Organization and Delegation of Powers and Duties; Transfer of Great Lakes Pilotage Authority From the Coast Guard to the Saint Lawrence Seaway Development Corporation

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 1

[OST Docket No. 1; Amendment 1-272]

Organization and Delegation of Powers and Duties; Transfer of

Great Lakes Pilotage Authority From the Coast Guard to the Saint

Lawrence Seaway Development Corporation

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

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SUMMARY: The Coast Guard's responsibility for administering the

Secretary's functions under the Great Lakes Pilotage Act of 1960, as

amended, and the Secretary's authority to enter into, revise, or amend

arrangements with Canada, are being transferred to the Saint Lawrence

Seaway Development Corporation. This rule affirms the interim final

rule amending the delegations to be in accordance with the changed

responsibilities. Although a comment period for the Secretary's

delegations is not required by the Administrative Procedure Act, the

Department of Transportation requested public comment on the interim

final rule because of public and Congressional interest in Great Lakes

Pilotage. This final rule responds to the comments and is necessary to

inform the public that the interim final rule has been affirmed.

DATES: This rule is effective on December 11, 1995.

FOR FURTHER INFORMATION CONTACT: Steven B. Farbman, Office of the

Assistant General Counsel for Regulation and Enforcement (202) 366-

9306, United States Department of Transportation, 400 7th Street SW.,

Washington, DC 20590.

REGULATORY HISTORY: On July 31, 1995, the Department of Transportation

(Department) published an interim final rule with request for comments

(60 FR 38971). The interim final rule contained language that would

transfer Great Lakes Pilotage authority from the Coast Guard to the St.

Lawrence Seaway Development Corporation (SLSDC). The comment period for

the interim final rule ended on September 29, 1995, and was to become

effective October 30, 1995. On October 27, 1995, the Department issued

a rule suspending the effectiveness of the interim final rule. This

final rule affirms the interim final rule and establishes a new

effective date.

SUPPLEMENTARY INFORMATION: The Coast Guard's responsibility for

administering the Secretary's functions under the Great Lakes Pilotage

Act of 1960, as amended, (the Act) is being transferred to the SLSDC.

This rule amends the delegations and enabling regulations to be in

accordance with the changed responsibilities. The functions that are

being transferred are: (1) Investigation and prosecution of violations

of the Act; (2) registration, qualification, and training of registered

pilots; (3) association working rules and dispatching procedures; (4)

pilot working conditions; (5) selection of pilots; (6) number of

pilots; (7) availability of pilots; (8) number of pilotage pools; (9)

articles of association; (10) auditing; and (11) ratemaking. The

licensing of pilots and the investigation and prosecution of marine

accidents and incidents are essential Coast Guard safety functions that

are separate from the Act and Great Lakes Pilotage Regulations. These

functions will remain with the Coast Guard.

Transfer of pilotage responsibilities to the SLSDC will place

pilotage under permanent civilian authority, and placing pilotage in a

smaller organization with an established presence on the Great Lakes

will give pilotage issues greater visibility and more timely attention.

In addition, the SLSDC is being given authority to negotiate directly

with Canada, which will allow timely adjustments to pilotage rates. The

lack of timely adjustments has been a subject of past pilot criticism.

The Secretary's authority to enter into, revise, or amend

arrangements with Canada is being delegated to the SLSDC Administrator

in coordination with the General Counsel of the Department. A

Memorandum of Arrangements between the United States and Canada, last

renegotiated in 1977, states that the Secretary and the Minister of

Transport of Canada ``will arrange for the establishment of regulations

imposing identical rates, charges, and any other conditions or terms

for services of pilots in the waters of the Great Lakes. * * *.'' In

1983, the Act was amended to provide that the ``Secretary, subject to

the concurrence of the Secretary of State, may make agreements with the

appropriate agency of Canada to * * * prescribe joint or identical

rates and charges .''

Discussion of Comments and Changes

The Department received comments from well over 100 commenters

regarding the transfer of Great Lakes Pilotage oversight from the Coast

Guard to the SLSDC. Comments on the interim final rule were received

from Federal and State legislators, pilot associations

[[Page 63445]]

and their employees, individual pilots, professional maritime

organizations, shipping associations, port authorities, labor

organizations, marine service companies, an environmental group, one

State regulatory agency, and interested members of the public.

