[Federal Register Volume 87, Number 7 (Tuesday, January 11, 2022)]
[Proposed Rules]
[Pages 1378-1390]
[FR Doc No: 2022-00200]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 2

[Docket No. USCG-2018-0538]
RIN 1625-AC55

User Fees for Inspected Towing Vessels

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard is proposing to update its user fees for
seagoing towing vessels that are 300 gross tons or more and to revise
user fees for other inspected towing vessels. The Coast Guard is
proposing these updates because we are required to establish and
maintain a fair fee for our vessel inspection services and to separate
the fees for inspection options that involve third-party auditors and
surveyors from inspection options that do not involve third parties.
Under this proposed rule, vessels using the Alternate Compliance
Program, Streamlined Inspection Program, or the Towing Safety
Management System options would pay a lower fee than vessels that use
the traditional Coast Guard inspection option.

DATES: Comments and related material must be received by the Coast
Guard on or before April 11, 2022.

ADDRESSES: You may submit comments identified by docket number USCG-
2018-0538 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. Scott Kuhaneck, Coast Guard; telephone<PHONE_NUMBER>,
email [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Public Participation and Request for Comments
II. Abbreviations
III. Basis and Purpose
    A. The Problem We Seek To Address
    B. Legal Authority To Address This Problem
    C. Recent Legislation
IV. Background
    A. Origins of Annual Vessel Inspection Fees
    B. Current Fees for Subchapter I and Subchapter M Towing Vessels

V. Discussion of Proposed Rule
    A. Categories of Annual Fees
    B. Amending Annual Inspection Fees for Seagoing Towing Vessels
Subject to Subchapter I
    C. Establishing Specific Annual Inspection Fees for Towing
Vessels Subject to Subchapter M
    D. Methodology for Calculating Fees
VI. 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 Request for Comments

    The Coast Guard views 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 you cannot submit your
material by using https://www.regulations.gov, contact the person in
the FOR FURTHER INFORMATION CONTACT section of this proposed rule for
alternate instructions. Documents mentioned in this proposed rule as
being in the docket, and all public comments, will be available in our
online docket at https://www.regulations.gov, and can be viewed by
following that website's instructions. Additionally, if you visit the
online docket and sign up for email alerts, you will be notified when
comments are posted or if 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
submissions to the docket in response to this document, see DHS's
eRulemaking System of Records notice (85 FR 14226, March 11, 2020).
    We do not plan to hold a public meeting but we will consider doing
so if public comments indicate that a meeting would be helpful and we
determine that a meeting would aid this rulemaking. We would issue a
separate Federal Register notice to announce the date, time, and
location of such a meeting.

II. Abbreviations

ACP Alternate Compliance Program
CGAA Frank LoBiondo Coast Guard Authorization Act of 2018
COI Certificate of Inspection
DHS Department of Homeland Security
FR Federal Register
FTE Full-Time Equivalent
IRFA Initial Regulatory Flexibility Analysis
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
NPRM Notice of proposed rulemaking
OBRA Omnibus Budget Reconciliation Act of 1990
OMB Office of Management and Budget
RFA Regulatory Flexibility Act
SBA Small Business Administration
Sec.  Section
SIP Streamlined Inspection Program
SSM Sector Staffing Model
TSMS Towing Safety Management System
U.S.C. United States Code

III. Basis and Purpose

    In this section, the Coast Guard identifies the problem we intend
to address, the well-established statutory authority that enables us to
issue this proposed rule, and the recent legislation that provides
additional authority for this proposed rulemaking.

A. The Problem We Seek To Address

    The Coast Guard and Maritime Transportation Act of 2004 \1\ added
towing vessels to the list of vessels subject to inspection in 46
U.S.C. 3301. As directed by 46 U.S.C. 3307, each vessel subject to
inspection under part A of Subtitle II must undergo an initial
inspection for certification, and after receiving a Certificate of
Inspection (COI) the vessel must undergo periodic inspections.
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    \1\ Public Law 108-293, 118 Stat. 1028 (August 9, 2004), with
relevant chapters codified in 46 U.S.C. 3301.
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    On June 20, 2016, we published an Inspection of Towing Vessels
final rule that established safety regulations governing the
inspection, standards, and safety management systems for towing
vessels.\2\ We estimated that the rule would apply to more than 5,500
towing vessels that had previously been uninspected vessels. That rule
established the 46 CFR subchapter M--Towing Vessels (parts 136 through
144), which requires vessels subject to subchapter M to obtain a COI.
The phase-in period for obtaining these COIs under subchapter M runs
from July 20, 2018 to July 19, 2022.\3\
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    \2\ 81 FR 40004.
    \3\ See 46 CFR 136.202, which calls for 25 percent of the
vessels of each owner or managing operator of more than one existing
towing vessel to have COIs by July 22, 2019. It calls for an
additional 25 percent to obtain COIs for each of the remaining 3
years of the phase-in period. The final rule was effective July 20,
2016, but it delayed the implementation of most of its part 140
Operations, part 141 Lifesaving, part 142 Fire Protection, part 143
Machinery and Electrical Systems and Equipment, and part 144
Construction and Arrangement requirements until July 20, 2018. See
Sec. Sec.  140.105, 141.105, 142.105, 143.200, and 144.105.
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    In the Inspection of Towing Vessels final rule, we stated our plan
to begin a separate rulemaking for annual inspection fees for towing
vessels that would reflect the specific program costs associated with
the two options for documenting compliance to obtain a COI,\4\ the
Coast Guard option and the Towing Safety Management System (TSMS)
option.\5\ We also stated that until then we will use the existing fee
of $1,030 in 46 CFR 2.10-101 that applies to any inspected vessel not
listed in Table 2.10-101 as the annual inspection fee for towing
vessels subject to subchapter M.\6\
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    \4\ See 46 CFR 136.130--Options for documenting compliance to
obtain a Certificate of Inspection.
    \5\ TSMS is a voluntary inspection option that permits qualified
third-party organizations to conduct certain vessel examinations in
place of Coast Guard inspections. See 46 CFR 138--Towing Safety
Management System (TSMS).
    \6\ See 81 FR at 40005.
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    In addition to towing vessels subject to subchapter M that are
required to obtain COIs, there are towing vessels that qualify as
seagoing motor vessels (300 gross tons or more) that are subject to 46
CFR chapter I, subchapter I regulations for cargo and miscellaneous
vessels.\7\ These vessels are currently required to have COIs. The
annual inspection fee for these subchapter I towing vessels was
established in 1995 at $2,915, and has never been updated.\8\
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    \7\ See 46 CFR 2.01-7 and 90.05-1. Under 46 U.S.C. 3301,
seagoing motor vessels are subject to inspection. Towing vessels are
motor vessels, (vessels propelled by machinery other than steam) and
they fall within the definition of ``seagoing motor vessel'' if they
are at least 300 gross tons and make voyages beyond the Boundary
Line. See definitions in 46 U.S.C. 2101.
    \8\ See Direct User Fees for Inspection or Examination of U.S.
and Foreign Commercial Vessels (60 FR 13550 (March 13, 1995); 46 CFR
2.10-101.
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    The law requires that we establish a fee for our inspection
services that is fair and based on costs to the Government, value to
the recipient, and public interest. It further requires that we review
the costs to the Government of such inspections for towing vessel using
the Coast Guard option and those using an option involving a third
party, revise such fees if there is a difference,

and comply with the same requirements for establishing fees when doing
so.

