Pilot subsistence/travel....................         149,993          62,519          78,680         291,192
    Hotel/Lodging Cost..........................         136,769          57,007          71,744         265,520
    Hotel/Lodging Cost (D3-21-03)...............        (18,162)         (7,570)         (9,527)        (35,260)
    Travel......................................          55,936          23,315          29,342         108,592
    License Insurance--Pilots...................             881             367             462           1,710
    Payroll taxes...............................  ..............  ..............  ..............  ..............
    Payroll Tax (D3-21-04)......................         155,779          64,931          81,715         302,425
    License Insurance...........................          15,328           6,389           8,040          29,757
                                                 ---------------------------------------------------------------
        Total Other Pilotage Costs..............         496,524         206,958         260,456         963,938
----------------------------------------------------------------------------------------------------------------
Pilot Boat and Dispatch costs:
    Pilot boat costs............................         445,549         185,710         233,716         864,975

    Pilot Boat Coast (D2-21-02).................        (10,901)         (4,544)         (5,718)        (21,163)
    Dispatch costs..............................          38,156          15,904          20,015          74,074
    Employee Benefits...........................           1,748             729             917           3,394
    Insurance...................................          20,141           8,395          10,565          39,101
    Insurance (D3-21-05, D3-21-09)..............           1,735             723             910           3,369
    Salaries....................................         140,294          58,476          73,592         272,363
    Payroll taxes...............................             123              51              64             238
                                                 ---------------------------------------------------------------
        Total Pilot boat and dispatch costs.....         636,845         265,444         334,061       1,236,350
----------------------------------------------------------------------------------------------------------------
Administrative Cost
    Legal--general counsel......................           9,560           3,985           5,015          18,560
    Legal--shared counsel (K&L Gates)...........           6,227           2,595           3,266          12,088
    Legal--shared counsel (K&L Gates) (D3-21-07)         (1,307)           (545)           (686)         (2,538)
    Travel......................................          58,104          24,219          30,479         112,802
    Travel (D3-21-03)...........................        (14,093)         (5,874)         (7,393)        (27,360)
    Insurance...................................          29,480          12,288          15,464          57,232
    Insurance (D3-21-05, D3-21-09)..............         (5,112)         (2,131)         (2,681)         (9,924)
    Employee benefits...........................         126,390          52,681          66,299         245,369
    Payroll Tax.................................          54,544          22,735          28,611         105,890
    Other taxes.................................          25,489          10,624          13,370          49,483
    Other taxes (D3-21-02)......................        (25,006)        (10,423)        (13,117)        (48,545)
    Real Estate Taxes...........................           1,396             582             732           2,710
    Depreciation/Auto leasing/Other.............         112,215          46,772          58,863         217,850
    Depreciation/Auto leasing/Other (D3-21-02)..         (4,465)         (1,861)         (2,342)         (8,668)
    Interest....................................           3,432           1,431           1,800           6,663
    APA Dues....................................          25,946          10,814          13,610          50,370
    APA Dues (D3-21-08).........................         (1,297)           (541)           (680)         (2,519)
    Dues and subscriptions......................           4,044           1,685           2,121           7,850
    Salaries....................................          63,591          26,506          33,357         123,454
    Utilities...................................          41,681          17,373          21,864          80,919
    Utilities (D3-21-03)........................        (34,248)        (14,275)        (17,965)        (66,488)
    Accounting/Professional fees................          22,765           9,489          11,941          44,195
    Pilot Training..............................          44,259          18,448          23,216          85,923
    Other expenses..............................          24,741          10,312          12,978          48,032
                                                 ---------------------------------------------------------------
        Total Administrative Expenses...........         568,336         236,889         298,122       1,103,347
                                                 ---------------------------------------------------------------
            Total Operating Expenses (Other            2,096,160         873,705       1,099,554       4,069,419
             Costs+ Applicant Cost + Pilot Boats
             + Admin)...........................
                                                 ---------------------------------------------------------------
    Directors Adjustments--Applicant Surcharge    ..............  ..............  ..............  ..............
     Collected..................................
                                                 ---------------------------------------------------------------
    Total Directors Adjustments.................  ..............  ..............  ..............  ..............
                                                 ---------------------------------------------------------------
    Total Operating Expenses (OpEx +                   2,096,160         873,705       1,099,554       4,069,419
     Adjustments)...............................
----------------------------------------------------------------------------------------------------------------

B. Step 2: Project Operating Expenses, Adjusting for Inflation or
Deflation

    In accordance with the text in Sec.  404.102, having identified the
2021 operating expenses in Step 1, the next step is to estimate the
current year's operating expenses by adjusting those expenses for
inflation 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
2022 inflation rate.\43\ Because the BLS does not provide forecasted
inflation data, we use economic projections from the Federal Reserve
for the 2023 and 2024 inflation modification.\44\ Based on that
information, the calculations for Step 2 are as presented in table 28:
---------------------------------------------------------------------------

    \43\ The CPI is defined as ``All Urban Consumers (CPI-U), All
Items, 1982-4=100.'' Series CUUR0200SAO (Downloaded March 21, 2023).
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.
    \44\ The 2023 and 2024 inflation rates are available at https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230322.pdf. We used the Core PCE December Projection
found in table 1. (Last visited 04/2023).

