[Federal Register Volume 60, Number 237 (Monday, December 11, 1995)]
[Rules and Regulations]
[Pages 63444-63450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30081]



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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 1

[OST Docket No. 1; Amendment 1-272]


Organization and Delegation of Powers and Duties; Transfer of 
Great Lakes Pilotage Authority From the Coast Guard to the Saint 
Lawrence Seaway Development Corporation

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

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SUMMARY: The Coast Guard's responsibility for administering the 
Secretary's functions under the Great Lakes Pilotage Act of 1960, as 
amended, and the Secretary's authority to enter into, revise, or amend 
arrangements with Canada, are being transferred to the Saint Lawrence 
Seaway Development Corporation. This rule affirms the interim final 
rule amending the delegations to be in accordance with the changed 
responsibilities. Although a comment period for the Secretary's 
delegations is not required by the Administrative Procedure Act, the 
Department of Transportation requested public comment on the interim 
final rule because of public and Congressional interest in Great Lakes 
Pilotage. This final rule responds to the comments and is necessary to 
inform the public that the interim final rule has been affirmed.

DATES: This rule is effective on December 11, 1995.

FOR FURTHER INFORMATION CONTACT: Steven B. Farbman, Office of the 
Assistant General Counsel for Regulation and Enforcement (202) 366-
9306, United States Department of Transportation, 400 7th Street SW., 
Washington, DC 20590.

REGULATORY HISTORY: On July 31, 1995, the Department of Transportation 
(Department) published an interim final rule with request for comments 
(60 FR 38971). The interim final rule contained language that would 
transfer Great Lakes Pilotage authority from the Coast Guard to the St. 
Lawrence Seaway Development Corporation (SLSDC). The comment period for 
the interim final rule ended on September 29, 1995, and was to become 
effective October 30, 1995. On October 27, 1995, the Department issued 
a rule suspending the effectiveness of the interim final rule. This 
final rule affirms the interim final rule and establishes a new 
effective date.

SUPPLEMENTARY INFORMATION: The Coast Guard's responsibility for 
administering the Secretary's functions under the Great Lakes Pilotage 
Act of 1960, as amended, (the Act) is being transferred to the SLSDC. 
This rule amends the delegations and enabling regulations to be in 
accordance with the changed responsibilities. The functions that are 
being transferred are: (1) Investigation and prosecution of violations 
of the Act; (2) registration, qualification, and training of registered 
pilots; (3) association working rules and dispatching procedures; (4) 
pilot working conditions; (5) selection of pilots; (6) number of 
pilots; (7) availability of pilots; (8) number of pilotage pools; (9) 
articles of association; (10) auditing; and (11) ratemaking. The 
licensing of pilots and the investigation and prosecution of marine 
accidents and incidents are essential Coast Guard safety functions that 
are separate from the Act and Great Lakes Pilotage Regulations. These 
functions will remain with the Coast Guard.
    Transfer of pilotage responsibilities to the SLSDC will place 
pilotage under permanent civilian authority, and placing pilotage in a 
smaller organization with an established presence on the Great Lakes 
will give pilotage issues greater visibility and more timely attention. 
In addition, the SLSDC is being given authority to negotiate directly 
with Canada, which will allow timely adjustments to pilotage rates. The 
lack of timely adjustments has been a subject of past pilot criticism.
    The Secretary's authority to enter into, revise, or amend 
arrangements with Canada is being delegated to the SLSDC Administrator 
in coordination with the General Counsel of the Department. A 
Memorandum of Arrangements between the United States and Canada, last 
renegotiated in 1977, states that the Secretary and the Minister of 
Transport of Canada ``will arrange for the establishment of regulations 
imposing identical rates, charges, and any other conditions or terms 
for services of pilots in the waters of the Great Lakes. * * *.'' In 
1983, the Act was amended to provide that the ``Secretary, subject to 
the concurrence of the Secretary of State, may make agreements with the 
appropriate agency of Canada to * * * prescribe joint or identical 
rates and charges .''

Discussion of Comments and Changes

    The Department received comments from well over 100 commenters 
regarding the transfer of Great Lakes Pilotage oversight from the Coast 
Guard to the SLSDC. Comments on the interim final rule were received 
from Federal and State legislators, pilot associations 

