Great Lakes Pilotage Rates-2011 Annual Review and Adjustment, 51191-51204 [2010-20544]

Download as PDF Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use Because it is not a ‘‘significant regulatory action’’ under Executive Order 12866 or a ‘‘significant energy action,’’ this action is also not subject to Executive Order 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use’’ (66 FR 28355, May 22, 2001). National Technology Transfer Advancement Act In reviewing State submissions, EPA’s role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a State submission, to use VCS in place of a State submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. Dated: August 6, 2010. Susan Hedman, Regional Administrator, Region 5. [FR Doc. 2010–20583 Filed 8–18–10; 8:45 am] BILLING CODE 6560–50–P DEPARTMENT OF HOMELAND SECURITY Coast Guard [Docket No. USCG–2010–0517] sroberts on DSKD5P82C1PROD with PROPOSALS RIN 1625–AB48 Great Lakes Pilotage Rates—2011 Annual Review and Adjustment Coast Guard, DHS. ACTION: Notice of proposed rulemaking. AGENCY: The Coast Guard proposes to increase the rates for pilotage on the Great Lakes to generate sufficient revenue to cover allowable expenses, SUMMARY: 18:32 Aug 18, 2010 For questions on this proposed rule, call Mr. Paul M. Wasserman, Chief, Great Lakes Pilotage Division, Commandant (CG– 5522), U.S. Coast Guard, at 202–372– 1535, by fax 202–372–1909, or by e-mail at Paul.M.Wasserman@uscg.mil. If you have questions on viewing or submitting material to the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone 202–366–9826. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: Table of Contents 46 CFR Part 401 VerDate Mar<15>2010 target pilot compensation, and return on investment. The proposed update reflects a projected August 1, 2011, increase in benchmark contractual wages and benefits and an adjustment for deflation. This rulemaking promotes the Coast Guard’s strategic goal of maritime safety. DATES: Comments and related material must reach the Docket Management Facility on or before September 20, 2010. ADDRESSES: You may submit comments identified by Coast Guard docket number USCG–2010–0517 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods: (1) Federal eRulemaking Portal: https://www.regulations.gov. (2) Fax: 202–493–2251. (3) Mail: Docket Management Facility (M–30), U.S. Department of Transportation, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590– 0001. (4) Hand delivery: Same as mail address above, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202–366–9329. To avoid duplication, please use only one of these four methods. See the ‘‘Public Participation and Request for Comments’’ portion of the SUPPLEMENTARY INFORMATION section below for instructions on submitting comments. Jkt 220001 I. Public Participation and Request for Comments A. Submitting Comments B. Viewing Comments and Documents C. Privacy Act D. Public Meeting II. Abbreviations III. Background IV. Discussion of the Proposed Rule A. Proposed Pilotage Rate Changes— Summarized B. Calculating the Rate Adjustment VI. Regulatory Analyses A. Regulatory Planning and Review B. Small Entities PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 51191 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. Public Participation and Request for Comments We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to https:// www.regulations.gov and will include any personal information you have provided. A. Submitting Comments If you submit a comment, please include the docket number for this rulemaking (USCG–2010–0517), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. We recommend that you include your name and a mailing address, an e-mail address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission. To submit your comment online, go to https://www.regulations.gov, click on the ‘‘submit a comment’’ box, which will then become highlighted in blue. In the ‘‘Document Type’’ drop down menu select ‘‘Proposed Rule’’ and insert ‘‘USCG–2010–0517’’ in the ‘‘Keyword’’ box. Click ‘‘Search’’ then click on the balloon shape in the ‘‘Actions’’ column. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81⁄2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period and may change this proposed rule based on your comments. B. Viewing Comments and Documents To view comments, as well as documents mentioned in this preamble as being available in the docket, go to https://www.regulations.gov, click on the ‘‘read comments’’ box, which will then become highlighted in blue. In the E:\FR\FM\19AUP1.SGM 19AUP1 51192 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules ‘‘Keyword’’ box insert ‘‘USCG–2010– 0517’’ and click ‘‘Search.’’ Click the ‘‘Open Docket Folder’’ in the ‘‘Actions’’ column. If you do not have access to the internet, you may view the docket online by visiting the Docket Management Facility in Room W12–140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. We have an agreement with the Department of Transportation to use the Docket Management Facility. C. Privacy Act Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act system of records notice regarding our public dockets in the January 17, 2008 issue of the Federal Register (73 FR 3316). D. Public Meeting We do not plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register. II. Abbreviations AMOU American Maritime Officers Union MISLE Marine Information for Safety and Law Enforcement NAICS North American Industry Classification System NEPA National Environmental Policy Act of 1969 NPRM Notice of proposed rulemaking NVMC National Vessel Movement Center OMB Office of Management and Budget sroberts on DSKD5P82C1PROD with PROPOSALS III. Background This notice of proposed rulemaking (NPRM) is issued pursuant to Coast Guard regulations in 46 CFR Parts 401– 404. Those regulations implement the Great Lakes Pilotage Act of 1960, 46 U.S.C. Chapter 93 (‘‘the Act’’), which requires foreign-flag vessels and U.S.flag vessels engaged in foreign trade to use federally registered Great Lakes pilots while transiting the St. Lawrence Seaway and the Great Lakes system, and which 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 VerDate Mar<15>2010 18:32 Aug 18, 2010 Jkt 220001 providing the services.’’ 46 U.S.C. 9303(f). There is no minimum tonnage limit or exemption for these vessels, but the Coast Guard’s interpretation is that the Act applies only to commercial vessels and not to recreational vessels. 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 the Coast Guard sets rates, it does not 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 No. 3385, as amended by Proclamation No. 3855, pursuant to the Act, 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). The Act requires annual reviews of pilotage rates and the setting of new rates at least once every five years, or sooner, if annual reviews show a need. 46 U.S.C. 9303(f), 46 CFR 404.1. To assist in calculating pilotage rates, the pilotage associations are required to submit to the Coast Guard annual financial statements prepared by certified public accounting firms. In addition, every fifth year, in connection with the mandatory rate adjustment, the Coast Guard obtains a full and independent 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, the Coast Guard generates PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 the pilotage rates using Appendix A to 46 CFR Part 404. Between the five-year full ratemaking intervals, the Coast Guard annually reviews the pilotage rates using Appendix C to Part 404, and adjusts rates when deemed appropriate. Terms and formulas used in Appendix A and Appendix C are defined in Appendix B to Part 404. The last full ratemaking using the Appendix A methodology was published on April 3, 2006 (71 FR 16501). Since then, rates have been reviewed under Appendix C and adjusted annually: 2007 (72 FR 53158, Sep. 18, 2007); 2008 (interim rule 73 FR 15092, Mar. 21, 2008; final rule 74 FR 220, Jan. 5, 2009); 2009 (74 FR 35812, Jul. 21, 2009); 2010 (75 FR 7958, Feb. 23, 2010). The present rulemaking proposes a rate adjustment for the 2011 shipping season, based on an Appendix C review. At the conclusion of this ratemaking cycle, we anticipate publishing an NPRM proposing a rate adjustment based upon an Appendix A 5-year review and audit of the pilot association books and records. As we stated in the NPRM for our 2010 Appendix C ratemaking, 74 FR 56153 at 56154 (Oct. 30, 2009), we had anticipated that the next Appendix A ratemaking would be completed in 2011. However, the current rulemaking is not an Appendix A review because the Coast Guard cannot use the audits conducted in 2009 in preparation for the next Appendix A review. Those audits were incomplete and inadequate for determining the expenses of the regulated associations or for use in ratemaking. The Coast Guard has contracted for new audits that will be conducted during the 2010 navigation season. These audits will serve as the basis for the next Appendix A review, which we will undertake as soon as possible. IV. Discussion of the Proposed Rule The Act and Coast Guard pilotage regulations require that the Coast Guard, as delegated by the Secretary of Homeland Security, review the pilotage rates annually. If the annual review shows that pilotage rates are within a reasonable range of the base target pilot compensation set in the previous ratemaking, no adjustment to the rates will be initiated. However, if the annual review indicates that an adjustment is necessary, then the Coast Guard will establish new pilotage rates pursuant to 46 CFR 404.10. E:\FR\FM\19AUP1.SGM 19AUP1 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules A. Proposed Pilotage Rate Changes— Summarized The Appendix C to 46 CFR 404 ratemaking methodology is intended for use during the years between Appendix A full ratemaking reviews and adjustments. This section summarizes the rate changes proposed for 2011, and then discusses in detail how the proposed changes were calculated under Appendix C. We are proposing an increase across all Areas over the last pilotage rate adjustment. This reflects a projected August 1, 2011, increase in benchmark 51193 contractual wages and benefits and a deflation adjustment. This rate increase would not go into effect until August 1, 2011, after the current benchmark contracts expire. Actual rate increases vary by Area, and are summarized in Table 1. TABLE 1—2011 AREA RATE CHANGES Then the proposed percentage increases over the current rate is: If pilotage service is required in: Area Area Area Area Area Area Area 1 2 4 5 6 7 8 (Designated waters) ..................................................................................................................................................... (Undesignated waters) ................................................................................................................................................. (Undesignated waters) ................................................................................................................................................. (Designated waters) ..................................................................................................................................................... (Undesignated waters) ................................................................................................................................................. (Designated waters) ..................................................................................................................................................... (Undesignated waters) ................................................................................................................................................. 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 6.51 percent in all Areas based upon the calculations appearing at Tables 19 through 21, which appear below. 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 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 2010 Appendix C review. The Coast Guard uses the most recent union contracts between the American Maritime Officers Union (AMOU) and vessel owners and operators on the Great Lakes to estimate target pilot compensation. However, the current AMOU contracts expire in July 2011, and the Coast Guard has been informed that contract negotiations will not begin until sometime that year, which is well after the pilotage statute requires that we establish a rate. Accordingly, we have reviewed the terms of both the existing and past AMOU contracts and have projected, for purposes of this ratemaking, that the AMOU contracts effective in 2011 would provide increases in compensation equal to 3 percent, which is the increase called for in the AMOU contracts over the last two years. We project all other benefits to remain fixed at current levels with the exception of medical plan contributions. 3.57 3.77 3.75 3.52 4.89 3.56 5.26 Medical plan contributions have increased by 10 percent per year from 2006 through 2010 in the current AMOU contracts. Thus, we forecast an increase of 10 percent over 2010 medical plan contributions for the AMOU contracts in 2011. Bridge hour projections for the 2011 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. 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: sroberts on DSKD5P82C1PROD with PROPOSALS TABLE 2—TOTAL ECONOMIC COST FOR BASE PERIOD (2010), AREAS IN DISTRICT ONE Area 1 St. Lawrence River Base operating expense (less base return element) .............................................................................. Base target pilot compensation ............................................................................................................... Base return element ................................................................................................................................ VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 E:\FR\FM\19AUP1.SGM $578,569 + $1,677,397 + $11,571 19AUP1 Area 2 Lake Ontario $590,032 + $1,020,120 + $17,701 51194 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules TABLE 2—TOTAL ECONOMIC COST FOR BASE PERIOD (2010), AREAS IN DISTRICT ONE—Continued Area 1 St. Lawrence River Area 2 Lake Ontario Subtotal ............................................................................................................................................. = $2,267,537 = $1,627,853 Base bridge hours ................................................................................................................................... Base cost per bridge hour ....................................................................................................................... ÷ 5,203 = $435.81 ÷ 5,650 = $288.12 TABLE 3—TOTAL ECONOMIC COST FOR BASE PERIOD (2010), AREAS IN DISTRICT TWO Area 4 Lake Erie Area 5 Southeast Shoal to Port Huron, MI Base operating expense .......................................................................................................................... Base target pilot compensation ............................................................................................................... Base return element ................................................................................................................................ $541,103 + $816,096 + $27,055 $848,469 + $1,677,397 + $33,939 Subtotal ............................................................................................................................................. = $1,384,254 = $2,559,805 Base bridge hours ................................................................................................................................... Base cost per bridge hour ....................................................................................................................... ÷ 7,320 = $189.11 ÷ 5,097 = $502.22 TABLE 4—TOTAL ECONOMIC COST FOR BASE PERIOD (2010), AREAS IN DISTRICT THREE Area 6 Lakes Huron and Michigan Area 7 St. Mary’s River Area 8 Lake Superior Base operating expense ...................................................................................... Base target pilot compensation ........................................................................... Base return element ............................................................................................ $877,638 + $1,632,191 + $35,106 $428,384 + $1,118,265 + $12,852 $691,435 + $1,428,167 + $20,743 Subtotal ......................................................................................................... = $2,544,935 = $1,559,501 = $2,140,345 Base bridge hours ............................................................................................... Base cost per bridge hour ................................................................................... ÷ 13,406 = $189.84 ÷ 3,259 = $478.52 ÷ 11,630 = $184.04 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 ................................................................................................................................ $578,569 + $11,571 $590,032 + $17,701 Subtotal ............................................................................................................................................. = $590,140 = $607,733 Base target pilot compensation ............................................................................................................... Expense multiplier ................................................................................................................................... ÷ $1,677,397 0.35182 ÷ $1,020,120 0.59575 sroberts on DSKD5P82C1PROD with PROPOSALS TABLE 6—EXPENSE MULTIPLIER, AREAS IN DISTRICT TWO Area 4 Lake Erie Area 5 Southeast Shoal to Port Huron, MI Base operating expense .......................................................................................................................... Base return element ................................................................................................................................ $541,103 + $27,055 $848,469 + $33,939 Subtotal ............................................................................................................................................. = $568,158 = $882,408 Base target pilot compensation ............................................................................................................... Expense multiplier ................................................................................................................................... ÷ $816,096 0.69619 ÷ $1,677,397 0.52606 VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 E:\FR\FM\19AUP1.SGM 19AUP1 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules 51195 TABLE 7—EXPENSE MULTIPLIER, AREAS IN DISTRICT THREE Area 6 Lakes Huron and Michigan Area 7 St. Mary’s River Area 8 Lake Superior Base operating Expense ..................................................................................... Base return element ............................................................................................ $877,638 + $35,106 $428,384 + $12,852 $691,435 + $20,743 Subtotal ......................................................................................................... = $912,744 = $441,236 = $712,178 Base target pilot compensation ........................................................................... Expense multiplier ............................................................................................... ÷ $1,632,191 0.55921 ÷ $1,118,265 0.39457 ÷ $1,428,167 0.49867 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 percent plus benefits). To determine first mates’ and masters’ average annual compensation, we typically 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 July 2010, 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 will expire on July 31, 2011. Based on discussions with AMOU officials, these contracts are not expected to be negotiated until 2011. This does not provide sufficient time to incorporate new rates into the ratemaking process for the 2011 shipping season. The Coast Guard projects that when new AMOU contracts are negotiated in 2011, they would provide for a 3 percent wage increase effective August 1, 2011. This is in keeping with the recent contractual wage raises under the existing union contracts. Both 2009 and 2010 saw wage raises of 3 percent. Under Agreement A, we project that the daily wage rate would increase from $270.61 to $278.73. Under Agreement B, the daily wage rate would increase from $333.58 to $343.59. All other benefits and calculations for these contracts are forecasted to remain identical to the current AMOU contracts. The pension plan contribution, which has been a fixed amount, the 401k employers matching contribution of 5 percent of wages, which is also a set amount, and the monthly contract multipliers are all projected to remain fixed at current AMOU contract levels. These benefits have not changed their numerical or percentage values over the course of the previous AMOU agreements still in effect. We do not project that the 2011 contracts would have any impact on these fixed benefits. 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 projected Agreements A and B to be effective as of August 1, 2011. TABLE 8—WAGES Pilots on undesignated waters Monthly component sroberts on DSKD5P82C1PROD with PROPOSALS AGREEMENT AGREEMENT AGREEMENT AGREEMENT A: A: B: B: $278.73 daily rate × 54.5 days ........................................................................................... Monthly total × 9 months = total wages .............................................................................. $343.59 daily rate × 49.5 days ........................................................................................... Monthly total × 9 months = total wages .............................................................................. Both Agreements A and B currently include a health benefits contribution rate of $88.76. On average, this benefit contribution has increased at a rate of 10 percent per year throughout the lives of the existing five-year contracts. Accordingly, for purposes of the 2011 rate we project that when new AMOU contracts are negotiated in 2011, this VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 contribution would increase to $97.64 effective August 1, 2011. We project that Agreement A would continue to include a pension plan contribution rate of $33.35 per man-day and that Agreement B would continue to include a pension plan contribution rate of $43.55 per man-day. Similarly, we expect both Agreements A and B to continue to PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 $15,191 136,716 17,008 153,068 Pilots on designated waters (undesignated × 150%) $22,786 205,074 25,511 229,602 provide a 5 percent 401K employer matching provision. Accordingly, for purposes of the 2011 rate, we will continue to use these values in calculating total pilot compensation. Currently, neither Agreement A nor Agreement B includes a clerical contribution that appeared in earlier contracts, and we project that this E:\FR\FM\19AUP1.SGM 19AUP1 51196 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules would not be a feature of any new AMOU contracts negotiated in 2011. We project that the multiplier used to calculate monthly benefits would remain the same at 45.5 days. Table 9 shows new benefit calculations based on projected Agreements A and B, effective August 1, 2011. 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 = $97.64 × 45.5 days ........................................................................................................................... AGREEMENT B: Employer contribution, 401(K) plan (Monthly Wages × 5%) .............................................. Pension = $43.55 × 45.5 days ........................................................................................................................ Health = $97.64 × 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 $759.53 $1,517.43 $4,442.62 $850.38 $1,981.53 $4,442.62 = $6,719.58 = $60,476 = $7,274.52 = $65,471 $1,139.30 $1,517.43 $4,442.62 $1,275.57 $1,981.53 $4,442.62 = $7,099.35 = $63,894 = $7,699.71 = $69,297 TABLE 10—TOTAL WAGES AND BENEFITS Pilots on undesignated waters AGREEMENT AGREEMENT AGREEMENT AGREEMENT AGREEMENT AGREEMENT A: A: A: B: B: B: Wages ................................................................................................................................. Benefits ............................................................................................................................... Total .................................................................................................................................... Wages ................................................................................................................................. Benefits ............................................................................................................................... Total .................................................................................................................................... Table 11 shows that approximately one third of U.S. Great Lakes shipping deadweight tonnage operates under Pilots on designated waters $136,716 + $60,476 = $197,192 $153,068 + $65,471 = $218,539 $205,074 + $63,894 = $268,968 $229,602 + $69,297 = $298,900 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 ......................... Mittal Steel USA, Inc ......................................... Key Lakes, Inc ................................................... Total tonnage, each agreement ........................ Percent tonnage, each agreement .................... ........................................................................... ........................................................................... 361,385. 361,385 ............................................................. 361,385 ÷ 1,215,811 = 29.7238% ................... 815,600. 38,826. 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. 854,426. 854,426 ÷ 1,215,811 = 70.2762%. TABLE 12—PROJECTED TARGET RATE OF COMPENSATION, WEIGHTED Undesignated waters Designated waters sroberts on DSKD5P82C1PROD with PROPOSALS AGREEMENT A: Total wages and benefits x percent tonnage. AGREEMENT B: Total wages and benefits x percent tonnage. Total weighted average wages and benefits = projected target rate of compensation. $197,192 × 29.7238% = $58,613 .................... $268,968 × 29.7238% = $79,948. $218,539 × 70.2762% = $153,581 .................. $298,900 × 70.2762% = $210,055. $58,613 + $153,581 = $212,194 ...................... $79,948 + $210,055 = $290,003. (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 2011 VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 E:\FR\FM\19AUP1.SGM 19AUP1 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules navigation season, in Districts 1 and 2, would remain unchanged from the 2010 projections noted in Table 13 of the 2010 final rule. In District 3, in both Areas 6 and 8, dropping bridge hours require the removal of two unused authorizations for pilots, one for each Area. There are no pilots currently in either of these slots and no jobs are being lost as a result of this action. The removal of these two pilot billets merely 51197 those figures either by 1,000 or 1,800. As in the previous three annual ratemakings, and for the reasons described in detail in the 2008 final rule (74 FR 220 at 221–222), 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. attempts to mitigate a significant downward trend across the undesignated waters of District 3. The bridge hours for the designated waters of Area 7, like Districts 1 and 2, would remain unchanged from the 2010 projections. Table 13, below, shows the projected bridge hours needed for each Area, and the total number of pilots needed for ratemaking purposes after dividing TABLE 13—NUMBER OF PILOTS NEEDED Area Area Area Area Area Area Area 1 2 4 5 6 7 8 Divided by 1,000 (designated waters) or 1,800 (undesignated waters) Projected 2011 bridge hours Pilotage area .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... (c) Determine the projected target pilot compensation for each Area. The projection of new total target pilot compensation is determined separately 5,203 5,650 7,320 5,097 11,606 3,259 9,830 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 Pilots needed (total = 38) 1,000 1,800 1,800 1,000 1,800 1,000 1,800 6 5 4 6 7 4 6 12) for pilots working in that Area. Table 14 shows this calculation. TABLE 14—PROJECTED TARGET PILOT COMPENSATION Pilots needed (total = 38) Pilotage area Area Area Area Area Area Area Area 1 2 4 5 6 7 8 .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... Step 4: Increase the projected pilot compensation in Step 3 by the expense multiplier in Step 2. This step yields a Multiplied by target rate of compensation × $290,003 × 212,194 × 212,194 × 290,003 × 212,194 × 290,003 × 212,194 6 5 4 6 7 4 6 projected increase in operating costs necessary to support the increased Projected target pilot compensation $1,740,018 1,060,970 848,776 1,740,018 1,485,357 1,160,012 1,273,164 projected pilot compensation. Table 15 shows this calculation. TABLE 15—PROJECTED OPERATING EXPENSE Projected target pilot compensation Pilotage area sroberts on DSKD5P82C1PROD with PROPOSALS Area Area Area Area Area Area Area 1 2 4 5 6 7 8 .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... 