Document ID: USCG-2011-0576-0002
Agency: uscg
Document Type: Proposed Rule
Title: NPRM:  Higher Volume Port Areas: Washington (Federal Register Publication)
Posted Date: 2015-05-22T04:00Z

[Federal Register Volume 80, Number 99 (Friday, May 22, 2015)]
[Proposed Rules]
[Pages 29582-29589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-11760]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 155

[Docket No. USCG-2011-0576]
RIN 1625-AB75

Higher Volume Port Area--State of Washington

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes redefining the boundaries of the 
existing higher volume port area in the Strait of Juan de Fuca and 
Puget Sound, in Washington. This rulemaking is required by statute, and 
is related to the Coast Guard's maritime safety and stewardship 
missions.

DATES: Comments and related material must either be submitted to our 
online docket via http://www.regulations.gov on or before August 20, 
2015 or reach the Docket Management Facility by that date.

ADDRESSES: You may submit comments identified by docket number USCG-
2011-0576 using any one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov.
    (2) Fax: 202-493-2251.
    (3) Mail: Docket Management Facility (M-30), U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue SE., Washington, DC 20590-0001.
    (4) Hand delivery: Same as mail address above, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-366-9329.
    To avoid duplication, please use only one of these four methods. 
See the ``Public Participation and Request for Comments'' portion of 
the SUPPLEMENTARY INFORMATION section below for instructions on 
submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed 
rule, call or email LCDR John G. Peterson, CG-CVC-1, Coast Guard; 
telephone 202-372-1226, email John.G.Peterson@uscg.mil. If you have 
questions on viewing or submitting material to the docket, call Ms. 
Cheryl Collins, Program Manager, Docket Operations, telephone 202-366-
9826.

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble

I. Public Participation and Request for Comments
II. Abbreviations
III. Background
IV. Discussion of Proposed Rule
V. Regulatory Analyses
    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

    We encourage you to submit comments (or related material) on this 
rulemaking. We will consider all submissions and may adjust our final 
action based on your comments. Comments should be marked with docket 
number USCG-2011-0576 and should provide a reason for each suggestion 
or recommendation. You should provide personal contact information so 
that we can contact you if we have questions regarding your comments; 
but please note that all comments will be posted to the online docket 
without change and that any personal information you include can be 
searchable online (see the Federal Register Privacy Act notice 
regarding our public dockets, 73 FR 3316, Jan. 17, 2008).
    Mailed or hand-delivered comments should be in an unbound 8\1/2\ x 
11 inch format suitable for reproduction. The Docket Management 
Facility will acknowledge receipt of mailed comments if you enclose a 
stamped, self-addressed postcard or envelope with your submission.
    Documents mentioned in this notice of proposed rulemaking and all 
public comments, are in our online docket at http://www.regulations.gov 
and can be viewed by following the Web site's instructions. You can 
also view the docket at the Docket Management Facility (see the mailing 
address under ADDRESSES) between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.
    We are not planning to hold a public meeting but will consider 
doing so if public comments indicate a meeting would be helpful. We 
would issue a separate Federal Register notice to announce the date, 
time, and location of such a meeting.

II. Abbreviations

BLS Bureau of Labor Statistics
CFR Code of Federal Regulations
E.O. Executive Order
FR Federal Register

[[Page 29583]]

GSA General Services Administration
HVPA Higher volume port area
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
OMB Office of Management and Budget
OSRO Oil spill removal organization
Pub. L. Public Law
SBA Small Business Administration
Sec.  Section symbol
U.S.C. United States Code
VRP Vessel response plan