The interim final rule was supported in comments from Members of

Congress, individual members of the public, port authorities, labor

organizations, professional maritime organizations, pilot

organizations, pilots, a pilot association and its employees, and

marine service companies. Among the organizations supporting the rule

is the owner and operator of one of the largest fleet of Great Lakes-

dedicated deep sea ships; this organization is also one of the largest

consumers of pilotage services in the St. Lawrence Seaway system. Also

in support of the rule was the Association of Great Lakes Ports,

representing the public port authorities of Green Bay, Milwaukee,

Chicago, Burns Harbor, Detroit, Monroe, Toledo, Cleveland, Erie,

Ogdensburg, Superior, and Oswego. Comments in support of the transfer

of delegation also came from the International Longshoremen's

Association (ILA) and individual ports, representing approximately

95,000 members and associated parties. A subgroup of the ILA,

representing approximately 10,000 members, the International

Organization of Masters, Mates and Pilots, is in favor of transferring

delegation from the Coast Guard, but want it moved to an

``Undersecretary'' in the Department. Of the three Great Lakes pilot

associations, District 2 favors the transfer to SLSDC. As of the close

of the comment period, there were 12 pilots in District 2.

Those in favor gave the following reasons in support of the

transfer of delegation: (1) the SLSDC is a smaller organization than

the Coast Guard, and it can significantly reduce the amount of ``red

tape'' associated with pilotage oversight; (2) the SLSDC is a civilian

agency, and it can guarantee a civilian Director of Great Lakes

Pilotage with better continuity than a military Director; (3) the

SLSDC's focus is on the Great Lakes; (4) pilotage issues would receive

more attention from the Administrator of the SLSDC and the Secretary of

Transportation; and (5) the SLSDC's interaction with all elements of

the Great Lakes community would give the pilots significant new

contacts with their customer base.

The interim final rule was opposed in comments from Members of

Congress and State legislators, pilot associations and their employees,

individual pilots, professional maritime organizations, shipping

associations, an environmental group, one State regulatory agency, and

interested members of the public. Among the organizations opposed to

the transfer are the American Pilots Association, Save The River, Inc.,

Lake Carriers' Association, and the Association of International Ship

Masters, which represents about 3,000 to 5,000 members. Of the three

Great Lakes pilot associations, Districts 1 and 3 oppose the transfer.

As of the close of the comment period, there were 9 pilots in District

1 and 19 pilots in District 3.

Those objecting to the transfer of authority did so for the

following reasons: (1) The SLSDC is primarily concerned with economic

and financial issues, and, because of this focus, it will sacrifice

safety by reducing American pilotage jobs and pay, increasing hours of

service, or taking other actions that will have an impact on the

working conditions of pilots and, therefore, the protection of the

environment; (2) many of the functions being transferred to the SLSDC

are related to both safety and economics; (3) the SLSDC does not have

the knowledge to oversee pilotage or negotiate with Canadian officials

regarding pilotage issues; (4) the Coast Guard's recent transfer of

Great Lakes pilotage oversight to the newly-established National

Maritime Center (NMC) reduces red tape, and establishes a civilian

Director without the need for a transfer; (5) the fate of the SLSDC is

in transition because of the DOT's restructuring plans, and this

restructuring will remove the SLSDC and Great Lakes pilotage from

government oversight; (6) there should have been more public input and

more information published regarding the transfer of authority,

including extensive public hearings; (7) the interim final rule

violated the notice and comment requirements of the Administrative

Procedure Act (APA); and (8) Congress intended that pilotage functions

remain in the Coast Guard.

The Department agrees with those commenters who stated that many of

the 11 functions being transferred to the SLSDC relate in part to

safety as well as economics. While the interim final rule stated that

those functions ``are considered to have economic effects,'' the

Department did not mean to imply that only economic functions could be

transferred. The fact that there are safety ramifications involved,

however, should not, and does not, disqualify SLSDC as the agency in

which the authority should reside.

Some commenters opposing the rule pointed to a November 1994 Coast

Guard memorandum approved by the Secretary; attached to the November

1994 memorandum is an options paper, which noted that both safety and

economic functions are vested in the Director of Great Lakes Pilotage,

and that the registration of pilots is a safety function. It also

acknowledged that some economic issues such as travel and work-hour

limits also have safety implications (e.g., their effect on fatigue).

Four options for Departmental oversight of Great Lakes pilotage

functions, each listing pros and cons were provided: (1) Separate

safety and economic oversight; (2) retain in the Coast Guard; (3)

transfer to the Office of the Secretary (OST); and (4) transfer to

SLSDC/MARAD.

Included in this last option was the following statement: ``A

transfer to SLSDC or MARAD may have an adverse impact on safety because

the mission of each agency is economic in nature and primarily

associated with promotion of shipping.'' The memorandum that the

Secretary approved recommended that the responsibility for safety

aspects of Great Lakes pilotage remain with the Coast Guard, but that

economic elements of pilotage oversight be transferred to another

Department office or agency. It also recommended that a Great Lakes

Pilotage Working Group (Working Group) be formed to develop this

option.

