63444 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

§ 424.57 Special payment rules for items

furnished by DMEPOS suppliers and

issuance of DMEPOS supplier billing

numbers.

* * * * *

(c) Medicare does not issue a billing

number to a supplier that submits

claims for items listed in § 421.210(b) of

this subchapter until that supplier

meets, and certifies that it meets, the

following standards. The supplier—

(1) In response to orders which it

receives, fills those orders from its own

inventory or inventory in other

companies with which it has contracted

to fill such orders or fabricates or fits

items for sale from supplies it buys

under a contract;

(2) Is responsible for delivery of

Medicare covered items to Medicare

beneficiaries;

(3) Honors all warranties express and

implied under applicable State law;

(4) Answers any questions or

complaints a beneficiary has about the

item or use of the item that was sold or

rented to him or her, and refers

beneficiaries with Medicare questions to

the appropriate carrier;

(5) Maintains and repairs directly or

through a service contract with another

company, items it has rented to

beneficiaries;

(6) Accepts returns of substandard

(less than full quality for the particular

item) or unsuitable items (inappropriate

for the beneficiary at the time it was

fitted and/or sold) from beneficiaries;

(7) Discloses consumer information to

each beneficiary with whom it does

business which consists of the supplier

standards to which it must conform;

(8) Complies with the disclosure

provisions in § 420.206.

(9) Complies with all applicable State

and Federal licensure and regulatory

requirements;

(10) Maintains a physical facility on

an appropriate site; and

(11) Has proof of appropriate liability

insurance.

* * * * *

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare—Hospital

Insurance; and Program No. 93.774,

Medicare—Supplementary Medical

Insurance Program)

Dated: November 22, 1995.

Bruce C. Vladeck,

Administrator, Health Care Financing

Administration.

[FR Doc. 95–30065 Filed 12–8–95; 8:45 am]

BILLING CODE 4120–01–P

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 1

[OST Docket No. 1; Amendment 1–272]

Organization and Delegation of Powers

and Duties; Transfer of Great Lakes

Pilotage Authority From the Coast

Guard to the Saint Lawrence Seaway

Development Corporation

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

SUMMARY: The Coast Guard’s

responsibility for administering the

Secretary’s functions under the Great

Lakes Pilotage Act of 1960, as amended,

and the Secretary’s authority to enter

into, revise, or amend arrangements

with Canada, are being transferred to the

Saint Lawrence Seaway Development

Corporation. This rule affirms the

interim final rule amending the

delegations to be in accordance with the

changed responsibilities. Although a

comment period for the Secretary’s

delegations is not required by the

Administrative Procedure Act, the

Department of Transportation requested

public comment on the interim final

rule because of public and

Congressional interest in Great Lakes

Pilotage. This final rule responds to the

comments and is necessary to inform

the public that the interim final rule has

been affirmed.

DATES: This rule is effective on

December 11, 1995.

FOR FURTHER INFORMATION CONTACT:

Steven B. Farbman, Office of the

Assistant General Counsel for

Regulation and Enforcement (202) 366–

9306, United States Department of

Transportation, 400 7th Street SW.,

Washington, DC 20590.

REGULATORY HISTORY: On July 31, 1995,

the Department of Transportation

(Department) published an interim final

rule with request for comments (60 FR

38971). The interim final rule contained

language that would transfer Great

Lakes Pilotage authority from the Coast

Guard to the St. Lawrence Seaway

Development Corporation (SLSDC). The

comment period for the interim final

rule ended on September 29, 1995, and

was to become effective October 30,

1995. On October 27, 1995, the

Department issued a rule suspending

the effectiveness of the interim final

rule. This final rule affirms the interim

final rule and establishes a new effective

date.

SUPPLEMENTARY INFORMATION: The Coast

Guard’s responsibility for administering

the Secretary’s functions under the

Great Lakes Pilotage Act of 1960, as

amended, (the Act) is being transferred

to the SLSDC. This rule amends the

delegations and enabling regulations to

be in accordance with the changed

responsibilities. The functions that are

being transferred are: (1) Investigation

and prosecution of violations of the Act;

(2) registration, qualification, and

training of registered pilots; (3)

association working rules and

dispatching procedures; (4) pilot

working conditions; (5) selection of

pilots; (6) number of pilots; (7)

availability of pilots; (8) number of

pilotage pools; (9) articles of association;

(10) auditing; and (11) ratemaking. The

licensing of pilots and the investigation

and prosecution of marine accidents

and incidents are essential Coast Guard

safety functions that are separate from

the Act and Great Lakes Pilotage

Regulations. These functions will

remain with the Coast Guard.

Transfer of pilotage responsibilities to

the SLSDC will place pilotage under

permanent civilian authority, and

placing pilotage in a smaller

organization with an established

presence on the Great Lakes will give

pilotage issues greater visibility and

more timely attention. In addition, the

SLSDC is being given authority to

negotiate directly with Canada, which

will allow timely adjustments to

pilotage rates. The lack of timely

adjustments has been a subject of past

pilot criticism.

The Secretary’s authority to enter

into, revise, or amend arrangements

with Canada is being delegated to the

SLSDC Administrator in coordination

with the General Counsel of the

Department. A Memorandum of

Arrangements between the United

States and Canada, last renegotiated in

1977, states that the Secretary and the

Minister of Transport of Canada ‘‘will

arrange for the establishment of

regulations imposing identical rates,

charges, and any other conditions or

terms for services of pilots in the waters

of the Great Lakes. * * *.’’ In 1983, the

Act was amended to provide that the

‘‘Secretary, subject to the concurrence of

the Secretary of State, may make

agreements with the appropriate agency

of Canada to * * * prescribe joint or

identical rates and charges .’’