[[Page 63445]]
and their employees, individual pilots, professional maritime 
organizations, shipping associations, port authorities, labor 
organizations, marine service companies, an environmental group, one 
State regulatory agency, and interested members of the public.
    The interim final rule was supported in comments from Members of 
Congress, individual members of the public, port authorities, labor 
organizations, professional maritime organizations, pilot 
organizations, pilots, a pilot association and its employees, and 
marine service companies. Among the organizations supporting the rule 
is the owner and operator of one of the largest fleet of Great Lakes-
dedicated deep sea ships; this organization is also one of the largest 
consumers of pilotage services in the St. Lawrence Seaway system. Also 
in support of the rule was the Association of Great Lakes Ports, 
representing the public port authorities of Green Bay, Milwaukee, 
Chicago, Burns Harbor, Detroit, Monroe, Toledo, Cleveland, Erie, 
Ogdensburg, Superior, and Oswego. Comments in support of the transfer 
of delegation also came from the International Longshoremen's 
Association (ILA) and individual ports, representing approximately 
95,000 members and associated parties. A subgroup of the ILA, 
representing approximately 10,000 members, the International 
Organization of Masters, Mates and Pilots, is in favor of transferring 
delegation from the Coast Guard, but want it moved to an 
``Undersecretary'' in the Department. Of the three Great Lakes pilot 
associations, District 2 favors the transfer to SLSDC. As of the close 
of the comment period, there were 12 pilots in District 2.
    Those in favor gave the following reasons in support of the 
transfer of delegation: (1) the SLSDC is a smaller organization than 
the Coast Guard, and it can significantly reduce the amount of ``red 
tape'' associated with pilotage oversight; (2) the SLSDC is a civilian 
agency, and it can guarantee a civilian Director of Great Lakes 
Pilotage with better continuity than a military Director; (3) the 
SLSDC's focus is on the Great Lakes; (4) pilotage issues would receive 
more attention from the Administrator of the SLSDC and the Secretary of 
Transportation; and (5) the SLSDC's interaction with all elements of 
the Great Lakes community would give the pilots significant new 
contacts with their customer base.
    The interim final rule was opposed in comments from Members of 
Congress and State legislators, pilot associations and their employees, 
individual pilots, professional maritime organizations, shipping 
associations, an environmental group, one State regulatory agency, and 
interested members of the public. Among the organizations opposed to 
the transfer are the American Pilots Association, Save The River, Inc., 
Lake Carriers' Association, and the Association of International Ship 
Masters, which represents about 3,000 to 5,000 members. Of the three 
Great Lakes pilot associations, Districts 1 and 3 oppose the transfer. 
As of the close of the comment period, there were 9 pilots in District 
1 and 19 pilots in District 3.
    Those objecting to the transfer of authority did so for the 
following reasons: (1) The SLSDC is primarily concerned with economic 
and financial issues, and, because of this focus, it will sacrifice 
safety by reducing American pilotage jobs and pay, increasing hours of 
service, or taking other actions that will have an impact on the 
working conditions of pilots and, therefore, the protection of the 
environment; (2) many of the functions being transferred to the SLSDC 
are related to both safety and economics; (3) the SLSDC does not have 
the knowledge to oversee pilotage or negotiate with Canadian officials 
regarding pilotage issues; (4) the Coast Guard's recent transfer of 
Great Lakes pilotage oversight to the newly-established National 
Maritime Center (NMC) reduces red tape, and establishes a civilian 
Director without the need for a transfer; (5) the fate of the SLSDC is 
in transition because of the DOT's restructuring plans, and this 
restructuring will remove the SLSDC and Great Lakes pilotage from 
government oversight; (6) there should have been more public input and 
more information published regarding the transfer of authority, 
including extensive public hearings; (7) the interim final rule 
violated the notice and comment requirements of the Administrative 
Procedure Act (APA); and (8) Congress intended that pilotage functions 
remain in the Coast Guard.
    The Department agrees with those commenters who stated that many of 
the 11 functions being transferred to the SLSDC relate in part to 
safety as well as economics. While the interim final rule stated that 
those functions ``are considered to have economic effects,'' the 
Department did not mean to imply that only economic functions could be 
transferred. The fact that there are safety ramifications involved, 
however, should not, and does not, disqualify SLSDC as the agency in 
which the authority should reside.
    Some commenters opposing the rule pointed to a November 1994 Coast 
Guard memorandum approved by the Secretary; attached to the November 
1994 memorandum is an options paper, which noted that both safety and 
economic functions are vested in the Director of Great Lakes Pilotage, 
and that the registration of pilots is a safety function. It also 
acknowledged that some economic issues such as travel and work-hour 
limits also have safety implications (e.g., their effect on fatigue). 
Four options for Departmental oversight of Great Lakes pilotage 
functions, each listing pros and cons were provided: (1) Separate 
safety and economic oversight; (2) retain in the Coast Guard; (3) 
transfer to the Office of the Secretary (OST); and (4) transfer to 
SLSDC/MARAD.
    Included in this last option was the following statement: ``A 
transfer to SLSDC or MARAD may have an adverse impact on safety because 
the mission of each agency is economic in nature and primarily 
associated with promotion of shipping.'' The memorandum that the 
Secretary approved recommended that the responsibility for safety 
aspects of Great Lakes pilotage remain with the Coast Guard, but that 
economic elements of pilotage oversight be transferred to another 
Department office or agency. It also recommended that a Great Lakes 
Pilotage Working Group (Working Group) be formed to develop this 
option.
    The Working Group was formed and included representatives from OST, 
the Coast Guard, MARAD, and SLSDC. In developing the option that SLSDC 
should assume responsibility for the 11 Great Lakes pilotage functions, 
the Final Report of the Working Group was not inconsistent with the 
November 1994 memorandum, which had stated that a transfer to SLSDC may 
have an adverse impact on safety. The Final Report listed the functions 
to be transferred under the heading, ``Economic Functions,'' and it 
referred to them as ``essentially economic functions. * * *'' The 
Department believes that the 11 functions are essentially, though not 
entirely, economic functions. The option in the November 1994 
memorandum that contained the ``adverse impact on safety'' statement 
envisioned the transfer to SLSDC of not only the 11 ``essentially 
economic'' functions, but the following two safety functions as well: 
(1) The licensing of pilots and (2) the investigation and prosecution 
of marine accidents and incidents.
    The Final Report judged these to be essential Coast Guard functions 
solely related to safety, and said they should remain with the Coast 
Guard. Similarly, the November 1994 memorandum intended that 
responsibility for only the safety aspects of Great Lakes pilotage 

