Federal Register / Vol. 83, No. 121 / Friday, June 22, 2018 / Proposed Rules 29067 

Class E airspace designations are 

published in Paragraph 6005 of FAA 

Order 7400.11B, dated August 3, 2017, 

and effective September 15, 2017, which 

is incorporated by reference in 14 CFR 

71.1. The Class E airspace designation 

listed in this document will be 

published subsequently in the Order. 

Regulatory Notices and Analyses 

The FAA has determined that this 

proposed regulation only involves an 

established body of technical 

regulations for which frequent and 

routine amendments are necessary to 

keep them operationally current. It, 

therefore: (1) Is not a ‘‘significant 

regulatory action’’ under Executive 

Order 12866; (2) is not a ‘‘significant 

rule’’ under DOT Regulatory Policies 

and Procedures (44 FR 11034; February 

26, 1979); and (3) does not warrant 

preparation of a Regulatory Evaluation 

as the anticipated impact is so minimal. 

Since this is a routine matter that will 

only affect air traffic procedures and air 

navigation, it is certified that this 

proposed rule, when promulgated, will 

not have a significant economic impact 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

Environmental Review 

This proposal will be subject to an 

environmental analysis in accordance 

with FAA Order 1050.1F, 

‘‘Environmental Impacts: Policies and 

Procedures’’ prior to any FAA final 

regulatory action. 

Lists of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

The Proposed Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

proposes to amend 14 CFR part 71 as 

follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for part 71 

continues to read as follows: 

Authority: 49 U.S.C. 106(f), 106(g); 40103, 

40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 

1959–1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of Federal Aviation 

Administration Order 7400.11B, 

Airspace Designations and Reporting 

Points, dated August 3, 2017, and 

effective September 15, 2017, is 

amended as follows: 

Paragraph 6005 Class E Airspace Areas 

Extending Upward From 700 Feet or More 

Above the Surface of the Earth. 

* * * * * 

ASO AL E5 Bloomsburg, PA [Amended] 

Bloomsburg Municipal Airport, PA 

(Lat. 40°59′52′′ N, long. 76°26′07′′ W) 

That airspace extending upward from 700 

feet above the surface within an 11.8-mile 

radius of Bloomsburg Municipal Airport. 

Issued in College Park, Georgia, on June 14, 

2018. 

Ken Brissenden, 

Acting Manager, Operations Support Group, 

Eastern Service Center, Air Traffic 

Organization. 

[FR Doc. 2018–13371 Filed 6–21–18; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 105 

[Docket No. USCG–2017–0711] 

RIN 1625–AC47 

TWIC—Reader Requirements; Delay of 

Effective Date 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes 

delaying the effective date for certain 

facilities affected by the final rule 

entitled ‘‘Transportation Worker 

Identification Credential (TWIC)— 

Reader Requirements,’’ published in the 

Federal Register on August 23, 2016. 

The current effective date for the final 

rule is August 23, 2018. The Coast 

Guard proposes delaying the effective 

date for two categories of facilities: 

Facilities that handle certain dangerous 

cargoes in bulk, but do not transfer these 

cargoes to or from a vessel, and facilities 

that receive vessels carrying certain 

dangerous cargoes in bulk, but do not, 

during that vessel-to-facility interface, 

transfer these bulk cargoes to or from 

those vessels. The Coast Guard proposes 

delaying the effective date for these two 

categories of facilities by 3 years, until 

August 23, 2021. Other vessels and 

facilities, including facilities that 

receive large passenger vessels and 

facilities regulated under 33 CFR 

105.295 that handle certain dangerous 

cargoes in bulk and transfer it to or from 

a vessel, would be required to comply 

with the final rule by August 23, 2018. 

DATES: Comments and related material 

must be received by the Coast Guard on 

or before July 23, 2018. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2017–0711 using the Federal 

eRulemaking Portal at http://

www.regulations.gov. See the ‘‘Public 

Participation and Request for 

Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section of 

this notice of proposed rulemaking for 

further instructions on submitting 

comments. 

FOR FURTHER INFORMATION CONTACT: For 

information about this document, call or 

email LCDR Yamaris Barril, Coast Guard 

CG–FAC–2; telephone 202–372–1151, 

email Yamaris.D.Barril@uscg.mil. 

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble 

I. Public Participation and Request for 

Comments 

II. Abbreviations 

III. Regulatory History 

IV. Background 

A. Electronic TWIC Inspection 

B. Coast Guard Analysis and the Homeland 

Security Institute (HSI) Report 

C. Summary of Methodology Used in the 

TWIC Rulemaking 

D. Petition for Rulemaking and Identified 

Weaknesses 

V. Discussion of the Proposed Rule to Delay 

the Effective Date 

VI. Regulatory Analysis 

A. Regulatory Planning and Review 

B. Small Entities 

C. Assistance for Small Entities 

D. Collection of Information 

E. Federalism 

F. Unfunded Mandates Reform Act 

G. Taking of Private Property 

H. Civil Justice Reform 

I. Protection of Children 

J. Indian Tribal Governments 

K. Energy Effects 

L. Technical Standards 

M. Environment 

I. Public Participation and Request for 

Comments 

The Coast Guard views public 

participation as essential to effective 

rulemaking and will consider all 

comments and material received during 

the comment period. Your comment can 

help shape the outcome of this 

rulemaking. If you submit a comment, 

please include the docket number for 

this rulemaking, indicate the specific 

section of this document to which each 

comment applies, and provide a reason 

for each suggestion or recommendation. 

We encourage you to submit 

comments through the Federal 

eRulemaking Portal at http://

www.regulations.gov. If your material 

cannot be submitted using http://

www.regulations.gov, contact the person 

in the FOR FURTHER INFORMATION

CONTACT section of this notice of 

proposed rulemaking for alternate 


daltland on DSKBBV9HB2PROD with PROPOSALS
29068 Federal Register / Vol. 83, No. 121 / Friday, June 22, 2018 / Proposed Rules 

1Public Law 107–295, 116 Stat. 2064 (November 

25, 2002). 

2Public Law 109–347, 120 Stat. 1884, 1889 

(October 13, 2006). 

3See 46 U.S.C. 70105(k)(3). 

4 71 FR 29396 (May 22, 2006). 

5 72 FR at 3492 (January 25, 2007). 

6The SAFE Port Act required DHS to conduct a 

pilot program to test the business processes, 

technology, and operational impacts of TWIC 

readers in the maritime environment, and to issue 

regulations that require the deployment of TWIC 

readers that are consistent with the findings of the 

pilot program. See 46 U.S.C. 70105(k)(1) and (3). 

7 74 FR 13360 (March 27, 2009). 

8 78 FR 17782 (March 22, 2013). 

9 81 FR 57652. 

10See Docket number USCG–2017–0447, 

available at www.regulations.gov. 

instructions. Documents mentioned in 

this notice of proposed rulemaking, and 

all public comments, will be available 

in our online docket at http://

www.regulations.gov, and can be viewed 

by following that website’s instructions. 

Additionally, if you go to the online 

docket and sign up for email alerts, you 

will be notified when comments are 

posted or a final rule is published. 

We accept anonymous comments. All 

comments received will be posted 

without change to http://

www.regulations.gov and will include 

any personal information you have 

provided. For more information about 

privacy and the docket, visit http://

www.regulations.gov/privacyNotice. 

II. Abbreviations 

AHP Analytic Hierarchy Process 

ANPRM Advanced notice of proposed 

rulemaking 

BLS U.S. Bureau of Labor Statistics 

CDC Certain Dangerous Cargoes 

DHS Department of Homeland Security 

ECI Employment Cost Index 

FR Federal Register 

HSI Homeland Security Institute 

MSRAM Maritime Security Risk Analysis 

Model 

MTSA Maritime Transportation Security 

Act of 2002 

NPRM Notice of proposed rulemaking 

OMB Office of Management and Budget 

SAFE Port Act Security and Accountability 

for Every Port Act of 2006 

SME Subject matter expert 

§ Section symbol 

TSA Transportation Security 

Administration 

TSI Transportation Security Incident 

TWIC Transportation Worker Identification 

Credential 

U.S.C. United States Code 

III. Regulatory History 

Pursuant to the Maritime 

Transportation Security Act of 2002 

(MTSA),1 and in accordance with 

section 104 of the Security and 

Accountability for Every Port Act of 

2006 (SAFE Port Act),2 Congress 

requires the electronic inspection of 

Transportation Worker Identification 

Credentials (TWIC®) inside secure areas 

on vessels and in facilities in the United 

States. Specifically, the SAFE Port Act 

required that the Secretary promulgate 

final regulations that require the 

deployment of electronic transportation 

security card readers.3 To implement 

this requirement in an effective manner, 

the Coast Guard undertook a series of 

regulatory actions culminating in a 

requirement to implement electronic 

TWIC inspection at certain high-risk 

vessels and facilities regulated under 

MTSA. 

On May 22, 2006, the Coast Guard 

and the Transportation Security 

Administration (TSA) jointly published 

a notice of proposed rulemaking 

(NPRM) entitled ‘‘Transportation 

Worker Identification Credential 

(TWIC) Implementation in the Maritime 

Sector; Hazardous Materials 

Endorsement for a Commercial Driver’s 

License.’’ 4 On January 25, 2007, the 

Coast Guard and TSA published a final 

rule with the same title.5 The 2007 final 

rule established the requirement, among 

others, that all persons allowed 

unescorted access to secure areas in 

MTSA-regulated vessels and facilities 

must possess a valid TWIC. The 2007 

final rule did not, however, mandate 

that the TWIC be read with an electronic 

reader and, as such, allowed for visual 

inspection. Visual inspection does not 

make use of the electronic security 

measures built into the TWIC, such as 

the challenge/response to the TWIC’s 

unique electronic identifier, comparison 

of the credential to the TWIC Cancelled 

Card List, and verification of the 

biometric template stored on the TWIC 

to the individual’s biometrics. 

Although the May 22, 2006, NPRM 

proposed certain TWIC reader 

requirements, after reviewing the public 

comments, the Coast Guard decided not 

to include the proposed TWIC reader 

requirements in the 2007 final rule. 

Instead, the Coast Guard addressed 

TWIC reader requirements in a separate 

rulemaking after conducting a pilot 

program to address the feasibility of 

reader requirements.6 For a detailed 

discussion of the public comments and 

our responses to them, refer to section 

III.B.7 of the 2007 final rule. 

On March 27, 2009, the Coast Guard 

published an advanced notice of 

proposed rulemaking (ANPRM) on the 

topic of TWIC reader requirements.7

The ANPRM discussed dividing vessels 

and facilities into three ‘‘risk groups’’— 

Risk Group A for the high-risk vessels 

and facilities, Risk Group B for mediumrisk vessels and facilities, and Risk 

Group C for low-risk vessels and 

facilities. The ANPRM also considered 

different electronic inspection 

requirements for Risk Groups A and B, 

with no electronic inspection 

requirements for Risk Group C. On 

March 22, 2013, we published an 

NPRM 8 that proposed the three risk 

groups (A, B, and C), but limited the 

proposed electronic TWIC inspection 

requirements to Risk Group A vessels 

and facilities only. 