Discussion of Comments and Changes

The Department received comments

from well over 100 commenters

regarding the transfer of Great Lakes

Pilotage oversight from the Coast Guard

to the SLSDC. Comments on the interim

final rule were received from Federal

and State legislators, pilot associations
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations 63445

and their employees, individual pilots,

professional maritime organizations,

shipping associations, port authorities,

labor organizations, marine service

companies, an environmental group,

one State regulatory agency, and

interested members of the public.

The interim final rule was supported

in comments from Members of

Congress, individual members of the

public, port authorities, labor

organizations, professional maritime

organizations, pilot organizations,

pilots, a pilot association and its

employees, and marine service

companies. Among the organizations

supporting the rule is the owner and

operator of one of the largest fleet of

Great Lakes-dedicated deep sea ships;

this organization is also one of the

largest consumers of pilotage services in

the St. Lawrence Seaway system. Also

in support of the rule was the

Association of Great Lakes Ports,

representing the public port authorities

of Green Bay, Milwaukee, Chicago,

Burns Harbor, Detroit, Monroe, Toledo,

Cleveland, Erie, Ogdensburg, Superior,

and Oswego. Comments in support of

the transfer of delegation also came from

the International Longshoremen’s

Association (ILA) and individual ports,

representing approximately 95,000

members and associated parties. A

subgroup of the ILA, representing

approximately 10,000 members, the

International Organization of Masters,

Mates and Pilots, is in favor of

transferring delegation from the Coast

Guard, but want it moved to an

‘‘Undersecretary’’ in the Department. Of

the three Great Lakes pilot associations,

District 2 favors the transfer to SLSDC.

As of the close of the comment period,

there were 12 pilots in District 2.

Those in favor gave the following

reasons in support of the transfer of

delegation: (1) the SLSDC is a smaller

organization than the Coast Guard, and

it can significantly reduce the amount of

‘‘red tape’’ associated with pilotage

oversight; (2) the SLSDC is a civilian

agency, and it can guarantee a civilian

Director of Great Lakes Pilotage with

better continuity than a military

Director; (3) the SLSDC’s focus is on the

Great Lakes; (4) pilotage issues would

receive more attention from the

Administrator of the SLSDC and the

Secretary of Transportation; and (5) the

SLSDC’s interaction with all elements of

the Great Lakes community would give

the pilots significant new contacts with

their customer base.

The interim final rule was opposed in

comments from Members of Congress

and State legislators, pilot associations

and their employees, individual pilots,

professional maritime organizations,

shipping associations, an environmental

group, one State regulatory agency, and

interested members of the public.

Among the organizations opposed to the

transfer are the American Pilots

Association, Save The River, Inc., Lake

Carriers’ Association, and the

Association of International Ship

Masters, which represents about 3,000

to 5,000 members. Of the three Great

Lakes pilot associations, Districts 1 and

3 oppose the transfer. As of the close of

the comment period, there were 9 pilots

in District 1 and 19 pilots in District 3.

Those objecting to the transfer of

authority did so for the following

reasons: (1) The SLSDC is primarily

concerned with economic and financial

issues, and, because of this focus, it will

sacrifice safety by reducing American

pilotage jobs and pay, increasing hours

of service, or taking other actions that

will have an impact on the working

conditions of pilots and, therefore, the

protection of the environment; (2) many

of the functions being transferred to the

SLSDC are related to both safety and

economics; (3) the SLSDC does not have

the knowledge to oversee pilotage or

negotiate with Canadian officials

regarding pilotage issues; (4) the Coast

Guard’s recent transfer of Great Lakes

pilotage oversight to the newlyestablished National Maritime Center

(NMC) reduces red tape, and establishes

a civilian Director without the need for

a transfer; (5) the fate of the SLSDC is

in transition because of the DOT’s

restructuring plans, and this

restructuring will remove the SLSDC

and Great Lakes pilotage from

government oversight; (6) there should

have been more public input and more

information published regarding the

transfer of authority, including

extensive public hearings; (7) the

interim final rule violated the notice

and comment requirements of the

Administrative Procedure Act (APA);

and (8) Congress intended that pilotage

functions remain in the Coast Guard.

The Department agrees with those

commenters who stated that many of the

11 functions being transferred to the

SLSDC relate in part to safety as well as

economics. While the interim final rule

stated that those functions ‘‘are

considered to have economic effects,’’

the Department did not mean to imply

that only economic functions could be

transferred. The fact that there are safety

ramifications involved, however, should

not, and does not, disqualify SLSDC as

the agency in which the authority

should reside.

Some commenters opposing the rule

pointed to a November 1994 Coast

Guard memorandum approved by the

Secretary; attached to the November

1994 memorandum is an options paper,

which noted that both safety and

economic functions are vested in the

Director of Great Lakes Pilotage, and

that the registration of pilots is a safety

function. It also acknowledged that

some economic issues such as travel

and work-hour limits also have safety

implications (e.g., their effect on

fatigue). Four options for Departmental

oversight of Great Lakes pilotage

functions, each listing pros and cons

were provided: (1) Separate safety and

economic oversight; (2) retain in the

Coast Guard; (3) transfer to the Office of

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

SLSDC/MARAD.

Included in this last option was the

following statement: ‘‘A transfer to

SLSDC or MARAD may have an adverse

impact on safety because the mission of

each agency is economic in nature and

primarily associated with promotion of

shipping.’’ The memorandum that the

Secretary approved recommended that

the responsibility for safety aspects of

Great Lakes pilotage remain with the

Coast Guard, but that economic

elements of pilotage oversight be

transferred to another Department office

or agency. It also recommended that a

Great Lakes Pilotage Working Group

(Working Group) be formed to develop

this option.

