Procedures for Determining Vessel Service Categories for Purposes of the Cargo Preference Act, 47305-47310 [E9-22171]

Agencies

• Maritime Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 74, Number 177 (Tuesday, September 15, 2009)]
[Notices]
[Pages 47305-47310]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-22171]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration


Procedures for Determining Vessel Service Categories for Purposes 
of the Cargo Preference Act

AGENCY: U.S. Department of Transportation, Maritime Administration.

ACTION: Notice.

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SUMMARY: Pursuant to a Memorandum of Understanding Among the United 
States Department of Agriculture, the United States Department of 
Transportation, and the United States Agency for International 
Development Regarding Procedures for Determining Vessel Service 
Categories for Purposes of the Cargo Preference Act, dated September 4, 
2009 (the MOU, a copy of which is attached hereto and posted at the Web 
site of the Maritime Administration (MARAD), https://www.marad.dot.gov), 
notice is hereby given by MARAD that procedures as set forth herein are 
established for vessel owners or operators to designate the service 
category of individual vessels for purposes of compliance with the 
Cargo Preference Act (CPA). Where the owner or operator designates the 
category of its vessel, such self-designations will be docketed in the 
public record, published, and an opportunity will be provided for 
comment by interested parties. Each self-designation and the record 
supporting it is subject to review by MARAD. If MARAD disagrees with a 
self-designation, the process for determination, appeal and further 
administrative review is set forth below. These procedures are intended 
to be interim procedures implementing the MOU entered into by MARAD, 
the United States Department of Agriculture (USDA), and the United 
States Agency for International Development (USAID) and a 2002 
Department of Justice interpretation of the CPA, pending the formal 
promulgation of regulations by MARAD.

Background

    The CPA requires that Federal agencies take ``necessary and 
practicable'' steps to ensure that privately-owned U.S.-flag vessels 
transport at least 50 percent of the gross tonnage of cargo sponsored 
under the food assistance programs specified below ``(computed 
separately for dry bulk carriers, dry cargo liners, and tankers) * * * 
to the extent such vessels are available at fair and reasonable rates 
for commercial vessels of the United States, in a manner that will 
ensure a fair and reasonable participation of commercial vessels of the 
United States in those cargoes by geographic areas.'' 46 U.S.C. 
55305(b). An additional 25 percent of gross tonnage is to be 
transported in accordance with the requirements of 46 U.S.C. 55314.
    USAID and USDA provide food aid commodities to meet humanitarian 
food needs in the developing world. They either contract directly with, 
or provide guidance to, other entities for purposes of reimbursement 
regarding the transportation of such food aid through a competitive 
bidding system among private ocean carriers. The award of 
transportation contracts to ocean carriers is subject to the 
requirements of the CPA.
    This Federal Register notice and the procedures set forth herein 
are intended to cover the following food assistance programs: Titles I, 
II, and III programs of the Food for Peace Act, the Food for Progress 
program of the Food Security Act of 1985, the McGovern-Dole 
International Food for Education and Child Nutrition program of the 
Farm Security and Rural Investment Act of 2002, the Section 416(b) 
program of the Agricultural Act of 1949, and the Bill Emerson 
Humanitarian Trust of the Bill Emerson Humanitarian Trust Act.
    MARAD, an operating administration of the Department of 
Transportation, is responsible for prescribing regulations and guidance 
governing the implementation of the CPA by other Government agencies, 
such as USAID and USDA. 46 U.S.C. 55305(d); 49 CFR 1.66(e). MARAD 
maintains a list on its Web site at https://www.marad.dot.gov/documents/MAR730_MasterVesselListforCargoPreference.pdf that sets forth vessel 
designations for CPA purposes through and including September 30, 2009. 
The procedures contained in this Notice apply to both U.S. flag and 
foreign flag vessels and must be used by vessel owners or operators to 
request any designation or re-designation of such vessels by service 
type, for purposes of participation in CPA programs. MARAD will publish 
an initial list of vessel designations on October 7, 2009. After a 
comment period and administrative review process (as described below), 
MARAD will publish a new vessel list on its Web site, https://www.marad.dot.gov.
    USAID, USDA and the MARAD have been involved in litigation that 
challenges the proper interpretation and implementation of the Cargo 
Preference Act by these agencies for the Title II program under the 
Food for Peace Act (Title II), including Maersk Line Ltd v. Vilsack, 
U.S.D.C. (E.D. Va) 1:09cv747. As the parties acknowledged in a July 10, 
2009 settlement of the Maersk litigation, the Government agencies 
involved in that litigation were unable to provide a unified Government 
position with respect to the proper implementation of the 2002 
Department of Justice interpretation of the CPA. The attached MOU 
serves to clarify the position of the United States with respect to 
certain requirements of the CPA, and represents the unified Government 
position on the proper method for implementing the Department of 
Justice's 2002 CPA determination.
    For purposes of determining compliance with the statutory 75 
percent requirement for shipments on U.S. flag vessels, each of the 
affected agencies (that is, MARAD, USAID, and USDA) will record 
contracts awarded under the food assistance programs specified above 
based solely upon the vessel service category for the vessel upon which 
the cargo is carried, for both foreign flag and U.S.-flag vessels,

