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many other financial service providers
that have access to client assets.83
In light of these disparities, we
request comment on whether SECregistered investment advisers should
be subject to financial responsibility
requirements along the lines of those
that apply to broker-dealers.
• What is the frequency and severity
of client losses due to investment
advisers’ inability to satisfy a judgment
or otherwise compensate a client for
losses due to the investment adviser’s
wrongdoing?
• Should investment advisers be
subject to net capital or other financial
responsibility requirements in order to
ensure they can meet their obligations,
including compensation for clients if
the adviser becomes insolvent or
advisory personnel misappropriate
clients’ assets? 84 Do the custody rule
and other rules 85 under the Advisers
83 Fidelity bonds are required to be obtained by
broker-dealers (FINRA Rule 4360; New York Stock
Exchange Rule 319; American Stock Exchange Rule
330); transfer agents (New York Stock Exchange
Rule Listed Company Manual § 906); investment
companies (17 CFR 270.17g–1); national banks (12
CFR 7.2013); federal savings associations (12 CFR
563.190).
84 We note that Congress and the Commission
have considered such requirements in the past. In
1973, a Commission advisory committee
recommended that Congress authorize the
Commission to adopt minimum financial
responsibility requirements for investment advisers,
including minimum capital requirements. See
Report of the Advisory Committee on Investment
Management Services for Individual Investors,
Small Account Investment Management Services,
Fed. Sec. L. Rep. (CCH) No. 465, Pt. III, 64–66 (Jan.
1973) (‘‘Investment Management Services Report’’).
Three years later, in 1976, the Senate Committee on
Banking, Housing and Urban Affairs considered a
bill that, among other things, would have
authorized the Commission to adopt rules requiring
investment advisers (i) with discretionary authority
over client assets, or (ii) that advise registered
investment companies, to meet financial
responsibility standards. S. Rep. No. 94–910, 94th
Cong. 2d Sess. (May 20, 1976) (reporting favorably
S. 2849). S. 2849 was never enacted. In 1992, both
the Senate and House of Representatives passed
bills that would have given the Commission the
explicit authority to require investment advisers
with custody of client assets to obtain fidelity
bonds. S. 226, 102d Cong., 2d Sess. (Aug. 12, 1992)
and H.R. 5726, 102d Cong. Ed (Sept. 23, 1992).
Differences in these two bills were never reconciled
and thus neither became law. In 2003, the
Commission requested comment on whether to
require a fidelity bonding requirement for advisers
as a way to increase private sector oversight of the
compliance by funds and advisers with the federal
securities laws. The Commission decided not to
adopt a fidelity bonding requirement at that time,
but noted that it regarded such a requirement as a
viable option should the Commission wish to
further strengthen compliance programs of funds
and advisers. Compliance Programs of Investment
Companies and Investment Advisers, Investment
Company Act Release No. 25925 (Feb. 5, 2003).
85 See, e.g., Advisers Act rule 206(4)–7 (requires
each investment adviser registered or required to be
registered with the Commission to adopt and
implement written policies and procedures
reasonably designed to prevent violations of the

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Act adequately address the potential for
misappropriation of client assets and
other financial responsibility concerns
for advisers? Should investment
advisers be subject to an annual audit
requirement?
• Should advisers be required to
obtain a fidelity bond from an insurance
company? If so, should some advisers be
excluded from this requirement? 86 Is
there information or data that
demonstrates fidelity bonding
requirements provide defrauded clients
with recovery, and if so what amount or
level of recovery is evidenced?
• Alternatively, should advisers be
required to maintain a certain amount of
capital that could be the source of
compensation for clients? 87 What
amount of capital would be adequate? 88
• What would be the expected cost of
either maintaining some form of reserve
capital or purchasing a fidelity bond?
Specifically, in addition to setting aside
the initial sum or purchasing the initial
bond, what would be the ongoing cost
and the opportunity cost for investment
advisers? Would one method or the
other be more feasible for certain types
of investment advisers (particularly,
smaller advisers)?
• Would the North American
Securities Administrators Association
Minimum Financial Requirements For
Investment Advisers Model Rule
202(d)–1 89 (which requires, among
other things, an investment adviser who
has custody of client funds or securities
Advisers Act and Advisers Act rules, review those
policies and procedures annually, and designate an
individual to serve as a chief compliance officer).
86 As noted above, the 1992 legislation would
have given us the explicit authority to require
bonding of advisers that have custody of client
assets or that have discretionary authority over
client assets. Section 412 of ERISA [29 U.S.C. 1112]
and related regulations (29 CFR 2550.412–1 and 29
CFR 2580) generally require that every fiduciary of
an employee benefit plan and every person who
handles funds or other property of such a plan shall
be bonded. Registered investment advisers
exercising investment discretion over assets of
plans covered by title I of ERISA are subject to this
requirement; it does not apply to advisers who
exercise discretion with respect to assets in an
individual retirement account or other non-ERISA
retirement account. In 1992, only approximately
three percent of Commission registered advisers
had discretionary authority over client assets; as of
March 31, 2018, according to data collected on
Form ADV, 91 percent of Commission registered
advisers have that authority.
87 See supra note 84.
88 Section 412 of ERISA provides that the bond
required under that section must +be at least ten
percent of the amount of funds handled, with a
maximum required amount of $500,000 (increased
to $1,000,000,000 for plans that hold securities
issued by an employer of employees covered by the
plan).
89 NASAA Minimum Financial Requirements For
Investment Advisers Model Rule 202(d)–1 (Sept. 11,
2011), available at http://www.nasaa.org/wpcontent/uploads/2011/07/IA-Model-Rule-MinimumFinancial-Requirements.pdf.

