[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 Financial Responsibility--Vessels; Superseded Pollution Funds; 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Financial Responsibility--Vessels; Superseded Pollution Funds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.

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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.
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    \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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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
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        Current COFR regulations            Proposed COFR regulations
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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.
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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.
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    \2\ ``Measurement of Vessels'' final rule (81 FR 18701, March 
31, 2016).
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    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\
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    \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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    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
---------------------------------------------------------------------------

    \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\
---------------------------------------------------------------------------

    \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