

[Federal Register: February 5, 2008 (Volume 73, Number 24)]
[Proposed Rules]               
[Page 6642-6657]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe08-29]                         

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 138

[USCG 2005-21780]
RIN 1625-AA98

 
Financial Responsibility for Water Pollution (Vessels) and OPA 90 
Limits of Liability (Vessels and Deepwater Ports)

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to amend the regulatory requirements, 
under the Oil Pollution Act of 1990 and the Comprehensive Environmental 
Response, Compensation and Liability Act, for vessel operators to 
establish and maintain evidence of financial responsibility. The 
amendments would ensure the amounts of financial responsibility 
demonstrated are consistent with recent statutory increases, and future 
mandated increases, in the limits of liability under the Oil Pollution 
Act of 1990. The amendments would also implement changes in the Coast 
Guard's administration of the certificate of financial responsibility 
program, and would clarify the current rule.

DATES: Comments and related material must reach the Docket Management 
Facility on or before May 5, 2008. Comments sent to the Office of 
Management and Budget (OMB) on collection of information must reach OMB 
on or before May 5, 2008.

ADDRESSES: You may submit comments identified by Coast Guard docket 
number USCG-2005-21780 to the Docket Management Facility at the U.S. 
Department of Transportation. To avoid duplication, please use only one 
of the following methods:
    (1) Online: http://www.regulations.gov.

    (2) Mail: Docket Management Facility (M-30), U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590-0001.
    (3) Hand delivery: Room W12-140 on the Ground Floor of the West 
Building, 1200 New Jersey Avenue, SE., Washington, DC 20590 between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The 
telephone number is 202-366-9329.
    (4) Fax: 202-493-2251.
    You must also send comments on collection of information to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget. To ensure that the comments are received on time, the preferred 
method is by e-mail at nlesser@omb.eop.gov or fax at 202-395-6566. An 
alternate, though slower, method is by U.S. mail to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street, NW., Washington, DC 20503, ATTN: Desk Officer, U.S. 
Coast Guard.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed 
rule, call Benjamin White, National Pollution Funds Center, Coast 
Guard, telephone 202-493-6863. If you have questions on viewing or 
submitting material to the docket, call Renee V. Wright, Program 
Manager, Docket Operations, telephone 202-366-9826.

SUPPLEMENTARY INFORMATION:

I. Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting 
comments and related materials. All comments received will be posted, 
without change, to http://www.regulations.gov and will include any 

personal information you have provided. We have an agreement with the 
Department of Transportation (DOT) to use the Docket Management 
Facility. Please see DOT's ``Privacy Act'' paragraph below.

A. Submitting Comments

    If you submit a comment, please include the docket number for this 
rulemaking (USCG-2005-21780), indicate the specific section of this 
document to which each comment applies, and give the reason for each 
comment. We recommend that you include your name and a mailing address, 
an e-mail address, or a phone number in the body of your document so 
that we can contact you if we have questions regarding your submission. 
For example, we may ask you to resubmit your comment if we are not able 
to read your original submission. You may submit your comments and 
material by electronic means, mail, fax,

[[Page 6643]]

or delivery to the Docket Management Facility at the address under 
ADDRESSES; but please submit your comments and material by only one 
means. If you submit them by mail or delivery, submit them in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. If you submit them by mail and would 
like to know that they reached the Facility, please enclose a stamped, 
self-addressed postcard or envelope. We will consider all comments and 
material received during the comment period. We may change this 
proposed rule in view of them.

B. Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble 
as being available in the docket, go to http://www.regulations.gov at 

any time, click on ``Search for Dockets,'' and enter the docket number 
for this rulemaking (USCG-2005-21780) in the Docket ID box, and click 
enter. You may also visit the Docket Management Facility in Room W12-
140 on the ground floor of the DOT West Building, 1200 New Jersey 
Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.

C. Privacy Act

    Anyone can search the electronic form of all comments received into 
any of our dockets by the name of the individual submitting the comment 
(or signing the comment, if submitted on behalf of an association, 
business, labor union, etc.). You may review the Department of 
Transportation's Privacy Act Statement in the Federal Register 
published on April 11, 2000 (65 FR 19477), or you may visit http://DocketsInfo.dot.gov
.


D. Public Meeting

    We do not now plan to hold a public meeting. But you may submit a 
request for one to the Docket Management Facility at the address under 
ADDRESSES explaining why one would be beneficial. If we determine that 
one would aid this rulemaking, we will hold one at a time and place 
announced by a later notice in the Federal Register.

II. Background and Purpose

    Under the Oil Pollution Act of 1990, as amended (OPA 90), at 33 
U.S.C. 2702, responsible parties for a vessel or facility from which 
oil is discharged, or which poses the substantial threat of a discharge 
of oil, into or upon the navigable waters or adjoining shorelines or 
the exclusive economic zone, are jointly and severally liable for 
specified removal costs and damages up to prescribed limits of 
liability. Similar requirements apply to owners and operators of 
vessels and facilities under 42 U.S.C. 9607 of the Comprehensive 
Environmental Response, Compensation and Liability Act (CERCLA). The 
OPA 90 limits of liability are set out in 33 U.S.C. 2704, and pursuant 
33 U.S.C. 2704(d)(4) are subject to amendment by regulation issued not 
less often than every three years to reflect significant increases in 
the Consumer Price Index. The CERCLA limits of liability are set out in 
42 U.S.C. 9607, and are not subject to Consumer Price Index 
adjustments.
    In addition, 33 U.S.C. 2716(a) of OPA 90 and 42 U.S.C. 9608(a) of 
CERCLA require that responsible parties of certain vessels establish 
and maintain evidence of financial responsibility (i.e., ability to 
pay) sufficient to meet the maximum amount of liability to which they 
could be subjected under 33 U.S.C. 2704 and 42 U.S.C. 9607.\1\ 
According to 33 U.S.C. 2716(a)(1) and (2), those requirements apply, in 
relevant part for purposes of OPA 90, to responsible parties for: Any 
vessel over 300 gross tons (except a non-self propelled vessel that 
does not carry oil as cargo or fuel) using any place subject to the 
jurisdiction of the United States; and any vessel using the waters of 
the exclusive economic zone to transship or lighter oil destined for a 
place subject to the jurisdiction of the United States.
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    \1\ OPA 90 also imposes evidence of financial responsibility 
requirements on offshore facilities and deepwater ports, at 33 
U.S.C. 2716(c). These regulations, however, only concern the OPA 90 
evidence of financial responsibility requirements applicable to 
vessels under 33 U.S.C. 2716(a).
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    On July 11, 2006, the President signed the Delaware River 
Protection Act of 2006 (Title VI of the Coast Guard and Maritime 
Transportation Act of 2006) (Pub. L. 109-241) (DRPA). Section 603 of 
DRPA amended the OPA 90 limits of liability for vessels at 33 U.S.C. 
2704(a). The new OPA 90 limits of liability were effective for non-tank 
vessels on July 11, 2006 and for tank vessels on October 9, 2006.\2\
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    \2\ See, ``New Oil Pollution Limits of Liability for Vessels-
Delaware River Protection Act of 2006 Amendment to the Oil Pollution 
Act of 1990'' (71 FR 47737, August 18, 2006).
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    The following table shows the original and amended OPA 90 limits of 
liability by vessel type:

                OPA 90 Vessel Limits of Liability \3, 4\
------------------------------------------------------------------------
                                  The original limit
                                  of liability limit   The amended limit
       If the vessel is a           was the greater     of liability is
                                         of--          the greater of--
------------------------------------------------------------------------
Tank vessel greater than 3,000    $1,200 per gross    $3,000 per gross
 gross tons with a single hull,    ton or              ton or
 with double sides only, or with   $10,000,000.        $22,000,000.
 a double bottom only.
Tank vessel less than or equal    $1,200 per gross    $3,000 per gross
 to 3,000 gross tons with a        ton or $2,000,000.  ton or
 single hull, with double sides                        $6,000,000.
 only, or with a double bottom
 only.
Tank vessel greater than 3,000    $1,200 per gross    $1,900 per gross
 gross tons with a double hull.    ton or              ton or
                                   $10,000,000.        $16,000,000.
Tank vessel less than or equal    $1,200 per gross    $1,900 per gross
 to 3,000 gross tons with a        ton or $2,000,000.  ton or
 double hull.                                          $4,000,000.
Any vessel other than a tank      $600 per gross ton  $950 per gross ton
 vessel.                           or $500,000.        or $800,000.
------------------------------------------------------------------------

     
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    \3\ Source: 33 U.S.C. 2704(a) as now in effect, and immediately 
prior to amendment by Pub. L. 109-241, Section 603.
    \4\ Although, both the amended and original versions of 33 
U.S.C. 2704(a) distinguish between vessels on the basis of gross 
tonnage and whether they are tank vessels, the statute as amended by 
DRPA Section 603 now also distinguishes between single and double 
hulled tank vessels.
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    On August 18, 2006, we published a Notice of Policy in the Federal 
Register (71 FR 47737) entitled ``New Oil Pollution Limits of Liability 
for Vessels--Delaware River Protection Act of 2006 Amendment to the Oil 
Pollution Act of 1990''. In this notice, we explained:

[[Page 6644]]

     That the OPA 90 limits of liability for vessels have been 
changed effective July 11, 2006 for non-tank vessels, and effective 
October 9, 2006 for tank vessels;
     The amounts of the new OPA 90 vessel limits;
     That the OPA 90 proof of financial responsibility 
requirements for vessels at 33 CFR part 138 would stay at existing 
levels until changed by rulemaking; and
     That a rulemaking project would be initiated to require 
vessel owners and operators to provide evidence of financial 
responsibility under 33 CFR part 138 to the amended OPA 90 limits of 
liability.
    As a result of the 2006 changes to the OPA 90 vessel limit of 
liability provisions, this rulemaking was initiated to ensure the 
ability of responsible parties to meet their potential liability limit 
under OPA 90, as specified in 33 U.S.C. 2704, in the event of an 
incident. In order to provide the necessary consistency between the new 
OPA 90 vessel limits of liability and the vessel evidence of financial 
responsibility requirements, we propose to amend the applicable amount 
provisions for OPA 90 at Sec.  138.80(f)(1).\5\
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    \5\ This rulemaking would not change the applicable amounts for 
vessels under CERCLA at 42 U.S.C. 9607(c) and Sec.  138.80(f)(2).
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    Section 603(b) of the DRPA also amended 33 U.S.C. 2704(d)(4) of OPA 
90, adding a requirement that the President adjust the OPA 90 limits of 
liability specified in 33 U.S.C. 2704(a) within three years following 
enactment of DRPA and not less than every 3 years thereafter to reflect 
significant increases in the Consumer Price Index. The requirement to 
adjust the OPA 90 limits of liability for vessels and deepwater ports 
has been delegated to the Director, National Pollution Funds Center, 
United States Coast Guard. Therefore, to facilitate future updates to 
the CFR, we propose dividing part 138 of the CFR into two subparts, 
with the current rule appearing under subpart A, adding a new subpart B 
to set forth the OPA 90 limits of liability for both vessels and 
deepwater ports, and deleting the specifically enumerated OPA 90 
applicable amounts for vessels from Sec.  138.80(f)(1).
    In addition, we propose to eliminate the requirement in Sec.  
138.65 that an original Certificate of Financial Responsibility 
(Certificate or COFR), or an authorized copy thereof, be carried aboard 
covered vessels. Improved technology now enables the Coast Guard to 
view vessel COFRs electronically, which is more cost effective than 
tasking inspectors to view a paper Certificate on board each vessel.
    The proposed rule would also increase the COFR application and 
certification fees found in Sec.  137.130. Existing fee amounts were 
established in 1994 in the interim rule entitled ``Financial 
Responsibility for Water Pollution (Vessels)'' (59 FR 34210). A final 
rule was subsequently published in 1996 entitled ``Financial 
Responsibility for Water Pollution (Vessels)'' (61 FR 9264) which did 
not change the fee amounts established in the interim rule. These 
proposed fee increases approximate the fluctuations to the Consumer 
Price Index occurring as a result of inflation since 1994.
    Finally, we propose a conforming revision to the definition of 
``owner'' in Sec.  138.20 to reflect amendments to OPA 90 by the Coast 
Guard and Maritime Transportation Act of 2004 (Pub. L. 108-293) (the 
2004 Act).

