Application of Cargo Preference Requirements to the Federal Ship Financing Program, 22611-22613 [2015-09371]

Download as PDF Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices asabaliauskas on DSK5VPTVN1PROD with NOTICES natural quiet, as described in this notice and in the response to the previous comment. QT aircraft must adhere to the current route structure defined for air tour operations; no new areas of the Grand Canyon will be opened to air tours under this incentive. The agencies do not anticipate a significant increase in the number of air tours operated in the winter months when tour demand is low. The incentive should increase the proportion of QT aircraft used for air tours in the Dragon and Zuni Point corridors and decrease the number of louder non-QT aircraft. Air tour operators that convert or have converted to QT for the seasonal relief are anticipated to continue to operate those quieter fleets during the summer season. Seasonal relief allows air tour operators to save allocations that would have been used in the first quarter of the year and to use them during times of year when air tour demand is higher; therefore, there may be increases in the number of air tour flights at other times of year above the number that has been allowed under the allocation system. If an increase in the number of flights rises to the level that results in a cumulative increase in noise, the seasonal relief incentive will be modified to reduce noise or will be discontinued. Comment: Commenters suggest agencies mandate one ‘‘quiet day’’ per month. FAA and NPS Response: This suggestion would presumably involve a prohibition on air tours for one day each month, which is outside the scope of approved measures currently in place at the park and is not a QT incentive. Comment: One commenter called for assurance that incentives will not degrade substantial restoration of natural quiet. FAA and NPS Response: The agencies will ensure that this incentive does not diminish substantial restoration of natural quiet as required by NPATMA. Impact on air tour operations Comment: Commenters representing recreational and environmental interests suggest this is an attempt to increase number of operations by labeling them as quieter. The air tour interests express concern that operators who have already converted to QT may not see a permanent increase in their allocations. Commenters representing recreational and environmental interests noted that they expected to see flights shift from peak to off-peak as part of a QT incentive. One commenter expressed the view that the seasonal relief incentive will result in vigorous marketing of air tours in January through March. VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 FAA and NPS Response: Currently, air tour operators can use allocations at any time throughout the year based on the demand for air tours and individual business decisions. This incentive does not change that situation. The demand for air tours is expected to remain highest in the peak season. Comment: Commenters representing recreational and environmental interests advocated a cap on operations. FAA and NPS Response: Rather than imposing a numerical cap, the statutory noise conditions effectively provide a limit. Comment: Commenters asserted that more frequent flights will produce more air emissions. FAA and NPS Response: FAA and NPS air quality specialists do not expect air tours to significantly affect air quality in national parks. V. Implementation Steps The FAA and the NPS will use the quarterly reports that are currently required to be submitted by the operators to determine the number of QT flights flown during the first quarter that will not count against their annual allocations. The FAA will implement the incentive by amending the operations specifications of commercial air tour operators holding allocations in the Dragon and Zuni Point corridors to allow them to conduct air tours with QT aircraft without using an allocation for such tours in the specified seasonal time periods. The FAA and the NPS will cooperatively ensure that the statutory conditions protecting the park are met. VI. Environmental Considerations This action involving the FAA’s amendment of operations specifications is categorically excluded from more detailed environmental review because it would not have a significant effect on the environment. The FAA and the NPS have designed this incentive to ensure compliance with the statutory conditions that the cumulative impact of QT operating without allocations does not increase noise and that the incentive does not diminish the statutory mandate to achieve the substantial restoration of natural quiet at the park. PO 00000 22611 Issued in Hawthorne, CA, on March 19, 2015. Glen A. Martin, Regional Administrator, Western-Pacific Region, Federal Aviation Administration. Issued in Lakewood, CO, on March 23, 2015. Sue E. Masica, Regional Director, Intermountain Region, National Park Service. [FR Doc. 2015–09380 Filed 4–21–15; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration Sunshine Act Meetings; Unified Carrier Registration Plan Board of