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 VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 Frm 00011 × × × × × × × $1,740,018 1,060,970 848,776 1,740,018 1,485,357 1,160,012 1,273,164 available at https://www.bls.gov/ xg_shells/ro5xg01.htm, we have multiplied the results in Step 4 by a 0.994 deflation factor, reflecting an average deflation rate of 0.6 percent PO 00000 Multiplied by expense multiplier Fmt 4702 Sfmt 4702 0.35182 0.59575 0.69619 0.52606 0.55921 0.39457 0.49867 Projected operating expense = $612,171 = 632,069 = 590,909 = 915,350 = 830,633 = 457,708 = 634,883 between 2008 and 2009, the latest years for which data are available. Table 16 shows this calculation and the projected total economic cost. E:\FR\FM\19AUP1.SGM 19AUP1 51198 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules TABLE 16—PROJECTED TOTAL ECONOMIC COST A. Projected operating expense Pilotage area Area Area Area Area Area Area Area 1 2 4 5 6 7 8 .............................................. .............................................. .............................................. .............................................. .............................................. .............................................. .............................................. B. Increase, multiplied by deflation factor (= A × 0.994) $612,171 632,069 590,909 915,350 830,633 457,708 634,883 Step 6: Divide the result in Step 5 by projected bridge hours to determine C. Projected target pilot compensation $608,498 628,277 587,364 909,858 825,649 454,962 631,074 D. Projected total economic cost (= B + C) $1,740,018 1,060,970 848,776 1,740,018 1,485,357 1,160,012 1,273,164 $2,348,516 1,689,246 1,436,140 2,649,876 2,311,006 1,614,974 1,904,237 total unit costs. Table 17 shows this calculation. TABLE 17—TOTAL UNIT COSTS A. Projected total economic cost Pilotage area Area Area Area Area Area Area Area 1 2 4 5 6 7 8 .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... Step 7: Divide prospective unit costs (total unit costs) in Step 6 by the base period unit costs in Step 1. Table 18 B. Projected 2011 bridge hours $2,348,516 1,689,246 1,436,140 2,649,876 2,311,006 1,614,974 1,904,237 shows this calculation, which expresses the percentage change between the total unit costs and the base unit costs. The Prospective (total) unit costs (A divided by B) 5,203 5,650 7,320 5,097 11,606 3,259 9,830 $451.38 298.98 196.19 519.89 199.12 495.54 193.72 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 Area Area Area Area Area Area Area 1 2 4 5 6 7 8 .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... .......................................................................................... We use the percentage change between the prospective overall unit cost and the base overall unit cost to increase rates for cancellation, delay, or interruption in rendering services (46 CFR 401.420), and basic rates and B. Base period unit costs $451.38 298.98 196.19 519.89 199.12 495.54 193.72 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). This calculation is derived from the Appendix C ratemaking methodology found at 46 C. Percentage change from base (A divided by B; result expressed as percentage) $435.81 288.12 189.11 502.22 189.84 478.52 184.04 3.57 3.77 3.75 3.52 4.89 3.56 5.26 CFR 404.10, and differs from the area rate calculation by using total costs and total bridge hours for all areas. Tables 19 through 21 show this calculation. sroberts on DSKD5P82C1PROD with PROPOSALS TABLE 19—CALCULATION OF BASE PERIOD OVERALL UNIT COST A. Base period (2010) overall total economic costs Sum of all Areas .............................................................................................................. VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 B. Base period (2010) overall bridge hours C. Base period (2010) overall unit cost (A divided by B) $14,084,230 51,565 $273.14 E:\FR\FM\19AUP1.SGM 19AUP1 51199 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules TABLE 20—CALCULATION OF PROJECTED PERIOD OVERALL UNIT COST A. Projected period (2011) overall total economic costs Sum of all Areas .............................................................................................................. B. Projected period (2011) overall bridge hours C. Base period (2011) overall unit cost (A divided by B) $13,953,996 47,965 $290.92 TABLE 21—PERCENTAGE CHANGE IN OVERALL PROSPECTIVE UNIT COSTS/BASE UNIT COST A. Prospective overall unit cost Across all Areas ............................................................................................................... B. Base period overall unit cost C. Percentage change from overall base unit cost (A divided by B) $290.92 273.14 6.51 Step 8: Adjust the base period rates by the percentage change in unit costs in Step 7. Table 22 shows this calculation. TABLE 22—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS A. Base period rate ........................... *Pilotage area sroberts on DSKD5P82C1PROD with PROPOSALS Area 1: —Basic pilotage .......................................................................... —Each lock transited .................................................................. —Harbor movage ........................................................................ —Minimum basic rate, St. Lawrence River ................................ —Maximum rate, through trip ..................................................... Area 2: —6-hr. period .............................................................................. —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 .............................................................. VerDate Mar<15>2010 18:32 Aug 18, 2010 Jkt 220001 PO 00000 Frm 00013 B. Percentage change in unit costs (Multiplying Factor) $17.73/km, $31.38/mi. $393 .................. $1,287 ............... $858 .................. $3,767 ............... C. Increase in base rate (A × B%) 3.57 (1.0357) ............................ D. Adjusted rate (A + C, rounded to nearest dollar) $0.63/km, $1.12/ mi. $14.03 ............... $45.95 ............... $30.63 ............... $134.48 ............. $18.36/km, $32.50/mi. $407. $1,333. $889. $3,901. $32.46 ............... $30.95 ............... $893. $852. $762 .................. $587 .................. $1,498 ............... ...................... $1,364 ............... $2,308 ............... ............................ ............................ ............................ ............................ 3.77 (1.0377) ............................ ............................ 3.75 (1.0375) ............................ ............................ ............................ 3.52 (1.0352) ............................ ............................ $28.58 ............... $22.01 ............... $56.18 ............... $791. $609. $1,554. $48.01 ............... $81.24 ............... $1,412. $2,389. $2,997 ............... ............................ $105.49 ............. $3,102. $2,308 ............... ............................ $81.24 ............... $2,389. $4,020 ............... ............................ $141.50 ............. $4,162. $4,657 ............... ............................ $163.93 ............. $4,821. $3,020 $2,349 $1,670 $1,364 $4,020 ............... ............... ............... ............... ............... ............................ ............................ ............................ ............................ ............................ $106.30 ............. $82.68 ............... $58.78 ............... $48.01 ............... $141.50 ............. $3,126. $2,432. $1,729. $1,412. $4,162. $3,020 $1,364 $2,308 $2,997 ............... ............... ............... ............... ............................ ............................ ............................ ............................ $106.30 ............. $48.01 ............... $81.24 ............... $105.49 ............. $3,126. $1,412. $2,389. $3,102. $3,020 ............... $1,670 ............... $2,308 ............... ............................ ............................ ............................ $106.30 ............. $58.78 ............... $81.24 ............... $3,126. $1,729. $2,389. $3,020 ............... ............................ 4.89 (1.0489) ............................ ............................ $106.30 ............. $3,126. $32.08 ............... $30.46 ............... $688. $653. $861 .................. $821 .................. $656 .................. $623 .................. Fmt 4702 Sfmt 4702 E:\FR\FM\19AUP1.SGM 19AUP1 51200 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules TABLE 22—BASE PERIOD RATES ADJUSTED BY PERCENTAGE CHANGE IN UNIT COSTS—Continued A. Base period rate ........................... *Pilotage area 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 .............................................................. B. Percentage change in unit costs (Multiplying Factor) $2,559 ............... $2,559 ............... $964 .................. 3.56 (1.0356) ............................ ............................ ............................ $91.10 ............... $91.10 ............... $34.32 ............... $2,650. $2,650. $998. $2,145 ............... ............................ $76.36 ............... $2,221. $964 .................. ............................ $34.32 ............... $998. $2,145 ............... $964 .................. $964 .................. ............................ ............................ ............................ 5.26 (1.0526) ............................ ............................ $76.36 ............... $34.32 ............... $34.32 ............... $2,221. $998. $998. $30.40 ............... $28.88 ............... $608. $578. $578 .................. $549 .................. C. Increase in base rate (A × B%) D. Adjusted rate (A + C, rounded to nearest dollar) * 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 6.51% across all areas (see Table 21). VI. Regulatory Analyses We developed this proposed 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. sroberts on DSKD5P82C1PROD with PROPOSALS A. Regulatory Planning and Review This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. A draft Regulatory Assessment follows: The Coast Guard is required to conduct an annual review of pilotage rates on the Great Lakes and, if necessary, adjust these rates to align compensation levels between Great Lakes pilots and industry. See the ‘‘Background’’ section for a detailed explanation of the legal authority and requirements for the Coast Guard to conduct an annual review and provide possible adjustments of pilotage rates on the Great Lakes. Based on our annual review for this proposed rulemaking, we are adjusting the pilotage rates for the 2011 shipping season to generate sufficient revenue to cover allowable expenses, target pilot compensation, and returns on investment. This proposed rule would implement rate adjustments for the Great Lakes system over the current rates adjusted in the 2010 final rule. These adjustments to Great Lakes pilotage rates meet the VerDate Mar<15>2010 18:32 Aug 18, 2010 Jkt 220001 requirements set forth in 46 CFR Part 404 for similar compensation levels between Great Lakes pilots and industry. They also include adjustments for deflation and projected 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. The Coast Guard’s interpretation is 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 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. Coast Guard sampling of pilot data suggests there are very few U.S. domestic vessels, without registry and operating only in the Great Lakes, that voluntarily purchase pilotage services. PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 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 pilotage areas 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, based on 2006–2008 vessel data from MISLE. The impact of the rate adjustment to shippers is estimated from 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 (costs or savings) of the rate adjustment in this proposed rule to be the difference between the total projected revenue needed to cover costs based on the 2010 rate adjustment and the total projected revenue needed to cover costs in this proposed rule for 2011. Table 23 details additional costs or savings by area. E:\FR\FM\19AUP1.SGM 19AUP1 51201 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules TABLE 23—RATE ADJUSTMENT AND ADDITIONAL IMPACT OF THE PROPOSED RULE BY AREA [$U.S.; non-discounted] Total projected expenses in 2010 Area Area Area Area Area Area Area 1 2 4 5 6 7 8 ............................................................................................ ............................................................................................ ............................................................................................ ............................................................................................ ............................................................................................ ............................................................................................ ............................................................................................ Change in projected expenses $2,267,537 1,627,853 1,384,253 2,559,805 2,544,935 1,559,501 2,140,345 Total projected expenses in 2011 1.0357 1.0377 1.0375 1.0352 0.9081 1.0356 0.8897 Additional cost or savings of this rulemaking $2,348,516 1,689,246 1,436,140 2,649,876 2,311,006 1,614,974 1,904,237 $80,979 61,393 51,887 90,071 (233,929) 55,473 (236,108) sroberts on DSKD5P82C1PROD with PROPOSALS NOTES to Table 23: Some values may not total due to rounding. See ‘‘B. Calculating the Rate Adjustment’’ for further details on the rate adjustment methodology. ‘‘Additional Cost or Savings of this Rulemaking’’ = ‘‘Total Projected Expenses in 2011’’ minus ‘‘Total Projected Expenses in 2010.’’ After applying the rate change in this proposed rule, the resulting difference between the projected revenue in 2010 and the projected revenue in 2011 is the annual impact to shippers from this rule. This figure would be equivalent to the total additional payments or savings that shippers would incur for pilotage services from this proposed rule. As discussed earlier, we consider a reduction in payments to be a cost savings. The impact of the rate adjustment in this proposed rule to shippers varies by area. The annual costs of the rate adjustments range from $51,887 to $90,071 for most affected Areas. However, Areas 6 and 8 would experience annual cost savings of approximately $234,000 and $236,000, respectively. The annual savings is due to a projected decrease in the number of billeted pilots in Areas 6 and 8 from 2010 to 2011. This decrease in the number of pilots would reduce the projected revenue needed to cover costs of pilotage services in Areas 6 and 8. To calculate an exact cost or savings 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 or savings reported above does capture all of the additional cost the shippers face as a result of the rate adjustment in this rule. This proposed rate adjustment would result in a savings for Areas 6 and 8 that would outweigh the combined costs of the other areas. We measure the impact of this rulemaking by examining the changes in costs to shippers for pilotage VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 services. With savings in Areas 6 and 8 exceeding the combined costs in other Areas, the net impact of this rulemaking would be a cost savings for pilotage services in the Great Lakes system. The overall impact of the proposed rule would be a cost savings to shippers of about $130,000 if we sum across all affected areas. B. