Rates for Pilotage on the Great Lakes, 53158-53161 [E7-18306]

Download as PDF 53158 Federal Register / Vol. 72, No. 180 / Tuesday, September 18, 2007 / Rules and Regulations L. Executive Order 12988: Civil Justice Reform DEPARTMENT OF HOMELAND SECURITY In issuing this final rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988, entitled Civil Justice Reform (61 FR 4729, February 7, 1996). Coast Guard VII. Congressional Review Act AGENCY: The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This rule is not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). Lists of Subjects in 40 CFR Part 761 Environmental protection, Hazardous substances, Labeling, Polychlorinated biphenyls, Reporting and recordkeeping requirements. Dated: September 10, 2007. James B. Gulliford, Assistant Administrator, Office of Prevention, Pesticides and Toxic Substances. Therefore, 40 CFR chapter I is amended as follows: I PART 761—[AMENDED] 1. The authority citation for part 761 continues to read as follows: I 2. Section 761.80 is amended by adding a new paragraph (j) to read as follows: § 761.80 Manufacturing, processing and distribution in commerce exemptions. mstockstill on PROD1PC66 with RULES * * * * * (j) The Administrator grants the United States Defense Logistics Agency’s July 21, 2005 petition for an exemption for 1 year to import 1,328,482 pounds of PCBs and PCB items stored or in use in Japan as identified in its petition, as amended, for disposal. * * * * * Jkt 211001 Rates for Pilotage on the Great Lakes ACTION: Coast Guard, DHS. Final rule. SUMMARY: The Coast Guard is finalizing the February 2007 interim rule, which updated rates for pilotage service on the Great Lakes by increasing rates an average of 22.62% across all three pilotage districts over the last ratemaking that was completed in April 2006. Annual reviews of pilotage rates are required by law to ensure that sufficient revenues are generated to cover the annual projected allowable expenses, target pilot compensation, and returns on investment of the pilot associations. DATES: This final rule is effective October 18, 2007. ADDRESSES: Comments and material received from the public, as well as documents mentioned in this preamble as being available in the docket, are part of docket USCG–2006–24414 and are available for inspection or copying at the Docket Management Facility, U.S. Department of Transportation, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also find this docket on the Internet at https:// dms.dot.gov. Table of Contents I. Background II. Discussion of Comments and Changes III. Discussion of the Final Rule IV. Regulatory Evaluation I. Background [FR Doc. E7–18345 Filed 9–17–07; 8:45 am] 18:27 Sep 17, 2007 RIN 1625–AB05 For questions on this final rule, please call Mr. Michael Sakaio, Program Analyst, Office of Great Lakes Pilotage, Commandant (CG–3PWM), U.S. Coast Guard, at 202–372–1538, by fax 202– 372–1929, or by email at michael.sakaio@uscg.mil. For questions on viewing or submitting material to the docket, call Renee V. Wright, Chief, Dockets, Department of Transportation, telephone 202–493–0402. SUPPLEMENTARY INFORMATION: I VerDate Aug<31>2005 [USCG–2006–24414] FOR FURTHER INFORMATION CONTACT: Authority: 15 U.S.C. 2605, 2607, 2611, 2614, and 2616. BILLING CODE 6560–50–S 46 CFR Part 401 The Great Lakes Pilotage Act of 1960, codified in Title 46, Chapter 93, of the PO 00000 Frm 00058 Fmt 4700 Sfmt 4700 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. 46 U.S.C. 9303(f) requires these reviews and, where deemed appropriate, that adjustments be established 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 full ratemaking was published in the Federal Register on April 3, 2006 (71 FR 16501). The first annual review following the 2006 ratemaking showed a need to adjust rates for the 2007 Great Lakes shipping season. That adjustment was the subject of a Notice of Proposed Rulemaking (‘‘NPRM,’’ 71 FR 39629, Jul. 13, 2006), followed by an Interim Rule (72 FR 8115, Feb. 23, 2007; corrected at 72 FR 13352, Mar. 21, 2007) which took effect March 26, 2007. In addition to the public comments, we received on the NPRM, we invited comments on the interim rule. II. Discussion of Comments The Coast Guard received three comments in response to the interim rule. One comment was received from the legal representative of the pilot associations; one comment was received from the legal representative for the Shipping Federation of Canada; and one comment was received from the Saint Lawrence Seaway Pilots Association. E:\FR\FM\18SER1.SGM 18SER1 mstockstill on PROD1PC66 with RULES Federal Register / Vol. 72, No. 180 / Tuesday, September 18, 2007 / Rules and Regulations A. Comments Not Requiring Full Discussion. Several comments raised issues that have either been fully addressed by the Coast Guard in the interim rule or in preceding rulemakings, or which are not relevant to the current rulemaking. These issues include the Coast Guard’s pending action on Rear Admiral J. Timothy Riker’s bridge hour standards report; whether