2008 Rates for Pilotage on the Great Lakes

AGENCY:

Coast Guard, DHS.

ACTION:

Interim rule.

SUMMARY:

As required by statute, the Coast Guard has reviewed and is updating the rates for pilotage service on the Great Lakes for the 2008 navigation season. We are increasing pilotage rates an average 8.17% over the last ratemaking that was completed in September 2007. This rulemaking promotes the Coast Guard strategic goals of maritime safety, protection of natural resources, maritime security, and maritime mobility.

DATES:

This interim rule is effective March 21, 2008. Comments and related material must reach the Docket Management Facility on or before April 21, 2008.

ADDRESSES:

You may submit comments identified by Coast Guard docket number USCG-2007-0039 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods:

(1) Online: http://www.regulations.gov.

(2) Mail: Docket Management Facility (M-30), U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.

(3) Hand delivery: Room W12-140 on the Ground Floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329.

(4) Fax: 202-493-2251.

FOR FURTHER INFORMATION CONTACT:

For questions on this interim rule, please call Mr. Paul Wasserman, Chief, Great Lakes Pilotage Branch, Commandant (CG-54122), U.S. Coast Guard, at 202-372-1535, by fax 202-372-1929, or by e-mail at Paul.M.Wasserman@uscg.mil. For questions on viewing or submitting material to the docket, call Renee V. Wright, Program Manager, Dockets Operations, telephone 202-366-9826.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation and Request for Comments

II. Effective Date

III. Background and Purpose

IV. Discussion of Comments

V. Discussion of the Interim Rule

VI. Regulatory Evaluation

I. Public Participation and Request for Comments

We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to http://www.regulations.gov and will include any personal information you have provided. We have an agreement with the Department of Transportation (DOT) to use the Docket Management Facility. Please see DOT's “Privacy Act” paragraph below.

A. Submitting Comments

If you submit a comment, please include the docket number for this rulemaking (USCG-2007-0039), indicate the specific section of this document to which each comment applies, and give the reason for each comment. We recommend that you include your name and a mailing address, an e-mail address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission. You may submit your comments and material by electronic means, mail, fax, or delivery to the Docket Management Facility at the address under ADDRESSES; but please submit your comments and material by only one means. If you submit them by mail or delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this rule in view of them.

B. Viewing Comments and Documents

To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov at any time. Enter the docket number for this rulemaking (USCG-2007-0039) in the Search box, and click “Go >>.” You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

C. Privacy Act

Anyone can 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 Department of Transportation's Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477), or you may visit http://DocketsInfo.dot.gov.

D. Public Meeting

We do not now plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register.

II. Effective Date

This interim rule takes effect upon publication in the Federal Register. Under 5 U.S.C. 553(d), the Coast Guard finds good cause for this interim rule to take effect less than 30 days after publication. Congress mandates that Great Lakes pilotage rates be reviewed and adjusted annually by March 1. This interim rule cannot be issued until some time after that date, but we expect it to be issued close to the beginning of the 2008 Great Lakes shipping season in late March. If the interim rule takes effect upon publication, the Congressional intent for rate adjustments before the shipping season opens will essentially be met. Although the public comments received in response to our notice of proposed rulemaking (NPRM; 73 FR 6085, Feb. 1, 2008) raised several substantive issues that will require some additional time for the Coast Guard to review and to properly address in a final rule, several comments pointed to the need for early rate adjustment, and there is no question that a rate adjustment at least as large as that proposed in the NPRM is fully justified. Therefore, to delay implementation of a rate adjustment that is unquestionably justified, and that Congress intended the Coast Guard to make in time for the annual resumption of Great Lakes shipping is both unnecessary and contrary to the public interest, and the Coast Guard finds good cause under 5 U.S.C. 553(d) for this interim rule to take effect upon its publication in the Federal Register.

III. Background and Purpose

The Great Lakes Pilotage Act of 1960, codified in Title 46, Chapter 93, of the United States Code (U.S.C.), requires foreign-flag vessels and U.S.-flag vessels in foreign trade to use Federal Great Lakes registered pilots while transiting the St. Lawrence Seaway and the Great Lakes system. 46 U.S.C. 9302, 9308. The Coast Guard is responsible for administering this pilotage program, which includes setting rates for pilotage service. 46 U.S.C. 9303.

