
[Federal Register Volume 88, Number 248 (Thursday, December 28, 2023)]
[Rules and Regulations]
[Pages 89595-89608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28112]


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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: Final rule.

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SUMMARY: The Coast Guard is updating its user fees for seagoing towing 
vessels that are 300 gross tons or more and revising user fees for 
other inspected towing vessels. The Coast Guard is issuing these 
updates because it is required to establish and maintain a fair fee for 
its 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 final rule, 
owners and operators of vessels using the Alternate Compliance Program, 
Streamlined Inspection Program, or the Towing Safety Management System 
options will pay a lower fee than vessels that use the traditional 
Coast Guard inspection option.

DATES: This final rule is effective March 27, 2024.

ADDRESSES: To view documents mentioned in this preamble as being 
available in the docket, go to https://www.regulations.gov, type USCG-
2018-0538 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 Ms. Jennifer Hnatow, Coast Guard; telephone 202-372-1216, 
email [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble

I. Abbreviations
II. Basis and Purpose
    A. The Problem We Seek To Address
    B. Legal Authority To Address This Problem
    C. Recent Legislation
III. Background
    A. Origins of Annual Vessel Inspection Fees
    B. Current Fees for Towing Vessels Subject to 46 CFR Subchapters 
I and M
IV. Discussion of Comments and Changes
V. Discussion of the Rule
    A. Categories of Annual Fees
    B. Amending Annual Inspection Fees for Seagoing Towing Vessels 
Subject to 46 CFR Subchapter I
    C. Establishing Specific Annual Inspection Fees for Towing 
Vessels Subject to 46 CFR 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
    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. Abbreviations

ACP Alternate Compliance Program
CAA 2022 Consolidated Appropriations Act of 2022
CGAA 2018 Frank LoBiondo Coast Guard Authorization Act of 2018
CG-CVC Office of Commercial Vessel Compliance
COI Certificate of Inspection
DAPI Drug and Alcohol Program Inspector
DHS Department of Homeland Security
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
FTE Full-Time Equivalent
ICR Information Collection Request
IRFA Initial Regulatory Flexibility Analysis
MISLE Marine Information for Safety and Law Enforcement
MTSA Maritime Transportation Security Act
NAICS North American Industry Classification System
NPRM Notice of proposed rulemaking
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
TVNCOE Towing Vessel National Center of Expertise
U.S.C. United States Code

II. 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 final rule, and the recent legislation that provides 
additional authority for this rulemaking.

A. The Problem We Seek To Address

    On June 20, 2016, the Coast Guard published a final rule titled 
``Inspection of Towing Vessels'' (81 FR 40003), in which we stated our 
plan to begin a rulemaking for annual inspection fees for towing 
vessels. The updated annual inspection fees in this final rule reflect 
the program's costs for two options for towing vessels to document 
compliance for obtaining a Certificate of Inspection (COI): \1\ the 
Coast Guard option and the Towing Safety Management System (TSMS) 
option.\2\ As indicated in the 2016 final rule, the existing default 
fee of $1,030 was identified as the annual inspection fee for towing 
vessels subject to 46 CFR subchapter M until new rates were 
established. The existing fee of $1,030 is found in 46 CFR 2.10-101 and 
applies to any inspected vessel not listed in table 2.10-101.\3\
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    \1\ See 46 CFR 136.130--Options for documenting compliance to 
obtain a Certificate of Inspection.
    \2\ The TSMS option 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 
part 138--Towing Safety Management System (TSMS).
    \3\ See 81 FR 40005. We discuss a recent statutory exception for 
TSMS-option vessels below.
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    In addition to towing vessels subject to subchapter M that are 
required to obtain COIs, towing vessels that qualify as seagoing motor 
vessels (300 gross tons or more) are required to have COIs under 
regulations in 46 CFR, chapter I,

[[Page 89596]]

subchapter I for cargo and miscellaneous vessels.\4\ The Coast Guard 
set the annual inspection fee for these towing vessels at $2,915 in 
1995, and this figure has never been updated.\5\
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    \4\ 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.
    \5\ See 60 FR 13550, March 13, 1995; 46 CFR 2.10-101.
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    On January 11, 2022, we published a notice of proposed rulemaking 
(NPRM) entitled ``User Fees for Inspected Towing Vessels'' (87 FR 
1378). Having considered comments submitted in response to that NPRM, 
we are issuing this final rule to update inspection fees for subchapter 
M and I towing vessels.

B. Legal Authority To Address This Problem

    The Coast Guard is issuing this final rule based on authority in 
Section 2110 of Title 46 of the United States Code (U.S.C.) (46 U.S.C. 
2110), which has been delegated to the Commandant under Department of 
Homeland Security (DHS) Delegation No. 00170.1(II)(92), Revision 01.3. 
These provisions direct the Coast Guard to establish a fee or charge 
for inspections and related services described in 46 U.S.C. 2110(a)(1). 
Under the law, the Coast Guard is required to establish a fee for its 
inspection services that is fair and based on costs to the Government, 
the value to the recipient, and public interest. The law also requires 
that we review the costs of inspecting towing vessels for the 
Government using the Coast Guard option or a third-party option, and 
revise such fees if there is a difference.

C. Recent Legislation

    On December 4, 2018, Congress enacted the Frank LoBiondo Coast 
Guard Authorization Act of 2018 (CGAA 2018).\6\ Section 815 of the CGAA 
2018 directs the Coast Guard to review and revise the fees for towing 
vessel inspections. First, the Coast Guard must compare the costs to 
the Government for towing vessel inspections performed by the Coast 
Guard and towing vessel inspections performed by a third party to 
determine if the costs are different. The Coast Guard interprets 
``costs to the Government'' in Section 815(a) to mean the cost to the 
Coast Guard for providing inspection and related services to determine 
whether a vessel meets requirements to maintain its COI. If there is a 
difference in costs, Section 815 of the CGAA 2018 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. 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 for those that do not and will revise the 
fees for these inspections as a result.
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    \6\ Public Law 115-282, 132 Stat. 4192.
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    On March 15, 2022, Congress enacted the Consolidated Appropriations 
Act of 2022 (CAA 2022).\7\ Section 231 of the CAA 2022 prohibits the 
Coast Guard from charging inspection user fees for towing vessels using 
the TSMS option until the requirements of Section 815 of the CGAA 2018 
are met.\8\ Thus, the intent of this final rule is to meet those 
requirements of Section 815 of the CGAA 2018 by updating its inspection 
fees for its Alternate Compliance Program (ACP), Streamlined Inspection 
Program (SIP), and the TSMS option. Until the Coast Guard implements 
this final rule and updates to the inspection fees become effective, 
our agency will not charge TSMS option towing vessels an inspection 
user fee.
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    \7\ Public Law 117-103, 136 Stat. 325.
    \8\ See Sec. 231 of CAA 2020, Public Law 117-103, 136 Stat. 325.
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III. Background