On August 23, 2016, we published a 

final rule entitled ‘‘Transportation 

Worker Identification Credential 

(TWIC)—Reader Requirements’’ 9

(‘‘TWIC Reader final rule’’) that 

eliminated the three risk group structure 

and required that the high-risk vessels 

and facilities (still referred to as Risk 

Group A) conduct electronic TWIC 

inspection for all personnel seeking 

unescorted access to secure areas of the 

vessel or facility. The TWIC Reader final 

rule becomes effective on August 23, 

2018. On May 15, 2017, we received a 

petition for rulemaking from the 

International Liquid Terminals 

Association and other industry 

groups.10 The rulemaking petition 

requested that we revise the scope of the 

TWIC Reader final rule to impose 

electronic TWIC inspection 

requirements on only those vessels and 

facilities that engage in the maritime 

transfer of certain dangerous cargoes 

(CDCs), and extend the compliance date 

of the TWIC Reader final rule so that 

vessels and facilities do not incur costs 

while the Coast Guard reviews the scope 

of the TWIC Reader final rule. On May 

18, 2017, the Coast Guard opened a 

public docket on www.regulations.gov, 

and acknowledged receipt of the 

rulemaking petition by letter dated May 

25, 2017. The industry’s rulemaking 

petition is discussed in greater detail 

below in section IV.D. 

IV. Background 

In this NPRM, we propose to delay 

the effective date of the TWIC Reader 

final rule, until August 23, 2021, for two 

categories of facilities. The rationale for 

the proposed delay is to consider 

industry input asking us to reconsider 

the scope of the TWIC Reader final rule 

and to re-evaluate the underlying 

methodology used to determine the 

facilities subject to the electronic TWIC 

inspection requirements. For these 

reasons, and to provide appropriate 

context necessary to understand the 

purpose of this NPRM, we have 

included background information in 

this NPRM that details: (1) Why the 

electronic TWIC inspection 

requirements were originally proposed 


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11Each of these ‘‘asset categories’’ describes a 

certain purpose or operational description. For 

example, ‘‘gravel transfer facilities’’ would be 

considered under the same umbrella (i.e., in one 

‘‘asset category’’), rather than as individual 

facilities. 

12Because this NPRM addresses facilities only, 

we have omitted further discussion about 

application of the TWIC program to vessels and 

outer continental shelf facilities (33 CFR parts 104 

and 106, respectively). 

13 ‘‘Secure area’’ is defined in 33 CFR 101.105 as 

‘‘the area onboard a vessel or at a facility or outer 

continental shelf facility over which the owner/ 

operator has implemented security measures for 

access control in accordance with a Coast Guard 

approved security plan. It does not include 

passenger access areas, employee access areas, or 

public access areas, as those terms are defined in 

§§ 104.106, 104.107, and 105.106, respectively, of 

this subchapter. Vessels operating under the 

waivers provided for at 46 U.S.C. 8103(b)(3)(A) or 

(B) have no secure areas. Facilities subject to part 

105 of this subchapter located in the 

Commonwealth of the Northern Mariana Islands 

and American Samoa have no secure areas. 

Facilities subject to part 105 of this subchapter may, 

with approval of the Coast Guard, designate only 

those portions of their facility that are directly 

connected to maritime transportation or are at risk 

of being involved in a transportation security 

incident as their secure areas.’’ 

14See TWIC Reader final rule, section 

105.255(a)(4). 

15Pursuant to existing Coast Guard guidance, 

facilities not included in Risk Group A may use 

electronic inspection in lieu of visual inspection on 

a voluntary basis. See PAC–01–11, ‘‘Voluntary use 

of TWIC Readers,’’ available at https://

homeport.uscg.mil. 

16The definition of ‘‘secure area’’ specifically 

excludes areas like passenger access areas, 

employee access areas, facilities in the 

Commonwealth of the Northern Mariana Islands 

and American Samoa, etc. The TWIC Reader final 

rule imposed no requirements on those types of 

areas. 

17That is, one can create a lookalike of a TWIC 

card, which does not have a working chip or is not 

linked to the TSA database, and it may not be 

detected as a counterfeit card if the card was only 

subject to visual inspection. However, the nonworking chip and lack of connection to the TSA 

database would be detected if the counterfeit card 

were scanned by a TWIC reader, and the reader 

could not confirm the authenticity of the card or 

match it to known card. 

18While the full Coast Guard TWIC Report 

contains sensitive security information, a redacted 

version of the document is available on the public 

Continued 

for certain categories of facilities; (2) the 

Coast Guard’s methodology used to 

analyze risk, including the need to reevaluate that methodology; and (3) the 

related petition for rulemaking we 

received after publication of the TWIC 

Reader final rule. Specifically, we 

examine the two technical reports 

issued in 2008 that explained how we 

would categorize facilities to analyze 

risk, which formed the basis for the 

regulatory framework laid out in the 

2009 ANPRM. Overall, these reports 

provide the foundation for the 

regulatory framework set forth in the 

TWIC reader rulemaking documents. In 

this framework, we first grouped 

individual facilities by ‘‘asset 

categories’’.11 Then, we used certain 

analytical techniques, described below, 

to rank those categories by relative risk, 

creating a linear list of 68 different asset 

categories. Finally, we grouped 

similarly-risked facilities together into 

‘‘Risk Groups,’’ to which different 

regulatory requirements would apply. 

This analysis, with its strengths and 

weaknesses, is discussed below. 

A. Electronic TWIC Inspection 

The TWIC Reader final rule was 

promulgated to fulfill the Congressional 

mandate found in section 104 of the 

SAFE Port Act.12 The SAFE Port Act, 

which required the Coast Guard to 

conduct a pilot program to evaluate the 

effectiveness of TWIC readers and 

promulgate regulations in accordance 

with the findings of that program, led to 

the development of the TWIC reader 

rulemaking. The TWIC Reader final 

rule, the culmination of that rulemaking 

process, required that high-risk facilities 

conduct ‘‘electronic TWIC inspection,’’ 

and mandated security improvements 

above and beyond the existing 

requirements set forth in the 2007 final 

rule that all persons with unescorted 

access to secure areas possess a TWIC. 

Specifically, for high-risk facilities 

called ‘‘Risk Group A facilities,’’ the 

TWIC Reader final rule required that, 

upon each entry into a secure area,13 the 

person requesting entry must present a 

TWIC for electronic inspection before 

that person would be permitted 

unescorted access to the area.14 Other 

MTSA-regulated facilities (i.e., those 

facilities not in Risk Group A) may 

continue to use visual inspection of the 

TWIC and are not subject to the 

requirement for electronic inspection.15

Because the TWIC Reader final rule did 

not change the existing definition of a 

secure area in 33 CFR 101.105, and 

imposed no requirements in other 

areas,16 the primary effect of the rule 

should be to require facilities that are 

already using visual inspection of the 

TWIC as part of their access control 

procedures to use electronic TWIC 

inspection instead, strengthening 

existing access control procedures. 

Inspection of the TWIC, whether 

electronic or visual, provides a baseline 

of information to determine who may be 

provided unescorted access to secure 

areas of MTSA-regulated vessels and 

facilities. While not every person who 

possesses a TWIC is authorized for 

unescorted access, the TWIC inspection 

process ensures that facility security 

personnel do not grant unescorted 

access to individuals who have not been 

vetted or who have been adjudicated 

unfit for unescorted access to secure 

areas. 

Electronic TWIC inspection is the 

process by which the TWIC is 

authenticated and validated, and by 

which the individual presenting the 

TWIC is matched to the stored biometric 

template. This process consists of three 

discrete parts: (1) Authentication, in 

which the TWIC presented is identified 

as an authentic credential issued by 

TSA; (2) validity check, in which the 

TWIC presented is compared to the 

TSA-supplied list of cancelled TWICs to 

ensure that it has not been revoked and 

is not expired; and (3) identity 

verification, in which biometric data 

stored on the TWIC presented is 

matched to the person presenting it 

using a fingerprint scan. Electronic 

TWIC inspection strengthens the 

inspection of TWIC, as compared to 

visual TWIC inspection, resulting in 

increased security at high-risk facilities. 

While visual TWIC inspection can 

accomplish the same three goals as 

electronic inspection (authentication, 

validation, and identify verification), 

visual inspection is not as thorough or 

reliable. 

Electronic TWIC inspection improves 

on visual inspection by adding 

additional benefits. With electronic 

inspection, the authenticity of the TWIC 

is verified by issuing a challenge/ 

response to the unique electronic 

identifier of the TWIC, called a Card 

Holder Unique Identifier. The validity 

of the TWIC is determined by 

electronically checking the TWIC 

against a database with the most 

recently updated list of cancelled 

TWICs. Finally, the identity of the 

person presenting the TWIC is verified 

by matching the biometric template 

stored on the TWIC with the presenter’s 

biometrics though use of a fingerprint 

scan. These three aspects of electronic 

inspection represent improvements over 

visual inspection because they are not 

easily counterfeited or altered within 

the TWIC.17 Additionally, electronic 

inspection ensures that the TWIC 

presented has not been invalidated 

because it was reported lost or stolen (or 

for other reasons), or revoked because of 

a criminal conviction. 

B. Coast Guard Analysis and the 

Homeland Security Institute (HSI) 

Report 

The Coast Guard based its decision 

about which vessels and facilities to 

include in Risk Group A on a study 

entitled ‘‘Analysis of Transportation 

Worker Identification Credential (TWIC) 

Electronic Reader Requirements in the 

Maritime Sector,’’ 18 (March 6, 2008) 


daltland on DSKBBV9HB2PROD with PROPOSALS
29070 Federal Register / Vol. 83, No. 121 / Friday, June 22, 2018 / Proposed Rules 

docket for the TWIC rulemaking, available at 

www.regulations.gov as docket number USCG– 

2007–28915–0117. 

19 ‘‘Independent Verification and Validation of 

Development of Transportation Worker 

Identification Credential (TWIC) Reader 

Requirements,’’ developed by the Homeland 

Security Institute (HSI) (October 21, 2008) (the ‘‘HSI 

Report’’). While the full HSI Report contains 

sensitive security information, a redacted version of 

the document is available on the public docket for 

the TWIC rulemaking, available at 

www.regulations.gov as docket number USCG– 

2007–28915–0119. 

20Coast Guard TWIC Report, p. 4. 

21Coast Guard TWIC Report, p.3. 

22Coast Guard TWIC Report, p.3. 

23Coast Guard TWIC Report, p.11. 