III. Background

    The legal basis of this proposed rule is 33 U.S.C. 1231 and 
1321(j), which require the Secretary of the department in which the 
Coast Guard is operating to issue regulations necessary for 
implementing the Ports and Waterways Safety Act, and to require the 
President to issue regulations requiring response plans and other 
measures to protect against oil and hazardous substance spills. The 
President's authority under 33 U.S.C. 1321(j) is delegated to the 
Secretary by Executive Order (E.O.) 12777, and the Secretary's 
authority is delegated to the Coast Guard by DHS Delegation No. 
0170.1(II)(70), (73), and (80).
    The purpose of this proposed rule is to implement section 710 of 
the Coast Guard Authorization Act of 2010 (``the Act''),\1\ which 
requires the Coast Guard to initiate by October 15, 2011, a rulemaking 
to modify the 33 CFR 155.1020 definition of the State of Washington's 
higher volume port area (the Washington HVPA) by replacing a reference 
to Port Angeles, WA, with a reference to Cape Flattery, WA, and by 
reviewing any modifications to vessel response plans (VRPs), made in 
response to the definitional change, not later than October 15, 2015. 
The Coast Guard initiated this project by the October 15, 2011 
deadline.
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    \1\ Pub. L. 111-281, 124 Stat. 2905.
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    Oil or hazardous material pollution prevention regulations for a 
U.S. vessel, and for a foreign vessel operating in U.S. waters, appear 
in Coast Guard regulations at 33 CFR part 155. Many of those 
regulations require a vessel response plan (VRP) describing measures 
that the vessel owner or operator has taken or will take to mitigate or 
respond to an oil spill from the vessel. The VRP must demonstrate the 
vessel's ability, following a spill, to secure response resources 
within given time periods. These measures typically include the 
services of nearby response resources under a contract between the 
vessel's owner or operator and an oil spill removal organization (OSRO) 
that owns the response resources. The regulations provide for three 
different timeframes within which a combination of required response 
resources must arrive on the scene, which are described as Tiers 1, 2, 
and 3.
    In 33 CFR part 155, subparts D (petroleum oil as cargo), F (animal 
fat or vegetable oil as cargo), G (non-petroleum oil as cargo), and J 
(petroleum oil as fuel or secondary cargo) all share the same 
definition of ``Higher volume port areas.'' Required response times are 
significantly reduced in HVPAs. For example, Tier 1 response times for 
an oil tanker within an HVPA are half that required of the same vessel 
operating in open ocean. As defined in 33 CFR 155.1020, the Strait of 
Juan de Fuca and Puget Sound, Washington constitute one of 14 HVPAs 
designated around the country.
    Since 1996, 33 CFR 155.1020 has defined the seaward boundary of the 
Washington HVPA as an arc 50 nautical miles seaward of the entrance to 
Port Angeles, Washington. Port Angeles is approximately 62 miles inland 
from the Pacific Ocean entrance to the Strait of Juan de Fuca, at Cape 
Flattery, WA, and therefore, the Washington HVPA does not currently 
include any Pacific Ocean waters. Section 710 of the Act requires the 
Coast Guard to initiate a rulemaking to relocate the HVPA's arc so that 
it extends seaward from Cape Flattery, not Port Angeles. This would add 
50 nautical miles of Pacific Ocean water and an additional 12 nautical 
miles in the western portion of the Strait of Juan de Fuca. Waters 
affected by sec. 710 and by this rulemaking are shown on National 
Oceanic and Atmospheric Administration charts.\2\
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    \2\ Waters affected by sec. 710 and this rulemaking are shown on 
National Oceanic and Atmospheric Administration charts 18460 (Cape 
Flattery, WA) and 18465 (Port Angeles, WA).
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    Section 710 requires us to initiate a rulemaking not later than 
October 15, 2011, to modify the definition of the Washington HVPA to 
relocate the arc. Section 710 also requires us to approve VRPs that 
require modification as a result of the rulemaking not later than 
October 15, 2015. We have determined that, with respect to existing 
VRPs, no modifications or new Coast Guard VRP approvals will be needed.
    To maximize the affected public's ability to plan for the change in 
the Washington HVPA's boundaries, we published a 2011 Federal Register 
notice of our intent to comply with sec. 710.\3\ This advised the 
public that regulatory implementation of sec. 710 was forthcoming. The 
notice did not request public comments and no public comments were 
received.
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    \3\ 76 FR 76299 (Dec. 7, 2011).
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IV. Discussion of Proposed Rule

    The current definition of the Washington HVPA's boundaries \4\ 
reads: ``Higher volume port area means the following areas, including 
any water area within 50 nautical miles seaward of the entrance(s) to 
the specified port: . . . (13) Strait of Juan De Fuca at Port Angeles, 
WA to and including Puget Sound, WA.'' In strict compliance with the 
express wording of sec. 710(a), we propose amending that definition by 
striking ``Port Angeles, WA'' and inserting ``Cape Flattery, WA'' in 
its place. As amended, the definition would then read: ``Higher volume 
port area means the following areas, including any water area within 50 
nautical miles seaward of the entrance(s) to the specified port: . . . 
(13) Strait of Juan de Fuca at Cape Flattery, WA to and including Puget 
Sound, WA.''
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    \4\ 33 CFR 155.1020(13).
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    Port Angeles lies about 62 miles east of the entrance to the Strait 
of Juan de Fuca. By moving the arc so that it centers on Cape Flattery, 
which lies at the entrance to the Strait, the proposed redefined 
Washington HVPA would cover an additional 50 nautical miles of Pacific 
Ocean water, while continuing to cover all the waters now included 
within the current HVPA. The larger Washington HVPA may affect the time 
and resources needed to respond to an oil spill from a vessel, because 
it is harder and more time-consuming to transit rough Pacific Ocean 
waters than it is to transit the sheltered waters of the Strait and the 
Sound. (We discuss these possibilities in more detail in the Regulatory 
Analysis section that follows.)

V. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes 
and E.O.s related to rulemaking. Below we summarize our analyses based 
on these statutes or E.O.s.

