Cargo Securing Manuals, 27992-28018 [2016-10725]

Download as PDF 27992 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations approved by the Boeing Organization Designation Authorization (ODA) with an FAA Form 8100–9. (2) Repairs were installed for damage other than cracking that have been re-evaluated and approved by the Boeing ODA with an FAA Form 8100–9 that includes an alternative method of compliance (AMOC) statement to paragraph (h) of this AD. modified locations, which support compliance with 14 CFR 121.1109(c)(2) or 129.109(b)(2). As airworthiness limitations, these inspections are required by maintenance and operational rules. It is therefore unnecessary to mandate them in this AD. Deviations from these inspections require FAA approval, but do not require an alternative method of compliance. (h) Repair If any cracking is found during any inspection required by paragraph (g) of this AD: Before further flight, repair the cracking including doing an open hole high frequency eddy current (HFEC) inspection for cracking of the holes, in accordance with Part 3 of the Accomplishment Instructions of Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, except as required by paragraph (i)(1) of this AD. Repair of any crack terminates the initial and repetitive inspection requirements of paragraph (g) of this AD for the repaired area only. If any cracking is found during any inspection required by this paragraph, before further flight, repair using a method approved in accordance with the procedures specified in paragraph (l) of this AD. (l) Alternative Methods of Compliance (AMOCs) (i) Exceptions to Service Information Specifications (1) Where Part 3 and Part 4 of the Accomplishment Instructions of Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, specifies contacting Boeing for repair instructions: Before further flight, repair using a method approved in accordance with the procedures specified in paragraph (l) of this AD. (2) Where Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, specifies a compliance time ‘‘after the original issue date of this service bulletin,’’ this AD requires compliance within the specified time after the effective date of this AD. (3) Where the Condition column of table 1 of paragraph 1.E., ‘‘Compliance,’’ of Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, specifies a reference point ‘‘on the original issue date of this service bulletin,’’ for this AD the corresponding reference point is on the effective date of this AD. mstockstill on DSK3G9T082PROD with RULES (j) Optional Preventive Modification Modification of an inspection area specified in paragraph (g) of this AD, including open hole and surface HFEC inspections for cracking of the area to be modified, in accordance with Part 4 of the Accomplishment Instructions of Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, except as required by paragraph (i)(1) of this AD, terminates the repetitive inspections required by paragraph (g) of this AD at the modified location only. (k) Post-Repair and Post-Modification Inspections Tables 4 and 5 of paragraph 1.E., ‘‘Compliance,’’ of Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, specify post-modification airworthiness limitation inspections in compliance to 14 CFR 25.571(a)(3) at the VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 (1) The Manager, Los Angeles Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to: 9-ANM-LAACO-AMOCREQUESTS@faa.gov. (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/ certificate holding district office. (3) An AMOC that provides an acceptable level of safety may be used for any repair required by this AD if it is approved by Boeing Commercial Airplanes ODA that has been authorized by the Manager, Los Angeles ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD. (4) Except as required by paragraph (i)(1) of this AD: Where Part 2, Part 3, and Part 4 of the Accomplishment Instructions of Boeing Alert Service Bulletin 737–53A1339, dated August 12, 2014, contains steps that are labeled as RC, the provisions of paragraphs (l)(4)(i) and (l)(4)(ii) of this AD apply. (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures. (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator’s maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition. (m) Related Information For more information about this AD, contact Galib Abumeri, Aerospace Engineer, Airframe Branch, ANM–120L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, California 90712–4137; phone: 562–627– 5324; fax: 562–627–5210; email: galib.abumeri@faa.gov. (n) Material Incorporated by Reference (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 paragraph under 5 U.S.C. 552(a) and 1 CFR part 51. (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise. (i) Boeing Alert Service Bulletin 737– 53A1339, dated August 12, 2014. (ii) Reserved. (3) For Boeing service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H–65, Seattle, WA 98124–2207; telephone 206–544–5000, extension 1; fax 206–766– 5680; Internet https:// www.myboeingfleet.com. (4) You may view this service information at FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221. (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to: https://www.archives. gov/federal-register/cfr/ibr-locations.html. Issued in Renton, Washington, on April 28, 2016. Dionne Palermo, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. 2016–10524 Filed 5–6–16; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Parts 97 and 160 46 CFR Part 97 [Docket No. USCG–2000–7080] RIN 1625–AA25 [Formerly RIN 2115–AF97] Cargo Securing Manuals Coast Guard, DHS. Interim rule and request for comment. AGENCY: ACTION: The Coast Guard is issuing an interim rule to require U.S. and foreign self-propelled cargo vessels of 500 gross tons or more, traveling on international voyages and carrying cargo that is other than solid or liquid bulk cargo, to have cargo securing manuals (CSMs) on board. The rule also requires those vessels to comply with certain provisions of the International Convention for the Safety of Life at Sea, 1974 as amended (SOLAS), authorizes recognized classification societies or other approval authorities to review and approve CSMs on behalf of the Coast Guard; and prescribes when and how SUMMARY: E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations the loss or jettisoning of cargo at sea must be reported. The Coast Guard requests public comment on its intention to extend, in a subsequent final rule, this interim rule’s requirement for vessel CSMs to self-propelled cargo vessels under 500 gross tons, if these vessels carry dangerous goods in packaged form on international voyages. This interim rule promotes the Coast Guard’s maritime safety and stewardship (environmental protection) missions, helps fulfill U.S. treaty obligations, and could help prevent or mitigate the consequences of vessel cargo loss. DATES: This interim rule is effective June 8, 2016. Comments must be received by August 8, 2016. The incorporation by reference of certain documents in this rule is approved by the Director of the Federal Register as of June 8, 2016. ADDRESSES: You may submit comments identified by docket number USCG– 2000–7080 using the Federal eRulemaking Portal at https:// www.regulations.gov. See the ‘‘Public Participation and Request for Comments’’ portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments. FOR FURTHER INFORMATION CONTACT: For information about this document, call or email Mr. Ken Smith, Project Manager, U.S. Coast Guard Headquarters, Vessel and Facility Operating Standards Division, Commandant (CG–OES–2); telephone 202–372–1413, email Ken.A.Smith@uscg.mil. SUPPLEMENTARY INFORMATION: mstockstill on DSK3G9T082PROD with RULES Table of Contents for Preamble I. Public Participation and Comments II. Abbreviations III. Basis and Purpose IV. Background and Regulatory History V. Summary of the Rule VI. Discussion of Comments on SNPRM and Changes VII. Incorporation by Reference VIII. Regulatory Analyses A. Regulatory Planning and Review B. Small Entities C. Assistance for Small Entities D. Collection of Information E. Federalism F. Unfunded Mandates Reform Act G. Taking of Private Property H. Civil Justice Reform I. Protection of Children J. Indian Tribal Governments K. Energy Effects L. Technical Standards M. Environment I. Public Participation and Comments We view public participation as essential to effective rulemaking, and VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 27993 will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. We encourage you to submit comments through the Federal eRulemaking Portal at https:// www.regulations.gov. If your material cannot be submitted using https:// www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions. Documents mentioned in this notice, and all public comments, are in our online docket at https://www.regulations.gov and can be viewed by following that Web site’s instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published. We accept anonymous comments. All comments received will be posted without change to https:// www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, you may review a Privacy Act notice regarding the Federal Docket Management System in the March 24, 2005, issue of the Federal Register (70 FR 15086). We are not planning to hold a public meeting but will consider doing so if public comments indicate a meeting would be helpful. We would issue a separate Federal Register notice to announce the date, time, and location of such a meeting. NVIC Navigation and Vessel Inspection Circular OMB Office of Management and Budget RFA Regulatory Flexibility Act of 1980 § Section Symbol SANS Ship Arrival Notification System SBA Small Business Administration SNPRM Supplemental Notice of Proposed Rulemaking SOLAS International Convention for the Safety of Life at Sea, 1974 as amended U.S.C. United States Code WSC World Shipping Council II. Abbreviations IV. Background and Regulatory History This rule aims to help ensure that maritime cargo is properly secured. A recent survey by the World Shipping Council (WSC) estimated that an average of 1,679 containers are lost overboard annually.1 The number of damaged and lost containers has risen over the years due to the increased traffic in containerized cargo and the increasing size of containerships. Several incidents since the early 1990s demonstrated that improperly secured cargo can cause serious injury or death, vessel loss, property damage, and environmental damage. For example, a Coast Guard board of inquiry ABS American Bureau of Shipping BLS U.S. Bureau of Labor Statistics CFR Code of Federal Regulations CSAP Cargo Safe Access Plan CSM Cargo Securing Manual CSS Code Code of Safe Practice for Cargo Stowage and Securing E.O. Executive Order FR Federal Register FRFA Final Regulatory Flexibility Analysis IMO International Maritime Organization IRFA Initial Regulatory Flexibility Analysis MARAD U.S. Department of Transportation’s Maritime Administration MBARI Monterey Bay Aquarium Research Institute MSC Maritime Safety Committee MISLE Marine Information for Safety and Law Enforcement NAICS North American Industry Classification System NPRM Notice of Proposed Rulemaking PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 III. Basis and Purpose Sections 2103 and 3306 of Title 46, United States Code (U.S.C.), provide the statutory basis for this rulemaking. Section 2103 gives the Secretary of the department in which the Coast Guard is operating general regulatory authority to implement Subtitle II (Chapters 21 through 147) of Title 46, which includes statutory requirements in 46 U.S.C. Chapter 33 for inspecting the vessels to which this rulemaking applies. Section 3306 gives the Secretary authority to regulate an inspected vessel’s operation, fittings, equipment, appliances, and other items in the interest of safety. The Secretary’s authority under both statutes has been delegated to the Coast Guard in DHS Delegation No. 0170.1, para. II (92.a) and (92.b). The purpose of this rule is to align Coast Guard regulations with the requirements for cargo securing manuals in the International Convention for the Safety of Life at Sea, 1974 as amended (SOLAS), and apply those requirements to certain self-propelled U.S. cargo vessels operating anywhere in the world, and to certain foreign-flagged self-propelled cargo vessels operating in U.S. waters. Another purpose of this rule is to specify when and how the loss or jettisoning of cargo at sea must be reported. 1 Survey report is on WSC Web site: https://www. worldshipping.org/industry-issues/safety/ Containers_Lost_at_Sea_-_2014_Update_Final_for_ Dist.pdf. E:\FR\FM\09MYR1.SGM 09MYR1 27994 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations concluded that the loss of 21 containers—4 of which contained toxic arsenic trioxide—off the coast of New Jersey in 1992 was caused by cargosecuring failures, bad weather, and human error.2 With the support of other International Maritime Organization (IMO) member governments, the United States led a proposal to include new requirements for cargo securing manuals (CSMs) in SOLAS. In 1994, the IMO amended SOLAS 3 to provide that, after 1997, vessels of 500 gross tons or more engaged in international trade and carrying cargo other than solid or liquid bulk material must carry a flag stateapproved CSM; load, stow, and secure cargo in compliance with the CSM; and meet strength requirements for securing devices and arrangements. The SOLAS CSM requirements are included as an annex to a Coast Guard guidance document issued in 1997,4 but a vessel owner or operator’s compliance with that guidance is only voluntary. This interim rule makes compliance with the SOLAS standards mandatory for self-propelled vessels over 500 gross tons on international voyages that are subject to SOLAS. Previously in this rulemaking, we issued a notice of proposed rulemaking (NPRM) 5 in 2000 and a supplemental notice of proposed rulemaking (SNPRM) 6 in 2013. Although it was not part of this rulemaking, in 1999 we held a public meeting on topics related to cargo securing.7 In the SNPRM, we discussed the comments we received on the 2000 NPRM and public input from the 1999 meeting. We discuss the comments we received on the 2013 SNPRM later in this preamble. V. Summary of the Rule mstockstill on DSK3G9T082PROD with RULES This section summarizes the changes made in this interim rule. 33 CFR part 97—Rules for the Safe Operation of Vessels, Stowage and Securing of Cargoes. The interim rule adds this part, which is structured to allow for future regulations covering other aspects of vessel operation and cargo stowage and securing. At this 2 See NVIC 10–97 (Nov. 7, 1997), ‘‘Guidelines for Cargo Securing Manual Approval,’’ available at https://www.uscg.mil/hq/cg5/nvic/pdf/1997/n1097.pdf. 3 See SOLAS, Ch. VI/5.6 and Ch. VII/5. 4 NVIC 10–97. 5 65 FR 75201 (Dec. 1, 2000). 6 78 FR 68784 (Nov. 15, 2013). Although not part of this rulemaking, in 1999 we announced (64 FR 1648; Jan. 11, 1999, docket USCG–1998–4951) and held a public meeting on related topics. Comments received at that meeting were discussed in the SNPRM, 78 FR at 68786, col. 2. 7 64 FR 1648 (Jan. 11, 1999); docket USCG–1998– 4951. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 time, the part contains only subpart A, which deals with CSMs. Section 97.100 contains the applicability provisions of subpart A and provides for electronic submission of any documents required by the part. Subpart A applies to self-propelled cargo vessels of 500 gross tons or more traveling on international voyages and carrying any cargo other than solid or liquid bulk cargo. We expect very few vessels to be affected by the new requirements, as most foreign vessels operating in U.S. waters are already subject to their flag state’s SOLAS CSMaligned requirements, and all U.S. vessels already voluntarily comply with those requirements in order to obtain SOLAS certificates that are necessary for entering foreign ports. Subpart A also applies to self-propelled vessels less than 500 gross tons if their owners or operators choose voluntarily to have it apply to them and submit CSMs for approval. We have revised the text of § 97.100 as it appeared in the SNPRM by removing seagoing barges and other non-self propelled vessels from the applicability of subpart A, which were inadvertently included in the proposed regulatory text of the SNPRM. This interim rule applies only to selfpropelled cargo vessels that are subject to SOLAS Chapter VI/5.6 or Chapter VII/5. As we discussed in Part V, Discussion of Comments, in our SNPRM, a commenter suggested extending the applicability of subpart A to selfpropelled cargo vessels below 500 gross tons carrying dangerous goods in packaged form on international voyages. We agree with the commenter’s assessment that the cargo securing manual requirements of Chapter VII/5 of SOLAS apply to all vessels covered by other SOLAS provisions and to vessels below 500 gross tons that carry dangerous goods in packaged form. As previously stated, one of our intentions in this rule is to align our regulations with SOLAS requirements for cargo securing manuals, and therefore we propose modifying the final rule to more accurately align with SOLAS by applying it to self-propelled cargo vessels less than 500 gross tons carrying dangerous goods in packaged form on international voyages, as well as to larger vessels. We specifically request public comment on that proposed change. Section 97.105 defines terms used in subpart A, and § 97.110 provides for the incorporation in subpart A, by reference, of pertinent IMO circulars describing how vessels may comply with the SOLAS CSM requirements, as PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 well as an IMO resolution providing guidelines for third parties acting on behalf of a government agency like the Coast Guard. Section 97.115 requires any accidental loss or deliberate jettisoning of a container or other cargo at sea to be reported immediately under 33 CFR 160.215. This is because any such loss or jettisoning creates a ‘‘hazardous condition’’ within the meaning of 33 CFR 160.204. The section also requires the loss or jettisoning of cargo containing hazardous material to be reported as soon as possible in accordance with the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration regulations at 49 CFR 176.48. Section 97.120 requires each vessel to which subpart A applies to have a flag state-approved CSM that complies with applicable IMO resolutions. Coast Guard personnel may board any vessel in U.S. waters to verify compliance with this section. Note that any container vessel with a keel laid on or after January 1, 2015, needs to include a cargo safe access plan. Under the applicable IMO guidance, such a plan must provide detailed information on safe access for persons stowing and securing cargo on vessels that are specifically designed and fitted for carrying containers. Section 97.200 describes how a U.S.flagged vessel owner or operator applies for Coast Guard approval of the vessel’s CSM. Third-party approval authorities review and approve CSMs on the Coast Guard’s behalf. This section also describes the contents of approval statements, the procedure to follow when a CSM is disapproved, and document retention requirements. Section 97.205 describes when a CSM must be resubmitted for approval, and § 97.210 contains provisions for appeal from a CSM approval authority’s decision. Section 97.300 designates the organizations that are initially authorized to act as CSM approval authorities, and §§ 97.305 through 97.315 discuss who may request that authorization in the future, the criteria for authorization, and the requirements for approval authorities. We modified this section from what we originally published in the SNPRM by removing specific reference to the American Bureau of Shipping (ABS) and Lloyd’s Register, because they are already included on the list of recognized classification societies to which the Coast Guard has delegated authority for the issuance of a Cargo Ship Safety Equipment Certificate in accordance with 46 CFR 8.320(b)(4) and covered E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES under the paragraph recognizing those classification societies. Section 97.320 provides for the revocation of authorization if an approval authority fails to maintain standards acceptable to the Coast Guard. 33 CFR part 160—Ports and Waterways Safety—General. The only change made to part 160 is an amendment to § 160.215, to prescribe the information to be reported when a hazardous condition is created by the loss or jettisoning of cargo. 46 CFR part 97—[Cargo and Miscellaneous Vessel] Operations. The interim rule amends the subpart 97.12 operational rules for vessels carrying bulk solid cargoes by adding § 97.12–10, which requires such vessels to have on board a CSM that complies with 33 CFR part 97. VI. Discussion of Comments on SNPRM and Changes The SNPRM drew public comments from 12 sources: 7 Individuals (one of whom submitted 2 comments, which we consider together), 2 barge companies, 1 shipping industry organization, 1 trade association, and 1 environmental advocacy organization. The docket also contains 1 comment from another Federal agency. General. All three organizations and six individuals expressed support for the Coast Guard’s proposal. The environmental advocacy organization and two individuals said that the loss of cargo containers is a serious problem. The organization said container loss has an immediate impact by changing deep sea habitats, and a long term impact by changing the natural distribution of species, including the threat of introducing invasive species. One individual said container loss is a major threat to the environment, to pleasure craft, and to commercial shipping. This commenter suggested that the insurance industry should welcome our proposal because of the economic impact of container losses. The other individual said we should require containers to be weighed so that weight can be distributed for safety. We share these commenters’ concern for the safety and environmental hazards that can be caused by the loss of containers or other cargo at sea, and we agree with most of their comments. However, we decline to require containers to be weighed, because this information is the subject of several existing Federal and International Maritime Organization (IMO) requirements. The Occupational Safety and Health Administration requires a container to be weighed before it can be VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 handled by U.S. workers, and the Department of Transportation has stringent notification and certification requirements for intermodal containers.8 With the Coast Guard’s full participation, the IMO recently amended an international convention to require shippers to verify a container’s gross mass to a vessel’s master before it is loaded on board.9 The existence of these requirements makes it unnecessary for the Coast Guard to issue separate and potentially overlapping provisions on the topic. The shipping organization said that, whereas the SNPRM based its cost analysis on an IMO estimate of 4,000 containers lost at sea per year worldwide, the shipping organization’s own analysis found that, on average, only 1,679 containers are lost at sea each year. We appreciate the shipping organization’s analysis and are using their most current estimate in the regulatory analysis for this interim rule. Please see Section VIII, Regulatory Analyses, for details. The two towing companies expressed appreciation that we do not propose to regulate cargo securing on barges in coastwise trade, but opposed our SNPRM’s proposed extension 10 of such regulations to seagoing barges in international commerce. The companies said that barges have a strong safety record and are not subject to cargo securing requirements under SOLAS. Therefore, they should not be required to undertake the work of developing unique CSMs for each type of cargo. They also pointed out that, if seagoing barges are included, the universe of affected vessels will be far greater than the 26 U.S.-flagged vessels the Coast Guard estimates will be impacted in its regulatory analysis. They specifically requested that the Coast Guard clarify that ‘‘barges on international voyages will also be exempt from this rulemaking.’’ We agree with the commenters and the interim rule amends the applicability provisions of new 33 CFR 97.100 so that part 97, subpart A, applies only to self-propelled vessels that are subject to SOLAS Chapter VI/5.6 or Chapter VII/5. SOLAS 8 See 29 CFR 1918.85 and 49 U.S.C. 5902 for the Occupational Safety and Health Administration and Department of Transportation requirements, respectively. 9 The International Convention for the Safety of Life at Sea, 1974, and its Protocol of 1988. See Regulation VI/2, which enters into force July 1, 2016. The International Maritime Organization previously issued guidance to help ensure accurate pre-loading container weighing; see Maritime Safety Committee Circular MSC.1/Circ. 1475, Guidelines Regarding the Verified Gross Mass of a Container Carrying Cargo. 10 78 FR at 68788, col. 1. PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 27995 does not apply to non self-propelled vessels and the barge industry has demonstrated a strong safety record in the past. Therefore, we do not intend to require non-self-propelled vessels to have CSMs at this time. Proposed change for final rule. One of the individual commenters said that, to conform to Chapter VII/5 of SOLAS, we should regulate cargo securing on cargo vessels below 500 gross tons as well as on vessels of 500 gross tons and above. We agree with the commenter’s assessment that the cargo securing manual requirements of Chapter VII/5 of SOLAS apply to all vessels covered by other SOLAS provisions and to vessels below 500 gross tons that carry dangerous goods in packaged form. As previously stated, one of our intentions in this rule is to align our regulations with SOLAS requirements for cargo securing manuals, and, therefore, we propose modifying the final rule to more accurately align with SOLAS by extending the applicability provisions of 33 CFR 97.100 to self-propelled cargo vessels less than 500 gross tons carrying dangerous goods in packaged form on international voyages. We specifically request public comment on that proposal. VII. Incorporation by Reference The Director of the Federal Register has approved the material in 33 CFR 97.110 for incorporation by reference under 5 U.S.C. 552 and 1 CFR part 51. Copies of the material are available from the sources listed in § 97.110. The following paragraphs summarize the material incorporated by reference. IMO Assembly Resolution A.739(18) (Res.A.739(18)), Guidelines for the Authorization of Organizations Acting on Behalf of the Administration, November 22, 1993: International guidelines developed to establish a uniform program for controlling and assigning authority of organizations to act on behalf of administrations in conducting surveys, certifications, and determination of tonnages. IMO Maritime Safety Committee Circular 1352 (MSC.1/Circ.1352), Amendments to the Code of Safe Practice for Cargo Stowage and Securing (CSS Code) Annex 14, Guidance on Providing Safe Working Conditions for Securing of Containers on Deck, June 30, 2010: International guidance developed to ensure persons engaged in carrying out container securing operations on deck have safe working conditions including safe access, and appropriate securing equipment. IMO Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353/Rev.1), Revised Guidelines for the Preparation E:\FR\FM\09MYR1.SGM 09MYR1 27996 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations of the Cargo Securing Manual, December 15, 2014: International guidelines providing information on developing cargo securing manuals, including required contents and details for stowing and securing nonstandardized and semi-standardized cargo. VIII. Regulatory Analyses We developed this interim rule after considering numerous statutes and Executive Orders (E.O.s) related to rulemaking. Below we summarize our analyses based on these statutes or E.O.s. A. Regulatory Planning and Review Executive Orders 12866, Regulatory Planning and Review, and 13563, Improving Regulation and Regulatory Review, direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a ‘‘significant regulatory action’’ under section 3(f) of E.O. 12866, Regulatory Planning and Review, as supplemented by E.O. 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that E.O. Accordingly, the rule has not been reviewed by the Office of Management and Budget (OMB). A final Regulatory Assessment for the interim rule follows. 1. Summary This interim rule amends the CFR by adding the following provisions: • Requirements for the reporting of lost or jettisoned cargo; • The CSM requirements of SOLAS, for vessels of 500 gross tons or more; • Extending the CSM requirements to self-propelled cargo vessels that travel on international voyages and carry cargo other than solid or liquid bulk cargo that is designated as a dangerous good carried in packaged form; and • Procedures for authorization of third-party organizations to review and approve CSMs on the Coast Guard’s behalf. Table 1 presents a summary of our analysis. TABLE 1—SUMMARY OF THE 10-YEAR REGULATORY ECONOMIC IMPACTS Changes Description Costs (7% discount rate) Affected population Annualized 1. Reporting of lost or jettisoned cargo. 2. CSM requirements ....... 3. Approval of authorized organizations. Total .......................... Codify lost or jettisoned cargo as a hazardous condition and specify data to be reported. Codify SOLAS rules and guidance from NVIC 10–97. U.S.- and foreign-flagged vessels engaged in transport to or from a U.S. port. Owners/operators of 6,436 vessels: 83 U.S.flagged, 6,353 foreignflagged. 6 currently approved organizations, others applying for approval status. Codify guidance from NVIC 10–97. ......................................... ......................................... Benefits Total $578 $4,063 Better tracking and response of lost or jettisoned cargo. 212,226 1,490,587 Increased enforcement authority. 0 0 Increased enforcement authority. 212,804 1,494,649 Note: Due to independent rounding, the totals may not equal the sum of the components. Table 2 presents a summary of the 10year cost schedule, showing total costs on an undiscounted basis and discounted at 7-percent and 3-percent interest rates. TABLE 2—SUMMARY OF THE 10-YEAR TOTAL COST TO THE INTERNATIONAL CARGO INDUSTRY AND U.S. GOVERNMENT Undiscounted Discounted Year mstockstill on DSK3G9T082PROD with RULES Industry Government Total 7% 3% 1 ........................................................................................... 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6 ........................................................................................... 7 ........................................................................................... 8 ........................................................................................... 9 ........................................................................................... 10 ......................................................................................... $757,015 99,403 99,417 99,430 107,068 107,081 107,108 107,121 114,759 114,786 $90,514 10,013 10,023 10,034 10,044 10,055 10,076 10,086 10,097 10,118 $847,529 109,416 109,440 109,464 117,112 117,136 117,184 117,207 124,856 124,904 $792,083 95,568 89,336 83,510 83,499 78,053 72,976 68,216 67,913 63,495 $822,844 103,135 100,153 97,257 101,022 98,100 95,281 92,524 95,692 92,940 Total .............................................................................. 1,713,188 181,060 1,894,248 1,494,649 1,698,948 Annualized ........................................................................... ........................ ........................ ........................ 212,804 199,169 VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1 27997 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations 2. Changes From SNPRM Because there are no changes between the requirements proposed in the SNPRM and those contained in this interim rule, and because we received no public comments that affect the Regulatory Assessment, we retained the structure of the economic analyses from the SNPRM, but updated our analysis with the most current data. The data elements that we revised for this analysis are as follows: • Affected vessel population, U.S.and foreign-flagged vessels used 2011 through 2013 data. • Visits to U.S. ports, updated with data from 2011 through 2013. • Wage rates for commercial and Coast Guard employees, updated with current data. • Container ship traffic data, updated with current data. 3. Affected Population The affected population, those vessels subject to the regulations in this interim rule, consists of U.S.- and foreignflagged self-propelled vessels that— • Are engaged in international trade as indicated by currently having a SOLAS Cargo Ship Safety Certificate; • Are 500 gross tons or more; and • Carry any cargo other than solid or liquid bulk commodities. The United States is a signatory state to SOLAS, and U.S.-flagged vessels in international trade must meet SOLAS requirements, including the CSM rules, to receive a SOLAS certificate. A 2013 extract from the Coast Guard’s Marine Information for Safety and Law Enforcement (MISLE) database identified 83 U.S.-flagged vessels as meeting the above tonnage and cargo criteria. The applicable foreign-flagged vessels are those that transit U.S. waters. The source for data on these vessels was the Coast Guard’s Ship Arrival Notification System (SANS) database. This database contains data on notifications of arrival and departure of vessels to and from U.S. ports and is supplemented by data from MISLE. We extracted from SANS the most recent 3 years of data available, 2011 through 2013. This data produced a list of 6,353 foreign-flagged vessels that had one or more visits to a U.S. port and met the tonnage and cargo-type criteria. Table 3 presents the affected population of 6,436 vessels categorized by flag status, SOLAS status, and tonnage class (less than 500 gross tons, 500 gross tons or more). TABLE 3—APPLICABLE POPULATION, NON-BULK CARGO VESSELS Flag class SOLAS status Tonnage class in gross tons Vessels U.S. ................... Foreign .............. SOLAS .......................................................... SOLAS .......................................................... Non-SOLAS .................................................. Foreign Total ................................................. 500 gross tons or more ................................ 500 gross tons or more ................................ 500 gross tons or more ................................ ....................................................................... ........................ 6,314 39 6,353 83 ........................ ........................ ........................ Total ........... ....................................................................... ....................................................................... ........................ 6,436 Notes: (1) All U.S. vessels are SOLAS and in the 500 GT or more class. (2) Foreign-flagged vessels will follow SOLAS CSM rules. 4. Economic Analyses The economic analyses include— • An analysis of the costs, benefits, and alternatives for each of the interim rule’s three provisions: (a) Requirements for the reporting of lost or jettisoned cargo, (b) CSM requirements, and (c) Approval of authorized organizations. A summary of the costs and benefits for the entire rule; and • A preliminary analysis of expanding the affected population. a. Requirements for the reporting of lost or jettisoned cargo. i. Current practices, applicable population, and description of changes and edits. As noted in Section IV, Background and Regulatory History, of this preamble, the current regulations require the Coast Guard to be notified immediately when a hazardous condition is caused by a vessel or its operation. Incidents of lost or jettisoned cargo 11 are considered hazardous conditions and must be reported. However, current industry practice does not correspond with that interpretation. According to Captain James J. McNamara, President of the National Cargo Bureau in 2000, ‘‘When a container or containers are lost overboard, usually there is no news release and seldom is the fact publicized. The loss is only revealed to those in a need-to-know situation, i.e., the ship owner, shipper, receiver, and insurer.’’ 12 As we will discuss in detail, our research indicates a significant underreporting of lost or jettisoned cargo to the Coast Guard. Coast Guard and other vessels cannot respond to these unreported incidents, so they represent a risk to navigation and the marine environment. The underreporting also prevents the Coast Guard and other interested parties from accurately tracking the extent and trends of lost cargo incidents. In this interim rule we include requirements for the immediate reporting of lost or jettisoned cargo. We anticipate that adoption of these requirements will correct this underreporting and lead to some increased costs to industry. Table 4 presents the change matrix for modifying the reporting of hazardous conditions and summarizes the specific edit or change, the affected population, and the economic impact. TABLE 4—CHANGE MATRIX FOR REPORTING OF HAZARDOUS CONDITIONS IN 33 CFR mstockstill on DSK3G9T082PROD with RULES Reference and description Affected population 97.100 Applicability: . . . (a)(1), U.S. vessels ............................. 11 All data and industry reports refer only to containers when describing incidents involving lost or jettisoned cargo. We will assume that containers will continue as the only lost cargo in the future VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 Economic impact U.S. cargo vessels and non-U.S. cargo vessels in U.S. waters. and refer to containers as the generic description of the involved cargo for this analysis. 12 McNamara, James J., ‘‘Containers and Cargoes Lost Overboard,’’ National Cargo Bureau; conference of the International Union of Marine PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 None, administrative only. Insurers; September 13, 2000, https://www.iumi. com/images/stories/IUMI/Pictures/Conferences/ London2000/Wednesday/02%20mcnamara%20 cargo.pdf. E:\FR\FM\09MYR1.SGM 09MYR1 27998 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations TABLE 4—CHANGE MATRIX FOR REPORTING OF HAZARDOUS CONDITIONS IN 33 CFR—Continued Reference and description Affected population Economic impact 97.105 Definitions ............................................ 97.110 Incorporation by reference, lists IBR references. 97.115 Situation requiring report, criteria for reporting lost cargo. 160.215(a), requirement to report hazardous condition. 160.215(b), data to be reported ......................... All vessels and approval organizations ........... All affected vessels and approval organizations. Vessels subject to the rule that lose cargo overboard. Operators of vessels involved in incident resulting in hazardous condition. Operators of vessels involved in incident resulting in hazardous condition. None, administrative only. None, administrative only. Costs for correction of noncompliance with existing requirements. No change, new label of existing text. This requirement references 97.115 and all costs are included there. Source: Coast Guard analysis. mstockstill on DSK3G9T082PROD with RULES ii. Affected population. This interim rule applies to both U.S.