
[Federal Register Volume 88, Number 190 (Tuesday, October 3, 2023)]
[Proposed Rules]
[Pages 68042-68055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21660]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 10

[Docket No. USCG-2021-0288]
RIN 1625-AC83


Exemption for Active-Duty Uniformed Service Members From Merchant 
Mariner Credentialing Fees

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard is proposing to exempt certain members of the 
uniformed services from Merchant Mariner Credential (MMC) fees for the 
evaluation of an MMC application, the administration of an examination 
required for an MMC endorsement, and the issuance of an MMC. This 
proposal is in response to Executive Order 13860, ``Supporting the 
Transition of Active-Duty Service Members and Military Veterans Into 
the Merchant Marine,'' and section 3511 of the National Defense 
Authorization Act for Fiscal Year 2020. Under this proposal, members of 
the uniformed services would be exempt from paying fees for an MMC.

DATES: Comments and related material must be received by the Coast 
Guard on or before January 2, 2024.

ADDRESSES: You may submit comments identified by docket number USCG-
2021-0288 using the Federal Decision Making Portal at 
www.regulations.gov. See the ``Public Participation and Request for 
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further 
instructions on submitting comments.
    Collection of information. Submit comments on the collection of 
information discussed in section VI.D of this preamble both to the 
Coast Guard's online docket and to the Office of Information and 
Regulatory Affairs (OIRA) in the White House Office of Management and 
Budget (OMB) using their website www.reginfo.gov/public/do/PRAMain. 
Comments sent to OIRA on the collection of information must reach OMB 
on or before the comment due date listed on their website.

FOR FURTHER INFORMATION CONTACT: For information about this document, 
call or email Mr. James Cavo, U.S. Coast Guard Office of Merchant 
Mariner Credentialing; telephone 202-372-1205, email 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble

I. Public Participation and Request for Comments
II. Abbreviations
III. Background
IV. Legal Authority
V. Discussion of Proposed Rule
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. Public Participation and Request for Comments

    The Coast Guard views public participation as essential to 
effective rulemaking and will consider all comments and material 
received during the comment period. Your comment can help shape the 
outcome of this rulemaking. If you submit a comment, please include the 
docket number for this rulemaking, indicate the specific section of 
this document to which each comment applies, and provide a reason for 
each suggestion or recommendation.
    Submitting comments. We encourage you to submit comments through 
the Federal Decision Making Portal at www.regulations.gov. To do so, go 
to

[[Page 68043]]

www.regulations.gov, type USCG-2021-0288 in the search box, and click 
``Search.'' Next, look for this document in the Search Results column, 
and click on it. Then click on the Comment option. If you cannot submit 
your material by using www.regulations.gov, call or email the person in 
the FOR FURTHER INFORMATION CONTACT section of this proposed rule for 
alternate instructions.
    Viewing material in docket. To view documents mentioned in this 
proposed rule as being available in the docket, find the docket as 
described in the previous paragraph, and then select ``Supporting & 
Related Material'' in the Document Type column. Public comments will 
also be placed in our online docket and can be viewed by following 
instructions on the www.regulations.gov Frequently Asked Questions web 
page. That FAQ page also explains how to subscribe for email alerts 
that will notify you when comments are posted or if a final rule is 
published. We review all comments received, but we will only post 
comments that address the topic of the proposed rule. We may choose not 
to post off-topic, inappropriate, or duplicate comments that we 
receive.
    Personal information. We accept anonymous comments. Comments we 
post to www.regulations.gov will include any personal information you 
have provided. For more about privacy and submissions to the docket in 
response to this document, see the DHS's eRulemaking System of Records 
notice (85 FR 14226, March 11, 2020).
    Public meeting. We do not plan to hold a public meeting, but we 
will consider doing so if we determine from public comments that a 
meeting would be helpful. We would issue a separate Federal Register 
notice to announce the date, time, and location of such a meeting.

II. Abbreviations

CATEX Categorical exclusion
CFR Code of Federal Regulations
CG-MMC U.S. Coast Guard Office of Merchant Mariner Credentialing
DHS Department of Homeland Security
GS General Schedule
MMC Merchant Mariner Credential
MMLD Merchant Mariner Licensing Documentation
NDAA 2020 National Defense Authorization Act for Fiscal Year 2020
NOAA National Oceanic and Atmospheric Administration
NMC National Maritime Center
OMB Office of Management and Budget
OPM Office of Personnel Management
RA Regulatory analysis
Sec.  Section
STCW International Convention on Standards of Training, 
Certification and Watchkeeping for Seafarers
USPHS U.S. Public Health Service
U.S.C. United States Code

III. Background

    As described in title 46 of the Code of Federal Regulations (CFR), 
section 10.107, a Coast Guard-issued Merchant Mariner Credential (MMC) 
serves as a mariner's qualification document and certificate of 
identification. Mariners employed aboard most U.S. merchant vessels are 
required to hold a valid MMC.
    As mandated by title 46 of the United States Code (U.S.C.), section 
2110, and in accordance with the Independent Offices Appropriations Act 
(31 U.S.C. 9701), the Coast Guard has established fees associated with 
MMC applications, which are codified in table 1 to 46 CFR 10.219(a). 
There are three types of credentialing fees: an evaluation fee, an 
examination fee, and an issuance fee. The fee amount varies based on 
the individual credential transaction that an applicant seeks.
    Evaluation fees for MMCs range from $50 to $100, and the applicant 
must pay the fee at the time an application is submitted to the Coast 
Guard. Examination fees range from $45 to $140, depending on the 
endorsement sought, and must be paid before the professional 
examination for an endorsement is taken.\1\ If an applicant applies for 
an MMC with both a rating and an officer endorsement, the higher 
evaluation fee is charged. Issuance fees are $45 and must be paid 
before an MMC is issued.\2\
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    \1\ An endorsement is a ``statement of a mariner's 
qualifications.'' 46 CFR 10.107(b). The particular endorsement(s) on 
each mariner's MMC indicate what capacities they may serve in, such 
as a ``barge supervisor'' or a ``lifeboatman.'' See id.; 46 CFR 
10.109(a)-(b).
    \2\ A rating endorsement is an annotation on an MMC that allows 
a mariner to serve in those capacities set out in 46 CFR 10.109(b). 
46 CFR 10.107(b). Officer endorsement means an annotation on an MMC 
that allows a mariner to serve in the capacities listed in 46 CFR 
10.109. Id.
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    The original issuance of an MMC, as well as any subsequent 
credential transactions, such as increasing the scope of authority, 
raising the grade of authority, or renewing an MMC, all require a 
fee.\3\ MMCs are valid for a period of 5 years and may be renewed at 
any time during the validity period of the credential and for 1 year 
after expiration.
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    \3\ ``Increase in scope'' and ``raise of grade'' are defined at 
46 CFR 10.107.
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    Mariners typically seek additional endorsements after accruing the 
required sea service and completing required training. There are no 
fees associated with the issuance of mariner medical certificates or 
International Convention on Standards of Training, Certification and 
Watchkeeping for Seafarers (STCW) endorsements.
    The Coast Guard does not require a fee for MMC transactions if one 
of the following three conditions is met:
    (1) The application is for a Document of Continuity, as specified 
in 46 CFR 10.219(e)(3).
    (2) The credential is a duplicate of a credential lost in a 
shipwreck or other casualty under 46 CFR 10.229(c) and reflected in 
table 1 to Sec.  10.219(a).
    (3) The applicant qualifies for a ``no-fee'' Merchant Mariner 
Credential under 46 CFR 10.219(h).
    Currently, an applicant only qualifies for a ``no-fee'' MMC if they 
are a volunteer for or an employee of an organization that is youth-
oriented, not-for-profit, and charitable, 46 CFR 10.219(j). The holder 
of a ``no fee'' MMC is restricted to using vessels owned or operated by 
the sponsoring organization, 46 CFR 10.219(k).
    In March 2019, Executive Order 13860, ``Supporting the Transition 
of Active-Duty Service Members and Military Veterans Into the Merchant 
Marine,'' directed the Coast Guard to waive the fees associated with 
MMC applications ``for active duty service members, if a waiver is 
authorized and appropriate.'' \4\ The Executive Order applied only to 
members of the armed forces.
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    \4\ E.O 13860, section 3, paragraph (a)(ii) (84 FR 8407 (Mar. 7, 
2019)).
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    Subsequently, in December 2019, Congress enacted the National 
Defense Authorization Act for Fiscal Year 2020 (NDAA 2020).\5\ Building 
upon Executive Order 13860, section 3511(c)(1) of the NDAA 2020 
directed the Coast Guard to waive evaluation, examination, and issuance 
fees associated with MMCs, if a waiver is authorized and appropriate, 
not just for the armed forces (Army, Navy, Air Force, Marine Corps, 
Space Force, and Coast Guard), but for all ``members of the uniformed 
services on active duty.'' The uniformed services include the 
Commissioned Corps of the National Oceanic and Atmospheric 
Administration (NOAA) and the Commissioned Corps of the U.S. Public 
Health Service (USPHS) in addition to the Army, Navy, Air Force, Marine 
Corps, Space Force, and Coast Guard.\6\
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    \5\ Public Law 116-92, Dec. 20, 2019.
    \6\ Section 3511of the NDAA 2020 is codified as a note to 46 
U.S.C. 7302; ``Uniformed services'' defined at 10 U.S.C. 101(a)(5).
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    In accordance with Executive Order 13860 and section 3511 of the 
NDAA 2020, on May 26, 2020, the Coast Guard's Office of Merchant 
Mariner