A. Origins of Annual Vessel Inspection Fees

    The provisions of 46 U.S.C. 2110 require 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.'' \9\ 
The fees in that final rule were intended to recover the costs 
associated with providing Coast Guard vessel inspection services 
directly or through an alternative reinspection program, although the 
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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    \9\ 60 FR 13550.
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    On June 20, 2016, the Coast Guard published the ``Inspection of 
Towing Vessels'' final rule, in which we indicated that, in a 
subsequent rulemaking, we would establish specific fees 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 46 CFR 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.\10\
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    \10\ See 81 FR at 40005.
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B. Current Fees for Towing Vessels Subject to 46 CFR Subchapters I and 
M

    With the noted exception of towing vessels using the TSMS-option, 
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 46 CFR 2.10-101.\11\ The current fee for seagoing towing vessels 
inspected under subchapter I is $2,915 for all inspection options--the 
Coast Guard, the ACP, and the SIP. The current fee for towing vessels 
inspected under all inspection options under 46 CFR subchapter M is 
$1,030, which is the fee for ``[a]ny vessel not listed in this table.'' 
As stated above, TSMS fees are not currently being charged, and will 
not be charged until this final rule is published.
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    \11\ Under 46 CFR 2.01-6(b), foreign vessels from countries 
which are nonsignatory 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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IV. Discussion of Comments and Changes

    In response to the NPRM we published January 11, 2022, we received 
13 written submissions (plus one duplicate) to our docket. In total, 
there are 35 comments in response to the proposed rule. These written 
submissions are available in the public docket for this rulemaking, 
where indicated under ADDRESSES or use the direct link https://www.regulations.gov/docket/USCG-2018-0538. The Coast Guard appreciates 
the comments from the public, as these insights continue to inform 
Coast Guard actions and programs. Below we summarize the comments and 
our responses.
    The Coast Guard received a number of comments about the proposed 
fees. Some commenters stated that the proposed fees provided no 
incentive for choosing the TSMS option, and that the TSMS user fee was 
unfair due to the third-party costs associated with that option. Some 
commenters said that the TSMS option offers increased safety, which 
actually reduces the Coast Guard burden, so this should lead to lower 
fees. Several commenters requested that the Coast Guard option user fee 
remain $1,030. One commenter recommended a

[[Page 89597]]

reduction of the user fees for both TSMS option vessels and Coast Guard 
option vessels.
    After considering these comments, we retain the user fees proposed 
in the NPRM for this final rule. Our reasons are as follows. The law 
requires the Coast Guard to establish a fee for its inspection services 
and the fees must be fair and based on the costs to the Government, 
value to the recipient, and public interest. See 31 U.S.C. 9701. In 
addition, Section 815 of the CGAA 2018 requires the Coast Guard to 
review the costs to the Government of Coast Guard and third-party 
inspections for towing vessels. If there is a difference in the costs 
to the Government, we must revise the annual inspection fees set by the 
Coast Guard for towing vessels. To revise the fees, we must comply with 
the same fee-establishing requirements in 31 U.S.C. 9701. The user fee 
amounts we set are based on the direct and indirect costs for the Coast 
Guard to perform specific vessel inspection activities. The ``Cost 
Study to Determine User Fees for Inspected Towing Vessels,'' available 
in the docket where indicated under the ADDRESSES section of this 
preamble, explains in detail how we determine direct and indirect costs 
and calculate user fees. In developing the Cost Study, Coast Guard 
program, budget, and field offices \12\ specified the cost model 
elements, provided the data sources, and validated the methodology used 
to determine towing vessel user fees, as well as the study results.
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    \12\ Coast Guard offices and units involved in the Cost Study 
development include the--Office of Commercial Vessel Compliance (CG-
CVC), Office of Standards Evaluation and Development (CG-REG), 
Office of Resource Management (CG-83) (formerly CG-DCO-83), Office 
of Shore Forces (CG-741), Towing Vessel National Center of Expertise 
(TVNCOE), Finance Center (FINCEN) and Marine Safety Unit Paducah, 
Kentucky.
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    Furthermore, the user fees vary because the frequency of 
inspections and the times for inspection activities vary based on 
vessel class and inspection option. Selecting the TSMS or Coast Guard 
inspection option is a business decision by the vessel owner or 
operator.
    Currently, owners and operators of about 70 percent of subchapter M 
inspected towing vessels with a COI have chosen the TSMS option while 
30 percent of COIs for subchapter M inspected towing vessels are issued 
under the traditional Coast Guard option. This number has not 
substantially changed since the implementation of the 2016 ``Inspection 
of Towing Vessels'' final rule and the first COIs were issued in 2017. 
The user fees for the TSMS option account for the cost to the 
Government to provide inspections services for this vessel class and 
inspection option. A vessel owner or operator who selects the TSMS 
option is making a business decision that should account for the cost 
to contract with a third-party organization. For these reasons, there 
are no changes to the final rule in response to the comments on the 
proposed fees.
    Several commenters stated that the Cost Study is flawed. We 
received comments indicating that the fees are duplicative, excessive, 
do not accurately reflect the Coast Guard workload, and do not 
represent the commenters' observed experience.
    The Coast Guard disagrees. The fees we proposed for the Coast Guard 
option and TSMS option accurately estimate the cost to the Government 
to provide our inspection services. The Cost Study explains how we 
determine direct and indirect costs. We derive the user fee from the 
cost to the Coast Guard to perform a specific set of vessel inspection 
activities. The time it takes to perform any specific inspection 
activity includes more than just the observed time or ``boots on deck'' 
time on a vessel. A typical inspection involves pre-inspection 
activities (for example, identifying vessel type, safety requirements, 
and vessel history), in-person assessment activities (for example, 
verifying the integrity of vessel's hull and presence of appropriate 
safety equipment, and assessing proper operation of electrical and 
mechanical equipment), and follow-up activities (for example, reporting 
identified deficiencies, updating vessel data into the Coast Guard's 
Coast Guard's Marine Information for Safety and Law Enforcement (MISLE) 
system, and verifying deficiency rectification).
    The Coast Guard periodically validates the duration of these vessel 
inspection activity times. Concurrent inspection activities are 
allocated less time than the primary inspection activities because 
concurrent inspection activities are conducted together. Additionally, 
unlike primary inspection activities, concurrent inspection activities 
are not allocated travel time credit. Because the time for primary 
inspection activities is recorded and allocated differently from 
concurrent inspection activities, such concurrent inspection charges 
are not redundant. For these reasons, the Coast Guard is maintaining 
its reliance on the Cost Study in this area. As such, there is no 
change to this final rule based on these comments.
    One commenter stated that the Coast Guard has not yet determined 
the time and resources necessary for the COI renewal process.
    The Coast Guard disagrees. As stated above, the Cost Study explains 
how we determine direct and indirect costs. The fees we proposed for 
the Coast Guard option and TSMS option accurately estimate the cost to 
the Government to provide our inspection services. For this reason, we 
have made no changes from the proposed rule in response to this 
comment.
    Several commenters stated that the proposed fees impose a financial 
hardship or burden on small business due to the state of the economy, 
and that the Coast Guard should defer imposition of fees until we study 
the costs further.
    In accordance with 46 U.S.C. 2110, the Coast Guard is required to 
establish a fee for its inspection services that is fair and based on 
the costs to the Government, value to the recipient, and public 
interest. The proposed user fees were developed in accordance with law, 
and further delay or study is unnecessary. For this reason, we have 
made no changes from the proposed rule in response to these comments.
    One commenter stated that in not applying the inflation factor, the 
proposed fees result in a significant increase in annual Government 
revenues from user fees. The commenter said that for the TSMS option, 
the current user fee of $1,030 should be increased by the inflation 
factor of 1.58, and then divided by 5 to account for the 5-year period 
between inspections and adjusted for the minimal periods of oversight.
    The Coast Guard disagrees. We did not adjust the user fee for 
towing vessels by an inflation factor since the previous user fee was 
not specific to subchapter M towing vessels and did not reflect the 
costs to the Coast Guard for performing inspections on towing vessels. 
The user fee of $1,030 in Table 2.10-101 is for inspections on ``[a]ny 
inspected vessel not listed in this table.'' The TSMS option user fee 
in this rule is based on the costs to the Government to provide 
inspection services. For these reasons, we have made no changes from 
the proposed rule in response to this comment.
    One commenter stated that an inspection visit resulted in lost 
revenue from a potential barge move.
    Lost revenue due to inspections is not within the scope of this 
rulemaking. In 2004, Congress determined that towing vessels are to be 
subject to inspection, resulting in the 2016 ``Inspection of Towing 
Vessels'' final rule. The costs, including lost revenue, were 
considered in that rulemaking and its accompanying regulatory analysis. 
For