- and foreignflagged vessels engaged in transport to or from U.S. ports. Therefore, the costs for reporting the lost or jettisoned cargo must be accounted for throughout the entire applicable population of 6,436 vessels, as reported in Table 3. For the years 2009 through 2013, there were only five incidents of containers lost or damaged at sea and reported to the Coast Guard. As previously noted, industry experts assert that many incidents of lost or jettisoned cargo are not reported to the appropriate authorities. To test this assertion, we developed an estimate of lost or jettisoned cargo incidents that are subject to Coast Guard rules. As the base of our estimate, we used the annual estimate of 1,679 containers lost at sea worldwide, as reported by the World Shipping Council (WSC) in its 2014 report 13 to the IMO’s SubCommittee on Carriage of Cargoes and Containers.14 The WSC’s estimate is based on a survey of their membership. The survey respondents accounted for 70 percent of the world’s container-ship capacity. The WSC adjusted the survey data to account for the 30 percent nonrespondents. They also prepared two estimates, one without catastrophic events and the other that included the less-frequent catastrophic ones with large numbers of lost containers. We reviewed the WSC’s methodology and we are satisfied that it produced a valid estimate. As we are using a 10-year forecast for our analysis, we needed to account for the low frequency-high consequence events, and used the higher annual estimate that included the catastrophic events. However, the WSC report was not categorized by route or flag of the vessel. We derived the U.S. share of global container traffic using data reported by the U.S. Department of Transportation’s Maritime Administration (MARAD), which reported in 2011 that there were 376,389 container ship visits worldwide,15 and that, out of this total, 22,089 were at U.S. ports.16 Thus, the U.S. share of global container traffic is 5.9 percent (22,089/376,389). We used that 5.9 percent share to estimate that about 99 containers in U.S. traffic are lost annually (1,679 containers lost world-wide × 5.9 percent U.S. share of traffic, rounded). The 5 incidents resulted in a loss of a total of 25 containers, so we estimate on average there were 5 lost containers per incident. Using those data, we estimate that there will be 20 reports of lost containers to the Coast Guard (99 containers lost/5 containers per incident, rounded to the nearest 10) in the first year the rule becomes effective. The Tioga Group, a freight transportation services consulting firm,17 in its report 18 on the container market to the port authorities of Los Angeles and Long Beach, presents estimates of 4.9 percent annual compounded growth rate for the United States in container traffic from 2010 to 2020. We assume that the number of lost container incidents will grow proportionally with the growth in container trade. We applied the Tioga Group’s estimate of 4.9 percent growth rate to the base estimate of 20 lost containers in Years 2 through 10 in this cost analysis. This yields an estimate of 31 incidents by Year 10 (the complete series is shown in the ‘‘Estimated Incidents’’ column of Table 6). iii. Costs. When cargo is lost or jettisoned, the vessel staff already collects data for company purposes.19 Thus, the only additional cost for compliance with this rule is the time to report the data to the Coast Guard and for the Coast Guard to record the data. Coast Guard staff who are familiar with vessel operations and incident reporting estimated that it will take 0.25 hours for a Master or other senior ship’s officer to compile a report and transmit it to the Coast Guard. The wage rate for the Master was obtained from the U.S. Bureau of Labor Statistics (BLS), using Occupational Series 53–5021, Captains, Mates, and Pilots of Water Vessels. The BLS reports that the hourly rate for a Master is $36.34 per hour.20 To account for benefits, the load factor, or ratio between total compensation and wages is calculated at 1.44,21 using BLS data. The fully loaded wage rate for a Master is estimated at $53 per hour ($36.34 base wages × 1.44 load factor, rounded up to capture the entire cost). The cost for the additional time to report an incident is $13.25 ($53 × 0.25). Similarly, we estimate that it will take a quarter of an hour for Coast Guard personnel at the E–4 level to record the data. The fully loaded wage rate for an E–4 rating is $42, per Commandant Instruction 7310.1N. 22 The unit cost for the Coast Guard is $10.50 ($42 per hour × 0.25 hours). 13 The report is on WSC’s Web site: https://www. worldshipping.org/industry-issues/safety/ Containers_Lost_at_Sea_-_2014_Update_Final_for_ Dist.pdf. 14 Report number CCC 1/NF 9, dated June 27, 2014. 15 See https://www.marad.dot.gov/documents/ Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 7, ‘‘Global Vessel Calls by Country, 2011.’’ 16 See https://www.marad.dot.gov/documents/ Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 3. ‘‘Containership Calls at U.S. Ports by Size, 2006– 2011.’’ 17 For information on The Tioga Group, see www.tiogagroup.com. 18 The Tioga Group, Inc. and IHS Global Insight, ‘‘San Pedro Bay Container Forecast Update’’, Exhibit 33: Total U.S. Loaded Total TEU and CAGRs, p. 33, www.portoflosangeles.org/pdf/spb_ container_forecast_update_073109.pdf. 19 Captain James J. McNamara, ‘‘Containers and Cargo Lost Overboard’’, p. 2. National Cargo Bureau; conference of the International Union of Marine Insurers; September 13, 2000, https://www.iumi. com/images/stories/IUMI/Pictures/Conferences/ London2000/Wednesday/02%20mcnamara %20cargo.pdf. 20 Mean wage, https://www.bls.gov/oes/2013/may/ oes535021.htm. 21 Load Factor calculation, source: https://www. bls.gov/news.releases/archives/ecec_09112013.htm, all Workers Total compensation, $31,00/Wages and salaries, $21.44. 22 https://www.uscg.mil/directives/ci/7000-7999/ CI_7310_1N.pdf. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1 27999 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations As shown in Table 5, the unit cost for reporting lost or jettisoned cargo is $23.75. TABLE 5—UNIT COST FOR REPORTING LOST OR JETTISONED CARGO Time (hours) Task Wage rate Cost Master to report ........................................................................................................................... CG data entry (E4) ...................................................................................................................... 0.25 0.25 $53 42 $13.25 10.50 Total ...................................................................................................................................... ........................ ........................ 23.75 Sources: BLS, Coast Guard estimates. The baseline estimate of lost or jettisoned cargo incidents, the growth rate, and the unit cost data provide the inputs into the 10-year cost schedule. Table 6 displays the input data and the resulting cost estimates on an undiscounted basis and discounted at 7percent and 3-percent interest rates. TABLE 6—COST SCHEDULE FOR REPORTING LOST OR JETTISONED CARGO Estimated incidents Year Rounded incidents Industry cost Coast Guard cost Discounted Total cost 7% 3% 1 ................................... 2 ................................... 3 ................................... 4 ................................... 5 ................................... 6 ................................... 7 ................................... 8 ................................... 9 ................................... 10 ................................. 20 20.98 22.01 23.09 24.22 25.41 26.66 27.97 29.34 30.78 20 21 22 23 24 25 27 28 29 31 $265 278 292 305 318 331 358 371 384 411 $210 221 231 242 252 263 284 294 305 326 $475 499 523 547 570 594 642 665 689 737 $444 436 427 417 406 396 400 387 375 375 $461 470 479 486 492 497 522 525 528 548 Total ...................... ........................ ........................ 3,313 2,628 5,941 4,063 5,008 Annualized ................... ........................ ........................ ........................ ........................ ........................ 578 587 To provide an estimate of costs by flag status, we extracted from the Coast Guard’s SANS database the vessels calling on U.S. ports in 2011.23 We divided the vessels into U.S.- and foreign-flagged status. Table 7 presents the data and shows that in 2013, U.S.flagged vessels accounted for 11.8 percent of the visits by vessels that would be subject to this interim rule. TABLE 7—2013 VISITS TO U.S. PORTS BY FLAG-STATUS OF VESSELS NON-BULK TRADE Flag Visits Percent United States ........................................................................................................................................................... Foreign ..................................................................................................................................................................... 2,955 22,001 11.8 88.2 Total .................................................................................................................................................................. 24,956 100.0 mstockstill on DSK3G9T082PROD with RULES We produced an estimate for U.S. costs of lost or jettisoned cargo by applying the 11.8 percent of visits by 23 2011 U.S.-flagged vessels from Table 7 to the cost estimates from Table 6. Note that U.S. costs include both costs to U.S.- flagged vessels and the Coast Guard. Table 8 displays the data for the U.S. costs. is the most recent year of verified data. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1 28000 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations TABLE 8—COST SCHEDULE FOR U.S.-FLAGGED VESSELS FOR REPORTING LOST OR JETTISONED CARGO Rounded incidents Year Industry cost CG cost Discounted Total cost 7% 3% 1 ............................................................... 2 ............................................................... 3 ............................................................... 4 ............................................................... 5 ............................................................... 6 ............................................................... 7 ............................................................... 8 ............................................................... 9 ............................................................... 10 ............................................................. 2 2 3 3 3 3 3 3 3 4 $27 27 40 40 40 40 40 40 40 53 $21 21 32 32 32 32 32 32 32 42 $48 48 72 72 72 72 72 72 72 95 $45 42 59 55 51 48 45 42 39 48 $47 45 66 64 62 60 59 57 55 71 Total .................................................. ........................ 387 308 695 474 586 Annualized ............................................... ........................ ........................ ........................ ........................ 67 69 We obtained the costs of reporting lost or jettisoned cargo for non-U.S.-flagged vessels by subtracting the U.S. costs, as reported in Table 8, from the costs as displayed in Table 6. Table 9 presents the results of these calculations. TABLE 9—COST SCHEDULE FOR NON-U.S.-FLAGGED VESSELS FOR REPORTING LOST OR JETTISONED CARGO Rounded incidents Year Industry cost Coast Guard cost Discounted Total cost 7% 3% 18 19 19 20 21 22 24 25 26 27 239 252 252 265 278 292 318 331 345 358 189 200 200 210 221 231 252 263 273 284 428 452 452 475 499 523 570 594 618 642 400 395 369 362 356 348 355 346 336 326 416 426 414 422 430 438 463 469 474 478 Total .................................................. ........................ 2,930 2,323 5,253 3,593 4,430 Annualized ............................................... mstockstill on DSK3G9T082PROD with RULES 1 ............................................................... 2 ............................................................... 3 ............................................................... 4 ............................................................... 5 ............................................................... 6 ............................................................... 7 ............................................................... 8 ............................................................... 9 ............................................................... 10 ............................................................. ........................ ........................ ........................ ........................ 512 519 iv. Benefits. A 2011 news release from the Monterey Bay Aquarium Research Institute (MBARI) 24 stated that containers that fall from ships can ‘‘float at the surface for months’’ and that ‘‘most eventually sink to the seafloor.’’ While they float they can present a hazard to navigation. However, sunken containers may pose immediate and long-term threats to the marine environment. The MBARI news release also stated that ‘‘[N]o one knows what happens to these containers once they reach the deep seafloor’’ and that ‘‘[p]erhaps 10 percent of shipping containers carry household and industrial chemicals that could be toxic to marine life.’’ The small number of MISLE incidents provides additional information. Of the 25 containers, one container held 22,500 pounds of used 24 https://www.mbari.org/news/news_releases/ 2011/containers/containers-release.html. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 batteries and another held an unspecified hazardous material. The immediate benefit of the reporting provisions is that they will enhance the Coast Guard’s ability to identify potential problems with securing equipment, locate and warn mariners about drifting containers that endanger safe navigation, and assess and respond to any potential environmental hazard created by the cargo loss. In the longer term, having complete and accurate data on lost cargo incidents will enable the Coast Guard and other parties to identify industry trends and track potential long-term threats to the marine environment from sunken containers. v. Alternatives. We considered possible alternatives to this rule. One possibility, as suggested in the SNPRM, would be to limit the reporting of lost containers to only those containing hazardous materials. However, we consider any overboard container to be PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 a potential hazard to navigation and, as noted above, the contents may pose a long-term threat to the marine environment. To ensure safety of navigation and the marine environment, we believe all lost or jettisoned cargo should be reported. As one commenter noted, the containers may not disintegrate for hundreds of years once they reach the floor. Thus, the long-term impacts on the environment are extremely hard to assess. Another alternative we considered was to reduce the amount of information to be sent to the Coast Guard in order to minimize recordkeeping burden. We examined the data specified in this rule and determined that all of it would be needed by the Coast Guard in order to completely evaluate the situation and determine the appropriate response. Therefore, we believe that the reporting requirements in this rule will provide the Coast Guard with sufficient E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations information to fulfill its missions of maritime safety and marine environmental protection while minimizing the vessel’s recordkeeping and reporting burdens. b. CSM Requirements. i. Current practices, applicable population, and description of changes and edits. As stated in Section IV of this preamble, Background and Regulatory History, the Coast Guard has developed guidance,25 based on IMO Circular 1353, for implementing SOLAS provisions for cargo securing manuals. Under the Coast Guard’s safety and security vessel examinations program, the Coast Guard checks that the subject vessels in U.S. ports have CSMs and that the crews follow them. MISLE data show that from 2011 through 2013, the 83 U.S.-flagged vessels that are part of the affected population were subject to 646 inspections. In all of these inspections there were no citations for a deficient CSM. MISLE also recorded that from 2011 through 2013, the Coast Guard conducted 14,358 vessel inspections of foreign-flagged vessels and found problems relating to CSMs in only 9 instances. These data indicate an ongoing compliance process for both U.S.- and foreign-flagged vessels subject to CSM rules. Therefore, the Coast 28001 Guard anticipates that the only costs regarding the CSM requirement, once the requirements of SOLAS and Coast Guard guidance are moved into the CFR, would be those associated with owners or operators of the few deficient vessels who are prompted to ensure their CSMs are fully compliant with SOLAS prior to entering U.S. waters. Tables 10 and 11 present the change matrix for the edits to Titles 33 and 46 of the CFR, respectively, that relate to the CSM requirements of the interim rule. Each matrix summarizes the specific edit or change, the affected population, and the economic impact. TABLE 10—CHANGE MATRIX FOR ADDING CSM REQUIREMENTS TO 33 CFR Reference & description Affected population 97.100 Applicability: . . . (a)(1), U.S. vessels ............................. . . . (a)(2), voluntary compliance ............... . . . (b), exemption for Ready Reserve and public vessels. . . . 97.105 Definitions ............................. . . . 97.110 Incorporation by reference (lists IBR references). 97.120 Cargo Securing Manuals: . . . (a)(1), CSMs required ......................... . . . (a)(2), CSAP required after 2015 ........ . . . (b), authorizes CG enforcement ......... Economic impact U.S. cargo vessels, non-U.S. cargo vessels of 500 gross tons or more in U.S. waters. U.S. vessels requesting coverage ................... Ready Reserve and public vessels ................. None, administrative only. No change, codifies guidance currently located in NVIC. None, these vessels currently are exempted. All vessels and approval organizations ........... All affected vessels and approval organizations. None, administrative only. None, administrative only. SOLAS vessels and non-U.S., non-SOLAS vessels noted with deficient CSMs by Coast Guard. Non-SOLAS vessels ........................................ Cost of developing CSM for noncompliant vessels. All U.S.- and foreign-flagged vessels subject to the rule. Edit to close regulatory gap. No costs, no current vessels affected and none expected in future. No cost, provides authority for current CG compliance activities. Source: Coast Guard analysis. TABLE 11—CHANGE MATRIX FOR EDITS TO 46 CFR 97 THAT APPLY TO U.S. SOLAS VESSELS Reference & description Affected population Economic impact 97.12–10 Cargo securing manuals, new section to reference new 33 CFR 97.120. Owners and operators of U.S. SOLAS vessels Administrative edit, all costs accounted for in 33 CFR 97.120. additional costs from this rule. However, to conduct a thorough regulatory analysis, we included the 83 U.S.-flagged vessels in the analysis and assumed that they will obtain a SOLAScompliant CSM in the first year the rule is in effect. A review of the year-built data for these vessels shows that the most recently built was in 2009. We assume that this trend of no new builds will continue and that the population will remain stable at 83 vessels per year throughout the 10-year analysis period. Additionally, the interim rule requires that a CSM must be revised if one of these two criteria are met: 1. The vessel changes its type. As an example, a former break-bulk carrier is modified to become a container ship. 2. An existing vessel changes 15 percent of its cargo securing systems or more than 15 percent of its portable securing devices. MISLE data indicates that none of the subject U.S.-flagged vessels have changed vessel type from 2001 through 2012. We assume that this trend will continue and that no vessels will change type during our analysis period. From information provided by an approved mstockstill on DSK3G9T082PROD with RULES Source: Coast Guard analysis. ii. Affected population. As stated earlier, the Coast Guard’s current safety and security examinations include checking to see if a subject vessel has a current CSM and that the crew follows it. The inspection results indicate that the 83 U.S.-flagged vessels in international trade are all in the 500 gross tons or more class and that they comply with the SOLAS CSM rules. Under an assumption that they will continue with those practices, this establishes a baseline of current compliance throughout the 10-year analysis period. In this scenario, the U.S.-flagged vessels will incur no 25 NVIC 10–97. VerDate Sep<11>2014 17:59 May 06, 2016 Jkt 238001 PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1 28002 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations organization,26 we estimated that, on an annual basis, 11.3 percent of the U.S.flagged fleet revises it CSM based on the second criterion described above. We applied this rate to the subject 83 U.Sflagged vessels to estimate that 9 vessels per year will revise their CSMs (83 × 11.3 percent, rounded) in Years 2 through 10 of the analysis period. Foreign-flagged vessels that are 500 gross tons or more follow SOLAS rules and current Coast Guard guidance. We estimated the costs of compliance for these vessels based on the following assumptions: (1) In the absence of the rule, the current deficiency rate for subject foreign-flagged vessels would continue. (2) Under the rule, the increased enforceability posture from codifying the CSM rules will lead all vessels to comply with the SOLAS standards and current Coast Guard guidance prior to entering U.S. waters. That is, the deficiency rate will be reduced to zero for foreign-flagged vessels. We reported above that there were nine deficiencies related to CSMs from 2011through 2013. These deficiencies are comprised of five that were missing approval from an authorized organization, three that did not have a CSM on the vessel, and one that had a CSM with missing sections. Table 12 presents the data from 2011 through 2013 for the calculation of a deficiency rates by year and an annual average for the 3 years. TABLE 12—ANNUAL CSM DEFICIENCY RATE Vessel examinations Year Deficiency rate (percent) CSM deficiencies 2011 ............................................................................................................................................. 2012 ............................................................................................................................................. 2013 ............................................................................................................................................. 5,135 4,464 4,759 2 4 3 0.04 0.09 0.06 Total ...................................................................................................................................... 14,358 9 * 0.06 mstockstill on DSK3G9T082PROD with RULES * Average deficiency rate. We used the average deficiency rate of 0.06 percent throughout our 10-year analysis period. The estimate of the number of deficient CSMs in any year equals the estimate of the vessel population for that year multiplied by the deficiency rate. As reported in Table 3 in the ‘‘SOLAS Class’’ subtotal, there are 6,353 foreignflagged vessels that are currently subject to the CSM requirements. Applying the 0.06 percent deficiency rate from Table 12 yields an estimate of four vessels that will need to remedy deficient CSMs in the first year the rule comes into effect. In the analysis of the reporting requirements, we cited the Tioga Group’s report on the container market that growth in container shipments to the United States is expected to increase,27 so a flat extrapolation of the seven CSMs in the first year through Years 2 through 10 of the analysis period would result in an underestimate. We used the Tioga Group’s estimate of a 4.9 percent rate for our estimate for growth in our 10-year analysis period. Currently, we do not have detailed information on the current and projected capacity utilization of container ships visiting U.S. ports, so we posited that the trips per year of the affected vessels would remain constant through the analysis period. With that assumption, we applied the 4.9 percent annual growth rate to the fleet of foreign-flagged vessels serving U.S. ports. For Years 2 through 10, the base population is the base population from the previous year multiplied by the 4.9 percent growth rate. The resulting estimates of the base populations are shown in the ‘‘Base Population’’ column of Table 14. iii. Costs. To obtain a current estimate for the cost of developing a CSM, we contacted industry cargo securing subject matter experts in 2013.28 These experts are familiar with the entire development of CSMs, including vessel survey, evaluation of cargo securing equipment and procedures, preparation of manuals, and training of crews. From the information they provided, we estimate that the cost to develop a CSM will range between $7,500 and $10,000, depending on factors such as the size and type of vessel. We used the midpoint of this range, $8,750 (($7,500 + $10,000)/2), as the unit cost of developing a CSM. We anticipate that a CSM will be revised to either remedy a deficiency or because the vessel met the previously discussed criterion of new cargo securing systems. We do not have detailed descriptions of each deficiency or changes in cargo securing equipment, so for the unit cost, we assume that a vessel will revise the CSM using an existing survey of the vessel. A 2013 study conducted by ABS Consulting, Inc. for the Coast Guard provided estimates on the costs of a suite of marine engineering and naval architecture services.29 That study estimated that the average cost of a survey for a freight ship is $1,125. We estimate the unit cost to remedy a deficiency as the average cost of developing a CSM [$8,750 = ($7,500 + $10,000)/2)] less the average cost of a survey. This yields an estimated unit cost of $7,625 ($8,750 ¥ $1,125). The costs to the Federal government are accounted for by the oversight actions performed by the authorized approval organizations. These actions include reviewing new or revised CSMs, issuing letters of approval, and, for CSMs that are not approved, issuing letters that explain why the CSMs were not approved. We anticipate that the reviews of the CSM will be conducted by a marine engineer or naval architect. We estimate that each review will take on average 2 working days and another hour will be needed to prepare the appropriate correspondence to the vessel’s managers. Thus, the attributed burden to the Federal government for each review is 17 hours ((2 × 8) + 1 = 17). We estimate that the average loaded (including benefits) hourly wage for a marine architect or naval engineer is 26 To protect proprietary information, we cannot provide the name of the organization. 27 The Tioga Group, Inc. and IHS Global Insight, ‘‘San Pedro Bay Container Forecast Update’’, Exhibit 33: Total U.S. Loaded Total TEU and CAGRs, p. 33, www.portoflosangeles.org/pdf/spb_ container_forecast_update_073109.pdf. 28 The data obtained contain proprietary information and are not available publicly. 29 ABS Consulting, Inc, ‘‘Study of Marine Engineering and Naval Architecture Costs for Use in Regulatory Analyses,’’ Table 5, p. 26. A copy of this study can be found in the docket for this rulemaking. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1 28003 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations $64 per hour.30 The unit cost to review one CSM is $1,088 (17 hours × $64 per hour). Table 13 shows the undiscounted costs to industry and the Federal government for the 10-year analysis period. Costs for Foreign-Flagged Vessels As foreign-flagged vessels are obtaining and revising CSMs under the auspices of their flag states, their only cost for this interim rule is to remedy deficiencies. The cost in each year is the number of deficient vessels times the unit cost of $7,625. Table 13 presents the undiscounted cost estimate for foreign-flagged vessels over the 10-year period. TABLE 13—COSTS TO FOREIGN-FLAGGED VESSELS FOR DEVELOPING CSMS Base population Year Remedied Total cost Unit cost 1 ....................................................................................................................... 2 ....................................................................................................................... 3 ....................................................................................................................... 4 ....................................................................................................................... 5 ....................................................................................................................... 6 ....................................................................................................................... 7 ....................................................................................................................... 8 ....................................................................................................................... 9 ....................................................................................................................... 10 ..................................................................................................................... 6,353 6,664 6,991 7,334 7,693 8,070 8,465 8,880 9,315 9,771 4 4 4 4 5 5 5 5 6 6 $7,625 7,625 7,625 7,625 7,625 7,625 7,625 7,625 7,625 7,625 $30,500 30,500 30,500 30,500 38,125 38,125 38,125 38,125 45,750 45,750 Total .......................................................................................................... ........................ 48 ........................ 366,000 Costs for U.S.-Flagged Vessels As discussed previously, all 83 U.S.flagged vessels have CSMs and have operated under them for over a decade. In addition, current business practices, particularly the requirements of insurers, would also indicate the use of a CSM. For these reasons, and as presented in the Regulatory Analysis of the NPRM, the requirements in this interim rule are not expected to result in a change in practice or incur a cost for the 83 U.S.-flagged vessels. For the purposes of this regulatory analysis, we also compute costs assuming a baseline without CSMs for the 83 U.S.-flagged vessels. The cost for U.S.-flagged vessels to develop CSMs is presented in Table 14. TABLE 14—COSTS OF DEVELOPING CSMS FOR U.S. VESSELS TO INDUSTRY AND THE FEDERAL GOVERNMENT Industry CSM cost Base population Year Industry cost Federal Government cost Total cost 1 ........................................................................................... 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6 ........................................................................................... 7 ........................................................................................... 8 ........................................................................................... 9 ........................................................................................... 10 ......................................................................................... 83 9 9 9 9 9 9 9 9 9 $8,750 7,625 7,625 7,625 7,625 7,625 7,625 7,625 7,625 7,625 $726,250 68,625 68,625 68,625 68,625 68,625 68,625 68,625 68,625 68,625 $90,304 9,792 9,792 9,792 9,792 9,792 9,792 9,792 9,792 9,792 $816,554 78,417 78,417 78,417 78,417 78,417 78,417 78,417 78,417 78,417 Total .............................................................................. 164 ........................ 1,343,875 178,432 1,522,307 Table 15 presents the total costs for foreign-flagged vessels and U.S.-flagged vessels assuming a pre-CSM baseline on an undiscounted basis and the total costs discounted at rates of 7 percent and 3 percent. As shown in Table 15, the total 10-year cost for upgrading CSMs at a 7-percent discount rate is $1,490,587, or $212,226 on an annualized basis. TABLE 15—CSMS—UNDISCOUNTED COMPONENT AND TOTAL COSTS; AND TOTAL COSTS AT DISCOUNT RATES OF 7 PERCENT AND 3 PERCENT Undiscounted mstockstill on DSK3G9T082PROD with RULES Year U.Sflagged cost 1 ........................................................................................... 2 ........................................................................................... 30 Mean hourly wage of $44.10 for a marine engineer/naval architect from the Bureau of Labor VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 Foreignflagged cost $816,554 78,417 $30,500 30,500 Statistics (https://www.bls.gov/oes/2011/may/ oes172121.htm) multiplied by load factor of 1.44 to PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 Discounted Total cost $847,054 108,917 7% 3% $791,639 95,132 $822,383 102,665 account for benefits (ftp://ftp.bls.gov/pub/special. requests/ocwc/ect/ececqrtn.pdf). E:\FR\FM\09MYR1.SGM 09MYR1 28004 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations TABLE 15—CSMS—UNDISCOUNTED COMPONENT AND TOTAL COSTS; AND TOTAL COSTS AT DISCOUNT RATES OF 7 PERCENT AND 3 PERCENT—Continued Undiscounted Year U.Sflagged cost Foreignflagged cost Discounted Total cost 7% 3% 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6 ........................................................................................... 7 ........................................................................................... 8 ........................................................................................... 9 ........................................................................................... 10 ......................................................................................... 78,417 78,417 78,417 78,417 78,417 78,417 78,417 78,417 30,500 30,500 38,125 38,125 38,125 38,125 45,750 45,750 108,917 108,917 116,542 116,542 116,542 116,542 124,167 124,167 88,909 83,092 83,093 77,657 72,577 67,829 67,539 63,120 99,674 96,771 100,530 97,602 94,759 91,999 95,164 92,392 Total .............................................................................. 1,522,307 366,000 1,888,307 1,490,587 1,693,939 Annualized ........................................................................... ........................ ........................ ........................ 212,226 198,581 iv. Benefits. The benefit of adding the SOLAS requirements and current Coast Guard guidance on CSMs to the CFR is increased Coast Guard enforcement authority. We previously cited the statistics from the Coast Guard’s CSM inspection activities from 2009 through 2011 for both U.S.- and foreign-flagged vessels. However, as noted in Section IV, Background and Regulatory History, of this preamble, the only current U.S. implementation of the CSM is via current Coast Guard guidance, which is unenforceable. Incorporating these rules into the CFR elevates the guidelines and standards to being a Federal regulation. As described in Section III, Basis and Purpose, of this preamble, the Coast Guard has existing authorities to inspect vessels, regulate an inspected vessel’s operation, fittings, equipment, and appliances, and implement SOLAS. The Coast Guard believes that it can enforce the provisions of this rule under these authorities. v. Alternatives. Alternatives to this provision of the rule that we considered include various ways to apply the requirements to prepare and implement CSMs to U.S.-flagged vessels in coastwise trade. The NPRM published in 2000 presented five options for applying CSM regulations to U.S. domestic voyages. Table 16 presents descriptions of these options and a summary of the comments. TABLE 16—OPTIONS TO EXTEND CSM REQUIREMENTS TO U.S. DOMESTIC VOYAGES Description 1 ......................... Extend SOLAS requirements to domestic voyages ................ 2 ......................... Vessel specific standards, Coast Guard approval ................... 3 ......................... Certificate for carrying hazardous materials ............................ 4 ......................... mstockstill on DSK3G9T082PROD with RULES Option No. Allow each vessel to choose from among Options 1, 2, and 3 5 ......................... Standards developed with industry .......................................... VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00020 Summary of comments Fmt 4700 Sfmt 4700 4 • • • • • supported, 5 opposed for these reasons: Preferred compromise of Options 1 & 2; Not requiring regular reviews; Too restrictive; Require too much standardization; and Would not work for seagoing barges as no two barge cargoes are identical. 1 supported, 5 opposed for these reasons: • Evaluate against experience with continuous examination program and noted similarity with Option 5; • Too many variables causing unneeded burden; • Would not work, but did not give specific reasons; • Second choice; and • Preferred compromise of Options 1 and 2. One commenter stated its decision would depend on specific requirements, and 3 commenters opposed for these reasons: • Surveyors for multiple voyages not feasible for cost and availability; • Could not ensure surveyor availability; and • High costs of surveyors. One commenter noted that companies supporting domestic rules would find this attractive, but did not state its own opinion. Another stated that it combined the strengths and weaknesses of the other Options. One opposed for unstated reasons and another was opposed because the ‘‘menu of options’’ would cause confusion. Three comments supported, 1 for unstated reasons and 2 because of its flexibility; and 1 commenter was opposed because it would not ensure meeting needs of different vessel types and operations. E:\FR\FM\09MYR1.SGM 09MYR1 28005 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations The options presented in the NPRM were only outlined and did not have cost estimates. We developed a cost estimate for Option 1 that would extend SOLAS requirements to domestic vessels. We added these details to Option 1 to make the calculations: • The affected population will be U.S.-flagged vessels in coastwise trade. The geographic identification was vessels with coastwise route certifications. We identified 688 vessels from MISLE that met these requirements, comprised of 195 freight barges, 160 freight ships, and 333 offshore supply vessels. • In general, the vessels in the U.S. affected population for this alternative are smaller than the foreign-flagged vessels that comprise the affected population of the regulation. Data comparisons for the U.S. fleet shows average gross tons of 8,165 and average length of 326 feet. The comparable data for the foreign-flagged vessels is average gross tonnage of 31,306 and average length of 619 feet. Therefore, for the unit cost of the U.S. coastwise vessels, we assigned the low-end value of $7,500, which came from the range supplied by the subject matter experts we contacted. The recent history of new builds is projected to continue through the 10year analysis period. MISLE reported 22 new vessels per year from 2009 through 2012, and we used this in our analysis. • A phase-in period was not in the NPRM, but we added a 3-year phase-in period to this interim rule to mitigate the burden on both vessel owners and the authorized approval organizations. We assume that vessel owners will distribute the certification of the manuals for their vessels evenly over the phase-in period. This will enable vessel owners and authorized approval organizations to schedule cargo securing approvals in conjunction with vessel down-time, such as scheduled examinations or times of vessel repairs and upgrades. With these parameters, we developed a 10-year cost schedule for Option 1. Because the costs to foreign-flagged vessels would be the same for Option 1 as for the preferred alternative, the data presented show the marginal costs for Option 1. The annualized cost, using a 7-percent discount rate, would be $807,605. The cost estimates are displayed in Table 17. TABLE 17—COST ESTIMATE FOR OPTION 1, EXTEND CSM REQUIREMENTS TO DOMESTIC VESSELS Existing vessels Year New vessels Total vessels 229 229 230 0 0 0 0 0 0 0 22 22 22 22 22 22 22 22 22 22 251 251 252 22 22 22 22 22 22 22 Total ...................... 688 220 908 Annualized ................... mstockstill on DSK3G9T082PROD with RULES 1 ................................... 2 ................................... 3 ................................... 4 ................................... 5 ................................... 6 ................................... 7 ................................... 8 ................................... 9 ................................... 10 ................................. ........................ ........................ ........................ The goal of Option 1 is to reduce the occurrence and impacts of lost containers in U.S. coastwise trade. However, the comments to the NPRM indicate that this is not a significant problem. One commenter stated that cargo losses from barges are rare, another stated that seagoing barges ‘‘are generally safe from cargo loss,’’ and another commenter stated that ‘‘most cargo losses result from container structural problems that the vessel owner or operator cannot know about or prevent.’’ However, as described above, the reporting of these incidents is uncertain. We anticipate that, with the more accurate reporting required by this interim rule, we will be able to validate this assertion. Additionally, our initial cost estimates, as presented in Table 17, indicate that industry would incur annualized costs, discounted at 7 percent, of $807,605 beyond what is in this rule. Therefore, this interim rule focuses exclusively on vessels in international trade. However, the Coast VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 $7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 Fmt 4700 3% $1,827,670 1,774,437 1,729,618 146,600 142,330 138,185 134,160 130,253 126,459 122,775 6,810,000 ........................ $1,759,346 1,644,248 1,542,803 125,878 117,643 109,946 102,754 96,032 89,749 83,878 5,672,277 6,272,487 ........................ 807,605 735,327 c. Approval of Authorized Organizations The Coast Guard authorizes classification societies and other organizations to review and approve CSMs on its behalf. The procedures for these organizations are currently found in Coast Guard guidance and cover selection criteria, information required by organizations applying for authorization status, and the Coast Guard’s application review procedures, termination of authorization procedures, and appeals procedures. Following the procedures in current Coast Guard guidance, the Coast Guard has authorized these six classification societies to review and approve CSMs: American Bureau of Shipping (ABS), Det Norske Veritas (DNV), Lloyd’s Register of Shipping (LR), Germanischer Frm 00021 7% $1,882,500 1,882,500 1,890,000 165,000 165,000 165,000 165,000 165,000 165,000 165,000 Guard can reevaluate this position and initiate another rulemaking for the U.S. coastwise trade if new information indicates either underreporting or an upward trend of lost containers. PO 00000 Discounted Total cost Unit cost Sfmt 4700 Lloyd (GL), RINA S.p.A, and ClassNK (NK).31 We anticipate that no other classification societies will be applying for CSM approval authority in the near future.32 However, current Coast Guard guidance is not legally enforceable. This interim rule will incorporate these procedures from guidance into the CFR with only some minor editorial changes, such as updating the address of Coast Guard Headquarters. Therefore, we believe there will be no additional regulatory costs associated with the codification of these application procedures. Table 18 presents the change matrix for the codification of the class society approval guidance into the CFR and summarizes the specific edit or 31 List of classification societies authorizations: https://www.uscg.mil/hq/cg5/acp/docs/ClassSociety Auths22Dec2013.pdf. 32 For more information see the final rule ‘‘Approval of Classification Societies’’, VII. A, ‘‘Regulatory Planning and Review’’, 77 FR 47548, RIN 1625–AB35). E:\FR\FM\09MYR1.SGM 09MYR1 28006 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations change, the affected population, and the economic impact. TABLE 18—CHANGE MATRIX FOR INCORPORATING CLASS SOCIETY APPROVAL PROCEDURES INTO 46 CFR Reference & description Affected population 97.100 Applicability: . . . (a)(4), organizations applying for CSM approval authority. . 97.115 Situation requiring report, criteria for reporting lost cargo. 97.200 CSM approval for U.S. vessels on international voyages: . . . (a)(1), authorized applicants include owner, operator, or agent. . . . (a)(2), CG oversight of approval authority applications. . . . (a)(3), application procedures ............. Economic impact New applicants ................................................. No impact, incorporates current guidance into regulations. Vessels subject to the rule that lose cargo overboard. Costs for correction of noncompliance with existing requirements. Owners, operators, and agents, of new U.S. vessels in international trade. Organizations applying for CSM approval authority. U.S. vessels in international trade ................... Administrative change, erenced owner. No change, incorporates regulations. No change, incorporates regulations. No change, incorporates regulations. No change, incorporates regulations No change, incorporates regulations. No change, incorporates regulations. No change, incorporates regulations. No change, incorporates regulations. No change, incorporates regulations . . . (a)(4), approval authority retains a copy. . . . (b), approval letter contents ................ Authorized approval organizations .................. . . . (c), disapproval procedures ................ Authorized approval organizations .................. . . . (d), resubmit procedures ..................... Owners or operators resubmitting a CSM ....... . . . (e), documents kept on vessel ............ Owners or operators of U.S. vessels subject to the rule. Owners or operators of U.S. vessels subject to the rule. Owners or operators of U.S. vessels subject to the rule and authorized approval organizations. ABS, DNV, LR, GL, RINA, NK, National Cargo Bureau. Organizations seeking to become approved organizations. CG and organizations seeking to become approved organizations. CG and authorized approval organizations ..... 97.205 Requirements for amending an approved CSM, amending procedures. 97.210 Appeals, appeals procedures .............. 97.300 Authorized CSM approval authorities, lists approved organizations. 97.305 Requests for authorization, application process. 97.310 Criteria for authorization, evaluation criteria. 97.315 Requirements for authorized approval organizations, responsibilities of CG and authorized approval organizations. 97.320 Revocation of authorization, procedures for CG revoking an authorization. Authorized approval organizations .................. CG and referenced organizations .................... guidance only refcurrent guidance into current guidance into current guidance into current guidance into current guidance into current guidance into current guidance into current guidance into current guidance into No change, incorporates current guidance into regulations. No change, incorporates current guidance into regulations. No change, incorporates current guidance into regulations. No change, substantively incorporates and rewords current guidance into regulations. No change, substantively incorporates and rewords current guidance into regulations. Source: Coast Guard analysis. mstockstill on DSK3G9T082PROD with RULES We considered alternatives to these changes and edits, and we concluded that there were no viable alternatives. The procedures in current Coast Guard guidance provide a complete description of all processes needed for approval and oversight of the subject organizations. Reducing or eliminating any of them, such as the one covering appeals, would leave a gap in the approval or oversight processes. We did not identify any weaknesses or gaps in the current Coast Guard guidance, other than the editorial changes. We also concluded that the recordkeeping VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 information in the current Coast Guard guidance provides complete documentation for all the involved parties—vessel owners or operators, and approved organizations. Reducing or eliminating any of the recordkeeping rules would run the risk of producing a gap in the documentation. Conversely, adding additional recordkeeping rules would only increase associated burdens, but not provide any additional useful information. In summary, the rules governing organizations approved to issue CSMs will codify current procedures with no PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 associated costs to industry or the government. The benefit of these rules is that they will provide a regulatory basis for the Coast Guard’s oversight of organizations authorized to approve CSMs. d. Review of Costs and Benefits. The total cost of this interim rule is for the two cost elements: (1) Reporting of lost or Jettisoned Cargo; and (2) CSM Requirements. Table 19 presents the 10year total cost schedule assuming a preCSM baseline for undiscounted costs, and the discounted costs at 7-percent and 3-percent interest rates. E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations 28007 TABLE 19—SUMMARY OF THE 10-YEAR TOTAL COST OF INTERIM RULE, UNDISCOUNTED AND DISCOUNTED AT INTEREST RATES OF 7 PERCENT AND 3 PERCENT Undiscounted Year Lost or jettisoned cargo Discounted CSM plans Total 7% 3% 1 ........................................................................................... 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6 ........................................................................................... 7 ........................................................................................... 8 ........................................................................................... 9 ........................................................................................... 10 ......................................................................................... $475 499 523 547 570 594 642 665 689 737 $847,054 108,917 108,917 108,917 116,542 116,542 116,542 116,542 124,167 124,167 $847,529 109,416 109,440 109,464 117,112 117,136 117,184 117,207 124,856 124,904 $792,083 95,568 89,336 83,510 83,499 78,053 72,976 68,216 67,913 63,495 $822,844 103,135 100,153 97,257 101,022 98,100 95,281 92,524 95,692 92,940 Total .............................................................................. 5,941 1,888,307 1,894,248 1,494,649 1,698,948 Annualized ........................................................................... ........................ ........................ ........................ 212,804 199,169 Table 20 summarizes the undiscounted costs disaggregated by flag, requirement, and sector. TABLE 20—10-YEAR UNDISCOUNTED COSTS BY FLAG, REQUIREMENT, AND SECTOR Requirement United States .................................................. Lost Cargo ...................................................... CSM ............................................................... $387 1,343,875 $308 178,432 $695 1,522,307 U.S. Total ................................................ Lost Cargo ...................................................... CSM ............................................................... 1,344,262 2,930 366,000 178,740 2,323 0 1,523,002 * 5,253 366,000 Foreign Total ........................................... 368,930 2,323 371,253 ......................................................................... 1,713,192 181,063 1,894,255 * Foreign .......................................................... Total ......................................................... Industry Federal Government Flag Total Note: Subtotals and Totals do not match with those in other tables due to independent rounding. mstockstill on DSK3G9T082PROD with RULES The primary benefit of this interim rule is that it places into the CFR rules and procedures for the cargo securing plans, the approval and oversight of organizations authorized to approve CSMs, and the reporting of lost or jettisoned cargo. Additionally, the reporting requirements for the lost or jettisoned cargo will provide the Coast Guard with additional information to track and monitor the effects on both navigation and the environment, and to take any appropriate enforcement actions. Overall, the interim rule will support the Coast Guard’s missions of maritime safety and stewardship. e. Preliminary analysis of expanding the affected population. In Section V, Summary of the Rule, and Section VI, Discussion of Comments on SNPRM and Changes, we requested comments on our proposal to include self-propelled vessels less than 500 gross tons in the affected population. We conducted a preliminary analysis of the economic impacts of the proposal and summarize our findings below. The proposal would add an additional 45 foreign-flagged vessels, resulting in a new total of 6,398 foreign-flagged vessels. Combined with the 83 U.S.- flagged vessels, the total affected population would be 6,481 vessels. The only requirement that would be affected is the one requiring a subject vessel to have and follow an approved CSM. Of the 45 new vessels, 42 currently hold SOLAS cargo safety certificates. For this preliminary analysis we assumed that the three vessels without a cargo safety certificate would need to obtain an approved CSM. This would add an additional 26,250 (3 vessels × 8,750 per new CSM). A revised 10-year cost estimate for this requirement based on these assumptions is presented in Table 21. TABLE 21—COST OF CSM PLANS UNDER THE PROPOSED RULE (ADDING VESSELS UNDER 500 GT TO INTERIM RULE ESTIMATES), UNDISCOUNTED AND DISCOUNTED AT 7 PERCENT AND 3 PERCENT U.S.-flagged cost Year 1 ........................................................................................... 2 ........................................................................................... VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00023 Foreignflagged $816,554 78,417 Fmt 4700 Sfmt 4700 $53,375 30,500 Total cost $869,929 108,917 E:\FR\FM\09MYR1.SGM 09MYR1 7% 3% $813,018 95,132 $844,591 102,665 28008 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations TABLE 21—COST OF CSM PLANS UNDER THE PROPOSED RULE (ADDING VESSELS UNDER 500 GT TO INTERIM RULE ESTIMATES), UNDISCOUNTED AND DISCOUNTED AT 7 PERCENT AND 3 PERCENT—Continued U.S.-flagged cost Year Foreignflagged Total cost 7% 3% 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6 ........................................................................................... 7 ........................................................................................... 8 ........................................................................................... 9 ........................................................................................... 10 ......................................................................................... 78,417 78,417 78,417 78,417 78,417 78,417 78,417 78,417 30,500 30,500 38,125 38,125 38,125 38,125 45,750 45,750 108,917 108,917 116,542 116,542 116,542 116,542 124,167 124,167 88,909 83,092 83,093 77,657 72,577 67,829 67,539 63,120 99,674 96,771 100,530 97,602 94,759 91,999 95,164 92,392 Total .............................................................................. 1,522,307 388,875 1,911,182 1,511,966 1,716,147 Annualized ........................................................................... ........................ ........................ ........................ 215,270 201,185 The 7-percent annualized cost for the proposed modification to the CSM requirement is 215,270, compared to 212,226 for the interim rule, as shown in Table 15. Table 22 presents a revised 10-year schedule. It adds the 26,250 cost of new CSMs for the 3 vessels under 500 gross tons to the other requirements for reporting lost or jettisoned cargo and approval of classification societies. TABLE 22—SUMMARY OF THE 10-YEAR TOTAL COST OF THE PROPOSED RULE (ADDING VESSELS UNDER 500 GT TO INTERIM RULE ESTIMATES) BY SECTOR, UNDISCOUNTED AND DISCOUNTED AT 7 PERCENT AND 3 PERCENT Year Industry Government Total 7% 3% 1 ........................................................................................... 2 ........................................................................................... 3 ........................................................................................... 4 ........................................................................................... 5 ........................................................................................... 6 ........................................................................................... 7 ........................................................................................... 8 ........................................................................................... 9 ........................................................................................... 10 ......................................................................................... $779,890 99,403 99,417 99,430 107,068 107,081 107,108 107,121 114,759 114,786 $90,514 10,013 10,023 10,034 10,044 10,055 10,076 10,086 10,097 10,118 $870,404 109,416 109,440 109,464 117,112 117,136 117,184 117,207 124,856 124,904 $813,462 95,568 89,336 83,510 83,499 78,053 72,976 68,216 67,913 63,495 $845,052 103,135 100,153 97,257 101,022 98,100 95,281 92,524 95,692 92,940 Total .............................................................................. 1,736,063 181,060 1,917,123 1,516,028 1,721,156 Annualized ........................................................................... ........................ ........................ ........................ 215,848 201,772 With the addition of self-propelled vessels that are less than 500 gross tons, the annualized cost at a 7-percent discount rate increases to 215,848, compared to 212,804 for the interim rule, as shown in Table 19. mstockstill on DSK3G9T082PROD with RULES B. Small Entities 1. Summary of Findings The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) (RFA) and Executive Order (E.O.) 13272 require a review of proposed and final rules to assess their impacts on small entities. An agency must prepare an initial regulatory flexibility analysis (IRFA) unless it determines and certifies that a rule, if promulgated, would not have a significant impact on a substantial number of small entities. During the SNPRM stage, we published an IRFA to aid the public in commenting on the potential small business impacts of the proposals in the SNPRM. All interested parties were invited to submit data and VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 information regarding the potential economic impact that would result from adoption of the proposals in the SNPRM. Under the RFA, we have considered whether this 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. We determined that this interim rule affects a variety of large and small businesses, not-for-profit organizations, and governments (see the ‘‘Description of the Potential Number of Small Entities’’ section below). Based on the information from this analysis, we found— • Using size standards from the Small Business Administration (SBA), the 83 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 U.S-flagged vessels are controlled by 21 entities, none of which are small. The 6,353 foreign-flagged vessels are controlled by 1,023 entities. A review of the entities that control these vessels found that one foreign-flagged vessel is controlled by a non-U.S. not-for-profit entity that is not considered to be small, 7 foreign-flagged vessels are controlled by government agencies, and the remaining 6,345 foreign-flagged vessels are controlled by businesses. An analysis of a sample of the businesses controlling these vessels indicates that 48 percent are considered small. • Compliance actions will consist of upgrading deficient CSMs and reporting lost or jettisoned cargo. • Of the small entities in our sample with revenue information, 62 percent of them had an impact of less than 1 percent, and 28 percent had an impact within the 1 percent to 3 percent range. The Regulatory Flexibility Act also requires an agency to conduct a final E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations regulatory flexibility analysis (FRFA) unless it determines and certifies that a rule is not expected to have a significant impact on a substantial number of small entities. We are not able to certify that the interim rule will not have a significant economic impact on a substantial number of small entities. Therefore, we have prepared the following FRFA. mstockstill on DSK3G9T082PROD with RULES 2. FRFA The RFA establishes ‘‘as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.’’ This FRFA was developed in accordance with Section 604(a) of the RFA. An FRFA must provide and/or address— a. A statement of the need for, and objectives of, the rule; b. A statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the rule as a result of such comments; c. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the SBA in response to the rule, and a detailed statement of any change made to the interim rule as a result of the comments; d. A description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available; e. A description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities that will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; f. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the interim rule and why each one of the other significant alternatives to the rule considered by the agency which affect VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 the impact on small entities was rejected; g. For a covered agency, as defined in section 609(d)(2), a description of the steps the agency has taken to minimize any additional cost of credit for small entities. a. A statement of the need for, and objectives of, the rule. The Coast Guard undertook this rulemaking to align U.S. regulations with the CSM requirements of SOLAS. The provisions of this rule also authorize recognized classification societies to review and approve CSMs on behalf of the Coast Guard, prescribe how other organizations can become CSM approval authorities, and prescribe when and how the loss or jettisoning of cargo must be reported. Enforcing those requirements should help prevent or mitigate the consequences of vessel cargo loss, and promote the Coast Guard maritime safety and stewardship missions. Sections 2103 and 3306 of 46 U.S.C. provide the statutory basis for this rule. Section 2103 gives the Secretary of the department in which the Coast Guard is operating general regulatory authority to implement Subtitle II (Chapters 21 through 147) of Title 46, which includes statutory requirements in 46 U.S.C. Chapter 33 for inspecting the vessels to which this rule applies. Section 3306 gives the Secretary authority to regulate an inspected vessel’s operation, fittings, equipment, appliances, and other items in the interest of safety. The Secretary’s authority under both statutes has been delegated to the Coast Guard in Department of Homeland Security Delegation No. 0170.1(92)(a) and (b). Additionally, the United States is a party to SOLAS. Where SOLAS must be enforced through U.S. regulations, those regulations are authorized by E.O. 12234. b. A statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments. We received no specific comments in response to the IRFA. However, in response to one commenter’s suggestion, when we finalize this interim rule we intend to make 33 CFR part 97, subpart A, applicable to all self-propelled vessels, regardless of tonnage, and not just to vessels of 500 gross tons or more. Also in response to comments, we have removed seagoing barges and other nonself-propelled vessels from the applicability of subpart A; this subpart now is applicable only to self-propelled vessels. In all other respects, the interim PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 28009 rule is substantively unchanged from our SNPRM proposals. c. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the interim rule as a result of the comments. We received no comments from the Chief Counsel for Advocacy of the SBA after the publication of the SNPRM. d. A description of, and an estimate of, the number of small entities to which the proposed rule will apply or an explanation of why no such estimate is available. The applicable population consists of self-propelled vessels that carry any cargo other than solid or liquid bulk commodities and are— • U.S.-flagged vessels engaged in international trade; or • Foreign-flagged vessels that are in the U.S. trade. Section VII.A.3, Affected Population, of this preamble presents an estimate of 6,436 vessels that will be subject to the interim rule. As described in Section VIII, Regulatory Analyses, of this preamble, we found that 83 vessels in the affected population were U.S.flagged. For the cost analysis, we found that these vessels were currently in compliance with the CSM requirements. Also for the cost analysis, we assumed that compliance would continue throughout the 10-year forecast period and we continue with that assumption in this FRFA. The focus of this FRFA is on the 4,353 foreign-flagged vessels, which may be under the control of U.S. entities or foreign entities. Table 23 displays a break-out of this population by the type of entity that owns or operates these vessels. TABLE 23—NON-U.S. VESSELS BY TYPE OF ENTITY Entity type Count Percent Business ............... Government .......... Not-for-Profit ......... 6,345 7 1 99.87 0.11 0.02 Total .................. 6,353 100.00 All the government entities exceed the threshold for being classified as a small entity, as they are either agencies of a foreign government or exceed the 50,000 population threshold. We excluded these government entities from the revenue impact analysis. The single not-for-profit entity is also deemed not small, as it is part of an international organization. To analyze the potential impact on these businesses, we produced a E:\FR\FM\09MYR1.SGM 09MYR1 28010 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations random sample with a 95-percent confidence level and a confidence interval of 5 percent.33 The resulting sample consisted of 288 businesses. We researched public and proprietary databases and company Web sites for the location of the company, entity type (subsidiary or parent company), primary line of business, employee size, revenue, and other information.34 During the initial research, we found 1 entity that is now out of business and excluded it from the analysis. We found that 142 of the companies in our sample are based in countries other than the United States. There are another 78 entities for which we could not locate address information. Since they operate foreign-flagged vessels and we could not find location information in the Coast Guard databases and other sources, we inferred that they are operated by firms outside of the United States. Combining this information, we identified a total of 221 non-U.S. companies and excluded them from this revenue impact analysis. The population for the revenue impact analysis consists of the remaining 67 businesses from the working sample, and we found address information that locates all 67 of them in the United States. We researched and compiled the employee size and revenue data for the 67 U.S. businesses and we compared this information to the SBA ‘‘Table of Small Business Size Standards’’ to determine if an entity is small in its primary line of business as classified in the North American Industry Classification System (NAICS).35 We determined that 35 businesses exceeded the SBA small business size standards, and 32 businesses, or 48 percent of the sample, are small by the SBA standards. The information on location and size determination is summarized in Table 24. TABLE 24—U.S. BUSINESS BY SIZE DETERMINATION Entity type Entities Percent Exceed the threshold .. Below the threshold .... 35 32 52.2 47.8 Total ........................ 67 100.0 These 32 businesses that are below the SBA size thresholds are distributed among 16 NAICS classified industries. Table 25 lists the frequency, percentage, size standard, and size threshold of NAICS codes for the 32 small businesses found in the sample. TABLE 25—NAICS CODES OF IDENTIFIED SMALL BUSINESSES NAICS code 483111 488510 487210 423310 423860 Industry .............. .............. .............. .............. .............. Count Percent Size standard Size threshold 12 5 2 1 1 37.5 15.6 6.3 3.1 3.1 Number of employees ... Revenue ......................... Revenue ......................... Number of employees ... Number of employees ... 500 $14,000,000 $7,000,000 100 100 1 1 1 3.1 3.1 3.1 Number of employees ... Number of employees ... Number of employees ... 100 100 100 1 1 3.1 3.1 Revenue ......................... Number of employees ... $25,500,000 500 1 1 1 1 1 3.1 3.1 3.1 3.1 3.1 Revenue Revenue Revenue Revenue Revenue ......................... ......................... ......................... ......................... ......................... $14,000,000 500 $25,500,000 $14,000,000 $32,500,000 541618 .............. Deep Sea Freight Transportation ..................... Freight Transportation Arrangement ................ Scenic & Sightseeing Transportation, Water ... Lumber & Wood Merchant Whls ...................... Transportation Equipment and Supplies, Except Motor Vehicles. Packaged Frozen Food Merchant Wholesalers Farm Supplies Merchant Whls ......................... Other Miscellaneous Nondurable Goods Merchant Wholesalers. Boat Dealers ..................................................... Coastal and Great Lakes Freight Transportation. Specialized Freight Tracking Long Distance ... Support Activities for Rail Transportation ........ Marine Cargo Handling .................................... Farm Product Warehousing & Storage ............ Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing. Other Management Consulting Services ......... 1 3.1 Revenue ......................... $15,000,000 Total .......... ........................................................................... 32 99.7 ........................................ ........................ 424420 .............. 424910 .............. 424990 .............. 441222 .............. 483113 .............. mstockstill on DSK3G9T082PROD with RULES 484230 488210 488320 493130 532411 .............. .............. .............. .............. .............. We selected the two industries that appeared most frequently in the random sample of entities. Businesses from these two industries accounted for 17 entities, or 53 percent of the entities in the random sample. Therefore, we assume that approximately 53 percent of all entities affected by this regulation will be in one of these industries. A brief description of the two industries affected most by this rule follows. • Deep Water Freight Transportation (483111): This industry comprises establishments primarily engaged in providing deep sea transportation of cargo to or from foreign ports. • Freight Transportation Arrangement (488510): This industry comprises establishments primarily engaged in arranging transportation of freight between shippers and carriers. These establishments are usually known as freight forwarders, marine shipping agents, or customs brokers, and offer a combination of services spanning transportation modes. e. A description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities that will be subject to the requirement and the type of professional skills necessary for preparation of the report or record. The compliance requirements of the rule consist of upgrading deficient CSMs and reporting lost or jettisoned cargo. Therefore, this rule calls for a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520). Details on the burden estimate associated with this 33 We selected a statistical sample so we would not need to research and collect employee size and revenue information for the entire affected operator population. We selected the operators in the sample through a random number generator process available in most statistical or spreadsheet software. 34 We used information and data from Cortera (www.cortera.com), Manta (https://Manta.com), and ReferenceUSA (https://www.referenceusa.com). 35 The SBA lists small business size standards for industries described in the North American Industry Classification System. See https://www.sba. gov/content/table-small-business-size-standards. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 E:\FR\FM\09MYR1.SGM 09MYR1 28011 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations collection are available in Section VIII.D of this preamble. As discussed in Section VIII.A, Regulatory Planning and Review, from 2011 through 2013, the Coast Guard conducted 14,358 vessel inspections and found problems relating to CSMs in only 9 instances, which amounts to approximately 0.1 percent of the foreign-flagged vessels whose CSMs were deficient. We anticipate that the owners or operators of these vessels will upgrade their CSMs to meet standards and comply with this rule. We do not have detailed descriptions on each of the deficiency cases. To estimate a cost for this compliance action, we apply the estimate of $7,625 to remedy a CSM, as used in the Regulatory Analysis. For reporting lost or jettisoned cargo, we noted in Section VIII.A, Cost Discussions, that when one of these incidents occurs, the vessel staff already collects the needed information for company purposes. Thus, the only additional cost to the vessel is to report this information to the Coast Guard. We estimate the additional reporting will take 0.25 hours for the vessel’s Master or other senior officer to compile and transmit the report to the Coast Guard. We estimate that the loaded wage rate for the Master or senior officer is $53.00 per hour. The cost of reporting is $13.25 (0.25 hours × $53 per hour). As discussed in Section VIII.A, Regulatory Planning and Review, we adjusted the affected population to account for anticipated growth in container traffic. In our 10-year analysis, we estimate that the number of vessels that will need to upgrade their CSMs will be 4 in Years 1 through 5, and will increase to 6 in Year 10. We also accounted for this growth in container traffic in our estimate of lost or jettisoned cargoes. In Section VIII.A, Cost Discussions, we estimate that in the first year the rule becomes effective, 20 incidents of lost or jettisoned cargo will occur. We estimate that the affected population in that year consists of 6,436 U.S.- and foreign-flagged vessels, yielding an incident rate of 0.3 percent (20 incidents/6,436 vessels). To execute a revenue impact analysis, we posited that in any given year, each business would have one vessel that will need to upgrade its CSM and one vessel that will experienc an incident of lost or jettisoned cargo. Given these assumptions, the total annual compliance cost for any company is $7,638.25, as shown in Table 26. TABLE 26—ANNUAL COMPLIANCE COST FOR REVENUE IMPACT ANALYSIS Cost Loaded wage Hours Total cost Upgrading 1 CSM ........................................................................................................................ Reporting 1 hazardous condition ................................................................................................. N/A $53 N/A 0.25 $7,625 13.25 Total ...................................................................................................................................... ........................ ........................ 7,638.25 population will have an impact of less than 1 percent and the other 28 percent will have an impact between 1 percent and 3 percent. f. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the interim rule. Also, include a description explaining why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was TABLE 27—ESTIMATED REVENUE rejected. Our cost estimate for the reporting of the lost or jettisoned cargo IMPACT ON SMALL BUSINESSES was based on information indicating Percentage that the vessel’s crew already collects Revenue impact Count of the needed information for business class companies reasons. The only additional step Less than 1% ........ 20 62.5 required by this interim rule is to 1% to 3% .............. 9 28.1 prepare the message to the Coast Guard, 3% to 5% .............. 1 3.1 and that message can be delivered by a Less than 5% ........ 2 6.3 variety of electronic media. Thus, this interim rule minimizes the burden to a Total .................. 32 100.0 vessel’s crew in order to provide additional information to the Coast As shown in Table 22, the highest Guard to enhance its execution of its cost to industry in any one year on an maritime environmental protection undiscounted basis is $114,786, which mission. occurs in Year 10. For CSMs, this interim rule is based The revenue impact analysis indicates solely on current requirements that 62 percent of the affected contained in SOLAS and current Coast mstockstill on DSK3G9T082PROD with RULES For each business in our sample with revenue data, we calculated the impact as the assumed cost of $7,638.25 as a percentage of that business’s annual revenue. This produced a range of potential revenue impacts across the sample. Table 27 presents the impact data in ranges of less than 1 percent, 1 to 3 percent, 3 to 5 percent, and greater than 5 percent. As shown in this table, for approximately 62 percent of the companies, the revenue impact is less than 1 percent of annual revenue, and for approximately 28 percent of the companies, the revenue impact is between 1 percent and 3 percent. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 Guard guidance. Our regulatory analysis indicates that 99 percent of the subject vessels currently comply with these requirements. This rule enhances the Coast Guard’s maritime safety mission without adding any new requirements to vessel owners and operators. Alternatives were considered in this interim rule and are discussed in section VIII.A, Cost Discussions, of this preamble. Alternatives include various ways to apply the requirements to prepare and implement CSMs to U.S.flagged vessels in coastwise trade. However, we concluded that standards developed for international trade cannot be economically justified for vessels operating only domestically at this time. Therefore, the focus of this interim rule is exclusively on vessels in international trade. g. For a covered agency, as defined in section 609(d)(2), a description of the steps the agency has taken to minimize any additional cost of credit for small entities. The Coast Guard is not a covered agency. C. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104– 121, we offered to assist small entities in understanding this rule so that they could better evaluate its effects on them and participate in the rulemaking. The E:\FR\FM\09MYR1.SGM 09MYR1 28012 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard. 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). D. Collection of Information This rule calls for a new 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 collection, a description of those who must collect the information, and an estimate of the total annual burden follow. The estimate covers the time for preparing and reporting for the development of a CSM, revising a CSM, notification of other hazardous conditions, and notification of lost or jettisoned cargo. This collection of information applies to rulemaking procedures regarding CSMs. Specific areas covered in this information collection include 33 CFR part 97, ‘‘Cargo Securing Manuals;’’ 33 CFR part 160, ‘‘Ports and Waterways Safety-General;’’ and 46 CFR part 97, ‘‘Operations.’’ This rule will align the CFR with SOLAS. TITLE: Cargo Securing Manuals. OMB CONTROL NUMBER: 1625– 0122. SUMMARY OF COLLECTION OF INFORMATION: The rule will add a new part 97, ‘‘Cargo Securing Manuals’’ to chapter 33 of the CFR. The collection of information burden for CSMs derives from one of these three events: • A SOLAS container vessel built after the rule becomes effective will need to develop and implement a CSM. The new vessel will need an approved CSM. • If a vessel changes its type, the CSM must be revised. An example of a type change is when a general break-bulk carrier is modified to become a containership. • If an existing vessel either changes 15 percent of its cargo securing systems or more than 15 percent of its portable securing devices, the CSM must be revised. Additionally, this interim rule will impose burdens for the notification of hazardous conditions. Currently, these notifications are made via VHS radio, satellite radio, cell phones, and other forms of electronic communication. The rule specifically allows for electronic communications, and we anticipate this will continue to be how the notifications are transmitted. Need for Information: Vessel owners or operators need to develop and implement CSMs to fulfill international safety standards established by SOLAS. The Coast Guard needs timely information on hazardous conditions to carry out its missions relating to protecting vessels, their crews and passengers, and the environment. Proposed use of Information: For new and modified CSMs, Coast Guardauthorized third-party organizations will review these CSMs and, if they are found to be acceptable, approve them. The Coast Guard will use the information from the notification of hazardous conditions to inform other vessel operators or waterway users of the situation and initiate any needed measures to reduce or eliminate the hazard. These actions will lead to a reduction of vessel casualties and pollution. Description of Respondents: There are three groups of respondents impacted by this interim rule: • Owners or operators of U.S.