[Federal Register Volume 73, Number 56 (Friday, March 21, 2008)]
[Rules and Regulations]
[Pages 15092-15096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-1063]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 401

[USCG-2007-0039]
RIN 1625-AB23


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 [email protected]. 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 8\1/2\ 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

[[Page 15093]]

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 Sec. Sec.  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.

                    Table 1.--2008 Area Rate Changes
------------------------------------------------------------------------
                                                             Then the
                                                            percentage
           If pilotage service is required in:            increases over
                                                            the current
                                                             rate is:
------------------------------------------------------------------------
Area 1 (Designated waters)..............................            7.78
Area 2 (Undesignated waters)............................            8.41
Area 4 (Undesignated waters)............................            8.50
Area 5 (Designated waters)..............................            7.98
Area 6 (Undesignated waters)............................            8.37
Area 7 (Designated waters)..............................            7.83
Area 8 (Undesignated waters)............................            8.31
------------------------------------------------------------------------


[[Page 15094]]

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 [email protected].
    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

[[Page 15095]]

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. Sec.  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.


0
For the reasons discussed in the preamble, the Coast Guard amends 46 
CFR part 401 as follows:

PART 401--GREAT LAKES PILOTAGE REGULATIONS

0
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.


0
2. In Sec.  401.405, revise paragraphs (a) and (b), including the 
footnote to Table (a), 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
------------------------------------------------------------------------
Basic Pilotage.......................  $14 per Kilometer or $25 per
                                        mile.\1\
Each Lock Transited..................  $310.\1\
Harbor Movage........................  $1,016.\1\
------------------------------------------------------------------------
\1\ The minimum basic rate for assignment of a pilot in the St. Lawrence
  River is $678, and the maximum basic rate for a through trip is
  $2,976.

    (b) Area 2 (Undesignated Waters):

------------------------------------------------------------------------
                         Service                           Lake Ontario
------------------------------------------------------------------------
Six-Hour Period.........................................            $517
Docking or Undocking....................................             493
------------------------------------------------------------------------


0
3. In Sec.  401.407 revise paragraphs (a) and (b), including the 
footnote to Table (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)
------------------------------------------------------------------------
Six-Hour Period.........................            $695            $695
Docking or Undocking....................             536             536
Any Point on the Niagara River below the             N/A           1,368
 Black Rock Lock........................
------------------------------------------------------------------------

    (b) Area 5 (Designated Waters):

----------------------------------------------------------------------------------------------------------------
                                                               Toledo or
                                                               any point
                                                                on Lake
               Any point on or in                 Southeast    Erie west     Detroit      Detroit     St. Clair
                                                    Shoal          of         River      Pilot Boat     River
                                                               Southeast
                                                                 Shoal
----------------------------------------------------------------------------------------------------------------
Toledo or any port on Lake Erie west of               $1,835       $1,084       $2,382       $1,835          N/A
 Southeast Shoal...............................
Port Huron Change Point........................    \1\ 3,195        3,702        2,400        1,867        1,327
St. Clair River................................    \1\ 3,195          N/A        2,400        2,400        1,084
Detroit or Windsor or the Detroit River........        1,835        2,382        1,084          N/A        2,400
Detroit Pilot Boat.............................        1,327        1,835          N/A          N/A       2,400
----------------------------------------------------------------------------------------------------------------
\1\ When pilots are not changed at the Detroit Pilot Boat.


0
4. In Sec.  401.410, revise paragraphs (a), (b), and (c) to read as 
follows:


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

* * * * *
    (a) Area 6 (Undesignated Waters):

------------------------------------------------------------------------
                                                            Lakes Huron
                         Service                           and Michigan
------------------------------------------------------------------------
Six-Hour Period.........................................            $519
Docking or Undocking....................................             493
------------------------------------------------------------------------

    (b) Area 7 (Designated Waters):

[[Page 15096]]



----------------------------------------------------------------------------------------------------------------
                              Area                                    De Tour        Gros Cap       Any Harbor
----------------------------------------------------------------------------------------------------------------
Gros Cap........................................................          $1,853             N/A             N/A
Algoma Steel Corporation Wharf at Sault Ste. Marie Ontario......           1,853            $698             N/A
Any point in Sault Ste. Marie, Ontario, except the Algoma Steel            1,553             698             N/A
 Corporation Wharf..............................................
Sault Ste. Marie, MI............................................           1,553             698             N/A
Harbor Movage...................................................             N/A             N/A            $698
----------------------------------------------------------------------------------------------------------------

    (c) Area 8 (Undesignated Waters):

------------------------------------------------------------------------
                         Service                           Lake Superior
------------------------------------------------------------------------
Six-Hour Period.........................................            $503
Docking or Undocking....................................             478
------------------------------------------------------------------------

Sec.  401.420  [Amended]

0
5. In Sec.  401.420--
0
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''.
0
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''.
0
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''.


Sec.  401.428  [Amended]

0
6. In Sec.  401.428, remove the number ``$520'' and add, in its place, 
the number ``$562''.

    Dated: March 18, 2008.
James Watson,
Rear Admiral, U.S. Coast Guard, Acting Assistant Commandant for Marine 
Safety, Security and Stewardship.
[FR Doc. 08-1063 Filed 3-18-08; 4:02 pm]
BILLING CODE 4910-15-P