Opinion ID: 409578
Heading Depth: 2
Heading Rank: 3

Heading: MarAd Proceedings

Text: 15 In 1978 MarAd published a proposed rule prescribing procedural and substantive guidelines for evaluating all applications for the total repayment of CDS in exchange for removal of domestic trading restrictions. 18 No action on the rule was taken, however, pending final resolution of the Stuyvesant litigation. Once MarAd's authority was affirmed by the Supreme Court, the proposed rule was then republished and new comments were solicited. 19 16 The terms of the rule would have allowed entry into the domestic trade only upon a determination of exceptional circumstances. The exceptional circumstances required to be shown were (1) the absence of favorable opportunities for employment of the vessel during a protracted period of duration in excess of that normally associated with cyclical downturns; (2) consequent inability of the owner or other party responsible for payment to make required principal and interest payments on mortgage debt guaranteed by MarAd under the Act, and imminent bankruptcy of such party; (3) consequent substantial financial loss to MarAd under its guarantee of the mortgage debt; and (4) likely absence of any significant adverse competitive effect on other vessels operating in the domestic trade. 17 The proposed rule also invited comments on a number of related issues: whether an ad hoc approach would be preferable in processing applications; whether the policy should vary for different CDS vessel types; whether additional exceptional circumstances should be included; what consideration should be given to competition; and what type of procedures should be adopted to ensure that all interested parties have an opportunity to present their views. 18 Written comments by interested parties were invited within sixty days. Comments were filed by twenty-two separate interests, including petitioner. 19 Contemporaneous with publication of the proposed rule, charterers and owners of six ships built with construction subsidies made application for repayment. 20 MarAd employed comment procedures in these dockets as well, and papers were filed by proponents and numerous opponents together with economic studies of the Alaskan coastwise tanker trade, the outlook for domestic shipping, and the impact of admitting the applicants to the trade. The economic aspects of the problem were common to all dockets as well as to the rulemaking.