[[Page 89598]]

this reason, we have made no changes from the proposed rule in response 
to this comment.
    A commenter stated that this rule fails to acknowledge those towing 
vessels on any water that are more than 15 gross tons and carrying 
cargo for hire. The commenter said those vessels would also fall under 
subchapter I and they should be addressed in this rulemaking.
    The Coast Guard disagrees. Every request for inspection submitted 
is reviewed on a case-by-case basis. Per 46 CFR 2.01-7, Table 2.01-
7(a), a vessel inspected under subchapter I includes ``[a]ll vessels 
>15 gross tons carrying freight-for-hire[.]'' However, any vessel that 
is (1) more than 15 gross tons but less than 300 gross tons and (2) 
towing and also carrying cargo for hire on board the vessel separate 
from the tow, would be considered for a multi-service vessel 
certification. A vessel certificated for more than one service is 
already covered under 46 CFR 2.10-101. The owner or operator of the 
vessel must pay only the higher of the two applicable fees. For this 
reason, we have made no changes from the proposed rule in response to 
this comment.
    Another commenter stated that audits by Drug and Alcohol Program 
Inspectors (DAPI) and Maritime Transportation Security Act (MTSA) 
verifications should be removed from the Cost Study because they are 
not derived from the requirements of subchapter M.
    The Coast Guard disagrees. The Coast Guard included DAPI audits (46 
CFR 16.401) and MTSA verifications (46 CFR 140.660) in the Cost Study 
because compliance with these requirements must be met prior to the 
Coast Guard issuing a COI, regardless of the vessel inspection option 
chosen. For this reason, we have made no changes from the proposed rule 
in response to this comment.
    One commenter stated that two categories of indirect costs are not 
appropriate in an assessment of agency costs to provide towing vessel 
inspection services: (1) policy and oversight costs, and (2) facility 
overhead and support costs. The commenter further stated that the 
operating and personnel costs of billets for staff at the Towing Vessel 
National Center of Expertise (TVNCOE) and Coast Guard District, Area, 
and Headquarters predate the publication and implementation of 
subchapter M. The commenter also stated that they were unaware of any 
new facilities or Coast Guard units that have been created for the 
purpose of providing towing vessel inspection services or, more 
broadly, implementing and enforcing subchapter M. The commenter 
recommended eliminating the policy and oversight costs, and facility 
overhead and support costs.
    The Coast Guard disagrees. Policy and oversight activities are an 
essential element to ensure consistent application of nationwide towing 
vessel inspection requirements. Facility overhead and support costs are 
included to fairly account for the cost to the Government to provide 
inspection services. Historically, operating and overhead costs have 
been included in vessel inspection user fees, as well as other Coast 
Guard user fees such as merchant mariner credentialing and vessel 
documentation. For these reasons, we have made no changes from the 
proposed rule in response to this comment.

V. Discussion of the Rule

    This final rule updates existing annual inspection fees for both 
seagoing towing vessels (300 gross tons or more) and vessels subject to 
the towing-vessel regulations in 46 CFR, subchapter M issued in 2016.
    The annual inspection fees are located in 46 CFR part 2--Vessel 
Inspections. In addition to the fees in Sec.  2.10-101, this part 
contains definitions in Sec.  2.10-25. We are adding the following new 
defined terms to Sec.  2.10-25:
     Alternate Compliance Program option;
     Annual vessel inspection fee;
     Coast Guard option;
     Streamlined Inspection Program option;
     Towing Safety Management System option; and
     Towing vessel.
    We 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 define in revised 
Sec.  2.10-25 by referencing 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 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 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.
    We are also modifying the definition of an existing term in Sec.  
2.10-25, Sea-going towing vessel. We are removing the modifier 
``seagoing'' from the definition itself and inserting a description of 
what seagoing means. The inserted description is ``and that makes 
voyages beyond the Boundary Line as defined by 46 U.S.C. 103.'' \13\ 
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 also remove the hyphen from seagoing.
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    \13\ 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 46 CFR subchapter M, we added two 
categories of fees: the Coast Guard option and the TSMS option. For 
seagoing towing vessels subject to 46 CFR subchapter I, we develop 
three fee categories: the Coast Guard option, the ACP option, and the 
SIP option. This fee structure helps to ensure the Coast Guard is able 
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.

B. Amending Annual Inspection Fees for Seagoing Towing Vessels Subject 
to 46 CFR Subchapter I

    We will be charging 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 previous annual fee for seagoing towing vessels that are 
inspected under subchapter I was $2,915.
    For a detailed discussion of how these fees were derived, see 
Methodology for

[[Page 89599]]

Calculating Fees in section V.D of this preamble.

C. Establishing Specific Annual Inspection Fees for Towing Vessels 
Subject to 46 CFR Subchapter M

    We will also be charging 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 previous annual fee applied to subchapter M towing vessels was 
$1,030.
    For a more detailed discussion of how these fees were derived, see 
Methodology for Calculating Fees in section V.D of this preamble.

D. Methodology for Calculating Fees

    This section summarizes the methodology for calculating fees. For 
more details, see the Cost Study \14\ in the docket where indicated 
under the ADDRESSES section of this preamble.
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    \14\ The Cost Study is the same one referenced in the NPRM and 
has not been changed.
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    To derive the costs of the various inspection types, we used an 
activity-based costing \15\ 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.\16\ 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 Spring 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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    \15\ Activity-based costing is a method for determining the cost 
of a service based on the cost of each individual element of that 
service.
    \16\ Shore Forces units are Coast Guard sector commands and 
their subunits or field units. See the Coast Guard Strategic Cost 
Manual, COMDTINST M7000.4 (February 2005), which is available in the 
docket.
    \17\ Indirect Costs are costs such as facility and overhead 
costs as well as IT costs, since these costs are fixed regardless of 
inspection type, the costs were divided by the vessel population as 
of the Cost Study.

