89 FR 241 pgs. 101490-101500 - Updated Document Submission Process for Compliance With Electronic Records Mandate
Type: RULEVolume: 89Number: 241Pages: 101490 - 101500
Pages: 101490, 101491, 101492, 101493, 101494, 101495, 101496, 101497, 101498, 101499, 101500Docket number: [Docket No. USCG-2023-0584]
FR document: [FR Doc. 2024-29555 Filed 12-13-24; 8:45 am]
Agency: Homeland Security Department
Sub Agency: Coast Guard
Official PDF Version: PDF Version
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DEPARTMENT OF HOMELAND SECURITY
Coast Guard
46 CFR Part 67
[Docket No. USCG-2023-0584]
RIN 1625-AC93
Updated Document Submission Process for Compliance With Electronic Records Mandate
AGENCY:
Coast Guard, DHS.
ACTION:
Final rule.
SUMMARY:
The Coast Guard is issuing a final rule to update regulations that reflect the Coast Guard National Vessel Documentation Center's processes and capabilities, as well as align regulations with statutory reporting timelines. The processes noted pertain to electronic file submissions, requirements for submission of original build evidence, and return of existing Certificates of Documentation (CODs). In addition, the time period related to reporting changes to COD information is updated to align with statute.
DATES:
This final rule is effective January 15, 2025.
ADDRESSES:
To view documents mentioned in this preamble as being available in the docket, go to www.regulations.gov, type USCG-2023-0584 in the search box, and click "Search." Next, in the Document Type column, select "Supporting & Related Material."
FOR FURTHER INFORMATION CONTACT:
For information about this document, call or email Mr. Ronald (Sam) Teague, Coast Guard National Vessel Documentation Center; telephone (304) 271-2506, email ronald.s.teague@uscg.mil .
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Abbreviations
II. Basis and Purpose, and Regulatory History
III. Background and Discussion of Rule
IV. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Administrative Procedure Act
G. Unfunded Mandates
H. Taking of Private Property
I. Civil Justice Reform
J. Protection of Children
K. Indian Tribal Governments
L. Energy Effects
M. Technical Standards
N. Environment
I. Abbreviations
Builder's Certificate Builder's Certification and First Transfer of Title (form CG-1261)
CFR Code of Federal Regulations
CGAA 2018 Frank LoBiondo Coast Guard Authorization Act of 2018
COD Certificate of Documentation
CY Calendar year
DHS Department of Homeland Security
Fax Facsimile
FR Federal Register
FTE Full-time equivalent
GS General Schedule
NARA National Archives and Records Administration
NPRM Notice of proposed rulemaking
NVDC U.S. Coast Guard National Vessel Documentation Center
OMB Office of Management and Budget
OPM Office of Personnel Management
PDF Portable document format
§ Section
U.S.C. United States Code
YoY Year-over-year
YTD Year-to-date
II. Basis and Purpose, and Regulatory History
Section 2103 of Title 46 of the United States Code (U.S.C.) gives the Secretary of the Department in which the Coast Guard is operating broad regulatory authority to carry out the provisions of 46 U.S.C. subtitle II (Vessels and Seamen), where vessel documentation provisions in 46 U.S.C. chapter 121 are located. The Secretary's authority is delegated to the Coast Guard by the Department of Homeland Security (DHS) Delegation No. 00170.1, Revision No. 01.4, paragraph II (92)(a).
The Coast Guard did not publish a notice of proposed rulemaking (NPRM) before this rule. As explained in Section IV.F Administrative Procedure Act of this preamble, the Coast Guard finds that this rule is exempt from notice and comment as a procedural rule under 5 U.S.C. 553(b)(A) and for good cause under 5 U.S.C. 553(b)(B).
III. Background and Discussion of Rule
[top] In 2007, the Coast Guard amended vessel documentation regulations to eliminate the requirement to provide certain original documents to the U.S. Coast Guard National Vessel Documentation Center (NVDC) for recording and eliminated the additional fee for filing by facsimile (fax). 1 Currently, Coast Guard regulations allow the filing of instruments, such as Bills of Sale, Deeds of Gifts, Mortgages, and Notices of Claim of Lien, to the NVDC by paper submission or electronically. Regulations on the
Footnotes:
1 ?Vessel Documentation; Recording of Instruments direct final rule, 72 FR 42310, Aug. 2, 2007; and confirmation of effective date, 72 FR 58762, Oct. 17, 2007.
This rule removes references to the specific electronic filing methodologies of PDF and faxing and revises the regulations with more general terms to capture other electronic filing options. It also removes referencing a specific technology that is no longer a part of NVDC's current process, because the system provided to and used by the NVDC does not support fax capabilities.
Electronic filing is not mandatory. With this rule, vessel owners retain the ability to file paper records with the Coast Guard. Historically, paper records that were scanned and uploaded into the system were ultimately archived with the Federal Records Center, in accordance with National Archives and Records Administration (NARA) requirements. The NVDC still scans and uploads paper records, but, NARA, with few exceptions, stopped accepting paper records as of January 1, 2023. See Transition to Electronic Records, OMB and NARA Memorandum M-19-21 (June 28, 2019). 2 NARA does recognize a possible exception for records of intrinsic historic value to its rule on no longer accepting paper documents. See Federal Records Management: Digitizing Permanent Records and Reviewing Records Schedules, 88 FR 28410, 28412-13 (May 4, 2023) and Guidance on OMB and NARA Memorandum Transition to Electronic Records, NARA Bulletin 2020-01 (September 30, 2020). 3 However, that exception would not apply to the vast majority of NVDC records, if any. Therefore, paper records currently submitted to the NVDC are shelved for up to 2 years awaiting destruction by the Coast Guard.
