[Federal Register Volume 65, Number 178 (Wednesday, September 13, 2000)]
[Proposed Rules]
[Pages 55206-55212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23498]


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DEPARTMENT OF TRANSPORTATION

Coast Guard

46 CFR Part 401

[USCG-1999-6098]
RIN 2115-AF91


Great Lakes Pilotage Rates

AGENCY: Coast Guard, DOT.

ACTION: Supplemental notice of proposed rulemaking and notice of public 
meeting.

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SUMMARY: The Coast Guard amends the Notice of Proposed Rulemaking 
(NPRM) published on April 14, 2000. We are proposing changes in the 
rates currently charged for pilotage on the Great Lakes by increasing 
pilotage rates in Area 1 by 4%; decreasing rates in Area 2 by 3%; 
decreasing rates in Area 4 by 2%; decreasing rates in Area 5 by 6%; 
leaving rates unchanged in Area 6; increasing rates in Area 7 by 9%; 
decreasing rates in Area 8 by 4%; and decreasing mutual rates by 1%. 
The average change in rates for District 1 was an increase of 2%, for 
District 2 an average decrease of 4%, and rates remained unchanged in 
District 3. This equates to an average decrease of 1% across all 
Districts.
    In response to comments received on the Notice of Proposed 
Rulemaking (NPRM) published in the Federal Register (65 FR 20110) on 
April 14, 2000 and changes made to the NPRM, the Coast Guard is 
publishing a Supplemental Notice of Proposed Rulemaking (SNPRM) 
allowing all interested parties an additional 60 days to comment.
    The pilotage rate adjustments proposed in this SNPRM are different 
from the rates proposed in the NPRM, because adjustments have been made 
based on comments received in response to the NPRM. These adjustments 
are discussed in the section of this SNPRM entitled ``Discussion of 
Comments and Changes.''

DATES: Comments and related material must reach the Docket Management 
Facility on or before November 13, 2000.

ADDRESSES: To make sure your comments and related material are not 
entered more than once in the docket, please submit them by only one of 
the following means:
    (1) By mail to the Docket Management Facility (USCG-1999-6098), 
U.S. Department of Transportation, room PL-401, 400 Seventh Street SW., 
Washington, DC 20590-0001.
    (2) By delivery to room PL-401 on the Plaza level of the Nassif 
Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-366-9329.
    (3) By fax to the Docket Management Facility at 202-493-2251.
    (4) Electronically through the Web Site for the Docket Management 
System at http://dms.dot.gov.
    The Docket Management Facility maintains the public docket for this 
SNPRM. Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
will become part of this docket and will be available for inspection or 
copying at room PL-401 on the Plaza level of the Nassif Building, 400 
Seventh Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays. You may also

[[Page 55207]]

find this docket on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For questions on this SNPRM, call Mr. 
Tom Lawler, Chief Economist, Office of Great Lakes Pilotage, Commandant 
(G-MW-1), U.S. Coast Guard, at 202-267-1241, or by facsimile 202-267-
4700. For questions on viewing or submitting material to the docket, 
call Dorothy Beard, Chief, Dockets, Department of Transportation, 
telephone 202-366-9329.

SUPPLEMENTARY INFORMATION:

Request for Comments

    We encourage you to participate in this rulemaking by submitting 
comments and related material. If you do so, please include your name 
and address, identify the docket number for this rulemaking (USCG-1999-
6098), indicate the specific section of this document to which each 
comment applies, and give the reason for each comment. You may submit 
your comments and material by mail, hand delivery, fax, or electronic 
means 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 hand delivery, submit them in an unbound format, 
no larger than 8\1/2\ by 11 inches, suitable for copying and electronic 
filing. If you submit them by mail and would like to know 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 SNPRM in view of them.

Public Meeting

    We plan to hold a public meeting to allow for additional comments 
on the SNPRM for Great Lakes Pilotage Rates. The scope of the meeting 
is limited only to matters addressed in the SNPRM.
    Date: The public meeting will be held Thursday, October 12, 2000, 
at 10:30 am and will continue until all business is complete.
    Address: The public meeting will be held in room 2415, U.S. Coast 
Guard Headquarters, 2100 Second Street, SW, Washington, DC.
    At that time, public comments regarding this rulemaking will be 
heard. In addition, the annual Public Meeting on Great Lakes Pilotage 
is scheduled for January 2001, where we will discuss the Ratemaking 
Methodology and the 1999 Rate Review.