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to maintain at all times a minimum net
worth of $35,000 (with some
exceptions), an adviser who has
discretionary authority but not custody
over client funds or securities to
maintain at all times a minimum net
worth of $10,000, and an adviser who
accepts prepayment of more than $500
per client and six or more months in
advance to maintain at all times a
positive net worth), provide an
appropriate model for a minimum
capital requirement? Why or why not?
• Although investment advisers are
required to report specific information
about the assets that they manage on
behalf of clients, they are not required
to report specific information about
their own assets.90 Should advisers be
required to obtain annual audits of their
own financials and to provide such
information on Form ADV? Would such
a requirement raise privacy concerns for
privately held advisers?
By the Commission.
Dated: April 18, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018–08679 Filed 5–8–18; 8:45 am]
BILLING CODE 8011–01–P

DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 151
[Docket No. USCG–2018–0245]
RIN 1625–AC45

Ballast Water Management—Annual
Reporting Requirement
Coast Guard, DHS.
Notice of proposed rulemaking.

AGENCY:
ACTION:

The Coast Guard proposes to
amend its regulations on ballast water
management by eliminating the
requirement for vessels operating on
voyages exclusively between ports or
places within a single Captain of the
Port Zone to submit an Annual Ballast
Water Summary Report for calendar
year 2018. The Coast Guard views this
current reporting requirement as
unnecessary to analyze and understand
ballast water management practices.
This proposal would also serve to
reduce the administrative burden on the

SUMMARY:

90 Form ADV only requires that advisers with
significant assets (at least $1 billion) report the
approximate amount of their assets within one of
the three ranges ($1 billion to less than $10 billion,
$10 billion to less than $50 billion, and $50 billion
or more). Item 1.O of Part 1A of Form ADV.

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Federal Register / Vol. 83, No. 90 / Wednesday, May 9, 2018 / Proposed Rules
regulated population of vessels which
are equipped with ballast tanks.
DATES: Comments and related material
must be received by the Coast Guard on
or before June 8, 2018. Comments sent
to the Office of Management and Budget
(OMB) on collection of information
must reach OMB on or before June 8,
2018.
ADDRESSES: You may submit comments
identified by docket number USCG–
2018–0245 using the Federal
eRulemaking Portal at http://
www.regulations.gov. See the ‘‘Public
Participation and Request for
Comments’’ portion of the
SUPPLEMENTARY INFORMATION section for
further instructions on submitting
comments.
Collection of information. Submit
comments on the collection of
information discussed in section V.D. of
this preamble both to the Coast Guard’s
online docket and to the Office of
Information and Regulatory Affairs
(OIRA) in the White House Office of
Management and Budget using one of
the following two methods:
• Email: dhsdeskofficer@omb.eop.gov.
• Mail: OIRA, 725 17th Street NW,
Washington, DC 20503, attention Desk
Officer for the Coast Guard.
FOR FURTHER INFORMATION CONTACT: For
information about this document call or
email Mr. John Morris, Program
Manager, Environmental Standards
Division, Coast Guard; telephone 202–
372–1402, email environmental_
standards@uscg.mil.
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble

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I. Public Participation and Request for
Comments
II. Abbreviations
III. Basis and Purpose
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

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II. Abbreviations
BLS Bureau of Labor Statistics
BWM Ballast Water Management
CFR Code of Federal Regulations
COI Collection of Information
COT Captain of the Port
DHS Department of Homeland Security
FR Federal Register
NANPCA Non-Indigenous Aquatic
Nuisance Prevention and Control Act of
1990
NBIC National Ballast Information
Clearinghouse
NISA National Invasive Species Act of 1996
OMB Office of Management and Budget
Pub. L. Public Law
§ Section
U.S.C. United States Code

III. Basis and Purpose

I. Public Participation and Requests for
Comments
We view public participation as
essential to effective rulemaking, and
will consider all comments and material
received during the comment period.
Your comment can help shape the
outcome of this rulemaking. If you

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submit a comment, please include the
docket number for this rulemaking,
indicate the specific section of this
document to which each comment
applies, and provide a reason for each
suggestion or recommendation.
We encourage you to submit
comments through the Federal
eRulemaking Portal at http://
www.regulations.gov. If your material
cannot be submitted using http://
www.regulations.gov, contact the person
in the FOR FURTHER INFORMATION
CONTACT section of this proposed rule
for alternate instructions. Documents
mentioned in this proposed rule as
being available in the docket, and all
public comments, will be available in
our online docket at http://
www.regulations.gov, and can be viewed
by following that website’s instructions.
Additionally, if you go to the online
docket and sign up for email alerts, you
will be notified when comments are
posted or if a final rule is published.
We accept anonymous comments. All
comments received will be posted
without change to http://
www.regulations.gov and will include
any personal information you have
provided. For more about privacy and
the docket, visit http://
www.regulations.gov/privacyNotice.

A. Legal Authority
The Non-Indigenous Aquatic
Nuisance Prevention and Control Act of
1990 (NANPCA, Pub. L. 101–646), as
amended by the National Invasive
Species Act of 1996 (NISA), (Pub. L.
104–332), requires the Secretary of the
Department of Homeland Security
(DHS) to ensure, to the maximum extent
practicable, that aquatic nuisance
species are not discharged into U.S.
waters from vessels (16 U.S.C. 4701 et
seq.). These statutes also direct the
Secretary to issue regulations and
collect records regarding vessel
ballasting practices as a means for

