Financial Responsibility-Vessels; Superseded Pollution Funds, 28802-28828 [2020-08159]
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telephone 202–795–6066, email
Benjamin.H.White@uscg.mil.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
Table of Contents for Preamble
33 CFR Parts 135, 138, and 153
[Docket No. USCG–2017–0788]
RIN 1625–AC39
Financial Responsibility—Vessels;
Superseded Pollution Funds
Coast Guard, DHS.
Notice of proposed rulemaking.
AGENCY:
ACTION:
The Coast Guard proposes to
expand its regulations on vessel
financial responsibility to apply to all
tank vessels greater than 100 gross tons
as required by statute, and to make other
amendments that clarify and update
reporting requirements, reflect current
practice, and remove unnecessary
regulations. This proposed rule would
ensure that the Coast Guard has current
information when there are significant
changes in a vessel’s operation,
ownership, or evidence of financial
responsibility, and would reflect current
best practices in the Coast Guard’s
management of the Certificate of
Financial Responsibility program.
DATES: Comments and related material
must be received by the Coast Guard on
or before August 11, 2020. Comments
sent to the Office of Management and
Budget (OMB) on collection of
information must reach OMB on or
before July 13, 2020.
ADDRESSES: You may submit comments
identified by docket number USCG–
2017–0788 using the Federal
eRulemaking Portal at https://
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 Benjamin White, National
Pollution Funds Center, Coast Guard;
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SUMMARY:
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I. Public Participation and Request for
Comments
II. Abbreviations
III. Basis and Purpose and Regulatory
Background
A. Purpose of the Certificate of Financial
Responsibility (COFR) Regulations
B. History of COFR Regulations
C. History of 33 CFR Part 135 and Subpart
D of Part 153
IV. Discussion of Proposed Rule
A. Overview of Proposed Amendments to
COFR Regulations
B. Discussion of Proposed COFR
Regulation Revisions
C. Proposed Removal of 33 CFR 138.90(f)
D. Proposed Removal of 33 CFR Part 135
and Subpart D of 33 CFR Part 153
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
The Coast Guard views public
participation as essential to effective
rulemaking, and will consider all
comments and material received during
the comment period. Your comment can
help shape the outcome of this
rulemaking. If you submit a comment,
please include the docket number for
this rulemaking, indicate the specific
section of this document to which each
comment applies, and provide a reason
for each suggestion or recommendation.
We encourage you to submit
comments through the Federal
eRulemaking Portal at https://
www.regulations.gov. If you cannot
submit your material by using https://
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, and all
public comments, will be available in
our online docket at https://
www.regulations.gov, and can be viewed
by following that website’s instructions.
Additionally, if you visit the online
docket and sign up for email alerts, you
will be notified when comments are
posted or a final rule is published.
We accept anonymous comments. All
comments received will be posted
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without change to https://
www.regulations.gov and will include
any personal information you have
provided. For more about privacy and
submissions in response to this
document, see DHS’s eRulemaking
System of Records notice (85 FR 14226,
March 11, 2020).
We do not plan to hold a public
meeting but we will consider doing so
if public comments indicate that 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
311(k) Fund The fund established by
Section 311(k) of the Federal Water
Pollution Control Act
CERCLA Comprehensive Environmental
Response, Compensation, and Liability Act
of 1980
COFR Certificate of Financial
Responsibility
CFR Code of Federal Regulations
CIMS Contract Information Management
System
DHS Department of Homeland Security
eCOFR Electronic Certificate of Financial
Responsibility
EEZ Exclusive Economic Zone
FOSC Federal on-scene coordinator
FWPCA Federal Water Pollution Control
Act
MISLE Marine Information for Safety and
Law Enforcement
NAICS North American Industry
Classification System
NPFC National Pollution Funds Center
NPRM Notice of proposed rulemaking
OCSLA Fund Offshore Oil Pollution
Compensation Fund
OCSLAA Title III of the Outer Continental
Shelf Lands Act Amendments of 1978
OMB Office of Management and Budget
OPA 90 Oil Pollution Act of 1990
OSLTF or Fund Oil Spill Liability Trust
Fund
SBA Small Business Administration
U.S.C. United States Code
§ Section
III. Basis and Purpose, and Regulatory
History
The Oil Pollution Act of 1990 (OPA
90) (specifically, 33 U.S.C. 2716) and
the Comprehensive Environmental
Response, Compensation, and Liability
Act of 1980 (CERCLA) (specifically, 42
U.S.C. 9608), require responsible parties
for certain vessels to establish and
maintain evidence of financial
responsibility. The evidence of financial
responsibility must meet the maximum
amount of liability under 33 U.S.C.
2704(a) or (d). Violators of those
requirements are subject to various
penalties under 33 U.S.C. 2716a and 42
U.S.C. 9609.
The 2010 Coast Guard Authorization
Act (Pub. L. 111–281, 124 Stat. 2988
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(October 15, 2010)) amended OPA 90 by
expanding the population of vessels
subject to the evidence of financial
responsibility requirements. By statute,
that population now includes any tank
vessel greater than 100 gross tons but
less than or equal to 300 gross tons
using any place subject to the
jurisdiction of the United States. The
Coast Guard proposes to amend the
Code of Federal Regulations (CFR) to
reflect that statutory change. The Coast
Guard had previously issued Certificate
of Financial Responsibility (COFR)
regulations at 33 CFR part 138, subpart
A, which apply to vessels over 300 gross
tons, as well as certain other vessels
depending on how and where they are
operated. In the time since the Coast
Guard promulgated those regulations,
the Coast Guard has modernized and
simplified its COFR program. The Coast
Guard has also identified certain aspects
of the COFR program where it could
improve compliance, particularly in the
current COFR requirements for
reporting changes in vessel operation,
ownership, or evidence of financial
responsibility that affect the basis of the
Coast Guard’s decision to issue a COFR.
Finally, the structure of the current
COFR regulations and some of their
provisions, including the rules for
applying vessel gross tonnage, are out of
date and difficult to understand.
A. Purpose of COFR Regulations
Generally, under OPA 90, the
responsible parties (owners, operators,
and demise charters) for a vessel from
which oil is discharged, or poses the
substantial threat of a discharge of oil,
into or upon the navigable waters or
adjoining shorelines or the exclusive
economic zone (EEZ), are liable for the
removal costs and damages specified
from such an incident (33 U.S.C.
2702(a)). Embodying the ‘‘polluter pays’’
principle, this liability is strict, joint,
and several. In addition, 42 U.S.C. 9607
also states that the responsible parties
for a vessel from which a hazardous
substance is released, or which poses a
threat of a release of a hazardous
substance, are similarly strictly liable,
jointly and severally, for the resulting
response costs and damages.
Under OPA 90 and CERCLA, the
responsible parties for certain categories
of vessels must establish and maintain
evidence of financial responsibility in
accordance with regulations
promulgated by the Secretary. The
purpose of this requirement is to ensure
that, in advance of an oil pollution
incident or a hazardous substance
release, the responsible parties for the
vessels in the specified categories have
the financial ability to meet their
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potential liabilities under OPA 90 and
CERCLA up to the applicable limits of
liability.
Under 33 U.S.C. 2716 evidence of
financial responsibility is required for
the following categories:
(1) Vessels greater than 300 gross tons.
(2) Vessels using the EEZ to transship
or lighter oil destined for a place subject
to the jurisdiction of the United States.
(3) Tank vessels greater than 100 gross
tons.
B. History of COFR Regulations
Initially, the Coast Guard established
COFR regulations in 33 CFR part 138
with an interim rule published July 1,
1994 (59 FR 34210) followed by a final
rule published March 7, 1996 (61 FR
9264). In 2008 the Coast Guard amended
the COFR regulations and placed them
in a newly created subpart A of part 138
(73 FR 53691, September 17, 2008).1 In
addition to making several other
changes, that final rule removed a
requirement that responsible parties
carry an original or authorized copy of
the current COFR aboard each covered
vessel, because improved technology
enabled the Coast Guard to view vessel
COFRs electronically. This rule
proposes further changes to part 138,
subpart A, including changes to the
management of electronic documents.
C. History of 33 CFR Part 135 and
Subpart D of 33 CFR Part 153
The Coast Guard added part 135,
titled ‘‘Offshore Oil Pollution
Compensation Fund,’’ to 33 CFR in 1979
(44 FR 16868, March 19, 1979) and it
added subpart D, titled ‘‘Administration
of the Pollution Fund,’’ to 33 CFR part
153 in 1971 (36 FR 7010, April 13,
1971). This proposed rule would
remove 33 CFR part 135 and subpart D
of 33 CFR part 153, which concern
management of two pollution funds for
which OPA 90 repealed the authorities.
The two defunct funds are the Offshore
Oil Pollution Compensation Fund
(OSCLA Fund) in 33 CFR part 135 and
the Federal Water Pollution Control Act
(FWPCA) Section 311(k) Fund (311(k)
Fund) in subpart D of 33 CFR part 153.
On November 1, 2011, the Coast
Guard published a notice of inquiry (76
FR 67386) soliciting public comment on
whether to remove 33 CFR part 135. We
received no adverse comments; there
were three comments supporting the
removal of part 135.
1 That rule expanded part 138’s heading to
‘‘Financial Responsibility for Water Pollution
(Vessels) and OPA 90 Limits of Liability (Vessels
and Deepwater Ports)’’ and dedicated subpart B to
the last half of the revised heading—limits of
liability for vessels and deepwater ports under OPA
90.
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IV. Discussion of Proposed Rule
The Coast Guard proposes amending
33 CFR part 138, subpart A, and
removing the superseded regulations in
33 CFR parts 135 and 153. We explain
our specific proposed changes below.
A. Overview of Proposed Changes to
COFR Regulations
Following is an overview of proposed
revisions to 33 CFR part 138, subpart A:
(1) Evidence of financial
responsibility for tank vessels greater
than 100 gross tons but less than or
equal to 300 gross tons. As required by
33 U.S.C. 2716(a)(3), we propose
extending the regulatory requirement to
establish and maintain evidence of
financial responsibility to any tank
vessel greater than 100 gross tons but
less than or equal to 300 gross tons
using any place subject to the
jurisdiction of the United States.
(2) Reporting requirements. We also
propose reorganizing, clarifying, and
updating the reporting requirements for
submitting an Application. Examples of
new requirements include documenting
evidence of financial responsibility
submitted in support of an Application
or a request for COFR renewal, and
adding into regulatory text the current
practice of guarantor notification.
This set of proposed changes—
including § 138.150, which is dedicated
to reporting requirements and expressly
links those requirements to enforcement
provisions—aims to address instances
in which COFR Operators fail to report
changes to their status, as is currently
required by 33 CFR 138.90(e). These
failures include failing to report a
vessel’s financial changes in a timely
manner, failing to report a vessel
transfer to a new owner, and failing to
secure a guaranty and apply for a new
COFR—and have resulted in
compliance gaps. These gaps
compromise emergency responses
where an inability to confirm financial
responsibility has caused untimely
responses to oil spills and undermined
the COFR program.
Lastly, these proposed revisions are
intended to ensure that the Director
receives the most current and accurate
information when issuing a COFR.
These revisions would improve the
Coast Guard’s ability to verify vessel
compliance with COFR regulations. For
example, if an owner sells a vessel
while it is located in a place subject to
U.S. jurisdiction, the new responsible
party becomes immediately subject to
the COFR program. However, enforcing
compliance with the COFR program’s
requirements depends on the Coast
Guard knowing about the vessel
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transfer. The proposed regulatory
revisions mitigate the risk of uninsured
responsible parties and derelict vessels.
(3) Revise COFR regulations to
incorporate improved management
practices and technological
advancements. We also propose to
amend the COFR regulations to reflect
changes in the NPFC’s management of
the COFR program. The proposed
revisions include the following:
• New regulatory text expressly
authorizing COFR Operators,
guarantors, and agents for service of
process to submit signed scanned
documents;
• Permitting COFR Operators
submitting Applications or requests for
COFR renewal by email or fax to pay the
COFR Application and certification fees
up to 21 days after submission. This
method would replace the current rule’s
requirement to pay certification fees
before the NPFC issues the COFR;
• Updating and simplifying the
provisions that detail how to apply
gross tonnage assigned under different
measurement systems. This reflects
changes in the law since OPA 90’s
initial legislation and conforms the
regulatory text to the Coast Guard’s
‘‘Measurement of Vessels’’ final rule (81
FR 18701, March 31, 2016), which
amended the U.S. tonnage regulations in
46 CFR part 69;
• Adding new provisions describing
the COFR program’s current procedures
for determining the acceptability of
COFR guarantors; and
• Modifying past technical
amendments to implement the
Electronic COFR (eCOFR). These
regulatory changes are necessary to
manage the COFR program more
effectively, reduce the burden to the
public, and accommodate the frequent
changes in vessel operation during the
normal course of maritime commerce.
(4) Clarifying terminology. We
propose clarifying and simplifying the
terminology in COFR regulations for
consistency with law and COFR
program business practices. These
changes include using terms of art
consistently and simplifying
terminology.
B. Discussion of Specific Proposed
Changes to COFR Regulations
Table 1 provides a section-number
crosswalk between the current COFR
regulations and our proposed COFR
regulations. The crosswalk will assist
the reader in comparing the current
regulations with those in this proposed
rule. Following table 1 is a discussion
of substantive changes, which include
either new requirements or updates to
the rule to match current Coast Guard
practice. The narrative discussion does
not address every proposed change: for
example, the crosswalk shows that part
of current § 138.30 is proposed to
relocate to § 138.40, but we omitted
narrative discussion because proposed
§ 138.40 contains no substantive change
to requirements. When we applied plain
language doctrine required by E.O.
13563 to make these regulations easier
to understand but did not make
substantive changes we did not discuss
those changes.
TABLE 1—CROSSWALK OF CURRENT AND PROPOSED COFR REGULATIONS
Current COFR regulations
Proposed COFR regulations
Part 138—Financial Responsibility for Water Pollution (Vessels) and
OPA 90 Limits of Liability (Vessels, Deepwater Ports and Onshore
Facilities).
Subpart A—Financial Responsibility for Water Pollution (Vessels) .........
Part 138—Evidence of Financial Responsibility for Water Pollution
(Vessels) and OPA 90 Limits of Liability (Vessels, Deepwater Ports
and Onshore Facilities).
Subpart A—Evidence of Financial Responsibility for Water Pollution
(Vessels).
§ 138.10 Scope and purpose.
§ 138.20 Applicability.
§ 138.30 Definitions.
§ 138.40 General requirements.
§ 138.50 How to apply vessel gross tonnages.
§ 138.60 Forms and submissions; ensuring submission timeliness.
§ 138.60 Forms and submissions; ensuring submission timeliness.
§ 138.80 Applying for COFR.
§ 138.80 Applying for COFR.
§ 138.70 Issuance and renewal of COFR.
§ 138.90 Renewing COFR.
§ 138.110 How to establish and maintain evidence of financial responsibility.
§ 138.100 How to calculate a total applicable amount.
§ 138.10 Scope .........................................................................................
§ 138.15 Applicability ................................................................................
§ 138.20 Definitions ..................................................................................
§ 138.30 General ......................................................................................
§ 138.30(c) through (f) ..............................................................................
§ 138.40 Forms .........................................................................................
§ 138.45 Where to apply for and renew Certificates ................................
§ 138.50 Time to apply .............................................................................
§ 138.60 Applications, general instructions ..............................................
§ 138.65 Issuance of Certificates .............................................................
§ 138.70 Renewal of Certificates ..............................................................
§ 138.80 Financial responsibility, how established ..................................
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§§ 138.80(f) [untitled] and 138.85 Implementation schedule for amendments to applicable amounts by regulation.
§ 138.90(a)–(c) Individual and Fleet Certificates ......................................
§ 138.90(d) and (e), untitled .....................................................................
§ 138.100 Non-owning operator’s responsibility for identification ............
§ 138.110 Master Certificates ...................................................................
§ 138.120 Certificates, denial or revocation .............................................
§ 138.130 Fees .........................................................................................
§ 138.140 Enforcement .............................................................................
§ 138.150 Service of process ...................................................................
Proposed § 138.10
Scope and Purpose
Proposed § 138.10(a)(2) states that the
standards and procedures the Coast
Guard uses to determine guarantor
acceptability would be included within
the scope of subpart A. In addition, we
propose in § 138.10(a)(3) that the
reporting requirements for guarantors
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§ 138.80 Applying for COFR.
§ 138.150 Reporting requirements.
§ 138.160 Non-owning COFR Operator’s responsibility for identification.
§ 138.80 Applying for COFR.
§ 138.140 Application withdrawals, COFR denials and revocations.
§ 138.120 Fees.
§ 138.170 Enforcement.
§ 138.130 Designating agents for service of process.
would be included within the scope of
subpart A. These proposed changes for
submitting evidence of financial
responsibility on behalf of the COFR
Operator reflects current practice.
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Proposed § 138.20
Applicability
Proposed § 138.20(a)(1) would extend,
as required by statute, the applicability
of the rule to include tank vessels
greater than 100 gross tons but less than
or equal to 300 gross tons, regardless of
whether it is transshipping or lightering
oil. This provision expands the
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population of vessels under 300 gross
tons that are required to establish and
maintain evidence of financial
responsibility under 33 U.S.C. 2716.
The current regulation includes any
tank vessel using the waters of the EEZ
to transship or lighter oil destined for a
place subject to the jurisdiction of the
United States, but if a tank vessel is not
engaged in transshipping or lightering,
the current regulation has an exception
for those that are 300 gross tons or less.
In § 138.20(a)(2) through (a)(4), we
propose extending the applicability of
the rule to include guarantors,
responsible parties other than the COFR
Operator, and agents of process. This
proposed action would be in accordance
with current practice.
Proposed § 138.30 Definitions
We propose to cross-reference
additional statutory and regulatory
definitions, add new regulatory
definitions, amend regulatory
definitions in the current COFR
regulations, and remove definitions that
are not used.
The following definitions reflect
substantive changes from the current
rule:
Applicant and certificant: We propose
replacing the confusing terms
‘‘applicant’’ and ‘‘certificant’’ with the
term ‘‘COFR Operator’’ throughout the
rule. This action would promote
consistency with the COFR program’s
business practice that authorizes the
COFR Operator designated in the
‘‘Application’’ to represent the
responsible parties for purposes of
compliance with the COFR program.
COFR Operator: We propose to
redefine ‘‘COFR Operator’’ to clarify
when we are referring to the operator
who is liable in the event of an incident
or a release. We also propose replacing
the current term ‘‘Operator’’ with the
term ‘‘responsible party.’’ This rule
defines the term ‘‘responsible party,’’ for
purposes of OPA 90 and CERCLA
evidence of responsibility, by crossreference to the relevant statute, and
includes all of those persons who meet
the definition. This replacement of the
term ‘‘operator’’ with the newly-defined
terms ‘‘responsible party’’ and ‘‘COFR
Operator’’ makes clear that the
designation of a ‘‘COFR Operator’’ to act
on behalf of the responsible parties for
purposes of the COFR program does not
limit or preclude other responsible
parties from being operators within the
meaning of OPA 90 or CERCLA. We are
also expressly clarifying that, when
there is more than one responsible
party, the COFR Operator is the operator
designated and authorized by all the
vessel’s responsible parties to act on
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their behalf to comply with the COFR
program.
Fleet Certificate and Individual
Certificate: We propose a new definition
for the term ‘‘Fleet Certificate’’ to
parallel the definition of ‘‘Master
Certificate,’’ and a new definition for the
term ‘‘Individual Certificate,’’ so that
COFR regulations will include
definitions for all three types of
Certificates issued by the Director.
Financial guarantor: We propose to
revise the definition to make clear that
a financial guarantor cannot also be a
self-insurer of a vessel, but that it is
possible for the self-insurer of one
vessel to be the financial guarantor for
a different vessel.
Owner: We propose removing the
current regulatory definition of
‘‘owner.’’ It does not accurately reflect
current law, and it is not clear that a
separate regulatory definition of
‘‘owner’’ is needed or helpful, as both
OPA 90 and CERCLA define the term
‘‘owner’’ and we cross-reference those
definitions.
Tank vessel: We propose removing
the regulatory definition of ‘‘tank
vessel,’’ cross-referencing the OPA 90
statutory definition in proposed
§ 138.30(a), and moving the exceptions
to applicability that are embedded in
the current regulatory definition of
‘‘tank vessel’’ to proposed
§ 138.20(d)(3).
Vessel: We propose removing the
regulatory definition of ‘‘vessel’’ and
cross-referencing in § 138.30(a) the
statutory definitions that appear in OPA
90 and CERCLA. This is because there
are slight differences in the OPA 90 and
CERCLA definitions, specifically in the
reference to public vessels in OPA 90.
Therefore, although other provisions of
the current COFR regulations resolve
these differences, we believe the better
way to resolve the wording differences
is to cross-reference the statutory
definitions. This approach ensures that
COFR-regulation definitions will always
be consistent with OPA 90 and
CERCLA.
Proposed § 138.50 How To Apply
Vessel Gross Tonnages
The current COFR regulations provide
instructions to apply different gross
tonnage measurements for three
different purposes: (1) To determine
whether a tonnage threshold applies; (2)
to calculate a vessel’s OPA 90 and
CERCLA applicable amounts of
financial responsibility; and (3) to
determine the vessel’s OPA 90 and
COFR limits of liability. However, these
provisions are complex, and have been
difficult to apply, in part because they
were developed and established prior to
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the full coming into force of the
International Convention on Tonnage
Measurement of Ships (June 23, 1969)
on July 18, 1994. Furthermore, the 2010
Coast Guard Authorization Act included
amendments that updated, clarified, and
eliminated inconsistencies in the
tonnage measurement law. The Coast
Guard implemented these amendments
in the 2016 rule,2 which also
incorporated changes to help provide a
suitable framework for tonnage-based
regulations, allowing the Coast Guard to
specify tonnage thresholds more clearly.
This proposed rule maintains the
purposes of applying gross tonnage
measurements explained in the current
COFR regulations.
This proposed rule separates
provisions for applying vessel gross
tonnage in proposed § 138.50, and
clarifies and simplifies the current
language while conforming with the
2016 amendments to the U.S. tonnage
regulations. We added a table to
illustrate use of gross tonnages assigned
under the two overarching tonnage
measurement systems provided for by
U.S. law.3
As proposed in § 138.50(f), regardless
of the tonnage reported on the
Application, the appropriate tonnagecertifying document as provided for
under the U.S. tonnage regulations, such
as a tonnage certificate or completed
Simplified measurement application,
governs in determining the evidence of
financial responsibility applicable
amounts, except when the responsible
parties or guarantors knew or should
have known that the applicable tonnage
certificate was incorrect. In the event of
an oil pollution incident or hazardous
substance release, the tonnage-certifying
document governs the applicable limit
of liability. This information is vital to
the COFR program because the guaranty
is to the certified tonnage at the time of
the incident, and addresses what
happens if a vessel undergoes a
modification that affects the tonnage
after a COFR Operator submits an
Application. This approach also creates
certainty by removing the implication
that a tonnage re-measurement at the
time of an incident can supersede
liability and financial responsibility as
reflected on the tonnage-certifying
document.
The addition proposed in § 138.50(g)
also requires COFR Operators to submit,
upon request, the original or a copy of
2 ‘‘Measurement of Vessels’’ final rule (81 FR
18701, March 31, 2016).
3 These systems are under the Convention
Measurement System, which expresses gross
tonnage as ‘‘GT ITC,’’ and the Regulatory
Measurement System, which expresses gross
tonnage as ‘‘GRT.’’
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the tonnage certifying document(s). The
proposed rule would capture the fact
that, in some circumstances, vessels
may be assigned tonnage under both
measurement systems.
Proposed § 138.60 Forms and
Submissions; Ensuring Submission
Timeliness
To remain consistent with current
practice, proposed § 138.60(a) notes that
forms can be completed online or
downloaded. This is the Coast Guard’s
preference for submitting eCOFR
Applications. If you submit electronic
images, please note that, currently, our
system only accepts the following
imaging programs: PDF, JPEG, and TIFF.
Because of delays associated with mail
processing and security, submission of
forms by mail is discouraged.
Proposed § 138.60(c)(2) also removes
the option for hand-delivering
submissions because of the prohibition
of hand delivery under U.S.
Government mail security restrictions.
Also, § 138.60(e) makes clear that the
timeliness of submissions is solely the
responsibility of the person making the
submission.
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Proposed § 138.70 Issuance and
Renewal of COFR
Proposed § 138.70(b) removes the
express requirement to pay fees before
the issuance of a COFR. This would
reflect the NPFC’s current business
practice when the COFR Operator
submits the application via fax or email.
The proposed § 138.70(e) states that
certain tonnage information will be
posted to the NPFC’s COFR website,
including the measurement system(s)
used, which under proposed
§ 138.80(a)(1), the applicant is required
to provide.
Proposed § 138.80 Applying for COFRs
Proposed § 138.80 reflects the removal
of a requirement to pay fees before the
issuance of a COFR when Applications
are submitted by email or fax, by crossreferencing § 138.120. Section 138.120’s
new paragraph (a)(3)(i) allows payment
to be made within 21 days of the
Application. This allows flexibility for
the Director to issue COFRs when the
Application is complete and evidence of
financial responsibility has been
established, and before the NPFC
receives payment. The COFR Operator
must, however, ensure the fees are paid
within 21 days of submission of the
Application to avoid adverse
consequences specified in
§ 138.120(a)(4).
Proposed § 138.80(a)(1)(i)(C) also
clarifies that Master Certificates do not
name any specific vessel, but do state
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the maximum tonnages for the largest
vessel for which the COFR Operator
may be responsible. Without that
requirement, we would not have a
record of coverage if an incident occurs
in the intervening period between the
Application and the first periodic report
of covered vessels.
Proposed § 138.80(a)(1)(iv) requires
the COFR Operator to include a report
with the Application providing
information on the vessels covered by
the Master Certificate. The proposed
rule would also explain what
information the COFR Operator must
provide to the Director if a vessel has
been assigned tonnages under both
measurement systems. The inclusion of
both assigned tonnages for vessels with
more than one should avoid delay of the
application process and the effective
date of the guaranty.
Additionally, proposed
§ 138.80(a)(1)(iv)(B) adds a new
requirement that certain Master
Certificate application information be
updated, including a listing of vessels
that are no longer covered. This would
establish the termination of the guaranty
date. Finally, to assist in keeping this
information up to date, if during a 6month reporting period a vessel is
transferred to another responsible party,
the updated report must list the date
and place of transfer and the contact
information of the responsible party to
whom the vessel was transferred.
Unlike the current application
instruction section, § 138.60, proposed
§ 138.80(d) would not require an
original signature page for applications
submitted by email or fax. Instead, the
COFR Operator may submit a legible
scan of the signature page.
Proposed § 138.100 How To Calculate
a Total Applicable Amount
Proposed § 138.100(c) states that
when statute or regulation adjusts limits
of liability, the COFR Operator must
establish and maintain evidence of
financial responsibility in an amount
equal to or greater than the amended
total applicable amount, as provided in
§ 138.240(a).
Proposed § 138.110 How To Establish
and Maintain Evidence of Financial
Responsibility
The proposed rule removes from the
regulation the surety bond as a
specifically mentioned method for
establishing and maintaining evidence
of financial responsibility. This method
is still permitted as falling under the
‘‘other method’’ provision in paragraph
(f).
Proposed § 138.110(a) explains that
the guarantor continues to be liable and
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must provide coverage for 30 days
following NPFC receipt of a notice of
cancellation and not from the date the
guarantor issues the notice. The
proposed rule moves this provision
currently contained on the COFR
guaranty forms into the regulation, and
reflects a current and important NPFC
business practice. The guarantor would
provide the reason for termination as
part of its notice of cancellation, if
known. Additionally, proposed
§ 138.110(a) requires COFR Operators,
guarantors, and self-insurers to notify
the Director of any material change in
submitted information, including any
material change in the guarantor or selfinsurer’s financial position. A material
change is a change that would affect the
basis of the Director’s approval of the
guarantor or evidence of financial
responsibility. This notification would
be required immediately when a change
occurs, rather than within 10 days of the
change as specified in the current rule.
Proposed § 138.110(b) describes the
current practice for establishing and
maintaining the acceptability of COFR
insurance guarantors. This will entail
the guarantor submitting information on
its structure, business practices, history,
financial strength, and other
information as requested by the
Director. This process involves an initial
determination followed by annual
submission by each COFR insurance
guarantor.
Proposed § 138.110(c) clarifies the net
worth and working capital requirements
for financial guarantors to reflect current
practice. Currently, the NPFC does not
add the total applicable amount of each
vessel owned by one operator; rather, it
bases evidence of financial
responsibility on the operator’s vessel
with the greatest total applicable
amount. This proposed rule would
require net worth and working capital
be based on the aggregate total
applicable amounts.
Proposed § 138.110(f) changes the
submission date for requesting another
guaranty method for establishing
evidence of financial responsibility from
45 to 90 days prior to the date the COFR
is required. The NPFC needs this
additional 45 days to review the
financial documentation and
communicate with the potential
guarantor.
Proposed § 138.120 Fees
Proposed § 138.120 would eliminate
an existing requirement that the
application fee must be paid before the
Director will issue a COFR. This would
add flexibility and convenience for
COFR Operators, especially if they are
underway and want to enter U.S.
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navigable waters or U.S. Exclusive
Economic Zone. It further explains that
failure to pay fees in a timely manner
may result in denial or revocation of
COFR, debt collection, or other
enforcement. Finally, it amends the fee
refund procedures in the case of
overpayment. The Director would
refund overpayments, because, under
the proposed amendment, the NPFC
will not credit overpayments for the
operator’s future use or for transfer to
another operator anymore.
before a new COFR is required for
permanent vessel transfers and other
changes requiring issuance of a new
COFR, and information that need only
be reported 3 business days before
implementing the change for changes
not requiring issuance of a new COFR.
Changes that will require issuance of a
new COFR include, but are not limited
to: a permanent vessel transfer, change
of COFR Operator, vessel name change,
change in the vessel’s gross tonnage, or
termination of guaranty.
Proposed § 138.130 Designating
Agents for Service of Process
Proposed § 138.130(d) shortens the
notification period for a COFR Operator
or Guarantor to notify the Director of a
new agent for service of process from 10
days to 5 days. This shortened period
reflects efficiencies relating to electronic
notifications in place of mailed
notifications.
C. Proposed Removal of 33 CFR
138.90(f)
Current paragraph § 138.90(f) contains
a non-regulatory provision dealing with
the temporary transfer of custody of an
unmanned barge that has a COFR issued
under subpart A of part 138. The COFR
Operator who transfers the barge
continues to be liable under OPA 90,
CERCLA, or both, and continues to
maintain on file with the Director
acceptable evidence of financial
responsibility with respect to the barge.
The provision encourages the temporary
transferee to require the transferring
COFR Operator to acknowledge in
writing that the transferring COFR
Operator agrees to remain responsible
for pollution liabilities. We propose to
remove § 138.90(f) because the existing
COFR remains in effect in respect to that
vessel, and a temporary new COFR is
not required. We welcome comments on
its removal, particularly from those who
may employ the practice it encourages.
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Proposed § 138.140 Application
Withdrawals, COFR Denials and
Revocations
Proposed § 138.140 is revised to
reflect current business practice. It adds
a provision noting that the COFR
Operator may withdraw an Application
at any time before issuance of the COFR.
It also includes the failure to designate
and maintain a U.S. agent for service of
process to the list of cases in which the
Director may deny an Application or
revoke a COFR. The proposed section
revision also clarifies that the Director
may deny an Application or revoke a
COFR after obtaining additional
information, such as transfer to a new
operator, vessel renaming, guaranty
termination or cancellation, or
disapproval of the guarantor, and it adds
a duty to remedy violations where a
COFR for a vessel expires. Finally, it
adds a provision specifying that where
a COFR is revoked because 30 days have
elapsed following the date the Director
receives a guarantor’s notice of
termination, the Director may reinstate
the COFR if the guarantor promptly
notifies the Director that the guarantor
rescinded the termination and there was
no gap in coverage. This will align the
regulation to the COFR guaranty forms.
Proposed § 138.150 Reporting
Requirements
The proposed rule would merge
reporting requirements into this one
section. It would also revise the
regulatory text to emphasize prior
notices of changes that will require a
new COFR before the change occurs.
Proposed § 138.150 identifies the
information that must be reported to the
Director no later than 21 business days
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D. Proposed Removal of 33 CFR Part
135 and Subpart D of 33 CFR Part 153
This document also proposes to
remove 33 CFR part 135 and subpart D
of 33 CFR part 153 because OPA 90
repealed the legal authorities for them.
The regulations in 33 CFR part 135
apply to the management of the OCSLA
Fund, under Title III of the Outer
Continental Shelf Lands Act
Amendments of 1978 (OCSLAA).
Section 2004 in OPA 90 repealed the
authority for this part of the CFR (see 26
U.S.C. 9509 note). Like the 311(k) Fund,
the funds in the OCSLA Fund were
transferred to the OSLTF. Similarly,
OPA 90 superseded the financial
responsibility requirements of OCSLAA.
However, OPA 90 (33 U.S.C. 2751(b)
and 33 U.S.C. 2716(h)) preserved the
force and effect of the regulations in 33
CFR part 135 regarding OCSLAA
financial responsibility implementation,
until OPA 90 financial responsibility
regulations superseded these provisions
(see 33 U.S.C. 2716(h), 59 FR 34210,
July 1, 1994 (interim rule) and 61 FR
9264, March 7, 1996 (final rule)). Since
1992, other regulations have
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28807
superseded, or appeared to overlap
with, the pollution incident notification
provisions of 33 CFR part 135. On
November 1, 2011, the Coast Guard
published a notice of inquiry (76 FR
67385) soliciting public comment on
removing 33 CFR part 135. We received
no comments opposed to its removal.
The regulations in subpart D of 33
CFR part 153 apply to the management
of the 311(k) Fund. That section of the
FWPCA was repealed by OPA 90
section 2002(b)(2) (see 33 U.S.C. 1321
note), and the funds in the 311(k) Fund
were transferred to the Oil Spill
Liability Trust Fund (OSLTF).
Removing part 135 and subpart D of
part 153 to eliminate unauthorized
regulatory requirements is necessary to
eliminate potential confusion to the
public.
V. Regulatory Analyses
We 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 12866 (Regulatory
Planning and Review) and 13563
(Improving Regulation and Regulatory
Review) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying costs and benefits, reducing
costs, harmonizing rules, and promoting
flexibility. Executive Order 13771
(Reducing Regulation and Controlling
Regulatory Costs) directs agencies to
reduce regulation and control 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 proposed
rule a significant regulatory action
under section 3(f) of Executive Order
12866. Accordingly, OMB has not
reviewed it. Because this proposed rule
is not a significant regulatory action, it
is exempt from the requirements of
Executive Order 13771. See the OMB
Memorandum titled ‘‘Guidance
Implementing Executive Order 13771,
titled ‘Reducing Regulation and
Controlling Regulatory Costs’ ’’ (April 5,
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2017). A draft Regulatory Assessment is
available in the docket, and a summary
follows. As explained in this section,
this proposed rule would impose some
quantified costs, and create qualitative
benefits, which the Coast Guard believes
will justify the costs.
1. Analysis of Alternatives
Alternative 1: No action.
The ‘‘No Action’’ alternative makes no
regulatory changes to the evidence of
financial responsibility regulations in 33
CFR part 138, subpart A. The ‘‘No
Action’’ alternative is not viable because
the statute requires evidence of financial
responsibility regulations for tank
vessels greater than 100 gross tons but
less than or equal to 300 gross tons. At
a minimum, a regulation implementing
this requirement is required. This
alternative reflects the status quo and
therefore would have no regulatory cost
or benefit.