Information on Services for Individuals with Disabilities

    For information on facilities or services for people with 
disabilities, or to request special assistance at the meeting Contact 
Tom Lawler, Chief Economist, Great Lakes Pilotage (G-MW-1), U.S. Coast 
Guard, at 202-267-1241, or by facsimile 202-267-4700 as soon as 
possible.

Regulatory History

    On May 9, 1996, the Department of Transportation published a final 
rule in the Federal Register (61 FR 21081). The rule explained the 
methodology used to set the rates for pilots working in the Great 
Lakes.
    On April 14,2000, the Coast Guard published a Notice of Proposed 
Rulemaking in the Federal Register (65 FR 20110). The NPRM announced 
the results of the 1999 Rate Review and requested comments.
    The Coast Guard is required by 46 CFR 404.1 (b) to conduct an 
annual review of rates for pilotage in the Great Lakes. This SNPRM 
discusses the results of the 1999 Rate Review.

Discussion of Comments and Changes

    In response to the requests for comments on the 1999 Rate Review, a 
total of eight written comment letters were received. Four of the 
comment letters were from the District Pilots' Associations, one from 
the District 2 Pilots' Association accounting firm, one from the 
American Pilot Association, one from the Grand Lodge International Ship 
Masters' Association, and one from the Atlantic Coast District Council 
of the International Longshoremen's Association. All of the commenters 
addressed issues that pertained to the 1999 Rate Review, while some 
went beyond the scope of the solicitation regarding the methodology 
used to determine pilotage rates. The discussion of comments contained 
herein addresses only issues raised in the 1999 Rate Review.
    Four commenters, the District 1 and 2 Pilots' Associations, the 
American Pilots' Association, and the Grand Lodge International Ship 
Masters' Association, requested a Public Meeting to discuss the 
Ratemaking Methodology. The Ratemaking Methodology and the 1999 Rate 
Review are agenda items for the annual Public Meeting on Great Lakes 
Pilotage scheduled for January 2001. The October Public Meeting will 
only discuss the proposed changes to the current rates charged for 
pilotage on the Great Lakes.
    Five commenters, each of the three District Pilots' Associations, 
District 2's accounting firm, and the Grand Lodge International Ship 
Masters' Association, disagreed with the Coast Guard's decision to 
disallow legal expenses not directly related to the provision of 
pilotage services. In September 1999, the Director requested each of 
the District Pilots' Associations to justify their legal expenses, in 
that they directly pertained to and were necessary for the provision of 
pilotage services. District 1 provided justification for $1,244. 
Districts 2 and 3 did not provide any justification. Furthermore, a 
review of reports filed with the office of the Clerk of the House of 
Representatives in compliance with the Lobbying Disclosure Act of 1995 
reveals that in 1997, the District 1 and District 3 Pilots' 
Associations paid $40,000 and $80,000 respectively in lobbying fees. 
Lobbying fees are specifically excluded as a recognized expense in 
accordance with 46 CFR Sec. 404.5. Additionally, it has been determined 
that $16,510 of professional fees reported by District 3 were not 
related to legal expenses and have been reinstated in District 3's 
expense base.
    Three commenters, the District 2 Pilots' Association, their 
accounting firm, and the Atlantic Coast District of the International 
Longshoremen's Association, disagreed on the disallowance of pilot 
training expenses in District 2. In summary, they stated that because 
these expenses were recognized in the past, they should not be 
disallowed. They claimed that until a pilot is registered, he is, in 
fact, being trained and during this time, the Pilot Association 
compensates temporarily registered pilots. The approval of these 
expenses in the 1998 Rate Review was an oversight on the part of the 
Coast Guard and they should not have been approved. This is due to the 
fact that these expenses were not for instructional courses or 
material, which would have been approved, but actually represented 
compensation or salary paid directly to temporarily registered pilots 
in District 2. Compensation for temporarily registered pilots is fully 
accounted for in the Ratemaking Methodology, as explained in Appendix A 
to 46 CFR Part 404. Utilizing this methodology to determine pilotage 
rates in District 2: the total projected number of pilots required in 
District 2, both fully registered and temporarily registered, is 
multiplied by the individual target pilot compensation for that 
particular year. This results in the total target pilot compensation 
required for District 2. Total target pilot compensation is then added 
to a projection of total operating expenses