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601–612), we have considered whether this proposed 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. We expect entities affected by the proposed rule would 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. For the proposed rule, we reviewed recent company size and ownership data from 2006–2008 Coast Guard MISLE data and business revenue and size data provided by Reference USA and Dunn 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, PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 shipping conglomerates or their subsidiaries owned or operated all vessels engaged in foreign trade on the Great Lakes. We assume that new industry entrants would be comparable in ownership and size to these shippers. There are three U.S. entities affected by the proposed rule that receive revenue from pilotage services. These are the three pilot associations that provide and manage pilotage services within the Great Lakes system. Two of the associations operate as partnerships and one operates as a corporation. These associations are classified with the same 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 proposed rule because 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 proposed rule would not have a significant economic impact on a substantial number of small entities under 5 U.S.C. § 605(b). If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment to the Docket Management Facility at the address under ADDRESSES. In your comment, explain why you think it qualifies and how and to what degree this proposed rule would economically affect it. 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 proposed rule so that they could better evaluate its effects on E:\FR\FM\19AUP1.SGM 19AUP1 51202 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Mr. Paul M. Wasserman, Chief, Great Lakes Pilotage Division, Commandant (CG– 5522), U.S. Coast Guard, at 202–372– 1535, by fax 202–372–1909, or by e-mail at Paul.M.Wasserman@uscg.mil. 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). expenditure, we do discuss the effects of this rule elsewhere in this preamble. D. Collection of Information J. Indian Tribal Governments This proposed 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 proposed 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 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 proposed rule under that Order and have determined that it does not have implications for federalism because States are expressly prohibited by 46 U.S.C. 9306 from regulating pilotage on the Great Lakes. sroberts on DSKD5P82C1PROD with PROPOSALS 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 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 G. Taking of Private Property This proposed 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 proposed 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 proposed 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. K. Energy Effects We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a ‘‘significant energy action’’ under that order because it is not a ‘‘significant regulatory action’’ under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. 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 proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. M. Environment We have analyzed this proposed 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 made a preliminary determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. A preliminary environmental analysis checklist supporting this determination is available in the docket where indicated under the ‘‘Public Participation and Request for Comments’’ section of this preamble. 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. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule. List of Subjects in 46 CFR Part 401 Administrative practice and procedure, Great Lakes, Navigation (water), Penalties, Reporting and recordkeeping requirements, Seamen. For the reasons discussed in the preamble, the Coast Guard proposes to amend 46 CFR part 401 as follows: PART 401—GREAT LAKES PILOTAGE REGULATIONS L. Technical Standards 1. The authority citation for part 401 continues to read as follows: 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 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. PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 E:\FR\FM\19AUP1.SGM 19AUP1 51203 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules 2. In § 401.405, revise paragraphs (a) and (b), to read as follows: § 401.405 Basic rates and charges on the St. Lawrence River and Lake Ontario. * * * * (a) Area 1 (Designated Waters): * Service St. Lawrence River Basic Pilotage ................................................................................................................................. Each Lock Transited ....................................................................................................................... Harbor Movage ............................................................................................................................... $18.36 per kilometer or $32.50 per mile*. 407*. 1,333*. * The minimum basic rate for assignment of a pilot in the St. Lawrence River is $889, and the maximum basic rate for a through trip is $3,901. (b) Area 2 (Undesignated Waters): Service Lake Ontario Six-Hour Period ................................................................................................................................................................................... Docking or Undocking ......................................................................................................................................................................... 3. In § 401.407, revise paragraphs (a) and (b), to read as follows: § 401.407 Basic rates and charges on Lake Erie and the navigable waters from Southeast Shoal to Port Huron, MI. * * * * $893 852 (a) Area 4 (Undesignated Waters): * Lake Erie (East of Southeast Shoal) Service Six-Hour Period ............................................................................................................................................... Docking or Undocking ..................................................................................................................................... Any Point on the Niagara River below the Black Rock Lock. ......................................................................... Buffalo $791 609 N/A $791 609 1,554 Detroit Pilot Boat St. Clair River (b) Area 5 (Designated Waters): Toledo or any point on Lake Erie west of Southeast Shoal Southeast Shoal Any point on or in 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 .................................................................. $2,389 *4,162 *4,162 2,389 1,729 Detroit River $1,412 *4,821 N/A 3,102 2,389 $3,102 3,126 3,126 1,412 N/A $2,389 2,432 3,126 N/A N/A N/A 1,729 1,412 3,126 3,126 * When pilots are not changed at the Detroit Pilot Boat. 4. In § 401.410, revise paragraphs (a), (b), and (c) to read as follows: § 401.410 Basic rates and charges on Lakes Huron, Michigan, and Superior, and the St. Mary’s River. * * * * (a) Area 6 (Undesignated Waters): * Lakes Huron and Michigan Service sroberts on DSKD5P82C1PROD with PROPOSALS Six-Hour Period ................................................................................................................................................................................... Docking or Undocking ......................................................................................................................................................................... $688 653 (b) Area 7 (Designated Waters): 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 ......................................................................................................... VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 Gros Cap 2,650 2,650 2,221 2,221 E:\FR\FM\19AUP1.SGM Any harbor N/A 998 998 998 19AUP1 N/A N/A N/A N/A 51204 Federal Register / Vol. 75, No. 160 / Thursday, August 19, 2010 / Proposed Rules Area De Tour Harbor Movage ................................................................................................................ Gros Cap N/A Any harbor N/A 998 (c) Area 8 (Undesignated Waters): Service Lake Superior Six-Hour Period ................................................................................................................................................................................... Docking or Undocking ......................................................................................................................................................................... § 401.420 [Amended] 5. In § 401.420— a. In paragraph (a), remove the text ‘‘$119’’ and add, in its place, the text ‘‘$127’’; and remove the text ‘‘$1,867’’ and add, in its place, the text ‘‘$1,989’’; b. In paragraph (b), remove the text ‘‘$119’’ and add, in its place, the text ‘‘$127’’; and remove the text ‘‘$1,867’’ and add, in its place, the text ‘‘$1,989’’; and c. In paragraph (c)(1), remove the text ‘‘$705’’ and add, in its place, the text ‘‘$751’’; and in paragraph (c)(3), remove the text ‘‘$119’’ and add, in its place, the text ‘‘$127’’, and remove the text ‘‘$1,867’’ and add, in its place, the text ‘‘$1,989’’. § 401.428 [Amended] 6. In § 401.428, remove the text ‘‘$719’’ and add, in its place, the text ‘‘$766’’. Dated: August 11, 2010. Dana A. Goward, Acting Director, Marine Transportation Systems Management, U. S. Coast Guard. [FR Doc. 2010–20544 Filed 8–16–10; 4:15 pm] BILLING CODE 9110–04–P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 17 [Docket No. FWS–R8–ES–2010–0052; 92220–1113–0000C5] Endangered and Threatened Wildlife and Plants; 12-Month Finding on a Petition To Remove the Stephens’ Kangaroo Rat From the Federal List of Endangered and Threatened Wildlife Fish and Wildlife Service, Interior. ACTION: Notice of 12-month petition finding. sroberts on DSKD5P82C1PROD with PROPOSALS AGENCY: We, the U.S. Fish and Wildlife Service (Service), announce a 12-month finding on a petition to remove the Stephens’ kangaroo rat (Dipodomys stephensi) from the Federal List of Endangered and Threatened SUMMARY: VerDate Mar<15>2010 15:57 Aug 18, 2010 Jkt 220001 Wildlife under the Endangered Species Act of 1973, as amended. After a review of the best available scientific and commercial information, we find that delisting the Stephens’ kangaroo rat is not warranted at this time. However, we ask the public to submit to us any new information that becomes available concerning the threats to the Stephens’ kangaroo rat or its habitat at any time. This information will help us monitor and encourage the conservation of this species. DATES: The finding announced in this document was made on August 19, 2010. ADDRESSES: This finding is available on the Internet at https:// www.regulations.gov at Docket Number FWS–R8–ES–2010–0052. Supporting documentation we used in preparing this finding is available for public inspection, by appointment, during normal business hours at the U.S. Fish and Wildlife Service, Carlsbad Fish and Wildlife Office, 6010 Hidden Valley Road, Carlsbad, CA 92011. Please submit any new information, materials, comments, or questions concerning this finding to the above street address. FOR FURTHER INFORMATION CONTACT: Jim Bartel, Field Supervisor, Carlsbad Fish and Wildlife Office (see ADDRESSES); by telephone at 760–431–9440; or by facsimile at 760–431–9624. If you use a telecommunications device for the deaf (TDD), please call the Federal Information Relay Service (FIRS) at 800–877–8339. SUPPLEMENTARY INFORMATION: Background Section 4(b)(3)(B) of the Endangered Species Act of 1973, as amended (Act; 16 U.S.C. 1531 et seq.), requires that, for any petition to revise the Federal List of Endangered and Threatened Wildlife and Plants that contains substantial scientific or commercial information that delisting the species may be warranted, we make a finding within 12 months of the date of receipt of the petition. In this finding, we will determine that the petitioned action is: (1) Not warranted, (2) warranted, or (3) PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 $608 578 warranted, but the immediate proposal of a regulation implementing the petitioned action is precluded by other pending proposals to determine whether species are endangered or threatened, and expeditious progress is being made to add or remove qualified species from the Federal List of Endangered and Threatened Wildlife and Plants. Section 4(b)(3)(C) of the Act requires that we treat a petition for which the requested action is found to be warranted but precluded as though resubmitted on the date of such finding, that is, requiring a subsequent finding to be made within 12 months. We must publish 12-month findings in the Federal Register. Previous Federal Actions We listed Stephens’ kangaroo rat as endangered on September 30, 1988 (53 FR 38465). We published a draft recovery plan for the Stephens’ kangaroo rat on June 23, 1997 (62 FR 33799; Service 1997, pp. 1–71), but it has not been finalized. The draft recovery plan provides recovery guidance and a benchmark for delisting the species (Service 1997, p. 53), consisting of: (1) Establishment of a minimum of five reserves, one of which is ecosystembased, in western Riverside County, California, that encompass at least 6,675 hectares (ha) (16,500 acres (ac)) of occupied habitat that are permanently protected, funded, and managed; and (2) Establishment of two ecosystembased reserves in San Diego County, California, one in the Western Conservation Planning Area and one reserve in the Central Conservation Planning Area, which are permanently protected, funded, and managed. Neither criteria have been met at this time. Discussion of the criteria and their applicability are discussed in the Recovery Planning and Implementation section below. On May 1, 1995, we received a first petition, dated April 26, 1995, from the Riverside County Farm Bureau (RCFB) requesting that the Stephens’ kangaroo rat be removed from the Federal List of Endangered and Threatened Wildlife (in other words, delisted) under the Act. E:\FR\FM\19AUP1.SGM 19AUP1