Alternative 2: Promulgate evidence of
financial responsibility regulations for
tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons
(statutory requirement).
Alternative 2 reflects the absolute
minimum rulemaking effort to address
the statutory requirement in Section 712
of the Coast Guard Authorization Act of
2010. However, the fact that there are
other aspects of the Coast Guard’s
evidence of financial responsibility
program that the Coast Guard would
like to address, in addition to revising
33 CFR part 138, subpart A and
removing regulations that are no longer
authorized involving funds that were
subsumed by the establishment of the
OSLTF, makes this alternative unviable.
This alternative would have the least
net benefits of all of the proposed
alternatives. This alternative reflects the
most costly aspect of the rulemaking
and is included in all of the proposed
alternatives because it is a statutory
provision.
Alternative 3: Promulgate evidence of
financial responsibility regulations for
tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons
(statutory requirement) and for
deepwater ports (discretionary
requirement).
Alternative 3 adds promulgating
evidence of financial responsibility
regulations for deepwater ports to
Alternative 2. The Coast Guard
considered proposing financial
responsibility regulations for deepwater
ports as part of this rulemaking. The
deepwater port industry is experiencing
increased activity in the liquefied
natural gas deepwater port industry
sector, raising questions about how
existing laws and policies regarding
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these facilities would apply. These
issues do not impact vessel evidence of
financial responsibility, however, and
could create complexity and potentially
delay the mandated regulation of tank
vessels greater than 100 gross tons but
less than or equal to 300 gross tons. In
addition, currently only one liquefied
natural gas deepwater port is in
operation and it uses less than 100
gallons of oil, whereas other designs
might pose a greater risk of oil spills.
Additional time is necessary to analyze
the effects of liquefied natural gas
regulation on the economy, maritime
safety, and the environment. The only
other deepwater port in operation, an oil
deepwater port called the Louisiana
Offshore Oil Port, is self-insured, and
provides evidence of financial
responsibility sufficient to meet its
maximum liability under OPA 90 under
grandfathered requirements of the
Deepwater Port Act of 1974.
After evaluating this alternative, the
Coast Guard has decided not to develop
deepwater port financial responsibility
regulations at this time. Postponing
evidence of financial responsibility
regulations for deepwater ports will not
impact maritime safety or the
environment. Currently, there is no
established market that provides and
maintains evidence of financial
responsibility for deepwater ports. If the
market decides to pursue these ventures
in the future, the costs and benefits
would be analyzed accordingly as part
of a future rulemaking.
Alternative 4 (Preferred alternative)
Promulgate evidence of financial
responsibility regulations for tank
vessels greater than 100 gross tons but
less than or equal to 300 gross tons
(statutory requirement); require COFR
Operators and guarantors to submit
additional information to the Coast
Guard; make conforming amendments
reflect current practices (discretionary
requirement); and remove subpart D of
33 CFR part 153 D and 33 CFR part 135
from the Code of Federal Regulations
(discretionary requirement).
Alternative 4 addresses the statutory
requirement to require tank vessels
greater than 100 gross tons but less than
or equal to 300 gross tons to establish
and maintain financial responsibility. It
also provides necessary updates to the
current financial responsibility
regulations to reflect current practices
that have evolved over the past two
decades, taking into account
technological improvements as well as
changes in policy. Lastly, this
alternative removes 33 CFR part 135 and
subpart D of 33 CFR part 153, both of
which regulate two defunct funds, the
OCSLA Fund and the 311(k) Fund.
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In addition to the regulatory costs and
benefits associated with Alternative 2,
this alternative would add two aspects
with no cost: Conforming regulations to
current practice and removing two
defunct portions of the CFR, which
would provide intangible benefits of
eliminating confusion for the public, as
well as ensuring that the regulations
reflect how the Coast Guard’s financial
responsibility program currently
operates. Additionally, a small amount
of regulatory cost would be associated
with the proposed requirement to
require COFR Operators and guarantors
to provide additional information to the
Coast Guard. Although the benefits of
this alternative are qualitative, the Coast
Guard expects them to justify these
costs.
2. Proposed Regulatory Changes
We propose amending the vessel
evidence of financial responsibility
regulations at 33 CFR part 138, subpart
A, to:
1. Require financial responsibility to
now include all tank vessels greater
than 100 gross tons but less than or
equal to 300 gross tons.
2. Require additional information
from the COFR Operator and guarantor.
The proposed revisions include:
• Reporting of gross tonnage
measurement system used and
submission of a copy of the tonnage
certifying document, upon request;
• Electronic submissions;
• Reporting of reason for termination
of guaranty by a guarantor, if known;
and
• Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
3. Conform regulations to current
practice. The proposed revisions
include:
• How to apply vessel gross tonnages;
• Removal of requirement to pay fees
before issuance of a COFR;
• Moving surety bond method to
‘‘other methods’’ for establishing and
maintaining evidence of financial
responsibility;
• Clarification on continuation of
guarantor’s liability and requirement to
provide coverage for 30 days after
cancellation of guaranty; and
• Process for establishing and
maintaining acceptability of COFR
insurance guarantors.
In addition, for the reasons discussed
above, we propose removing 33 CFR
part 135 and subpart D of 33 CFR part
153 which concern management of two
defunct pollution funds.
Table 2 shows whether a category of
regulatory amendments have a
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regulatory cost, regulatory benefit, or
both. Those amendments that have a
28809
regulatory cost or benefit are discussed
in detail following the table.
TABLE 2—SUMMARY OF REGULATORY AMENDMENT IMPACTS
Regulatory
cost
Regulatory
benefit
Yes
Yes
Yes
Yes
Yes
No 4
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
Yes
No
No
Yes
Yes
No 5
No 6
Yes
Yes
Require financial responsibility for tank vessels greater than 100 gross tons but less than or equal to 300
gross tons to establish and maintain evidence of financial responsibility (Statutory)
Application and certification costs ....................................................................................................................
COFR premium costs .......................................................................................................................................
Require Additional Information from the COFR Operator and guarantor (Discretionary)
Reporting of gross tonnage measurement systems used and submission of a copy of the tonnage certifying document, upon request. .....................................................................................................................
Electronic submissions .....................................................................................................................................
Reporting of reason for termination of guaranty by a guarantor .....................................................................
Reporting vessel name change and increased reporting on location of vessel when there is a change in
ownership on date of change .......................................................................................................................
Conform regulations to current Practice (Discretionary)
How to apply vessel gross tonnages ...............................................................................................................
Removal of requirement to pay fees ................................................................................................................
before issuance of a COFR .............................................................................................................................
Moving Surety Bond method to ‘‘other methods’’ for establishing and maintaining evidence of financial responsibility .....................................................................................................................................................
Clarification on continuation of guarantor’s liability and requirement to provide coverage for 30 days after
cancellation of guaranty ................................................................................................................................
Process for establishing and maintaining acceptability of COFR insurance guarantors .................................
Removal of 33 CFR part 135 and subpart D of 33 CFR part 153 (Discretionary)
Removal of 33 CFR part 135 ...........................................................................................................................
Removal of subpart D of 33 CFR part 153 ......................................................................................................
3. Regulatory Costs
There are two regulatory costs
identified for this proposed rule:
• Regulatory Cost 1: Require the
additional tank vessels greater than 100
gross tons but less than or equal to 300
gross tons to establish and maintain
evidence of financial responsibility
(statutory requirement).
• Regulatory Cost 2: Require
additional information from the COFR
Operator and guarantor (discretionary
requirement).
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Discussion of Regulatory Cost 1
The proposed rule would now require
tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons
to establish and maintain evidence of
financial responsibility.7 These vessels
would be required to have COFRs,
which would result in two types of
costs:
• Application and certification costs;
and
• COFR premium costs.
Application and Certification Costs:
In the first year of the analysis period,
the COFR Operator would be required to
submissions creates cost savings.
of superseded regulatory requirements
have no cost. The OCSLAA Fund was subsumed by
the Oil Spill Liability Trust Fund.
6 Removal of superseded regulatory requirements
have no cost. The 311(k) Fund was subsumed by
the Oil Spill Liability Trust Fund.
7 Regulatory Cost 1 does not include vessels
greater than 300 gross tons that are already required
to have a COFR.
pay an Application fee of $200 and a
Certification fee of $100 for each vessel
requiring a COFR. A new Certification
fee would be required every 3 years to
renew the COFR.
COFR Premium Costs: The additional
operators of tank vessels greater than
100 gross tons but less than or equal to
300 gross tons would have to establish
and maintain evidence of financial
responsibility using one of these several
methods: Insurance, Self-insurance, or
Financial Guaranty.8
Affected Population: According to the
Coast Guard’s Marine Information for
Safety and Law Enforcement (MISLE)
database, there are an average of 481
tank vessels using U.S. navigable waters
or U.S. Exclusive Economic Zone from
2014–2018 that are greater than 100
gross tons but less than or equal to 300
gross tons. Table 3 shows the number of
tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons
per year (2014–2018).
4 Electronic
5 Removal
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8 Historically, the surety bond method has been
used in a very few instances. This proposed rule
would move this method to the ‘‘other methods’’
category of financial responsibility under
§ 138.110(f).
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TABLE 3—NUMBER OF TANK VESSELS
GREATER THAN 100 GROSS TONS
BUT LESS THAN OR EQUAL TO 300
GROSS TONS
Year
2014 ......................................
2015 ......................................
2016 ......................................
2017 ......................................
2018 ......................................
Average (2014–2018) ...........
Number of
vessels
488
492
477
474
474
481
Cost Summary Regulatory Cost 1
Application and Certification Costs:
We assumed the number of future COFR
Applications and Certifications, based
on the historical average number of
vessels in the population from 2014 to
2018 (481 vessels) would be constant for
the 10-year analysis period.9 We also
assumed that all vessels would renew
their COFRs every 3 years through the
full 10-year analysis period. In the first
year of the analysis period, COFR
Operators would pay an Application fee
($200) and a Certification fee ($100)
when applying for a COFR for their
vessels. Every 3 years thereafter, COFR
Operators would pay a Certification fee
($100) when renewing their COFRs. In
the first year of the analysis period, the
9 This estimate, based on COFR trends for
currently COFRed vessels, was validated by subject
matter expert in Coast Guard’s Vessel Certification
Division.
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annual cost would be calculated by
multiplying the number of vessels
applying for COFRs (481 vessels) by the
cost of the Application ($200) and
adding the number of vessels requesting
certification (481) multiplied by the cost
of certification ($100) to equal $144,300.
Every third year thereafter, the cost
would be calculated by multiplying the
number of vessels (481) requesting
certification for renewal of their COFRs
by the cost of the certification ($100) to
equal $48,100.
COFR Premium Costs: It is possible
for vessel operators to choose to use the
Self-insurance or Financial Guaranty
methods of establishing their evidence
of financial responsibility, which allows
them to use their U.S. business assets.
Alternatively, in the case of the
Financial Guaranty method, vessels may
use the U.S. business assets of a parent,
affiliate, or special purpose company as
evidence that they are capable of paying
for removal costs and damages up to the
applicable limit of liability. In those
cases, they have made a business
decision that the cost of the assuming
liability risk under OPA 90 is less than
the premium charged by commercial
insurance companies. This assessment
of OPA 90 risk is company-specific and
not quantifiable. Therefore, for the
purposes of this analysis, we have
assumed that the responsible parties
would use the Insurance method of
establishing and maintaining their
evidence of financial responsibility. We
received estimates of COFR insurance
premium amounts for tank vessels
greater than 100 gross tons but less than
or equal to 300 gross tons from 4 COFR
insurance companies representing over
90 percent of existing COFRs.10 Based
on this survey of guarantors, we
estimated that the premiums per vessel
would range between $300 and $1,000
per year.
Vessel Premium Low Range Cost
Estimate: The Coast Guard calculated
the vessel premium low range cost
estimate by using the following formula:
Number of vessels × cost of premium
per vessel per year:
481 vessels × $300 per vessel per year
= $144,300 per year
Vessel Premium High Range Cost
Estimate: The Coast Guard calculated
the vessel premium high range cost
estimate by using the following formula:
Number of vessels × the cost of
premium per vessel per year:
481 vessels × the $1,000 per vessel per
year = $481,000 per year
10 Source:
NPFC’s COFR database.
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Discussion of Regulatory Cost 2
This proposed rule would require
additional information from the COFR
Operator and guarantor that would
result in three types of costs:
• Reporting of gross tonnage
measurement systems used and
submission of copy of tonnage certifying
document, upon request;
• Reporting of reason for termination
of guaranty by a guarantor, if known;
and
• Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
Reporting of Gross Tonnage
Measurement Systems Used and
Submission of a Copy of Tonnage
Certifying Document, upon request—
Affected Population: All COFR
Operators, including those for the tank
vessels greater than 100 gross tons but
less than or equal to 300 gross tons
proposed in this rule, would report the
gross tonnage measurement systems
used when applying for and/or
renewing a COFR. The Coast Guard’s
COFR database indicates that there are
25,875 currently COFRed vessels.
Adding the 481 COFRed tank vessels
greater than 100 gross tons but less than
or equal to 300 gross tons proposed in
Regulation Cost 1, and assuming the
number of COFRed vessels remains
constant during the analysis period, the
total number of COFRed vessels equals
26,356.
Master Certificate and Fleet Certificate
holders would also be required to
provide the gross tonnage measurement
systems used for the largest vessel
covered by the Application. According
to the COFR database, there are
currently 8 Master Certificates and 12
Fleet Certificates.
COFR Operators would also provide a
copy of the tonnage certifying
document, upon request. We assume
that the Coast Guard would request a
copy of the tonnage certifying document
when there is an incident. According to
incident data from the Coast Guard’s
CIMS database, there was an average of
12 incidents per year involving vessels
with COFRs and vessels that would be
required to have COFRs under this
proposed rule over the five year period
2012–2017. We assume that for the
analysis period, the number of incidents
will remain constant with this average.
& of Reason for Termination of
Guaranty by a Guarantor—Affected
Population:
Based on NPFC Vessel Certification
Program data on the historical number
of annual notices of guaranty
termination by guarantors, the Coast
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Guard estimates that there will be 4,000
per year for the 10-year analysis period.
Reporting Vessel Name Change and
Increased Reporting on Location of
Vessel When There is a Change in
Ownership on Date of change—Affected
Population: Based on NPFC Vessel
Certification Program historical data, the
Coast Guard estimates that there will be
1,000 submissions per year.
Cost Summary Regulatory Cost 2
Reporting of Gross Tonnage
Measurement Systems Used and
Submission of Copy of Tonnage
Certifying Document, upon request:
Reporting the gross tonnage
measurement systems used with the
application and/or requests for COFR
renewal would result in a negligible cost
impact (less than one minute of time) to
the COFR Operator and would be
completed with the Application for the
COFR. We do not quantify this cost
because it is negligible.
Based on estimates received from
COFR insurance guarantors who would
submit, upon request, a copy of the
tonnage certifying document on behalf
of the COFR Operator, COFR Operators
would require 15 minutes (0.25 hours)
per submission.
Number of submissions per year ×
number of hours × the labor cost per
hour:
12 × 0.25 hours per submission = 3
hours
3 hours per year × $35.64 per hour 11 =
$107 per year
Reporting of reason for termination of
guaranty by a guarantor: We estimated
that it would take 5 minutes (0.08
hours) for the guarantor to add the
reason why the guaranty was terminated
to the information they already provide
to the Coast Guard when they terminate
a guaranty.
Number of terminations per year ×
number of hours per submission × labor
cost per hour:
4,000 submissions per year × 0.08 hours
per submission × $35.64 per hour =
$11,405 per year
Reporting Vessel Name Change and
Increased Reporting on Location of
Vessel When There is a Change in
Ownership on Date of Change: We
assumed that it will take an additional
11 Total employer compensation costs for private
industry workers averaged, $35.64 per hour worked,
found at https://www.bls.gov/news.release/
archives/ecec_12152017.pdf. Bureau of Labor
Statistics Economic News Release Employer Costs
for Employee Compensation news release text.
Friday, December 15, 2017. This wage rate was
selected because it is the most general and reflects
that the person submitting the information could be
any worker whether an administrative assistant or
a Chief Executive Officer of a company.
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5 minutes (0.08 hours) per submission
to provide additional information that is
not already required under the current
rule.
Number of submissions per year ×
number of hours per submission × the
labor cost per hour:
1,000 submissions per year × the 0.08
hours/submission × the $35.64 per
hour 12 = $2,851 per year
Present Value Regulatory Costs (Low
Range): We estimated that the 10-year
present value of the proposed rule, at a
3-percent discount rate, to be $1.6
million. We estimated that the 10-year
present value of the proposed rule, at a
7-percent discount rate, to be $1.3
million. The estimated annualized
discounted cost of the proposed rule, at
a 3-percent discount rate, is $188,877.
The estimated annualized discounted
cost of the proposed rule, at a 7-percent
discount rate, is $190,835.
Present Value Regulatory Costs (High
Range): We estimated the 10-year
present value of the proposed rule, at a
3-percent discount rate, to be $4.4
million. We estimated the 10-year
present value of the proposed rule, at a
7-percent discount rate, to be $3.7
million. The estimated annualized
discounted cost of the proposed rule, at
a 3-percent discount rate, is $525,577.
The estimated annualized discounted
cost of the proposed rule, at a 7-percent
discount rate, is $527,535.
4. Regulatory Benefits
There are four qualitative benefits
identified for this proposed rule:
• Regulatory Benefit 1: Require Tank
Vessels Greater than 100 Gross Tons to
300 Gross Tons to Establish and
Maintain Evidence of Financial
Responsibility (statutory requirement).
• Regulatory Benefit 2: Require
additional information from the COFR
Operator and guarantor (discretionary
requirement).
• Regulatory Benefit 3: Conform
Regulations to Current Practice
(discretionary requirement).
• Regulatory Benefit 4: Removal of 33
CFR part 135 and subpart D of 33 CFR
part 153 (discretionary requirement).
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Discussion of Regulatory Benefit 1
Oil pollution removal costs and
damages for incidents have substantially
increased since 1990, even for relatively
small-sized discharges. When there is
no evidence of financial responsibility,
it becomes more likely that the OSLTF
will have to pay for at least some of the
costs resulting from the incident.13
12 See
footnote 8.
I. Kiern, ‘‘Liability, Compensation,
and Financial Responsibility Under the Oil
13 Lawrence
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When vessels have COFRs, the incident
cost amount paid by the responsible
party is higher than for vessels that do
not have COFRs. This proposed rule
would add tank vessels greater than 100
gross tons but less than or equal to 300
gross tons to the vessels that are already
required to establish and maintain
evidence of financial responsibility.
Of the 10,000 incidents sampled from
the Coast Guard’s Contract Information
Management System (CIMS) database
during the ‘‘1990 to 2017’’ period, 4.91
percent were COFRed vessels and 29.15
percent were non-COFRed vessels.14
Coast Guard CIMS data show that the
Coast Guard recovers 98.98 percent of
costs when a vessel was COFRed, and
only 27.71 percent of costs when it was
not COFRed.
The proposed requirement would
ensure that the costs are internalized
because parties responsible for oil spills
would be more fully responsible for
(moving from less than 1⁄3 to nearly 100
percent) paying for the oil pollution
removal costs and damages and help
correct this market failure.15 Increased
recovered cost rates shift the risk and
actual costs from the OSLTF to the
polluting responsible party.
Discussion of Regulatory Benefit 2
Reporting of Gross Tonnage
Measurement Systems Used and
Submission of copy of Tonnage
Certifying Document, upon request:
COFR Operators would submit a copy of
the tonnage certifying document upon
request.
Providing this additional information
with respect to gross tonnage will allow
the Coast Guard to determine more
effectively the limit of liability and
applicable amounts of financial
responsibility for the incident. In some
cases, vessels have tonnage determined
under more than one measurement
system, depending on a variety of
factors, including the vessel’s flag,
length, voyage type, keel laid, or
substantial alteration date, and whether
it is self-propelled. This has caused
confusion with respect to which
measurement system to use to
determine the limit of liability and
amount of financial responsibility.
Regardless of the tonnage reported on
the Application, the tonnage certifying
document governs the required
Pollution Act of 1990: A review of the Second
Decade.’’ 36 Tulane Maritime Law Journal. 23–24
(2011).
14 The remaining 65.94 percent of incidents were
either facility incidents or incidents where the
Coast Guard could not identify the source.
15 See OMB Circular A–4, page 4 dated September
17, 2003 for a short discussion on market failures
and externalities such as environmental problems.
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28811
evidence of financial responsibility and
the limit of liability at the time of the
incident (except when the responsible
parties or guarantors knew or should
have known that the tonnage certificate
information was incorrect). Using the
tonnage certifying document provides
the following benefits: (1) It ensures that
the Coast Guard has the most accurate
tonnage measurements; (2) it provides
the method used to determine tonnage,
as well as the tonnage amount; (3) it
provides information for foreign flagged
vessels that is oftentimes difficult to
obtain; and (4) without the applicable
tonnage certifying document, if an
incident occurred, a re-measurement of
tonnage could alter the already
determined financial responsibility and
limit of liability.
Electronic submissions: The proposed
rule would allow COFR Operators,
guarantors, and agents for service of
process to submit signed scanned
images, emails, or faxes instead of hard
copy signed-in-ink originals. The Coast
Guard receives approximately ten of the
CG–5586 forms by mail annually.
Allowing electronic submissions creates
minimal cost savings; however, it allows
the flexibility to COFR Operators, and
enhances Coast Guard’s recordkeeping
goals. This would work towards the
OMB’s goal to maximize the use of
electronic technology for collection of
information from the public.
Reporting of reason for termination of
guaranty by guarantor: The proposed
rule would require the guarantor to
include the reason for termination, if
known, with the notification for
termination of the guaranty. This
information would provide the Coast
Guard with new information about the
COFR Operator in the event there is an
incident.
Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change: The proposed rule
would ensure that the Coast Guard has
the most current information when
initially issuing a COFR—especially
concerning vessels that, over time,
become derelict while in U.S. navigable
waters or U.S. Exclusive Economic
Zone. The proposed revisions will also
improve the Coast Guard’s ability to
establish compliance with COFR
regulations by more effectively ensuring
the responsible party is able to pay its
liability and mitigate risks to the
OSLTF. For example, if a vessel is sold
while using a place subject to U.S.
jurisdiction, the new responsible parties
become immediately subject to the
COFR program. These proposed changes
are to ensure that, while the Coast
Guard still has regulatory authority over
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a responsible party and the financial
assurances of the guarantor, the Coast
Guard receives information relevant to
continued compliance before problems
arise. However, enforcing compliance
with the COFR program’s requirements
depends on the Coast Guard knowing
about the vessel transfer. The proposed
regulatory revisions seek to ensure that
the Coast Guard receives this
information and to mitigate the risk of
uninsured responsible parties and
derelict vessels.
Discussion of Regulatory Benefit 3
How to apply vessel gross tonnages:
This proposed rule would update and
simplify the provisions respecting how
to apply gross tonnage measurement
methods to reflect changes in the law
since OPA 90 was first enacted. This
proposed rule is consistent with the
Coast Guard’s tonnage regulation at 46
CFR part 69 ‘‘Measurement of Vessels’’
(81 FR 18701, March 31, 2016).
Removal of requirement to pay fees
before issuance of a COFR: The
proposed rule would allow the COFR
Operator to pay the COFR Application
and Certification fees up to 21 days after
submitting their COFR Application.
This would add flexibility and
convenience for COFR Operators,
especially if they are underway and
want to enter U.S. navigable waters or
U.S. Exclusive Economic Zone.
Moving surety bond method to ‘‘other
methods’’ for establishing and
maintaining evidence of financial
responsibility: The proposed rule would
no longer specifically discuss the surety
bond method in the regulations because
it is rarely, if ever, used. However, the
surety bond method would continue to
be available under the ‘‘other methods’’
provision in the proposed rule.
Clarification on continuation of
guarantor’s liability and requirement to
provide coverage for 30 days after
cancellation of guaranty: The proposed
rule would explain that the guarantor
continues to be liable and must provide
coverage for 30 days following NPFC
receipt of a notice of cancellation. This
requirement is currently contained on
the COFR form and reflects a current
and important NPFC business practice.
Process for establishing and
maintaining acceptability of COFR
insurance guarantors: The proposed
rule would move the current process for
establishing and maintaining
acceptability of COFR insurance
guarantors into the regulations to make
it more transparent to the public. The
Coast Guard’s longstanding business
practice under the current COFR
regulations for determining the
acceptability of guarantors is the basis of
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the procedures set forth in the proposed
rule. The proposed rule would also
provide a process through which a
COFR operator may provide new
evidence of financial responsibility and
obtain approval or continuation of the
COFR where the Coast Guard
disapproves a guarantor (for example,
due to guarantor fraud or financial
failure). The provision applies to
pending Applications and following the
issuance of a COFR.
Discussion of Regulatory Benefit 4
These regulations concern
management of two pollution funds—
the Offshore Oil Pollution
Compensation Fund and the FWPCA
Section 311(k) Fund. These provisions
are no longer authorized. On November
1, 2011, the Coast Guard published a
notice of inquiry (76 FR 67385)
soliciting public comment on removing
33 CFR part 135 and we received no
adverse comments. This aspect of the
rulemaking is necessary to remove
unauthorized regulatory requirements
and to eliminate potential confusion to
the public.
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.
An Initial Regulatory Flexibility
Analysis discussing the impact of this
proposed rule on small entities is
available in the docket, and a summary
follows.
There are two potential direct costs to
small entities that would result from
this proposed rule:
• Regulatory Cost 1: Require Tank
Vessels Greater than 100 Gross Tons to
300 Gross Tons to Establish and
Maintain Evidence of Financial
Responsibility (Statutory
Requirement) 16
• Regulatory Cost 2: Require
Additional Information from COFR
Operators and Guarantors (Discretionary
Requirement)
Regulatory Cost 1—Require Tank
Vessels Greater than 100 Gross Tons to
300 Gross Tons Establish and Maintain
16 Regulatory Cost 1 does not include vessels
greater than 300 gross tons that are already required
to have a COFR.
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Evidence of Financial Responsibility
(Statutory Requirement).
Affected Population: We queried
NPFC’s COFR database to determine
that there are 149 U.S. entities that
operate tank vessels greater than 100
gross tons but less than or equal to 300
gross tons. We researched the number of
employees and revenue for these
entities using public and proprietary
databases. We then determined which
entities were small based on the
Regulatory Flexibility Act’s criteria for
small non-profits and small
governmental jurisdictions and the U.S.
Small Business Administration’s (SBA)
‘‘Table of Small Business Standards
Matched to North American Industry
Classification System (NAICS) Codes’’
publication for businesses.17
Of these 149 entities, we found
employee and revenue data on 59
entities. Of these 59 entities, 27 were
small and 32 were not small based on
the Regulatory Flexibility Act and SBA’s
criteria. For the purposes of this
analysis, we assumed that the remaining
90 entities were small entities. Adding
the known small entities to the
unknown entities brings the total
number of entities considered to be
small entities for the purpose of this
analysis to be 117. Of the small entities,
115 are businesses, 2 are governmental
jurisdictions, and 0 are small nonprofits.
Regulatory Cost 2—Require
Additional Information from COFR
Operators and Guarantors
(Discretionary Requirement).
Affected Population: We queried
NPFC’s COFR database to determine
that there are 761 U.S. entities that
operate vessels with COFRs, including
those operating vessels proposed in
Regulatory Cost 1. We researched the
number of employees and revenue for
these entities using public and
proprietary databases. We then
determined which entities were small
based on the Regulatory Flexibility Act’s
criteria for small non-profits and small
governmental jurisdictions and the U.S.
Small Business Administration’s (SBA)
‘‘Table of Small Business Standards
Matched to North American Industry
Classification System (NAICS) Codes’’
publication for businesses.18
Of these 761 entities, we found
employee and revenue data on 354
entities. Of these 354 entities, 245 were
small and 109 were not small based on
the Regulatory Flexibility Act and SBA’s
17 The criteria for determining whether an entity
is small vary by NAICS code and generally involve
the number of employees or annual sales.
18 The criteria for determining whether an entity
is small vary by NAICS code and generally involve
the number of employees or annual sales.
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criteria. For the purposes of this
analysis, we assumed that the remaining
407 entities were small entities. Adding
the known small entities to the
unknown entities brings the total
number of entities considered to be
small entities for the purpose of this
analysis to be 652. Of the small entities,
641 are businesses, 4 are governmental
jurisdictions, and 7 are small nonprofits.
Regulatory Cost 1 Summary
The following calculation shows the
average annual cost of establishing
financial responsibility per vessel for
tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons:
Number of Vessels × Annual Cost of
Application/Certification + Number
of Vessels × Annual COFR
Insurance Premium
In the first year of the analysis period,
COFR Operators would pay an
Application fee ($200) and a
Certification fee ($100) when applying
for a COFR for their vessels. Every 3
years thereafter, COFR Operators would
pay a Certification fee ($100) when
renewing their COFRs. For each tank
vessel greater than 100 gross tons but
less than or equal 300 gross tons, the
total 10 year cost is $600. The average
annual cost for these vessels is $60. We
calculated the average premium ($650
per year) by averaging the high-range
COFR insurance premium ($1,000 per
year) and low-range COFR insurance
premium estimates ($300 per year)
provided by COFR insurance
guarantors.
For example, for a small entity with
three vessels, the calculation would be
as follows:
Number of Vessels × Annual Cost of
Application/Certification + Number
of Vessels × Annual COFR
Insurance Premium
3 vessels × $60 per year + 3 vessels ×
$650 per year = $2,130 per year
Table 4 shows the annual cost of
Regulatory Cost 1 for each small entity
based on the number of vessels they
operate.19
TABLE 4—ANNUAL COST PER SMALL ENTITY
Annual cost
per small
entity
Number of
small entities
Number of vessels
1 ...............................................................................................................................................................................
2 ...............................................................................................................................................................................
3 ...............................................................................................................................................................................
4 ...............................................................................................................................................................................
5 ...............................................................................................................................................................................
6 ...............................................................................................................................................................................
7 ...............................................................................................................................................................................
8 ...............................................................................................................................................................................
9 ...............................................................................................................................................................................
10 .............................................................................................................................................................................
11 .............................................................................................................................................................................
12 .............................................................................................................................................................................
13 .............................................................................................................................................................................
14 .............................................................................................................................................................................
15 .............................................................................................................................................................................
77
17
9
3
4
1
3
0
0
0
0
1
1
0
1
$710
1,420
2,130
2,840
3,550
4,260
4,970
0
0
0
0
8,520
9,230
0
10,650
Total ..................................................................................................................................................................
117
........................
We then divided the annual cost per
small entity by the small entity’s
associated annual revenue and then
multiplied by 100 to determine the
percent impact of the proposed rule on
the small entities’ revenue. Table 5
shows the economic impact to small
entities of Regulatory Cost 1.
TABLE 5—ECONOMIC IMPACT TO SMALL ENTITIES—REGULATORY COST 1
Number of
small entities
Percent of annual revenue
jbell on DSKJLSW7X2PROD with PROPOSALS3
1 to 2 ........................................................................................................................................................................
<1 .............................................................................................................................................................................
Regulatory Cost 2 Summary
Reporting the gross tonnage
measurement systems used with the
application and/or requests for COFR
renewal would result in a negligible cost
impact (less than one minute of time) to
the COFR Operator and would be
completed with the Application for the
COFR. We do not quantify this cost
19 Source:
NPFC’s COFR database.
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because it is negligible. As shown in the
Cost Benefit Analysis section of the
Regulatory Analysis, the annual cost for
Regulatory Cost 2 is $14,363 per year
total for all COFRed vessels, including
those operating vessels proposed in
Regulatory Cost 1. The per vessel cost of
Regulatory Cost 2 to small entities is
calculated by determining the total cost
20 Rounded
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0
117
Percent of
small entities
0
100
of Regulatory Cost 2 divided by number
of COFRed vessels.
$14,363 ÷ 26,356 COFRed Vessels = $1
per vessel 20
Table 6 shows the annual cost of
Regulatory Cost 2 for each small entity
based on the number of vessels they
operate.21
21 Source:
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TABLE 6—ANNUAL COST PER SMALL ENTITY
Number of
small entities
Number of vessels
1 ...............................................................................................................................................................................
2 ...............................................................................................................................................................................
3 ...............................................................................................................................................................................
4 ...............................................................................................................................................................................
5 ...............................................................................................................................................................................
6 ...............................................................................................................................................................................
7 ...............................................................................................................................................................................
8 ...............................................................................................................................................................................
9 ...............................................................................................................................................................................
10 .............................................................................................................................................................................
11 .............................................................................................................................................................................
12 .............................................................................................................................................................................
13 .............................................................................................................................................................................
14 .............................................................................................................................................................................
15 .............................................................................................................................................................................
16 .............................................................................................................................................................................
18 .............................................................................................................................................................................
19 .............................................................................................................................................................................
20 .............................................................................................................................................................................
23 .............................................................................................................................................................................
24 .............................................................................................................................................................................
25 .............................................................................................................................................................................
26 .............................................................................................................................................................................
27 .............................................................................................................................................................................
30 .............................................................................................................................................................................
31 .............................................................................................................................................................................
32 .............................................................................................................................................................................
35 .............................................................................................................................................................................
36 .............................................................................................................................................................................
37 .............................................................................................................................................................................
41 .............................................................................................................................................................................
42 .............................................................................................................................................................................
53 .............................................................................................................................................................................
55 .............................................................................................................................................................................
56 .............................................................................................................................................................................
57 .............................................................................................................................................................................
60 .............................................................................................................................................................................
61 .............................................................................................................................................................................
77 .............................................................................................................................................................................
79 .............................................................................................................................................................................
80 .............................................................................................................................................................................
96 .............................................................................................................................................................................
98 .............................................................................................................................................................................
104 ...........................................................................................................................................................................
107 ...........................................................................................................................................................................
116 ...........................................................................................................................................................................
129 ...........................................................................................................................................................................
158 ...........................................................................................................................................................................
169 ...........................................................................................................................................................................
315 ...........................................................................................................................................................................
389 ...........................................................................................................................................................................
462 ...........................................................................................................................................................................
496 ...........................................................................................................................................................................
362
77
41
26
22
19
18
5
9
12
3
3
4
3
4
1
3
1
1
1
1
1
1
1
2
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
2
1
1
1
1
1
1
1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
18
19
20
23
24
25
26
27
30
31
32
35
36
37
41
42
53
55
56
57
60
61
77
79
80
96
98
104
107
116
129
158
169
315
389
462
496
Total ..................................................................................................................................................................
652
........................
We then divided the annual cost per
small entity by the small entity’s
associated annual revenue and then
jbell on DSKJLSW7X2PROD with PROPOSALS3
Annual cost
per small
entity
multiplied by 100 to determine the
percent impact of the proposed rule on
the small entities’ revenue.22 Table 7
shows the economic impact to small
entities of Regulatory Cost 2.
22 Revenue information researched at https://
www.manta.com/.
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TABLE 7—ECONOMIC IMPACT TO SMALL ENTITIES—REGULATORY COST 2
Number of
small entities
Percent of annual revenue
1 to 2 ........................................................................................................................................................................
< 1 ............................................................................................................................................................................
C. Assistance for Small Entities
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104–
121, we want to assist small entities in
understanding this proposed rule so that
they can better evaluate its effects on
them and participate in the rulemaking.
If 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 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).
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D. Collection of Information
This proposed rule would revise a
previously approved collection of
information (OMB Control Number
1625–0046) 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. The estimate covers the
time for reviewing instructions,
searching existing sources of data,
gathering and maintaining the data
needed, and completing and reviewing
the collection. We also discuss the
following incremental paperwork
burden associated with this proposed
rule earlier in the ‘‘Cost Benefit
Analysis’’ under ‘‘Regulatory Cost 2’’
and ‘‘Regulatory Benefit 2.’’