[[Page 55208]]

based on projected bridge hours to provide a projection of total 
expenses for the District (Total Target Pilot Compensation + Projected 
Operating Expenses). This total is then compared to revenue projections 
based on projected bridge hours for the District to determine if the 
pilotage rates should be increased or decreased. Accounting for 
temporarily registered pilot compensation as a training expense 
inflates the District's expense base in that total pilot compensation 
is accounted for separately and then combined with operating expenses. 
This is evident in the fact that in 1998, pilots in District 2 exceeded 
their compensation targets by 16%.
    Seven commenters, the three pilotage Districts or their respective 
representatives, the accounting firm for District 2, the American 
Pilots' Association, the Atlantic Coast District of the International 
Longshoremen's Association, and the Grand Lodge International Ship 
Masters' Association, all disagreed with the use of 1997 expense data 
and 1998 revenues to determine a pilotage rate for 1999. The lobbying 
firm representing District 1 further questioned the procedure because 
of its belief that 1998 expense data had been available to the Coast 
Guard for well over a year.
    The preliminary fieldwork for the Director's 1998 audit of the 
Great Lakes Pilotage Districts was completed in mid October 1999. The 
preliminary draft of the final report was delivered to the Coast Guard 
mid December 1999. The 1999 Rate Review was finalized in August of 1999 
and routed for review and clearance within the Coast Guard in mid 
September 1999. The 1999 Rate Review followed the methodology 
prescribed in Appendix A to 46 CFR Part 404. 1997 expenses for each of 
the pilotage Districts were projected forward to 1999 based on the 
actual change in traffic from 1997 to 1998 and the projected change in 
bridge hours or traffic for 1999, based on economic surveys. Economic 
surveys from industry and the St. Lawrence Seaway Development 
Corporation indicated that 1999 would experience an overall 5% 
reduction in bridge hours and traffic from 1998 levels. In 1998, the 
actual bridge hour data and revenues for 1998 in each of the pilotage 
areas became available to the Coast Guard in May 1999, through the 
submission of unqualified audited 1998 financial data by each of the 
District's Pilot associations, as required by 46 CFR Sec. 403.300. A 
review of the financial data indicated that on average, revenues and 
bridge hours throughout the Great Lakes increased 30% in 1998 over 1997 
levels. The actual 1998 observed increase for each District was then 
combined with the projected 5% decrease in traffic for 1999 to 
establish an overall change in traffic from 1997 to 1999. For example, 
in 1998, District 1 experienced an average 36% increase in bridge hours 
over 1997. Considering the projected 5% reduction in 1999 from 1998 
levels, this resulted in an overall projected increase of 31% in 1999 
over 1997 levels (36%-5% = 31%) for District 1. For the 1999 
rulemaking, each District's approved 1997 expenses were adjusted for 
inflation (Approved Expenses x (1+Inflation Factor)) multiplied by the 
aggregate percentage change of traffic projected for each District over 
1997 levels. We then factored in the percentage of Association expenses 
that change in relation to a change in traffic (pilotage hours). 
Analysis indicates that 57% of Association expenses are affected by a 
change in pilotage hours. For example, in District 1, pilotage hours 
for 1999 are projected to increase 31% over 1997 levels, which is 
multiplied by 57% (.31  x  .57 = .18) to project that District 1's 
operating expenses should increase 18% in response to the projected 
increase in pilotage hours for 1999 from 1997 levels. Therefore, the 
following formula was utilized to project 1999 expenses ((Approved 1997 