[[Page 68044]]

Credentialing (CG-MMC) issued Policy Letter 02-20, ``Waiver of Fees 
Associated with Merchant Mariner Credential Applications for Active 
Duty Members of the Uniformed Services.'' \7\ CG-MMC Policy Letter 02-
20 provides guidance for the waiver of MMC fees for active duty members 
of the uniformed services. The policy provided a waiver of fees for 
mariners who provide documentation evidencing their eligibility for the 
fee waiver. This documentation may include active-duty orders or a 
letter from their command or personnel office on official letterhead 
that states the applicant is a current member of the uniformed services 
on active duty or a member of the Selected Reserve of the Ready Reserve 
of any of the armed forces or the Ready Reserve Corps of the USPHS.
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    \7\ CG-MMC Policy Letter 02-20 is available at https://www.dco.uscg.mil/Portals/9/DCO%20Documents/5p/5ps/MMC/CG-MMC-2%20Policies/CG-MMC-Policy-Letter-02-20.pdf.
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IV. Legal Authority

    Section 3511(c)(1) of the NDAA 2020 directed the Coast Guard to 
waive evaluation, examination, and issuance fees associated with MMCs 
for members of the uniformed services on active duty, if a waiver is 
authorized and appropriate. The Coast Guard has found that such a 
waiver is authorized and appropriate. Under 46 U.S.C. 2110(g), the 
Secretary of the Department of Homeland Security (DHS) may exempt a 
person from paying such a fee if the Secretary determines that it is in 
the public interest to do so. The Secretary has delegated this 
authority to the Coast Guard through article II, paragraph 92, 
subparagraph (a) of DHS Delegation No. 00170.1, Revision No. 01.3. The 
Coast Guard concludes that it is in the public interest to exempt 
members of the uniformed services (Army, Navy, Air Force, Marine Corps, 
Space Force, Coast Guard, Commissioned Corps of the NOAA, and 
Commissioned Corps of USPHS) on active duty; members of the Selected 
Reserve of the Ready Reserve of any of the armed forces (Army National 
Guard of the United States, Army Reserve, Navy Reserve, Marine Corps 
Reserve, Air National Guard of the United States, Air Force Reserve, 
and Coast Guard Reserve); and the Ready Reserve Corps of the USPHS from 
fees associated with obtaining an MMC. As discussed in Executive Order 
13860, it is the policy of the United States to establish and maintain 
an effective merchant marine and to provide sufficient support and 
resources to active duty and separating service members who pursue or 
possess MMCs. The goals of not requiring these fees are to: (1) help 
attract active-duty service members with the appropriate skills and 
expertise to obtain an MMC for employment in the maritime industry; (2) 
support U.S. national security requirements; and (3) provide 
meaningful, well-paying jobs to U.S. veterans.\8\
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    \8\ Executive Order 13860, section 1.
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V. Discussion of Proposed Rule

    The Coast Guard is proposing to amend 46 CFR 10.219 and codify this 
MMC fee waiver in the regulations. Specifically, the Coast Guard 
proposes to exempt members of the uniformed services on active duty, 
members of the Selected Reserve of the Ready Reserve of any of the 
armed forces (Army National Guard of the United States, Army Reserve, 
Navy Reserve, Marine Corps Reserve, Air National Guard of the United 
States, Air Force Reserve and Coast Guard Reserve), and the Ready 
Reserve Corps of the USPHS from paying evaluation, examination, or 
issuance fees for an MMC.
    For purposes of this rule, ``uniformed services'' would have the 
same meaning as defined at 10 U.S.C. 101(a)(5): the Army, Navy, Air 
Force, Marine Corps, Space Force, and Coast Guard, as well as members 
of the NOAA and USPHS Commissioned Corps. Members of the Selected 
Reserve of the Ready Reserve of a reserve component named in 10 U.S.C. 
10101 and members of the Ready Reserve Corps of the USPHS would also be 
eligible for the exemption. (The NOAA Commissioned Corps does not have 
a reserve component.)
    For members of the armed forces, ``active duty'' would have the 
same meaning as under 10 U.S.C. 101(d)(1). For members of the NOAA 
commissioned corps, ``active duty'' would have the same meaning as 
under 33 U.S.C. 3002(b)(1). For members of the USPHS Commissioned 
Corps, ``active duty'' would have the same meaning as ``active 
service'' under 42 U.S.C. 212(d). ``Selected Reserve'' would have the 
same meaning as under 10 U.S.C. 10143(a).
    This fee exemption would be located in a new paragraph, paragraph 
(m), in 46 CFR 10.219.

VI. Regulatory Analysis

    We developed this proposed rule after considering numerous statutes 
and Executive orders related to rulemaking. A summary of our analyses 
based on these statutes and Executive orders follows.

A. Regulatory Planning and Review

    Executive Orders 12866 (Regulatory Planning and Review), as amended 
by Executive Order 14094 (Modernizing Regulatory Review), and 13563 
(Improving Regulation and Regulatory Review) direct agencies to assess 
the costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both 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. Accordingly, OMB has 
not reviewed this rule.
    The Coast Guard has developed an analysis of the costs and benefits 
of the proposed rule to assess its impacts. The regulatory analysis 
(RA) follows.
    The rule is being proposed in response to two items. The first is 
section 3, paragraph (a)(ii) of Executive Order 13860, ``Supporting the 
Transition of Active-Duty Service Members and Military Veterans Into 
the Merchant Marine,'' signed March 4, 2019.\9\ The second is section 
3511(c)(1) of the NDAA 2020.\10\
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    \9\ 84 FR 8407 (Mar. 7, 2019) (``With respect to National 
Maritime Center license evaluation, issuance, and examination, [the 
Coast Guard shall] take all necessary and appropriate actions to 
provide for the waiver of fees for active-duty service members.'').
    \10\ Public Law 116-92, Dec. 20, 2019.
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    For purposes of the analysis, this RA is presented in two parts. 
Part I examines the impacts of CG-MMC Policy Letter 02-20, which was 
issued on May 26, 2020.\11\ Part II examines the impacts of the 
proposed rulemaking post the issuance of the CG-MMC Policy Letter 02-
20. The policy letter and the proposed rulemaking cover different 
populations. The difference between the two populations arises from 
which components of the reserves are eligible for a waiver of fees 
under the policy letter and which would be eligible under this proposed 
rule. The policy letter covers all reservists on active duty currently 
and in the past. The proposed rulemaking, however, would cover only 
those reservists who are currently members of the Selected Reserve, as 
described in 10 U.S.C.