III. Discussion of Proposed Rule

    Throughout proposed Part 138, regulatory provisions have been 
rewritten using plain language when necessary to clarify the rule. 
These revisions are not intended to change substantive requirements, 
and are only discussed when helpful to explain substantial revisions 
resulting from this proposed rule.
    Part 138. The word ``subpart'' would be substituted for ``part'', 
as appropriate, throughout to reflect the proposal to divide the rule 
into two subparts. References to ``appendices to this part'' have been 
deleted throughout. (See discussion of Appendices A-F below).
    Section 138.10. We propose to revise the introductory paragraph to 
clarify the statutory background of the rule for the reader. The 
revision includes references to the requirements, in OPA section 1016 
and CERCLA section 108, that responsible parties establish and maintain 
evidence of financial responsibility sufficient to cover specified 
amounts of liability arising under those acts.
    The revised section also reiterates the requirement, in Sec.  
138.80 of the existing and proposed regulations, that responsible 
parties establish and maintain evidence of financial responsibility 
equal to the total applicable amount. For more information on the total 
applicable amount, see proposed Sec.  138.80, particularly paragraphs 
(a) and (f).
    Section 138.15. We propose removing all of the content of existing 
Sec.  138.15, entitled ``Implementation Schedule'' and replacing it 
with the applicability provisions currently located at Sec.  138.12. 
The language that would be removed from Sec.  138.15 is associated with 
the phase-in requirements established by the interim rule entitled 
``Financial Responsibility for Water Pollution (Vessels)'' (59 FR 
34210), which was published in the Federal Register on July 1, 1994, 
and reiterated in a final rule published in the Federal Register on 
March 7, 1996 (61 FR 9264). Because the phase-in was completed on 
December 27, 1997, this language is obsolete.
    Section 138.15(a)(2). This part of the proposed rule would correct 
a typographical error. The current regulation, at Sec.  138.12(a)(2), 
states that it applies to ``A vessel * * * except--(i) A vessel that is 
300 gross tons or less; and (ii) A non-self-propelled barge that does 
not carry oil as cargo or fuel and does not carry hazardous substances 
as cargo.'' We would revise this section to state ``A vessel * * * 
except --(i) A vessel that is 300 gross tons or less; or (ii) A non-
self-propelled barge that does not carry oil as cargo or fuel and does 
not carry hazardous substances as cargo.'' Correction of this 
typographical error is necessary to eliminate confusion concerning 
which vessels are subject to the regulation. Other proposed changes to 
the wording of current Sec.  138.12 (proposed Sec.  138.15) are 
editorial clarifications.
    Section 138.20. The current references in Sec.  138.20(a)(1) to 
Sec.  138.10(b)(1), and in Sec.  138.20(a)(2) to Sec.  138(b)(2) are 
incorrect due to a typographical error. They should read Sec. Sec.  
138.10(a) and (b) respectively. The proposed rule would correct this 
error.
    Additionally, the following changes would be made to the 
definitions in this section:
    The proposed revisions to Sec.  138.20 would clarify that 
modifications to terms defined in OPA 90 and CERCLA apply only for 
purposes of the subpart A evidence of financial responsibility 
requirements and do not modify responsible party liability under 
statute.
    Several terms used in this regulation are defined terms in OPA 90 
and CERCLA, but are not currently listed in 33 CFR 138.20(a). We 
therefore propose adding the terms ``claim'', ``liable'', 
``liability'', ``offshore facility'', ``owner or operator'', and 
``security interest''.
    The definition of Certificate would be modified to reflect that all 
COFRs would be issued by NPFC, and that the COFR will be issued in 
electronic format. A responsible party may print copies of the COFR for 
recordkeeping purposes.
    The definition of ``Owner'' would be modified to reflect a recent 
amendment to OPA 90 which states, similar to CERCLA, that an owner does 
not include a person who, without

[[Page 6645]]

participating in the management of a vessel, holds indicia of ownership 
primarily to protect the owner's security interest in the vessel.
    We also propose adding new definitions for ``applicable amount'', 
``day or days'', ``E-COFR'', ``financial guarantor'' and ``responsible 
party'' to clarify terms used in the current and proposed rule, as 
follows:
    The term ``Applicable amount'' refers to an amount calculated 
pursuant to either Sec.  138.80(f)(1) (OPA 90) or Sec.  138.80(f)(2) 
(CERCLA), and would be defined to distinguish the term from the defined 
term ``Total Applicable Amount''. Technical corrections have been 
proposed throughout the rule to ensure the two terms are used as 
intended.
    The terms ``day'' or ``days'' would be added to clarify how 
deadlines are calculated under the rule.
    The term ``E-COFR'' would be defined to refer the reader to the 
web-based process on NPFC's Web site for operators to apply for and 
renew Certificates.
    The term ``financial guarantor'' would be defined to clarify that a 
financial guarantor is a particular type of guarantor, and is distinct 
from an insurer, a self-insurer or a surety.
    In the definition of ``insurer'', we propose changing ``Coast 
Guard'' to ``Director, NPFC'' because NPFC has been delegated 
responsibility for vessel certification.
    We also propose to revise the definition of ``Master Certificate'', 
to make it consistent with Sec.  138.110(a) of the current and proposed 
rule, by including the word ``lessor'' in the list of eligible persons.
    The term ``responsible party'' would be defined by reference to OPA 
90 and CERCLA to clarify its meaning when used in the rule. We would 
also, when appropriate and helpful to improve readability, replace 
references to owners, operators and demise charterers by the term 
responsible party.
    We propose to amend the definition of ``guarantor'' to clarify, 
consistent with OPA 90 and CERCLA, that a responsible party is not a 
guarantor, and to incorporate the newly defined term ``responsible 
party.''
    The Hazardous Material definition of the current rule has a 
typographical error in its citation of the Federal Water Pollution 
Control Act. The current regulation references ``33 U.S.C. 1221''. It 
should read ``33 U.S.C. 1321''. The proposed rule would correct this 
error.
    Section 138.30. We propose moving the last sentence of Sec.  
138.30(b), which provides that a ``time or voyage charter that does not 
assume responsibility for the operation of a vessel is not considered 
an operator,'' to the definition of the term ``Operator''. All other 
changes to Sec.  138.30 are editorial.
    Section 138.40. This section of the proposed rule would inform the 
public where to obtain the forms that now appear in the appendices of 
part 138.
    Section 138.45. This section, currently Sec.  138.40 of the rule, 
would be amended by adding a statement that COFR applications may be 
submitted electronically using E-COFR found on NPFC's Web site.
    Section 138.50. The proposed rule would add the words ``for good 
cause shown'', to clarify the standard the Coast Guard now applies to 
grant extensions.
    Section 138.60. The proposed rule would add language referring 
applicants to the instructions for obtaining COFR application forms at 
Sec. Sec.  138.40 and 138.45.
    Section 138.65. Due to recent technological improvements, the Coast 
Guard is now able to efficiently enforce these regulations using 
electronic means. Therefore, this proposed rule would remove the 
requirement in Sec.  138.65 that hard-copy COFRs be carried aboard 
vessels. The proposed rule would also provide in this section that 
COFRs will be issued by NPFC in electronic form. The rule would also 
provide that a copy of the Certificate may be downloaded from NPFC's 
web-site. Elsewhere in Sec.  138.140(e) the rule would provide that 
copies may not be altered, and may not be used following expiration or 
revocation for anything other than recordkeeping purposes.
    Section 138.70. The proposed rule would add language to paragraph 
(a) of this section permitting operators to use the E-COFR Web site for 
COFR renewal requests. The proposal would also clarify in paragraph (a) 
that the requirements in Sec.  138.60 requiring that applications be in 
English and that all monetary terms be expressed in U.S. dollars also 
apply to requests for renewal.
    Additionally, paragraph (c) of this section of the current rule 
would be removed. The phase-in of the prior financial responsibility 
regulations was completed on December 27, 1997. Therefore, this 
paragraph is no longer applicable. For further information concerning 
the previous phase-in, see the discussion in this preamble of Sec.  
138.15.
    Section 138.80(f)(1). Section 603(b) of DRPA amended 33 U.S.C. 
2704(d) by adding a requirement that the President update the limits of 
liability specified in 33 U.S.C. 2704(a) by regulation within three 
years following enactment of the 2006 amendments, and preserved the 
requirement for such updates not less often than every 3 years to 
reflect significant increases in the Consumer Price Index. This 
authority to update the limits of liability for vessels and deepwater 
ports was subsequently delegated to the Coast Guard. To facilitate 
future updates to the CFR, this paragraph would be amended to inform 
readers that the OPA 90 evidence of financial responsibility applicable 
amounts are equal to the limits of liability for vessels referenced in 
new subpart B.
    This approach is proposed to simplify the process of updating 
vessel OPA 90 financial responsibility applicable amounts and limits of 
liability. For example, when an adjustment in the OPA 90 limits of 
liability is required to reflect a change in the Consumer Price Index, 
only subpart B of the proposed regulations would require revision. In 
contrast, continuing to state financial responsibility amounts in this 
section would necessitate amending this section as well as the limits 
of liability in new subpart B.
    The Coast Guard considered the possibility of adding the adjusted 
OPA 90 limits of liability to Sec.  138.80(f), or removing that 
paragraph entirely and stating limits of liability and financial 
responsibility applicable amounts in a new section. The former 
alternative was not preferred because the current Sec.  138.80(f) also 
contains provisions concerning the CERCLA evidence of financial 
responsibility requirements, and a paragraph containing all of these 
provisions would be unnecessarily confusing. Removal of this paragraph 
was also not preferred because doing so would unnecessarily entail a 
reorganization of part 138 to relocate the CERCLA provisions.
    The limitations contained in current Sec.  138.80(f)(1) concerning 
gross tonnage, cargo, jurisdiction and vessel use would be removed from 
that paragraph, but would continue in force through Sec.  138.15 of the 
proposed rule.
    Section 138.85. This new section of the proposed rule would 
establish an implementation schedule that would apply to the increased 
applicable amounts in Subpart B of this proposed rule, and whenever the 
financial responsibility applicable amounts under Subpart B are amended 
by regulation. This would occur in instances including, but not limited 
to, future regulatory changes mandated by statute, and when the limits 
of liability in proposed subpart B of this Part are amended to reflect 
significant increases in the Consumer Price Index pursuant to 33 U.S.C. 
2704(d)(4).