24Coast Guard TWIC Report, p.13, figure 12. 

25HSI Report, p.1. 

26HSI Report, p.2. 

27HSI Report, p.2. 

28HSI Report, p.2. 

29HSI Report, p.2. 

30HSI Report, p.3. 

(the ‘‘Coast Guard TWIC Report’’). The 

Coast Guard TWIC Report documented 

the risk-based analytic approach used to 

develop the TWIC reader requirements 

in the maritime sector, and supported 

the drafting of the proposed regulatory 

requirements for the use of TWIC 

readers as an access control measure. 

This study was independently verified 

in a report titled ‘‘Independent 

Verification and Validation of 

Development of Transportation Worker 

Identification Credential (TWIC) Reader 

Requirements,’’ developed by the 

Homeland Security Institute (HSI) 

(October 21, 2008) (the ‘‘HSI Report’’).19

To develop the Coast Guard TWIC 

Report, the Coast Guard assembled a 

panel of maritime security subject 

matter experts (SMEs) from the Coast 

Guard and TSA to conduct a risk-based 

analysis of MTSA-regulated vessels and 

facilities. The panel determined that the 

Analytical Hierarchy Process (AHP) 

would provide an effective basis for 

applying the panel’s judgment to weigh 

and apply several key factors to the 

assessment of types of vessels and 

facilities.20 The AHP provides a 

comprehensive and rational framework 

for structuring a problem, representing 

and quantifying its elements, and 

relating those elements to overall goals, 

and for evaluating a set of alternative 

solutions. The AHP has been used by 

government and industry to assess 

alternatives and arrive at solutions 

when faced with problems that present 

disparate criteria and factors for 

consideration. 

The Coast Guard’s panel of SMEs 

identified 68 distinct types of vessels 

and facilities (referred to as ‘‘asset 

categories’’) based on their purpose or 

operational description. The panel then 

assessed each of the 68 asset categories 

using three factors: (1) Maximum 

consequences to the vessel or facility 

resulting from a terrorist attack; (2) 

criticality to the health and economy of 

the Nation, and to national security; and 

(3) utility of the TWIC in reducing risk. 

The panel used this methodology to 

develop the framework discussed in the 

2009 ANPRM and proposed in the 2013 

TWIC Reader NPRM, in which the Coast 

Guard required vessels and facilities 

that had the highest vulnerabilities, and 

that could derive benefits from TWIC 

readers, to use electronic inspection 

procedures. The Coast Guard TWIC 

Report recognized that, while ‘‘security 

measures are not implemented in a ‘one 

size fits all’ fashion . . . Coast Guard 

regulations also need to be prescriptive 

to ensure appropriate implementation in 

a uniform manner nationally.’’ 21 For 

that reason, the Coast Guard TWIC 

Report recommended the Coast Guard 

determine ‘‘. . . the risk level of 

facilities and vessels . . . as it relates to 

access control and assign TWIC reader 

requirements accordingly.’’ 22

Additionally, the Coast Guard TWIC 

Report noted that ‘‘in general, [asset 

categories] are ranked by the hazards of 

the cargo (or passenger quantities) 

carried by the vessel or handled by the 

facility’’ 23 and thus suggested that the 

high-risk vessels and facilities were 

those containing bulk CDCs and those 

carrying more than 1,000 passengers.24

The HSI Report was designed to 

determine the validity of the Coast 

Guard methodology for analyzing the 

underlying risk to vessels and facilities 

outlined in the Coast Guard TWIC 

Report and the effectiveness of the 

overall TWIC program in mitigating that 

risk. As stated in the HSI Report, its 

purpose was to ‘‘strengthen the USCG’s 

TWIC reader requirements development 

efforts by evaluating (1) the validity of 

the risk assessment methodology, (2) the 

extent to which the conclusions follow 

from the analysis, and (3) the overall 

strengths and limitations of the risk 

analysis.’’ 25

The HSI Report validated the Coast 

Guard’s risk assessment methodology. 

Specifically, the report’s foremost 

conclusion was that HSI ‘‘verified the 

[risk-based] process because we were 

able to independently reproduce the 

results based on the information 

provided in the TWIC report . . . we 

have also validated the process and 

found it generally defensible and based 

on a rigorous risk framework [emphasis 

in original].’’ 26 The HSI Report also 

affirmed the three criteria that the Coast 

Guard panel used to determine the risk 

ranking for the 68 asset categories 

(Maritime Security Risk Analysis Model 

(MSRAM) maximum consequence data, 

criticality of infrastructure, and TWIC 

utility), and noted that the MSRAM 

maximum consequence data were ‘‘the 

most rigorous among the three due to 

the well-established and ongoing work 

of the MSRAM.’’ 27 On the other hand, 

the HSI Report noted that the TWIC 

utility criterion was ‘‘perhaps the most 

uncertain among the three evaluation 

criteria.’’ 28

While the Coast Guard TWIC Report 

and the HSI Report ranked the relative 

risk of facilities based on asset category, 

the HSI Report did not unequivocally 

state that asset categorization was the 

best methodology to use. Indeed, in the 

executive summary, the report noted 

that ‘‘[t]he 68 asset categories 

considered in the well-established 

MSRAM were ranked based on their risk 

scores. The list is considered 

comprehensive based upon its 

widespread use. Nevertheless, we also 

point out that there might still be 

variations among assets in the same 

category [emphasis added].’’ 29 Despite 

this uncertainty, in the 2013 TWIC 

Reader NPRM, the Coast Guard 

proposed to use the asset category 

methodology to determine which types 

of facilities would be required to use 

electronic TWIC inspection in their 

security protocols. 

Furthermore, the HSI Report 

identified several recommendations that 

could have been used to improve the 

methodology to develop the Coast 

Guard’s risk analysis. Most 

fundamentally, the HSI Report 

suggested that further analysis on risk 

grouping of asset categories—that is, 

which categories should be included in 

Risk Group A—could help to ensure 

that the results were more defensible. 

The HSI Report also suggested that the 

Coast Guard better define TWIC utility 

and add mechanisms that allow more 

flexibility in applying TWIC reader 

requirements. Finally, noting that the 

electronic TWIC inspection 

requirements discussed in the Coast 

Guard TWIC Report (and, in part, 

ultimately promulgated in the TWIC 

Reader final rule) were developed based 

on the 2006 MSRAM data, the HSI 

Report stated that ‘‘there is probably a 

need to reassess reader requirements 

using recently updated MSRAM data. At 

a minimum [emphasis added], a 

preliminary assessment should be 

conducted to determine the potential 

impacts of the use of the new data.’’ 30

After reviewing the methodology used 

in the TWIC Reader final rule, we 

believe that the information the 

methodology contained was generally 


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31See 81 FR 57652, 57659. While there are other 

means of attacking a facility, we focused on these 

three scenarios because there is a significant 

improvement in threat mitigation by moving from 

visual TWIC inspection to electronic TWIC 

inspection. 

32See 78 FR 17782, at 17791. 

33The term ‘‘Certain Dangerous Cargo’’ is defined 

in 33 CFR 101.105 by reference to 33 CFR 160.202, 

which lists all covered substances. 

34See text for 33 CFR 105.253(a)(1) and (2), 81 FR 

57652, 57712. 

35See 81 FR 57712, at 57698, Table 5. 

36This petition is located in the docket at 

www.regulations.gov, docket number USCG–2017– 

0447. While we acknowledge some of the issues 

raised in that petition here, we note that this NPRM 

does not constitute a grant or denial of that petition. 

37Bulk, in this context, refers to how the cargoes 

are packaged rather than to an amount. The terms 

‘‘bulk’’ or ‘‘in bulk’’ are defined in 33 CFR 101.105, 

in part, as ‘‘a commodity that is loaded or carried 

without containers or labels, and that is received 

and handled without mark or count.’’ See similar 

definitions in 33 CFR 126.3 and 160.3. 38As this term is used in the text of 33 CFR 

105.253(a)(1), 81 FR 57652, 57712. 39The specific attack methods were discussed in 

the TWIC Reader final rule, Section V.A.2, ‘‘Risk 

analysis methodology,’’ These scenarios were: (1) A 

truck bomb, (2) a terrorist assault team, and (3) an 

explosive attack carried out by a passenger or 

passerby (with the specific caveat that the terrorist 

is not an ‘‘insider’’). 81 FR 57652, 57659. 

accurate. Specifically, we believe that 

the general conclusions of the MSRAM 

analysis documented in the Coast Guard 

TWIC Report and validated in the HSI 

Report were correct and that the 

facilities that handle bulk CDC or 

receive large passenger vessels 

constitute the most severe 

vulnerabilities. What the 

recommendations of the HSI Report 

indicate, however, is that there is room 

for improvement within certain aspects 

of that general methodology, which we 

discuss in more detail in Section V of 

this NPRM. 

C. Summary of Methodology Used in the 

TWIC Rulemaking 

To ensure that the TWIC reader 

requirement was applied only to those 

facilities where the readers could 

enhance security the most, the Coast 

Guard designated certain facilities as 

high risk, putting them into Risk Group 

A. The TWIC Reader final rule requires 

that facilities in Risk Group A conduct 

electronic TWIC inspection to identify 

that a person seeking unescorted access 

to a secure area has undergone a 

biometric identification check, a card 

authentication check, and a card 

validation check to ensure that the 

person is authorized to have access. To 

determine which vessels and facilities 

should be included in Risk Group A, we 

relied on MSRAM. MSRAM is a riskanalysis tool used to analyze 

vulnerabilities and risk-mitigation 

measures in a wide variety of scenarios. 

MSRAM identified three hypothetical 

scenarios in which a TWIC reader could 

be useful in preventing or mitigating 

terrorist attacks: (1) A truck bomb; (2) a 

terrorist assault team; and (3) an 

explosive attack carried out by a 

passenger or passerby (with the specific 

stipulation that the terrorist is not an 

‘‘insider’’).31 MSRAM also identified 

risk factors that made a facility or vessel 

particularly susceptible to these types of 

attacks and thus warranted the 

inclusion of that facility or vessel in 

Risk Group A. As we stated in the 

NPRM, ‘‘in determining the cutoff 

points between risk groups, risk 

rankings were graphed to identify 

natural breaks that occurred in the data 

. . . for facilities, these breaks generally 

occurred where there was a change in 

the hazardous nature of the materials 

stored or handled at a facility, or where 

the number of passengers accessing a 

facilities increased.’’ 32

Using the asset categories identified 

in the HSI Report and the risk analysis 

conducted under MSRAM, the Coast 

Guard found that three discrete classes 

of facilities could experience security 

benefits that are significant enough to 

warrant the requirement for electronic 

TWIC inspection. These included: (1) 

Facilities that handle CDC in bulk; 33 (2) 

facilities that receive vessels carrying 

CDC in bulk; and 3) facilities that 

receive vessels certificated to carry more 

than 1,000 passengers.34 Each of these 

types of facilities contain targets—either 

bulk CDC or groups of more than 1,000 

passengers—that could be attacked 

using a method identified above, with a 

result potentially catastrophic enough to 

be classified as a TSI. 