delay and detention should be included in calculating bridge hours; the use of actual versus rounded bridge hours in projecting compensation; and whether the Coast Guard is correct in calculating pilot compensation by multiplying mates’ wages by 150% and then adding benefits, as opposed to multiplying mates’ wages and benefits by 150%. On this last point, one commenter took issue with our statement, in the interim rule, that in 2003 the District Court for the District of Columbia upheld our method of applying the 150% multiplier. This commenter remarked that a court ruling on this issue today might reach a different result in light of the ‘‘quantitative proof’’ that the Coast Guard’s method is less successful than the commenter’s preferred method in producing the outcome intended by Congress. We disagree. No such ‘‘quantitative proof ’’ data has been submitted to the docket for this rulemaking. Moreover, despite this commenter’s statements to the contrary, we have fully and consistently explained the rationale for our method, most recently in the interim rule at 72 FR 8117. Finally, comments concerning surcharges are not relevant to this rulemaking inasmuch as no surcharges have been taken into consideration in establishing the current rate. In the 2006 ratemaking, we incorporated all surcharges that were determined reasonable and necessary for the provision of pilotage service into each pilot association’s expense base, and terminated any further surcharges. No surcharges are currently authorized by the Coast Guard to be charged by the pilot associations and no future surcharges are contemplated. Persons interested in the Coast Guard’s treatment of surcharges are referred to the 2006 ratemaking’s final rule (71 FR 16501, Apr. 3, 2006). B. Union Contracts. One of the comments stated that the Coast Guard should consider using other union contracts, besides the American Maritime Officers’ (AMO) union contracts, in determining target pilot compensation. It mentioned two other maritime labor unions, the Marine Engineers’ Beneficial Association VerDate Aug<31>2005 18:27 Sep 17, 2007 Jkt 211001 (MEBA) and the National Organization of Masters, Mates, and Pilots of North America (MMP). The comment further stated that ‘‘the Coast Guard has historically limited its review to AMO union contracts. However, the regulations require a review of all union contracts.’’ We agree that the Coast Guard, since the implementation of the Great Lakes Ratemaking Methodology in 1996, has consistently used the AMO union contracts in its computation of target pilot compensation. We disagree that the regulations require a review of all union contracts. 46 CFR part 404, Appendix A, states only that ‘‘the average annual compensation for first mates is determined based on the most current union contracts.’’ The Coast Guard has interpreted this language to mean contracts most representative of first mates sailing on laker vessels in the Great Lakes. We disagree with the commenter that MEBA and MMP contracts should be included in our computation of rates. Research leading to the publication of the interim rule shows that AMO union contracts represent 62% of all laker tonnage compared to non-AMO union contracts, which represent approximately 38% of the tonnage. We do not know the exact percentage of laker tonnage represented by MEBA or MMP. But even with their presence, or any other union’s presence, the majority of the tonnage (62%) is represented by the AMO union contracts. Another commenter stated that the Coast Guard should use ‘‘only the most lucrative union contract in calculating target pilot compensation.’’ We disagree. As previously discussed, 46 CFR part 404, Appendix A, requires that the Coast Guard review ‘‘the most current contracts’’ in computing target pilot compensation and that is what we have done. Placing undue emphasis on a single ‘‘most lucrative’’ contract would inappropriately inflate compensation projections. C. Magnitude of Rate Increase. One comment stated the Coast Guard, by raising ‘‘pilotage rates 22.62% ... over the last rulemaking completed approximately one year ago, and just under 50% since 2005’’ had, by that fact alone, ‘‘breached its obligation to maintain a fair and efficient pilotage system and adhere to the statutory requirement to ensure that rates accurately reflect the costs of providing pilotage services under the Great Lakes Pilotage Act.’’ The Coast Guard disagrees. 46 U.S.C. 9303(f) states that the ‘‘Secretary shall prescribe by regulation rates and charges for pilotage services, giving consideration to the PO 00000 Frm 00059 Fmt 4700 Sfmt 4700 53159 public interest and the costs of providing the services.’’ 