[[Page 6646]]

    Sections 138.90, 138.110 and 138.120. As discussed in this preamble 
in relation to Sec.  138.65, the proposed rule would remove the 
requirement to carry the COFR in hard-copy onboard the vessel. 
Provisions requiring such carriage, as well as requirements for copies 
of COFRs to be notarized, and for operators to return COFRs to NPFC 
under certain circumstances are no longer applicable and we propose 
that they be deleted from these sections. Operators may download copies 
of COFRs. Elsewhere, however, Sec.  138.140(e) of the rule would 
continue to provide that the use of altered copies is prohibited, and 
although copies would no longer need to be returned to NPFC, the rule 
would add that copies may not be used following expiration or 
revocation for anything other than recordkeeping purposes.
    Section 138.130. The proposed rule would add a provision to Sec.  
138.130(b) requiring payment with a credit card by those seeking to 
make fee payments using E-COFR.
    In addition Sec.  138.130(c) has been rewritten to clarify when an 
application fee is required to be paid to the NPFC.
    As discussed in this preamble in relation to Sec. Sec.  138.15 and 
138.70, we propose to remove Sec.  138.70(c) of the current rule, and 
references to it, because it is no longer applicable. References to 
Sec.  138.70(c) would, therefore, also be deleted from Sec.  138.130.
    This proposed rule would also amend Sec.  138.130 to increase the 
COFR application fees from $150 to $200 and the COFR certification fees 
from $80 to $100. These proposed fee increases approximate the 
fluctuations to the Consumer Price Index occurring as a result of 
inflation since 1994, the year the current fees were established, and 
are not anticipated to result in significant economic cost to those 
affected. See the Preliminary Regulatory Evaluation at http://www.regulations.gov
 under docket number USCG 2005-21780 for an analysis 

of economic impacts associated with these proposed increases.
    We also propose amending Sec.  138.130(c) for clarity and to 
conform the rule to NPFC's policy of waiving application fees when new 
applications are submitted within 90 days following a revocation or 
other invalidation of a Certificate.
    Section 138.140. The proposed rule would revise Sec.  138.140 to 
clarify its provisions, explain the repercussions of non-compliance and 
facilitate enforcement of the evidence of financial responsibility 
requirements of this regulation through electronic methods in order to 
improve efficiency. Additionally, the Homeland Security Act of 2002 
(Pub. L. 107-296, 116 Stat. 2178) revised 46 U.S.C. App. 91 by 
substituting the Secretary of Homeland Security for the Customs Service 
and the Secretary of the Treasury, and that section was recodified at 
46 U.S.C. 60105. Accordingly, we propose to update the reference to 46 
U.S.C. App. 91 in Sec.  138.140(b).
    Subpart B. Section 603(b) of the DRPA amended 33 U.S.C. 2704(d)(4) 
adding a requirement that the President update the limits of liability 
specified in 33 U.S.C. 2704(a) by regulation within three years 
following enactment of DRPA, and preserved the requirement for such 
updates not less often than every 3 years thereafter to reflect 
significant increases in the Consumer Price Index. This authority to 
update the limits of liability for vessels and deepwater ports was 
subsequently delegated to the Coast Guard. To facilitate such updates, 
Sec.  138.80(f)(1) would be amended to inform readers that the OPA 90 
vessel financial responsibility applicable amounts are equal to the 
limits of liability for vessels referenced in new subpart B. This 
approach will enable regulatory revision of both the limits of 
liability and the financial responsibility amounts through amendment of 
subpart B.
    The limits of liability contained in 33 U.S.C. 2704 would be set 
forth in new subpart B, consisting of new Sec. Sec.  138.200, 138.210, 
and 138.220, to facilitate future Consumer Price Index adjustments. As 
explained in the ``Background and Purpose'' section above, the OPA 90 
vessel limits of liability would be set forth in subpart B at the 
increased amounts pursuant to the DRPA. The limit of liability for the 
Louisiana Offshore Oil Port would be set forth at the existing amount, 
$62,000,000, which was established pursuant to 33 U.S.C. 2704(d)(2)(C) 
by a final rule published in the Federal Register on August 4, 1995 (60 
FR 39849). The limit of liability for all other deepwater ports would 
also be set forth at subpart B at the existing amount, $350,000,000, 
pursuant to 33 U.S.C. 2704(a)(4).
    Appendices A-F. We propose to delete the appendices of forms from 
the regulations. Instead, as explained in the preamble discussion of 
Sec.  138.40, the proposed rule would, where appropriate, refer readers 
to the forms by form number and would provide street and internet 
addresses where forms could be obtained.

IV. Regulatory Evaluation

    We developed this proposed rule after considering numerous statutes 
and executive orders related to rulemaking. Below we summarize our 
analysis based on 13 of these statutes and executive orders.

A. Executive Order 12866

    This proposed rule is not a ``significant regulatory action'' under 
section 3(f) of Executive Order 12866, Regulatory Planning and Review, 
and does not require an assessment of potential costs and benefits 
under section 6(a)(3) of that Order. The Office of Management and 
Budget has not reviewed it under that Order.
    A draft Regulatory Evaluation is available in the docket where 
indicated under the ``Public Participation and Request for Comments'' 
section of this preamble. A summary of the Evaluation follows:
    There are two regulatory costs that are expected to result from 
this proposed rule:
    Regulatory Cost 1: The proposed rule would increase the cost to 
responsible parties associated with application for and certification 
of COFRs. This proposed rule would increase the cost per application 
from $150 to $200 and the cost per certification from $80 to $100. We 
estimate that there will be 1,600 COFR applications submitted per year 
and 8,600 COFR certifications submitted per year for the foreseeable 
future. The aggregated annual increase in cost due to these fee 
increases would be approximately $252,000 per year.
    Regulatory Cost 2: The proposed rule would increase the cost 
associated with establishing financial responsibility under 33 CFR 138. 
This would occur in two ways: responsible parties using commercial 
insurance as their method of guaranty would incur higher insurance 
premiums; and, responsible parties using self-insurance as their method 
of guaranty would need to seek out and acquire commercial insurance for 
vessels they operate that would no longer be eligible for self-
insurance based on their working capital and net worth.
    There are approximately 16,982 vessels using commercial insurance 
and 823 vessels using self insurance methods of guaranty. The 10-year 
present value of this regulatory cost at a 3% discount rate would be 
between $73.8 Million and $83.4 Million. The 10-year present value of 
this regulatory cost at a 7% discount rate would be between $63.3 
Million and $71.9 Million. The ranges reflect two vessel profiles that 
were developed and analyzed separately to account for the uncertainty, 
due to data gaps, of when existing single hulled tank vessels would be 
phased out.

[[Page 6647]]

    The 10-year present value of the total cost of the proposed rule 
(Regulatory Cost 1 + Regulatory Cost 2) at a 3% discount rate would be 
between $76 Million and $85.6 Million. The 10-year present value of the 
total cost of the proposed rule (Regulatory Cost 1 + Regulatory Cost 
2--) at a 7% discount rate would be between $65.2 Million and $73.8 
Million.
    This proposed rule would result in two benefits: First, the rule 
would align the financial responsibility amounts for vessels in 33 CFR 
with the amended statutory limits of liability under OPA 90. This will 
ensure the ability of responsible parties to meet their maximum 
liability limit under OPA 90, as specified in 33 U.S.C. 2704, in the 
event of an incident. Second, the rule would eliminate the burden on 
owners and operators of maintaining COFRs onboard vessels.

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 where 
indicated under the ``Public Participation and Request for Comments'' 
section of this preamble.
    In this analysis, we researched vessel operator size and revenue 
data using public and proprietary business databases. We then 
determined which entities were small based on the U.S. Small Business 
Administration's criteria as they pertain to business size standards 
for all sectors of the North American Industry Classification System 
(NAICS).
    There are an estimated 600 small entities that would be affected by 
this proposed rule. It was found that 82 distinct NAICS codes were 
represented in the population of small entities (of which 32 contained 
more than 5 entities). Increases in insurance premiums would result in 
an average annual cost of $523 per vessel. Increases in self-insurer 
costs would result in an average annual cost of $7,200 per vessel. 
Increases in COFR application fees would result in an average annual 
cost of $12 per vessel.
    Of the small entities impacted, 92 percent would experience an 
annual economic impact that is less than 1 percent of their annual 
sales. Furthermore, 98 percent of the small entities would experience 
an economic impact less than 3 percent of their total sales. Two 
percent would experience an annual economic impact that is equal to or 
greater than 3 percent of their annual sales and none would experience 
an annual economic annual impact greater than 10 percent of their 
annual sales. Based on this analysis, we believe that implementation of 
this proposed rule would not have a significant economic impact on a 
substantial number of small entities under 5 U.S.C. 605(b).
    At the final rule stage, we may certify this rule as not having a 
significant economic impact on a substantial number of small entities; 
consequently, we specifically request comments that inform our decision 
regarding the economic impact of this rule on small entities.

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 
rule would affect your small business, organization, or governmental 
jurisdiction and you have questions concerning its provisions or 
options for compliance, please consult Benjamin White, National 
Pollution Funds Center, Coast Guard, telephone 202-493-6863. 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 call for a collection of information under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined 
in 5 CFR 1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other, similar 
actions. The title and description of the information collections, a 
description of those who must collect the information, and an estimate 
of the total annual burden follow. 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.
    Title: Financial Responsibility for Water Pollution (Vessels) and 
Limits of Liability.
    Summary of the Collection of Information: Within 120 days of the 
effective date of this regulation, operators and guarantors would be 
required to establish evidence of financial responsibility to the 
amended applicable amounts in 33 CFR 138.80(f).
    This proposed rule would eliminate the existing recordkeeping 
burden associated with 33 CFR part 138, and revise the current 
information collection entitled, Financial Responsibility for Water 
Pollution (Vessels) (Office of Management and Budget Control Number 
1625-0046, Approved December 7, 2006).
    Need for Information: This information collection is necessary to 
enforce this proposed rule. Without this collection, it would not be 
possible for the Coast Guard to know which operators were in compliance 
with the amended financial responsibility amounts of 33 CFR 138.80(f), 
and which were not. Vessels not in compliance would be subject to the 
penalties provided under 33 CFR 138.140.
    Proposed Use of Information: The Coast Guard would use this 
information to verify that vessel operators have established evidence 
of financial responsibility to reflect the amended financial 
responsibility applicable amounts in 33 CFR 138.80(f).
    Description of the Respondents: Operators and guarantors of vessels 
that require COFRs under 33 CFR part 138.
    Number of Respondents: There are approximately 900 United States 
operators, 9,000 foreign operators of vessels and 100 guarantors that 
would submit information to the Coast Guard.
    Frequency of Response: This is a one-time submission that would 
occur within 120 days of this regulatory change to the financial 
responsibility applicable amounts. Subsequent submissions that may be 
required as a result of changes to the Consumer Price Index are not 
included here because they will be addressed in a future rulemaking to 
establish procedures for periodic changes to the limits of liability to 
reflect changes in the Consumer Price Index pursuant to 33 U.S.C. 
2704(d)(4).

