[Federal Register Volume 86, Number 228 (Wednesday, December 1, 2021)]
[Rules and Regulations]
[Pages 68123-68149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26046]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 135, 138, and 153

[Docket No. USCG-2017-0788]
RIN 1625-AC39


Financial Responsibility--Vessels; Superseded Pollution Funds

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is issuing regulations to expand vessel 
financial responsibility to apply to all tank vessels greater than 100 
gross tons as required by statute, and to make other amendments that 
clarify and update reporting requirements, reflect current practice, 
and remove unnecessary regulations. These regulations ensure that the 
Coast Guard has current information when there are significant changes 
in a vessel's operation, ownership, or evidence of financial 
responsibility, and reflects current best practices in the Coast 
Guard's management of the Certificate of Financial Responsibility 
program.

DATES: This final rule is effective January 3, 2022.

ADDRESSES: To view documents mentioned in this preamble as being 
available in the docket, go to https://www.regulations.gov, type USCG-
2017-0788 in the search box and click ``Search.'' Next, in the Document 
Type

[[Page 68124]]

column, select ``Supporting & Related Material.''

FOR FURTHER INFORMATION CONTACT: For information about this document 
call or email Benjamin H. White, National Pollution Funds Center, Coast 
Guard; telephone 202-795-6066, email [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Abbreviations
II. Basis and Purpose, and Regulatory History
III. Discussion of Comments and Changes
IV. Discussion of the Rule
V. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Abbreviations

311(k) Fund The fund established by Section 311(k) of the Federal 
Water Pollution Control Act
CERCLA Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980
COFR Certificate of Financial Responsibility
CFR Code of Federal Regulations
CIMS Case Information Management System
DHS Department of Homeland Security
eCOFR Electronic Certificate of Financial Responsibility
EEZ Exclusive Economic Zone
FWPCA Federal Water Pollution Control Act
GT Gross Tonnage
IRFA Initial Regulatory Flexibility Analysis
MISLE Marine Information for Safety and Law Enforcement
NPFC National Pollution Funds Center
NPRM Notice of proposed rulemaking
OCSLA Fund Offshore Oil Pollution Compensation Fund
OMB Office of Management and Budget
OPA 90 Oil Pollution Act of 1990
OSLTF Oil Spill Liability Trust Fund
RA Regulatory Analysis
SBA Small Business Administration
U.S. United States
U.S.C. United States Code
Sec.  Section

II. Basis and Purpose, and Regulatory History

    Responsible parties for certain vessels must establish and maintain 
evidence of financial responsibility, under both the Oil Pollution Act 
of 1990 (OPA 90), as amended, (specifically, 33 U.S.C. 2716) and the 
Comprehensive Environmental Response, Compensation, and Liability Act 
of 1980 (CERCLA) (specifically, 42 U.S.C. 9608). The evidence of 
financial responsibility must meet the maximum amount of liability 
under 33 U.S.C. 2704(a) or (d). Violators of those requirements are 
subject to various penalties under 33 U.S.C. 2716a and 42 U.S.C. 9609.
    The 2010 Coast Guard Authorization Act (Pub. L. 111-281, 124 Stat. 
2988 (October 15, 2010)) expands OPA 90 by adding any tank vessel 
greater than 100 gross tons but less than or equal to 300 gross tons 
using any place subject to U.S. jurisdiction to the population of 
vessels subject to the evidence of financial responsibility 
requirements. The Coast Guard is amending the Code of Federal 
Regulations (CFR) to reflect that statutory change.
    The Coast Guard had previously issued Certificate of Financial 
Responsibility (COFR) regulations at 33 CFR part 138, subpart A, which 
apply to vessels over 300 gross tons, as well as certain other vessels 
depending on how and where they are operated. The Coast Guard has 
modernized and simplified its COFR program since those regulations were 
established. Certain aspects of the COFR program are improved, 
particularly in the COFR requirements for reporting changes in vessel 
operation, ownership, or evidence of financial responsibility that 
affected the basis of the Coast Guard's decision to issue a COFR. 
Finally, the structure of the COFR regulations and some of their 
provisions, including the rules for applying vessel gross tonnage, have 
been modernized to reflect changes in the law and Coast Guard practice, 
since OPA 90's initial legislation.\1\ These changes increase 
flexibility for operators and remove unnecessary administrative 
paperwork burdens to the public and to National Pollution Funds Center 
(NPFC).
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    \1\ This final rule conforms the COFR regulatory text to the 
Coast Guard's ``Tonnage Regulations Amendments'' final rule (81 FR 
18701, March 31, 2016), which amended the U.S. tonnage regulations 
in 46 CFR part 69.
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A. Purpose of COFR Regulations

    Under OPA 90, each responsible party (owners, operators, and demise 
charters) for a vessel 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 (EEZ), is 
jointly and severally liable for the specified removal costs and 
damages up to prescribed limits of liability.\2\ Similar requirements 
pertaining to hazardous substances apply to owners and operators of 
vessels and facilities under 42 U.S.C. 9607 of CERCLA.
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    \2\ OPA 90 defines ``liable'' and ``liability'' as ``the 
standard of liability which obtains under section 1321 of this title 
[Section 311 of the FWCPA].'' 33 U.S.C. 2701(17). Liability under 
Section 311, in turn, ``has been determined repeatedly to be strict, 
joint and several.'' H.R.Rep. No. 101-653, at 780 (1990), reprinted 
in 1990 U.S.C.C.A.N. 779, 780, 1990 WL132747.
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    Under OPA 90 and CERCLA, the responsible parties for certain 
categories of vessels must establish and maintain evidence of financial 
responsibility in accordance with regulations promulgated by the 
Secretary. The purpose of this requirement is to ensure that, in 
advance of an oil pollution incident or a hazardous substance release, 
the responsible parties for the vessels in the specified categories 
have the financial ability to meet their potential liabilities under 
OPA 90 and CERCLA up to the applicable limits of liability.
    Under 33 U.S.C. 2716 evidence of financial responsibility is 
required for the following categories:
    (1) Vessels greater than 300 gross tons (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.
    (2) Vessels using the waters of the EEZ to transship or lighter oil 
destined for a place subject to the jurisdiction of the United States 
(U.S.).
    (3) Tank vessels greater than 100 gross tons using any place 
subject to the jurisdiction of the United States.

B. History of COFR Regulations

    Initially, the Coast Guard established COFR regulations in 33 CFR 
part 138 with an interim rule published July 1, 1994 (59 FR 34210) 
followed by a final rule published March 7, 1996 (61 FR 9264). In 2008 
the Coast Guard amended the COFR regulations and placed them in a newly 
created subpart A of part 138 (73 FR 53691, September 17, 2008).\3\ In 
addition to making several other changes, that final rule removed a 
requirement that responsible parties carry an original or authorized 
copy of the current COFR aboard each covered vessel, because improved 
technology enabled the Coast Guard to view vessel COFRs electronically.
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    \3\ That rule expanded part 138's heading to ``Financial 
Responsibility for Water Pollution (Vessels) and OPA 90 Limits of 
Liability (Vessels and Deepwater Ports)'' and dedicated subpart B to 
the last half of the revised heading--limits of liability for 
vessels and deepwater ports under OPA 90.
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    This 2021 rule follows our consideration of comments on a Notice of 
Proposed Rulemaking (NPRM) published on May 13, 2020 (85 FR

[[Page 68125]]

28802) proposing further changes to part 138, subpart A. Six comments 
were received that raised seven issues. No public meeting was requested 
and none was held.

C. History of Fund Regulations in 33 CFR Part 135 and Subpart D of 33 
CFR Part 153

    The Coast Guard added part 135, titled ``Offshore Oil Pollution 
Compensation Fund,'' to 33 CFR in 1979 (44 FR 16860, March 19, 1979) 
and it added subpart D, titled ``Administration of the Pollution 
Fund,'' to 33 CFR part 153 in 1971 (36 FR 7009, April 13, 1971). This 
rule removes 33 CFR part 135 and subpart D of 33 CFR part 153, which 
concern management of two pollution funds for which OPA 90 repealed the 
authorities. The two defunct funds are the Offshore Oil Pollution 
Compensation Fund (OSCLA Fund) in 33 CFR part 135 and the Federal Water 
Pollution Control Act (FWPCA) Section 311(k) Fund (311(k) Fund) in 
subpart D of 33 CFR part 153.
    On November 1, 2011, the Coast Guard published a notice of inquiry 
(76 FR 67385) soliciting public comment on whether to remove 33 CFR 
part 135.\4\ We received no adverse comments; there were three comments 
supporting the removal of part 135. No comments were received during 
the 2020 NPRM comment period addressing the removal of either 33 CFR 
part 135 or subpart D of 33 CFR part 153. This rule removes those 
portions of the CFR.
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    \4\ The notice of inquiry was initially published as part of the 
Coast Guard's Claims Procedures Under the Oil Pollution Act of 1990 
rulemaking. However, this rulemaking was closer to completion, so 
the removal of 33 CFR part 135 has been included with this 
rulemaking.
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III. Discussion of Comments and Changes

    The Coast Guard received six comment submissions raising seven 
issues during the 90-day public comment period for the proposed rule, 
which closed on August 11, 2020. The letters we received during the 
public comment period were from three COFR guarantors, a regional 
citizen group, an insurance trade association and an insurance 
underwriter. The following discussion summarizes the public comments we 
received and our responses to the comments. In general, commenters were 
very supportive of the changes. Three regulatory changes from those we 
proposed were made based on the comments received.
    Supportive comments. One commenter generally supports proposed 
changes that would assist vessel operators and the U.S. Coast Guard 
National Pollution Funds Center (NPFC) in effectively managing the 
Certificate of Financial Responsibility Program. Another commenter 
further supports reporting GT tonnage measurement systems and 
submitting the GT certifying document upon request.
    Terminology comments. Two commenters addressed terminology 
clarifications in section 138.30 of the proposed rule. While one 
commenter was supportive of terminology clarifications, the other 
commenter cited the term ``responsible party'' as an example of 
terminology that could lead to confusion if the definitions were not 
compatible with the relevant statutes. The Coast Guard agrees with this 
commenter and as proposed, had modified some definitions to cross 
reference to the relevant statutes but notes that the definition of 
``responsible party'' had non-substantive changes in the proposed rule 
to better align with OPA 90.
    Improved technology comments. A commenter supports our proposed 
revisions to the COFR regulations to incorporate improved management 
practices and technological advances in 138.60. The changes include 
several minor changes in 138.60 to make it easier for operators to file 
information electronically, by explicitly allowing scanned documents 
and email or faxed submissions. The rule also modifies past technical 
amendments to implement Electronic COFRs, which makes it easier to keep 
COFR information updated as vessel operations change. This will 
increase flexibility for operators and remove unnecessary 
administrative paperwork burdens to the public.
    Director's discretion to grant a waiver comment. One commenter 
notes that proposed section 138.60(e) appears to restrict the 
discretion available to the Director in the granting of exceptions, and 
does not permit the granting of a waiver if an application is made 
where a vessel is set to arrive within 21 days from the application 
date. Accordingly, the commenter recommends that a variation of the 
original ``discretion'' language contained in the existing rule be 
retained for the proposed Section 138.150 prior notice requirements. We 
agree with the commenter that the discretionary language is too 
restrictive, and are removing the written request requirement for 
requesting an exception under 138.60(e). The phrase ``only upon written 
request, submitted as provided in paragraph (c) and (d) of this 
section, in advance of the deadline and'', has been removed from the 
regulatory text, as well as the sentence: ``the Director will not grant 
a deadline exception request that does not set forth the reasons for 
the request and that does not give NPFC sufficient time to consider and 
act on an Application or a request for COFR renewal before the COFR is 
required.'' The Director may now grant an exception for good cause 
shown.
    Surety Bonds comment. One commenter expressed concern with removing 
the reference to surety bonds from section 138.110, stating that they 
disagree with the assertion that a surety is unnecessary because it has 
rarely been used to meet the financial responsibility requirement. We 
disagree with this commenter. While this final rule removes the surety 
bond as a specifically mentioned method for establishing and 
maintaining evidence of financial responsibility, surety bonds are 
still a viable option. They have not been eliminated as an acceptable 
method; they may still be permitted under the ``other guaranty methods 
for establishing evidence of financial responsibility'' provided that 
the COFR Operator completes the requirements 138.110(f) and upon the 
Director's acceptance of that method. We did not make a change from the 
proposed rule based on this comment.
    Reason for termination of guaranty comments. One commenter supports 
the inclusion of the reporting requirement of the reason for 
termination of a guaranty by a guarantor in 138.110(a)(3)(i). Another 
commenter disagrees, stating that requiring guarantors to report 
information, such as reasons for canceling a guaranty would make them 
become an enforcement mechanism for the Coast Guard, and would require 
them to breach non-disclosure agreements with customers. We disagree 
with the latter commenter. The regulatory text in 138.110(a)(3)(i) 
requests the guarantor provide NPFC the reason for termination, if 
known. It is not intended to make the guarantor engage in any type of 
an enforcement mechanism on behalf of the Coast Guard. We did not make 
a change from the proposed rule based on this comment.
    Evidence of financial responsibility comments. One commenter seeks 
clarification on the new provisions in section 138.110(b)(2)(i)--in 
particular, they ask what evidence is actually required to establish 
ability to issue COFR guarantees and to what levels? The regulation is 
not specific as to what evidence is required, nor should it be. It 
offers a few items as examples that will influence the decision, but 
largely maintains NPFC's discretion. The purpose and focus of the 
regulation is to provide general guidelines, but also allow for 
flexibility, subject to the Director's discretion. The commenter

[[Page 68126]]

further states that when and if these rule changes take effect, it 
would appear that a request for initial determination of acceptability 
to serve as COFR Insurance Guarantor must be made 90 days before 
issuing a guaranty. That statement is correct. Finally, the commenter 
asks whether this is only for a new guarantor. That is, will existing 
approvals be grandfathered in or is the new provision essentially a 
revocation of all existing guarantors who must restart the process 
before the rule can take effect? Under the final rule, prior COFR 
insurance guarantors do not lose their status and do not have to 
restart the process. It was never NPFC's intention to revoke all 
existing guarantors and start over; those guarantors already approved 
will continue to be approved. We did not make a change from the 
proposed rule based on this comment.
    The same commenter states that while it has no objection to having 
to establish continued acceptability of asset levels each year as set 
forth in section 138.110(b)(2)(ii), any requirement that guarantors 
report on themselves is vague and nebulous. Without guidance in the 
proposed rule, guarantors will be unable to determine what constitutes 
material changes in financial condition that need to be reported. We 
disagree with this commenter. A guarantor should know if their 
financial situation has changed or if other major changes have occurred 
that should be reported, such as a change that would impair their 
ability to fully satisfy their financial responsibility obligations 
under OPA 90, or a material condition that affects their ability to pay 
claims, or incur the expense of paying for cleanup. If there is no 
change, the guarantor should be able to report ``no change.''
    Withdrawal of application comments. Two commenters note that a COFR 
Operator is permitted under proposed section 138.140(a) to withdraw an 
Application for a COFR at any time prior to issuance of a COFR and 
suggests that section should be amended to include and permit the 
withdrawal of any Application made on behalf of the COFR Operator or 
responsible party, including by a COFR guarantor. We agree that a COFR 
Guarantor should also have the ability to withdraw an application for a 
COFR at any time prior to its issuance. As a result, we will be 
revising the regulatory text in 138.140(a) to add the clause ``or 
anyone authorized to act on their behalf'' after ``A COFR Operator.'' 
Section 138.140(a) will now read: A COFR Operator, or anyone authorized 
to act on their behalf, may withdraw an Application at any time prior 
to issuance of the COFR.
    Reporting requirements comments. While two commenters support the 
changes in 138.150, several commenters oppose them. An opposing 
commenter believes these requirements are unrealistic, unreasonable, 
and impracticable and thus should be revised to deal with the realities 
of the industry without compromising the purposes for which COFR 
guaranties are issued. That same commenter continues by stating that 
the 21-day and 3-day prior reporting requirements are in many cases 
unrealistic and unworkably inconsistent with how vessels are scheduled 
to call in the United States. The commenter gave an example of a 
foreign vessel without a COFR which suddenly must make a call to a U.S. 
port, either for a repair or a spot charter to receive goods from a 
U.S. port, causing that vessel to apply for a COFR opportunistically.
    We disagree with this commenter. The scenario that this commenter 
describes does not apply to the revised 138.150. The 21-day 
notifications in 138.150(b) requiring issuance of a new COFR and 3-day 
notification in 138.150(c) not requiring issuance of a new COFR refer 
to pre-existing COFRs, which must now be either replaced, or updated, 
based on a change of circumstances in the pre-existing COFR. The 
scenario of a foreign vessel without a COFR requiring a COFR prior to 
entry into a U.S. port will follow the procedures set forth in 138.60 
and 138.70 for issuance of a new COFR. A ``waiver'' is still available 
under 138.60(e)(3), permitting the Director to grant an exception to a 
deadline for good cause shown.
    Two commenters allege that the reporting requirements in 138.150(b) 
are duplicative. One commenter states that COFR guarantors should not 
be required to report changes that have already been reported to the 
Director by a COFR Operator, even though the COFR guarantor will 
receive notice of such changes (and thus in the ordinary course of its 
business) pursuant to section 138.150(b). Otherwise an unnecessary 
double reporting requirement will exist in the new regulations. The 
other commenter almost reiterates the previous commenter, stating that 
it is noted that COFR Operators are required by section 138.150(b) to 
give notice to their COFR guarantors, at the same time that they give 
notice to the Director, of changes that may require issuance of a new 
COFR. The commenter continues by saying that COFR guarantors should not 
be required to report the same changes, which have already been 
reported to the Director by a COFR Operator. Finally, the commenter 
says that otherwise, an unnecessary and redundant reporting requirement 
will exist in the new regulations. The commenters presume that the 
operator has reported the information to the Coast Guard. If the Coast 
Guard receives the information from two different sources, it will 
validate the information received.
    Four commenters expressed concern with the reporting requirement 
imposed on them in proposed section 138.150(d). The commenters' 
principal concern is that the new reporting requirement requires 
guarantors to report changes to vessels that the guarantor can't 
possibly give notice until they themselves are given notice by the 
vessel operator. A secondary concern held by the commenters is that the 
new reporting requirement will require guarantors to breach non-
disclosure agreements in place with customers should it take effect. 
NPFC agrees with the group of commenters regarding section 138.150(d). 
As a result, we are amending the regulatory text to limit a guarantor's 
obligation to report material changes in prior COFR Applications to 
information of which it becomes aware in the ordinary course of its 
business. We have inserted ``once known, or should have known, in the 
ordinary course of business,'' after the phrase ``explaining the reason 
for the intended termination.'' The final sentence ``In addition, each 
guarantor (or, if there are multiple guarantors, each lead guarantor) 
must give the Director notice by email or other electronic means as 
soon as possible before any other change occurs that would require new 
evidence of financial responsibility or issuance of a new COFR under 
paragraph (b) of this section.'' has been deleted.
    Several suggestions were made that were outside of the scope of 
this rulemaking, and therefore we will not address them here.