46 CFR Part 404, Appendices A and C, set out two methodologies, which were themselves the product of public rulemaking, creating fair and impartial formulas for establishing those rates and charges for pilot services. The Coast Guard has meticulously adhered to these methodologies in the creation of the rates referred to by the commenter. This same commenter states that by switching to unrounded bridge hour projections in the interim rule, vice the rounded bridge hour projections used in the NPRM, rates actually increased by 7.2%, overall, instead of the 3% claimed by the Coast Guard. We disagree. As we stated in the preamble to the interim rule, this correction increased the rate by 3%. The remaining percentage increases are attributable to a 14.7% increase in wages and benefits under the most recent AMO union contracts, a 5% increase in projected traffic, and .5% to non-wage inflation. D. Petition for Full Review. One commenter petitioned the Coast Guard to perform a full review of pilotage rates, to include an independent audit of each pilot association’s expense records and accounts pursuant to 46 CFR 404.1(b). That section requires that the Coast Guard perform such a review and audit at least once every five years. The last time the Coast Guard conducted such an audit was following the 2002 navigation season. Accordingly, the Coast Guard will, in the ordinary course, and consistent with the commenter’s request, conduct a five year review and audit at the completion of the 2007 navigation season. III. Discussion of the Final Rule This final rule finalizes the interim rule’s rates that Federal Great Lakes Registered Pilots may charge for the provision of pilotage services. Because this final rule changes none of the calculations or rates contained in the interim rule, we will not repeat the rate calculations or the regulatory evaluation contained in that document (72 IR 8115, Feb. 23, 2007). IV. Regulatory Evaluation 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 interim rule published in February 2007 is unchanged for this final rule. The cost and population data E:\FR\FM\18SER1.SGM 18SER1 53160 Federal Register / Vol. 72, No. 180 / Tuesday, September 18, 2007 / Rules and Regulations contained in the interim analysis is also unchanged for this final rule. In addition, there were no comments on the evaluation of the interim rule published in February 2007. Consequently, we adopt the analysis from the interim rule, available in the preamble of the interim rule, for this final rule. This rule makes final the 22.62 percent average rate adjustment for the Great Lakes system over the rate adjustment found in the 2006 final rule. The annual cost of the rate adjustment in this rule to shippers is approximately $2.3 million (non-discounted). The total five-year present value cost estimate (2007–2011) of this rule to shippers is $10.2 million discounted at a seven percent discount rate and $11.0 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. A. 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 interim rule resulted in no small entities affected by this rule. Since we received no comments pertaining to small entities and the analysis has not changed, we adopt the interim analysis for this final 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. mstockstill on PROD1PC66 with RULES B. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 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 Mike Sakaio, Office of Great Lakes Pilotage, (CG– 3PWM–2), U.S. Coast Guard, telephone 202–372–1538, or send him e-mail at Michael.Sakaio@uscg.mil. VerDate Aug<31>2005 18:27 Sep 17, 2007 Jkt 211001 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). F. 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. C. Collection of Information H. 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. 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. D. 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. E. 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 effects of this rule elsewhere in this preamble. PO 00000 Frm 00060 Fmt 4700 Sfmt 4700 G. 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. 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. J. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a ‘‘significant energy action’’ under that order because it is not a ‘‘significant regulatory action’’ under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. K. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are E:\FR\FM\18SER1.SGM 18SER1 Federal Register / Vol. 72, No. 180 / Tuesday, September 18, 2007 / Rules and Regulations 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. L. Environment We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321– 4370f). 