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21215

determining vessel compliance with the
ballast water management (BWM)
program (16 U.S.C. 4711(c) and (f)) and
they authorize the Secretary to revise
such regulations, as necessary, on the
basis of best scientific information, and
in accordance with criteria developed
by the Aquatic Nuisance Species Task
Force (16 U.S.C. 4711(e)). The Secretary
has delegated the regulatory functions
and authorities in 16 U.S.C. 4711 to the
Commandant of the Coast Guard
(Department of Homeland Security
Delegation No. 0170.1 (II.)(57)).
Coast Guard regulations regarding
BWM are located in 33 CFR 151,
subparts C (§§ 151.1500 through
151.1518) and D (§§ 151.2000 through
151.2080). The regulations we propose
to amend, §§ 151.2015 and 151.2060,
were issued in 2015 and deal with BWM
reporting and recordkeeping
requirements. See ‘‘Ballast Water
Management Reporting and
Recordkeeping’’ final rule (80 FR 73105,
Nov. 24, 2015).
You may find a full discussion of the
statutory and regulatory history of the
Coast Guard’s broader actions to
implement both NANPCA and NISA in
the preamble of our 2012 final rule,
‘‘Standards for Living Organisms in
Ships’ Ballast Water Discharged in U.S.
Waters,’’ published on March 23, 2012
(77 FR 17254, 17255).
B. Reason for This Proposed Rule
We have determined that the annual
reporting requirement in § 151.2060 for
vessels operating in a single Captain of
the Port (COTP) Zone is unnecessary to
analyze and understand ballast water
management practices and is an
unnecessary burden that should be
removed. Our proposal to amend
§§ 151.2015 and 151.2060 is in
accordance with 16 U.S.C. 4711(e)
which authorizes the Secretary to revise
such regulations, as necessary, on the
basis of best scientific information, and
in accordance with criteria developed
by the Aquatic Nuisance Species Task
Force.
The 2015 final rule established a 3year requirement starting in 2016 for the
master, owner, operator, agent, or
person in charge of certain vessels with
ballast tanks to submit an annual report
of their BWM practices. The
requirement applies to U.S. nonrecreational vessels that operate on
voyages exclusively between ports or
places within a single COTP Zone.
These reports contain information,
specified in § 151.2060(f), about the
vessel, the number of ballast tanks, total
ballast water capacity, and a record of
ballast water loading and discharges.
These reports are submitted to the

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National Ballast Information
Clearinghouse (NBIC).
The annual reports for calendar years
2016, 2017, and 2018, are due on March
31 of the following year. March 31, 2019
is the due date for the last report
required by regulation. This proposed
rule seeks to eliminate this annual
reporting requirement in § 151.2060(e)
before the 2018 report is due. It would
also amend § 151.2015(c) to exempt
vessels that operate on voyages
exclusively between ports or places
within a single COTP Zone from
§ 151.2060 reporting requirements.
The Coast Guard is proposing to
remove this requirement because it
views the existing reporting requirement
as not meeting the necessary objective.
We have reviewed the 2016 annual
reports and have concluded that they do
not contribute to the quality and breadth
of BWM data as originally intended. A
discussion of the objective of this
requirement can be found in the
preamble of the 2015 final rule.1 Our
objective was to gather a sufficient
amount of data without imposing an
undue burden on vessels that were
otherwise not required to report.
However, we have concluded that the
current annual reporting data fields are
too simplistic to capture vessel
movements and ballasting operations in
the necessary level of detail. Therefore,
we propose to relieve the affected
population of the requirement to submit
an annual report for calendar year 2018.
We received recommendations
supporting this proposed action in
response to our June 8, 2017 (82 FR
26632) request to the public to identify
rules that should be repealed, replaced,
or modified to alleviate unnecessary
regulatory burdens. To view these
recommendations, see submissions 102,
143, and 147 under docket number
USCG–2017–0480. One commenter
correctly points out that a vessel
operator cannot indicate in the Annual
Ballast Water Summary Report whether
the vessel uses water from a U.S. public
water system as ballast.

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IV. Discussion of Proposed Rule
In this section, we describe how we
propose to remove the Annual Ballast
Water Ballast Water Summary Report
requirement through changes to
§§ 151.2015 and 151.2060. Our
1 See

80 FR 73105, 73106.

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proposed amendatory instructions and
regulatory text appear at the end of this
document.
Section 151.2015. Currently
§ 151.2015(c) exempts vessels that
operate exclusively on voyages between
ports or places within a single COTP
Zone from the ballast water
management requirements in § 151.2025
and from the recordkeeping
requirements in § 151.2070. We propose
to add the reporting requirements in
§ 151.2060 to this current list of
exemptions in § 151.2015(c). Restoring
this reporting exemption provision to
§ 151.2015(c) makes it clear to vessels
that operate exclusively on voyages
between ports or places within a single
COTP Zone that they are not subject to
the reporting requirements in
§ 151.2060.
We also propose to amend Table 1 to
§ 151.2015, which lists specific
exemptions for types of vessels. We
propose to amend the column
‘‘151.2060 (Reporting)’’ to reflect vessels
that operate exclusively on voyages
between ports or places within a single
COTP Zone are exempt from the
reporting requirements in § 151.2060.
We would also add a footnote to the
table for non-seagoing vessels. This
footnote would replace the current
lengthy qualifying language in the
‘‘151.2070 (Recordkeeping)’’ column of
the table for those non-seagoing vessels
that operate exclusively on voyages
between ports or places within a single
COTP zone. We would also apply the
footnote to the table’s ‘‘151.2060
(Reporting)’’ column in that row based
on our proposed amendment to
§ 151.2015(c). Non-seagoing vessels are
the only category of vessels in the table
that may need this potential exemption
reminder. The other categories of
vessels are either exempt or operate in
multiple COTP zones.
Section 151.2060. Paragraph (b) of
§ 151.2060 currently begins with
language exempting vessels operating
exclusively on voyages between ports or
places within a single COTP Zone. We
propose to delete this language because
it would no longer be needed based on
our proposed amendment to
§ 151.2015(c) that would exempt such
vessels from the requirements in
§ 151.2060. Also, as previously
discussed we propose to remove
§ 151.2060(e) and (f). Paragraph (e)
contains the requirement to submit the

