[Federal Register Volume 79, Number 36 (Monday, February 24, 2014)]
[Proposed Rules]
[Pages 10075-10077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03729]



Maritime Administration

46 CFR Part 298

[Docket Number MARAD-2014-0011]

Proposed Policy: ``Other Relevant Criteria'' for Consideration 
When Evaluating the Economic Soundness of Applications Under the Title 
XI Maritime Guaranteed Loan Program

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Proposed policy.


SUMMARY: This document provides interested parties with the opportunity 
to comment on the proposed policy regarding the factors the Maritime 
Administration (``MARAD'') will consider in its review of applications 
for the Title XI Maritime Guaranteed Loan Program (``Title XI''). 
MARAD's proposed policy is intended to further promote the 
modernization of the U.S. Merchant Marine and U.S. shipyards through 
the construction or reconstruction (to include repowering) of vessels.

DATES: Comments must be received on or before March 26, 2014. MARAD 
will consider comments filed after this date to the maximum extent 

ADDRESSES: Comments identified by Department of Transportation 
(``DOT'') Docket Number MARAD-2014-0011 may be submitted by any of the 
following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Search MARAD-2014-0011 and follow the instructions for submitting 
     Fax: (202) 493-2251.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., West Building, Room W12-
140, Washington, DC 20590. If you would like to know that your comments 
reached the facility, please enclose a stamped, self-addressed postcard 
or envelope.
     Hand Delivery/Courier: Docket Management Facility, U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., West 
Building, Room W12-140, Washington, DC 20590. The Docket Management 
Facility is open 9:00 a.m. to 5:00 p.m., Monday through Friday, except 
on Federal holidays.

    Note: If you fax, mail or hand deliver your input we recommend 
that you include your name and a mailing address, an email address, 
or a telephone number in the body of your document so that we can 
contact you if we have questions regarding your submission. If you 
submit your inputs by mail or hand delivery, submit them in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing.

    Special Instructions: All submissions received must include the 
agency name and docket number. All comments received will be posted 
without change to the docket at www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the process, see the section 
entitled Public Participation.

FOR FURTHER INFORMATION CONTACT: Owen Doherty, Acting Administrator for 
Business and Finance Development, Maritime Administration, Telephone: 
202-366-1883, Email: owen.doherty@dot.gov. If you have questions on 
viewing the Docket, call Barbara Hairston, Acting Program Manager, 
Docket Operations, telephone: 202-366-9826. Additional background 
information may be found at www.MARAD.dot.gov.

SUPPLEMENTARY INFORMATION: The primary purpose of Title XI is to 
promote the growth and modernization of the U.S. Merchant Marine and 
U.S. shipyards. Title XI promotes such growth and modernization by 
providing loan guarantees to sustain vessel construction and repair 
capacity, create jobs, support development and utilization of emerging 
technologies, as well as encouraging private investment in the maritime 
industry. The legislative history of Title XI reflects the evolution of 
the program over its 78 year history to respond to these contemporary 
issues and national priorities.\1\ Additions over time have included 
job creation, new vessel safety measures, small shipyard growth, 
environmental technologies, increased efficiency in the maritime 
industry through modernization and national defense.

    \1\ For example, the Ship Financing Act of 1972 demonstrated 
Congress' focus on new environmental technologies, among other 
things, by making pollution treatment, abatement, or control vessels 
eligible for Title XI guarantees, See Public Law 92-507, section 1, 
86 Stat. 909, as amended, now codified at 46 U.S.C. 53701(14)(K). In 
the 1990s, Congress amended Title XI to redevelop the U.S. maritime 
industrial base and rebuild the nation's shipyards. See National 
Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, 
section 1352, 107 Stat. 1812. In recent years, Title XI's focus on 
national security has grown with priorities focused on national 
defense tank vessels and naval auxiliary vessels. See National 
Defense Authorization Act for Fiscal Year 2004, Public Law 108-36, 
section 3544, 117 Stat. 1392, as amended, now codified at 46 U.S.C. 

    Under 46 U.S.C. 53702(a), Title XI is a discretionary program. 
Chapter 537 of Title 46 of the United States Code and part 298 of title 
46 of the Code of Federal Regulations (CFR) detail the

[[Page 10076]]

factors MARAD must consider in processing Title XI loan guarantee 
applications. These authorities require MARAD to consider economic 
soundness, project feasibility and specifically enumerated priorities 
for processing when evaluating whether to approve or deny a Title XI 
    For the required economic soundness determination, 46 U.S.C. 
53708(a) provides six mandatory factors to consider when evaluating 
economic soundness.\2\ The accompanying regulation 46 CFR 298.14(b) 
sets forth ``[b]asic feasibility factors'' but notes that ``all 
relevant factors'' are required to be considered prior to a 
determination of economic soundness.\3\

    \2\ See Reference 46 U.S.C. 53708(a)
    \3\ See Reference 46 CFR 298.14(b)

