2010 Rates for Pilotage on the Great Lakes, 7958-7971 [2010-3396]

Download as PDF 7958 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations Location and Case No. Date and name of newspaper where notice was published Chief executive officer of community Effective date of modification Unincorporated areas of Rutherford County (09– 04–3370P). Town of Smyrna (09–04–2810P). July 8, 2009; July 15, 2009; Daily News Journal. The Honorable Ernest Burgess, Mayor, Rutherford County, County Courthouse, Room 101, Murfreesboro, TN 37130. November 12, 2009 ........ 470165 July 8, 2009; July 15, 2009; Daily News Journal. November 12, 2009 ........ 470169 Unincorporated areas of Wilson County (09–04– 3370P). July 8, 2009; July 15, 2009; Wilson Post. The Honorable Bobby G. Spivey, Mayor, Town of Smyrna, 315 South Lowry Street, Smyrna, TN 37167. The Honorable Robert Dedman, County Mayor, Wilson County, 228 East Main Street, Lebanon, TN 37087. November 12, 2009 ........ 470165 Unincorporated areas of McLennan County (09–06–0597P). City of Waco (09– 06–0597P). June 26, 2009; July 3, 2009; Waco Tribune Herald. The Honorable Jim Lewis, McLennan County Judge, P.O. Box 1728, Waco, TX 76701. November 2, 2009 .......... 480456 June 26, 2009; July 3, 2009; Waco Tribune Herald. November 2, 2009 .......... 480461 Travis ................ City of Pflugerville (09–06–1373P). July 23, 2009; July 30, 2009; Pflugerville Pflag. November 30, 2009 ........ 481028 Virginia: Loudoun .... Town of Leesburg (08–03–1561P). June 24, 2009; July 1, 2009; Loudoun Times Mirror. October 29, 2009 ........... 510091 Wyoming: Sweetwater. City of Rock Springs (09–08–0320P). July 14, 2009; July 21, 2009; Rock Springs Daily Rocket Miner. The Honorable Virginia DuPuy, Mayor, City of Waco, P.O. Box 2570, Waco, TX 76702. The Honorable Jeff Coleman, Mayor, City of Pflugerville, P.O. Box 589, Pflugerville, TX 78691. The Honorable Kristen C. Umstattd, Mayor, Town of Leesburg, P.O. Box 88, Leesburg, VA 20178. The Honorable Timothy A. Kaumo, Mayor, City of Rock Springs, 212 D Street, Rock Springs, WY 82901. November 18, 2009 ........ 560051 State and county Rutherford ........ Rutherford ........ Wilson ............... Texas: McLennan ......... McLennan ......... (Catalog of Federal Domestic Assistance No. 97.022, ‘‘Flood Insurance.’’) Sandra K. Knight, Deputy Assistant Administrator for Mitigation, Department of Homeland Security, Federal Emergency Management Agency. [FR Doc. 2010–3440 Filed 2–22–10; 8:45 am] BILLING CODE 9110–12–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 46 CFR Part 401 [Docket No. USCG–2009–0883] RIN 1625–AB39 2010 Rates for Pilotage on the Great Lakes Coast Guard, DHS. Final rule. AGENCY: mstockstill on DSKH9S0YB1PROD with RULES ACTION: SUMMARY: The Coast Guard is increasing the rates for pilotage service on the Great Lakes by an average of 5.07% to generate sufficient revenue to cover allowable expenses, target pilot compensation, and return on investment. This increase reflects an August 1, 2010, increase in benchmark contractual wages and benefits and an adjustment for inflation. This rulemaking promotes the Coast Guard strategic goal of maritime safety. DATES: This final rule is effective August 1, 2010. VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 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–2009–0883 and are available for inspection or copying at the 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, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also find this docket on the Internet by going to http://www.regulations.gov, inserting USCG–2009–0883 in the ‘‘Keyword’’ box, and then clicking ‘‘Search.’’ FOR FURTHER INFORMATION CONTACT: For questions on this final rule, please call Mr. Paul Wasserman, Chief, Great Lakes Pilotage Branch, Commandant (CG– 54122), U.S. Coast Guard, at 202–372– 1535, by fax 202–372–1909, or e-mail Paul.M.Wasserman@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. ADDRESSES: Community No. D. Collection of Information E. Federalism F. Unfunded Mandates Reform Act G. Taking of Private Property H. Civil Justice Reform I. Protection of Children J. Indian Tribal Governments K. Energy Effects L. Technical Standards M. Environment I. Abbreviations AMOU American Maritime Officer Union GLPAC Great Lakes Pilotage Advisory Committee MISLE Coast Guard Marine Inspection, Safety, and Law Enforcement system NAICS North American Industry Classification System NPRM Notice of Proposed Rulemaking NTTAA National Technology Transfer and Advancement Act OMB Office of Management and Budget Table of Contents for Preamble II. Regulatory History On October 30, 2009, we published a notice of proposed rulemaking entitled Great Lakes Pilotage Rates—2010 Annual Review and Adjustment in the Federal Register (NPRM, 74 FR 56153). We received five comments on the proposed rule. No public meeting was requested and none was held. I. Abbreviations II. Regulatory History III. Background IV. Discussion of Comments and Changes V. Discussion of the Final Rule A. Summary B. Calculating the Rate Adjustment VI. Regulatory Analyses A. Regulatory Planning and Review B. Small Entities C. Assistance for Small Entities III. Background We published a notice of proposed rulemaking on October 30, 2009 (NPRM, 74 FR 56153). The NPRM proposed an average 5.07% rate increase. This rulemaking increases Great Lakes pilotage rates in accord with the methodology contained in Coast Guard regulations in 46 CFR parts 401–404. Our regulations implement the Great PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 E:\FR\FM\23FER1.SGM 23FER1 mstockstill on DSKH9S0YB1PROD with RULES Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations Lakes Pilotage Act of 1960 (‘‘the Act’’), 46 U.S.C. Chapter 93, which requires foreign-flag vessels engaged in foreign trade to use U.S. registered pilots while transiting the St. Lawrence Seaway and the Great Lakes system. The Act also requires the Secretary of Homeland Security to ‘‘prescribe by regulation rates and charges for pilotage services, giving consideration to the public interest and the costs of providing the services,’’ and requires annual rate reviews to be completed by March 1 of each year, with a ‘‘full ratemaking’’ to establish new base rates at least once every five years. 46 U.S.C. 9303(f). The U.S. waters of the Great Lakes and the St. Lawrence Seaway are divided into three pilotage districts. Pilotage in each district is provided by an association certified by the Coast Guard Director of Great Lakes Pilotage to operate a pilotage pool. It is important to note that, while we set rates, we do not control the actual number of pilots an association maintains, so long as the association is able to provide safe, efficient, and reliable pilotage service, nor do we control the actual compensation that pilots receive. This is determined by each of the three District associations, which use different compensation practices. District One, consisting of Areas 1 and 2, includes all U.S. waters of the St. Lawrence River and Lake Ontario. District Two, consisting of Areas 4 and 5, includes all U.S. waters of Lake Erie, the Detroit River, Lake St. Clair, and the St. Clair River. District Three, consisting of Areas 6, 7, and 8, includes all U.S. waters of the St. Mary’s River, Sault Ste. Marie Locks, and Lakes Michigan, Huron, and Superior. Area 3 is the Welland Canal, which is serviced exclusively by the Canadian Great Lakes Pilotage Authority and, accordingly, is not included in the U.S. rate structure. Areas 1, 5, and 7 have been designated by Presidential Proclamation, pursuant to the Great Lakes Pilotage Act of 1960, to be waters in which pilots must at all times be fully engaged in the navigation of vessels in their charge. Areas 2, 4, 6, and 8 have not been so designated because they are open bodies of water. Under the Act, pilots assigned to vessels in these areas are only required to ‘‘be on board and available to direct the navigation of the vessel at the discretion of and subject to the customary authority of the master.’’ 46 U.S.C. 9302(a)(1)(B). Our pilotage regulations implement the Act’s requirement for annual reviews of pilotage rates and a full ratemaking at least once every five years. 46 CFR 404.1. To assist in VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 calculating pilotage rates, the regulations require pilotage associations to submit annual financial statements prepared by certified public accounting firms. In addition, every fifth year, in connection with the full ratemaking, we contract with an independent accounting firm to conduct a full audit of the accounts and records of the pilotage associations and prepare and submit financial reports relevant to the ratemaking process. In those years when a full ratemaking is conducted, we generate the pilotage rates using Appendix A to 46 CFR part 404. The last Appendix A review was concluded in 2006 (71 FR 16501, Apr. 3, 2006). Between the five-year full ratemaking intervals, we annually review the pilotage rates using Appendix C to part 404, and adjust rates when deemed appropriate. We conducted Appendix C reviews in 2007, 2008 and 2009 and increased rates in each year. The 2009 final rule was published on July 21, 2009 (74 FR 138), and took effect on August 1, 2009. We define the terms and formulas used in Appendix A and Appendix C in Appendix B to part 404. This final rule concludes the annual Appendix C rate review for 2010, and increases rates by an average of 5.07% over the rates that took effect August 1, 2009. IV. Discussion of Comments and Changes Five comments were submitted during the NPRM public comment period. Ratemaking methodology. One commenter recommended that we suspend any further action on this rulemaking until full consideration can be given to comments received in response to our July 21, 2009, request for public comments (‘‘Great Lakes Pilotage Ratemaking Methodology,’’ 74 FR 35838). In July, we requested comments on the adequacy of our current ratemaking methodology in light of the realities of Great Lakes commercial shipping and the need to fairly balance competing considerations. We noted that any comments would be referred to the Great Lakes Pilotage Advisory Committee (GLPAC), a group created by the Great Lakes Pilotage Act to advise us on significant issues relating to Great Lakes pilotage. GLPAC will review our methodology and the comments received in response to our notice, and may recommend changes. If we accept their recommendations, any changes would require regulatory action. GLPAC has just begun reviewing comments. As yet there is no timeline for any GLPAC recommendations and no rulemaking underway to modify the PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 7959 methodology. Therefore, we cannot complete the ‘‘full consideration’’ mentioned by the commenter before March 1, 2010, the Act’s deadline for establishing any annual rate adjustment for 2010. The Act provides no exception to the March 1 deadline for consideration of possible changes to the existing rate review process. Thus, we cannot suspend work on this rulemaking without violating the law. Another commenter reiterated comments the commenter made during the 2007 and 2009 rate reviews. In 2007, we explained our reasons for disagreeing with this commenter’s analysis of the ‘‘150% factor’’ for designated waters; 2007 interim rule, 72 FR 8115 at 8117 (Feb. 23, 2007) and 2007 Final Rule, 72 FR 53158 at 53159 (July 18, 2007). In the 2009 final rule, we explained our reasons for disagreeing with this Commenter on the ‘‘Riker Report’’ on bridge hour calculations; 74 FR 35812 at 35814. As no new substantive information has been added, we will not repeat those earlier explanations. The commenter’s suggestion that we amend the vessel weighting factor table in 46 CFR 401.400 is beyond the scope of this ratemaking. Two commenters reiterated past comments about our use of rounding in bridge hour calculations, without adding new information. We fully discussed our use of rounding in the 2009 final rule, specifically with reference to Area 4, which is of particular concern to one of these commenters, and we will not repeat that discussion; 74 FR 35812 at 35813. The Area 4 calculations have not changed since the 2009 final rule. A commenter said that our ratemaking is arbitrary and capricious because we count delay and detention in calculating bridge hours for Areas 6, 7, and 8, but not in Areas 4 and 5. No information was provided to substantiate this claim, which runs counter to our discussion of bridge hour calculations in ratemaking documents over many years, and which repeats an allegation made in 2007 and refuted in that year’s interim rule: ‘‘The Coast Guard has never considered delay, detention, or travel time to be included in the definition of bridge hours and has never knowingly included these items in its bridge hour computations’’; 72 FR 8115 at 8117, Feb. 23, 2007. Coast Guard did not consider delay, detention, or travel time in its bridge hour computations in this final rule. Effective date. Another commenter stated that the Act requires any 2010 rate adjustment to take effect by March 1, 2010. The comment acknowledged that this is not the Coast Guard’s interpretation of the Act. In our view, 46 E:\FR\FM\23FER1.SGM 23FER1 7960 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations U.S.C. 9303(f) only requires us to publish a rule announcing the 2010 rate adjustment by March 1, 2010; the rule’s effective date should be delayed until the event triggering the need for adjustment actually takes place. In this case, the triggering event will be the benchmark contract changes that do not take effect until August 1, 2010. This commenter also said that, even under the Coast Guard’s interpretation of the Act, some relevant rate factors have already changed. The commenter mentions bridge hour projections (discussed subsequently) and cost of living (which is determined using 2007 and 2008 data). However, the inflation factor is merely one of three components that make up projected total economic costs and has a minimal effect on the rate calculation. We decline to adjust the rates to reflect only minimal changes. Supporting data. One commenter found it impossible to verify the calculations made in our NPRM. He mentioned the absence from the docket of two benchmark contracts and the absence of supporting documentation for the inflation factor used in our calculations. The two contracts were placed in the docket maintained by the Docket Management Facility on November 25, 2009, prior to the close of the public comment period. The NPRM, 74 FR 56153 at 56156, identified the parties to both contracts and accurately represented their terms. This enabled the commenter to verify the accuracy of our data, prior to November 25, 2009, by contacting any of the contractual parties. The data supporting the inflation factor did not appear in the docket maintained by the Docket Management Facility until December 2, 2009, after the close of the public comment period. However, the NPRM, 74 FR 56153 at 56159, identified Bureau of Labor Statistics (BLS) Midwest consumer price data as the source of our calculations, and this data was at all times available from the BLS Web site, http://www.bls.gov. This same commenter also said that projected bridge hours for 2010 should be based on actual bridge hours for 2009 to date, along with results of consultations with stakeholders, including the shipping industry. Another commenter asked why we did not use 2009 actual hours. As stated in the NPRM, 74 FR 56153 at 56158, our 2010 projections are based on historical data (by which we mean actual figures for complete past shipping seasons) and information provided both by pilots and industry. To meet the Act’s March 1 deadline for completion of each year’s rate review, with a final rule that meets all applicable requirements of the Federal regulatory process, Coast Guard data collection for the following year’s review typically begins in the early spring of the preceding year. Given that reality, it is impracticable for the Coast Guard to base NPRM projections for the next year on actual results from the preceding year. The commenter’s estimate of a 25% drop in shipping traffic between 2008 and 2009 does not provide us with sufficiently detailed data on which to base a revision of our 2010 projections in this final rule. We do expect verified and complete 2009 actual data to inform our 2011 ratemaking. District One pilot boat. Another commenter expressed a desire to have District One’s purchase of a new pilot boat reflected in the 2010 rate adjustment, or as soon as possible. This comment is beyond the scope of this ratemaking, which is being conducted pursuant to our Appendix C methodology, because it asks for action that can be taken only under an Appendix A full ratemaking. The next Appendix A review is already in progress. It will be based on a 2008 audit of pilot association expenses. This could present a timing problem from District One’s perspective, because their boat expenses did not begin until 2009 and therefore would not be captured in the 2008 audit data. Presumably to address that timing problem, in March 2009, District One petitioned the Coast Guard for a ‘‘modified’’ Appendix A review that could focus specifically on the pilot boat purchase. We could not grant that petition because there are no provisions for ‘‘modifying’’ Appendix A without conducting a rulemaking to make the modifications. However, we are mindful of the importance of this issue for District One, and we will ask GLPAC for its recommendations on how best to proceed, as part of GLPAC’s consideration of public comments received in response to our July 2009 ratemaking methodology notice. Miscellaneous. A commenter asked us to refer to ‘‘U.S. registered pilots’’ instead of ‘‘federally registered Great Lakes pilots’’ and we have done so. V. Discussion of the Final Rule A. Summary We are increasing pilotage rates in accordance with the methodology outlined in Appendix C to 46 CFR part 404, by increasing rates an average 5.07% over the 2009 final rule, effective August 1, 2010. The new rates are unchanged from what we proposed in the NPRM. Table 1 shows the new rates for each Area. TABLE 1—2010 AREA RATE CHANGES Then the proposed percentage increases over the current rate is: If pilotage service is required in: mstockstill on DSKH9S0YB1PROD with RULES Area 1 (Designated waters) ............................................................................................................................................. Area 2 (Undesignated waters) ......................................................................................................................................... Area 4 (Undesignated waters) ......................................................................................................................................... Area 5 (Designated waters) ............................................................................................................................................. Area 6 (Undesignated waters) ......................................................................................................................................... Area 7 (Designated waters) ............................................................................................................................................. Area 8 (Undesignated waters) ......................................................................................................................................... Overall Rate Change (percentage change in overall prospective unit costs/base unit costs; see Table 18) ................ Rates for cancellation, delay, or interruption in rendering services (46 CFR 401.420), and basic rates and charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal boarding point VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 (46 CFR 401.428), have been increased by 5.07% in all Areas. B. Calculating the Rate Adjustment The Appendix C ratemaking calculation involves eight steps: PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 4.65 5.33 5.47 4.96 5.27 4.73 5.17 5.07 Step 1: Calculate the total economic costs for the base period (i.e. pilot compensation expense plus all other recognized expenses plus the return element) and divide by the total bridge E:\FR\FM\23FER1.SGM 23FER1 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations hours used in setting the base period rates; Step 2: Calculate the ‘‘expense multiplier,’’ the ratio of other expenses and the return element to pilot compensation for the base period; Step 3: Calculate an annual ‘‘projection of target pilot compensation’’ using the same procedures found in Step 2 of Appendix A; Step 4: Increase the projected pilot compensation in Step 3 by the expense multiplier in Step 2; Step 5: Adjust the result in Step 4, as required, for inflation or deflation; Step 6: Divide the result in Step 5 by projected bridge hours to determine total unit costs; Step 7: Divide prospective unit costs in Step 6 by the base period unit costs in Step 1; and Step 8: Adjust the base period rates by the percentage changes in unit cost in Step 7. The base data used to calculate each of the eight steps comes from the 2009 Appendix C review. The Coast Guard also used the most recent union contracts between the American Maritime Officers Union (AMOU) and vessel owners and operators on the Great Lakes to determine target pilot compensation. Bridge hour projections for the 2010 season have been obtained from historical data, pilots, and industry. All documents and records used in this rate calculation have been placed in the public docket for this rulemaking and are available for review at the addresses listed under ADDRESSES. Some values may not total exactly due to format rounding for presentation in charts and explanations in this section. The rounding does not affect the integrity or truncate the real value of all calculations in the ratemaking methodology described below. Also, 7961 please note that in previous rulemakings we calculated an expense multiplier for each District. This was unnecessary because Appendix C calculations are based on area figures, not district figures. District figures, where they are shown in the following tables, now reflect only the arithmetical totals for each of the district’s areas. Step 1: Calculate the total economic cost for the base period. In this step, for each area, we add the total cost of target pilot compensation, all other recognized expenses, and the return element (net income plus interest). We divide this sum by the total bridge hours for each area. The result is the cost in each area of providing pilotage service per bridge hour for the base period. Tables 2 through 4 summarize the Step 1 calculations: TABLE 2—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT ONE Area 1 St. Lawrence River Area 2 Lake Ontario Total * District One Base operating expense (less base return element) ...................................................... Base target pilot compensation ....................................................................................... Base return element ........................................................................................................ $538,155 + $1,617,955 + $10,763 $547,489 + $981,589 + $16,425 $1,085,644 + $2,599,544 + $27,188 Subtotal * ................................................................................................................... Base bridge hours ........................................................................................................... Base cost per bridge hour ............................................................................................... = $2,166,873 ÷ 5,203 = $416.47 = $1,545,503 ÷ 5,650 = $273.54 = $3,712,376 ÷ 10,853 = $342.06 * As explained in the text preceding Step 1, District totals have been expressed differently from previous rulemakings. This accounts for slight differences between the District totals shown in Table 16 of the 2009 final rule and the District totals shown in this table. TABLE 3—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT TWO Area 4 Lake Erie Area 5 Southeast Shoal to Port Huron, MI Total * District Two Base operating expense .................................................................................................. Base target pilot compensation ....................................................................................... Base return element ........................................................................................................ $502,087 + $785,271 + $25,104 $789,202 + $1,617,955 + $31,568 $1,291,289 + $2,403,226 + $56,672 Subtotal ..................................................................................................................... Base bridge hours ........................................................................................................... Base cost per bridge hour ............................................................................................... = $1,312,463 ÷ 7,320 = $179.30 = $2,438,725 ÷ 5,097 = $478.46 = $3,751,188 ÷ 12,417 = $302.10 * See footnote to Table 2. TABLE 4—TOTAL ECONOMIC COST FOR BASE PERIOD (2009), AREAS IN DISTRICT THREE mstockstill on DSKH9S0YB1PROD with RULES Area 6 Lakes Huron and Michigan Area 7 St. Mary’s River Base operating expense .................................................................. Base target pilot compensation ....................................................... Base return element ........................................................................ $814,358 + $1,570,542 + $32,574 $398,461 + $1,078,637 + $11,954 $641,580 + $1,374,224 + $19,247 $1,854,399 + $4,023,403 + $63,776 Subtotal ..................................................................................... Base bridge hours ........................................................................... Base cost per bridge hour ............................................................... = $2,417,474 ÷ 13,406 = $180.33 = $1,489,052 ÷ 3,259 = $456.90 = $2,035,052 ÷ 11,630 = $174.98 = $5,941,578 ÷ 28,295 = $209.99 Area 8 Lake Superior * See footnote to Table 2. VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 E:\FR\FM\23FER1.SGM 23FER1 Total * District Three 7962 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations Step 2. Calculate the expense multiplier. In this step, for each Area, we add the base operating expense and the base return element. Then, we divide the sum by the base target pilot compensation to get the expense multiplier for each area. Tables 5 through 7 show the Step 2 calculations. TABLE 5—EXPENSE MULTIPLIER, AREAS IN DISTRICT ONE Area 1 St. Lawrence River Area 2 Lake Ontario Base operating expense ..................................................................................................... Base return element ........................................................................................................... $538,155 + $10,763 $547,489 + $16,425 Subtotal ....................................................................................................................... Base target pilot compensation .......................................................................................... Expense multiplier .............................................................................................................. = $548,918 ÷ $1,617,955 0.33927 = $563,914 ÷ $981,589 0.57449 Total District One $1,085,644 + $27,188 = $1,112,832 $2,599,544 Not applicable (n/a) TABLE 6—EXPENSE MULTIPLIER, AREAS IN DISTRICT TWO Area 4 Lake Erie Area 5 Southeast Shoal to Port Huron, MI Total District Two Base operating expense .................................................................................................. Base return element ........................................................................................................ $502,087 + $25,104 $789,202 + $31,568 $1,291,289 + $56,672 Subtotal ..................................................................................................................... Base target pilot compensation ....................................................................................... Expense multiplier ........................................................................................................... = $527,192 ÷ $785,271 0.67135 = $820,770 ÷ $1,617,955 0.50729 = $1,347,962 $2,403,226 n/a TABLE 7—EXPENSE MULTIPLIER, AREAS IN DISTRICT THREE Area 7 St. Mary’s River Base operating Expense ................................................................. Base return element ........................................................................ $814,358 + $32,574 $398,461 + $11,954 $641,580 + $19,247 $1,854,399 + $63,776 Subtotal ..................................................................................... Base target pilot compensation ....................................................... Expense multiplier ........................................................................... mstockstill on DSKH9S0YB1PROD with RULES Area 6 Lakes Huron and Michigan = $846,932 ÷ $1,570,542 0.53926 = $410,415 ÷ $1,078,637 0.38049 = $660,828 ÷ $1,374,224 0.48087 = $1,918,175 $4,023,403 n/a Step 3. Calculate annual projection of target pilot compensation. In this step, we determine the new target rate of compensation and the new number of pilots needed in each pilotage area, to determine the new target pilot compensation for each area. (a) Determine new target rate of compensation. Target pilot compensation is based on the average annual compensation of first mates and masters on U.S. Great Lakes vessels. For pilots in undesignated waters, we approximate the first mates’ compensation and, in designated waters, we approximate the master’s compensation (first mates’ wages multiplied by 150% plus benefits). To determine first mates’ and masters’ average annual compensation, we use data from the most recent AMOU VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 contracts with the U.S. companies engaged in Great Lakes shipping. Where different AMOU agreements apply to different companies, we apportion the compensation provided by each agreement according to the percentage of tonnage represented by companies under each agreement. As of May 2009, there are two current AMOU contracts, which we designate Agreement A and Agreement B. Agreement A applies to vessels operated by Key Lakes, Inc., and Agreement B applies to all vessels operated by American Steamship Co. and Mittal Steel USA, Inc. Both Agreement A and Agreement B provide for a 3% wage increase effective August 1, 2010. Under Agreement A, the daily wage rate will be increased from $262.73 to $270.61. Under Agreement B, PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 Area 8 Lake Superior Total District Three the daily wage rate will be increased from $323.86 to $333.57. To calculate monthly wages, we apply Agreement A and Agreement B monthly multipliers of 54.5 and 49.5, respectively, to the daily rate. Agreement A’s 54.5 multiplier represents 30.5 average working days, 15.5 vacation days, 4 days for four weekends, 3 bonus days, and 1.5 holidays. Agreement B’s 49.5 multiplier represents 30.5 average working days, 16 vacation days, and 3 bonus days. To calculate average annual compensation, we multiply monthly figures by 9 months, the length of the Great Lakes shipping season. Table 8 shows new wage calculations based on Agreements A and B effective August 1, 2010. E:\FR\FM\23FER1.SGM 23FER1 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations 7963 TABLE 8—WAGES Pilots on undesignated waters Monthly component AGREEMENT A: $270.61 daily rate × 54.5 days ......................................................................................... AGREEMENT A: Monthly total × 9 months = total wages ........................................................................... AGREEMENT B: $333.57 daily rate × 49.5 days ......................................................................................... AGREEMENT B: Monthly total × 9 months = total wages ........................................................................... Both Agreements A and B include a health benefits contribution rate of $88.76 effective August 1, 2010. Agreement A includes a pension plan contribution rate of $33.35 per man-day. Agreement B includes a pension plan contribution rate of $43.55 per man-day. Pilots on designated waters (undesignated × 150%) $14,748 132,735 199,103 16,512 24,768 148,608 Both Agreements A and B provide a 401K employer matching rate, 5% of the wage rate. Neither Agreement A nor Agreement B includes a clerical contribution that appeared in earlier contracts. Per the AMOU, the multiplier $22,123 222,912 used to calculate monthly benefits is 45.5 days. Table 9 shows new benefit calculations based on Agreements A and B, effective August 1, 2010, and Table 10 totals the figures in Tables 8 and 9. TABLE 9—BENEFITS Pilots on undesignated waters Monthly component AGREEMENT A: Employer contribution, 401(K) plan (Monthly Wages × 5%) ............................................ Pension = $33.35 × 45.5 days ......................................................................................... Health = $88.76 × 45.5 days ............................................................................................ AGREEMENT B: Employer contribution, 401(K) plan (Monthly Wages × 5%) ............................................ Pension = $43.55 × 45.5 days ......................................................................................... Health = $88.76 × 45.5 days ............................................................................................ AGREEMENT A: Monthly total benefits ....................................................................................................... AGREEMENT A: Monthly total benefits × 9 months .................................................................................... AGREEMENT B: Monthly total benefits ....................................................................................................... AGREEMENT B: Monthly total benefits × 9 months .................................................................................... Pilots on designated waters $737.42 1,517.43 4,038.58 $1,106.13 1,517.43 4,038.58 825.60 1,981.53 4,038.58 1,238.40 1,981.53 4,038.58 = 6,293.42 = 6,662.13 = 56,641 = 59,959 = 6,845.71 = 7,258.51 = 61,611 = 65,327 TABLE 10—TOTAL WAGES AND BENEFITS Pilots on undesignated waters Pilots on designated waters $132,735 + 56,641 $199,103 + 59,959 AGREEMENT A: Total ..................................................................................................... = 189,376 = 259,062 AGREEMENT B: Wages ......................................................................................................... AGREEMENT B: Benefits ....................................................................................................... 148,608 + 61,611 222,912 + 65,327 AGREEMENT B: Total ..................................................................................................... mstockstill on DSKH9S0YB1PROD with RULES AGREEMENT A: Wages ......................................................................................................... AGREEMENT A: Benefits ....................................................................................................... = 210,219 = 288,239 Table 11 shows that approximately one third of U.S. Great Lakes shipping deadweight tonnage operates under Agreement A, with the remaining two thirds operating under Agreement B. TABLE 11—DEADWEIGHT TONNAGE BY AMOU AGREEMENT Company Agreement A American Steamship Company ............................................................................................................................... Mittal Steel USA, Inc. .............................................................................................................................................. ........................ ........................ VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:\FR\FM\23FER1.SGM 23FER1 Agreement B 815,600 38,826 7964 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations TABLE 11—DEADWEIGHT TONNAGE BY AMOU AGREEMENT—Continued Company Agreement A Agreement B Key Lakes, Inc. ........................................................................................................................................................ 361,385 ........................ Total tonnage, each agreement ....................................................................................................................... Percent tonnage, each agreement .......................................................................................................................... 361,385 361,385 ÷ 1,215,811 = 29.7238% 854,426 854,426 ÷ 1,215,811 = 70.2762% Table 12 applies the percentage of tonnage represented by each agreement to the wages and benefits provided by each agreement, to determine the projected target rate of compensation on a tonnage-weighted basis. TABLE 12—PROJECTED TARGET RATE OF COMPENSATION, WEIGHTED Undesignated waters AGREEMENT A: Total wages and benefits x percent tonnage ................................................................................................... $189,376 x 29.7238% = 56,290 Total weighted average wages and benefits = projected target rate of compensation ................................... pilotage service. Projected bridge hours are based on the vessel traffic that pilots are expected to serve. Based on historical data and information provided by pilots and industry, we project that vessel traffic in the 2010 navigation season, in all areas, will remain unchanged from the 2009 projections noted in Table 13 of the 2009 final rule. Table 13, below, shows the projected bridge hours needed for each area, and 259,062 x 29.7238% = 77,003 210,219 x 70.2762% = 147,734 56,290 + 147,734 = 204,024 AGREEMENT B: Total wages and benefits x percent tonnage ................................................................................................... (b) Determine number of pilots needed. Subject to adjustment by the Coast Guard Director of Great Lakes Pilotage to ensure uninterrupted service, we determine the number of pilots needed for ratemaking purposes in each area by dividing each area’s projected bridge hours, either by 1,000 (designated waters) or by 1,800 (undesignated waters). Bridge hours are the number of hours a pilot is aboard a vessel providing Designated waters 288,239 x 70.2762% = 202,563 77,003 + 202,563 = 279,566 the total number of pilots needed for ratemaking purposes after dividing those figures either by 1,000 or 1,800. As in 2008 and 2009, and for the same reasons, we rounded up to the next whole pilot except in Area 2 where we rounded up from 3.14 to 5, and in Area 4 where we rounded down from 4.07 to 4. TABLE 13—NUMBER OF PILOTS NEEDED Projected 2010 bridge hours Pilotage area mstockstill on DSKH9S0YB1PROD with RULES Area Area Area Area Area Area Area 1 2 4 5 6 7 8 .................................................................................................................................... .................................................................................................................................... .................................................................................................................................... .................................................................................................................................... .................................................................................................................................... .................................................................................................................................... .................................................................................................................................... (c) Determine the projected target pilot compensation for each area. The projection of new total target pilot compensation is determined separately VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 for each pilotage area by multiplying the number of pilots needed in each area (see Table 13) by the projected target rate of compensation (see Table 12) for PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 Divided by 1,000 (designated waters) or 1,800 (undesignated waters) 5,203 5,650 7,320 5,097 13,406 3,259 11,630 Pilots needed (total = 40) 1,000 1,800 1,800 1,000 1,800 1,000 1,800 pilots working in that area. Table 14 shows this calculation. E:\FR\FM\23FER1.SGM 23FER1 6 5 4 6 8 4 7 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations 7965 TABLE 14—PROJECTED TARGET PILOT COMPENSATION Pilots needed (total = 40) Pilotage area Multiplied by target rate of compensation Projected target pilot compensation Area 1 ...................................................................................................................................... Area 2 ...................................................................................................................................... 