Footnotes:
2 ? https://www.archives.gov/files/records-mgmt/policy/m-19-21-transition-to-federal-records.pdf (accessed December 10, 2024).
3 ? https://www.archives.gov/records-mgmt/bulletins/2020/2020-01 (accessed December 10, 2024).
In response to NARA's paper processing change, the NVDC is maximizing electronic filing capabilities to reduce the need to digitize physical submissions, store the submissions, and ultimately destroy them. Additionally, more general language in the regulations allows the Coast Guard and affected vessel owners to take advantage of developing technologies as they become available for electronic submission of instruments.
Currently, 46 CFR 67.99 requires original vessel build evidence. Without the ability to send original documents to NARA, the NVDC is required to either mail the form CG-1261, the original Builder's Certification and First Transfer of Title (hereafter "Builder's Certificate"), to the vessel owner, or shred the document. The NVDC currently accepts copies of other original documents and ceased requiring vessel owners to submit original evidence of build as of July 1, 2022. In line with this practice, the Coast Guard is amending 46 CFR 67.99 to remove the requirement for original evidence of build documents.
In addition, 46 CFR 67.141(a)(4), 67.167(a), and 67.169(b) currently require an outstanding Certificate of Documentation (COD) be submitted as part of the application procedure for COD replacement, exchange, or deletion. This rulemaking removes this requirement.
On December 4, 2018, Congress enacted the Frank LoBiondo Coast Guard Authorization Act of 2018 (CGAA 2018). Section 512 of the CGAA 2018 amended 46 U.S.C. 12105(e)(3)(A)? 4 to require vessel owners to notify the Coast Guard no later than 30 days after each change in information that the issuance of a COD for the vessel is based on if it occurs before the expiration of the certificate. The Coast Guard previously revised 46 CFR 67.319 to reflect this statutory change (86 FR 5022, Jan. 19, 2021). With this final rule, the Coast Guard amends 46 CFR 67.113(e) and 67.321 to also extend, from 10 to 30 days, the time that a vessel owner has to report a change of a managing owner's address to the NVDC.
Footnotes:
4 ?Public Law 115-282, 132 Stat. 4192.
This rulemaking will benefit vessel owners in the form of greater clarification by codifying current policy and practice at the NVDC of not requiring vessel owners to mail original build evidence and instruments. In addition, Coast Guard regulations will accurately reflect current statutory periods for vessel owners to submit changes to their address used to apply for a COD. The Coast Guard will also benefit from greater clarity, as this final rule harmonizes the CFR with current practices.
IV. Regulatory Analyses
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below, we summarize our analyses based on these statutes or Executive orders.
A. Regulatory Planning and Review
Executive Orders 12866 (Regulatory Planning and Review), as amended by Executive Order 14094 (Modernizing Regulatory 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.
The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866, as amended by Executive Order 14094. Accordingly, OMB has not reviewed this regulatory action. A regulatory analysis follows.
Summary of Regulatory Analysis
As discussed in Section III, Background and Discussion of Rule, in this preamble, the NVDC no longer sends or receives faxes, leaving PDF attachment to email as the only electronic means of submission. Since July 1 of 2022, the Coast Guard ceased requiring vessel owners to submit original Builder's Certificates to the NVDC, and NVDC began accepting copies of the original certificate. 5 To better implement this change, the Coast Guard is maximizing electronic filing capabilities, although vessel owners will retain the option to submit paper records to the Coast Guard. Additionally, more general language in the regulations allows the Coast Guard to take advantage of developing technologies as they become available for electronic submission of records.
Footnotes:
5 ? https://www.dco.uscg.mil/Portals/9/DCO%20Documents/NVDC/Change%20in%20Requirements%20for%20Original%20Build%20Certificate.pdf?ver=qOU5UxE1-bvviJMo75ZCmA%3D%3D (accessed December 10, 2024).
[top] To provide a comprehensive analysis covering both of these programmatic changes with implementation of the final rule, the Coast Guard utilizes two baselines, a pre-program change baseline that represents the state of the world without the program change in 2022 and a "no action" baseline that represents the state of the world without the regulation. According to federal guidelines, the economic impact of the rule should be accounted for in the period in which the changes occur. The rulemaking aligns regulations with current industry practice, which existed prior to the rulemaking. Therefore, the economic impact of the rule, which normally includes costs, cost-savings,
The "pre-program" baseline is used to measure the economic impacts of the program changes (a timespan that includes events beginning in 2022 through 2033), and the "no action" baseline is used to measure the impacts of the final rule (a projected 10-year period, which includes events beginning in 2024 through 2033).
Tables 1 and 2 present the overall impacts for both baselines.
Footnotes:
6 ?Estimates for total COD applicants are not used in the estimation of cost savings. Total COD applications were estimated using a 5-year moving average, and similar to methods described below for the affected population methodology, we applied a growth rate to estimate future years and an annual average.