B. Legal Authority To Address This Problem

    The Coast Guard is issuing this proposed rule based on authority in
section 2110 of Title 46 of the United States Code (46 U.S.C. 2110),
which has been delegated to the Commandant under DHS Delegation No.
0170.1(II)(92). Section 2110 of Title 46 directs the Secretary of the
Department in which the Coast Guard is operating to establish a fee or
charge for a service or thing of value provided by the Secretary under
Subtitle II of Title 46. Inspections and related services described in
Subtitle II of Title 46 are considered a service or thing of value
provided by the Secretary.\9\
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    \9\ 46 U.S.C. 2110(a)(1).
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    Section 2110 also directs that the fee or charge be established in
accordance with 31 U.S.C. 9701, which specifies that each charge be
fair and based on the costs to the Government, the value of the service
or thing to the recipient, public policy or interest served, and other
relevant facts. Consistent with these objectives, once a fee or charge
is established, section 2110 allows it to be adjusted to accommodate
changes in the cost of providing a specific service or thing of value.

C. Recent Legislation

    On December 4, 2018, the Frank LoBiondo Coast Guard Authorization
Act of 2018 (CGAA) was enacted.\10\ Section 815 of CGAA directs the
Coast Guard to review and revise the fee for inspections. First, the
Coast Guard must compare the costs to the Government of towing vessel
inspections performed by the Coast Guard and towing vessel inspections
performed by a third party, to determine if they are different. The
Coast Guard interprets ``costs to the Government'' in section 815(a) to
mean the cost to the Coast Guard of providing inspection and related
services to determine whether a vessel meets requirements necessary for
it to maintain its COI. We have conducted that comparison and
determined that there is a difference in costs to the Government
between the inspection options for towing vessels that involve a third
party and those that do not.
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    \10\ Public Law 115-282, 132 Stat. 4192.
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    If there is a difference in costs, section 815 of CGAA directs us
to revise the fee we assess for such inspections to conform to 31
U.S.C. 9701, and to base the fee on the cost to the Government. This is
the intent of this notice of proposed rulemaking (NPRM).

IV. Background

A. Origins of Annual Vessel Inspection Fees

    The Omnibus Budget Reconciliation Act of 1990 (OBRA) amended 46
U.S.C. 2110 and removed long-standing prohibitions against imposing
certain user fees.\11\ As amended by the OBRA, 46 U.S.C. 2110 requires
the establishment and collection of user fees for Coast Guard services
provided under Subtitle II of Title 46, United States Code. On March
13, 1995, the Coast Guard published the final rule on Direct User Fees
for Inspection or Examination of U.S. and Foreign Commercial
Vessels.\12\ The fees were intended to recover the costs associated
with providing Coast Guard vessel inspection services directly or
through an alternative reinspection program, although alternative
reinspection program only applied to certain offshore supply vessels.
The final rule established user fees for services related to commercial
vessel inspection including annual fees for seagoing towing vessels.
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    \11\ Public Law 101-508, 104 Stat. 1388 with relevant chapters
codified in 46 U.S.C. 2110.
    \12\ 60 FR 13550.
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    On June 20, 2016, the Coast Guard published the final rule on the
Inspection of Towing Vessels. The vessels subject to this 2016 rule
were not considered when the original vessel inspection fees were
established in 1995, except to the extent that the table of fees
included a default fee for any inspected vessel not listed. We
indicated in the 2016 rule that we would establish specific fees, in a
subsequent rulemaking, that would reflect program costs associated with
the TSMS and Coast Guard inspection options for obtaining COIs. We
stated that until those specific fees were established, the annual
inspection fee for towing vessels subject to subchapter M would be the
existing fee of $1,030 in 46 CFR 2.10-101 for any inspected vessel not
listed in Table 2.10-101.\13\
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    \13\ See 81 FR at 40005.
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B. Current Fees for Subchapter I and Subchapter M Towing Vessels

    The Coast Guard currently charges an annual vessel inspection fee
for U.S. and foreign vessels requiring a COI, following the fee
schedule set in Sec.  2.10-101.\14\ The current fee for seagoing towing
vessels inspected under subchapter I is $2,915 for all inspection
options--the Coast Guard, the Alternate Compliance Program (ACP), and
the Streamlined Inspection Program (SIP). The current fee for towing
vessels inspected under subchapter M (all inspection options) is
$1,030, which is the fee for ``[a]ny vessel not listed in this table.''
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    \14\ Under 46 CFR 2.01-6(b), foreign vessels from countries
which are non-signatory to the International Convention for the
Safety of Life at Sea, 1974, are issued a COI, if the inspector
approves the vessel and its equipment as described in Sec.  2.01-5.
We have records of COIs issued to foreign vessels in our Marine
Information for Safety and Law Enforcement (MISLE) database, but no
records of a COI issued to a foreign towing vessel.
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V. Discussion of Proposed Rule

    This proposed rule would update existing annual inspection fees for
both seagoing towing vessels (300 gross tons or more) and vessels
subject to the relatively new towing-vessel regulations in 46 CFR
subchapter M.
    The annual inspection fees are located in 46 CFR part 2--Vessel
Inspections. In addition to fees in Sec.  2.10-101, this part contains
definitions in Sec.  2.10-25. We propose to add the following new
defined terms to Sec.  2.10-25--
     Annual vessel inspection fee;
     Alternate Compliance Program option;
     Coast Guard option;
     Streamlined Inspection Program option;
     Towing Safety Management System option; and
     Towing vessel.
    To reflect the involvement of third parties in inspection options,
such as the ACP and TSMS, we propose to define ``annual vessel
inspection fee'' as the fee charged by the Coast Guard for providing
inspection and related services to determine whether a vessel meets the
requirements to maintain its COI. The fee charged by the Coast Guard
reflects the cost to the Coast Guard. There are several existing
options for inspection, which we propose to define in revised Sec.
2.10-25 by reference to the regulations that establish each option. For
both seagoing and subchapter M towing vessels, there is a Coast Guard
option in which the Coast Guard performs all of the relevant inspection
activity. For both types of vessels there is also a third-party option,
already established in regulation, in which a third party performs some
of the relevant activity, but the Coast Guard still inspects the vessel
and examines evidence of compliance provided by third parties.
    For seagoing towing vessels there is an additional option, the SIP.
The SIP option does not involve a third party. Under the SIP option, a
vessel is inspected in accordance with an approved Vessel Action Plan
that the company's SIP agent develops with

guidance from the Coast Guard. In our definition of SIP, we point to
subpart E of 46 CFR part 8, which spells out SIP program requirements.
    We propose to define ``towing vessel'' as a commercial vessel
engaged in or intending to engage in the service of pulling, pushing,
or hauling alongside, or any combination of pulling, pushing, or
hauling alongside. This definition matches the definition of towing
vessel in 46 U.S.C. 2101.
    We are also proposing to modify the definition of an existing term
in Sec.  2.10-25, Sea-going towing vessel. We would remove the modifier
``seagoing'' used within the definition itself, and insert a
description of what seagoing means. The proposed insertion is ``and
that makes voyages beyond the Boundary Line as defined by 46 U.S.C.
103.'' \15\ We would further specify that the vessel must be 300 gross
tons or more, to distinguish seagoing towing vessels from towing
vessels subject to subchapter M that travel beyond the Boundary Line.
We would also remove the hyphen from seagoing.
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    \15\ Under 46 U.S.C. 103 and 33 U.S.C. 151(b), boundary lines
are used for dividing inland waters of the United States from the
high seas to delineate the application of certain U.S. statutes. For
a list of boundary lines and the statutes those lines are used to
delineate, see 46 CFR part 7, which lists boundary lines for the
Atlantic Coast, Gulf Coast, Pacific Coast, and the states of Alaska
and Hawaii.
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A. Categories of Annual Fees

    For towing vessels subject to subchapter M, we propose two fee
categories; the Coast Guard option and the TSMS option. For seagoing
towing vessels subject to subchapter I, we propose three fee
categories; the Coast Guard option, the ACP option and the SIP option.
This would allow the Coast Guard to provide reduced fees for subchapter
M vessel owners who choose the TSMS option described in 46 CFR part
138, and for subchapter I vessel owners who choose the ACP or SIP
option described in 46 CFR part 8. We anticipate this fee structure
will help to ensure the Coast Guard's ability to recover full costs to
the Government, and to separate annual inspection fees for options
involving third-party surveys and audits of towing vessels using safety
management systems. Several inspection options have lower user fees
than the Coast Guard option. These inspection alternatives either
require fewer Coast Guard inspection activities or the Coast Guard
inspection activities take less time and thus have a lower cost.