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, this rule is 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 final ‘‘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. I For the reasons set forth in the preamble, the Coast Guard adopts as final without change the interim rule published at 72 FR 8115, February 23, 2007. Dated: September 10, 2007. J.G. Lantz, Acting Assistant Commandant for Prevention, U.S. Coast Guard. [FR Doc. E7–18306 Filed 9–17–07; 8:45 am] BILLING CODE 4910–15–P AGENCY FOR INTERNATIONAL DEVELOPMENT 48 CFR Parts 727, 742, and 752 mstockstill on PROD1PC66 with RULES RIN 0412–AA30 Miscellaneous Amendments to Acquisition Regulations (AIDAR Circular 2007–02) U.S. Agency for International Development. ACTION: Final Rule. AGENCY: VerDate Aug<31>2005 18:27 Sep 17, 2007 Jkt 211001 SUMMARY: This final rule amends the USAID acquisition regulation to add two new parts and four new sections in existing parts of the regulation, as more fully discussed in the Supplementary Information. USAID proposed these amendments in the proposed rule published on November 4, 1998, as AIDAR Notice 98–2. DATES: Effective Date: October 18, 2007. FOR FURTHER INFORMATION CONTACT: M/ OAA/P, Ms. Diane M. Howard, Room 7.08–31, 1300 Pennsylvania Ave., NW., U.S. Agency for International Development, Washington, DC 20523– 7801. Telephone (202) 712–0206; Internet: dhoward@usaid.gov. SUPPLEMENTARY INFORMATION: A. Background AIDAR Notice 98–2 (63 FR 59501, November 4, 1998) proposed four separate items to amend the USAID Acquisition Regulations (48 CFR Chapter 7), or AIDAR. The AIDAR is USAID’s supplement to the Federal Acquisition Regulation (48 CFR Chapter 1), the FAR. The following summarizes each item and the final action USAID is taking for each. 1. Item A of AIDAR Notice 98–2 proposed a new Part 712, specifically section 712.101, ‘‘Policy,’’ to address a potential conflict between an existing AIDAR clause, (48 CFR) 752.7008 ‘‘Use of Government Facilities or Personnel (APR 1984)’’ and the policy stated in (48 CFR) FAR Part 12. The latter states that the government will follow customary commercial practice when acquiring commercial items. The AIDAR clause prohibits the use of Government facilities or personnel in the performance of the contract. The AIDAR clause does not recognize situations in which the customary commercial practice may be for the purchaser to provide facilities or personnel to the vendor. At the time we proposed this new part, we considered the possibility that USAID may provide Government facilities, such as office space and equipment, to contractor employees providing commercial services such as IT support or secretarial/clerical services in USAID facilities. If commercial clients typically provide facilities and equipment for vendors providing similar services in the private sector, then that customary commercial practice would be inconsistent with the policy stated in (48 CFR) AIDAR 752.7008. The proposed part 712 would have required the contracting officer to comply with customary commercial practice unless he or she obtains a waiver in accordance with (48 CFR) FAR 12.302. However, the Agency PO 00000 Frm 00061 Fmt 4700 Sfmt 4700 53161 received no comments on this proposed rule and we have no indication that if providing facilities and equipment is a common commercial practice, it has ever been a problem in a USAID commercial contract. Therefore, we are withdrawing the proposed new part. 2. Item B of the Notice proposed removing (48 CFR) Chapter 7 (AIDAR) Appendix I, ‘‘USAID’s Academic Publication Policy’’ and adding a new part 727 and subpart 727.4 ‘‘Rights in Data and Copyrights.’’ The intent of this item of the proposed rule was to address four issues: (1) To make the clause at (48 CFR) FAR 52.227–14, ‘‘Rights in Data— General’’ apply to USAID’s contracts performed overseas and awarded to U.S. organizations, (2) to provide an alternate paragraph to add to this FAR clause to reserve USAID’s right to restrict release of data when release may have a negative impact on the Government’s development or diplomatic relationship with the cooperating country, (3) to provide guidance on Rights in Data coverage for overseas contracts with non-U.S. entities, and (4) to incorporate some of the policies and procedures in Appendix I that would be removed with the Appendix but that should be retained, as being in the Agency’s best interests. We are withdrawing the parts of Item B that affected Appendix I and retaining the current (48 CFR) Chapter 7, Appendix I in its present form. USAID is developing a separate internal policy and regulation on intellectual property. If this policy and regulation affects USAID contracts, we will determine how the AIDAR should implement it and take the appropriate action at that time. We are, however, finalizing other sections of the proposed (48 CFR) subpart 727.4, but we are amending the language from what appeared in the proposed rule. The only commenter on the proposed rule pointed out several instances where the wording was unclear about the intent of the proposed revision, so we have clarified the wording to address this comment. We are finalizing the new subpart to address certain FAR requirements that must be met in order for USAID to place limits on release of data under our contracts, as originally explained in the Supplementary Information in the proposed rule. First, 48 CFR (FAR) § 27.404(g)(3) states, ‘‘* * * agencies may, to the extent provided in their FAR supplements, place limitations or restrictions on the contractor’s right to use, release to others, reproduce, distribute, or publish any data first produced in the performance of the E:\FR\FM\18SER1.SGM 18SER1