| Category | Program change impacts ("no action" baseline) | Final rule impacts compared to "no action" baseline |
|---|---|---|
| Applicability | July 1, 2022: the Coast Guard began accepting copies of Builder's Certificates and other documents through electronic means, primarily email with PDF attachments | Original Evidence of Build Documents: Amends 46 CFR 67.99(a) and reflects current processes and capabilities at the NVDC, eliminating the requirement for vessel owners to submit original evidence of build documents and allowing copies. Reporting Period: Amends 46 CFR 67.113(e) and 67.321 to extend the time, from 10 days to 30 days, in which a vessel owner must notify the NVDC of a change of address, or when information submitted for the issuance of a COD changes. |
| Electronic Record Submissions: Amends 46 CFR 67.209, 67.218 and 67.219 to eliminate restrictions on electronic submission options. | ||
| Return of CODs: Amends 46 CFR 67.167(a) and 67.171(b), and deletes 67.169(b) and 141(a)(4), which requires applicants to return original CODs upon application for a replacement or exchange of COD. | ||
| Affected Population | Original Evidence of Build Documents: Approximately 20,068 Initial COD applications are expected to be submitted to the NVDC annually over the next 10 years. Additionally, this population includes the 18,336 and 17,558 applicants who submitted to NVDC in 2022 and 2023, respectively Electronic Record Submissions: On average, this change applies to the entire population of NVDC customers, estimated at 161,587? 6 COD holders over the next 10 years. Additionally, this population includes the 213,087 and 174,343 applicants who submitted to NVDC in 2022 and 2023, respectively Return of CODs: On average, this change applies to the population of NVDC customers who submit a COD other than an Initial COD, estimated at 141,519 COD holders over the next 10 years. Additionally, this population includes the 194,751 and 156,785 applicants who submitted to NVDC in 2022 and 2023, respectively | Original Build Evidence: Approximately 20,068 Initial COD applications are expected to be submitted to the NVDC annually over the next 10 years. Reporting Period: On average, this change applies to the entire population of NVDC customers, estimated at 161,587 COD holders over the next 10 years. Electronic Record Submissions: On average, this change applies to the entire population of NVDC customers, estimated at 161,587 COD holders over the next 10 years. Return of CODs: On average, this change applies to the population of NVDC customers who submit a COD other than an Initial COD, estimated at 141,519 COD holders over the next 10 years. |
| Costs | Additional costs were not imposed by a program change to accepting electronic versions of a Builder's Certificate, among other documents, since July 1 of 2022 | This final rule does not impose any new costs to industry by amending 46 CFR 67.99(a) and harmonizing CFR language with current procedures at NVDC, as the NVDC has accepted electronic versions of a Builder's Certificate, among other documents, since July 1 of 2022. The option of submitting an original document to the NVDC by mail is preserved in this final rule. |
| Cost-savings (in 2023 dollars, 2% discount rate)?* | Electronic Records-Industry: Estimated annualized cost-savings of approximately $14,914 in 2023 dollars, discounted at 2 percent Electronic Records-Government: Estimated annualized cost savings of approximately $208,985 in 2023 dollars, discounted at 2 percent Estimated total annualized cost-savings of approximately $223,899 in 2023 dollars, discounted at 2 percent | This final rule does not impose any new cost savings beyond those attributable to the program change. The opportunity for cost saving to industry began in July 2022, when vessels owners no longer had to submit original evidence of build documents to the Coast Guard. The cost savings of this new practice were incurred even without a new regulation codifying the practice. Therefore, all cost savings in this analysis are assigned to the program change in 2022. Additionally, there are no estimated cost savings to industry or Government associated with amending 46 CFR 67.113(e) and 67.321. |
| Benefits | Electronic Records-Industry: The electronic submission of evidence of build benefits industry by reducing the burden to the public of printing and mailing paper records to the NVDC Electronic Records-Government: Government benefits by reducing the need to digitize original physical applications, store the submissions, and ultimately shred or send evidence of build documents back to vessel owners | Reporting Period-Industry: There are no qualitative or quantitative benefits. However, industry is given an increase in the allotted time provided to vessel owners in which they must notify the NVDC of any changes to the issuance of their COD, from 10 to 30 days. Reporting Period-Government: There are no qualitative benefits to Government from extending the period in which vessel owners must notify the NVDC of any changes to the issuance of their COD from 10 to 30 days. |
| *?Totals may not add due to rounding. | ||
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| Subpart | Description of change | Type of change | "No action" baseline impact | "Final rule" impact |
|---|---|---|---|---|
| §?67.99(a) | Revises the text, "Evidence of the facts of build may be either a completed original form CG-1261 or other original document. . ." to "Evidence of the facts of build may be a copy of either the original, completed form CG-1261 (Builder's Certification and First Transfer of Title), or other document. . ." | Economic ( pre-programmatic change baseline) and Editorial | The Coast Guard began receiving electronic copies of documents in July of 2022. This immediately reduced the cost to vessel owners and operators of the previous requirement to mail in original documents Estimated annualized cost-savings to industry of approximately $14,165 in 2023 dollars, discounted at 2% | No economic impact. |
| Estimated annualized cost-savings to Government of approximately $198,501 in 2023 dollars, discounted at 2% | ||||
| Total annualized cost-savings of approximately $212,666 in 2023 dollars, discounted at 2% | ||||
| §?67.113(e) | Update "within 10 days" to "within 30 days," in accordance with 67.319 | Editorial | No economic impact | No economic impact. |
| §?67.141(a)(4) | Remove "(4) If the application is for replacement of a mutilated document or exchange of documentation, the outstanding Certificate of Documentation." | Editorial | No economic impact | No economic impact. |
| §?67.167(a) | Remove .". . send or deliver the Certificate to the National Vessel Documentation Center, and . . ." | Editorial | No economic impact | No economic impact. |
| §?67.169(b) | Remove "b) When application for replacement of a Certificate of Documentation is required because the Certificate has been mutilated, the existing Certificate must be physically given up to the National Vessel Documentation Center." | Editorial | No economic impact. | No economic impact. |
| §?67.171(b) | Remove "or deliver the original Certificate of Documentation to the National Vessel Documentation Center together with." | Editorial | No economic impact | No economic impact. |
| §?67.209 | Remove reference to 67.218 and 67.219 | Editorial | No economic impact | No economic impact. |
| §?67.218 | PDF filing-edit to reference "electronic filing." | Editorial | No economic impact | No economic impact. |
| §?67.219 | 67.219 is eliminated entirely | Editorial | No economic impact | No economic impact. |
| §?67.321 | Replaces the word "shall" with "must," and the number "10" with "30." | Editorial | No economic impact | No economic impact. |
Affected Population/Methodology
Every application for an Initial COD submitted to the NVDC must include evidence of build in the form of a Builder's Certificate or other original documentation containing the same information. Given that a Builder's Certificate, or other original documentation containing the same information, must be submitted to the NVDC with every Initial COD application, for our analysis, the number of applications for Initial CODs submitted to the NVDC is used interchangeably with the number of Builder's Certificates submitted to the NVDC.