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

[[Page 29584]]

emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility.
    This proposed rule is not a significant regulatory action under 
section 3(f) of E.O. 12866 as supplemented by E.O. 13563, and does not 
require an assessment of potential costs and benefits under section 
6(a)(3) of E.O. 12866. The Office of Management and Budget (OMB) has 
not reviewed it under E.O. 12866. We developed an analysis of the costs 
and benefits of the proposed rule to ascertain its probable impacts on 
industry. A draft preliminary Regulatory Assessment follows.
    This proposed rule would expand the existing Washington HVPA for 
Puget Sound and the Strait of Juan de Fuca. Currently, the Washington 
HVPA boundary is measured from Port Angeles in a 50-mile seaward arc 
westward to the Pacific Ocean. As mandated by sec. 710 of the Act, this 
proposed rule would amend the definition of the term ``Higher volume 
port area'' and relocate the point at which the seaward arc is measured 
from Port Angeles to Cape Flattery, WA, an approximately 62-mile 
westward shift. As a result, the Washington HVPA would cover an 
additional 50 miles of open ocean and an additional 12 nautical miles 
in the western portion of the Strait of Juan de Fuca. A VRP must list 
the OSRO provider that the vessel owner or operator has contracted with 
and stipulate the vessel's ability to secure response resources within 
specific regulatory timeframes (Tiers 1, 2, and 3) in the event of an 
oil spill. This proposed rule would codify the changes delineated in 
the Act and it would not require changes to VRPs.
Affected Population
    Part 155 in 33 CFR directly applies to and regulates vessel owners 
and operators. Specified vessels prepare vessel response plans that 
must list the OSRO provider that the vessel owner or operator has 
contracted with and stipulate the vessel's ability to secure response 
resources within specific regulatory timeframes (Tiers 1, 2, and 3) in 
the event of an oil spill. The proposed rule has the potential to 
impact vessel response planholders covering vessels that transit the 
Washington HVPA and OSROs that provide response resources in the event 
of an oil spill. Based on Coast Guard review of vessel response plans, 
2 OSROs may be impacted by the proposed rule. One OSRO has about 500 
response resource contracts and the other OSRO has about 650 contracts 
with planholders that own vessels that call on the Cape Flattery higher 
volume port area. For the OSRO that has 500 contracts, about 3 percent 
or 15 are with U.S. planholders; the OSRO that has 650 contracts, about 
2 percent or 13 are with U.S. planholders.
Costs
    Vessel owners and operators would not need to revise or modify a 
current VRP to take into account expansion of the HVPA. Current VRPs 
already specify one or both of the OSROs that provide response 
resources to vessel owners and operators in the affected waters. Vessel 
owners and operators must only list the OSRO by name and include the 
contact information for each OSRO in the VRP; no other information or 
details are required in the VRP that are dependent upon the geographic 
location of response equipment.
    In addition to identifying the OSRO in the vessel response plan, 
vessel owners and operators must ensure the availability of response 
resources from the OSRO through a contract or other approved means. 
Depending on how the contract language is formulated, a contract may 
need to be modified to reflect the change in the HVPA geographical 
definition. One OSRO provided information which stated that contracts 
would need to be modified slightly to incorporate the geographic change 
of the expanded higher volume port while the other OSRO provided 
information which stated that no changes or modifications to existing 
contracts would be necessary on the part of either the OSROs or the 
planholders. For the purpose of this analysis, we estimate costs to 
modify a contract for the planholders of the OSRO that stated that 
changes would be necessary. This OSRO has about 500 planholders with 
written contractual agreements to secure response resource services in 
the event of an oil spill; of this amount, only about 3 percent or 15, 
are with U.S. planholders. Based on information we obtained from 
industry in formulating the Nontank Vessel Response Final Rule [78 FR 
60100], it would take a General and Operations Manager approximately 2 
hours of planholder time to amend the contract and send the contract to 
the OSRO for approval. If a plan preparer amends the contract on behalf 
of the planholder, we estimate it would take the same amount of time. 
We found that 36 percent of planholders perform this work internally 
and 64 percent hire a plan preparer to perform this work on their 
behalf. The amendment of a contract is a one-time cost; we estimate 
little or no submission cost for planholders because nearly 100 percent 
of contracts are submitted by email to the responsible OSRO.
    For planholders who perform the work internally and using the 
Bureau of Labor Statistics (BLS) May 2013 National Industry-Specific 
Occupational Employment and Wage Estimates for General and Operations 
Manager (Occupation Code 11-1021), we obtain a mean hourly wage rate of 
$62.68. We then use BLS' 2014 Employer Cost for Employee Compensation 
databases to calculate and apply a load factor of 1.52 to obtain a 
loaded hourly labor rate of about $95.30 for this occupation.\5\ For 
plan preparers, we obtained publicly available fully loaded billing 
rates for Senior Regulatory and Environmental Consultants and 
Environmental Program Managers from three environmental service 
companies using the General Services Administration's (GSA) Federal 
Acquisition eLibrary for service contracts.\6\ We took the average of 
these three rates to obtain a fully loaded hourly wage rate of $151.00 
(rounded). Of about 500 planholders who have contracts with this OSRO, 
only about 15 are U.S. planholders. Of the 15 U.S. planholders, about 
36 percent would amend the contract internally. We estimate the one-
time cost to these planholders to be about $1,030 ($95.30 x 2 hours x 
500 planholders x 0.03 x 0.36, rounded). For the remaining 64 percent 
of U.S. planholders who have a plan preparer amend the contracts on 
their behalf, we estimate the one-time cost to be about $2,899 ($151.00 
x 2 hours x 500 planholders x .03 x 0.64, rounded); combined the total 
estimated one-time cost to U.S. planholders to amend the contracts 
would be about $3,930, rounded and undiscounted. We estimate the 
average one-time or initial cost for each U.S. planholder to amend a 
contract to be about $262 ($3,930/15