IV. Discussion of the Rule

    After considering these comments received on the NPRM published May 
13, 2020 (85 FR 28802), we are issuing this final rule that revises 33 
CFR part 138, subpart A, and removes the superseded regulations in 33 
CFR parts 135 and 153. We explain specific changes this final rule 
introduces below.

A. Overview of Changes to Existing COFR Regulations

    Following is an overview of revisions to 33 CFR part 138, subpart 
A:
    (1) Evidence of financial responsibility for tank vessels greater 
than 100 gross tons but less than or equal to 300 gross tons. As 
required by 33 U.S.C. 2716(a)(3), we extend the

[[Page 68127]]

regulatory requirement to establish and maintain evidence of financial 
responsibility to any tank vessel greater than 100 gross tons but less 
than or equal to 300 gross tons using any place subject to the 
jurisdiction of the United States.
    (2) Reporting requirements. We also reorganize, clarify, and update 
the reporting requirements for submitting a COFR Application. Examples 
of new requirements include documenting evidence of financial 
responsibility submitted in support of an Application or a request for 
COFR renewal and adding into regulatory text the current practice of 
guarantor notification.
    This set of changes--including Sec.  138.150, which is dedicated to 
reporting requirements and expressly links those requirements to 
enforcement provisions--aims to address instances in which COFR 
Operators fail to report changes to their status, as was previously 
required by 33 CFR 138.90(e). These failures included failing to report 
a vessel's financial changes in a timely manner, failing to report a 
vessel transfer to a new owner, and failing to secure a guaranty and 
apply for a new COFR--and had resulted in compliance gaps. These 
previous gaps compromised emergency responses where an inability to 
confirm financial responsibility had caused untimely responses to oil 
spills and undermined the COFR program.
    Lastly, these revisions ensure that the Director receives the most 
current and accurate information when issuing a COFR. These revisions 
improve the Coast Guard's ability to verify vessel compliance with COFR 
regulations. For example, if an owner sells a vessel located in a place 
subject to U.S. jurisdiction, the new owner is now a responsible party 
and is immediately subject to the COFR program. However, enforcing 
compliance with the COFR program's requirements depends on the Coast 
Guard knowing about the vessel transfer. The regulatory revisions 
mitigate the risk of uninsured responsible parties and derelict 
vessels.
    (3) Revise COFR regulations to incorporate improved management 
practices and technological advancements. We also amend the COFR 
regulations to reflect changes in the NPFC's management of the COFR 
program. The revisions include the following:
     Expressly authorizes COFR Operators, guarantors, and 
agents for service of process to submit signed scanned documents;
     Permits COFR Operators submitting Applications or requests 
for COFR renewal by email or fax to pay the COFR Application and 
certification fees up to 21 days after submission. This method replaces 
the requirement to pay certification fees before the NPFC issues the 
COFR;
     Updates and simplifies the provisions that detail how to 
apply gross tonnage assigned under different measurement systems. This 
reflects changes in the law since OPA 90's initial legislation and 
conforms the regulatory text to the Coast Guard's ``Tonnage Regulations 
Amendments'' final rule (81 FR 18701, March 31, 2016), which amended 
the U.S. tonnage regulations in 46 CFR part 69;
     Adds new provisions describing the COFR program's 
procedures for determining the acceptability of COFR guarantors; and
     Implements the Electronic COFR (eCOFR). These regulatory 
changes help manage the COFR program more effectively, reduce the 
burden to the public, and accommodate the frequent changes in vessel 
operation during the normal course of maritime commerce.
    (4) Clarifies terminology. Terminology in COFR regulations is now 
consistent with applicable law and COFR program business practices. 
These changes included using terms of art consistently and simplifying 
terminology.

B. Discussion of Specific Changes to Existing COFR Regulations

    Table 1 provides a section-number crosswalk between the existing 
COFR regulations and those in this final rule. The crosswalk assists 
the reader in comparing those currently in the CFR with those that will 
become effective January 3, 2022. Following table 1 is a discussion of 
the substantive changes, including new requirements or updates to the 
rule that match current Coast Guard practice. We applied plain language 
doctrine required by Executive Order 13563 to make these regulations 
easier to understand.

 Table 1--Crosswalk of Existing COFR Regulations and Those in This Final
                                  Rule
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       Existing COFR regulations           Final rule COFR regulations
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Part 138--Financial Responsibility for   Part 138--Evidence of Financial
 Water Pollution (Vessels) and OPA 90     Responsibility for Water
 Limits of Liability (Vessels,            Pollution (Vessels) and OPA 90
 Deepwater Ports and Onshore              Limits of Liability (Vessels,
 Facilities).                             Deepwater Ports and Onshore
                                          Facilities).
Subpart A--Financial Responsibility for  Subpart A--Evidence of
 Water Pollution (Vessels).               Financial Responsibility for
                                          Water Pollution (Vessels).
Sec.   138.10 Scope....................  Sec.   138.10 Scope and
                                          purpose.
Sec.   138.15 Applicability............  Sec.   138.20 Applicability.
Sec.   138.20 Definitions..............  Sec.   138.30 Definitions.
Sec.   138.30 General..................  Sec.   138.40 General
                                          requirements.
Sec.   138.30(c) through (f)...........  Sec.   138.50 How to apply
                                          vessel gross tonnages.
Sec.   138.40 Forms....................  Sec.   138.60 Forms and
                                          submissions; ensuring
                                          submission timeliness.
Sec.   138.45 Where to apply for and     Sec.   138.60 Forms and
 renew Certificates.                      submissions; ensuring
                                          submission timeliness.
Sec.   138.50 Time to apply............  Sec.   138.80 Applying for
                                          COFR.
Sec.   138.60 Applications, general      Sec.   138.80 Applying for
 instructions.                            COFR.
Sec.   138.65 Issuance of Certificates.  Sec.   138.70 Issuance and
                                          renewal of COFR.
Sec.   138.70 Renewal of Certificates..  Sec.   138.90 Renewing COFR.
Sec.   138.80 Financial responsibility,  Sec.   138.110 How to establish
 how established.                         and maintain evidence of
                                          financial responsibility.
Sec.  Sec.   138.80(f) [untitled] and    Sec.   138.100 How to calculate
 138.85 Implementation schedule for       a total applicable amount.
 amendments to applicable amounts by
 regulation.
Sec.   138.90(a)-(c) Individual and      Sec.   138.80 Applying for
 Fleet Certificates.                      COFR.
Sec.   138.90(d) and (e), untitled.....  Sec.   138.150 Reporting
                                          requirements.
Sec.   138.100 Non-owning operator's     Sec.   138.160 Non-owning COFR
 responsibility for identification.       Operator's responsibility for
                                          identification.
Sec.   138.110 Master Certificates.....  Sec.   138.80 Applying for
                                          COFR.
Sec.   138.120 Certificates, denial or   Sec.   138.140 Application
 revocation.                              withdrawals, COFR denials and
                                          revocations.
Sec.   138.130 Fees....................  Sec.   138.120 Fees.

[[Page 68128]]

 
Sec.   138.140 Enforcement.............  Sec.   138.170 Enforcement.
Sec.   138.150 Service of process......  Sec.   138.130 Designating
                                          agents for service of process.
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Sec.  138.10 Scope and Purpose
    The scope of subpart A Sec.  138.10(a)(2) includes the standards 
and procedures the Coast Guard uses to determine guarantor 
acceptability. In addition, the scope of subpart A Sec.  138.10(a)(3) 
includes the reporting requirements for guarantors. These changes for 
submitting evidence of financial responsibility on behalf of the COFR 
Operator reflect current practice.
Sec.  138.20 Applicability
    As required by statute, Sec.  138.20(a)(1) extends the 
applicability of the rule to include tank vessels greater than 100 
gross tons but less than or equal to 300 gross tons, regardless of 
whether it is transshipping or lightering oil. This provision expands 
the population of vessels under 300 gross tons that are required to 
establish and maintain evidence of financial responsibility under 33 
U.S.C. 2716. The existing regulation includes any tank vessel using the 
waters of the EEZ to transship or lighter oil destined for a place 
subject to the jurisdiction of the United States, but if a tank vessel 
is not engaged in transshipping or lightering, the existing regulation 
has an exception for those that are 300 gross tons or less.
    In Sec.  138.20(a)(2) through (a)(4), we extend the applicability 
of the rule to include guarantors, responsible parties other than the 
COFR Operator, and agents of process. This action is in accordance with 
current practice.
Sec.  138.30 Definitions
    We cross-referenced additional statutory and regulatory 
definitions, added new regulatory definitions, amended regulatory 
definitions, and removed definitions that were not used.
    The following definitions reflect substantive changes from existing 
regulations:
    Applicant and certificant: We replaced the confusing terms 
``applicant'' and ``certificant'' with the term ``COFR Operator'' 
throughout the COFR regulations. This action promotes consistency with 
the COFR program's business practice that authorizes the COFR Operator 
designated in the ``Application'' to represent the responsible parties 
for purposes of compliance with the COFR program.
    COFR Operator: We redefined ``COFR Operator'' to clarify when we 
are referring to the operator who is liable in the event of an incident 
or a release. We also replaced the previous term ``Operator'' with the 
term ``responsible party.'' This rule defines the term ``responsible 
party,'' for purposes of OPA 90 and CERCLA evidence of responsibility, 
by cross-reference to the relevant statute, and includes all those 
persons who meet the definition. This replacement of the term 
``operator'' with the terms ``responsible party'' and ``COFR Operator'' 
makes clear that the designation of a ``COFR Operator'' to act on 
behalf of the responsible parties for purposes of the COFR program does 
not limit or preclude other responsible parties from being operators 
within the meaning of OPA 90 or CERCLA. We also expressly clarify that, 
when there is more than one responsible party, the COFR Operator is the 
operator designated and authorized by all the vessel's responsible 
parties to act on their behalf to comply with the COFR program.
    Fleet Certificate and Individual Certificate: A new definition for 
the term ``Fleet Certificate'' parallels the definition of ``Master 
Certificate,'' and a new definition for the term ``Individual 
Certificate,'' so that COFR regulations will include definitions for 
all three types of Certificates issued by the Director.
    Financial guarantor: We revise the definition to make clear that a 
financial guarantor cannot also be a self-insurer of a vessel, but that 
it is possible for the self-insurer of one vessel to be the financial 
guarantor for a different vessel.
    Owner: We remove the prior regulatory definition of ``owner.'' It 
did not accurately reflect current law, and it was not clear that a 
separate regulatory definition of ``owner'' is needed or helpful, as 
both OPA 90 and CERCLA define the term ``owner'' and we now cross-
reference those definitions.
    Tank vessel: We removed the regulatory definition of ``tank 
vessel,'' cross-referencing the OPA 90 statutory definition in Sec.  
138.30(a), and moved the exceptions to applicability to Sec.  
138.20(d)(3).
    Vessel: We removed the regulatory definition of ``vessel'' and 
cross-reference in Sec.  138.30(a) the statutory definitions that 
appear in OPA 90 and CERCLA. This is because there are slight 
differences in the OPA 90 and CERCLA definitions, specifically in the 
reference to public vessels in OPA 90. Therefore, although other 
provisions of the existing COFR regulations resolve these differences, 
we believe the better way to resolve the wording differences is to 
cross-reference the statutory definitions. This approach ensures that 
COFR-regulation definitions will always be consistent with OPA 90 and 
CERCLA.
Sec.  138.50 How To Apply Vessel Gross Tonnages
    The previous COFR regulations provided instructions to apply 
different gross tonnage measurements for three different purposes: (1) 
To determine whether a tonnage threshold applies; (2) to calculate a 
vessel's OPA 90 and CERCLA applicable amounts of financial 
responsibility; and (3) to determine the vessel's OPA 90 and COFR 
limits of liability. However, these provisions were complex, and had 
been difficult to apply, in part because they were developed and 
established prior to the full coming into force of the International 
Convention on Tonnage Measurement of Ships (June 23, 1969) on July 18, 
1994. Furthermore, the 2010 Coast Guard Authorization Act included 
amendments that updated, clarified, and eliminated inconsistencies in 
the tonnage measurement law. The Coast Guard implemented these 
amendments in the 2016 rule,\5\ which also incorporated changes to help 
provide a suitable framework for tonnage-based regulations, allowing 
the Coast Guard to specify tonnage thresholds more clearly. This rule 
maintains the purposes of applying gross tonnage measurements explained 
in the COFR regulations.
---------------------------------------------------------------------------

    \5\ ``Tonnage Regulations Amendments'' final rule (81 FR 18701, 
March 31, 2016).
---------------------------------------------------------------------------

    This rule separates provisions for applying vessel gross tonnage in 
Sec.  138.50 and clarifies and simplifies the language while conforming 
with the 2016 amendments to the U.S. tonnage regulations. We added a 
table to illustrate use of gross tonnages assigned under the two 
overarching tonnage measurement systems provided for by U.S. law.\6\
---------------------------------------------------------------------------

    \6\ These systems are under the Convention Measurement System, 
which expresses gross tonnage as ``GT ITC,'' and the Regulatory 
Measurement System, which expresses gross tonnage as ``GRT.''

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

[[Page 68129]]

    In Sec.  138.50(f), regardless of the tonnage reported on the 
Application, the appropriate tonnage-certifying document as provided 
for under the U.S. tonnage regulations, such as a tonnage certificate 
or completed Simplified measurement application, governs in determining 
the evidence of financial responsibility applicable amounts, except 
when the responsible parties or guarantors knew or should have known 
that the applicable tonnage certificate was incorrect. In the event of 
an oil pollution incident or hazardous substance release, the tonnage-
certifying document governs the applicable limit of liability. This 
information is vital to the COFR program because the guaranty is to the 
certified tonnage at the time of the incident, and addresses what 
happens if a vessel undergoes a modification that affects the tonnage 
after a COFR Operator submits an Application. This approach also 
creates certainty by removing the implication that a tonnage re-
measurement at the time of an incident can supersede liability and 
financial responsibility as reflected on the tonnage-certifying 
document.
    The addition in Sec.  138.50(g) also requires COFR Operators to 
submit, upon request, the original or a copy of the tonnage certifying 
document(s). The rule captures the fact that, in some circumstances, 
vessels may be assigned tonnage under both measurement systems.
Sec.  138.60 Forms and Submissions; Ensuring Submission Timeliness
    To remain consistent with current practice, Sec.  138.60(a) notes 
that forms can be completed online or downloaded. This is the Coast 
Guard's preference for submitting eCOFR Applications. If you submit 
electronic images, please note that, currently, our system only accepts 
the following imaging programs: PDF, JPEG, and TIFF. Because of delays 
associated with mail processing and security, submission of forms by 
mail is discouraged.
    Section 138.60(c)(2) also removes the option for hand-delivering 
submissions because of the prohibition of hand delivery under U.S. 
Government mail security restrictions. Also, Sec.  138.60(e) makes 
clear that the timeliness of submissions is solely the responsibility 
of the person making the submission.
    Section 138.60(e)(3) was revised after comment to continue waivers, 
which permit the Director to grant an exception to a deadline for good 
cause shown.
Sec.  138.70 Issuance and Renewal of COFR
    Section 138.70(b) removes the express requirement to pay fees 
before the issuance of a COFR. This reflects the NPFC's current 
business practice when the COFR Operator submits the application via 
fax or email.
    Section 138.70(e) states that certain tonnage information will be 
posted to the NPFC's COFR website, including the measurement system(s) 
used, which under Sec.  138.80(a)(1), the applicant is required to 
provide.
Sec.  138.80 Applying for COFRs
    Section 138.80 reflects the removal of a requirement to pay fees 
before the issuance of a COFR when Applications are submitted by email 
or fax by cross-referencing Sec.  138.120's new paragraph (a)(3)(i) 
that allows payment to be made within 21 days of the Application. This 
allows flexibility for the Director to issue COFRs when the Application 
is complete and evidence of financial responsibility has been 
established, and before the NPFC receives payment. The COFR Operator 
must, however, ensure the fees are paid within 21 days of submission of 
the Application to avoid adverse consequences specified in Sec.  
138.120(a)(4).
    Section 138.80(a)(1)(i)(C) also clarifies that Master Certificates 
do not name any specific vessel, but do state the maximum tonnages for 
the largest vessel for which the COFR Operator may be responsible. 
Without that requirement, we will not have a record of coverage if an 
incident occurs in the intervening period between the Application and 
the first periodic report of covered vessels.
    Section 138.80(a)(1)(iv) requires the COFR Operator to include a 
report with the Application providing information on the vessels 
covered by the Master Certificate. The rule also explains what 
information the COFR Operator must provide to the Director if a vessel 
has been assigned tonnages under both measurement systems. The 
inclusion of both assigned tonnages for vessels with more than one 
should avoid delay of the application process and the effective date of 
the guaranty.
    Additionally, Sec.  138.80(a)(1)(iv)(B) requires that certain 
Master Certificate application information be updated, including a 
listing of vessels that are no longer covered. This establishes the 
termination of the guaranty date. Finally, to assist in keeping this 
information up to date, if during a 6-month reporting period a vessel 
is transferred to another responsible party, the updated report must 
list the date and place of transfer and the contact information of the 
responsible party to whom the vessel was transferred.
    Unlike the previous application instruction section, Sec.  138.60, 
Sec.  138.80(d) does not require an original signature page for 
applications submitted by email or fax. Instead, the COFR Operator may 
submit a legible scan of the signature page.
Sec.  138.100 How To Calculate a Total Applicable Amount
    Section 138.100(c) states that when statute or regulation adjusts 
limits of liability, the COFR Operator must establish and maintain 
evidence of financial responsibility in an amount equal to or greater 
than the amended total applicable amount, as provided in Sec.  
138.240(a).
Sec.  138.110 How To Establish and Maintain Evidence of Financial 
Responsibility
    The rule removes from the regulation the surety bond as a 
specifically mentioned method for establishing and maintaining evidence 
of financial responsibility. This method is still permitted as falling 
under the ``other method'' provision in paragraph (f).
    Section 138.110(a) explains that the guarantor continues to be 
liable and must provide coverage for 30 days following NPFC receipt of 
a notice of cancellation and not from the date the guarantor issues the 
notice. The rule moves this provision previously contained on the COFR 
guaranty forms into the regulation and reflects a current and important 
NPFC business practice. The guarantor will provide the reason for 
termination as part of its notice of cancellation, if known. 
Additionally, Sec.  138.110(a) requires COFR Operators, guarantors, and 
self-insurers to notify the Director of any material change in 
submitted information, including any material change in the guarantor 
or self-insurer's financial position. A material change is a change 
that will affect the basis of the Director's approval of the guarantor 
or evidence of financial responsibility. This notification is required 
immediately when a change occurs, rather than within 10 days of the 
change as specified in the previous rule.
    Section 138.110(b) describes the current practice for establishing 
and maintaining the acceptability of COFR insurance guarantors. This 
will entail the guarantor submitting information on its structure, 
business practices, history, financial strength, and other information 
as requested by the Director. This process involves an initial 
determination followed by annual submission by each COFR insurance 
guarantor.