[[Page 6648]]

Also not included here are submissions required under any existing 
collection of information requirement in part 138.
    Burden of Response:
    Increased burden associated with reporting requirements:
    10,000 operators x 1.0 hours per response = 10,000 hours
    Reduced burden associated with recordkeeping requirements: 137 
hours for recordkeeping
    Estimate of Total Annual Burden: We used the ``All Occupations'' 
average hourly wage of $18.21 per hour, found in the May 2005 National 
Occupational Employment and Wage Estimates United States, published by 
the Department of Labor's Bureau of Labor Statistics, and applied a 43 
percent overhead factor to estimate employee benefits to calculate the 
burdened labor rate. Bureau of Labor Statistics data show that total 
employee benefits is approximately 30 percent of total compensation. By 
applying a benefit factor of 43 percent to the hourly wage, we 
calculate total compensation:

    $18.21 per hour + ($18.21 per hour x 43%) = $26 per hour.

    We then multiplied the number of net burden hours by the burdened 
labor rate calculated above.

    Increased burden associated with reporting requirements:
    10,000 hours x $26 per hour = $260,000
    Reduced burden associated with recordkeeping requirements:
    137 hours x $26 per hour = $3,562

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), we have submitted a copy of this proposed rule to the Office 
of Management and Budget (OMB) for its review of the collection of 
information.
    We ask for public comment on the proposed collection of information 
to help us determine how useful the information is; whether it can help 
us perform our functions better; whether it is readily available 
elsewhere; how accurate our estimate of the burden of collection is; 
how valid our methods for determining burden are; how we can improve 
the quality, usefulness, and clarity of the information; and how we can 
minimize the burden of collection.
    If you submit comments on the collection of information, submit 
them both to OMB and to the Docket Management Facility where indicated 
under ADDRESSES, by the date under DATES.
    You need not respond to a collection of information unless it 
displays a currently valid control number from OMB. Before the 
requirements for this collection of information become effective, we 
will publish a notice in the Federal Register of OMB's decision to 
approve, modify, or disapprove the collection.

E. Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on them.
    We have analyzed this proposed rule under that Order and have 
determined that it does not have implications for federalism.

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 $100,000,000 or more in any 
one year. Though this proposed rule would not result in such an 
expenditure, we do discuss the effects of this rule elsewhere in this 
preamble.

G. Taking of Private Property

    This proposed rule would not effect 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 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 (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., specifications of materials, performance, design, or 
operation; test methods; sampling procedures; and related management 
systems practices) that are developed or adopted by voluntary consensus 
standards bodies.
    This proposed rule does not use technical standards. Therefore, we 
did not consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this proposed rule under Commandant Instruction 
M16475.lD, which guides the Coast Guard in complying with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and 
have made a preliminary determination that this action is not likely to 
have a significant effect on the human environment. A preliminary 
``Environmental Analysis Check List'' supporting this preliminary 
determination is available in the docket where indicated under the 
``Public Participation and Request for Comments'' section of this 
preamble. We seek any comments or information that may lead to 
discovery of a significant environmental impact from this proposed 
rule.

List of Subjects in 33 CFR Part 138

    Hazardous materials transportation, Insurance, Oil pollution, 
Reporting and

[[Page 6649]]

recordkeeping requirements, Water pollution control.

VI. Words of Issuance and Regulatory Text

    For the reasons discussed in the preamble, the Coast Guard proposes 
to revise 33 CFR part 138 to read as follows:

PART 138--FINANCIAL RESPONSIBILITY FOR WATER POLLUTION (VESSELS) 
AND OPA 90 LIMITS OF LIABILITY (VESSELS AND DEEPWATER PORTS)

Subpart A--Financial Responsibility for Water Pollution (Vessels)
Sec.
138.10 Scope.
138.15 Applicability.
138.20 Definitions.
138.30 General.
138.40 Forms.
138.45 Where to apply for Certificates.
138.50 Time to apply.
138.60 Applications, general instructions.
138.65 Issuance of Certificates.
138.70 Renewal of Certificates.
138.80 Financial responsibility, how established.
138.85 Implementation schedule.
138.90 Individual and Fleet Certificates.
138.100 Non-owning operator's responsibility for identification.
138.110 Master Certificates.
138.120 Certificates, denial or revocation.
138.130 Fees.
138.140 Enforcement.
138.150 Service of process.
Subpart B--OPA 90 Limits of Liability (Vessels and Deepwater Ports)
Sec.
138.200 Scope.
138.210 Applicability.
138.220 Limits of liability.

    Authority: 33 U.S.C. 2716, 2716a; 42 U.S.C. 9608, 9609; sec. 
7(b), E.O. 12580, 3 CFR, 1987 Comp., p. 198; E.O. 12777, 3 CFR, 1991 
Comp., p. 351; E.O. 13286, Sec. 89 (68 FR 10619, Feb. 28, 2003); 
Section 1512 of the Homeland Security Act of 2002 (Pub. L. 107-296); 
Department of Homeland Security Delegation Nos. 0170.1 and 5110. 
Section 138.30 also issued under the authority of 46 U.S.C. 2103, 46 
U.S.C. 14302.

Subpart A--Financial Responsibility for Water Pollution (Vessels)


Sec.  138.10  Scope.

    This subpart sets forth the procedures by which an operator of a 
vessel must establish and maintain, for itself and for the owners and 
demise charterers of the vessel, evidence of financial responsibility 
required by Sec.  1016(a) of the Oil Pollution Act of 1990, as amended 
(OPA 90) (33 U.S.C. 2716), and Section 108 of the Comprehensive 
Environmental Response, Compensation, and Liability Act, as amended 
(CERCLA) (42 U.S.C. 9608), equal to the total applicable amount 
established under this part and sufficient to cover their liability 
arising under--
    (a) Sections 1002 and 1004 of OPA 90 (33 U.S.C. 2702, 2704); and
    (b) Section 107 of CERCLA (42 U.S.C. 9607).


Sec.  138.15  Applicability.

    (a) This subpart applies to the operator as defined herein of--
    (1) A tank vessel of any size, and a foreign-flag vessel of any 
size, 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
    (2) Any vessel using the navigable waters of the United States or 
any port or other place subject to the jurisdiction of the United 
States, including a vessel using an offshore facility subject to the 
jurisdiction of the United States, except--
    (i) A vessel that is 300 gross tons or less; or
    (ii) A non-self-propelled barge that does not carry oil as cargo or 
fuel and does not carry hazardous substances as cargo.
    (b) For the purposes of financial responsibility under OPA 90, a 
mobile offshore drilling unit is treated as a tank vessel when it is 
being used as an offshore facility and there is a discharge, or a 
substantial threat of a discharge, of oil on or above the surface of 
the water. A mobile offshore drilling unit is treated as a vessel other 
than a tank vessel when it is not being used as an offshore facility.
    (c) In addition to a non-self-propelled barge over 300 gross tons 
that carries hazardous substances as cargo, for the purposes of 
financial responsibility under CERCLA, this subpart applies to a self-
propelled vessel over 300 gross tons, even if it does not carry 
hazardous substances.
    (d) This subpart does not apply to operators of public vessels.


Sec.  138.20  Definitions.

    (a) As used in this subpart, the following terms have the meaning 
as set forth in--
    (1) Section 1001 of the Oil Pollution Act of 1990 (Pub. L. 101-380, 
Title I, Sec.  1001, Aug. 18, 1990, 104 Stat. 486; Pub. L. 105-383, 
Title III, Sec.  307(a), Nov. 13, 1998, 112 Stat. 3421; Pub. L. 108-
293, Title VII, Sec.  703(a), (b), Aug. 9, 2004, 118 Stat. 1069, 1071), 
respecting the financial responsibility referred to in Sec.  138.10(a): 
claim, claimant, damages, discharge, exclusive economic zone, liable, 
liability, navigable waters, mobile offshore drilling unit, natural 
resources, offshore facility, oil, owner or operator, person, remove, 
removal, removal costs, security interest, and United States; and
    (2) Section 101 of the Comprehensive Environmental Response, 
Compensation, and Liability Act (Pub. L. 96-510, Title I, Sec.  101, 
Dec. 11, 1980, 94 Stat. 2767; Pub. L. 96-561, Title II, Sec.  238(b), 
Dec. 22, 1980, 94 Stat. 3300; Pub. L. 99-499, Title I, Sec. Sec.  101, 
114(b), 127(a), Title V, Sec.  517(c)(2), Oct. 17, 1986, 100 Stat. 
1615, 1652, 1692, 1774; Pub. L. 100-707, Title I, Sec.  109(v), Nov. 
23, 1988, 102 Stat. 4710; Pub. L. 103-429, Sec.  7(e)(1), Oct. 31, 
1994, 108 Stat. 4390; Pub. L. 104-208, Div. A, Title I, Sec.  101(a) 
[Title II, Sec.  211(b)], Title II, Sec.  2502(b), Sept. 30, 1996, 110 
Stat. 3009-41, 3009-464; Pub. L. 104-287, Sec.  6(j)(1), Oct. 11, 1996, 
110 Stat. 3400; Pub. L. 106-74, Title IV, Sec.  427, Oct. 20, 1999, 113 
Stat. 1095; Pub. L. 107-118, Title II, Sec. Sec.  211(a), 222(a), 223, 
231(a), Jan. 11, 2002, 115 Stat. 2360, 2370, 2372, 2375), respecting 
the financial responsibility referred to in Sec.  138.10(b): claim, 
claimant, damages, environment, hazardous substance, liable, liability, 
navigable waters, natural resources, offshore facility, owner or 
operator, person, release, remove, removal, security interest, and 
United States.
    (b) As used in this subpart--
    Acts means OPA 90 and CERCLA.
    Applicable amount means an amount of financial responsibility that 
must be demonstrated under this part, calculated pursuant to Sec. 
138.80(f)(1) and subpart B for OPA 90 or 138.80(f)(2) for CERCLA.
    Applicant means an operator who has applied for a Certificate or 
for the renewal of a Certificate under this subpart.
    Application means an ``Application for Vessel Certificate of 
Financial Responsibility (Water Pollution)'' (Form CG-5585), which can 
be obtained from the U.S. Coast Guard National Pollution Funds Center 
as provided in Sec. Sec.  138.40 and 138.45.
    Cargo means goods or materials 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 title I of the Comprehensive Environmental Response, 
Compensation, and Liability Act, as amended (42 U.S.C. 9601 et seq.).
    Certificant means an operator who has a current Certificate issued 
by NPFC under this subpart.
    Certificate means a ``Vessel Certificate of Financial 
Responsibility (Water

