
[Federal Register: September 24, 2008 (Volume 73, Number 186)]
[Proposed Rules]               
[Page 54997-55007]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24se08-21]                         

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 138

[Docket No. USCG-2008-0007]
RIN 1625-AB25

 
Consumer Price Index Adjustments of Oil Pollution Act of 1990 
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 increase the limits of liability 
for vessels and deepwater ports under the Oil Pollution Act of 1990 
(OPA 90) to account for inflation. This notice also sets forth the 
methodology the Coast Guard proposes to use for this and future 
adjustments to the OPA 90 limits of liability to reflect significant 
increases in the Consumer Price Index (CPI). These adjustments are 
required by OPA 90 to preserve the deterrent effect and polluter pays 
principle embodied in the OPA 90 liability provisions.

DATES: Comments and related material must reach the Docket Management 
Facility on or before November 24, 2008. Comments sent to the Office of

[[Page 54998]]

Management and Budget (OMB) on collection of information must reach OMB 
on or before November 24, 2008.

ADDRESSES: You may submit comments identified by Coast Guard docket 
number USCG-2008-0007 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 oira_submission@omb.eop.gov (include the docket 
number and ``Attention: Desk Officer for Coast Guard, DHS'' in the 
subject line of the e-mail) 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-2008-0007), 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, 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-2008-0007) 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 a Privacy Act, system of 
records notice regarding our public dockets in the January 17, 2008 
issue of the Federal Register (73 FR 3316).

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. Acronyms

BLS Bureau of Labor Statistics
CFR Code of Federal Regulations
COFR Certificate of Financial Responsibility
CPI Consumer Price Index
CPI-U Consumer Price Index All Urban Consumers, Not Seasonally 
Adjusted, U.S. city average, All items, 1982-84 = 100
DPA Deepwater Port Act of 1974, as amended (33 U.S.C. 1501, et seq.)
DOI United States Department of Interior
DOT United States Department of Transportation
DRPA Delaware River Protection Act of 2006, Title VI of the Coast 
Guard and Maritime Transportation Act of 2006, Public Law 109-241, 
July 11, 2006, 120 Stat. 516
E.O. Executive Order
EPA U.S. Environmental Protection Agency
FR Federal Register
Fund Oil Spill Liability Trust Fund
LNG Liquefied natural gas
LOOP Louisiana Offshore Oil Port
MTR Marine transportation-related
NAICS North American Industry Classification System
NEPA National Environmental Policy Act of 1969 (42 U.S.C. 4321-
4370f)
NMTR Non-marine transportation-related
NPFC National Pollution Funds Center
NPRM Notice of proposed rulemaking
NTR Non-transportation-related
OMB Office of Management and Budget
OPA 90 The Oil Pollution Act of 1990, as amended (33 U.S.C. 2701, et 
seq.)
SBA Small Business Administration
U.S.C. United States Code
U.S.C.C.A.N. United States Code Congressional and Administrative 
News

III. Background and Purpose

    In general, under the Oil Pollution Act of 1990, as amended (33 
U.S.C. 2701, et seq.) (OPA 90), responsible parties (i.e., the owners 
and operators, including demise charterers) for a vessel or a facility 
from which oil is discharged, or which poses a substantial threat of 
discharge of oil, into or upon the navigable waters or adjoining 
shorelines or the exclusive economic zone are liable for the removal 
costs and damages specified in OPA 90, under 33 U.S.C. 2702(b), that 
result from such an incident. (33 U.S.C. 2702(a)). Embodying the 
polluter pays principle, this liability is strict, joint and 
several.\1\

[[Page 54999]]

The responsible parties' total liability (including any removal costs 
incurred by, or on behalf of, the responsible parties) may, however, be 
limited as provided in 33 U.S.C. 2704, except under certain 
circumstances as provided in 33 U.S.C. 2704(c). In instances when the 
limits of liability apply, the Oil Spill Liability Trust Fund (the 
Fund) is available to compensate the responsible parties and other 
claimants for removal costs and damages in excess of the applicable 
liability limits.
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    \1\ See, Oil Pollution Desk Book, Environmental Law Institute 
1991, hereinafter OPA 90 Desk Book, p. 88, H.R. Conf. Report 101-
653, at p. 102, reprinted in 1990 U.S.C.C.A.N. 779, 780 [``The term 
`liable' or `liability' * * * is to be construed to be the standard 
of liability * * * under section 311 of the [Federal Water Pollution 
Control Act, 33 U.S.C. 1321]. * * * That standard of liability has 
been determined repeatedly to be strict, joint and several 
liability.'']; OPA 90 Desk Book p. 93, H.R. Conf. Report 101-653, at 
118, 1990 U.S.C.C.A.N., at 797 (Aug. 3, 1990) [''[T]he primary 
responsibility to compensate victims of oil pollution rests with the 
person responsible for the source of the pollution[.]''].
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    OPA 90, at 33 U.S.C. 2704(a), sets forth the base dollar amounts of 
the limits of liability for four specified source categories: Vessels, 
onshore facilities, deepwater ports subject to the Deepwater Port Act 
of 1974, as amended (33 U.S.C.1501, et seq.) (DPA), and offshore 
facilities other than deepwater ports subject to the DPA. In addition, 
to prevent the real value of the base limits of liability from 
depreciating over time as a result of inflation and to preserve the 
polluter pays principle embodied in OPA 90, 33 U.S.C. 2704(d) requires 
the President to periodically increase the limits of liability by 
regulation to reflect significant increases in the Consumer Price Index 
(CPI).
    In Executive Order (E.O.) 12777, the President delegated 
implementation of the limit of liability inflation adjustment 
authorities under 33 U.S.C. 2704(d), dividing the responsibility among 
various Federal agencies. Through a series of further delegations, the 
Coast Guard was delegated the President's authority to adjust the 
limits of liability for the following source categories: vessels, 
deepwater ports subject to the DPA (including associated pipelines), 
and transportation-related onshore facilities, not including pipelines, 
motor carriers and railroads (hereinafter ``MTR onshore facilities''). 
The Department of Transportation (DOT) was delegated the President's 
authority to adjust the limits of liability for onshore pipelines, 
motor carriers, and railways (hereinafter ``NMTR onshore facilities''). 
The U.S. Environmental Protection Agency (EPA) was delegated the 
President's authority to adjust the limits of liability for non-
transportation-related onshore facilities (hereinafter ``NTR onshore 
facilities''). Finally, the Department of Interior (DOI) was delegated 
the President's authority to adjust the limits of liability for 
offshore facilities and associated pipelines, other than deepwater 
ports subject to the DPA.
    In addition, on August 4, 1995, the Department of Transportation, 
which then included the Coast Guard, promulgated a facility-specific 
limit for the Louisiana Offshore Oil Port (LOOP) under the deepwater 
port limit of liability adjustment authority at 33 U.S.C. 2704(d)(2). 
(60 FR 39849). That notice specifically contemplated that the LOOP 
limit would be adjusted for inflation to prevent the real value of the 
regulatory limit of liability for LOOP from depreciating over time.
    This proposed rule would be the first CPI adjustment, under 33 
U.S.C. 2704(d), to the limits of liability applicable to responsible 
parties for vessels, and deepwater ports subject to the DPA, including 
LOOP. This rulemaking would also establish the methodology for making 
future inflation adjustments to the OPA 90 limits of liability for all 
source categories for which the Coast Guard has jurisdiction.
    To ensure consistent inflation adjustments to the limits of 
liability for all OPA 90 source categories, the Coast Guard has 
coordinated the adjustment methodology proposed by this Notice of 
Proposed Rulemaking (NPRM) with DOT, EPA, and DOI. In addition, the 
Coast Guard, DOT, EPA, and DOI have agreed to make inflation 
adjustments to the limits of liability for MTR onshore facilities 
(regulated by Coast Guard), NMTR onshore facilities (regulated by DOT), 
NTR onshore facilities (regulated by EPA), and offshore facilities and 
associated pipelines, other than deepwater ports subject to the DPA 
(regulated by DOI), as part of the next inflation increase to the 
limits of liability. This phased approach would establish the 
adjustment methodology proposed by this NPRM for all source categories. 
It also would allow time for additional interagency coordination 
necessary to ensure consistency in implementing the CPI adjustments to 
the limits of liability for onshore and offshore facilities.