-flagged vessels that will need to submit new or revised CSMs to the recognized classification societies. • Recognized classification societies and other approved third-party organizations that will review the CSMs on behalf of the Coast Guard. • The operators of vessels that will be required to report hazardous conditions. Number of Respondents: We estimate that there will be 276 respondents affected annually by the CSM requirements. The total is divided into these three classes: (1) 83 for new CSMs; (2) 9 for revisions to existing CSMs; and (3) 184 notifications of hazardous conditions, which include lost or jettisoned cargo and other incidents. Table 28 describes the calculations for developing the estimates of each requirement relating to the CSM plans. TABLE 28—ESTIMATES OF NUMBER OF RESPONDENTS Class Requirement Description CSM .................................. Develop CSM, new vessel Revise CSM, change in vessel type. Revise CSM, replace CSM systems or equipment. 83 in Year 1 ................................................................ MISLE data shows none of the affected vessels have changed vessel type from 2001–2012. Annual rate of 11.3% from information supplied by an approved organization. Applied to U.S. population (see Table 3), (83 × 11.3%). 83 0 ........................ ........................ 9 ........................ .......................................... Notifications of hazardous condition. Notifications of lost or jettisoned cargo. ..................................................................................... From MISLE, average of 2009–2011 notifications .... ........................ 180 92 ........................ U.S. notifications, Table 8, year 10 ............................ 4 ........................ CSM Total ................. Notifications ...................... Count Total mstockstill on DSK3G9T082PROD with RULES Notifications Total ...... .......................................... ..................................................................................... ........................ 184 Grand Total ........ .......................................... ..................................................................................... ........................ 276 Frequency of Response: A CSM is valid indefinitely, provided it does not meet any of the conditions for a revision. The reporting of hazardous VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 conditions occurs as needed. In the subsequent ‘‘Number of Respondents’’ section, we present annual estimates of the reports. PO 00000 Frm 00028 Fmt 4700 Sfmt 4700 Burden of Response: The burden hours per requirement is estimated and shown below in Table 29. E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations 28013 TABLE 29—ANNUAL BURDEN HOURS PER REQUEST Requirement Hours Develop new CSM ...................................................................... Revise CSM—change in vessel type ......................................... Revise CSM—change in cargo securing systems or equipment Notification of hazardous condition ............................................ Notification of lost of jettisoned cargo ........................................ Estimated Total Annual Burden: We estimate that the total annual burden to industry will be 4,210 hours. Table 30 displays the total burden hours for each request: TABLE 30—TOTAL ANNUAL BURDEN HOURS Requirement Hours Develop new CSM ........................ Revise CSM, change in vessel type ........................................... Revise CSM, change in cargo securing systems or equipment .... Notification of hazardous condition ............................................ Notification of lost or jettisoned cargo ......................................... 3,984 Total .......................................... 4,210 0 180 45 1 Note: Total does not exactly sum due to independent rounding. mstockstill on DSK3G9T082PROD with RULES Reason For Change: This interim rule will require collections of information regarding these two activities: (1) Development or revision of a CSM; and (2) notification of hazardous conditions, including lost or jettisoned cargo. The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that we consider the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid OMB control number. This interim rule will impose new information collection requirements. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we will submit these new information collection requirements to OMB for its review. Notice of OMB information collection will be published in a future Federal Register notice. E. Federalism A rule has implications for federalism under E.O. 13132, Federalism, if it has substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 Notes 48 48 20 0.25 0.25 8 hours to survey the vessel and 40 hours to draft the CSM. 8 hours to survey the vessel and 40 hours to draft the CSM. 20 hours to revise the existing CSM. 0.25 hours for vessel crew to prepare and transmit the notice. 0.25 hours for vessel crew to prepare and transmit the notice. responsibilities among the various levels of government. We have analyzed this rule under E.O. 13132 and have determined that it does not have implications for federalism. Our analysis follows. It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled, now, that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels), as well as the reporting of casualties and any other category in which Congress intended the Coast Guard to be the sole source of a vessel’s obligations, are within the field foreclosed from regulation by the States. (See the decision of the Supreme Court in the consolidated cases of United States v. Locke and Intertanko v. Locke.) 36 This rule on cargo securing falls into the category of vessel operation. Because the States may not regulate within this category, the rule is consistent with the principles of federalism and preemption requirements in E.O. 13132. Additionally, 33 CFR 160.215 is promulgated under the authority of the Ports and Waterways Safety Act, Title I, and therefore, under the principles of Locke, preempts any conflicting or similar State regulations.37 The Locke court also held that Congress preempted the field of marine casualty reporting. The Coast Guard does not believe that this proposed amendment to an existing reporting requirement would be preemptive of any existing State or local regulations or requirements. However, any prospective State requirement for information reporting that conflicts with or is similar to the one proposed in this interim rule would be inconsistent with the federalism principles enunciated in Locke and therefore would be preempted. The Coast Guard recognizes the key role that State and local governments 36 529 U.S. 89, 120 S.Ct. 1135 (March 6, 2000). our statement to this effect, 68 FR 9537 at 9543 (Feb. 28, 2003). 37 See PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 may have in making regulatory determinations. Additionally, for rules with federalism implications and preemptive effect, E.O. 13132 specifically directs agencies to consult with State and local governments during the rulemaking process. If you believe this interim rule has implications for federalism under E.O. 13132, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section of this preamble. F. Unfunded Mandates Reform Act Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4, 2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. 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 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. G. Taking of Private Property This rule will not cause a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. H. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. I. Protection of Children We have analyzed this rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and will not create an environmental risk to health or risk to safety that might disproportionately affect children. J. Indian Tribal Governments This rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it E:\FR\FM\09MYR1.SGM 09MYR1 28014 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. mstockstill on DSK3G9T082PROD with RULES K. Energy Effects We have analyzed this rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a ‘‘significant energy action’’ under that order because it is not a ‘‘significant regulatory action’’ under E.O. 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under E.O. 13211. L. Technical Standards The National Technology Transfer and Advancement Act (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule uses technical standards other than voluntary consensus standards. It incorporates two circulars and one resolution adopted by arms of the International Maritime Organization, an international organization under United Nations auspices, of which the United States is a member state. The two circulars describe in detail how a vessel’s owner or operator may comply with CSM requirements contained in the International Convention for the Safety of Life at Sea. The resolution provides guidelines for third parties acting on behalf of a government agency like the Coast Guard. All three documents may be obtained from the IMO using the address given in the regulatory text for new 33 CFR 97.110. M. Environment We have analyzed this rule under Department of Homeland Security Management Directive 023–01 and VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321–4370f), and have concluded that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded under section 2.B.2, figure 2–1, paragraph (34)(d) and under section 6(a) of the ‘‘Appendix to National Environmental Policy Act: Coast Guard Procedures for Categorical Exclusions, Notice of Final Agency Policy’’ (67 FR 48244, July 23, 2002). This rule involves regulations which concern documentation and equipping of vessels, as well as regulations concerning vessel operation safety standards. An environmental analysis checklist and a categorical exclusion are available in the docket where indicated under ADDRESSES. List of Subjects Cargo stowage and securing, Cargo vessels, Hazardous materials, Incorporation by reference, Reporting and recordkeeping requirements. 33 CFR Part 160 Administrative practice and procedure, Harbors, Hazardous materials transportation, Marine safety, Navigation (water), Personally identifiable information, Reporting and recordkeeping requirements, Seamen, Vessels, Waterways. 46 CFR Part 97 Cargo vessels, Marine safety, Navigation (water), Reporting and recordkeeping requirements. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR chapter I and 46 CFR part 97 as follows: Title 33—Navigation and Navigable Waters 1. Add part 97 to subchapter F to read as follows: ■ PART 97—RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND SECURING OF CARGOES Subpart A—Cargo Securing Manuals Sec. 97.100 Applicability—Electronic documentation. 97.105 Definitions. 97.110 Incorporation by reference. 97.115 Reporting lost or jettisoned cargo. 97.120 Cargo securing manuals. 97.121–97.199 [Reserved] Frm 00030 Fmt 4700 Subpart B—[Reserved] Authority: 46 U.S.C. 2103, 3306; E.O. 12234; Department of Homeland Security Delegation No. 0170.1(92)(a) and (b). PART 97—RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND SECURING OF CARGOES Subpart A—Cargo Securing Manuals § 97.100 Applicability—Electronic documentation. 33 CFR Part 97 PO 00000 97.200 Cargo securing manual (CSM) approval for U.S.-flagged vessels on international voyages. 97.205 Requirements for amending an approved cargo securing manual (CSM). 97.210 Appeals. 97.211–97.299 [Reserved] 97.300 Authorized cargo securing manual (CSM) approval authorities. 97.305 Requests for authorization to act as cargo securing manual (CSM) approval authority. 97.310 Criteria for authorization. 97.315 Requirements for authorized approval organizations. 97.320 Revocation of authorization. Sfmt 4700 (a) This subpart applies to— (1) A self-propelled cargo vessel of 500 gross tons or more, on an international voyage, that must comply with Chapter VI/5.6 or Chapter VII/5 of the International Convention for the Safety of Life at Sea, 1974 as amended (SOLAS), that does not solely carry liquid or solid cargoes in bulk, and that is either a U.S.-flagged self-propelled cargo vessel, or a foreign-flagged selfpropelled cargo vessel that is operating in waters subject to the jurisdiction of the United States; (2) A U.S.-flagged self-propelled cargo vessel that chooses to have this subpart applied to it by submitting a cargo securing manual for approval in accordance with § 97.200(a)(3); (3) A foreign-flagged self-propelled cargo vessel of 500 gross tons or more on an international voyage from a country that is not a signatory to SOLAS, that would otherwise be required to comply with Chapter VI/5.6 or Chapter VII/5 of SOLAS, that does not solely carry liquid or solid cargoes in bulk, and that is operating in waters subject to the jurisdiction of the United States; and (4) Any organization applying to be selected as a cargo securing manual approval authority. (b) This subpart does not apply to a vessel owned by the Maritime Administration that is part of the Ready Reserve Force or the title of which is vested in the United States and which is used for public purposes only. (c) Any manual, letter, request, appeal, or ruling required by this E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations § 97.110 subpart may be provided or submitted in electronic form or in printed form. mstockstill on DSK3G9T082PROD with RULES § 97.105 Definitions. As used in this subpart— Approval authority means a CSM approval authority, as that term is defined in this section. Cargo means the goods or merchandise conveyed in a vessel, and includes, but is not limited to, cargo that can be measured as a ‘‘cargo unit’’ as that term is used in the International Maritime Organization’s Code of Safe Practice for Cargo Stowage and Securing, 2003 edition: ‘‘a vehicle, container, flat, pallet, portable tank, packaged unit, or any other entity, etc., and loading equipment, or any part thereof, which belongs to the ship but is not fixed to the ship . . .’’; but it does not include other vessel equipment or the incidental personal possessions of persons on board the vessel. Cargo safe access plan (CSAP) means a plan included in the cargo securing manual that provides detailed information on safe access for persons engaged in work connected with cargo stowage and securing on ships that are specifically designed and fitted for the purpose of carrying containers. Cargo securing manual (CSM) means an electronic or printed manual developed to meet the requirements of SOLAS and this subpart and that is used by the master of a vessel to properly stow and secure cargoes on the vessel for which it is developed. Cargo securing manual approval authority or CSM approval authority means an organization that meets the requirements of this subpart, and that the Commandant has authorized to conduct certain actions and issue electronic or printed approval letters on behalf of the United States. Captain of the Port (COTP) means the U.S. Coast Guard officer as described in 33 CFR 6.01–3. Commandant, except as otherwise specified, means the Chief, Office of Operating and Environmental Standards, whose address is Commandant (CG–OES), 2703 Martin Luther King, Jr. Avenue SE., Stop 7509, Washington, DC 20593–7509 and whose telephone number is 202–372–1404. Container means an article of transport equipment described in 49 CFR 450.3. Container vessel means a vessel specifically designed and fitted for the purpose of carrying containers. International voyage means a voyage between a port or place in one country (or its possessions) and a port or place in another country. VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 Incorporation by reference. (a) Certain material is incorporated by reference into this subpart with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved material is available for inspection by contacting Mr. Ken Smith of the Coast Guard’s Vessel and Facility Operating Standards Division, Commandant (CG–OES–2); telephone 202–372–1413, email Ken.A.Smith@uscg.mil, and is available from the sources listed below. It is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030 or go to https://www. archives.gov/federal_register/code_of_ federal_regulations/ibr_locations.html. (b) International Maritime Organization (IMO), Publications Section, 4 Albert Embankment, London, SE1 7SR, United Kingdom, +44(0)20 7735 7611, https://www.imo.org. (1) MSC.1/Circ.1352, Amendments to the Code of Safe Practice for Cargo Stowage and Securing (CSS Code), June 30, 2010 (Maritime Safety Committee Circular), IBR approved for § 97.120(b). (2) MSC.1/Circ. 1353/Rev.1, Revised Guidelines for the Preparation of the Cargo Securing Manual, December 15, 2014 (Maritime Safety Committee Circular), IBR approved for § 97.120(a). (3) Resolution A.739(18) (Res.A.739(18)), Guidelines for the Authorization of Organizations Acting on Behalf of the Administration, November 22, 1993 (Assembly Resolution), IBR approved for § 97.310(a). § 97.115 cargo. Reporting lost or jettisoned (a) In the event a vessel loses or jettisons at sea any cargo described in paragraph (b) of this section, it must comply with the immediate notification requirements of 33 CFR 160.215, and if the cargo contains hazardous material as defined in paragraph (c) of this section, the vessel must also report it as soon as possible in accordance with 49 CFR 176.48. (b) The cargo to which this section applies includes any container and any other cargo the loss or jettisoning of which could adversely affect the safety of any vessel, bridge, structure, or shore area or the environmental quality of any port, harbor, or navigable waterway of the United States. (c) As used in this section, ‘‘hazardous material’’ means a substance or material designated by the Secretary of Transportation as capable of posing an unreasonable risk to health, safety, and property when transported in PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 28015 commerce. The term includes hazardous substances, hazardous wastes, marine pollutants, and elevated temperature materials as defined in 49 CFR 171.8, materials designated as hazardous under the provisions of 49 CFR 172.101, and materials that meet the defining criteria for hazard classes and divisions in 49 CFR part 173. § 97.120 Cargo securing manuals. (a) Any vessel to which this subpart applies must have a cargo securing manual (CSM) on board that has been approved by the government of the country whose flag the vessel is entitled to fly; and a CSM approved after June 30, 2010, must, at a minimum, meet the guidelines in MSC.1/Circ. 1353/Rev.1, (incorporated by reference, see 33 CFR 97.110). (b) A container vessel with a keel laid on or after January 1, 2015, must include a cargo safe access plan that, at a minimum, meets the guidelines in MSC.1/Circ.1352, Annex 14, Guidance on Providing Safe Working Conditions for Securing of Containers on Deck (incorporated by reference, see 33 CFR 97.110). (c) While operating in waters under the jurisdiction of the United States, the Coast Guard may board any vessel to which this subpart applies to determine that the vessel has the document(s) required by paragraph (a) of this section on board. Any foreign-flagged vessel found not to be in compliance with paragraph (a) of this section may be detained by order of the Captain of the Port at the port or terminal where the noncompliance is found until the COTP determines that the vessel can go to sea without presenting an unreasonable threat of harm to the port, the marine environment, the vessel, or its crew. §§ 97.121–97.199 [Reserved] § 97.200 Cargo securing manual (CSM) approval for U.S.-flagged vessels on international voyages. (a) Owners of U.S.-flagged vessels on international voyages must have Cargo Securing Manuals (CSMs) approved in accordance with this part. (1) An applicant for CSM approval may be the owner or operator of the vessel, or a person acting on the owner or operator’s behalf. (2) The Commandant is responsible for overseeing and managing the review and approval of CSM approval authority applications and providing an up-todate list of organizations authorized to act under this subpart, which is available at https://www.uscg.mil/hq/ cg5/cg522/cg5222, or by requesting it in writing from the Commandant and E:\FR\FM\09MYR1.SGM 09MYR1 mstockstill on DSK3G9T082PROD with RULES 28016 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations enclosing a self-addressed, stamped envelope. (3) The applicant must submit two dated copies of a CSM that meets the requirements of this subpart to a CSM approval authority for review and approval. If any amendments are submitted, they must be dated. The CSM must include a ‘‘change page’’ document to ensure continuous documentation of amendments made and the dates they were completed. (4) The approval authority will retain one copy of the CSM for its records. (b) If the approval authority completes the review process and approves the CSM, the approval authority will provide a CSM approval letter on its letterhead, containing— (1) Date of CSM approval; (2) A subject line reading: ‘‘APPROVAL OF CARGO SECURING MANUAL (AMENDMENT—if applicable) FOR THE M/V ____, OFFICIAL NUMBER ____’’; (3) The following statement: ‘‘This is to certify that the Cargo Securing Manual (Amendment—if applicable) dated ____ for the M/V ____, Official Number ____, has been approved on behalf of the United States. The Cargo Securing Manual (Amendment—if applicable) was reviewed for compliance with Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353/Rev.1) for content, and correctness of the calculations on which the approval is based. This approval letter is to be kept with the Cargo Securing Manual, as proof of compliance with regulations VI/5.6 and VII5 of the 2004 amendments to the International Convention for the Safety of Life at Sea (SOLAS) 1974.’’; (4) Signature of the approval authority official responsible for review and approval of the CSM; and (5) The approval authority’s seal or stamp. (c) If the approval authority completes the review process and disapproves the CSM, the approval authority will provide a letter on its letterhead, containing— (1) Date of CSM disapproval; and (2) Explanation of why the CSM was disapproved and what the submitter must do to correct deficiencies. (d) The submitter of a disapproved CSM may resubmit the CSM with amendments for further review, either to correct deficiencies noted by the approval authority or to expand the CSM to fully meet the requirements of this part. (e) The original copy of the CSM approval letter must be kept with the approved CSM and its amendments, together with supporting documents VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 and calculations used in granting the approval, on board the vessel for review by Coast Guard personnel upon request. § 97.205 Requirements for amending an approved cargo securing manual (CSM). Resubmission and re-approval by a CSM approval authority are required after any of the following events occurs: (a) Reconfiguration of a vessel from one type of cargo carriage to another (e.g., a general break-bulk cargo vessel reconfigured to a container or a roll-on/ roll-off vessel). (b) Reconfiguration or replacement of 15 percent or more of the vessel’s fixed cargo securing or tie-down systems with different types of devices or systems. (c) Replacement of 15 percent or more of the vessel’s portable cargo securing devices, with different types of devices for securing the cargo not already used aboard the vessel (e.g., wire lashings replaced with turnbuckles or chains). § 97.210 Appeals. (a) A vessel owner or operator, or person acting on their behalf, who disagrees with a decision of a CSM approval authority may submit a written appeal to the approval authority requesting reconsideration of information in dispute. Within 30 days of receiving the appeal, the approval authority must provide the submitter with a final written ruling on the request, with a copy to the Commandant. (b) A submitter who is dissatisfied with the approval authority’s final written ruling may appeal directly to the Commandant. The appeal must be made in writing and include the documentation and supporting evidence the submitter wants to be considered, and may ask the Commandant to stay the effect of the appealed decision while it is under review by the Commandant. (c) The Commandant will make a decision on the appeal and send a formal response to the submitter and a copy to the approval authority. The Commandant’s decision will constitute final agency action on the appeal request. §§ 97.211–97.299 [Reserved] § 97.300 Authorized cargo securing manual (CSM) approval authorities. The following organizations are authorized to act on behalf of the United States for the review and approval of CSMs: (a) Any recognized classification society to which the Coast Guard has delegated issuance of a Cargo Ship Safety Equipment Certificate in accordance with 46 CFR 8.320(b)(4). A list of these organizations can be found PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 at www.uscg.mil/hq/cg5/cg522/cg5222 in the ‘‘Summary of Authorizations’’ link. (b) The National Cargo Bureau, Inc., 17 Battery Place, Suite 1232, New York, NY 10004–1110, 212–785–8300, https:// www.natcargo.org. § 97.305 Requests for authorization to act as cargo securing manual (CSM) approval authority. An organization seeking authorization as a CSM approval authority must make a request to the Commandant for authorization. The request must include, in writing, the items listed in this section or as otherwise specified by the Commandant. (a) A certified copy of the organization’s certificate of incorporation or partnership on file with a U.S. State, including the name and address of the organization, with written statements or documents which show that— (1) The organization’s owners, managers, and employees are free from influence or control by vessel shipbuilders, owners, operators, lessors, or other related commercial interests as evidenced by past and present business practices; (2) The organization has demonstrated, through other related work, the capability to competently evaluate CSMs for completeness and sufficiency according to the requirements of SOLAS and this part; (3) The organization has an acceptable degree of financial security, based on recent audits by certified public accountants over the last 5 years; and (4) The organization maintains a corporate office in the United States that has adequate resources and staff to support all aspects of CSM review, approval, and recordkeeping. (b) A listing of the names of the organization’s principal executives, with titles, telephone, and telefax numbers. (c) A written general description of the organization, covering the ownership, managerial structure, and organization components, including any directly affiliated organizations, and their functions utilized for supporting technical services. (d) A written list of technical services the organization offers. (e) A written general description of the geographical area the organization serves. (f) A written general description of the clients the organization is serving, or intends to serve. (g) A written general description of similar work performed by the organization in the past, noting the E:\FR\FM\09MYR1.SGM 09MYR1 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations amount and extent of such work performed within the previous 3 years. (h) A written listing of the names of full-time professional staff employed by the organization and available for technical review and approval of CSMs including— (1) Naval architects and naval engineers, with copies of their professional credentials, college degrees, and specialized training certificates; (2) Merchant mariners with Coast Guard-issued credentials, with a summary of their working experience on board cargo vessels (including vessel tonnage and types of cargo); and (3) Written proof of staff competence to perform CSM review and approval, evidenced by detailed summaries of each individual’s experience (measured in months) during the past 5 years of evaluating maritime cargo securing systems. Experience summaries must be documented on company letterhead and endorsed by a company executive who has had direct observation of the individual and quality of his or her work product. (j) A complete description of the organization’s internal quality control processes, including written standards used by the organization to ensure consistency in CSM review and approval procedures by qualified professionals. (k) A description of the organization’s training program for assuring continued competency of professional employees performing CSM review and approval who are identified in the application. (l) Evidence of financial stability over the past 5-year period, such as financial reports completed independently by certified public accountants. (m) A list of five or more business references, including names, addresses, and telephone numbers of principal executives, who can attest to the organization’s competence within the past 2 years. (n) A statement to the Coast Guard that gives its officials permission to inspect the organization’s facilities and records of CSM review and approval on behalf of the United States at any time with reasonable advance notice. (o) Any additional information the organization deems to be pertinent. mstockstill on DSK3G9T082PROD with RULES § 97.310 Criteria for authorization. (a) The Commandant will evaluate the organization’s request for authorization and supporting written materials, looking for evidence of— (1) The organization’s clear assignment of management duties; (2) Ethical standards for managers and cargo securing manual (CSM) reviewers; VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 (3) Procedures for personnel training, qualification, certification, and requalification that are consistent with recognized industry standards; (4) Acceptable standards available for the organization’s internal auditing and management review; (5) Recordkeeping standards for CSM review and approval; (6) Methods used to review and certify CSMs; (7) Experience and knowledge demonstrating competency to evaluate CSMs for completeness and sufficiency according to the requirements of SOLAS; (8) Methods for handling appeals; and (9) Overall procedures consistent with Res.A.739(18), (incorporated by reference, see § 97.110). (b) After a favorable evaluation of the organization’s request, the Commandant may arrange to visit the organization’s corporate and port offices for an on-site evaluation of operations. (c) When a request is approved, the organization and the Coast Guard will enter into the written agreement provided for by 33 CFR 97.315. If the request is not approved, the Commandant will give the organization a written explanation, and the organization may resubmit its request if it corrects any noted deficiencies. § 97.315 Requirements for authorized approval organizations. Approved organizations will enter into a written agreement with the Coast Guard that specifies— (a) The period the authorization is valid; (b) Which duties and responsibilities the organization may perform and what approval letters it may issue on behalf of the U.S.; (c) Reports and information the organization must send to the Commandant; (d) Actions the organization must take to renew the agreement when it expires; and (e) Actions the organization must take if the Commandant revokes authorization pursuant to 33 CFR 97.320. § 97.320 Revocation of authorization. The Commandant may revoke a cargo securing manual (CSM) approval authority’s authorization and remove it from the list of CSM approval authorities if it fails to maintain acceptable standards. For the purposes of 46 CFR subpart 1.03, such a revocation would be treated as involving the recognition of a classification society and could be appealed pursuant to 46 CFR 1.03– PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 28017 15(h)(4). Upon revocation, the former approval authority must send written notice to each vessel owner whose CSM it approved. The notice must include the current list of CSM approval authorities and state— (a) That its authorization as a CSM approval authority has been revoked; (b) The Coast Guard’s explanation for the revocation; and (c) That the vessel’s CSM remains valid as long as amendments have not been completed which require it to be re-approved pursuant to 33 CFR 97.200 or 97.205. Subpart B—[Reserved] PART 160—PORTS AND WATERWAYS SAFETY—GENERAL 2. The authority citation for part 160 continues to read as follows: ■ Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. Chapter 701; Department of Homeland Security Delegation No. 0170.1. Subpart C is also issued under the authority of 33 U.S.C. 1225 and 46 U.S.C. 3715. ■ 3. Revise § 160.215 to read as follows: § 160.215 Notice of hazardous conditions. (a) Whenever there is a hazardous condition either on board a vessel or caused by a vessel or its operation, the owner, agent, master, operator, or person in charge must immediately notify the nearest Coast Guard Sector Office or Group Office, and in addition submit any report required by 46 CFR 4.05–10. (b) When the hazardous condition involves cargo loss or jettisoning as described in 33 CFR 97.115, the notification required by paragraph (a) of this section must include— (1) What was lost, including a description of cargo, substances involved, and types of packages; (2) How many were lost, including the number of packages and quantity of substances they represent; (3) When the incident occurred, including the time of the incident or period of time over which the incident occurred; (4) Where the incident occurred, including the exact or estimated location of the incident, the route the ship was taking, and the weather (wind and sea) conditions at the time or approximate time of the incident; and (5) How the incident occurred, including the circumstances of the incident, the type of securing equipment that was used, and any other material failures that may have contributed to the incident. E:\FR\FM\09MYR1.SGM 09MYR1 28018 Federal Register / Vol. 81, No. 89 / Monday, May 9, 2016 / Rules and Regulations Title 46—Shipping PART 97—OPERATIONS 3. The authority citation for part 97 continues to read as follows: ■ Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3306, 6101; 49 U.S.C. 5103, 5106; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 54757; 3 CFR, 1991 Comp., p. 351; Department of Homeland Security Delegation No. 0170.1. ■ 4. Add § 97.12–10 to read as follows: § 97.12–10 SUPPLEMENTARY INFORMATION: I. Table of Abbreviations Cargo securing manuals. Each U.S.-flagged vessel that must comply with Chapter VI/5.6 or Chapter VII/5 of the International Convention for the Safety of Life at Sea, 1974 as amended must have on board a cargo securing manual that meets the requirements of 33 CFR part 97. Dated: April 28, 2016. J.G. Lantz, Director of Commercial Regulations and Standards, U.S. Coast Guard. BILLING CODE 9110–04–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [Docket No. USCG–2016–0090] RIN 1625–AA09 Drawbridge Operation Regulation; Youngs Bay, Astoria, OR Coast Guard, DHS. Temporary final rule. AGENCY: The Coast Guard is temporarily changing the operating schedule that governs the Oregon State (Old Youngs Bay) highway bridge, mile 2.4, across Youngs Bay foot of Fifth Street at Astoria, OR. The Oregon Department of Transportation (ODOT) requested to change the operating schedule of the Old Youngs Bay Bridge for work on both bascule lifts. This change will allow ODOT to operate the double bascule draw in single leaf mode, one lift at a time, which will reduce the vertical clearance of the nonoperable half of the span by five feet. DATES: This temporary final rule is effective from 12 a.m. on June 16, 2016 through 11:59 p.m. on October 31, 2016. ADDRESSES: To view documents mentioned in this preamble as being available in the docket, go to https:// www.regulations.gov, type USCG–2016– 0090 in the ‘‘SEARCH’’ box and click mstockstill on DSK3G9T082PROD with RULES SUMMARY: VerDate Sep<11>2014 16:15 May 06, 2016 Jkt 238001 CFR Code of Federal Regulations DHS Department of Homeland Security E.O. Executive order FR Federal Register NPRM Notice of Proposed Rulemaking § Section Symbol U.S.C. United States Code ODOT Oregon State Department of Transportation TFR Temporary Final Rule II. Background, Purpose and Legal Basis [FR Doc. 2016–10725 Filed 5–6–16; 8:45 am] ACTION: ‘‘SEARCH.’’ Click on Open Docket Folder on the line associated with this rulemaking. FOR FURTHER INFORMATION CONTACT: If you have questions on this temporary final rule, call or email Steven M. Fischer, Bridge Administrator, Thirteenth Coast Guard District Bridge Program Office, telephone 206–220– 7282; email d13-pf-d13bridges@ uscg.mil. The Coast Guard is issuing this temporary final rule (TFR) without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are ‘‘impracticable, unnecessary, or contrary to the public interest.’’ Under 5 U.S.C. 553(b), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because to do so would be unnecessary. This deviation is already in place and waterway users are already acting in accordance with the schedule with no actual or anticipated impacts. Additionally, in response to the initial request from the ODOT, the Coast Guard published a notice of deviation on February 3, 2016, 81 FR 6758, which temporarily changed the operating schedule of the Old Youngs Bay Bridge through June 15, 2016. The Coast Guard contacted known waterway users who indicated such a deviation would have no significant impact. Therefore, it is unnecessary to provide an opportunity for notice and comment. III. Legal Authority and Need for Rule The Coast Guard is issuing this rule under authority 33 U.S.C. 499. The ODOT owns and operates the Old Youngs Bay Bridge in accordance with 33 CFR 117.899(b). This bridge provides a vertical clearance approximately 19 feet above mean high water when in the PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 closed-to-navigation position. ODOT is conducting bridge repairs, which are scheduled to be complete on October 31, 2016. In order to facilitate bridge repairs, one half of the double bascule bridge will have a containment system installed on the non-opening half of the span. This containment system will reduce the vertical clearance of the bridge by 5 feet, or 14 feet above mean high water. Both the previous notice of temporary deviation and this TFR allow the drawtender to open only half the draw span in single leaf mode. Marine traffic on Youngs Bay consists of vessels ranging from small pleasure craft, sailboats, small tribal fishing boats, and commercial tug and tow, and mega yachts. IV. Discussion of the Rule We are amending 33 CFR 117.899 to indicate that half of the double bascule span of the Youngs Bay Bridge will be opened instead of both spans once notice has been provided to the drawtender at the Lewis and Clark River Bridge. The draw span will be operable from 7 a.m. to 5 p.m. on weekdays and from 8 a.m. to 4 p.m. on weekends. This amendment will be in effect from 12 a.m. on June 16, 2016 through 11:59 p.m. on October 31, 2016, after which the bridge will be able to open both spans as before. The TFR is necessary to accommodate extensive maintenance and restoration efforts on the Old Youngs Bay Bridge. The TFR will allow construction workers to complete bridge and highway upgrades before winter, while having minimal impact on maritime navigation. V. Regulatory Analyses We developed this rule after considering numerous statutes and Executive Orders (E.O.(s)) related to rulemaking. Below we summarize our analyses based on these statutes and E.O.(s), and we discuss First Amendment rights of protestors. A. Regulatory Planning and Review E.O. 12866 and E.O. 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a ‘‘significant regulatory action,’’ under E.O. 12866. Accordingly, it has not been reviewed by the Office of Management and Budget. This regulatory action determination is based E:\FR\FM\09MYR1.SGM 09MYR1

