Great Lakes Pilotage Rates-2025 Annual Review, 63334-63381 [2024-17028]
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Dated: July 30, 2024.
Nicole D. Rodriguez,
Captain, U.S. Coast Guard, Alternate Captain
of the Port Sector Houston-Galveston.
[FR Doc. 2024–17144 Filed 8–2–24; 8:45 am]
BILLING CODE 9110–04–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
46 CFR Part 401
[Docket No. USCG–2024–0406]
RIN 1625–AC94
Great Lakes Pilotage Rates—2025
Annual Review
Coast Guard, DHS.
Notice of proposed rulemaking.
AGENCY:
ACTION:
In accordance with the
statutory provisions enacted by the
Great Lakes Pilotage Act of 1960, the
Coast Guard is proposing new pilotage
rates for 2025. The Coast Guard
estimates that this proposed rule would
result in approximately a 7 percent
increase in operating costs compared to
the 2024 season. The proposed new
pilotage rates are the result of increases
in both the number of Pilots and
revenue needed for the working capital
fund.
DATES: Comments and related material
must be received by the Coast Guard on
or before September 4, 2024.
ADDRESSES: You may submit comments
identified by docket number USCG–
2024–0406 using the Federal DecisionMaking Portal at www.regulations.gov.
See the ‘‘Public Participation and
Request for Comments’’ portion of the
SUPPLEMENTARY INFORMATION section for
further instructions on submitting
comments. This notice of proposed
rulemaking with its plain-language, 100word-or-less proposed rule summary
will be available in this same docket.
FOR FURTHER INFORMATION CONTACT: For
information about this document call or
email Mr. Brian Rogers, Commandant,
Office of Waterways and Ocean Policy—
Great Lakes Pilotage Division (CG–
WWM–2), Coast Guard; telephone 410–
360–9260, email Brian.Rogers@uscg.mil.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
Table of Contents for Preamble
I. Public Participation and Request for
Comments
II. Abbreviations
III. Basis and Purpose
IV. Background
V. Summary of the Ratemaking Methodology
VI. Discussion of Proposed Rate Adjustments
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District One
A. Step 1: Recognize Previous Operating
Expenses
B. Step 2: Project Operating Expenses,
Adjusting for Inflation or Deflation
C. Step 3: Estimate Number of Registered
Pilots and Apprentice Pilots
D. Step 4: Determine Target Pilot
Compensation Benchmark and
Apprentice Pilot Wage Benchmark
E. Step 5: Project Working Capital Fund
F. Step 6: Project Needed Revenue
G. Step 7: Calculate Initial Base Rates
H. Step 8: Calculate Average Weighting
Factors by Area
I. Step 9: Calculate Revised Base Rates
J. Step 10: Review and Finalize Rates
District Three
A. Step 1: Recognize Previous Operating
Expenses
B. Step 2: Project Operating Expenses,
Adjusting for Inflation or Deflation
C. Step 3: Estimate Number of Registered
Pilots and Apprentice Pilots
D. Step 4: Determine Target Pilot
Compensation Benchmark and
Apprentice Pilot Wage Benchmark
E. Step 5: Project Working Capital Fund
F. Step 6: Project Needed Revenue
G. Step 7: Calculate Initial Base Rates
H. Step 8: Calculate Average Weighting
Factors by Area
I. Step 9: Calculate Revised Base Rates
J. Step 10: Review and Finalize Rates
VII. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates
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
The Coast Guard views public
participation as essential to effective
rulemaking and will consider all
comments and material received during
the comment period. Your comment can
help shape the outcome of this
rulemaking. If you submit a comment,
please include the docket number for
this rulemaking, indicate the specific
section of this document to which each
comment applies, and provide a reason
for each suggestion or recommendation.
Submitting comments. We encourage
you to submit comments through the
Federal Decision-Making Portal at
www.regulations.gov. To do so, go to
https://www.regulations.gov, type
USCG–2024–0406 in the search box and
click ‘‘Search.’’ Next, look for this
document in the Search Results column,
and click on it. Then click on the
Comment option. If you cannot submit
your material by using
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www.regulations.gov, call or email the
person in the FOR FURTHER INFORMATION
CONTACT section of this proposed rule
for alternative instructions.
Viewing material in docket. To view
documents mentioned in this proposed
rule as being available in the docket,
find the docket as described in the
previous paragraph, and then select
‘‘Supporting & Related Material’’ in the
Document Type column. Public
comments will also be placed in our
online docket and can be viewed by
following instructions on the
www.regulations.gov ‘‘Frequently Asked
Questions’’ (FAQ) web page. That FAQ
page also explains how to subscribe for
email alerts that will notify you when
comments are posted or if a final rule is
published. We review all comments
received, but we will only post
comments that address the topic of the
proposed rule. We may choose not to
post off-topic, inappropriate, or
duplicate comments that we receive.
Personal information. We accept
anonymous comments. Comments we
post to www.regulations.gov will
include any personal information you
have provided. For more about privacy
and submissions to the docket in
response to this document, see DHS’s
eRulemaking System of Records notice
(85 FR 14226, March 11, 2020).
Public meeting. We do not plan to
hold a public meeting, but we will
consider doing so if we determine from
public comments that a meeting would
be helpful. We would issue a separate
Federal Register notice to announce the
date, time, and location of such a
meeting.
II. Abbreviations
2024 final rule Great Lakes Pilotage Rates—
2024 Annual Review
2023 final rule Great Lakes Pilotage Rates—
2023 Annual Ratemaking and Review of
Methodology
APA American Pilots’ Association
BLS Bureau of Labor Statistics
CFR Code of Federal Regulations
CPI Consumer Price Index
DHS Department of Homeland Security
Director U.S. Coast Guard’s Director of the
Great Lakes Pilotage
ECI Employment Cost Index
FOMC Federal Open Market Committee
FR Federal Register
GLPAC Great Lakes Pilotage Advisory
Committee
LPA Lakes Pilots Association
NAICS North American Industry
Classification System
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
PCE Personal Consumption Expenditures
§ Section
SBA Small Business Administration
SLSPA Saint Lawrence Seaway Pilot
Association
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
U.S.C. United States Code
WGLPA Western Great Lakes Pilots
Association
III. Basis and Purpose
The legal basis of this rulemaking is
Title 46 of the United States Code
(U.S.C.) Chapter 93,1 which requires
foreign merchant vessels and United
States vessels operating ‘‘on register’’
(meaning United States vessels engaged
in foreign trade) to use United States or
Canadian pilots while transiting the
United States waters of the St. Lawrence
Seaway and the Great Lakes system.2
For U.S. Great Lakes Pilots, the statute
requires the Secretary to ‘‘prescribe by
regulation rates and charges for pilotage
services, giving consideration to the
public interest and the costs of
providing the services.’’ Title 46 of the
U.S.C. 9303(f) also requires that rates be
established or reviewed and adjusted
each year, no later than March 1. The
Secretary’s duties and authority under
46 U.S.C. Chapter 93 have generally
been delegated to the Coast Guard.3
The purpose of this proposed rule is
to issue new pilotage rates for 2025. The
Coast Guard believes that the new rates
will continue to promote our goal, as
outlined in title 46 of the Code of
Federal Regulations (CFR), 404.1(a), to
promote safe, efficient, and reliable
pilotage service in the Great Lakes by
generating sufficient revenue for each
pilot association to reimburse its
necessary and reasonable operating
expenses, fairly compensate trained and
rested Pilots, and provide appropriate
funds to use for improvements.
IV. Background
Rates are the foundation for safe,
efficient, and reliable pilotage service to
facilitate maritime commerce, protect
the marine environment, and comply
with National Transportation Safety
Board recommendations regarding
staffing and pilot fatigue. The pilotage
rates for the 2025 season range from a
proposed $438 to $981 per pilot hour,
depending on which of the specific 6
areas pilotage service is provided. The
rates are paid by shippers to the pilot
associations.
There are three American pilotage
districts on the Great Lakes, each
represented by a pilot association.4 Each
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1 46
U.S.C. 9301–9308.
U.S.C. 9302(a)(1).
3 Department of Homeland Security (DHS)
Delegation No. 00170.1 (II)(92)(f), Revision No. 01.4.
The Secretary retains the authority under Section
9307 to establish, and appoint members to, a Great
Lakes Pilotage Advisory Committee (GLPAC).
4 The Saint Lawrence Seaway Pilotage
Association (SLSPA) provides pilotage services in
District One, which includes all U.S. waters of the
St. Lawrence River and Lake Ontario. The Lakes
2 46
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pilotage district is further divided into
‘‘designated’’ and ‘‘undesignated’’ areas.
Designated areas, classified as such by
Presidential Proclamation, are waters in
which pilots must direct the navigation
of vessels at all times.5 Undesignated
areas are open bodies of water where
pilots must only ‘‘be on board and
available to direct the navigation of the
vessel’’ at the discretion of the vessel
master.6 For these reasons, pilotage rates
in designated areas can be significantly
higher than those in undesignated areas.
The three pilot associations, which
are the exclusive U.S. source of
Registered Pilots on the Great Lakes, use
the revenue from the shippers to cover
operating expenses, maintain
infrastructure, compensate Apprentice
and Registered Pilots, acquire and
implement technological advances, train
new personnel, and provide for
continuing professional development.
Each pilot association is an independent
business and is the sole provider of
pilotage services in its district of
operation. Each pilot association is
responsible for funding its own
operating expenses, infrastructure
maintenance, and compensation for
Pilots and Apprentice Pilots.7
The actual demand for service
dictates the compensation amount for
United States Registered Pilots. We
divide that amount by the historic 10year average for pilotage demand. We
recognize that, in years where demand
for pilotage services exceeds the 10-year
average, pilot associations will accrue
more revenue than projected, while, in
years where demand is below average,
they will take in less. We believe that,
over the long term, however, this
scheme ensures that infrastructure will
be maintained, and that Pilots will
receive adequate compensation and
work a reasonable number of hours,
with adequate rest between
assignments, to ensure retention of
highly trained personnel.
Pilots Association (LPA) provides pilotage services
in District Two, which includes all U.S. waters of
Lake Erie, the Detroit River, Lake St. Clair, and the
St. Clair River. Finally, the Western Great Lakes
Pilots Association (WGLPA) provides pilotage
services in District Three, which includes all U.S.
waters of the St. Marys River; Sault Ste. Marie
Locks; and Lakes Huron, Michigan, and Superior.
5 Presidential Proclamation 3385, Designation of
restricted waters under the Great Lakes Pilotage Act
of 1960, December 22, 1960 (https://
www.archives.gov/federal-register/codification/
proclamations/03385.html) (last accessed 5/01/24).
6 46 U.S.C. 9302(a)(1)(B).
7 Apprentice Pilots and Applicant Pilots are
compensated by the pilot association they are
training with, which is funded through the pilotage
rates. The ratemaking methodology accounts for an
Apprentice Pilot wage benchmark in Step 4 per 46
CFR 404.104(d). The Applicant Pilot salaries are
included in the pilot associations’ operating
expenses used in Step 1 per 46 CFR 404.101.
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63335
In this notice of proposed rulemaking
(NPRM), we are conducting our annual
review and interim adjustment to the
base pilotage rates for 2025. The Coast
Guard last conducted a full ratemaking
in 2023, with the ‘‘Great Lakes Pilotage
Rates—2023 Annual Ratemaking and
Review of Methodology’’ final rule
(hereafter the ‘‘2023 final rule’’) (88 FR
12226, published February 27, 2023).
This proposed rule is an interim
ratemaking under 46 CFR 404.100(b).
V. Summary of the Ratemaking
Methodology
The ratemaking methodology,
outlined in 46 CFR 404.101 through
404.110, consists of 10 steps that are
designed to account for the revenues
needed and total traffic expected in each
district. The first several steps of the
methodology establish base pilotage
rates. Additional steps to incorporate
the weighting factors are necessary to
establish the final pilotage rates. The
result is an hourly rate, determined
separately for each of the areas
administered by the Coast Guard.
In Step 1, ‘‘Recognize previous
operating expenses,’’ (§ 404.101), the
U.S. Coast Guard’s Director of the Great
Lakes Pilotage (‘‘Director’’) uses an
independent third party to review each
pilot association’s audited operating
expenses from each of the three pilot
associations. Operating expenses
include all allowable expenses, minus
Pilot and Apprentice Pilot wages and
benefits. This number forms the
baseline amount that each association is
budgeted. Because of the time delay
between when the association submits
raw numbers and when the Coast Guard
receives audited numbers, this number
is 3 years behind the projected year of
expenses. Therefore, in calculating the
2025 rates in this proposal, we begin
with the audited expenses from the
shipping activity in 2022.
While each pilot association operates
in an entire district (including both
designated and undesignated areas), the
Coast Guard determines costs by area.
We allocate certain operating expenses
to designated areas and certain
operating expenses to undesignated
areas. In some cases, we can allocate the
costs based on where they are accrued.
For example, we can allocate the costs
of insurance for Apprentice Pilots who
operate in undesignated areas only. In
other situations, such as general legal
expenses, expenses are distributed
between designated and undesignated
waters on a ‘‘pro rata’’ basis, based upon
the proportion of income forecasted
from the respective portions of the
district.
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
In Step 2, ‘‘Project operating
expenses, adjusting for inflation or
deflation,’’ (§ 404.102), the Director
develops the 2025 projected operating
expenses. To do this, we apply inflation
adjustors for 3 years to the operating
expense baseline received in Step 1. The
inflation factors are from the Bureau of
Labor Statistics’ (BLS) Consumer Price
Index (CPI) for the Midwest Region, or,
if not available, the Federal Open
Market Committee (FOMC) median
economic projections for Personal
Consumption Expenditures (PCE)
inflation. This step produces the total
operating expenses for each area and
district.
In Step 3, ‘‘Estimate number of
Registered Pilots and Apprentice
Pilots,’’ (§ 404.103), the Director
calculates how many Registered and
Apprentice Pilots are needed for each
district. To do this, we employ a
‘‘staffing model,’’ described in
§ 401.220, paragraphs (a)(1) through (3),
to estimate how many Pilots would be
needed to handle shipping during the
beginning and close of the season. This
number provides guidance to the
Director in approving an appropriate
number of Pilots.
At the September 7, 2023 GLPAC
meeting, there was a unanimous
recommendation for an August 1 cutoff
date to allow an Apprentice Pilot, who
has completed all their training, to be
recognized as a fully registered Pilot in
the rate.8 The Coast Guard agrees that
this change is both necessary and
reasonable, as it provides the proper
compensation based on the most
accurate data. If an Apprentice Pilot is
scheduled to complete training and
becomes a fully registered Pilot before
August 1, they will be counted as a fully
registered Pilot in the rate; but if they do
not meet the August 1 deadline, those
funds may be adjusted in the proceeding
rate for up to the full amount. In
addition, if a fully registered Pilot
retires, or an Apprentice Pilot quits, and
has been counted in the rate, the
proceeding rate may be adjusted
according for up to the full amount.
In Step 4 of the ratemaking
calculation, we determine the number of
Pilots provided by the pilot associations
(see § 404.103) and use that figure to
determine how many Pilots need to be
compensated via the pilotage fees
collected. In the first part of Step 4,
‘‘Determine target Pilot compensation
benchmark and Apprentice Pilot wage
benchmark,’’ (§ 404.104(b)(1)), the
8 Transcript of United States Coast Guard Great
Lakes Pilotage Advisory Committee Meeting at 97
(Sept. 7, 2023), https://www.regulations.gov/
document/USCG-2023-0438-0009 (last accessed 05/
31/2024) (last accessed 05/31/2024).
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Director adjusts the previous year’s
individual target Pilot compensation by
the difference between the previous
year’s BLS Employment Cost Index for
the Transportation and Materials sector
and the FOMC median economic
projections for Personal Consumption
Expenditures inflation value used to
inflate the previous year’s target Pilot
compensation.
In the second part of Step 4,
(§ 404.104(b)(2)), the Director then
adjusts that value by the FOMC median
economic projections for Personal
Consumption Expenditures inflation for
the upcoming year.
In the final part of Step 4, § 404.104(c)
and (d), the Director determines the
total target compensation figure for each
district. To do this, the Director
multiplies the compensation benchmark
by the number of Pilots for each area
and district (from Step 3), producing a
figure for total Pilot compensation.
Based on the total Pilot compensation,
the Director determines the individual
Apprentice Pilot wage benchmark at the
rate of 36 percent of the individual
target Pilot compensation, as calculated
according to paragraphs (a) or (b) of this
section.
In Step 5, ‘‘Project working capital
fund,’’ (§ 404.105), the Director
calculates an added value to pay for
needed capital improvements and other
non-recurring expenses, such as
technology investments and
infrastructure maintenance. This value
is calculated by adding the total
operating expenses (derived in Step 2)
to the total target Pilot compensation
and the total target Apprentice Pilot
wage (derived in Step 4), then by
multiplying that figure by the preceding
year’s average annual rate of return for
new issues of high-grade corporate
securities. This figure constitutes the
‘‘working capital fund’’ for each area
and district.
In Step 6, ‘‘Project needed revenue,’’
(§ 404.106), the Director simply adds the
totals produced by the preceding steps.
The projected operating expenses for
each area and district (from Step 2) is
added to the total Pilot compensation,
including Apprentice Pilot wage
benchmarks (from Step 4), and the
working capital fund contribution (from
Step 5). The total figure, calculated
separately for each area and district, is
the ‘‘needed revenue.’’
In Step 7, ‘‘Calculate initial base
rates,’’ (§ 404.107), the Director
calculates an hourly pilotage rate to
cover the needed revenue, as calculated
in Step 6. This step consists of first
calculating the 10-year average of traffic
hours for each area. Next, we divide the
revenue needed in each area (calculated
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in Step 6) by the 10-year average of
traffic hours to produce an initial base
rate.
An additional element, the
‘‘weighting factor,’’ is required under
§ 401.400. Pursuant to that section,
ships pay a multiple of the ‘‘base rate,’’
as calculated in Step 7, by a number
ranging from 1.0 (for the smallest ships,
or ‘‘Class I’’ vessels) to 1.45 (for the
largest ships, or ‘‘Class IV’’ vessels).
This significantly increases the revenue
collected, and we need to account for
the added revenue produced by the
weighting factors to ensure that shippers
are not overpaying for pilotage services.
We do this in the next step.
In Step 8, ‘‘Calculate average
weighting factors by Area,’’ (§ 404.108),
the Director calculates how much extra
revenue, as a percentage of total
revenue, has historically been produced
by the weighting factors in each area.
We do this by using a historical average
of the applied weighting factors for each
year since 2014 (the first year the
current weighting factors were applied).
In Step 9, ‘‘Calculate revised base
rates,’’ (§ 404.109), the Director modifies
the base rates by accounting for the
extra revenue generated by the
weighting factors. We do this by
dividing the initial pilotage rate for each
area (from Step 7) by the corresponding
average weighting factor (from Step 8),
to produce a revised rate.
In Step 10, ‘‘Review and finalize
rates,’’ (§ 404.110), often referred to
informally as ‘‘Director’s discretion’’,
the Director reviews the revised base
rates (from Step 9) to ensure that they
meet the goals set forth in 46 U.S.C.
9303(f) and 46 CFR 404.1(a), which
include promoting efficient, safe, and
reliable pilotage service on the Great
Lakes; generating sufficient revenue for
each pilot association to reimburse
necessary and reasonable operating
expenses; compensating trained and
rested pilots fairly; and providing
appropriate revenue for improvements.
VI. Discussion of Proposed Rate
Adjustments
In this NPRM, we are proposing new
pilotage rates for 2025. We propose to
conduct the 2025 ratemaking as an
interim ratemaking, as we did in the
2024 ratemaking (89 FR 9038). Thus, the
Coast Guard proposes to adjust the
compensation benchmark following the
interim ratemaking procedures under
§ 404.100(b), rather than following the
procedures for a full ratemaking under
§ 404.100(a).
This section discusses the proposed
rate changes using the ratemaking steps
provided in 46 CFR part 404. We will
detail all 10 steps of the ratemaking
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procedure for each of the 3 districts to
show how we arrive at the proposed
new rates.
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The Coast Guard is proposing the
rates shown in table 1.
Area
Name
Final 2024
pilotage
rate
Proposed
2025
pilotage rate
District One:
Designated
St. Lawrence River
$927
$981
District One:
Undesignated
District Two:
Designated
Lake Ontario
$608
$640
Navigable waters
from Southeast
Shoal to Port
Huron, MI
$667
$748
District Two:
Undesignated
Lake Erie
$597
$573
District
Three:
Designated
District
Three:
Undesignated
St. Marys River
$836
$821
Lakes Huron,
Michigan, and
Superior
$430
$438
This proposed rule would affect 61
U.S. Great Lakes Pilots, 3 Apprentice
Pilots, 3 pilot associations, and the
owners and operators of an average of
280 oceangoing vessels that transit the
Great Lakes annually. This proposed
rule would not affect the Coast Guard’s
budget or increase Federal spending,
because foreign shippers, foreign cruise
ships, and vessels requesting voluntary
pilotage pay these rates directly to the
respective pilot association The
estimated overall annual regulatory
economic impact of this rate change
would be a net increase of $2,639,968 in
payments made by the foreign shippers,
foreign cruise ships, and vessels
requesting voluntary pilotage service, a
seven percent increase from operating
costs in the 2024 shipping season. This
represents an increase in revenue
needed for target Pilot compensation, a
decrease in revenue needed for the total
Apprentice Pilot wage benchmark, an
increase in the revenue needed for
adjusted operating expenses, and an
increase in the revenue needed for the
working capital fund.
This proposed rule would establish
the 2025 yearly target compensation for
Pilots on the Great Lakes at $461,611
per Pilot (a $20,953, or 4.75 percent,
increase over their 2024 target
compensation). Because the Coast Guard
must review, and, if necessary, adjust
rates each year, we analyze these as
single-year costs and do not annualize
them over 10 years. Section VII.,
Regulatory Analyses, in this preamble
provides the regulatory impact analyses
of this proposed rule. The following
work demonstrates how we arrived at
the proposed rate for each pilotage
district.