[[Page 6650]]

Pollution)'' issued by the NPFC electronically under this subpart, as 
provided in Sec.  138.65.
    Day or days means calendar days. If a deadline specified in this 
subpart falls on a weekend or Federal holiday, the deadline will occur 
on the next working day. Compliance with a submission deadline will be 
determined based on the day the submission is received by NPFC.
    Director, NPFC, means the head of the U.S. Coast Guard National 
Pollution Funds Center (NPFC).
    E-COFR means the ``Electronic Certificate of Financial 
Responsibility'' web-based process located on the NPFC Web site (http://www.npfc.gov/cofr
), which may be used by operators to apply for and 

renew Certificates.
    Financial guarantor means a guarantor who provides a financial 
guaranty under Sec.  138.80(b)(4), and is distinct from an insurer, a 
self-insurer or a surety.
    Financial responsibility means the statutorily required financial 
ability to meet a responsible party's liability under the Acts.
    Fish tender vessel and fishing vessel have the same meaning as set 
forth in 46 U.S.C. 2101.
    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 not more than five 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, other than a responsible party, who 
provides evidence of financial responsibility under the Acts on behalf 
of a vessel's responsible parties. A responsible party who can qualify 
as a self-insurer under Sec.  138.80(b)(3) may act as both a self-
insurer of vessels owned, operated or demise chartered by the 
responsible party, and as a financial guarantor for the responsible 
parties of other vessels under Sec.  138.80(b)(4).
    Hazardous material means a liquid material or substance that is--
    (1) Flammable or combustible;
    (2) A hazardous substance designated under section 311(b) of the 
Federal Water Pollution Control Act (33 U.S.C. 1321(b)); or
    (3) Designated a hazardous material under the Hazardous Materials 
Transportation Act, section 104, 46 U.S.C. 5103(a) (1994).
    Incident means any occurrence or series of occurrences having the 
same origin, involving one or more vessels, facilities, or any 
combination thereof, resulting in the discharge or substantial threat 
of discharge of oil into or upon the navigable waters or adjoining 
shorelines or the exclusive economic zone.
    Insurer is a type of guarantor and means one or more insurance 
companies, associations of underwriters, ship owners' protection and 
indemnity associations, or other persons, each of which must be 
acceptable to the Director, NPFC.
    Master Certificate means a Certificate issued under this subpart to 
a person who is a builder, repairer, scrapper, lessor, or seller of a 
vessel and is acting as the vessel's operator.
    Offshore supply vessel has the same meaning as set forth in 46 
U.S.C. 2101.
    OPA 90 means title I of the Oil Pollution Act of 1990 (33 U.S.C. 
2701 et seq.).
    Operator means a person who is an owner, a demise charterer, or 
other contractor, who conducts the operation of, or who is responsible 
for the operation of, a vessel. A builder, repairer, scrapper, lessor, 
or seller who is responsible, or who agrees by contract to become 
responsible, for a vessel is an operator. A time or voyage charterer 
that does not assume responsibility for the operation of a vessel is 
not an operator for the purposes of this subpart.
    Owner means any person holding legal or equitable title to a 
vessel. In a case where a U.S. Coast Guard Certificate of Documentation 
or equivalent document has been issued, the owner is considered to be 
the person or persons whose name or names appear thereon as owner. 
``Owner'' does not include a person who, without participating in the 
management of a vessel, holds indicia of ownership primarily to protect 
the owner's security interest in the vessel.
    Public vessel means a vessel owned or bareboat chartered by the 
United States, or by a State or political subdivision thereof, or by a 
foreign nation, except when the vessel is engaged in commerce.
    Responsible party, for purposes of OPA 90 financial responsibility 
has the same meaning as defined at 33 U.S.C. 2701(32), and for purposes 
of CERCLA financial responsibility means any person who is an owner or 
operator, as defined at 42 U.S.C. 9601(20), including any person 
chartering a vessel by demise.
    Self-elevating lift vessel means a vessel with movable legs capable 
of raising its hull above the surface of the sea and that is an 
offshore work boat (such as a work barge) that does not engage in 
drilling operations.
    Tank vessel means a vessel (other than an offshore supply vessel, a 
fishing vessel or a fish tender vessel of 750 gross tons or less that 
transfers fuel without charge to a fishing vessel owned by the same 
person, or a towing or pushing vessel (tug) simply because it has in 
its custody a tank barge) that is constructed or adapted to carry, or 
that carries, oil or liquid hazardous material in bulk as cargo or 
cargo residue, and that--
    (1) Is a vessel of the United States;
    (2) Operates on the navigable waters; or
    (3) Transfers oil or hazardous material in a place subject to the 
jurisdiction of the United States.
    Total applicable amount means the amount determined under Sec.  
138.80(f)(3).
    Vessel means every description of watercraft or other artificial 
contrivance used, or capable of being used, as a means of 
transportation on water.


Sec.  138.30  General.

    (a) The regulations in this subpart set forth the procedures for an 
operator of a vessel subject to this subpart to demonstrate that the 
responsible parties of the vessel are financially able to meet their 
potential liability for costs and damages in the applicable amounts set 
forth in this subpart at 138.80(f). Although the owners, operators, and 
demise charterers of a vessel are strictly, jointly and severally 
liable under OPA 90 and CERCLA for the costs and damages resulting from 
each incident or release or threatened release, together they need only 
establish and maintain evidence of financial responsibility under this 
subpart equal to the combined OPA 90 and CERCLA limits of liability 
arising from a single incident and a single release, or threatened 
release. Only that portion of the total applicable amount of financial 
responsibility demonstrated under this subpart with respect to--
    (1) OPA 90 is required to be made available by a vessel's 
responsible parties and guarantors for the costs and damages related to 
an incident where there is not also a release or threatened release; 
and,
    (2) CERCLA is required to be made available by a vessel's 
responsible parties and guarantors for the costs and damages related to 
a release or threatened release where there is not also an incident. A 
guarantor (or a self-insurer for whom the exceptions to limitations of 
liability are not applicable), therefore, is not required to apply the 
entire total applicable amount of financial responsibility demonstrated 
under this subpart to an incident involving oil alone or a release or 
threatened release involving a hazardous substance alone.

[[Page 6651]]

    (b) Where a vessel is operated by its owner or demise charterer, or 
the owner or demise charterer is responsible for its operation, the 
owner or demise charterer is considered to be the ``operator'' for 
purposes of this subpart, and must submit the application and requests 
for renewal for a Certificate. In all other cases, the vessel operator 
must submit the application or requests for renewal.
    (c) For a United States-flag vessel, the applicable gross tons or 
gross tonnage, as referred to in subparts A and B of this part, is 
determined as follows:
    (1) For a documented U.S. vessel measured under both 46 U.S.C. 
Chapters 143 (Convention Measurement) and 145 (Regulatory Measurement). 
The vessel's regulatory gross tonnage is used to determine whether the 
vessel exceeds 300 gross tons where that threshold applies under the 
Acts. If the vessel's regulatory gross tonnage is determined under the 
Dual Measurement System in 46 CFR part 69, subpart D, the higher gross 
tonnage is the regulatory gross tonnage for the purposes of determining 
whether the vessel meets the 300 gross ton threshold. The vessel's 
gross tonnage as measured under the International Convention on Tonnage 
Measurement of Ships, 1969 (``Convention''), is used to determine the 
vessel's required applicable amounts of financial responsibility, and 
limit of liability under section 1004(a) of OPA 90 and section 107 of 
CERCLA.
    (2) For all other United States vessels. The vessel's gross tonnage 
under 46 CFR part 69 is used for determining the vessel's 300 gross ton 
threshold, the required applicable amounts of financial responsibility, 
and limits of liability under section 1004(a) of OPA 90 and section 107 
of CERCLA. If the vessel's gross tonnage is determined under the Dual 
Measurement System, the higher gross tonnage is used in all 
determinations.
    (d) For a vessel of a foreign country that is a party to the 
Convention, gross tons or gross tonnage, as referred to in subparts A 
and B of this part, is determined as follows:
    (1) For a vessel assigned, or presently required to be assigned, 
gross tonnage under Annex I of the Convention. The vessel's gross 
tonnage as measured under Annex I of the Convention is used for 
determining the 300 gross ton threshold, if applicable, the required 
applicable amounts of financial responsibility, and limits of liability 
under section 1004(a) of OPA 90 and under section 107 of CERCLA.
    (2) For a vessel not presently required to be assigned gross 
tonnage under Annex I of the Convention. The highest gross tonnage that 
appears on the vessel's U.S. Coast Guard Certificate of Documentation 
or equivalent document and that is acceptable to the Coast Guard under 
46 U.S.C. chapter 143 is used for determining the 300 gross ton 
threshold, if applicable, the required applicable amounts of financial 
responsibility, and limits of liability under section 1004(a) of OPA 90 
and section 107 of CERCLA. If the vessel has no document, or the gross 
tonnage appearing on the document is not acceptable under 46 U.S.C. 
chapter 143, the vessel's gross tonnage is determined by applying the 
Convention Measurement System under 46 CFR part 69, subpart B, or if 
applicable, the Simplified Measurement System under 46 CFR part 69, 
subpart E. The measurement standards applied are subject to applicable 
international agreements to which the United States Government is a 
party.
    (e) For a vessel of a foreign country that is not a party to the 
Convention, gross tons or gross tonnage, as referred to in subparts A 
and B of this part, is determined as follows:
    (1) For a vessel measured under laws and regulations found by the 
Commandant to be similar to Annex I of the Convention. The vessel's 
gross tonnage under the similar laws and regulations is used for 
determining the 300 gross ton threshold, if applicable, the required 
applicable amounts of financial responsibility, and limits of liability 
under section 1004(a) of OPA 90 and section 107 of CERCLA. The 
measurement standards applied are subject to applicable international 
agreements to which the United States Government is a party.
    (2) For a vessel not measured under laws and regulations found by 
the Commandant to be similar to Annex I of the Convention. The vessel's 
gross tonnage under 46 CFR part 69, subpart B, or, if applicable, 
subpart E, is used for determining the 300 gross ton threshold, if 
applicable, the required applicable amount of financial responsibility, 
and the limits of liability under section 1004(a) of OPA 90 and section 
107 of CERCLA. The measurement standards applied are subject to 
applicable international agreements to which the United States is a 
party.
    (f) A person who agrees to act as a guarantor or a self-insurer is 
bound by the vessel's gross tonnage as determined under paragraphs (c), 
(d), or (e) of this section, regardless of what gross tonnage is 
specified in an application or guaranty form submitted under this 
subpart. Guarantors, however, may limit their liability under a 
guaranty of financial responsibility to the applicable gross tonnage 
appearing on a vessel's International Tonnage Certificate or other 
official, applicable certificate of measurement and will not incur any 
greater liability with respect to that guaranty, except when the 
guarantors knew or should have known that the applicable tonnage 
certificate was incorrect.


Sec.  138.40  Forms.

    All forms referred to in this subpart may be obtained from NPFC by 
requesting them in writing at the address given in Sec.  138.145(a) or 
by clicking on the ``Forms'' link at the NPFC E-COFR Web site, http://www.npfc.gov/cofr
.