Table 3 displays the number of Initial COD applications submitted to the NVDC for Commercial (b), Fishing (c), and Recreational Vessels (d), beginning in calendar year (CY) 2018, and ending in CY 2023. The sum of these categories will be considered "Industry" for purposes of this rule. The sum of columns (b), (c), and (d) yields the total Initial COD applications submitted to the NVDC per calendar year (e), where (e) = (b) + (c) + (d).
| Year | Commercial | Fishing | Recreational | Initial COD applications |
|---|---|---|---|---|
| (a) | (b) | (c) | (d) | (e) = (b) + (c) + (d) |
| 2018 | 3,010 | 444 | 12,444 | 15,898 |
| 2019 | 3,161 | 450 | 12,811 | 16,422 |
| 2020 | 3,559 | 439 | 15,510 | 19,508 |
| 2021 | 3,790 | 466 | 15,798 | 20,054 |
| 2022 | 3,159 | 456 | 14,721 | 18,336 |
| 2023 | 3,269 | 471 | 13,818 | 17,558 |
Methodology-Affected Population
[top] Our methodology begins with establishing an affected population growth rate, to help project Initial COD applicants for an additional 10 years. Table 4 illustrates the year-over-year (YoY) change for each vessel category, calculated as the percentage change within each series, over the most recent 5 years' worth of data.
| Year | Commercial | Fishing | Recreational | Initial COD applications |
|---|---|---|---|---|
| (a) | (b) | (c) | (d) | (e) |
| 2018 | ||||
| 2019 | 5.0 | 1.4 | 2.9 | 3.3 |
| 2020 | 12.6 | -2.4 | 21.1 | 18.8 |
| 2021 | 6.5 | 6.2 | 1.9 | 2.8 |
| 2022 | -16.6 | -2.1 | -6.8 | -8.6 |
| 2023 | 3.5 | 3.3 | -6.1 | -4.2 |
| Average Growth | *?2.4 | |||
| *?Average Growth figure is rounded. Therefore, totals may not sum due to rounding. | ||||
As we can see from Table 4, the range in growth between CY 2018 and CY 2023 across all vessel categories fluctuated from a -16.6 percent YoY decline in Commercial vessels (b) during CY 2022, to a 21.1 percent YoY growth for Recreational vessels (d) in CY 2020. However, each series has grown over time on average; approximately 2.2 percent for Commercial vessels (b), 1.2 percent for Fishing vessels (c), and 2.6 percent for Recreational vessels (d). The average growth rate for all Initial COD applications is estimated at 2.4 percent. This figure is used to forecast the Initial COD applications for years 2024-2033.
Projecting Initial CODs from 2024 to 2033, Table 5 shows the average number of Initial COD applications for the next 10 years, derived by applying the 2.4 percent growth rate measured in Table 4. We take the average annual estimate of Initial COD applications and use that number to represent the affected population for Initial COD applications for each year from 2024-2033 for both the pre-program change baseline and the "no action" baseline. Here, the baselines are treated equally, as we don't anticipate the final rule to induce a change in applications.
| Year | Commercial | Fishing | Recreational | Initial COD applications |
|---|---|---|---|---|
| (a) | (b) | (c) | (d) | (e) = (b) + (c) + (d) |
| 2024 | 3,348 | 482 | 14,152 | 17,982 |
| 2025 | 3,429 | 494 | 14,494 | 18,416 |
| 2026 | 3,512 | 506 | 14,844 | 18,861 |
| 2027 | 3,596 | 518 | 15,202 | 19,317 |
| 2028 | 3,683 | 531 | 15,569 | 19,783 |
| 2029 | 3,772 | 544 | 15,945 | 20,261 |
| 2030 | 3,863 | 557 | 16,331 | 20,751 |
| 2031 | 3,957 | 570 | 16,725 | 21,252 |
| 2032 | 4,052 | 584 | 17,129 | 21,765 |
| 2033 | 4,150 | 598 | 17,543 | 22,291 |
| Average 2024-2033 | 20,068 |
Methodology-Industry and Government Cost Savings
With a value for the average Initial COD applications for future years, we can begin estimating cost savings for all years, by multiplying the annual affected population no longer needing to submit a Builder's Certificate by the opportunity cost of either postage to industry, and time and wages to assess the documents by the Federal Government. Table 6 provides a list of key inputs used to estimate cost savings including the postage rate for assessing industry savings and time and wages associated with government savings.
| Inputs | HR equivalent |
|---|---|
| Government: | |
| 12-minute Process Time | 0.2 Hour. |
| Hourly Wage | $24.88. |
| Load Factor | 1.75. |
| GDP Deflator (2023) | 1.092. |
| Total Wage Rate | $47.64. |
| Industry: | |
| Postage Submission Cost | $0.68. |
| Percent of Submission | 100%. |
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Cost savings to industry is calculated as the product of the estimated average number of Builder's Certificates that the Coast Guard no longer expects to be submitted by mail annually, and the price of a standard, stamped, letter-sized envelope bought through the United States Postal Service (USPS). For years 2024 through 2033, the estimated average affected population is approximately 20,068 Initial COD applications submitted yearly, assuming 100 percent electronic submission rate. Additionally, according to the USPS, the cost of purchasing a standard, stamped, letter-sized envelope is approximately $0.68. 7 To estimate the average annualized cost savings per form not mailed to the NVDC, we multiply the estimated annual affected population of Initial CODs by the cost of mailing each form. For example, for a given future year, we multiply the average 20,068 Initial COD applications by avoided postage of $0.68, to estimate an annual cost savings of $13,646.
