FR Doc 03-26350

[Federal Register: October 22, 2003 (Volume 68, Number 204)]
[Rules and Regulations]
[Page 60559-60570]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc03-16]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 26, 161, 164, and 165

[USCG-2003-14757]
RIN 1625-AA67

Automatic Identification System; Vessel Carriage Requirement

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: This final rule adopts, with changes, the temporary interim
rule that amends port and waterway regulations and implements the
Automatic Identification System (AIS) carriage requirements of the
Maritime Transportation Security Act of 2002 (MTSA) and the
International Maritime Organization requirements adopted under
International Convention for the Safety of Life at Sea, 1974, (SOLAS)
as amended.
This rule is one in a series of final rules published in today's
Federal Register. To best understand this rule, first read the final
rule titled ``Implementation of National Maritime Security
Initiatives'' (USCG-2003-14792), published elsewhere in today's Federal
Register.

DATES: This final rule is effective November 21, 2003. On July 1, 2003,
the Director of the Federal Register approved the incorporation by
reference of certain publications listed in this final rule.

ADDRESSES: Comments and material received from the public, as well as
documents mentioned in this preamble as being available in the docket,
are part of docket USCG-2003-14757 and are available for inspection or
copying at the Docket Management Facility, U.S. Department of
Transportation, room PL-401, 400 Seventh Street SW., Washington, DC,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. You may also find this docket on the Internet at http://dms.dot.gov
.
You may inspect the material incorporated by reference at room
1409, U.S. Coast Guard Headquarters, 2100 Second Street SW.,
Washington, DC 20593-0001 between 8:30 a.m. and 3:30 p.m., Monday
through Friday, except Federal holidays. The telephone number is 202-
267-6277. Copies of the material are available as indicated in the
``Incorporation by Reference'' section of this preamble.

FOR FURTHER INFORMATION CONTACT: If you have questions on this final
rule, call Mr. Jorge Arroyo, U.S. Coast Guard Office of Vessel Traffic
Management (G-MWV), by telephone 202-267-6277, toll-free telephone 1-800-842-8740 ext. 7-6277, or electronic mail jarroyo@comdt.uscg.mil. If
you have questions on viewing the docket, call Andrea M. Jenkins,
Program Manager, Docket Operations, Department of Transportation, at
telephone 202-366-0271.

SUPPLEMENTARY INFORMATION:

Regulatory Information

On July 1, 2003, we published a temporary interim rule with request
for comments and notice of public meeting titled ``Automatic
Identification System; Vessel Carriage Requirement'' in the Federal
Register (68 FR 39353). This temporary interim rule was one of a series
of temporary interim rules on maritime security published in the July
1, 2003, issue of the Federal Register. On July 16, 2003, we published
a document correcting typographical errors and omissions in that rule
(68 FR 41913).
We received a total of 438 letters in response to the six temporary
interim rules by July 31, 2003. The majority of these letters contained
multiple comments, some of which applied to the docket to which the
letter was submitted, and some which applied to a different docket. For
example, we received several letters in the docket for the temporary
interim rule titled ``Implementation of National Maritime Security
Initiatives'' that contained comments in that temporary interim rule,
plus comments on the ``Automated Identification System; Carriage
Requirement'' temporary interim rule. We have addressed individual
comments in the preamble to the appropriate final rule. Additionally,
we had several commenters submit the same comment to all six dockets.
We counted these duplicate submissions as only one letter, and we
addressed each comment within that letter in the preamble for the
appropriate final rule. Because of statutorily imposed time constraints
for publishing these regulations, we were unable to consider, in this
Final Rule, comments received after the period for receipt of comments
closed on July 31, 2003. Copies of late-received comments on AIS will
be placed into the docket for the separate AIS Notice and request for
comments that was published on July 1, 2003 (USCG 2003-14878; 68 FR
39369).
A public meeting was held in Washington, DC, on July 23, 2003, and
approximately 500 people attended. Comments from the public meeting are
also included in the ``Discussion of Comments and Changes'' section of
this preamble. A transcript of this meeting is available in the docket,
where indicated under ADDRESSES.
In order to focus on the changes made to the regulatory text since
the temporary interim rule was published, we have adopted the temporary
interim rule and set out, in this final rule, only the changes made to
the temporary interim rule. We will place a copy of the unofficial
complete regulatory text in

[[Page 60560]]

the docket, where indicated under ADDRESSES.

Public Meetings for Rulemakings Related to Vessel Traffic Service

The Coast Guard held a public meeting on October 28, 1998, in New
Orleans, Louisiana. The meeting was announced in a notice published in
the Federal Register on September 18, 1998 (63 FR 49939). This meeting
gave the Coast Guard the opportunity to discuss the Vessel Traffic
Service (VTS) concept on the Lower Mississippi River and the envisioned
use of automatic identification system technology in the VTS. At this
1998 meeting, we reported the preliminary results of tests conducted on
the Lower Mississippi River using precursor AIS. The proposed VTS on
the Lower Mississippi River is not discussed in this rulemaking because
it is the subject of a separate rulemaking titled ``Vessel Traffic
Service Lower Mississippi River'' (65 FR 24616, April 26, 2000; docket
[USCG-1998-4399]). We copied those comments regarding AIS that were
submitted to the VTS Lower Mississippi River docket and placed those
copies in the docket for this final rule for historical purposes.
However, most of those comments were not addressed in the preamble
discussion of the temporary interim rule because they were no longer
applicable or because they addressed a previous version of AIS and not
the version required by this final rule.
Over the past few years, the Coast Guard has made AIS presentations
at various public forums including Federal advisory committee meetings
(Towing Safety Advisory Committee, National Offshore Safety Advisory
Committee, Houston-Galveston Navigation Safety Advisory Committee and
Navigation Safety Advisory Council). Moreover, the AIS-based Ports and
Waterways Safety System project being installed at the VTS Lower
Mississippi River is regularly discussed at the Lower Mississippi River
Waterway Safety Advisory Committee meetings.
The Houston-Galveston Navigation Safety Advisory Committee and
Lower Mississippi River Waterway Safety Advisory Committee are
federally chartered advisory committees charged with making
recommendations to the Coast Guard on matters relating to the safe and
efficient transit of vessels on their respective waterways. These open
forums have afforded the public, particularly those in the Gulf of
Mexico and Mississippi River areas, the opportunity to comment on both
VTS Lower Mississippi River and AIS issues. The public's input was
taken into account throughout this final rule.

Background and Purpose

Section 5004 of the Oil Pollution Act of 1990, as codified in 33
U.S.C. 2734, directed the Coast Guard to operate additional equipment,
as necessary, to provide surveillance of tank vessels transiting Prince
William Sound, Alaska. We have done so since 1994 through a system then
known as ``Automated Dependent Surveillance.'' Advances have taken
place with this technology, now referred to as AIS. Section 102 of the
Maritime Transportation Security Act of 2002 (MTSA) mandates that AIS
be installed and operating on most commercial and passenger vessels on
all navigable waters of the United States.
The version of AIS required by this final rule automatically
broadcasts vessel and voyage-related information that is received by
other AIS-equipped ships and shore stations. In the ship-to-shore mode,
AIS enhances maritime domain awareness and allows for the efficient
exchange of vessel traffic information that previously was only
available via voice communications with a VTS. In ship-to-ship mode, an
AIS provides essential information to other vessels, such as name,
position, course, and speed that is not otherwise readily available on
board vessels. In either mode, an AIS enhances the mariner's
situational awareness, makes possible the accurate exchange of
navigational information, mitigates the risk of collision through
reliable passing arrangements, and facilitates vessel traffic
management, while simultaneously reducing voice radiotelephone
transmissions.
AIS has achieved acceptance through worldwide adoption of
performance and technical standards developed to ensure commonality,
universality, and inter-operability. These recommendations have now
been established and adopted as standards by the following diverse
international bodies: The International Maritime Organization (IMO),
the International Telecommunications Union (ITU), and the International
Electrotechnical Commission (IEC). Further, installation of such
equipment is required on vessels subject to the International
Convention for the Safety of Life at Sea, 1974, (SOLAS), as amended.
The ``Automatic Identification System; Vessel Carriage
Requirement'' temporary interim rule provides a comprehensive
discussion on the applicability and compliance dates, AIS testing, the
need for standardization, existing AIS-like systems, and the ports and
waterways safety system. This information will not be duplicated in
this final rule, but remains available at the Federal Register (68 FR
39353) and in the docket for this rule (USCG-2003-14757).