District One
A. Step 1: Recognize Previous Operating
Expenses
Step 1 in the ratemaking methodology
requires that the Coast Guard review
and recognize the operating expenses
for the last full year for which figures
are available (§ 404.101). To do so, we
begin by reviewing the independent
accountant’s financial reports for each
association’s 2022 expenses and
revenues.9 For accounting purposes, the
financial reports divide expenses into
designated and undesignated areas. For
costs accrued by the pilot associations
generally, such as employee benefits,
the cost is divided between the
designated and undesignated areas on a
pro rata basis. Adjustments have been
made by the auditors and are explained
in the auditor’s reports, which are
available in the docket for this
9 These reports are available in the docket for this
proposed rule.
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Table 1 - Current and Proposed 2025 Pilotage Rates on the Great Lakes
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Lake Ontario
Applicant Pilot Compensation
Salaries
Employee benefits
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Total Other Pilotage Costs
Pilot Boat and Dispatch Costs
Sfmt 4725
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Pilot boat costs
Dispatch costs
Salaries
Total Pilot and Dispatch Costs
Administrative Expenses
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Legal
Legal - shared counsel (K&L Gates)
Legal - USCG Litigation
Insurance
Employee benefits
Payroll Taxes
Other taxes
Real Estate taxes
Travel
Depreciation/Auto leasing/Other
Interest
$59,019
$19,380
$78,399
$148,350
$31,222
$535,016
$228,222
$942,810
$98,900
$20,815
$356,678
$152,148
$628,541
$247,250
$52,037
$891,694
$380,370
$1,571,351
$178,691
$232,196
$253,761
$664,648
$119,127
$154,798
$169,174
$443,099
$297,818
$386,994
$422,935
$1,107,747
$301
$6,178
$61,625
$44,603
$47,517
$48,433
$81,576
$23,000
$23,098
$108,836
$20,257
$201
$4,119
$41,083
$29,735
$31,678
$32,288
$54,384
$15,333
$15,399
$72,558
$13,504
$502
$10,297
$102,708
$74,338
$79,195
$80,721
$135,960
$38,333
$38,497
$181,394
$33,761
The recognized operating expenses for
District One are shown in table 2.
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Pilot Subsistence
Hotel/Lodging Costs
Travel
Payroll Taxes
$23,608
$7,752
$31,360
BILLING CODE 9110–04–P
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Total Applicant Pilot Compensation
Other Pilotage Cost
$35,411
$11,628
$47,039
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TOTAL
63338
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Reported Operating Expenses for 2022
Designated
St. Lawrence
River
District One
Undesignated
rulemaking, where indicated under
Section I., Public Participation and
Request for Comments.
VerDate Sep<11>2014
Table 2 - 2022 Recognized Expenses for District One
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B. Step 2: Project Operating Expenses,
Adjusting for Inflation or Deflation
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In accordance with the text in
§ 404.102, having identified the
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63339
recognized 2022 operating expenses in
Step 1, the next step is to estimate the
current year’s operating expenses by
adjusting for inflation over the 3-year
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BILLING CODE 9110–04–C
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$54,878
$7,600
$67,464
$372,565
$16,500
$115,638
$31,805
$1,442,156
$4,199,653
$21,951
$3,040
$26,986
$149,026
$6,600
$46,255
$12,722
$576,862
$1,679,862
$32,927
$4,560
$40,478
$223,539
$9,900
$69,383
$19,083
$865,294
$2,519,791
American Pilots' Association (APA) Dues
Dues and subscriptions
Utilities
Salaries
Accounting/Professional fees
Applicant Pilot Training
Other expenses
Total Administrative Expenses
Total Expenses (OPEX + Applicant + Pilot Boats + Admin +
Capital)
63340
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
period. We calculate inflation using the
BLS data from the CPI for the Midwest
Region of the United States for the 2023
inflation rate.10 Because the BLS does
not provide forecasted inflation data, we
use economic projections from the
Federal Reserve for the 2024 and 2025
inflation modification.11 Based on that
information, the calculations for Step 2
are as presented in table 3.
Table 3 - Adjusted Operating Expenses for District One
Total Operating Expenses (Step 1)
2023 Inflation Modification ((a?3. 8%)
2024 Inflation Modification (@2.4%)
2025 Inflation Modification (@2.2%)
Adjusted 2025 Operating Expenses
C. Step 3: Estimate Number of
Registered Pilots and Apprentice Pilots
In accordance with the text in
§ 404.103, the Coast Guard estimates the
number of fully registered Pilots in each
district. In the past, this was done using
the staffing model and the process
described in § 404.103. Last year,
during the 2023 GLPAC meeting, there
Designated
$2,519,791
$95,752
$62,773
$58,923
$2,737,239
District One
Undesignated
$1,679,862
$63,835
$41,849
$39,282
$1,824,828
was a unanimous recommendation by
the GLPAC that, after 2024, the Director
be given discretion to increase the
staffing model plus three Pilots per
District, based on industry demand and
to ensure shipping reliability.12
Additionally, the previous staffing
model’s maximum is now considered
the minimum in regard to the number
of Pilots needed in each district.13
Total
$4,199,653
$159,587
$104,622
$98,205
$4,562,067
We determine the number of fully
registered Pilots based on data provided
by the SLSPA as well as the previously
mentioned recommendation. We
determine the number of Apprentice
Pilots based on input from the district
on anticipated retirements and staffing
needs. These numbers can be found in
table 4.
Table 4 - Authorized Pilots for District One
Item
2025 Authorized Pilots (total)
2025 Pilots Assigned to Designated Areas
2025 Pilots Assigned to Undesignated Areas
2025 Aoorentice Pilots
11
9
10 The CPI is defined as ‘‘All Urban Consumers
(CPI–U), All Items, 1982–4=100.’’ Series
CUUR0200SA0 (Downloaded February 22, 2024).
Available at https://www.bls.gov/cpi/data.htm., All
Urban Consumers (Current Series), multiscreen
data, not seasonally adjusted, 0200 Midwest,
Current, All Items, Monthly, 12-month Percent
Change and Annual Data (last accessed 05/31/
2024).
11 The 2024 and 2025 inflation rates are available
at https://www.federalreserve.gov/monetarypolicy/
files/fomcprojtabl20240320.pdf. We used the Core
PCE December Projection found in table 1.
(Downloaded March 2024).
12 Transcript, supra note 8, at 89–90.
13 Id. at 57–58.
14 Employment Cost Index, Total Compensation
for Private Industry workers in Transportation and
Material Moving, Annual Average, Series ID:
CIU2010000520000A. https://www.bls.gov/
news.release/eci.t05.htm (last accessed 04/30/24).
15 2.6 percent was the latest figure available for
the 2024 final rule. Table 1, Summary of Economic
Projections, Median Core PCE Inflation June
Projection. https://www.federalreserve.gov/
monetarypolicy/files/fomcprojtabl20230920.pdf
(last accessed 05/31/2024).
16 Table 1, Summary of Economic Projections,
Median Core PCE Inflation December Projection.
https://www.federalreserve.gov/monetarypolicy/
files/fomcprojtabl20240320.pdf. (Downloaded
March 2024).
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In this step, we determine the total
target Pilot compensation for each area.
Because we are issuing an interim
ratemaking this year, we follow the
procedure outlined in paragraph (b) of
§ 404.104, which adjusts the existing
compensation benchmark by inflation.
First, we adjust the 2024 target
compensation benchmark of $440,658
by 2.5 percent for a value of $451,674.
target Pilot compensation, or $166,180
($461,611 × 0.36).
In accordance with § 404.104(c), we
use the revised target individual
compensation level to derive the total
Pilot compensation by multiplying the
individual target compensation by the
estimated number of Registered Pilots
for District One, as shown in table 5. We
estimate that the number of Apprentice
Pilots needed will be one for District
One in the 2025 rulemaking. The total
target wages for Apprentice Pilots are
allocated with 60 percent for the
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1
This accounts for the difference in
actual first quarter 2024 Employment
Cost Index (ECI) inflation, which is 5.1
percent, and the 2024 PCE estimate of
2.6 percent.14 15
The second step accounts for
projected inflation from 2024 to 2025,
which is 2.2 percent.16 Based on the
projected 2025 inflation estimate, the
proposed target compensation
benchmark for 2025 is $461,611 per
pilot. The proposed Apprentice Pilot
wage benchmark is 36 percent of the
D. Step 4: Determine Target Pilot
Compensation Benchmark and
Apprentice Pilot Wage Benchmark
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District One
20
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
designated area and 40 percent for the
63341
undesignated area, in accordance with
the allocation for operating expenses.
Table 5 - Target Compensation for District One
Target Pilot Compensation
Number of Pilots
Total Target Pilot
Compensation
Target Apprentice Pilot
Compensation
Number of Apprentice Pilots
Total Target Apprentice
Pilot Compensation
E. Step 5: Project Working Capital Fund
Next, the Coast Guard calculates the
working capital fund revenues needed
for each area. We first add the figures for
projected operating expenses, total
Designated
$461,611
11
$5,077,721
District One
U ndesignated
$461,611
9
$4,154,499
Total
$461,611
20
$9,232,220
$166,180
$166,180
$166,180
$66,472
1
$166,180
$99,708
target Pilot compensation, and total
target Apprentice Pilot wage for each
area. Then we find the preceding year’s
average annual rate of return for new
issues of high-grade corporate securities.
Using Moody’s data, the number is
4.8100 percent, rounded.17 By
multiplying the two figures, we obtain
the working capital fund contribution
for each area, as shown in table 6.
Total
$4,562,067
$5,077,721
$4,154,499
$9,232,220
$99,708
$66,472
$166,180
$7,914,668
$6,045,799
$13,960,467
$380,696
$290,803
$671,499
17 Moody’s Seasoned Aaa Corporate Bond Yield,
average of 2023 monthly data. The Coast Guard uses
the most recent year of complete data. Moody’s is
taken from Moody’s Investors Service, which is a
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bond credit rating business of Moody’s Corporation.
Bond ratings are based on creditworthiness and
risk. The rating of ‘‘Aaa’’ is the highest bond rating
assigned with the lowest credit risk. See https://
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2024).
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Adjusted
Operating
Expenses (Step
2)
Total Target
Pilot
Compensation
(Step 4)
Total Target
Apprentice Pilot
Compensation
(Step 4)
Total 2025
Expenses
Working Capital
Fund (4.8100%)
Designated
$2,737,239
District One
Undesignated
$1,824,828
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Table 6 -Working Capital Fund Calculation for District One
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
F. Step 6: Project Needed Revenue
needed for each area. These expenses
include the projected operating
expenses (from Step 2), the total target
Pilot compensation (from Step 4), total
In this step, we add the expenses
accrued to derive the total revenue
target Apprentice Pilot wage (from Step
4), and the working capital fund
contribution (from Step 5). We show
these calculations in table 7.
Table 7 - Revenue Needed for District One
Adjusted Operating Expenses (Step 2)
Total Target Pilot Compensation (Step 4)
Total Target Apprentice Pilot
Compensation (Step 4)
Working Capital Fund (Step 5)
Total Revenue Needed
G. Step 7: Calculate Initial Base Rates
Having determined the revenue
needed for each area in the previous six
steps, we divide that number by the
expected number of traffic hours to
develop an hourly rate.
Designated
$2,737,239
$5,077,721
$99,708
District One
Undesignated
$1,824,828
$4,154,499
$66,472
Total
$4,562,067
$9,232,220
$166,180
$380,696
$8,295,364
$290,803
$6,336,602
$671,499
$14,631,966
Step 7 is a two-part process. The first
part entails calculating the 10-year
traffic average in District One, using the
total time on task or Pilot bridge hours.
To calculate the time on task for each
district, the Coast Guard used billing
data from SeaPro. The Coast Guard
received revised 2022 bridge hours in
the revenue reports submitted by our
third-party auditor and has
implemented them into the rate in this
step of the rulemaking.18 Because we
calculate separate figures for designated
and undesignated waters, there are two
parts for each calculation. We show
these values in table 8.
Table 8-Time on Task for District One (Hours)
Year
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Average
amount of traffic is as expected. We
present the calculations for District One
in table 9.
EP05AU24.101</GPH>
This produces an initial rate, which is
necessary to produce the revenue
needed for each area, assuming the
18 See details on the revised figures in Section
VII., Regulatory Analyses.
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Next, we derive the initial hourly rate
by dividing the revenue needed by the
average number of hours for each area.
District One
Designated
Undesignated
5,810
7,650
6,577
8,356
6,166
7,893
6,265
7,560
8,232
8,405
6,943
8,445
7,605
8,679
5,434
6,217
5,743
6,667
6,810
6,853
6,559
7,673
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63343
Table 9 - Initial Rate Calculations for District One
Designated
$8,295,364
6,559
$1,265
Revenue needed (Step 6)
Average time on task (hours)
Initial rate
H. Step 8: Calculate Average Weighting
Factors by Area
In this step, the Coast Guard
calculates the average weighting factor
for each designated and undesignated
area by first collecting the weighting
factors, set forth in 46 CFR 401.400, for
each vessel trip. Using the weight factor
report from SeaPro, we calculate the
Undesignated
$6,336,602
7,673
$826
average weighting factor for each area
using the data from each vessel transit
from 2014 onward, as shown in tables
10 and 11.
BILLING CODE 9110–04–P
Table 10 -Average Weighting Factor for District One, Designated Areas
Vessel Class/Year
Weighted
Transits*
31
41
31
28
54
72
8
10
39
19
328
339
213
405
643
435
644
362
531
553
65
36
EP05AU24.103</GPH>
Weighting
factor
1
1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.3
1.3
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Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (2017)
Class 1 (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class 1 (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (2017)
Class 2 (2018)
Class 2 (2019)
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
Number of
Transits
31
41
31
28
54
72
8
10
39
19
285
295
185
352
559
378
560
315
462
481
50
28
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Class 3 (2016)
Class 3 (201 7)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
Class 4 (2015)
Class 4 (2016)
Class 4 (201 7)
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
Class 4 (2023)
Total
Average weighting
factor (weighted
transits + number
of transits)
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
50
67
86
122
67
52
103
34
271
251
214
285
393
730
427
407
446
420
8,708
65
87
112
159
87
68
134
44
393
364
310
413
570
1059
619
590
647
609
11,216
1.29
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*Weighted transits are rounded to the nearest whole number for presentation, but the "total" calculation
uses unrounded figures.
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63345
Table 11-Average Weighting Factor for District One, Undesignated Areas
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Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (2017)
Class 1 (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class 1 (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (201 7)
Class 2 (2018)
Class 2 (2019)
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Number of
Transits
25
28
18
19
22
30
3
19
27
31
238
263
169
290
352
366
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1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
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Weighted
Transits*
25
28
18
19
22
30
3
19
27
31
274
302
194
334
405
421
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Vessel Class/Year
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358
463
349
346
60
42
28
45
63
58
35
71
65
44
289
269
222
285
382
326
334
466
386
328
7,214
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
Class 3 (2016)
Class 3 (201 7)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
Class 4 (2015)
Class 4 (2016)
Class 4 (201 7)
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
Class 4 (2023)
Total
Average weighting
factor (weighted
transits + number
of transits)
1.15
1.15
1.15
1.15
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
412
532
401
398
78
55
36
59
82
75
46
92
85
57
419
390
322
413
554
473
484
676
560
476
9,326
1.29
*Weighted transits are rounded to the nearest whole number for presentation, but the "total" calculation
uses unrounded figures.
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I. Step 9: Calculate Revised Base Rates
In this step, we revise the base rates
so that the total cost of pilotage will be
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equal to the revenue needed, after
considering the impact of the weighting
factors. To do this, we divide the initial
base rates calculated in Step 7 by the
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average weighting factors calculated in
Step 8, as shown in table 12.
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BILLING CODE 9110–04–C
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63347
Table 12 - Revised Base Rates for District One
Area
Initial rate
(Step 7)
Average
weighting factor
(Step 8)
Revised rate
(Initial rate +
Average weighting
factor)
$1,265
1.29
$981
$826
1.29
$640
District One:
Designated
District One:
U ndesignated
J. Step 10: Review and Finalize Rates
In this step, the Director reviews the
base pilotage rates calculated in
§ 404.109 of this part to ensure it meets
the goal of ensuring safe, efficient, and
reliable pilotage service. To establish
this, the Director considers whether the
proposed rates incorporate appropriate
compensation for Pilots to handle heavy
traffic periods and whether there are
enough Pilots to handle those heavy
traffic periods. The Director also
considers whether the proposed rates
would cover operating expenses and
infrastructure costs, including average
traffic and weighting factors. Based on
these considerations, the Director is not
proposing any alterations to the rates in
this step. We propose to modify
§ 401.405(a)(1) and (2) to reflect the final
rates shown in table 13.
Table 13 - Proposed Final Rates for District One
Area
Name
Final 2024
pilotage
rate
Proposed
2025
pilotage
rate
District One:
Designated
St. Lawrence River
$927
$981
District One:
Undesignated
Lake Ontario
$608
$640
District Two
A. Step 1: Recognize Previous Operating
Expenses
made by the auditors and are explained
in the auditor’s reports, which are
available in the docket for this
rulemaking, where indicated under
Section I., Public Participation and
Request for Comments.
The recognized operating expenses for
District Two are shown in table 14.
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BILLING CODE 9110–04–P
19 These reports are available in the docket for
this proposed rule.
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Step 1 in our ratemaking methodology
requires that the Coast Guard review
and recognize the previous year’s
operating expenses (§ 404.101). To do
so, we begin by reviewing the
independent accountant’s financial
reports for each association’s 2022
expenses and revenues.19 For
accounting purposes, the financial
reports divide expenses into designated
and undesignated areas. For costs
generally accrued by the pilot
associations, such as employee benefits,
the cost is divided between the
designated and undesignated areas on a
pro rata basis. Adjustments have been
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$93,840
$70,468
$(70,080)
$57,324
$396
$20,068
$10,362
$182,378
$140,760
$105,703
$(105,120)
$85,985
$594
$30,101
$15,543
$273,566
$234,600
$176,171
$(175,200)
$143,309
$990
$50,169
$25,905
$455,944
$100,642
$40,409
$46,599
$9,257
$171,763
$368,670
$150,963
$60,613
$69,899
$13,886
$257,645
$553,006
$251,605
$101,022
$116,498
$23,143
$429,408
$921,676
$18
$3,210
$15,698
$19,884
$14,208
$134,123
$8,862
$27
$4,816
$23,547
$29,827
$21,312
$201,184
$13,294
$45
$8,026
$39,245
$49,711
$35,520
$335,307
$22,156
Undesignated
Reported Operating Expenses for 2022
Applicant Pilot Compensation
Employee benefits
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$236,674
$60
$236,734
District Two
Designated
Southeast Shoal
to Port Huron
$355,011
$90
$355,101
Total Other Applicant Cost
Other Pilotage Cost
Pilot Subsistence
Hotel/Lodging Costs
Hotel/Lodging (D2-22-01)
Travel
License renewal
Payroll Taxes
License Insurance
Total Other Pilotage Costs
Pilot Boat and Dispatch Costs
Pilot boat expense costs
Employee Benefits
Employee Benefits (D2-22-02)
Insurance
Salaries
Total Pilot and Dispatch Costs
Administrative Expenses
Legal
Legal - shared counsel (K&L Gates)
Insurance
Employee benefits
Employee benefits (D2-22-02)
Payroll Taxes
Other taxes
Lake Erie
TOTAL
$591,685
$150
$591,835
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63348
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Table 14 - 2022 Recognized Expenses for District Two
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$13,130
$36,723
$28,703
$22,264
$704
$40,513
$117,994
$23,775
$26,491
$15,458
$619,762
$1,801,435
$21,884
$61,205
$47,839
$37,107
$1,174
$67,522
$196,656
$39,625
$44,152
$25,764
$1,032,938
$3,002,393
63349
recognized 2022 operating expenses in
Step 1, the next step is to estimate the
current year’s operating expenses by
adjusting for inflation over the 3-year
E:\FR\FM\05AUP1.SGM
B. Step 2: Project Operating Expenses,
Adjusting for Inflation or Deflation
Frm 00021
In accordance with the text in
§ 404.102, having identified the
PO 00000
Total Administrative Expenses
Total Expenses (OPEX +Applicant+ Pilot Boats+
Admin+Capital)
$8,754
$24,482
$19,136
$14,843
$470
$27,009
$78,662
$15,850
$17,661
$10,306
$413,176
$1,200,958
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
18:08 Aug 02, 2024
BILLING CODE 9110–04–C
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Real Estate taxes
Travel
Depreciation/Auto leasing/Other
APA Dues
Dues and subscriptions
Utilities
Salaries
Accounting/Professional fees
Pilot Training
Other expenses
63350
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
period. We calculate inflation using the
BLS data from the CPI for the Midwest
Region of the United States for the 2023
inflation rate.20 Because the BLS does
not provide forecasted inflation data, we
use economic projections from the
Federal Reserve for the 2024 and 2025
inflation modification.21 Based on that
information, the calculations for Step 2
are presented in table 15.
Table 15 - Adjusted Operating Expenses for District Two
Total Operating Expenses (Step 1)
2023 Inflation Modification
(@,3.8%)
2024 Inflation Modification
(@2.4%)
2025 Inflation Modification
(@,2.2%)
Adjusted 2025 Operating
Expenses
C. Step 3: Estimate Number of
Registered Pilots and Apprentice Pilots
In accordance with the text in
§ 404.103, the Coast Guard estimates the
number of fully registered Pilots in each
district. In the past, this was done using
the staffing model and the process
described in § 404.103. Last year,
during the 2023 GLPAC meeting, there
District Two
Undesignated
Designated
$1,200,958
$1,801,435
$45,636
$68,455
Total
$3,002,393
$114,091
$29,918
$44,877
$74,795
$28,083
$42,125
$70,208
$1,304,595
$1,956,892
$3,261,487
was a unanimous recommendation by
the GLPAC that, after 2024, the Director
be given discretion to increase the
staffing model plus three Pilots per
District, based on industry demand and
to ensure shipping reliability.22
Additionally, the previous staffing
model’s maximum is now considered
the minimum in regard to the number
of Pilots needed in each district.23
We determine the number of fully
registered Pilots based on data provided
by the LPA as well as the previous
mentioned recommendation. We
determine the number of Apprentice
Pilots based on input from the district
on anticipated retirements and staffing
needs. These numbers can be found in
table 16.
Table 16 - Authorized Pilots for District Two
20 CPI,
supra note 10.
PCE December Projection, supra note 11.