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Annual Ballast Water Summary Report
to the NBIC and paragraph (f) describes
the information to be included in that
report.
V. Regulatory Analyses
The Coast Guard developed this
proposed rule after considering
numerous statutes and Executive orders
related to rulemaking. A summary of
our analyses based on these statutes or
Executive orders follows.
A. Regulatory Planning and Review
Executive Orders 13563 (Improving
Regulation and Regulatory Review) and
12866 (Regulatory Planning and
Review) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. Executive
Order 13771 (Reducing Regulation and
Controlling Regulatory Costs) directs
agencies to reduce regulation and
control regulatory costs and provides
that ‘‘for every one new regulation
issued, at least two prior regulations be
identified for elimination, and that the
cost of planned regulations be prudently
managed and controlled through a
budgeting process.’’
The Office of Management and Budget
(OMB) has not designated this rule a
‘‘significant regulatory action,’’ under
section 3(f) of Executive Order 12866.
Accordingly, OMB has not reviewed it.
OMB considers this rule to be an
Executive Order 13771 deregulatory
action. See OMB’s Memorandum
‘‘Guidance Implementing Executive
Order 13771, Titled ‘Reducing
Regulation and Controlling Regulatory
Costs’’’ (April 5, 2017). A regulatory
analysis follows.
The Coast Guard considers all
estimates and analysis in this regulatory
analysis subject to change in
consideration of public comments.
Table 1 presents a summary of the
economic impact of the proposed rule.
A detailed description of the estimates
follows in the next section.

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TABLE 1—SUMMARY OF THE ECONOMIC IMPACT OF THE PROPOSED RULE
Description

Eliminate the requirement for vessels operating exclusively within
a single COTP Zone to report
ballast management practices
to the NBIC.

Owners or Operators of vessels
with ballast tanks and operating exclusively on voyages
between ports and places within one COTP Zone would not
have to report their ballast
management practices for the
final year of a 3-year commitment to report ballasting operations.

Under this proposed rule, the Coast
Guard would no longer require owners
or operators of vessels with ballast tanks
operating exclusively on voyages
between ports or places within a single
COTP Zone to submit an annual
summary report of their ballast water
management practices.
Since 2016, owners or operators of
vessels affected by the 2015 final rule
provision in § 151.2060(e) have
submitted annual summary reports as
required to the NBIC. These summary
reports were used to estimate the
number of vessels that operated and the
amount of ballast water discharged
within a single COTP Zone. Based on
the data received and analyzed by the
NBIC, the Coast Guard is able to
determine the actual number of vessels
affected by the 2015 final rule. The
NBIC data confirms that 67 owners or
operators of 166 U.S.-flagged vessels 3
have reported ballasting operations in
accordance with § 151.2060(e). Table 2
presents the vessel types and number of
these vessels.

TABLE 2—U.S.-FLAGGED VESSELS
OPERATING EXCLUSIVELY WITHIN A
SINGLE COTP ZONE AFFECTED BY
THIS PROPOSED RULE
Vessel type

Affected
population

Tanker—Other ......................
Tug only ................................
Offshore supply vessel .........
Other (research, fishing, etc.)
Passenger .............................

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Affected
population 2

Proposed change

1
57
38
21
2

1 3 We estimated the population of affected
vessels in the 2015 final rule to be 1,280. This was
an estimate based on potential vessels that might
operate exclusively within a single COTP Zone.
Since the publication of the 2015 final rule, vessel
owners or operators have been providing
information to the NBIC regarding their ballasting
operations and area of operation. From this
information, we are able to determine the actual
vessel population that exclusively operate within a
single COTP Zone. This proposed rule, in addition
to eliminating § 151.2060(e), would also reduce the
affected population estimated in the 2015 final rule
from 1,280 to 166 vessels.

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67 owners or
operators of
166 vessels
operating in
one COTP
Zone.

Cost savings

Benefits

One-time savThe proposed rule would remove
ings of $3,461.
the reporting requirement for
the remainder of 2018 and provide a one-time partial year
savings for owners or operators.

