy of the demise charter. However, it became clear to the NVDC that verification of the lease-finance arrangement and, specifically, of whether the leasing entity was “primarily engaged in leasing or other financing transactions,” could not be readily ascertained. The NVDC concluded that the term “leasing or other financing transactions” in 46 U.S.C. 12106(e) was ambiguous.
        To assist in clarifying the phrase “leasing or other financing transactions,” the NVDC looked to the Conference Report. On page 4326, the report states: “Section 1113(d) of the Conference substitute adds a new subsection (e) to section 12106 which would permit a coastwise endorsement for non-U.S. citizen vessel ownership where (1) ownership is primarily a financial investment in the vessel without the ability and intent to control the vessel's operations by a person not primarily engaged in the direct operation or management of vessels and (2) where the owner has transferred to a qualified American citizen full possession, control and command of the U.S. built vessel in a demise charter and the demise charterer is considered the owner pro hac vice during the charter term. It is intended that banks, leasing companies, or other financial institutions qualify as owners of U.S. flag-vessels under this section even if they have a vessel owning and operating affiliate so long as the majority of the aggregate revenues of any such group are not derived from the operation or management of vessels by group members.”
        In light of the Conference Report, the NVDC began requiring additional evidence that the arrangement, and all parties to it, meet the statutory requirements as envisioned by Congress. Specifically, the NVDC began requiring certifications, in the form of affidavits, and supporting documentation verifying the following:
        (1) That the entity owning the vessel and seeking the coastwise endorsement is a bank, leasing company, or other financial entity organized under the laws of the United States or a State.
        (2) That ownership of the vessel is primarily a financial investment without the ability and intent to control the vessel's operations by an entity not primarily engaged in the direct operation or management of vessels.
        (3) That the owner will transfer, to a qualified U.S. citizen under 46 U.S.C. app. 802, full possession, control, and command of a U.S.-built vessel through a demise charter for a period of at least 3 years. The owner must verify that, for the purposes of the charter, the demise charterer is considered the owner during the term of the charter. The owner also must submit, to the NVDC, a copy of the charter.
        (4) That the majority of the aggregate revenues of the entity, the parent entity, or a subsidiary of the parent entity is not derived from the operation or management of vessels.
        (5) That the entity is not primarily engaged in the operation or management of commercial foreign-flag vessels used for the carriage of cargo unrelated to the vessel's owner or charterer.
        During the year 2000, at least 15 business entities applied for a coastwise endorsement under the lease-finance provisions. Only one business entity has not been able to certify that they meet the above requirements.
        Discussion of the Proposed Regulations
        This rulemaking is intended to implement 46 U.S.C. 12106(e) on lease-financing. The proposed regulations are based on the current practice of the NVDC, as described above.
        In § 67.3, Definitions, the definition of “person” would be revised and the definitions of new terms used in these amendments (“parent,” “primarily engaged in leasing or other financing transactions,” and “subsidiary”) would be added.
        Proposed § 67.20 is new and would set out the requirements for qualifying for a coastwise endorsement under lease-financing.
        Proposed § 67.147 is new and would list the items, in addition to those in § 67.141, that are needed to apply for a coastwise endorsement involving lease-financing.

        Section 67.167, Requirement for exchange of Certificate of Documentation, would be revised to identify when a Certificate of Documentation with a coastwise endorsement under lease-financing would become invalid.
        Proposed § 67.179 is new and would apply to barges in the coastwise trade, which are exempt, under § 67.9(c), from the requirement that they be documented with a coastwise endorsement. The purpose for this requirement is to allow barges that can qualify to operate under lease-financing to do so without documentation so that they are on the same footing with other coastwise barges. This would reduce a potential burden, because there would be no need to obtain documents for barges at a cost of $113 or more per vessel, plus the cost of preparing the applications for documents.
        We ask for your comments on these proposals and specifically on implementing the phrase “leasing or other financing transactions” in proposed § 67.20(a)(2) and 46 U.S.C. 12106(e)(1)(B).
        Regulatory Evaluation

        This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, l979). A draft Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is available in the docket as indicated under ADDRESSES.
        This proposed rule, in §§ 67.147 and 67.179, would require vessel and barge owners and charterers opting to take advantage of the lease-financing provisions in 46 U.S.C. 12106(e) to submit certain documents to the NVDC. According to Coast Guard's data, there are 87 business entities that have applied under the lease-finance provisions since the passage of the 1996 Act. Therefore, we estimate that the number of entities opting to do the same in the future will be approximately 30 annually.
        There are no mandatory costs associated with this rulemaking. The cost imposed on those who choose to take advantage of lease-financing would include the cost of preparing and submitting the required documents. Those costs would vary from applicant to applicant and would probably be the same both for vessels under proposed § 67.147 and barges under proposed § 67.179. For further information on those costs, see the section on “Collection of Information” in this preamble.
        Small Entities
        Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this proposed 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.
        The proposed rule would affect vessel owners and charterers who choose to take advantage of the lease-financing option. This option reduces the burden on owners by allowing them to have access to the cheapest financing available anywhere in the world. Under the proposed rule, to take advantage of the lease-financing option, the vessel owner and charterer must submit affidavits and a copy of their demise charter to the NVDC. The estimated cost of preparing and submitting this material would be minimal and is discussed further under “Collection of Information” in this preamble. Companies would tend to choose lease-financing only if they expect its costs to be offset by increased profits.

        Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment to the Docket Management Facility at the address under ADDRESSES. In your comment, explain why you think it qualifies and how and to what degree this rule would economically affect it.
        Assistance for Small Entities
        Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult Patricia Williams, Deputy Director, National Vessel Documentation Center (NVDC), Coast Guard, telephone 304-271-2506.
        Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
        Collection of Information
        This proposed rule would call for a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5 CFR 1320.3(c), “collection of information” comprises reporting, recordkeeping, monitoring, posting, labeling, and other, similar actions. The title and description of the information collections, a description of those who must collect the information, and an estimate of the total annual burden follow. The estimate covers the time for reviewing instructions, searching existing sources of data, gathering and maintaining the data needed, and completing and reviewing the collection. This estimate applies to the documents to be submitted under proposed §§ 67.147 and 67.179. This collection would be added to the burden estimate under OMB Control Number OMB 2115-0110.

          Title: Vessel Documentation: Lease-Financing for Vessels Engaged in the Coastwise Trade.

          Summary of the Collection of Information: This proposed rulemaking would add new collection-of-information requirements, in proposed §§ 67.147 and 67.179, for vessel owners and charterers applying to engage in the coastwise trade under the lease-financing provisions of 46 U.S.C. 12106(e). These new requirements would require a change in previously approved OMB Collection 2115-0110.

          Need for Information: The Coast Guard needs this information to determine whether an entity meets the statutory requirements.

          Proposed Use of Information: The Coast Guard would use this information to determine whether an entity meets the statutory requirements.

          Number of Respondents: Approximately, 30 entities a year, including charter amendments and sub-charters.

          Frequency of Response: Whenever an entity seeks to qualify to engage in the coastwise trade under 46 U.S.C. 12106(e), a qualified entity amends the charter, or the demise charterer sub-charters the vessel by demise charter.

          Burden of Response: The burden resulting from this proposed rule would arise from the requirements in proposed §§ 67.147 and 67.179 that affidavits be prepared and submitted, along with a copy of the demise charter, to the NVDC. We estimate that it would take a total of 12 hours to prepare the affidavits and make the submissions. As for the per-hour cost to accomplish this administrative task, we estimate that it could be as low as $67 per hour. However, most, if not all, of the applicants so far, chose to use law firms to accomplish these tasks, even though the proposed rule would not require their use. Hourly cost for legal assistance could be substantially higher. To align our estimates more closely with industry practice, we used $167 per hour for a total of $2004 per application.

          Estimate of Total Annual Burden: The total annual hour burden for industry is 12 hours per application × $167 per hour (the higher of the two figures discussed above) × 30 applications per year for a total of $60,120 per year.
        As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we have submitted a copy of this proposed rule to the Office of Management and Budget (OMB) for its review of the collection of information.
        We ask for public comment on the proposed collection of information to help us determine how useful the information is; whether it can help us perform our functions better; whether it is readily available elsewhere; how accurate our estimate of the burden of collection is; how valid our methods for determining burden are; how we can improve the quality, usefulness, and clarity of the information; and how we can minimize the burden of collection.

        If you submit comments on the collection of information, submit them both to OMB and to the Docket Management Facility where indicated under ADDRESSES, by the date under DATES.

        You need not respond to a collection of information unless it displays a currently valid control number from OMB. Before the requirements for this collection of information become effective, we will publish notice in the Federal Register of OMB's decision to approve, modify, or disapprove the collection.
        Federalism
        We have analyzed this proposed rule under Executive Order 13132 and have determined that it does not have implications for federalism under that order.
        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 regulatory actions not specifically required by law. 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 or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
        Taking of Private Property
        This proposed rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
        Civil Justice Reform
        This proposed 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.
        Protection of Children
        We have analyzed this proposed 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 concern an environmental risk to health or risk to safety that may disproportionately affect children.
        Environment

        We have considered the environmental impact of this proposed rule and concluded that, under figure 2-1, paragraph (34)(d), of Commandant Instruction M16475.lC, this rule is categorically excluded from further environmental documentation. This proposed rulemaking is administrative in nature and identifies the information necessary to apply for a coastwise endorsement under 46 U.S.C. 12106(e). A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

          List of Subjects in 46 CFR Part 67
          Reporting and recordkeeping requirements, Vessels.

        For the reasons discussed in the preamble, the Coast Guard proposes to amend 46 CFR part 67 as follows:

          PART 67—DOCUMENTATION OF VESSELS
          1. The authority citation for part 67 continues to read as follows:

            Authority:
            14 U.S.C. 664; 31 U.S.C. 9701; 42 U.S.C. 9118; 46 U.S.C. 2103, 2107, 2110, 12106, 12120, 12122; 46 U.S.C. app. 841a, 876; 49 CFR 1.45, 1.46.

          2. In § 67.3, revise the definition for the term “person;” and add, in alphabetical order, definitions for the terms “entity,” “parent,” “primarily engaged in leasing or financing,” and “subsidiary” to read as follows:

            § 67.3
            Definitions.

              Entity means a corporation; partnership; limited liability partnership; limited liability company; association; joint venture; trust arrangement; and the government of the United States, a State, or a political subdivision of the United States or a State; and includes a trustee, beneficiary, receiver, or similar representative of any of them.

              Parent means a person that owns or controls more than 50 per cent of another entity.

              Person means an individual or an entity.

              Primarily engaged in leasing or other financing transactions means that more than 50% of the aggregate revenue of an entity is derived from banking or similar financial transactions.

              Subsidiary means any entity more than 50 per cent of which is directly or indirectly owned or controlled by another person.

            3. Add § 67.20 to read as follows:

            § 67.20
            Coastwise endorsement for a vessel that is owned by a lease-financing company and is under a demise charter.
            (a) A vessel under a demise charter that is eligible for a coastwise endorsement under 46 U.S.C. 12106(e) may receive that endorsement if it meets the following:
            (1) The vessel is eligible for documentation under 46 U.S.C. 12102.
            (2) The vessel is considered built in the United States under § 67.97 and has not lost coastwise privileges under § 67.19(d).
            (3) The entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is primarily engaged in leasing or other financing transactions and not in vessel operations or management.