                            Table 28--Adjusted Operating Expenses for District Three
----------------------------------------------------------------------------------------------------------------
                                                                                District Three
                                                                 -----------------------------------------------
                                                                   Undesignated     Designated         Total
----------------------------------------------------------------------------------------------------------------
Total Operating Expenses (Step 1)...............................      $3,195,714        $873,705      $4,069,419
2022 Inflation Modification (@8%)...............................         255,657          69,896         325,553
2023 Inflation Modification (@3.5%).............................         120,798          33,026         153,824
2024 Inflation Modification (@2.5%).............................          89,304          24,416         113,720
                                                                 -----------------------------------------------
    Adjusted 2024 Operating Expenses............................       3,661,473       1,001,043       4,662,516
----------------------------------------------------------------------------------------------------------------

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 registered pilots in each district. We
determine the number of registered pilots based on data provided by the
WGLPA. Using these numbers, we estimate that there will be 22
registered pilots in 2024 in District Three. We determine the number of
apprentice pilots based on input from the district on anticipated
retirements and staffing needs. Using these numbers, the Coast Guard
estimates that there will be two apprentice pilots in 2024 in District
Three. Based on the seasonal staffing model discussed in the 2017
ratemaking (82 FR 41466), a certain number of pilots are assigned to
designated waters, and a certain number of pilots are assigned to
undesignated waters, as shown in table 29. These numbers are used to
determine the amount of revenue needed in their respective areas.

             Table 29--Authorized Pilots for District Three
------------------------------------------------------------------------
                         Item                            District Three
------------------------------------------------------------------------
Proposed Maximum Number of Pilots (per Sec.                           22
 401.220(a)) *........................................
2024 Authorized Pilots (total)........................                22
Pilots Assigned to Designated Areas...................                 5
Pilots Assigned to Undesignated Areas.................                17
2024 Apprentice Pilots................................                 2
------------------------------------------------------------------------
* For a detailed calculation, refer to the Great Lakes Pilotage Rates--
  2017 Annual Review final rule, which contains the staffing model. See
  82 FR 41466, table 6 at 41480 (August 31, 2017).

D. Step 4: Determine Target Pilot Compensation Benchmark and Apprentice
Pilot Wage Benchmark

    In this step, we determine the total 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 2023 target compensation benchmark of $424,398 by 1.7
percent for a value of $431,613. This accounts for the difference in
actual first quarter 2023 ECI inflation, which is 4.4 percent, and the
2023 PCE estimate of 2.7 percent.45 46 The second step
accounts for projected inflation from 2023 to 2024, which is 2.5
percent.\47\ Based on the projected 2024 inflation estimate, the
proposed target compensation benchmark for 2024 is $442,403 per pilot.
The proposed apprentice pilot wage benchmark is 36 percent of the
target pilot compensation, or $159,265 ($442,403 x 0.36).
---------------------------------------------------------------------------

    \45\ 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 visited 04/28/23).
    \46\ Table 1 Summary of Economic Projections, PCE Inflation.
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20220316.pdf (Last visited 05/17/23).
    \47\ Table 1 Summary of Economic Projections, PCE Inflation
December Projection. https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230322.pdf (Last visited 03/2023).
---------------------------------------------------------------------------

    Next, we certify that the number of pilots estimated for 2024 is
less than or equal to the number permitted under the staffing model in
Sec.  401.220(a). The staffing model suggests that District Three needs
22 pilots, which is less than or equal to the number of registered
pilots provided by the pilot association. 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 Three, as shown in table 30. We estimate that the number of
apprentice pilots with limited registration needed will be two for
District Three in the 2024 season. The total target wages for
apprentices are allocated with 21 percent for the designated area, and
79 percent (52 percent + 27 percent) for the undesignated areas, in
accordance with the allocation for operating expenses.

                                Table 30--Target Compensation for District Three
----------------------------------------------------------------------------------------------------------------
                                                                                District Three
                                                                 -----------------------------------------------
                                                                   Undesignated     Designated         Total
----------------------------------------------------------------------------------------------------------------
Target Pilot Compensation.......................................        $442,403        $442,403        $442,403
Number of Pilots................................................              17               5              22
    Total Target Pilot Compensation.............................      $7,520,851      $2,212,015      $9,732,866
Target Apprentice Pilot Compensation............................        $159,265        $159,265        $159,265
Number of Apprentice Pilots.....................................  ..............  ..............               2

    Total Target Apprentice Pilot Compensation..................        $251,639         $66,891        $318,530
----------------------------------------------------------------------------------------------------------------

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 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 4.0742 percent,
rounded.\48\ By multiplying the two figures, we obtain the working
capital fund contribution for each area, as shown in table 31.
---------------------------------------------------------------------------

    \48\ Moody's Seasoned Aaa Corporate Bond Yield, average of 2022
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 visited 03/21/2023).