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Title: Financial Responsibility for
Water Pollution.
OMB Control Number: 1625–0046.
Summary of the Collection of
Information: This proposed rule would
add additional collection of information
requirements to existing OMB Control
Number 1625–0046 for: COFR Operators
to report gross tonnage and gross
tonnage measurement systems used, and
submit a copy of their tonnage certifying
document, upon request; guarantors to
report the reason for termination of a
guaranty; and COFR Operators to report
vessel name changes and increase
reporting on location of vessel when
there is a change in ownership on date
of change.
Need for Information:
Reporting of gross tonnage
measurement systems used and
submission of copy of the tonnage
certifying document, upon request.
Providing tonnage measurement
systems used and submitting the
tonnage certifying document, upon
request, in the proposed rule, with
respect to gross tonnage will allow the
Coast Guard to determine more
effectively the limit of liability and
applicable amounts of financial
responsibility for the incident. In some
cases, the vessel may be assigned
tonnage under more than one
measurement system depending on a
variety of factors including the vessel’s
flag, length, voyage type, keel laid, or
substantial alteration date, and whether
it is a self-propelled vessel. This has
caused confusion with respect to which
method to use to determine limit of
liability and amount of financial
responsibility.
Regardless of the tonnage reported on
the Application, the tonnage certifying
document governs the required
evidence of financial responsibility and
the limit of liability at the time of the
incident (except when the responsible
parties or guarantors knew or should
have known that the tonnage certifying
document or certificate of registry was
incorrect). Using the tonnage certifying
document provides the following
benefits: It ensures that the Coast Guard
has the most accurate tonnage
measurements; it provides the method
used to determine tonnage, as well as
the tonnage amount; it provides
information for foreign flagged vessels
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0
652
Percent of
small entities
0
100
that is oftentimes difficult to obtain; and
without the applicable tonnage
certifying document, if an incident
occurred, a re-measurement of tonnage
could alter the already determined
financial responsibility and limit of
liability.
Reporting of reason for termination of
guaranty by a guarantor.
The proposed rule would require that
the guarantor include the reason for
termination, if known, with the
notification for termination of the
guaranty. This information would
provide the Coast Guard with
information about the COFR Operator
that otherwise would not be known in
the event there is an incident.
Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
The additional collection of
information in the proposed rule would
ensure the information the Coast Guard
relies on when initially issuing a COFR
is up to date and remains current—
especially concerning vessels that, over
time, become derelict while in U.S.
navigable waters or U.S. Exclusive
Economic Zone. The proposed revisions
would also improve the Coast Guard’s
ability to establish compliance with
COFR regulations by more effectively
ensuring that the responsible party is
able to pay its liability and mitigate
risks to the OSLTF. For example, if a
vessel is sold while using a place
subject to U.S. jurisdiction, the new
responsible parties become immediately
subject to the COFR program. These
proposed changes would ensure that,
while the Coast Guard still has
regulatory authority over a responsible
party and the financial assurances of the
guarantor, the Coast Guard receives
information material to continued
compliance before problems arise.
Enforcing compliance with the COFR
program’s requirements, however,
depends on the Coast Guard knowing
about the vessel transfer. The proposed
regulatory revisions seek to ensure that
the Coast Guard receives this
information and to mitigate the risk of
uninsured responsible parties and
derelict vessels.
Proposed Use of Information:
Reporting of gross tonnage
measurement systems used and
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submission of copy of the tonnage
certifying document, upon request.
The Coast Guard would use the
additional collection of information in
the proposed rule to ensure that the
gross tonnage of a vessel involved in an
incident is accurate to determine its
limit of liability and applicable amount
of financial responsibility.
Reporting of reason for termination of
guaranty by a guarantor.
The Coast Guard would use the
additional collection of information in
the proposed rule to learn more about a
vessel and its COFR Operators in the
event of an incident. Adding a new
requirement to provide the reason for
guaranty termination will reduce the
possibility that a guarantor would
cancel the guaranty to simply shield
themselves from potential liability in
the event of an incident.
Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
The Coast Guard would use the
additional collection of information in
the proposed rule to identify a
responsible party in the event there is
an incident.
Description of the Respondents: The
respondents are COFR Operators of
vessels and OPA 90 COFR insurance
guarantors.
Number of Respondents: The
additional collection of information in
this proposed rule would affect 761
COFR Operators and 14 OPA 90 COFR
insurance guarantors.
Frequency of Response:
Reporting of gross tonnage
measurement systems used and
submission of copy of the tonnage
certifying document.
All COFR Operators, including those
for the tank vessels greater than 100
gross tons but less than or equal to 300
gross tons proposed in this rule, would
report the gross tonnage measurement
systems used when applying for a
COFR. The Coast Guard’s COFR
database indicates that there are 25,875
currently COFRed vessels. Adding the
481 COFRed tank vessels greater than
100 gross tons but less than or equal to
300 gross tons proposed in Regulation
Cost 1, and assuming the number of
COFRed vessels remains constant
during the analysis period the total
number of COFRed vessels equals
26,356.
Master Certificate and Fleet Certificate
holders would also be required to
provide the gross tonnage measurement
systems used for the largest vessel
covered by the Application.
The Coast Guard estimated that COFR
Operators would provide information
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on 1⁄3 of the vessels with COFRs each
year due to the 3-year cycle of the
Application process.
Individual Certificates—The Coast
Guard’s COFR database indicates that,
currently, there are 25,875 COFRed
vessels. Adding the 481 COFRed tank
vessels greater than 100 gross tons to
300 gross tons proposed in Regulation
Cost 1 equals 26,356 COFRed vessels.
26,356 COFRed vessels ÷ 3 = 8,785
COFRed vessels per year that would
require the submission of the gross
tonnage measurement systems used.
Masters Certificates—According to the
COFR database, there are currently 8
Master Certificates.
8 Master Certificates ÷ 3 = 3 Master
Certificates per year that would require
the submission of the gross tonnage
measurement systems used for the
largest vessel covered by the
Application.
Fleet Certificates—According to the
COFR database, there are currently 12
Fleet Certificates.
12 Fleet Certificates ÷ 3 = 4 Fleet
Certificates per year that would require
the submission of the gross tonnage
measurement systems used for the
largest vessel covered by the
Application.
COFR Operators would also provide a
copy of the tonnage certifying
document, upon request. We assume
that the Coast Guard would request a
copy of the tonnage certifying document
when there is an incident. According to
incident data from the Coast Guard’s
CIMS database, there was an average of
12 incidents per year involving vessels
with COFRs and vessels that would be
required to have COFRs under this
proposed rule over the five year period
2012–2017. We assume that for the
analysis period, the number of incidents
will remain constant with this average.
Reporting of reason for termination of
guaranty by a guarantor.
Based on NPFC Vessel Certification
Program data on the historical number
of annual notices of guaranty
termination by guarantors, the Coast
Guard estimates that there will be 4,000
vessels per year for the 10-year analysis
period.
Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
Based on NPFC Vessel Certification
Program historical data, the Coast Guard
estimates that there will be 1,000
submissions on vessel name changes
and change in location when there is a
change in ownership per year.
Burden of Response:
Reporting of gross tonnage
measurement systems used and
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submission of copy of the tonnage
certifying document, upon request.
Reporting the gross tonnage
measurement systems used with the
application and/or requests for COFR
renewal would result in a negligible
burden (less than one minute of time) to
the COFR Operator and would be
completed with the Application for or
request for renewal of the COFR.
Based on estimates received from
COFR insurance guarantors who would
submit, upon request, a copy of the
tonnage certifying document on behalf
of the COFR Operator, COFR Operators
would require 15 minutes (0.25 hours)
per submission.
Reporting of reason for termination of
guaranty by a guarantor.
The Coast Guard estimated that it will
take 5 minutes (0.08 hours) for the
guarantor to add the reason why the
guaranty was terminated to the
information they provide to the Coast
Guard already when he or she
terminates a guaranty.
Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
The Coast Guard assumed that it will
take an additional 5 minutes (0.08
hours) per submission to provide
additional information that is not
already required under the current rule.
Estimate of Total Annual Burden:
Reporting of gross tonnage
measurement systems used and
submission of copy of the tonnage
certifying document, upon request.
As stated above in the cost benefit
analysis section of the preamble, we do
not quantify the cost impact of reporting
the gross tonnage measurement systems
used because it is negligible and is
provided as part of the Application and/
or request for COFR renewal.
The cost burden associated with
COFR Operators providing, upon
request, their tonnage certifying
document is calculated as follows:
Number submissions per year ×
Number of hours × labor cost per hour:
12 × 0.25 hours per submission = 3
hours
3 hours per year × $35.64 per hour =
$107 per year
Reporting of reason for termination of
guaranty by a guarantor.
Number of terminations per year ×
number of hours per submission × labor
cost per hour:
4,000 submissions per year × 0.08 hours
per submission × $35.64 per hour =
$11,405 per year
Reporting vessel name change and
increased reporting on location of vessel
when there is a change in ownership on
date of change.
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Number of submissions per year ×
number of hours per submission × labor
cost per hour:
1,000 submissions per year × 0.08 hours
per submission × $35.64 per hour =
$2,851 per year
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.
We ask for public comment on the
proposed collection of information to
help us determine, among other
things—
• How useful the information is;
• Whether the information can help
us perform our functions better;
• How we can improve the quality,
usefulness, and clarity of the
information;
• Whether the information is readily
available elsewhere;
• How accurate our estimate is of the
burden of collection;
• How valid our methods are for
determining the burden of collection;
and
• How we can minimize the burden
of collection.
If you submit comments on the
collection of information, submit them
by the date listed in the DATES section
of this preamble to both the OMB and
to the docket where indicated under
ADDRESSES.
You need not respond to a collection
of information unless it displays a
currently valid control number from
OMB. Before the Coast Guard could
enforce the collection of information
requirements in this proposed rule,
OMB would need to approve the Coast
Guard’s request to collect this
information.
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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
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 rulemaking is based on
provisions in OPA 90 and CERCLA; 33
U.S.C. 2716 and 42 U.S.C. 9608,
respectively. This proposed rule would
amend Coast Guard regulations on
vessel evidence of financial
responsibility and remove certain
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unnecessary pollution fund regulations.
The OPA 90 contains a savings clause
that saves to the States the ability to
regulate activities contained in Title I of
OPA 90, including vessel evidence of
financial responsibility requirements.
See 33 U.S.C. 2718; United States v.
Locke and Intertanko v. Locke, 529 U.S.
89, 105, 120 S.Ct. 1135, 1146 (2000).
Thus, nothing in this proposed rule
would preempt states from regulating
vessel evidence of financial
responsibility requirements for oil
pollution. However, CERCLA contains
an express preemption provision which
prohibits States, except under limited
circumstances, from requiring vessels to
establish or maintain evidence of
financial responsibility in connection
with liability for the release of a
hazardous substance if those vessels
maintain evidence of the financial
responsibility required under that
subchapter (42 U.S.C. 9614(d)). Thus,
except under limited circumstances,
States cannot regulate requirements for
vessel evidence of financial
responsibility requirements for
hazardous material pollution. The
removal of 33 CFR part 135 and subpart
D of part 153 would remove certain
federal pollution fund’s regulatory
requirements that were superseded by
OPA 90 and subsumed by the OSLTF.
As the proposed rule clarifies but does
not alter the existing, applicable federal
law relating to pollution funds, it would
not have preemptive impact. Therefore,
this proposed rule is consistent with the
fundamental federalism principles and
preemption requirements described in
Executive Order 13132.
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 CONTACT section of
this preamble.
F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995, 2 U.S.C. 1531–1538, requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100 million (adjusted for inflation) or
more in any one year. Although this
proposed rule would not result in such
an expenditure, we do discuss the
effects of this rule elsewhere in this
preamble.
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28817
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
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;
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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. This proposed rule would
be categorically excluded under
paragraph L53 of Appendix A, Table 1
of DHS Instruction Manual 023–01–
001–01, Rev. 01. Paragraph L53 pertains
to congressionally mandated regulations
designed to improve or protect the
environment. A preliminary Record of
Environmental Consideration
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 involves
expanding vessel financial
responsibility to include tank vessels
greater than 100 gross tons but less than
or equal to 300 gross tons, clarifying and
updating the rule’s reporting
requirements, conforming the rule to
current practice, and removing two
superseded regulations. We seek any
comments or information that may lead
to the discovery of a significant
environmental impact from this
proposed rule.
List of Subjects
33 CFR Part 135
Administrative practice and
procedure, Continental shelf, Insurance,
Oil pollution, Reporting and
recordkeeping requirements.
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33 CFR Part 138
Hazardous materials transportation,
Insurance, Oil pollution, Reporting and
recordkeeping requirements, Vessels,
Water pollution control.
33 CFR Part 153
Hazardous substances, Oil pollution,
Reporting and recordkeeping
requirements, Water pollution control.
For the reasons discussed in the
preamble, the Coast Guard proposes to
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remove 33 CFR part 135, and to amend
33 CFR parts 138 and 153 as follows:
PART 135—[REMOVED]
■
1. Remove part 135.
PART 138—EVIDENCE OF FINANCIAL
RESPONSIBILITY FOR WATER
POLLUTION (VESSELS) AND OPA 90
LIMITS OF LIABILITY (VESSELS,
DEEPWATER PORTS AND ONSHORE
FACILITIES)
2. The authority citation for part 138
is revised to read as follows:
■
Authority: 33 U.S.C. 2704, 2716, 2716a; 42
U.S.C. 9608, 9609; 6 U.S.C. 552(d); E.O.
12580, Sec. 7(b), 3 CFR, 1987 Comp., p. 193;
E.O. 12777, Secs. 4 and 5, 3 CFR, 1991
Comp., p. 351, as amended by E.O. 13286,
Sec. 89, 3 CFR, 2004 Comp., p. 166, and by
E.O. 13638, Sec. 1, 3 CFR, 2014 Comp.,
p.227; Department of Homeland Security
Delegation Nos. 0170.1 and 5110, Revision
01. Section 138.40 also issued under the
authority of 46 U.S.C. 2103 and 14302.
3. In part 138, revise the part heading
to read as set out above; and revise
subpart A, consisting of §§ 138.10
through 138.170, to read as follows:
■
Subpart A — Evidence of Financial
Responsibility for Water Pollution (Vessels)
Sec.
138.10 Scope and purpose.
138.20 Applicability.
138.30 Definitions.
138.40 General requirements.
138.50 How to apply vessel gross tonnages.
138.60 Forms and submissions; ensuring
submission timeliness.
138.70 Issuance and renewal of COFRs.
138.80 Applying for COFRs.
138.90 Renewing COFRs.
138.100 How to calculate a total applicable
amount.
138.110 How to establish and maintain
evidence of financial responsibility.
138.120 Fees.
138.130 Agents for Service of process.
138.140 Application withdrawals, COFR
denials and revocations.
138.150 Reporting requirements.
138.160 Non-owning COFR Operator’s
responsibility for identification. 138.170
Enforcement.
Subpart A—Evidence of Financial
Responsibility for Water Pollution
(Vessels)
§ 138.10
Scope and purpose.
(a) Scope. This subpart sets forth—
(1) The requirements and procedures
each COFR Operator (as defined in
§ 138.30(b)) must use to establish and
maintain the evidence of financial
responsibility required by the OPA 90
and CERCLA (both defined in § 138.30),
and to obtain Certificates of Financial
Responsibility (COFR);
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(2) The standards and procedures the
Coast Guard uses to determine the
acceptability of guarantors;
(3) The procedures guarantors must
use to submit evidence of financial
responsibility on behalf of the
responsible parties for vessels to which
this subpart applies;
(4) The requirements for designating
and maintaining U.S. agents for service
of process;
(5) The requirements for reporting
changes affecting compliance with this
subpart; and
(6) The enforcement actions that may
result from non-compliance with this
subpart or OPA 90, CERCLA, or both,
referenced in paragraph (a)(1) of this
section.
(b) Purpose. These requirements
ensure that the responsible parties for
vessels to which this subpart applies,
have sufficient available financial
resources to cover their potential
liabilities to the United States and other
claimants in the following scenarios:
(1) Under OPA 90 in the event of a
discharge, or substantial threat of a
discharge, of oil; and
(2) In the case of vessels greater than
300 gross tons, under CERCLA in the
event of a release, or threatened release,
of a hazardous substance.
§ 138.20
Applicability.
(a) Applicability generally. This
subpart applies—
(1) To the COFR Operator of—
(i) Any vessel over 300 gross tons
(except a vessel listed in paragraphs
(d)(1) or (d)(2) of this section) using the
navigable waters of the United States, or
any port or other place subject to the
jurisdiction of the United States,
including any such vessel using a
deepwater port or other offshore facility
subject to the jurisdiction of the United
States;
(ii) Any vessel of any size (except a
vessel listed in paragraphs (d)(1) or
(d)(3) of this section) using the waters of
the Exclusive Economic Zone to
transship or lighter oil (whether
delivering or receiving) destined for a
place subject to the jurisdiction of the
United States; and
(iii) Any tank vessel over 100 gross
tons (except a vessel listed in
paragraphs (d)(1) or (d)(3) of this
section) using the navigable waters of
the United States, or any port or other
place subject to the jurisdiction of the
United States, including any such tank
vessel using a deepwater port or other
offshore facility subject to the
jurisdiction of the United States;
(2) To a guarantor providing evidence
of financial responsibility under this
subpart on behalf of one or more of a
vessel’s responsible parties;
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(3) To responsible parties other than
the COFR Operator designated to
represent the responsible parties for
purposes of this subpart; and
(4) To any person serving as a U.S.
agent for service of process under this
subpart.
(b) How to apply this part to mobile
offshore drilling units. For the purposes
of applying the evidence of financial
responsibility required under OPA 90
and this subpart and the limits of
liability set forth in subpart B of this
part, and in addition to any OPA 90
offshore facility evidence of financial
responsibility requirements that may
apply under 30 CFR part 553, a mobile
offshore drilling unit is treated as—
(1) A tank vessel when it is being used
as an offshore facility; and
(2) A vessel other than a tank vessel
when it is not being used as an offshore
facility.
(c) How to apply CERCLA evidence of
financial responsibility to self-propelled
vessels. For the purposes of applying the
evidence of financial responsibility
required under CERCLA and for vessels
identified in paragraph (a)(1)(i) of this
section, this subpart applies to a selfpropelled vessel over 300 gross tons
even if it does not carry hazardous
substances.
(d) Exceptions. (1) This subpart does
not apply to public vessels.
(2) Paragraph (a)(1)(i) of this section
does not apply to any non-self-propelled
barge that does not carry oil as cargo or
fuel and does not carry hazardous
substances as cargo.
(3) Paragraphs (a)(1)(ii) and (a)(1)(iii)
of this section do not apply to: any
offshore supply vessel; any fishing
vessel or fish tender vessel of 750 gross
tons or less that transfers fuel without
charge to a fishing vessel owned by the
same person; any towing or pushing
vessel (tug) simply because it has in its
custody a tank barge; or any tank vessel
that only carries, or is adapted to carry,
non-liquid hazardous material in bulk
as cargo or cargo residue.
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§ 138.30
Definitions.
(a) As used in this subpart, the
following terms have the meanings set
forth in—
(1) OPA 90 (specifically in 33 U.S.C.
2701): claim, claimant, damages,
deepwater port, discharge, Exclusive
Economic Zone, facility, incident, liable
or liability, mobile offshore drilling unit,
navigable waters, offshore facility, oil,
owner or operator, person, remove,
removal, removal costs, responsible
party, tank vessel, United States, and
vessel; and
(2) CERCLA (42 U.S.C. 9601): claim,
claimant, damages, facility, hazardous
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substance, liable or liability, navigable
waters, offshore facility, owner or
operator, person, remove, removal,
United States, and vessel.
(3) 46 CFR 69.9: Convention
Measurement System, foreign-flag
vessel, gross tonnage ITC (GT ITC) 1 and
gross register tonnage (GRT), tonnage,
and U.S.-flag vessel.
(b) As used in this subpart—
Applicable amount means an OPA 90
or CERCLA evidence of financial
responsibility amount determined to
apply to a vessel as provided under
§ 138.100.
Application means an ‘‘Application
for Vessel Certificate of Financial
Responsibility (Water Pollution)’’,
which the COFR Operator for one or
more vessels has completed and verified
in eCOFR, as provided in
§ 138.60(c)(1)(i), or signed, dated, and
submitted to the NPFC by one of the
submission methods specified in
§ 138.60(c)(1)(ii) through (c)(1)(iv).
Cargo means goods or materials
carried on board a vessel for purposes
of transportation, whether proprietary or
nonproprietary. A hazardous substance
or oil carried solely for use aboard the
carrying vessel is not cargo.
CERCLA means the Comprehensive
Environmental Response,
Compensation, and Liability Act of
1980, as amended (42 U.S.C. 9601, et
seq.).
COFR means a current Certificate of
Financial Responsibility (Water
Pollution) issued by the Director, under
this subpart, as provided in § 138.70,
and posted on the NPFC COFR program
website https://npfc.uscg.mil/cofr/
default.aspx.
COFR Operator means a responsible
party who conducts, or has
responsibility for, the operation of a
vessel to which this subpart applies—
that is, a person who is an operator as
defined in OPA 90 and CERCLA, and,
when there is more than one responsible
party (including more than one
operator), is the operator designated and
authorized by all the vessel’s
responsible parties to act on their behalf
for the purpose of complying with this
subpart, including submitting (or
causing to be submitted) all
Applications and requests for COFR
renewal, evidence of financial
responsibility and reports, and payment
of all fees required by § 138.120.
(1) If a vessel has one owner and is
operated by that owner, or the owner
controls and is responsible for the
1 The acronym ‘‘ITC’’ refers to the International
Tonnage Convention. GT ITC, as defined in 46 CFR
69.9 means the gross tonnage measurement of a
vessel as applied under the Convention
Measurement System.
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28819
vessel’s operation, the owner is the
COFR Operator. In all other cases the
person who operates, or controls and is
principally responsible for the operation
of, the vessel (for example, the demise
charterer) is the COFR Operator.
(2) A person who is responsible, or
who agrees by contract to become
responsible, for a vessel in the capacity
of a builder, repairer, or scrapper, or for
the purpose of holding the vessel out for
sale or lease, is the COFR Operator. A
person who takes possession of, or
responsibility for, a newly built,
modified, or repaired vessel from a
builder or repairer, or who purchases
and operates or becomes a demise
charterer of a vessel held out for sale or
lease, is the COFR Operator.
(3) A time or voyage charterer who
does not assume responsibility for the
operation of a vessel is not a COFR
Operator for purposes of this subpart.
(4) The designation of an operator to
act as the COFR Operator on behalf of
a vessel’s responsible parties for
purposes of this subpart does not limit
who may be determined to be an
operator under OPA 90, CERCLA, or
both, in the event of an incident or a
release.
Day or days means calendar days
unless otherwise specified.
Director means the person in charge of
the U.S. Coast Guard, National Pollution
Funds Center (NPFC), or that person’s
authorized representative.
eCOFR means the electronic
Certificate of Financial Responsibility
web-based process located on the NPFC
COFR program website, https://
npfc.uscg.mil/cofr/default.aspx, and is
the process COFR Operators may use to
apply for and renew COFRs.
Evidence of financial responsibility
means the demonstration of the
financial ability of the responsible
parties for a vessel to which this subpart
applies to meet their potential liabilities
under OPA 90, CERCLA, or both, up to
the total applicable amount determined
as provided under § 138.100 of this
subpart.
Financial guarantor is a type of
guarantor and means a business entity
or other person providing a financial
guaranty under § 138.110(c). A financial
guarantor is distinct from a COFR
insurance guarantor, a self-insurer, or a
surety. A self-insurer, however, may
also serve as a financial guarantor for
others.
Fish tender vessel and fishing vessel
have the same meanings as set forth in
46 U.S.C. 2101.
Fleet Certificate means a COFR issued
by the Director under this subpart to the
COFR Operator of a fleet of 2 or more
unmanned, non-self-propelled barges
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that are not tank vessels and that, from
time to time, may be subject to this
subpart (for example, a hopper barge
over 300 gross tons when carrying oily
metal shavings or similar cargo). A Fleet
Certificate covers, automatically, all
unmanned, non-self-propelled, non-tank
barges for which the COFR Operator
may from time to time be responsible
that does not exceed the maximum gross
tonnage indicated on the Fleet
Certificate.
Fuel means any oil or hazardous
substance used, or capable of being
used, to produce heat or power by
burning, including power to operate
equipment. A hand-carried pump with
no more than 5 gallons of fuel capacity,
that is neither integral to nor regularly
stored aboard a non-self-propelled
barge, is not equipment.
Guarantor means any person who has
been determined to be acceptable by the
Director, as provided in § 138.110, and
who is providing evidence of financial
responsibility on behalf of one or more
of a vessel’s responsible parties, other
than as a responsible party providing
self-insurance under § 138.110(d).
Hazardous material has the same
meaning as set forth in 46 U.S.C. 2101.
Individual Certificate means a COFR
issued by the Director under this
subpart to the COFR Operator for a
single vessel.
Insurance guarantor is a type of
guarantor and means an insurance
company, association of underwriters,
ship owners’ protection and indemnity
association, or other person, serving as
a guarantor under § 138.110(b). An
insurance guarantor is distinct from a
self-insurer, a financial guarantor, or a
surety.
Master Certificate means a COFR
issued by the Director under this
subpart to the COFR Operator of one or
more vessels that are under the custody
of such person solely in the capacity of
a builder, repairer, or scrapper, or for
the purpose of holding vessels out for
sale or lease, where such person does
not physically operate the vessels. A
Master Certificate covers, automatically,
all of the vessels subject to this subpart
held by the COFR Operator solely for
purposes of construction, repair,
scrapping, sale or lease. A vessel which
is being operated commercially in any
business venture, including the business
of building, repairing, scrapping,
leasing, or selling (for example, a slop
barge used by a shipyard) cannot be
covered by a Master Certificate and
must have either a current Individual
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Certificate or, if applicable, a current
Fleet Certificate.
Net worth means the amount of all
assets located in the United States, less
all liabilities anywhere in the world.
NPFC means the U.S. Coast Guard,
National Pollution Funds Center. NPFC
is the U.S. Government office
responsible for administering the OPA
90 and CERCLA vessel COFR program.
Offshore supply vessel has the same
meaning as set forth in 46 U.S.C. 2101.
OPA 90 means the Oil Pollution Act
of 1990, as amended (33 U.S.C. 2701, et
seq.).
Public vessel means a vessel owned or
demise chartered and operated by the
United States, by a State or political
subdivision thereof, or by a foreign
nation, except when the vessel is
engaged in commerce.
Release, for purposes of this subpart,
means a release as defined in CERCLA
(specifically, 42 U.S.C. 9601), or a
threatened release, of a hazardous
substance.
Responsible party, for purposes of
OPA 90 evidence of financial
responsibility, has the same meaning as
defined at 33 U.S.C. 2701; and, for
purposes of CERCLA evidence of
financial responsibility, means any
person who is an ‘‘owner or operator,’’
as defined at 42 U.S.C. 9601, including
any person chartering a vessel by
demise.
Self-insurer means a COFR Operator
providing evidence of financial
responsibility as the responsible party of
the subject vessel, as provided under
§ 138.110(d). A self-insurer is distinct
from a guarantor.
Total applicable amount means an
evidence of financial responsibility
amount that must be demonstrated
under this subpart, determined as
provided in § 138.100.
Working capital means the amount of
current assets located in the United
States, less all current liabilities
anywhere in the world.
§ 138.40
General requirements.
(a) Requirement to establish and
maintain evidence of financial
responsibility. The COFR Operator of a
vessel must establish and maintain (or
cause to be established and maintained)
evidence of financial responsibility
acceptable to the Director using any one
of the methods specified in § 138.110, in
an amount equal to or greater than the
total applicable amount determined
under § 138.100 and, in the case of a
financial guarantor, as further provided
under § 138.110(c)(2) (aggregation of
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total applicable amounts). The evidence
of financial responsibility required by
this paragraph must be—
(1) Established as of the date they
become a responsible party; and
(2) Continuously maintained for so
long as they remain a responsible party.
(b) Requirement to have a COFR and
report changes. The COFR Operator
must apply for and ensure the vessel is
covered at all times by a current COFR,
by complying with the requirements
and procedures set forth in this subpart,
including the reporting requirements in
§ 138.150.
§ 138.50 How to apply vessel gross
tonnages.
(a) Purpose. This section sets forth the
methods for applying vessel gross
tonnage to—
(1) Determine whether a vessel
exceeds the 100 or 300 gross ton
threshold under § 138.20 and OPA 90,
CERCLA, or both;
(2) Calculate the OPA 90 and CERCLA
applicable amounts of financial
responsibility required, as provided in
§ 138.100; and
(3) Determine the OPA 90 limit of
liability under subpart B of this part in
the event of an oil pollution incident,
and the CERCLA limit of liability under
42 U.S.C. 9607 in the event of a
hazardous substance release.
(b) Both GT ITC and GRT assigned.
For a vessel assigned both gross tonnage
ITC (GT ITC) and gross register tonnage
(GRT) under 46 CFR part 69, apply the
tonnage thresholds in § 138.20 using the
assigned GRT tonnage, and determine
the applicable amounts of financial
responsibility and the limits of liability
using the assigned GT ITC tonnage.
(c) GT ITC or GRT assigned. For a
vessel assigned only a GT ITC or a GRT
tonnage under 46 CFR part 69, apply the
tonnage thresholds in § 138.20, and
determine the applicable amounts of
evidence of financial responsibility and
the limits of liability using the assigned
GT ITC or GRT tonnage.
(d) High or low GRT assigned. For a
vessel assigned a high and low GRT
tonnage under 46 CFR part 69, subpart
D (Dual Regulatory Measurement
System), apply the tonnage thresholds
in § 138.20, and determine the
applicable amounts of financial
responsibility and the limits of liability,
using the high GRT tonnage.
(e) Summary. The use of assigned
gross tonnages, as required by
paragraphs (b) through (d) of this
section, is summarized in the following
table.
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28821
TABLE 1 TO § 138.50—USE OF ASSIGNED GROSS TONNAGES
Assigned tonnage
Category
To apply the tonnage
thresholds in § 138.20
Vessels Assigned Both GT ITC and GRT ..............................................
Vessels Assigned—
GT ITC only ......................................................................................
GRT only ..........................................................................................
GRT ...............................................
GT ITC.
GT ITC ...........................................
GRT ...............................................
GT ITC.
GRT.
(f) Certified gross tonnage governs. In
the event of an incident or release, the
responsible parties and guarantors are
governed by the vessel’s assigned gross
tonnage on the date of the incident. This
is as determined under paragraphs (b)
through (e) of this section and
evidenced on the appropriate tonnage
certifying document as provided for
under the U.S. tonnage regulations or
international conventions (for example,
tonnage certificate or completed
Simplified measurement application,
International Tonnage Certificate
(1969)), regardless of what gross tonnage
is specified in the Application or
guaranty form submitted under this
subpart, except when the responsible
parties or guarantors knew or should
have known that the tonnage certificate
information was incorrect (see also
§ 138.110(h)(1)(iii)).
(g) Requirement to present tonnage
certifying document(s). Each COFR
Operator must submit to the Director, or
other authorized United States
Government official, upon request, for
examination and copying, the original
or an unaltered and legible electronic
copy of the vessel’s applicable tonnage
certifying document(s).
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§ 138.60 Forms and submissions;
ensuring submission timeliness.
(a) Where to obtain forms. All forms
referred to in this subpart are available
at the NPFC COFR program website,
https://npfc.uscg.mil/cofr/default.aspx,
and may be completed online or
downloaded.
(b) Where to obtain information.
Direct all questions concerning the
requirements of this subpart to the
NPFC at one of the addresses in
paragraphs (c)(1)(ii) through (iv) of this
section or by calling the NPFC at 202–
795–6130.
(c) How to present Applications and
other required submissions.
(1) Provide all submissions required
by this subpart to the Director, by one
of the following four methods:
(i) Electronically, using the eCOFR
process (located at https://
npfc.uscg.mil/cofr/default.aspx);
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(ii) By email, sent to such email
address as the Director may specify,
attaching legible electronic images
scanned in a format acceptable to the
Director;
(iii) By fax, sent to 202–795–6123
with a cover sheet specifying the total
number of pages, the sender’s telephone
number, and referencing NPFC
telephone number 202–795–6130; or
(iv) By mail, addressed to: Director,
National Pollution Funds Center; ATTN:
VESSEL CERTIFICATION; U.S. Coast
Guard Stop 7605; 2703 Martin Luther
King Jr Ave SE; Washington, DC 20593–
7605.
(2) Submissions may not be hand
delivered to the NPFC.
(3) Do not present submissions by
more than one method.
(d) Required contents of submissions.
Unless otherwise instructed by the
Director, all submissions required by
this subpart must—
(1) Set forth, in full, the correct legal
name of the COFR Operator to whom
the COFR is to be, or has been, issued;
(2) Be in English, and
(3) Express all monetary terms in
United States dollars.
(e) Ensuring the timeliness of
submissions; requesting deadline
exceptions.
(1) Compliance with a submission
deadline will be determined based on
the day the submission is received by
NPFC. If a deadline specified in this
subpart falls on a weekend or Federal
holiday, the deadline will occur on the
next business day.
(2) Ensuring the timeliness of the
submissions is the sole responsibility of
the person making the submission.
(3) The Director may, in the Director’s
sole discretion, grant an exception to a
deadline specified in this subpart only
upon written request, submitted as
provided in paragraph (c) and (d) of this
section, in advance of the deadline and
for good cause shown. The Director will
not grant a deadline exception request
that does not set forth the reasons for
the request and that does not give NPFC
sufficient time to consider and act on an
Application or a request for COFR
renewal before the COFR is required.
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To determine applicable
amounts under § 138.100 and
limits of liability
(f) Public access to information.
Financial data and other information
submitted to the Director is considered
public information to the extent
required by the Freedom of Information
Act (5 U.S.C. 552) and permitted by the
Privacy Act (5 U.S.C. 552(a)).
§ 138.70
Issuance and renewal of COFRs.
(a) Types of COFRs. The Director
issues the following three types of
COFRs as provided further in § 138.80:
Individual Certificates, Fleet Certificates
and Master Certificates.
(b) Requirements before issuance and
renewal of COFRs. The Director will
issue or renew a COFR only after NPFC
receives a completed Application or
request for COFR renewal, and
satisfactory evidence of financial
responsibility.
(c) COFRs are issued only to
designated COFR Operators. Each COFR
of any type is issued only in the name
of the COFR Operator designated in the
Application or request for COFR
renewal.
(d) Form of issuance. All COFRs are
issued by the Director in electronic form
on NPFC’s COFR program website
(https://npfc.uscg.mil/cofr/default.aspx)
for a term of no more than 3 years from
the date of issuance.
(e) Information included in COFRs.
The following information is available
on NPFC’s COFR program website for
each COFR issued by the Director:
(1) The name of the COFR Operator;
(2) The date of COFR expiration;
(3) The COFR number;
(4) For an Individual Certificate, the
name of the covered vessel, and the
vessel’s gross tonnage information,
including the measurement system(s)
used;
(5) For a Fleet Certificate, the gross
tons of the largest unmanned, non-selfpropelled, non-tank barge within the
fleet, including the measurement
systems(s) used; and
(6) For a Master Certificate, the gross
tons of the largest tank vessel and
largest vessel other than a tank vessel
eligible for coverage by the Master
Certificate, including the measurement
systems(s) used.