            (4) The majority of the aggregate revenues of the entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is not derived from the operation or management of one or more vessels.
            (5) The entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is not primarily engaged in the operation or management of commercial, foreign-flag vessels used for the carriage of cargo for parties unrelated to the vessel's owner or charterer.
            (6) The vessel is under a demise charter to a person that certifies to the Director, National Vessel Documentation Center, that the person is a citizen of the United States for engaging in the coastwise trade under 46 U.S.C. app. 802.
            (7) The demise charter is for a period of at least 3 years, unless a shorter period is authorized by the Director, National Vessel Documentation Center, under circumstances such as—
            (i) When the vessel's remaining life would not support a charter of 3 years; or
            (ii) To preserve the use or possession of the vessel.
            (b) To apply for a coastwise endorsement for a vessel under a demise charter, see § 67.147.

            § 67.35
            [Amended]
            4. In § 67.35, at the end of paragraph (c), add the words “or the vessel qualifies under § 67.20”.
            5. In § 67.36, revise paragraphs (c)(1) and (c)(2) to read as follows:

            § 67.36
            Trust.

            (c) * * *
            (1) It meets the requirements of paragraph (a) of this section and at least 75 per cent of the equity interest in the trust is owned by citizens; or
            (2) It meets the requirements of § 67.20.
            6. In § 67.39, revise paragraphs (c)(1) and (c)(2) to read as follows:

            § 67.39
            Corporation.

            (c) * * *
            (1) It meets the requirements of paragraph (a) of this section and at least 75 per cent of the stock interest in the corporation is owned by citizens; or
            (2) It meets the requirements of § 67.20.

            7. Add § 67.147 to read as follows:

            § 67.147
            Application procedure: Coastwise endorsement for a vessel that is owned by a lease-financing company and is under a demise charter.
            (a) In addition to the items under § 67.141, the entity owning the vessel (other than a barge under § 67.179) and seeking a coastwise endorsement under § 67.20 must submit the following to the National Vessel Documentation Center:
            (1) A certification, in the form of an affidavit, and supporting documentation from an officer of the entity owning the vessel certifying the following:
            (i) That the entity owning the vessel is a bank, leasing company, or other financial entity organized under the laws of the United States or a State.
            (ii) That ownership of the vessel is primarily a financial investment without the ability and intent to control the vessel's operations and that the entity owning the vessel is not primarily engaged in the direct operation or management of the vessel.

            (iii) That the entity owning the vessel will transfer to a qualified United States citizen under 46 U.S.C. app. 802 the full possession, control, and command of the vessel through a demise charter for a period of at least 3 years, unless a shorter period is authorized under § 67.20(a)(7). The certification must include a statement that the charterer will be deemed to be the owner pro hac vice for the term of the charter.
            (iv) That the majority of the aggregate revenues of the entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is not derived from the operation or management of one or more vessels.
            (v) That the entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is not primarily engaged in the operation or management of commercial, foreign-flag vessels used for the carriage of cargo unrelated to the vessel's owner or charterer.

            (2) A copy of the charter, which must provide that the charterer is deemed to be the owner pro hac vice for the term of the charter.
            (b) The charterer of a vessel under paragraph (a) of this section must provide detailed citizenship information in the format of form CG-1258, Application for Documentation, section G, citizenship. The citizenship information may be attached to the form CG-1258 that is submitted under § 67.141 and must be signed by, or on behalf of, the charterer.
            (c) Whenever a charter under paragraph (a) of this section is amended, the vessel owner must file a copy of the amendment with the Director, National Vessel Documentation Center, within 10 days after the effective date of the amendment.
            (d) Whenever the charterer of a vessel under paragraph (a) of this section demise charters the vessel to a sub-charterer—
            (1) The charterer must file a copy of the sub-charter with the Director, National Vessel Documentation Center, within 10 days after the effective date of the sub-charter; and
            (2) The sub-charterer must provide detailed citizenship information in the format of form CG-1258, Application for Documentation, section G, citizenship.
            (e) A person that submits a false certification under this section is subject to penalty under 46 U.S.C. 12122.
            8. In § 67.167, in paragraph (c)(8), remove the last “or”; in paragraph (c)(9), remove the period and add, in its place, “; or”; and add paragraph (c)(10) to read as follows:

            § 67.167
            Requirement for exchange of Certificate of Documentation.

            (c) * * *
            (10) For a vessel under 46 U.S.C. 12106(e)—
            (i) The demise charter expires or is transferred to another charterer;
            (ii) The citizenship of the charterer or sub-charterer changes to the extent that they are no longer qualified for a coastwise endorsement;
            (iii) The entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is no longer primarily engaged in leasing or other financing transactions;
            (iv) The majority of the aggregate revenues of the entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity is derived from operation or management of vessels; or
            (v) The entity that owns the vessel, a parent of that entity, or a subsidiary of a parent of that entity becomes primarily engaged in operation or management of foreign-flag vessels used for the carriage of cargo unrelated to the vessel's owner or charterer.

            9. Add § 67.179 to subpart M to read as follows:

            § 67.179
            Application procedure: Coastwise operation of a barge that is owned by a lease-financing company and is under a demise charter.
            (a) The entity owning a barge qualified to engage in coastwise trade under the lease-financing provisions of 46 U.S.C. 12106(e) must submit the following to the National Vessel Documentation Center:
            (1) A certification, in the form of an affidavit, and supporting documentation from an officer of the entity owning the barge certifying the following:

            (i) That the entity owning the barge is a bank, leasing company, or other financial entity organized under the laws of the United States or a State.