6 5 x $279,566 x 204,024 $1,677,397 1,020,120 Total, District One ............................................................................................................. Area 4 ...................................................................................................................................... Area 5 ...................................................................................................................................... 11 4 6 n/a x 204,024 x 279,566 2,697,517 816,096 1,677,397 Total, District Two ............................................................................................................. Area 6 ...................................................................................................................................... Area 7 ...................................................................................................................................... Area 8 ...................................................................................................................................... 10 8 4 7 n/a x 204,024 x 279,566 x 204,024 2,493,493 1,632,191 1,118,265 1,428,167 Total, District Three .......................................................................................................... 19 n/a 4,178,623 Step 4: Increase the projected pilot compensation in Step 3 by the expense multiplier in Step 2. This step yields a projected increase in operating costs necessary to support the increased projected pilot compensation. Table 15 shows this calculation. TABLE 15—PROJECTED OPERATING EXPENSE Projected target pilot compensation Pilotage area Multiplied by expense multiplier Projected operating expense Area 1 ...................................................................................................................................... Area 2 ...................................................................................................................................... $1,677,397 1,020,120 × 0.33927 × 0.57449 = $569,084 = 586,050 Total, District One ............................................................................................................. Area 4 ...................................................................................................................................... Area 5 ...................................................................................................................................... 2,697,517 816,096 1,677,397 n/a × 0.67135 × 0.50729 = 1,155,134 = 547,886 = 850,924 Total, District Two ............................................................................................................. Area 6 ...................................................................................................................................... Area 7 ...................................................................................................................................... Area 8 ...................................................................................................................................... 2,493,493 1,632,191 1,118,265 1,428,167 n/a × 0.53926 × 0.38049 × 0.48087 = 1,398,810 = 880,177 = 425,493 = 686,767 Total, District Three .......................................................................................................... 4,178,623 n/a = 1,992,438 Step 5: Adjust the result in Step 4, as required, for inflation or deflation, and calculate projected total economic cost. Based on data from the U.S. Department of Labor’s Bureau of Labor Statistics available at http://www.bls.gov/ xg_shells/ro5xg01.htm, we have multiplied the results in Step 4 by a 1.037 inflation factor, reflecting an average inflation rate of 3.7% between 2007 and 2008, the latest years for which data are available. Table 16 shows this calculation and the projected total economic cost. TABLE 16—PROJECTED TOTAL ECONOMIC COST A. Projected operating expense Pilotage area B. Increase, multiplied by inflation factor (= A × 1.037) C. Projected target pilot compensation D. Projected total economic cost (= B + C) $569,084 586,050 $590,140 607,733 $1,677,397 1,020,120 $2,267,537 1,627,853 Total, District One ..................................................................... Area 4 .............................................................................................. Area 5 .............................................................................................. mstockstill on DSKH9S0YB1PROD with RULES Area 1 .............................................................................................. Area 2 .............................................................................................. 1,155,134 547,886 850,924 1,197,874 568,158 882,408 2,697,517 816,096 1,677,397 3,895,390 1,384,253 2,559,805 Total, District Two ..................................................................... Area 6 .............................................................................................. Area 7 .............................................................................................. Area 8 .............................................................................................. 1,398,810 880,177 425,493 686,767 1,450,566 912,744 441,236 712,178 2,493,493 1,632,191 1,118,265 1,428,167 3,944,058 2,544,935 1,559,501 2,140,345 Total, District Three .................................................................. 1,992,438 2,066,158 4,178,623 6,244,781 VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 E:\FR\FM\23FER1.SGM 23FER1 7966 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations Step 6: Divide the result in Step 5 by projected bridge hours to determine total unit costs. Table 17 shows this calculation. TABLE 17—TOTAL UNIT COSTS A. Projected total economic cost Pilotage area B. Projected 2009 bridge hours Prospective (total) unit costs (A divided by B) Area 1 .................................................................................................................................... Area 2 .................................................................................................................................... $2,267,537 1,627,853 5,203 5,650 $435.81 288.12 Total, District One ........................................................................................................... Area 4 .................................................................................................................................... Area 5 .................................................................................................................................... 3,895,390 1,384,253 2,559,805 10,853 7,320 5,097 358.92 189.11 502.22 Total, District Two ........................................................................................................... Area 6 .................................................................................................................................... Area 7 .................................................................................................................................... Area 8 .................................................................................................................................... 3,944,058 2,544,935 1,559,501 2,140,345 12,417 13,406 3,259 11,630 317.63 189.84 478.52 184.04 Total, District Three ........................................................................................................ Overall .................................................................................................................................... 6,244,781 14,084,230 28,295 51,565 20.70 273.14 Step 7: Divide prospective unit costs (total unit costs) in Step 6 by the base period unit costs in Step 1. Table 18 shows this calculation, which expresses the percentage change between the total unit costs and the base unit costs. The results, for each Area, are identical with the percentage increases listed in Table 1. TABLE 18—PERCENTAGE CHANGE IN UNIT COSTS A. Prospective unit costs Pilotage area C. Percentage change from base (A divided by B; result expressed as percentage) B. Base period unit costs Area 1 .......................................................................................................................... Area 2 .......................................................................................................................... $435.81 288.12 $416.47 273.54 4.65 5.33 Total, District One ................................................................................................. Area 4 .......................................................................................................................... Area 5 .......................................................................................................................... 358.92 189.11 502.22 342.06 179.30 478.46 4.93 5.47 4.96 Total, District Two ................................................................................................. Area 6 .......................................................................................................................... Area 7 .......................................................................................................................... Area 8 .......................................................................................................................... 317.63 189.84 478.52 184.04 302.10 180.33 456.90 174.98 5.14 5.27 4.73 5.17 Total, District Three .............................................................................................. Overall .......................................................................................................................... 220.70 273.14 209.99 259.97 5.10 5.07 Step 8: Adjust the base period rates by the percentage change in unit costs in Step 7. Table 19 shows this calculation. TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS* A. Base period rate Pilotage mstockstill on DSKH9S0YB1PROD with RULES Area Area 1: ....................................................................................................... —Basic pilotage .................................................................................. —Each lock transited ......................................................................... —Harbor movage ............................................................................... —Minimum basic rate, St. Lawrence River ........................................ —Maximum rate, through trip ............................................................. Area 2: ....................................................................................................... —6-hr. period ...................................................................................... VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 PO 00000 Frm 00038 Fmt 4700 C. Increase in base rate (A × B%) D. Adjusted rate (A + C, rounded to nearest dollar) $0.78/km, 1.39/mi 17.44 57.11 38.09 167.20 $17.73/km, 31.38/mi 393 1,287 858 3,767 43.56 B. Percentage change in unit costs 861 (Multiplying Factor) 4.65 (1.0465) $16.95/km, 29.99/mi 375.47 1,229.41 820.04 3,599.58 5.33 (1.0533) 817.63 Sfmt 4700 E:\FR\FM\23FER1.SGM 23FER1 7967 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations TABLE 19—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS*—Continued C. Increase in base rate (A × B%) D. Adjusted rate (A + C, rounded to nearest dollar) 41.55 821 39.49 30.44 77.69 762 587 1,498 1,299.46 64.51 1,364 2,198.99 109.16 2,308 2,855.20 141.74 2,997 2,198.99 109.16 2,308 3,829.80 190.12 4,020 4,436.82 2,877.20 2,237.82 1,590.68 1,299.46 220.26 142.83 111.09 78.97 64.51 4,657 3,020 2,349 1,670 1,364 3,829.80 2,877.20 1,299.46 2,198.99 190.12 142.83 64.51 109.16 4,020 3,020 1,364 2,308 2,855.20 2,877.20 1,590.68 141.74 142.83 78.97 2,997 3,020 1,670 2,198.99 2,877.20 109.16 142.83 2,308 3,020 32.84 31.20 656 623 2,442.98 2,442.98 920.03 115.57 115.57 43.52 2,559 2,559 964 2,047.67 96.87 2,145 920.03 2,047.67 920.03 920.03 43.52 96.87 43.52 43.52 964 2,145 964 964 28.42 27.02 578 549 A. Base period rate Pilotage Area B. Percentage change in unit costs (Multiplying Factor) —Docking or undocking ..................................................................... Area 4: ....................................................................................................... —6 hr. period ...................................................................................... —Docking or undocking ..................................................................... —Any point on Niagara River below Black Rock Lock ...................... Area 5 between any point on or in: ........................................................... —Toledo or any point on Lake Erie W. of Southeast Shoal .............. —Toledo or any point on Lake Erie W. of Southeast Shoal & Southeast Shoal .............................................................................. —Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit River ......................................................................................... —Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit Pilot Boat ................................................................................. —Port Huron Change Point & Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) .................................................. —Port Huron Change Point & Toledo or any point on Lake Erie W. of Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) ....................................................................................... —Port Huron Change Point & Detroit River ....................................... —Port Huron Change Point & Detroit Pilot Boat ............................... —Port Huron Change Point & St. Clair River .................................... —St. Clair River .................................................................................. —St. Clair River & Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) ................................................................. —St. Clair River & Detroit River/Detroit Pilot Boat ............................ —Detroit, Windsor, or Detroit River .................................................... —Detroit, Windsor, or Detroit River & Southeast Shoal .................... —Detroit, Windsor, or Detroit River & Toledo or any point on Lake Erie W. of Southeast Shoal ............................................................ —Detroit, Windsor, or Detroit River & St. Clair River ........................ —Detroit Pilot Boat & Southeast Shoal .............................................. —Detroit Pilot Boat & Toledo or any point on Lake Erie W. of Southeast Shoal .............................................................................. —Detroit Pilot Boat & St. Clair River .................................................. Area 6: ....................................................................................................... —6 hr. period ...................................................................................... —Docking or undocking ..................................................................... Area 7 between any point on or in: ........................................................... —Gros Cap & De Tour ....................................................................... —Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & De Tour ....... —Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & Gros Cap .... —Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. Wharf & De Tour ................................................................... —Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. Wharf & Gros Cap ................................................................ —Sault Ste. Marie, MI & De Tour ...................................................... —Sault Ste. Marie, MI & Gros Cap .................................................... —Harbor movage ............................................................................... Area 8: ....................................................................................................... —6 hr. period ...................................................................................... —Docking or undocking ..................................................................... 