Agencies

[Federal Register Volume 81, Number 89 (Monday, May 9, 2016)]
[Rules and Regulations]
[Pages 27992-28018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10725]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 97 and 160

46 CFR Part 97

[Docket No. USCG-2000-7080]
RIN 1625-AA25 [Formerly RIN 2115-AF97]

Cargo Securing Manuals

AGENCY: Coast Guard, DHS.

ACTION: Interim rule and request for comment.

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SUMMARY: The Coast Guard is issuing an interim rule to require U.S. and
foreign self-propelled cargo vessels of 500 gross tons or more,
traveling on international voyages and carrying cargo that is other
than solid or liquid bulk cargo, to have cargo securing manuals (CSMs)
on board. The rule also requires those vessels to comply with certain
provisions of the International Convention for the Safety of Life at
Sea, 1974 as amended (SOLAS), authorizes recognized classification
societies or other approval authorities to review and approve CSMs on
behalf of the Coast Guard; and prescribes when and how

[[Page 27993]]

the loss or jettisoning of cargo at sea must be reported.
The Coast Guard requests public comment on its intention to extend,
in a subsequent final rule, this interim rule's requirement for vessel
CSMs to self-propelled cargo vessels under 500 gross tons, if these
vessels carry dangerous goods in packaged form on international
voyages. This interim rule promotes the Coast Guard's maritime safety
and stewardship (environmental protection) missions, helps fulfill U.S.
treaty obligations, and could help prevent or mitigate the consequences
of vessel cargo loss.

DATES: This interim rule is effective June 8, 2016. Comments must be
received by August 8, 2016. The incorporation by reference of certain
documents in this rule is approved by the Director of the Federal
Register as of June 8, 2016.

ADDRESSES: You may submit comments identified by docket number USCG-
2000-7080 using the Federal eRulemaking Portal at https://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT: For information about this document,
call or email Mr. Ken Smith, Project Manager, U.S. Coast Guard
Headquarters, Vessel and Facility Operating Standards Division,
Commandant (CG-OES-2); telephone 202-372-1413, email
Ken.A.Smith@uscg.mil.

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Public Participation and Comments
II. Abbreviations
III. Basis and Purpose
IV. Background and Regulatory History
V. Summary of the Rule
VI. Discussion of Comments on SNPRM and Changes
VII. Incorporation by Reference
VIII. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates Reform Act
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment

I. Public Participation and Comments

We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation.
We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If your material cannot be
submitted using https://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions. Documents mentioned in this notice, and all public
comments, are in our online docket at https://www.regulations.gov and
can be viewed by following that Web site's instructions. Additionally,
if you go to the online docket and sign up for email alerts, you will
be notified when comments are posted or a final rule is published.
We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, you may review a Privacy Act notice regarding the Federal
Docket Management System in the March 24, 2005, issue of the Federal
Register (70 FR 15086).
We are not planning to hold a public meeting but will consider
doing so if public comments indicate a meeting would be helpful. We
would issue a separate Federal Register notice to announce the date,
time, and location of such a meeting.

II. Abbreviations

ABS American Bureau of Shipping
BLS U.S. Bureau of Labor Statistics
CFR Code of Federal Regulations
CSAP Cargo Safe Access Plan
CSM Cargo Securing Manual
CSS Code Code of Safe Practice for Cargo Stowage and Securing
E.O. Executive Order
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
IMO International Maritime Organization
IRFA Initial Regulatory Flexibility Analysis
MARAD U.S. Department of Transportation's Maritime Administration
MBARI Monterey Bay Aquarium Research Institute
MSC Maritime Safety Committee
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
NPRM Notice of Proposed Rulemaking
NVIC Navigation and Vessel Inspection Circular
OMB Office of Management and Budget
RFA Regulatory Flexibility Act of 1980
Sec. Section Symbol
SANS Ship Arrival Notification System
SBA Small Business Administration
SNPRM Supplemental Notice of Proposed Rulemaking
SOLAS International Convention for the Safety of Life at Sea, 1974
as amended
U.S.C. United States Code
WSC World Shipping Council

III. Basis and Purpose

Sections 2103 and 3306 of Title 46, United States Code (U.S.C.),
provide the statutory basis for this rulemaking. Section 2103 gives the
Secretary of the department in which the Coast Guard is operating
general regulatory authority to implement Subtitle II (Chapters 21
through 147) of Title 46, which includes statutory requirements in 46
U.S.C. Chapter 33 for inspecting the vessels to which this rulemaking
applies. Section 3306 gives the Secretary authority to regulate an
inspected vessel's operation, fittings, equipment, appliances, and
other items in the interest of safety. The Secretary's authority under
both statutes has been delegated to the Coast Guard in DHS Delegation
No. 0170.1, para. II (92.a) and (92.b).
The purpose of this rule is to align Coast Guard regulations with
the requirements for cargo securing manuals in the International
Convention for the Safety of Life at Sea, 1974 as amended (SOLAS), and
apply those requirements to certain self-propelled U.S. cargo vessels
operating anywhere in the world, and to certain foreign-flagged self-
propelled cargo vessels operating in U.S. waters. Another purpose of
this rule is to specify when and how the loss or jettisoning of cargo
at sea must be reported.

IV. Background and Regulatory History

This rule aims to help ensure that maritime cargo is properly
secured. A recent survey by the World Shipping Council (WSC) estimated
that an average of 1,679 containers are lost overboard annually.\1\ The
number of damaged and lost containers has risen over the years due to
the increased traffic in containerized cargo and the increasing size of
containerships.
---------------------------------------------------------------------------

\1\ Survey report is on WSC Web site: https://www.worldshipping.org/industry-issues/safety/Containers_Lost_at_Sea_-_2014_Update_Final_for_Dist.pdf.
---------------------------------------------------------------------------

Several incidents since the early 1990s demonstrated that
improperly secured cargo can cause serious injury or death, vessel
loss, property damage, and environmental damage. For example, a Coast
Guard board of inquiry

[[Page 27994]]

concluded that the loss of 21 containers--4 of which contained toxic
arsenic trioxide--off the coast of New Jersey in 1992 was caused by
cargo-securing failures, bad weather, and human error.\2\ With the
support of other International Maritime Organization (IMO) member
governments, the United States led a proposal to include new
requirements for cargo securing manuals (CSMs) in SOLAS. In 1994, the
IMO amended SOLAS \3\ to provide that, after 1997, vessels of 500 gross
tons or more engaged in international trade and carrying cargo other
than solid or liquid bulk material must carry a flag state-approved
CSM; load, stow, and secure cargo in compliance with the CSM; and meet
strength requirements for securing devices and arrangements.
---------------------------------------------------------------------------

\2\ See NVIC 10-97 (Nov. 7, 1997), ``Guidelines for Cargo
Securing Manual Approval,'' available at https://www.uscg.mil/hq/cg5/nvic/pdf/1997/n10-97.pdf.
\3\ See SOLAS, Ch. VI/5.6 and Ch. VII/5.
---------------------------------------------------------------------------

The SOLAS CSM requirements are included as an annex to a Coast
Guard guidance document issued in 1997,\4\ but a vessel owner or
operator's compliance with that guidance is only voluntary. This
interim rule makes compliance with the SOLAS standards mandatory for
self-propelled vessels over 500 gross tons on international voyages
that are subject to SOLAS.
---------------------------------------------------------------------------

\4\ NVIC 10-97.
---------------------------------------------------------------------------

Previously in this rulemaking, we issued a notice of proposed
rulemaking (NPRM) \5\ in 2000 and a supplemental notice of proposed
rulemaking (SNPRM) \6\ in 2013. Although it was not part of this
rulemaking, in 1999 we held a public meeting on topics related to cargo
securing.\7\ In the SNPRM, we discussed the comments we received on the
2000 NPRM and public input from the 1999 meeting. We discuss the
comments we received on the 2013 SNPRM later in this preamble.
---------------------------------------------------------------------------

\5\ 65 FR 75201 (Dec. 1, 2000).
\6\ 78 FR 68784 (Nov. 15, 2013). Although not part of this
rulemaking, in 1999 we announced (64 FR 1648; Jan. 11, 1999, docket
USCG-1998-4951) and held a public meeting on related topics.
Comments received at that meeting were discussed in the SNPRM, 78 FR
at 68786, col. 2.
\7\ 64 FR 1648 (Jan. 11, 1999); docket USCG-1998-4951.
---------------------------------------------------------------------------

V. Summary of the Rule

This section summarizes the changes made in this interim rule.
33 CFR part 97--Rules for the Safe Operation of Vessels, Stowage
and Securing of Cargoes. The interim rule adds this part, which is
structured to allow for future regulations covering other aspects of
vessel operation and cargo stowage and securing. At this time, the part
contains only subpart A, which deals with CSMs.
Section 97.100 contains the applicability provisions of subpart A
and provides for electronic submission of any documents required by the
part. Subpart A applies to self-propelled cargo vessels of 500 gross
tons or more traveling on international voyages and carrying any cargo
other than solid or liquid bulk cargo. We expect very few vessels to be
affected by the new requirements, as most foreign vessels operating in
U.S. waters are already subject to their flag state's SOLAS CSM-aligned
requirements, and all U.S. vessels already voluntarily comply with
those requirements in order to obtain SOLAS certificates that are
necessary for entering foreign ports. Subpart A also applies to self-
propelled vessels less than 500 gross tons if their owners or operators
choose voluntarily to have it apply to them and submit CSMs for
approval.
We have revised the text of Sec. 97.100 as it appeared in the
SNPRM by removing seagoing barges and other non-self propelled vessels
from the applicability of subpart A, which were inadvertently included
in the proposed regulatory text of the SNPRM. This interim rule applies
only to self-propelled cargo vessels that are subject to SOLAS Chapter
VI/5.6 or Chapter VII/5.
As we discussed in Part V, Discussion of Comments, in our SNPRM, a
commenter suggested extending the applicability of subpart A to self-
propelled cargo vessels below 500 gross tons carrying dangerous goods
in packaged form on international voyages. We agree with the
commenter's assessment that the cargo securing manual requirements of
Chapter VII/5 of SOLAS apply to all vessels covered by other SOLAS
provisions and to vessels below 500 gross tons that carry dangerous
goods in packaged form. As previously stated, one of our intentions in
this rule is to align our regulations with SOLAS requirements for cargo
securing manuals, and therefore we propose modifying the final rule to
more accurately align with SOLAS by applying it to self-propelled cargo
vessels less than 500 gross tons carrying dangerous goods in packaged
form on international voyages, as well as to larger vessels. We
specifically request public comment on that proposed change.
Section 97.105 defines terms used in subpart A, and Sec. 97.110
provides for the incorporation in subpart A, by reference, of pertinent
IMO circulars describing how vessels may comply with the SOLAS CSM
requirements, as well as an IMO resolution providing guidelines for
third parties acting on behalf of a government agency like the Coast
Guard.
Section 97.115 requires any accidental loss or deliberate
jettisoning of a container or other cargo at sea to be reported
immediately under 33 CFR 160.215. This is because any such loss or
jettisoning creates a ``hazardous condition'' within the meaning of 33
CFR 160.204. The section also requires the loss or jettisoning of cargo
containing hazardous material to be reported as soon as possible in
accordance with the U.S. Department of Transportation's Pipeline and
Hazardous Materials Safety Administration regulations at 49 CFR 176.48.
Section 97.120 requires each vessel to which subpart A applies to
have a flag state-approved CSM that complies with applicable IMO
resolutions. Coast Guard personnel may board any vessel in U.S. waters
to verify compliance with this section. Note that any container vessel
with a keel laid on or after January 1, 2015, needs to include a cargo
safe access plan. Under the applicable IMO guidance, such a plan must
provide detailed information on safe access for persons stowing and
securing cargo on vessels that are specifically designed and fitted for
carrying containers.
Section 97.200 describes how a U.S.-flagged vessel owner or
operator applies for Coast Guard approval of the vessel's CSM. Third-
party approval authorities review and approve CSMs on the Coast Guard's
behalf. This section also describes the contents of approval
statements, the procedure to follow when a CSM is disapproved, and
document retention requirements.
Section 97.205 describes when a CSM must be resubmitted for
approval, and Sec. 97.210 contains provisions for appeal from a CSM
approval authority's decision.
Section 97.300 designates the organizations that are initially
authorized to act as CSM approval authorities, and Sec. Sec. 97.305
through 97.315 discuss who may request that authorization in the
future, the criteria for authorization, and the requirements for
approval authorities. We modified this section from what we originally
published in the SNPRM by removing specific reference to the American
Bureau of Shipping (ABS) and Lloyd's Register, because they are already
included on the list of recognized classification societies to which
the Coast Guard has delegated authority for the issuance of a Cargo
Ship Safety Equipment Certificate in accordance with 46 CFR 8.320(b)(4)
and covered

[[Page 27995]]

under the paragraph recognizing those classification societies. Section
97.320 provides for the revocation of authorization if an approval
authority fails to maintain standards acceptable to the Coast Guard.
33 CFR part 160--Ports and Waterways Safety--General. The only
change made to part 160 is an amendment to Sec. 160.215, to prescribe
the information to be reported when a hazardous condition is created by
the loss or jettisoning of cargo.
46 CFR part 97--[Cargo and Miscellaneous Vessel] Operations. The
interim rule amends the subpart 97.12 operational rules for vessels
carrying bulk solid cargoes by adding Sec. 97.12-10, which requires
such vessels to have on board a CSM that complies with 33 CFR part 97.

VI. Discussion of Comments on SNPRM and Changes

The SNPRM drew public comments from 12 sources: 7 Individuals (one
of whom submitted 2 comments, which we consider together), 2 barge
companies, 1 shipping industry organization, 1 trade association, and 1
environmental advocacy organization. The docket also contains 1 comment
from another Federal agency.
General. All three organizations and six individuals expressed
support for the Coast Guard's proposal.
The environmental advocacy organization and two individuals said
that the loss of cargo containers is a serious problem. The
organization said container loss has an immediate impact by changing
deep sea habitats, and a long term impact by changing the natural
distribution of species, including the threat of introducing invasive
species. One individual said container loss is a major threat to the
environment, to pleasure craft, and to commercial shipping. This
commenter suggested that the insurance industry should welcome our
proposal because of the economic impact of container losses. The other
individual said we should require containers to be weighed so that
weight can be distributed for safety.
We share these commenters' concern for the safety and environmental
hazards that can be caused by the loss of containers or other cargo at
sea, and we agree with most of their comments. However, we decline to
require containers to be weighed, because this information is the
subject of several existing Federal and International Maritime
Organization (IMO) requirements. The Occupational Safety and Health
Administration requires a container to be weighed before it can be
handled by U.S. workers, and the Department of Transportation has
stringent notification and certification requirements for intermodal
containers.\8\ With the Coast Guard's full participation, the IMO
recently amended an international convention to require shippers to
verify a container's gross mass to a vessel's master before it is
loaded on board.\9\ The existence of these requirements makes it
unnecessary for the Coast Guard to issue separate and potentially
overlapping provisions on the topic.
---------------------------------------------------------------------------

\8\ See 29 CFR 1918.85 and 49 U.S.C. 5902 for the Occupational
Safety and Health Administration and Department of Transportation
requirements, respectively.
\9\ The International Convention for the Safety of Life at Sea,
1974, and its Protocol of 1988. See Regulation VI/2, which enters
into force July 1, 2016. The International Maritime Organization
previously issued guidance to help ensure accurate pre-loading
container weighing; see Maritime Safety Committee Circular MSC.1/
Circ. 1475, Guidelines Regarding the Verified Gross Mass of a
Container Carrying Cargo.
---------------------------------------------------------------------------

The shipping organization said that, whereas the SNPRM based its
cost analysis on an IMO estimate of 4,000 containers lost at sea per
year worldwide, the shipping organization's own analysis found that, on
average, only 1,679 containers are lost at sea each year. We appreciate
the shipping organization's analysis and are using their most current
estimate in the regulatory analysis for this interim rule. Please see
Section VIII, Regulatory Analyses, for details.
The two towing companies expressed appreciation that we do not
propose to regulate cargo securing on barges in coastwise trade, but
opposed our SNPRM's proposed extension \10\ of such regulations to
seagoing barges in international commerce. The companies said that
barges have a strong safety record and are not subject to cargo
securing requirements under SOLAS. Therefore, they should not be
required to undertake the work of developing unique CSMs for each type
of cargo. They also pointed out that, if seagoing barges are included,
the universe of affected vessels will be far greater than the 26 U.S.-
flagged vessels the Coast Guard estimates will be impacted in its
regulatory analysis. They specifically requested that the Coast Guard
clarify that ``barges on international voyages will also be exempt from
this rulemaking.'' We agree with the commenters and the interim rule
amends the applicability provisions of new 33 CFR 97.100 so that part
97, subpart A, applies only to self-propelled vessels that are subject
to SOLAS Chapter VI/5.6 or Chapter VII/5. SOLAS does not apply to non
self-propelled vessels and the barge industry has demonstrated a strong
safety record in the past. Therefore, we do not intend to require non-
self-propelled vessels to have CSMs at this time.
---------------------------------------------------------------------------

\10\ 78 FR at 68788, col. 1.
---------------------------------------------------------------------------

Proposed change for final rule. One of the individual commenters
said that, to conform to Chapter VII/5 of SOLAS, we should regulate
cargo securing on cargo vessels below 500 gross tons as well as on
vessels of 500 gross tons and above. We agree with the commenter's
assessment that the cargo securing manual requirements of Chapter VII/5
of SOLAS apply to all vessels covered by other SOLAS provisions and to
vessels below 500 gross tons that carry dangerous goods in packaged
form. As previously stated, one of our intentions in this rule is to
align our regulations with SOLAS requirements for cargo securing
manuals, and, therefore, we propose modifying the final rule to more
accurately align with SOLAS by extending the applicability provisions
of 33 CFR 97.100 to self-propelled cargo vessels less than 500 gross
tons carrying dangerous goods in packaged form on international
voyages. We specifically request public comment on that proposal.

VII. Incorporation by Reference

The Director of the Federal Register has approved the material in
33 CFR 97.110 for incorporation by reference under 5 U.S.C. 552 and 1
CFR part 51. Copies of the material are available from the sources
listed in Sec. 97.110. The following paragraphs summarize the material
incorporated by reference.
IMO Assembly Resolution A.739(18) (Res.A.739(18)), Guidelines for
the Authorization of Organizations Acting on Behalf of the
Administration, November 22, 1993: International guidelines developed
to establish a uniform program for controlling and assigning authority
of organizations to act on behalf of administrations in conducting
surveys, certifications, and determination of tonnages.
IMO Maritime Safety Committee Circular 1352 (MSC.1/Circ.1352),
Amendments to the Code of Safe Practice for Cargo Stowage and Securing
(CSS Code) Annex 14, Guidance on Providing Safe Working Conditions for
Securing of Containers on Deck, June 30, 2010: International guidance
developed to ensure persons engaged in carrying out container securing
operations on deck have safe working conditions including safe access,
and appropriate securing equipment.
IMO Maritime Safety Committee Circular 1353 (MSC.1/Circ. 1353/
Rev.1), Revised Guidelines for the Preparation

[[Page 27996]]

of the Cargo Securing Manual, December 15, 2014: International
guidelines providing information on developing cargo securing manuals,
including required contents and details for stowing and securing non-
standardized and semi-standardized cargo.

VIII. Regulatory Analyses

We developed this interim rule after considering numerous statutes
and Executive Orders (E.O.s) related to rulemaking. Below we summarize
our analyses based on these statutes or E.O.s.

A. Regulatory Planning and Review

Executive Orders 12866, Regulatory Planning and Review, and 13563,
Improving Regulation and Regulatory Review, direct agencies to assess
the costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
This rule has not been designated a ``significant regulatory
action'' under section 3(f) of E.O. 12866, Regulatory Planning and
Review, as supplemented by E.O. 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of that E.O. Accordingly, the
rule has not been reviewed by the Office of Management and Budget
(OMB). A final Regulatory Assessment for the interim rule follows.
1. Summary
This interim rule amends the CFR by adding the following
provisions:
Requirements for the reporting of lost or jettisoned
cargo;
The CSM requirements of SOLAS, for vessels of 500 gross
tons or more;
Extending the CSM requirements to self-propelled cargo
vessels that travel on international voyages and carry cargo other than
solid or liquid bulk cargo that is designated as a dangerous good
carried in packaged form; and
Procedures for authorization of third-party organizations
to review and approve CSMs on the Coast Guard's behalf.
Table 1 presents a summary of our analysis.

Table 1--Summary of the 10-Year Regulatory Economic Impacts
----------------------------------------------------------------------------------------------------------------
Costs (7% discount rate)
Changes Description Affected -------------------------------- Benefits
population Annualized Total
----------------------------------------------------------------------------------------------------------------
1. Reporting of lost or Codify lost or U.S.- and $578 $4,063 Better tracking
jettisoned cargo. jettisoned foreign- and response
cargo as a flagged of lost or
hazardous vessels jettisoned
condition and engaged in cargo.
specify data transport to
to be reported. or from a U.S.
port.
2. CSM requirements.......... Codify SOLAS Owners/ 212,226 1,490,587 Increased
rules and operators of enforcement
guidance from 6,436 vessels: authority.
NVIC 10-97. 83 U.S.-
flagged, 6,353
foreign-
flagged.
3. Approval of authorized Codify guidance 6 currently 0 0 Increased
organizations. from NVIC 10- approved enforcement
97. organizations, authority.
others
applying for
approval
status.
--------------------------------
Total.................... ............... ............... 212,804 1,494,649
----------------------------------------------------------------------------------------------------------------
Note: Due to independent rounding, the totals may not equal the sum of the components.

Table 2 presents a summary of the 10-year cost schedule, showing
total costs on an undiscounted basis and discounted at 7-percent and 3-
percent interest rates.

Table 2--Summary of the 10-Year Total Cost to the International Cargo Industry and U.S. Government
----------------------------------------------------------------------------------------------------------------
Undiscounted Discounted
Year -------------------------------------------------------------------------------
Industry Government Total 7% 3%
----------------------------------------------------------------------------------------------------------------
1............................... $757,015 $90,514 $847,529 $792,083 $822,844
2............................... 99,403 10,013 109,416 95,568 103,135
3............................... 99,417 10,023 109,440 89,336 100,153
4............................... 99,430 10,034 109,464 83,510 97,257
5............................... 107,068 10,044 117,112 83,499 101,022
6............................... 107,081 10,055 117,136 78,053 98,100
7............................... 107,108 10,076 117,184 72,976 95,281
8............................... 107,121 10,086 117,207 68,216 92,524
9............................... 114,759 10,097 124,856 67,913 95,692
10.............................. 114,786 10,118 124,904 63,495 92,940
-------------------------------------------------------------------------------
Total....................... 1,713,188 181,060 1,894,248 1,494,649 1,698,948
-------------------------------------------------------------------------------
Annualized...................... .............. .............. .............. 212,804 199,169
----------------------------------------------------------------------------------------------------------------

[[Page 27997]]

2. Changes From SNPRM
Because there are no changes between the requirements proposed in
the SNPRM and those contained in this interim rule, and because we
received no public comments that affect the Regulatory Assessment, we
retained the structure of the economic analyses from the SNPRM, but
updated our analysis with the most current data. The data elements that
we revised for this analysis are as follows:
Affected vessel population, U.S.- and foreign-flagged
vessels used 2011 through 2013 data.
Visits to U.S. ports, updated with data from 2011 through
2013.
Wage rates for commercial and Coast Guard employees,
updated with current data.
Container ship traffic data, updated with current data.
3. Affected Population
The affected population, those vessels subject to the regulations
in this interim rule, consists of U.S.- and foreign-flagged self-
propelled vessels that--
Are engaged in international trade as indicated by
currently having a SOLAS Cargo Ship Safety Certificate;
Are 500 gross tons or more; and
Carry any cargo other than solid or liquid bulk
commodities.
The United States is a signatory state to SOLAS, and U.S.-flagged
vessels in international trade must meet SOLAS requirements, including
the CSM rules, to receive a SOLAS certificate. A 2013 extract from the
Coast Guard's Marine Information for Safety and Law Enforcement (MISLE)
database identified 83 U.S.-flagged vessels as meeting the above
tonnage and cargo criteria.
The applicable foreign-flagged vessels are those that transit U.S.
waters. The source for data on these vessels was the Coast Guard's Ship
Arrival Notification System (SANS) database. This database contains
data on notifications of arrival and departure of vessels to and from
U.S. ports and is supplemented by data from MISLE. We extracted from
SANS the most recent 3 years of data available, 2011 through 2013. This
data produced a list of 6,353 foreign-flagged vessels that had one or
more visits to a U.S. port and met the tonnage and cargo-type criteria.
Table 3 presents the affected population of 6,436 vessels categorized
by flag status, SOLAS status, and tonnage class (less than 500 gross
tons, 500 gross tons or more).

Table 3--Applicable Population, Non-Bulk Cargo Vessels
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Flag class SOLAS status Tonnage class in gross Vessels
tons
----------------------------------------------------------------------------------
U.S.......................... SOLAS................... 500 gross tons or more. .............. 83
Foreign...................... SOLAS................... 500 gross tons or more. 6,314 ..............
Non-SOLAS............... 500 gross tons or more. 39 ..............
Foreign Total........... ....................... 6,353 ..............
-------------------------------
Total.................... ........................ ....................... .............. 6,436
----------------------------------------------------------------------------------------------------------------
Notes:
(1) All U.S. vessels are SOLAS and in the 500 GT or more class.
(2) Foreign-flagged vessels will follow SOLAS CSM rules.

4. Economic Analyses
The economic analyses include--
An analysis of the costs, benefits, and alternatives for
each of the interim rule's three provisions: (a) Requirements for the
reporting of lost or jettisoned cargo, (b) CSM requirements, and (c)
Approval of authorized organizations. A summary of the costs and
benefits for the entire rule; and
A preliminary analysis of expanding the affected
population.
a. Requirements for the reporting of lost or jettisoned cargo.
i. Current practices, applicable population, and description of
changes and edits. As noted in Section IV, Background and Regulatory
History, of this preamble, the current regulations require the Coast
Guard to be notified immediately when a hazardous condition is caused
by a vessel or its operation. Incidents of lost or jettisoned cargo
\11\ are considered hazardous conditions and must be reported. However,
current industry practice does not correspond with that interpretation.
According to Captain James J. McNamara, President of the National Cargo
Bureau in 2000, ``When a container or containers are lost overboard,
usually there is no news release and seldom is the fact publicized. The
loss is only revealed to those in a need-to-know situation, i.e., the
ship owner, shipper, receiver, and insurer.'' \12\ As we will discuss
in detail, our research indicates a significant underreporting of lost
or jettisoned cargo to the Coast Guard. Coast Guard and other vessels
cannot respond to these unreported incidents, so they represent a risk
to navigation and the marine environment. The underreporting also
prevents the Coast Guard and other interested parties from accurately
tracking the extent and trends of lost cargo incidents.
---------------------------------------------------------------------------

\11\ All data and industry reports refer only to containers when
describing incidents involving lost or jettisoned cargo. We will
assume that containers will continue as the only lost cargo in the
future and refer to containers as the generic description of the
involved cargo for this analysis.
\12\ McNamara, James J., ``Containers and Cargoes Lost
Overboard,'' National Cargo Bureau; conference of the International
Union of Marine Insurers; September 13, 2000, https://www.iumi.com/images/stories/IUMI/Pictures/Conferences/London2000/Wednesday/02%20mcnamara%20cargo.pdf.
---------------------------------------------------------------------------

In this interim rule we include requirements for the immediate
reporting of lost or jettisoned cargo. We anticipate that adoption of
these requirements will correct this underreporting and lead to some
increased costs to industry. Table 4 presents the change matrix for
modifying the reporting of hazardous conditions and summarizes the
specific edit or change, the affected population, and the economic
impact.

Table 4--Change Matrix for Reporting of Hazardous Conditions in 33 CFR
------------------------------------------------------------------------
Affected
Reference and description population Economic impact
------------------------------------------------------------------------
97.100 Applicability:
. . . (a)(1), U.S. vessels.. U.S. cargo vessels None,
and non-U.S. administrative
cargo vessels in only.
U.S. waters.