Agencies

[Federal Register Volume 75, Number 160 (Thursday, August 19, 2010)]
[Proposed Rules]
[Pages 51191-51204]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-20544]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 401

[Docket No. USCG-2010-0517]
RIN 1625-AB48

Great Lakes Pilotage Rates--2011 Annual Review and Adjustment

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Coast Guard proposes to increase the rates for pilotage on
the Great Lakes to generate sufficient revenue to cover allowable
expenses, target pilot compensation, and return on investment. The
proposed update reflects a projected August 1, 2011, increase in
benchmark contractual wages and benefits and an adjustment for
deflation. This rulemaking promotes the Coast Guard's strategic goal of
maritime safety.

DATES: Comments and related material must reach the Docket Management
Facility on or before September 20, 2010.

ADDRESSES: You may submit comments identified by Coast Guard docket
number USCG-2010-0517 to the Docket Management Facility at the U.S.
Department of Transportation. To avoid duplication, please use only one
of the following methods:
(1) Federal eRulemaking Portal: https://www.regulations.gov.
(2) Fax: 202-493-2251.
(3) Mail: Docket Management Facility (M-30), U.S. Department of
Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590-0001.
(4) Hand delivery: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is 202-366-9329.
To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments.

FOR FURTHER INFORMATION CONTACT: For questions on this proposed rule,
call Mr. Paul M. Wasserman, Chief, Great Lakes Pilotage Division,
Commandant (CG-5522), U.S. Coast Guard, at 202-372-1535, by fax 202-
372-1909, or by e-mail at Paul.M.Wasserman@uscg.mil. If you have
questions on viewing or submitting material to the docket, call Renee
V. Wright, Program Manager, Docket Operations, telephone 202-366-9826.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation and Request for Comments
A. Submitting Comments
B. Viewing Comments and Documents
C. Privacy Act
D. Public Meeting
II. Abbreviations
III. Background
IV. Discussion of the Proposed Rule
A. Proposed Pilotage Rate Changes--Summarized
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. Public Participation and Request for Comments

We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted,
without change, to https://www.regulations.gov and will include any
personal information you have provided.

A. Submitting Comments

If you submit a comment, please include the docket number for this
rulemaking (USCG-2010-0517), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these means. We recommend that you include your name and a mailing
address, an e-mail address, or a phone number in the body of your
document so that we can contact you if we have questions regarding your
submission.
To submit your comment online, go to https://www.regulations.gov,
click on the ``submit a comment'' box, which will then become
highlighted in blue. In the ``Document Type'' drop down menu select
``Proposed Rule'' and insert ``USCG-2010-0517'' in the ``Keyword'' box.
Click ``Search'' then click on the balloon shape in the ``Actions''
column. If you submit your comments by mail or hand delivery, submit
them in an unbound format, no larger than 8\1/2\ by 11 inches, suitable
for copying and electronic filing. If you submit comments by mail and
would like to know that they reached the Facility, please enclose a
stamped, self-addressed postcard or envelope.
We will consider all comments and material received during the
comment period and may change this proposed rule based on your
comments.