[[Page 63446]]
remain with the Coast Guard, but not those ``essentially economic'' 
functions that also have safety ramifications. In fact, the Final 
Report stated that the Working Group believed that the transfer of the 
11 functions out of the Coast Guard--to any other recipient, including 
the SLSDC--would not have a detrimental effect on safety.
    Moreover, to the extent the functions involve safety, the 
Department has determined there is no problem transferring them to the 
SLSDC. As described below, the SLSDC has significant safety 
responsibilities, which it has performed successfully for over thirty-
five years. An examination of the SLSDC's operations shows that it has 
an impeccable safety record with respect to its authority over one of 
the most difficult sections of the entire Great Lakes/Saint Lawrence 
Seaway System. Furthermore, in implementing its safety 
responsibilities, there is no evidence that the SLSDC has ever 
sacrificed safety considerations for economic gain.
    The SLSDC operates two locks, a fleet of vessels, maintains 
navigational aids, and carries out safety inspections of vessels. In 
the St. Lawrence Seaway System, the SLSDC works closely with the Coast 
Guard, and performs the same Captain-of-the-Port functions in the 
principal operating areas of the Seaway System that the Coast Guard 
performs elsewhere. In the Port and Tanker Safety Act of 1978, Congress 
expressly reserved that authority to the SLSDC.
    In addition, the SLSDC has a comprehensive emergency response plan 
designed to protect the environment on the St. Lawrence River and 
adjacent areas. The plan directly involves U.S. and Canadian Federal, 
state, and local governments, private organizations, and other 
interested parties, including pilots. The plan is in place, is tested 
yearly, and has been used in actual circumstances twice with complete 
success. This year's drill included participation by Federal, state, 
and local agencies, in addition to representatives from U.S. and 
Canadian pilot organizations.
    The SLSDC also has ample, long-standing safety law enforcement 
experience. It is responsible for administration of the Seaway 
Regulations and Rules (33 CFR Part 401) regarding the clearance, 
readiness, and operating requirements for safe passage of vessels 
transiting the St. Lawrence Seaway. It operates the Seaway under these 
regulations, which are jointly promulgated and enforced with the 
Canadian Saint Lawrence Seaway Authority and which contain many vessel 
safety rules. In addition, its Captain-of-the-Port responsibility 
carries with it enforcement authority, including the ability to fine 
for violations, which the SLSDC exercises under subpart B of part 401.
    The SLSDC not only has this independent, significant law 
enforcement experience, but under an agreement with the Coast Guard, 
the SLSDC coordinates the exercise of its authority with related 
enforcement activities of the Coast Guard, including those related to 
pilotage. Moreover, the SLSDC's personnel carry out many of the Coast 
Guard inspection and related functions for the Coast Guard, including 
inspections performed by the SLSDC in Canadian waters before vessels 
transit the Seaway. In this regard, the SLSDC has the added advantages 
of long-standing, joint enforcement with Canada of laws and regulations 
relative to the Seaway, including safety laws and regulations, and 
ready, cooperative access to Canadian waters for joint as well as U.S. 
law enforcement purposes.
    Several commenters cited the SLSDC's handling of an incident 
involving the M/T CONCORDE as a demonstration of the SLSDC's concern 
for economics over safety, alleging that the SLSDC permitted a master 
who was drunk to pilot a vessel alone. This refers to an incident in 
which it was reported to U.S. and Canadian authorities that the master 
of the M/T CONCORDE may have been intoxicated. Upon learning of these 
allegations, the St. Lawrence Seaway Pilots Association (SLSPA) 
requested permission to assign two pilots to the vessel. In response to 
the allegations of intoxication, the M/T CONCORDE was boarded by the 
Coast Guard and the master was given a breathalyzer test. The master 
not only passed the breathalyzer test, but he showed no signs of misuse 
of alcohol. As a result of the U.S. Coast Guard boarding, the Coast 
Guard, the SLSDC, and the Canadian Great Lakes Pilotage Authority 
cleared the M/T CONCORDE to proceed on its voyage without restriction 
with one pilot. Accordingly, the Department finds no basis for the 
position of those commenters who described this incident as an example 
of the SLSDC favoring economics over safety. Rather, the Department 
believes that it is an excellent example of coordination and 
cooperation among the Coast Guard, SLSDC, and Canadian authorities 
regarding safety issues that affect the entire St. Lawrence Seaway.
    Some commenters objected to the interim final rule's 
characterization that it was issued in response to ``pilot concerns;'' 
they argued instead that it was issued in response to outside political 
pressure. Some commenters stated that the transfer of authority is 
supported by only one Great Lakes Registered pilot, and is opposed by 
all three Great Lakes pilot associations.
    The Department's examination of a possible transfer of Great Lakes 
pilotage authority was the result of a request from a delegation of 
interested persons, which included the President of a Great Lakes Pilot 
Association (also Vice President of the American Pilots Association for 
the Great Lakes), and President of the American Pilots Association. 
These organizations expressed concerns on behalf of their members about 
the lengthy ratemaking process and the lack of prompt attention given 
to pilotage issues. The Department continued its examination and 
discovered that similar concerns were expressed by many other 
interested parties throughout the Great Lakes. Commenters who believe 
the transfer of authority is not supported by any pilots are incorrect. 
While two Great Lakes Pilot Associations are opposed to the transfer, 
one Great Lakes Pilot Association supports the transfer. Letters of 
support for the transfer were also received from individual Great Lakes 
Registered Pilots, and from many other interested Great Lakes parties. 
The Department did not issue the interim final rule in response to 
Congressional pressure. Although the Department has received some 
Congressional support for the transfer, it has also received letters 
from individual Members of Congress expressing misgivings.
    Some commenters contended that the SLSDC lacks the knowledge or 
experience to negotiate issues with Canada. The Department disagrees. 
The SLSDC has over thirty-five years of experience in direct 
negotiations with the government of Canada over the Joint Tariff of 
Tolls, Joint Seaway Operating Regulations, and other matters of mutual 
concern. Moreover, the SLSDC has daily contact and coordination of 
activities and implementation of policies with the Great Lakes Pilotage 
Authority, Ltd. and the Canadian Seaway authority. In this respect, the 
SLSDC is experienced in, and well suited to, the role of negotiator on 
pilotage matters with the Canadian government.
    Some commenters stated that out of the 12 or so reviewers of rate 
adjustments, the SLSDC is the one agency that consistently opposed rate 
adjustments and was responsible for slowing down or halting the 
process. The Department, however, has found the opposite to be true. 
The Department has checked its records for the last seven years, the 
time during which a rulemaking data base has been kept, and, in that 
time period, the SLSDC has 