How are ``not less than every 3 years'' and ``significant increases'' 
defined?

    As noted above, to prevent the real value of the base limits of 
liability from depreciating over time as a result of inflation and to 
preserve the polluter pays principle embodied in OPA 90, OPA 90 
provides for periodic increases to the limits of liability to reflect 
significant increases in the CPI. Specifically, 33 U.S.C. 2704(d)(4), 
as amended by Section 603 of the Delaware River Protection Act of 2006, 
Title VI of the Coast Guard and Maritime Transportation Act of 2006, 
Public Law 109-241, July 11, 2006, 120 Stat. 516 (DRPA), requires that 
the OPA 90 limits of liability be adjusted ``not less than every 3 
years * * * to reflect significant increases in the Consumer Price 
Index.''
    The word ``increases'' indicates clearly that Congress intended 
that the limits be adjusted under 33 U.S.C. 2704(d)(4) only for 
inflation, and that there would be no decreases to the limits of 
liability due to decreases in the CPI. It, however, is equally apparent 
that, if Congress had wanted the adjustments to occur routinely every 3 
years, the mandate would not have included the qualifier 
``significant''. We looked first to the legislative history to help 
interpret what Congress meant.
    Under OPA 90, 33 U.S.C. 2712 and 2713, when a responsible party is 
entitled to a limit of liability under 33 U.S.C. 2704, the Fund is 
available to pay the removal costs and damages in excess of the limits. 
But Congress did not intend this authority to shift responsibility away 
from the responsible parties onto the victims of oil spills or the 
Fund.
    OPA 90 instead, imposes a duty on the responsible party in the 
first instance to reimburse third-party claimants and the Fund for 
removal costs and damages whenever an oil spill occurs. See, footnote 
1, above. See also, R.V. Randle, ``The Oil Pollution Act of 1990: Its 
Provisions, Intent, and Effects'', OPA 90 Desk Book, p. 3 [OPA's claims 
and financial responsibility ``procedures make very clear that the Oil 
Spill Liability Trust Fund is the fund of last resort to pay claims 
under the Act. Instead the responsible parties and their guarantors are 
the primary insurers against claims for removal costs and oil discharge 
damages''].
    To that end, when enacting OPA 90, Congress increased the limits of 
liability from those contained in prior laws to levels Congress 
believed would preserve the deterrent effects necessary to promote 
caution and best practices by the shipping industry. In that respect, 
Congress intended that the Fund would only be available as a last 
resort for catastrophic events. (See, OPA 90 Desk Book, p. 196, House 
Report 101-242, Part 2, p. 36 (September 18, 1989) [``[The new] 
liability limits are designed to insure due care in transporting oil as 
historically all but the most catastrophic spills would be fully paid 
for by the spiller at these levels. The fund is designed to cover 
catastrophic spills.''])
    The CPI adjustment provisions of OPA 90 originated in Section 
102(c)(4)(B) of the Senate Bill, S. 686. (See, OPA 90 Desk Book, p. 
504, and Statements On Introduced Bills And

[[Page 55000]]

Joint Resolutions, 132 Cong. Rec. S12185-01 (Tuesday, September 9, 
1986). The Senate Report for S. 686 includes the following explanation 
for the provision:

    ``In several of the existing Federal laws on oil spills, the 
liability limits have not been increased in 10 years so that, in 
real dollars, the liability limits have been decreasing over time. 
In order to prevent further diminution of compensation, section 
102(c)(4)(B) requires the President to adjust the limits on 
liability by regulation not less often than every three years to 
take into account significant increases in the Consumer Price 
Index.''