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§ 138.80
Federal Register / Vol. 85, No. 93 / Wednesday, May 13, 2020 / Proposed Rules
Applying for COFRs
(a) How to apply for a COFR. To apply
for a COFR of any type, the COFR
Operator must—
(1) Submit, or cause to be submitted,
to the Director, by one of the submission
methods provided in § 138.60(c):
(i) An Application;
(A) For an Individual Certificate, list
the name of the covered vessel, and the
vessel’s gross tonnage information,
including the measurement system(s)
used on the application;
(B) For a Fleet Certificate, instead of
listing each individual barge, mark the
box with the following statement: ‘‘This
is an Application for a Fleet Certificate.
The largest unmanned, non-selfpropelled, non-tank barge to be covered
by this Application is [INSERT
APPLICABLE GROSS TONS] GT ITC
and [INSERT GROSS TONNAGE] GRT’’;
and
(C) For a Master Certificate, instead of
listing each individual vessel, mark the
box with the following statement: ‘‘This
is an Application for a Master
Certificate. The largest tank vessel to be
covered by this Application is [INSERT
APPLICABLE GROSS TONS] GT ITC
and [INSERT APPLICABLE GROSS
TONS] GRT, as applicable. The largest
vessel other than a tank vessel to be
covered by this Application is [INSERT
APPLICABLE GROSS TONS] GT ITC
and [INSERT APPLICABLE GROSS
TONS] GRT, as applicable.’’
(ii) The evidence of financial
responsibility using one of the guaranty
methods provided in § 138.110;
(A) For a Fleet Certificate, the
evidence of financial responsibility
must be in the total applicable amount,
determined as provided in § 138.100, for
the largest unmanned, non-selfpropelled, non-tank barge to be covered.
(B) For a Master Certificate, the
evidence of financial responsibility
must be in the total applicable amount
determined as provided in § 138.100 for
the largest tank vessel and largest nontank vessel to be covered by the Master
Certificate.
(iii) The agent for service of process
designations required by § 138.130; and
(iv) All other supporting
documentation required by this subpart.
(A) At the time of Application for a
Master Certificate, the COFR Operator
must submit a report to the Director,
indicating: The name; previous name, if
applicable; type; gross tonnage and
measurement system(s) used, for each
vessel covered by the Master Certificate,
indicating which vessels, if any, are
tank vessels. If a vessel has both a GT
ITC and GRT tonnage, specify both gross
tonnages.
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(B) Six months after receiving a
Master Certificate, and every 6 months
thereafter, each COFR Operator must
submit to the Director, an updated
report, separately listing the vessels no
longer covered by that Master
Certificate. If a vessel has both a GT ITC
and GRT, both gross tonnages must be
specified. If a vessel has been
transferred to another responsible party
and the COFR Operator to whom the
Master Certificate was issued ceases to
be the vessel’s operator, the COFR
Operator must report the date and place
of the transfer, and the name and
contact information of the responsible
party to whom the vessel was
transferred. If the vessels covered by the
Master Certificate have not changed
from the previous report, the COFR
Operator may submit an updated report
that indicates no change from previous
report.
(2) Pay, or cause to be paid, all fees
required by § 138.120.
(b) Application deadline. The Director
must receive the Application, evidence
of financial responsibility, and other
required supporting documentation, at
least 21 days prior to the date the
Certificate is required. The COFR
Operator may seek an exception to the
21-day submission deadline only as
provided in § 138.60(e)(3).
(c) Where to obtain Application forms.
COFR Operators may create an
Application using the online eCOFR
web process (located at https://
npfc.uscg.mil/cofr/default.aspx) or, if
not using eCOFR, may obtain an
‘‘Application for Vessel Certificate of
Financial Responsibility (Water
Pollution)’’ at the same website.
(d) Requirement to verify, or sign and
date, the Application. (1) The COFR
Operator must complete and either
verify the Application in eCOFR as
provided in § 138.60(c)(1)(i) or, if not
using eCOFR, sign and date the hardcopy signature page of the Application
and submit the signed Application to
the Director, by one of the methods
specified in § 138.60(c)(1)(ii)-(iv).
(2) The Application must include the
title of the person signing it.
(3) If the person signing the
Application is acting under a Power of
Attorney, they must include a copy of
the Power of Attorney with the
Application.
(e) Requirement to update
Applications. The COFR Operator must
report any changes to the Application to
the Director in writing, no later than 5
business days after discovery of the
change. The Director may require that
the COFR Operator submit a revised
Application and provide additional
evidence of financial responsibility, and
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pay any additional fees required by
§ 138.120.
(f) Amending Fleet and Master
Certificates. Before operating a barge or
vessel that exceeds the maximum gross
tonnage indicated on the COFR, the
COFR Operator must:
(1) Submit a new or amended
Application, or a written request to
supplement the Application, to reflect
the new maximum gross tonnages on
the COFR;
(2) Unless the COFR Operator
qualifies as a self-insurer at the higher
total applicable amount, submit, or
cause to be submitted, evidence of
financial responsibility using one of the
guaranty methods provided in § 138.110
to the Director, demonstrating increased
coverage based on the new maximum
gross tonnage; and
(3) Pay a new certification fee, as
required by § 138.120.
§ 138.90
Renewing COFRs.
(a) The COFR Operator must submit a
request for COFR renewal to the NPFC
at least 21 days, but no earlier than 90
days, before the expiration date of the
current COFR.
(b) The COFR Operator may seek an
exception to the 21-day request for
COFR renewal submission deadline in
paragraph (a) of this section only as
provided in § 138.60(e)(3).
(c) The COFR Operator must identify
in the request for COFR renewal all
changes to the information contained in
the initial Application, including the
gross ton measurement system(s) used
(if not previously provided), the
evidence of financial responsibility, and
all other supporting documentation
previously submitted to the Director, as
provided in § 138.150.
§ 138.100 How to calculate a total
applicable amount.
The total applicable amount is the
sum of the OPA 90 applicable amount
determined under paragraph (a) of this
section plus the CERCLA applicable
amount determined under paragraph (b)
of this section.
(a) OPA 90 applicable amount. The
applicable amount under OPA 90 is
equal to the applicable limit of liability
determined as provided in subpart B of
this part.
(b) CERCLA applicable amount. The
applicable amount under CERCLA is
determined as follows:
(1) For a vessel over 300 gross tons
carrying a hazardous substance as cargo,
and for any vessel covered under
§§ 138.110(c)(3) or (d)(2)(ii) (calculation
of CERCLA applicable amounts for
financial guarantors and self-insurers),
the greater of $5,000,000 or $300 per
gross ton.
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(2) For any other vessel over 300 gross
tons, the greater of $500,000 or $300 per
gross ton.
(c) Amended applicable amounts. If
an applicable amount determined under
paragraph (a) or (b) of this section is
amended by statute or regulation, the
COFR Operator must establish and
maintain evidence of financial
responsibility in an amount equal to or
greater than the amended total
applicable amount, as provided in
§ 138.240(a).
(d) OPA 90 and CERCLA applicable
amounts and limits of liability.
The responsible parties are strictly,
jointly and severally liable, for the costs
and damages resulting from an incident
or a release, but together they need only
establish and maintain an amount of
financial responsibility equal to the
single limit of liability per incident or
release. Only that portion of the
evidence of financial responsibility
under this subpart with respect to—
(1) OPA 90 is required to be made
available by a guarantor for the costs
and damages related to an incident
where there is not also a release; and
(2) CERCLA is required to be made
available by a guarantor for the costs
and damages related to a release where
there is not also an incident. A
guarantor (or a self-insurer for whom the
exceptions to a limitations of liability
are not applicable), therefore, is not
required to apply the entire amount of
financial responsibility to an incident
28823
involving oil alone or a release
involving a hazardous substance alone.
§ 138.110 How to establish and maintain
evidence of financial responsibility.
(a) General requirement; guaranty
effective date and termination date. The
COFR Operator of each vessel must
submit, or cause to be submitted, to the
Director, the evidence of financial
responsibility required by § 138.40(a)
using one of the methods specified in
this section.
(1) If submitted on behalf of the COFR
Operator, the guarantor must provide
evidence of financial responsibility to
the Director.
(2) The effective and termination
dates are as follows:
TABLE 2 TO § 138.110—EFFECTIVE AND TERMINATION DATES
Type of
certificate
Effective date
Termination date
Individual ..........
Guaranty form submission date ................................................
30 days after the date the Director and the COFR Operator
receive written notice from the guarantor that the guarantor
intends to cancel the guaranty for that vessel.
Fleet .................
Guaranty form submission date or date COFR Operator becomes a Responsible Party for the vessel.
Guaranty form submission date or date COFR Operator becomes a Responsible Party for the vessel.
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Master ..............
(3) Termination Provisions: (i) The
guarantor must specify the reason for
terminating the guaranty in the notice
required by this paragraph, if known.
(ii) Termination of the guaranty as to
any covered vessel will not affect the
liability of the guarantor in connection
with an incident or release commencing
or occurring prior to the effective date
of the guaranty termination.
(4) If, at any time, the information
contained in the evidence of financial
responsibility submitted under this
section changes, or there is a material
change in a guarantor or self-insurer’s
financial position, the guarantor or
COFR Operator or self-insurer (as
applicable), must report the change to
the Director, as provided in § 138.150.
(b) Insurance guaranty method. The
COFR Operator may establish and
maintain evidence of financial
responsibility using the insurance
guaranty method by submitting an
Insurance Guaranty Form to the
Director.
(1) Each form must be executed by no
more than four COFR insurance
guarantors accepted by the Director. A
lead underwriter is considered one of
the COFR insurance guarantors.
(2) The process for establishing and
maintaining the acceptability of a COFR
insurance guarantor is as follows:
(i) The COFR insurance guarantor
must request an initial determination by
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the Director of the COFR insurance
guarantor’s acceptability to serve as a
COFR insurance guarantor under this
subpart, at least 90 days before the date
a COFR is required, by submitting
information describing the COFR
insurance guarantor’s structure,
business practices, history, and
financial strength, and such other
information as may be requested by the
Director.
(ii) The Director reviews the
continued acceptability of COFR
insurance guarantors annually. Each
COFR insurance guarantor must submit
updates to the initial request submitted
under paragraph (b)(2)(i) of this section,
annually, within 90 days after the close
of the COFR insurance guarantor’s fiscal
year, describing any material changes to
the COFR insurance guarantor’s legal
status, structure, business practices,
history, and financial strength, since the
previous year’s submission, and
providing such other information as
may be requested by the Director.
(c) Financial guaranty method. The
COFR Operator may establish and
maintain evidence of financial
responsibility using the financial
guaranty method by submitting a
Financial Guaranty Form to the
Director.
(1) Each form must be executed by no
more than four financial guarantors
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accepted by the Director, at least one of
which must be a parent or affiliate of the
COFR Operator. (See paragraph (g) of
this section for additional requirements
if more than one financial guarantor
signs the form.)
(2) The process for establishing and
maintaining the acceptability of a
financial guarantor is as follows:
(i) The financial guarantor must
comply with the self-insurance
provisions in paragraph (d) of this
section, and the periodic reporting
requirements in paragraph (e)(1)
through (4) of this section.
(ii) The financial guarantor must also
demonstrate that it maintains net worth
and working capital, each in amounts
equal to or greater than—
(A) The aggregate total applicable
amounts, calculated for each COFR
Operator vessel for which the financial
guaranty is being provided, based on
each such COFR Operator’s vessel with
the greatest total applicable amount,
plus—
(B) The total applicable amount
required to be demonstrated by a selfinsurer under this subpart if the
financial guarantor is also acting as a
self-insurer.
(3) In the case of a vessel greater than
300 gross tons, calculate the CERCLA
applicable amount under § 138.100(b)(1)
based on a vessel carrying hazardous
substances as cargo.
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(d) Self-insurance method. The COFR
Operator may establish and maintain
evidence of financial responsibility
using the self-insurance method as
follows:
(1) Submit to the Director the
financial statements specified in
paragraphs (e)(1) through (4) of this
section for the fiscal year preceding the
date the COFR Operator signs the
Application or request for COFR
renewal.
(2) Demonstrate that the COFR
Operator maintains, in the United
States, working capital and net worth,
each in amounts equal to or greater than
the total applicable amount, calculated
as follows:
(i) If the self-insurer has multiple
vessels, calculate the total applicable
amount based on the vessel with the
greatest total applicable amount.
(ii) In the case of a vessel greater than
300 gross tons, calculate the CERCLA
applicable amount under § 138.100(b)(1)
based on a vessel carrying hazardous
substances as cargo.
(e) Reporting requirements for selfinsurers and financial guarantors. (1)
Each self-insurer and financial
guarantor must submit the following
reports to the Director with the
Application and annually thereafter,
within the deadlines specified in
paragraph (e)(4) of this section:
(i) Submit the self-insurer or financial
guarantor’s annual, current, and audited
non-consolidated financial statements
prepared in accordance with Generally
Accepted Accounting Principles, and
audited by an independent Certified
Public Accountant in accordance with
Generally Accepted Auditing Standards.
(ii) Accompany the financial
statements with a declaration from the
self-insurer or financial guarantor’s
chief financial officer, treasurer, or
equivalent official, certifying the
amount of the self-insurer or financial
guarantor’s current assets, and the
amount of the self-insurer or financial
guarantor’s total assets included in the
accompanying balance sheet, which are
located in the United States.
(iii) If the financial statements cannot
be submitted in non-consolidated form,
submit a consolidated statement
accompanied by an additional
declaration prepared by the same
Certified Public Accountant—
(A) Verifying the amount by which
the total assets located in the United
States exceed the self-insurer or
financial guarantor’s total (worldwide)
liabilities, and the self-insurer or
financial guarantor’s current assets
located in the United States exceed the
self-insurer or financial guarantor’s total
(worldwide) current liabilities;
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(B) Specifically naming the selfinsurer or financial guarantor;
(C) Confirming that the amounts so
verified relate only to the self-insurer or
financial guarantor, apart from any
parent or other affiliated entity; and
(D) Identifying the consolidated
financial statement to which it applies.
(2) When the self-insurer or financial
guarantor’s demonstrated net worth is
not at least ten times the cumulative
total applicable amounts, their chief
financial officer, treasurer, or equivalent
official must submit to the Director with
the Application and semi-annually
thereafter, within the deadline specified
in paragraph (e)(4) of this section, an
affidavit stating that neither their
working capital nor net worth fell
during the first 6 months of the selfinsurer or financial guarantor’s current
fiscal year, below the cumulative total
applicable amounts.
(3) All self-insurers and financial
guarantors must—
(i) Submit, upon the Director’s
request, additional financial information
within the time specified; and
(ii) Notify the Director in writing
within 5 days following the date the
self-insurer or financial guarantor
knows, or has reason to know, that its
working capital or net worth has fallen
below the total applicable amounts.
(4) All required annual financial
statements and declarations must be
submitted to the Director within 90 days
after the close of the self-insurer or
financial guarantor’s fiscal year. All
required semi-annual financial
statements and declarations must be
submitted to the Director within 30 days
after the close of the applicable 6-month
period. The Director will grant an
extension of the time limits for
submissions under this paragraph only
as provided in § 138.60(e).
(5) A failure by a self-insurer or
financial guarantor to timely submit to
the Director any statement, data,
notification, or other submission
required may result in the Director
denying or revoking the COFR, and may
prompt enforcement action as provided
under § 138.170.
(6) The Director may waive the
working capital requirement for any
self-insurer or financial guarantor that—
(i) Is a regulated public utility, a
municipal or higher-level governmental
entity, or an entity operating solely as a
charitable, non-profit organization
qualifying under the Internal Revenue
Code (26 U.S.C. 501(c)), provided that
the self-insurer or financial guarantor
demonstrates in writing that the waiver
would benefit a local public interest; or
(ii) Demonstrates in writing that
working capital is not a significant
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factor in the self-insurer or financial
guarantor’s financial condition, in
which case the self-insurer or financial
guarantor’s net worth in relation to the
required cumulative total applicable
amounts, and a history of stable
operations, are the major elements
considered by the Director.
(f) Other guaranty methods for
establishing evidence of financial
responsibility. (1) The COFR Operator
may request that the Director accept a
guaranty method for establishing
evidence of financial responsibility that
is different from one of the methods
described in paragraphs (b) through (e)
of this section as follows:
(i) The COFR Operator must submit
the request to the Director in writing, at
least 90 days prior to the date the COFR
is required.
(ii) The request must describe in
detail: The method proposed; the
reasons why the COFR Operator does
not wish to (or is unable to) use one of
the methods described in paragraphs (b)
through (e); and how the proposed
guaranty method assures that the
vessel’s responsible parties have the
financial ability to meet their potential
liabilities under OPA 90 and CERCLA in
the event of an incident or a release.
(iii) Each COFR Operator making a
request under this paragraph must
provide the Director a proposed
guaranty form that includes all the
elements described in paragraphs (g)
and (h) of this section.
(2) The Director will not accept a selfinsurance method other than the one
described in paragraph (d) of this
section. The Director also will not
accept a guaranty method under this
paragraph that merely deletes or alters
a requirement or provision of one of the
guaranty methods described in
paragraphs (b) through (e) of this section
(for example, one that alters the
termination clause of the Insurance
Guaranty).
(3) A Director’s decision to accept an
alternative guaranty method of
establishing evidence of financial
responsibility under this paragraph is
final agency action.
(g) Additional rules regarding
multiple guarantors. If more than one
guarantor executes the relevant guaranty
form, the following rules apply:
(1) If a guarantor’s percentage of
vertical participation is specified on the
relevant guaranty form, the guarantor is
subject to direct action and is liable for
the payment of costs and damages under
OPA 90 or CERCLA, as applicable, only
in accordance with the percentage of
vertical participation so specified for
that guarantor.
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(2) Participation in the form of
layering (tiers, one in excess of another)
is not permitted. Only vertical
participation on a percentage basis and
participation with no specified
percentage allocation is acceptable.
(3) If no percentage of vertical
participation is specified for a guarantor
on the relevant guaranty form, the
guarantor’s liability is joint and several
for the total of the unspecified portion.
(4) The participating guarantors must
designate a lead guarantor having
authority to bind all of the participating
guarantors for actions required of
guarantors under OPA 90 or CERCLA
and this subpart, including but not
limited to reporting changes in the
evidence of financial responsibility as
provided in § 138.150(d), receipt of
source designations, advertisement of
source designations and the responsible
party’s claims procedures, and receipt
and settlement of claims.
(h) Direct action. (1) Each guarantor
providing evidence of financial
responsibility must submit to the
Director a written acknowledgment by
the guarantor that a claimant (including
a claimant by right of subrogation) may
assert any claim for costs or damages
arising under OPA 90, CERCLA, or both,
directly against the guarantor, regardless
of whether the claim is asserted in an
action in court or other proceeding. The
guarantor must also acknowledge that,
in the event a claim is asserted directly
against the guarantor under OPA 90,
CERCLA, or both, the guarantor may
invoke only the following rights and
defenses—
(i) The incident, release, or both, were
caused by the willful misconduct of a
responsible party for whom the guaranty
was provided;
(ii) All rights and defenses, which
would be available to the responsible
party under OPA 90, CERCLA, or both,
as applicable;
(iii) A defense that the amount of the
claim, or all claims asserted with
respect to the same incident or release,
whether asserted in court or in any
other proceeding, exceeds the amount of
the guaranty, except when the guaranty
is based on the gross tonnage of the
vessel (instead of the statutory
minimums) and the guarantor knew or
should have known that the applicable
tonnage certificate was incorrect (see
§ 138.50(f)); and
(iv) The claim is not one made under
OPA 90, CERCLA, or both.
(2) Except when the guaranty is based
on the gross tonnage of the vessel
(instead of the statutory minimums) and
the guarantor knew or should have
known that the evidence of financial
responsibility or applicable tonnage
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certificate is incorrect (see § 138.50(f)), a
guarantor who provides evidence of
financial responsibility under this
subpart will be liable, with respect to
any one incident or release, or both, as
applicable, only for the amount of costs
and damages specified in the evidence
of financial responsibility.
(3) A guarantor will not be considered
to have consented to direct action under
any law other than OPA 90 or CERCLA,
or to unlimited liability under any law
or in any venue, solely because the
guarantor has provided evidence of
financial responsibility under this
subpart.
(4) In the event of any finding that the
liability of a guarantor under OPA 90 or
CERCLA exceeds the amount of the
guaranty provided under this subpart,
that guaranty is considered null and
void with respect to that excess.
(i) Process upon disapproval of
guarantor. If the Director intends to
disapprove or revoke the approval of a
guarantor (for example, due to the
guarantor’s change in financial
position), the Director will notify the
COFR Operator of the need to establish
new evidence of financial responsibility
within a specified period.
(1) If the COFR Operator establishes,
or causes to be established, new
acceptable evidence of financial
responsibility within the period
specified by the Director in the notice,
the Application if otherwise complete
will be approved or the COFR will
remain in effect, and the COFR Operator
will not have to pay a new Application
fee or certification fee.
(2) If the COFR Operator fails to
establish, or cause to be established,
new acceptable evidence of financial
responsibility within the period
specified by the Director in the notice,
the Director may deny or revoke the
COFR and, if revoked, the COFR
Operator will have to apply for a new
COFR and pay a new certification fee.
The COFR Operator’s failure to
establish, or cause to be established,
new acceptable evidence of financial
responsibility within the period
specified by the Director may also result
in enforcement as provided under
§ 138.170.
§ 138.120
Fees.
(a) Fee payment methods. Each COFR
Operator applying for a COFR, or
requesting a COFR renewal, must pay
the fees required by paragraphs (b) and
(c) of this section as follows:
(1) All fees required by this section
must be paid in United States dollars.
(2) For COFR Operators using eCOFR
as provided under § 138.60(c)(1)(i),
credit card payment is required.
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28825
(3) For COFR Operators submitting
Applications and requests for COFR
renewal under § 138.60(c)(1)(ii)–(iv)
(email, fax, and mail submissions), the
fees must be paid by a check, cashier’s
check, draft, or postal money order,
made payable to the ‘‘U.S. Coast
Guard’’. Cash payments will not be
accepted.
(i) For Applications and requests for
COFR renewal submitted under
§ 138.60(c)(1)(ii) and (iii) (email and fax
submissions, respectively), all fee
payments must be received by the
Director no later than 21 days following
submission of the Application or
request for COFR renewal.
(ii) For Applications and requests for
COFR renewal submitted under
§ 138.60(c)(1)(iv) (mail submissions), all
fee payments must be enclosed with the
Application or request for COFR
renewal.
(4) Any failure to timely pay the fees
required by this section may result in
COFR denial or revocation, debt
collection (see 6 CFR part 11, 44 CFR
part 11, and 31 CFR parts 285, and 900
through 904), and such other
enforcement under § 138.170 as may be
appropriate.
(b) Application fee. (1) Except as
provided in paragraph (b)(2), the COFR
Operator must pay a non-refundable
Application fee of $200 for each
Application submitted under this
subpart (for each Application for one or
more Individual Certificates, for a Fleet
Certificate, or for a Master Certificate).
(2) An Application fee is not required
when the COFR Operator submits—
(i) a request for an additional
Individual Certificate under an existing
Application;
(ii) a request to amend an
Application;
(iii) a request for Certificate renewal;
or
(iv) a request to reinstate a Certificate,
if submitted within 90 days following
the Certificate’s revocation.
(c) Certification fees. In addition to
the Application fees required by
paragraph (b) of this section, each COFR
Operator who submits an Application or
request for COFR renewal must pay the
following certification fees:
(1) $100 for each vessel listed in, or
added to, an Application for one or
more Individual Certificates;
(2) $100 for each Application for a
Fleet Certificate or Master Certificate;
and
(3) $100 for each request for renewal
of an Individual Certificate, a Fleet
Certificate or a Master Certificate.
(d) Fee refunds. (1) A certification fee
will be refunded, upon receipt by the
Director of a written request, if the
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Application or request for COFR
renewal is denied by the Director, or if
the Application is withdrawn by the
COFR Operator before the Director
issues the COFR.
(2) Overpayments of Application and
certification fees will be refunded to the
COFR Operator.
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§ 138.130
Agents for Service of process.
(a) Designation of U.S. agents for
service of process. Each COFR Operator
and guarantor must designate on the
forms submitted a person located in the
United States as its U.S. agent for
service of process and (in the event of
an incident, a release, or both) for
receipt of notices of source designation,
claims presented under OPA 90,
CERCLA, or both, and lawsuits brought
under OPA 90, CERCLA, or both.
(b) U.S. agent for service of process
acknowledgment. Each U.S. agent for
service of process designated under
paragraph (a) must acknowledge the
agency designation in writing unless the
agent has already submitted a written
master (that is, blanket) agency
acknowledgment to the Director
showing that the agent has agreed in
advance to act as the U.S. agent for
service of process for the COFR
Operator or guarantor in question.
(c) How to change the U.S. agent for
service of process. A COFR Operator or
guarantor may change a designated U.S.
agent for service of process, at any time
and for any reason, by submitting a new
U.S. agent for service of process
designation in accordance with the
procedure in paragraph (a), and by
causing the new U.S. agent for service
of process to submit the agency
acknowledgment required by paragraph
(b).
(d) Replacement of unavailable U.S.
agent for service of process. In the event
a designated U.S. agent for service of
process becomes unavailable at any
time, for any reason, the COFR Operator
or guarantor must designate a new U.S.
agent for service of process in
accordance with the procedures in
paragraph (a), within 5 days of the
COFR Operator or guarantor becoming
aware of such unavailability. In
addition, the new U.S. agent for service
of process must submit to the Director
the agency acknowledgment required by
paragraph (b).
(e) Service on the Director. If a
designated U.S. agent for service of
process cannot be served, then service
of process on the Director, as provided
in this paragraph, will constitute valid
service of process on the COFR Operator
or guarantor. Service of process on the
Director will not be effective unless the
server—
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(1) Has sent a copy of each document
served on the Director to the COFR
Operator or guarantor, as applicable, by
registered mail, at the COFR Operator or
guarantor’s last known address on file
with the Director;
(2) Indicates, at the time process is
served upon the Director, that the
purpose of the mailing is to effect
service of process on the COFR Operator
or guarantor; and
(3) Provides evidence acceptable to
the Director at the time process is served
upon the Director, that service was
attempted on the designated U.S. agent
for service of process but failed, stating
the reasons why service on the U.S.
agent for service of process was not
possible, and that the document was
sent to the COFR Operator or guarantor,
as required by paragraph (e)(1).
§ 138.140 Application withdrawals, COFR
denials and revocations.
(a) Application withdrawal. A COFR
Operator may withdraw an Application
at any time prior to issuance of the
COFR.
(b) Application denials and COFR
revocations. The Director may deny an
Application or revoke a COFR, and the
United States may initiate enforcement
under § 138.170, for any failure to
comply with the requirements of this
subpart, including—
(1) If the COFR Operator, or other
person acting on the COFR Operator’s
behalf, makes a false statement in, or in
connection with, any submission
required by this subpart;
(2) If the COFR Operator, or other
person acting on the COFR Operator’s
behalf, fails to establish or maintain
acceptable evidence of financial
responsibility, as required by this
subpart;
(3) If the COFR Operator fails to pay
the Application and certification fees
required by § 138.120;
(4) If the COFR Operator or guarantor
fails to designate and maintain a U.S.
agent for service of process as required
by § 138.130;
(5) If the COFR Operator, or other
person acting on the COFR Operator’s
behalf, fails to comply with, or respond
to, lawful inquiries, regulations, or
orders of the U.S. Coast Guard
pertaining to the activities subject to
this subpart;
(6) If the COFR Operator, or other
person acting on the COFR Operator’s
behalf, fails to timely report information
required to be reported to the Director
under this subpart, including failing to
timely submit to the Director
statements, data, financial information,
notifications, affidavits, or other
submissions required by this subpart; or
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(7) If the Director obtains information
indicating that the Application should
be denied or that a new COFR is
required (for example, a permanent
vessel transfer, new COFR Operator,
vessel renaming, guaranty termination,
disapproval of a guarantor).
(c) Procedure for reinstating COFRs
following termination of guaranties. If a
COFR is revoked by the Director under
paragraph (b)(2) of this section based on
the expiration of 30 days following the
date the Director receives a guarantor’s
notice of termination as provided under
§§ 138.110(a)(3) and 138.150(d), the
Director may reinstate the COFR if the
guarantor promptly notifies the Director
following the revocation that the
guarantor rescinded the termination and
that there was no gap in guarantor
coverage.
(d) Notice to COFR Operator of intent
to deny an Application or revoke a
COFR. If the Director obtains
information indicating that an
Application should be denied or that a
COFR should be revoked for reasons
that the COFR Operator may not be
aware of, the Director will notify the
COFR Operator, in writing, stating the
reason for the intended action.
(1) A notice from the Director that an
Application is incomplete will be
considered a denial unless the
Application is completed by the COFR
Operator within the period specified in
the notice. A COFR subject to revocation
remains valid until the COFR is revoked
as provided in § 138.140(d)(2) and (3).
(2) If the Director issues a notice of
intent to deny an Application or revoke
a COFR due to a violation under
paragraph (b) of this section, the COFR
Operator may demonstrate compliance
to the Director in writing by no later
than the date specified by the Director
in the notice. If the COFR Operator
demonstrates compliance by that date,
the Application will remain under
consideration, and any current COFR
will remain in effect, unless and until
the Director issues a written decision
denying the Application or revoking the
COFR, as applicable. Otherwise, the
Application denial or COFR revocation
is effective as of the date specified by
the notice.
(3) The denial of an Application or
revocation of a COFR does not terminate
the guaranty.
(e) Request for reconsideration. (1) A
COFR Operator may ask the Director to
reconsider a denial of the COFR
Operator’s Application or the revocation
of a COFR as follows:
(i) The COFR Operator must submit
the request for reconsideration, in
writing, to the Director no later than 21
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days after the date of the denial or
revocation.
(ii) The submission must state the
COFR Operator’s reasons for requesting
reconsideration and include all
supporting documentation.
(2) A decision by the Director on
reconsideration of an Application denial
or a COFR revocation is final agency
action. If the Director does not issue a
written decision on the request for
reconsideration within 30 days after its
submission, the request for
reconsideration will be deemed to have
been denied, and the Application denial
or COFR revocation will be deemed to
have been affirmed as a matter of final
agency action. Unless the Director
issues a decision reversing the
revocation, the COFR revocation
remains in effect.
(f) Duty to remedy violations. If the
COFR for a vessel expires or is revoked
while the vessel is located in the
navigable waters, at any port or other
place subject to the jurisdiction of the
United States, or in the Exclusive
Economic Zone, the COFR Operator and
the vessel’s other responsible parties
will be deemed in violation of this
subpart. In such event, the COFR
Operator or, if unavailable or no longer
operating the vessel, the vessel’s current
responsible parties, must notify the
Director within 24 hours, by email or
other electronic means. The notice must
include the information required by
§ 138.150(b) and must establish new
evidence of financial responsibility,
designate a new COFR Operator if
applicable, and cure any other violation
of this subpart.
jbell on DSKJLSW7X2PROD with PROPOSALS3
§ 138.150
Reporting requirements.
(a) Report Changes of submitted
information. When there is a change in
any of the facts contained in an
Application, a request for COFR
renewal, evidence of financial
responsibility, or other submission
made under this subpart, the change
must be reported, in writing, to the
Director. The reports required by this
section may be submitted with, but are
in addition to, other submissions
required by this subpart (for example,
Applications, requests for COFR
renewal, semi-annual and annual
financial reports, Master Certificate
reports).
(b) A 21-day prior reporting
requirement of permanent vessel
transfers and other changes requiring
issuance of a new COFR. Current COFR
Operators of vessels, and owners or
operators of vessels not currently in U.S.
navigable waters or the U.S. Exclusive
Economic Zone, must report to the
Director, and (if applicable) to the
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20:26 May 12, 2020
Jkt 250001
guarantor, the following information, no
later than 21 business days before the
new COFR is required:
(1) The number of the current COFR;
(2) The name of the covered vessel;
(3) The type of change planned;
(4) The date the change will take
place;
(5) The reason for the change;
(6) For a vessel that will be located in
U.S. navigable waters or U.S. Exclusive
Economic Zone on the date the change
is scheduled to take place, where the
vessel will be located on that date (for
example, name and location of port);
(7) For a vessel name change, the
vessel’s new legal name;
(8) For the planned transfer of a vessel
to a new responsible party, and even if
the transferee’s intent is to scrap or
otherwise dispose of the vessel, the
name and contact information of the
responsible party to whom the vessel is
being transferred;
(9) For a change of COFR Operator,
the name and contact information of the
person who will replace the COFR
Operator; and
(10) Any other changes in the
information previously submitted to
ensure the information on record at the
NPFC is current.
(c) Three-day prior reporting of
changes not requiring issuance of a new
COFR. In addition to the prior reporting
required by paragraph (b) of this section,
the COFR Operator must report any
change to information contained in a
submission to the Director that does not
require issuance of a new COFR, by no
later than 3 business days before
implementing the change, including,
but not limited to: Changes to the U.S.
agent for service of process (other than
termination), a change of a non-operator
vessel owner, new contact information,
and changes in vessel particulars (for
example, flag, measurement, type, and
scheduled vessel scrapping).
(d) Reporting by guarantors. Each
guarantor (or, if there are multiple
guarantors, each lead guarantor) must
give the Director 30 days notice before
terminating a guaranty as provided in
§ 138.110(a)(3), explaining the reason
for the intended termination. In
addition, each guarantor (or, if there are
multiple guarantors, each lead
guarantor) must give the Director notice
by email or other electronic means as
soon as possible before any other change
occurs that would require new evidence
of financial responsibility or issuance of
a new COFR under paragraph (b) of this
section.
(e) Enforcement; deadline exceptions.
A failure to timely submit the reports
required by this section may result in
enforcement actions as provided in
PO 00000
Frm 00027
Fmt 4701
Sfmt 4702
28827
§ 138.170. Exceptions to the reporting
deadlines will only be granted as
provided in § 138.60(e).
§ 138.160 Non-owning COFR Operator’s
responsibility for identification.
(a) Each COFR Operator of a vessel
with a COFR, other than an unmanned,
non-self-propelled barge, who is not
also an owner of the vessel must ensure
that the original or a legible copy of the
vessel’s demise charter-party (or other
written document on the owner’s
letterhead, signed by the vessel owner,
which specifically identifies the COFR
Operator named on the COFR) is
maintained on board the vessel.
(b) The demise charter-party or other
document required by paragraph (a) of
this section must be presented, upon
request, for examination and copying, to
the Director or other United States
Government official.
§ 138.170
Enforcement.
(a) Any person who fails to comply
with the requirements of this subpart,
including the reporting requirements in
§ 138.150, may be subject to
enforcement as provided in this section,
including if—
(1) The COFR Operator fails to
maintain acceptable evidence of
financial responsibility as required;
(2) The name of a covered vessel is
changed without reporting the change to
the Director as required in § 138.150;
(3) The COFR Operator ceases, for any
reason, to be an operator of a covered
vessel, including when a vessel is
scrapped or transferred to a new owner
or operator, and a new Application and
report have not been submitted to the
Director as required by §§ 138.80 and
138.150; or
(4) The COFR Operator fails to
maintain a U.S. agent for service of
process.
(b) During a period of non-compliance
with this subpart, all use by the vessel
of the navigable waters of the United
States, of any port or other place subject
to the jurisdiction of the United States,
or of the Exclusive Economic Zone to
transship or lighter oil destined for a
place subject to the jurisdiction of the
United States, is forbidden.
(c) Withholding and revoking vessel
clearance. The Secretary of the
Department of Homeland Security will
withhold or revoke the clearance
required by 46 U.S.C. 60105 of any
vessel subject to this subpart that does
not have a COFR or for which the
evidence of financial responsibility
required has not been established and
maintained.