[[Page 47306]]

as shown on the MARAD list of CPA vessels without regard to the nature 
of the cargo carried. The list is available in the Cargo Preference 
section of MARAD's Web site at https://www.marad.dot.gov/documents/MAR730_MasterVesselListforCargoPreference.pdf. Pursuant to the MOU and 
the procedures outlined herein, the list shall be revised periodically 
to reflect appropriate vessel designations. The contract award date for 
contracts awarded under these food assistance programs will be the 
basis of measurement for compliance purposes. Bills of lading 
quantities will be used to validate the compliance percentages.

Initial Self-Designation Process

    Prior to October 1, 2009, all vessel owners or operators, including 
owners or operators of foreign flag vessels, may self-designate the 
service type of vessels they own or operate as either a dry bulk 
carrier or dry cargo liner, and report this designation to MARAD in 
writing. The current treatment of tankers is not affected by these 
procedures, and no self-designation is required or expected for 
tankers.
    The owner or operator should include a justification of the 
designation it seeks based upon the CPA evaluation criteria listed 
below, and the general character of the vessel's service--that is, 
irregular service or regularly scheduled service. If no self-
designation is made by a vessel's owner or operator, the vessel's 
categorization will remain as it is currently designated in the MARAD 
list, unless and until MARAD makes a different determination as to the 
proper category for the vessel, or a vessel owner or operator requests 
a re-designation as outlined in the procedures below.

Self-Designation Applications and Their Contents

    A separate written application is required for each vessel. Each 
application must refer to docket MARAD-2007-0001. Each application must 
address the CPA evaluation criteria listed in points a. through e. 
below. At a minimum, each application must also contain the following 
information:

--Name of vessel with IMO number;
--Name and complete business address of owner or operator, including e-
mail address, if available;
--Business phone number (including any extension number) of owner or 
operator, if available;
--Desired designation of vessel; and
--Justification for desired designation

    The justification submitted should include all documentation that 
the owner or operator relies upon in support of the desired 
designation. This may include:
    a. The advertisement of service;
    b. Regularity of service;
    c. Offering of service to specific routes, and planned schedules;
    d. Characteristics of service other than vessel design and
    e. Historical performance in recent months.
    The application may also include any other information that 
demonstrates the general character of the vessel's service, that is, 
irregular service or regularly scheduled service. Each application must 
be signed, and each applicant must certify that the information 
contained in the application is true and correct to the best of the 
knowledge and belief of the applicant.
    Please see the Addresses section below concerning where to transmit 
this information. Electronic submission of the application and related 
documents is strongly encouraged to facilitate timely processing. 
Alternatively, such materials may be submitted by express delivery 
service. All such information shall become a matter of public record 
and will be placed in the public docket at the Department of 
Transportation.