                          Table 31--Working Capital Fund Calculation for District Three
----------------------------------------------------------------------------------------------------------------
                                                                                District Three
                                                                 -----------------------------------------------
                                                                   Undesignated     Designated         Total
----------------------------------------------------------------------------------------------------------------
Adjusted Operating Expenses (Step 2)............................      $3,661,473      $1,001,043      $4,662,516
    Total Target Pilot Compensation (Step 4)....................      $7,520,851      $2,212,015      $9,732,866
    Total Target Apprentice Pilot Compensation (Step 4).........        $251,639         $66,891        $318,530
    Total 2024 Expenses.........................................     $11,433,963      $3,279,949     $14,713,912
Working Capital Fund (4.0742%)..................................        $465,839        $133,631        $599,470
----------------------------------------------------------------------------------------------------------------

F. Step 6: Project Needed Revenue

    In this step, we add 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 pilot compensation (from
Step 4), and the working capital fund contribution (from Step 5). The
calculations are shown in table 32.

                                   Table 32--Revenue Needed for District Three
----------------------------------------------------------------------------------------------------------------
                                                                                District Three
                                                                 -----------------------------------------------
                                                                   Undesignated     Designated         Total
----------------------------------------------------------------------------------------------------------------
Adjusted Operating Expenses (Step 2)............................      $3,661,473      $1,001,043      $4,662,516
    Total Target Pilot Compensation (Step 4)....................      $7,520,851      $2,212,015      $9,732,866
    Total Target Apprentice Pilot Compensation (Step 4).........        $251,639         $66,891        $318,530
Working Capital Fund (Step 5)...................................        $465,839        $133,631        $599,470
    Total Revenue Needed........................................     $11,899,802      $3,413,580     $15,313,382
----------------------------------------------------------------------------------------------------------------

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. In the
first part, the 10-year traffic average in District Three is calculated
using the total time on task or pilot bridge hours. To calculate the
time on task for each district, the Coast Guard uses billing data from
SeaPro, pulling the data from the system filtering by district, year,
job status (including only processed jobs), and flagging code
(including only U.S. jobs). Because we calculate separate figures for
designated and undesignated waters, there are two parts for each
calculation. We show these values in table 33.

            Table 33--Time on Task for District Three (Hours)
------------------------------------------------------------------------
                                                  District Three
                  Year                   -------------------------------
                                           Undesignated     Designated
------------------------------------------------------------------------
2022....................................          23,985           4,424
2021....................................          18,286           2,516
2020....................................          24,178           3,682
2019....................................          24,851           3,395
2018....................................          19,967           3,455
2017....................................          20,955           2,997
2016....................................          23,421           2,769

2015....................................          22,824           2,696
2014....................................          25,833           3,835
2013....................................          17,115           2,631
                                         -------------------------------
    Average.............................          22,142           3,240
------------------------------------------------------------------------

    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. The calculations
for District Three are set forth in table 34.

         Table 34--Initial Rate Calculations for District Three
------------------------------------------------------------------------
                                           Undesignated     Designated
------------------------------------------------------------------------
Revenue needed (Step 6).................     $11,899,802      $3,413,580
Average time on task (hours)............          22,142           3,240
Initial rate............................            $537          $1,054
------------------------------------------------------------------------

H. Step 8: Calculate Average Weighting Factors by Area

    In this step, we calculate the average weighting factor for each
designated and undesignated area. We collect the weighting factors, set
forth in 46 CFR 401.400, for each vessel trip. Using this data, we
calculate the average weighting factor for each area using the data
from each vessel transit from 2014 onward, as shown in tables 35 and
36.

                    Table 35--Average Weighting Factor for District Three, Undesignated Areas
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Weighting       Weighted
                        Vessel class/year                            transits         factor         transits
----------------------------------------------------------------------------------------------------------------
Area 6
Class 1 (2014)..................................................              45               1              45
Class 1 (2015)..................................................              56               1              56
Class 1 (2016)..................................................             136               1             136
Class 1 (2017)..................................................             148               1             148
Class 1 (2018)..................................................             103               1             103
Class 1 (2019)..................................................             173               1             173
Class 1 (2020)..................................................               4               1               4
Class 1 (2021)..................................................               8               1               8
Class 1 (2022)..................................................              94               1              94
Class 2 (2014)..................................................             274            1.15             315
Class 2 (2015)..................................................             207            1.15             238
Class 2 (2016)..................................................             236            1.15             271
Class 2 (2017)..................................................             264            1.15             304
Class 2 (2018)..................................................             169            1.15             194
Class 2 (2019)..................................................             279            1.15             321
Class 2 (2020)..................................................             332            1.15             382
Class 2 (2021)..................................................             273            1.15             314
Class 2 (2022)..................................................             278            1.15             320
Class 3 (2014)..................................................              15             1.3              20
Class 3 (2015)..................................................               8             1.3              10
Class 3 (2016)..................................................              10             1.3              13
Class 3 (2017)..................................................              19             1.3              25
Class 3 (2018)..................................................               9             1.3              12
Class 3 (2019)..................................................               9             1.3              12
Class 3 (2020)..................................................               4             1.3               5
Class 3 (2021)..................................................               5             1.3               7
Class 3 (2022)..................................................               3             1.3               4
Class 4 (2014)..................................................             394            1.45             571
Class 4 (2015)..................................................             375            1.45             544
Class 4 (2016)..................................................             332            1.45             481
Class 4 (2017)..................................................             367            1.45             532
Class 4 (2018)..................................................             337            1.45             489
Class 4 (2019)..................................................             334            1.45             484
Class 4 (2020)..................................................             339            1.45             492
Class 4 (2021)..................................................             365            1.45             529
Class 4 (2022)..................................................             385            1.45             558
                                                                 -----------------------------------------------