[[Page 27998]]

97.105 Definitions.............. All vessels and None,
approval administrative
organizations. only.
97.110 Incorporation by All affected None,
reference, lists IBR references. vessels and administrative
approval only.
organizations.
97.115 Situation requiring Vessels subject to Costs for
report, criteria for reporting the rule that correction of
lost cargo. lose cargo noncompliance
overboard. with existing
requirements.
160.215(a), requirement to Operators of No change, new
report hazardous condition. vessels involved label of existing
in incident text.
resulting in
hazardous
condition.
160.215(b), data to be reported. Operators of This requirement
vessels involved references 97.115
in incident and all costs are
resulting in included there.
hazardous
condition.
------------------------------------------------------------------------
Source: Coast Guard analysis.

ii. Affected population. This interim rule applies to both U.S.-
and foreign-flagged vessels engaged in transport to or from U.S. ports.
Therefore, the costs for reporting the lost or jettisoned cargo must be
accounted for throughout the entire applicable population of 6,436
vessels, as reported in Table 3.
For the years 2009 through 2013, there were only five incidents of
containers lost or damaged at sea and reported to the Coast Guard. As
previously noted, industry experts assert that many incidents of lost
or jettisoned cargo are not reported to the appropriate authorities. To
test this assertion, we developed an estimate of lost or jettisoned
cargo incidents that are subject to Coast Guard rules.
As the base of our estimate, we used the annual estimate of 1,679
containers lost at sea worldwide, as reported by the World Shipping
Council (WSC) in its 2014 report \13\ to the IMO's Sub-Committee on
Carriage of Cargoes and Containers.\14\ The WSC's estimate is based on
a survey of their membership. The survey respondents accounted for 70
percent of the world's container-ship capacity. The WSC adjusted the
survey data to account for the 30 percent non-respondents. They also
prepared two estimates, one without catastrophic events and the other
that included the less-frequent catastrophic ones with large numbers of
lost containers. We reviewed the WSC's methodology and we are satisfied
that it produced a valid estimate. As we are using a 10-year forecast
for our analysis, we needed to account for the low frequency-high
consequence events, and used the higher annual estimate that included
the catastrophic events.
---------------------------------------------------------------------------

\13\ The report is on WSC's Web site: https://www.worldshipping.org/industry-issues/safety/Containers_Lost_at_Sea_-_2014_Update_Final_for_Dist.pdf.
\14\ Report number CCC 1/NF 9, dated June 27, 2014.
---------------------------------------------------------------------------

However, the WSC report was not categorized by route or flag of the
vessel. We derived the U.S. share of global container traffic using
data reported by the U.S. Department of Transportation's Maritime
Administration (MARAD), which reported in 2011 that there were 376,389
container ship visits worldwide,\15\ and that, out of this total,
22,089 were at U.S. ports.\16\ Thus, the U.S. share of global container
traffic is 5.9 percent (22,089/376,389).
---------------------------------------------------------------------------

\15\ See https://www.marad.dot.gov/documents/Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 7, ``Global Vessel Calls
by Country, 2011.''
\16\ See https://www.marad.dot.gov/documents/Vessel_Calls_at_US_Ports_Snapshot.pdf, p. 3. ``Containership Calls
at U.S. Ports by Size, 2006-2011.''
---------------------------------------------------------------------------

We used that 5.9 percent share to estimate that about 99 containers
in U.S. traffic are lost annually (1,679 containers lost world-wide x
5.9 percent U.S. share of traffic, rounded). The 5 incidents resulted
in a loss of a total of 25 containers, so we estimate on average there
were 5 lost containers per incident. Using those data, we estimate that
there will be 20 reports of lost containers to the Coast Guard (99
containers lost/5 containers per incident, rounded to the nearest 10)
in the first year the rule becomes effective.
The Tioga Group, a freight transportation services consulting
firm,\17\ in its report \18\ on the container market to the port
authorities of Los Angeles and Long Beach, presents estimates of 4.9
percent annual compounded growth rate for the United States in
container traffic from 2010 to 2020. We assume that the number of lost
container incidents will grow proportionally with the growth in
container trade. We applied the Tioga Group's estimate of 4.9 percent
growth rate to the base estimate of 20 lost containers in Years 2
through 10 in this cost analysis. This yields an estimate of 31
incidents by Year 10 (the complete series is shown in the ``Estimated
Incidents'' column of Table 6).
---------------------------------------------------------------------------

\17\ For information on The Tioga Group, see www.tiogagroup.com.
\18\ The Tioga Group, Inc. and IHS Global Insight, ``San Pedro
Bay Container Forecast Update'', Exhibit 33: Total U.S. Loaded Total
TEU and CAGRs, p. 33, www.portoflosangeles.org/pdf/spb_container_forecast_update_073109.pdf.
---------------------------------------------------------------------------

iii. Costs. When cargo is lost or jettisoned, the vessel staff
already collects data for company purposes.\19\ Thus, the only
additional cost for compliance with this rule is the time to report the
data to the Coast Guard and for the Coast Guard to record the data.
Coast Guard staff who are familiar with vessel operations and incident
reporting estimated that it will take 0.25 hours for a Master or other
senior ship's officer to compile a report and transmit it to the Coast
Guard.
---------------------------------------------------------------------------

\19\ Captain James J. McNamara, ``Containers and Cargo Lost
Overboard'', p. 2. National Cargo Bureau; conference of the
International Union of Marine Insurers; September 13, 2000, https://www.iumi.com/images/stories/IUMI/Pictures/Conferences/London2000/Wednesday/02%20mcnamara%20cargo.pdf.
---------------------------------------------------------------------------

The wage rate for the Master was obtained from the U.S. Bureau of
Labor Statistics (BLS), using Occupational Series 53-5021, Captains,
Mates, and Pilots of Water Vessels. The BLS reports that the hourly
rate for a Master is $36.34 per hour.\20\ To account for benefits, the
load factor, or ratio between total compensation and wages is
calculated at 1.44,\21\ using BLS data. The fully loaded wage rate for
a Master is estimated at $53 per hour ($36.34 base wages x 1.44 load
factor, rounded up to capture the entire cost). The cost for the
additional time to report an incident is $13.25 ($53 x 0.25).
---------------------------------------------------------------------------

\20\ Mean wage, https://www.bls.gov/oes/2013/may/oes535021.htm.
\21\ Load Factor calculation, source: https://www.bls.gov/news.releases/archives/ecec_09112013.htm, all Workers Total
compensation, $31,00/Wages and salaries, $21.44.
---------------------------------------------------------------------------

Similarly, we estimate that it will take a quarter of an hour for
Coast Guard personnel at the E-4 level to record the data. The fully
loaded wage rate for an E-4 rating is $42, per Commandant Instruction
7310.1N. \22\ The unit cost for the Coast Guard is $10.50 ($42 per hour
x 0.25 hours).
---------------------------------------------------------------------------

\22\ https://www.uscg.mil/directives/ci/7000-7999/CI_7310_1N.pdf.

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

[[Page 27999]]

As shown in Table 5, the unit cost for reporting lost or jettisoned
cargo is $23.75.

Table 5--Unit Cost for Reporting Lost or Jettisoned Cargo
----------------------------------------------------------------------------------------------------------------
Task Time (hours) Wage rate Cost
----------------------------------------------------------------------------------------------------------------
Master to report................................................ 0.25 $53 $13.25
CG data entry (E4).............................................. 0.25 42 10.50
-----------------------------------------------
Total....................................................... .............. .............. 23.75
----------------------------------------------------------------------------------------------------------------
Sources: BLS, Coast Guard estimates.

The baseline estimate of lost or jettisoned cargo incidents, the
growth rate, and the unit cost data provide the inputs into the 10-year
cost schedule. Table 6 displays the input data and the resulting cost
estimates on an undiscounted basis and discounted at 7-percent and 3-
percent interest rates.

Table 6--Cost Schedule for Reporting Lost or Jettisoned Cargo
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Estimated Rounded Industry cost Coast Guard Total cost -------------------------------
incidents incidents cost 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 20 20 $265 $210 $475 $444 $461
2....................................... 20.98 21 278 221 499 436 470
3....................................... 22.01 22 292 231 523 427 479
4....................................... 23.09 23 305 242 547 417 486
5....................................... 24.22 24 318 252 570 406 492
6....................................... 25.41 25 331 263 594 396 497
7....................................... 26.66 27 358 284 642 400 522
8....................................... 27.97 28 371 294 665 387 525
9....................................... 29.34 29 384 305 689 375 528
10...................................... 30.78 31 411 326 737 375 548
---------------------------------------------------------------------------------------------------------------
Total............................... .............. .............. 3,313 2,628 5,941 4,063 5,008
---------------------------------------------------------------------------------------------------------------
Annualized.............................. .............. .............. .............. .............. .............. 578 587
--------------------------------------------------------------------------------------------------------------------------------------------------------

To provide an estimate of costs by flag status, we extracted from
the Coast Guard's SANS database the vessels calling on U.S. ports in
2011.\23\ We divided the vessels into U.S.- and foreign-flagged status.
Table 7 presents the data and shows that in 2013, U.S.-flagged vessels
accounted for 11.8 percent of the visits by vessels that would be
subject to this interim rule.
---------------------------------------------------------------------------

\23\ 2011 is the most recent year of verified data.

Table 7--2013 Visits to U.S. Ports by Flag-Status of Vessels Non-Bulk
Trade
------------------------------------------------------------------------
Flag Visits Percent
------------------------------------------------------------------------
United States........................... 2,955 11.8
Foreign................................. 22,001 88.2
-------------------------------
Total............................... 24,956 100.0
------------------------------------------------------------------------

We produced an estimate for U.S. costs of lost or jettisoned cargo
by applying the 11.8 percent of visits by U.S.-flagged vessels from
Table 7 to the cost estimates from Table 6. Note that U.S. costs
include both costs to U.S.-flagged vessels and the Coast Guard. Table 8
displays the data for the U.S. costs.

[[Page 28000]]

Table 8--Cost Schedule for U.S.-Flagged Vessels for Reporting Lost or Jettisoned Cargo
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Rounded Industry cost CG cost Total cost -------------------------------
incidents 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 2 $27 $21 $48 $45 $47
2....................................................... 2 27 21 48 42 45
3....................................................... 3 40 32 72 59 66
4....................................................... 3 40 32 72 55 64
5....................................................... 3 40 32 72 51 62
6....................................................... 3 40 32 72 48 60
7....................................................... 3 40 32 72 45 59
8....................................................... 3 40 32 72 42 57
9....................................................... 3 40 32 72 39 55
10...................................................... 4 53 42 95 48 71
-----------------------------------------------------------------------------------------------
Total............................................... .............. 387 308 695 474 586
-----------------------------------------------------------------------------------------------
Annualized.............................................. .............. .............. .............. .............. 67 69
--------------------------------------------------------------------------------------------------------------------------------------------------------

We obtained the costs of reporting lost or jettisoned cargo for
non-U.S.-flagged vessels by subtracting the U.S. costs, as reported in
Table 8, from the costs as displayed in Table 6. Table 9 presents the
results of these calculations.

Table 9--Cost Schedule for Non-U.S.-Flagged Vessels for Reporting Lost or Jettisoned Cargo
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Rounded Industry cost Coast Guard Total cost -------------------------------
incidents cost 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 18 239 189 428 400 416
2....................................................... 19 252 200 452 395 426
3....................................................... 19 252 200 452 369 414
4....................................................... 20 265 210 475 362 422
5....................................................... 21 278 221 499 356 430
6....................................................... 22 292 231 523 348 438
7....................................................... 24 318 252 570 355 463
8....................................................... 25 331 263 594 346 469
9....................................................... 26 345 273 618 336 474
10...................................................... 27 358 284 642 326 478
-----------------------------------------------------------------------------------------------
Total............................................... .............. 2,930 2,323 5,253 3,593 4,430
-----------------------------------------------------------------------------------------------
Annualized.............................................. .............. .............. .............. .............. 512 519
--------------------------------------------------------------------------------------------------------------------------------------------------------

iv. Benefits. A 2011 news release from the Monterey Bay Aquarium
Research Institute (MBARI) \24\ stated that containers that fall from
ships can ``float at the surface for months'' and that ``most
eventually sink to the seafloor.'' While they float they can present a
hazard to navigation. However, sunken containers may pose immediate and
long-term threats to the marine environment. The MBARI news release
also stated that ``[N]o one knows what happens to these containers once
they reach the deep seafloor'' and that ``[p]erhaps 10 percent of
shipping containers carry household and industrial chemicals that could
be toxic to marine life.'' The small number of MISLE incidents provides
additional information. Of the 25 containers, one container held 22,500
pounds of used batteries and another held an unspecified hazardous
material.
---------------------------------------------------------------------------

\24\ https://www.mbari.org/news/news_releases/2011/containers/containers-release.html.
---------------------------------------------------------------------------

The immediate benefit of the reporting provisions is that they will
enhance the Coast Guard's ability to identify potential problems with
securing equipment, locate and warn mariners about drifting containers
that endanger safe navigation, and assess and respond to any potential
environmental hazard created by the cargo loss. In the longer term,
having complete and accurate data on lost cargo incidents will enable
the Coast Guard and other parties to identify industry trends and track
potential long-term threats to the marine environment from sunken
containers.
v. Alternatives. We considered possible alternatives to this rule.
One possibility, as suggested in the SNPRM, would be to limit the
reporting of lost containers to only those containing hazardous
materials. However, we consider any overboard container to be a
potential hazard to navigation and, as noted above, the contents may
pose a long-term threat to the marine environment. To ensure safety of
navigation and the marine environment, we believe all lost or
jettisoned cargo should be reported. As one commenter noted, the
containers may not disintegrate for hundreds of years once they reach
the floor. Thus, the long-term impacts on the environment are extremely
hard to assess.
Another alternative we considered was to reduce the amount of
information to be sent to the Coast Guard in order to minimize
recordkeeping burden. We examined the data specified in this rule and
determined that all of it would be needed by the Coast Guard in order
to completely evaluate the situation and determine the appropriate
response. Therefore, we believe that the reporting requirements in this
rule will provide the Coast Guard with sufficient

[[Page 28001]]

information to fulfill its missions of maritime safety and marine
environmental protection while minimizing the vessel's recordkeeping
and reporting burdens.
b. CSM Requirements.
i. Current practices, applicable population, and description of
changes and edits. As stated in Section IV of this preamble, Background
and Regulatory History, the Coast Guard has developed guidance,\25\
based on IMO Circular 1353, for implementing SOLAS provisions for cargo
securing manuals.
---------------------------------------------------------------------------

\25\ NVIC 10-97.
---------------------------------------------------------------------------

Under the Coast Guard's safety and security vessel examinations
program, the Coast Guard checks that the subject vessels in U.S. ports
have CSMs and that the crews follow them. MISLE data show that from
2011 through 2013, the 83 U.S.-flagged vessels that are part of the
affected population were subject to 646 inspections. In all of these
inspections there were no citations for a deficient CSM.
MISLE also recorded that from 2011 through 2013, the Coast Guard
conducted 14,358 vessel inspections of foreign-flagged vessels and
found problems relating to CSMs in only 9 instances. These data
indicate an ongoing compliance process for both U.S.- and foreign-
flagged vessels subject to CSM rules. Therefore, the Coast Guard
anticipates that the only costs regarding the CSM requirement, once the
requirements of SOLAS and Coast Guard guidance are moved into the CFR,
would be those associated with owners or operators of the few deficient
vessels who are prompted to ensure their CSMs are fully compliant with
SOLAS prior to entering U.S. waters.
Tables 10 and 11 present the change matrix for the edits to Titles
33 and 46 of the CFR, respectively, that relate to the CSM requirements
of the interim rule. Each matrix summarizes the specific edit or
change, the affected population, and the economic impact.

Table 10--Change Matrix for Adding CSM Requirements to 33 CFR
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.100 Applicability:
. . . (a)(1), U.S. U.S. cargo vessels, None, administrative
vessels. non-U.S. cargo only.
vessels of 500
gross tons or more
in U.S. waters.
. . . (a)(2), voluntary U.S. vessels No change, codifies
compliance. requesting coverage. guidance currently
located in NVIC.
. . . (b), exemption for Ready Reserve and None, these vessels
Ready Reserve and public vessels. currently are
public vessels. exempted.
. . . 97.105 Definitions All vessels and None, administrative
approval only.
organizations.
. . . 97.110 All affected vessels None, administrative
Incorporation by and approval only.
reference (lists IBR organizations.
references).
97.120 Cargo Securing
Manuals:
. . . (a)(1), CSMs SOLAS vessels and Cost of developing
required. non-U.S., non-SOLAS CSM for
vessels noted with noncompliant
deficient CSMs by vessels.
Coast Guard.
. . . (a)(2), CSAP Non-SOLAS vessels... Edit to close
required after 2015. regulatory gap. No
costs, no current
vessels affected
and none expected
in future.
. . . (b), authorizes CG All U.S.- and No cost, provides
enforcement. foreign-flagged authority for
vessels subject to current CG
the rule. compliance
activities.
------------------------------------------------------------------------
Source: Coast Guard analysis.

Table 11--Change Matrix for Edits to 46 CFR 97 That Apply to U.S. SOLAS
Vessels
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.12-10 Cargo securing Owners and operators Administrative edit,
manuals, new section to of U.S. SOLAS all costs accounted
reference new 33 CFR 97.120. vessels. for in 33 CFR
97.120.
------------------------------------------------------------------------
Source: Coast Guard analysis.

ii. Affected population. As stated earlier, the Coast Guard's
current safety and security examinations include checking to see if a
subject vessel has a current CSM and that the crew follows it. The
inspection results indicate that the 83 U.S.-flagged vessels in
international trade are all in the 500 gross tons or more class and
that they comply with the SOLAS CSM rules. Under an assumption that
they will continue with those practices, this establishes a baseline of
current compliance throughout the 10-year analysis period. In this
scenario, the U.S.-flagged vessels will incur no additional costs from
this rule. However, to conduct a thorough regulatory analysis, we
included the 83 U.S.-flagged vessels in the analysis and assumed that
they will obtain a SOLAS-compliant CSM in the first year the rule is in
effect. A review of the year-built data for these vessels shows that
the most recently built was in 2009. We assume that this trend of no
new builds will continue and that the population will remain stable at
83 vessels per year throughout the 10-year analysis period.
Additionally, the interim rule requires that a CSM must be revised
if one of these two criteria are met:
1. The vessel changes its type. As an example, a former break-bulk
carrier is modified to become a container ship.
2. An existing vessel changes 15 percent of its cargo securing
systems or more than 15 percent of its portable securing devices.
MISLE data indicates that none of the subject U.S.-flagged vessels
have changed vessel type from 2001 through 2012. We assume that this
trend will continue and that no vessels will change type during our
analysis period. From information provided by an approved

[[Page 28002]]

organization,\26\ we estimated that, on an annual basis, 11.3 percent
of the U.S.-flagged fleet revises it CSM based on the second criterion
described above. We applied this rate to the subject 83 U.S-flagged
vessels to estimate that 9 vessels per year will revise their CSMs (83
x 11.3 percent, rounded) in Years 2 through 10 of the analysis period.
---------------------------------------------------------------------------

\26\ To protect proprietary information, we cannot provide the
name of the organization.
---------------------------------------------------------------------------

Foreign-flagged vessels that are 500 gross tons or more follow
SOLAS rules and current Coast Guard guidance. We estimated the costs of
compliance for these vessels based on the following assumptions:
(1) In the absence of the rule, the current deficiency rate for
subject foreign-flagged vessels would continue.
(2) Under the rule, the increased enforceability posture from
codifying the CSM rules will lead all vessels to comply with the SOLAS
standards and current Coast Guard guidance prior to entering U.S.
waters. That is, the deficiency rate will be reduced to zero for
foreign-flagged vessels.
We reported above that there were nine deficiencies related to CSMs
from 2011through 2013. These deficiencies are comprised of five that
were missing approval from an authorized organization, three that did
not have a CSM on the vessel, and one that had a CSM with missing
sections. Table 12 presents the data from 2011 through 2013 for the
calculation of a deficiency rates by year and an annual average for the
3 years.

Table 12--Annual CSM Deficiency Rate
----------------------------------------------------------------------------------------------------------------
Vessel CSM Deficiency
Year examinations deficiencies rate (percent)
----------------------------------------------------------------------------------------------------------------
2011............................................................ 5,135 2 0.04
2012............................................................ 4,464 4 0.09
2013............................................................ 4,759 3 0.06
-----------------------------------------------
Total....................................................... 14,358 9 * 0.06
----------------------------------------------------------------------------------------------------------------
* Average deficiency rate.

We used the average deficiency rate of 0.06 percent throughout our
10-year analysis period. The estimate of the number of deficient CSMs
in any year equals the estimate of the vessel population for that year
multiplied by the deficiency rate.
As reported in Table 3 in the ``SOLAS Class'' subtotal, there are
6,353 foreign-flagged vessels that are currently subject to the CSM
requirements. Applying the 0.06 percent deficiency rate from Table 12
yields an estimate of four vessels that will need to remedy deficient
CSMs in the first year the rule comes into effect.
In the analysis of the reporting requirements, we cited the Tioga
Group's report on the container market that growth in container
shipments to the United States is expected to increase,\27\ so a flat
extrapolation of the seven CSMs in the first year through Years 2
through 10 of the analysis period would result in an underestimate.
---------------------------------------------------------------------------

\27\ The Tioga Group, Inc. and IHS Global Insight, ``San Pedro
Bay Container Forecast Update'', Exhibit 33: Total U.S. Loaded Total
TEU and CAGRs, p. 33, www.portoflosangeles.org/pdf/spb_container_forecast_update_073109.pdf.
---------------------------------------------------------------------------

We used the Tioga Group's estimate of a 4.9 percent rate for our
estimate for growth in our 10-year analysis period. Currently, we do
not have detailed information on the current and projected capacity
utilization of container ships visiting U.S. ports, so we posited that
the trips per year of the affected vessels would remain constant
through the analysis period. With that assumption, we applied the 4.9
percent annual growth rate to the fleet of foreign-flagged vessels
serving U.S. ports.
For Years 2 through 10, the base population is the base population
from the previous year multiplied by the 4.9 percent growth rate. The
resulting estimates of the base populations are shown in the ``Base
Population'' column of Table 14.
iii. Costs. To obtain a current estimate for the cost of developing
a CSM, we contacted industry cargo securing subject matter experts in
2013.\28\ These experts are familiar with the entire development of
CSMs, including vessel survey, evaluation of cargo securing equipment
and procedures, preparation of manuals, and training of crews. From the
information they provided, we estimate that the cost to develop a CSM
will range between $7,500 and $10,000, depending on factors such as the
size and type of vessel. We used the midpoint of this range, $8,750
(($7,500 + $10,000)/2), as the unit cost of developing a CSM.
---------------------------------------------------------------------------

\28\ The data obtained contain proprietary information and are
not available publicly.
---------------------------------------------------------------------------

We anticipate that a CSM will be revised to either remedy a
deficiency or because the vessel met the previously discussed criterion
of new cargo securing systems. We do not have detailed descriptions of
each deficiency or changes in cargo securing equipment, so for the unit
cost, we assume that a vessel will revise the CSM using an existing
survey of the vessel. A 2013 study conducted by ABS Consulting, Inc.
for the Coast Guard provided estimates on the costs of a suite of
marine engineering and naval architecture services.\29\ That study
estimated that the average cost of a survey for a freight ship is
$1,125. We estimate the unit cost to remedy a deficiency as the average
cost of developing a CSM [$8,750 = ($7,500 + $10,000)/2)] less the
average cost of a survey. This yields an estimated unit cost of $7,625
($8,750 - $1,125).
---------------------------------------------------------------------------

\29\ ABS Consulting, Inc, ``Study of Marine Engineering and
Naval Architecture Costs for Use in Regulatory Analyses,'' Table 5,
p. 26. A copy of this study can be found in the docket for this
rulemaking.
---------------------------------------------------------------------------

The costs to the Federal government are accounted for by the
oversight actions performed by the authorized approval organizations.
These actions include reviewing new or revised CSMs, issuing letters of
approval, and, for CSMs that are not approved, issuing letters that
explain why the CSMs were not approved. We anticipate that the reviews
of the CSM will be conducted by a marine engineer or naval architect.
We estimate that each review will take on average 2 working days and
another hour will be needed to prepare the appropriate correspondence
to the vessel's managers. Thus, the attributed burden to the Federal
government for each review is 17 hours ((2 x 8) + 1 = 17).
We estimate that the average loaded (including benefits) hourly
wage for a marine architect or naval engineer is

[[Page 28003]]

$64 per hour.\30\ The unit cost to review one CSM is $1,088 (17 hours x
$64 per hour). Table 13 shows the undiscounted costs to industry and
the Federal government for the 10-year analysis period.
---------------------------------------------------------------------------

\30\ Mean hourly wage of $44.10 for a marine engineer/naval
architect from the Bureau of Labor Statistics (https://www.bls.gov/oes/2011/may/oes172121.htm) multiplied by load factor of 1.44 to
account for benefits (ftp://ftp.bls.gov/pub/special.requests/ocwc/ect/ececqrtn.pdf).
---------------------------------------------------------------------------

Costs for Foreign-Flagged Vessels
As foreign-flagged vessels are obtaining and revising CSMs under
the auspices of their flag states, their only cost for this interim
rule is to remedy deficiencies. The cost in each year is the number of
deficient vessels times the unit cost of $7,625. Table 13 presents the
undiscounted cost estimate for foreign-flagged vessels over the 10-year
period.

Table 13--Costs to Foreign-Flagged Vessels for Developing CSMs
----------------------------------------------------------------------------------------------------------------
Base
Year population Remedied Unit cost Total cost
----------------------------------------------------------------------------------------------------------------
1............................................... 6,353 4 $7,625 $30,500
2............................................... 6,664 4 7,625 30,500
3............................................... 6,991 4 7,625 30,500
4............................................... 7,334 4 7,625 30,500
5............................................... 7,693 5 7,625 38,125
6............................................... 8,070 5 7,625 38,125
7............................................... 8,465 5 7,625 38,125
8............................................... 8,880 5 7,625 38,125
9............................................... 9,315 6 7,625 45,750
10.............................................. 9,771 6 7,625 45,750
---------------------------------------------------------------
Total....................................... .............. 48 .............. 366,000
----------------------------------------------------------------------------------------------------------------

Costs for U.S.-Flagged Vessels
As discussed previously, all 83 U.S.-flagged vessels have CSMs and
have operated under them for over a decade. In addition, current
business practices, particularly the requirements of insurers, would
also indicate the use of a CSM. For these reasons, and as presented in
the Regulatory Analysis of the NPRM, the requirements in this interim
rule are not expected to result in a change in practice or incur a cost
for the 83 U.S.-flagged vessels.
For the purposes of this regulatory analysis, we also compute costs
assuming a baseline without CSMs for the 83 U.S.-flagged vessels. The
cost for U.S.-flagged vessels to develop CSMs is presented in Table 14.

Table 14--Costs of Developing CSMs for U.S. Vessels to Industry and the Federal Government
----------------------------------------------------------------------------------------------------------------
Federal
Year Base Industry CSM Industry cost Government Total cost
population cost cost
----------------------------------------------------------------------------------------------------------------
1............................... 83 $8,750 $726,250 $90,304 $816,554
2............................... 9 7,625 68,625 9,792 78,417
3............................... 9 7,625 68,625 9,792 78,417
4............................... 9 7,625 68,625 9,792 78,417
5............................... 9 7,625 68,625 9,792 78,417
6............................... 9 7,625 68,625 9,792 78,417
7............................... 9 7,625 68,625 9,792 78,417
8............................... 9 7,625 68,625 9,792 78,417
9............................... 9 7,625 68,625 9,792 78,417
10.............................. 9 7,625 68,625 9,792 78,417
-------------------------------------------------------------------------------
Total....................... 164 .............. 1,343,875 178,432 1,522,307
----------------------------------------------------------------------------------------------------------------

Table 15 presents the total costs for foreign-flagged vessels and
U.S.-flagged vessels assuming a pre-CSM baseline on an undiscounted
basis and the total costs discounted at rates of 7 percent and 3
percent. As shown in Table 15, the total 10-year cost for upgrading
CSMs at a 7-percent discount rate is $1,490,587, or $212,226 on an
annualized basis.

Table 15--CSMs--Undiscounted Component and Total Costs; and Total Costs at Discount Rates of 7 Percent and 3
Percent
----------------------------------------------------------------------------------------------------------------
Undiscounted Discounted
-------------------------------------------------------------------------------
Year U.S- flagged Foreign-
cost flagged cost Total cost 7% 3%
----------------------------------------------------------------------------------------------------------------
1............................... $816,554 $30,500 $847,054 $791,639 $822,383
2............................... 78,417 30,500 108,917 95,132 102,665

[[Page 28004]]

3............................... 78,417 30,500 108,917 88,909 99,674
4............................... 78,417 30,500 108,917 83,092 96,771
5............................... 78,417 38,125 116,542 83,093 100,530
6............................... 78,417 38,125 116,542 77,657 97,602
7............................... 78,417 38,125 116,542 72,577 94,759
8............................... 78,417 38,125 116,542 67,829 91,999
9............................... 78,417 45,750 124,167 67,539 95,164
10.............................. 78,417 45,750 124,167 63,120 92,392
-------------------------------------------------------------------------------
Total....................... 1,522,307 366,000 1,888,307 1,490,587 1,693,939
-------------------------------------------------------------------------------
Annualized...................... .............. .............. .............. 212,226 198,581
----------------------------------------------------------------------------------------------------------------

iv. Benefits. The benefit of adding the SOLAS requirements and
current Coast Guard guidance on CSMs to the CFR is increased Coast
Guard enforcement authority. We previously cited the statistics from
the Coast Guard's CSM inspection activities from 2009 through 2011 for
both U.S.- and foreign-flagged vessels. However, as noted in Section
IV, Background and Regulatory History, of this preamble, the only
current U.S. implementation of the CSM is via current Coast Guard
guidance, which is unenforceable. Incorporating these rules into the
CFR elevates the guidelines and standards to being a Federal
regulation. As described in Section III, Basis and Purpose, of this
preamble, the Coast Guard has existing authorities to inspect vessels,
regulate an inspected vessel's operation, fittings, equipment, and
appliances, and implement SOLAS. The Coast Guard believes that it can
enforce the provisions of this rule under these authorities.
v. Alternatives. Alternatives to this provision of the rule that we
considered include various ways to apply the requirements to prepare
and implement CSMs to U.S.-flagged vessels in coastwise trade. The NPRM
published in 2000 presented five options for applying CSM regulations
to U.S. domestic voyages. Table 16 presents descriptions of these
options and a summary of the comments.

Table 16--Options To Extend CSM Requirements to U.S. Domestic Voyages
------------------------------------------------------------------------
Option No. Description Summary of comments
------------------------------------------------------------------------
1...................... Extend SOLAS 4 supported, 5 opposed
requirements to for these reasons:
domestic voyages.
Preferred
compromise of Options
1 & 2;
Not requiring
regular reviews;
Too
restrictive;
Require too
much standardization;
and
Would not
work for seagoing
barges as no two
barge cargoes are
identical.
2...................... Vessel specific 1 supported, 5 opposed
standards, Coast Guard for these reasons:
approval.
Evaluate
against experience
with continuous
examination program
and noted similarity
with Option 5;
Too many
variables causing
unneeded burden;
Would not
work, but did not
give specific
reasons;
Second
choice; and
Preferred
compromise of Options
1 and 2.
3...................... Certificate for One commenter stated
carrying hazardous its decision would
materials. depend on specific
requirements, and 3
commenters opposed
for these reasons:
Surveyors for
multiple voyages not
feasible for cost and
availability;
Could not
ensure surveyor
availability; and
High costs of
surveyors.
4...................... Allow each vessel to One commenter noted
choose from among that companies
Options 1, 2, and 3. supporting domestic
rules would find this
attractive, but did
not state its own
opinion. Another
stated that it
combined the
strengths and
weaknesses of the
other Options. One
opposed for unstated
reasons and another
was opposed because
the ``menu of
options'' would cause
confusion.
5...................... Standards developed Three comments
with industry. supported, 1 for
unstated reasons and
2 because of its
flexibility; and 1
commenter was opposed
because it would not
ensure meeting needs
of different vessel
types and operations.
------------------------------------------------------------------------

[[Page 28005]]

The options presented in the NPRM were only outlined and did not
have cost estimates. We developed a cost estimate for Option 1 that
would extend SOLAS requirements to domestic vessels. We added these
details to Option 1 to make the calculations:
The affected population will be U.S.-flagged vessels in
coastwise trade. The geographic identification was vessels with
coastwise route certifications. We identified 688 vessels from MISLE
that met these requirements, comprised of 195 freight barges, 160
freight ships, and 333 offshore supply vessels.
In general, the vessels in the U.S. affected population
for this alternative are smaller than the foreign-flagged vessels that
comprise the affected population of the regulation. Data comparisons
for the U.S. fleet shows average gross tons of 8,165 and average length
of 326 feet. The comparable data for the foreign-flagged vessels is
average gross tonnage of 31,306 and average length of 619 feet.
Therefore, for the unit cost of the U.S. coastwise vessels, we assigned
the low-end value of $7,500, which came from the range supplied by the
subject matter experts we contacted. The recent history of new builds
is projected to continue through the 10-year analysis period. MISLE
reported 22 new vessels per year from 2009 through 2012, and we used
this in our analysis.
A phase-in period was not in the NPRM, but we added a 3-
year phase-in period to this interim rule to mitigate the burden on
both vessel owners and the authorized approval organizations. We assume
that vessel owners will distribute the certification of the manuals for
their vessels evenly over the phase-in period. This will enable vessel
owners and authorized approval organizations to schedule cargo securing
approvals in conjunction with vessel down-time, such as scheduled
examinations or times of vessel repairs and upgrades.
With these parameters, we developed a 10-year cost schedule for
Option 1. Because the costs to foreign-flagged vessels would be the
same for Option 1 as for the preferred alternative, the data presented
show the marginal costs for Option 1. The annualized cost, using a 7-
percent discount rate, would be $807,605. The cost estimates are
displayed in Table 17.