The Coast Guard pilotage regulations require annual reviews of pilotage rates and the creation of a new rate at least once every five years, or sooner, if annual reviews show a need. 46 CFR part 404. Annual reviews ensure that sufficient revenues are generated to cover the annual projected allowable expenses, target pilot compensation, and returns on investment of the pilot associations. 46 U.S.C. 9303(f) requires that we conduct these reviews and make appropriate rate adjustments by March 1 of every shipping season.

To assist in calculating pilotage rates, the three Great Lakes pilotage associations are required to submit to the Coast Guard annual financial statements prepared by certified public accounting firms. In addition, every fifth year, in connection with the full ratemaking, the Coast Guard contracts with an independent accounting firm to conduct audits of the accounts and records of the pilotage associations and to submit financial reports relevant to the ratemaking process. In those years when a full ratemaking is conducted, the Coast Guard generates the pilotage rates using Appendix A to 46 CFR Part 404. Between the five-year full ratemaking intervals, the Coast Guard annually reviews the pilotage rates using Appendix C to 46 CFR Part 404, and adjusts rates as appropriate.

The last ratemaking was completed by publication of a final rule in the Federal Register on September 18, 2007 (72 FR 53158). The annual review following the 2007 ratemaking showed a need to adjust rates for the 2008 Great Lakes shipping season. That adjustment was the subject of the NPRM published in the Federal Register on February 1, 2008.

IV. Discussion of Comments

The Coast Guard received six comments in response to the NPRM. The comments raised several issues that we considered substantive and which will require the Coast Guard to conduct additional review to properly address.

Public comments on the NPRM suggested that:

• We should revise our monthly multiplier from 49.5 to 54.5 days;
• We should apply the AMO wage rate and health insurance adjustments that are in effect on August 1, 2008;
• The projected bridge hours for Areas 2, 4, and 5 are too high when compared to their 2007 actual bridge hours experience;
• We need to address the Riker Report on Great Lakes pilotage ratemaking and revise the bridge hours standards;
• We should increase our calculations for the length of the navigation season from 270 days to 284 days;
• We should raise our weighting factor for smaller vessels from 1.0 to 1.15 in order to align with the Canadians current system of weighting factors;
• We should further justify our proposal for clarifying the duty of compliance with lawful orders; and
• We should place supporting financial and contract documents in the public docket.

At the same time, commenters also commended the Coast Guard for acting to put new rates in place early in the 2008 shipping season and urged us to implement the rate adjustment as soon as possible. We agree that action as close to the beginning of the shipping season as possible is very important, and we acknowledge that Congress has set a March 1 deadline for taking that action.

Although the comments on the NPRM indicate a possible need for further rate adjustments in 2008, there is no question that a rate increase at least as large as that proposed in the NPRM is fully justified. Therefore, we are issuing this interim rule in order to make the presently justified rate adjustments as close as possible to the beginning of the 2008 Great Lakes navigation season. Other issues raised by the public in their comments will be addressed in a subsequent final rule which we hope to issue by this summer.

V. Discussion of the Interim Rule

This interim rule puts into place, without modification, the rate changes that were proposed in the NPRM. Because we are implementing this portion of the NPRM proposals without modification, we will not repeat the extended discussion of these changes that appears in the NPRM. We are increasing pilotage rates in accordance with the methodology outlined in Appendix C to 46 CFR Part 404. The rate changes for each individual pilotage Area are shown in Table 1. They average 8.17% across all Areas. For a full discussion of how rate changes were calculated, see pages 6087 through 6094 of the NPRM.

Based upon comments received, we are withholding implementation of the amendments proposed to 46 CFR §§ 401.700 and 401.710 to clarify the obligation imposed on Great Lakes registered pilots and authorized pilotage pools to fully and professionally cooperate in the course of performing their duties with U.S. and Canadian Coast Guard units and personnel, vessel traffic service personnel, and other lawful authority. Upon final review, we will determine whether these amendments should be implemented.

VI. Regulatory Evaluation

We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analysis based on 13 of these statutes or executive orders.