Discussion of Comments and Changes

Comments from each of the temporary interim rules and from the
public meeting held on July 23, 2003, have been grouped by topic and
addressed within the preambles to the applicable final rules. If a
comment applied to more than one of the six rules, we discussed it in
the preamble to each of the final rules that it concerned. Several
comments were submitted to a docket that included topics not addressed
in that particular rule, but were addressed in one or more of the other
rules. This was especially true for several comments submitted to the
docket of part 101 (USCG-2003-14792). In such cases, we discussed the
comments only in the preamble to each of the final rules that concerned
the topic addressed.

General

One commenter requested that we extend the compliance date for
passenger and fishing vessels to December 31, 2005, to take advantage
of prospective, potentially lower cost, AIS devices.
We believe the costs of AIS will continue to decrease as more
manufacturers, models and types are brought to market. We also welcome
all efforts of international standards bodies and manufacturers, to
date, to design and produce cost-effective AIS equipment. As these
improved or less costly devices are submitted for type approval, the
Coast Guard will decide whether they meet our requirements and the
intent of the MTSA, and if need be, we will amend this rule accordingly
to permit their use.
Twenty-one commenters stated various reasons why they opposed a
carriage requirement for AIS. Three commenters stated that AIS would
not provide increased security to vessels or ports, arguing that
knowing the location of larger, slower vessels does not eliminate any
threat and that smaller, more agile recreational vessels are more
accessible to terrorists. Seven commenters stated that AIS has very
limited security benefits, is technically limited due to its line-of-
sight range, and to the extent it does work, it works equally well for
governmental authorities and those who choose to do harm. Four
commenters stated that AIS installation will not provide vessel
operators with information on the identity of other commercial craft
that is

[[Page 60561]]

not already available through basic visual or radio means. Three
commenters stated that VTS areas would not receive information on non-
applicable vessels that could pose threats. Eight commenters stated
that the estimated cost would be a burden that most companies would be
unable to bear. One commenter stated that the installation would
distract the captain's attention from surrounding non-commercial
recreational traffic and will clutter the pilothouse. One commenter
stated that AIS is an outdated technology.
We acknowledge these limitations; however, we believe that AIS has
the potential to mitigate collisions and the risk of a transportation
security incident, as defined in the MTSA. We recognize that a single
sensor, such as AIS, will not likely prevent a transportation security
incident alone, but if AIS can have a mitigating effect on just a
single collision or transportation security incident, the security
benefit could be significant. Furthermore, under the MTSA, the Coast
Guard is required to implement AIS carriage.
One commenter stated that costs for annual repairs and for the
replacement of the AIS unit need to be calculated.
The Regulatory Assessment and Initial Regulatory Flexibility Act
Analysis, available in the docket for this rule (USCG-2003-14757),
included detailed estimates for annual repairs and periodic
replacement. The summary included in the temporary interim rule
reflects these costs.
One commenter believes it is inappropriate to analyze the economic
impact of the cost using the ``percentage of annual revenue that is
first-year AIS cost,'' stating that it would be more appropriate to
analyze the impact of the cost as a percentage of the net revenue of
small businesses.
We recognize that using net revenues to determine the cost of this
rule to small businesses would provide a more accurate picture of the
effects of this rule on those entities, however this information is not
available to the public. Thus, we used the information that is publicly
available, the percentage of annual revenue, to analyze the economic
impact of the cost of implementation on small businesses.
One commenter stated that our regulatory analysis is unclear as to
whether the benefit assessment for AIS accounts for domestic vessels
operating in VTS areas only, or applies to the entire inland waterway
system.
In order to quantify the benefits of AIS implementation, the Coast
Guard reviewed Marine Casualty Incident Reports from 1993-1999 that
involved the vessel populations affected by the temporary interim rule.
This included domestic vessels operating in VTS areas, not the entire
inland waterway system.
One commenter agreed with our economic analysis regarding AIS and
with our assessment that the cost of AIS installation for the domestic
fleet far outweighs the benefit.
While monetized safety benefits produced a low benefit-cost ratio,
Congress mandated an AIS carriage requirement that included domestic
vessels in 46 U.S.C. 70114 of the MTSA. In addition, we believe that
AIS is critical to maritime domain awareness and, although our
assessment could not quantify or monetize the benefits of the security
contribution of AIS, we believe it has the potential to mitigate the
consequences of a transportation security incident as described in the
MTSA.
Nine commenters noted that AIS is duplicative of existing systems
because fishing vessels are currently equipped with Vessel Monitoring
System (VMS), which already fulfills the AIS monitoring aspect. Two
commenters requested that existing satellite tracking systems, such as
the VMS used by the National Marine Fisheries Service (NMFS) be allowed
as an alternative to the AIS requirement.
As discussed in the ``Existing AIS-Like Systems'' section of the
preamble to the temporary interim rule, there are many precursor and
competing tracking systems in use today, VMS is just one of them. VMS
is a system required by the NMFS as a means to monitor and enforce
compliance with NMFS requirements. VMS relies upon International Mobile
Satellite Organization (INMARSAT C) communication service providers to
schedule or poll, one-way, traffic reports from the vessel to NMFS.
AIS, conversely, is an open, two-way, non-proprietary system that is
autonomous and self-organizing, requiring no shoreside commands for its
operations. AIS is also a short-range VHF-FM system that provides a
vessel's location more frequently than VMS. This permits AIS to be both
a safety and security tool. Furthermore, AIS is not limited to one-way
communications or tied to proprietary software or communications
services, and AIS signals can be monitored from shore and from other
vessels to provide greater maritime domain awareness.
One commenter recommended that we rewrite the final rule in plain
language so that vessel owners and operators can easily understand the
carriage requirements and technical specifications.
We have attempted to make these final regulations as clear as
possible. However, using plain language would require a complete
rewrite of 33 CFR parts 26, 161, 164, and 165, which is beyond the
scope of this rule.
Two commenters requested that the Coast Guard allow industry
alternative programs as provided for in both facility and vessel
security rules.
We are unable, at this time, to approve industry alternative
programs for AIS. We do believe that it is a subject worthy of
consideration, and welcome comments and suggestions on potential
alternative programs for the AIS carriage requirement. We have
published in the Federal Register (68 FR 55643) a notice reopening the
comment period on our previously published notice titled ``Automatic
Identification System; Expansion of Carriage Requirements for U.S.
Waters'' (USCG 2003-14878; July 1, 2003; 68 FR 39369). Please send your
comments on the use of an alternative program to that docket.
One commenter stated that the AIS regulation represents an unfunded
mandate, stating that further discussion of funding for AIS purchase
and maintenance is needed because vessel owners should not be expected
to fund this.
As stated in the temporary interim rule and below, this final rule
is exempted from assessing the effects of the regulatory action as
required by the Unfunded Mandate Reform Act because it is necessary for
the national security of the United States (2 U.S.C. 1503(5)). We are
aware of the burden this rule places on industry. In order to re-
evaluate this burden, we have amended the applicability section for
this final rule (discussed below), and will reopen the comment period
on our previously published notice titled ``Automatic Identification
System; Expansion of Carriage Requirements for U.S. Waters'' (USCG
2003-14878; July 1, 2003; 68 FR 39369).
One commenter stated that vessels carrying AIS equipment should be
released from liability whenever they are involved in a collision with
a vessel that is not carrying AIS equipment.
While we appreciate the points raised concerning potential
liability, the issue of liability is beyond the scope of this rule. No
provision of the MTSA addresses liability, either to expressly limit
liability or to address immunity from liability. Determinations of
liability require a fact-laden inquiry on a case-by-case basis, and
typically require complex analyses regarding matters such as choice of
law, contracts,

[[Page 60562]]

and international conventions. Additionally, we note that carrying AIS
does not relieve mariners from following all applicable navigation
rules, and therefore may not be enough reason to relieve vessel owners
and operators of liability.