Table 17--Cost Estimate for Option 1, Extend CSM Requirements to Domestic Vessels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted
Year Existing New vessels Total vessels Unit cost Total cost -------------------------------
vessels 7% 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 229 22 251 $7,500 $1,882,500 $1,759,346 $1,827,670
2....................................... 229 22 251 7,500 1,882,500 1,644,248 1,774,437
3....................................... 230 22 252 7,500 1,890,000 1,542,803 1,729,618
4....................................... 0 22 22 7,500 165,000 125,878 146,600
5....................................... 0 22 22 7,500 165,000 117,643 142,330
6....................................... 0 22 22 7,500 165,000 109,946 138,185
7....................................... 0 22 22 7,500 165,000 102,754 134,160
8....................................... 0 22 22 7,500 165,000 96,032 130,253
9....................................... 0 22 22 7,500 165,000 89,749 126,459
10...................................... 0 22 22 7,500 165,000 83,878 122,775
---------------------------------------------------------------------------------------------------------------
Total............................... 688 220 908 6,810,000 5,672,277 6,272,487
---------------------------------------------------------------------------------------------------------------
Annualized.............................. .............. .............. .............. .............. .............. 807,605 735,327
--------------------------------------------------------------------------------------------------------------------------------------------------------

The goal of Option 1 is to reduce the occurrence and impacts of
lost containers in U.S. coastwise trade. However, the comments to the
NPRM indicate that this is not a significant problem. One commenter
stated that cargo losses from barges are rare, another stated that
seagoing barges ``are generally safe from cargo loss,'' and another
commenter stated that ``most cargo losses result from container
structural problems that the vessel owner or operator cannot know about
or prevent.'' However, as described above, the reporting of these
incidents is uncertain. We anticipate that, with the more accurate
reporting required by this interim rule, we will be able to validate
this assertion. Additionally, our initial cost estimates, as presented
in Table 17, indicate that industry would incur annualized costs,
discounted at 7 percent, of $807,605 beyond what is in this rule.
Therefore, this interim rule focuses exclusively on vessels in
international trade. However, the Coast Guard can reevaluate this
position and initiate another rulemaking for the U.S. coastwise trade
if new information indicates either underreporting or an upward trend
of lost containers.
c. Approval of Authorized Organizations
The Coast Guard authorizes classification societies and other
organizations to review and approve CSMs on its behalf. The procedures
for these organizations are currently found in Coast Guard guidance and
cover selection criteria, information required by organizations
applying for authorization status, and the Coast Guard's application
review procedures, termination of authorization procedures, and appeals
procedures.
Following the procedures in current Coast Guard guidance, the Coast
Guard has authorized these six classification societies to review and
approve CSMs: American Bureau of Shipping (ABS), Det Norske Veritas
(DNV), Lloyd's Register of Shipping (LR), Germanischer Lloyd (GL), RINA
S.p.A, and ClassNK (NK).\31\ We anticipate that no other classification
societies will be applying for CSM approval authority in the near
future.\32\
---------------------------------------------------------------------------

\31\ List of classification societies authorizations: https://www.uscg.mil/hq/cg5/acp/docs/ClassSocietyAuths22Dec2013.pdf.
\32\ For more information see the final rule ``Approval of
Classification Societies'', VII. A, ``Regulatory Planning and
Review'', 77 FR 47548, RIN 1625-AB35).
---------------------------------------------------------------------------

However, current Coast Guard guidance is not legally enforceable.
This interim rule will incorporate these procedures from guidance into
the CFR with only some minor editorial changes, such as updating the
address of Coast Guard Headquarters. Therefore, we believe there will
be no additional regulatory costs associated with the codification of
these application procedures. Table 18 presents the change matrix for
the codification of the class society approval guidance into the CFR
and summarizes the specific edit or

[[Page 28006]]

change, the affected population, and the economic impact.

Table 18--Change Matrix for Incorporating Class Society Approval
Procedures Into 46 CFR
------------------------------------------------------------------------
Reference & description Affected population Economic impact
------------------------------------------------------------------------
97.100 Applicability:
. . . (a)(4), New applicants...... No impact,
organizations applying incorporates
for CSM approval current guidance
authority. into regulations.

97.115 Situation requiring Vessels subject to Costs for correction
report, criteria for the rule that lose of noncompliance
reporting lost cargo. cargo overboard. with existing
requirements.
97.200 CSM approval for U.S.
vessels on international
voyages:
. . . (a)(1), authorized Owners, operators, Administrative
applicants include and agents, of new change, guidance
owner, operator, or U.S. vessels in only referenced
agent. international trade. owner.
. . . (a)(2), CG Organizations No change,
oversight of approval applying for CSM incorporates
authority applications. approval authority. current guidance
into regulations.
. . . (a)(3), U.S. vessels in No change,
application procedures. international trade. incorporates
current guidance
into regulations.
. . . (a)(4), approval Authorized approval No change,
authority retains a organizations. incorporates
copy. current guidance
into regulations.
. . . (b), approval Authorized approval No change,
letter contents. organizations. incorporates
current guidance
into regulations
. . . (c), disapproval Authorized approval No change,
procedures. organizations. incorporates
current guidance
into regulations.
. . . (d), resubmit Owners or operators No change,
procedures. resubmitting a CSM. incorporates
current guidance
into regulations.
. . . (e), documents Owners or operators No change,
kept on vessel. of U.S. vessels incorporates
subject to the rule. current guidance
into regulations.
97.205 Requirements for Owners or operators No change,
amending an approved CSM, of U.S. vessels incorporates
amending procedures. subject to the rule. current guidance
into regulations.
97.210 Appeals, appeals Owners or operators No change,
procedures. of U.S. vessels incorporates
subject to the rule current guidance
and authorized into regulations
approval
organizations.
97.300 Authorized CSM ABS, DNV, LR, GL, No change,
approval authorities, lists RINA, NK, National incorporates
approved organizations. Cargo Bureau. current guidance
into regulations.
97.305 Requests for Organizations No change,
authorization, application seeking to become incorporates
process. approved current guidance
organizations. into regulations.
97.310 Criteria for CG and organizations No change,
authorization, evaluation seeking to become incorporates
criteria. approved current guidance
organizations. into regulations.
97.315 Requirements for CG and authorized No change,
authorized approval approval substantively
organizations, organizations. incorporates and
responsibilities of CG and rewords current
authorized approval guidance into
organizations. regulations.
97.320 Revocation of CG and referenced No change,
authorization, procedures organizations. substantively
for CG revoking an incorporates and
authorization. rewords current
guidance into
regulations.
------------------------------------------------------------------------
Source: Coast Guard analysis.

We considered alternatives to these changes and edits, and we
concluded that there were no viable alternatives. The procedures in
current Coast Guard guidance provide a complete description of all
processes needed for approval and oversight of the subject
organizations. Reducing or eliminating any of them, such as the one
covering appeals, would leave a gap in the approval or oversight
processes. We did not identify any weaknesses or gaps in the current
Coast Guard guidance, other than the editorial changes. We also
concluded that the recordkeeping information in the current Coast Guard
guidance provides complete documentation for all the involved parties--
vessel owners or operators, and approved organizations. Reducing or
eliminating any of the recordkeeping rules would run the risk of
producing a gap in the documentation. Conversely, adding additional
recordkeeping rules would only increase associated burdens, but not
provide any additional useful information.
In summary, the rules governing organizations approved to issue
CSMs will codify current procedures with no associated costs to
industry or the government. The benefit of these rules is that they
will provide a regulatory basis for the Coast Guard's oversight of
organizations authorized to approve CSMs.
d. Review of Costs and Benefits. The total cost of this interim
rule is for the two cost elements: (1) Reporting of lost or Jettisoned
Cargo; and (2) CSM Requirements. Table 19 presents the 10-year total
cost schedule assuming a pre-CSM baseline for undiscounted costs, and
the discounted costs at 7-percent and 3-percent interest rates.

[[Page 28007]]

Table 19--Summary of the 10-Year Total Cost of Interim Rule, Undiscounted and Discounted at Interest Rates of 7
Percent and 3 Percent
----------------------------------------------------------------------------------------------------------------
Undiscounted Discounted
-------------------------------------------------------------------------------
Year Lost or
jettisoned CSM plans Total 7% 3%
cargo
----------------------------------------------------------------------------------------------------------------
1............................... $475 $847,054 $847,529 $792,083 $822,844
2............................... 499 108,917 109,416 95,568 103,135
3............................... 523 108,917 109,440 89,336 100,153
4............................... 547 108,917 109,464 83,510 97,257
5............................... 570 116,542 117,112 83,499 101,022
6............................... 594 116,542 117,136 78,053 98,100
7............................... 642 116,542 117,184 72,976 95,281
8............................... 665 116,542 117,207 68,216 92,524
9............................... 689 124,167 124,856 67,913 95,692
10.............................. 737 124,167 124,904 63,495 92,940
-------------------------------------------------------------------------------
Total....................... 5,941 1,888,307 1,894,248 1,494,649 1,698,948
-------------------------------------------------------------------------------
Annualized...................... .............. .............. .............. 212,804 199,169
----------------------------------------------------------------------------------------------------------------

Table 20 summarizes the undiscounted costs disaggregated by flag,
requirement, and sector.

Table 20--10-Year Undiscounted Costs by Flag, Requirement, and Sector
----------------------------------------------------------------------------------------------------------------
Federal
Flag Requirement Industry Government Total
----------------------------------------------------------------------------------------------------------------
United States......................... Lost Cargo.............. $387 $308 $695
CSM..................... 1,343,875 178,432 1,522,307
-----------------------------------------------
U.S. Total........... 1,344,262 178,740 1,523,002
* Foreign............................. Lost Cargo.............. 2,930 2,323 * 5,253
CSM..................... 366,000 0 366,000
-----------------------------------------------
Foreign Total........ 368,930 2,323 371,253
-----------------------------------------------
Total............................. ........................ 1,713,192 181,063 1,894,255
----------------------------------------------------------------------------------------------------------------
Note: Subtotals and Totals do not match with those in other tables due to independent rounding.

The primary benefit of this interim rule is that it places into the
CFR rules and procedures for the cargo securing plans, the approval and
oversight of organizations authorized to approve CSMs, and the
reporting of lost or jettisoned cargo. Additionally, the reporting
requirements for the lost or jettisoned cargo will provide the Coast
Guard with additional information to track and monitor the effects on
both navigation and the environment, and to take any appropriate
enforcement actions. Overall, the interim rule will support the Coast
Guard's missions of maritime safety and stewardship.
e. Preliminary analysis of expanding the affected population.
In Section V, Summary of the Rule, and Section VI, Discussion of
Comments on SNPRM and Changes, we requested comments on our proposal to
include self-propelled vessels less than 500 gross tons in the affected
population. We conducted a preliminary analysis of the economic impacts
of the proposal and summarize our findings below.
The proposal would add an additional 45 foreign-flagged vessels,
resulting in a new total of 6,398 foreign-flagged vessels. Combined
with the 83 U.S.-flagged vessels, the total affected population would
be 6,481 vessels.
The only requirement that would be affected is the one requiring a
subject vessel to have and follow an approved CSM. Of the 45 new
vessels, 42 currently hold SOLAS cargo safety certificates. For this
preliminary analysis we assumed that the three vessels without a cargo
safety certificate would need to obtain an approved CSM. This would add
an additional 26,250 (3 vessels x 8,750 per new CSM). A revised 10-year
cost estimate for this requirement based on these assumptions is
presented in Table 21.

Table 21--Cost of CSM Plans Under the Proposed Rule (Adding Vessels Under 500 GT to Interim Rule Estimates),
Undiscounted and Discounted at 7 Percent and 3 Percent
----------------------------------------------------------------------------------------------------------------
U.S.-flagged Foreign-
Year cost flagged Total cost 7% 3%
----------------------------------------------------------------------------------------------------------------
1............................... $816,554 $53,375 $869,929 $813,018 $844,591
2............................... 78,417 30,500 108,917 95,132 102,665

[[Page 28008]]

3............................... 78,417 30,500 108,917 88,909 99,674
4............................... 78,417 30,500 108,917 83,092 96,771
5............................... 78,417 38,125 116,542 83,093 100,530
6............................... 78,417 38,125 116,542 77,657 97,602
7............................... 78,417 38,125 116,542 72,577 94,759
8............................... 78,417 38,125 116,542 67,829 91,999
9............................... 78,417 45,750 124,167 67,539 95,164
10.............................. 78,417 45,750 124,167 63,120 92,392
-------------------------------------------------------------------------------
Total....................... 1,522,307 388,875 1,911,182 1,511,966 1,716,147
-------------------------------------------------------------------------------
Annualized...................... .............. .............. .............. 215,270 201,185
----------------------------------------------------------------------------------------------------------------

The 7-percent annualized cost for the proposed modification to the
CSM requirement is 215,270, compared to 212,226 for the interim rule,
as shown in Table 15. Table 22 presents a revised 10-year schedule. It
adds the 26,250 cost of new CSMs for the 3 vessels under 500 gross tons
to the other requirements for reporting lost or jettisoned cargo and
approval of classification societies.

Table 22--Summary of the 10-Year Total Cost of the Proposed Rule (Adding Vessels Under 500 GT to Interim Rule
Estimates) by Sector, Undiscounted and Discounted at 7 Percent and 3 Percent
----------------------------------------------------------------------------------------------------------------
Year Industry Government Total 7% 3%
----------------------------------------------------------------------------------------------------------------
1............................... $779,890 $90,514 $870,404 $813,462 $845,052
2............................... 99,403 10,013 109,416 95,568 103,135
3............................... 99,417 10,023 109,440 89,336 100,153
4............................... 99,430 10,034 109,464 83,510 97,257
5............................... 107,068 10,044 117,112 83,499 101,022
6............................... 107,081 10,055 117,136 78,053 98,100
7............................... 107,108 10,076 117,184 72,976 95,281
8............................... 107,121 10,086 117,207 68,216 92,524
9............................... 114,759 10,097 124,856 67,913 95,692
10.............................. 114,786 10,118 124,904 63,495 92,940
-------------------------------------------------------------------------------
Total....................... 1,736,063 181,060 1,917,123 1,516,028 1,721,156
-------------------------------------------------------------------------------
Annualized...................... .............. .............. .............. 215,848 201,772
----------------------------------------------------------------------------------------------------------------

With the addition of self-propelled vessels that are less than 500
gross tons, the annualized cost at a 7-percent discount rate increases
to 215,848, compared to 212,804 for the interim rule, as shown in Table
19.

B. Small Entities

1. Summary of Findings
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) (RFA)
and Executive Order (E.O.) 13272 require a review of proposed and final
rules to assess their impacts on small entities. An agency must prepare
an initial regulatory flexibility analysis (IRFA) unless it determines
and certifies that a rule, if promulgated, would not have a significant
impact on a substantial number of small entities. During the SNPRM
stage, we published an IRFA to aid the public in commenting on the
potential small business impacts of the proposals in the SNPRM. All
interested parties were invited to submit data and information
regarding the potential economic impact that would result from adoption
of the proposals in the SNPRM.
Under the RFA, we have considered whether this 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.
We determined that this interim rule affects a variety of large and
small businesses, not-for-profit organizations, and governments (see
the ``Description of the Potential Number of Small Entities'' section
below). Based on the information from this analysis, we found--
Using size standards from the Small Business
Administration (SBA), the 83 U.S-flagged vessels are controlled by 21
entities, none of which are small. The 6,353 foreign-flagged vessels
are controlled by 1,023 entities. A review of the entities that control
these vessels found that one foreign-flagged vessel is controlled by a
non-U.S. not-for-profit entity that is not considered to be small, 7
foreign-flagged vessels are controlled by government agencies, and the
remaining 6,345 foreign-flagged vessels are controlled by businesses.
An analysis of a sample of the businesses controlling these vessels
indicates that 48 percent are considered small.
Compliance actions will consist of upgrading deficient
CSMs and reporting lost or jettisoned cargo.
Of the small entities in our sample with revenue
information, 62 percent of them had an impact of less than 1 percent,
and 28 percent had an impact within the 1 percent to 3 percent range.
The Regulatory Flexibility Act also requires an agency to conduct a
final

[[Page 28009]]

regulatory flexibility analysis (FRFA) unless it determines and
certifies that a rule is not expected to have a significant impact on a
substantial number of small entities. We are not able to certify that
the interim rule will not have a significant economic impact on a
substantial number of small entities. Therefore, we have prepared the
following FRFA.
2. FRFA
The RFA establishes ``as a principle of regulatory issuance that
agencies shall endeavor, consistent with the objectives of the rule and
of applicable statutes, to fit regulatory and informational
requirements to the scale of the businesses, organizations, and
governmental jurisdictions subject to regulation. To achieve this
principle, agencies are required to solicit and consider flexible
regulatory proposals and to explain the rationale for their actions to
assure that such proposals are given serious consideration.''
This FRFA was developed in accordance with Section 604(a) of the
RFA. An FRFA must provide and/or address--
a. A statement of the need for, and objectives of, the rule;
b. A statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
statement of the assessment of the agency of such issues, and a
statement of any changes made in the rule as a result of such comments;
c. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the SBA in response to the rule, and a detailed
statement of any change made to the interim rule as a result of the
comments;
d. A description of and an estimate of the number of small entities
to which the rule will apply or an explanation of why no such estimate
is available;
e. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of the
classes of small entities that will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record;
f. A description of the steps the agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the interim rule and why each one of the other significant
alternatives to the rule considered by the agency which affect the
impact on small entities was rejected;
g. For a covered agency, as defined in section 609(d)(2), a
description of the steps the agency has taken to minimize any
additional cost of credit for small entities.
a. A statement of the need for, and objectives of, the rule. The
Coast Guard undertook this rulemaking to align U.S. regulations with
the CSM requirements of SOLAS. The provisions of this rule also
authorize recognized classification societies to review and approve
CSMs on behalf of the Coast Guard, prescribe how other organizations
can become CSM approval authorities, and prescribe when and how the
loss or jettisoning of cargo must be reported. Enforcing those
requirements should help prevent or mitigate the consequences of vessel
cargo loss, and promote the Coast Guard maritime safety and stewardship
missions.
Sections 2103 and 3306 of 46 U.S.C. provide the statutory basis for
this rule. Section 2103 gives the Secretary of the department in which
the Coast Guard is operating general regulatory authority to implement
Subtitle II (Chapters 21 through 147) of Title 46, which includes
statutory requirements in 46 U.S.C. Chapter 33 for inspecting the
vessels to which this rule applies. Section 3306 gives the Secretary
authority to regulate an inspected vessel's operation, fittings,
equipment, appliances, and other items in the interest of safety. The
Secretary's authority under both statutes has been delegated to the
Coast Guard in Department of Homeland Security Delegation No.
0170.1(92)(a) and (b). Additionally, the United States is a party to
SOLAS. Where SOLAS must be enforced through U.S. regulations, those
regulations are authorized by E.O. 12234.
b. A statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
statement of the assessment of the agency of such issues, and a
statement of any changes made in the proposed rule as a result of such
comments. We received no specific comments in response to the IRFA.
However, in response to one commenter's suggestion, when we finalize
this interim rule we intend to make 33 CFR part 97, subpart A,
applicable to all self-propelled vessels, regardless of tonnage, and
not just to vessels of 500 gross tons or more. Also in response to
comments, we have removed seagoing barges and other non-self-propelled
vessels from the applicability of subpart A; this subpart now is
applicable only to self-propelled vessels. In all other respects, the
interim rule is substantively unchanged from our SNPRM proposals.
c. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration (SBA) in
response to the proposed rule, and a detailed statement of any change
made to the interim rule as a result of the comments. We received no
comments from the Chief Counsel for Advocacy of the SBA after the
publication of the SNPRM.
d. A description of, and an estimate of, the number of small
entities to which the proposed rule will apply or an explanation of why
no such estimate is available. The applicable population consists of
self-propelled vessels that carry any cargo other than solid or liquid
bulk commodities and are--
U.S.-flagged vessels engaged in international trade; or
Foreign-flagged vessels that are in the U.S. trade.
Section VII.A.3, Affected Population, of this preamble presents an
estimate of 6,436 vessels that will be subject to the interim rule. As
described in Section VIII, Regulatory Analyses, of this preamble, we
found that 83 vessels in the affected population were U.S.-flagged. For
the cost analysis, we found that these vessels were currently in
compliance with the CSM requirements. Also for the cost analysis, we
assumed that compliance would continue throughout the 10-year forecast
period and we continue with that assumption in this FRFA. The focus of
this FRFA is on the 4,353 foreign-flagged vessels, which may be under
the control of U.S. entities or foreign entities. Table 23 displays a
break-out of this population by the type of entity that owns or
operates these vessels.

Table 23--Non-U.S. Vessels by Type of Entity
------------------------------------------------------------------------
Entity type Count Percent
------------------------------------------------------------------------
Business........................................ 6,345 99.87
Government...................................... 7 0.11
Not-for-Profit.................................. 1 0.02
-----------------------
Total......................................... 6,353 100.00
------------------------------------------------------------------------

All the government entities exceed the threshold for being
classified as a small entity, as they are either agencies of a foreign
government or exceed the 50,000 population threshold. We excluded these
government entities from the revenue impact analysis. The single not-
for-profit entity is also deemed not small, as it is part of an
international organization.
To analyze the potential impact on these businesses, we produced a

[[Page 28010]]

random sample with a 95-percent confidence level and a confidence
interval of 5 percent.\33\ The resulting sample consisted of 288
businesses. We researched public and proprietary databases and company
Web sites for the location of the company, entity type (subsidiary or
parent company), primary line of business, employee size, revenue, and
other information.\34\ During the initial research, we found 1 entity
that is now out of business and excluded it from the analysis. We found
that 142 of the companies in our sample are based in countries other
than the United States. There are another 78 entities for which we
could not locate address information. Since they operate foreign-
flagged vessels and we could not find location information in the Coast
Guard databases and other sources, we inferred that they are operated
by firms outside of the United States. Combining this information, we
identified a total of 221 non-U.S. companies and excluded them from
this revenue impact analysis. The population for the revenue impact
analysis consists of the remaining 67 businesses from the working
sample, and we found address information that locates all 67 of them in
the United States.
---------------------------------------------------------------------------

\33\ We selected a statistical sample so we would not need to
research and collect employee size and revenue information for the
entire affected operator population. We selected the operators in
the sample through a random number generator process available in
most statistical or spreadsheet software.
\34\ We used information and data from Cortera
(www.cortera.com), Manta (https://Manta.com), and ReferenceUSA
(https://www.referenceusa.com).
---------------------------------------------------------------------------

We researched and compiled the employee size and revenue data for
the 67 U.S. businesses and we compared this information to the SBA
``Table of Small Business Size Standards'' to determine if an entity is
small in its primary line of business as classified in the North
American Industry Classification System (NAICS).\35\ We determined that
35 businesses exceeded the SBA small business size standards, and 32
businesses, or 48 percent of the sample, are small by the SBA
standards. The information on location and size determination is
summarized in Table 24.
---------------------------------------------------------------------------

\35\ The SBA lists small business size standards for industries
described in the North American Industry Classification System. See
https://www.sba.gov/content/table-small-business-size-standards.

Table 24--U.S. Business by Size Determination
------------------------------------------------------------------------
Entity type Entities Percent
------------------------------------------------------------------------
Exceed the threshold............................... 35 52.2
Below the threshold................................ 32 47.8
--------------------
Total............................................ 67 100.0
------------------------------------------------------------------------

These 32 businesses that are below the SBA size thresholds are
distributed among 16 NAICS classified industries. Table 25 lists the
frequency, percentage, size standard, and size threshold of NAICS codes
for the 32 small businesses found in the sample.

Table 25--NAICS Codes of Identified Small Businesses
--------------------------------------------------------------------------------------------------------------------------------------------------------
NAICS code Industry Count Percent Size standard Size threshold
--------------------------------------------------------------------------------------------------------------------------------------------------------
483111.......................... Deep Sea Freight 12 37.5 Number of employees...................... 500
Transportation.
488510.......................... Freight Transportation 5 15.6 Revenue.................................. $14,000,000
Arrangement.
487210.......................... Scenic & Sightseeing 2 6.3 Revenue.................................. $7,000,000
Transportation, Water.
423310.......................... Lumber & Wood Merchant Whls 1 3.1 Number of employees...................... 100
423860.......................... Transportation Equipment 1 3.1 Number of employees...................... 100
and Supplies, Except Motor
Vehicles.
424420.......................... Packaged Frozen Food 1 3.1 Number of employees...................... 100
Merchant Wholesalers.
424910.......................... Farm Supplies Merchant Whls 1 3.1 Number of employees...................... 100
424990.......................... Other Miscellaneous 1 3.1 Number of employees...................... 100
Nondurable Goods Merchant
Wholesalers.
441222.......................... Boat Dealers............... 1 3.1 Revenue.................................. $25,500,000
483113.......................... Coastal and Great Lakes 1 3.1 Number of employees...................... 500
Freight Transportation.
484230.......................... Specialized Freight 1 3.1 Revenue.................................. $14,000,000
Tracking Long Distance.
488210.......................... Support Activities for Rail 1 3.1 Revenue.................................. 500
Transportation.
488320.......................... Marine Cargo Handling...... 1 3.1 Revenue.................................. $25,500,000
493130.......................... Farm Product Warehousing & 1 3.1 Revenue.................................. $14,000,000
Storage.
532411.......................... Commercial Air, Rail, and 1 3.1 Revenue.................................. $32,500,000
Water Transportation
Equipment Rental and
Leasing.
541618.......................... Other Management Consulting 1 3.1 Revenue.................................. $15,000,000
Services.
------------------------------------------------------------------------------------------
Total....................... ........................... 32 99.7 ......................................... ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

We selected the two industries that appeared most frequently in the
random sample of entities. Businesses from these two industries
accounted for 17 entities, or 53 percent of the entities in the random
sample. Therefore, we assume that approximately 53 percent of all
entities affected by this regulation will be in one of these
industries. A brief description of the two industries affected most by
this rule follows.
Deep Water Freight Transportation (483111): This industry
comprises establishments primarily engaged in providing deep sea
transportation of cargo to or from foreign ports.
Freight Transportation Arrangement (488510): This industry
comprises establishments primarily engaged in arranging transportation
of freight between shippers and carriers. These establishments are
usually known as freight forwarders, marine shipping agents, or customs
brokers, and offer a combination of services spanning transportation
modes.
e. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of the
classes of small entities that will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record. The compliance requirements of the rule consist of upgrading
deficient CSMs and reporting lost or jettisoned cargo. Therefore, this
rule calls for a collection of information under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3520). Details on the burden
estimate associated with this

[[Page 28011]]

collection are available in Section VIII.D of this preamble.
As discussed in Section VIII.A, Regulatory Planning and Review,
from 2011 through 2013, the Coast Guard conducted 14,358 vessel
inspections and found problems relating to CSMs in only 9 instances,
which amounts to approximately 0.1 percent of the foreign-flagged
vessels whose CSMs were deficient. We anticipate that the owners or
operators of these vessels will upgrade their CSMs to meet standards
and comply with this rule. We do not have detailed descriptions on each
of the deficiency cases. To estimate a cost for this compliance action,
we apply the estimate of $7,625 to remedy a CSM, as used in the
Regulatory Analysis.
For reporting lost or jettisoned cargo, we noted in Section VIII.A,
Cost Discussions, that when one of these incidents occurs, the vessel
staff already collects the needed information for company purposes.
Thus, the only additional cost to the vessel is to report this
information to the Coast Guard. We estimate the additional reporting
will take 0.25 hours for the vessel's Master or other senior officer to
compile and transmit the report to the Coast Guard. We estimate that
the loaded wage rate for the Master or senior officer is $53.00 per
hour. The cost of reporting is $13.25 (0.25 hours x $53 per hour).
As discussed in Section VIII.A, Regulatory Planning and Review, we
adjusted the affected population to account for anticipated growth in
container traffic. In our 10-year analysis, we estimate that the number
of vessels that will need to upgrade their CSMs will be 4 in Years 1
through 5, and will increase to 6 in Year 10. We also accounted for
this growth in container traffic in our estimate of lost or jettisoned
cargoes. In Section VIII.A, Cost Discussions, we estimate that in the
first year the rule becomes effective, 20 incidents of lost or
jettisoned cargo will occur. We estimate that the affected population
in that year consists of 6,436 U.S.- and foreign-flagged vessels,
yielding an incident rate of 0.3 percent (20 incidents/6,436 vessels).
To execute a revenue impact analysis, we posited that in any given
year, each business would have one vessel that will need to upgrade its
CSM and one vessel that will experienc an incident of lost or
jettisoned cargo. Given these assumptions, the total annual compliance
cost for any company is $7,638.25, as shown in Table 26.

Table 26--Annual Compliance Cost for Revenue Impact Analysis
----------------------------------------------------------------------------------------------------------------
Cost Loaded wage Hours Total cost
----------------------------------------------------------------------------------------------------------------
Upgrading 1 CSM................................................. N/A N/A $7,625
Reporting 1 hazardous condition................................. $53 0.25 13.25
-----------------------------------------------
Total....................................................... .............. .............. 7,638.25
----------------------------------------------------------------------------------------------------------------

For each business in our sample with revenue data, we calculated
the impact as the assumed cost of $7,638.25 as a percentage of that
business's annual revenue. This produced a range of potential revenue
impacts across the sample. Table 27 presents the impact data in ranges
of less than 1 percent, 1 to 3 percent, 3 to 5 percent, and greater
than 5 percent. As shown in this table, for approximately 62 percent of
the companies, the revenue impact is less than 1 percent of annual
revenue, and for approximately 28 percent of the companies, the revenue
impact is between 1 percent and 3 percent.

Table 27--Estimated Revenue Impact on Small Businesses
------------------------------------------------------------------------
Percentage
Revenue impact class Count of
companies
------------------------------------------------------------------------
Less than 1%.................................... 20 62.5
1% to 3%........................................ 9 28.1
3% to 5%........................................ 1 3.1
Less than 5%.................................... 2 6.3
-----------------------
Total......................................... 32 100.0
------------------------------------------------------------------------

As shown in Table 22, the highest cost to industry in any one year
on an undiscounted basis is $114,786, which occurs in Year 10.
The revenue impact analysis indicates that 62 percent of the
affected population will have an impact of less than 1 percent and the
other 28 percent will have an impact between 1 percent and 3 percent.
f. A description of the steps the agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the interim rule. Also, include a description explaining why
each one of the other significant alternatives to the rule considered
by the agency which affect the impact on small entities was rejected.
Our cost estimate for the reporting of the lost or jettisoned cargo was
based on information indicating that the vessel's crew already collects
the needed information for business reasons. The only additional step
required by this interim rule is to prepare the message to the Coast
Guard, and that message can be delivered by a variety of electronic
media. Thus, this interim rule minimizes the burden to a vessel's crew
in order to provide additional information to the Coast Guard to
enhance its execution of its maritime environmental protection mission.
For CSMs, this interim rule is based solely on current requirements
contained in SOLAS and current Coast Guard guidance. Our regulatory
analysis indicates that 99 percent of the subject vessels currently
comply with these requirements. This rule enhances the Coast Guard's
maritime safety mission without adding any new requirements to vessel
owners and operators.
Alternatives were considered in this interim rule and are discussed
in section VIII.A, Cost Discussions, of this preamble. Alternatives
include various ways to apply the requirements to prepare and implement
CSMs to U.S.-flagged vessels in coastwise trade. However, we concluded
that standards developed for international trade cannot be economically
justified for vessels operating only domestically at this time.
Therefore, the focus of this interim rule is exclusively on vessels in
international trade.
g. For a covered agency, as defined in section 609(d)(2), a
description of the steps the agency has taken to minimize any
additional cost of credit for small entities. The Coast Guard is not a
covered agency.

C. Assistance for Small Entities

Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104-121, we offered to assist small
entities in understanding this rule so that they could better evaluate
its effects on them and participate in the rulemaking. The

[[Page 28012]]

Coast Guard will not retaliate against small entities that question or
complain about this rule or any policy or action of the Coast Guard.
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).