Labor Statistics (BLS) to be $39.19 per
hour.4 We calculated the load factor
from data collected in the Employer
Cost for Employee Compensation survey
done by the BLS and applied it to the
mean hourly wage rate to obtain a fully
Affected
Vessel type
population
loaded wage rate, which more
accurately represents the employers’
Bulk carrier ...........................
2
5
Barge only ............................
45 cost per hour for an employee’s work.
The load factor we used for this
Total ...............................
166 economic analysis is 1.52.6 7 The loaded
mean hourly wage rate used to assess
Source: NBIC Data https://invasions.si.edu/
the savings estimates for this proposed
nbic/.
rule is calculated at $59.57 ($39.19 ×
We estimated in the 2015 final rule
1.52).
that the total annual amount of burden
We anticipate that by eliminating the
hours for owners or operators
completing the reporting requirement at reporting requirement from the last
quarter of the year, this proposed rule
40 minutes per vessel per year. We
would reduce industry’s economic
break down those 40 minutes as 25
burden by 58.1 hours (166 vessels × 0.35
minutes to account for time needed
hours). We calculate that the dollar
throughout the year to record ballast
management operations and 15 minutes value saved would be $20.85 per vessel
($59.57 wage × 0.35 hours). The
for time needed by owners or operators
to aggregate and calculate the recorded
estimated one-time total savings for
ballast water discharge information and removing the reporting requirement for
to complete the electronic form
the 166 vessels operating exclusively
submitted to the NBIC.
between port or places within a single
This proposed rulemaking has been
COTP Zone would be $3,461 ($20.85 per
scheduled to enable the Coast Guard to
vessel savings × 166 vessels) (nonissue a final rule by the end of fiscal
discounted). Table 3 presents the total
year 2018, which is September 30, 2018, savings to the affected population.
and to make the rule effective October
1, 2018. The current regulation only
requires annual reports through the
calendar year 2018. Therefore, any
4 Information about the wage rates for Captains,
realized savings from this proposed rule Mates and Vessel Pilots (53–5021) can be found at
https://www.bls.gov/oes/2016/may/oes535021.htm.
would account for the last 3 months of
5 A loaded wage rate is what a company pays per
calendar year 2018. We estimate that the
hour to employ a person, not the hourly wage the
total time saved by this proposed rule
employee receives. The loaded wage rate includes
would be 21.25 minutes per vessel (15
the cost of benefits (health insurance, vacation,
minutes for submission of report + 6.25
etc.).
6 From the BLS, Employer Cost for Employee
total minutes from the last 3 months of
2018). Converting this time to an hourly Compensation survey. Total compensation divided
by wage and salary compensation.
equivalent, we arrive at 0.35 hours
7 The load factor for wages is calculated by
(21.25 minutes/60 minutes).
dividing total compensation by wages and salaries.
We anticipate that the person charged For this report, we used the Transportation and
Materials Moving Occupations, Private Industry
with collecting and reporting the
report (Series IDs, CMU2010000520000D and
information to NBIC would be a vessel
for all workers using the
Captain, Mate or Vessel Pilot. The mean CMU2020000520000D)
multi-screen data search. Using 2016 Q2 data, we
hourly wage rate associated with these
divide $27.55/$18.08 to get the load factor of 1.52.
professions is reported by the Bureau of See https://data.bls.gov/cgi-bin/srgate.

TABLE 2—U.S.-FLAGGED VESSELS
OPERATING EXCLUSIVELY WITHIN A
SINGLE COTP ZONE AFFECTED BY
THIS PROPOSED RULE—Continued

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C. Assistance for Small Entities

TABLE 3—TOTAL SAVINGS FOR
AFFECTED VESSELS
Hourly Wage Paid to Employee ...
Load Factor to Account for Cost
of Benefits .................................
Loaded Wage ...............................
Hours ............................................
Savings per Vessel (Hours ×
Loaded Wage Rate) ..................
Affected Population ......................
Total Savings * (Cost per Vessel ×
Affected Population) ..................

$39.19
1.52
$59.57
0.35
$20.85
166
$3,461

* Represents undiscounted totals. Totals
may not sum due to rounding.

This proposed rulemaking would not
have annual recurring savings. This
proposed rule would not require
additional Coast Guard resources to
implement and would be budget
neutral.
In addition, a one-time savings of
$3,461 in 2018 is equivalent to
approximately $197.76 in 2016 dollars
using perpetual discounting at 7
percent.

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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.
As described in the ‘‘Regulatory
Planning and Review’’ section, we
expect that the savings per vessel would
be $20.85 for the remainder of 2018. The
Coast Guard is eliminating the reporting
requirement under § 151.2060(e), which
applies to owners or operators of vessels
operating exclusively between ports or
places within a single COTP Zone.
Based on our economic assessment of
the proposed rule, we conclude that this
proposed rule would have no cost
burden to industry.
Accordingly, the Coast Guard certifies
under 5 U.S.C. 605(b) that this proposed
rule would not have a significant
economic impact on a substantial
number of small entities. If you think
that your business, organization, or
governmental jurisdiction qualifies as a
small entity and that this proposed rule
would have a significant economic
impact on it, please submit a comment
to the docket at the address under
ADDRESSES. In your comment, explain
why you think it qualifies and how and
to what degree this proposed rule would
economically affect it.

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Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104–
121, we want to assist small entities in
understanding this proposed rule so that
they can better evaluate its effects on
them and participate in the rulemaking.
If the proposed rule would affect your
small business, organization, or
governmental jurisdiction and you have
questions concerning its provisions or
options for compliance, please contact
the person in the FOR FURTHER
INFORMATION CONTACT section of this
proposed rule. The Coast Guard will not
retaliate against small entities that
question or complain about this
proposed rule or any policy or action of
the Coast Guard.
Small businesses may send comments
on the actions of Federal employees
who enforce, or otherwise determine
compliance with, Federal regulations to
the Small Business and Agriculture
Regulatory Enforcement Ombudsman
and the Regional Small Business
Regulatory Fairness Boards. The
Ombudsman evaluates these actions
annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247).
D. Collection of Information
This proposed rule would call for a
change to an existing collection of
information under the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501–
3520. As defined in 5 CFR 1320.3(c),
‘‘collection of information’’ comprises
reporting, recordkeeping, monitoring,
posting, labeling, and other similar
actions. The title and description of the
information collections, a description of
those who must collect the information,
and an estimate of the total annual
burden follow.
Title: Ballast Water Management
Reporting and Recordkeeping.
OMB Control Number: 1625–0069.
Summary of the Collection of
Information: This proposed rule
modifies the existing BWM reporting
and recordkeeping requirement in
§ 151.2060(e) which would amend
current reporting. In the current
regulation, the Coast Guard requires
vessels with ballast tanks that operate
exclusively on voyages between ports or
places within a single COTP Zone to
submit an annual summary report on
their ballast water practices. The current
final rule published in 2015 requires
vessels to report to the NBIC for a 3-year
period, after which a sunset clause in
the rule has this provision expiring at