Agencies

[Federal Register Volume 72, Number 180 (Tuesday, September 18, 2007)]
[Rules and Regulations]
[Pages 53158-53161]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18306]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 401

[USCG-2006-24414]
RIN 1625-AB05


Rates for Pilotage on the Great Lakes

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is finalizing the February 2007 interim rule, 
which updated rates for pilotage service on the Great Lakes by 
increasing rates an average of 22.62% across all three pilotage 
districts over the last ratemaking that was completed in April 2006. 
Annual reviews of pilotage rates are required by law to ensure that 
sufficient revenues are generated to cover the annual projected 
allowable expenses, target pilot compensation, and returns on 
investment of the pilot associations.

DATES: This final rule is effective October 18, 2007.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket USCG-2006-24414 and are available for inspection or 
copying at the Docket Management Facility, U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays. You may also find this docket 
on the Internet at https://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For questions on this final rule, 
please call Mr. Michael Sakaio, Program Analyst, Office of Great Lakes 
Pilotage, Commandant (CG-3PWM), U.S. Coast Guard, at 202-372-1538, by 
fax 202-372-1929, or by email at michael.sakaio@uscg.mil. For questions 
on viewing or submitting material to the docket, call Renee V. Wright, 
Chief, Dockets, Department of Transportation, telephone 202-493-0402.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Discussion of Comments and Changes
III. Discussion of the Final Rule
IV. Regulatory Evaluation

I. Background

    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. 46 
U.S.C. 9303(f) requires these reviews and, where deemed appropriate, 
that adjustments be established 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 full ratemaking was published in the Federal Register on 
April 3, 2006 (71 FR 16501). The first annual review following the 2006 
ratemaking showed a need to adjust rates for the 2007 Great Lakes 
shipping season. That adjustment was the subject of a Notice of 
Proposed Rulemaking (``NPRM,'' 71 FR 39629, Jul. 13, 2006), followed by 
an Interim Rule (72 FR 8115, Feb. 23, 2007; corrected at 72 FR 13352, 
Mar. 21, 2007) which took effect March 26, 2007. In addition to the 
public comments, we received on the NPRM, we invited comments on the 
interim rule.

II. Discussion of Comments

    The Coast Guard received three comments in response to the interim 
rule. One comment was received from the legal representative of the 
pilot associations; one comment was received from the legal 
representative for the Shipping Federation of Canada; and one comment 
was received from the Saint Lawrence Seaway Pilots Association.

