REORGANIZATION PLAN NO. 1 OF 1967 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 on 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 disapproval 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 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, 90th 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 modified, 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. 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 Transportation 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 the Department of Transportation of so much of the personnel, property, records and unexpended balances of appropriations, allocations and other funds available, or to be made available, in connection with the functions transferred by the plan, as the Director of the Bureau of the Budget shall determine and direct. Section 2(b) provides that such further measures and dispositions as the Direc tor of the Bureau of the Budget, shall deem necessary in order to effectuate the transfers provided for in subsection (a) of this section shall be carried out in such a manner as he shall and by such agencies as he shall designate. STATUTES INVOLVED IN THE TRANSFER Section B(4) of the Ship Mortgage Act, 1920 (46 U.S.C. 911(4)) defines the term "vessel of the United States", for the purpose of that act, to mean "any vessel documented under the laws of the United States and such vessel shall be held to continue to be so documented until its documents are surrendered with the approval of the Secretary of Commerce ***'. Section O(a) of the Ship Mortgage Act, 1920 (46 U.S.C. 961(a)) provides that "***the documents of a vessel of the United States covered by a preferred mortgage may not be surrendered (except in the case of the forfeiture of the vessel or its sale by the order of any court of the United States or any foreign country) without the approval of the Secretary of Commerce. The Secretary shall refuse such approval unless the mortgagee consents to such surrender." It may be noted that, as approved by the Senate, section 6(a)(5) of S. 3010, the substance of which was enacted as the Department of Transportion Act (P.L. 89-670), provided for the transfer from the Secretary of Commerce to the Secretary of Transportation of the functions set forth above. However, this subsection was deleted by the conference committee, along with all other marine functions of the Secretary of Commerce leaving them in the Commerce Department. HISTORICAL BACKGROUND AND DEVELOPMENTS Background and developments A system of documentation for American vessels was first provided for by the Act of September 1, 1789, and responsibility for its administration was subsequently placed in the Department of the Treasury. Generally, in the Eighteenth and Nineteenth Centuries, the navigation laws were administered locally by collectors and deputy collectors of customs, under the general supervision of the Secretary of the Treasury, and certificates of registry and other marine documents were provided by the Office of the Register of the Treasury. In 1884, all of the Treasury Department's functions under the navigation laws, including marine documentation, were consolidated in a Bureau of Navigation where they remained until 1903, when the Bureau was transferred to the newlyestablisned Department of Commerce and Labor. Although this transfer vested the administrative duties of the Secretary of the Treasury with respect to navigation laws in the Secretary of Commerce and Labor, the enforcement duties continued to be performed by cutoms officials. In 1913, these functions were transferred to the newly-established Department of Commerce. They were subsequently combined in a Bureau of Navigation and Steamboat Inspection (Act of June 30, 1932, 47 Stat. 415), which was later redesignated as the Bureau of Marine Inspection and Navigation (Act of May 27, -1936, 49 Stat. 1380). In 1920, the Congress enacted the Merchant Marine Act, 1920, in order to provide for the promotion and maintenance of the American merchant marine, and for other purposes. Section 30 of that Act, designated the Ship Mortgage Act, 1920 (41 Stat. 1000), provided, among other things, that the marine documents of a vessel of the United States, covered by a preferred mortgage could not be surrendered without the approval of the United States Shipping Board. Effective March 2, 1934, by Executive Order 6166, dated June 10, 1933, the United States Shipping Board was abolished and all of its functions were transferred to the Department of Commerce. At this point, it will be noted that all of the functions and responsibilities with respect to marine documentation were vested in the Secretary of Commerce, although enforcement remained with customs officials, under the supervision of the Secretary of Commerce. However, the Merchant Marine Act, 1936 (46 U.S.C. 1114) established an independent United States Maritime Commission and transferred to it all of the functions, powers and duties vested in the former United States Shipping Board, thus taking from the Secretary of Commerce the function of approving the surrendering of marine documents. All of the other functions and responsibilities, including those involving marine documents, remained in the Bureau of Marine Inspection and Navigation until March 1, 1942, when they were transferred temporarily to the Coast Guard and the Bureau of Customs (with respect to marine documentation) by Executive Order (E.O. 9083, Feb. 28, 1942), pursuant to authority vested in the President by the First War Powers Act (Public Law 354, 77th Cong.). This transfer and the abolition of the Bureau of Marine Inspection and Navigation were made permanent by Reorganization Plan No. 3 of 1946, effective July 16, 1946 (46 U.S.C. 2). Effective May 24, 1950, by Reorganization Plan No. 21 of 1950 (64 Stat. 1273), the United States Maritime Commission was abolished and all of its functions were transferred to the Secretary of Commerce, who delegated their performance to the newly-established Maritime Administration of the Department of Commerce; and by Reorganization Plan No. 26 of 1950 (64 Stat. 1280), effective July 31 1950, all of the functions of all of the officers, agencies, and employees of the Department of the Treasury, including those of the Commandant of the Coast Guard and the Commissioner of Customs, pertaining to the former Bureau of Marine Inspection and Navigation, were transferred to the Secretary of the Treasury, who, pursuant to authority vested in him, redelegated them to these two officials by Treasury Department Order No. 120, July 31, 1950. Summary The foregoing review of the historical background and subsequent development reveals that: 1. From 1789 to 1903, responsibility for marine documentation was in the Department of the Treasury. 2. From 1903 to 1920, these responsibilities were placed first in the Department of Commerce and Labor and, in 1913, in the Department of Commerce. 3. From 1920 to 1934, marine documentation remained in the Department of Commerce, except for the function of approving the surrender of documents of a vessel of the United States covered by a preferred mortgage, which was placed in the United States Shipping Board. 4. Between 1934 and 1936, all marine documentation functions were in the Department of Commerce, including the approval of the surrender of preferred mortgage documents, since the United States Shipping Board was abolished and its functions were transferred to the Secretary of Commerce. 5. From 1936 to 1942, the marine documentation function remained in the Department of Commerce, except for the approval of the surrender of preferred mortgage documents, which function was vested in a newlyestablished, independent United States Maritime Commission. 6. From 1942 to 1950, all marine documentation functions were transferred to the Collector of Customs, under the Secretary of the Treasury, except the surrender approval, which remained in the United States Maritime Commission. 7. From 1950 to the present, these functions have remained in the Secretary of the Treasury, exercised by the Collector of Customs by delegation, except for the surrender approval which was returned to the Secretary of Commerce, following the abolition of the former United States Maritime Commission. 8. As indicated above, effective February 24, 1967, the Secretary of the Treasury, by departmental order, transferred to the Coast Guard certain marine functions, including marine documentation, in contemplation of the transfer of the Coast Guard to the Department of Transportation, which will become effective on April 1, 1967. DISADVANTAGES OF PRESENT PROCEDURES AND BENEFITS OF PROPOSED TRANSFER Existing procedures At present, a shipowner must go to the Bureau of Customs, Department of the Treasury and the Maritime Administration, Department of Commerce, in order to surrender preferred mortgage documents and obtain new documentation. As a result, both agencies must maintain duplicate records and staffs to perform these functions, and the Maritime Administration has no other responsibilities with respect to marine documents. Furthermore, according to information furnished by the Bureau of the Budget, present procedures involve some 14 steps or actions which are time-consuming, as well as the payment of a $15 user fee to the Maritime Administration, in order to obtain approval of surrender. 78-832-67- -2 |