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the end of the 2018 calendar year. This
proposed rule would remove the last
year of reporting requirements for the
population affected by the 2015 final
rule and prior to the provision’s sunset;
thereby, returning the overall Collection
of Information (COI) burden estimates to
the 2015 final rule’s level.
Need for Information: The Coast
Guard is removing the reporting
requirement under § 151.2060(e),
because the information being provided
by the affected population did not meet
the expectations of the Coast Guard.
Proposed Use of Information: The
collection of this BWM data was
intended to fill a limited gap in
information about vessels operating
exclusively within a single COTP Zone.
The data was to measure ballast water
practices within a COTP Zone, by
vessels that operated exclusively within
a single COTP Zone. Sections
151.2060(e) and (f) are being removed
because the data collected did not help
the Coast Guard to better understand
these ballasting practices.
Description of the Respondents: The
respondents are the owners or operators
of vessels with ballast water tanks
operating exclusively on voyages
between ports or place within a single
COTP Zone.
Number of Respondents: The current
number of respondents is 9,663.
However, when we published the final
rule in 2015, we incorrectly estimated
the additional number of respondents in
the collection of information to be
1,280. The population of 1,280 was an
overestimation by the Coast Guard
because information about vessels
operating exclusively within a single
COTP Zone had not been documented
prior to the 2015 final rule. For the
purpose of maintaining continuity
between the 2015 final rule and the
overall COI OMB CONTROL NUMBER:
1625–0069, the Coast Guard estimates
changes to the overall COI using the
2015 final rule COI values to obtain a
net result of zero.8 Therefore, in order to
revert back to the 2015 baseline, we
need to subtract the 1,280 respondents
we incorrectly estimated in the final
rule.9 With this change, we are
maintaining the 2015 baseline of 8,383
respondents because we would be
subtracting the incorrect estimated
population of 1,280 respondents. The
incurred cost savings and burden-hour
reduction we estimate in this proposed
rule would only affect 166 respondents
8 The goal is to revert the COI Control #1625–
0069 back to its original collection prior to the 2015
ballast water recordkeeping and reporting final rule.
9 Appendix A of COI OMB Control No. 1625–
0069.

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for the last three months of this calendar
year. After this time, the approved
OMB-approved number of respondents

would remain at the 2015 baseline level
of 8,383 respondents because of the
sunset clause in the 2015 final rule. We

show these calculations, for illustrative
purposes, in the below table.

TABLE 4—SUMMARY OF COLLECTION OF INFORMATION, RESPONDENTS
Reporting items

Current COI
respondents

NPRM change

New COI
values

(A)

(B)

(C)

(B¥C)

Voyage Reports ...........................................................................................................................
Annual Reports ............................................................................................................................
Compliance Extension Request ..................................................................................................

8,383
1,280
0

0
1,280
0

8,383
0
0

Total ......................................................................................................................................

9,663

1,280

8,383

Frequency of Response: Reporting
requirement under this COI is
scheduled to occur annually. This
proposed rule would result in current
respondents under § 151.2060(e) to be
no longer required to maintain and
submit BWM information on an annual
basis.
Burden of Response: The Coast Guard
anticipates that the elimination of the
rule would decrease burden by
approximately 40 minutes per report for
vessels with ballast water tanks
operating exclusively on voyages
between ports or places within a single
COTP Zone.
Estimate of Total Annual Burden: The
annual reduction in burden is estimated
as follows:
(a) Annual reduction in burden
resulting from removing reporting
requirement for vessels operating within

a single COTP Zone: This proposed rule
would reduce the private sector burden
hours for this COI by 58.1 hours (166
vessels × 0.35 hours [3 months of
savings]). There are three items
associated with this collection of
information: Voyage reports, annual
reports (which is applicable to this
proposed rule), and compliance
extension requests. The voyage reports
and compliance extension requests are
not included in this proposed rule. The
burden estimates in this collection of
information, stemming from these,
would be unaffected. Voyage reports
account for 60,727 hours, annual reports
account for 858 hours, and compliance
extension requests account for 234
hours for a total of 61,819 hours.
Essentially, with this proposed rule, we
are accounting for the 58.1 burden hours
of reduction in the last three months of

this calendar year only, when the sunset
clause becomes effective. To capture
this change and to correct for the
incorrect hour burden estimate of 858
hours, the total hour burden in the last
three months of this year would be
about 61,019 hours (61,819 hours ¥ 858
hours + 58 hours). After December 31,
2018, the burden hours will remain at
the 2015 baseline level of 60,691 hours,
or the current OMB inventory amount,
with the subtraction of the 858 hours for
the annual reports.
Moreover, due to the establishment of
a sunset clause in the 2015 final rule, all
recordkeeping and reporting burden
associated with this regulation would be
eliminated. This adjustment would only
reduce current ICR burden levels prior
to the 2015 final rule. We show the
burden hour calculations in the table 5.

TABLE 5—SUMMARY OF COLLECTION OF INFORMATION, BURDEN HOURS
Reporting items

Current COI
burden hours

NPRM change

New COI
values

(A)

(B)

(C)

(B¥C)

Voyage Reports ...........................................................................................................................
Annual Reports ............................................................................................................................
Compliance Extension Request ..................................................................................................

60,727
858
234

0
858
0

60,727
0
234

Total ......................................................................................................................................

61,819

858

*60,961

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* Although this proposed rule would add 58.1 hours for the last three months of this year, after this time, the total hour burden estimate would
revert back to the 2015 baseline level or current OMB inventory amount of 60,961 due to the fact that there would no longer be a need to complete annual reports for vessels traveling exclusively between ports or places within a single Captain of the Port Zone.

(b) Reduction of annual burden due to
the elimination of the current rule: This
proposed rule would result in a
reduction of annual burden of 58.1
hours for the last three months of the
year ending December 31, 2018.
However, after correcting for the
overestimated burden in the 2015 COI,
the reduction in annual burden hours as
reflected in the Supporting Statement
for this COI is 858 hours (as explained
above).