Footnotes:
7 ? https://www.usps.com/business/prices.htm (accessed December 10, 2024).
Cost savings to government is calculated as the product of the estimated average number of Initial COD applications that the Coast Guard no longer expects to receive in the mail annually, and the 12 minutes it takes to process mailed-in forms, or 0.2 hours, and the total wage rate of a GS-5 employee at $47.64 per hour (the total wage rate is equal to the hourly wage multiplied by the load rate).
To explain more about Government savings estimates, in general, once a Builder's Certificate paper copy is received by the NVDC, General Schedule (GS)-5 personnel must first locate and open the mail, put it in the mail tray, classify and sort it, and scan each Builder's Certificate into the Coast Guard's database. Once the application has been processed, the documents will be shelved at NVDC's file room and await destruction. According to our subject matter expert at NVDC, this process takes approximately 12 minutes per batch of paper copies, or 0.2 hours' worth of time for GS-5 employees (12 ÷ 60 = 0.2 hrs.).
According to the Office of Personnel Management (OPM) salary table published for CY 2024, which is the official publication for Federal Government employees' salaries and wages, the average hourly wage-rate in the Washington DC metropolitan area for a GS-5 employee at the step 5 level is approximately $24.88. 8
Footnotes:
8 ? https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/24Tables/html/DCB_h.aspx (accessed December 10, 2024).
To account for the employee benefits to which employees are typically entitled, we use the Congressional Budget Office (CBO)'s Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015? 9 study to derive a load factor. This is a one-time study conducted by the CBO that compared the wages and salaries between Federal Government and private sector employees.
Footnotes:
9 ?Congressional Budget Office, Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015." https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/52637-federalprivatepay.pdf (accessed December 10, 2024).
Multiplying a benefit factor? 10 by the estimated average hourly wage-rate for GS-5 employees, $24.88, yields a loaded wage-rate of approximately $47.64. As stated earlier, the process of receiving, sorting, logging, storing, and destroying or returning a Builder's Certificate is estimated at approximately 0.2 hours' of labor time for a GS-5 employee. Multiplying this value by the estimated loaded hourly wage-rate, $47.64, yields a total of $9.53 of avoided cost per form not processed by the NVDC ($47.64 × 0.2 hrs. = $9.53).
Footnotes:
10 ?We divide the Total Compensation for employees in the Federal Government with some college as presented in Table 4-Federal and Private Sector Total Compensation, $56.30, by the average Wage for an employee in the Federal Government with some college, $32.10 in Table 2-Federal and Private-Sector Wages, by Workers' Educational Attainment. Dividing the Federal Sector Total Compensation value, $56.30, by the Federal Sector Wages for an employee with some college, $32.10, yields a load factor of 1.75, $56.30 ÷ $32.10 = 1.75.
Source: Congressional Budget Office, "Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015." https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/52637-federalprivatepay.pdf (accessed December 10, 2024).
The NVDC expects an average annual reduction in burden of approximately 20,068 Builder's Certificate paper copies. The product of this value, and the opportunity cost per form, $9.53, yields an estimated annual average undiscounted cost-savings of approximately $191,248. That is, 20,068 × $9.53 = $191,248.
Methodology-Time Value Formulation
Lastly, with respect to time value considerations, all savings figures are discounted by the number of years into the future considered under this economic analysis, as well as for years 2022 and 2023. 11 For the 2 previous years, we discount using multiplication in replacement of division and assign period numbers 1 and 0, respectively. Present valuation is then calculated by multiplying the previous year value by one (1) plus the discount rate, exponentiating the year-period. For years 2024, and all years forward, we assign corresponding period number 1, 2, 3 . . . sequentially, and apply the standard present value formula, dividing future values by one (1) plus the discount rate raised to the corresponding year-period.
Footnotes:
11 ?Net Present Value (NPV) is used to estimate the future value of money in terms of the present value. Money can be invested at annual returns for future income, which means the value of money spent in the future may be less than if that money had been invested instead. NPV allows us to calculate how much the total expenditures are worth discounted backwards to the present, so we can estimate the true value of the money expended or saved.
Cost-Benefit Analysis From the Program Change (2022-2033)
Costs
We found no costs associated with or imposed by program changes to accept electronic versions of a Builder's Certificate, among other documents, starting on July 1 of 2022. Applicants have been able to submit documents electronically, or by mail, and the option of submitting an original document to the NVDC by mail is preserved in this final rule. We assume the time it takes to prepare an electronic version versus a hard copy to be the same.
Cost Savings-Undiscounted and Discounted Savings to Industry
Using the inputs described in the methodology section, in table 7 we display the estimated undiscounted and discounted cost-savings to industry. The discounted figures are calculated as the product of the anticipated Initial COD applications expected to be submitted to the NVDC (from tables 3 and 5), and the cost of a standard, stamped envelope, determined at $0.68 per submission (Table 6). This figure is then discounted for a 10-year period. 12 Including years 2022 (initial year of the programmatic change) and 2023, the Coast Guard estimates total cost savings to industry of approximately $147,236 in 2023 dollars, discounted at 2 percent.
