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REORGANIZATION PLAN NO. 1 OF 1967
(Certain Functions Relating to Ship Mortgages)

TUESDAY, APRIL 4, 1967

U.S. SENATE,
SUBCOMMITTEE ON EXECUTIVE REORGANIZATION,
COMMITTEE ON GOVERNMENT. OPERATIONS,

Washington, D.C. The subcommittee met, pursuant to notice, at 11 a.m., in room 3302, New Senate Office Building, Senator Abraham Ribicoff (chairman) presiding

Present: Senators Ribicoff, Hansen, and Baker. Also present: Paul Danaceau, staff director; Robert Wager, counsel; Esther Newberg, chief clerk; Richard Bowen, professional staff member, Subcommittee on Executive Reorganization; and Eli E. Nobleman, professional staff member, Committee on Government Operations.

OPENING STATEMENT OF THE CHAIRMAN Senator RIBICOFF. The committee will be in order.

Our hearing this morning is op Reorganization Plan No. 1 of 1967. This plan would transfer to the Secretary of Transportation the authority to approve the surrender of certain ship documents. The President believes this transfer would avoid duplication of efforts and save time and expense for both the public and the shipowners.

This plan, like other reorganization plans, is prepared and submitted to the Congress under the authority granted to the President by the Reorganization Act of 1949, as amended. The reorganization plan automatically becomes effective after 60 days of continuous session unless a resolution of disapprovat has been passed by either the House or the Senate. No disapproval resolution has been filed on Reorganization Plan No. 1 to date. If none is filed, this plan will be effective on May 9, 1967.

Nonetheless, the subcommittee believes that the public interest is best served by holding hearings on such plans so that members of the subcommittee, the full committee, and the Senate may

be properly informed about them. These proceedings will be printed soon and will be available as public documents.

Before I call the witnesses, I would like to submit for the record the message from the President transmitting Reorganization Plan No. 1 of 1967. I would also like to submit staff memorandum No. 90-1-9 of the Senate Committee on Government Operations. This memorandum, dated March 20, 1967, was prepared by Eli E. Nobleman, our excellent professional staff member of the Committee on Government Operations, and contains a thorough account of the

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historical background of plan No. 1 and the pertinent material relating to the proposed transfers.

(The documents referred to, Reorganization Plan No. 1 of 1967, and staff memorandum No. 90-1-9, follow:)

EXHIBIT 1
(H. Doc. No, 60, 80th Cong., first sess.)

REORGANIZATION PLAN No. 1 OF 1967
To the Congress of the United States:

I am transmitting Reorganization Plan No. 1 of 1967.

This plan would transfer from the Secretary of Commerce to the Secretary of Transportation authority to approve the surrender of certain ship documents. These documents include certificates of ownership, declarations of citizenship, and related ship papers issued for commercial vessels covered by preferred mortgages or owned by the United States.

Under the act establishing the Department of Transportation, the Secretary of Transportation, acting through the Coast Guard, will have responsibility for recording bills of sale, transfers, and mortgages of ships; for issuing new marine documents; and for retaining custody of preferred mortgages on vessels.

The Secretary of Transportation will not, however, have the authority to approve the surrender of documents for vessels covered by preferred mortgages. That authority still resides with the Secretary of Commerce.

As a result, shipowners will have to deal with two separate departments of the Federal Government every time a ship's name is changed, its structure is modi. fied, or it is sold or transferred.

In each of these and other cases, the shipowner must first seek the approval of the Secretary of Commerce to surrender the ship's documents and then request the Secretary of Transportation to issue new documents.

The reorganization plan is designed to eliminate this duplication of effort, and to save time and expense for shipowners.

This is not a major reorganization plan. But it is important. It is part of our larger effort to streamline the Government, to make its operations as efficient as possible, and to enable it to provide better service to the citizens and businessmen of this country.

This plan has been prepared in accordance with chapter 9 of title V of the United States Code. I have found, after investigation, that the reorganization is necessary to accomplish one or more of the purposes set forth in section 901(a) of that title.

I recommend that the Congress allow the reorganization plan to become effective.

LYNDON B. JOHNSON. THE WHITE HOUSE, February 27, 1967.

REORGANIZATION PLAN No. 1 OF 1967 Prepared by the President and transmitted to the Senate and the House of Repre

sentatives in Congress assembled, February 27, 1967, pursuant to the provisions of chapter 9 of title 5 of the United States Code.