expenses  x  (1+Inflation Factor)  x  (1+(.31 x 57)). In the case of 
District 1, in order to incorporate approved transportation and 
training costs into the rate, an additional $86,000 was added to 
District 1's expense base for the 1999 ratemaking.
    Two Commenters, the District 2 Pilots' Association and their 
accounting firm, requested an explanation of why and how their pilot 
boat expenses were reduced for the 1999 Rate Review. 46 CFR Part 
Sec. 404.5 establishes the guidelines for the Director of Great Lakes 
Pilotage in determining whether expenses will be recognized in the 
ratemaking process. It specifies that each expense item be evaluated to 
determine whether it is necessary for the provision of pilotage service 
and if so, whether it is reasonable, that is, is it comparable or 
similar to the expenses paid by others in the maritime industry for the 
same service or item. Pilot boat expenses in District 2 average $176 
per trip, whereas in District 1, they average $110 and in District 3 
they average $83 per trip. District 3 contracts all pilot boat services 
while Districts 1 and 2 utilize affiliated companies owned totally or 
partially by registered pilots, to provide pilot boat services. These 
affiliated companies reported a net income of $4,520 in District 1 and 
$70,506 in District 2, in 1997. In District 2 Erie Leasing's net income 
of $70,506 represents a 19% return on total equipment and property less 
land of $372,270. To bring pilot boat expenses in line with Districts 1 
and 3, the Director is reducing District 2's expense base by $45,602. 
This deduction is intended to offset Erie Leasing's net income of 
$70,506 from operations. This, in effect, reduces Erie Leasing's net 
income to $24,904, which represents a 6.69% return on Erie Leasing's 
property and equipment. When this offset is applied against the 1997 
pilot boat expenses, it reduces the pilot boat cost in District 2 to 
$154 per trip.
    Two commenters, the District 1 Pilots' Association and District 2's 
accounting firm, disagreed with the results of the computation that 
determined the number of pilots required for their respective 
Districts. In District 1 they disagreed with the number of pilots 
required in Area 2, Lake Ontario. 46 CFR Part 404 clearly establishes 
the methodology in determining the number of pilots required for each 
area: ``The basis for the number of pilots needed in each area of 
undesignated water is established by dividing the projected bridge 
hours by 1800. In 1998, District 1 Lake Pilots recorded a total of 
6,335 bridge hours on the undesignated waters of Lake Ontario. The 1999 
Rate Review projected a 5% decrease resulting in a projection of 6,018 
bridge hours for 1999. The number of pilots required is then determined 
by dividing 6,018 by 1800; the result is 3.34, which for the purposes 
of the 1999 Rate Review, was rounded up to 4 pilots. District 2's 
accounting firm disagreed with the standard of 1800 hours used to 
determine the number of pilots in undesignated waters, and included 
delay, detention and pilot travel hours together with bridge hours to 
calculate the number of pilots required in District 2. Again 46 CFR 
Part 404 established 1800 bridge hours (detention, delay, and travel 
hours are not included) as the work standard used to determine the 
number of pilots required on undesignated waters.
    One commenter, the District 2 Pilots' Association, questioned the 
deduction of $3,328 in ``combined expenses.'' As explained in note 3 of 
the 1997 Director's audit, of $3,328 incurred legal expenses, one half, 
$1,664, was deducted because expenses relating to lobbying are not 
allowed for ratemaking purposes, 46 CFR, Part 404, Sec. 404.5.
    Two commenters, the District 2 Pilots' Association and District's 2 
accounting firm, disagreed with the deduction of daily subsistence 
amounts that did not conform to IRS guidelines. 46 CFR