[[Page 29585]]

U.S. planholders). We estimate the 10-year discounted cost to be about 
$3,673 using a 7 percent discount rate and the annualized cost to be 
about $523. Taking into consideration the uncertainty of this analysis, 
we request public comment on the cost impacts of this rule on OSROs and 
VRP planholders.
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    \5\ Information can be viewed at, http://www.bls.gov/oes/current/naics3_483000.htm. A loaded labor rate is what a company 
pays per hour to employ a person, not the hourly wage. The loaded 
labor rate includes the cost of benefits (health insurance, 
vacation, etc.). The load factor for wages is calculated by dividing 
total compensation by wages and salaries. For this analysis, we used 
BLS' Employer Cost for Employee Compensation/Transportation and 
Materials Moving Occupations, Private Industry report (Series IDs, 
CMU2010000520000D and CMU2020000520000D for all workers using the 
multi-screen data search). Using 2014 Q2 data, we divide the total 
compensation amount of $25.85 by the wage and salary amount of 
$17.04 to get the load factor of 1.517 or 1.52. See the following 
Web site, http://www.bls.gov/ncs/ect/data.htm. We then rounded 
$62.68 to $62.70 and multiplied by 1.52 to obtain a loaded hourly 
wage rate of about $95.00.
    \6\ GSA Contract GS-10F-0263U Accessed 11/26/2014; GSA Contract 
GS-10F-0104T Accessed 11/26/2014; https://www.gsaadvantage.gov/ref_text/GS10F0335R/0N9LCV.2VV7AR_GS-10F-0335R_GS10F0335R.PDF.
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    The remaining 485 planholders are foreign. For 36 percent of them 
who would amend the contracts internally, we estimate the one-time cost 
to be about $33,300 ($95.30 x 2 hours x 485 planholders x 0.36, 
rounded). For the remaining 64 percent of foreign planholders who have 
a plan preparer amend the contracts on their behalf, we estimate the 
one-time cost to be about $93,740 ($151.00 x 2 hours x 485 planholders 
x 0.64, rounded); combined the total estimated one-time cost to foreign 
planholders to amend the contracts would be about $127,040, rounded, or 
about $262 per planholder ($127,040/485 foreign planholders).
    The final category of potential costs relates to the OSRO's ability 
to meet the specified response times in the new geographic area of the 
HVPA. Based on information provided to Coast Guard, one OSRO stated 
that additional response equipment would not be required and capital 
expenditures would not be necessary as result of the expanded higher 
volume port area under current Coast Guard OSRO classification 
guidelines. Based on data from the other OSRO, we estimate that total 
initial capital costs could be as high as $5.5 million for temporary 
storage equipment and warehousing with annual capital recurring costs 
of approximately $250,000 for equipment maintenance, and up to $1 
million for barge recertification (included in the $5.5 million 
estimate), warehousing, and other necessary resource equipment. 
However, we lack independent methods to verify these estimates. 
Moreover, the actual costs the OSRO may incur depend considerably on 
how they choose to comply with our regulations, which give OSROs 
substantial flexibility with respect to pre-positioning response 
resources.
    To the extent one OSRO would incur additional costs due to this 
proposed rule (such as increased capitalization costs), we expect that 
these costs would be generally passed onto their VRP planholders 
equally although the OSRO who provided this information conceded that 
this was speculative at this point due to the uncertainty of 
expenditures that may be needed as described below. Using the highest 
value of capital costs provided to us of $5.5 million, we use the 
capital recovery cost factor to determine the amount needed annually to 
recovery this payout since we assume the OSRO would finance the 
expenditures and attempt to recapture them equally over the life of the 
equipment. The capital recovery factor or ratio as it is often referred 
to, is the ratio of a constant annuity to the present value of the 
annuity over a given period of time using an acceptable discount rate, 
as in this case, 7 percent. The ratio also includes the general life 
expectancy of the investment and can be simply described as the ``share 
of the net cost that must be recovered each year to `repay the cost of 
the fixed input at the end of its useful life.' '' If we use a standard 
life expectancy of 20 years, we calculate the net amount that must be 
recovered by the OSRO annually to be about $519,161, undiscounted.\7\ 
If we assume this cost is distributed equally over the 650 planholders 
(U.S. and foreign planholders who own vessels that transit the higher 
volume port area) under contract with this OSRO, the amount needed to 
be recovered by the OSRO to recapture this initial investment is 
estimated to be about $800 (rounded) from each planholder annually, 
most likely in the form of higher retainer fees. However, only about 2 
percent, or 13 of the 650 planholders are U.S. planholders. Therefore, 
for the 13 U.S. planholders, we estimate the total capital cost of this 
proposed rule to be about $10,400 (650 planholders x 0.02 x $800) 
annually, undiscounted, in addition to annual maintenance costs of 
about $385 per planholder ($250,000/650 planholders), undiscounted, in 
years 2 through 10 of the analysis period. We estimate the total 10-
year discounted cost to the 13 U.S. planholders to be about $75,400 
using a 7 percent discount rate (the 10-year discounted cost is 
estimated to be about $91,600 using a 3 percent discount rate) and the 
annualized cost to be about $10,734. See Table 1.
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    \7\ Calculated using a capital recovery factor of 0.0944.
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    It follows that the remaining 637 planholders are foreign. Again, 
if we assume this OSRO passes along its capital cost in the form of 
higher retainer fees to foreign planholders, we estimate the total 
capital cost of this proposed rule to foreign planholders to be about 
$509,600 (637 x $800) annually, undiscounted, in addition to annual 
maintenance costs of about $245,000 (637 x $385), undiscounted, in 
years 2 through 10 of the analysis period. We estimate the total 10-
year discounted cost to foreign planholders to be about $3.6 million 
using a 7 percent discount rate (the 10-year discounted cost is 
estimated to be about $4.3 million using a 3 percent discount rate). As 
stated earlier, we neither have knowledge of the OSROs billing 
structure nor how costs would be distributed among planholders, 
although in our discussion with one OSRO, we learned that the 
composition of a planholder's vessel fleet affects the amount of the 
retainer fee since vessels such as nontank ships requires different 
response resources as opposed to towing vessels, for example.
    Table 1 summarizes the total estimated cost of the proposed rule to 
28 U.S. planholders over a 10-year period of analysis.