Footnotes:
12 ?For future years, the discount formula: Yearly Cost-Savings/(1+.02) ^ Year Number.
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| Year | Initial COD applications | Undiscounted cost-savings | 2% Discount? 13 | ||||
| 2022 | 1 | 18,336 | $12,468 | $12,718 | |||
| 2023 | 0 | 17,558 | 11,939 | 11,939 | |||
| 2024 | 1 | 20,068 | 13,646 | 13,379 | |||
| 2025 | 2 | 20,068 | 13,646 | 13,116 | |||
| 2026 | 3 | 20,068 | 13,646 | 12,859 | |||
| 2027 | 4 | 20,068 | 13,646 | 12,607 | |||
| 2028 | 5 | 20,068 | 13,646 | 12,360 | |||
| 2029 | 6 | 20,068 | 13,646 | 12,117 | |||
| 2030 | 7 | 20,068 | 13,646 | 11,880 | |||
| 2031 | 8 | 20,068 | 13,646 | 11,647 | |||
| 2032 | 9 | 20,068 | 13,646 | 11,419 | |||
| 2033 | 10 | 20,068 | 13,646 | 11,195 | |||
| Total | 160,870 | 147,236 | |||||
| Annualized Equivalent Cost | 14,914 | ||||||
Undiscounted and Discounted Cost Savings to Government
Footnotes:
13 ?Discount total for a year is calculated with the following formula: (Undiscounted cost savings * discount rate) ^ number of years from present.
The Government did incur cost savings under changes during the pre-programmatic baseline period by not having to process, store, and shred or return as many paper Builder's Certificates. In addition to years 2022, and 2023, the Coast Guard estimates that, from 2024 to 2033, the Government will not need to process, store, or destroy, on average, approximately 20,068 Initial COD paper instruments annually in the future.
As shown in table 8, the Coast Guard estimates total cost savings to the Government of approximately $2,063,232 in 2023 dollars, discounted at 2 percent.
| Year | Initial COD applications | Undiscounted cost-savings | 2% Discount | ||||
| 2022 | 1 | 18,336 | $174,723 | 178,217 | |||
| 2023 | 0 | 17,558 | 167,309 | 167,309 | |||
| 2024 | 1 | 20,068 | 191,226 | 187,477 | |||
| 2025 | 2 | 20,068 | 191,226 | 183,801 | |||
| 2026 | 3 | 20,068 | 191,226 | 180,197 | |||
| 2027 | 4 | 20,068 | 191,226 | 176,664 | |||
| 2028 | 5 | 20,068 | 191,226 | 173,200 | |||
| 2029 | 6 | 20,068 | 191,226 | 169,803 | |||
| 2030 | 7 | 20,068 | 191,226 | 166,474 | |||
| 2031 | 8 | 20,068 | 191,226 | 163,210 | |||
| 2032 | 9 | 20,068 | 191,226 | 160,010 | |||
| 2033 | 10 | 20,068 | 191,226 | 156,872 | |||
| Total | 2,254,294 | 2,063,232 | |||||
| Annualized Equivalent Cost | 208,985 | ||||||
Over a 12-year period, the programmatic changes will save the Government approximately $2,063,232 when discounted at 2 percent.
Total Undiscounted and Discounted Cost Savings-Industry and Government
As presented in table 9, the estimated total cost savings for both industry and Government is approximately $2,210,468, in 2023 dollars, discounted at 2 percent.
[top]
| Year | Initial COD applications | Undiscounted cost-savings | 2% Discount | ||||
| 2022 | 1 | 18,336 | $187,191 | $190,935 | |||
| 2023 | 0 | 17,558 | 179,248 | 179,248 | |||
| 2024 | 1 | 20,068 | 204,872 | 200,855 | |||
| 2025 | 2 | 20,068 | 204,872 | 196,917 | |||
| 2026 | 3 | 20,068 | 204,872 | 193,056 | |||
| 2027 | 4 | 20,068 | 204,872 | 189,271 | |||
| 2028 | 5 | 20,068 | 204,872 | 185,559 | |||
| 2029 | 6 | 20,068 | 204,872 | 181,921 | |||
| 2030 | 7 | 20,068 | 204,872 | 178,354 | |||
| 2031 | 8 | 20,068 | 204,872 | 174,857 | |||
| 2032 | 9 | 20,068 | 204,872 | 171,428 | |||
| 2033 | 10 | 20,068 | 204,872 | 168,067 | |||
| Total | 2,415,164 | 2,210,468 | |||||
| Annualized Equivalent Cost | 223,899 | ||||||
Benefits
In addition to cost savings above, industry applicants likely experience additional qualitative benefits of increased flexibility and ease with the option for electronic submission of Initial COD applications.
Additionally, programmatic changes benefit Government by reducing the need to digitize original physical applications, store the submissions, and ultimately shred or send evidence of build documents back to vessel owners.
Cost-Benefit Analysis From the No Action Baseline (2024-2033)
Costs-All Provisions
This final rule does not impose any new costs to industry or the Government by amending 46 CFR 67.99(a), 67.113(e), 67.321, 67.99(a), or 67.113(e); that is, the allowance for evidence of build copies, or for the extension from 10 to 30 days of notification for changes in ownership or address.
Cost Savings-Electronic Records
As shown under the previous sections, the final rule does not produce additional cost savings beyond those attributable to the programmatic changes which occurred in 2022, when the NVDC ceased requiring vessel owners to submit original evidence of build documents. The opportunity for cost saving to industry and Government began in 2022, following the NVDC's acceptance of electronic submission of documents and copies. Therefore, all cost savings in this analysis are assigned to the program change of 2022.