                                  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 *........................................           $1,182             $407           $1,617             $873           $1,213
Travel Costs.......................................................              317               40              356              356              356
Supervision and Administration Costs...............................              243               84              332              179              249
Indirect Costs \17\................................................              442              442              442              442              442
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    Total Annual Costs.............................................            2,184              973            2,747            1,850            2,260
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* Due to a rounding error in the NPRM, Inspection Activity Costs were overstated by $1 for four of the inspection types. This does not impact the final
  user fees.

    The Coast Guard intends to collect one of five different user fees 
from the approximately 4,762 towing vessels that require COIs under 
subchapters I and M.\18\ Table 2 shows the fee charged before the CAA 
2022 went into effect, the CAA 2022 fee, the final rule fee, the 
incremental fee adjustment from the CAA 2022 fee, and the percent 
change to the user fee from the CAA 2022 fee.\19\ The annual cost of 
services for each vessel class is the final rule user fee for that 
vessel class.
---------------------------------------------------------------------------

    \18\ Vessel population data came from MISLE as of 2023. See the 
Affected Population section for more details.
    \19\ The NPRM for this rule was published prior to the CAA 2022, 
thus the NPRM refers to the ``Current Fee.'' The ``Current Fee'' of 
the NPRM is now labeled as the ``Pre-CAA 2022 Fee'' to avoid 
confusion.

     Table 2--Pre-CAA 2022, CAA 2022 Subchapter M and I User Fees and Final Rule User Fee Adjustment Amounts
----------------------------------------------------------------------------------------------------------------
                                                                                           Incremental   Percent
                Fee type/user fee class                   Pre-CAA    CAA 2022    Final         fee       change
                                                          2022 fee     fee      Rule fee   adjustment      (%)
----------------------------------------------------------------------------------------------------------------
Subchapter M: Coast Guard option.......................     $1,030     $1,030     $2,184        $1,154       112
Subchapter M: TSMS option..............................      1,030          0        973           973  ........
Subchapter I: Coast Guard option.......................      2,915      2,915      2,747          -168        -6
Subchapter I: ACP option...............................      2,915      2,915      1,850        -1,065       -37
Subchapter I: SIP option...............................      2,915      2,915      2,260          -655       -22
----------------------------------------------------------------------------------------------------------------

VI. Regulatory Analyses

    We developed this final 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

[[Page 89600]]

equity). Executive Order 13563 emphasizes the importance of quantifying 
costs and benefits, of reducing costs, of harmonizing rules, and of 
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. This rule has not 
been reviewed by OMB. A regulatory analysis follows.
Changes From the Notice of Proposed Rulemaking
    This final rule's regulatory analysis has made two changes from the 
NPRM we published in 2022 (87 FR 1378), but the user fees are not 
changed from the NPRM's rates. First, we updated the populations to 
reflect current data from MISLE; the subchapter M population decreased 
while the subchapter I population remained relatively stable.
    Second, the baseline for TSMS fees under subchapter M decreased 
from $1,030 to $0. This is because the CAA 2022 directed the Coast 
Guard not to charge user fees to TSMS vessels under subchapter M until 
it follows the steps in Section 815 of the CGAA 2018, and based on its 
findings reported above, revises its fees. This rule will revise those 
fees effective March 27, 2024.
Baselines
    Currently, towing vessels are inspected under subchapter I or 
subchapter M, dependent on their size and area of operation. Owners and 
operators of towing vessels inspected under 46 CFR subchapter I pay a 
user fee of $2,915 annually. Owners and operators of towing vessels 
under 46 CFR subchapter M that choose to be inspected by the Coast 
Guard pay a user fee of $1,030 annually. Owners and operators of towing 
vessels under subchapter M that choose the TSMS option do not pay a 
user fee because of the CAA 2022. However, as noted earlier, 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. Prior to the CAA 2022 owners and operators of towing vessels 
under subchapter M that choose the TSMS option paid a user fee of 
$1,030 annually.
    Under the current CAA 2022 baseline, we calculate that owners and 
operators of 43 towing vessels inspected under subchapter I pay 
$125,345 annually, and that owners and operators of 4,719 towing 
vessels inspected under subchapter M pay $1,458,480 annually for 
inspection services, respectively. Thus, the current transfer from 
vessel owners to the Coast Guard for towing vessel inspection services 
is $1,583,825 annually. Prior to the CAA 2022, when the TSMS user fee 
was not suspended, owners and operators of all subchapter M towing 
vessels (TSMS option and Coast Guard option) paid the $1,030 user fee. 
This would have resulted in an annual transfer from subchapter M and I 
vessel owners and operators to the Coast Guard for towing vessel 
inspection services of $4,985,915. Owners and operators of 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. The Coast Guard's COI service costs are 
fully funded through annual appropriations.\20\
---------------------------------------------------------------------------

    \20\ 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).
---------------------------------------------------------------------------

    This final rule establishes a user fee specific to towing vessels 
under subchapter M, revises the user fee specific to towing vessels 
under subchapter I, and establishes user fees for alternatives for 
vessel inspection that require fewer Coast Guard inspection activities 
or that take less time and thus have a lower cost to the Coast Guard. 
This updated structure for user fees 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. From a 
baseline of the CAA 2022, this final rule results in an estimated $4.8 
million annual transfer payment from owners and operators of towing 
vessels to the Federal Government for COI services. The 10-year 
transfers, undiscounted, are $49,320,822. The discounted annualized 
figure, at 7 percent, is $4,918,994. The discounted annualized figure, 
at 3 percent, is $4,926,329.
    The Coast Guard also does the following in this final rule:
    (1) Modifies the definition in Sec.  2.10-25 of Sea-going towing 
vessel. We remove the modifier ``seagoing'' from the definition and 
replace it with a description of what ``seagoing'' means. The updated 
language is ``and that makes voyages beyond the Boundary Line as 
defined by 46 U.S.C. 103.'' Also, we 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) Amends the user fees for towing vessels under 46 CFR subchapter 
I. The current fee for the 43 seagoing towing vessels inspected under 
subchapter I is $2,915 for all inspection options (Coast Guard, ACP, 
and SIP). This final rule makes the fees specific to each inspection as 
shown below in table 3. Owners and operators of vessels have already 
chosen their inspection option and are unlikely to change their current 
option. This is because there are costs associated with switching 
inspection options and there are transactions in private industry and 
business-specific costs \21\ beyond the inspection cost that make the 
user fee a small portion of the overall cost of inspections.
---------------------------------------------------------------------------

    \21\ Transaction costs vary by inspection option. Towing vessels 
that elect to participate in the ACP must comply with the 
requirements in 46 CFR part 8 subpart D, that includes working with 
an ACP authorized classification society. Towing vessels that elect 
to participate in the SIP must comply with the requirements in 46 
CFR part 8 subpart E, that includes the development of a Company 
Action Plan and a Vessel Action Plan.