22 Transcript, supra note 8 at 89–90.
21 Core
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This accounts for the difference in
actual first quarter 2024 ECI inflation,
which is 5.1 percent, and the 2024 PCE
estimate of 2.6 percent.24 25 The second
step accounts for projected inflation
from 2024 to 2025, which is 2.2
percent.26 Based on the projected 2025
inflation estimate, the proposed target
compensation benchmark for 2025 is
$461,611 per Pilot. The proposed
Apprentice Pilot wage benchmark is 36
percent of the target Pilot compensation,
or $166,180 ($461,611 × 0.36).
23 Id.
at 57–58.
supra note 14.
25 Median Core PCE Inflation June Projection,
supra note 15.
24 ECI,
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In accordance with § 404.104(c), we
use the revised target individual
compensation level to derive the total
Pilot compensation by multiplying the
individual target compensation by the
estimated number of Registered Pilots
for District Two, as shown in table 17.
The total target wages for Apprentice
Pilots are allocated with 60 percent for
the designated area and 40 percent for
the undesignated area, in accordance
with the allocation for operating
expenses.
26 Median Core PCE Inflation December
Projection, supra note 16.
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D. Step 4: Determine Target Pilot
Compensation Benchmark and
Apprentice Pilot Wage Benchmark
In this step, we determine the total
target Pilot compensation for each area.
Because we are issuing an interim
ratemaking this year, we follow the
procedure outlined in paragraph (b) of
§ 404.104, which adjusts the existing
compensation benchmark by inflation.
First, we adjust the 2024 target
compensation benchmark of $440,658
by 2.5 percent for a value of $451,674.
District Two
17
10
7
1
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Item
2024 Authorized Pilots (total)
Pilots Assigned to Designated Areas
Pilots Assigned to Undesignated Areas
2024 Aoorentice Pilots
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63351
Table 17 - Target Compensation for District Two
Target Pilot Compensation
Number of Pilots
Total Target Pilot
Compensation
Target Apprentice Pilot
Compensation
Number of Apprentice Pilots
Total Target Apprentice
Pilot Compensation
E. Step 5: Project Working Capital Fund
Next, the Coast Guard calculates the
working capital fund revenues needed
for each area. We first add the figures for
projected operating expenses, total
Undesignated
$461,611
7
$3,231,277
District Two
Designated
$461,611
10
$4,616,110
Total
$461,611
17
$7,847,387
$166,180
$166,180
$166,180
$99,708
1
$166,180
$66,472
target Pilot compensation, and total
target Apprentice Pilot wage for each
area. Then we find the preceding year’s
average annual rate of return for new
issues of high-grade corporate securities.
Using Moody’s data, the number is
4.8100 percent, rounded.27 By
multiplying the two figures, we obtain
the working capital fund contribution
for each area, as shown in table 18.
Table 18 -Working Capital Fund Calculation for District Two
District Two
Undesignated Designated
$1,304,595 $1,956,892
$3,231,277 $4,616,110
$66,472
$99,708
Adjusted Operating Expenses (Step 2)
Total Target Pilot Compensation (Step 4)
Total Target Apprentice Pilot
Compensation (Step 4)
Total 2025 Expenses
Working Capital Fund (4.8100%)
F. Step 6: Project Needed Revenue
In this step, the Coast Guard adds all
the expenses accrued to derive the total
$4,602,344
$221,373
revenue needed for each area. These
expenses include the projected
operating expenses (from Step 2), the
total target Pilot compensation (from
$6,672,710
$320,957
Total
$3,261,487
$7,847,387
$166,180
$11,275,054
$542,330
Step 4), total target Apprentice Pilot
wage (from Step 4), and the working
capital fund contribution (from Step 5).
We show these calculations in table 19.
$320,957
$6,993,667
27 Moody’s Seasoned Aaa Corporate Bond Yield,
supra note 17.
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$542,330
$11,817,384
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$221,373
$4,823,717
Total
$3,261,487
$7,847,387
$166,180
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Adjusted Operating Expenses (Step 2)
Total Target Pilot Compensation (Step 4)
Total Target Apprentice Pilot
Compensation (Step 4)
Working Capital Fund (Step 5)
Total Revenue Needed
District Two
Undesignated
Designated
$1,304,595
$1,956,892
$3,231,277
$4,616,110
$66,472
$99,708
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Table 19-Revenue Needed for District Two
63352
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
G. Step 7: Calculate Initial Base Rates
Step 7 is a two-part process. The first
part entails calculating the 10-year
traffic average in District Two, using the
total time on task or Pilot bridge hours.
To calculate the time on task for each
district, the Coast Guard used billing
data from SeaPro. The Coast Guard
received revised 2022 bridge hours in
Having determined the revenue
needed for each area in the previous six
steps, we divide that number by the
expected number of traffic hours to
develop an hourly rate.
the revenue reports submitted by our
third-party auditor and has
implemented them into the rate in this
step of the rulemaking.28 Because we
calculate separate figures for designated
and undesignated waters, there are two
parts for each calculation. We show
these values in table 20.
Table 20-Time on Task for District Two (Hours)
Year
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Average
Next, we derive the initial hourly rate
by dividing the revenue needed by the
average number of hours for each area.
District Two
Undesignated
Designated
8,092
6,424
7,695
9,044
5,290
6,762
8,401
6,232
6,512
7,715
6,655
6,150
6,074
5,139
6,425
5,615
5,967
6,535
7,856
7,001
7,133
6,426
This produces an initial rate, which is
necessary to produce the revenue
needed for each area, assuming the
amount of traffic is as expected. We
present the calculations for District Two
in table 21.
Table 21 - Initial Rate Calculations for District Two
Undesignated
$4,823,717
6,426
$751
Revenue needed (Step 6)
Average time on task (hours)
Initial rate
H. Step 8: Calculate Average Weighting
Factors by Area
average weighting factor for each area
using the data from each vessel transit
from 2014 onward, as shown in tables
22 and 23.
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BILLING CODE 9110–04–P
28 See details on the revised figures in Section
VII., Regulatory Analyses.
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In this step, the Coast Guard
calculates the average weighting factor
for each designated and undesignated
area by first collecting the weighting
factors, set forth in 46 CFR 401.400, for
each vessel trip. Using the weight factor
report from SeaPro, we calculate the
Designated
$6,993,667
7,133
$980
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63353
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Vessel ClassNear
Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (2017)
Class l (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class l (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (2017)
Class 2 (2018)
Class 2 (2019)
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
Class 3 (2016)
Class 3 (2017)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
Class 4 (2015)
Class 4 (2016)
Class 4 (2017)
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
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Number
of
Transits
31
35
32
21
37
54
1
7
57
54
356
354
380
222
123
127
165
206
202
152
20
0
9
12
3
1
1
5
2
2
636
560
468
319
196
210
201
227
208
Frm 00025
Weighting
factor
Weighted
Transits*
1
1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
31
35
32
21
37
54
1
7
57
54
409
407
437
255
141
146
190
237
232
175
26
0
12
16
4
1
1
7
3
3
922
812
679
463
284
305
291
329
302
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Table 22 - Average Weighting Factor for District Two, Undesignated Areas
63354
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Class 4 (2023)
Total
169
5,865
Average weighting
factor (weighted
transits/number of
transits)
1.45
245
7,662
1.31
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*Weighted transits are rounded to the nearest whole number for presentation, but the "total" calculation
uses unrounded figures.
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63355
Vessel Class/Year
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Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (201 7)
Class 1 (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class 1 (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (201 7)
Class 2 (2018)
Class 2 (2019)
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
Class 3 (2016)
Class 3 (2017)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
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Number
of
Transits
20
15
28
15
42
48
7
12
53
56
237
217
224
127
153
281
342
240
327
312
8
8
4
4
14
1
5
2
4
5
359
Frm 00027
Weighting
factor
Weighted
Transits*
1
1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
20
15
28
15
42
48
7
12
53
56
273
250
258
146
176
323
393
276
376
359
10
10
5
5
18
1
7
3
5
7
521
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Table 23-Average Weighting Factor for District Two, Designated Areas
63356
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Class 4 (2015)
Class 4 (2016)
Class 4 (201 7)
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
Class 4 (2023)
Total
340
281
185
379
403
405
268
391
349
6,171
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
Average weighting
factor (weighted
transits/number of
transits)
493
407
268
550
584
587
389
567
506
8,069
1.31
*Weighted transits are rounded to the nearest whole number for presentation, but the "total" calculation
uses unrounded figures.
BILLING CODE 9110–04–C
I. Step 9: Calculate Revised Base Rates
In this step, we revise the base rates
so that the total cost of pilotage will be
equal to the revenue needed, after
considering the impact of the weighting
factors. To do this, we divide the initial
base rates calculated in Step 7 by the
average weighting factors calculated in
Step 8, as shown in table 24.
Table 24 - Revised Base Rates for District Two
Area
Initial rate
(Step 7)
District Two:
U ndesignated
District Two:
Designated
J. Step 10: Review and Finalize Rates
$751
Revised rate
(Initial rate +
Average
weighting factor)
$573
1.31
$980
$748
1.31
infrastructure costs, including average
traffic and weighting factors. Based on
these considerations, the Director is not
proposing any alterations to the rates in
this step. We propose to modify
§ 401.405(a)(3) and (4) to reflect the final
rates shown in table 25.
EP05AU24.122</GPH>
proposed rates incorporate appropriate
compensation for Pilots to handle heavy
traffic periods and whether there are
enough Pilots to handle those heavy
traffic periods. The Director also
considers whether the proposed rates
would cover operating expenses and
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In this step, the Director reviews the
base pilotage rates calculated in
§ 404.109 of this part to ensure it meets
the goal of ensuring safe, efficient, and
reliable pilotage service. To establish
this, the Director considers whether the
Average
weighting
factor (Step 8)
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63357
Table 25 - Proposed Final Rates for District Two
Name
District Two:
Designated
Navigable waters
from Southeast
Shoal to Port
Huron, MI
District Two:
Undesignated
Lake Erie
District Three
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A. Step 1: Recognize Previous Operating
Expenses
Step 1 in our ratemaking methodology
requires that the Coast Guard review
and recognize the previous year’s
operating expenses (§ 404.101). To do
so, we review the independent
accountant’s financial reports for each
Final 2024
pilotage
rate
Proposed
2025
pilotage
rate
$667
$748
$597
$573
association’s 2022 expenses and
revenues.29 For accounting purposes,
the financial reports divide expenses
into designated and undesignated areas.
For costs generally accrued by the pilot
associations, such as employee benefits,
the cost is divided between the
designated and undesignated areas on a
pro rata basis. Adjustments have been
made by the auditors and are explained
in the auditor’s reports, which are
available in the docket for this
rulemaking, where indicated under
Section I., Public Participation and
Request for Comments.
The recognized operating expenses for
District Three are shown in table 26.
BILLING CODE 9110–04–P
29 These reports are available in the docket for
this proposed rule.
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Area
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63358
VerDate Sep<11>2014
Reported Operating Expenses for 2022
Undesignated
Lakes Huron and
Michigan
District Three
Designated
Undesignated
St. Marys
Lake Superior
River
TOTAL
Applicant Cost
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$417,221
$154,305
$177,126
$748,652
$(173,587)
$(64,199)
$(73,694)
$(311,480)
$54,874
$20,295
$23,296
$98,465
Total Applicant Cost
Other Pilotage Costs
$298,508
$110,401
$126,728
$535,637
Pilot subsistence
Pilot subsistence (D3-22-06)
Hotel I Lodging Cost
Hotel I Lodging Cost (D3-22-01)
Travel
Travel (D3-22-01), (D3-22-03)
License Renewal
Payroll taxes (D3-22-04)
License Insurance
Total Other Pilotage Costs
Pilot Boat and Dispatch costs
Pilot boat costs
Pilot Boat Costs (D3-22-03)
Dispatch costs
Dispatch costs
Insurance
Total Pilot boat and dispatch costs
Administrative Cost
Legal
Legal (D3-22-05)
Legal - shared counsel (K&L Gates)
$168,607
$62,357
$71,580
$302,544
$7,664
$2,834
$3,254
$13,752
$163,971
$60,643
$69,612
$294,225
$(22,392)
$(8,282)
$(9,506)
$(40,180)
$233,386
$86,315
$99,081
$418,783
$(54,224)
$(20,054)
$(23,020)
$(97,298)
$315
$117
$134
$566
$192,009
$71,013
$81,515
$344,537
$17,757
$6,567
$7,539
$31,863
$707,093
$261,510
$300,189
$1,268,792
$536,327
$198,355
$227,691
$962,373
Salaries
Salaries (D3-22-04)
Applicant Benefits
$(9,518)
$(3,520)
$(4,041)
$(17,079)
$162,843
$60,226
$69,133
$292,201
$(25,243)
$(9,336)
$(10,717)
$(45,296)
$26,193
$9,687
$11,120
$47,000
$690,602
$255,412
$293,186
$1,239,200
$58,159
$21,510
$24,691
$104,360
$(48,792)
$(18,045)
$(20,714)
$(87,551)
$4,473
$1,654
$1,899
$8,026
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18:08 Aug 02, 2024
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Table 26 - 2022 Recognized Expenses for District Three
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$8,489
$9,744
$41,185
$137,044
$50,684
$58,180
$245,908
$(6, 129)
$(2,267)
$(2,602)
$(10,998)
$50,962
$18,848
$21,635
$91,445
$(13,015)
$(4,813)
$(5,525)
$(23,354)
$4,924
$1,821
$2,090
$8,835
$1,524
$564
$647
$2,735
$163,196
$60,356
$69,283
$292,835
$24,610
$9,102
$10,448
$44,160
$(1,231)
$(455)
$(522)
$(2,208)
$15,716
$5,812
$6,672
$28,200
$45,613
$16,869
$19,364
$81,846
$(5,449)
$(2,015)
$(2,313)
$(9,778)
$47,719
$17,648
$20,259
$85,626
$28,079
$10,385
$11,921
$50,385
$45,010
$16,646
$19,108
$80,764
$23,172
$8,570
$9,837
$41,579
$(1,250)
$(462)
$(531)
$(2,243)
$597,287
$220,901
$253,571
$1,071,759
$2,293,490
$848,224
$973,674
$4,115,388
63359
recognized 2022 operating expenses in
Step 1, the next step is to estimate the
current year’s operating expenses by
adjusting those expenses for inflation
E:\FR\FM\05AUP1.SGM
B. Step 2: Project Operating Expenses,
Adjusting for Inflation or Deflation
Frm 00031
In accordance with the text in
§ 404.102, having identified the
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Insurance
Emplovee benefits
Employee benefits (D3-22-03)
Pavroll Tax
Pavroll Tax (D3-22-05)
Other taxes
Real Estate Taxes
Depreciation/Auto leasing/Other
APA Dues
APA Dues (D3-22-02)
Dues and subscriptions
Utilities
Utilities (D3-22-03)
Salaries
Accounting/Professional fees
Pilot Training
Other expenses
Other expenses (D3-22-07)
Total Administrative Expenses
Total Operating Expenses (Other Costs+ Applicant
Cost+ Pilot Boats+ Admin)
63360
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
over the 3-year period. We calculate
inflation using the BLS data from the
CPI for the Midwest Region of the
United States for the 2023 inflation
rate.30 Because the BLS does not
provide forecasted inflation data, we use
economic projections from the Federal
Reserve for the 2024 and 2025 inflation
modification.31 Based on that
information, the calculations for Step 2
are as presented in table 27.
Table 27 - Adjusted Operating Expenses for District Three
Total Operating Expenses (Step 1)
2023 Inflation Modification
(@,3.8%)
2024 Inflation Modification
(@2.4%)
2025 Inflation Modification
(@,2.2%)
Adjusted 2025 Operating
Expenses
C. Step 3: Estimate Number of
Registered Pilots and Apprentice Pilots
In accordance with the text in
§ 404.103, the Coast Guard estimates the
number of fully registered Pilots in each
district. In the past, this was done using
the staffing model and the process
described in § 404.103. Last year,
during the 2023 GLPAC meeting, there
District Three
Undesignated
Designated
$3,267,164
$848,224
$124,152
$32,233
Total
$4,115,388
$156,385
$81,392
$21,131
$102,523
$76,400
$19,835
$96,235
$3,549,108
$921,423
$4,470,531
was a unanimous recommendation by
the GLPAC that, after 2024, the Director
be given discretion to increase the
staffing model plus three Pilots per
District, based on industry demand and
to ensure shipping reliability.32
Additionally, the previous staffing
model’s maximum are now considered
the minimum regarding the number of
Pilots needed in each district.33
We determine the number of fully
registered Pilots based on data provided
by the WGLPA, as well as the previous
mentioned recommendation. We
determine the number of Apprentice
Pilots based on input from the district
on anticipated retirements and staffing
needs. These numbers can be found in
table 28.
Table 28 - Authorized Pilots for District Three
30 CPI,
supra note 10.
PCE, supra note 11.
32 Transcript, supra note 8, at 89–90.
31 Core
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actual first quarter 2024 ECI inflation,
which is 5.1 percent, and the 2024 PCE
estimate of 2.6 percent.34 35 The second
step accounts for projected inflation
from 2024 to 2025, which is 2.2
percent.36 Based on the projected 2025
inflation estimate, the proposed target
compensation benchmark for 2025 is
$461,611 per pilot. The proposed
apprentice pilot wage benchmark is 36
percent of the target Pilot compensation,
or $166,180 ($461,611 × 0.36).
In accordance with § 404.104(c), we
use the revised target individual
33 Id.
at 57–58.
supra note 14.≤
35 Median Core PCE Inflation June Projection,
supra note 15.
34 ECI,
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compensation level to derive the total
target Pilot compensation by
multiplying the individual target
compensation by the estimated number
of Registered Pilots for District Three, as
shown in table 29. We estimate that the
number of Apprentice Pilots needed for
District Three in the 2024 season will be
one. The total target wages for
Apprentice Pilots are allocated with 21
percent for the designated area, and 79
percent for the undesignated areas, in
accordance with the allocation for
operating expenses.
36 Median Core PCE Inflation December
Projection, supra note 16.
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D. Step 4: Determine Target Pilot
Compensation Benchmark and
Apprentice Pilot Wage Benchmark
In this step, we determine the total
target Pilot compensation for each area.
Because we are issuing an interim
ratemaking this year, we follow the
procedure outlined in paragraph (b) of
§ 404.104, which adjusts the existing
compensation benchmark by inflation.
First, we adjust the 2024 target
compensation benchmark of $440,658
by 2.5 percent for a value of $451,674.
This accounts for the difference in
District Three
24
5
19
1
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Item
2025 Authorized Pilots (total)
Pilots Assigned to Designated Areas
Pilots Assigned to Undesignated Areas
2025 Aoorentice Pilots
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63361
Table 29 - Target Compensation for District Three
Target Pilot Compensation
Number of Pilots
Total Target Pilot Compensation
Target Apprentice Pilot Compensation
Number of Apprentice Pilots
Total Target Apprentice Pilot
Compensation
E. Step 5: Project Working Capital Fund
Next, the Coast Guard calculates the
working capital fund revenues needed
for each area. We first add the figures for
projected operating expenses, total
District Three
Undesignated Designated
$461,611
$461,611
19
5
$8,770,609 $2,308,055
$166,180
$166,180
$131,282
target Pilot compensation, and total
target Apprentice Pilot wage for each
area, and then we find the preceding
year’s average annual rate of return for
new issues of high-grade corporate
securities. Using Moody’s data, the
$34,898
Total
$461,611
24
$11,078,664
$166,180
1
$166,180
number is 4.8100 percent, rounded.37
By multiplying the two figures, we
obtain the working capital fund
contribution for each area, as shown in
table 30.
Table 30 - Working Capital Fund Calculation for District Three
Adjusted Operating Expenses (Step 2)
Total Target Pilot Compensation (Step 4)
Total Target Apprentice Pilot
Compensation (Step 4)
Total 2025 Expenses
Working Capital Fund (4.8100%)
F. Step 6: Project Needed Revenue
In this step, the Coast Guard adds all
the expenses accrued to derive the total
District Three
Undesignated Designated
$3,549,108
$921,423
$8,770,609 $2,308,055
$131,282
$34,898
Total
$4,470,531
$11,078,664
$166,180
$3,264,376
$157,016
$15,715,375
$755,909
$12,450,999
$598,893
revenue needed for each area. These
expenses include the projected
operating expenses (from Step 2), the
total target Pilot compensation (from
Step 4), and the working capital fund
contribution (from Step 5). The
calculations are shown in table 31.
$34,898
$157,016
$3,421,392
37 Moody’s Seasoned Aaa Corporate Bond Yield,
supra note 17.
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$166,180
$755,909
$16,471,284
EP05AU24.130</GPH>
$131,282
$598,893
$13,049,892
Total
$4,470,531
$11,078,664
EP05AU24.129</GPH>
Adjusted Operating Expenses (Step 2)
Total Target Pilot Compensation (Step 4)
Total Target Apprentice Pilot
Compensation (Step 4)
Working Capital Fund (Step 5)
Total Revenue Needed
District Three
Undesignated
Designated
$3,549,108
$921,423
$8,770,609
$2,308,055
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Table 31-Revenue Needed for District Three
63362
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
G. Step 7: Calculate Initial Base Rates
Having determined the revenue
needed for each area in the previous six
steps, we divide that number by the
expected number of traffic hours to
develop an hourly rate.
Step 7 is a two-part process. The first
part is calculating the 10-year traffic
average in District Three using the total
time on task or Pilot bridge hours. To
calculate the time on task for each
district, the Coast Guard used billing
data from SeaPro. The Coast Guard
received revised 2022 bridge hours in
the revenue reports submitted by our
third-party auditor and has
implemented them into the rate in this
step of the rulemaking.38 Because we
calculate separate figures for designated
and undesignated waters, there are two
parts for each calculation. We show
these values in table 32.
Table 32-Time on Task for District Three (Hours)
Year
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Average
Next, we derive the initial hourly rate
by dividing the revenue needed by the
average number of hours for each area.
District Three
Undesie:nated
Desie:nated
3,501
25,690
24,148
3,426
18,149
2,484
3,520
23,678
24,851
3,395
3,455
19,967
2,997
20,955
23,421
2,769
2,696
22,824
25,833
3,835
3,208
22,952
This produces an initial rate, which is
necessary to produce the revenue
needed for each area, assuming the
amount of traffic is as expected. We
present the calculations for District
Three in table 33.