[[Page 55209]]

Sec. 404.5 establishes IRS guidelines (IRS publication 17 ``Your 
Federal Income Tax'') as one of the tests used to determine the 
reasonableness of an expense. A copy of IRS publication 17 can be 
obtained by contacting the IRS at 1-800-829-1040, or by visiting their 
Web Site at www.IRS.gov or www.IRS.ustreas.gov.
    One commenter, District 2, requested a copy of the 1997 audit. A 
copy of the 1997 Director's Audit was mailed to District 2 in June 
1999. A copy of the Director's audit is also included as part of the 
docket supporting this rulemaking (USCG-1999-6098).
    One commenter, District 2's accounting firm, disagreed with the 
independent auditor's reduction from the expense base of $947 for 
business promotion, $400 in contributions, and $1,988 as uniforms 
expense. These deductions are justified because these expenses are not 
directly related to the provision of pilotage (46 CFR Sec. 404.5).
    One commenter, District 2's accounting firm, disagreed with the 
independent auditor's reduction of $4,800 a year in total rental 
expenses for a six bedroom house, rented to the Pilots' Association by 
Erie Leasing, an affiliated company. The house is used as temporary 
accommodations in Port Colborn. The auditor's adjustment is based on 
the fact that similar accommodations in the area rent an average $400 a 
month less than the Association pays on a monthly basis.
    One commenter, the District 2 Pilots' Association, disagreed with 
the independent auditor's reduction of a portion of the expenses 
related to Association dues paid to the American Pilots' Association. 
This deduction is justified because the reduction consists of dues 
associated with lobbying. Expenses related to lobbying are not 
recognized for ratemaking purposes (46 CFR Sec. 404.5).
    One commenter, the representative for the District 1 Pilots' 
Association, disagreed with the proposed amount of $45,000 budgeted for 
car service and recommended $56,000. The recommendation is valid and 
District 1's expense base is adjusted accordingly to reflect an 
expected car service expense of $56,000.
    One commenter, the representative for the District 1 Pilots' 
Association, disagreed with the projected 2.8% decrease in operating 
expenses for the 1999 navigational season in Area 2, considering the 
23% increase in bridge hours experienced from 1997 to 1998. This 2.8% 
decrease is consistent with the data, because the number of pilots 
authorized in Area 2 in 1997 was in excess of what was required to 
operate efficiently in the area. In both 1997 and 1998, five pilots 
were authorized in Area 2. In 1997 and 1998, the actual bridge hours 
worked in Area 2 were 4,580 and 6,335 hours respectively. The 
methodology for determining the number of pilots required, as explained 
in 46 CFR Part 404, results in a requirement of 2.6 or 3 pilots in 
1997, and 3.5 or 4 pilots in 1998. Based on bridge hour projections for 
1999, the 1999 Rate Review calculated that four pilots are required in 
Area 2. This equates to a reduction of approximately $103,644 in pilot 
compensation, thus a reduction in expenses or total revenue required 
for Area 2.
    Two commenters, the District 2 Pilots' Association accounting firm 
and the District 3 Pilots' Association, disagreed with the use of the 
2.1% inflation factor used in the calculations for the 1999 Rate 
Review, as the figure failed to account for inflation experienced 
during the 1999 navigational season. Upon further review, the Coast 
Guard agrees with the commenter and has adjusted the expense base of 
each of the Pilotage Districts to reflect the change in the Consumer 
Price Index from the close of the 1997 season to December 1999. This 
equates to a 3.1% inflation factor.
    Two commenters, the District 2 and District 3 Pilots' Associations, 
disagreed with the Coast Guard's calculation of Investment Base for 
Return on Investment purposes, stating that it should take into account 
all assets employed in support of pilotage operations. One commenter 
stated the rate of return should be annualized, since the rates were 
last adjusted in 1997. In calculating the rate of return the Coast 
Guard only considers property and equipment, because cash assets held 
on deposit earn interest. Inclusion of cash assets would encourage 
Pilot Associations to unnecessarily inflate their Investment Base and 
provide an additional source of return not available to other private 
businesses. Analysis of pilot associations' Investment Base indicated 
that since the concept of Return on Investment was introduced into the 
ratemaking methodology, Districts 2 and 3 greatly increased their 
Investment Base. In District 2, the Investment Base rose from $265,488 
in 1995 to $413,998 in 1996, of which only $116,041 was property and 
equipment. In District 3, the Investment Base soared from $119,823 in 
1995 to $994,896 in 1996, and only $25,583 was property and equipment. 
The Coast Guard factored Return on Investment (ROI) into each of its 
Rate Reviews since the rates were last set in 1997. The 1998 Review 
considered the appropriate ROI and calculated that rates should be 
lowered an average of 3%. The 1999 Rate Review utilized a 6.69% ROI to 
determine rates. However, in view of the fact that the 1999 rates will 
apply for a portion of the 2000 navigational season, the ROI for the 
1999 Rate Review has been adjusted to reflect the 1999 average return 
on high grade corporate bonds of 7.04%. The expense base for each 
District will be adjusted accordingly for the purposes of this SNPRM.
    One commenter, the District 2 accounting firm, commented on the 
fact that the Coast Guard did not reply to their comments on the 1998 
Rate Review. Responses to all comments received on the 1998 Rate Review 
were drafted. They were not published because the Coast Guard 
determined that the 1997 rates fell within an acceptable range and 
decided not to change the rates, even though the 1998 Rate Review 
called for an average reduction in rates of 3%.