                                      Table 1--Summary of Estimated Costs of the Proposed Rule to U.S. Planholders
                                           [7 percent discount rate, 10-year period of analysis, 2015 dollars]
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                                                           Update contracts for 15 U.S.      OSRO equipment and other               Total costs
                                                                    planholders                    capital costs         -------------------------------
                          Year                           ----------------------------------------------------------------
                                                           Undiscounted     Discounted     Undiscounted     Discounted     Undiscounted     Discounted
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................          $3,930          $3,673         $10,400          $9,720         $14,330         $13,393
2.......................................................               0               0          10,785           9,420          10,785           9,420
3.......................................................               0               0          10,785           8,804          10,785           8,804
4.......................................................               0               0          10,785           8,228          10,785           8,228
5.......................................................               0               0          10,785           7,690          10,785           7,690
6.......................................................               0               0          10,785           7,187          10,785           7,187
7.......................................................               0               0          10,785           6,716          10,785           6,716

[[Page 29586]]

 
8.......................................................               0               0          10,785           6,277          10,785           6,277
9.......................................................               0               0          10,785           5,866          10,785           5,866
10......................................................               0               0          10,785           5,483          10,785           5,483
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................  ..............           3,673  ..............          75,390  ..............          79,062
    Annualized..........................................  ..............             523  ..............          10,734  ..............          11,257
--------------------------------------------------------------------------------------------------------------------------------------------------------
Totals may not sum due to independent rounding.