The Working Group was formed and

included representatives from OST, the

Coast Guard, MARAD, and SLSDC. In

developing the option that SLSDC

should assume responsibility for the 11

Great Lakes pilotage functions, the Final

Report of the Working Group was not

inconsistent with the November 1994

memorandum, which had stated that a

transfer to SLSDC may have an adverse

impact on safety. The Final Report

listed the functions to be transferred

under the heading, ‘‘Economic

Functions,’’ and it referred to them as

‘‘essentially economic functions. * * *’’

The Department believes that the 11

functions are essentially, though not

entirely, economic functions. The

option in the November 1994

memorandum that contained the

‘‘adverse impact on safety’’ statement

envisioned the transfer to SLSDC of not

only the 11 ‘‘essentially economic’’

functions, but the following two safety

functions as well: (1) The licensing of

pilots and (2) the investigation and

prosecution of marine accidents and

incidents.

The Final Report judged these to be

essential Coast Guard functions solely

related to safety, and said they should

remain with the Coast Guard. Similarly,

the November 1994 memorandum

intended that responsibility for only the

safety aspects of Great Lakes pilotage
63446 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

remain with the Coast Guard, but not

those ‘‘essentially economic’’ functions

that also have safety ramifications. In

fact, the Final Report stated that the

Working Group believed that the

transfer of the 11 functions out of the

Coast Guard—to any other recipient,

including the SLSDC—would not have

a detrimental effect on safety.

Moreover, to the extent the functions

involve safety, the Department has

determined there is no problem

transferring them to the SLSDC. As

described below, the SLSDC has

significant safety responsibilities, which

it has performed successfully for over

thirty-five years. An examination of the

SLSDC’s operations shows that it has an

impeccable safety record with respect to

its authority over one of the most

difficult sections of the entire Great

Lakes/Saint Lawrence Seaway System.

Furthermore, in implementing its safety

responsibilities, there is no evidence

that the SLSDC has ever sacrificed

safety considerations for economic gain.

The SLSDC operates two locks, a fleet

of vessels, maintains navigational aids,

and carries out safety inspections of

vessels. In the St. Lawrence Seaway

System, the SLSDC works closely with

the Coast Guard, and performs the same

Captain-of-the-Port functions in the

principal operating areas of the Seaway

System that the Coast Guard performs

elsewhere. In the Port and Tanker Safety

Act of 1978, Congress expressly

reserved that authority to the SLSDC.

In addition, the SLSDC has a

comprehensive emergency response

plan designed to protect the

environment on the St. Lawrence River

and adjacent areas. The plan directly

involves U.S. and Canadian Federal,

state, and local governments, private

organizations, and other interested

parties, including pilots. The plan is in

place, is tested yearly, and has been

used in actual circumstances twice with

complete success. This year’s drill

included participation by Federal, state,

and local agencies, in addition to

representatives from U.S. and Canadian

pilot organizations.

The SLSDC also has ample, longstanding safety law enforcement

experience. It is responsible for

administration of the Seaway

Regulations and Rules (33 CFR Part 401)

regarding the clearance, readiness, and

operating requirements for safe passage

of vessels transiting the St. Lawrence

Seaway. It operates the Seaway under

these regulations, which are jointly

promulgated and enforced with the

Canadian Saint Lawrence Seaway

Authority and which contain many

vessel safety rules. In addition, its

Captain-of-the-Port responsibility

carries with it enforcement authority,

including the ability to fine for

violations, which the SLSDC exercises

under subpart B of part 401.

The SLSDC not only has this

independent, significant law

enforcement experience, but under an

agreement with the Coast Guard, the

SLSDC coordinates the exercise of its

authority with related enforcement

activities of the Coast Guard, including

those related to pilotage. Moreover, the

SLSDC’s personnel carry out many of

the Coast Guard inspection and related

functions for the Coast Guard, including

inspections performed by the SLSDC in

Canadian waters before vessels transit

the Seaway. In this regard, the SLSDC

has the added advantages of longstanding, joint enforcement with Canada

of laws and regulations relative to the

Seaway, including safety laws and

regulations, and ready, cooperative

access to Canadian waters for joint as

well as U.S. law enforcement purposes.

Several commenters cited the

SLSDC’s handling of an incident

involving the M/T CONCORDE as a

demonstration of the SLSDC’s concern

for economics over safety, alleging that

the SLSDC permitted a master who was

drunk to pilot a vessel alone. This refers

to an incident in which it was reported

to U.S. and Canadian authorities that

the master of the M/T CONCORDE may

have been intoxicated. Upon learning of

these allegations, the St. Lawrence

Seaway Pilots Association (SLSPA)

requested permission to assign two

pilots to the vessel. In response to the

allegations of intoxication, the M/T

CONCORDE was boarded by the Coast

Guard and the master was given a

breathalyzer test. The master not only

passed the breathalyzer test, but he

showed no signs of misuse of alcohol.

As a result of the U.S. Coast Guard

boarding, the Coast Guard, the SLSDC,

and the Canadian Great Lakes Pilotage

Authority cleared the M/T CONCORDE

to proceed on its voyage without

restriction with one pilot. Accordingly,

the Department finds no basis for the

position of those commenters who

described this incident as an example of

the SLSDC favoring economics over

safety. Rather, the Department believes

that it is an excellent example of

coordination and cooperation among the

Coast Guard, SLSDC, and Canadian

authorities regarding safety issues that

affect the entire St. Lawrence Seaway.

