[Federal Register: April 13, 2005 (Volume 70, Number 70)]
[Proposed Rules]
[Page 19376-19377]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ap05-38]
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DEPARTMENT OF HOMELAND SECURITY
Coast Guard
46 CFR Part 67
[USCG-2003-14472]
RIN 1625-AA63
DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 221
[Docket No. MARAD-2003-15171]
RIN 2133-AB51
Vessel Documentation: Lease Financing for Vessels Engaged in the
Coastwise Trade; Second Rulemaking
AGENCIES: Coast Guard, DHS, and Maritime Administration, DOT.
ACTION: Joint notice of proposed rulemaking; withdrawal.
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SUMMARY: The Coast Guard and the Maritime Administration (MARAD) are
withdrawing their joint notice of proposed rulemaking on documentation,
under the lease-financing provisions, of vessels engaged in the
coastwise trade. The joint notice of proposed rulemaking was superseded
by legislation. A new notice of proposed rulemaking addressing the
provisions of the new legislation will be published in the future.
DATES: The joint notice of proposed rulemaking is withdrawn on April
13, 2005.
FOR FURTHER INFORMATION CONTACT: Patricia Williams, Deputy Director,
National Vessel Documentation Center, Coast Guard, telephone 304-271-
2506 or John T. Marquez, Jr., Maritime Administration, telephone 202-
366-5320.
SUPPLEMENTARY INFORMATION:
Background
On February 4, 2004, the Coast Guard and the Maritime
Administration (MARAD) published a joint notice of proposed rulemaking
entitled ``Vessel Documentation: Lease Financing for Vessels Engaged in
the Coastwise Trade; Second Rulemaking'' in the Federal Register (69 FR
5403). The rulemaking concerned the documentation of vessels under the
lease-financing provisions of 46 U.S.C. 12106(e) and asked the
following questions:
1. To what extent and how should the Coast Guard prohibit or
restrict the chartering back (whether by time charter, voyage charter,
space charter, contract of affreightment, or other contract for the use
of a vessel) of a lease-financed vessel to the owner, the parent, or to
a subsidiary or affiliate of the parent? (Coast Guard.)
2. To ensure that control of a lease-financed vessel engaged in the
coastwise trade is not returned to the owner or a member of its group,
should the Maritime Administrator's approval be required before an
interest in or control of a U.S. documented vessel is transferred to a
non-U.S. citizen? (Maritime Administration.)
3. What limitations, if any, should the Coast Guard impose on the
grandfather rights of lease-financed vessels with a coastwise
endorsement issued before February 4, 2004? (Coast Guard.)
4. Should the Coast Guard require that an application for coastwise
endorsement under the lease-financing regulations be audited by a third
party to further ensure that the transaction in fact qualifies under
the lease-financing laws and regulations? (Coast Guard.)
Discussion of Comments on the Joint Notice of Proposed Rulemaking
The comments received on the questions above clearly indicated that
the lease-financing statute was subject to significantly differing
interpretations and needed clarification. Congress also arrived at this
conclusion and passed new legislation, signed into law on August 9,
2004, (discussed below) to clarify the lease-financing statute.
However, because this legislation did not address the issue of third-
party audits (question number 4 above) and because the notice of
proposed rulemaking did not contain proposed regulatory text on that
issue, comments to that question will be considered under the future
Coast Guard rulemaking discussed below.
[[Page 19377]]
New Legislation
On August 9, 2004, the President signed the Coast Guard and
Maritime Transportation Act of 2004 (Pub. L. 108-293) (the Act), which
addressed most of the questions listed above and negated the need for
this rulemaking as follows:
On the question of charters back to the owner (questions 1 and 2
above), section 608(a) of the new Act added new paragraph (f) to 46
U.S.C. 12106 to clarify Congress's position on the issue by requiring
that the owner of a lease-financed vessel certify annually that it (or,
if the vessel is owned by a trust or similar arrangement, the
beneficiary of the trust or similar arrangement) is independent from,
and not an affiliate of, any charterer of the vessel or any person who
has the right, directly or indirectly, to control or direct the
movement or use of the vessel.
On the question of limitations to grandfather rights (question
number 3 above), section 608(c) of the Act required that the amendments
made by section 608 and any regulations published after February 4,
2004, with respect to coastwise endorsements do not apply to a
certificate of documentation, or renewal of one, endorsed with a
coastwise endorsement for a vessel under 46 U.S.C. 12106(e) or a
replacement vessel of a similar size and function, that was issued
before August 9, 2004, as long as the vessel is owned by the person
named in the certificate, or by a subsidiary or affiliate of that
person, and as long as the controlling interest in the owner has not
been transferred to a person that was not an affiliate of the owner as
of August 9, 2004. A similar grandfather provision in section 608(c) of
the Act was applied to offshore supply vessels, except that it was
limited only to 3 years after enactment of the Act or until August 9,
2007.
On the question of third-party auditing of applications for
coastwise endorsements (question number 4 above), the Act did not
address the issue and it is being carried forward to the future
rulemaking discussed below.
Future Rulemaking
The new Act requires that the Coast Guard publish final regulations
by August 8, 2005, to carry out section 608 of the Act, including
amendments made by the Act to 46 U.S.C. 12106. Therefore, the Coast
Guard will publish in the Federal Register a new notice of proposed
rulemaking with opportunity for public comment to address these
changes. In addition, the Coast Guard will again consider the issue of
third-party audits in the new notice and will address, in that notice,
all comments on the subject submitted since the February 4, 2004,
notice.
Withdrawal
For the reasons stated above, the Coast Guard and MARAD are
withdrawing the joint notice of proposed rulemaking published on
February 4, 2004 (69 FR 5403).
Authority: The Coast Guard's portion of this rulemaking is taken
under authority of 46 U.S.C. 2103 and 12106 and Department of
Homeland Security Delegation No. 0170.1. The Maritime
Administration's portion of this rulemaking is taken under authority
of 46 App. U.S.C. 802, 803, 808, 835, 839, 1114(b), 1195, 46 U.S.C.
chs.301 and 313; 49 U.S.C. 336; 49 CFR 1.66.
Dated: November 2, 2004.
Thomas H. Collins,
Admiral, Coast Guard Commandant.
Dated: March 29, 2005.
By Order of the Maritime Administrator.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 05-7436 Filed 4-12-05; 8:45 am]
BILLING CODE 4910-15-P