[[Page 68130]]

    Section 138.110(c) clarifies the net worth and working capital 
requirements for financial guarantors to reflect current practice. 
Previously, the NPFC did not add the total applicable amount of each 
vessel owned by one operator; rather, it based evidence of financial 
responsibility on the operator's vessel with the greatest total 
applicable amount. This rule requires net worth and working capital be 
based on the aggregate total applicable amounts.
    Section 138.110(f) changes the submission date for requesting 
another guaranty method for establishing evidence of financial 
responsibility from 45 to 90 days prior to the date the COFR is 
required. The NPFC needs this additional 45 days to review the 
financial documentation and communicate with the potential guarantor.
Sec.  138.120 Fees
    Section 138.120 eliminates a previous requirement that the 
application fee must be paid before the Director will issue a COFR. 
This adds flexibility and convenience for COFR Operators, especially if 
they are underway and want to enter U.S. navigable waters or U.S. EEZ. 
It further explains that failure to pay fees in a timely manner may 
result in denial or revocation of COFR, debt collection, or other 
enforcement. Finally, it amends the fee refund procedures in the case 
of overpayment. The Director will refund overpayments, because the NPFC 
will not credit overpayments for the operator's future use or for 
transfer to another operator anymore.
Sec.  138.130 Designating Agents for Service of Process
    Section 138.130(d) shortens the notification period for a COFR 
Operator or Guarantor to notify the Director of a new agent for service 
of process from 10 days to 5 days. This shortened period reflects 
efficiencies relating to electronic notifications in place of mailed 
notifications.
Sec.  138.140 Application Withdrawals, COFR Denials and Revocations
    Section 138.140 is revised to reflect current business practice. It 
adds a provision noting that the COFR Operator, or anyone authorized to 
act on their behalf, may withdraw an Application at any time before 
issuance of the COFR. It also includes the failure to designate and 
maintain a U.S. agent for service of process to the list of cases in 
which the Director may deny an Application or revoke a COFR. The 
section revision also clarifies that the Director may deny an 
Application or revoke a COFR after obtaining additional information, 
such as transfer to a new operator, vessel renaming, guaranty 
termination or cancellation, or disapproval of the guarantor, and it 
adds a duty to remedy violations where a COFR for a vessel expires. 
Finally, it adds a provision specifying that where a COFR is revoked 
because 30 days have elapsed following the date the Director receives a 
guarantor's notice of termination, the Director may reinstate the COFR 
if the guarantor promptly notifies the Director that the guarantor 
rescinded the termination and there was no gap in coverage. This will 
align the regulation to the COFR guaranty forms.
Sec.  138.150 Reporting Requirements
    The rule merges reporting requirements into this one section. It 
also revises the regulatory text to emphasize prior notices of changes 
that will require a new COFR before the change occurs. Section 138.150 
identifies the information that must be reported to the Director no 
later than 21 business days before a new COFR is required for permanent 
vessel transfers and other changes requiring issuance of a new COFR, 
and information that need only be reported 3 business days before 
implementing the change for changes not requiring issuance of a new 
COFR. Changes that require issuance of a new COFR include, but are not 
limited to: A permanent vessel transfer, change of COFR Operator, 
vessel name change, change in the vessel's gross tonnage, or 
termination of guaranty. As a result of comments, Sec.  138.150(d) was 
revised to require that each guarantor (or, if there are multiple 
guarantors, each lead guarantor) must give the Director 30 days notice 
before terminating a guaranty as provided in Sec.  138.110(a)(3), 
explaining the reason for the intended termination, once known, or 
should have known, in the ordinary course of business. The further 
requirement to give the Director notice before any other change occurs 
that will require new evidence of financial responsibility or issuance 
of a new COFR under paragraph (b) has been eliminated.

C. Removal of 33 CFR 138.90(f)

    Existing paragraph Sec.  138.90(f) contains a non-regulatory 
provision dealing with the temporary transfer of custody of an unmanned 
barge that has a COFR issued under subpart A of part 138. The COFR 
Operator who transfers the barge continues to be liable under OPA 90, 
CERCLA, or both, and continues to maintain on file with the Director 
acceptable evidence of financial responsibility with respect to the 
barge. The provision encourages the temporary transferee to require the 
transferring COFR Operator to acknowledge in writing that the 
transferring COFR Operator agrees to remain responsible for pollution 
liabilities. Since we received no adverse comments, we have removed 
Sec.  138.90(f) because the existing COFR remains in effect in respect 
to that vessel, and a temporary new COFR is not required.

D. Removal of 33 CFR Part 135 and Subpart D of 33 CFR Part 153

    This document removes 33 CFR part 135 and subpart D of 33 CFR part 
153 because OPA 90 repealed the legal authorities for them. These rules 
are outdated and are removed.

V. Regulatory Analyses

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

A. Regulatory Planning and Review

    Executive Orders 12866 (Regulatory Planning and Review) and 13563 
(Improving Regulation and Regulatory Review) direct agencies to assess 
the costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. The Office of Management and Budget (OMB) has not 
designated this rule a significant regulatory action under section 3(f) 
of Executive Order 12866. Accordingly, OMB has not reviewed it. A 
regulatory analysis (RA) follows.
    As explained in this section, this rule imposes some quantified 
costs, and create qualitative benefits, which the Coast Guard believes 
justifies the costs.
1. Analysis of Alternatives
    Alternative 1: No action.
    The ``No Action'' alternative makes no regulatory changes to the 
evidence of financial responsibility regulations in 33 CFR part 138, 
subpart A. The ``No Action'' alternative is not viable because the 
statute requires evidence of financial responsibility regulations for 
tank vessels greater than 100 gross tons but less than or equal to 300 
gross tons. At a minimum, a regulation implementing this requirement is 
required. This alternative reflects the status quo and

[[Page 68131]]

therefore has no regulatory cost or benefit.
    Alternative 2: Promulgate evidence of financial responsibility 
regulations for tank vessels greater than 100 gross tons but less than 
or equal to 300 gross tons (statutory requirement).
    Alternative 2 reflects the absolute minimum rulemaking effort to 
address the statutory requirement in Section 712 of the Coast Guard 
Authorization Act of 2010. However we did not choose this alternative 
because, there are other aspects of the Coast Guard's evidence of 
financial responsibility program that the Coast Guard wants to address 
such as removing outdated regulatory text, providing updates that 
reflect current practices and taking into account technological 
improvements that will provide better clarity to the public as well as 
reduce confusion. This alternative has the least net benefits of all of 
the proposed alternatives. This alternative reflects the most costly 
aspect of the rulemaking and is included in all of the proposed 
alternatives because it is a statutory provision.
    Alternative 3: Promulgate evidence of financial responsibility 
regulations for tank vessels greater than 100 gross tons but less than 
or equal to 300 gross tons (statutory requirement) and for deepwater 
ports (discretionary requirement).
    Alternative 3 adds promulgating evidence of financial 
responsibility regulations for deepwater ports to Alternative 2. The 
Coast Guard considered proposing financial responsibility regulations 
for deepwater ports as part of this rulemaking. The deepwater port 
industry is experiencing increased activity in the liquefied natural 
gas deepwater port industry sector, raising questions about how 
existing laws and policies regarding these facilities would apply. 
These issues do not impact vessel evidence of financial responsibility, 
however, and could create complexity and potentially delay the mandated 
regulation of tank vessels greater than 100 gross tons but less than or 
equal to 300 gross tons. In addition, currently only one liquefied 
natural gas deepwater port is in operation and it uses less than 100 
gallons of oil, whereas other designs might pose a greater risk of oil 
spills. Additional time is necessary to analyze the effects of 
liquefied natural gas regulation on the economy, maritime safety, and 
the environment. The only other deepwater port in operation, an oil 
deepwater port called the Louisiana Offshore Oil Port, is self-insured, 
and provides evidence of financial responsibility sufficient to meet 
its maximum liability under OPA 90 under grandfathered requirements of 
the Deepwater Port Act of 1974.
    After evaluating this alternative, the Coast Guard decided not to 
develop deepwater port financial responsibility regulations at this 
time. Postponing evidence of financial responsibility regulations for 
deepwater ports will not impact maritime safety or the environment. 
Currently, there is no established market that provides and maintains 
evidence of financial responsibility for deepwater ports. If the market 
decides to pursue these ventures in the future, the costs and benefits 
will be analyzed accordingly as part of a future rulemaking.
    Alternative 4 (Preferred alternative) Promulgate evidence of 
financial responsibility regulations for tank vessels greater than 100 
gross tons but less than or equal to 300 gross tons (statutory 
requirement); require COFR Operators and guarantors to submit 
additional information to the Coast Guard; make conforming amendments 
reflect current practices (discretionary requirement); and remove 
subpart D of 33 CFR part 153 D and 33 CFR part 135 from the CFR 
(discretionary requirement).
    Alternative 4 addresses the statutory requirement to require tank 
vessels greater than 100 gross tons but less than or equal to 300 gross 
tons to establish and maintain financial responsibility. It also 
provides necessary updates to the current financial responsibility 
regulations to reflect current practices that have evolved over the 
past two decades, taking into account technological improvements as 
well as changes in policy. Lastly, this alternative removes 33 CFR part 
135 and subpart D of 33 CFR part 153, both of which regulate two 
defunct funds, the OCSLA Fund and the 311(k) Fund.
    In addition to the regulatory costs and benefits associated with 
Alternative 2, this alternative adds two aspects with no cost: 
Conforming regulations to current practice and removing two defunct 
portions of the CFR, providing intangible benefits of eliminating 
confusion for the public, as well as ensuring that the regulations 
reflect how the Coast Guard's financial responsibility program 
currently operates. Additionally, a small amount of regulatory cost is 
associated with the requirement to require COFR Operators and 
guarantors to provide additional information to the Coast Guard. 
Although the benefits of this alternative are qualitative, they will 
help to eliminate confusion and provide more clarity to the public 
while providing much needed information to the Coast Guard.
2. Regulatory Changes
    We are amending the vessel evidence of financial responsibility 
regulations at 33 CFR part 138, subpart A, to:
    1. Require financial responsibility to now include all tank vessels 
greater than 100 gross tons but less than or equal to 300 gross tons.
    2. Require additional information from the COFR Operator and 
guarantor. The revisions include:
     Reporting of gross tonnage measurement system used and 
submission of a copy of the tonnage certifying document, upon request;
     Electronic submissions;
     Reporting of reason for termination of guaranty by a 
guarantor, if known; and
     Reporting vessel name change and increased reporting on 
location of vessel when there is a change in ownership on date of 
change.
    3. Conform regulations to current practice. The revisions include:
     How to apply vessel gross tonnages;
     Removal of requirement to pay fees before issuance of a 
COFR;
     Moving surety bond method to ``other methods'' for 
establishing and maintaining evidence of financial responsibility;
     Clarification on continuation of guarantor's liability and 
requirement to provide coverage for 30 days after cancellation of 
guaranty; and
     Process for establishing and maintaining acceptability of 
COFR insurance guarantors.
    In addition, for the reasons discussed above, we are removing 33 
CFR part 135 and subpart D of 33 CFR part 153 which concern management 
of two defunct pollution funds.
    Table 2 shows whether a category of regulatory amendments have a 
regulatory cost, regulatory benefit, or both. Those amendments that 
have a regulatory cost or benefit are discussed in detail following the 
table.

[[Page 68132]]



            Table 2--Summary of Regulatory Amendment Impacts
------------------------------------------------------------------------
                                    Regulatory cost   Regulatory benefit
------------------------------------------------------------------------
Require financial responsibility
 for tank vessels greater than
 100 gross tons but less than or
 equal to 300 gross tons to
 establish and maintain evidence
 of financial responsibility
 (Statutory):
    Application and               Yes                 Yes
     certification costs.
    COFR premium costs..........  Yes                 Yes
Require Additional Information
 from the COFR Operator and
 guarantor (Discretionary):
    Reporting of gross tonnage    Yes                 Yes
     measurement systems used
     and submission of a copy of
     the tonnage certifying
     document, upon request.
    Electronic submissions......  No \7\              Yes
    Reporting of reason for       Yes                 Yes
     termination of guaranty by
     a guarantor.
    Reporting vessel name change  Yes                 Yes
     and increased reporting on
     location of vessel when
     there is a change in
     ownership on date of change.
Conform regulations to current
 Practice (Discretionary):
    How to apply vessel gross     No                  Yes
     tonnages.
    Removal of requirement to     No                  Yes
     pay fees before issuance of
     a COFR.
    Moving Surety Bond method to  No                  Yes
     ``other methods'' for
     establishing and
     maintaining evidence of
     financial responsibility.
    Clarification on              No                  Yes
     continuation of guarantor's
     liability and requirement
     to provide coverage for 30
     days after cancellation of
     guaranty.
    Process for establishing and  No                  Yes
     maintaining acceptability
     of COFR insurance
     guarantors.
Removal of 33 CFR part 135 and
 subpart D of 33 CFR part 153
 (Discretionary):
    Removal of 33 CFR part 135..  No \8\              Yes
    Removal of subpart D of 33    No \9\              Yes
     CFR part 153.
------------------------------------------------------------------------

3. Regulatory Costs
---------------------------------------------------------------------------

    \7\ Electronic submissions creates cost savings.
    \8\ Removal of superseded regulatory requirements have no cost. 
The OCSLA Fund was subsumed by the Oil Spill Liability Trust Fund.
    \9\ Removal of superseded regulatory requirements have no cost. 
The 311(k) Fund was subsumed by the Oil Spill Liability Trust Fund.
---------------------------------------------------------------------------

    There are two regulatory costs identified for this rule:
     Regulatory Cost 1: Require the additional tank vessels 
greater than 100 gross tons but less than or equal to 300 gross tons to 
establish and maintain evidence of financial responsibility (statutory 
requirement).
     Regulatory Cost 2: Require additional information from the 
COFR Operator and guarantor (discretionary requirement).
Discussion of Regulatory Cost 1
    The rule requires tank vessels greater than 100 gross tons but less 
than or equal to 300 gross tons to establish and maintain evidence of 
financial responsibility.\10\ These vessels are required to have COFRs, 
which results in two types of costs:
---------------------------------------------------------------------------

    \10\ Regulatory Cost 1 does not include vessels greater than 300 
gross tons that are already required to have a COFR.
---------------------------------------------------------------------------

     Application and certification costs; and
     COFR premium costs.
    Application and Certification Costs: In the first year of the 
analysis period, the COFR Operator is required to pay an Application 
fee of $200 and a Certification fee of $100 for each vessel requiring a 
COFR. A new Certification fee is required every 3 years to renew the 
COFR.
    COFR Premium Costs: The additional operators of tank vessels 
greater than 100 gross tons but less than or equal to 300 gross tons 
have to establish and maintain evidence of financial responsibility 
using one of these several methods: Insurance, Self-insurance, or 
Financial Guaranty.\11\
---------------------------------------------------------------------------

    \11\ Historically, the surety bond method has been used in a 
very few instances. This rule moves this method to the ``other 
methods'' category of financial responsibility under Sec.  
138.110(f).
---------------------------------------------------------------------------

    Affected Population: According to the Coast Guard's Marine 
Information for Safety and Law Enforcement (MISLE) database, there are 
an average of 465 tank vessels using U.S. navigable waters or U.S. EEZ 
from 2016-2020 that are greater than 100 gross tons but less than or 
equal to 300 gross tons. Table 3 shows the number of tank vessels 
greater than 100 gross tons but less than or equal to 300 gross tons 
per year (2016-2020). Note the data used for the NPRM was 2014-2018. 
Hence the final rule has updated the data period to most current data.

  Table 3--Number of Tank Vessels Greater Than 100 Gross Tons but Less
                     Than or Equal to 300 Gross Tons
------------------------------------------------------------------------
                                                             Number of
                          Year                                vessels
------------------------------------------------------------------------
2016....................................................             477
2017....................................................             474
2018....................................................             474
2019....................................................             449
2020....................................................             449
                                                         ---------------
    Average (2016-2020).................................             465
------------------------------------------------------------------------


[[Page 68133]]

Cost Summary Regulatory Cost 1
    Application and Certification Costs: We assumed the number of 
future COFR Applications and Certifications, based on the historical 
average number of vessels in the population from 2016 to 2020 (465 
vessels) are constant for the 10-year analysis period.\12\ We also 
assumed that all vessels renew their COFRs every 3 years through the 
full 10-year analysis period. In the first year of the analysis period, 
COFR Operators pay an Application fee ($200) and a Certification fee 
($100) when applying for a COFR for their vessels. Every 3 years 
thereafter, COFR Operators pay a Certification fee ($100) when renewing 
their COFRs. In the first year of the analysis period, the annual cost 
is calculated by multiplying the number of vessels applying for COFRs 
(465 vessels) by the cost of the Application ($200) and adding the 
number of vessels requesting certification (465) multiplied by the cost 
of certification ($100) to equal $139,500. Every third year thereafter, 
the cost is calculated by multiplying the number of vessels (465) 
requesting certification for renewal of their COFRs by the cost of the 
certification ($100) to equal $46,500.
---------------------------------------------------------------------------

    \12\ This estimate, based on COFR trends for currently COFRed 
vessels, was validated by subject matter expert in Coast Guard's 
Vessel Certification Division.
---------------------------------------------------------------------------

    COFR Premium Costs: It is possible for vessel operators to choose 
to use the Self-insurance or Financial Guaranty methods of establishing 
their evidence of financial responsibility, which allows them to use 
their U.S. business assets. Alternatively, in the case of the Financial 
Guaranty method, vessels may use the U.S. business assets of a parent, 
affiliate, or special purpose company as evidence that they are capable 
of paying for removal costs and damages up to the applicable limit of 
liability. In those cases, they have made a business decision that the 
cost of the assuming liability risk under OPA 90 is less than the 
premium charged by commercial insurance companies. This assessment of 
OPA 90 risk is company-specific and not quantifiable. Therefore, for 
the purposes of this analysis, we have assumed that the responsible 
parties use the Insurance method of establishing and maintaining their 
evidence of financial responsibility. We received estimates of COFR 
insurance premium amounts for tank vessels greater than 100 gross tons 
but less than or equal to 300 gross tons from 4 COFR insurance 
companies representing over 90 percent of existing COFRs.\13\ Based on 
this survey of guarantors, we estimated that the premiums per vessel 
range between $300 and $1,000 per year.
---------------------------------------------------------------------------

    \13\ Source: NPFC's COFR database.
---------------------------------------------------------------------------

    Vessel Premium Low Range Cost Estimate: The Coast Guard calculated 
the vessel premium low range cost estimate by using the following 
formula:

Number of vessels x cost of premium per vessel per year:
465 vessels x $300 per vessel per year = $139,500 per year

    Vessel Premium High Range Cost Estimate: The Coast Guard calculated 
the vessel premium high range cost estimate by using the following 
formula:

Number of vessels x the cost of premium per vessel per year:
465 vessels x the $1,000 per vessel per year = $465,000 per year

Discussion of Regulatory Cost 2
    This rule requires additional information from the COFR Operator 
and guarantor that result in three types of costs:
     Reporting of gross tonnage measurement systems used and 
submission of copy of tonnage certifying document, upon request;
     Reporting of reason for termination of guaranty by a 
guarantor, if known; and
     Reporting vessel name change and increased reporting on 
location of vessel when there is a change in ownership on date of 
change.
    Reporting of Gross Tonnage Measurement Systems Used and Submission 
of a Copy of Tonnage Certifying Document, upon request--Affected 
Population: All COFR Operators, including those for the tank vessels 
greater than 100 gross tons but less than or equal to 300 gross tons, 
will report the gross tonnage measurement systems used when applying 
for and/or renewing a COFR. The Coast Guard's COFR database indicates 
that there are 26,163 currently COFRed vessels. Adding the 465 COFRed 
tank vessels greater than 100 gross tons but less than or equal to 300 
gross tons in Regulation Cost 1, and assuming the number of COFRed 
vessels remains constant during the analysis period, the total number 
of COFRed vessels equals 26,628.
    Master Certificate and Fleet Certificate holders also are required 
to provide the gross tonnage measurement systems used for the largest 
vessel covered by the Application. According to the COFR database, 
there are currently 8 Master Certificates and 12 Fleet Certificates.
    COFR Operators also provide a copy of the tonnage certifying 
document, upon request. We assume that the Coast Guard may request a 
copy of the tonnage certifying document when there is an incident. 
According to incident data from the Coast Guard's Case Information 
Management System (CIMS) database, there was an average of 12 incidents 
per year involving vessels with COFRs and vessels that are required to 
have COFRs under this rule over the five year period 2016-2020. We 
assume that for the analysis period, the number of incidents remains 
constant with this average.
    Reporting of Reason for Termination of Guaranty by a Guarantor--
Affected Population: Based on NPFC Vessel Certification Program data on 
the historical number of annual notices of guaranty termination by 
guarantors, the Coast Guard estimates that there will be 4,000 per year 
for the 10-year analysis period.
    Reporting Vessel Name Change and Increased Reporting on Location of 
Vessel When There is a Change in Ownership on Date of change--Affected 
Population: Based on NPFC Vessel Certification Program historical data, 
the Coast Guard estimates that there will be 1,000 submissions per 
year.
Cost Summary Regulatory Cost 2
    Reporting of Gross Tonnage Measurement Systems Used and Submission 
of Copy of Tonnage Certifying Document, upon request: Reporting the 
gross tonnage measurement systems used with the application and/or 
requests for COFR renewal results in a negligible cost impact (less 
than one minute of time) to the COFR Operator and is completed with the 
Application for the COFR. We do not quantify this cost because it is 
negligible.
    Based on estimates received from COFR insurance guarantors who will 
submit, upon request, a copy of the tonnage certifying document on 
behalf of the COFR Operator, COFR Operators requires 15 minutes (0.25 
hours) per submission.

Number of submissions per year x number of hours x the labor cost per 
hour:
12 x 0.25 hours per submission = 3 hours
3 hours per year x $36.64 per hour \14\ = $110 per year
---------------------------------------------------------------------------

    \14\ Total employer compensation costs for private industry 
workers averaged, $36.64 per hour worked, found at Employer Costs 
for Employee Compensation--March 2021 (bls.gov). Bureau of Labor 
Statistics Economic News Release Employer Costs for Employee 
Compensation news release text. Thursday, March 18, 2021. This wage 
rate was selected because it is the most general and reflects that 
the person submitting the information could be any worker whether an 
administrative assistant or a Chief Executive Officer of a company. 
Note this wage was adjusted from the NPRM which used a hourly wage 
rate from December 2017.


[[Page 68134]]


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

    Reporting of reason for termination of guaranty by a guarantor: We 
estimated that it will take 5 minutes (0.08 hours) for the guarantor to 
add the reason why the guaranty was terminated to the information they 
already provide to the Coast Guard when they terminate a guaranty.

Number of terminations per year x number of hours per submission x 
labor cost per hour:
4,000 submissions per year x 0.08 hours per submission x $36.64 per 
hour = $11,725 per year

    Reporting Vessel Name Change and Increased Reporting on Location of 
Vessel When There is a Change in Ownership on Date of Change: We 
estimated that it takes an additional 5 minutes (0.08 hours) per 
submission to provide additional information that is not already 
required under the current rule.

Number of submissions per year x number of hours per submission x the 
labor cost per hour:
1,000 submissions per year x the 0.08 hours/submission x the $36.64 per 
hour \15\ = $2,931 per year
---------------------------------------------------------------------------

    \15\ See footnote 8.

    Present Value Regulatory Costs (Low Range): We estimated that the 
10-year present value of the rule, at a 3-percent discount rate, is 
$1.6 million. We estimated that the 10-year present value of the rule, 
at a 7-percent discount rate, is $1.3 million. The estimated annualized 
discounted cost of the rule, at a 3-percent discount rate, is $189,100. 
The estimated annualized discounted cost of the rule, at a 7-percent 
discount rate, is $191,100.
    Present Value Regulatory Costs (High Range): We estimated the 10-
year present value of the rule, at a 3-percent discount rate, to be 
$4.5 million. We estimated the 10-year present value of the rule, at a 
7-percent discount rate, to be $3.7 million. The estimated annualized 
discounted cost of the rule, at a 3-percent discount rate, is $525,800. 
The estimated annualized discounted cost of the rule, at a 7-percent 
discount rate, is $527,800.
4. Regulatory Benefits
    There are four qualitative benefits identified for this rule:
     Regulatory Benefit 1: Require Tank Vessels Greater than 
100 Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of 
Financial Responsibility (statutory requirement).
     Regulatory Benefit 2: Require additional information from 
the COFR Operator and guarantor (discretionary requirement).
     Regulatory Benefit 3: Conform Regulations to Current 
Practice (discretionary requirement).
     Regulatory Benefit 4: Removal of 33 CFR part 135 and 
subpart D of 33 CFR part 153 (discretionary requirement).
Discussion of Regulatory Benefit 1
    Oil pollution removal costs and damages for incidents have 
substantially increased since 1990, even for relatively small-sized 
discharges. When there is no evidence of financial responsibility, it 
becomes more likely that the OSLTF will have to pay for at least some 
of the costs resulting from the incident.\16\ When vessels have COFRs, 
the incident cost amount paid by the responsible party is higher than 
for vessels that do not have COFRs. This rule adds tank vessels greater 
than 100 gross tons but less than or equal to 300 gross tons to the 
vessels that are already required to establish and maintain evidence of 
financial responsibility.
---------------------------------------------------------------------------

    \16\ Lawrence I. Kiern, ``Liability, Compensation, and Financial 
Responsibility Under the Oil Pollution Act of 1990: A review of the 
Second Decade.'' 36 Tulane Maritime Law Journal. 23-24 (2011).
---------------------------------------------------------------------------

    Of the 10,000 incidents sampled from the Coast Guard's CIMS 
database during the ``1990 to 2020'' period, 4.99 percent were COFRed 
vessels and 30.27 percent were non-COFRed vessels.\17\ Coast Guard CIMS 
data show that the Coast Guard recovers 88.64 percent of costs when a 
vessel was COFRed, and only 17.45 percent of costs when it was not 
COFRed.
---------------------------------------------------------------------------

    \17\ The remaining 64.74 percent of incidents were either 
facility incidents or incidents where the Coast Guard could not 
identify the source.
---------------------------------------------------------------------------

    The requirement ensures that the costs are internalized because 
parties responsible for oil spills are more fully responsible for 
(moving from less than \1/3\ to nearly 100 percent) paying for the oil 
pollution removal costs and damages and help correct this market 
failure.\18\ Increased recovered cost rates shift the risk and actual 
costs from the OSLTF to the polluting responsible party.
---------------------------------------------------------------------------

    \18\ See OMB Circular A-4, page 4 dated September 17, 2003 for a 
short discussion on market failures and externalities such as 
environmental problems.
---------------------------------------------------------------------------

Discussion of Regulatory Benefit 2
    Reporting of Gross Tonnage Measurement Systems Used and Submission 
of copy of Tonnage Certifying Document, upon request: COFR Operators 
must submit a copy of the tonnage certifying document upon request.
    Providing this additional information with respect to gross tonnage 
allows the Coast Guard to determine more effectively the limit of 
liability and applicable amounts of financial responsibility for the 
incident. In some cases, vessels have tonnage determined under more 
than one measurement system, depending on a variety of factors, 
including the vessel's flag, length, voyage type, keel laid, or 
substantial alteration date, and whether it is self-propelled. This has 
caused confusion with respect to which measurement system to use to 
determine the limit of liability and amount of financial 
responsibility.
    Regardless of the tonnage reported on the Application, the tonnage 
certifying document governs the required evidence of financial 
responsibility and the limit of liability at the time of the incident 
(except when the responsible parties or guarantors knew or should have 
known that the tonnage certificate information was incorrect). Using 
the tonnage certifying document provides the following benefits: (1) It 
ensures that the Coast Guard has the most accurate tonnage 
measurements; (2) it provides the method used to determine tonnage, as 
well as the tonnage amount; (3) it provides information for foreign 
flagged vessels that is oftentimes difficult to obtain; and (4) without 
the applicable tonnage certifying document, if an incident occurred, a 
re-measurement of tonnage could alter the already determined financial 
responsibility and limit of liability.
    Electronic submissions: The rule allows COFR Operators, guarantors, 
and agents for service of process to submit signed scanned images, 
emails, or faxes instead of hard copy signed-in-ink originals. The 
Coast Guard receives approximately ten of the CG-5586 forms by mail 
annually. Allowing electronic submissions creates minimal cost savings; 
however, it provides increased flexibility to COFR Operators, and 
enhances Coast Guard's recordkeeping goals. This works towards the 
OMB's goal to maximize the use of electronic technology for collection 
of information from the public, demonstrated in OMB memorandum M-19-21.
    Reporting of reason for termination of guaranty by guarantor: The 
rule requires the guarantor to include the reason for termination, if 
known, with the notification for termination of the guaranty. This 
information provides the Coast Guard with new information about the 
COFR Operator in the event there is an incident.
    Reporting vessel name change and increased reporting on location of 
vessel when there is a change in ownership on date of change: The rule 
ensures that the Coast Guard has the most current information when 
initially issuing a COFR--especially concerning vessels that, over 
time, become derelict while in

[[Page 68135]]

U.S. navigable waters or U.S. EEZ. The revisions also improve the Coast 
Guard's ability to establish compliance with COFR regulations by more 
effectively ensuring the responsible party is able to pay its liability 
and mitigate risks to the OSLTF. For example, if a vessel is sold while 
using a place subject to U.S. jurisdiction, the new responsible parties 
become immediately subject to the COFR program. These changes are to 
ensure that, while the Coast Guard still has regulatory authority over 
a responsible party and the financial assurances of the guarantor, the 
Coast Guard receives information relevant to continued compliance 
before problems arise. However, enforcing compliance with the COFR 
program's requirements depends on the Coast Guard knowing about the 
vessel transfer. The regulatory revisions ensure that the Coast Guard 
receives this information and to mitigate the risk of uninsured 
responsible parties and derelict vessels.
Discussion of Regulatory Benefit 3
    How to apply vessel gross tonnages: This rule updates and 
simplifies the provisions respecting how to apply gross tonnage 
measurement methods to reflect changes in the law since OPA 90 was 
first enacted. This rule is consistent with the Coast Guard's tonnage 
regulation at 46 CFR part 69 ``Tonnage Regulations Amendments'' (81 FR 
18701, March 31, 2016). Hence the update on how gross tonnage 
measurement is performed simplifies an administrative burden on the 
COFR Operator.
    Removal of requirement to pay fees before issuance of a COFR: The 
rule allows the COFR Operator to pay the COFR Application and 
Certification fees up to 21 days after submitting their COFR 
Application. This adds flexibility and convenience for COFR Operators, 
especially if they are underway and want to enter U.S. navigable waters 
or U.S. EEZ.
    Moving surety bond method to ``other methods'' for establishing and 
maintaining evidence of financial responsibility: The rule no longer 
specifically discusses the surety bond method in the regulations 
because it is rarely, if ever, used. However, the surety bond method is 
still available under the ``other methods'' provision in the rule.
    Clarification on continuation of guarantor's liability and 
requirement to provide coverage for 30 days after cancellation of 
guaranty: The rule explains that the guarantor continues to be liable 
and must provide coverage for 30 days following NPFC receipt of a 
notice of cancellation. This requirement is currently contained on the 
COFR form and reflects a current and important NPFC business practice.
    Process for establishing and maintaining acceptability of COFR 
insurance guarantors: The rule moves the current process for 
establishing and maintaining acceptability of COFR insurance guarantors 
into the regulations to make it more transparent to the public. The 
Coast Guard's longstanding business practice under the existing COFR 
regulations for determining the acceptability of guarantors is the 
basis of the procedures set forth in the rule. The rule also provides a 
process through which a COFR operator may provide new evidence of 
financial responsibility and obtain approval or continuation of the 
COFR where the Coast Guard disapproves a guarantor (for example, due to 
guarantor fraud or financial failure). The provision applies to pending 
Applications and following the issuance of a COFR.
Discussion of Regulatory Benefit 4
    These regulations concern management of two pollution funds--the 
Offshore Oil Pollution Compensation Fund and the FWPCA Section 311(k) 
Fund. These provisions are no longer authorized. On November 1, 2011, 
the Coast Guard published a notice of inquiry (76 FR 67385) soliciting 
public comment on removing 33 CFR part 135 and we received no adverse 
comments. This aspect of the rulemaking is necessary to remove 
unauthorized regulatory requirements and to eliminate potential 
confusion to the public.

B. Small Entities

    Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have 
considered whether this rule will 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 (IRFA) was developed in 
the NPRM (85 FR 28802). There were no public comments received on the 
IRFA.
    The IRFA determined that there are two potential direct costs to 
small entities that result from this rule:
     Regulatory Cost 1: Require Tank Vessels Greater than 100 
Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of 
Financial Responsibility (Statutory Requirement).
     Regulatory Cost 2: Require Additional Information from 
COFR Operators and Guarantors (Discretionary Requirement).
    The number of small entities affected by Regulatory Cost 1 of the 
rule and the respective impact on their annual revenue was determined 
in the IRFA and is summarized in Table 4 below.

      Table 4--Economic Impact to Small Entities--Regulatory Cost 1
------------------------------------------------------------------------
                                             Number of      Percent of
        Percent of annual revenue         small entities  small entities
------------------------------------------------------------------------
1% to 2%................................               0               0
<1%.....................................             117             100
------------------------------------------------------------------------

    The number of small entities affected by Regulatory Cost 2 of the 
rule and the respective impact on their annual revenue was determined 
in the IRFA and is summarized in Table 5 below.

      Table 5--Economic Impact to Small Entities--Regulatory Cost 2
------------------------------------------------------------------------
                                             Number of      Percent of
        Percent of annual revenue         small entities  small entities
------------------------------------------------------------------------
1% to 2%................................               0               0
<1%.....................................             652             100
------------------------------------------------------------------------

    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that 
this rule will not have a significant economic impact on a substantial 
number of 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 offer to assist small 
entities in understanding this rule so that they can better evaluate 
its effects on them and participate in the rulemaking. 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).

[[Page 68136]]

D. Collection of Information

    This rule revises a previously approved collection of information 
(OMB Control Number 1625-0046) under the Paperwork Reduction Act of 
1995, 44 U.S.C. 3501-3520. As defined in 5 CFR 1320.3(c), ``collection 
of information'' comprises reporting, recordkeeping, monitoring, 
posting, labeling, and other similar actions. The title and description 
of the information collections, a description of those who must collect 
the information, and an estimate of the total annual burden follow. The 
estimate covers the time for reviewing instructions, searching existing 
sources of data, gathering and maintaining the data needed, and 
completing and reviewing the collection.
    Title: Financial Responsibility for Water Pollution (Vessels).
    OMB Control Number: 1625-0046.\19\
---------------------------------------------------------------------------

    \19\  https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201909-1625-002.
---------------------------------------------------------------------------

    Summary of the Collection of Information: This rule adds additional 
collection of information requirements to existing OMB Control Number 
1625-0046 for: COFR Operators to report gross tonnage and gross tonnage 
measurement systems used, and submit a copy of their tonnage certifying 
document, upon request; guarantors to report the reason for termination 
of a guaranty; and COFR Operators to report vessel name changes and 
increase reporting on location of vessel when there is a change in 
ownership on date of change.
    Need for Information:
    Reporting of gross tonnage measurement systems used and submission 
of copy of the tonnage certifying document, upon request.
    Providing tonnage measurement systems used and submitting the 
tonnage certifying document, upon request, in the rule, with respect to 
gross tonnage allows the Coast Guard to determine more effectively the 
limit of liability and applicable amounts of financial responsibility 
for the incident. In some cases, the vessel may be assigned tonnage 
under more than one measurement system depending on a variety of 
factors including the vessel's flag, length, voyage type, keel laid, or 
substantial alteration date, and whether it is a self-propelled vessel. 
This has caused confusion with respect to which method to use to 
determine limit of liability and amount of financial responsibility.
    Regardless of the tonnage reported on the Application, the tonnage 
certifying document governs the required evidence of financial 
responsibility and the limit of liability at the time of the incident 
(except when the responsible parties or guarantors knew or should have 
known that the tonnage certifying document or certificate of registry 
was incorrect). Using the tonnage certifying document provides the 
following benefits: It ensures that the Coast Guard has the most 
accurate tonnage measurements; it provides the method used to determine 
tonnage, as well as the tonnage amount; it provides information for 
foreign flagged vessels that is oftentimes difficult to obtain; and 
without the applicable tonnage certifying document, if an incident 
occurred, a re-measurement of tonnage could alter the already 
determined financial responsibility and limit of liability.
    Reporting of reason for termination of guaranty by a guarantor.
    The rule requires that the guarantor include the reason for 
termination, if known, with the notification for termination of the 
guaranty. This information provides the Coast Guard with information 
about the COFR Operator that otherwise is not known in the event there 
is an incident.
    Reporting vessel name change and increased reporting on location of 
vessel when there is a change in ownership on date of change.
    The additional collection of information in the rule ensures the 
information the Coast Guard relies on when initially issuing a COFR is 
up to date and remains current--especially concerning vessels that, 
over time, become derelict while in U.S. navigable waters or U.S. EEZ. 
The revisions also improve the Coast Guard's ability to establish 
compliance with COFR regulations by more effectively ensuring that the 
responsible party is able to pay its liability and mitigate risks to 
the OSLTF. For example, if a vessel is sold while using a place subject 
to U.S. jurisdiction, the new responsible parties become immediately 
subject to the COFR program. These changes ensure that, while the Coast 
Guard still has regulatory authority over a responsible party and the 
financial assurances of the guarantor, the Coast Guard receives 
information material to continued compliance before problems arise. 
Enforcing compliance with the COFR program's requirements, however, 
depends on the Coast Guard knowing about the vessel transfer. The 
regulatory revisions seek to ensure that the Coast Guard receives this 
information and to mitigate the risk of uninsured responsible parties 
and derelict vessels.
    Use of Information:
    Reporting of gross tonnage measurement systems used and submission 
of copy of the tonnage certifying document, upon request.
    The Coast Guard uses the additional collection of information in 
the rule to ensure that the gross tonnage of a vessel involved in an 
incident is accurate to determine its limit of liability and applicable 
amount of financial responsibility.
    Reporting of reason for termination of guaranty by a guarantor.
    The Coast Guard uses the additional collection of information in 
the rule to learn more about a vessel and its COFR Operators in the 
event of an incident. This new requirement to provide the reason for 
guaranty termination will reduce the possibility that a guarantor will 
cancel the guaranty to simply shield themselves from potential 
liability in the event of an incident.
    Reporting vessel name change and increased reporting on location of 
vessel when there is a change in ownership on date of change.
    The Coast Guard uses the additional collection of information in 
the rule to identify a responsible party in the event there is an 
incident.
    Description of the Respondents: The respondents are COFR Operators 
of vessels and OPA 90 COFR insurance guarantors.
    Number of Respondents: The additional collection of information in 
this rule affects 761 COFR Operators and 14 OPA 90 COFR insurance 
guarantors.
    Frequency of Response:
    Reporting of gross tonnage measurement systems used and submission 
of copy of the tonnage certifying document.
    All COFR Operators, including those for the tank vessels greater 
than 100 gross tons but less than or equal to 300 gross tons in this 
rule, must report the gross tonnage measurement systems used when 
applying for a COFR. The Coast Guard's COFR database indicates that 
there are 26,163 currently COFRed vessels. Adding the 465 COFRed tank 
vessels greater than 100 gross tons but less than or equal to 300 gross 
tons in Regulation Cost 1, and assuming the number of COFRed vessels 
remains constant during the analysis period the total number of COFRed 
vessels equals 26,628.
    Master Certificate and Fleet Certificate holders will also be 
required to provide the gross tonnage measurement systems used for the 
largest vessel covered by the Application.
    The Coast Guard estimated that COFR Operators will provide 
information on \1/3\ of the vessels with COFRs each year due to the 3-
year cycle of the Application process.