[[Page 68045]]

10143(a), or a reserve component named in 10 U.S.C. 10101, or the Ready 
Reserve of the USPHS. The in-scope population of the proposed 
rulemaking is a subset of that of the policy letter.
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    \11\ Section 5e of the policy letter. A copy of the policy 
letter can be found in the docket.
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    The Coast Guard does not have data on the number of Selected 
Reservists or Ready Reservists who were granted fee exemptions under 
the policy letter, nor does it have data on the number of the 
reservists who were granted fee exemptions while on active-duty status. 
Due to this lack of data, it is not possible to estimate the 
differences in the affected populations between the policy letter and 
the proposed rulemaking.\12\ Therefore, the Coast Guard is treating the 
estimated difference as an unquantified impact of the proposed rule, 
though the Coast Guard explores potential cost savings effects in its 
analysis. Further discussion can be found below.
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    \12\ Although the NMC has data on the aggregate number of 
applicants for the fee waiver, it does not have data on the 
applicants broken out by sub-categories such as what service they 
are in (or were in) or their active or reserve status. Executive 
Order 13860 does not require the Coast Guard to collect this data. 
As a result, the Coast Guard does not collect it. In addition, the 
Department of Defense, as of when this proposed rule was written, 
did not publish data on the number of Selected Reservists or Ready 
Reservists who are currently on active duty or who were in the 
recent past.
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    Since the policy letter and proposed rulemakings are implemented at 
different time periods (the policy letter was implemented in 2020, and 
the proposed rulemaking is expected to be implemented in 2024), two 
different baselines need to be examined. The first is that associated 
with the pre-policy baseline (covering 2020-2033), and the second is 
that associated with the proposed rulemaking baseline (covering 2024-
2033). The pre-policy baseline analyzes the effects of the Policy 
Letter 02-20 published in 2020 which allowed certain eligible 
applicants to receive an MMC fee exemption. The pre-policy baseline 
estimates the costs and savings that applicants and the Coast Guard 
received as a result of the policy letter as well as the costs and 
savings from this proposed rulemaking. The second baseline, the 
proposed rulemaking baseline, estimates the costs and savings that 
would occur as the result of this proposed rulemaking only. However, 
since we are unable to determine the change in population there are no 
additional costs or savings that can be attributed to the proposed 
rulemaking baseline.
    Table 1, below, provides a summary of all impacts from Policy 
Letter 02-20 and the proposed rulemaking on a per-applicant basis. 
Section 1a of that table discusses the impacts of the policy letter, 
and section 1b discusses those of the proposed rulemaking. The dollar 
figures are presented in both nominal and discounted terms (7 percent 
on an annualized basis) for a 10-year period.

                             Table 1a--Summary of the Impacts of Policy Letter 02-20
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                         Category                                                  Impacts
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Applicability.............................................  46 U.S.C. 2110, Executive Order 13860, and NDAA
                                                             2020.
Affected Population.......................................  Members of the uniformed services (Army, Navy, Air
                                                             Force, Space Force, Marine Corps, Coast Guard,
                                                             Commissioned Corps of NOAA, Commissioned Corps of
                                                             USPHS), including reservists and members of the
                                                             National Guard, who are on active duty at the time
                                                             of application, or are current members of the
                                                             reserve forces and were previously on active duty.
Estimated Fee Waivers (annually)..........................  The estimated number of fee waivers in the future is
                                                             622 (annually).
Labor costs for applicants to provide documentation of      $9.87 per application.
 eligibility for an MMC fee exemption.                      The 14-year documentation cost for the 622 yearly
                                                             applicants is $85,948 (in total nominal dollars)
                                                             and $61,468 and $6,139 annualized (discounted at
                                                             7%).
Labor costs to the Coast Guard to evaluate applicant's      $7.82 per application.
 eligibility for MMC fee exemption.                         The 14-year cost to the Coast Guard is $68,097 (in
                                                             total nominal dollars) and $48,702 and $4,864
                                                             annualized (discounted at 7%).
Transfer payments (eliminated applicant's MMC fees paid to  The mean estimated transfer is $159.38 per MMC.
 the Federal Government).                                   Over the 14-year period, the transfers are estimated
                                                             at $1,387,881 (in total nominal dollars) and
                                                             $992,601 and $99,134 on an annualized basis
                                                             (discounted at 7%).
Unquantified benefits.....................................  May provide uniformed services members greater
                                                             flexibility with respect to pursuing careers after
                                                             leaving the uniformed services.
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                                Table 1b--Summary of the Impacts of Proposed Rule
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                         Category                                                  Impacts
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Applicability.............................................  46 U.S.C. 2110, Executive Order 13860, and NDAA
                                                             2020.
Affected Population.......................................  The proposed rulemaking covers only uniformed
                                                             service members and reservists on active duty,
                                                             members of the Selected Reserve, and members of the
                                                             Ready Reserve Corps of the Public Health Service.
                                                            The proposed rulemaking involves a narrower in-scope
                                                             population, as Policy Letter 02-20 covers
                                                             reservists currently on active duty as well as
                                                             those who were on active duty in the past.
Estimated Fee Waivers (annually)..........................  The number of fee waivers in the future is
                                                             estimated, for purposes of our analysis, at 622
                                                             (annually).
                                                            However, as the only change from Policy Letter 02-20
                                                             involves a potential decrease in the reservist
                                                             population, the actual number may be smaller. Due
                                                             to a lack of data, it is not possible to quantify
                                                             this number.
Labor costs for applicants to provide documentation of      $9.87 per application.
 eligibility for an MMC fee exemption.                      There are no labor costs to the applicants to
                                                             provide documentation as the proposed rulemaking
                                                             codifies the already existing Policy Letter 02-20.
Labor costs to the Coast Guard to evaluate applicant's      $7.82 per application.
 eligibility for MMC fee exemption.                         There are no labor costs expected from the
                                                             implementation of the proposed rulemaking as it
                                                             codifies the already existing Policy Letter 02-20.
Transfer payments (eliminated applicant's MMC fees paid to  Codifies MMC Fee Waiver. The mean estimated transfer
 the Federal Government).                                    is $159.38 per MMC.
                                                            There are no transfer payments expected from the
                                                             implementation of the proposed rulemaking as it
                                                             codifies the already existing Policy Letter 02-20.

[[Page 68046]]

 
Unquantified benefits.....................................  May provide increased clarity and transparency to
                                                             the affected public as a published rule in the CFR
                                                             as opposed to a standalone guidance document.\1\
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Note: all dollar figures are rounded to the closest whole dollar.
\1\ The proposed rulemaking also incorporates the greater flexibility with respect to pursuing careers. Due to
  the fact that this has already been achieved by the policy letter, independent of the proposed rulemaking, we
  only list the increased clarity and transparency obtained through the codification of the MMC Fee Waiver.
  These are the additional benefits obtained through the creation of the proposed rulemaking.

Part I. CG-MMC Policy Letter 02-20 (Pre-Policy Baseline)

    A policy letter was published to immediately implement Executive 
Order 13860, section 3511(c)(1) of the NDAA 2020. The implementation of 
the policy letter had three impacts. The first impact is the time that 
applicants are required to provide documentation to show eligibility 
for the MMC fee exemption.\13\ Prior to the implementation of the 
policy letter, applicants did not need to provide such documentation. 
The second impact involves the labor costs to the Coast Guard to 
evaluate documentation for eligibility of the fee exemption. Prior to 
the policy letter, the Coast Guard did not have to evaluate such 
documentation, so there was no cost to the Government. The third impact 
of the policy letter was 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. Prior to the implementation of 
the policy letter, the affected population were required to pay the MMC 
fees. Following publication of the Policy Letter, the Federal 
Government incurs the cost of those fees. These three factors comprise 
the effects of the of Policy Letter 02-20.
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    \13\ Applicants must submit documentation consistent with CG-MMC 
Policy Letter 02-20 to show that they are eligible for the fee 
exemption. This may include a copy of active-duty orders citing 
Titles 10 or 14 of the United States Code or a letter from the 
relevant command or personnel office on official letterhead stating 
that the applicant is a current member of the uniformed services.
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    The population will be discussed in greater detail below in the 
``Affected Population'' section of this RA.
Affected Population for Policy Letter 02-20
    In accordance with Executive Order 13860 and section 3511 of the 
NDAA 2020, and the authority under 46 U.S.C. 2110(g), the Coast Guard 
waived MMC fees for members of the uniformed services (Army, Navy, Air 
Force, Marine Corps, Space Force, Coast Guard, and the Commissioned 
Corps of NOAA and the USPHS), including reservists and members of the 
National Guard, if they are currently on active duty at the time of 
application, or are a current member of the reserve forces and were 
previously on active duty.\14\ The waiver was implemented through 
Policy Letter 02-20. This policy letter took effect on May 26, 2020. 
Data is available for all these categories of personnel except the 
Ready Reserve Corps of the USPHS. The Ready Reserve Corps of the USPHS 
was authorized and funded by the Coronavirus Aid, Relief and Economic 
Security Act and signed into law on March 27, 2020. It only began to 
accept applications in the fall of 2020.\15\ With respect to the other 
groups mentioned above, the maximum potentially affected population is 
2,145,035. This is the total number of personnel who may be eligible 
for an MMC fee exemption. A detailed breakdown of this population can 
be found below in Table 2.
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    \14\ The legal authority is discussed in greater detail in 
section III of this preamble, ``Background''.
    \15\ https://www.usphs.gov/ready-reserve, accessed June 20, 
2023.