    Total for Area 6............................................           6,380  ..............           8,200
Area 8
Class 1 (2014)..................................................               3               1               3
Class 1 (2015)..................................................               0               1               0
Class 1 (2016)..................................................               4               1               4
Class 1 (2017)..................................................               4               1               4
Class 1 (2018)..................................................               0               1               0
Class 1 (2019)..................................................               0               1               0
Class 1 (2020)..................................................               1               1               1
Class 1 (2021)..................................................               5               1               5
Class 1 (2022)..................................................              13               1              13
Class 2 (2014)..................................................             177            1.15             204
Class 2 (2015)..................................................             169            1.15             194
Class 2 (2016)..................................................             174            1.15             200
Class 2 (2017)..................................................             151            1.15             174
Class 2 (2018)..................................................             102            1.15             117
Class 2 (2019)..................................................             120            1.15             138
Class 2 (2020)..................................................             180            1.15             207
Class 2 (2021)..................................................             124            1.15             143
Class 2 (2022)..................................................             103            1.15             118
Class 3 (2014)..................................................               3             1.3               4
Class 3 (2015)..................................................               0             1.3               0
Class 3 (2016)..................................................               7             1.3               9
Class 3 (2017)..................................................              18             1.3              23
Class 3 (2018)..................................................               7             1.3               9
Class 3 (2019)..................................................               6             1.3               8
Class 3 (2020)..................................................               1             1.3               1
Class 3 (2021)..................................................               1             1.3               1
Class 3 (2022)..................................................               6             1.3               8
Class 4 (2014)..................................................             243            1.45             352
Class 4 (2015)..................................................             253            1.45             367
Class 4 (2016)..................................................             204            1.45             296
Class 4 (2017)..................................................             269            1.45             390
Class 4 (2018)..................................................             188            1.45             273
Class 4 (2019)..................................................             254            1.45             368
Class 4 (2020)..................................................             265            1.45             384
Class 4 (2021)..................................................             319            1.45             463
Class 4 (2022)..................................................             271            1.45             393
                                                                 -----------------------------------------------
    Total for Area 8............................................           3,645  ..............           4,874
    Combined total..............................................          10,025  ..............          13,074
        Average weighting factor (weighted transits/number of     ..............            1.30  ..............
         transits)..............................................
----------------------------------------------------------------------------------------------------------------

                     Table 36--Average Weighting Factor for District Three, Designated Areas
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Weighting       Weighted
                        Vessel class/year                            transits         factor         transits
----------------------------------------------------------------------------------------------------------------
Class 1 (2014)..................................................              27               1              27
Class 1 (2015)..................................................              23               1              23
Class 1 (2016)..................................................              55               1              55
Class 1 (2017)..................................................              62               1              62
Class 1 (2018)..................................................              47               1              47
Class 1 (2019)..................................................              45               1              45
Class 1 (2020)..................................................              15               1              15
Class 1 (2021)..................................................              15               1              15
Class 1 (2022)..................................................             102               1             102
Class 2 (2014)..................................................             221            1.15             254
Class 2 (2015)..................................................             145            1.15             167
Class 2 (2016)..................................................             174            1.15             200
Class 2 (2017)..................................................             170            1.15             196
Class 2 (2018)..................................................             126            1.15             145
Class 2 (2019)..................................................             162            1.15             186
Class 2 (2020)..................................................             218            1.15             251
Class 2 (2021)..................................................             131            1.15             151
Class 2 (2022)..................................................             176            1.15             202
Class 3 (2014)..................................................              15             1.3              20
Class 3 (2015)..................................................               0             1.3               0
Class 3 (2016)..................................................               6             1.3               8
Class 3 (2017)..................................................              14             1.3              18

Class 3 (2018)..................................................               6             1.3               8
Class 3 (2019)..................................................               3             1.3               4
Class 3 (2020)..................................................               1             1.3               1
Class 3 (2021)..................................................               2             1.3               3
Class 3 (2022)..................................................               5             1.3               7
Class 4 (2014)..................................................             321            1.45             465
Class 4 (2015)..................................................             245            1.45             355
Class 4 (2016)..................................................             191            1.45             277
Class 4 (2017)..................................................             234            1.45             339
Class 4 (2018)..................................................             225            1.45             326
Class 4 (2019)..................................................             308            1.45             447
Class 4 (2020)..................................................             336            1.45             487
Class 4 (2021)..................................................             258            1.45             374
Class 4 (2022)..................................................             344            1.45             499
    Total.......................................................           4,428  ..............           5,780
        Average weighting factor (weighted transits/number of     ..............            1.31  ..............
         transits)..............................................
----------------------------------------------------------------------------------------------------------------

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 37.