[[Page 68137]]

    Individual Certificates--The Coast Guard's COFR database indicates 
that, currently, there are 26,163 COFRed vessels. Adding the 465 COFRed 
tank vessels greater than 100 gross tons to 300 gross tons in 
Regulation Cost 1 equals 26,628 COFRed vessels.
    26,628 COFRed vessels / 3 = 8,876 COFRed vessels per year that will 
require the submission of the gross tonnage measurement systems used.
    Masters Certificates--According to the COFR database, there are 
currently 8 Master Certificates.
    8 Master Certificates / 3 = 3 Master Certificates per year that 
will require the submission of the gross tonnage measurement systems 
used for the largest vessel covered by the Application.
    Fleet Certificates--According to the COFR database, there are 
currently 12 Fleet Certificates.
    12 Fleet Certificates / 3 = 4 Fleet Certificates per year that will 
require the submission of the gross tonnage measurement systems used 
for the largest vessel covered by the Application.
    COFR Operators will also provide a copy of the tonnage certifying 
document, upon request. We assume that the Coast Guard will request a 
copy of the tonnage certifying document when there is an incident. 
According to incident data from the Coast Guard's CIMS database, there 
are an average of 12 incidents per year involving vessels with COFRs 
and vessels that will be required to have COFRs under this rule over 
the five year period 2016-2020. We assume that for the analysis period, 
the number of incidents will remain constant with this average.
    Reporting of reason for termination of guaranty by a guarantor.
    Based on NPFC Vessel Certification Program data on the historical 
number of annual notices of guaranty termination by guarantors, the 
Coast Guard estimates that there will be 4,000 vessels per year for the 
10-year analysis period.
    Reporting vessel name change and increased reporting on location of 
vessel when there is a change in ownership on date of change.
    Based on NPFC Vessel Certification Program historical data, the 
Coast Guard estimates that there will be 1,000 submissions on vessel 
name changes and change in location when there is a change in ownership 
per year.
    Burden of Response:
    Reporting of gross tonnage measurement systems used and submission 
of copy of the tonnage certifying document, upon request.
    Reporting the gross tonnage measurement systems used with the 
application and/or requests for COFR renewal will result in a 
negligible burden (less than one minute of time) to the COFR Operator 
and will be completed with the Application for or request for renewal 
of the COFR.
    Based on estimates received from COFR insurance guarantors who will 
submit, upon request, a copy of the tonnage certifying document on 
behalf of the COFR Operator, COFR Operators will require 15 minutes 
(0.25 hours) per submission.
    Reporting of reason for termination of guaranty by a guarantor.
    The Coast Guard estimated that it will take 5 minutes (0.08 hours) 
for the guarantor to add the reason why the guaranty was terminated to 
the information they provide to the Coast Guard already when he or she 
terminates a guaranty.
    Reporting vessel name change and increased reporting on location of 
vessel when there is a change in ownership on date of change.
    The Coast Guard estimated that it will take an additional 5 minutes 
(0.08 hours) per submission to provide additional information that is 
not already required under the current rule.
    Estimate of Total Annual Burden:
    Reporting of gross tonnage measurement systems used and submission 
of copy of the tonnage certifying document, upon request.
    As stated above in the cost benefit analysis section of the 
preamble, we do not quantify the cost impact of reporting the gross 
tonnage measurement systems used because it is negligible and is 
provided as part of the Application and/or request for COFR renewal.
    The cost burden associated with COFR Operators providing, upon 
request, their tonnage certifying document is calculated as follows:

Number submissions per year x Number of hours x labor cost per hour:
12 x 0.25 hours per submission = 3 hours
3 hours per year x $36.64 per hour = $110 per year

    Reporting of reason for termination of guaranty by a guarantor.

Number of terminations per year x number of hours per submission x 
labor cost per hour:
4,000 submissions per year x 0.08 hours per submission x $36.64 per 
hour = $11,725 per year

    Reporting vessel name change and increased reporting on location of 
vessel when there is a change in ownership on date of change.

Number of submissions per year x number of hours per submission x labor 
cost per hour:
1,000 submissions per year x 0.08 hours per submission x $36.64 per 
hour = $2,931 per year
Summary of Information Collection Burden
    Table 6 shows the incremental collection burden of the proposed 
rule and the total proposed collection of information burden for OMB 
Control Number 1625-0046.

  Table 6--Incremental Collection of Information Burden of the Rule and
 the Total Collection of Information Burden for OMB Control Number 1625-
                                  0046
------------------------------------------------------------------------
                                                              Dollars
                                               Hours         (annual)
------------------------------------------------------------------------
            Incremental Collection of Information of the Rule
------------------------------------------------------------------------
Reporting of gross tonnage measurement                 3            $110
 systems used, and submission of copy of
 the tonnage certifying document........
------------------------------------------------------------------------
Reporting of reason for termination of               320          11,725
 guaranty by a guarantor................
Reporting vessel name change and                      80           2,931
 increased reporting on location of
 vessel when there is a change in
 ownership on date of change............
                                         -------------------------------
    Total...............................             403          14,766
------------------------------------------------------------------------

[[Page 68138]]

 
  Total Proposed Collection of Information for OMB Control Number 1625-
  0046 (Approved Collection of Information + Incremental Collection of
                         Information of the Rule
------------------------------------------------------------------------
Approved Collection of Information OMB             3,400          88,500
 Control Number-0046....................
------------------------------------------------------------------------
Incremental Collection of Information of             403          14,766
 the Rule...............................
                                         -------------------------------
    Total...............................           3,803         103,266
------------------------------------------------------------------------

    As required by 44 U.S.C. 3507(d), we will submit a copy of this 
rule to OMB for its review of the collection of information.
    You are not required to respond to a collection of information 
unless it displays a currently valid OMB control number. OMB has not 
yet completed its review of this collection. Before the Coast Guard 
could enforce the collection of information requirements in this rule, 
OMB would need to approve the Coast Guard's request associated with 
this rule to collect this information. After OMB completes action on 
our information collection request, we will publish a Federal Register 
notice describing OMB's decision.

E. Federalism

    A rule has implications for federalism under Executive Order 13132 
(Federalism) if it has a substantial direct effect on States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. We have analyzed this rule under Executive Order 13132 and 
have determined that it is consistent with the fundamental federalism 
principles and preemption requirements described in Executive Order 
13132. Our analysis follows.
    It is well settled that States may not regulate in categories 
reserved for regulation by the Coast Guard. It is also well settled 
that the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 
(design, construction, alteration, repair, maintenance, operation, 
equipping, personnel qualification, and manning of vessels), as well as 
the reporting of casualties and any other category in which Congress 
intended the Coast Guard to be the sole source of a vessel's 
obligations, are within the field foreclosed from regulation by the 
States. See the Supreme Court's decision in United States v. Locke and 
Intertanko v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). Therefore, 
because the States may not regulate within these categories, this rule 
is consistent with the fundamental federalism principles and preemption 
requirements described in Executive Order 13132. Our analysis follows.
    This rulemaking is based on provisions in OPA 90 and CERCLA; 33 
U.S.C. 2716 and 42 U.S.C. 9608, respectively. This rule amends Coast 
Guard regulations on vessel evidence of financial responsibility and 
removes certain unnecessary pollution fund regulations. The OPA 90 
contains a savings clause that saves to the States the ability to 
regulate activities contained in Title I of OPA 90, including vessel 
evidence of financial responsibility requirements. See 33 U.S.C. 2718; 
United States v. Locke and Intertanko v. Locke, 529 U.S. 89, 105, 120 
S.Ct. 1135, 1146 (2000). Thus, nothing in this rule preempts states 
from regulating vessel evidence of financial responsibility 
requirements for oil pollution. However, CERCLA contains an express 
preemption provision which prohibits States, except under limited 
circumstances, from requiring vessels to establish or maintain evidence 
of financial responsibility in connection with liability for the 
release of a hazardous substance if those vessels maintain evidence of 
the financial responsibility required under that subchapter (42 U.S.C. 
9614(d)). Thus, except under limited circumstances, States cannot 
regulate requirements for vessel evidence of financial responsibility 
requirements for hazardous material pollution. The removal of 33 CFR 
part 135 and subpart D of part 153 removes certain federal pollution 
fund's regulatory requirements that were superseded by OPA 90 and 
subsumed by the OSLTF. As the rule clarifies but does not alter the 
existing, applicable federal law relating to pollution funds, it will 
not have preemptive impact. Therefore, this rule is consistent with the 
fundamental federalism principles and preemption requirements described 
in Executive Order 13132.

F. Unfunded Mandates

    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 (adjusted for 
inflation) or more in any one year. Although this rule will not result 
in such expenditure, we do discuss the effects of this rule elsewhere 
in this preamble.

G. Taking of Private Property

    This rule will not cause a taking of private property or otherwise 
have taking implications under Executive Order 12630 (Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights).

H. Civil Justice Reform

    This 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 rule under Executive Order 13045 (Protection 
of Children from Environmental Health Risks and Safety Risks). This 
rule is not an economically significant rule and will not create an 
environmental risk to health or risk to safety that might 
disproportionately affect children.

J. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order 
13175 (Consultation and Coordination with Indian Tribal Governments), 
because it will 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

[[Page 68139]]

responsibilities between the Federal Government and Indian tribes.

K. Energy Effects

    We have analyzed this rule under Executive Order 13211 (Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use). We have determined that it is not a 
``significant energy action'' under that order because it is not a 
``significant regulatory action'' under Executive Order 12866 and is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

L. Technical Standards

    The National Technology Transfer and Advancement Act, codified as a 
note to 15 U.S.C. 272, directs agencies to use voluntary consensus 
standards in their regulatory activities unless the agency provides 
Congress, through OMB, with an explanation of why using these standards 
will 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 rule does not use technical standards. Therefore, we did not 
consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this rule under Department of Homeland Security 
Management Directive 023-01, Rev. 1, associated implementing 
instructions, and Environmental Planning COMDTINST 5090.1 (series), 
which guide the Coast Guard in complying with the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made 
a determination that this action is one of a category of actions that 
do not individually or cumulatively have a significant effect on the 
human environment. A Record of Environmental Consideration supporting 
this determination is available in the docket. For instructions on 
locating the docket, see the ADDRESSES section of this preamble. This 
rule is categorically excluded under paragraph L53 of Appendix A, Table 
1 of DHS Instruction Manual 023-01-001-01, Rev 1. Paragraph L53 
pertains to congressionally mandated regulations designed to improve or 
protect the environment. This rule involves expanding vessel financial 
responsibility to include tank vessels greater than 100 gross tons but 
less than or equal to 300 gross tons, clarifying and updating the 
rule's reporting requirements, conforming the rule to current practice, 
and removing two superseded regulations.

List of Subjects

33 CFR Part 135

    Administrative practice and procedure, Continental shelf, 
Insurance, Oil pollution, Reporting and recordkeeping requirements.

33 CFR Part 138

    Hazardous materials transportation, Insurance, Oil pollution, 
Reporting and recordkeeping requirements, Vessels, Water pollution 
control.

33 CFR Part 153

    Hazardous substances, Oil pollution, Reporting and recordkeeping 
requirements, Water pollution control.

    For the reasons discussed in the preamble, the Coast Guard amends 
33 CFR chapter 1 as follows:

PART 135--[REMOVED]

0
1. Under the authority of 14 U.S.C. 503, part 135 is removed.

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

0
2. The authority citation for part 138 is revised to read as follows:

    Authority: 6 U.S.C. 552(d); 33 U.S.C. 2704, 2716, 2716a; 42 
U.S.C. 9608, 9609; E.O. 12580, Sec. 7(b), 3 CFR, 1987 Comp., p. 193; 
E.O. 12777, Secs. 4 and 5, 3 CFR, 1991 Comp., p. 351, as amended by 
E.O. 13286, Sec. 89, 3 CFR, 2004 Comp., p. 166, and by E.O. 13638, 
Sec. 1, 3 CFR, 2014 Comp., p.227; Department of Homeland Security 
Delegation Nos. 00170.1, Revision 01.2 and 5110, Revision 01. 
Section 138.40 also issued under the authority of 46 U.S.C. 2103 and 
14302.


0
3. Revise the part heading to read as set forth above.

0
4. Revise subpart A to read as follows:
Subpart A--Evidence of Financial Responsibility for Water Pollution 
(Vessels)
Sec.
138.10 Scope and purpose.
138.20 Applicability.
138.30 Definitions.
138.40 General requirements.
138.50 How to apply vessel gross tonnages.
138.60 Forms and submissions; ensuring submission timeliness.
138.70 Issuance and renewal of COFRs.
138.80 Applying for COFRs.
138.90 Renewing COFRs.
138.100 How to calculate a total applicable amount.
138.110 How to establish and maintain evidence of financial 
responsibility.
138.120 Fees.
138.130 Agents for Service of process.
138.140 Application withdrawals, COFR denials and revocations.
138.150 Reporting requirements.
138.160 Non-owning COFR Operator's responsibility for 
identification.
138.170 Enforcement.

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


Sec.  138.10   Scope and purpose.

    (a) Scope. This subpart sets forth--
    (1) The requirements and procedures each COFR Operator (as defined 
in Sec.  138.30(b)) must use to establish and maintain the evidence of 
financial responsibility required by the OPA 90 and CERCLA (both 
defined in Sec.  138.30), and to obtain Certificates of Financial 
Responsibility (COFR);
    (2) The standards and procedures the Coast Guard uses to determine 
the acceptability of guarantors;
    (3) The procedures guarantors must use to submit evidence of 
financial responsibility on behalf of the responsible parties for 
vessels to which this subpart applies;
    (4) The requirements for designating and maintaining U.S. agents 
for service of process;
    (5) The requirements for reporting changes affecting compliance 
with this subpart; and
    (6) The enforcement actions that may result from non-compliance 
with this subpart or OPA 90, CERCLA, or both, referenced in paragraph 
(a)(1) of this section.
    (b) Purpose. These requirements ensure that the responsible parties 
for vessels to which this subpart applies, have sufficient available 
financial resources to cover their potential liabilities to the United 
States and other claimants in the following scenarios:
    (1) Under OPA 90 in the event of a discharge, or substantial threat 
of a discharge, of oil; and
    (2) In the case of vessels greater than 300 gross tons, under 
CERCLA in the event of a release, or threatened release, of a hazardous 
substance.


Sec.  138.20   Applicability.

    (a) Applicability generally. This subpart applies--
    (1) To the COFR Operator of--
    (i) Any vessel over 300 gross tons (except a vessel listed in 
paragraph (d)(1) or (2) of this section) using the navigable waters of 
the United States, or any port or other place subject to the

[[Page 68140]]

jurisdiction of the United States, including any such vessel using a 
deepwater port or other offshore facility subject to the jurisdiction 
of the United States;
    (ii) Any vessel of any size (except a vessel listed in paragraph 
(d)(1) or (3) of this section) using the waters of the Exclusive 
Economic Zone to transship or lighter oil (whether delivering or 
receiving) destined for a place subject to the jurisdiction of the 
United States; and
    (iii) Any tank vessel over 100 gross tons (except a vessel listed 
in paragraph (d)(1) or (3) of this section) using the navigable waters 
of the United States, or any port or other place subject to the 
jurisdiction of the United States, including any such tank vessel using 
a deepwater port or other offshore facility subject to the jurisdiction 
of the United States;
    (2) To a guarantor providing evidence of financial responsibility 
under this subpart on behalf of one or more of a vessel's responsible 
parties;
    (3) To responsible parties other than the COFR Operator designated 
to represent the responsible parties for purposes of this subpart; and
    (4) To any person serving as a U.S. agent for service of process 
under this subpart.
    (b) How to apply this part to mobile offshore drilling units. For 
the purposes of applying the evidence of financial responsibility 
required under OPA 90 and this subpart and the limits of liability set 
forth in subpart B of this part, and in addition to any OPA 90 offshore 
facility evidence of financial responsibility requirements that may 
apply under 30 CFR part 553, a mobile offshore drilling unit is treated 
as--
    (1) A tank vessel when it is being used as an offshore facility; 
and
    (2) A vessel other than a tank vessel when it is not being used as 
an offshore facility.
    (c) How to apply CERCLA evidence of financial responsibility to 
self-propelled vessels. For the purposes of applying the evidence of 
financial responsibility required under CERCLA and for vessels 
identified in paragraph (a)(1)(i) of this section, this subpart applies 
to a self-propelled vessel over 300 gross tons even if it does not 
carry hazardous substances.
    (d) Exceptions. (1) This subpart does not apply to public vessels.
    (2) Paragraph (a)(1)(i) of this section does not apply to any non-
self-propelled barge that does not carry oil as cargo or fuel and does 
not carry hazardous substances as cargo.
    (3) Paragraphs (a)(1)(ii) and (iii) of this section do not apply 
to: any offshore supply vessel; any fishing vessel or fish tender 
vessel of 750 gross tons or less that transfers fuel without charge to 
a fishing vessel owned by the same person; any towing or pushing vessel 
(tug) simply because it has in its custody a tank barge; or any tank 
vessel that only carries, or is adapted to carry, non-liquid hazardous 
material in bulk as cargo or cargo residue.