Some commenters objected to the

interim final rule’s characterization that

it was issued in response to ‘‘pilot

concerns;’’ they argued instead that it

was issued in response to outside

political pressure. Some commenters

stated that the transfer of authority is

supported by only one Great Lakes

Registered pilot, and is opposed by all

three Great Lakes pilot associations.

The Department’s examination of a

possible transfer of Great Lakes pilotage

authority was the result of a request

from a delegation of interested persons,

which included the President of a Great

Lakes Pilot Association (also Vice

President of the American Pilots

Association for the Great Lakes), and

President of the American Pilots

Association. These organizations

expressed concerns on behalf of their

members about the lengthy ratemaking

process and the lack of prompt attention

given to pilotage issues. The Department

continued its examination and

discovered that similar concerns were

expressed by many other interested

parties throughout the Great Lakes.

Commenters who believe the transfer of

authority is not supported by any pilots

are incorrect. While two Great Lakes

Pilot Associations are opposed to the

transfer, one Great Lakes Pilot

Association supports the transfer.

Letters of support for the transfer were

also received from individual Great

Lakes Registered Pilots, and from many

other interested Great Lakes parties. The

Department did not issue the interim

final rule in response to Congressional

pressure. Although the Department has

received some Congressional support for

the transfer, it has also received letters

from individual Members of Congress

expressing misgivings.

Some commenters contended that the

SLSDC lacks the knowledge or

experience to negotiate issues with

Canada. The Department disagrees. The

SLSDC has over thirty-five years of

experience in direct negotiations with

the government of Canada over the Joint

Tariff of Tolls, Joint Seaway Operating

Regulations, and other matters of

mutual concern. Moreover, the SLSDC

has daily contact and coordination of

activities and implementation of

policies with the Great Lakes Pilotage

Authority, Ltd. and the Canadian

Seaway authority. In this respect, the

SLSDC is experienced in, and well

suited to, the role of negotiator on

pilotage matters with the Canadian

government.

Some commenters stated that out of

the 12 or so reviewers of rate

adjustments, the SLSDC is the one

agency that consistently opposed rate

adjustments and was responsible for

slowing down or halting the process.

The Department, however, has found

the opposite to be true. The Department

has checked its records for the last

seven years, the time during which a

rulemaking data base has been kept,

and, in that time period, the SLSDC has
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations 63447

not opposed rate adjustments or been

responsible for slowing down or halting

the process.

Some commenters declared that only

the Coast Guard has pilotage expertise

such as the experience to determine

who is qualified to be a registered pilot.

We are aware, too, that the Inspector

General of the Department has sent a

letter to Congressman David Obey,

claiming that the SLSDC has no

experience or expertise in many, if not

all, of the responsibilities to be

transferred. (The Inspector General also

has raised this concern in the

Department’s coordination of the

interim final rule.) The pilotage

expertise resides in the Coast Guard’s

Great Lakes Pilotage Staff (the Staff),

which is comprised of the Director of

Great Lakes Pilotage, a Transportation

Specialist who serves as the Assistant

Director, and an Economist; the Staff

and, thus, the expertise will transfer in

its entirety to the SLSDC when the

functions are transferred. Those who are

executing the Great Lakes pilotage

program now, including enforcement of

the Act, will continue to do so after the

transfer.

The Staff will continue to operate in

the SLSDC in the same manner in which

it has operated in the Coast Guard. In

preparation for the upcoming winter

meetings of the three pilot associations,

the Director of Great Lakes Pilotage has

written to each of the association

presidents to make them aware of

pilotage issues that he would like to

discuss. In each letter, the Director

stated that he would like to reach an

agreement on how the process can be

improved. ‘‘Identifying the areas where

we need better procedures is beneficial

to the system and the goals of safety. In

the spirit of partnership, I hope we can

improve the process together.’’ These

same goals are transferring to the SLSDC

with the Director.

Moreover, since shortly before its

transfer to the NMC in July 1995, the

Staff has performed its Great Lakes

pilotage responsibilities without

receiving any specialized Coast Guard

support to enable the Staff to perform

these responsibilities better. It is not

clear, therefore, why some believe that

the expertise will suddenly evaporate

when the Staff is transferred to the

SLSDC. Furthermore, the SLSDC itself

has developed an expertise in pilotage

issues; it has directed vessel traffic in

the Seaway system for decades and in

so doing has substantial experience in

dealing with pilots and pilotage matters.

To the extent the Coast Guard has some

special expertise necessary for a

particular matter, the Staff can obtain

Coast Guard support regardless of where

the Staff is located.

Some commenters questioned

Department statements that the current

Director of Great Lakes Pilotage has ten

years of experience in Great Lakes

Pilotage issues. The person who is the

current Director became the Assistant

Chief of the Coast Guard’s Merchant

Vessel Personnel Division in January

1985. As Assistant Chief, the Coast

Guard’s Pilotage Staff reported to him,

and he was involved in every major

pilotage policy decision. Since the

function was moved from Cleveland to

Washington, DC in 1990, he has been

the alternate Director of Great Lakes

Pilotage, that is, the person acting as

Director in the latter’s absence. In 1994,

he assumed his present duties as

Director of Great Lakes Pilotage. In

addition, his career includes over 20

years of experience as a merchant

marine officer, an officer in charge of

U.S. naval vessels, navigation and

seamanship instructor at the U.S. Naval

Academy, and head of the Navigation

Department at the Maritime Institute of

Technology and Graduate Studies, an

advanced school operated by the

International Organization of Masters,

Mates and Pilots. The Assistant Chief of

the Pilotage staff also has many years of

experience as a merchant marine officer,

has commanded a vessel, and is a

licensed first class pilot on the Great

Lakes.