    The Senate Report clarifies that Congress was concerned that 
inflation would erode responsible party liability and shift the 
economic risk of oil spills onto the Fund. (See, Pub. L. 101-380, Oil 
Pollution Act of 1990, S. REP. 101-94, July 28, 1989). Congress also 
clearly believed waiting 10 years to adjust the limits was too long, 
and that adjustments in regular, more frequent, smaller increments 
would better support the polluter pays public policy objectives of OPA 
90.
    The Conference Report Joint Explanatory Statement, at p. 106, also 
describes the mandate as requiring adjustments ``at least once every 
three years'', to reflect significant increases in the CPI. (See, OPA 
90 Desk Book, p. 89, H.R. CONF. REP. 101-653, Joint Explanatory 
Statement, August 1, 1990.) This explanation indicates that the words 
``not less than'' mean that adjustments are permitted, but not 
required, more frequently than every three years. The Conference Report 
does not, however, explain what Congress meant by the word 
``significant''.
    There is no other discussion in the OPA 90 legislative history, and 
we found no other Federal statute that uses the same wording. Congress, 
therefore, plainly left it to the President to give meaning to the term 
``significant''.
    The plain meaning of ``significant'' is ``meaningful'' (see, 
Webster's II New Riverside University Dictionary (1988)), but 
meaningful in respect to what? Consistent with the Congressional focus 
on preserving OPA 90's deterrent effect and avoiding risk shifting to 
the Fund, the Coast Guard analyzed historical data on incident costs. 
We found that even small increases in the CPI can have significant risk 
shifting impacts. (See, Report On Oil Pollution Act Liability Limits, 
U.S. Department Of Homeland Security, United States Coast Guard, 
transmitted to the Senate Committee on Commerce, Science, and 
Transportation on January 5, 2007.) For example, based on our further 
analysis of the historical cost averages in that report, a 1 percent 
per year increase in the CPI will shift incident cost risk from the 
responsible party to the Fund by an estimated $900,000 over three 
years.
    When adjustments to limits of liability are delayed, the Fund will, 
with inflation, inevitably be at risk for a higher share of incident 
costs than intended by OPA 90. Consequently, responsible party risk is 
reduced.
    In consideration of the historical data, the Coast Guard believes 
it is reasonable and consistent with Congressional intent to treat any 
cumulative change in the CPI over a three year period of 3 percent or 
greater as significant and as the appropriate threshold for triggering 
an adjustment to the limits of liability.
    A triennial 3 percent threshold would result in a predictable, 
regular schedule of smaller-increment adjustments for inflation. It 
would thereby maintain the balance Congress sought to strike between 
responsible party risk and Fund risk.

How does the Coast Guard propose to calculate the CPI adjustment to the 
limits of liability for Coast Guard source categories?

    We propose calculating the CPI adjustments to the limits of 
liability for Coast Guard source categories using the following 
formula:

    New limit of liability = Current limit of liability value + 
(Current limit of liability value x percent change in the CPI from 
the time the limit of liability was established, or last adjusted by 
statute or regulation, whichever is later, to the present), then 
rounded to the closest $100.

Which CPI does the Coast Guard propose to use?

    The U.S. Department of Labor, Bureau of Labor Statistics (BLS) 
publishes a variety of inflation indices. We propose using the ``All 
Urban Consumers, Not Seasonally Adjusted, U.S. city average, All items, 
1982-84=100'' index, also known as ``CPI-U''. This is the most current 
and broadest index. It also is commonly relied on in insurance policies 
and other commercial transactions with automatic inflation protection, 
by the media, and by economic analysts.

How would a percent change in the CPI-U be calculated?

    We propose using the escalation formula developed by BLS for 
calculating percent changes in the CPI-U that is described in Fact 
Sheet 00-1, U.S. Department of Labor Program Highlights, ``How to Use 
the Consumer Price Index for Escalation'', September 2000, available 
from the BLS online at http://www.bls.gov. The following example 
illustrates the BLS escalation formula, using a hypothetical three-year 
adjustment period:

------------------------------------------------------------------------

------------------------------------------------------------------------
CPI-U for Current Period (2006)..........  201.6.
Minus CPI-U for Previous Period (2003)...  184.0.
Equals index point change................  17.6.
Divided by CPI-U for previous period.....  184.0.
Equals...................................  0.096.
Result multiplied by 100.................  0.096 x 100.
Equals percent change in the CPI-U.......  9.6 percent.
------------------------------------------------------------------------

The ``Current Period'' and ``Previous Period'' values used in this 
hypothetical are available from the BLS online at http://data.bls.gov.

What ``Previous Period'' dates does the Coast Guard propose to use for 
this rulemaking?

    The ``Previous Period'' we propose using for adjustments to the 
LOOP limit of liability is 1995. This is based on the date the LOOP 
limit of liability was established by regulation, which was August 4, 
1995. (See, 60 FR 39849). The LOOP limit of liability has not been 
adjusted since it was established in 1995. The ``Previous Period'' we 
propose using for adjustments to the limits of liability in 33 U.S.C. 
2704(a), which would apply to all Coast Guard delegated source 
categories other than LOOP, is 2006. This is based on the date of 
enactment of the DRPA, which was July 11, 2006, and is the last date 
the limits of liability in 33 U.S.C. 2704(a) were adjusted.
    We note in respect to the limits of liability in 33 U.S.C. 2704(a) 
that DRPA only increased the limits for vessels. We, therefore, 
considered whether to use a 1990 ``Previous Period'' (based on the date 
of enactment of OPA 90) to adjust the limits of liability for the non-
vessel source categories in 33 U.S.C. 2704(a). Using a 1990 ``Previous 
Period'' would result in an increase to the limits of liability for the 
non-vessel source categories of more than 60 percent.
    The legislative history for DRPA, however, indicates that Congress 
only increased the base limits of liability for vessels in 2006 because 
the vessel limits were the only limits of liability in 33 U.S.C. 
2704(a) that were not adequate. Specifically, Congress was advised in 
Congressional testimony and reports to Congress that the only oil spill 
incidents since enactment of OPA 90 that had resulted in claims against 
the Fund by responsible parties for removal costs and damages in excess 
of the limits of

[[Page 55001]]

liability were vessel incidents.\2\ By comparison, no incident 
involving the other source categories had exceeded the base limits of 
liability in 33 U.S.C. 2704(a). Thus, only the vessel base limits of 
liability needed to be increased at that time to preserve the deterrent 
effect and polluter pays principle embodied in the OPA 90 liability 
provisions. Id.
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    \2\ See, e.g., Coast Guard and Maritime Transportation Act of 
2006: Hearing Before the House Transportation and Infrastructure 
Subcommittee on Coast Guard and Maritime Transportation (April 27, 
2006) (Statements of Rear Admiral Thomas Gilmour, Assistant 
Commandant For Prevention, and Jan Lane, Director, National 
Pollution Funds Center); ``Report on Implementation of the Oil 
Pollution Act of 1990'', U.S. Coast Guard (May 12, 2005) (report 
under Section 705 of the Coast Guard and Maritime Transportation Act 
of 2004, Public Law 108-293, to the Chairmen of the House Committee 
on Transportation and Infrastructure, the Senate Committee on 
Environmental and Public Works, and the Senate Committee, Commerce, 
Science and Transportation).
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What time interval CPI-U does the Coast Guard propose to use for the 
adjustments?