779.92 5.47 (1.0547) 722.05 556.46 1,420.45 4.96 (1.0496) 5.27 (1.0527) 622.93 591.72 4.73 (1.0473) 5.17 (1.0517) 549.44 522.20 *Rates for ‘‘Cancellation, delay or interruption in rendering services (§ 401.420)’’ and ‘‘Basic Rates and charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal boarding point (§ 401.428)’’ are not reflected in this table but have been increased by 5.07% across all areas. mstockstill on DSKH9S0YB1PROD with RULES VI. Regulatory Analyses We developed this final rule after considering numerous statutes and executive orders related to rulemaking. Below, we summarize our analyses based on 13 of these statutes or executive orders. VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 A. Regulatory Planning and Review Executive Order 12866, ‘‘Regulatory Planning and Review,’’ 58 FR 51735, October 4, 1993, requires a determination whether a regulatory action is ‘‘significant’’ and therefore subject to review by the Office of Management and Budget (OMB) and subject to the requirements of the PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 Executive Order. This rulemaking is not significant under Executive Order 12866 and has not been reviewed by OMB. Public comments on the NPRM are summarized in Part IV of this publication. We received no public comments that would alter our assessment of the impacts discussed in the NPRM. We have adopted the E:\FR\FM\23FER1.SGM 23FER1 7968 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations assessment in the NPRM as final. See the ‘‘Regulatory Analyses’’ section of the NPRM for more details. A summary of the assessment follows. This final rule would implement a 5.07 percent overall rate adjustment for the Great Lakes system over the current rate as adjusted in the 2009 final rule. These adjustments to Great Lakes pilotage rates meet the requirements set forth in 46 CFR part 404 for similar compensation levels between Great Lakes pilots and industry. They also include adjustments for inflation and changes in association expenses to maintain these compensation levels. In general, we expect an increase in pilotage rates for a certain area to result in additional costs for shippers using pilotage services in that area, while a decrease would result in a cost reduction or savings for shippers in that area. The shippers affected by these rate adjustments are those owners and operators of domestic vessels operating on register (employed in the foreign trade) and owners and operators of foreign vessels on a route within the Great Lakes system. These owners and operators must have pilots or pilotage service as required by 46 U.S.C. 9302. There is no minimum tonnage limit or exemption for these vessels. However, the Coast Guard issued a policy position several years ago stating that the statute applies only to commercial vessels and not to recreational vessels. Owners and operators of other vessels that are not affected by this final rule, such as recreational boats and vessels only operating within the Great Lakes system, may elect to purchase pilotage services. However, this election is voluntary and does not affect the Coast Guard’s calculation of the rate increase and is not a part of our estimated national cost to shippers. We used 2006–2008 vessel arrival data from the Coast Guard’s Marine Information for Safety and Law Enforcement (MISLE) system to estimate the average annual number of vessels affected by the rate adjustment to be 208 vessels that journey into the Great Lakes system. These vessels entered the Great Lakes by transiting through or in part of at least one of the three pilotage districts before leaving the Great Lakes system. These vessels often make more than one distinct stop, docking, loading, and unloading at facilities in Great Lakes ports. Of the total trips for the 208 vessels, there were approximately 923 annual U.S. port arrivals before the vessels left the Great Lakes system. The impact of the rate adjustment to shippers is estimated from the district pilotage revenues. These revenues represent the direct and indirect costs (‘‘economic costs’’) that shippers must pay for pilotage services. The Coast Guard sets rates so that revenues equal the estimated cost of pilotage. We estimate the additional impact of the rate adjustment in this final rule to be the difference between the total projected revenue needed to cover costs based on the 2009 rate adjustment and the total projected revenue needed to cover costs in this final rule for 2010. Table 20 details additional costs by area and district. TABLE 20—RATE ADJUSTMENT AND ADDITIONAL IMPACT OF FINAL RULE [$U.S.; non-discounted] 1 Total projected expenses in 2009 Proposed rate change Total projected expenses in 2010 2 Additional revenue or cost of this rulemaking 3 Area 1 .................................................................................................. Area 2 .................................................................................................. $2,166,873 1,545,503 1.0465 1.0533 $2,267,537 1,627,853 $100,664 82,350 Total, District One ......................................................................... Area 4 .................................................................................................. Area 5 .................................................................................................. 3,712,376 1,312,463 2,438,725 ........................ 1.0547 1.0496 3,895,390 1,384,253 2,559,805 183,014 71,791 121,080 Total, District Two ......................................................................... Area 6 .................................................................................................. Area 7 .................................................................................................. Area 8 .................................................................................................. 3,751,188 2,417,474 1,489,052 2,035,052 ........................ 1.0527 1.0473 1.0517 3,944,058 2,544,935 1,559,501 2,140,345 192,870 127,461 70,449 105,293 Total, District Three ...................................................................... 5,941,578 ........................ 6,244,781 303,203 All Districts .................................................................................... 13,405,142 ........................ 14,084,230 679,088 1 Some values may not total due to rounding. changes are calculated for areas only. District totals reflect arithmetic totals and are for informational and discussion purposes. See discussion in final rule for further details. 3 Additional Revenue or Cost of this Rulemaking = ‘Total Projected Expenses in 2010’—‘Total Projected Expenses in 2009’. mstockstill on DSKH9S0YB1PROD with RULES 2 Rate After applying the rate change in this final rule, the resulting difference between the projected revenue in 2009 and the projected revenue in 2010 is the annual impact to shippers from this final rule. This figure will be equivalent to the total additional payments that shippers will incur for pilotage services from this rule. The impact of the rate adjustment in this final rule to shippers varies by area and district. The annual non-discounted costs of the rate adjustments in Districts 1, 2 and 3 would be approximately VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 $183,000 and $193,000, and $303,000. To calculate an exact cost per vessel is difficult because of the variation in vessel types, routes, port arrivals, commodity carriage, time of season, conditions during navigation, and preferences for the extent of pilotage services on designated and undesignated portions of the Great Lakes system. Some owners and operators would pay more and some would pay less depending on the distance and port arrivals of their vessels’ trips. However, the annual cost PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 reported above does capture all of the additional cost the shippers face as a result of the rate adjustment in this rule. As Table 20 indicates, all areas will experience an increased annual cost due to this final rule. The overall impact of the final rule would be an additional cost to shippers of just over $679,000 across all three districts, due primarily to an increase in benchmark contractual wages and benefits and an inflation adjustment. E:\FR\FM\23FER1.SGM 23FER1 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations mstockstill on DSKH9S0YB1PROD with RULES B. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601–612), we have considered whether this final rule 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 people. In the NPRM, we certified under 5 U.S.C. 605(b) that the proposed rule would not have a significant economic impact on a substantial number of small entities. We received no public comments that would alter our certification in the NPRM. We have found no additional data or information that would change our findings in the NPRM. We have adopted the certification in the NPRM for this final rule. See the ‘‘Small Entity’’ section of the NPRM for additional details. A summary of the NPRM analysis follows. We found entities affected by the rule to be classified under the North American Industry Classification System (NAICS) code subsector 483– Water Transportation, which includes one or all of the following 6-digit NAICS codes for freight transportation: 483111– Deep Sea Freight Transportation, 483113–Coastal and Great Lakes Freight Transportation, and 483211–Inland Water Freight Transportation. According to the Small Business Administration’s definition, a U.S. company with these NAICS codes and employing less than 500 employees is considered a small entity. We reviewed company size and ownership data from 2006–2008 Coast Guard MISLE data and business revenue and size data provided by Reference USA and Dun and Bradstreet. We were able to gather revenue and size data or link the entities to large shipping conglomerates for 22 of the 24 affected entities in the United States. We found that large, mostly foreign-owned, shipping conglomerates or their subsidiaries owned or operated all vessels engaged in foreign trade on the Great Lakes. We assume that new industry entrants will be comparable in ownership and size to these shippers. There are three U.S. entities affected by the rule that receive revenue from pilotage services. These are the three pilot associations that provide and manage pilotage services within the Great Lakes districts. Two of the associations operate as partnerships and one operates as a corporation. These associations are classified with the same VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 NAICS industry classification and small entity size standards described above, but they have far fewer than 500 employees: Approximately 65 total employees combined. We expect no adverse impact to these entities from this final rule since all associations receive enough revenue to balance the projected expenses associated with the projected number of bridge hours and pilots. Therefore, the Coast Guard has determined that this final rule would not have a significant economic impact on a substantial number of small entities under 5 U.S.C. 605(b). C. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we offer to assist small entities in understanding the final rule so that they could better evaluate its effects on them and participate in the rulemaking. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard. 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). 7969 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 effects of this rule elsewhere in this preamble. G. Taking of Private Property This rule would not affect 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 final rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520). This rule does not change the burden in the collection currently approved by the Office of Management and Budget (OMB) under OMB Control Number 1625–0086, Great Lakes Pilotage Methodology. 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. E. Federalism K. Energy Effects 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 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 D. Collection of Information PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 E:\FR\FM\23FER1.SGM 23FER1 7970 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. L. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. M. Environment We have analyzed this rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321–4370f), and have concluded that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded under section 2.B.2, figure 2– 1, paragraph (34)(a) of the Instruction. 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. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES. List of Subjects in 46 CFR Part 401 1. The authority citation for part 401 continues to read as follows: Authority: 46 U.S.C. 2104(a), 6101, 7701, 8105, 9303, 9304; Department of Homeland Security Delegation No. 0170.1; 46 CFR 401.105 also issued under the authority of 44 U.S.C. 3507. 2. In § 401.405, revise paragraphs (a) and (b), including the footnote to Table (a), to read as follows: ■ § 401.405 Basic rates and charges on the St. Lawrence River and Lake Ontario. * § 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): Service Six-Hour Period .... Docking or Undocking ......... Any Point on the Niagara River below the Black Rock Lock ......... Lake Erie (East of Southeast Shoal) Buffalo $762 $762 587 587 N/A 1,498 Southeast Shoal $2,308 $1,364 1 4,020 1 4,657 1 4,020 N/A 2,997 2,308 2,308 1,670 Detroit River $2,997 3,020 3,020 1,364 N/A Detroit Pilot Boat St. Clair River $2,308 2,349 3,020 N/A N/A pilots are not changed at the Detroit Pilot Boat. * * * * 4. In § 401.410, revise paragraphs (a), (b), and (c) to read as follows: ■ mstockstill on DSKH9S0YB1PROD with RULES * * * * 3. In § 401.407, revise paragraphs (a) and (b), including the footnote to Table (b), to read as follows: Toledo or any Point on Lake Erie west of Southeast Shoal * § 401.410 Basic rates and charges on Lakes Huron, Michigan, and Superior, and the St. Mary’s River. * $861 821 (b) Area 5 (Designated Waters): Toledo or any port on Lake Erie west of Southeast Shoal ............................... Port Huron Change Point .................................................................................. St. Clair River ..................................................................................................... Detroit or Windsor or the Detroit River .............................................................. Detroit Pilot Boat ................................................................................................ * Lake Ontario ■ ■ Any point on or in 1 When 1 The minimum basic rate for assignment of a pilot in the St. Lawrence River is $858, and the maximum basic rate for a through trip is $3,767. * PART 401—GREAT LAKES PILOTAGE REGULATIONS * Each Lock Transited Harbor Movage ......... $17.73 per kilometer or $31.38 per mile 1 393 1 1287 1 Six-Hour Period .................... Docking or Undocking .......... For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 401 as follows: * Basic Pilotage ........... St. Lawrence River Service ■ * Service (b) Area 2 (Undesignated Waters): Administrative practice and procedure, Great Lakes, Navigation (water), Penalties, Reporting and recordkeeping requirements, Seamen. * (a) Area 1 (Designated Waters): * VerDate Nov<24>2008 * * 16:17 Feb 22, 2010 Jkt 220001 (b) Area 7 (Designated Waters): (a) Area 6 (Undesignated Waters): Lakes Huron and Michigan Service Six-Hour Period .................... Docking or Undocking .......... PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 $656 623 E:\FR\FM\23FER1.SGM 23FER1 N/A 1,670 1,364 3,020 3,020 Federal Register / Vol. 75, No. 35 / Tuesday, February 23, 2010 / Rules and Regulations Area De Tour Gros Cap ............................................................................................................................................................. Algoma Steel Corporation Wharf at Sault Ste. Marie Ontario ............................................................................ Any point in Sault Ste. Marie, Ontario, except the Algoma Steel Corporation Wharf ........................................ Sault Ste. Marie, MI ............................................................................................................................................. Harbor Movage .................................................................................................................................................... Proposed Rulemaking in this proceeding, to eliminate that portion of Service Lake Superior the Commission’s rules governing International Fixed Public Six-Hour Period .................. $578 Radiocommunication Services (IFPRS). Docking or Undocking ........ 549 The elimination of these rules is to facilitate coordination of facilities and * * * * * services in the C-band (3700–4200 MHz and 5926–6425 MHz). § 401.420 [Amended] DATES: Effective March 25, 2010. ■ 5. In § 401.420— FOR FURTHER INFORMATION CONTACT: ■ a. In paragraph (a), remove the number ‘‘$113’’ and add, in its place, the Steven Spaeth (202) 418–1539, number ‘‘$119’’; and remove the number International Bureau, Federal Communications Commission, ‘‘$1,777’’ and add, in its place, the Washington, DC 20554. number ‘‘$1,867’’. ■ b. In paragraph (b), remove the SUPPLEMENTARY INFORMATION: This is a number ‘‘$113’’ and add, in its place, the summary of the Commission’s Report number ‘‘$119’’; and remove the number and Order in IB Docket 05–216, adopted ‘‘$1,777’’ and add, in its place, the January 6, 2010, and released January number ‘‘$1,867’’. 14, 2010. The full text of the Report and ■ c. In paragraph (c)(1), remove the Order is available for public inspection number ‘‘$671’’ and add, in its place, the and copying during regular business number ‘‘$705’’; in paragraph (c)(3), hours at the FCC Reference Information remove the number ‘‘$113’’ and add, in Center, Portals II, 445 12th Street, SW., its place, the number ‘‘$119’’; and, also Room CY–A257, Washington, DC 20054. in paragraph (c)(3), remove the number This document may also be purchased ‘‘$1,777’’ and add, in its place, the from the Commission’s duplicating number ‘‘$1,867’’. contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room § 401.428 [Amended] CY–B402, Washington, DC 20554, ■ 6. In § 401.428, remove the number telephone 202–488–5300, facsimile ‘‘$684’’ and add, in its place, the number 202–488–5563, or via e-mail ‘‘$719’’. FCC@BCPIWEB.com. It is also available on the Commission’s Web site at Dated: February 4, 2010. http://www.fcc.gov. Kevin S. Cook, Paperwork Reduction Act Analysis: Rear Admiral, U.S. Coast Guard, Director of The actions taken in the Report and Prevention Policy. Order have been analyzed with respect [FR Doc. 2010–3396 Filed 2–19–10; 11:15 am] to the Paperwork Reduction Act of 1995 BILLING CODE 4910–15–P (PRA), Public Law 104–13 (44 U.S.C. 3501–3520), and found to impose no new or modified requirements. FEDERAL COMMUNICATIONS Regulatory Flexibility Analysis COMMISSION Certification: The Regulatory Flexibility Act of 47 CFR Parts 0, 2, and 23 1980, as amended, 5 USC 601 et seq., [IB Docket No. 05–216; FCC 10–7] (RFA) requires that a regulatory flexibility analysis be prepared for Elimination of the Commission’s Rules rulemaking proceedings, unless the Governing International Fixed Public agency certifies that ‘‘the rule will not Radiocommunication Services have a significant economic impact on a substantial number of small entities.’’ AGENCY: Federal Communications The RFA generally defines ‘‘small Commission. entity’’ as having the same meaning as ACTION: Final rule. the terms ‘‘small business,’’ ‘‘small SUMMARY: In this document, the Federal organization,’’ and ‘‘small governmental Communications Commission (FCC) jurisdiction.’’ In addition, the term adopts the proposal in the Notice of ‘‘small business’’ has the same meaning mstockstill on DSKH9S0YB1PROD with RULES (c) Area 8 (Undesignated Waters): VerDate Nov<24>2008 16:17 Feb 22, 2010 Jkt 220001 PO 00000 Frm 00043 Fmt 4700 Sfmt 4700 $2,559 2,559 2,145 2,145 N/A Gros Cap N/A $964 964 964 N/A 7971 Any harbor N/A N/A N/A N/A $964 as the term ‘‘small business concern’’ under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). In the Report and Order, the Commission decides to eliminate the part 23 rules applicable to International Fixed Public Radio Service (IFPRS) licensees, because there are no IFPRS licensees in operation. Therefore, we certify that the actions in this Report and Order will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the Report and Order, including a copy of this certification, in a report to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 USC 801(a)(1)(A). In addition, the Report and Order and this certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register. See 5 USC 605(b). Summary of Report and Order In the Report and Order, the Commission observed that there are no licensees currently offering IFPRS, and there is no basis in the record for assuming that anyone will apply for a license to operate facilities to provide this service in the future. Accordingly, the Commission found that there is no need for part 23, and removed it from the Commission’s rules. In addition, the Commission found that issues related to the regulation of IFPRS and the transition from part 23 to part 101 raised in the Notice of Proposed Rulemaking in this proceeding, 70 FR 56620 (Sept. 20, 2005), are moot. Finally, the Commission eliminated the allocations for IFPRS in the Table of Frequency Allocations, 47 CFR 2.106, in order to simplify the planning and coordination of facilities in services that have a coprimary allocation in the C-band. Ordering Clauses Accordingly, it is ordered, pursuant to sections 4(i), 7(a), 11, 303(c), 303(f), 303(g), and 303(r) of the E:\FR\FM\23FER1.SGM 23FER1