The Working Group was formed and included representatives from OST,

the Coast Guard, MARAD, and SLSDC. In developing the option that SLSDC

should assume responsibility for the 11 Great Lakes pilotage functions,

the Final Report of the Working Group was not inconsistent with the

November 1994 memorandum, which had stated that a transfer to SLSDC may

have an adverse impact on safety. The Final Report listed the functions

to be transferred under the heading, ``Economic Functions,'' and it

referred to them as ``essentially economic functions. * * *'' The

Department believes that the 11 functions are essentially, though not

entirely, economic functions. The option in the November 1994

memorandum that contained the ``adverse impact on safety'' statement

envisioned the transfer to SLSDC of not only the 11 ``essentially

economic'' functions, but the following two safety functions as well:

(1) The licensing of pilots and (2) the investigation and prosecution

of marine accidents and incidents.

The Final Report judged these to be essential Coast Guard functions

solely related to safety, and said they should remain with the Coast

Guard. Similarly, the November 1994 memorandum intended that

responsibility for only the safety aspects of Great Lakes pilotage

[[Page 63446]]

remain with the Coast Guard, but not those ``essentially economic''

functions that also have safety ramifications. In fact, the Final

Report stated that the Working Group believed that the transfer of the

11 functions out of the Coast Guard--to any other recipient, including

the SLSDC--would not have a detrimental effect on safety.

Moreover, to the extent the functions involve safety, the

Department has determined there is no problem transferring them to the

SLSDC. As described below, the SLSDC has significant safety

responsibilities, which it has performed successfully for over thirty-

five years. An examination of the SLSDC's operations shows that it has

an impeccable safety record with respect to its authority over one of

the most difficult sections of the entire Great Lakes/Saint Lawrence

Seaway System. Furthermore, in implementing its safety

responsibilities, there is no evidence that the SLSDC has ever

sacrificed safety considerations for economic gain.

The SLSDC operates two locks, a fleet of vessels, maintains

navigational aids, and carries out safety inspections of vessels. In

the St. Lawrence Seaway System, the SLSDC works closely with the Coast

Guard, and performs the same Captain-of-the-Port functions in the

principal operating areas of the Seaway System that the Coast Guard

performs elsewhere. In the Port and Tanker Safety Act of 1978, Congress

expressly reserved that authority to the SLSDC.

In addition, the SLSDC has a comprehensive emergency response plan

designed to protect the environment on the St. Lawrence River and

adjacent areas. The plan directly involves U.S. and Canadian Federal,

state, and local governments, private organizations, and other

interested parties, including pilots. The plan is in place, is tested

yearly, and has been used in actual circumstances twice with complete

success. This year's drill included participation by Federal, state,

and local agencies, in addition to representatives from U.S. and

Canadian pilot organizations.

The SLSDC also has ample, long-standing safety law enforcement

experience. It is responsible for administration of the Seaway

Regulations and Rules (33 CFR Part 401) regarding the clearance,

readiness, and operating requirements for safe passage of vessels

transiting the St. Lawrence Seaway. It operates the Seaway under these

regulations, which are jointly promulgated and enforced with the

Canadian Saint Lawrence Seaway Authority and which contain many vessel

safety rules. In addition, its Captain-of-the-Port responsibility

carries with it enforcement authority, including the ability to fine

for violations, which the SLSDC exercises under subpart B of part 401.

The SLSDC not only has this independent, significant law

enforcement experience, but under an agreement with the Coast Guard,

the SLSDC coordinates the exercise of its authority with related

enforcement activities of the Coast Guard, including those related to

pilotage. Moreover, the SLSDC's personnel carry out many of the Coast

Guard inspection and related functions for the Coast Guard, including

inspections performed by the SLSDC in Canadian waters before vessels

transit the Seaway. In this regard, the SLSDC has the added advantages

of long-standing, joint enforcement with Canada of laws and regulations

relative to the Seaway, including safety laws and regulations, and

ready, cooperative access to Canadian waters for joint as well as U.S.

law enforcement purposes.

Several commenters cited the SLSDC's handling of an incident

involving the M/T CONCORDE as a demonstration of the SLSDC's concern

for economics over safety, alleging that the SLSDC permitted a master

who was drunk to pilot a vessel alone. This refers to an incident in

which it was reported to U.S. and Canadian authorities that the master

of the M/T CONCORDE may have been intoxicated. Upon learning of these

allegations, the St. Lawrence Seaway Pilots Association (SLSPA)

requested permission to assign two pilots to the vessel. In response to

the allegations of intoxication, the M/T CONCORDE was boarded by the

Coast Guard and the master was given a breathalyzer test. The master

not only passed the breathalyzer test, but he showed no signs of misuse

of alcohol. As a result of the U.S. Coast Guard boarding, the Coast

Guard, the SLSDC, and the Canadian Great Lakes Pilotage Authority

cleared the M/T CONCORDE to proceed on its voyage without restriction

with one pilot. Accordingly, the Department finds no basis for the

position of those commenters who described this incident as an example

of the SLSDC favoring economics over safety. Rather, the Department

believes that it is an excellent example of coordination and

cooperation among the Coast Guard, SLSDC, and Canadian authorities

regarding safety issues that affect the entire St. Lawrence Seaway.