Applicability

Five commenters supported our approach to AIS implementation. Three
commenters expressed enthusiastic support for the AIS system, and
agreed with the time schedule and criteria for SOLAS and domestic AIS
carriage. Two commenters supported the decision to phase-in the
requirements of the AIS regulation, and supported implementing the AIS
requirements as a security measure, rather than as a safety tool.
One commenter asked whether U.S. government research ships are
required to have AIS installed. If yes, the commenter asked what the
time frame required for this installation is. Another commenter asked
whether law enforcement and military vessels will carry AIS.
Sections 164.01(c) and 164.46(a)(1) were amended or added by the
temporary interim rule (68 FR 39367) and state that the rules do not
apply to government or non-commercial vessels. Therefore, these
regulations do not apply to military, government, or public vessels so
long as they are not used commercially. We do, however, encourage these
vessels to voluntarily use AIS, as operational conditions may warrant,
as will the Coast Guard fleet.
One commenter requested that the implementation date for AIS in the
St. Mary's River Vessel Traffic Service (VTS) area be changed to
January 31, 2005, from December 31, 2003, as published in the temporary
interim rule, arguing that the December 31, 2003, implementation date
is impractical based on vessel operations in the locks.
We agree that having the implementation deadline towards the end of
a limited shipping season is impractical, but we do not agree with
changing the date to January 31, 2005, because that date is beyond the
deadline date established by the MTSA. In response, we have amended 33
CFR 164.46(a)(3) to apply uniformly to all VTS areas by December 31,
2004. We have made conforming amendments to Sec. Sec. 164.43 and
165.1704 to reflect this change.
We received 47 comments requesting changes to the applicability of
the AIS carriage requirement. Two commenters requested that passenger
vessels be exempt from this rule. Two commenters asked why AIS is being
required on vessels 65 feet and over. Four commenters disagreed in
general with the applicability of the AIS rule. Two commenters asked
the Coast Guard to suspend the AIS requirements for the domestic fleet.
Two commenters asked that we exempt commercial marine assistance
vessels that operate in a limited geographical area. One commenter
requested that we exempt sailing vessels from the AIS requirement. One
commenter suggested that we exempt charter boats. Eleven commenters
requested that fishing vessels also be exempt from or be given a waiver
from this rule, citing high costs and minimal benefits. Eight
commenters urged the Coast Guard to amend the AIS carriage requirement
to apply to passenger vessels carrying more than 150 passengers, not 50
passengers, stating that this would ease the regulatory burden for the
most economically vulnerable companies, improve the cost-benefit ratio
for the domestic fleet, and align with the applicability requirements
in 33 CFR subchapter H. Ten commenters asked whether the requirements
for AIS carriage apply if a vessel spends periods of reduced operations
in a VTS area but conducts commercial operations only outside the VTS.
One of these commenters further added that the AIS requirement could
impose unintended consequences on VTS ports and shipyards because
owners may now decide to moor their vessels to non-VTS areas.
Congress mandated an AIS carriage requirement on commercial vessels
over 65-feet in length in 46 U.S.C. 70114, and provided explicit
deadlines for AIS in the MTSA, Sec. 102(e). Under the MTSA, the Coast
Guard is granted discretion as to which passenger vessels should be
required to have AIS. In crafting the temporary interim rule, the Coast
Guard took into consideration that Vessel Bridge-to-Bridge
Radiotelephone and Vessel Movement Reporting System (VMRS) requirements
apply to passenger vessels over 100 gross tonnage and those
certificated to carry 50 passengers, and that this population comprises
a large segment of VTS users. We believe that AIS is a key component in
providing safety and security in VTS and VMRS areas and should cover as
many vessels as practicable, including smaller passenger vessels.
Nevertheless, the Coast Guard is removing the AIS carriage requirement
for commercial fishing vessels and small passenger vessels certificated
to carry less than 151 passengers. The Coast Guard is amending Sec.
164.46(a)(3) accordingly and will reengage the public with respect to
applicability and carriage requirements for small passenger vessels and
commercial fishing vessels.
To that end, the Coast Guard published in the Federal Register (68
FR 55643) a notice that reopened the comment period on our previously
published notice titled ``Automatic Identification System; Expansion of
Carriage Requirements for U.S. Waters'' (USCG 2003-14878; July 1, 2003;
68 FR 39369). The notice reopening the comment period included
additional questions regarding expanding AIS carriage to small
passenger vessels, whether infrequent VTS users (e.g., fishing vessels)
should be exempt from the AIS requirement, and whether exemptions may
be granted by the VTS as a deviation request, as opposed to the written
notification required in 33 CFR 164.55. By this action, we hope to
generate further comments, discussion, and contributions from
prospective mandatory users of AIS that we will then consider as we
continue forward with future AIS rulemakings.
Five commenters stated that the AIS carriage requirement should be
universal, arguing that an AIS carriage requirement that does not apply
to every vessel, including recreational vessels, is of limited value as
either a security or a safety tool.
We agree that AIS would provide the greatest benefit if all vessels
were required to be equipped with an AIS unit. However, as with any new
technology, AIS carriage must be implemented prudently. Therefore, the
Coast Guard has chosen to implement AIS domestically beginning in VTS
areas (as denoted in table 161.12(c), and will consider expanding AIS
carriage to other waterways in consideration of comments received on
our previously published notice titled ``Automatic Identification
System; Expansion of Carriage Requirements for U.S. Waters'' (USCG
2003-14878; July 1, 2003; 68 FR 39369). Additionally, the AIS carriage
requirements found in the MTSA do not apply to recreational vessels.
Upon further review, we have amended Sec. 164.02 to clarify
applicability for foreign vessels.

Technical

One commenter supported the AIS unit standardization proposal
presented in the temporary interim rule.
One commenter asked if vessels that use an electronic chart to
display AIS targets must have the chart updated and corrected to the
latest Broadcast Notice to Mariners. The same commenter also asked if a
vessel would still have to carry nautical charts if it uses an
Electronic Chart Display and

[[Page 60563]]