    As Table 1 shows, for 15 U.S. planholders who may need to revise 
their contracts, we estimate the 10-year discounted cost of the 
proposed rule to be about $3,673 at a 7 percent discount rate (using a 
3 percent discount rate, we estimate the 10-year discounted cost to be 
about $3,816). We estimate the annualized cost to be about $523 for 
these 15 planholders.
    For the OSRO who may incur capital costs as a result of this 
proposed rule and pass these costs along to its 13 U.S. planholders, we 
estimate the 10-year discounted cost to be about $75,400 at a 7 percent 
discount rate (using a 3 percent discount rate, we estimate the 10-year 
discounted cost to be about $91,624). We estimate the annualized cost 
to be about $10,734 at a 7 percent discount rate for these 13 
planholders.
    We estimate the total present discounted cost of the proposed rule 
to all 28 U.S. planholders to be about $79,062 at a 7 percent discount 
rate (using a 3 percent discount rate, we estimate the total 10-year 
discounted cost to be about $95,440). We estimate the annualized cost 
to be about $11,257 at a 7 percent discount rate.
    We do not anticipate that this proposed rule would impose new costs 
on the Coast Guard or require the Coast Guard to expend additional 
resources because we do not expect any changes would be required to 
their VRPs.
Alternatives
    Due to the specific nature of sec. 710(a), we are limited in the 
alternative approaches we can use to comply with Congress' intent. We 
considered three alternatives (including the preferred alternative) in 
the development of the proposed rule: (1) Revise 33 CFR 155.1020 by 
striking ``Port Angeles, WA'' in the definition of ``Higher volume port 
area'' of that section and inserting ``Cape Flattery, WA''; (2) Revise 
33 CFR 155.1020 by striking ``50 nautical miles'' in the definition of 
``Higher volume port area'' and inserting ``110 nautical miles''; and 
(3) Take no action. The Regulatory Analysis section further discusses 
the analysis of the preferred alternative (i.e., express adoption of 
the wording from sec. 710(a)) in comparison with other regulatory 
approaches considered.
Analysis of Alternatives
    We considered three alternatives (including the preferred 
alternative) in the development of this proposed rule. The key factors 
that we evaluated in considering each alternative included: (1) The 
degree to which the alternative comported with the congressional 
mandate in sec. 710 of the Act; (2) What benefits, if any, would be 
derived, such as enhancement of personal and environmental safety and 
security; and (3) Cost effectiveness. The alternatives considered are 
as follows:
    Alternative 1: Revise 33 CFR 155.1020 by striking ``Port Angeles, 
WA'' in the definition of ``Higher volume port area'' of that section 
and inserting ``Cape Flattery, WA.'' Since 1996, 33 CFR 155.1020 has 
defined the seaward boundary of the Washington HVPA as an arc 50 
nautical miles seaward of the entrance to Port Angeles, WA. The 
proposed change would relocate the arc's center to Cape Flattery, 
covering approximately 50 additional nautical miles of open ocean.
    Alternative 2: Revise 33 CFR 155.1020 by striking ``50 nautical 
miles'' in the definition of ``Higher volume port area'' and inserting 
``110 nautical miles.'' This change would affect the other 13 HVPAs 
throughout the United States because of the level of response resources 
required with the significantly reduced response times that would be 
associated with a 110-mile outward shift of the existing HVPAs from 
their entrances. A shift of this distance would require the purchasing 
and positioning of heavier and more expensive equipment such as 
oceangoing tugs and barges. In addition, OSROs would incur considerable 
costs of potentially retrofitting existing HVPAs with shoreside docks. 
Since this would include all HVPAs, the economic impact on the response 
resource industry, as a whole, would be greater as opposed to a single 
HVPA. Furthermore, this option goes beyond the requirements of sec. 710 
of the Act, which specifically requires the Coast Guard to initiate a 
rulemaking proceeding to modify the definition of the term ``Higher 
volume port area'' by striking ``Port Angeles, WA'' and inserting 
``Cape Flattery, WA.''
    Alternative 3: Take no action. This option was not selected as it 
would not implement the intent of sec. 710 of the Act, which 
specifically requires the Coast Guard to initiate a rulemaking to 
modify the definition of the term ``Higher volume port area'' by 
striking ``Port Angeles, WA'' and inserting ``Cape Flattery, WA.'' It 
also precludes the protection intended by Congress for the waters at 
the entrance to and in the Strait of Juan de Fuca.
    We chose Alternative 1, which codifies the regulation directly and 
specifically implements sec. 710 of the Act as described earlier. We 
rejected Alternative 2, because it went beyond the direction provided 
by Congress in sec. 710 and adds burden, both in the Puget Sound region 
and in the other HVPAs throughout the United States. We rejected 
Alternative 3, the ``no action'' alternative, because it would not 
implement sec. 710.
Benefits
    We do not identify any historic cases that could support the 
development of quantifiable benefits associated with this proposed 
rule. Using the Coast Guard's Marine Information for Safety and Law 
Enforcement (MISLE) database with casualty cases transferred from 
MISLE's predecessor, the Marine Safety Management System database, we 
examined 283 spill cases from 1995 to 2013, beginning with the first 
spills that appeared in our database for this geographic region. Based 
on information from Coast Guard personnel who have experience in 
casualty case investigations and analysis, we found

[[Page 29587]]

no cases or spills that would have benefitted from the expanded HVPA.
    Qualitatively, oil spills are likely to result in a negative impact 
to the ecosystem and the economy of the surrounding area. These 
represent social welfare effects that are not accounted for solely by 
the amount of oil spilled into the water. In many cases, the scope of 
the impact is contingent on the vulnerability and resiliency of the 
affected area. A barrel of spilled oil may not have the same impact in 
one area as it would in another. Some locations are more sensitive or 
vulnerable than others. Depending on the ecosystem, VRPs could mitigate 
impacts to habitats that house multiple species. An area with an 
ecosystem that is damaged as a result of previous environmental 
incidents or damaged due to the cumulative effects of environmental 
injuries over time can be expected to have higher benefits from oil 
spill mitigation.
    The primary benefit of this proposed rule is to ensure that in the 
event of a spill, adequate response resources are available and can be 
mobilized within the expanded HVPA. This will ensure a timely response 
by vessel owners and operators and the OSROs in an effort to reduce the 
likelihood, and mitigate the impact of an oil spill on the marine 
environment that might occur in the expanded HVPA.