    BLS publishes the CPI-U in both monthly and annual periods. For 
consistency and simplicity, we propose using the annual period CPI-U 
(hereinafter the ``Annual CPI-U'') rather than the monthly period CPI-
U. In this way we can avoid having to publish distinct percent change 
values for the different sources and source categories in future 
adjustment cycles, based on the month when each source or source 
category's limit was established or last adjusted.
    For example, as noted, DRPA updated the limits of liability in 33 
U.S.C. 2704(a) on July 11, 2006. But DRPA did not affect the currently 
applicable limit of liability for LOOP, which was established by 
regulation on August 4, 1995 (60 FR 39849). Thus, if we were to use the 
monthly CPI-U we would always have to calculate the adjustments for 
these two groups using the July and August monthly CPI-U values.
    Under the approach proposed here, the formula for the first set of 
regulatory inflation increases to the limits of liability would yield 
two Annual CPI-U percent change values, one based on the 1995 LOOP 
``Previous Period'' and one based on the 2006 ``Previous Period'' 
applicable to vessels and other deepwater ports. By using the same 
``Current Period'' Annual CPI-U, as proposed by this rulemaking, we 
would be able to increase the limits of liability for all vessels and 
deepwater ports in the next adjustment cycle based on a single Annual 
CPI-U percent change value.

Which Annual CPI-U ``Previous Period'' and ``Current Period'' values 
does the Coast Guard propose to use for the first inflation adjustments 
to the limits of liability?

    For the ``Previous Period'' values, as noted above, we propose 
using the 1995 Annual CPI-U for LOOP and the 2006 Annual CPI-U for the 
other Coast Guard source categories.
    For the ``Current Period'' value, due to the time lag for BLS 
publication of the Annual CPI-U and the time it takes to promulgate 
regulations, we propose adjusting the limits of liability using the 
2008 Annual CPI-U.
    The ``Previous Period'' and estimated ``Current Period'' values we 
propose to use are as follows:
    (a) For LOOP, the ``Previous Period'' using the 1995 Annual CPI-U 
would be 152.4; the ``Current Period'', using the 2008 Annual CPI-U, as 
estimated for purposes of this proposal, would be 213.6.
    (b) For vessels and deepwater ports other than LOOP, the ``Previous 
Period'' using the 2006 Annual CPI-U would be 201.6; the ``Current 
Period'', using the 2008 Annual CPI-U, as estimated for purposes of 
this proposal, would be 213.6.
    Because the 2008 Annual CPI-U will not be published until after the 
date of this proposal, the 2008 Annual CPI-U ``Current Period'' values 
shown here are a forecast using the average of the monthly CPI-U for 
the months of January 2008 through May 2008. We will use the 2008 
Annual CPI-U published by the BLS in the final rule.
    Inserting these values into the BLS escalation formula yields the 
following (estimated) percent changes in the Annual CPI-U (rounded to 
one decimal place):

------------------------------------------------------------------------
                                                                 Percent
------------------------------------------------------------------------
For LOOP......................................................      40.2
For vessels and other deepwater ports.........................       6.0
------------------------------------------------------------------------

What would the adjusted limits be?

    Inserting the estimated percent changes in the Annual CPI-U into 
the adjustment formula would result in the following estimated proposed 
limits of liability for vessels and deepwater ports (rounded to the 
closest $100):

------------------------------------------------------------------------
                                   Current limit of    Proposed limit of
         Source category               liability           liability
------------------------------------------------------------------------
(a) Vessels:
    (1) For a tank vessel         The greater of      The greater of
     greater than 3,000 gross      $3,000 per gross    $3,200 per gross
     tons with a single hull,      ton or              ton or
     including a single-hull       $22,000,000.        $23,320,000.
     vessel fitted with double
     sides only or a double
     bottom only.
    (2) For a tank vessel         The greater of      The greater of
     greater than 3,000 gross      $1,900 per gross    $2,000 per gross
     tons, other than a vessel     ton or              ton or
     referred to in (a)(1).        $16,000,000.        $16,960,000.
    (3) For a tank vessel less    The greater of      The greater of
     than or equal to 3,000        $3,000 per gross    $3,200 per gross
     gross tons with a single      ton or $6,000,000.  ton or
     hull, including a single-                         $6,360,000.
     hull vessel fitted with
     double sides only or a
     double bottom only.
    (4) For a tank vessel less    The greater of      The greater of
     than or equal to 3,000        $1,900 per gross    $2,000 per gross
     gross tons, other than a      ton or $4,000,000.  ton or
     vessel referred to in (3).                        $4,240,000.
    (5) For any other vessel....  The greater of      The greater of
                                   $950 per gross      $1,000 per gross
                                   ton or $800,000.    ton or $848,000.
(b) Deepwater ports subject to
 the DPA:
    (1) For a deepwater port      $350,000,000......  $371,000,000.
     subject to the DPA, other
     than the Louisiana Offshore
     Oil Port (LOOP).
    (2) For LOOP................  $62,000,000.......  $86,924,000.
------------------------------------------------------------------------


[[Page 55002]]

How will the percent change for subsequent periods be calculated?

    Although this rulemaking has been initiated to implement the first 
CPI-related increases to the OPA 90 limits of liability under 33 U.S.C. 
2704(d) for vessels and deepwater ports, the Coast Guard proposes to 
use the same methodology for subsequent CPI adjustments to the limits 
of liability for all Coast Guard source categories.
    Except in instances when increases in the Annual CPI-U over any 
three-year period were not significant, we would calculate future 
adjustments using the cumulative percent change in the Annual CPI-U for 
the previous three available years. Thus, for the 2012 increase 
(assuming a significant increase in the Annual CPI-U), we would 
calculate the Annual CPI-U change using the 2008 Annual CPI-U as the 
``Previous Period'' value for vessels and deepwater ports including 
LOOP, and the 2011 Annual CPI-U as the ``Current Period'' value. Note 
that we would not be able to use the 2012 Annual CPI-U, due to the time 
lag for BLS publication of the Annual CPI-U. We would use the 2006 
Annual CPI-U as the ``Previous Period'' value for MTR facilities.

What if the ``significant'' threshold is not met?