Information System (ECDIS) to display AIS targets.
Mariners are advised that U.S. regulations or SOLAS requirements
have always called for paper charts that are relied upon for the
navigation of the vessel to be correct and up to date, regardless of
whether they have AIS or can view vessels on an electronic chart.
One commenter expressed concerns over the electronic display of AIS
data, stating that the technical limitations of commercial radar or
ECDIS to merge data from the AIS is an issue.
We acknowledge the concerns expressed by the commenter. There are
no international standards, at this time, for a manufacturer to rely
upon to assure AIS buyers that an AIS may be properly integrated into
other display devices. All AIS units come with a display that allows
the user to input AIS information (e.g., vessel identity, dimensions,
navigation status, antenna location) and to access all information
received from other units. AIS also has multiple output options that
facilitate using or integrating AIS data on other navigational systems,
such as radar, Advanced Radar Plotting Aid (ARPA), ECDIS, and
electronic charts. We have purposely not required this integration, or
chosen a one-size fits all approach to graphical displays, in order to
leave the choice with the mariner, who is best positioned to decide
which output option suits the mariner's vessel and operation.
Additionally, we are working diligently on this matter, commissioning
the Transportation Research Board to develop recommendations for us,
and working with various standards bodies to develop guidelines and
standards.
One commenter stated that the IMO guidelines on installation of AIS
devices might not be well suited for smaller vessels.
We agree; the IMO Installation Guidelines (particularly regarding
antenna placement) are not well suited for smaller vessels. We will
develop further guidelines to assist these vessel owners and operators
with the installation of their AIS, and will place a copy in the docket
and post a copy on our website at http://www.navcen.uscg.gov/enav/ais/AIS_carriage_reqmts.htm
as soon as we have completed these
guidelines.
One commenter asked whether AIS would require a backup power
source.
Given the importance and value of AIS data to possible search and
rescue efforts, we have begun work with IMO to require back-up power
requirements, similar to those imposed on Global Maritime Distress and
Safety System (GMDSS) equipment. Should these requirements be adopted
by IMO, we will propose regulatory amendments in a separate rulemaking
to do the same for those vessels subject to SOLAS and strongly
encourage the same on other vessels that transit the high seas.
Five commenters asked the Coast Guard to consider its ability to
develop and support the public infrastructure necessary to fully
support AIS and the availability of the radio-frequency bandwidth,
citing the Coast Guard's recent history with similar projects (e.g.,
GMDSS). Five commenters asked us to resolve questions involving
frequency allocation, stating that vessel operators should not be
required to keep track of different frequency requirements and manually
adjust their AIS units for each VTS area. Three commenters stated that
it is up to the Coast Guard, not the FCC, to ensure that frequencies
are available for AIS use.
We have considered our ability to develop and support the public
infrastructure necessary to fully support AIS. We have chosen to
require carriage of AIS in those areas that are being upgraded through
our Ports and Waterways Safety System acquisition program. The Coast
Guard does not have the authority to designate frequencies for AIS use,
therefore, we requested and received frequency authorizations from the
Federal Communication Commission (FCC) and the National
Telecommunication and Information Agency (NTIA). Pending a rulemaking
by FCC, we rely on the FCC decision stated in FCC Notice DA-02-1362
that states that the Commission ``will consider the use of shipborne
AIS equipment to be authorized by existing ship station licenses,
including vessels that are licensed by rule.'' We agree that the
operation of AIS should be seamless to the user, who should not be
required to manually adjust their AIS units for each VTS area. FCC
policies currently authorize the use of AIS frequencies (AIS1, Channel
87B, 161.975 MHz and AIS2, Channel 88B, 162.025 MHz) on existing ship
station licenses. Should AIS frequency management be required due to
the unavailability of AIS1 or AIS2 in any one VTS area, we intend to
have the infrastructure in place to perform frequency management
through the base station capabilities of AIS.
Five commenters stated that interference to adjacent channels would
potentially result in the loss of property and life at sea.
AIS devices must fully comply with ITU and IEC standards and
undergo an additional level of review not applicable to most other FCC
type certified devices prior to being authorized to operate in the VHF
marine band. Further, IMO has developed detailed guidelines (IMO SN/
Circ. 227) to be followed regarding the installation of AIS. These
guidelines have been incorporated by reference into this regulation, as
a requirement, in 33 CFR 164.03 and 164.46. Notwithstanding this
requirement, as is the case with any radiating or receiving radio
device, there is always a possibility for radio interference when
numerous emission devices are operating in the near vicinity of each
other, particularly in a congested and noisy environment as exists on
the VHF FM maritime band. The Coast Guard will be diligent in
monitoring AIS use for interferences and will promptly mitigate them by
enforcing the required installation guidelines, through the AIS type
approval process, and through frequency plan coordination with existing
public coast station licensees.
One commenter noted that the interference to adjacent channels from
the currently adopted AIS carriage requirement is an unconstitutional
taking of private property without just compensation.
The Coast Guard does not believe the MTSA or these regulations
effect a taking, inter alia, because these regulations rely on FCC
decisions to authorize existing shipboard licensees to operate AIS on
the AIS frequencies. See FCC Public Notice DA-02-1622 (June 13, 2002).
Additionally, we do not believe that the commenter's license
constitutes a sufficient property interest to justify its position that
this regulation constitutes a ``taking.'' Finally, even assuming,
without admitting that there is a legally cognizable property interest
in the commenter's license, this regulation does not create such an
interference with the commenter's use of that license as to constitute
a regulatory taking in violation of the Constitution.
One commenter asked whether a fleet manager could buy an AIS base
station to assist with the company dispatch and logistics.
Shoreside AIS stations, mistakenly referred to by some as AIS base
stations, are subject to FCC regulation and licensing. FCC Notice DA-
02-1362 permits the use of AIS by ship station licenses but did not
address its similar use by VHF shore stations. Shoreside AIS stations
enhance the AIS network because they control matters regarding
frequency management, power setting, and allocation of AIS data slots,
which are all functions that will be performed by the Coast Guard or
another government entity.
Three commenters stated that the utility of AIS is considerably
diminished if the system, as installed, is not capable of relaying
information from

[[Page 60564]]

an automatic position indicating system and gyrocompass.
We recognize that the information provided by external sensors,
such as a transmitting heading device, speed log, or navigation lights,
to an AIS in accordance with the standards incorporated by reference in
this regulation will provide the additional benefit to the user, as
would integrating AIS with the existing on board navigation equipment.
However, this integration technology and its accompanying standards are
still being developed, thus, we did not require them. Each U.S. type
approved AIS has a timing and positioning component built-in (e.g.,
Global Positioning System) and the lack of additional sensor input does
not diminish the utility of the AIS in providing for security and
navigational safety.
One commenter asked whether AIS is an electronic aid to navigation
as that term is used in 33 CFR 66.01-1, which states: ``With the
exception of radar beacons (racons) and shore-based radar stations,
operation of electronic aids to navigation as private aids will not be
authorized.''
AIS is a navigational aid, but not necessarily an aid to
navigation, as that term is used in 33 CFR part 66. In addition to
increasing maritime domain awareness for security purposes, shipborne
AIS is intended for collision avoidance, and not intended to be relied
upon or referred to, as a buoy, lighthouse, or racon would be. AIS
standards allow for the creation of AIS aids to navigation, and should
we choose to use these aids, they will be catalogued in the Coast
Guard's Light List as all other aids to navigation currently are.
One commenter stated that the Coast Guard must resolve questions
over patent rights for the AIS standard prior to implementing a
domestic carriage requirement.
Prospective AIS users should not be concerned with any patent
issues regarding AIS or any other shipboard equipment. These are
matters that need only be worked out by manufacturers of the devices
and any patent holders.
One commenter asked whether vessels would be required to provide a
Maritime Mobile Service Identifier (MMSI) and Universal Time
Coordinated (UTC), stating that not all vessels currently have an MMSI.
This commenter also asked how a vessel operator can be confident that
the target identified on an AIS is who it says it is, if AIS units can
be purchased from any commercial source, and an MMSI obtained from an
FCC agent.
One goal of AIS is to lessen the reporting required by mariners.
However, certain information and data input is necessary for the proper
operation of an AIS. Many of these data fields are inputted only once,
such as the vessel's identity, MMSI, dimensions, and antenna location.
MMSI and UTC are critical to AIS; the MMSI (defined in note 1 to Table
161.12(c) of 33 CFR 161.12), which we have amended for clarity,
provides a unique identifier for each AIS user, and the UTC is relied
upon by the system to properly manage the AIS data link and network.
UTC is provided internally by the AIS unit, and requires no input by
the user. MMSI does need to be entered by the user, and is noted on the
ship's station radio license issued by the FCC. Because user error is
always possible, we urge users to be vigilant and request that you
notify the nearest COTP if you encounter improper AIS usage.