Summary of Proposed Changes

    The changes discussed above are summarized in Tables A, B, and C 
below.

                          Table A.--District 1
------------------------------------------------------------------------
                                    Area 1 St.
           Methodology               Lawrence   Area 2 Lake     Total
                                      River       Ontario     District 1
------------------------------------------------------------------------
Step 1, Projection of operating       $296,527     $252,597     $549,123
 expenses........................
Step 2, Projection of target         1,088,262      414,576    1,502,838
 pilot compensation..............
Step 3, Projection of revenue....    1,333,991      687,207    2,021,198
Step 4, Calculation of investment            0            0            0
 base............................
Step 5, Determination of target          7.04%        7.04%        7.04%
 return on investment............
Step 6, Adjustment determination.    1,384,789      667,173    2,051,961

[[Page 55210]]

 
Step 7, Adjustment of pilotage            1.04          .97         1.02
 rates...........................
------------------------------------------------------------------------


                          Table B.--District 2
------------------------------------------------------------------------
                                                   Area 5
                                                 South East
           Methodology             Area 4 Lake    Shoal to      Total
                                       Erie      Port Huron   District 2
                                                  Michigan
------------------------------------------------------------------------
Step 1, Projection of operating       $612,603     $521,847   $1,134,451
 expenses........................
Step 2, Projection of target           518,220    1,243,728    1,761,948
 pilot compensation..............
Step 3, Projection of revenue....    1,156,057    1,886,198    3,042,255
Step 4, Calculation of investment       45,397       71,006      116,403
 base............................
Step 5, Determination of target          7.04%        7.04%        7.04%
 return on investment............
Step 6, Adjustment determination.    1,134,019    1,770,574    2,904,593
Step 7, Adjustment of pilotage             .98          .94          .96
 rates...........................
------------------------------------------------------------------------


                                              Table C.--District 3
----------------------------------------------------------------------------------------------------------------
                                                                 Area 6
                                                              Lakes Huron   Area 7 St.  Area 8 Lake     Total
                         Methodology                              and         Mary's      Superior    District 3
                                                                Michigan      River
----------------------------------------------------------------------------------------------------------------
Step 1, Projection of operating expenses....................     $663,265     $131,402     $456,777   $1,251,445
Step 2, Projection of target pilot compensation.............    1,140,084      621,864      829,152    2,591,100
Step 3, Projection of revenue...............................    1,797,967      688,583    1,338,912    3,825,462
Step 4, Calculation of investment base......................       11,997        4,595        8,934       25,526
Step 5, Determination of target return on investment........        7.04%        7.04%        7.04%        7.04%
Step 6, Adjustment determination............................    1,808,194      753,589    1,286,558    3,816,392
Step 7, Adjustment of pilotage rate.........................         1.00         1.09          .96         1.00
----------------------------------------------------------------------------------------------------------------

    As summarized in tables A, B, and C above, the Coast Guard proposes 
changes to the pilotage rates found in 46 CFR Secs. 404.405-410 by 
increasing pilotage rates in Area 1 by 4%, decreasing rates in Area 2 
by 3%, decreasing rates in Area 4 by 2%, decreasing rates in Area 5 by 
6%, leaving rates unchanged in Area 6, increasing rates in Area 7 by 
9%, decreasing rates in Area 8 by 4% and decreasing mutual rates by 1%.