D. Collection of Information

This rule calls for a new 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 collection, a
description of those who must collect the information, and an estimate
of the total annual burden follow. The estimate covers the time for
preparing and reporting for the development of a CSM, revising a CSM,
notification of other hazardous conditions, and notification of lost or
jettisoned cargo.
This collection of information applies to rulemaking procedures
regarding CSMs. Specific areas covered in this information collection
include 33 CFR part 97, ``Cargo Securing Manuals;'' 33 CFR part 160,
``Ports and Waterways Safety-General;'' and 46 CFR part 97,
``Operations.'' This rule will align the CFR with SOLAS.
TITLE: Cargo Securing Manuals.
OMB CONTROL NUMBER: 1625-0122.
SUMMARY OF COLLECTION OF INFORMATION: The rule will add a new part
97, ``Cargo Securing Manuals'' to chapter 33 of the CFR. The collection
of information burden for CSMs derives from one of these three events:
A SOLAS container vessel built after the rule becomes
effective will need to develop and implement a CSM. The new vessel will
need an approved CSM.
If a vessel changes its type, the CSM must be revised. An
example of a type change is when a general break-bulk carrier is
modified to become a containership.
If an existing vessel either changes 15 percent of its
cargo securing systems or more than 15 percent of its portable securing
devices, the CSM must be revised.
Additionally, this interim rule will impose burdens for the
notification of hazardous conditions. Currently, these notifications
are made via VHS radio, satellite radio, cell phones, and other forms
of electronic communication. The rule specifically allows for
electronic communications, and we anticipate this will continue to be
how the notifications are transmitted.
Need for Information: Vessel owners or operators need to develop
and implement CSMs to fulfill international safety standards
established by SOLAS. The Coast Guard needs timely information on
hazardous conditions to carry out its missions relating to protecting
vessels, their crews and passengers, and the environment.
Proposed use of Information: For new and modified CSMs, Coast
Guard-authorized third-party organizations will review these CSMs and,
if they are found to be acceptable, approve them. The Coast Guard will
use the information from the notification of hazardous conditions to
inform other vessel operators or waterway users of the situation and
initiate any needed measures to reduce or eliminate the hazard. These
actions will lead to a reduction of vessel casualties and pollution.
Description of Respondents: There are three groups of respondents
impacted by this interim rule:
Owners or operators of U.S.-flagged vessels that will need
to submit new or revised CSMs to the recognized classification
societies.
Recognized classification societies and other approved
third-party organizations that will review the CSMs on behalf of the
Coast Guard.
The operators of vessels that will be required to report
hazardous conditions.
Number of Respondents: We estimate that there will be 276
respondents affected annually by the CSM requirements. The total is
divided into these three classes: (1) 83 for new CSMs; (2) 9 for
revisions to existing CSMs; and (3) 184 notifications of hazardous
conditions, which include lost or jettisoned cargo and other incidents.
Table 28 describes the calculations for developing the estimates of
each requirement relating to the CSM plans.

Table 28--Estimates of Number of Respondents
----------------------------------------------------------------------------------------------------------------
Class Requirement Description Count Total
----------------------------------------------------------------------------------------------------------------
CSM............................... Develop CSM, new 83 in Year 1......... 83 ..............
vessel.
Revise CSM, change in MISLE data shows none 0 ..............
vessel type. of the affected
vessels have changed
vessel type from
2001-2012.
Revise CSM, replace Annual rate of 11.3% 9 ..............
CSM systems or from information
equipment. supplied by an
approved
organization.
Applied to U.S.
population (see
Table 3), (83 x
11.3%).
-------------------------------
CSM Total..................... ..................... ..................... .............. 92
Notifications..................... Notifications of From MISLE, average 180 ..............
hazardous condition. of 2009-2011
notifications.
Notifications of lost U.S. notifications, 4 ..............
or jettisoned cargo. Table 8, year 10.
-------------------------------
Notifications Total........... ..................... ..................... .............. 184
-------------------------------
Grand Total............... ..................... ..................... .............. 276
----------------------------------------------------------------------------------------------------------------

Frequency of Response: A CSM is valid indefinitely, provided it
does not meet any of the conditions for a revision. The reporting of
hazardous conditions occurs as needed. In the subsequent ``Number of
Respondents'' section, we present annual estimates of the reports.
Burden of Response: The burden hours per requirement is estimated
and shown below in Table 29.

[[Page 28013]]

Table 29--Annual Burden Hours per Request
------------------------------------------------------------------------
Requirement Hours Notes
------------------------------------------------------------------------
Develop new CSM................... 48 8 hours to survey
the vessel and 40
hours to draft the
CSM.
Revise CSM--change in vessel type. 48 8 hours to survey
the vessel and 40
hours to draft the
CSM.
Revise CSM--change in cargo 20 20 hours to revise
securing systems or equipment. the existing CSM.
Notification of hazardous 0.25 0.25 hours for
condition. vessel crew to
prepare and
transmit the
notice.
Notification of lost of jettisoned 0.25 0.25 hours for
cargo. vessel crew to
prepare and
transmit the
notice.
------------------------------------------------------------------------

Estimated Total Annual Burden: We estimate that the total annual
burden to industry will be 4,210 hours. Table 30 displays the total
burden hours for each request:

Table 30--Total Annual Burden Hours
------------------------------------------------------------------------
Requirement Hours
------------------------------------------------------------------------
Develop new CSM.............................................. 3,984
Revise CSM, change in vessel type............................ 0
Revise CSM, change in cargo securing systems or equipment.... 180
Notification of hazardous condition.......................... 45
Notification of lost or jettisoned cargo..................... 1
----------
Total...................................................... 4,210
------------------------------------------------------------------------
Note: Total does not exactly sum due to independent rounding.

Reason For Change: This interim rule will require collections of
information regarding these two activities: (1) Development or revision
of a CSM; and (2) notification of hazardous conditions, including lost
or jettisoned cargo.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that we consider the impact of paperwork and other information
collection burdens imposed on the public. According to the 1995
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi), an
agency may not collect or sponsor the collection of information, nor
may it impose an information collection requirement unless it displays
a currently valid OMB control number.
This interim rule will impose new information collection
requirements. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), we will submit these new information collection
requirements to OMB for its review. Notice of OMB information
collection will be published in a future Federal Register notice.

E. Federalism

A rule has implications for federalism under E.O. 13132,
Federalism, if it has substantial direct effects 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 have analyzed this rule under E.O. 13132 and have
determined that it does not have implications for federalism. Our
analysis follows.
It is well settled that States may not regulate in categories
reserved for regulation by the Coast Guard. It is also well settled,
now, that all of the categories covered in 46 U.S.C. 3306, 3703, 7101,
and 8101 (design, construction, alteration, repair, maintenance,
operation, equipping, personnel qualification, and manning of vessels),
as well as the reporting of casualties and any other category in which
Congress intended the Coast Guard to be the sole source of a vessel's
obligations, are within the field foreclosed from regulation by the
States. (See the decision of the Supreme Court in the consolidated
cases of United States v. Locke and Intertanko v. Locke.) \36\
---------------------------------------------------------------------------

\36\ 529 U.S. 89, 120 S.Ct. 1135 (March 6, 2000).
---------------------------------------------------------------------------

This rule on cargo securing falls into the category of vessel
operation. Because the States may not regulate within this category,
the rule is consistent with the principles of federalism and preemption
requirements in E.O. 13132.
Additionally, 33 CFR 160.215 is promulgated under the authority of
the Ports and Waterways Safety Act, Title I, and therefore, under the
principles of Locke, preempts any conflicting or similar State
regulations.\37\ The Locke court also held that Congress preempted the
field of marine casualty reporting. The Coast Guard does not believe
that this proposed amendment to an existing reporting requirement would
be preemptive of any existing State or local regulations or
requirements. However, any prospective State requirement for
information reporting that conflicts with or is similar to the one
proposed in this interim rule would be inconsistent with the federalism
principles enunciated in Locke and therefore would be preempted.
---------------------------------------------------------------------------

\37\ See our statement to this effect, 68 FR 9537 at 9543 (Feb.
28, 2003).
---------------------------------------------------------------------------

The Coast Guard recognizes the key role that State and local
governments may have in making regulatory determinations. Additionally,
for rules with federalism implications and preemptive effect, E.O.
13132 specifically directs agencies to consult with State and local
governments during the rulemaking process. If you believe this interim
rule has implications for federalism under E.O. 13132, please contact
the person listed in the FOR FURTHER INFORMATION CONTACT section of
this preamble.

F. Unfunded Mandates Reform Act

Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4, 2 U.S.C. 1531-1538) requires Federal agencies to assess the
effects of their discretionary regulatory actions. 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 (adjusted for inflation) or more in any one year.
Though this rule will not result in such an expenditure, we do discuss
the effects of this rule elsewhere in this preamble.

G. Taking of Private Property

This rule will not cause a taking of private property or otherwise
have taking implications under E.O. 12630, Governmental Actions and
Interference with Constitutionally Protected Property Rights.

H. Civil Justice Reform

This rule meets applicable standards in sections 3(a) and 3(b)(2)
of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate
ambiguity, and reduce burden.

I. Protection of Children

We have analyzed this rule under E.O. 13045, Protection of Children
from Environmental Health Risks and Safety Risks. This rule is not an
economically significant rule and will not create an environmental risk
to health or risk to safety that might disproportionately affect
children.

J. Indian Tribal Governments

This rule does not have tribal implications under E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, because
it

[[Page 28014]]

will not have a substantial direct effect on one or more Indian tribes,
on the relationship between the Federal Government and Indian tribes,
or on the distribution of power and responsibilities between the
Federal Government and Indian tribes.

K. Energy Effects

We have analyzed this rule under E.O. 13211, Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use. We have determined that it is not a ``significant energy action''
under that order because it is not a ``significant regulatory action''
under E.O. 12866 and is not likely to have a significant adverse effect
on the supply, distribution, or use of energy. The Administrator of the
Office of Information and Regulatory Affairs has not designated it as a
significant energy action. Therefore, it does not require a Statement
of Energy Effects under E.O. 13211.

L. Technical Standards

The National Technology Transfer and Advancement Act (15 U.S.C. 272
note) directs agencies to use voluntary consensus standards in their
regulatory activities unless the agency provides Congress, through the
OMB, with an explanation of why using these standards would be
inconsistent with applicable law or otherwise impractical. Voluntary
consensus standards are technical standards (e.g., specifications of
materials, performance, design, or operation; test methods; sampling
procedures; and related management systems practices) that are
developed or adopted by voluntary consensus standards bodies.
This rule uses technical standards other than voluntary consensus
standards. It incorporates two circulars and one resolution adopted by
arms of the International Maritime Organization, an international
organization under United Nations auspices, of which the United States
is a member state. The two circulars describe in detail how a vessel's
owner or operator may comply with CSM requirements contained in the
International Convention for the Safety of Life at Sea. The resolution
provides guidelines for third parties acting on behalf of a government
agency like the Coast Guard.
All three documents may be obtained from the IMO using the address
given in the regulatory text for new 33 CFR 97.110.

M. Environment

We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have concluded that this
action is one of a category of actions that do not individually or
cumulatively have a significant effect on the human environment. This
rule is categorically excluded under section 2.B.2, figure 2-1,
paragraph (34)(d) and under section 6(a) of the ``Appendix to National
Environmental Policy Act: Coast Guard Procedures for Categorical
Exclusions, Notice of Final Agency Policy'' (67 FR 48244, July 23,
2002). This rule involves regulations which concern documentation and
equipping of vessels, as well as regulations concerning vessel
operation safety standards. An environmental analysis checklist and a
categorical exclusion are available in the docket where indicated under
ADDRESSES.

List of Subjects

33 CFR Part 97

Cargo stowage and securing, Cargo vessels, Hazardous materials,
Incorporation by reference, Reporting and recordkeeping requirements.

33 CFR Part 160

Administrative practice and procedure, Harbors, Hazardous materials
transportation, Marine safety, Navigation (water), Personally
identifiable information, Reporting and recordkeeping requirements,
Seamen, Vessels, Waterways.

46 CFR Part 97

Cargo vessels, Marine safety, Navigation (water), Reporting and
recordkeeping requirements.

For the reasons discussed in the preamble, the Coast Guard amends
33 CFR chapter I and 46 CFR part 97 as follows:

Title 33--Navigation and Navigable Waters

0
1. Add part 97 to subchapter F to read as follows:

PART 97--RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND
SECURING OF CARGOES

Subpart A--Cargo Securing Manuals
Sec.
97.100 Applicability--Electronic documentation.
97.105 Definitions.
97.110 Incorporation by reference.
97.115 Reporting lost or jettisoned cargo.
97.120 Cargo securing manuals.
97.121-97.199 [Reserved]
97.200 Cargo securing manual (CSM) approval for U.S.-flagged vessels
on international voyages.
97.205 Requirements for amending an approved cargo securing manual
(CSM).
97.210 Appeals.
97.211-97.299 [Reserved]
97.300 Authorized cargo securing manual (CSM) approval authorities.
97.305 Requests for authorization to act as cargo securing manual
(CSM) approval authority.
97.310 Criteria for authorization.
97.315 Requirements for authorized approval organizations.
97.320 Revocation of authorization.
Subpart B--[Reserved]

Authority: 46 U.S.C. 2103, 3306; E.O. 12234; Department of
Homeland Security Delegation No. 0170.1(92)(a) and (b).

PART 97--RULES FOR THE SAFE OPERATION OF VESSELS, STOWAGE AND
SECURING OF CARGOES

Subpart A--Cargo Securing Manuals

Sec. 97.100 Applicability--Electronic documentation.

(a) This subpart applies to--
(1) A self-propelled cargo vessel of 500 gross tons or more, on an
international voyage, that must comply with Chapter VI/5.6 or Chapter
VII/5 of the International Convention for the Safety of Life at Sea,
1974 as amended (SOLAS), that does not solely carry liquid or solid
cargoes in bulk, and that is either a U.S.-flagged self-propelled cargo
vessel, or a foreign-flagged self-propelled cargo vessel that is
operating in waters subject to the jurisdiction of the United States;
(2) A U.S.-flagged self-propelled cargo vessel that chooses to have
this subpart applied to it by submitting a cargo securing manual for
approval in accordance with Sec. 97.200(a)(3);
(3) A foreign-flagged self-propelled cargo vessel of 500 gross tons
or more on an international voyage from a country that is not a
signatory to SOLAS, that would otherwise be required to comply with
Chapter VI/5.6 or Chapter VII/5 of SOLAS, that does not solely carry
liquid or solid cargoes in bulk, and that is operating in waters
subject to the jurisdiction of the United States; and
(4) Any organization applying to be selected as a cargo securing
manual approval authority.
(b) This subpart does not apply to a vessel owned by the Maritime
Administration that is part of the Ready Reserve Force or the title of
which is vested in the United States and which is used for public
purposes only.
(c) Any manual, letter, request, appeal, or ruling required by this

[[Page 28015]]

subpart may be provided or submitted in electronic form or in printed
form.

Sec. 97.105 Definitions.

As used in this subpart--
Approval authority means a CSM approval authority, as that term is
defined in this section.
Cargo means the goods or merchandise conveyed in a vessel, and
includes, but is not limited to, cargo that can be measured as a
``cargo unit'' as that term is used in the International Maritime
Organization's Code of Safe Practice for Cargo Stowage and Securing,
2003 edition: ``a vehicle, container, flat, pallet, portable tank,
packaged unit, or any other entity, etc., and loading equipment, or any
part thereof, which belongs to the ship but is not fixed to the ship .
. .''; but it does not include other vessel equipment or the incidental
personal possessions of persons on board the vessel.
Cargo safe access plan (CSAP) means a plan included in the cargo
securing manual that provides detailed information on safe access for
persons engaged in work connected with cargo stowage and securing on
ships that are specifically designed and fitted for the purpose of
carrying containers.
Cargo securing manual (CSM) means an electronic or printed manual
developed to meet the requirements of SOLAS and this subpart and that
is used by the master of a vessel to properly stow and secure cargoes
on the vessel for which it is developed.
Cargo securing manual approval authority or CSM approval authority
means an organization that meets the requirements of this subpart, and
that the Commandant has authorized to conduct certain actions and issue
electronic or printed approval letters on behalf of the United States.
Captain of the Port (COTP) means the U.S. Coast Guard officer as
described in 33 CFR 6.01-3.
Commandant, except as otherwise specified, means the Chief, Office
of Operating and Environmental Standards, whose address is Commandant
(CG-OES), 2703 Martin Luther King, Jr. Avenue SE., Stop 7509,
Washington, DC 20593-7509 and whose telephone number is 202-372-1404.
Container means an article of transport equipment described in 49
CFR 450.3.
Container vessel means a vessel specifically designed and fitted
for the purpose of carrying containers.
International voyage means a voyage between a port or place in one
country (or its possessions) and a port or place in another country.

Sec. 97.110 Incorporation by reference.

(a) Certain material is incorporated by reference into this subpart
with the approval of the Director of the Federal Register under 5
U.S.C. 552(a) and 1 CFR part 51. All approved material is available for
inspection by contacting Mr. Ken Smith of the Coast Guard's Vessel and
Facility Operating Standards Division, Commandant (CG-OES-2); telephone
202-372-1413, email Ken.A.Smith@uscg.mil, and is available from the
sources listed below. It is also available for inspection at the
National Archives and Records Administration (NARA). For information on
the availability of this material at NARA, call 202-741-6030 or go to
https://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
(b) International Maritime Organization (IMO), Publications
Section, 4 Albert Embankment, London, SE1 7SR, United Kingdom, +44(0)20
7735 7611, https://www.imo.org.
(1) MSC.1/Circ.1352, Amendments to the Code of Safe Practice for
Cargo Stowage and Securing (CSS Code), June 30, 2010 (Maritime Safety
Committee Circular), IBR approved for Sec. 97.120(b).
(2) MSC.1/Circ. 1353/Rev.1, Revised Guidelines for the Preparation
of the Cargo Securing Manual, December 15, 2014 (Maritime Safety
Committee Circular), IBR approved for Sec. 97.120(a).
(3) Resolution A.739(18) (Res.A.739(18)), Guidelines for the
Authorization of Organizations Acting on Behalf of the Administration,
November 22, 1993 (Assembly Resolution), IBR approved for Sec.
97.310(a).

Sec. 97.115 Reporting lost or jettisoned cargo.

(a) In the event a vessel loses or jettisons at sea any cargo
described in paragraph (b) of this section, it must comply with the
immediate notification requirements of 33 CFR 160.215, and if the cargo
contains hazardous material as defined in paragraph (c) of this
section, the vessel must also report it as soon as possible in
accordance with 49 CFR 176.48.
(b) The cargo to which this section applies includes any container
and any other cargo the loss or jettisoning of which could adversely
affect the safety of any vessel, bridge, structure, or shore area or
the environmental quality of any port, harbor, or navigable waterway of
the United States.
(c) As used in this section, ``hazardous material'' means a
substance or material designated by the Secretary of Transportation as
capable of posing an unreasonable risk to health, safety, and property
when transported in commerce. The term includes hazardous substances,
hazardous wastes, marine pollutants, and elevated temperature materials
as defined in 49 CFR 171.8, materials designated as hazardous under the
provisions of 49 CFR 172.101, and materials that meet the defining
criteria for hazard classes and divisions in 49 CFR part 173.

Sec. 97.120 Cargo securing manuals.

(a) Any vessel to which this subpart applies must have a cargo
securing manual (CSM) on board that has been approved by the government
of the country whose flag the vessel is entitled to fly; and a CSM
approved after June 30, 2010, must, at a minimum, meet the guidelines
in MSC.1/Circ. 1353/Rev.1, (incorporated by reference, see 33 CFR
97.110).
(b) A container vessel with a keel laid on or after January 1,
2015, must include a cargo safe access plan that, at a minimum, meets
the guidelines in MSC.1/Circ.1352, Annex 14, Guidance on Providing Safe
Working Conditions for Securing of Containers on Deck (incorporated by
reference, see 33 CFR 97.110).
(c) While operating in waters under the jurisdiction of the United
States, the Coast Guard may board any vessel to which this subpart
applies to determine that the vessel has the document(s) required by
paragraph (a) of this section on board. Any foreign-flagged vessel
found not to be in compliance with paragraph (a) of this section may be
detained by order of the Captain of the Port at the port or terminal
where the noncompliance is found until the COTP determines that the
vessel can go to sea without presenting an unreasonable threat of harm
to the port, the marine environment, the vessel, or its crew.

Sec. Sec. 97.121-97.199 [Reserved]

Sec. 97.200 Cargo securing manual (CSM) approval for U.S.-flagged
vessels on international voyages.

(a) Owners of U.S.-flagged vessels on international voyages must
have Cargo Securing Manuals (CSMs) approved in accordance with this
part.
(1) An applicant for CSM approval may be the owner or operator of
the vessel, or a person acting on the owner or operator's behalf.
(2) The Commandant is responsible for overseeing and managing the
review and approval of CSM approval authority applications and
providing an up-to-date list of organizations authorized to act under
this subpart, which is available at https://www.uscg.mil/hq/cg5/cg522/cg5222, or by requesting it in writing from the Commandant and

[[Page 28016]]

enclosing a self-addressed, stamped envelope.
(3) The applicant must submit two dated copies of a CSM that meets
the requirements of this subpart to a CSM approval authority for review
and approval. If any amendments are submitted, they must be dated. The
CSM must include a ``change page'' document to ensure continuous
documentation of amendments made and the dates they were completed.
(4) The approval authority will retain one copy of the CSM for its
records.
(b) If the approval authority completes the review process and
approves the CSM, the approval authority will provide a CSM approval
letter on its letterhead, containing--
(1) Date of CSM approval;
(2) A subject line reading: ``APPROVAL OF CARGO SECURING MANUAL
(AMENDMENT--if applicable) FOR THE M/V ____, OFFICIAL NUMBER ____'';
(3) The following statement: ``This is to certify that the Cargo
Securing Manual (Amendment--if applicable) dated ____ for the M/V ____,
Official Number ____, has been approved on behalf of the United States.
The Cargo Securing Manual (Amendment--if applicable) was reviewed for
compliance with Maritime Safety Committee Circular 1353 (MSC.1/Circ.
1353/Rev.1) for content, and correctness of the calculations on which
the approval is based. This approval letter is to be kept with the
Cargo Securing Manual, as proof of compliance with regulations VI/5.6
and VII5 of the 2004 amendments to the International Convention for the
Safety of Life at Sea (SOLAS) 1974.'';
(4) Signature of the approval authority official responsible for
review and approval of the CSM; and
(5) The approval authority's seal or stamp.
(c) If the approval authority completes the review process and
disapproves the CSM, the approval authority will provide a letter on
its letterhead, containing--
(1) Date of CSM disapproval; and
(2) Explanation of why the CSM was disapproved and what the
submitter must do to correct deficiencies.
(d) The submitter of a disapproved CSM may resubmit the CSM with
amendments for further review, either to correct deficiencies noted by
the approval authority or to expand the CSM to fully meet the
requirements of this part.
(e) The original copy of the CSM approval letter must be kept with
the approved CSM and its amendments, together with supporting documents
and calculations used in granting the approval, on board the vessel for
review by Coast Guard personnel upon request.

Sec. 97.205 Requirements for amending an approved cargo securing
manual (CSM).

Resubmission and re-approval by a CSM approval authority are
required after any of the following events occurs:
(a) Reconfiguration of a vessel from one type of cargo carriage to
another (e.g., a general break-bulk cargo vessel reconfigured to a
container or a roll-on/roll-off vessel).
(b) Reconfiguration or replacement of 15 percent or more of the
vessel's fixed cargo securing or tie-down systems with different types
of devices or systems.
(c) Replacement of 15 percent or more of the vessel's portable
cargo securing devices, with different types of devices for securing
the cargo not already used aboard the vessel (e.g., wire lashings
replaced with turnbuckles or chains).

Sec. 97.210 Appeals.

(a) A vessel owner or operator, or person acting on their behalf,
who disagrees with a decision of a CSM approval authority may submit a
written appeal to the approval authority requesting reconsideration of
information in dispute. Within 30 days of receiving the appeal, the
approval authority must provide the submitter with a final written
ruling on the request, with a copy to the Commandant.
(b) A submitter who is dissatisfied with the approval authority's
final written ruling may appeal directly to the Commandant. The appeal
must be made in writing and include the documentation and supporting
evidence the submitter wants to be considered, and may ask the
Commandant to stay the effect of the appealed decision while it is
under review by the Commandant.
(c) The Commandant will make a decision on the appeal and send a
formal response to the submitter and a copy to the approval authority.
The Commandant's decision will constitute final agency action on the
appeal request.

Sec. Sec. 97.211-97.299 [Reserved]

Sec. 97.300 Authorized cargo securing manual (CSM) approval
authorities.

The following organizations are authorized to act on behalf of the
United States for the review and approval of CSMs:
(a) Any recognized classification society to which the Coast Guard
has delegated issuance of a Cargo Ship Safety Equipment Certificate in
accordance with 46 CFR 8.320(b)(4). A list of these organizations can
be found at www.uscg.mil/hq/cg5/cg522/cg5222 in the ``Summary of
Authorizations'' link.
(b) The National Cargo Bureau, Inc., 17 Battery Place, Suite 1232,
New York, NY 10004-1110, 212-785-8300, https://www.natcargo.org.

Sec. 97.305 Requests for authorization to act as cargo securing
manual (CSM) approval authority.

An organization seeking authorization as a CSM approval authority
must make a request to the Commandant for authorization. The request
must include, in writing, the items listed in this section or as
otherwise specified by the Commandant.
(a) A certified copy of the organization's certificate of
incorporation or partnership on file with a U.S. State, including the
name and address of the organization, with written statements or
documents which show that--
(1) The organization's owners, managers, and employees are free
from influence or control by vessel shipbuilders, owners, operators,
lessors, or other related commercial interests as evidenced by past and
present business practices;
(2) The organization has demonstrated, through other related work,
the capability to competently evaluate CSMs for completeness and
sufficiency according to the requirements of SOLAS and this part;
(3) The organization has an acceptable degree of financial
security, based on recent audits by certified public accountants over
the last 5 years; and
(4) The organization maintains a corporate office in the United
States that has adequate resources and staff to support all aspects of
CSM review, approval, and recordkeeping.
(b) A listing of the names of the organization's principal
executives, with titles, telephone, and telefax numbers.
(c) A written general description of the organization, covering the
ownership, managerial structure, and organization components, including
any directly affiliated organizations, and their functions utilized for
supporting technical services.
(d) A written list of technical services the organization offers.
(e) A written general description of the geographical area the
organization serves.
(f) A written general description of the clients the organization
is serving, or intends to serve.
(g) A written general description of similar work performed by the
organization in the past, noting the

[[Page 28017]]

amount and extent of such work performed within the previous 3 years.
(h) A written listing of the names of full-time professional staff
employed by the organization and available for technical review and
approval of CSMs including--
(1) Naval architects and naval engineers, with copies of their
professional credentials, college degrees, and specialized training
certificates;
(2) Merchant mariners with Coast Guard-issued credentials, with a
summary of their working experience on board cargo vessels (including
vessel tonnage and types of cargo); and
(3) Written proof of staff competence to perform CSM review and
approval, evidenced by detailed summaries of each individual's
experience (measured in months) during the past 5 years of evaluating
maritime cargo securing systems. Experience summaries must be
documented on company letterhead and endorsed by a company executive
who has had direct observation of the individual and quality of his or
her work product.
(j) A complete description of the organization's internal quality
control processes, including written standards used by the organization
to ensure consistency in CSM review and approval procedures by
qualified professionals.
(k) A description of the organization's training program for
assuring continued competency of professional employees performing CSM
review and approval who are identified in the application.
(l) Evidence of financial stability over the past 5-year period,
such as financial reports completed independently by certified public
accountants.
(m) A list of five or more business references, including names,
addresses, and telephone numbers of principal executives, who can
attest to the organization's competence within the past 2 years.
(n) A statement to the Coast Guard that gives its officials
permission to inspect the organization's facilities and records of CSM
review and approval on behalf of the United States at any time with
reasonable advance notice.
(o) Any additional information the organization deems to be
pertinent.

Sec. 97.310 Criteria for authorization.

(a) The Commandant will evaluate the organization's request for
authorization and supporting written materials, looking for evidence
of--
(1) The organization's clear assignment of management duties;
(2) Ethical standards for managers and cargo securing manual (CSM)
reviewers;
(3) Procedures for personnel training, qualification,
certification, and re-qualification that are consistent with recognized
industry standards;
(4) Acceptable standards available for the organization's internal
auditing and management review;
(5) Recordkeeping standards for CSM review and approval;
(6) Methods used to review and certify CSMs;
(7) Experience and knowledge demonstrating competency to evaluate
CSMs for completeness and sufficiency according to the requirements of
SOLAS;
(8) Methods for handling appeals; and
(9) Overall procedures consistent with Res.A.739(18), (incorporated
by reference, see Sec. 97.110).
(b) After a favorable evaluation of the organization's request, the
Commandant may arrange to visit the organization's corporate and port
offices for an on-site evaluation of operations.
(c) When a request is approved, the organization and the Coast
Guard will enter into the written agreement provided for by 33 CFR
97.315. If the request is not approved, the Commandant will give the
organization a written explanation, and the organization may resubmit
its request if it corrects any noted deficiencies.

Sec. 97.315 Requirements for authorized approval organizations.

Approved organizations will enter into a written agreement with the
Coast Guard that specifies--
(a) The period the authorization is valid;
(b) Which duties and responsibilities the organization may perform
and what approval letters it may issue on behalf of the U.S.;
(c) Reports and information the organization must send to the
Commandant;
(d) Actions the organization must take to renew the agreement when
it expires; and
(e) Actions the organization must take if the Commandant revokes
authorization pursuant to 33 CFR 97.320.

Sec. 97.320 Revocation of authorization.

The Commandant may revoke a cargo securing manual (CSM) approval
authority's authorization and remove it from the list of CSM approval
authorities if it fails to maintain acceptable standards. For the
purposes of 46 CFR subpart 1.03, such a revocation would be treated as
involving the recognition of a classification society and could be
appealed pursuant to 46 CFR 1.03-15(h)(4). Upon revocation, the former
approval authority must send written notice to each vessel owner whose
CSM it approved. The notice must include the current list of CSM
approval authorities and state--
(a) That its authorization as a CSM approval authority has been
revoked;
(b) The Coast Guard's explanation for the revocation; and
(c) That the vessel's CSM remains valid as long as amendments have
not been completed which require it to be re-approved pursuant to 33
CFR 97.200 or 97.205.

Subpart B--[Reserved]

PART 160--PORTS AND WATERWAYS SAFETY--GENERAL

0
2. The authority citation for part 160 continues to read as follows:

Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. Chapter 701;
Department of Homeland Security Delegation No. 0170.1. Subpart C is
also issued under the authority of 33 U.S.C. 1225 and 46 U.S.C.
3715.

0
3. Revise Sec. 160.215 to read as follows:

Sec. 160.215 Notice of hazardous conditions.

(a) Whenever there is a hazardous condition either on board a
vessel or caused by a vessel or its operation, the owner, agent,
master, operator, or person in charge must immediately notify the
nearest Coast Guard Sector Office or Group Office, and in addition
submit any report required by 46 CFR 4.05-10.
(b) When the hazardous condition involves cargo loss or jettisoning
as described in 33 CFR 97.115, the notification required by paragraph
(a) of this section must include--
(1) What was lost, including a description of cargo, substances
involved, and types of packages;
(2) How many were lost, including the number of packages and
quantity of substances they represent;
(3) When the incident occurred, including the time of the incident
or period of time over which the incident occurred;
(4) Where the incident occurred, including the exact or estimated
location of the incident, the route the ship was taking, and the
weather (wind and sea) conditions at the time or approximate time of
the incident; and
(5) How the incident occurred, including the circumstances of the
incident, the type of securing equipment that was used, and any other
material failures that may have contributed to the incident.

[[Page 28018]]

Title 46--Shipping

PART 97--OPERATIONS

0
3. The authority citation for part 97 continues to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3306, 6101; 49
U.S.C. 5103, 5106; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p.
277; E.O. 12777, 56 FR 54757; 3 CFR, 1991 Comp., p. 351; Department
of Homeland Security Delegation No. 0170.1.

0
4. Add Sec. 97.12-10 to read as follows:

Sec. 97.12-10 Cargo securing manuals.

Each U.S.-flagged vessel that must comply with Chapter VI/5.6 or
Chapter VII/5 of the International Convention for the Safety of Life at
Sea, 1974 as amended must have on board a cargo securing manual that
meets the requirements of 33 CFR part 97.

Dated: April 28, 2016.
J.G. Lantz,
Director of Commercial Regulations and Standards, U.S. Coast Guard.
[FR Doc. 2016-10725 Filed 5-6-16; 8:45 am]
BILLING CODE 9110-04-P

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