Operations

One commenter recommended rewording Sec. 164.46(a) because as
presently drafted it could be incorrectly interpreted to mean that
manufacturer self-certification of equipment to the listed standards
would be sufficient.
We agree and have amended Sec. 164.46(a) to require ``type
approved AIS.''
One commenter stated that AIS is unnecessary because collision
avoidance is best accomplished with an alert watch that is monitoring
VHF channels, radar, GPS chart plotters, and depth sounders. This
commenter stated that these technologies are already found on fishing
vessels and it is not apparent that the addition of AIS will result in
any significant benefit over maintaining a good watch.
We agree that competent and attentive watchkeeping is paramount to
prudent navigation. We further note that prudent mariners are required
to use all means available to avoid a collision. AIS is the latest
navigation system to assist watchkeepers in the performance of their
duties. None of the existing technologies found on commercial fishing
vessels can accurately identify other vessels to the extent that AIS
can. Additionally, in our analysis of costs and benefits, we found
examples of marine casualties involving commercial fishing vessels that
could have been prevented or mitigated with the use of AIS. More
details on these casualties can be found in the Regulatory Assessment
and Initial Regulatory Flexibility Act Analysis located in the docket
for this rule (USCG-2003-14757).
One commenter asked us several questions regarding whether use of
an AIS would satisfy various ``Rules of the Road'' under the
International Regulations for Preventing Collisions at Sea (COLREGS) or
the Inland Navigation Rules (33 U.S.C. 2000 and 1201, et seq.), such as
the requirement for a lookout, the provision regarding safe speed,
provisions regarding risk of collision, and coordinating passing
arrangements.
AIS is the latest of the available means a mariner will have to
prevent collisions at sea. It is not intended to replace any of the
existing means commonly and traditionally used by mariners to ascertain
the risk of collision such as radar, Automatic Radar Plotting Aids
(ARPA), lookouts, binoculars, visual bearings, relative position
maneuvering boards, and EDCIS, but it can certainly supplement them.
AIS provides mariners with near real-time information regarding another
vessel's identity, dimensions, speed over ground, course over ground,
navigation status, and heading. It will aid mariners in identifying
other vessels in restricted visibility, and those that would be
indistinguishable in radar sea clutter. It displays the bearing and
range of other AIS-equipped vessels and provides another means of
reliable communication by using ship-to-ship addressed text messages.
In the future VTSs will be able to relay information on vessels not
carrying AIS to AIS users. However, AIS should not be relied upon as
the sole means to determine risk of collision, safe speed, or to avoid
collision.
In the temporary interim rule, we discussed that AIS can assist
mariners in coordinating passing arrangements. AIS will allow mariners
to accurately identify a vessel by name and call sign to effectively
make passing arrangements, thus replacing vague radio calls such as
``vessel off my port bow'' with more descriptive calls such as ``vessel
NAME/Call sign, bearing XXX degrees and XX meters.'' While AIS allows
for ship-to-ship text messaging to communicate with others and make
passing arrangements, these private communications do not meet the
requirements of the Vessel Bridge-to-Bridge Radiotelephone Act (33
U.S.C. 1201 et seq.) for open broadcasts on the designated bridge-to-
bridge channel, nor does it relieve a vessel operator from the
requirement to sound whistle signals.
Three commenters asked the Coast Guard to test AIS on vessels on
the Lower Mississippi River, stating that previous tests were not
adequate.
We do not believe that additional testing on the Lower Mississippi
River

[[Page 60565]]

is necessary prior to implementation. The Coast Guard conducted
exhaustive testing of precursor AIS in cooperation with stakeholders on
the Lower Mississippi River. We detailed this testing in the ``AIS
Testing'' section of the preamble to the AIS temporary interim rule (68
FR 39357). We also conducted tests with the AIS being required in this
regulation (ITU-R M.1371-1) in other VTS areas, and monitored similar
tests conducted in other countries. However, the Coast Guard will
continue to conduct system acceptance testing of the newly installed
AIS shoreside network in the Lower Mississippi River.
Five commenters stated that AIS should require only minimal
information from vessel operators, so that the information flow to and
from AIS does not distract vessel operators from their other duties.
We agree that AIS users should not be burdened unnecessarily. One
goal of AIS is to unburden mariners from the important, although
tedious, tasks of reporting information to a VTS. Through AIS these
reports are automated and additional voyage data may be transmitted.
Whether vessels are required to supply this additional data (people on
board, destination, and estimated time of arrival) will be determined
by the VTS, which will take into consideration the reporting exemptions
listed in 33 CFR 161.23.
One commenter asked whether the operator of a vessel entering a
VMRS area must call the VTS on a VHF voice channel and whether the VTS
will notify users of required actions by message or on VHF voice
channels.
This rule mandates AIS position reports in lieu of VTS voice
reports; however, it does not abolish the requirements set forth in 33
CFR part 161 regarding deviation requests, monitoring requirements,
sailing plans, and final reports. Additionally, VTS and VTS users
should still rely upon VHF voice communications on the designated VTS
frequencies as the primary mode of VTS communication. VTS areas will
eventually supplement these broadcasts with pertinent AIS text or
binary messages.
One commenter asked whether a vessel could use AIS as a tool even
if the vessel it is communicating with is not in sight, citing
confusion with the COLREGS and Inland Navigation Rules Eleven to
Eighteen.
Inland Navigation Rule Three clearly states that vessels are deemed
to be in sight of one another only when one can be observed visually
from the other, not when observed electronically (e.g., AIS or radar).
However, AIS-like radar--is still a useful tool to use when making
navigational decisions prior to being in the sight of another vessel.
One commenter asked for clarification on the training requirements
for an AIS operator.
At this time, we envision no additional training requirements other
than reading the AIS owner's manual and being familiar with operation
of the AIS. However, mariners seeking a greater understanding of AIS
and its uses may wish to read a document developed by the International
Association of Marine Aids to Navigation and Lighthouse Authorities
(IALA) titled ``IALA Guidelines on the Universal Automatic
Identification System (AIS), Volume 1, Part 1--Operational Issues,
Edition 1.1, December 2002,'' that is available at http://www.iala-aism.org
.
One commenter asked how many vessels are displayed on an AIS when a
vessel is in a crowded harbor.
AIS is designed to provide information on a minimum of the 20
closest active AIS targets.

Editorial

The temporary interim rule contained a typographical error, which
is corrected in this rule. In Sec. Sec. 164.03 and 164.46, the IMO
circular ``Guidelines for Installation of Shipborne Automatic
Identification System (AIS), dated January 6, 2003'' should have been
titled ``SN/Circ.227'' vice ``SN/Circ.277.''
We have also added a note to 33 CFR 164.46(a) to clarify which
international tonnage convention is being identified.

Procedural

Five commenters requested a longer comment period specifically for
the AIS temporary interim rule.
We did not extend the comment period on this rule due to the need
to follow the MTSA's statutory deadline for issuance of regulations. We
acknowledge that these regulations are being implemented in a short
period of time. We have, however, reopened the comment period on our
previously published notice titled ``Automatic Identification System;
Expansion of Carriage Requirements for U.S. Waters'' (USCG 2003-14878;
July 1, 2003; 68 FR 39369).

Incorporation by Reference

The Director of the Federal Register has approved the material in
Sec. 164.03 for incorporation by reference under 5 U.S.C. 552 and 1
CFR part 51. You may inspect this material at U.S. Coast Guard
Headquarters where indicated under ADDRESSES. Copies of the material
are available from the sources listed in Sec. 164.03.

Regulatory Assessment

This final rule is a ``significant regulatory action'' under
section 3(f) of Executive Order 12866, Regulatory Planning and Review.
The Office of Management and Budget has reviewed it under that Order.
It requires an assessment of potential costs and benefits under section
6(a)(3) of that Order. It is significant under the regulatory policies
and procedures of the Department of Homeland Security. A final
assessment is available in the docket as indicated under ADDRESSES. A
summary of the assessment and changes from the draft assessment
follows.

Cost Assessment

This final rule is requiring the carriage of AIS on all U.S. flag
SOLAS vessels, certain domestic vessels in VTS areas, and foreign flag
vessels less than 300 gross tonnage that call on ports in the U.S. We
estimate that 438 U.S. flag SOLAS vessels, 2,963 non-SOLAS domestic
vessels, and 70 non-SOLAS foreign vessels will be affected by this
final rule.
The estimated total present value cost of this final rule is $50.4
million (where the period of analysis is 2003-2012). An estimated
present value $5.2 million is for the U.S. flag SOLAS fleet, $44.1
million is for the domestic, non-SOLAS fleet in VTS areas, and $1.1
million is for the foreign, non-SOLAS fleet that call on ports in the
U.S.
In the first year of implementation, the estimated cost is $1.9
million for the U.S. flag SOLAS fleet, $27.6 million for the domestic,
non-SOLAS fleet in VTS areas, and less than $1 million for the foreign,
non-SOLAS fleet. Following initial implementation, the estimated annual
cost is less than $1 million for the entire affected population.