Some commenters asked what the

relationship would be between the

Coast Guard and the SLSDC after the

transfer of delegation of pilotage

functions. The Department expects the

Coast Guard and SLSDC to continue

their current strong relationship of

cooperation and coordination.

Concerning pilotage on the Great Lakes,

the Coast Guard will continue to

perform the functions of evaluating,

testing, grading, issuing and upgrading

pilot licenses, investigating accidents

and other infractions, and suspending or

revoking pilot licenses. The SLSDC will

perform all other functions related to

Great Lakes registered pilots. The Coast

Guard and SLSDC will enter into a

Memorandum of Agreement (MOA) to

ensure coordination and cooperation

between the parties.

One commenter argued that giving

SLSDC the authority to enter into,

revise, or amend arrangements with

Canada with respect to pilotage rates,

which until now has been reserved to

the Secretary, may cost U.S. jobs as a

bargaining tool to extract concessions

from Canada on Seaway tolls. The

Department disagrees. The transfer of

the delegation of authority does not

affect pilotage jobs, pay, or working

conditions, increase hours of service, or

impact adversely on safety or the

environment. There is no connection

between negotiations with Canada on

Seaway tolls and on pilotage rates.

Pilotage rates are now set in accordance

with the published methodology;

because rules setting pilotage rates

generally are significant, Department

policy requires that they be coordinated

with and cleared through several

Department offices and agencies before

negotiations with Canada begin. Those

negotiations were routinely conducted

in the past by Coast Guard staff in

Cleveland with no involvement by the

Office of the Secretary or any of the

other Department agencies. Under this

delegation, the Secretary’s authority to

enter into, revise, or amend

arrangements with Canada must be

coordinated by SLSDC with the General

Counsel of the Department, in the Office

of the Secretary.

That same commenter averred that the

May 1972 Great Lakes Pilotage Review

by the Department said that the

significant policy leadership and review

function must be retained by the Office

of the Secretary. Policy review and

oversight of pilotage is so retained. The

Secretary is transferring one of his

responsibilities from one agency that

reports to him (the Coast Guard) to

another (the SLSDC). He is not

abrogating his responsibilities. The

pilotage functions and personnel

positions created to carry them out are

designed to ensure that those

responsibilities will be fully met. The

individuals who occupy the positions

must meet the requirements and

qualifications demanded of those

positions, irrespective of the agency in

which they reside.

The same commenter claimed that it

is the layers of review by the Office of

the Secretary (OST), not the size of the

Coast Guard or negotiations with

Canada, that have created the less than

timely attention to pilotage issues and

less than timely rate adjustments. Again,

the Department disagrees. Coordination

by OST allows review among interested

Department elements. This review is

necessary in the Department’s decisionmaking process. The Department’s

experience shows that OST review has

not caused unreasonable delay.

Furthermore, there are no ‘‘layers of

review;’’ review by OST and other

interested elements is accomplished in

one step and the document is then sent

to the Secretary for approval.

On the other hand, there can be

multiple layers of review in Department

agencies before a document is submitted

to OST for coordination. Although

approvals can take varying amounts of
63448 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

time, the Department has no doubt that

the SLSDC, with a short review process,

will be able to give more timely

attention to pilotage issues and make

more timely rate adjustments than

would the Coast Guard, including the

NMC. In addition, a transfer to the

SLSDC would guarantee that there

would always be a civilian Director of

Great Lakes Pilotage.

Some commenters believe that the

transfer should not take place during the

busiest part of the shipping season, i.e.,

November and December. These

commenters indicated that a transfer at

this time will disrupt pilotage

operations. They cited the Final Report,

which says that a target date for the

transfer of March 31 is believed to be

necessary to minimize disruption to the

operation of the pilotage pools. If the

Working Group believed that there

would have been disruption had the

transfer taken place in April, the

commenters argued, how could there

not be disruption to the operation of the

pilotage pools during the height of the

shipping season?

The Department expects no

disruption to pilotage operations,

notwithstanding the position of the

Working Group. The transfer does not in

any way represent a shift in pilotage

policies or operations. It only affects the

internal delegation of responsibilities

within the Department. There should be

no negative effect on pilotage service.

This rule will not change the pilotage

rules and the manner in which they are

administered, make the pilots

employees of the SLSDC, or change the

status or organizational structure under

which the pilots now function. As it is

with the Coast Guard, pilotage safety

will remain the paramount concern of

the SLSDC and will not become

secondary to economic considerations.

Since the Great Lakes Pilotage Staff is

transferring with the functions, the only

expected change is that the phone

numbers for the Great Lakes Pilotage

Staff will change. The new phone

numbers will be widely distributed, and

will not cause a disruption to pilotage

operations.

The DOT restructuring, if it occurs,

will not remove Great Lakes pilotage

from Federal government oversight. The

Administrator will always exercise

authority over Great Lakes pilotage

under a delegation from the Secretary of

Transportation and his successors. The

transfer would not compromise the

Secretary’s ability to intervene in

pilotage issues should that become

necessary. Even if the SLSDC were to

become separate from the Department,

the legislation proposed by the

Administration to accomplish this

would provide for continued delegation

of Secretarial authority to the SLSDC.

The SLSDC would also remain a

wholly-owned Federal government

agency. The proposed legislation, in

pertinent part, reads as follows:

(b) Section 1 of the Act of May 13, 1954,

Public Law 358 (33 U.S.C. 981), as amended,

is amended to read as follows:

‘‘(a) There is hereby created a body

corporate to be known as the Saint Lawrence

Seaway Development Corporation

(hereinafter referred to as the ’Corporation’).