            (ii) That ownership of the barge is primarily a financial investment without the ability and intent to control the barge's operations by a person not primarily engaged in the direct operation or management of the barge.

            (iii) That the entity owning the barge will transfer to a qualified United States citizen under 46 U.S.C. app. 802 the full possession, control, and command of the U.S.-built barge through a demise charter for a period of at least 3 years, unless a shorter period is authorized under § 67.20(a)(7). The certification must include a statement that the charterer will be deemed to be the owner pro hac vice for term of the charter.
            (iv) That the majority of the aggregate revenues of the entity that owns the barge, a parent of that entity, or a subsidiary of a parent of that entity is not derived from the operation or management of one or more vessels.
            (v) That the entity that owns the barge, a parent of that entity, or a subsidiary of a parent of that entity is not primarily engaged in the operation or management of commercial, foreign-flag vessels used for the carriage of cargo for unrelated to the barge's owner or charterer.
            (vi) That the barge is qualified to engage in the coastwise trade and that it is owned by an entity eligible to own vessels documented with a registry endorsement.

            (2) A copy of the charter agreement, which must provide that the charterer will be deemed to be the owner pro hac vice.
            (b) The charterer of the barge under paragraph (a) of this section must provide detailed citizenship information in the format of form CG-1258, Application for Documentation, section G, citizenship. The citizenship information must be signed by, or on behalf of, the charterer.
            (c) Whenever a charter under paragraph (a) of this section is amended, the barge owner must file a copy of the amendment with the Director, National Vessel Documentation Center, within 10 days after the effective date of the amendment.
            (d) Whenever the charterer of a barge under paragraph (a) of this section demise charters the barge to a sub-charterer—
            (1) The charterer must file a copy of the sub-charter with the Director, National Vessel Documentation Center, within 10 days after the effective date of the sub-charter; and
            (2) The sub-charterer must provide detailed citizenship information in the format of form CG-1258, Application for Documentation, section G, citizenship.
            (e) A person that submits a false certification under this section is subject to penalty under 46 U.S.C. 12122.

            Dated: February 13, 2001.
            R.C. North,
            Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety and Environmental Protection.

      [FR Doc. 01-11021 Filed 5-1-01; 8:45 am]
      BILLING CODE 4910-15-U


        FEDERAL COMMUNICATIONS COMMISSION
        47 CFR Part 73
        [ET Docket No. 05-182; FCC 05-94]
        Technical Standards for Satellite-Delivered Network Signals

          AGENCY:
          Federal Communications Commission.

          ACTION:
          Proposed rule; Notice of inquiry.

          SUMMARY:
          This document begins an inquiry into the adequacy of the digital signal strength standard and testing procedures used to determine whether households are eligible to receive distant broadcast digital television (DTV) network signals from satellite communications providers. We request comment and information on whether the existing statutes and/or regulations concerning the digital television signal strength standard and testing procedures as used for identifying if households are unserved by local network TV signals for purposes of determining eligibility to receive distant signals from satellite services need to be revised.

          DATES:
          Comments must be filed on or before June 17, 2005, and reply comments must be filed on or before July 5, 2005.

          ADDRESSES:
          You may submit comments, identified by (ET Docket No. 05-182) by any of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
          • Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.

          • People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.

          For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document.

          FOR FURTHER INFORMATION CONTACT:

          David Sturdivant, Office of Engineering and Technology, (202) 418-1227, e-mail: David.Sturdivant@fcc.gov, TTY (202) 418-2989.

        SUPPLEMENTARY INFORMATION:
        This is a summary of the Commission's Notice of Inquiry (NOI), ET Docket No. 05-182, FCC 05-94, adopted April 29, 2005, and released May 3, 2005. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW., Washington, DC 20554. The complete text of this document also may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street, SW., Room CY-B402, Washington, DC 20554. The full text may also be downloaded at: http://www.fcc.gov. Alternate formats are available to persons with disabilities at TTY (202) 418-7365.

        Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments on or before June 17, 2005, and reply comments on or before July 5, 2005. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998. Comments filed through the ECFS can be sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message, “get form <your e-mail address>.” A sample form and directions will be sent in reply. Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, commenters must submit two additional copies for each additional docket or rulemaking number.
        All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). The Commission's contractor, Natek, Inc., will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail, Express mail, and Priority Mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
        Summary of Notice of Inquiry
        1. In accordance with The Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA) (Pub. L. 108-447, section 207, 118 Stat. 2809, 3393 (2004) (to be codified at 47 U.S.C. 325), 204(b)) the Commission requests comment and information to assist us in determining if existing statutes and/or regulations that establish a television signal strength standard for identifying households that are unserved by local network TV signals are adequate for use in identifying household unserved by digital television broadcast signals (DTV). Households that are unserved by a local broadcast television station are eligible to receive distant network signals from satellite services. The Commission also requests comment on whether statutes and regulations need to be revised to take into account the types of antennas and receiving equipment that are available to consumers for reception of digital television signals. The record obtained through this inquiry will be used to prepare a report to Congress describing the results of this study and any changes that should be made to the applicable Federal statutes or regulations.
        2. This Inquiry will review current regulations that identify households that are unserved by a local analog broadcast television stations in order to determine if the regulations may be accurately applied to local digital broadcast stations for the same purpose. The Commission has been directed by SHVERA to review six specific factors related to determining if a household will be classified as unserved concerning the reception of digital television signals.
        3. We are requesting relevant technical information to determine if a new standard should account for the fact that an antenna can be mounted on a roof or placed in a home and whether the antenna will be placed in a fixed mounting or be capable of rotating. Information about the cost and the ease of deployment as well as the effects of the use of a rotor with the antenna should be included with comments.