Table 33 - Initial Rate Calculations for District Three
Revenue needed (Step 6)
Average time on task (hours)
Initial rate
34 and 35. Transits are listed in both the
bridge hour report and the weight factor
report. For this step, the Coast Guard
uses the transits from the weight factor
report.
BILLING CODE 9110–04–P
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factors, set forth in 46 CFR 401.400, for
each vessel trip. Using the weight factor
report from SeaPro, we calculate the
average weighting factor for each area
using the data from each vessel transit
from 2014 onward, as shown in tables
Designated
$3,421,392
3,208
$1,067
38 See details on the revised figures in Section
VII., Regulatory Analyses.
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H. Step 8: Calculate Average Weighting
Factors by Area
In this step, the Coast Guard
calculates the average weighting factor
for each designated and undesignated
area by first collecting the weighting
Undesignated
$13,049,892
22,952
$569
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63363
Table 34-Average Weighting Factor for District Three, Undesignated Areas
Vessel Class/¥ear
Number
of
Transits
Weighting
factor
Weighted
Transits*
45
56
136
148
103
173
4
8
116
155
274
207
236
264
169
279
332
273
276
295
15
8
10
19
9
9
4
5
3
5
394
375
332
367
1
1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
1.45
1.45
1.45
45
56
136
148
103
173
4
8
116
155
315
238
271
304
194
321
382
314
317
339
20
10
13
25
12
12
5
7
4
7
571
544
481
532
Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (2017)
Class 1 (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class 1 (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (2017)
Class 2 (2018)
Class 2 (2019)
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
Class 3 (2016)
Class 3 (2017)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
Class 4 (2015)
Class 4 (2016)
Class 4 (2017)
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Area6
63364
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
Class 4 (2023)
Total for Area 6
337
334
339
356
363
356
7,189
1.45
1.45
1.45
1.45
1.45
1.45
489
484
492
516
526
516
9,205
3
0
4
4
0
0
1
5
10
5
177
169
174
151
102
120
180
124
89
118
3
0
7
18
7
6
1
1
6
0
243
253
1
1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
1.45
3
0
4
4
0
0
1
5
10
5
204
194
200
174
117
138
207
143
102
136
4
0
9
23
9
8
1
1
8
0
352
367
Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (201 7)
Class 1 (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class 1 (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (201 7)
Class 2 (2018)
Class 2 (2019)
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
Class 3 (2016)
Class 3 (201 7)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
Class 4 (2015)
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Class 4 (2016)
Class 4 (2017)
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
Class 4 (2023)
Total for Area 8
Combined total
204
269
188
254
265
319
243
268
3,991
11,180
Average weighting
factor (weighted
transits/number of
transits)
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
63365
296
390
273
368
384
463
352
389
5,344
14,549
1.30
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*Weighted transits are rounded to the nearest whole number for presentation, but the "total" calculation
uses unrounded figures.
63366
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Table 35 -Average Weighting Factor for District Three, Designated Areas
Class 1 (2014)
Class 1 (2015)
Class 1 (2016)
Class 1 (2017)
Class 1 (2018)
Class 1 (2019)
Class 1 (2020)
Class 1 (2021)
Class 1 (2022)
Class 1 (2023)
Class 2 (2014)
Class 2 (2015)
Class 2 (2016)
Class 2 (2017)
Class 2 (2018)
Class 2 (2019)
Class 2 (2020)
Class 2 (2021)
Class 2 (2022)
Class 2 (2023)
Class 3 (2014)
Class 3 (2015)
I. Step 9: Calculate Revised Base Rates
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In this step, we revise the base rates
so that the total cost of pilotage will be
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Number
of
Transits
27
23
55
62
47
45
15
15
74
68
221
145
174
170
126
162
218
131
162
142
15
0
Weighting
factor
Weighted
Transits*
1
1
1
1
1
1
1
1
1
1
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.3
1.3
27
23
55
62
47
45
15
15
74
68
254
167
200
196
145
186
251
151
186
163
20
0
equal to the revenue needed, after
considering the impact of the weighting
factors. To do this, we divide the initial
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base rates calculated in Step 7 by the
average weighting factors calculated in
Step 8, as shown in table 36.
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Vessel Class/Year
63367
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Class 3 (2016)
Class 3 (201 7)
Class 3 (2018)
Class 3 (2019)
Class 3 (2020)
Class 3 (2021)
Class 3 (2022)
Class 3 (2023)
Class 4 (2014)
Class 4 (2015)
Class 4 (2016)
Class 4 (201 7)
Class 4 (2018)
Class 4 (2019)
Class 4 (2020)
Class 4 (2021)
Class 4 (2022)
Class 4 (2023)
Total
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.3
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
1.45
6
14
6
3
1
2
5
0
321
245
191
234
225
308
336
258
249
300
4,801
Average weighting
factor (weighted
transits/number of
transits)
8
18
8
4
1
3
7
0
465
355
277
339
326
447
487
374
361
435
6,264
1.30
*Weighted transits are rounded to the nearest whole number for presentation, but the "total" calculation
uses unrounded figures.
Table 36 - Revised Base Rates for District Three
District Three:
U ndesignated
District Three:
Designated
lotter on DSK11XQN23PROD with PROPOSALS1
J. Step 10: Review and Finalize Rates
In this step, the Director reviews the
base pilotage rates calculated in
§ 404.109 of this part to ensure it meets
the goal of ensuring safe, efficient, and
reliable pilotage service. To establish
this, the Director considers whether the
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Average weighting
factor (Step 8)
$569
1.30
$438
$1,067
1.30
$821
proposed rates incorporate appropriate
compensation for Pilots to handle heavy
traffic periods and whether there are
enough Pilots to handle those heavy
traffic periods. The Director also
considers whether the proposed rates
would cover operating expenses and
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infrastructure costs, including average
traffic and weighting factors. Based on
these considerations, the Director is not
proposing any alterations to the rates in
this step. We propose to modify
§ 401.405(a)(5) and (6) to reflect the
proposed rates shown in table 37.
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Initial rate
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Area
63368
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Table 37 - Proposed Final Rates for District Three
Name
District Three:
Designated
St. Marys River
District Three:
U ndesignated
Lakes Huron, Michigan,
and Superior
VII. Regulatory Analyses
We developed this proposed rule after
considering numerous statutes and
Executive orders related to rulemaking.
A summary of our analyses based on
these statutes or Executive orders
follows.
A. Regulatory Planning and Review
lotter on DSK11XQN23PROD with PROPOSALS1
Executive Orders 12866 (Regulatory
Planning and Review), as amended by
Executive Order 14094 (Modernizing
Regulatory Review), and 13563
(Improving Regulation and Regulatory
Review) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
Final 2024
pilotage rate
Proposed 2025
pilotage rate
$836
$821
$430
$438
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying costs and benefits, reducing
costs, harmonizing rules, and promoting
flexibility.
The Office of Management and Budget
(OMB) has not designated this rule a
significant regulatory action under
section 3(f) of Executive Order 12866, as
amended by Executive Order 14094.
Accordingly, OMB has not reviewed
this regulatory action. The purpose of
this proposed rule is to establish new
pilotage rates, as 46 U.S.C. 9303(f)
requires that rates be established or
reviewed and adjusted each year. The
statute also requires that base rates be
established by a full ratemaking at least
once every 5 years, and, in years when
base rates are not established, they must
be reviewed and, if necessary, adjusted.
The Coast Guard concluded the last full
ratemaking in February of 2023.39 For
this NPRM, the Coast Guard estimates
an increase in cost of approximately
$2.64 million to industry. This is
approximately a 7-percent increase
because of the change in revenue
needed in 2025 compared to the
revenue needed in 2024. See table 38.
39 Great Lakes Pilotage Rates—2023 Annual
Ratemaking and Review of Methodology (88 FR
12226), published February 27, 2023.
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Area
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63369
Table 38 - Economic Impacts Due to Proposed Changes
Change
Rate
changes.
Description
In
accordance
with 46
U.S.C.
Chapter 93,
the Coast
Guard is
required to
review and
adjust
pilotage rates
annually.
In the Great Lakes Pilotage Rates—
2024 Annual Review (‘‘2024 final rule’’)
(89 FR 9038), the Coast Guard used
monthly reports for the 2022 bridge
hours in Step 7 as provided by the pilot
associations. Since that final rule, the
Coast Guard received revised estimates
of the 2022 bridge hours in the revenue
Affected
Costs
Population
Owners and
Increase of $2,639,968
operators of due to change in revenue
280 vessels
needed for 2025
transiting the ($42,920,634) from
Great Lakes
revenue needed for 2024
system
($40,280,666) as shown in
annually,61
table 41.
United States
Great Lakes
Pilots, 3
Apprentice
Pilots, and 3
pilot
associations.
reports submitted by Cohn Reznik.
Similarly, the pilot associations were
also able to provide updated 2022
monthly reports in April 2024. For this
proposed rule, the Coast Guard revises
the bridge hours for 2022 in Step 7,
using the latest available information.
This revision ensures that all figures are
Benefits
New rates cover an
association's
necessary and
reasonable
operating expenses.
Promotes safe,
efficient, and
reliable pilotage
service on the Great
Lakes.
Provides fair
compensation,
adequate training,
and sufficient rest
periods for Pilots.
Ensures the
association receives
sufficient revenues
to fund future
improvements.
comparable, since the initial monthly
reports and weight factor reports
received for the 2024 final rule showed
different totals for bridge hours.
Table 39 shows the difference
between the 2022 bridge hour figures as
published in the 2024 final rule, and the
revised figures as of this proposed rule.
Table 39. Changes to Step 7 Bridge Hours from 2024 Final Rule to 2025 Proposed
Rule
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2022
2022
Similarly, the Coast Guard received
updated 2022 weight factor reports in
April 2024. The Coast Guard uses the
latest available information to revise the
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number of transits by vessel class in
Step 8, ‘‘Calculate average weighting
factors by Area’’. Table 40 shows the
difference between the 2022 transit
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figures as published in the 2024 final
rule, and the revised figures as of this
proposed rule.
BILLING CODE 9110–04–P
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Year
2022
Updated
Difference
District 1
U ndesignated Designated U ndesignated Designated Undesignated Designated
8,356
6,573
8,356
6,577
0
4
District 2
7,668
8,613
7,695
9,044
27
431
District 3
23,914
3,345
24,148
81
3,426
234
EP05AU24.141</GPH>
Previously Published
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Table 40. Changes to Step 8 from Proposed Rule to Final Rule
Updated Difference
Previous
Area/Vessel Class
Number of Transits (2022)
Area 1 - Designated
Class 2
482
462
-20
Class 3
106
103
-3
Class 4
478
446
-32
Area 2 - Undesignated
Class 1
41
27
-14
Class 2
371
349
-22
Class 3
73
65
-8
Class 4
401
386
-15
Area 5 - Designated
Class 1
117
53
-64
Class 2
717
327
-390
Class 3
4
13
-9
Class 4
1230
391
-839
Area 4 - Undesignated
Class 1
121
57
-64
Class 2
478
202
-276
Class 3
2
8
-6
Class 4
642
208
-434
Area 7 - Designated
Class 1
104
74
-30
Class 2
198
162
-36
Class 4
392
249
-143
Area 6 - Undesignated
Class 1
162
116
-46
Class 2
452
276
-176
Class 4
482
363
-119
Area 8 - Undesignated
12
10
Class 1
-2
Class 2
95
89
-6
Class 3
5
6
1
Class 4
306
243
-63
The Coast Guard is required to review
and adjust pilotage rates on the Great
Lakes annually. See Section III., Basis
and Purpose, of this preamble for
detailed discussions of the legal basis
and purpose for this rulemaking. Based
on our annual review for this
rulemaking, we are adjusting the
pilotage rates in 2025 to generate
sufficient revenues for each district to
reimburse its necessary and reasonable
operating expenses, to fairly compensate
properly trained and rested Pilots, and
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to provide an appropriate working
capital fund to use for improvements.
The result would be an increase in rates
for both areas in District One, the
designated area for District Two, and the
undesignated area in District Three. The
result would be a decrease in rates for
the undesignated area for District Two
and the designated area for District
Three. These changes would also lead to
a net increase in the cost of service to
shippers. The change in per-unit cost to
each individual shipper would depend
on their area of operation.
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A detailed discussion of our economic
impact analysis follows.
Affected Population
This proposed rule affects United
States Great Lakes Pilots and Apprentice
Pilots, the 3 pilot associations, and the
owners and operators of 280 oceangoing
vessels that transit the Great Lakes
annually on average from 2021 to 2023.
The Coast Guard estimates that there
will be 61 Registered Pilots and 3
Apprentice Pilots during 2025. The
shippers affected by these rate changes
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
are those owners and operators of
domestic vessels operating ‘‘on register’’
(engaged in foreign trade) and the
owners and operators of non-Canadian
foreign vessels on routes 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 statute
applies only to commercial vessels, not
to recreational vessels. United Statesflagged vessels not operating on register,
and Canadian ‘‘lakers,’’ which account
for most commercial shipping on the
Great Lakes, are not required by 46
U.S.C. 9302 to have pilots. However,
these United States- and Canadianflagged lakers may voluntarily choose to
engage a Great Lakes Registered Pilot.
Vessels that are U.S.-flagged may opt to
have a Pilot for varying reasons, such as
unfamiliarity with designated waters
and ports, or for insurance purposes.
The Coast Guard used billing
information from the years 2021 through
2023 from SeaPro to estimate the
average annual number of vessels
affected by the rate adjustment. SeaPro
tracks data related to managing and
coordinating the dispatch of Pilots on
the Great Lakes, and billing in
accordance with the services. As
described in Step 7 of the ratemaking
methodology, we use a 10-year average
to estimate the traffic. We used 3 years
of the most recent billing data to
estimate the affected population. We
believe that using 3 years of billing data
is a better representation of the vessel
population currently using pilotage
services and impacted by this proposed
rule.
We found that 484 unique vessels
used pilotage services during the years
2021 through 2023. That is, these
vessels had a Pilot dispatched to the
vessel, and billing information was
recorded in SeaPro. Of these vessels,
451 were foreign-flagged vessels and 33
were U.S.-flagged vessels. As stated
previously, U.S.-flagged vessels not
operating on register are not required to
have a Registered Pilot, per 46 U.S.C.
9302, but can voluntarily choose to have
one.
Numerous factors affect vessel traffic,
which varies from year to year.
Therefore, rather than using the total
number of vessels over the time period,
the Coast Guard took an average of the
unique vessels using pilotage services
from the years 2021 through 2023 as the
best representation of vessels estimated
to be affected by the rates in this
proposed rule. From 2021 through 2023,
an average of 280 vessels used pilotage
services annually.40 On average, 268 of
these vessels were foreign-flagged, and
13 were U.S.-flagged vessels that
voluntarily opted into the pilotage
service (these figures are rounded
averages).
Total Cost to Shippers
The rate changes resulting from this
adjustment to the rates would result in
a net increase in the cost of service to
shippers. However, the change in perunit cost to each individual shipper
would be dependent on their area of
operation.
The Coast Guard estimates the effect
of the rate changes on shippers by
comparing the total projected revenues
needed to cover costs in 2024 with the
total projected revenues to cover costs
63371
in 2025. We set pilotage rates so that
pilot associations receive enough
revenue to cover their necessary and
reasonable expenses. Shippers pay these
rates when they engage a Pilot, as
required by 46 U.S.C. 9302. Therefore,
the aggregate payments of shippers to
pilot associations are equal to the
projected necessary revenues for pilot
associations. The revenues each year
represent the total costs that shippers
must pay for pilotage services. The
change in revenue from the previous
year is the additional cost to shippers
discussed in this proposed rule.
The impacts of the rate changes on
shippers are estimated from the district
pilotage projected revenues (shown in
tables 7, 19, and 31 of this preamble).
The Coast Guard estimates that, for
2025, the projected revenue needed for
all three districts is $42,920,634.
To estimate the change in cost to
shippers from this proposed rule, the
Coast Guard compared the 2025 total
projected revenues to the 2024 projected
revenues. Because we review and
prescribe rates for Great Lakes pilotage
annually, the effects are estimated as a
single-year cost rather than annualized
over a 10-year period. In the 2024 final
rule, we estimated the total projected
revenue needed for 2024 as
$40,280,666.41 This is the best
approximation of 2024 revenues, as, at
the time of publication of this proposed
rule, the Coast Guard does not have
enough audited data available for 2024
to revise these projections. Table 41
shows the revenue projections for 2024
and 2025 and details the additional cost
increases to shippers by area and
district as a result of the rate changes on
traffic in Districts One, Two, and Three.
Table 41-Effect of the Proposed Rule by Area and District (U.S. Dollars; Nondiscounted)
Revenue Needed
in 2024
Total, District
One
Total, District
Two
Total, District
Three
System Total
*All
Additional Costs of
this Rule
$14,631,966
$13,695,935
$936,031
$11,817,384
$10,830,491
$986,893
$16,471,284
$15,754,240
$717,044
$42,920,634
$40,280,666
$2,639,968
figures are rounded to the nearest dollar and may not sum.
40 Some vessels entered the Great Lakes multiple
times in a single year, affecting the average number
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18:08 Aug 02, 2024
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of unique vessels using pilotage services in any
given year.
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41 2024
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Final Rule, 89 FR at 9066 (Table 43).
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
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The resulting difference between the
projected revenue in 2024 and the
projected revenue in 2025 is the annual
change in payments from shippers to
pilots as a result of the rate changes
proposed by this NPRM. The effect of
the rate changes to shippers would vary
by area and district. After considering
the change in pilotage rates, the
proposed rate changes would lead to
affected shippers operating in District
One experiencing an increase in
payments of $936,031 over the previous
year. Affected shippers operating in
District Two and District Three would
experience an increase in payments of
$986,893 and $717,044, respectively,
when compared with 2024. The overall
adjustment in payments would increase
payments by shippers of $2,639,968
across all three districts (a 7-percent
increase when compared with 2024).
Again, because the Coast Guard reviews
and sets rates for Great Lakes pilotage
annually, we estimate the impacts as
single-year costs, rather than
annualizing them over a 10-year period.
Table 42 shows the difference in
revenue by revenue-component from
2024 to 2025 and presents each revenuecomponent as a percentage of the total
revenue needed. In both 2024 and 2025,
the largest revenue-component was
target pilotage compensation (63 percent
of total revenue needed in 2024, and 66
percent of total revenue needed in
2025), followed by operating expenses
(30 percent of total revenue needed in
2024, and 29 percent of total revenue
needed in 2025). The large increase in
the working capital fund, 25 percent
from 2024 to 2025, is driven by an
increase in the Target Rate of Return on
Investment, from 4.0742 percent in 2022
to 4.8100 percent in 2023.42
BILLING CODE 9110–04–P
42 Moody’s Seasoned Aaa Corporate Bond Yield,
supra note 17.
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05AUP1
Revenue
Needed in
2024
Revenue Needed in
2025
$12,193,810
Percentage
of Total
Revenue
Needed in
2024
30%
Difference (2025
Revenue - 2024
Revenue)
Percentage Change
from Previous Year
$12,294,085
Percentage
of Total
Revenue
Needed in
2025
29%
Adjusted
Operating
Expenses
Total Target
Pilot
Compensation
Total Target
Apprentice
Pilot
Compensation
Working
Capital Fund
Total Revenue
Needed
$100,275
1%
$25,558,164
63%
$28,158,271
66%
$2,600,107
10%
$951,822
2%
$498,540
1%
($453,282)
(48%)
$1,576,870
4%
$1,969,738
5%
$392,868
25%
$40,280,666
100%
$42,920,634
100%
$2,639,968
7%
•All figures are rounded to the nearest dollar and may not sum.
63373
increase in revenue needed for target
Pilot compensation of $2,600,107, a
E:\FR\FM\05AUP1.SGM
revenue of $2,639,968 needed by the
pilot associations. This represents an
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Component
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
18:08 Aug 02, 2024
As stated above, we estimate that
there would be a total increase in
VerDate Sep<11>2014
EP05AU24.144</GPH>
Table 42 - Difference in Revenue by Revenue-Component
63374
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
decrease in revenue needed for the total
Apprentice Pilot wage benchmark of
($453,282), an increase in the revenue
needed for adjusted operating expenses
of $100,275, and an increase in the
revenue needed for the working capital
fund of $392,868.
The change in revenue needed for
Pilot compensation, $2,600,107, is due
to three factors: (1) The changes to
adjust 2024 pilotage compensation to
account for the difference between
actual ECI inflation 43 (5.1 percent) and
predicted PCE inflation 44 (2.6 percent)
for 2024; (2) projected inflation of
pilotage compensation in Step 2 of the
methodology, using predicted inflation
through 2025; 45 and (3) an increase of
three authorized Pilots.
The target compensation is $461,611
per Pilot in 2025, compared to $440,658
in 2024. The proposed changes to
modify the 2024 Pilot compensation to
account for the difference between
predicted and actual inflation would
increase the 2024 target compensation
value by 2.5 percent. As shown in table
43, this inflation adjustment increases
total compensation by $11,016 per Pilot,
and the total revenue needed by
$672,003, when accounting for all 61
Pilots.
Table 43 - Change in Revenue Resulting from the Change to Inflation of Pilot
Compensation Calculation in Step 4
2024 Target Pilot
Compensation
Adjusted 2024
Compensation ($440,658 x
1.025)
$440,658
$451,674
Difference between
Adjusted Target 2024
Compensation and Target
2024 Compensation
($451,674 - $440,658)
$11,016
Increase in total Revenue
for 61 Pilots ($11,016 x 61)
$672,003
*All figures are rounded to the nearest dollar and may not sum.
Similarly, table 44 shows the impact
of the difference between predicted and
actual inflation on the target Apprentice
Pilot compensation benchmark. The
inflation adjustment increases the
compensation benchmark by $3,966 per
Apprentice Pilot, and the total revenue
needed by $11,898 when accounting for
all three Apprentice Pilots.
Table 44 - Change in Revenue Resulting from the Change to Inflation of
Apprentice Pilot Compensation Calculation in Step 4
$158,637
Difference between
Adjusted Target 2024
Compensation and Target
Compensation ($162,603 $158,637)
$3,966
Increase in total Revenue
for Apprentices ($3,966 x
3)
$11,898
*All figures are rowided to the nearest dollar and may not sum.