Public Comments, MARAD's Initial Determination, and Appeals

    On or before October 7, 2009, MARAD will publish in the Federal 
Register for public comment a list of the initial self-designations 
received from vessel owners or operators. Interested parties may 
comment on these proposed self-designations within 10 calendar days of 
publication. If MARAD publishes the self-designation list on October 7, 
2009, then the tenth day will be a Saturday (October 17), and thus 
comments should be received no later than the close of business on 
October 19, 2009. The close of business is 5 p.m. local Washington, DC 
time.
    If MARAD disagrees with an owner's or operator's initial self-
designation, it will notify the owner or operator within 15 calendar 
days of the close of the public comment period. That notification will 
include MARAD's initial determination of vessel type category. Unless 
MARAD disagrees with an owner's or operator's initial self-designation 
in writing within 15 calendar days of the close of the public comment 
period, these self-designations will remain in effect until vessel 
owners or operators submit a request for re-designation. If the owner 
or operator changes the characteristics of its service such that the 
factual basis for its self-designation is no longer in effect, then the 
owner or operator shall seek re-designation at its earliest 
opportunity.
    Vessel owners or operators may appeal to the Maritime Administrator 
within 10 calendar days of receiving the initial determination. Such 
appeals should be express delivered or electronically transmitted to 
the docket address as set forth below.
    The Maritime Administrator will issue a final determination of 
vessel designation within 30 calendar days of receiving the appeal, 
after consultation with the United States Department of State, USAID, 
and USDA.

Vessel Designation Pending Appeal

    If MARAD disagrees with an owner's or operator's initial self-
designation, vessels will be treated in accordance with MARAD's initial 
determination through the appeal period starting from the time of 
MARAD's determination. However, if a solicitation and/or bid award 
occurs between the time in which self-designations are received by 
MARAD but prior to MARAD's written notification of initial 
determination, such solicitation and/or bid award will be based on the 
self-designation.

Standards for Determining Vessel Service

    In accordance with the Department of Justice's 2002 interpretation 
of the CPA, in determining whether a vessel may be appropriately 
categorized as a ``dry bulk carrier'' or ``dry cargo liner,'' MARAD 
will evaluate the vessel's service, that is, whether the vessel is 
engaged in irregular or regularly scheduled service. A dry cargo liner 
vessel is a vessel in regularly scheduled service. A dry bulk carrier 
vessel is vessel that is in irregular service.
    In evaluating the service of a particular vessel, MARAD will 
consider the following criteria:
    a. The advertisement of service;
    b. Regularity of service;
    c. Offering of service to specific routes, and planned schedules;
    d. Characteristics of service other than vessel design;
    e. Historical performance in recent months.
    Applicants for self-designation or re-designation should provide 
information, data, and material related to these five criteria as well 
as the more general description of the vessel's service as regular or 
irregular.

Vessels for Which No Self-Designation Is Received

    For vessels for which MARAD does not receive a written self-
designation by October 1, 2009, MARAD will determine a vessel-type 
designation

[[Page 47307]]

based on the criteria listed in points a through e above. All such 
MARAD designations shall be placed on MARAD's Web site. An owner or 
operator of a vessel designated by MARAD under this procedure shall 
receive notice of such designation. Such notice can be sent to such 
owner or operator's e-mail or regular address. MARAD may also publish a 
notice of such determination in the Federal Register. The owner or 
operator can appeal that determination within ten calendar days of the 
date of receipt of such notice of determination or within ten calendar 
days of publication in the Federal Register, whichever date is earlier, 
under the procedures outlined above.

New Vessels Brought Online After October 1, 2009

    If a new vessel is brought online after October 1, 2009, the vessel 
owner or operator may voluntarily make an initial self-designation of 
the vessel's service category for CPA purposes, following the same 
procedure as vessels which have been self-designated prior to October 
1, 2009. The timing and procedures relating to the initial 
determination will govern these new vessel self-designations.