Sec.  138.45  Where to apply for and renew Certificates.

    (a) An operator must file all applications for a Certificate and 
all requests for renewal of a Certificate, together with fees and 
evidence of financial responsibility, with the NFPC at the following 
address: U.S. Coast Guard, National Pollution Funds Center (Cv), 4200 
Wilson Boulevard, Suite 1000, Arlington, VA 22203-1804, telephone (202) 
493-6780, Telefax (202) 493-6781; or electronically using NPFC's E-COFR 
web-based process at http://www.npfc.gov/cofr.

    (b) All requests you have for assistance in completing 
applications, requests for renewal and other submissions under this 
subpart, including telephone inquiries, should be directed to the U.S. 
Coast Guard NPFC at the addresses in paragraph (a) of this section.


Sec.  138.50  Time to apply.

    (a) A vessel operator who wishes to obtain a Certificate must 
submit a completed application form or request for renewal and all 
required supporting evidence of financial responsibility, and must pay 
all applicable fees, at least 21 days prior to the date the Certificate 
is required. The Director, NPFC, may grant an extension of this 21-day 
requirement for good cause shown.
    (b) The Director, NPFC, generally processes applications and 
requests for renewal in the order in which they are received at the 
NPFC.


Sec.  138.60  Applications, general instructions.

    (a) You may obtain an ``Application for Vessel Certificate of 
Financial Responsibility (Water Pollution)'' (Form CG-5585) by 
following the instructions in Sec. Sec.  138.40 and 138.45.
    (b) Your application and all supporting documents must be in 
English, and express all monetary terms in United States dollars.

[[Page 6652]]

    (c) An authorized official of the applicant must sign the signature 
page of the application. The title of the signer must be shown in the 
space provided on the application. The operator must submit the 
original signature page of the application to NPFC in hard copy.
    (d) The application must be accompanied by a written statement 
providing the signer the authority to sign, where the signer is not 
identified as an individual (sole proprietor) applicant, a partner in a 
partnership applicant, or a director, chief executive officer, or any 
other duly authorized officer of a corporate applicant.
    (e) If, before the issuance of a Certificate, the applicant becomes 
aware of a change in any of the facts contained in the application or 
supporting documentation, the applicant must, within 5 business days of 
becoming aware of the change, notify the Director, NPFC, in writing, of 
the change.


Sec.  138.65  Issuance of Certificates.

    Upon the satisfactory demonstration of financial responsibility and 
payment of all fees due, the Director, NPFC, will issue a ``Vessel 
Certificate of Financial Responsibility (Water Pollution)'' in 
electronic form. Copies of the Certificate may be downloaded from 
NPFC's E-COFR Web site.


Sec.  138.70  Renewal of Certificates.

    (a) The operator of a vessel required to have a Certificate under 
this subpart must file a written or E-COFR request for renewal of the 
Certificate at least 21 days, but not earlier than 90 days, before the 
expiration date of the Certificate. A letter may be used for this 
purpose. The request for renewal must comply in all other respects with 
the requirements in Sec.  138.60 concerning applications. The Director, 
NPFC, may waive this 21-day requirement for good cause shown.
    (b) The operator must identify in the request for renewal any 
changes which have occurred since the original application for a 
Certificate was filed, and must set forth the correct information in 
full.


Sec.  138.80  Financial responsibility, how established.

    (a) General. In addition to submitting an application, requests for 
renewal and fees, an applicant must submit, or cause to be submitted, 
evidence of financial responsibility acceptable to the Director, NPFC, 
in an amount equal to the total applicable amount determined under 
Sec.  138.80(f). A guarantor may submit the evidence of financial 
responsibility on behalf of the applicant directly to the Director, 
NPFC.
    (b) Methods. An applicant or certificant must establish and 
maintain evidence of financial responsibility by one or more of the 
following methods:
    (1) Insurance. By filing with the Director, NPFC, an ``Insurance 
Guaranty'' (Form CG-5586) or, when applying for a Master Certificate 
under Sec.  138.110, a ``Master Insurance Guaranty'' (Form CG-5586-1), 
executed by not more than four insurers that have been found acceptable 
by, and remain acceptable to, the Director, NPFC, for purposes of this 
subpart.
    (2) Surety bond. By filing with the Director, NPFC, a ``Surety Bond 
Guaranty'' (Form CG-5586-2), executed by not more than 10 acceptable 
surety companies certified by the United States Department of the 
Treasury with respect to the issuance of Federal bonds in the maximum 
penal sum of each bond to be issued under this subpart.
    (3) Self-insurance. By filing the financial statements specified in 
paragraph (b)(3)(i) of this section for the applicant's fiscal year 
preceding the date of application and by demonstrating that the 
applicant or certificant maintains, in the United States, working 
capital and net worth each in amounts equal to or greater than the 
total applicable amount calculated in accordance with Sec.  
138.80(f)(3), based on a vessel carrying hazardous substances as cargo. 
As used in this paragraph, working capital means the amount of current 
assets located in the United States, less all current liabilities 
anywhere in the world; and net worth means the amount of all assets 
located in the United States, less all liabilities anywhere in the 
world. For each fiscal year after the initial submission, the applicant 
or certificant must also submit statements as follows:
    (i) Initial and annual submissions. An applicant or certificant 
must submit annual, current, and audited non-consolidated financial 
statements prepared in accordance with Generally Accepted Accounting 
Principles, and audited by an independent Certified Public Accountant. 
These financial statements must be audited in accordance with Generally 
Accepted Auditing Standards. These financial statements must be 
accompanied by an additional statement from the Treasurer (or 
equivalent official) of the applicant or certificant certifying both 
the amount of current assets and the amount of total assets included in 
the accompanying balance sheet, which are located in the United States. 
If the financial statements cannot be submitted in non-consolidated 
form, a consolidated statement may be submitted if accompanied by an 
additional statement prepared by the same Certified Public Accountant, 
verifying the amount by which the applicant's or certificant's--
    (A) Total assets, located in the United States, exceed its total 
(i.e., worldwide) liabilities; and
    (B) Current assets, located in the United States, exceed its total 
(i.e., worldwide) current liabilities. This additional statement must 
specifically name the applicant or certificant, indicate that the 
amounts so verified relate only to the applicant or certificant, apart 
from any other affiliated entity, and identify the consolidated 
financial statement to which it applies.
    (ii) Semiannual submissions. When the applicant's or certificant's 
demonstrated net worth is not at least ten times the total applicable 
amount of financial responsibility calculated in accordance with Sec.  
138.80(f)(3), the applicant's or certificant's Treasurer (or equivalent 
official) must file affidavits covering the first six months of the 
applicant's or certificant's current fiscal year. The affidavits must 
state that neither the working capital nor the net worth have, during 
the first six months of the current fiscal year, fallen below the 
applicant's or certificant's required total applicable amount of 
financial responsibility as determined in accordance with this subpart.
    (iii) Additional submissions. An applicant or certificant--
    (A) Must, upon request of the Director, NPFC, within the time 
specified in the request, submit additional financial information; and
    (B) Who establishes financial responsibility under paragraph (b)(3) 
of this section must notify the Director, NPFC, within 5 business days 
of the date the applicant or certificant knows, or has reason to 
believe, that the working capital or net worth has fallen below the 
amounts required by this subpart.
    (iv) Time for submissions. All required annual financial statements 
must be received by the Director, NPFC, within 90 days after the close 
of the applicant's or certificant's fiscal year, and all affidavits 
required by paragraph (b)(3)(ii) of this section within 30 days after 
the close of the applicable six-month period. The Director, NPFC, may 
grant an extension of the time limits for filing the annual financial 
statements, semi-annual affidavits or additional financial information 
upon written request and for good cause shown. An applicant or 
certificant seeking an extension of any of these deadlines must set 
forth the reason for the extension and deliver the request at least 15 
days before the annual financial statements, affidavits or additional 
information are

[[Page 6653]]

due. The Director, NPFC, will not consider a request for an extension 
of more than 60 days.
    (v) Failure to submit. The Director, NPFC, may deny or revoke a 
Certificate for failure of the applicant or certificant to submit any 
statement, data, notification, or affidavit required by paragraph 
(b)(3) of this section.
    (vi) Waiver of working capital. The Director, NPFC, may waive the 
working capital requirement for any applicant or certificant that--
    (A) 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 section 501(c) Internal 
Revenue Code. The applicant or certificant must demonstrate in writing 
that the grant of a waiver would benefit a local public interest; or
    (B) Demonstrates in writing that working capital is not a 
significant factor in the applicant's or certificant's financial 
condition. An applicant's or certificant's net worth in relation to the 
amount of its required total applicable amount of financial 
responsibility and a history of stable operations are the major 
elements considered by the Director, NPFC.
    (4) Financial Guaranty. By filing with the Director, NPFC, a 
``Financial Guaranty'' (Form CG-5586-3), or, when applying for a Master 
Certificate, a ``Master Financial Guaranty'' (Form CG-5586-4), executed 
by not more than four financial guarantors, including but not limited 
to a parent or affiliate acceptable to the Coast Guard. A financial 
guarantor must comply with all of the self-insurance provisions of 
paragraph (b)(3) of this section. In addition, a person who is a 
financial guarantor for more than one applicant or certificant must 
have working capital and net worth no less than the aggregate total 
applicable amounts of financial responsibility calculated in accordance 
with Sec.  138.80(f)(3) provided as a financial guarantor for each 
applicant or certificant, plus 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.
    (5) Other evidence of financial responsibility. The Director, NPFC, 
will not accept a self-insurance method other than the one described in 
paragraph (b)(3) of this section. An applicant may in writing request 
that the Director, NPFC, accept a method different from one described 
in paragraph (b)(1), (2), or (4) of this section to demonstrate 
evidence of financial responsibility. An applicant submitting a request 
under this paragraph must submit the request to the Director, NPFC, at 
least 45 days prior to the date the Certificate is required. The 
applicant must describe in detail the method proposed, the reasons why 
the applicant does not wish to use or is unable to use one of the 
methods described in paragraph (b)(1), (2), or (4) of this section, and 
how the proposed method assures that the responsible parties for the 
vessel are able to fulfill their obligations to pay costs and damages 
in the event of an incident or a release or threatened release. The 
Director, NPFC, will not accept a method under this paragraph that 
merely deletes or alters a provision of one of the methods described in 
paragraph (b)(1), (2), or (4) of this section (for example, one that 
alters the termination clause of the ``Insurance Guaranty'' (Form CG-
5586). An applicant that makes a request under this paragraph must 
provide the Director, NPFC, a proposed guaranty form that includes all 
the elements described in paragraphs (c) and (d) of this section. A 
decision of the Director, NPFC, not to accept a method requested by an 
applicant under this paragraph is final agency action.
    (c) Forms--(1) Multiple guarantors. Four or fewer insurers (a lead 
underwriter is considered to be one insurer) may jointly execute an 
``Insurance Guaranty'' (Form CG-5586) or a ``Master Insurance 
Guaranty'' (Form CG-5586-1). Ten or fewer sureties (including lead 
sureties) may jointly execute a ``Surety Bond Guaranty'' (Form CG-5586-
2). Four or fewer financial guarantors may jointly execute a 
``Financial Guaranty'' (Form CG-5586-3). If more than one insurer, 
surety, or financial guarantor executes the relevant form--
    (i) Each is bound for the payment of sums only in accordance with 
the percentage of vertical participation specified on the relevant form 
for that insurer, surety, or financial guarantor. Participation in the 
form of layering (tiers, one in excess of another) is not acceptable; 
only vertical participation on a percentage basis and participation 
with no specified percentage allocation is acceptable. If no percentage 
of participation is specified for an insurer, surety, or financial 
guarantor, the liability of that insurer, surety, or financial 
guarantor is joint and several for the total of the unspecified 
portions; and
    (ii) The guarantors must designate a lead guarantor having 
authority to bind all guarantors for actions required of guarantors 
under the Acts, including but not limited to receipt of designation of 
source, advertisement of a designation, and receipt and settlement of 
claims.
    (2) Operator name. An applicant or certificant must ensure that 
each form submitted under this subpart sets forth in full the correct 
legal name of the vessel operator to whom a Certificate is to be 
issued.
    (d) Direct Action--(1) Acknowledgment. Any evidence of financial 
responsibility submitted under this subpart must contain an 
acknowledgment by each insurer or other guarantor that an action in 
court by a claimant (including a claimant by right of subrogation) for 
costs or damages arising under the provisions of the Acts, may be 
brought directly against the insurer or other guarantor. The evidence 
of financial responsibility must also provide that, in the event an 
action is brought under the Acts directly against the insurer or other 
guarantor, the insurer or other guarantor may invoke only the following 
rights and defenses:
    (i) The incident, release, or threatened release was caused by the 
willful misconduct of the person for whom the guaranty is provided.
    (ii) Any defense that the person for whom the guaranty is provided 
may raise under the Acts.
    (iii) A defense that the amount of a claim or claims, filed in any 
action in any court or other proceeding, exceeds the amount of the 
guaranty with respect to an incident or with respect to a release or 
threatened release.
    (iv) A defense that the amount of a claim or claims that exceeds 
the amount of the guaranty, which amount is based on the gross tonnage 
of the vessel as entered on the vessel's International Tonnage 
Certificate or other official, applicable certificate of measurement, 
except when the guarantor knew or should have known that the applicable 
tonnage certificate was incorrect.
    (v) The claim is not one made under either of the Acts.
    (2) Limitation on guarantor liability. A guarantor that 
participates in any evidence of financial responsibility under this 
subpart will be liable because of that participation, with respect to 
an incident or a release or threatened release, in any proceeding only 
for the amount and type of costs and damages specified in the evidence 
of financial responsibility. A guarantor will not be considered to have 
consented to direct action under any law other than the Acts, or to 
unlimited liability under any law or in any venue, solely because of 
the guarantor's participation in providing any evidence of financial 
responsibility under this subpart. In the event of any finding that 
liability of a guarantor exceeds the amount of the guaranty provided 
under this subpart,