    After the first adjustment, we propose that, for any three-year 
period in which the percent change is not significant, in that the 
cumulative change is less than 3 percent over three years, we would 
publish a notice of no adjustment in the Federal Register, and revisit 
the issue each subsequent year until the cumulative percent change in 
the Annual CPI-U from the last adjustment equals 3 percent or greater. 
We would then base the adjustment on the Annual CPI-U change since the 
last adjustment.
    Thus, if we determined in 2012 that the cumulative percent change 
in the Annual CPI-U from 2008 to 2011 was 2 percent, we would not 
adjust the limits that year. In the following year, 2013, if the 3 
percent change threshold were met, we would adjust the limits of 
liability for all vessels and deepwater ports based on the Annual CPI-U 
percent change from 2008 as the ``Previous Period'' to 2012 as the 
``Current Period''. Note that we would not be able to use the 2013 
Annual CPI-U, due to the time lag for BLS publication of the Annual 
CPI-U. The next adjustment would be three years later, in 2016, 
assuming the cumulative percentage increase between the 2012 Annual 
CPI-U and the 2015 Annual CPI-U was significant.

How does the Coast Guard plan to promulgate subsequent periodic 
adjustments to the limits of liability in the regulations?

    This notice and comment rulemaking provides the public the 
opportunity to comment on the inflation index (Annual CPI-U), 
significance threshold, and calculation methodology the Coast Guard 
proposes to use for the first and subsequent CPI adjustments to the 
limits of liability. Once these technical issues are resolved in the 
final rule for the first set of CPI adjustments proposed here, we do 
not anticipate future CPI adjustments to the limits of liability will 
be controversial.
    In the next rulemaking to adjust the limits of liability, the Coast 
Guard will work with the other delegated agencies (DOT, EPA and DOI) on 
a coordinated rulemaking to adjust the OPA 90 limits of liability for 
all source categories. This would, include adjustments to the limits of 
liability for onshore and offshore facilities based on the Annual CPI-U 
percent change from 2006 as the ``Previous Period'' to 2012 as the 
``Current Period''. The issues to be considered at that time will 
include whether to propose that routine CPI adjustments be implemented 
in the future using a different procedure whenever the level of 
inflation reaches or exceeds the threshold significance amount. Those 
issues will also include whether to propose using the adjustment 
procedure proposed by this rulemaking at Sec.  138.240 in a direct 
final rule, or implementing future CPI increases through self-executing 
regulatory provisions without additional rulemaking procedures. For 
example, if increases to the OPA 90 limits of liability were 
implemented without additional rulemaking procedures, the amount of the 
increases would be calculated in the same manner as proposed here, and 
notice of the increased limits of liability would be given in the 
Federal Register and published in media such as the agencies' Internet 
pages, in advance of the effective date of the increased limits of 
liability.
    If we propose a self-executing approach, we would also consider 
whether to propose provisions to ensure that abnormally large increases 
in inflation would not automatically be translated into abnormally 
large increases in the limits of liability. One possible such provision 
could be to require a notice and comment rulemaking whenever the level 
of inflation for a given period exceeds a set limit. Another could be 
to reserve the Coast Guard and other agencies' discretion to conduct a 
notice and comment rulemaking for any adjustment when the agencies 
conclude that it would be in the public's interest to do so.
    Either of these approaches may be more practical and flexible, and 
would promote predictability and consistency. The specific procedures 
for future adjustments would be determined during the second 
rulemaking.

IV. Discussion of Proposed Rule

    Subpart B. This proposed rule would increase the limits of 
liability for vessels and deepwater ports in 33 CFR part 138, subpart 
B, for inflation, in accordance with the Coast Guard's delegated 
authority for making CPI adjustments under 33 U.S.C. 2704(d). It also 
would establish the formula for making inflation adjustments to the OPA 
90 limits of liability for all Coast Guard source categories, and will 
thereby facilitate future adjustments to the limits of liability to 
reflect significant increases in the CPI.
    The Coast Guard first proposed the creation of subpart B in the 
Financial Responsibility for Water Pollution (Vessels and Deepwater 
Ports) NPRM (73 FR 6642, February 5, 2008; and 73 FR 8250, February 13, 
2008) (hereinafter the ``COFR Rule'') for the purpose of stating the 
OPA 90 limits of liability for vessels and deepwater ports, including 
LOOP, in the regulations. The final COFR Rule was published in the 
Federal Register on September 17, 2008 (73 FR 53691).
    Section 138.220. We are proposing to insert a new Sec.  138.220 to 
add definitions to subpart B, and to renumber Sec.  138.220 as set 
forth in the COFR Rule as Sec.  138.230. New Sec.  138.220 would add 
definitions for ``Annual CPI-U'' and ``Director, NPFC'', and would 
cross-reference certain terms that are used in subpart B and defined in 
OPA 90.
    Section 138.230. We are proposing to increase the limits of 
liability for vessels and deepwater ports, including LOOP, from those 
set forth in Sec.  138.220 of the COFR Rule (proposed Sec.  138.230), 
to reflect significant increases in the CPI.
    Additionally, we propose adding and reserving new subparagraphs 
Sec.  138.230(b)(2)(ii) and (c). This will ensure these subparagraphs 
are available for use for any future rulemaking to establish new 
facility-specific limits of liability for deepwater ports under 33 
U.S.C. 2704(d)(2), and to add the limits of liability for MTR onshore 
facilities, which we expect to adjust during the next adjustment cycle.
    The limits of liability given in this section are estimates, which 
were calculated using an estimated Annual

[[Page 55003]]

CPI-U. The updated limits of liability in the final rule will be 
calculated using the most recent Annual CPI-U available at the time of 
publication of the rule, and may be different than the estimates in 
this NPRM.
    Section 138.240. We propose adding new Sec.  138.240 in 33 CFR part 
138, subpart B to set out the procedure the Coast Guard proposes to use 
to calculate adjustments to the limits of liability contained in 
proposed Sec.  138.230 for significant increases to the CPI.