(d) Denying vessel entry, and
detention. The U.S. Coast Guard may
E:\FR\FM\13MYP3.SGM
13MYP3
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Federal Register / Vol. 85, No. 93 / Wednesday, May 13, 2020 / Proposed Rules
jbell on DSKJLSW7X2PROD with PROPOSALS3
deny entry to any port or other place in
the United States or the navigable
waters, and may detain at any port or
other place in the United States in
which it is located, any vessel subject to
this subpart, which does not have a
COFR or for which the evidence of
financial responsibility required by this
subpart has not been established and
maintained.
(e) Seizure and forfeiture. In
accordance with OPA 90, any vessel
subject to this subpart which is found in
the navigable waters without a COFR, or
for which the necessary evidence of
financial responsibility has not been
established and maintained as required,
is subject to seizure by, and forfeiture to,
the United States.
(f) Administrative and judicial
penalties and other relief.
(1) Any person who fails to comply
with the requirements of this subpart or
the evidence of financial responsibility
requirements of OPA 90, CERCLA, or
VerDate Sep<11>2014
20:26 May 12, 2020
Jkt 250001
both, including a failure to comply with
the reporting requirements in § 138.150,
is subject to civil administrative and
judicial penalties under OPA 90 and
CERCLA, as applicable. In addition,
under OPA 90, the Attorney General
may secure such relief as may be
necessary to compel compliance with
OPA 90 and this subpart, including
termination of operations.
(2) Under 18 U.S.C. 1001, any person
making a false statement in, or in
connection with, a submission under
OPA 90 or CERCLA or this subpart is
subject to prosecution.
(3) Any person who fails to timely pay
the fees required by § 138.120 or any
other amounts due under OPA 90 or
CERCLA or this subpart may also be
subject to Federal debt collection under
6 CFR part 11, 44 CFR part 11 and 31
CFR parts 285, and 900 through 904.
PO 00000
PART 153—CONTROL OF POLLUTION
BY OIL AND HAZARDOUS
SUBSTANCES, DISCHARGE
REMOVAL
4. The authority citation for part 153
continues to read as follows:
■
Authority: 14 U.S.C. 633; 33 U.S.C. 1321,
1903, 1908; 42 U.S.C. 9615; 46 U.S.C. 6101;
E.O. 12580, 3 CFR, 1987 Comp., p. 193; E.O.
12777, 3 CFR, 1991 Comp., p. 351;
Department of Homeland Security Delegation
No. 0170.1.
§ § 153.401 through 153.417
[Removed]
5. In part 153, remove subpart D,
consisting of §§ 153.401 through
153.417.
■
Dated: April 14, 2020.
Thomas G. Allan,
Rear Admiral, U.S. Coast Guard, Assistant
Commandant for Resources.
[FR Doc. 2020–08159 Filed 5–12–20; 8:45 am]
BILLING CODE 9110–04–P
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]]>Agencies
[Federal Register Volume 85, Number 93 (Wednesday, May 13, 2020)]
[Proposed Rules]
[Pages 28802-28828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08159]
[[Page 28801]]
Vol. 85
Wednesday,
No. 93
May 13, 2020
Part V
Department of Homeland Security
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Coast Guard
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33 CFR Parts 135, 138, and 153
Financial Responsibility--Vessels; Superseded Pollution Funds;
Proposed Rule
Federal Register / Vol. 85 , No. 93 / Wednesday, May 13, 2020 /
Proposed Rules
[[Page 28802]]
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DEPARTMENT OF HOMELAND SECURITY
Coast Guard
33 CFR Parts 135, 138, and 153
[Docket No. USCG-2017-0788]
RIN 1625-AC39
Financial Responsibility--Vessels; Superseded Pollution Funds
AGENCY: Coast Guard, DHS.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Coast Guard proposes to expand its regulations on vessel
financial responsibility to apply to all tank vessels greater than 100
gross tons as required by statute, and to make other amendments that
clarify and update reporting requirements, reflect current practice,
and remove unnecessary regulations. This proposed rule would ensure
that the Coast Guard has current information when there are significant
changes in a vessel's operation, ownership, or evidence of financial
responsibility, and would reflect current best practices in the Coast
Guard's management of the Certificate of Financial Responsibility
program.
DATES: Comments and related material must be received by the Coast
Guard on or before August 11, 2020. Comments sent to the Office of
Management and Budget (OMB) on collection of information must reach OMB
on or before July 13, 2020.
ADDRESSES: You may submit comments identified by docket number USCG-
2017-0788 using the Federal eRulemaking Portal at https://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: [email protected].
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 Benjamin White, National Pollution Funds Center, Coast
Guard; telephone 202-795-6066, email [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Public Participation and Request for Comments
II. Abbreviations
III. Basis and Purpose and Regulatory Background
A. Purpose of the Certificate of Financial Responsibility (COFR)
Regulations
B. History of COFR Regulations
C. History of 33 CFR Part 135 and Subpart D of Part 153
IV. Discussion of Proposed Rule
A. Overview of Proposed Amendments to COFR Regulations
B. Discussion of Proposed COFR Regulation Revisions
C. Proposed Removal of 33 CFR 138.90(f)
D. Proposed Removal of 33 CFR Part 135 and Subpart D of 33 CFR
Part 153
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
The Coast Guard views public participation as essential to
effective rulemaking, and will consider all comments and material
received during the comment period. Your comment can help shape the
outcome of this rulemaking. If you submit a comment, please include the
docket number for this rulemaking, indicate the specific section of
this document to which each comment applies, and provide a reason for
each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If you cannot submit your
material by using https://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, and
all public comments, will be available in our online docket at https://www.regulations.gov, and can be viewed by following that website's
instructions. Additionally, if you visit the online docket and sign up
for email alerts, you will be notified when comments are posted or a
final rule is published.
We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and
submissions in response to this document, see DHS's eRulemaking System
of Records notice (85 FR 14226, March 11, 2020).
We do not plan to hold a public meeting but we will consider doing
so if public comments indicate that 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
311(k) Fund The fund established by Section 311(k) of the Federal
Water Pollution Control Act
CERCLA Comprehensive Environmental Response, Compensation, and
Liability Act of 1980
COFR Certificate of Financial Responsibility
CFR Code of Federal Regulations
CIMS Contract Information Management System
DHS Department of Homeland Security
eCOFR Electronic Certificate of Financial Responsibility
EEZ Exclusive Economic Zone
FOSC Federal on-scene coordinator
FWPCA Federal Water Pollution Control Act
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
NPFC National Pollution Funds Center
NPRM Notice of proposed rulemaking
OCSLA Fund Offshore Oil Pollution Compensation Fund
OCSLAA Title III of the Outer Continental Shelf Lands Act Amendments
of 1978
OMB Office of Management and Budget
OPA 90 Oil Pollution Act of 1990
OSLTF or Fund Oil Spill Liability Trust Fund
SBA Small Business Administration
U.S.C. United States Code
Sec. Section
III. Basis and Purpose, and Regulatory History
The Oil Pollution Act of 1990 (OPA 90) (specifically, 33 U.S.C.
2716) and the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA) (specifically, 42 U.S.C. 9608), require
responsible parties for certain vessels to establish and maintain
evidence of financial responsibility. The evidence of financial
responsibility must meet the maximum amount of liability under 33
U.S.C. 2704(a) or (d). Violators of those requirements are subject to
various penalties under 33 U.S.C. 2716a and 42 U.S.C. 9609.
The 2010 Coast Guard Authorization Act (Pub. L. 111-281, 124 Stat.
2988
[[Page 28803]]
(October 15, 2010)) amended OPA 90 by expanding the population of
vessels subject to the evidence of financial responsibility
requirements. By statute, that population now includes any tank vessel
greater than 100 gross tons but less than or equal to 300 gross tons
using any place subject to the jurisdiction of the United States. The
Coast Guard proposes to amend the Code of Federal Regulations (CFR) to
reflect that statutory change. The Coast Guard had previously issued
Certificate of Financial Responsibility (COFR) regulations at 33 CFR
part 138, subpart A, which apply to vessels over 300 gross tons, as
well as certain other vessels depending on how and where they are
operated. In the time since the Coast Guard promulgated those
regulations, the Coast Guard has modernized and simplified its COFR
program. The Coast Guard has also identified certain aspects of the
COFR program where it could improve compliance, particularly in the
current COFR requirements for reporting changes in vessel operation,
ownership, or evidence of financial responsibility that affect the
basis of the Coast Guard's decision to issue a COFR. Finally, the
structure of the current COFR regulations and some of their provisions,
including the rules for applying vessel gross tonnage, are out of date
and difficult to understand.
A. Purpose of COFR Regulations
Generally, under OPA 90, the responsible parties (owners,
operators, and demise charters) for a vessel from which oil is
discharged, or poses the substantial threat of a discharge of oil, into
or upon the navigable waters or adjoining shorelines or the exclusive
economic zone (EEZ), are liable for the removal costs and damages
specified from such an incident (33 U.S.C. 2702(a)). Embodying the
``polluter pays'' principle, this liability is strict, joint, and
several. In addition, 42 U.S.C. 9607 also states that the responsible
parties for a vessel from which a hazardous substance is released, or
which poses a threat of a release of a hazardous substance, are
similarly strictly liable, jointly and severally, for the resulting
response costs and damages.
Under OPA 90 and CERCLA, the responsible parties for certain
categories of vessels must establish and maintain evidence of financial
responsibility in accordance with regulations promulgated by the
Secretary. The purpose of this requirement is to ensure that, in
advance of an oil pollution incident or a hazardous substance release,
the responsible parties for the vessels in the specified categories
have the financial ability to meet their potential liabilities under
OPA 90 and CERCLA up to the applicable limits of liability.
Under 33 U.S.C. 2716 evidence of financial responsibility is
required for the following categories:
(1) Vessels greater than 300 gross tons.
(2) Vessels using the EEZ to transship or lighter oil destined for
a place subject to the jurisdiction of the United States.
(3) Tank vessels greater than 100 gross tons.
B. History of COFR Regulations
Initially, the Coast Guard established COFR regulations in 33 CFR
part 138 with an interim rule published July 1, 1994 (59 FR 34210)
followed by a final rule published March 7, 1996 (61 FR 9264). In 2008
the Coast Guard amended the COFR regulations and placed them in a newly
created subpart A of part 138 (73 FR 53691, September 17, 2008).\1\ In
addition to making several other changes, that final rule removed a
requirement that responsible parties carry an original or authorized
copy of the current COFR aboard each covered vessel, because improved
technology enabled the Coast Guard to view vessel COFRs electronically.
This rule proposes further changes to part 138, subpart A, including
changes to the management of electronic documents.
---------------------------------------------------------------------------
\1\ That rule expanded part 138's heading to ``Financial
Responsibility for Water Pollution (Vessels) and OPA 90 Limits of
Liability (Vessels and Deepwater Ports)'' and dedicated subpart B to
the last half of the revised heading--limits of liability for
vessels and deepwater ports under OPA 90.
---------------------------------------------------------------------------
C. History of 33 CFR Part 135 and Subpart D of 33 CFR Part 153
The Coast Guard added part 135, titled ``Offshore Oil Pollution
Compensation Fund,'' to 33 CFR in 1979 (44 FR 16868, March 19, 1979)
and it added subpart D, titled ``Administration of the Pollution
Fund,'' to 33 CFR part 153 in 1971 (36 FR 7010, April 13, 1971). This
proposed rule would remove 33 CFR part 135 and subpart D of 33 CFR part
153, which concern management of two pollution funds for which OPA 90
repealed the authorities. The two defunct funds are the Offshore Oil
Pollution Compensation Fund (OSCLA Fund) in 33 CFR part 135 and the
Federal Water Pollution Control Act (FWPCA) Section 311(k) Fund (311(k)
Fund) in subpart D of 33 CFR part 153.
On November 1, 2011, the Coast Guard published a notice of inquiry
(76 FR 67386) soliciting public comment on whether to remove 33 CFR
part 135. We received no adverse comments; there were three comments
supporting the removal of part 135.
IV. Discussion of Proposed Rule
The Coast Guard proposes amending 33 CFR part 138, subpart A, and
removing the superseded regulations in 33 CFR parts 135 and 153. We
explain our specific proposed changes below.
A. Overview of Proposed Changes to COFR Regulations
Following is an overview of proposed revisions to 33 CFR part 138,
subpart A:
(1) Evidence of financial responsibility for tank vessels greater
than 100 gross tons but less than or equal to 300 gross tons. As
required by 33 U.S.C. 2716(a)(3), we propose extending the regulatory
requirement to establish and maintain evidence of financial
responsibility to any tank vessel greater than 100 gross tons but less
than or equal to 300 gross tons using any place subject to the
jurisdiction of the United States.
(2) Reporting requirements. We also propose reorganizing,
clarifying, and updating the reporting requirements for submitting an
Application. Examples of new requirements include documenting evidence
of financial responsibility submitted in support of an Application or a
request for COFR renewal, and adding into regulatory text the current
practice of guarantor notification.
This set of proposed changes--including Sec. 138.150, which is
dedicated to reporting requirements and expressly links those
requirements to enforcement provisions--aims to address instances in
which COFR Operators fail to report changes to their status, as is
currently required by 33 CFR 138.90(e). These failures include failing
to report a vessel's financial changes in a timely manner, failing to
report a vessel transfer to a new owner, and failing to secure a
guaranty and apply for a new COFR--and have resulted in compliance
gaps. These gaps compromise emergency responses where an inability to
confirm financial responsibility has caused untimely responses to oil
spills and undermined the COFR program.
Lastly, these proposed revisions are intended to ensure that the
Director receives the most current and accurate information when
issuing a COFR. These revisions would improve the Coast Guard's ability
to verify vessel compliance with COFR regulations. For example, if an
owner sells a vessel while it is located in a place subject to U.S.
jurisdiction, the new responsible party becomes immediately subject to
the COFR program. However, enforcing compliance with the COFR program's
requirements depends on the Coast Guard knowing about the vessel
[[Page 28804]]
transfer. The proposed regulatory revisions mitigate the risk of
uninsured responsible parties and derelict vessels.
(3) Revise COFR regulations to incorporate improved management
practices and technological advancements. We also propose to amend the
COFR regulations to reflect changes in the NPFC's management of the
COFR program. The proposed revisions include the following:
New regulatory text expressly authorizing COFR Operators,
guarantors, and agents for service of process to submit signed scanned
documents;
Permitting COFR Operators submitting Applications or
requests for COFR renewal by email or fax to pay the COFR Application
and certification fees up to 21 days after submission. This method
would replace the current rule's requirement to pay certification fees
before the NPFC issues the COFR;
Updating and simplifying the provisions that detail how to
apply gross tonnage assigned under different measurement systems. This
reflects changes in the law since OPA 90's initial legislation and
conforms the regulatory text to the Coast Guard's ``Measurement of
Vessels'' final rule (81 FR 18701, March 31, 2016), which amended the
U.S. tonnage regulations in 46 CFR part 69;
Adding new provisions describing the COFR program's
current procedures for determining the acceptability of COFR
guarantors; and
Modifying past technical amendments to implement the
Electronic COFR (eCOFR). These regulatory changes are necessary to
manage the COFR program more effectively, reduce the burden to the
public, and accommodate the frequent changes in vessel operation during
the normal course of maritime commerce.
(4) Clarifying terminology. We propose clarifying and simplifying
the terminology in COFR regulations for consistency with law and COFR
program business practices. These changes include using terms of art
consistently and simplifying terminology.
B. Discussion of Specific Proposed Changes to COFR Regulations
Table 1 provides a section-number crosswalk between the current
COFR regulations and our proposed COFR regulations. The crosswalk will
assist the reader in comparing the current regulations with those in
this proposed rule. Following table 1 is a discussion of substantive
changes, which include either new requirements or updates to the rule
to match current Coast Guard practice. The narrative discussion does
not address every proposed change: for example, the crosswalk shows
that part of current Sec. 138.30 is proposed to relocate to Sec.
138.40, but we omitted narrative discussion because proposed Sec.
138.40 contains no substantive change to requirements. When we applied
plain language doctrine required by E.O. 13563 to make these
regulations easier to understand but did not make substantive changes
we did not discuss those changes.
Table 1--Crosswalk of Current and Proposed COFR Regulations
------------------------------------------------------------------------
Current COFR regulations Proposed COFR regulations
------------------------------------------------------------------------
Part 138--Financial Responsibility for Part 138--Evidence of Financial
Water Pollution (Vessels) and OPA 90 Responsibility for Water
Limits of Liability (Vessels, Pollution (Vessels) and OPA 90
Deepwater Ports and Onshore Limits of Liability (Vessels,
Facilities). Deepwater Ports and Onshore
Facilities).
Subpart A--Financial Responsibility for Subpart A--Evidence of
Water Pollution (Vessels). Financial Responsibility for
Water Pollution (Vessels).
Sec. 138.10 Scope.................... Sec. 138.10 Scope and
purpose.
Sec. 138.15 Applicability............ Sec. 138.20 Applicability.
Sec. 138.20 Definitions.............. Sec. 138.30 Definitions.
Sec. 138.30 General.................. Sec. 138.40 General
requirements.
Sec. 138.30(c) through (f)........... Sec. 138.50 How to apply
vessel gross tonnages.
Sec. 138.40 Forms.................... Sec. 138.60 Forms and
submissions; ensuring
submission timeliness.
Sec. 138.45 Where to apply for and Sec. 138.60 Forms and
renew Certificates. submissions; ensuring
submission timeliness.
Sec. 138.50 Time to apply............ Sec. 138.80 Applying for
COFR.
Sec. 138.60 Applications, general Sec. 138.80 Applying for
instructions. COFR.
Sec. 138.65 Issuance of Certificates. Sec. 138.70 Issuance and
renewal of COFR.
Sec. 138.70 Renewal of Certificates.. Sec. 138.90 Renewing COFR.
Sec. 138.80 Financial responsibility, Sec. 138.110 How to establish
how established. and maintain evidence of
financial responsibility.
Sec. Sec. 138.80(f) [untitled] and Sec. 138.100 How to calculate
138.85 Implementation schedule for a total applicable amount.
amendments to applicable amounts by
regulation.
Sec. 138.90(a)-(c) Individual and Sec. 138.80 Applying for
Fleet Certificates. COFR.
Sec. 138.90(d) and (e), untitled..... Sec. 138.150 Reporting
requirements.
Sec. 138.100 Non-owning operator's Sec. 138.160 Non-owning COFR
responsibility for identification. Operator's responsibility for
identification.
Sec. 138.110 Master Certificates..... Sec. 138.80 Applying for
COFR.
Sec. 138.120 Certificates, denial or Sec. 138.140 Application
revocation. withdrawals, COFR denials and
revocations.
Sec. 138.130 Fees.................... Sec. 138.120 Fees.
Sec. 138.140 Enforcement............. Sec. 138.170 Enforcement.
Sec. 138.150 Service of process...... Sec. 138.130 Designating
agents for service of process.
------------------------------------------------------------------------
Proposed Sec. 138.10 Scope and Purpose
Proposed Sec. 138.10(a)(2) states that the standards and
procedures the Coast Guard uses to determine guarantor acceptability
would be included within the scope of subpart A. In addition, we
propose in Sec. 138.10(a)(3) that the reporting requirements for
guarantors would be included within the scope of subpart A. These
proposed changes for submitting evidence of financial responsibility on
behalf of the COFR Operator reflects current practice.
Proposed Sec. 138.20 Applicability
Proposed Sec. 138.20(a)(1) would extend, as required by statute,
the applicability of the rule to include tank vessels greater than 100
gross tons but less than or equal to 300 gross tons, regardless of
whether it is transshipping or lightering oil. This provision expands
the
[[Page 28805]]
population of vessels under 300 gross tons that are required to
establish and maintain evidence of financial responsibility under 33
U.S.C. 2716. The current regulation includes any tank vessel using the
waters of the EEZ to transship or lighter oil destined for a place
subject to the jurisdiction of the United States, but if a tank vessel
is not engaged in transshipping or lightering, the current regulation
has an exception for those that are 300 gross tons or less.
In Sec. 138.20(a)(2) through (a)(4), we propose extending the
applicability of the rule to include guarantors, responsible parties
other than the COFR Operator, and agents of process. This proposed
action would be in accordance with current practice.
Proposed Sec. 138.30 Definitions
We propose to cross-reference additional statutory and regulatory
definitions, add new regulatory definitions, amend regulatory
definitions in the current COFR regulations, and remove definitions
that are not used.
The following definitions reflect substantive changes from the
current rule:
Applicant and certificant: We propose replacing the confusing terms
``applicant'' and ``certificant'' with the term ``COFR Operator''
throughout the rule. This action would promote consistency with the
COFR program's business practice that authorizes the COFR Operator
designated in the ``Application'' to represent the responsible parties
for purposes of compliance with the COFR program.
COFR Operator: We propose to redefine ``COFR Operator'' to clarify
when we are referring to the operator who is liable in the event of an
incident or a release. We also propose replacing the current term
``Operator'' with the term ``responsible party.'' This rule defines the
term ``responsible party,'' for purposes of OPA 90 and CERCLA evidence
of responsibility, by cross-reference to the relevant statute, and
includes all of those persons who meet the definition. This replacement
of the term ``operator'' with the newly-defined terms ``responsible
party'' and ``COFR Operator'' makes clear that the designation of a
``COFR Operator'' to act on behalf of the responsible parties for
purposes of the COFR program does not limit or preclude other
responsible parties from being operators within the meaning of OPA 90
or CERCLA. We are also expressly clarifying that, when there is more
than one responsible party, the COFR Operator is the operator
designated and authorized by all the vessel's responsible parties to
act on their behalf to comply with the COFR program.
Fleet Certificate and Individual Certificate: We propose a new
definition for the term ``Fleet Certificate'' to parallel the
definition of ``Master Certificate,'' and a new definition for the term
``Individual Certificate,'' so that COFR regulations will include
definitions for all three types of Certificates issued by the Director.
Financial guarantor: We propose to revise the definition to make
clear that a financial guarantor cannot also be a self-insurer of a
vessel, but that it is possible for the self-insurer of one vessel to
be the financial guarantor for a different vessel.
Owner: We propose removing the current regulatory definition of
``owner.'' It does not accurately reflect current law, and it is not
clear that a separate regulatory definition of ``owner'' is needed or
helpful, as both OPA 90 and CERCLA define the term ``owner'' and we
cross-reference those definitions.
Tank vessel: We propose removing the regulatory definition of
``tank vessel,'' cross-referencing the OPA 90 statutory definition in
proposed Sec. 138.30(a), and moving the exceptions to applicability
that are embedded in the current regulatory definition of ``tank
vessel'' to proposed Sec. 138.20(d)(3).
Vessel: We propose removing the regulatory definition of ``vessel''
and cross-referencing in Sec. 138.30(a) the statutory definitions that
appear in OPA 90 and CERCLA. This is because there are slight
differences in the OPA 90 and CERCLA definitions, specifically in the
reference to public vessels in OPA 90. Therefore, although other
provisions of the current COFR regulations resolve these differences,
we believe the better way to resolve the wording differences is to
cross-reference the statutory definitions. This approach ensures that
COFR-regulation definitions will always be consistent with OPA 90 and
CERCLA.
Proposed Sec. 138.50 How To Apply Vessel Gross Tonnages
The current COFR regulations provide instructions to apply
different gross tonnage measurements for three different purposes: (1)
To determine whether a tonnage threshold applies; (2) to calculate a
vessel's OPA 90 and CERCLA applicable amounts of financial
responsibility; and (3) to determine the vessel's OPA 90 and COFR
limits of liability. However, these provisions are complex, and have
been difficult to apply, in part because they were developed and
established prior to the full coming into force of the International
Convention on Tonnage Measurement of Ships (June 23, 1969) on July 18,
1994. Furthermore, the 2010 Coast Guard Authorization Act included
amendments that updated, clarified, and eliminated inconsistencies in
the tonnage measurement law. The Coast Guard implemented these
amendments in the 2016 rule,\2\ which also incorporated changes to help
provide a suitable framework for tonnage-based regulations, allowing
the Coast Guard to specify tonnage thresholds more clearly. This
proposed rule maintains the purposes of applying gross tonnage
measurements explained in the current COFR regulations.
---------------------------------------------------------------------------
\2\ ``Measurement of Vessels'' final rule (81 FR 18701, March
31, 2016).
---------------------------------------------------------------------------
This proposed rule separates provisions for applying vessel gross
tonnage in proposed Sec. 138.50, and clarifies and simplifies the
current language while conforming with the 2016 amendments to the U.S.
tonnage regulations. We added a table to illustrate use of gross
tonnages assigned under the two overarching tonnage measurement systems
provided for by U.S. law.\3\
---------------------------------------------------------------------------
\3\ These systems are under the Convention Measurement System,
which expresses gross tonnage as ``GT ITC,'' and the Regulatory
Measurement System, which expresses gross tonnage as ``GRT.''
---------------------------------------------------------------------------
As proposed in Sec. 138.50(f), regardless of the tonnage reported
on the Application, the appropriate tonnage-certifying document as
provided for under the U.S. tonnage regulations, such as a tonnage
certificate or completed Simplified measurement application, governs in
determining the evidence of financial responsibility applicable
amounts, except when the responsible parties or guarantors knew or
should have known that the applicable tonnage certificate was
incorrect. In the event of an oil pollution incident or hazardous
substance release, the tonnage-certifying document governs the
applicable limit of liability. This information is vital to the COFR
program because the guaranty is to the certified tonnage at the time of
the incident, and addresses what happens if a vessel undergoes a
modification that affects the tonnage after a COFR Operator submits an
Application. This approach also creates certainty by removing the
implication that a tonnage re-measurement at the time of an incident
can supersede liability and financial responsibility as reflected on
the tonnage-certifying document.
The addition proposed in Sec. 138.50(g) also requires COFR
Operators to submit, upon request, the original or a copy of
[[Page 28806]]
the tonnage certifying document(s). The proposed rule would capture the
fact that, in some circumstances, vessels may be assigned tonnage under
both measurement systems.
Proposed Sec. 138.60 Forms and Submissions; Ensuring Submission
Timeliness
To remain consistent with current practice, proposed Sec.
138.60(a) notes that forms can be completed online or downloaded. This
is the Coast Guard's preference for submitting eCOFR Applications. If
you submit electronic images, please note that, currently, our system
only accepts the following imaging programs: PDF, JPEG, and TIFF.
Because of delays associated with mail processing and security,
submission of forms by mail is discouraged.
Proposed Sec. 138.60(c)(2) also removes the option for hand-
delivering submissions because of the prohibition of hand delivery
under U.S. Government mail security restrictions. Also, Sec. 138.60(e)
makes clear that the timeliness of submissions is solely the
responsibility of the person making the submission.
Proposed Sec. 138.70 Issuance and Renewal of COFR
Proposed Sec. 138.70(b) removes the express requirement to pay
fees before the issuance of a COFR. This would reflect the NPFC's
current business practice when the COFR Operator submits the
application via fax or email.
The proposed Sec. 138.70(e) states that certain tonnage
information will be posted to the NPFC's COFR website, including the
measurement system(s) used, which under proposed Sec. 138.80(a)(1),
the applicant is required to provide.
Proposed Sec. 138.80 Applying for COFRs
Proposed Sec. 138.80 reflects the removal of a requirement to pay
fees before the issuance of a COFR when Applications are submitted by
email or fax, by cross-referencing Sec. 138.120. Section 138.120's new
paragraph (a)(3)(i) allows payment to be made within 21 days of the
Application. This allows flexibility for the Director to issue COFRs
when the Application is complete and evidence of financial
responsibility has been established, and before the NPFC receives
payment. The COFR Operator must, however, ensure the fees are paid
within 21 days of submission of the Application to avoid adverse
consequences specified in Sec. 138.120(a)(4).
Proposed Sec. 138.80(a)(1)(i)(C) also clarifies that Master
Certificates do not name any specific vessel, but do state the maximum
tonnages for the largest vessel for which the COFR Operator may be
responsible. Without that requirement, we would not have a record of
coverage if an incident occurs in the intervening period between the
Application and the first periodic report of covered vessels.
Proposed Sec. 138.80(a)(1)(iv) requires the COFR Operator to
include a report with the Application providing information on the
vessels covered by the Master Certificate. The proposed rule would also
explain what information the COFR Operator must provide to the Director
if a vessel has been assigned tonnages under both measurement systems.
The inclusion of both assigned tonnages for vessels with more than one
should avoid delay of the application process and the effective date of
the guaranty.
Additionally, proposed Sec. 138.80(a)(1)(iv)(B) adds a new
requirement that certain Master Certificate application information be
updated, including a listing of vessels that are no longer covered.
This would establish the termination of the guaranty date. Finally, to
assist in keeping this information up to date, if during a 6-month
reporting period a vessel is transferred to another responsible party,
the updated report must list the date and place of transfer and the
contact information of the responsible party to whom the vessel was
transferred.
Unlike the current application instruction section, Sec. 138.60,
proposed Sec. 138.80(d) would not require an original signature page
for applications submitted by email or fax. Instead, the COFR Operator
may submit a legible scan of the signature page.
Proposed Sec. 138.100 How To Calculate a Total Applicable Amount
Proposed Sec. 138.100(c) states that when statute or regulation
adjusts limits of liability, the COFR Operator must establish and
maintain evidence of financial responsibility in an amount equal to or
greater than the amended total applicable amount, as provided in Sec.
138.240(a).
Proposed Sec. 138.110 How To Establish and Maintain Evidence of
Financial Responsibility
The proposed rule removes from the regulation the surety bond as a
specifically mentioned method for establishing and maintaining evidence
of financial responsibility. This method is still permitted as falling
under the ``other method'' provision in paragraph (f).
Proposed Sec. 138.110(a) explains that the guarantor continues to
be liable and must provide coverage for 30 days following NPFC receipt
of a notice of cancellation and not from the date the guarantor issues
the notice. The proposed rule moves this provision currently contained
on the COFR guaranty forms into the regulation, and reflects a current
and important NPFC business practice. The guarantor would provide the
reason for termination as part of its notice of cancellation, if known.
Additionally, proposed Sec. 138.110(a) requires COFR Operators,
guarantors, and self-insurers to notify the Director of any material
change in submitted information, including any material change in the
guarantor or self-insurer's financial position. A material change is a
change that would affect the basis of the Director's approval of the
guarantor or evidence of financial responsibility. This notification
would be required immediately when a change occurs, rather than within
10 days of the change as specified in the current rule.
Proposed Sec. 138.110(b) describes the current practice for
establishing and maintaining the acceptability of COFR insurance
guarantors. This will entail the guarantor submitting information on
its structure, business practices, history, financial strength, and
other information as requested by the Director. This process involves
an initial determination followed by annual submission by each COFR
insurance guarantor.
Proposed Sec. 138.110(c) clarifies the net worth and working
capital requirements for financial guarantors to reflect current
practice. Currently, the NPFC does not add the total applicable amount
of each vessel owned by one operator; rather, it bases evidence of
financial responsibility on the operator's vessel with the greatest
total applicable amount. This proposed rule would require net worth and
working capital be based on the aggregate total applicable amounts.
Proposed Sec. 138.110(f) changes the submission date for
requesting another guaranty method for establishing evidence of
financial responsibility from 45 to 90 days prior to the date the COFR
is required. The NPFC needs this additional 45 days to review the
financial documentation and communicate with the potential guarantor.
Proposed Sec. 138.120 Fees
Proposed Sec. 138.120 would eliminate an existing requirement that
the application fee must be paid before the Director will issue a COFR.
This would add flexibility and convenience for COFR Operators,
especially if they are underway and want to enter U.S.
[[Page 28807]]
navigable waters or U.S. Exclusive Economic Zone. It further explains
that failure to pay fees in a timely manner may result in denial or
revocation of COFR, debt collection, or other enforcement. Finally, it
amends the fee refund procedures in the case of overpayment. The
Director would refund overpayments, because, under the proposed
amendment, the NPFC will not credit overpayments for the operator's
future use or for transfer to another operator anymore.
Proposed Sec. 138.130 Designating Agents for Service of Process
Proposed Sec. 138.130(d) shortens the notification period for a
COFR Operator or Guarantor to notify the Director of a new agent for
service of process from 10 days to 5 days. This shortened period
reflects efficiencies relating to electronic notifications in place of
mailed notifications.
Proposed Sec. 138.140 Application Withdrawals, COFR Denials and
Revocations
Proposed Sec. 138.140 is revised to reflect current business
practice. It adds a provision noting that the COFR Operator may
withdraw an Application at any time before issuance of the COFR. It
also includes the failure to designate and maintain a U.S. agent for
service of process to the list of cases in which the Director may deny
an Application or revoke a COFR. The proposed section revision also
clarifies that the Director may deny an Application or revoke a COFR
after obtaining additional information, such as transfer to a new
operator, vessel renaming, guaranty termination or cancellation, or
disapproval of the guarantor, and it adds a duty to remedy violations
where a COFR for a vessel expires. Finally, it adds a provision
specifying that where a COFR is revoked because 30 days have elapsed
following the date the Director receives a guarantor's notice of
termination, the Director may reinstate the COFR if the guarantor
promptly notifies the Director that the guarantor rescinded the
termination and there was no gap in coverage. This will align the
regulation to the COFR guaranty forms.
Proposed Sec. 138.150 Reporting Requirements
The proposed rule would merge reporting requirements into this one
section. It would also revise the regulatory text to emphasize prior
notices of changes that will require a new COFR before the change
occurs. Proposed Sec. 138.150 identifies the information that must be
reported to the Director no later than 21 business days before a new
COFR is required for permanent vessel transfers and other changes
requiring issuance of a new COFR, and information that need only be
reported 3 business days before implementing the change for changes not
requiring issuance of a new COFR. Changes that will require issuance of
a new COFR include, but are not limited to: a permanent vessel
transfer, change of COFR Operator, vessel name change, change in the
vessel's gross tonnage, or termination of guaranty.
C. Proposed Removal of 33 CFR 138.90(f)
Current paragraph Sec. 138.90(f) contains a non-regulatory
provision dealing with the temporary transfer of custody of an unmanned
barge that has a COFR issued under subpart A of part 138. The COFR
Operator who transfers the barge continues to be liable under OPA 90,
CERCLA, or both, and continues to maintain on file with the Director
acceptable evidence of financial responsibility with respect to the
barge. The provision encourages the temporary transferee to require the
transferring COFR Operator to acknowledge in writing that the
transferring COFR Operator agrees to remain responsible for pollution
liabilities. We propose to remove Sec. 138.90(f) because the existing
COFR remains in effect in respect to that vessel, and a temporary new
COFR is not required. We welcome comments on its removal, particularly
from those who may employ the practice it encourages.
D. Proposed Removal of 33 CFR Part 135 and Subpart D of 33 CFR Part 153
This document also proposes to remove 33 CFR part 135 and subpart D
of 33 CFR part 153 because OPA 90 repealed the legal authorities for
them.
The regulations in 33 CFR part 135 apply to the management of the
OCSLA Fund, under Title III of the Outer Continental Shelf Lands Act
Amendments of 1978 (OCSLAA). Section 2004 in OPA 90 repealed the
authority for this part of the CFR (see 26 U.S.C. 9509 note). Like the
311(k) Fund, the funds in the OCSLA Fund were transferred to the OSLTF.
Similarly, OPA 90 superseded the financial responsibility requirements
of OCSLAA. However, OPA 90 (33 U.S.C. 2751(b) and 33 U.S.C. 2716(h))
preserved the force and effect of the regulations in 33 CFR part 135
regarding OCSLAA financial responsibility implementation, until OPA 90
financial responsibility regulations superseded these provisions (see
33 U.S.C. 2716(h), 59 FR 34210, July 1, 1994 (interim rule) and 61 FR
9264, March 7, 1996 (final rule)). Since 1992, other regulations have
superseded, or appeared to overlap with, the pollution incident
notification provisions of 33 CFR part 135. On November 1, 2011, the
Coast Guard published a notice of inquiry (76 FR 67385) soliciting
public comment on removing 33 CFR part 135. We received no comments
opposed to its removal.