        4. We will consider whether 47 CFR 73.686(d) should be amended to create different procedures for determining the requisite digital signal strength at a location. Portions of § 73.686(d) require an individual conducting measurement of the television signal available in a specific location to utilize characteristics of an analog television signal to complete the measurement. We request information regarding amending the rule so that it will be able to account for the measurement of digital television signals, such as where to tune and the proper setting for the i.f. bandwidth of the measurement equipment. The Commission will also consider a procedure for measuring signal intensity indoors along with criteria that would determine when an indoor or outdoor measurement should be performed.
        5. The Commission further asks if a standard that does not require the presence of a signal of a certain strength to ensure that a household can receive a high-quality picture using antennas of reasonable cost and ease of installation should be developed. Suggested standards should include sufficient information as to how the standard will insure that reception of service will occur and how the standard may be affected by currently available or soon-to-be available reception equipment.
        6. The Commission also seeks comment on whether to develop a predictive methodology for determining whether a household is unserved by an adequate digital signal under 17 U.S.C. 119(d)(10). We seek to determine if the modified Longley-Rice model, with appropriate modifications, would accurately predict digital signal coverage at a specific location, or whether there is some other predictive model that would be more appropriate for this purpose. Commenting parties are asked to propose specific modifications to the model and provide detailed analysis as to how the changes will result in a more accurate model when accounting for environmental features and possible signal interference. If an alternative model is suggested, we ask that it include specific technical information concerning its effectiveness in predicting DTV service at a location as well as information that will enable its use by the Commission.
        7. We request information as to whether there is a wide variation in the ability of reasonably priced consumer digital television sets to receive over-the-air signals, such that at a given signal strength some may be able to display high-quality pictures while others cannot, whether such variation is related to the price of the television set, and whether such variation should be factored into setting a standard for determining if a household is unserved by an adequate digital signal. Commenting parties should provide information regarding the sensitivity of various receivers and their interference rejection capability. We ask that these comments be accompanied by price data and analysis regarding the correlation between performance and price. We also ask if there are specific parameters that we should measure when performing our own analysis on the DTV receiving equipment. We ask if significant differences in digital receiver performance quality exist, should those differences be accounted for when determining whether a household is unserved by an adequate digital signal. If the Commenting parties recommend that digital receiver quality be a factor we ask that the parties provide detailed analysis and explain how receiver quality can be used in ascertaining whether a household is unserved. Finally, we ask how limitations in receivers can be mitigated through the use of higher performance antennas or auxiliary devices.
        8. Finally, we seek comment on whether to account for factors such as building loss, external interference sources, or undesired signals from both digital television and analog television stations using either the same or adjacent channels in nearby markets, foliage, and man-made clutter. In particular, interference from both co-channel and adjacent channel TV transmitters could cause interference to the desired signal and we ask for comment pertaining to this type of interference. We request comment on how well digital TV receivers and satellite set-top-boxes with built-in off-air receivers perform when contending with interference and should performance specifications be taken into account by the Commission in order to determine when a household is unserved by an adequate digital signal? Finally, what additional factors, if any, should be included when determining the availability of a DTV signal at an individual location?

          Federal Communications Commission.
          Marlene H. Dortch,
          Secretary.

      [FR Doc. 05-9823 Filed 5-17-05; 8:45 am]
      BILLING CODE 6712-01-P


        DEPARTMENT OF TRANSPORTATION
        Pipeline and Hazardous Materials Safety Administration
        49 CFR Part 172
        [Docket No. PHMSA-06-25885 (HM-232F)]
        RIN 2137-AE22
        Hazardous Material: Revision of Requirements for Security Plans

          AGENCY:
          Pipeline and Hazardous Materials Safety Administration, DOT.

          ACTION:
          Advance notice of proposed rulemaking (ANPRM) and announcement of public meeting.

          SUMMARY:
          PHMSA is considering revisions to the list of hazardous materials that require development and implementation of a security plan to address security risks during transportation in commerce. This effort is being coordinated with other Department of Transportation modal administrations (Federal Aviation Administration, Federal Motor Carrier Safety Administration, and Federal Railroad Administration) and the Transportation Security Administration of the Department of Homeland Security. The revisions would address outstanding petitions requesting that certain materials be excepted from the security plan requirements. PHMSA will hold a public meeting on November 30, 2006 to obtain stakeholder comments on security plan requirements. This ANPRM and the public meeting provide an opportunity for the public to comment on this issue and make recommendations on the applicability of the security plan requirements.

          DATES:

            Public meeting: The meeting will be held on November 30, 2006. The meeting will begin at 9 a.m.

            Written comments: Comments must be received by December 20, 2006.