Re-designations

    Commencing January 1, 2010, vessel owners or operators may request 
re-designations from MARAD on a quarterly basis. Re-designation of any 
individual vessel can occur no more than twice per calendar year. 
However, no re-designations may be filed until the completion of the 
initial self-designation administrative process.
    All requests for re-designation should be made in writing and 
should include justification of such requests for re-designation based 
upon the criteria listed in points a. through e. above, and the general 
character of the vessel's service, that is, irregular service or 
regularly scheduled service. The vessel owner or operator also should 
include an explanation as to why the initial designation no longer 
applies. Each request for re-designation must be signed, and each 
vessel owner or operator must certify that the information submitted in 
the request for re-designation is true and correct to the best of the 
knowledge and belief of the requesting party.
    Until MARAD makes a subsequent determination with regard to a 
vessel owner's or operator's request for vessel re-designation, the 
prior vessel category will remain in place and be used by the vessel's 
owner or operator, USAID, USDA, and MARAD for CPA purposes. All 
requests for re-designation will be published in the Federal Register 
for public comment. Interested parties may comment on these proposed 
vessel re-designations within 10 calendar days of publication.
    Within 15 calendar days of the close of the comment period for a 
proposed vessel re-designation, MARAD will provide, in writing, a 
determination of a vessel's re-designation. Requests for re-designation 
become effective upon MARAD's written determination of a vessel's re-
designation.
    Vessel owners or operators may appeal MARAD's determination of a 
request for re-designation. Such appeals must be addressed in writing 
to the Maritime Administrator within 10 calendar days of receiving the 
determination. If there is an appeal, MARAD will issue a final written 
determination of re-designation within 30 calendar days of receiving 
the appeal, after consultation with the United States Department of 
State, USAID, and USDA.

Administrative Changes

    MARAD will, on its own initiative or at the request of a vessel 
owner or operator, undertake to make administrative changes to the list 
of vessels published on its Web site. Such administrative changes may 
include the self-designations and designation determinations as 
described above, and the following: (1) The change of the name of a 
current vessel; (2) the change of ownership of a current vessel solely 
to reflect the new owner of the vessel; (3) a typographical error; and 
(4) the deletion of a vessel due to change of flag or scrapping.

Calculating Time Periods for Compliance

    If any deadline listed in this section falls on a Saturday, Sunday, 
or legal holiday, the period in question will run until the end of the 
next day that is not a Saturday, Sunday or legal holiday.

MARAD List of Designations

    Subject to the procedures described above, MARAD will compile and 
maintain these self-designations, re-designations, and MARAD 
determinations into a list of vessels by category type, for the purpose 
of indicating which vessels are eligible for preference to carry cargo 
subject to 46 U.S.C. 55305 and 55314.
    In accordance with the parameters above, a current list of vessels 
by type will be published quarterly on MARAD's Web site, and will be 
amended periodically as administrative changes are made. No changes 
will be made to this list, other than by the procedures provided for 
above.

Prohibition of Dual Service

    Owners or operators of a vessel that engages in service that may be 
characterized as meeting more than one of the three vessel service 
categories must choose one category that reflects the predominant 
character of the vessel's service as measured by tonnage carried, 
routes served, number of voyages, the criteria above, or some other 
measurable criteria supporting the designation excluding vessel design.

Certification Requirements

    The procedures set forth in this Notice are intended to result in 
full and fair consideration of all applications by vessel owners or 
operators. These procedures are dependent upon vessel owners or 
operators providing full and accurate information to MARAD in support 
of their applications and/or requests for re-designation or in any 
comments we receive. To that end, we reiterate the requirement as set 
forth above that those submitting materials and/or comments to MARAD in 
these proceedings must certify that the information contained therein 
is true and correct to the best of their knowledge and belief.

Paperwork Reduction Act

    This notice involves information collection requirements subject to 
the Paperwork Reduction Act (PRA), specifically the self-designation 
documentation that vessel owners must send with respect to any vessel 
for which they choose to self-designate the type of service for the 
vessel, and, any subsequent voluntary quarterly requests for re-
designation. For the content of these information collection 
requirements, see the section of this notice entitled ``Self-
Designation Applications and Their Contents.''
    Title: Applications for Self-Designation of Vessels, and Vessel Re-
Designation.
    Need for Information: The information is required to administer the 
interagency Memorandum of Understanding (MOU). Regarding Procedures for 
Determining Vessel Service Categories for the Purpose of the Cargo 
Preference Act.
    Use of Information: The Maritime Administration would use the data 
submitted by vessel operators to create a list of Vessel Self-
Designations, and to determine whether it agreed or disagreed with a 
vessel owner's designation of a vessel. It will use data submitted with 
Re-designation Requests to determine whether or not a vessel