Cost Savings-Reporting Period
There are no quantifiable cost savings to industry or the Government by amending 46 CFR 67.113(e) and 67.321, which extends the time, from 10 to 30 days, in which a vessel owner must notify the Coast Guard for a change of address or when information submitted for the issuance of a COD changes.
Benefits-All Provisions
This final rule eliminates confusion among the regulated public as it reconciles language in regulations with current procedures at the NVDC, which has been accepting electronic versions of Builder's Certificates since July 1 of 2022.
Industry benefits from the increased period to notify the Coast Guard of any changes to their COD by an additional 20 days. The Coast Guard considers this a qualitative benefit because it increases the flexibility to the affected population by extending the time in which vessel owners must notify the Coast Guard of any changes to their COD.
No new qualitative benefits will occur to Government by amending §?67.113(e), which extends the reporting period by which vessel owners must notify the NVDC when information submitted for the issuance of a COD changes, from 10 to 30 days.
Alternatives
Alternative (1). The Coast Guard takes no action. The Coast Guard considered not updating 46 CFR part 67. However, since July 1 of 2022, NVDC has accepted electronic means of submission of build evidence. Therefore, taking no action implies preserving the mismatch between regulations and the NVDC's current procedures. This would cause confusion among the regulated public.
Alternative (2). The Coast Guard considered requiring paper submission via mail delivery for vessel owners to obtain a COD and other documents. This alternative would have reverted the NVDC to a previous practice of receiving and issuing documents through mail submission. This alternative was rejected because it was more expensive and less convenient than electronic submission, for both the NVDC and vessel owners. The time required for mailing submissions and documents, in addition to the expense of postage and added wages for personnel to process the forms, made this a less desirable alternative.
Alternative (3). The Coast Guard considered creating a web portal on the NVDC website, to allow vessel owners to submit documents directly into a database. This would save time over electronic submission via email. However, a web portal must be built by C5I, the command organization that controls NVDC resources, and they currently do not have the means to create a web portal for document submission. This alternative is, therefore, unfeasible.
B. Small Entities
[top] The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, 14 requires federal agencies to consider the potential impact on small entities when they issue a rule after being required to first publish a general NPRM. Under 5 U.S.C. 604(a), a regulatory flexibility analysis is not required for this final rule because, under 5 U.S.C. 553(b)(A) and (B), we are not required to publish
Footnotes:
14 ? https://www.govinfo.gov/content/pkg/USCODE-2022-title5/pdf/USCODE-2022-title5-partI-chap6-sec601.pdf (accessed December 10, 2024).
C. Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, we offer to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. The 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 no new or revised collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520. We estimate the time burden to submit paper versus electronic copies to be the same.
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 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.
It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled that all 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 Supreme Court's decision in United States v. Locke and Intertanko v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). This rule implements changes to the federal vessel documentation requirements of 46 U.S.C. chapter 121, over which Congress clearly has granted the Coast Guard, via delegation from the Secretary, exclusive authority. Therefore, because the States may not regulate within these categories, this rule is consistent with the fundamental federalism principles and preemption requirements 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.
F. Administrative Procedure Act
The Coast Guard believes that this rule should be exempt from notice and comment rulemaking requirements as a rule of procedure under 5 U.S.C. 553(b)(A) and for good cause under 5 U.S.C. 553(b)(B).
Rules are procedural if they are "primarily directed toward improving the efficient and effective operations of an agency." Mendoza v. Perez, 754 F.3d 1002, 1023 (D.C. Cir. 2014) (quoting Batterton v. Marshall, 648 F.2d 694, 702 n.34 (D.C.C. 1980). The purpose of the exception is "to ensure that agencies retain latitude in organizing their internal operations." Mendoza, 754 F.3d at 1023 (quoting Batterton, 648 F.2d at 707); accord Bowen, 834 F.2d at 1047. Moreover, "the critical feature of a rule that satisfies the so-called procedural exception is that it covers agency actions that do not themselves alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoints to the agency." James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 280 (D.C. Cir. 2000) (internal quotation marks omitted).
Here, because the rule modifies the procedures and means for the submission of files, the rule is primarily directed toward improving the efficient and effective operations of the submission process. See Mendoza, 754 F.3d at 1023. By expanding the electronic means by which parties may submit documentation, this rule conforms Coast Guard acceptance of documentation with the ways in which parties typically submit documentation. This expansion improves the efficiency of the document submission process for evidence of build and CODs. The other changes made by this rule-enabling customers to submit copies of original documents during the Initial COD application; removing the requirement to return paper CODs to the NVDC during the COD replacement, exchange, or deletion process; and increasing the time to report changes in information that a COD is based on, from 10 to 30 days-streamline the file submission process and enhance the Coast Guard's ability to comprehensively accept, track, store, and adjudicate vessel documentation. Additionally, these changes are mere housekeeping initiatives that codify the NVDC's current policies, procedures, and practices to align with OMB's policy to move federal agencies to an electronic environment. Finally, the rule in no way alters the substantive rights of parties. The rule does not affect the substantive standards by which the Coast Guard makes determinations or otherwise impact agency officials' discretion. The rule has no impact on the outcome of NVDC determinations to issue or not issue a vessel owner a COD. Indeed, the updated provisions increase access to the COD submission process by lessening submission requirements, maintaining the option to submit paper documentation, and merely codifying current practice and policy. In sum, the rule is exempt from notice-and-comment as a rule of procedure under 5 U.S.C. 553(b)(A).
