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Proposed Rule2024-17028

Great Lakes Pilotage Rates-2025 Annual Review

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Published

August 5, 2024

Issuing agencies

Homeland Security DepartmentCoast Guard

Abstract

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.

Full Text

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<title>Federal Register, Volume 89 Issue 150 (Monday, August 5, 2024)</title>
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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-17028]

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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.

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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
<a href="http://www.regulations.gov">www.regulations.gov</a>. 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 <a href="/cdn-cgi/l/email-protection#70320219111e5e221f1715020330050313175e1d191c"><span class="__cf_email__" data-cfemail="7436061d151a5a261b1311060734010717135a191d18">[email&#160;protected]</span></a>.

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 <a href="http://www.regulations.gov">www.regulations.gov</a>. To do so, go
to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, 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 <a href="http://www.regulations.gov">www.regulations.gov</a>, 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 <a href="http://www.regulations.gov">www.regulations.gov</a> ``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 <a href="http://www.regulations.gov">www.regulations.gov</a> 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).
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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.
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\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
(<a href="https://www.archives.gov/federal-register/codification/proclamations/03385.html">https://www.archives.gov/federal-register/codification/proclamations/03385.html</a>) (last accessed 5/01/24).
\6\ 46 U.S.C. 9302(a)(1)(B).
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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.
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\8\ Transcript of United States Coast Guard Great Lakes Pilotage
Advisory Committee Meeting at 97 (Sept. 7, 2023), <a href="https://www.regulations.gov/document/USCG-2023-0438-0009">https://www.regulations.gov/document/USCG-2023-0438-0009</a> (last accessed 05/
31/2024) (last accessed 05/31/2024).
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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 <a href="https://www.bls.gov/cpi/data.htm">https://www.bls.gov/cpi/data.htm</a>., 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 <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf">https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf</a>. 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

\14\ Employment Cost Index, Total Compensation for Private
Industry workers in Transportation and Material Moving, Annual
Average, Series ID: CIU2010000520000A. <a href="https://www.bls.gov/news.release/eci.t05.htm">https://www.bls.gov/news.release/eci.t05.htm</a> (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. <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230920.pdf">https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230920.pdf</a> (last accessed 05/31/
2024).
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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. <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf">https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240320.pdf</a>. (Downloaded March
2024).
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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.
---------------------------------------------------------------------------

\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
<a href="https://fred.stlouisfed.org/series/AAA">https://fred.stlouisfed.org/series/AAA</a> (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.
---------------------------------------------------------------------------

\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

[[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.<SUP>24 25</SUP> 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

[[Page 63353]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.118

[[Page 63354]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.119

[[Page 63355]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.120

[[Page 63356]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.121

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]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.124

[[Page 63359]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.125

[[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\
---------------------------------------------------------------------------

\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.<SUP>34 35</SUP> 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.
---------------------------------------------------------------------------

\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

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]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.133

[[Page 63364]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.134

[[Page 63365]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.135

[[Page 63366]]

[GRAPHIC] [TIFF OMITTED] TP05AU24.136

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.

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

[[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.
---------------------------------------------------------------------------

\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\
---------------------------------------------------------------------------

\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.
---------------------------------------------------------------------------

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,
<a href="https://resource.referenceusa.com/">https://resource.referenceusa.com/</a> (last accessed 04/22/2024).
\48\ See Table of Size Standards, <a href="https://www.sba.gov/document/support--table-size-standards">https://www.sba.gov/document/support--table-size-standards</a> (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

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