[[Page 47308]]

should be re-designated into a different service category.
    Frequency: For current vessel owners who choose to submit a self-
designation, the information collection would occur only once. Under 
the MOU, if a new vessel comes on line or vessel owner subsequently 
seeks to change its designation, a new application would have to be 
submitted. Optional vessel re-designation requests can be submitted 
quarterly.
    Respondents: It is estimated the owners or operators of up to 120 
U.S.-registered vessels, and an unknown but larger number of foreign-
registered vessels, could possibly apply for self-designation and/or 
re-designation. It is important to note that, under the MOU, vessel 
owners are not required to do so. Vessel owners who are satisfied with 
MARAD's existing designation presumably would not submit an 
application. Consequently, MARAD believes that a significantly smaller 
number than the maximum potential number of respondents will actually 
submit applications.
    Burden Estimate: This estimate assumes a range of between 10 and 
100 actual applications, in which case the number of burden hours 
involved would vary from 60-600 hours assuming six hours per 
application or 80-800 hours assuming eight hours per application. 
Assuming an approximate cost of $50 per hour to perform the information 
collection tasks, this would result in a range of costs from $3,000 to 
$40,000 for the self-designation application process. While MARAD 
believes that the actual number of applications received will be nearer 
the lower end of this range, the range is provided to account for the 
uncertainty surrounding the decisions of vessel owners.
    Form(s): There is no specific form used for collecting the 
information, but, the elements of the data elements of the information 
collection are listed in the Federal Register Notice above.
    Average Burden Hours per Respondent: Between six and eight hours 
per application.
    The Office of Management and Budget has approved this information 
collection on an emergency basis, as described under 5 CFR 1320.13, 
with Control Number 2133-0540.

DATES: Vessel status self-designations must be received by the Maritime 
Administration through the Department of Transportation docket office 
by 5 p.m. EDT on September 30, 2009. The Maritime Administrator intends 
to publish all self-designations no later than October 7, 2009. 
Interested parties may comment on these proposed self-designations 
within 10 calendar days of publication.

ADDRESSES: Self-designation applications and requests for re-
designation should prominently refer to docket number MARAD-2007-0001 
and may be submitted electronically via the Internet at https://www.regulations.gov. Self-designation applications and requests for re-
designation may also be submitted by hand or by express delivery to the 
Docket Clerk, U.S. Department of Transportation, Docket Operations, M-
30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, 
SE., Washington, DC 20590.
    All self-designation applications and requests for re-designation 
will become part of this docket and will be available for inspection 
and copying at the above address between 10 a.m. and 5 p.m., EDT or 
EST, as applicable, Monday through Friday, except Federal holidays. An 
electronic version of this document and all documents entered into this 
docket is available on the World Wide Web at https://www.regulations.gov.

Additional Docketing

    Upon receipt, each application will be assigned a unique docket 
number. All subsequent filings including public comments and appeal 
will be made public on that docket.

FOR FURTHER INFORMATION CONTACT: Jean E. McKeever, Associate 
Administrator for Business and Workforce Development, Maritime 
Administration, 1200 New Jersey Ave., SE., Washington, DC 20590; phone: 
(202) 366-5737; fax: (202) 366-6988; or e-mail: jean.mckeever@dot.gov. 
Persons who use a telecommunications device for the deaf (TDD) may call 
the Federal Information Relay Service (FIRS) at 1-800-877-8339 to 
contact the above individuals during business hours. The FIRS is 
available twenty-four hours a day, seven days a week, to leave a 
message or question with the above individuals. You will receive a 
reply during normal business hours.

    Dated: September 10, 2009.

    By Order of the Acting Maritime Administrator.

Christine S. Gurland,
Acting Secretary, Maritime Administration.