Regulatory Evaluation

    This SNPRM is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866 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. 
It is not ``significant'' under the regulatory policies and procedures 
of the Department of Transportation (DOT) (44 FR 11040, February 26, 
1979).
    We expect the economic impact of this SNPRM to be so minimal that a 
full Regulatory Evaluation under paragraph 10e of the regulatory 
policies and procedures of DOT is unnecessary. This proposed rule would 
make minimal adjustments to the pilotage rates for the Great Lakes 2000 
shipping season. The Coast Guard used the ratemaking methodology found 
in 46 CFR part 404, Appendix A, to identify adjustments necessary to 
achieve target pilot compensation, by establishing these new rates for 
pilotage. This ratemaking methodology is designed to annually review 
pilotage rates in order to avoid large fluctuations in pilot 
compensation, thus avoiding large changes in pilotage rates. This SNPRM 
provides a step-by-step economic guide to show how the pilotage rates 
would be changed. The results of this rulemaking are in keeping with 
the Coast Guard's desire for a safe, reliable and efficient pilotage 
system.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we 
considered whether this SNPRM would have 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.
    For the Great Lakes region, small entities potentially impacted by 
this proposed rulemaking include shippers, Great Lakes ports, carriers, 
and shipping agents. The proposed decreases in Great Lakes pilotage 
rates are not expected to significantly impact small businesses because 
this rulemaking actually reduces the financial burden on small entities 
and on the general public.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that 
this SNPRM would not have a significant economic impact on a 
substantial number of small entities. If you think that your business, 
organization, or governmental jurisdiction qualifies as a small entity 
and that this rule would have a significant economic impact on it, 
please submit a comment to the Docket Management Facility at the 
address under ADDRESSES. In your comment, explain why you think it 
qualifies and how and to what degree this rule would economically 
affect it.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement

[[Page 55211]]

Fairness Act of 1996 (Pub. L. 104-121), we want to assist small 
entities in understanding this SNPRM so that they can better evaluate 
its effects on them and participate in the rulemaking. If the rule 
would affect your small business, organization, or governmental 
jurisdiction and you have questions concerning its provisions or 
options for compliance, please consult Tom Lawler, Chief Economist, 
Great Lakes Pilotage (G-MW-1), U.S. Coast Guard, at 202-267-1241, or by 
facsimile 202-267-4700.
    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).

Collection of Information

    This SNPRM would call for no new collection of information under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Federalism

    The Coast Guard has analyzed this SNPRM under the principles and 
criteria in Executive Order 13132 (64 FR 43255; August 10, 1999) and 
has determined that this SNPRM does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment.

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 regulatory 
actions not specifically required by law. 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. Although this SNPRM would not 
result in such expenditure, we do discuss the effects of this rule 
elsewhere in this preamble.

Taking of Private Property

    This SNPRM 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.

Civil Justice Reform

    This SNPRM 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.

Protection of Children

    We have analyzed this SNPRM 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 concern an 
environmental risk to health or risk to safety that may 
disproportionately affect children.

Environment

    We considered the environmental impact of this SNPRM and concluded 
that under figure 2-1, paragraph 34(a), of Commandant Instruction 
M16475.1C; this rule is categorically excluded from further 
environmental documentation. The SNPRM is procedural in nature because 
it deals exclusively with adjusting pilotage rates for the Great Lakes. 
A ``Categorical Exclusion Determination'' is 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 proposes 
amending 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; 49 
CFR 1.45, 1.46 (mmm), 46 CFR 401.105 also issued the authority of 44 
U.S.C. 3507.
    2. In Sec. 401.405, revise tables (a) and (b) to read as follows:


Sec. 401.405  Basic rates and charges on the St. Lawrence River and 
Lake Ontario.

* * * * *
    (a) Area 1 (Designated Waters):

------------------------------------------------------------------------
                  Service                        St. Lawrence River
------------------------------------------------------------------------
1. Basic Pilotage.........................  $8 per Kilometer or $14 per
                                             mile \1\
2. Each Lock Transited....................  178 \1\
3. Harbor Movage..........................  584 \1\
------------------------------------------------------------------------
\1\ The minimum basic rate for assignment of a pilot in the St. Lawrence
  River is $381 and the maximum basic rate for a through trip is $1709.