‘‘(b) The Secretary of Transportation may

delegate his or her authority to the

Administrator as the Secretary deems

appropriate or as directed by law.’’

Thus the Secretary’s ability to

intervene would continue. If the

legislation is enacted, the manner in

which the Secretary’s oversight of Great

Lakes pilotage would be carried out

would be set forth in a document to be

published in the Federal Register.

In a ‘‘voice mail’’ communication

from counsel for the SLSPA to an OST

staff attorney, an additional argument

against the transfer was posed. A

memorandum concerning this

communication has been entered into

the docket. SLSPA’s counsel points out

that the Great Lakes Pilotage Act is set

forth in section 46 of the United States

Code (U.S.C.), which contains the

following definition at 46 U.S.C. 2101:

(34) ‘‘Secretary’’, except in part H, means

the head of the department in which the

Coast Guard is operating.

Since Great Lakes Pilotage is

contained in Part F, this definition of

‘‘Secretary’’ pertains to it. The SLSPA

maintains that whatever Congress

intended to reside within the Coast

Guard is contained within Title 46

under this definition and that, therefore,

this transfer to the SLSDC would be in

contravention of Congressional intent.

Three Members of Congress submitted

to the Secretary the House Report for the

legislation that defines ‘‘Secretary.’’ The

report states: ‘‘ ‘Section 2101(34) defines

‘Secretary’ so that maritime safety and

seamen’s welfare jurisdiction remains

within the Coast Guard at all times.’’

They also refer to 46 U.S.C. 2104(a),

which states that ‘‘[t]he Secretary may

delegate the duties and powers

conferred by this subtitle [which

includes Great Lakes pilotage] to any

officer, employer, or member of the

Coast Guard * * *.’’ The Congressmen

conclude that the House Report and the

statutory section concerning delegation

‘‘appear to confirm Congress’s

determination that [Great Lakes pilotage

functions] reside with the Coast Guard.’’

The definition of ‘‘Secretary,’’ which

is clear on its face, does not change with

the transfer of pilotage authority to the

SLSDC. The Secretary of Transportation

is still the head of the Department in

which the Coast Guard is operating.

Upon declaration of war or when the

President directs, the Coast Guard

would operate in the Navy (14 U.S.C. 3).

In that event, the Secretary of Defense

would be the head of the Department in

which the Coast Guard is operating.

(N.B.: even during the Vietnam War and

the Persian Gulf War, the Coast Guard

remained part of the Department of

Transportation.) The House Report

explanation is not the statutory

definition. Even if it were the statutory

definition, it says that maritime safety is

to remain in the Coast Guard at all

times. While many of the 11 functions

to be transferred have safety

ramifications, they are still essentially

economic. The House Report language

did not address where functions should

reside that fall outside the parameters of

maritime safety and seamen’s welfare

jurisdiction.

That Congress did not intend that all

statutory authority that comes under the

above-cited definition of Secretary

reside in the Coast Guard is

demonstrated by the Port and Tanker

Safety Act of 1978. That Act contains

the following definition at 33 U.S.C.

1222:

(2) ‘‘Secretary’’ means the Secretary of the

department in which the Coast Guard is

operating.

Nevertheless, that Act also states that

certain authority granted to the

Secretary shall not be delegated to any

agency other than the Saint Lawrence

Seaway Development Corporation (33

USC 1229). Thus, Congress envisioned a

situation in which authority residing

within the ‘‘Department in which the

Coast Guard is operating’’ not only

could be delegated to an agency within

the Department of Transportation that

was not the Coast Guard, but must not

be delegated to the Coast Guard.

Moreover, by this language, Congress

has also demonstrated that, when it

intends for authority to remain within

one agency and not be delegated

elsewhere, it will so state.

Furthermore, had Congress desired

that the Great Lakes pilotage function

remain solely within the Coast Guard, it

could have given the authority directly

to the Commandant instead of the

Secretary. By contrast, in other

circumstances, Congress has given

authority, not first to the Secretary to be

delegated, but directly to the Federal

Aviation Administrator and to the

Federal Highway Administrator. For

example, the Intermodal Surface

Transportation Efficiency Act of 1991
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations 63449

(section 6016) directs the Federal

Highway Administrator to conduct

certain studies, while legislation

concerning nationality and ownership

of aircraft as well as safety regulation of

civil aeronautics gives authority to the

Federal Aviation Administrator (49

U.S.C. 44101 et seq.; 49 U.S.C. 44701

through 44717, 44720 through 44722).

(N.B.: Within the safety regulation

chapter, three sections, 49 U.S.C. 44718,

44719, and 44723, set forth

requirements for the Secretary.)

Moreover, the Department of

Transportation Act (Public Law 89–670,

1966) (DOT Act), which created the

Department, specifically authorized the

Federal Railroad Administrator and the

Federal Highway Administrator to carry

out certain functions, powers, and

duties of the Secretary (section 6(f)

(3)(A) and (3)(B)). Unlike 46 U.S.C.

2104(a), which states that the Secretary

‘‘may’’ delegate duties and powers to

any officer, employee, or member of the

Coast Guard, the DOT Act stated that

the Federal Railroad and Highway

Administrators ‘‘shall’’ carry out the

functions, duties, and powers of the

Secretary. In addition, the DOT Act did

not authorize the Commandant of the

Coast Guard to carry out the functions,

powers, and duties of the Secretary

regarding Great Lakes pilotage. On the

contrary, the DOT Act, which

transferred the Coast Guard to the

Department, also transferred to, and

vested in the Secretary, the functions,

powers, and duties relating to the Coast

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

In a formal comment to the docket,

the SLSPA also argued that the interim

final rule violated the notice and

comment requirements of the APA. It

asserted that the statutory exemption

from the notice and comment

requirements does not extend to ‘‘any

action which goes beyond formality and

substantially affects the rights of those

over whom the agency exercises

authority.’’ [citation omitted.] The

SLSPA concluded that since this rule

affects timeliness and, therefore,

substantially affects the rights of pilots,

the exemption does not apply. It

pointed to the timely adjustments to

pilotage rates as demonstrating the

effect of the rule on the rights of pilots.