The regulations in subpart D of 33 CFR part 153 apply to the
management of the 311(k) Fund. That section of the FWPCA was repealed
by OPA 90 section 2002(b)(2) (see 33 U.S.C. 1321 note), and the funds
in the 311(k) Fund were transferred to the Oil Spill Liability Trust
Fund (OSLTF).
Removing part 135 and subpart D of part 153 to eliminate
unauthorized regulatory requirements is necessary to eliminate
potential confusion to the public.
V. Regulatory Analyses
We 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 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review) direct agencies to assess
the costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 13771 (Reducing Regulation and Controlling Regulatory
Costs) directs agencies to reduce regulation and control 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
proposed rule a significant regulatory action under section 3(f) of
Executive Order 12866. Accordingly, OMB has not reviewed it. Because
this proposed rule is not a significant regulatory action, it is exempt
from the requirements of Executive Order 13771. See the OMB Memorandum
titled ``Guidance Implementing Executive Order 13771, titled `Reducing
Regulation and Controlling Regulatory Costs' '' (April 5,
[[Page 28808]]
2017). A draft Regulatory Assessment is available in the docket, and a
summary follows. As explained in this section, this proposed rule would
impose some quantified costs, and create qualitative benefits, which
the Coast Guard believes will justify the costs.
1. Analysis of Alternatives
Alternative 1: No action.
The ``No Action'' alternative makes no regulatory changes to the
evidence of financial responsibility regulations in 33 CFR part 138,
subpart A. The ``No Action'' alternative is not viable because the
statute requires evidence of financial responsibility regulations for
tank vessels greater than 100 gross tons but less than or equal to 300
gross tons. At a minimum, a regulation implementing this requirement is
required. This alternative reflects the status quo and therefore would
have no regulatory cost or benefit.
Alternative 2: Promulgate evidence of financial responsibility
regulations for tank vessels greater than 100 gross tons but less than
or equal to 300 gross tons (statutory requirement).
Alternative 2 reflects the absolute minimum rulemaking effort to
address the statutory requirement in Section 712 of the Coast Guard
Authorization Act of 2010. However, the fact that there are other
aspects of the Coast Guard's evidence of financial responsibility
program that the Coast Guard would like to address, in addition to
revising 33 CFR part 138, subpart A and removing regulations that are
no longer authorized involving funds that were subsumed by the
establishment of the OSLTF, makes this alternative unviable. This
alternative would have the least net benefits of all of the proposed
alternatives. This alternative reflects the most costly aspect of the
rulemaking and is included in all of the proposed alternatives because
it is a statutory provision.
Alternative 3: Promulgate evidence of financial responsibility
regulations for tank vessels greater than 100 gross tons but less than
or equal to 300 gross tons (statutory requirement) and for deepwater
ports (discretionary requirement).
Alternative 3 adds promulgating evidence of financial
responsibility regulations for deepwater ports to Alternative 2. The
Coast Guard considered proposing financial responsibility regulations
for deepwater ports as part of this rulemaking. The deepwater port
industry is experiencing increased activity in the liquefied natural
gas deepwater port industry sector, raising questions about how
existing laws and policies regarding these facilities would apply.
These issues do not impact vessel evidence of financial responsibility,
however, and could create complexity and potentially delay the mandated
regulation of tank vessels greater than 100 gross tons but less than or
equal to 300 gross tons. In addition, currently only one liquefied
natural gas deepwater port is in operation and it uses less than 100
gallons of oil, whereas other designs might pose a greater risk of oil
spills. Additional time is necessary to analyze the effects of
liquefied natural gas regulation on the economy, maritime safety, and
the environment. The only other deepwater port in operation, an oil
deepwater port called the Louisiana Offshore Oil Port, is self-insured,
and provides evidence of financial responsibility sufficient to meet
its maximum liability under OPA 90 under grandfathered requirements of
the Deepwater Port Act of 1974.
After evaluating this alternative, the Coast Guard has decided not
to develop deepwater port financial responsibility regulations at this
time. Postponing evidence of financial responsibility regulations for
deepwater ports will not impact maritime safety or the environment.
Currently, there is no established market that provides and maintains
evidence of financial responsibility for deepwater ports. If the market
decides to pursue these ventures in the future, the costs and benefits
would be analyzed accordingly as part of a future rulemaking.
Alternative 4 (Preferred alternative) Promulgate evidence of
financial responsibility regulations for tank vessels greater than 100
gross tons but less than or equal to 300 gross tons (statutory
requirement); require COFR Operators and guarantors to submit
additional information to the Coast Guard; make conforming amendments
reflect current practices (discretionary requirement); and remove
subpart D of 33 CFR part 153 D and 33 CFR part 135 from the Code of
Federal Regulations (discretionary requirement).
Alternative 4 addresses the statutory requirement to require tank
vessels greater than 100 gross tons but less than or equal to 300 gross
tons to establish and maintain financial responsibility. It also
provides necessary updates to the current financial responsibility
regulations to reflect current practices that have evolved over the
past two decades, taking into account technological improvements as
well as changes in policy. Lastly, this alternative removes 33 CFR part
135 and subpart D of 33 CFR part 153, both of which regulate two
defunct funds, the OCSLA Fund and the 311(k) Fund.
In addition to the regulatory costs and benefits associated with
Alternative 2, this alternative would add two aspects with no cost:
Conforming regulations to current practice and removing two defunct
portions of the CFR, which would provide intangible benefits of
eliminating confusion for the public, as well as ensuring that the
regulations reflect how the Coast Guard's financial responsibility
program currently operates. Additionally, a small amount of regulatory
cost would be associated with the proposed requirement to require COFR
Operators and guarantors to provide additional information to the Coast
Guard. Although the benefits of this alternative are qualitative, the
Coast Guard expects them to justify these costs.
2. Proposed Regulatory Changes
We propose amending the vessel evidence of financial responsibility
regulations at 33 CFR part 138, subpart A, to:
1. Require financial responsibility to now include all tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons.
2. Require additional information from the COFR Operator and
guarantor. The proposed revisions include:
Reporting of gross tonnage measurement system used and
submission of a copy of the tonnage certifying document, upon request;
Electronic submissions;
Reporting of reason for termination of guaranty by a
guarantor, if known; and
Reporting vessel name change and increased reporting on
location of vessel when there is a change in ownership on date of
change.
3. Conform regulations to current practice. The proposed revisions
include:
How to apply vessel gross tonnages;
Removal of requirement to pay fees before issuance of a
COFR;
Moving surety bond method to ``other methods'' for
establishing and maintaining evidence of financial responsibility;
Clarification on continuation of guarantor's liability and
requirement to provide coverage for 30 days after cancellation of
guaranty; and
Process for establishing and maintaining acceptability of
COFR insurance guarantors.
In addition, for the reasons discussed above, we propose removing
33 CFR part 135 and subpart D of 33 CFR part 153 which concern
management of two defunct pollution funds.
Table 2 shows whether a category of regulatory amendments have a
[[Page 28809]]
regulatory cost, regulatory benefit, or both. Those amendments that
have a regulatory cost or benefit are discussed in detail following the
table.
Table 2--Summary of Regulatory Amendment Impacts
------------------------------------------------------------------------
Regulatory Regulatory
cost benefit
------------------------------------------------------------------------
Require financial responsibility for
tank vessels greater than 100 gross
tons but less than or equal to 300
gross tons to establish and maintain
evidence of financial responsibility
(Statutory)
Application and certification Yes Yes
costs............................
COFR premium costs................ Yes Yes
Require Additional Information from
the COFR Operator and guarantor
(Discretionary)
Reporting of gross tonnage Yes Yes
measurement systems used and
submission of a copy of the
tonnage certifying document, upon
request..........................
Electronic submissions............ No \4\ Yes
Reporting of reason for Yes Yes
termination of guaranty by a
guarantor........................
Reporting vessel name change and Yes Yes
increased reporting on location
of vessel when there is a change
in ownership on date of change...
Conform regulations to current
Practice (Discretionary)
How to apply vessel gross tonnages No Yes
Removal of requirement to pay fees No Yes
before issuance of a COFR.........
Moving Surety Bond method to No Yes
``other methods'' for
establishing and maintaining
evidence of financial
responsibility...................
Clarification on continuation of No Yes
guarantor's liability and
requirement to provide coverage
for 30 days after cancellation of
guaranty.........................
Process for establishing and No Yes
maintaining acceptability of COFR
insurance guarantors.............
Removal of 33 CFR part 135 and subpart
D of 33 CFR part 153 (Discretionary)
Removal of 33 CFR part 135........ No \5\ Yes
Removal of subpart D of 33 CFR No \6\ Yes
part 153.........................
------------------------------------------------------------------------
3. Regulatory Costs
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\4\ Electronic submissions creates cost savings.
\5\ Removal of superseded regulatory requirements have no cost.
The OCSLAA Fund was subsumed by the Oil Spill Liability Trust Fund.
\6\ Removal of superseded regulatory requirements have no cost.
The 311(k) Fund was subsumed by the Oil Spill Liability Trust Fund.
---------------------------------------------------------------------------
There are two regulatory costs identified for this proposed rule:
Regulatory Cost 1: Require the additional tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons to
establish and maintain evidence of financial responsibility (statutory
requirement).
Regulatory Cost 2: Require additional information from the
COFR Operator and guarantor (discretionary requirement).
Discussion of Regulatory Cost 1
The proposed rule would now require tank vessels greater than 100
gross tons but less than or equal to 300 gross tons to establish and
maintain evidence of financial responsibility.\7\ These vessels would
be required to have COFRs, which would result in two types of costs:
---------------------------------------------------------------------------
\7\ Regulatory Cost 1 does not include vessels greater than 300
gross tons that are already required to have a COFR.
---------------------------------------------------------------------------
Application and certification costs; and
COFR premium costs.
Application and Certification Costs: In the first year of the
analysis period, the COFR Operator would be required to pay an
Application fee of $200 and a Certification fee of $100 for each vessel
requiring a COFR. A new Certification fee would be required every 3
years to renew the COFR.
COFR Premium Costs: The additional operators of tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons
would have to establish and maintain evidence of financial
responsibility using one of these several methods: Insurance, Self-
insurance, or Financial Guaranty.\8\
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\8\ Historically, the surety bond method has been used in a very
few instances. This proposed rule would move this method to the
``other methods'' category of financial responsibility under Sec.
138.110(f).
---------------------------------------------------------------------------
Affected Population: According to the Coast Guard's Marine
Information for Safety and Law Enforcement (MISLE) database, there are
an average of 481 tank vessels using U.S. navigable waters or U.S.
Exclusive Economic Zone from 2014-2018 that are greater than 100 gross
tons but less than or equal to 300 gross tons. Table 3 shows the number
of tank vessels greater than 100 gross tons but less than or equal to
300 gross tons per year (2014-2018).
Table 3--Number of Tank Vessels Greater Than 100 Gross Tons but Less
Than or Equal to 300 Gross Tons
------------------------------------------------------------------------
Number of
Year vessels
------------------------------------------------------------------------
2014.................................................... 488
2015.................................................... 492
2016.................................................... 477
2017.................................................... 474
2018.................................................... 474
Average (2014-2018)..................................... 481
------------------------------------------------------------------------
Cost Summary Regulatory Cost 1
Application and Certification Costs: We assumed the number of
future COFR Applications and Certifications, based on the historical
average number of vessels in the population from 2014 to 2018 (481
vessels) would be constant for the 10-year analysis period.\9\ We also
assumed that all vessels would renew their COFRs every 3 years through
the full 10-year analysis period. In the first year of the analysis
period, COFR Operators would pay an Application fee ($200) and a
Certification fee ($100) when applying for a COFR for their vessels.
Every 3 years thereafter, COFR Operators would pay a Certification fee
($100) when renewing their COFRs. In the first year of the analysis
period, the
[[Page 28810]]
annual cost would be calculated by multiplying the number of vessels
applying for COFRs (481 vessels) by the cost of the Application ($200)
and adding the number of vessels requesting certification (481)
multiplied by the cost of certification ($100) to equal $144,300. Every
third year thereafter, the cost would be calculated by multiplying the
number of vessels (481) requesting certification for renewal of their
COFRs by the cost of the certification ($100) to equal $48,100.
---------------------------------------------------------------------------
\9\ This estimate, based on COFR trends for currently COFRed
vessels, was validated by subject matter expert in Coast Guard's
Vessel Certification Division.
---------------------------------------------------------------------------
COFR Premium Costs: It is possible for vessel operators to choose
to use the Self-insurance or Financial Guaranty methods of establishing
their evidence of financial responsibility, which allows them to use
their U.S. business assets. Alternatively, in the case of the Financial
Guaranty method, vessels may use the U.S. business assets of a parent,
affiliate, or special purpose company as evidence that they are capable
of paying for removal costs and damages up to the applicable limit of
liability. In those cases, they have made a business decision that the
cost of the assuming liability risk under OPA 90 is less than the
premium charged by commercial insurance companies. This assessment of
OPA 90 risk is company-specific and not quantifiable. Therefore, for
the purposes of this analysis, we have assumed that the responsible
parties would use the Insurance method of establishing and maintaining
their evidence of financial responsibility. We received estimates of
COFR insurance premium amounts for tank vessels greater than 100 gross
tons but less than or equal to 300 gross tons from 4 COFR insurance
companies representing over 90 percent of existing COFRs.\10\ Based on
this survey of guarantors, we estimated that the premiums per vessel
would range between $300 and $1,000 per year.
---------------------------------------------------------------------------
\10\ Source: NPFC's COFR database.
---------------------------------------------------------------------------
Vessel Premium Low Range Cost Estimate: The Coast Guard calculated
the vessel premium low range cost estimate by using the following
formula:
Number of vessels x cost of premium per vessel per year:
481 vessels x $300 per vessel per year = $144,300 per year
Vessel Premium High Range Cost Estimate: The Coast Guard calculated
the vessel premium high range cost estimate by using the following
formula:
Number of vessels x the cost of premium per vessel per year:
481 vessels x the $1,000 per vessel per year = $481,000 per year
Discussion of Regulatory Cost 2
This proposed rule would require additional information from the
COFR Operator and guarantor that would result in three types of costs:
Reporting of gross tonnage measurement systems used and
submission of copy of tonnage certifying document, upon request;
Reporting of reason for termination of guaranty by a
guarantor, if known; and
Reporting vessel name change and increased reporting on
location of vessel when there is a change in ownership on date of
change.
Reporting of Gross Tonnage Measurement Systems Used and Submission
of a Copy of Tonnage Certifying Document, upon request--Affected
Population: All COFR Operators, including those for the tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons
proposed in this rule, would report the gross tonnage measurement
systems used when applying for and/or renewing a COFR. The Coast
Guard's COFR database indicates that there are 25,875 currently COFRed
vessels. Adding the 481 COFRed tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons proposed in Regulation Cost 1,
and assuming the number of COFRed vessels remains constant during the
analysis period, the total number of COFRed vessels equals 26,356.
Master Certificate and Fleet Certificate holders would also be
required to provide the gross tonnage measurement systems used for the
largest vessel covered by the Application. According to the COFR
database, there are currently 8 Master Certificates and 12 Fleet
Certificates.
COFR Operators would also provide a copy of the tonnage certifying
document, upon request. We assume that the Coast Guard would request a
copy of the tonnage certifying document when there is an incident.
According to incident data from the Coast Guard's CIMS database, there
was an average of 12 incidents per year involving vessels with COFRs
and vessels that would be required to have COFRs under this proposed
rule over the five year period 2012-2017. We assume that for the
analysis period, the number of incidents will remain constant with this
average.
& of Reason for Termination of Guaranty by a Guarantor--Affected
Population:
Based on NPFC Vessel Certification Program data on the historical
number of annual notices of guaranty termination by guarantors, the
Coast Guard estimates that there will be 4,000 per year for the 10-year
analysis period.
Reporting Vessel Name Change and Increased Reporting on Location of
Vessel When There is a Change in Ownership on Date of change--Affected
Population: Based on NPFC Vessel Certification Program historical data,
the Coast Guard estimates that there will be 1,000 submissions per
year.
Cost Summary Regulatory Cost 2
Reporting of Gross Tonnage Measurement Systems Used and Submission
of Copy of Tonnage Certifying Document, upon request: Reporting the
gross tonnage measurement systems used with the application and/or
requests for COFR renewal would result in a negligible cost impact
(less than one minute of time) to the COFR Operator and would be
completed with the Application for the COFR. We do not quantify this
cost because it is negligible.
Based on estimates received from COFR insurance guarantors who
would submit, upon request, a copy of the tonnage certifying document
on behalf of the COFR Operator, COFR Operators would require 15 minutes
(0.25 hours) per submission.
Number of submissions per year x number of hours x the labor cost
per hour:
12 x 0.25 hours per submission = 3 hours
3 hours per year x $35.64 per hour \11\ = $107 per year
---------------------------------------------------------------------------
\11\ Total employer compensation costs for private industry
workers averaged, $35.64 per hour worked, found at https://www.bls.gov/news.release/archives/ecec_12152017.pdf. Bureau of Labor
Statistics Economic News Release Employer Costs for Employee
Compensation news release text. Friday, December 15, 2017. This wage
rate was selected because it is the most general and reflects that
the person submitting the information could be any worker whether an
administrative assistant or a Chief Executive Officer of a company.
---------------------------------------------------------------------------
Reporting of reason for termination of guaranty by a guarantor: We
estimated that it would take 5 minutes (0.08 hours) for the guarantor
to add the reason why the guaranty was terminated to the information
they already provide to the Coast Guard when they terminate a guaranty.
Number of terminations per year x number of hours per submission x
labor cost per hour:
4,000 submissions per year x 0.08 hours per submission x $35.64 per
hour = $11,405 per year
Reporting Vessel Name Change and Increased Reporting on Location of
Vessel When There is a Change in Ownership on Date of Change: We
assumed that it will take an additional
[[Page 28811]]
5 minutes (0.08 hours) per submission to provide additional information
that is not already required under the current rule.
Number of submissions per year x number of hours per submission x
the labor cost per hour:
1,000 submissions per year x the 0.08 hours/submission x the $35.64 per
hour \12\ = $2,851 per year
---------------------------------------------------------------------------
\12\ See footnote 8.
---------------------------------------------------------------------------
Present Value Regulatory Costs (Low Range): We estimated that the
10-year present value of the proposed rule, at a 3-percent discount
rate, to be $1.6 million. We estimated that the 10-year present value
of the proposed rule, at a 7-percent discount rate, to be $1.3 million.
The estimated annualized discounted cost of the proposed rule, at a 3-
percent discount rate, is $188,877. The estimated annualized discounted
cost of the proposed rule, at a 7-percent discount rate, is $190,835.
Present Value Regulatory Costs (High Range): We estimated the 10-
year present value of the proposed rule, at a 3-percent discount rate,
to be $4.4 million. We estimated the 10-year present value of the
proposed rule, at a 7-percent discount rate, to be $3.7 million. The
estimated annualized discounted cost of the proposed rule, at a 3-
percent discount rate, is $525,577. The estimated annualized discounted
cost of the proposed rule, at a 7-percent discount rate, is $527,535.
4. Regulatory Benefits
There are four qualitative benefits identified for this proposed
rule:
Regulatory Benefit 1: Require Tank Vessels Greater than
100 Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of
Financial Responsibility (statutory requirement).
Regulatory Benefit 2: Require additional information from
the COFR Operator and guarantor (discretionary requirement).
Regulatory Benefit 3: Conform Regulations to Current
Practice (discretionary requirement).
Regulatory Benefit 4: Removal of 33 CFR part 135 and
subpart D of 33 CFR part 153 (discretionary requirement).
Discussion of Regulatory Benefit 1
Oil pollution removal costs and damages for incidents have
substantially increased since 1990, even for relatively small-sized
discharges. When there is no evidence of financial responsibility, it
becomes more likely that the OSLTF will have to pay for at least some
of the costs resulting from the incident.\13\ When vessels have COFRs,
the incident cost amount paid by the responsible party is higher than
for vessels that do not have COFRs. This proposed rule would add tank
vessels greater than 100 gross tons but less than or equal to 300 gross
tons to the vessels that are already required to establish and maintain
evidence of financial responsibility.
---------------------------------------------------------------------------
\13\ Lawrence I. Kiern, ``Liability, Compensation, and Financial
Responsibility Under the Oil Pollution Act of 1990: A review of the
Second Decade.'' 36 Tulane Maritime Law Journal. 23-24 (2011).
---------------------------------------------------------------------------
Of the 10,000 incidents sampled from the Coast Guard's Contract
Information Management System (CIMS) database during the ``1990 to
2017'' period, 4.91 percent were COFRed vessels and 29.15 percent were
non-COFRed vessels.\14\ Coast Guard CIMS data show that the Coast Guard
recovers 98.98 percent of costs when a vessel was COFRed, and only
27.71 percent of costs when it was not COFRed.
---------------------------------------------------------------------------
\14\ The remaining 65.94 percent of incidents were either
facility incidents or incidents where the Coast Guard could not
identify the source.
---------------------------------------------------------------------------
The proposed requirement would ensure that the costs are
internalized because parties responsible for oil spills would be more
fully responsible for (moving from less than \1/3\ to nearly 100
percent) paying for the oil pollution removal costs and damages and
help correct this market failure.\15\ Increased recovered cost rates
shift the risk and actual costs from the OSLTF to the polluting
responsible party.
---------------------------------------------------------------------------
\15\ See OMB Circular A-4, page 4 dated September 17, 2003 for a
short discussion on market failures and externalities such as
environmental problems.
---------------------------------------------------------------------------
Discussion of Regulatory Benefit 2
Reporting of Gross Tonnage Measurement Systems Used and Submission
of copy of Tonnage Certifying Document, upon request: COFR Operators
would submit a copy of the tonnage certifying document upon request.
Providing this additional information with respect to gross tonnage
will allow the Coast Guard to determine more effectively the limit of
liability and applicable amounts of financial responsibility for the
incident. In some cases, vessels have tonnage determined under more
than one measurement system, depending on a variety of factors,
including the vessel's flag, length, voyage type, keel laid, or
substantial alteration date, and whether it is self-propelled. This has
caused confusion with respect to which measurement system to use to
determine the limit of liability and amount of financial
responsibility.
Regardless of the tonnage reported on the Application, the tonnage
certifying document governs the required evidence of financial
responsibility and the limit of liability at the time of the incident
(except when the responsible parties or guarantors knew or should have
known that the tonnage certificate information was incorrect). Using
the tonnage certifying document provides the following benefits: (1) It
ensures that the Coast Guard has the most accurate tonnage
measurements; (2) it provides the method used to determine tonnage, as
well as the tonnage amount; (3) it provides information for foreign
flagged vessels that is oftentimes difficult to obtain; and (4) without
the applicable tonnage certifying document, if an incident occurred, a
re-measurement of tonnage could alter the already determined financial
responsibility and limit of liability.
Electronic submissions: The proposed rule would allow COFR
Operators, guarantors, and agents for service of process to submit
signed scanned images, emails, or faxes instead of hard copy signed-in-
ink originals. The Coast Guard receives approximately ten of the CG-
5586 forms by mail annually. Allowing electronic submissions creates
minimal cost savings; however, it allows the flexibility to COFR
Operators, and enhances Coast Guard's recordkeeping goals. This would
work towards the OMB's goal to maximize the use of electronic
technology for collection of information from the public.
Reporting of reason for termination of guaranty by guarantor: The
proposed rule would require the guarantor to include the reason for
termination, if known, with the notification for termination of the
guaranty. This information would provide the Coast Guard with new
information about the COFR Operator in the event there is an incident.
Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change: The
proposed rule would ensure that the Coast Guard has the most current
information when initially issuing a COFR--especially concerning
vessels that, over time, become derelict while in U.S. navigable waters
or U.S. Exclusive Economic Zone. The proposed revisions will also
improve the Coast Guard's ability to establish compliance with COFR
regulations by more effectively ensuring the responsible party is able
to pay its liability and mitigate risks to the OSLTF. For example, if a
vessel is sold while using a place subject to U.S. jurisdiction, the
new responsible parties become immediately subject to the COFR program.
These proposed changes are to ensure that, while the Coast Guard still
has regulatory authority over
[[Page 28812]]
a responsible party and the financial assurances of the guarantor, the
Coast Guard receives information relevant to continued compliance
before problems arise. However, enforcing compliance with the COFR
program's requirements depends on the Coast Guard knowing about the
vessel transfer. The proposed regulatory revisions seek to ensure that
the Coast Guard receives this information and to mitigate the risk of
uninsured responsible parties and derelict vessels.
Discussion of Regulatory Benefit 3
How to apply vessel gross tonnages: This proposed rule would update
and simplify the provisions respecting how to apply gross tonnage
measurement methods to reflect changes in the law since OPA 90 was
first enacted. This proposed rule is consistent with the Coast Guard's
tonnage regulation at 46 CFR part 69 ``Measurement of Vessels'' (81 FR
18701, March 31, 2016).
Removal of requirement to pay fees before issuance of a COFR: The
proposed rule would allow the COFR Operator to pay the COFR Application
and Certification fees up to 21 days after submitting their COFR
Application. This would add flexibility and convenience for COFR
Operators, especially if they are underway and want to enter U.S.
navigable waters or U.S. Exclusive Economic Zone.
Moving surety bond method to ``other methods'' for establishing and
maintaining evidence of financial responsibility: The proposed rule
would no longer specifically discuss the surety bond method in the
regulations because it is rarely, if ever, used. However, the surety
bond method would continue to be available under the ``other methods''
provision in the proposed rule.
Clarification on continuation of guarantor's liability and
requirement to provide coverage for 30 days after cancellation of
guaranty: The proposed rule would explain that the guarantor continues
to be liable and must provide coverage for 30 days following NPFC
receipt of a notice of cancellation. This requirement is currently
contained on the COFR form and reflects a current and important NPFC
business practice.
Process for establishing and maintaining acceptability of COFR
insurance guarantors: The proposed rule would move the current process
for establishing and maintaining acceptability of COFR insurance
guarantors into the regulations to make it more transparent to the
public. The Coast Guard's longstanding business practice under the
current COFR regulations for determining the acceptability of
guarantors is the basis of the procedures set forth in the proposed
rule. The proposed rule would also provide a process through which a
COFR operator may provide new evidence of financial responsibility and
obtain approval or continuation of the COFR where the Coast Guard
disapproves a guarantor (for example, due to guarantor fraud or
financial failure). The provision applies to pending Applications and
following the issuance of a COFR.
Discussion of Regulatory Benefit 4
These regulations concern management of two pollution funds--the
Offshore Oil Pollution Compensation Fund and the FWPCA Section 311(k)
Fund. These provisions are no longer authorized. On November 1, 2011,
the Coast Guard published a notice of inquiry (76 FR 67385) soliciting
public comment on removing 33 CFR part 135 and we received no adverse
comments. This aspect of the rulemaking is necessary to remove
unauthorized regulatory requirements and to eliminate potential
confusion to the public.
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.
An Initial Regulatory Flexibility Analysis discussing the impact of
this proposed rule on small entities is available in the docket, and a
summary follows.
There are two potential direct costs to small entities that would
result from this proposed rule:
Regulatory Cost 1: Require Tank Vessels Greater than 100
Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of
Financial Responsibility (Statutory Requirement) \16\
---------------------------------------------------------------------------
\16\ Regulatory Cost 1 does not include vessels greater than 300
gross tons that are already required to have a COFR.
---------------------------------------------------------------------------
Regulatory Cost 2: Require Additional Information from
COFR Operators and Guarantors (Discretionary Requirement)
Regulatory Cost 1--Require Tank Vessels Greater than 100 Gross Tons
to 300 Gross Tons Establish and Maintain Evidence of Financial
Responsibility (Statutory Requirement).
Affected Population: We queried NPFC's COFR database to determine
that there are 149 U.S. entities that operate tank vessels greater than
100 gross tons but less than or equal to 300 gross tons. We researched
the number of employees and revenue for these entities using public and
proprietary databases. We then determined which entities were small
based on the Regulatory Flexibility Act's criteria for small non-
profits and small governmental jurisdictions and the U.S. Small
Business Administration's (SBA) ``Table of Small Business Standards
Matched to North American Industry Classification System (NAICS)
Codes'' publication for businesses.\17\
---------------------------------------------------------------------------
\17\ The criteria for determining whether an entity is small
vary by NAICS code and generally involve the number of employees or
annual sales.
---------------------------------------------------------------------------
Of these 149 entities, we found employee and revenue data on 59
entities. Of these 59 entities, 27 were small and 32 were not small
based on the Regulatory Flexibility Act and SBA's criteria. For the
purposes of this analysis, we assumed that the remaining 90 entities
were small entities. Adding the known small entities to the unknown
entities brings the total number of entities considered to be small
entities for the purpose of this analysis to be 117. Of the small
entities, 115 are businesses, 2 are governmental jurisdictions, and 0
are small non-profits.
Regulatory Cost 2--Require Additional Information from COFR
Operators and Guarantors (Discretionary Requirement).
Affected Population: We queried NPFC's COFR database to determine
that there are 761 U.S. entities that operate vessels with COFRs,
including those operating vessels proposed in Regulatory Cost 1. We
researched the number of employees and revenue for these entities using
public and proprietary databases. We then determined which entities
were small based on the Regulatory Flexibility Act's criteria for small
non-profits and small governmental jurisdictions and the U.S. Small
Business Administration's (SBA) ``Table of Small Business Standards
Matched to North American Industry Classification System (NAICS)
Codes'' publication for businesses.\18\
---------------------------------------------------------------------------
\18\ The criteria for determining whether an entity is small
vary by NAICS code and generally involve the number of employees or
annual sales.
---------------------------------------------------------------------------
Of these 761 entities, we found employee and revenue data on 354
entities. Of these 354 entities, 245 were small and 109 were not small
based on the Regulatory Flexibility Act and SBA's
[[Page 28813]]
criteria. For the purposes of this analysis, we assumed that the
remaining 407 entities were small entities. Adding the known small
entities to the unknown entities brings the total number of entities
considered to be small entities for the purpose of this analysis to be
652. Of the small entities, 641 are businesses, 4 are governmental
jurisdictions, and 7 are small non-profits.
Regulatory Cost 1 Summary
The following calculation shows the average annual cost of
establishing financial responsibility per vessel for tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons:
Number of Vessels x Annual Cost of Application/Certification + Number
of Vessels x Annual COFR Insurance Premium
In the first year of the analysis period, COFR Operators would pay
an Application fee ($200) and a Certification fee ($100) when applying
for a COFR for their vessels. Every 3 years thereafter, COFR Operators
would pay a Certification fee ($100) when renewing their COFRs. For
each tank vessel greater than 100 gross tons but less than or equal 300
gross tons, the total 10 year cost is $600. The average annual cost for
these vessels is $60. We calculated the average premium ($650 per year)
by averaging the high-range COFR insurance premium ($1,000 per year)
and low-range COFR insurance premium estimates ($300 per year) provided
by COFR insurance guarantors.
For example, for a small entity with three vessels, the calculation
would be as follows:
Number of Vessels x Annual Cost of Application/Certification + Number
of Vessels x Annual COFR Insurance Premium
3 vessels x $60 per year + 3 vessels x $650 per year = $2,130 per year
Table 4 shows the annual cost of Regulatory Cost 1 for each small
entity based on the number of vessels they operate.\19\
---------------------------------------------------------------------------
\19\ Source: NPFC's COFR database.
Table 4--Annual Cost per Small Entity
------------------------------------------------------------------------
Annual cost
Number of vessels Number of per small
small entities entity
------------------------------------------------------------------------
1....................................... 77 $710
2....................................... 17 1,420
3....................................... 9 2,130
4....................................... 3 2,840
5....................................... 4 3,550
6....................................... 1 4,260
7....................................... 3 4,970
8....................................... 0 0
9....................................... 0 0
10...................................... 0 0
11...................................... 0 0
12...................................... 1 8,520
13...................................... 1 9,230
14...................................... 0 0
15...................................... 1 10,650
-------------------------------
Total............................... 117 ..............
------------------------------------------------------------------------
We then divided the annual cost per small entity by the small
entity's associated annual revenue and then multiplied by 100 to
determine the percent impact of the proposed rule on the small
entities' revenue. Table 5 shows the economic impact to small entities
of Regulatory Cost 1.
Table 5--Economic Impact to Small Entities--Regulatory Cost 1
------------------------------------------------------------------------
Number of Percent of
Percent of annual revenue small entities small entities
------------------------------------------------------------------------
1 to 2.................................. 0 0
<1...................................... 117 100
------------------------------------------------------------------------
Regulatory Cost 2 Summary
Reporting the gross tonnage measurement systems used with the
application and/or requests for COFR renewal would result in a
negligible cost impact (less than one minute of time) to the COFR
Operator and would be completed with the Application for the COFR. We
do not quantify this cost because it is negligible. As shown in the
Cost Benefit Analysis section of the Regulatory Analysis, the annual
cost for Regulatory Cost 2 is $14,363 per year total for all COFRed
vessels, including those operating vessels proposed in Regulatory Cost
1. The per vessel cost of Regulatory Cost 2 to small entities is
calculated by determining the total cost of Regulatory Cost 2 divided
by number of COFRed vessels.
$14,363 / 26,356 COFRed Vessels = $1 per vessel \20\
---------------------------------------------------------------------------
\20\ Rounded up to nearest dollar from $0.55.
Table 6 shows the annual cost of Regulatory Cost 2 for each small
entity based on the number of vessels they operate.\21\
---------------------------------------------------------------------------
\21\ Source: NPFC's COFR database.
[[Page 28814]]
Table 6--Annual Cost per Small Entity
------------------------------------------------------------------------
Annual cost
Number of vessels Number of per small
small entities entity
------------------------------------------------------------------------
1....................................... 362 1
2....................................... 77 2
3....................................... 41 3
4....................................... 26 4
5....................................... 22 5
6....................................... 19 6
7....................................... 18 7
8....................................... 5 8
9....................................... 9 9
10...................................... 12 10
11...................................... 3 11
12...................................... 3 12
13...................................... 4 13
14...................................... 3 14
15...................................... 4 15
16...................................... 1 16
18...................................... 3 18
19...................................... 1 19
20...................................... 1 20
23...................................... 1 23
24...................................... 1 24
25...................................... 1 25
26...................................... 1 26
27...................................... 1 27
30...................................... 2 30
31...................................... 1 31
32...................................... 1 32
35...................................... 2 35
36...................................... 1 36
37...................................... 1 37
41...................................... 1 41
42...................................... 1 42
53...................................... 1 53
55...................................... 1 55
56...................................... 1 56
57...................................... 1 57
60...................................... 1 60
61...................................... 1 61
77...................................... 1 77
79...................................... 1 79
80...................................... 1 80
96...................................... 2 96
98...................................... 1 98
104..................................... 1 104
107..................................... 1 107
116..................................... 2 116
129..................................... 1 129
158..................................... 1 158
169..................................... 1 169
315..................................... 1 315
389..................................... 1 389
462..................................... 1 462
496..................................... 1 496
-------------------------------
Total............................... 652 ..............
------------------------------------------------------------------------
We then divided the annual cost per small entity by the small
entity's associated annual revenue and then multiplied by 100 to
determine the percent impact of the proposed rule on the small
entities' revenue.\22\ Table 7 shows the economic impact to small
entities of Regulatory Cost 2.
---------------------------------------------------------------------------
\22\ Revenue information researched at https://www.manta.com/.