Directors Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice of Unified Carrier Registration Plan Board of Directors Meeting. AGENCY: The meeting will be held on May 7, 2015, from 12:00 Noon to 3:00 p.m., Eastern Daylight Time. PLACE: This meeting will be open to the public via conference call. Any interested person may call 1–877–422– 1931, passcode 2855443940, to listen and participate in this meeting. STATUS: Open to the public. MATTERS TO BE CONSIDERED: The Unified Carrier Registration Plan Board of Directors (the Board) will continue its work in developing and implementing the Unified Carrier Registration Plan and Agreement and to that end, may consider matters properly before the Board. TIME AND DATE: Mr. Avelino Gutierrez, Chair, Unified Carrier Registration Board of Directors at (505) 827–4565. FOR FURTHER INFORMATION CONTACT: Issued on: April 17, 2015. Larry W. Minor, Associate Administrator for Policy. [FR Doc. 2015–09462 Filed 4–20–15; 4:15 pm] BILLING CODE 4910–EX–P DEPARTMENT OF TRANSPORTATION Maritime Administration [Docket No. MARAD 2015–0049] Application of Cargo Preference Requirements to the Federal Ship Financing Program Maritime Administration, MARAD, Department of Transportation. AGENCY: Frm 00139 Fmt 4703 Sfmt 4703 E:\FR\FM\22APN1.SGM 22APN1 22612 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices Notice of Proposed Policy Clarification. ACTION: The Maritime Administration (MARAD) is seeking comments on a proposed policy clarification for the application of the Cargo Preference Act of 1954 (CPA 1954), 46 U.S.C. 55305, to applications, commitments and guarantees under MARAD’s Federal Ship Financing Program (Title XI), 46 U.S.C. Chapter 537. DATES: Comments may be submitted on or before May 22, 2015. ADDRESSES: You may submit comments identified by DOT Docket Number MARAD–2015–0049 by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Search MARAD– 2015–0049 and follow the instructions for submitting comments. • Email: Rulemakings.MARAD@ dot.gov. Include MARAD–2015–0049 in the subject line of the message. • Fax: (202) 493–2251. • Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE., West Building, Room W12–140, Washington, DC 20590. To confirm that your comments reached the facility, please enclose a stamped, self-addressed postcard or envelope. • Hand Delivery/Courier: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE., West Building, Room W12– 140, Washington, DC 20590. The Docket Management Facility is open 9:00 a.m. to 5:00 p.m., Monday through Friday, except on Federal holidays. SUMMARY: Note: If you fax, mail or hand deliver your input, you should include your name and a mailing address, an email address, or a telephone number in the body of your document so that you can be contacted if there are questions regarding your submission. If submitting inputs by mail or hand delivery, submit them in an unbound format, no larger than 8 1⁄2 by 11 inches, suitable for copying and electronic filing. asabaliauskas on DSK5VPTVN1PROD with NOTICES FOR FURTHER INFORMATION CONTACT: Owen J. Doherty, Associate Administrator for Business and Finance Development, Maritime Administration, 1200 New Jersey Avenue SE., Washington, DC 20590, (202) 366–9595, owen.doherty@dot.gov. SUPPLEMENTARY INFORMATION: After review of policies and practices regarding the application of the CPA 1954 to applications, commitments and guarantees under MARAD’s Title XI program, it was determined that applicants often lack a full understanding of those policies and practices, despite the issuance of an earlier policy clarification document (76 VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 FR 37402) in 2011. In response to applicant questions and input from program participants, this proposed policy clarification seeks to explain MARAD practices to better inform those seeking to benefit from Title XI. Section 1: What is Cargo Preference? The CPA 1954 mandates that shippers use U.S.-flag vessels to transport a portion of government-impelled, ocean borne cargoes. Through statutory amendments in 2008 to 46 U.S.C. 55305(b), the CPA 1954 was clarified to state that the statute applies whenever the U.S. Government provides financing in any way with Federal funds for the account of any person. MARAD, as the agency charged with implementing and overseeing compliance administration of the CPA 1954, previously determined that ‘‘financing in any way’’ includes Federal loan guarantee programs, such as Title XI. Section 2: What are the Cargo Preference requirements? There are both transportation and administrative requirements associated with the CPA 1954: Transportation: At least 50 percent of the gross tons of the equipment or materials which are transported by ocean under a given Title XI application, letter commitment and guarantee of obligations must be transported on privately-owned commercial vessels of the United States, to the extent those vessels are available at fair and reasonable rates. MARAD defines ‘‘gross ton’’ to mean a metric ton or cubic meter of cargo, by whichever measure the number is greater; that number is the standard by which compliance with the CPA 1954 will be evaluated. Administrative: For each covered shipment, consistent with 46 CFR 381.3, within thirty (30) days of the foreign export loading, the shipper (Title XI applicant or its representative) must submit a legible copy of a rated onboard ocean master bill of lading to MARAD. This requirement exists whether the particular shipment was transported aboard a U.S.