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.
    Regarding vessel owners and operators, as previously discussed, 
this proposed rule would codify the requirements in the Act of an 
expanded HVPA, and it would not require vessel owners and operators to 
make changes to VRPs. Therefore, owners and operators of vessels that 
transit the HVPA would not incur additional VRP modification costs as a 
result of this proposed rule. However, as assumed earlier for the 
purpose of this analysis, if contracts would need to be modified, as 
stated by one OSRO on the part of the planholders, U.S. planholders 
would bear some costs of this proposed rule as shown earlier in this 
preamble. We estimate that each of the 15 U.S. planholders would incur 
an average one-time cost of about $262 to amend its contract with the 
OSRO.
    Also, regarding capital costs, it is unclear whether or how these 
costs impact vessel owners and operators without knowledge of the 
OSROs' billing structures. Additionally, proprietary information is not 
available that would allow us to determine the distribution of costs 
among many vessel owners and operators contracting with each OSRO. 
Nevertheless, in our earlier analysis, if we assume capital costs are 
incurred by one of the OSROs and we assume this cost would be passed 
along equally to U.S. planholders in the form of higher retainer fees, 
we estimate each of the 13 U.S. planholders would incur an annual cost 
of about $800 from one particular OSRO in addition to $385 in 
maintenance costs in years 2 through 10 of the analysis period for a 
total planholder cost of about $1,185 in years 2 through 10 of the 
analysis period.
    We assume for the purpose of this analysis that the two OSROs that 
provide response resource capabilities to the HVPA in Puget Sound may 
incur costs from this proposed rule and may likely pass along these 
costs to planholders in the form of higher retainer fees or planholders 
may incur one-time costs to amend their contracts with one of the 
OSROs. Using the North American Industry Classification System (NAICS) 
codes for businesses and the Small Business Administration's (SBA) size 
standards for small businesses, we determined the size of each OSRO. 
One OSRO has a primary NAICS code of 541618 with an SBA size standard 
of $15 million, which is under the subsector group 541 of the NAICS 
code with the description of ``Professional, Scientific, and Technical 
Services.'' The other OSRO has a primary NAICS code of 562998 with an 
SBA size standard of $7.5 million, which is under the subsector group 
562 of the NAICS code with the description of ``Waste Management and 
Remediation Services.'' Based on the information above and annual 
revenue data from publicly available and proprietary sources, Manta and 
ReferenceUSA, neither OSRO is considered to be small.
    There are about 1,400 U.S. planholders that have either tank 
vessel, nontank vessel, or combined vessel response plans. Based on the 
affected population of this proposed rule relative to the size of the 
industry as a whole, in this case U.S. vessel response plan owners 
(planholders), this proposed rule would potentially affect 28 or about 
2 percent of the total population of U.S. planholders in the United 
States. As described earlier and dependent upon the OSRO considered, we 
estimate a U.S. planholder may incur an annual cost between $262 and 
$1,185 in years 2 through 10 of the analysis period (and between $262 
and $800 in the initial year since we assume maintenance costs are not 
incurred in the initial year of the analysis period) as a result of 
this proposed rule. Given the cost analysis and pursuant to section 
605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Coast 
Guard certifies that this proposed rule will 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 rule would have 
a significant economic impact on it, please submit a comment to the 
Docket Management Facility at the address under ADDRESSES. In your 
comment, explain why you think it qualifies and how and to what degree 
this rule would economically affect it.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996,\8\ we want to assist small entities in 
understanding this proposed rule so that they can better evaluate its 
effects on them and participate in the rulemaking. If the proposed rule 
would affect your small business, organization, or governmental 
jurisdiction and you have questions concerning its provisions or 
options for compliance, please consult LCDR John G. Peterson (see FOR 
FURTHER INFORMATION CONTACT). The Coast Guard will not retaliate 
against small entities that question or complain about this rule or any 
policy or action of the Coast Guard.
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    \8\ Pub. L. 104-121.
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    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.\9\
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    \9\ 44 U.S.C. 3501-3520.