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As required by 44 U.S.C. 3507 (d), we
will submit a copy of this proposed rule
to OMB for its review of the collection
of information.
If you submit comments on the
collection of information, submit them
both to OMB and to the docket where
indicated under ADDRESSES, by the date
under DATES.
You need not respond to a collection
of information unless it displays a
currently valid control number from
OMB. Before the Coast Guard could

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enforce the collection of information
requirements in this proposed rule,
OMB would need to approve the Coast
Guard’s request to collect this
information.
E. Federalism
A rule has implications for federalism
under Executive Order 13132
(Federalism) if it has a substantial direct
effect on States, on the relationship
between the national government and
the States, or on the distribution of

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power and responsibilities among the
various levels of government. We have
analyzed this proposed rule under
Executive Order 13132 and have
determined that it is consistent with the
fundamental federalism principles and
preemption requirements described in
Executive Order 13132. Our analysis
follows.
This proposed rule would revise the
Coast Guard’s BWM reporting and
recordkeeping requirements
promulgated under the authority of
NANPCA, as amended by NISA.
Specifically, we propose to remove the
requirement that an Annual Ballast
Water Summary Report for calendar
year 2018 be submitted for vessels
operating on voyages exclusively
between ports or places within a single
Captain of the Port Zone. NANPCA, as
amended by NISA, contains a ‘‘savings
provision’’ that saves to States their
authority to ‘‘adopt or enforce control
measures’’ for aquatic nuisance species
(16 U.S.C. 4725). Nothing in the Act
would diminish or affect the
jurisdiction of any State over species of
fish and wildlife. This type of BWM
reporting and recordkeeping is a
‘‘control measure’’ saved to States under
the savings provision and would not be
preempted unless State law makes
compliance with Coast Guard
requirements impossible or frustrates
the purpose of Congress. Additionally,
the Coast Guard has long interpreted
this savings provision to be a
congressional mandate for a FederalState cooperative regime in which
federal preemption under NANPCA, as
amended by NISA, would be unlikely.
The Coast Guard does not intend for the
removal of this Federal reporting
requirement to be a determination, or
have any implications, with regard to
the necessity of existing or future state
BWM reporting requirements.
Therefore, this proposed rule is
consistent with the fundamental
federalism principles and preemption
requirements described in Executive
Order 13132.
The Coast Guard recognizes the key
role that State and local governments
may have in making regulatory
determinations. Additionally, for rules
with federalism implications and
preemptive effect, Executive Order
13132 specifically directs agencies to
consult with State and local
governments during the rulemaking
process. If you believe this rule has
implications for federalism under
Executive Order 13132, please contact
the person listed in the FOR FURTHER
INFORMATION section of this preamble.

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F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995, 2 U.S.C. 1531–1538, requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100 million (adjusted for inflation) or
more in any one year. Though this
proposed rule would not result in such
an expenditure, we do discuss the
effects of this proposed rule elsewhere
in this preamble.
G. Taking of Private Property
This proposed rule would not cause a
taking of private property or otherwise
have taking implications under
Executive Order 12630 (Governmental
Actions and Interference with
Constitutionally Protected Property
Rights).
H. Civil Justice Reform
This proposed rule meets applicable
standards in sections 3(a) and 3(b)(2) of
Executive Order 12988, (Civil Justice
Reform), to minimize litigation,
eliminate ambiguity, and reduce
burden.
I. Protection of Children
We have analyzed this proposed rule
under Executive Order 13045
(Protection of Children from
Environmental Health Risks and Safety
Risks). This proposed rule is not an
economically significant rule and would
not create an environmental risk to
health or risk to safety that might
disproportionately affect children.
J. Indian Tribal Governments
This proposed rule does not have
tribal implications under Executive
Order 13175 (Consultation and
Coordination with Indian Tribal
Governments), because it would not
have a substantial direct effect on one or
more Indian tribes, on the relationship
between the Federal Government and
Indian tribes, or on the distribution of
power and responsibilities between the
Federal Government and Indian tribes.
K. Energy Effects
We have analyzed this proposed rule
under Executive Order 13211 (Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use). We have
determined that it is not a ‘‘significant
energy action’’ under that order because
it is not a ‘‘significant regulatory action’’
under Executive Order 12866 and is not
likely to have a significant adverse effect

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on the supply, distribution, or use of
energy.
L. Technical Standards
The National Technology Transfer
and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies
to use voluntary consensus standards in
their regulatory activities unless the
agency provides Congress, through
OMB, with an explanation of why using
these standards would be inconsistent
with applicable law or otherwise
impractical. Voluntary consensus
standards are technical standards (e.g.,
specifications of materials, performance,
design, or operation; test methods;
sampling procedures; and related
management systems practices) that are
developed or adopted by voluntary
consensus standards bodies.
This proposed rule does not use
technical standards. Therefore, we did
not consider the use of voluntary
consensus standards.
M. Environment
We have analyzed this proposed rule
under Department of Homeland
Security Management Directive 023–01
and Commandant Instruction
M16475.1D which guide the Coast
Guard in complying with the National
Environmental Policy Act of 1969 (42
U.S.C. 4321–4370f), and have made a
preliminary determination that this
action is one of a category of actions that
do not individually or cumulatively
have a significant effect on the human
environment. A preliminary Record of
Environmental Consideration (REC)
supporting this determination is
available in the docket where indicated
under the ‘‘Public Participation and
Request for Comments’’ section of this
preamble. This proposed rule would be
categorically excluded under paragraph
L54 of Appendix A, Table 1 of DHS
Instruction Manual 023–01–001–01,
Rev. 01. Paragraph L54 pertains to
regulations which are editorial or
procedural.
This proposed rule involves the
removal of the last year of a 3-year
annual ballast water reporting
requirement. We seek any comments or
information that may lead to the
discovery of a significant environmental
impact from this proposed rule.
List of Subjects in 33 CFR Part 151
Administrative practice and
procedure, Ballast water management,
Oil pollution, Penalties, Reporting and
recordkeeping requirements, Water
pollution control.
For the reasons discussed in the
preamble, the Coast Guard proposes to