B. Viewing Comments and Documents

To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to https://www.regulations.gov,
click on the ``read comments'' box, which will then become highlighted
in blue. In the

[[Page 51192]]

``Keyword'' box insert ``USCG-2010-0517'' and click ``Search.'' Click
the ``Open Docket Folder'' in the ``Actions'' column. If you do not
have access to the internet, you may view the docket online by visiting
the Docket Management Facility in Room W12-140 on the ground floor of
the Department of Transportation West Building, 1200 New Jersey Avenue
SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. We have an agreement with the
Department of Transportation to use the Docket Management Facility.

C. Privacy Act

Anyone can search the electronic form of all comments received into
any of our dockets by the name of the individual submitting the comment
(or signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act system of
records notice regarding our public dockets in the January 17, 2008
issue of the Federal Register (73 FR 3316).

D. Public Meeting

We do not plan to hold a public meeting. But you may submit a
request for one to the Docket Management Facility at the address under
ADDRESSES explaining why one would be beneficial. If we determine that
one would aid this rulemaking, we will hold one at a time and place
announced by a later notice in the Federal Register.

II. Abbreviations

AMOU American Maritime Officers Union
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
NEPA National Environmental Policy Act of 1969
NPRM Notice of proposed rulemaking
NVMC National Vessel Movement Center
OMB Office of Management and Budget

III. Background

This notice of proposed rulemaking (NPRM) is issued pursuant to
Coast Guard regulations in 46 CFR Parts 401-404. Those regulations
implement the Great Lakes Pilotage Act of 1960, 46 U.S.C. Chapter 93
(``the Act''), which requires foreign-flag vessels and U.S.-flag
vessels engaged in foreign trade to use federally registered Great
Lakes pilots while transiting the St. Lawrence Seaway and the Great
Lakes system, and which 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.'' 46 U.S.C. 9303(f). There is no minimum tonnage limit or
exemption for these vessels, but the Coast Guard's interpretation is
that the Act applies only to commercial vessels and not to recreational
vessels.
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 the Coast Guard sets rates, it does not 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 No. 3385, as amended by
Proclamation No. 3855, pursuant to the Act, 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).
The Act requires annual reviews of pilotage rates and the setting
of new rates at least once every five years, or sooner, if annual
reviews show a need. 46 U.S.C. 9303(f), 46 CFR 404.1. To assist in
calculating pilotage rates, the pilotage associations are required to
submit to the Coast Guard annual financial statements prepared by
certified public accounting firms. In addition, every fifth year, in
connection with the mandatory rate adjustment, the Coast Guard obtains
a full and independent 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, the Coast Guard generates the pilotage rates using Appendix
A to 46 CFR Part 404. Between the five-year full ratemaking intervals,
the Coast Guard annually reviews the pilotage rates using Appendix C to
Part 404, and adjusts rates when deemed appropriate. Terms and formulas
used in Appendix A and Appendix C are defined in Appendix B to Part
404.
The last full ratemaking using the Appendix A methodology was
published on April 3, 2006 (71 FR 16501). Since then, rates have been
reviewed under Appendix C and adjusted annually: 2007 (72 FR 53158,
Sep. 18, 2007); 2008 (interim rule 73 FR 15092, Mar. 21, 2008; final
rule 74 FR 220, Jan. 5, 2009); 2009 (74 FR 35812, Jul. 21, 2009); 2010
(75 FR 7958, Feb. 23, 2010). The present rulemaking proposes a rate
adjustment for the 2011 shipping season, based on an Appendix C review.
At the conclusion of this ratemaking cycle, we anticipate publishing an
NPRM proposing a rate adjustment based upon an Appendix A 5-year review
and audit of the pilot association books and records.
As we stated in the NPRM for our 2010 Appendix C ratemaking, 74 FR
56153 at 56154 (Oct. 30, 2009), we had anticipated that the next
Appendix A ratemaking would be completed in 2011. However, the current
rulemaking is not an Appendix A review because the Coast Guard cannot
use the audits conducted in 2009 in preparation for the next Appendix A
review. Those audits were incomplete and inadequate for determining the
expenses of the regulated associations or for use in ratemaking.
The Coast Guard has contracted for new audits that will be
conducted during the 2010 navigation season. These audits will serve as
the basis for the next Appendix A review, which we will undertake as
soon as possible.

IV. Discussion of the Proposed Rule

The Act and Coast Guard pilotage regulations require that the Coast
Guard, as delegated by the Secretary of Homeland Security, review the
pilotage rates annually. If the annual review shows that pilotage rates
are within a reasonable range of the base target pilot compensation set
in the previous ratemaking, no adjustment to the rates will be
initiated. However, if the annual review indicates that an adjustment
is necessary, then the Coast Guard will establish new pilotage rates
pursuant to 46 CFR 404.10.

[[Page 51193]]

A. Proposed Pilotage Rate Changes--Summarized

The Appendix C to 46 CFR 404 ratemaking methodology is intended for
use during the years between Appendix A full ratemaking reviews and
adjustments. This section summarizes the rate changes proposed for
2011, and then discusses in detail how the proposed changes were
calculated under Appendix C.
We are proposing an increase across all Areas over the last
pilotage rate adjustment. This reflects a projected August 1, 2011,
increase in benchmark contractual wages and benefits and a deflation
adjustment. This rate increase would not go into effect until August 1,
2011, after the current benchmark contracts expire. Actual rate
increases vary by Area, and are summarized in Table 1.

Table 1--2011 Area Rate Changes
------------------------------------------------------------------------
Then the proposed
percentage increases
If pilotage service is required in: over the current
rate is:
------------------------------------------------------------------------
Area 1 (Designated waters)........................ 3.57
Area 2 (Undesignated waters)...................... 3.77
Area 4 (Undesignated waters)...................... 3.75
Area 5 (Designated waters)........................ 3.52
Area 6 (Undesignated waters)...................... 4.89
Area 7 (Designated waters)........................ 3.56
Area 8 (Undesignated waters)...................... 5.26
------------------------------------------------------------------------

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
6.51 percent in all Areas based upon the calculations appearing at
Tables 19 through 21, which appear below.

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 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 2010 Appendix C review. The Coast Guard uses the most recent union
contracts between the American Maritime Officers Union (AMOU) and
vessel owners and operators on the Great Lakes to estimate target pilot
compensation. However, the current AMOU contracts expire in July 2011,
and the Coast Guard has been informed that contract negotiations will
not begin until sometime that year, which is well after the pilotage
statute requires that we establish a rate. Accordingly, we have
reviewed the terms of both the existing and past AMOU contracts and
have projected, for purposes of this ratemaking, that the AMOU
contracts effective in 2011 would provide increases in compensation
equal to 3 percent, which is the increase called for in the AMOU
contracts over the last two years. We project all other benefits to
remain fixed at current levels with the exception of medical plan
contributions. Medical plan contributions have increased by 10 percent
per year from 2006 through 2010 in the current AMOU contracts. Thus, we
forecast an increase of 10 percent over 2010 medical plan contributions
for the AMOU contracts in 2011. Bridge hour projections for the 2011
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.
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 (2010), Areas in District
One
------------------------------------------------------------------------
Area 1 St. Area 2 Lake
Lawrence River Ontario
------------------------------------------------------------------------
Base operating expense (less $578,569 $590,032
base return element)...........
Base target pilot compensation.. + $1,677,397 + $1,020,120
Base return element............. + $11,571 + $17,701
---------------------------------------

[[Page 51194]]

Subtotal.................... = $2,267,537 = $1,627,853
=======================================
Base bridge hours............... / 5,203 / 5,650
Base cost per bridge hour....... = $435.81 = $288.12
------------------------------------------------------------------------

Table 3--Total Economic Cost for Base Period (2010), Areas in District
Two
------------------------------------------------------------------------
Area 5 Southeast
Area 4 Lake Erie Shoal to Port
Huron, MI
------------------------------------------------------------------------
Base operating expense.......... $541,103 $848,469
Base target pilot compensation.. + $816,096 + $1,677,397
Base return element............. + $27,055 + $33,939
---------------------------------------
Subtotal.................... = $1,384,254 = $2,559,805
=======================================
Base bridge hours............... / 7,320 / 5,097
Base cost per bridge hour....... = $189.11 = $502.22
------------------------------------------------------------------------

Table 4--Total Economic Cost for Base Period (2010), Areas in District Three
----------------------------------------------------------------------------------------------------------------
Area 6 Lakes Huron Area 7 St. Mary's Area 8 Lake
and Michigan River Superior
----------------------------------------------------------------------------------------------------------------
Base operating expense.............................. $877,638 $428,384 $691,435
Base target pilot compensation...................... + $1,632,191 + $1,118,265 + $1,428,167
Base return element................................. + $35,106 + $12,852 + $20,743
-----------------------------------------------------------
Subtotal........................................ = $2,544,935 = $1,559,501 = $2,140,345
===========================================================
Base bridge hours................................... / 13,406 / 3,259 / 11,630
Base cost per bridge hour........................... = $189.84 = $478.52 = $184.04
----------------------------------------------------------------------------------------------------------------

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
------------------------------------------------------------------------
Base operating expense.......... $578,569 $590,032
Base return element............. + $11,571 + $17,701
---------------------------------------
Subtotal.................... = $590,140 = $607,733
=======================================
Base target pilot compensation.. / $1,677,397 / $1,020,120
Expense multiplier.............. 0.35182 0.59575
------------------------------------------------------------------------

Table 6--Expense Multiplier, Areas in District Two
------------------------------------------------------------------------
Area 5 Southeast
Area 4 Lake Erie Shoal to Port
Huron, MI
------------------------------------------------------------------------
Base operating expense.......... $541,103 $848,469
Base return element............. + $27,055 + $33,939
---------------------------------------
Subtotal.................... = $568,158 = $882,408
=======================================
Base target pilot compensation.. / $816,096 / $1,677,397
Expense multiplier.............. 0.69619 0.52606
------------------------------------------------------------------------