B. Amending Annual Inspection Fees for Seagoing Towing Vessels Subject
to Subchapter I

    We are proposing to charge one of three annual fees for seagoing
towing vessels that are inspected under subchapter I:
     $2,747 for those using the Coast Guard option;
     $1,850 for those using the ACP option; and
     $2,260 for those using the SIP option.
    The current annual fee for seagoing towing vessels that are
inspected under subchapter I is $2,915.
    For a detailed discussion of how these fees were derived, see
Methodology for Calculating Fees in section V.D.

C. Establishing Specific Annual Inspection Fees for Towing Vessels
Subject to Subchapter M

    We are also proposing to charge one of two fees for towing vessels
inspected under subchapter M:
     $2,184 for those using the Coast Guard option, and
     $973 for those using the TSMS option.
    The current annual fee applied to subchapter M towing vessels is
$1,030.
    For a more detailed discussion of how these fees were derived, see
Methodology for Calculating Fees in section V.D.

D. Methodology for Calculating Fees

    This section summarizes the methodology for calculating fees. For
more details, see the Cost Study for Determining User Fees for
Inspected Towing Vessels in the docket where indicated under the
section I of this preamble.
    To derive the costs of the various inspection types, we used an
activity-based costing \16\ approach in conjunction with the Sector
Staffing Model (SSM). The SSM is an activity-based model designed to
establish human capital requirements and quantify resources at Shore
Forces units.\17\ The SSM measures specific activity and frequency to
determine the Full-Time Equivalent (FTE) workforce needed to meet a
particular workload. Data in the model is derived from Coast Guard
enterprise databases and surveys conducted at the Coast Guard field
unit level. The model also incorporates unit specific travel times for
conducting missions, collateral duty workload, and mission required
training. In the spring of 2012, the SSM was accredited in accordance
with official Coast Guard policy and currently serves as the primary
decision tool for managing sector enterprise staffing. Table 1 shows
the cost of activities for providing COI services to each type of
inspection. These costs are derived using SSM FTE calculations; see the
Cost Study in the docket for the full derivation of figures.
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    \16\ Activity-based costing is a method for determining the cost
of a service based on the cost of each individual element of that
service.
    \17\ Shore Forces units are Coast Guard sector commands and
their sub-units or field units. See the USCG Strategic Cost Manual,
M7000.4 (February 2005).

              Table 1--Per Vessel Cost of Activities for Providing COI Services by User Fee Segment
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                                   Subchapter M:   Subchapter M:   Subchapter I:   Subchapter I:   Subchapter I:
                                    Coast Guard        TSMS         Coast Guard         ACP             SIP
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Inspection Activity Costs.......          $1,183            $408          $1,618            $874          $1,213
Travel Costs....................             317              40             356             356             356
Supervision and Administration               243              84             332             179             249
 Costs..........................
Indirect Costs..................             442             442             442             442             442
                                 -------------------------------------------------------------------------------
    Total Annual Costs..........           2,184             973           2,747           1,850           2,260
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    The Coast Guard intends to collect one of five different user fees
from the approximately 5,385 towing vessels that require COIs under
subchapters I and M.\18\ Table 2 shows the current fee, the proposed
fee, the incremental fee adjustment and the percent change to the user
fee. The annual costs of services for each vessel class is the proposed
user fee for that vessel class.
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    \18\ Vessel population data came from MISLE as of June 2021. See
the Affected Population section for more details.

             Table 2--Current Subchapter M and I User Fees and Proposed User Fee Adjustment Amounts
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                                                                                Incremental
             Fee type/user fee class                Current fee    Proposed fee   fee adjustment  Percent change
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Subchapter M: Coast Guard option................          $1,030          $2,184          $1,154             112
Subchapter M: TSMS..............................           1,030             973             -57              -6
Subchapter I: Coast Guard option................           2,915           2,747            -168              -6
Subchapter I: Alternative Compliance Program               2,915           1,850          -1,065             -37
 option.........................................
Subchapter I: Streamlined Inspection Program               2,915           2,260            -655             -22
 option.........................................
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VI. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and Executive orders related to rulemaking. Our analyses based on these
statutes or Executive orders follows.

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 costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
    This proposed rule is a significant regulatory action under section
3(f) of Executive Order 12866. Accordingly, the rule has been reviewed
by the Office of Management and Budget (OMB). Section 6(a)(3) of
Executive Order 12866 requires an assessment of potential costs and
benefits. The analysis follows.
    Currently, towing vessels are inspected under subchapter I or
subchapter M, dependent on their size and area of operation. All
inspected towing vessels are required to pay a user fee. Subchapter I
towing vessels pay a user fee of $2,915 annually. Subchapter M towing
vessels pay a user fee of $1,030 annually. The subchapter M user fee is
not specific to towing vessels, rather it is for all inspected vessels
that do not have a specific user fee on Table 2.10-101.
    We calculate that in total 42 towing vessels inspected under
subchapter I are paying $122,430 annually and that in total 5,343
towing vessels inspected under subchapter M are paying $5,503,290
annually for inspection services. Towing vessels choose between several
vessel inspection alternatives. Once selected, the inspection option is
unlikely to change due to a change in user fees, since there are
private business costs associated with changing inspection options.
Coast Guard COI service costs are fully funded through annual
appropriations.\19\
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    \19\ The user fees collected for these services are offsetting
receipts and are deposited to the Department of Treasury and
credited to DHS appropriation as proprietary receipts. See 46 U.S.C.
2110(h).
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    This proposed rulemaking would establish a user fee specific to
subchapter M towing vessels, revise the user fee specific to subchapter
I towing vessels, and establish user fees for vessel inspection
alternatives that require fewer Coast Guard inspection activities or
the Coast Guard inspection activities take less time and thus have a
lower cost to Coast Guard. We anticipate this proposed fee structure
will help to ensure the Coast Guard's ability to offset costs to the
government, and to separate annual inspection fees for options
involving third-party surveys and audits of towing vessels using safety
management systems. This proposed rule would result in estimated
transfers from towing vessel operators for the COI services of $1.5
million to $1.6 million per year to the Federal Government. The 10-year
transfers, undiscounted, total $15,719,319. The discounted annualized
figure, at 7 percent, is $1,577,491.
    The Coast Guard proposes to do the following through this
rulemaking:
    (1) Modify the definition in Sec.  2.10-25 of Sea-going towing
vessel. We would remove the modifier ``seagoing'' used within the
definition, and replace it with a description of what ``seagoing''
means. The proposed insertion is ``and that makes voyages beyond the
Boundary Line as defined by 46 U.S.C. 103.'' Also, we would specify
that the vessel must be 300 gross tons or more to distinguish seagoing
towing vessels from towing vessels that travel beyond the Boundary
Line, which may be subject to subchapter M. This is an administrative
change and it would have no economic impact.
    (2) Amend the user fees for 46 CFR subchapter I towing vessels. The
current fee for the 42 seagoing towing vessels inspected under
subchapter I is $2,915 for all inspection options (Coast Guard, ACP,
and SIP). This proposed rule would make the fees specific to each
inspection as shown below in table 3. Vessels have already chosen their
inspection option and are unlikely to change away from their current
option. This is because there are costs associated with switching
inspection options and there are private industry transactions and
business specific costs beyond the inspection cost that make the user
fee a small portion of the overall cost of inspections.