Agencies

[Federal Register Volume 75, Number 35 (Tuesday, February 23, 2010)]
[Rules and Regulations]
[Pages 7958-7971]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-3396]


-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 401

[Docket No. USCG-2009-0883]
RIN 1625-AB39


2010 Rates for Pilotage on the Great Lakes

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY:  The Coast Guard is increasing the rates for pilotage service 
on the Great Lakes by an average of 5.07% to generate sufficient 
revenue to cover allowable expenses, target pilot compensation, and 
return on investment. This increase reflects an August 1, 2010, 
increase in benchmark contractual wages and benefits and an adjustment 
for inflation. This rulemaking promotes the Coast Guard strategic goal 
of maritime safety.

DATES: This final rule is effective August 1, 2010.

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-2009-0883 and are available for inspection or 
copying at the 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, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays. You may also find this 
docket on the Internet by going to http://www.regulations.gov, 
inserting USCG-2009-0883 in the ``Keyword'' box, and then clicking 
``Search.''

FOR FURTHER INFORMATION CONTACT: For questions on this final 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-
372-1909, or e-mail Paul.M.Wasserman@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.

Table of Contents for Preamble

I. Abbreviations
II. Regulatory History
III. Background
IV. Discussion of Comments and Changes
V. Discussion of the Final Rule
    A. Summary
    B. Calculating the Rate Adjustment
VI. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Abbreviations

AMOU American Maritime Officer Union
GLPAC Great Lakes Pilotage Advisory Committee
MISLE Coast Guard Marine Inspection, Safety, and Law Enforcement 
system
NAICS North American Industry Classification System
NPRM Notice of Proposed Rulemaking
NTTAA National Technology Transfer and Advancement Act
OMB Office of Management and Budget

II. Regulatory History

    On October 30, 2009, we published a notice of proposed rulemaking 
entitled Great Lakes Pilotage Rates--2010 Annual Review and Adjustment 
in the Federal Register (NPRM, 74 FR 56153). We received five comments 
on the proposed rule. No public meeting was requested and none was 
held.

III. Background

    We published a notice of proposed rulemaking on October 30, 2009 
(NPRM, 74 FR 56153). The NPRM proposed an average 5.07% rate increase.
    This rulemaking increases Great Lakes pilotage rates in accord with 
the methodology contained in Coast Guard regulations in 46 CFR parts 
401-404. Our regulations implement the Great

[[Page 7959]]

Lakes Pilotage Act of 1960 (``the Act''), 46 U.S.C. Chapter 93, which 
requires foreign-flag vessels engaged in foreign trade to use U.S. 
registered pilots while transiting the St. Lawrence Seaway and the 
Great Lakes system. The Act also requires the Secretary of Homeland 
Security to ``prescribe by regulation rates and charges for pilotage 
services, giving consideration to the public interest and the costs of 
providing the services,'' and requires annual rate reviews to be 
completed by March 1 of each year, with a ``full ratemaking'' to 
establish new base rates at least once every five years. 46 U.S.C. 
9303(f).
    The U.S. waters of the Great Lakes and the St. Lawrence Seaway are 
divided into three pilotage districts. Pilotage in each district is 
provided by an association certified by the Coast Guard Director of 
Great Lakes Pilotage to operate a pilotage pool. It is important to 
note that, while we set rates, we do not control the actual number of 
pilots an association maintains, so long as the association is able to 
provide safe, efficient, and reliable pilotage service, nor do we 
control the actual compensation that pilots receive. This is determined 
by each of the three District associations, which use different 
compensation practices.
    District One, consisting of Areas 1 and 2, includes all U.S. waters 
of the St. Lawrence River and Lake Ontario. District Two, consisting of 
Areas 4 and 5, includes all U.S. waters of Lake Erie, the Detroit 
River, Lake St. Clair, and the St. Clair River. District Three, 
consisting of Areas 6, 7, and 8, includes all U.S. waters of the St. 
Mary's River, Sault Ste. Marie Locks, and Lakes Michigan, Huron, and 
Superior. Area 3 is the Welland Canal, which is serviced exclusively by 
the Canadian Great Lakes Pilotage Authority and, accordingly, is not 
included in the U.S. rate structure. Areas 1, 5, and 7 have been 
designated by Presidential Proclamation, pursuant to the Great Lakes 
Pilotage Act of 1960, to be waters in which pilots must at all times be 
fully engaged in the navigation of vessels in their charge. Areas 2, 4, 
6, and 8 have not been so designated because they are open bodies of 
water. Under the Act, pilots assigned to vessels in these areas are 
only required to ``be on board and available to direct the navigation 
of the vessel at the discretion of and subject to the customary 
authority of the master.'' 46 U.S.C. 9302(a)(1)(B).
    Our pilotage regulations implement the Act's requirement for annual 
reviews of pilotage rates and a full ratemaking at least once every 
five years. 46 CFR 404.1. To assist in calculating pilotage rates, the 
regulations require pilotage associations to submit annual financial 
statements prepared by certified public accounting firms. In addition, 
every fifth year, in connection with the full ratemaking, we contract 
with an independent accounting firm to conduct a full audit of the 
accounts and records of the pilotage associations and prepare and 
submit financial reports relevant to the ratemaking process. In those 
years when a full ratemaking is conducted, we generate the pilotage 
rates using Appendix A to 46 CFR part 404. The last Appendix A review 
was concluded in 2006 (71 FR 16501, Apr. 3, 2006). Between the five-
year full ratemaking intervals, we annually review the pilotage rates 
using Appendix C to part 404, and adjust rates when deemed appropriate. 
We conducted Appendix C reviews in 2007, 2008 and 2009 and increased 
rates in each year. The 2009 final rule was published on July 21, 2009 
(74 FR 138), and took effect on August 1, 2009. We define the terms and 
formulas used in Appendix A and Appendix C in Appendix B to part 404.
    This final rule concludes the annual Appendix C rate review for 
2010, and increases rates by an average of 5.07% over the rates that 
took effect August 1, 2009.