                  Table 2--Maximum Total Potentially Affected Population by Policy Letter 02-20
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           Service branch                Number                     Source                         Notes
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                                          Members of Uniformed Services
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Army...............................         466,172  Defense Manpower Data Center (DMDC)   This data is as of
                                                      website, (https://dwp.dmdc.osd.mil/   the quarter ending
                                                      dwp/app/dod-data-reports/workforce-   March 2022.\1\
                                                      reports, downloaded September 1,
                                                      2022). Downloaded from section
                                                      ``military personal, Military and
                                                      civilian personnel by service/
                                                      agency by state/country, March
                                                      2022''.
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Navy...............................         340,390
Air Force and Space Force..........         329,257
Marines............................         176,259
Coast Guard........................          40,308
Commissioned Corps of NOAA.........             327  Information from NOAA, provided May
                                                      27, 2021.
Commissioned Corps of USPHS........           6,100  Department of Health and Human
                                                      Services website (https://www.hhs.gov/about/news/2020/06/30/trump-administration-re-establishes-ready-reserve-corps-as-part-of-the-us-phs.html, downloaded January 4,
                                                      2021).
Total Active Uniformed Service            1,358,813
 Members.
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[[Page 68047]]

 
                                Members of Selected Reserve of the Ready Reserve
----------------------------------------------------------------------------------------------------------------
Army Reserve.......................         180,647  Defense Manpower Data Center (DMDC)   This data is as of
                                                      website, (https://dwp.dmdc.osd.mil/   March 2022.\2\
                                                      dwp/app/dod-data-reports/workforce-
                                                      reports, downloaded September 1,
                                                      2022). Downloaded from section
                                                      ``military personal, Military and
                                                      civilian personnel by service/
                                                      agency by state/country, March
                                                      2022''.
Army National Guard of the U.S.             333,182
Navy Reserve.......................          56,017
Air Force Reserve..................          69,697
Air National Guard of the U.S.              106,964
Marine Corps Reserves..............          33,607
Coast Guard Reserves...............           6,108
Commissioned Corps of USPHS (Ready          N.A.\3\
 Reserve).
Space Force Reserve................           0 \4\
Total Members of Selected Reserve           786,222
 of the Ready Reserve.
Total Active Uniformed Service            2,145,035
 Members + Members of Selected
 Reserve of the Ready Reserve.
----------------------------------------------------------------------------------------------------------------
\1\ The table does not include personnel on temporary duty or deployed in support of contingency operations. The
  data is the latest available as of June 2022.
\2\ Latest available data as of the search date, September 1, 2022.
\3\ USPHS Ready Reserve was created in March 2020 and only started to take applications in the Fall of 2020.
\4\ Space Force, as of September 1, 2022, does not have a reserve element.

    Of the 2,145,035 eligible persons, only a small number applied for 
an MMC and received a fee waiver. Based on available data, 2020 through 
2022 (inclusively), an average of 622 eligible persons were granted a 
waiver of MMC fees (per year). The Coast Guard assumes that, in the 10-
year period following implementation of Policy Letter 02-20, an average 
of 622 persons will continue to annually request and receive a waiver 
of MMC fees.
MMC Fees To Be Exempted
    Table 3 provides the MMC evaluation, examination, and issuance fees 
waived for qualifying individuals for the policy letter.\16\ The column 
on the right side shows the aggregated evaluation, examination, and 
issuance fees for each type of credential transaction. The average fee 
for an MMC, as can be seen at the bottom of table 3, is $159.38.
---------------------------------------------------------------------------

    \16\ Table 1 of 46 CFR 10.219(a).

               Table 3--Fee for MMCs and Associated Endorsements From Table 1 of 46 CFR 10.219(a)
----------------------------------------------------------------------------------------------------------------
                                        Evaluation,    Examination,
          If you apply for             then the fee    then the fee    Issuance, then the fee is       Total
                                         is . . .        is . . .                . . .
----------------------------------------------------------------------------------------------------------------
MMC with officer endorsement:
Original:
    Upper level 1...................            $100            $110  $45.......................            $255
    Lower level 2...................             100              95  45........................             240
    Renewal.........................              50              45  45........................             140
    Raise of grade..................             100              45  45........................             190
    Modification or removal of                    50              45  45........................             140
     limitation or scope.
Radio officer endorsement:
    Original........................              50              45  45........................             140
    Renewal.........................              50             n/a  45........................              95
    Staff officer endorsements:.....
    Original........................              90             n/a  45........................             135
Renewal.............................              50             n/a  45........................              95
MMC with rating endorsement:
    Original endorsement for ratings              95             n/a  45........................             140
     other than qualified ratings.
    Original endorsement for                      95             140  45........................             280
     qualified rating.
    Upgrade or raise of grade.......              95             140  45........................             280
    Renewal endorsement for ratings               50             n/a  45........................              95
     other than qualified ratings.
    Renewal endorsement for                       50              45  45........................             140
     qualified rating.
    Modification or removal of                    50              45  45........................             140
     limitation or scope.

[[Page 68048]]

 
STCW endorsement:
Original............................               0               0  0.........................             n/a
    Renewal.........................               0               0  0.........................             n/a
    Reissue, replacement, and                    n/a             n/a  45........................              45
     duplicate.
----------------------------------------------------------------------------------------------------------------
                                                                                 Summation Statistics
                                                                     -------------------------------------------
                                                                      Mean......................         $159.38
                                                                      Lower Bound...............          $45.00
                                                                      Upper Bound...............         $280.00
                                                                      Credential transaction                  16
                                                                       types that require Fees.
----------------------------------------------------------------------------------------------------------------

Cost and Transfer Impacts of Policy Letter 02-20
    As stated previously, there were three impacts of the policy 
letter. The first was that it resulted in a cost to applicants to 
provide the documentation needed to show eligibility for the MMC fee 
exemption. The second was the cost to the Coast Guard to process this 
documentation. The third was the transfer price associated with the 
costs of the fees being shifted from individual applicants to the 
Federal Government. The costs to applicants are discussed in detail in 
section (1), below. Costs to the Coast Guard are discussed in section 
(2). Section (3) discusses the combined costs to applicants and the 
Coast Guard, and section (4) details the transfer costs.
(1) Labor Costs to Applicants Providing Documentation Showing 
Eligibility for MMC Fee Waiver
    Applicants for an MMC fee waiver, under Policy Letter 02-20, need 
to provide documentation to show eligibility. Examples of documentation 
include, but are not limited to, active-duty orders citing Titles 10 or 
14 of the United States Code, a letter from the command or personnel 
office on official letterhead stating that the applicant is currently 
serving under Titles 10 or 14, or similar documentation. The applicant 
should submit the documentation with their application for an MMC.\17\
---------------------------------------------------------------------------

    \17\ In order to provide maximum flexibility to applicants, for 
the proposed rulemaking the acceptable forms of documentation will 
be provided in updated guidance that the Coast Guard is planning to 
publish when a final rule is published.
---------------------------------------------------------------------------

    The National Maritime Center (NMC) estimates that it would take 
applicants 15 minutes to obtain eligibility documentation and include 
it with an MMC application.18 19 The Coast Guard estimates 
the mean hourly rate of active duty uniformed service members at $39.48 
per hour.\20\ The Coast Guard estimates the mean monthly pay of active 
duty uniformed service members at $6,865.77.\21\ That figure, 
$6,865.77, is multiplied by 12 to obtain an annual figure of $82,389.24 
($6,865.77 x 12). To estimate hourly rates, the Coast Guard divides 
$82,389.24 by 2,087, which the Office of Personnel and Management (OPM) 
uses as the number of working hours in a year, per 5 U.S.C. 5504(b)(1). 
Hence, the Coast Guard estimates the average hourly rate of active-duty 
uniformed service members at $39.48 \22\ ($82,389.24 / 2,087) and 
estimates the cost to this population to provide documentation showing 
eligibility for the fee waiver at $9.87 ((15 minutes / 60 minutes) x 
$39.48 = $9.87). As the Coast Guard forecasts 622 applicants per year, 
the total nominal cost is estimated at $6,139 per annum (622 x $9.87 = 
$6,139.14, rounded to $6,139). Table 4 shows the estimated nominal cost 
over a 14-year period, including discounted and annualized figures. As 
the policy letter became effective in 2020, table 4 shows the estimated 
costs for the 14-year period covering 2020 through 2033 (the 14-year 
period following the implementation of the policy letter).\23\ Table 4 
is showing the pre-policy letter baseline. All dollar figures in Table 
4, and all other tables in this regulatory analysis, are in 2021 terms 
unless otherwise stated.
---------------------------------------------------------------------------