          ADDRESSES:

            Public meeting: The meeting will be held at the U.S. Department of Transportation, Nassif Building, Room 2230, 400 Seventh Street, SW., Washington, DC 20590-0001. Requests for special accommodations should be addressed to the Pipeline and Hazardous Material Safety Administration, PHH-10, 400 Seventh Street, SW., Washington, DC 20590-0001; telephone (202) 366-8553. Written comments: You may submit comments identified by the docket number (PHMSA-06-25885) by any of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments.
          • Web site: http://dms.dot.gov. Follow the instructions for submitting comments on the DOT electronic docket site.
          • FAX: 1-202-493-2251.
          • Mail: Docket Management System, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, PL-402, Washington, DC 20590-0001.
          • Hand Delivery: PL-402 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

            Instructions: All submissions must include the agency name and docket number or Regulation Identification Number (RIN) for this notice. Internet users may access comments received by DOT at http://dms.dot.gov. Note that comments received may be posted without change to http://dms.dot.gov including any personal information provided.
          While all comments should be sent to DOT's Docket Management System (DMS), comments or those portions of comments PHMSA determines to include trade secrets, confidential commercial information, or sensitive security information (SSI) will not be placed in the public docket and will be handled separately. If you believe your comments contain trade secrets, confidential commercial information, or SSI, those comments or the relevant portions of those comments should be appropriately marked so that DOT may make a determination. PHMSA procedures in 49 CFR part 105 establish a mechanism by which commenters may request confidentiality.

          In accordance with 49 CFR 105.30, you may ask PHMSA to keep information confidential using the following procedures: (1) Mark “confidential” on each page of the original document you would like to keep confidential; (2) send DMS both the original document and a second copy of the original document with the confidential information redacted; and (3) explain why the information is confidential (as a trade secret, confidential commercial information, or SSI). In your explanation, you should provide enough information to enable PHMSA to determine whether the information provided is protected by law and must be handled separately.
          In addition, for comments or portions of comments that you believe contain SSI as defined in 49 CFR 15.7, you should comply with Federal regulations governing the handling of SSI. See 49 CFR 1520.9 and 49 CFR 15.9, Restrictions on the disclosure of sensitive security information. Those regulations restrict the disclosure of SSI to those with a need to know and set forth specific requirements for marking, packaging, and disposing of documents containing SSI. Note when mailing in or using a special delivery service to send comments containing SSI, comments should be wrapped in a manner to prevent the information from being read. PHMSA may perform concurrent reviews on requests for designations as SSI.
          After reviewing your request for confidentiality and the information provided, PHMSA will determine whether the information should be treated as confidential under applicable laws and regulations. PHMSA will notify you of the decision to grant or deny confidential treatment. If PHMSA denies your request, you will be provided an opportunity to request reconsideration before the information is publicly disclosed. PHMSA will reconsider its decision to deny confidentiality based on your response.
          To further guard against disclosure of SSI, PHMSA will review all submissions, whether or not they are identified as confidential, prior to their posting on the public docket. PHMSA will notify you if we determine that information in your submission should not be disclosed to the public. If you have any questions concerning the procedures for determining confidentiality or security sensitivity, you may call one of the individuals listed below.

          FOR FURTHER INFORMATION CONTACT:
          Susan Gorsky or Ben Supko, Office of Hazardous Materials Standards, (202) 366-8553, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590-0001.

        SUPPLEMENTARY INFORMATION:
        I. Background
        A. Current DOT Security Requirements
        On March 25, 2003, the Research and Special Programs Administration (RSPA), the predecessor agency to the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule (Docket HM-232; 57 FR 14510) amending the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) to establish requirements to enhance the security of hazardous materials transported in commerce. The final rule required shippers and carriers of certain hazardous materials to develop and implement security plans. The security plan requirements in subpart I of part 172 of the HMR apply to persons who offer for transportation or transport:
        (1) A highway-route controlled quantity of a Class 7 (radioactive) material;
        (2) More than 25 kg (55 lbs.) of a Division 1.1, 1.2, or 1.3 (explosive) material;
        (3) More than 1 L (1.06 qt.) per package of a material poisonous by inhalation in Hazard Zone A;
        (4) A shipment in a bulk packaging with a capacity equal to or greater than 13,248 L (3,500 gallons) for liquids or gases or greater than 13.24 cubic meters (468 cubic feet) for solids;
        (5) A shipment in other than a bulk packaging of 2,268 kg (5,000 lbs.) gross weight or more of one class of hazardous materials for which placarding is required;
        (6) A select agent or toxin regulated by the Centers for Disease Control and Prevention under 42 CFR part 73 and, by April 1, 2007, a select agent or toxin regulated by the U.S. Department of Agriculture under 9 CFR part 121; or
        (7) A shipment that requires placarding under subpart F of part 172 of the HMR.
        The security plan must include an assessment of possible transportation security risks and appropriate measures to address the assessed risks. Specific measures implemented as part of the plan may vary with the level of threat at a particular time. At a minimum, the security plan must address personnel security, unauthorized access, and en route security. For personnel security, the plan must include measures to confirm information provided by job applicants for positions involving access to and handling of the hazardous materials covered by the plan. For unauthorized access, the plan must include measures to address the risk of unauthorized persons gaining access to materials or transport conveyances being prepared for transportation. For en route security, the plan must include measures to address security risks during transportation, including the security of shipments stored temporarily en route to their destinations.
        As indicated above, the HMR set forth general requirements for a security plan's components rather than a prescriptive list of specific items that must be included. The HMR set a performance standard providing offerors and carriers with the flexibility necessary to develop security plans addressing their individual circumstances and operational environments. Accordingly, each security plan will differ because it will be based on an offeror's or a carrier's individualized assessment of the security risks associated with the specific hazardous materials it ships or transports and its unique circumstances and operational environment.