[[Page 6654]]

that guaranty is considered null and void with respect to that excess.
    (e) Public access to data. Financial data filed by an applicant, 
certificant, and any other person 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. 552a).
    (f) Total applicable amount. The total applicable amount is 
determined as follows:
    (1) The applicable amount under OPA 90 is equal to the applicable 
vessel limit of liability, which is determined as provided in subpart B 
of this part.
    (2) The applicable amount under CERCLA is determined as follows:
    (i) For a vessel over 300 gross tons carrying a hazardous substance 
as cargo, the greater of $5,000,000 or $300 per gross ton.
    (ii) For any other vessel over 300 gross tons, the greater of 
$500,000 or $300 per gross ton.
    (3) The total applicable amount is the applicable amount calculated 
under paragraph (f)(1) of this section plus the applicable amount 
calculated under paragraph (f)(2) of this section.


Sec.  138.85  Implementation schedule.

    The effective date of the applicable amounts in Subpart B of this 
part will be [INSERT DATE 90 DAYS AFTER PUBLICATION OF FINAL RULE IN 
THE Federal Register]. In the event an applicable amount in Subpart B 
is amended by regulation, the effective date of the amended applicable 
amount will be 90 days after publication of a final rule in the Federal 
Register, unless another date is required by statute and specified in 
the amending regulation. Each operator of a vessel described in Sec.  
138.15, must have established, on or before the effective date of the 
applicable amount, evidence of financial responsibility acceptable to 
the Director, NPFC, in an amount equal to or greater than the total 
applicable amount.


Sec.  138.90  Individual and Fleet Certificates.

    (a) The Director, NPFC, issues an individual Certificate for each 
vessel listed on a completed application or request for renewal when 
the Director, NPFC, determines that acceptable evidence of financial 
responsibility has been provided and appropriate fees have been paid, 
except where a Fleet Certificate is issued under this section or where 
a Master Certificate is issued under Sec.  138.110. Each Certificate of 
any type issued under this subpart is issued only in the name of a 
vessel operator and is effective for not more than 3 years from the 
date of issue, as indicated on each Certificate. An authorized official 
of the applicant may submit to the Director, NPFC, a letter requesting 
that additional vessels be added to a previously submitted application 
for an individual Certificate. The letter must set forth all 
information required in item 5 of the application form. The authorized 
official must also submit, or cause to be submitted, acceptable 
evidence of financial responsibility, if required, and certification 
fees for these additional vessels.
    (b) An operator of two or more barges that are not tank vessels and 
that from time to time may be subject to this subpart (e.g., a hopper 
barge over 300 gross tons when carrying oily metal shavings or similar 
cargo), so long as the operator of such a fleet is a self-insurer or 
arranges with an acceptable guarantor to cover, automatically, all such 
barges for which the operator may from time to time be responsible, may 
apply to the Director, NPFC, for issuance of a Fleet Certificate.
    (c) A person must not make any alteration on any copy of a 
Certificate issued under this subpart.
    (d) If, at any time after a Certificate has been issued, a 
certificant becomes aware of a change in any of the facts contained in 
the application or supporting documentation, the certificant must 
notify the Director, NPFC, in writing within 10 days of becoming aware 
of the change. A vessel or operator name change or change of a 
guarantor must be reported by the operator as soon as possible by 
telefax or other electronic means to the Director, NPFC, and followed 
by a written notice sent within 3 business days.
    (e) Except as provided in Sec.  138.90(f), at the moment a 
certificant ceases to be the operator of a vessel for any reason, 
including a vessel that is scrapped or transferred to a new operator, 
the individual Certificate naming the vessel is void and its further 
use is prohibited. In that case, the certificant must, within 10 
business days of the Certificate becoming void, submit the following 
information in writing to the Director, NPFC:
    (1) The number of the individual Certificate and the name of the 
vessel.
    (2) The date and reason why the certificant ceased to be the 
operator of the vessel.
    (3) The location of the vessel on the date the certificant ceased 
to be the operator.
    (4) The name and mailing address of the person to whom the vessel 
was sold or transferred.
    (f) In the event of the temporary transfer of custody of an 
unmanned barge certificated under this subpart, where the certificant 
transferring the barge continues to be liable under the Acts and 
continues to maintain on file with the Director, NPFC, acceptable 
evidence of financial responsibility with respect to the barge, the 
existing individual Certificate remains in effect. A temporary new 
individual Certificate is not required. A transferee is encouraged to 
require the transferring certificant to acknowledge in writing that the 
transferring certificant agrees to remain responsible for pollution 
liabilities.


Sec.  138.100  Non-owning operator's responsibility for identification.

    (a) Each operator that is not an owner of a vessel certificated 
under this subpart, other than an unmanned barge, must ensure that the 
original or a legible copy of the demise charter-party (or other 
written document on the owner's letterhead, signed by the vessel owner, 
which specifically identifies the vessel operator named on the 
Certificate) 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 a United States Government official.


Sec.  138.110  Master Certificates.

    (a) A contractor or other person who is responsible for a vessel in 
the capacity of a builder, scrapper, lessor, or seller (including a 
repairer who agrees to be responsible for a vessel under its custody) 
may apply for a Master Certificate instead of applying for an 
individual Certificate for each vessel. A Master Certificate covers all 
of the vessels subject to this subpart held by the applicant solely for 
purposes of construction, repair, scrapping, lease, or sale. A vessel 
which is being operated commercially in any business venture, including 
the business of building, repairing, scrapping, leasing, or selling 
(e.g., a slop barge used by a shipyard) cannot be covered by a Master 
Certificate. Any vessel for which a Certificate is required, but which 
is not eligible for a Master Certificate, must be covered by either an 
individual Certificate or a Fleet Certificate.
    (b) An applicant for a Master Certificate must submit an 
application form in the manner prescribed by Sec. Sec.  138.40 through 
138.60. An applicant must establish evidence of financial 
responsibility in accordance with Sec.  138.80, by submission, for 
example, of an acceptable Master Insurance Guaranty Form, Surety Bond 
Guaranty Form, Master Financial Guaranty Form, or acceptable self-
insurance

[[Page 6655]]

documentation. An application must be completed in full, except for 
Item 5. The applicant must make the following statement in Item 5: 
``This is an application for a Master Certificate. The largest tank 
vessel to be covered by this application is [insert applicable gross 
tons] gross tons. The largest vessel other than a tank vessel is 
[insert applicable gross tons] gross tons.'' The dollar amount of 
financial responsibility evidenced by the applicant must be sufficient 
to meet the amount required under this subpart.
    (c) Each Master Certificate issued by the Director, NPFC, 
indicates--
    (1) The name of the applicant (i.e., the builder, repairer, 
scrapper, lessor, or seller);
    (2) The date of issuance and termination, encompassing a period of 
not more than 3 years; and
    (3) The gross tons of the largest tank vessel and gross tons of the 
largest vessel other than a tank vessel eligible for coverage by that 
Master Certificate. The Master Certificate does not identify the name 
of each vessel covered by the Certificate.
    (d) Each additional vessel which does not exceed the respective 
tonnages indicated on the Master Certificate and which is eligible for 
coverage by a Master Certificate is automatically covered by that 
Master Certificate. Before acquiring a vessel, by any means, including 
conversion of an existing vessel, that would have the effect of 
increasing the certificant's required applicable amount of financial 
responsibility (above that provided for issuance of the existing Master 
Certificate), the certificant must submit to the Director, NPFC, the 
following:
    (1) Evidence of increased financial responsibility.
    (2) A new certification fee.
    (3) Either a new application or a letter amending the existing 
application to reflect the new gross tonnage which is to be indicated 
on a new Master Certificate.
    (e) A person to whom a Master Certificate has been issued must 
submit to the Director, NPFC, every six months beginning the month 
after the month in which the Master Certificate is issued, a report 
indicating the name, previous name, type, and gross tonnage of each 
vessel covered by the Master Certificate during the preceding six-month 
reporting period and indicating which vessels, if any, are tank 
vessels.


Sec.  138.120  Certificates, denial or revocation.