[[Page 28815]]
Table 7--Economic Impact to Small Entities--Regulatory Cost 2
------------------------------------------------------------------------
Number of Percent of
Percent of annual revenue small entities small entities
------------------------------------------------------------------------
1 to 2.................................. 0 0
< 1..................................... 652 100
------------------------------------------------------------------------
C. Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104-121, we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If 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 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 revise a previously approved collection of
information (OMB Control Number 1625-0046) 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. The estimate covers the time for
reviewing instructions, searching existing sources of data, gathering
and maintaining the data needed, and completing and reviewing the
collection. We also discuss the following incremental paperwork burden
associated with this proposed rule earlier in the ``Cost Benefit
Analysis'' under ``Regulatory Cost 2'' and ``Regulatory Benefit 2.''
Title: Financial Responsibility for Water Pollution.
OMB Control Number: 1625-0046.
Summary of the Collection of Information: This proposed rule would
add additional collection of information requirements to existing OMB
Control Number 1625-0046 for: COFR Operators to report gross tonnage
and gross tonnage measurement systems used, and submit a copy of their
tonnage certifying document, upon request; guarantors to report the
reason for termination of a guaranty; and COFR Operators to report
vessel name changes and increase reporting on location of vessel when
there is a change in ownership on date of change.
Need for Information:
Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document, upon request.
Providing tonnage measurement systems used and submitting the
tonnage certifying document, upon request, in the proposed rule, with
respect to gross tonnage will allow the Coast Guard to determine more
effectively the limit of liability and applicable amounts of financial
responsibility for the incident. In some cases, the vessel may be
assigned tonnage under more than one measurement system depending on a
variety of factors including the vessel's flag, length, voyage type,
keel laid, or substantial alteration date, and whether it is a self-
propelled vessel. This has caused confusion with respect to which
method to use to determine limit of liability and amount of financial
responsibility.
Regardless of the tonnage reported on the Application, the tonnage
certifying document governs the required evidence of financial
responsibility and the limit of liability at the time of the incident
(except when the responsible parties or guarantors knew or should have
known that the tonnage certifying document or certificate of registry
was incorrect). Using the tonnage certifying document provides the
following benefits: It ensures that the Coast Guard has the most
accurate tonnage measurements; it provides the method used to determine
tonnage, as well as the tonnage amount; it provides information for
foreign flagged vessels that is oftentimes difficult to obtain; and
without the applicable tonnage certifying document, if an incident
occurred, a re-measurement of tonnage could alter the already
determined financial responsibility and limit of liability.
Reporting of reason for termination of guaranty by a guarantor.
The proposed rule would require that the guarantor include the
reason for termination, if known, with the notification for termination
of the guaranty. This information would provide the Coast Guard with
information about the COFR Operator that otherwise would not be known
in the event there is an incident.
Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
The additional collection of information in the proposed rule would
ensure the information the Coast Guard relies on when initially issuing
a COFR is up to date and remains current--especially concerning vessels
that, over time, become derelict while in U.S. navigable waters or U.S.
Exclusive Economic Zone. The proposed revisions would also improve the
Coast Guard's ability to establish compliance with COFR regulations by
more effectively ensuring that the responsible party is able to pay its
liability and mitigate risks to the OSLTF. For example, if a vessel is
sold while using a place subject to U.S. jurisdiction, the new
responsible parties become immediately subject to the COFR program.
These proposed changes would ensure that, while the Coast Guard still
has regulatory authority over a responsible party and the financial
assurances of the guarantor, the Coast Guard receives information
material to continued compliance before problems arise. Enforcing
compliance with the COFR program's requirements, however, depends on
the Coast Guard knowing about the vessel transfer. The proposed
regulatory revisions seek to ensure that the Coast Guard receives this
information and to mitigate the risk of uninsured responsible parties
and derelict vessels.
Proposed Use of Information:
Reporting of gross tonnage measurement systems used and
[[Page 28816]]
submission of copy of the tonnage certifying document, upon request.
The Coast Guard would use the additional collection of information
in the proposed rule to ensure that the gross tonnage of a vessel
involved in an incident is accurate to determine its limit of liability
and applicable amount of financial responsibility.
Reporting of reason for termination of guaranty by a guarantor.
The Coast Guard would use the additional collection of information
in the proposed rule to learn more about a vessel and its COFR
Operators in the event of an incident. Adding a new requirement to
provide the reason for guaranty termination will reduce the possibility
that a guarantor would cancel the guaranty to simply shield themselves
from potential liability in the event of an incident.
Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
The Coast Guard would use the additional collection of information
in the proposed rule to identify a responsible party in the event there
is an incident.
Description of the Respondents: The respondents are COFR Operators
of vessels and OPA 90 COFR insurance guarantors.
Number of Respondents: The additional collection of information in
this proposed rule would affect 761 COFR Operators and 14 OPA 90 COFR
insurance guarantors.
Frequency of Response:
Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document.
All COFR Operators, including those for the tank vessels greater
than 100 gross tons but less than or equal to 300 gross tons proposed
in this rule, would report the gross tonnage measurement systems used
when applying for a COFR. The Coast Guard's COFR database indicates
that there are 25,875 currently COFRed vessels. Adding the 481 COFRed
tank vessels greater than 100 gross tons but less than or equal to 300
gross tons proposed in Regulation Cost 1, and assuming the number of
COFRed vessels remains constant during the analysis period the total
number of COFRed vessels equals 26,356.
Master Certificate and Fleet Certificate holders would also be
required to provide the gross tonnage measurement systems used for the
largest vessel covered by the Application.
The Coast Guard estimated that COFR Operators would provide
information on \1/3\ of the vessels with COFRs each year due to the 3-
year cycle of the Application process.
Individual Certificates--The Coast Guard's COFR database indicates
that, currently, there are 25,875 COFRed vessels. Adding the 481 COFRed
tank vessels greater than 100 gross tons to 300 gross tons proposed in
Regulation Cost 1 equals 26,356 COFRed vessels.
26,356 COFRed vessels / 3 = 8,785 COFRed vessels per year that
would require the submission of the gross tonnage measurement systems
used.
Masters Certificates--According to the COFR database, there are
currently 8 Master Certificates.
8 Master Certificates / 3 = 3 Master Certificates per year that
would require the submission of the gross tonnage measurement systems
used for the largest vessel covered by the Application.
Fleet Certificates--According to the COFR database, there are
currently 12 Fleet Certificates.
12 Fleet Certificates / 3 = 4 Fleet Certificates per year that
would require the submission of the gross tonnage measurement systems
used for the largest vessel covered by the Application.
COFR Operators would also provide a copy of the tonnage certifying
document, upon request. We assume that the Coast Guard would request a
copy of the tonnage certifying document when there is an incident.
According to incident data from the Coast Guard's CIMS database, there
was an average of 12 incidents per year involving vessels with COFRs
and vessels that would be required to have COFRs under this proposed
rule over the five year period 2012-2017. We assume that for the
analysis period, the number of incidents will remain constant with this
average.
Reporting of reason for termination of guaranty by a guarantor.
Based on NPFC Vessel Certification Program data on the historical
number of annual notices of guaranty termination by guarantors, the
Coast Guard estimates that there will be 4,000 vessels per year for the
10-year analysis period.
Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
Based on NPFC Vessel Certification Program historical data, the
Coast Guard estimates that there will be 1,000 submissions on vessel
name changes and change in location when there is a change in ownership
per year.
Burden of Response:
Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document, upon request.
Reporting the gross tonnage measurement systems used with the
application and/or requests for COFR renewal would result in a
negligible burden (less than one minute of time) to the COFR Operator
and would be completed with the Application for or request for renewal
of the COFR.
Based on estimates received from COFR insurance guarantors who
would submit, upon request, a copy of the tonnage certifying document
on behalf of the COFR Operator, COFR Operators would require 15 minutes
(0.25 hours) per submission.
Reporting of reason for termination of guaranty by a guarantor.
The Coast Guard estimated that it will take 5 minutes (0.08 hours)
for the guarantor to add the reason why the guaranty was terminated to
the information they provide to the Coast Guard already when he or she
terminates a guaranty.
Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
The Coast Guard assumed that it will take an additional 5 minutes
(0.08 hours) per submission to provide additional information that is
not already required under the current rule.
Estimate of Total Annual Burden:
Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document, upon request.
As stated above in the cost benefit analysis section of the
preamble, we do not quantify the cost impact of reporting the gross
tonnage measurement systems used because it is negligible and is
provided as part of the Application and/or request for COFR renewal.
The cost burden associated with COFR Operators providing, upon
request, their tonnage certifying document is calculated as follows:
Number submissions per year x Number of hours x labor cost per
hour:
12 x 0.25 hours per submission = 3 hours
3 hours per year x $35.64 per hour = $107 per year
Reporting of reason for termination of guaranty by a guarantor.
Number of terminations per year x number of hours per submission x
labor cost per hour:
4,000 submissions per year x 0.08 hours per submission x $35.64 per
hour = $11,405 per year
Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
[[Page 28817]]
Number of submissions per year x number of hours per submission x
labor cost per hour:
1,000 submissions per year x 0.08 hours per submission x $35.64 per
hour = $2,851 per year
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.
We ask for public comment on the proposed collection of information
to help us determine, among other things--
How useful the information is;
Whether the information can help us perform our functions
better;
How we can improve the quality, usefulness, and clarity of
the information;
Whether the information is readily available elsewhere;
How accurate our estimate is of the burden of collection;
How valid our methods are for determining the burden of
collection; and
How we can minimize the burden of collection.
If you submit comments on the collection of information, submit
them by the date listed in the DATES section of this preamble to both
the OMB and to the docket where indicated under ADDRESSES.
You need not respond to a collection of information unless it
displays a currently valid control number from OMB. Before the Coast
Guard could 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 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 rulemaking is based on provisions in OPA 90 and CERCLA; 33
U.S.C. 2716 and 42 U.S.C. 9608, respectively. This proposed rule would
amend Coast Guard regulations on vessel evidence of financial
responsibility and remove certain unnecessary pollution fund
regulations. The OPA 90 contains a savings clause that saves to the
States the ability to regulate activities contained in Title I of OPA
90, including vessel evidence of financial responsibility requirements.
See 33 U.S.C. 2718; United States v. Locke and Intertanko v. Locke, 529
U.S. 89, 105, 120 S.Ct. 1135, 1146 (2000). Thus, nothing in this
proposed rule would preempt states from regulating vessel evidence of
financial responsibility requirements for oil pollution. However,
CERCLA contains an express preemption provision which prohibits States,
except under limited circumstances, from requiring vessels to establish
or maintain evidence of financial responsibility in connection with
liability for the release of a hazardous substance if those vessels
maintain evidence of the financial responsibility required under that
subchapter (42 U.S.C. 9614(d)). Thus, except under limited
circumstances, States cannot regulate requirements for vessel evidence
of financial responsibility requirements for hazardous material
pollution. The removal of 33 CFR part 135 and subpart D of part 153
would remove certain federal pollution fund's regulatory requirements
that were superseded by OPA 90 and subsumed by the OSLTF. As the
proposed rule clarifies but does not alter the existing, applicable
federal law relating to pollution funds, it would not have preemptive
impact. Therefore, this proposed rule is consistent with the
fundamental federalism principles and preemption requirements described
in Executive Order 13132.
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
CONTACT section of this preamble.
F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538,
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100 million (adjusted for
inflation) or more in any one year. Although this proposed rule would
not result in such an expenditure, we do discuss the effects of this
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 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;
[[Page 28818]]
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. This proposed rule would be
categorically excluded under paragraph L53 of Appendix A, Table 1 of
DHS Instruction Manual 023-01-001-01, Rev. 01. Paragraph L53 pertains
to congressionally mandated regulations designed to improve or protect
the environment. A preliminary Record of Environmental Consideration
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 involves expanding vessel
financial responsibility to include tank vessels greater than 100 gross
tons but less than or equal to 300 gross tons, clarifying and updating
the rule's reporting requirements, conforming the rule to current
practice, and removing two superseded regulations. We seek any comments
or information that may lead to the discovery of a significant
environmental impact from this proposed rule.
List of Subjects
33 CFR Part 135
Administrative practice and procedure, Continental shelf,
Insurance, Oil pollution, Reporting and recordkeeping requirements.
33 CFR Part 138
Hazardous materials transportation, Insurance, Oil pollution,
Reporting and recordkeeping requirements, Vessels, Water pollution
control.
33 CFR Part 153
Hazardous substances, Oil pollution, Reporting and recordkeeping
requirements, Water pollution control.
For the reasons discussed in the preamble, the Coast Guard proposes
to remove 33 CFR part 135, and to amend 33 CFR parts 138 and 153 as
follows:
PART 135--[REMOVED]
0
1. Remove part 135.
PART 138--EVIDENCE OF FINANCIAL RESPONSIBILITY FOR WATER POLLUTION
(VESSELS) AND OPA 90 LIMITS OF LIABILITY (VESSELS, DEEPWATER PORTS
AND ONSHORE FACILITIES)
0
2. The authority citation for part 138 is revised to read as follows:
Authority: 33 U.S.C. 2704, 2716, 2716a; 42 U.S.C. 9608, 9609; 6
U.S.C. 552(d); E.O. 12580, Sec. 7(b), 3 CFR, 1987 Comp., p. 193;
E.O. 12777, Secs. 4 and 5, 3 CFR, 1991 Comp., p. 351, as amended by
E.O. 13286, Sec. 89, 3 CFR, 2004 Comp., p. 166, and by E.O. 13638,
Sec. 1, 3 CFR, 2014 Comp., p.227; Department of Homeland Security
Delegation Nos. 0170.1 and 5110, Revision 01. Section 138.40 also
issued under the authority of 46 U.S.C. 2103 and 14302.
0
3. In part 138, revise the part heading to read as set out above; and
revise subpart A, consisting of Sec. Sec. 138.10 through 138.170, to
read as follows:
Subpart A -- Evidence of Financial Responsibility for Water Pollution
(Vessels)
Sec.
138.10 Scope and purpose.
138.20 Applicability.
138.30 Definitions.
138.40 General requirements.
138.50 How to apply vessel gross tonnages.
138.60 Forms and submissions; ensuring submission timeliness.
138.70 Issuance and renewal of COFRs.
138.80 Applying for COFRs.
138.90 Renewing COFRs.
138.100 How to calculate a total applicable amount.
138.110 How to establish and maintain evidence of financial
responsibility.
138.120 Fees.
138.130 Agents for Service of process. 138.140 Application
withdrawals, COFR denials and revocations.
138.150 Reporting requirements.
138.160 Non-owning COFR Operator's responsibility for
identification. 138.170 Enforcement.
Subpart A--Evidence of Financial Responsibility for Water Pollution
(Vessels)
Sec. 138.10 Scope and purpose.
(a) Scope. This subpart sets forth--
(1) The requirements and procedures each COFR Operator (as defined
in Sec. 138.30(b)) must use to establish and maintain the evidence of
financial responsibility required by the OPA 90 and CERCLA (both
defined in Sec. 138.30), and to obtain Certificates of Financial
Responsibility (COFR);
(2) The standards and procedures the Coast Guard uses to determine
the acceptability of guarantors;
(3) The procedures guarantors must use to submit evidence of
financial responsibility on behalf of the responsible parties for
vessels to which this subpart applies;
(4) The requirements for designating and maintaining U.S. agents
for service of process;
(5) The requirements for reporting changes affecting compliance
with this subpart; and
(6) The enforcement actions that may result from non-compliance
with this subpart or OPA 90, CERCLA, or both, referenced in paragraph
(a)(1) of this section.
(b) Purpose. These requirements ensure that the responsible parties
for vessels to which this subpart applies, have sufficient available
financial resources to cover their potential liabilities to the United
States and other claimants in the following scenarios:
(1) Under OPA 90 in the event of a discharge, or substantial threat
of a discharge, of oil; and
(2) In the case of vessels greater than 300 gross tons, under
CERCLA in the event of a release, or threatened release, of a hazardous
substance.
Sec. 138.20 Applicability.
(a) Applicability generally. This subpart applies--
(1) To the COFR Operator of--
(i) Any vessel over 300 gross tons (except a vessel listed in
paragraphs (d)(1) or (d)(2) of this section) using the navigable waters
of the United States, or any port or other place subject to the
jurisdiction of the United States, including any such vessel using a
deepwater port or other offshore facility subject to the jurisdiction
of the United States;
(ii) Any vessel of any size (except a vessel listed in paragraphs
(d)(1) or (d)(3) of this section) using the waters of the Exclusive
Economic Zone to transship or lighter oil (whether delivering or
receiving) destined for a place subject to the jurisdiction of the
United States; and
(iii) Any tank vessel over 100 gross tons (except a vessel listed
in paragraphs (d)(1) or (d)(3) of this section) using the navigable
waters of the United States, or any port or other place subject to the
jurisdiction of the United States, including any such tank vessel using
a deepwater port or other offshore facility subject to the jurisdiction
of the United States;
(2) To a guarantor providing evidence of financial responsibility
under this subpart on behalf of one or more of a vessel's responsible
parties;
[[Page 28819]]
(3) To responsible parties other than the COFR Operator designated
to represent the responsible parties for purposes of this subpart; and
(4) To any person serving as a U.S. agent for service of process
under this subpart.
(b) How to apply this part to mobile offshore drilling units. For
the purposes of applying the evidence of financial responsibility
required under OPA 90 and this subpart and the limits of liability set
forth in subpart B of this part, and in addition to any OPA 90 offshore
facility evidence of financial responsibility requirements that may
apply under 30 CFR part 553, a mobile offshore drilling unit is treated
as--
(1) A tank vessel when it is being used as an offshore facility;
and
(2) A vessel other than a tank vessel when it is not being used as
an offshore facility.
(c) How to apply CERCLA evidence of financial responsibility to
self-propelled vessels. For the purposes of applying the evidence of
financial responsibility required under CERCLA and for vessels
identified in paragraph (a)(1)(i) of this section, this subpart applies
to a self-propelled vessel over 300 gross tons even if it does not
carry hazardous substances.
(d) Exceptions. (1) This subpart does not apply to public vessels.
(2) Paragraph (a)(1)(i) of this section does not apply to any non-
self-propelled barge that does not carry oil as cargo or fuel and does
not carry hazardous substances as cargo.
(3) Paragraphs (a)(1)(ii) and (a)(1)(iii) of this section do not
apply to: any offshore supply vessel; any fishing vessel or fish tender
vessel of 750 gross tons or less that transfers fuel without charge to
a fishing vessel owned by the same person; any towing or pushing vessel
(tug) simply because it has in its custody a tank barge; or any tank
vessel that only carries, or is adapted to carry, non-liquid hazardous
material in bulk as cargo or cargo residue.
Sec. 138.30 Definitions.
(a) As used in this subpart, the following terms have the meanings
set forth in--
(1) OPA 90 (specifically in 33 U.S.C. 2701): claim, claimant,
damages, deepwater port, discharge, Exclusive Economic Zone, facility,
incident, liable or liability, mobile offshore drilling unit, navigable
waters, offshore facility, oil, owner or operator, person, remove,
removal, removal costs, responsible party, tank vessel, United States,
and vessel; and
(2) CERCLA (42 U.S.C. 9601): claim, claimant, damages, facility,
hazardous substance, liable or liability, navigable waters, offshore
facility, owner or operator, person, remove, removal, United States,
and vessel.
(3) 46 CFR 69.9: Convention Measurement System, foreign-flag
vessel, gross tonnage ITC (GT ITC) \1\ and gross register tonnage
(GRT), tonnage, and U.S.-flag vessel.
---------------------------------------------------------------------------
\1\ The acronym ``ITC'' refers to the International Tonnage
Convention. GT ITC, as defined in 46 CFR 69.9 means the gross
tonnage measurement of a vessel as applied under the Convention
Measurement System.
---------------------------------------------------------------------------
(b) As used in this subpart--
Applicable amount means an OPA 90 or CERCLA evidence of financial
responsibility amount determined to apply to a vessel as provided under
Sec. 138.100.
Application means an ``Application for Vessel Certificate of
Financial Responsibility (Water Pollution)'', which the COFR Operator
for one or more vessels has completed and verified in eCOFR, as
provided in Sec. 138.60(c)(1)(i), or signed, dated, and submitted to
the NPFC by one of the submission methods specified in Sec.
138.60(c)(1)(ii) through (c)(1)(iv).
Cargo means goods or materials carried on board a vessel for
purposes of transportation, whether proprietary or nonproprietary. A
hazardous substance or oil carried solely for use aboard the carrying
vessel is not cargo.
CERCLA means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601, et
seq.).
COFR means a current Certificate of Financial Responsibility (Water
Pollution) issued by the Director, under this subpart, as provided in
Sec. 138.70, and posted on the NPFC COFR program website https://npfc.uscg.mil/cofr/default.aspx.
COFR Operator means a responsible party who conducts, or has
responsibility for, the operation of a vessel to which this subpart
applies--that is, a person who is an operator as defined in OPA 90 and
CERCLA, and, when there is more than one responsible party (including
more than one operator), is the operator designated and authorized by
all the vessel's responsible parties to act on their behalf for the
purpose of complying with this subpart, including submitting (or
causing to be submitted) all Applications and requests for COFR
renewal, evidence of financial responsibility and reports, and payment
of all fees required by Sec. 138.120.
(1) If a vessel has one owner and is operated by that owner, or the
owner controls and is responsible for the vessel's operation, the owner
is the COFR Operator. In all other cases the person who operates, or
controls and is principally responsible for the operation of, the
vessel (for example, the demise charterer) is the COFR Operator.
(2) A person who is responsible, or who agrees by contract to
become responsible, for a vessel in the capacity of a builder,
repairer, or scrapper, or for the purpose of holding the vessel out for
sale or lease, is the COFR Operator. A person who takes possession of,
or responsibility for, a newly built, modified, or repaired vessel from
a builder or repairer, or who purchases and operates or becomes a
demise charterer of a vessel held out for sale or lease, is the COFR
Operator.
(3) A time or voyage charterer who does not assume responsibility
for the operation of a vessel is not a COFR Operator for purposes of
this subpart.
(4) The designation of an operator to act as the COFR Operator on
behalf of a vessel's responsible parties for purposes of this subpart
does not limit who may be determined to be an operator under OPA 90,
CERCLA, or both, in the event of an incident or a release.
Day or days means calendar days unless otherwise specified.
Director means the person in charge of the U.S. Coast Guard,
National Pollution Funds Center (NPFC), or that person's authorized
representative.
eCOFR means the electronic Certificate of Financial Responsibility
web-based process located on the NPFC COFR program website, https://npfc.uscg.mil/cofr/default.aspx, and is the process COFR Operators may
use to apply for and renew COFRs.
Evidence of financial responsibility means the demonstration of the
financial ability of the responsible parties for a vessel to which this
subpart applies to meet their potential liabilities under OPA 90,
CERCLA, or both, up to the total applicable amount determined as
provided under Sec. 138.100 of this subpart.
Financial guarantor is a type of guarantor and means a business
entity or other person providing a financial guaranty under Sec.
138.110(c). A financial guarantor is distinct from a COFR insurance
guarantor, a self-insurer, or a surety. A self-insurer, however, may
also serve as a financial guarantor for others.
Fish tender vessel and fishing vessel have the same meanings as set
forth in 46 U.S.C. 2101.
Fleet Certificate means a COFR issued by the Director under this
subpart to the COFR Operator of a fleet of 2 or more unmanned, non-
self-propelled barges
[[Page 28820]]
that are not tank vessels and that, from time to time, may be subject
to this subpart (for example, a hopper barge over 300 gross tons when
carrying oily metal shavings or similar cargo). A Fleet Certificate
covers, automatically, all unmanned, non-self-propelled, non-tank
barges for which the COFR Operator may from time to time be responsible
that does not exceed the maximum gross tonnage indicated on the Fleet
Certificate.
Fuel means any oil or hazardous substance used, or capable of being
used, to produce heat or power by burning, including power to operate
equipment. A hand-carried pump with no more than 5 gallons of fuel
capacity, that is neither integral to nor regularly stored aboard a
non-self-propelled barge, is not equipment.
Guarantor means any person who has been determined to be acceptable
by the Director, as provided in Sec. 138.110, and who is providing
evidence of financial responsibility on behalf of one or more of a
vessel's responsible parties, other than as a responsible party
providing self-insurance under Sec. 138.110(d).
Hazardous material has the same meaning as set forth in 46 U.S.C.
2101.
Individual Certificate means a COFR issued by the Director under
this subpart to the COFR Operator for a single vessel.
Insurance guarantor is a type of guarantor and means an insurance
company, association of underwriters, ship owners' protection and
indemnity association, or other person, serving as a guarantor under
Sec. 138.110(b). An insurance guarantor is distinct from a self-
insurer, a financial guarantor, or a surety.
Master Certificate means a COFR issued by the Director under this
subpart to the COFR Operator of one or more vessels that are under the
custody of such person solely in the capacity of a builder, repairer,
or scrapper, or for the purpose of holding vessels out for sale or
lease, where such person does not physically operate the vessels. A
Master Certificate covers, automatically, all of the vessels subject to
this subpart held by the COFR Operator solely for purposes of
construction, repair, scrapping, sale or lease. A vessel which is being
operated commercially in any business venture, including the business
of building, repairing, scrapping, leasing, or selling (for example, a
slop barge used by a shipyard) cannot be covered by a Master
Certificate and must have either a current Individual Certificate or,
if applicable, a current Fleet Certificate.
Net worth means the amount of all assets located in the United
States, less all liabilities anywhere in the world.
NPFC means the U.S. Coast Guard, National Pollution Funds Center.
NPFC is the U.S. Government office responsible for administering the
OPA 90 and CERCLA vessel COFR program.
Offshore supply vessel has the same meaning as set forth in 46
U.S.C. 2101.
OPA 90 means the Oil Pollution Act of 1990, as amended (33 U.S.C.
2701, et seq.).
Public vessel means a vessel owned or demise chartered and operated
by the United States, by a State or political subdivision thereof, or
by a foreign nation, except when the vessel is engaged in commerce.
Release, for purposes of this subpart, means a release as defined
in CERCLA (specifically, 42 U.S.C. 9601), or a threatened release, of a
hazardous substance.
Responsible party, for purposes of OPA 90 evidence of financial
responsibility, has the same meaning as defined at 33 U.S.C. 2701; and,
for purposes of CERCLA evidence of financial responsibility, means any
person who is an ``owner or operator,'' as defined at 42 U.S.C. 9601,
including any person chartering a vessel by demise.
Self-insurer means a COFR Operator providing evidence of financial
responsibility as the responsible party of the subject vessel, as
provided under Sec. 138.110(d). A self-insurer is distinct from a
guarantor.
Total applicable amount means an evidence of financial
responsibility amount that must be demonstrated under this subpart,
determined as provided in Sec. 138.100.
Working capital means the amount of current assets located in the
United States, less all current liabilities anywhere in the world.
Sec. 138.40 General requirements.
(a) Requirement to establish and maintain evidence of financial
responsibility. The COFR Operator of a vessel must establish and
maintain (or cause to be established and maintained) evidence of
financial responsibility acceptable to the Director using any one of
the methods specified in Sec. 138.110, in an amount equal to or
greater than the total applicable amount determined under Sec. 138.100
and, in the case of a financial guarantor, as further provided under
Sec. 138.110(c)(2) (aggregation of total applicable amounts). The
evidence of financial responsibility required by this paragraph must
be--
(1) Established as of the date they become a responsible party; and
(2) Continuously maintained for so long as they remain a
responsible party.
(b) Requirement to have a COFR and report changes. The COFR
Operator must apply for and ensure the vessel is covered at all times
by a current COFR, by complying with the requirements and procedures
set forth in this subpart, including the reporting requirements in
Sec. 138.150.
Sec. 138.50 How to apply vessel gross tonnages.
(a) Purpose. This section sets forth the methods for applying
vessel gross tonnage to--
(1) Determine whether a vessel exceeds the 100 or 300 gross ton
threshold under Sec. 138.20 and OPA 90, CERCLA, or both;
(2) Calculate the OPA 90 and CERCLA applicable amounts of financial
responsibility required, as provided in Sec. 138.100; and
(3) Determine the OPA 90 limit of liability under subpart B of this
part in the event of an oil pollution incident, and the CERCLA limit of
liability under 42 U.S.C. 9607 in the event of a hazardous substance
release.
(b) Both GT ITC and GRT assigned. For a vessel assigned both gross
tonnage ITC (GT ITC) and gross register tonnage (GRT) under 46 CFR part
69, apply the tonnage thresholds in Sec. 138.20 using the assigned GRT
tonnage, and determine the applicable amounts of financial
responsibility and the limits of liability using the assigned GT ITC
tonnage.
(c) GT ITC or GRT assigned. For a vessel assigned only a GT ITC or
a GRT tonnage under 46 CFR part 69, apply the tonnage thresholds in
Sec. 138.20, and determine the applicable amounts of evidence of
financial responsibility and the limits of liability using the assigned
GT ITC or GRT tonnage.
(d) High or low GRT assigned. For a vessel assigned a high and low
GRT tonnage under 46 CFR part 69, subpart D (Dual Regulatory
Measurement System), apply the tonnage thresholds in Sec. 138.20, and
determine the applicable amounts of financial responsibility and the
limits of liability, using the high GRT tonnage.
(e) Summary. The use of assigned gross tonnages, as required by
paragraphs (b) through (d) of this section, is summarized in the
following table.
[[Page 28821]]
Table 1 to Sec. 138.50--Use of Assigned Gross Tonnages
------------------------------------------------------------------------
Assigned tonnage
---------------------------------------
To determine
To apply the applicable
Category tonnage amounts under Sec.
thresholds in Sec. 138.100 and
138.20 limits of
liability
------------------------------------------------------------------------
Vessels Assigned Both GT ITC and GRT............... GT ITC.
GRT.
Vessels Assigned--
GT ITC only................. GT ITC............ GT ITC.
GRT only.................... GRT............... GRT.
------------------------------------------------------------------------
(f) Certified gross tonnage governs. In the event of an incident or
release, the responsible parties and guarantors are governed by the
vessel's assigned gross tonnage on the date of the incident. This is as
determined under paragraphs (b) through (e) of this section and
evidenced on the appropriate tonnage certifying document as provided
for under the U.S. tonnage regulations or international conventions
(for example, tonnage certificate or completed Simplified measurement
application, International Tonnage Certificate (1969)), regardless of
what gross tonnage is specified in the Application or guaranty form
submitted under this subpart, except when the responsible parties or
guarantors knew or should have known that the tonnage certificate
information was incorrect (see also Sec. 138.110(h)(1)(iii)).
(g) Requirement to present tonnage certifying document(s). Each
COFR Operator must submit to the Director, or other authorized United
States Government official, upon request, for examination and copying,
the original or an unaltered and legible electronic copy of the
vessel's applicable tonnage certifying document(s).
Sec. 138.60 Forms and submissions; ensuring submission timeliness.
(a) Where to obtain forms. All forms referred to in this subpart
are available at the NPFC COFR program website, https://npfc.uscg.mil/cofr/default.aspx, and may be completed online or downloaded.
(b) Where to obtain information. Direct all questions concerning
the requirements of this subpart to the NPFC at one of the addresses in
paragraphs (c)(1)(ii) through (iv) of this section or by calling the
NPFC at 202-795-6130.
(c) How to present Applications and other required submissions.
(1) Provide all submissions required by this subpart to the
Director, by one of the following four methods:
(i) Electronically, using the eCOFR process (located at https://npfc.uscg.mil/cofr/default.aspx);
(ii) By email, sent to such email address as the Director may
specify, attaching legible electronic images scanned in a format
acceptable to the Director;
(iii) By fax, sent to 202-795-6123 with a cover sheet specifying
the total number of pages, the sender's telephone number, and
referencing NPFC telephone number 202-795-6130; or
(iv) By mail, addressed to: Director, National Pollution Funds
Center; ATTN: VESSEL CERTIFICATION; U.S. Coast Guard Stop 7605; 2703
Martin Luther King Jr Ave SE; Washington, DC 20593-7605.
(2) Submissions may not be hand delivered to the NPFC.
(3) Do not present submissions by more than one method.
(d) Required contents of submissions. Unless otherwise instructed
by the Director, all submissions required by this subpart must--
(1) Set forth, in full, the correct legal name of the COFR Operator
to whom the COFR is to be, or has been, issued;
(2) Be in English, and
(3) Express all monetary terms in United States dollars.
(e) Ensuring the timeliness of submissions; requesting deadline
exceptions.
(1) Compliance with a submission deadline will be determined based
on the day the submission is received by NPFC. If a deadline specified
in this subpart falls on a weekend or Federal holiday, the deadline
will occur on the next business day.
(2) Ensuring the timeliness of the submissions is the sole
responsibility of the person making the submission.
(3) The Director may, in the Director's sole discretion, grant an
exception to a deadline specified in this subpart only upon written
request, submitted as provided in paragraph (c) and (d) of this
section, in advance of the deadline and for good cause shown. The
Director will not grant a deadline exception request that does not set
forth the reasons for the request and that does not give NPFC
sufficient time to consider and act on an Application or a request for
COFR renewal before the COFR is required.
(f) Public access to information. Financial data and other
information submitted to the Director is considered public information
to the extent required by the Freedom of Information Act (5 U.S.C. 552)
and permitted by the Privacy Act (5 U.S.C. 552(a)).
Sec. 138.70 Issuance and renewal of COFRs.
(a) Types of COFRs. The Director issues the following three types
of COFRs as provided further in Sec. 138.80: Individual Certificates,
Fleet Certificates and Master Certificates.
(b) Requirements before issuance and renewal of COFRs. The Director
will issue or renew a COFR only after NPFC receives a completed
Application or request for COFR renewal, and satisfactory evidence of
financial responsibility.
(c) COFRs are issued only to designated COFR Operators. Each COFR
of any type is issued only in the name of the COFR Operator designated
in the Application or request for COFR renewal.
(d) Form of issuance. All COFRs are issued by the Director in
electronic form on NPFC's COFR program website (https://npfc.uscg.mil/cofr/default.aspx) for a term of no more than 3 years from the date of
issuance.
(e) Information included in COFRs. The following information is
available on NPFC's COFR program website for each COFR issued by the
Director:
(1) The name of the COFR Operator;
(2) The date of COFR expiration;
(3) The COFR number;
(4) For an Individual Certificate, the name of the covered vessel,
and the vessel's gross tonnage information, including the measurement
system(s) used;
(5) For a Fleet Certificate, the gross tons of the largest
unmanned, non-self-propelled, non-tank barge within the fleet,
including the measurement systems(s) used; and
(6) For a Master Certificate, the gross tons of the largest tank
vessel and largest vessel other than a tank vessel eligible for
coverage by the Master Certificate, including the measurement
systems(s) used.
[[Page 28822]]
Sec. 138.80 Applying for COFRs
(a) How to apply for a COFR. To apply for a COFR of any type, the
COFR Operator must--
(1) Submit, or cause to be submitted, to the Director, by one of
the submission methods provided in Sec. 138.60(c):
(i) An Application;
(A) For an Individual Certificate, list the name of the covered
vessel, and the vessel's gross tonnage information, including the
measurement system(s) used on the application;
(B) For a Fleet Certificate, instead of listing each individual
barge, mark the box with the following statement: ``This is an
Application for a Fleet Certificate. The largest unmanned, non-self-
propelled, non-tank barge to be covered by this Application is [INSERT
APPLICABLE GROSS TONS] GT ITC and [INSERT GROSS TONNAGE] GRT''; and
(C) For a Master Certificate, instead of listing each individual
vessel, mark the box with the following statement: ``This is an
Application for a Master Certificate. The largest tank vessel to be
covered by this Application is [INSERT APPLICABLE GROSS TONS] GT ITC
and [INSERT APPLICABLE GROSS TONS] GRT, as applicable. The largest
vessel other than a tank vessel to be covered by this Application is
[INSERT APPLICABLE GROSS TONS] GT ITC and [INSERT APPLICABLE GROSS
TONS] GRT, as applicable.''