[[Page 51195]]

Table 7--Expense Multiplier, Areas in District Three
----------------------------------------------------------------------------------------------------------------
Area 6 Lakes Huron Area 7 St. Mary's Area 8 Lake
and Michigan River Superior
----------------------------------------------------------------------------------------------------------------
Base operating Expense.............................. $877,638 $428,384 $691,435
Base return element................................. + $35,106 + $12,852 + $20,743
-----------------------------------------------------------
Subtotal........................................ = $912,744 = $441,236 = $712,178
===========================================================
Base target pilot compensation...................... / $1,632,191 / $1,118,265 / $1,428,167
Expense multiplier.................................. 0.55921 0.39457 0.49867
----------------------------------------------------------------------------------------------------------------

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 percent plus benefits). To determine first mates' and
masters' average annual compensation, we typically 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 July 2010, 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 will expire on July 31, 2011.
Based on discussions with AMOU officials, these contracts are not
expected to be negotiated until 2011. This does not provide sufficient
time to incorporate new rates into the ratemaking process for the 2011
shipping season. The Coast Guard projects that when new AMOU contracts
are negotiated in 2011, they would provide for a 3 percent wage
increase effective August 1, 2011. This is in keeping with the recent
contractual wage raises under the existing union contracts. Both 2009
and 2010 saw wage raises of 3 percent. Under Agreement A, we project
that the daily wage rate would increase from $270.61 to $278.73. Under
Agreement B, the daily wage rate would increase from $333.58 to
$343.59. All other benefits and calculations for these contracts are
forecasted to remain identical to the current AMOU contracts. The
pension plan contribution, which has been a fixed amount, the 401k
employers matching contribution of 5 percent of wages, which is also a
set amount, and the monthly contract multipliers are all projected to
remain fixed at current AMOU contract levels. These benefits have not
changed their numerical or percentage values over the course of the
previous AMOU agreements still in effect. We do not project that the
2011 contracts would have any impact on these fixed benefits.
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 projected Agreements A
and B to be effective as of August 1, 2011.

Table 8--Wages
------------------------------------------------------------------------
Pilots on
Pilots on designated
Monthly component undesignated waters
waters (undesignated x
150%)
------------------------------------------------------------------------
AGREEMENT A: $278.73 daily rate x $15,191 $22,786
54.5 days..........................
AGREEMENT A: Monthly total x 9 136,716 205,074
months = total wages...............
AGREEMENT B: $343.59 daily rate x 17,008 25,511
49.5 days..........................
AGREEMENT B: Monthly total x 9 153,068 229,602
months = total wages...............
------------------------------------------------------------------------

Both Agreements A and B currently include a health benefits
contribution rate of $88.76. On average, this benefit contribution has
increased at a rate of 10 percent per year throughout the lives of the
existing five-year contracts. Accordingly, for purposes of the 2011
rate we project that when new AMOU contracts are negotiated in 2011,
this contribution would increase to $97.64 effective August 1, 2011. We
project that Agreement A would continue to include a pension plan
contribution rate of $33.35 per man-day and that Agreement B would
continue to include a pension plan contribution rate of $43.55 per man-
day. Similarly, we expect both Agreements A and B to continue to
provide a 5 percent 401K employer matching provision. Accordingly, for
purposes of the 2011 rate, we will continue to use these values in
calculating total pilot compensation. Currently, neither Agreement A
nor Agreement B includes a clerical contribution that appeared in
earlier contracts, and we project that this

[[Page 51196]]

would not be a feature of any new AMOU contracts negotiated in 2011. We
project that the multiplier used to calculate monthly benefits would
remain the same at 45.5 days.
Table 9 shows new benefit calculations based on projected
Agreements A and B, effective August 1, 2011.

Table 9--Benefits
------------------------------------------------------------------------
Pilots on Pilots on
Monthly component undesignated designated
waters waters
------------------------------------------------------------------------
AGREEMENT A: Employer contribution, $759.53 $1,139.30
401(K) plan (Monthly Wages x 5%)...
Pension = $33.35 x 45.5 days........ $1,517.43 $1,517.43
Health = $97.64 x 45.5 days......... $4,442.62 $4,442.62
AGREEMENT B: Employer contribution, $850.38 $1,275.57
401(K) plan (Monthly Wages x 5%)...
Pension = $43.55 x 45.5 days........ $1,981.53 $1,981.53
Health = $97.64 x 45.5 days......... $4,442.62 $4,442.62
AGREEMENT A: Monthly total benefits. = $6,719.58 = $7,099.35
AGREEMENT A: Monthly total benefits = $60,476 = $63,894
x 9 months.........................
AGREEMENT B: Monthly total benefits. = $7,274.52 = $7,699.71
AGREEMENT B: Monthly total benefits = $65,471 = $69,297
x 9 months.........................
------------------------------------------------------------------------

Table 10--Total Wages and Benefits
------------------------------------------------------------------------
Pilots on Pilots on
undesignated designated
waters waters
------------------------------------------------------------------------
AGREEMENT A: Wages.................. $136,716 $205,074
AGREEMENT A: Benefits............... + $60,476 + $63,894
AGREEMENT A: Total.................. = $197,192 = $268,968
AGREEMENT B: Wages.................. $153,068 $229,602
AGREEMENT B: Benefits............... + $65,471 + $69,297
AGREEMENT B: Total.................. = $218,539 = $298,900
------------------------------------------------------------------------

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.
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
waters Designated waters
------------------------------------------------------------------------
AGREEMENT A: Total wages and $197,192 x $268,968 x
benefits x percent tonnage. 29.7238% = 29.7238% =
$58,613. $79,948.
AGREEMENT B: Total wages and $218,539 x $298,900 x
benefits x percent tonnage. 70.2762% = 70.2762% =
$153,581. $210,055.
Total weighted average wages and $58,613 + $153,581 $79,948 + $210,055
benefits = projected target = $212,194. = $290,003.
rate of compensation.
------------------------------------------------------------------------

(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 2011

[[Page 51197]]

navigation season, in Districts 1 and 2, would remain unchanged from
the 2010 projections noted in Table 13 of the 2010 final rule. In
District 3, in both Areas 6 and 8, dropping bridge hours require the
removal of two unused authorizations for pilots, one for each Area.
There are no pilots currently in either of these slots and no jobs are
being lost as a result of this action. The removal of these two pilot
billets merely attempts to mitigate a significant downward trend across
the undesignated waters of District 3. The bridge hours for the
designated waters of Area 7, like Districts 1 and 2, would remain
unchanged from the 2010 projections.
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 the
previous three annual ratemakings, and for the reasons described in
detail in the 2008 final rule (74 FR 220 at 221-222), 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
Projected 2011 bridge (designated waters) or Pilots needed (total =
Pilotage area hours 1,800 (undesignated 38)
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............................... 11,606 1,800 7
Area 7............................... 3,259 1,000 4
Area 8............................... 9,830 1,800 6
----------------------------------------------------------------------------------------------------------------

(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.

Table 14--Projected Target Pilot Compensation
----------------------------------------------------------------------------------------------------------------
Pilots needed (total = Multiplied by target Projected target pilot
Pilotage area 38) rate of compensation compensation
----------------------------------------------------------------------------------------------------------------
Area 1............................... 6 x $290,003 $1,740,018
Area 2............................... 5 x 212,194 1,060,970
Area 4............................... 4 x 212,194 848,776
Area 5............................... 6 x 290,003 1,740,018
Area 6............................... 7 x 212,194 1,485,357
Area 7............................... 4 x 290,003 1,160,012
Area 8............................... 6 x 212,194 1,273,164
----------------------------------------------------------------------------------------------------------------

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 Multiplied by expense Projected operating
Pilotage area compensation multiplier expense
----------------------------------------------------------------------------------------------------------------
Area 1............................... $1,740,018 x 0.35182 = $612,171
Area 2............................... 1,060,970 x 0.59575 = 632,069
Area 4............................... 848,776 x 0.69619 = 590,909
Area 5............................... 1,740,018 x 0.52606 = 915,350
Area 6............................... 1,485,357 x 0.55921 = 830,633
Area 7............................... 1,160,012 x 0.39457 = 457,708
Area 8............................... 1,273,164 x 0.49867 = 634,883
----------------------------------------------------------------------------------------------------------------

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 https://www.bls.gov/xg_shells/ro5xg01.htm, we have
multiplied the results in Step 4 by a 0.994 deflation factor,
reflecting an average deflation rate of 0.6 percent between 2008 and
2009, the latest years for which data are available. Table 16 shows
this calculation and the projected total economic cost.