[[Page 63447]]
not opposed rate adjustments or been responsible for slowing down or 
halting the process.
    Some commenters declared that only the Coast Guard has pilotage 
expertise such as the experience to determine who is qualified to be a 
registered pilot. We are aware, too, that the Inspector General of the 
Department has sent a letter to Congressman David Obey, claiming that 
the SLSDC has no experience or expertise in many, if not all, of the 
responsibilities to be transferred. (The Inspector General also has 
raised this concern in the Department's coordination of the interim 
final rule.) The pilotage expertise resides in the Coast Guard's Great 
Lakes Pilotage Staff (the Staff), which is comprised of the Director of 
Great Lakes Pilotage, a Transportation Specialist who serves as the 
Assistant Director, and an Economist; the Staff and, thus, the 
expertise will transfer in its entirety to the SLSDC when the functions 
are transferred. Those who are executing the Great Lakes pilotage 
program now, including enforcement of the Act, will continue to do so 
after the transfer.
    The Staff will continue to operate in the SLSDC in the same manner 
in which it has operated in the Coast Guard. In preparation for the 
upcoming winter meetings of the three pilot associations, the Director 
of Great Lakes Pilotage has written to each of the association 
presidents to make them aware of pilotage issues that he would like to 
discuss. In each letter, the Director stated that he would like to 
reach an agreement on how the process can be improved. ``Identifying 
the areas where we need better procedures is beneficial to the system 
and the goals of safety. In the spirit of partnership, I hope we can 
improve the process together.'' These same goals are transferring to 
the SLSDC with the Director.
    Moreover, since shortly before its transfer to the NMC in July 
1995, the Staff has performed its Great Lakes pilotage responsibilities 
without receiving any specialized Coast Guard support to enable the 
Staff to perform these responsibilities better. It is not clear, 
therefore, why some believe that the expertise will suddenly evaporate 
when the Staff is transferred to the SLSDC. Furthermore, the SLSDC 
itself has developed an expertise in pilotage issues; it has directed 
vessel traffic in the Seaway system for decades and in so doing has 
substantial experience in dealing with pilots and pilotage matters. To 
the extent the Coast Guard has some special expertise necessary for a 
particular matter, the Staff can obtain Coast Guard support regardless 
of where the Staff is located.
    Some commenters questioned Department statements that the current 
Director of Great Lakes Pilotage has ten years of experience in Great 
Lakes Pilotage issues. The person who is the current Director became 
the Assistant Chief of the Coast Guard's Merchant Vessel Personnel 
Division in January 1985. As Assistant Chief, the Coast Guard's 
Pilotage Staff reported to him, and he was involved in every major 
pilotage policy decision. Since the function was moved from Cleveland 
to Washington, DC in 1990, he has been the alternate Director of Great 
Lakes Pilotage, that is, the person acting as Director in the latter's 
absence. In 1994, he assumed his present duties as Director of Great 
Lakes Pilotage. In addition, his career includes over 20 years of 
experience as a merchant marine officer, an officer in charge of U.S. 
naval vessels, navigation and seamanship instructor at the U.S. Naval 
Academy, and head of the Navigation Department at the Maritime 
Institute of Technology and Graduate Studies, an advanced school 
operated by the International Organization of Masters, Mates and 
Pilots. The Assistant Chief of the Pilotage staff also has many years 
of experience as a merchant marine officer, has commanded a vessel, and 
is a licensed first class pilot on the Great Lakes.
    Some commenters asked what the relationship would be between the 
Coast Guard and the SLSDC after the transfer of delegation of pilotage 
functions. The Department expects the Coast Guard and SLSDC to continue 
their current strong relationship of cooperation and coordination. 
Concerning pilotage on the Great Lakes, the Coast Guard will continue 
to perform the functions of evaluating, testing, grading, issuing and 
upgrading pilot licenses, investigating accidents and other 
infractions, and suspending or revoking pilot licenses. The SLSDC will 
perform all other functions related to Great Lakes registered pilots. 
The Coast Guard and SLSDC will enter into a Memorandum of Agreement 
(MOA) to ensure coordination and cooperation between the parties.
    One commenter argued that giving SLSDC the authority to enter into, 
revise, or amend arrangements with Canada with respect to pilotage 
rates, which until now has been reserved to the Secretary, may cost 
U.S. jobs as a bargaining tool to extract concessions from Canada on 
Seaway tolls. The Department disagrees. The transfer of the delegation 
of authority does not affect pilotage jobs, pay, or working conditions, 
increase hours of service, or impact adversely on safety or the 
environment. There is no connection between negotiations with Canada on 
Seaway tolls and on pilotage rates. Pilotage rates are now set in 
accordance with the published methodology; because rules setting 
pilotage rates generally are significant, Department policy requires 
that they be coordinated with and cleared through several Department 
offices and agencies before negotiations with Canada begin. Those 
negotiations were routinely conducted in the past by Coast Guard staff 
in Cleveland with no involvement by the Office of the Secretary or any 
of the other Department agencies. Under this delegation, the 
Secretary's authority to enter into, revise, or amend arrangements with 
Canada must be coordinated by SLSDC with the General Counsel of the 
Department, in the Office of the Secretary.
    That same commenter averred that the May 1972 Great Lakes Pilotage 
Review by the Department said that the significant policy leadership 
and review function must be retained by the Office of the Secretary. 
Policy review and oversight of pilotage is so retained. The Secretary 
is transferring one of his responsibilities from one agency that 
reports to him (the Coast Guard) to another (the SLSDC). He is not 
abrogating his responsibilities. The pilotage functions and personnel 
positions created to carry them out are designed to ensure that those 
responsibilities will be fully met. The individuals who occupy the 
positions must meet the requirements and qualifications demanded of 
those positions, irrespective of the agency in which they reside.
    The same commenter claimed that it is the layers of review by the 
Office of the Secretary (OST), not the size of the Coast Guard or 
negotiations with Canada, that have created the less than timely 
attention to pilotage issues and less than timely rate adjustments. 
Again, the Department disagrees. Coordination by OST allows review 
among interested Department elements. This review is necessary in the 
Department's decision-making process. The Department's experience shows 
that OST review has not caused unreasonable delay. Furthermore, there 
are no ``layers of review;'' review by OST and other interested 
elements is accomplished in one step and the document is then sent to 
the Secretary for approval.
    On the other hand, there can be multiple layers of review in 
Department agencies before a document is submitted to OST for 
coordination. Although approvals can take varying amounts of 