    \18\ The NMC is responsible for receiving and evaluating MMC 
applications and issuing MMCs to qualified mariners.
    \19\ The Coast Guard, in its calculations, has assumed that 
applicants provide their own documentation as opposed to command 
personnel providing the documentation on their behalf. The Coast 
Guard does not have information on the breakdown between the two 
groups.
    \20\ This dollar figure for uniformed service members is 
provided in nominal terms, as opposed to a loaded rate (adjusted for 
benefits). This is due to the complexity of measuring and obtaining 
readily available data on the uniformed service members benefit 
compensation package. We compared civilian employees and uniformed 
service members and concluded that the comparison is not 
appropriate, since civilian employees and uniformed service members 
receive significantly different benefits. Uniformed personnel, for 
example, are provided full housing (or equivalent financial 
compensation), food or partial food stipend, full medical coverage 
for themselves and their families, significant educational benefits 
during their time in service and, upon completing terms of military 
service, pensions (for those who complete the requisite amount of 
service) complete moving expenses throughout their careers, and 
other benefits that are dependent upon an individual's assignment. 
By comparison, few employees in the private sector receive such 
benefits.
    \21\ We calculated this figure using the Jan. 2021 Monthly Basic 
Pay Table on the Department of Defense website, https://militarypay.defense.gov/Portals/3/Documents/2021%20Pay%20Table%203%20percent%20-%20FINAL.pdf (accessed Nov. 10, 
2021), which in turn was found under ``active-duty pay'' at https://militarypay.defense.gov/Pay/Basic-Pay/Active-Duty-Pay/. In 
calculating this average, we excluded all zero cells in the table, 
as they are fields for which wages cannot exist. For example, it is 
not possible to obtain a 0-10 rating with fewer than 20 years of 
experience. Hence the zeros in the table for that rating, for years 
of experience under 20, were excluded from our calculations.
    \22\ Rounded to nearest whole cent.
    \23\ It should be noted that for the 3 years 2020-2022 
(inclusively), we are implicitly applying our assumptions regarding 
in-scope population numbers and costs for the years 2022 and going 
forward. The same reasoning applies to analysis later on in this RA 
on the 2020-2022 periods examined for Policy Letter 02-20.

[[Page 68049]]



   Table 4--Labor Costs to In-Scope Applicants of Completing MMC Fee Waiver Documentation (Policy Letter 02-20
                               Impact) (Pre-Policy Letter Implementation Baseline)
----------------------------------------------------------------------------------------------------------------
                          Year                                Nominal               3%                 7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)..........................................             $6,139             $6,323             $6,569
Year 2 (2021)..........................................              6,139              6,139              6,139
Year 3 (2022)..........................................              6,139              5,960              5,737
Year 4 (2023)..........................................              6,139              5,787              5,362
Year 5 (2024)..........................................              6,139              5,618              5,011
Year 6 (2025)..........................................              6,139              5,454              4,683
Year 7 (2026)..........................................              6,139              5,296              4,377
Year 8 (2027)..........................................              6,139              5,141              4,091
Year 9 (2028)..........................................              6,139              4,992              3,823
Year 10 (2029).........................................              6,139              4,846              3,573
Year 11 (2030).........................................              6,139              4,705              3,339
Year 12 (2031).........................................              6,139              4,568              3,121
Year 13 (2032).........................................              6,139              4,435              2,917
Year 14 (2033).........................................              6,139              4,306              2,726
                                                        --------------------------------------------------------
    Total..............................................             85,948             73,570             61,468
        Annualized.....................................  .................              6,139              6,139
----------------------------------------------------------------------------------------------------------------


(2) Labor Costs to the Coast Guard To Evaluate and Process 
Documentation Showing Eligibility for MMC Fee Waivers

    Just as there are labor costs for applicants to submit 
documentation, there are labor costs to the Coast Guard to evaluate and 
process the documentation showing eligibility for an MMC fee waiver. 
The NMC estimates that the time to process the typical documentation is 
10 minutes, or 0.17 hours (10 / 60). The processing is performed by 
personnel holding positions at the government General Schedule (GS) pay 
scale of GS-07. According to Commandant Instruction 7310.1U, the hourly 
loaded rate for a GS-07 Coast Guard employee is $46.\24\ Thus, the 
labor cost to the Coast Guard to process the eligibility documentation 
is $7.82 (0.17 hours x $46 per hour) per applicant. As stated 
previously, the Coast Guard assumes 622 applicants would receive a MMC 
fee waiver each year. Given this, the Coast Guard predicts it would 
spend $4,864 per year to evaluate and process documentation provided by 
applicants showing eligibility for fee exemptions (622 x $7.82 = 
$4,864.04, rounded to the nearest whole dollar). The Coast Guard 
estimates that the aggregate 14-year cost to the Government is $48,702, 
with an annualized figure of $4,864, discounted at 7 percent. These 
numbers can be seen in table 5.
---------------------------------------------------------------------------

    \24\ Page two of enclosure 2 to Commandant Instruction 7310.1U 
(https://www.uscg.mil/Portals/0/NPFC/docs/7310/CI_7310_1U.pdf?ver=2020-04-06-135219-117).

Table 5--Labor Costs to Coast Guard To Evaluate Eligibility for MMC Fee Waiver (Policy Letter 02-20 Impact) (Pre-
                                     Policy Letter Implementation Baseline)
----------------------------------------------------------------------------------------------------------------
                          Year                                Nominal               3%                 7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)..........................................              4,864              5,010              5,205
Year 2 (2021)..........................................              4,864              4,864              4,864
Year 3 (2022)..........................................              4,864              4,722              4,546
Year 4 (2023)..........................................              4,864              4,585              4,248
Year 5 (2024)..........................................              4,864              4,451              3,971
Year 6 (2025)..........................................              4,864              4,322              3,711
Year 7 (2026)..........................................              4,864              4,196              3,468
Year 8 (2027)..........................................              4,864              4,074              3,241
Year 9 (2028)..........................................              4,864              3,955              3,029
Year 10 (2029).........................................              4,864              3,840              2,831
Year 11 (2030).........................................              4,864              3,728              2,646
Year 12 (2031).........................................              4,864              3,619              2,473
Year 13 (2032).........................................              4,864              3,514              2,311
Year 14 (2033).........................................              4,864              3,412              2,160
                                                        --------------------------------------------------------
    Total..............................................             68,097             58,291             48,702
        Annualized.....................................  .................              4,864              4,864
----------------------------------------------------------------------------------------------------------------


[[Page 68050]]

(3) Aggregated Labor Costs of Applicants and the Coast Guard Associated 
With Documentation of Eligibility for an MMC Fee Waiver

    The Coast Guard estimates the total costs related to the 
documentation of eligibility, for applicants and the Coast Guard (shown 
in tables 4 and 5), for the 14-year period following the implementation 
of the policy letter, in table 6. The estimated total costs to evaluate 
and process the documentation for the applicants and the Coast Guard 
for the 14-year period is $110,171, with an annualized cost of $11,003, 
discounted at 7 percent.