-flag or a foreign-flag vessel. The bills of lading must be submitted to the Office of Cargo and Commercial Sealift, Maritime Administration, 1200 New Jersey Avenue SE., Washington, DC 20590 or via email to cargo.marad@dot.gov. The bills of lading or the transmittal cover must clearly state the Title XI application or loan guarantee to which they apply and must contain the following information: (1) The name of the vessel carrying the cargo(s); (2) The carrying vessel’s International Maritime PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 Organization (IMO) number; (3) The carrying vessel’s flag of registry; (4) The date of cargo loading; (5) The port of loading; (6) The port(s) of transshipment (if any); (7) The port of final destination; (8) A description of the cargo(s); (9) The gross weight of the cargo(s) in kilograms and the volume of the cargo(s) in cubic meters; and (10) The total ocean freight revenue in U.S. dollars. Section 3: When do the Cargo Preference requirements begin? The cargo preference requirements apply as soon as an application is submitted for Title XI financing. The requirements are therefore in place well before a decision is made on a Title XI application, a letter commitment is issued or a guarantee closing takes place. The CPA 1954 will generally apply, particularly for constructionperiod financing, to all foreign components that are transported by ocean and included in the ‘‘Actual Cost’’ of the project in accordance with 46 CFR 298.13(b). At the outset, all applicants will be required to submit a ‘‘transportation plan’’ for review by MARAD to ensure that sufficient planning has occurred to meet the cargo preference requirements. This requirement will be discussed with each applicant and potential applicant at the earliest possible time. Additionally, applicants and prospective applicants should discuss their plans to pursue a Title XI guarantee with shipyard constructing the vessel at the earliest possible time to ensure that the shipyard is aware and will comply with the associated cargo preference requirements. This programmatic administration is necessary to ensure compliance with the CPA 1954. Once MARAD issues a guarantee under Title XI, the ‘‘financed’’ cargoes included in that guarantee are within the meaning of the CPA 1954. However, this can be far too late to ensure compliance with the CPA 1954 requirements. This programmatic administration is similar to the manner in which Federal grants or contracts generally work; that is, if a party seeks reimbursement for an item obtained prior to the execution of a Federal grant or contract, that item still must be compliant with applicable Federal laws, such as the Buy American Act, regardless of the fact that the item had been procured before Federal financing was approved or confirmed. In the event that a Title XI application is not approved, there are no reimbursements for transportation costs associated with CPA 1954 compliance. E:\FR\FM\22APN1.SGM 22APN1 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices Rather it will be a cost associated with pursuing a Title XI loan guarantee. asabaliauskas on DSK5VPTVN1PROD with NOTICES Section 4: What if an available U.S.-flag vessel cannot be found or the total ocean freight rate appears too expensive? Only MARAD can issue a determination that no qualified U.S.-flag vessels are available at fair and reasonable rates. If a Title XI applicant, through diligent efforts, is unable to find a U.S.-flag carrier, without prior consultation with MARAD and a determination of non-availability of qualified U.S.-flag carriage, the applicant’s due diligence alone will not excuse that applicant from cargo preference requirements. Title XI applicants and prospective applicants are encouraged to communicate with U.S.-flag carriers at the earliest possible time to ensure the greatest degree of coordination and to obtain the best rates. In the event that a Title XI applicant or prospective applicant experiences difficulty obtaining U.S.flag service, or if it can only find partial U.S.-flag service, the applicant is encouraged to contact MARAD as soon as possible at cargo.marad@dot.gov or (202) 366–4610. With proper planning, U.S.-flag service can generally be obtained at fair and reasonable rates. Early planning and coordination are the keys to meeting cargo preference requirements in Title XI as in all other Federal programs. Section 5: What if non-compliance with Cargo Preference requirements occurs? At MARAD’s option, as the administrator of the Title XI program, non-compliant parties may be denied a letter commitment or, consistent with 46 U.S.C. 55305(d)(2)(B), may required to provide make-up cargoes for carriage aboard U.S.