    Both 46 U.S.C. 53708(a)(5) and 46 CFR 298.14(b)(6) expressly allow 
MARAD to consider ``other relevant criteria'' in addition to those 
enumerated in the statute and regulation when making findings of 
economic soundness, provided it is reasonable in doing so. Although not 
an exhaustive list, examples of ``other relevant criteria'' MARAD may 
consider, as appropriate, when evaluating economic soundness include, 
but are not limited to, availability of funding, sensitivity and 
concentration of the agency loan guarantee portfolio, utilization of 
America's Marine Highways and designated corridors, and synergy with 
the DOT Strategic Plan; as well as any factors contained within 46 CFR 
chapter 2, subpart D with a bearing on the economic soundness of a 
Title XI loan guarantee application. Examples of such factors from 
subpart D include, but are not limited to, guarantees for less than the 
normal term for that class of vessel, degrees of risk involved with 
different applications and influence on existing Title XI guarantees.
    In addition to the factors enumerated above, MARAD also proposes to 
consider various environmental initiatives that are likely to increase 
efficiency and lead to future cost savings as ``other relevant 
criteria'' in its evaluation of Title XI loan guarantee applications. 
The consideration of such initiatives is consistent not only with 
previous Congressional priorities, but also with the programmatic 
imperative to remain current with emerging standards, trends and 
critical needs. Some of these initiatives may include alternative fuel 
system designs, fuel cells, hybrid propulsion systems, air emissions 
reduction technologies, ballast water treatment technologies, or other 
environmentally-friendly designs.
    Today, it is feasible to construct and/or repower vessels to 
incorporate alternative energy technologies and fuels,\4\ 
environmentally-friendly designs and other technologies that improve 
the environmental sustainability of vessel operations. The demand for 
environmentally friendly designs, fuels and technologies is growing 
rapidly throughout the maritime industry because, among other things, 
they meet new air emissions and other discharge standards, and also 
present the potential for greater efficiencies and cost savings. MARAD 
seeks to promote, through Title XI, projects that provide more 
environmentally sustainable marine transportation. Consideration of 
these factors as ``other relevant criteria'' within an application's 
economic soundness determination would complement the other such 
criteria that MARAD already considers in the evaluation of an 
application's economic soundness, which include but are not limited to 
the factors identified above. MARAD notes, in particular, that many of 
the economic benefits of environmentally friendly designs, fuels and 
technologies take the form of public benefits that cannot be captured 
by a vessel's owner and operator in the form of freight rates or 
passenger fees, but which may be valuable to society because of 
improved human health from air and water quality. Economists and 
environmental experts can often quantify these benefits in monetary 
terms or treat them qualitatively. Achieving these benefits is 
consistent with the DOT Strategic Plan (under the goal of environmental 
sustainability) and other Federal, State and local objectives. As such, 
MARAD intends to include as a contributing factor to Federal decisions 
to award Title XI loan guarantees whether approval will help a vessel 
meet or exceed environmental standards. MARAD will consider the 
comments received on this proposed policy in formulating a final notice 
of policy.

    \4\ MARAD defines alternative energy and fuels as energy derived 
from non-traditional sources (including but not limited to liquefied 
or compressed natural gas, bio-fuels, solar and wind).

Public Participation

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number in your comments. MARAD encourages you to provide concise 
comments. However, you may attach necessary additional documents to 
your comments. There is no limit on the length of the attachments. 
Please submit your comments, including the attachments, following the 
instructions provided under the above heading entitled ADDRESSES.
    If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Department of Transportation, Maritime 
Administration, Office of Legislation and Regulations, MAR-225, W24-
220, 1200 New Jersey Avenue SE., Washington, DC 20590. When you send 
comments containing information claimed to be confidential information, 
you should include a cover letter setting forth with specificity the 
basis for any such claim.
    MARAD will consider all comments received before the close of 
business on the comment closing date indicated above under DATES. To 
the extent practicable, MARAD will also consider comments received 
after that date. If a comment is received too late for MARAD to 
consider in developing a final policy, MARAD will consider that comment 
as an informal suggestion for future guidance.
    For access to the docket to read background documents, or to submit 
or read comments received, go to the Docket Management Facility, U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., West 
Building, Room W12-140, Washington, DC 20590. The Docket Management 
Facility is open 9:00 a.m. to 5:00 p.m., Monday through Friday, except 
on Federal holidays. To review documents, read comments or to submit 
comments, the docket is also available online at http://www.regulations.gov., keyword search MARAD-2014-0011.
    Please note that even after the comment period has closed, MARAD 
will continue to file relevant information in the Docket as it becomes 
available. Further, some people may submit late comments. Accordingly, 
MARAD recommends that you periodically check the Docket for new 

Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the DOT 
Privacy Act system of records notice for the Federal Docket Management 
System (FDMS) in the Federal Register published on January 17, 2008, 
(73 FR 3316) at http://

[[Page 10077]]


    Authority: 46 U.S.C. 53708

    Dated: February 18, 2014.

    By Order of the Maritime Administrator.
Christine S. Gurland,
Acting Secretary, Maritime Administration.
[FR Doc. 2014-03729 Filed 2-21-14; 8:45 am]