A. Regulatory Analysis

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The changes proposed in the February 1, 2008 NPRM have not been modified for this interim rule. The cost and population data contained in the NPRM analysis is also unchanged for this interim rule. Consequently, we adopt the analysis from the NPRM for this interim rule. This rule puts into place the 8.17 percent average rate adjustment for the Great Lakes system over the rate adjustment found in the 2007 final rule. The annual cost of the rate adjustment in this rule to shippers is approximately $1.0 million (non-discounted). The total five-year present value cost estimate (2008-2012) of this rule to shippers is $4.4 million discounted at a seven percent discount rate and $4.7 million discounted at a three percent discount rate. We use a five-year cost estimate because the Coast Guard is required to determine and, if necessary, perform a full adjustment of Great Lakes pilotage rates every five years.

B. Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule has a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The analysis of the impact to small entities in the NPRM resulted in a finding that the proposed changes would not have a significant impact on a substantial number of small entities. Since we received no comments pertaining to small entities and the analysis has not changed, we adopt the NPRM's analysis for this interim rule. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule does not have a significant economic impact on a substantial number of U.S. small entities.

C. Assistance for Small Entities

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 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. If the rule affects your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Paul Wasserman, Great Lakes Pilotage Branch, (CG-54122), U.S. Coast Guard, telephone 202-372-1535, or send him e-mail at Paul.M.Wasserman@uscg.mil.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

D. Collection of Information

Under the Paperwork Reduction Act of 1995, (44 U.S.C. 3501-3520), the Office of Management and Budget (OMB) reviews each rule that contains a collection of information requirement to determine whether the practical value of the information is worth the burden imposed by its collection. Collection of information requirements include reporting, record keeping, notification, and other similar requirements.

This rule calls for no new collection of information under the Paperwork Reduction Act. This rule does not change the burden in the collection currently approved by the Office of Management and Budget under OMB Control Number 1625-0086, Great Lakes Pilotage Methodology.

E. 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. We have analyzed this rule under that Order and have determined that it does not have implications for federalism because there are no similar State regulations, and the States do not have the authority to regulate and adjust rates for pilotage services in the Great Lakes system.

F. 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 tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule would not result in such expenditure, we do discuss the economic impact of this rule elsewhere in this preamble.

G. Taking of Private Property

This rule would 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.

H. Civil Justice Reform

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

I. Protection of Children

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

J. Indian Tribal Governments

This 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.

K. Energy Effects

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. 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.

L. Technical Standards

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. § 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

M. Environment

We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). We have concluded that this action is not likely to have a significant effect on the human environment and that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe this rule should be categorically excluded, under figure 2-1, paragraph (34)(a), of the Instruction, from further environmental documentation. Paragraph 34(a) pertains to minor regulatory changes that are editorial or procedural in nature. This rule adjusts rates in accordance with applicable statutory and regulatory mandates. A final “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES.

List of Subjects in 46 CFR part 401

• Administrative practice and procedure
• Great Lakes
• Navigation (water)
• Penalties
• Reporting and recordkeeping requirements
• Seamen

For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 401 as follows:

PART 401—GREAT LAKES PILOTAGE REGULATIONS

1. The authority citation for part 401 continues to read as follows:

Authority: 46 U.S.C. 2104(a), 6101, 7701, 8105, 9303, 9304; Department of Homeland Security Delegation No. 0170.1 46 CFR 401.105 also issued under the authority of 44 U.S.C. 3507.

2. In § 401.405, revise paragraphs (a) and (b), including the footnote to Table (a), to read as follows:

3. In § 401.407 revise paragraphs (a) and (b), including the footnote to Table (b), to read as follows:

4. In § 401.410, revise paragraphs (a), (b), and (c) to read as follows:

5. In § 401.420—

a. In paragraph (a), remove the number “$86” and add, in its place, the number “$93”; and remove the number “$1,349” and add, in its place, the number “$1,459”.

b. In paragraph (b), remove the number “$86” and add, in its place, the number “$93”; and remove the number “$1,349” and add, in its place, the number “$1,459”.

c. In paragraph (c)(1), remove the number “$510” and add, in its place, the number “$552”; in paragraph (c)(3), remove the number “$86” and add, in its place, the number “$93”; and, also in paragraph (c)(3), remove the number “$1,349” and add, in its place, the number “$1,459”.

6. In § 401.428, remove the number “$520” and add, in its place, the number “$562”.