December 4, 2009 

VIA ELECTRONIC SUBMISSION

Admiral Thad W. Allen 

Commandant of the U.S. Coast Guard 

2100 Second Street, SW 

Washington, DC 20593 

Re: Notice of Proposed Rulemaking, “Standards for Living Organisms in Ships’ 

Ballast Water Discharged in U.S. Waters”, USCG-2001-10486.1

Dear Admiral Allen: 

 

The Office of Advocacy of the U.S. Small Business Administration (Advocacy) is 

pleased to submit these comments to the U.S. Coast Guard regarding its proposed 

Standards for Living Organisms in Ships’ Ballast Water Discharged in U.S. Waters. 

Advocacy appreciates the efforts the Coast Guard has made to analyze the impact that the 

proposed standards will have on small entities and offers these comments to further assist 

the Coast Guard in developing a regulation that accomplishes the Coast Guard’s 

objectives while providing regulatory flexibility for the small business affected by the 

rule. 

Office of Advocacy

Advocacy was established pursuant to Pub. L. 94-305 to represent the views of small 

entities before federal agencies and Congress. Advocacy is an independent office within 

SBA, so the views expressed by Advocacy do not necessarily reflect the views of the 

SBA or the Administration. The Regulatory Flexibility Act (RFA),2 as amended by the 

Small Business Regulatory Enforcement Fairness Act (SBREFA),3

 gives small entities a 

voice in the rulemaking process. For all rules that are expected to have a significant 

economic impact on a substantial number of small entities, federal agencies are required 

by the RFA to assess the impact of the proposed rule on small business and to consider 

less burdensome alternatives. 

Background

On August 28, 2009 the Coast Guard published a proposed rule amending its regulations 

on ballast water management by establishing standards for the allowable concentration of 

 

1

 74 Fed. Reg. 44632 (August 28, 2009). 2

 5 U.S.C. § 601 et seq. 

3

 Small Business Regulatory Enforcement Fairness Act of 1996, Pub. L. 104-121, Title II, 110 Stat. 857 

(1996) (codified in various sections of 5 U.S.C. § 601 et seq.) (SBREFA). 
2 

living organisms in ships’ ballast water discharged in U.S. waters.4

 The proposed rule’s 

purpose is to aid Coast Guard’s efforts to manage the introduction and spread of nonindigenous and invasive species into U.S. waters. The Coast Guard’s current regulations 

for the management of ballast water discharge require that all vessels equipped with 

ballast water tanks and bound for ports or places of the United States conduct a midocean ballast water exchange (BWE), retain their ballast water on board, or use another 

Coast Guard approved ballast water management method (BWM). 

In lieu of BWE, the Coast Guard’s proposed regulations establish a two-phased ballast 

water discharge standard (BWDS) for concentration of living organisms that can be 

discharged in ballast water and establish an approval process for ballast water 

management systems (BWMS) intended for use on board vessels to meet the proposed 

discharge standard. Vessels with a 1500-5000 cubic meter ballast capacity constructed 

before January 1, 2012 must be in compliance with the phase-one standard by their first 

dry-docking after January 1, 2014. All other vessels must be in compliance with the 

phase-one standard by their first dry-docking after January 1, 2016. The phase-two 

standard may or may not be implemented following a practicability review in early 2013, 

and every three years following. The phase-two standard includes a grandfather clause 

for vessels that install technology meeting the phase-one standard before January 1, 2016. 

Advocacy’s Comments

Following the publication of the proposed rule, small businesses within the tug boat, tow 

boat, and supply barge industries contacted Advocacy to express their concerns regarding 

the impact of the proposed rule on their industries. These small businesses are concerned 

that the Coast Guard’s economic analysis does not account for a significant number of 

vessels operated by their businesses. These firms also contend that installing the required 

BWMS will not be economically feasible for the large number of vessels that discharge 

relatively small amounts of ballast water. Furthermore, small businesses are especially 

concerned about the cumulative effect of the proposed regulations should the phase-two 

standards be implemented without a longer grandfathering period than the five year 

period proposed. Advocacy submits the following recommendations for the Coast 

Guard’s consideration in light of the concerns expressed by small businesses. 

Expand the scope of regulatory flexibility analysis to include more vessels 

Pursuant to the RFA, the Coast Guard has prepared and published an Initial Regulatory 

Flexibility Analysis (IRFA) for this proposed rule. The IRFA concludes that seventy-two 

percent of small firms affected by the rule would incur an annual cost impact ranging 

between 10% and 29% of revenue over ten years5

; however, the regulatory impact 

analysis prepared for the rule assumes that vessels less than 100 feet in length, as well as 

tugboats, as well as river vessels, generally do not carry ballast water6. Advocacy has 

spoken with small business representatives in the tugboat, towing and supply vessel 

 

4

 Supra note 1. 5

 U.S. Coast Guard, Standards for Living Organisms in Ships’ Ballast Water Discharged in U.S. Waters, 

Preliminary Regulatory Analysis and Initial Regulatory Flexibility Analysis, 108; available at 

www.regulations.gov (Docket ID USCG-2001-10486). 6

 Id. at 37. 
3 

 

industries who assert that many of the vessels listed above do in fact carry ballast water. 