Sec.  138.30   Definitions.

    (a) As used in this subpart, the following terms have the meanings 
set forth in--
    (1) OPA 90 (specifically in 33 U.S.C. 2701): Claim, claimant, 
damages, deepwater port, discharge, Exclusive Economic Zone, facility, 
incident, liable or liability, mobile offshore drilling unit, navigable 
waters, offshore facility, oil, owner or operator, person, remove, 
removal, removal costs, responsible party, tank vessel, United States, 
and vessel; and
    (2) CERCLA (42 U.S.C. 9601): Claim, claimant, damages, facility, 
hazardous substance, liable or liability, navigable waters, offshore 
facility, owner or operator, person, remove, removal, United States, 
and vessel.
    (3) 46 CFR 69.9: Convention Measurement System, foreign-flag 
vessel, gross tonnage ITC (GT ITC) \1\ and gross register tonnage 
(GRT), tonnage, and U.S.-flag vessel.
---------------------------------------------------------------------------

    \1\ The acronym ``ITC'' refers to the International Tonnage 
Convention. GT ITC, as defined in 46 CFR 69.9 means the gross 
tonnage measurement of a vessel as applied under the Convention 
Measurement System.
---------------------------------------------------------------------------

    (b) As used in this subpart--
    Applicable amount means an OPA 90 or CERCLA evidence of financial 
responsibility amount determined to apply to a vessel as provided under 
Sec.  138.100.
    Application means an ``Application for Vessel Certificate of 
Financial Responsibility (Water Pollution)'', which the COFR Operator 
for one or more vessels has completed and verified in eCOFR, as 
provided in Sec.  138.60(c)(1)(i), or signed, dated, and submitted to 
the NPFC by one of the submission methods specified in Sec.  
138.60(c)(1)(ii) through (iv).
    Cargo means goods or materials carried on board a vessel for 
purposes of transportation, whether proprietary or nonproprietary. A 
hazardous substance or oil carried solely for use aboard the carrying 
vessel is not cargo.
    CERCLA means the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601, et 
seq.).
    COFR means a current Certificate of Financial Responsibility (Water 
Pollution) issued by the Director, under this subpart, as provided in 
Sec.  138.70, and posted on the NPFC COFR program website https://npfc.uscg.mil/cofr/default.aspx.
    COFR Operator means a responsible party who conducts, or has 
responsibility for, the operation of a vessel to which this subpart 
applies--that is, a person who is an operator as defined in OPA 90 and 
CERCLA, and, when there is more than one responsible party (including 
more than one operator), is the operator designated and authorized by 
all the vessel's responsible parties to act on their behalf for the 
purpose of complying with this subpart, including submitting (or 
causing to be submitted) all Applications and requests for COFR 
renewal, evidence of financial responsibility and reports, and payment 
of all fees required by Sec.  138.120.
    (i) If a vessel has one owner and is operated by that owner, or the 
owner controls and is responsible for the vessel's operation, the owner 
is the COFR Operator. In all other cases the person who operates, or 
controls and is principally responsible for the operation of, the 
vessel (for example, the demise charterer) is the COFR Operator.
    (ii) A person who is responsible, or who agrees by contract to 
become responsible, for a vessel in the capacity of a builder, 
repairer, or scrapper, or for the purpose of holding the vessel out for 
sale or lease, is the COFR Operator. A person who takes possession of, 
or responsibility for, a newly built, modified, or repaired vessel from 
a builder or repairer, or who purchases and operates or becomes a 
demise charterer of a vessel held out for sale or lease, is the COFR 
Operator.
    (iii) A time or voyage charterer who does not assume responsibility 
for the operation of a vessel is not a COFR Operator for purposes of 
this subpart.
    (iv) The designation of an operator to act as the COFR Operator on 
behalf of a vessel's responsible parties for purposes of this subpart 
does not limit who may be determined to be an operator under OPA 90, 
CERCLA, or both, in the event of an incident or a release.
    Day or days means calendar days unless otherwise specified.
    Director means the person in charge of the U.S. Coast Guard, 
National Pollution Funds Center (NPFC), or that person's authorized 
representative.
    eCOFR means the electronic Certificate of Financial Responsibility 
web-based process located on the NPFC COFR program website, https://npfc.uscg.mil/cofr/default.aspx, and is

[[Page 68141]]

the process COFR Operators may use to apply for and renew COFRs.
    Evidence of financial responsibility means the demonstration of the 
financial ability of the responsible parties for a vessel to which this 
subpart applies to meet their potential liabilities under OPA 90, 
CERCLA, or both, up to the total applicable amount determined as 
provided under Sec.  138.100.
    Financial guarantor is a type of guarantor and means a business 
entity or other person providing a financial guaranty under Sec.  
138.110(c). A financial guarantor is distinct from a COFR insurance 
guarantor, a self-insurer, or a surety. A self-insurer, however, may 
also serve as a financial guarantor for others.
    Fish tender vessel and fishing vessel have the same meanings as set 
forth in 46 U.S.C. 2101.
    Fleet Certificate means a COFR issued by the Director under this 
subpart to the COFR Operator of a fleet of 2 or more unmanned, non-
self-propelled barges that are not tank vessels and that, from time to 
time, may be subject to this subpart (for example, a hopper barge over 
300 gross tons when carrying oily metal shavings or similar cargo). A 
Fleet Certificate covers, automatically, all unmanned, non-self-
propelled, non-tank barges for which the COFR Operator may from time to 
time be responsible that does not exceed the maximum gross tonnage 
indicated on the Fleet Certificate.
    Fuel means any oil or hazardous substance used, or capable of being 
used, to produce heat or power by burning, including power to operate 
equipment. A hand-carried pump with no more than 5 gallons of fuel 
capacity, that is neither integral to nor regularly stored aboard a 
non-self-propelled barge, is not equipment.
    Guarantor means any person who has been determined to be acceptable 
by the Director, as provided in Sec.  138.110, and who is providing 
evidence of financial responsibility on behalf of one or more of a 
vessel's responsible parties, other than as a responsible party 
providing self-insurance under Sec.  138.110(d).
    Hazardous material has the same meaning as set forth in 46 U.S.C. 
2101.
    Individual Certificate means a COFR issued by the Director under 
this subpart to the COFR Operator for a single vessel.
    Insurance guarantor is a type of guarantor and means an insurance 
company, association of underwriters, ship owners' protection and 
indemnity association, or other person, serving as a guarantor under 
Sec.  138.110(b). An insurance guarantor is distinct from a self-
insurer, a financial guarantor, or a surety.
    Master Certificate means a COFR issued by the Director under this 
subpart to the COFR Operator of one or more vessels that are under the 
custody of such person solely in the capacity of a builder, repairer, 
or scrapper, or for the purpose of holding vessels out for sale or 
lease, where such person does not physically operate the vessels. A 
Master Certificate covers, automatically, all of the vessels subject to 
this subpart held by the COFR Operator solely for purposes of 
construction, repair, scrapping, sale or lease. A vessel which is being 
operated commercially in any business venture, including the business 
of building, repairing, scrapping, leasing, or selling (for example, a 
slop barge used by a shipyard) cannot be covered by a Master 
Certificate and must have either a current Individual Certificate or, 
if applicable, a current Fleet Certificate.
    Net worth means the amount of all assets located in the United 
States, less all liabilities anywhere in the world.
    NPFC means the U.S. Coast Guard, National Pollution Funds Center. 
NPFC is the U.S. Government office responsible for administering the 
OPA 90 and CERCLA vessel COFR program.
    Offshore supply vessel has the same meaning as set forth in 46 
U.S.C. 2101.
    OPA 90 means the Oil Pollution Act of 1990, as amended (33 U.S.C. 
2701, et seq.).
    Public vessel means a vessel owned or demise chartered and operated 
by the United States, by a State or political subdivision thereof, or 
by a foreign nation, except when the vessel is engaged in commerce.
    Release, for purposes of this subpart, means a release as defined 
in CERCLA (specifically, 42 U.S.C. 9601), or a threatened release, of a 
hazardous substance.
    Responsible party, for purposes of OPA 90 evidence of financial 
responsibility, has the same meaning as defined at 33 U.S.C. 2701; and, 
for purposes of CERCLA evidence of financial responsibility, means any 
person who is an ``owner or operator,'' as defined at 42 U.S.C. 9601, 
including any person chartering a vessel by demise.
    Self-insurer means a COFR Operator providing evidence of financial 
responsibility as the responsible party of the subject vessel, as 
provided under Sec.  138.110(d). A self-insurer is distinct from a 
guarantor.
    Total applicable amount means an evidence of financial 
responsibility amount that must be demonstrated under this subpart, 
determined as provided in Sec.  138.100.
    Working capital means the amount of current assets located in the 
United States, less all current liabilities anywhere in the world.


Sec.  138.40   General requirements.

    (a) Requirement to establish and maintain evidence of financial 
responsibility. The COFR Operator of a vessel must establish and 
maintain (or cause to be established and maintained) evidence of 
financial responsibility acceptable to the Director using any one of 
the methods specified in Sec.  138.110, in an amount equal to or 
greater than the total applicable amount determined under Sec.  138.100 
and, in the case of a financial guarantor, as further provided under 
Sec.  138.110(c)(2) (aggregation of total applicable amounts). The 
evidence of financial responsibility required by this paragraph must 
be--
    (1) Established as of the date they become a responsible party; and
    (2) Continuously maintained for so long as they remain a 
responsible party.
    (b) Requirement to have a COFR and report changes. The COFR 
Operator must apply for and ensure the vessel is covered at all times 
by a current COFR, by complying with the requirements and procedures 
set forth in this subpart, including the reporting requirements in 
Sec.  138.150.


Sec.  138.50   How to apply vessel gross tonnages.

    (a) Purpose. This section sets forth the methods for applying 
vessel gross tonnage to--
    (1) Determine whether a vessel exceeds the 100 or 300 gross ton 
threshold under Sec.  138.20 and OPA 90, CERCLA, or both;
    (2) Calculate the OPA 90 and CERCLA applicable amounts of financial 
responsibility required, as provided in Sec.  138.100; and
    (3) Determine the OPA 90 limit of liability under subpart B of this 
part in the event of an oil pollution incident, and the CERCLA limit of 
liability under 42 U.S.C. 9607 in the event of a hazardous substance 
release.
    (b) Both GT ITC and GRT assigned. For a vessel assigned both gross 
tonnage ITC (GT ITC) and gross register tonnage (GRT) under 46 CFR part 
69, apply the tonnage thresholds in Sec.  138.20 using the assigned GRT 
tonnage, and determine the applicable amounts of financial 
responsibility and the limits of liability using the assigned GT ITC 
tonnage.
    (c) GT ITC or GRT assigned. For a vessel assigned only a GT ITC or 
a GRT tonnage under 46 CFR part 69, apply the tonnage thresholds in 
Sec.  138.20, and

[[Page 68142]]

determine the applicable amounts of evidence of financial 
responsibility and the limits of liability using the assigned GT ITC or 
GRT tonnage.
    (d) High or low GRT assigned. For a vessel assigned a high and low 
GRT tonnage under 46 CFR part 69, subpart D (Dual Regulatory 
Measurement System), apply the tonnage thresholds in Sec.  138.20, and 
determine the applicable amounts of financial responsibility and the 
limits of liability, using the high GRT tonnage.
    (e) Summary. The use of assigned gross tonnages, as required by 
paragraphs (b) through (d) of this section, is summarized in the 
following table.

                           Table 1 to Sec.   138.50(e)--Use of Assigned Gross Tonnages
----------------------------------------------------------------------------------------------------------------
                                                                Assigned tonnage
                               ---------------------------------------------------------------------------------
           Category             To apply the tonnage thresholds in Sec.   To determine applicable amounts under
                                                  138.20                  Sec.   138.100 and limits of liability
----------------------------------------------------------------------------------------------------------------
Vessels Assigned Both GT ITC    GRT....................................  GT ITC.
 and GRT.
Vessels Assigned--
    GT ITC only...............  GT ITC.................................  GT ITC.
GRT only......................  GRT....................................  GRT.
----------------------------------------------------------------------------------------------------------------

    (f) Certified gross tonnage governs. In the event of an incident or 
release, the responsible parties and guarantors are governed by the 
vessel's assigned gross tonnage on the date of the incident. This is as 
determined under paragraphs (b) through (e) of this section and 
evidenced on the appropriate tonnage certifying document as provided 
for under the U.S. tonnage regulations or international conventions 
(for example, tonnage certificate or completed Simplified measurement 
application, International Tonnage Certificate (1969)), regardless of 
what gross tonnage is specified in the Application or guaranty form 
submitted under this subpart, except when the responsible parties or 
guarantors knew or should have known that the tonnage certificate 
information was incorrect (see also Sec.  138.110(h)(1)(iii)).
    (g) Requirement to present tonnage certifying document(s). Each 
COFR Operator must submit to the Director, or other authorized United 
States Government official, upon request, for examination and copying, 
the original or an unaltered and legible electronic copy of the 
vessel's applicable tonnage certifying document(s).


Sec.  138.60   Forms and submissions; ensuring submission timeliness.

    (a) Where to obtain forms. All forms referred to in this subpart 
are available at the NPFC COFR program website, https://npfc.uscg.mil/cofr/default.aspx, and may be completed online or downloaded.
    (b) Where to obtain information. Direct all questions concerning 
the requirements of this subpart to the NPFC at one of the addresses in 
paragraphs (c)(1)(ii) through (iv) of this section or by calling the 
NPFC at 202-795-6130.
    (c) How to present Applications and other required submissions. (1) 
Provide all submissions required by this subpart to the Director, by 
one of the following four methods:
    (i) Electronically, using the eCOFR process (located at https://npfc.uscg.mil/cofr/default.aspx);
    (ii) By email, sent to such email address as the Director may 
specify, attaching legible electronic images scanned in a format 
acceptable to the Director;
    (iii) By fax, sent to 202-795-6123 with a cover sheet specifying 
the total number of pages, the sender's telephone number, and 
referencing NPFC telephone number 202-795-6130; or
    (iv) By mail, addressed to--
    Director, National Pollution Funds Center, ATTN: VESSEL 
CERTIFICATION, U.S. Coast Guard Stop 7605, 2703 Martin Luther King Jr. 
Ave. SE, Washington, DC 20593-7605.
    (2) Submissions may not be hand delivered to the NPFC.
    (3) Do not present submissions by more than one method.
    (d) Required contents of submissions. Unless otherwise instructed 
by the Director, all submissions required by this subpart must--
    (1) Set forth, in full, the correct legal name of the COFR Operator 
to whom the COFR is to be, or has been, issued;
    (2) Be in English, and
    (3) Express all monetary terms in United States dollars.
    (e) Ensuring the timeliness of submissions; requesting deadline 
exceptions. (1) Compliance with a submission deadline will be 
determined based on the day the submission is received by NPFC. If a 
deadline specified in this subpart falls on a weekend or Federal 
holiday, the deadline will occur on the next business day.
    (2) Ensuring the timeliness of the submissions is the sole 
responsibility of the person making the submission.
    (3) The Director may, in the Director's sole discretion, grant an 
exception to a deadline specified in this subpart for good cause shown.
    (f) Public access to information. Financial data and other 
information submitted to the Director is considered public information 
to the extent required by the Freedom of Information Act (5 U.S.C. 552) 
and permitted by the Privacy Act (5 U.S.C. 552(a)).


Sec.  138.70   Issuance and renewal of COFRs.

    (a) Types of COFRs. The Director issues the following three types 
of COFRs as provided further in Sec.  138.80: Individual Certificates, 
Fleet Certificates and Master Certificates.
    (b) Requirements before issuance and renewal of COFRs. The Director 
will issue or renew a COFR only after NPFC receives a completed 
Application or request for COFR renewal, and satisfactory evidence of 
financial responsibility.
    (c) COFRs are issued only to designated COFR Operators. Each COFR 
of any type is issued only in the name of the COFR Operator designated 
in the Application or request for COFR renewal.
    (d) Form of issuance. All COFRs are issued by the Director in 
electronic form on NPFC's COFR program website (https://npfc.uscg.mil/cofr/default.aspx) for a term of no more than 3 years from the date of 
issuance.
    (e) Information included in COFRs. The following information is 
available on NPFC's COFR program website for each COFR issued by the 
Director:
    (1) The name of the COFR Operator;
    (2) The date of COFR expiration;
    (3) The COFR number;
    (4) For an Individual Certificate, the name of the covered vessel, 
and the

[[Page 68143]]

vessel's gross tonnage information, including the measurement system(s) 
used;
    (5) For a Fleet Certificate, the gross tons of the largest 
unmanned, non-self-propelled, non-tank barge within the fleet, 
including the measurement systems(s) used; and
    (6) For a Master Certificate, the gross tons of the largest tank 
vessel and largest vessel other than a tank vessel eligible for 
coverage by the Master Certificate, including the measurement 
systems(s) used.


Sec.  138.80   Applying for COFRs.