 Table 6--Total Costs to Applicants and Coast Guard To Evaluate and Process Documentation of Eligibility for MMC
             Fee Waiver (Impact of Policy Letter 02-20) (Pre-Policy Letter Implementation Baseline)
----------------------------------------------------------------------------------------------------------------
                          Year                                Nominal               3%                 7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)..........................................            $11,003            $11,333            $11,773
Year 2 (2021)..........................................             11,003             11,003             11,003
Year 3 (2022)..........................................             11,003             10,683             10,283
Year 4 (2023)..........................................             11,003             10,372              9,611
Year 5 (2024)..........................................             11,003             10,069              8,982
Year 6 (2025)..........................................             11,003              9,776              8,394
Year 7 (2026)..........................................             11,003              9,491              7,845
Year 8 (2027)..........................................             11,003              9,215              7,332
Year 9 (2028)..........................................             11,003              8,947              6,852
Year 10 (2029).........................................             11,003              8,686              6,404
Year 11 (2030).........................................             11,003              8,433              5,985
Year 12 (2031).........................................             11,003              8,187              5,593
Year 13 (2032).........................................             11,003              7,949              5,228
Year 14 (2033).........................................             11,003              7,717              4,886
                                                        --------------------------------------------------------
    Total..............................................            154,045            131,862            110,171
        Annualized.....................................  .................             11,003             11,003
----------------------------------------------------------------------------------------------------------------

(4) Elimination of Transfer Payments to Federal Government of Providing 
MMC Fee Waivers
    Prior to the implementation of the policy letter, applicants had to 
pay evaluation, examination, and issuance fees to obtain an MMC.\25\ 
The implementation of the policy letter eliminated this requirement for 
applicants eligible for a fee waiver. The elimination of the payment of 
MMC fees represents a loss of revenue to the Federal Government and an 
equal gain to eligible MMC applicants. This is referred to as a 
transfer payment. For those MMC fees that were eliminated by the policy 
letter, the Federal Government will face a shortfall in revenues. The 
revenues from those fees will need to be made up through alternative 
means (i.e., increased taxes, new or increased fees for other services 
or similar sources of revenue or in some other manner). Thus, there 
would be no net social benefit or cost with respect to transfer 
payments.
---------------------------------------------------------------------------

    \25\ Listed in table 3 of this RA.
---------------------------------------------------------------------------

    As stated previously, the average annual number of uniformed 
service members who received a waiver of MMC fees between 2020 and 2022 
(inclusively) was 622. The estimated average fee associated with the 
applications for these MMCs was $159 each.\26\ For this population, the 
cost was $99,134 per year in nominal terms (622 x $159.38 = $99,134.36, 
rounded to the nearest whole number). Thus, for the 14 years after the 
implementation of the policy letter, the Coast Guard estimates transfer 
payments would total $992,601, with an annualized amount of $99,134, 
discounted at 7 percent. These estimates can be seen in table 7.
---------------------------------------------------------------------------

    \26\ This number is rounded to the closest whole number. The 
number can be found in table 3 of this RA.

    Table 7--Transfer Payments--Eliminated (Impact of Policy Letter 02-20) (Pre-Policy Letter Implementation
                                                    Baseline)
----------------------------------------------------------------------------------------------------------------
                          Year                                Nominal               3%                 7%
----------------------------------------------------------------------------------------------------------------
Year 1 (2020)..........................................            $99,134           $102,108           $106,074
Year 2 (2021)..........................................             99,134             99,134             99,134
Year 3 (2022)..........................................             99,134             96,247             92,649
Year 4 (2023)..........................................             99,134             93,444             86,588
Year 5 (2024)..........................................             99,134             90,722             80,923
Year 6 (2025)..........................................             99,134             88,080             75,629
Year 7 (2026)..........................................             99,134             85,514             70,681
Year 8 (2027)..........................................             99,134             83,023             66,057
Year 9 (2028)..........................................             99,134             80,605             61,736
Year 10 (2029).........................................             99,134             78,258             57,697
Year 11 (2030).........................................             99,134             75,978             53,923
Year 12 (2031).........................................             99,134             73,765             50,395
Year 13 (2032).........................................             99,134             71,617             47,098
Year 14 (2033).........................................             99,134             69,531             44,017
                                                        --------------------------------------------------------
    Total..............................................          1,387,881          1,188,027            992,601

[[Page 68051]]

 
        Annualized.....................................  .................             99,134             99,134
----------------------------------------------------------------------------------------------------------------

Benefits of Policy Letter 02-20
    The Coast Guard has identified one qualitative benefit of Policy 
Letter 02-20 stemming from the elimination of the MMC fees referred to 
in Executive Order 13860. The fee waiver may provide eligible uniformed 
service members greater flexibility with respect to pursuing careers 
after leaving the uniformed services.

Part II. Proposed Rule

    The Coast Guard expects the proposed rulemaking to have an impact 
for two reasons. First, it would implement Policy Letter 02-20 in terms 
of required actions.\27\ Second, the proposed rulemaking only covers a 
subset of the affected population of the policy letter. The proposed 
rulemaking covers Selected or Ready Reservists while the policy letter 
covered all reservists who were on active duty in the past. As a 
result, the proposed rule covers a smaller portion of the affected 
population than the policy letter. However, as discussed previously, 
there is no available data to accurately estimate this difference. The 
reason there is no available data is because the NMC only collects 
data, on those receiving the NMC fee exemptions, on an aggregate basis. 
The NMC only collects data on the number of those who receive the fee 
exemption. The NMC does not collect more detailed data such as what 
branch they are in or whether they are in the reserves or not. Due to 
the smaller number of eligible applicants, the Coast Guard surmises 
that, when compared to the policy letter, the proposed rule would 
result in a small cost savings to the applicant and the Coast Guard for 
no longer needing to provide and review the documentation for the fee 
waiver.
---------------------------------------------------------------------------

    \27\ This is as opposed to in-scope population. The issues 
regarding the in-scope population are discussed below.
---------------------------------------------------------------------------

    The following cost analysis discusses the impact of the difference 
in the reservist populations on the number of MMC applications. 
However, due to a lack of data, it is not possible to quantify the cost 
difference.
Affected Population for Proposed Rule
    As the proposed rulemaking covers a narrower definition of 
reservists than Policy Letter 02-20, it may cover fewer than 622 
persons per year. Due to a lack of data, the Coast Guard assumes that, 
for the proposed rulemaking, the number of applicants for MMC 
exemptions is 622.
Cost Analysis for Proposed Rule
    Since the proposed rule covers a narrower population of reservists, 
it may decrease the number of MMC exemptions per year. Therefore, the 
Coast Guard assumes that the aggregate reduction in exemptions between 
the policy letter and the proposed rulemaking is unquantifiable and 
could be zero.\28\ In other words, the proposed rulemaking may have no 
impact on the number of exemption requests.
---------------------------------------------------------------------------

    \28\ See the cost difference discussions between the proposed 
rulemaking and the policy letter in the ``Cost and Transfer Impacts 
of Cost Analysis of Policy Letter 02-20'' section of the RA.
---------------------------------------------------------------------------

    If the number of applicants seeking exemptions under the proposed 
rulemaking is fewer than under the policy letter, there will be a 
decrease in the costs of the proposed rulemaking when compared to the 
costs of the policy letter. For every applicant that does not seek an 
exemption under the proposed rulemaking (as opposed to the policy 
letter), the proposed rule would result in a cost savings of $9.87 per 
applicant related to providing the necessary documentation, and a cost 
savings of $7.82, per applicant, for the Coast Guard related to 
reviewing that documentation. If the proposed rule results in any 
decrease in the number of individuals seeking an exemption from MMC 
fees, that amount would be $159 per applicant (the average MMC fee paid 
by an applicant).
    As stated previously, the proposed rulemaking is codifying an 
already existing policy letter. The only differences between the policy 
letter and the proposed rulemaking is that the proposed rulemaking 
covers a subset of the reserve forces that the policy letter covers. 
Due to a lack of data regarding this potential difference it is not 
possible to estimate differences in costs or benefits. The lack of data 
also makes it impossible to even determine whether there actually is a 
difference in populations between the proposed rulemaking and the 
policy letter. If there is a difference between the policy letter and 
proposed rulemaking in populations, the costs and cost savings 
differences would amount to the figures cited in the previous paragraph 
on a per individual basis.
Benefits of the Proposed Rule
    The Coast Guard believes the proposed rulemaking may reduce the 
burden on the affected public by increasing efficiency and transparency 
as a result of being in the Code of Federal Regulations, as opposed to 
being a standalone policy letter.\29\
---------------------------------------------------------------------------

    \29\ The proposed rulemaking would also incorporates greater 
flexibility with respect to pursuing careers. As this has already 
been achieved by issuance of the policy letter, independent of the 
proposed rulemaking, we only list the increased clarity and 
transparency that would be obtained through codification of the 
Coast Guard's MMC fee exemption policy through the proposed 
rulemaking.
---------------------------------------------------------------------------