Additionally, some small business representatives assert that installing BWMS on such 

small vessels would be cost-prohibitive and would not significantly contribute to the 

Coast Guard’s efforts to manage invasive species. In some cases, it may be the case that 

the BWMS are more costly than the vessels on which they would be installed.7

 To fully 

comply with the RFA, the Coast Guard must expand the scope of its RFA analysis to 

include the vessels listed above before promulgating a final rule, and then consider 

further regulatory alternatives in light that analysis. 

Consider additional regulatory alternatives to increase flexibility for small businesses 

Small businesses have indicated to Advocacy that many of the small vessels engaged in 

the tugboat, towing and supply vessel industries carry only municipal water in their 

ballast tanks. Municipal water has not been shown to contribute to the spread of invasive 

species in U.S. waterways. Given that installing costly ballast water treatment systems 

on these vessels may not offer significant environmental benefits, Advocacy urges the 

Coast Guard to craft an exemption for vessels that use only municipal water in their 

ballast tanks. Such an exemption could provide substantial cost-saving for small 

businesses without impeding the Coast Guard’s efforts to manage invasive species. 

Additionally, it has been brought to Advocacy’s attention that small towing and supply 

vessels may contribute to only a fraction of the entire volume of ballast water discharged 

in U.S. waters. The Coast Guard’s regulatory analysis states that average ballast water 

capacity for vessels affected by the rule ranges between 17,000 cubic meters and 215,000 

cubic meters; however, Advocacy has learned that ballast capacity of a typical inland 

towboat ranges between 70 cubic meters and 140 cubic meters.8

 Given this information, 

Advocacy urges the Coast Guard to examine the relative benefits of requiring ballast 

water management systems for vessels with such low-volume ballast tanks. If the Coast 

Guard finds that ballast water treatment for these vessels does not provide a significant 

environmental benefit compared to the current practice of ballast water exchange, or that 

requiring ballast water treatment systems on such small vessels is not economically 

practicable, the Coast Guard should consider crafting an exemption for vessels with 

relatively low-volume ballast tanks. 

Include a grandfathering provision with the phase-two standards

The Coast Guard has tentatively proposed to implement its phase-two standard setting the 

allowable limits for living organisms in ballast water following a practicability review in 

2013. The Coast Guard has proposed a five year grandfathering provision for those 

vessels that comply with the phase-one standard prior to January 1, 2016. Advocacy 

strongly urges the Coast Guard to retain this grandfathering provision, without the fiveyear limit. Advocacy urges the Coast Guard to adopt a grandfathering provision that 

would apply for the life of a typical ballast water treatment system. 

7

 See public comments from The American Waterways Operators, dated December 4, 2009, page 6 

(asserting that the cost of an inland barge is, in some cases, approximately half the cost of an average 

ballast water treatment system). 

8

 Id.
4 

As discussed earlier in these comments, and in the Coast Guard’s IRFA, installing ballast 

water treatment systems to comply with the phase-one standards will be extremely costly 

for small businesses, and not even practicable for certain small operations. Requiring 

businesses to upgrade their systems within a five-year period would be extremely 

burdensome for small businesses that will likely still be servicing the debt incurred to 

purchase the phase-one ballast water treatment systems. Additionally, a five year 

grandfathering provision could have the perverse effect of incentivizing businesses to 

refrain from complying with the phase-one standards and wait for implementation of the 

phase-two standards before installing ballast water treatment systems. At the very least, 

the Coast Guard should not place a time limit on its grandfathering provision until it is 

able to assess the potential costs associated with upgrading technology to meet the phasetwo standards. 

Conclusion

Advocacy appreciates the efforts of the Coast Guard to assess the impact of its proposed 

ballast water discharge standards and looks forward to assisting the Coast Guard in 

further developing its analysis to include small tugboats, tow boats and supply vessels. 

Once the Coast Guard has more thoroughly assessed the economic impact of its proposed 

standards on these small businesses, Advocacy strongly urges the Coast Guard to 

examine possible exemptions for vessels that carry only municipal water as well as for 

vessels with low-volume ballast tanks. Finally, should the Coast Guard implement a final 

rule including its phase-two ballast water discharge standards, Advocacy strongly urges 

the Coast Guard to consider including a grandfathering provision that provides adequate 

flexibility for small businesses. Please do not hesitate to contact me or Jamie Belcore 

Saloom at (202) 205-6890 or Jamie.Belcore@sba.gov should you have any questions. 

Sincerely, 

 //signed// 

Susan M. Walthall 

Acting Chief Counsel for Advocacy 

//signed// 

Jamie Belcore Saloom 

Assistant Chief Counsel for Advocacy 

cc: The Honorable Cass Sunstein, Administrator, Office of Information and Regulatory Affairs 

 Bruce Berkeley, Office of the General Counsel, Department of Homeland Security