-flag vessels to offset the lost cargo carriage supporting work under the Title XI financing application. In extreme cases where knowing and willful violations occur, consistent with 46 U.S.C. 55305(d)(2)(C), MARAD can issue a civil penalty of not more than $25,000 for each violation, with each day of a continuing violation following the date of shipment counting as a separate violation. Additionally, cargo preference requirements are incorporated into Title XI letter commitments; therefore, failure to properly adhere to cargo preference requirements could impact MARAD’s ability to close on a Title XI guarantee because the recipient has not met its obligations under the letter commitment. However, with early planning and coordination with MARAD, no cargo preference violations VerDate Sep<11>2014 18:00 Apr 21, 2015 Jkt 235001 need occur under any Title XI application, letter commitment or guarantee. Section 6: What is the purpose of Cargo Preference? The CPA 1954 provides a revenue base that helps to retain and encourages a privately owned and operated U.S.flag merchant fleet. The U.S.-flag fleet is a vital resource, providing essential sealift capability to globally project and sustain the U.S. Armed Forces or support other national emergencies, maintaining a cadre of skilled seafarers available in time of national emergencies, and helping to protect U.S. economic interests. The U.S. maritime industry also supports thousands of seagoing, shore-based, and secondary, associated jobs, supporting the Nation’s economic growth. It is imperative that Federal programs, such as Title XI, and Title XI applicants and beneficiary shipyards, as members of the U.S. maritime industry, support this national priority through proper adherence to cargo preference requirements. Therefore, while the use of U.S.-flag vessels to carry 50 percent of the gross tons of ocean borne cargoes is the statutory minimum, MARAD, as the agency charged with administering both Title XI and the CPA 1954, encourages the use of U.S.-flag vessels more than the minimum whenever possible. Privacy Act In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to www.regulations.gov, as described in the system of records notice, DOT/ALL–14 FDMS, accessible through www.dot.gov/privacy. In order to facilitate comment tracking and response, we encourage commenters to provide their name, or the name of their organization; however, submission of names is completely optional. Whether or not commenters identify themselves, all timely comments will be fully considered. If you wish to provide comments containing proprietary or confidential information, please contact the agency for alternate submission instructions. (Authority: 46 U.S.C. 55305; 46 U.S.C. Ch. 537) * * * * * By Order of the Maritime Administrator. Dated: April 17, 2015. Thomas M. Hudson, Jr., Acting Secretary, Maritime Administration. [FR Doc. 2015–09371 Filed 4–21–15; 8:45 am] BILLING CODE 4910–81–P PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 22613 DEPARTMENT OF TRANSPORTATION Surface Transportation Board [Docket No. MCF 21062] Ace Express Coaches, LLC, et al.; Acquisition and Control; Certain Properties of Evergreen Trails, Inc. d/b/a Horizon Coach Lines AGENCY: Surface Transportation Board, DOT. Notice tentatively approving and authorizing finance transaction. ACTION: Ace Express Coaches, LLC (Buyer), and its affiliated parties (All Aboard America! Holdings, Inc. (AHI), Celerity AHI Holdings SPV, LLC (Celerity Holdings), Celerity Partners IV, LLC (Celerity Partners), and Industrial Bus Lines, Inc. (IBL)) (collectively, Applicants) have filed an application under 49 U.S.C. 14303 for the Buyer to acquire certain assets of Evergreen Trails, Inc. d/b/a Horizon Coach Lines (Seller), and for the continuance in control of the Buyer by AHI, Celerity Holdings, and Celerity Partners once the Buyer becomes a federally regulated motor carrier of passengers. The Board is tentatively approving and authorizing the transaction, and, if no opposing comments are timely filed, this notice will be the final Board action. Persons wishing to oppose the application must follow the rules at 49 CFR 1182.5 and 1182.8. DATES: Comments must be filed by June 8, 2015. Applicants may file a reply by June 22, 2015. If no comments are filed by June 8, 2015, this notice shall be effective on June 9, 2015. ADDRESSES: Send an original and 10 copies of any comments referring to Docket No. MCF 21062 to: Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, send one copy of comments to Applicants’ representative: Mark J. Andrews, Strasburger & Price, LLP, Suite 717, 1025 Connecticut Avenue NW., Washington, DC 20036. FOR FURTHER INFORMATION CONTACT: Matthew Bornstein: (202) 245–0385. Federal Information Relay Service (FIRS) for the hearing impaired: 1–800– 877–8339. SUPPLEMENTARY INFORMATION: The Buyer is a newly established limited liability company under the laws of Delaware.1 SUMMARY: 1 Concurrently with their application, the parties also filed a request for interim approval under 49 U.S.C. 14303(i). In a decision served on April 8, 2015, in related Docket No. MCF 21062 TA, interim approval was granted, effective on the service date of that decision. E:\FR\FM\22APN1.SGM 22APN1