43 ECI,
supra note 14.
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18:08 Aug 02, 2024
44 Median Core PCE Inflation June Projection,
supra note 15.
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45 Median Core PCE Inflation December
Projection, supra note 16.
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$162,603
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2024 Target Apprentice
Pilot Compensation
Adjusted 2024
Compensation ($158,637 x
1.025)
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
The Coast Guard predicts that 61
Pilots would be needed for the 2025
season. This is an increase of three
Pilots from the 2024 season. Table 45
shows the increase of $1,351,784 in
revenue needed for Pilot compensation.
To avoid double counting, this value
excludes the change in revenue
63375
resulting from the change to adjust 2024
Pilot compensation to account for the
difference between actual and predicted
inflation.
Table 45 - Change in Revenue Resulting from Increase of Three Pilots
2025 Target Compensation
$461,611
Total Number of New Pilots
3
Total Cost of new Pilots ($461,611 x 3)
Difference between Adjusted Target
2024 Compensation and Target 2024
Compensation ($451,674 - $440,658)
$11,016
Increase in total Revenue for 3 Pilots
($11,016
X
$1,384,833
$33,049
3)
$1,351,784
Net Increase in total Revenue for 3
Pilots ($1,384,833 - $33,049)
•All figures are rounded to the nearest dollar and may not sum.
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the decrease of ($486,642) in revenue
needed solely for Apprentice Pilot
compensation. As noted previously, to
avoid double counting, this value
excludes the change in revenue
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resulting from the change to adjust 2024
Apprentice Pilot compensation to
account for the difference between
actual and predicted inflation.
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Similarly, the Coast Guard predicts
that three Apprentice Pilots would be
needed for the 2025 season. This would
be a decrease of three Apprentice Pilots
from the 2024 season. Table 46 shows
63376
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
Table 46-Change in Revenue Resulting from Decrease of Three Apprentice Pilots
2025 Apprentice Target
Compensation
Total Number of New
Apprentices
Total Cost of new
Apprentices ($166,180 x 3)
Difference between
Adjusted Target 2024
Compensation and Target
2024 Compensation
($162,603 - $158,637)
$166,180
(3)
($498,540)
$3,966
Increase in total Revenue
for -3 Apprentices ($3,966
X -3)
Net Increase in total
Revenue for -3 Apprentices
(-$498,540 - -$11,898)
($11,898)
($486,642)
*All figures are rounded to the nearest dollar and may not sum.
Another increase, $606,130, would be
the result of increasing compensation
for the 61 Pilots, to account for future
inflation of 2.2 percent in 2025. This
would increase total compensation by
$9,937 per Pilot, as shown in table 47.
Table 47 - Change in Revenue Resulting from Inflating 2024 Compensation to 2025
Adjusted 2024 Compensation
2025 Target Compensation ($451,674 x
1.022)
Difference between Adjusted 2024
Compensation and Target 2025
Compensation ($461,611 - $451,674)
Increase in total Revenue for 61 Pilots
($9,937 X 61)
$451,674
$461,611
$9,937
$606,130
*All figures are rounded to the nearest dollar and may not sum.
per Apprentice Pilot, as shown in table
48.
EP05AU24.149</GPH>
Pilots, to account for future inflation of
2.2 percent in 2025. This would
increase total compensation by $3,577
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Similarly, an increase of $10,732
would be the result of increasing
compensation for the three Apprentice
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
63377
Table 48 - Change in Revenue Resulting from Inflating 2024 Apprentice Pilot
Compensation to 2025
Adjusted 2024 Compensation
$162,603
2025 Target Compensation ($461,611 x 36%)
$166,180
Difference between Adjusted Compensation and Target
Compensation ($166,180 - $162,603)
$3,577
Increase in total Revenue for 3 Apprentices ($3,577 x 3)
$10,732
*All figures are rounded to the nearest dollar and may not sum.
Table 49 presents the percentage
change in revenue by area and revenue-
component, excluding surcharges, as
they are applied at the district level.46
BILLING CODE 9110–04–P
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18:08 Aug 02, 2024
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tables 11, 23, and 35. The 2025 projected revenues
are from tables 7, 19, and 31 of this proposed rule.
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2024 projected revenues are from the Great
Lakes Pilotage Rate—2024 Annual Review and
Revisions to Methodology final rule (89 FR 9038),
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46 The
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05AUP1
pilotage services on the Great Lakes.
The rate changes promote safe, efficient,
and reliable pilotage service on the
Great Lakes by (1) ensuring that rates
E:\FR\FM\05AUP1.SGM
Benefits
This proposed rule allows the Coast
Guard to meet the requirements in 46
U.S.C. 9303 to review the rates for
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EP05AU24.151</GPH>
Adjusted Opera ling
E,cpcnscs
DistriciOne:
Dcsil(llatcd
District One:
Undesignated
District Two:
Undesienated
Total Target Pilot Compensation
Total Target Apprentice Pilot
Compensation
2024
2025
Percentage
Change
2024
2025
Percentage
Change
2024
$2,851,215
$2,737,239
(4%)
$4,406,580
$5,077,721
15%
$285,547
$1,900,809
$1,824,828
(4%)
$3,525,264
$4,154A99
18%
$190,364
$1,102,673
$1,304,595
18%
$3,525,264
$3,231,277
(8%)
$63,455
$1,654,014
$1,956,892
18%
$3,965,922
$4,616,110
16%
(4%)
$7,931,844
$8,770,609
(8%)
$2,203.290
$2,308,055
Working Capital Fund
Percentage
Change
2024
(65%)
$307,331
(65%)
$228,825
$66,472
5%
$191,137
$95,182
$99,708
5%
$232,845
11%
$250,646
$131,282
(48%)
$483,269
5%
$66.628
$34,898
(48%)
$133,463
2025
$99,708
$66,472
Total Revenue Needed
Percentage
Change
2024
24%
$7,850,673
27%
$5,845,262
$221,373
16%
$320.957
2025
$380,696
2025
Percentage
Change
SS,295,364
5.7%
S6,336,602
8.4%
$4,882,529
S4,823,717
(1.2%)
38%
$5,947,963
S6,993,667
17.6%
24%
$12,344,968
18%
$3,409,272
$290,803
District Two:
Designated
District
Three:
lJndesienated
District
Three:
Desi,rnate<l
$3,549,108
$3,679,209
$921,423
$1,005,891
$13,049.892
$598,893
$157,016
'All figures are rounded to the nearest dollar and may not sum.
5.7%
S3,421,392
0.4%
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
18:08 Aug 02, 2024
BILLING CODE 9110–04–C
VerDate Sep<11>2014
Table 49 - Difference in Revenue by Revenue-Component and Area
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
cover an association’s operating
expenses; (2) providing fair Pilot
compensation, adequate training, and
sufficient rest periods for Pilots; and (3)
ensuring that pilot associations produce
enough revenue to fund future
improvements. The rate changes also
help recruit and retain Pilots, which
ensures enough Pilots to meet peak
shipping demand, helping to reduce
delays caused by Pilot shortages.
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.
For this proposed rule, the Coast
Guard reviewed recent company size
and ownership data for the vessels
identified in SeaPro, and we reviewed
business revenue and size data provided
by publicly available sources such as
ReferenceUSA.47 As described in
Section VII., Regulatory Analyses, of
this preamble, we found that 484 unique
vessels used pilotage services during the
years 2021 through 2023. These vessels
63379
are owned by 63 entities, of which 49
are foreign entities that operate
primarily outside the United States, and
the remaining 14 entities are U.S.
entities. We compared the revenue and
employee data found in the company
search to the Small Business
Administration’s (SBA) small business
threshold, as defined in the SBA’s
‘‘Table of Size Standards’’ for small
businesses, to determine how many of
these companies are considered small
entities.48 Table 50 shows the North
American Industry Classification
System (NAICS) codes of the U.S.
entities and the small entity standard
size established by the SBA.
Table 50 - NAICS Codes and Small Entities Size Standards
175 Employees
$47,000,000
$47,000,000
$47,000,000
$25,000,000
$25,000,000
$11,000,000
Of the 14 U.S. entities, four exceed
the SBA’s small business standards for
small entities. To estimate the potential
impact on the remaining 10 small
entities, the Coast Guard used their 2023
invoice data to estimate their pilotage
costs in 2025. We increased their 2023
costs to account for the changes in
pilotage rates resulting from this
proposed rule and the 2024 final rule.
We estimated the change in cost to these
entities resulting from this proposed
rule by subtracting their estimated 2024
pilotage costs from their estimated 2025
pilotage costs and found the average
costs to small firms would be
approximately $12,510, with a range of
$1,294 to $39,146. We then compared
the estimated change in pilotage costs
between 2024 and 2025 with each firm’s
annual revenue. In all but one case, the
impact of the change in estimated
pilotage expenses would be below 1
percent of revenues. For one entity, the
impact would be 6.33 percent of
revenues.
In addition to the owners and
operators discussed previously, three
U.S. entities that receive revenue from
pilotage services would be affected by
this proposed rule. These are the three
pilot associations that provide and
manage pilotage services within the
Great Lakes districts. District One, ‘‘St.
Lawrence Seaway Pilots Association’’
uses the NAICS code ‘‘Inland Water
Freight Transportation’’ with a smallentity size standard of 1,050 employees.
District Two, ‘‘Lakes Pilots Association’’
uses the NAICS code, ‘‘Business
Associations’’ with a small-entity size
standard of $15,500,000 in revenue.
District Three, ‘‘Western Great Lakes
Pilots Association’’ did not have a
registered NAICS code through
ReferenceUSA. All three associations
are considered small entities.
Finally, the Coast Guard did not find
any small not-for-profit organizations
that are independently owned and
operated and are not dominant in their
fields that would be impacted by this
proposed rule. We also did not find any
small governmental jurisdictions with
populations of fewer than 50,000 people
that would be impacted by this
proposed rule. Based on this analysis,
we conclude this proposed rule would
not have a significant economic impact
on a substantial number of small
entities.
Therefore, the Coast Guard certifies
under 5 U.S.C. 605(b) that this proposed
47 See Resources for Reference Solutions Users,
ReferenceUSA, https://resource.referenceusa.com/
(last accessed 04/22/2024).
48 See Table of Size Standards, https://
www.sba.gov/document/support--table-size-
standards (Last visited 5/01/24). SBA has
established a ‘‘Table of Size Standards’’ for small
businesses that sets small business size standards
by NAICS code. A size standard, which is usually
stated in number of employees or average annual
receipts (‘‘revenues’’), represents the largest size
that a business (including its subsidiaries and
affiliates) may be in order to remain classified as a
small business for SBA and Federal contracting
programs.
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NAICS
Description
238910 Site Preparation Contractors
Transportation Equipment and Supplies (except
423860 Motor Vehicle) Merchant Wholesalers
488330 Navigational Services to Shiooing
488390 Other Support Activities for Water Transportation
Administrative Management and General
541611 Management Consulting Services
561510 Travel Agencies
562910 Remediation Services
713930 Marinas
Small Entity Size
Standard
$19,000,000
63380
Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
rule would not have a significant
economic impact on a substantial
number of small entities. If you think
that your business, organization, or
governmental jurisdiction qualifies as a
small entity and that this proposed rule
would have a significant economic
impact on it, please submit a comment
to the docket at the address listed in the
Public Participation and Request for
Comments section of this preamble. In
your comment, explain why you think
it qualifies and how and to what degree
this proposed rule would economically
affect it.
The Coast Guard is unable to offer any
meaningful alternatives to this proposed
rule. Under 46 U.S.C. 9303, the Coast
Guard is required to prescribe these
rates via regulation and therefore cannot
identify any significant alternatives
which ‘‘accomplish the stated objectives
of the applicable statutes’’ (5 U.S.C.
603(c)).
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C. Assistance for Small Entities
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104–
121, we want to assist small entities in
understanding this proposed rule so that
they can better evaluate its effects on
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 or
email the person in the FOR FURTHER
INFORMATION CONTACT section of this
proposed rule. The Coast Guard will not
retaliate against small entities that
question or complain about this
proposed 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).
(Federalism) if it has a substantial direct
effect on States, on the relationship
between the National Government and
the States, or on the distribution of
power and responsibilities among the
various levels of government. We have
analyzed this proposed rule under
Executive Order 13132 and have
determined that it is consistent with the
fundamental federalism principles and
preemption requirements described in
Executive Order 13132. Our analysis
follows.
Congress directed the Coast Guard to
establish ‘‘rates and charges for pilotage
services.’’ 46 U.S.C. 9303(f). This
proposed regulation is issued pursuant
to that statute and is preemptive of State
law as specified in 46 U.S.C. 9306.
Under 46 U.S.C. 9306, a ‘‘State or
political subdivision of a State may not
regulate or impose any requirement on
pilotage on the Great Lakes.’’ As a
result, States or local governments are
expressly prohibited from regulating
within this category. Therefore, this
proposed rule is consistent with the
fundamental federalism principles and
preemption requirements described in
Executive Order 13132.
While it is well settled that States may
not regulate in categories in which
Congress intended the Coast Guard to be
the sole source of a vessel’s obligations,
the Coast Guard recognizes the key role
that State and local governments may
have in making regulatory
determinations. Additionally, for rules
with federalism implications and
preemptive effect, Executive Order
13132 specifically directs agencies to
consult with State and local
governments during the rulemaking
process. If you believe this proposed
rule would have implications for
federalism under Executive Order
13132, please call or email the person
listed in the FOR FURTHER INFORMATION
CONTACT section of this preamble.
D. Collection of Information
This proposed rule would call for no
new collection of information under the
Paperwork Reduction Act of 1995, 44
U.S.C. 3501–3520.
F. Unfunded Mandates
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 million (adjusted for inflation) or
more in any one year. Although this
proposed rule would not result in such
an expenditure, we do discuss the
potential effects of this proposed rule
elsewhere in this preamble.
E. Federalism
A rule has implications for federalism
under Executive Order 13132
G. Taking of Private Property
This proposed rule would not cause a
taking of private property or otherwise
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18:08 Aug 02, 2024
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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 proposed rule is not an
economically significant rule and would
not create an environmental risk to
health or risk to safety that might
disproportionately affect children.
J. Indian Tribal Governments
This proposed rule does not have
tribal implications under Executive
Order 13175 (Consultation and
Coordination with Indian Tribal
Governments), because it would not
have a substantial direct effect on one or
more Indian tribes, on the relationship
between the Federal Government and
Indian tribes, or on the distribution of
power and responsibilities between the
Federal Government and Indian tribes.
K. Energy Effects
We have analyzed this 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.
L. Technical Standards
The National Technology Transfer
and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies
to use voluntary consensus standards in
their regulatory activities unless the
agency provides Congress, through
OMB, 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
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Federal Register / Vol. 89, No. 150 / Monday, August 5, 2024 / Proposed Rules
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.
PART 401—GREAT LAKES PILOTAGE
REGULATIONS
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M. Environment
We have analyzed this proposed rule
under Department of Homeland
Security Management Directive 023–01,
Rev. 1, associated implementing
instructions, and Environmental
Planning COMDTINST 5090.1 (series),
which guide the Coast Guard in
complying with the National
Environmental Policy Act of 1969 (42
U.S.C. 4321–4370f), and have made a
preliminary determination that this
action is one of a category of actions that
do not individually or cumulatively
have a significant effect on the human
environment. A preliminary Record of
Environmental Consideration
supporting this determination is
available in the docket. For instructions
on locating the docket, see the Public
Participation and Request for Comments
section of this preamble. This proposed
rule would be categorically excluded
under paragraphs A3 and L54 of
Appendix A, Table 1 of the Department
of Homeland Security (DHS) Instruction
Manual 023–01–001–01, Rev. 1.
Paragraph A3 pertains to the
promulgation of rules of the following
nature: (a) those of a strictly
administrative or procedural nature; (b)
those that implement, without
substantive change, statutory or
regulatory requirements; (c) those that
implement, without substantive change,
procedures, manuals, and other
guidance documents; (d) those that
interpret or amend an existing
regulation without changing its
environmental effect; (e) those that
provide technical guidance on safety
and security matters; and (f) those that
provide guidance for the preparation of
security plans. Paragraph L54 pertains
to regulations which are editorial or
procedural.
This proposed rule involves adjusting
the pilotage rates for 2025 to account for
changes in district operating expenses,
changes in the number of pilots, and
anticipated inflation. All changes are
consistent with the Coast Guard’s
maritime safety missions. 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
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18:08 Aug 02, 2024
(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:
Jkt 262001
1. The authority citation for part 401
is revised to read as follows:
■
Authority: 46 U.S.C. 2103, 2104(a), 6101,
7701, 8105, 9303, 9304; DHS Delegation No.
00170.1, Revision No. 01.4, paragraphs
(II)(92)(a), (d), (e), (f).
2. Amend § 401.405 by revising
paragraphs (a)(1) through (6) to read as
follows:
■
§ 401.405
Pilotage rates and charges.
(a) * * *
(1) The St. Lawrence River is $981;
(2) Lake Ontario is $640;
(3) Lake Erie is $573;
(4) The navigable waters from
Southeast Shoal to Port Huron, MI is
$748;
(5) Lakes Huron, Michigan, and
Superior is $438; and
(6) The St. Marys River is $821.
*
*
*
*
*
Dated: July 29, 2024.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard, Assistant
Commandant for Prevention Policy.
[FR Doc. 2024–17028 Filed 8–2–24; 8:45 am]
BILLING CODE 9110–04–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 25, 73, and 76
[MB Docket No. 24–211; FCC 24–74; FR ID
235498]
Disclosure and Transparency of
Artificial Intelligence-Generated
Content in Political Advertisements
Federal Communications
Commission.
ACTION: Proposed rule.
AGENCY:
In this document, the Federal
Communications Commission
(Commission or FCC) initiates a
proceeding to provide greater
transparency regarding the use of
artificial intelligence-generated content
in political advertising. Specifically, the
Commission proposes to require radio
and television broadcast stations; cable
operators, Direct Broadcast Satellite
(DBS) providers, and Satellite Digital
Audio Radio Service (SDARS) licensees
engaged in origination programming;
and permit holders transmitting
SUMMARY:
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63381
programming pursuant to section 325(c)
of the Communications Act of 1934
(Act), to provide an on-air
announcement for all political ads
(including both candidate ads and issue
ads) that contain artificial intelligence
(AI)-generated content disclosing the
use of such content in the ad. The
Commission also propose to require
these licensees and regulatees to include
a notice in their online political files for
all political ads that include AIgenerated content disclosing that the ad
contains such content.
DATES: Comments for this proceeding
are due on or before September 4, 2024;
reply comments are due on or before
September 19, 2024.
ADDRESSES: You may submit comments,
identified by MB Docket No. 24–211, by
any of the following methods:
D Federal Communications
Commission’s website: https://
www.fcc.gov/cgb/ecfs/. Follow the
instructions for submitting comments.
D Mail: Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail
(although the Commission continues to
experience delays in receiving U.S.
Postal Service mail). All filings must be
addressed to the Commission’s
Secretary, Office of the Secretary,
Federal Communications Commission.
D People with Disabilities: Contact the
FCC to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by email: FCC504@fcc.gov
or phone: (202) 418–0530 or TTY: (202)
418–0432.
For detailed instructions for
submitting comments and additional
information on the rulemaking process,
see the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT: For
additional information, contact Kathy
Berthot, Kathy.Berthot@fcc.gov, of the
Media Bureau, Policy Division, (202)
418–7454.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Proposed Rulemaking (NPRM), FCC 24–
74, adopted on July 10, 2024, and
released on July 25, 2024. The full text
is available for public inspection and
copying during regular business hours
in the FCC Reference Center, Federal
Communications Commission, 445 12th
Street SW, CY–A257, Washington, DC
20554. This document will also be
available via ECFS (https://www.fcc.gov/
cgb/ecfs/). Documents will be available
electronically in ASCII, Word 97, and/
or Adobe Acrobat. Alternative formats
are available for people with disabilities
E:\FR\FM\05AUP1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 150 (Monday, August 5, 2024)]
[Proposed Rules]
[Pages 63334-63381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17028]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Coast Guard
46 CFR Part 401
[Docket No. USCG-2024-0406]
RIN 1625-AC94
Great Lakes Pilotage Rates--2025 Annual Review
AGENCY: Coast Guard, DHS.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In accordance with the statutory provisions enacted by the
Great Lakes Pilotage Act of 1960, the Coast Guard is proposing new
pilotage rates for 2025. The Coast Guard estimates that this proposed
rule would result in approximately a 7 percent increase in operating
costs compared to the 2024 season. The proposed new pilotage rates are
the result of increases in both the number of Pilots and revenue needed
for the working capital fund.
DATES: Comments and related material must be received by the Coast
Guard on or before September 4, 2024.
ADDRESSES: You may submit comments identified by docket number USCG-
2024-0406 using the Federal Decision-Making Portal at
www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments. This notice of proposed rulemaking
with its plain-language, 100-word-or-less proposed rule summary will be
available in this same docket.
FOR FURTHER INFORMATION CONTACT: For information about this document
call or email Mr. Brian Rogers, Commandant, Office of Waterways and
Ocean Policy--Great Lakes Pilotage Division (CG-WWM-2), Coast Guard;
telephone 410-360-9260, email [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Public Participation and Request for Comments
II. Abbreviations
III. Basis and Purpose
IV. Background
V. Summary of the Ratemaking Methodology
VI. Discussion of Proposed Rate Adjustments
District One
A. Step 1: Recognize Previous Operating Expenses
B. Step 2: Project Operating Expenses, Adjusting for Inflation
or Deflation
C. Step 3: Estimate Number of Registered Pilots and Apprentice
Pilots
D. Step 4: Determine Target Pilot Compensation Benchmark and
Apprentice Pilot Wage Benchmark
E. Step 5: Project Working Capital Fund
F. Step 6: Project Needed Revenue
G. Step 7: Calculate Initial Base Rates
H. Step 8: Calculate Average Weighting Factors by Area
I. Step 9: Calculate Revised Base Rates
J. Step 10: Review and Finalize Rates
District Three
A. Step 1: Recognize Previous Operating Expenses
B. Step 2: Project Operating Expenses, Adjusting for Inflation
or Deflation
C. Step 3: Estimate Number of Registered Pilots and Apprentice
Pilots
D. Step 4: Determine Target Pilot Compensation Benchmark and
Apprentice Pilot Wage Benchmark
E. Step 5: Project Working Capital Fund
F. Step 6: Project Needed Revenue
G. Step 7: Calculate Initial Base Rates
H. Step 8: Calculate Average Weighting Factors by Area
I. Step 9: Calculate Revised Base Rates
J. Step 10: Review and Finalize Rates
VII. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates
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
The Coast Guard views public participation as essential to
effective rulemaking and will consider all comments and material
received during the comment period. Your comment can help shape the
outcome of this rulemaking. If you submit a comment, please include the
docket number for this rulemaking, indicate the specific section of
this document to which each comment applies, and provide a reason for
each suggestion or recommendation.