    (a) How to apply for a COFR. To apply for a COFR of any type, the 
COFR Operator must--
    (1) Submit, or cause to be submitted, to the Director, by one of 
the submission methods provided in Sec.  138.60(c):
    (i) An Application;
    (A) For an Individual Certificate, list the name of the covered 
vessel, and the vessel's gross tonnage information, including the 
measurement system(s) used on the application;
    (B) For a Fleet Certificate, instead of listing each individual 
barge, mark the box with the following statement: ``This is an 
Application for a Fleet Certificate. The largest unmanned, non-self-
propelled, non-tank barge to be covered by this Application is [INSERT 
APPLICABLE GROSS TONS] GT ITC and [INSERT GROSS TONNAGE] GRT''; and
    (C) For a Master Certificate, instead of listing each individual 
vessel, mark the box with the following statement: ``This is an 
Application for a Master Certificate. The largest tank vessel to be 
covered by this Application is [INSERT APPLICABLE GROSS TONS] GT ITC 
and [INSERT APPLICABLE GROSS TONS] GRT, as applicable. The largest 
vessel other than a tank vessel to be covered by this Application is 
[INSERT APPLICABLE GROSS TONS] GT ITC and [INSERT APPLICABLE GROSS 
TONS] GRT, as applicable.''
    (ii) The evidence of financial responsibility using one of the 
guaranty methods provided in Sec.  138.110;
    (A) For a Fleet Certificate, the evidence of financial 
responsibility must be in the total applicable amount, determined as 
provided in Sec.  138.100, for the largest unmanned, non-self-
propelled, non-tank barge to be covered.
    (B) For a Master Certificate, the evidence of financial 
responsibility must be in the total applicable amount determined as 
provided in Sec.  138.100 for the largest tank vessel and largest non-
tank vessel to be covered by the Master Certificate.
    (iii) The agent for service of process designations required by 
Sec.  138.130; and
    (iv) All other supporting documentation required by this subpart.
    (A) At the time of Application for a Master Certificate, the COFR 
Operator must submit a report to the Director, indicating: the name; 
previous name, if applicable; type; gross tonnage and measurement 
system(s) used, for each vessel covered by the Master Certificate, 
indicating which vessels, if any, are tank vessels. If a vessel has 
both a GT ITC and GRT tonnage, specify both gross tonnages.
    (B) Six months after receiving a Master Certificate, and every 6 
months thereafter, each COFR Operator must submit to the Director, an 
updated report, separately listing the vessels no longer covered by 
that Master Certificate. If a vessel has both a GT ITC and GRT, both 
gross tonnages must be specified. If a vessel has been transferred to 
another responsible party and the COFR Operator to whom the Master 
Certificate was issued ceases to be the vessel's operator, the COFR 
Operator must report the date and place of the transfer, and the name 
and contact information of the responsible party to whom the vessel was 
transferred. If the vessels covered by the Master Certificate have not 
changed from the previous report, the COFR Operator may submit an 
updated report that indicates no change from previous report.
    (2) Pay, or cause to be paid, all fees required by Sec.  138.120.
    (b) Application deadline. The Director must receive the 
Application, evidence of financial responsibility, and other required 
supporting documentation, at least 21 days prior to the date the 
Certificate is required. The COFR Operator may seek an exception to the 
21-day submission deadline only as provided in Sec.  138.60(e)(3).
    (c) Where to obtain Application forms. COFR Operators may create an 
Application using the online eCOFR web process (located at https://npfc.uscg.mil/cofr/default.aspx) or, if not using eCOFR, may obtain an 
``Application for Vessel Certificate of Financial Responsibility (Water 
Pollution)'' at the same website.
    (d) Requirement to verify, or sign and date, the Application. (1) 
The COFR Operator must complete and either verify the Application in 
eCOFR as provided in Sec.  138.60(c)(1)(i) or, if not using eCOFR, sign 
and date the hard-copy signature page of the Application and submit the 
signed Application to the Director, by one of the methods specified in 
Sec.  138.60(c)(1)(ii) through (iv).
    (2) The Application must include the title of the person signing 
it.
    (3) If the person signing the Application is acting under a Power 
of Attorney, they must include a copy of the Power of Attorney with the 
Application.
    (e) Requirement to update Applications. The COFR Operator must 
report any changes to the Application to the Director in writing, no 
later than 5 business days after discovery of the change. The Director 
may require that the COFR Operator submit a revised Application and 
provide additional evidence of financial responsibility, and pay any 
additional fees required by Sec.  138.120.
    (f) Amending Fleet and Master Certificates. Before operating a 
barge or vessel that exceeds the maximum gross tonnage indicated on the 
COFR, the COFR Operator must:
    (1) Submit a new or amended Application, or a written request to 
supplement the Application, to reflect the new maximum gross tonnages 
on the COFR;
    (2) Unless the COFR Operator qualifies as a self-insurer at the 
higher total applicable amount, submit, or cause to be submitted, 
evidence of financial responsibility using one of the guaranty methods 
provided in Sec.  138.110 to the Director, demonstrating increased 
coverage based on the new maximum gross tonnage; and
    (3) Pay a new certification fee, as required by Sec.  138.120.


Sec.  138.90   Renewing COFRs.

    (a) The COFR Operator must submit a request for COFR renewal to the 
NPFC at least 21 days, but no earlier than 90 days, before the 
expiration date of the current COFR.
    (b) The COFR Operator may seek an exception to the 21-day request 
for COFR renewal submission deadline in paragraph (a) of this section 
only as provided in Sec.  138.60(e)(3).
    (c) The COFR Operator must identify in the request for COFR renewal 
all changes to the information contained in the initial Application, 
including the gross ton measurement system(s) used (if not previously 
provided), the evidence of financial responsibility, and all other 
supporting documentation previously submitted to the Director, as 
provided in Sec.  138.150.


Sec.  138.100   How to calculate a total applicable amount.

    The total applicable amount is the sum of the OPA 90 applicable 
amount determined under paragraph (a) of this section plus the CERCLA 
applicable amount determined under paragraph (b) of this section.

[[Page 68144]]

    (a) OPA 90 applicable amount. The applicable amount under OPA 90 is 
equal to the applicable limit of liability determined as provided in 
subpart B of this part.
    (b) CERCLA applicable amount. The applicable amount under CERCLA is 
determined as follows:
    (1) For a vessel over 300 gross tons carrying a hazardous substance 
as cargo, and for any vessel covered under Sec.  138.110(c)(3) or 
(d)(2)(ii) (calculation of CERCLA applicable amounts for financial 
guarantors and self-insurers), the greater of $5,000,000 or $300 per 
gross ton.
    (2) For any other vessel over 300 gross tons, the greater of 
$500,000 or $300 per gross ton.
    (c) Amended applicable amounts. If an applicable amount determined 
under paragraph (a) or (b) of this section is amended by statute or 
regulation, the COFR Operator must establish and maintain evidence of 
financial responsibility in an amount equal to or greater than the 
amended total applicable amount, as provided in Sec.  138.240(a).
    (d) OPA 90 and CERCLA applicable amounts and limits of liability. 
The responsible parties are strictly, jointly and severally liable, for 
the costs and damages resulting from an incident or a release, but 
together they need only establish and maintain an amount of financial 
responsibility equal to the single limit of liability per incident or 
release. Only that portion of the evidence of financial responsibility 
under this subpart with respect to--
    (1) OPA 90 is required to be made available by a guarantor for the 
costs and damages related to an incident where there is not also a 
release; and
    (2) CERCLA is required to be made available by a guarantor for the 
costs and damages related to a release where there is not also an 
incident. A guarantor (or a self-insurer for whom the exceptions to a 
limitations of liability are not applicable), therefore, is not 
required to apply the entire amount of financial responsibility to an 
incident involving oil alone or a release involving a hazardous 
substance alone.


Sec.  138.110   How to establish and maintain evidence of financial 
responsibility.

    (a) General requirement; guaranty effective date and termination 
date. The COFR Operator of each vessel must submit, or cause to be 
submitted, to the Director, the evidence of financial responsibility 
required by Sec.  138.40(a) using one of the methods specified in this 
section.
    (1) If submitted on behalf of the COFR Operator, the guarantor must 
provide evidence of financial responsibility to the Director.
    (2) The effective and termination dates are as follows:

    Table 1 to Sec.   138.110(a)(2)--Effective and Termination Dates
------------------------------------------------------------------------
     Type of certificate          Effective date       Termination date
------------------------------------------------------------------------
Individual...................  Guaranty form         30 days after the
Fleet........................   submission date.      date the Director
                               Guaranty form          and the COFR
                                submission date or    Operator receive
                                date COFR Operator    written notice
                                becomes a             from the guarantor
                                Responsible Party     that the guarantor
                                for the vessel.       intends to cancel
                                                      the guaranty for
                                                      that vessel.
Master.......................  Guaranty form
                                submission date or
                                date COFR Operator
                                becomes a
                                Responsible Party
                                for the vessel.
------------------------------------------------------------------------

    (3) Termination provisions:
    (i) The guarantor must specify the reason for terminating the 
guaranty in the notice required by this paragraph, if known.
    (ii) Termination of the guaranty as to any covered vessel will not 
affect the liability of the guarantor in connection with an incident or 
release commencing or occurring prior to the effective date of the 
guaranty termination.
    (4) If, at any time, the information contained in the evidence of 
financial responsibility submitted under this section changes, or there 
is a material change in a guarantor or self-insurer's financial 
position, the guarantor or COFR Operator or self-insurer (as 
applicable), must report the change to the Director, as provided in 
Sec.  138.150.
    (b) Insurance guaranty method. The COFR Operator may establish and 
maintain evidence of financial responsibility using the insurance 
guaranty method by submitting an Insurance Guaranty Form to the 
Director.
    (1) Each form must be executed by no more than four COFR insurance 
guarantors accepted by the Director. A lead underwriter is considered 
one of the COFR insurance guarantors.
    (2) The process for establishing and maintaining the acceptability 
of a COFR insurance guarantor is as follows:
    (i) The COFR insurance guarantor must request an initial 
determination by the Director of the COFR insurance guarantor's 
acceptability to serve as a COFR insurance guarantor under this 
subpart, at least 90 days before the date a COFR is required, by 
submitting information describing the COFR insurance guarantor's 
structure, business practices, history, and financial strength, and 
such other information as may be requested by the Director.
    (ii) The Director reviews the continued acceptability of COFR 
insurance guarantors annually. Each COFR insurance guarantor must 
submit updates to the initial request submitted under paragraph 
(b)(2)(i) of this section, annually, within 90 days after the close of 
the COFR insurance guarantor's fiscal year, describing any material 
changes to the COFR insurance guarantor's legal status, structure, 
business practices, history, and financial strength, since the previous 
year's submission, and providing such other information as may be 
requested by the Director.
    (c) Financial guaranty method. The COFR Operator may establish and 
maintain evidence of financial responsibility using the financial 
guaranty method by submitting a Financial Guaranty Form to the 
Director.
    (1) Each form must be executed by no more than four financial 
guarantors accepted by the Director, at least one of which must be a 
parent or affiliate of the COFR Operator. (See paragraph (g) of this 
section for additional requirements if more than one financial 
guarantor signs the form.)
    (2) The process for establishing and maintaining the acceptability 
of a financial guarantor is as follows:
    (i) The financial guarantor must comply with the self-insurance 
provisions in paragraph (d) of this section, and the periodic reporting 
requirements in paragraphs (e)(1) through (4) of this section.
    (ii) The financial guarantor must also demonstrate that it 
maintains net worth and working capital, each in amounts equal to or 
greater than--
    (A) The aggregate total applicable amounts, calculated for each 
COFR Operator vessel for which the financial guaranty is being 
provided, based on

[[Page 68145]]

each such COFR Operator's vessel with the greatest total applicable 
amount, plus--
    (B) The total applicable amount required to be demonstrated by a 
self-insurer under this subpart if the financial guarantor is also 
acting as a self-insurer.
    (3) In the case of a vessel greater than 300 gross tons, calculate 
the CERCLA applicable amount under Sec.  138.100(b)(1) based on a 
vessel carrying hazardous substances as cargo.
    (d) Self-insurance method. The COFR Operator may establish and 
maintain evidence of financial responsibility using the self-insurance 
method as follows:
    (1) Submit to the Director the financial statements specified in 
paragraphs (e)(1) through (4) of this section for the fiscal year 
preceding the date the COFR Operator signs the Application or request 
for COFR renewal.
    (2) Demonstrate that the COFR Operator maintains, in the United 
States, working capital and net worth, each in amounts equal to or 
greater than the total applicable amount, calculated as follows:
    (i) If the self-insurer has multiple vessels, calculate the total 
applicable amount based on the vessel with the greatest total 
applicable amount.
    (ii) In the case of a vessel greater than 300 gross tons, calculate 
the CERCLA applicable amount under Sec.  138.100(b)(1) based on a 
vessel carrying hazardous substances as cargo.
    (e) Reporting requirements for self-insurers and financial 
guarantors. (1) Each self-insurer and financial guarantor must submit 
the following reports to the Director with the Application and annually 
thereafter, within the deadlines specified in paragraph (e)(4) of this 
section:
    (i) Submit the self-insurer or financial guarantor's annual, 
current, and audited non-consolidated financial statements prepared in 
accordance with Generally Accepted Accounting Principles, and audited 
by an independent Certified Public Accountant in accordance with 
Generally Accepted Auditing Standards.
    (ii) Accompany the financial statements with a declaration from the 
self-insurer or financial guarantor's chief financial officer, 
treasurer, or equivalent official, certifying the amount of the self-
insurer or financial guarantor's current assets, and the amount of the 
self-insurer or financial guarantor's total assets included in the 
accompanying balance sheet, which are located in the United States.
    (iii) If the financial statements cannot be submitted in non-
consolidated form, submit a consolidated statement accompanied by an 
additional declaration prepared by the same Certified Public 
Accountant--
    (A) Verifying the amount by which the total assets located in the 
United States exceed the self-insurer or financial guarantor's total 
(worldwide) liabilities, and the self-insurer or financial guarantor's 
current assets located in the United States exceed the self-insurer or 
financial guarantor's total (worldwide) current liabilities;
    (B) Specifically naming the self-insurer or financial guarantor;
    (C) Confirming that the amounts so verified relate only to the 
self-insurer or financial guarantor, apart from any parent or other 
affiliated entity; and
    (D) Identifying the consolidated financial statement to which it 
applies.
    (2) When the self-insurer or financial guarantor's demonstrated net 
worth is not at least ten times the cumulative total applicable 
amounts, their chief financial officer, treasurer, or equivalent 
official must submit to the Director with the Application and semi-
annually thereafter, within the deadline specified in paragraph (e)(4) 
of this section, an affidavit stating that neither their working 
capital nor net worth fell during the first 6 months of the self-
insurer or financial guarantor's current fiscal year, below the 
cumulative total applicable amounts.
    (3) All self-insurers and financial guarantors must--
    (i) Submit, upon the Director's request, additional financial 
information within the time specified; and
    (ii) Notify the Director in writing within 5 days following the 
date the self-insurer or financial guarantor knows, or has reason to 
know, that its working capital or net worth has fallen below the total 
applicable amounts.
    (4) All required annual financial statements and declarations must 
be submitted to the Director within 90 days after the close of the 
self-insurer or financial guarantor's fiscal year. All required semi-
annual financial statements and declarations must be submitted to the 
Director within 30 days after the close of the applicable 6-month 
period. The Director will grant an extension of the time limits for 
submissions under this paragraph only as provided in Sec.  138.60(e).
    (5) A failure by a self-insurer or financial guarantor to timely 
submit to the Director any statement, data, notification, or other 
submission required may result in the Director denying or revoking the 
COFR, and may prompt enforcement action as provided under Sec.  
138.170.
    (6) The Director may waive the working capital requirement for any 
self-insurer or financial guarantor that--
    (i) Is a regulated public utility, a municipal or higher-level 
governmental entity, or an entity operating solely as a charitable, 
non-profit organization qualifying under the Internal Revenue Code (26 
U.S.C. 501(c)), provided that the self-insurer or financial guarantor 
demonstrates in writing that the waiver would benefit a local public 
interest; or
    (ii) Demonstrates in writing that working capital is not a 
significant factor in the self-insurer or financial guarantor's 
financial condition, in which case the self-insurer or financial 
guarantor's net worth in relation to the required cumulative total 
applicable amounts, and a history of stable operations, are the major 
elements considered by the Director.
    (f) Other guaranty methods for establishing evidence of financial 
responsibility. (1) The COFR Operator may request that the Director 
accept a guaranty method for establishing evidence of financial 
responsibility that is different from one of the methods described in 
paragraphs (b) through (e) of this section as follows:
    (i) The COFR Operator must submit the request to the Director in 
writing, at least 90 days prior to the date the COFR is required.
    (ii) The request must describe in detail: The method proposed; the 
reasons why the COFR Operator does not wish to (or is unable to) use 
one of the methods described in paragraphs (b) through (e) of this 
section; and how the proposed guaranty method assures that the vessel's 
responsible parties have the financial ability to meet their potential 
liabilities under OPA 90 and CERCLA in the event of an incident or a 
release.
    (iii) Each COFR Operator making a request under this paragraph must 
provide the Director a proposed guaranty form that includes all the 
elements described in paragraphs (g) and (h) of this section.
    (2) The Director will not accept a self-insurance method other than 
the one described in paragraph (d) of this section. The Director also 
will not accept a guaranty method under this paragraph that merely 
deletes or alters a requirement or provision of one of the guaranty 
methods described in paragraphs (b) through (e) of this section (for 
example, one that alters the termination clause of the Insurance 
Guaranty).
    (3) A Director's decision to accept an alternative guaranty method 
of establishing evidence of financial responsibility under this 
paragraph is final agency action.

[[Page 68146]]

    (g) Additional rules regarding multiple guarantors. If more than 
one guarantor executes the relevant guaranty form, the following rules 
apply:
    (1) If a guarantor's percentage of vertical participation is 
specified on the relevant guaranty form, the guarantor is subject to 
direct action and is liable for the payment of costs and damages under 
OPA 90 or CERCLA, as applicable, only in accordance with the percentage 
of vertical participation so specified for that guarantor.
    (2) Participation in the form of layering (tiers, one in excess of 
another) is not permitted. Only vertical participation on a percentage 
basis and participation with no specified percentage allocation is 
acceptable.
    (3) If no percentage of vertical participation is specified for a 
guarantor on the relevant guaranty form, the guarantor's liability is 
joint and several for the total of the unspecified portion.
    (4) The participating guarantors must designate a lead guarantor 
having authority to bind all of the participating guarantors for 
actions required of guarantors under OPA 90 or CERCLA and this subpart, 
including but not limited to reporting changes in the evidence of 
financial responsibility as provided in Sec.  138.150(d), receipt of 
source designations, advertisement of source designations and the 
responsible party's claims procedures, and receipt and settlement of 
claims.
    (h) Direct action. (1) Each guarantor providing evidence of 
financial responsibility must submit to the Director a written 
acknowledgment by the guarantor that a claimant (including a claimant 
by right of subrogation) may assert any claim for costs or damages 
arising under OPA 90, CERCLA, or both, directly against the guarantor, 
regardless of whether the claim is asserted in an action in court or 
other proceeding. The guarantor must also acknowledge that, in the 
event a claim is asserted directly against the guarantor under OPA 90, 
CERCLA, or both, the guarantor may invoke only the following rights and 
defenses--
    (i) The incident, release, or both, were caused by the willful 
misconduct of a responsible party for whom the guaranty was provided;
    (ii) All rights and defenses, which would be available to the 
responsible party under OPA 90, CERCLA, or both, as applicable;
    (iii) A defense that the amount of the claim, or all claims 
asserted with respect to the same incident or release, whether asserted 
in court or in any other proceeding, exceeds the amount of the 
guaranty, except when the guaranty is based on the gross tonnage of the 
vessel (instead of the statutory minimums) and the guarantor knew or 
should have known that the applicable tonnage certificate was incorrect 
(see Sec.  138.50(f)); and
    (iv) The claim is not one made under OPA 90, CERCLA, or both.
    (2) Except when the guaranty is based on the gross tonnage of the 
vessel (instead of the statutory minimums) and the guarantor knew or 
should have known that the evidence of financial responsibility or 
applicable tonnage certificate is incorrect (see Sec.  138.50(f)), a 
guarantor who provides evidence of financial responsibility under this 
subpart will be liable, with respect to any one incident or release, or 
both, as applicable, only for the amount of costs and damages specified 
in the evidence of financial responsibility.
    (3) A guarantor will not be considered to have consented to direct 
action under any law other than OPA 90 or CERCLA, or to unlimited 
liability under any law or in any venue, solely because the guarantor 
has provided evidence of financial responsibility under this subpart.
    (4) In the event of any finding that the liability of a guarantor 
under OPA 90 or CERCLA exceeds the amount of the guaranty provided 
under this subpart, that guaranty is considered null and void with 
respect to that excess.
    (i) Process upon disapproval of guarantor. If the Director intends 
to disapprove or revoke the approval of a guarantor (for example, due 
to the guarantor's change in financial position), the Director will 
notify the COFR Operator of the need to establish new evidence of 
financial responsibility within a specified period.
    (1) If the COFR Operator establishes, or causes to be established, 
new acceptable evidence of financial responsibility within the period 
specified by the Director in the notice, the Application if otherwise 
complete will be approved or the COFR will remain in effect, and the 
COFR Operator will not have to pay a new Application fee or 
certification fee.
    (2) If the COFR Operator fails to establish, or cause to be 
established, new acceptable evidence of financial responsibility within 
the period specified by the Director in the notice, the Director may 
deny or revoke the COFR and, if revoked, the COFR Operator will have to 
apply for a new COFR and pay a new certification fee. The COFR 
Operator's failure to establish, or cause to be established, new 
acceptable evidence of financial responsibility within the period 
specified by the Director may also result in enforcement as provided 
under Sec.  138.170.