It contended that the Department failed

to provide a concise general statement

of its basis and purpose, as required by

the APA, and that no explanation was

offered for overturning a regulation that

‘‘has been in place since DOT was

established in 1967.’’

The Department disagrees. If the

Department were to accept SLSPA’s

argument that, since the rule affects

timeliness and, therefore, substantially

affects the rights of pilots, all

delegations of authority would have to

be published for notice and comment.

One of the paramount reasons for

delegations is to reduce delays by

eliminating needless work at the top

levels. All delegations, therefore, can

affect timeliness. Moreover, requesting

public comment on delegations of

authority is not required by the APA. 5

U.S.C. 553(b)(3)(A) states that the notice

and comment requirements of the APA

do not apply to rules of agency

organization, procedure, or practice.

The Department, therefore, disagrees

with SLSPA’s contention that notice

and comment are required for this

delegation. In its discretion, however,

the Department did offer a 60-day

comment period; it even suspended the

effectiveness of the interim final rule to

allow the Department additional time to

consider all the issues raised in the

comments.

The Department disagrees with the

SLSPA’s APA argument that the

Department did not provide a concise

general statement of its basis and

purpose and did not offer an

explanation for overturning a regulation

that had been in place since the

Department was established. Putting

aside the question of whether a concise

general statement is even required, the

Department provided one. The interim

final rule stated that the transfer of

responsibilities from the Coast Guard to

the SLSDC ‘‘will place pilotage under

permanent civilian authority, and

placing pilotage in a smaller

organization with an established

presence on the Great Lakes will give

pilotage issues greater visibility and

more timely attention. In addition,

SLSDC is being given authority to

negotiate directly with Canada, which

will allow timely adjustments to

pilotage rates.’’ This statement contains

the Department’s basis and purpose for

the change. A small SLSDC, when

compared with the Coast Guard in

general or even the NMC within the

Coast Guard, will be able to give more

timely attention to pilotage issues and

make more timely rate adjustments.

Many commenters opposed to the

transfer claimed that they were given no

opportunity to have input into the

process and therefore the interim final

rule is invalid. The Department

disagrees. As we have demonstrated

earlier, a comment period is not

required by the APA. Nevertheless,

because of public and Congressional

interest in Great Lakes pilotage, the

Department took the extraordinary step

of providing an opportunity for public

comment on this rule and provided 60

days for the receipt of public comment.

In accordance with its published

procedures, the Department even

accepted comments after the 60 days

had elapsed. The Department, thus, has

provided ample opportunity for public

input and has thoroughly considered

that input before issuing this rule.

Several commenters, however,

requested that the Department hold a

public hearing. Even with respect to

rulemakings for which notice and

comment are required, which this

rulemaking is not, the APA gives the

agency discretion to hold a public

hearing or not. ‘‘[T]he agency shall give

interested persons an opportunity to

participate in the rulemaking . . . with

or without the opportunity for oral

presentation.’’ (5 U.S.C. 553(c).). By

allowing interested persons to submit

written views, the Department has

provided the public with a greater

opportunity to participate in a rule of

agency organization, procedure, or

practice than the APA requires.

Moreover, in addition to providing the

60-day comment period, representatives

from the Great Lakes Pilotage Staff and

the SLSDC participated in a February 9,

1995, meeting in Chicago, organized by

the Great Lakes Shipping Association,

which represents vessel owners engaged

in the international Great Lakes trades.

Also in attendance were representatives

from the three Great Lakes pilot

associations and a large number of other

industry representatives. At that

meeting, the Staff and SLSDC

representatives responded to questions

from pilots and others for several hours

concerning the possibility of a transfer.

In addition, during the winter of

1994–95, the Staff also met with the

three pilot associations and presented to

each of them a draft of the ‘‘St.

Lawrence Seaway Development

Corporation Pilotage Concept,’’ which

included the SLSDC’s 1995 plan. The

plan comprised the SLSDC’s 5-year

performance goals, its 3-to-5-year

business focus, and its 5-to-15-year

strategic goals. The document

emphasized the importance of the

pilotage program and the SLSDC’s role

in the program, when it said, ‘‘[t]he

mission of the Great Lakes Pilotage

Program is to protect the public, the

environment, and the economic

interests of foreign trade shippers by

assuring that their vessels are safely

navigated by competent and qualified

U.S. registered pilots.’’ Although the

Staff orally requested that the

associations provide reaction to this

document, none was forthcoming.

In light of the many opportunities that

the pilots have had to voice their

opinions about the transfer and the

exhaustive public record before the
63450 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

Department, the Department concludes

that holding a public hearing would not

result in the presentation of additional

or different information from what has

already been submitted.

The Department stated in the interim

final rule that it would consider any

new matters presented and make

changes if warranted. The Department

has carefully considered all comments

presented and concludes that no

revisions to the interim final rule are

warranted. Accordingly, the Department

affirms, without change, the interim

final rule.

A final rule redesignating those

portions of the Coast Guard’s Great

Lakes Pilotage Regulations that are

necessary for SLSDC to carry out its

responsibilities under the Act will be

published in the Federal Register

shortly.