  Table 3--Current and Final Rule User Fees for Towing Vessels Under 46
                            CFR Subchapter I
------------------------------------------------------------------------
                                                     Current    Revised
                  Inspection type                      fee        fee
------------------------------------------------------------------------
Coast Guard option................................     $2,915     $2,747
ACP option........................................                 1,850
SIP option........................................                 2,260
------------------------------------------------------------------------

    (3) Creates a specific user fee category for the 4,719 towing 
vessels subject to 46 CFR subchapter in the table of fees in Sec.  
2.10-101 and updates 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 Coast Guard inspection option's current annual 
fee is $1,030 for towing vessels subject to subchapter M. The existing 
fee of $1,030 is found in 46 CFR 2.10-101 and applies to any inspected 
vessel not listed in table 2.10-101. Owners and operators of subchapter 
M vessels that choose the TSMS inspection option do not currently pay a 
user fee. This final rule makes the fees specific to each inspection 
type as shown below in table 4. Similar to owners and operators of 
subchapter I vessels, owners and operators of subchapter M vessels have 
already chosen their inspection option and are unlikely to change for 
the same reasons.

[[Page 89601]]



     Table 4--Current and Revised User Fees for Towing Vessels Under
                              Subchapter M
------------------------------------------------------------------------
                                                     Current    Revised
                  Inspection type                      fee        fee
------------------------------------------------------------------------
Coast Guard option................................     $1,030     $2,184
TSMS option.......................................          0        973
------------------------------------------------------------------------

    (4) Defines the following new terms 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 these 
points are described in greater detail in the Cost Study.
Affected Population
    To obtain the affected population for this final rule, we used the 
MISLE system. MISLE is the Coast Guard's vessel and marine activity 
database and contains the best and most readily available vessel 
population data. According to MISLE data as of 2023, the total affected 
population of this final rule is 4,762 inspected towing vessels. There 
are approximately 4,719 towing vessels that will require inspection 
under 46 CFR subchapter M and 43 towing vessels that are inspected 
under 46 CFR subchapter I. Coast Guard subject matter experts in the 
Office of Commercial Vessel Compliance (CG-CVC) estimate that the 
subchapter M population will increase by an average of 23 vessels per 
year because a number of subchapter M vessels began the inspection 
process to obtain a COI during the 4-year phase-in period but did not 
complete the process. The Coast Guard believes that, over time, these 
vessels will obtain new COIs; thus, the subchapter M population will 
increase. 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 creating 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 impacted by this final rule and the current 
breakdown of inspections within each subchapter. 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 their current split of 70 percent using the 
TSMS option and 30 percent using the Coast Guard option during the 
duration of the analysis.

                         Table 5--Total Affected Population for Inspected Towing Vessels
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                         User Fee Categories Population
----------------------------------------------------------------------------------------------------------------
46 CFR Subchapter M                                            Coast Guard        TSMS option              Total
                                                                    option
                                                        --------------------------------------------------------
Population.............................................              1,416              3,303              4,719
% of Population                                                        30%                70%               100%
----------------------------------------------------------------------------------------------------------------


 
 
----------------------------------------------------------------------------------------------------------------
46 CFR Subchapter I.................        Coast Guard                                                    Total
                                                 option     Vessel Inspection Alternatives
----------------------------------------------------------------------------------------------------------------
                                                                 Alternate        Streamlined
                                                                Compliance         Inspection
                                                             Program (ACP)      Program (SIP)
                                                                    option             option
----------------------------------------------------------------------------------------------------------------
Population..........................                 26                 16                  1                 43
% of Population.....................                61%                37%                 2%               100%
                                     ---------------------------------------------------------------------------
    Total Population................  .................  .................  .................              4,762


     Table 6--Projected Subchapter M Population by Inspection Option
------------------------------------------------------------------------
       Estimated annual subchapter M population by inspection type
-------------------------------------------------------------------------
                  Year                       CG option      TSMS option
------------------------------------------------------------------------
Year 1..................................           1,416           3,303
Year 2..................................           1,423           3,319
Year 3..................................           1,429           3,336
Year 4..................................           1,436           3,352
Year 5..................................           1,443           3,368
Year 6..................................           1,450           3,384
Year 7..................................           1,457           3,400
Year 8..................................           1,464           3,416
Year 9..................................           1,471           3,432
Year 10.................................           1,478           3,448
------------------------------------------------------------------------

Costs and Benefits

    This final rule does not impose any new societal costs because all 
the inspection activities are done by regulated entities and the Coast 
Guard. Instead, the impacts of this final rule are in the form of 
transfer payments, which are monetary payments from one group to 
another that do not affect the total resources available to society.
    This final rule does not provide any quantitative benefits; 
however, revising

[[Page 89602]]

user fees to reflect the actual cost for the Coast Guard to provide 
inspection services is a qualitative benefit. The result is a fairer 
distribution of costs to inspected towing vessels by inspection type. 
Section 2110 of Title 46 of the U.S.C. 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 the fee or 
charge to be adjusted to accommodate changes in the cost of providing a 
specific service or thing of value. This final rule aids the Coast 
Guard in compliance with those statutory requirements.
Transfer Payments
    This final rule adjusts the user fees collected from the current 
entities so that there are now five different fees based on the towing 
vessel subchapter and program used for vessel certification. There 
currently are 4,762 affected towing vessels. Table 7 shows the pre-CAA 
2022 baseline fee, CAA 2022 baseline fee, the final rule fee, the 
change, and the percent change to the user fee from the pre-CAA 2022 
and CAA 2022 baseline fees. The annual cost of services for each vessel 
class is the user fee for that vessel class.

      Table 7--Pre-CAA 2022 Baseline Fee, CAA 2022 Baseline Fee, for 46 CFR Subchapter M and I User Fees and Final Rule User Fee Adjustment Amounts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Incremental
                                                           Pre-CAA    CAA 2022                     fee           Percent       Incremental     Percent
                 Fee type/user fee class                     2022     baseline   Final rule    adjustment      change from   fee adjustment     change
                                                           baseline     fee         fee       from pre- CAA   pre-CAA  2022      from CAA      from CAA
                                                             fee                                  2022                            2022           2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subchapter M: Coast Guard option........................     $1,030     $1,030       $2,184          $1,154            112%          $1,154         112%
Subchapter M: TSMS option...............................      1,030          0          973             -57             -6%             973  ...........
Subchapter I: Coast Guard option........................      2,915      2,915        2,747            -168             -6%            -168          -6%
Subchapter I: ACP option................................      2,915      2,915        1,850          -1,065            -37%          -1,065         -37%
Subchapter I: SIP option................................      2,915      2,915        2,260            -655            -22%            -655         -22%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Since there are no distinct categories for TSMS, SIP, or ACP in the current user fee table, all owners and operators of subchapter M vessels would
  normally pay one fee and all owners and operators of subchapter I vessels pay one fee.

    In table 8, we show the total increase in annual transfer payments 
from each vessel class to the Government and the total increase for all 
vessels. For example, owners and operators of subchapter M vessels that 
choose the Coast Guard option will pay an additional $1,154 per vessel 
in user fees to the Coast Guard for 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 final rule, a user fee is a transfer payment from 
the vessel's owner or operator to the Government to offset the costs to 
the Coast Guard for providing COI services. This is calculated by 
multiplying the vessel population by the incremental fee change. 
Because the population of 46 CFR subchapter M vessels is projected to 
increase, table 9 shows annual incremental transfer payments for this 
subchapter. Totals are calculated by multiplying the populations in 
table 6 by the appropriate fees.
---------------------------------------------------------------------------

    \22\ The incremental changes in transfers are from the specified 
baseline to the Final Rule user fee.
    \23\ The incremental changes in transfers are from the specified 
baseline to the Final Rule user fee.