Regulatory Alternatives Considered
    In developing this proposed rule, the Coast Guard considered three 
alternatives to the proposed exemption.
    The first alternative would be to not exempt the MMC fees listed in 
table 1 of 46 CFR 10.219(a), as shown in table 3 of this proposal. As 
this alternative would not fulfill the requirements of Executive Order 
13860 or NDAA 2020, the Coast Guard rejected this alternative.
    The second alternative would be to make no change to the user fee 
schedule for members of the uniformed services, but to establish an MMC 
fee reimbursement program for uniformed service members. Under this 
alternative, the population applying for MMCs would initially pay MMC 
fees and then file a request for reimbursement with their service in 
order to be compensated for the cost. Under this alternative, the fee 
compensation process would be a greater burden than the proposed rule's 
framework for eligible applicants, who would pay MMC fees out of pocket 
and then request compensation through their service. Filing a request 
for reimbursement would increase the amount of documentation applicants 
would be required to file and would add an administrative burden to the 
services in establishing and implementing reimbursement programs. The 
Coast Guard rejected this alternative.
    The third alternative would be to extend the exemption only to the 
portion of the population consisting of members of the Selected Reserve 
of the

[[Page 68052]]

Ready Reserve of any of the armed forces (Army National Guard of the 
United States, Army Reserve, Navy Reserve, Marine Corps Reserve, Air 
National Guard of the United States, Air Force Reserve and Coast Guard 
Reserve), and the Ready Reserve Corps of the USPHS who are on ``active 
duty,'' \30\ while excluding those simply in an ``active status.'' \31\ 
The Coast Guard rejected this alternative, as it does not best support 
the intent of Executive Order 13860 and NDAA 2020 to help attract 
active duty service members to obtain an MMC, and provide meaningful, 
well-paying jobs to U.S. veterans in support of U.S. national security 
requirements.
---------------------------------------------------------------------------

    \30\ Active duty is defined here as under 10 U.S.C. 101(d)(1). 
Under that section it means ``full-time duty in the active military 
service of the United States. Such term includes full-time training 
duty, annual training duty, and attendance, while in the active 
military service, at a school designated as a service school by law 
or by the Secretary of the military department concerned. Such term 
does not include full-time National Guard duty.''
    \31\ All members of the Ready Reserve are in active status. 
Selected Reserves are only part of that group. Individual ready 
reserves are also active status.
---------------------------------------------------------------------------

    The Coast Guard believes that the intent of Executive Order 13860 
and NDAA 2020 is best supported through a fourth alternative--extending 
the eligibility for MMC fee exemptions to members of the Selected 
Reserve of the Reserves of the Army, Navy, Air Force, Marines, Coast 
Guard and Space Force (such as Selected and Ready Reservists) and not 
limiting eligibility to only members of the uniformed services on 
active duty. This alternative best supports the intent of Executive 
Order 13860 and the NDAA 2020 by ensuring a wide range of service 
members who wish to pursue an MMC are provided support and by expanding 
the population eligible to receive an exemption from MMC fees, and 
ultimately resulting in a larger number of credentialed mariners 
available to support U.S national security requirements and provide 
meaningful, well-paying jobs to U.S. veterans.

B. Small Entities

    Below are the small business entity impacts for Policy Letter 02-20 
and for the proposed rulemaking on a separate basis.
Small Business Impacts of Policy Letter 02-20
    Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, the Coast 
Guard has considered whether Policy Letter 02-20 would have a 
significant economic impact on a substantial number of small entities. 
The term ``small entities'' comprises small businesses, not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    The Policy Letter waived fees for the evaluation of an MMC 
application, the administration of a required examination, and the 
issuance of an MMC for members of the uniformed services. Since the 
impacts discussed above in the RA affect individuals and not business 
(firms), not-for-profit entities and State or Local governmental 
jurisdictions, the proposed rule would not impact small entities as 
defined by the Small Business Administration in 13 CFR 121.201. Based 
on this analysis, this proposed rule would not affect a substantial 
number of small entities.
Small Business Impacts of the Proposed Rulemaking
    This proposed rulemaking codifies certain actions taken in the 
previously implemented Policy Letter 02-20. In addition, the population 
in the proposed rulemaking is defined more narrowly than in the policy 
letter. However, due to the fact that the proposed rulemaking, like the 
policy letter, only affects individuals and not business (firms), not-
for-profit entities and State or Local governmental jurisdictions, the 
proposed rule would not impact small entities as defined by the Small 
Business Administration in 13 CFR 121.201. Based on this analysis, this 
proposed rule would not affect a substantial number of small entities.
    For the aforementioned reasons, the Coast Guard certifies under 5 
U.S.C. 605(b) that Policy Letter 02-20 and this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities. If you think that your business, organization, or 
governmental jurisdiction qualifies as a small entity and that this 
proposed rule would have a significant economic impact on it, please 
submit a comment to the docket at the address listed in the ADDRESSES 
section of this preamble. In your comment, explain why you think it 
qualifies and how and to what degree this proposed rule would 
economically affect it.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996, Public Law 104-121, we want to assist small 
entities in understanding this proposed rule so that they can better 
evaluate its effects on them and participate in the rulemaking. If the 
proposed rule would affect your small business, organization, or 
governmental jurisdiction and you have questions concerning its 
provisions or options for compliance, please call or email the person 
in the FOR FURTHER INFORMATION CONTACT section of this proposed rule. 
The Coast Guard will not retaliate against small entities that question 
or complain about this proposed rule or any policy or action of the 
Coast Guard.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

D. Collection of Information

    Policy Letter 02-20 called for a change to an existing collection 
of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 
3501-3520. As defined in 5 CFR 1320.3(c), ``collection of information'' 
comprises reporting, recordkeeping, monitoring, posting, labeling, and 
other similar actions. The title and description of the information 
collections, a description of those who must collect the information, 
and an estimate of the total annual burden follow. The estimate covers 
the time for reviewing instructions, searching existing sources of 
data, gathering and maintaining the data needed, and completing and 
reviewing the collection.
    The information collection associated with Policy Letter 02-20 is 
the currently approved collection, OMB Control Number 1625-0040, 
``Application for Merchant Mariner Credential (MMC), Application for 
Merchant Mariner Medical Certificate, Application for Merchant Mariner 
Medical Certificate for Entry Level Ratings, Small Vessel Sea Service 
Form, DOT/USCG Periodic Drug Testing Form, Disclosure Statement for 
Narcotics, DWI/DUI, and/or Other Convictions, Merchant Mariner Medical 
Certificate, Recognition of Foreign Certificate.'' In order to process 
the fee exemptions proposed in this rule, the Coast Guard would require 
eligible applicants for an MMC to provide documentation of their 
eligibility for a fee exemption.\32\ In

[[Page 68053]]