                                 Table 37--Revised Base Rates for District Three
----------------------------------------------------------------------------------------------------------------
                                                                                Revised rate
                                                                                Average     (initial rate
                              Area                                 Initial rate      weighting        average
                                                                     (Step 7)      factor  (Step     weighting
                                                                                8)            factor)
----------------------------------------------------------------------------------------------------------------
District Three: Undesignated....................................            $537            1.30            $413
District Three: Designated......................................          $1,054            1.31            $805
----------------------------------------------------------------------------------------------------------------

J. Step 10: Review and Finalize Rates

    In this step, the Director reviews the rates set forth by the
staffing model and ensures that they meet the goal of ensuring safe,
efficient, and reliable pilotage. 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, taking average traffic and
weighting factors into consideration. Based on this information, 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 38.

                                Table 38--Proposed Final Rates for District Three
----------------------------------------------------------------------------------------------------------------
                                                                                Final 2023       Proposed 2024
                    Area                                   Name                 pilotage rate     pilotage rate
----------------------------------------------------------------------------------------------------------------
District Three: Designated..................  St. Marys River...............              $834              $805
District Three: Undesignated................  Lakes Huron, Michigan, and                   410               413
                                               Superior.
----------------------------------------------------------------------------------------------------------------

X. 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.\49\ For this
NPRM, the Coast Guard estimates an increase in cost of approximately
$1.91 million to industry. This is approximately a 5-percent increase
because of the change in revenue needed in 2024 compared to the revenue
needed in 2023. See table 39.
---------------------------------------------------------------------------

    \49\ Great Lakes Pilotage Rates--2023 Annual Ratemaking and
Review of Methodology (88 FR 12226), published February 27, 2023.

                               Table 39--Economic Impacts Due to Proposed Changes
----------------------------------------------------------------------------------------------------------------
          Change                Description       Affected population          Costs               Benefits
----------------------------------------------------------------------------------------------------------------
Rate changes.............  In accordance with    Owners and operators  Increase of           New rates cover an
                            46 U.S.C. Chapter     of 277 vessels        $1,914,438 due to     association's
                            93, the Coast Guard   transiting the        change in revenue     necessary and
                            is required to        Great Lakes system    needed for 2024       reasonable
                            review and adjust     annually, 56 United   ($39,573,633) from    operating
                            pilotage rates        States Great Lakes    revenue needed for    expenses.
                            annually.             pilots, 7             2023 ($37,659,195)   Promotes safe,
                                                  apprentice pilots,    as shown in table     efficient, and
                                                  and 3 pilotage        40.                   reliable pilotage
                                                  associations.                               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.
----------------------------------------------------------------------------------------------------------------

    The Coast Guard is required to review and adjust pilotage rates on
the Great Lakes annually. See section IV., 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 for the 2024 shipping season to generate
sufficient revenues for each district to reimburse its necessary and
reasonable operating expenses, fairly compensate properly trained and
rested pilots, and 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 277 oceangoing vessels that transit the Great Lakes
annually on average from 2020 to 2022. The Coast Guard estimates that
there will be 56 registered pilots and 7 apprentice pilots during the
2024 shipping season. The shippers affected by these rate changes 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 2020
through 2022 from the GLPMS to estimate the average annual number of
vessels affected by the rate adjustment. The GLPMS 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. When we reviewed 10 years of the most recent
billing data, we found the data included vessels that have not used
pilotage services in recent years. 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 444 unique vessels used pilotage services during the
years 2020 through 2022. That is, these vessels had a pilot dispatched
to the vessel, and billing information was recorded in SeaPro. Of these
vessels, 412 were foreign-flagged vessels and 32 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 they 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 2020 through 2022 as the best
representation of vessels estimated to be affected by the rates in this
proposed rule. From 2020 through 2022, an average of 277 vessels used
pilotage services annually.\50\ On average, 266 of these vessels were
foreign-flagged and 11 were U.S.-flagged vessels that voluntarily opted
into the pilotage service (these figures are rounded averages).
---------------------------------------------------------------------------

    \50\ 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 2023 with the total projected revenues to cover costs in 2024.
We set pilotage rates so 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 8, 20, and 32 of
this preamble). The Coast Guard estimates that, for the 2024 shipping
season, the projected revenue needed for all three districts is
$39,573,633.
    To estimate the change in cost to shippers from this proposed rule,
the Coast Guard compared the 2024 total projected revenues to the 2023
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 2023 final
rule, we estimated the total projected revenue needed for 2023 as
37,659,195.\51\ This is the best approximation of 2023 revenues, as, at
the time of publication of this proposed rule, the Coast Guard does not
have enough audited data available for the 2023 shipping season to
revise these projections. Table 40 shows the revenue projections for
2023 and 2024 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.
---------------------------------------------------------------------------

    \51\ 88 FR 12226, 12252. See table 42. https://www.govinfo.gov/content/pkg/FR-2023-02-27/pdf/2023-03212.pdf (Last visited 5/17/23).