Safety Benefits

The Coast Guard expects both quantifiable and non-quantifiable
benefits as a result of the final rule. Quantified benefits include
avoided property damage, injuries, fatalities, and pollution events as
a result of having an AIS. Other benefits include better situational
awareness, information, and communications. The final rule will also
enhance Coast Guard missions such as marine safety and security, aids
to navigation, and maritime mobility.
In order to quantify the benefits of AIS implementation, the Coast
Guard reviewed Marine Casualty Incident Reports (MCIRs) from 1993-1999
that involved the vessel populations affected by this final rule. These
incidents were

[[Page 60566]]

used to develop a historical rate of marine casualties in VTS areas to
determine the effectiveness of AIS as a mitigating factor.
The estimated total present value benefit of the final rule is
$24.4 million (2003-2012). An estimated present value $13.3 million is
for the U.S. flag SOLAS fleet, $11.1 million is for the domestic, non-
SOLAS fleet in VTS areas. We did not find any quantified safety
benefits for the foreign, non-SOLAS fleet.

Security Benefits

This final rule is one of six final rules that implement national
maritime security initiatives concerning general provisions, Area
Maritime Security (ports), vessels, facilities, Outer Continental Shelf
(OCS) facilities, and AIS. The Coast Guard used the National Risk
Assessment Tool (N-RAT) to assess benefits that would result from
increased security for vessels, facilities, OCS facilities, and areas.
The N-RAT considers threat, vulnerability, and consequences for several
maritime entities in various security-related scenarios. For a more
detailed discussion on the N-RAT and how we employed this tool, refer
to ``Applicability of National Maritime Security Initiatives'' in the
temporary interim rule titled ``Implementation of National Maritime
Security Initiatives'' (68 FR 39243) (part 101). For this benefit
assessment, the Coast Guard used a team to calculate a risk score for
each entity and scenario before and after the implementation of
required security measures. The difference in before and after scores
indicated the benefit of the proposed action.
We recognized that the final rules are a ``family'' of rules that
will reinforce and support one another in their implementation. We have
ensured, however, that risk reduction that is credited in one rule is
not also credited in another. For a more detailed discussion on the
benefit assessment and how we addressed the potential to double-count
the risk reduced, refer to ``Benefit Assessment'' in the temporary
interim rule titled ``Implementation of National Maritime Security
Initiatives'' (68 FR 39274) (part 101).
We determined annual risk points reduced for each of the six final
rules using the N-RAT. The benefits are apportioned among the vessel,
facility, OCS facility, area, and AIS rules. As shown in Table 1, the
implementation of AIS for the affected population reduces 1,422 risk
points annually through 2012. The benefits attributable for part 101,
General Provisions, were not considered separately since this part is
an overarching section for all the parts.

Table 1.--Annual Risk Points Reduced by the Final Rules
----------------------------------------------------------------------------------------------------------------
Annual risk points reduced by final rule
-------------------------------------------------------------------------------
Maritime entity Vessel Facility OCS facility
security security security AMS AIS
----------------------------------------------------------------------------------------------------------------
Vessels......................... 778,633 3,385 3,385 3,385 1,317
Facilities...................... 2,025 469,686 .............. 2,025 ..............
OCS Facilities.................. 41 .............. 9,903 .............. ..............
Port Areas...................... 587 587 .............. 129,792 105
-----------------
Total....................... 781,285 473,659 13,288 135,202 1,422
----------------------------------------------------------------------------------------------------------------

Once we determined the annual risk points reduced, we discounted
these estimates to their present value (7 percent discount rate, 2003-
2012) so that they could be compared to the costs. We presented cost
effectiveness, or dollars per risk point reduced, in two ways: First,
we compared the first-year cost and first-year benefit because first-
year cost is the highest in our assessment as companies develop
security plans and purchase equipment. Second, we compared the 10-year
present value cost and the 10-year present value benefit. The results
of our assessment are presented in Table 2.

Table 2.--First-Year and 10-Year Present Value Cost and Benefit of the Final Rules
----------------------------------------------------------------------------------------------------------------
Final rule
-------------------------------------------------------------------------------
Item Vessel Facility OCS facility
security security security AMS AIS *
----------------------------------------------------------------------------------------------------------------
First-Year Cost (millions)...... $218 $1,125 $3 $120 $30
First-Year Benefit.............. 781,285 473,659 13,288 135,202 1,422
First-Year Cost Effectiveness ($/ 279 2,375 205 890 21,224
Risk Point Reduced)............
10-Year Present Value Cost 1,368 5,399 37 477 26
(millions).....................
10-Year Present Value Benefit... 5,871,540 3,559,655 99,863 1,016,074 10,687
10-Year Present Value Cost 233 1,517 368 469 2,427
Effectiveness ($/Risk Point
Reduced).......................
----------------------------------------------------------------------------------------------------------------
* Cost less monetized safety benefit.

Although we have quantified these security benefits relative to
AIS, the N-RAT is limited in its ability to measure benefits
attributable to intelligence or information gathering. These
limitations are discussed in the ``Assessment Limitations'' section in
the preamble of the temporary interim rule titled ``Implementation of
National Maritime Security Initiatives'' (USCG-2003-14792).
Congress mandated an AIS carriage requirement on domestic (non-
SOLAS) vessels in 46 U.S.C. 70114, and provided an explicit phase-in
schedule for AIS in section 102(e) of the MTSA. Strictly upon
consideration of

[[Page 60567]]

monetized safety benefits, as measured through decreased collisions and
the resulting decrease in injuries, mortalities, and pollution
incidents, the cost of AIS installation for the domestic fleet far
outweighs the benefit over a 10-year period (0.25 benefit-cost ratio).
This ratio results from the high costs of purchasing and installing the
unit (an estimated $9,330 per vessel), and the types of marine
casualties that AIS is expected to mitigate, where damage is not
usually severe nor is there significant loss of life. In view of the
benefit-cost ratio presented above, the Coast Guard has shared with the
Congress all significant information provided by the public that
addresses the reasonableness of implementing the statute. A copy of
this letter is available in the docket where indicated under ADDRESSES.
Because there is not yet a mass market for AIS, the cost per unit
in the next few years, when the domestic fleet is required to purchase
AIS, is likely to be higher than when it is replaced (around 2012).
Because the AIS market is in its infancy, we cannot estimate how much
the unit cost will decrease over the next decade. If many manufacturers
enter the market, costs are likely to drop through competition. Because
manufacturers have a potential world market and a significant U.S.
market, many may attempt to capture a segment. Conversely, if only a
few players emerge worldwide, AIS costs could remain high. Because
manufacturers must engage in a rigorous approval process and cannot be
assured that they will recoup research and development costs through
unit sales, there is the potential that only a few dominant players
will emerge in the AIS market. Because we cannot determine the trend of
the AIS market and we did not want to understate the cost for AIS, we
assumed that the cost for units in 2012 would again be approximately
$9,000 per unit. It is possible that an AIS unit will not be this
expensive to replace.
In terms of security, we estimated that we will not experience a
significant benefit from a decrease in risk, as measured in risk points
reduced in the N-RAT, as a result of AIS installation. There are two
primary reasons for this estimate. First, the N-RAT was an internal
Coast Guard tool that was modified to estimate the national benefits
attributable to the suite of security rules mandated by the MTSA. The
tool was not designed to measure the security benefits of AIS
specifically. The N-RAT does not, therefore, robustly capture the risk
mitigation potential of AIS. Second, the Coast Guard strongly believes
that AIS is critical to maritime domain awareness. However, we are
unable to quantify or monetize the benefits of this Coast Guard mission
or the individual contribution of AIS to it.
While the monetized benefit of the rule does not exceed its cost,
the Coast Guard believes that AIS has the potential to mitigate a
transportation security incident. The Coast Guard recognizes that a
single sensor, such as AIS, will not likely prevent a transportation
security incident alone--but if AIS can have a mitigating effect on
just a single incident, the security benefit could be significant. The
Coast Guard must consider AIS in its suite of security rules and has
developed a final rule that considers the mandates of the MTSA in light
of the high initial costs of purchasing the unit by requiring AIS in
VTS areas only for the domestic fleet. We are concentrating our efforts
in VTS areas since this is where we can begin accruing the most
benefit--for industry, the public, and the Coast Guard--in the shortest
period of time. However in response to public comment, in Sec.
164.46(a)(1) and (a)(2)(i), we have removed the carriage requirement of
the temporary interim rule for commercial fishing vessels and some
small passenger vessels. Through this final rule we are attempting to
maximize the return on investment as quickly and as effectively as
practical.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. The term ``small entities''
comprises small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with populations of less than 50,000. We
have reviewed this final rule for potential economic impacts on small
entities. A Final Regulatory Flexibility Analysis discussing the impact
of this rule on small entities is available in the docket where
indicated under ADDRESSES.