Sec.  138.120   Fees.

    (a) Fee payment methods. Each COFR Operator applying for a COFR, or 
requesting a COFR renewal, must pay the fees required by paragraphs (b) 
and (c) of this section as follows:
    (1) All fees required by this section must be paid in United States 
dollars.
    (2) For COFR Operators using eCOFR as provided under Sec.  
138.60(c)(1)(i), credit card payment is required.
    (3) For COFR Operators submitting Applications and requests for 
COFR renewal under Sec.  138.60(c)(1)(ii) through (iv) (email, fax, and 
mail submissions), the fees must be paid by a check, cashier's check, 
draft, or postal money order, made payable to the ``U.S. Coast Guard''. 
Cash payments will not be accepted.
    (i) For Applications and requests for COFR renewal submitted under 
Sec.  138.60(c)(1)(ii) and (iii) (email and fax submissions, 
respectively), all fee payments must be received by the Director no 
later than 21 days following submission of the Application or request 
for COFR renewal.
    (ii) For Applications and requests for COFR renewal submitted under 
Sec.  138.60(c)(1)(iv) (mail submissions), all fee payments must be 
enclosed with the Application or request for COFR renewal.
    (4) Any failure to timely pay the fees required by this section may 
result in COFR denial or revocation, debt collection (see 6 CFR part 
11, 44 CFR part 11, and 31 CFR parts 285, and 900 through 904), and 
such other enforcement under Sec.  138.170 as may be appropriate.
    (b) Application fee. (1) Except as provided in paragraph (b)(2) of 
this section, the COFR Operator must pay a non-refundable Application 
fee of $200 for each Application submitted under this subpart (for each 
Application for one or more Individual Certificates, for a Fleet 
Certificate, or for a Master Certificate).
    (2) An Application fee is not required when the COFR Operator 
submits--
    (i) A request for an additional Individual Certificate under an 
existing Application;
    (ii) A request to amend an Application;
    (iii) A request for Certificate renewal; or
    (iv) A request to reinstate a Certificate, if submitted within 90 
days following the Certificate's revocation.
    (c) Certification fees. In addition to the Application fees 
required by paragraph (b) of this section, each COFR

[[Page 68147]]

Operator who submits an Application or request for COFR renewal must 
pay the following certification fees:
    (1) $100 for each vessel listed in, or added to, an Application for 
one or more Individual Certificates;
    (2) $100 for each Application for a Fleet Certificate or Master 
Certificate; and
    (3) $100 for each request for renewal of an Individual Certificate, 
a Fleet Certificate or a Master Certificate.
    (d) Fee refunds. (1) A certification fee will be refunded, upon 
receipt by the Director of a written request, if the Application or 
request for COFR renewal is denied by the Director, or if the 
Application is withdrawn by the COFR Operator before the Director 
issues the COFR.
    (2) Overpayments of Application and certification fees will be 
refunded to the COFR Operator.


Sec.  138.130   Agents for Service of process.

    (a) Designation of U.S. agents for service of process. Each COFR 
Operator and guarantor must designate on the forms submitted a person 
located in the United States as its U.S. agent for service of process 
and (in the event of an incident, a release, or both) for receipt of 
notices of source designation, claims presented under OPA 90, CERCLA, 
or both, and lawsuits brought under OPA 90, CERCLA, or both.
    (b) U.S. agent for service of process acknowledgment. Each U.S. 
agent for service of process designated under paragraph (a) must 
acknowledge the agency designation in writing unless the agent has 
already submitted a written master (that is, blanket) agency 
acknowledgment to the Director showing that the agent has agreed in 
advance to act as the U.S. agent for service of process for the COFR 
Operator or guarantor in question.
    (c) How to change the U.S. agent for service of process. A COFR 
Operator or guarantor may change a designated U.S. agent for service of 
process, at any time and for any reason, by submitting a new U.S. agent 
for service of process designation in accordance with the procedure in 
paragraph (a), and by causing the new U.S. agent for service of process 
to submit the agency acknowledgment required by paragraph (b) of this 
section.
    (d) Replacement of unavailable U.S. agent for service of process. 
In the event a designated U.S. agent for service of process becomes 
unavailable at any time, for any reason, the COFR Operator or guarantor 
must designate a new U.S. agent for service of process in accordance 
with the procedures in paragraph (a), within 5 days of the COFR 
Operator or guarantor becoming aware of such unavailability. In 
addition, the new U.S. agent for service of process must submit to the 
Director the agency acknowledgment required by paragraph (b) of this 
section.
    (e) Service on the Director. If a designated U.S. agent for service 
of process cannot be served, then service of process on the Director, 
as provided in this paragraph, will constitute valid service of process 
on the COFR Operator or guarantor. Service of process on the Director 
will not be effective unless the server--
    (1) Has sent a copy of each document served on the Director to the 
COFR Operator or guarantor, as applicable, by registered mail, at the 
COFR Operator or guarantor's last known address on file with the 
Director;
    (2) Indicates, at the time process is served upon the Director, 
that the purpose of the mailing is to effect service of process on the 
COFR Operator or guarantor; and
    (3) Provides evidence acceptable to the Director at the time 
process is served upon the Director, that service was attempted on the 
designated U.S. agent for service of process but failed, stating the 
reasons why service on the U.S. agent for service of process was not 
possible, and that the document was sent to the COFR Operator or 
guarantor, as required by paragraph (e)(1) of this section.


Sec.  138.140   Application withdrawals, COFR denials and revocations.

    (a) Application withdrawal. A COFR Operator, or anyone authorized 
to act on their behalf, may withdraw an Application at any time prior 
to issuance of the COFR.
    (b) Application denials and COFR revocations. The Director may deny 
an Application or revoke a COFR, and the United States may initiate 
enforcement under Sec.  138.170, for any failure to comply with the 
requirements of this subpart, including--
    (1) If the COFR Operator, or other person acting on the COFR 
Operator's behalf, makes a false statement in, or in connection with, 
any submission required by this subpart;
    (2) If the COFR Operator, or other person acting on the COFR 
Operator's behalf, fails to establish or maintain acceptable evidence 
of financial responsibility, as required by this subpart;
    (3) If the COFR Operator fails to pay the Application and 
certification fees required by Sec.  138.120;
    (4) If the COFR Operator or guarantor fails to designate and 
maintain a U.S. agent for service of process as required by Sec.  
138.130;
    (5) If the COFR Operator, or other person acting on the COFR 
Operator's behalf, fails to comply with, or respond to, lawful 
inquiries, regulations, or orders of the U.S. Coast Guard pertaining to 
the activities subject to this subpart;
    (6) If the COFR Operator, or other person acting on the COFR 
Operator's behalf, fails to timely report information required to be 
reported to the Director under this subpart, including failing to 
timely submit to the Director statements, data, financial information, 
notifications, affidavits, or other submissions required by this 
subpart; or
    (7) If the Director obtains information indicating that the 
Application should be denied or that a new COFR is required (for 
example, a permanent vessel transfer, new COFR Operator, vessel 
renaming, guaranty termination, disapproval of a guarantor).
    (c) Procedure for reinstating COFRs following termination of 
guaranties. If a COFR is revoked by the Director under paragraph (b)(2) 
of this section based on the expiration of 30 days following the date 
the Director receives a guarantor's notice of termination as provided 
under Sec. Sec.  138.110(a)(3) and 138.150(d), the Director may 
reinstate the COFR if the guarantor promptly notifies the Director 
following the revocation that the guarantor rescinded the termination 
and that there was no gap in guarantor coverage.
    (d) Notice to COFR Operator of intent to deny an Application or 
revoke a COFR. If the Director obtains information indicating that an 
Application should be denied or that a COFR should be revoked for 
reasons that the COFR Operator may not be aware of, the Director will 
notify the COFR Operator, in writing, stating the reason for the 
intended action.
    (1) A notice from the Director that an Application is incomplete 
will be considered a denial unless the Application is completed by the 
COFR Operator within the period specified in the notice. A COFR subject 
to revocation remains valid until the COFR is revoked as provided in 
Sec.  138.140(d)(2) and (3).
    (2) If the Director issues a notice of intent to deny an 
Application or revoke a COFR due to a violation under paragraph (b) of 
this section, the COFR Operator may demonstrate compliance to the 
Director in writing by no later than the date specified by the Director 
in the notice. If the COFR Operator demonstrates compliance by that 
date, the Application will remain under consideration, and any current 
COFR will remain in effect, unless and until

[[Page 68148]]

the Director issues a written decision denying the Application or 
revoking the COFR, as applicable. Otherwise, the Application denial or 
COFR revocation is effective as of the date specified by the notice.
    (3) The denial of an Application or revocation of a COFR does not 
terminate the guaranty.
    (e) Request for reconsideration. (1) A COFR Operator may ask the 
Director to reconsider a denial of the COFR Operator's Application or 
the revocation of a COFR as follows:
    (i) The COFR Operator must submit the request for reconsideration, 
in writing, to the Director no later than 21 days after the date of the 
denial or revocation.
    (ii) The submission must state the COFR Operator's reasons for 
requesting reconsideration and include all supporting documentation.
    (2) A decision by the Director on reconsideration of an Application 
denial or a COFR revocation is final agency action. If the Director 
does not issue a written decision on the request for reconsideration 
within 30 days after its submission, the request for reconsideration 
will be deemed to have been denied, and the Application denial or COFR 
revocation will be deemed to have been affirmed as a matter of final 
agency action. Unless the Director issues a decision reversing the 
revocation, the COFR revocation remains in effect.
    (f) Duty to remedy violations. If the COFR for a vessel expires or 
is revoked while the vessel is located in the navigable waters, at any 
port or other place subject to the jurisdiction of the United States, 
or in the Exclusive Economic Zone, the COFR Operator and the vessel's 
other responsible parties will be deemed in violation of this subpart. 
In such event, the COFR Operator or, if unavailable or no longer 
operating the vessel, the vessel's current responsible parties, must 
notify the Director within 24 hours, by email or other electronic 
means. The notice must include the information required by Sec.  
138.150(b) and must establish new evidence of financial responsibility, 
designate a new COFR Operator if applicable, and cure any other 
violation of this subpart.


Sec.  138.150   Reporting requirements.

    (a) Report changes of submitted information. When there is a change 
in any of the facts contained in an Application, a request for COFR 
renewal, evidence of financial responsibility, or other submission made 
under this subpart, the change must be reported, in writing, to the 
Director. The reports required by this section may be submitted with, 
but are in addition to, other submissions required by this subpart (for 
example, Applications, requests for COFR renewal, semi-annual and 
annual financial reports, Master Certificate reports).
    (b) A 21-day prior reporting requirement of permanent vessel 
transfers and other changes requiring issuance of a new COFR. Current 
COFR Operators of vessels, and owners or operators of vessels not 
currently in U.S. navigable waters or the U.S. Exclusive Economic Zone, 
must report to the Director, and (if applicable) to the guarantor, the 
following information, no later than 21 business days before the new 
COFR is required:
    (1) The number of the current COFR;
    (2) The name of the covered vessel;
    (3) The type of change planned;
    (4) The date the change will take place;
    (5) The reason for the change;
    (6) For a vessel that will be located in U.S. navigable waters or 
U.S. Exclusive Economic Zone on the date the change is scheduled to 
take place, where the vessel will be located on that date (for example, 
name and location of port);
    (7) For a vessel name change, the vessel's new legal name;
    (8) For the planned transfer of a vessel to a new responsible 
party, and even if the transferee's intent is to scrap or otherwise 
dispose of the vessel, the name and contact information of the 
responsible party to whom the vessel is being transferred;
    (9) For a change of COFR Operator, the name and contact information 
of the person who will replace the COFR Operator; and
    (10) Any other changes in the information previously submitted to 
ensure the information on record at the NPFC is current.
    (c) Three-day prior reporting of changes not requiring issuance of 
a new COFR. In addition to the prior reporting required by paragraph 
(b) of this section, the COFR Operator must report any change to 
information contained in a submission to the Director that does not 
require issuance of a new COFR, by no later than 3 business days before 
implementing the change, including, but not limited to: Changes to the 
U.S. agent for service of process (other than termination), a change of 
a non-operator vessel owner, new contact information, and changes in 
vessel particulars (for example, flag, measurement, type, and scheduled 
vessel scrapping).
    (d) Reporting by guarantors. Each guarantor (or, if there are 
multiple guarantors, each lead guarantor) must give the Director 30 
days notice before terminating a guaranty as provided in Sec.  
138.110(a)(3), explaining the reason for the intended termination, once 
known, or should have known, in the ordinary course of business.
    (e) Enforcement; deadline exceptions. A failure to timely submit 
the reports required by this section may result in enforcement actions 
as provided in Sec.  138.170. Exceptions to the reporting deadlines 
will only be granted as provided in Sec.  138.60(e).


Sec.  138.160   Non-owning COFR Operator's responsibility for 
identification.

    (a) Each COFR Operator of a vessel with a COFR, other than an 
unmanned, non-self-propelled barge, who is not also an owner of the 
vessel must ensure that the original or a legible copy of the vessel's 
demise charter-party (or other written document on the owner's 
letterhead, signed by the vessel owner, which specifically identifies 
the COFR Operator named on the COFR) is maintained on board the vessel.
    (b) The demise charter-party or other document required by 
paragraph (a) of this section must be presented, upon request, for 
examination and copying, to the Director or other United States 
Government official.


Sec.  138.170   Enforcement.

    (a) Applicability. Any person who fails to comply with the 
requirements of this subpart, including the reporting requirements in 
Sec.  138.150, may be subject to enforcement as provided in this 
section, including if--
    (1) The COFR Operator fails to maintain acceptable evidence of 
financial responsibility as required;
    (2) The name of a covered vessel is changed without reporting the 
change to the Director as required in Sec.  138.150;
    (3) The COFR Operator ceases, for any reason, to be an operator of 
a covered vessel, including when a vessel is scrapped or transferred to 
a new owner or operator, and a new Application and report have not been 
submitted to the Director as required by Sec. Sec.  138.80 and 138.150; 
or
    (4) The COFR Operator fails to maintain a U.S. agent for service of 
process.
    (b) Non-compliance. During a period of non-compliance with this 
subpart, all use by the vessel of the navigable waters of the United 
States, of any port or other place subject to the jurisdiction of the 
United States, or of the Exclusive Economic Zone to transship or 
lighter oil destined for a place subject to the jurisdiction of the 
United States, is forbidden.
    (c) Withholding and revoking vessel clearance. The Secretary of the

[[Page 68149]]

Department of Homeland Security will withhold or revoke the clearance 
required by 46 U.S.C. 60105 of any vessel subject to this subpart that 
does not have a COFR or for which the evidence of financial 
responsibility required has not been established and maintained.
    (d) Denying vessel entry, and detention. The U.S. Coast Guard may 
deny entry to any port or other place in the United States or the 
navigable waters, and may detain at any port or other place in the 
United States in which it is located, any vessel subject to this 
subpart, which does not have a COFR or for which the evidence of 
financial responsibility required by this subpart has not been 
established and maintained.
    (e) Seizure and forfeiture. In accordance with OPA 90, any vessel 
subject to this subpart which is found in the navigable waters without 
a COFR, or for which the necessary evidence of financial responsibility 
has not been established and maintained as required, is subject to 
seizure by, and forfeiture to, the United States.
    (f) Administrative and judicial penalties and other relief. (1) Any 
person who fails to comply with the requirements of this subpart or the 
evidence of financial responsibility requirements of OPA 90, CERCLA, or 
both, including a failure to comply with the reporting requirements in 
Sec.  138.150, is subject to civil administrative and judicial 
penalties under OPA 90 and CERCLA, as applicable. In addition, under 
OPA 90, the Attorney General may secure such relief as may be necessary 
to compel compliance with OPA 90 and this subpart, including 
termination of operations.
    (2) Under 18 U.S.C. 1001, any person making a false statement in, 
or in connection with, a submission under OPA 90 or CERCLA or this 
subpart is subject to prosecution.
    (3) Any person who fails to timely pay the fees required by Sec.  
138.120 or any other amounts due under OPA 90 or CERCLA or this subpart 
may also be subject to Federal debt collection under 6 CFR part 11, 44 
CFR part 11 and 31 CFR parts 285, and 900 through 904.

PART 153--CONTROL OF POLLUTION BY OIL AND HAZARDOUS SUBSTANCES, 
DISCHARGE REMOVAL

0
5. The authority citation for part 153 continues to read as follows:

    Authority:  14 U.S.C. 503; 33 U.S.C. 1321, 1903, 1908; 42 U.S.C. 
9615; 46 U.S.C. 6101; E.O. 12580, 3 CFR, 1987 Comp., p. 193; E.O. 
12777, 3 CFR, 1991 Comp., p. 351; Department of Homeland Security 
Delegation No. 0170.1.

Subpart D--[Removed]

0
6. Subpart D, consisting of Sec. Sec.  153.401 through 153.417, is 
removed.

    Dated: 22 November 2021.
Mark J. Fedor,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Resources.
[FR Doc. 2021-26046 Filed 11-30-21; 8:45 am]
BILLING CODE 9110-04-P