In the TWIC Reader final rule, our 

goal was to apply the requirements for 

electronic TWIC inspection only to 

those high-risk facilities that could most 

benefit from its use. Because the asset 

categories identified in this NPRM 

contained a vulnerable target, and the 

threat to that vulnerability could be 

mitigated by electronic TWIC 

inspection, we believe that the security 

benefits justify the cost of the upgraded 

security. As reported in the Regulatory 

Analysis section of the TWIC Reader 

final rule, we estimated that the 

electronic TWIC inspection provision 

would extend to 290 bulk liquid 

facilities, 16 break bulk and solid 

facilities, 3 container facilities, 61 

‘‘mixed use’’ facilities, and 165 

passenger facilities, for a total of 525 

facilities.35

D. Petition for Rulemaking and 

Identified Weaknesses 

After publication of the TWIC Reader 

final rule in August 2016, we received 

several questions from the public about 

our risk analysis, as well as a 

rulemaking petition to reconsider the 

scope of the TWIC Reader final rule.36

A primary issue that arose was whether 

the Coast Guard’s risk analysis properly 

analyzed the location of bulk CDC in a 

facility. For example, the rulemaking 

petitioner raised the issue that, because 

many Risk Group A facilities store or 

handle bulk CDC in areas unconnected 

to their maritime nexus, such facilities 

may not pose as large a risk to 

transportation infrastructure as those 

Risk Group A facilities that handle bulk 

CDC in the marine transfer area and 

actively transfer it to or from vessels. In 

addition, we received several inquiries 

regarding how the Coast Guard would 

categorize small quantities of bulk 37

CDC used for the direct operations of 

the facility. Examples of this issue 

include operational use of CDCs, such 

as relatively small tanks of propane 

used internally at a facility to generate 

electricity or to power port equipment, 

that would still fall into the broad 

category of ‘‘CDC in bulk,’’ 38 and yet 

would also seem to pose few of the 

security concerns described in the Coast 

Guard’s risk analysis. 

Furthermore, even though bulk CDC 

could be attacked by the identified 

attack methods from the Coast Guard’s 

risk analysis no matter where it is 

located in the facility,39 the petitioner 

suggested that the consequence of such 

an attack may not be as severe if the 

bulk CDC is kept far from the marine 

transfer area. For example, many 

gasoline refineries may be considered 

Risk Group A under the TWIC Reader 

final rule, as they receive shipments of 

bulk oil, which are not a CDC, from 

tankships and combine it with 

chemicals that are CDCs, which may be 

stored and processed in an inland part 

of the facility. The petitioner requested, 

among other things, that the Coast 

Guard revise the requirements for 

electronic TWIC inspection so that only 

facilities that transfer bulk CDC to or 

from a vessel would be subject to the 

TWIC Reader final rule requirements. 

This would exclude from the regulation 

those facilities where bulk CDC exists 

but is not transferred to or from a vessel, 

including facilities where the CDC is 

stored on land or stored on the water 

and not transferred to land (i.e., 

facilities that receive vessels carrying 

CDC in bulk but do not transfer bulk 

CDC to or from these vessels). 

At this time, we are not issuing a 

grant or denial for the petition for 

rulemaking, but we do wish to 


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40Several other issues raised by the petitioner, 

such as questions regarding administrative 

procedure and economic analysis, are not addressed 

in this document. We plan to issue a formal 

response to that petition that will respond to all 

issues it raised. 

41HSI Report, p. 3. 

42See Section III.E.3.a of the NPRM ‘‘Public 

Comments Received in Response to the ANPRM 

and Public Meeting,’’ 78 FR 17782, 17796. 

43 78 FR 17782, at 17811. 

44 78 FR 17782, at 17803. 

45 Id. 

46See 81 FR 57712, at 57681. 

acknowledge that the issue of bulk CDC 

located in non-maritime areas, which 

were raised by the petitioner, factored 

into the Coast Guard’s rationale to reexamine the asset categorization that 

underpins the risk analysis 

methodology in the TWIC rulemaking.40

Specifically, it was one of the factors 

that caused us to focus on the 

conclusions in the HSI Report that we 

‘‘consider further analysis on risk 

grouping of asset categories,’’ and that 

we ‘‘consider adding mechanisms that 

allow flexibility in applying reader 

requirements.’’ 41 We also note that 

during the TWIC rulemaking process, 

other commenters raised similar issues, 

suggesting that the Coast Guard 

incorporate additional mechanisms for 

waivers and exemptions for various 

types of situations in which the 

commenters did not believe additional 

security measures were warranted.42

While we stated at the time that existing 

waiver provisions in 33 CFR 105.130 

enable the Coast Guard to grant ‘‘a 

waiver of any requirement that the 

owner or operator considers 

unnecessary,’’ 43 at this time, we do not 

have a full and consistent picture of 

what specific security vulnerabilities 

would need to be addressed in order to 

grant a waiver based on equivalency. 

Specifically, because any equivalency 

determination would need to be based 

on a determination of TWIC utility, 

which is not covered in the facility’s 

security assessment, we would be 

applying any such waivers on an 

inconsistent and uncertain basis. For 

that reason, there is a need to develop 

a more comprehensive analysis of the 

risk factors of facilities that handle CDC 

on an individualized basis, and the 

results of that analysis could inform 

either a revision of the TWIC reader rule 

applicability or, alternatively, to 

develop a consistent methodology for 

applying waivers. Further analysis 

could allow the Coast Guard to provide 

broad relief from security requirements 

for a wide variety of facilities currently 

characterized as Risk Group A due to 

the asset categorization methodology. 

In the NPRM, the Coast Guard 

addressed the issue of bulk CDC located 

outside of areas related to maritime 

transportation. In response to a 

comment suggesting that facility owners 

should not be required to use TWIC 

readers for certain portions of their 

facilities, we noted that facilities already 

had an ‘‘option to redefine their ‘secure 

area’ as only that portion of their access 

control area that is directly related to 

maritime transportation . . .’’ and that 

‘‘facilities whose footprint includes 

portions that are not directly related to 

maritime transportation can submit a 

[Facility Security Plan] for Coast Guard 

approval that removes those areas from 

the definition of the facility’s ‘secure 

area’ for Coast Guard regulatory 

purposes.’’ 44 The Coast Guard went on 

to note that ‘‘[s]uch facilities would 

typically include refineries, chemical 

plants, factories, mills, power plants, 

smelting operations, or recreational boat 

marinas.’’ 45

In the TWIC Reader final rule, we also 

addressed the issue of bulk CDC located 

outside of the maritime nexus of the 

facility. We noted that a facility where 

bulk CDC is stored and handled away 

from the maritime nexus would be a 

Risk Group A facility (because the bulk 

CDC would still be protected by the 

facility’s security plan and, thus, would 

present a vulnerability), and stated that 

‘‘when the bulk CDC is not a part of the 

maritime transportation activities, it 

may be that a facility could define its 

MTSA footprint in such a way as to 

exclude that area . . . [with the result 

that] the TWIC reader requirements . . . 

would not apply in that area.’’ 46

In summary, we believe that the 

manner in which the TWIC Reader final 

rule defines Risk Group A may be 

overbroad. While some facilities that 

handle bulk CDC that is not transferred 

to or from a vessel present a serious risk 

of a TSI, the fact that it was evident that 

exceptions and waivers would be 

necessary to implement the program 

indicates that there may be a need for 

more refinement of the Risk Group A 

category. The petitioners and others, 

such as owners and operators of 

facilities that would have to comply 

with the TWIC Reader final rule and 

members of Congress who represent this 

interests of those persons, who have 

discussed the TWIC Reader final rule 

with the Coast Guard have raised valid 

issues about whether the risk groupings 

established in the TWIC Reader final 

rule represent the best definition of 

high-risk facilities that can benefit from 

the requirement of electronic TWIC 

inspection. Because it is our goal to 

impose a requirement only where there 

is clear evidence that the benefits will 

justify the costs, we believe that these 

issues warrant additional study. 

V. Discussion of the Proposed Rule To 

Delay the Effective Date 

Based on industry input, the 

recommendations outlined in the HSI 

Report, and the length of time that has 

passed since the development of the 

original risk analysis, we are proposing 

in this NPRM a temporary, partial delay 

in implementing the requirements for 

electronic TWIC inspection for certain 

facilities. Specifically, we are proposing 

to delay for 3 years implementation of 

the requirements for electronic TWIC 

inspection at facilities that handle bulk 

CDC but do not transfer it to or from a 

vessel and facilities that receive vessels 

that carry bulk CDC but, during that 

vessel-to-facility interface, do not 

transfer bulk CDC to or from the vessel. 

All other vessels and facilities subject to 

the electronic TWIC inspection 

requirements, including facilities that 

receive large passenger vessels and 

facilities regulated under 33 CFR 

105.295 that handle bulk CDC and 

transfer it to or from a vessel, would still 

be required to comply on the August 23, 

2018, compliance date. 

We are proposing this delay because 

we believe that we can better consider 

the risk methodology used in the TWIC 

Reader final rule. When we determined 

that the presence of CDC in bulk within 

the MTSA footprint was enough 

justification for a facility to be 

considered Risk Group A (i.e., used the 

asset categorization methodology from 

the original Coast Guard TWIC Report 

and HSI Report), we eliminated more 

precise risk analysis capabilities for 

assessing whether a particular facility is 

high risk and warrants the additional 

regulatory burden of requiring 

electronic TWIC inspection. That is, 

when using the asset categorization 

methodology, the Coast Guard did not 

examine each facility individually to 

determine the precise amount of risk 

posted by a specific facility. We believe 

that delaying the implementation of the 

TWIC Reader final rule requirements for 

certain facilities could allow us to 

develop a more precise risk-analysis 

methodology that would better identify 

which of these facilities subject to the 3- 

year delayed implementation date 

would benefit from the electronic TWIC 

inspection requirements. 

The items raised by the petitioners 

and recommendations provided by the 

HSI Report establish the parameters of 

what the Coast Guard plans to study and 

reevaluate during the proposed delay 

period. Specifically, we would analyze 

whether we can divide the general asset 

category of ‘‘facilities that handle CDC 


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in bulk’’ into more specific asset 

categories for purposes of implementing 

the electronic TWIC inspection 

requirement. Additionally, the delay 

period would allow the Coast Guard to 

determine factors that, if they do not 

lend themselves to subdividing the asset 

categories, would be able to provide 

guidance for waiver procedures. These 

factors could include, but are not 

limited to, the quantity of bulk CDC 

handled or stored, the location within 

the facility where the CDC is handled or 

stored, and the population density or 

other critical infrastructure elements in 

and around the facility. Furthermore, 

more precise analysis of specific facility 

aspects, such as plume modeling, 

analysis of prevailing winds and 

currents, and other potential factors 

could be useful in determining whether 

an attack on a particular facility 

presents enough of a security threat to 

warrant a requirement for enhanced 

security measures. Finally, we could 

analyze existing security measures and 

take them into consideration to 

determine the marginal TWIC utility, as 

suggested by the HSI Report. 