[[Page 53159]]

    A. Comments Not Requiring Full Discussion. Several comments raised 
issues that have either been fully addressed by the Coast Guard in the 
interim rule or in preceding rulemakings, or which are not relevant to 
the current rulemaking. These issues include the Coast Guard's pending 
action on Rear Admiral J. Timothy Riker's bridge hour standards report; 
whether delay and detention should be included in calculating bridge 
hours; the use of actual versus rounded bridge hours in projecting 
compensation; and whether the Coast Guard is correct in calculating 
pilot compensation by multiplying mates' wages by 150% and then adding 
benefits, as opposed to multiplying mates' wages and benefits by 150%. 
On this last point, one commenter took issue with our statement, in the 
interim rule, that in 2003 the District Court for the District of 
Columbia upheld our method of applying the 150% multiplier. This 
commenter remarked that a court ruling on this issue today might reach 
a different result in light of the ``quantitative proof'' that the 
Coast Guard's method is less successful than the commenter's preferred 
method in producing the outcome intended by Congress. We disagree. No 
such ``quantitative proof '' data has been submitted to the docket for 
this rulemaking. Moreover, despite this commenter's statements to the 
contrary, we have fully and consistently explained the rationale for 
our method, most recently in the interim rule at 72 FR 8117.
    Finally, comments concerning surcharges are not relevant to this 
rulemaking inasmuch as no surcharges have been taken into consideration 
in establishing the current rate. In the 2006 ratemaking, we 
incorporated all surcharges that were determined reasonable and 
necessary for the provision of pilotage service into each pilot 
association's expense base, and terminated any further surcharges. No 
surcharges are currently authorized by the Coast Guard to be charged by 
the pilot associations and no future surcharges are contemplated. 
Persons interested in the Coast Guard's treatment of surcharges are 
referred to the 2006 ratemaking's final rule (71 FR 16501, Apr. 3, 
2006).
    B. Union Contracts. One of the comments stated that the Coast Guard 
should consider using other union contracts, besides the American 
Maritime Officers' (AMO) union contracts, in determining target pilot 
compensation. It mentioned two other maritime labor unions, the Marine 
Engineers' Beneficial Association (MEBA) and the National Organization 
of Masters, Mates, and Pilots of North America (MMP). The comment 
further stated that ``the Coast Guard has historically limited its 
review to AMO union contracts. However, the regulations require a 
review of all union contracts.''
    We agree that the Coast Guard, since the implementation of the 
Great Lakes Ratemaking Methodology in 1996, has consistently used the 
AMO union contracts in its computation of target pilot compensation. We 
disagree that the regulations require a review of all union contracts. 
46 CFR part 404, Appendix A, states only that ``the average annual 
compensation for first mates is determined based on the most current 
union contracts.'' The Coast Guard has interpreted this language to 
mean contracts most representative of first mates sailing on laker 
vessels in the Great Lakes. We disagree with the commenter that MEBA 
and MMP contracts should be included in our computation of rates. 
Research leading to the publication of the interim rule shows that AMO 
union contracts represent 62% of all laker tonnage compared to non-AMO 
union contracts, which represent approximately 38% of the tonnage. We 
do not know the exact percentage of laker tonnage represented by MEBA 
or MMP. But even with their presence, or any other union's presence, 
the majority of the tonnage (62%) is represented by the AMO union 
contracts.
    Another commenter stated that the Coast Guard should use ``only the 
most lucrative union contract in calculating target pilot 
compensation.'' We disagree. As previously discussed, 46 CFR part 404, 
Appendix A, requires that the Coast Guard review ``the most current 
contracts'' in computing target pilot compensation and that is what we 
have done. Placing undue emphasis on a single ``most lucrative'' 
contract would inappropriately inflate compensation projections.
    C. Magnitude of Rate Increase. One comment stated the Coast Guard, 
by raising ``pilotage rates 22.62% ... over the last rulemaking 
completed approximately one year ago, and just under 50% since 2005'' 
had, by that fact alone, ``breached its obligation to maintain a fair 
and efficient pilotage system and adhere to the statutory requirement 
to ensure that rates accurately reflect the costs of providing pilotage 
services under the Great Lakes Pilotage Act.'' The Coast Guard 
disagrees. 46 U.S.C. 9303(f) states that the ``Secretary shall 
prescribe by regulation rates and charges for pilotage services, giving 
consideration to the public interest and the costs of providing the 
services.'' 46 CFR Part 404, Appendices A and C, set out two 
methodologies, which were themselves the product of public rulemaking, 
creating fair and impartial formulas for establishing those rates and 
charges for pilot services. The Coast Guard has meticulously adhered to 
these methodologies in the creation of the rates referred to by the 
commenter.
    This same commenter states that by switching to unrounded bridge 
hour projections in the interim rule, vice the rounded bridge hour 
projections used in the NPRM, rates actually increased by 7.2%, 
overall, instead of the 3% claimed by the Coast Guard. We disagree. As 
we stated in the preamble to the interim rule, this correction 
increased the rate by 3%. The remaining percentage increases are 
attributable to a 14.7% increase in wages and benefits under the most 
recent AMO union contracts, a 5% increase in projected traffic, and .5% 
to non-wage inflation.
    D. Petition for Full Review. One commenter petitioned the Coast 
Guard to perform a full review of pilotage rates, to include an 
independent audit of each pilot association's expense records and 
accounts pursuant to 46 CFR 404.1(b). That section requires that the 
Coast Guard perform such a review and audit at least once every five 
years. The last time the Coast Guard conducted such an audit was 
following the 2002 navigation season. Accordingly, the Coast Guard 
will, in the ordinary course, and consistent with the commenter's 
request, conduct a five year review and audit at the completion of the 
2007 navigation season.