IV. Discussion of Comments and Changes

    Five comments were submitted during the NPRM public comment period.
    Ratemaking methodology. One commenter recommended that we suspend 
any further action on this rulemaking until full consideration can be 
given to comments received in response to our July 21, 2009, request 
for public comments (``Great Lakes Pilotage Ratemaking Methodology,'' 
74 FR 35838). In July, we requested comments on the adequacy of our 
current ratemaking methodology in light of the realities of Great Lakes 
commercial shipping and the need to fairly balance competing 
considerations. We noted that any comments would be referred to the 
Great Lakes Pilotage Advisory Committee (GLPAC), a group created by the 
Great Lakes Pilotage Act to advise us on significant issues relating to 
Great Lakes pilotage. GLPAC will review our methodology and the 
comments received in response to our notice, and may recommend changes. 
If we accept their recommendations, any changes would require 
regulatory action. GLPAC has just begun reviewing comments. As yet 
there is no timeline for any GLPAC recommendations and no rulemaking 
underway to modify the methodology. Therefore, we cannot complete the 
``full consideration'' mentioned by the commenter before March 1, 2010, 
the Act's deadline for establishing any annual rate adjustment for 
2010. The Act provides no exception to the March 1 deadline for 
consideration of possible changes to the existing rate review process. 
Thus, we cannot suspend work on this rulemaking without violating the 
law.
    Another commenter reiterated comments the commenter made during the 
2007 and 2009 rate reviews. In 2007, we explained our reasons for 
disagreeing with this commenter's analysis of the ``150% factor'' for 
designated waters; 2007 interim rule, 72 FR 8115 at 8117 (Feb. 23, 
2007) and 2007 Final Rule, 72 FR 53158 at 53159 (July 18, 2007). In the 
2009 final rule, we explained our reasons for disagreeing with this 
Commenter on the ``Riker Report'' on bridge hour calculations; 74 FR 
35812 at 35814. As no new substantive information has been added, we 
will not repeat those earlier explanations. The commenter's suggestion 
that we amend the vessel weighting factor table in 46 CFR 401.400 is 
beyond the scope of this ratemaking.
    Two commenters reiterated past comments about our use of rounding 
in bridge hour calculations, without adding new information. We fully 
discussed our use of rounding in the 2009 final rule, specifically with 
reference to Area 4, which is of particular concern to one of these 
commenters, and we will not repeat that discussion; 74 FR 35812 at 
35813. The Area 4 calculations have not changed since the 2009 final 
rule.
    A commenter said that our ratemaking is arbitrary and capricious 
because we count delay and detention in calculating bridge hours for 
Areas 6, 7, and 8, but not in Areas 4 and 5. No information was 
provided to substantiate this claim, which runs counter to our 
discussion of bridge hour calculations in ratemaking documents over 
many years, and which repeats an allegation made in 2007 and refuted in 
that year's interim rule: ``The Coast Guard has never considered delay, 
detention, or travel time to be included in the definition of bridge 
hours and has never knowingly included these items in its bridge hour 
computations''; 72 FR 8115 at 8117, Feb. 23, 2007. Coast Guard did not 
consider delay, detention, or travel time in its bridge hour 
computations in this final rule.
    Effective date. Another commenter stated that the Act requires any 
2010 rate adjustment to take effect by March 1, 2010. The comment 
acknowledged that this is not the Coast Guard's interpretation of the 
Act. In our view, 46

[[Page 7960]]

U.S.C. 9303(f) only requires us to publish a rule announcing the 2010 
rate adjustment by March 1, 2010; the rule's effective date should be 
delayed until the event triggering the need for adjustment actually 
takes place. In this case, the triggering event will be the benchmark 
contract changes that do not take effect until August 1, 2010. This 
commenter also said that, even under the Coast Guard's interpretation 
of the Act, some relevant rate factors have already changed. The 
commenter mentions bridge hour projections (discussed subsequently) and 
cost of living (which is determined using 2007 and 2008 data). However, 
the inflation factor is merely one of three components that make up 
projected total economic costs and has a minimal effect on the rate 
calculation. We decline to adjust the rates to reflect only minimal 
changes.
    Supporting data. One commenter found it impossible to verify the 
calculations made in our NPRM. He mentioned the absence from the docket 
of two benchmark contracts and the absence of supporting documentation 
for the inflation factor used in our calculations. The two contracts 
were placed in the docket maintained by the Docket Management Facility 
on November 25, 2009, prior to the close of the public comment period. 
The NPRM, 74 FR 56153 at 56156, identified the parties to both 
contracts and accurately represented their terms. This enabled the 
commenter to verify the accuracy of our data, prior to November 25, 
2009, by contacting any of the contractual parties. The data supporting 
the inflation factor did not appear in the docket maintained by the 
Docket Management Facility until December 2, 2009, after the close of 
the public comment period. However, the NPRM, 74 FR 56153 at 56159, 
identified Bureau of Labor Statistics (BLS) Midwest consumer price data 
as the source of our calculations, and this data was at all times 
available from the BLS Web site, http://www.bls.gov.
    This same commenter also said that projected bridge hours for 2010 
should be based on actual bridge hours for 2009 to date, along with 
results of consultations with stakeholders, including the shipping 
industry. Another commenter asked why we did not use 2009 actual hours. 
As stated in the NPRM, 74 FR 56153 at 56158, our 2010 projections are 
based on historical data (by which we mean actual figures for complete 
past shipping seasons) and information provided both by pilots and 
industry. To meet the Act's March 1 deadline for completion of each 
year's rate review, with a final rule that meets all applicable 
requirements of the Federal regulatory process, Coast Guard data 
collection for the following year's review typically begins in the 
early spring of the preceding year. Given that reality, it is 
impracticable for the Coast Guard to base NPRM projections for the next 
year on actual results from the preceding year. The commenter's 
estimate of a 25% drop in shipping traffic between 2008 and 2009 does 
not provide us with sufficiently detailed data on which to base a 
revision of our 2010 projections in this final rule. We do expect 
verified and complete 2009 actual data to inform our 2011 ratemaking.
    District One pilot boat. Another commenter expressed a desire to 
have District One's purchase of a new pilot boat reflected in the 2010 
rate adjustment, or as soon as possible. This comment is beyond the 
scope of this ratemaking, which is being conducted pursuant to our 
Appendix C methodology, because it asks for action that can be taken 
only under an Appendix A full ratemaking. The next Appendix A review is 
already in progress. It will be based on a 2008 audit of pilot 
association expenses. This could present a timing problem from District 
One's perspective, because their boat expenses did not begin until 2009 
and therefore would not be captured in the 2008 audit data. Presumably 
to address that timing problem, in March 2009, District One petitioned 
the Coast Guard for a ``modified'' Appendix A review that could focus 
specifically on the pilot boat purchase. We could not grant that 
petition because there are no provisions for ``modifying'' Appendix A 
without conducting a rulemaking to make the modifications. However, we 
are mindful of the importance of this issue for District One, and we 
will ask GLPAC for its recommendations on how best to proceed, as part 
of GLPAC's consideration of public comments received in response to our 
July 2009 ratemaking methodology notice.
    Miscellaneous. A commenter asked us to refer to ``U.S. registered 
pilots'' instead of ``federally registered Great Lakes pilots'' and we 
have done so.

V. Discussion of the Final Rule

A. Summary

    We are increasing pilotage rates in accordance with the methodology 
outlined in Appendix C to 46 CFR part 404, by increasing rates an 
average 5.07% over the 2009 final rule, effective August 1, 2010. The 
new rates are unchanged from what we proposed in the NPRM. Table 1 
shows the new rates for each Area.

                     Table 1--2010 Area Rate Changes
------------------------------------------------------------------------
                                                   Then the proposed
     If pilotage service is required in:          percentage increases
                                               over the current rate is:
------------------------------------------------------------------------
Area 1 (Designated waters)...................                       4.65
Area 2 (Undesignated waters).................                       5.33
Area 4 (Undesignated waters).................                       5.47
Area 5 (Designated waters)...................                       4.96
Area 6 (Undesignated waters).................                       5.27
Area 7 (Designated waters)...................                       4.73
Area 8 (Undesignated waters).................                       5.17
Overall Rate Change (percentage change in                           5.07
 overall prospective unit costs/base unit
 costs; see Table 18)........................
------------------------------------------------------------------------

    Rates for cancellation, delay, or interruption in rendering 
services (46 CFR 401.420), and basic rates and charges for carrying a 
U.S. pilot beyond the normal change point, or for boarding at other 
than the normal boarding point (46 CFR 401.428), have been increased by 
5.07% in all Areas.

B. Calculating the Rate Adjustment

    The Appendix C ratemaking calculation involves eight steps:
    Step 1: Calculate the total economic costs for the base period 
(i.e. pilot compensation expense plus all other recognized expenses 
plus the return element) and divide by the total bridge

[[Page 7961]]

hours used in setting the base period rates;
    Step 2: Calculate the ``expense multiplier,'' the ratio of other 
expenses and the return element to pilot compensation for the base 
period;
    Step 3: Calculate an annual ``projection of target pilot 
compensation'' using the same procedures found in Step 2 of Appendix A;
    Step 4: Increase the projected pilot compensation in Step 3 by the 
expense multiplier in Step 2;
    Step 5: Adjust the result in Step 4, as required, for inflation or 
deflation;
    Step 6: Divide the result in Step 5 by projected bridge hours to 
determine total unit costs;
    Step 7: Divide prospective unit costs in Step 6 by the base period 
unit costs in Step 1; and
    Step 8: Adjust the base period rates by the percentage changes in 
unit cost in Step 7.
    The base data used to calculate each of the eight steps comes from 
the 2009 Appendix C review. The Coast Guard also used the most recent 
union contracts between the American Maritime Officers Union (AMOU) and 
vessel owners and operators on the Great Lakes to determine target 
pilot compensation. Bridge hour projections for the 2010 season have 
been obtained from historical data, pilots, and industry. All documents 
and records used in this rate calculation have been placed in the 
public docket for this rulemaking and are available for review at the 
addresses listed under ADDRESSES.
    Some values may not total exactly due to format rounding for 
presentation in charts and explanations in this section. The rounding 
does not affect the integrity or truncate the real value of all 
calculations in the ratemaking methodology described below. Also, 
please note that in previous rulemakings we calculated an expense 
multiplier for each District. This was unnecessary because Appendix C 
calculations are based on area figures, not district figures. District 
figures, where they are shown in the following tables, now reflect only 
the arithmetical totals for each of the district's areas.
    Step 1: Calculate the total economic cost for the base period. In 
this step, for each area, we add the total cost of target pilot 
compensation, all other recognized expenses, and the return element 
(net income plus interest). We divide this sum by the total bridge 
hours for each area. The result is the cost in each area of providing 
pilotage service per bridge hour for the base period. Tables 2 through 
4 summarize the Step 1 calculations:

                   Table 2--Total Economic Cost for Base Period (2009), Areas in District One
----------------------------------------------------------------------------------------------------------------
                                                               Area 1 St.        Area 2 Lake    Total * District
                                                             Lawrence River        Ontario             One
----------------------------------------------------------------------------------------------------------------
Base operating expense (less base return element).........          $538,155          $547,489        $1,085,644
Base target pilot compensation............................      + $1,617,955        + $981,589      + $2,599,544
Base return element.......................................         + $10,763         + $16,425         + $27,188
                                                           -----------------------------------------------------
    Subtotal \*\..........................................      = $2,166,873      = $1,545,503      = $3,712,376
Base bridge hours.........................................           / 5,203           / 5,650          / 10,853
Base cost per bridge hour.................................         = $416.47         = $273.54         = $342.06
----------------------------------------------------------------------------------------------------------------
* As explained in the text preceding Step 1, District totals have been expressed differently from previous
  rulemakings. This accounts for slight differences between the District totals shown in Table 16 of the 2009
  final rule and the District totals shown in this table.