The goals of the additional study 

would be to prevent situations where 

electronic TWIC inspection 

requirements would provide little or no 

protection and, conversely, to capture 

situations where the existing Risk Group 

A may not cover the full range of 

necessary facilities. As an example, a 

1,000 lb. propane tank remotely located 

in a large facility away from a 

population center may have a relatively 

low risk of causing a TSI. That same 

propane tank located in a small facility 

in an urban environment may have a 

much higher risk of causing a TSI, and 

therefore may warrant designation of the 

facility as Risk Group A. The current 

asset categorization methodology used 

by the Coast Guard cannot make such 

distinctions. 

We believe that a 3-year delay period 

is needed to allow time for the Coast 

Guard to attain and analyze data from 

individual MTSA facilities that contain 

hazardous chemicals, and implement 

electronic TWIC inspection for those 

facilities that would benefit from 

electronic TWIC inspection 

requirements. The first 18 months of the 

delay would be dedicated to physical 

analysis of individual facilities, during 

which we would develop the specific 

data entry requirements for field 

inspectors, analyze data from facility 

inspections, and, potentially, develop a 

new risk methodology based on that 

analysis. After the data entry 

requirements are established, Coast 

Guard inspectors would incorporate any 

additional data gathering as part of the 

annual or spot inspection of each 

facility. As data are gathered, they 

would be entered into and analyzed 

through a risk analysis tool to score for 

operational risks. This process would 

require several months to collate and 

analyze data to determine the risk 

values of MTSA facilities with regard to 

electronic TWIC inspection, verify 

whether the new risk values coincide 

with previous parameters of Risk Group 

A, and determine which facilities have 

the highest risk of a TSI. 

Based on the information collected 

and analyzed during the first half of the 

proposed 3-year delay period, we would 

take one of two next steps. If the new 

data indicates that the risk groupings in 

the TWIC Reader final rule were 

appropriate, we would not make any 

changes to the existing requirements for 

electronic TWIC inspection, and would 

publish a document in the Federal 

Register explaining the results of our 

new data and analysis. If, on the other 

hand, the data suggest that there is a 

different and preferable way to 

implement requirements for electronic 

TWIC inspection, and the revised Coast 

Guard risk analysis suggests that 

additional or fewer facilities not 

included in the TWIC Reader final rule’s 

risk analysis should be covered, we 

would use the remaining time of the 

proposed 3-year delay period to conduct 

a rulemaking using the new 

information, including the publication 

of a notice of proposed rulemaking to 

allow for a public comment period. 

During the proposed delay period, 

facilities that receive large passenger 

vessels and facilities that transfer bulk 

CDC to or from a vessel will be required 

to implement electronic TWIC 

inspection. We believe that, unlike 

situations where CDC is not transferred 

to or from a vessel, these two categories 

of facilities present a clear risk of a TSI. 

Facilities that transfer CDCs to or from 

a vessel typically transfer large 

quantities. Similarly, large passenger 

facilities present an inherent risk of a 

TSI. Unlike the scenarios described 

above involving bulk CDC, the loss of 

human life that could occur as a result 

of an attack at a large passenger facility 

is not related to the location of the 

facility (e.g., near or far from a 

population center), because the lives 

would be lost at the facility itself. For 

these reasons, the August 23, 2018, 

implementation date of the TWIC 

Reader final rule continues to be 

appropriate for these classes of facilities. 

We also note that the petitioners 

referred to above did not request that 

the electronic TWIC inspection 

requirements be delayed for these 

categories of facilities. 

VI. Regulatory Analysis 

This proposed rule would delay 

implementation of the TWIC Reader 

final rule by 3 years, until August 23, 

2021, for two types of Risk Group A 

facilities: (1) Those that handle CDCs in 

bulk, but do not transfer CDCs to or 

from a vessel, and (2) those that receive 

vessels carrying bulk CDC but, during 

the vessel-to-facility interface, do not 

transfer bulk CDC to or from the vessel. 

Other facilities and vessels would still 

be required to comply with the TWIC 

Reader final rule by August 23, 2018. 

Below, we provide an updated 

Regulatory Analysis of the TWIC Reader 

final rule that presents the impacts of 

delaying the effective date of the final 

rule for the two types of Risk Group A 

facilities defined in the preceding 

paragraph. For this updated analysis, we 

estimated the impact of delaying the 

final rule by calculating the 10-year cost 

of this proposed rule, where only 

certain facilities will incur costs starting 

in year one and other facilities will 

incur no costs in the first 3 years, and 

compare it to the 10-year cost presented 

in the Regulatory Analysis for the TWIC 

Reader final rule. We then calculated 

the difference between the two costs to 

estimate the impact of this proposed 

rule. To properly compare the costs and 

benefits of this proposed rule and the 

TWIC Reader final rule, we first updated 

the costs of the final rule from 2012 

dollars to 2016 dollars. 

A. Regulatory Planning and Review 

Executive Orders 12866 (Regulatory 

Planning and 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. This proposed rule is 

expected to be an Executive Order 

13771 (Reducing Regulation and 

Controlling Regulatory Costs) 

deregulatory action. Details on the 

estimated cost savings of this proposed 

rule can be found in the rule’s economic 

analysis. 

This proposed rule is a significant 

regulatory action under section 3(f) of 

Executive Order 12866. The Office of 

Management and Budget (OMB) has 

reviewed it under that Order. It requires 

an assessment of potential costs and 


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47Available in the docket, docket number USCG– 

2007–28915–0231. 

48See Table 2.8 on page 26 of the TWIC Reader 

final rule Regulatory Analysis for the estimate of 

525 facilities, and Table 2.1 on page 23 for the 

estimate of 1 vessel. 

49For consistency across rulemaking analyses we 

are using the annual Implicit Price Deflators for 

Gross Domestic Product (BEA National Income and 

Product Accounts (NIPA) Table 1.1.9) values 

updated in March 2017. See page 9. https://

faq.bea.gov/scb/pdf/2017/04%20April/0417_

selected_nipa_tables.pdf. 

benefits under section 6(a)(3) of 

Executive Order 12866. Because this 

proposed rule would delay the 

implementation of the TWIC Reader 

final rule by only 3 years (until August 

23, 2021) for facilities that handle CDC 

in bulk, but do not transfer it to or from 

a vessel, and facilities that receive 

vessels carrying bulk CDC but, during 

that vessel-to-facility interface, do not 

transfer bulk CDC to or from the vessel, 

we did not revise our fundamental 

methodologies or key assumptions for 

the TWIC Reader final rule Regulatory 

Analysis.47

In the 2016 final rule Regulatory 

Analysis, we estimated that 525 

facilities and 1 vessel out of the MTSAregulated entities (13,825 vessels and 

more than 3,270 facilities) will have to 

comply with the final rule’s electronic 

TWIC inspection requirements using 

MSRAM’s risk-based tiered approach.48

Using data from MSRAM, we estimate 

that this proposed rule would delay the 

implementation of the final rule for 122 

of the 525 affected Risk Group A 

facilities by 3 years, while the remaining 

403 facilities and 1 vessel would have 

to implement the final rule 

requirements by August 23, 2018. These 

122 facilities handle bulk CDC, but do 

not transfer it to or from a vessel. This 

proposed rule would also apply to 

facilities that receive vessels carrying 

bulk CDC but, during the vessel-tofacility interface, do not transfer the 

bulk CDC to or from the vessel. We did 

not include these facilities in our 

MSRAM risk analysis for the final rule 

or in the final rule Regulatory Analysis. 

Therefore, we cannot determine the 

number of these facilities at this time, 

and we did not include them in our cost 

estimates for this proposed rule. We 

updated our final rule cost estimates 

from 2012 to 2016 based on Gross 

Domestic Product (GDP) Deflator data 

from the U.S. Bureau of Economic 

Analysis (BEA).49 The GDP deflator is a 

measure of the change in price of 

domestic goods and services purchased 

by consumers, businesses, and the 

government. 

Table 1 summarizes the costs and 

benefits of the TWIC Reader final rule 

as well as this proposed rule, which 

would delay the final rule. We do not 

anticipate any new costs to industry if 

the final rule is implemented, because 

this proposed rule would not change the 

applicability of the 2016 final rule. This 

proposed rule would result in no other 

changes to the final rule. The impact to 

the one affected vessel, along with the 

qualitative costs and benefits, remain 

the same. Because this proposed rule 

would delay the implementation of the 

final rule by 3 years for 122 facilities, it 

would result in cost savings to both 

industry and the government of $8.1 

million (discounted at 7 percent) over a 

10-year period of analysis ($162.9 

million minus $154.8 million). At a 7- 

percent discount rate, we estimate the 

total annualized cost savings to be $1.2 

million ($23.2 million minus $22.0 

million). Using a perpetual period of 

analysis, we estimated the total 

annualized cost savings of the proposed 

rule to be $0.552 million in 2016 

dollars, using a 7-percent discount rate. 

TABLE 1—SUMMARY OF COSTS SAVING AND CHANGE IN BENEFITS: FINAL RULE AND NPRM TO DELAY THE FINAL RULE

Category TWIC Reader final rule 

(2016 $) 

Proposed rule to delay final rule 

(2016 $) 

Applicability ................... High-risk MTSA-regulated facilities and highrisk MTSA-regulated vessels with greater 

than 20 TWIC-holding crew.

Same as in final rule except the facilities and vessels handling bulk 

CDC, but not transferring it to or from the vessel. 

Affected Population ....... 1 vessel ............................................................ No change from final rule. 

525 facilities (to comply by Aug. 23, 2018) ..... 122 facilities that handle bulk CDC, but do not transfer it to or from a 

vessel (to comply by Aug. 23, 2021). The proposed rule would also 

apply to facilities that receive vessels carrying bulk CDC but, during that vessel-to-facility interface, do not transfer bulk CDC to or 

from the vessel. However, the number of these facilities cannot be 

determined at this time and will not be known until after an additional study is conducted to improve the risk methodology and determine the new risk groups to comply by August 23, 2021. 

Costs to Industry and 

Government ($ millions, 7% discount 

rate) *.

Industry: $23.2 (annualized) ............................

Government: $0.014 (annualized) ...................

Both: $23.2 (annualized) ..................................

Industry: $162.8 (10-year) ...............................

Industry: $22.0 (annualized). 

Government: $0.013 (annualized). 