   Table 3--Current and Proposed Subchapter I Towing Vessel User Fees
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             Inspection type                Current fee    Proposed fee
------------------------------------------------------------------------
Coast Guard option......................          $2,915          $2,747
Alternate Compliance Program option                                1,850
 (ACP)..................................
Streamlined Inspection Program option                              2,260
 (SIP)..................................
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    (3) Create a specific user fee category for the 5,343 towing
vessels under 46 CFR subchapter M towing vessels in the table of fees
in Sec.  2.10-101 and update the current user fees for annual
inspection fees for towing vessels to reflect the specific program
costs associated with the two subchapter M options: The TSMS option and
the Coast Guard inspection option. The current fee is $1,030 for the
annual inspection fee for towing vessels subject to

subchapter M. This proposed rule would make the fees specific to each
inspection type as shown below in table 4. Similar to subchapter I
vessels, subchapter M vessels have already chosen their inspection
option and are unlikely to change for the same reasons.

   Table 4--Current and Proposed Subchapter M Towing Vessel User Fees
------------------------------------------------------------------------
             Inspection type                Current fee    Proposed fee
------------------------------------------------------------------------
Coast Guard option......................          $1,030          $2,184
TSMS option.............................  ..............             973
------------------------------------------------------------------------

    (4) Define the following new terms that will be added to the table
of fees in Sec.  2.10-101: Annual vessel inspection fee, Alternative
Compliance Program option, Coast Guard option, Streamlined Inspection
Program option, Towing Safety Management System option, and Towing
Vessel. This is an administrative change and has no economic impact.
All of these points are described in greater detail in the Cost Study.
    To obtain the affected population for this proposed rule, we used
the MISLE (Marine Information for Safety and Law Enforcement) database.
MISLE is the Coast Guard's vessel and marine activity database which
contains the best and most readily available vessel population data.
According to MISLE data as of June 2021, the total affected population
of this rule is 5,385 inspected towing vessels. There are approximately
5,343 towing vessels that will require inspection under 46 CFR
subchapter M and 42 towing vessels that are inspected under 46 CFR
subchapter I. Though the subchapter M population is decreasing by an
average of 33 vessels per year since 2016, the subchapter I population
is expected to remain stable, because it historically has done so.
    Rather than a single fee category for all towing vessels covered by
a subchapter, the Coast Guard is proposing two categories for
subchapter M and three categories for subchapter I vessels. For
subchapter M, the inspection types are the Coast Guard option and the
TSMS option. For subchapter I, the inspection types are the Coast Guard
option, the ACP option, and the SIP option. Table 5 presents the total
population of inspected towing vessels that would be impacted by this
proposed rule. These are the current rates of inspection for the
subchapters, though not all vessels are currently inspected. Table 6
presents the projected subchapter M population and their projected
counts of inspection type. We assume that the subchapter M towing
vessel population will maintain a 70-percent-TSMS option and 30-
percent-Coast-Guard option split over the duration of the analysis.

                         Table 5--Total Affected Population for Inspected Towing Vessels
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                     User fee categories                                              Population
----------------------------------------------------------------------------------------------------------------
Subchapter M                                Coast Guard                                                    Total
                                                 option                  TSMS
----------------------------------------------------------------------------------------------------------------
Population..........................              1,603                  3,740                             5,343
% of Population.....................                 30                   70                                 100
----------------------------------------------------------------------------------------------------------------
Subchapter I                                Coast Guard                                                    Total
                                                 option      Vessel Inspection Alternative
----------------------------------------------------------------------------------------------------------------
                                                                 Alternate        Streamlined
                                                                Compliance         Inspection
                                                                   Program            Program
                                                                     (ACP)              (SIP)
----------------------------------------------------------------------------------------------------------------
Population..........................                 28                 13                  1                 42
% of Population.....................                 67                 31                  2                100
----------------------------------------------------------------------------------------------------------------
    Total Population................  .................  .................  .................              5,385
----------------------------------------------------------------------------------------------------------------

     Table 6--Projected Subchapter M Population by Inspection Option
------------------------------------------------------------------------
       Estimated annual subchapter M population by inspection type
-------------------------------------------------------------------------
                  Year                       CG option      TSMS option
------------------------------------------------------------------------
Year 1..................................           1,603           3,740
Year 2..................................           1,592           3,718
Year 3..................................           1,583           3,694
Year 4..................................           1,574           3,670
Year 5..................................           1,563           3,648
Year 6..................................           1,554           3,624
Year 7..................................           1,543           3,602
Year 8..................................           1,534           3,578
Year 9..................................           1,524           3,555
Year 10.................................           1,514           3,532
------------------------------------------------------------------------

Costs and Benefits
    This proposed rule would not impose any new societal costs as all
of the inspection activities are currently being done by the regulated
entities and Coast Guard. Rather the impacts of this rule would be in
the form of transfer payments, which are monetary payments from one
group to another that do not affect total resources available to
society.
    This rule would not provide any quantitative benefits. However, it
would have a qualitative benefit. This rule would revise user fees to
more closely reflect the actual cost to the Coast Guard of providing
inspection services. The result would be a more fair distribution of
costs to inspected towing vessels by inspection type. Title 46 U.S.C.
2110 directs that the fee or charge be established in accordance with
31 U.S.C. 9701, which specifies that each charge be fair and based on:
The costs to the Government; the value of the service or thing to the
recipient, public policy, or interest served; and other relevant facts.
Consistent with these objectives, once a fee or charge is established,
section 2110 allows it to be adjusted to accommodate changes in the
cost of providing a specific service or thing of value. This rulemaking
aids the Coast Guard in compliance with those statutory requirements.
Transfer Payments
    The Coast Guard proposes to adjust the user fees collected from the
current entities so that there are now five different fees based on the
towing vessel subchapter and program utilized for vessel certification.
The Coast Guard estimates this total is approximately 5,385 towing
vessels. Table 7 shows the current fee, the proposed fee, the change
and the percent change to the user fee. The annual costs of services
for each vessel class is the proposed user fee for that vessel class.

             Table 7--Current Subchapter M and I User Fees and Proposed User Fee Adjustment Amounts
----------------------------------------------------------------------------------------------------------------
                                                                                Incremental
            Fee type/ user fee class                Current fee    Proposed fee   fee adjustment  Percent change
----------------------------------------------------------------------------------------------------------------
Subchapter M: Coast Guard option................          $1,030          $2,184          $1,154             112
Subchapter M: TSMS..............................           1,030             973             -57              -6
Subchapter I: Coast Guard option................           2,915           2,747            -168              -6
Subchapter I: Alternative Compliance Program               2,915           1,850          -1,065             -37
 option.........................................
Subchapter I: Streamlined Inspection Program               2,915           2,260            -655             -22
 option.........................................
----------------------------------------------------------------------------------------------------------------
Note: Since there are no distinct categories for TSMS, SIP, or ACP in the current user fee table, all of
  subchapter M vessels pay one fee and all of subchapter I vessels pay one fee. Totals may not sum due to
  rounding.