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Authority: 16 U.S.C. 4711; Department of
Homeland Security Delegation No. 0170.1,
para. II, (57).

amend 33 CFR part 151, subpart D, as
follows:
PART 151—VESSELS CARRYING OIL,
NOXIOUS LIQUID SUBSTANCES,
GARBAGE, MUNICIPAL OR
COMMERCIAL WASTE, AND BALLAST
WATER
1. The authority citation for part 151,
subpart D, is revised to read as follows:

■

§ 151.2015

Exemptions.

*

*

*

*

*

2. Amend § 151.2015 as follows:
a. In paragraph (c), after the text
‘‘(ballast water management (BWM)
requirements),’’ add the text ‘‘151.2060
(reporting)’’; and
■ b. Revise the fourth and sixth rows in
table 1 to § 151.2015 to read as follows:
■
■

TABLE 1 TO § 151.2015—TABLE OF 33 CFR 151.2015 SPECIFIC EXEMPTIONS FOR TYPES OF VESSELS
151.2025
(Management)

151.2060
(Reporting)

*
*
*
Vessel operates exclusively on voyages between ports
or places within a single COTP Zone.

*
Exempt ...............................

*
*
Exempt ...............................

Exempt.

*
*
*
Non-seagoing vessel ......................................................

*
Exempt ...............................

*
*
Applicable 1 ........................

Applicable 1.

*
1 Unless

*

*

*

*

*

*
*

operating exclusively on voyages between ports or places within a single COTP Zone.

§ 151.2060

[Amended]

3. Amend § 151.2060 as follows:
a. In paragraph (b), remove the words
‘‘Unless operating exclusively on
voyages between ports or places within
a single COTP Zone, the’’ and add, in
their place, the word ‘‘The’’; and
■ b. Remove paragraphs (e) and (f).
■
■

Dated: May 4, 2018.
J. G. Lantz,
Director of Commercial Regulations and
Standards.
[FR Doc. 2018–09877 Filed 5–8–18; 8:45 am]
BILLING CODE 9110–04–P

DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Part 42

Comment Deadline Date: The
Office solicits comments from the
public on this proposed rulemaking.
Written comments must be received on
or before July 9, 2018 to ensure
consideration.

RIN 0651–AD16

Changes to the Claim Construction
Standard for Interpreting Claims in
Trial Proceedings Before the Patent
Trial and Appeal Board
United States Patent and
Trademark Office, Department of
Commerce.
ACTION: Notice of proposed rulemaking.
The United States Patent and
Trademark Office (‘‘USPTO’’ or
‘‘Office’’) proposes changes to the claim
construction standard for interpreting
claims in inter partes review (‘‘IPR’’),
post-grant review (‘‘PGR’’), and the

SUMMARY:

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Comments should be sent
by electronic mail message over the
internet addressed to: PTABNPR2018@
uspto.gov. Comments may also be sent
by electronic mail message over the
internet via the Federal eRulemaking
Portal at http://www.regulations.gov.
See the Federal eRulemaking Portal
website for additional instructions on
providing comments via the Federal
eRulemaking Portal. All comments
submitted directly to the USPTO or
provided on the Federal eRulemaking

ADDRESSES:

AGENCY:

VerDate Sep<11>2014

transitional program for covered
business method patents (‘‘CBM’’)
proceedings before the Patent Trial and
Appeal Board (‘‘PTAB’’ or ‘‘Board’’). In
particular, the Office proposes to
replace the broadest reasonable
interpretation (‘‘BRI’’) standard for
construing unexpired patent claims and
proposed claims in these trial
proceedings with a standard that is the
same as the standard applied in federal
district courts and International Trade
Commission (‘‘ITC’’) proceedings. The
Office also proposes to amend the rules
to add that the Office will consider any
prior claim construction determination
concerning a term of the involved claim
in a civil action, or an ITC proceeding,
that is timely made of record in an IPR,
PGR, or CBM proceeding.
DATES:

[Docket No. PTO–P–2018–0036]

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*

151.2070
(Recordkeeping)

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Portal should include the docket
number (PTO–P–2018–0036).
Comments may also be submitted by
postal mail addressed to: Mail Stop
Patent Board, Director of the United
States Patent and Trademark Office,
P.O. Box 1450, Alexandria, VA 22313–
1450, marked to the attention of ‘‘Vice
Chief Administrative Patent Judges
Michael Tierney or Jacqueline Wright
Bonilla, PTAB Notice of Proposed
Rulemaking 2018.’’
Although comments may be
submitted by postal mail, the Office
prefers to receive comments by
electronic mail message to more easily
share all comments with the public. The
Office prefers the comments to be
submitted in plain text, but also accepts
comments submitted in searchable
ADOBE® portable document format or
MICROSOFT WORD® format.
Comments not submitted electronically
should be submitted on paper in a
format that accommodates digital
scanning into ADOBE® portable
document format.
The comments will be available for
public inspection at the Patent Trial and
Appeal Board, located in Madison East,
Ninth Floor, 600 Dulany Street,
Alexandria, Virginia. Comments also
will be available for viewing via the
Office’s internet website, https://
go.usa.gov/xXXFW, and on the Federal
eRulemaking Portal. Because comments
will be made available for public
inspection, information that the
submitter does not desire to be made
public, such as address or phone

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