The Director projects the base year's non-compensation operating expenses for each pilotage association, using recognized operating expense items from §404.101. Recognized operating expense items subject to inflation or deflation factors are adjusted for those factors based on the subsequent year's U.S. government consumer price index data for the Midwest, projected through the year in which the new base rates take effect, or if that is unavailable, the Federal Open Market Committee median economic projections for Personal Consumption Expenditures inflation.

[USCG-2017-0903, 83 FR 26193, June 5, 2018]