[[Page 51198]]

Table 16--Projected Total Economic Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
B. Increase, multiplied D. Projected total
Pilotage area A. Projected operating by deflation factor (= C. Projected target economic cost (= B +
expense A x 0.994) pilot compensation C)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Area 1.............................................. $612,171 $608,498 $1,740,018 $2,348,516
Area 2.............................................. 632,069 628,277 1,060,970 1,689,246
Area 4.............................................. 590,909 587,364 848,776 1,436,140
Area 5.............................................. 915,350 909,858 1,740,018 2,649,876
Area 6.............................................. 830,633 825,649 1,485,357 2,311,006
Area 7.............................................. 457,708 454,962 1,160,012 1,614,974
Area 8.............................................. 634,883 631,074 1,273,164 1,904,237
--------------------------------------------------------------------------------------------------------------------------------------------------------

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 (total)
Pilotage area A. Projected total B. Projected 2011 unit costs (A divided
economic cost bridge hours by B)
----------------------------------------------------------------------------------------------------------------
Area 1............................... $2,348,516 5,203 $451.38
Area 2............................... 1,689,246 5,650 298.98
Area 4............................... 1,436,140 7,320 196.19
Area 5............................... 2,649,876 5,097 519.89
Area 6............................... 2,311,006 11,606 199.12
Area 7............................... 1,614,974 3,259 495.54
Area 8............................... 1,904,237 9,830 193.72
----------------------------------------------------------------------------------------------------------------

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
A. Prospective unit B. Base period unit from base (A divided
Pilotage area costs costs by B; result expressed
as percentage)
----------------------------------------------------------------------------------------------------------------
Area 1............................... $451.38 $435.81 3.57
Area 2............................... 298.98 288.12 3.77
Area 4............................... 196.19 189.11 3.75
Area 5............................... 519.89 502.22 3.52
Area 6............................... 199.12 189.84 4.89
Area 7............................... 495.54 478.52 3.56
Area 8............................... 193.72 184.04 5.26
----------------------------------------------------------------------------------------------------------------

We use the percentage change between the prospective overall unit
cost and the base overall unit cost to increase 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). This calculation is derived from the Appendix C
ratemaking methodology found at 46 CFR 404.10, and differs from the
area rate calculation by using total costs and total bridge hours for
all areas. Tables 19 through 21 show this calculation.

Table 19--Calculation of Base Period Overall Unit Cost
----------------------------------------------------------------------------------------------------------------
A. Base period C. Base period
(2010) overall B. Base period (2010) overall
total economic (2010) overall unit cost (A
costs bridge hours divided by B)
----------------------------------------------------------------------------------------------------------------
Sum of all Areas....................................... $14,084,230 51,565 $273.14
----------------------------------------------------------------------------------------------------------------

[[Page 51199]]

Table 20--Calculation of Projected Period Overall Unit Cost
----------------------------------------------------------------------------------------------------------------
A. Projected B. Projected C. Base period
period (2011) period (2011) (2011) overall
overall total overall bridge unit cost (A
economic costs hours divided by B)
----------------------------------------------------------------------------------------------------------------
Sum of all Areas....................................... $13,953,996 47,965 $290.92
----------------------------------------------------------------------------------------------------------------

Table 21--Percentage Change in Overall Prospective Unit Costs/Base Unit Cost
----------------------------------------------------------------------------------------------------------------
C. Percentage
change from
A. Prospective B. Base period overall base
overall unit cost overall unit cost unit cost (A
divided by B)
----------------------------------------------------------------------------------------------------------------
Across all Areas....................................... $290.92 273.14 6.51
----------------------------------------------------------------------------------------------------------------

Step 8: Adjust the base period rates by the percentage change in
unit costs in Step 7. Table 22 shows this calculation.

Table 22--Base Period Rates Adjusted by Percentage Change in Unit Costs
----------------------------------------------------------------------------------------------------------------
B. Percentage D. Adjusted rate
A. Base period rate change in unit C. Increase in base (A + C, rounded to
costs rate (A x B%) nearest dollar)
----------------------------------------------------------------------------------------------------------------
*Pilotage area ................... (Multiplying
Factor)
----------------------------------------------------------------------------------------------------------------
Area 1: 3.57 (1.0357)
--Basic pilotage............ $17.73/km, $31.38/ ................ $0.63/km, $1.12/mi. $18.36/km, $32.50/
mi. mi.
--Each lock transited....... $393............... ................ $14.03............. $407.
--Harbor movage............. $1,287............. ................ $45.95............. $1,333.
--Minimum basic rate, St. $858............... ................ $30.63............. $889.
Lawrence River.
--Maximum rate, through trip $3,767............. ................ $134.48............ $3,901.
Area 2: 3.77 (1.0377)
--6-hr. period.............. $861............... ................ $32.46............. $893.
--Docking or undocking...... $821............... ................ $30.95............. $852.
Area 4: 3.75 (1.0375)
--6-hr. period.............. $762............... ................ $28.58............. $791.
--Docking or undocking...... $587............... ................ $22.01............. $609.
--Any point on Niagara River $1,498............. ................ $56.18............. $1,554.
below Black Rock Lock.
Area 5 between any point on or ................... 3.52 (1.0352)
in:
--Toledo or any point on $1,364............. ................ $48.01............. $1,412.
Lake Erie W. of Southeast
Shoal.
--Toledo or any point on $2,308............. ................ $81.24............. $2,389.
Lake Erie W. of Southeast
Shoal & Southeast Shoal.
--Toledo or any point on $2,997............. ................ $105.49............ $3,102.
Lake Erie W. of Southeast
Shoal & Detroit River.
--Toledo or any point on $2,308............. ................ $81.24............. $2,389.
Lake Erie W. of Southeast
Shoal & Detroit Pilot Boat.
--Port Huron Change Point & $4,020............. ................ $141.50............ $4,162.
Southeast Shoal (when
pilots are not changed at
the Detroit Pilot Boat).
--Port Huron Change Point & $4,657............. ................ $163.93............ $4,821.
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 & $3,020............. ................ $106.30............ $3,126.
Detroit River.
--Port Huron Change Point & $2,349............. ................ $82.68............. $2,432.
Detroit Pilot Boat.
--Port Huron Change Point & $1,670............. ................ $58.78............. $1,729.
St. Clair River.
--St. Clair River........... $1,364............. ................ $48.01............. $1,412.
--St. Clair River & $4,020............. ................ $141.50............ $4,162.
Southeast Shoal (when
pilots are not changed at
the Detroit Pilot Boat).
--St. Clair River & Detroit $3,020............. ................ $106.30............ $3,126.
River/Detroit Pilot Boat.
--Detroit, Windsor, or $1,364............. ................ $48.01............. $1,412.
Detroit River.
--Detroit, Windsor, or $2,308............. ................ $81.24............. $2,389.
Detroit River & Southeast
Shoal.
--Detroit, Windsor, or $2,997............. ................ $105.49............ $3,102.
Detroit River & Toledo or
any point on Lake Erie W.
of Southeast Shoal.
--Detroit, Windsor, or $3,020............. ................ $106.30............ $3,126.
Detroit River & St. Clair
River.
--Detroit Pilot Boat & $1,670............. ................ $58.78............. $1,729.
Southeast Shoal.
--Detroit Pilot Boat & $2,308............. ................ $81.24............. $2,389.
Toledo or any point on Lake
Erie W. of Southeast Shoal.
--Detroit Pilot Boat & St. $3,020............. ................ $106.30............ $3,126.
Clair River.
Area 6: 4.89 (1.0489)
--6-hr. period.............. $656............... ................ $32.08............. $688.
--Docking or undocking...... $623............... ................ $30.46............. $653.

[[Page 51200]]

Area 7 between any point on or 3.56 (1.0356)
in:
--Gros Cap & De Tour........ $2,559............. ................ $91.10............. $2,650.
--Algoma Steel Corp. Wharf, $2,559............. ................ $91.10............. $2,650.
Sault Ste. Marie, Ont. & De
Tour.
--Algoma Steel Corp. Wharf, $964............... ................ $34.32............. $998.
Sault Ste. Marie, Ont. &
Gros Cap.
--Any point in Sault Ste. $2,145............. ................ $76.36............. $2,221.
Marie, Ont., except the
Algoma Steel Corp. Wharf &
De Tour.
--Any point in Sault Ste. $964............... ................ $34.32............. $998.
Marie, Ont., except the
Algoma Steel Corp. Wharf &
Gros Cap.
--Sault Ste. Marie, MI & De $2,145............. ................ $76.36............. $2,221.
Tour.
--Sault Ste. Marie, MI & $964............... ................ $34.32............. $998.
Gros Cap.
--Harbor movage............. $964............... ................ $34.32............. $998.
Area 8: 5.26 (1.0526)
--6-hr. period.............. $578............... ................ $30.40............. $608.
--Docking or undocking...... $549............... ................ $28.88............. $578.
----------------------------------------------------------------------------------------------------------------
* 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 6.51% across all
areas (see Table 21).

VI. Regulatory Analyses

We developed this proposed 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

This proposed rule is not a significant regulatory action under
section 3(f) of Executive Order 12866, Regulatory Planning and Review,
and does not require an assessment of potential costs and benefits
under section 6(a)(3) of that Order. The Office of Management and
Budget has not reviewed it under that Order. A draft Regulatory
Assessment follows:
The Coast Guard is required to conduct an annual review of pilotage
rates on the Great Lakes and, if necessary, adjust these rates to align
compensation levels between Great Lakes pilots and industry. See the
``Background'' section for a detailed explanation of the legal
authority and requirements for the Coast Guard to conduct an annual
review and provide possible adjustments of pilotage rates on the Great
Lakes. Based on our annual review for this proposed rulemaking, we are
adjusting the pilotage rates for the 2011 shipping season to generate
sufficient revenue to cover allowable expenses, target pilot
compensation, and returns on investment.
This proposed rule would implement rate adjustments for the Great
Lakes system over the current rates adjusted in the 2010 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
deflation and projected 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. The Coast Guard's interpretation is 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
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. Coast Guard sampling of pilot data suggests
there are very few U.S. domestic vessels, without registry and
operating only in the Great Lakes, that voluntarily purchase pilotage
services.
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 pilotage areas 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, based on 2006-2008
vessel data from MISLE.
The impact of the rate adjustment to shippers is estimated from
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 (costs or savings) of the rate
adjustment in this proposed rule to be the difference between the total
projected revenue needed to cover costs based on the 2010 rate
adjustment and the total projected revenue needed to cover costs in
this proposed rule for 2011. Table 23 details additional costs or
savings by area.

[[Page 51201]]

Table 23--Rate Adjustment and Additional Impact of the Proposed Rule by Area
[$U.S.; non-discounted]
----------------------------------------------------------------------------------------------------------------
Change in Additional cost
Total projected projected Total projected or savings of

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