Number and Types of Small Entities Affected

U.S. Flag SOLAS Vessels

Of the affected population, we estimated that of the 438 total U.S.
flag SOLAS vessels, 205 are owned by 122 small businesses. The
remaining 233 vessels are owned by approximately 40 large companies.
We estimated the cost of an AIS unit per vessel in the first year
will be $9,330. Of this, $7,000 is for the AIS unit, $2,000 is for
installation, and $330 is for mariner training. We estimated that
following installation, each AIS will require $250 in annual
maintenance to replace such items as the antenna, keyboard, and display
screen. We estimated that the entire unit will be replaced after eight
years.
We found that annual maintenance costs will have a less-than-1-
percent impact on annual revenue for all small businesses with U.S.
flag SOLAS vessels. First-year impacts to small businesses, therefore,
are the focus of this analysis. To estimate the revenue impact on small
businesses in the first year, the cost per vessel for AIS, $9,330, was
multiplied by the number of vessels owned by each company, then divided
by the average annual revenue for each company, as reported in the
online databases. Of the 122 small businesses that own U.S. flag SOLAS
vessels, we found revenue for 59 of them (48 percent). Table 3 presents
the revenue impact for the 59 entities with known average annual
revenue.

Table 3.--Effect of First-Year Cost on Average Annual Revenue for Small
Entities Owning U.S. Flag SOLAS Vessels
------------------------------------------------------------------------
Number of Percent of
entities entities
Percent of annual revenue that is first-year with known with known
AIS cost annual annual
revenues revenues
------------------------------------------------------------------------
0-3........................................... 43 73
3-5............................... 5 8
5-10.............................. 4 7
10-20............................. 6 10
20-30............................. 0 0
30................................ 1 2
--------------
Total..................................... 59 100
------------------------------------------------------------------------

As shown, the final rule will have a less-than-3-percent impact on
73 percent of small businesses owning non-SOLAS vessels in the first
year it is in effect. Approximately 88 percent have a less-than-10-
percent impact.

Number and Types of Small Entities Affected: Non-SOLAS Fleet in VTS
Areas

We estimated that there are 637 small businesses that will be
affected by the final rule that own non-SOLAS vessels that transit VTS
areas. These 637 companies own 1,349 vessels, representing 46 percent
of the 2,963 non-SOLAS vessels affected by the rule. An estimated 1,456
vessels (49 percent) are owned by 150 large businesses, and 55 vessels
(2 percent) are owned by State and local governments. There are

[[Page 60568]]

103 vessels that transit VTS areas (3 percent of the non-SOLAS fleet)
that have no company associated with the vessel due to missing company
information in our data. We could not be certain if these vessels
belong to small, large, or government entities and did not apportion
these 103 vessels to one type of entity or another.
We estimated the cost of AIS per vessel in the first year will be
$9,330. As with the U.S. flag SOLAS fleet, annual cost following
installation of AIS will have little impact on annual revenues--a less-
than-1 percent impact on annual revenue for most small businesses. The
first-year cost of this final rule, therefore, will again have the
greatest impact on average annual revenue. To estimate the revenue
impact on small businesses in the first year, the cost per vessel for
AIS, $9,330, was multiplied by the number of vessels owned by each
company, then divided by the average annual revenue for each company.
Of the 637 small businesses that own non-SOLAS vessels in VTS areas, we
found revenue for 392 of them (62 percent). The results of the analysis
for the non-SOLAS fleet in VTS areas with known company information are
presented in Table 4.

Table 4.--Effect of First-Year Cost on Average Annual Revenue for Small
Entities Owning Domestic, Non-SOLAS Vessels in VTS Areas
------------------------------------------------------------------------
Number of Percent of
entities entities
Percent of annual revenue that is first-year with known with known
AIS cost annual annual
revenues revenues
------------------------------------------------------------------------
0-3........................................... 303 77
3-5............................... 32 8
5-10.............................. 28 7
10-20............................. 15 4
20-30............................. 10 3
30................................ 4 1
--------------
Total..................................... 392 100
------------------------------------------------------------------------

As shown, the final rule will have a less-than-3-percent impact on
77 percent of small businesses owning non-SOLAS vessels in the first
year it is in effect. Approximately 92 percent have a less-than-10-
percent impact. We concluded, therefore, that this final rule may have
a significant economic impact on a substantial number of small
entities.

Assistance for Small Entities

Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small
entities in understanding the rule so that they could better evaluate
its effects on them and participate in the rulemaking. We provided
small entities with a name, phone number, and e-mail address to contact
if they had questions concerning the provisions of the final rules or
options for compliance.
We have placed Small Business Compliance Guides in the dockets for
the Area Maritime, Vessel, and Facility Security and the AIS rules.
These Compliance Guides will explain the applicability of the
regulations, as well as the actions small businesses will be required
to take in order to comply with each respective final rule. We have not
created Compliance Guides for part 101 or for the OCS Facility Security
final rule, as neither will affect a substantial number of small
entities.
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).

Collection of Information

This final rule contains no new collection of information
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520). The reports required by this rule are considered to be
operational communications, transitory in nature, and, do not
constitute a collection of information under the Paperwork Reduction
Act.
We did not receive comments regarding collection of information.

Federalism

A rule has implications for Federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. It is well settled that States may
not regulate in categories reserved for regulation by the Coast Guard.
It is also well settled, now, that all of the categories covered in 46
U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration,
repair, maintenance, operation, equipping, personnel qualification, and
manning of vessels), as well as the reporting of casualties and any
other category in which Congress intended the Coast Guard to be the
sole source of a vessel's obligations, are within the field foreclosed
from regulation by the States. In addition, under the authority of
Title I of the Ports and Waterways Safety Act, 33 U.S.C. 1221-1232
(specifically 33 U.S.C. 1223) and the MTSA this regulation will preempt
any State action on the subject of Automatic Identification System
carriage requirements. (See the decision of the Supreme Court in the
consolidated cases of United States v. Locke and Intertanko v. Locke,
529 U.S. 89, 120 S. Ct. 1135 (March 6, 2000).) Our AIS carriage
requirement rule falls into the category of equipping of vessels.
Because the States may not regulate within this category, preemption
under Executive Order 13132 is not an issue.
We did not receive comments regarding Federalism.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or Indian Tribal
government, in the aggregate, or by the private sector of $100,000,000
or more in any 1 year. We discuss the effects of this final rule
elsewhere in this preamble. However, this final rule is exempted from
assessing the effects of the regulatory action as required by the Act
because it is necessary for the national security of the United States
(2 U.S.C. 1503(5)).
We did receive one comment regarding the Unfunded Mandates Reform
Act; this comment is discussed within the ``Discussion of Comments and
Changes'' section of this preamble.