    In table 8, we show the total annual transfer payments from each
vessel class to the Government and the total for all vessels. For
example, Subchapter M vessels that choose the Coast Guard option would
pay $1,154 additional dollars per vessel in user fees to the Coast
Guard for their inspection services. Negative numbers represent a
decrease in user fees. Transfer payments are monetary payments from one
group to another that do not affect total resources. For this proposed
rulemaking, a user fee is a transfer payment from the vessel owner or
operator to the Government to offset the costs to the Coast Guard for
providing COI services. This is found by multiplying the vessel
population by the incremental fee change. Because the subchapter M
vessel population is projected to decrease, table 9 shows annual
transfer payments for this subchapter, totals are found by multiplying
the populations in table 6 by the appropriate fees.

                                Table 8--Annual Incremental Fee Amounts--FY 2021
----------------------------------------------------------------------------------------------------------------
                                                                                First year fee
                    Fee type/ user fee class                         Estimated      Incremental      transfer
                                                                    population      fee change       payments
----------------------------------------------------------------------------------------------------------------
Subchapter M: Coast Guard option................................           1,603          $1,154      $1,849,862
Subchapter M: TSMS option.......................................           3,740             -57        -213,180
                                                                 -----------------------------------------------
    Subtotal....................................................           5,343  ..............       1,636,682
Subchapter I: Coast Guard option................................              28            -168          -4,704
Subchapter I: ACP option........................................              13          -1,065         -13,845
Subchapter I: SIP option........................................               1            -655            -655
                                                                 -----------------------------------------------
    Subtotal....................................................              42  ..............         -19,204
                                                                 -----------------------------------------------
        Annual Total............................................  ..............  ..............       1,617,478
----------------------------------------------------------------------------------------------------------------

                                 Table 9--Subchapter M Annual Transfer Payments
----------------------------------------------------------------------------------------------------------------
                                                                                Subchapter M
                              Year                                   CG option      TSMS option        total
----------------------------------------------------------------------------------------------------------------
Year 1..........................................................      $1,849,862      ($213,180)      $1,636,682
Year 2..........................................................       1,837,168       (211,926)       1,625,242
Year 3..........................................................       1,826,782       (210,558)       1,616,224
Year 4..........................................................       1,816,396       (209,190)       1,607,206
Year 5..........................................................       1,803,702       (207,936)       1,595,766
Year 6..........................................................       1,793,316       (206,568)       1,586,748

Year 7..........................................................       1,780,622       (205,314)       1,575,308
Year 8..........................................................       1,770,236       (203,946)       1,566,290
Year 9..........................................................       1,758,696       (202,635)       1,556,061
Year 10.........................................................       1,747,156       (201,324)       1,545,832
----------------------------------------------------------------------------------------------------------------

    With the reduction in fees to vessels under the subchapter I and
subchapter M TSMS options, the first year transfers from the government
to the towing vessel industry is $232,384. The Coast Guard expects to
have transfers from towing vessel operators for the COI services of
$1,636,682 in the first year to the Government. The sum of these
transfers is $1,617,478 in the first year. The 10-year transfers,
undiscounted, total $15,719,319. The discounted annualized figure, at 7
percent, is $1,577,491. Table 10 summarizes the total 10-year transfer
payments from the towing vessel industry to the Government.

             Table 10--Discounted Transfer Payments From Towing Vessel Operators to the Government *
----------------------------------------------------------------------------------------------------------------
                                                                                Discounted
                              Year                                 Undiscounted  -------------------------------
                                                                                7%              3%
----------------------------------------------------------------------------------------------------------------
1...............................................................      $1,617,478      $1,511,662      $1,570,367
2...............................................................       1,606,038       1,402,776       1,513,845
3...............................................................       1,597,020       1,303,644       1,461,500
4...............................................................       1,588,002       1,211,479       1,410,919
5...............................................................       1,576,562       1,124,067       1,359,956
6...............................................................       1,567,544       1,044,521       1,312,793
7...............................................................       1,556,104         969,063       1,265,255
8...............................................................       1,547,086         900,418       1,221,284
9...............................................................       1,536,857         835,948       1,177,873
10..............................................................       1,526,628         776,060       1,135,955
                                                                 -----------------------------------------------
    Total.......................................................      15,719,319      11,079,638      13,429,747
                                                                 -----------------------------------------------
Annualized......................................................  ..............       1,577,491       1,574,376
----------------------------------------------------------------------------------------------------------------
* Note: Totals may not sum due to rounding.

Regulatory Alternatives
    A discussion of regulatory alternatives is available in the section
VI.B(6) of this preamble.

B. Small Entities

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.) (RFA), the Coast Guard prepared this Initial Regulatory
Flexibility Analysis (IRFA) that examines the impacts of the proposed
rule on small entities. Due to the anticipated impacts on small
businesses, the Coast Guard is including an analysis of the NPRM
requirements for informational purposes.
    A small entity may be a small independent business, defined as
independently owned and operated, that is organized for profit and is
not dominant in its field per the Small Business Act (5 U.S.C. 632). A
small entity can also be a small not-for-profit organization (any not-
for-profit enterprise that is independently owned and operated and is
not dominant in its field) or a small governmental jurisdiction (a
locality with fewer than 50,000 people) per the RFA. An IRFA addresses
the following:
    (1) A description of the reasons why action by the agency is being
considered;
    (2) A succinct statement of the objectives of, and legal basis for,
the rule;
    (3) A description of and, where feasible, an estimate of the number
of small entities to which the rule will apply;
    (4) 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;
    (5) An identification, to the extent practicable, of all relevant
Federal rules that may duplicate, overlap or conflict with the rule;
and
    (6) A description of any significant alternatives to the rule that
accomplish the stated objectives of applicable statutes and that
minimize any significant economic impact of the rule on small
entities.\20\
---------------------------------------------------------------------------

    \20\ 5 U.S.C. 603.
---------------------------------------------------------------------------

    Below is a discussion of the IRFA analysis for each of these six
elements.
    1. A description of the reasons why action by the agency is being
considered.
    The Coast Guard is considering updating the user fees for inspected
towing vessels because after reviewing the costs to the Government of
inspections under the Coast Guard option or options using a third
party, the Coast Guard has determined that updates are necessary to
ensure that fees for all options are fair and based on costs to the
Government. User fees for subchapter I inspected towing vessels have
not been updated since 1995. The proposed changes are also consistent
with the Coast Guard's statement in the 2016 final rule, Inspection of
Towing Vessels, that we planned to promulgate a separate rulemaking for
annual inspection fees for towing vessels that would reflect the
specific program costs associated with the two subchapter M options--
the TSMS option and the Coast Guard inspection option.
    The purpose of this proposed rule is to redistribute the burden of
inspection