                           Table 40--Effect of the Proposed Rule by Area and District
                                         [U.S. dollars; non-discounted]
----------------------------------------------------------------------------------------------------------------
                                                             Revenue needed    Revenue needed   Additional costs
                           Area                                  in 2023           in 2024        of this rule
----------------------------------------------------------------------------------------------------------------
Total, District One.......................................       $12,609,601       $13,706,739        $1,097,138
Total, District Two.......................................        10,392,542        10,553,511           160,969
Total, District Three.....................................        14,657,052        15,313,382           656,330
                                                           -----------------------------------------------------
    System Total..........................................        37,659,195        39,573,633         1,914,438
----------------------------------------------------------------------------------------------------------------
* All figures are rounded to the nearest dollar and may not sum.

    The resulting difference between the projected revenue in 2023 and
the projected revenue in 2024 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 $1,097,138 over the previous
year. Affected shippers operating in District Two and District Three
would experience an increase in payments of $160,969 and $656,330,
respectively, when compared with 2023. The overall adjustment in
payments would increase payments by shippers of $1,914,438 across all
three districts (a 5-percent increase when compared with 2023). 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 41 shows the difference in revenue by revenue-component from
2023 to 2024 and presents each revenue-component as a percentage of the
total revenue needed. In both 2023 and 2024, the largest revenue-
component was pilotage compensation (63 percent of total revenue needed
in 2023, and 63 percent of total revenue needed in 2024), followed by
operating expenses (32 percent of total revenue needed in 2023, and 31
percent of total revenue needed in 2024). The large increase in the
working capital fund, 56 percent from 2023 to 2024, is driven by a
large increase in the Target Rate of Return on Investment from 2.7033
percent in 2021 to 4.0742 percent in 2022.\52\
---------------------------------------------------------------------------

    \52\ Moody's Seasoned Aaa Corporate Bond Yield, average of 2022
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 visited 03/21/2023).

                                                  Table 41--Difference in Revenue by Revenue-Component
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Percentage                 Percentage
                                                                    Revenue      of total      Revenue      of total      Difference        Percentage
                       Revenue component                          needed  in     revenue     needed  in     revenue     (2024 revenue--    change from
                                                                     2023       needed  in      2024       needed  in    2023 revenue)    previous year
                                                                                2023                       2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted Operating Expenses....................................   $11,984,950           32   $12,135,029           31          $150,079                1
Total Target Pilot Compensation................................    23,766,288           63    24,774,568           63         1,008,280                4
Total Target Apprentice Pilot Compensation.....................       916,700            2     1,114,856            3           198,156               22
Working Capital Fund...........................................       991,257            3     1,549,180            4           557,923               56
                                                                ----------------------------------------------------------------------------------------
    Total Revenue Needed.......................................    37,659,195          100    39,573,633          100         1,914,438                5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* All figures are rounded to the nearest dollar and may not sum.

    As stated above, we estimate that there would be a total increase
in revenue needed by the pilot associations of $1,914,438. This
represents an increase in revenue needed for target pilot compensation
of $1,008,280, an increase in revenue needed for the total apprentice
pilot wage benchmark of $198,156, an increase in the revenue needed for
adjusted operating expenses of $150,079, and an increase in the revenue
needed for the working capital fund of $557,923.
    The change in revenue needed for pilot compensation, $1,008,280, is
due to two factors: (1) The changes to adjust 2023 pilotage
compensation to account for the difference between actual ECI inflation
\53\ (4.4 percent) and predicted PCE inflation \54\ (2.7 percent) for
2023; and (2) projected inflation of pilotage compensation in Step 2 of
the methodology, using predicted inflation through 2024.
---------------------------------------------------------------------------

    \53\ 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 visited 04/28/23).
    \54\ Table 1 Summary of Economic Projections, PCE Inflation
December Projection. https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20220316.pdf (Last visited 5/17/23).
---------------------------------------------------------------------------

    The target compensation is $442,403 per pilot in 2024, compared to
$424,398 in 2023. The proposed changes to modify the 2023 pilot
compensation to account for the difference between predicted and actual
inflation would increase the 2023 target compensation value by 1.7
percent. As shown in table 42, this inflation adjustment increases
total compensation by $7,215 per pilot, and the total revenue needed by
$404,027, when accounting for all 56 pilots.

  Table 42--Change in Revenue Resulting From the Change to Inflation of
                Pilot Compensation Calculation in Step 4
------------------------------------------------------------------------

------------------------------------------------------------------------
2023 Target Pilot Compensation.............................     $424,398
Adjusted 2023 Compensation ($424,398 x 1.017)..............      431,613
Difference between Adjusted Target 2023 Compensation and           7,215
 Target 2023 Compensation ($431,613-$424,398)..............
Increase in total Revenue for 56 Pilots ($7,215 x 56)......      404,027
------------------------------------------------------------------------
*All figures are rounded to the nearest dollar and may not sum.

    Similarly, table 43 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 $2,597 per apprentice pilot, and the total
revenue needed by $18,181 when accounting for all seven apprentice
pilots.

  Table 43--Change in Revenue Resulting From the Change to Inflation of
           Apprentice Pilot Compensation Calculation in Step 4
------------------------------------------------------------------------

------------------------------------------------------------------------
Target Apprentice Pilot Compensation.......................     $152,783
Adjusted Compensation ($152,783 x 1.017)...................      155,381
Difference between Adjusted Target Compensation and Target         2,597
 Compensation ($155,381-$152,783)..........................
Increase in total Revenue for Apprentices ($2,597 x 7).....       18,181
------------------------------------------------------------------------
*All figures are rounded to the nearest dollar and may not sum.