addition, it would require the NMC to evaluate and process this 
documentation part of an evaluation for an MMC.
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    \32\ In order to provide maximum flexibility to applicants, for 
the proposed rulemaking the acceptable forms of documentation will 
be provided in updated guidance that the Coast Guard is planning to 
publish when a final rule is published.
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    With respect to the proposed rulemaking, no new or additional 
documentation related to collection of information would be required 
(relative to the policy letter). The number of respondents may decrease 
from the policy letter. This is because the proposed rulemaking 
codifies what the policy letter currently requires in terms of 
collection of information documentation and applies to a potentially 
narrower in-scope population.
    Title: Application for Merchant Mariner Credential (form CG-719B), 
Application for Medical Certificate (form CG-719K), Application for 
Medical Certificate, Short Form (form 719K/E), Small Vessel Sea Service 
Form (form CF-719S), DOT/USCG Periodic Drug Testing Form (form CG-
719P), Disclosure Statement for Narcotics, DWI/DUI, and/or Other 
Convictions (form CG-719C).
    OMB Control Number: 1625-0040.
    Summary of the Collection of Information: The Coast Guard currently 
collects information from individuals seeking to obtain an MMC, renew 
an MMC, and obtain a merchant mariner medical certificate. Policy 
Letter 02-20 would require applicants who are members of the uniformed 
services (622 persons per year), and who wish to be exempted from MMC 
fees, to provide documentation of eligibility for the MMC fee exemption 
as part of an MMC application (form CG-719B).
    As the proposed regulation only currently codifies current 
practices, regarding the collection of information, stated in Policy 
Letter 02-20 (and makes no changes to these requirements), as well as 
having between the same or fewer applicants than the MMC fee waivers, 
it would be expected to have no impact on the collection of 
information. The only reason for any reduction in documentation would 
be due to the fact that the proposed rulemaking covers a narrower in-
scope definition than does the policy letter. However, there is no data 
available to the Coast Guard to determine how small the decrease would 
be or even, for that matter, if there even is one.
    Need for Information: Title 46 CFR, section 10.217(a), requires MMC 
applicants to apply at one of the Coast Guard's 17 Regional Exam 
Centers, located nationwide or any other location designated by the 
Coast Guard. MMCs are established for individuals who are required to 
hold a credential under 46 U.S.C, subtitle II. The Coast Guard has the 
responsibility of issuing MMCs to applicants found qualified as to age, 
character, and habits of life, experience, professional qualifications, 
and physical fitness. The instruments contained within OMB Control No. 
1625-0040 serve as a means for the applicant to apply for an MMC and a 
merchant mariner medical certificate.
    Proposed Use of Information: The Coast Guard conducts this 
collection of information solely for the purposes of determining 
eligibility for issuance of an MMC in accordance with applicable 
statutes and regulations. This evaluation is performed on occasion, 
meaning as submitted by the respondents when they apply for an MMC. 
Applicants for an MMC must apply using the Form CG-719-B for an 
original MMC and every 5 years for renewal, or when seeking a new 
endorsement or a raise of grade of an existing endorsement. The Coast 
Guard evaluates the collected information to determine whether 
applicants are qualified to serve under the authority of the requested 
credential with respect to their professional qualifications and 
suitability.
    Description of the Respondents: All applicants for an MMC, whether 
original, renewal, duplicate, raise of grade, or to add a new 
endorsement on a previously issued MMC, are included in this 
collection. The population covered by Policy Letter 02-20 includes the 
number of uniformed service members applying for MMCs who receive an 
exemption of MMC fees (622 annually). The population covered by the 
proposed rulemaking is expected to remain the same or be less, because 
the proposed rulemaking codifies the Policy Letter in terms of 
documentation requirements but applies to a narrower in-scope 
population.
    Number of Respondents: The number of respondents from the policy 
letter are estimated at 622 per year. The proposed rule would either 
not increase the annual number of respondents or be expected to only 
decrease them.\33\
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    \33\ Information collections normally list the total number of 
annual respondents. However, there is currently a periodic renewal 
under review at OMB, and another proposed rulemaking expected to 
change the number of annual respondents is expected to be submitted 
to OMB. Therefore, the total number of annual respondents is not 
included in this RA.
---------------------------------------------------------------------------

    Frequency of Response: The frequency of response is once per year.
    Burden of Response: The collection of information from both the 
policy letter and the proposed rule requires the population to spend 15 
minutes (0.25 hours) to provide evidence of eligibility for an MMC fee 
exemption (622 persons per year), which would be submitted with the 
requisite Form CG-719B.
    Estimate of Total Annual Burden: The Coast Guard estimates that the 
total annual burden, for the implementation of the policy letter, has 
increased by 156 (0.25 x 622 = 155.5, rounded up to nearest whole 
number) hours.\34\
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    \34\ As there is currently a periodic renewal under review at 
OMB, and another proposed rulemaking that is expected to change the 
total annual burden is expected to be submitted to OMB, it is not 
possible to list the total current annual burden.
---------------------------------------------------------------------------

    As the proposed rulemaking covers the same documentation and has a 
narrower definition with respect to in-scope population, it is expected 
to have either no impact on these hours or to reduce the burden level 
already existing under the policy letter.
    As required by 44 U.S.C. 3507(d), we will submit a copy of this 
proposed rule to OMB for its review of the collection of information. 
We ask for public comment on the proposed collection of information to 
help us determine, among other things--
     How useful the information is;
     Whether the information can help us perform our functions 
better;
     How we can improve the quality, usefulness, and clarity of 
the information;
     Whether the information is readily available elsewhere;
     How accurate our estimate is of the burden of collection;
     How valid our methods are for determining the burden of 
collection; and
     How we can minimize the burden of collection.
    If you submit comments on the collection of information, submit 
them to both the OMB and to the docket where indicated under ADDRESSES.
    You need not respond to a collection of information unless it 
displays a currently valid control number from OMB. Before the Coast 
Guard could enforce the collection of information requirements in this 
proposed rule, OMB would need to approve the Coast Guard's request to 
collect this information.

E. Federalism

    A rule has implications for federalism under Executive Order 13132 
(Federalism) if it has a substantial direct effect on States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. We have analyzed this proposed rule under Executive Order 
13132 and have determined that it is consistent with the fundamental 
federalism principles and

[[Page 68054]]

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 United States v. Locke, 529 U.S. 89, 99-101 (2000).
    Additionally, for rules with federalism implications and preemptive 
effect, Executive Order 13132 specifically directs agencies to consult 
with State and local governments during the rulemaking process. If you 
believe this proposed rule would have implications for federalism under 
Executive Order 13132, please call or email the person listed in the 
FOR FURTHER INFORMATION CONTACT section of this preamble.

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

G. Taking of Private Property

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

H. Civil Justice Reform

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

I. Protection of Children

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

J. Indian Tribal Governments

    This proposed rule does not have tribal implications under 
Executive Order 13175 (Consultation and Coordination with Indian Tribal 
Governments) because it would not have a substantial direct effect on 
one or more Indian tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes.

K. Energy Effects

    We have analyzed this proposed rule under Executive Order 13211 
(Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use). We have determined that it is not a 
``significant energy action'' under 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 proposed rule does not use technical standards. Therefore, we 
did not consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this proposed rule under Department of Homeland 
Security Management Directive 023-01, Rev. 1, associated implementing 
instructions, and Environmental Planning COMDTINST 5090.1 (series), 
which guide the Coast Guard in complying with the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made 
a preliminary determination that this action is one of a category of 
actions that do not individually or cumulatively have a significant 
effect on the human environment. A preliminary Record of Environmental 
Consideration supporting this determination is available in the docket. 
For instructions on locating the docket, see the ADDRESSES section of 
this preamble. This proposed rule would be categorically excluded under 
paragraphs L54 and L56 of Appendix A, Table 1 of DHS Instruction Manual 
023-01-001-01, Rev. 1. The categorical exclusion (CATEX) L54 pertains 
to regulations which are editorial or procedural; and CATEX L56 
pertains to regulations concerning the training, qualifying, licensing, 
and disciplining of maritime personnel.
    This proposed rule involves the fees for MMCs and associated 
endorsements. We seek any comments or information that may lead to the 
discovery of a significant environmental impact from this proposed 
rule.

List of Subjects in 46 CFR Part 10

    Penalties, Personally identifiable information, Reporting and 
recordkeeping requirements, Seamen.

    For the reasons discussed in the preamble, the Coast Guard proposes 
to amend 46 CFR part 10 as follows:

0
1. The authority citation for part 10 is revised to read as follows:

    Authority:  14 U.S.C. 503; 31 U.S.C. 9701; 46 U.S.C. 2101, 2103, 
2104, 2110; 46 U.S.C. chapters 71, 73, and 75; 46 U.S.C. 7701, 8903, 
8904, and 70105; Executive Order 10173; DHS Delegation No. 00170.1, 
Revision No. 01.3.

0
2. Amend Sec.  10.219 by adding paragraph (m) to read as follows:


Sec.  10.219  Fees.

* * * * *
    (m) Members of the uniformed services. A qualified applicant under 
this subsection is exempt from paying evaluation, examination, or 
issuance fees for an MMC as described in (b)(2) of this section.
    (1) For purposes of paragraph (m) of this section, qualified 
applicant means an individual who, at the time of submission of an 
application, is:
    (i) A member of the uniformed services listed in 10 U.S.C. 
101(a)(5) on active duty;
    (ii) A member of the Selected Reserve, as described in 10 U.S.C. 
10143(a), of a reserve component named in 10 U.S.C. 10101; or
    (iii) A member of the Ready Reserve Corps of the Public Health 
Service established in 42 U.S.C. 204(a)(1).

[[Page 68055]]

    (2) For purposes of paragraph (m)(1)(i) of this section:
    (i) For the members of the armed forces, as defined in 10 U.S.C. 
101(a)(4), active duty is defined by 10 U.S.C. 101(d)(1);
    (ii) For the commissioned corps of the National Oceanic and 
Atmospheric Administration, active duty has the same meaning as found 
in 33 U.S.C. 3002(b)(1); and
    (iii) For the members of the commissioned corps of the Public 
Health Service, active duty has the meaning defined in 42 CFR 21.72(f).

    Dated: September 21, 2023.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Prevention 
Policy.
[FR Doc. 2023-21660 Filed 10-2-23; 8:45 am]
BILLING CODE 9110-04-P