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[[Page 29588]]

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 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 follows.
    As noted earlier in the preamble, this rule implements sec. 710 of 
the Act, which specifically directs the Coast Guard to amend 33 CFR 
155.1020 by removing ``Port Angeles, WA'' and replacing it with ``Cape 
Flattery, WA.'' This rule carries out the Congressional mandate by 
amending the regulations to reflect this required change. Furthermore, 
this rule does not have a substantial direct effect upon the laws or 
regulations of the State of Washington. Therefore, this rule is 
consistent with the fundamental federalism principles and preemption 
requirements described in E.O. 13132.
    While it is well settled that States may not regulate in categories 
in which Congress intended the Coast Guard to be the sole source of a 
vessel's obligations, the Coast Guard recognizes the key role that 
State and local governments may have in making regulatory 
determinations. Additionally, for rules with federalism implications 
and preemptive effect, E.O. 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 E.O. 
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 \10\ 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 $100,000,000 (adjusted for 
inflation) or more in any one year. Though this proposed rule would not 
result in such an expenditure, we do discuss the effects of this rule 
elsewhere in this preamble.
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    \10\ 2 U.S.C. 1531-1538.
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G. Taking of Private Property

    This proposed rule would not cause a taking of private property or 
otherwise have taking implications under E.O. 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 E.O. 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

I. Protection of Children

    We have analyzed this proposed rule under E.O. 13045, Protection of 
Children from Environmental Health Risks and Safety Risks. This rule is 
not an economically significant rule and would not create an 
environmental risk to health or risk to safety that might 
disproportionately affect children.

J. Indian Tribal Governments

    A rule has implications for Indian Tribal Governments under E.O. 
13175, Consultation and Coordination with Indian Tribal Governments, if 
it has 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. We have analyzed this rule under that 
Order and have determined that it is consistent with the fundamental 
principles and requirements described in E.O. 13175.
    As noted above, this rulemaking implements the Congressional 
mandate by implementing sec. 710 of the Act. It will improve marine 
safety by increasing response times to mitigate or respond to an oil 
spill from vessels and does not have tribal implications that would 
require consultation under the E.O.
    The Coast Guard, however, recognizes the key role that Indian 
Tribal Governments have in making regulatory determinations. 
Additionally, for rules with tribal implications, E.O. 13175 
specifically directs agencies to consult with Indian Tribal Governments 
during the rulemaking process. If you believe this rule has 
implications for Indian Tribal Governments under E.O. 13175, please 
contact the person listed in the FOR FURTHER INFORMATION section of 
this preamble.

K. Energy Effects

    We have analyzed this proposed rule under E.O. 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under E.O. 12866 and is not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy. We have determined that it is not a ``significant energy 
action'' under E.O. 13211, because although it is a ``significant 
regulatory action'' under E.O. 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. Therefore, it does not require a Statement of Energy Effects 
under E.O. 13211.

L. Technical Standards

    The National Technology Transfer and Advancement Act \11\ 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.
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    \11\ 15 U.S.C. 272 note.
---------------------------------------------------------------------------

    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,\12\ and have made a preliminary 
determination that this is one of a category of actions that do not 
individually or cumulatively have a significant effect on the human 
environment. A preliminary environmental analysis checklist supporting 
this determination is available in the docket where indicated under the 
``Public Participation and Request for Comments'' section of this 
preamble. This rule is categorically excluded under section 6(b) of the 
``Appendix to National Environmental Policy Act: Coast Guard Procedures 
for Categorical Exclusions, Notice of Final Agency Policy.'' \13\ This 
rule involves

[[Page 29589]]

Congressionally-mandated regulations designed to protect the 
environment, specifically, regulations implementing the requirements of 
the Act (redefining and enlarging the boundaries of the existing higher 
volume port area in the Strait of Juan de Fuca and Puget Sound, in 
Washington). An environmental analysis checklist is available in the 
docket where indicated under ADDRESSES.
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    \12\ 42 U.S.C. 4321-4370f.
    \13\ 67 FR 48244 (July 23, 2002).
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List of Subjects in 33 CFR Part 155

    Alaska, Hazardous substances, Oil pollution, Reporting and 
recordkeeping requirements.

    For the reasons discussed in the preamble, the Coast Guard proposes 
to amend 33 CFR part 155 as follows:

PART 155--OIL OR HAZARDOUS MATERIAL POLLUTION PREVENTION 
REGULATIONS FOR VESSELS

0
1. The authority citation for part 155 is revised to read as follows:

    Authority: 3 U.S.C. 301 through 303; 33 U.S.C. 1225, 1231, 
1321(j), 1903(b), 2735; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., 
p. 351; Department of Homeland Security Delegation No. 0170.1. 
Section 155.1020 also issued under section 710 of Pub. L. 111-281. 
Section 155.480 also issued under section 4110(b) of Pub. L. 
101.380.

Sec.  155.1020  [Amended]

0
2. In Sec.  155.1020, amend paragraph (13) of the definition of 
``Higher volume port area'' by removing the words ``Port Angeles'' and 
adding, in their place, the words ``Cape Flattery''.

    Dated: May 7, 2015.
J.C. Burton,
Captain, U.S. Coast Guard, Director of Inspections and Compliance.
[FR Doc. 2015-11760 Filed 5-21-15; 8:45 am]
 BILLING CODE 9110-04-P