    As noted earlier, the Coast Guard predicts that 56 pilots would be
needed for the 2024 season. This is the same number of pilots as the
2023 season, so we do not estimate a change in revenue needed for pilot
compensation separate from the changes to inflation.
    Similarly, the Coast Guard predicts that seven apprentice pilots
would be needed for the 2024 season. This would be an increase of one
from the 2023 season. Table 44 shows the increase of $156,668 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 2023 apprentice pilotage
compensation to account for the difference between actual and predicted
inflation.

  Table 44--Change in Revenue Resulting From Increase of One Apprentice
                                  Pilot
------------------------------------------------------------------------

------------------------------------------------------------------------
2024 Apprentice Target Compensation........................     $159,265
Total Number of New Apprentices............................            1
Total Cost of new Apprentices ($159,265 x 1)...............      159,265
Difference between Adjusted Target 2023 Compensation and           2,597
 Target 2023 Compensation ($159,265-$155,381)..............
Increase in total Revenue for due to increase of 1                 2,597
 apprentice ($2,597 x 1)...................................
Net Increase in total Revenue for increase of 1-Apprentice       156,668
 (159,265-$2,597)..........................................
------------------------------------------------------------------------
*All figures are rounded to the nearest dollar and may not sum.

    Another increase, $604,253, would be the result of increasing
compensation for the 56 pilots to account for future inflation of 2.5
percent in 2024. This would increase total compensation by $10,790 per
pilot, as shown in table 45.

 Table 45--Change in Revenue Resulting From Inflating 2023 Compensation
                                 to 2024
------------------------------------------------------------------------

------------------------------------------------------------------------
Adjusted 2023 Compensation.................................     $431,613
2024 Target Compensation ($431,613 x 1.025)................      442,403
Difference between Adjusted 2023 Compensation and Target          10,790
 2024 Compensation $442,403-$431,613)......................

Increase in total Revenue for 56 Pilots ($10,790 x 56).....      604,253
------------------------------------------------------------------------
*All figures are rounded to the nearest dollar and may not sum.

    Similarly, an increase of $27,191 would be the result of increasing
compensation for the 7 apprentice pilots to account for future
inflation of 2.5 percent in 2024. This would increase total
compensation by $3,884 per apprentice pilot, as shown in table 46.

  Table 46--Change in Revenue Resulting From Inflating 2023 Apprentice
                       Pilot Compensation to 2024
------------------------------------------------------------------------

------------------------------------------------------------------------
Adjusted 2023 Compensation.................................     $155,381
2024 Target Compensation ($442,403 x 36%)..................      159,265
Difference between Adjusted Compensation and Target                3,884
 Compensation ($159,265-$155,381)..........................
Increase in total Revenue for 7 Apprentices ($3,884 x 7)...       27,191
------------------------------------------------------------------------
*All figures are rounded to the nearest dollar and may not sum.

    Table 47 presents the percentage change in revenue by area and
revenue-component, excluding surcharges, as they are applied at the
district level.\55\
---------------------------------------------------------------------------

    \55\ The 2023 projected revenues are from the Great Lakes
Pilotage Rate-2023 Annual Review and Revisions to Methodology final
rule (88 FR 12226), tables 10, 22, and 34. The 2024 projected
revenues are from tables 8, 20, and 32 of this proposed rule.

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

[GRAPHIC] [TIFF OMITTED] TP16AU23.002

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 cover an
association's operating expenses, (2) providing fair pilot
compensation, adequate training, and sufficient rest periods for
pilots, and (3) ensuring 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.\56\ As described in section X.,
Regulatory Analyses, and section III., Executive Summary, of this
preamble, we found that 444 unique vessels used pilotage services
during the years 2020 through 2022. These vessels are owned by 53
entities, of which 47 are foreign entities that operate primarily
outside the United States, and the remaining 6 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.\57\ Table 48 shows the North American
Industry Classification System (NAICS) codes of the U.S. entities and
the small entity standard size established by the SBA.
---------------------------------------------------------------------------

    \56\ See https://resource.referenceusa.com/ (Last visited 05/18/
2023).
    \57\ See https://www.sba.gov/document/support--table-size-standards (Last visited 5/17/23). 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.