Submitting comments. We encourage you to submit comments through
the Federal Decision-Making Portal at www.regulations.gov. To do so, go
to https://www.regulations.gov, type USCG-2024-0406 in the search box
and click ``Search.'' Next, look for this document in the Search
Results column, and click on it. Then click on the Comment option. If
you cannot submit your material by using www.regulations.gov, call or
email the person in the FOR FURTHER INFORMATION CONTACT section of this
proposed rule for alternative instructions.
Viewing material in docket. To view documents mentioned in this
proposed rule as being available in the docket, find the docket as
described in the previous paragraph, and then select ``Supporting &
Related Material'' in the Document Type column. Public comments will
also be placed in our online docket and can be viewed by following
instructions on the www.regulations.gov ``Frequently Asked Questions''
(FAQ) web page. That FAQ page also explains how to subscribe for email
alerts that will notify you when comments are posted or if a final rule
is published. We review all comments received, but we will only post
comments that address the topic of the proposed rule. We may choose not
to post off-topic, inappropriate, or duplicate comments that we
receive.
Personal information. We accept anonymous comments. Comments we
post to www.regulations.gov will include any personal information you
have provided. For more about privacy and submissions to the docket in
response to this document, see DHS's eRulemaking System of Records
notice (85 FR 14226, March 11, 2020).
Public meeting. We do not plan to hold a public meeting, but we
will consider doing so if we determine from public comments that a
meeting would be helpful. We would issue a separate Federal Register
notice to announce the date, time, and location of such a meeting.
II. Abbreviations
2024 final rule Great Lakes Pilotage Rates--2024 Annual Review
2023 final rule Great Lakes Pilotage Rates--2023 Annual Ratemaking
and Review of Methodology
APA American Pilots' Association
BLS Bureau of Labor Statistics
CFR Code of Federal Regulations
CPI Consumer Price Index
DHS Department of Homeland Security
Director U.S. Coast Guard's Director of the Great Lakes Pilotage
ECI Employment Cost Index
FOMC Federal Open Market Committee
FR Federal Register
GLPAC Great Lakes Pilotage Advisory Committee
LPA Lakes Pilots Association
NAICS North American Industry Classification System
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
PCE Personal Consumption Expenditures
Sec. Section
SBA Small Business Administration
SLSPA Saint Lawrence Seaway Pilot Association
[[Page 63335]]
U.S.C. United States Code
WGLPA Western Great Lakes Pilots Association
III. Basis and Purpose
The legal basis of this rulemaking is Title 46 of the United States
Code (U.S.C.) Chapter 93,\1\ which requires foreign merchant vessels
and United States vessels operating ``on register'' (meaning United
States vessels engaged in foreign trade) to use United States or
Canadian pilots while transiting the United States waters of the St.
Lawrence Seaway and the Great Lakes system.\2\ For U.S. Great Lakes
Pilots, the statute requires the Secretary to ``prescribe by regulation
rates and charges for pilotage services, giving consideration to the
public interest and the costs of providing the services.'' Title 46 of
the U.S.C. 9303(f) also requires that rates be established or reviewed
and adjusted each year, no later than March 1. The Secretary's duties
and authority under 46 U.S.C. Chapter 93 have generally been delegated
to the Coast Guard.\3\
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\1\ 46 U.S.C. 9301-9308.
\2\ 46 U.S.C. 9302(a)(1).
\3\ Department of Homeland Security (DHS) Delegation No. 00170.1
(II)(92)(f), Revision No. 01.4. The Secretary retains the authority
under Section 9307 to establish, and appoint members to, a Great
Lakes Pilotage Advisory Committee (GLPAC).
---------------------------------------------------------------------------
The purpose of this proposed rule is to issue new pilotage rates
for 2025. The Coast Guard believes that the new rates will continue to
promote our goal, as outlined in title 46 of the Code of Federal
Regulations (CFR), 404.1(a), to promote safe, efficient, and reliable
pilotage service in the Great Lakes by generating sufficient revenue
for each pilot association to reimburse its necessary and reasonable
operating expenses, fairly compensate trained and rested Pilots, and
provide appropriate funds to use for improvements.
IV. Background
Rates are the foundation for safe, efficient, and reliable pilotage
service to facilitate maritime commerce, protect the marine
environment, and comply with National Transportation Safety Board
recommendations regarding staffing and pilot fatigue. The pilotage
rates for the 2025 season range from a proposed $438 to $981 per pilot
hour, depending on which of the specific 6 areas pilotage service is
provided. The rates are paid by shippers to the pilot associations.
There are three American pilotage districts on the Great Lakes,
each represented by a pilot association.\4\ Each pilotage district is
further divided into ``designated'' and ``undesignated'' areas.
Designated areas, classified as such by Presidential Proclamation, are
waters in which pilots must direct the navigation of vessels at all
times.\5\ Undesignated areas are open bodies of water where pilots must
only ``be on board and available to direct the navigation of the
vessel'' at the discretion of the vessel master.\6\ For these reasons,
pilotage rates in designated areas can be significantly higher than
those in undesignated areas.
---------------------------------------------------------------------------
\4\ The Saint Lawrence Seaway Pilotage Association (SLSPA)
provides pilotage services in District One, which includes all U.S.
waters of the St. Lawrence River and Lake Ontario. The Lakes Pilots
Association (LPA) provides pilotage services in District Two, which
includes all U.S. waters of Lake Erie, the Detroit River, Lake St.
Clair, and the St. Clair River. Finally, the Western Great Lakes
Pilots Association (WGLPA) provides pilotage services in District
Three, which includes all U.S. waters of the St. Marys River; Sault
Ste. Marie Locks; and Lakes Huron, Michigan, and Superior.
\5\ Presidential Proclamation 3385, Designation of restricted
waters under the Great Lakes Pilotage Act of 1960, December 22, 1960
(https://www.archives.gov/federal-register/codification/proclamations/03385.html) (last accessed 5/01/24).
\6\ 46 U.S.C. 9302(a)(1)(B).
---------------------------------------------------------------------------
The three pilot associations, which are the exclusive U.S. source
of Registered Pilots on the Great Lakes, use the revenue from the
shippers to cover operating expenses, maintain infrastructure,
compensate Apprentice and Registered Pilots, acquire and implement
technological advances, train new personnel, and provide for continuing
professional development. Each pilot association is an independent
business and is the sole provider of pilotage services in its district
of operation. Each pilot association is responsible for funding its own
operating expenses, infrastructure maintenance, and compensation for
Pilots and Apprentice Pilots.\7\
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\7\ Apprentice Pilots and Applicant Pilots are compensated by
the pilot association they are training with, which is funded
through the pilotage rates. The ratemaking methodology accounts for
an Apprentice Pilot wage benchmark in Step 4 per 46 CFR 404.104(d).
The Applicant Pilot salaries are included in the pilot associations'
operating expenses used in Step 1 per 46 CFR 404.101.
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The actual demand for service dictates the compensation amount for
United States Registered Pilots. We divide that amount by the historic
10-year average for pilotage demand. We recognize that, in years where
demand for pilotage services exceeds the 10-year average, pilot
associations will accrue more revenue than projected, while, in years
where demand is below average, they will take in less. We believe that,
over the long term, however, this scheme ensures that infrastructure
will be maintained, and that Pilots will receive adequate compensation
and work a reasonable number of hours, with adequate rest between
assignments, to ensure retention of highly trained personnel.
In this notice of proposed rulemaking (NPRM), we are conducting our
annual review and interim adjustment to the base pilotage rates for
2025. The Coast Guard last conducted a full ratemaking in 2023, with
the ``Great Lakes Pilotage Rates--2023 Annual Ratemaking and Review of
Methodology'' final rule (hereafter the ``2023 final rule'') (88 FR
12226, published February 27, 2023). This proposed rule is an interim
ratemaking under 46 CFR 404.100(b).
V. Summary of the Ratemaking Methodology
The ratemaking methodology, outlined in 46 CFR 404.101 through
404.110, consists of 10 steps that are designed to account for the
revenues needed and total traffic expected in each district. The first
several steps of the methodology establish base pilotage rates.
Additional steps to incorporate the weighting factors are necessary to
establish the final pilotage rates. The result is an hourly rate,
determined separately for each of the areas administered by the Coast
Guard.
In Step 1, ``Recognize previous operating expenses,'' (Sec.
404.101), the U.S. Coast Guard's Director of the Great Lakes Pilotage
(``Director'') uses an independent third party to review each pilot
association's audited operating expenses from each of the three pilot
associations. Operating expenses include all allowable expenses, minus
Pilot and Apprentice Pilot wages and benefits. This number forms the
baseline amount that each association is budgeted. Because of the time
delay between when the association submits raw numbers and when the
Coast Guard receives audited numbers, this number is 3 years behind the
projected year of expenses. Therefore, in calculating the 2025 rates in
this proposal, we begin with the audited expenses from the shipping
activity in 2022.
While each pilot association operates in an entire district
(including both designated and undesignated areas), the Coast Guard
determines costs by area. We allocate certain operating expenses to
designated areas and certain operating expenses to undesignated areas.
In some cases, we can allocate the costs based on where they are
accrued. For example, we can allocate the costs of insurance for
Apprentice Pilots who operate in undesignated areas only. In other
situations, such as general legal expenses, expenses are distributed
between designated and undesignated waters on a ``pro rata'' basis,
based upon the proportion of income forecasted from the respective
portions of the district.
[[Page 63336]]
In Step 2, ``Project operating expenses, adjusting for inflation or
deflation,'' (Sec. 404.102), the Director develops the 2025 projected
operating expenses. To do this, we apply inflation adjustors for 3
years to the operating expense baseline received in Step 1. The
inflation factors are from the Bureau of Labor Statistics' (BLS)
Consumer Price Index (CPI) for the Midwest Region, or, if not
available, the Federal Open Market Committee (FOMC) median economic
projections for Personal Consumption Expenditures (PCE) inflation. This
step produces the total operating expenses for each area and district.
In Step 3, ``Estimate number of Registered Pilots and Apprentice
Pilots,'' (Sec. 404.103), the Director calculates how many Registered
and Apprentice Pilots are needed for each district. To do this, we
employ a ``staffing model,'' described in Sec. 401.220, paragraphs
(a)(1) through (3), to estimate how many Pilots would be needed to
handle shipping during the beginning and close of the season. This
number provides guidance to the Director in approving an appropriate
number of Pilots.
At the September 7, 2023 GLPAC meeting, there was a unanimous
recommendation for an August 1 cutoff date to allow an Apprentice
Pilot, who has completed all their training, to be recognized as a
fully registered Pilot in the rate.\8\ The Coast Guard agrees that this
change is both necessary and reasonable, as it provides the proper
compensation based on the most accurate data. If an Apprentice Pilot is
scheduled to complete training and becomes a fully registered Pilot
before August 1, they will be counted as a fully registered Pilot in
the rate; but if they do not meet the August 1 deadline, those funds
may be adjusted in the proceeding rate for up to the full amount. In
addition, if a fully registered Pilot retires, or an Apprentice Pilot
quits, and has been counted in the rate, the proceeding rate may be
adjusted according for up to the full amount.
---------------------------------------------------------------------------
\8\ Transcript of United States Coast Guard Great Lakes Pilotage
Advisory Committee Meeting at 97 (Sept. 7, 2023), https://www.regulations.gov/document/USCG-2023-0438-0009 (last accessed 05/
31/2024) (last accessed 05/31/2024).
---------------------------------------------------------------------------
In Step 4 of the ratemaking calculation, we determine the number of
Pilots provided by the pilot associations (see Sec. 404.103) and use
that figure to determine how many Pilots need to be compensated via the
pilotage fees collected. In the first part of Step 4, ``Determine
target Pilot compensation benchmark and Apprentice Pilot wage
benchmark,'' (Sec. 404.104(b)(1)), the Director adjusts the previous
year's individual target Pilot compensation by the difference between
the previous year's BLS Employment Cost Index for the Transportation
and Materials sector and the FOMC median economic projections for
Personal Consumption Expenditures inflation value used to inflate the
previous year's target Pilot compensation.
In the second part of Step 4, (Sec. 404.104(b)(2)), the Director
then adjusts that value by the FOMC median economic projections for
Personal Consumption Expenditures inflation for the upcoming year.
In the final part of Step 4, Sec. 404.104(c) and (d), the Director
determines the total target compensation figure for each district. To
do this, the Director multiplies the compensation benchmark by the
number of Pilots for each area and district (from Step 3), producing a
figure for total Pilot compensation. Based on the total Pilot
compensation, the Director determines the individual Apprentice Pilot
wage benchmark at the rate of 36 percent of the individual target Pilot
compensation, as calculated according to paragraphs (a) or (b) of this
section.
In Step 5, ``Project working capital fund,'' (Sec. 404.105), the
Director calculates an added value to pay for needed capital
improvements and other non-recurring expenses, such as technology
investments and infrastructure maintenance. This value is calculated by
adding the total operating expenses (derived in Step 2) to the total
target Pilot compensation and the total target Apprentice Pilot wage
(derived in Step 4), then by multiplying that figure by the preceding
year's average annual rate of return for new issues of high-grade
corporate securities. This figure constitutes the ``working capital
fund'' for each area and district.
In Step 6, ``Project needed revenue,'' (Sec. 404.106), the
Director simply adds the totals produced by the preceding steps. The
projected operating expenses for each area and district (from Step 2)
is added to the total Pilot compensation, including Apprentice Pilot
wage benchmarks (from Step 4), and the working capital fund
contribution (from Step 5). The total figure, calculated separately for
each area and district, is the ``needed revenue.''
In Step 7, ``Calculate initial base rates,'' (Sec. 404.107), the
Director calculates an hourly pilotage rate to cover the needed
revenue, as calculated in Step 6. This step consists of first
calculating the 10-year average of traffic hours for each area. Next,
we divide the revenue needed in each area (calculated in Step 6) by the
10-year average of traffic hours to produce an initial base rate.
An additional element, the ``weighting factor,'' is required under
Sec. 401.400. Pursuant to that section, ships pay a multiple of the
``base rate,'' as calculated in Step 7, by a number ranging from 1.0
(for the smallest ships, or ``Class I'' vessels) to 1.45 (for the
largest ships, or ``Class IV'' vessels). This significantly increases
the revenue collected, and we need to account for the added revenue
produced by the weighting factors to ensure that shippers are not
overpaying for pilotage services. We do this in the next step.
In Step 8, ``Calculate average weighting factors by Area,'' (Sec.
404.108), the Director calculates how much extra revenue, as a
percentage of total revenue, has historically been produced by the
weighting factors in each area. We do this by using a historical
average of the applied weighting factors for each year since 2014 (the
first year the current weighting factors were applied).
In Step 9, ``Calculate revised base rates,'' (Sec. 404.109), the
Director modifies the base rates by accounting for the extra revenue
generated by the weighting factors. We do this by dividing the initial
pilotage rate for each area (from Step 7) by the corresponding average
weighting factor (from Step 8), to produce a revised rate.
In Step 10, ``Review and finalize rates,'' (Sec. 404.110), often
referred to informally as ``Director's discretion'', the Director
reviews the revised base rates (from Step 9) to ensure that they meet
the goals set forth in 46 U.S.C. 9303(f) and 46 CFR 404.1(a), which
include promoting efficient, safe, and reliable pilotage service on the
Great Lakes; generating sufficient revenue for each pilot association
to reimburse necessary and reasonable operating expenses; compensating
trained and rested pilots fairly; and providing appropriate revenue for
improvements.
VI. Discussion of Proposed Rate Adjustments
In this NPRM, we are proposing new pilotage rates for 2025. We
propose to conduct the 2025 ratemaking as an interim ratemaking, as we
did in the 2024 ratemaking (89 FR 9038). Thus, the Coast Guard proposes
to adjust the compensation benchmark following the interim ratemaking
procedures under Sec. 404.100(b), rather than following the procedures
for a full ratemaking under Sec. 404.100(a).
This section discusses the proposed rate changes using the
ratemaking steps provided in 46 CFR part 404. We will detail all 10
steps of the ratemaking
[[Page 63337]]
procedure for each of the 3 districts to show how we arrive at the
proposed new rates.
The Coast Guard is proposing the rates shown in table 1.
[GRAPHIC] [TIFF OMITTED] TP05AU24.093
This proposed rule would affect 61 U.S. Great Lakes Pilots, 3
Apprentice Pilots, 3 pilot associations, and the owners and operators
of an average of 280 oceangoing vessels that transit the Great Lakes
annually. This proposed rule would not affect the Coast Guard's budget
or increase Federal spending, because foreign shippers, foreign cruise
ships, and vessels requesting voluntary pilotage pay these rates
directly to the respective pilot association The estimated overall
annual regulatory economic impact of this rate change would be a net
increase of $2,639,968 in payments made by the foreign shippers,
foreign cruise ships, and vessels requesting voluntary pilotage
service, a seven percent increase from operating costs in the 2024
shipping season. This represents an increase in revenue needed for
target Pilot compensation, a decrease in revenue needed for the total
Apprentice Pilot wage benchmark, an increase in the revenue needed for
adjusted operating expenses, and an increase in the revenue needed for
the working capital fund.
This proposed rule would establish the 2025 yearly target
compensation for Pilots on the Great Lakes at $461,611 per Pilot (a
$20,953, or 4.75 percent, increase over their 2024 target
compensation). Because the Coast Guard must review, and, if necessary,
adjust rates each year, we analyze these as single-year costs and do
not annualize them over 10 years. Section VII., Regulatory Analyses, in
this preamble provides the regulatory impact analyses of this proposed
rule. The following work demonstrates how we arrived at the proposed
rate for each pilotage district.
District One
A. Step 1: Recognize Previous Operating Expenses
Step 1 in the ratemaking methodology requires that the Coast Guard
review and recognize the operating expenses for the last full year for
which figures are available (Sec. 404.101). To do so, we begin by
reviewing the independent accountant's financial reports for each
association's 2022 expenses and revenues.\9\ For accounting purposes,
the financial reports divide expenses into designated and undesignated
areas. For costs accrued by the pilot associations generally, such as
employee benefits, the cost is divided between the designated and
undesignated areas on a pro rata basis. Adjustments have been made by
the auditors and are explained in the auditor's reports, which are
available in the docket for this
[[Page 63338]]
rulemaking, where indicated under Section I., Public Participation and
Request for Comments.
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\9\ These reports are available in the docket for this proposed
rule.
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The recognized operating expenses for District One are shown in
table 2.
BILLING CODE 9110-04-P
[GRAPHIC] [TIFF OMITTED] TP05AU24.094
[[Page 63339]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.095
BILLING CODE 9110-04-C
B. Step 2: Project Operating Expenses, Adjusting for Inflation or
Deflation
In accordance with the text in Sec. 404.102, having identified the
recognized 2022 operating expenses in Step 1, the next step is to
estimate the current year's operating expenses by adjusting for
inflation over the 3-year
[[Page 63340]]
period. We calculate inflation using the BLS data from the CPI for the
Midwest Region of the United States for the 2023 inflation rate.\10\
Because the BLS does not provide forecasted inflation data, we use
economic projections from the Federal Reserve for the 2024 and 2025
inflation modification.\11\ Based on that information, the calculations
for Step 2 are as presented in table 3.
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\10\ The CPI is defined as ``All Urban Consumers (CPI-U), All
Items, 1982-4=100.'' Series CUUR0200SA0 (Downloaded February 22,
2024). Available at https://www.bls.gov/cpi/data.htm., All Urban
Consumers (Current Series), multiscreen data, not seasonally
adjusted, 0200 Midwest, Current, All Items, Monthly, 12-month
Percent Change and Annual Data (last accessed 05/31/2024).
\11\ The 2024 and 2025 inflation rates are available at https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf. We used the Core PCE December Projection
found in table 1. (Downloaded March 2024).
[GRAPHIC] [TIFF OMITTED] TP05AU24.096
C. Step 3: Estimate Number of Registered Pilots and Apprentice Pilots
In accordance with the text in Sec. 404.103, the Coast Guard
estimates the number of fully registered Pilots in each district. In
the past, this was done using the staffing model and the process
described in Sec. 404.103. Last year, during the 2023 GLPAC meeting,
there was a unanimous recommendation by the GLPAC that, after 2024, the
Director be given discretion to increase the staffing model plus three
Pilots per District, based on industry demand and to ensure shipping
reliability.\12\ Additionally, the previous staffing model's maximum is
now considered the minimum in regard to the number of Pilots needed in
each district.\13\
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\12\ Transcript, supra note 8, at 89-90.
\13\ Id. at 57-58.
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We determine the number of fully registered Pilots based on data
provided by the SLSPA as well as the previously mentioned
recommendation. We determine the number of Apprentice Pilots based on
input from the district on anticipated retirements and staffing needs.
These numbers can be found in table 4.
[GRAPHIC] [TIFF OMITTED] TP05AU24.097
D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice
Pilot Wage Benchmark
In this step, we determine the total target Pilot compensation for
each area. Because we are issuing an interim ratemaking this year, we
follow the procedure outlined in paragraph (b) of Sec. 404.104, which
adjusts the existing compensation benchmark by inflation. First, we
adjust the 2024 target compensation benchmark of $440,658 by 2.5
percent for a value of $451,674. This accounts for the difference in
actual first quarter 2024 Employment Cost Index (ECI) inflation, which
is 5.1 percent, and the 2024 PCE estimate of 2.6
percent.14 15
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\14\ Employment Cost Index, Total Compensation for Private
Industry workers in Transportation and Material Moving, Annual
Average, Series ID: CIU2010000520000A. https://www.bls.gov/news.release/eci.t05.htm (last accessed 04/30/24).