Some commenters objected to the interim final rule's

characterization that it was issued in response to ``pilot concerns;''

they argued instead that it was issued in response to outside political

pressure. Some commenters stated that the transfer of authority is

supported by only one Great Lakes Registered pilot, and is opposed by

all three Great Lakes pilot associations.

The Department's examination of a possible transfer of Great Lakes

pilotage authority was the result of a request from a delegation of

interested persons, which included the President of a Great Lakes Pilot

Association (also Vice President of the American Pilots Association for

the Great Lakes), and President of the American Pilots Association.

These organizations expressed concerns on behalf of their members about

the lengthy ratemaking process and the lack of prompt attention given

to pilotage issues. The Department continued its examination and

discovered that similar concerns were expressed by many other

interested parties throughout the Great Lakes. Commenters who believe

the transfer of authority is not supported by any pilots are incorrect.

While two Great Lakes Pilot Associations are opposed to the transfer,

one Great Lakes Pilot Association supports the transfer. Letters of

support for the transfer were also received from individual Great Lakes

Registered Pilots, and from many other interested Great Lakes parties.

The Department did not issue the interim final rule in response to

Congressional pressure. Although the Department has received some

Congressional support for the transfer, it has also received letters

from individual Members of Congress expressing misgivings.

Some commenters contended that the SLSDC lacks the knowledge or

experience to negotiate issues with Canada. The Department disagrees.

The SLSDC has over thirty-five years of experience in direct

negotiations with the government of Canada over the Joint Tariff of

Tolls, Joint Seaway Operating Regulations, and other matters of mutual

concern. Moreover, the SLSDC has daily contact and coordination of

activities and implementation of policies with the Great Lakes Pilotage

Authority, Ltd. and the Canadian Seaway authority. In this respect, the

SLSDC is experienced in, and well suited to, the role of negotiator on

pilotage matters with the Canadian government.

Some commenters stated that out of the 12 or so reviewers of rate

adjustments, the SLSDC is the one agency that consistently opposed rate

adjustments and was responsible for slowing down or halting the

process. The Department, however, has found the opposite to be true.

The Department has checked its records for the last seven years, the

time during which a rulemaking data base has been kept, and, in that

time period, the SLSDC has

[[Page 63447]]

not opposed rate adjustments or been responsible for slowing down or

halting the process.

Some commenters declared that only the Coast Guard has pilotage

expertise such as the experience to determine who is qualified to be a

registered pilot. We are aware, too, that the Inspector General of the

Department has sent a letter to Congressman David Obey, claiming that

the SLSDC has no experience or expertise in many, if not all, of the

responsibilities to be transferred. (The Inspector General also has

raised this concern in the Department's coordination of the interim

final rule.) The pilotage expertise resides in the Coast Guard's Great

Lakes Pilotage Staff (the Staff), which is comprised of the Director of

Great Lakes Pilotage, a Transportation Specialist who serves as the

Assistant Director, and an Economist; the Staff and, thus, the

expertise will transfer in its entirety to the SLSDC when the functions

are transferred. Those who are executing the Great Lakes pilotage

program now, including enforcement of the Act, will continue to do so

after the transfer.

The Staff will continue to operate in the SLSDC in the same manner

in which it has operated in the Coast Guard. In preparation for the

upcoming winter meetings of the three pilot associations, the Director

of Great Lakes Pilotage has written to each of the association

presidents to make them aware of pilotage issues that he would like to

discuss. In each letter, the Director stated that he would like to

reach an agreement on how the process can be improved. ``Identifying

the areas where we need better procedures is beneficial to the system

and the goals of safety. In the spirit of partnership, I hope we can

improve the process together.'' These same goals are transferring to

the SLSDC with the Director.

Moreover, since shortly before its transfer to the NMC in July

1995, the Staff has performed its Great Lakes pilotage responsibilities

without receiving any specialized Coast Guard support to enable the

Staff to perform these responsibilities better. It is not clear,

therefore, why some believe that the expertise will suddenly evaporate

when the Staff is transferred to the SLSDC. Furthermore, the SLSDC

itself has developed an expertise in pilotage issues; it has directed

vessel traffic in the Seaway system for decades and in so doing has

substantial experience in dealing with pilots and pilotage matters. To

the extent the Coast Guard has some special expertise necessary for a

particular matter, the Staff can obtain Coast Guard support regardless

of where the Staff is located.