    For your information, the following is the text of the Memorandum 
of Understanding, dated September 4, 2009:

Memorandum of Understanding Among the United States Department of 
Agriculture, the United States Department of Transportation, and the 
United States Agency for International Development Regarding Procedures 
for Determining Vessel Service Categories for Purposes of the Cargo 
Preference Act

A. Background

    The Cargo Preference Act of 1954 (CPA), as amended, requires that 
Federal agencies take ``necessary and practicable'' steps to ensure 
that privately-owned U.S.-flag vessels transport at least 50 percent of 
the gross tonnage of cargo sponsored under the food assistance programs 
specified below, ``(computed separately for dry bulk carriers, dry 
cargo liners, and tankers) * * * to the extent such vessels are 
available at fair and reasonable rates for commercial vessels of the 
United States, in a manner that will ensure a fair and reasonable 
participation of commercial vessels of the United States in those 
cargoes by geographic areas.'' 46 U.S.C. 55305(b). An additional 25 
percent of gross tonnage is to be transported in accordance with the 
requirements of 46 U.S.C. 55314.
    The United States Agency for International Development (USAID) and 
the United States Department of Agriculture (USDA) provide food aid 
commodities to meet humanitarian food needs in the developing world 
under food assistance programs as specified below. USAID and USDA 
either contract directly with, or provide guidance to other entities 
for purposes of reimbursement regarding the transportation of such food 
aid through a competitive bidding system among private ocean carriers. 
The award of transportation contracts to ocean carriers is subject to 
the requirements of the Cargo Preference Act. This MOU covers the 
following food assistance programs: Titles I, II, and III programs of 
the Food for Peace Act, the Food for Progress program of the Food 
Security Act of 1985, the McGovern-Dole International Food for 
Education and Child Nutrition program of the Farm Security and Rural 
Investment Act of 2002, the Section 416(b) program of the Agricultural 
Act of 1949, and the Bill Emerson Humanitarian Trust of the Bill 
Emerson Humanitarian Trust Act.
    The Maritime Administration (MARAD), an operating administration of 
the Department of Transportation, is responsible for prescribing 
regulations and guidance governing the implementation of the CPA by 
other Government agencies, such as USAID

[[Page 47309]]

and USDA. 46 U.S.C. 55305(d); 49 CFR 1.66(e).
    USAID, USDA and the Maritime Administration are currently involved 
in litigation that challenges the proper interpretation and 
implementation of the Cargo Preference Act by these agencies for the 
Title II program under the Food for Peace Act (Title II), including 
Maersk Line Ltd v. Vilsack, U.S.D.C. (E.D. Va) 1:09cv747. As the 
parties acknowledged in a July 10, 2009 settlement of the Maersk 
litigation, the Government agencies involved in that litigation were 
unable to provide a unified Government position with respect to the 
proper implementation of a 2002 Department of Justice interpretation of 
the CPA.
    This document serves to clarify the position of the United States 
with respect to the requirements of the CPA, and describes the 
procedures that ensure that food aid commodities continue to be shipped 
throughout the developing world on United States registered ocean 
vessels. This document, therefore, represents the unified Government 
position on the proper method for implementing the Department of 
Justice's 2002 CPA determination. Accordingly, pursuant to the final 
paragraph of the July 10, 2009 Maersk settlement, the United States now 
has a unified legal position, and the procedures detailed in the Maersk 
Settlement will be superseded with the procedures discussed herein as 
of October 1, 2009.

B. Department of Justice Interpretation of the Cargo Preference Act

    In 2002, the Department of Justice, in connection with the 
resolution of earlier cargo preference litigation determined the 
litigation position of the United States with respect to, among other 
things, the proper manner for classifying vessels in accordance with 
the CPA. In the 2002 litigation, a dispute arose as to the proper 
interpretation of the terms ``dry bulk carrier'' and ``dry cargo 
liner'' as those terms are used in the CPA. The Department of Justice 
concluded that the CPA's requirement that at least 75 percent of 
agricultural commodities be shipped by U.S. flag vessels ``computed 
separately for dry bulk carriers, dry cargo liners and tankers'' 
mandates that the U.S. vessels be divided into those three categories 
and further, that the 75 percent minimum be computed separately for 
each category of vessel.
    Moreover, the Department of Justice concluded that the service 
offered determined a vessel's classification as a ``dry bulk carrier'' 
or ``dry cargo liner.''
    In its conclusion, the Department of Justice stated that:

    In defining the terms ``dry bulk carrier'' and ``dry cargo 
liner,'' the government believes that at the time of the adoption of 
this provision of the [CPA] these terms did not refer to the type of 
vessel but rather to the service of the vessel. ``Dry bulk carrier'' 
refers to irregular service while ``dry cargo liner'' refers to 
regularly scheduled service.