                             Table 8--First Year Annual Incremental Fee Amounts \22\
----------------------------------------------------------------------------------------------------------------
                                                                    First year                    First year fee
                                                    Incremental    fee transfer     Incremental      transfer
     Fee type/user fee class         Estimated      fee change    payments  from    fee change     payments from
                                    population     from  pre-CAA    pre-CAA 2022   from CAA 2022     CAA 2022
                                                   2022 baseline     baseline        baseline        baseline
----------------------------------------------------------------------------------------------------------------
Subchapter M: Coast Guard option           1,416          $1,154      $1,634,064          $1,154      $1,634,064
Subchapter M: TSMS option.......           3,303             -57        -188,271             973       3,213,819
                                 -------------------------------------------------------------------------------
    Subtotal....................           4,719  ..............       1,445,793  ..............       4,847,883
                                 -------------------------------------------------------------------------------
Subchapter I: Coast Guard option              26            -168          -4,368            -168          -4,368
Subchapter I: ACP option........              16          -1,065         -17,040          -1,065         -17,040
Subchapter I: SIP option........               1            -655            -655            -655            -655
                                 -------------------------------------------------------------------------------
    Subtotal....................              43  ..............         -22,063  ..............         -22,063
                                 -------------------------------------------------------------------------------
        Annual Total............  ..............  ..............       1,423,730  ..............       4,825,820
----------------------------------------------------------------------------------------------------------------


                                             Table 9--Subchapter M Annual Incremental Transfer Payments \23\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Subchapter M                                    Subchapter M
                                                          CG option  Pre-  TSMS  option     total from    CG  option CAA   TSMS  option     total  from
                          Year                               CAA  2022     pre-CAA 2022    Pre-CAA  2022  2022  baseline     CAA 2022        CAA  2022
                                                             baseline        baseline        baseline                        baseline        baseline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 1..................................................      $1,634,064        -188,271      $1,445,793      $1,634,064      $3,213,819      $4,847,883
Year 2..................................................       1,642,142        -189,183       1,452,959       1,642,142       3,229,387       4,871,529
Year 3..................................................       1,649,066        -190,152       1,458,914       1,649,066       3,245,928       4,894,994
Year 4..................................................       1,657,144        -191,064       1,466,080       1,657,144       3,261,496       4,918,640
Year 5..................................................       1,665,222        -191,976       1,473,246       1,665,222       3,277,064       4,942,286

[[Page 89603]]

 
Year 6..................................................       1,673,300        -192,888       1,480,412       1,673,300       3,292,632       4,965,932
Year 7..................................................       1,681,378        -193,800       1,487,578       1,681,378       3,308,200       4,989,578
Year 8..................................................       1,689,456        -194,712       1,494,744       1,689,456       3,323,768       5,013,224
Year 9..................................................       1,697,534        -195,624       1,501,910       1,697,534       3,339,336       5,036,870
Year 10.................................................       1,705,612        -196,536       1,509,076       1,705,612       3,354,904       5,060,516
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The total transfer payments for subchapter M vessels rise annually due to an estimated annual increase in the population of 23 vessels.

    The reduction in fees for owners and operators of vessels under 46 
CFR subchapter I will result in a decrease in transfer payments in the 
first year from the subchapter I towing vessel industry to the 
Government of $22,063. Relative to the CAA 2022 baseline, the Coast 
Guard expects to have an increase in transfer payments from owners and 
operators of subchapter M towing vessels for the COI services of 
$4,847,883 in the first year to the Government. The net change in 
transfer payments is $4,825,820 in the first year. The 10-year transfer 
payments, undiscounted, total $49,320,822. The discounted annualized 
figure, at 7 percent, is $4,918,994.
    Relative to the Pre-CAA 2022 baseline, the Coast Guard expects to 
have an increase in transfer payments from owners and operators of 
subchapter M towing vessels for the COI services of $1,445,793 in the 
first year to the Government as shown in table 9. The sum of transfer 
payments for vessels under subchapter I and M is $1,423,730 in the 
first year from the subchapter I towing vessel industry to the 
Government since subchapter I user fees are decreasing. The total 10-
year change in transfer payments, undiscounted, is $14,550,082. The 
discounted annualized figure, at 7 percent, is $1,451,108. Table 10 
summarizes the total 10-year change in transfer payments from the 
towing vessel industry to the Government.

                                  Table 10--Discounted Transfer Payments From Towing Vessel Operators to the Government
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Pre-CAA 2022 baseline                             CAA 2022 baseline
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Discounted                                      Discounted
                          Year                             Undiscounted  --------------------------------  Undiscounted  -------------------------------
                                                                                7%              3%                              7%              3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................      $1,423,730      $1,330,589      $1,382,262      $4,825,820      $4,510,112      $4,685,262
2.......................................................       1,430,896       1,249,800        1348,757       4,849,466       4,235,711       4,571,087
3.......................................................       1,436,851       1,172,898       1,314,922       4,872,931       3,977,763       4,459,422
4.......................................................       1,444,017       1,101,634       1,282,990       4,896,577       3,735,575       4,350,545
5.......................................................       1,451,183       1,034,673       1,251,803       4,920,223       3,508,051       4,244,228
6.......................................................       1,458,349         971,760       1,221,344       4,943,869       3,294,309       4,140,412
7.......................................................       1,465,515         912,649       1,191,598       4,967,515       3,093,519       4,039,044
8.......................................................       1,472,681         857,114       1,162,548       4,991,161       2,904,901       3,940,069
9.......................................................       1,479,847         804,939       1,134,180       5,014,807       2,727,723       3,843,432
10......................................................       1,487,013         755,922       1,106,477       5,038,453       2,561,294       3,749,082
                                                         -----------------------------------------------------------------------------------------------
    Total *.............................................      14,550,082      10,191,977      12,396,882      49,320,822      34,548,958      42,022,583
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized..............................................  ..............       1,451,108       1,453,293  ..............       4,918,994       4,926,329
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Totals may not sum due to rounding.

Regulatory Alternatives
    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 adjusting the 
1995 user fees for inflation from 1995 dollars to 2022 dollars. To 
adjust for inflation, we use an inflation factor from the annual gross 
domestic product deflator data.\24\ We calculate the inflation factor 
of 1.76 by dividing the annual 2022 index number (117.996) by the 
annual 1995 index number (66.993). We then multiply the current fees 
for 46 CFR subchapters I and M by the inflation factor and round it to 
the nearest dollar. If we simply adjusted the user fees for inflation, 
the annual fees charged under subchapters I and M would increase 76 
percent, by $2,215 and $783, respectively. These fees, when multiplied 
by the number of annual COI renewals, would yield a total annual 
revenue of approximately $8.8 million and an increase in transfer 
payments of $3.8 million. We rejected this alternative because the 
annual revenue collected under this methodology would not reflect the 
full cost to the Coast Guard of providing the COI-related services. 
Table 11 shows the inflation adjusted user fees for subchapter I and M 
vessels.
---------------------------------------------------------------------------

    \24\ U.S. Bureau of Economic Analysis, ``Table 1.1.4. Price 
Indexes for Gross Domestic Product,'' https://apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&1910=x&0=-99&1921=survey&1903=4&1904=2009&1905=2018&1906=a&1911=0 (accessed 
December 1, 2023).