        In developing the HM-232 final rule, we assessed the security risks associated with the transportation of different classes and quantities of hazardous materials. We concluded that the most significant security risks involve the transportation of certain radioactive materials; certain explosives; materials that are poisonous by inhalation, certain infectious and toxic substances; and bulk shipments of materials such as flammable and compressed gases, flammable liquids, flammable solids, and corrosives. Based on this security risk assessment, the HM-232 final rule currently in effect requires persons who offer for transportation or transport a hazardous material in an amount that requires placarding or select agents to develop and implement security plans. Using the placarding thresholds to trigger enhanced security requirements covers the materials that present the most significant security threats in transportation and provides a relatively straightforward way to distinguish materials that may present a significant security threat from materials that do not. It also provides regulatory consistency, thereby minimizing confusion and facilitating compliance by the regulated community. We note as well that the current security plan requirements provide shippers and carriers with the flexibility to develop and implement a security plan that is appropriate to the individual circumstances, the types and quantities of hazardous materials shipped or transported and the modes of transportation utilized. A shipper or carrier must assess the security risks for the types and quantities of hazardous materials to be transported and implement appropriate measures to address those risks. The risk assessment could well conclude that, for materials such as paint or flavoring extracts, the transportation security risk is not significant and extensive security measures are not warranted.
        The Federal Motor Carrier Safety Administration (FMCSA), in 49 CFR part 385, prohibits a motor carrier from transporting certain hazardous materials unless the motor carrier holds a safety permit. A safety permit is required for the following hazardous materials in the quantities indicated:
        (1) A highway-route controlled quantity of a Class 7 (radioactive) material;
        (2) More than 25 kg (55 lbs.) of a Division 1.2, 1.2, or 1.3 (explosive) material;
        (3) More than 1 L (1.08 qt.) per package of a material poisonous by inhalation in Hazard Zone A;
        (4) A bulk packaging (capacity greater than 450 L (119 gallons)) of a material poisonous by inhalation in Hazard Zone B;
        (5) A packaging with a capacity equal to or greater than 13,248 L (3,500 gallons) of a material poisonous by inhalation in Hazard Zone C or D; or
        (6) A shipment of compressed or refrigerated liquefied methane or liquefied natural gas, or other liquefied gas with a methane content of at least 85 percent, in a bulk packaging having a capacity equal to or greater than 13,248 L (3,500 gallons).
        B. International Transportation Security Standards
        The United Nations Model Regulations on the Transport of Dangerous Goods (UN Recommendations) identify high consequence dangerous goods for which enhanced security measures are recommended. The recommended security measures include security plans and are similar to the requirements in subpart I of part 172 of the HMR. The UN Recommendations define high consequence dangerous goods as materials with the “potential for mis-use in a terrorist incident and which may, as a result, produce serious consequences such as mass casualties or mass destruction.” The UN Recommendations list the following materials as high consequence dangerous goods:
        (1) Division 1.1 explosives;
        (2) Division 1.2 explosives;
        (3) Division 1.3 compatibility group C explosives;
        (4) Division 1.5 explosives;
        (5) Bulk shipments of Division 2.1 flammable gases;
        (6) Division 2.3 toxic gases (excluding aerosols);
        (7) Bulk shipments of Class 3 flammable liquids in PG I or II;
        (8) Class 3 and Division 4.1 desensitized explosives;
        (9) Bulk shipments of Division 4.2 PG I materials;
        (10) Bulk shipments of Division 4.3 PG I materials;
        (11) Bulk shipments of Division 5.1 PG I oxidizing liquids;
        (12) Bulk shipments of Division 5.1 perchlorates, ammonium nitrate and ammonium nitrate fertilizers;
        (13) Division 6.1 PG I toxic materials;
        (14) Division 6.2 infectious substances of Category A (UN2814 and 2900);

        (15) Class 7 radioactive materials in quantities greater than 3000 A1 (special form) or 3000 A2, as applicable, in Type B(U) or Type B(M) or Type (C) packages; and
        (16) Bulk shipments of Class 8 PG I materials.

        For purposes of the security provisions, the UN defines “in bulk” to mean quantities greater than 3,000 kg (6,614 lbs.) or 3,000 liters (660 gallons) in portable tanks or bulk containers.
        II. Purpose of This ANPRM
        PHMSA has received two petitions for rulemaking requesting a review and reevaluation of the current HMR security plan requirements. The Council on Safe Transportation of Hazardous Articles (COSTHA) petitioned PHMSA (P-1447) to reevaluate the security requirements in subpart I of part 172 of the HMR to “enhance international harmonization and to better utilize available resources in enhancing hazardous materials transportation security.” COSTHA notes that the list of hazardous materials in the HMR that are subject to the security plan requirements differs from the list of high consequence dangerous goods in the UN Recommendations. COSTHA cites several examples of hazardous materials (e.g., automobile batteries, inks, paint, flavoring extracts) that, based on hazard class and quantity, require placarding under the HMR, and, therefore, are subject to the security plan requirements. COSTHA suggests it is highly unlikely a terrorist would use these materials to cause loss of lives, destruction of property, or damage to the environment. The petition requests that PHMSA adopt the same criteria as the UN Recommendations for materials that are subject to the security plan requirements, or, as an alternative, eliminate the security plan requirement for quantities of hazardous materials for which placarding under the provisions of subpart F of part 172 is required.
        Similarly, the American Trucking Associations (ATA) petitioned PHMSA (P-1466) to create a new subset of hazardous materials that are “security sensitive hazardous materials.” The ATA supports the materials and quantities that are subject to the FMCSA Hazardous Materials Safety Permit requirements as the starting point for determining security sensitive hazardous materials. In addition to those materials, ATA suggests that PHMSA add the following materials from the UN high consequence dangerous goods list: (1) Bulk shipments of Division 2.1; (2) bulk shipments of Class 3, PG I and II; (3) Class 3 and Division 4.1 desensitized explosives (quantity to be determined); (4) bulk shipments of Division 4.2, PG I; (5) bulk shipments of Division 4.3, PG I; (6) bulk shipments of Division 5.1, PG I; (7) bulk shipments Division 5.1 perchlorates, ammonium nitrate and ammonium nitrate fertilizers; (8) Division 6.2 infectious substances of Category A (quantity to be determined); (9) any quantity of select agents; and (10) bulk shipments of Class 8, PG I. The ATA uses quantities greater than 3,500 gallons or 5,000 pounds to define “bulk” for purposes of security planning.