                   Table 3--Total Economic Cost for Base Period (2009), Areas in District Two
----------------------------------------------------------------------------------------------------------------
                                                                              Area 5 Southeast
                                                            Area 4 Lake Erie    Shoal to Port   Total * District
                                                                                  Huron, MI            Two
----------------------------------------------------------------------------------------------------------------
Base operating expense....................................          $502,087          $789,202        $1,291,289
Base target pilot compensation............................        + $785,271      + $1,617,955      + $2,403,226
Base return element.......................................         + $25,104         + $31,568         + $56,672
                                                           -----------------------------------------------------
    Subtotal..............................................      = $1,312,463      = $2,438,725      = $3,751,188
Base bridge hours.........................................           / 7,320           / 5,097          / 12,417
Base cost per bridge hour.................................         = $179.30         = $478.46         = $302.10
----------------------------------------------------------------------------------------------------------------
* See footnote to Table 2.


                  Table 4--Total Economic Cost for Base Period (2009), Areas in District Three
----------------------------------------------------------------------------------------------------------------
                                            Area 6 Lakes
                                              Huron and        Area 7 St.        Area 8 Lake    Total * District
                                              Michigan        Mary's River        Superior            Three
----------------------------------------------------------------------------------------------------------------
Base operating expense..................          $814,358          $398,461          $641,580        $1,854,399
Base target pilot compensation..........      + $1,570,542      + $1,078,637      + $1,374,224      + $4,023,403
Base return element.....................         + $32,574         + $11,954         + $19,247         + $63,776
                                         -----------------------------------------------------------------------
    Subtotal............................      = $2,417,474      = $1,489,052      = $2,035,052      = $5,941,578
Base bridge hours.......................          / 13,406           / 3,259          / 11,630          / 28,295
Base cost per bridge hour...............         = $180.33         = $456.90         = $174.98         = $209.99
----------------------------------------------------------------------------------------------------------------
* See footnote to Table 2.


[[Page 7962]]

    Step 2. Calculate the expense multiplier. In this step, for each 
Area, we add the base operating expense and the base return element. 
Then, we divide the sum by the base target pilot compensation to get 
the expense multiplier for each area. Tables 5 through 7 show the Step 
2 calculations.

                               Table 5--Expense Multiplier, Areas in District One
----------------------------------------------------------------------------------------------------------------
                                               Area 1 St.        Area 2 Lake
                                             Lawrence River        Ontario             Total District One
----------------------------------------------------------------------------------------------------------------
Base operating expense....................          $538,155          $547,489  $1,085,644
Base return element.......................         + $10,763         + $16,425  + $27,188
                                           ---------------------------------------------------------------------
    Subtotal..............................        = $548,918        = $563,914  = $1,112,832
Base target pilot compensation............      / $1,617,955        / $981,589  $2,599,544
Expense multiplier........................           0.33927           0.57449  Not applicable
                                                                                (n/a)
----------------------------------------------------------------------------------------------------------------


                               Table 6--Expense Multiplier, Areas in District Two
----------------------------------------------------------------------------------------------------------------
                                                                              Area 5 Southeast
                                                            Area 4 Lake Erie    Shoal to Port    Total District
                                                                                  Huron, MI            Two
----------------------------------------------------------------------------------------------------------------
Base operating expense....................................          $502,087          $789,202        $1,291,289
Base return element.......................................         + $25,104         + $31,568         + $56,672
                                                           -----------------------------------------------------
    Subtotal..............................................        = $527,192        = $820,770      = $1,347,962
Base target pilot compensation............................        / $785,271      / $1,617,955        $2,403,226
Expense multiplier........................................           0.67135           0.50729               n/a
----------------------------------------------------------------------------------------------------------------


                              Table 7--Expense Multiplier, Areas in District Three
----------------------------------------------------------------------------------------------------------------
                                            Area 6 Lakes
                                              Huron and        Area 7 St.        Area 8 Lake     Total District
                                              Michigan        Mary's River        Superior            Three
----------------------------------------------------------------------------------------------------------------
Base operating Expense..................          $814,358          $398,461          $641,580        $1,854,399
Base return element.....................         + $32,574         + $11,954         + $19,247         + $63,776
                                         -----------------------------------------------------------------------
    Subtotal............................        = $846,932        = $410,415        = $660,828      = $1,918,175
Base target pilot compensation..........      / $1,570,542      / $1,078,637      / $1,374,224        $4,023,403
Expense multiplier......................           0.53926           0.38049           0.48087               n/a
----------------------------------------------------------------------------------------------------------------

    Step 3. Calculate annual projection of target pilot compensation. 
In this step, we determine the new target rate of compensation and the 
new number of pilots needed in each pilotage area, to determine the new 
target pilot compensation for each area.
    (a) Determine new target rate of compensation. Target pilot 
compensation is based on the average annual compensation of first mates 
and masters on U.S. Great Lakes vessels. For pilots in undesignated 
waters, we approximate the first mates' compensation and, in designated 
waters, we approximate the master's compensation (first mates' wages 
multiplied by 150% plus benefits). To determine first mates' and 
masters' average annual compensation, we use data from the most recent 
AMOU contracts with the U.S. companies engaged in Great Lakes shipping. 
Where different AMOU agreements apply to different companies, we 
apportion the compensation provided by each agreement according to the 
percentage of tonnage represented by companies under each agreement.
    As of May 2009, there are two current AMOU contracts, which we 
designate Agreement A and Agreement B. Agreement A applies to vessels 
operated by Key Lakes, Inc., and Agreement B applies to all vessels 
operated by American Steamship Co. and Mittal Steel USA, Inc.
    Both Agreement A and Agreement B provide for a 3% wage increase 
effective August 1, 2010. Under Agreement A, the daily wage rate will 
be increased from $262.73 to $270.61. Under Agreement B, the daily wage 
rate will be increased from $323.86 to $333.57.
    To calculate monthly wages, we apply Agreement A and Agreement B 
monthly multipliers of 54.5 and 49.5, respectively, to the daily rate. 
Agreement A's 54.5 multiplier represents 30.5 average working days, 
15.5 vacation days, 4 days for four weekends, 3 bonus days, and 1.5 
holidays. Agreement B's 49.5 multiplier represents 30.5 average working 
days, 16 vacation days, and 3 bonus days.
    To calculate average annual compensation, we multiply monthly 
figures by 9 months, the length of the Great Lakes shipping season.
    Table 8 shows new wage calculations based on Agreements A and B 
effective August 1, 2010.

[[Page 7963]]



                                                 Table 8--Wages
----------------------------------------------------------------------------------------------------------------
                                                                     Pilots on
                       Monthly component                            undesignated     Pilots on designated waters
                                                                       waters           (undesignated x 150%)
----------------------------------------------------------------------------------------------------------------
AGREEMENT A:
    $270.61 daily rate x 54.5 days.............................            $14,748                       $22,123
AGREEMENT A:
    Monthly total x 9 months = total wages.....................            132,735                       199,103
AGREEMENT B:
    $333.57 daily rate x 49.5 days.............................             16,512                        24,768
AGREEMENT B:
    Monthly total x 9 months = total wages.....................            148,608                       222,912
----------------------------------------------------------------------------------------------------------------

    Both Agreements A and B include a health benefits contribution rate 
of $88.76 effective August 1, 2010. Agreement A includes a pension plan 
contribution rate of $33.35 per man-day. Agreement B includes a pension 
plan contribution rate of $43.55 per man-day. Both Agreements A and B 
provide a 401K employer matching rate, 5% of the wage rate. Neither 
Agreement A nor Agreement B includes a clerical contribution that 
appeared in earlier contracts. Per the AMOU, the multiplier used to 
calculate monthly benefits is 45.5 days.
    Table 9 shows new benefit calculations based on Agreements A and B, 
effective August 1, 2010, and Table 10 totals the figures in Tables 8 
and 9.

                                                Table 9--Benefits
----------------------------------------------------------------------------------------------------------------
                                                                     Pilots on
                       Monthly component                            undesignated     Pilots on designated waters
                                                                       waters
----------------------------------------------------------------------------------------------------------------
AGREEMENT A:
    Employer contribution, 401(K) plan (Monthly Wages x 5%)....            $737.42                     $1,106.13
    Pension = $33.35 x 45.5 days...............................           1,517.43                      1,517.43
    Health = $88.76 x 45.5 days................................           4,038.58                      4,038.58
AGREEMENT B:
    Employer contribution, 401(K) plan (Monthly Wages x 5%)....             825.60                      1,238.40
    Pension = $43.55 x 45.5 days...............................           1,981.53                      1,981.53
    Health = $88.76 x 45.5 days................................           4,038.58                      4,038.58
AGREEMENT A:
    Monthly total benefits.....................................         = 6,293.42                    = 6,662.13
AGREEMENT A:
    Monthly total benefits x 9 months..........................           = 56,641                      = 59,959
AGREEMENT B:
    Monthly total benefits.....................................         = 6,845.71                    = 7,258.51
AGREEMENT B:
    Monthly total benefits x 9 months..........................           = 61,611                      = 65,327
----------------------------------------------------------------------------------------------------------------


                                       Table 10--Total Wages and Benefits
----------------------------------------------------------------------------------------------------------------
                                                                     Pilots on
                                                                    undesignated     Pilots on designated waters
                                                                       waters
----------------------------------------------------------------------------------------------------------------
AGREEMENT A: Wages.............................................           $132,735                      $199,103
AGREEMENT A: Benefits..........................................           + 56,641                      + 59,959
                                                                ------------------------------------------------
    AGREEMENT A: Total.........................................          = 189,376                     = 259,062
                                                                ================================================
AGREEMENT B: Wages.............................................            148,608                       222,912
AGREEMENT B: Benefits..........................................           + 61,611                      + 65,327
                                                                ------------------------------------------------
    AGREEMENT B: Total.........................................          = 210,219                     = 288,239
----------------------------------------------------------------------------------------------------------------

    Table 11 shows that approximately one third of U.S. Great Lakes 
shipping deadweight tonnage operates under Agreement A, with the 
remaining two thirds operating under Agreement B.

             Table 11--Deadweight Tonnage by AMOU Agreement
------------------------------------------------------------------------
                 Company                    Agreement A     Agreement B
------------------------------------------------------------------------
American Steamship Company..............  ..............         815,600
Mittal Steel USA, Inc...................  ..............          38,826

[[Page 7964]]

 
Key Lakes, Inc..........................         361,385  ..............
                                         -------------------------------
    Total tonnage, each agreement.......         361,385         854,426
Percent tonnage, each agreement.........       361,385 /       854,426 /
                                             1,215,811 =     1,215,811 =
                                                29.7238%        70.2762%
------------------------------------------------------------------------

    Table 12 applies the percentage of tonnage represented by each 
agreement to the wages and benefits provided by each agreement, to 
determine the projected target rate of compensation on a tonnage-
weighted basis.

        Table 12--Projected Target Rate of Compensation, Weighted
------------------------------------------------------------------------
                                           Undesignated     Designated
                                              waters          waters
------------------------------------------------------------------------
AGREEMENT A:
    Total wages and benefits x percent        $189,376 x       259,062 x
     tonnage............................      29.7238% =      29.7238% =
                                                  56,290          77,003
AGREEMENT B:
    Total wages and benefits x percent         210,219 x       288,239 x
     tonnage............................      70.2762% =      70.2762% =
                                                 147,734         202,563
    Total weighted average wages and            56,290 +        77,003 +
     benefits = projected target rate of       147,734 =       202,563 =
     compensation.......................         204,024         279,566
------------------------------------------------------------------------

     (b) Determine number of pilots needed. Subject to adjustment by 
the Coast Guard Director of Great Lakes Pilotage to ensure 
uninterrupted service, we determine the number of pilots needed for 
ratemaking purposes in each area by dividing each area's projected 
bridge hours, either by 1,000 (designated waters) or by 1,800 
(undesignated waters).
    Bridge hours are the number of hours a pilot is aboard a vessel 
providing pilotage service. Projected bridge hours are based on the 
vessel traffic that pilots are expected to serve. Based on historical 
data and information provided by pilots and industry, we project that 
vessel traffic in the 2010 navigation season, in all areas, will remain 
unchanged from the 2009 projections noted in Table 13 of the 2009 final 
rule.
    Table 13, below, shows the projected bridge hours needed for each 
area, and the total number of pilots needed for ratemaking purposes 
after dividing those figures either by 1,000 or 1,800. As in 2008 and 
2009, and for the same reasons, we rounded up to the next whole pilot 
except in Area 2 where we rounded up from 3.14 to 5, and in Area 4 
where we rounded down from 4.07 to 4.

                                        Table 13--Number of Pilots Needed
----------------------------------------------------------------------------------------------------------------
                                                                                   Divided by
                                                                                     1,000
                                                                                  (designated
                        Pilotage area                           Projected 2010     waters) or     Pilots needed
                                                                 bridge hours        1,800         (total = 40)
                                                                                 (undesignated
                                                                                    waters)
----------------------------------------------------------------------------------------------------------------
Area 1.......................................................            5,203            1,000                6
Area 2.......................................................            5,650            1,800                5
Area 4.......................................................            7,320            1,800                4
Area 5.......................................................            5,097            1,000                6
Area 6.......................................................           13,406            1,800                8
Area 7.......................................................            3,259            1,000                4
Area 8.......................................................           11,630            1,800                7
----------------------------------------------------------------------------------------------------------------

     (c) Determine the projected target pilot compensation for each 
area. The projection of new total target pilot compensation is 
determined separately for each pilotage area by multiplying the number 
of pilots needed in each area (see Table 13) by the projected target 
rate of compensation (see Table 12) for pilots working in that area. 
Table 14 shows this calculation.