[[Page 63448]]
time, the Department has no doubt that the SLSDC, with a short review 
process, will be able to give more timely attention to pilotage issues 
and make more timely rate adjustments than would the Coast Guard, 
including the NMC. In addition, a transfer to the SLSDC would guarantee 
that there would always be a civilian Director of Great Lakes Pilotage.
    Some commenters believe that the transfer should not take place 
during the busiest part of the shipping season, i.e., November and 
December. These commenters indicated that a transfer at this time will 
disrupt pilotage operations. They cited the Final Report, which says 
that a target date for the transfer of March 31 is believed to be 
necessary to minimize disruption to the operation of the pilotage 
pools. If the Working Group believed that there would have been 
disruption had the transfer taken place in April, the commenters 
argued, how could there not be disruption to the operation of the 
pilotage pools during the height of the shipping season?
    The Department expects no disruption to pilotage operations, 
notwithstanding the position of the Working Group. The transfer does 
not in any way represent a shift in pilotage policies or operations. It 
only affects the internal delegation of responsibilities within the 
Department. There should be no negative effect on pilotage service. 
This rule will not change the pilotage rules and the manner in which 
they are administered, make the pilots employees of the SLSDC, or 
change the status or organizational structure under which the pilots 
now function. As it is with the Coast Guard, pilotage safety will 
remain the paramount concern of the SLSDC and will not become secondary 
to economic considerations. Since the Great Lakes Pilotage Staff is 
transferring with the functions, the only expected change is that the 
phone numbers for the Great Lakes Pilotage Staff will change. The new 
phone numbers will be widely distributed, and will not cause a 
disruption to pilotage operations.
    The DOT restructuring, if it occurs, will not remove Great Lakes 
pilotage from Federal government oversight. The Administrator will 
always exercise authority over Great Lakes pilotage under a delegation 
from the Secretary of Transportation and his successors. The transfer 
would not compromise the Secretary's ability to intervene in pilotage 
issues should that become necessary. Even if the SLSDC were to become 
separate from the Department, the legislation proposed by the 
Administration to accomplish this would provide for continued 
delegation of Secretarial authority to the SLSDC. The SLSDC would also 
remain a wholly-owned Federal government agency. The proposed 
legislation, in pertinent part, reads as follows:

    (b) Section 1 of the Act of May 13, 1954, Public Law 358 (33 
U.S.C. 981), as amended, is amended to read as follows:
    ``(a) There is hereby created a body corporate to be known as 
the Saint Lawrence Seaway Development Corporation (hereinafter 
referred to as the 'Corporation').
    ``(b) The Secretary of Transportation may delegate his or her 
authority to the Administrator as the Secretary deems appropriate or 
as directed by law.''

    Thus the Secretary's ability to intervene would continue. If the 
legislation is enacted, the manner in which the Secretary's oversight 
of Great Lakes pilotage would be carried out would be set forth in a 
document to be published in the Federal Register.
    In a ``voice mail'' communication from counsel for the SLSPA to an 
OST staff attorney, an additional argument against the transfer was 
posed. A memorandum concerning this communication has been entered into 
the docket. SLSPA's counsel points out that the Great Lakes Pilotage 
Act is set forth in section 46 of the United States Code (U.S.C.), 
which contains the following definition at 46 U.S.C. 2101:

    (34) ``Secretary'', except in part H, means the head of the 
department in which the Coast Guard is operating.

    Since Great Lakes Pilotage is contained in Part F, this definition 
of ``Secretary'' pertains to it. The SLSPA maintains that whatever 
Congress intended to reside within the Coast Guard is contained within 
Title 46 under this definition and that, therefore, this transfer to 
the SLSDC would be in contravention of Congressional intent.
    Three Members of Congress submitted to the Secretary the House 
Report for the legislation that defines ``Secretary.'' The report 
states: `` `Section 2101(34) defines `Secretary' so that maritime 
safety and seamen's welfare jurisdiction remains within the Coast Guard 
at all times.'' They also refer to 46 U.S.C. 2104(a), which states that 
``[t]he Secretary may delegate the duties and powers conferred by this 
subtitle [which includes Great Lakes pilotage] to any officer, 
employer, or member of the Coast Guard * * *.'' The Congressmen 
conclude that the House Report and the statutory section concerning 
delegation ``appear to confirm Congress's determination that [Great 
Lakes pilotage functions] reside with the Coast Guard.''
    The definition of ``Secretary,'' which is clear on its face, does 
not change with the transfer of pilotage authority to the SLSDC. The 
Secretary of Transportation is still the head of the Department in 
which the Coast Guard is operating. Upon declaration of war or when the 
President directs, the Coast Guard would operate in the Navy (14 U.S.C. 
3). In that event, the Secretary of Defense would be the head of the 
Department in which the Coast Guard is operating. (N.B.: even during 
the Vietnam War and the Persian Gulf War, the Coast Guard remained part 
of the Department of Transportation.) The House Report explanation is 
not the statutory definition. Even if it were the statutory definition, 
it says that maritime safety is to remain in the Coast Guard at all 
times. While many of the 11 functions to be transferred have safety 
ramifications, they are still essentially economic. The House Report 
language did not address where functions should reside that fall 
outside the parameters of maritime safety and seamen's welfare 
jurisdiction.
    That Congress did not intend that all statutory authority that 
comes under the above-cited definition of Secretary reside in the Coast 
Guard is demonstrated by the Port and Tanker Safety Act of 1978. That 
Act contains the following definition at 33 U.S.C. 1222:

    (2) ``Secretary'' means the Secretary of the department in which 
the Coast Guard is operating.