Agencies

[Federal Register Volume 80, Number 77 (Wednesday, April 22, 2015)]
[Notices]
[Pages 22611-22613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09371]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Maritime Administration

[Docket No. MARAD 2015-0049]


Application of Cargo Preference Requirements to the Federal Ship 
Financing Program

AGENCY: Maritime Administration, MARAD, Department of Transportation.

[[Page 22612]]


ACTION: Notice of Proposed Policy Clarification.

-----------------------------------------------------------------------

SUMMARY: The Maritime Administration (MARAD) is seeking comments on a 
proposed policy clarification for the application of the Cargo 
Preference Act of 1954 (CPA 1954), 46 U.S.C. 55305, to applications, 
commitments and guarantees under MARAD's Federal Ship Financing Program 
(Title XI), 46 U.S.C. Chapter 537.

DATES: Comments may be submitted on or before May 22, 2015.

ADDRESSES: You may submit comments identified by DOT Docket Number 
MARAD-2015-0049 by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Search MARAD-2015-0049 and follow the instructions for submitting 
comments.
     Email: Rulemakings.MARAD@dot.gov. Include MARAD-2015-0049 
in the subject line of the message.
     Fax: (202) 493-2251.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., West Building, Room W12-
140, Washington, DC 20590. To confirm that your comments reached the 
facility, please enclose a stamped, self-addressed postcard or 
envelope.
     Hand Delivery/Courier: Docket Management Facility, U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., West 
Building, Room W12-140, Washington, DC 20590. The Docket Management 
Facility is open 9:00 a.m. to 5:00 p.m., Monday through Friday, except 
on Federal holidays.

    Note: If you fax, mail or hand deliver your input, you should 
include your name and a mailing address, an email address, or a 
telephone number in the body of your document so that you can be 
contacted if there are questions regarding your submission. If 
submitting inputs by mail or hand delivery, submit them in an 
unbound format, no larger than 8 \1/2\ by 11 inches, suitable for 
copying and electronic filing.


FOR FURTHER INFORMATION CONTACT: Owen J. Doherty, Associate 
Administrator for Business and Finance Development, Maritime 
Administration, 1200 New Jersey Avenue SE., Washington, DC 20590, (202) 
366-9595, owen.doherty@dot.gov.

SUPPLEMENTARY INFORMATION: After review of policies and practices 
regarding the application of the CPA 1954 to applications, commitments 
and guarantees under MARAD's Title XI program, it was determined that 
applicants often lack a full understanding of those policies and 
practices, despite the issuance of an earlier policy clarification 
document (76 FR 37402) in 2011. In response to applicant questions and 
input from program participants, this proposed policy clarification 
seeks to explain MARAD practices to better inform those seeking to 
benefit from Title XI.

 Section 1: What is Cargo Preference?