activities from the Coast Guard to the towing vessel industry.
    2. A succinct statement of the objective of, and legal basis for,
the rule.
    This proposed regulatory action is necessary to adjust the user fee
schedule to better reflect the cost of COI services to the government,
for subchapters I and M towing vessels. The Coast Guard is issuing this
proposed rule based on authority in 46 U.S.C. 2110, which has been
delegated to the Commandant under DHS Delegation No. 0170.1(II)(92).
Title 46 U.S.C. 2110 directs the Coast Guard to establish a fee, or
charge, for a service or thing of value it provides in accordance with
31 U.S.C. 9701. Inspections and related services described in Subtitle
II of Title 46 United States Code are considered a service of value
provided by the Coast Guard. Section 31 U.S.C. 9701 specifies that each
fee or charge be fair and based on the costs to the government, the
value of the service to the recipient, public policy or interest
served, and other relevant facts. Once a fee or charge is established,
46 U.S.C. 2110 allows it to be adjusted to accommodate changes in the
cost of providing a specific service or thing of value.
    In addition, section 815 of CGAA directs the Coast Guard to review
and revise the fee for inspections if necessary to comply with 31
U.S.C. 9701. The Coast Guard interprets ``costs to the Government'' in
section 815(a) to mean the cost to the Coast Guard of providing
inspection and related services to determine whether a vessel meets
requirements necessary for it to maintain its COI.
    3. A description of and, where feasible, an estimate of the number
of small entities to which the rule will apply.
    The proposed rule would affect the owners and operators of certain
towing vessels under subchapters I and M. We constructed this towing
vessel population from the Coast Guard's MISLE system. From this
database, we identified 5,385 vessels affected by this proposed rule--
5,343 subchapter M towing vessels and 42 subchapter I towing vessels.
There are 1,236 unique companies that own or operate these vessels.
Five companies own vessels under both subchapters I and M.
    We used available operator name and address information to research
public and proprietary databases for entity type (subsidiary or parent
company), primary line of business, employee size, revenue, and other
information.\21\ We found vessels owned by 21 government entities and 4
non-profit entities. The remaining 1,211 are business entities. For
governmental jurisdictions, we determined whether the jurisdiction had
populations of less than 50,000 as per the criteria in the RFA. For
nonprofits, we evaluated whether the nonprofit was independently owned
and operated and was not dominant in its field.\22\ For the business
entities, we matched their information with the latest Small Business
Administration (SBA) Table of Small Business Size Standards to
determine if a business entity is small in its primary line of business
as classified in the North American Industry Classification System
(NAICS).\23\
---------------------------------------------------------------------------

    \21\ https://www.cortera.com/ and https://www.manta.com/.
    \22\ https://www.guidestar.org.
    \23\ https://www.sba.gov/document/support--table-size-standards.
---------------------------------------------------------------------------

    We broke the population down into subchapters I and M. For
subchapter M, we randomly selected a sample size from the 1,222 unique
towing vessel companies to reach the 95 percent confidence level. Using
Cochran's Formula, Coast Guard chose a statistically valid random
sample of 385 businesses that own and operate towing vessels.\24\
---------------------------------------------------------------------------

    \24\ A statistically valid random sample size of 292 businesses
would be required to achieve a 95-percent confidence level out of
the 1,222 unique towing vessel companies. In this analysis, Coast
Guard oversampled to analyze 385 businesses to ensure enough data
and information was available on the businesses to meet the sampling
requirements.
---------------------------------------------------------------------------

    There are a total of 97 NAICS-coded industries in this proposed
rule's sample affected population. Table 11 displays the 10 industries
that appear most frequently in the affected population of owners or
operators of towing vessels in subchapters I and M.

                                        Table 11--Most Common NAICS Codes
----------------------------------------------------------------------------------------------------------------
                                                                                Count of
                                                                                towing vessel    Percent of
       NAICS code               Description           Small entity definition        owners or        total *
                                                                                operators
----------------------------------------------------------------------------------------------------------------
488330.................  Navigational Services to  <$41,500,000.................              40              10
                          Shipping.
713930.................  Marinas.................  <$8,000,000..................              34               9
237990.................  Other Heavy and Civil     <$39,500,000.................              31               8
                          Engineering
                          Construction.
238910.................  Site Preparation          <$16,500,000.................              31               8
                          Contractors.
441222.................  Boat Dealers............  <$35,000,000.................              28               7
483211.................  Inland Water Freight      <750 Employees...............              23               6
                          Transportation.
488320.................  Marine Cargo Handling...  <$41,500,000.................              12               3
336611.................  Ship Building and         <1,250 Employees.............              10               3
                          Repairing.
488210.................  Support Activities for    <$16,500,000.................               5               1
                          Rail Transportation.
483212.................  Inland Water Passenger    <500 Employees...............               5               1
                          Transportation.
----------------------------------------------------------------------------------------------------------------
* Note: Total does not sum to 100 percent, since these percentages reflect only the top 10 most common NAICS
  codes of the sample. The remaining 44 percent of NAICS codes were not within the 10 most commonly occurring.

    Coast Guard chose a subchapter M sample of 385 businesses that own
and operate the towing vessels. Of the 385 businesses, 37 exceeded the
SBA small business size standards, 265 companies were considered to be
small businesses by the SBA size standards, and 83 companies had no
information available. Consistent with DHS practice, entities with no
information available will be considered as small entities. Thus, there
are 348 businesses in our sample that we consider to be small entities.
Based on our random sample, 90.4 percent of subchapter M entities are
considered small and therefore when applied to the population of unique
towing vessel companies, 1,105 subchapter M entities would be
considered small.
    For subchapter I, we searched all 14 unique towing vessel companies
in the available databases. Of the 14 unique towing vessel companies in
the

subchapter I population, 13 had available revenue and employee data. Of
these 13 unique towing vessel companies, 6 exceeded the SBA small
business size standards and 7 were considered small businesses by the
SBA size standards. Consistent with DHS practice, we consider entities
for which information was not available to be small. Thus, there are
eight businesses in our population that we consider to be small
entities.
    For this analysis, we considered the annual weighted average
transfer from industry to the Coast Guard by subchapter. For subchapter
M vessels, we found the average fleet size for small entities is two
vessels and multiplied it by the weighted average of incremental
changes in user fees. According to our analysis of small subchapter M
vessels, 97 percent of them choose the Coast Guard option for their
inspection option and 3 percent choose the TSMS option. Thus, we
multiplied the rates for vessels choosing their inspection option by
the incremental change in user fees and the average fleet size for
small subchapter M entities, which yielded an average impact of $1,117
per subchapter M vessel and $2,234 per small subchapter M entity. We
repeated this process for subchapter I entities. We found the average
fleet size for small entities, which is 1, and multiplied it by the
weighted average of incremental changes in user fees. According to our
analysis of small subchapter I vessels, 50 percent of them choose the
ACP option for their inspection option, 37.5 percent choose the Coast
Guard option, and the remaining 12.5 percent choose the SIP option.
This proposed rule would save subchapter I entities an average of $799.
Tables 12 and 13 show the impact on small company revenue for each
subchapter that we had revenue data for.

         Table 12--Subchapter M Estimated Annual Revenue Impact
------------------------------------------------------------------------
                                             Number of      Percent of
          Revenue impact range               entities        entities
------------------------------------------------------------------------
0% <= 1%................................             233            87.9
1% <= 3%................................              27            10.2
3% <= 5%................................               3             1.1
Above 5%................................               2             0.8
                                         -------------------------------
    Total...............................             265             100
------------------------------------------------------------------------

         Table 13--Subchapter I Estimated Annual Revenue Impact
------------------------------------------------------------------------
                                             Number of      Percent of
          Revenue impact range               entities        entities
------------------------------------------------------------------------
0% <= 1%................................               7             100
1% <= 3%................................               0               0
3% <= 5%................................               0               0
5% <= 10%...............................               0               0
Above 10%...............................               0               0
                                         -------------------------------
    Total...............................               7             100
------------------------------------------------------------------------