    Nevertheless, that Act also states that certain authority granted 
to the Secretary shall not be delegated to any agency other than the 
Saint Lawrence Seaway Development Corporation (33 USC 1229). Thus, 
Congress envisioned a situation in which authority residing within the 
``Department in which the Coast Guard is operating'' not only could be 
delegated to an agency within the Department of Transportation that was 
not the Coast Guard, but must not be delegated to the Coast Guard. 
Moreover, by this language, Congress has also demonstrated that, when 
it intends for authority to remain within one agency and not be 
delegated elsewhere, it will so state.
    Furthermore, had Congress desired that the Great Lakes pilotage 
function remain solely within the Coast Guard, it could have given the 
authority directly to the Commandant instead of the Secretary. By 
contrast, in other circumstances, Congress has given authority, not 
first to the Secretary to be delegated, but directly to the Federal 
Aviation Administrator and to the Federal Highway Administrator. For 
example, the Intermodal Surface Transportation Efficiency Act of 1991 

[[Page 63449]]
(section 6016) directs the Federal Highway Administrator to conduct 
certain studies, while legislation concerning nationality and ownership 
of aircraft as well as safety regulation of civil aeronautics gives 
authority to the Federal Aviation Administrator (49 U.S.C. 44101 et 
seq.; 49 U.S.C. 44701 through 44717, 44720 through 44722). (N.B.: 
Within the safety regulation chapter, three sections, 49 U.S.C. 44718, 
44719, and 44723, set forth requirements for the Secretary.)
    Moreover, the Department of Transportation Act (Public Law 89-670, 
1966) (DOT Act), which created the Department, specifically authorized 
the Federal Railroad Administrator and the Federal Highway 
Administrator to carry out certain functions, powers, and duties of the 
Secretary (section 6(f) (3)(A) and (3)(B)). Unlike 46 U.S.C. 2104(a), 
which states that the Secretary ``may'' delegate duties and powers to 
any officer, employee, or member of the Coast Guard, the DOT Act stated 
that the Federal Railroad and Highway Administrators ``shall'' carry 
out the functions, duties, and powers of the Secretary. In addition, 
the DOT Act did not authorize the Commandant of the Coast Guard to 
carry out the functions, powers, and duties of the Secretary regarding 
Great Lakes pilotage. On the contrary, the DOT Act, which transferred 
the Coast Guard to the Department, also transferred to, and vested in 
the Secretary, the functions, powers, and duties relating to the Coast 
Guard (section 6(b)(1)).
    In a formal comment to the docket, the SLSPA also argued that the 
interim final rule violated the notice and comment requirements of the 
APA. It asserted that the statutory exemption from the notice and 
comment requirements does not extend to ``any action which goes beyond 
formality and substantially affects the rights of those over whom the 
agency exercises authority.'' [citation omitted.] The SLSPA concluded 
that since this rule affects timeliness and, therefore, substantially 
affects the rights of pilots, the exemption does not apply. It pointed 
to the timely adjustments to pilotage rates as demonstrating the effect 
of the rule on the rights of pilots. It contended that the Department 
failed to provide a concise general statement of its basis and purpose, 
as required by the APA, and that no explanation was offered for 
overturning a regulation that ``has been in place since DOT was 
established in 1967.''
    The Department disagrees. If the Department were to accept SLSPA's 
argument that, since the rule affects timeliness and, therefore, 
substantially affects the rights of pilots, all delegations of 
authority would have to be published for notice and comment. One of the 
paramount reasons for delegations is to reduce delays by eliminating 
needless work at the top levels. All delegations, therefore, can affect 
timeliness. Moreover, requesting public comment on delegations of 
authority is not required by the APA. 5 U.S.C. 553(b)(3)(A) states that 
the notice and comment requirements of the APA do not apply to rules of 
agency organization, procedure, or practice.
    The Department, therefore, disagrees with SLSPA's contention that 
notice and comment are required for this delegation. In its discretion, 
however, the Department did offer a 60-day comment period; it even 
suspended the effectiveness of the interim final rule to allow the 
Department additional time to consider all the issues raised in the 
comments.
    The Department disagrees with the SLSPA's APA argument that the 
Department did not provide a concise general statement of its basis and 
purpose and did not offer an explanation for overturning a regulation 
that had been in place since the Department was established. Putting 
aside the question of whether a concise general statement is even 
required, the Department provided one. The interim final rule stated 
that the transfer of responsibilities from the Coast Guard to the SLSDC 
``will place pilotage under permanent civilian authority, and placing 
pilotage in a smaller organization with an established presence on the 
Great Lakes will give pilotage issues greater visibility and more 
timely attention. In addition, SLSDC is being given authority to 
negotiate directly with Canada, which will allow timely adjustments to 
pilotage rates.'' This statement contains the Department's basis and 
purpose for the change. A small SLSDC, when compared with the Coast 
Guard in general or even the NMC within the Coast Guard, will be able 
to give more timely attention to pilotage issues and make more timely 
rate adjustments.
    Many commenters opposed to the transfer claimed that they were 
given no opportunity to have input into the process and therefore the 
interim final rule is invalid. The Department disagrees. As we have 
demonstrated earlier, a comment period is not required by the APA. 
Nevertheless, because of public and Congressional interest in Great 
Lakes pilotage, the Department took the extraordinary step of providing 
an opportunity for public comment on this rule and provided 60 days for 
the receipt of public comment. In accordance with its published 
procedures, the Department even accepted comments after the 60 days had 
elapsed. The Department, thus, has provided ample opportunity for 
public input and has thoroughly considered that input before issuing 
this rule.
    Several commenters, however, requested that the Department hold a 
public hearing. Even with respect to rulemakings for which notice and 
comment are required, which this rulemaking is not, the APA gives the 
agency discretion to hold a public hearing or not. ``[T]he agency shall 
give interested persons an opportunity to participate in the rulemaking 
. . . with or without the opportunity for oral presentation.'' (5 
U.S.C. 553(c).). By allowing interested persons to submit written 
views, the Department has provided the public with a greater 
opportunity to participate in a rule of agency organization, procedure, 
or practice than the APA requires. Moreover, in addition to providing 
the 60-day comment period, representatives from the Great Lakes 
Pilotage Staff and the SLSDC participated in a February 9, 1995, 
meeting in Chicago, organized by the Great Lakes Shipping Association, 
which represents vessel owners engaged in the international Great Lakes 
trades. Also in attendance were representatives from the three Great 
Lakes pilot associations and a large number of other industry 
representatives. At that meeting, the Staff and SLSDC representatives 
responded to questions from pilots and others for several hours 
concerning the possibility of a transfer.
    In addition, during the winter of 1994-95, the Staff also met with 
the three pilot associations and presented to each of them a draft of 
the ``St. Lawrence Seaway Development Corporation Pilotage Concept,'' 
which included the SLSDC's 1995 plan. The plan comprised the SLSDC's 5-
year performance goals, its 3-to-5-year business focus, and its 5-to-
15-year strategic goals. The document emphasized the importance of the 
pilotage program and the SLSDC's role in the program, when it said, 
``[t]he mission of the Great Lakes Pilotage Program is to protect the 
public, the environment, and the economic interests of foreign trade 
shippers by assuring that their vessels are safely navigated by 
competent and qualified U.S. registered pilots.'' Although the Staff 
orally requested that the associations provide reaction to this 
document, none was forthcoming.
    In light of the many opportunities that the pilots have had to 
voice their opinions about the transfer and the exhaustive public 
record before the 