    The Department of Justice's 2002 conclusions continue in effect and 
provide the background principles governing the terms of the procedures 
described herein.

C. Determining Vessel Service Category

    Prior to October 1, 2009, all vessel owners or operators, including 
owners or operators of foreign flag vessels, may self-designate their 
service type as either a dry bulk carrier or dry cargo liner by vessel, 
and report this designation to MARAD in writing. The current treatment 
of tankers is not affected by this MOU, and no self-designation is 
required or expected for tankers.
    The owner or operator should include justification of such 
designation based upon the criteria listed in points a. through e. 
below, and the general character of the vessel's service--that is, 
irregular or regularly scheduled. On or before October 7, 2009, MARAD 
will publish these self-designations in the Federal Register for public 
comment. Interested parties may comment on these proposed self-
designations within 10 calendar days of publication.
    If MARAD disagrees with an owner's or operator's initial self-
designation, it will notify the owner or operator within 15 calendar 
days of the close of the public comment period. That notification will 
include MARAD's initial determination of vessel type category. Unless 
MARAD disagrees with an owner's or operator's initial self-designation 
in writing within 15 calendar days of the close of the public comment 
period, these self-designations will stay in effect until vessel owners 
or operators submit a request for re-designation.
    Vessel owners or operators may appeal to the Maritime Administrator 
within 10 calendar days of receiving the initial determination. MARAD 
will issue a final determination of designation within 30 calendar days 
of receiving the appeal, after consultation with the Department of 
State, USAID, and the Department of Agriculture.
    If MARAD disagrees with an owner's or operator's initial self-
designation, vessels will be treated in accordance with MARAD's initial 
determination through the appeal period starting from the time of the 
determination. However, if a solicitation and/or bid award occurs 
between the time in which self-designations are received by MARAD but 
prior to MARAD's written notification of initial determination, such 
solicitations will be based on the self-designation.
    Subject to the procedures described above, MARAD will compile these 
self-designations into a list of vessels by category type, for the 
purpose of indicating which vessels are eligible for preference to 
carry cargo subject to 46 U.S.C. 55305 and 55314. For vessels which 
MARAD does not receive a written self-designation by October 1, 2009, 
MARAD will determine a vessel-type designation based on the criteria 
listed in points a through e below.
    If a new vessel is brought online after October 1, 2009, the vessel 
owner or operator may voluntarily make an initial self-designation of 
the vessel's service category, following the same procedure as vessels 
which have been self-designated prior to October 1, 2009.
    Commencing October 1, 2009, vessel owners or operators may request 
re-designations from MARAD on a quarterly basis. Re-designation of any 
individual vessel can occur no more than twice per calendar year.
    All requests for re-designation should be made in writing. The 
vessel owner or operator should include justification of such requests 
for re-designation based upon the criteria listed in points a through e 
below, and the general character of the vessel's service, that is, 
irregular or regularly scheduled.
    In accordance with the Department of Justice's 2002 interpretation 
of the CPA, in determining whether a vessel may be appropriately 
categorized as a ``dry bulk carrier'' or ``dry cargo liner,'' MARAD 
will evaluate the vessel's service. In evaluating the service of a 
particular vessel, MARAD will consider the following criteria:
    a. The advertisement of service;
    b. Regularity of service;
    c. Offering of service to specific routes, and planned schedules;
    d. Characteristics of service other than vessel design;
    e. Historical performance in recent months.
    Until MARAD makes a subsequent determination with regard to a 
vessel owner's or operator's request for vessel re-designation, the 
prior vessel category will remain in place and be used by the vessel's 
owner or operator, USAID, USDA, and MARAD for CPA purposes. All 
requests for re-designation will be published in the Federal Register 
for public comment. Interested parties may comment on these proposed 
vessel re-designations within 10 calendar days of publication.