[[Page 89604]]



                                           Table 11--Comparison of User Fees in 1995 Dollars and 2022 Dollars
                                                                    [Alternative 1] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Annual fee    Annual revenue
                      Fee category                          1995 $    Inflation      2022     Population    Incremental      transfer     collected from
                                                             fee        factor     dollars                fee adjustment     payments        user fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subchapter I vessels....................................     $2,915         1.76     $5,130           43          $2,215         $95,245        $220,590
Subchapter M vessels....................................      1,030         1.76      1,813        4,719             783       3,694,977       8,555,547
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................  .........  ...........  .........  ...........  ..............       3,790,222       8,776,137
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: All dollar figures rounded to the closest whole dollar.

    In the 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 the CGAA 2018. Section 815 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 the CGAA 2018 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 \25\ 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.
---------------------------------------------------------------------------

    \25\ Per the CAA 2022, towing vessels using the TSMS option 
would continue to pay no annual inspection user fee.
---------------------------------------------------------------------------

B. Small Entities

    Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, we 
have considered the impact of this rule on small entities. The term 
``small entities'' comprises small businesses, not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    A Final Regulatory Flexibility Analysis (FRFA) discussing the 
impact of this rule on small entities follows. An FRFA addresses the 
following:
    (1) A statement of the need for, and objectives of, the rule;
    (2) A statement of the significant issues raised by the public 
comments in response to the Initial Regulatory Flexibility Analysis 
(IRFA), a statement of the assessment of the agency of such issues, and 
a statement of any changes made in the proposed rule as a result of 
such comments;
    (3) The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the Small Business Administration (SBA) in 
response to the proposed rule, and a detailed statement of any change 
made to the proposed rule in the final rule as a result of the 
comments;
    (4) A description of and an estimate of the number of small 
entities to which the rule will apply or an explanation of why no such 
estimate is available;
    (5) 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 requirement and 
the type of professional skills necessary for preparation of the report 
or record; and
    (6) A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.\26\
---------------------------------------------------------------------------

    \26\ 5 U.S.C. 604(a)(1) through (6).
---------------------------------------------------------------------------

    Below is a discussion of the FRFA analysis for each of these six 
elements.
    (1) A statement of the need for, and objectives of, the rule.
    The Coast Guard is 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 towing vessels inspected under 46 CFR 
subchapter I have not been updated since 1995. The changes to the fees 
are also consistent with the 2016 ``Inspection of Towing Vessels'' 
final rule, in which we stated that we planned to issue a separate 
rulemaking for annual inspection fees for towing vessels that would 
reflect the specific program costs associated with the two 46 CFR 
subchapter M options--the TSMS option and the Coast Guard inspection 
option.
    The objective of this final rule is to comply with the law, which 
requires the Coast Guard to establish a fee or charge for inspections 
and related services described in 46 U.S.C. 2110(a)(1). Under this law, 
the Coast Guard is required to establish a fee for its inspection 
services that is fair and based on costs to the Government, the value 
to the recipient, and public interest.
    (2) A statement of the significant issues raised by the public 
comments in response to the IRFA, a statement of the assessment of the 
agency of such issues, and a statement of any changes made in the 
proposed rule as a result of such comments.
    This regulatory action received no comments directly related to the 
IRFA analysis. However, we received several comments regarding 
financial hardship due to the fee increase. The Coast Guard, in 
accordance with 46 U.S.C. 2110, is required to establish a fee for its 
inspection services that is fair and based on the costs to the 
Government, value to the recipient, and public interest. The user fees 
were developed in accordance with law. Each entity chooses its 
inspection option and corresponding fee according to its business 
needs. For a review of all the public comments received on the 
rulemaking, see section IV., Discussion of Public Comments.
    (3) The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the SBA in response to the proposed rule, and a 
detailed statement of any change made to the proposed rule in the final 
rule as a result of the comments.

[[Page 89605]]

    This regulatory action received no comments from the Chief Counsel 
for the Advocacy of the SBA.
    (4) A description of and an estimate of the number of small 
entities to which the rule will apply or an explanation of why no such 
estimate is available.
    This final rule will affect the owners and operators of certain 
towing vessels under 46 CFR subchapters I and M. We retrieved this 
towing vessel population from the Coast Guard's MISLE system. From this 
database, we identified 4,762 vessels affected by this final rule--
4,719 subchapter M towing vessels and 43 subchapter I towing vessels 
(see table 5). There are 1,223 unique companies that own or operate 
these vessels. Eight companies own vessels under both subchapters I and 
M. One company owns only subchapter I vessels.
    We used available information on operator names and addresses to 
research public and proprietary databases for entity type (subsidiary 
or parent company), primary line of business, employee size, revenue, 
and other information.\27\ We found vessels owned by 21 government 
entities and 4 nonprofit entities. The remaining 1,211 vessels are 
owned by 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 if it was not 
dominant in its field.\28\ For the business entities, we matched their 
information with the SBA's latest 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).\29\
---------------------------------------------------------------------------

    \27\ https://www.cortera.com/, https://www.manta.com/, and 
https://www.referenceusagov.com (accessed July 10, 2023).
    \28\ We used https://www.guidestar.org to evaluate nonprofits 
(accessed July 10, 2023).
    \29\ https://www.sba.gov/document/support-table-size-standards 
(accessed July 10, 2023).
---------------------------------------------------------------------------

    We broke the population down into 46 CFR subchapters I and M. For 
subchapter M, we used a random sample from the unique towing vessel 
companies to reach the 95-percent confidence level. Using Cochran's 
Formula, the Coast Guard chose a statistically valid random sample of 
385 entities that own and operate towing vessels.\30\
---------------------------------------------------------------------------

    \30\ 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, the 
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 final rule's 
sample affected population. Table 12 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 12--Most Common NAICS Codes
----------------------------------------------------------------------------------------------------------------
                                                                                      Count of towing   Percent
        NAICS code                 Description            Small entity definition    vessel owners or   of total
                                                                                         operators         *
----------------------------------------------------------------------------------------------------------------
488330...................  Navigational Services to     <$47,000,000...............                45         11
                            Shipping.
238910...................  Site Preparation             <$19,000,000...............                33          8
                            Contractors.
441222...................  Boat Dealers...............  <$40,000,000...............                29          7
488410...................  Motor Vehicle Towing.......  <$9,000,000................                18          5
236115...................  New Single-family Housing    <$45,000,000...............                16          4
                            Construction (Except For-
                            Sale Builders).
336611...................  Ship Building and Repairing  <1,300 Employees...........                 9          2
237990...................  Other Heavy and Civil        <$45,000,000...............                 8          2
                            Engineering Construction.
713930...................  Marinas....................  <$11,000,000...............                 8          2
483211...................  Inland Water Freight         <1,050 Employees...........                 7          2
                            Transportation.
551111...................  Offices of Bank Holding      <$38,500,000...............                 6          2
                            Companies.
----------------------------------------------------------------------------------------------------------------
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 55 percent of NAICS codes were not within the 10 most commonly occurring.