Some commenters questioned Department statements that the current

Director of Great Lakes Pilotage has ten years of experience in Great

Lakes Pilotage issues. The person who is the current Director became

the Assistant Chief of the Coast Guard's Merchant Vessel Personnel

Division in January 1985. As Assistant Chief, the Coast Guard's

Pilotage Staff reported to him, and he was involved in every major

pilotage policy decision. Since the function was moved from Cleveland

to Washington, DC in 1990, he has been the alternate Director of Great

Lakes Pilotage, that is, the person acting as Director in the latter's

absence. In 1994, he assumed his present duties as Director of Great

Lakes Pilotage. In addition, his career includes over 20 years of

experience as a merchant marine officer, an officer in charge of U.S.

naval vessels, navigation and seamanship instructor at the U.S. Naval

Academy, and head of the Navigation Department at the Maritime

Institute of Technology and Graduate Studies, an advanced school

operated by the International Organization of Masters, Mates and

Pilots. The Assistant Chief of the Pilotage staff also has many years

of experience as a merchant marine officer, has commanded a vessel, and

is a licensed first class pilot on the Great Lakes.

Some commenters asked what the relationship would be between the

Coast Guard and the SLSDC after the transfer of delegation of pilotage

functions. The Department expects the Coast Guard and SLSDC to continue

their current strong relationship of cooperation and coordination.

Concerning pilotage on the Great Lakes, the Coast Guard will continue

to perform the functions of evaluating, testing, grading, issuing and

upgrading pilot licenses, investigating accidents and other

infractions, and suspending or revoking pilot licenses. The SLSDC will

perform all other functions related to Great Lakes registered pilots.

The Coast Guard and SLSDC will enter into a Memorandum of Agreement

(MOA) to ensure coordination and cooperation between the parties.

One commenter argued that giving SLSDC the authority to enter into,

revise, or amend arrangements with Canada with respect to pilotage

rates, which until now has been reserved to the Secretary, may cost

U.S. jobs as a bargaining tool to extract concessions from Canada on

Seaway tolls. The Department disagrees. The transfer of the delegation

of authority does not affect pilotage jobs, pay, or working conditions,

increase hours of service, or impact adversely on safety or the

environment. There is no connection between negotiations with Canada on

Seaway tolls and on pilotage rates. Pilotage rates are now set in

accordance with the published methodology; because rules setting

pilotage rates generally are significant, Department policy requires

that they be coordinated with and cleared through several Department

offices and agencies before negotiations with Canada begin. Those

negotiations were routinely conducted in the past by Coast Guard staff

in Cleveland with no involvement by the Office of the Secretary or any

of the other Department agencies. Under this delegation, the

Secretary's authority to enter into, revise, or amend arrangements with

Canada must be coordinated by SLSDC with the General Counsel of the

Department, in the Office of the Secretary.

That same commenter averred that the May 1972 Great Lakes Pilotage

Review by the Department said that the significant policy leadership

and review function must be retained by the Office of the Secretary.

Policy review and oversight of pilotage is so retained. The Secretary

is transferring one of his responsibilities from one agency that

reports to him (the Coast Guard) to another (the SLSDC). He is not

abrogating his responsibilities. The pilotage functions and personnel

positions created to carry them out are designed to ensure that those

responsibilities will be fully met. The individuals who occupy the

positions must meet the requirements and qualifications demanded of

those positions, irrespective of the agency in which they reside.

The same commenter claimed that it is the layers of review by the

Office of the Secretary (OST), not the size of the Coast Guard or

negotiations with Canada, that have created the less than timely

attention to pilotage issues and less than timely rate adjustments.

Again, the Department disagrees. Coordination by OST allows review

among interested Department elements. This review is necessary in the

Department's decision-making process. The Department's experience shows

that OST review has not caused unreasonable delay. Furthermore, there

are no ``layers of review;'' review by OST and other interested

elements is accomplished in one step and the document is then sent to

the Secretary for approval.

On the other hand, there can be multiple layers of review in

Department agencies before a document is submitted to OST for

coordination. Although approvals can take varying amounts of

[[Page 63448]]

time, the Department has no doubt that the SLSDC, with a short review

process, will be able to give more timely attention to pilotage issues

and make more timely rate adjustments than would the Coast Guard,

including the NMC. In addition, a transfer to the SLSDC would guarantee

that there would always be a civilian Director of Great Lakes Pilotage.