\15\ 2.6 percent was the latest figure available for the 2024
final rule. Table 1, Summary of Economic Projections, Median Core
PCE Inflation June Projection. https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230920.pdf (last accessed 05/31/
2024).
---------------------------------------------------------------------------
The second step accounts for projected inflation from 2024 to 2025,
which is 2.2 percent.\16\ Based on the projected 2025 inflation
estimate, the proposed target compensation benchmark for 2025 is
$461,611 per pilot. The proposed Apprentice Pilot wage benchmark is 36
percent of the target Pilot compensation, or $166,180 ($461,611 x
0.36).
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\16\ Table 1, Summary of Economic Projections, Median Core PCE
Inflation December Projection. https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf. (Downloaded March
2024).
---------------------------------------------------------------------------
In accordance with Sec. 404.104(c), we use the revised target
individual compensation level to derive the total Pilot compensation by
multiplying the individual target compensation by the estimated number
of Registered Pilots for District One, as shown in table 5. We estimate
that the number of Apprentice Pilots needed will be one for District
One in the 2025 rulemaking. The total target wages for Apprentice
Pilots are allocated with 60 percent for the
[[Page 63341]]
designated area and 40 percent for the undesignated area, in accordance
with the allocation for operating expenses.
[GRAPHIC] [TIFF OMITTED] TP05AU24.098
E. Step 5: Project Working Capital Fund
Next, the Coast Guard calculates the working capital fund revenues
needed for each area. We first add the figures for projected operating
expenses, total target Pilot compensation, and total target Apprentice
Pilot wage for each area. Then we find the preceding year's average
annual rate of return for new issues of high-grade corporate
securities. Using Moody's data, the number is 4.8100 percent,
rounded.\17\ By multiplying the two figures, we obtain the working
capital fund contribution for each area, as shown in table 6.
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\17\ Moody's Seasoned Aaa Corporate Bond Yield, average of 2023
monthly data. The Coast Guard uses the most recent year of complete
data. Moody's is taken from Moody's Investors Service, which is a
bond credit rating business of Moody's Corporation. Bond ratings are
based on creditworthiness and risk. The rating of ``Aaa'' is the
highest bond rating assigned with the lowest credit risk. See
https://fred.stlouisfed.org/series/AAA (last accessed 01/08/2024).
[GRAPHIC] [TIFF OMITTED] TP05AU24.099
[[Page 63342]]
F. Step 6: Project Needed Revenue
In this step, we add the expenses accrued to derive the total
revenue needed for each area. These expenses include the projected
operating expenses (from Step 2), the total target Pilot compensation
(from Step 4), total target Apprentice Pilot wage (from Step 4), and
the working capital fund contribution (from Step 5). We show these
calculations in table 7.
[GRAPHIC] [TIFF OMITTED] TP05AU24.100
G. Step 7: Calculate Initial Base Rates
Having determined the revenue needed for each area in the previous
six steps, we divide that number by the expected number of traffic
hours to develop an hourly rate.
Step 7 is a two-part process. The first part entails calculating
the 10-year traffic average in District One, using the total time on
task or Pilot bridge hours. To calculate the time on task for each
district, the Coast Guard used billing data from SeaPro. The Coast
Guard received revised 2022 bridge hours in the revenue reports
submitted by our third-party auditor and has implemented them into the
rate in this step of the rulemaking.\18\ Because we calculate separate
figures for designated and undesignated waters, there are two parts for
each calculation. We show these values in table 8.
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\18\ See details on the revised figures in Section VII.,
Regulatory Analyses.
[GRAPHIC] [TIFF OMITTED] TP05AU24.101
Next, we derive the initial hourly rate by dividing the revenue
needed by the average number of hours for each area. This produces an
initial rate, which is necessary to produce the revenue needed for each
area, assuming the amount of traffic is as expected. We present the
calculations for District One in table 9.
[[Page 63343]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.102
H. Step 8: Calculate Average Weighting Factors by Area
In this step, the Coast Guard calculates the average weighting
factor for each designated and undesignated area by first collecting
the weighting factors, set forth in 46 CFR 401.400, for each vessel
trip. Using the weight factor report from SeaPro, we calculate the
average weighting factor for each area using the data from each vessel
transit from 2014 onward, as shown in tables 10 and 11.
BILLING CODE 9110-04-P
[GRAPHIC] [TIFF OMITTED] TP05AU24.103
[[Page 63344]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.104
[[Page 63345]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.105
[[Page 63346]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.106
BILLING CODE 9110-04-C
I. Step 9: Calculate Revised Base Rates
In this step, we revise the base rates so that the total cost of
pilotage will be equal to the revenue needed, after considering the
impact of the weighting factors. To do this, we divide the initial base
rates calculated in Step 7 by the average weighting factors calculated
in Step 8, as shown in table 12.
[[Page 63347]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.107
J. Step 10: Review and Finalize Rates
In this step, the Director reviews the base pilotage rates
calculated in Sec. 404.109 of this part to ensure it meets the goal of
ensuring safe, efficient, and reliable pilotage service. To establish
this, the Director considers whether the proposed rates incorporate
appropriate compensation for Pilots to handle heavy traffic periods and
whether there are enough Pilots to handle those heavy traffic periods.
The Director also considers whether the proposed rates would cover
operating expenses and infrastructure costs, including average traffic
and weighting factors. Based on these considerations, the Director is
not proposing any alterations to the rates in this step. We propose to
modify Sec. 401.405(a)(1) and (2) to reflect the final rates shown in
table 13.
[GRAPHIC] [TIFF OMITTED] TP05AU24.108
District Two
A. Step 1: Recognize Previous Operating Expenses
Step 1 in our ratemaking methodology requires that the Coast Guard
review and recognize the previous year's operating expenses (Sec.
404.101). To do so, we begin by reviewing the independent accountant's
financial reports for each association's 2022 expenses and
revenues.\19\ For accounting purposes, the financial reports divide
expenses into designated and undesignated areas. For costs generally
accrued by the pilot associations, such as employee benefits, the cost
is divided between the designated and undesignated areas on a pro rata
basis. Adjustments have been made by the auditors and are explained in
the auditor's reports, which are available in the docket for this
rulemaking, where indicated under Section I., Public Participation and
Request for Comments.
---------------------------------------------------------------------------
\19\ These reports are available in the docket for this proposed
rule.
---------------------------------------------------------------------------
The recognized operating expenses for District Two are shown in
table 14.
BILLING CODE 9110-04-P
[[Page 63348]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.109
[[Page 63349]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.110
BILLING CODE 9110-04-C
B. Step 2: Project Operating Expenses, Adjusting for Inflation or
Deflation
In accordance with the text in Sec. 404.102, having identified the
recognized 2022 operating expenses in Step 1, the next step is to
estimate the current year's operating expenses by adjusting for
inflation over the 3-year
[[Page 63350]]
period. We calculate inflation using the BLS data from the CPI for the
Midwest Region of the United States for the 2023 inflation rate.\20\
Because the BLS does not provide forecasted inflation data, we use
economic projections from the Federal Reserve for the 2024 and 2025
inflation modification.\21\ Based on that information, the calculations
for Step 2 are presented in table 15.
---------------------------------------------------------------------------
\20\ CPI, supra note 10.
\21\ Core PCE December Projection, supra note 11.
[GRAPHIC] [TIFF OMITTED] TP05AU24.111
C. Step 3: Estimate Number of Registered Pilots and Apprentice Pilots
In accordance with the text in Sec. 404.103, the Coast Guard
estimates the number of fully registered Pilots in each district. In
the past, this was done using the staffing model and the process
described in Sec. 404.103. Last year, during the 2023 GLPAC meeting,
there was a unanimous recommendation by the GLPAC that, after 2024, the
Director be given discretion to increase the staffing model plus three
Pilots per District, based on industry demand and to ensure shipping
reliability.\22\ Additionally, the previous staffing model's maximum is
now considered the minimum in regard to the number of Pilots needed in
each district.\23\
---------------------------------------------------------------------------
\22\ Transcript, supra note 8 at 89-90.
\23\ Id. at 57-58.
---------------------------------------------------------------------------
We determine the number of fully registered Pilots based on data
provided by the LPA as well as the previous mentioned recommendation.
We determine the number of Apprentice Pilots based on input from the
district on anticipated retirements and staffing needs. These numbers
can be found in table 16.
[GRAPHIC] [TIFF OMITTED] TP05AU24.112
D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice
Pilot Wage Benchmark
In this step, we determine the total target Pilot compensation for
each area. Because we are issuing an interim ratemaking this year, we
follow the procedure outlined in paragraph (b) of Sec. 404.104, which
adjusts the existing compensation benchmark by inflation. First, we
adjust the 2024 target compensation benchmark of $440,658 by 2.5
percent for a value of $451,674. This accounts for the difference in
actual first quarter 2024 ECI inflation, which is 5.1 percent, and the
2024 PCE estimate of 2.6 percent.24 25 The second step
accounts for projected inflation from 2024 to 2025, which is 2.2
percent.\26\ Based on the projected 2025 inflation estimate, the
proposed target compensation benchmark for 2025 is $461,611 per Pilot.
The proposed Apprentice Pilot wage benchmark is 36 percent of the
target Pilot compensation, or $166,180 ($461,611 x 0.36).
---------------------------------------------------------------------------
\24\ ECI, supra note 14.
\25\ Median Core PCE Inflation June Projection, supra note 15.
\26\ Median Core PCE Inflation December Projection, supra note
16.
---------------------------------------------------------------------------
In accordance with Sec. 404.104(c), we use the revised target
individual compensation level to derive the total Pilot compensation by
multiplying the individual target compensation by the estimated number
of Registered Pilots for District Two, as shown in table 17. The total
target wages for Apprentice Pilots are allocated with 60 percent for
the designated area and 40 percent for the undesignated area, in
accordance with the allocation for operating expenses.
[[Page 63351]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.113
E. Step 5: Project Working Capital Fund
Next, the Coast Guard calculates the working capital fund revenues
needed for each area. We first add the figures for projected operating
expenses, total target Pilot compensation, and total target Apprentice
Pilot wage for each area. Then we find the preceding year's average
annual rate of return for new issues of high-grade corporate
securities. Using Moody's data, the number is 4.8100 percent,
rounded.\27\ By multiplying the two figures, we obtain the working
capital fund contribution for each area, as shown in table 18.
---------------------------------------------------------------------------
\27\ Moody's Seasoned Aaa Corporate Bond Yield, supra note 17.
[GRAPHIC] [TIFF OMITTED] TP05AU24.114
F. Step 6: Project Needed Revenue
In this step, the Coast Guard adds all the expenses accrued to
derive the total revenue needed for each area. These expenses include
the projected operating expenses (from Step 2), the total target Pilot
compensation (from Step 4), total target Apprentice Pilot wage (from
Step 4), and the working capital fund contribution (from Step 5). We
show these calculations in table 19.
[GRAPHIC] [TIFF OMITTED] TP05AU24.115
[[Page 63352]]
G. Step 7: Calculate Initial Base Rates
Having determined the revenue needed for each area in the previous
six steps, we divide that number by the expected number of traffic
hours to develop an hourly rate.
Step 7 is a two-part process. The first part entails calculating
the 10-year traffic average in District Two, using the total time on
task or Pilot bridge hours. To calculate the time on task for each
district, the Coast Guard used billing data from SeaPro. The Coast
Guard received revised 2022 bridge hours in the revenue reports
submitted by our third-party auditor and has implemented them into the
rate in this step of the rulemaking.\28\ Because we calculate separate
figures for designated and undesignated waters, there are two parts for
each calculation. We show these values in table 20.
---------------------------------------------------------------------------
\28\ See details on the revised figures in Section VII.,
Regulatory Analyses.
[GRAPHIC] [TIFF OMITTED] TP05AU24.116
Next, we derive the initial hourly rate by dividing the revenue
needed by the average number of hours for each area. This produces an
initial rate, which is necessary to produce the revenue needed for each
area, assuming the amount of traffic is as expected. We present the
calculations for District Two in table 21.
[GRAPHIC] [TIFF OMITTED] TP05AU24.117
H. Step 8: Calculate Average Weighting Factors by Area
In this step, the Coast Guard calculates the average weighting
factor for each designated and undesignated area by first collecting
the weighting factors, set forth in 46 CFR 401.400, for each vessel
trip. Using the weight factor report from SeaPro, we calculate the
average weighting factor for each area using the data from each vessel
transit from 2014 onward, as shown in tables 22 and 23.
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[[Page 63354]]
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[[Page 63356]]
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BILLING CODE 9110-04-C
I. Step 9: Calculate Revised Base Rates
In this step, we revise the base rates so that the total cost of
pilotage will be equal to the revenue needed, after considering the
impact of the weighting factors. To do this, we divide the initial base
rates calculated in Step 7 by the average weighting factors calculated
in Step 8, as shown in table 24.
[GRAPHIC] [TIFF OMITTED] TP05AU24.122
J. Step 10: Review and Finalize Rates
In this step, the Director reviews the base pilotage rates
calculated in Sec. 404.109 of this part to ensure it meets the goal of
ensuring safe, efficient, and reliable pilotage service. To establish
this, the Director considers whether the proposed rates incorporate
appropriate compensation for Pilots to handle heavy traffic periods and
whether there are enough Pilots to handle those heavy traffic periods.
The Director also considers whether the proposed rates would cover
operating expenses and infrastructure costs, including average traffic
and weighting factors. Based on these considerations, the Director is
not proposing any alterations to the rates in this step. We propose to
modify Sec. 401.405(a)(3) and (4) to reflect the final rates shown in
table 25.
[[Page 63357]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.123
District Three
A. Step 1: Recognize Previous Operating Expenses
Step 1 in our ratemaking methodology requires that the Coast Guard
review and recognize the previous year's operating expenses (Sec.
404.101). To do so, we review the independent accountant's financial
reports for each association's 2022 expenses and revenues.\29\ For
accounting purposes, the financial reports divide expenses into
designated and undesignated areas. For costs generally accrued by the
pilot associations, such as employee benefits, the cost is divided
between the designated and undesignated areas on a pro rata basis.
Adjustments have been made by the auditors and are explained in the
auditor's reports, which are available in the docket for this
rulemaking, where indicated under Section I., Public Participation and
Request for Comments.
---------------------------------------------------------------------------
\29\ These reports are available in the docket for this proposed
rule.
---------------------------------------------------------------------------
The recognized operating expenses for District Three are shown in
table 26.
BILLING CODE 9110-04-P
[[Page 63358]]
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[[Page 63359]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.125
BILLING CODE 9110-04-C
B. Step 2: Project Operating Expenses, Adjusting for Inflation or
Deflation
In accordance with the text in Sec. 404.102, having identified the
recognized 2022 operating expenses in Step 1, the next step is to
estimate the current year's operating expenses by adjusting those
expenses for inflation
[[Page 63360]]
over the 3-year period. We calculate inflation using the BLS data from
the CPI for the Midwest Region of the United States for the 2023
inflation rate.\30\ Because the BLS does not provide forecasted
inflation data, we use economic projections from the Federal Reserve
for the 2024 and 2025 inflation modification.\31\ Based on that
information, the calculations for Step 2 are as presented in table 27.
---------------------------------------------------------------------------
\30\ CPI, supra note 10.
\31\ Core PCE, supra note 11.
[GRAPHIC] [TIFF OMITTED] TP05AU24.126
C. Step 3: Estimate Number of Registered Pilots and Apprentice Pilots
In accordance with the text in Sec. 404.103, the Coast Guard
estimates the number of fully registered Pilots in each district. In
the past, this was done using the staffing model and the process
described in Sec. 404.103. Last year, during the 2023 GLPAC meeting,
there was a unanimous recommendation by the GLPAC that, after 2024, the
Director be given discretion to increase the staffing model plus three
Pilots per District, based on industry demand and to ensure shipping
reliability.\32\ Additionally, the previous staffing model's maximum
are now considered the minimum regarding the number of Pilots needed in
each district.\33\
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\32\ Transcript, supra note 8, at 89-90.
\33\ Id. at 57-58.
---------------------------------------------------------------------------
We determine the number of fully registered Pilots based on data
provided by the WGLPA, as well as the previous mentioned
recommendation. We determine the number of Apprentice Pilots based on
input from the district on anticipated retirements and staffing needs.
These numbers can be found in table 28.
[GRAPHIC] [TIFF OMITTED] TP05AU24.127
D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice
Pilot Wage Benchmark
In this step, we determine the total target Pilot compensation for
each area. Because we are issuing an interim ratemaking this year, we
follow the procedure outlined in paragraph (b) of Sec. 404.104, which
adjusts the existing compensation benchmark by inflation. First, we
adjust the 2024 target compensation benchmark of $440,658 by 2.5
percent for a value of $451,674. This accounts for the difference in
actual first quarter 2024 ECI inflation, which is 5.1 percent, and the
2024 PCE estimate of 2.6 percent.34 35 The second step
accounts for projected inflation from 2024 to 2025, which is 2.2
percent.\36\ Based on the projected 2025 inflation estimate, the
proposed target compensation benchmark for 2025 is $461,611 per pilot.
The proposed apprentice pilot wage benchmark is 36 percent of the
target Pilot compensation, or $166,180 ($461,611 x 0.36).
---------------------------------------------------------------------------
\34\ ECI, supra note 14.>
\35\ Median Core PCE Inflation June Projection, supra note 15.
\36\ Median Core PCE Inflation December Projection, supra note
16.
---------------------------------------------------------------------------
In accordance with Sec. 404.104(c), we use the revised target
individual compensation level to derive the total target Pilot
compensation by multiplying the individual target compensation by the
estimated number of Registered Pilots for District Three, as shown in
table 29. We estimate that the number of Apprentice Pilots needed for
District Three in the 2024 season will be one. The total target wages
for Apprentice Pilots are allocated with 21 percent for the designated
area, and 79 percent for the undesignated areas, in accordance with the
allocation for operating expenses.
[[Page 63361]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.128
E. Step 5: Project Working Capital Fund
Next, the Coast Guard calculates the working capital fund revenues
needed for each area. We first add the figures for projected operating
expenses, total target Pilot compensation, and total target Apprentice
Pilot wage for each area, and then we find the preceding year's average
annual rate of return for new issues of high-grade corporate
securities. Using Moody's data, the number is 4.8100 percent,
rounded.\37\ By multiplying the two figures, we obtain the working
capital fund contribution for each area, as shown in table 30.
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\37\ Moody's Seasoned Aaa Corporate Bond Yield, supra note 17.
[GRAPHIC] [TIFF OMITTED] TP05AU24.129
F. Step 6: Project Needed Revenue
In this step, the Coast Guard adds all the expenses accrued to
derive the total revenue needed for each area. These expenses include
the projected operating expenses (from Step 2), the total target Pilot
compensation (from Step 4), and the working capital fund contribution
(from Step 5). The calculations are shown in table 31.
[GRAPHIC] [TIFF OMITTED] TP05AU24.130
[[Page 63362]]
G. Step 7: Calculate Initial Base Rates
Having determined the revenue needed for each area in the previous
six steps, we divide that number by the expected number of traffic
hours to develop an hourly rate.
Step 7 is a two-part process. The first part is calculating the 10-
year traffic average in District Three using the total time on task or
Pilot bridge hours. To calculate the time on task for each district,
the Coast Guard used billing data from SeaPro. The Coast Guard received
revised 2022 bridge hours in the revenue reports submitted by our
third-party auditor and has implemented them into the rate in this step
of the rulemaking.\38\ Because we calculate separate figures for
designated and undesignated waters, there are two parts for each
calculation. We show these values in table 32.
---------------------------------------------------------------------------
\38\ See details on the revised figures in Section VII.,
Regulatory Analyses.
[GRAPHIC] [TIFF OMITTED] TP05AU24.131
Next, we derive the initial hourly rate by dividing the revenue
needed by the average number of hours for each area. This produces an
initial rate, which is necessary to produce the revenue needed for each
area, assuming the amount of traffic is as expected. We present the
calculations for District Three in table 33.
[GRAPHIC] [TIFF OMITTED] TP05AU24.132
H. Step 8: Calculate Average Weighting Factors by Area
In this step, the Coast Guard calculates the average weighting
factor for each designated and undesignated area by first collecting
the weighting factors, set forth in 46 CFR 401.400, for each vessel
trip. Using the weight factor report from SeaPro, we calculate the
average weighting factor for each area using the data from each vessel
transit from 2014 onward, as shown in tables 34 and 35. Transits are
listed in both the bridge hour report and the weight factor report. For
this step, the Coast Guard uses the transits from the weight factor
report.
BILLING CODE 9110-04-P
[[Page 63363]]
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[[Page 63364]]
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[[Page 63365]]
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[[Page 63366]]
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I. Step 9: Calculate Revised Base Rates
In this step, we revise the base rates so that the total cost of
pilotage will be equal to the revenue needed, after considering the
impact of the weighting factors. To do this, we divide the initial base
rates calculated in Step 7 by the average weighting factors calculated
in Step 8, as shown in table 36.
[[Page 63367]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.137
[GRAPHIC] [TIFF OMITTED] TP05AU24.138
J. Step 10: Review and Finalize Rates
In this step, the Director reviews the base pilotage rates
calculated in Sec. 404.109 of this part to ensure it meets the goal of
ensuring safe, efficient, and reliable pilotage service. To establish
this, the Director considers whether the proposed rates incorporate
appropriate compensation for Pilots to handle heavy traffic periods and
whether there are enough Pilots to handle those heavy traffic periods.
The Director also considers whether the proposed rates would cover
operating expenses and infrastructure costs, including average traffic
and weighting factors. Based on these considerations, the Director is
not proposing any alterations to the rates in this step. We propose to
modify Sec. 401.405(a)(5) and (6) to reflect the proposed rates shown
in table 37.
[[Page 63368]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.139
VII. Regulatory Analyses
We developed this proposed rule after considering numerous statutes
and Executive orders related to rulemaking. A summary of our analyses
based on these statutes or Executive orders follows.