    According to our analysis, 87.9 percent of subchapter M entities
will have an annual impact to revenue of 1 percent or less.
Approximately, 10.2 percent will have an annual impact to revenue
between 1 and 3 percent. The remaining 1.9 percent will have an annual
impact to revenue greater than 3 percent. For subchapter I entities,
our analysis shows a less than 1 percent impact to annual revenue for
all small entities.
    4. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of the
classes of small entities which will be subject to the requirements and
the type of professional skills necessary for preparation of the report
or record.
    This proposed rule calls for no new reporting, recordkeeping or
other compliance requirements.
    5. An identification, to the extent practicable, of all relevant
Federal rules which may duplicate, overlap or conflict with the rule.
    There are no relevant Federal rules that may duplicate, overlap, or
conflict with this proposed rule.
    6. A description of any significant alternatives to the rule which
accomplish the stated objectives of applicable statutes and which
minimize any significant economic impact of the rule on small entities.
    Alternatives considered include adjusting our current user fees for
inflation, updating only the Coast Guard option user fees or continuing
with the current user fees. Each of these options will be considered in
the following discussion.
    Under the first alternative, Coast Guard considered to adjust the
current user fees for inflation from 1995 dollars to 2020 dollars. To
adjust for inflation, we use an inflation factor from the annual GDP
deflator data. We calculate the inflation factor of 1.58 by dividing
the annual 2020 index number (113.623) by the annual 1995 index number
(71.864). We then multiply the current fees for subchapters I and M by
the inflation factor and round it to the nearest dollar. Subchapters I
and M would experience a 58-percent increase in fees and incur annual
fees of $597 and $1,691, respectively. The fees, when multiplied by the
number of annual COI renewals, yield an annual revenue of approximately
$8.9 million and transfer payments of $3.2 million. We rejected this
alternative because the annual revenue collected under this methodology
does not reflect the full cost to the Coast Guard of providing the COI-
related services. Table 14 shows the inflation adjusted user fees for
subchapter I and M vessels.

                                           Table 14--Comparison of User Fees in 1995 Dollars and 2020 Dollars
                                                                    [Alternative 1] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Annual fee    Annual revenue
              Fee category                    1995 $         Inflation        2020 $        Population      Incremental      transfer     collected from
                                           (current fee)      factor                                      fee adjustment     payments        user fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subchapter I vessels....................          $2,915            1.58          $4,606              42          $1,691         $71,009        $193,439
Subchapter M vessels....................           1,030            1.58           1,627           5,343             597       3,191,908       8,695,198
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................  ..............  ..............  ..............  ..............  ..............       3,262,918       8,888,638
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Note: All dollar figures rounded to the closest whole dollar.

    In our second alternative, we considered updating only the Coast
Guard option user fees. We rejected this alternative because it would
not comply with section 815 of CGAA. That section directs the Coast
Guard to review and, based on our findings, revise the fee for towing
vessel inspections. First, the Coast Guard must compare the costs to
the Government of towing vessel inspections performed by the Coast
Guard and towing vessel inspections performed by a third party, to
determine if they are different. We have conducted that comparison and
determined that there is a difference in costs to the Government
between the inspection options for towing vessels that involve a third
party and those that do not. If there is a difference in costs, section
815 of CGAA directs us to revise the fees we assess for towing vessel
inspections to conform to 31 U.S.C. 9701, and to base the fee on the
cost to the Government.
    In our third alternative, we considered maintaining the current
user fee without an adjustment. We rejected this alternative because
the annual revenue collected under this methodology would not cover the
full cost to the Coast Guard of providing the COI-related services.
Conclusion
    In conclusion, we estimate that 87.9 percent of subchapter M
entities with revenue data will have an annual impact to revenue of 1
percent or less. Approximately, 10.2 percent will have an annual impact
to revenue between 1 and 3 percent. The remaining 1.9 percent will have
an annual impact to revenue greater than 3 percent. For subchapter I
entities, our analysis shows a less than 1 percent impact to annual
revenue for all small entities that had revenue data. We also discussed
several regulatory alternatives including our preferred alternative.
Our preferred alternative is to: (1) Update the user fee for seagoing
towing vessels; (2) revise the user fee for other inspected towing
vessels; and (3) establish fees for towing vessels using the ACP, SIP,
or the TSMS options. Vessels using the ACP, SIP or TSMS option would
pay a lower fee than vessels that use the traditional Coast Guard
inspection option.
    We are interested in the potential impacts from this rule on small
entities and we request public comment on these potential impacts. If
you think that this rule will have a significant economic impact on
you, your business, or your organization, please submit a comment to
the docket at the address under ADDRESSES in the rule. In your comment,
explain why, how, and to what degree you think this rule will have an
economic impact on you.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104-121, we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If the
proposed rule would affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please contact the person in the
FOR FURTHER INFORMATION CONTACT section of this proposed rule. The
Coast Guard will not retaliate against small entities that question or
complain about this proposed 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 proposed rule would call for no new collection of information
under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
    The Coast Guard has a collection of information for the collection
of user fees from inspected vessels. This collection is 1625-0074
titled ``Direct User Fees for Inspection or Examination of U.S. and
Foreign Commercial Vessels.'' The collection of information hour burden
for collecting user fees is independent of the amount collected. Towing
vessels inspected under 46 CFR subchapters I and M must currently pay
$1,030 and $2,915 respectively. This proposed rulemaking would simply
adjust the user fee amount to more accurately reflect the current cost
of the Coast Guard for performing inspections--and would not change the
number of towing vessels that must pay a user fee or the time it takes
to pay the user fee.

E. Federalism

    A rule has implications for federalism under Executive Order 13132
(Federalism) if it has a substantial direct effect on 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 proposed rule under Executive Order
13132 and have determined that it is consistent with the fundamental
federalism principles and preemption requirements described in
Executive Order 13132. Our analysis follows.
    This NPRM proposes to establish and revise user fees for services
provided by the Coast Guard pursuant to the Congressional mandate
contained in 46 U.S.C. 2110. Congress has not granted the authority to
the States to establish user fees for Coast Guard-provided services.
This NPRM would not impact a State's general ability to render services
or assess or collect fees for State-rendered services. Therefore, this

rule does not have federalism implications as described in Executive
Order 13132.
    While it is well settled that States may not regulate in categories
in which Congress intended the Coast Guard to be the sole source of a
vessel's obligations, 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, Executive Order 13132 specifically directs
agencies to consult with State and local governments during the
rulemaking process. If you believe this proposed rule would have
implications for federalism under Executive Order 13132, please contact
the person listed in the FOR FURTHER INFORMATION CONTACT section of
this preamble.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995, 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 million (adjusted for
inflation) or more in any one year. Although this proposed rule would
not result in such an expenditure, we do discuss the effects of this
proposed rule elsewhere in this preamble.

G. Taking of Private Property

    This proposed rule would not cause a taking of private property or
otherwise have taking implications under Executive Order 12630
(Governmental Actions and Interference with Constitutionally Protected
Property Rights).

H. Civil Justice Reform

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

I. Protection of Children

    We have analyzed this proposed rule under Executive Order 13045
(Protection of Children from Environmental Health Risks and Safety
Risks). This proposed rule is not an economically significant rule and
would not create an environmental risk to health or risk to safety that
might disproportionately affect children.

J. Indian Tribal Governments

    This proposed rule does not have tribal implications under
Executive Order 13175 (Consultation and Coordination with Indian Tribal
Governments), because it would 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 proposed rule under Executive Order 13211
(Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use). We have determined that it is not a
``significant energy action'' under Executive Order 13211, because
although it is a ``significant regulatory action'' under Executive
Order 12866, it is not likely to have a significant adverse effect on
the supply, distribution, or use of energy, and the Administrator of
OMB's Office of Information and Regulatory Affairs has not designated
it as a significant energy action.