Some commenters believe that the transfer should not take place

during the busiest part of the shipping season, i.e., November and

December. These commenters indicated that a transfer at this time will

disrupt pilotage operations. They cited the Final Report, which says

that a target date for the transfer of March 31 is believed to be

necessary to minimize disruption to the operation of the pilotage

pools. If the Working Group believed that there would have been

disruption had the transfer taken place in April, the commenters

argued, how could there not be disruption to the operation of the

pilotage pools during the height of the shipping season?

The Department expects no disruption to pilotage operations,

notwithstanding the position of the Working Group. The transfer does

not in any way represent a shift in pilotage policies or operations. It

only affects the internal delegation of responsibilities within the

Department. There should be no negative effect on pilotage service.

This rule will not change the pilotage rules and the manner in which

they are administered, make the pilots employees of the SLSDC, or

change the status or organizational structure under which the pilots

now function. As it is with the Coast Guard, pilotage safety will

remain the paramount concern of the SLSDC and will not become secondary

to economic considerations. Since the Great Lakes Pilotage Staff is

transferring with the functions, the only expected change is that the

phone numbers for the Great Lakes Pilotage Staff will change. The new

phone numbers will be widely distributed, and will not cause a

disruption to pilotage operations.

The DOT restructuring, if it occurs, will not remove Great Lakes

pilotage from Federal government oversight. The Administrator will

always exercise authority over Great Lakes pilotage under a delegation

from the Secretary of Transportation and his successors. The transfer

would not compromise the Secretary's ability to intervene in pilotage

issues should that become necessary. Even if the SLSDC were to become

separate from the Department, the legislation proposed by the

Administration to accomplish this would provide for continued

delegation of Secretarial authority to the SLSDC. The SLSDC would also

remain a wholly-owned Federal government agency. The proposed

legislation, in pertinent part, reads as follows:

(b) Section 1 of the Act of May 13, 1954, Public Law 358 (33

U.S.C. 981), as amended, is amended to read as follows:

``(a) There is hereby created a body corporate to be known as

the Saint Lawrence Seaway Development Corporation (hereinafter

referred to as the 'Corporation').

``(b) The Secretary of Transportation may delegate his or her

authority to the Administrator as the Secretary deems appropriate or

as directed by law.''

Thus the Secretary's ability to intervene would continue. If the

legislation is enacted, the manner in which the Secretary's oversight

of Great Lakes pilotage would be carried out would be set forth in a

document to be published in the Federal Register.

In a ``voice mail'' communication from counsel for the SLSPA to an

OST staff attorney, an additional argument against the transfer was

posed. A memorandum concerning this communication has been entered into

the docket. SLSPA's counsel points out that the Great Lakes Pilotage

Act is set forth in section 46 of the United States Code (U.S.C.),

which contains the following definition at 46 U.S.C. 2101:

(34) ``Secretary'', except in part H, means the head of the

department in which the Coast Guard is operating.

Since Great Lakes Pilotage is contained in Part F, this definition

of ``Secretary'' pertains to it. The SLSPA maintains that whatever

Congress intended to reside within the Coast Guard is contained within

Title 46 under this definition and that, therefore, this transfer to

the SLSDC would be in contravention of Congressional intent.

Three Members of Congress submitted to the Secretary the House

Report for the legislation that defines ``Secretary.'' The report

states: `` `Section 2101(34) defines `Secretary' so that maritime

safety and seamen's welfare jurisdiction remains within the Coast Guard

at all times.'' They also refer to 46 U.S.C. 2104(a), which states that

``[t]he Secretary may delegate the duties and powers conferred by this

subtitle [which includes Great Lakes pilotage] to any officer,

employer, or member of the Coast Guard * * *.'' The Congressmen

conclude that the House Report and the statutory section concerning

delegation ``appear to confirm Congress's determination that [Great

Lakes pilotage functions] reside with the Coast Guard.''

The definition of ``Secretary,'' which is clear on its face, does

not change with the transfer of pilotage authority to the SLSDC. The

Secretary of Transportation is still the head of the Department in

which the Coast Guard is operating. Upon declaration of war or when the

President directs, the Coast Guard would operate in the Navy (14 U.S.C.

3). In that event, the Secretary of Defense would be the head of the

Department in which the Coast Guard is operating. (N.B.: even during

the Vietnam War and the Persian Gulf War, the Coast Guard remained part

of the Department of Transportation.) The House Report explanation is

not the statutory definition. Even if it were the statutory definition,

it says that maritime safety is to remain in the Coast Guard at all

times. While many of the 11 functions to be transferred have safety

ramifications, they are still essentially economic. The House Report

language did not address where functions should reside that fall

outside the parameters of maritime safety and seamen's welfare

jurisdiction.