A. Regulatory Planning and Review
Executive Orders 12866 (Regulatory Planning and Review), as amended
by Executive Order 14094 (Modernizing Regulatory Review), and 13563
(Improving Regulation and Regulatory Review) direct agencies to assess
the costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Management and Budget (OMB) has not designated this
rule a significant regulatory action under section 3(f) of Executive
Order 12866, as amended by Executive Order 14094. Accordingly, OMB has
not reviewed this regulatory action. The purpose of this proposed rule
is to establish new pilotage rates, as 46 U.S.C. 9303(f) requires that
rates be established or reviewed and adjusted each year. The statute
also requires that base rates be established by a full ratemaking at
least once every 5 years, and, in years when base rates are not
established, they must be reviewed and, if necessary, adjusted. The
Coast Guard concluded the last full ratemaking in February of 2023.\39\
For this NPRM, the Coast Guard estimates an increase in cost of
approximately $2.64 million to industry. This is approximately a 7-
percent increase because of the change in revenue needed in 2025
compared to the revenue needed in 2024. See table 38.
---------------------------------------------------------------------------
\39\ Great Lakes Pilotage Rates--2023 Annual Ratemaking and
Review of Methodology (88 FR 12226), published February 27, 2023.
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[[Page 63369]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.140
In the Great Lakes Pilotage Rates--2024 Annual Review (``2024 final
rule'') (89 FR 9038), the Coast Guard used monthly reports for the 2022
bridge hours in Step 7 as provided by the pilot associations. Since
that final rule, the Coast Guard received revised estimates of the 2022
bridge hours in the revenue reports submitted by Cohn Reznik.
Similarly, the pilot associations were also able to provide updated
2022 monthly reports in April 2024. For this proposed rule, the Coast
Guard revises the bridge hours for 2022 in Step 7, using the latest
available information. This revision ensures that all figures are
comparable, since the initial monthly reports and weight factor reports
received for the 2024 final rule showed different totals for bridge
hours.
Table 39 shows the difference between the 2022 bridge hour figures
as published in the 2024 final rule, and the revised figures as of this
proposed rule.
[GRAPHIC] [TIFF OMITTED] TP05AU24.141
Similarly, the Coast Guard received updated 2022 weight factor
reports in April 2024. The Coast Guard uses the latest available
information to revise the number of transits by vessel class in Step 8,
``Calculate average weighting factors by Area''. Table 40 shows the
difference between the 2022 transit figures as published in the 2024
final rule, and the revised figures as of this proposed rule.
BILLING CODE 9110-04-P
[[Page 63370]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.142
BILLING CODE 9110-04-C
The Coast Guard is required to review and adjust pilotage rates on
the Great Lakes annually. See Section III., Basis and Purpose, of this
preamble for detailed discussions of the legal basis and purpose for
this rulemaking. Based on our annual review for this rulemaking, we are
adjusting the pilotage rates in 2025 to generate sufficient revenues
for each district to reimburse its necessary and reasonable operating
expenses, to fairly compensate properly trained and rested Pilots, and
to provide an appropriate working capital fund to use for improvements.
The result would be an increase in rates for both areas in District
One, the designated area for District Two, and the undesignated area in
District Three. The result would be a decrease in rates for the
undesignated area for District Two and the designated area for District
Three. These changes would also lead to a net increase in the cost of
service to shippers. The change in per-unit cost to each individual
shipper would depend on their area of operation.
A detailed discussion of our economic impact analysis follows.
Affected Population
This proposed rule affects United States Great Lakes Pilots and
Apprentice Pilots, the 3 pilot associations, and the owners and
operators of 280 oceangoing vessels that transit the Great Lakes
annually on average from 2021 to 2023. The Coast Guard estimates that
there will be 61 Registered Pilots and 3 Apprentice Pilots during 2025.
The shippers affected by these rate changes
[[Page 63371]]
are those owners and operators of domestic vessels operating ``on
register'' (engaged in foreign trade) and the owners and operators of
non-Canadian foreign vessels on routes 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 statute applies only to commercial
vessels, not to recreational vessels. United States-flagged vessels not
operating on register, and Canadian ``lakers,'' which account for most
commercial shipping on the Great Lakes, are not required by 46 U.S.C.
9302 to have pilots. However, these United States- and Canadian-flagged
lakers may voluntarily choose to engage a Great Lakes Registered Pilot.
Vessels that are U.S.-flagged may opt to have a Pilot for varying
reasons, such as unfamiliarity with designated waters and ports, or for
insurance purposes.
The Coast Guard used billing information from the years 2021
through 2023 from SeaPro to estimate the average annual number of
vessels affected by the rate adjustment. SeaPro tracks data related to
managing and coordinating the dispatch of Pilots on the Great Lakes,
and billing in accordance with the services. As described in Step 7 of
the ratemaking methodology, we use a 10-year average to estimate the
traffic. We used 3 years of the most recent billing data to estimate
the affected population. We believe that using 3 years of billing data
is a better representation of the vessel population currently using
pilotage services and impacted by this proposed rule.
We found that 484 unique vessels used pilotage services during the
years 2021 through 2023. That is, these vessels had a Pilot dispatched
to the vessel, and billing information was recorded in SeaPro. Of these
vessels, 451 were foreign-flagged vessels and 33 were U.S.-flagged
vessels. As stated previously, U.S.-flagged vessels not operating on
register are not required to have a Registered Pilot, per 46 U.S.C.
9302, but can voluntarily choose to have one.
Numerous factors affect vessel traffic, which varies from year to
year. Therefore, rather than using the total number of vessels over the
time period, the Coast Guard took an average of the unique vessels
using pilotage services from the years 2021 through 2023 as the best
representation of vessels estimated to be affected by the rates in this
proposed rule. From 2021 through 2023, an average of 280 vessels used
pilotage services annually.\40\ On average, 268 of these vessels were
foreign-flagged, and 13 were U.S.-flagged vessels that voluntarily
opted into the pilotage service (these figures are rounded averages).
---------------------------------------------------------------------------
\40\ Some vessels entered the Great Lakes multiple times in a
single year, affecting the average number of unique vessels using
pilotage services in any given year.
---------------------------------------------------------------------------
Total Cost to Shippers
The rate changes resulting from this adjustment to the rates would
result in a net increase in the cost of service to shippers. However,
the change in per-unit cost to each individual shipper would be
dependent on their area of operation.
The Coast Guard estimates the effect of the rate changes on
shippers by comparing the total projected revenues needed to cover
costs in 2024 with the total projected revenues to cover costs in 2025.
We set pilotage rates so that pilot associations receive enough revenue
to cover their necessary and reasonable expenses. Shippers pay these
rates when they engage a Pilot, as required by 46 U.S.C. 9302.
Therefore, the aggregate payments of shippers to pilot associations are
equal to the projected necessary revenues for pilot associations. The
revenues each year represent the total costs that shippers must pay for
pilotage services. The change in revenue from the previous year is the
additional cost to shippers discussed in this proposed rule.
The impacts of the rate changes on shippers are estimated from the
district pilotage projected revenues (shown in tables 7, 19, and 31 of
this preamble). The Coast Guard estimates that, for 2025, the projected
revenue needed for all three districts is $42,920,634.
To estimate the change in cost to shippers from this proposed rule,
the Coast Guard compared the 2025 total projected revenues to the 2024
projected revenues. Because we review and prescribe rates for Great
Lakes pilotage annually, the effects are estimated as a single-year
cost rather than annualized over a 10-year period. In the 2024 final
rule, we estimated the total projected revenue needed for 2024 as
$40,280,666.\41\ This is the best approximation of 2024 revenues, as,
at the time of publication of this proposed rule, the Coast Guard does
not have enough audited data available for 2024 to revise these
projections. Table 41 shows the revenue projections for 2024 and 2025
and details the additional cost increases to shippers by area and
district as a result of the rate changes on traffic in Districts One,
Two, and Three.
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\41\ 2024 Final Rule, 89 FR at 9066 (Table 43).
[GRAPHIC] [TIFF OMITTED] TP05AU24.143
[[Page 63372]]
The resulting difference between the projected revenue in 2024 and
the projected revenue in 2025 is the annual change in payments from
shippers to pilots as a result of the rate changes proposed by this
NPRM. The effect of the rate changes to shippers would vary by area and
district. After considering the change in pilotage rates, the proposed
rate changes would lead to affected shippers operating in District One
experiencing an increase in payments of $936,031 over the previous
year. Affected shippers operating in District Two and District Three
would experience an increase in payments of $986,893 and $717,044,
respectively, when compared with 2024. The overall adjustment in
payments would increase payments by shippers of $2,639,968 across all
three districts (a 7-percent increase when compared with 2024). Again,
because the Coast Guard reviews and sets rates for Great Lakes pilotage
annually, we estimate the impacts as single-year costs, rather than
annualizing them over a 10-year period.
Table 42 shows the difference in revenue by revenue-component from
2024 to 2025 and presents each revenue-component as a percentage of the
total revenue needed. In both 2024 and 2025, the largest revenue-
component was target pilotage compensation (63 percent of total revenue
needed in 2024, and 66 percent of total revenue needed in 2025),
followed by operating expenses (30 percent of total revenue needed in
2024, and 29 percent of total revenue needed in 2025). The large
increase in the working capital fund, 25 percent from 2024 to 2025, is
driven by an increase in the Target Rate of Return on Investment, from
4.0742 percent in 2022 to 4.8100 percent in 2023.\42\
---------------------------------------------------------------------------
\42\ Moody's Seasoned Aaa Corporate Bond Yield, supra note 17.
---------------------------------------------------------------------------
BILLING CODE 9110-04-P
[[Page 63373]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.144
BILLING CODE 9110-04-C
As stated above, we estimate that there would be a total increase
in revenue of $2,639,968 needed by the pilot associations. This
represents an increase in revenue needed for target Pilot compensation
of $2,600,107, a
[[Page 63374]]
decrease in revenue needed for the total Apprentice Pilot wage
benchmark of ($453,282), an increase in the revenue needed for adjusted
operating expenses of $100,275, and an increase in the revenue needed
for the working capital fund of $392,868.
The change in revenue needed for Pilot compensation, $2,600,107, is
due to three factors: (1) The changes to adjust 2024 pilotage
compensation to account for the difference between actual ECI inflation
\43\ (5.1 percent) and predicted PCE inflation \44\ (2.6 percent) for
2024; (2) projected inflation of pilotage compensation in Step 2 of the
methodology, using predicted inflation through 2025; \45\ and (3) an
increase of three authorized Pilots.
---------------------------------------------------------------------------
\43\ ECI, supra note 14.
\44\ Median Core PCE Inflation June Projection, supra note 15.
\45\ Median Core PCE Inflation December Projection, supra note
16.
---------------------------------------------------------------------------
The target compensation is $461,611 per Pilot in 2025, compared to
$440,658 in 2024. The proposed changes to modify the 2024 Pilot
compensation to account for the difference between predicted and actual
inflation would increase the 2024 target compensation value by 2.5
percent. As shown in table 43, this inflation adjustment increases
total compensation by $11,016 per Pilot, and the total revenue needed
by $672,003, when accounting for all 61 Pilots.
[GRAPHIC] [TIFF OMITTED] TP05AU24.145
Similarly, table 44 shows the impact of the difference between
predicted and actual inflation on the target Apprentice Pilot
compensation benchmark. The inflation adjustment increases the
compensation benchmark by $3,966 per Apprentice Pilot, and the total
revenue needed by $11,898 when accounting for all three Apprentice
Pilots.
[GRAPHIC] [TIFF OMITTED] TP05AU24.146
[[Page 63375]]
The Coast Guard predicts that 61 Pilots would be needed for the
2025 season. This is an increase of three Pilots from the 2024 season.
Table 45 shows the increase of $1,351,784 in revenue needed for Pilot
compensation. To avoid double counting, this value excludes the change
in revenue resulting from the change to adjust 2024 Pilot compensation
to account for the difference between actual and predicted inflation.
[GRAPHIC] [TIFF OMITTED] TP05AU24.147
Similarly, the Coast Guard predicts that three Apprentice Pilots
would be needed for the 2025 season. This would be a decrease of three
Apprentice Pilots from the 2024 season. Table 46 shows the decrease of
($486,642) in revenue needed solely for Apprentice Pilot compensation.
As noted previously, to avoid double counting, this value excludes the
change in revenue resulting from the change to adjust 2024 Apprentice
Pilot compensation to account for the difference between actual and
predicted inflation.
[[Page 63376]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.148
Another increase, $606,130, would be the result of increasing
compensation for the 61 Pilots, to account for future inflation of 2.2
percent in 2025. This would increase total compensation by $9,937 per
Pilot, as shown in table 47.
[GRAPHIC] [TIFF OMITTED] TP05AU24.149
Similarly, an increase of $10,732 would be the result of increasing
compensation for the three Apprentice Pilots, to account for future
inflation of 2.2 percent in 2025. This would increase total
compensation by $3,577 per Apprentice Pilot, as shown in table 48.
[[Page 63377]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.150
Table 49 presents the percentage change in revenue by area and
revenue-component, excluding surcharges, as they are applied at the
district level.\46\
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\46\ The 2024 projected revenues are from the Great Lakes
Pilotage Rate--2024 Annual Review and Revisions to Methodology final
rule (89 FR 9038), tables 11, 23, and 35. The 2025 projected
revenues are from tables 7, 19, and 31 of this proposed rule.
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BILLING CODE 9110-04-P
[[Page 63378]]
[GRAPHIC] [TIFF OMITTED] TP05AU24.151
BILLING CODE 9110-04-C
Benefits
This proposed rule allows the Coast Guard to meet the requirements
in 46 U.S.C. 9303 to review the rates for pilotage services on the
Great Lakes. The rate changes promote safe, efficient, and reliable
pilotage service on the Great Lakes by (1) ensuring that rates
[[Page 63379]]
cover an association's operating expenses; (2) providing fair Pilot
compensation, adequate training, and sufficient rest periods for
Pilots; and (3) ensuring that pilot associations produce enough revenue
to fund future improvements. The rate changes also help recruit and
retain Pilots, which ensures enough Pilots to meet peak shipping
demand, helping to reduce delays caused by Pilot shortages.
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.
For this proposed rule, the Coast Guard reviewed recent company
size and ownership data for the vessels identified in SeaPro, and we
reviewed business revenue and size data provided by publicly available
sources such as ReferenceUSA.\47\ As described in Section VII.,
Regulatory Analyses, of this preamble, we found that 484 unique vessels
used pilotage services during the years 2021 through 2023. These
vessels are owned by 63 entities, of which 49 are foreign entities that
operate primarily outside the United States, and the remaining 14
entities are U.S. entities. We compared the revenue and employee data
found in the company search to the Small Business Administration's
(SBA) small business threshold, as defined in the SBA's ``Table of Size
Standards'' for small businesses, to determine how many of these
companies are considered small entities.\48\ Table 50 shows the North
American Industry Classification System (NAICS) codes of the U.S.
entities and the small entity standard size established by the SBA.
---------------------------------------------------------------------------
\47\ See Resources for Reference Solutions Users, ReferenceUSA,
https://resource.referenceusa.com/ (last accessed 04/22/2024).
\48\ See Table of Size Standards, https://www.sba.gov/document/support--table-size-standards (Last visited 5/01/24). SBA has
established a ``Table of Size Standards'' for small businesses that
sets small business size standards by NAICS code. A size standard,
which is usually stated in number of employees or average annual
receipts (``revenues''), represents the largest size that a business
(including its subsidiaries and affiliates) may be in order to
remain classified as a small business for SBA and Federal
contracting programs.
[GRAPHIC] [TIFF OMITTED] TP05AU24.152
Of the 14 U.S. entities, four exceed the SBA's small business
standards for small entities. To estimate the potential impact on the
remaining 10 small entities, the Coast Guard used their 2023 invoice
data to estimate their pilotage costs in 2025. We increased their 2023
costs to account for the changes in pilotage rates resulting from this
proposed rule and the 2024 final rule. We estimated the change in cost
to these entities resulting from this proposed rule by subtracting
their estimated 2024 pilotage costs from their estimated 2025 pilotage
costs and found the average costs to small firms would be approximately
$12,510, with a range of $1,294 to $39,146. We then compared the
estimated change in pilotage costs between 2024 and 2025 with each
firm's annual revenue. In all but one case, the impact of the change in
estimated pilotage expenses would be below 1 percent of revenues. For
one entity, the impact would be 6.33 percent of revenues.
In addition to the owners and operators discussed previously, three
U.S. entities that receive revenue from pilotage services would be
affected by this proposed rule. These are the three pilot associations
that provide and manage pilotage services within the Great Lakes
districts. District One, ``St. Lawrence Seaway Pilots Association''
uses the NAICS code ``Inland Water Freight Transportation'' with a
small-entity size standard of 1,050 employees. District Two, ``Lakes
Pilots Association'' uses the NAICS code, ``Business Associations''
with a small-entity size standard of $15,500,000 in revenue. District
Three, ``Western Great Lakes Pilots Association'' did not have a
registered NAICS code through ReferenceUSA. All three associations are
considered small entities.
Finally, the Coast Guard did not find any small not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields that would be impacted by this proposed rule.
We also did not find any small governmental jurisdictions with
populations of fewer than 50,000 people that would be impacted by this
proposed rule. Based on this analysis, we conclude this proposed rule
would not have a significant economic impact on a substantial number of
small entities.
Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that
this proposed
[[Page 63380]]
rule would not have a significant economic impact on a substantial
number of small entities. If you think that your business,
organization, or governmental jurisdiction qualifies as a small entity
and that this proposed rule would have a significant economic impact on
it, please submit a comment to the docket at the address listed in the
Public Participation and Request for Comments section of this preamble.
In your comment, explain why you think it qualifies and how and to what
degree this proposed rule would economically affect it.
The Coast Guard is unable to offer any meaningful alternatives to
this proposed rule. Under 46 U.S.C. 9303, the Coast Guard is required
to prescribe these rates via regulation and therefore cannot identify
any significant alternatives which ``accomplish the stated objectives
of the applicable statutes'' (5 U.S.C. 603(c)).
C. Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104-121, we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on 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 or email the person
in the FOR FURTHER INFORMATION CONTACT section of this proposed rule.
The Coast Guard will not retaliate against small entities that question
or complain about this proposed 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).
D. Collection of Information
This proposed rule would call for no new collection of information
under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
E. Federalism
A rule has implications for federalism under Executive Order 13132
(Federalism) if it has a substantial direct effect on States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this proposed rule under Executive Order
13132 and have determined that it is consistent with the fundamental
federalism principles and preemption requirements described in
Executive Order 13132. Our analysis follows.
Congress directed the Coast Guard to establish ``rates and charges
for pilotage services.'' 46 U.S.C. 9303(f). This proposed regulation is
issued pursuant to that statute and is preemptive of State law as
specified in 46 U.S.C. 9306. Under 46 U.S.C. 9306, a ``State or
political subdivision of a State may not regulate or impose any
requirement on pilotage on the Great Lakes.'' As a result, States or
local governments are expressly prohibited from regulating within this
category. Therefore, this proposed rule is consistent with the
fundamental federalism principles and preemption requirements described
in Executive Order 13132.
While it is well settled that States may not regulate in categories
in which Congress intended the Coast Guard to be the sole source of a
vessel's obligations, the Coast Guard recognizes the key role that
State and local governments may have in making regulatory
determinations. Additionally, for rules with federalism implications
and preemptive effect, Executive Order 13132 specifically directs
agencies to consult with State and local governments during the
rulemaking process. If you believe this proposed rule would have
implications for federalism under Executive Order 13132, please call or
email the person listed in the FOR FURTHER INFORMATION CONTACT section
of this preamble.
F. Unfunded Mandates
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 million (adjusted for
inflation) or more in any one year. Although this proposed rule would
not result in such an expenditure, we do discuss the potential effects
of this proposed rule elsewhere in this preamble.
G. Taking of Private Property
This proposed rule would not cause 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 proposed rule is not an economically significant rule and
would not create an environmental risk to health or risk to safety that
might disproportionately affect children.
J. Indian Tribal Governments
This proposed rule does not have tribal implications under
Executive Order 13175 (Consultation and Coordination with Indian Tribal
Governments), because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.
K. Energy Effects
We have analyzed this 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.
L. Technical Standards
The National Technology Transfer and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies to use voluntary consensus
standards in their regulatory activities unless the agency provides
Congress, through OMB, 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
[[Page 63381]]
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, Rev. 1, associated implementing
instructions, and Environmental Planning COMDTINST 5090.1 (series),
which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made
a preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. A preliminary Record of Environmental
Consideration supporting this determination is available in the docket.
For instructions on locating the docket, see the Public Participation
and Request for Comments section of this preamble. This proposed rule
would be categorically excluded under paragraphs A3 and L54 of Appendix
A, Table 1 of the Department of Homeland Security (DHS) Instruction
Manual 023-01-001-01, Rev. 1. Paragraph A3 pertains to the promulgation
of rules of the following nature: (a) those of a strictly
administrative or procedural nature; (b) those that implement, without
substantive change, statutory or regulatory requirements; (c) those
that implement, without substantive change, procedures, manuals, and
other guidance documents; (d) those that interpret or amend an existing
regulation without changing its environmental effect; (e) those that
provide technical guidance on safety and security matters; and (f)
those that provide guidance for the preparation of security plans.
Paragraph L54 pertains to regulations which are editorial or
procedural.
This proposed rule involves adjusting the pilotage rates for 2025
to account for changes in district operating expenses, changes in the
number of pilots, and anticipated inflation. All changes are consistent
with the Coast Guard's maritime safety missions. 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
0
1. The authority citation for part 401 is revised to read as follows:
Authority: 46 U.S.C. 2103, 2104(a), 6101, 7701, 8105, 9303,
9304; DHS Delegation No. 00170.1, Revision No. 01.4, paragraphs
(II)(92)(a), (d), (e), (f).
0
2. Amend Sec. 401.405 by revising paragraphs (a)(1) through (6) to
read as follows:
Sec. 401.405 Pilotage rates and charges.
(a) * * *
(1) The St. Lawrence River is $981;
(2) Lake Ontario is $640;
(3) Lake Erie is $573;
(4) The navigable waters from Southeast Shoal to Port Huron, MI is
$748;
(5) Lakes Huron, Michigan, and Superior is $438; and
(6) The St. Marys River is $821.
* * * * *
Dated: July 29, 2024.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Prevention
Policy.
[FR Doc. 2024-17028 Filed 8-2-24; 8:45 am]
BILLING CODE 9110-04-P