         Table 48--NAICS Codes and Small Entities Size Standards
------------------------------------------------------------------------
                                                          Small entity
             NAICS                    Description         size standard
------------------------------------------------------------------------
238910........................  Site Preparation        $19,000,000.
                                 Contractors.
425120........................  Wholesale Trade Agents  125 Employees.
                                 And Brokers.
483211........................  Inland Water Freight    1,050 Employees.
                                 Transportation.
483212........................  Inland Water            550 Employees.
                                 Transportation.
484230........................  Specialized Freight     $34,000,000.
                                 (Except Used Goods)
                                 Trucking, Long-
                                 Distance.
488330........................  Navigational Services   $47,000,000.
                                 to Shipping.
561599........................  All Other Travel        $32,500,000.
                                 Arrangement And
                                 Reservation Services.
713930........................  Marinas...............  $11,000,000.
813910........................  Business Associations.  $15,500,000.
------------------------------------------------------------------------

    Of the six U.S. entities, two exceed the SBA's small business
standards for small entities. To estimate the potential impact on the
remaining four small entities, the Coast Guard used their 2022 invoice
data to estimate their pilotage costs in 2024. We increased their 2022
costs to account for the changes in pilotage rates resulting from this
proposed rule and the 2023 final rule. We estimated the change in cost
to these entities resulting from this proposed rule by subtracting
their estimated 2023 pilotage costs from their estimated 2024 pilotage
costs and found the average costs to small firms would be approximately
$7,345.04, with a range of $4,198.62 to $11,322.27. We then compared
the estimated change in pilotage costs between 2023 and 2024 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 1.62 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. These associations are designated collectively as the Lake
Carrier's Association, as well as individually by each separate
district association, all with the same NAICS code, ``Business
Association'' \58\ with a small-entity size standard of $15,500,000.
Based on the reported revenues from audit reports, the associations
individually qualify as small entities, but are not considered small by
the reported revenue of the Lake Carrier's Association.
---------------------------------------------------------------------------

    \58\ In previous rulemakings, the associations used a different
NAICS code, 483212 Inland Water Passenger Transportation, which had
a size standard of 500 employees (as of the latest SBA [published
March 17, 2023] small business size table, that NAICS has a small
business size threshold of 550 employees) and, therefore, designated
the associations as small entities. The change in NAICS code comes
from an update to the association's ReferenceUSA profile in February
2022.
---------------------------------------------------------------------------

    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 affect a substantial number of small entities, nor have a
significant economic impact on any of the affected entities.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that
this proposed 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.

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.'' See 46 U.S.C. 9303(f). This 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 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 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 the
2024 shipping season 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 continues to read as follows:

    Authority: 46 U.S.C. 2103, 2104(a), 6101, 7701, 8105, 9303,
9304; DHS Delegation No. 00170.1, Revision No. 01.3, 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 $925;
    (2) Lake Ontario is $606;
    (3) Lake Erie is $586;
    (4) The navigable waters from Southeast Shoal to Port Huron, MI is
$660;
    (5) Lakes Huron, Michigan, and Superior is $413; and
    (6) The St. Mary's River is $805.
* * * * *

    Dated: August 10, 2023.
W.R. Arguin,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Prevention
Policy.
[FR Doc. 2023-17474 Filed 8-15-23; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: March 12, 2007 (Volume 72, Number 47)]
[Notices]
[Page 11067-11068]
[DOCID:fr12mr07-141]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55395; File No. SR-CBOE-2007-25]

 Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Establishing Fees for the CBOE Stock Exchange

March 2, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 1, 2007, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been substantially
prepared by the Exchange. CBOE designated this proposal as one
establishing or changing a due, fee, or other charge applicable only to
its members pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule
19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    CBOE proposes to establish fees applicable to the CBOE Stock
Exchange (``CBSX''). The text of the proposed rule change is available
on the Exchange's Web site (http://www.cboe.org/legal), at the

principal office of the Exchange, and at the Commission's Public
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On March 5, 2007, CBOE intends to launch CBSX, which will serve as
a stock trading facility of CBOE. This filing proposes to set forth the
fee schedule for CBSX. Specifically, the CBSX fee schedule lists
certain fees from the CBOE fee schedule that are applicable to CBSX
users (these include facility fees and connectivity charges). The CBSX
fee schedule also contains transaction fees for CBSX. These transaction
fees are based on whether the executing member is ``taking'' liquidity
or ``making'' liquidity in connection with the transaction. Takers will
be charged a rate that varies between $0.26 to $0.29 per 100 shares
executed based on the amount of total volume executed by that user
during the month. Orders that are ``routed'' to other market centers
will be charged the same rate as the Taker rate. Makers will receive a
rebate of $0.24 per 100 shares, except that Remote Market-Makers and
Designated Primary Market-Makers will receive enhanced rebates if they
meet certain market quality bid/ask standards that are calculated on a
monthly basis. Cross transactions will be free. Lastly, CBSX will
rebate users 50% of monthly tape revenue received from the Consolidated
Tape Association and Nasdaq UTP Plans. The proposed fees will not take
effect until March 5, 2007.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\5\ in general, and furthers the objectives of Section 6(b)(4) of
the Act,\6\ in particular, in that it is designed to provide for the
equitable allocation of reasonable dues, fees, and other charges among
CBOE members and other persons using its facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any

burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing proposed rule change has become effective pursuant to
Section 19(b)(3)(A)(ii) of the Act \7\ and Rule 19b-4(f)(2) thereunder
\8\ because it establishes or changes a due, fee, or other charge
applicable only to Exchange members. At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File No. SR-CBOE-2007-25 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2007-25. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of the filing
also will be available for inspection and copying at the principal
office of the Exchange. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-CBOE-2007-25 and should be submitted on or before April 2, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-4292 Filed 3-9-07; 8:45 am]

BILLING CODE 8010-01-P