That Congress did not intend that all statutory authority that

comes under the above-cited definition of Secretary reside in the Coast

Guard is demonstrated by the Port and Tanker Safety Act of 1978. That

Act contains the following definition at 33 U.S.C. 1222:

(2) ``Secretary'' means the Secretary of the department in which

the Coast Guard is operating.

Nevertheless, that Act also states that certain authority granted

to the Secretary shall not be delegated to any agency other than the

Saint Lawrence Seaway Development Corporation (33 USC 1229). Thus,

Congress envisioned a situation in which authority residing within the

``Department in which the Coast Guard is operating'' not only could be

delegated to an agency within the Department of Transportation that was

not the Coast Guard, but must not be delegated to the Coast Guard.

Moreover, by this language, Congress has also demonstrated that, when

it intends for authority to remain within one agency and not be

delegated elsewhere, it will so state.

Furthermore, had Congress desired that the Great Lakes pilotage

function remain solely within the Coast Guard, it could have given the

authority directly to the Commandant instead of the Secretary. By

contrast, in other circumstances, Congress has given authority, not

first to the Secretary to be delegated, but directly to the Federal

Aviation Administrator and to the Federal Highway Administrator. For

example, the Intermodal Surface Transportation Efficiency Act of 1991

[[Page 63449]]

(section 6016) directs the Federal Highway Administrator to conduct

certain studies, while legislation concerning nationality and ownership

of aircraft as well as safety regulation of civil aeronautics gives

authority to the Federal Aviation Administrator (49 U.S.C. 44101 et

seq.; 49 U.S.C. 44701 through 44717, 44720 through 44722). (N.B.:

Within the safety regulation chapter, three sections, 49 U.S.C. 44718,

44719, and 44723, set forth requirements for the Secretary.)

Moreover, the Department of Transportation Act (Public Law 89-670,

1966) (DOT Act), which created the Department, specifically authorized

the Federal Railroad Administrator and the Federal Highway

Administrator to carry out certain functions, powers, and duties of the

Secretary (section 6(f) (3)(A) and (3)(B)). Unlike 46 U.S.C. 2104(a),

which states that the Secretary ``may'' delegate duties and powers to

any officer, employee, or member of the Coast Guard, the DOT Act stated

that the Federal Railroad and Highway Administrators ``shall'' carry

out the functions, duties, and powers of the Secretary. In addition,

the DOT Act did not authorize the Commandant of the Coast Guard to

carry out the functions, powers, and duties of the Secretary regarding

Great Lakes pilotage. On the contrary, the DOT Act, which transferred

the Coast Guard to the Department, also transferred to, and vested in

the Secretary, the functions, powers, and duties relating to the Coast

Guard (section 6(b)(1)).

In a formal comment to the docket, the SLSPA also argued that the

interim final rule violated the notice and comment requirements of the

APA. It asserted that the statutory exemption from the notice and

comment requirements does not extend to ``any action which goes beyond

formality and substantially affects the rights of those over whom the

agency exercises authority.'' [citation omitted.] The SLSPA concluded

that since this rule affects timeliness and, therefore, substantially

affects the rights of pilots, the exemption does not apply. It pointed

to the timely adjustments to pilotage rates as demonstrating the effect

of the rule on the rights of pilots. It contended that the Department

failed to provide a concise general statement of its basis and purpose,

as required by the APA, and that no explanation was offered for

overturning a regulation that ``has been in place since DOT was

established in 1967.''

The Department disagrees. If the Department were to accept SLSPA's

argument that, since the rule affects timeliness and, therefore,

substantially affects the rights of pilots, all delegations of

authority would have to be published for notice and comment. One of the

paramount reasons for delegations is to reduce delays by eliminating

needless work at the top levels. All delegations, therefore, can affect

timeliness. Moreover, requesting public comment on delegations of

authority is not required by the APA. 5 U.S.C. 553(b)(3)(A) states that

the notice and comment requirements of the APA do not apply to rules of

agency organization, procedure, or practice.

The Department, therefore, disagrees with SLSPA's contention that

notice and comment are required for this delegation. In its discretion,

however, the Department did offer a 60-day comment period; it even

suspended the effectiveness of the interim final rule to allow the

Department additional time to consider all the issues raised in the

comments.

The Department disagrees with the SLSPA's APA argument that the

Department did not provide a concise general statement of its basis and

purpose and did not offer an explanation for overturning a regulation

that had been in place since the Department was established. Putting

aside the question of whether a concise general statement is even

required, the Department provided one. The interim final rule stated

that the transfer of responsibilities from the Coast Guard to the SLSDC

``will place pilotage under permanent civilian authority, and placing

pilotage in a smaller organization with an established presence on the

Great Lakes will give pilotage issues greater visibility and more

timely attention. In addition, SLSDC is being given authority to

negotiate directly with Canada, which will allow timely adjustments to

pilotage rates.'' This statement contains the Department's basis and

purpose for the change. A small SLSDC, when compared with the Coast

Guard in general or even the NMC within the Coast Guard, will be able

to give more timely attention to pilotage issues and make more timely

rate adjustments.