    The CPA 1954 mandates that shippers use U.S.-flag vessels to 
transport a portion of government-impelled, ocean borne cargoes. 
Through statutory amendments in 2008 to 46 U.S.C. 55305(b), the CPA 
1954 was clarified to state that the statute applies whenever the U.S. 
Government provides financing in any way with Federal funds for the 
account of any person. MARAD, as the agency charged with implementing 
and overseeing compliance administration of the CPA 1954, previously 
determined that ``financing in any way'' includes Federal loan 
guarantee programs, such as Title XI.

 Section 2: What are the Cargo Preference requirements?

    There are both transportation and administrative requirements 
associated with the CPA 1954:
    Transportation: At least 50 percent of the gross tons of the 
equipment or materials which are transported by ocean under a given 
Title XI application, letter commitment and guarantee of obligations 
must be transported on privately-owned commercial vessels of the United 
States, to the extent those vessels are available at fair and 
reasonable rates. MARAD defines ``gross ton'' to mean a metric ton or 
cubic meter of cargo, by whichever measure the number is greater; that 
number is the standard by which compliance with the CPA 1954 will be 
evaluated.
    Administrative: For each covered shipment, consistent with 46 CFR 
381.3, within thirty (30) days of the foreign export loading, the 
shipper (Title XI applicant or its representative) must submit a 
legible copy of a rated on-board ocean master bill of lading to MARAD. 
This requirement exists whether the particular shipment was transported 
aboard a U.S.-flag or a foreign-flag vessel. The bills of lading must 
be submitted to the Office of Cargo and Commercial Sealift, Maritime 
Administration, 1200 New Jersey Avenue SE., Washington, DC 20590 or via 
email to cargo.marad@dot.gov. The bills of lading or the transmittal 
cover must clearly state the Title XI application or loan guarantee to 
which they apply and must contain the following information: (1) The 
name of the vessel carrying the cargo(s); (2) The carrying vessel's 
International Maritime Organization (IMO) number; (3) The carrying 
vessel's flag of registry; (4) The date of cargo loading; (5) The port 
of loading; (6) The port(s) of trans-shipment (if any); (7) The port of 
final destination; (8) A description of the cargo(s); (9) The gross 
weight of the cargo(s) in kilograms and the volume of the cargo(s) in 
cubic meters; and (10) The total ocean freight revenue in U.S. dollars.

 Section 3: When do the Cargo Preference requirements begin?

    The cargo preference requirements apply as soon as an application 
is submitted for Title XI financing. The requirements are therefore in 
place well before a decision is made on a Title XI application, a 
letter commitment is issued or a guarantee closing takes place. The CPA 
1954 will generally apply, particularly for construction-period 
financing, to all foreign components that are transported by ocean and 
included in the ``Actual Cost'' of the project in accordance with 46 
CFR 298.13(b). At the outset, all applicants will be required to submit 
a ``transportation plan'' for review by MARAD to ensure that sufficient 
planning has occurred to meet the cargo preference requirements. This 
requirement will be discussed with each applicant and potential 
applicant at the earliest possible time. Additionally, applicants and 
prospective applicants should discuss their plans to pursue a Title XI 
guarantee with shipyard constructing the vessel at the earliest 
possible time to ensure that the shipyard is aware and will comply with 
the associated cargo preference requirements.
    This programmatic administration is necessary to ensure compliance 
with the CPA 1954. Once MARAD issues a guarantee under Title XI, the 
``financed'' cargoes included in that guarantee are within the meaning 
of the CPA 1954. However, this can be far too late to ensure compliance 
with the CPA 1954 requirements. This programmatic administration is 
similar to the manner in which Federal grants or contracts generally 
work; that is, if a party seeks reimbursement for an item obtained 
prior to the execution of a Federal grant or contract, that item still 
must be compliant with applicable Federal laws, such as the Buy 
American Act, regardless of the fact that the item had been procured 
before Federal financing was approved or confirmed.
    In the event that a Title XI application is not approved, there are 
no reimbursements for transportation costs associated with CPA 1954 
compliance.

[[Page 22613]]

Rather it will be a cost associated with pursuing a Title XI loan 
guarantee.