Both: $22.0 (annualized) 

Industry: $154.7 (10-year) 

Government: $0.097 (10-year) ........................ Both: $154.8 (10-year). 

Both: $162.9 (10-year) ..................................... Government: $0.092 (10-year). 

Change in Costs (Qualitative).Time to retrieve or replace lost PINs for use 

with TWICs.

The proposed rule would delay the cost to retrieve or replace lost 

PINs for use with TWICs for the facilities with delayed implementation. 

Change in Benefits 

(Qualitative).

Enhanced access control and security at U.S. 

maritime facilities and on board U.S.- 

flagged vessels.

Delaying enhanced access control and security for the facilities with 

delayed implementation. 

Reduction of human error when checking 

identification and manning access points.

Delaying the reduction of human error when checking identification 

and manning access points for the facilities with delayed implementation. 

* The TWIC Reader final rule Regulatory Analysis estimated an annualized cost to industry of $21.9 million (at a 7-percent discount rate), and 

a 10-year cost of $153.7 million (at a 7-percent discount rate) in 2012 dollars. For the purposes of this analysis, all costs are presented in 2016 

dollars and are updated using annual GDP deflator data from the BEA. The annualized total industry cost of $21.9 million in 2012 dollars is now 

$23.2 million in 2016 dollars and the 10-year cost of $153.7 million is now $162.8 million in 2016 dollars. 


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Methodology 

Final Rule Costs Inflated to 2016 Dollars 

As shown in table 1, we updated the 

annualized cost of the 2016 final rule 

from 2012 dollars to 2016 dollars (over 

a 10-year period), which is 

approximately $23.2 million at a 7- 

percent discount rate. We performed 

this update to compare them to this 

proposed rule’s total industry costs on 

the same basis. 

To do this, we used an inflation factor 

from the annual GDP deflator data . We 

calculated the inflation factor of 1.059 

by dividing the annual 2016 index 

number (111.445) by the annual 2012 

index number (105.214). 

We then applied this inflation factor 

to the costs for vessels and additional 

costs, which include additional delay 

costs, travel costs, and the cost to 

replace TWIC readers that fail (Table 

4.38 of the final rule RA). These inflated 

costs are shown in table 2. 

TABLE 2—COMPARISON OF TOTAL COST FOR VESSELS AND ADDITIONAL COSTS IN 2012 DOLLARS AND 2016 DOLLARS

UNDER 2016 TWIC READER FINAL RULE

[Millions] 

Year 

Vessel Additional costs 

2012 $ 2016 $ 2012 $ 2016 $ 

1 ....................................................................................................................... $0.021 $0.022 $4.21 $4.46 

2 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

3 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

4 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

5 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

6 ....................................................................................................................... 0.018 0.019 4.21 4.46 

7 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

8 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

9 ....................................................................................................................... 0.0036 0.0038 4.21 4.46 

10 ..................................................................................................................... 0.0036 0.0038 4.21 4.46 

Total .......................................................................................................... 0.068 0.072 42.10 44.59 

For facilities, we applied this inflation 

factor to the total cost-by-cost 

component (table 4.17 of the final rule 

RA) because the proposed rule would 

apply only to some of these cost 

elements. Facility costs include capital 

costs, maintenance costs, and 

operational costs. Capital costs consist 

of the cost to purchase and install TWIC 

readers, as well as the cost to fully 

replace TWIC readers 5 years after the 

original installation. Maintenance costs 

account for the costs to maintain TWIC 

readers every year after the original 

installation. Operational costs include 

costs that occur only at the time of the 

TWIC reader installation, such as those 

for amending security plans, creating a 

recordkeeping system, and initial 

training. Operational costs also include 

ongoing costs, such as those for keeping 

and maintaining records, downloading 

the canceled card list, and ongoing 

annual training. Table 3 presents a 

comparison of the facility costs in 2012 

and 2016 dollars, as well as an estimate 

of the total number of facilities 

complying with the regulation each 

year. 

TABLE 3—COMPARISON OF TOTAL COST FOR FACILITIES IN 2012 DOLLARS AND 2016 DOLLARS UNDER 2016 TWIC 

READER FINAL RULE

[Millions] 

Year 

Number 

of new 

facilities 

Total 

number 

of facilities 

Capital costs Maintenance costs Operational costs Undiscounted total 

2012 $ 2016 $ 2012 $ 2016 $ 2012 $ 2016 $ 2012 $ 2016 $ 

1 ........................ 263 263 $49.49 $52.41 $0 $0 $1.99 $2.10 $51.47 $54.51 

2 ........................ 262 525 49.49 52.41 0.99 1.05 2.16 2.29 52.64 55.74 

3 ........................ 0 525 0 0 1.97 2.09 1.34 1.42 3.31 3.51 

4 ........................ 0 525 0 0 1.97 2.09 1.34 1.42 3.31 3.51 

5 ........................ 0 525 0 0 1.97 2.09 1.34 1.42 3.31 3.51 

6 ........................ 0 525 9.87 10.45 1.97 2.09 1.34 1.42 13.18 13.96 

7 ........................ 0 525 9.87 10.45 1.97 2.09 1.34 1.42 13.18 13.96 

8 ........................ 0 525 0 0 1.97 2.09 1.34 1.42 3.31 3.51 

9 ........................ 0 525 0 0 1.97 2.09 1.34 1.42 3.31 3.51 

10 ...................... 0 525 0 0 1.97 2.09 1.34 1.42 3.31 3.51 

Total ........... .................... .................... 118.71 125.72 16.78 17.77 14.84 15.72 150.33 159.20 

Table 4 summarizes the total costs to 

industry of the final rule in 2016 

dollars. We estimated the annualized 

cost to be $23.2 million at a 7-percent 

discount rate. 


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50We calculated the total initial baseline capital 

costs for TWIC installation for all facilities by 

adding the baseline capital costs presented in table 

3 for years 1 and 2 ($52.41 million + $52.41 million 

= $104.81 million). We calculated the total baseline 

capital costs for replacing TWIC readers 5 years 

after the original installation by adding the baseline 

capital costs presented in table 3 for years 6 and 7 

($10.45 million + $10.45 million = $20.90 million). 

We then multiplied these numbers by the 

percentage of facilities incurring the cost in a given 

year. For example, in year 1, a total of 202 facilities 

are expected to incur capital costs, for a total 

industry cost of $40.33 million ($104.81 million × 

(202 facilities/525 facilities) = $40.33 million). 

51The total initial baseline maintenance costs for 

TWIC readers, $2.09 million, is found in year 3 of 

table 3, as this is the first year that all facilities will 

incur maintenance costs under the baseline. To 

estimate maintenance costs, we multiplied the 

percentage of facilities incurring the cost in a given 

year by the total costs. Because maintenance costs 

are not incurred until the year after the TWIC reader 

is installed, the total number of facilities incurring 

the cost is equal to the total number of complying 

facilities in the previous year. For example, we 

calculated year 2 costs as follows: $2.09 million × 

(202 facilities/525 facilities) = $0.80 million. 

52We calculated total operational costs by adding 

the baseline operational costs in years 1 and 2 as 

presented in table 3 ($2.10 million + $2.29 million 

= $4.39 million). However, this total includes a 

$0.187 million in costs for ongoing recordkeeping 

and training which do not occur the first year a 

facility installs a TWIC reader. Therefore, the total 

initial operational cost to industry is $4.206 million 

($4.39 million¥$0.187 million = $4.206 million). 

We then multiplied the total cost by the percentage 

of new facilities complying in a given year. We also 

accounted for ongoing costs to industry, which we 

calculated by multiplying the total ongoing 

operational costs of $1.416 million per year (see 

year 3 of table 3) by the percentage of facilities 

incurring ongoing costs. For example, in year 2, we 

calculated the total initial costs to be $1.61 million 

($4.206 million × (201 facilities/525 facilities)), and 

we calculated the total ongoing costs to be $0.545 

million ($1.416 million × (202 facilities/525 

facilities)), for a total cost of $2.16 million ($1.610 

million + $0.545 million). The $1.416 million 

ongoing cost includes not only the $0.187 million 

in ongoing training and recordkeeping costs, but 

also the cost to update the canceled card list 

annually. 

TABLE 4—TOTAL INDUSTRY COST UNDER 2016 TWIC READER FINAL RULE

[Millions, 2016 dollars] 

Year Facility Vessel Additional 

costs * Undiscounted 7% 3% 

1 ............................................................... $54.51 $0.022 $4.46 $58.99 $55.13 $57.27 

2 ............................................................... 55.74 0.0038 4.46 60.20 52.58 56.75 

3 ............................................................... 3.51 0.0038 4.46 7.97 6.50 7.29 

4 ............................................................... 3.51 0.0038 4.46 7.97 6.08 7.08 

5 ............................................................... 3.51 0.0038 4.46 7.97 5.68 6.87 

6 ............................................................... 13.96 0.019 4.46 18.44 12.28 15.44 

7 ............................................................... 13.96 0.0038 4.46 18.42 11.47 14.98 

8 ............................................................... 3.51 0.0038 4.46 7.97 4.64 6.29 

9 ............................................................... 3.51 0.0038 4.46 7.97 4.33 6.11 

10 ............................................................. 3.51 0.0038 4.46 7.97 4.05 5.93 

Total .................................................. 159.20 0.072 44.59 203.86 162.76 184.01 

Annualized ................................. ........................ ........................ ........................ ........................ 23.17 21.57 

* These costs include additional delay, travel, and TWIC replacement costs due to TWIC failures. 

Totals may not sum due to rounding. 

Proposed Rule Costs 

This proposed rule would delay the 

effective date of the final rule by 3 years 

(until August 23, 2021) for 122 facilities 

that handle bulk CDC, but do not 

transfer it to or from a vessel, and an 

unestimated number of facilities that 

receive vessels carrying bulk CDC, but 

do not transfer it to or from the vessel 

during that vessel-to-facility interface. 

To allow for a consistent comparison 

between the baseline estimates and the 

costs of this proposed rule, we maintain 

the assumption that 50 percent of 

facilities will comply each year of the 

implementation period. Therefore, we 

expect that 50 percent of the 403 

facilities unaffected by the delayed 

implementation will comply in year 1 

(202 facilities), and the remaining 50 

percent will comply in year 2 (201 

facilities). For the 122 facilities with the 

3-year implementation delay, we 

assume that 50 percent will comply in 

year 3 (61 facilities), and 50 percent will 

comply in year 4 (61 facilities). 

The costs are separated into three 

categories: Capital costs, maintenance 

costs, and operating costs. To estimate 

the capital costs in a given year, we 

multiplied the total baseline capital 

costs for all facilities by the percentage 

of facilities incurring costs in a given 

year.50 Because maintenance costs are 

not incurred until the year after the 

TWIC readers are installed, we 

calculated the proposed rule 

maintenance costs in a given year by 

multiplying the total baseline costs for 

all facilities by the percentage of 

facilities complying in the previous 

year.51 We estimated operational costs 

in a similar manner, multiplying total 

operational costs by the percentage of 

facilities complying in a given year.52

Table 5 presents the total cost to 

facilities under the proposed rule. 