Many commenters opposed to the transfer claimed that they were

given no opportunity to have input into the process and therefore the

interim final rule is invalid. The Department disagrees. As we have

demonstrated earlier, a comment period is not required by the APA.

Nevertheless, because of public and Congressional interest in Great

Lakes pilotage, the Department took the extraordinary step of providing

an opportunity for public comment on this rule and provided 60 days for

the receipt of public comment. In accordance with its published

procedures, the Department even accepted comments after the 60 days had

elapsed. The Department, thus, has provided ample opportunity for

public input and has thoroughly considered that input before issuing

this rule.

Several commenters, however, requested that the Department hold a

public hearing. Even with respect to rulemakings for which notice and

comment are required, which this rulemaking is not, the APA gives the

agency discretion to hold a public hearing or not. ``[T]he agency shall

give interested persons an opportunity to participate in the rulemaking

. . . with or without the opportunity for oral presentation.'' (5

U.S.C. 553(c).). By allowing interested persons to submit written

views, the Department has provided the public with a greater

opportunity to participate in a rule of agency organization, procedure,

or practice than the APA requires. Moreover, in addition to providing

the 60-day comment period, representatives from the Great Lakes

Pilotage Staff and the SLSDC participated in a February 9, 1995,

meeting in Chicago, organized by the Great Lakes Shipping Association,

which represents vessel owners engaged in the international Great Lakes

trades. Also in attendance were representatives from the three Great

Lakes pilot associations and a large number of other industry

representatives. At that meeting, the Staff and SLSDC representatives

responded to questions from pilots and others for several hours

concerning the possibility of a transfer.

In addition, during the winter of 1994-95, the Staff also met with

the three pilot associations and presented to each of them a draft of

the ``St. Lawrence Seaway Development Corporation Pilotage Concept,''

which included the SLSDC's 1995 plan. The plan comprised the SLSDC's 5-

year performance goals, its 3-to-5-year business focus, and its 5-to-

15-year strategic goals. The document emphasized the importance of the

pilotage program and the SLSDC's role in the program, when it said,

``[t]he mission of the Great Lakes Pilotage Program is to protect the

public, the environment, and the economic interests of foreign trade

shippers by assuring that their vessels are safely navigated by

competent and qualified U.S. registered pilots.'' Although the Staff

orally requested that the associations provide reaction to this

document, none was forthcoming.

In light of the many opportunities that the pilots have had to

voice their opinions about the transfer and the exhaustive public

record before the

[[Page 63450]]

Department, the Department concludes that holding a public hearing

would not result in the presentation of additional or different

information from what has already been submitted.

The Department stated in the interim final rule that it would

consider any new matters presented and make changes if warranted. The

Department has carefully considered all comments presented and

concludes that no revisions to the interim final rule are warranted.

Accordingly, the Department affirms, without change, the interim final

rule.

A final rule redesignating those portions of the Coast Guard's

Great Lakes Pilotage Regulations that are necessary for SLSDC to carry

out its responsibilities under the Act will be published in the Federal

Register shortly.

List of Subjects in 49 CFR Part 1

Authority delegations (Government agencies), Organizations and

functions (Government agencies).

Accordingly, 49 CFR part 1 is amended as follows:

PART 1--[AMENDED]

1. The authority citation for part 1 continues to read as follows:

Authority: 49 U.S.C. 322; Pub. L. 101-552, 28 U.S.C. 2672, 31

U.S.C. 3711(a)(2).

Sec. 1.46 [Removed]

2. Section 1.46(a) is removed and reserved.

3. Section 1.52 is amended by adding a new paragraphs (d) and (e)

to read as follows:

Sec. 1.52 Delegations to Saint Lawrence Seaway Development Corporation

Administrator.

* * * * *

(d) Carry out the Great Lakes Pilotage Act of 1960, as amended, (46

U.S.C. 9301 et seq.).

(e) Under the 1977 Memorandum of Arrangements with Canada and the

Great Lakes Pilotage Act of 1960, as amended in 1983 (46 U.S.C. 9305),

enter into, revise, or amend arrangements with Canada in coordination

with the General Counsel.

Issued at Washington, DC, this 5th day of December 1995.

Federico Pena,

Secretary of Transportation.

[FR Doc. 95-30081 Filed 12-8-95; 8:45 am]

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