CERTAIN FUNCTIONS RELATING TO SHIP MORTGAGES Section 1. Transfer of functions. The functions which are now vested in the Secretary of Commerce relating to the approval of the surrender of the documents of a vessel pursuant to subsections B(4) and O(a) of the Ship Mortgage Act, 1920, as amended (46 U.S.C. 911(4) and 961 (a)), are hereby transferred to the Secre tary of Transportation.

Section 2. Incidental transfers. (a) So much of the personnel, property, records, and unexpended balances of appropriations, allocations, and other funds employed, used, held, available, or to be made available in connection with the functions transferred by this reorganization plan as the Director of the Bureau of the Budget shall determine shall be transferred to the Department of Transportation at such time or times as the Director shall direct.

(b) Such further measures and dispositions as the Director of the Bureau of the Budget shall deem to be necessary in order to effectuate the transfers provided for in subsection (a) of this section shall be carried out in such manner as he shall direct and by such agencies as he shall designate.

EXHIBIT 2
SENATE COMMITTEE ON GOVERNMENT OPERATIONS,

March 20, 1967.
Staff Memorandum No. 90-1-9.
Subject: Reorganization Plan No. 1 of 1967, transferring from the Secretary of

Commerce to the Secretary of Transportation authority to approve the

surrender of certain ship documents. Reorganization Plan No. 1 of 1967 was submitted by the President to the Congress on February 27, 1967. Unless disapproved by a majority vote of either House of the Congress, it will become effective at the close of business on April 28, 1967. Plan No. 1 was referred to the Subcommittee on Executive Reorganization on March 9, 1967 and hearings have been scheduled to begin on April 4, 1967.

PURPOSE OF THE PLAN

The purpose of Reorganization Plan No. 1 of 1967 is to streamline the procedures under existing law, which require shipowners to deal with both the Departments of Commerce and Transportation whenever a ship's name is changed, its structure is modified or it is sold or transferred. The plan seeks to accomplish this objective by transferring from the Secretary of Commerce to the Secretary of Transportation the authority to approve the surrender of certain ship documents issued for commercial vessels covered by preferred mortgages or owned by the United States, thus placing all marine documentation functions in the Department of Transportation.

Under the act establishing the Department of Transportation, the Secretary, acting through the Coast Guard, will, after April 1, 1967, the effective date of that act, have responsibility for recording bills of sale, transfers and mortgages of ships; issuing new marine documents; and retaining custody of preferred mortgages on vessels. This was accomplished by a transfer by the Secretary of the Treasury of certain marine functions, including marine documentation, from the Commissioner of Customs to the Commandant of the Coast Guard, effective February 24, 1967, in contemplation of the transfer of the Coast Guard to the Department of Transportation on April 1, 1967, (Treas. Dept. Order No. 167–81, January 30, 1967). However, the Secretary will not have the authority to approve the surrender of documents for vessels covered by preferred mortgages, since that authority still resides in the Secretary of Commerce, due to certain historical developments summarized below. As a result, whenever certain circumstances occur which require a shipowner to surrender his ship's documents and obtain new documents, he must first obtain a prescribed form from the Secretary of Transportation, which is then filled out and submitted to the Secretary of Commerce for his approval of the surrender; thereafter, the shipowner must go back to the Secretary of Trang. portation to effect the surrender and obtain new documents.

According to the President's message accompanying the plan, it is designed to eliminate this duplication of effort and to save time and expense for the shipowner. It is said to be part of a larger effort to streamline the Government, make its operations as efficient as possible and enable it to provide better service to the citizens and businessmen of the country. Although it is not so stated in the message, the major improvement will arise out of the elimination of duplication of records and personnel, since all of these responsibilities, activities and services will be centralized in one agency—the Department of Transportation.

PROVISIONS OF THE PLAN

Section 1 transfers to the Secretary of Transportation the functions now vested in the Secretary of Commerce relating to the approval of the surrender of documents of a vessel pursuant to subsections B(4) and O(a) of the Ship Mortgage Act of 1920, as amended (46 U.S.C. 911(4) and 961(a)).

Section 2(a) provides for the usual incidental transfer to tue Department of Transportation of so much of tue personnel, property, records and unexpended balances of appropriations, allocations and other funds available, or to be made

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