[[Page 63450]]
Department, the Department concludes that holding a public hearing 
would not result in the presentation of additional or different 
information from what has already been submitted.
    The Department stated in the interim final rule that it would 
consider any new matters presented and make changes if warranted. The 
Department has carefully considered all comments presented and 
concludes that no revisions to the interim final rule are warranted. 
Accordingly, the Department affirms, without change, the interim final 
rule.
    A final rule redesignating those portions of the Coast Guard's 
Great Lakes Pilotage Regulations that are necessary for SLSDC to carry 
out its responsibilities under the Act will be published in the Federal 
Register shortly.

List of Subjects in 49 CFR Part 1

    Authority delegations (Government agencies), Organizations and 
functions (Government agencies).

    Accordingly, 49 CFR part 1 is amended as follows:

PART 1--[AMENDED]

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

    Authority: 49 U.S.C. 322; Pub. L. 101-552, 28 U.S.C. 2672, 31 
U.S.C. 3711(a)(2).


Sec. 1.46  [Removed]

    2. Section 1.46(a) is removed and reserved.
    3. Section 1.52 is amended by adding a new paragraphs (d) and (e) 
to read as follows:


Sec. 1.52  Delegations to Saint Lawrence Seaway Development Corporation 
Administrator.

* * * * *
    (d) Carry out the Great Lakes Pilotage Act of 1960, as amended, (46 
U.S.C. 9301 et seq.).
    (e) Under the 1977 Memorandum of Arrangements with Canada and the 
Great Lakes Pilotage Act of 1960, as amended in 1983 (46 U.S.C. 9305), 
enter into, revise, or amend arrangements with Canada in coordination 
with the General Counsel.

    Issued at Washington, DC, this 5th day of December 1995.
Federico Pena,
Secretary of Transportation.
[FR Doc. 95-30081 Filed 12-8-95; 8:45 am]
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