List of Subjects in 49 CFR Part 1

Authority delegations (Government

agencies), Organizations and functions

(Government agencies).

Accordingly, 49 CFR part 1 is

amended as follows:

PART 1—[AMENDED]

1. The authority citation for part 1

continues to read as follows:

Authority: 49 U.S.C. 322; Pub. L. 101–552,

28 U.S.C. 2672, 31 U.S.C. 3711(a)(2).

§ 1.46 [Removed]

2. Section 1.46(a) is removed and

reserved.

3. Section 1.52 is amended by adding

a new paragraphs (d) and (e) to read as

follows:

§ 1.52 Delegations to Saint Lawrence

Seaway Development Corporation

Administrator.

* * * * *

(d) Carry out the Great Lakes Pilotage

Act of 1960, as amended, (46 U.S.C.

9301 et seq.).

(e) Under the 1977 Memorandum of

Arrangements with Canada and the

Great Lakes Pilotage Act of 1960, as

amended in 1983 (46 U.S.C. 9305), enter

into, revise, or amend arrangements

with Canada in coordination with the

General Counsel.

Issued at Washington, DC, this 5th day of

December 1995.

Federico Pen ̃ a,

Secretary of Transportation.

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

BILLING CODE 4910–62–P

Research and Special Programs

Administration

49 CFR Part 192

[Docket PS–135; Amdt. 192–74A]

RIN 2137–AC32

Customer-Owned Service Lines

AGENCY: Research and Special Programs

Administration (RSPA), DOT.

ACTION: Final rule; response to petition

for reconsideration.

SUMMARY: This action concerns a

petition to reconsider the rule that

requires operators of gas service lines

who do not maintain certain buried

customer piping to notify customers of

the need for maintenance. The request

to change the rule to clarify the

exclusion of customer branch lines is

granted because some operators are

apparently misconstruing the rule to

cover these lines. The request to change

the rule to specify operator repair as a

maintenance option is granted because

a literal reading of the rule’s definition

of maintenance excludes this legitimate

option.

EFFECTIVE DATE: January 10, 1996.

FOR FURTHER INFORMATION CONTACT: L.M.

Furrow, (202) 366–2392.

SUPPLEMENTARY INFORMATION: As

directed by the 102d Congress (49

U.S.C. 60113(a)), RSPA issued a rule (49

CFR 192.16) that requires certain

operators of gas service lines to notify

their customers of the need to maintain

buried customer piping (60 FR 41828,

August 14, 1995). Operators subject to

this rule are identified in the first

paragraph of the rule, as follows:

§ 192.16 Customer Notification

(a) This section applies to each operator of

a service line who does not maintain the

customer’s buried piping up to entry of the

first building downstream, or, if the

customer’s buried piping does not enter a

building, up to the principal gas utilization

equipment or the first fence (or wall) that

surrounds that equipment. For the purpose of

this section, ‘‘maintain’’ means monitor for

corrosion according to § 192.465 if the

customer’s buried piping is metallic, survey

for leaks according to § 192.723, and if an

unsafe condition is found, either shut off the

flow of gas or advise the customer of the need

to repair the unsafe condition.

In a petition dated September 8, 1995,

the American Gas Association (AGA)

asked RSPA to reconsider this

notification rule. AGA contends

§ 192.16(a) is deficient in two respects.

First, AGA is concerned that § 192.16(a)

does not indicate that branch lines,

serving secondary equipment such as

yard lanterns or pool heaters, are not

part of the customer’s buried piping that

operators must maintain to qualify for

exclusion from the rule. In fact, as AGA

construes the rule, to avoid sending

notifications operators would have to

maintain most of these branch lines. For

clarity, AGA recommends amending

§ 192.16(a) to refer to ‘‘buried gas supply

piping’’ instead of ‘‘buried piping.’’

The amount of customer piping an

operator must maintain to avoid sending

customer notifications was a significant

issue in this rulemaking proceeding. Of

particular concern was buried piping

that branches from the customer’s

primary gas supply line to serve

secondary equipment, such as a yard

lantern or pool heater. We addressed

this issue in the final rule document as

follows:

[w]e intended the proposed rules to apply

to customers’ primary gas supply lines.

Branch lines that serve pool heaters, yard

lanterns, or other types of secondary

equipment were not intended to be covered.

The final rule (§ 192.16(a)) clarifies this point

by covering customer piping up to gas

utilization equipment only when the

customer’s piping does not enter a building.

(60 FR 41822)

Given this history of § 192.16(a) and

the plain meaning of the rule, we do not

agree with AGA that the rule can

reasonably be construed to apply to

most branch lines serving yard lanterns

or pool heaters. As AGA acknowledges

in its petition, such lines typically do

not enter buildings. Buried customer

piping that does not enter a building is

covered only if it serves the customer’s

principal gas utilization equipment.

And by their very nature, branch lines

do not serve principal gas utilization

equipment.

Nevertheless, the existence of the

AGA petition indicates that some

service line operators may be

misconstruing the rule. Since we want

to make the rule as easy as possible for

everyone to understand, we have

amended § 192.16(a) to emphatically

state that the customer’s buried piping

does not include branch lines that serve

yard lanterns, pool heaters, or other

types of secondary equipment. We did

not feel AGA’s suggestion to modify

‘‘piping’’ with ‘‘gas supply’’ would

necessarily clarify the rule because all

customer piping provides a supply of

gas.

Next, AGA argues that the definition

of ‘‘maintain’’ is too restrictive because

it does not mention repair as a method

of remedying unsafe customer piping.

As a result, AGA suggests § 192.16(a)

could be construed to require operators

to send customer notifications even if

they repair unsafe conditions on

customer piping. AGA recommends