L. Technical Standards

    The National Technology Transfer and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies to use voluntary consensus
standards in their regulatory activities unless the agency provides
Congress, through OMB, with an explanation of why using these standards
would be inconsistent with applicable law or otherwise impractical.
Voluntary consensus standards are technical standards (for example,
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 proposed rule does not use technical standards. Therefore, we
did not consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01, Rev. 1, associated implementing
instructions, and Environmental Planning COMDTINST 5090.1 (series),
which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made
a preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. A preliminary Record of Environmental
Consideration supporting this determination is available in the docket.
For instructions on locating the docket, see the ADDRESSES section of
this preamble. This proposed rule would be categorically excluded under
paragraphs L54 and L57 of Appendix A, Table 1 of DHS Instruction Manual
023-01, Rev. 1.\25\ Paragraph L54 pertains to regulations which are
editorial or procedural. Paragraph L57 pertains to regulations
concerning manning, documentation, admeasurement, inspection, and
equipping of vessels.
---------------------------------------------------------------------------

    \25\ https://www.dhs.gov/sites/default/files/publications/DHS_Instruction%20Manual%20023-01-001-01%20Rev%2001_508%20Admin%20Rev.pdf.
---------------------------------------------------------------------------

    This proposed rule would update the existing user fee for seagoing
towing vessels that are 300 gross tons or more and establish specific
user fees for other towing vessels that have more recently become
subject to inspection. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
proposed rule.

List of Subjects in 46 CFR Part 2

    Marine safety, Reporting and recordkeeping requirements, Vessels.

    For the reasons discussed in the preamble, the Coast Guard proposes
to amend 46 CFR part 2 as follows:

PART 2--VESSEL INSPECTIONS

0
1. The authority citation for part 2 is revised to read as follows:

    Authority: Sec. 622, Pub. L. 111-281; 33 U.S.C. 1903; 43 U.S.C.
1333; 46 U.S.C. 2103, 2110, 3306, 3316, 3703, 70034; Department of
Homeland Security Delegation No. 0170.1(II)(77), (90), (92)(a),
(92)(b); E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277, sec. 1-
105.

0
2. Amend Sec.  2.10-25 by:
0
a. Revising the definition of ``Sea-going towing vessel''; and
0
b. Adding the definitions in alphabetical order for ``Alternative
Compliance Program option'', ``Annual vessel inspection fee'', ``Coast
Guard option'', ``Streamlined Inspection Program option'', ``Towing
Safety Management System option'', and ``Towing vessel''.
    The additions and revision read as follows:

Sec.  2.10-25  Definitions.

* * * * *
    Alternative Compliance Program option means the option described in
46 CFR part 8, subpart D.

    Annual vessel inspection fee means the fee charged for inspection
and related services provided by the Coast Guard to determine whether a
vessel meets the requirements to maintain its Certificate of
Inspection.
    Coast Guard option means an option used by--
    (1) A vessel inspected under a 46 CFR subchapter that is not
participating in the Alternative Compliance Program described in 46 CFR
part 8, subpart D;
    (2) A vessel inspected under a 46 CFR subchapter that is not
participating in the Streamlined Inspection Program described in 46 CFR
part 8, subpart E; or
    (3) A vessel inspected under 46 CFR subchapter M that is not
participating in the Towing Safety Management System option described
in 46 CFR part 138.
* * * * *
    Seagoing towing vessel means a commercial vessel 300 gross tons or
more engaged in or intending to engage in the service of pulling,
pushing or hauling alongside, or any combination of pulling, pushing or
hauling alongside, and that makes voyages beyond the Boundary Line as
defined by 46 U.S.C. 103, and has been issued a Certificate of
Inspection under the provisions of subchapter I of this chapter.
* * * * *
    Streamlined Inspection Program option means the option described in
46 CFR part 8, subpart E.
* * * * *
    Towing Safety Management System option means the option described
in 46 CFR part 138 for towing vessels subject to 46 CFR subchapter M.
    Towing vessel means a commercial vessel engaged in or intending to
engage in the service of pulling, pushing, or hauling alongside, or any
combination of pulling, pushing, or hauling alongside.
* * * * *
0
3. Amend Sec.  2.10-101, in Table 2.10-101, by:
0
a. Revising the ``Sea-going Towing Vessels'' entry; and
0
b. Adding an entry for ``Towing Vessels (Inspected under 46 CFR
Subchapter M)''.
    The addition and revision read as follows:

Sec.  2.10-101  Annual vessel inspection fee.

* * * * *

   Table 2.10-101--Annual Vessel Inspection Fees for U.S. and Foreign
              Vessels Requiring a Certificate of Inspection
------------------------------------------------------------------------

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

                              * * * * * * *
Seagoing Towing Vessels (Inspected under 46 CFR
 Subchapter I):
    Coast Guard option..................................          $2,747
    Alternative Compliance Program option...............           1,850
    Streamlined Inspection Program option...............           2,260

                              * * * * * * *
Towing Vessels (Inspected under 46 CFR Subchapter M):
    Coast Guard option..................................           2,184
    Towing Safety Management System option..............             973
------------------------------------------------------------------------

* * * * *

    Dated: December 23, 2021.
Karl L. Schultz,
Admiral, U.S. Coast Guard, Commandant.
[FR Doc. 2022-00200 Filed 1-10-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: November 18, 2008 (Volume 73, Number 223)]
[Notices]
[Page 68463-68464]
[DOCID:fr18no08-120]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension: Rule 34b-1; File No. 270-305; OMB Control No. 3235-0346.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange
Commission (the ``Commission'') is soliciting comments on the
collection of information summarized below. The Commission plans to
submit this existing collection of information to the Office of
Management and Budget for extension and approval.
    Rule 34b-1 under the Investment Company Act (17 CFR 270.34b-1)
governs sales material that accompanies or follows the delivery of a
statutory prospectus (``sales literature'').\1\ Rule 34b-1 deems to be
materially misleading any investment company sales literature required
to be filed with the Commission by Section 24(b) of the Investment
Company Act (15 U.S.C. 80a-24(b)) \2\ that includes performance data,
unless the sales literature also includes the appropriate uniformly
computed data and the legend disclosure required in investment company
advertisements by rule 482 under the Securities Act of 1933 (17 CFR
230.482). Requiring the inclusion of such standardized performance data
in sales literature is designed to prevent misleading performance
claims by funds and to enable investors to make meaningful comparisons
among fund performance claims.
---------------------------------------------------------------------------

    \1\ A ``statutory prospectus'' is a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933 (15
U.S.C. 77j(a)).
    \2\ Sales literature addressed to or intended for distribution
to prospective investors is deemed filed with the Commission for
purposes of Section 24(b) of the Investment Company Act upon filing
with a national securities association registered under Section 15A
of the Securities Exchange Act of 1934 that has adopted rules
providing standards for the investment company advertising practices
of its members and has established and implemented procedures to
review that advertising. See Rule 24b-3 under the Investment Company
Act (17 CFR 270.24b-3).
---------------------------------------------------------------------------

    The Commission estimates that 3,210 respondents file approximately
13,001 responses with the Commission that include the information
required by rule 34b-1. The burden from rule 34b-1 requires 2.41 hours
per response resulting from creating the information required under
rule 34b-1. The total burden hours for rule 34b-1 is 31,332 per year in
the aggregate (13,001 responses x 2.41 hours per response). Estimates
of average burden hours are made solely for the purposes of the
Paperwork Reduction Act, and are not derived from a comprehensive or
even a representative survey or study of the costs of Commission rules
and forms.
    The collection of information under rule 34b-1 is mandatory. The
information provided under rule 34b-1 is not kept confidential. The
Commission may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number.
    Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proposed performance of
the functions of the agency, including whether information will have
practical utility; (b) the accuracy of the agency's estimate of the
burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given

to comments and suggestions submitted in writing within 60 days of this
publication.
    Please direct your written comments to Lewis W. Walker, Acting
Director/CIO, Securities and Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-
mail to<EMAIL_ADDRESS>
    Dated: November 10, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-27429 Filed 11-17-08; 8:45 am]

BILLING CODE 8011-01-P