[[Page 7965]]



                                  Table 14--Projected Target Pilot Compensation
----------------------------------------------------------------------------------------------------------------
                                                                                  Multiplied by      Projected
                         Pilotage area                           Pilots needed   target rate of    target pilot
                                                                 (total = 40)     compensation     compensation
----------------------------------------------------------------------------------------------------------------
Area 1........................................................               6        x $279,566      $1,677,397
Area 2........................................................               5         x 204,024       1,020,120
                                                               -------------------------------------------------
    Total, District One.......................................              11               n/a       2,697,517
Area 4........................................................               4         x 204,024         816,096
Area 5........................................................               6         x 279,566       1,677,397
                                                               -------------------------------------------------
    Total, District Two.......................................              10               n/a       2,493,493
Area 6........................................................               8         x 204,024       1,632,191
Area 7........................................................               4         x 279,566       1,118,265
Area 8........................................................               7         x 204,024       1,428,167
                                                               -------------------------------------------------
    Total, District Three.....................................              19               n/a       4,178,623
----------------------------------------------------------------------------------------------------------------

    Step 4: Increase the projected pilot compensation in Step 3 by the 
expense multiplier in Step 2. This step yields a projected increase in 
operating costs necessary to support the increased projected pilot 
compensation. Table 15 shows this calculation.

                                      Table 15--Projected Operating Expense
----------------------------------------------------------------------------------------------------------------
                                                                   Projected     Multiplied by      Projected
                         Pilotage area                           target pilot       expense         operating
                                                                 compensation     multiplier         expense
----------------------------------------------------------------------------------------------------------------
Area 1........................................................      $1,677,397       x 0.33927        = $569,084
Area 2........................................................       1,020,120       x 0.57449         = 586,050
                                                               -------------------------------------------------
    Total, District One.......................................       2,697,517             n/a       = 1,155,134
Area 4........................................................         816,096       x 0.67135         = 547,886
Area 5........................................................       1,677,397       x 0.50729         = 850,924
                                                               -------------------------------------------------
    Total, District Two.......................................       2,493,493             n/a       = 1,398,810
Area 6........................................................       1,632,191       x 0.53926         = 880,177
Area 7........................................................       1,118,265       x 0.38049         = 425,493
Area 8........................................................       1,428,167       x 0.48087         = 686,767
                                                               -------------------------------------------------
    Total, District Three.....................................       4,178,623             n/a       = 1,992,438
----------------------------------------------------------------------------------------------------------------

    Step 5: Adjust the result in Step 4, as required, for inflation or 
deflation, and calculate projected total economic cost. Based on data 
from the U.S. Department of Labor's Bureau of Labor Statistics 
available at http://www.bls.gov/xg_shells/ro5xg01.htm, we have 
multiplied the results in Step 4 by a 1.037 inflation factor, 
reflecting an average inflation rate of 3.7% between 2007 and 2008, the 
latest years for which data are available. Table 16 shows this 
calculation and the projected total economic cost.

                                     Table 16--Projected Total Economic Cost
----------------------------------------------------------------------------------------------------------------
                                          A. Projected   B. Increase, multiplied   C. Projected    D. Projected
             Pilotage area                  operating    by inflation factor  (=   target pilot   total economic
                                             expense            A x 1.037)         compensation   cost (= B + C)
----------------------------------------------------------------------------------------------------------------
Area 1.................................        $569,084                 $590,140      $1,677,397      $2,267,537
Area 2.................................         586,050                  607,733       1,020,120       1,627,853
                                        ------------------------------------------------------------------------
    Total, District One................       1,155,134                1,197,874       2,697,517       3,895,390
Area 4.................................         547,886                  568,158         816,096       1,384,253
Area 5.................................         850,924                  882,408       1,677,397       2,559,805
                                        ------------------------------------------------------------------------
    Total, District Two................       1,398,810                1,450,566       2,493,493       3,944,058
Area 6.................................         880,177                  912,744       1,632,191       2,544,935
Area 7.................................         425,493                  441,236       1,118,265       1,559,501
Area 8.................................         686,767                  712,178       1,428,167       2,140,345
                                        ------------------------------------------------------------------------
    Total, District Three..............       1,992,438                2,066,158       4,178,623       6,244,781
----------------------------------------------------------------------------------------------------------------


[[Page 7966]]

    Step 6: Divide the result in Step 5 by projected bridge hours to 
determine total unit costs. Table 17 shows this calculation.

                                           Table 17--Total Unit Costs
----------------------------------------------------------------------------------------------------------------
                                                                                                  Prospective
                                                                A. Projected    B. Projected      (total) unit
                        Pilotage area                          total economic    2009 bridge    costs (A divided
                                                                    cost            hours            by B)
----------------------------------------------------------------------------------------------------------------
Area 1.......................................................      $2,267,537           5,203            $435.81
Area 2.......................................................       1,627,853           5,650             288.12
                                                              --------------------------------------------------
    Total, District One......................................       3,895,390          10,853             358.92
Area 4.......................................................       1,384,253           7,320             189.11
Area 5.......................................................       2,559,805           5,097             502.22
                                                              --------------------------------------------------
    Total, District Two......................................       3,944,058          12,417             317.63
Area 6.......................................................       2,544,935          13,406             189.84
Area 7.......................................................       1,559,501           3,259             478.52
Area 8.......................................................       2,140,345          11,630             184.04
                                                              --------------------------------------------------
    Total, District Three....................................       6,244,781          28,295              20.70
Overall......................................................      14,084,230          51,565             273.14
----------------------------------------------------------------------------------------------------------------

    Step 7: Divide prospective unit costs (total unit costs) in Step 6 
by the base period unit costs in Step 1. Table 18 shows this 
calculation, which expresses the percentage change between the total 
unit costs and the base unit costs. The results, for each Area, are 
identical with the percentage increases listed in Table 1.

                                    Table 18--Percentage Change in Unit Costs
----------------------------------------------------------------------------------------------------------------
                                                                                                 C. Percentage
                                                                                               change from base
                      Pilotage area                        A. Prospective    B. Base period    (A divided by B;
                                                             unit costs        unit costs      result expressed
                                                                                                as percentage)
----------------------------------------------------------------------------------------------------------------
Area 1..................................................           $435.81           $416.47                4.65
Area 2..................................................            288.12            273.54                5.33
                                                         -------------------------------------------------------
    Total, District One.................................            358.92            342.06                4.93
Area 4..................................................            189.11            179.30                5.47
Area 5..................................................            502.22            478.46                4.96
                                                         -------------------------------------------------------
    Total, District Two.................................            317.63            302.10                5.14
Area 6..................................................            189.84            180.33                5.27
Area 7..................................................            478.52            456.90                4.73
Area 8..................................................            184.04            174.98                5.17
                                                         -------------------------------------------------------
    Total, District Three...............................            220.70            209.99                5.10
Overall.................................................            273.14            259.97                5.07
----------------------------------------------------------------------------------------------------------------

    Step 8: Adjust the base period rates by the percentage change in 
unit costs in Step 7. Table 19 shows this calculation.

                    Table 19--Base Period Rates Adjusted by Percentage Change in Unit Costs*
----------------------------------------------------------------------------------------------------------------
                                                                                                    D. Adjusted
                                                                 B. Percentage    C. Increase in   rate (A + C,
                   Pilotage                    A. Base period    change in unit    base rate  (A    rounded to
                                                    rate             costs             x B%)          nearest
                                                                                                      dollar)
----------------------------------------------------------------------------------------------------------------
Area                                           ..............       (Multiplying  ..............  ..............
                                                                         Factor)
Area 1:......................................  ..............      4.65 (1.0465)  ..............  ..............
    --Basic pilotage.........................      $16.95/km,  .................       $0.78/km,      $17.73/km,
                                                     29.99/mi                            1.39/mi        31.38/mi
    --Each lock transited....................          375.47  .................           17.44             393
    --Harbor movage..........................        1,229.41  .................           57.11           1,287
    --Minimum basic rate, St. Lawrence River.          820.04  .................           38.09             858
    --Maximum rate, through trip.............        3,599.58  .................          167.20           3,767
Area 2:......................................  ..............      5.33 (1.0533)  ..............  ..............
    --6-hr. period...........................          817.63  .................           43.56             861

[[Page 7967]]

 
    --Docking or undocking...................          779.92  .................           41.55             821
Area 4:......................................  ..............      5.47 (1.0547)  ..............  ..............
    --6 hr. period...........................          722.05  .................           39.49             762
    --Docking or undocking...................          556.46  .................           30.44             587
    --Any point on Niagara River below Black         1,420.45  .................           77.69           1,498
     Rock Lock...............................
Area 5 between any point on or in:...........  ..............      4.96 (1.0496)  ..............  ..............
    --Toledo or any point on Lake Erie W. of         1,299.46  .................           64.51           1,364
     Southeast Shoal.........................
    --Toledo or any point on Lake Erie W. of         2,198.99  .................          109.16           2,308
     Southeast Shoal & Southeast Shoal.......
    --Toledo or any point on Lake Erie W. of         2,855.20  .................          141.74           2,997
     Southeast Shoal & Detroit River.........
    --Toledo or any point on Lake Erie W. of         2,198.99  .................          109.16           2,308
     Southeast Shoal & Detroit Pilot Boat....
    --Port Huron Change Point & Southeast            3,829.80  .................          190.12           4,020
     Shoal (when pilots are not changed at
     the Detroit Pilot Boat).................
    --Port Huron Change Point & Toledo or any        4,436.82  .................          220.26           4,657
     point on Lake Erie W. of Southeast Shoal
     (when pilots are not changed at the
     Detroit Pilot Boat).....................
    --Port Huron Change Point & Detroit River        2,877.20  .................          142.83           3,020
    --Port Huron Change Point & Detroit Pilot        2,237.82  .................          111.09           2,349
     Boat....................................
    --Port Huron Change Point & St. Clair            1,590.68  .................           78.97           1,670
     River...................................
    --St. Clair River........................        1,299.46  .................           64.51           1,364
    --St. Clair River & Southeast Shoal (when        3,829.80  .................          190.12           4,020
     pilots are not changed at the Detroit
     Pilot Boat).............................
    --St. Clair River & Detroit River/Detroit        2,877.20  .................          142.83           3,020
     Pilot Boat..............................
    --Detroit, Windsor, or Detroit River.....        1,299.46  .................           64.51           1,364
    --Detroit, Windsor, or Detroit River &           2,198.99  .................          109.16           2,308
     Southeast Shoal.........................
    --Detroit, Windsor, or Detroit River &           2,855.20  .................          141.74           2,997
     Toledo or any point on Lake Erie W. of
     Southeast Shoal.........................
    --Detroit, Windsor, or Detroit River &           2,877.20  .................          142.83           3,020
     St. Clair River.........................
    --Detroit Pilot Boat & Southeast Shoal...        1,590.68  .................           78.97           1,670
    --Detroit Pilot Boat & Toledo or any             2,198.99  .................          109.16           2,308
     point on Lake Erie W. of Southeast Shoal
    --Detroit Pilot Boat & St. Clair River...        2,877.20  .................          142.83           3,020
Area 6:......................................  ..............      5.27 (1.0527)  ..............  ..............
    --6 hr. period...........................          622.93  .................           32.84             656
    --Docking or undocking...................          591.72  .................           31.20             623
Area 7 between any point on or in:...........  ..............      4.73 (1.0473)  ..............  ..............
    --Gros Cap & De Tour.....................        2,442.98  .................          115.57           2,559
    --Algoma Steel Corp. Wharf, Sault Ste.           2,442.98  .................          115.57           2,559
     Marie, Ont. & De Tour...................
    --Algoma Steel Corp. Wharf, Sault Ste.             920.03  .................           43.52             964
     Marie, Ont. & Gros Cap..................
    --Any point in Sault Ste. Marie, Ont.,           2,047.67  .................           96.87           2,145
     except the Algoma Steel Corp. Wharf & De
     Tour....................................
    --Any point in Sault Ste. Marie, Ont.,             920.03  .................           43.52             964
     except the Algoma Steel Corp. Wharf &
     Gros Cap................................
    --Sault Ste. Marie, MI & De Tour.........        2,047.67  .................           96.87           2,145
    --Sault Ste. Marie, MI & Gros Cap........          920.03  .................           43.52             964
    --Harbor movage..........................          920.03  .................           43.52             964
Area 8:......................................  ..............      5.17 (1.0517)  ..............  ..............
    --6 hr. period...........................          549.44  .................           28.42             578
    --Docking or undocking...................          522.20  .................           27.02             549
----------------------------------------------------------------------------------------------------------------
*Rates for ``Cancellation, delay or interruption in rendering services (Sec.   401.420)'' and ``Basic Rates and
  charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal
  boarding point (Sec.   401.428)'' are not reflected in this table but have been increased by 5.07% across all
  areas.

VI. Regulatory Analyses

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

A. Regulatory Planning and Review

    Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR 
51735, October 4, 1993, requires a determination whether a regulatory 
action is ``significant'' and