V. Regulatory Analyses

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

A. Regulatory Planning and Review

    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 Assessment is available in the docket where 
indicated under the ``Public Participation and Request for Comments'' 
section of this preamble. A summary of the Assessment follows:
    There are two regulatory costs that are expected from this proposed 
rule. Regulatory Cost 1: An increased cost of liability to responsible 
parties of vessels and deepwater ports. Regulatory Cost 2: An increased 
cost for establishing and maintaining evidence of financial 
responsibility to responsible parties of vessels. (Deepwater ports are 
not expected to have any increased evidence of financial responsibility 
costs as a result of this proposed rule.)
Discussion of Regulatory Cost 1
    This proposed rulemaking could increase the dollar amount of 
removal costs and damages a responsible party of a vessel or deepwater 
port would be responsible to pay in the event of a discharge, or 
substantial threat of discharge, of oil (hereafter an ``OPA 90 
incident''). Regulatory Cost 1 would, however, only be incurred by a 
responsible party if an OPA 90 incident results in removal costs and 
damages that exceed the vessel or deepwater port's current limit of 
liability. In any such case, the difference between the current limit 
of liability amount and the proposed limit of liability amount would be 
the increased cost to the responsible party.
Affected Population--Vessels
    Coast Guard data, as of May 2007, indicate that, for the years 1991 
through 2006, 41 OPA 90 incidents involving vessels resulted in removal 
costs and damages in excess of the current limits of liability (an 
average of approximately three OPA 90 incidents per year). For the 
purpose of this analysis, we assume that three OPA 90 incidents 
involving vessels would occur per year over a 10-year analysis period 
(2009-2018), with removal costs and damages reaching or exceeding the 
proposed limits of liability for vessels.
Affected Population--Deepwater Ports
    At this time, LOOP is the only deepwater port subject to OPA 90. To 
date, LOOP has not had an OPA 90 incident that resulted in removal 
costs and damages in excess of LOOP's current limit of liability of $62 
Million. Accordingly, for the purpose of this analysis, we assume that 
only one OPA 90 incident would occur at LOOP over the 10-year analysis 
period (2009-2018), with removal costs and damages reaching or 
exceeding the proposed limit of liability for LOOP.
    There are two liquefied natural gas (LNG) deepwater ports currently 
in operation (Gulf Gateway Energy Bridge and Northeast Gateway). In 
2003 and 2007, respectively, however, the Coast Guard determined that 
the designs of the two LNG deepwater ports did not meet the definition 
of an OPA 90 facility under 33 U.S.C. 2701(9). This is because neither 
deepwater port was designed to use structures, equipment or devices for 
purposes of exploring, drilling, producing, storing, handling, 
transferring, processing, or transporting oil. Therefore, unless the 
design and operations at either LNG port is changed, the port will not 
be affected by this proposed rule. We, therefore, assume that LOOP 
would be the only existing deepwater port that could incur increased 
removal costs and damages as a result of this proposed rule.
Cost Summary Regulatory Cost 1
    The average annual cost of this rulemaking resulting from the three 
forecasted vessel OPA 90 incidents per year is estimated to be between 
$1.5 Million and $2.9 Million (non-discounted Dollars). The average 
annual cost of this rulemaking resulting from the one forecasted LOOP 
OPA 90 incident over 10 years is estimated to be between $2.4 Million 
and $2.7 Million (non-discounted Dollars). The 10-year (2009-2018) 
present value at a 3 percent discount rate of this regulatory cost 
(vessels and LOOP) is estimated to be between $34.1 Million and $49.7 
Million. The 10-year (2009-2018) present value at a 7 percent discount 
rate of this regulatory cost (vessels and LOOP) is estimated to be 
between $29.2 Million and $42.5 Million. The low end of the range 
assumes a 5 percent increase in the limits of liability for vessels and 
deepwater ports, except LOOP, and a 39 percent increase in the limit of 
liability for LOOP. The high end of the range assumes a 10 percent 
increase in the limits of liability for vessels and deepwater ports, 
except LOOP, and a 44 percent increase in the limit of liability for 
LOOP. These ranges were analyzed because the value of the 2008 Annual 
CPI-U would not be known until after the publication of this NPRM.
Discussion of Regulatory Cost 2
    Under OPA 90 (33 U.S.C. 2716) responsible parties of vessels and 
deepwater ports are required to establish and maintain evidence of 
financial responsibility to prove that they have the ability to pay for 
removal costs and damages in the event of an OPA 90 incident up to 
their applicable limits of liability. Because this proposed rulemaking 
would increase the limits of liability for vessels and deepwater ports, 
responsible parties may incur additional cost associated with the 
corresponding requirements for establishing and maintaining evidence of 
financial responsibility.
Affected Population--Vessels
    The proposed rule would potentially increase the cost associated 
with establishing financial responsibility under OPA 90 and 33 CFR part 
138 for responsible parties of vessels in two ways. Responsible parties 
using commercial insurance as their method of financial guaranty could 
incur higher insurance premiums. Responsible parties using self-
insurance as their method of financial guaranty would need to seek out 
and acquire commercial insurance for vessels they operate if they were 
no longer eligible for self-insurance based on their working capital 
and net worth. There are approximately 17,064 vessels using commercial 
insurance and 741 vessels using self-insurance methods of guaranty.
Affected Population--Deepwater Ports
    As previously discussed (see Affected Population--Deepwater Ports 
above under Regulatory Cost 1), LOOP is the only deepwater port that 
would be affected by this proposed rule. An

[[Page 55004]]

increase in the LOOP limit of liability of the magnitude proposed by 
this rulemaking, however, is not expected to increase the cost 
associated with establishing and maintaining LOOP's evidence of 
financial responsibility. This is because LOOP uses a facility-specific 
method of providing evidence of financial responsibility to the Coast 
Guard. Specifically, LOOP is insured under a policy issued by Oil 
Insurance Limited (OIL) of Bermuda up to $150 Million per OPA 90 
incident and a $225 Million annual aggregate. The Coast Guard has 
historically accepted the OIL policy, along with the policy's $50 
Million minimum net worth and minimum working capital requirements, as 
evidence of financial responsibility. The Coast Guard does not expect 
that an increase in the LOOP limit of liability of the magnitude 
proposed by this rulemaking would change the terms of the OIL policy, 
result in an increased premium for the OIL policy, or require LOOP to 
have higher minimum net worth or working capital requirements.
Cost Summary--Regulatory Cost 2
    For purposes of calculating Regulatory Cost 2, we assume that this 
rulemaking would cause the insurance premiums for vessels that are now 
commercially insured to increase by 5 percent from current levels. We 
also assume that 2 percent of the vessel responsible parties who use 
self-insurance to provide evidence of financial responsibility would 
migrate to commercial insurance. Depending on the particular year and 
the discount rate used, annual costs of this proposed rule range from 
$1.7 Million to $3.4 Million per year. The 10-year (2009-2018) present 
value at a 3 percent discount rate of this regulatory cost is estimated 
to be between $27.8 Million and $28.6 Million. The 10-year (2009-2018) 
present value at a 7 percent discount rate of this regulatory cost is 
estimated to be between $23.8 Million and $24.6 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.
Total Cost--Regulatory Cost 1 + Regulatory Cost 2
    Depending on the particular year and the discount rate used, annual 
costs of this proposed rule range from $3.8 Million to $9.0 Million per 
year. The 10-year present value of the total cost of this proposed rule 
(Regulatory Cost 1 + Regulatory Cost 2) at a 3 percent discount rate 
would be between $61.9 Million and $78.3 Million. The 10-year present 
value of the total cost of this proposed rule (Regulatory Cost 1 + 
Regulatory Cost 2) at a 7 percent discount rate would be between $53 
Million and $67 Million.
Benefits
    With respect to benefits, this proposed rule is expected to:
     Ensure that the real value of the OPA 90 limits of 
liability keep pace with inflation over time;
     Preserve the polluter pays principle embodied in OPA 90 
and, thereby, ensure that limited Oil Spill Liability Trust Fund (Fund) 
resources can be optimally utilized in responding to future incidents; 
and
     Result in a slight reduction in substandard shipping in 
United States waterways and ports because insurers would be less likely 
to insure substandard vessels to this new level of liability.