Taking of Private Property

This final rule will not effect a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights. We did receive one comment regarding the taking of
private property; this comment is discussed within the ``Discussion of
Comments and Changes'' section of this preamble.

Civil Justice Reform

This final rule meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. We did not receive
comments regarding Civil Justice Reform.

[[Page 60569]]

Protection of Children

We have analyzed this final rule under Executive Order 13045,
Protection of Children from Environmental Health Risks and Safety
Risks. While this final rule is an economically significant rule, it
does not create an environmental risk to health or risk to safety that
may disproportionately affect children. We did not receive comments
regarding the protection of children.

Indian Tribal Governments

This final rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does 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. We
did not receive comments regarding Indian Tribal Governments.

Energy Effects

We have analyzed this final rule under Executive Order 13211,
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order. Although it is a ``significant
regulatory action'' under Executive Order 12866, it is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.
This final rule has a positive effect on the supply, distribution,
and use of energy. The final rule provides for enhanced maritime
security, which will prove beneficial for the supply, distribution, and
use of energy at increased levels of maritime security.
We did not receive comments regarding energy effects.

Environment

We have considered the environmental impact of this final rule and
concluded that under figure 2-1, paragraphs (34)(d), (34)(e), and
(34)(i) of Commandant Instruction M16475.lD, this rule is categorically
excluded from further environmental documentation. This final rule
concerns vessel equipment requirements that will contribute to a higher
level of marine safety and maritime domain awareness for U.S. port and
waterways. A ``Categorical Exclusion Determination'' is available in
the docket where indicated under ADDRESSES.
This rulemaking will not significantly impact the coastal zone.
Further, the rulemaking and the execution of this rule will be done in
conjunction with appropriate State coastal authorities. The Coast Guard
will comply with the requirements of the Coastal Zone Management Act
while furthering its intent to protect the coastal zone.
We did not receive comments regarding the environment.

List of Subjects

33 CFR Part 26

Communications equipment, Marine safety, Radiotelephone, Vessels.

33 CFR Part 161

Harbors, Navigation (water), Reporting and recordkeeping
requirements, Vessels, Waterways.

33 CFR Part 164

Incorporation by reference, Marine safety, Navigation (water),
Reporting and recordkeeping requirements, Waterways.

33 CFR Part 165

Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

0
Accordingly, the interim rule amending 33 CFR parts 26, 161, 164, and
165 that was published at 68 FR 39353 on July 1, 2003, and amended at
68 FR 41913 on July 16, 2003, is adopted as a final rule with the
following changes:

PART 161--VESSEL TRAFFIC MANAGEMENT

0
1. The authority citation for part 161 continues to read as follows:

Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. 70114, 70117; Pub. L.
107-295, 116 Stat. 2064; Department of Homeland Security Delegation
No. 0170.1.

Sec. 161.12 [Amended]

0
2. In Sec. 161.12, in note 1 following table 161.12(c), add the
following sentence to the end of the note: ``The requirements set forth
in Sec. Sec. 161.21 and 164.46 of this subchapter apply in those areas
denoted with a MMSI number.''

PART 164--NAVIGATION SAFETY REGULATIONS

0
3. The authority citation for part 164 continues to read as follows:

Authority: 33 U.S.C. 1223, 1231; 46 U.S.C. 2103, 3703, 70114,
70117; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland
Security Delegation No. 0170.1. Sec. 164.13 also issued under 46
U.S.C. 8502. Sec. 164.61 also issued under 46 U.S.C. 6101.

0
4. In Sec. 164.02, revise paragraph (a) introductory text to read as
follows:

Sec. 164.02 Applicability exception for foreign vessels.

(a) Except as provided in Sec. 164.46(a)(2) of this part,
including Sec. Sec. 164.38 and 164.39, this part does not apply to
vessels that:
* * * * *

Sec. 164.03 [Amended]

0
5. In Sec. 164.03(b), under ``International Maritime Organization'',
remove the word ``SN/Circ.277'' and add, in its place, the word ``SN/
Circ.227''.

Sec. 164.43 [Amended]

0
6. In Sec. 164.43, in paragraph (a) introductory text, remove the
words ``July 1'' and add, in their place, the words ``December 31''.

0
7. Revise Sec. 164.46 to read as follows:

Sec. 164.46 Automatic Identification System (AIS).

(a) The following vessels must have a properly installed,
operational, type approved AIS as of the date specified:
(1) Self-propelled vessels of 65 feet or more in length, other than
passenger and fishing vessels, in commercial service and on an
international voyage, not later than December 31, 2004.
(2) Notwithstanding paragraph (a)(1) of this section, the
following, self-propelled vessels, that are on an international voyage
must also comply with SOLAS, as amended, Chapter V, regulation
19.2.1.6, 19.2.4, and 19.2.3.5 or 19.2.5.1 as appropriate (Incorporated
by reference, see Sec. 164.03):
(i) Passenger vessels, of 150 gross tonnage or more, not later than
July 1, 2003;
(ii) Tankers, regardless of tonnage, not later than the first
safety survey for safety equipment on or after July 1, 2003;
(iii) Vessels, other than passenger vessels or tankers, of 50,000
gross tonnage or more, not later than July 1, 2004; and
(iv) Vessels, other than passenger vessels or tankers, of 300 gross
tonnage or more but less than 50,000 gross tonnage, not later than the
first safety survey for safety equipment on or after July 1, 2004, but
no later than December 31, 2004.
(3) Notwithstanding paragraphs (a)(1) and (a)(2) of this section,
the following vessels, when navigating an area denoted in table
161.12(c) of Sec. 161.12 of this chapter, not later than December 31,
2004:

[[Page 60570]]

(i) Self-propelled vessels of 65 feet or more in length, other than
fishing vessels and passenger vessels certificated to carry less than
151 passengers-for-hire, in commercial service;
(ii) Towing vessels of 26 feet or more in length and more than 600
horsepower, in commercial service;
(iii) Passenger vessels certificated to carry more than 150
passengers-for-hire.
Note to Sec. 164.46(a): ``Properly installed'' refers to an
installation using the guidelines set forth in IMO SN/Circ.227
(incorporated by reference, see Sec. 164.03). Not all AIS units are
able to broadcast position, course, and speed without the input of an
external positioning device (e.g. dGPS); the use of other external
devices (e.g. transmitting heading device, gyro, rate of turn
indicator) is highly recommended, however, not required except as
stated in Sec. 164.46(a)(2). ``Type approved'' refers to an approval
by an IMO recognized Administration as to comply with IMO Resolution
MSC.74(69), ITU-R Recommendation M.1371-1, and IEC 61993-2
(Incorporated by reference, see Sec. 164.03). ``Length'' refers to
``registered length'' as defined in 46 CFR part 69. ``Gross tonnage''
refers to tonnage as defined under the International Convention on
Tonnage Measurement of Ships, 1969.
(b) The requirements for Vessel Bridge-to-Bridge radiotelephones in
Sec. Sec. 26.04(a) and (c), 26.05, 26.06 and 26.07 of this chapter
also apply to AIS. The term ``effective operating condition'' used in
Sec. 26.06 of this chapter includes accurate input and upkeep of AIS
data fields.
(c) The use of a portable AIS is permissible only to the extent
that electromagnetic interference does not affect the proper function
of existing navigation and communication equipment on board and such
that only one AIS unit may be in operation at any one time.
(d) The AIS Pilot Plug, on each vessel over 1,600 gross tons on an
international voyage, must be available for pilot use, easily
accessible from the primary conning position of the vessel, and near a
120 Volt, AC power, 3-prong receptacle.

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
8. The authority citation for part 165 continues to read as follows:

Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50
U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub.
L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

Sec. 165.1704 [Amended]

0
9. In Sec. 165.1704(c)(6), remove the words ``July 1'' and add, in
their place, the words ``December 31''.

Dated: October 8, 2003.
Thomas H. Collins,
Admiral, Coast Guard, Commandant.
[FR Doc. 03-26350 Filed 10-20-03; 8:45 am]

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