        We agree with COSTHA and ATA that the list of materials for which a security plan is required should be re-assessed. The philosophy underlying PHMSA's earlier approach to security plans was that the security plans represented a baseline requirement. We considered the company preparing the security plan to be in the best position to assess security risks based on its operational circumstances. If security risks were determined to be insignificant, this would be reflected in a simple security plan with minimal content. Increased coverage would be required when security risks are more substantial. The security plan requirements went into effect September 25, 2003; both the industry and the government have had three years of experience evaluating security risks associated with specific hazardous materials and transportation environments and identifying appropriate measures to address those risks. Accordingly, we are initiating this rulemaking, in coordination with other DOT modal administrations (Federal Aviation Administration (FAA), Federal Railroad Administration (FRA), and FMCSA) and the Transportation Security Administration (TSA) of the Department of Homeland Security (DHS), to consider modifications to the list of hazardous materials for which security plans are required. We ask commenters to address the following questions:
        (1) What is the best basic approach to security plans? Is the current approach correct or should security plans be required only for hazardous materials in threshold quantities that are known to pose significant security risks?
        (2) Are there ways to lessen the burdens of security plan requirements on companies with minimal security risks?
        (3) Should baseline security requirements or guidelines be established when security plans are not required?
        (4) What factors should be considered in determining whether security risks of a specific hazardous material or class of hazardous materials are significant enough to require preparation of a security plan?
        (5) What role should Packing Groups play in determining the need for security plans?
        (6) How should the quantities of hazardous materials transported be considered when determining whether a security plan is required?
        (7) Does easy availability of a hazardous material in specific quantities outside of transportation play a role in determining whether a security plan should be required?
        (8) Should uniform security plan requirements apply across all modes of transportation or should the triggering criteria (hazardous class and quantity) be mode-specific?
        (9) What factors should be considered when determining whether specific hazardous materials, classes or quantities thereof, should be excepted from security plan requirements?
        (10) How should the determination of transportation security risk account for specific hazardous materials or classes of materials that by themselves do not pose a security risk, but that could present a security risk in combination with other materials?
        (11) What compliance or enforcement issues should be considered as we re-assess current security plan requirements?
        (12) Should company size or geographic location (e.g., specific region of the country or urban or rural) play a role in determining whether a security plan is required?
        (13) Does the Government need to provide more information on the specific security concerns that cause the need for preparation of a security plan for certain hazardous materials to assist in security plan preparation?
        (14) Should the Government maintain an evolving list of hazardous materials for which security plans are required based on changing threats and scenarios?
        There are a number of additional issues that PHMSA will consider in assessing the list of hazardous materials for which a security plan is required. These include the analyses required under the following statutes and executive orders in the event we determine that rulemaking is appropriate:

          Executive Order 12866: Regulatory Planning and Review. E.O. 12866 requires agencies to regulate in the “most cost-effective manner,” to make a “reasoned determination that the benefits of the intended regulation justify its costs,” and to develop regulations that “impose the least burden on society.” We therefore request comments, including specific data if possible, concerning the costs and benefits that may be associated with revisions to the list of hazardous materials for which security plans are required. A rule that is considered significant under E.O. 12866 must be reviewed and cleared by the Office of Management and Budget before it can be issued.

          Executive Order 13132: Federalism. E.O. 13132 requires agencies to assure meaningful and timely input by state and local officials in the development of regulatory policies that may have 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 invite state and local governments with an interest in this rulemaking to comment on the effect that revisions to the list of materials for which security plans are required may have on state or local safety or security programs.

          Executive Order 13175: Consultation and Coordination with Indian Tribal Governments. E.O. 13175 requires agencies to assure meaningful and timely input from Indian tribal government representatives in the development of rules that “significantly or uniquely affect” Indian communities and that impose “substantial and direct compliance costs” on such communities. We invite Indian tribal governments to provide comments as to the effect that revisions to the list of materials for which security plans are required may have on Indian communities.

          Regulatory Flexibility Act. Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.), we must consider whether a proposed rule would have a significant economic impact on a substantial number of small entities. “Small entities” include small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations under 50,000. If you believe that revisions to the list of materials for which security plans are required could have a significant economic impact on small entities, please provide information on such impacts.
        III. Announcement of Public Meeting

        PHMSA is conducting a public meeting to discuss the security plan requirements and receive comments and recommendations concerning the list of hazardous materials that trigger the requirement for a security plan. Other DOT modal administrations and DHS are participating in the meeting. See ADDRESSES and DATES for meeting details.
        All interested persons are encouraged to participate. Prior notification to PHMSA is not required. Due to the heightened security measures, participants are encouraged to arrive early to allow time for security checks necessary to gain access to the building.
        IV. Regulatory Notices—Executive Order 12866 and DOT Regulatory Policies and Procedures
        This rulemaking is not considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, was not reviewed by the Office of Management and Budget. This rulemaking is not considered significant under the Regulatory policies and procedures of the Department of Transportation (44 FR 11034).

          Issued in Washington, DC, on September 18, 2006 under authority delegated in 49 CFR part 106.
          Robert A. McGuire,
          Associate Administrator for Hazardous Materials Safety.

      [FR Doc. 06-7930 Filed 9-20-06; 8:45 am]
      BILLING CODE 4910-60-P