 Section 4: What if an available U.S.-flag vessel cannot be found or 
the total ocean freight rate appears too expensive?

    Only MARAD can issue a determination that no qualified U.S.-flag 
vessels are available at fair and reasonable rates. If a Title XI 
applicant, through diligent efforts, is unable to find a U.S.-flag 
carrier, without prior consultation with MARAD and a determination of 
non-availability of qualified U.S.-flag carriage, the applicant's due 
diligence alone will not excuse that applicant from cargo preference 
requirements. Title XI applicants and prospective applicants are 
encouraged to communicate with U.S.-flag carriers at the earliest 
possible time to ensure the greatest degree of coordination and to 
obtain the best rates. In the event that a Title XI applicant or 
prospective applicant experiences difficulty obtaining U.S.-flag 
service, or if it can only find partial U.S.-flag service, the 
applicant is encouraged to contact MARAD as soon as possible at 
cargo.marad@dot.gov or (202) 366-4610. With proper planning, U.S.-flag 
service can generally be obtained at fair and reasonable rates. Early 
planning and coordination are the keys to meeting cargo preference 
requirements in Title XI as in all other Federal programs.

 Section 5: What if non-compliance with Cargo Preference requirements 
occurs?

    At MARAD's option, as the administrator of the Title XI program, 
non-compliant parties may be denied a letter commitment or, consistent 
with 46 U.S.C. 55305(d)(2)(B), may required to provide make-up cargoes 
for carriage aboard U.S.-flag vessels to offset the lost cargo carriage 
supporting work under the Title XI financing application. In extreme 
cases where knowing and willful violations occur, consistent with 46 
U.S.C. 55305(d)(2)(C), MARAD can issue a civil penalty of not more than 
$25,000 for each violation, with each day of a continuing violation 
following the date of shipment counting as a separate violation. 
Additionally, cargo preference requirements are incorporated into Title 
XI letter commitments; therefore, failure to properly adhere to cargo 
preference requirements could impact MARAD's ability to close on a 
Title XI guarantee because the recipient has not met its obligations 
under the letter commitment. However, with early planning and 
coordination with MARAD, no cargo preference violations need occur 
under any Title XI application, letter commitment or guarantee.

 Section 6: What is the purpose of Cargo Preference?

    The CPA 1954 provides a revenue base that helps to retain and 
encourages a privately owned and operated U.S.-flag merchant fleet. The 
U.S.-flag fleet is a vital resource, providing essential sealift 
capability to globally project and sustain the U.S. Armed Forces or 
support other national emergencies, maintaining a cadre of skilled 
seafarers available in time of national emergencies, and helping to 
protect U.S. economic interests. The U.S. maritime industry also 
supports thousands of sea-going, shore-based, and secondary, associated 
jobs, supporting the Nation's economic growth. It is imperative that 
Federal programs, such as Title XI, and Title XI applicants and 
beneficiary shipyards, as members of the U.S. maritime industry, 
support this national priority through proper adherence to cargo 
preference requirements. Therefore, while the use of U.S.-flag vessels 
to carry 50 percent of the gross tons of ocean borne cargoes is the 
statutory minimum, MARAD, as the agency charged with administering both 
Title XI and the CPA 1954, encourages the use of U.S.-flag vessels more 
than the minimum whenever possible.

Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, to www.regulations.gov, as described in the 
system of records notice, DOT/ALL-14 FDMS, accessible through 
www.dot.gov/privacy. In order to facilitate comment tracking and 
response, we encourage commenters to provide their name, or the name of 
their organization; however, submission of names is completely 
optional. Whether or not commenters identify themselves, all timely 
comments will be fully considered. If you wish to provide comments 
containing proprietary or confidential information, please contact the 
agency for alternate submission instructions.
    (Authority: 46 U.S.C. 55305; 46 U.S.C. Ch. 537)
* * * * *

    By Order of the Maritime Administrator.

    Dated: April 17, 2015.
Thomas M. Hudson, Jr.,
Acting Secretary, Maritime Administration.
[FR Doc. 2015-09371 Filed 4-21-15; 8:45 am]
BILLING CODE 4910-81-P