III. Discussion of the Final Rule

    This final rule finalizes the interim rule's rates that Federal 
Great Lakes Registered Pilots may charge for the provision of pilotage 
services. Because this final rule changes none of the calculations or 
rates contained in the interim rule, we will not repeat the rate 
calculations or the regulatory evaluation contained in that document 
(72 IR 8115, Feb. 23, 2007).

IV. Regulatory Evaluation

    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 interim rule published in February 2007 is unchanged for this 
final rule. The cost and population data

[[Page 53160]]

contained in the interim analysis is also unchanged for this final 
rule. In addition, there were no comments on the evaluation of the 
interim rule published in February 2007. Consequently, we adopt the 
analysis from the interim rule, available in the preamble of the 
interim rule, for this final rule. This rule makes final the 22.62 
percent average rate adjustment for the Great Lakes system over the 
rate adjustment found in the 2006 final rule. The annual cost of the 
rate adjustment in this rule to shippers is approximately $2.3 million 
(non-discounted). The total five-year present value cost estimate 
(2007-2011) of this rule to shippers is $10.2 million discounted at a 
seven percent discount rate and $11.0 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.

A. 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 interim rule 
resulted in no small entities affected by this rule. Since we received 
no comments pertaining to small entities and the analysis has not 
changed, we adopt the interim analysis for this final 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.

B. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 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 Mike Sakaio, Office of Great Lakes Pilotage, 
(CG-3PWM-2), U.S. Coast Guard, telephone 202-372-1538, or send him e-
mail at Michael.Sakaio@uscg.mil.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

C. 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.

D. 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.

E. 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 effects of this rule elsewhere in this preamble.

F. 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.

G. 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.

H. 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.

I. 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.

J. Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under Executive Order 12866 and is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. The Administrator of the Office of Information and 
Regulatory Affairs has not designated it as a significant energy 
action. Therefore, it does not require a Statement of Energy Effects 
under Executive Order 13211.

K. Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are

[[Page 53161]]

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.

L. Environment

    We have analyzed this rule under Commandant Instruction M16475.lD 
and Department of Homeland Security Management Directive 5100.1, which 
guide the Coast Guard in complying with the National Environmental 
Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f). 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, this rule is 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 final ``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 set forth in the preamble, the Coast Guard adopts as 
final without change the interim rule published at 72 FR 8115, February 
23, 2007.

    Dated: September 10, 2007.
J.G. Lantz,
Acting Assistant Commandant for Prevention, U.S. Coast Guard.
[FR Doc. E7-18306 Filed 9-17-07; 8:45 am]
BILLING CODE 4910-15-P

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