    For subchapter M, the Coast Guard chose a sample of 385 businesses 
that own and operate the towing vessels. Of the 385 businesses, 33 
exceeded the SBA small business size standards, 271 companies were 
considered to be small businesses by the SBA size standards, and 81 
companies had no information available. Consistent with DHS's 
practices, entities with no information available are considered small 
entities. Thus, there are 352 businesses in our sample that we consider 
to be small entities. Based on our random sample, 91.4 percent of 
subchapter M entities are considered small and therefore when applied 
to the population of unique towing vessel companies, 1,118 subchapter M 
entities are considered small.
    For subchapter I, we searched all nine unique towing vessel 
companies in the available databases. All had available revenue and 
employee data. Of these nine unique towing vessel companies, eight 
exceeded the SBA small business size standards and one was considered a 
small entity by the SBA size standards.
    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, 98 percent of entities choose the Coast Guard option for their 
inspection option and 2 percent choose the TSMS option. Thus, we 
multiplied the rates for entities choosing their inspection option by 
the incremental change in user fees compared to the CAA 2022 baseline 
and the average fleet size for small subchapter M entities, which 
yielded an average increase in impact of $1,150 per subchapter M vessel 
and $2,300 per small subchapter M entity due to the incremental change 
in subchapter M fees.\31\ We repeated this process for subchapter I 
entities. We found that each small entity had an average fleet size of 
two vessels and multiplied it by the weighted average of incremental 
changes in user fees. According to our

[[Page 89606]]

analysis of small subchapter I vessels, all entities chose the ACP 
inspection option. This final rule will save subchapter I entities 
$2,130. Tables 13 and 14 show the impact on revenues for small entities 
that we had revenue data for under each subchapter.
---------------------------------------------------------------------------

    \31\ The incremental change in subchapter M Coast Guard option 
user fees is $1,154, while the incremental change in subchapter M 
TSMS option user fee is $973. Thus, the average impact of $2,300 was 
found by taking the weighted average of their inspection options by 
the fleet size. ($1,154 x 98%) + ($973 x 2%) = $1,150. $1,150 x 2 = 
$2,300.

  Table 13--Estimated Annual Revenue Impact for Small Entities Under 46
                            CFR Subchapter M
------------------------------------------------------------------------
                                             Number of      Percent of
        Revenue impact range (%)             entities        entities
------------------------------------------------------------------------
0 < 1...................................             170            80.6
1 < 3...................................              31            14.7
3 < 5...................................               7             3.3
5 < 10..................................               3             1.4
Above 10................................               0               0
                                         -------------------------------
    Total...............................             211             100
------------------------------------------------------------------------


  Table 14--Estimated Annual Revenue Impact for Small Entities Under 46
                            CFR Subchapter I
------------------------------------------------------------------------
                                             Number of      Percent of
        Revenue impact range (%)          small entities  small entities
------------------------------------------------------------------------
0 <= 1..................................               1             100
1 <= 3..................................               0               0
Above 3.................................               0               0
                                         -------------------------------
    Total...............................               1             100
------------------------------------------------------------------------

    According to our analysis, 80.6 percent of subchapter M entities 
will have an annual impact to revenue of 1 percent or less. 
Approximately 14.7 percent will have an annual impact to revenue 
between 1 and 3 percent. The remaining 4.7 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.
    (5) 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 requirement and 
the type of professional skills necessary for preparation of the report 
or record.
    This final rule calls for no new reporting, recordkeeping, or other 
compliance requirements.
    (6) A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.
    This final rule implements section 815 of CGAA 2018. The CGAA 2018 
mandates the revision of towing vessel inspection user fees if there 
are differences in costs to the Government. As such, the Coast Guard 
has no discretion to offer alternatives that minimize the impact on 
small entities while accomplishing the stated objective of the statute.
    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).
    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.
Conclusion
    In conclusion, we estimate that 80.6 percent of entities under 46 
CFR subchapter M with revenue data will have an annual impact to 
revenue of 1 percent or less. Approximately 14.7 percent will have an 
annual impact to revenue between 1 and 3 percent. The remaining 4.7 
percent will have an annual impact to revenue greater than 3 percent. 
For entities under 46 CFR subchapter I, our analysis shows a less than 
1 percent impact to annual revenue for all small entities. 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 TSMS options. Owners and operators of vessels 
using the ACP, SIP, or TSMS option will pay a lower fee than owners and 
operators of vessels that use the traditional Coast Guard inspection 
option.

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 final 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 final 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 final rule calls for no new or revised collection of 
information under

[[Page 89607]]

the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.

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 of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 
8101 (design, construction, alteration, repair, maintenance, operation, 
equipping, personnel qualification, and manning of vessels), as well as 
the reporting of casualties and any other category in which Congress 
intended the Coast Guard to be the sole source of a vessel's 
obligations, are within the field foreclosed from regulation by the 
States. See the Supreme Court's decision in United States v. Locke and 
Intertanko v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). 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.

F. 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 final rule will not 
result in such expenditure, we do discuss the effects of this rule 
elsewhere in this preamble.

G. Taking of Private Property

    This final 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).

H. Civil Justice Reform

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

J. Indian Tribal Governments

    This final 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.

K. Energy Effects

    We have analyzed this final 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.

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 rule does not use technical standards. Therefore, we did not 
consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this final 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 
final rule is categorically excluded under paragraphs L54 and L57 of 
Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev 1.\32\ 
Paragraph L54 pertains to regulations that are editorial or procedural. 
Paragraph L57 pertains to regulations concerning manning, 
documentation, admeasurement, inspection, and equipping of vessels.
---------------------------------------------------------------------------

    \32\ https://www.dhs.gov/sites/default/files/publications/DHS_Instruction%20Manual%20023-01-001-01%20Rev%2001_508%20Admin%20Rev.pdf (accessed July 10, 2023).
---------------------------------------------------------------------------

    This final rule updates the existing user fee for seagoing towing 
vessels that are 300 gross tons or more and establishes specific user 
fees for other towing vessels that have more recently become subject to 
inspection.

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 amends 
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, 3703, 70034; DHS Delegation No. 
00170.1, Revision No. 01.3, paragraph (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''.

[[Page 89608]]

    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, in order, 
adding the subentries ``Coast Guard option'', ``Alternative Compliance 
option'', and ``Streamlined Inspection Program option''; and
0
b. Adding an entry for ``Towing Vessels (Inspected under 46 CFR 
Subchapter M)'' and, in order, adding the subentries ``Coast Guard 
option'' and ``Towing Safety Management System option''.
    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 18, 2023.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Prevention 
Policy.
[FR Doc. 2023-28112 Filed 12-27-23; 8:45 am]
BILLING CODE 9110-04-P