TABLE 5—TOTAL COST FOR FACILITIES FROM PARTIALLY DELAYING THE EFFECTIVE DATE OF FINAL RULE

[Millions 2016 dollars] 

Year Number of 

new facilities 

Total number 

of facilities 

Capital 

costs 

Maintenance 

costs 

Operational 

costs 

Undiscounted 

total 

1 ............................................................... 202 202 $40.33 $0 $1.62 $41.95 

2 ............................................................... 201 403 40.13 0.80 2.16 43.09 

3 ............................................................... 61 464 12.18 1.60 1.58 15.36 

4 ............................................................... 61 525 12.18 1.85 1.74 15.77 

5 ............................................................... 0 525 0 2.09 1.42 3.51 

6 ............................................................... 0 525 8.04 2.09 1.42 11.55 

7 ............................................................... 0 525 8.00 2.09 1.42 11.51 

8 ............................................................... 0 525 2.43 2.09 1.42 5.93 


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TABLE 5—TOTAL COST FOR FACILITIES FROM PARTIALLY DELAYING THE EFFECTIVE DATE OF FINAL RULE—Continued 

[Millions 2016 dollars] 

Year Number of 

new facilities 

Total number 

of facilities 

Capital 

costs 

Maintenance 

costs 

Operational 

costs 

Undiscounted 

total 

9 ............................................................... 0 525 2.43 2.09 1.42 5.93 

10 ............................................................. 0 525 0 2.09 1.42 3.51 

Total .................................................. ........................ ........................ 125.72 16.80 15.58 158.10 

Note: Totals may not sum due to rounding. 

Table 6 summarizes the total costs to 

industry of this proposed rule, which 

would delay the TWIC Reader final rule, 

in 2016 dollars.53 This proposed rule 

would not impact the compliance 

schedule to vessels. Therefore, these 

costs remain unchanged from the 

baseline. We calculated the additional 

costs by multiplying the totals in table 

2 by the percentage of facilities 

complying within a given year and 

phasing them in in 2 years. Over 10 

years, we estimate the annualized cost 

to industry to be $22.03 million at a 7- 

percent discount rate. 

TABLE 6—TOTAL INDUSTRY COST UNDER THE PROPOSED RULE PARTIALLY DELAYING THE EFFECTIVE DATE OF THE 2016 

FINAL RULE

[Millions, 2016 dollars] 

Year Facility Vessel Additional 

costs * Undiscounted 7% 3% 

1 ............................................................... $41.95 $0.022 $1.73 $43.70 $40.84 $42.43 

2 ............................................................... 43.09 0.0038 3.41 46.50 40.62 43.83 

3 ............................................................... 15.36 0.0038 3.94 19.30 15.75 17.66 

4 ............................................................... 15.77 0.0038 4.46 20.23 15.43 17.97 

5 ............................................................... 3.51 0.0038 4.46 7.97 5.68 6.87 

6 ............................................................... 11.55 0.019 4.46 16.03 10.68 13.42 

7 ............................................................... 11.51 0.0038 4.46 15.97 9.95 12.99 

8 ............................................................... 5.93 0.0038 4.46 10.40 6.05 8.21 

9 ............................................................... 5.93 0.0038 4.46 10.40 5.66 7.97 

10 ............................................................. 3.51 0.0038 4.46 7.97 4.05 5.93 

Total .................................................. 158.10 0.072 40.29 198.46 154.71 177.28 

Annualized ................................. ........................ ........................ ........................ ........................ 22.03 20.78 

* These costs include additional delay, travel, and TWIC replacement costs due to TWIC failures. 

Totals may not sum due to rounding. 

Table 7 presents the estimated change 

in total costs to industry from delaying 

the implementation of the TWIC Reader 

final rule by 3 years (until August 23, 

2021) for facilities that handle bulk 

CDC, but do not transfer it to or from a 

vessel, and facilities that receive vessels 

carrying bulk CDC, but do not transfer 

it to or from the vessel during that 

vessel-to-facility interface. We estimated 

an annualized cost savings to industry 

of $1.15 million at a 7-percent discount 

rate. 

TABLE 7—TOTAL CHANGE IN INDUSTRY COST FROM THE FINAL RULE TO THE NPRM PARTIALLY DELAYING THE

EFFECTIVE DATE OF FINAL RULE

[Millions, 2016 dollars] 

Total 

10-year cost 

(not 

discounted) 

Total 10-year cost 

(discounted) 

Annualized 

cost 

7% 3% 7% 3% 

TWIC Reader Final Rule ................................................... $203.86 $162.76 $184.01 $23.17 $21.57 

NPRM to Delay Final Rule by 3 years .............................. 198.46 154.71 177.28 22.03 20.78 

Change ....................................................................... (5.40) (8.05) (6.73) (1.15) (0.79) 

Qualitative Costs 

Qualitative costs are as shown in table 

1. This proposed rule would delay the 

cost to retrieve or replace lost PINs for 

use with TWICs for the facilities with 

delayed implementation. 

Government Costs 

We expect that this proposed rule 

would also generate a cost savings to the 

government from delaying the review of 

the revised security plans for 122 Risk 

Group A facilities that handle bulk CDC, 

but do not transfer it to or from a vessel, 

and facilities that receive vessels 

carrying bulk CDC. There is no change 

in cost to the government resulting from 

TWIC inspections, because inspections 

are already required under MTSA and 


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54Because the Coast Guard is not delaying the 

implementation schedule for vessels, the proposed 

rule would have no impact on the costs associated 

with vessel security plans, and, therefore, we did 

not include them in this Regulatory Analysis. 55We calculated the total cost in year 1 as 4 hours 

× $51 × 202 FSPs; the total cost in year 2 as 4 hours 

× $51 × 201 FSP; and the total cost in years 3 and 

4 as 4 hours × $51 × 61 FSPs. 

the TWIC reader requirements do not 

modify these requirements. As such, 

there is no additional cost to the 

government 

To estimate the cost to the 

government we followed the same 

approach as the industry cost analysis 

and adjusted the cost estimate presented 

in the final rule Regulatory Analysis 

from 2012 dollars to 2016 dollars. For 

the government analysis, we used the 

fully loaded 2016 wage rate for an E–5 

level staff member, $51 per hour, from 

Commandant Instruction 7310.1R: 

Reimbursable Standard Rates, in place 

of the 2012 wage of $49 per hour.54 We 

then followed the calculations outlined 

on page 72 of the final rule Regulatory 

Analysis to estimate a government cost 

of $53,550 in the first 2 years ($51 × 4 

hours per review × 262.5 plans). Table 

8 presents the annualized baseline 

government costs of $13,785 at a 7- 

percent discount rate. 

TABLE 8—TOTAL GOVERNMENT COST UNDER 2016 TWIC READER FINAL RULE

[2016 dollars] 

Year Cost of FSP 7% 3% 

1 ................................................................................................................................................... $53,550 $50,047 $51,990 

2 ................................................................................................................................................... 53,550 46,773 50,476 

3 ................................................................................................................................................... 0 0 0 

4 ................................................................................................................................................... 0 0 0 

5 ................................................................................................................................................... 0 0 0 

6 ................................................................................................................................................... 0 0 0 

7 ................................................................................................................................................... 0 0 0 

8 ................................................................................................................................................... 0 0 0 

9 ................................................................................................................................................... 0 0 0 

10 ................................................................................................................................................. 0 0 0 

Total ...................................................................................................................................... 107,100 96,819 102,466 

Annualized ..................................................................................................................... ........................ 13,785 12,012 

Table 9 presents the government cost 

under the proposed rule. We estimated 

the annualized government cost to be 

$13,047 at a 7-percent discount rate. To 

estimate government costs in year 1 and 

year 2, we used the same approach as 

the baseline cost estimates.55

TABLE 9—TOTAL GOVERNMENT COST UNDER THE NPRM PARTIALLY DELAYING THE EFFECTIVE DATE OF THE 2016 FINAL

RULE, RISK GROUP A 

[2016 dollars] 

Year Cost of FSP 7% 3% 

1 ................................................................................................................................................... $41,208 $38,512 $40,008 

2 ................................................................................................................................................... 41,004 33,471 38,650 

3 ................................................................................................................................................... 12,444 10,158 11,388 

4 ................................................................................................................................................... 12,444 9,493 11,056 

5 ................................................................................................................................................... 0 0 0 

6 ................................................................................................................................................... 0 0 0 

7 ................................................................................................................................................... 0 0 0 

8 ................................................................................................................................................... 0 0 0 

9 ................................................................................................................................................... 0 0 0 

10 ................................................................................................................................................. 0 0 0 

Total ...................................................................................................................................... 107,100 91,635 101,102 

Annualized ..................................................................................................................... ........................ 13,047 11,852 

Table 10 presents the estimated 

change in government costs from 

delaying the implementation of the 

TWIC Reader final rule by 3 years (until 

August 23, 2021) for facilities that 

handle bulk CDC, but do not transfer it 

to or from a vessel, and facilities that 

receive vessels carrying bulk CDC, but 

do not transfer it to or from the vessel 

during that vessel-to-facility interface. 

We estimated an annualized cost 

savings to the government of $738 at a 

7-percent discount rate. 


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TABLE 10—TOTAL CHANGE IN GOVERNMENT COST FROM THE FINAL RULE TO THE NPRM DELAYING THE EFFECTIVE

DATE OF FINAL RULE

[2016 dollars] 

Total cost 

(not discounted) 

Total cost 

(discounted) 

Annualized 

cost 

7% 3% 7% 3% 

TWIC Reader Final Rule ................................................... $107,100 $96,819 $102,466 $13,785 $12,012 

NPRM to Delay Final Rule by 3 years .............................. 107,100 91,635 101,102 13,047 11,852 

Change ....................................................................... 0.0 (5,184.3) (1,364.0) (738.1) (159.9) 

Using a perpetual period of analysis, 

we estimated the total annualized cost 

savings of the proposed rule to be 

$0.552 million in 2016 dollars, using a 

7-percent discount rate. 

Change in Benefits 

As noted, this proposed rule would 

delay the effective date of the TWIC 

reader requirement for two categories of 

facilities: (1) Facilities that handle bulk 

CDC, but do not transfer it to or from a 

vessel (to comply by Aug. 23, 2021), and 

(2) facilities that receive vessels carrying 

bulk CDC but do not transfer bulk CDC 

to or from the vessel during that vesselto-facility interface. The facilities for 

which the TWIC Reader final rule 

would be delayed will not realize the 

enhanced benefits of electronic 

inspection, such as ensuring that only 

individuals who hold valid TWICs are 

granted unescorted access to secure 

areas, enhanced verification of personal 

identity, and a reduction in potential 

vulnerability by establishing earlier the 

intent of perpetrators who attempt to 

bypass or thwart the TWIC readers, until 

August 23, 2021. 