(ii) The evidence of financial responsibility using one of the
guaranty methods provided in Sec. 138.110;
(A) For a Fleet Certificate, the evidence of financial
responsibility must be in the total applicable amount, determined as
provided in Sec. 138.100, for the largest unmanned, non-self-
propelled, non-tank barge to be covered.
(B) For a Master Certificate, the evidence of financial
responsibility must be in the total applicable amount determined as
provided in Sec. 138.100 for the largest tank vessel and largest non-
tank vessel to be covered by the Master Certificate.
(iii) The agent for service of process designations required by
Sec. 138.130; and
(iv) All other supporting documentation required by this subpart.
(A) At the time of Application for a Master Certificate, the COFR
Operator must submit a report to the Director, indicating: The name;
previous name, if applicable; type; gross tonnage and measurement
system(s) used, for each vessel covered by the Master Certificate,
indicating which vessels, if any, are tank vessels. If a vessel has
both a GT ITC and GRT tonnage, specify both gross tonnages.
(B) Six months after receiving a Master Certificate, and every 6
months thereafter, each COFR Operator must submit to the Director, an
updated report, separately listing the vessels no longer covered by
that Master Certificate. If a vessel has both a GT ITC and GRT, both
gross tonnages must be specified. If a vessel has been transferred to
another responsible party and the COFR Operator to whom the Master
Certificate was issued ceases to be the vessel's operator, the COFR
Operator must report the date and place of the transfer, and the name
and contact information of the responsible party to whom the vessel was
transferred. If the vessels covered by the Master Certificate have not
changed from the previous report, the COFR Operator may submit an
updated report that indicates no change from previous report.
(2) Pay, or cause to be paid, all fees required by Sec. 138.120.
(b) Application deadline. The Director must receive the
Application, evidence of financial responsibility, and other required
supporting documentation, at least 21 days prior to the date the
Certificate is required. The COFR Operator may seek an exception to the
21-day submission deadline only as provided in Sec. 138.60(e)(3).
(c) Where to obtain Application forms. COFR Operators may create an
Application using the online eCOFR web process (located at https://npfc.uscg.mil/cofr/default.aspx) or, if not using eCOFR, may obtain an
``Application for Vessel Certificate of Financial Responsibility (Water
Pollution)'' at the same website.
(d) Requirement to verify, or sign and date, the Application. (1)
The COFR Operator must complete and either verify the Application in
eCOFR as provided in Sec. 138.60(c)(1)(i) or, if not using eCOFR, sign
and date the hard-copy signature page of the Application and submit the
signed Application to the Director, by one of the methods specified in
Sec. 138.60(c)(1)(ii)-(iv).
(2) The Application must include the title of the person signing
it.
(3) If the person signing the Application is acting under a Power
of Attorney, they must include a copy of the Power of Attorney with the
Application.
(e) Requirement to update Applications. The COFR Operator must
report any changes to the Application to the Director in writing, no
later than 5 business days after discovery of the change. The Director
may require that the COFR Operator submit a revised Application and
provide additional evidence of financial responsibility, and pay any
additional fees required by Sec. 138.120.
(f) Amending Fleet and Master Certificates. Before operating a
barge or vessel that exceeds the maximum gross tonnage indicated on the
COFR, the COFR Operator must:
(1) Submit a new or amended Application, or a written request to
supplement the Application, to reflect the new maximum gross tonnages
on the COFR;
(2) Unless the COFR Operator qualifies as a self-insurer at the
higher total applicable amount, submit, or cause to be submitted,
evidence of financial responsibility using one of the guaranty methods
provided in Sec. 138.110 to the Director, demonstrating increased
coverage based on the new maximum gross tonnage; and
(3) Pay a new certification fee, as required by Sec. 138.120.
Sec. 138.90 Renewing COFRs.
(a) The COFR Operator must submit a request for COFR renewal to the
NPFC at least 21 days, but no earlier than 90 days, before the
expiration date of the current COFR.
(b) The COFR Operator may seek an exception to the 21-day request
for COFR renewal submission deadline in paragraph (a) of this section
only as provided in Sec. 138.60(e)(3).
(c) The COFR Operator must identify in the request for COFR renewal
all changes to the information contained in the initial Application,
including the gross ton measurement system(s) used (if not previously
provided), the evidence of financial responsibility, and all other
supporting documentation previously submitted to the Director, as
provided in Sec. 138.150.
Sec. 138.100 How to calculate a total applicable amount.
The total applicable amount is the sum of the OPA 90 applicable
amount determined under paragraph (a) of this section plus the CERCLA
applicable amount determined under paragraph (b) of this section.
(a) OPA 90 applicable amount. The applicable amount under OPA 90 is
equal to the applicable limit of liability determined as provided in
subpart B of this part.
(b) CERCLA applicable amount. The applicable amount under CERCLA is
determined as follows:
(1) For a vessel over 300 gross tons carrying a hazardous substance
as cargo, and for any vessel covered under Sec. Sec. 138.110(c)(3) or
(d)(2)(ii) (calculation of CERCLA applicable amounts for financial
guarantors and self-insurers), the greater of $5,000,000 or $300 per
gross ton.
[[Page 28823]]
(2) For any other vessel over 300 gross tons, the greater of
$500,000 or $300 per gross ton.
(c) Amended applicable amounts. If an applicable amount determined
under paragraph (a) or (b) of this section is amended by statute or
regulation, the COFR Operator must establish and maintain evidence of
financial responsibility in an amount equal to or greater than the
amended total applicable amount, as provided in Sec. 138.240(a).
(d) OPA 90 and CERCLA applicable amounts and limits of liability.
The responsible parties are strictly, jointly and severally liable,
for the costs and damages resulting from an incident or a release, but
together they need only establish and maintain an amount of financial
responsibility equal to the single limit of liability per incident or
release. Only that portion of the evidence of financial responsibility
under this subpart with respect to--
(1) OPA 90 is required to be made available by a guarantor for the
costs and damages related to an incident where there is not also a
release; and
(2) CERCLA is required to be made available by a guarantor for the
costs and damages related to a release where there is not also an
incident. A guarantor (or a self-insurer for whom the exceptions to a
limitations of liability are not applicable), therefore, is not
required to apply the entire amount of financial responsibility to an
incident involving oil alone or a release involving a hazardous
substance alone.
Sec. 138.110 How to establish and maintain evidence of financial
responsibility.
(a) General requirement; guaranty effective date and termination
date. The COFR Operator of each vessel must submit, or cause to be
submitted, to the Director, the evidence of financial responsibility
required by Sec. 138.40(a) using one of the methods specified in this
section.
(1) If submitted on behalf of the COFR Operator, the guarantor must
provide evidence of financial responsibility to the Director.
(2) The effective and termination dates are as follows:
Table 2 to Sec. 138.110--Effective and Termination Dates
------------------------------------------------------------------------
Type of certificate Effective date Termination date
------------------------------------------------------------------------
Individual.................. Guaranty form 30 days after the
submission date. date the Director
and the COFR
Operator receive
written notice from
the guarantor that
the guarantor
intends to cancel
the guaranty for
that vessel.
Fleet....................... Guaranty form
submission date or
date COFR Operator
becomes a
Responsible Party
for the vessel.
Master...................... Guaranty form
submission date or
date COFR Operator
becomes a
Responsible Party
for the vessel.
------------------------------------------------------------------------
(3) Termination Provisions: (i) The guarantor must specify the
reason for terminating the guaranty in the notice required by this
paragraph, if known.
(ii) Termination of the guaranty as to any covered vessel will not
affect the liability of the guarantor in connection with an incident or
release commencing or occurring prior to the effective date of the
guaranty termination.
(4) If, at any time, the information contained in the evidence of
financial responsibility submitted under this section changes, or there
is a material change in a guarantor or self-insurer's financial
position, the guarantor or COFR Operator or self-insurer (as
applicable), must report the change to the Director, as provided in
Sec. 138.150.
(b) Insurance guaranty method. The COFR Operator may establish and
maintain evidence of financial responsibility using the insurance
guaranty method by submitting an Insurance Guaranty Form to the
Director.
(1) Each form must be executed by no more than four COFR insurance
guarantors accepted by the Director. A lead underwriter is considered
one of the COFR insurance guarantors.
(2) The process for establishing and maintaining the acceptability
of a COFR insurance guarantor is as follows:
(i) The COFR insurance guarantor must request an initial
determination by the Director of the COFR insurance guarantor's
acceptability to serve as a COFR insurance guarantor under this
subpart, at least 90 days before the date a COFR is required, by
submitting information describing the COFR insurance guarantor's
structure, business practices, history, and financial strength, and
such other information as may be requested by the Director.
(ii) The Director reviews the continued acceptability of COFR
insurance guarantors annually. Each COFR insurance guarantor must
submit updates to the initial request submitted under paragraph
(b)(2)(i) of this section, annually, within 90 days after the close of
the COFR insurance guarantor's fiscal year, describing any material
changes to the COFR insurance guarantor's legal status, structure,
business practices, history, and financial strength, since the previous
year's submission, and providing such other information as may be
requested by the Director.
(c) Financial guaranty method. The COFR Operator may establish and
maintain evidence of financial responsibility using the financial
guaranty method by submitting a Financial Guaranty Form to the
Director.
(1) Each form must be executed by no more than four financial
guarantors accepted by the Director, at least one of which must be a
parent or affiliate of the COFR Operator. (See paragraph (g) of this
section for additional requirements if more than one financial
guarantor signs the form.)
(2) The process for establishing and maintaining the acceptability
of a financial guarantor is as follows:
(i) The financial guarantor must comply with the self-insurance
provisions in paragraph (d) of this section, and the periodic reporting
requirements in paragraph (e)(1) through (4) of this section.
(ii) The financial guarantor must also demonstrate that it
maintains net worth and working capital, each in amounts equal to or
greater than--
(A) The aggregate total applicable amounts, calculated for each
COFR Operator vessel for which the financial guaranty is being
provided, based on each such COFR Operator's vessel with the greatest
total applicable amount, plus--
(B) The total applicable amount required to be demonstrated by a
self-insurer under this subpart if the financial guarantor is also
acting as a self-insurer.
(3) In the case of a vessel greater than 300 gross tons, calculate
the CERCLA applicable amount under Sec. 138.100(b)(1) based on a
vessel carrying hazardous substances as cargo.
[[Page 28824]]
(d) Self-insurance method. The COFR Operator may establish and
maintain evidence of financial responsibility using the self-insurance
method as follows:
(1) Submit to the Director the financial statements specified in
paragraphs (e)(1) through (4) of this section for the fiscal year
preceding the date the COFR Operator signs the Application or request
for COFR renewal.
(2) Demonstrate that the COFR Operator maintains, in the United
States, working capital and net worth, each in amounts equal to or
greater than the total applicable amount, calculated as follows:
(i) If the self-insurer has multiple vessels, calculate the total
applicable amount based on the vessel with the greatest total
applicable amount.
(ii) In the case of a vessel greater than 300 gross tons, calculate
the CERCLA applicable amount under Sec. 138.100(b)(1) based on a
vessel carrying hazardous substances as cargo.
(e) Reporting requirements for self-insurers and financial
guarantors. (1) Each self-insurer and financial guarantor must submit
the following reports to the Director with the Application and annually
thereafter, within the deadlines specified in paragraph (e)(4) of this
section:
(i) Submit the self-insurer or financial guarantor's annual,
current, and audited non-consolidated financial statements prepared in
accordance with Generally Accepted Accounting Principles, and audited
by an independent Certified Public Accountant in accordance with
Generally Accepted Auditing Standards.
(ii) Accompany the financial statements with a declaration from the
self-insurer or financial guarantor's chief financial officer,
treasurer, or equivalent official, certifying the amount of the self-
insurer or financial guarantor's current assets, and the amount of the
self-insurer or financial guarantor's total assets included in the
accompanying balance sheet, which are located in the United States.
(iii) If the financial statements cannot be submitted in non-
consolidated form, submit a consolidated statement accompanied by an
additional declaration prepared by the same Certified Public
Accountant--
(A) Verifying the amount by which the total assets located in the
United States exceed the self-insurer or financial guarantor's total
(worldwide) liabilities, and the self-insurer or financial guarantor's
current assets located in the United States exceed the self-insurer or
financial guarantor's total (worldwide) current liabilities;
(B) Specifically naming the self-insurer or financial guarantor;
(C) Confirming that the amounts so verified relate only to the
self-insurer or financial guarantor, apart from any parent or other
affiliated entity; and
(D) Identifying the consolidated financial statement to which it
applies.
(2) When the self-insurer or financial guarantor's demonstrated net
worth is not at least ten times the cumulative total applicable
amounts, their chief financial officer, treasurer, or equivalent
official must submit to the Director with the Application and semi-
annually thereafter, within the deadline specified in paragraph (e)(4)
of this section, an affidavit stating that neither their working
capital nor net worth fell during the first 6 months of the self-
insurer or financial guarantor's current fiscal year, below the
cumulative total applicable amounts.
(3) All self-insurers and financial guarantors must--
(i) Submit, upon the Director's request, additional financial
information within the time specified; and
(ii) Notify the Director in writing within 5 days following the
date the self-insurer or financial guarantor knows, or has reason to
know, that its working capital or net worth has fallen below the total
applicable amounts.
(4) All required annual financial statements and declarations must
be submitted to the Director within 90 days after the close of the
self-insurer or financial guarantor's fiscal year. All required semi-
annual financial statements and declarations must be submitted to the
Director within 30 days after the close of the applicable 6-month
period. The Director will grant an extension of the time limits for
submissions under this paragraph only as provided in Sec. 138.60(e).
(5) A failure by a self-insurer or financial guarantor to timely
submit to the Director any statement, data, notification, or other
submission required may result in the Director denying or revoking the
COFR, and may prompt enforcement action as provided under Sec.
138.170.
(6) The Director may waive the working capital requirement for any
self-insurer or financial guarantor that--
(i) Is a regulated public utility, a municipal or higher-level
governmental entity, or an entity operating solely as a charitable,
non-profit organization qualifying under the Internal Revenue Code (26
U.S.C. 501(c)), provided that the self-insurer or financial guarantor
demonstrates in writing that the waiver would benefit a local public
interest; or
(ii) Demonstrates in writing that working capital is not a
significant factor in the self-insurer or financial guarantor's
financial condition, in which case the self-insurer or financial
guarantor's net worth in relation to the required cumulative total
applicable amounts, and a history of stable operations, are the major
elements considered by the Director.
(f) Other guaranty methods for establishing evidence of financial
responsibility. (1) The COFR Operator may request that the Director
accept a guaranty method for establishing evidence of financial
responsibility that is different from one of the methods described in
paragraphs (b) through (e) of this section as follows:
(i) The COFR Operator must submit the request to the Director in
writing, at least 90 days prior to the date the COFR is required.
(ii) The request must describe in detail: The method proposed; the
reasons why the COFR Operator does not wish to (or is unable to) use
one of the methods described in paragraphs (b) through (e); and how the
proposed guaranty method assures that the vessel's responsible parties
have the financial ability to meet their potential liabilities under
OPA 90 and CERCLA in the event of an incident or a release.
(iii) Each COFR Operator making a request under this paragraph must
provide the Director a proposed guaranty form that includes all the
elements described in paragraphs (g) and (h) of this section.
(2) The Director will not accept a self-insurance method other than
the one described in paragraph (d) of this section. The Director also
will not accept a guaranty method under this paragraph that merely
deletes or alters a requirement or provision of one of the guaranty
methods described in paragraphs (b) through (e) of this section (for
example, one that alters the termination clause of the Insurance
Guaranty).
(3) A Director's decision to accept an alternative guaranty method
of establishing evidence of financial responsibility under this
paragraph is final agency action.
(g) Additional rules regarding multiple guarantors. If more than
one guarantor executes the relevant guaranty form, the following rules
apply:
(1) If a guarantor's percentage of vertical participation is
specified on the relevant guaranty form, the guarantor is subject to
direct action and is liable for the payment of costs and damages under
OPA 90 or CERCLA, as applicable, only in accordance with the percentage
of vertical participation so specified for that guarantor.
[[Page 28825]]
(2) Participation in the form of layering (tiers, one in excess of
another) is not permitted. Only vertical participation on a percentage
basis and participation with no specified percentage allocation is
acceptable.
(3) If no percentage of vertical participation is specified for a
guarantor on the relevant guaranty form, the guarantor's liability is
joint and several for the total of the unspecified portion.
(4) The participating guarantors must designate a lead guarantor
having authority to bind all of the participating guarantors for
actions required of guarantors under OPA 90 or CERCLA and this subpart,
including but not limited to reporting changes in the evidence of
financial responsibility as provided in Sec. 138.150(d), receipt of
source designations, advertisement of source designations and the
responsible party's claims procedures, and receipt and settlement of
claims.
(h) Direct action. (1) Each guarantor providing evidence of
financial responsibility must submit to the Director a written
acknowledgment by the guarantor that a claimant (including a claimant
by right of subrogation) may assert any claim for costs or damages
arising under OPA 90, CERCLA, or both, directly against the guarantor,
regardless of whether the claim is asserted in an action in court or
other proceeding. The guarantor must also acknowledge that, in the
event a claim is asserted directly against the guarantor under OPA 90,
CERCLA, or both, the guarantor may invoke only the following rights and
defenses--
(i) The incident, release, or both, were caused by the willful
misconduct of a responsible party for whom the guaranty was provided;
(ii) All rights and defenses, which would be available to the
responsible party under OPA 90, CERCLA, or both, as applicable;
(iii) A defense that the amount of the claim, or all claims
asserted with respect to the same incident or release, whether asserted
in court or in any other proceeding, exceeds the amount of the
guaranty, except when the guaranty is based on the gross tonnage of the
vessel (instead of the statutory minimums) and the guarantor knew or
should have known that the applicable tonnage certificate was incorrect
(see Sec. 138.50(f)); and
(iv) The claim is not one made under OPA 90, CERCLA, or both.
(2) Except when the guaranty is based on the gross tonnage of the
vessel (instead of the statutory minimums) and the guarantor knew or
should have known that the evidence of financial responsibility or
applicable tonnage certificate is incorrect (see Sec. 138.50(f)), a
guarantor who provides evidence of financial responsibility under this
subpart will be liable, with respect to any one incident or release, or
both, as applicable, only for the amount of costs and damages specified
in the evidence of financial responsibility.
(3) A guarantor will not be considered to have consented to direct
action under any law other than OPA 90 or CERCLA, or to unlimited
liability under any law or in any venue, solely because the guarantor
has provided evidence of financial responsibility under this subpart.
(4) In the event of any finding that the liability of a guarantor
under OPA 90 or CERCLA exceeds the amount of the guaranty provided
under this subpart, that guaranty is considered null and void with
respect to that excess.
(i) Process upon disapproval of guarantor. If the Director intends
to disapprove or revoke the approval of a guarantor (for example, due
to the guarantor's change in financial position), the Director will
notify the COFR Operator of the need to establish new evidence of
financial responsibility within a specified period.
(1) If the COFR Operator establishes, or causes to be established,
new acceptable evidence of financial responsibility within the period
specified by the Director in the notice, the Application if otherwise
complete will be approved or the COFR will remain in effect, and the
COFR Operator will not have to pay a new Application fee or
certification fee.
(2) If the COFR Operator fails to establish, or cause to be
established, new acceptable evidence of financial responsibility within
the period specified by the Director in the notice, the Director may
deny or revoke the COFR and, if revoked, the COFR Operator will have to
apply for a new COFR and pay a new certification fee. The COFR
Operator's failure to establish, or cause to be established, new
acceptable evidence of financial responsibility within the period
specified by the Director may also result in enforcement as provided
under Sec. 138.170.
Sec. 138.120 Fees.
(a) Fee payment methods. Each COFR Operator applying for a COFR, or
requesting a COFR renewal, must pay the fees required by paragraphs (b)
and (c) of this section as follows:
(1) All fees required by this section must be paid in United States
dollars.
(2) For COFR Operators using eCOFR as provided under Sec.
138.60(c)(1)(i), credit card payment is required.
(3) For COFR Operators submitting Applications and requests for
COFR renewal under Sec. 138.60(c)(1)(ii)-(iv) (email, fax, and mail
submissions), the fees must be paid by a check, cashier's check, draft,
or postal money order, made payable to the ``U.S. Coast Guard''. Cash
payments will not be accepted.
(i) For Applications and requests for COFR renewal submitted under
Sec. 138.60(c)(1)(ii) and (iii) (email and fax submissions,
respectively), all fee payments must be received by the Director no
later than 21 days following submission of the Application or request
for COFR renewal.
(ii) For Applications and requests for COFR renewal submitted under
Sec. 138.60(c)(1)(iv) (mail submissions), all fee payments must be
enclosed with the Application or request for COFR renewal.
(4) Any failure to timely pay the fees required by this section may
result in COFR denial or revocation, debt collection (see 6 CFR part
11, 44 CFR part 11, and 31 CFR parts 285, and 900 through 904), and
such other enforcement under Sec. 138.170 as may be appropriate.
(b) Application fee. (1) Except as provided in paragraph (b)(2),
the COFR Operator must pay a non-refundable Application fee of $200 for
each Application submitted under this subpart (for each Application for
one or more Individual Certificates, for a Fleet Certificate, or for a
Master Certificate).
(2) An Application fee is not required when the COFR Operator
submits--
(i) a request for an additional Individual Certificate under an
existing Application;
(ii) a request to amend an Application;
(iii) a request for Certificate renewal; or
(iv) a request to reinstate a Certificate, if submitted within 90
days following the Certificate's revocation.
(c) Certification fees. In addition to the Application fees
required by paragraph (b) of this section, each COFR Operator who
submits an Application or request for COFR renewal must pay the
following certification fees:
(1) $100 for each vessel listed in, or added to, an Application for
one or more Individual Certificates;
(2) $100 for each Application for a Fleet Certificate or Master
Certificate; and
(3) $100 for each request for renewal of an Individual Certificate,
a Fleet Certificate or a Master Certificate.
(d) Fee refunds. (1) A certification fee will be refunded, upon
receipt by the Director of a written request, if the
[[Page 28826]]
Application or request for COFR renewal is denied by the Director, or
if the Application is withdrawn by the COFR Operator before the
Director issues the COFR.
(2) Overpayments of Application and certification fees will be
refunded to the COFR Operator.
Sec. 138.130 Agents for Service of process.
(a) Designation of U.S. agents for service of process. Each COFR
Operator and guarantor must designate on the forms submitted a person
located in the United States as its U.S. agent for service of process
and (in the event of an incident, a release, or both) for receipt of
notices of source designation, claims presented under OPA 90, CERCLA,
or both, and lawsuits brought under OPA 90, CERCLA, or both.
(b) U.S. agent for service of process acknowledgment. Each U.S.
agent for service of process designated under paragraph (a) must
acknowledge the agency designation in writing unless the agent has
already submitted a written master (that is, blanket) agency
acknowledgment to the Director showing that the agent has agreed in
advance to act as the U.S. agent for service of process for the COFR
Operator or guarantor in question.
(c) How to change the U.S. agent for service of process. A COFR
Operator or guarantor may change a designated U.S. agent for service of
process, at any time and for any reason, by submitting a new U.S. agent
for service of process designation in accordance with the procedure in
paragraph (a), and by causing the new U.S. agent for service of process
to submit the agency acknowledgment required by paragraph (b).
(d) Replacement of unavailable U.S. agent for service of process.
In the event a designated U.S. agent for service of process becomes
unavailable at any time, for any reason, the COFR Operator or guarantor
must designate a new U.S. agent for service of process in accordance
with the procedures in paragraph (a), within 5 days of the COFR
Operator or guarantor becoming aware of such unavailability. In
addition, the new U.S. agent for service of process must submit to the
Director the agency acknowledgment required by paragraph (b).
(e) Service on the Director. If a designated U.S. agent for service
of process cannot be served, then service of process on the Director,
as provided in this paragraph, will constitute valid service of process
on the COFR Operator or guarantor. Service of process on the Director
will not be effective unless the server--
(1) Has sent a copy of each document served on the Director to the
COFR Operator or guarantor, as applicable, by registered mail, at the
COFR Operator or guarantor's last known address on file with the
Director;
(2) Indicates, at the time process is served upon the Director,
that the purpose of the mailing is to effect service of process on the
COFR Operator or guarantor; and
(3) Provides evidence acceptable to the Director at the time
process is served upon the Director, that service was attempted on the
designated U.S. agent for service of process but failed, stating the
reasons why service on the U.S. agent for service of process was not
possible, and that the document was sent to the COFR Operator or
guarantor, as required by paragraph (e)(1).
Sec. 138.140 Application withdrawals, COFR denials and revocations.
(a) Application withdrawal. A COFR Operator may withdraw an
Application at any time prior to issuance of the COFR.
(b) Application denials and COFR revocations. The Director may deny
an Application or revoke a COFR, and the United States may initiate
enforcement under Sec. 138.170, for any failure to comply with the
requirements of this subpart, including--
(1) If the COFR Operator, or other person acting on the COFR
Operator's behalf, makes a false statement in, or in connection with,
any submission required by this subpart;
(2) If the COFR Operator, or other person acting on the COFR
Operator's behalf, fails to establish or maintain acceptable evidence
of financial responsibility, as required by this subpart;
(3) If the COFR Operator fails to pay the Application and
certification fees required by Sec. 138.120;
(4) If the COFR Operator or guarantor fails to designate and
maintain a U.S. agent for service of process as required by Sec.
138.130;
(5) If the COFR Operator, or other person acting on the COFR
Operator's behalf, fails to comply with, or respond to, lawful
inquiries, regulations, or orders of the U.S. Coast Guard pertaining to
the activities subject to this subpart;
(6) If the COFR Operator, or other person acting on the COFR
Operator's behalf, fails to timely report information required to be
reported to the Director under this subpart, including failing to
timely submit to the Director statements, data, financial information,
notifications, affidavits, or other submissions required by this
subpart; or
(7) If the Director obtains information indicating that the
Application should be denied or that a new COFR is required (for
example, a permanent vessel transfer, new COFR Operator, vessel
renaming, guaranty termination, disapproval of a guarantor).
(c) Procedure for reinstating COFRs following termination of
guaranties. If a COFR is revoked by the Director under paragraph (b)(2)
of this section based on the expiration of 30 days following the date
the Director receives a guarantor's notice of termination as provided
under Sec. Sec. 138.110(a)(3) and 138.150(d), the Director may
reinstate the COFR if the guarantor promptly notifies the Director
following the revocation that the guarantor rescinded the termination
and that there was no gap in guarantor coverage.
(d) Notice to COFR Operator of intent to deny an Application or
revoke a COFR. If the Director obtains information indicating that an
Application should be denied or that a COFR should be revoked for
reasons that the COFR Operator may not be aware of, the Director will
notify the COFR Operator, in writing, stating the reason for the
intended action.
(1) A notice from the Director that an Application is incomplete
will be considered a denial unless the Application is completed by the
COFR Operator within the period specified in the notice. A COFR subject
to revocation remains valid until the COFR is revoked as provided in
Sec. 138.140(d)(2) and (3).
(2) If the Director issues a notice of intent to deny an
Application or revoke a COFR due to a violation under paragraph (b) of
this section, the COFR Operator may demonstrate compliance to the
Director in writing by no later than the date specified by the Director
in the notice. If the COFR Operator demonstrates compliance by that
date, the Application will remain under consideration, and any current
COFR will remain in effect, unless and until the Director issues a
written decision denying the Application or revoking the COFR, as
applicable. Otherwise, the Application denial or COFR revocation is
effective as of the date specified by the notice.
(3) The denial of an Application or revocation of a COFR does not
terminate the guaranty.
(e) Request for reconsideration. (1) A COFR Operator may ask the
Director to reconsider a denial of the COFR Operator's Application or
the revocation of a COFR as follows:
(i) The COFR Operator must submit the request for reconsideration,
in writing, to the Director no later than 21
[[Page 28827]]
days after the date of the denial or revocation.
(ii) The submission must state the COFR Operator's reasons for
requesting reconsideration and include all supporting documentation.
(2) A decision by the Director on reconsideration of an Application
denial or a COFR revocation is final agency action. If the Director
does not issue a written decision on the request for reconsideration
within 30 days after its submission, the request for reconsideration
will be deemed to have been denied, and the Application denial or COFR
revocation will be deemed to have been affirmed as a matter of final
agency action. Unless the Director issues a decision reversing the
revocation, the COFR revocation remains in effect.
(f) Duty to remedy violations. If the COFR for a vessel expires or
is revoked while the vessel is located in the navigable waters, at any
port or other place subject to the jurisdiction of the United States,
or in the Exclusive Economic Zone, the COFR Operator and the vessel's
other responsible parties will be deemed in violation of this subpart.
In such event, the COFR Operator or, if unavailable or no longer
operating the vessel, the vessel's current responsible parties, must
notify the Director within 24 hours, by email or other electronic
means. The notice must include the information required by Sec.
138.150(b) and must establish new evidence of financial responsibility,
designate a new COFR Operator if applicable, and cure any other
violation of this subpart.
Sec. 138.150 Reporting requirements.
(a) Report Changes of submitted information. When there is a change
in any of the facts contained in an Application, a request for COFR
renewal, evidence of financial responsibility, or other submission made
under this subpart, the change must be reported, in writing, to the
Director. The reports required by this section may be submitted with,
but are in addition to, other submissions required by this subpart (for
example, Applications, requests for COFR renewal, semi-annual and
annual financial reports, Master Certificate reports).
(b) A 21-day prior reporting requirement of permanent vessel
transfers and other changes requiring issuance of a new COFR. Current
COFR Operators of vessels, and owners or operators of vessels not
currently in U.S. navigable waters or the U.S. Exclusive Economic Zone,
must report to the Director, and (if applicable) to the guarantor, the
following information, no later than 21 business days before the new
COFR is required:
(1) The number of the current COFR;
(2) The name of the covered vessel;
(3) The type of change planned;
(4) The date the change will take place;
(5) The reason for the change;
(6) For a vessel that will be located in U.S. navigable waters or
U.S. Exclusive Economic Zone on the date the change is scheduled to
take place, where the vessel will be located on that date (for example,
name and location of port);
(7) For a vessel name change, the vessel's new legal name;
(8) For the planned transfer of a vessel to a new responsible
party, and even if the transferee's intent is to scrap or otherwise
dispose of the vessel, the name and contact information of the
responsible party to whom the vessel is being transferred;
(9) For a change of COFR Operator, the name and contact information
of the person who will replace the COFR Operator; and
(10) Any other changes in the information previously submitted to
ensure the information on record at the NPFC is current.
(c) Three-day prior reporting of changes not requiring issuance of
a new COFR. In addition to the prior reporting required by paragraph
(b) of this section, the COFR Operator must report any change to
information contained in a submission to the Director that does not
require issuance of a new COFR, by no later than 3 business days before
implementing the change, including, but not limited to: Changes to the
U.S. agent for service of process (other than termination), a change of
a non-operator vessel owner, new contact information, and changes in
vessel particulars (for example, flag, measurement, type, and scheduled
vessel scrapping).
(d) Reporting by guarantors. Each guarantor (or, if there are
multiple guarantors, each lead guarantor) must give the Director 30
days notice before terminating a guaranty as provided in Sec.
138.110(a)(3), explaining the reason for the intended termination. In
addition, each guarantor (or, if there are multiple guarantors, each
lead guarantor) must give the Director notice by email or other
electronic means as soon as possible before any other change occurs
that would require new evidence of financial responsibility or issuance
of a new COFR under paragraph (b) of this section.
(e) Enforcement; deadline exceptions. A failure to timely submit
the reports required by this section may result in enforcement actions
as provided in Sec. 138.170. Exceptions to the reporting deadlines
will only be granted as provided in Sec. 138.60(e).
Sec. 138.160 Non-owning COFR Operator's responsibility for
identification.
(a) Each COFR Operator of a vessel with a COFR, other than an
unmanned, non-self-propelled barge, who is not also an owner of the
vessel must ensure that the original or a legible copy of the vessel's
demise charter-party (or other written document on the owner's
letterhead, signed by the vessel owner, which specifically identifies
the COFR Operator named on the COFR) is maintained on board the vessel.
(b) The demise charter-party or other document required by
paragraph (a) of this section must be presented, upon request, for
examination and copying, to the Director or other United States
Government official.
Sec. 138.170 Enforcement.
(a) Any person who fails to comply with the requirements of this
subpart, including the reporting requirements in Sec. 138.150, may be
subject to enforcement as provided in this section, including if--
(1) The COFR Operator fails to maintain acceptable evidence of
financial responsibility as required;
(2) The name of a covered vessel is changed without reporting the
change to the Director as required in Sec. 138.150;
(3) The COFR Operator ceases, for any reason, to be an operator of
a covered vessel, including when a vessel is scrapped or transferred to
a new owner or operator, and a new Application and report have not been
submitted to the Director as required by Sec. Sec. 138.80 and 138.150;
or
(4) The COFR Operator fails to maintain a U.S. agent for service of
process.
(b) During a period of non-compliance with this subpart, all use by
the vessel of the navigable waters of the United States, of any port or
other place subject to the jurisdiction of the United States, or of the
Exclusive Economic Zone to transship or lighter oil destined for a
place subject to the jurisdiction of the United States, is forbidden.
(c) Withholding and revoking vessel clearance. The Secretary of the
Department of Homeland Security will withhold or revoke the clearance
required by 46 U.S.C. 60105 of any vessel subject to this subpart that
does not have a COFR or for which the evidence of financial
responsibility required has not been established and maintained.
(d) Denying vessel entry, and detention. The U.S. Coast Guard may
[[Page 28828]]
deny entry to any port or other place in the United States or the
navigable waters, and may detain at any port or other place in the
United States in which it is located, any vessel subject to this
subpart, which does not have a COFR or for which the evidence of
financial responsibility required by this subpart has not been
established and maintained.
(e) Seizure and forfeiture. In accordance with OPA 90, any vessel
subject to this subpart which is found in the navigable waters without
a COFR, or for which the necessary evidence of financial responsibility
has not been established and maintained as required, is subject to
seizure by, and forfeiture to, the United States.
(f) Administrative and judicial penalties and other relief.
(1) Any person who fails to comply with the requirements of this
subpart or the evidence of financial responsibility requirements of OPA
90, CERCLA, or both, including a failure to comply with the reporting
requirements in Sec. 138.150, is subject to civil administrative and
judicial penalties under OPA 90 and CERCLA, as applicable. In addition,
under OPA 90, the Attorney General may secure such relief as may be
necessary to compel compliance with OPA 90 and this subpart, including
termination of operations.
(2) Under 18 U.S.C. 1001, any person making a false statement in,
or in connection with, a submission under OPA 90 or CERCLA or this
subpart is subject to prosecution.
(3) Any person who fails to timely pay the fees required by Sec.
138.120 or any other amounts due under OPA 90 or CERCLA or this subpart
may also be subject to Federal debt collection under 6 CFR part 11, 44
CFR part 11 and 31 CFR parts 285, and 900 through 904.
PART 153--CONTROL OF POLLUTION BY OIL AND HAZARDOUS SUBSTANCES,
DISCHARGE REMOVAL
0
4. The authority citation for part 153 continues to read as follows:
Authority: 14 U.S.C. 633; 33 U.S.C. 1321, 1903, 1908; 42 U.S.C.
9615; 46 U.S.C. 6101; E.O. 12580, 3 CFR, 1987 Comp., p. 193; E.O.
12777, 3 CFR, 1991 Comp., p. 351; Department of Homeland Security
Delegation No. 0170.1.
Sec. Sec. 153.401 through 153.417 (Subpart D) [Removed]
0
5. In part 153, remove subpart D, consisting of Sec. Sec. 153.401
through 153.417.
Dated: April 14, 2020.
Thomas G. Allan,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Resources.
[FR Doc. 2020-08159 Filed 5-12-20; 8:45 am]
BILLING CODE 9110-04-P