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. Based on the threshold analysis conducted below, we determined 
that an Initial Regulatory Flexibility Analysis (IRFA) was not 
necessary for this proposed rule.
Regulatory Cost 1
    Small entities from more than 80 North American Industry 
Classification System (NAICS) codes could be affected by Regulatory 
Cost 1 of this proposed rule. Regulatory Cost 1 would, however, only be 
incurred by a small entity if an OPA 90 incident resulted in removal 
costs and damages that exceeded the vessel or deepwater port's current 
limit of liability.
    Because of the large number of small entities that own or operate 
vessels which carry oil as cargo or fuel, it is not possible to predict 
which specific NAICS Codes might be affected by this proposed rule in 
any given year. Therefore, to quantify the potential economic impact of 
Regulatory Cost 1 on small entities that own or operate vessels, we 
have estimated a high end range of this cost based on historical spill 
cost data for all vessels.
    Coast Guard data, as of May 2007, indicate that for the years 1991 
through 2006 only 41 vessel incidents exceeded the current limits of 
liability (average of approximately three per year). For the purpose of 
this analysis, we assume that three OPA 90 incidents involving vessels 
would occur per year throughout the 10-year analysis period (2009-
2018), with removal costs and damages reaching or exceeding the 
proposed limits of liability for vessels.
    Assuming a worst case scenario that all of the forecasted incidents 
would involve small entities, there would be only three small entities 
affected annually by Regulatory Cost 1. As discussed above in the 
Executive Order 12866 analysis, Coast Guard incident cost data indicate 
that the average annual cost of Regulatory Cost 1 for vessels is 
between $1.5 Million to $2.9 Million (non-discounted Dollars). Dividing 
the average annual cost by the three small entities possibly affected 
equals a per small entity cost of between $487,200 and $974,400 (non-
discounted Dollars).
    As previously discussed, the only deepwater port affected by this 
proposed rule is LOOP. LOOP, however, does not meet U.S. Small Business 
Administration's (SBA's) criteria to be categorized as a small entity.
Regulatory Cost 2
    In this analysis, we researched vessel and deepwater port 
responsible party size and revenue data using public and proprietary 
business databases. We then determined which entities were small based 
on the SBA's criteria on business size standards for all sectors of the 
NAICS.
    There are an estimated 600 small entities that would be affected by 
Regulatory Cost 2. These represent those vessel responsible parties 
required by 33 CFR 138 subpart A to provide evidence of financial 
responsibility to the Coast Guard. As discussed above, LOOP is not 
classified as a small entity.
    We found that 82 distinct NAICS codes were represented in the 
population of small entities (of which 32 contained more than five 
entities). For those small entities using commercial insurance, this 
proposed rule could result in an increased average annual cost of $183 
per vessel. An estimated 2 percent of small entities using self-
insurance are expected to migrate to commercial insurance at an 
increased average annual cost of $7,540 per vessel.
    Of the small entities impacted, 98 percent could experience an 
annual economic impact of less than 1 percent of their annual sales. 
The remaining 2 percent could experience an annual

[[Page 55005]]

economic impact of less than 2 percent of their annual sales.
    Based on this threshold analysis, we certify 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). The Coast 
Guard, however, is seeking comments to inform our decision regarding 
the economic impact of this proposed rule on small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 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: Consumer Price Index Adjustments of Oil Pollution Act of 
1990 Limits of Liability--Vessels and Deepwater Ports
    Summary of the Collection of Information: Not later than 90 days 
after the effective date of the final rule, operators would be required 
to establish evidence of financial responsibility to the applicable 
amounts determined under 33 CFR part 138, subpart A, Sec.  138.80(f), 
based on the limits of liability as adjusted by this rulemaking.
    This proposed rule would 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 the evidence of financial responsibility requirements at 33 CFR 
part 138, subpart A. Without this collection, it would not be possible 
for the Coast Guard to know which operators were in compliance with the 
financial responsibility applicable amounts determined under 33 CFR 
part 138, subpart A, and which were not. Vessels not in compliance 
would be subject to the penalties provided in 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 financial responsibility 
applicable amounts determined under 33 CFR part 138, subpart A, based 
on the limits of liability as adjusted by this rulemaking.
    Description of the Respondents: Operators, as this term is defined 
in 33 CFR part 138, subpart A, and guarantors of vessels that require 
COFRs under 33 CFR part 138, Subpart A.
    Number of Respondents: There are approximately 900 United States 
operators of vessels, 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 occurring not 
later than 90 days after the effective date of the final rule. 
Subsequent submissions that may be required as a result of regulatory 
changes to limits of liability under 33 U.S.C 2704(d) are not included 
here because they will be addressed in future rulemakings.
    Burden of Response: Increased burden associated with reporting 
requirements:

10,000 operators and guarantors x 1.0 hours per response = 10,000 
hours.

    Estimate of Total Annual Burden: We used the ``All Occupations'' 
average hourly wage of $18.84 per hour, found in the May 2006 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 hour wage, we calculate 
total compensation:

$18.84 per hour + ($18.84 per hour x 43 percent) = $27 per hour.