    (b) Area 2 (Undesignated Waters):

------------------------------------------------------------------------
                         Service                           Lake Ontario
------------------------------------------------------------------------
1. Six Hour Period......................................            $285
2. Docking/Undocking....................................             272
------------------------------------------------------------------------

    3. In Sec. 401.407, revise tables (a) and (b) to read as follows:


Sec. 401.407  Basic rates and charges on Lake Erie and the navigable 
waters from Southeast Shoal to Port Huron, MI.

* * * * *
    (a) Area 4 (Undesignated Waters):

------------------------------------------------------------------------
                                                 Lake Erie
                                                  (East of
                    Service                      Southeast     Buffalo
                                                   Shoal)
------------------------------------------------------------------------
1. Six Hour Period............................         $316         $316
2. Docking/Undocking..........................          243          243
3. Any Point on the Niagara River below the             N/A          620
 Black Rock Lock..............................
------------------------------------------------------------------------

    (b) Area 5 (Designated Waters):

[[Page 55212]]



----------------------------------------------------------------------------------------------------------------
                                                               Toledo or
                                                               any point
                                                                on Lake
                Any point on/in                   Southeast    Erie west     Detroit      Detroit     St. Clair
                                                    Shoal          of         River      Pilot boat     River
                                                               Southeast
                                                                 Shoal
----------------------------------------------------------------------------------------------------------------
1. Toledo or any port on Lake Erie west of              $929         $548        $1205         $929          N/A
 Southeast Shoal...............................
2. Port Huron Change Point.....................       1 1617       1 1873         1215          945          672
3. St. Clair River.............................       1 1617          N/A         1215         1215          548
4. Detroit or Windsor or the Detroit River.....          929         1205          548          N/A         1215
5. Detroit Pilot Boat..........................          672          929          N/A          N/A        1215
----------------------------------------------------------------------------------------------------------------
1 When pilots are not changed at the Detroit Pilot Boat.

    4. In Sec. 401.410, revise tables (b) and (c) to read as follows:


Sec. 401.410  Basic rates and charges on Lake Huron, Michigan and 
Superior and the St. Mary's River.

* * * * *
    (b) Area 7 (Designated Waters):

------------------------------------------------------------------------
               Area                   Detour      Gros cap    Any harbor
------------------------------------------------------------------------
1. Gros Cap......................        $1436          N/A          N/A
2. Algoma Steel Corporation Wharf         1436          541          N/A
 at Sault Ste. Marie, Ontario....
3. Any point in Sault Ste. Marie,         1204          541          N/A
 Ontario, except the Algoma Steel
 Corporation Wharf...............
4. Sault Ste. Marie, Michigan....         1204          541          N/A
5. Harbor Movage.................          N/A          N/A          541
------------------------------------------------------------------------

    (c) Area 8 (Undesignated Waters):

------------------------------------------------------------------------
                         Service                           Lake Superior
------------------------------------------------------------------------
1. Six Hour Period......................................            $251
2. Docking/Undocking....................................             239
------------------------------------------------------------------------

Sec. 401.420  [Amended]

    5. In Sec. 401.420--
    a. In paragraph (a), remove the number ``$51'' and add, in its 
place, the number ``$50''; and remove the number ``$807'' and add, in 
its place, the number ``$799''.
    b. In paragraph (b), remove the number ``$51'' and add, in its 
place, the number ``$50''; and remove the number ``$807'' and add, in 
its place, the number ``$799''.
    c. In paragraph (c)(1), remove the number ``$305'' and add, in its 
place, the number ``$302''; in paragraph (c)(3), remove the number 
``$51'' and add, in its place, the number ``$50'' and also in paragraph 
(c)(3), remove the number ``$807'', and add, in its place, the number 
``$799''.


Sec. 401.428  [Amended]

    6. In Sec. 401.428, remove the number ``$312'' and add, in its 
place, the number ``$309''.

    Dated: September 6, 2000.
R.C. North,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety 
and Environmental Protection.
[FR Doc. 00-23498 Filed 9-12-00; 8:45 am]
BILLING CODE 4910-15-U