[[Page 47310]]

    Within 15 calendar days of the close of the comment period, MARAD 
will provide, in writing, a determination of a vessel's re-designation. 
Requests for re-designation become effective upon MARAD's written 
determination of a vessel's re-designation.
    Vessel owners or operators may appeal MARAD's determination of a 
request for re-designation in writing within 10 calendar days of 
receiving the determination. If there is an appeal, MARAD will issue a 
final written determination of re-designation within 30 calendar days 
of receiving the appeal, after consultation with the Department of 
State, USAID, and the Department of Agriculture.
    If any deadline listed in this section falls on a Saturday, Sunday, 
or legal holiday, the period in question will run until the end of the 
next day that is not a Saturday, Sunday or legal holiday.

1. Prohibition of Dual Service

    For purposes of the Maritime Administration list, owners or 
operators of a vessel that engages in service that may be characterized 
as meeting more than one of the three vessel service categories must 
choose one category that reflects the predominant character of the 
vessel's service as measured by tonnage carried, routes served, number 
of voyages, the criteria above, or some other measurable criteria 
supporting the designation excluding vessel design.

2. Vessel List by Type

    In accordance with the parameters above, a current list of vessels 
by type will be published quarterly on MARAD's Web site, and will be 
amended periodically as administrative changes are made. No changes 
will be made to this list, other than by the procedures provided under 
Sections C and D of this Memorandum of Understanding.

D. Administrative Changes

    The Maritime Administration will, on its own initiative or at the 
request of a vessel owner or operator, undertake to make administrative 
changes to the list of vessels published on its Web site. Such 
administrative changes may include the self-designations and 
designation determinations as described above, and the following: (1) 
The change of the name of a current vessel; (2) the change of ownership 
of a current vessel solely to reflect the new owner of the vessel; (3) 
a typographical error; and (4) the deletion of a vessel due to change 
of flag or scrapping.

E. Utilization of the Maritime Administration List of Vessels for Cargo 
Preference Compliance

    For purposes of determining compliance with the 75 percent 
requirement described above, each of the affected agencies (that is, 
the Maritime Administration, USAID, and USDA) will record contracts 
awarded under the food assistance programs specified above based solely 
upon the vessel service category for the vessel upon which the cargo is 
carried, for both foreign flag and U.S.-flag vessels, as shown on the 
Maritime Administration list, without regard to the nature of the cargo 
carried. The contract award date will be the basis of measurement for 
compliance purposes. Bills of lading quantities will be used to 
validate the compliance percentages.

F. Utilization of the Shipping Agency Statistical Data for Cargo 
Preference Compliance

    For purposes of communicating statistical data for preference cargo 
tonnage shipped by USAID and USDA, MARAD, USAID, and USDA hereby agree 
that, at the inception of this agreement, each will post to their 
respective Web sites data from shipping agency calculations. These 
calculations will be based solely upon the vessel service category for 
the vessel upon which the cargo is carried, (for both foreign flag and 
U.S.-flag vessels) as shown on the Maritime Administration list without 
regard to the nature of the cargo carried. The contract award date will 
be the basis of measurement for compliance purposes. Bills of lading 
quantities will be used to validate the compliance percentages. MARAD 
will monitor and verify the data and agrees to post on their Web site 
the same data in the same format as the shipping agencies. 
Reconciliations and adjustments will be resolved in advance of 
publication through interagency consultation, which, if necessary, may 
include the Office of Management and Budget.
    This memorandum is not intended to, and does not, create any right 
or benefit, substantive or procedural, enforceable at law or in equity 
against the United States, its departments, agencies, or other 
entities, its officers or employees, or any other person.
    This MOU may be executed in two or more counterparts, each of which 
shall be deemed an original, but all of which shall constitute one and 
the same instrument.
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David T. Matsuda
Acting Administrator
Maritime Administration
U.S. Department of Transportation
DATE:------------------------------------------------------------------
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James Michel

Counselor to the Agency
U.S. Agency for International
Development Administration
DATE:------------------------------------------------------------------
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Michael V. Michener
Administrator
Foreign Agricultural Service
U.S. Department of Agriculture
DATE:------------------------------------------------------------------

[FR Doc. E9-22171 Filed 9-14-09; 8:45 am]
BILLING CODE 4910-81-P