    We then multiplied the number of net burden hours by the burdened 
labor rate calculated above.
    Increased burden associated with the reporting requirements:

10,000 hours x $27 per hour = $270,000.

    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 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.

[[Page 55006]]

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. The Administrator of the Office of Information and 
Regulatory Affairs has not designated it as a significant energy 
action. Therefore, it does not require a Statement of Energy Effects 
under Executive Order 13211.

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 and Department of Homeland Security Management Directive 
5100.1, which guide 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, under the Instructions, 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 the discovery of a significant 
environmental impact from this proposed rule.

List of Subjects in 33 CFR Part 138

    Hazardous materials transportation, Insurance, Limits of Liability, 
Oil pollution, Reporting and recordkeeping requirements, Water 
pollution control.

    For the reasons discussed in the preamble, the Coast Guard proposes 
to amend 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)

    1. The authority citation for part 138 is revised to read as 
follows:

    Authority: 33 U.S.C. 2704; 33 U.S.C. 2716, 2716a; 42 U.S.C. 
9608, 9609; Sec. 1512 of the Homeland Security Act of 2002, Public 
Law 107-296, Title XV, Nov. 25, 2002, 116 Stat. 2310 (6 U.S.C. 552); 
E.O. 12580, Sec. 7(b), 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); 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.

    2. Revise Subpart B to read as follows:

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

Sec.
138.200 Scope.
138.210 Applicability.
138.220 Definitions.
138.230 Limits of liability.
138.240 Procedure for calculating limit of liability adjustments for 
inflation.

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, as 
amended (33 U.S.C. 2704) (OPA 90), including adjustments to the limits 
of liability under Section 1004(d) of OPA 90 (33 U.S.C. 2704(d)). This 
subpart also sets forth the procedures for adjusting the limits of 
liability for inflation.


Sec.  138.210.  Applicability.

    This subpart applies to you if you are a responsible party for a 
vessel as defined under Section 1001(37) of OPA 90 (33 U.S.C. 2701(37)) 
or a deepwater port as defined under Section 1001(6) of OPA 90 (33 
U.S.C. 2701(6)), unless your OPA 90 liability is unlimited under 
Section 1004(c) of OPA 90 (33 U.S.C. 2704(c)).


Sec.  138.220.  Definitions.

    (a) As used in this subpart, the following terms have the meaning 
as set forth in Section 1001 of OPA 90 (33 U.S.C. 2701): responsible 
party, vessel, and deepwater port.
    (b) As used in this subpart--
    CPI-U means the Consumer Price Index All Urban Consumers, Not 
Seasonally Adjusted, U.S. city average, All items, 1982-84=100, 
published by the U.S. Department of Labor, Bureau of Labor Statistics.

[[Page 55007]]

    Director, NPFC means the head of the U.S. Coast Guard National 
Pollution Funds Center (NPFC).
    Double hull has the meaning set forth in 33 CFR part 157.
    Single hull means any hull other than a double hull.


Sec.  138.230.  Limits of liability.

    (a) Vessels. The OPA 90 limits of liability for vessels 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 $3,200 per gross ton or $23,320,000;
    (2) For a tank vessel greater than 3,000 gross tons with a double 
hull, the greater of $2,000 per gross ton or $19,960,000.
    (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 $3,200 per gross ton or 
$6,360,000.
    (4) For a tank vessel less than or equal to 3,000 gross tons with a 
double hull, the greater of $2,000 per gross ton or $4,240,000.
    (5) For any other vessel, the greater of $1,000 per gross ton or 
$848,000.
    (b) Deepwater ports. The OPA 90 limits of liability for deepwater 
ports are--
    (1) Generally. For any deepwater port other than a deepwater port 
with a limit of liability established by regulation under Section 
1004(d)(2) of OPA 90 (33 U.S.C. 2704(d)(2)) and set forth in paragraph 
(b)(2) of this section, $371,000,000;
    (2) For deepwater ports with limits of liability established by 
regulation under Section 1004(d)(2) of OPA 90 (33 U.S.C. 2704(d)(2)):
    (i) For the Louisiana Offshore Oil Port (LOOP), $86,924,000; and
    (ii) [Reserved].
    (c) [Reserved].


Sec.  138.240  Procedure for calculating limit of liability adjustments 
for inflation.

    (a) Formula for calculating a cumulative percent change in the 
Annual CPI-U. The Director, NPFC, calculates the cumulative percent 
change in the Annual CPI-U from the year the limit of liability was 
established, or last adjusted by statute or regulation, whichever is 
later, to the present year, using the escalation formula described in 
Fact Sheet 00-1, U.S. Department of Labor Program Highlights, ``How to 
Use the Consumer Price Index for Escalation'', September 2000. This 
cumulative percent change value is rounded to one decimal place.
    (b) Significance threshold. Every three years from the year a limit 
of liability was established, or last adjusted by statute or 
regulation, whichever is later, the Director, NPFC, will evaluate 
whether the cumulative percent change in the Annual CPI-U since that 
date has reached a significance threshold of 3 percent or greater. For 
any three-year period in which the cumulative percent change in the 
Annual CPI-U is less than 3 percent, the Director, NPFC, will publish a 
notice of no adjustment to the limit of liability in the Federal 
Register. If this occurs, the Director, NPFC, will recalculate the 
cumulative percent change in the Annual CPI-U since the year in which 
the limit of liability was most recently established or last adjusted 
by statute or regulation, whichever is later, each year thereafter 
until the cumulative percent change equals or exceeds the threshold 
amount of 3 percent. Once the 3-percent threshold is reached, the 
Director, NPFC, will increase the limit of liability by an amount equal 
to the cumulative percent change in the Annual CPI-U.
    (c) Formula for calculating inflation adjustments. The Director, 
NPFC, calculates adjustments to the limits of liability in Sec.  
138.230 of this part for inflation using the following formula:

New limit of liability = Current limit of liability value + (Current 
limit of liability value x percent change in the Annual CPI-U from the 
year the limit of liability was established, or last adjusted by 
statute or regulation, whichever is later, to the present year), then 
rounded to the closest $100.

    (d) [Reserved].

    Dated: September 17, 2008.
Craig A. Bennett,
Director, National Pollution Funds Center, United States Coast Guard.
[FR Doc. E8-22444 Filed 9-23-08; 8:45 am]

BILLING CODE 4910-15-P