    (a) The Director, NPFC, may deny a Certificate when an applicant--
    (1) Willfully or knowingly makes a false statement in connection 
with an application for an initial or renewal Certificate;
    (2) Fails to establish acceptable evidence of financial 
responsibility as required by this subpart;
    (3) Fails to pay the required application or certificate fees;
    (4) Fails to comply with or respond to lawful inquiries, 
regulations, or orders of the Coast Guard pertaining to the activities 
subject to the Acts, including this subpart; or
    (5) Fails to timely file required statements, data, notifications, 
or affidavits.
    (b) The Director, NPFC, may revoke a Certificate when a 
certificant--
    (1) Willfully or knowingly makes a false statement in connection 
with an application for an initial or a renewal Certificate, or in 
connection with any other filing required by this subpart;
    (2) Fails to comply with or respond to lawful inquiries, 
regulations, or orders of the Coast Guard pertaining to the activities 
subject to this subpart; or
    (3) Fails to timely file required statements, data, notifications, 
or affidavits.
    (c) A Certificate is immediately invalid, and considered revoked, 
without prior notice, when the certificant--
    (1) Fails to maintain acceptable evidence of financial 
responsibility as required by this subpart;
    (2) Is no longer the responsible operator of the vessel in 
question; or
    (3) Alters any copy of a Certificate.
    (d) The Director, NPFC, will advise the applicant or certificant, 
in writing, of the intention to deny or revoke a Certificate under 
paragraph (a) or (b) of this section and will state the reason for the 
decision. Written advice from the Director, NPFC, that an incomplete 
application will be considered withdrawn unless it is completed within 
a stated period, is the equivalent of a denial.
    (e) If the intended revocation under paragraph (b) of this section 
is based on failure to timely file the required financial statements, 
data, notifications, or affidavits, the revocation is effective 10 days 
after the date of the notice of intention to revoke, unless, before 
revocation, the certificant demonstrates to the satisfaction of the 
Director, NPFC, that the required documents were timely filed or have 
been filed.
    (f) If the intended denial is based on paragraph (a)(1) or (a)(4) 
of this section, or the intended revocation is based on paragraph 
(b)(1) or (b)(2) of this section, the applicant or certificant may 
request, in writing, an opportunity to present information for the 
purpose of showing that the applicant or certificant is in compliance 
with the subpart. The request must be received by the Director, NPFC, 
within 10 days after the date of the notification of intention to deny 
or revoke. A Certificate subject to revocation under this paragraph 
remains valid until the Director, NPFC, issues a written decision 
revoking the Certificate.
    (g) An applicant or certificant whose Certificate has been denied 
under paragraph (a) of this section or revoked under paragraph (b) or 
(c) of this section may request the Director, NPFC, to reconsider the 
denial or revocation. The certificant must file a request for 
reconsideration, in writing, to the Director, NPFC, within 20 days of 
the date of the denial or revocation. The certificant must state the 
reasons for reconsideration. The Director, NPFC, may issue a written 
decision on the request within 30 days of receipt, provided that 
failure by the Director, NPFC, to issue a decision within 30 days will 
be deemed an affirmation of a denial or revocation. Unless the 
Director, NPFC, issues a decision reversing the revocation, a revoked 
Certificate remains invalid. A decision by the Director, NPFC, 
affirming a denial or revocation, is final agency action.


Sec.  138.130  Fees.

    (a) The Director, NPFC, will not issue a Certificate until the fees 
set forth in paragraphs (c) and (d) of this section have been paid.
    (b) For those using E-COFR, credit card payment is required. 
Otherwise, fees must be paid in United States currency by check, draft, 
or postal money order made payable to the ``U.S. Coast Guard''. Cash 
will not be accepted.
    (c) An applicant who submits an application under this subpart must 
pay a non-refundable application fee of $200 for each application 
(i.e., individual Certificate, Fleet Certificate, or Master 
Certificate), except as follows:
    (1) An application for an additional (i.e., supplemental) 
individual Certificate,
    (2) An application to amend or renew an existing Certificate, or
    (3) An application submitted within 90 days following a revocation 
or other invalidation of a Certificate.
    (d) In addition to the application fee of $200, an applicant must 
pay a certification fee of $100 for each vessel for which a Certificate 
is requested. An applicant must pay the $100 certification fee for each 
vessel listed in, or later added to, an application for an

[[Page 6656]]

individual Certificate(s). An applicant must pay the $100 certification 
fee to renew or to reissue a Certificate for any reason, including, but 
not limited to, a vessel or operator name change.
    (e) A certification fee is refunded, upon receipt of a written 
request, if the application is denied or withdrawn before issuance of 
the Certificate. Overpayments of application and certification fees are 
refunded, on request, only if the refund is for $100 or more. However, 
any overpayments not refunded will be credited, for a period of 3 years 
from the date of receipt of the monies by the Coast Guard, for the 
applicant's possible future use or transfer to another applicant under 
this subpart.


Sec.  138.140  Enforcement.

    (a) Any person who fails to comply with this subpart with respect 
to evidence of financial responsibility under section 1016 of OPA 90 
(33 U.S.C. 2716) is subject to a civil penalty under section 4303(a) of 
that Act (33 U.S.C. 2716a(a)). In addition, under section 4303(b) of 
that Act (33 U.S.C. 2716a(b)), the Attorney General may secure such 
relief as may be necessary to compel compliance with the OPA 90 
requirements of this subpart including termination of operations. 
Further, any person who fails to comply with this subpart with respect 
to evidence of financial responsibility under section 108(a) of CERCLA 
(42 U.S.C. 9608(a)), is subject to a Class I administrative civil 
penalty, a Class II administrative civil penalty or a judicial penalty 
under section 109 of CERCLA (42 U.S.C. 9609).
    (b) The Secretary of the Department in which the U.S. Coast Guard 
is operating will withhold or revoke the clearance required by 46 
U.S.C. Sec.  60105 to any vessel subject to this subpart that has not 
provided the evidence of financial responsibility required by this 
subpart.
    (c) The Coast Guard may deny entry to any port or place in the 
United States or the navigable waters of the United States, and may 
detain at a port or place in the United States in which it is located, 
any vessel subject to this subpart, which has not provided the evidence 
of financial responsibility required by this subpart.
    (d) Any vessel subject to this subpart which is found operating in 
the navigable waters without having been issued a Certificate or 
maintained the necessary evidence of financial responsibility as 
required by this subpart is subject to seizure by, and forfeiture to, 
the United States.
    (e) Knowingly and willfully using an altered copy of a Certificate, 
or using a copy of a revoked, expired or voided Certificate for 
anything other than recordkeeping purposes, is prohibited. If a 
Certificate is revoked, has expired or is rendered void for any reason, 
the certificant must cease using all copies of the Certificate for 
anything other than the operator's own historical recordkeeping 
purposes.


Sec.  138.150  Service of process.

    (a) When executing the forms required by this subpart, each 
applicant, certificant and guarantor must designate thereon a person 
located in the United States as its agent for service of process for 
purposes of this subpart and for receipt of notices of responsible 
party designations and presentations of claims under the Acts 
(collectively referred to herein as ``service of process''). Each 
designated agent must acknowledge the agency designation in writing 
unless the agent has already furnished the Director, NPFC, with a 
``master'' (i.e., blanket) agency acknowledgment showing that the agent 
has agreed in advance to act as the United States agent for service of 
process for the applicant, certificant, or guarantor in question.
    (b) If any applicant, certificant, or guarantor desires, for any 
reason, to change any designated agent, the applicant, certificant, or 
guarantor must notify the Director, NPFC, of the change. If a 
``master'' agency acknowledgment for the new agent is not on file with 
NPFC, the applicant, certificant, or guarantor must furnish to the 
Director, NPFC, all the relevant information, including the new agent's 
acknowledgment, required in accordance with paragraph (a) of this 
section. In the event of death, disability, unavailability, or similar 
event of a designated agent, the applicant, certificant, or guarantor 
must designate another agent in accordance with paragraph (a) of this 
section within 10 days of knowledge of any such event. The applicant, 
certificant, or guarantor must submit the new designation to the 
Director, NPFC. The Director, NPFC, may deny or revoke a Certificate if 
an applicant, certificant, or guarantor fails to designate and maintain 
an agent for service of process.
    (c) If a designated agent cannot be served because of death, 
disability, unavailability, or similar event, and another agent has not 
been designated under this section, then service of process on the 
Director, NPFC, will constitute valid service of process. Service of 
process on the Director, NPFC, will not be effective unless the 
server--
    (1) Sends the applicant, certificant, or guarantor, as applicable 
(by registered mail, at the last known address on file with the 
Director, NPFC), a copy of each document served on the Director, NPFC; 
and
    (2) Attests to this registered mailing, at the time process is 
served upon the Director, NPFC, indicating that the intent of the 
mailing is to effect service of process on the applicant, certificant, 
or guarantor and that service on the designated agent is not possible, 
stating the reason why.

Subpart B--OPA 90 Limits of Liability (Vessels and Deepwater Ports)


Sec.  138.200.  Scope.

    This subpart sets forth the limits of liability for vessels and 
deepwater ports under Section 1004 of the Oil Pollution Act of 1990 (33 
U.S.C. 2704) (OPA 90), as amended, including consumer price index 
adjustments pursuant to Section 1004(d) of OPA 90 (33 U.S.C. 2704(d)).


Sec.  138.210.  Applicability.

    This subpart applies to responsible parties for--
    (a) Vessels under Section 1001(37) of OPA 90 (33 U.S.C. 2701(37)); 
and
    (b) Deepwater ports under Section 1001(6) of OPA 90 (33 U.S.C. 
2701(6)).


Sec.  138.220.  Limits of liability.

    (a) The limits of liability for responsible parties of vessels 
under OPA 90, as amended, are--
    (1) For a tank vessel greater than 3,000 gross tons with a single-
hull, including a single-hull vessel fitted with double sides only or a 
double bottom only, the greater of $3,000 per gross ton or $22,000,000;
    (2) For a tank vessel greater than 3,000 gross tons, other than a 
vessel referred to in Sec.  138.220(a)(1), the greater of $1,900 per 
gross ton or $16,000,000.
    (3) For a tank vessel less than or equal to 3,000 gross tons with a 
single-hull, including a single-hull vessel fitted with double sides 
only or a double bottom only, the greater of $3,000 per gross ton or 
$6,000,000.
    (4) For a tank vessel less than or equal to 3,000 gross tons, other 
than a vessel referred to in Sec.  138.220(a)(3), the greater of $1,900 
per gross ton or $4,000,000.
    (5) For any other vessel, the greater of $950 per gross ton or 
$800,000.
    (b) The limits of liability for deepwater ports under OPA 90, as 
amended, are--
    (1) For a deepwater port other than the Louisiana Offshore Oil Port 
(LOOP), $350,000,000; and
    (2) For LOOP, $62,000,000.


[[Page 6657]]


    Dated: January 23, 2008.
William Grawe,
Acting Director, National Pollution Funds Center, United States Coast 
Guard.
[FR Doc. E8-1516 Filed 2-4-08; 8:45 am]

BILLING CODE 4910-15-P