Summary of Cost Savings Under 

Executive Order 13771 

We do not anticipate any new costs to 

the industry and government if this 

proposed rule is implemented and the 

effective date of the TWIC Reader final 

rule is delayed by 3 years. Therefore, 

this proposed rule is expected to be an 

Executive Order 13771 deregulatory 

action. Table 11 summarizes the cost 

savings of this rule by comparing and 

subtracting the costs of this proposed 

rule from the TWIC Reader final rule 

costs. Because this proposed rule would 

delay the implementation of the final 

rule by 3 years for 122 facilities, it 

would result in cost savings of $8.1 

million for industry, $0.005 million for 

government, and $8.1 million total (all 

discounted at 7 percent) over a 10-year 

period of analysis. At a 7-percent 

discount rate, we estimate the 

annualized cost savings to be $1.15 

million to the industry, $0.0007 to the 

government, and $1.15 million total. 

Using a perpetual period of analysis, we 

found total annualized cost savings of 

the proposed rule to be $0.552 million 

to industry and the government. 

TABLE 11—SUMMARY OF COSTS SAVINGS UNDER EXECUTIVE ORDER 13771: FINAL RULE AND NPRM TO DELAY THE

EFFECTIVE DATE OF THE FINAL RULE

Category Cost savings of this NPRM 

(millions 2016$) 

Costs to Industry, Government and Total ($ millions, 7% discount rate) ............................. Industry: $8.050 (10-year). 

Government: $0.005 (10-year). 

Total: $8.055 (10-year). 

Industry: $1.146 (annualized). 

Government: $0.0007 (annualized). 

Total: $1.147 (annualized). 

Industry: $0.522 (perpetual). 

Government: $0.00017 (perpetual). 

Total: $0.522 (perpetual). 

Alternatives 

One regulatory alternative to this 

proposed rule is for the Coast Guard to 

take no action. Under this alternative, 

the TWIC Reader final rule would 

become effective on August 23, 2018, 

and all 122 facilities we identified in 

our final rule Regulatory Analysis, in 

addition to the unknown number of 

facilities, would be expected to comply 

with the final rule. These entities would 

be required to implement the 

requirements for the electronic 

inspection of TWICs and would incur 

the costs we estimated in our final rule 

Regulatory Analysis unless a waiver was 

granted by the Coast Guard. 

Another alternative the Coast Guard 

considered was a waiver approach. 

However, because we currently lack a 

comprehensive risk analysis on the level 

of individualized facilities, we do not 

believe this approach maximizes 

benefits. In the absence of a new 

comprehensive risk analysis, the Coast 

Guard might issue blanket waivers that 

include facilities that may indeed 

warrant the additional security of 

electronic inspection. For example, take 

2 facilities with a 5,000 gallon tank of 

a CDC each. The tank in the first facility 

is placed near enough to the perimeter 

fence in a populated area that, if the 

tank explodes, it would kill enough 

people to cause a TSI and therefore 

should require electronic TWIC 

inspection. That same tank on the other 

facility is located away from the water 

in an isolated area within the MTSA 

footprint (not near a population). If it 

explodes it does not cause a TSI and 

therefore should not need to conduct 

electronic TWIC inspection. If the Coast 

Guard issued a blanket waiver for those 

facilities with a storage tank of CDC 

with 5,000 gallons or less, then we 

would not be properly implementing 

these requirements to mitigate the risks 

as intended. 

We rejected both alternatives (‘no 

action’ and ‘waiver approach’) because 


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they do not address our need to conduct 

a comprehensive risk analysis at the 

individual facility level to determine 

whether or not those 122 facilities and 

an unknown number of facilities would 

be required to comply with the final 

rule after August 23, 2018, and also 

develop a consistent methodology that 

would form the rationale for Coast 

Guard when issuing waivers. 

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. 

The Coast Guard proposes to delay 

the effective date of the TWIC Reader 

final rule (August 23, 2018) by 3 years, 

until August 23, 2021, for facilities that 

handle bulk CDC, but do not transfer it 

to or from a vessel, and facilities that 

receive vessels carrying bulk CDC but, 

during that vessel-to-facility interface, 

do not transfer it to or from the vessel. 

These facilities will experience a cost 

savings. Therefore, we estimate that this 

proposed rule would provide cost 

savings to 122 facilities. 

Given this information, 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 ADDRESSES

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 this proposed rule would affect your 

small business, organization, or 

governmental jurisdiction and you have 

questions concerning its provisions or 

options for compliance, please contact 

the person in the FOR FURTHER

INFORMATION CONTACT section of this 

NPRM. 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 E.O. 13132 

(Federalism) if it has a substantial direct 

effect on the 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 that 

order and have determined that it is 

consistent with the fundamental 

federalism principles and preemption 

requirements described in E.O. 13132. 

Our analysis is explained below. 

This proposed rule would delay the 

implementation of existing regulations 

that create a risk-based set of security 

measures for MTSA-regulated facilities. 

Based on this analysis, each facility is 

classified according to its risk level, 

which then determines whether the 

facility will be required to conduct 

electronic TWIC inspection. As this 

proposed rule would not impose any 

new requirements, but simply delay the 

implementation of existing 

requirements, it would not have a 

preemptive impact. Please refer to the 

Coast Guard’s federalism analysis in the 

final rule entitled ‘‘Transportation 

Worker Identification Credential 

(TWIC)—Reader Requirements,’’ (81 FR 

57652, 57706) for additional 

information. 

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, 

States and local governments have 

traditionally shared certain regulatory 

jurisdiction over waterfront facilities. 

Therefore, MTSA standards contained 

in 33 CFR part 105 (Maritime security: 

Facilities) are not preemptive of State or 

local law or regulations that do not 

conflict with them (i.e., they would 

either actually conflict or would 

frustrate an overriding Federal need for 

uniformity). 

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 rule has 

implications for federalism under 

Executive Order 13132, please contact 

the person listed in the FOR FURTHER

INFORMATION section of this preamble. 

F. Unfunded Mandates Reform Act 

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 

expenditure, we discuss the effects of 

this NPRM 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 will 

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 


daltland on DSKBBV9HB2PROD with PROPOSALS
Federal Register / Vol. 83, No. 121 / Friday, June 22, 2018 / Proposed Rules 29081 

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 

although it is a ‘‘significant regulatory 

action’’ under Executive Order 12866, it 

is not likely to have a significant 

adverse effect on the supply, 

distribution, or use of energy, and the 

Administrator of OMB’s Office of 

Information and Regulatory Affairs has 

not designated it as a significant energy 

action. 

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 

and Commandant Instruction 

M16475.lD, 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 (REC) 

supporting this determination is 

available in the docket where indicated 

under the ‘‘Public Participation and 

Request for Comments’’ section of this 

preamble. This proposed rule would be 

categorically excluded under paragraph 

L54 of Appendix A, Table 1 of DHS 

Instruction Manual 023–01(series). 

Paragraph L54 pertains to regulations 

that are editorial or procedural. 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 33 CFR Part 105 

Maritime security, Reporting and 

recordkeeping requirements, Security 

measures. 

For the reasons listed in the preamble, 

the Coast Guard proposes to amend 33 

CFR part 105 as follows: 

PART 105—MARITIME SECURITY: 

FACILITIES 

■ 1. The authority citation for part 105 

continues to read as follows: 

Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. 

70103; 50 U.S.C. 191; 33 CFR 1.05–1, 6.04– 

11, 6.14, 6.16, and 6.19; Department of 

Homeland Security Delegation No. 0170.1. 

■ 2. Amend § 105.253, as proposed to be 

added August 23, 2018 at 81 FR 57712, 

by revising paragraphs (a)(1) and (2) and 

adding paragraphs (a)(3) and (4) to read 

as follows: 

§ 105.253 Risk Group classifications for 

facilities. 

(a) * * * 

(1) Beginning August 23, 2018: 

Facilities that receive vessels 

certificated to carry more than 1,000 

passengers. 

(2) Beginning August 23, 2018: 

Facilities that handle Certain Dangerous 

Cargoes (CDC) in bulk and transfer such 

cargoes from or to a vessel. 

(3) Beginning August 23, 2021: 

Facilities that handle CDC in bulk, but 

do not transfer it from or to a vessel. 

(4) Beginning August 23, 2021: 

Facilities that receive vessels carrying 

CDC in bulk but, during the vessel-tofacility interface, do not transfer it from 

or to the vessel. 

* * * * * 

Dated: June 15, 2018. 

Karl L. Schultz, 

Admiral, U.S. Coast Guard, Commandant. 

[FR Doc. 2018–13345 Filed 6–21–18; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 110 

[Docket Number USCG–2015–1118] 

RIN 1625–AA01 

Anchorage Grounds; Lower 

Chesapeake Bay, Cape Charles, VA 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking; 

notice of public meetings. 

SUMMARY: The Coast Guard proposes to 

amend the regulations for Hampton 

Roads, Virginia and adjacent water 

anchorage grounds by establishing a 

new, deep-water anchorage ground and 

relocating an existing anchorage ground 

near Cape Charles, VA on the Lower 

Chesapeake Bay. Maritime 

infrastructure improvements and growth 

in both size and volume of vessel traffic 

entering the port, including large and 

deep-draft vessels have prompted this 

proposed rulemaking to ensure that the 

Hampton Roads Anchorage Grounds 

continue to safely and effectively 

support current and future deep-draft 

vessel anchorage demands. We moved 

the proposed locations of the anchorage 

grounds in this notice of proposed 

rulemaking (NPRM) further offshore 

than the potential locations we 

identified in an advance notice of 

proposed rulemaking (ANPRM) we 

published in 2016. We did so based on 

our review and analysis of public 

comments on the ANPRM and the 

results of an environmental study 

referenced in our preliminary Record of 

Environmental Consideration for this 

NPRM. We propose to establish an 

Anchorage R that is further offshore of 

Cape Charles, VA, and to relocate the 

existing Anchorage Q (Quarantine 

Anchorage) south of its current location 

to a more secluded location on the 

southern Chesapeake Bay. The intended 

effect of this proposed rulemaking is to 

protect the environment, facilitate the 

safe navigation of maritime commerce 

and national defense assets, and more 

safely and effectively support 

commercial vessel anchoring 

requirements on the Lower Chesapeake 

Bay. We invite your comments on this 

proposed rulemaking. 

DATES: Comments and related material 

must be received by the Coast Guard on 

or before July 17, 2018. Additionally, 

the Coast Guard will hold several public 

meetings to allow the public the 

opportunity to provide comment. The 

first public meeting will be held on 


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