[top] The Coast Guard also believes the good cause exception under 5 U.S.C. 553(b)(B) to notice-and-comment rulemaking applies. Section 553(b)(B) provides an exception from the notice and comment requirements when an agency finds, for good cause, that notice and comment are "impracticable, unnecessary, or contrary to the public interest." As explained above, the changes do not affect the rights or interests of regulated parties and indeed are less restrictive. Moreover, the rule merely updates the procedure for vessel owners to present information electronically while still maintaining paper and existing electronic means of submission. The replacement of the specific fax submission option with an open-ended electronic submission allowance is not only inconsequential but also conforms the submission process to modern modalities of document submission actually used by the public. Accordingly, because the changes made by the rule are insignificant in nature and impact, and
G. Unfunded Mandates
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 $100,000,000 (adjusted for inflation) or more in any one year. Although this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
H. Taking of Private Property
This rule will 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).
I. Civil Justice Reform
This 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.
J. Protection of Children
We have analyzed this rule under Executive Order 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.
K. Indian Tribal Governments
This rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments), because it 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.
L. Energy Effects
We have analyzed this 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 that order because it is not a "significant regulatory action" under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
M. Technical Standards and Incorporation by Reference
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 ( 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 final rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
N. Environment
We have analyzed this 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 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 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 rule is categorically excluded under paragraph A3 and L54 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev 1. Paragraph A3 pertains to "promulgation of rules of a strictly administrative or procedural nature;" and those that "interpret or amend an existing regulation without changing its environmental effect." Paragraph L54 pertains to regulations that are editorial or procedural. This rule updates 46 CFR part 67 to reflect the NVDC's current processes and capabilities, particularly regarding electronic files. The changes include removing the requirement for "original" documents provided for evidence of the facts of build. The rule eliminates references to specific electronic means of submission of documents, as NVDC systems can no longer accept physical faxes or electronic faxes. Finally, the rule harmonizes regulations on the length of time that a vessel owner has to report changes in information that a COD is based on, from 10 days to 30 days with statutory requirements.
List of Subjects in 46 CFR Part 67
Reporting and recordkeeping requirements, Vessels.
For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 67 as follows:
PART 67-DOCUMENTATION OF VESSELS
1. The authority citation is revised to read as follows:
Authority:
14 U.S.C. 664; 31 U.S.C. 9701; 42 U.S.C. 9118; 46 U.S.C. 2103, 2104, 2107, 12102, 12103, 12104, 12105, 12106, 12113, 12133, 12139; DHS Delegation 00170.1, Revision No. 01.4.
2. Amend §?67.99 by revising paragraph (a) introductory text to read as follows:
§?67.99 Evidence of build.
(a) Evidence of the facts of build may be a copy of either the original, completed form CG-1261 (Builder's Certification and First Transfer of Title), or other document containing the same information, executed by a person having personal knowledge of the facts of build because that person:
§?67.113 [Amended]
3. Amend §?67.113 in paragraph (e) by removing the number "10" and adding in its place the number "30".
4. Amend §?67.141 by revising paragraph (a) to read as follows:
§?67.141 Application procedure; all cases.
(a) Submit the following to the National Vessel Documentation Center:
(1) Application for Initial Issue, Exchange, or Replacement of Certificate of Documentation; or Redocumentation (form CG-1258);
(2) Title evidence, if applicable; and
(3) Mortgagee consent on form CG-4593, if applicable.
5. Amend §?67.167 by revising paragraph (a) to read as follows:
§?67.167 Requirement for exchange of Certificate of Documentation.
[top] (a) When application for exchange of the Certificate of Documentation is required upon the occurrence of one or more of the events described in paragraph (b), (c), or (d) of this section,
§?67.169 [Amended]
6. Amend §?67.169 by removing and reserving paragraph (b).
7. Amend §?67.171 by revising paragraph (b) to read as follows:
§?67.171 Deletion; requirement and procedure.
(b) Where a cause for deletion arises for any reason under paragraphs (a)(1) through (6) of this section, the owner must send to the National Vessel Documentation Center a statement setting forth the reason(s) deletion is required.
8. Revise §?67.209 to read as follows:
§?67.209 No original instrument requirement.
A copy of the original signed and acknowledged instrument must be presented. The copy may be delivered to the National Vessel Documentation Center or transmitted electronically in accordance with the procedures in §?67.218 of this part. Signatures may be affixed manually or digitally.
9. Revise §?67.218 to read as follows:
§?67.218 Optional electronic filing of applications and instruments.
(a) Any instrument identified as eligible for filing and recording under §?67.200 may be submitted using electronic filing. The method(s) or address(es) to be used for electronic filing may be obtained from the National Vessel Documentation Center's website. If the instrument submitted for filing pertains to a vessel that is not a currently documented vessel, a completed Application for Initial Issue, Exchange, or Replacement Certificate of Documentation, or Return to Documentation (form CG-1258) (or a letter application for deletion from documentation) must already be on file with the National Vessel Documentation Center or must be submitted electronically with the instrument being filed.
(b) If the filing of any instrument is terminated for any cause under §?67.217(a), the instrument will be returned to the submitter.
§?67.219 [Removed]
10. Remove §?67.219.
11. Revise §?67.321 to read as follows:
§?67.321 Requirement to report change of address of managing owner.
Upon the change of address of the managing owner of a documented vessel, the managing owner must report the change of address to the National Vessel Documentation Center within 30 days of its occurrence.
Dated: December 11, 2024.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Prevention Policy.
[FR Doc. 2024-29555 Filed 12-13-24; 8:45 am]
BILLING CODE 9110-04-P